G.R. No. 105775 - Chua vs. National Labor Relations Commission

On June 8, 1995, VSD Realty and Development Corporation (petitioner) filed a complaint for annulment of title and recovery of possession of property against Uniwide Sales, Inc. and Dolores Baello Tejada (respondents) before the RTC of Caloocan City, Branch 126.
The complaint sought:

The annulment of Transfer Certificate of Title (TCT) No. 35788 (registered in the name of Baello).
The recovery of possession over a parcel of land occupied by Uniwide by virtue of its lease contract with Baello.
Payment of just and reasonable compensation for occupancy, and attorney’s fees.

VSD asserted ownership of a parcel covered by TCT No. 285312, purchased from Felisa D. Bonifacio.
The title was derived from an Order (dated October 8, 1992), issued in connection with LRC Case No. C-3288, which established the technical description and boundaries of the property.
The technical description in petitioner’s title clearly identifies the lot as Lot 23-A-4-B-2-A-3-A of subdivision plan Psd-706.

Baello was the registered owner of a parcel under TCT No. 35788, which allegedly covers Lot No. 3-A of the same subdivision plan.
Petitioner alleged that Baello’s title is spurious, having a general description that fails to accurately pinpoint the property.
It was contended that Baello acquired her title through falsification and illegal machinations with no proper basis in the records of relevant government bureaus.

On July 15, 1988, Uniwide Sales, Inc. entered into a contract of lease with Baello covering the property.
Uniwide constructed a building on the leased premises, claiming that it was merely a lessee.
Petitioner, however, maintained that because the technical description of its title did not correspond with that of Baello’s title, only petitioner’s title covered the subject property, thus entitling it to reconveyance and recovery of possession.

The RTC rendered a decision on October 2, 2000, ruling in favor of petitioner by:

Finding that petitioner is the rightful owner of the subject lot (Lot 23-A-4-B-2-A-3-A) as proven by documentary evidence and witness testimonies.
Declaring that Baello’s title covers a different property, not the subject property wherein Uniwide is in possession.

Testimonies of government officials (e.g., Norberto Vasquez, Deputy Register; Evelyn Celzo, Geodetic Engineer) who confirmed the technical description contained in petitioner’s title.
Documentation of the land registration proceedings under LRC Case No. C-3288 and related derivative records involving Felisa D. Bonifacio.

Respondents appealed the RTC decision to the Court of Appeals (CA).
On May 30, 2005, the CA reversed and set aside the RTC decision with the reasoning that:

A Torrens title (such as Baello’s TCT No. 35788) is prima facie conclusive and enjoys a presumption of validity.
There was insufficient evidence to establish that Baello’s title was spurious.

On December 6, 2005, the CA denied petitioner’s motion for reconsideration, prompting petitioner to file a petition for review on certiorari.

Whether the Court of Appeals erred in ruling that the burden of proof did not shift to the respondents despite petitioner’s substantial evidence in support of its title.
Whether the evidence adequately proved that the issuance of two titles over the same piece of land had not been established.
Whether the Court of Appeals wrongly treated petitioner’s complaint as solely one for annulment of title when the recovery of possession was also prayed.
Whether the trial court’s declaration of Baello’s title as spurious was legally tenable given the presumption of validity under the Torrens system.
Whether Uniwide, as a lessee, could be considered in good faith, particularly in relation to its claim and subsequent improvement on the property.

Whether petitioner is entitled to recovery of possession of the subject property.
Whether Baello’s title (TCT No. 35788) may be annulled based on the discrepancies in its technical description and other evidentiary insufficiencies.