HEIRS OF MANUEL A. ROXAS AND TRINIDAD DE LEON VDA. DE ROXAS (IN SUBSTITUTION OF ORIGINAL PETITIONER), PETITIONERS, VS. COURT OF APPEALS AND MAGUESUN MANAGEMENT & DEVELOPMENT COR…

Heirs of Roxas versus Maguesun Management and Development Corporation

The Case

This is a petition for review brought by the heirs of Trinidad de Leon Vda. de Roxas against Maguesun Management and Development Corporation and the Court of Appeals. The petitioner seeks to reopen and set aside a decree of registration covering two parcels of unregistered land in Tagaytay City, on the ground that the corporation obtained the decree through actual fraud. The case matters because it is the Supreme Court's clearest teaching on what kind of fraud can overturn a Torrens title, and on how an applicant's intentional omission of an occupant or claimant from the application for registration deprives that person of a day in court.

Procedural History

Maguesun Corporation filed an application for registration of the two lots before the Regional Trial Court of Cavite, Branch 18. After publication and an order of general default, the trial court granted the application in a three-page decision, and later issued the order for issuance of the decree. Acting through her caretaker, Trinidad de Leon Vda. de Roxas learned of the sale and registration only when the caretaker was asked to vacate. She then filed a petition for review of the decree of registration before the same Regional Trial Court, alleging actual fraud. The trial court dismissed the petition, giving greater weight to the Philippine National Police document examiner and concluding that the documents were not forged, and that if they were, it was Zenaida Melliza and not Maguesun Corporation who was responsible. On appeal, the Court of Appeals affirmed in a decision dated December 8, 1994, holding that the petitioner failed to show actual or extrinsic fraud, that the irregularities were not patent, and that publication in the Official Gazette sufficed to confer jurisdiction. The case reached the Supreme Court by petition for review.

Facts

On July 2, 1990, Maguesun Corporation applied for registration of two parcels of unregistered land in Barangay Sungay, Tagaytay City, with areas of 3,641 and 10,674 square meters. In support, it presented a Deed of Absolute Sale dated June 10, 1990, executed by Zenaida Melliza as vendor for 170,000 pesos. Zenaida Melliza had supposedly bought the same property from Trinidad de Leon Vda. de Roxas for 200,000 pesos two and a half months earlier, as shown by a Deed of Sale dated March 26, 1990 and an Affidavit of Self-Adjudication dated March 24, 1990.

Notices of initial hearing were sent to Hilario Luna, Jose Gil and Leon Luna based on the application. Trinidad de Leon Vda. de Roxas was not named as an adjoining owner, occupant or adverse claimant, so no notice reached her. Publication was made in the Official Gazette and in the Record Newsweekly. An order of general default was issued, and the trial court granted the application on February 13, 1991. The order for issuance of the decree followed on March 14, 1991, after the trial court had dismissed the earlier registration case filed by Manuel A. Roxas and Trinidad de Leon.

Trinidad de Leon Vda. de Roxas alleged that the lots were among the properties she inherited from her husband, former President Manuel A. Roxas, who died on April 15, 1946; that her family had possessed the property openly, continuously and adversely in the concept of owner for more than thirty years; that she never met Zenaida Melliza; and that her signature was forged in both the Deed of Sale and the Affidavit of Self-Adjudication. She also charged Maguesun Corporation with knowledge of the fraud because its president, Manolita Guevarra Suntay, was her niece, who used to take care of the registration and insurance of her cars.

Issues

• Whether or not Maguesun Corporation committed actual fraud in obtaining the decree of registration, sufficient to reopen and review the decree.
• Whether or not the corporation's disclosure of the petitioner's interest elsewhere in the records cured its omission of her name in the application for registration.
• Whether or not publication of the notice of initial hearing in the Official Gazette alone satisfied the requirements of the law.
• Whether or not forgery attended the questioned documents, and whether the corporation was an innocent purchaser for value.

Applicable Provisions

Section 32 of Presidential Decree Number 1529, the Property Registration Decree, provides:

Section 32. Review of decree of registration; period. A decree of registration obtained by fraud may be reviewed or reopened by a person aggrieved thereby, if no innocent purchaser for value has acquired an interest. Upon the expiration of one year from the date of entry of the decree, or of the decree of the Chief of the General Land Registration Office, as the case may be, the decree of registration shall be conclusive upon and against all persons, including the National Government and all branches thereof, whether mentioned by name in the application, notice, or citation, or included in the general description "To all whom it may concern." Such decree shall not be opened by reason of the absence, infancy, or other disability of any person affected thereby, nor by any proceeding in any court for reversing judgments or decrees, subject, however, to the exception stated in Section 38 and to the right of any person deprived of land or of any estate or interest therein by decree of registration obtained by fraud to file in the competent Court of First Instance a petition for review within one year after entry of the decree, provided no innocent purchaser for value has acquired an interest.

This provision is the very basis for reopening the decree, and it limits that remedy to fraud and to a one-year period.

