Cases on Indispensable PArties

8/21/2019 Cases on Indispensable PArties

1/34

SECOND DIVISION

[G.R. No. 161955. August 31, 2005]

CELEDONIO MOLDES, ROSITA MOLDES a! CAROLINA

CEDIA, petitioners, vs. TI"#RCIO $ILLAN#E$A, A%OLONIO

$ILLAN#E$A, MAN#EL $ILLAN#E$A, MARIANO

D#LLA$IN, RONALDO D#LLA$IN a! TEODORA

D#LLA$IN, respondents.

D E C I S I O N

CALLE&O, SR., J .'

This is a petition for review on certiorari of the Decision[1] of the Court of Appeals

(CA an! its "esolution[#] in CA$%&"& CV No& ')1*&

T() At)*)!)ts

The spouses +uan ,ollet an! Silvina Del ,onte were the owners of three

parcels of lan! then locate! in the ,unicipalit- of Ta.ui. (now a part of ,untinlupa

Cit- i!entifie! as /ot Nos& )*0 )02 an! )01& The lots ha! a total area of 3422

s5uare 6eters covere! 7- Transfer Certificate of Title (TCT No& #1*2 issue! 7- the

"e.ister of Dee!s of "i8al& Their !au.hter +osefa !ie! intestate on Nove67er #'

101* at the a.e of #)& +uan ,ollet !ie! intestate on +anuar- 32 103' an! his

wi!ow !ie! also intestate on ,arch ## 10'*& The- were survive! 7- their

!au.hter "o6ana ,ollet who 6arrie! An!res %elar!o& [3] "o6ana an! An!res were

7lesse! with five chil!ren na6el- 9laviana :ri.i!a ,aria Isaac an! /eonila all

surna6e! %elar!o&['] 9laviana 6arrie! ,anuel Villanueva an! their 6arria.e

pro!uce! four offsprin.s na6el- Apolinario Ti7urcio ,anuel an! +uanita (now

!ecease! all surna6e! Villanueva&[)] +uanita 6arrie! Cornelio ,aritana& The

couple 7e.ot five chil!ren na6el- /uis Orlan!o Nor6ita Die.o an! +ulieta allsurna6e! ,ariti6a&

:ri.i!a 6arrie! ,ariano Dullavin an! the- ha! two chil!ren "olan!o an!

Teo!ora 7oth surna6e! Dullavin&[4] ,aria 6arrie! ;ri6o Tolentino an! the couple

ha! two chil!ren


2/34

On ,arch 1 104) a !ocu6ent !eno6inate! as Dee! of E=tra>u!icial

Settle6ent with ?uitclai6[12] coverin. /ot Nos& )*0 )02 an! )01 was e=ecute! 7-

,aria an! /eonila surna6e! %elar!o ,ariano Dullavin ,anuel +uanita Ti7urcio

an! Apolonio all surna6e! Villanueva an! E6eterio Cele!onio Do6in.o "osita

an! Carolina all surna6e! ,ol!es&

/ot )*0 was !ivi!e! as follows@ ,aria %elar!o share E6eterio ,ol!es

Do6in.o ,ol!es Cele!onio ,ol!es "osita ,ol!es an! Carolina ,ol!es Ce!ia

share& It appears that the Villanueva si7lin.s (,anuel Ti7urcio Apolonio an!

+uanita waive! their share in favor of the ,ol!eses an! Carolina&

/ot )02 was a!>u!icate! as follows@ /ot )02$: entirel- to /eonila %elar!o /ot

)02$C was allotte! to E6eterio ,ol!es Do6in.o ,ol!es Cele!onio ,ol!es "osita

,ol!es an! Carolina ,ol!es Ce!ia /ot )02$D was .iven to ,aria %elar!o /eonila

%elar!o ,ariano Dullavin E6eterio ,ol!es Do6in.o ,ol!es Cele!onio ,ol!es"osita ,ol!es an! Carolina ,ol!es Ce!ia&

It appears that ,ariano Dullavin an! the Villanueva si7lin.s waive! their

respective shares in /ot )02$: in favor of /eonila %elar!o in /ot )02$C to E6eterio

,ol!es Do6in.o ,ol!es Cele!onio ,ol!es "osita ,ol!es an! Carolina ,ol!es

Ce!ia an! a.ain in /ot D in favor of ,aria %elar!o /eonila %elar!o E6eterio

,ol!es Do6in.o ,ol!es Cele!onio ,ol!es "osita ,ol!es an! Carolina ,ol!es

Ce!ia&

/ot )01 was partitione! as follows@ share of /ot )01$A to /eonila %elar!o share

of /ot )01$A to ,aria %elar!o an! /ot Nos& )01$: an! )01$C to Cele!onio ,ol!es&

It appears that E6eterio ,ol!es Do6in.o ,ol!es "osita ,ol!es Apolonio

,ol!es an! Carolina ,ol!es Ce!ia the Villanueva si7lin.s an! ,ariano Dullavin

waive! all their respective ri.hts to the share of /ot )01$A .iven to /eonila %elar!o

to the share of /ot )01$A .iven to ,aria %elar!o an! to /ot Nos& )01$: an! )01$C

awar!e! to Cele!onio ,ol!es&

On +anuar- #4 10* ,anuel Villanueva an! his chil!ren na6el- Ti7urio an! Apolonio an! ,ariano Dullavin an! his chil!ren na6el- "olan!o an! Teo!ora

file! a Co6plaint with the "e.ional Trial Court ("TC of ,aBati a.ainst Cele!onio

"osita an! Carolina Ce!ia all surna6e! ,ol!es to annul the Dee! of E=tra>u!icial

Settle6ent with ?uitclai6& The co6plaint containe! the followin. pra-er@

WHEREFORE, it is most respectfully prayed of this Honorable Court to:

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3/34

1. Order the rescission of the Extraudicial !ettlement "ith #uitclaim

$%nnex &'(

). Order the defendants to pay plaintiffs the follo"in*:

a' +oral dama*es in the sum of 1--,---(

b' Exemplary dama*es in the sum of -,---(

c' %ttorneys fee of /-,--- plus 0- per court appearance( and,

d' o pay the costs of suit.

laintiffs further pray for such other reliefs and remedies "hich are ust ande2uitable under premises.[11]

;laintiffs "olan!o an! Teo!ora Dullavin also alle.e! that the- never Bnew of

an- !ocu6ent wherein the- repu!iate! their share in the estate of their .reat$

.ran!parents& In fact in the past the- ha! wante! to e>ect the ,ol!eses 7ut their

case was !is6isse! 7ecause of the 5uestione! !ee! which inci!entall- was the

ver- first ti6e the- saw it& The- pointe! out that 7- recBonin. the- were still 6inor

when their father ,ariano si.ne! the 5uestione! !ee!& :e that as it 6a- it was of

no 6o6ent 7ecause their father ha! nothin. to repu!iate as he was not .iven an-

share in the estate of the spouses ,ollet&[1#]

