Facts
- On June 24, 1927 Estanislao Mayuga applied to register Lots 1, 2 and 3 of Plan Psu-47035 in Almanza, Las Piñas — LRC Case No. 657, GLRO Record No. N-29882 — in the Court of First Instance of Rizal. It was tried jointly with LRC Case No. 758 (Florentino Baltazar) and LRC Case No. 976 (Eduardo Guico). (The three cases were consolidated because they involved identical parcels with identical applicants and oppositors, so one judgment bound all three sets of successors — which is why the Court would later hold that the Baltazars, as Florentino's heirs, "could not pretend ignorance" of it.)
- On August 19, 1935 the CFI of Rizal, acting as a land registration court, decided the three cases in one consolidated judgment and ordered Lots 1, 2 and 3 registered in Estanislao Mayuga's name, dismissing the oppositions of Baltazar and Guico. The Court of Appeals affirmed on November 17, 1939, and this Court dismissed Guico's petition in Guico v. San Pedro (72 Phil. 415 [1941]).
- The original records of LRC Case No. 657 were lost or destroyed during World War II and were still pending reconstitution. Estanislao died before any decree could issue in his name. (All that remained undone was the decree; the adjudication itself had been final since 1941. That gap — a final adjudication with no decree, and no record to prove it from — is the whole battleground of the case.)
- On May 13, 1958 Dominador Mayuga, Estanislao's son and sole heir, petitioned the CFI of Rizal, Branch VI — the Reyes Court — in Case No. 2689 for the issuance of the decree. On May 21, 1958 that court ordered the Commissioner of Land Registration to issue it, substituting Dominador for Estanislao as registered owner. Decree No. N-63394 and OCT No. 1609 followed, and TCT No. 20408 was entered in the name of Realty Sales Enterprise, Inc. on May 29, 1975.
- On October 9, 1970 Morris G. Carpo bought the same land from the Baltazars — four days before their OCT No. 8629 was transcribed on October 13, 1970, the same day his TCT No. 303961 was issued. (The order of those two dates decides the innocent-purchaser issue: when he signed the deed there was no Torrens title in existence for him to have relied on.)
- On July 27, 1971 a third set of titles appeared over the same land: OCT No. 8931 in the name of Spouses Carmelino Alvendia and others, from which TCTs Nos. 333982 and 333985 were issued to Quezon City Development and Financing Corporation (QCDFC).
- On December 29, 1977 Carpo sued Realty, Macondray Farms, Inc. and the Commissioner of Land Registration in the CFI of Rizal, Branch XXIII — the Vera Court — to annul Decree No. N-63394 and TCT No. 20408, alleging that the Reyes Court had not been sitting as a land registration court and that, the war-destroyed records being unreconstituted, there was no pending case in which it could act. Realty and Macondray impleaded QCDFC by third-party complaint; QCDFC's own fourth-party complaint was dismissed for failure to prosecute.
- On January 20, 1981 the Vera Court sustained Carpo and voided the Realty and QCDFC titles. Realty came to this Court on certiorari (G.R. No. L-56471), which referred the case to the Court of Appeals "in aid of its appellate jurisdiction"; on December 29, 1982 the CA's Ninth Division reversed and upheld Realty's title. After the B.P. Blg. 129 reorganisation and a re-raffle, the IAC's Special Third Civil Cases Division — Justices Coquia and Bartolome having inhibited, with Justices Bidin and Camilon reassigned in their place — granted Carpo's motion for reconsideration on May 2, 1984 and restored the trial court's judgment. The Third Division decided on September 28, 1987.
Arguments of the Parties
Petitioners. Realty and Macondray argued that the Special Third Civil Cases Division had no legal standing under Sections 4 and 8 of B.P. Blg. 129, which fix the IAC's ten divisions and forbid assigning a Justice appointed to one class of divisions to another, so that the reassignment of Justices Bidin and Camilon left the division without adjudicatory power; that the IAC denied them appellate review by holding that "appeal and not certiorari was the proper remedy," when their petition was itself an appeal and this Court had expressly referred it to the CA for "determination on the merits of the appeal"; that the Resolution of July 25, 1983 merely returned the records for re-raffling and did not "erase or cancel" the Ninth Division's Decision; that the IAC sanctioned Judge Vera's disregard of law in annulling an order of a co-equal branch; and that its finding that Carpo was a purchaser in good faith and for value rested on no evidence at all, the point never having been pleaded or proved.
