AIMARDO V. INTERIOR AND THE HEIRS OF LEONOR LAVADIA, NAMELY: DOMINGO LAVADIA, JR., JUANA LAVADIA, BASILIO LAVADIA, PAZ A. HERNANDO, MANUEL L. AISON, DANIEL L. AISON, JR., AND NO…

Aimardo Interior versus the Heirs of Leonor Lavadia

The Case

This is a case about a homestead that was lost twice: first to an invalid sale, and later to a reconstituted title that should never have been issued. Aimardo Interior and the heirs of Leonor Lavadia, the plaintiffs below, sued the heirs of Francisco Nicolas, the defendants below, to quiet their title over a large parcel of land in Alicia, Isabela, to declare null and void the reconstituted title of Francisco Nicolas and the titles derived from it, and to recover damages. The case matters because it shows how a final judgment declaring a title void operates through the decades, and why a reconstitution proceeding cannot breathe life back into a title the Supreme Court has already killed.

Procedural History

The plaintiffs filed their complaint for quieting of title with declaration of nullity of certificates of title and damages before the Regional Trial Court of Cauayan City, Isabela, Branch 19. After trial, the trial court rendered judgment in their favor, quieting their titles, declaring the reconstituted title of Francisco Nicolas and the eight titles derived from it null and void, and awarding moral damages, exemplary damages, attorney's fees and litigation expenses, plus costs. The defendants moved for reconsideration, and the trial court denied the motion. The defendants then filed a motion for substitution of counsel and a notice of appeal, which the trial court granted for purposes of appeal. The case went up to the Supreme Court by appeal, and the Court denied the appeal.

Facts

In February 1937 a homestead patent was granted to Domingo Cadiz over a parcel of land in Angadanan, now Alicia, Isabela, and in March 1937 Original Certificate of Title Number I-4243 was issued to him under the Public Land Law. In December 1939 Cadiz borrowed One Thousand Pesos from Francisco Nicolas on terms that, should he fail to pay by the end of February 1942, he would convey the entire homestead to Nicolas by absolute sale. The war intervened, and when the parties met again in February 1943 Cadiz could not pay, so the property was conveyed to Nicolas and a transfer certificate of title was issued in his name.

In January 1951 Cadiz sued in the Court of First Instance of Isabela, claiming the deed of sale was fictitious or void. He died during the case and his heirs substituted for him. The trial court ordered Nicolas to return possession of the land upon receipt of Five Hundred Forty Six Pesos and Sixty Nine Centavos from the plaintiffs, to surrender the title, and directed the Register of Deeds to cancel it and issue a new one in the name of Domingo Cadiz. In February 1958 the Supreme Court affirmed that decision. The estate was then settled extrajudicially, the property was adjudicated to Valentina Cadiz and Leonida Silao, and in January 1967 they conveyed it by a deed of barter to the spouses Ricardo Interior and Leonor Lavadia. A transfer certificate of title was issued to Ricardo Interior in April 1967. After the spouses died, a compromise agreement partitioned their estate, approved by the trial court in July 1998, giving one half to Aimardo Interior and the other half to the heirs of Leonor Lavadia, each half later covered by its own title.

Meanwhile, in August 1999, the heirs of Francisco Nicolas petitioned for reconstitution of the old Nicolas title, claiming the owner's copy was misplaced and the original burned in a 1976 fire at the Register of Deeds. Reconstitution was ordered in February 2002 and the reconstituted title was issued in March 2002, annotated as subject to the deed on file. The Nicolas heirs then partitioned the property among themselves and obtained eight titles in their own names. In October 2005 they tried to enter the land to survey it, but the plaintiffs' caretaker, with police help, stopped them. The plaintiffs then sued.

Issues

• Whether or not the reconstituted title of Francisco Nicolas is void from the beginning.
• Whether or not the cancellation of that title depended on payment of Five Hundred Forty Six Pesos and Sixty Nine Centavos to Francisco Nicolas.
• Whether or not the defendants are liable for moral and exemplary damages, attorney's fees and costs of suit.

Applicable Provisions

Section 118 of Commonwealth Act Number 141, the Public Land Law, as discussed in the decision, provides:

Except in favor of the Government or any of its branches, units, or institutions, or legally constituted banking corporations, lands acquired under the free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent or grant, nor shall they become liable to the satisfaction of any debt contracted prior to the expiration of said period, but the improvements or crops on the land may be mortgaged or pledged to qualified persons, associations, or corporations.

This is the provision the Court invokes to explain why the sale of the homestead to Nicolas in satisfaction of a debt was void, and therefore why the title built on that sale could never be valid.

Ruling

On the first issue, the Court held that the reconstituted title is void from the beginning because it cannot derive its existence from a title the Supreme Court had already declared void. The sale by Domingo Cadiz to Francisco Nicolas was contrary to Section 118 of the Public Land Law, and the 1958 judgment became final. A void title produces no rights and cannot be the source of the eight titles issued to the Nicolas heirs. The Court also noted that the plaintiffs proved their case by preponderance of evidence, which it described as the greater weight of credible evidence, and that the reconstituted title itself carried the annotation that it was subject to the deed on file, which was the earlier title of Ricardo Interior.

On the second issue, the Court held that payment of Five Hundred Forty Six Pesos and Sixty Nine Centavos was never a condition for the cancellation of the title. The judgment merely directed Nicolas to return possession upon receipt of that amount. The validity of the title does not depend on the payment. Since Nicolas voluntarily surrendered possession to the Cadiz heirs, payment is presumed made or the amount waived, and if not, his heirs may still sue to collect it if prescription has not set in.

On the third issue, the Court held the defendants liable for moral and exemplary damages, attorney's fees and costs. They took advantage of the burned records of the Register of Deeds, alleging in their petition that the title was neither canceled nor encumbered when in truth it had been void since 1958, while the plaintiffs had possessed the land since 1967. The Court also held the defendants bound by the acts of their former counsel, who failed to file their formal offer of evidence on time.

Doctrine

A homestead sold in violation of Section 118 of the Public Land Law is conveyed by a void deed, and a certificate of title issued on that deed is void and conveys nothing. A final judgment declaring such a title void operates from the moment it becomes final, and a later reconstitution proceeding cannot revive it, because reconstitution presupposes a valid existing title. The payment of a sum ordered in a judgment as a condition for the return of possession is not a condition for the cancellation of a void title. Finally, a party who secures a reconstituted title while concealing that the original had been judicially declared void is liable in damages.

Disposition

The Supreme Court denied the appeal and affirmed the judgment of the trial court in full, quieting the plaintiffs' titles and declaring the reconstituted title and the eight titles derived from it null and void, with damages, attorney's fees and costs against the defendants.

Remember This

The one line to memorize: a void title cannot be reconstituted into a valid one, because reconstitution presupposes a title that exists. Examiners use this case on homesteads, the five year prohibitory period under Section 118 of the Public Land Law, and the limits of judicial reconstitution of torrens titles.