G.R. No. 162593 - Feliciano vs. Spouses Zaldivar

Case Summary (G.R. No. 162593)

Key Dates

Factual timeline as found in the record: alleged sale to Ignacio Gil — April 4, 1951; joint affidavit of confirmation of sale — December 3, 1965; issuance of TCT No. T-17993 — September 10, 1974 (following partial cancellation proceedings); petition for reissuance of owner’s duplicate — March 20, 1974; plaintiff’s complaint for annulment and reconveyance — August 10, 1992. (Decision reviewed is dated after 1990; therefore the 1987 Constitution is the constitutional framework applied.)

Applicable Law

1987 Philippine Constitution (as the constitutional basis given the decision date).
Act No. 496 (The Land Registration Act) and its relevant provisions as later codified in P.D. No. 1529 (Sections cited in the opinion).
Civil Code provisions quoted in the record: Articles 1332, 1126, 448, 453, 546 and related provisions governing prescription, contracts executed in a language not understood by a party, builders/planters, and reimbursement for expenses.
Relevant jurisprudential principles cited in the opinion regarding reconstitution of titles, indefeasibility under Torrens system, and non-acquisition of registered land by prescription or adverse possession.

Factual Background

Remegia alleged she was the registered owner under TCT No. T-8502 (444 sq. m.). She claimed that a 243-sq.-m. portion was wrongfully taken and registered to Aurelio Zaldivar (TCT No. T-17993) in 1974 through fraudulent means, specifically by asserting loss of the owner’s duplicate and procuring a reconstituted title and by submitting a purported joint affidavit confirming an earlier sale allegedly signed by Remegia. Respondents asserted they derived ownership by a chain of conveyances: Remegia to Ignacio Gil (deed of sale presented as Exhibit “5”), Gil to Pio Dalman (tax declarations in Dalman’s name), then to Aurelio and Luz, and that respondents and predecessors had been in open, adverse, continuous possession since 1947. Aurelio petitioned for issuance of a new owner’s duplicate (alleging loss) and later sought partial cancellation of TCT No. T-8502 to obtain TCT No. T-17993.

Procedural History

Regional Trial Court (RTC), Branch 25, Cagayan de Oro City: rendered judgment in favor of Remegia, declaring TCT No. T-17993 null and void for having been obtained through misrepresentation/fraud and ordered reconveyance and damages. Court of Appeals (CA): reversed the RTC, upheld the chain of title and documents presented by respondents (including the deed of sale and the joint affidavit of confirmation of sale), applied laches/prescription and presumption of regularity in judicial acts, and dismissed Remegia’s complaint. The Supreme Court review followed.

RTC Decision and Rationale

The RTC found that Aurelio procured the new owner’s duplicate and consequent TCT No. T-17993 by false affidavit of loss, that the reconstitution order was void for lack of jurisdiction where the owner’s duplicate was not truly lost, and that use of the false affidavit amounted to fraud preventing Remegia from presenting her case. The RTC also found absence of public instruments conveying the property from Remegia to Dalman or Gil and characterized the issued certificate as irregular. The RTC held that Torrens indefeasibility did not protect respondents because the transferor (Aurelio) took the certificate with notice of the flaw and that adverse possession could not prevail over registered title under Act No. 496. Judgment cancelled TCT No. T-17993, ordered reconveyance and awarded damages and fees.

CA Decision and Rationale

The Court of Appeals credited respondents’ documentary evidence: Exhibit “5” (deed of sale from Remegia to Gil), Exhibit “6” (tax declaration in Dalman’s name), and the joint affidavit of confirmation of sale (December 3, 1965). The CA gave evidentiary weight to the notarization and testimony of the notary (Atty. Francisco Velez) and upheld the finding that Dalman and then the Zaldivars possessed and used the property. The CA respected the presumption of regularity for the CFI judge who ordered issuance of a new owner’s duplicate and TCT No. T-17993 after notice and hearing. The appellate court also found laches/prescription against Remegia because she filed suit more than 17 years after issuance of TCT No. T-17993 and because respondents constructed a house in 1974–1975 without protest.

Issues Presented to the Supreme Court

Among the issues raised by petitioners were: (A) procedural error in CA not dismissing respondents’ appeal for late filing of brief; (B) denial of a timely motion for reconsideration; (C) whether the court that ordered issuance of a new duplicate acquired jurisdiction when the original owner's duplicate was not lost; (D) whether petitioner’s claim was barred by estoppel or laches; (E) whether respondents were absolute owners under TCT No. T-17993; and (F) whether essential facts were overlooked that would preserve TCT No. T-8502 in Remegia’s favor. The Supreme Court limited resolution to dispositive substantive issues, deeming procedural objections unnecessary to decide the merits.