;laintiffs Ti7urio an! Apolonio Villanueva alle.e! that the- an! their sister

+uanita were entruste! 7- their father to their aunt /eonila %elar!o when the-

were ei.ht -ears ol! si= -ears ol! an! one -ear ol! respectivel- the- live! with her

until 103* when the- were 6arrie! as a result the- !evelope! a !eep respect for

their aunt so 6uch so that the- si.ne! the !ee! 7elievin. that the- woul! 7e

.ettin. their inheritance un!er the !ee! 6ore e=pe!itiousl- not Bnowin. that

7ecause of their illiterac- the- ha! relin5uishe! their ri.hts over their inheritance&

;laintiffs Ti7urcio Apolonio an! ,anuel further alle.e! that the- were

hoo!winBe! 7- their aunt /eonila as well as Cele!onio in partin. with their

inheritance& The- clai6e! that 7ein. illiterate an! unlettere! the- !i! not

un!erstan! the contents an! the le.al effects of the 5uestione! !ee!& The-

e=plaine! that the- si.ne! the !ee! upon /eonilas representation an! that what

the- were si.nin. was >ust a partition of the estate of their .reat$.ran!parents& As it

turne! out an! was reveale! later the- were surprise! to 7e e=clu!e! therefro6& [13]

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4/34

The plaintiffs alle.e! inter alia that the !ee! was tainte! with frau! 7ecause it

inclu!e! Cele!onio "osita an! Carolina who were not heirs of the spouses ,ollet

(whose estate was partitione!& The- !enie! the !efen!ants alle.ation that the-

were +osefas !escen!ants the latter havin. !ie! sin.le at the a.e of #) an! without

issue&

In their answer the !efen!ants specificall- !enie! that there was frau! or

un!ue pressure in the e=ecution of the 5uestione! !ee!& The- 6aintaine! that the-

were the !irect !escen!ants of the spouses ,ollet an! successors$in$interest of

+osefa ,ollet fro6 who6 the- !erive! their ri.hts& Accor!in. to the6 lon. 7efore

she !ie! their .ran!6other +osefa 6arrie! one 9lorencio Dia8& This 6atri6onial

union 7e.ot Do6in.o Dia8 an! their 6other Dolores Dia8 who in turn 6arrie!

their father E6eterio ,ol!es&[1']

:- wa- of special an! affir6ative !efense the !efen!ants averre! that theaction ha! prescri7e! 7ecause 6ore than #2 -ears ha! elapse! fro6 e=ecution of

the 5uestione! !ee!&[1)] As counterclai6 the- pra-e! that the plaintiffs 7e a!>u!.e!

to pa- the6 the a6ounts of ;122222&22 for 6oral !a6a.es ;)2222&22 for

e=e6plar- !a6a.es an!;32222&22 for attorne-s fees&[14]

T() Ru+g o- t() R)goa+ Ta+ Cout

On ,a- 14 100' the "TC ren!ere! a !ecision !eclarin. that the Dee! of

E=tra$>u!icial Settle6ent with ?uitclai6 was voi!& The !ispositive portion thereofrea!s@

WHEREFORE, premises considered, ud*ment is hereby rendered in fa3or of the

plaintiffs. 4t is the findin*s of this Court that since the consent of the plaintiffs

"ere not freely *i3en "hen they si*ned the document of the parties "hich they

did not understand, but "as obtained thru fraud, the 5eed of artition "ith

#uitclaim is hereby ordered rescinded and 3oided.

he other *reat *randchildren, particularly the children of &ri*ida +ollet 6elardo,married to +ariano 5ulla3in, bein* Rolando 5ulla3in and eodora 5ulla3in,

includin* the children of +aria +ollet 6elardo married to rimo olentino, bein*

Hermino and Carolyn, "ere not *i3en their share of their inheritance, all the more

reason that this 5eed of artition "ith Wai3er and #uitclaim should be rescinded

and partition effected amon* all of the laintiffs as they probably are the only true

heirs of spouses 7uan +ollet and !il3ina 5el +onte.

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5/34

%ccordin*ly, the property should remain as the Estate of the late !pouses 7uan

+ollet and !il3ina 5el +onte +ollet.

%s plaintiffs "ere force to liti*ate, all 5efendants are, ointly and solidarily,

directed to pay the laintiffs actual dama*es in the sum of 1--,---.--.

5efendants, ointly and solidarily, must pay moral dama*es for the trouble and

anxiety caused to plaintiffs in the sum of 1--,---.-- and as a deterrent to their

propensity to co3et "hat do not belon* to them, 5efendants must, ointly and

solidarily, pay laintiffs exemplary dama*es of 1--,---.--.

%s laintiffs "ere forced to liti*ate thru counsel, 5efendants must, ointly and in

solidum, pay %ttorneys fees in the sum of -,---.--, and,

he cost of this proceedin*s.

4t is !O OR5ERE5.[1]

The "TC hel! that the Dee! of E=tra>u!icial Settle6ent with ?uitclai6 was a

sha6& Throu.h !eceit an! 6achinations the plaintiffs 7ein. illiterate at that were

6islea! !upe! railroa!e! an! 7a67oo8le! 7- the !efen!ants in si.nin. the !ee!

an! waivin. their respective shares& In fact the !efen!ants never file! it in the

Office of the "e.ister of Dee!s an act [.ivin.] !ou7t to [its] e=istence an! vali!it-&

The "TC further rule! that the evi!ence showe! that the !efen!ants were not

heirs of the spouses ,ollet whose estate was partitione!& Accor!in. to the trial

court the !efen!ants own evi!ence 7elie! their clai6 of heirship&

The !efen!ants appeale! the !ecision to the CA where the- alle.e! inter alia

that the "TC erre! (1 in rulin. that the- were not heirs of the spouses +uan ,ollet

an! Silvina Del ,onte ,ollet (# in voi!in. the Dee! of E=tra>u!icial Settle6ent with

?uitclai6 on the .roun! of frau! an! (3 in awar!in. !a6a.es a.ainst the6& [1*]

T() Ru+g o- t() Cout o- A//)a+s

On +anuar- 32 #223 the CA affir6e! with 6o!ification the !ecision of the "TC

with this fallo@

WHEREFORE, the assailed decision dated 1/ +ay 1880 is hereby %FF4R+E5

"ith +O54F4C%4O9 deletin* the a"ard of dama*es and attorneys fees.

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!O OR5ERE5.[10]

The CA affir6e! the fin!in.s of the "TC that the plaintiffs$appellees were !upe!

