G.R. No. 173120 - Spouses Yu Hwa Ping vs. Ayala Land, Inc.

Psu-25909 (1921): Approved survey by A.N. Feliciano for Spouses Diaz, covering 460,626 sqm (Lot 1).
Psu-47035 (1925), Psu-80886 (1930), Psu-80886/SWO-20609 (1931): Surveys by same agrimensor for different claimants (Mayuga, Guico, Yaptinchay) over the same parcel; these yielded OCT Nos. 1609, 242, 244.
1958–67: Titles issued on Psu-47035 and Psu-80886 series; lands sold to CPJ Corp. and later to ALI.
1968–70: Spouses Diaz secure original registration on Psu-25909 (OCT 8510), subdivide and transfer lots.
1993–94: Spouses Yu acquire half of Lot 1-A and all of Lot 1-B under OCT 8510 subdivisions.
1988–92: ALI acquires overlapping Lots 2, 3, 6 under new TCTs.

Diaz case (1971–2006): CPJ Corp. petitions to cancel OCT 8510 for fraud; RTC cancels, CA affirms, then reverses on reconsideration, and finally reinstates cancellation.
Yu case (1996–2006): Spouses Yu sue ALI for nullity of ALI’s TCTs, recovery of possession, confirmation of their titles; Las Piñas RTC orders verification survey and rules for Spouses Yu; CA alternates between sides on appeal and reconsiderations.

Act 496 §38 permits petition for review of fraudulent registration within 1 year; beyond that, action lies in ordinary court for reconveyance or damages.
Reconveyance actions based on fraud (implied trust) prescribe in 10 years (Art. 1144(2)), or are imprescriptible if movant possesses continuously.
Reconveyance actions based on void contracts are imprescriptible (Art. 1410).
Spouses Diaz’s petition was filed within 1 year of May 21, 1970.
Spouses Yu’s complaint (nullity of void titles, reconveyance and recovery of possession) filed in 1996 is imprescriptible and not barred by Act 496.

General rule: between conflicting Torrens titles, earlier registration prevails (Legarda v. Saleeby; Garcia; MWSS; Carpo; Yulo).
Exception: if land inclusion in earlier title results from mistake or fraud, a later valid title may prevail to prevent injustice.

A Torrens title is evidence, not creation, of ownership; courts may examine underlying surveys when fraud or manifest error appears.
Verification surveys supervised by commissioners (DENR engineers) are proper methods to resolve overlap disputes (Cambridge Realty; Chua v. San Diego).

Las Piñas RTC’s supervised survey (Apr–Jun 1998) and reports revealed:

Psu-47035 misrecords claimant’s name (Estanislao vs. Dominador Mayuga).
Psu-80886 and PSU-80886/SWO-20609 exhibit abrupt shading contrasts, unexplained erasures of total-area entries, inconsistent place names, and only “Sgd.” prefix without genuine Director of Lands’ signature.
Reference to boundary monument B.L.L.M. No. 4—which did not exist until 1937—on a 1930-dated plan.
Single surveyor prepared four conflicting plans for the same land with differing results, a practice unheard-of in standard geodetic procedure.

Bore consistent signatures of surveyor and Director of Lands; contained no erasures; was duly approved (May 26, 1921); authentic originals retrievable from Bureau of Lands; certified by court-appointed commissioner.

Supreme Court (1941) recognized defects in Psu-80886: predecessor failed to submit technical measurements and continuous occupation.
CA awarded Lots 2 & 3 subject to an amended, properly approved plan—a condition never fulf

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Whether the complaint of Spouses Yu Hwa Ping and Mary Gaw is barred by prescription.
Whether the validity of the surveys of OCT Nos. 242, 244, and 1609 vis-à-vis OCT No. 8510 can be collaterally attacked.
Whether the Supreme Court’s decision in Guico v. San Pedro applies to the present surveys.
Whether the alleged errors in PSU-80886 and PSU-47035 are of such gravity as to invalidate OCT Nos. 242, 244, 1609 and their transfers.

March 17, 1921 – Spouses Andres Diaz and Josefa Mia filed survey PSU-25909 over Lot 1 (460,626 sqm) at Sitio Kay Monica, Barrio Pugad Lawin; approved May 26, 1921.
October 21, 1925 – Survey PSU-47035 over Lot 3 for Dominador Mayuga at Sitio May Kokek, Barrio Almanza.
July 28, 1930 – Survey PSU-80886 for Eduardo C. Guico at Barrio Tindig na Mangga.
March 6, 1931 – Survey PSU-80886/SWO-20609 for Alberto Yaptinchay covering Lots 2 (158,494 sqm) and 3 (171,309 sqm).
May 9 & 11, 1950 – OCT Nos. 242 and 244 issued to Yaptinchay.
May 21, 1958 – OCT No. 1609 issued to Dominador Mayuga (Lot 3 under PSU-47035).
May 18, 1967 – CPJ Corporation purchased portions under OCT No. 242; TCT No. 190713 issued.
February 16, 1968 – Andres Diaz filed original registration for Lot 1 of PSU-25909 before CFI of Pasay.
October 19, 1969 – CFI judgment in favor of Andres Diaz; May 19,1970 OCT No. 8510 issued.
May 21,1970 – Spouses Diaz subdivided OCT 8510 into Lots 1-A to 1-J and conveyed interests.
August 30 & December 4, 1976 – Diaz sold several lots to Librado Cabautan; new TCTs Nos. 287411–287416.
March 12, 1993 – Spouses Yu acquired undivided half of Lot 1-A (67,813 sqm).
January 27, 1994 – Spouses Yu acquired Lot 1-B (135,000 sqm); TCTs 39408 and 64549 issued.

1971 – CPJ Corp. filed Land Registration Case N-24-M before RTC Pasig to review OCT 8510 for alleged fraud; RTC Pasig Decision (Dec 13, 1995) ordered cancellation of OCT 8510 and its transfers.
1996 – Spouses Yu discovered Ayala Land, Inc. (ALI) fences on overlapping lots; filed nullity and recovery suit in RTC Las Piñas (Dec 4, 1996).
1998 – Court-appointed commissioner conducted verification survey supervised by Engr. Remolar; parties’ surveyors Pada, Ocampo, Francisco submitted reports.
May 7, 2001 – RTC Las Piñas Decision declared ALI’s titles (TCT 41325, 41263, 41262, OCT 1609) spurious and void ab initio; upheld Yu’s TCTs 39408 & 64549; awarded damages.
2003 – CA Decision (June 19, 2003) in consolidated appeals (CA-G.R. CV 61593 & 70622) ruled for ALI: affirmed cancellation of OCT 8510 and held Yu’s suit barred by prescription.
2005 – CA A