G.R. No. L-45168 September 25, 1979 DIRECTOR OF LANDS, petitioner, vs. COURT OF APPEALS, ET AL.

, respondents, GREENFIELD DEVELOPMENT CORP., intervenor, ALABANG DEVELOPMENT CORPORATION and RAMON D. BAGATSING, intervenors. RESOLUTION

GUERRERO, J.: Two motions for leave of court to intervene in the above entitled case are before Us, the first by Greenfield Development Corporation, claiming to be the registered owner of seven (7) parcels of land adjoining that of private respondent, situated in the Barrio of Cupang, Municipality of Muntinlupa, Province of Rizal (now portion of Metro Manila), with an aggregate area of 783,367 square meters with TCT Nos. 366292, S-38660, S-38661, S-43229, 43230 and 93980 in the name of the movant, which land was originally registered on September 20, 1913 in the registration book of the Office of the Register of Deeds of Rizal, Vol. A-7, page 84, as Original Certificate of Title No. 684, pursuant to Decree No. 4552 issued on August 27, 1910 in the name of the "Government of the Phil. Island" covering and embracing the land otherwise known as the "Muntinlupa Estate." Movant alleges that upon comparison of the technical descriptions set forth in TCT No. 42449 sought to be reconstituted by the private respondent Demetria Sta. Maria Vda. de Bernal consisting of two parcels of land located in Barrio San Dionisio, Paranaque Rizal with an aggregate area of 143 hectares, more or less, and designated as Lots 1 and 3 of Plan 11-4374, with those described in the certificates of title of the movant, it appears that the land supposedly covered by the certificate sought to be reconstituted overlapped and included substantial portions of movant's land, the location and extent of the overlapping having been platted on the basis of the respective technical descriptions referred to in the plan marked Annex 8 attached to the motion; that movant therefore claims a substantial, material, proprietary and legal interest in the subject matter of the instant petition which will directly and adversely affect the petition for reconstitution of the respondent. Movant also alleges that among those overlapped by and adjacent to the land supposedly covered by the title to be reconstituted aside from the movant are the residences within the Alabang Hills Subdivision, Cielito Homes Subdivision, Tahanan Village, portion of the South Super Highway, Meralco Substation, factories as well as roads and infrastructures which respondent allegedly omitted to name and to give notice of her petition for reconstitution. It is further contended that if re-constitution is granted, other title holders and possessors overlapped by the land covered by the title sought to be reconstituted stand to be deprived of their property rights and that greater injury shall be inflicted to the Torrens system of registration for there will be two holders of certificates of title overlapping each other thereby negating the very purpose of the Torrens

system and imperiling the indefeasibility and stability of the same such that when this happens "the chaos that it will create will be unimaginable." The second motion for intervention filed by Alabang Development Corporation and Ramon D. Bagatsing likewise prays for leave of court to intervene on substantially the same grounds: I. That the Honorable Court a quo has no jurisdiction to grant the petition for reconstitution; II. That granting arguendo, that the title sought to be reconstituted is valid which it is not, the same cannot prevail over the earlier title of herein intervenors or their predecessors-in- interest; and III. That intervenors stand to be divested of their property and thereby suffer special, immediate, direct and irreparable injury in their proprietary rights if reconstitution is granted. These second movants allege that they are the registered owners of parcels of land located at Cupang, Muntinlupa, Metro Manila covered and evidenced by Transfer Certificates of Title issued by the Register of Deeds of the Province of Rizal which were transfers from Original Certificate, of Title No. 684 registered in the name of "The Government of the Phil. Islands" originally registered on Sept. 20, 1913, per survey in 1907 pursuant to Decree No. 4552 issued on August 27, 1910; that being registered owners and persons in actual possession and as adjoining owners they were not personally notified of the petition for reconstitution and that copies of the notices of hearing were not posted on Lots 1 and 3 of the respondent before the hearing as required by the trial court so that if reconstitution will be carried out, they stand to be divested of their property by the overlapping of the area of the title sought to be reconstituted on the land owned and actually in the possession of the movants and their successors-in-.interest, which overlapping are shown in the certified plans, Annexes 1 and 2 of the motion. Movants further allege that a portion of the land in dispute was covered by TCT No. 45397 (Lot 398-B) and 45398 (Lot 398A) in the name of movant Ramon D. Bagatsing and Toribio G. Reyes with an area of 815,317 sq. meters and 201,591 sq. meters. respectively, the same being transfers from TCT No. 14812 in the name of Toribio G. Reyes which in turn was a transfer from OCT No. 684 in the name of "The Government of the Phil. Islands" originally registered on Sept. 20, 1913 pursuant to Decree No. 4552 issued on August 27, 1910; that subsequent transfers by movant Ramon D. Bagatsing of portions of the land were made to Meralco, to Alabang Development Corporation which in turn sold to some 36 innocent purchasers for value in the Alabang Hills Subdivision. It is also averred that movant Alabang Development Corporation obtained from the Court of First instance of Rizal, Branch XIII an order dated April 19, 1969 for the issuance of certificates of title numbering 92 titles over said parcels of land now surrounded by a high perimeter wall on its boundaries which were sold to innocent purchasers in good faith for valuable consideration who were not personally notified of the pendency of the reconstitution case not only as adjoining owners but as actual possessors thereof . Private respondent separately opposed both motions, the, first motion on the ground that the supposed TOTs of the intervenor are of the 1972 vintage so that if same are true that titles are the ones that overlap that of private respondent which was procured as early as November 13, 1942 and that of her

