Ligon vs. Court of Appeals

A motion to compel the surrender of owner's duplicate certificates of title for the registration of a voluntary instrument may be filed as an incident in a pending principal action where the certificates are intimately connected with the subject matter, and the trial court has jurisdiction to resolve it under its general jurisdiction, pursuant to the policy against multiplicity of suits and the expanded jurisdiction granted by P.D. No. 1529.

Iglesia ni Kristo (INK) filed a complaint for specific performance with damages against the Islamic Directorate of the Philippines (IDP) to compel the latter to fulfill its obligation under an Absolute Deed of Sale to evict squatters from two parcels of land IDP had sold to INK. IDP counterclaimed for rescission. The trial court rendered a partial summary judgment in favor of INK, ordering IDP to comply with its contractual obligations. To register the deed of sale, INK needed the owner's duplicate certificates of title, which were in the possession of petitioner Leticia Ligon as IDP's mortgagee. INK thus filed a motion in the same case praying that Ligon be ordered to surrender the titles.

• Nature of the Action: INK filed a complaint for specific performance with damages against IDP to enforce an Absolute Deed of Sale for two parcels of land. The deed required IDP to evict all squatters within 45 days.
• IDP's Defense and Counterclaim: IDP alleged INK delayed payment and prayed for rescission of the contract.
• Partial Summary Judgment: The RTC rendered a partial summary judgment in favor of INK, ordering IDP to comply with its obligation to clear the properties.
• Motion to Surrender Titles: To register the deed, INK filed a motion in the same case seeking an order for petitioner Ligon, the mortgagee in possession of the titles, to surrender them to the Register of Deeds.
• Petitioner's Opposition: Ligon opposed, arguing the motion involved registrability, she was not a party to the main case, and IDP's ownership was still in dispute due to its rescission counterclaim.
• Intervention by IDP's Legitimate Board: After the RTC orders, the legitimate Board of Trustees of IDP intervened, alleging the sale was executed by a fake board and was void. The SEC later declared the sale void.
• RTC and CA Rulings: The RTC granted INK's motion, and the CA affirmed, leading to the present petition.

• Jurisdiction: Petitioner argued the trial court lacked jurisdiction over her person and over the subject matter of the motion, which she contended was a separate action for registrability.
• Splitting a Cause of Action/Forum Shopping: Petitioner maintained that INK's motion constituted an impermissible splitting of a single cause of action and forum-shopping, as the issue of title surrender should be a separate petition.
• Ownership in Dispute: Petitioner contended that INK's ownership was not yet settled because IDP sought rescission, and thus INK was not entitled to registration.
• Superior Right to Possession: Petitioner asserted her right as a mortgagee to retain possession of the certificates.

• Motion as a Necessary Incident: Respondent INK countered that the motion to surrender the titles was a mere incident to the main action for specific performance, which had already been decided in its favor.
• Jurisdiction of RTC: INK argued that the RTC, as a court of general jurisdiction, had the authority to grant the relief under Section 107 of P.D. No. 1529 and its expanded jurisdiction.
• Protection of Mortgage Lien: INK asserted that petitioner's rights as mortgagee would not be prejudiced because the mortgage lien would be annotated on the new titles issued.

• Jurisdiction: Whether the Regional Trial Court had jurisdiction to entertain INK's motion to compel surrender of the owner's duplicate certificates of title and to order petitioner, a non-party, to comply.
• Procedural Propriety: Whether the filing of the motion in the pending specific performance case violated the rules against splitting a cause of action and forum-shopping.
• Right to Possession of Titles: Whether INK, as buyer, had a superior right to have the titles surrendered for registration despite petitioner's claim as mortgagee and IDP's challenge to the sale's validity.

