Top Management Programs Corp. v. Fajardo

Motion for New Trial or Motion for Reconsideration — Appeal · Forged Document may be a root of a valid title — Appeal from Judgment, etc

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Case DigestWeek 3–4 — The Registries of Deeds and Original Registration

Top Management Programs Corp. v. Fajardo

G.R. No. 150462 · June 15, 2011 · Supreme Court — Third Division

Motion for New Trial or Motion for Reconsideration — Appeal · Forged Document may be a root of a valid title — Appeal from Judgment, etc

Gist

The relationship of the case of Top Management Programs Corporation v. Luis Fajardo, G.R. No. 150462, June 15, 2011, to the assigned civil law syllabus subtopic of Chapter III – Original Registration (Sections 14–38) > Sec. 33 — Appeal from Judgment is DIRECT. The triggering controversy arose when Petitioner Top Management Programs Corporation filed a Complaint for Quieting of Title against Respondent Luis Fajardo, asserting that the issuance of Transfer Certificate of Title No. T-27380 in the name of Respondent Luis Fajardo cast a cloud on the valid Transfer Certificate of Title No. T-8129 held by the corporation, which overlapping titles resulted from the execution pending appeal of conflicting land registration decisions. The Supreme Court of the Philippines Third Division denied the Petition for Review on Certiorari, affirming the Decision of the Court of Appeals which dismissed the quieting of title complaint and ordered the cancellation of the corporation's Transfer Certificate of Title No. T-8129. The central doctrine established in this decision is that under Section 33 of Presidential Decree No. 1529, in land registration cases, an appeal from a judgment of registration must be taken in the same manner as in ordinary civil actions, and during the pendency of the appeal, the remedy of execution pending appeal is completely inapplicable.

Core Doctrine

The Land Judgment Finality Rule: Under Section 33 of Presidential Decree No. 1529, execution pending appeal is completely inapplicable in land registration proceedings, and any Torrens certificate of title issued pursuant to a non-final judgment is a absolute nullity.

Facts

On December 31, 1964 Emilio Gregorio applied to register Lots 1 to 4 of Plan Psu-204785 (LRC Case No. N-5053) in the CFI of Rizal, Branch II; on July 29, 1965 Jose T. Velasquez applied over overlapping lots (LRC Case No. N-5416).
On January 31, 1966 the CFI declared Gregorio absolute owner of Lots 1 to 4, and on March 9, 1966 ordered the decree issued, the decision having become final. Yet on March 30, 1966 the same court adjudicated the overlapping lots to Velasquez, ordering his decree on May 3, 1966.
The LRA flagged the overlap, and the Bureau of Lands amended Velasquez's lots to exclude Gregorio's. Velasquez nonetheless moved to set aside Gregorio's award, and on November 23, 1966 the CFI voided its own January 31, 1966 decision and gave his application due course. On December 6, 1966 Decrees Nos. N-111862 to N-111865 and OCT Nos. 5677 to 5680 issued to Velasquez.
On July 30, 1971 the CA reversed (CA-G.R. No. 40739-40-R), voiding the Velasquez decision and reinstating the order for Gregorio's decree; entry of judgment came February 1, 1972. Velasquez petitioned this Court (G.R. Nos. L-34239-40).
On October 31, 1972, while that appeal was still pending, the LRA issued Decree No. N-141990 to Gregorio over Lots 1, 3 and 4, and OCT No. 9587 issued November 21, 1972. Gregorio later died; on November 20, 1979 his heirs Ana, Paz, Carmen, Remedios and Rolando Gregorio were substituted, and OCT No. 9587 became TCT No. S-91911.
On February 8, 1984 this Court denied Velasquez's petition, final March 2, 1984. On March 21, 1986 the RTC of Pasig, Branch 152, voided his decrees and ordered new titles to the heirs — and on April 29, 1986 the Register of Deeds issued TCT Nos. 107727, 107728 and 107729, erroneously reciting Velasquez's nullified OCT No. 5678 as their origin and so duplicating TCT No. S-91911 over Lot 1.
The heirs subdivided Lot 1, TCT No. 107729 yielding TCT No. 4635 (Lot 1-A) and TCT No. 4636 (Herminia Galman). Meanwhile, on May 8, 1986 the RTC of Pasig, Branch 164, in Civil Case No. 35305 ordered the heirs to convey fifty percent of the remainder to Luis Fajardo under a litigation-financing agreement.
On November 29, 1988 the heirs sold Lot 1-A to Top Management Programs Corporation, which registered on February 20, 1989, taking TCT No. T-8129. The Civil Case No. 35305 judgment became final December 8, 1988, and on August 15, 1989 the Deputy Sheriff's Officer's Deed of Conveyance to Fajardo was annotated on TCT No. S-91911. On December 12, 1991 TCT No. T-27380 issued to Fajardo, replaced April 26, 1993 by TCT No. T-34923.
On February 10, 1994 Top Management sued for quieting of title (Civil Case No. 94-564). On June 8, 1998 the RTC of Las Piñas, Branch 275, granted Fajardo's demurrer, dismissed the complaint and ordered TCT No. T-8129 cancelled; on May 30, 2001 the CA affirmed. The Third Division decided on June 15, 2011.

Arguments of the Parties

Petitioner. Top Management argued TCT No. T-8129 is valid, deriving from the heirs of Gregorio, the winning party; that the recital in TCT No. 107729 tracing origin to Velasquez's nullified title was a mere clerical error of the Register of Deeds that should not prejudice a buyer; that it is an innocent purchaser for value, having paid in full and registered on February 20, 1989, before the sheriff's conveyance to Fajardo; and that OCT No. 9587 — the root of Fajardo's title — is void ab initio, having been issued in 1972 while Velasquez's appeal was pending, contrary to the bar on execution pending appeal in registration cases.

Respondent. Fajardo argued TCT No. T-8129 is void because its parent, TCT No. 107729, states on its face that its origin is Velasquez's nullified OCT No. 5678; that Top Management is no innocent purchaser, a simple look at the parent title revealing the void origin and calling for inquiry; that his rights are secured by the Notice of Lis Pendens (Entry No. 21398) on TCT No. S-91911, binding all subsequent purchasers; and that OCT No. 9587 is valid, the 1966 decision in Gregorio's favour having become final, and this Court's 1984 denial curing any prematurity.

Common Ground / Stipulations (if any). Both acknowledged the lot formed part of Gregorio's application in LRC Case No. N-5053, and that the heirs of Gregorio were the common predecessors who dealt with each of them.

Issue

MAIN ISSUE (Finality-centered). Whether under Section 33 a decree and certificate may issue on a registration judgment still pending appeal, and whether execution pending appeal under Rule 39 has any place in registration proceedings.

SECONDARY ISSUES. Whether this Court's final denial of the oppositor's appeal cures a prematurely issued original certificate; whether a registration court may order new certificates over land already covered by an existing one, creating double titling; and whether a buyer is an innocent purchaser for value where the vendor's title shows a void origin on its face and the land carries a registered lis pendens.

ANCILLARY / INCIDENTAL ISSUES (if any). None separately resolved.

Ruling

On the MAIN ISSUE: a decree cannot issue on a non-final judgment — execution pending appeal is wholly inapplicable to registration proceedings. Allowing it is fraught with dangerous consequences, since innocent purchasers may be misled into buying on a certificate that a reversal would nullify. Under Section 33 an appeal is taken as in ordinary civil actions, so the trial court loses jurisdiction on perfection of the appeal and the judgment stays unenforceable until the appellate proceedings end; a title issued on a non-final judgment is a nullity, a decree being issuable under Section 30 only after the adjudicating decision is final. On cure: YES — though the LRA acted prematurely in issuing Decree No. N-141990 and OCT No. 9587 on November 21, 1972, this Court's final denial of Velasquez's petition on February 8, 1984 validated and confirmed Gregorio's title, so OCT No. 9587, TCT No. S-91911 and Fajardo's TCT No. T-27380 stand. On double titling: NO — a registration court has no jurisdiction to decree again the registration of land already decreed, and the Pasig RTC exceeded its authority on April 29, 1986 in ordering new certificates despite the existing OCT No. 9587 and TCT No. S-91911; TCT No. 107729 and every derivative title, Top Management's TCT No. T-8129 included, are void and must be cancelled. On good faith: NO — reliance on a certificate fails where the title shows facts and serious discrepancies that would create suspicion, and TCT No. 107729 said on its face that its origin was Velasquez's nullified OCT No. 5678 — the losing party's title; that glaring irregularity demanded investigation. Besides, the Notice of Lis Pendens (Entry No. 21398) on TCT No. S-91911 is constructive notice binding the whole world, so Top Management is bound by the judgment in Civil Case No. 35305 and merely stepped into the shoes of the heirs who lost it. The dispositive portion reads verbatim: "WHEREFORE, the petition is DENIED. The Decision dated May 30, 2001 and Resolution dated October 23, 2001 of the Court of Appeals in CA-G.R. CV No. 60712 are AFFIRMED. With costs against the petitioner. SO ORDERED."

