SECOND DIVISION

G.R. No. 194114, March 27, 2019

FILIPINAS ESLON MANUFACTURING CORP., PETITIONER, v. HEIRS OF BASILIO LLANES,
NAMELY: CASIANO LLANES, DOMINGO LLANES, FABIAN LLANES, VICTORINA L. TAGALIMOT,
PACENCIA L. MANALES, NORMA L. BACALARES, LOURDES L. PAJARDO, JOSEPHINE LLANES,
JOSEFA LLANES AND JOVENCITA LLANES; ROLYNWIN Q. LAMSON; PHILIPPINE AMANAH
BANK, ALSO KNOWN AS AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILIPPINES;
SPOUSES MEDEL AND CARMEN JUSTINIANO A.K.A. CARMEN & MEDEL JUSTINIANO; RUFINO
V. GENILO; MARIA SOL A. SEVESES; SPOUSES SALVADOR AND CHEQUETHELMA GERONA;
CRESOGONO R. SEVESES, MONERA M. LALANTO; CLAUDIO M. CLOSAS; SPOUSES SERAFIN
AND ELSA FERRAREN; EDILBERTO V. PAZA* AND GENEROSO EMPUESTO, RESPONDENTS.

DECISION
CAGUIOA, J.:
1
Before the Court is a Petition for Review on Certiorari  (Petition) under Rule 45 of the Rules of
Court filed by petitioner Filipinas Eslon Manufacturing Corporation (FEMCO) against
respondents Heirs of Basilio Llanes, namely: Casiano Llanes (Casiano), Domingo Llanes
(Domingo), Fabian Llanes (Fabian), Victorina L. Tagalimot (Victorina), Pacencia L. Manales
(Pacencia), Norma L. Bacalares (Norma), Lourdes L. Pajardo (Lourdes), Josephine Llanes
(Josephine), Josefa Llanes (Josefa), and Jovencita Llanes (Jovencita) (collectively, the
respondents Heirs of Llanes); Rolynwin Q. Lamson (Rolynwin); Philippine Amanah Bank, also
known as Al-Amanah Islamic Investment Bank of the Philippines (PAB); Spouses Medel and
Carmen Justiniano (Sps. Justiniano); Rufino V. Genilo (Rufmo); Maria Sol A. Seveses (Maria);
Spouses Salvador and Chequethelma Gerona (Sps. Gerona); Cresogono R. Seveses (Cresogono);
Monera M. Lalanto (Monera); Claudio M. Closas (Claudio); Spouses Serafin and Elsa Ferraren
(Sps. Ferraren); Edilberto V. Paza (Edilberto); and Generoso Empuesto (Generoso).

The instant Petition assails the Decision2 dated August 23, 2010 (assailed Decision) promulgated
by the Court of Appeals, Cagayan de Oro City Twenty-First Division (CA) in CA-G.R. CV No.
62936, which reversed the Decision3 dated September 30, 1998 issued by the Regional Trial
Court of Lanao Del Norte, City of Iligan, Branch 6 (RTC) in Civil Case No. 06-3337.
The Facts and Antecedent Proceedings

As narrated by the CA in the assailed Decision and as culled from the records of the case, the
essential facts and antecedent proceedings of the instant case are as follows:
[Petitioner FEMCO] is a manufacturer of "eslon pipes and accessories." Its manufacturing plant
is located within a 50,528 square-meter land, known as Lot B-2, covered by Transfer Certificate
of Title No. (TCT) T-17460 (a.f.), which is situated in Barrio Sta. Felomina, Iligan City.

On February 2, 1994, Atty. Alfredo Busico, counsel for [respondents] Heirs of Basilio Llanes,
wrote a Letter to the management of [petitioner] FEMCO informing them that its plant site may
have encroached into his clients' properties, known as Lot 1911-B-4, Lot 191 l-B-3, and Lot
1911-J, covered by TCT No. T-29,635 (a.f.), TCT No. T-31,994 (a.f.) and TCT No. T-21573 (a.f.),
respectively.

In a Letter dated 16 February 1994, Atty. Gerardo Padilla, counsel for [petitioner] FEMCO,
replied that his client's property is covered by a valid certificate of title - TCT No. T-17460 (a.f.)-
He also informed Atty. Busico that upon his inquiry with the Register of Deeds of Iligan City, he
discovered that:
1) Lot 1911 is titled in the name of one Basilio Llanes. His title thereto is evidenced by OCTNo.
0-1040 (a.f.) based on Decree No. N-182390 dated April 17,1968 [allegedly issued by the
Hon. Teodulo Tandayag of the Court of First Instance (CFI) of Lanao del Norte.]
2) Per Cadastral record, only Messrs. Pio Echaves and Pedro Q. Solosa filed an answer/claims
for Lot 1911, which answer still exists.
3) Again, per record, your client Basilio Llanes did not file an answer/claim to said Lot 1911.
4) Finally, per record, Lot 1911 is NOT yet decreed in the name of any person, let alone your
client Basilio Llanes.
Atty. Padilla concluded that OCT No. 0-1040 (a.f.) which is registered in the name of Basilio
Llanes is spurious.

No further communication between Atty. Busico and Atty. Padilla transpired thereafter.

On 14 March 1995, [petitioner] FEMCO management received a Letter dated 23 February 1995
from a certain Atty. Dulcesimo Tampus, apparently the new counsel for the Heirs of Basilio
Llanes, informing them that that they had erroneously fenced a portion of about 16,629 square
meters of his clients' lot, known as Lot 1911. The letter demanded that the fence be removed
immediately and for [petitioner] FEMCO to pay the amount of Php 2,000.00 as rental fee, until
the fence shall have been removed.

Two days later, Atty. Padilla wrote Atty. Tampus a Letter informing him that "per cadastral
record, the only persons who filed answers to Lot 1911 were Messrs. Pio Echavez and Pedro Q.
Solosa. Basilio Llanes never claimed or filed an answer to said lot. Also, per Form No. 36, Record
of Cadastral Answer, Lot 1911 is not yet decreed in favor of any person, let alone in the name of
Basilio Llanes. The only inevitable conclusion is that the title of your clients is faked (sic)."

To forestall any farther (sic) attempt to interfere with its property rights, [petitioner] FEMCO
filed on 1 September 1995, a Complaint against [the respondents] before the RTC of Lanao del
Norte for quieting of title and damages. This was docketed as Civil Case No. 3337.

In its Complaint, [petitioner] FEMCO asserted [that it is the registered owner of a parcel of land
situated in Sta. Felomina, Iligan City having an area of 50,528 square meters, its title thereto
being evidenced by TCT No. 17460 (a.f.), that it has constructed thereon its manufacturing plant
for eslon pipes and accessories, and that "OCT No. 0-1040 (a.f.) and all the transfer certificate of
titles emanating thereunder, including but not limited to those referred to in the next
preceding paragraph, are apparently valid or effective but are in truth and in fact invalid,
ineffective, voidable, or unenforceable and are prejudicial to [petitioner FEMCO's] title"; that
"despite the knowledge that their titles are fake and fraudulent, [respondents] Heirs of Basilio
Llanes and [Rolynwin] continue to hold on to their title and in fact has (sic) been selling and/or
disposing of the same to the prejudice of [petitioner FEMCO] and the Torrens system.
Furthermore, [respondents] Heirs of Basilio Llanes continue to pester and annoy [petitioner
FEMCO] by claiming that a portion of [petitioner FEMCO's] land has encroached on their titled
land, which they know is false"; that [respondent PAB,] despite the fact that its titles are fake as
they emanated from a fake OCT No. 0-1040 (a.f.) has claimed that [petitioner FEMCO's] fence is
within its property, which is false."

xxxx

[On the part of the respondents Heirs of Basilio Llanes, they denied the material allegation of
the Complaint, alleging that OCT No. 0-1040 (a.f.) is valid and effective by virtue of a decision of
the CFI of Lanao del Norte dated April 17, 1968; that Lot 1911 has been in actual physical
possession by Basilio Llanes; that petitioner FEMCO is illegally occupying a portion of Lot 1911
consisting of 16,629 sq. meters; and that TCT No. T-17480 is the one which is invalid, void, and
ineffective because it is based on a non-existing homestead application.]

On 30 September 1998, the [RTC] issued the assailed Decision in favor of [petitioner FEMCO].

[The RTC, in its Decision, held that "the evidence is indubitable that NO decision was signed and
rendered by Hon. Teodulo Tandayag, the detailed presiding judge of the then Court of First
Instance of Lanao del Norte adjudicating Cad. Lot No. 1911 in favor of Basilio Llanes on April 17,
1968. Aside from the other facts such as the absence of a cadastral answer of Basilio Llanes and
the testimony of Atty. Macaraya that the cadastral records show that Lot 1911 has not been
adjudicated to any person or entity, the most telling and strongly convincing evidence showing
that no such decision was rendered by Judge Tandayag is the alleged certified decision, Exh. 'H'
itself. It contains specific data which condemns itself as a falsity, x x x." 4

The dispositive portion of the RTC's Decision reads:

1. Declaring OCT No. 0-1040 (a.f.) in the name of Basilio Llanes, Exh. "G" and Decree No. N-
l82390, Exh. "G-1" null and void ab initio, and the decision, Exh. "H" as well as the Order for the
issuance of the decree, Exh. "H-4" inexistent, fake and void ab initio;

2. Declaring all transfer certificates of title derived from OCT No. 0-1040 (a.f.) to be likewise
invalid and ineffective[,] particularly the following:
a) TCT No. T-35,257 (a.f.); TCT No. T- 35,258 (a.f.) and TCT No. T-35259, all in the name of
[respondents Sps. Gerona];

b) TCT No. T-28,823 (a.f.), in the name of [respondent Rufino];

c) TCT No. T-30,495 (a.f.) and TCT No. T-30496 (a.f), both in the name of [respondent
Cresogono];
d) TCT No. T-31992 (a.f), in the name of [respondent Maria];

e) TCT No. T-29,546 (a.f.) in the name of [respondent Monera];

f) TCT No. T-45,217 (a.f), in the name of [respondent Claudio];

g) TCT No. T-31767 (a.f); TCT No. 32390 (a.f.) and TCT No. T-34,495 (a.f), all in the name of
[respondents Sps. Ferraren];

h) TCT No. T-21,572 (a.f.) and TCT No. T-31994 (a.f), all in the name of Basilio Llanes;

i) TCT No. T-32,116 (a.f), in the name of [respondent Edilberto];

j) TCT No. T-32085 (a.f); TCT No. T-32183 (a.f), in the name of [respondent PAB];
The Register of Deeds of Iligan City is directed to cancel all the above certificates of title.

3. Declaring [petitioner FEMCO] to be entitled to the ownership and possession of the land
described in TCT No. T-17460 (a.f.) in its name particularly that portion of the 16,629 sq. meters
claimed by [respondents] Heirs of Basilio Llanes and that portion of 947.64 sq. meters claimed
by [respondent PAB].

4. Denying [petitioner FEMCO's] claim for damages against all [respondents] and dismissing the
complaint against [respondent Generoso] without prejudice.

5. Dismissing the counterclaims of all [respondents] against [petitioner FEMCO] for lack of
merit.

No pronouncement as to costs. SO ORDERED.5

Aggrieved, [respondents Edilberto], Heirs of Basilio Llanes, [Cresogono and Maria (respondents
Seveses)], [Monera], and [PAB] filed their respective Notices of Appeal. However, [respondents
Rufino, Sps. Justiniano, Sps. Gerona, Claudio, and Sps. Ferraren] failed to file an appeal. Thus, as
to them, the decision rendered by the court a quo has become final and executory.

While the [respondent] Heirs of Basilio Llanes and [respondents Seveses] were able to file their
Notice of Appeal within the reglementary period, they however failed to file their Appellants'
Brief within the time allowed and granted by [the CA]. Thus, on 10 August 2000, the [CA] issued
a Resolution dismissing their appeal pursuant to Section 1(e) Rule 50 of the 1997 Rules of Civil
Procedure. Subsequently, on 13 September 2000, an Entry of Judgment was issued by the [CA],
declaring the case final and executory insofar as [respondents] Heirs of Basilio Llanes and
[respondents Seveses] were concerned. Hence, the [CA no longer passed] upon their respective
appeals in [the assailed] Decision.

xxxx
[The CA thus resolved] the merits of the appeals foisted by [respondents PAB, Monera, and
Edilberto.]6
The Ruling of the CA

In the assailed Decision, the CA granted the appeal of respondents PAB, Monera and Edilberto.
The dispositive portion of the assailed Decision reads:
WHEREFORE, all the foregoing considered, the assailed Decision dated 30 September 1998
rendered by the Regional Trial Court (RTC), 12th Judicial Region, Branch 06, City of Iligan, in Civil
Case No. 06-3337 is hereby REVERSED and SET ASIDE. Plaintiff-appellee FEMCO's Complaint
against defendants and defentants-appellants Al-Amanah Islamic Bank, Monera M. Lalanto and
Edilberto V. Paza is DISMISSED. No Costs.

