ENRIQUE KHO AND JOSEFINA KHO, PETITIONERS, VS. THE HON. COURT OF APPEALS, ROQUE GO, ALIAS GO KHE, AND NATIVIDAD OPENA, RESPONDENTS.

Challenged in this petition for review on certiorari is
the decision of the respondent Court of Appeals holding that the complaint
filed by petitioners be dismissed for failure to implead an indispensable
party.

On April 23, 1973, petitioners Enrique Kho and Josefina Kho filed
a complaint for recovery of possession and ownership of a parcel of land with
ejectment^[1]
against private respondents Roque Go alias Gho Khe and Natividad Opena. The complaint alleged that petitioners are
the registered owners of Lot 313-B containing an area of one hundred ninety
five (195) square meters situated in Butuan City and covered by Transfer
Certificate of Title No. RT­-5024. Sometime in 1972, private respondent Roque Go was ordered by the
government authorities to vacate a portion of the sidewalk facing the city street
and to demolish his building located just beside petitioners’ property. Later, without securing any building permit,
he constructed a building of wooden materials which encroached upon the
property of petitioners. Despite
demand, he refused to demolish the building and even leased the same to private
respondent Natividad Opena.

Private respondents, in their answer,^[2]
averred that, in 1932, Asuncion Torralba and Cesario Cultura were declared
co-owners pro indiviso of Lot 313 in
Cadastral Case No. 10, G.L.R.O. Record No. 1236. Lot 313 was divided equally, each having an area of one hundred
sixty eight (168) square meters. By
their agreement, the eastern half of the lot (Lot 313-A) became the share of
Cesario Cultura while the western half (Lot 313-B) was the share of Asuncion
Torralba. On June 14, 1934, Cesario
Cultura sold his share by pacto de retro sale to Go Kanga, uncle of Roque Go. On even date, Go Kanga took actual physical possession of the
lot. When Cesario Cultura failed to
repurchase the property within the stipulated one-year period, Go Kanga became
the absolute owner of Lot 313-A. Upon
his death, the lot was inherited by his only brother Go Loco, father of Roque
Go. Roque Go and his brother Go Kiong,
in turn, inherited the property from their father upon his death. On March 15, 1938, Cesario Cultura sold to
Go Kiong and Roque Go whatever right he might have over Lot 313-A as evidenced
by a Deed of Sale which was recorded in the Office of the Register of Deeds on
January 30, 1964. On October 18, 1948,
Go Kiong and Roque Go sold the same parcel of land to Isidro (or Isidoro) Ato
but remained in possession of the property as lessees. They maintained that the building
constructed on a 26 sq. meter
portion is within Lot 313-A and that petitioners’ title over the said portion
is null and void.

On August 20, 1974, the trial court^[3] ruled
in favor of petitioners. It made the
following findings of fact:

“x x x               x x
x                   x x x

First. TCT
No. RT-5024 of the Registry of Deeds for the City of Butuan (Exh. B) shows that
Lot 313-B, which is a portion of Lot 313 of the Butuan Townsite, contains ‘an area of ONE HUNDRED NINETY FOUR SQUARE
METERS (194),* registered in the names of
ENRIQUE KHO married to Josefina Con-ui,’ said Enrique Kho and Josefina Con-ui
being the plaintiffs in this case.

Second. While
it is true that said Lot 313, of which Lots 313-A and 313-B are portions, has a
total area of 336 sq. m., as shown by the subdivision plan (Exh. 3), the
petition for reconstitution of Lots 313 (Exhs. 7 and 7-H), and OCT No. RO-125
(N.A.) of the Registry of Deeds for the City of Butuan (Exh. 11), it does not
necessarily mean that Lots 313-A and 313-B have equal areas. The decision of this Court, Branch II, dated
30 October 1969, thru then Judge Manuel Lopez Enage; which is one of the
defendants’ evidence (Exh. 10), begins outright with the statement that the
case is ‘for the recovery of a parcel of land covered by T.C.T. No. RT-872 (Lot
313-A of Subdivision plan Psd-­56971, being a portion of Lot No. 313 of the
Cadastral Survey of Butuan, containing an area of 141 square meters, more or
less.’ Hence, the area of Lot 313-A
(141 sq. m.) and the area of Lot 313-B (194 sq. m.) and up to 335 sq. m., which
approximates 336 sq. m.

