VSD REALTY & DEVELOPMENT CORPORATION v UNIWIDE SALES, INC.

and DOLORES BAELLO

Peralta, J.
G.R. No. 170677. – October 24, 2012
FACTS:
 June 8, 1995: VSD filed a complaint for annulment of title and recovery of possession of property against Uniwide
with RTC Caloocan
 VSD sought the following:
 The nullification of TCT No. 12754 in the name of Dolores Baello
 The recovery of the property occupied by Uniwide by virtue of a Contract of Lease with Baello
 VSD alleged the following:
 It is the registered owner of a parcel of land in Caloocan covered by TCT No. 285312 of the Registry of
Deeds of Caloocan
 It was purchased from Felisa Bonifacio whose title was registration by an Order authorizing the
segregation of the property in the Land Registration Comisssion Case No. C-3288
 Baello is the holder and registered owner of a parcel of land covered by TCT No. 12754 of the Registry of
Deeds of Rizal
 By virtue of this title, she claims to be the owner, and is in possession of the property covered by
VSD’s TCT
 Its own title, TCT No. 285312 is the correct and valid document that covers the subject property being
leased by Baello to Uniwide
 In contrast, Baello’s title is spurious, as it can only be the result of falsification
 Technical description of title is so general, making it impossible to determine the exact location of
the covered property
 Technical description has no legal basis as per the records of the Lands Management Bureau
 Described the property to be Lot 3-A of subdivision plan Psd 706, but there is no Lot 3-A in aforesaid
plan
 VSD concluded that for the foregoing reasons, Baello has no legal basis to claim the subject property, thus her
title should be annulled
 Uniwide’s Answer
 It entered into a Contract of Lease with Baello over the land covered by TCT No. (35788) 12754
 It constructed a building worth Php 200M on said property as a consequence of said lease
 Complainant has no cause of action against Uniwide
 Contract of Lease is valid and enforceable
 Dec. 5, 1995: RTC denied Baello’s Motion to Dismiss, where she argued that:
 The complaint stated no cause of action
 The demand for annulment of title has prescribed
 Whether grounded on fraud or upon constructive trust
 Baello’s Answer
 She alleged the ff:
 Subject property was bequeathed to her through a will by her adoptive mother, Jacoba Galauran
 During Galauran’s lifetime, the subject property was surveyed on Jan. 24-26, 1923, and again on Dec. 29,
1924
 After Galauran died, Baello registered the property in her name
 Sept. 6, 1954: TCT No. 12754 was issued in her favor
 1959: She had the property surveyed
 She entered into a Contract of Lease with Uniwide in 1988
 She had been religiously paying realty taxes for the subject property
 She emphasized that during her open and public possession of subject property for 40 years, nobody came
forward to contest her title thereto
 It was only in Sept. 1994, while she was abroad that VSD demanded rentals from Uniwide, asserting
ownership over her land

