G.R. No. 119281 - Veterans Federation of the Philippines vs. Court of Appeals

On September 6, 1963, the Manila Railroad Company of the Philippine Islands (now Philippine National Railways or PNR) sold a parcel of land in San Pablo City to the Veterans Federation of the Philippines (VFP) for ₱1,092.00.
The Absolute Deed of Sale (Exhibit "A") described the subject property as a lot with an area of 1,092 square meters, specifying its boundaries using detailed metes and bounds.
The deed indicated that the property was part of the consolidation and subdivision plans with specific lot numbers and measurements.

Although the property was registered on June 18, 1964, at the Register of Deeds of San Pablo City—resulting in TCT No. T-4414—the technical description in the certificate of title did not match that of the deed.
The Register of Deeds copied a technical description from an accompanying document from PNR, leading to a mismatch in almost all boundary points compared to the deed.
A long rectangular portion was identified where the descriptions overlapped, but overall, the title erroneously included areas not intended in the contract.

VFP initially cleared and fenced the property according to the boundaries on the certificate of title, unaware of the differences.
Approximately 18 years later, when VFP planned to erect a building for its headquarters, it was discovered that:

The fence had long been dismantled.
Several permanent structures were present on the property.
Private individuals had been leasing portions of the property from PNR without VFP’s knowledge.

Efforts to resolve the dispute at the Barangay level failed, compelling VFP to institute an accion publiciana suit in the Regional Trial Court of San Pablo City.

Declared the Deed of Sale valid and enforceable.
Ordered the cancellation of TCT No. T-4414 and the issuance of a new, correct certificate of title in VFP’s name reflecting the technical description in Exhibit "A".
Directed that lease contracts with occupants based on the erroneous title be cancelled.
Provided remedies including delivery of physical possession and an award of rental fees of ₱20.00 per square meter per month.

The trial court denied PNR’s motion for lack of merit.
It partially granted VFP’s motion to clarify the directive on possession and rental arrears.

Dismissing the complaint against certain lessees.
Ordering PNR to convey the parcel of land as described in the deed of sale to VFP.
Directing the occupants to vacate the property and surrender possession.

The lower courts erred in ordering the cancellation of TCT No. T-4414 and replacement with a correct title.
The Court of Appeals improperly deleted the award of rentals and damages.

Comparative sketch plans were presented delineating the differences between the deed of sale and the certificate of title.
A court-appointed geodetic engineer’s Plan No. 1 (Exhibit "L-1") provided details on portions of the property and indicated the actual occupants and structures present.
The evidence emphasized the clerical error in the technical description and its impact on possession and transfer of title.

Whether the issuance of TCT No. T-4414, containing an erroneous technical description, vitiates the property ownership as conveyed by the deed of sale.
Whether the error in reflection of the property’s technical description in the certificate of title is merely clerical or one that affects the integrity of the Torrens System.

Whether the deed of sale, having been executed with the correct technical description, binds the parties to the property as agreed upon and excludes extraneous areas erroneously included in the title.
Whether VFP’s claim to ownership over the portion of the property erroneously included in the certificate of title can be sustained despite its earlier acts of possession and the existence of lease agreements with third parties.

Whether the trial court and subsequently the appellate court erred in ordering the cancellation of the original title and the issuance of a new title reflecting the correct deed of sale.
Whether the award of back rentals and the dismissal of claims for damages against certain occupants was appropriate given the factual matrix of occupation and the nature of the error.