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SECOND DIVISION

G.R. No. 117971      February 1, 2001

ESTRELLITA S. J. VDA. DE VILLANUEVA, LAURENCE and JENNIFER, BOTH SURNAMED VILLANUEVA, ROGELIO MILLAMA and ROLLY DE JESUS, petitioners,
vs.
HON. COURT OF APPEALS, LINA F. VDA. DE SANTIAGO, EDDIE, ROLANDO, WILLY and MARILOU, ALL SURNAMED SANTIAGO, respondents.

QUISUMBING, J.:

This petition assails the decision dated may 24, 1994 of the Court of Appeals in C.A. G.R. CV No. 40735, reversing the judgement of the Regional Trial Court of Iba, Zambales, Branch 71 which dismissed the action for Recovery of Ownership, Possession and Damages brought by respondents against petitioners concerning two registered parcels of land situated in Malabago, Sta. Cruz, Zambales, particularly described as follows:

A parcel of land [Lot 3-A plan Psu- 132649 Amd., L.R. Case No. N-212, L.R.C. Record No. N-16557], with all the improvement thereon, situated in Barrio of Malabago, Municipality of Sta. Cruz, Province of Zambales. Bounded on the NE., and SW., from point 2-4, by Lot 1-A; on the SE., from point 4-1, by property of Simeon Maya; and on the S.; from point 1-2, by Lot 3-B [Republic of the Philippines].

A parcel of land [Lot 1-A-2, of the subdivision plan (LRC) Psd 285423, being a portion of Lot 1-A, Psu-132649, Amd., LRC Rec. No. N-16557], situated in the Barrio of Malabago, Municipality of Sta. Cruz, Province of Zambales, Island of Luzon. Bounded on the N., Points 11-12, & 13 to 1, & 1 to 2, by Lot 1-A-a, of the subdivision plan; in the E., points 2 to 3, by the property og Gavino Roxas; on the SE., points 3 to 4 by the property of Daniel Mercurio, and points 4 to 5, by the property of Pedro Maya; on the SW., & Ne., points 5 to 7, by Lot 3-A, Psu-132649, Amd., on the SE., points 7 to 8, by Lot 1-B and the SW & NW., points 8 to 11, by Creek [Lot 1-B, both of PSU-132649, Amd.,]. ¹

On Dec. 20, 1962, the land registration court, in a final decision in LRC Registration Case No. N-212² , awarded the disputed lots, measuring 98,800 square meters to the spouses Antonio and Rosario Angeles. The spouses sold the lots to Victorino Santiago on October 9, 1967. Victorino Santiago converted a portion thereof into fishponds and on August 9, 1977, sold the lots to Anacleto Santiago, husband of respondent Lina Santiago³. At the time of the last sale, no decree of registration had yet been issued for the said lots despite the final judgement in the land registration case.

On August 125, 1977, Anacleto engaged the services of Pedro Adona to develop the properties into fishponds. When Adona saw the lots for the first time, there were existing fishponds of about three (3) hectares on the lower portion of the land. Adona leveled the (3) hectares, placed partitions, constructed dikes and elevated the pilapil from one (1) meter to two and one-half (2 ½) meters. Work halted during the first week of October 1977 due to lack of funds.

Meanwhile, on February 28, 1978, Victorino filed an action for forcible entry docketed as Civil Case no. 309 against Carlos Villanueva and his wife, petitioner Estrellita Villanueva. Since Victorino had already sold the property to Anacleto and Lina Santiago, the lawsuit was dismissed on June 19, 1978.⁴

Adona and his men resumed work on May 15, 1978 and stayed in a nipa hut near a creek inside the property. However, on Sept. 22, 1978, while Adona was in Alaminos, Pangasinan, some people entered the property and destroyed the nipa hut. Adona reported the matter to Anacleto who advised him to stop work until the problem was solved. By then, Adona had completed work on about six (6) hectares of the entire 9.8- hectare property, including the three (3) hectares which were fully developed. ⁵

A week before the incident, Anacleto's wife, Lina, was warned that Carlos Villanueva would enter the properties and destroy the hut, but Lina dismissed the warning thinking that Carlos would not pursue his plan.⁶ when she saw the hut destroyed, she instructed her nephew, Ereberto Flores, to call a policeman. They took picutres⁷ of the demolished hut which were presented in court. Lina added that they were not able to reclaim the properties since Carlos threatened with a gun.⁸

