G.R. No. 248066 . November 17, 2021
PAXTON DEVELOPMENT CORPORATION, PETITIONER, VS. ANTENOR VIRATA, PILAR DEVELOPMENT CORPORATION AND THE REGISTRY OF DEEDS OF CAVITE, RESPONDENTS.

FACTS

The case involves conflicting claims over Lot No. 5762, originally part of the Imus Friar Land Estates in Cavite and covered by OCT No. 1002. Petitioner Paxton Development Corporation (Paxton) filed a complaint for Quieting of Title (Civil Case No. 1133-95) against respondents Antenor Virata (Virata), Pilar Development Corporation (Pilar), and the Registry of Deeds of Cavite. Paxton claimed ownership derived from Serapio Cuenca, who purchased the lot in 1940. After Serapio’s death in 1988, his children sold the lot to Paxton in 1995, leading to the issuance of TCT No. T-557273 in Paxton’s name. Paxton discovered that Virata had declared the lot for tax purposes under his name and had sold it to Pilar in 1973, with TCT No. T-71113 issued to Pilar. Paxton argued that Virata’s tax declaration and Pilar’s title created a cloud on its title.
Respondent Pilar also filed a complaint for Quieting of Title (Civil Case No. 1187-95) against Serapio’s heirs. Pilar claimed it acquired the lot from Virata in 1973, who had purchased it from Serapio in 1958. Virata’s title, TCT No. T-11907 (later reconstituted as TCT No. (T-11907) RT-6348 after a 1959 fire at the Registry of Deeds), was issued in 1958. Pilar alleged that Paxton’s title, TCT No. T-541993 (issued to Serapio in 1995 and later cancelled to issue Paxton’s title), was forged and invalid, as OCT No. 1002 had already been cancelled in 1958.
The two cases were consolidated. The Regional Trial Court (RTC) ruled in favor of Paxton, declaring Pilar’s title null and void and upholding Paxton’s title. The Court of Appeals (CA) reversed the RTC, declaring Paxton’s title null and void and upholding Pilar’s title, applying the principle that where two certificates of title are derived from a common original title, the earlier issued transfer certificate prevails. Paxton filed a Petition for Review before the Supreme Court.

ISSUE

Whether the Court of Appeals erred in reversing the RTC decision and upholding Pilar’s title over Paxton’s title based on the principle of priority in registration.

RULING

The Supreme Court denied Paxton’s petition and affirmed the CA decision. The Court held that under the Property Registration Decree (P.D. No. 1529), where two transfer certificates of title are derived from the same original certificate of title, the earlier issued transfer certificate prevails, provided no anomaly taints the registration process. Pilar’s title originated from TCT No. T-11907 issued to Virata in 1958, while Paxton’s title originated from TCT No. T-541993 issued to Serapio only in 1995. Thus, Pilar’s title, being earlier in registration, is superior. The Court found no merit in Paxton’s argument that Virata’s title was void ab initio due to fraud, as Pilar was an innocent purchaser for value. The CA correctly applied the principle of prior est in tempore, potior est in jure (first in time, stronger in right). The Supreme Court emphasized that factual findings of the CA, when supported by evidence, are binding, and no reversible error was committed by the CA in reversing the RTC.