LILIA LIWAG, PETITIONER, VS. COURT OF APPEALS AND HEIRS OF THE SPOUSES VICENTE S. CRUZ AND JUANA EUSTAQUIO, AS REPRESENTED BY ADELA CRUZ CAYETANO, NONITA CRUZ AND JOVITA CRUZ, R…

Liwag versus Heirs of the Spouses Cruz

The Case

This is a petition for review brought by Lilia Liwag against the Court of Appeals and the heirs of the spouses Vicente S. Cruz and Juana Eustaquio. Liwag asks the Supreme Court to reverse the appellate resolutions that voided the orders of a land registration court cancelling the heirs' transfer certificates of title. The case matters because it draws a bright jurisdictional line: a land registration court acting on a summary petition cannot annul the final judgment of a co-equal branch of the same regional trial court, and a party who wants a judgment upon compromise set aside must go to the proper forum in a full trial, not to a registration court in a summary proceeding.

Procedural History

The late Vicente S. Cruz had filed a petition for reconstitution of his lost original certificate of title before the then Court of First Instance of Pasig, sitting as a land registration court. That court granted reconstitution, and new titles were issued in his name. After the sale to Liwag and the later events, the heirs filed a separate civil case for nullification of the deeds of sale and cancellation of titles before another branch of the Regional Trial Court of Pasig. In that case, the heirs and Teresita Paz entered into a compromise agreement, which the court approved in a judgment upon compromise. Liwag's petition for relief from that judgment was denied.

Liwag then returned to the land registration court, the branch that had handled the reconstitution, and filed a petition for cancellation of the titles issued under the compromise judgment. That court denied the heirs' motion for inhibition and granted Liwag's petition, ordering cancellation of the heirs' titles and issuance of new titles in her name. The heirs elevated those orders to the Court of Appeals by petition for certiorari. The appellate court initially denied due course, but on reconsideration it granted the relief prayed for and voided the orders. Liwag's motion for reconsideration was denied, so she came to the Supreme Court by petition for review.

Facts

Vicente S. Cruz obtained a reconstitution of his lost original certificate of title over two lots in Marikina, Rizal, with an aggregate area of about 1,307,755 square meters. New titles were issued in his name. In May 1984, Vicente ostensibly sold the lots to Lilia Liwag by a deed of sale. Curiously, in September 1984, the Cruz spouses executed a special power of attorney appointing Liwag as their attorney-in-fact to manage and administer the same property.

In February 1986, Liwag filed an omnibus motion in the reconstitution case, claiming that the titles and the deed of sale had been lost, and praying that the owner's duplicate titles be declared null. The registration court granted the motion and ordered cancellation, and new titles were issued in Liwag's name. In March 1986, Liwag sold the two lots to Teresita L. Paz for four million pesos.

In April 1986, the heirs of the Cruz spouses sued Liwag, Paz, and the Register of Deeds to nullify both deeds of sale as absolutely simulated and to cancel the titles, alleging illegal reconstitution by a court without jurisdiction. In that case, the heirs and Paz entered into a compromise agreement, which the court approved. Under it, the titles in Liwag's name were cancelled and replaced with titles in the names of the heirs and of Paz. Liwag's petition for relief was denied. She then filed the petition for cancellation in the reconstitution case, which the registration court granted, prompting the heirs' petition for certiorari in the Court of Appeals.

Issues

• Whether or not the land registration court, acting on a petition for cancellation of titles under Section 108 of the Property Registration Decree, had jurisdiction over the petition filed by Liwag in the reconstitution case.
• Whether or not the land registration court, as a co-equal and coordinate branch of the same regional trial court, had authority to entertain a petition that in substance sought the annulment of the judgment upon compromise rendered by another branch.
• Whether or not the Court of Appeals, in the certiorari case as formulated, could itself rule on the validity of the judgment upon compromise.

Applicable Provisions

Section 108 of the Property Registration Decree, Presidential Decree No. 1529, 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 in interest may apply by verified petition, in the Court of First Instance of the province or city where the corresponding certificate of title was registered, to correct the name of a person appearing in the certificate of title or to alter, modify or cancel a memorandum or entry appearing therein, or to amend or alter a certificate of title, and the court, after notice and hearing, may order the amendment or alteration if it is satisfied that the same is proper and in accordance with law.

This is the provision Liwag invoked, but the Court held that its summary relief is unavailable where there is a serious adverse claim.

Section 9 of Batas Pambansa Blg. 129 provides:

Section 9. Original jurisdiction. The Intermediate Appellate Court shall exercise original jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction which may be enforced in any part of their respective regions, and to act on all cases where the jurisdiction of any inferior court is in issue.

The Court cited this to show that annulment of a judgment of a co-equal branch falls within the original jurisdiction of the Court of Appeals, not of a registration court.

Ruling

On the first issue, the Court held that the land registration court had no jurisdiction. Although the petition was styled as one for cancellation under Section 108, its material allegations showed that Liwag was really attacking the legality and validity of the compromise agreement approved by the other branch. The proceedings under Section 108 are summary in nature and are allowed only when the allegations disclose that the issues are patently insubstantial. The relief also requires unanimity of the parties, that is, no adverse claim or serious objection. Because the heirs raised serious and weighty objections, Liwag could not avail herself of Section 108, and the registration court should have dismissed the petition without prejudice to her right to file the appropriate action in the proper court.

On the second issue, the Court held that Branch 160, as a co-equal and coordinate branch of the same regional trial court, had no authority to entertain a petition that was in truth one for annulment of the judgment of Branch 162. Such cases fall exclusively within the original jurisdiction of the Court of Appeals under Section 9 of Batas Pambansa Blg. 129.

On the third issue, the Court held that the Court of Appeals could not itself rule on the validity of the judgment upon compromise in the certiorari case as formulated. That would require the presentation of evidence to prove the antecedent facts and the alleged fraud, and not merely incidental facts, and would need a full-blown trial on the merits, which properly pertains to a trial court.

Doctrine

A land registration court acting under Section 108 of the Property Registration Decree exercises only summary jurisdiction. It may grant relief only where the allegations show no genuine or substantial issue and where the parties are unanimous, with no adverse claim or serious objection. Where the petition in substance attacks the validity of a judgment upon compromise rendered by another branch of the same regional trial court, the registration court has no jurisdiction, because a co-equal and coordinate branch cannot annul the judgment of another. The proper remedy is an action for annulment of judgment, which falls within the original jurisdiction of the Court of Appeals, and any factual challenge requiring proof of fraud and antecedent facts must be threshed out in a full trial before the proper trial court.

Disposition

The Supreme Court affirmed the assailed resolutions of the Court of Appeals, without prejudice to Liwag's right to institute the appropriate remedy in the proper forum.

Remember This

Memorize this line: a land registration court under Section 108 cannot annul the final judgment of a co-equal branch, and its summary relief demands unanimity and the absence of serious objection. Examiners use this case to test jurisdiction over annulment of judgment and the limits of summary proceedings in land registration.