Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-67451 September 28, 1987
REALTY SALES ENTERPRISE, INC. and MACONDRAY FARMS,
INC., petitioners,
vs.
INTERMEDIATE APPELLATE COURT (Special Third Civil Cases
Division), HON. RIZALINA BONIFACIO VERA, as Judge, Court of First
Instance of Rizal, Branch XXIII, MORRIS G. CARPO, QUEZON CITY
DEVELOPMENT AND FINANCING CORPORATION, and
COMMISSIONER OF LAND REGISTRATION,respondents.

CORTES, J .:
The litigation over the ownership of the parcels of land which are the subject of this
petition started in 1927 when an application for their registration under the Torrens
System was first filed. In the present petition for review Realty Sales Enterprise, Inc.
(hereafter referred to as Realty) and Macondray Farms, Inc. (hereafter referred to as
Macondray) seek a reversal of the Resolution of May 2, 1984 of the Intermediate
Appellate Court, and an affirmance of the Court of Appeals Decision of December 29,
1982.
Two (2) adjacent parcels of land located in Almanza, Las Pias, Metro Manila, having
an aggregate area of 373,868 sq. m., situated in the vicinity of the Ayala Alabang
Project and BF Homes Paraaque are covered by three (3) distinct sets of Torrens titles
to wit:
1) TCT No. 20408 issued on May 29, 1975 in the name of Realty Sales
Enterprise, Inc., which was derived from OCT No. 1609, issued on May
21, 1958, pursuant to Decree No. N-63394 in LRC Cases Nos. 657, 758
and 976, GLRO Record Nos. N-29882, N-33721 and N-43516,
respectively.
2) TCT No. 303961 issued on October 13, 1970 in the name of Morris G.
Carpo, which was derived from OCT No. 8629, issued on October 13,
1970 pursuant to decree No. N-131349 in LRC Case No. N-11-M (N-
6217), GLRO Record No. N-32166.
3) TCTs Nos. 333982 and 333985, issued on July 27, 1971 in the name of
Quezon City Development and Financing Corporation, derived from OCT
No. 8931 which was issued on July 27, 1971 pursuant to LRC Case No.
P-206 GLRO Record No. N-31777.
On December 29, 1977, Morris Carpo filed a complaint with the Court of First Instance
of Rizal, Branch XXIII, presided over by Judge Rizalina Bonifacio Vera (hereafter
referred to as Vera Court), for "declaration of nullity of Decree No. N-63394 and TCT
No. 20408." Named defendants were Realty Sales Enterprise, Inc., Macondray Farms,
Inc. and the Commissioner of Land Registration. Subsequently, however, Carpo
withdrew his complaint as against the last named defendant, and the answer filed on
behalf of said government official was ordered stricken off the record. The complaint
alleged that TCT No. 20408 as well as OCT No. 1609 from which it was derived, is a
nullity as the CFI of Rizal, Branch VI, then presided over by Judge Andres Reyes
(hereafter referred to as the Reyes Court) which issued the order dated May 21, 1958
directing the issuance of a decree of registration, was not sitting as a land registration
court, but as a court of ordinary jurisdiction. It was further alleged that the original
records of LRC Case No. 657, GLRO Record No. 29882 which was the basis for the
issuance of said order of May 21, 1958, were lost and/or destroyed during World War II
and were still pending reconstitution; hence, the Reyes Court had no authority to order
the issuance of a certificate of title.
Realty and Macondray alleged in their answer that the Reyes Court was acting as a
court of land registration and in issuing the order of May 21, 1958, was actually
performing a purely ministerial duty for the registration court in Case No. 657, GLRO
Record No. 29882 (and the two other cases, Cases Nos. 758 and 976, with which said
case had been jointly tried and decided) which on August 19, 1935 had rendered a
decision adjudicating the two (2) lots in question to Estanislao Mayuga (father of
Dominador Mayuga, predecessor-in-interest of Realty and Macondray), which decision
was upheld by the Court of Appeals. It was alleged that it is the title of Carpo which is
null and void, having been issued over a parcel of land previously registered under the
Torrens System in favor of another.
