G.R. No. 139672 . March 4, 2009.
GREGORIO ARANETA UNIVERSITY FOUNDATION, Petitioner, vs. THE REGIONAL TRIAL COURT OF KALOOKAN CITY, BRANCH 120, REGISTER OF DEEDS OF KALOOKAN CITY, NATIONAL HOUSING AUTHORITY, HEIRS OF GREGORIO BAJAMONDE AND SATURNINA MENDOZA, AND THE REMINGTON REALTY DEVELOPMENT, INC., Respondents.

FACTS

The Gonzales/Maysilo estate was expropriated by the Republic with the understanding it would be resold to its occupants. The occupants/tenants filed Civil Case No. 6376 (now Civil Case No. C-760) to compel the PHHC to sell them their occupied portions. Petitioner Gregorio Araneta University Foundation (GAUF) intervened, claiming 52 tenants conveyed their priority rights to purchase a portion of the estate to it via a “Kasunduan.” A compromise agreement based on this “Kasunduan” was approved by the court, which included Lots 75 and 54 awarded to Gregorio Bajamonde. GAUF was able to register TCT No. C-24153 in its name for these lots. However, in separate civil cases (Nos. 17347 and 17364), the “Kasunduan” and the compromise agreement were declared null and void for being a forgery, a ruling sustained by the Court of Appeals. Consequently, upon motion of the heirs of Gregorio Bajamonde in Civil Case No. C-760, the RTC issued a Joint Order dated August 29, 1986, declaring any transfer of Lots 75 and 54 from Bajamonde to GAUF rescinded, ordering the Register of Deeds to cancel GAUF’s TCT and issue new titles in the name of Gregorio Bajamonde or his heirs, and ordering the issuance of a writ of possession. An order for execution followed on December 23, 1988. GAUF’s title was cancelled, and new titles were issued to Bajamonde’s heirs, who later sold a portion. GAUF filed a petition for annulment of the RTC’s orders with the CA, arguing they constituted a collateral attack on its certificate of title, issued without jurisdiction, and were void. The CA denied the petition.

ISSUE

Whether the Regional Trial Court had jurisdiction to issue the Joint Order dated August 29, 1986 and the Order dated December 23, 1988, which directed the cancellation of GAUF’s Transfer Certificate of Title No. C-24153 over Lots 54 and 75 and the issuance of new titles in the name of the Heirs of Gregorio Bajamonde.

RULING

The Supreme Court denied the petition and affirmed the assailed CA decision. The RTC had jurisdiction to issue the orders. The proceedings did not constitute a prohibited collateral attack on GAUF’s title. A collateral attack occurs when, in an action for a different relief, an attack on a judgment is made as an incident. Here, while Civil Case No. C-760 was originally for specific performance, GAUF’s title was derived from the compromise agreement and “Kasunduan” that were subsequently declared null and void in final and executory judgments in other cases. Since the very basis of GAUF’s title was a nullity, the title itself was void and could be assailed at any time. The cancellation of GAUF’s title was a necessary consequence of the final declaration of nullity of the source documents. Furthermore, the principle of res judicata barred GAUF’s petition for annulment, as the validity of the “Kasunduan” and the compromise agreement had already been conclusively settled. The orders for cancellation and issuance of writs of possession had also been upheld in prior final decisions. The Court emphasized the policy of judicial stability and the need to avoid disturbing final and executory judgments.