Yulo Agricultural Corp. v. Davis
REITERATIONFacts
The Antecedents: Jose L. Yulo owned Lot 62-A, which was subdivided. TCT T-1081 was in Yulo's name. This was further subdivided, resulting in TCT Nos. 36824 to 36852. TCT 36852, covering Lot 29, was subdivided in 1969, yielding several lots including Lots 24, 25, 72 (TCT T-62499), 91 (TCT T-64737), 92 (TCT T-64738), and 96 (TCT T-64742). Titles for Lots 91, 92, and 96 were issued in 1971. Yulo sold Lots 91, 92, and 96 to the Madrinas in 1975. These lots, along with Lots 24 and 25, were mortgaged to Nation Bank, foreclosed, and later sold by the bank to respondents Spouses Davis in 1992. New titles (TCT Nos. T-163622, T-163623, T-163624) were issued to the Davises for Lots 91, 92, and 96 on December 11, 1992. Meanwhile, TCT T-62499 for Lot 72 was cancelled and TCT T-113437 was issued in 1979 to petitioner Jose Yulo Agricultural Corporation (JYAC). In 1982, Lot 72 was subdivided into several lots, including Lots 3 (TCT T-126644), 4 (TCT T-126645), and 5 (TCT T-126646), registered in JYAC's name. Lot 5 was sold to Spouses Trajera in 1994, with TCT T-167841 issued in their favor. In 1999, JYAC and the Trajeras sent demand letters to the Davises, alleging encroachment by the Gabayeron home and fence (which the Davises purchased) onto their properties (JYAC's Lots 3 and 4, and Trajeras' Lot 5). A relocation survey indicated a 16-square-meter encroachment by the Davises' fence onto adjacent lands. Procedural History: Respondents filed a case for quieting of title and damages against the Trajeras, Yulo, Nation Bank, and the Building Official. The RTC ruled that the Davises' house and fence occupied portions of JYAC's Lots 4 and 5, but not Lot 3. It found that Lots 91, 92, and 96 were registered earlier than Lots 3, 4, and 5, thus applying the rule that the earlier registered title prevails. The RTC considered the Davises as builders in good faith and ordered JYAC and the Trajeras to sell the encroached portions of their land to the Davises, or vice versa, with a preference for the latter due to practicality. JYAC and the Trajeras appealed to the CA. The CA affirmed the RTC's decision, holding that the Davises' titles were derived from earlier titles issued in 1971, while JYAC's and the Trajeras' titles were derived from a title issued in 1979. The CA also upheld the RTC's findings regarding the overlapping of titles and the Davises' status as builders in good faith. JYAC's motion for reconsideration was denied. The Petition: JYAC filed a Petition for Review on Certiorari, arguing that the CA erred in finding that the Davises had better rights to Lots 91, 92, and 96, asserting these lots were non-existent and their titles spurious. JYAC also questioned the award of damages and attorney's fees.
Issue(s)
Whether the Court of Appeals erred in finding that the respondents (Spouses Davis) have better rights than the petitioner (JYAC) concerning Lots 91, 92, and 96. Whether the Court of Appeals erred in affirming the award of damages in the form of cost of plane fare and attorney's fees.
Ruling
The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. The Court held that the respondents' titles to Lots 91, 92, and 96 must be upheld over the petitioner's titles to Lots 3, 4, and 5 because the titles from which the respondents' ownership was derived were issued earlier (1971) compared to the titles of the petitioner and the Trajeras (1979). The Court also affirmed the award of damages and attorney's fees, noting that the issue was raised for the first time in the motion for reconsideration before the CA and was therefore barred by estoppel.
Ratio Decidendi
On the issue of better rights to Lots 91, 92, and 96: The Court reiterated the general rule that where two certificates of title purport to include the same land, the earlier in date prevails. It found that the titles from which the respondents' ownership of Lots 91, 92, and 96 were derived were issued in 1971, while the titles of the petitioner (JYAC) and the Spouses Trajera for Lots 3, 4, and 5 were derived from a mother title issued in 1979. The Court noted that JYAC, as a corporation connected to Jose L. Yulo, the original owner, was aware or should have been aware of the overlapping titles, as Yulo himself subdivided and sold the properties. The Court emphasized that the Torrens titles of the respondents, confirming their ownership, must prevail over the subdivision plan presented by the petitioner, as titles are superior proof of ownership. Furthermore, the Court held that an indirect attack on the respondents' titles through an assertion of non-existence was improper, as titles can only be cancelled in a direct proceeding. The Court also affirmed the finding that the respondents, having purchased the property with existing improvements from Nation Bank, were builders in good faith, and thus their rights are governed by Article 448 of the Civil Code. On the award of damages and attorney's fees: The Court affirmed the CA's ruling that the petitioner's challenge to the award of damages and attorney's fees was raised for the first time in its motion for reconsideration before the CA, and not in its appellant's brief. The Court reiterated the principle that issues raised for the first time on appeal are barred by estoppel and cannot be considered by a reviewing court, as this would violate basic principles of fair play, justice, and due process. Therefore, the award of damages and attorney's fees, as affirmed by the CA, must stand.
Main Doctrine
Where two certificates of title purport 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 the 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.