G.R. No. 246826 - Moldex Realty, Inc. vs. Spouses Yu

Case Summary (G.R. No. 246826)

Petitioner and Respondent Roles

Petitioner Moldex defended the location of its perimeter fence as within the metes and bounds of its Torrens title and maintained that Spouses Yu’s claim of encroachment amounted to a collateral attack on Moldex’s title. Respondents Spouses Yu sought a prohibitory injunction, removal of the fence, and damages, asserting Moldex had encroached on their titled land.

Key Dates and Procedural Posture

Complaint for prohibitory injunction filed October 1994.
Joint motion for ground relocation survey filed March 21, 1995; DENR survey directed the same day.
RTC decision dismissing complaint (summary judgment) dated December 27, 1999 (earlier RTC disposition).
Court of Appeals (CA) reversed and remanded in Decision dated October 15, 2002.
RTC Decision dismissing complaint (after remand) dated July 26, 2016, awarding P30,000 attorney’s fees to Moldex.
CA Decision dated November 6, 2018 reversed the RTC, ordered removal of Moldex’s constructions, awarded P100,000 moral damages and P50,000 attorney’s fees to Spouses Yu; CA denied reconsideration in Resolution dated March 19, 2019.
Petition for review on certiorari elevated to the Supreme Court; Supreme Court granted petition and reinstated the RTC decision (decision issued July 28, 2021).

Applicable Law and Constitutional Framework

Applicable constitutional framework: the 1987 Constitution (decision rendered in 2021). Controlling statutory and doctrinal authorities cited in the proceedings include the Torrens system principles (indefeasibility of Torrens title), Section 48 of Presidential Decree No. 1529 (Property Registration Decree) prohibiting collateral attacks on certificates of title, and settled jurisprudential principles governing injunctions and evidentiary weight of technical descriptions in Torrens titles.

Factual Background and Prior Survey Work

Spouses Yu alleged Moldex encroached on a 3,159 sq.m. portion of Lot 3869‑N‑1‑A (TCT No. T‑280169) via construction of a perimeter fence. To resolve the boundary dispute, the parties jointly requested a DENR relocation survey (March 21, 1995), and Engr. Danilo A. Arellano of DENR conducted ocular inspection and relocation surveys with parties’ representatives present. Evidence and testimony later revealed apparent discrepancies between the technical descriptions in the Yu Torrens titles and the actual positions of the lots on the ground, traceable to historical subdivisions and resurveys of the original Imus Friar Estate lots.

Trial Court (RTC) Findings on Remand

After hearings and additional evidence, the RTC (Branch 20, Imus City) dismissed Spouses Yu’s complaint in its July 26, 2016 Decision. The RTC found Moldex’s perimeter fence was within the metes and bounds of its own Torrens title and emphasized that technical descriptions in Torrens certificates are binding and not alterable in a collateral proceeding. The RTC awarded Moldex P30,000 attorney’s fees for costs incurred in lifting a prior temporary restraining order.

Court of Appeals Ruling and Rationale

On appeal the CA reversed the RTC (November 6, 2018). The CA accepted Engr. Arellano’s expert testimony that there was an error in the technical description of the Yu titles and that survey principles required conforming the later (1991) Moldex relocation survey to the earlier (1957) resurvey of the Yu property. The CA therefore concluded Moldex had encroached, ordered removal of constructions within the Yu property, and awarded P100,000 moral damages and P50,000 attorney’s fees to Spouses Yu. The CA rejected Moldex’s offered 1951 Friar Land Survey 796‑D on authentication grounds and found Moldex estopped/lached from raising a collateral attack argument on appeal.

Issue Presented to the Supreme Court

Whether the CA committed reversible error in ordering Moldex to desist from alleged encroachment and awarding damages — specifically whether Spouses Yu established a clear, unquestioned right in esse to the disputed area that would justify issuance of a prohibitory injunction, given apparent discrepancies between Torrens technical descriptions and the physical ground location.

