22 Realty Sales Enterprises, Inc. vs. IAC

5/6/2017 SUPREMECOURTREPORTSANNOTATEDVOLUME154
328 SUPREME COURT REPORTS ANNOTATED

Realty Sales Enterprise, Inc. vs. Intermediate Appellate
Court
*
No. L67451. 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.
Land Registration Torrens System Jurisdiction Jurisdiction

over all application for registration of land titles is conferred upon
the Courts of First Instance of the province where land is situated
and is acquired upon the filing of the application and is retained
up to the end of the litigation.Under Act No. 496, Land
Registration Act, (1902) as amended by Act No. 2347 (1914),
jurisdiction over all applications for registration of title to land
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.
Same Same Reconstitution: Act 3110 was enacted to aid and
benefit litigants so that when records are lost at any stage of
judicial proceedings. they may reconstitute lost records and
continue the case at the stage where the records were destroyed
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
http://www.central.com.ph/sfsreader/session/0000015bdd08a5b09ab0d627003600fb002c009e/t/?o=False 1/22
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
_______________
* THIRD DIVISION.
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VOL. 154, SEPTEMBER 28, 1987 329
Realty Sales Enterprise, Inc. vs. Intermediate Appellate Court
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 remained pending and the Court of First Instance of Rizal
continued to have jurisdiction over it.
Same Same An innocent purchaser for value is one who
bought the property relying on the certificate of title of the
registered owner without notice that some other person has a right
to or interest in such property and pays a full price for the same.
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. 270273.) 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 predecessorsininterest.
Same Same 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 entitted to
the estate or interestln 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 earlier
certificate issued in respect thereof . ,.. ." (Legarda and Prieto v.
Saleeby, 31 Phil. 590 [1915] at 595596 Garcia
330
v. CA, Nos. L48971 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.
Same Same Actions Suits to quiet title are not technically
suits in rem nor in personam but characterized as quasiinrem
and is conclusive only between the parties.ln 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 thirdparty 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]).
PETITION to review the decision of the Intermediate

Appellate Court.
The facts are stated in the opinion of the Court.
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
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VOL. 154, SEPTEMBER 28, 1987 331

Court
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. N63394 in LRC Cases Nos.
657, 758 and 976, GLRO Record Nos. N29882, N
33721 and N43516, 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. N131349 in LRC Case No. N11M
(N6217), GLRO Record No. N32166.
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. P206, GLRO Record No. N31777.
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.
N63394 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. lt
was further alleged that the original records of LRC Case
No. 657, GLRO Record No. 29882 which was the
332

Court
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
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, predecessorininterest 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 Sy stem in favor of another.
With leave of court, Realty and Macondray filed a
thirdparty 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 thirdparty 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 fourthparty 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 reim
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VOL. 154, SEPTEMBER 28, 1987 333

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burse the purchase price which the corporation paid to

them. However, QCDFC failed to prosecute its case, and
the fourthparty 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. L56471 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 Blg. 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 reraffling of cases and the
case was assigned to the Second Special Cases Division
which, however, returned the records of the case for

another reraffling 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
334

Court
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:
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 no legal standing under the
provisions of Batas Pambansa Blg. 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
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VOL. 154, SEPTEMBER 28, 1987 335

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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 x x x for reraffling and
reassignment x x x 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 faitha 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
336

Court may sit en banc only for the purpose of exercising

administrative, ceremonial or other nonadjudicatory functions.
Sec. 8. Grouping of Divisions.Of the ten (10) division of the

Court, four (4) divisions, to be known as Civil Cases 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 criminal 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 shall specifically indicate
whether it is for the Civil Cases Divisions, the Criminal Cases
Divisions, or the Special Cases Divisions of the Court No member
of the Court appointed to any of the three classes of divisions shall
be assigned to any of the other classes of divisions, except when
authorized by the Supreme Court, upon recommendation of the
Intermediate Appellate Court en banc, if the exigencies of the
service so require. . . . (italics 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 Floreliana
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 socalled 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. 2126.)
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
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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

acknowedgment by the Division that promulgated it that the
earlier Decision dated December 29,1983 rendered in a Special
Civil Action case for certiorari, CAG.R. No. SP13530, 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
overstepped 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 elimination by the
appellate court of the essential requisites then prescribed f or 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.
338

