G.R. No. 173186 - Uy vs. Court of Appeals

In 1979, Carmencita Naval-Sai acquired ownership of a parcel of land described as Lot No. 54-B (LRC) Psd 39172, covered by Transfer Certificate of Title (TCT) No. T-19586, from her brother.
The land was subdivided and titles for the subdivided lots, including Lots No. 54-B-8 and 54-B-9, were issued in Naval-Sai’s name.
The titles for Lots No. 54-B-8 and 54-B-9 were covered by TCTs No. T-58334 and T-58335, respectively, which are the subject of the case.

Naval-Sai sold Lot No. 54-B-76 on an installment basis to Bobby Adil, conditional on full payment before the execution of an absolute deed of sale. Adil defaulted on payments.
Adil sold his unfinished building on the same property to spouses Francisco and Louella Omandac.
Naval-Sai borrowed money from Grace Ng, delivering TCTs No. T-58334 and T-58335 as security. Ng borrowed from petitioner Aniceto Uy and delivered the two titles to him as loan guarantee.

Petitioner Uy filed a case for recovery of possession against Francisco Omandac (Civil Case No. 1007), in which RTC Branch 17 ruled in favor of Uy.
Naval-Sai filed a motion for new trial alleging forgery of her signature on the deed of sale used in the case, but Civil Case No. 1007 became final and executory.
Omandacs were ejected from the property, and Uy took possession.

In July 1999, Naval-Sai filed a Complaint for Annulment of Deed with Damages before RTC Branch 17 against Uy, praying the deed of sale be declared null and void ab initio on the ground of forgery.
She later filed an Amended Complaint adding relief to declare null and void TCTs No. T-62446 and T-62447, which replaced the original titles and were registered in petitioner’s name. The amended complaint was signed only by Naval-Sai’s counsel, not by Naval-Sai herself.

Petitioner denied receiving the two TCTs as loan security and claimed a valid contract of sale in 1981; he asserted possession and control since then.
Uy raised defenses including defective certification against forum shopping and prescription, arguing lack of jurisdiction due to defective certification (signed only by counsel) and lapse of the prescriptive period for annulment.
Uy also alleged estoppel and laches due to Naval-Sai’s delay in asserting her rights.

RTC dismissed Naval-Sai’s complaint citing prescription and defective certification against forum shopping.
RTC classified the complaint as a collateral attack on titles, which is prohibited after one year from registration due to indefeasibility of title.
The RTC found insufficient explanation for defective certification and applied strict compliance rules referencing Five Star Bus Company, Inc. v. Court of Appeals.

The Court of Appeals reversed the RTC dismissal, ruling substantial compliance with the certification requirement existed because the original complaint had proper certification signed by Naval-Sai.
The amended complaint’s certification by counsel was to be read with the original complaint, deemed a “cautionary move” equivalent to substantial compliance.
The Court ruled that the action is neither a direct nor collateral attack on titles but an action for annulment of deed based on forgery, essentially an action for reconveyance, which is imprescriptible if based on a void contract.
The Court emphasized it made no finding on the forgery issue, which must be resolved by the RTC after evidence presentation.
The Court ordered the case remanded for further proceedings.

Petitioner filed a motion for reconsideration which was denied by the Court of Appeals.
Petitioner filed the instant Petition for Review on Certiorari to the Supreme Court.

Whether the Court of Appeals erred in ruling that there was substantial compliance with the certification requirement for non-forum shopping.
Whether the Court of Appeals erred in ruling that the action is not barred by prescription, and that Naval-Sai is not guilty of laches or estoppel.