G.R. No. 102961-62 - Liao vs. Court of Appeals

Case Summary (G.R. No. 102961-62)

Factual Background

The dispute traced its origin to Estrella Mapa, who on March 5, 1986 filed with the Regional Trial Court, Quezon City, Branch 99 a petition for reconstitution of documents and issuance of certificates of title over parcels of land covered by OCT 614, Decree No. 6667, GLRO Rec. No. 5975. Estrella Mapa asserted that on June 16, 1913, the Director of Lands issued certificates of sales to Vicente Salgado over Lot Nos. 755, 777, 778, and 783, which formed part of the Piedad Estate, under Act. No. 1120. Vicente Salgado later assigned the property to Estrella Mapa on April 12, 1930.

After hearing, the trial court on June 30, 1986 issued an order finding the assignment of sales certificates Nos. 781 and 783 covering Lots 778 and 777, respectively, to be genuine, valid, and registrable, and it directed the Register of Deeds to issue transfer certificates of title in Estrella Mapa’s name for Lot 778 and for portions of Lot 777 as described by approved and amended technical descriptions, as earlier reconstituted in the records of the Land Registration Commission.

Pursuant to the order, the Register of Deeds initially issued TCT No. 348156 on August 5, 1986 covering Lot 778 and a portion of Lot 777. On August 12, 1986, the Register of Deeds cancelled and issued TCT No. 348291 and TCT No. 348292 covering Lot 778 and a portion of Lot 777, respectively. The newly issued titles conflicted with existing titles, prompting actions for quieting of title and an investigation by the National Bureau of Investigation.

In the meantime, Estrella Mapa assigned the parcels covered by TCT No. 348291 and TCT No. 348292 to Palmera Agricultural Realty Development Corporation, a family corporation headed by Lourdes Angeles, who was Estrella Mapa’s daughter. Petitioner Jesus P. Liao later claimed he purchased relevant portions from Palmera by virtue of a Deed of Omnibus Assignment dated August 23, 1990, and he presented himself in the consolidated Court of Appeals proceedings as successor-in-interest.

Re: G.R. Nos. 102961-62 (Annulment of the June 30, 1986 RTC Order)

On March 28, 1990, I. C. Cruz Construction, Inc. (ICC) filed with the Court of Appeals a petition for annulment of the June 30, 1986 RTC order in LRC Case No. Q-3369 (86), alleging that the title issued pursuant to that order encompassed property registered in its name under TCT No. 836975. On July 3, 1990, Arle Development Corporation (Arle) filed a similar petition, claiming ownership of six lots covered by TCT Nos. 263984 to 263989, which overlapped TCT No. 348292 over Lot 777.

After consolidation, the Court of Appeals set the cases for preliminary conference on March 21, 1991. At that conference, petitioner appeared with counsel and claimed that he purchased the parcels from Palmera through the Deed of Omnibus Assignment dated August 23, 1990.

On August 29, 1991, the Court of Appeals declared the June 30, 1986 RTC order null and void and directed the Register of Deeds to cancel TCT Nos. 348156, 348291, and 348292, as well as all subsequent titles derived therefrom. The Court of Appeals denied petitioner’s motion for reconsideration on November 28, 1991. Petitioner filed his recourse on January 17, 1992.

Re: G.R. No. 107625 (Annulment, Reconveyance, and Injunction: RTC Branch 85)

A separate but related action arose from complaints filed on February 17, 1988 by Susan A. Foronda, Iluminada R. Dionisio, Azucena Q. Pua, and Lucia Pua Liok Bin before the Regional Trial Court, Quezon City, Branch 85. The complaint sought annulment of title, reconveyance, damages, and injunction with restraining order against Estrella Mapa, Lourdes Angeles, and others, involving the overlap between plaintiffs’ titled lots and TCT No. 348292 covering Lot 777.

Plaintiffs alleged that Lot 777 had ceased to be Friar Land as early as May 1922, when the Director of Lands allegedly executed a deed of sale conveying Lot 777 to Carlos Sarmiento rather than to Vicente Salgado. Hence, they argued that Vicente Salgado could not validly assign Lot 777 to Estrella Mapa on April 12, 1930, and that TCT 348292, procured only in 1986, had been issued despite the earlier issuance of plaintiffs’ titles, including titles issued in 1967 and 1958.

They further narrated that in October 1986, they learned through the City Assessor that Estrella Mapa was applying for tax clearance based on the 1986 title. The title bore an encumbrance stating that it was under investigation by the Verification Committee of the Land Registration Commission, later known as NALTDRA.