7- the !efen!ants$appellants in si.nin. the frau!ulent !ee!& It a6plifie! that the

waivers havin. no consi!eration were wan.le! fro6 the ver- 6uch .ulli7leplaintiffs$appellees who were not .iven a cop- 7- the !efen!ants$appellants& In

fact the latter refuse! to .ive the plaintiffs$appellees a cop- of the !ee! when the-

re5ueste! one&

The appellate court further ratiocinate! that as the su7>ect !ee! inclu!e!

persons who were not heirs of the person whose estate was partitione! such !ee!

is .overne! 7- Article 112) of the Civil Co!e& [#2] Thus since the partition !ee6e!

ine=istent an! voi! fro6 the 7e.innin. the action seeBin. a !eclaration of its nullit-

coul! not prescri7e&

The appellate court !enie! the 6otion for reconsi!eration of the !efen!ants$

appellants[#1] who forthwith file! the instant petition& The- 6a!e the followin.

alle.ations@

I& The Court of Appeals !isre.ar!e! the 7asic rule that the respon!ents were the

plaintiffs who ha! the 7ur!en of provin. the rescissa7ilit- ( sic of the notarial

!ee! in favor of the petitioners&

II& The Court of Appeals !isre.ar!e! the incontesta7le an! unconteste! fact that

petitioners have 7een in possession of the propert- in the concept of owners

fift- ()2 -ears prior to the e=ecution of the !ee! that respon!ents sou.ht to

rescin!&

III& The Court of Appeals !isre.ar!e! the 7asic principle in the a!>u!ication that

when the evi!ence of the parties in a civil case are in e5uipoise the co6plaint

6ust 7e !is6isse! for failure of the plaintiff to prove his case 7- prepon!erant

evi!ence&

IV& The Court of Appeals 7ase! its !ecision on evi!ence it itself pronounce as

i6pro7a7le co6poun!in. the error 7- co6pletel- !isre.ar!in. the nature an!conse5uence of a notarial !ocu6ent&[##]

T() Ru+g o- t() Cout

The Court .rants the petition on the sole .roun! that the respon!ents who

were the plaintiffs in the trial court faile! to i6plea! in!ispensa7le parties&

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7/34

The respon!ents herein who were the plaintiffs in the court a quo alle.e! in

their co6plaint that as heirs of the spouses ,ollet the- were co$owners of the

su7>ect propert- to.ether with the heirs of ,aria an! /eonila na6el- ;ri6o

Tolentino an! their chil!ren


8/34

/iBewise in Metropolitan Bank and rust Compan! v. Hon. "loro . Ale#o[#*] the

Court rule! that the evi!ent ai6 an! intent of the "ules re.ar!in. the >oin!er of

in!ispensa7le an! necessar- parties is a co6plete !eter6ination of all possi7le

issues not onl- 7etween the parties the6selves 7ut also as re.ar!s to other

persons who 6a- 7e affecte! 7- the >u!.6ent& A vali! >u!.6ent cannot even 7eren!ere! where there is want of in!ispensa7le parties&

EREORE the petition is %"ANTED& The Decision of the "e.ional Trial

Court an! Decision of the Court of Appeals in CA$%&"& CV No& ')1* are

"EVE"SED an! SET ASIDE& No costs&

SO ORDERED.

$uno% &Chairman'% Austria(Martine)% inga% an! Chico(*a)ario% ++.% concur .

Republic of the Philippines

!upreme Court&a*uio City

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9/34

THIRD DIVISION

PHILIP L. GO, PACIFICO .LI! "n# ANDR$% . LI!

etitioners,

; 3ersus ;

DISTINCTION PROP$RTI$S

D$V$LOP!$NT AND

CONSTR&CTION, INC.

Respondent.

G.R. No. '()*+)

resent:

%, and

ER=%!;&ER9%&E, JJ.

romul*ated:

%pril ), )-1)

? ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; ?

D $ C I S I O N

!$NDOA, J.-


10/34

&efore the Court is a petition for re3ie" on certiorari under Rule 0 of

the 188 Rules of Ci3il rocedure assailin* the +arch 1, )-1- 5ecision@1A and

October , )-1- Resolution@)A of the Court of %ppeals $CA' in C%;6.R. ! 9o.

11--1B entitled Distinction Properties Development & Construction, Inc.

v. Housin !and"se #eulatory $oard %C#', Philip !. (o, Pacifico ). !im

and Andre* ). !im.D

Factual and Procedural Antecedents:

hilip =. 6o, acifico #. =im and %ndre" #. =im %petitioners' are

re*istered indi3idual o"ners of condominium units in hoenix Hei*hts

Condominium located at H. 7a3ierCanley Road, &o. &a*on* 4lo*, asi* City,

+etro +anila.

Respondent 5istinction roperties 5e3elopment and Construction,

4nc. %DPDCI' is a corporation existin* under the la"s of the hilippines "ith

principal office at 9o. 1-)- !oler !treet, &inondo, +anila. 4t "as incorporated

as a real estate de3eloper, en*a*ed in the de3elopment of condominium

proects, amon* "hich "as the hoenix Hei*hts Condominium.

4n February 188/, petitioner acifico =im, one of the incorporators and

the then president of 55C4, executed a +aster Deed and Declaration of #estrictions%+DD#'@BA of hoenix Hei*hts Condominium, "hich "as filed "ith

the Re*istry of 5eeds. %s the de3eloper, 55C4 undertoo, amon* others, the

maretin* aspect of the proect, the sale of the units and the release of flyers

and brochures.

hereafter, hoenix Hei*hts Condominium Corporation %PHCC' "as

formally or*aniGed and incorporated. !ometime in )---, 55C4 turned o3er

to HCC the o"nership and possession of the condominium units, except for the t"o saleable commercial unitsspaces:

1. 6F =e3el &%! co3ered by Condominium Certificate of

itle $CC' 9o. )1-B- utiliGed as the

HCCs administration office, and

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11/34

). 6F =e3el 0;% co3ered by CC 9o. ;)B8/C;1B/;44

used as li3in* 2uarters by the buildin* administrator.

%lthou*h used by HCC, 55C4 "as assessed association dues for

these t"o units.

+ean"hile, in +arch 1888, petitioner acifico =im, as president of

55C4, filed an Application for Alteration of Plan [4] pertainin* to the

construction of )) stora*e units in the spaces adunct to the parin* area of the

buildin*. he application, ho"e3er, "as disappro3ed as the proposed

alteration "ould obstruct li*ht and 3entilation.

4n %u*ust )--0, throu*h its &oard,@A HCC appro3ed a settlement offer

from 55C4 for the set;off of the latters association dues arrears "ith theassi*nment of title o3er CC 9os. )1-B- and ;)B8/C;1B/;44 and their

con3ersion into common areas. hus, CC 9os. ;0B0-- and ;0BB88 "ere

issued by the Re*istrar of 5eeds of asi* City in fa3or of HCC in lieu of the

old titles. he said settlement bet"een the t"o corporations lie"ise included

the re3ersion of the )) stora*e spaces into common areas. With the conformity

of HCC, 55C4s application for alteration $con3ersion of unconstructed ))

stora*e units and units 6F0;% and &%! from saleable to common areas' "as

*ranted by the Housin* and =and Ise Re*ulatory &oard %H!"#$'.@/A

4n %u*ust )--J, petitioners, as condominium unit;o"ners, filed a

complaint@A before the H=IR& a*ainst 55C4 for unsound business practices

and 3iolation of the +55R. he case "as doceted as RE+; -J--J;1B8-/.

hey alle*ed that 55C4 committed misrepresentation in their circulated

flyers and brochures as to the facilities or amenities that "ould be a3ailable in

the condominium and failed to perform its obli*ation to comply "ith the

+55R.4n defense, 55C4 denied that it had breached its promises and

representations to the public concernin* the facilities in the condominium. 4t

alle*ed that the brochure attached to the complaint "as a mere preparatory

draftD and not the official one actually distributed to the public, and that the

said brochure contained a disclaimer as to the bindin* effect of the supposed

offers therein. %lso, 55C4 2uestioned the petitioners personality to sue as

the action "as a deri3ati3e suit.