SO ORDERED.7
As explained in the assailed Decision, in the main, the CA granted the appeal for three reasons.

First, according to the CA, since it is evident from petitioner FEMCO's assertions, allegations,
and reliefs sought in its Complaint for Quieting of Title that it is actually an indirect action for
annulment of title, the Complaint must be dismissed in accordance with the doctrine that a
certificate of title cannot be subject to a collateral attack.8

Second, since the title of the respondents Heirs of Basilio Llanes [OCT No. 0-1040 (a.f.)] is
sourced from Decree No. N-182390 supposedly issued by the then CFI of Lanao del Norte, the
CA held that an action for quieting of title is not the appropriate remedy where the action
would require the modification or interference with the judgment or order of another co-equal
court.9

Lastly, the CA held that petitioner FEMCO had no personality to institute the Complaint for
Quieting of Title because if petitioner FEMCO's prayer in its Complaint would be granted, Lot
1911 would be reverted to the government. Hence, only the government, through the Solicitor
General, can institute a reversion case.10

Hence, the instant Petition.

Respondent Edilberto, through his heirs, filed a Manifestation for Substitution as Defendant-
heirs of Edilberto V. Paza with Comment to the Petition for Review on Certiorari 11 dated January
15, 2014, while respondent PAB filed its Comment12 dated November 27, 2014, to which
petitioner FEMCO responded with its Consolidated Reply13 dated January 23, 2017.
Issue

The central issue to be resolved by the Court is whether the CA was correct in holding that: (1)
petitioner FEMCO's Complaint for Quieting of Title is a prohibited collateral attack on a
certificate of title; (2) petitioner FEMCO, in filing its Complaint, resorted to a wrong remedy
since a separate action would require the modification or interference with the judgment or
order of another co-equal court; and (3) petitioner FEMCO had no personality to institute the
Complaint.
The Court's Ruling

The Court finds petitioner FEMCO's Petition meritorious and resolves to grant the instant
Petition.

I. The Procedural Issues

Before deciding on the substantive merits of the instant case, the Court shall first quickly
resolve the lone procedural issue raised by respondent PAB against the instant Petition.

Supposed Defect in the Verification and Certification of Non-Forum Shopping

According to Section 5, Rule 7, of the Rules of Court, and as held by a catena of cases decided
by the Court,14 it is the plaintiff or principal party who should execute the certification of non-
forum shopping under oath. In the case of the corporations, the physical act of signing may be
performed, on behalf of the corporate entity, only by specifically authorized individuals for the
simple reason that corporations, as artificial persons, cannot personally do the task
themselves.15

In its Comment, respondent PAB alleges that "there is absolutely no showing on the part of
Calvin H. Tabora that at the time of the filing of the Petition, he was clothed with a special
authority to sign the verification and certification of non-forum shopping on behalf of FEMCO.
His being the Vice President for Manufacturing does not ipso facto confer on him the special
authority to perform such act on behalf of the corporation." 16

A simple perusal of the instant Petition belies the allegation of respondent PAB.

It is crystal clear from the Secretary's Certificate dated November 9, 2010 attached by
petitioner FEMCO in its Petition that Calvin H. Tabora is "authorized to sign the Verification and
Certification of Non-Forum Shopping of the above petition." 17

Hence, the lone procedural issue raised by respondent PAB is patently without merit.

II. The Substantive Issues

The Court shall now discuss in seriatim the three reasons of the CA in granting the appeal of
respondents PAB, Monera, and Edilberto, and consequently reversing and setting aside the
RTC's Decision dated September 30, 1998 which granted petitioner FEMCO's Complaint for
Quieting of Title.

A. The Complaint for Quieting of Title as a Prohibited Collateral Attack against Certificates of
Title
The CA posits that since in petitioner FEMCO's Complaint for Quieting of Title, the relief actually
sought for was the nullification of OCT No. 0-1040 (a.f.) and all other titles emanating
therefrom: "This action is clearly an indirect or collateral attack because the suit which
[petitioner] FEMCO filed before the [RTC] prayed for a different relief, which is not proper in an
action for quieting of title. Instead, it referred to the annulment of OCT No. 0-1040 and Decree
No. N-182390, including the subsequent transfer certificates of title." 18

In essence, the CA believes that an action for quieting of title which involves a challenge to the
validity of a certificate of title is a collateral attack which is prohibited by law.

The CA is mistaken.

Jurisprudence explains that an action or proceeding is deemed an attack on a title when its
objective is to nullify the title, thereby challenging the judgment pursuant to which the title was
decreed. The attack is direct when the objective is to annul or set aside such judgment, or
enjoin its enforcement. On the other hand, the attack is indirect or collateral when, in an action
to obtain a different relief, an attack on the judgment is nevertheless made as an incident
thereof.19

An action to quiet title or to remove the clouds over a title is a special civil action governed by
the second paragraph of Section 1, Rule 63 of the Rules of Court. Specifically, an action for
quieting of title is essentially a common law remedy grounded on equity. The competent court
is tasked to determine the respective rights of the complainant and other claimants, not only to
put things in their proper place, to make the one who has no rights to said immovable respect
and not disturb the other, but also for the benefit of both, so that he who has the right would
see every cloud of doubt over the property dissipated, and he could afterwards without fear
introduce: the improvements he may desire, to use, and even to abuse the property as he
deems best. For an action to quiet title to prosper, two indispensable requisites must concur,
namely: (1) the plaintiff or complainant has a legal or an equitable title to or interest in the real
property subject of the action; and (2) the deed, claim, encumbrance, or proceeding claimed to
be casting cloud on his title must be shown to be in fact invalid or inoperative despite its prima
facie appearance of validity or legal efficacy.20

In the instant case, the Complaint filed by petitioner FEMCO alleged and, as found by the RTC,
sufficiently proved these two requisites for quieting of title: that petitioner FEMCO has a legal
right in the subject property by virtue of TCT No. T-17460 (a.f.); and that the deed claimed to be
casting a cloud on the title of petitioner FEMCO, i.e., OCT No. 0-1040 (a.f.) based on Decree No.
N-182390 dated April 17, 1968, is invalid, null, and void.

Hence, raising the invalidity of a certificate of title in an action for quieting of title is NOT a
collateral attack because it is central, imperative, and essential in such an action that the
complainant shows the invalidity of the deed which casts cloud on his title. In other words, at
the heart of the Complaint for Quieting of Title instituted by petitioner FEMCO is the
nullification of OCT No. 0-1040 in order to remove the cloud besetting its own title. This is
manifestly a direct attack.

In Oño, et al. v. Lim,21 the Court, in finding unmeritorious therein petitioner's claim that action
for quieting of title should be disallowed because it supposedly constituted a collateral attack
on his certificate of title, held that:
The petitioners contend that this action for quieting of title should be disallowed because it
constituted a collateral attack on OCT No. RO-9969-(O-20449), citing Section 48 of Presidential
Decree No. 1529, viz:

Section 48. Certificate not subject to collateral attack. - A certificate of title shall not be subject
to collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding in
accordance with law.

The petitioners' contention is not well taken.

An action or proceeding is deemed an attack on a title when its objective is to nullify the title,
thereby challenging the judgment pursuant to which the title was decreed. The attack is direct
when the objective is to annul or set aside such judgment, or enjoin its enforcement. On the
other hand, the attack is indirect or collateral when, in an action to obtain a different relief, an
attack on the judgment is nevertheless made as an incident thereof.

Quieting of title is a common law remedy for the removal of any cloud, doubt, or uncertainty
affecting title to real property. Whenever there is a cloud on title to real property or any
interest in real property by reason of any instrument, record, claim, encumbrance, or
proceeding that is apparently valid or effective, but is, in truth and in fact, invalid, ineffective,
voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to
remove such cloud or to quiet the title. In such action, the competent court is tasked to
determine the respective rights of the complainant and the other claimants, not only to place
things in their proper places, and to make the claimant, who has no rights to said immovable,
respect and not disturb the one so entitled, but also for the benefit of both, so that whoever
has the right will see every cloud of doubt over the property dissipated, and he can thereafter
fearlessly introduce the improvements he may desire, as well as use, and even abuse the
property as he deems fit.22
Similarly, in Roman Catholic Archbishop of San Fernando v. Soriano, Jr.,23 the Court held that the
complaint for quieting of title filed against the therein petitioner does not amount to a
collateral attack because at the heart of the action for quieting of title was the genuineness of
the certificate of title:
The RCA likewise asserts that the case for quieting of title is a collateral attack on its title which
is prohibited by law. However, we agree with the CA in holding that the complaint against the
RCA does not amount to a collateral attack because the action for the declaration of nullity of
OCT No. 17629 is a clear and direct attack on its title.

An action is deemed an attack on a title when its objective is to nullify the title, thereby
challenging the judgment pursuant to which the title was decreed. The attack is direct when the
objective is to annul or set aside such judgment, or enjoin its enforcement. On the other hand,
the attack is indirect or collateral when, in an action to obtain a different relief, an attack on the
judgment is nevertheless made as an incident thereof.

The complaint filed with the RTC pertinently alleged that the claim of ownership by the RCA is
spurious as its title, denominated as OCT No. 17629, is fake for the following reasons: (1) that
the erasures are very apparent and the title itself is fake; (2) it was made to appear under
Memorandum of Encumbrance Entry No. 1007 that the title is a reconstituted title when in
truth, it is not; and (3) the verification reveals that there was no petition filed before any court
where an order was issued for the reconstitution and re-issuance of an owner's duplicate copy.
It is thus clear from the foregoing that the case filed questioning the genuineness of OCT No.
17629 is a direct attack on the title of the RCA. 24
In Guntalilib v. Dela Cruz,25 the Court, in denying the therein petitioner's claim that the therein
respondents' action for quieting of title was a prohibited collateral attack, held that the
underlying objectives or reliefs sought in both quieting of title and the annulment of title cases
are essentially the same — adjudication of the ownership of the disputed lot and nullification of
the questioned certificates of title:
Moving on to the substantive issues raised, the Court finds without merit petitioner's claim that
respondents' quieting of title case constitutes a prohibited attack on his predecessor Bernardo
Tumaliuan's unnumbered OCT as well as the proceedings in LRC Case No. 6544. It is true that
"the validity of a certificate of title cannot be assailed in an action for quieting of title; an action
for annulment of title is the more appropriate remedy to seek the cancellation of a certificate of
title." Indeed, it is settled that a certificate of title is not subject to collateral attack. However,
while respondents' action is denominated as one for quieting of title, it is in reality an action to
annul and cancel Bernardo Tumaliuan's unnumbered OCT. The allegations and prayer in their
Amended Complaint make out a case for annulment and cancellation of title, and not merely
quieting of title: they claim that their predecessor's OCT 213, which was issued on August 7,
1916, should prevail over Bernardo Tumaliuan's unnumbered OCT which was issued only on
August 29, 1916; that petitioner and his co-defendants have knowledge of OCT 213 and their
existing titles; that through fraud, false misrepresentations, and irregularities in the
proceedings for reconstitution (LRC Case No. 6544), petitioner was able to secure a copy of his
predecessor's supposed unnumbered OCT; and for these reasons, Bernardo Tumaliuan's
unnumbered OCT should be cancelled. Besides, the case was denominated as one for "Quieting
of Titles x x x; Cancellation of Unnumbered OCT/Damages."

It has been held that "[t]he underlying objectives or reliefs sought in both the quieting-of-title
and the annulment-of-title cases are essentially the same — adjudication of the ownership of
the disputed lot and nullification of one of the two certificates of title." Nonetheless, petitioner
should not have been so simplistic as to think that Civil Case No. 6975 is merely a quieting of
title case. It is more appropriate to suppose that one of the effects of cancelling Bernardo
Tumaliuan's unnumbered OCT would be to quiet title over Lot 421; in this sense, quieting of
title is subsumed in the annulment of title case.26
The CA heavily relies on Foster-Gallego v. Sps. Galang, et al.27 in arriving at its conclusion that
petitioner FEMCO's Complaint for Quieting of Title is a prohibited collateral attack. This reliance
is misplaced.

First and foremost, the said case involved the raising of the nullity of a TCT in a mere answer-in-
intervention to a complaint for quieting of title. This is certainly not the situation in the instant
case.

