G.R. No. 150462 - Top Management Programs Corp. vs. Fajardo

Case Summary (G.R. No. 150462)

Factual Background: Competing Land Registration Claims and Overlapping Decrees

On December 31, 1964, Gregorio filed an application for registration over Lots 1 to 4 of Plan Psu-204785 in LRC Case No. N-5053, LRC Rec. No. N-27523. On January 4, 1966, the CFI declared abandoned the reserved oppositions of Jose T. Velasquez and Pablo Velasquez. The CFI then rendered a decision on January 31, 1966 in LRC Case No. N-5053 declaring Gregorio the absolute owner of Lots 1, 2, 3, and 4, and on March 9, 1966 ordered the issuance of the decree of registration based on finality of that decision.

Meanwhile, on July 29, 1965, Velasquez filed a separate application for registration over six lots denominated as Lots 7 and 9 of Psu-80886, Ap-5538, and Lots 1, 7, 9, and 11 of Psu-56007 Amd., Ap-11135, in LRC Case No. N-5416, LRC Rec. No. N-28735, before the same court. The CFI promulgated a decision on March 30, 1966 in LRC Case No. N-5416 adjudicating certain lots to Velasquez, and ordered the issuance of the decree of registration after finality.

Significantly, the Land Registration Authority (LRA) later called attention to overlapping portions involving Lots 1, 7, and 11 of Psu-56007 Amd. (awarded to Velasquez) and Lots 1 to 4 of Psu-204785 (adjudicated to Gregorio). On September 16, 1966, the LRA informed the CFI of amendments excluding portions overlapping with Gregorio’s lots. Acting on this report, Velasquez petitioned the CFI to set aside the award earlier made in favor of Gregorio. On November 23, 1966, the CFI issued an order declaring the application of Velasquez due course insofar as Lots 1 and 7 identical to Gregorio’s Lots 1 to 4 were concerned, and it declared the relevant portions in favor of Gregorio null and void.

On December 6, 1966, Decree Nos. N-111862 to N-111865 and corresponding OCTs were issued in favor of Velasquez. Gregorio appealed the CFI’s November 23, 1966 decision to the CA (CA-G.R. No. 40739-40-R). On July 30, 1971, the CA reversed the CFI and declared null and void the CFI decision in LRC Case No. N-5416 insofar as it adjudicated Lots 1 and 7 of Plan Ap-11315 to Velasquez, and directed that the March 9, 1966 order for the issuance of a decree in LRC Case No. N-5053 in Gregorio’s name be given due course. Entry of judgment showed the CA decision became final and executory on February 1, 1972.

Velasquez then filed a petition for review with the Court, docketed as G.R. Nos. L-34239-40. The Court ultimately denied the petition, with costs, via resolution dated February 8, 1984, which became final and executory on March 2, 1984.

Subsequent Titling: OCT for Gregorio, Later Litigation, and the Duplication Trigger

Before the denial became final, on October 31, 1972, the LRA issued Decree No. N-141990 over Lots 1, 3, and 4 of Plan Psu-204785, and OCT No. 9587 was issued in the name of Gregorio, later subject to further litigation. In Civil Case No. 16977, Gregorio sought annulment of a deed of sale over these lots in favor of Luciana Parami. The CFI dismissed Gregorio’s complaint on May 8, 1974, but on appeal the CA reversed, and in a decision dated February 7, 1978 declared the sale null and void and ordered cancellation of Parami’s certificate and issuance of an OCT in favor of Gregorio. On November 20, 1979, the court declared Gregorio’s children as compulsory heirs to substitute the plaintiff. An OCT was then cancelled and TCT No. S-91911 was issued in favor of the heirs of Emilio Gregorio.

In parallel, an LRA report dated September 12, 1984 informed the CFI in LRC Case No. N-5416 that compliance with the July 30, 1971 CA decision in CA-G.R. No. 40739-40-R would result in duplication of titles because Lots 1, 3, and 4 of Plan Psu-204785 were already covered by TCT No. S-91911 with annotations of encumbrances. The LRA recommended declaration of the relevant decrees and subsequent titles emanating from them as null and void.

