Moldex Realty, Inc. and Diaz vs. Spouses Yu

A party seeking prohibitory injunction over real property must establish a clear and unquestioned right (right in esse) by virtue of the technical descriptions in the Torrens title, and where those descriptions do not cover the disputed area, injunction will not issue; any attempt to modify the title's technical descriptions through an injunction action constitutes a prohibited collateral attack under Section 48 of Presidential Decree No. 1529.

Spouses Ernesto and Elsie Yu are the registered owners of two adjoining parcels of land in Barrio Pala-pala, Dasmarinas, Cavite, covered by TCT Nos. T-280169 and T-280170, while Moldex Realty, Inc. owns an adjacent 201,246-square-meter lot under TCT No. T-317603. Both properties originally formed part of the Imus Friar Estate and had undergone multiple subdivisions and resurveys over the decades, generating discrepancies between the technical descriptions reflected in the respective Torrens titles and the actual ground positions of the lots.

Spouses Ernesto and Elsie Yu are the registered owners of two adjoining parcels of land in Barrio Pala-pala, Dasmarinas, Cavite: Lot No. 3869-N-1-A, comprising 4,061 square meters under TCT No. T-280169, and Lot No. 3869-N-1-B, comprising 4,062 square meters under TCT No. T-280170, collectively referred to as the Yu property. Moldex Realty, Inc. is the registered owner of the adjacent Lot No. 3870, a 201,246-square-meter parcel under TCT No. T-317603, denominated as the Moldex property. Both properties originally formed part of the Imus Friar Estate and had been subjected to multiple subdivisions and resurveys over the decades.

On October 6, 1994, Spouses Yu filed a complaint for prohibitory injunction with temporary restraining order, removal of perimeter fence, and damages against Moldex and its Executive Vice President, Rey Ignacio Diaz. Spouses Yu alleged that Moldex had encroached upon a 3,159-square-meter portion of Lot 3869-N-1-A through the construction of a concrete perimeter fence, and that despite demands to vacate and cease construction, Moldex refused to comply. Moldex denied the encroachment, countering that the fence was constructed entirely within its own landholding and that the boundary conflict arose because the location of the Yu property based on the technical descriptions in its Torrens title differed from its actual position on the ground.

To settle the dispute, the parties filed a Joint Motion on March 21, 1995, requesting the RTC to direct the DENR to conduct a relocation survey of the Yu property and agreeing to accept the survey results as the true and correct location of the property. The RTC granted the motion, and Engr. Danilo A. Arellano of the DENR conducted ocular inspections and relocation surveys in the presence of the parties' representatives and the Branch Clerk of Court. Both parties then moved for summary judgment.

Engr. Arellano's findings revealed a critical discrepancy: the technical descriptions in Spouses Yu's certificates of title placed their property 50 meters away from the Moldex property, whereas on the ground the two properties were adjacent. The error traced back to the 1972 subdivision of Lot 3869-N-1, where the distance of the tie line from Mon. 152 of the Imus Estate was reduced by 400 meters — from 578.32 meters to 178.32 meters — causing the Yu property's described location to shift. The first subdivision of Lot 3869 was done without error, but the second subdivision, covered by survey plan Rs-632-D, was defective, and those defects carried over to the third subdivision that generated the lots now registered in Spouses Yu's names.

The RTC initially dismissed the complaint on December 27, 1999, finding no encroachment based on the technical descriptions of the parties' titles. The CA reversed and remanded on October 15, 2002, directing the trial court to determine the cause of the error and apply correct survey principles. After remand and reception of additional evidence, the RTC again dismissed the complaint on July 26, 2016, reiterating that the perimeter fence was entirely within Moldex's boundaries and that the technical descriptions in the Torrens titles are binding and cannot be altered in a collateral proceeding. The CA reversed once more on November 6, 2018, crediting Engr. Arellano's expert testimony that the 1991 relocation survey of the Moldex property should conform to the 1957 resurvey of the Yu property, and ordered Moldex to remove its constructions and pay damages. Moldex's motion for reconsideration was denied on March 19, 2019, prompting the present petition.

• Public Policy Exception: Moldex argued that the issues present a matter of public policy involving the promotion of the stability of registered ownership over lands, warranting an exception to the rule against raising issues for the first time on appeal.
• Change in Theory: Moldex contended that the change in its theory of the case should be allowed because it would not require the presentation of any further evidence by the adverse party.
• Collateral Attack on Title: Moldex maintained that Spouses Yu's claim of encroachment constituted a collateral attack on its Torrens title, as it essentially questioned the metes and bounds of its landholding as reflected in the title itself, which is proscribed by law.
• Failure to Prove Right of Possession: Moldex argued that Spouses Yu failed to prove their right of possession, since the complaint is akin to an action for recovery of possession wherein a plaintiff must rely on the strength of his title and not on the weakness of the defendant's claim.
• Rejection of Friar Land Survey: Moldex questioned the CA's refusal to consider the 1951 Friar Land Survey 796-D, which shows the original locations of Lot Nos. 3870 and 3869-A on the ground, arguing that this document was a common exhibit of the parties during the trial court proceedings.
• Damages and Counterclaim: Moldex questioned the award of moral damages and attorney's fees to Spouses Yu, asserting it merely exercised its ownership rights when it constructed the perimeter fence. Moldex also claimed actual damages of not less than P3,000,000.00 for stalled subdivision construction, moral damages of not less than P4,000,000.00, and Diaz prayed for P1,000,000.00 for anxiety and sleepless nights, plus P500,000.00 in attorney's fees for being forced to litigate.

