G.R. No. 147043 - NBI vs. Microsoft Corp. vs. Hwang

Case Summary (G.R. No. 147043)

Key Dates and Procedural Posture

Relevant factual/transactional dates in the record: respondent was granted a free patent (patent dated April 26, 1979); petitioner alleges a purchase by deed of absolute sale dated February 1, 1993 (consideration P250,000 paid); petitioner filed an application for original registration initially on December 22, 1994 and amended it on September 19, 1996 to cover Lot 8348‑B; respondent opposed; the Regional Trial Court (RTC) granted registration for petitioner in a September 4, 2009 decision; the Court of Appeals (CA) reversed and denied the application on June 26, 2012; petitioner sought review, and the Supreme Court rendered the final disposition denying the petition (petition denied, without prejudice to separate remedies).

Facts Material to the Dispute

Petitioner claims ownership by virtue of a deed of absolute sale from respondent covering Lot 8348‑B and sought original registration under P.D. No. 1529. Respondent denied the sale’s validity, continued in possession, later secured registration by obtaining OCT No. OP‑1840 for the parcel. During the RTC proceedings, petitioner completed presentation of evidence but was not given leave to amend her pleading to include a reconveyance action. The CA reversed the RTC on the ground that petitioner failed to satisfy the possession/occupation requirement of Section 14(1) P.D. No. 1529 and because the land had already been registered in respondent’s name.

Issues Presented by Petitioner

Petitioner’s principal contentions, as pressed to the Court, were: (1) she is entitled to registration under Section 14(1) P.D. No. 1529 because she (through her predecessor‑in‑interest) had possession and occupation since June 12, 1945 or earlier; (2) her predecessor’s continued possession after the 1993 sale should be imputed to her or excused as a fortuitous event under the Public Land Act; (3) respondent’s registered title was fraudulently obtained and, accordingly, petitioner should either be registered as owner or be granted reconveyance as remedy; and (4) the CA erred in denying registration and in failing to order reconveyance.

Legal Standards Applied (P.D. No. 1529 and Related Law)

P.D. No. 1529 governs original registration of unregistered lands. Section 14(1) requires proof that the applicant or predecessors‑in‑interest have been in “open, continuous, exclusive and notorious possession and occupation” of alienable and disposable public land under a bona fide claim of ownership since June 12, 1945 or earlier. Section 103 provides that when public land is alienated and thereafter registered, the land becomes registered land under the Decree. Section 47 declares that no title to registered land shall be acquired by prescription or adverse possession in derogation of the registered owner’s title. Section 48 provides that a certificate of title shall not be subject to collateral attack and can be altered or canceled only in a direct proceeding in accordance with law. Reconveyance as an in personam remedy for registration procured by fraud is authorized under Section 55 of Act No. 496, as amended by Act No. 3322, and reconveyance does not seek to annul the decree but to transfer land from the registered owner to the rightful owner, subject to limitations (e.g., rights of innocent third purchasers).

Court of Appeals’ Reasoning (as adopted and considered)

The CA found petitioner failed to satisfy the possession and occupation requirement under Section 14(1) because petitioner admitted she was not given physical possession of the subject lot following the alleged sale and thus could not show acts of dominion over the land. The CA also relied on the fact that the parcel had already been registered under OCT No. OP‑1840 in respondent’s name, concluding that the application for original registration by petitioner was improper insofar as it constituted a collateral attack on an existing registered title.

Supreme Court’s Analysis and Ruling

The Supreme Court affirmed the legal principles invoked by the CA and denied the petition. Key points of the Court’s reasoning:

Once a public land patent is registered and a certificate of title is issued, the land ceases to be part of the public domain and becomes private property; the registered patent, upon registration, is a veritable Torrens title and becomes indefeasible after one year from issuance (citing precedents such as Republic v. Umali and The Director of Lands v. De Luna).
A land registration court lacks jurisdiction to issue a second decree of registration for land already the subject of a prior registration; ordering the Administrator of LRA to issue a decree in petitioner’s name would be null and void and contrary to the objective that a parcel be registered only once.
Section 47 of P.D. No. 1529 bars acquisition of title to registered land by prescription or adverse possession; a certificate cannot be defeated on those grounds.
Section 48 bars collateral attacks on a certificate of title; allegations that respondent procured registration by fraud cannot be litigated collaterally in an application for original registration over already‑titled land. The proper vehicle to address alleged fraudulent registration is a direct proceeding brought for that purpose (e.g., an action to annul a title within statutory limits, or an action in personam such as reconveyance or spe

Case Syllabus (G.R. No. 147043)