Despite this, the heirs of Gregorio filed an ex-parte motion for execution on April 9, 1984 in the RTC (LRC Case Nos. N-5053 and N-5416). On March 21, 1986, the RTC of Pasig issued an order declaring Decree Nos. N-111862 to N-111865 null and void and directing the Register of Deeds to cancel the OCTs in the name of Velasquez and issue new certificates in the name of the heirs of Emilio Gregorio, pursuant to an order dated March 9, 1966 in LRC Case No. N-5053. Following this, TCT Nos. 107727, 107728, and 107729 issued in the name of the heirs of Gregorio on April 29, 1986, covering, among others, Lot 1. Later, by partition, Lot 1 was subdivided into Lot 1-A (assigned to the heirs of Gregorio) and Lot 1-B (assigned to Galman), leading to issuance of derivative titles such as TCT No. 4635 in the name of the heirs of Gregorio.

The Competing Title Histories: Private Respondent’s Title and Petitioner’s Claim

A duplication of titles over Lot 1, Psu-204785, followed from issuance of TCT No. S-91911 and the later titles TCT No. 107729 (and its derivative TCT No. 4635). This set the stage for the present controversy.

Private respondent Luis Fajardo’s claim stemmed from a separate civil case to enforce an agreement entered into with Trinidad involving Gregorio’s lands. After the CA rendered a favorable ruling on Gregorio’s appeal, Trinidad and Fajardo filed Civil Case No. 35305 before the RTC of Pasig, Branch 164, to enforce the agreement. On May 8, 1986, the RTC rendered judgment ordering the defendants to convey 20% of the total area to Trinidad and conveying to Fajardo one-half of the remainder, and to pay costs. Execution initially failed, but a deputy sheriff carried out the conveyance through an Officer’s Deed of Conveyance dated August 15, 1989. The Register of Deeds of Las Pinas indicated that the deed could not be pursued because the property had been sold to other parties, but reports submitted later acknowledged that an anomalous situation existed in the records due to the existence of two titles over the same land, and that TCT No. S-91911 should have been cancelled when the 1986 titles issued.

The RTC ultimately reinstated its directive for annotation and later authorized subdivision of Lot 1, leading to issuance of TCT No. T-27380 in the name of Fajardo on December 12, 1991, for a portion of Lot 1. On April 26, 1993, TCT No. T-27380 was cancelled by order and TCT No. T-34923 issued in Fajardo’s name without the prior encumbrances carried over from TCT No. S-91911.

Petitioner Top Management Programs Corporation claimed it acquired the same property in good faith and for value. It sought annulment of the RTC orders in Civil Case No. 35305 on grounds of extrinsic fraud, alleging that, under a Deed of Absolute Sale dated November 29, 1988 (notarized January 9, 1989), Gregorio’s heirs sold a 20,000 sq. ms. parcel identified as Lot 1-A Psd-293076 (a portion of Lot 1, Psu-204785 covered by TCT No. T-4635), leading to issuance of TCT No. T-8129 in its name on February 20, 1989. The CA dismissed the annulment petition (CA-G.R. SP No. 26100) for lack of extrinsic fraud, and the Court affirmed that dismissal in Top Management Programs Corp. v. Court of Appeals, G.R. No. 102996, May 28, 1993.

Civil Case No. 94-564: Petition for Quieting of Title and Damages

After its annulment attempt failed, petitioner filed Civil Case No. 94-564 on February 10, 1994 in the RTC of Makati, seeking quieting of title with damages. It alleged that issuance of TCT No. T-27380 in Fajardo’s name, although Fajardo allegedly obtained it in a case without petitioner’s knowledge and participation, constituted a cloud on petitioner’s title. Petitioner asserted it acquired the property in good faith and for value from the original owners.

Private respondent moved to resist the complaint by answer, asserting that petitioner’s title originated from a void title. Private respondent relied on the effect of the Court’s resolution in G.R. No. L-34239-40, which nullified OCT No. 5678 from which TCT No. 4635 was derived, and the appellate rulings that nullified the CFI decision in LRC Case No. N-5416 insofar as it adjudicated the relevant lots to Velasquez.

Trial Court and Court of Appeals Rulings

After petitioner offered evidence, private respondent filed a demurrer to evidence. The RTC granted the demurrer in an order dated June 8, 1998, dismissed petitioner’s complaint, and ordered the Register of Deeds of Las Pinas City to cancel TCT No. T-8129. Petitioner appealed, but on May 30, 2001 the CA affirmed the RTC dismissal. The CA held that petitioner could not invoke the rule that the earlier title prevails because the origin of TCT No. 107729, on its face, showed it traced to a mother title already voided by appellate determinations. The CA denied petitioner’s motion for reconsideration in a later resolution dated October 23, 2001. Hence, petitioner came to the Court with the present Rule 45 petition.