In any case, in Leyson, et al. v. Sps. Bontuyan,28 which was decided a year after Foster-Gallego v.
Sps. Galang, the Court held that "[w]hile Section 47 of Act No. 496 provides that a certificate of
title shall not be subject to collateral attack, the rule is that an action is an attack on a title if its
object is to nullify the same, x x x. x x x Such action to attack a certificate of title may be an
original action or a counterclaim [in a quieting of title case] in which a certificate of title is
assailed as void."29 The Court added that "since all the essential facts of the case for the
determination of the title's validity are now before the Court, to require the party to institute
cancellation proceedings would be pointlessly circuitous and against the best interest of
justice."30

Therefore, based on the foregoing, the CA was mistaken in deeming petitioner FEMCO's
Complaint for Quieting of Title a prohibited collateral attack.

B. The Non-existence of Decree No. N-182390 dated April 17, 1968

The Court shall now discuss the validity of the CA's reasoning that, since the title of the
respondents Heirs of Basilio Llanes, i.e., OCT No. 0-1040 (a.f.) is sourced from Decree No. N-
182390 supposedly issued by the then CFI of Lanao del Norte, the RTC was incorrect in granting
petitioner FEMCO's Complaint for Quieting of Title since a separate action is the appropriate
remedy to modify or interfere with the judgment or order of another co-equal court.

The CA is correct in saying that it is the CA, and not the RTC, which has exclusive jurisdiction
over actions for annulment of trial court decisions. A trial court has no authority to annul the
final judgment of a co-equal court.31 However, the aforesaid doctrine does not apply in the
instant case.

An action to annul and enjoin the enforcement of the judgment presupposes that the
challenged judgment exists to begin with.32

In the instant case, there is no final judgment that must be subjected to an action for
annulment with the CA because, as indisputably found by the RTC, Decree No. N-182390
supposedly issued by the then CFI of Lanao del Norte and signed by Hon. Teodulo Tandayag
is non-existent to begin with. The RTC did not invalidate or nullify Decree No. N-182390; what
it decreed is that Decree No. N-l82390 does not exist at all.

As found by the RTC, through the records of cadastral answers of Iligan City and certification of
one Atty. Joel Macaraya, the Clerk of Court of the then CFI of Lanao del Norte, among many
other pieces of evidence on record, there has been no decree issued by the Lanao CFI
adjudicating Lot No. 1911 in favor of Basilio Llanes.33

Further, the RTC also noted that Mrs. Ma. Geronima G. Perez, the designated Branch Clerk of
Court from 1981 to 1989, certified that the only copy of the alleged Decision held by
respondents, a supposed certified true copy of Decision dated April 17, 1968 adjudicating Lot
No. 1911 purportedly issued by her, is a completely falsity as she never issued such a
document.34

All in all, the RTC conclusively found that "[t]he evidence is indubitable that NO decision was
signed and rendered by the Hon. Teodulo Tandayag, the detailed presiding judge of the then
Court of First Instance of Lanao del Norte adjudicating Cad. Lot No. 1911 in favor of Basilio
Llanes on April 17, 1968."35

At this juncture, the Court stresses that factual findings of the trial court, its calibration of the
testimonies of the witnesses, and its assessment of their probative weight are given high
respect, if not conclusive effect, unless it ignored, misconstrued, misunderstood or
misinterpreted cogent facts and circumstances of substance, which, if considered, will alter the
outcome of the case.36

Hence, for the foregoing reasons, the Court finds incorrect the CA's reversal of the RTC's
Decision granting petitioner FEMCO's Complaint for Quieting of Title on the erroneous ground
that a separate action is the appropriate remedy to modify or interfere with the judgment or
order of another co-equal court.

C. The Personality of Petitioner FEMCO to institute the Complaint for Quieting of Title

Lastly, the Court now resolves to determine whether the CA was correct in holding that
petitioner FEMCO had no personality to institute the Complaint for Quieting of Title for the sole
reason that if petitioner FEMCO's prayer in its Complaint would be granted, Lot No. 1911 would
be reverted to the government. As held by the CA, only the government, through the Office of
the Solicitor General, can institute a reversion case.

The CA is again mistaken.

An action for reversion involves property that is alleged to be of State ownership, aimed to be
reverted to the public domain. Jurisprudence has held that there is no merit to the contention
that only the State may bring an action for reconveyance with respect to property proven to be
private property. The State, represented by the Solicitor General, is not the real party-in-
interest; inasmuch as there was no reversion of the disputed property to the public domain, the
State is not the proper party to bring a suit for reconveyance of a private property. 37

In the instant case, contrary to the CA's belief, the granting of the Complaint for Quieting of
Title filed by petitioner FEMCO did not have the effect of reverting the subject property into
public land because, to begin with, petitioner FEMCO is the registered private owner of the
subject property, having TCT No. T-17460 (a.f.) registered in its name.

As held by the RTC in its Decision, there is no evidence on record which substantiates the claim
that OCT No. RP-62(21), from which TCT No. T-17460 (a.f.) registered in the name of petitioner
FEMCO stems from, was invalidly issued.38

Hence, with the granting of the Complaint for Quieting of Title, the status that petitioner
FEMCO enjoyed prior to the filing of the Complaint as owner of the land covered by TCT No. T-
17460 (a.f.) remains undisturbed.

Therefore, with the refutation of the three erroneous grounds provided by the CA in granting
the appeal posed by respondents PAB, Monera, and Edilberto, the overturned Decision of the
RTC, which granted petitioner FEMCO's Complaint for Quieting of Title, must be reinstated.

WHEREFORE, premises considered, the instant Petition is GRANTED. The assailed Decision
dated August 23, 2010 promulgated by the Court of Appeals, Cagayan de Oro City, Twenty-First
Division in CA-G.R. CV No. 62936 is REVERSED AND SET ASIDE. The Decision dated September
30, 1998 issued by the Regional Trial Court of Lanao Del Norte, City of Iligan, Branch 6 in Civil
Case No. 06-3337 is REINSTATED.