Facts

Respondent Felicidad Gonzales, married to Leopoldo Mardo, was granted a registered Free Patent No. (IV-2) 15284 dated April 26, 1979, covering Lot No. 8348, situated in Puting Kahoy, Silang, Cavite.
On February 1, 1993, respondent allegedly conveyed to petitioner Josephine Wee, through a Deed of Absolute Sale, a portion of Lot No. 8348 known as Lot No. 8348‑B, for a consideration of P250,000.00, which petitioner alleges was fully paid.
Respondent refused to vacate and turn over the subject property, claiming the alleged sale was falsified.
On December 22, 1994, petitioner filed an Application for Original Registration covering a parcel described initially as Lot No. 8349; the application was amended on September 19, 1996 to cover Lot No. 8348‑B, Barangay Puting Kahoy, Silang, Cavite.
Petitioner maintained ownership of the unregistered land by virtue of the deed of absolute sale.
On September 19, 1997, respondent filed an Opposition alleging: (1) she is the true and lawful owner of the parcel; and (2) petitioner’s deed of absolute sale is surreptitious.
On October 28, 2000, respondent filed a Motion to Dismiss alleging the land described in the application differed from the land claimed for titling; the motion was denied. Motions for reconsideration were likewise denied by the RTC.
Petitioner completed presentation of evidence and filed a formal offer that was admitted by the RTC.
On June 10, 2003, during pendency of the registration case, respondent secured registration of the land in her name under Original Certificate of Title (OCT) No. OP‑1840.
Petitioner filed a Notice of Lis Pendens with the Registry of Deeds of Cavite on May 10, 2005, which was annotated on the title.
Petitioner filed a Motion for Leave to File Supplemental Pleading and to Admit Attached Supplemental Complaint for Reconveyance, which the RTC denied on the ground that a motion for reconveyance was different from an application for registration of title.
Respondent presented evidence through the testimony of her counsel, who stated the parcel was property she bought ten years earlier but did not state from whom; respondent produced tax declarations but not a deed of sale in her favor.
On September 4, 2009, the Regional Trial Court (Branch XVIII, Tagaytay City) rendered a decision granting petitioner’s application for registration and directed the Administrator of the Land Registration Authority (LRA) to issue the corresponding decree in petitioner’s name and the Register of Deeds of Cavite to issue title in her name.
A motion for reconsideration filed by respondent was denied by the RTC.
Respondent appealed to the Court of Appeals (docketed CA‑G.R. CV No. 96934).
On June 26, 2012, the Court of Appeals reversed and set aside the RTC decision and denied petitioner’s application on the ground that petitioner failed to prove the open, continuous, exclusive and notorious possession and occupation required under Section 14(1) of Presidential Decree No. 1529; the CA noted petitioner admitted the lot was not physically turned over to her and therefore she did not exercise acts of dominion over the property.
Petitioner received a copy of the CA decision on July 2, 2012, and filed a petition for review on certiorari under Rule 45 of the Rules of Court on August 15, 2012.

Procedural History

RTC: Petition for Original Registration (LRC No. TG‑647) filed by petitioner; RTC granted registration on September 4, 2009 and ordered LRA Administrator and Register of Deeds to issue title in petitioner’s name.
RTC: Denied petitioner’s Motion for Leave to file supplemental pleading for reconveyance; denied respondent’s motions to dismiss and motions for reconsideration.
CA: On June 26, 2012, reversed RTC, set aside RTC decision, and denied petitioner’s Application for Original Registration.
Supreme Court: Petition for review on certiorari under Rule 45 filed by petitioner; Supreme Court rendered decision dated June 4, 2014 (copy received June 19, 2014).

Issues Presented (as assigned by petitioner)

The Court of Appeals erred in ruling that petitioner is not entitled to register the subject land under her name and in not crediting her predecessor‑in‑interest’s possession in her favor.
Whether, under the circumstances where petitioner’s predecessor‑in‑interest unexpectedly and unjustifiably continued to occupy the property after sale, the predecessor’s possession should be deemed possession for petitioner under PD No. 1529 and the Public Land Act.
Whether petitioner was denied actual possession by circumstances amounting to a fortuitous event, invoking Sec. 48(b) of the Public Land Act to protect her vested right to registration.
Whether respondent’s deed and subsequent registration were fraudulently secured and, if so, whether reconveyance should have been ordered to prevent multiplicity of suits and to put an end to the dispute, including the contention that respondent became trustee of an implied trust for petitioner’s benefit.

Court of Appeals’ Rationale (as summarized in source)

The CA denied petitioner’s application on the basis that petitioner failed to comply with the possession and occupation requirement of Section 14(1) of PD No. 1529.
The CA emphasized petitioner’s admission that the subject lot was not physically turned over to her and that she did not exercise acts of dominion ove