Arguments of Moldex (Petitioner)

The encroachment claim amounted to a collateral attack on Moldex’s Torrens title because it effectively questioned the metes and bounds as shown on Moldex’s certificate.
Collateral‑attack issues implicate public policy favoring the stability of registered ownership; therefore Moldex should be allowed to raise that defense even if only argued on appeal.
Moldex urged that the 1951 Friar Land Survey 796‑D and other survey evidence showed its correct location and ownership, and that the CA erred in rejecting such evidence.
Moldex contested awards of damages to Spouses Yu and counterclaimed for actual and moral damages and attorney’s fees.

Arguments of Spouses Yu (Respondents)

Spouses Yu denied defects in their technical descriptions and attacked the credibility and qualification of Moldex’s witness Engr. Edgar S. Barraca; they alleged his opinions were hearsay and not based on official DENR records.
They argued Moldex was estopped by the parties’ joint motion accepting the DENR relocation survey results and that the doctrines and findings established by prior CA decisions (law of the case) supported their position.
The CA’s application of Engr. Arellano’s testimony was consistent with resolving the dispute on the ground.

Legal Principles on Injunctions and Torrens Titles Applied by the Court

Requisites for injunction: (1) existence of a right to be protected; and (2) acts violative of that right. In real‑property cases, injunctions (especially preliminary) require the plaintiff to have a sufficiently established title or right — a right in esse — to justify preventive equitable relief.
A Torrens certificate is the best evidence of ownership; the metes and bounds in the technical description define titled property. Errors in technical description or location cannot be disregarded lightly because the Torrens system depends on the integrity of titles.
Section 48, PD No. 1529: a certificate of title shall not be subject to collateral attack and cannot be altered, modified, or canceled except in a direct proceeding. Collateral attack occurs when a title is assailed incidentally in another action seeking different relief.

Supreme Court’s Analysis

The Court held that the controversy was fundamentally a boundary dispute that sought, by an action for injunction, effectively to alter or relitigate the metes and bounds reflected in Torrens certificates. Spouses Yu had not established their right to the specific portion complained of with the certainty required for equitable relief.
Given the acknowledged discrepancy between the technical descriptions of the Yu titles and the actual ground position (as previously found and explored in earlier proceedings), the Court found that it was inappropriate to resolve the boundary question within an action for prohibitory injunction. To allow such a determination would amount to a collateral attack on Torrens titles contrary to Section 48 of PD No. 1529. The proper remedy for correcting errors in technical descriptions is a direct proceeding to reform or obtain new titles bearing correct technical descriptions and locations.
The Court emphasized that injunction is not a substitute fo

Case Syllabus (G.R. No. 246826)

Case Caption and Nature of Proceeding

Petition for Review on Certiorari under Rule 45 challenging the Court of Appeals Decision dated November 6, 2018 and Resolution dated March 19, 2019 in CA-G.R. CV No. 108831.
Petitioners: Moldex Realty, Inc. (Moldex) and Rey Ignacio Diaz (Diaz), then Executive Vice President of Moldex.
Respondents: Spouses Ernesto V. Yu and Elsie Ong Yu (Spouses Yu).
Relief sought below: prohibitory injunction with temporary restraining order, removal of perimeter fence, and damages; relief on appeal and in this petition: review of appellate rulings ordering removal of construction and awarding damages.

Factual Background and Subject Properties

Spouses Yu own two adjoining parcels:
- Lot No. 3869-N-1-A, TCT No. T-280169, area 4,061 sq.m.
- Lot No. 3869-N-1-B, TCT No. T-280170, area 4,062 sq.m.
- Both located in Barrio Pala-pala, Dasmariñas, Cavite; both originally part of the Imus Friar Estate.
Moldex is registered owner of Lot No. 3870 under TCT No. T-317603, with area 201,246 sq.m., adjacent to the Yu property; also originally from the Imus Friar Estate.
Spouses Yu alleged Moldex encroached upon a 3,159-sq.m. portion of Lot 3869-N-1-A (TCT No. 280169) by constructing a concrete perimeter fence and refused demands to vacate or cease construction.
Moldex denied encroachment, asserting the fence was constructed within its own titled lot; contended the boundary conflict arose because the technical descriptions in titles do not reflect actual ground positions.