SO ORDERED.
 FIRST DIVISION
G.R. No. 164797                   February 13, 2006
JOSEFINA M. CRUZ and ERNESTINA M. CONCEPCION, Petitioners,
vs.
THE HON. COURT OF APPEALS, SECOND DIVISION, MARIANO "BOY" BUNAG and ROLANDO
BUNAG, Respondents.
DECISION
CHICO-NAZARIO, J.:
Before Us is a Petition for Certiorari under Rule 65 of the Rules of Court which seeks to reverse
and set aside the decision1 of public respondent Court of Appeals dated 19 March 2004 which
dismissed the petition for certiorari asking for the nullity of the 13 May 2003 Order of the
Regional Trial Court of Gapan, Nueva Ecija, Branch 35, in Civil Case No. 2583-02, and its
Resolution2 dated 29 June 2004 denying petitioners' motion for reconsideration.
The antecedents are substantially stated by the Court of Appeals as follows:
There are four (4) cases involved in this controversy. The first case that was filed between the
parties is Civil Case No. 4365 for Unlawful Detainer litigated before the Municipal Trial Court of
Gapan, Nueva Ecija entitled "Josefina M. Cruz and Ernestina M. Concepcion, plaintiffs, vs.
Mariano `Boy' Bunag, Rolando Bunag, Remedios Bunag, et al., Defendants." This case was
decided on 6 November 1998 by the Municipal Trial Court in favor of herein petitioner Josefina
M. Cruz and Ernestina M. Concepcion.
The second case is Civil Case No. 1600 for Quieting of Title, filed before the Regional Trial Court
of Gapan, Nueva Ecija, Branch 36 with "Carlos L. Bunag, Elias Bunag Natividad, Mariano Bunag,
Salud Bunag Clanaoc and Juliana Bunag Arevalo, as Plaintiffs and Josefina M. Cruz and Ernestina
M. Concepcion as Heirs of Sps. Carlos Maniquis and Marina Bunag, as Defendants." This case
was dismissed for failure to prosecute as evidenced by the Regional Trial Court Order dated 10
March 2000.
The third case is Civil Case No. 2573-02 for Injunction, with "Mariano `Boy' Bunag and Rolando
Bunag as Petitioners against Carlos Bunag, Elias Bunag Natividad, Mariano Bunag, Salud Bunag
Clanaoc and Juliana Bunag Arevalo as Defendants." This case, which was filed before the
Regional Trial Court of Gapan City, Branch 35, was dismissed on ground of res judicata. The 6
November 2002 Order, in effect, ruled that there is a substantial identity of parties in this case
and in Civil Case No. 1600, a Petition for Quieting of Title.
The fourth case is the instant controversy for Annulment of Title With Damages. Docketed as
Civil Case No. 2583-02, it was lodged by herein private respondents Mariano "Bo[y]" Bunag and
Rolando Bunag against herein petitioners Josefina M. Cruz and Ernestina M. Concepcion before
the sala of Branch 35, Regional Trial Court of Gapan City.
It appears that herein petitioners interposed a Motion for Outright Dismissal of Civil Case No.
2583 which was granted by the Court a quo as evidenced by an Order dated 18 February 2003,
ratiocinating:
x x x           x x x          x x x
After a careful study of the arguments of both parties, the Court has found that herein case
(2583) involve the same parties, subject matter and issue as that in Civil Case No. 1600 which
has become final and executory and Civil Case No. 2573-02 which was already dismissed by this
Court on the ground of res judicata. In all three cases, Mariano Bunag was included as party-
plaintiff and Ernestina Concepcion as party-defendant. The subject matter involves a parcel of
land located in San Nicolas, Gapan City with an area of 1,160 square meters, more or less, and
the issue is who between the two parties has the lawful title over the same. Clearly, not only
res judicata but also accion pendente lite is present in herein case which the plaintiffs and their
counsel should have revealed in the Certificate/Verification of their complaint. The allegation
that it is only now that they have learned of the existence of Civil Case No. 1600 is without
merit considering that in the Motion for the Outright Dismissal of Civil Case No. 2573, dated
September 19, 2002, its existence was already disclosed and even became the ground for the
dismissal of Civil Case No. 2573 on the ground of res judicata.
Moreover, the Certification against forum shopping does not only refer to final and executory
actions but also to pending controversies. Considering that plaintiffs have been represented by
the same counsel in Civil Case No. 2573 and herein case (Civil Case No. 2583-02), it is very clear
that plaintiffs counsel is appraised (sic) of the existence of Civil Case No. 1600 and Civil Case No.
2573.
WHEREFORE, premises considered, the Motion for Outright Dismissal is granted by reason of
res judicata and accion pendente lite and the plaintiffs and their counsel are declared guilty of
indirect Contempt of Court by reason of non-disclosure of Civil Case No. 1600 and Civil Case No.
2573 as required by Section 5, Rule 7 of the Revised Rules of Court and ordered them to pay a
fine of P1,000.00 each.
SO ORDERED. (Rollo, p. 36)
x x x           x x x          x x x
However, when herein private respondents interposed their Motion for Reconsideration, the
court a quo reversed itself and reinstated the present case, the fallo of the herein assailed
Order reads:
x x x           x x x          x x x
In the light of the foregoing, the Order dated February 18, 2003 of this Court, granting
defendants' Motion for the Outright Dismissal of this case and citing plaintiffs and counsel for
contempt of court is hereby reconsidered and set aside. Accordingly, the instant case is
reinstated and the defendants are directed to file their answer/responsive pleading within
fifteen (15) days from receipt of this order.
SO ORDERED. (Rollo, pp. 11-13)3
Via petition for review, petitioners went to the Court of Appeals. The latter dismissed the
petition for lack of merit. It ruled that one of the elements of res judicata, i.e., that there must
be, between the first and the second actions, identity of parties, of subject matter and of cause
of action, is lacking. It explained:
First. The issue in the Injunction case is the propriety of the demolition order; while in the
present action (Petition for Annulment of Title With Damages), the pivot of inquiry is the
ownership of the controversial estate.
Second. Private respondent Mariano Bunag denied that he authorized Carlos Bunag to sign the
Verified Complaint in his behalf. Because of this, Mariano Bunag cannot be considered as a
party litigant in the Injunction case. Concomitantly, there is no identity of parties between the
present case and in Civil Case No. 2573-02 (Injunction). As correctly ruled by the trial court,
thus:
x x x           x x x          x x x
While it is true that this Court has earlier made a declaration in Civil Case No. 2573 that Carlos
Bunag was authorized by his co-plaintiffs to file Civil Case No. 1600 including herein plaintiff
Mariano Bunag, against herein defendants, such declaration was based on the verified
complain[t] signed by Carlos Bunag. In the absence of any evidence to the contrary, the Court
has to assume that indeed Carlos Bunag was authorized by his co-plaintiff Mariano Bunag to file
Civil Case No. 1600. However, with the submission of the affidavit of Mariano Bunag on April
14, 2003, wherein he claimed that Civil Case No. 1600 for quieting of title was filed without his
knowledge by Carlos Bunag for and in behalf of the other plaintiffs including himself, the
verified complaint of Carlos Bunag is now disputed.
The categorical denial of Mariano Bunag that he was not aware that Carlos included him as one
of the plaintiffs in Civil Case No. 1600 for quieting of title has disputed the verified complaint of
Carlos Bunag. What is more, Rolando Bunag, one of the herein plaintiffs was never made a
party in the said Civil Case No. 1600 for quieting of title. Since Mariano Bunag did not authorize
nor give his consent to Carlos Bunag to include him as one of the plaintiffs in Civil Case No. 1600
and that herein plaintiffs Rolando Bunag is not a party to the said case, the dismissal of Civil
Case No. 1600 will not bind them. Hence, the dismissal of Civil Case No. 1600 will not bar the
filing of the instant complaint as one of the requisites of res judicata is absent. There is no
identity of parties between Civil Case No. 1600 and the instant case for the simple reason that
herein plaintiffs were not parties in Civil Case No. 1600 as discussed above. Consequently,
plaintiffs and their counsel can not be said to have violated the rule against forum shopping.
Plaintiffs and their counsel did not file Civil Case No. 1600 and therefore they are not obligated
to inform this Court that they have filed a similar action involving the same issue with other
court.
x x x"
Third. As the court of justice abhors the disposition of the case based on technicalities, this
Court further concurs with the trial court's disquisition, to quote:
x x x           x x x          x x x
Moreover, substantial justice demands that technicalities should not be allowed to prevail over
the substantive rights of a party-litigant. If the subject property is really owned by the plaintiffs,
then it would be the height of injustice if they are not allowed to prove their cause of action
because of mere technicality. It would amount to deprivation of their property without due
process.4
Petitioners filed a motion for reconsideration 5 which was denied in a resolution dated 29 June
2004.6
Dissatisfied, petitioners are now before us charging that the Court of Appeals committed grave
abuse of discretion amounting to lack or excess of jurisdiction in rendering the assailed decision
and resolution.7
Petitioners contend that all the elements of res judicata are present in the instant case. They
argue that the shuffling of parties should not prevent the application of res judicata considering
that three prior cases (Civil Case No. 4365 for Unlawful Detainer, Civil Case No. 1600 for
Quieting of Title and Civil Case No. 2573 for Injunction) against substantially the same parties
over the same subject matter and cause of action have all been decided in their favor. They
point out that private respondent Mariano "Boy" Bunag was one of the parties in the Ejectment
and Quieting of Title cases (and Injunction), and that his allegation in his affidavit that he
neither authorized Carlos Bunag to include him in the Quieting of Title case nor was he
(Mariano) informed thereof, leaves too much to be desired and that same was merely intended
for delay. As regards the non-inclusion of private respondent Rolando Bunag in the case for
Quieting of Title but who was a party in the Ejectment case (as well as in the Injunction case),
they claim that same was in preparation for this stage of the proceedings. They added that
insofar as identity of causes of action is concerned, it cannot be denied that the ownership and
its concomitant right of possession are the issues in the cases for Quieting of Title, Injunction
and Annulment of Title.
In their comment,8 private respondents Rolando Bunag and Monina Luzong Vda. de
Bunag9 maintain that the public respondent did not err when it held that there was no res
judicata in the instant case and that the disposition of the case should not be based on
technicalities.
The question to be resolved is: Does res judicata apply in the case at bar?
Under the rule of res judicata, also known as "bar by prior judgment," a final judgment or order
on the merits, rendered by a Court having jurisdiction of the subject matter and of the parties,
is conclusive in a subsequent case between the same parties and their successor-in-interest by
title subsequent to the commencement of the action or special proceeding, litigating for the
same thing and under the same title and in the same capacity. The requisites essential for the
application of the principle are: (1) there must be a final judgment or order; (2) said judgment
or order must be on the merits; (3) the Court rendering the same must have jurisdiction on the
subject matter and the parties; and (4) there must be between the two cases identity of parties,
identity of subject matter, and identity of causes of action. 10
Petitioners claim res judicata applies in this case because all the elements thereof are present.
On the other hand, private respondents argue the contrary alleging that the second and fourth
elements are lacking.
There being no dispute as to the presence of the first and third elements, we now determine if
the second and fourth elements are attendant in the case.
On the second element, private respondents argue that the dismissal of Civil Case No. 1600 (for
Quieting of Title) was not a dismissal on the merits. The dismissal of this case, they claim, will
not bar the filing of the instant case (Civil Case No. 2583-02 for Annulment of Title) because
there was neither litigious consideration of the evidence nor any stipulations submitted by the
parties at the trial. In fact, there was no pre-trial conference and that after four years of court
inactivity, the case was dismissed for failure to prosecute.11
Their argument does not hold water. Section 3 of Rule 17 of the 1997 Rules of Civil Procedure
provides:
Section 3. Dismissal due to fault of plaintiff. - If, for no justifiable cause, the plaintiff fails to
appear on the date of the presentation of his evidence in chief on the complaint, or to
prosecute his action for an unreasonable length of time, or to comply with these Rules or any
order of the court, the complaint may be dismissed upon motion of the defendant or upon the
court's own motion, without prejudice to the right of the defendant to prosecute his
counterclaim in the same or in a separate action. This dismissal shall have the effect of an
adjudication upon the merits, unless otherwise declared by the court. 12
The rule enumerates the instances where the complaint may be dismissed due to plaintiff's
fault: (1) if he fails to appear on the date for the presentation of his evidence in chief; (2) if he
fails to prosecute his action for an unreasonable length of time; or (3) if he fails to comply with
the rules or any order of the court. Once a case is dismissed for failure to prosecute, this has
the effect of an adjudication on the merits and is understood to be with prejudice to the filing
of another action unless otherwise provided in the order of dismissal. In other words, unless
there be a qualification in the order of dismissal that it is without prejudice, the dismissal
should be regarded as an adjudication on the merits and is with prejudice. 13 The order
dismissing Civil Case No. 1600 reads:
For failure of the plaintiffs as well as counsel to appear on several settings despite due notices,
precisely for the reception of plaintiffs' evidence, upon motion of the defendant through Atty.
Mark Arcilla, this case is dismissed for failure to prosecute. 14
It is clear from the afore-mentioned order that said case was dismissed, upon petitioners'
motion, for failure of private respondents and their counsel to attend several scheduled
hearings for the presentation of their evidence. Since the order did not contain a qualification
whether same is with or without prejudice, following Section 3, it is deemed to be with
prejudice and shall have the effect of an adjudication on the merits. A ruling based on a motion
to dismiss, without any trial on the merits or formal presentation of evidence, can still be a
judgment on the merits.15
We now go to the fourth element - identity of parties, subject matter and cause of action.
Petitioners, citing jurisprudence, argue that res judicata is not defeated by a minor difference of
parties, as it does not require absolute but only substantial identity of parties 16 in light of the
fact that three prior cases before the instant case have been decided in their favor against
substantially the same parties over the same subject matter and cause of action.lavvphil.ñe+
Public respondent ruled there was no identity of parties for two reasons: (1) Private respondent
Mariano Bunag was not a party litigant in the Quieting of Title 17 case because he denied in an
affidavit that he authorized Carlos Bunag to sign the Verified Complaint and to make him a
party thereof; (2) Private respondent Rolando Bunag was not made a party in the Quieting of
Title case.
Private respondent Mariano "Boy" Bunag's claim that the Quieting of Title case was filed
without his knowledge does not inspire belief. In the decision of the trial court in Civil Case No.
4365 (for Unlawful Detainer), it is very clear that the defendants in said case that included both
private respondents, have knowledge of the pendency of the Quieting of Title case. A portion of
the decision18 reads:
Defendants claim of ownership of the property involved in this case which is now pending with
the Regional Trial Court of Gapan, Nueva Ecija (paragraph 3, Pre-Trial brief of defendants)
where the issue of ownership is the subject of the proceedings x x x.
It was the defendants, through their trial brief, that informed the court hearing the ejectment
case that a case (Civil Case No. 1600 for Quieting of Title) is pending where the issue of
ownership is the subject of the proceedings. Thus, as early as the pendency of the Ejectment
case, private respondents had known of the case for Quieting of Title. If he really did not
authorize Carlos Bunag to include him as one of the plaintiffs in the Quieting of Title case, he
could have easily questioned his inclusion therein at an earlier time. This, he did not do. He
executed his affidavit only on 14 April 2003 or more that three years after the case for Quieting
of Title has been dismissed, and after the Injunction case which he and private respondent
Rolando Bunag filed, was dismissed. It is evident that his affidavit is a mere afterthought
executed after his Motion for Reconsideration in the injunction case was denied because the
court gave no weight on his counsel's allegation that he (Mariano Bunag) was unaware of the
complaint signed and filed by Carlos Bunag. It is too late in the day for him to claim lack of
knowledge. It is very clear that the execution of the affidavit is to make it appear that there is
no identity of parties in the instant case and in the case for Quieting of Title.
Private respondents add that since Rolando Bunag was not a party in the Quieting of Title case,
the dismissal of said case will not bind him and thus not bar the filing of the instant case.
We do not agree. The principle of res judicata may not be evaded by the mere expedient of
including an additional party to the first and second action. Only substantial identity is
necessary to warrant the application of res judicata. The addition or elimination of some parties
does not alter the situation. There is substantial identity of parties when there is a community
of interest between a party in the first case and a party in the second case albeit the latter was
not impleaded in the first case.19
In the case at bar, it is apparent that from the face of the complaint for Quieting of Title, private
respondent Rolando Bunag was not a party therein as his name does not appear in the title.
This, notwithstanding, his claim and that of the plaintiffs therein, which included private
respondent Mariano Bunag, are the same - to be declared the true owners of the parcel of land
covered by Original Certificate of Title (OCT) No. 22262 and Transfer Certificate of Title (TCT)
No. 67161 of the Registry of Deeds of Nueva Ecija. Private respondent Rolando Bunag and the
plaintiffs are all heirs of the alleged owners of the parcel of land covered by OCT No. 22262.
Private respondent Rolando Bunag, though not a party therein, shared an identity of interest
from which flowed an identity of relief sought, namely, to declare them the true owners of the
parcel of land covered by OCT No. 22262 and TCT No. 67161. Such identity of interest is
sufficient to make them privy-in-law, thereby satisfying the requisite of substantial identity of
parties.
As regards the identity of subject matter, we find that there is. In both Civil Case No. 1600 (for
Quieting of Title) and Civil Case No. 2583 (for Annulment of Title), what is involved is one and
the same parcel of land covered by TCT No. 67161.
We likewise rule that there is identity of causes of action. Hornbook is the rule that identity of
causes of action does not mean absolute identity. Otherwise, a party could easily escape the
operation of res judicata by changing the form of the action or the relief sought. The test to
determine whether the causes of action are identical is to ascertain whether the same evidence
will sustain both actions, or whether there is an identity in the facts essential to the
maintenance of the two actions. If the same facts or evidence would sustain both, the two
actions are considered the same, and a judgment in the first case is a bar to the subsequent
action.20 In Stilianopulos v. The City of Legaspi,21 this Court had this to say:
The underlying objectives or reliefs sought in both the quieting-of-title and the annulment-of-
title cases are essentially the same -- adjudication of the ownership of the disputed lot and
nullification of one of the two certificates of title. Thus, it becomes readily apparent that the
same evidence or set of facts as those considered in the quieting-of-title case would also be
used in this Petition.
The difference in form and nature of the two actions is immaterial and is not a reason to
exempt petitioner from the effects of res judicata. The philosophy behind this rule prohibits the
parties from litigating the same issue more than once. When a right or fact has been judicially
tried and determined by a court of competent jurisdiction or an opportunity for such trial has
been given, the judgment of the court, as long as it remains unreversed, should be conclusive
upon the parties and those in privity with them. Verily, there should be an end to litigation by
the same parties and their privies over a subject, once it is fully and fairly adjudicated.
Civil Case No. 1600 was for Quieting of Title, while Civil Case No. 2583 is for Annulment of Title
with Damages. The two cases are different only in the form of action but an examination of the
allegations in the second case would reveal that the issue raised - ownership of the land -- and
the relief sought - be declared as owner and TCTs be issued in their names -- are substantially
the same. The evidence required to substantiate their claims are likewise the same. The
proceedings in the instant case, if permitted to continue, would entail the presentation of
evidence which should have been adduced in the case for Quieting of Title. The case for
Annulment of Title is simply a second cycle of review involving a subject matter that has already
been decided with finality in the Quieting of Title case.
Finally, private respondents ask that the instant case be not decided based on technicalities, for
substantial justice demands that technicalities should not be allowed to prevail over the
substantive right of a party litigant.lavvphil.ñe+
We find no reason not to adhere to the doctrine of res judicata. A case for Quieting of Title had
been filed for the purpose of determining the ownership of the subject land, but same was
dismissed because the plaintiffs therein failed to attend the scheduled hearings for the
presentation of their evidence. As above discussed, the dismissal was an adjudication on the
merits. They had all the opportunity to present all the evidence for their cause but they failed
to do so. It is undeniable that there was no denial of due process in this case.lavvphil.ñe+
The doctrine of res judicata is a rule which pervades every well-regulated system of
jurisprudence and is founded upon two grounds embodied in various maxims of the common
law, namely: (1) public policy and necessity, which makes it to the interest of the State that
there should be an end to litigation - republicae ut sit litium, and (2) the hardship on the
individual that he should be vexed twice for the same cause - nemo debet bis vexari et eadem
causa. A contrary doctrine would subject the public peace and quiet to the will and neglect of
individuals and prefer the gratification of the litigious disposition on the part of suitors to the
preservation of the public tranquility and happiness.22 lavvphil.ñe+
WHEREFORE, premises considered, the petition is GRANTED. The decision of the Court of
Appeals dated 19 March 2004 and its resolution dated 29 June 2004 are REVERSED and SET
ASIDE. Civil Case No. 2583-02 for Annulment of Title with Damages, pending before Branch 35
of the Regional Trial Court of Gapan City, Nueva Ecija, is herby ordered DISMISSED. With costs.
SO ORDERED.
 FIRST DIVISION
G.R. No. 223610, July 24, 2017
CONCHITA S. UY, CHRISTINE UY DY, SYLVIA UY SY, JANE UY TAN, JAMES LYNDON S. UY, IRENE
S. UY,* ERICSON S. UY, JOHANNA S. UY, AND JEDNATHAN S. UY, Petitioners, v. CRISPULO DEL
CASTILLO, SUBSTITUTED BY HIS HEIRS PAULITA MANATAD-DEL CASTILLO, CESAR DEL
CASTILLO, AVITO DEL CASTILLO, NILA C. DUEÑAS, NIDA C. LATOSA, LORNA C. BERNARDO, GIL
DEL CASTILLO, LIZA C. GUNGOB, ALMA DEL CASTILLO, AND GEMMA DEL
CASTILLO, Respondents.
DECISION
PERLAS-BERNABE, J.:
1
Before the Court is a petition for review on certiorari  filed by petitioner Conchita S. Uy
(Conchita) and her children, petitioners Christine Uy Dy, Sylvia Uy Sy, Jane Uy Tan, James
Lyndon S. Uy, Irene S. Uy, Ericson S. Uy (Ericson), Johanna S. Uy, and Jednathan S. Uy (Uy
siblings; collectively, petitioners), assailing the Decision 2 dated May 26, 2015 and the
Resolution3 dated February 22, 2016 of the Court of Appeals (CA) in CA G.R. SP No. 07120,
which affirmed the twin Orders4 dated December 9, 2011 and the Order5 dated May 17, 2012 of
the Regional Trial Court of Mandaue City, Branch 55 (RTC) in Civil Case No. MAN-2797, denying
petitioners' Omnibus Motion,6 motion to quash the writ of execution,7 and their subsequent
motion for reconsideration.8
The Facts