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12/34

%fter due hearin*, the H=IR& rendered its decision@JA in fa3or of

petitioners. 4t held as in3alid the a*reement entered into bet"een 55C4 and

HCC, as to the alteration or con3ersion of the subect units into common

areas, "hich it pre3iously appro3ed, for the reason that it "as not appro3ed by

the maority of the members of HCC as re2uired under !ection 1B of the

+55R. 4t stated that 55C4s defense, that the brochure "as a mere draft,

"as a*ainst human experience and a con3enient excuse to a3oid its obli*ation

to pro3ide the facility of the proect. he H=IR& further stated that the case

"as not a deri3ati3e suit but one "hich in3ol3ed contracts of sale of the

respecti3e units bet"een the complainants and 55C4, hence, "ithin its

urisdiction pursuant to !ection 1, residential 5ecree %P.D.' 9o. 8$he

!ubdi3ision and Condominium &uyers rotecti3e 5ecree', as amended. he

decretal portion of the H=IR& decision reads:

WHEREFORE, in view of the foregoing, judgment is hereby

rendered: 1. Ordering respondent to restore/provide proper gym

f!i"ities, to restore the h""wy t the me##nine f"oor.

$. %e!"ring the !onversion/"tertion of $$ storge unitsnd &nits 'F()* nd +* s i""eg", nd !onse-uent"y,nd ordering respondent to !ontinue pying the!ondominium dues for these units, with interest ndsur!hrge.

. Ordering the Respondent to py the sum of

hp00,102.32, p"us interests nd sur!hrges, s!ondominium dues in rrers nd turnover thedministrtion offi!e to H44 without ny !hrges

pursunt to the representtion of the respondent in the bro!hures it !ir!u"ted to the pub"i! with !orresponding!redit to !omp"innts5 individu" shres s members of H44 entit"ed to su!h refund or reimbursements.

(. Ordering the Respondent to refund to the H44 the

mount of hp1,$33,622.22, representing the !ost of thedeep we"", with interests nd sur!hrges with

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!orresponding !redit to !omp"innts5 individu" shress members of H44 entit"ed to su!h refund orreimbursements.

6.

Ordering the Respondent to py the !omp"innts mor"nd e7emp"ry dmges in the mount of ₱12,222.22 ndttorney5s fees in the mount of ₱12,222.22.

*"" other !"ims nd !ounter!"ims re hereby dismissed!!ording"y.

89 8 O OR%ERE%.0;

%**rie3ed, 55C4 filed "ith the C% its etition for Certiorari androhibition@1-A dated %u*ust 11, )--8, on the *round that the H=IR& decision

"as a patent nullity constitutin* an act "ithout or beyond its urisdiction and

that it had no other plain, speedy and ade2uate remedy in the course of la".

On +arch 1, )-1-, the C% rendered the assailed decision "hich

disposed of the case in fa3or of 55C4 as follo"s:

WHEREFORE, in view of the foregoing, the petition is

'R*


14/34

he C% held that urisdiction o3er HCC, an indispensable party, "as

neither ac2uired nor "ai3ed by estoppel. Citin* Carandan v. Heirs of De

(uman,@1)Ait held that, in any e3ent, the action should be dismissed because the

absence of HCC, an indispensable party, rendered all subse2uent actuations of

the court 3oid, for "ant of authority to act, not only as to the absent parties but

e3en as to those present.

Finally, the C% held that the rule on exhaustion of administrati3e

remedies could be relaxed. %ppeal "as not a speedy and ade2uate remedy as

urisdictional 2uestions "ere continuously raised but i*nored by the

H=IR&. 4n the present case, ho"e3er, @tAhe bottom line is that the challen*ed

decision is one that had been rendered in excess of urisdiction, if not "ith

*ra3e abuse of discretion amountin* to lac or excess of urisdiction.D@1BA

etitioners filed a motion for reconsideration@10A of the said decision. he

motion, ho"e3er, "as denied by the C% in its Resolution dated October ,

)-1-.

Hence, petitioners interpose the present petition before this Court

anchored on the follo"in*

GRO&NDS

'/

TH$ CO&RT OF APP$ALS $RR$D IN HOLDING THAT

TH$ HL&R0 HAS NO 1&RISDICTION OV$R TH$ INSTANT

CAS$2

+/

TH$ CO&RT OF APP$ALS ALSO $RR$D IN FINDING

THAT PHCC IS AN INDISP$NSA0L$ PART3 %HICH

%ARRANT$D TH$ DIS!ISSAL OF TH$ CAS$ 03 R$ASON

OF IT NOT HAVING 0$$N I!PL$AD$D IN TH$ CAS$2

4/

TH$ CO&RT OF APP$ALS HAS LI5$%IS$ $RR$D IN

R$LA6ING TH$ R&L$ ON NON7$6HA&STION OF



15/34

AD!INISTRATIV$ R$!$DI$S 03 D$CLARING THAT

TH$ APP$AL !A3 NOT 0$ A SP$$D3 AND AD$&AT$

R$!$D3 %H$N 1&RISDICTIONAL &$STIONS %$R$

CONTIN&O&SL3 RAIS$D 0&T IGNOR$D 03 TH$

HL&R02 "n#

)/

THAT FINALL3, TH$ CO&RT A QUO ALSO $RR$D IN NOT

GIVING D&$ R$SP$CT OR $V$N FINALIT3 TO TH$

FINDINGS OF TH$ HL&R0.8'9:

etitioners contend that the H=IR& has urisdiction o3er the subect

matter of this case. heir complaint "ith the H=IR& clearly alle*ed anddemanded specific performance upon 55C4 of the latters contractual

obli*ation under their indi3idual contracts to pro3ide a bac;up "ater system

as part of the amenities pro3ided for in the brochure, to*ether "ith an

administration office, proper *ym facilities, restoration of a hall"ay, amon*

others. hey point out that the 3iolation by 55C4 of its obli*ations

enumerated in the said complaint s2uarely put their case "ithin the ambit of

!ection 1, .5. 9o. 8, as amended, enumeratin* the cases that are "ithin the

exclusi3e urisdiction of the H=IR&. =ie"ise, petitioners ar*ue that the case"as not a deri3ati3e suit as they "ere not suin* for and in behalf of

HCC. hey "ere suin*, in their indi3idual capacities as condominium unit

buyers, their de3eloper for breach of contract. 4n support of their 3ie" that

HCC "as not an indispensable party, petitioners e3en 2uoted the dispositi3e

portion of the H=IR& decision to sho" that complete relief bet"een or amon*

the existin* parties may be obtained "ithout the presence of HCC as a party

to this case. etitioners further ar*ue that 55C4s petition before the C%

should ha3e been dismissed outri*ht for failure to comply "ith !ection 1, Rule?


