HEIRS OF AMADO D. DITONA AND TECLA R. DITONA, REP. BY ATTY. RAYMUNDO DITONA, SR., PLAINTIFFS-APPELLANTS, VS. HEIRS OF SALVADOR ALBARECE, SR. REP. BY JOHNNY C. ALBARECE,[] DEFEND…

Heirs of Ditona versus Heirs of Albarece

The Case

This is a lecture on Heirs of Ditona versus Heirs of Albarece, a decision of the Supreme Court on a complaint for quieting of title, reconveyance, and damages over a parcel of about 622 square meters covered by two Torrens certificates in the names of two different families. The Ditonas trace their title to a transfer certificate issued in 1954, derived from an original certificate registered in 1932. The Albareces trace theirs to an original certificate issued in 1995 through a cadastral proceeding. The case matters because it gathers in one place the rules a Bar candidate must command: the earlier title prevails between two certificates covering the same land; a suit to remove a cloud is not a collateral attack; prescription and laches cannot defeat a registered owner; and the action to enforce an implied trust prescribes in ten years, counted from the issuance of the certificate, when the plaintiff is not in possession.

Procedural History

The Ditonas filed a complaint for quieting of title or reconveyance and damages before the Regional Trial Court, Branch 11, Manolo Fortich, Bukidnon. After trial, the court rendered judgment on 26 January 2012, declaring the plaintiff the true owner, ordering the defendants to reconvey the 622 square meters upon reimbursement of useful and necessary expenses, and finding the defendants builders in good faith. The Albareces appealed on 15 February 2012. The Ditonas filed a partial motion for reconsideration, assailing only the finding that the Albareces were builders in good faith entitled to reimbursement; the trial court denied it on 27 February 2012, and the Ditonas appealed that specific finding. The case reached the Supreme Court by appeal from the judgment of the trial court.

Facts

The late spouses Amado Ditona and Tecla Reyes held Lot 1 under a transfer certificate of title issued on 24 May 1954, derived from an original certificate of title registered on 16 November 1932 in the name of Cirilo Rubin. In October 2002, their only child, Raymundo Ditona Sr., who inherited the property, caused a relocation survey duly approved by the Department of Environment and Natural Resources, intending to donate the land to his children. The survey revealed that the heirs of Salvador Albarece Sr. had encroached on about 622 square meters of Lot 1, and that an original certificate of title had been issued to them in 1995 covering that same area. No settlement was reached before the barangay, so Raymundo sued.

The Albareces answered that their predecessors had acquired the area from the Ditonas' predecessors, that a tax declaration was issued in Salvador Albarece's name in 1950, and that Salvador built a house in good faith that year and enclosed the land with a hog wire fence. They claimed Salvador did not know that Amado's title still included the area. They added that a cadastral survey in 1985 placed the area within Lot 523, which was titled in their names, and that their title, granted in a cadastral proceeding, binds the whole world. They invoked prescription, laches, and estoppel, pointing to an earlier complaint by Raymundo against them over a gasoline station, filed on environmental grounds.

At trial, a survey official of the Department of Environment and Natural Resources reported to the court that the 622 square meters plotted in Lot 523 is also inside Lot 1 as described in the Ditonas' title. The trial court ruled for the Ditonas, and both sides appealed the points they lost.

Issues

• Whether or not the procedural defects raised by the Albareces, namely defective verification and certification against forum shopping, non-payment of correct docket fees, failure to implead indispensable parties, and improper substitution of the deceased plaintiff, warrant dismissal of the complaint.
• Whether or not the action for quieting of title is a collateral attack on the Albareces' certificate of title.
• Whether or not the Ditonas' action is barred by prescription and laches.
• Whether or not the Ditonas are estopped from claiming the property.
• Whether or not the Albareces are builders in good faith entitled to reimbursement of their investments and useful and necessary expenses.

Applicable Provisions

Section 48 of the Property Registration Decree provides:

Section 48. Certificate not subject to collateral attack. A certificate of title shall not be subject to collateral attack. It cannot be altered, modified or cancelled except in a direct proceedings in accordance with law.