With leave of court, Realty and Macondray filed a third-party complaint against the
Quezon City Development and Financing Corporation (hereafter referred to as QCDFC)
and the Commissioner of Land Registration alleging that TCTs Nos. 333982 and
333985 in the name of QCDFC also covered the same parcels of land subject of the
dispute between Carpo and the two corporations, Realty and Macondray. They thus
prayed that Decree No. N-135938 issued on July 22, 1971, OCT No. 8931 issued on
July 27, 1971, as well as TCTs Nos. 333982 and 333985 derived from OCT No. 8931
be declared null and void.
In its answer to the third-party complaint, QCDFC asserted the validity of its own title
alleging that it is the title in the name of Realty which is null and void. QCDFC also filed
a fourth-party complaint against Carmelino Alvendia, Esperanza Alvendia, Felicisimo
Alvendia, Josefina Alvendia, Jacinto G. Miranda, Rosa G. Miranda, Isabel G. Miranda,
and Feliciano G. Miranda, alleging that it bought said parcels of land from them. It
prayed that in the event of an unfavorable judgment against it, fourth-party defendants
be ordered to reimburse the purchase price which the corporation paid to them.
However, QCDFC failed to prosecute its case, and the fourth-party complaint was
dismissed for lack of interest.
After hearing, the Vera Court rendered judgment on January 20, 1981, sustaining the
title of Morris G. Carpo to the two (2) lots in question and declaring the titles of Realty
Sales Enterprise, Inc. and QCDFC null and void.
On March 20, 1981, Realty filed a Petition for certiorari with this Court docketed as G.R.
No. L-56471 questioning the decision of the lower court. It also asked that it be allowed
to appear directly to this Court as it was raising only questions of law. After respondents
filed their comments to said petition, this Court passed a resolution dated October 19,
1981 referring the case to the Court of Appeals "in aid of its appellate jurisdiction for
proper determination on the merits of the appeal."
In its decision dated December 29, 1982, the Court of Appeals, through its Ninth
Division, with Justice Patajo asponente, concurred in by Justices Gopengco and
Kapunan, set aside the decision of the trial court and rendered a new one upholding the
validity of the title in the name of Realty Sales Enterprise, Inc. and declaring null and
void the titles in the name of Carpo and QCDFC.
Carpo filed a motion for reconsideration with the appellate court. In the meantime, by
virtue and pursuant to Batas Pambansa Bldg. 129, or the Judiciary Reorganization Act
of 1980, the Court of Appeals was reorganized into the Intermediate Appellate Court
(IAC). As a consequence, there was a re-raffling of cases and the case was assigned to
the Second Special Cases Division which, however, returned the records of the case for
another re-raffling to the Civil Cases Divisions as it deemed itself without authority to act
on a civil case in view of the allocation of cases to the different divisions of the IAC
under Section 8 of BP 129. The case was then assigned to the Third Civil Cases
Division, composed of Justices de la Fuente, Coquia, Zosa and Bartolome.
Justices Coquia and Bartolome inhibited themselves, and Justices Camilon and Bidin
were assigned to the Third Civil Cases Division.
On May 2, 1984, the IAC, through its Special Third Civil Cases Division, with Justice
Zosa as ponente; concurred in by Justices Camilon and Bidin, promulgated its
Resolution granting Carpo's motion for reconsideration, reversing and setting aside the
decision of December 29, 1982, and affirming the decision of the trial court. Hence, this
petition docketed as G.R. No. 67451.
Petitioners assign the following errors:
I
The SPECIAL THIRD CIVIL CASES DIVISION of the Intermediate
Appellate Court (for brevity, referred to herein as SPECIAL DIVISION)
which promulgated the disputed RESOLUTION of May 2, 1984 had no
legal standing under the provisions of Batas Pambansa Bldg. 129 and, as
such, not vested with jurisdiction and adjudicatory power to pronounce any
decision of final resolution for the Court.
