G.R. No.

L-67451

3/9/16, 1:24 PM

Today is Wednesday, March 09, 2016

Republic of the Philippines

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

CORTES, J.:
The litigation over the ownership of the parcels of land which are the subject of this petition started in 1927 when an
application for their registration under the Torrens System was first filed. In the present petition for review Realty
Sales Enterprise, Inc. (hereafter referred to as Realty) and Macondray Farms, Inc. (hereafter referred to as
Macondray) seek a reversal of the Resolution of May 2, 1984 of the Intermediate Appellate Court, and an affirmance
of the Court of Appeals Decision of December 29, 1982.
Two (2) adjacent parcels of land located in Almanza, Las Pias, Metro Manila, having an aggregate area of 373,868
sq. m., situated in the vicinity of the Ayala Alabang Project and BF Homes Paraaque are covered by three (3)
distinct sets of Torrens titles to wit:
1) TCT No. 20408 issued on May 29, 1975 in the name of Realty Sales Enterprise, Inc., which was
derived from OCT No. 1609, issued on May 21, 1958, pursuant to Decree No. N-63394 in LRC Cases
Nos. 657, 758 and 976, GLRO Record Nos. N-29882, N-33721 and N-43516, respectively.
2) TCT No. 303961 issued on October 13, 1970 in the name of Morris G. Carpo, which was derived
from OCT No. 8629, issued on October 13, 1970 pursuant to decree No. N-131349 in LRC Case No.
N-11-M (N-6217), GLRO Record No. N-32166.
3) TCTs Nos. 333982 and 333985, issued on July 27, 1971 in the name of Quezon City Development
and Financing Corporation, derived from OCT No. 8931 which was issued on July 27, 1971 pursuant to
LRC Case No. P-206 GLRO Record No. N-31777.
On December 29, 1977, Morris Carpo filed a complaint with the Court of First Instance of Rizal, Branch XXIII,
presided over by Judge Rizalina Bonifacio Vera (hereafter referred to as Vera Court), for "declaration of nullity of
Decree No. N-63394 and TCT No. 20408." Named defendants were Realty Sales Enterprise, Inc., Macondray
Farms, Inc. and the Commissioner of Land Registration. Subsequently, however, Carpo withdrew his complaint as
against the last named defendant, and the answer filed on behalf of said government official was ordered stricken
off the record. The complaint alleged that TCT No. 20408 as well as OCT No. 1609 from which it was derived, is a
nullity as the CFI of Rizal, Branch VI, then presided over by Judge Andres Reyes (hereafter referred to as the Reyes
Court) which issued the order dated May 21, 1958 directing the issuance of a decree of registration, was not sitting
as a land registration court, but as a court of ordinary jurisdiction. It was further alleged that the original records of
LRC Case No. 657, GLRO Record No. 29882 which was the basis for the issuance of said order of May 21, 1958,
were lost and/or destroyed during World War II and were still pending reconstitution; hence, the Reyes Court had no
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authority to order the issuance of a certificate of title.

Realty and Macondray alleged in their answer that the Reyes Court was acting as a court of land registration and in
issuing the order of May 21, 1958, was actually performing a purely ministerial duty for the registration court in Case
No. 657, GLRO Record No. 29882 (and the two other cases, Cases Nos. 758 and 976, with which said case had
been jointly tried and decided) which on August 19, 1935 had rendered a decision adjudicating the two (2) lots in
question to Estanislao Mayuga (father of Dominador Mayuga, predecessor-in-interest of Realty and Macondray),
which decision was upheld by the Court of Appeals. It was alleged that it is the title of Carpo which is null and void,
having been issued over a parcel of land previously registered under the Torrens System in favor of another.
With leave of court, Realty and Macondray filed a third-party complaint against the Quezon City Development and
Financing Corporation (hereafter referred to as QCDFC) and the Commissioner of Land Registration alleging that
TCTs Nos. 333982 and 333985 in the name of QCDFC also covered the same parcels of land subject of the dispute
between Carpo and the two corporations, Realty and Macondray. They thus prayed that Decree No. N-135938
issued on July 22, 1971, OCT No. 8931 issued on July 27, 1971, as well as TCTs Nos. 333982 and 333985 derived
from OCT No. 8931 be declared null and void.