Third. Since the
plaintiffs’ TCT No. RT-5024 was issued on 30 May 1969 (Exh. B); the defendants’
documentary evidence consisting of —

Exh. 1, the pacto
de retro sale executed by Cesario
Cultura in favor of Go Kanga on 14 June 1934;

Exh. 2, the Deed of Sale executed by Cesario Cultura in favor of Go
Kiong and Go Keh (sic) on 15 March 1938; and

Exh. 4, the Deed of
Absolute Sale executed by Go Kiong and Go Keh (sic) in favor of Isidoro Ato
over ‘a parcel of land known as
the EASTERN HALF PORTION of the entire parcel of land designated as Lot No.
313′ on 18 October 1948;

is of no consequence for the purposes of
the case at bar, considering that said documents were executed long before 30 May 1969, the date of
issuance of said TCT No. RT-5024. One
of the cardinal features of the Torrens system is indefeasibility of
title. Thus, a person dealing with
registered land is not required to go behind the register to determine the
condition of the property; he is only charged with notice of the burdens on the
property which are noted on the face of the certificate of title, and to
require him to do more is to defeat one of the primary objects of the Torrens
system. While the Land Registration Act
was never designed to serve as a shield for fraud, it cannot be pretended that
the plaintiffs acted in fraud of the defendants, considering that their TCT No.
R0-5024 ‘is a transfer from
Transfer Certificate of Title No. RT-­721, which is cancelled by virtue
hereof.’ At any rate, the defendant Roque Go alias Go Khe is a mere lessee of
Lot 313-A, and defendant Opena is a mere lessee of defendant Go’s building on
said lot, so that they do not have the capacity to question directly, mush
(sic) less collaterally, the validity and/or contents of plaintiffs’ TCT No.
RT-5024.

Fourth. The
plaintiffs have proven that defendant Roque Go alias Go Khe has encroached upon
their land to the extent of 26 sq. m. by constructing a building thereon, as
shown by the testimony of surveyor Tito Domingo and his relocation plan (Exhs.
D, D-1 and D-2).

Fifth. The
plaintiffs have shown that they demanded that defendant Roque Go alias Go Khe
‘demolish the aforementioned building and vacate the premises,’ as shown by the
letter of their counsel dated 24 January 1973, and that defendant Natividad
Opena likewise ‘vacate the premises you
are presently occupying,’ as shown by the letter of the same counsel to her on
the same date (Exh. F), but that defendant Go did not answer while defendant
Opena answered by letter to plaintiffs’ counsel dated 9 February 1973, stating
therein among other things that ‘Only the Court could order me to vacate the
place where I am now occupying’ (Exh. I).

x x x                 x x x                   x
x x.”^[4]

and the dispositive portion says:

“WHEREFORE, the Court hereby renders judgment in favor of the
plaintiffs and against the defendants, as follows:

1. Ordering the defendants to deliver to the
plaintiffs the ownership and/or possession of the disputed twenty-six (26)
square meters that form part of Lot 313-B;

2. Ordering defendant Roque Go to remove his
building out of said twenty-six-square-­meter-portion of Lot 313-B or demolish
said building if necessary;

3. Ordering defendant Natividad Opena to vacate
the premises, without prejudice to whatever rights she may have as against
co-defendant Roque Go alias Go Khe;

4. Ordering defendant Roque Go alias Go Khe to
pay the plaintiffs moral damages in the sum of TWO THOUSAND PESOS (P2,000) and
attorney’s fees and expenses of litigation
in the sum of THREE THOUSAND PESOS (P3,000);