On Dec. 12, 1978, the decrees of registration covering the subject lots were issued and Original Certificates of Title Nos. 0-7125 and 0-7126 were transcribed in the name of Antonio Angeles on December 27, 1978.⁹ On February 22, 1979, Antonio Angeles of Sale, Waiver and Quitclaim over the Certificates of Title Nos. T-24726 and T-24727 were issued for Lot 3-A and Lot 1-A-2 respectively in the name of Anacleto Santiago. The lots were declared for taxation purposes under tax Declaration Nos. 28-292, 9109 and 9108 and Anacleto paid the corresponding realty taxes thereon.¹⁰

On Feb. 26, 1979, the Santiagos sued the Villanuevas for forcible entry in Civil Case No. 1174-I. On February 14, 1980, Criminal Case No. 1307-I was also filed against the Villanuevas for violation of the Anti-Squatting Law.¹¹ During the pendency of these cases, Anacleto discovered that the Ministry of Natural Resources granted to Carlos a Fisheries Lease Agreement¹² over the said lots on February 28, 1980. Anacleto sought the cancellation of the said agreement, but both the Ministry and the Office of the President dismissed Anacleto's Petition.¹³

On April 21, 1980, Criminal Case. No. 1307-I against the Villanuevas was dismissed.¹⁴ Eventually, the Fisheries Lease Agreement granted to Carlos was nullified upon appeal to the Court of Appeals in CA G.R. No. SP-12493,¹⁵ which judgement became final and executory when a petition for review thereof was dismissed on technical grounds by the Supreme Court on February 27, 1991.¹⁶ Civil Case No. 1174-I was also dismissed on January 28, 1982¹⁷. In the meantime, Carlos Villanueva and Anacleto Santiago both passed away. Hence, the present case was brought by Anacleto's heirs against the heirs of Carlos.1âwphi1.nêt

In their complaint¹⁸ filed on July 30, 1991, Lina Vda. De Santiago and her children, Eddie, Rolando, Willy and Marilou, maintained that as successors-in-interest of Anacleto, they were unlawfully deprived of the possession, use and enjoyment of the fishponds for the last twelve (12) years by Carlos and now, by the latter's widow Estrallita Vda. De Villanueva and their children, Laurence and Jennifer. They also impleaded as defendants caretakers imployed by the Villanuevas , Rogelio Millama and Roly De Jesus. The Santiagos asked the court to order the Villanuevas to vacate the lots and restore to them possession and ownership of the lots registered in their predecessor's name. They also demanded actual in that amount of P135,000.00, losts earning for every hectare from the time of dispossession until restoration in the amount of P20,000.00 per annum, moral damages in an amount deemed just and reasonable by the court, as well as attorney's fees and costs of suit.

For her part, respondent Estrellita Villanueva countered that as early as the year 1950, her father-in-law, Maximino Villanueva, offered to sell the fishponds situated on the disputed parcels of land to her and her husband, Carlos. According to Estrellita, they bought the fishponds from her father-in-law which was then classified as "swamp land." When they sought to have the properties titled with the Bureau of Fisheries, they were told that this was not possible due to the land's classifications. Carlos then instead applied for a Fisheries Lease agreement which was granted under FLA 3022.¹⁹ Estrellita added that in all the twenty years that they possessed the subject lots as well as the other twenty or so years that the same was occupied by her father-in-law, they were never disturbed in their possession thereof. She further stated that although she had seen Antonio Angeles inter the fishpond and the latter applied for the issuance of a title, her father-in-law did not receive any summons pertaining to said application and resultantly, title was issued in favor of Angeles. She also claimed that before the instant complaint was filed by Lina Santiago, no proceedings under Presidential Decree No. 1508 or barangay conciliation were ever held.²⁰

In a decision dated Dec. 18, 1992, the trial court dismissed the complaint for lack of cause of action and res judicata. Relying on the tax declarations which classified the lots as "swamp land", the trial court disposed:

WHEREFORE, in view of the foregoing, judgement is hereby rendered against the plaintiffs and in favor of the defendants, declaring:

(a) Dismissing the instant complaint against the defendants, with costs;

(b) Declaring the tax declarations stated in paragraph 2 of the complaint null and void and (sic) no legal force and effect;

(c) Declaring Original Certificates of Title No. 0-7125, Original Certificate of Title No. 0-7126, transfer Certificate of Title No. T-24726 and transfer Certificate of Title T-24727 as null and void and without any force and effect;

(d) Declaring the defendants as the lawful possessors of the lands in litigations.²¹

The Santiagos elevated the case to the court of Appeals which rendered judgment as follows:

WHEREFORE, the decision appealed from REVERSED and another one entered.