In its answer to the third-party complaint, QCDFC asserted the validity of its own title alleging that it is the title in the
name of Realty which is null and void. QCDFC also filed a fourth-party complaint against Carmelino Alvendia,
Esperanza Alvendia, Felicisimo Alvendia, Josefina Alvendia, Jacinto G. Miranda, Rosa G. Miranda, Isabel G.
Miranda, and Feliciano G. Miranda, alleging that it bought said parcels of land from them. It prayed that in the event
of an unfavorable judgment against it, fourth-party defendants be ordered to reimburse the purchase price which the
corporation paid to them. However, QCDFC failed to prosecute its case, and the fourth-party complaint was
dismissed for lack of interest.
After hearing, the Vera Court rendered judgment on January 20, 1981, sustaining the title of Morris G. Carpo to the
two (2) lots in question and declaring the titles of Realty Sales Enterprise, Inc. and QCDFC null and void.
On March 20, 1981, Realty filed a Petition for certiorari with this Court docketed as G.R. No. L-56471 questioning
the decision of the lower court. It also asked that it be allowed to appear directly to this Court as it was raising only
questions of law. After respondents filed their comments to said petition, this Court passed a resolution dated
October 19, 1981 referring the case to the Court of Appeals "in aid of its appellate jurisdiction for proper
determination on the merits of the appeal."
In its decision dated December 29, 1982, the Court of Appeals, through its Ninth Division, with Justice Patajo as
ponente, concurred in by Justices Gopengco and Kapunan, set aside the decision of the trial court and rendered a
new one upholding the validity of the title in the name of Realty Sales Enterprise, Inc. and declaring null and void the
titles in the name of Carpo and QCDFC.
Carpo filed a motion for reconsideration with the appellate court. In the meantime, by virtue and pursuant to Batas
Pambansa Bldg. 129, or the Judiciary Reorganization Act of 1980, the Court of Appeals was reorganized into the
Intermediate Appellate Court (IAC). As a consequence, there was a re-raffling of cases and the case was assigned
to the Second Special Cases Division which, however, returned the records of the case for another re-raffling to the
Civil Cases Divisions as it deemed itself without authority to act on a civil case in view of the allocation of cases to
the different divisions of the IAC under Section 8 of BP 129. The case was then assigned to the Third Civil Cases
Division, composed of Justices de la Fuente, Coquia, Zosa and Bartolome.
Justices Coquia and Bartolome inhibited themselves, and Justices Camilon and Bidin were assigned to the Third
Civil Cases Division.
On May 2, 1984, the IAC, through its Special Third Civil Cases Division, with Justice Zosa as ponente; concurred in
by Justices Camilon and Bidin, promulgated its Resolution granting Carpo's motion for reconsideration, reversing
and setting aside the decision of December 29, 1982, and affirming the decision of the trial court. Hence, this
petition docketed as G.R. No. 67451.
Petitioners assign the following errors:
I
The SPECIAL THIRD CIVIL CASES DIVISION of the Intermediate Appellate Court (for brevity, referred
to herein as SPECIAL DIVISION) which promulgated the disputed RESOLUTION of May 2, 1984 had
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no legal standing under the provisions of Batas Pambansa Bldg. 129 and, as such, not vested with
jurisdiction and adjudicatory power to pronounce any decision of final resolution for the Court.
II
On the assumption that the SPECIAL DIVISION is legally vested with jurisdiction and adjudicatory
powers under the provisions of BP 129, it decided questions of substance contrary to law and the
applicable decisions of the Supreme Court because:
(a) The SPECIAL DIVISION'S Resolution of May 2, 1984 amounted to a denial to the
Petitioners of their right to appeal and judicial review over fundamental issues of law duly
raised by them in their Petition for Review on certiorari (G.R. No. 56471), as authorized by
the Constitution (Art. X, sec. 5 (2) (e), the provisions of the Judiciary Act of 1948 and Rule
42, Sec. 2 of the Rules of Court; and
(b) By its RESOLUTION of May 2, 1984, it ruled that the decision of the Court of Appeals
could not have gained the nature of a proper and valid judgment as the latter had no
power to pass upon the appealed judgment of the Court of First Instance of Rizal (the
Vera Court), as appeal and not certiorari was the proper remedy;
Furthermore, the said SPECIAL DIVISION grossly departed from the accepted and usual course of
judicial proceedings by giving a perverted and obviously unjustified and illogical interpretation of the
RESOLUTION of July 25, 1983, of the Ninth Division of the Court of Appeals, holding and declaring
that "it has in effect erased or cancelled the validity of (the DECISION of December 29, 1982), when
the said RESOLUTION merely "RESOLVED to return the records of the case ... for re-raffling and
reassignment ... in view of the allocation of cases to the different Divisions of the Intermediate
Appellate Court under Section 8 of BP 129.