Court
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. L56471
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"
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 all, 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
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the reorganization under BP 129) as having "erased or

cancelled" 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 declare 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 filed by Carpo, which was the
same basis for the rulings 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
ininterest 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, N29882 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 land 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
340

Court
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, predecessorin
interest of Realty, who originally filed on June 24, 1927 a
registration proceeding docketed as LRC Case No. 657,
GLRO Record No. N29882 in the Court of First Instance of
Rizal to confirm his title over parcels of land described as
Lots 1, 2 and 3, Plan Psu47035. (Lots 2 and 3 are the
subject of the instant litigation among Carpo, Realty 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 CFIRizal 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 plano Psu47035 a nombre de Estanislao Mayuga,
desestimando oposicion de Florentino Baltazar y Eduardo Guico
con respecto a dichos lotes. . . .
On appeal, the above decision of the CFI was affirmed by the
Court of Appeals in its decision dated November 17,1939, the
dispositive portion of which reads:
Por todas las consideraciones expuestas, confirmamos la deci
sion apelada en cuanto adjudica a Estanislao Mayuga tos lotes,
1,2 y 3 de su plano y que equivalen a los lotes, 4, 5 y 6 del plano de
Baltazar y 4 y 5 del plano de Guico.
x x x
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]).
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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 CFIRizal 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 Psu47035,
substituting therein as registered owner Dominador
Mayuga in lieu 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. 28.)
He cites the case of Villegas v. Fernando (L27347, 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
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Court
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 . . .
will 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 stage 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 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
343
VOL. 154, SEPTEMBER 28, 1987 343

**
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 stage 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.
x x x x x x x x x
. . . (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
all 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
_______________
** 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.
344

Court
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 remained 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 all 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], 25 SCRA 316). There are
however authentic copies of the decisions of the CFl and
the Court of Appeals adjudicating Lots 1, 2 and 3 of Plan
Psu47035 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 lieu of the original adjudicatee,
Estanislao Mayuga, based on the affidavit of self
adjudication, 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 CFIRizal 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.

345
VOL. 154, SEPTEMBER 28, 1987 345

Court
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.
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. 270273.)
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 predecessorsininterest.
The Baltazars, predecessorsininterest of Carpo are
heirs of Florentino Baltazar, an oppositor in the original
application filed by Estanislao Mayuga in 1927. As stated

earlier, the CFI
346

Court
Rizal confirmed the title of Estanislao to Lots 1, 2 and 3 of

Plan Psu47035 "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 well 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 595596 Garcia v. CA, Nos. L48971 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 thirtyparty 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 Ap
347
VOL. 154, SEPTEMBER 28, 1987 347

Court
peals dated December 29,1982, nor from the resolution of

the IAC Special Third Civil Cases Division dated May 2,
1984all of which voided QCDFC's 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 thirdparty 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 all, QCDFC was
afforded full 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
fourthparty 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.
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. L46953, Jose N. Mayuga et al. v.
The Court of Appeals, Macondray Farms, Inc., Realty Sales
Enterprise, Inc., et. at, and moved for consolidation of the
two cases involving as they do the same property. By
Resolution of
_______________
*** See Balbastro, et. al. v. CA, No. L33255, November 29, 1972, 48
SCRA 231, and Rubio v. Mariano, L30403, January 31, 1973, 49 SCRA
319, where this Court glossed over procedural technicalities to do
substantial justice.
348

