Guerrero v. Court of Appeals
REITERATIONFacts
The Antecedents: On August 12, 1971, the Court of First Instance (CFI) of Camarines Sur adjudicated Lots Nos. 735 and 742 to Felipa Balandra, leading to the issuance of Original Certificate of Title (OCT) No. 396. On February 17, 1973, Balandra sold the lots to petitioner Ireneo Guerrero, who obtained Transfer Certificate of Title (TCT) No. 6864. Petitioner filed a complaint against Josefa Almeda for quieting of title and recovery of possession, alleging dispossession by force, threats, and intimidation. Almeda claimed ownership and possession, asserting petitioner acquired the lots in bad faith and that Balandra obtained OCT No. 396 through fraud. Evidence showed the lots were acquired by Dominador Almeda and others from Fidel Pascua, and upon Dominador's death, his heirs (private respondents) were allotted these lots via an extrajudicial partition. Procedural History: The trial court ruled in favor of petitioner Guerrero. Almeda appealed to the Court of Appeals (CA), which affirmed the trial court's decision. The CA decision became final and executory. A writ of execution was issued and levied on Almeda's properties. Almeda filed a motion to vacate the entry of judgment and set aside the writ of execution, claiming her counsel did not personally receive the CA decision. The CA denied this motion. Subsequently, the Almeda children filed an urgent motion to file a third-party claim and lift the levy on their properties. Later, the Almeda children filed a petition with the CA seeking the annulment of the judgment in the cadastral case and the civil case, alleging fraud in the cadastral proceedings and that they were not impleaded as indispensable parties in the civil case. The CA consolidated the cases and, after trial, declared the CFI judgments in both the cadastral and civil cases null and void, recognizing the Almeda children's claim of ownership and possession. The CA set aside the writ of execution and levy, and dismissed claims for damages. Petitioner Guerrero appealed to the Supreme Court. The Petition: Petitioner Ireneo Guerrero seeks to set aside the resolution of the Court of Appeals which annulled the judgments of the lower courts and declared the Almeda children as the rightful owners of the two lots.
Issue(s)
Whether the CFI judgment in Cadastral Case No. N-4, LRC No. N-81 can be annulled. What is the effect of the annulment of the cadastral judgment on the title of Felipa Balandra, the title of petitioner Ireneo Guerrero, and the judgment in Civil Case No. R-176 (7529). Whether the judgment in Civil Case No. R-176 (7529) can be annulled on the grounds that it was essentially for forcible entry, not ownership, and that only Josefa Almeda, not the real owners, was made a defendant. Whether reconveyance can be granted.
Ruling
The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. The Court held that the judgments of the CFI in both the cadastral case and the civil case are null and void. The appellate court's findings of fact, supported by ample evidence, were upheld. The claims for damages by both parties were dismissed for lack of adequate proof.
Ratio Decidendi
On the annulment of the CFI judgment in Cadastral Case No. N-4, LRC No. N-81: The Supreme Court sustained the appellate court's finding that the cadastral proceedings were based on a false cadastral number (CAD No. N-4, LRC No. N-81). Evidence established that there is only one cadastre for Naga City, CAD-290, Case 3, which covers Lots 735 and 742. The name of Felipa Balandra, the supposed adjudicatee, did not appear in the Bureau of Lands records as a claimant for these properties. The appellate court correctly concluded that the judgment was procured by Balandra in fraudulent collusion with the lower court, rendering the judgment null and void. The Torrens system is not intended to shield fraud, and registration does not confer ownership if the title is tainted with fraud. On the effect of the annulment on the titles and the civil case judgment: The annulment of the cadastral judgment necessarily rendered void the OCT issued to Balandra and, consequently, the TCT issued to petitioner Guerrero, as his title originated from a fraudulent decree. The judgment in Civil Case No. R-176 (7529), which was based on the fraudulent cadastral title and involved the same subject matter, was also correctly annulled by the appellate court. The appellate court's finding that the Almeda children were the rightful owners, based on their father's acquisition and subsequent extrajudicial partition, and that they had been in open, continuous, exclusive, notorious, and adverse possession in the concept of owners, was supported by testimonial and documentary evidence. The appellate court also correctly noted that the Almeda children were not impleaded as indispensable parties in the civil case. On the annulment of the judgment in Civil Case No. R-176 (7529) and the nature of the action: The appellate court correctly found that the civil case, as initiated by petitioner Guerrero, was effectively an action for ownership and possession, not merely forcible entry, despite petitioner's allegations of dispossession. However, the annulment was warranted because the underlying cadastral title was fraudulent. Furthermore, the appellate court correctly pointed out that Josefa Almeda, the defendant in the civil case, was not the real owner of the property; the ownership pertained to her children, the private respondents, who were not impleaded as indispensable parties. This procedural defect, coupled with the fraudulent basis of the claim, justified the annulment of the civil case judgment. On reconveyance: The appellate court's decision to declare the lots open for registration by the appropriate owners, with acknowledgment of the Almeda children's claim of ownership and possession, effectively serves the purpose of reconveyance. By nullifying the fraudulent titles and judgments, the appellate court restored the status quo ante and recognized the superior claim of the private respondents, who had established their ownership and possession through substantial evidence. The dismissal of claims for damages by both parties was also affirmed due to lack of adequate proof.
Main Doctrine
The Supreme Court affirmed the Court of Appeals' decision nullifying the trial court's judgment that awarded ownership of two lots to petitioner Ireneo Guerrero. The appellate court found that the original cadastral proceedings were based on a false cadastral number and that the judgment was procured through fraud and collusion. The Court emphasized that the Torrens system is not intended to shield fraud and that findings of fact by the Court of Appeals, when supported by evidence, are binding.