G.R. No. L-11837




Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-11837 November 29, 1960 MAGDALENA G. VDA. DE CUAYCONG, petitioner-appellant, vs. CRISTETA L. VDA. DE SENGBENGCO, oppositor-appellee. Arboleda and Arboleda for appellant. Juan S. Aritao for appellee. CONCEPCION, J.: An appeal from two (2) orders of the Court of First Instance of Negros Occidental, dated May 8 and July 21, 1954, respectively. The record on appeal was originally forwarded to the Court of Appeal, which, however, certified it to this Court, only question of law being raised in the case. By a decision of said court of first instance, dated September 5, 1935, Lot 903 of the Sagay Cadastre was ordered registered as follows: one-half (½) in the name of Cristeta L. Vda. de Sengbengco and the other half in that of the heirs of J. Clayton Nichols. The decision having presumably become final, the corresponding decree and original certificate of title were issued on November 21 and December 12, 1935, respectively. Less than a year later, or on September 8, 1936, the heirs of Rafael Balila, who had filed their answer, claiming said Lot 903, way back in 1923, moved for a reconsideration of said decision and a new trial upon the ground that the movants had not been notified of the hearing held in connection with the aforementioned lot. This motion was denied by an order dated October 2, 1936, which, on July 17, 1937, was reconsidered and set aside by Hon. Sotero Rodas, Judge, who then presided the court aforementioned. Pertinent parts of the order to this effect read: Habiendose presentado la mocion de revision antes del transcurso de un año a contar desde la expedicion del decreto, no cabe duda alguna que procede acceder a la misma siempre y cuando haya habido fraude en la obtencion del citado decreto. No hay pruebas de que los adjudicatorios arriba nombrados fuesen responsable de la falta de notificacion a los recurrentes, pero es significativo el hecho de que el ultimo reclamante que alego ser dueno de la totalidad del lote en cuestion y cuya contestacion solo se presento en 30 de julio y sin que conste que haya sido admitida y levantada previamente la orden de rebeldia en cuanto a el, entro en convenio con J. Clayton Nichols que tambien reclamaba la totalidad de dicho lote, en dividirse por mitad el terreno y pedir su adjudicacion a favor de ellos en partes iguales. El Juzgado es de opinion que se les ha privado a los recurrentes de su propiedad sin previo proceso legal no habiendoseles concedido su "day in court" y que este Juzgado no tenia jurisdiccion para conocer de la reclamacion de Sing Bengco que no ha sido admitida debidamente, y que el caso cae en el significado de la palabra fraude que se requiere que se demuestre para que haya revision de decreto. xxx xxx xxx Por todo lo expuesto, el Juzgado reconsidera su auto de fecha 2 de octubre y accediendo a la mocion de revision ordena que se senale a vista el lote No. 903 de este expediente. (Emphasis supplied.) The records do not show what happened immediately thereafter. War broke out in the Pacific late in 1941, and, subsequently, the records were seemingly lost or destroyed. On or about September 5, 1953, for reconstitution of the certificate of title above referred to, the original of which and its owner's duplicate having been allegedly burned, destroyed or lost during the last war. The motion was granted by an order dated November 17, 1953, in compliance with which Original Certificate of Title No. 15104 was issued on January 2, 1954. Soon later or on whom the rights and interest of the heirs of Rafael Balila in and to Lot 903 were conveyed, assigned and transferred on August 28, 1936, moved for the cancellation of said Original Certificate of Title No. 15104, upon the ground that the same had been issued illegally and in consequence of an oversight, for, apart from being null and void, the decision upon which it is based was reconsidered and set aside by the aforementioned order of July 17, 1937. This motion was granted by an another order — issued by Hon. Francisco Arellano, Judge, who then presided the court — under date of May 8, 1954. A reconsideration of the latter order having been denied on July 21, 1954, Mrs. Cuaycong interposed the present appeal. Appellee maintains, and the lower court held, that appellant's motion of September 8, 1936, for reconsideration of the decision dated September 5, 1935 and new trial, as well as the order of Judge Rodas of July 17, 1937, granting said motion, were premised upon Section 38 of Act No. 496, pursuant to which every decree of registration shall be conclusive upon and against all persons, subject to the right of the parties injured by a decree obtained by fraud to seek a review, within one (1) year from entry of the decree, provided no innocent purchaser for value has acquired an interest; that the failure of the Clerk of the Court of First Instance