Ratio

Registration is in rem and aims at indefeasibility, which is why a decree may rest only on a final judgment — a title built on one still under appeal invites exactly the mischief the system exists to prevent.
Once land is decreed it leaves the court's reach. Decreeing it a second time is beyond the power of court or agency, and the second title is void.
Lis pendens seizes the property for the court. Entered in the primary entry book it is constructive notice to the world, and whoever acquires an interest afterwards does so at his peril and is bound by the judgment.
A registration judgment needs no writ. Being declaratory, it requires only an order directing the LRA to issue the decree — no motion or action under Rule 39.

Doctrine

Doctrines / Rules / Principles Laid Down.

Under Section 33 execution pending appeal has no application to registration proceedings, and a certificate issued on a non-final judgment is an absolute nullity.
A buyer taking land under a certificate that shows a void parent title or significant discrepancies in its registration entries is no innocent purchaser, and the title issued to him is void.
A registered notice of lis pendens warns the whole world, binding any later purchaser whether or not he bought in good faith and for value.
And where two certificates cover one parcel, the court traces them to their originals and the one earlier along the line prevails, absent anomaly in the registration.

Distinctions / Limitations / Qualifications.

A forged or fraudulent deed may still become the root of a valid title where the certificate had already passed into the forger's name and the land was then sold to an innocent purchaser relying on a clean certificate — but not where the true owner still holds a valid subsisting certificate, nor where the buyer had constructive notice of a defect or pending litigation.

Topic/Subtopic Integration (Mandatory).

DIRECT: because Section 33 routes registration appeals through the ordinary rules, the judgment stays suspended and unexecutable while the appeal runs, making execution pending appeal a prohibited remedy that yields a void title. Holding any title issued before finality a nullity keeps the public registry free of premature decrees and duplicate-titling schemes.

Also assigned under.

The Course Outline assigns this case under more than one heading. Each additional angle is answered here, on the page every one of those rows links to.
Review of decree; innocent purchaser for value (Sections 32 and 44) — DIRECT. The shield of indefeasibility cannot protect a buyer who ignores the constructive notice of a registered lis pendens, or who buys under a duplicate title bearing serious, visible discrepancies about its void origin.
Requiring diligence when the entries are irregular preserves the system's integrity, so that indefeasibility cannot be turned into a double-titling scheme against legitimate holders.

Separate Opinions

None. The Third Division decided unanimously, with no separate concurring or dissenting opinion recorded.

Full Digest — Recitation Format

Facts

On December 31, 1964: Emilio Gregorio filed an application for original land registration covering Lots 1 to 4 of Plan Psu-204785 before the Court of First Instance of Rizal, Branch II, docketed as LRC Case No. N-5053 (LRC Record No. N-27523).
On July 29, 1965: Jose T. Velasquez filed a separate application for land registration covering overlapping lots before the Court of First Instance of Rizal, Branch II, docketed as LRC Case No. N-5416 (LRC Record No. N-28735).
On January 4, 1966: The Court of First Instance of Rizal, Branch II, issued an order declaring as abandoned the reserved oppositions of Jose T. Velasquez and Pablo Velasquez in LRC Case No. N-5053.
On January 31, 1966: The Court of First Instance of Rizal, Branch II, rendered a decision in LRC Case No. N-5053 declaring Emilio Gregorio to be the absolute owner of Lots 1, 2, 3, and 4 described in Plan Psu-204785.
On March 9, 1966: The Court of First Instance of Rizal, Branch II, issued an order directing the Land Registration Commission to issue the decree of registration in favor of Emilio Gregorio in LRC Case No. N-5053 on the ground that the January 31, 1966 decision had become final.
On March 30, 1966: The Court of First Instance of Rizal, Branch II, promulgated a decision in LRC Case No. N-5416 adjudicating the overlapping lots in favor of Jose T. Velasquez.
On May 3, 1966: The Court of First Instance of Rizal, Branch II, ordered the issuance of a decree of registration in favor of Jose T. Velasquez in LRC Case No. N-5416 in view of the finality of the March 30, 1966 decision.
On July 25, 1966: The Land Registration Authority called the attention of the Director of Lands regarding the overlapping of Lots 1, 7, and 11 of Psu-56007-Amd awarded to Jose T. Velasquez with Lots 1 to 4 of Psu-204785 adjudicated to Emilio Gregorio, requesting that portions not in conflict be segregated.
On September 16, 1966: The Land Registration Authority informed the Court of First Instance of Rizal, Branch II, that Lots 1 and 7 of Psu-56007-Amd had been amended by the Bureau of Lands to exclude therefrom portions covered by Emilio Gregorio's Lots 1 to 4 of Psu-204785.
Sometime thereafter: On the basis of the Land Registration Authority report, Jose T. Velasquez petitioned the Court of First Instance of Rizal, Branch II, to set aside the award made in favor of Emilio Gregorio on the ground of lack of jurisdiction and to give due course to Jose T. Velasquez's application in LRC Case No. N-5416.
On November 23, 1966: The Court of First Instance of Rizal, Branch II, issued an order in LRC Case Nos. N-5053 and N-5416 declaring that Jose T. Velasquez's application be given due course and declaring the January 31, 1966 decision in favor of Emilio Gregorio null and void.
On December 6, 1966: Pursuant to the November 23, 1966 order, the Land Registration Commission issued Decree Nos. N-111862 to N-111865, resulting in the issuance of Original Certificate of Title Nos. 5677 to 5680 in favor of Jose T. Velasquez.
On January 7, 1967: Emilio Gregorio appealed the November 23, 1966 decision of the Court of First Instance of Rizal, Branch II, to the Court of Appeals, which appeal was docketed as CA-G.R. No. 40739-40-R.
On July 30, 1971: The Court of Appeals rendered a decision in CA-G.R. No. 40739-40-R reversing the Court of First Instance of Rizal, Branch II, declaring the March 30, 1966 decision in favor of Jose T. Velasquez null and void, and directing that the March 9, 1966 order for the issuance of the decree in favor of Emilio Gregorio be given due course.
On February 1, 1972: The July 30, 1971 decision of the Court of Appeals became final and executory as per entry of judgment.
Sometime thereafter: Jose T. Velasquez elevated the case to the Supreme Court of the Philippines via a petition for review on certiorari, docketed as G.R. Nos. L-34239-40.
On October 31, 1972: While the petition of Jose T. Velasquez was still pending before the Supreme Court of the Philippines, the Land Registration Authority issued Decree No. N-141990 in favor of Emilio Gregorio over Lots 1, 3, and 4 of Plan Psu-204785, resulting in the issuance of Original Certificate of Title No. 9587 on November 21, 1972.
On May 8, 1974: The Court of First Instance of Rizal dismissed the complaint filed by Emilio Gregorio in Civil Case No. 16977 seeking the annulment of a deed of sale executed in favor of Luciana Parami.
On February 7, 1978: The Court of Appeals in CA-G.R. No. 56015-R reversed the CFI decision in Civil Case No. 16977, declaring the deed of sale null and void, and ordering the cancellation of the certificate of title in the name of the Paramis and the issuance of an Original Certificate of Title in favor of Emilio Gregorio.
On November 20, 1979: The heirs of Emilio Gregorio (Ana, Paz, Carmen, Remedios, and Rolando, all surnamed Gregorio) were officially substituted as compulsory heirs of Emilio Gregorio, who had died.
Sometime thereafter: Original Certificate of Title No. 9587 was cancelled and Transfer Certificate of Title No. S-91911 was issued in favor of the heirs of Emilio Gregorio.
On February 8, 1984: The Supreme Court of the Philippines Second Division in G.R. Nos. L-34239-40 denied the petition for review filed by Jose T. Velasquez, thereby confirming with finality the July 30, 1971 Court of Appeals decision in favor of Emilio Gregorio.
On March 2, 1984: The Supreme Court of the Philippines' denial of Jose T. Velasquez's appeal became final and executory.
On September 12, 1984: The Land Registration Authority submitted a report to the Court of First Instance of Rizal in LRC Case No. N-5416, recommending that because Lots 1, 3, and 4 of plan Psu-204785 were already covered by Transfer Certificate of Title No. S-91911 in the name of the heirs of Emilio Gregorio, Decree Nos. N-111862 to N-111865 in favor of Jose T. Velasquez be declared null and void to avoid duplication of titles or double titling.
On March 21, 1986: On motion of the heirs of Emilio Gregorio in LRC Case Nos. N-5053 and N-5416, the Regional Trial Court of Pasig, Branch 152, issued an order implementing the 1984 Supreme Court decision, declaring Jose T. Velasquez's Decree Nos. N-111862 to N-111865 null and void, and directing the Register of Deeds of Pasay City to cancel the certificates of title of Jose T. Velasquez and to issue new certificates of title in favor of the heirs of Emilio Gregorio.
On April 29, 1986: In compliance with the Pasig RTC order, the Register of Deeds issued Transfer Certificate of Title Nos. 107727, 107728, and 107729 (covering Lot 1) in the name of the heirs of Emilio Gregorio, which erroneously annotated on the face of the titles that the origin was Jose T. Velasquez's nullified OCT No. 5678, thereby creating a duplication of titles over Lot 1 alongside the existing TCT No. S-91911.
Sometime thereafter: The heirs of Emilio Gregorio subdivided Lot 1, resulting in the cancellation of Transfer Certificate of Title No. 107729 and the issuance of Transfer Certificate of Title No. 4635 covering Lot 1-A in the name of the heirs of Emilio Gregorio and Transfer Certificate of Title No. 4636 in the name of Herminia Galman.
On May 8, 1986: In Civil Case No. 35305 (an action to enforce a litigation financing agreement with Emilio Gregorio), the Regional Trial Court of Pasig, Branch 164, rendered judgment ordering the heirs of Emilio Gregorio to convey fifty percent (50%) of the remainder of the lands to Respondent Luis Fajardo.
On November 29, 1988: The heirs of Emilio Gregorio executed a Deed of Absolute Sale conveying Lot 1-A to Petitioner Top Management Programs Corporation for a valuable consideration.
On December 8, 1988: The Court of Appeals decision in Civil Case No. 35305 became final and executory, and Respondent Luis Fajardo subsequently obtained a writ of execution.
On February 20, 1989: Petitioner Top Management Programs Corporation registered the November 29, 1988 deed of sale, resulting in the cancellation of TCT No. 4635 and the issuance of Transfer Certificate of Title No. T-8129 in the name of Petitioner Top Management Programs Corporation.
On August 15, 1989: To satisfy the final judgment in Civil Case No. 35305, the Deputy Sheriff executed an Officer's Deed of Conveyance in favor of Trinidad and Respondent Luis Fajardo, which was annotated as Entry No. 6503 and Entry No. 6504 on the heirs' Transfer Certificate of Title No. S-91911.
On December 12, 1991: Pursuant to court orders, the Register of Deeds of Las Piñas issued Transfer Certificate of Title No. T-27380 covering a portion of Lot 1 in the name of Respondent Luis Fajardo.
On April 26, 1993: TCT No. T-27380 was cancelled per court order and TCT No. T-34923 was issued in the name of Respondent Luis Fajardo free from any carried-over encumbrances.
On February 10, 1994: Petitioner Top Management Programs Corporation instituted Civil Case No. 94-564 for Quieting of Title against Respondent Luis Fajardo, asserting that the issuance of TCT No. T-27380 in the name of Respondent Luis Fajardo cast a cloud on Petitioner Top Management Programs Corporation's TCT No. T-8129.
On June 8, 1998: The Regional Trial Court of Las Piñas City, Branch 275, granted the demurrer to evidence filed by Respondent Luis Fajardo, dismissed the complaint, and ordered the Register of Deeds to cancel Petitioner Top Management Programs Corporation's TCT No. T-8129.
On May 30, 2001: The Court of Appeals in CA-G.R. CV No. 60712 affirmed the order of dismissal.
On June 15, 2011: The Supreme Court of the Philippines Third Division denied the petition of Petitioner Top Management Programs Corporation.