The Parties’ Contentions Before the Court

Petitioner argued that the CA erred in declaring TCT No. T-8129 defective based on what it characterized as a mere clerical error in the register annotations. It insisted that its title issuance resulted from a final and executory determination in favor of Gregorio’s claim over the subject property. It also argued that private respondent’s title should not stand because OCT No. 9587 was allegedly void for being issued during the pendency of Velasquez’s petition to the Court. It invoked Director of Lands v. Reyes for the rule that a certificate of title issued on the basis of a non-final judgment is a nullity.

Private respondent countered that petitioner’s posture effectively admitted the defect in the title’s annotations and that petitioner could not, in the same proceeding, seek quieting of title while also seeking correction of its own title’s entries. As to OCT No. 9587, private respondent argued that the underlying decision in LRC Case No. N-5053 had already attained finality before Velasquez sought annulment based on later LRA reports, thus Director of Lands v. Reyes did not apply

Case Syllabus (G.R. No. 150462)

Top Management Programs Corporation sought review on certiorari under Rule 45 to reverse the Court of Appeals (CA) Decision dated May 30, 2001 and CA Resolution dated October 23, 2001.
The CA affirmatively upheld the Regional Trial Court (RTC) of Las Pinas City, Branch 275 Order dismissing Civil Case No. 94-564 for quieting of title with damages.
The controversy arose from alleged overlapping and duplication of Torrens titles over the same parcel identified as a portion of Lot 1, Psu-204785.
The Supreme Court denied the petition and affirmed the CA and RTC rulings.

Parties and Procedural Posture

Petitioner was Top Management Programs Corporation.
Respondents were Luis Fajardo and the Register of Deeds of Las Pinas City.
The petition was filed to challenge the CA’s affirmance of the RTC’s dismissal after the trial court granted a demurrer to evidence.
The Supreme Court exercised review on the record and affirmed the dismissal of the quieting-of-title complaint.

Earlier Land Registration History

On December 31, 1964, Emilio Gregorio filed an application for registration over Lots 1 to 4 of Plan Psu-204785 in LRC Case No. N-5053.
On January 4, 1966, the then CFI declared as abandoned reserved oppositions of Jose T. Velasquez and Pablo Velasquez.
On January 31, 1966, the CFI rendered a decision in LRC Case No. N-5053 declaring Gregorio the absolute owner of Lots 1, 2, 3 and 4 of Plan Psu-204785.
On March 9, 1966, an order issued for the issuance of the decree of registration after the January 31, 1966 decision had become final.
On July 29, 1965, Velasquez filed another application for registration over multiple lots in LRC Case No. N-5416.
On March 30, 1966, the CFI promulgated a decision in LRC Case No. N-5416 awarding specified lots to Velasquez, and on May 3, 1966 ordered issuance of a decree upon finality.
The Land Registration Authority (LRA) later identified overlapping issues between lots awarded to Velasquez and those adjudicated to Gregorio.
On September 16, 1966, the LRA informed the CFI that amendments excluded portions covered by Gregorio’s lots.
On November 23, 1966, the CFI issued an order declaring Velasquez’s application due course only insofar as certain lots identical to Gregorio’s were treated as null and void and Gregorio prevailed for those overlapping areas.
On December 6, 1966, Decree Nos. N-111862 to N-111865 and corresponding OCTs were issued in favor of Velasquez despite the CFI’s earlier nullity declaration as to overlapping portions.
On January 7, 1967, Gregorio appealed the November 23, 1966 decision to the CA.
On July 30, 1971, the CA Decision in CA-G.R. No. 40739-40-R declared null and void the CFI decision insofar as it adjudicated certain lots to Velasquez and directed that the order for decree in LRC Case No. N-5053 in Gregorio’s name be given due course.
The CA decision became final and executory on February 1, 1972, and entry of judgment issued on February 1, 1972.
Velasquez filed a petition for review docketed as G.R. Nos. L-34239-40, and the Supreme Court ultimately denied it with a Resolution dated February 8, 1984 for lack of merit, with finality on March 2, 1984.
On October 31, 1972, Decree No. N-141990 over relevant Gregorio lots was issued, followed by issuance of OCT No. 9587 on November 21, 1972.
The Gregorio lots covered by OCT No. 9587 were later the subject of litigation in Civil Case No. 16977, which resulted in nullification of a deed of sale and cancellation of OCT No. 9587, and the issuance of TCT No. S-91911 to Gregorio’s heirs.