16/34

because the contro3ersies raised therein are in the nature of intra;corporate

disputes.D hus, the case does not fall "ithin the urisdiction of the H=IR&

under !ection 1, .5. 9o. 8 and .5. 9o. 1B00. %ccordin* to 55C4,

petitioners sou*ht to address the in3alidation of the corporate acts duly entered

and executed by HCC as a corporation of "hich petitioners are admittedly

members of, and not the acts pertainin* to their o"nership of the units. !uch

bein* the case, HCC should ha3e been impleaded as a party to the

complaint. 4ts non;inclusion as an indispensable party "arrants the dismissal

of the case. 55C4 further a3ers that the doctrine of exhaustion is inapplicable

inasmuch as the issues raised in the petition "ith the C% are purely le*al( that

the challen*ed administrati3e act is patently ille*al( and that the procedure of

the H=IR& does not pro3ide a plain, speedy and ade2uate remedy and its

application may cause *reat and irreparable dama*e. Finally, it claims that the

decision of the H=IR& %rbiter has not attained finality, the same ha3in* been

issued "ithout urisdiction.

Essentially, the issues to be resol3ed are: $1' "hether the H=IR& has

urisdiction o3er the complaint filed by the petitioners( $)' "hether HCC is an

indispensable party( and $B' "hether the rule on exhaustion of administrati3e

remedies applies in this case.

he petition fails.

&asic as a hornboo principle is that urisdiction o3er the subect matter

of a case is conferred by la" and determined by the alle*ations in the

complaint "hich comprise a concise statement of the ultimate facts constitutin*

the plaintiffKs cause of action. he nature of an action, as "ell as "hich court or

body has urisdiction o3er it, is determined based on the alle*ations contained

in the complaint of the plaintiff, irrespecti3e of "hether or not the plaintiff isentitled to reco3er upon all or some of the claims asserted therein.

he ";e


17/34

determined by the nature of the cause of action, the subect matter or property

in3ol3ed and the parties.@1JA

6enerally, the extent to "hich an administrati3e a*ency may exercise its

po"ers depends lar*ely, if not "holly, on the pro3isions of the statute creatin*

or empo"erin* such a*ency.@18A With respect to the H=IR&, to determine if

said a*ency has urisdiction o3er petitioners cause of action, an examination of

the la"s definin* the H=IR&s urisdiction and authority becomes

imperati3e. .5. 9o. 8,@)-A specifically !ection B, *ranted the 9ational

Housin* %uthority %HA' the Lexclusi3e urisdiction to re*ulate the real estate

trade and business.L hen came .5. 9o. 1B00 @)1A expandin* the urisdiction of

the 9H% $no" H=IR&', as follo"s:

E498O< 1. 8n the e7er!ise of its fun!tions to regu"te the re"estte trde nd business nd in ddition to its powersprovided for in residenti" %e!ree


18/34

he H=IR& is *i3en a "ide latitude in characteriGin* or cate*oriGin*

acts "hich may constitute unsound business practice or breach of contractual

obli*ations in the real estate trade. his *rant of expansi3e urisdiction to the

H=IR& does not mean, ho"e3er, that all cases in3ol3in* subdi3ision lots or

condominium units automatically fall under its urisdiction. he C% aptly

2uoted the case of Christian (eneral Assembly, Inc. v. Inacio,@)A "herein the

Court held that:

9he =e


19/34

. %e!"ring the !onversion/"tertion of $$ storge units nd&nits 'F()* nd +* s i""eg", nd !onse-uent"y, orderingrespondent to !ontinue pying the !ondominium dues forthese units, with interest nd sur!hrgeB

(. Ordering the respondent to py the sum of H00,102.32, p"us interest nd sur!hrges, s!ondominium dues in rrers nd turnover thedministrtion offi!e to H44 without ny !hrgespursunt to the representtion of the respondent in the

bro!hures it !ir!u"ted to the pub"i!B

6. Ordering the respondent to refund to the H44 themount of H1,$33,622.22, representing the !ost of the

deep we"", with interests nd sur!hrgesB

?. Ordering the respondent to py the !omp"inntsmor"/e7emp"ry dmges in the mount of H122,222.22B nd

3. Ordering the respondent to py the !omp"innt ttorney5s

fees in the mount of H122,222.22, nd H,222.22for every hering s!hedu"ed by the Honorb"e Offi!e.$0;

%s it is clear that the acts bein* assailed are those of HHC, this case

cannot prosper for failure to implead the proper party, HCC.

%n indispensable party is defined as one "ho has such an interest in the

contro3ersy or subect matter that a final adudication cannot be made, in his

absence, "ithout inurin* or affectin* that interest.@B-A 4n the recent case

of a-a-aisan !a-as n +anaa*a sa eihin %!+/0!A!IA/+"' v.

eihin Philippines Corporation,@B1A the Court had the occasion to state that:

&nder e!tion 3, Ru"e of the Ru"es of 4ourt, Dprties ininterest without whom no fin" determintion !n be hd of n!tion sh"" be joined s p"intiffs or defendnts.D 8f there is fi"ure to imp"ed n indispensb"e prty, ny judgmentrendered wou"d hve no effe!tiveness. It is ?p


20/34

shoul# be #is=isse#. The "bsence of "n in#ispens"ble p"


21/34

dispute may be determined once and for all in one liti*ation. $alarca

3. &a*insi, BJ hil. 1, 1J'.

From all indications, HCC is an indispensable party and should ha3e

been impleaded, either as a plaintiff or as a defendant,@B0A in the complaint filed

before the H=IR& as it "ould be directly and ad3ersely affected by any

determination therein. o belabor the point, the causes of action, or the acts

complained of, "ere the acts of HCC as a corporate body. 9ote that in the

ud*ment rendered by the H=IR&, the dispositi3e portion in particular,

55C4 "as ordered $1' to pay ₱88J,18-.-, plus interests and surchar*es, as

condominium dues in arrears and turno3er the administration office to PHCC (

and $)' to refund to PHCC ₱1,),--.--, representin* the cost of the deep

"ell, "ith interests and surchar*es. %lso, the H=IR& declared as ille*al the

a*reement re*ardin* the con3ersion of the )) stora*e units and Inits 6F0;%

and &%!, to "hich a*reement HCC "as a party.