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  She argued that since her title predates the registration of VSD’s title by at least, 40 years, then she has a
better right of possession over the subject property
PROCEDURAL HISTORY:
 Oct. 2, 2000: RTC ruled in favor of VSD
 Evidence showed that VSD was the rightful owner of the subject property
 There is no reason to depart from the ruling in LRC Case No. C-3288
 The same was rendered after receiving all evidence including the testimony of Engineer de Lara
 Engr. De Lara testified that his office, the Technical Services of DENR:
 Had not previously issued the technical description appearing on Felisa Bonifacio’s TCT
 Had certified the records of the technical description of Lot 23-A- 4-B-2-3-A of subdivision plan Psd
706 = refers to the same technical description appearing in Felisa’s TCT
 RTC cannot question the Order of the LRC, a co-equal court
 Its authority is limited to act on applications for original registration of title
 With the power to hear and determine all questions arising from such applications
 Aside from the complete records of the LRC proceedings, VSD also presented witnesses to support its action
 RTC concluded that VSD is the registered owner of the land referred to in TCT No. 285312
 Baello is the holder of a title over a lot entirely different and independent of VSD’s title and technical
description
 May 30, 2005: CA reversed the RTC decision, ruled in favor of Uniwide
 Identified the main issue as: W/N there is a valid ground to annul Baello’s TCT to warrant reconveyance of
subject property to VSD
 The Court held that there is no reason to annul Baello’s TCT
 A Torrens title is generally conclusive evidence of ownership of the land referred therein
 There is a presumption that the title is regularly issued
 Thus, Baello’s TCT enjoys presumption of validity
 A TCT may be annulled on the ff. grounds
(1) It is procured through fraud
(2) It is replaced by one issued under a cadastral proceeding
(3) When the condition for its issuance has been violated by the registered owner
 VSD failed to prove that Baello’s TCT was spurious
 VSD filed a petition for review on certiorari of the CA Decision
ISSUE/HELD/RATIO:
1. W/N VSD is entitled to recovery of possession of the subject property – YES
 To successfully maintain an action to recover ownership of a real property, the person who claims a better right
must prove two things (Art. 434, NCC)
1) The identity of the land claimed
2) His title to the land claimed
 In the case at bar, VSD proved the identity of the land it is claiming through:
 Technical description contained in its title, and included in the official records in the Registry of Deeds of
Caloocan
 Derivative title of Felisa Bonifacio
 Verification survey by geodetic Engr. Calzo of DENR
 Conclusion reached by the trial court
 Similarly, VSD proved its title over the property
 Established through documentary and testimonial evidence the technical description of its Torrens title,
as covering the property that is being occupied by Uniwide
(1) Comparison of the technical description of the land covered in VSD’s title with that of Baello’s
title shows that they are NOT the same
o VSD’s title covers Lot 23­A­ 4­B­2­3-A of subdivision plan Psd 706
o Baello’s lot covers Lot No. 3-A of subdivision plan Psd 706
(2) Verification survey of Lot 23-A- 4-B-2-3-A shows that, based on its technical description, it is
indeed the lot being occupied by Uniwide
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 (3) Baello’s lot covers a different property
o She cannot claim a superior right over the subject property on the ground that she
registered it ahead of VSD
 Presented in evidence its title over the subject property
o Describes the metes and bounds of the subject lot
 Looked into the background of ownership of Felisa Bonifacio
o Provided records of the LRC case, where LRC ordered that Eleuteria Bonifacio be the registered
owner of 1/6 of 1-189/1000% of the entire Maysilo Estate
o Eleuteria executed a Deed of Assignment in favor of Felisa
o A new TCT was issued by the Registry of Deeds of Caloocan in the name of Felisa
 CONCLUSION: Having proved its title over the subject property, as well as the identity of said property, VSD is
entitled to recover the possession of the property from respondents
 However, Uniwide is not entitled to recover the cost of its improvement of the land as a builder in good
faith, contemplated in Art. 448
o Lessees cannot be builders in good faith

2. W/N Baello’s title can be declared null and void – NO

 VSD failed to prove that the title was issued through fraud
3. W/N the trail court’s order regarding the joint and solidary liability of Baello and Uniwide should be reinstated –
NO, it must be modified
 Lower court did not provided basis for determining the amount of Php 1.2M as monthly compensation for
occupation and use of VSD’s property
 To be paid from the time VSD acquired ownership thereof from 1994 until the respondents vacate the
premises
 The Court adopts the monthly rental of Php 58K stated in the lease contract as reasonable compensation to be
paid jointly and severally by Uniwide and Baello
 However, Uniwide should not be made to pay solidarily for the months it already paid rent to Baello

DISPOSITIVE PORTION:
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated May 30, 2005 and its Resolution
dated December 6, 2005, in CA-G.R. CV No. 69824, are REVERSED and SET ASIDE. The Decision of the Regional Trial
Court of Caloocan City, Branch 126, in Civil Case No. C-16933 is REINSTATED with MODIFICATION as follows:
(1) Paragraph 1 of the dispositive portion of the Decision dated October 2, 2000 of the Regional Trial Court of Caloocan
City, Branch 126, in Civil Case No. C-16933, is deleted;
(2) Respondent Dolores Baello and all persons/entities claiming title under her, including respondent Uniwide Sales, Inc.,
are ordered to convey and to return the property or the lot covered by TCT No. T-285312 to petitioner VSD Realty and
Development Corporation upon finality of this Decision;
(3) Respondent Dolores Baello is ordered to pay just and reasonable compensation for the occupancy and use of the
land of petitioner VSD Realty and Development Corporation in the amount of P58,333.30 per month from September
12, 1994 until the Decision is final and executory, with legal interest of six percent (6%) per annum reckoned from the
filing of the Complaint on June 8, 1995 until the finality of this Decision. Thereafter, respondent Uniwide Sales, Inc. is
jointly and severally liable with Dolores Baello for the payment to petitioner VSD Realty and Development Corporation
of monthly rental in the amount of P58,333.30 from the finality of this Decision until the land is actually vacated, with
twelve percent (12%) interest per annum.
(4) The award of attorney's fees is deleted.