In a dispute over overlapping land titles, the Supreme Court affirmed that the validity of the survey plan, rather than simply the date of registration, is the primary factor in determining ownership. This landmark decision clarifies that a prior registration date does not automatically guarantee superior rights if the underlying survey is proven fraudulent or contains significant errors. This means landowners must ensure their land surveys are accurate and valid, as flawed surveys can invalidate their titles, regardless of how long they have been registered. The ruling protects rightful owners from unscrupulous land acquisitions and reinforces the integrity of the Torrens system.

Whose Land Is It Anyway? Unraveling a Tangled Web of Overlapping Titles

The case of Spouses Yu Hwa Ping and Mary Gaw vs. Ayala Land, Inc., along with the consolidated case of Heirs of Spouses Andres Diaz and Josefa Mia vs. Ayala Land, Inc., revolves around conflicting claims to land in Las Piñas, Metro Manila. The petitioners, Spouses Yu and the Diaz heirs, asserted their rights based on Original Certificate of Title (OCT) No. 8510, which originated from survey plan Psu-25909 dated March 17, 1921. Meanwhile, respondent Ayala Land, Inc. (ALI) claimed ownership through OCT Nos. 242, 244, and 1609, derived from survey plans Psu-47035, Psu-80886, and Psu-80886/SWO-20609, dated October 21, 1925, July 28, 1930, and March 6, 1931, respectively. The core legal question was: Which set of titles should prevail, given the overlapping claims and the alleged irregularities in ALI’s survey plans?

At the heart of this dispute lies the Torrens system, a land registration system premised on the principle of indefeasibility of title. This system aims to provide certainty and security in land ownership. However, the Supreme Court emphasized that a certificate of title is not a conclusive proof of ownership but merely an evidence of it. Ownership, the Court stressed, is distinct from the certificate of title. It serves as evidence of that ownership. The registration of land does not create or vest title; it simply confirms an already existing right.

One of the key elements in land registration is the survey plan, which defines the exact identity of the land. The Court stated that a survey plan establishes the true identity of the land. It also ensures it does not overlap with previously registered properties and prevents subsequent registrations from encroaching on it. Thus, the Supreme Court closely scrutinized the survey plans presented by both parties.

The Court found numerous irregularities in ALI’s survey plans. First, the same surveyor, A.N. Feliciano, conducted surveys for both parties, raising doubts about the objectivity of the later surveys. Second, the location of the lands was described differently in the various surveys, further casting suspicion on their accuracy. Third, there were discrepancies in who requested the survey of Psu-47035. Additionally, Psu-80886 lacked the signature of the Director of Lands, and it referred to a monument that was established years after the survey was conducted.

ALI attempted to explain some of these anomalies by claiming that Psu-80886 was amended by Psu-80886/SWO-20609. However, the Court found this explanation unconvincing, noting that ALI’s own witness could not reaffirm the justification for Psu-80886’s manifest error. The Court also pointed out that the Regional Trial Court (RTC) of Las Piñas observed erasures and alterations on Psu-80886, further undermining its credibility. The RTC’s observations included that the total area of the property covered by the document bear many erasures, particularly two erasures as to the total area in terms of number and one erasure as to that total area in terms of unit of measurement. These issues further damaged the validity of the survey.

Moreover, the Supreme Court highlighted that it had previously noted defects surrounding Psu-80886 in the case of Guico v. San Pedro. The Supreme Court had previously noted the defects surrounding Psu-80886 in the case of Guico v. San Pedro. The Court in Guico observed two major irregularities. Guico’s predecessor-in-interest did not submit any valid measurement of the estate. The applicant or his grantees failed to occupy or cultivate the subject land continuously.

In contrast, the Court found that Psu-25909, from which the titles of petitioners were sourced, bore all the hallmarks of verity. It contained the signatures of the surveyor and the Director of Lands, and it did not contain any erasures or alterations. Furthermore, a duly authenticated copy of Psu-25909 was readily available in the Bureau of Lands. Because of the above, the Court cannot subscribe to the finding of the CA in its June 19, 2006 decision that the numerous defects in Psu-47909, Psu-80886 and Psu-80886/SWO-20609 are “not enough to deprive the assailed decree of registration of its conclusive effect, neither are they sufficient to arrive at the conclusion that the survey was definitely, certainly, [and] conclusively spurious.”

