Case Summary (A.C. No. 10628)
Factual Background: Emergence of Torrens Title Claims and Summit Realty’s Alleged Acquisition
Petitioner later learned that Lot 13713 lay within Summit Point Golf and Country Club Subdivision and that Summit Realty claimed a consolidated parcel Lot 1‑B (105,648 sq.m.). A chain of events then reflected entries and instruments showing a Special Power of Attorney inscription, a Deed of Absolute Sale executed by an allegedly acting attorney‑in‑fact, and ultimately the cancellation of an existing TCT (No. 129642) and issuance of a new TCT (No. T‑134609) in Summit Realty’s name on 25 July 2002. Correspondingly, petitioner’s tax declaration (00942‑A) was thereafter cancelled and Tax Declaration No. 00949‑A issued in the name of Francisco Catigbac (the purported registered owner used as provenance), with the result that petitioner’s recorded sheriff’s deed and request for annotation/adverse claim were refused registration.
Petitioner’s Allegations and Theory of Conspiracy
Petitioner accused the Register of Deeds (Escutin) and City Assessor officials (Mistas, Linatoc) of conspiring with Summit Realty’s officers (Leviste, Orense) to cancel her tax declaration and effect transfers favoring Summit Realty through manifest partiality, evident bad faith, and gross inexcusable negligence. She alleged procedural irregularities in the Deed of Sale to Summit (one‑sided deed, absence of vendee’s margin signatures, lack of TINs, late Secretary’s Certificate, timing that suggested pre‑prepared TCT), questioned the authority of the attorney‑in‑fact (alleged death of principal), and charged that assessor personnel permitted cancellation of her tax declaration without due notice and without annotating her interest as an adverse claim.
Procedural History: Ombudsman, LRA Consulta, and Appeals
Petitioner’s Complaint Affidavit initiated simultaneous administrative and preliminary criminal investigations before the Office of the Deputy Ombudsman for Luzon (OMB‑L‑A‑03‑0573‑F and OMB‑L‑C‑03‑0728‑F). The Register of Deeds and City Assessor respondents filed counter‑affidavits explaining their ministerial roles, compliance with documentary requirements, and that their actions were based on the Torrens titles presented. Private respondents denied participation in any conspiracy. The Ombudsman dismissed administrative and criminal charges for lack of substantial evidence / probable cause in a Joint Resolution dated 28 April 2004 and denied reconsideration in a Joint Order dated 20 June 2005, noting among other things the pending or related consulta with the LRA and the distinction between Torrens registration and Act No. 3344 recordings. The Court of Appeals affirmed the Ombudsman’s dismissal; petitioner then sought review under Rule 45 to the Supreme Court.
Issues Presented to the Supreme Court
Two principal assignments of error were raised by petitioner: (1) that the Court of Appeals erred in affirming the cancellation of petitioner’s Tax Declaration No. 00942 in violation of Section 109 of PD 1529 (Property Registration Decree); and (2) that the Court of Appeals erred in ruling that respondents could not be held administratively liable for unduly favoring Summit Realty to petitioner’s prejudice (grave misconduct).
Legal and Evidentiary Thresholds Applied by the Courts Below
The Ombudsman and the Court of Appeals applied the following legal touchstones: (a) the superiority and conclusiveness of a Torrens certificate of title as conclusive evidence of ownership and its protection against collateral attack (Section 48 of PD 1529); (b) the ministerial nature of certain registry and assessor functions, which limits inquiry into the intrinsic validity of documents presented for registration where the instruments are facially regular; (c) the standard for administrative grave misconduct (requiring evidence of corrupt intent, manifest partiality, evident bad faith or gross inexcusable negligence) as articulated in precedent; and (d) the limited review scope of the Supreme Court in Rule 45 petitions, which does not allow re‑weighing of factual determinations supported by substantial evidence.
