A.M. No. 04-6-298-RTC - Re: Rosemarie B. Pe

Celso Dico was the registered owner of Lot No. 486 of the Cadiz Cadastre, covering 67,300 square meters under TCT No. 22922.
Lot No. 486 adjoins Lot No. 29-B and Lot No. 1412 (formerly Lot No. 1118-B).
Celso and his wife, Angeles Dico, resided on Lot No. 486 since 1958.
In 1964, Angeles Dico filed a free patent application on a portion of Lot No. 29-B, and Celso Dico similarly filed an application for Lot No. 1412; however, there is no indication that the Bureau of Lands took action on these applications.

Vizcaya Management Corporation (VMC) held title to Lot No. 29-B under TCT No. T-41835, with an area of approximately 369,606 square meters.
VMC’s title to Lot No. 29-B derived from previous registrations involving Eduardo and Cesar Lopez and earlier transfers from the Negros Philippines Lumber Company.
VMC also claimed ownership of Lot No. 1412, now encompassing 85,239 square meters under TCT No. T-41834, based on similar chain of title from the Lopez family.
Additional lots, namely Lot Nos. 1426-B and 1426-C (areas of 6,635 and 6,107 square meters, respectively), were registered in the names of Eduardo and Cesar Lopez who had earlier formed VMC.

In 1967, VMC consolidated and subdivided Lot No. 29-B, Lot No. 1412, Lot No. 1426-B, and Lot No. 1426-C by executing a consolidation-subdivision plan prepared by Engr. Ricardo Quilop.
The approved plan, designated as (LRC) PCS-6611 and approved by LRC Commissioner Antonio L. Noblejas, resulted in four new lots:

VMC utilized Lot No. 1 for the Don Eusebio Subdivision and Lots Nos. 2, 3, and 4 for the Cristina Village Subdivision.
Starting in 1971, VMC sold individual lots within these subdivisions.

In 1981, VMC initiated an unlawful detainer action against the Dicos in the City Court of Cadiz, resulting in a decision ordering the demolition of a water gate on Lot No. 1 of the Cristina Village Subdivision.
The Dicos, unsatisfied with the interference in their purported rights over Lot No. 486 and adjacent lands, filed an action in 1986 for the annulment and cancellation of VMC’s titles and sought reconveyance of Lot Nos. 486, 1412, and an additional Lot No. 489.
During this pending litigation, Celso Dico died and was substituted by his wife, Angeles Dico, and their children per the court’s order.

On January 8, 1998, the Regional Trial Court ruled in favor of the Dicos, declaring them the absolute owners of the disputed portion of Lot No. 486, ordering cancellation of certain titles, imposing rental and damage awards against VMC, and directing rectification of records.
On appeal, VMC raised multiple issues, including alleged prescription and laches, the conclusiveness of registered titles, fraud in the issuance of titles, and errors in the consolidation-subdivision plan (e.g., typographical errors).
The Court of Appeals, in its decision promulgated on September 11, 2002, reversed the RTC ruling by dismissing the Dicos’ complaint and affirming VMC’s ownership over Lot Nos. 29-B and 1412, as well as upholding the validity of the original certificates of title.

The Dicos claimed fraud in the issuance of VMC’s titles and alleged that VMC had unlawfully encroached on Lot No. 486 through an improper consolidation-subdivision process.
Central to the dispute was the alleged typographical error concerning the designation of lots (e.g., Lots 1246-B versus 1426-B), with evidence and testimonies on both sides regarding whether the error was material or merely clerical.
The correctness of the consolidation-subdivision plan (LRC PCS-6611) and its evidentiary weight played a significant role in the appellate decision.

Whether the Dicos’ action for reconveyance based on an implied or constructive trust was barred by the 10-year prescriptive period under Article 1144 of the Civil Code.
The determination of the “discovery” date of any alleged fraud triggering the commencement of the prescription period.

Whether VMC committed fraud in procuring Certificates of Title to Lot Nos. 29-B and 1412, and if such fraud could give rise to a right to reconveyance.
The evidentiary value of documents, including the disputed Free Patent Application allegedly signed fraudulently and its impact on the Dicos’ claim.

Whether the consolidation and subdivision of adjoining lots, including the inclusion of non-adjacent lots and the alleged typographical errors (e.g., Lots 1246-B vs. 1426-B/C), affected the validity of VMC’s titles.
Whether the computed excess land area (claimed as 111,959 square meters by the RTC versus 13,996 square meters as contended by VMC) was correctly determined.

Whether the Dicos’ failure to timely raise the defense of prescription in earlier pleadings amounted to a waiver, notwithstanding the counterclaims presented by VMC.
The implications under Section 1, Rule 9 of the Rules of Court regarding the timing and admissibility of such defenses on appeal.

Whether the Dicos, as non-registered owners of some disputed lots, had the requisite standing or personality to demand reconveyance based on an implied trust doctrine.