1. declaring the validity of OCT Nos. 0-7125; 0-716, Transfer Certificates of Title No. T-24726 and T-24727 as valid (sic);

2. declaring plaintiffs-appellants as lawful owners of the lands described in paragraph 2 of the complaint;

3. ordering defendants-appellants to restore possession of the lands to plaintiffs-appellants.

4. With costs against defendants-appelants.²²

Hence, this petition alleging that:

A. THE PRESENT CASE IS BARRED BY THE RES JUDICATA BECAUSE OF THE PREVIOUS DISMISSAL OF TWO CASES INVOLVING COMPLAINT FOR RECOVERY OF POSSESSION AND COMPLAINT FOR EKECTMENT WITH PREJUDICE.

B. SINCE THE LAND IS A SWAMP LAND, IT CAN BE DISPOSED OF BY LEASE AND THE TITLES OVER THE SAME ARE NULL AND VOID.

C. SINCE THIS CASE INVOLVES REAL PROPERTIES, IT IS INDISPENSABLE THAT THE COMPLAINT MUST FIRST BE REFERRED TO THE BARANGAY FOR CONFRONTATION AND CONCILIATION.²³

For our resolutions are the following issues: Is the present action barred by res judicata? Should respondents' complaint be dismissed for failure to submit to barangay conciliation? Did the appellate court err in ruling that respondents' titles constitute valid and indefeasible proof of ownership?

First, The procedural issues. The principle of res judicata does not apply in this case. The two earlier actions filed by Anacleto and Victorino were for forcible entry which involved only the issue of physical possession (possession de facto) and not ownership.²⁴ Meanwhile, the instant case is an accion reinvindicatoria or a suit to recover possession of a parcel of land as an element of ownership. A judgement rendered in a forcible entry case will not bar an action between the same parties respecting title or ownership²⁵ because between a case for forcible entry and an accion reinvindicatoria, there is no identity of causes of action.

There was also no need to submit to barangay conciliation proceedings since the action for recovery of ownership, possession and damages was filed by respondents with the trial court on July 31, 1991. At that time, the applicable laws regarding barangay conciliation proceedings as condition precedent to the filing of an action in court were Section 2²⁶ and 3²⁷ of P.D. 1508 and not the Local Government Code 1991 which took effect only on Jan. 1, 1992.

Sections 2 and 3 of P.D. 1508 were applied in Tavora vs. Veloso, et. al.²⁸, an action for ejectment filed by petitioner against his tenant for failure to pay rentals. We held then that no lupon was authorized to take cognizance of the dispute since the barangay lupon had no jurisdiction over cases where the parties are not actual residents of the same city or municipality. We said that section 3, which requires actions involving real property or any interest therein to be brought in the barangay where the property is situated, refers to venue and presupposes that the Lupon has authority over the dispute.

In this case, petitioners are residents of Poblacion, Alaminos, Pangasinan while respondent reside in Perez, Bulacan, Bulacan and Gama, Sta. Cruz, Zambales. Conformably then to Sec2 and 3 and Tavora, petitioners dis not err in directly filing the present action with the trial court since the parties in different provinces.

We now tackle the substantive and main issue. Are respondents' certificates of title valid and indefeasible proof of ownership? To support their position that respondents' certificates of title are null and void, petitioners submit that the lots in questions are "swamplands" and therefore, not susceptible to private ownership because the same are inalienable public lands. On the other hand, respondents insist that the validity of said titles cannot be assisted in a counterclaim, as resorted to by petitioners, since a collateral attack is not allowed under the law.

