Name: DIANE GRACER.

DURAN
Course/Year: BS GEOE – II
Subject: LAND REGISTRATIONS LAW
Instructor: ENGR. GERSON RYAN SUMAMPONG

REPUBLIC OF THE PHILIPPINES

G.R. No. 173120,
And
G.R. No. 173141

CASE TITLE:
SPOUSE OF YU HWA PIND and MARY GAW, PETITIONERS vs.
AYALA LAND, INC., RESPONDENT

HEIRS OF SPOUSES ANDRES DIAZ and JOSEFA MIA, PETITIONERS,

vs. AYALA LAND, INC., RESPONDENT.

FACTS OF THE CASE:

On March 17, 1921, the petitioners—spouses Andres Diaz and Josefa Mia
Diaz (Spouses)—submitted a survey plan with the number Psu-25909 to the General
Land Registration Office. This survey plan covered a plot of land in Barrio Pugad Lawin,
Las Pinas, Rizal, with a total area of 460,626 square meters, which was Lot 1. On May
26, 1921, the Director of Lands approved survey plan Psu-25909.
On October 21, 1925, a different survey plan covering Lot 3 of the
identical property known as Psu-47035 was finished for Dominador Mayuga. However,
the parcel was situated in Las Pinas, Rizal's Barrio Almanza, according to the
aforementioned survey. Then, on July 28, 1930, Eduardo C. Guico was the subject of a
new survey known as PSU-80886. The survey then stated that the lots were situated in
Las Pinas at a different address. On the same parcel of property, known as Psu-
80886/SW0-20609, another survey plan for Alberto Yaptinchay was executed on March
6, 1931. Psu-80886 and Psu-80886/SW0-20609 covered Lot 2 of the same property,
which is 158,494 square meters, and Lot 3, which is 171,309 square meters.
Regarding this, on May 9, 1950, an Original Certificate of Titles No. 242
covering Lots 2 and 3 to PSU-80886/SW0-20609 was issued on Yaptinchay. On
Yaptinchay, another OCT No. 244 was released. Later, an OCT No. 1609 encompassing
Lot 3 of the same tract of land was also awarded to Dominador Mayuga. An issuance of
TCT-190713 over the aforementioned properties to CPJ Corporations will follow. On
February 16, 1968, Andres Diaz submitted an original registration petition to the Court of
First Instance for Lot 1 of Psu-25909. Following that, Andres Diaz was granted a
judgment by CFI in accordance with his first registration. In 1970, a second OCT 8510
was issued in the names of the Diaz wives, dividing the 460,626 square meter
properties into ten (10) lots designated as Lots 1-A through Lot 1-J.
Following that, in May 1971, Spouses Diaz were the target of a Land
Registration Case No. 24 brought by the CP Corporations, the owner of TCT-190731,
which came from OCT-242. On the basis that the interested parties were not informed
of the application, it sought to examine OCT 8510 filed in the names of spouses Diaz.
Andez Diaz then sold the aforementioned properties to Librado Cabautan with the OCT
8510 under PSU-25909 between August and December of 1976. It includes Lot 1-1 with
190,000 square meters, Lot 1-B with 135,000 square meters, Lot 1-A with 125,626
square meters, and Lot 1-D with 10,000 square meters. The undivided half of Lot 1-A,
however, was purchased by Spouses Yu from Spouses Diaz with OCT 8510 in 1993.
In the other hand, CPJ Corporations transferred title of the relevant assets
to Ayala Corporations, the third persons-in-interest, in 1980. Ayala Land, Inc. (ALI)
purchased all of the subject properties from various original certificates of title in this
instance. These are Lots 2, 3, and 6 from OCT-242, as well as Lot 3 from OCT-1609, all
of which have different TCT holders from various former owners.
Ultimately, the first RTC judgement ruled that the OCT-8510 decision
against the spouses Diaz and all issued TCT must and should be cancelled.