II
On the assumption that the SPECIAL DIVISION is legally vested with
jurisdiction and adjudicatory powers under the provisions of BP 129, it
decided questions of substance contrary to law and the applicable
decisions of the Supreme Court because:
(a) The SPECIAL DIVISION'S Resolution of May 2, 1984
amounted to a denial to the Petitioners of their right to
appeal and judicial review over fundamental issues of law
duly raised by them in their Petition for Review on certiorari
(G.R. No. 56471), as authorized by the Constitution (Art. X,
sec. 5 (2) (e), the provisions of the Judiciary Act of 1948 and
Rule 42, Sec. 2 of the Rules of Court; and
(b) By its RESOLUTION of May 2, 1984, it ruled that the
decision of the Court of Appeals could not have gained the
nature of a proper and valid judgment as the latter had no
power to pass upon the appealed judgment of the Court of
First Instance of Rizal (the Vera Court), as appeal and not
certiorari was the proper remedy;
Furthermore, the said SPECIAL DIVISION grossly departed from the
accepted and usual course of judicial proceedings by giving a perverted
and obviously unjustified and illogical interpretation of the RESOLUTION
of July 25, 1983, of the Ninth Division of the Court of Appeals, holding and
declaring that "it has in effect erased or cancelled the validity of (the
DECISION of December 29, 1982), when the said RESOLUTION merely
"RESOLVED to return the records of the case ... for re-raffling and
reassignment ... in view of the allocation of cases to the different Divisions
of the Intermediate Appellate Court under Section 8 of BP 129.
III
The SPECIAL DIVISION by confirming the appealed judgment of the
lower court in effect sanctioned the contemptible disregard of law and
jurisprudence committed by Judge Vera, which call for an exercise of the
power of supervision;
IV
The SPECIAL DIVISION did state in its RESOLUTION of May 2, 1984 a
deliberate falsehood, namely, that Morris G. Carpo is a purchaser in good
faith and for value when there is absolutely no evidence, whether written
or testimonial, that was presented by Carpo, or by anyone else that he
was, in fact, a purchaser for value and in good faith a material matter
which was neither alleged nor referred to in the complaint and in all the
pleadings, nor covered by any of the exhibits presented by all of the
parties herein and solely on the bases of which the case at bar was
submitted by the parties for consideration and decision.
1. To support their contention that the Special Third Civil Cases Division of the
Intermediate Appellate Court which promulgated the Resolution of May 2, 1984 had no
legal standing under the provisions of BP 129 and, as such, not vested with jurisdiction
and adjudicatory power, petitioners cite Sections 4 and 8 of BP 129, to wit:
Sec. 4. Exercise of powers and functions.The Intermediate Appellate
Court shall exercise its powers, functions and duties, through ten (10)
divisions, each composed of five members. The Court may sit en
banc only for the purpose of exercise administrative, ceremonial or other
non-adjudicatory functions.
Sec. 8. Grouping of Divisions.Of the ten (10) divisions, of the Court, four
(4) divisions, to be known as Civil case Divisions, shall take cognizance of
appeals in civil cases originating from the Regional Trial Court; two (2)
divisions, to be known as Criminal Cases Divisions, of appeals in cases
originating from the Regional Trial Courts; and four (4) divisions, to be
known as Special Cases Divisions, of original actions or petitions, petitions
for review, and appeals in all other cases, including those from
administrative agencies, except as provided in Section 9 hereof.
Except with respect to the Presiding Appellate Justice, the appointment of
a member of the court should specifically indicate whether it is for the Civil
Cases Divisions, the Criminal Cases Divisions, or the Special Cases
Divisions of the Court. No member of the Court appointed to any of the
three classes of conclusions shall be assigned to any of the other classes
of division except when authorized by the Supreme Court, upon
recommendation of the Intermediate Appellate Court en banc, if the
exigencies of the service so require. . . . (emphasis supplied)
As officially constituted, the Third Civil Cases Division was composed of Justice B.S. de
la Fuente, as Chairman, Justices Jorge Coquia, Mariano Zosa, and Flores Bartolome,
as Members. In view, however, of the voluntary inhibition of Justices Coquia and
Bartolome from taking part in the case, Justices Bidin and Camilon were reassigned to
the Third Civil Cases Division to form the Special Third Civil Cases Division.
Petitioners argue that the so-called Special Third Civil Cases Division, not being one of
the ten (10) Divisions of the Court duly vested with jurisdiction, had no adjudicatory
powers. It is also alleged that the reassignment of Justices Bidin and Camilon is
violative of the injunction against appointment of an appellate Justice to a class of
divisions other than that to which he is appointed. (Petition, pp. 21-26.)
This contention has no merit. A reading of the law will readily show that what BP 129
prohibits is appointment from one class of divisions to another class. For instance, a
Justice appointed to the Criminal Cases Divisions cannot be assigned to the Civil Cases
Divisions.
Justice Bidin was reassigned from the Fourth Civil Cases Division, while Justice
Camilon was reassigned from the Second Civil Cases Division. The two therefore come
from the same class of divisions to which they were appointed.
