G.R. No. 246826 , July 28, 2021
Moldex Realty, Inc. and Rey Ignacio Diaz, Petitioners, vs. Spouses Ernesto V. Yu and Elsie Ong Yu, Respondents.

FACTS

Spouses Yu, owners of two adjoining parcels of land (Lot Nos. 3869-N-1-A and 3869-N-1-B) under TCT Nos. T-280169 and T-280170, filed a complaint for prohibitory injunction with damages against Moldex Realty, Inc. and its Executive Vice President, Rey Ignacio Diaz. They alleged that Moldex encroached on a 3,159-sq.m. portion of Lot 3869-N-1-A by constructing a perimeter fence. Moldex denied encroachment, asserting the fence was within its own property, Lot No. 3870 under TCT No. T-317603, and that a boundary conflict arose because the Yu property’s location based on its technical description differed from its actual ground position. The parties jointly moved for a relocation survey by the DENR, agreeing to be bound by the results. The RTC initially dismissed the complaint, finding no encroachment based on the technical descriptions. The CA reversed and remanded, citing discrepancies. After further proceedings, the RTC again dismissed the complaint, upholding the technical descriptions in the titles. The CA, on appeal, reversed the RTC, ordered Moldex to remove constructions on the Yu property, and awarded moral damages and attorney’s fees to Spouses Yu, crediting the expert testimony of a DENR engineer that the 1991 survey of Moldex’s lot should conform to the 1957 resurvey of the Yu property. Moldex filed a petition for review, arguing the claim constituted a collateral attack on its Torrens title and questioning the damages awarded.

ISSUE

Whether the Court of Appeals committed reversible error in ordering Moldex to desist from encroaching on the property of Spouses Yu, which ultimately questions the entitlement of Spouses Yu to a final writ of prohibitory injunction.

RULING

The Supreme Court granted the petition, reversing the CA Decision and Resolution. The Court held that Spouses Yu’s action for prohibitory injunction, which sought to establish that Moldex’s perimeter fence encroached on their titled property, constituted an impermissible collateral attack on Moldex’s Torrens certificate of title. A Torrens title cannot be altered, modified, or cancelled except in a direct proceeding. The boundary dispute effectively required a determination that the metes and bounds in Moldex’s title were incorrect, which is prohibited collaterally. The Court found that the RTC correctly relied on the technical descriptions in the parties’ respective titles, which are binding and conclusive. The expert opinion relied upon by the CA, suggesting a survey hierarchy, could not override the indefeasibility of a Torrens title. The awards of moral damages and attorney’s fees by the CA were consequently set aside. The Court reinstated the RTC’s Decision dismissing the complaint for lack of merit.