LUCIANO P. PAZ, PETITIONER, VS. REPUBLIC OF THE PHILIPPINES, ACTING THROUGH THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, PUBLIC ESTATES AUTHORITY, FILINVEST DEVELOPMENT …

Paz versus Republic of the Philippines

The Case

This is Luciano P. Paz versus the Republic of the Philippines, joined by the Department of Environment and Natural Resources, the Public Estates Authority, Filinvest Development Corporation, and Filinvest Alabang, Incorporated. The petitioner, claiming to own roughly fourteen thousand three hundred ten hectares of land spread across several cities and the province of Laguna, filed what he styled as a petition for the cancellation of a certificate of title under Section 108 of the Property Registration Decree. The case matters because it draws the boundary between a genuine amendment or alteration of a certificate of title and a disguised action for reconveyance — and it teaches that a litigant cannot escape the jurisdictional requirements of an initiatory pleading by giving his complaint a different name.

Procedural History

The petitioner filed his petition for cancellation of title before the Regional Trial Court of Muntinlupa City, Branch 276, impleading the Republic, Filinvest Development Corporation, and Filinvest Alabang, Incorporated as respondents. The two Filinvest corporations moved to dismiss on several grounds, among them that the dispute was litigable only in an ordinary action, that the petition was not authorized by Section 108, that summons was not validly served, that docket fees were unpaid, and that no certificate against forum shopping was attached. The trial court granted the motion to dismiss, reasoning that the petition bore all the elements of an action for recovery and was in truth an initiatory pleading subject to the mandatory and jurisdictional requirements of the Rules of Court.

The petitioner then went to the Court of Appeals by petition for certiorari, imputing grave abuse of discretion to the trial court. The Court of Appeals dismissed the petition, holding that the alleged errors were at most errors of judgment correctible by appeal, not errors of jurisdiction. The petitioner's motion for partial reconsideration was denied. He then came to the Supreme Court by petition for review on certiorari.

Facts

On the twenty-ninth of November, 2000, the petitioner filed a petition for the cancellation of Original Certificate of Title Number 684, which was registered in the name of the Republic. He alleged that he owned two parcels of land, one covering about seventy-one million square meters and the other about seventy-one million square meters, for a total landholding of approximately fourteen thousand three hundred ten hectares. He further alleged that Original Certificate of Title Number 684 included Lot 392 of the Muntinlupa Estate, with an area of about two hundred forty-four hectares, and that Lot 392 had been segregated from that title, producing Transfer Certificate of Title Number 185552, also in the name of the Republic.

According to the petition, Filinvest Development Corporation and Filinvest Alabang, Incorporated developed Lot 392 into a subdivision under a joint venture agreement with the Government. Lot 392 was further subdivided, the transfer certificate was cancelled, and individual titles were issued in the names of the Republic and Filinvest Alabang, Incorporated. Those subdivision lots were then sold to third parties.

The petitioner prayed that Original Certificate of Title Number 684, Transfer Certificate of Title Number 185552, and all titles derived from it be cancelled, and that a new title be issued in his name free from all liens and encumbrances. He also prayed for damages and attorney's fees. The Filinvest corporations moved to dismiss, and the trial court granted the dismissal, setting the case on its present course.

Issues

• Whether or not the petitioner's petition for cancellation of title falls within the situations contemplated by Section 108 of the Property Registration Decree.
• Whether or not the petition is a mere incident of the original registration proceeding, exempt from the payment of docket fees, the service of summons, and the certification against forum shopping.
• Whether or not the Court of Appeals correctly dismissed the petition for certiorari for failure to show grave abuse of discretion amounting to lack or excess of jurisdiction.