On November 4, 1987, the Verification Committee reported that TCT No. 348292 was fraudulently and irregularly issued as a duplication of earlier titles. The committee recommended the filing of a court action to annul TCT Nos. 348156, 348291, and 348292 in Estrella Mapa’s name, and also recommended investigative steps for possible criminal and administrative prosecution, including endorsement to the NBI. It also recommended returning original copies of the questioned transfer certificates after the complaint and annotation of notice of lis pendens.

An NBI agent’s report recommended prosecution of Estrella Mapa and Lourdes Angeles for alleged violation of Article 172 of the Revised Penal Code. Additionally, on April 22, 1988, Azucena O. Pua and Lucia Pua Liok Bin filed a motion for intervention and a complaint in intervention, asserting ownership based on the intervenors’ acquisition chain from Purita Mapua and plaintiffs.

On July 24, 1990, the trial court ruled in favor of plaintiffs and invoked de Villa vs. Trinidad to emphasize that when two certificates of title are issued to different persons over the same land, the earlier certificate prevails between the original parties and, in successive registrations, the holder under the prior certificate is entitled against those who relied on the later certificate.

The trial court then declared TCT No. 348292 null and void and ordered its cancellation, including cancellation of TCT No. 373356 and other titles emanating from TCT No. 348292. It also ordered reconveyance to specific plaintiffs under their respective earlier titles and granted injunctive relief and attorney’s fees, while dismissing counterclaims and crossclaims.

On appeal by petitioner, the Court of Appeals dismissed the appeal on two grounds: first, it held that the trial court’s authorization for Estrella Mapa’s issuance of TCT No. 348292 had lost force because the Court of Appeals had earlier declared the same RTC order null and void in the decision promulgated on August 29, 1991; second, it found the July 24, 1990 trial court decision to be a valid decision with no sufficient reason to disturb.

Re: G.R. No. 108759 (Annulment of Judgment after Overlap: RTC Branch 105)

A third proceeding developed from a complaint filed on February 9, 1988 by Edmund Ruiz, Romeo Gomez, and Rosalinda Villapa before the Regional Trial Court, Quezon City, Branch 105 against Estrella Mapa, Lourdes Angeles, Serafin Riosa, and Ernie Palmos. On September 22, 1989, the trial court rendered judgment declaring specific plaintiffs’ transfer certificates valid and full of force, and it declared Estrella Mapas Transfer Certificate No. 348292 null and void in so far as it overlapped plaintiffs’ lots. The court made permanent the writ of preliminary injunction and ordered defendants to pay moral, exemplary damages, and attorney’s fees. It further directed that the Office of the Solicitor General be urged to file an action to annul TCT No. 348292, if other private parties had not yet done so. It also directed investigation concerning authority or permits for subdivision lots within TCT 348292, TCT 348291, and TCT 348156, to protect lot buyers.

On July 13, 1992, petitioner, described as successor-in-interest of Palmera Agricultural Realty Development Corporation which was in turn successor-in-interest of Estrella Mapa regarding Lot 778 and a portion of Lot 777, filed before the Court of Appeals a petition for annulment of judgment. The Court of Appeals denied due course on February 4, 1993, holding that it was within the judicial prerogative under the Revised Rules of Court and in accordance with the Revised Internal Rules of the Court of Appeals for the trial court to declare defendants in default for failure to appear during pre-trial, and for the trial court to base its decision on the Verification Committee’s report as a consequence of default, particularly because defendants failed to cross-examine committee members.

Parties’ Contentions and the Core Issue

The consolidated cases raised the basic issue of whether the Court of Appeals erred in upholding the annulment of the RTC order in LRC Case No. Q-3369 (86) that authorized the issuance of titles based on sales certificates and technical descriptions as reconstituted by the Land Registration Commission.

Petitioner attempted to rely on his claimed acquisition chain stemming from Palmera’s predecessor in interest and, through that chain, on the validity of the reconstituted sales certificates and technical descriptions supporting Estrella Mapa’s registration and issuance of titles. Respondents, by contrast, relied on the legal invalidity of the underlying Friar Lands sales, the staleness and policy limitations against long-delayed assertion of rights, and the operation of the Torrens system in double-sale settings and where earlier titles already existed.

Legal Basis and Reasoning

The Court held that the subject lots belonged to the Piedad Estate, which was a Friar Land acquired by the Philippine Government on December 23, 1903 as indicated in Public Act No. 1120 (Friar Lands Act). It noted that the Piedad Estate had been titled in the name of the Government under Original Certificate of Title No. 614, and that under Act. No. 1120, the estate was placed under the administration of the Director of Lands.