III
The SPECIAL DIVISION by confirming the appealed judgment of the lower court in effect sanctioned
the contemptible disregard of law and jurisprudence committed by Judge Vera, which call for an
exercise of the power of supervision;
IV
The SPECIAL DIVISION did state in its RESOLUTION of May 2, 1984 a deliberate falsehood, namely,
that Morris G. Carpo is a purchaser in good faith and for value when there is absolutely no evidence,
whether written or testimonial, that was presented by Carpo, or by anyone else that he was, in fact, a
purchaser for value and in good faith a material matter which was neither alleged nor referred to in
the complaint and in all the pleadings, nor covered by any of the exhibits presented by all of the parties
herein and solely on the bases of which the case at bar was submitted by the parties for consideration
and decision.
1. To support their contention that the Special Third Civil Cases Division of the Intermediate Appellate Court which
promulgated the Resolution of May 2, 1984 had no legal standing under the provisions of BP 129 and, as such, not
vested with jurisdiction and adjudicatory power, petitioners cite Sections 4 and 8 of BP 129, to wit:
Sec. 4. Exercise of powers and functions.The Intermediate Appellate Court shall exercise its powers,
functions and duties, through ten (10) divisions, each composed of five members. The Court may sit en
banc only for the purpose of exercise administrative, ceremonial or other non-adjudicatory functions.
Sec. 8. Grouping of Divisions.Of the ten (10) divisions, of the Court, four (4) divisions, to be known as
Civil case Divisions, shall take cognizance of appeals in civil cases originating from the Regional Trial
Court; two (2) divisions, to be known as Criminal Cases Divisions, of appeals in cases originating from
the Regional Trial Courts; and four (4) divisions, to be known as Special Cases Divisions, of original
actions or petitions, petitions for review, and appeals in all other cases, including those from
administrative agencies, except as provided in Section 9 hereof.
Except with respect to the Presiding Appellate Justice, the appointment of a member of the court
should specifically indicate whether it is for the Civil Cases Divisions, the Criminal Cases Divisions, or
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the Special Cases Divisions of the Court. No member of the Court appointed to any of the three
classes of conclusions shall be assigned to any of the other classes of division except when authorized
by the Supreme Court, upon recommendation of the Intermediate Appellate Court en banc, if the
exigencies of the service so require. . . . (emphasis supplied)
As officially constituted, the Third Civil Cases Division was composed of Justice B.S. de la Fuente, as Chairman,
Justices Jorge Coquia, Mariano Zosa, and Flores Bartolome, as Members. In view, however, of the voluntary
inhibition of Justices Coquia and Bartolome from taking part in the case, Justices Bidin and Camilon were
reassigned to the Third Civil Cases Division to form the Special Third Civil Cases Division.
Petitioners argue that the so-called Special Third Civil Cases Division, not being one of the ten (10) Divisions of the
Court duly vested with jurisdiction, had no adjudicatory powers. It is also alleged that the reassignment of Justices
Bidin and Camilon is violative of the injunction against appointment of an appellate Justice to a class of divisions
other than that to which he is appointed. (Petition, pp. 21-26.)
This contention has no merit. A reading of the law will readily show that what BP 129 prohibits is appointment from
one class of divisions to another class. For instance, a Justice appointed to the Criminal Cases Divisions cannot be
assigned to the Civil Cases Divisions.
Justice Bidin was reassigned from the Fourth Civil Cases Division, while Justice Camilon was reassigned from the
Second Civil Cases Division. The two therefore come from the same class of divisions to which they were
appointed.
Thus, the reassignment of Justices Bidin and Camilon to form the Special Third Civil Cases Division in view of the
voluntary inhibition of two (2) "regular" members, is still within legal bounds. Otherwise, a situation would have
arisen where a regular division could not decide a particular case because some members thereof inhibited
themselves from participating in said case.