Arguments of the Parties

Petitioner (Top Management Programs Corporation).

Legitimacy of Title from the Adjudged Owner: Petitioner Top Management Programs Corporation argues that Transfer Certificate of Title No. T-8129 is valid because the title is derived from the heirs of Emilio Gregorio, the winning party in the land registration conflict against Jose T. Velasquez.
Clerical Character of Title Errors: Petitioner Top Management Programs Corporation contends that the annotations on Transfer Certificate of Title No. 107729 (the parent title of TCT No. T-8129) stating that the title was derived from Jose T. Velasquez's nullified title are mere clerical and typographical errors committed by the Register of Deeds in implementing the Pasig Regional Trial Court order, which errors should not prejudice the buyer.
Good Faith Buyer Status: Petitioner Top Management Programs Corporation asserts that the corporation is an innocent purchaser for value because the corporation had no knowledge of any defect in the title of the heirs of Emilio Gregorio, paid the full purchase price, and registered the sale on February 20, 1989, prior to the execution of the sheriff's conveyance in favor of Respondent Luis Fajardo.
Nullity of Respondent's Title due to Premature Execution: Petitioner Top Management Programs Corporation argues that Original Certificate of Title No. 9587 (the parent title of Respondent Luis Fajardo's TCT No. T-27380) is null and void ab initio because the title was prematurely issued in 1972 while Jose T. Velasquez's appeal in G.R. Nos. L-34239-40 was still pending before the Supreme Court of the Philippines, in violation of the rule prohibiting execution pending appeal in land registration cases.

Respondent (Luis Fajardo).

Void Origin of Petitioner's Title: Respondent Luis Fajardo argues that Petitioner Top Management Programs Corporation's Transfer Certificate of Title No. T-8129 is null and void because the parent title, Transfer Certificate of Title No. 107729, on the face of the title explicitly states that the origin is Jose T. Velasquez's nullified Original Certificate of Title No. 5678.
Absence of Good Faith in Overlooking Visible Defects: Respondent Luis Fajardo contends that Petitioner Top Management Programs Corporation is not an innocent purchaser for value because a simple examination of the parent title would have revealed to the corporation that the title originated from a voided title, and the presence of such glaring irregularities should have prompted a prudent buyer to make further inquiries.
Binding Constructive Notice of Lis Pendens: Respondent Luis Fajardo asserts that the rights of Respondent Luis Fajardo are protected by the Notice of Lis Pendens registered as Entry No. 21398 on the heirs' Transfer Certificate of Title No. S-91911, which was annotated during the pendency of Civil Case No. 35305 and bound all subsequent purchasers, including Petitioner Top Management Programs Corporation.
Validity of the Original Registration: Respondent Luis Fajardo contends that Original Certificate of Title No. 9587 is valid because the January 31, 1966 land registration decision in favor of Emilio Gregorio had already become final and executory before the litigation over the overlapping claims commenced, and the subsequent denial of Jose T. Velasquez's appeal by the Supreme Court of the Philippines in 1984 cured any premature issuance.

Common Ground.

Both Petitioner Top Management Programs Corporation and Respondent Luis Fajardo acknowledge that the disputed lot originally formed part of the property covered by the land registration application of Emilio Gregorio in LRC Case No. N-5053.
Both parties admit that the heirs of Emilio Gregorio were the common predecessors-in-interest who executed the transactions in favor of both Petitioner Top Management Programs Corporation and Respondent Luis Fajardo.

Issue

MAIN ISSUE.

Whether under Section 33 of Presidential Decree No. 1529, a decree of registration and a Torrens certificate of title can be validly issued pursuant to a land registration judgment that is still pending appeal, and whether the remedy of execution pending appeal under Rule 39 of the Rules of Court is applicable in land registration proceedings.

SECONDARY ISSUES.

