Barstowe Philippines Corporation vs.
Republic  The RTC also ordered BPC to comply with its contract with ERDC
Chico-Nazario
 Petitioner and respondent have conflicting titles to parcels of land location
in Payatas, Quezon City.
 Petitioner traces its title from Servando Accibal who at the time held the
TCTs for the lots. Despite the fact that Servando had earlier sold it to his
son Antonio Accibal, Servando sold the lots to petitioner BPC in exchange
of 51% of the Capital stock of BPC.
o Antonio likewise conveyed the property to BPC years after his
father did. This was after a fire razed the Office of the Register of
Deeds, and the reconstitution of the titles.
 Respondent traces its title to First Philippines Holdings Corporation (FPHC)
which also held TCTs over the subject lots, albeit issued 5 years later than
Servando’s TCTs. FPHC sold the lots to respondent. When a fire razed the
Office of the Register of Deeds, respondent applied for administrative
reconstitution. That was when respondent came to know about
petitioner’s title over the lots.
 Respondent filed a petition for cancellation of title against the Accibals and
BPC before the RTC. Meanwhile, BPC was allowed by the court to continue
its developments on the property.
RTC proceedings
 EL-VI Realty Dev’t Co (ERDC) intervened, claiming that it entered into a
joint venture agreement with petitioner to develop the property. ERDC is
praying for that should petitioner’s title be infirm, petitioner should be
required to reimburse ERDC for the expenses it has incurred pursuant to
the joint venture agreement
 Furthermore, the RTC ruled that both petitioner and respondent are
buyers in good faith. However, petitioner’s claim should prevail based on
the following
o The titles of petitioner’s predecessor pre-dated that of
respondent’s (1974 for petitioner, 1979 for respondent)
o Moreover, petitioner’s predecessor had been in the actual
possession of the lots. Respondent never took assertive steps to
take possession so much so that it was eventually overrun by
squatters.
 Notably, the RTC agreed with the LRA that the Accibal’s title was issued
irregularly (see end of digest). The RTC concluded that Servando Accibal’s
titles “must be cancelled” but that “the cancellation of the title of
Servando Accibal would not affect the rights and interests of BPC as the
latter is declared to be a purchaser in good faith and for value”
 The RTC considered the admissions and agreements of the parties during
the pre-trial conference as a compromise agreement.
Execution and Levy
 ERDC obtained a Writ of Execution and the subject lots were levied.
Petitioner offered 40 developed subdivision lots as security instead.
Despite ERDC’s unwillingness to this change in security, the RTC found that
petitioner had already substantially complied with the terms of its
agreement with ERDC.
o The RTC lifted the levy
Contempt and another Intervenor
 ERDC later on filed a Motion for Contempt claiming that petitioner sold 36
of the 40 lots in question. “Unfortunately, the records no longer show the
succeeding incidents concerning these motions.”
 Kadakilaan Estate filed a Motion for Leave to Intervene, claiming that ever
since 1891, the land was already registered as private property under
Spanish Law, and had been registered under the Torrens System since
1907 by Kadakilaan’s predecessors.
o The RTC denied the Motion, saying that Kadakilaan is in effect
collaterally attacking a title registered under the Torrens System.
Kadakilaan must file a separate action.
Court of Appeals
 Respondent filed a Notice of Appeal of the RTC decision.
o This was denied by the RTC on the ground that during the
hearings and pre-trial conference, there were judicial admissions
and acquiescence on the part of respondent, which were in the
nature of a compromise agreement.
o Respondent filed a Petition for Certiorari and Mandamus of the
denial of the Notice of Appeal with the CA. The CA agreed with
respondent that there was no compromise agreement as there
was neither explicit agreement nor any reciprocal concession with
an end in view of terminating the litigation.
o The denial of the Notice of Appeal reached the SC which agreed
with the CA.
 Appeal from the RTC was finally allowed. The CA favored the Republic,
ruling that it has indefeasible title to the properties.
Intervenors before the SC
 Nicolas – contends that she is a buyer in good faith of one of the 36
subdivision lots initially used as security but which were instead sol, relying
on the TCTs of petitioner she inspected at the Register of Deeds, and on
petitioner’s authorization from the LRA and HLURB to sell these lots.
  Abesamis – another buyer of one of the subdivision lots. o They even confirmed petitioner’s license with HLURB
 Sps. Santiago – they do business as ACS trading which has a contract with o Moreover, to order the cancellation of all these derivative titles
one of the construction companies petitioner hired to develop the lots. shall “wreak havoc on the Torrens System”
They claim to have relied upon the TCTs, and the HLURB license. Decision – respondent’s recourse; Sps. Santiago’s recourse
 Only Nicolas and Abesamis were allowed to intervene. Petitioner did not  Respondent may claim damages from petitioner for the sold lots as the
oppose Nicolas’s and Abesamis’s Motion to Intervene, but opposed that of latter is not a buyer in good faith. Respondent may claim the purchase
the Sps. Santiago price it paid plus 6% interest per annum
 Respondent, as to the 4/40 lots unsold may either (1) recover such lots and
Issue demand the demolition of improvements at petitioner’s expense, or (2)
 Who among petitioner, respondent, the intervenors, or Servando’s heirs compel petitioner to pay for the lots
have superior title to the subject lots?  Sps. Santiago’s allegations of good faith as claimed in their motion to
 What is the respondent’s recourse? intervene are factual matters best proven and established before a trial
court.
Decision – intervenors have superior title
 The Supreme Court concurred with the factual findings of the LRA, holding
that it is indubitable that the TCTs of respondent are valid, while those of
Servando are not. Irregularities found by the LRA in Servando’s title
 BPC is not an innocent purchaser for value  Servando’s lawyer, upon the LRA’s demand, failed to give the LRA a copy of
o Remember that Servando initially sold the property to his son documents to support the issuance of the TCTs Servando held.
Antonio prior to conveying it to petitioner.  The forms on which the TCTs were printed on were genuine but the
o Also, when the Quezon City Register of Deeds caught on fire, the signature of the Register of Deeds Official found therein was forged. The
TCTs of Servando presumably burned down as well. The fire was person whose signature was forged refuted the signatures found on the
in 1988 and the reconstitution was made in December 1990. TCTs.
Meanwhile, the Deeds of Conveyance from Servando and Antonio  Incumbent Register of Deeds registers believed that these were spurious.
were in 1989 and in early 1990. What title would petitioner have  The NBI concluded that the handwriting was forged, not just the signature.
to rely on, if the conveyance was after the fire but before
reconstitution?
o While reconstituted titles have the same validity and legal effect
as originals, this only holds true when it is judiciall reconstituted
and not administratively. The fact that the TCTs were
administratively reconstituted should have prompted petitioner
to make inquiries as to their title
o Lastly, it looks like they weren’t sold for value. Petitioner’s capital
stock was only 1 million pesos, while the property was worth 6-12
million
 Nicolas and Abesamis are innocent purchasers for value.
o Forged instruments, while void, may be the root of a good title so
that a registered owner who relied on it bona fide and has taken it
for value is not affected by the forgery.
o With the cancellation of the reconstituted TCTs (upon conveyance
from Servando to petitioner), new TCTs were issued without
irregularities on their face. These are what these intervenors
relied upon.