5. Ordering defendant Roque Go alias Go Khe to
pay the costs of this suit; and

6. Dismissing the
defendant’s counterclaims.

SO ORDERED.”^[5]

Private respondent Roque Go appealed to the Court of
Appeals. The appellate court^[6]
reversed the findings of the lower court and ordered the dismissal of the
complaint and the counterclaim on the ground that petitioners failed to implead
Isidro Ato as a party defendant. It
opined that being the owner of Lot 313-A, he is an indispensable party to the
case without whom no final judgment can issue affecting ownership and possession.^[7]

Hence, this petition which raises the sole issue of whether or
not Isidro Ato is an indispensable party whose non-inclusion would result in
the dismissal of this case.

Petitioners insist that Isidro Ato is not an indispensable party
to the suit. They admit that Lots 313-A
and 313-B were originally parts of Lot 313 with an area of 336 sq. meters as
shown by OCT No. RO-125.^[8] Said
title was cancelled by TCT. No. RT-462^[9] in
the name of Urso C. Busa with 196 sq. meter share and Asuncion Torralba with
140 sq. meter share. This title was
later cancelled by TCT No. RT-585^[10] in
the name of Urso C. Busa with 196 sq. meter share and Cesario Cultura with 140
sq. meter share. It was later
subdivided into Lot 313-A with an area of 141 sq. meters covered by TCT No. 720
in the name of Cesario Cultura^[11] and
Lot 313-B with an area of 195 sq. meters covered by TCT No. RT-721 in the name
of Urso C. Busa.^[12]
At the time of the filing of the complaint until the parties rested their
respective cases, the existing title to Lot 313-A was TCT No. RT-827 in the
name of Martina H. Cultura.^[13] The
name of Isidro Ato does not appear in any of the titles that covered Lot 313-A.

Furthermore, the whole area of Lot 313-A has been taken by the
government for the expansion of Juan Luna Street: 27 sq. meters in 1953, 76 sq. meters in 1963 and 38 sq. meters
for the sidewalk, making a total of 141 sq. meters. Even private respondent Roque Go acknowledged this fact in his testimony.^[14]
Since the whole area of Lot 313-A has been expropriated by the government,
Isidro Ato did not have any existing interest in Lot 313-A nor in the
proceeding in the lower court. This,
coupled with respondents’ failure to prove that the area of Lot 313-A is indeed
168 sq. meters, shows no reason to include Isidro Ato as a party defendant.

On the other hand, private respondents maintain that the 26 sq.
meter area in question is part of Lot 313-A which contains an area of 168 sq.
meters and is in the name of Isidro Ato. They allege that by virtue of the decision of the then Court of First
Instance of Agusan, 15th Judicial Region, Branch 11, dated October 30, 1969 in
Civil Case No. 841, wherein Isidro Ato was an intervenor, TCT No. RT-827 in the
name of Martina Cultura was cancelled and intervenor Isidro Ato was declared
the owner of the 141 sq. meter area covered by the aforementioned TCT. This area, including the 26 sq. meter area
in question, constitutes Lot 313-A. Since Isidro Ato has been declared the absolute owner of Lot 313-A, he
is therefore an indispensable party to the present suit.

The contention of private respondents is untenable.

Both parties agree that Lots 313-A and 313-B were originally
parts of Lot 313 with an area of 336 sq. meters. Petitioners acquired their title to Lot 313-B by purchase from
Urso C. Busa by virtue of which TCT No. RT-721 in the name of the latter was
cancelled and TCT No. RT-5024^[15] was
issued in the name of petitioners. When
the parties bought the property, the TCT showed that the area of the property
is 195 sq. meters and was free from any encumbrance. A torrens title is generally a conclusive evidence of ownership
of the land referred to therein.^[16]
Furthermore, every person dealing with registered land may safely rely on the
correctness of the Certificate of Title issued therefor and the law will in no
way oblige him to go beyond the certificate to determine the condition of the
property.^[17]

Private respondents’ allegation that Lot 313-A contains 168 sq.
meters since Lot 313 was divided
equally between Asuncion Torralba and Cesario Cultura is not substantiated by
the evidence on record. The different
TCTs over Lot 313-A consistently showed that said lot contains 141 sq. meters.

