Borbajo vs. Hidden View Homeowners, Inc.

An injunction issued to protect the attributes of registered ownership becomes functus officio once the titles on which it rests are nullified by final, executory and executed judgment in a direct proceeding. The right to the road lots and the right-of-way by virtue of the titles ceased upon such nullification, leaving no basis in law for continued injunctive relief.

Felicitacion B. Borbajo was the registered owner of three road lots located inside Hidden View Subdivision I, while respondents Hidden View Homeowners, Inc., Spouses Marcelina A. Sarcon and Ely D. Sarcon, Roberto B. Alvarez, Corazon Nombrado and Gilbert Andrales sought to prevent her passage or use thereof in their personal capacities. Presidential Decree No. 957, as amended, governing subdivision road lots, and the Torrens-system rule against collateral attack on title supplied the regulatory and doctrinal backdrop for the dispute over alienability and ownership of the lots.

Felicitacion B. Borbajo claimed ownership of three road lots inside Hidden View Subdivision I by virtue of a deed of sale executed by Jose Bontuyan, covered by Transfer Certificates of Title Nos. 117437, 117563 and 117564 registered in her name. When respondents prevented her from passing through or otherwise making use of those lots, she filed a complaint for injunction against Hidden View Homeowners, Inc., Spouses Marcelina A. Sarcon and Ely D. Sarcon, Roberto B. Alvarez, Corazon Nombrado and Gilbert Andrales in their personal capacities, praying that they be enjoined from interfering with her use. The Regional Trial Court of Cebu City, Branch 58 issued a writ of preliminary injunction in her favor.

Meanwhile, a separate direct action for annulment of the titles over the same three road lots, Civil Case No. 21239, was pending before the Regional Trial Court of Cebu City, Branch 9. On 22 April 2003, that court rendered judgment in favor of the plaintiff and against spouses Danilo S. Borbajo and Felicitacion B. Borbajo, declaring null and void the deed of sale executed by Jose Bontuyan particularly as to the three road lots and declaring TCT Nos. 117437, 117563 and 117564 null and void, with direction to the Register of Deeds of Cebu City to cancel said certificates and reinstate the certificates previously cancelled. An Entry of Judgment dated 26 June 2003 recorded the decision as final and executory, and three new Transfer Certificates of Title each dated 24 June 2003 covering the lots were issued in the name of Hidden View Subdivision Homeowners Association, Inc., noting cancellation of petitioner's previous titles.

Petitioner died on 20 December 2002, a fact made known only during deliberation on the motion for reconsideration, with counsel manifesting that her six children as surviving legal heirs should be substituted. In the injunction case, the 31 January 2005 Decision had sustained petitioner's entitlement as registered owner at that time, rejecting collateral attack on her Torrens titles and the Court of Appeals view that road lots were unsalable, while expressly qualifying permanence of the writ as subject to the final outcome of Civil Case No. 21239.

• Finality of Annulment Judgment: Petitioner did not dispute issuance of the RTC, Branch 9 decision against her in Civil Case No. 21239, but maintained that the decision did not attain finality because the intervenors therein were not furnished a copy of the decision.
• Respect for Torrens Title: Petitioner conceded in the petition that until and unless the certificates of title covering the three road lots shall have been decreed null and void in a direct proceeding instituted for that purpose, the same shall be respected and the registered owner entitled to protection of law in case of violation of use and enjoyment.

• Supervening Annulment and Finality: Respondents argued that Civil Case No. 21239 had since been resolved against petitioner through the Decision dated 22 April 2003, which was final and executory as evidenced by the Entry of Judgment dated 26 June 2003.
• Fraud and Cancellation of Titles: Respondents maintained that the RTC, Branch 9 concluded petitioner had fraudulently obtained the titles over the three road lots, declared null and void the deed of sale and TCT Nos. 117437, 117563 and 117564, and that execution followed through issuance on 24 June 2003 of new titles in the name of Hidden View Subdivision Homeowners Association, Inc. canceling petitioner's titles.

• Effect of Annulment on Permanent Injunction: Whether the writ of preliminary injunction made permanent subject to the outcome of Civil Case No. 21239 became functus officio after final nullification of petitioner's titles over the road lots.
• Finality Despite Alleged Non-Service on Intervenors: Whether the RTC, Branch 9 Decision attained finality notwithstanding petitioner's claim that intervenors were not furnished a copy thereof.