Additionally, it claimed that the wives of Diaz violated Sections 31 and 32 of Act No. 496
by making an application for OCT of land without notifying the interested parties. As a
result, the Diaz spouses were dissatisfied with the RTC's decision and filed an appeal
under CV No. 61593 with the Court of Appeals.
When spouses YU visited their lots in 1995, they were surprised to find
that the ALI had already installed fencing and guards to barricade the entrances. They
even found out that Ali's name was already on all of the TCTs for the land parcels. In
order to invalidate the TCT issued by ALI, couple Yu filed a complaint before the RTC of
Las Pinas City. Evidently, various OCTs exist if separate surveys are also conducted
beneath the same land parcels. This complicates matters further because the Director
of Lands lacked the power to authorize any of the surveys submitted by the various
claimants to the aforementioned subject lands.
To aid in the proper disposition of the land obtained from the Bureau of
Lands, the RTC of Las Pinas has now ordered the conduct of a verification survey.
Additionally, the court appointed a commissioner to oversee the verification survey. The
parties are then required to produce all of their evidence after the aforementioned
survey is finished before the case is put up for resolution.
Henceforth, the second ruling by the RTC on 2001 was ruled in favor of
spouses Yu. It demonstrated that ALI did not open a satisfactorily explanations
regarding the discrepancies of the two private surveys Psu-80886 and Psu-47035. It
also conclude that it observed a fraudulent surveys regarding the Psu-25909, the basis
of OCT-8510 in which it had no irregularity in its preparations. Wherefore, the RTC of
Las Pinas has concluded that the titles of ALI is clearly void.
Subsequently, when the Ayala Land Inc. was unconvinced with the
ordered not favor to them, they consolidated an appeal with the earlier spouses Diaz
before the CA. Thereafter, the decision on 2003, in which the CA ruled was in favor of
ALI, stating the fact the RTC in Pasig properly cancelled the OCT-8510 from spouses
Diaz as it committed fraud, as it failed to inform CPJ Corp. over the application of the
subject land. To the case of spouses Yu, the CA ruled that they can no longer assert that
the titles of ALI due to the fact that the required 1 year-period to contest is already
given. Hence, ALI’s title is not contestable.
From that, the spouses Yu and spouses Diaz felt undaunted and filed a
motion for reconsideration. In which, the CA’s decision for motion of reconsideration
about them is hereby granted. It stated that there were numerous error about the validity
of the original titles of the survey plan. And it also emphasize the defects surrounding
the said survey plan 80886. The CA also noted that the applicant-predecessors has
failed to prove that he occupied and cultivated the said parcel of land from the time of
his application. The CA, as well cited a certification from DENR-LMB that the survey-
80886 was included in the restricted list because of the surveyors doubtful signature
upon it.
The CA also declared that ALI, according to doctrine that the said
registration and its transfer certificates are clearly based on the fraudulent surveys. This
case, Ayala Land Inc. then filed its 2nd motion for reconsideration, in which the CA then
again granted. It then reversed and is set aside on 2005, as the decision on 2003 is
reinstated. It also reiterated that spouses Yu could no longer question the validity of the
registration of OCT no. 242, 244 and 1609, because the one-year required period has
longingly expired.

