Jose Stillanopulos v City of Legaspi, GR No. 113913, October 12, 1999

"Sending of notice"

Facts:

The City of Legaspi filed a petition for judicial reconstitution of its titles to 20 parcels of land which certificates of title allegedly been lost during the World War II. The OCT was ordered by the court to be reconstituted in favor of the City of Legaspi. On 1970, the City filed a complaint for quieting of title on Lot 1 against the petitioner’s father and other parties. When the petitioner’s father died, his title was cancelled and transferred to the petitioner. The court upheld the title of the petitioner was declared the lawful owner of Lot 1. On appeal, the CA reversed the decision in favor of City of Legaspi. Its appeal before the SC was denied on grounds that the issues raised were questions of facts that the court could not entertain. Petitioner now filed an action for the cancellation of the OCT of the City of Legaspi which was denied by the trial court on ground of res judicata which the CA affirms. The petitioner now files an action for annulment of said OCT based on 3 grounds: (1) extrinsic fraud in the procurement by the City of Legaspi of its title; (2) its OCT that was judicially reconstituted does not exist; and (3) the court reconstituting the title lacks jurisdiction. It also contends that his father who was the registered and possessor of said lot was omitted by the City of Legaspi in its petition for reconstitution of title. He also asserted that his predecessor-in-interest owned lots 1 and 2 and donated lot 2 to the City of Legaspi, the deed of donation of which shows that the respondent acknowledge his predecessor-in-interest as the absolute owner of said donated lot.

CA ruling: The CA ruled that the prescriptive period for extrinsic fraud of 4 years already lapsed and held that the petitioner is guilty of latches for filing the annulment case. Petitioner is further barred by res judicata between the earlier case of quieting of title and his petition for annulment there being identical parties, issues, and cause of action. He is also guilty of latches for not bringing the issue on lack of jurisdiction of the court.

Issues:

Whether or not the prescriptive period for external fraud already lapsed?

Whether or not res judicata bars the petitioner for his cause of action?

Whether or not he may assail the court’s jurisdiction over the case?

Ruling:

On extrinsic fraud

The SC held that the respondents failed to state in its petition for reconstitution of title that lot 1 was occupied by the petitioner’s predecessor-in-interest and failed to notify him of the proceeding. Therefore, the deliberate failure to notify him constitutes fraud. Unfortunately, the action already prescribed. Granting that the respondent failed to notify the petitioner of their application for the reconstitution of their title, it filed an action for quieting of title against the petitioner’s father in 1970 praying that it be declared as the owner of the property. Thus, as early as 1970, they were already aware of the action of the respondents. They failed to bring action within the 4-year prescription period. The petitioner was wrong to contend that the prescription begins to run only after the discovery of the fraud in 1988 when counsel of petitioner received the report from the Land Registration Commission because

On jurisdiction issue

The petitioner was right to contend that the court did not acquire jurisdiction over the case due to lack of notice to the petitioner’s predecessor-in-interest because sending of notice to the occupant of the property subject to a land proceeding is mandatory and jurisdictional. Thus, with failure to send the notice to the other party renders the order of reconstitution null and void. It was wrong for the court to entertain the application for reconstitution for in such action, the title has been destroyed or lost and a new duplicate of certificate of title will only be re-issued. The title of the property however was in the possession of the petitioner’s predecessor-in-interest thus the reconstituted title was deemed void. Unfortunately again, the action was brought to assail the court’s jurisdiction 20 years after thereby giving rise to the respondent’s defense on latches against the petitioners. The petitioner’s contention that the equitable doctrine of latches applied against him renders fraud and injustice to him is untenable since the SC held he had a fair chance to bring the action in the case of quieting of title to prove his ownership over the disputed lot.

On res judicata

 The SC held that the principle of Res Judicata sets in at the case at bar. Its elements include the following: (1) a judgment has becomes final; (2) such judgment was rendered on the merits; (3) the court that rendered it had jurisdiction over the subject matter and the parties; and (4) there was identity of parties, subject matter and causes of action between the previous and the subsequent action. The action for annulment appears to be a second cycle of reviewing a subject matter that has been finally decided by the court previously.

The petitioner was held by the court to have proven possession only over the lot during the reconstitution proceeding. Even if the reconstitution proceeding was annulled, the ownership of the property in favor of the respondent has already been settled in the quieting of title proceeding. He is bound to abide to the decision of the previous case for he allowed the trial court to proceed in determining ownership of the land and to nullify his title.