The present case is an offshoot of an action9 for quieting of title, reconveyance, damages, and
attorney's fees involving a parcel of land, known as Lot 791 and covered by Transfer Certificate
of Title (TCT) No. 29129,10 filed by Crispulo Del Castillo (Crispulo) against Jaime Uy (Jaime) and
his wife, Conchita, on November 12, 1996, docketed as Civil Case No. MAN-2797 (Quieting of
Title Case).11 However, since Jaime had died six (6) years earlier in 1990, 12 Crispulo amended his
complaint13 and impleaded Jaime's children, i.e., the Uy siblings, as defendants.14 Meanwhile,
Crispulo died15 during the pendency of the action and hence, was substituted by his heirs,
respondents Paulita Manalad-Del Castillo, Cesar Del Castillo, Avito Del Castillo, Nila C. Duenas,
Nida C. Latosa, Lorna C. Bernardo, Gil Del Castillo, Liza C. Gungob, Alma Del Castillo, and
Gemma Del Castillo (respondents).16

After due proceedings, the RTC rendered a Decision17 dated April 4, 2003 (RTC Decision) in
respondents' favor, and accordingly: (a) declared them as the true and lawful owners of Lot
791; (b) nullified Original Certificate of Title No. 576,18 as well as TCT No. 29129; and (c) ordered
petitioners to pay respondents moral damages and litigation costs in the amount of P20,000.00
each, as well as attorney's fees equivalent to twenty-five percent (25%) of the zonal value of Lot
791.19 Aggrieved, petitioners appealed before the CA,20 and subsequently, to the Court, but the
same were denied for lack of merit.21 The ruling became final and executory on April 8, 2010,
thus, prompting the Court to issue an Entry of Judgment22 dated May 4, 2010.

On August 17, 2010, respondents filed a Motion for Issuance of Writ of Execution, 23 manifesting
therein that since the zonal value of Lot 791 at that time was P3,500.00 per square meter
(sqm.) and that Lot 791 covers an area of 15,758 sqm., the total zonal value of Lot 791 was
P55,153,000.00.24 Hence, the attorney's fees, computed at twenty-five percent (25%) thereof,
should be pegged at P13,788,250.00.25

Acting on the said motion, the RTC ordered26 petitioners to file their comment or opposition
thereto, which they failed to comply.27 Accordingly, in an Order28 dated November 22, 2010, the
RTC granted the motion and ordered the issuance of a writ of execution. On December 13,
2010, a Writ of Execution29 was issued, to which the sheriff issued a Notice of
Garnishment30 seeking to levy petitioners' properties in an amount sufficient to cover for the
P13,788,250.00 as attorney's fees and P20,000.00 each as moral damages and litigation costs.

Threatened by the Notice of Garnishment, petitioners filed an Omnibus Motion 31 praying that
the writ of execution be quashed and set aside, and that a hearing be conducted to re-compute
the attorney's fees.32 Petitioners maintained that the Writ of Execution is invalid because it
altered the terms of the RTC Decision which did not state that the zonal value mentioned
therein referred to the zonal value of the property at the time of execution. 33 Before the RTC
could act upon petitioners' Omnibus Motion, they filed a Motion to Quash Writ of Execution on
Jurisdictional Ground(s) (motion to quash),34 claiming that the RTC had no jurisdiction over the
Uy siblings in the Quieting of Title Case as they were never served with summons in relation
thereto.35
The RTC Proceedings

On December 9, 2011, the RTC issued two (2) orders: (a) one granting petitioners' Omnibus
Motion, nullifying the Notice of Garnishment, and setting a hearing to determine the proper
computation of the award for attorney's fees;36 and (b) another denying their motion to quash,
since they never raised such jurisdictional issue in the proceedings a quo.37

On January 20, 2012, a hearing was conducted for the determination of attorney's
fees.38 Thereafter, the parties were ordered to submit their respective position papers, 39 to
which respondents complied with,40 presenting the following alternative options upon which to
base the computation of attorney's fees: (a) P3,387,970.00, equivalent to twenty-five percent
(25%) of the zonal value of Lot 791 in 1996, the year when the Quieting of Title Case was filed;
(b) P11,424,550.00, equivalent to twentyfive percent (25%) of the zonal value of Lot 791 in
2003, the year when the RTC rendered its Decision in the same case; or (c) P15,758,000.00,
equivalent to twenty-five percent (25%) of the zonal value of Lot 791 in 2010, the year when
the RTC Decision became final and executory.41

On the other hand, instead of filing the required position paper, petitioners filed a Consolidated
Motion for Reconsideration42 of the RTC's December 9, 2011 twin Orders. In said motion,
petitioners contended that the RTC failed to definitely rule on the validity of the writ of
execution, and that it erred in holding that the RTC Decision was already final and executory
despite the absence of summons on the Uy siblings.43

In an Order44 dated May 17, 2012, the RTC: (a) pegged the attorney's fees at
P3,387,970.00,45 using the zonal value of Lot 791 in 1996, the year when the Quieting of Title
Case was instituted, it being the computation least onerous to petitioners; and (b) denied
petitioners' Consolidated Motion for Reconsideration for lack of merit.

Dissatisfied, petitioners filed a petition for certiorari46 with the CA, assailing the RTC's twin
Orders dated December 9, 2011 and the Order dated May 17, 2012. Petitioners argued that
instead of just declaring the Notice of Garnishment void, the RTC should have also declared the
writ of execution void because the Uy siblings were never served with summons; and like the
Notice of Garnishment, the Writ of Execution also altered the terms of the RTC Decision.
Petitioners further added that the writ of execution was void because it made them liable
beyond their inheritance from Jaime. They maintain that the estate of Jaime should instead be
held liable for the adjudged amount and that respondents should have brought their claim
against the estate, in accordance with Section 20, Rule 3 of the Rules of Court. 47
The CA Ruling

In a Decision48 dated May 26, 2015, the CA affirmed the assailed Orders of the RTC. The CA
found no merit in the claim that the Uy siblings were never served with summons, pointing out
that in a Manifestation/Motion49 dated November 26, 1997, their counsel in the trial
proceedings, Atty. Alan C. Trinidad (Atty. Trinidad), stated that petitioners received the
summons with a copy of the amended complaint.50 It likewise refused to give credence to
petitioners' denial of Atty. Trinidad's representation, observing that one of the Uy siblings,
Ericson, even testified in court with the former's assistance, and that none of them showed any
concern or apprehension before the court, which they would have if indeed Atty. Trinidad was
not authorized to represent them.51

Anent petitioners' argument that they cannot be held personally liable with their separate
property for Jaime's liability and that respondents should have filed a claim against Jaime's
estate in accordance with Section 20, Rule 3 of the Rules of Court, the CA held that such
provision only applies to contractual money claims and not when the subject matter is some
other relief and the collection of any amount is merely incidental thereto, such as by way of
damages, as in this case.52 Besides, petitioners had all the opportunity to raise such perceived
error when they elevated the case to the CA and to this Court, but they did not. 53 Following the
principle of finality of judgment, the CA can no longer entertain such assignment of errors. 54

With respect to the validity of the writ of execution, the CA ruled that since the Writ of
Execution made express reference to the RTC Decision without adding anything else, the same
was valid, unlike the Notice of Garnishment which expressly sought to levy P13,788,250.00 in
attorney's fees and, in the process, exceeded the purview of the said Decision. 55

Undaunted, petitioners moved for reconsideration,56 which was, however, denied by the CA in

its Resolution57 dated February 22, 2016; hence, the present petition.
The Issue Before the Court
The issue for the Court's resolution is whether or not the CA correctly upheld the twin Orders
dated December 9, 2011 and the Order dated May 17, 2012 of the RTC.
The Court's Ruling

The petition is partly meritorious.

At the outset, it is well to reiterate that petitioners are resisting compliance with the ruling in
the Quieting of Title Case, on the grounds that: (a) they were never served with summons in
relation thereto; and (b) they were merely impleaded as substitutes to Jaime therein, and as
such, respondents should have proceeded against his estate instead, pursuant to Section 20,
Rule 3 of the Rules of Court. However, a judicious review of the records would reveal that such
contentions are untenable, as will be discussed hereunder.

Anent petitioners' claim that they were never served with summons, the CA correctly pointed
out that in the November 26, 1997 Manifestation/Motion, 58 petitioners, through their counsel,
Atty. Trinidad, explicitly stated, among others, that they "received the Summons with a copy of
the Second Amended Complaint" and that "the Answer earlier filed serves as the Answer to the
Second Amended Complaint."59 Having admitted the foregoing, petitioners cannot now assert
otherwise. "It is settled that judicial admissions made by the parties in the pleadings or in the
course of the trial or other proceedings in the same case are conclusive and do not require
further evidence to prove them. They are legally binding on the party making it, except when it
is shown that they have been made through palpable mistake or that no such admission was
actually made, neither of which was shown to exist in this case." 60

Assuming arguendo that petitioners did not receive summons for the amended complaint, they
were nonetheless deemed to have voluntarily submitted to the RTC's jurisdiction by filing an
Answer61 to the amended complaint and actively participating in the case.62 In fact, one of the
petitioners and Uy siblings, Ericson, was presented as a witness for the defense. 63 Moreover,
petitioners appealed the adverse RTC ruling in the Quieting of Title Case all the way to the
Court. It is settled that the active participation of the party against  whom the action was
brought, is tantamount to an invocation of the court's jurisdiction and a willingness to abide by
the resolution of the case, and such will bar said party from later on impugning the court's
jurisdiction.64 After all, jurisdiction over the person of the defendant in civil cases is obtained
either by a valid service of summons upon him or by his voluntary submission to the court's
authority.65

In this regard, petitioners cannot also deny Atty. Trinidad's authority to represent them. As
mentioned earlier, one of the petitioners, Ericson, even testified with the assistance of Atty.
Trinidad.66 Indeed, if Atty. Trinidad was not authorized to represent them, the natural reaction
for petitioners was to exhibit concern. Based on the records, however, there is no indication
that any of the petitioners or Ericson made even the slightest objections to Atty. Trinidad's
representation. This only confirms the CA's finding that such denial was a mere afterthought
and a desperate attempt to undo a final and executory judgment against them.67
As to petitioners' contention that respondents should have proceeded against Jaime's estate
pursuant to Section 20, Rule 3 of the Rules of Court, it is well to point out that based on the
records, the Uy siblings were not merely substituted in Jaime's place as defendant; rather, they
were impleaded in their personal capacities. Under Section 16, Rule 3 of the Rules of Court,
substitution of parties takes place when the party to the action dies pending the resolution of
the case and the claim is not extinguished, viz.:chanRoblesvirtualLawlibrary
Section 16. Death of party; duty of counsel. - Whenever a party to a pending action dies, and
the claim is not thereby extinguished, it shall be the duty of his counsel to inform the court
within thirty (30) days after such death of the fact thereof, and to give the name and address of
his legal representative or representatives. Failure of counsel to comply with his duty shall be a
ground for disciplinary action.