mother-predecessor issued on Sept. 29, 1942; that the motion to intervene constitutes a mere annoyance tending merely to derail and delay the proceedings; that petitioner is guilty of laches and that to grant the motion after trial and judgment rendered comes out of time as an abuse of judicial discretion and that whatever interest or right movants are supposed to have may be fully protected by a separate proceeding. Before resolving both motions for intervention, a brief recital of the antecedent facts is necessary. In an amended petition filed on November 12, 1970 before the Court of First Instance of Rizal, private respondent Demetria Sta. Maria Vda. de Bernal sought the reconstitution of her Transfer Certificate of Title No. 42449 of the Registry of Deeds of Rizal alleged to have been lost or destroyed during the last war, covering two parcels of land described as follows: (a) Lot 1 of plan II-4374 situated in the Barrio of San Dionisio, Municipality of Paranaque (now Muntinlupa), Province of Rizal, with an aggregate area of 717,523 sq. m., and (b) Lot 3 of plan II-4374 situated in the Barrio of San Dionisio, Municipality of Paranaque, Province of Rizal, with an aggregate area of 717,539 sq. m. Presented as the basic source of the title sought to be reconstituted was the owner's duplicate of Transfer Certificate of Title No. T-42449 issued in the name of herein private respondent. Opposition to the petition for reconstitution was filed by the Director of Lands, Pedro de la Pena Leodegario R. Alba, Jr., Angel Cruz, Aurora Favila, Democrito R. Favila and Eufracia R. Favila some of whom withdrew or never appeared or abandoned their claims and after trial, the Court of First Instance of Rizal on November 19, 1973 denied the petition for reconstitution of Transfer Certificate of Title No. T-42449 for insufficiency of evidence. Private respondent moved for reconsideration of the Order, or in the alternative, for the vacation thereof and for a new trial on the ground of newly discovered evidence. The motion for new trial was granted. After the hearing on the newly discovered evidence, the court issued on September 18, 1974 an Order again denying reconstitution of private respondent's original Transfer Certificate of Title No. T-42449, declaring that "(T)he Court still entertains doubt as to the authenticity and genuineness of Transfer Certificate of Title No. 42449 (Exhibit C) which is sought to be reconstituted." On appeal to the respondent Court of Appeals 1 filed by private respondent, the same court in its decision promulgated on October 1, 1976 reversed the appealed Orders. On October 21, 1976, the remaining oppositor, the Director of Lands, thru the Office of the Solicitor General, filed with the respondent court a Motion for New Period to File Motion for Reconsideration alleging excusable negligence on his part for his failure to file an extension of the period within which to file a motion for reconsideration, to which herein private respondent filed her Opposition. On November 2, 1976, without waiting for the resolution of the above motion, the Director of Lands filed a Motion to Admit Motion for Reconsideration attaching thereto his Motion for Reconsideration dated October 1, 1976. Opposition thereto was likewise filed by herein private respondent. On November 11, 1976, respondent Court issued its Resolution denying herein petitioner's motions on the ground that the decision sought to be reconsidered had become final and executory.