2. The second assigned error involves a determination of the correctness of the ruling of the IAC that the CA
Decision of December 29, 1982 could not have gained the nature of a proper and valid judgment (since appeal and
not certiorari was the proper remedy) and that the Resolution of July 25, 1983 had in effect erased or cancelled the
validity of said Decision.
The IAC said in its Resolution of May 2,1984:
Said resolution of July 25, 1983, to Our view, was effectively an acknowledgment by the Division that
promulgated it that the earlier Decision dated December 29, 1983 rendered in a Special Civil Action
case for certiorari, CA-G.R. No. SP-13530, was not appropriate and beyond the authority of the Ninth
Division of the Court of Appeals to promulgate. The said Resolution was actually a statement that the
Ninth Division of the Court of Appeals had over-stepped its bounds by reviewing in certiorari
proceedings a decision in a purely civil case that should have passed through the processes of an
ordinary appeal. We are not aware of any legal doctrine that permits an appellate court to treat a
petition for review on certiorari upon purely questions of law, such as that filed by petitioners herein, as
an ordinary appeal. Neither can we find any legal basis or justification for the election by the appellate
court of the essential requisites then prescribed for the validity of an appeal, such as the submission of
a formal notice of appeal, an appeal bond and approved record on appeal. Without any of these
mandatory requisites, the appeal could not have been deemed perfected and ought to have been
dismissed outright.
The Court does not agree.
There are two modes by which cases decided by the then Courts of First Instance in their original jurisdiction may
be reviewed: (1) an ordinary appeal either to the Supreme Court or to the Court of Appeals, or (2) an appeal on
certiorari to the Supreme Court. To the latter category belong cases in which only errors or questions of law are
involved. Each of these modes have different procedural requirements.
As stated earlier, Realty originally filed a Petition for certiorari with this Court docketed as G.R. No. L-56471
questioning the decision of the Vera Court, and asking that it be allowed to appeal directly to this Court as it was
raising only questions of law. However, this Court referred the case to the Court of Appeals "in aid of its appellate
jurisdiction for proper determination on the merits of the appeal."
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It may thus be observed that even this Court treated the petition first filed as an appeal, and not as a special civil
action for certiorari. After as, a petition for review by certiorari is also a form of appeal. (People v. Resuello L-30165,
August 22, 1969, 69 SCRA 35).
This mode of appeal under Rule 42 is in the form and procedure outlined in Rule 45 which, unlike ordinary appeals,
does not require a notice of appeal, an appeal bond and a record on appeal.
Thus it was error for the IAC to hold that the Decision of the Vera Court "cannot be passed upon anymore in the
Court of Appeals decision because appeal and not certiorari was the proper remedy." Precisely, petitioners brought
the case to this Court on appeal, albeit by way of certiorari.
Respondent Carpo cited authorities holding that certiorari is not a substitute for appeal. Those cases are not in
point. They refer to the special civil action of certiorari under Rule 65, and not to appeal by way of certiorari under
Rule 45.
Similarly, the IAC Special Civil Cases Division erred in interpreting the Resolution dated July 25, 1983 of the Second
Special Cases Division (to which the case was assigned after the reorganization under BP 129) as having "erased
or cancellation" the validity of the Decision of the Ninth Division. A perusal of said Resolution shows that it merely
made clarification about the nature of the case and why it should be reassigned to the Civil Cases Division of the
IAC. There was not the slightest implication that it "erased or cancelled" the validity of the Decision of the Ninth
Division.
Even the IAC Special Third Civil Cases Division impliedly admitted the validity of the Decision of the Ninth Division
when it granted Carpo's motion for reconsideration. It would have been incongruous to grant a motion to reconsider
a decision, reverse and set it aside, if in the first place it did not have any validity. It would have been necessary only
to decide its invalidity.
3. In the third assigned error, Petitioners contend that the Vera Court, and the IAC Special Third Civil Cases
Division, erred in upholding the validity of the title in the name of Carpo and declaring null and void the titles in the
names of Realty and of QCDFC.
The basis of the complaint fired by Carpo, which was the same basis for the of the Vera Court and the IAC Special
Division, is that the Reyes Court had no authority to issue the order of May 21, 1958 directing the issuance of a
decree of registration in favor of Mayuga, predecessor-in-interest of Realty, as it was not sitting as a land registration
court and also because the original records of LRC Case No. 657, Record No. N-29882 were lost and/or destroyed
during World War II and were still pending reconstitution.
