G.R. No. 130228 - Foster-Gallego vs. Spouses Galang

Case Summary (G.R. No. 130228)

Factual Background

In October 1982 the Municipal Treasurer of Paranaque held a public auction at which Vive Realty Corporation purchased several parcels, including a 330-square-meter lot in Barrio Kaybiga covered by TCT No. 435402. The Treasurer executed a Final Bill of Sale in favor of Vive Realty Corporation on 25 November 1983. In Civil Case No. 5801 the Regional Trial Court of Makati, Branch 138, ordered on 19 December 1983 the cancellation of certain titles, including TCT No. 435402, and the issuance of new titles in the name of Vive Realty Corporation. On 22 June 1984 Spouses Galang acquired the parcel from Vive Realty Corporation, and the Register of Deeds later issued TCT No. (86872) 22786 in their names. The Spouses Galang took possession, had the property assessed in their names, and paid taxes.

Events Leading to Litigation

In March 1989 a hollow block fence was erected along the property perimeter by Lito Gallego. In April 1989 Romeo Galang discovered the fence and sought barangay settlement. When Gallego failed to appear, Spouses Galang filed a complaint for quieting of title with damages against Gallego on 16 May 1989. Gallego answered and counterclaimed, asserting that his brother, petitioner Bernabe Foster-Gallego, was the true owner and that petitioner had not been notified of any tax delinquency or auction. Petitioner later sought intervention and filed an answer-in-intervention and a third-party complaint impleading Vive Realty Corporation and municipal officers.

Procedural History in the Trial Courts

The case was raffled among several RTC branches. Gallego was declared in default for failure to appear and the Spouses Galang were permitted to present their evidence ex parte. Petitioner’s attempted participation evolved through motions to intervene, a motion to admit a third-party complaint, and orders admitting then later striking off his pleadings. The trial court ultimately denied petitioner’s intervention and third-party complaint and proceeded to decide the quieting action on the record presented by the Spouses Galang.

Ruling of the Trial Court

The Regional Trial Court of Makati, Branch 148, rendered judgment on 8 July 1993 in favor of Spouses Galang, quieting title to the parcel covered by TCT No. (86872) 22786 in their favor, removing any cloud and declaring them exclusive owners. The court also ordered Gallego to pay P10,000.00 moral damages, P25,000.00 attorneys’ fees, and P3,000.00 litigation expenses. The trial court later reconsidered its earlier order admitting petitioner’s intervention and third-party complaint and struck off the answer-in-intervention and third-party complaint from the records.

Proceedings and Holding in the Court of Appeals

On appeal the Court of Appeals affirmed the trial court’s judgment but deleted the award of damages for lack of basis. The appellate court also held that petitioner had no legal personality to join Gallego’s appeal because the denial of intervention left him a nonparty. The Court of Appeals ruled that challenges to the denial of intervention must be made by the prospective intervenor in a timely appeal from that order, and found petitioner’s effort to attack the denial untimely under Batas Pambansa Blg. 129. The Court of Appeals therefore dismissed petitioner’s attempt to participate in the appeal and affirmed the trial court’s quieting decision as modified.

Issues Presented to the Supreme Court

Petitioner raised numerous contentions seeking reversal of the orders denying intervention and striking his pleadings, annulment of the RTC-Branch 138 decision of 19 December 1983 that cancelled TCT No. 435402, declaration that the auction proceedings and titles originating therefrom were void ab initio, recognition that petitioner had redeemed the property within the statutory period, and a finding that petitioner was an indispensable party to the quieting action. The Supreme Court distilled the dispositive issues to whether the Court of Appeals erred in dismissing petitioner’s appeal from the orders disallowing intervention, whether the RTC-Branch 138 decision may be declared void in a quieting action, and whether petitioner was an indispensable party.

Supreme Court’s Analysis on Appealability, Standing and Timeliness

The Supreme Court agreed with the Court of Appeals that petitioner lacked legal personality to join Gallego’s appeal because the trial court had denied his motion for intervention. The Court explained that a prospective intervenor may appeal only from the denial of intervention and does not acquire party status by merely joining another party’s appeal. The Court further held that petitioner’s opportunity to seek appellate review of the denial had lapsed. Petitioner filed a motion for reconsideration within the initial fifteen-day period but, after denial of that motion, he filed a notice of appeal beyond the reglementary period. The Court reiterated that perfection of appeal within the prescribed period is mandatory and jurisdictional and that petitioner offered no valid justification for the one-day delay that would warrant equitable indulgence.