Hence, the petition at bar filed by the Director of Lands which was given due course by this Court in the Resolution dated April 22,1977. On June 14, 1978, the case was submitted for decision. Thereafter, the herein two motions to intervene were separately filed on December 7, 1978 and December 29, 1978. Rule 12, Section 2 of the Rules of Court provides the procedure for intervention. According to Section 2 thereof, which reads: Sec. 2. Intervention. - A person may, before or during a trial, be permitted by the court, in its discretion, to intervene in an action, if he has legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or when he is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof. It is quite clear and patent that the motions for intervention filed by the movants at this stage of the proceedings where trial has already been concluded, a judgment thereon had been promulgated in favor of private respondent and on appeal by the losing party, the Director of Lands, the same was affirmed by the Court of Appeals and the instant petition for certiorari to review said judgment is already submitted for decision by the Supreme Court, are obviously and manifestly late, beyond the period prescribed under the aforecoded Section 2, Rule 12 of the Rules of Court. But Rule 12 of the Rules of Court like all other Rules therein promulgated, is simply a rule of procedure, the whole purpose and object of which is to make the powers of the Court fully and completely available for justice. The purpose of procedure is not to thwart justice. Its proper aim is to facilitate the application of justice to the rival claims of contending parties. It was created not to hinder and delay but to facilitate and promote the administration of justice. It does not constitute the thing itself which courts are always striving to secure to litigants. It is designed as the means best adopted to obtain that thing. In other words, it is a means to an end. 2 The denial of the motions for intervention arising from the strict application of the Rule due to alleged lack of notice to, or the alleged failure of, movants to act seasonably will lead the Court to commit an act of injustice to the movants, to their successors-in-interest and to all purchasers for value and in good faith and thereby open the door to fraud, falsehood and misrepresentation should intervenors' claims be proven to be true. For it cannot be gainsaid that if the petition for reconstitution is finally granted, the chaos and confusion arising from a situation where the certificates of title of the movants covering large areas of land overlap or incroach on properties the title to which is being sought to be reconstituted by private respondent, who herself indicates in her Opposition that, according to the Director of Lands, the overlapping embraces some 87 hectares only, is certain and inevitable. The aggregate area of the property claimed by respondent covering Lot 1 and Lot 2 is 1,435,062 sq. meters which is situated in a fast-growing, highly residential sector of Metro Manila where growth and development are in rapid progress to meet the demands of an urbanized, exploding population. Industries, factories, warehouses, plants, and other commercial infrastructures are rising and spreading with the area and the owners of these lands and the valuable improvements thereon will not simply fold

their hands but certainly will seek judicial protection of their property rights or may even take the law into their own hands, resulting to multiplicity of suits. This Tribunal can take judicial notice of innumerable litigations and legal controversies spawned by overlapping and encroaching boundaries, each party relying on certificates of titles issued under the Torrens System or the Spanish registration laws or other deeds and documents which prima facie show their lawful interests or ownership therein. To the ordinary land purchaser not fully acquainted with the intricacies of the law nor the validity much less the authenticity of these instruments which in many instances are found to be forged or simply reconstituted with areas that have increased in "table surveys" with the cooperation of unscrupulous officials, the courts by hastily stamping their approval on reconstituted titles have wittingly and unwittinglly aided and abetted these fraudulent transactions resulting in the wiping out of the lifesavings of many a poor, unlettered and inexperienced lot buyer. The court must guard against such haste and carefully take due precautions that the public interest be protected. In the case at bar, the sprawling area of the property in question where various subdivisions., residential houses and homes and infrastructures have mushroomed and the great number of people living or having proprietary rights and interests in such a vast property would certainly bring about the swamping of the courts and the clogging of their dockets with cases involving not only the original parties and the movants but also their successors-in-interest. This litigation will have no end, which this Court will not allow nor tolerate. But over and above these considerations and circumstances which We have pointed out, there is the basic and fundamental requirement under the Rules of Court, Section 7, Rule 3, that "Parties in interest without whom no final determination can be had of an action shall be joined either as plaintiffs or defendants," The joinder of indispensable parties is compulsory, under any and all conditions, their presence being a sine qua non of the exercise of judicial power. 3 The herein movants, Greenfield Development Corporation, Alabang Development Corporation, Ramon D. Bagatsing, and all buyers from them, at least those with ostensible proprietary interests as the MERALCO, Alabang Hills Subdivision, Cielito Homes Subdivision, Tahanan Village, the Ministry of Highways insofar as the South Super Highway is affected, are indispensable parties to these proceedings as it has been shown affirmatively that they have such an interest in the controversy or subject matter that a final adjudication cannot be made, in their absence, without injuring or affecting such interest. The joinder must be ordered in order to prevent multiplicity of suits, so that the whole matter in dispute may be determined once and for all in one litigation. 4 The evident aim and intent of the Rules regarding the joinder of indispensable and necessary parties is a complete determination of all possible issues, not only between the parties themselves but also as regards to other persons who may be affected by the judgment. 5 A valid judgment cannot seven be rendered where there is want of indispensable parties. 6 We agree with the movants that the indefeasibility and stability of the Torrens System wig be imperiled should reconstitution be granted, resulting into two holders of certificates of title to areas that overlap each other. And where the overlapping area embraces 87 hectares or 870,000 sq. meters as alleged, it