Whether the subsequent final denial of an oppositor's appeal by the Supreme Court of the Philippines cures the premature issuance of an original certificate of title that was issued during the pendency of the appeal.
Whether a land registration court has the jurisdiction to order the Register of Deeds to issue new certificates of title over land already covered by an existing original certificate of title, thereby creating a duplication of titles.
Whether a buyer of registered land can claim the status of an innocent purchaser for value under Section 32 and Section 44 of Presidential Decree No. 1529 if the transfer certificate of title of the vendor on the face of the title shows a void origin, and when the property is subject to a registered notice of lis pendens in a pending civil action.

Ruling

MAIN ISSUE: YES. The Supreme Court of the Philippines ruled that under Section 33 of Presidential Decree No. 1529, a decree of registration and a Torrens certificate of title cannot be validly issued based on a land registration judgment that is not yet final, as the remedy of execution pending appeal is completely inapplicable to land registration proceedings. The Supreme Court held that allowing execution pending appeal in land registration cases is fraught with dangerous consequences, as innocent purchasers may be misled into purchasing real properties in reliance on a certificate of title that may subsequently be nullified if the judgment is reversed on appeal. Under Section 33 of Presidential Decree No. 1529, an appeal from a judgment of registration must be taken in the same manner as in ordinary civil actions, which means that the trial court loses jurisdiction over the case upon the perfection of the appeal, and the judgment remains non-final and unenforceable until the appellate proceedings are completely terminated. A Torrens title issued on the basis of a judgment that is not final is a complete nullity because a decree of registration can only be issued after the decision adjudicating the title becomes final and executory.

SECONDARY ISSUE NO. 1: YES. The Supreme Court of the Philippines ruled that the subsequent final denial of Jose T. Velasquez's appeal in G.R. Nos. L-34239-40 cured the premature issuance of Original Certificate of Title No. 9587. The Supreme Court held that although the Land Registration Authority acted prematurely in issuing Decree No. N-141990 and Original Certificate of Title No. 9587 on November 21, 1972 while Velasquez's appeal was still pending, the final resolution of this Court on February 8, 1984 denying Velasquez's petition with finality validated and confirmed Emilio Gregorio's title. Consequently, Original Certificate of Title No. 9587 and the derivative Transfer Certificate of Title No. S-91911 are valid, and the subsequent title of Respondent Luis Fajardo (TCT No. T-27380) is not a nullity.

SECONDARY ISSUE NO. 2: NO. The Supreme Court of the Philippines ruled that a land registration court completely lacks jurisdiction to order the registration of land already decreed in the name of another in an earlier land registration case. The Supreme Court held that the Regional Trial Court of Pasig exceeded the authority of the Regional Trial Court of Pasig when the Regional Trial Court of Pasig ordered the Register of Deeds to issue new certificates of title in the name of the heirs of Emilio Gregorio on April 29, 1986, despite the existence of the previously issued Original Certificate of Title No. 9587 and Transfer Certificate of Title No. S-91911 covering the same land. A land registration court has no power in a subsequent execution proceeding to order the registration of a new title that results in a duplication of titles or "double titling". Consequently, Transfer Certificate of Title No. 107729 and all derivative titles, including Petitioner Top Management Programs Corporation's Transfer Certificate of Title No. T-8129, are null, void, and must be cancelled.

SECONDARY ISSUE NO. 3: NO. The Supreme Court of the Philippines ruled that Petitioner Top Management Programs Corporation cannot be considered an innocent purchaser for value under Section 32 and Section 44 of Presidential Decree No. 1529. The Supreme Court held that while a purchaser dealing with registered land may safely rely on the correctness of the certificate of title, this rule does not apply when the title shows important facts and serious discrepancies that would create suspicion in an otherwise reasonable person. In this case, Transfer Certificate of Title No. 107729 (the parent title of Petitioner Top Management Programs Corporation's TCT No. T-8129) on the face of the title explicitly indicated that the origin was Jose T. Velasquez's nullified Original Certificate of Title No. 5678, which pertained to the losing party in the land registration proceedings. This glaring irregularity should have prompted Petitioner Top Management Programs Corporation to go beyond the certificate and investigate the title of the vendor. Furthermore, the Supreme Court held that Respondent Luis Fajardo's rights are protected by the Notice of Lis Pendens registered as Entry No. 21398 on Transfer Certificate of Title No. S-91911, which was annotated during the pendency of Civil Case No. 35305. Because a registered notice of lis pendens is a constructive notice that binds the whole world, Petitioner Top Management Programs Corporation, as a subsequent purchaser, is bound by the final judgment in Civil Case No. 35305 and merely stepped into the shoes of the vendor heirs who lost the case.

Dispositive portion (verbatim). The final dispositive portion of the decision of the Supreme Court of the Philippines in G.R. No. 150462, dated June 15, 2011, is quoted verbatim as follows:

"WHEREFORE, the petition is DENIED. The Decision dated May 30, 2001 and Resolution dated October 23, 2001 of the Court of Appeals in CA-G.R. CV No. 60712 are AFFIRMED.

With costs against the petitioner.

SO ORDERED."

Ratio

The Proscription of Execution Pending Appeal in Land Cases: Under Section 33 of Presidential Decree No. 1529, an appeal from a judgment of a land registration court is taken in the same manner as in ordinary civil actions. However, the special nature of land registration proceedings—which are in rem and aim to establish an indefeasible title binding upon the whole world—precludes the application of the remedy of execution pending appeal under Rule 39 of the Rules of Court. Because land registration seeks to quiet title and establish a definitive, secure status of property, a Torrens title cannot be issued on the basis of a non-final judgment. A decree of registration can only be issued under Section 30 of Presidential Decree No. 1529 after the decision adjudicating the title has become final and executory.
The Jurisdictional Nullity of Duplicate Registration: A Regional Trial Court sitting as a land registration court has no jurisdiction to decree again the registration of land already decreed in an earlier land registration case [4, 1003]. Once a final decree has been entered, the land is placed under the operation of the Torrens system and is beyond the authority of the court or administrative agencies to register anew [4, 10, 1003]. The issuance of a second title over land already registered is null and void [1003].
The Inviolability of the Notice of Lis Pendens: A notice of lis pendens refers to the jurisdiction, power, or control which a court acquires over property involved in a suit. Under Section 52 of Presidential Decree No. 1529, the entry of an involuntary instrument, such as a notice of lis pendens, in the primary entry book of the Register of Deeds constitutes constructive notice to the whole world [5, 482, 1079]. Any person who subsequently acquires an interest in the property does so at the peril of that person and is bound by the final judgment rendered in the pending action.
The Non-Necessity of Execution Motions in Land Cases: In land registration proceedings, a final and executory judgment does not have to be executed by a motion or enforced by an action under Rule 39 of the Rules of Court. The judgment is merely declaratory, and the winning party only needs to secure an order directing the Land Registration Authority to issue the decree of registration.

Doctrine

Doctrines / Rules / Principles Laid Down.

The Land Judgment Finality Rule: Under Section 33 of Presidential Decree No. 1529, execution pending appeal is completely inapplicable in land registration proceedings, and any Torrens certificate of title issued pursuant to a non-final judgment is a absolute nullity.
The Rule on the Insufficiency of Defective Titles: A buyer who purchases land covered by a transfer certificate of title that on the face of the title indicates a void parent title or shows significant discrepancies in the original registration entries cannot be considered an innocent purchaser for value, and the title subsequently issued to the buyer is null and void.
The Rule on the Conclusiveness of Lis Pendens: A registered notice of lis pendens acts as a warning to the whole world, and any subsequent purchaser of the land in litigation is bound by the judgment of the court, regardless of whether the purchase was made in good faith or for value.
The Rule on Tracing Overlapping Titles: When two transfer certificates of title have been issued on different dates to different persons for the same parcel of land, the court must trace the original certificates from which the transfer certificates were derived; the transfer certificate issued on an earlier date along the line must prevail, absent any anomaly or irregularity tainting the process of registration.

Distinctions / Limitations / Qualifications.

The Forged Deed Exception (How Void Title Becomes Root of Valid Title): A forged or fraudulent deed may become the root of a valid title only if the certificate of title has already been transferred from the name of the true owner to the name of the forger, and while the title remained in that state, the land was subsequently sold to an innocent purchaser for value who relied on the clean certificate. This exception cannot be invoked if the true owner still holds a valid and existing certificate of title, or if the buyer has constructive notice of any defect or pending litigation.