Under Act No. 496, Land Registration Act, (1902) as amended by Act No. 2347 (1914), jurisdiction over all
applications for registration of title to and was conferred upon the Courts of First Instance of the respective
provinces in which the land sought to be registered is situated.
Jurisdiction over land registration cases, as in ordinary actions, is acquired upon the filing in court of the application
for registration, and is retained up to the end of the litigation. The issuance of a decree of registration is but a step in
the entire land registration process; and as such, does not constitute a separate proceeding.
In the case at bar, it appears that it was Estanislao Mayuga, father of Dominador Mayuga, predecessor-in-interest of
Realty, who originally filed on June 24, 1927 a registration proceeding docketed as LRC Case No. 657, GLRO
Record No. N-29882 in the Court of First Instance of Rizal to confirm his title over parcels of land described as Lots
1, 2 and 3, Plan Psu-47035. (Lots 2 and 3 the subject of the instant litigation among Carpo, RRealty and QCDFC.)
Case No. 657 was jointly tried with two other cases, LRC Case No. 976, GLRO Record No. 43516 filed by Eduardo
Guico and LRC Case No. 758, GLRO Record No. 33721 filed by Florentino Baltazar, as the three cases involved
Identical parcels of land, and Identical applicants/oppositors.
On August 19, 1935 the CFI-Rizal acting as a land registration court issued a consolidated decision on the three
cases, the dispositive portion of which reads:
En meritos de to do lo expuesto, se ordena el registro de los lotes, 1, 2 y 3 del plans PSU-47035 a
nombre de Estanislao Mayuga, desist oposicion de Florentino Baltazar y Eduardo Guico con respects
a dichos lotes....
On appeal, the above decision of the CFI was affirmed by the Court of Appeals in its decision dated
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November 17, 1939. the dispositive portion of which reads:

Por todas last consideraciones expuestas confirmamos la decision apelada en cuanto adjudica a
Estanislao Mayuga los lotes, 1, 2 y 3 de such piano y que equivalent a lost lotes, 4, 5 y 6 del plano de
Baltazar y 4 y 5 del plans de Guico.
xxx xxx xxx
Guico filed a petition for review on certiorari before this Court, but the petition was dismissed and the Court of
Appeals decision was affirmed (See Guico v. San Pedro, 72 Phil. 415 [1941]).
Before he could secure a decree of registration in his name, Estanislao died.
On May 13, 1958 Dominador Mayuga, son of Estanislao, filed a petition with the Reyes Court docketed as Case No.
2689 alleging that he was the only heir of the deceased Estanislao Mayuga and praying for the issuance of a decree
of registration over the property adjudicated in favor of Estanislao. At this point, it cannot be overemphasized that
the petition filed by Dominador is NOT a distinct and separate proceeding from, but a continuation of, the original
land registration proceedings initiated by Estanislao Mayuga, Florentino Baltazar and Eduardo Guico. In the same
vein, the Reyes Court, as Branch VI of the Court of First Instance of Rizal, was continuing in the exercise of
jurisdiction over the case, which jurisdiction was vested in the CFI-Rizal upon filing of the original applications.
On May 21, 1958 the Reyes Court issued an order granting the petition of Dominador Mayuga and directing the
Commissioner of Land Registration to issue a decree of registration over Lots 1, 2 and 3 of Plan Psu-47035,
substituting therein as registered owner Dominador Mayuga in liue of Estanislao.
Respondent Carpo, however, contends, that since the records of LRC Case No. 657 were not properly
reconstituted, then there was no pending land registration case. And since the Reyes Court was acting without a
pending case, it was acting without jurisdiction. (Respondent Carpo's Memorandum, pp, 2-8.)
He cites the case of Villegas v. Fernando (L-27347, April 29, 1969, 27 SCRA 1119) where this Court said that upon
failure to reconstitute pursuant to law, "the parties are deemed to have waived the effects of the decision rendered in
their favor and their only alternative is to file an action anew for the registration in their names of the lots in
question," citing the case of Ambat v. Director of Lands, (92) Phil. 567 [1953]) and other cases. The basis of said
ruling is Section 29 of Act No. 3110, an Act to provide an adequate procedure for the reconstitution of the records of
pending judicial proceedings and books, documents, and files of the office of the register of deeds, destroyed by fire
or other public calamities, and for other purposes.