Supreme Court’s Analysis on Appropriate Remedy and Collateral Attack

The Supreme Court determined that petitioner’s principal aim was to annul the RTC-Branch 138 decision that cancelled his original title and to attack the titles subsequently issued to Vive Realty Corporation and Spouses Galang. The Court held that those contentions could not be resolved in an action for quieting of title because such action only reaches instruments or proceedings that cast a prima facie cloud on title. The Court invoked the doctrine of non-interference and explained that a trial court lacks authority to annul the final judgment of a co-equal court. The Court relied on Presidential Decree No. 1529, Section 48, and on precedents to emphasize that a certificate of title is not subject to collateral attack and can be altered or cancelled only in a direct proceeding. The Court distinguished petitioner’s case from Ferrer v. Bautista, noting that the latter involved a patent void for want of jurisdiction in the Bureau of Lands and thus presented different remedial considerations. The Supreme Court conclude

Case Syllabus (G.R. No. 130228)

Parties and Posture

Bernabe Foster-Gallego filed a petition for review under Rule 45, Rules of Court assailing the decision of the Court of Appeals in CA-G.R. CV No. 43439 dated 22 July 1997.
Spouses Romeo and Vivien Galang were plaintiffs in the underlying action for quieting of title and were respondents in the petition for review.
Vive Realty Corporation, the Municipality of Paranaque, the Treasurer of Paranaque, and the Register of Deeds of Paranaque were impleaded in various pleadings but were not parties to the petition for review.
The judgment under review affirmed with modification the decision of the Regional Trial Court, Makati, Branch 148, in Civil Case No. 89-3898 dated 8 July 1993.

Key Facts

Vive Realty Corporation purchased properties at a public auction by the Municipal Treasurer of Paranaque on 29 October 1982 and received a Final Bill of Sale over the subject parcel on 25 November 1983.
The Regional Trial Court, Makati, Branch 138 rendered a decision dated 19 December 1983 canceling TCT No. 435402 and ordering issuance of new titles in favor of Vive Realty Corporation.
Spouses Galang purchased the subject parcel from Vive Realty Corporation on 22 June 1984 and subsequently obtained TCT No. (86872) 22786 in their names.
The Spouses Galang took possession, declared the land for taxation, and paid real property taxes until a fence built by Lito Gallego in March 1989 prompted a complaint for quieting of title filed on 16 May 1989.
Lito Gallego asserted that his brother, Bernabe Foster-Gallego (petitioner), was the true owner and alleged lack of notice of tax delinquency and auction.
The trial court declared Lito Gallego in default on 16 February 1990 and allowed the Spouses Galang to present evidence ex parte.
Petitioner filed a motion to intervene and an answer-in-intervention on 10 March 1990 and later a third-party complaint against Vive Realty Corporation and municipal officials, but the trial court ultimately reconsidered and denied admission of the intervention and struck the third-party complaint on 12 October 1993.
Petitioner filed a motion for reconsideration which the trial court denied, a copy of the denial was served on him on 23 January 1995, and petitioner filed a notice of appeal on 26 January 1995.

Trial Court Ruling

The trial court rendered judgment on 8 July 1993 in favor of Spouses Romeo and Vivien Galang and against Lito Gallego quieting title and removing any cloud over the parcel covered by TCT No. (86872) 22786.
The trial court ordered Lito Gallego to pay moral damages in the amount of P10,000, attorneys' fees in the amount of P25,000 including appearance fees, and P3,000 as litigation expenses.
The trial court later issued an order dated 12 October 1993 reconceiving its prior admission of the answer-in-intervention and third-party complaint and struck them from the records.

Court of Appeals Ruling

The Court of Appeals held that petitioner had no legal personality to join Lito Gallego in appealing the trial court's decision because the denial of intervention left petitioner without party status.
The Court of Appeals found petitioner's attempt