While it is true that Carmen Ato Vda. de Go, daughter of Isidro
Ato and a witness for the defense, testified that in 1949, Asuncion Torralba
conveyed to her under a pacto de retro sale and subsequently in
absolute sale, 87 sq. meters of her
share of Lot 313 while 81 sq. meters were sold to Fidel Azote, which were both
acquired later by Urso Busa with a total area of 168 sq. meters,^[18]
such declaration of Carmen Ato Vda. de Go is belied by the evidence on
record. The annotation on the
judicially reconstituted title of Lot 313, OCT No. RO-125, shows that what
Asuncion Torralba conveyed unto Carmen Ato is 115 sq. meters, not 87 sq. meters
as claimed by her, and the same 115 sq. meters were later sold to Urso Busa,
making the total share of Urso Busa 196 sq. meters, as shown in the TCT
subsequently issued in his name. As
found by the trial court, the subdivision of Lot 313 does not necessarily mean
that said lots have equal areas.

In the final analysis, since a total of 141 sq. meters has been
expropriated by the government for the expansion of Juan Luna Street, Isidro
Ato no longer had any interest in the property that had to be protected. Thus, he cannot be an indispensable party
because he is not one with such an interest in the controversy that a final
decree would necessarily affect his rights, such that the courts cannot proceed
without his presence.^[19]

WHEREFORE, PREMISES CONSIDERED, the petition is
hereby GRANTED, the decision of respondent Court of Appeals is REVERSED and SET
ASIDE and the decision of the trial court dated August 20, 1974 is REINSTATED.

SO ORDERED.

Bidin, Davide, Jr., and
Melo, JJ., concur.

Gutierrez, Jr., J., (Chairman), on official leave.

^[1]
Annex “A” of Petition; Rollo, pp. 11-17.

^[2]
Annex “B” of Petition; Rollo, pp. 18-33.

^[3]
Judge Vicente B. Echavez, Jr., CFI of Agusan Del Norte and Butuan City, 15th
Judicial District, Branch II.

*
TCT No. RT-5O24 states that it contains an area of ONE HUNDRED NINETY FIVE
SQUARE METERS although it is numerically written as 194. In this decision, the written words shall
prevail over the figures.

^[4]
Annex “D” of Petition; Rollo, pp. 61-63.

^[5]
Ibid, pp. 64-65.

^[6]
Justice Ambrosio M. Geraldez, ponente with Justices Emilio A. Gancayco
and Porfirio V. Sison, concurring.

^[7]
Annex “E” of Petition; Rollo, pp. 66-72.

^[8]
Annex “A” of Reply; Rollo, p. 215.

^[9]
Annex “B” of Reply; Rollo, p. 216.

^[10]
Annex “C” of Reply; Rollo, p. 217.

^[11]
Annex “D” of Reply; Rollo, p. 218.

^[12]
Annex “E” of Reply; Rollo, p. 219.

^[13]
Annex “F” of Reply; Rollo,
p. 220.

^[14]
TSN, Hearing of February 19, 1974, pp.
23-25.

^[15]
Annex “G” of Reply; Rollo, p. 221.

^[16]
Ching v. Court of Appeals, G.R. No. 59731, January 11, 1990, 181 SCRA 9, citing Section
49, Act 496.

^[17]
Santos v. Court of Appeals, G.R. No. 90380, September 13, 1990, 189 SCRA
550.

^[18]
TSN, Hearing of February 21, 1974, pp. 7-8.

^[19]
Co v. Court of Appeals, G.R. Nos. 86597 and 86614, January 23, 1991, 193
SCRA 198.