E3idently, the cause of action ri*htfully pertains to HCC. etitioners

cannot exercise the same except throu*h a deri3ati3e suit. 4n the complaint,

ho"e3er, there "as no alle*ation that the action "as a deri3ati3e suit. 4n fact, in

the petition, petitioners claim that their complaint is not a deri3ati3e suit. @BA 4n

the cited case of Chua v. Court of Appeals,@B/A the Court ruled:

For derivtive suit to prosper, it is re-uired tht theminority sto!Cho"der suing for nd on beh"f of the!orportion =ust "lle>e in his co=pl"int th"t he is suin> on "#e


22/34

Without HCC as a party, there can be no final adudication of the

H=IR&s ud*ment. he C% "as, thus, correct in orderin* the dismissal of the

case for failure to implead an indispensable party.

o ustify its findin* of contractual 3iolation, the H=IR& cited a

pro3ision in the +55R, to "it:

e!tion 1. *mendment. *fter the !orportion sh""

hve been !reted, orgni#ed nd operting, this >%%R my be mended, in who"e or in prt, by the ffirmtive vote of &nit owners !onstituting t "est fifty one @61A per!ent of the&nit shres in the roje!t t meeting du"y !""ed pursunt to

the 4orportion +y =ws nd subje!t to the provisions of the4ondominium *!t.

his citation, ho"e3er, is misplaced as the abo3e;2uoted pro3ision

pertains to the amendment of the +55R. 4t should be stressed that petitioners

are not asin* for any chan*e or modification in the terms of the +55R. What

they are really prayin* for is a declaration that the a*reement re*ardin* the

alterationcon3ersion is ille*al. hus, the Court sustains the C%s findin* that:

9here ws nothing in the re!ords to suggest tht %%48

sought the mendment of prt or the who"e of su!h>%%R. 9he !ited se!tion is somewht !onsistent on"y withthe prin!ip"e tht n mendment of !orportion5s Articles of

Incorporation must be ssented to by the sto!Cho"dersho"ding more thn 62 of the shres. 9he >%%R does not!ontemp"te, by su!h provision, tht "" !orporte !ts ought to

be with the !on!urren!e of mjority of the unit owners.3;

+oreo3er, considerin* that petitioners, "ho are members of HCC, are

ultimately challen*in* the a*reement entered into by HCC "ith 55C4, they

are assailin*, in effect, HCCs acts as a body corporate. his action,

therefore, partaes the nature of an intra;corporate contro3ersy,D the

urisdiction o3er "hich used to belon* to the !ecurities and Exchan*e

Commission %12C', but transferred to the courts of *eneral urisdiction or the

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appropriate Re*ional rial Court %#3C', pursuant to !ection b of .5.

9o. 8-);%,@BJA as amended by !ection .) of Republic %ct %#.A.' 9o. J88.@B8A

%n intra;corporate contro3ersy is one "hich Lpertains to any of the

follo"in* relationships: $1' bet"een the corporation, partnership or association

and the public( $)' bet"een the corporation, partnership or association and the

!tate in so far as its franchise, permit or license to operate is concerned( $B'

bet"een the corporation, partnership or association and its stocholders,

partners, members or officers( and $0' amon* the stocholders, partners or

associates themsel3es.L@0-A

&ased on the fore*oin* definition, there is no doubt that the contro3ersy

in this case is essentially intra;corporate in character, for bein* bet"een a

condominium corporation and its members;unit o"ners. 4n the recent case

of Chateau De $aie Condominium Corporation v. 1ps. +oreno,@01A an action

in3ol3in* the le*ality of assessment dues a*ainst the condominium

o"nerde3eloper, the Court held that, the matter bein* an intra;corporate

dispute, the RC had urisdiction to hear the same pursuant to R.%. 9o. J88.

%s to the alle*ed failure to comply "ith the rule on exhaustion of

administrati3e remedies, the Court a*ain a*rees "ith the position of the C%that the circumstances pre3ailin* in this case "arranted a relaxation of the rule.

he doctrine of exhaustion of administrati3e remedies is a cornerstone of

our udicial system. he thrust of the rule is that courts must allo"

administrati3e a*encies to carry out their functions and dischar*e their

responsibilities "ithin the specialiGed areas of their respecti3e competence.@0)A 4t has been held, ho"e3er, that the doctrine of exhaustion of administrati3e

remedies and the doctrine of primary urisdiction are not ironclad rules. 4n thecase of #epublic of the Philippines v. !acap,@0BA the Court enumerated the

numerous exceptions to these rules, namely: $a' "here there is estoppel on the

part of the party in3oin* the doctrine( $b' "here the challen*ed administrati3e

act is patently ille*al, amountin* to lac of urisdiction( $c' "here there is

unreasonable delay or official inaction that "ill irretrie3ably preudice the

complainant( $d' "here the amount in3ol3ed is relati3ely so small as to mae

the rule impractical and oppressi3e( $e' "here the 2uestion in3ol3ed is purely

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24/34

le*al and "ill ultimately ha3e to be decided by the courts of ustice( $f' "here

udicial inter3ention is ur*ent( $*' "here the application of the doctrine may

cause *reat and irreparable dama*e( $h' "here the contro3erted acts 3iolate due

process( $i' "here the issue of non;exhaustion of administrati3e remedies has

been rendered moot( $' "here there is no other plain, speedy and ade2uate

remedy( $' "here stron* public interest is in3ol3ed( and $l' in 2uo "arranto

proceedin*s.@00A @Inderscorin* suppliedA

he situations $b' and $e' in the fore*oin* enumeration obtain in this

case.

he challen*ed decision of the H=IR& is patently ille*al ha3in* been

rendered in excess of urisdiction, if not "ith *ra3e abuse of discretion

amountin* to lac or excess of urisdiction. %lso, the issue on urisdiction is

purely le*al "hich "ill ha3e to be decided ultimately by a re*ular court of

la". %s the Court "rote in 4iilar v. A5uino:@0A

8t does not invo"ve n e7mintion of the probtive v"ueof the eviden!e presented by the prties. 9here is -uestion of "w when the doubt or differen!e rises s to wht the "w ison !ertin stte of f!ts, nd not s to the truth or thef"sehood of ""eged f!ts. id -uestion t best !ou"d bereso"ved on"y tentatively by the dministrtive uthorities. 9hefin" de!ision on the mtter rests not with them but with the!ourts of justi!e. E7hustion of dministrtive remedies doesnot pp"y, be!use nothing of n dministrtive nture is to beor !n be done. 9he issue does not re-uire te!hni!"Cnow"edge nd e7perien!e but one tht wou"d invo"ve theinterprettion nd pp"i!tion of "w.

Finally, petitioners faulted the C% in not *i3in* respect and e3en finality

to the findin*s of fact of the H=IR&. heir reliance on the case of Danan v.

!#C, [46] reiteratin* the "ell;settled principles in3ol3in* decisions of

administrati3e a*encies, deser3es scant consideration as the decision of the

H=IR& in this case is manifestly not supported by la" and urisprudence.