Supreme Court’s Analysis on Tax Declaration Cancellation vs. Torrens Title
The Court emphasized the legal distinction between title in fact and certificate of title as evidence. While tax declarations are not conclusive proof of ownership and cannot prevail over a Torrens title, certificates of title under the Torrens system constitute conclusive and indefeasible evidence of ownership against the whole world. The issuance of a new owner’s duplicate under Section 109 (for lost duplicates) does not create title by itself; Summit Realty’s ownership flowed from the sale (Deed of Absolute Sale) which was thereafter registered under the Torrens system, culminating in TCT No. T‑134609. Because Lot 1‑B (the larger parcel encompassing petitioner’s 5,000 sq.m.) came to be covered by a Torrens certificate of title, the City Assessor’s cancellation of petitioner’s tax declaration in favor of the Torrens‑based tax declaration was legally appropriate to avoid double taxation and reflect the registered ownership. Thus petitioner’s reliance on Section 109 to show illegitimacy in cancelling her tax declaration was misplaced.
Supreme Court’s Analysis on Collateral Attack Rule and Jurisdictional Limits of the Ombudsman
The Court reiterated that a Torrens certificate cannot be collaterally attacked in administrative or preliminary criminal investigations before the Ombudsman; any challenge to the validity of a Torrens title must be pursued in a direct proceeding in the proper jurisdiction. Because Summit Realty had a registered TCT (T‑134609), petitioner’s claims alleging defects in the sale and registration were deemed collateral attacks outside the Ombudsman’s proper investigatory purview. The LRA’s role and the pending consulta further complicated immediate adjudication on registerability issues; absent a definitive ruling from the LRA on registerability and since the issuance of the Torrens certificate produced conclusive effect, the Ombudsman’s dismissal was not an abuse of discretion.
Supreme Court’s Analysis on Administrative Liability and Standard of Review
On the grave misconduct claim, the Court applied the well‑established standard: grave misconduct requires reliable evidence of corrupt motive, intention to violate law, or persistent disregard of known legal rules (not mere errors of judgment or negligence). The Court underscored that the Ombudsman’s and Court of Appeals’ factual findings are afforded deference and are conclusive if supported by substantial evidence. The respondents explained their ministerial roles, adherence to documentary requirements (or the statutory allowance to submit certain documents within prescribed periods), and absence of proof of bribery, gifts, or corrupt inducement. Petitioner failed to identify clearly the official duties of Mistas and Linatoc or to present statutory or procedural bases showing that their acts were beyond authority, or that they conspired with Summit Realty officers. The Court found the evidence proffered by petitioner to be speculative and insufficient to show manifest partiality, evident bad faith, or gross inexcusable negligence.
Holding and Disposition
The Supreme Court denied petitioner’s Rule 45 petition and affirmed the Court of Appeals’ Decision and Resolution in toto. The Cour
Case Syllabus (A.C. No. 10628)
Procedural Posture and Relief Sought
- Petition for Review on Certiorari filed under Rule 45 by petitioner Dinah C. Castillo seeking reversal and setting aside of the Court of Appeals Decision dated 18 October 2005 (CA-G.R. SP No. 90533) and the Court of Appeals Resolution dated 11 January 2006 denying reconsideration.
- The Court of Appeals had affirmed the Joint Resolution dated 28 April 2004 and Joint Order dated 20 June 2005 of the Office of the Deputy Ombudsman for Luzon in OMB-L-A-03-0573-F (administrative) and OMB-L-C-03-0728-F (preliminary criminal), dismissing petitioner’s complaint for grave misconduct and violation of Section 3(e) of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act, as amended) against public officers Antonio M. Escutin (Register of Deeds, Lipa City), Aquilina A. Mistas (Local Assessment Operations Officer III / Assistant City Assessor for Administration, City Assessor’s Office, Lipa City), Marietta L. Linatoc (Records Clerk / Local Assessment Operation Officer II, City Assessor’s Office, Lipa City), and private individuals Lauro S. Leviste II and Benedicto L. Orense (corporate officers of Summit Point Realty and Development Corporation).
- The Supreme Court denied relief and affirmed the Court of Appeals Decision and Resolution in toto, with costs against petitioner.
