MANOTOK REALTY INC vs.

CLT Realty

(pakwento ung format lol)

In Manotok Realty, Inc v. CLT Realty Development Corporation; GR No. 134385, Araneta Institute of
Agriculture, Inc. v. Heirs of Jose B. Dimso, GR No. 123346, December 14, 2007, the Supreme Court opined that
the stability of the country’s Torrens system is menaced by the infestation of fake land titles and deeds and
that it is loyal towards purging the system of illicit titles, concomitant to its task as the ultimate citadel of
justice and legitimacy.

These two petitions involve properties covered by Original Certificate of Title (OCT) No. 994 which in
turn encompasses 1,342 hectares of the Maysilo Estate. The vast tract of land stretches over three (3) cities,
comprising an area larger than the sovereign states of Monaco and the Vatican. Despite their prime location
within Metropolitan Manila, the properties included in OCT No. 994 have been beset by controversy and
sullied by apparent fraud, cloudy titles and shady transfers.

The petition involved “the method of giving a paper title” as spelled out in detail in Sections 41 and
42 of Act No. 496, otherwise known as the Land Registration Act:

SEC. 41. Immediately upon the entry of the decree of registration the clerk shall send a certified copy
thereof, under the seal of the court, to the register of deeds for the province, or provinces, or city in which the
land lies, and the register of deeds shall transcribe the decree in a book to be- called the 'registration book,' in
which a leaf, or leaves, in consecutive order, shall be devoted exclusively to each title. The entry made by the
register of deeds in this book in each case shall be the original certificate of title, and shall be signed by him
and sealed with the seal of the court. All certificates of title shall be numbered consecutively, beginning with
number one. The register of deeds shall in each case make an exact duplicate of the original certificate,
including the seal, but putting on it the words 'Owner's duplicate certificate,' and deliver the same to the
owner or to his attorney duly authorized. In case of a variance between the owner's duplicate certificate and
the original certificate the original shall prevail. The certified copy of the decree of registration shall be filed
and numbered by the register of deeds with a reference noted on it to the place of record of the original
certificate of title: Provided, however, That when an application includes land lying in more than one
province, or one province and the city of Manila, the court shall cause the part lying in each province or in the
city of Manila to be described separately by metes and bounds in the decree of registration, and the clerk shall
send to the register of deeds for each province, or the city of Manila, as the case may be, a copy of the decree
containing a description of the land within that province or city, and the register of deeds shall register the
same and issue an owner's duplicate therefor, and thereafter for all matters pertaining to registration under
this Act the portion in each province or city shall be treated as a separate parcel of land.

SEC. 42. The certificate first registered in pursuance of the decree of registration in regard to any
parcel of land shall be entitled in the registration book 'Original certificate of title, entered pursuant to decree
of the Court of Land Registration, dated at' (stating time and place of entry of decree and the number of case).
This certificate shall take effect upon the date of the transcription of the decree. Subsequent certificates
relating to the same land shall be in like form, but shall be entitled 'Transfer from number' (the number of the
next previous certificate relating to the same land), and also the words 'Originally registered' (date, volume,
and page of registration.")

With the plain language of the law as mooring, this Court in two vintage and sound rulings made it
plain that the original certificate of title is issued on the date the decree of registration is transcribed. In the
first ruling, it was held that there is a marked distinction between the entry of the decree and the entry of the
certificate of title; the entry of the decree is made by the chief clerk of the land registration and the entry of
the certificate of title is made by the register of deeds. Such difference is highlighted by Sec. 31 of Act No. 496
as it provides that the certificate of title is issued in pursuance of the decree of registration. In the second, it
was stressed that what stands as the certificate of the title is the transcript of the decree of registration made
by the registrar of deeds in the registry.

Under the said provisions, what is actually issued by the register of deeds is the certificate of title
itself, not the decree of registration, as he is precisely the recipient from the land registration office of the
decree for transcription to the certificate as well as the transcriber no less. Since what is now acknowledged
as the authentic OCT No. 994 indicates that it was received for transcription by the Register of Deeds of Rizal
on 3 May 1917, it is that date that is the date of registration since that was when he was able to transcribe the
decree in the registration book, such entry made in the book being the original certificate of title. Moreover, it
is only after the transcription of the decree by the register of deeds that the certificate of title is to take effect.