Thus, the reassignment of Justices Bidin and Camilon to form the Special Third Civil
Cases Division in view of the voluntary inhibition of two (2) "regular" members, is still
within legal bounds. Otherwise, a situation would have arisen where a regular division
could not decide a particular case because some members thereof inhibited themselves
from participating in said case.
2. The second assigned error involves a determination of the correctness of the ruling of
the IAC that the CA Decision of December 29, 1982 could not have gained the nature of
a proper and valid judgment (since appeal and not certiorari was the proper remedy)
and that the Resolution of July 25, 1983 had in effect erased or cancelled the validity of
said Decision.
The IAC said in its Resolution of May 2,1984:
Said resolution of July 25, 1983, to Our view, was effectively an
acknowledgment by the Division that promulgated it that the earlier
Decision dated December 29, 1983 rendered in a Special Civil Action
case for certiorari, CA-G.R. No. SP-13530, was not appropriate and
beyond the authority of the Ninth Division of the Court of Appeals to
promulgate. The said Resolution was actually a statement that the Ninth
Division of the Court of Appeals had over-stepped its bounds by reviewing
in certiorari proceedings a decision in a purely civil case that should have
passed through the processes of an ordinary appeal. We are not aware of
any legal doctrine that permits an appellate court to treat a petition for
review on certiorari upon purely questions of law, such as that filed by
petitioners herein, as an ordinary appeal. Neither can we find any legal
basis or justification for the election by the appellate court of the essential
requisites then prescribed for the validity of an appeal, such as the
submission of a formal notice of appeal, an appeal bond and approved
record on appeal. Without any of these mandatory requisites, the appeal
could not have been deemed perfected and ought to have been dismissed
outright.
The Court does not agree.
There are two modes by which cases decided by the then Courts of First Instance in
their original jurisdiction may be reviewed: (1) an ordinary appeal either to the Supreme
Court or to the Court of Appeals, or (2) an appeal on certiorari to the Supreme Court. To
the latter category belong cases in which only errors or questions of law are involved.
Each of these modes have different procedural requirements.
As stated earlier, Realty originally filed a Petition for certiorari with this Court docketed
as G.R. No. L-56471 questioning the decision of the Vera Court, and asking that it be
allowed to appeal directly to this Court as it was raising only questions of law. However,
this Court referred the case to the Court of Appeals "in aid of its appellate jurisdiction for
proper determination on the merits of the appeal."
It may thus be observed that even this Court treated the petition first filed as an appeal,
and not as a special civil action for certiorari. After as, a petition for review by certiorari
is also a form of appeal. (People v. Resuello L-30165, August 22, 1969, 69 SCRA 35).
This mode of appeal under Rule 42 is in the form and procedure outlined in Rule 45
which, unlike ordinary appeals, does not require a notice of appeal, an appeal bond and
a record on appeal.
Thus it was error for the IAC to hold that the Decision of the Vera Court "cannot be
passed upon anymore in the Court of Appeals decision because appeal and not
certiorari was the proper remedy." Precisely, petitioners brought the case to this Court
on appeal, albeit by way of certiorari.
Respondent Carpo cited authorities holding that certiorari is not a substitute for appeal.
Those cases are not in point. They refer to the special civil action of certiorari under
Rule 65, and not to appeal by way of certiorari under Rule 45.
Similarly, the IAC Special Civil Cases Division erred in interpreting the Resolution dated
July 25, 1983 of the SecondSpecial Cases Division (to which the case was assigned
after the reorganization under BP 129) as having "erased or cancellation" the validity of
the Decision of the Ninth Division. A perusal of said Resolution shows that it merely
made clarification about the nature of the case and why it should be reassigned to
the Civil Cases Division of the IAC. There was not the slightest implication that it
"erased or cancelled" the validity of the Decision of the Ninth Division.
Even the IAC Special Third Civil Cases Division impliedly admitted the validity of the
Decision of the Ninth Division when it granted Carpo's motion for reconsideration. It
would have been incongruous to grant a motion to reconsider a decision, reverse and
set it aside, if in the first place it did not have any validity. It would have been necessary
only to decide its invalidity.
3. In the third assigned error, Petitioners contend that the Vera Court, and the IAC
Special Third Civil Cases Division, erred in upholding the validity of the title in the name
of Carpo and declaring null and void the titles in the names of Realty and of QCDFC.