Private respondent. Carpo argued that because the records of LRC Case No. 657 were never properly reconstituted there was no pending land registration case, so the Reyes Court acted without jurisdiction — invoking Villegas v. Fernando and Ambat v. Director of Lands for the rule that on failure to reconstitute under Section 29 of Act No. 3110 "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"; and that he was in any event protected as an innocent purchaser for value, resting on the presumption of good faith under Article 527.
Third-party respondent. QCDFC argued that it was improperly impleaded, Realty's claim against it being neither for contribution, indemnity nor subrogation in respect of Carpo's claim, that Realty had no cause of action against it, and that the Vera Court erred in declaring it liable directly to Carpo rather than to Realty.
Common Ground / Stipulations (if any). All parties proceeded on the footing that two adjacent parcels of 373,868 square meters in Almanza, Las Piñas are covered by three distinct sets of Torrens titles, and it was not disputed that OCT No. 1609 (1958) antedates OCT No. 8629 (1970) by twelve years and OCT No. 8931 (1971) by thirteen.
Issue
MAIN ISSUE (Jurisdiction-centered). Whether the Reyes Court, acting in 1958 on a petition to have the decree issued in a 1927 registration case whose records were destroyed in the war and never reconstituted, was exercising the land registration jurisdiction that attached when the application was filed — or was acting with no pending case before it at all.
SECONDARY ISSUES. Whether the Special Third Civil Cases Division was validly constituted under B.P. Blg. 129; whether a petition for review on certiorari is a form of appeal, so that the CA Decision of December 29, 1982 was a valid judgment; whether Carpo was an innocent purchaser for value; and which of three certificates covering the same land prevails.
ANCILLARY / INCIDENTAL ISSUES (if any). Whether QCDFC's title could be ruled upon despite a procedurally defective third-party complaint.
Ruling
On the MAIN ISSUE: it was exercising that jurisdiction. Jurisdiction over land registration cases, as in ordinary actions, is acquired upon the filing in court of the application and is retained up to the end of the litigation; the issuance of a decree "is but a step in the entire land registration process; and as such, does not constitute a separate proceeding." Dominador Mayuga's 1958 petition was therefore not a distinct and separate proceeding but a continuation of the case his father began in 1927, and the Reyes Court, as Branch VI of the same CFI of Rizal, was continuing in the exercise of jurisdiction already vested. On the effect of the lost records the Court followed Nacua v. de Beltran over Ambat: Section 29 of Act No. 3110 applies only where the records in both the trial and the appellate court were destroyed and not reconstituted, and "the whole theory of reconstitution is to reproduce or replace records lost or destroyed so that … court proceedings may continue from the point or stage where said proceedings stopped." Act No. 3110 "was not promulgated to penalize people for failure to observe or invoke its provisions" and "contains no penal sanction"; the parties "go back to the next preceding stage where records are available, but not beyond that." Here the records were lost at the stage where only the ministerial duty of the Land Registration Office to issue the decree remained, and authentic copies of the CFI and CA decisions and an official report of this Court's decision survived — and a final order of adjudication forms the basis for the issuance of a decree. Judge Vera was accordingly without jurisdiction to set the 1958 order aside. On the constitution of the division: valid — what B.P. Blg. 129 forbids is appointment "from one class of divisions to another class," and Justices Bidin and Camilon came from the Fourth and Second Civil Cases Divisions, the same class; the contrary reading would paralyse a division whenever two members inhibit. On the mode of review: "after all, a petition for review by certiorari is also a form of appeal," taken in the form and procedure of Rule 45, which unlike an ordinary appeal requires no notice of appeal, appeal bond or record on appeal; the authorities Carpo cited concern the special civil action under Rule 65 and are not in point, and the July 25, 1983 Resolution merely clarified why the case had to be re-raffled. On good faith: Carpo was not an innocent purchaser for value — he bought on October 9, 1970, before OCT No. 8629 was transcribed on October 13, 1970, so "at the time of sale there was as yet no Torrens title which Carpo could have relied upon," and as successors of the oppositor Florentino Baltazar his vendors "could not pretend ignorance" of the 1927 proceedings. On priority: "in the case of two certificates of title, purporting to include the same land, the earlier in date prevails" (Legarda and Prieto v. Saleeby, 31 Phil. 590), so TCT No. 20408 from OCT No. 1609 (1958) is superior both to Carpo's TCT No. 303961 from OCT No. 8629 (1970) and to QCDFC's titles from OCT No. 8931 (1971). The dispositive portion reads verbatim: "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."
