SM Prime Holdings, Inc. vs. Angela V. Madayag

A land registration court need not suspend proceedings pending the DENR’s resolution of a petition to cancel the applicant’s survey plan where the court can itself resolve whether the subject property overlaps properties already covered by existing certificates of title; suspension in such circumstances is an arbitrary exercise of discretion correctible by certiorari.

Angela V. Madayag was the applicant for original registration of a 1,492-square-meter parcel in Barangay Anonas, Urdaneta City, Pangasinan, while SM Prime Holdings, Inc. was an adjoining landowner that had recently acquired seven parcels in the same barangay, covered by separate certificates of title. The dispute implicated the Land Registration Law, Presidential Decree No. 1529, whose purpose is to finally settle title to real property, and the DENR’s administrative authority over surveying and titling of lands under the Administrative Code of 1987. The survey plan attached to Madayag’s application had been approved by the DENR’s Land Management Services, while SM Prime’s parcels were already covered by existing certificates of title.

On July 12, 2001, Angela V. Madayag filed with the Regional Trial Court of Urdaneta, Pangasinan an application for registration of a parcel of land with an area of 1,492 square meters located in Barangay Anonas, Urdaneta City, Pangasinan. Attached to the application was a tracing cloth of Survey Plan Psu-01-008438, approved by the Land Management Services of the Department of Environment and Natural Resources, Region 1, San Fernando City. SM Prime Holdings, Inc. had recently purchased seven parcels of land in Barangay Anonas, delineated as Lots B, C, D, E, G, H and I in Consolidation-Subdivision Plan No. (LRC) Pcs-21329, approved by the Land Registration Commission on August 26, 1976, and previously covered by Survey Plan No. Psu-236090 approved by the Bureau of Lands on December 29, 1970. These parcels were covered by separate certificates of title, some already in SM Prime’s name and others still in the names of the previous owners.

On August 20, 2001, SM Prime, through counsel, wrote the Chief, Regional Survey Division, DENR, Region I, demanding cancellation of Madayag’s survey plan because the lot encroached on the properties it had recently purchased and because, despite being the new owner of the adjoining lots, it was not notified of the survey conducted on June 8, 2001. SM Prime then manifested its opposition to the application. The Republic of the Philippines, through the Office of the Solicitor General, and the heirs of Romulo Visperas also filed their respective oppositions. On February 6, 2002, SM Prime filed its formal opposition, alleging that it had recently bought the seven parcels and that these were covered by separate certificates of title.

On February 20, 2002, the RTC declared a general default, except as to SM Prime, the Republic, and the heirs of Romulo Visperas. Madayag thereafter commenced the presentation of her evidence. Meanwhile, acting on SM Prime’s request for cancellation of the survey plan, DENR Assistant Regional Executive Director for Legal Services and Public Affairs Allan V. Barcena advised SM Prime to file a petition for cancellation in due form so that the DENR could properly act on it. Accordingly, in March 2002, SM Prime formally filed with the DENR a petition for cancellation of the survey plan, alleging that (a) there was no alienable or disposable property that was the subject lot, (b) no notice was made upon SM Prime as an adjoining landowner and interested party, much less the owners of adjoining lands, and (c) bad faith and/or malice attended the approval of the survey plan.

On July 17, 2002, SM Prime filed an Urgent Motion to Suspend Proceedings in the land registration case, alleging that the court should await the DENR’s resolution of the petition for cancellation because the administrative case was prejudicial to the determination of the land registration case. On October 8, 2002, the RTC granted the motion, suspended the proceedings, and archived the case until it received a copy of the DENR’s resolution on the petition for cancellation. The RTC agreed with SM Prime that the cancellation of the survey plan would be prejudicial to the petition for land registration. On February 13, 2003, the RTC denied Madayag’s motion for reconsideration of the suspension order.

• Suspension Proper: Petitioner contended that because respondent’s cause of action in the land registration case depends heavily on the survey plan, it was prudent for the RTC to suspend the proceedings pending the DENR’s resolution of the petition for cancellation.
• Certiorari Improper: Petitioner insisted that a petition for certiorari was not proper because respondent was not arbitrarily deprived of her right to prosecute her application for registration.
• DENR Exclusive Authority: Petitioner posited that the DENR has sole authority to decide the validity of the survey plan approved by the LMS, citing Section 4(15), Chapter 1, Title XIV, Administrative Code of 1987.
• No Grave Abuse of Discretion: Petitioner argued that the CA erred in finding that the RTC acted with grave abuse of discretion in suspending the proceedings and archiving the case, and that the assailed orders had proper and sufficient bases in fact and law.