Supreme Court Analysis — Reconstitution, Jurisdiction, and Void Title

The Court reaffirmed the longstanding rule that a court lacks jurisdiction to reconstitute/issue a new owner’s duplicate when the original owner’s duplicate has not been lost but is in the possession of another person; reconstitution is valid only upon actual loss. When the owner’s duplicate was not lost, the decision authorizing issuance of a new duplicate is void and vulnerable to attack at any time. The record contains Remegia’s uncontradicted testimony that she never lost or surrendered her owner’s duplicate of TCT No. T-8502; accordingly, the CFI’s order and the new duplicate were void. TCT No. T-17993, which emanated from that void reconstitution and was obtained through fraudulent means, could be annulled. The Court therefore sustained the RTC’s nullification of TCT No. T-17993.

Supreme Court Analysis — Indefeasibility and Fraud Exception

The Court explained that the Torrens principle of indefeasibility does not protect titles issued through fraud. Indefeasibility applies only when previous valid title to the same parcel does not exist. Because TCT No. T-8502 in Remegia’s name remained valid and had not been parted with, and because Aurelio procured a reconstituted duplicate by misrepresentation, Aurelio could not invoke indefeasibility to prevail over Remegia’s prior title. Upholding indefeasibility under those circumstances would unjustly divest a registered owner without fault.

Supreme Court Analysis — Evidentiary Weight of the Joint Affidavit and Language/comprehension Issue (Art. 1332)

The CA’s reliance on the joint affidavit of confirmation of sale as decisive proof was rejected. The Supreme Court observed that an affidavit alone is not a mode of acquiring ownership and that substantial indicia of a valid conveyance (consideration, mode of transfer, evidentiary chain) were missing. Crucially, the joint affidavit was entirely in English whereas Remegia testified she could not read or understand English (highest education Grade 3 and ability to read Visayan but not idiomatic Visayan). Under Article 1332 of the Civil Code, when one party cannot read or the contract is in a language not understood by them and mistake or fraud is alleged, the party seeking enforcement must show that the terms were fully explained. The notary’s bare statement that he “read and interpreted” the document did not suffice to rebut the presumption of mistake or fraud. The affidavit also omitted key elements (consideration and precise mode of conveyance), so the presumption of fraud/mistake attending its execution remained unrebutted.

Supreme Court Analysis — Prescription, Laches, and Adverse Possession

The Court held that adverse possession or prescription cannot divest title to registered land; Article 1126 of the Civil Code and Act No. 496 prohibit acquisition of registered land by prescription or adverse possession. Thus, respondents’ long possession, even since 1947, could not override the registered owner’s rights. The Court likewise rejected the CA’

Case Syllabus (G.R. No. 162593)

Citation, Court and Composition

Reported at 534 Phil. 280, First Division, G.R. No. 162593, decided September 26, 2006.
Decision penned by Justice Callejo, Sr.
Concurrence by Chief Justice Panganiban, and Justices Ynares‑Santiago, Austria‑Martinez and Chico‑Nazario.
Court of Appeals decision under review: Decision dated July 31, 2003 in CA‑G.R. CV No. 66511 (penning Justice Elvi John S. Asuncion, with Justices Ruben T. Reyes and Lucas P. Bersamin concurring).
Trial court below: Regional Trial Court (RTC) of Cagayan de Oro City, Branch 25, Civil Case No. 92‑423.
Parties: Petitioners — Heirs of Remegia Y. Feliciano (substituted and represented by Nilo Y. Feliciano); Respondents — Spouses Aurelio and Luz Zaldivar.

Procedural Posture

Original complaint for annulment of title and reconveyance filed by Remegia Y. Feliciano against spouses Zaldivar.
RTC rendered judgment in favor of Remegia (declaring TCT No. T‑17993 null and void, reconveyance and awarding damages and attorney’s fees).
Court of Appeals reversed the RTC decision and dismissed the complaint.
Motion for reconsideration before CA denied by Resolution dated February 4, 2004.
Petition for review on certiorari filed in the Supreme Court by the heirs of Remegia (petitioners), who were substituted after Remegia’s death on July 10, 2000.
Supreme Court granted the petition, reversed the CA, reinstated the RTC decision with a modification.

Relevant Dates and Chronology of Key Events

April 4, 1951: Alleged sale from Remegia to Ignacio Gil (as claimed in affidavit later).
1960: Alleged conveyance from Ignacio Gil to Pio Dalman; monthly lease history and rent changes cited by Remegia earlier.
December 3, 1965: Joint affidavit of confirmation of sale purportedly executed by Remegia and Narciso Labuntog before Notary Francisco Velez (Exhibit).
1968: Remegia testified she was issued a title (owner’s duplicate) and retained possession.
March 20, 1974: CFI granted petition for issuance of a new owner’s duplicate copy of TCT No. T‑8502.
September 10, 1974: TCT No. T‑17993 issued in Aurelio Zaldivar’s name (partial cancellation/petition result).
1974–1975: Respondents constructed house on the subject lot.
August 10, 1992: Remegia filed complaint for annulment/reconveyance (more than 17 years after issuance of TCT No. T‑17993).
December 3, 1999: RTC decision in favor of Remegia (Civil Case No. 92‑423).
July 31, 2003: Court of Appeals decision reversing RTC.
February 4, 2004: CA denies Motion for Reconsideration.
September 26, 2006: Supreme Court decision reversing CA and reinstating RTC with modification.