Topic/Subtopic Integration (Mandatory).

Classification of Relationship: DIRECT.
Integration: The case of Top Management Programs Corporation v. Luis Fajardo is a direct and controlling authority on Section 33 of Presidential Decree No. 1529 regarding the manner of appeal and the finality required for land registration judgments. The decision establishes that because appeals under Section 33 must follow the rules governing ordinary actions, the trial court's judgment remains suspended and non-executable during the pendency of the appeal, thereby making execution pending appeal a prohibited remedy that produces a void title. By ruling that any Torrens title issued before a registration judgment becomes final is a nullity, G.R. No. 150462 safeguards the stability of land registration, protecting the public registry from being corrupted by premature decrees and duplicate titling schemes. Also assigned under. The Course Outline assigns this case under more than one heading. Each additional angle is answered here, on the page every one of those rows links to.

the review of decree and the protection of an innocent purchaser for value under Section 32 and Section 44 of Presidential Decree No. 1529 — classification DIRECT.

The case of Top Management Programs Corporation v. Luis Fajardo is a direct and controlling authority on Section 32 and Section 44 of Presidential Decree No. 1529 regarding the review of a decree of registration and the protection of an innocent purchaser for value. The decision establishes that the shield of indefeasibility under Section 44 cannot protect a buyer who ignores the constructive notice of a registered notice of lis pendens, or who purchases land covered by a duplicate title that contains serious, visible discrepancies regarding the void origin of the title. By requiring prospective buyers to exercise due diligence when confronted with irregular title entries, the Supreme Court of the Philippines preserved the integrity and stability of the Torrens system, ensuring that double titling schemes cannot be used to defeat the rights of legitimate title holders.

Separate Opinions

NOT APPLICABLE / NOT IN RECORD. (The decision of the Third Division of the Supreme Court of the Philippines was rendered unanimously, with Associate Justice Martin S. Villarama, Jr. as the ponente, and with Associate Justices Conchita Carpio Morales, Arturo D. Brion, Lucas P. Bersamin, and Ma. Lourdes P. A. Sereno concurring, without any separate written opinions being filed).

Cited Laws & Provisions

Every statute, rule, and issuance the decision turns on — the text as written, and the work it does in this case.

Special Law

Section 33, P.D. No. 1529

Appeal from judgment, etc

Presidential Decree No. 1529 (Property Registration Decree, 1978)

The judgment and orders of the court hearing the land registration case are appealable to the Court of Appeals or to the Supreme Court in the same manner as in ordinary actions:

Why it is cited here

The section the case is filed under, and the consequence the parties learned the hard way.

Judgments and orders in a land registration case "are appealable to the Court of Appeals or to the Supreme Court in the same manner as in ordinary actions."

"In the same manner as in ordinary actions" imports execution pending appeal along with everything else — and that is what produced this mess. Conflicting registration decisions were executed while on appeal, and two certificates issued over one parcel: TCT No. T-8129 to Top Management, TCT No. T-27380 to Fajardo.

The lesson is about what a judgment executed pending appeal is actually worth. It is provisional. It confers possession of a certificate, not a settled right, and it falls with the judgment if the appeal succeeds.

So a title traced to an execution pending appeal carries the appeal's outcome inside it. The Court dismissed Top Management's quieting-of-title complaint and ordered its own certificate cancelled — the title it was suing to protect was the weaker of the two.

Civil Code

Article 476, Civil Code

Civil Code of the Philippines (R.A. No. 386), Book II (Property, Ownership, and Its Modifications), Title II (Ownership), Chapter 3 (Quieting of Title (N))

Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title.

An action may also be brought to prevent a cloud from being cast upon title to real property or any interest therein.

Why it is cited here

The action brought, and the reason it rebounded on the plaintiff.

An action to quiet title lies against an instrument "which is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or unenforceable."

Top Management alleged Fajardo's TCT clouded its own. But the action requires the plaintiff to have title, and it necessarily puts both certificates before the court — you cannot show the defendant's title is defective without exhibiting your own for comparison.

That is the risk the case illustrates and it is a real one in practice. A quieting action is not one-directional: the court may find the plaintiff's title is the defective one and cancel it, which is exactly what happened.

Read with Article 477 — the plaintiff "must have legal or equitable title to, or interest in the real property" — the discipline is clear. Establish the strength of your own title before attacking anyone else's, because the suit will test it either way.

Special Law

Section 32, P.D. No. 1529

Review of decree of registration; Innocent purchaser for value

Presidential Decree No. 1529 (Property Registration Decree, 1978)

The decree of registration shall not be reopened or revised by reason of absence, minority, or other disability of any person adversely affected thereby, nor by any proceeding in any court for reversing judgments, subject, however, to the right of any person, including the government and the branches thereof, deprived of land or of any estate or interest therein by such adjudication or confirmation of title obtained by actual fraud, to file in the proper Court of First Instance a petition for reopening and review of the decree of registration not later than one year from and after the date of the entry of such decree of registration, but in no case shall such petition be entertained by the court where an innocent purchaser for value has acquired the land or an interest therein, whose rights may be prejudiced. Whenever the phrase "innocent purchaser for value" or an equivalent phrase occurs in this Decree, it shall be deemed to include an innocent lessee, mortgagee, or other encumbrancer for value.

Upon the expiration of said period of one year, the decree of registration and the certificate of title issued shall become incontrovertible. Any person aggrieved by such decree of registration in any case may pursue his remedy by action for damages against the applicant or any other persons responsible for the fraud.

Why it is cited here

Why the earlier of two decrees prevails, and indefeasibility does not save the later.

A decree becomes incontrovertible one year after entry, and is protected against reopening even for actual fraud once the land is held by an innocent purchaser for value.

Indefeasibility is often read as making any Torrens title unassailable. It does not, and the reason is that the section protects a decree validly issued over land the registration court could reach.

Where the same land was already registered, the later court had no jurisdiction over it, and a decree entered without jurisdiction is void — so the one-year period never protects it, however long it has stood.

This gives the settled rule for overlapping titles, and it is the rule the case applies: the earlier decree prevails, and where both trace to the same original, priority runs from the date of the original registration, not from the date of the transfer certificate.

Source: Top Management Programs Corp. v. Fajardo, G.R. No. 150462, June 15, 2011

Cited laws & provisions

Section 33, P.D. No. 1529

Special Law

Appeal from judgment, etc

Presidential Decree No. 1529 (Property Registration Decree, 1978)

The judgment and orders of the court hearing the land registration case are appealable to the Court of Appeals or to the Supreme Court in the same manner as in ordinary actions:

Why it is cited here

The section the case is filed under, and the consequence the parties learned the hard way.

Judgments and orders in a land registration case "are appealable to the Court of Appeals or to the Supreme Court in the same manner as in ordinary actions."

Full entry below ↓

Article 476, Civil Code

Civil Code

Civil Code of the Philippines (R.A. No. 386), Book II (Property, Ownership, and Its Modifications), Title II (Ownership), Chapter 3 (Quieting of Title (N))

An action may also be brought to prevent a cloud from being cast upon title to real property or any interest therein.

Why it is cited here

The action brought, and the reason it rebounded on the plaintiff.

An action to quiet title lies against an instrument "which is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or unenforceable."

Full entry below ↓

Section 32, P.D. No. 1529

Special Law

Review of decree of registration; Innocent purchaser for value

Presidential Decree No. 1529 (Property Registration Decree, 1978)

Why it is cited here

Why the earlier of two decrees prevails, and indefeasibility does not save the later.

A decree becomes incontrovertible one year after entry, and is protected against reopening even for actual fraud once the land is held by an innocent purchaser for value.