Immediately upon the issuance and entry of the decree of registration, the Registrar of Land Titles
transcribes the same in the registry book called the “Registration Book” and issues an owner’s duplicate
certificate of title to the applicant upon payment by him of the necessary registration fees. The entry made by
the Registrar of Land Titles in his registry book is actually the original copy of the original certificate of title
and shall be signed by him and sealed with the seal of the Court and of his office. Pursuant to Rep. Act No. 113,
the Registrar of Land Titles may now use only the seal of his office, dispensing with the court seal.

A decree of registration is an order issued under the signature of the Commissioner of Land
Registration (formerly Chief, G.L.R.O.) in the name of the Judge to the fact that the land described therein is
registered in the name of the applicant or oppositor or claimant as the case maybe. When this is transcribed
or spread in toto in the registration book and signed by the register of deeds, the page on which the
transcription is made become the “original certificate of title,” more commonly called the Torrens title.

The land becomes a registered land only upon the transcription of the decree in the original
registration book by the register of deeds, the date and time of such transcription being set forth in the
process and certified to at the foot of each entry or certificate of title.

The issuance of the original and owner’s duplicate certificates are basic for the valid existence of the
title. Issuance of additional copies are permissive and their non-existence does not affect the status of title. A
certificate of title is deemed as regularly issued with the issuance of the original copy and owner’s duplicate.

Immediately upon the issuance and entry of the decree of registration, the Commissioner of Land
Registration sends a certified copy thereof, under seal of the said office, to the Register of Deeds of the
province where the land lies, and the register of Deeds transcribes the decree in a book, called the
Registration Book,” in which a leaf, or leaves, in consecutive order should be devoted exclusively to each title.
The entry made by the Register of Deeds in said book constitutes the original certificate of title and is signed
by him and sealed with the seal of his office.

Thus, Section 42 of Act No. 496 provides that the certificate first registered in pursuance of the
decree of registration in regard to any parcel of land shall be entitled in the registration book “Original
Certificate of Title, entered pursuant to decree of the Court of Land Registration, dated at (stating time and
place of entry of decree and the number of the case). This certificate shall take effect upon the date of the
transcription of the decree. Subsequent certificates relating to the same land shall be in like form, but shall be
entitled. “Transfer from number (the number of the next previous certificate relating to the same land),” and
also the words “Originally registered (date, volume, and page of registration).

The titles of the respondents in these cases were derived from OCT No. 994 of the Registry of Deeds
of Caloocan City registered on April 19, 1917. The validity of such mother title has already been upheld by
this Court in G.R. No. 103558, MWSS v. Court of Appeals, et al. dated November 17, 1992 earlier cited in the
assailed Decisions. Significantly, the ruling in MWSS was reiterated in G.R. No. 96259, Heirs of Luis J. Gonzaga
v. Court of Appeals dated September 3, 1996.
 In this case, the Court held that it could not delve anymore into the correctness of the Decision of this
Court in MWSS. The said Decision, confirming the validity of OCT No. 994 issued on April 19, 1917 from which
the titles of the respondents in the cases at bar were derived, has long become final and executory. It stated:
“Nothing is more settled in law than that once a judgment attains finality it becomes immutable and
unalterable. It may no longer be modified in any respect, even if the modification is meant to correct what is
perceived to be an erroneous conclusion of fact or law, and regardless of whether the modification is
attempted to be made by the court rendering it or by the highest court of the land”.

The determinative test to resolve whether the prior decision of this Court should be affirmed or set
aside is whether or not the titles invoked by the respondents are valid. If these titles are sourced from the so-
called OCT No. 994 dated 17 April 1917, then such titles are void or otherwise should not be recognized by
this Court. Since the true basic factual predicate concerning OCT No. 994 which is that there is only one such
OCT differs from that expressed in the MWSS and Gonzaga decisions, said rulings have become virtually
functus officio except on the basis of the “law of the case” doctrine, and can no longer be relied upon as
precedents.

The conclusion is really simple. On their faces, none of these three titles can be accorded recognition
simply because the original title commonly referred to therein never existed. To conclude otherwise would
constitute deliberate disregard of the truth. These titles could be affirmed only if it can be proven that OCT
No. 994 registered on 19 April 1917 had actually existed. CLT and the Dimsons were given the opportunity to
submit such proof before this Court, but they did not. In fact, CLT has specifically manifested that the OCT No.
994 they concede as true is also the one which the Office of Solicitor General submitted as true, and that is
OCT No. 994 issued on 3 May 1917.