ALI argued that in case of two certificates of title purporting to include the same land, the earlier date prevails. However, the Court clarified that this rule is not absolute. It is a mistake to think that if the inclusion of the land in the earlier registered title was a result of a mistake, then the latter registered title will prevail. The Court emphasized that if the inclusion of the land in the earlier registered title was a result of a mistake, then the latter registered title will prevail. The ratio decidendi of this exception is to prevent a title that was earlier registered, which erroneously contained a parcel of land that should not have been included, from defeating a title that was later registered but is legitimately entitled to the said land.

The Court also addressed ALI’s argument that the case of Spouses Carpo v. Ayala Land, Inc. barred the adjudication of the present case. The Court explained that Spouses Carpo involved different titles and a different set of facts. It only decided that as between TCT No. 296463 (Carpo) and TCT No. T-5333 (ALI), the latter prevails. It did not affect the controversy between Spouses Yu and ALI.

ALI further argued that the cause of action of petitioners has prescribed. However, the Court reiterated that a void title can always be attacked. A void title cannot give rise to a valid title. An action to declare the nullity of a void title does not prescribe and is susceptible to direct, as well as to collateral attack. Citing Uy v. Court of Appeals, the Court remarkably explained the prescriptive periods of an action for reconveyance depending on the ground relied upon.

Finally, the Court rejected ALI’s claim that it was an innocent purchaser for value. The Supreme Court explained that ALI cannot be considered an innocent purchaser for value of the subject properties under OCT Nos. 1609, 242 and 244. As discussed by the RTC of Las Piñas, when ALI purchased the subject lots from their predecessors-in-interest in 1988, the titles bore notices of the pending cases and adverse claims sufficient to place it on guard. In the TCTs of ALI, the notices of lis pendens indicated therein were sufficient notice that the ownership of the properties were being disputed.

Ultimately, the Supreme Court denied ALI’s second motion for reconsideration and affirmed its earlier decision in favor of Spouses Yu and the Diaz heirs. The Court ruled that because of the numerous, blatant and unjustifiable errors in Psu-47909, Psu-80886, and Psu-80886/SWO-20609, these must be declared void. The ruling serves as a reminder that the Torrens system, while providing a framework for secure land ownership, is not a shield for fraudulent or erroneous land acquisitions.

FAQs

What was the key issue in this case?	The central issue was determining which party had superior rights to land with overlapping titles, considering discrepancies in the survey plans. The Court had to decide whether the earlier registration date of Ayala Land, Inc.’s titles should prevail over the petitioners’ titles, despite irregularities in Ayala Land’s survey plans.
What is the Torrens system?	The Torrens system is a land registration system based on the principle of indefeasibility of title, aiming to provide certainty and security in land ownership. Under this system, a certificate of title serves as evidence of ownership, but it is not conclusive proof of ownership.
Why are survey plans important in land registration?	Survey plans are crucial because they define the exact identity and boundaries of the land. They ensure that the land does not overlap with previously registered properties and prevent subsequent registrations from encroaching on it.
What irregularities were found in Ayala Land’s survey plans?	The Court found numerous irregularities, including the same surveyor conducting surveys for both parties, differing land locations in various surveys, discrepancies in who requested the survey, a missing signature of the Director of Lands, and reference to a monument established after the survey date.
What is the significance of Psu-25909?	Psu-25909 is the survey plan from which the petitioners’ titles originated. The Court found that it bore all the hallmarks of verity, including the signatures of the surveyor and the Director of Lands, and it did not contain any erasures or alterations.
What is the “first in time, stronger in right” rule?	The “first in time, stronger in right” rule generally means that in case of two certificates of title purporting to include the same land, the earlier date prevails. However, this rule is not absolute. If the inclusion of the land in the earlier registered title was a result of a mistake, then the latter registered title will prevail.
Was Ayala Land considered an innocent purchaser for value?	No, Ayala Land was not considered an innocent purchaser for value because the titles bore notices of pending cases and adverse claims sufficient to place it on guard. This meant Ayala Land was aware that the ownership of the properties was being disputed.
What is the implication of a void title?	A void title cannot give rise to a valid title, and an action to declare the nullity of a void title does not prescribe. This means that a void title can always be attacked, whether directly or collaterally.

This Supreme Court ruling underscores the importance of accurate and valid survey plans in land registration. Landowners and prospective buyers should exercise due diligence in verifying the integrity of survey plans to avoid future disputes and ensure the security of their land titles. As this case demonstrates, a flawed survey can invalidate a title, regardless of its registration date.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: SPOUSES YU HWA PING AND MARY GAW VS. AYALA LAND, INC., G.R. No. 173120, April 10, 2019