Respondents are correct. A collateral attack is made when, in another action to obtain a different relief, the certificate of title is assailed as an incident in said action. Petitioners raised the issue of invalidity of the titles as a defense in an answer.counterclaim²⁹ to respondents' action for recovery of ownership. This partakes of the nature of a collateral attack and is an indirect challenge to the final judgement and decree of registration which resulted in the issuance of the titles. Sec. 48 of P.D. 1529 or the Property Registration Decree³⁰ requires no less than a direct action for reconveyance duly filed within the period provided by law. The issue of the validity of title, i.e. whether or not it was fraudulently issued, can only be raised in an action expressly instituted for that purpose. Thus, whether or not petitioners have the right to claim ownership of the subject lots is beyond the province of the instant petition.³¹

Note also that OCT Nos. 0-7125 and 0-7126 were issued as a result of decision rendered by a competent land registration court. Thus, a presumption exists that the lots could be registered and titles were regularly issued and are valid.³² This presumption trumps the tax declarations because a tax assessor's clarification of land is based merely on the taxpayer's representations. The latter cannot prevail over a land registrations court's final determination regarding the nature of the registered lots.

Moreover, aside from Estrellita's bare assertion, no other evidence was presented to show that petitioners had any right, whether real or equitable, to occupy the lands. Their claim of ownership is belied by conflicting and inconsistent defenses. While they assert that as " swamp-land", the lots could only be leased from the government, they contradictorily assert that their material possession of the lots for forty (40) years has ripened into ownership. At one point, petitioners even alleged that they bought properties from Maximino Villanueva.

Assuming that the lots could only be leased from the government, petitioners did not even show that they were legitimate lessees of the lots. The fishpond Lease Agreement upon which they rely has long been cancelled in C.A. G.R. No. SP-12493. In this related case, which has become final and executory, the Court of Appeals explicitly held that:

It may be true the exercise of Secretary's power under the Decree necessarily involves the determination of identity of land devoted to the cultivation of fish and which applicant is qualified to a lease agreement with the Ministry with the incidental power to place him in possession thereof undisturbed by other applicants for lease. The power nevertheless is delimited in that case at bar by the existence of a certificate of title issued by a competent court after due notice and hearing (Annex C, Petition). It is settled that a Torrens Certificate of title is indefeasible and binding upon the whole world unless and until it has been nullified by a court of competent jurisdiction. Under existing statutory and decisional law, the power to pass upon the validity of such certificate of title at the first instance properly belongs to the Regional Trial Courts in a direct proceeding for cancellation of title. It goes without saying that under existing circumtances the Ministry must respect the rights of petitioner herein as a Torrens title holder until a court of competent jurisdiction rules otherwise in a proper action.³³

This declaration of the appellate court puts an end to petitioners' insistence that they are entitled to possession of the lots as successors-in-interest of Carlos.

To prove her father-law's possession of the lots since time immemorial and that petitioners possessed the lots in a personal capacity for twenty (20) years, Estrellita testified that she saw the lots for the first time when the same were offered for sale to her and her husband in 1950. Strangely, her marriage certificate³⁴ reveals that Estrellita could not have any documents attesting to their purchase of the lots from her father-in-law, as she claims. Neither did she offer any proof to show the nature and extent of Maximino's right and interest over the subject lots. At and rate, petitioners could not have acquired ownership of the lots since it is well-settled that no title to registered land in derogation to that of the registered owner shall be acquired by prescription or adverse possession.³⁵

In view of the foregoing, the appellate court was correct in ruling that respondents' titles constituted indefeasible proof of ownership which entitles them to possession of the properties. In land cases, the certificate of title serves as evidence of an indefeasible and inconvertible title to the property in favor of the person whose name appears therein. A title once registered under the Torrens system cannot be defeated by adverse, open and notorious possession; neither can it be defeated by prescription. It is notice to the whole world and such all persons are bound by it and no one can plead ignorance of the registration.³⁶

The following award of damages are also warranted by the evidence on record: (a) P5,000.00 in actual damages for the destroyed nipa hut; (b) P20,000.00 per annum representing lost earnings from the time of dispossession in September 1978 until possession is properly restored to respondents; (c) P50,000.00 as moral damages; (d) P25,000.00 as exemplary damages for the forcible dispossession of respondents from the property registered under their predecessor's name; and (e) attorney's fee in the amount of P 50,000.00

WHEREFORE, the petition is DENIED for lack of merit. The decision of the Court of Appeals in CA-G.R. CV No. 40735 is AFFIRMED WITH MODIFICATION insofar as the award of damages is concerned, (a) P 5,000.00 in actual damages for the destroyed nipa hut; (b) P20,000.00 per a annum representing lost earnings from the time of dispossession in September 1978 until possession is properly restored to respondents; (c) P50,000.00 as moral damages; (d) P25,000.00 as exemplary damages for the forcible dispossession of respondents from the property registered under their predecessor's name; and (e) attorney's fee in the amount of P 50,000.00

Costs against petitioners.1âwphi1.nêt

SO ORDERED.