• Jurisdiction: The RTC had jurisdiction. The motion was a necessary incident to the principal action for specific performance, which was within the RTC's general jurisdiction. Under Sec. 2 of P.D. No. 1529, Regional Trial Courts have exclusive and expanded jurisdiction over all petitions filed after original registration, including incidental reliefs, to avoid multiplicity of suits.
• Procedural Propriety: No violation occurred. The relief under Sec. 107 of P.D. No. 1529 can be sought as an incident in a pending case where the certificates are intimately connected with the principal action. This is based on expediency and the policy against multiplicity of suits.
• Right to Possession of Titles: INK's right to register the sale was upheld. The order to surrender the titles to the Register of Deeds did not prejudice petitioner's rights as a mortgagee, as the mortgage lien, being a right in rem, would be carried over to the new certificates of title issued to INK.

• Expanded Jurisdiction of Regional Trial Courts under P.D. No. 1529 — Section 2 of the Property Registration Decree eliminated the distinction between the general jurisdiction of the RTC and its limited jurisdiction as a cadastral court. It grants RTCs exclusive jurisdiction over all applications for original registration and all petitions filed after original registration, with the power to hear and determine all questions arising therefrom. This aims to simplify proceedings and avoid multiplicity of suits.
• Incidental Relief in Pending Actions — A petition to compel surrender of a duplicate certificate of title under Sec. 107 of P.D. No. 1529 need not be filed as a separate action if the subject certificates are intimately connected with the subject matter of a pending principal action. The court may resolve it as an incident thereto.
• Mortgage Lien as a Real Right — A registered mortgage is a right in rem that attaches to the property, not the person of the owner. It subsists notwithstanding a change in ownership and must be carried over to and annotated on any new certificate of title issued. Subsequent purchasers take the property subject to the mortgage.

• "Courts should not be so strict about procedural lapses that do not really impair the proper administration of justice. The rules are intended to insure the orderly conduct of litigations because of the higher objective they seek, which is, to protect the parties' substantive rights." — This passage underscores the Court's preference for substantial justice over technicalities when no prejudice is shown.
• "Since Regional Trial Courts are courts of general jurisdiction, they may therefore take cognizance of this case pursuant to such jurisdiction." — This affirms the RTC's authority to grant the incidental relief under its general jurisdiction, as expanded by P.D. No. 1529.

• Fojas v. de Grey, No. L-29613, 18 December 1984, 132 SCRA 76 — Cited for the principle that summary reliefs in land registration could be granted by the RTC sitting as a land registration court only if there was unanimity among parties; otherwise, the matter should be threshed out in an ordinary action. The Court distinguished this precedent by noting that under P.D. No. 1529, the RTC's jurisdiction has been expanded.
• Averia v. Caguioa, No. 65129, 29 December 1986, 146 SCRA 459; PNB v. ICB, No. 86679, 23 July 1991, 199 SCRA 508 — Cited to support the interpretation of Sec. 2 of P.D. No. 1529 as conferring upon RTCs broad jurisdiction over post-registration petitions to avoid multiplicity of suits.
• Tiongco v. Phil. Veterans Bank, G.R. No. 82782, 5 August 1992 — Cited for the doctrine that a real estate mortgage is a right in rem that follows the property regardless of ownership changes.

• Section 107, P.D. No. 1529 (Property Registration Decree) — Provides the remedy for compelling the surrender of a withheld duplicate certificate of title to the Register of Deeds for the registration of a voluntary instrument. The Court applied this provision to authorize the trial court's order.
• Section 2, P.D. No. 1529 — Grants Regional Trial Courts exclusive jurisdiction over all petitions filed after original registration of title. The Court relied on this to affirm the RTC's authority to resolve the motion as an incident to the main case.
• Article 2126, Civil Code of the Philippines — States that a mortgage directly and immediately subjects the property to the obligation it secures, whoever the possessor may be. The Court used this to explain that petitioner's mortgage lien would persist and be annotated on the new titles.

• Justice Teodoro R. Padilla
• Justice Hilario G. Davide, Jr.
• Justice Santiago M. Kapunan