Court
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 thirdparty 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 CFIRizal 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,, J., no part as I participated in the
companion case of L46953 in the Court of Appeals.
Bidin, J., no part I participated in the appealed
resolution of the Intermediate Appellate Court.
Decision of Court of Appeals dated December 29, 1982

affirmed
Notes.Mere notation of the TCT that it was issued "by

vir
349
VOL. 154, SEPTEMBER 29, 1987 349

People vs. Taduyo
tue of a sales patent" is insufficient to justify

reconstitution. (Director vs. IAC, 102 SCRA 370.)
In reconstitution proceeding the petitioner must prove
that title was in force at the time it was lost or destroyed.
(Director vs. IAC, 102 SCRA 370.)
o0o
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5/6/2017 SUPREMECOURTREPORTSANNOTATEDVOLUME154

328 SUPREME COURT REPORTS ANNOTATED

REALTY SALES ENTERPRISE, INC. and MACONDRAY

Land Registration Torrens System Jurisdiction Jurisdiction

VOL. 154, SEPTEMBER 28, 1987 329

Realty Sales Enterprise, Inc. vs. Intermediate Appellate Court

them is that they lose the advantages provided by the

the estate or interestln this jurisdiction, it is settled that "(t)he

330 SUPREME COURT REPORTS ANNOTATED

Realty Sales Enterprise, Inc. vs. Intermediate Appellate Court

PETITION to review the decision of the Intermediate

The facts are stated in the opinion of the Court.

The litigation over the ownership of the parcels of land

VOL. 154, SEPTEMBER 28, 1987 331

BF Homes Paraaque are covered by three (3) distinct sets

1) TCT No. 20408, issued on May 29, 1975 in the

On December 29, 1977, Morris Carpo filed a complaint with

however, Carpo withdrew his complaint as against the last

332 SUPREME COURT REPORTS ANNOTATED

In its answer to the thirdparty complaint, QCDFC

VOL. 154, SEPTEMBER 28, 1987 333

burse the purchase price which the corporation paid to

which, however, returned the records of the case for

334 SUPREME COURT REPORTS ANNOTATED

Justices Camilon and Bidin were assigned to the Third

The SPECIAL THIRD CIVIL CASES DIVISION of the

On the assumption that the SPECIAL DIVISION is legally

(a) The SPECIAL DIVISION's Resolution of May 2, 1984

Constitution (Art. X, sec. 5 (2) (e), the provisions of the

VOL. 154, SEPTEMBER 28, 1987 335

Furthermore, the said SPECIAL DIVISION grossly departed from

The SPECIAL DIVISION by confirming the appealed judgment

The SPECIAL DIVISION did state in its RESOLUTION of

1. To support their contention that the Special Third Civil

Sec. 4. Exercise of powers and functions.The Intermediate

336 SUPREME COURT REPORTS ANNOTATED

Court may sit en banc only for the purpose of exercising

Sec. 8. Grouping of Divisions.Of the ten (10) division of the

As officially constituted, the Third Civil Cases Division was

adjudicatory powers. It is also alleged that the

VOL. 154, SEPTEMBER 28, 1987 337

the Civil Cases Divisions.

Said resolution of July 25, 1983, to Our view, was effectively an

processes of an ordinary appeal. We are not aware of any legal

338 SUPREME COURT REPORTS ANNOTATED

The Court does not agree.

Respondent Carpo cited authorities holding that

VOL. 154, SEPTEMBER 28, 1987 339

the reorganization under BP 129) as having "erased or

applications for registration of title to land was conferred

340 SUPREME COURT REPORTS ANNOTATED

land registration process and as such, does not constitute a

En meritos de to do lo expuesto, se ordena el registro de los lotes,

Guico filed a petition for review on certiorari before this

VOL. 154, SEPTEMBER 28, 1987 341

Before he could secure a decree of registration in his name,

Section 29 of Act No. 3110, An Act to provide an adequate

342 SUPREME COURT REPORTS ANNOTATED

and books, documents, and files of the office of the register