However, the Ambat case, in so far as it ruled on the effect of failure to reconstitute records on the status of the case
in its entirety, was modified in the case of Nacua v. de Beltran, (93) Phil. 595 [1953]). where this Court said:
(W)e are inclined to modify the ruling (in the Ambat case) in the sense that Section 29 of Act No. 3110
should be applied only where the records in the Court of First Instance as well as in the appellate court
were destroyed or lost and were not reconstituted, but not where the records of the Court of First
Instance are intact and complete, and only the records in the appellate court were lost or destroyed,
and were not reconstituted. One reason for this view is that section 29 of Act 3110 is found among the
sections and provisions dealing with the reconstitution of records in the Court of First Instance in
pending civil cases, special proceedings, cadastral cases and criminal cases. A study of Act (No.) 3110
... who show that there are separate procedures for the reconstitution of records in the Justice of the
Peace Courts, from Sec. 48 to Sec. 53; for the reconstitution of records in the Supreme Court, now
including the Court of Appeals, from Sec. 54 to Sec. 74; for the reconstitution of records in the office of
the Register of Deeds, from Sec. 75 to Sec. 90 and for the reconstitution of destroyed records in the
Courts of First Instance, from Sec. 1 to Sec. 47, under which sections, Sec. 29 is obviously
comprehended.
The whole theory of reconstitution is to reproduce or replace records lost or destroyed so that said
records may be complete and court proceedings may continue from the point or stage where said
proceedings stopped due to the loss of the records. The law contemplates different stages for purposes
of reconstitution. . . .
. . . (S)ection 4 covers the stage were a civil case was pending trial in the Court of First
Instance at the time the record was destroyed or lost; section 6 evidently refers to the
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stage where the case had been tried and decided but was still pending in the Court of First
Instance at the time the record was destroyed or lost; section 6 covers the stage where
the case was pending in the Supreme Court (or Court of Appeals) at the time the record
was destroyed or lost. *
If the records up to a certain point or stage are lost and they are not reconstituted, the parties and the
court should go back to the next preceding age where records are available, but not beyond that;
otherwise to ignore and go beyond the stage next preceding would be voiding and unnecessarily
ignoring proceedings which are duly recorded and documented, to the great prejudice not only of the
parties and their witnesses, but also of the court which must again perforce admit pleadings, rule upon
them and then try the case and decide it anew,-all of these, when the records up to said point or stage
are intact and complete, and uncontroverted.
xxx xxx xxx
. . . (T)o require the parties to file their action anew and incur the expenses and (suffer) the annoyance
and vexation incident to the filing of pleadings and the conduct of hearings, aside from the possibility
that some of the witnesses may have died or left the jurisdiction, and also to require the court to again
rule on the pleadings and hear the witnesses and then decide the case, when an along and all the time
the record of the former pleadings of the trial and evidence and decision are there and are not
disputed, all this would appear to be not exactly logical or reasonable, or fair and just to the parties,
including the trial court which has not committed any negligence or fault at all.
The ruling in Nacua is more in keeping with the spirit and intention of the reconstitution law. As stated therein, "Act
3110 was not promulgated to penalize people for failure to observe or invoke its provisions. It contains no penal
sanction. It was enacted rather to aid and benefit litigants, so that when court records are destroyed at any stage of
judicial proceedings, instead of instituting a new case and starting all over again, they may reconstitute the records
lost and continue the case. If they fail to ask for reconstitution, the worst that can happen to them is that they lose
the advantages provided by the reconstitution law" (e.g. having the case at the stage when the records were
destroyed).
Applying the doctrine in the Nacua decision to LRC Case No. 657, the parties thereto did not have to commence a
new action but only had to go back to the preceding stage where records are available. The land registration case
itself re. mained pending and the Court of First Instance of Rizal continued to have jurisdiction over it.
The records were destroyed at that stage of the case when an that remained to be done was the ministerial duty of
the Land Registration Office to issue a decree of registration (which would be the basis for the issuance of an
Original Certificate of Title) to implement a judgment which had become final (See Government v. Abural, 39 Phil.