• Court’s Authority: Respondent argued that the land registration court is clothed with adequate authority to resolve the conflicting claims of the parties.
• Effect of Cancellation: Respondent argued that even if the DENR cancels her survey plan, the land registration court is not by duty bound to dismiss the application for registration based solely on the cancellation.

• Suspension of Proceedings: Whether the RTC properly suspended the land registration proceedings and archived the case pending the DENR’s resolution of the petition for cancellation of the survey plan.
• Authority of Land Registration Court: Whether the land registration court may resolve the issue of whether the subject property overlaps the petitioner’s properties without awaiting the DENR’s resolution of the petition for cancellation.
• Certiorari as Remedy: Whether the CA correctly granted respondent’s petition for certiorari against the RTC’s orders suspending the proceedings and archiving the case.

• Suspension of Proceedings: No. None of the circumstances that justify a stay — avoidance of multiplicity of suits, prevention of vexatious litigation, conflicting judgments, or dependence of the second action’s rights on the first — was present; awaiting the DENR would delay land registration.
• Authority of Land Registration Court: Yes. As an incident to its authority to settle all questions over title, the land registration court may resolve the overlap issue without declaring the survey plan void; P.D. No. 1529 eliminated the distinction between general and limited land registration jurisdiction.
• Certiorari as Remedy: Yes. The suspension was an arbitrary exercise of discretion and can be corrected only by certiorari; the CA correctly set aside the RTC orders.

• Suspension of Proceedings: The power to stay proceedings is inherent in every court to control its docket with economy of time and effort, but courts must be mindful of the right to speedy disposition and should not be too eager to suspend. A stay is justified only to avoid multiplicity of suits, prevent vexatious litigations, conflicting judgments, confusion between litigants and courts, or when the rights of parties to the second action cannot be properly determined until the questions in the first action are settled. None of these circumstances was present. The petition for cancellation raised practically the same issues as petitioner’s opposition: that the survey plan included portions of the seven properties it purchased, already covered by existing certificates of title. To await the DENR resolution would only delay the land registration case and undermine the purpose of P.D. No. 1529 to finally settle title to real property. Thus, the suspension was arbitrary and correctible by certiorari.
• Authority of Land Registration Court: Without delving into the DENR’s jurisdiction over the cancellation petition, the land registration court may resolve the underlying issue of whether the subject property overlaps petitioner’s properties without necessarily declaring the survey plan void. P.D. No. 1529 eliminated the distinction between the RTC’s general jurisdiction and its limited jurisdiction as a land registration court; land registration courts can now hear and decide controversial and contentious cases and substantial issues. When the law confers jurisdiction, the court has all necessary powers to make it effective and may hear and determine all questions arising from a petition for registration. Because a Torrens title is involved, the court has the duty to determine whether issuing a new certificate will alter a valid and existing certificate; an application to register already titled land is a collateral attack on the existing title, which is not allowed. The RTC need not wait for the DENR because it can verify the overlap based on respondent’s survey plan vis-à-vis petitioner’s certificates of title. A survey plan serves to establish the true identity of the land to ensure it does not overlap previously registered land. If the court finds this difficult, it may require additional papers under Section 21 of P.D. No. 1529 or require the DENR and the Land Registration Authority to submit a report, as in Carvajal vs. Court of Appeals.
• Certiorari as Remedy: Since no circumstance justified the stay, the suspension was an arbitrary exercise of the court’s discretion. Such an arbitrary suspension can be corrected only by a petition for certiorari. The CA therefore correctly found grave abuse of discretion and set aside the RTC’s orders.

• Power to Suspend Proceedings — The power to stay proceedings is an incident to the inherent power of every court to control the disposition of its docket with economy of time and effort. It is not absolute: courts must respect the right to speedy disposition and should not be too eager to suspend. A stay is justified only to avoid multiplicity of suits, prevent vexatious litigations, conflicting judgments, confusion between litigants and courts, or when the rights of parties to the second action cannot be properly determined until the questions in the first action are settled. In this case, none of these circumstances was present, so the suspension was arbitrary and correctible by certiorari.
• Land Registration Court’s Jurisdiction under P.D. No. 1529 — Presidential Decree No. 1529 eliminated the distinction between the general jurisdiction of the RTC and its limited jurisdiction as a land registration court. Land registration courts may now hear and decide controversial and contentious cases and substantial issues. When jurisdiction is conferred, the court has all necessary powers to exercise it effectively and may hear and determine all questions arising from a petition for registration. Applied here, the land registration court could resolve the overlap issue without awaiting the DENR’s cancellation of the survey plan.
• Torrens Title and Collateral Attack — A certificate of title is not subject to collateral attack and cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law. An application for registration of land already titled constitutes a collateral attack on the existing title. The land registration court has the duty to determine whether issuing a new certificate will alter a valid and existing certificate. In this case, the court could verify whether the subject property was already titled or formed part of titled property without waiting for the DENR.
• Function of a Survey Plan — A survey plan serves to establish the true identity of the land to ensure that it does not overlap a parcel or portion already covered by a previous land registration and to forestall the possibility that it will be overlapped by a subsequent registration of adjoining land. The land registration court may use the survey plan and existing certificates of title to resolve the overlap issue.