Core Facts — Property, Tax Declarations, and Initial Levy
- Petitioner Dinah C. Castillo is a judgment creditor of Raquel K. Moratilla (Raquel), married to Roel Buenaventura.
- Petitioner discovered that Raquel, her mother Urbana Kalaw (Urbana), and her sister Perla K. Moratilla (Perla) co-owned Lot 13713 (15,000 sq.m.) situated in Brgy. Bugtongnapulo, Lipa City, covered by Tax Declaration No. 00449.
- Petitioner obtained a DAR Order dated 4 March 1999 approving conversion of agricultural landholdings, including Lot 13713 described as owned by "Perla K. Mortilla, et al." (Summit Point conversion order).
- From the City Assessor of Lipa City petitioner procured a Certification and a certified true copy of Tax Declaration No. 00554-A showing Lot 13713 in the names of Raquel, Urbana, and Perla.
- The Register of Deeds of Lipa City issued a Certification that Lot 13713 in the names of Raquel, Urbana, and Perla was not covered by a certificate of title, whether judicial or patent, or subject to issuance of a CLOA or patent under CARP.
- Only after these verifications did petitioner levy on execution Lot 13713; a public auction sale was scheduled on 14 May 2002.
Sale, Purchase at Auction, and Recording
- The public auction occurred on 14 May 2002; petitioner bought Raquel’s 1/3 pro indiviso share (5,000 sq.m.).
- On 4 June 2002 petitioner caused the following to be recorded in the Primary Entry Book and Registration Book of the Register of Deeds of Lipa City in accordance with Act No. 3344 (now Ch. XIII, Sec. 113 of PD 1529): Notice of Levy; Certificate of Sale; Affidavit of Publication; and Writ of Execution.
- The City Assessor later issued Tax Declaration No. 00942-A in petitioner’s name reflecting ownership of 5,000 sq.m. while Urbana and Perla owned the remaining 10,000 sq.m.
- When petitioner attempted to pay real estate taxes on her 5,000 sq.m. she discovered, without prior notice, that her Tax Declaration No. 00942-A had been cancelled and that the subject area was said to overlap with Lot 1-B (105,648 sq.m.) covered by TCT No. 129642 and Tax Declaration No. 00949-A, both in the name of Francisco Catigbac.
Chain of Events Concerning TCTs and Alleged Transfer to Summit Realty
- The reverse side of TCT No. 129642 (in Catigbac’s name) bore entries showing a Special Power of Attorney (Entry No. 184894, in favor of Leonardo Yagin, dated 2-6-1976, inscribed 6-26-2002 at 11:20 a.m.), a sale in favor of Summit Point Realty & Development Corp (Entry No. 185833), and a BIR clearance entry (Entry No. 185834) referencing issuance/cancellation of TCT No. 134609.
- On 25 July 2002 at 2:30 p.m. TCT No. 129642 in the name of Catigbac was cancelled and TCT No. T-134609 in the name of Summit Realty was issued.
- Petitioner learned in May 2002 that Lot 13713 was inside Summit Point Golf and Country Club Subdivision owned by Summit Point Realty and attempted to meet Summit’s VP Orense, who allegedly did not produce ownership documents and allegedly made threatening remarks (petitioner’s claim).
Petitioner’s Complaint Affidavit and Alleged Scheme
- Petitioner filed a Complaint Affidavit before the Office of the Deputy Ombudsman for Luzon alleging that Escutin, Mistas, Linatoc (public respondents) acting in concert and conspiring with Leviste and Orense (Summit officers) had, through bad faith, gross inexcusable negligence and manifest partiality, caused injury of P20,000,000 by cancelling her Tax Declaration No. 00942-A and issuing Tax Declaration No. 00949-A in Catigbac’s name, notwithstanding that TCT No. 129642 was already cancelled and Summit had no legal claim to a new tax declaration.
- Petitioner alleged a multi-step scheme: inscription of a Special Power of Attorney (6 Feb 1976) in the Register of Deeds on 26 June 2002; a Deed of Absolute Sale dated 22 July 2002 executed by Yagin as Catigbac’s attorney-in-fact in favor of Summit Realty; BIR clearance and registration actions on 25 July 2002 resulting in issuance of TCT No. T-134609 to Summit; and thereafter cancellation of petitioner’s tax declaration and issuance of Catigbac’s tax declaration allegedly to favor Summit.