Section 15 of Presidential Decree Number 1529 provides:

Section 15. Form and contents. The application for registration shall be in writing and shall be signed by the applicant or by his duly authorized agent, and shall contain the following data: (a) The full name and address of the applicant; (b) A description of the land applied for, stating its assessed value, if known, and the location, boundaries and area; (c) The citizenship of the applicant; (d) The full names and addresses of all occupants of the land and those of the adjoining owners, if known, and if not known, the extent of the search made to find them; (e) The full names and addresses of all persons mentioned in paragraphs (a), (b), (c) and (d) of Section 15 of this Decree; (f) The assessed value of the land and the amount of the last real estate tax paid thereon; (g) The nature of the title to be registered; (h) The value of the improvements, if any; and (i) Such other data as may be required by the Commissioner of Land Registration.

This provision required the corporation to name all occupants and adjoining owners, which it failed to do.

Section 23 of Presidential Decree Number 1529 provides:

Section 23. Notice of initial hearing. The Commissioner of Land Registration shall cause a notice of initial hearing to be published once in the Official Gazette and once in a newspaper of general circulation in the Philippines: Provided, however, that the publication in the Official Gazette shall be sufficient to confer jurisdiction upon the court. The notice shall be mailed by the Commissioner of Land Registration to the applicant, to all persons named in the application, and to all other persons whose names appear in the records of the Register of Deeds as having an interest in the land.

This provision governs publication and the mailing of notices, and it is the provision the Court of Appeals relied on for jurisdiction.

Section 14 of Presidential Decree Number 1529 provides:

Section 14. Who may apply. The following persons may file in the proper Court of First Instance an application for registration of title to land, whether personally or through their duly authorized representatives: (1) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier.

This provision is the basis for the petitioner's own right to registration, given her long possession.

Ruling

On the first issue, the Court ruled that Maguesun Corporation committed actual fraud. The Court held that the fraud contemplated by Section 32 of Presidential Decree Number 1529 is actual and extrinsic, and includes an intentional omission of a fact required by law. The corporation's application declared that the land was unoccupied and named only Hilario Luna, Jose Gil and Leon Luna as adjoining owners, when in truth the Roxas family had possessed the property through their caretaker, Jose Ramirez. The Court found the discrepancy unexplained and intentional: the original application submitted in the registration case had the word "Roxas" erased and replaced with "Provincial Road all at Tagaytay City," while the copy submitted in the review case retained the word "Roxas." This concealment kept the Roxas family ignorant of the proceedings and deprived them of their day in court.

On the second issue, the Court rejected the Court of Appeals' view that the corporation's later references to the petitioner cured the defect. The Court held that disclosure of an adverse interest, occupation and possession must be made at the time of the application for registration, otherwise the persons concerned will not be sent notices of the initial hearing and will miss the opportunity to oppose.

On the third issue, the Court held that while publication in the Official Gazette is sufficient to confer jurisdiction, publication in a newspaper of general circulation remains an indispensable procedural requirement, couched in mandatory terms and aimed at giving as wide publicity as possible. The failure to publish in such a newspaper did not affect jurisdiction but was material in assessing the applicant's right or title.

On the fourth issue, the Court found forgery attendant. It gave more weight to the National Bureau of Investigation examiner, who testified with specificity that the questioned and sample signatures were not written by the same person, and noted the petitioner's categorical denial, her age, her familiarity with the value of her properties, and the implausibility of selling more than thirteen thousand square meters of prime property for a measly 200,000 pesos. The irregularities in the Affidavit of Self-Adjudication, including the wrong residence and the false statement that she was the sole heir, were too glaring to ignore. The corporation was therefore not an innocent purchaser for value, and Zenaida Melliza conveyed no title because she was not the owner.

Doctrine

A decree of registration may be reopened or reviewed only on the ground of actual fraud, which is also called extrinsic fraud, and the petition must be filed within one year from entry of the decree, by a person with a real and dominical right, where no innocent purchaser for value has acquired an interest. Actual fraud proceeds from an intentional deception by misrepresentation or concealment of a material fact, and it includes an intentional omission of a fact required by law. The intentional omission of an occupant, adjoining owner or adverse claimant from the application for registration, as required by Section 15 of Presidential Decree Number 1529, is actual fraud because it prevents notice of the initial hearing and deprives the omitted person of a day in court. Publication in the Official Gazette confers jurisdiction, but publication in a newspaper of general circulation remains an indispensable procedural requirement.

Disposition

The petition was granted; the decision of the Court of Appeals was reversed and set aside, and registration of title over the two parcels of land was awarded to the petitioner.

Remember This

Memorize this line: the fraud that reopens a Torrens decree is actual and extrinsic fraud, and the intentional omission of an occupant or claimant from the application for registration is actual fraud because it deprives that person of a day in court. Examiners use this case in land registration and property questions on the grounds for reopening a decree, the one-year period, the innocent purchaser for value, and the mandatory publication in a newspaper of general circulation.