Ratio
- One case, from filing to decree. Jurisdiction attaches on the filing of the application and is retained to the end of the litigation. Because the decree is a step within that proceeding and not a proceeding of its own, a petition to have it issued — even thirty-one years later, and even by a substituted heir — is heard in the same registration case, by a court already possessed of it — a continuity Section 2 of P.D. No. 1529 now states outright by giving the registration court "all petitions filed after original registration."
- Reconstitution restores a stage; it does not restart a case. Under Nacua v. de Beltran, Section 29 of Act No. 3110 reaches only the situation where trial and appellate records alike are gone. Otherwise the parties return to "the next preceding stage where records are available," because to ignore that stage would void "proceedings which are duly recorded and documented, to the great prejudice not only of the parties and their witnesses, but also of the court."
- A reconstitution statute with no penal clause cannot be read as a forfeiture. Act No. 3110 "was enacted rather to aid and benefit litigants"; the worst that befalls a party who does not reconstitute is that "they lose the advantages provided by the reconstitution law," not the adjudication already won.
- What survived was enough. Authentic copies of the 1935 CFI and 1939 CA decisions and an official report of this Court's 1941 affirmance were on record, and a final order of adjudication is itself the basis for the issuance of a decree — so nothing remained to be tried.
- Good faith cannot be presumed into existence where the object of reliance did not exist. Reliance on a certificate of title is the defining element of an innocent purchaser for value; Carpo bought four days before any certificate existed, so Article 527's presumption has nothing to operate on, and he "is in no better position than his predecessors-in-interest."
- Between two certificates over the same land, the earlier prevails. The person claiming under the prior certificate is entitled to the estate, and Realty's 1958 root antedates the 1970 and 1971 roots by twelve and thirteen years.
- A division short two members is still the court. B.P. Blg. 129 bars movement between classes of divisions, not within one; on the contrary reading "a regular division could not decide a particular case because some members thereof inhibited themselves."
Doctrine
Doctrines / Rules / Principles Laid Down.
- The Realty Sales Continuity Rule: jurisdiction over a land registration case is acquired upon the filing of the application and is retained up to the end of the litigation, and the issuance of the decree of registration is only a step in that single proceeding, never a separate one. A petition filed years later to have the decree issued, or to substitute a deceased adjudicatee's heir, is a continuation of the original case, and the branch that acts on it is still sitting as a land registration court.
- The Nacua Rule on stages: where judicial records are destroyed, Section 29 of Act No. 3110 applies only if the records in both the trial court and the appellate court were lost and not reconstituted. Otherwise the parties go back to the next preceding stage for which records survive, and no further — reconstitution exists so that "court proceedings may continue from the point or stage where said proceedings stopped."
- The rule of the prior certificate: as between two certificates of title purporting to cover the same land, the earlier in date prevails, and whoever claims under or through the holder of the earliest certificate takes the estate or interest.
Distinctions / Limitations / Qualifications.
- Ambat and Villegas v. Fernando are modified, not followed. Their reading of Section 29 — that failure to reconstitute waives the decision and forces a new action — is confined to the case of wholly destroyed records; it does not reach a case whose trial-court adjudication is documented and undisputed.
- A judgment quieting title binds only the parties. Such suits are quasi in rem — "not technically suits in rem, nor … strictly speaking, in personam" — governed by Articles 476 to 481 of the Civil Code, so this ruling was expressly made without prejudice to the Court's separate determination of G.R. No. L-46953 over the same parcels.
- Certiorari under Rule 45 is not certiorari under Rule 65. A petition for review on certiorari is an appeal, needing no notice of appeal, appeal bond or record on appeal; authorities holding that "certiorari is not a substitute for appeal" address the special civil action and are inapposite.
- The presumption of good faith is not a substitute for the certificate. One qualifies as an innocent purchaser for value only by relying on a certificate of title that exists at the time of the purchase.
Topic/Subtopic Integration (Mandatory).
- Classification of Relationship: INCIDENTAL. Section 27 of P.D. No. 1529 directs that registration proceedings be disposed of within ninety days of submission and lets the court refer the case or any part of it to a referee. Neither the ninety-day rule nor a reference was in issue here.
- Integration. What the case supplies is the premise Section 27 rests on: a land registration case is one continuous proceeding in which the decree is merely the last step. Only on that view can a court be told to finish it within ninety days, or to farm part of it out to a referee and adopt the report as its own. Carpo's theory would have made the 1958 petition a fresh action obliging a claimant to refile and retry a 1927 application whose adjudication had been final since 1941 — the opposite of dispatch.