becomes essential and imperative to preserve the efficacy and integrity of our registration system. This aspect of the case which commands the joinder of indispensable parties to allow them to uphold their interests based upon the Torrens titles they hold overrides any question of late intervention. The crux of the matter, however, lies in ascertaining whether there really is overlapping of boundaries of the properties of the movants for intervention and that of the private respondent. As We scrutinize carefully the claim of each party based on survey readings and plattings appearing on the plans submitted as annexes, We find that the same have not passed the rigid test of accuracy and authenticity as should be determined by precision instruments duly verified by accredited surveyors. Indeed, each claim may appear to be as good and self-serving as the other. And since the Supreme Court is not a trier of facts, the veracity and correctness of the alleged overlapping is better left to those scientifically qualified, trained and experienced and whose integrity is beyond question and dispute. PREMISES CONSIDERED, in view of the higher and greater interest of the public and in order to administer justice consistent with a just, speedy and inexpensive determination of the respective claims of the parties and their numerous successors-in-interest, the motions for intervention are hereby granted. The Court directs the Chief of the Survey Division of the Bureau of Lands or his duly authorized representative with due notice to the parties and in their presence or that of their duly authorized representatives to conduct a relocation of the respective boundaries of the properties claimed by the movants and the private respondent within 90 days after notice and his fees shag be borne equally by the parties and thereafter to submit to this Court the result of such relocation survey, indicating therein such overlapping as he may have found and determined and the location of such industries, factories, warehouses, plants and other commercial infrastructures, residential buildings and other constructions, public or private roads, and other landmarks found within the areas concerned. SO ORDERED. Teehankee, Actg. C.J, (Chairman), Fernandez, De Castro and Melencio-Herrera, JJ., concur. Makasiar, J., is on leave.

-------

FEDERATED REALTY CORPORATION, Petitioner,

G.R. No. 127967

Present:

- versus PUNO, J., Chairman, Hon. COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES, through the Commanding General of the Armed Forces of the Philippines Visayas Command (AFP-VISCOM), Respondents. AUSTRIA-MARTINEZ, CALLEJO, SR., TINGA, and CHICO-NAZARIO, JJ.

Promulgated:

December 14, 2005

x------------------------------------------------------------------x

DECISION

Tinga, J.:

Eminent domain is one of the fundamental powers inherent to the State as a sovereign. It is the authority and right of the State to take private property for public use upon observance of due process of law and payment of just compensation.[1] Any arm of the State that exercises such power must wield the same with circumspection and utmost regard for procedural requirements.[2]

This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by Federated Realty Corporation (FRC) against the Republic of the Philippines through the Armed Forces of the PhilippinesVisayas Command (AFP-VISCOMM) and several of its men.[3]

The operative facts, together with a historical background of the property involved, follow. Knowing the history of the property is essential to understanding the case.

Petitioner FRC is the registered owner of a 543-square meter lot in Apas, Lahug, Cebu City, covered by Transfer Certificate of Title (TCT) No. 119929 of the Registry of Deeds of Cebu City. The lot adjoins a military reservation, Camp Lapu-Lapu, where the Command Headquarters of the Armed Forces of the Philippines-Visayas Command (AFP-VISCOMM) is situated.

The lot in question used to be a portion of Lot No. 933 containing an area of 37,126 square meters and formed part of the Banilad Friar Lands Estate. In 1932, Lot No. 933 was registered in the names of Francisco Racaza, Pantaleon Cabrera and Josefina Martinez per TCT No. RT 2533 (T-13) issued on 30 August 1932.

Sometime in 1938, Lot No. 933 was one of 18 lots subjected to expropriation proceedings by the government before the Court of First Instance (CFI) of Cebu in the case entitled Commonwealth of the Philippines v. Borromeo, et al. (Commonwealth case), docketed as Civil Case No. 781, for the purpose of establishing a military reservation.[4] Pursuant to the CFI Order dated 19 October 1938, the Republic deposited P9,500.00 with the Philippine National Bank as a precondition for entry to the lots sought to be expropriated.

On 14 May 1940, the CFI rendered a Decision[5] condemning Lot No. 933 along with the 17 other adjacent lots of the Banilad Friar Lands Estate in favor of the Republic. In 1947, the whole military reservation was converted into a national airport by virtue of a Presidential Proclamation and, by virtue thereof, turned over to the National Airports Corporation.