The heirs of the deceased may be allowed to be substituted for the deceased, without
requiring the appointment of an executor or administrator and the court may appoint a
guardian ad litem for the minor heirs.

The court shall forthwith order said legal representative or representatives to appear and be
substituted within a period of thirty (30) days from notice.

If no legal representative is named by the counsel for the deceased party, or if the one so
named shall fail to appear within the specified period, the court may order the opposing party,
within a specified time to procure the appointment of an executor or administrator for the
estate of the deceased and the latter shall immediately appear for and on behalf of the
deceased. The court charges in procuring such appointment, if defrayed by the opposing party,
may be recovered as costs. (Emphases supplied)
Here, Jaime died on March 4, 1990,68 or six (6) years be(ore private respondents filed the
Quieting of Title Case. Thus, after Conchita filed an Answer69 informing the RTC of Jaime's death
in 1990, the complaint was amended70 to implead the Uy siblings. Accordingly, the Rules of
Court provisions on substitution upon the death of a party do not apply and the Uy siblings
were not merely substituted in place of Jaime in the Quieting of Title Case. Instead, they were
impleaded in their personal capacities.71 In this regard, petitioners' argument that they cannot
be held solidarily liable for the satisfaction of any monetary judgment or award must
necessarily fail.72

In this light, petitioners can no longer invoke Section 20, Rule 3 of the Rules of Court, which
reads:chanRoblesvirtualLawlibrary
Section 20. Action and contractual money claims. - When the action is for recovery of money
arising from contract, express or implied, and the defendant dies before entry of final
judgment in the court in which the action was pending at the time of such death, it shall not
be dismissed but shall instead be allowed to continue until entry of final judgment. A favorable
judgment obtained by the plaintiff therein shall be enforced in the manner especially provided
in these Rules for prosecuting claims against the estate of a deceased person. (Emphasis
supplied)
A cursory reading of the foregoing provision readily shows that like Section 16, Rule 3 of the
Rules of Court, it applies in cases where the defendant dies while the case is pending and
not before the case was even filed in court, as in this case.

At this point, the Court notes that if petitioners truly believed that Jaime's estate is the proper
party to the Quieting of Title Case, they could and should have raised the lack of cause of action
against them at the earliest opportunity. Obviously, they did not do so; instead, they actively
participated in the case, adopted the answer earlier filed by Conchita, and even litigated the
case all the way to the Court. Petitioners cannot now question the final and executory
judgment in the Quieting of Title Case because it happened to be adverse to them.

Time and again, the Court has repeatedly held that "a decision that has acquired finality
becomes immutable and unalterable, and may no longer be modified in any respect, even if the
modification is meant to correct erroneous conclusions of fact and law, and whether it be made
by the court that rendered it or by the Highest Court of the land. This principle, known as the
doctrine of immutability of judgment, has a two-fold purpose, namely: (a) to avoid delay in the
administration of justice and thus, procedurally, to make orderly the discharge of judicial
business; and (b) to put an end to judicial controversies, at the risk of occasional errors, which is
precisely why courts exist. Verily, it fosters the judicious perception that the rights and
obligations of every litigant must not hang in suspense for an indefinite period of time. As such,
it is not regarded as a mere technicality to be easily brushed aside, but rather, a matter of
public policy which must be faithfully complied." 73 However, this doctrine "is not a hard and fast
rule as the Court has the power and prerogative to relax the same in order to serve the
demands of substantial justice considering: (a) matters of life, liberty, honor, or property; (b)
the existence of special or compelling circumstances; (c) the merits of the case; (d) a cause not
entirely attributable to the fault or negligence of the party favored by the suspension of the
rules; (e) the lack of any showing that the review sought is merely frivolous and dilatory; and (f)
that the other party will not be unjustly prejudiced thereby." 74

In this case, a punctilious examination of the records, especially the Amended Complaint 75 in
the Quieting of Title Case reveals that the disputed Lot 791 was covered by TCT No. 29129 in
the names of Jaime and Conchita. Thus, while the Uy siblings were indeed impleaded in their
personal capacities, the fact remains that they are merely succeeding to Jaime's interest in the
said lot and title. As successors-heirs, they cannot be personally bound to respond to the
decedent's obligations beyond their distributive shares.76 Verily, this is a special or a compelling
circumstance which would necessitate the relaxation of the doctrine of immutability of
judgment, so as to somehow limit the liability of the Uy siblings in the payment of the monetary
awards in favor of respondents in the Quieting of Title Case - i.e., moral damages and litigation
costs in the amount of P20,000.00 each, as well as attorney's fees, equivalent to twenty-five
percent (25%) of the zonal value of Lot 79177 - within the value of their inherited shares,
notwithstanding the finality of the ruling therein.

In sum, while the courts a quo correctly ruled that the Uy siblings may be held answerable to
the monetary awards in the Quieting of Title Case, such liability cannot exceed whatever value
they inherited from their late father, Jaime. For this purpose, the RTC is tasked to ensure that
the satisfaction of the monetary aspect of the judgment in the Quieting of Title Case will not
result in the payment by the Uy siblings of an amount exceeding their inheritance from Jaime.
After all, the other party, i.e., respondents, shall not be unjustly prejudiced by the same since
Jaime's spouse, Conchita, is still alive and the rest of the monetary awards may be applied
against her, if need be.

WHEREFORE, the petition is PARTLY GRANTED. Accordingly, the Decision dated May 26, 2015
and the Resolution dated February 22, 2016 of the Court of Appeals in CA-G.R. SP No. 07120 are
hereby AFFIRMED with MODIFICATION limiting the adjudged monetary liability of petitioners
Christine Uy Dy, Sylvia Uy Sy, Jane Uy Tan, James Lyndon S. Uy, Irene S. Uy, Ericson S. Uy,
Johanna S. Uy, and Jednathan S. Uy to the total value of their inheritance from Jaime Uy.

SO ORDERED.
 FIRST DIVISION
[ G.R. No. 195834, November 09, 2016 ]
GUILLERMO SALVADOR, REMEDIOS CASTRO, REPRESENTED BY PAZ "CHIT" CASTRO, LEONILA
GUEVARRA, FELIPE MARIANO, RICARDO DE GUZMAN, VIRGILIO JIMENEZ, REPRESENTED BY
JOSIE JIMENEZ, ASUNCION JUAMIZ, ROLANDO BATANG, CARMENCITA SAMSON, AUGUSTO
TORTOSA, REPRESENTED BY FERNANDO TORTOSA, SUSANA MORANTE, LUZVIMINDA
BULARAN, LUZ OROZCO, JOSE SAPICO, LEONARDO PALAD, ABEL BAKING, REPRESENTED BY
ABELINA BAKING, GRACIANO ARNALDO, REPRESENTED BY LUDY ARNALDO, JUDITH HIDALGO,
AND IGMIDIO JUSTINIANO, CIRIACO MIJARES, REPRESENTED BY FREDEZWINDA MIJARES,
JENNIFER MORANTE, TERESITA DIALA, AND ANITA P. SALAR, PETITIONERS, V. PATRICIA, INC.,
RESPONDENT. THE CITY OF MANILA AND CIRIACO C. MIJARES, INTERVENORS-APPELLEES.

DECISION
BERSAMIN, J.:
Jurisdiction over a real action is determined based on the allegations in the complaint of the
assessed value of the property involved. The silence of the complaint on such value is ground to
dismiss the action for lack of jurisdiction because the trial court is not given the basis for making
the determination.
The Case
For review is the decision promulgated on June 25, 2010[1] and the resolution promulgated on
February 16, 2011 in CA-G.R. CV No. 86735,[2] whereby the Court of Appeals (CA) dismissed the
petitioners' complaint in Civil Case No. 96-81167, thereby respectively reversing and setting
aside the decision rendered on May 30, 2005 by the Regional Trial Court (RTC), Branch 32, in
Manila,[3] and denying their motion for reconsideration.
Antecedents
The CA adopted the summary by the RTC of the relevant factual and procedural antecedents, as
follows:
This is an action for injunction and quieting of title to determine who owns the property
occupied by the plaintiffs and intervenor, Ciriano C. Mijares.
Additionally, to prevent the defendant Patricia Inc., from evicting the plaintiffs from their
respective improvements along Juan Luna Street, plaintiffs applied for a preliminary injunction
in their Complaint pending the quieting of title on the merits.
The complaint was amended to include different branches of the Metropolitan Trial Courts of
Manila. A Complaint-in-Intervention was filed by the City of Manila as owner of the land
occupied by the plaintiffs. Another Complaint-in-Intervention by Ciriano Mijares was also filed
alleging that he was similarly situated as the other plaintiffs.
A preliminary injunction was granted and served on all the defendants.
Based on the allegations of the parties involved, the main issue to be resolved is whether the
improvements of the plaintiffs stand on land that belongs to Patricia Inc., or the City of
Manila. Who owns the same? Is it covered by a Certificate of Title?
All parties agreed and admitted in evidence by stipulation as to the authenticity of the following
documents:
(1) Transfer Certificate of Title No. 44247 in the name of the City of Manila;
(2) Transfer Certificate of Title No. 35727 in the name of Patricia Inc.;
 (3) Approved Plan PSD-38540; and
(4) Approved Subdivision Plan PCS-3290 for Ricardo Manotok.
The issue as to whether TCT 35727 should be cancelled as prayed for by the plaintiffs and
intervenor, Ciriano C. Mijares is laid to rest by agreement of the parties that this particular
document is genuine and duly executed. Nonetheless, the cancellation of a Transfer Certificate
of Title should be in a separate action before another forum.
Since the Transfer Certificates of Title of both Patricia Inc. and the City of Manila are admitted
as genuine, the question now is: Where are the boundaries based on the description in the
respective titles?[4]
To resolve the question about the boundaries of the properties of the City of Manila and
respondent Patricia, Inc., the RTC appointed, with the concurrence of the parties, three
geodetic engineers as commissioners, namely: Engr. Rosario Mercado, Engr. Ernesto Pamular
and Engr. Delfin Bumanlag.[5] These commissioners ultimately submitted their reports.
On May 30, 2005, the RTC rendered judgment in favor of the petitioners and against Patricia,
Inc., permanently enjoining the latter from doing any act that would evict the former from their
respective premises, and from collecting any rentals from them. The RTC deemed it more sound
to side with two of the commissioners who had found that the land belonged to the City of
Manila, and disposed:
WHEREFORE, it is hereby ORDERED:
1. Defendant Patricia Inc. and other person/s claiming under it, are PERMANENTLY
ENJOINED to REFRAIN and DESIST from any act of EVICTION OR EJECTMENT of the
PLAINTIFFS in the premises they occupy;
2. Defendant Patricia Inc. STOP COLLECTING any rentals from the plaintiffs who may seek
reimbursement of previous payments in a separate action subject to the ownership of the
City of Manila and;
3. Attorney's fees of P10,000.00 to each plaintiff and intervenor, Ciriano Mijares;
P20,000.00 to the City of Manila. (emphasis ours)
No pronouncement as to costs.
SO ORDERED.[6]
Decision of the CA
On appeal, the CA, in CA-G.R. CV No. 86735, reversed the RTC's judgment, [7] and dismissed the
complaint. The CA declared that the petitioners were without the necessary interest, either
legal or equitable title, to maintain a suit for quieting of title; castigated the RTC for acting like a
mere rubber stamp of the majority of the commissioners; opined that the RTC should have
conducted hearings on the reports of the commissioners; ruled as highly improper the
adjudication of the boundary dispute in an action for quieting of title; and decreed:
WHEREFORE, premises considered, We hereby REVERSE and SET ASIDE the decision dated May
30, 2005 of the Regional Trial Court of Manila, Branch 32. Civil Case No. 96-81167 is hereby
DISMISSED for utter want of merit. Accordingly, the questioned order enjoining Patricia and all
other person/s acting on its stead (sic) to refrain and desist from evicting or ejecting
plaintiffs/appellees in Patricia's own land and from collecting rentals is LIFTED effective
immediately.
No costs.
SO ORDERED.[8]
The CA denied the motions for reconsideration of the petitioners and intervenor Mijares
through the assailed resolution of February 16, 2011.[9]
Hence, this appeal by the petitioners.
Issues
The petitioners maintain that the CA erred in dismissing the complaint, arguing that the parties
had openly raised and litigated the boundary issue in the RTC, and had thereby amended the
complaint to conform to the evidence pursuant to Section 5, Rule 10 of the Rules of Court; that
they had the sufficient interest to bring the suit for quieting of title because they had built their
improvements on the property; and that the RTC correctly relied on the reports of the majority
of the commissioners.
On its part, the City of Manila urges the Court to reinstate the decision of the RTC. It reprises
the grounds relied upon by the petitioners, particularly the application of Section 5, Rule 10 of
the Rules of Court.[10]
In response, Patricia, Inc. counters that the boundary dispute, which the allegations of the
complaint eventually boiled down to, was not proper in the action for quieting of title under
Rule 63, Rules of Court; and that Section 5, Rule 10 of the Rules of Court did not apply to vest
the authority to resolve the boundary dispute in the RTCC.[11]
In other words, did the CA err in dismissing the petitioners' complaint?
Ruling of the Court
The appeal lacks merit.
1.
Jurisdiction over a real action depends on
the assessed value of the property involved
as alleged in the complaint
The complaint was ostensibly for the separate causes of action for injunction and for quieting of
title. As such, the allegations that would support both causes of action must be properly stated
in the complaint. One of the important allegations would be those vesting jurisdiction in the
trial court.
The power of a court to hear and decide a controversy is called its jurisdiction, which includes
the power to determine whether or not it has the authority to hear and determine the
controversy presented, and the right to decide whether or not the statement of facts that
confer jurisdiction exists, as well as all other matters that arise in the case legitimately before
the court. Jurisdiction imports the power and authority to declare the law, to expound or to
apply the laws exclusive of the idea of the power to make the laws, to hear and determine
issues of law and of fact, the power to hear, determine, and pronounce judgment on the issues
before the court, and the power to inquire into the facts, to apply the law, and to pronounce
the judgment.[12]
But judicial power is to be distinguished from jurisdiction in that the former cannot exist
without the latter and must of necessity be exercised within the scope of the latter, not beyond
it.[13]
Jurisdiction is a matter of substantive law because it is conferred only by law, as distinguished
from venue, which is a purely procedural matter. The conferring law may be the Constitution,
or the statute organizing the court or tribunal, or the special or general statute defining the
jurisdiction of an existing court or tribunal, but it must be in force at the time of the
commencement of the action.[14] Jurisdiction cannot be presumed or implied, but must appear
clearly from the law or it will not be held to exist, [15] but it may be conferred on a court or
tribunal by necessary implication as well as by express terms.[16] It cannot be conferred by the
agreement of the parties;[17] or by the court's acquiescence;[18] or by the erroneous belief of the
court that it had jurisdiction;[19] or by the waiver of objections;[20] or by the silence of the parties.
[21]