On petitioner’s claim that his predecessor acquired the property through sales certificates issued in 1913, the Court

Case Syllabus (G.R. No. 102961-62)

Jesus P. Liao sought to annul multiple Court of Appeals decisions which annulled a Regional Trial Court order directing the Register of Deeds to issue transfer titles to Estrella Mapa over lots in the Piedad Estate, Quezon City.
The Court treated the cases as presenting a common controversy involving the issuance of several Torrens titles to different persons over the same property.
The Court denied the petitions for lack of merit and affirmed the assailed Court of Appeals decisions.

Parties and Procedural Posture

Petitioner was Jesus P. Liao, who pursued separate but consolidated Supreme Court recourses assailing appellate dispositions.
The Respondents included the Court of Appeals and private parties whose titles overlapped with the titles issued to Estrella Mapa.
In G.R. Nos. 102961-62, the Court of Appeals entertained petitions to annul the RTC order in LRC Case No. Q-3369 (86) and later denied Liao’s motion for reconsideration.
In G.R. No. 107625, private respondents filed a trial court action for Annulment of Title, Reconveyance of Property, Damages and Injunction with Restraining Order and later obtained a judgment that invalidated TCT No. 348292 as to overlapping portions.
In G.R. No. 108759, private respondents similarly sued for annulment of title and reconveyance, and the trial court ruled that TCT No. 348292 was null and void insofar as it overlapped plaintiffs’ lots.
The Court of Appeals in G.R. No. 108759 denied due course to Liao’s petition for annulment of judgment, leading to the Supreme Court petitions.

Key Factual Allegations

Estrella Mapa filed on March 5, 1986 in the RTC, Quezon City, Branch 99 a petition for reconstitution of documents and issuance of certificates of title over parcels covered by OCT 614, Decree No. 6667, GLRO Rec. No. 5975.
Estrella Mapa claimed a friar lands chain of title, asserting that on June 16, 1913, the Director of Lands issued certificates of sales to Vicente Salgado under Act. No. 1120.
The four friar lands parcels were Lot Nos. 755, 777, 778 and 783, located at Bgy. Payatas, Quezon City, forming part of the Piedad Estate, with areas stated in the decision.
Vicente Salgado allegedly assigned the property to Estrella Mapa on April 12, 1930.
After hearing, on June 30, 1986, the trial court ordered the Register of Deeds to issue transfer titles to Estrella Mapa for Lot No. 778 and portions of Lot No. 777, using technical descriptions approved and on file with the Bureau of Lands and earlier reconstituted in the Office of the Land Registration Commission.
The Register of Deeds initially issued TCT No. 348156 (August 5, 1986) and then cancelled it and issued TCT Nos. 348291 and 348292 (August 12, 1986) covering Lot No. 778 and a portion of Lot No. 777, respectively.
The issued titles conflicted with existing certificates, prompting actions for quieting of title and a National Bureau of Investigation inquiry.
Estrella Mapa later assigned portions covered by TCT Nos. 348291 and 348292 to Palmera Agricultural Realty Development Corporation, headed by Lourdes Angeles.
In the first appellate track (G.R. Nos. 102961-62), I.C. Cruz Construction, Inc. alleged that the title issued under the RTC order encompassed property registered in its name under TCT No. 836975.
In the first appellate track (G.R. Nos. 102961-62), Arle Development Corporation alleged overlap between TCT Nos. 263984 to 263989 and TCT No. 348292.
In the second track (G.R. No. 107625), respondents asserted that Lot 777 ceased to be part of friar land as early as May 1922 because the Director of Lands executed a deed of sale to Carlos Sarmiento and not to Vicente Salgado.
The respondents in G.R. No. 107625 alleged that Vicente Salgado could not validly assign in 1930 a property he did not own, and that TCT No. 348292 was procured only in 1986 despite older existing titles issued earlier.
A Verification Committee report found that TCT No. 348292 was fraudulently and irregularly issued as a duplication of previously issued titles and recommended an annulment action.
In the third track (G.R. No. 108759), the trial court recognized the validity of private plaintiffs’ certificates covering portions of Lot 777 and declared TCT No. 348292 null and void only insofar as it overlapped those lots.

Issues Presented

The central issue was whether the Court of Appeals erred in upholding the annulment of the RTC order in LRC Case No. 3369 (86) that authorized issuance of titles based on sales certificates and technical descriptions as reconstituted by the land registration authorities.
The case required determination of the legal effect of the asserted friar lands sales, the consequences of long delay in pursuing titling, and the validity of titles issued under allegedly conflicting registered records.

Statutory and Doctrinal Framework

The controversy involved friar lands administered under Act. No. 1120 (Friar Lands Act) and the Director o