• Effect of Annulment on Permanent Injunction: Yes. The writ was declared functus officio, its legal basis having expired upon final nullification and cancellation of the titles that supported the right to the lots and right-of-way by virtue thereof.
• Finality Despite Alleged Non-Service on Intervenors: Yes. Finality was established by the Entry of Judgment dated 26 June 2003, petitioner's bare claim of non-service on intervenors being insufficient absent any legal remedy availed of by them and being unavailing to petitioner.

• Effect of Annulment on Permanent Injunction: Entitlement to the injunction had rested solely on registered ownership and the attributes of ownership under the Civil Code, with permanence expressly qualified as subject to the final outcome of Civil Case No. 21239 and with the reservation that a finding of fraudulent acquisition would extinguish the right to the lots and the right-of-way by virtue of the titles. Upon rendition of the final, executory and executed RTC Branch 9 judgment voiding the deed of sale and TCT Nos. 117437, 117563 and 117564 and issuing replacement titles to the homeowners association, that basis ceased. Although error was still attributed to the Court of Appeals for failing to recognize ownership rights extant at the time of its decision, no basis in law remained to sustain injunctive relief thereafter.
• Finality Despite Alleged Non-Service on Intervenors: The claim of non-finality could not be accepted at face value in light of the Entry of Judgment recording the 22 April 2003 Decision as final and executory. No allegation was made that the allegedly unserved intervenors had availed of any legal remedies as a result, and such failure could not be invoked by petitioner to escape liability arising from the judgment. Execution was likewise shown by the certified true copies of the three new titles registering the lots in the association's name and canceling petitioner's titles.

• Non-collateral attack on Torrens title — A Torrens certificate of title cannot be collaterally attacked; its validity may be assailed only in a direct proceeding instituted for nullification, and until so decreed void it must be respected with the registered owner entitled to legal protection of use and enjoyment. Applied to sustain the injunction while petitioner's titles stood, while deferring to the separate annulment case as the proper forum for legality of the titles.
• Functus officio of injunctive relief upon extinction of supporting right — Where a permanent injunction is expressly conditioned on the outcome of a pending annulment suit, nullification of the underlying titles by final, executory and executed judgment extinguishes the protected right and renders the writ functus officio. Applied to terminate the writ after cancellation of TCT Nos. 117437, 117563 and 117564 and issuance of replacement titles.
• Finality evidenced by entry of judgment — An entry of judgment recording a decision as final and executory establishes finality against a bare, uncorroborated claim of non-service on other participants, especially where no remedy was pursued therefrom and the claimant is not the party allegedly unserved. Applied to reject petitioner's opposition to the supervening annulment judgment.

• "subject to the final outcome of Civil Case No. 21239 pending before the Regional Trial Court of Cebu City, Branch 9." — Qualifies the permanence of the injunction, making its continued efficacy dependent on the annulment case and thus the doctrinal anchor for declaring it functus officio.
• "WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendants spouses Danilo S. Borbajo and Felicitation B. Borbajo declaring null and void the deed of sale executed by Jose Bontuyan (particularly the three road lots) in favor of defendants. Consequently, TCT No. 117437, 117563 and 117564 are declared null and void." — States the supervening RTC judgment that extinguished petitioner's ownership basis for injunctive relief.
• "until and unless the certificate of title covering these three road lots shall have been decreed to be null and void in a direct proceedings instituted for that purpose, the same shall be respected and in case of violation of its use and enjoyment, the registered owner thereof, is entitled to the protection of law." — Records petitioner's own concession embodying the rule against collateral attack, later invoked to justify termination of protection after direct nullification.

• Presidential Decree No. 957, as amended — Cited for the Court of Appeals view that road lots cannot be sold to any person; that view was set aside in favor of the rule that a Torrens title cannot be collaterally attacked, with legality of the titles left to the direct annulment action.
• Civil Code provisions on attributes of ownership — Relied upon to recognize petitioner's right, while still titled owner, to avail of all attributes of ownership including use and right-of-way over the road lots, warranting injunctive protection until the titles were voided.

Puno, J., Chairperson, Austria-Martinez, J., Callejo, Sr., J., Chico-Nazario, J.