- Read with Republic v. Royales, assigned under the same heading. Royales marks the limit of the policy: speed can never supply a jurisdictional publication that was never made. This case marks its content: a court does not lose a case it has held since 1927, and a litigant is not sent back to the beginning for a fire he did not start. Both quote Nacua v. de Beltran for the same sentence, and Royales cites this decision by name.
Separate Opinions
None. Justice Irene R. Cortes wrote for the Third Division, with Justices Fernan and Feliciano concurring. Justices Gutierrez, Jr. and Bidin took no part — Justice Bidin having sat on the Intermediate Appellate Court division whose Resolution was under review.
Full Digest — Recitation Format
Facts
- On June 24, 1927: Estanislao Mayuga filed 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 described as Lots 1, 2 and 3, Plan Psu-47035, in Almanza, Las Piñas — Lots 2 and 3 being the parcels in litigation.
- Also pending at that time: LRC Case No. 758, GLRO Record No. 33721, filed by Florentino Baltazar, and LRC Case No. 976, GLRO Record No. 43516, filed by Eduardo Guico. The three cases were tried jointly because they involved identical parcels of land and identical applicants and oppositors.
- On August 19, 1935: The CFI of Rizal, acting as a land registration court, issued a consolidated decision on the three cases ordering the registration of Lots 1, 2 and 3 of Plan Psu-47035 in the name of Estanislao Mayuga, and dismissing the oppositions of Florentino Baltazar and Eduardo Guico.
- On November 17, 1939: The Court of Appeals affirmed the decision of the Court of First Instance, confirming the adjudication of the three lots to Estanislao Mayuga.
- In 1941: Guico filed a petition for review on certiorari before the Supreme Court; the petition was dismissed and the Court of Appeals decision affirmed (see Guico v. San Pedro, 72 Phil. 415 [1941]).
- During World War II: The original records of LRC Case No. 657, GLRO Record No. N-29882 were lost and/or destroyed, and at the time of the present litigation were still pending reconstitution.
- Before a decree could issue: Estanislao Mayuga died, without having secured a decree of registration in his name.
- On May 13, 1958: Dominador Mayuga, son of Estanislao, filed a petition with the Court of First Instance of Rizal, Branch VI, then presided over by Judge Andres Reyes (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 his father.
- On May 21, 1958: The Reyes Court issued an order granting the petition 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 the original adjudicatee, Estanislao Mayuga, based on the affidavit of self-adjudication, subject to the provisions of Sec. 4, Rule 74 of the Rules of Court."
- Pursuant to that order: Decree No. N-63394 issued and OCT No. 1609 was issued on May 21, 1958; from it was derived TCT No. 20408, issued on May 29, 1975 in the name of Realty Sales Enterprise, Inc.
- On October 9, 1970: Morris G. Carpo bought the disputed property from the Baltazars, the original registered owners under the competing decree, by a deed executed before Iluminada Figueroa, Notary Public of Manila.
- On October 13, 1970: The decree of registration in favor of the Baltazars was transcribed in the Registration Book for the Province of Rizal and OCT No. 8629 was issued; on the same day the deed of sale to Carpo was inscribed in the Registry of Property, the Original Certificate of Title was cancelled, and TCT No. 303961 was issued in Carpo's name.
- On July 22 and 27, 1971: Decree No. N-135938 issued and OCT No. 8931 was entered in the name of Spouses Carmelino Alvendia and others, from which TCTs Nos. 333982 and 333985 were issued to Quezon City Development and Financing Corporation (QCDFC) — a third set of titles over the same two parcels.
- 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 (the Vera Court), for "declaration of nullity of Decree No. N-63394 and TCT No. 20408," against Realty Sales Enterprise, Inc., Macondray Farms, Inc. and the Commissioner of Land Registration. Carpo later withdrew the complaint as against the Commissioner, and the answer filed for that official was ordered stricken off the record.
- Thereafter: Realty and Macondray filed, with leave of court, a third-party complaint against QCDFC and the Commissioner of Land Registration, praying that Decree No. N-135938, OCT No. 8931 and TCTs Nos. 333982 and 333985 be declared null and void. QCDFC in turn filed a fourth-party complaint against Carmelino Alvendia and others, which was dismissed for lack of interest when QCDFC failed to prosecute it.
- On January 20, 1981: The Vera Court rendered judgment sustaining the title of Morris G. Carpo 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 the Supreme Court, docketed as G.R. No. L-56471, asking to be allowed to appear directly as it was raising only questions of law. On October 19, 1981 the Supreme Court referred the case to the Court of Appeals "in aid of its appellate jurisdiction for proper determination on the merits of the appeal."