The basis of the complaint fired by Carpo, which was the same basis for the of the Vera
Court and the IAC Special Division, is that the Reyes Court had no authority to issue the
order of May 21, 1958 directing the issuance of a decree of registration in favor of
Mayuga, predecessor-in-interest of Realty, as it was not sitting as a land registration
court and also because the original records of LRC Case No. 657, Record No. N-29882
were lost and/or destroyed during World War II and were still pending reconstitution.
Under Act No. 496, Land Registration Act, (1902) as amended by Act No. 2347 (1914),
jurisdiction over all applications for registration of title to and was conferred upon the
Courts of First Instance of the respective provinces in which the land sought to be
registered is situated.
Jurisdiction over land registration cases, as in ordinary actions, is acquired upon the
filing in court of the application for registration, and is retained up to the end of the
litigation. The issuance of a decree of registration is but a step in the entire land
registration process; and as such, does not constitute a separate proceeding.
In the case at bar, it appears that it was Estanislao Mayuga, father of Dominador
Mayuga, predecessor-in-interest of Realty, who originally filed on June 24, 1927 a
registration proceeding docketed as LRC Case No. 657, GLRO Record No. N-29882 in
the Court of First Instance of Rizal to confirm his title over parcels of land described as
Lots 1, 2 and 3, Plan Psu-47035. (Lots 2 and 3 the subject of the instant litigation
among Carpo, RRealty and QCDFC.) Case No. 657 was jointly tried with two other
cases, LRC Case No. 976, GLRO Record No. 43516 filed by Eduardo Guico and LRC
Case No. 758, GLRO Record No. 33721 filed by Florentino Baltazar, as the three cases
involved Identical parcels of land, and Identical applicants/oppositors.
On August 19, 1935 the CFI-Rizal acting as a land registration court issued a
consolidated decision on the three cases, the dispositive portion of which reads:
En meritos de to do lo expuesto, se ordena el registro de los lotes, 1, 2 y 3
del plans PSU-47035 a nombre de Estanislao Mayuga, desist oposicion
de Florentino Baltazar y Eduardo Guico con respects a dichos lotes....
On appeal, the above decision of the CFI was affirmed by the Court of
Appeals in its decision dated November 17, 1939. the dispositive portion
of which reads:
Por todas last consideraciones expuestas confirmamos la decision
apelada en cuanto adjudica a Estanislao Mayuga los lotes, 1, 2 y 3 de
such piano y que equivalent a lost lotes, 4, 5 y 6 del plano de Baltazar y 4
y 5 del plans de Guico.
xxx xxx xxx
Guico filed a petition for review on certiorari before this Court, but the petition was
dismissed and the Court of Appeals decision was affirmed (See Guico v. San Pedro, 72
Phil. 415 [1941]).
Before he could secure a decree of registration in his name, Estanislao died.
On May 13, 1958 Dominador Mayuga, son of Estanislao, filed a petition with the Reyes
Court docketed as Case No. 2689 alleging that he was the only heir of the deceased
Estanislao Mayuga and praying for the issuance of a decree of registration over the
property adjudicated in favor of Estanislao. At this point, it cannot be overemphasized
that the petition filed by Dominador is NOT a distinct and separate proceeding from, but
a continuation of, the original land registration proceedings initiated by Estanislao
Mayuga, Florentino Baltazar and Eduardo Guico. In the same vein, the Reyes Court, as
Branch VI of the Court of First Instance of Rizal, was continuing in the exercise of
jurisdiction over the case, which jurisdiction was vested in the CFI-Rizal upon filing of
the original applications.
On May 21, 1958 the Reyes Court issued an order granting the petition of Dominador
Mayuga and directing the Commissioner of Land Registration to issue a decree of
registration over Lots 1, 2 and 3 of Plan Psu-47035, substituting therein as registered
owner Dominador Mayuga in liue of Estanislao.
Respondent Carpo, however, contends, that since the records of LRC Case No. 657
were not properly reconstituted, then there was no pending land registration case. And
since the Reyes Court was acting without a pending case, it was acting without
jurisdiction. (Respondent Carpo's Memorandum, pp, 2-8.)