The Decision in the Commonwealth case notwithstanding, the legal ownership of the expropriated lands was mired in controversy. This Court has had two occasions to rule on the question of ownership involving two of the lots. Valdehueza v. Republic,[6] decided in 1966, concerned Lot Nos. 932 and 939 of the Banilad Friar Lands Estate, while Lot No. 932 was likewise the subject of Republic v. Lim,[7] decided earlier this year. In both cases, the Court found that by the very admission of the government, there

was no record of payment of compensation by the government to the landowners. Thus, the Court ruled in both cases that there was no transfer of the lots involved in favor of the government. The decisions, however, did not touch on the state of ownership of Lot No. 933 which was not involved in the cases.

Beginning in 1940, Lot No. 933 had been subdivided. Part of it was segregated as Lot 933-B under TCT No. 49999 in the name of Francisco Racaza who sold the same to the Cebu Agro Development Corporation (Cebu Agro) on 11 March 1974.[8] Cebu Agro had Lot 933-B further subdivided into three farm lots to expand its rabbit farm. TCT No. 108002 was issued for Lot 933-B-1 by the Register of Deeds of Cebu City on 05 April 1989 while TCT No. 108001 was issued for Lot 933-B-2. On 08 April 1992, TCT No. 119740 was issued for Lot 3, with an area of 543 square meters, which is a portion of the consolidation of Lots 933-B-1 and 933-B-2. All three titles were registered in the names of Arturo Mercader, the President-General Manger of Cebu Agro, and his wife Evangeline Mercader, who religiously paid the real property taxes for the three lots.[9]

On 27 April 1992, FRC bought Lot 3 from the Mercader spouses and was issued TCT No. 119929 therefor by the Register of Deeds.[10]

FRC hired workers to fence the said lot in preparation for the construction of a commercial building thereon. However, the fence construction was halted on 03 June 1992 when Captain Rogelio Molina arrived with a jeepload of fully-armed men from the AFP-VISCOMM, and ordered FRCs workers to stop building the structure per instructions of AFP-VISCOMM Commanding General Romeo Zulueta. Intimidated, FRCs men stopped working. When they resumed work the following day, Captain Molina returned with his armed men and again ordered them to stop the construction. A similar incident occurred on 08 July 1992, with Captain Molina asserting that the lot in question formed part of the military reservation. All three incidents were recorded in the blotter of Police Station 2, Mabolo, Cebu City.[11]

On 22 July 1992, FRC filed a Complaint[12] for injunction and damages with the Regional Trial Court (RTC) of Cebu against Captain Rogelio Molina and six John Does. The complaint was later amended to implead the Republic of the Philippines (Republic) through the AFP-VISCOMM and its Commanding General Romeo Zulueta. FRC sought the issuance of a temporary restraining order (TRO) and/or writ of preliminary injunction, to order the respondents to cease, desist and refrain from threatening, intimidating and harassing the workers constructing its fence and to cease, desist and refrain from committing acts of intrusion into and deprivation of subject land, and to cease, desist and refrain from harassing, disturbing and interfering with its peaceful and lawful possession and enjoyment thereof.

FRC also prayed that after trial, (i) the injunction be made permanent, (ii) respondents adjudged without any legal right to or interest whatsoever in the parcel of land in litigation, (iii) respondents ordered to pay compensatory and exemplary damages, attorneys fees and expenses of litigation.

On the same day, the trial court issued the TRO[13] prayed for with a duration of 20 days, and set the hearing of the application for preliminary injunction.

In their Answer,[14] respondents admitted that Captain Rogelio Molina ordered FRCs workers to desist from fencing the land in dispute on the ground that said lot is government property. However, they denied that he and his armed men threatened and/or harassed the said workers.

In an Omnibus Order[15] dated 26 August 1992, the trial court granted FRCs application for preliminary injunction which writ it later made permanent in an Order[16] dated 12 October 1995 until such time that the issue of ownership between the parties shall have been resolved by a competent court.[17] The trial court found that the subject property is in the possession of FRC and its predecessor-in-interest and ruled that FRCs assertion of ownership is supported by a TCT which must be upheld until nullified by a competent court in a proper proceeding. In all probability, the Republic would prevent the construction of FRCs fence, if not provisionally prevented by court order, thereby making injunction a proper relief, the lower court noted.

Aggrieved, the Republic filed with the Court of Appeals (CA) on 24 November 1995 a petition for certiorari under Rule 65 with an urgent prayer for TRO and/or preliminary injunction seeking to set aside the 12 October 1995 Order of the trial court.[18] It justified its immediate recourse to the appellate court on the basis of urgency and the perceived futility of filing a motion for reconsideration with the lower court, thereby leaving it with no other plain, speedy and adequate remedy in the ordinary course of law except through the petition.[19]

As per Resolution[20] dated 29 November 1995, the CA gave due course to the petition and temporarily restrained the implementation of the trial courts questioned order pending full consideration of the Republics petition.