- On 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 trial court's decision and rendered a new one upholding the validity of the title of Realty Sales Enterprise, Inc. and declaring null and void the titles of Carpo and QCDFC.
- After the reorganisation under B.P. Blg. 129: Carpo's motion for reconsideration was pending when the Court of Appeals became the Intermediate Appellate Court. On re-raffle the case went to the Second Special Cases Division, which by Resolution of July 25, 1983 returned the records for another re-raffle to the Civil Cases Divisions, deeming itself without authority over a civil case under Section 8 of B.P. Blg. 129. The case was then assigned to the Third Civil Cases Division (Justices de la Fuente, Coquia, Zosa and Bartolome). Justices Coquia and Bartolome inhibited themselves, and Justices Camilon and Bidin were assigned in their place, forming the Special Third Civil Cases Division.
- On May 2, 1984: The IAC, through the Special Third Civil Cases Division with Justice Zosa as ponente, concurred in by Justices Camilon and Bidin, promulgated a 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.
- On September 28, 1987: The Supreme Court, Third Division, promulgated the Decision setting aside the IAC Resolution and the trial court's decision and affirming the Court of Appeals Decision of December 29, 1982.
Arguments of the Parties
Petitioners (Realty Sales Enterprise, Inc. and Macondray Farms, Inc.).
- Petitioners argue that the Special Third Civil Cases Division which promulgated the Resolution of May 2, 1984 had no legal standing under Sections 4 and 8 of B.P. Blg. 129 and so was not vested with jurisdiction and adjudicatory power, the reassignment of Justices Bidin and Camilon being violative of the injunction against appointing an appellate Justice to a class of divisions other than that to which he was appointed.
- Petitioners contend that the Resolution of May 2, 1984 amounted to a denial of their right to appeal and to judicial review of the fundamental questions of law raised in their petition in G.R. No. 56471, and that the IAC erred in ruling that the Court of Appeals had no power to pass upon the appealed judgment because "appeal and not certiorari was the proper remedy."
- Petitioners assert that the IAC gave "a perverted and obviously unjustified and illogical interpretation" to the Resolution of July 25, 1983, which merely resolved to return the records for re-raffling and reassignment in view of the allocation of cases under Section 8 of B.P. Blg. 129, and did not erase or cancel the validity of the Decision of December 29, 1982.
- Petitioners contend that in confirming the appealed judgment the Special Division sanctioned Judge Vera's disregard of law and jurisprudence, and that it stated a falsehood in declaring Carpo a purchaser in good faith and for value — a material matter neither alleged nor referred to in the complaint and pleadings, nor covered by any exhibit presented by any party.
Private respondent (Morris G. Carpo).
- Respondent Carpo argues that since the records of LRC Case No. 657 were not properly reconstituted, there was no pending land registration case, and the Reyes Court, acting without a pending case, was acting without jurisdiction.
- Respondent Carpo invokes Villegas v. Fernando (L-27347, April 29, 1969, 27 SCRA 1119), which, citing Ambat v. Director of Lands (92 Phil. 567 [1953]), held 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," the basis of the ruling being Section 29 of Act No. 3110.
- Respondent Carpo relies on the presumption of good faith under Article 527 of the Civil Code to establish that he is an innocent purchaser for value, citing no other factual proof.
Third-party respondent (Quezon City Development and Financing Corporation).
- QCDFC alleges that it was improperly impleaded as third-party defendant, Realty's alleged cause of action against it being neither for contribution, indemnity, subrogation nor any other relief in respect of Carpo's claim against Realty.
- QCDFC alleges that Realty had no cause of action against it because the third-party complaint did not allege that QCDFC violated any legal right of Realty, and assails the Vera Court's decision for declaring QCDFC directly liable to Carpo and not to Realty.
Common Ground.
- All parties proceed on the footing that two adjacent parcels of land in Almanza, Las Piñas, with an aggregate area of 373,868 square meters, are covered by three distinct sets of Torrens titles.
- 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, and thirteen years before the Alvendia title of 1971.
Issue
MAIN ISSUE. Whether the Court of First Instance of Rizal, Branch VI (the Reyes Court), was exercising land registration jurisdiction when on May 21, 1958 it directed the issuance of a decree of registration in a case filed in 1927 whose records had been destroyed during the war and never reconstituted — or whether, there being no pending case, it acted without jurisdiction, so that its order could be annulled by the Vera Court.
SECONDARY ISSUES.
- Whether the Special Third Civil Cases Division of the Intermediate Appellate Court, formed by reassigning two Justices from other Civil Cases Divisions after two regular members inhibited, was validly constituted under Sections 4 and 8 of B.P. Blg. 129.