He cites the case of Villegas v. Fernando (L-27347, April 29, 1969, 27 SCRA 1119)
where this Court said that upon failure to reconstitute pursuant to law, "the parties are
deemed to have waived the effects of the decision rendered in their favor and their only
alternative is to file an action anew for the registration in their names of the lots in
question," citing the case of Ambat v. Director of Lands, (92) Phil. 567 [1953]) and other
cases. The basis of said ruling is Section 29 of Act No. 3110, an Act to provide an
adequate procedure for the reconstitution of the records of pending judicial proceedings
and books, documents, and files of the office of the register of deeds, destroyed by fire
or other public calamities, and for other purposes.
However, the Ambat case, in so far as it ruled on the effect of failure to reconstitute
records on the status of the case in its entirety, was modified in the case of Nacua v. de
Beltran, (93) Phil. 595 [1953]). where this Court said:
(W)e are inclined to modify the ruling (in the Ambat case) in the sense that
Section 29 of Act No. 3110 should be applied only where the records in
the Court of First Instance as well as in the appellate court were destroyed
or lost and were not reconstituted, but not where the records of the Court
of First Instance are intact and complete, and only the records in the
appellate court were lost or destroyed, and were not reconstituted. One
reason for this view is that section 29 of Act 3110 is found among the
sections and provisions dealing with the reconstitution of records in the
Court of First Instance in pending civil cases, special proceedings,
cadastral cases and criminal cases. A study of Act (No.) 3110 ... who
show that there are separate procedures for the reconstitution of records
in the Justice of the Peace Courts, from Sec. 48 to Sec. 53; for the
reconstitution of records in the Supreme Court, now including the Court of
Appeals, from Sec. 54 to Sec. 74; for the reconstitution of records in the
office of the Register of Deeds, from Sec. 75 to Sec. 90 and for the
reconstitution of destroyed records in the Courts of First Instance, from
Sec. 1 to Sec. 47, under which sections, Sec. 29 is obviously
comprehended.
The whole theory of reconstitution is to reproduce or replace records lost
or destroyed so that said records may be complete and court proceedings
may continue from the point or stage where said proceedings stopped due
to the loss of the records. The law contemplates different stages for
purposes of reconstitution. . . .
. . . (S)ection 4 covers the stage were a civil case was
pending trial in the Court of First Instance at the time the
record was destroyed or lost; section 6 evidently refers to the
stage where the case had been tried and decided but was
still pending in the Court of First Instance at the time the
record was destroyed or lost; section 6 covers the stage
where the case was pending in the Supreme Court (or Court
of Appeals) at the time the record was destroyed or lost. *
If the records up to a certain point or stage are lost and they are not
reconstituted, the parties and the court should go back to the next
preceding age where records are available, but not beyond that; otherwise
to ignore and go beyond the stage next preceding would be voiding and
unnecessarily ignoring proceedings which are duly recorded and
documented, to the great prejudice not only of the parties and their
witnesses, but also of the court which must again perforce admit
pleadings, rule upon them and then try the case and decide it anew,-all of
these, when the records up to said point or stage are intact and complete,
and uncontroverted.
xxx xxx xxx
. . . (T)o require the parties to file their action anew and incur the expenses
and (suffer) the annoyance and vexation incident to the filing of pleadings
and the conduct of hearings, aside from the possibility that some of the
witnesses may have died or left the jurisdiction, and also to require the
court to again rule on the pleadings and hear the witnesses and then
decide the case, when an along and all the time the record of the former
pleadings of the trial and evidence and decision are there and are not
disputed, all this would appear to be not exactly logical or reasonable, or
fair and just to the parties, including the trial court which has not
committed any negligence or fault at all.
The ruling in Nacua is more in keeping with the spirit and intention of the reconstitution
law. As stated therein, "Act 3110 was not promulgated to penalize people for failure to
observe or invoke its provisions. It contains no penal sanction. It was enacted rather to
aid and benefit litigants, so that when court records are destroyed at any stage of
judicial proceedings, instead of instituting a new case and starting all over again, they
may reconstitute the records lost and continue the case. If they fail to ask for
reconstitution, the worst that can happen to them is that they lose the advantages
provided by the reconstitution law" (e.g. having the case at the stage when the records
were destroyed).
Applying the doctrine in the Nacua decision to LRC Case No. 657, the parties thereto
did not have to commence a new action but only had to go back to the preceding stage
where records are available. The land registration case itself re. mained pending and
the Court of First Instance of Rizal continued to have jurisdiction over it.
