G.R. No. 170677, March 11, 2020
VSD Realty & Development Corporation, Petitioner, vs. Uniwide Sales, Inc. and Dolores Baello Tejada, Respondents.

FACTS

Petitioner VSD Realty & Development Corporation filed a complaint for annulment of title and recovery of possession against respondents Uniwide Sales, Inc. and Dolores Baello Tejada. VSD sought to nullify Baello’s Transfer Certificate of Title (TCT) No. (35788) 12754 and recover possession of a property occupied by Uniwide under a lease from Baello. VSD claimed ownership based on TCT No. T-285312, derived from a title (TCT No. 265777) issued to Felisa Bonifacio pursuant to an Order in LRC Case No. C-3288, which authorized the segregation of the subject lot (Lot 23-A-4-B-2-A-3-A) from the Maysilo Estate covered by Original Certificate of Title (OCT) No. 994. VSD alleged Baello’s title was spurious because its technical description was general, did not match any lot in the relevant subdivision plan (Psd-706), and lacked a legal basis. Baello claimed she inherited the property from her adoptive mother, Jacoba Galauran, through a probated will, and her title was issued in 1954. The Regional Trial Court ruled in favor of VSD, declaring Baello’s title null and void. The Court of Appeals reversed, dismissing the complaint and upholding the presumption of validity of Baello’s Torrens title. The Supreme Court initially granted VSD’s petition and reinstated the RTC decision with modification but later issued a Resolution remanding the case to the Court of Appeals for further proceedings to determine which party derived valid title from the legitimate OCT No. 994.

ISSUE

The central issue, as directed by the Supreme Court for remand, was to determine which of the conflicting claims of title should prevail by establishing: (1) whether the titles of Felisa Bonifacio and VSD can be traced to the legitimate OCT No. 994; (2) whether Eleuteria Rivera Bonifacio had the right to assign the property to Felisa Bonifacio; (3) whether Felisa Bonifacio’s title was tampered with to fraudulently reflect derivation from OCT No. 994; (4) whether Baello’s title can be traced to the legitimate OCT No. 994; (5) whether the technical description of Baello’s title covers the subject property; and (6) other necessary matters.

RULING

The Supreme Court, upon review of the Court of Appeals’ Investigation Report, ruled in favor of respondents Uniwide and Baello. The Court found that petitioner VSD failed to prove its title was derived from the legitimate OCT No. 994. The evidence showed that Felisa Bonifacio’s title (TCT No. 265777/T-1325), from which VSD’s title originated, was not traced to the authentic OCT No. 994 but was based on a spurious or fake title. The Court noted discrepancies in the certification of registration entries between the title on file with the Registry of Deeds and its microfilm copy, indicating tampering. Furthermore, the Court found that Eleuteria Rivera Bonifacio, who allegedly assigned rights to Felisa Bonifacio, had no proven ownership interest in the subject property. In contrast, respondent Baello’s title (TCT No. (35788) 12754) was confirmed to be directly traceable to the legitimate OCT No. 994 through a valid chain of transfers. The technical description in Baello’s title was also found to cover the subject property. Consequently, the Court held that Baello’s title was valid and superior. The Court reinstated the Court of Appeals’ Decision dismissing VSD’s complaint for annulment of title and recovery of possession.