The three essential elements of jurisdiction are: one, that the court must have cognizance of
the class of cases to which the one to be adjudged belongs; two, that the proper parties must
be present; and, three, that the point decided must be, in substance and effect, within the
issue. The test for determining jurisdiction is ordinarily the nature of the case as made by the
complaint and the relief sought; and the primary and essential nature of the suit, not its
incidental character, determines the jurisdiction of the court relative to it. [22]
Jurisdiction may be classified into original and appellate, the former being the power to take
judicial cognizance of a case instituted for judicial action for the first time under conditions
provided by law, and the latter being the authority of a court higher in rank to re-examine the
final order or judgment of a lower court that tried the case elevated for judicial review.
Considering that the two classes of jurisdiction are exclusive of each other, one must be
expressly conferred by law. One does not flow, nor is inferred, from the other. [23]
Jurisdiction is to be distinguished from its exercise. [24] When there is jurisdiction over the person
and subject matter, the decision of all other questions arising in the case is but an exercise of
that jurisdiction.[25] Considering that jurisdiction over the subject matter determines the power
of a court or tribunal to hear and determine a particular case, its existence does not depend
upon the regularity of its exercise by the court or tribunal.[26] The test of jurisdiction is whether
or not the court or tribunal had the power to enter on the inquiry, not whether or not its
conclusions in the course thereof were correct, for the power to decide necessarily carries with
it the power to decide wrongly as well as rightly. In a manner of speaking, the lack of the power
to act at all results in a judgment that is void; while the lack of the power to render an
erroneous decision results in a judgment that is valid until set aside.[27] That the decision is
erroneous does not divest the court or tribunal that rendered it of the jurisdiction conferred by
law to try the case.[28] Hence, if the court or tribunal has jurisdiction over the civil action,
whatever error may be attributed to it is simply one of judgment, not of jurisdiction; appeal,
not certiorari, lies to correct the error.[29]
The exclusive original jurisdiction of the RTC in civil cases is conferred and provided for in
Section 19 of Batas Pambansa Blg. 129 (Judiciary Reorganization Act of 1980), viz.:
Sec. 19. Jurisdiction in civil cases. - Regional Trial Courts shall exercise exclusive original
jurisdiction:
(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation;
(2) In all civil actions which involve the title to, or possession of, real property, or any interest
therein, except actions for forcible entry into and unlawful detainer of lands or buildings,
original jurisdiction over which is conferred upon Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts;
(3) In all actions in admiralty and maritime jurisdiction where he demand or claim exceeds
twenty thousand pesos (P20,000.00);
(4) In all matters of probate, both testate and intestate, where the gross value of the estate
exceeds twenty thousand pesos (P20,000.00);
(5) In all actions involving the contract of marriage and marital relations;
(6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or body
exercising judicial or quasi-judicial functions;
(7) In all civil actions and special proceedings falling within the exclusive original jurisdiction of a
Juvenile and Domestic Relations Court and of the Courts of Agrarian Relations as now provided
by law; and
(8) In all other cases in which the demand, exclusive of interest and costs or the value of the
property in controversy, amounts to more than twenty thousand pesos (P20,000.00).
For the purpose of determining jurisdiction, the trial court must interpret and apply the law on
jurisdiction in relation to the averments or allegations of ultimate facts in the complaint
regardless of whether or not the plaintiff is entitled to recover upon all or some of the claims
asserted therein.[30] Based on the foregoing provision of law, therefore, the RTC had jurisdiction
over the cause of action for injunction because it was one in which the subject of the litigation
was incapable of pecuniary estimation. But the same was not true in the case of the cause of
action for the quieting of title, which had the nature of a real action — that is, an action that
involves the issue of ownership or possession of real property, or any interest in real
property[31] — in view of the expansion of the jurisdiction of the first level courts under Republic
Act No. 7691, which amended Section 33(3) of Batas Pambansa Blg. 129 effective on April 15,
1994,[32] to now pertinently provide as follows:
Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal
Circuit Trial Courts in Civil Cases. -
Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts shall
exercise:
xxxx
(3) Exclusive original jurisdiction in all civil actions which involve title to, possession of, real
property, or any interest therein where the assessed value of the property or interest therein
does not exceed Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila,
where such assessed value does not exceeds (sic) Fifty thousand pesos (P50,000.00) exclusive
of interest, damages of whatever kind, attorneys fees, litigation expenses and costs: x x x
As such, the determination of which trial court had the exclusive original jurisdiction over the
real action is dependent on the assessed value of the property in dispute.
An action to quiet title is to be brought as a special civil action under Rule 63 of the Rules of
Court. Although Section 1 of Rule 63 specifies the forum to be "the appropriate Regional Trial
Court,"[33] the specification does not override the statutory provision on jurisdiction. This the
Court has pointed out in Malana v. Tappa,[34] to wit:
To determine which court has jurisdiction over the actions identified in the second paragraph of
Section 1, Rule 63 of the Rules of Court, said provision must be read together with those of the
Judiciary Reorganization Act of 1980, as amended.
It is important to note that Section 1, Rule 63 of the Rules of Court does not categorically
require that an action to quiet title be filed before the RTC. It repeatedly uses the word "may"-
that an action for quieting of title "may be brought under [the] Rule" on petitions for
declaratory relief, and a person desiring to file a petition for declaratory relief "may x x x bring
an action in the appropriate Regional Trial Court." The use of the word "may" in a statute
denotes that the provision is merely permissive and indicates a mere possibility, an opportunity
or an option.
In contrast, the mandatory provision of the Judiciary Reorganization Act of 1980, as amended,
uses the word shall and explicitly requires the MTC to exercise exclusive original
jurisdiction over all civil actions which involve title to or possession of real property where the
assessed value does not exceed P20,000.00, thus:
xxxx
As found by the RTC, the assessed value of the subject property as stated in Tax Declaration No.
02-48386 is only P410.00; therefore, petitioners Complaint involving title to and possession of
the said property is within the exclusive original jurisdiction of the MTC, not the RTC. [35]
The complaint of the petitioners did not contain any averment of the assessed value of the
property. Such failure left the trial court bereft of any basis to determine which court could
validly take cognizance of the cause of action for quieting of title. Thus, the RTC could not
proceed with the case and render judgment for lack of jurisdiction. Although neither the parties
nor the lower courts raised jurisdiction of the trial court in the proceedings, the issue did not
simply vanish because the Court can hereby motu proprio consider and resolve it now by virtue
of jurisdiction being conferred only by law, and could not be vested by any act or omission of
any party.[36]
2.
The joinder of the action for injunction
and the action to quiet title
was disallowed by the Rules of Court
Another noticeable area of stumble for the petitioners related to their having joined two causes
of action, i.e., injunction and quieting of title, despite the first being an ordinary suit and the
latter a special civil action under Rule 63. Section 5, Rule 2 of the Rules of Court disallowed the
joinder, viz.:
Section 5. Joinder of causes of action. — A party may in one pleading assert, in the alternative
or otherwise, as many causes of action as he may have against an opposing party, subject to the
following conditions:
(a) The party joining the causes of action shall comply with the rules on joinder of parties;
(b) The joinder shall not include special civil actions or actions governed by special rules;
(c) Where the causes of action are between the same parties but pertain to different venues or
jurisdictions, the joinder may be allowed in the Regional Trial Court provided one of the causes
of action falls within the jurisdiction of said court and the venue lies therein; and
(d) Where the claims in all the causes of action are principally for recovery of money, the
aggregate amount claimed shall be the test of jurisdiction.
Consequently, the RTC should have severed the causes of action, either upon motion or motu
proprio, and tried them separately, assuming it had jurisdiction over both. Such severance was
pursuant to Section 6, Rule 2 of the Rules of Court, which expressly provides:
Section 6. Misjoinder of causes of action. -- Misjoinder of causes of action is not a ground for
dismissal of an action. A misjoined cause of action may, on motion of a party or on the initiative
of the court, be severed and proceeded with separately. (n)
The refusal of the petitioners to accept the severance would have led to the dismissal of the
case conformably with the mandate of Section, Rule 17 of the Rules of Court, to wit:
Section 3. Dismissal due to fault of plaintiff. - If, for no justifiable cause, the plaintiff fails to
appear on the date of the presentation of his evidence in chief on the complaint, or to
prosecute his action for an unreasonable length of time, or to comply with these Rules or any
order of the court, the complaint may be dismissed upon motion of the defendant or upon the
court's own motion, without prejudice to the right of the defendant to prosecute his
counterclaim in the same or in a separate action. This dismissal shall have the effect of an
adjudication upon the merits, unless otherwise declared by the court. (3a)
3.
The petitioners did not show that they were
real parties in interest to demand
either injunction or quieting of title
Even assuming that the RTC had jurisdiction over the cause of action for quieting of title, the
petitioners failed to allege and prove their interest to maintain the suit. Hence, the dismissal of
this cause of action was warranted.
An action to quiet title or remove the clouds over the title is a special civil action governed by
the second paragraph of Section 1, Rule 63 of the Rules of Court. Specifically, an action for
quieting of title is essentially a common law remedy grounded on equity. The competent court
is tasked to determine the respective rights of the complainant and other claimants, not only to
put things in their proper place, to make the one who has no rights to said immovable respect
and not disturb the other, but also for the benefit of both, so that he who has the right would
see every cloud of doubt over the property dissipated, and he could afterwards without fear
introduce the improvements he may desire, to use, and even to abuse the property as he
deems best. But "for an action to quiet title to prosper, two indispensable requisites must
concur, namely: (1) the plaintiff or complainant has a legal or an equitable title to or interest in
the real property subject of the action; and (2) the deed, claim, encumbrance, or proceeding
claimed to be casting cloud on his title must be shown to be in fact invalid or inoperative
despite its prima facie appearance of validity or legal efficacy.[37]
The first requisite is based on Article 477 of the Civil Code which requires that the plaintiff must
have legal or equitable title to, or interest in the real property which is the subject matter of the
action. Legal title denotes registered ownership, while equitable title means beneficial
ownership,[38] meaning a title derived through a valid contract or relation, and based on
recognized equitable principles; the right in the party, to whom it belongs, to have the legal title
transferred to him.[39]
To determine whether the petitioners as plaintiffs had the requisite interest to bring the suit, a
resort to the allegations of the complaint is necessary. In that regard, the complaint pertinently
alleged as follows:
THE CAUSE OF ACTION
5. Plaintiffs are occupants of a parcel of land situated at Juan Luna Street, Gagalangin, Tondo
(hereinafter "subject property");
6. Plaintiffs and their predecessor-in-interest have been in open and notorious possession of
the subject property for more than thirty (30) years;
7. Plaintiffs have constructed in good faith their houses and other improvements on the subject
property;
8. The subject property is declared an Area for Priority Development (APD) under Presidential
Decree No. 1967, as amended;
9. Defendant is claiming ownership of the subject property by virtue of Transfer Certificate of
Title (TCT) No. 35727 of the Registry of Deeds for the City of Manila. x x x
10. Defendant's claim of ownership over the subject property is without any legal or factual
basis because, assuming but not conceding that the TCT No. 35727 covers the subject property,
the parcel of land covered by and embraced in TCT No. 35727 has already been sold and
conveyed by defendant and, under the law, TCT No. 35727 should have been cancelled;
11. By virtue of TCT No. 35727, defendant is evicting, is about to evict or threatening to evict
the plaintiffs from the said parcel of land;
12. Because of the prior sales and conveyances, even assuming but not conceding that the
subject property is covered by and embraced in Transfer Certificate of title No. 35727,
defendant cannot lawfully evict the plaintiffs from the subject property since it no longer owns
the subject property;
13. Any attempted eviction of the plaintiffs from the subject property would be without legal
basis and consequently, would only be acts of harassment which are contrary to morals, good
customs and public policy and therefore, plaintiffs are entitled to enjoin the defendant from
further harassing them;
14. Plaintiffs recently discovered that the subject property is owned by the City of Manila and
covered by and embraced in Transfer Certificate of Title No. 44247, a copy of which is attached
hereto as Annex "B", of the Registry of Deeds for the City of Manila;
15. TCT No. 35727 which is apparently valid and effective is in truth and in fact invalid,
ineffective, voidable or unenforceable, and constitutes a cloud on the rights and interests of the
plaintiffs over the subject property;
16. Plaintiffs are entitled to the removal of such cloud on their rights and interests over the
subject property;
17. Even assuming, but not admitting, that defendant owns the subject property, it cannot evict
the plaintiffs from the subject property because plaintiffs' right to possess the subject property
is protected by Presidential Decree No. 2016.
18. Even assuming, but not admitting, that defendant owns the subject property, it cannot evict
the plaintiffs from the subject property without reimbursing the plaintiffs for the cost of the
improvements made upon the subject property;
19. Because of defendant's unwarranted claim of ownership over the subject property and its
attempt to evict or disposses the plaintiffs from the subject property, plaintiffs experienced
mental anguish, serious anxiety, social humiliation, sleepless nights and loss of appetite for
which defendant should be ordered to pay each plaintiff the amount of P20,000.00 as moral
damages;
20. Because of defendant's unwarranted claim of ownership over the subject property and its
attempt to evict or disposses the plaintiffs from the subject property, plaintiffs were
constrained to litigate to protect their rights and interests, and hire services of a lawyer, for
which they should each be awarded the amount of P10,000.00.
21. The plaintiffs and the defendants are not required to undergo conciliation proceeding
before the Katarungan Pambarangay prior to the filing of this action.[40]
The petitioners did not claim ownership of the land itself, and did not show their authority or
other legal basis on which they had anchored their alleged lawful occupation and superior
possession of the property. On the contrary, they only contended that their continued
possession of the property had been for more than 30 years; that they had built their houses in
good faith; and that the area had been declared an Area for Priority Development (APD) under
Presidential Decree No. 1967, as amended. Yet, none of such reasons validly clothed them with
the necessary interest to maintain the action for quieting of title. For one, the authenticity of
the title of the City of Manila and Patricia, Inc. was not disputed but was even admitted by them
during trial. As such, they could not expect to have any right in the property other than that of
occupants whose possession was only tolerated by the owners and rightful possessors. This was
because land covered by a Torrens title cannot be acquired by prescription or by adverse
possession.[41] Moreover, they would not be builders entitled to the protection of the Civil
Code as builders in good faith. Worse for them, as alleged in the respondent's comments,
[42]
 which they did not deny, they had been lessees of Patricia, Inc. Such circumstances indicated
that they had no claim to possession in good faith, their occupation not being in the concept of
owners.
At this juncture, the Court observes that the fact that the area was declared an area for priority
development (APD) under Presidential Decree No. 1967, as amended, did not provide sufficient
interest to the petitioners. When an area is declared as an APD, the occupants would enjoy the
benefits provided for in Presidential Decree No. 1517 (Proclaiming Urban land Reform in the
Philippines and Providing for the Implementing Machinery Thereof). In Frilles v. Yambao,[43] the
Court has summarized the salient features of Presidential Decree No. 1517, thus:
P. D. No. 1517, which took effect on June 11, 1978, seeks to protect the rights of bona-fide
tenants in urban lands by prohibiting their ejectment therefrom under certain conditions, and
by according them preferential right to purchase the land occupied by them. The law covers all
urban and urbanizable lands which have been proclaimed as urban land reform zones by the
President of the Philippines. If a particular property is within a declared Area for Priority
Development and Urban Land Reform Zone, the qualified lessee of the said property in that
area can avail of the right of first refusal to purchase the same in accordance with Section 6 of
the same law. Only legitimate tenants who have resided for ten years or more on specific
parcels of land situated in declared Urban Land Reform Zones or Urban Zones, and who have
built their homes thereon, have the right not to be dispossessed therefrom and the right of
first refusal to purchase the property under reasonable terms and conditions to be
determined by the appropriate government agency. [Bold emphasis supplied]
Presidential Decree No. 1517 only granted to the occupants of APDs the right of first refusal,
but such grant was true only if and when the owner of the property decided to sell the
property. Only then would the right of first refusal accrue. Consequently, the right of first
refusal remained contingent, and was for that reason insufficient to vest any title, legal or
equitable, in the petitioners.
Moreover, the CA's adverse judgment dismissing their complaint as far as the action to quiet
title was concerned was correct. The main requirement for the action to be brought is that
there is a deed, claim, encumbrance, or proceeding casting cloud on the plaintiffs' title that is
alleged and shown to be in fact invalid or inoperative despite its prima facie appearance of
validity or legal efficacy, the eliminates the existence of the requirement. Their admission of the
genuineness and authenticity of Patricia, Inc.'s title negated the existence of such deed,
instrument, encumbrance or proceeding that was invalid, and thus the action must necessarily
fail.
4.
The petitioners did not have
a cause of action for injunction
The petitioners did not also make out a case for injunction in their favor.
The nature of the remedy of injunction and the requirements for the issuance of the injunctive
writ have been expounded in Philippine Economic Zone Authority v. Carantes,[44] as follows:
Injunction is a judicial writ, process or proceeding whereby a party is directed either to do a
particular act, in which case it is called a mandatory injunction or to refrain from doing a
particular act, in which case it is called a prohibitory injunction. As a main action, injunction
seeks to permanently enjoin the defendant through a final injunction issued by the court and
contained in the judgment. Section 9, Rule 58 of the 1997 Rules of Civil Procedure, as amended,
provides,
SEC. 9. When final injunction granted. If after the trial of the action it appears that the applicant
is entitled to have the act or acts complained of permanently enjoined, the court shall grant a
final injunction perpetually restraining the party or person enjoined from the commission or
continuance of the act or acts or confirming the preliminary mandatory injunction.
Two (2) requisites must concur for injunction to issue: (1) there must be a right to be
protected and (2) the acts against which the injunction is to be directed are violative of said
right. Particularly, in actions involving realty, preliminary injunction will lie only after the
plaintiff has fully established his title or right thereto by a proper action for the purpose.
[Emphasis Supplied]
Accordingly, the petitioners must prove the existence of a right to be protected. The records
show, however, that they did not have any right to be protected because they had established
only the existence of the boundary dispute between Patricia, Inc. and the City of Manila. Any
violation of the boundary by Patricia, Inc., if any, would give rise to the right of action in favor of
the City of Manila only. The dispute did not concern the petitioners at all.
5.
Section 5, Rule 10 of the Rules of Court
did not save the day for the petitioners
The invocation of Section 5, Rule 10 of the Rules of Court in order to enable the raising of the
boundary dispute was unwarranted. First of all, a boundary dispute should not be litigated in an
action for the quieting of title due to the limited scope of the action. The action for the quieting
of title is a tool specifically used to remove of any cloud upon, doubt, or uncertainty affecting
title to real property;[45] it should not be used for any other purpose. And, secondly, the
boundary dispute would essentially seek to alter or modify either the Torrens title of the City of
Manila or that of Patricia, Inc., but any alteration or modification either way should be initiated
only by direct proceedings, not as an issue incidentally raised by the parties herein. To allow the
boundary dispute to be litigated in the action for quieting of title would violate Section 48 [46] of
the Property Registration Decree by virtue of its prohibition against collateral attacks on Torrens
titles. A collateral attack takes place when, in another action to obtain a different relief, the
certificate of title is assailed as an incident in said action. [47] This is exactly what the petitioners
sought to do herein, seeking to modify or otherwise cancel Patricia, Inc.'s title.
WHEREFORE, the Court AFFIRMS the decision promulgated on June 25, 2010 by the Court of
Appeals in CA-G.R. CV No. 86735; and ORDERS the petitioners to pay the costs of suit.
SO ORDERED.
 SECOND DIVISION
G.R. No. 201289, May 30, 2016
SPOUSES ROLANDO AND SUSIE GOLEZ, Petitioners, v. HEIRS OF DOMINGO BERTULDO,
NAMELY: ERINITA BERTULDO-BERNALES, FLORENCIO BERTULDO, DOMINADOR BERTULDO,
RODEL BERTULDO AND ROGER BERTULDO, HEREIN REPRESENTED BY THEIR CO-HEIR AND
DULY APPOINTED ATTORNEY-IN-FACT, ERINITA BERNALES, Respondents.
DECISION
BRION, J.:
We resolve the petition for review on certiorari filed by petitioners-spouses Rolando and Susie
Golez (Sps. Golez) assailing the March 18, 2011 resolution1 and March 8, 2012 resolution2 of the
Court of Appeals (CA) in CA-G.R. CEB-SP No. 05741 on the ground that respondents Heirs of
Domingo Bertuldo (collectively referred to in this case as respondents) have no cause of action
for unlawful detainer.
The Facts