Applicable Provisions

Section 108 of Presidential Decree Number 1529, the Property Registration Decree, provides:

Section 108. Amendment and alteration of certificates. – No erasure, alteration, or amendment shall be made upon the registration book after the entry of a certificate of title or of a memorandum thereon and the attestation of the same by the Register of Deeds, except by order of the proper Court of First Instance. A registered owner or other person having interest in the registered property, or, in proper cases, the Register of Deeds with the approval of the Commissioner of Land Registration, may apply by petition to the court upon the ground that the registered interest of any description, whether vested, contingent, expectant or inchoate appearing on the certificate, have terminated and ceased; or that new interest not appearing upon the certificate have arisen or been created; or that an omission or an error was made in entering a certificate or any memorandum thereon, or on any duplicate certificate: or that the same or any person in the certificate has been changed or that the registered owner has married, or, if registered as married, that the marriage has been terminated and no right or interest of heirs or creditors will thereby be affected; or that a corporation which owned registered land and has been dissolved has not yet convened the same within three years after its dissolution; or upon any other reasonable ground; and the court may hear and determine the petition after notice to all parties in interest, and may order the entry or cancellation of a new certificate, the entry or cancellation of a memorandum upon a certificate, or grant any other relief upon such terms and conditions, requiring security and bond if necessary, as it may consider proper; Provided, however, That this section shall not be construed to give the court authority to reopen the judgment or decree of registration, and that nothing shall be done or ordered by the court which shall impair the title or other interest of a purchaser holding a certificate for value and in good faith, or his heirs and assigns without his or their written consent. Where the owner's duplicate certificate is not presented, a similar petition may be filed as provided in the preceding section.

This provision defines the limited remedy the petitioner invoked, and its proviso supplies the barrier that defeats his petition.

Ruling

On the first issue, the Court held that the proceeding under Section 108 is available only in seven situations: when registered interests of any description, whether vested, contingent, expectant, or inchoate, have terminated and ceased; when new interests have arisen or been created which do not appear upon the certificate; when an error, omission, or mistake was made in entering a certificate or a memorandum thereon or on a duplicate certificate; when the name of a person on the certificate has been changed; when the registered owner has been married, or, being registered as married, the marriage has been terminated without affecting the rights of heirs or creditors; when a corporation that owned registered land has been dissolved and has not conveyed the land within three years; and when there is reasonable ground for the amendment or alteration of title. The Court agreed with the trial court and the Court of Appeals that the petitioner was in reality seeking the reconveyance of the property, not the cancellation of a certificate of title. His petition fell under none of the seven situations and was rightly dismissed.

The Court added that granting the petition would reopen the decree of registration and impair the rights of innocent purchasers for value, since the one-year period to reopen the decree had long lapsed and the lands had already been subdivided and sold to third persons. The petition thus tended to violate the proviso of Section 108:

Provided, however, That this section shall not be construed to give the court authority to reopen the judgment or decree of registration, and that nothing shall be done or ordered by the court which shall impair the title or other interest of a purchaser holding a certificate for value and in good faith, or his heirs and assigns without his or their written consent.

On the second issue, the Court held that the petition was not a mere continuation of the previous registration proceeding. Shorn of its thin disguise, it was a distinct and independent action to seek the reconveyance of realty and to recover damages. The petitioner was therefore bound to perform the jurisdictional acts of an initiatory pleading: paying the correct docket fees, causing the service of summons on the adverse parties, and attaching a certification against forum shopping. His failure to do so was fatal and warranted the dismissal.

On the third issue, the Court held that the Court of Appeals properly dismissed the petition for certiorari, because the trial court did not abuse its discretion, least of all gravely. The petitioner had shown no more than an error of judgment, which is correctible by appeal and not by certiorari.

Doctrine

Section 108 of the Property Registration Decree is a remedy of limited scope. It authorizes only the amendment or alteration of a certificate of title in the seven situations the Court enumerated, and it may never be used to reopen a decree of registration or to impair the title of a purchaser for value and in good faith. A petition that in substance seeks the recovery of ownership, the cancellation of a title, and the issuance of a new one in the petitioner's name is an action for reconveyance, whatever label it bears. Being an initiatory pleading, it must comply with the jurisdictional requirements of docket fees, summons, and a certification against forum shopping. Certiorari lies only for grave abuse of discretion amounting to lack or excess of jurisdiction, never to correct an error of judgment.

Disposition

The Supreme Court denied the petition for review on certiorari and affirmed the decision of the Court of Appeals, with costs against the petitioner.

Remember This

Memorize the line that a petition under Section 108 cannot be used to reopen the decree of registration or to impair the title of an innocent purchaser for value. Examiners use this case to test whether a candidate can see through the label of a pleading and recognize a disguised action for reconveyance that must satisfy the rules on initiatory pleadings.