Specific Irregularities and Legal Objections Raised by Petitioner
- The Deed of Absolute Sale (22 July 2002) appeared “one-way”: no expressed desire or signature (on left margin) by Summit’s representative on all pages; no proof a Summit representative presented before the notary; TINs for Yagin and Summit not stated.
- As a corporation Summit Realty could only act through Board resolution and a Secretary’s Certificate; no such Secretary’s Certificate/Board Resolution accompanied the Deed on presentation for registration; a Secretary’s Certificate surfaced only on 30 July 2002 (five days after issuance of TCT No. T-134609).
- The Deed of Absolute Sale and the issuance of TCT No. T-134609 were recorded/presented at the same date and time (25 July 2002, 2:30 p.m.), suggesting TCT was prepared earlier and issued preemptively.
- Catigbac was alleged to be deceased before the Deed of Absolute Sale; petitioner argued that agency in favor of Yagin was extinguished by Catigbac’s death making the Deed void ab initio.
- Petitioner pointed to Summit’s own LRC Case No. 00-0376 (petition for issuance of new owner’s duplicate of TCT No. 181) where Summit’s Orense testified about Lot 1’s informal subdivision, purchase of subdivided parts, loss of owner’s duplicate and judicial replacement—facts which petitioner argued showed Summit’s knowledge of Catigbac’s death and the irregularity of subsequent transactions.
- Petitioner alleged that after her visit to Orense in May 2002 Summit “resurrected” Catigbac (whom they knew to be dead) and procured documents to secure Torrens title in Summit’s favor, and that Escutin cooperated in registering documents notwithstanding absence of required supporting papers.
Actions by Petitioner After Filing Complaints
- Petitioner attempted to register the Sheriff’s Deed of Final Sale/Conveyance of her 5,000 sq.m. and sought annotation of her Affidavit of Adverse Claim on TCT No. T-134609.
- Register of Deeds Escutin, relying on Examiner Juanita H. Sta. Ana, refused registration of the Sheriff’s Deed of Final Sale/Conveyance on the ground that the presented tax declaration (00942-A) was already transferred in petitioner’s name, making registration of the Sheriff’s Deed of Final Sale “no longer necessary.”
- Escutin denied annotation of petitioner’s Affidavit of Adverse Claim on TCT No. T-134609, stating the claimant’s rights were not adverse to the registered owner (Summit) and that petitioner’s interest derived from levy on execution against Raquel, who is not the registered owner on the title.
- Escutin advised petitioner she may file a consulta with the Land Registration Authority (LRA); petitioner filed a consulta with LRA on 3 July 2003 but later withdrew the consulta.
Responses and Counter-Affidavits of Respondents
- Escutin (Register of Deeds) stated: his duty to register instruments is ministerial; if a document is legal and in due form and not mutilated on its face he must register it; all required documents (DAR clearance, BIR CAR, tax clearances, Secretary’s Certificate, Articles of Incorporation, etc.) were submitted; Section 56 of PD No. 1529 mandates that the TCT bear the date, hour and minute of reception/registration of the instrument; the Registrar’s role is not to inquire into intrinsic validity based on proofs aliunde; TINs are BIR requirements and the BIR issued CAR even without Yagin’s TIN; the Register of Deeds was not concerned with issuance/cancellation of tax declarations.
- Mistas (Assistant City Assessor for Administration / Local Assessment Operations Officer III) denied receiving and causing disappearance of petitioner’s documents; said petitioner’s documents were received by the Receiving Clerk Lynie Reyes; Mistas claimed she was not custodian of records, had no hand in cancellation of the tax declaration, and that functions relating to issuance/cancellation of tax declarations belonged to other divisions.
- Linatoc (Records Clerk / Local Assessment Operation Officer II) stated her duties were ministerial: safekeeping and updating North District Records; preparing