The Pasig RTC Civil Case Link

In Civil Case No. 16977, the CA declared the deed of sale null and void and ordered cancellation of title in the Paramis name, with issuance of an OCT to Gregorio over Lots 1, 3 and 4.
On November 20, 1979, the same court declared Gregorio’s children as compulsory heirs to substitute the plaintiff.
As a consequence, OCT No. 9587 was cancelled and TCT No. S-91911 was issued to the heirs of Emilio Gregorio.
In LRC Case No. N-5416, the LRA later reported that implementing the July 30, 1971 CA decision in the earlier Gregorio-versus-Velasquez matter would cause duplication of titles.
The LRA report specifically stated that the heirs’ lots were already covered by TCT No. S-91911 and enumerated subsequent transfers and registrations, including certificates issued in Velasquez’s name and later transferred entries, and recommended cancellation of the Velasquez decrees and derivative titles.

Civil Case 35305: Contract Enforcement

After the CA ruling in Gregorio’s favor, Gregorio entered into an agreement with Tomas Trinidad and Luis Fajardo titled “Kasunduan na may Pambihirang Kapangyarihan.”
The agreement provided that Fajardo would finance litigation costs and, contingent on success, would receive one-half of the property after deducting twenty percent (20%) for attorney’s fees for Trinidad.
Trinidad and Fajardo enforced the agreement by filing Civil Case No. 35305 before the RTC of Pasig, Branch 164.
On May 8, 1986, the RTC rendered judgment ordering defendants to convey specified areas to Trinidad and Fajardo and to pay costs.
The heirs of Gregorio appealed, but the CA declared the appeal abandoned and dismissed it.
Entry of judgment was issued on December 8, 1988, after which Trinidad and Fajardo sought a writ of execution.
The sheriff return filed on April 10, 1989 reflected an unsatisfied writ.
The court appointed Deputy Sheriff Marcial Estrellado, who executed an Officer’s Deed of Conveyance dated August 15, 1989 in favor of Trinidad and Fajardo.
The Register of Deeds of Las Pinas stated that the deed could not be pursued because the subject property was already sold to other parties, and later acknowledged an anomalous situation of two distinct titles over the same parcel although in the same owners’ names.
The RTC later directed annotation of the deed at the back of TCT No. S-91911, with further directive reiterated on June 7, 1991.
On June 26, 1991, the RTC authorized subdivision and directed issuance of separate titles to Trinidad and Fajardo.
A new certificate TCT No. T-27380 in the name of Fajardo covering 29,369 sq. ms. was issued on December 12, 1991, and later it was cancelled on April 26, 1993 by issuance of TCT No. T-34923 in Fajardo’s name.

Petitioner’s Competing Claim

Top Management Programs Corporation sought annulment of certain RTC orders in September 24, 1991, alleging extrinsic fraud in reinstating the August 14, 1989 order and directing issuance of new certificates in Trinidad and Fajardo’s names.
Petitioner alleged it acquired a portion of the land by virtue of a Deed of Absolute Sale dated November 29, 1988 notarized on January 9, 1989, covering Lot 1-A Psd-293076, a portion of Lot 1, Psu-204785, covered by TCT No. T-4635.
Petitioner claimed TCT No. T-8129 issued in its favor on February 20, 1989.
The CA dismissed the annulment petition in CA-G.R. SP No. 26100 on November 28, 1991, finding no extrinsic fraud.
The Supreme Court dismissed petitioner’s certiorari petition in Top Management Programs Corp. v. Court of Appeals (G.R. No. 102996) by Decision dated May 28, 1993.
The Court in that earlier case refrained from ruling on whether petitioner should assert a third-party claim against the executing deputy sheriff or through an independent action, because the resolution was inconsequential to the outcome.

Civil Case 94-564 Quieting of Title

Petitioner filed Civil Case No. 94-564 in the RTC of Makati on February 10, 1994 for Quieting of Title With Damages.
Petitioner alleged that issuance of TCT No. T-27380 in Fajardo’s name constituted a cloud because petitioner had TCT No. T-8129 and was allegedly a good faith buyer for value.
Petitioner asserted it did not know of the civil case execution leading to the issuance of Fajardo’s title because it was not a party.
Private respondent’s answer contended that petitioner’s title originated from a void title, specifically that OCT No. 5678 and its derivative titles were declared null and void by the Supreme Court’s Resolution dated February 8, 1984 in G.R. No. L-34239-40.
After petitioner presented evidence, private