On 12 September 1996, the CA promulgated its assailed Decision[21] granting the Republics petition for certiorari, setting aside the trial courts 12 October 1995 Order, and making permanent the writ of

preliminary injunction it issued against the implementation of the trial courts decision. It further ordered the trial court to dismiss Civil Case No. CEB-12290.

The appellate court ratiocinated that FRC does not have a clear and unmistakable right over the subject property on the ground that the subject lot not only adjoins military structures, but the main entrance thereof carries the arch of the AFP-VISCOMM identifying beyond peradventure of doubt that one is entering the premises of the AFP, a government entity.[22] It likewise held that the damage which FRC may suffer in enjoining it from undertaking any improvements on the subject property pales in comparison with what the [Republic] stands to suffer in the event of a permanent injunction against it the integrity of its military premises.[23] It concluded that not until FRCs title to the land is upheld by final judgment may a writ of injunction properly issue to prevent the Republic from disallowing FRC to fence the lot and introduce any improvement thereon.

FRC then filed a motion for reconsideration[24] but the same was denied by the CA in a Resolution[25] dated 31 January 1997. The appellate court found the trial court in grave abuse of discretion when it disregarded the fact that the subject lot had been expropriated by the government a long time ago in the Commonwealth case.

Hence, this petition.

The core issue in this case is whether or not injunction lies in favor of FRC to prevent the Republic from interfering in the exercise of its rights of ownership over the subject property.

In a long line of cases, this Court has held that injunction is a preservative remedy aimed at protecting substantive rights and interests.[26] The very foundation of the jurisdiction to issue a writ of injunction rests in the existence of a cause of action and in the probability of irreparable injury, inadequacy of pecuniary compensation and the prevention of multiplicity of suits.[27] Where facts are not shown to bring the case within these conditions, the relief of injunction should be refused.[28]

Thus, to be entitled to injunctive relief, the following must be shown: (1) the invasion of a right sought to be protected is material and substantial; (2) the right of complainant is clear and unmistakable; and (3) there is an urgent and paramount necessity for the writ to prevent serious damage.[29]

In reversing the trial court, the CA found FRCs case to be wanting in the second and third requisites.

We disagree.

We first take up the second requisite. Without ruling on the question of ownership over the subject property, we shall delve into the respective claims of ownership of the parties if only to determine if FRC had sufficiently established the existence of a right to be protected by a writ of injunction.

Basically, FRC anchors its claim on the indefeasibility of its registered title to the subject lot which cannot be collaterally attacked by the Republic in an injunction suit. It further alleges, and as found by the trial court, that along with its predecessors-in-interest it has been in open, peaceful and continuous possession thereof since time immemorial, tilling the same and paying all the taxes due thereon.

On the other hand, the Republic has not presented any title over the subject lot but instead relies heavily on theCommonwealth and Valdehueza cases in asserting ownership and possession over the same, arguing that it was expropriated by the government for military purposes in 1940. It further alleges that its possession of the subject lot is evidenced by the existence of military structures on the adjoining lots and that of the Camp Lapu-Lapu arch on the main entrance of the property in question.

Time and again, we have upheld the fundamental principle in land registration that a certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein.[30] It becomes the best proof of ownership of a parcel of land.[31] One who deals with property registered under the Torrens system may rely on the title and need not go beyond the same.[32] Such principle of indefeasibility has long been well-settled in this jurisdiction and it is only when the acquisition of the title is attended with fraud or bad faith that the doctrine finds no application.[33]

In the instant case, it is undisputed that FRC is a holder of a certificate of title over the lot in question. Records show that each of FRCs predecessors-in-interest was likewise a holder of an indefeasible title. Furthermore, no patent irregularity can be gleaned on the face of FRCs title. Yet, the Republic challenges the validity of the same by maintaining that the subject lot had long been expropriated in favor of the government. Although it does not present any title over the property, the Republic invokes

the expropriation proceedings which are the Commonwealth and Valdehueza cases. However, the Republics reliance on the proceedings does not in any way bolster its cause.

First, Valdehueza involves Lot Nos. 932 and 939. It does not in any way deal with the subject property nor were FRC and its predecessors-in-interest made parties thereto. Hence, the ruling therein cannot be applied to the instant case.