- Whether a petition for review on certiorari raising only questions of law is a form of appeal, so that the Court of Appeals Decision of December 29, 1982, rendered after this Court referred the petition to it, was a valid judgment.
- Whether Morris G. Carpo was an innocent purchaser for value of the disputed property.
- Which of the three certificates of title covering the same two parcels prevails.
ANCILLARY / INCIDENTAL ISSUES.
- Whether the Court may rule on QCDFC's claim to the property notwithstanding that the third-party complaint against it was procedurally defective.
Ruling
Ruling on the MAIN ISSUE. IT WAS EXERCISING THAT JURISDICTION. Under Act No. 496 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 province in which the land 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 does not constitute a separate proceeding. The petition filed by Dominador Mayuga in 1958 was accordingly not a distinct and separate proceeding from, but a continuation of, the original land registration proceedings initiated in 1927; and the Reyes Court, as Branch VI of the Court of First Instance of Rizal, was continuing in the exercise of the jurisdiction vested in that court upon the filing of the original applications.
On the effect of the unreconstituted records, the Court applied Nacua v. de Beltran (93 Phil. 595 [1953]), which modified Ambat: 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," and not where the records of the Court of First Instance are intact and complete and only the appellate records were lost. "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." If the records up to a certain stage are lost and not reconstituted, "the parties and the court should go back to the next preceding stage where records are available, but not beyond that"; to go further would void 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." Act No. 3110 "was not promulgated to penalize people for failure to observe or invoke its provisions," contains "no penal sanction," and "was enacted rather to aid and benefit litigants"; the worst that can happen to a party who does not reconstitute is that "they lose the advantages provided by the reconstitution law."
Applying that doctrine, the parties to LRC Case No. 657 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 CFI of Rizal continued to have jurisdiction over it. The records were destroyed at the stage when all that remained was the ministerial duty of the Land Registration Office to issue a decree implementing a judgment that had become final, and there were authentic copies of the CFI and Court of Appeals decisions adjudicating the lots to Estanislao Mayuga as well as an official report of this Court's decision affirming both. A final order of adjudication forms the basis for the issuance of a decree of registration. The Reyes Court's order being valid and in consonance with the Guico decision and the 1935 and 1939 judgments, Judge Vera was without jurisdiction to set it aside.
Ruling on SECONDARY ISSUE 1. VALID. A reading of B.P. Blg. 129 shows that what it prohibits is appointment from one class of divisions to another class — 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 and Justice Camilon from the Second Civil Cases Division, both of the same class as the Third Civil Cases Division. The reassignment, made because two regular members voluntarily inhibited, 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."
Ruling on SECONDARY ISSUE 2. IT IS AN APPEAL, AND THE DECISION WAS VALID. There are two modes by which decisions of the then Courts of First Instance in their original jurisdiction may be reviewed: an ordinary appeal either to the Supreme Court or to the Court of Appeals, or an appeal on certiorari to the Supreme Court where only errors or questions of law are involved. This Court itself treated the petition first filed as an appeal, referring it to the Court of Appeals "in aid of its appellate jurisdiction for proper determination on the merits of the appeal." "After all, a petition for review by certiorari is also a form of appeal." That mode, under Rule 42, follows the form and procedure of Rule 45, which — unlike ordinary appeals — does not require a notice of appeal, an appeal bond or a record on appeal. It was therefore error for the IAC to hold that the Vera Court's decision could not be passed upon because "appeal and not certiorari was the proper remedy"; the authorities cited by Carpo refer to the special civil action of certiorari under Rule 65, not to appeal by way of certiorari. The IAC likewise erred in reading the Resolution of July 25, 1983 as having "erased or cancelled" the Ninth Division's Decision — a perusal of that Resolution shows it merely clarified the nature of the case and why it should be reassigned to the Civil Cases Divisions. The IAC moreover impliedly admitted the Decision's validity when it granted a motion to reconsider it, since "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."
Ruling on SECONDARY ISSUE 3. NO. Whether Carpo is an innocent purchaser for value was never raised as an issue in the trial court, and a perusal of the records reveals no factual basis for the conclusion; Carpo cites no proof and merely relies on the presumption of good faith under Article 527 of the Civil Code. 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," and he is not required to explore farther than what the Torrens title on its face indicates. Carpo bought from the Baltazars on October 9, 1970, but their decree was transcribed and OCT No. 8629 issued only on October 13, 1970. 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," and "not being a purchaser for value and in good faith, he is in no better position than his predecessors-in-interest." Those predecessors, the Baltazars, are heirs of Florentino Baltazar, an oppositor in the 1927 application whose opposition the CFI dismissed; as his successors they "could not pretend ignorance" of the registration proceedings and of the decisions rendered in them.