25/34

etitioners, therefore, cannot 3alidly in3oe 55C4s failure to fulfill its

obli*ation on the basis of a plain draft leaflet "hich petitioners "ere able to

obtain, specifically acifico =im, ha3in* been a president of 55C4. o

accord petitioners the ri*ht to demand compliance "ith the commitment under

the said brochure is to allo" them to profit by their o"n act. his, the Court

cannot tolerate.

4n sum, inasmuch as the H=IR& has no urisdiction o3er petitioners

complaint, the Court sustains the subect decision of the C% that the H=IR&

decision is null and 3oid ab initio. his disposition, ho"e3er, is "ithout

preudice to any action that the parties may ri*htfully file in the proper forum.

%H$R$FOR$, the petition is D$NI$D.

THIRD DIVISION


26/34

$NAIDA ACOSTA, $D&ARDO

ACOSTA, ARNOLD ACOSTA, D$LIA

ACOSTA, SPS. T$OD&LO !ACHADO

AND A&RORA OR$NA,

SPS. ROLDAN PALARCA AND PACITAPANGILINAN, SPS. FRO!$NCIO

1ONATAS AND L&C$NA !. !ARIANO,

SPS. !ARCIAL IGL$SIA AND

VIRGINIA LAP&RGA, ATT3.7IN7FACT

F$LINO !ACARA$G, SPS. !AN&$L

!ANGRO0ANG AND VAL$RIANA

SOTIO, SPS. VIRGINIA

D$LA ROSA AND RO!$O D$LA

ROSA, SPS. PACIFICO SOTIO ANDLOLITA SORIANO, 1&AN DALINOC

D$C$AS$D/, R$PR$S$NT$D 03

DA&GHT$R CONS&$LO DALINOC,

SPS. !ARIANO TORIO AND !A6I!A

!ACARA$G, R$PR$S$NT$D 03

L$GAL H$IRS TORI0IA TORIO AND

!A3&!I !ACARA$G, T$OFILO

!OLINA AND AV$LINO DION,

etitioners,

; 3ersus ;

TRINIDAD SALAAR AND ANIC$TA

SALAAR,

Respondents.

G.R. No. ''*4)

resent:

M9%RE!;!%94%6O, J.,

Chairperson,

CH4CO;9%>%R4O,


27/34

NACH&RA, J .-

his is a petition for re3ie" on certiorari assailin* the 7uly ), )--B

5ecision@1A of the Court of %ppeals $C%' as "ell as its 9o3ember ), )--BResolution@)A in C%;6.R. C< 9o. -1/1, "hich re3ersed and set aside the

5ecember )-, )--- 5ecision@BA of the Re*ional rial Court $RC', &ranch /0,

arlac City in Ci3il Case 9o. )/. !aid RC decision dismissed the complaint

for 2uietin* of title filed by herein respondents rinidad !alaGar and %niceta

!alaGar a*ainst petitioners.

&elo" are the facts.

On 9o3ember 18, 18J, respondents rinidad and %niceta !alaGar

$hereinafter, !alaGars', filed a petition for the cancellation of the entries

annotated at the bac of Ori*inal Certificate of itle $OC' 9o. 0-)J

re*istered in the names of spouses 7uan !oriano and


28/34

On October )-, 18J, the !alaGars filed a ne" motion prayin* that the

R5 of arlac be ordered to comply "ith the courts order issued on 9o3ember

, 18J/. he R5, ho"e3er, explained that to comply "ith the said court order

"ould remo3e the basis for the issuance of C 9o. 8)8 "hich title had, in

turn, been cancelled by many other transfer certificates of title and "ould

indubitably result in the depri3ation of the ri*ht to due process of the re*istered

o"ners thereof.@8A On this basis, the RC denied the motion and ad3ised the

!alaGars to ele3ate the matter en consulta to the =and Re*istration Commission

$no" =and Re*istration %uthority or =R%'. %fter the !alaGars mo3ed for

reconsideration, the RC directed the R5 of arlac to comply "ith the October

)1, 18J/ and 9o3ember , 18J/ orders. hreatened "ith contempt, the R5

ele3ated the matter en consulta to the 9ational =and itles and 5eeds

Re*istration %dministration, "hich, in turn, issued a resolution directin* the

R5 to comply "ith the RCs orders. @1-A On +arch , 18J8, OC 9o. 0-)J

"as reconstituted and C 9o. )181)1 "as issued in the names of the

!alaGars, sansEntry 9os. 18/ and )-1-).

4t "as at this sta*e of the proceedin*s that herein petitioners to*ether

"ith other subse2uent purchasers for 3alue of the disputed property N t"enty;

se3en $)' titleholders in all@11A N filed their formal "ritten comment dated %pril

1, 18J8.@1)A 4n their comment, the oppositors contended, amon* others, thatthey had ac2uired their titles in *ood faith and for 3alue, and that the lo"er

court, actin* as a land re*istration court, had no urisdiction o3er issues of

o"nership.@1BA

On !eptember 10, 18J8, the said court, apparently realiGin* its mistae,

issued an Order, statin* thus:

Ipon motion of %tty. %lcantara and "ithout obection on the part of %tty. +olina and %tty. =amorena, all the incidents in this case

are hereby "ithdra"n "ithout preudice to the filin* of an

appropriate action in a proper forum.

!O OR5ERE5.@10A

his prompted the !alaGars to file a complaint for 2uietin* of title

impleadin* herein petitioners as "ell as other indi3iduals "ho claim to ha3e

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purchased the said property from the heirs of 7uan !oriano. he case "as

doceted as Ci3il Case 9o. )/ before &ranch /0 of the RC of arlac.@1A he

complaint alle*ed that C 9o. )181)1 "as issued in the names of the

!alaGars "ithout Entry 9os. 18/ and )-1-) at the bac of said title, but the

pre3ious Cs issued by the R5 of arlac as "ell as the tax declarations

existin* in the %ssessors Office ha3e not been cancelled and re3oed by the

said *o3ernment a*encies to the detriment and preudice of the complainants

$herein respondents'. hey also alle*ed that cs;B8, from "hich =ot 9os.