From these premises, the Court made the following binding conclusions.

First, there is only one OCT No. 994. As it appears on the record, that mother title was received for
transcription by the Register of Deeds on 3 May 1917, and that should be the date which should be reckoned
as the date of registration of the title. It may also be acknowledged, as appears on the title, that OCT No. 994
resulted from the issuance of the decree of registration on 17 April 1917, although such date cannot be
considered as the date of the title or the date when the title took effect.

Second. Any title that traces its source to OCT No. 994 dated 17 April 1917 is void, for such mother
title is inexistent. The fact that the Dimson and CLT titles made specific reference to an OCT No. 994 dated 17
April 1917 casts doubt on the validity of such titles since they refer to an inexistent OCT. This error alone is,
in fact, sufficient to invalidate the Dimson and CLT claims over the subject property if singular reliance is
placed by them on the dates appearing on their respective titles.

Third. The decisions of this Court in MWSS v. Court of Appeals and Gonzaga v. Court of Appeals
cannot apply to the cases at bar, especially in regard to their recognition of an OCT No. 994 dated 19 April
1917, a title which we now acknowledge as inexistent. Neither could the conclusions in MWSS or Gonzaga
with respect to an OCT No. 994 dated 19 April 1917 bind any other case operating under the factual setting
the same as or similar to that at bar.

The Court ultimately found refuge under Rule 32 and Rule 46 to dispose of the case.

Under Section 6 of Rule 46, which is applicable to original cases for certiorari, the Court may,
whenever necessary to resolve factual issues, delegate the reception of the evidence on such issues to any of
its members or to an appropriate court, agency or office. The delegate need not be the body that rendered the
assailed decision.

The Court of Appeals generally has the authority to review findings of fact. Its conclusions as to
findings of fact are generally accorded great respect by this Court. It is a body that is fully capacitated and has
a surfeit of experience in appreciating factual matters, including documentary evidence.
 The provisions of Rule 32 should also be considered as governing the grant of authority to the Court
of Appeals to receive evidence in the present case. Under Section 2, Rule 32 of the Rules of Court, a court may,
motu proprio, direct a reference to a commissioner when a question of fact, other than upon the pleadings,
arises upon motion or otherwise, in any stage of a case, or for carrying a judgment or order into effect. The
order of reference can be limited exclusively to receive and report evidence only, and the commissioner may
likewise rule upon the admissibility of evidence. The commissioner is likewise mandated to submit a report
in writing to the court upon the matters submitted to him by the order of reference. In Republic, the
commissioner’s report formed the basis of the final adjudication by the Court on the matter. The same result
can obtain herein.

Thus the Court constituted a Special Division of the Court of Appeals to hear these cases on remand.
The Special Division shall be composed of three Associate Justices of the Court of Appeals, namely; Justice
Josefina Guevara-Salonga as Chairperson; Justice Lucas Bersamin as Senior Member; and Associate Justice
Japar B. Dimaampao as Junior Member.

The Special Division was tasked to hear and receive evidence, conclude the proceedings and submit
to this Court a report on its findings and recommended conclusions within three (3) months from finality of
the Resolution.

In ascertaining which of the conflicting claims of title should prevail, the Special Division was
directed to make the following determinations based on the evidence already on record and such other
evidence as may be presented at the proceedings before it, to wit:

i. Which of the contending parties are able to trace back their claims of title to OCT No. 994 dated 3
May 1917?

ii. Whether the imputed flaws in the titles of the Manotoks and Araneta, as recounted in the 2005
Decision, are borne by the evidence? Assuming they are, are such flaws sufficient to defeat the claims of title
of the Manotoks and Araneta?

iii. Whether the factual and legal bases of 1966 Order of Judge Muñoz-Palma and the 1970 Order of
Judge Sayo are true and valid. Assuming they are, do these orders establish a superior right to the subject
properties in favor of the Dimsons and CLT as opposed to the claims of Araneta and the Manotoks?

iv. Whether any of the subject properties had been the subject of expropriation proceedings at any
point since the issuance of OCT No. 994 on 3 May 1917, and if so what are those proceedings, what are the
titles acquired by the Government and whether any of the parties is able to trace its title to the title acquired
by the Government through expropriation.

v. Such other matters necessary and proper in ascertaining which of the conflicting claims of title
should prevail.