996 [1919] at 1002; Sta. Ana v. Menla, 111 Phil. 947 [1961], 1 SCRA 1294; Heirs of Cristobal Marcos v. De Banuvar,
134 Phil. 257 [1968], 26 SCRA 316). There are however authentic copies of the decisions of the CFI and the Court
of Appeals adjudicating Lots 1, 2 and 3 of Plan Psu-47035 to Estanislao Mayuga. Moreover, there is an official
report of the decision of this Court affirming both the CFI and the CA decisions. A final order of adjudication forms
the basis for the issuance of a decree of registration.
Considering that the Reyes court was actually in the exercise of its jurisdiction as a land registration court when it
issued the order directing the issuance of a decree of registration, "substituting therein as registered owner
Dominador Mayuga, in hue of the original adjudicates, Estanislao Mayuga, based on the affidavit of selfadjudication, subject to the provisions of Sec. 4, Rule 74 of the Rules of Court," which order is in consonance with
the ruling of this Court in the Guico decision, and the decisions of the CFI-Rizal and the CA dated August 19, 1935
and November 17, 1939, respectively, We uphold the validity of said order and rule that Judge Vera was without
jurisdiction to set it aside.
4. In upholding the title of Carpo as against those of Realty and QCDFC, the Special Division also relied on Carpo's
being an innocent purchaser for value.
Whether or not Carpo is an innocent purchaser for value was never raised as an issue in the trial court. A perusal of
the records of the case reveals that no factual basis exists to support such a conclusion. Even Carpo himself cites
no factual proof of his being an innocent purchaser for value. He merely relies on the presumption of good faith
under Article 527 of the Civil Code.

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It is settled that one is considered an innocent purchaser for value only if, relying on the certificate of title, he bought
the property from the registered owner, "without notice that some other person has a right to, or interest in, such
property and pays a full and fair price for the same, at the time of such purchase, or before he has notice of the
claim or interest of some other persons in the property." (Cui v. Henson, 51 Phil. 606 [1928], Fule v. De Legare, 117
Phil. 367 [1963], 7 SCRA 351.) He is not required to explore farther than what the Torrens title upon its face
indicates. (Fule v. De Legare supra.)
Carpo bought the disputed property from the Baltazars, the original registered owners, by virtue of a deed executed
before Iluminada Figueroa, Notary Public of Manila dated October 9, 1970. However, it was only later, on October
13, 1970, that the decree of registration in favor of the Baltazars was transcribed in the Registration Book for the
Province of Rizal and that an Original Certificate of Title was issued. It was on the same day, October 13, 1970, that
the deed evidencing the sale between the Baltazars and Carpo was inscribed in the Registry of Property, and the
Original Certificate of Title was cancelled as Transfer Certificate of Title No. 303961 in the name of Carpo was
issued. (Exhibit 12, Rollo pp. 270-273.)
Thus, at the time of sale there was as yet no Torrens title which Carpo could have relied upon so that he may qualify
as an innocent purchaser for value. Not being a purchaser for value and in good faith, he is in no better position than
his predecessors-in-interest.
The Baltazars, predecessors-in-interest of Carpo are heirs of Florentino Baltazar, an oppositor in the original
application filed by Estanislao Mayuga in 1927. As stated earlier, the CFI-Rizal confirmed the title of Estanislao to
Lots 1, 2 and 3 of Plan Psu-47035 "desestimando oposicion de Florentino Baltazar . . . con respeto a dichos lotes . .
." As such successors of Florentino, they could not pretend ignorance of the land registration proceedings over the
disputed parcels of land earlier initiated by Eduardo Guico, Florentino Baltazar and Estanislao Mayuga, as when as
the decisions rendered therein.
Moreover, it is not disputed that the title in the name of Dominador Mayuga, from whom Realty derived its title, was
issued in 1958, or twelve years before the issuance of the title in the name of the Baltazars in 1970.
In this jurisdiction, it is settled that "(t)he general rule is that in the case of two certificates of title, purporting to
include the same land, the earlier in date prevails . . . . In successive registrations, where more than one certificate
is issued in respect of a particular estate or interest in land, the person claiming under the prior certificate is entitled
to the estate or interest; and that person is deemed to hold under the prior certificate who is the holder of, or whose
claim is derived directly or indirectly from the person who was the holder of the earliest certificate issued in respect
thereof . . . ." (Legarda and Prieto v. Saleeby, 31 Phil. 590 [1915] at 595-596; Garcia V. CA, Nos. L-48971 and
49011, January 22, 1980, 95 SCRA 380.)