• "Undeniably, the power to stay proceedings is an incident to the power inherent in every court to control the disposition of the cases in its dockets, with economy of time and effort for the court, counsel and litigants. But courts should be mindful of the right of every party to a speedy disposition of his case and, thus, should not be too eager to suspend proceedings of the cases before them." — States the inherent power to suspend proceedings and its limiting principle, which frames the Court’s rejection of the RTC’s suspension.
• "None of the circumstances that would justify the stay of proceedings is present. In fact, to await the resolution of the petition for cancellation would only delay the resolution of the land registration case and undermine the purpose of land registration." — The ratio decidendi for denying the petition: no justifying circumstance existed, and suspension would frustrate the purpose of land registration.
• "Without delving into the jurisdiction of the DENR to resolve the petition for cancellation, we hold that, as an incident to its authority to settle all questions over the title of the subject property, the land registration court may resolve the underlying issue of whether the subject property overlaps the petitioner’s properties without necessarily having to declare the survey plan as void." — The core holding that the land registration court need not await the DENR’s cancellation proceeding.
• "An application for registration of an already titled land constitutes a collateral attack on the existing title, which is not allowed by law. But the RTC need not wait for the decision of the DENR in the petition to cancel the survey plan in order to determine whether the subject property is already titled or forms part of already titled property." — Explains the collateral-attack principle while clarifying that the land registration court can itself determine whether the subject property is already titled.

• Security Bank Corporation vs. Victorio, G.R. No. 155099, August 31, 2005, 468 SCRA 609, 628 — Cited for the precept that suspension of proceedings is proper to avoid multiplicity of suits and prevent vexatious litigations, conflicting judgments, and confusion between litigants and courts.
• Quiambao vs. Osorio, No. L-48157, March 16, 1988, 158 SCRA 674, 679 — Cited for the precept that suspension is proper when the rights of parties to the second action cannot be properly determined until the questions raised in the first action are settled.
• Tichangco vs. Enriquez, G.R. No. 150629, June 30, 2004, 433 SCRA 324, 333-334 — Cited for the purpose of the Land Registration Law to finally settle title to real property and allow owners to rest secure on ownership and possession once title is registered.
• Talusan vs. Tayag, 408 Phil. 373, 386 (2001) — Cited for the rule that when the law confers jurisdiction upon a court, the court is deemed to have all necessary powers to exercise such jurisdiction effectively.
• Carvajal vs. Court of Appeals, 345 Phil. 582, 591 (1997) — Cited for the rule that when jurisdiction is conferred, the court has all necessary powers; also cited as an example where the land registration court required the DENR and the Land Registration Authority to submit a report, which the Court commended as in accordance with the purposes of the Land Registration Law.
• Fil-Estate Management, Inc. vs. Trono, G.R. No. 130871, February 17, 2006, 482 SCRA 578, 584 — Cited for the rule that an application for registration of an already titled land constitutes a collateral attack on the existing title.
• Del Rosario vs. Republic, 432 Phil. 824, 834 (2002) — Cited for the function of a survey plan to establish the true identity of the land and prevent overlap with previously registered land.

• Section 4(15), Chapter 1, Title XIV, Administrative Code of 1987 — Petitioner cited this to argue that the DENR exercises exclusive jurisdiction over the management and disposition of all lands of the public domain and is the sole agency responsible for classification, sub-classification, surveying, and titling of lands. The Court did not delve into the DENR’s jurisdiction to resolve the cancellation petition.
• Section 21, Presidential Decree No. 1529 — Provides that the land registration court may require additional facts to be stated in the application and may require the filing of additional papers, and may conduct ocular inspection. The Court cited this as a means by which the RTC could obtain additional information if it found difficulty in determining the propriety of the application.
• Section 48, Presidential Decree No. 1529 — 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. The Court cited this in holding that an application for registration of already titled land is a collateral attack on the existing title.
• Presidential Decree No. 1529 (Land Registration Law) — The Court cited the law’s fundamental purpose to finally settle title to real property in order to preempt any question on the legality of the title, except claims noted on the certificate at the time of registration or those arising subsequently.

• Consuelo Ynares-Santiago
• Ma. Alicia Austria-Martinez
• Minita V. Chico-Nazario
• Diosdado M. Peralta