The records were destroyed at that stage of the case when an that remained to be done
was the ministerial duty of the Land Registration Office to issue a decree of registration
(which would be the basis for the issuance of an Original Certificate of Title) to
implement a judgment which had become final (See Government v. Abural, 39 Phil. 996
[1919] at 1002; Sta. Ana v. Menla, 111 Phil. 947 [1961], 1 SCRA 1294; Heirs of
Cristobal Marcos v. De Banuvar, 134 Phil. 257 [1968], 26 SCRA 316). There are
however authentic copies of the decisions of the CFI and the Court of Appeals
adjudicating Lots 1, 2 and 3 of Plan Psu-47035 to Estanislao Mayuga. Moreover, there
is an official report of the decision of this Court affirming both the CFI and the CA
decisions. A final order of adjudication forms the basis for the issuance of a decree of
registration.
Considering that the Reyes court was actually in the exercise of its jurisdiction as a land
registration court when it issued the order directing the issuance of a decree of
registration, "substituting therein as registered owner Dominador Mayuga, in hue of the
original adjudicates, Estanislao Mayuga, based on the affidavit of self-adjudication,
subject to the provisions of Sec. 4, Rule 74 of the Rules of Court," which order is in
consonance with the ruling of this Court in the Guico decision, and the decisions of the
CFI-Rizal and the CA dated August 19, 1935 and November 17, 1939, respectively, We
uphold the validity of said order and rule that Judge Vera was without jurisdiction to set
it aside.
4. In upholding the title of Carpo as against those of Realty and QCDFC, the Special
Division also relied on Carpo's being an innocent purchaser for value.
Whether or not Carpo is an innocent purchaser for value was never raised as an issue
in the trial court. A perusal of the records of the case reveals that no factual basis exists
to support such a conclusion. Even Carpo himself cites no factual proof of his being an
innocent purchaser for value. He merely relies on the presumption of good faith under
Article 527 of the Civil Code.
It is settled that one is considered an innocent purchaser for value only if, relying on the
certificate of title, he bought the property from the registered owner, "without notice that
some other person has a right to, or interest in, such property and pays a full and fair
price for the same, at the time of such purchase, or before he has notice of the claim or
interest of some other persons in the property." (Cui v. Henson, 51 Phil. 606 [1928],
Fule v. De Legare, 117 Phil. 367 [1963], 7 SCRA 351.) He is not required to explore
farther than what the Torrens title upon its face indicates. (Fule v. De Legare supra.)
Carpo bought the disputed property from the Baltazars, the original registered owners,
by virtue of a deed executed before Iluminada Figueroa, Notary Public of Manila
dated October 9, 1970. However, it was only later, on October 13, 1970, that the decree
of registration in favor of the Baltazars was transcribed in the Registration Book for the
Province of Rizal and that an Original Certificate of Title was issued. It was on the same
day, October 13, 1970, that the deed evidencing the sale between the Baltazars and
Carpo was inscribed in the Registry of Property, and the Original Certificate of Title was
cancelled as Transfer Certificate of Title No. 303961 in the name of Carpo was issued.
(Exhibit 12, Rollo pp. 270-273.)
Thus, at the time of sale there was as yet no Torrens title which Carpo could have relied
upon so that he may qualify as an innocent purchaser for value. Not being a purchaser
for value and in good faith, he is in no better position than his predecessors-in-interest.
The Baltazars, predecessors-in-interest of Carpo are heirs of Florentino Baltazar, an
oppositor in the original application filed by Estanislao Mayuga in 1927. As stated
earlier, the CFI-Rizal confirmed the title of Estanislao to Lots 1, 2 and 3 of Plan Psu-
47035 "desestimando oposicion de Florentino Baltazar . . . con respeto a dichos lotes . .
." As such successors of Florentino, they could not pretend ignorance of the land
registration proceedings over the disputed parcels of land earlier initiated by Eduardo
Guico, Florentino Baltazar and Estanislao Mayuga, as when as the decisions rendered
therein.
Moreover, it is not disputed that the title in the name of Dominador Mayuga, from whom
Realty derived its title, was issued in 1958, or twelve years before the issuance of the
title in the name of the Baltazars in 1970.
In this jurisdiction, it is settled that "(t)he general rule is that in the case of two
certificates of title, purporting to include the same land, the earlier in date prevails . . . .