Facts as Alleged by Petitioner (Remegia)

Remegia claimed registered ownership of a 444 sq. m. parcel covered by TCT No. T‑8502, located in Lapasan, Cagayan de Oro City.
A 243 sq. m. portion of that lot was allegedly taken by Aurelio through fraud in 1974 and became TCT No. T‑17993 in Aurelio’s name.
The 243‑sq. m. portion had earlier been leased to Pio Dalman (Aurelio’s father‑in‑law) at P5.00 per month, later increased to P100.00 in 1960.
Remegia alleged she attempted to mortgage the portion to Ignacio Gil for P100.00 but that the transaction did not push through; Gil allegedly took back the money and did not return the receipt signed by her.
Remegia denied ever selling the subject lot to Gil or Dalman, denied loss of the owner’s duplicate title, and denied executing the joint affidavit of confirmation of sale.
Remegia contended the transaction was not annotated on TCT No. T‑8502 and thus the sale never transpired.

Facts and Claims of Respondents (Spouses Zaldivar)

Asserted Aurelio is absolute owner and possessor of the 243 sq. m. as evidenced by TCT No. T‑17993 and Tax Declaration No. 26864.
Claimed acquisition by purchase from Pio Dalman, who had acquired from Ignacio Gil on April 4, 1951.
Presented as proof: a deed of sale (Exhibit “5”) and a joint affidavit of confirmation of sale (Exhibit “6”) allegedly executed by Remegia and Narciso Labuntog on December 3, 1965, before Notary Francisco Velez.
Alleged Dalman declared the subject lot for taxation in his name; Dalman thereafter sold to the Zaldivars; Zaldivars registered for taxation purposes beginning 1974.
Alledged long, open, continuous, adverse possession since 1947 (over 41 years), and that they built a house after obtaining GSIS loan.

RTC Ruling (Trial Court)

After trial, RTC rendered judgment for Remegia.
Held TCT No. T‑17993 in Aurelio’s name null and void because it was obtained through misrepresentation, fraud or evident bad faith — specifically, Aurelio’s affidavit claiming Remegia’s owner’s duplicate was lost when it in fact existed.
RTC reasoning: a court that orders reconstitution when the original exists lacks jurisdiction; use of false affidavit prevented Remegia from presenting her case fully and fairly (equated with forged documents/perjured testimony).
Noted absence of public instrument proving conveyance from Remegia to Dalman; the only evidence was the joint affidavit of confirmation of sale the RTC characterized as impugned and possibly falsified.
Found title issuance was irregular and a calculated move to deprive Remegia of dominical rights.
Rejected spouses’ defense of indefeasibility of Torrens title because the transferor had notice of the flaw and registration could not vest title.
Declared registration did not vest title in the spouses given the above.
Awarded reconveyance of 243 sq. m. and possession to Remegia; ordered spouses to pay P50,000 moral damages, P10,000 exemplary damages, P50,000 attorney’s fees and P10,000 litigation expenses.

Court of Appeals Ruling (Appellate Court)

Reversed and set aside the RTC judgment; dismissed Remegia’s complaint.
Found that Remegia sold the 243 sq. m. to Ignacio Gil (credited Exhibit “5” deed of sale) and that Gil conveyed to Dalman, who took possession.
Gave evidentiary weight to the joint affidavit of confirmation of sale (Exhibit “6”) executed December 3, 1965 and notarized by Atty. Francisco Velez; CA found this affidavit properly executed and of probative force.
Found Dalman declared the lot in his name for taxation; Zaldivars registered tax declarations and had possession and improvements.
Upheld the CFI order granting a new owner’s duplicate copy of TCT No. T‑8502 and subsequent partial cancellation and issuance of TCT No. T‑17993 in Aurelio’s name.
Presumed regularity in the performance of the judge who ordered issuance of the new owner’s duplicate.
Held petitioner’s action was barred by prescription and laches because TCT No. T‑17993 was issued on September 10, 1974 and the complaint was filed more than 17 years later (August 10, 1992); an action for reconveyance must be filed within 10 years from issuance, as issuance operates as constructive notice.
Noted construction of house and firewall in 1974–1975 and lack of protest by Remegia.
Dispositive CA order: reversed RTC and dismissed case.

Assignments of Error by Petitioners to Supreme Court

A: CA erred in not dismissing respondents’ appeal motu prop