Full entry below ↓

Facts

On December 31, 1964 Emilio Gregorio applied to register Lots 1 to 4 of Plan Psu-204785 (LRC Case No. N-5053) in the CFI of Rizal, Branch II; on July 29, 1965 Jose T. Velasquez applied over overlapping lots (LRC Case No. N-5416).
On January 31, 1966 the CFI declared Gregorio absolute owner of Lots 1 to 4, and on March 9, 1966 ordered the decree issued, the decision having become final. Yet on March 30, 1966 the same court adjudicated the overlapping lots to Velasquez, ordering his decree on May 3, 1966.
The LRA flagged the overlap, and the Bureau of Lands amended Velasquez's lots to exclude Gregorio's. Velasquez nonetheless moved to set aside Gregorio's award, and on November 23, 1966 the CFI voided its own January 31, 1966 decision and gave his application due course. On December 6, 1966 Decrees Nos. N-111862 to N-111865 and OCT Nos. 5677 to 5680 issued to Velasquez.
On July 30, 1971 the CA reversed (CA-G.R. No. 40739-40-R), voiding the Velasquez decision and reinstating the order for Gregorio's decree; entry of judgment came February 1, 1972. Velasquez petitioned this Court (G.R. Nos. L-34239-40).
On October 31, 1972, while that appeal was still pending, the LRA issued Decree No. N-141990 to Gregorio over Lots 1, 3 and 4, and OCT No. 9587 issued November 21, 1972. Gregorio later died; on November 20, 1979 his heirs Ana, Paz, Carmen, Remedios and Rolando Gregorio were substituted, and OCT No. 9587 became TCT No. S-91911.
On February 8, 1984 this Court denied Velasquez's petition, final March 2, 1984. On March 21, 1986 the RTC of Pasig, Branch 152, voided his decrees and ordered new titles to the heirs — and on April 29, 1986 the Register of Deeds issued TCT Nos. 107727, 107728 and 107729, erroneously reciting Velasquez's nullified OCT No. 5678 as their origin and so duplicating TCT No. S-91911 over Lot 1.
The heirs subdivided Lot 1, TCT No. 107729 yielding TCT No. 4635 (Lot 1-A) and TCT No. 4636 (Herminia Galman). Meanwhile, on May 8, 1986 the RTC of Pasig, Branch 164, in Civil Case No. 35305 ordered the heirs to convey fifty percent of the remainder to Luis Fajardo under a litigation-financing agreement.
On November 29, 1988 the heirs sold Lot 1-A to Top Management Programs Corporation, which registered on February 20, 1989, taking TCT No. T-8129. The Civil Case No. 35305 judgment became final December 8, 1988, and on August 15, 1989 the Deputy Sheriff's Officer's Deed of Conveyance to Fajardo was annotated on TCT No. S-91911. On December 12, 1991 TCT No. T-27380 issued to Fajardo, replaced April 26, 1993 by TCT No. T-34923.
On February 10, 1994 Top Management sued for quieting of title (Civil Case No. 94-564). On June 8, 1998 the RTC of Las Piñas, Branch 275, granted Fajardo's demurrer, dismissed the complaint and ordered TCT No. T-8129 cancelled; on May 30, 2001 the CA affirmed. The Third Division decided on June 15, 2011.

Arguments of the Parties

Issue

ANCILLARY / INCIDENTAL ISSUES (if any). None separately resolved.

Ruling

Ratio

Registration is in rem and aims at indefeasibility, which is why a decree may rest only on a final judgment — a title built on one still under appeal invites exactly the mischief the system exists to prevent.
Once land is decreed it leaves the court's reach. Decreeing it a second time is beyond the power of court or agency, and the second title is void.
Lis pendens seizes the property for the court. Entered in the primary entry book it is constructive notice to the world, and whoever acquires an interest afterwards does so at his peril and is bound by the judgment.
A registration judgment needs no writ. Being declaratory, it requires only an order directing the LRA to issue the decree — no motion or action under Rule 39.

Doctrine

Doctrines / Rules / Principles Laid Down.

Under Section 33 execution pending appeal has no application to registration proceedings, and a certificate issued on a non-final judgment is an absolute nullity.
A buyer taking land under a certificate that shows a void parent title or significant discrepancies in its registration entries is no innocent purchaser, and the title issued to him is void.
A registered notice of lis pendens warns the whole world, binding any later purchaser whether or not he bought in good faith and for value.
And where two certificates cover one parcel, the court traces them to their originals and the one earlier along the line prevails, absent anomaly in the registration.

Distinctions / Limitations / Qualifications.

A forged or fraudulent deed may still become the root of a valid title where the certificate had already passed into the forger's name and the land was then sold to an innocent purchaser relying on a clean certificate — but not where the true owner still holds a valid subsisting certificate, nor where the buyer had constructive notice of a defect or pending litigation.

Topic/Subtopic Integration (Mandatory).

DIRECT: because Section 33 routes registration appeals through the ordinary rules, the judgment stays suspended and unexecutable while the appeal runs, making execution pending appeal a prohibited remedy that yields a void title. Holding any title issued before finality a nullity keeps the public registry free of premature decrees and duplicate-titling schemes.

Also assigned under.

The Course Outline assigns this case under more than one heading. Each additional angle is answered here, on the page every one of those rows links to.
Review of decree; innocent purchaser for value (Sections 32 and 44) — DIRECT. The shield of indefeasibility cannot protect a buyer who ignores the constructive notice of a registered lis pendens, or who buys under a duplicate title bearing serious, visible discrepancies about its void origin.
Requiring diligence when the entries are irregular preserves the system's integrity, so that indefeasibility cannot be turned into a double-titling scheme against legitimate holders.

Separate Opinions

None. The Third Division decided unanimously, with no separate concurring or dissenting opinion recorded.