Bellosillo, Mendoza, Buena, and De Leon, Jr., JJ., concur.

Footnotes:

¹ RTC Records, pp. 148 & 150.

² Rollo, pp. 28-29.

³ RTC Records, pp. 140-141.

⁴ Id. at 286-287 & 293.

⁵ TSN, May 15, 1992, pp. 22-27.

⁶ TSN, May 15, 1992, pp. 22-27.

⁷ Supra, Note 3 at 187-188.

⁸ Supra, Note 7 at 30-31.

⁹ Supra, Note 3 at 146-147.

¹⁰ Supra, Note 2 at 28-29.

¹¹ Supra, Note 3 at 274-278 & 294-295.

¹² Id. at 273.

¹³ Id. at 305-315 & 321-339.

¹⁴ Id. at 299.

¹⁵ Id. at 155-157.

¹⁶ Id. at 152.

¹⁷ Id. at 280.

¹⁸ Id. at 1-6.

¹⁹ TSN, Sept. 18, 1992, pp. 5-8.

²⁰ Id. at 27-29.

²¹ CA Records, p. 91.

²² Supra, Note 2 at 40.

²³ Id. at 18.

²⁴ Cagayan De Oro City Landless Residents' Association, Inc. vs. Court of Appeals, 254 SCRA 220, 231-232 (1996) citing: Joven vs. Court of Appeals, 212 SCRA 700 (1992); Ganadin vs. Ramos, 99 SCRA 613 (1980) and Rule 70, Sec. 7 (now Sec. 18) of the Rules of Civil Procedure.

²⁵ Civil Code of the Philippine Vol. II, 1990 Edition, Arturo M. Tolentino; p. 48-49.

²⁶ SECTION 2. Subject matters for amicable settlement. – The Lupon of each barangay shall have authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes except:

1. Where one party is the government, or any subdivision or instrumentality thereof;

2. Where one party is a public officer or employee, and the dispute relates to the performance of his official functions;

3. Offenses punishable by imprisonment exceeding 30 days, or a fine exceeding P200.00;

4. Offenses where there is no private offended party;

5. Such other classes of disputes which the Prime Minister may in the interest of justice determine upon recommendation of the Minister of Justice and the Minister of Local Government.

²⁷ SECTION 3. Venue. – Disputes between or among persons actually residing in the same barangay shall be brought for amicable settlement before the Lupon of said barangay. Those involving actual residents of different barangays within the same city or municipality shall be brought in the barangay where the respondent or any of the respondents actually resides, at the election of the complainant. However, all disputes which involve real property or any interest therein shall be brought in the barangay where the real property or any part thereof is situated.

The Lupon shall have no authority over disputes:

1. involving parties who actually reside in barangays of different cities or municipalities, except where such barangays adjoin each other; and

2. involving real property located in different municipalities.

²⁸ 117 SCRA 613.

²⁹ Supra, Note 3 at 11.

³⁰ Sec 48. Certificate not subject to collateral attack. – A certificate of title shall not be subject to collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law.

³¹ Eduarte vs. Court of Appeals 311 SCRA 18, 25-26 (1999) citing: Ybanez vs. Court of Appeals, 194 SCRA 743 (1991) and Co vs. Court of Appeals, 196 SCRA 705, 706 (1991).

³² Land Title and Deeds, Noblejas & Noblejas, 1992 Edition, p. 210 citing: Ching vs. Court of Appeals, 181 SCRA 9, 11 (1990).

³³ Supra, Note 3 at 156-157.

³⁴ Supra, Note 3 at 341.

³⁵ Section 47, Presidential Decree No. 1529, p. 205 (1979).

³⁶ Heirs of Mariano, Juan, Tarcela and Josefa Brusas vs. Court of Appeals, 313 SCRA 176, 183 (1999) citing: Sec. 47, P.D. 1529 and Jacob vs. Court of Appeals, 224 SCRA 189 (1993).

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