-);% to -);< "ere taen, is non;existent and, thus, the court should cause

the cancellation and re3ocation of spurious and null and 3oid titles and tax

declarations.@1/A

5efendants filed three separate ans"ers. 5efendants Raymundo

+acarae*, +artha Estacio $both deceased', %delaida +acarae*, =ucio

+acarae*, represented by Eufracia +acarae* &aluyot as attorney;in;fact,

6re*orio &aluyut and Eli*ia Obcena $hereinafter, +acarae*s' maintained that

the 9o3ember , 18J/ order of the RC is null and 3oid because the court did

not ac2uire urisdiction o3er the case. hey also ar*ued that C 9o. )181)1

issued in the name of the !alaGars is 3oid and that the case for 2uietin* of title

is not a direct, but a collateral, attac a*ainst a property co3ered by

a orrens certificate.@1A

5efendants, no" herein petitioners, for their part, maintained that the

lan of Consolidation !ubdi3ision !ur3ey cs;B8/ had been an existin*

consolidation;subdi3ision sur3ey plan annotated on OC 9o. 0-)J under

Entry 9o. )-1-) dated February 1, 18- from "hich C 9o. 8)8 "as

issued co3erin* =ot 9os. -);% to -);


30/34

to enforce such action had already prescribed by laches or had been barred by

prescription since more than forty $0-' years had lapsed since the heirs of 7uan

!oriano had re*istered the lots in 2uestion under C 9o. 8)8 on February

1, 18-( and $0' that petitioners andor their predecessors;in;interest ac2uired

the lots in 2uestion in *ood faith and for 3alue from the re*istered o"ners

thereof.@18A

5efendant spouses Francisco 7onatas and =ucena +. +ariano and

spouses +anuel +an*roban* and


31/34

action in rem. his bein* so, personal notice to the o"ners or claimants of the

land sou*ht to be re*istered is not necessary in order to 3est the court "ith

urisdiction o3er the res and o3er the parties.@)A

% motion for reconsideration@)JA "as filed, but the same "as denied.@)8A Hence, this petition.

i3otal to the resolution of this case is the determination of the 3alidity

of the action taen by the !alaGars in &ranch /B of the RC of arlac.

We rule for petitioners.

4t is true that the re*istration of land under the orrens system is a

proceedin* in rem and not in personam. !uch a proceedin* in rem, dealin* "ith

a tan*ibleres, may be instituted and carried to ud*ment "ithout personal

ser3ice upon the claimants "ithin the state or notice by mail to those outside of

it. 7urisdiction is ac2uired by 3irtue of the po"er of the court o3er the res. !uch

a proceedin* "ould be impossible "ere this not so, for it "ould hardly do to

mae a distinction bet"een constitutional ri*hts of claimants "ho "ere no"n

and those "ho "ere not no"n to the plaintiff, "hen the proceedin* is to bar

all.@B-A

4nterestin*ly, ho"e3er, the proceedin*s instituted by the !alaGars N both

in &ranch /B of the RC of arlac for the cancellation of entries in OC 9o.

0-)J and later in &ranch /0 of the RC of arlac for 2uietin* of title N can

hardly be classified as actions in rem. he petition for cancellation of entries

annotated at the bac of OC 9o. 0-)J ou*ht to ha3e been directed a*ainst

specific persons: namely, the heirs of 7uan !oriano as appearin* in Entry 9o.

)-1-) and, indubitably, a*ainst their successors;in;interest "ho ha3e ac2uireddifferent portions of the property o3er the years because it is in the nature of an

action 5uasi in rem. %ccordin*ly, the !alaGars should ha3e impleaded as party

defendants the heirs of 7uan !oriano andor


32/34

bound by the dispositions of the said court.@B)A Conse2uently, the ud*ment or

order of the said court ne3er e3en ac2uired finality.

%pparently realiGin* their mistae, the !alaGars later on filed an action

for 2uietin* of title, also an action 5uasi in rem, albeit this time before &ranch

/0 of the RC of arlac. &ecause the !alaGars miserably failed to pro3e the

basis for their claim, the RC dismissed the complaint.@BBA 4n fact, the RC "as

bold enou*h to ha3e pronounced thus:

Who are the heirs of 7uan !oriano "ho caused the

consolidation and in "hose fa3or C 9o. 8)8 "as issued

Certainly, they are not the plaintiffs. 4f the plaintiffs claim that they

are the only heirs, they should file a case a*ainst those "ho executedthe consolidation in "hose fa3or @EAntry @9Ao. )-1-) "as made.

x x x 4n its order dated February )0, )---, this Court ruled

that it is necessary that plaintiffs should pro3e that they are the heirs

of 7uan !oriano, the re*istered o"ners as indicated in OC 9o.

0-)J of $sic'


33/34

by any tribunal in "hich effect is sou*ht to be *i3en to it. 4t has no le*al or

bindin* effect or efficacy for any purpose or at any place and thus

cannot affect, impair or create ri*hts. 4t is not entitled to enforcement and is,

ordinarily, no protection to those "ho see to enforce the same. %ccordin*ly,

all proceedin*s founded on the 3oid court order are themsel3es re*arded as

in3alid, and the situation is the same as it "ould be if there "as no order issued

by the court. 4t lea3es the party liti*ants in the same position they "ere in

before the trial.@0-A % 3oid order, lie any 3oid ud*ment, may be said to be a

la"less thin* "hich can be treated as an outla" and slain at si*ht.@01A

+ore crucial is the fact that both parties in this case are dealin* "ith

property re*istered under the orrens system. o allo" any indi3idual, such as

the !alaGars in this case, to impu*n the 3alidity of a orrens certificate of title

by the simple expediency of filin* an e7 parte petition for cancellation of

entries "ould ine3itably erode the 3ery reason "hy the orrens system "as

adopted in this country, "hich is to 2uiet title to land and to put a stop fore3er

to any 2uestion on the le*ality of the title, except claims that "ere noted, at the

time of re*istration, in the certificate, or "hich may arise subse2uent thereto.@0)A Once a title is re*istered under the orrenssystem, the o"ner may rest

secure, "ithout the necessity of "aitin* in the portals of the courts or sittin* in

the 8mirador su casa9 to a3oid the possibility of losin* his land.@0BA Rarely "illthe court allo" another person to attac the 3alidity and indefeasibility of

a orrens certificate, unless there is compellin* reason to do so and only upon a

direct action filed in court proceeded in accordance "ith la".@00A

Finally, this Court also taes note of the fact that for more than B- years

N from the time Entry 9o. )-1-) "as annotated at the bac of OC 9o. 0-)J

on February 1, 18- until the time of the filin* of the e7 parte petition for

cancellation of entries on the said certificate of title on 9o3ember 18, 18J N the !alaGars remained deafenin*ly 2uiet and ne3er made any mo3e to 2uestion

the issue of o"nership o3er the said land before the proper forum. hey also

failed to 3entilate their claim durin* the intestate proceedin* filed by the heirs

of 7uan !oriano sometime in 18B8. =ie"ise, they miserably failed to stop the

transfer of portions of the property to petitioners "ho, for themsel3es, "ere

able to secure Cs in their o"n names. %ll of these "ould lead to the

ine3itable conclusion that if there is any 3alidity to the claim of the !alaGars

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o3er the said property N althou*h such issue is not the subect of the present

case N the same had already prescribed@0A or, at the 3ery least, had become stale

due to laches.

%H$R$FOR$, the petition is GRANT$D. he assailed 7uly ), )--B

5ecision of the Court of %ppeals includin* its 9o3ember ), )--B Resolution

are hereby S$T ASID$. %ccordin*ly, the 5ecember )-, )--- 5ecision

rendered by &ranch /0 of the Re*ional rial Court of arlac City, arlac

is R$INSTAT$D. Costs a*ainst respondents.

SO ORD$R$D.

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