Full Digest — Recitation Format

Facts

On December 31, 1964: Emilio Gregorio filed an application for original land registration covering Lots 1 to 4 of Plan Psu-204785 before the Court of First Instance of Rizal, Branch II, docketed as LRC Case No. N-5053 (LRC Record No. N-27523).
On July 29, 1965: Jose T. Velasquez filed a separate application for land registration covering overlapping lots before the Court of First Instance of Rizal, Branch II, docketed as LRC Case No. N-5416 (LRC Record No. N-28735).
On January 4, 1966: The Court of First Instance of Rizal, Branch II, issued an order declaring as abandoned the reserved oppositions of Jose T. Velasquez and Pablo Velasquez in LRC Case No. N-5053.
On January 31, 1966: The Court of First Instance of Rizal, Branch II, rendered a decision in LRC Case No. N-5053 declaring Emilio Gregorio to be the absolute owner of Lots 1, 2, 3, and 4 described in Plan Psu-204785.
On March 9, 1966: The Court of First Instance of Rizal, Branch II, issued an order directing the Land Registration Commission to issue the decree of registration in favor of Emilio Gregorio in LRC Case No. N-5053 on the ground that the January 31, 1966 decision had become final.
On March 30, 1966: The Court of First Instance of Rizal, Branch II, promulgated a decision in LRC Case No. N-5416 adjudicating the overlapping lots in favor of Jose T. Velasquez.
On May 3, 1966: The Court of First Instance of Rizal, Branch II, ordered the issuance of a decree of registration in favor of Jose T. Velasquez in LRC Case No. N-5416 in view of the finality of the March 30, 1966 decision.
On July 25, 1966: The Land Registration Authority called the attention of the Director of Lands regarding the overlapping of Lots 1, 7, and 11 of Psu-56007-Amd awarded to Jose T. Velasquez with Lots 1 to 4 of Psu-204785 adjudicated to Emilio Gregorio, requesting that portions not in conflict be segregated.
On September 16, 1966: The Land Registration Authority informed the Court of First Instance of Rizal, Branch II, that Lots 1 and 7 of Psu-56007-Amd had been amended by the Bureau of Lands to exclude therefrom portions covered by Emilio Gregorio's Lots 1 to 4 of Psu-204785.
Sometime thereafter: On the basis of the Land Registration Authority report, Jose T. Velasquez petitioned the Court of First Instance of Rizal, Branch II, to set aside the award made in favor of Emilio Gregorio on the ground of lack of jurisdiction and to give due course to Jose T. Velasquez's application in LRC Case No. N-5416.
On November 23, 1966: The Court of First Instance of Rizal, Branch II, issued an order in LRC Case Nos. N-5053 and N-5416 declaring that Jose T. Velasquez's application be given due course and declaring the January 31, 1966 decision in favor of Emilio Gregorio null and void.
On December 6, 1966: Pursuant to the November 23, 1966 order, the Land Registration Commission issued Decree Nos. N-111862 to N-111865, resulting in the issuance of Original Certificate of Title Nos. 5677 to 5680 in favor of Jose T. Velasquez.
On January 7, 1967: Emilio Gregorio appealed the November 23, 1966 decision of the Court of First Instance of Rizal, Branch II, to the Court of Appeals, which appeal was docketed as CA-G.R. No. 40739-40-R.
On July 30, 1971: The Court of Appeals rendered a decision in CA-G.R. No. 40739-40-R reversing the Court of First Instance of Rizal, Branch II, declaring the March 30, 1966 decision in favor of Jose T. Velasquez null and void, and directing that the March 9, 1966 order for the issuance of the decree in favor of Emilio Gregorio be given due course.
On February 1, 1972: The July 30, 1971 decision of the Court of Appeals became final and executory as per entry of judgment.
Sometime thereafter: Jose T. Velasquez elevated the case to the Supreme Court of the Philippines via a petition for review on certiorari, docketed as G.R. Nos. L-34239-40.
On October 31, 1972: While the petition of Jose T. Velasquez was still pending before the Supreme Court of the Philippines, the Land Registration Authority issued Decree No. N-141990 in favor of Emilio Gregorio over Lots 1, 3, and 4 of Plan Psu-204785, resulting in the issuance of Original Certificate of Title No. 9587 on November 21, 1972.
On May 8, 1974: The Court of First Instance of Rizal dismissed the complaint filed by Emilio Gregorio in Civil Case No. 16977 seeking the annulment of a deed of sale executed in favor of Luciana Parami.
On February 7, 1978: The Court of Appeals in CA-G.R. No. 56015-R reversed the CFI decision in Civil Case No. 16977, declaring the deed of sale null and void, and ordering the cancellation of the certificate of title in the name of the Paramis and the issuance of an Original Certificate of Title in favor of Emilio Gregorio.
On November 20, 1979: The heirs of Emilio Gregorio (Ana, Paz, Carmen, Remedios, and Rolando, all surnamed Gregorio) were officially substituted as compulsory heirs of Emilio Gregorio, who had died.
Sometime thereafter: Original Certificate of Title No. 9587 was cancelled and Transfer Certificate of Title No. S-91911 was issued in favor of the heirs of Emilio Gregorio.
On February 8, 1984: The Supreme Court of the Philippines Second Division in G.R. Nos. L-34239-40 denied the petition for review filed by Jose T. Velasquez, thereby confirming with finality the July 30, 1971 Court of Appeals decision in favor of Emilio Gregorio.
On March 2, 1984: The Supreme Court of the Philippines' denial of Jose T. Velasquez's appeal became final and executory.
On September 12, 1984: The Land Registration Authority submitted a report to the Court of First Instance of Rizal in LRC Case No. N-5416, recommending that because Lots 1, 3, and 4 of plan Psu-204785 were already covered by Transfer Certificate of Title No. S-91911 in the name of the heirs of Emilio Gregorio, Decree Nos. N-111862 to N-111865 in favor of Jose T. Velasquez be declared null and void to avoid duplication of titles or double titling.
On March 21, 1986: On motion of the heirs of Emilio Gregorio in LRC Case Nos. N-5053 and N-5416, the Regional Trial Court of Pasig, Branch 152, issued an order implementing the 1984 Supreme Court decision, declaring Jose T. Velasquez's Decree Nos. N-111862 to N-111865 null and void, and directing the Register of Deeds of Pasay City to cancel the certificates of title of Jose T. Velasquez and to issue new certificates of title in favor of the heirs of Emilio Gregorio.
On April 29, 1986: In compliance with the Pasig RTC order, the Register of Deeds issued Transfer Certificate of Title Nos. 107727, 107728, and 107729 (covering Lot 1) in the name of the heirs of Emilio Gregorio, which erroneously annotated on the face of the titles that the origin was Jose T. Velasquez's nullified OCT No. 5678, thereby creating a duplication of titles over Lot 1 alongside the existing TCT No. S-91911.
Sometime thereafter: The heirs of Emilio Gregorio subdivided Lot 1, resulting in the cancellation of Transfer Certificate of Title No. 107729 and the issuance of Transfer Certificate of Title No. 4635 covering Lot 1-A in the name of the heirs of Emilio Gregorio and Transfer Certificate of Title No. 4636 in the name of Herminia Galman.
On May 8, 1986: In Civil Case No. 35305 (an action to enforce a litigation financing agreement with Emilio Gregorio), the Regional Trial Court of Pasig, Branch 164, rendered judgment ordering the heirs of Emilio Gregorio to convey fifty percent (50%) of the remainder of the lands to Respondent Luis Fajardo.
On November 29, 1988: The heirs of Emilio Gregorio executed a Deed of Absolute Sale conveying Lot 1-A to Petitioner Top Management Programs Corporation for a valuable consideration.
On December 8, 1988: The Court of Appeals decision in Civil Case No. 35305 became final and executory, and Respondent Luis Fajardo subsequently obtained a writ of execution.
On February 20, 1989: Petitioner Top Management Programs Corporation registered the November 29, 1988 deed of sale, resulting in the cancellation of TCT No. 4635 and the issuance of Transfer Certificate of Title No. T-8129 in the name of Petitioner Top Management Programs Corporation.
On August 15, 1989: To satisfy the final judgment in Civil Case No. 35305, the Deputy Sheriff executed an Officer's Deed of Conveyance in favor of Trinidad and Respondent Luis Fajardo, which was annotated as Entry No. 6503 and Entry No. 6504 on the heirs' Transfer Certificate of Title No. S-91911.
On December 12, 1991: Pursuant to court orders, the Register of Deeds of Las Piñas issued Transfer Certificate of Title No. T-27380 covering a portion of Lot 1 in the name of Respondent Luis Fajardo.
On April 26, 1993: TCT No. T-27380 was cancelled per court order and TCT No. T-34923 was issued in the name of Respondent Luis Fajardo free from any carried-over encumbrances.
On February 10, 1994: Petitioner Top Management Programs Corporation instituted Civil Case No. 94-564 for Quieting of Title against Respondent Luis Fajardo, asserting that the issuance of TCT No. T-27380 in the name of Respondent Luis Fajardo cast a cloud on Petitioner Top Management Programs Corporation's TCT No. T-8129.
On June 8, 1998: The Regional Trial Court of Las Piñas City, Branch 275, granted the demurrer to evidence filed by Respondent Luis Fajardo, dismissed the complaint, and ordered the Register of Deeds to cancel Petitioner Top Management Programs Corporation's TCT No. T-8129.
On May 30, 2001: The Court of Appeals in CA-G.R. CV No. 60712 affirmed the order of dismissal.
On June 15, 2011: The Supreme Court of the Philippines Third Division denied the petition of Petitioner Top Management Programs Corporation.

Arguments of the Parties

Petitioner (Top Management Programs Corporation).

Legitimacy of Title from the Adjudged Owner: Petitioner Top Management Programs Corporation argues that Transfer Certificate of Title No. T-8129 is valid because the title is derived from the heirs of Emilio Gregorio, the winning party in the land registration conflict against Jose T. Velasquez.
Clerical Character of Title Errors: Petitioner Top Management Programs Corporation contends that the annotations on Transfer Certificate of Title No. 107729 (the parent title of TCT No. T-8129) stating that the title was derived from Jose T. Velasquez's nullified title are mere clerical and typographical errors committed by the Register of Deeds in implementing the Pasig Regional Trial Court order, which errors should not prejudice the buyer.
Good Faith Buyer Status: Petitioner Top Management Programs Corporation asserts that the corporation is an innocent purchaser for value because the corporation had no knowledge of any defect in the title of the heirs of Emilio Gregorio, paid the full purchase price, and registered the sale on February 20, 1989, prior to the execution of the sheriff's conveyance in favor of Respondent Luis Fajardo.
Nullity of Respondent's Title due to Premature Execution: Petitioner Top Management Programs Corporation argues that Original Certificate of Title No. 9587 (the parent title of Respondent Luis Fajardo's TCT No. T-27380) is null and void ab initio because the title was prematurely issued in 1972 while Jose T. Velasquez's appeal in G.R. Nos. L-34239-40 was still pending before the Supreme Court of the Philippines, in violation of the rule prohibiting execution pending appeal in land registration cases.

Respondent (Luis Fajardo).