Ruling on SECONDARY ISSUE 4. THE EARLIER CERTIFICATE PREVAILS. "The 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" (Legarda and Prieto v. Saleeby, 31 Phil. 590 [1915]). TCT No. 20408, derived from OCT No. 1609 (1958), is therefore superior to TCT No. 303961, derived from OCT No. 8629 (1970); and since QCDFC's OCT No. 8931 issued on July 27, 1971, thirteen years after Mayuga's title, Realty's title must likewise prevail over QCDFC's.
Ruling on the ANCILLARY ISSUE. YES. QCDFC did not appeal from the Vera Court's decision, from the Court of Appeals Decision of December 29, 1982, or from the IAC Resolution of May 2, 1984 — all of which voided its title — so those judgments became final and executory as regards QCDFC. Moreover, although the Court agrees that the third-party complaint was procedurally defective, the relief sought not being in respect of Carpo's claim, "policy considerations and the factual circumstances of the case" compel a ruling on QCDFC's claim to avoid multiplicity of suits and put the conflicting claims over the property to rest; QCDFC was afforded full opportunity and exercised its right to prove its claim, presenting documentary as well as testimonial evidence and even being permitted to file a fourth-party complaint, which it then failed to prosecute.
A closing qualification. The action Carpo filed is in the nature of an action to remove clouds from title to real property, governed by Articles 476 to 481 of the Civil Code and by the Rules on declaratory relief and similar remedies; and Realty, by asserting its own title, asking that Carpo's be declared void and filing the third-party complaint, asked the same. "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," and "the judgment in such proceedings is conclusive only between the parties." The ruling was therefore made without any prejudice to this Court's final determination of G.R. No. L-46953, involving the same property, whose consolidation with this case had been denied by Resolution of August 29, 1984.
Dispositive portion (verbatim). The final dispositive portion of the Supreme Court in G.R. No. L-67451, dated September 28, 1987, is quoted verbatim as follows:
"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."
Ratio
- Jurisdiction attaches at filing and is retained to the end: 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. Since the issuance of a decree of registration is but a step in the entire land registration process, a petition to secure that decree — filed thirty-one years later, by the heir of the original adjudicatee — is not a new case but the same case continuing, and the branch that entertains it is exercising land registration jurisdiction already vested in the court.
- Reconstitution restores a stage, not a case: under Nacua v. de Beltran, Section 29 of Act No. 3110 operates only where the records of the trial court and the appellate court alike were destroyed and left unreconstituted. Where the adjudication is documented, the parties go back to the next preceding stage for which records are available and no further, because to disregard that stage would compel a court to re-admit pleadings, re-try the case and decide it anew when the record of the earlier pleadings, trial, evidence and decision "are there and are not disputed."
- A reconstitution statute without a penal clause is not a forfeiture statute: Act No. 3110 "was not promulgated to penalize people for failure to observe or invoke its provisions," has no penal sanction, and "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." A party who does not reconstitute merely "loses the advantages provided by the reconstitution law" and does not lose the adjudication itself.
- A final order of adjudication is the basis for the decree: what was destroyed here was the record of a case already decided by the CFI in 1935, affirmed by the Court of Appeals in 1939 and by this Court in 1941. With authentic copies of both decisions and an official report of this Court's affirmance on hand, and only the ministerial duty of the Land Registration Office remaining, there was nothing left to litigate.
- Reliance on a certificate is what makes a purchaser innocent: the buyer must have bought from the registered owner in reliance on a certificate of title, without notice of another's right, paying a full and fair price. Carpo's purchase preceded the existence of any certificate by four days, so the presumption of good faith under Article 527 could not convert him into an innocent purchaser for value; and he takes no better right than the Baltazars, whose predecessor's opposition had been dismissed in the very proceedings they sought to bypass.
- Priority of certificates: as between two certificates purporting to include the same land, the earlier in date prevails, and the person claiming under the prior certificate — or deriving directly or indirectly from the holder of the earliest certificate issued — is entitled to the estate or interest.
- A special division is still a division: B.P. Blg. 129 bars assignment across classes of divisions of the Intermediate Appellate Court, not the reassignment of a Justice within his own class to replace an inhibiting member; a contrary reading would leave a regular division unable to decide any case in which two of its members inhibit.