• No Error in Technical Descriptions: Spouses Yu firmly denied any error in the technical descriptions on their titles, arguing that the testimony of Engr. Edgar S. Bairaca, Moldex's witness, was the sole basis for the mistaken conclusion.
• Incompetent Expert Testimony: Spouses Yu theorized that the opinions and conclusions of Engr. Barraca, who was not qualified as an expert witness, were mere hearsay and baseless because they were based on his own interpretation of documents that are not even official records of the DENR.
• Estoppel: Spouses Yu claimed Moldex is estopped from raising the issue of collateral attack on its title, as Moldex is bound by its filing of a joint motion before the trial court wherein the parties voluntarily agreed to be bound by the result of the relocation survey.
• Law of the Case: Spouses Yu reiterated the CA ruling that the technical descriptions of the properties as indicated in their Torrens titles should not be the only basis for the determination of the issue on encroachment, which is already the law of the case.

• Entitlement to Injunction: Whether Spouses Yu are entitled to a final writ of prohibitory injunction against Moldex.
• Collateral Attack on Title: Whether Spouses Yu's claim of encroachment constitutes a collateral attack on the Torrens titles of the parties.
• Estoppel and Laches: Whether Moldex is barred by estoppel and laches from raising the issue of collateral attack on its title.
• Damages: Whether the award of moral damages and attorney's fees in favor of Spouses Yu is proper.

• Entitlement to Injunction: No. Spouses Yu failed to establish a clear and unquestioned right (right in esse) over the disputed area, as the technical descriptions in their Torrens titles placed their property 50 meters away from the Moldex property and did not cover the premises where the perimeter fence was constructed.
• Collateral Attack on Title: Yes. The boundary dispute sought to alter or modify the Torrens titles of either party, which must be initiated only through direct proceedings pursuant to Section 48 of Presidential Decree No. 1529, not in an action for injunction.
• Estoppel and Laches: No. The presence of a collateral attack against a Torrens title may be appreciated by the court even if not raised by any party; its application cannot be made subject to waiver, estoppel, or laches.
• Damages: No. In the absence of malice or bad faith in the filing of the case, the award of damages, including attorney's fees, is unavailing.

• Entitlement to Injunction: Two requisites must concur for injunction to issue: first, a right to be protected; and second, acts violative of that right. Both lower courts found a disparity between the actual location of the Yu property and the technical descriptions in its certificates of title. The error originated from the 1972 subdivision of Lot 3869-N-1, where the tie line distance from Mon. 152 of the Imus Estate was reduced by 400 meters, shifting the Yu property's described location 50 meters away from the Moldex property. Because the metes and bounds in the technical description — not the numerical area — define the identity of titled property, and because the technical descriptions placed the Yu property away from the area where the fence was built, Spouses Yu could not establish that their titles covered the encroached-upon premises. An injunction cannot be granted to take property out of the possession of one party and place it into that of another whose title has not been clearly established. Equity will not lend its preventive aid where the complainant's title or right is doubtful or disputed.
• Collateral Attack on Title: A boundary dispute essentially seeks to alter or modify either party's Torrens title. Under Section 48 of Presidential Decree No. 1529, a certificate of title shall not be subject to collateral attack and cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law. A collateral attack occurs when, in another action to obtain a different relief, the certificate of title is assailed as an incident in said action. Spouses Yu sought to modify the technical descriptions on their certificates of title to conform to the supposed actual location of their property — precisely a collateral attack. The proper recourse is to file a direct action to cause the issuance of new titles bearing the correct technical descriptions and locations. Errors in technical description and location cannot be disregarded as mere clerical aberrations, as doing so would jeopardize the integrity and efficacy of the Torrens system.
• Estoppel and Laches: The Court ruled that the presence of a collateral attack against a Torrens title may be appreciated by the court even if not raised by any party. Its application cannot be made subject to waiver, nor can a party be estopped from raising it as a defense or be barred by laches. The integrity of the Torrens system is a matter of public policy that cannot be waived by private agreement or procedural default.
• Damages: The Court agreed with the RTC that there was insufficient evidence to support Moldex's counterclaim for actual damages in the form of unrealized profits. Similarly, Spouses Yu were honestly convinced of the validity of their claim to the disputed area, and in the absence of malice or bad faith in filing the case, the award of damages, including attorney's fees, was unavailing.