Void Origin of Petitioner's Title: Respondent Luis Fajardo argues that Petitioner Top Management Programs Corporation's Transfer Certificate of Title No. T-8129 is null and void because the parent title, Transfer Certificate of Title No. 107729, on the face of the title explicitly states that the origin is Jose T. Velasquez's nullified Original Certificate of Title No. 5678.
Absence of Good Faith in Overlooking Visible Defects: Respondent Luis Fajardo contends that Petitioner Top Management Programs Corporation is not an innocent purchaser for value because a simple examination of the parent title would have revealed to the corporation that the title originated from a voided title, and the presence of such glaring irregularities should have prompted a prudent buyer to make further inquiries.
Binding Constructive Notice of Lis Pendens: Respondent Luis Fajardo asserts that the rights of Respondent Luis Fajardo are protected by the Notice of Lis Pendens registered as Entry No. 21398 on the heirs' Transfer Certificate of Title No. S-91911, which was annotated during the pendency of Civil Case No. 35305 and bound all subsequent purchasers, including Petitioner Top Management Programs Corporation.
Validity of the Original Registration: Respondent Luis Fajardo contends that Original Certificate of Title No. 9587 is valid because the January 31, 1966 land registration decision in favor of Emilio Gregorio had already become final and executory before the litigation over the overlapping claims commenced, and the subsequent denial of Jose T. Velasquez's appeal by the Supreme Court of the Philippines in 1984 cured any premature issuance.

Common Ground.

Both Petitioner Top Management Programs Corporation and Respondent Luis Fajardo acknowledge that the disputed lot originally formed part of the property covered by the land registration application of Emilio Gregorio in LRC Case No. N-5053.
Both parties admit that the heirs of Emilio Gregorio were the common predecessors-in-interest who executed the transactions in favor of both Petitioner Top Management Programs Corporation and Respondent Luis Fajardo.

Issue

MAIN ISSUE.

Whether under Section 33 of Presidential Decree No. 1529, a decree of registration and a Torrens certificate of title can be validly issued pursuant to a land registration judgment that is still pending appeal, and whether the remedy of execution pending appeal under Rule 39 of the Rules of Court is applicable in land registration proceedings.

SECONDARY ISSUES.

Whether the subsequent final denial of an oppositor's appeal by the Supreme Court of the Philippines cures the premature issuance of an original certificate of title that was issued during the pendency of the appeal.
Whether a land registration court has the jurisdiction to order the Register of Deeds to issue new certificates of title over land already covered by an existing original certificate of title, thereby creating a duplication of titles.
Whether a buyer of registered land can claim the status of an innocent purchaser for value under Section 32 and Section 44 of Presidential Decree No. 1529 if the transfer certificate of title of the vendor on the face of the title shows a void origin, and when the property is subject to a registered notice of lis pendens in a pending civil action.

Ruling

Dispositive portion (verbatim). The final dispositive portion of the decision of the Supreme Court of the Philippines in G.R. No. 150462, dated June 15, 2011, is quoted verbatim as follows:

"WHEREFORE, the petition is DENIED. The Decision dated May 30, 2001 and Resolution dated October 23, 2001 of the Court of Appeals in CA-G.R. CV No. 60712 are AFFIRMED.

With costs against the petitioner.

SO ORDERED."

Ratio

The Proscription of Execution Pending Appeal in Land Cases: Under Section 33 of Presidential Decree No. 1529, an appeal from a judgment of a land registration court is taken in the same manner as in ordinary civil actions. However, the special nature of land registration proceedings—which are in rem and aim to establish an indefeasible title binding upon the whole world—precludes the application of the remedy of execution pending appeal under Rule 39 of the Rules of Court. Because land registration seeks to quiet title and establish a definitive, secure status of property, a Torrens title cannot be issued on the basis of a non-final judgment. A decree of registration can only be issued under Section 30 of Presidential Decree No. 1529 after the decision adjudicating the title has become final and executory.
The Jurisdictional Nullity of Duplicate Registration: A Regional Trial Court sitting as a land registration court has no jurisdiction to decree again the registration of land already decreed in an earlier land registration case [4, 1003]. Once a final decree has been entered, the land is placed under the operation of the Torrens system and is beyond the authority of the court or administrative agencies to register anew [4, 10, 1003]. The issuance of a second title over land already registered is null and void [1003].
The Inviolability of the Notice of Lis Pendens: A notice of lis pendens refers to the jurisdiction, power, or control which a court acquires over property involved in a suit. Under Section 52 of Presidential Decree No. 1529, the entry of an involuntary instrument, such as a notice of lis pendens, in the primary entry book of the Register of Deeds constitutes constructive notice to the whole world [5, 482, 1079]. Any person who subsequently acquires an interest in the property does so at the peril of that person and is bound by the final judgment rendered in the pending action.
The Non-Necessity of Execution Motions in Land Cases: In land registration proceedings, a final and executory judgment does not have to be executed by a motion or enforced by an action under Rule 39 of the Rules of Court. The judgment is merely declaratory, and the winning party only needs to secure an order directing the Land Registration Authority to issue the decree of registration.

Doctrine

Doctrines / Rules / Principles Laid Down.

The Land Judgment Finality Rule: Under Section 33 of Presidential Decree No. 1529, execution pending appeal is completely inapplicable in land registration proceedings, and any Torrens certificate of title issued pursuant to a non-final judgment is a absolute nullity.
The Rule on the Insufficiency of Defective Titles: A buyer who purchases land covered by a transfer certificate of title that on the face of the title indicates a void parent title or shows significant discrepancies in the original registration entries cannot be considered an innocent purchaser for value, and the title subsequently issued to the buyer is null and void.
The Rule on the Conclusiveness of Lis Pendens: A registered notice of lis pendens acts as a warning to the whole world, and any subsequent purchaser of the land in litigation is bound by the judgment of the court, regardless of whether the purchase was made in good faith or for value.
The Rule on Tracing Overlapping Titles: When two transfer certificates of title have been issued on different dates to different persons for the same parcel of land, the court must trace the original certificates from which the transfer certificates were derived; the transfer certificate issued on an earlier date along the line must prevail, absent any anomaly or irregularity tainting the process of registration.

Distinctions / Limitations / Qualifications.

The Forged Deed Exception (How Void Title Becomes Root of Valid Title): A forged or fraudulent deed may become the root of a valid title only if the certificate of title has already been transferred from the name of the true owner to the name of the forger, and while the title remained in that state, the land was subsequently sold to an innocent purchaser for value who relied on the clean certificate. This exception cannot be invoked if the true owner still holds a valid and existing certificate of title, or if the buyer has constructive notice of any defect or pending litigation.

Topic/Subtopic Integration (Mandatory).

Classification of Relationship: DIRECT.
Integration: The case of Top Management Programs Corporation v. Luis Fajardo is a direct and controlling authority on Section 33 of Presidential Decree No. 1529 regarding the manner of appeal and the finality required for land registration judgments. The decision establishes that because appeals under Section 33 must follow the rules governing ordinary actions, the trial court's judgment remains suspended and non-executable during the pendency of the appeal, thereby making execution pending appeal a prohibited remedy that produces a void title. By ruling that any Torrens title issued before a registration judgment becomes final is a nullity, G.R. No. 150462 safeguards the stability of land registration, protecting the public registry from being corrupted by premature decrees and duplicate titling schemes. Also assigned under. The Course Outline assigns this case under more than one heading. Each additional angle is answered here, on the page every one of those rows links to.

the review of decree and the protection of an innocent purchaser for value under Section 32 and Section 44 of Presidential Decree No. 1529 — classification DIRECT.

The case of Top Management Programs Corporation v. Luis Fajardo is a direct and controlling authority on Section 32 and Section 44 of Presidential Decree No. 1529 regarding the review of a decree of registration and the protection of an innocent purchaser for value. The decision establishes that the shield of indefeasibility under Section 44 cannot protect a buyer who ignores the constructive notice of a registered notice of lis pendens, or who purchases land covered by a duplicate title that contains serious, visible discrepancies regarding the void origin of the title. By requiring prospective buyers to exercise due diligence when confronted with irregular title entries, the Supreme Court of the Philippines preserved the integrity and stability of the Torrens system, ensuring that double titling schemes cannot be used to defeat the rights of legitimate title holders.

Separate Opinions

NOT APPLICABLE / NOT IN RECORD. (The decision of the Third Division of the Supreme Court of the Philippines was rendered unanimously, with Associate Justice Martin S. Villarama, Jr. as the ponente, and with Associate Justices Conchita Carpio Morales, Arturo D. Brion, Lucas P. Bersamin, and Ma. Lourdes P. A. Sereno concurring, without any separate written opinions being filed).