Early Attempt to Settle the Boundary: Joint Motion and DENR Survey

Parties filed a Joint Motion dated March 21, 1995 requesting the trial court to direct the DENR Regional Technical Director, Land Management Bureau, Region IV-A, to relocate on the ground the parcels described in TCT Nos. T-280169 and T-280170; parties agreed to accept the survey results as the true and correct location of the Yu property.
RTC issued an Order dated March 21, 1995 directing a Geodetic Engineer from DENR to conduct a survey.
Engr. Danilo A. Arellano of DENR, with party representatives and Branch Clerk of Court, conducted ocular inspections and relocation surveys of the Yu property.

Procedural History (Chronology of Decisions)

Complaint for Prohibitory Injunction with TRO, Removal of Perimeter Fence, and Damages filed October 6, 1994.
After motions and evidence, RTC rendered Decision on December 27, 1999 dismissing Spouses Yu’s complaint for lack of merit (summary judgment).
Court of Appeals Decision dated October 15, 2002 reversed and set aside RTC’s 1999 ruling and remanded for further proceedings, identifying material discrepancies in technical descriptions and survey ties.
After further hearings and evidence, Branch 20, RTC, Imus City rendered Decision dated July 26, 2016 dismissing the complaint for lack of merit and awarding P30,000.00 as attorney’s fees to Moldex for lifting of TRO.
CA, on ordinary appeal, reversed and set aside RTC July 26, 2016 Decision by Decision dated November 6, 2018; ordered Moldex to remove constructions within Yu property and awarded P100,000.00 moral damages and P50,000.00 attorney’s fees to Spouses Yu.
Moldex filed Motion for Reconsideration; CA denied the motion in Resolution dated March 19, 2019.
Moldex filed Petition for Review on Certiorari before the Supreme Court; Supreme Court rendered Decision dated July 28, 2021 (G.R. No. 246826).

Discrepancies and Survey-Related Observations Noted by the CA (2002)

CA observed significant discrepancies and asked interrelated questions:
- Origin of error causing difference in distance from Corner 1 of Lot 3869-N-1-A to Mon. 152 of the Imus estate (from 578.32m to 178.32m in TCT No. 280169).
- Whether this error affects Lot 3869-N-1-B (TCT No. 280170) and Lot 3870 (Moldex).
- If an error occurred during subdivision in 1972, how did it affect resurvey of Lot 3870 in 1991?
- Why line of corners 10 to 11 of Lot 3870 does not coincide with line of corners 1 to 2 of Lot 3869-N-1-A?

Trial Court (RTC) Findings in 2016 Decision

RTC found no encroachment: Moldex’s perimeter fence was entirely within the boundaries of its lot as provided in its title.
RTC emphasized that technical descriptions in Torrens titles are binding and cannot be changed, altered, modified, enlarged, or diminished in a collateral proceeding.
RTC awarded P30,000.00 attorney’s fees to Moldex for expenses incurred to lift the TRO.

Court of Appeals Ruling (Nov 6, 2018) and Reasoning

CA reversed RTC and ordered removal of constructions and awarded P100,000.00 moral damages and P50,000.00 attorney’s fees in favor of Spouses Yu.
CA criticized RTC for stopping at the finding of defective technical descriptions and not applying correct surveying principles as guided in CA’s earlier 2002 Decision.
CA credited Engr. Arellano’s expert testimony that the 1991 relocation survey of Moldex should conform to the 1957 resurvey of the Yu property.
CA found Moldex acted in bad faith by forcibly entering Yu property and constructing a fence despite objections and police assistance requests by Spouses Yu.
CA denied Moldex’s Motion for Reconsideration (Resolution dated March 19, 2019), observing that:
- Moldex raised collateral attack issue for the first time on appeal and was estopped.
- Moldex was barred by laches after almost two decades of pending litigation.
- CA rejected Moldex’s 1951 Friar Land Survey 796-D for lack of proper offer and authentication before the trial court.

Issues Presented in the Supreme Court Petition

Whether the Court of Appeals committed reversible error in ordering Moldex to desist from alleged encroachment and in awarding removal and damages.
Whether Spouses Yu were entitled to a final writ of prohibitory injunction given the boundary and