On the other hand, the property in question was indeed made subject of expropriation proceedings in the Commonwealth case. However, the CFI in said case made no mention of the award of the land subject thereof in favor of the government. The CFI merely fixed the valuation of the lots involved for the purpose of payment of just compensation by the government. Until the government has paid for the value of the lots, ownership shall remain with the respective landowners.[34] In Republic v. Lim, we reiterated the rule that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of just compensation.[35]

We note that the Republic claims possession over the subject lot based first on its alleged deposit of P9,500 pursuant to the CFI Order dated 19 October 1938 in the Commonwealth case, and second, on the existence of military structures on the adjoining lots of the subject property coupled with the existence of a portion of the runway of the defunct Lahug airport on Lot No. 933 and the arch of Camp Lapu-Lapu on the subject lot. However, the records are bereft of evidence on the alleged deposit made by the Republic with the Philippine National Bank. The Republic merely relies on our ruling in Valdehueza which the Republic claims to have reinforced the Commonwealth case. However, although Valdehueza and even Lim do mention a disbursement of the said amount, there was no proof presented by the Republic in both cases as to the receipt of the said deposit by the authorized depositary.[36] Even then, said cases do not involve Lot No. 933. There is also nothing in the Commonwealth case stating that the Republic had in fact made the required deposit as precondition to possession of the subject lot. There is also no evidence presented as to the existence of the camps arch on subject lot. In any case, the Republic cannot base its right to the subject lot solely on the alleged presence of a government structure therein. The law provides for a strict procedure for expropriation which the State must follow lest it violates the constitutionally enshrined principle that private property shall not be taken for public use without just compensation.[37]

Assuming that the Republic had indeed paid the deposit or made full payment of just compensation, in regular order this should have led to the cancellation of title, or at least, the annotation of the lien in favor of the government on the certificate of title covering the subject lot. The registration with the

Registry of Deeds of the Republics interest arising from the exercise of its power of eminent domain is in consonance with Section 88 of Act No. 496 or the Land Registration Act (now Section 85 of P.D. 1529 also known as the Property Registration Decree),[38] to wit:

SEC. 88. Whenever any land of a registered owner, or any right or interest therein, is taken by eminent domain, the Government or municipality or corporation or other authority exercising such right shall file for registration in the proper province a description of the registered land so taken, giving the name of such owner thereof, referring by number and place of registration in the registration book to each certificate of title, and stating what amount or interest in the land is taken, and for what purpose. A memorandum of the right or interest taken, shall be made on each certificate of title by the register of deeds, and where the fee simple is taken a new certificate shall be entered to the owner for the land remaining to him after such taking, and a new certificate shall be entered to the Government, municipality, corporation, or other authority exercising such right for the land so taken. All fees on account of any memorandum of registration or entry of new certificate shall be paid by the authority taking the land.

Furthermore, Section 251 of the Code of Civil Procedure, the law in force at the time of the Commonwealth case likewise provides for the recording of the judgment of expropriation in the Registry of Deeds. Said provision reads, to wit:

SEC. 251. Final Judgment, Its Record and Effect. The record of the final judgment in such action shall state definitely by metes and bounds and adequate description. the particular land or interest in land condemned to the public use, and the nature of the public use. A certified copy of the record of the judgment shall be recorded in the office of the registrar of deeds for the province in which the estate is situated, and its effect shall be to vest in the plaintiff for the public use stated the land and estate so described.[39](Emphasis supplied)

There is no showing that the Republic complied with the aforestated registration requirement. Without such compliance, it cannot be said that FRC had notice of the Republics adverse claim sufficient to consider the former in bad faith, for the law gives the public the right to rely on the face of the Torrens title and to dispense with the need of further inquiry, except only when one has actual knowledge of facts and circumstances that should impel a reasonably cautious man to inquire further into its integrity.[40] Such is the very essence of our Torrens system as ruled in Legarda v. Saleeby, 31 Phil. 590, thus:

The real purpose of the system is to quiet title of land; to put a stop forever to any question of the legality of the title, except claims which were noted at the time of registration, in the certificate, or which may arise subsequent thereto. That being the purpose of the law, it would seem that once a title is registered, the owner may rest secure, without the necessity of waiting in the portals of the courts, or sitting in the mirador de su casa, to avoid the possibility of losing his land. x x x The certificate, in the absence of fraud, is the evidence of title and shows exactly the real interest of its owner. The title once registered, with very few exceptions, should not thereafter be impugned, except in some direct proceeding permitted by law. Otherwise, all security in registered titles would be lost.[41]

In any event, if FRC or any of its predecessors-in-interest had fraudulently acquired title to the subject lot, this issue should be properly ventilated in a direct proceeding for that purpose, and not in an injunction suit. By law, a certificate of title shall not be subject to collateral attack.[42] In Leyson v. Bontuyan,[43] we ruled, to wit:

While Section 47 of Act No. 496 provides that a certificate of title shall not be subject to collateral attack, the rule is that an action is an attack on a title if its object is to nullify the same, and thus challenge the proceeding pursuant to which the title was decreed. The attack is considered direct when the object of an action is to annul set aside such proceeding, or enjoin its enforcement. On the other hand, an attack is indirect or collateral when, in an action to obtain a different relief, an attack on the proceeding is nevertheless made as an incident thereof.

