THIRD DIVISION

[G.R. No. L-67451. September 28, 1987.]

REALTY SALES ENTERPRISE, INC. and MACONDRAY FARMS, INC., Petitioners, v.

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.

DECISION

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.chanrobles virtual lawlibrary

Two (2) adjacent parcels of land located in Almanza, Las Piñas, Metro Manila, having an aggregate
area of 373,868 sq. m., situated in the vicinity of the Ayala Alabang Project and BF Homes Parañaque
are covered by three (3) distinct sets of Torrens titles to wit: chanrob1es virtual 1aw library

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 thereafter 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 thereafter 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. chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

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." cralaw virtua1aw library

In its decision dated December 29, 1982, the Court of Appeals, through its Ninth Division, with Justice
Patajo as ponente, 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 Calpo and QCDFC.

Carpo filed a motion for reconsideration with the appellate court. In the meantime, by virtue and
pursuant to Batas Pambansa Blg. 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
reraffling 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: chanrob1es virtual 1aw library

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 Blg. 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: chanrob1es virtual 1aw library

(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 reraffling and
reassignment . . . in view of the allocation of cases to the different Divisions of the Intermediate
Appellate Court under Section 8 of BP 129." cralaw virtua1aw library

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:chanrob1es virtual 1aw library

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 exercising 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 Cases 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 criminal 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 shall
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
divisions shall be assigned to any of the other classes of divisions, 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 Floreliana 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.chanrobles virtual lawlibrary

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: chanrob1es virtual 1aw library

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
elimination 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. chanrobles.com.ph : virtual law library

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." cralaw virtua1aw library

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 all, 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 Second Special Cases Division (to which the case was assigned after the reorganization under
BP 129) as having "erased or cancelled" 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 declare 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 values of Realty and of QCDFC.

The basis of the complaint filed by Carpo, which was the same basis for the rulings 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 land 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 are
the subject of the instant litigation among Carpo, Realty 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: chanrob1es virtual 1aw library

En meritos de todo lo expuesto, se ordena el registro de los lotes, 1, 2 y 3 del plano Psu-47035 a
nombre de Estanislao Mayuga, desestimando oposicion de Florentino Baltazar y Eduardo Guico con
respecto 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: chanrob1es virtual 1aw library

Por todas las consideraciones expuestas, confirmamos la decision apelada en cuanto adjudica a
Estanislao Mayuga los lotes, 1, 2 y 3 de su plano y que equivalen a los lotes, 4, 5 y 6 del plano de
Baltazar y 4 y 5 del plano de Guico.

x          x          x

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. chanrobles virtual lawlibrary

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 lieu 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: chanrob1es virtual 1aw library

(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 . . . will 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 stage 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.

x          x          x

. . . (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 all 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 should 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).chanroblesvirtualawlibrary
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 remained 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 all 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 [1919l at 1002; Sta. Ana v. Menla, 111 Phil. 947
[1961], 1 SCRA 1294; Heirs of Cristobal Marcos v. De Banuvar, 134 Phil. 257 [1968], 25 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 lieu 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. chanrobles virtual lawlibrary

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.) chanrobles virtual lawlibrary

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 well 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 QCDFC’s title to the disputed property. Hence,
said decisions/resolution have become final and executory as regards QCDFC. cralawnad

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 all,
QCDFC was afforded full 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-46953, 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., J., took no part as I participated in the companion case of L-46953 in the Court of
Appeals.

Bidin, J., took no part. I participated in the appealed resolution of the Intermediate Appellate Court.

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