of Negros Occidental hearing does not constitute fraud; that the heirs of Rafael Balila had "no legal personality" to file their petition for review, on September 8, 1936, inasmuch as prior thereto, or on August 28, 1936, herein appellant had acquired their interest in reasonable time, of the benefits of the order of Judge Rodas, dated July 17, 1937, appellant is now barred by laches from either invoking said order or seeking the protection of the law. We are unable to agree with this view. If the principle of laches were applicable to appellant, on account of her failure, up to January 16, 1954, to urge the enforcement of the order of July 17, 1937, it should operate equally upon the appellee, who did no seek to contest said order and have it set aside until March 6, 1954, or almost 17 years later. Moreover, in paragraph 15, of her "petition for reopening and review of decree" (p. 52, Rec. on Appeal), appellant alleged — and this was impliedly admitted in appellee's brief (p. 23) — that said appellee and the heirs of J. Clayton Nichols had obtained the decision of September 5, 1935, by submitting a stipulation to the effect that Lot 903 be adjudicated to them as the only claimants thereof, although the answer containing the claim of the Balilas appeared in the record of the proceedings, with which the parties must by deemed familiar. We note, also, that according to the verified pleadings before us — the pertinent allegations of which have not been denied by herein appellee — said lot had been in the adverse possession of the Balilas, actually, openly, and continuously, for over 40 years, prior to September, 1935, and thereafter, of appellant herein, up to the present, so that the appellee could not possibly have been unaware of such fact. This conclusion appears to be borne out to be circumstance that despite the decision and decree, as well as the certificate of title in her favor, way back in 1935, Mrs. Sengbengco has not, up to the present, even attempted to take possession of Lot 903. In the light of these circumstances, we are satisfied that, as held by Judge Rodas, said decree was tainted with fraud sufficiently to justify the order of July 17, 1937 (Director of Lands vs. Aniceto Aba, et al., 68 Phil., 85). Again, a decree of registration secured through fraud is valid, although annullable, upon petition filed within one (1) year after entry of the decree, in the absence of an innocent purchaser for value, whereas a decision rendered without notice to the parties of record is void for lack of due process (46 C.J. p. 552; 16A C.J.S. 835; Taylor vs. Phox Bus Co. et., 129 N.J. Eq. 610, 20 A 2d. 343; People ex rel Van Dyk vs. Van Dyk, 33 N.Y.S. 2d 766; Producers Inv. Co., et al. vs. Colvert, 187 Okl. 59, 100 P. 2d. 1005; Harris, et al. vs. Deal, 189 Va. 675, 54 S.E. 2d. 161; State ex real Adams vs. Superior Court of the State, Pierce Country, 36 Wash. 2d. 868, 220 P. 2d.1081; State ex rel First National Bank vs. Hastings, 207 P. 23, 31; Bass vs. Hoagland, C.A. Tex. 172 F. 2d. 205, 70 S. Ct. 57, 338 U.S. 816, 94 L. ed. 494; Hovey vs. Elliot, 167 U.S. 409, 17S. Ct. 841, 42 L. ed. 215; Windson vs. McVeigh, 93 U.S. 274, 23 L. ed. 914 Wetmore vs. Karrich, 205 U.S. 141, 27 S. Ct. 434, 51 L. ed. 745; Atlantic Coast Line Railroad Co. vs. Lake County Citrus Sales, Inc., 48 So. 2d. 922; Adams & McGahey vs. Clyde B. Neill, 58 N. M. 782, 276 P. 2d. 913). Indeed, acts of Congress, as well as those of the Executive, can deny due process only under pain of nullity, and judicial proceedings suffering from the same flaw are subject to the same sanction, any statutory provision to the contrary notwithstanding. Now then, if a decree issued in pursuance of a valid decision, obtained by fraud, may be annulled within one (1) year from entry of said decree, there is more reason to hold that the same, if entered in compliance with a decision suffering from fatal infirmity, for want of due process, may be reviewed, set aside and cancelled upon petition filed within the same period, provided that no innocent purchaser for value will be injured thereby. Lastly, the conveyance to Mrs. Cuaycong of the rights and interest of the heirs of Rafael Balila did not effect the "legal personality" of the latter. Besides, they retained an interest in Lot 903, in view of their obligation in favor of Mrs. Cuaycong to warrant the title thereto. Wherefore, the aforementioned orders of May 8 and July 31, 1954 are hereby reversed and set aside, and the order of July 17, 1937, accordingly reinstated; and let the record of this case be remanded to the court of the origin for further proceedings, in conformity with the order last mentioned, with costs against the oppositor-appellee. It is so ordered. Paras, C.J., Bengzon, Padilla, Bautista Angelo, Labrador, Reyes, J.B.L., Barrera, Gutierrez David, Paredes, and Dizon, JJ., concur. The Lawphil Project - Arellano Law Foundation