• Right in esse for injunction — For injunction to issue, two requisites must concur: (1) there must be a right to be protected, and (2) the acts against which the injunction is directed are violative of this right. The plaintiff's right or title must be clear and unquestioned; equity will not lend its preventive aid by injunction where the complainant's title or right is doubtful or disputed. In actions involving realty, injunction will lie only after the plaintiff has fully established his title or right thereto through a prima facie showing of a right to the final relief. Applied: Spouses Yu failed to establish their right in esse because the technical descriptions in their titles did not match the actual ground location, placing their titled property 50 meters away from the disputed area.
• Collateral attack on Torrens titles — Under Section 48 of Presidential Decree No. 1529, a certificate of title shall not be subject to collateral attack and cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law. A collateral attack occurs when, in another action to obtain a different relief, the certificate of title is assailed as an incident in said action. Applied: Spouses Yu's attempt to modify the technical descriptions on their titles through an injunction action constituted a collateral attack; the proper remedy is a direct proceeding to cause the issuance of corrected titles.
• Technical descriptions define titled property — The metes and bounds in the technical description of a certificate of title are of utmost importance. What defines a piece of titled property is not the numerical data indicated as the area of the land, but the boundaries or "metes and bounds" specified in its technical description as enclosing it and showing its limits. If there is an erroneous designation of the metes and bounds due to a non-existent monument, such inaccurate data is reflected in the certificate of title. Applied: The technical descriptions in Spouses Yu's titles, which placed their property 50 meters away from the Moldex property, were the true identity of their property for purposes of the injunction proceeding.
• Collateral attack may be appreciated sua sponte — The presence of a collateral attack against a Torrens title may be appreciated by the court even if not raised by any of the parties. Its application cannot be made a subject of waiver, nor can a party be estopped from raising it as a defense or be barred by laches. Applied: Moldex was not barred by estoppel or laches from raising the collateral attack issue, notwithstanding the CA's contrary ruling.

• "Injunctions, like other equitable remedies, will only issue at the instance of a plaintiff who has sufficient interest or title in the right or property sought to be protected." — States the fundamental requirement that a plaintiff must possess sufficient interest or title for injunctive relief, anchoring the Court's denial of the writ.
• "The [plaintiffs] right or title x x x must be clear and unquestioned, for equity, as a rule, will not lend its preventive aid by injunction where the complainant's title or right is doubtful or disputed." — Defines the standard that defeats injunctive relief where title is uncertain, directly applied to Spouses Yu's inability to prove their title covered the disputed area.
• "There is a collateral attack when, in another action to obtain a different relief, the certificate of title is assailed as an incident in said action." — Provides the canonical definition of collateral attack on a Torrens title, applied to characterize Spouses Yu's injunction action as an impermissible attempt to modify their title's technical descriptions.
• "errors in the certificate of title that relate to technical description and location cannot just be disregarded as mere clerical aberrations that are harmless in character, but must be treated seriously so as not to jeopardize the integrity and efficacy of the Torrens system of registration of real rights to property." — Emphasizes the gravity of technical description errors and the need to preserve Torrens system integrity, supporting the Court's refusal to correct the discrepancy within an injunction proceeding.

• Spouses Yu vs. Ayala Land, Inc., G.R. Nos. 173120 & 173141, April 10, 2019 — Cited as controlling authority for the principle that the metes and bounds in the technical description of a title are of utmost importance and define the property, not the numerical area data.
• Veterans Federation of the Philippines vs. Court of Appeals, 399 Phil. 56 (2000) — Followed for the principle that errors in technical description and location cannot be disregarded as mere clerical aberrations, as doing so would jeopardize the integrity and efficacy of the Torrens system.
• Philippine Economic Zone Authority vs. Carantes, et al., 635 Phil. 541 (2010) — Followed for the requisites of injunction and the principle that injunction will not issue to protect a right not in esse.
• The Register of Deeds of Negros Occidental, et al. vs. Anglo, Sr., et al., 765 Phil. 714 (2015) — Followed for the principle that a Torrens title is the best evidence of ownership of registered land.
• Sps. Decaleng vs. Bishop of the Missionary District of the Philippine Islands of Protestant Episcopal Church in the U.S.A., et al., 689 Phil. 422 (2012) — Cited for the definition of collateral attack on a certificate of title.

• Section 48, Presidential Decree No. 1529 (Property Registration Decree) — Provides that a certificate of title shall not be subject to collateral attack and cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law. Applied to bar Spouses Yu from modifying their title's technical descriptions through an injunction action, and to hold that the proper recourse is a direct action to cause the issuance of new titles bearing the correct technical descriptions and locations.

Perlas-Bernabe (Chairperson), Hernando, Gaerlan, and Rosario, JJ., concurred.