Therefore, FRCs claim as a titleholder is given preference by law to any other claim of right over said land. Until such title is nullified, the Republic can raise no more than a doubtful claim over the property in question, which dubious claim militates against the issuance in its favor of a writ of injunction. So, the appellate court erred in stating the rule in reverse and in granting injunctive relief to the Republic when its claim of ownership as against FRCs is unclear. It must be stressed that injunction is not proper when its purpose is to take the property out of the possession or control of one party and transfer the same to the hands of another who did not have such control at the inception of the case and whose legal title has not clearly been established,[44] for the reason that before the question of ownership is determined, justice and equity demand that the parties be maintained in status quo so that no advantage may be given to one party to the detriment of the other.[45]

All told, reversing the appellate court we rule that the second requisite for injunctive relief, that FRC holds a clear and unmistakable right over the subject lot, has been sufficiently established.

Anent the third requisite, the appellate court ruled that in the event of a permanent injunction the Republic stands to suffer greater injury compared to FRC, as a private commercial building within a camp will pose serious danger and damage to military operations. Again, we disagree.

In seeking the affirmation of the writ of injunction issued by the CA to enjoin the implementation of the permanent injunction ordered by the trial court against it, the Republic invokes national security and the integrity of its military operations. It argues that civilians cannot be allowed to lurk within military premises.

However, we cannot overemphasize that until FRCs title is annulled in a proper proceeding, the Republic has no enforceable right over the subject property. Neither military operational integrity nor national defense vests title to property in favor of the government. Hence, the CA was in error in enjoining enforcement of the lower courts order, as injunction does not protect rights not in esse.[46] The possibility of irreparable damage, without proof of violation of an actually existing right, is not a ground for injunction.[47]

Furthermore, the only so-called military structure allegedly found on Lot No. 933 is the arch of Camp Lapu-Lapu. It is not even clear where exactly on Lot No. 933 this arch stands. Neither was it shown when the same was constructed. Note that the lot in question is not the entire Lot No. 933, but only a portion thereof. We cannot imagine

how fencing a 543-square meter lot can lead to grave and irreparable damage to the Republic. Our ruling in the Lim case is instructive, to wit:

The Republics assertion that the defense of the State will be in grave danger if we shall order the reversion of Lot 932 to respondent is an overstatement. First, Lot 932 had ceased to operate as an airport. What remains in the site is just the National Historical Institutes marking stating that Lot 932 is the former location of Lahug Airport. And second, there are only thirteen (13) structures located on Lot 932, eight (8) of which are residence apartments of military personnel. Only two (2) buildings are actually used as training centers. Thus, practically speaking, the reversion of Lot 932 to respondent will only affect a handful of military personnel. It will not result to irreparable damage or damage beyond pecuniary estimation, as what the Republic vehemently claims.[48]

Lot No. 932 adjoins the subject lot. Although, there existed on Lot No. 932 training centers and housing for military personnel, we ruled that the reversion of Lot No. 932 to respondent therein, a private party, will not cause irreparable injury to the Republic that gives rise to a ground for injunctive relief. What more in this case when the only structures alleged to exist on subject lot are a portion of an unused runway and an arch? Thus, the Republics contention that it will suffer serious damage if injunction is ordered against it is more imagined than real.

Meanwhile, the exercise by FRC of its rights of ownership over the subject lot is being unduly restrained. At this point, its possession and ownership of the subject property must be respected.

Since the Republic has failed to prove its indubitable right over the lot in question we have to rule that FRC possesses a clear and unmistakable right over the subject lot that necessitates the issuance of a writ of injunction to prevent serious damage to its interests as titleholder thereto. Meanwhile, FRC may institute a separate proceeding to quiet its title wherein the issue of ownership over the subject property may finally be resolved.

WHEREFORE, premises considered, the petition is hereby GRANTED. The Decision dated 12 September 1996 of the Court of Appeals is REVERSED and the Order dated 12 October 1995 of the Regional Trial Court is REINSTATED.

SO ORDERED.