TCT No. 20408 derived from OCT 1609, is therefore superior to TCT No. 303961 derived from OCT 8629.
5. For its part, respondent Quezon City Development and Financing Corporation (QCDFC) alleges that it has been
improperly impleaded as thirty-party defendant inasmuch as Realty's alleged cause of action against it is neither for
contribution, indemnity, subrogation or any other relief in respect of Carpo's claim against Realty. It likewise alleges
that Realty had no cause of action against it since the third party complaint did not allege that QCDFC violated any
legal right of Realty, QCDFC also assails the Vera Court decision in that it declares QCDFC directly liable to Carpo
and not to Realty.
In the first place, QCDFC did not appeal from the decision of the Vera Court, nor from the decision of the Court of
Appeals dated December 29, 1982, nor from the resolution of the IAC Special Third Civil Cases Division dated May
2, 1984 all of which voided QCDFCs title to the disputed property. Hence, said decisions/resolution have become
final and executory as regards QCDFC.
Moreover, even as this Court agrees with QCDFC that the third-party complaint filed against it by Realty was
procedurally defective in that the relief being sought by the latter from the former is not in respect of Carpo's claim,
policy considerations and the factual circumstances of the case compel this Court now to rule as well on QCDFC's
claim to the disputed property. ** To rule on QCDFC's claim now is to avoid multiplicity of suits and to put to rest these conflicting claims over the
property. After an, QCDFC was afforded fun opportunity, and exercised its right, to prove its claim over the land. It presented documentary as well as testimonial
evidence. It was even permitted to file a fourth-party complaint which, however, was dismissed since it failed to prosecute its case.

QCDFC derived its title from Carmelino Alvendia et. al., the original registered owners. Original Certificate of Title
No. 8931 in the name of Spouses Carmelino Alvendia, et. al. was issued on July 27, 1971, or thirteen (13) years
after the issuance of Mayuga's title in 1958.
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Since Realty is claiming under TCT No. 1609 which was issued earlier than OCT No. 8931 from which QCDFC's
title was derived, Realty's title must prevail over that of QCDFC.
6. During the pendency of this case, Petitioners filed a manifestation alleging that the case at bar is closely
connected with G.R. No. L-469953, Jose N. Mayuga et. al. v. The Court of Appeals, Macondray Farms, Inc., Realty
Sales Enterprise, inc., et. al. and moved for consolidation of the two cases involving as they do the same property.
By Resolution of August 29, 1984, this Court denied the motion for consolidation.
In this connection, it must be emphasized that the action filed by Carpo against Realty is in the nature of an action to
remove clouds from title to real property. By asserting its own title to the property in question and asking that Carpo's
title be declared null and void instead, and by filing the third-party complaint against QCDFC, Realty was similarly
asking the court to remove clouds from its own title. Actions of such nature are governed by Articles 476 to 481,
Quieting of Title, Civil Code (Republic Act No. 386), and Rule 64, Declaratory Relief and Similar Remedies, Rules of
Court.
Suits to quiet title are not technically suits in rem, nor are they, strictly speaking, in personam, but being against the
person in respect of the res, these proceedings are characterized as quasi in rem. (McDaniel v. McElvy, 108 So. 820
[1926].) The judgment in such proceedings is conclusive only between the parties. (Sandejas v. Robles, 81 Phil. 421
[1948]).
The ruling in this case is therefore without any prejudice to this Court's final determination of G.R. No. L-46953.
WHEREFORE, the Resolution of May 2,1984 of the Intermediate Appellate Court and the Decision of January 20,
1981 of the CFI-Rizal Branch XXIII, are SET ASIDE and the Decision of December 29, 1982 of the Court of Appeals
is AFFIRMED.
SO ORDERED.
Fernan and Feliciano, JJ., concur.
Gutierrez, Jr. and Bidin, JJ., took no part.

Footnotes
* Section 65 covers the stage where the decision of the Supreme Court on the case had become final
but something has still to be done on the case, e.g. execution.
** See Balbastro, et. al. v. CA, No. L-33255, November 29, 1972, 48 SCRA 231, and Rubio v. Mariano,
L-30403, January 31, 1973, 49 SCRA 319, where this Court glossed over procedural technicalities to
do substantial justice.
The Lawphil Project - Arellano Law Foundation

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