ISSUE:

Whether or not Prescription II bars or precludes Spouses Yu's allegation

that it violated its jurisdiction by failing to comply with the one-year prescription period
regarding the validity of the disputed titles.

Whether or not OCT-8510 in the current instance calls into question the
reliability of the surveys of the Original Certificate of Titles-242, 244, and 1609.
Additionally, if the San Pedro v. Guico case is relevant to the current case.

Whether or not the alleged faults in private survey plans 80886 and 47035
are severe enough to render the Transfer Certificates of Title OCT-242, 244, and
1609 illegal.

RULING:

As the OCT-8510 in the names of spouses Diaz came under fire for failing
to notify the persons-in-interest on their application of the registration, claiming that this
resulted in the title issue through fraud. In light of this, Section 38 of Act No. 496 states
that "any person deprived of land or of any estate or interest therein by decree of
registration obtained by fraud [may] file in the competent Court of First Instance a
petition for review within one year after entry of the decree provided no innocent
purchaser for value has acquired an interest.
On the other hand, the Yu case began when they filed a complaint to
nullify the TCTs issued in ALI’s name due to the said fact that the surveys is void and
manipulated. But ALI argues with the complaint that Yu is totally barred or prevented by
the prescription of the required one-year period compliance, under Section 38 of Act
496. But the Court finds that the complaint of spouse Yu is not barred by prescription.
Which the CA explains why the prescriptive periods of an action of re-conveyance
depends on the ground relied upon law that states, according to Section 53 (3) of PD
1529 and Art 1456 of CV with Art 1144 of CV, that: The prescriptive period is ten (10)
years when the action for re-conveyance is based on an implied or constructive trust, or
it is imprescriptible if the movant is in actual, continuous, and peaceful possession of the
property involved.
According to the rule, which states that between two (2) conflicting titles,
the title registered earlier prevails - is Not Absolutely true.
Therefore, as the CA’s decision ruled that ALI’s titles were superior to
those of petitioners’ because OCT-242, 244 and 1609 were registered earlier than OCT
8510. The CA also emphasized that the earlier date always prevails when two
certificates of title claim to cover the same property. Hence, the registered survey land
of the participants may be examined by the courts when compelling that some reasons
exist.

The Court does not agree to this claim. It noted that it does not provide
strong proof of ownership, as the rule states that ownership is different from a certificate
of title. The fact that a person was able to secure a title in his name does not operate to
vest ownership upon him of the subject land. Where in fact, registration of a piece of
land under the Torrens System does not create or vest title, because it is not a mode of
acquiring ownership. A certificate of title is merely an evidence of ownership or title over
the particular property described. In other words, registration is not a mode of acquiring
ownership but is merely a procedure to establish evidence of title over realty.
The resolution of this issue will decisively determine the true and rightful
owner of the subject properties. In its ruling from February 2005, the CA upheld the RTC
of Las Pias' conclusions. It was recognized that the surveys used by ALI do contain
glaring inaccuracies. These mistakes could not simply be ignored because they
compromise the validity and authenticity of OCT Nos. 242, 244, and 1609. The court
concurs with the RTC of Las Pinas and the CA's findings in its 2005 ruling after a careful
analysis of the matter.
In the case of Guico, in which after the proceedings that undeterred him
about the decision of the CA which erred in declaring that there was no imperfect title in
favor of Pedro Lopez de Leon, his predecessors-in-interest, he applied an appeal before
the Supreme Court. In its decision, dated June 20, 1941, the Court dismissed the
appeal of Guico and affirmed the CA ruling stating that the application of Pedro
regarding the composition of the state was not approved due to the reasons he was not
able to submit the corresponding measurements referring to Psu-16400, from which the
subject land Psu-80886 was derived.
ALI insisted that Guico v. San Pedro should actually be construed in their
favor because the Court affirmed the ruling of the CA which awarded Lot Nos. 2 and 3
to Guico, hence, Psu-80886 was valid. In which, the Court is not persuaded. In other
words, as of the case of Guico, did not subject to Psu-80886 to a valid amended
approved plan. Therefore, he is not awarded to Lot 2 and 3 for registration. This means
that Guico did not secured the registration because the Court discovered multiple
anomalous on the said surveyed plan.
Last but not least, the Court finally concurs with the CA's 2005 conclusion
that the first claimant, Andres Diaz, was the rightful owner of the aforementioned
surveyed land. Because both the surveyor's and the director of lands' signatures were
readily visible on the survey. As a result, the Bureau of Lands' file also had the original
of the surveyed plan-25909. The Psu-7909, 80886, and Psu-80886/SW0-26909, which
are examined by A.N. Feliciano, are found to have numerous flaws by the Court.
In the Diaz case, the Court concurs with the CA's ruling from February 8,
2005 that the Diaz spouses did not engage in fraud. In light of the nullity of Psu-47909,
Psu-80886, and Psu-80886/SW0-20609, OCT Nos. 242, 244, and 1609 are also null.
Additionally void are the transfer certificates held by third parties, such as CPJ
Corporation and Ayala Land, Inc. Therefore, Spouses Diaz could not be charged with
fraud because they were under no duty to disclose their registration application to CPJ
Corporation.
WHEREFORE, the petitions are GRANTED. The June 19, 2006 Decision
of the Court of Appeals in CA-G.R. CV Nos. 61593 & 70622 is hereby REVERSED and
SET ASIDE. The February 8, 2005 Amended Decision of the Court of Appeals is hereby
REINSTATED.