PIONEER INSURANCE AND SURETY CORPORATION, PETITIONER, VS. HEIRS OF VICENTE CORONADO, MAURA CORONADO, SIMEON CORONADO, JULIAN CORONADO AND CRUZ B. CARBON, RESPONDENTS.

Pioneer Insurance and Surety versus Heirs of Vicente Coronado

The Case

This is a petition for review on certiorari brought by Pioneer Insurance and Surety Corporation against the heirs of Vicente Coronado, namely Maura, Simeon, and Julian, all surnamed Coronado, together with Cruz Carbon. The Coronados sued to annul the Torrens title held by Pioneer and to recover a parcel of land they say they inherited from Doroteo Garcia. The case matters because it forces the Court to reconcile two ideas that pull in opposite directions: the indefeasibility of a Torrens certificate of title, and the power of a court to make a finding about where the land covered by that title actually sits. The Court reminds us that a certificate of title is conclusive evidence not only of ownership but also of the location of the property, and that a court cannot, on incomplete survey data, effectively rewrite that location to the prejudice of the registered owner.

Procedural History

The Coronados and Cruz Carbon filed a complaint for annulment of title and reconveyance before the Regional Trial Court of Antipolo, Rizal. During the proceedings the trial court ordered the Lands Management Bureau to survey the subject property, and later constituted a commission of three geodetic engineers to conduct a final ground verification. The trial court adopted the findings of the majority of the commission and rendered judgment recognizing the Coronados as the legal heirs of Doroteo Garcia and confirming their ownership of the land covered by their survey plan and tax declaration. It declined to annul Pioneer's certificate of title, but held that the parcel described in that title is not the same parcel claimed by the Coronados. Pioneer appealed to the Court of Appeals, which affirmed the trial court decision and later denied Pioneer's motion for reconsideration. Pioneer then came to the Supreme Court by petition for review on certiorari.

Facts

The Coronados trace their claim to Doroteo Garcia, who, they allege, owned a parcel of land of about twenty three hectares in Antipolo, Rizal, declared for taxation purposes as early as 1906. Garcia possessed the land from Spanish times, and upon his death his heirs, the Coronados, continued in possession. In December 1970 the Coronados, together with Cruz Carbon, who had been given a portion for legal services, executed a deed of extrajudicial partition of the property among themselves.

The Coronados later learned that a portion of the land had been registered in the name of Gaudencio Bocobo under a free patent, and that Bocobo had mortgaged it to Pioneer as security for a loan. When Bocobo failed to pay, the mortgage was foreclosed and a transfer certificate of title was issued in Pioneer's name. Pioneer, for its part, maintained that it had examined Bocobo's title before accepting the mortgage, found it clean, and that no one else had claimed the property from 1977 until it received the summons.

The trial court ordered surveys. The first, by Engineer Unciano, concluded that the property described in Pioneer's title is situated in San Mateo, Rizal, and not in the vicinity of the land claimed by the Coronados. A commission of three geodetic engineers was then constituted. The majority report likewise concluded that the property described in Pioneer's title is not located where the subject property is. The third engineer, Engineer Mercado, dissented, and using the tie lines indicated in the title, concluded that a portion of the subject property overlapped the property described in Pioneer's certificate of title. The trial court and the Court of Appeals adopted the majority findings.

Issues

• Whether or not the action for reconveyance is barred by prescription and laches, given that several years had passed since the certificate of title was issued.
• Whether or not the trial court and the Court of Appeals erred in declaring that the property covered by Pioneer's certificate of title is not located in Antipolo City, despite the location stated on the face of the Torrens title.
• Whether or not Pioneer is entitled to damages and attorney's fees.

Applicable Provisions

The decision does not quote a specific statutory article; it rests on the settled doctrine of the Torrens system, which the Court states in its own words. The governing principle on indefeasibility is expressed thus:

A certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein.

This principle bears on the case because it is the shield Pioneer invokes against any finding that would move its land to another place.

On the purpose of registration, the Court states:

The real purpose of the Torrens System of land registration is to quiet title to land and put stop forever to any question as to the legality of the title.

This bears on the case because it explains why a court may not, in effect, modify a certificate of title on incomplete information.

On the scope of what the certificate proves, the Court adopts its earlier ruling:

A certificate of title is conclusive evidence not only of ownership but also the location of the property.

This is the pivotal principle, because the lower courts' finding on location collided with it.

Ruling

On the first issue, the Court held that the action had not prescribed. The records showed that the respondents had been in possession of the subject property since 1938, and the Court restated the rule that if a person claiming to be the owner is in actual possession of the property, the right to seek reconveyance, which in effect seeks to quiet title, does not prescribe. Prescription and laches therefore did not bar the complaint.

On the second issue, the Court ruled in favor of Pioneer. It acknowledged the general rule that factual findings of the trial court, affirmed by the Court of Appeals, are accorded great respect, finality, and binding effect when supported by substantial evidence. But it found that the conclusion on location lacked adequate basis. Both lower courts relied on verification surveys, yet those surveys were conducted on the subject property only. No survey was ever conducted on the area where the property covered by Pioneer's title is allegedly located, and no effort was made to plot the tie lines indicated in its technical description. The Court reasoned that the fact that the property cannot be plotted on a certain area does not foreclose the possibility that there is simply an error in the technical description, or that it is only deficient. Unless the exact location of the property described in the certificate of title is determined, the Court said, it cannot safely and definitively conclude that it is not located at a certain place.

The Court stressed that while the lower courts maintained the indefeasibility of the certificate and desisted from annulling it, by declaring that the property is not located in Antipolo City, the location stated in the certificate, they in effect modified the same to the prejudice of Pioneer, and did so on incomplete information. It therefore set aside the Court of Appeals decision and resolution and remanded the case to the trial court for the determination of the exact location of Pioneer's property.

On the third issue, the claim for damages and attorney's fees did not prosper, since the case was remanded for further proceedings rather than finally resolved in Pioneer's favor on the merits of the complaint.

Doctrine

A Torrens certificate of title is evidence of indefeasible and incontrovertible title in favor of the person named in it, and it is conclusive evidence not only of ownership but also of the location of the property. A court that declares the registered land to be situated elsewhere, without first determining its exact location, in effect modifies the certificate to the prejudice of the registered owner. The exact location of registered property must be established by plotting the tie lines in its technical description and by surveying the area it describes, not merely the land claimed by the adverse party. Finally, the right to seek reconveyance does not prescribe so long as the claimant is in actual possession of the property.

Disposition

The Court granted the petition, set aside the Court of Appeals decision and resolution, and remanded the case to the Regional Trial Court of Antipolo, Rizal, for further proceedings to determine the exact location of Pioneer's property.

Remember This

Memorize this line: a certificate of title is conclusive evidence not only of ownership but also of the location of the property. Examiners use this case to test the limits of a court's power over a Torrens title, and to test whether you know that a finding on location made without plotting the tie lines is a modification of the title in disguise.