Doctrine
Doctrines / Rules / Principles Laid Down.
- The Realty Sales Rule on Continuity of Registration Jurisdiction: jurisdiction over a land registration case is acquired upon the filing of the application and is retained up to the end of the litigation. The issuance of the decree of registration is only a step in that single proceeding and does not constitute a separate proceeding, so a petition to have the decree issued — including one filed by an heir substituted for a deceased adjudicatee — is a continuation of the original case heard by a court still sitting as a land registration court. An order issued in that continuation cannot be annulled by another branch of the same court in an independent action.
- The Nacua Rule on Stages of Reconstitution: Section 29 of Act No. 3110 applies only where the records in the trial court as well as in the appellate court were destroyed and not reconstituted. Otherwise the parties and the court "go back to the next preceding stage where records are available, but not beyond that," so that proceedings already recorded and documented are not needlessly voided. Act No. 3110 was enacted to aid and benefit litigants, not to penalize them, and carries no penal sanction.
- The Rule of the Prior Certificate: in the case of two certificates of title purporting to include the same land, the earlier in date prevails; in successive registrations the person claiming under the prior certificate is entitled to the estate or interest, as is whoever derives directly or indirectly from the holder of the earliest certificate issued in respect thereof.
- The Rule on Innocent Purchasers for Value: one is an innocent purchaser for value only if, relying on the certificate of title, he bought from the registered owner without notice of another's right or interest and paid a full and fair price; he need not explore farther than the Torrens title on its face, but there must be a title on its face to rely on at the time of the purchase.
Distinctions / Limitations / Qualifications.
- Ambat and Villegas v. Fernando modified: their holding that a failure to reconstitute waives the decision and leaves the parties only the alternative of filing anew is confined to the case of records destroyed at every level and never reconstituted; it does not govern a case whose trial-level adjudication is intact, documented and uncontroverted.
- Rule 45 certiorari distinguished from Rule 65 certiorari: a petition for review on certiorari is a form of appeal, following the form and procedure of Rule 45 and requiring no notice of appeal, appeal bond or record on appeal; the doctrine that "certiorari is not a substitute for appeal" concerns the special civil action under Rule 65 and has no application.
- A suit to quiet title is quasi in rem: governed by Articles 476 to 481 of the Civil Code and the Rules on declaratory relief and similar remedies, such a suit is neither technically in rem nor strictly in personam, and its judgment is conclusive only between the parties — hence this ruling was expressly rendered without prejudice to the determination of G.R. No. L-46953 over the same land.
- Procedural defects in a third-party complaint may be glossed over: where the third-party defendant has had full opportunity to prove its claim and has allowed the adverse judgments to become final as to it, the Court may still rule on that claim to avoid multiplicity of suits and settle the conflicting claims to the property.
Topic/Subtopic Integration (Mandatory).
- Classification of Relationship: INCIDENTAL.
- Integration: Realty Sales Enterprise, Inc. v. Intermediate Appellate Court is incidentally related to Section 27 of P.D. No. 1529 — the successor of Section 36 of Act No. 496 — because the decision supplies the premise on which the section's policy of dispatch rests. Section 27 directs the trial court to see to it that all registration proceedings are disposed of within ninety days from submission for decision, and permits reference of the case or any part of it to a referee whose report the court may adopt as though the facts had been found by the judge himself. Both devices presuppose that a land registration case is one continuous proceeding whose stages accumulate toward a single decree. That is exactly what the Court held here: jurisdiction attaches on filing and is retained to the end, and the decree is a step within the process rather than a fresh case. The contrary theory — that an unreconstituted record dissolves the proceeding and obliges the claimant to refile — would have required the relitigation in 1958 of an application filed in 1927 and finally adjudicated in 1941, which is the antithesis of the dispatch the section commands. Read alongside Republic v. Royales, assigned under the same heading and itself citing this decision, the pair marks both edges of the policy: dispatch cannot excuse a missing jurisdictional publication, but neither may a litigant be sent back to the beginning of a case the court has held since the application was filed.
Separate Opinions
- NOT APPLICABLE / NOT IN RECORD. The Decision was rendered by the Third Division through Associate Justice Irene R. Cortes as ponente, with Associate Justices Marcelo B. Fernan and Florentino P. Feliciano concurring. Associate Justices Hugo E. Gutierrez, Jr. and Abdulwahid A. Bidin took no part — Justice Bidin having sat as a member of the Intermediate Appellate Court's Special Third Civil Cases Division whose Resolution was under review. No separate concurring or dissenting opinion was filed.