In successive registrations, where more than one certificate is issued in respect of a
particular estate or interest in land, the person claiming under the prior certificate is
entitled to the estate or interest; and that person is deemed to hold under the prior
certificate who is the holder of, or whose claim is derived directly or indirectly from the
person who was the holder of the earliest certificate issued in respect thereof . . . ."
(Legarda and Prieto v. Saleeby, 31 Phil. 590 [1915] at 595-596; Garcia V. CA, Nos. L-
48971 and 49011, January 22, 1980, 95 SCRA 380.)
TCT No. 20408 derived from OCT 1609, is therefore superior to TCT No. 303961
derived from OCT 8629.
5. For its part, respondent Quezon City Development and Financing Corporation
(QCDFC) alleges that it has been improperly impleaded as thirty-party defendant
inasmuch as Realty's alleged cause of action against it is neither for contribution,
indemnity, subrogation or any other relief in respect of Carpo's claim against Realty. It
likewise alleges that Realty had no cause of action against it since the third party
complaint did not allege that QCDFC violated any legal right of Realty, QCDFC also
assails the Vera Court decision in that it declares QCDFC directly liable to Carpo and
not to Realty.
In the first place, QCDFC did not appeal from the decision of the Vera Court, nor from
the decision of the Court of Appeals dated December 29, 1982, nor from the resolution
of the IAC Special Third Civil Cases Division dated May 2, 1984 all of which voided
QCDFCs title to the disputed property. Hence, said decisions/resolution have become
final and executory as regards QCDFC.
Moreover, even as this Court agrees with QCDFC that the third-party complaint filed
against it by Realty was procedurally defective in that the relief being sought by the
latter from the former is not in respect of Carpo's claim, policy considerations and the
factual circumstances of the case compel this Court now to rule as well on QCDFC's
claim to the disputed property. ** To rule on QCDFC's claim now is to avoid multiplicity
of suits and to put to rest these conflicting claims over the property. After an, QCDFC
was afforded fun opportunity, and exercised its right, to prove its claim over the land. It
presented documentary as well as testimonial evidence. It was even permitted to file a
fourth-party complaint which, however, was dismissed since it failed to prosecute its
case.
QCDFC derived its title from Carmelino Alvendia et. al., the original registered owners.
Original Certificate of Title No. 8931 in the name of Spouses Carmelino Alvendia, et. al.
was issued on July 27, 1971, or thirteen (13) years after the issuance of Mayuga's title
in 1958.
Since Realty is claiming under TCT No. 1609 which was issued earlier than OCT No.
8931 from which QCDFC's title was derived, Realty's title must prevail over that of
QCDFC.
6. During the pendency of this case, Petitioners filed a manifestation alleging that the
case at bar is closely connected with G.R. No. L-469953, Jose N. Mayuga et. al. v. The
Court of Appeals, Macondray Farms, Inc., Realty Sales Enterprise, inc., et. al. and
moved for consolidation of the two cases involving as they do the same property. By
Resolution of August 29, 1984, this Court denied the motion for consolidation.
In this connection, it must be emphasized that the action filed by Carpo against Realty is
in the nature of an action to remove clouds from title to real property. By asserting its
own title to the property in question and asking that Carpo's title be declared null and
void instead, and by filing the third-party complaint against QCDFC, Realty was similarly
asking the court to remove clouds from its own title. Actions of such nature are
governed by Articles 476 to 481, Quieting of Title, Civil Code (Republic Act No. 386),
and Rule 64, Declaratory Relief and Similar Remedies, Rules of Court.
Suits to quiet title are not technically suits in rem, nor are they, strictly speaking, in
personam, but being against the person in respect of the res, these proceedings are
characterized as quasi in rem. (McDaniel v. McElvy, 108 So. 820 [1926].) The judgment
in such proceedings is conclusive only between the parties. (Sandejas v. Robles, 81
Phil. 421 [1948]).
The ruling in this case is therefore without any prejudice to this Court's final
determination of G.R. No. L-46953.
WHEREFORE, the Resolution of May 2,1984 of the Intermediate Appellate Court and
the Decision of January 20, 1981 of the CFI-Rizal Branch XXIII, are SET ASIDE and the
Decision of December 29, 1982 of the Court of Appeals is AFFIRMED.
SO ORDERED.
Fernan and Feliciano, JJ., concur.
Gutierrez, Jr. and Bidin, JJ., took no part.