The Albareces invoked this provision to argue that the complaint was a collateral attack on their title, and the Court used it to distinguish a direct attack from a collateral one.

Article 1456 of the Civil Code provides:

Article 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes.

The Court characterized the Ditonas' claim as a suit to enforce an implied trust, which fixed the prescriptive period applied to the action.

Section 47 of Presidential Decree Number 1529, as quoted by the trial court and carried into the decision, provides:

No title to registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession.

This defeated the Albareces' defense that long possession had made them owners.

Ruling

On the procedural issues, the Court held that the objections came too late. Verification and the certification against forum shopping are not jurisdictional but mere formal requirements, and any objection must be raised in the proceedings below, not for the first time on appeal. On docket fees, the Court relaxed the mandatory rule where there is no deliberate intent to defraud and a willingness to pay, ordering the Ditonas to pay the difference, which constitutes a lien on the judgment. On indispensable parties, the Albareces voluntarily submitted to the court's jurisdiction, and their representative admitted in open court that his co-heirs authorized him. On substitution, the trial court had ordered the substituted plaintiffs, and no objection was filed. The Court reminded that it is far better to dispose of a case on the merits than on technicality.

On the collateral attack issue, the Court held that quieting of title is not a collateral attack. The Ditonas did not assail the validity of the Albareces' certificate; they sought removal of a cloud over a portion allegedly wrongfully included in it. Since the Albareces themselves claimed ownership in their answer, the trial court could rightfully pass on ownership.

On which title prevails, the Court applied the rule that between two certificates covering the same land, the earlier date prevails, and the holder of the prior certificate is entitled to the land as against the person relying on the second. The Ditonas' title was registered in 1954, derived from a 1932 original certificate; the Albareces' was issued only in 1995. The Ditonas therefore prevail.

On prescription, the Court treated the action as one to enforce an implied trust under Article 1456. Where the plaintiff is not in possession, the action prescribes in ten years from the issuance of the certificate; where the plaintiff is in possession, it does not prescribe. The Ditonas were not in possession, since the gasoline station stood on the land, but they filed suit on 15 July 2003, within ten years of the 16 June 1995 issuance. Prescription had not set in, and neither did laches defeat a registered owner.

On estoppel, the Court found none, because the Albareces had occupied the land long before the 1999 complaint over the gasoline station, so the Ditonas did not mislead them.

On the builders in good faith, the Court upheld the trial court's finding that the Albareces were builders in good faith entitled to reimbursement of useful and necessary expenses, since they believed they owned the land.

Doctrine

• Between two certificates of title covering the same land in whole or in part, the earlier certificate prevails, and the holder of the prior title is entitled to the land as against the person relying on the later one.
• An action for quieting of title, seeking removal of a cloud over a portion wrongfully included in another's certificate, is a direct attack and not a collateral attack under Section 48 of the Property Registration Decree.
• Where property is acquired through mistake or fraud, the holder becomes a trustee of an implied trust under Article 1456; if the plaintiff is not in possession, the action prescribes in ten years from the issuance of the certificate, and if the plaintiff is in possession, it does not prescribe.
• Under Section 47 of Presidential Decree Number 1529, prescription, adverse possession, and laches cannot defeat the title of the registered owner.
• Verification, the certification against forum shopping, and the payment of docket fees are not jurisdictional; objections must be timely raised, and liberal payment is allowed absent intent to defraud.

Disposition

The Supreme Court affirmed the trial court's judgment in favor of the Ditonas, declaring them the true owners entitled to reconveyance of the 622 square meters upon reimbursement of the Albareces' useful and necessary expenses, with the Ditonas liable for the difference in docket fees as a lien on the judgment.

Remember This

Memorize the line: between two certificates over the same land, the earlier title prevails, and prescription and laches cannot defeat a registered owner. Examiners use this case on quieting of title as a direct attack, on the ten-year prescriptive period for implied trusts, and on the liberal treatment of procedural defects.