The dispute involves two neighboring unregistered parcels of land located at Roxas,
Capiz,3 designated as Lot 10244 and Lot 1025.5

In 1976, Benito Bertuldo (Benito) sold Lot 1024 to Asuncion Segovia acting for her daughter,
Susie Golez.6 They executed a Deed of Absolute Sale dated December 10, 1976, clearly
indicating the lot's metes and bounds.7

After the sale, the Sps. Golez started the construction of their house on Lot 10258, instead of on
Lot 1024.

Domingo Bertuldo (Domingo), Benito's first cousin9, claimed ownership over Lot 1025 and
protested against the Sps. Golez's house construction.10 In response, the Sps. Golez assured
Domingo that the construction was being done on Lot 1024.11

Sometime in 1993 and after Domingo's death, the respondents conducted a relocation survey
on Lot 1025.12 The relocation survey revealed that the Sps. Golez's house stood on Lot
1025.13 The respondents confronted the Sps. Golez with this result.

The Sps. Golez claimed that Benito clearly pointed to Susie Golez the natural boundaries of Lot
1025 whose entire area was the subject of the sale between Asuncion Segovia and Benito. 14 To
correct the alleged error in the sale, Asuncion Segovia and Benito executed an Amended Deed
of Absolute Sale15 in 1993 to change the stated property sold as "Lot 1024" to "Lot 1025"
including the specification of the metes and bounds of Lot 1025.16

Case for Quieting of Title

Proceeding from the Amended Deed of Absolute Sale, the Sps. Golez, on August 4, 1993, filed
with the Regional Trial Court (RTC) in Roxas City a Complaint for Quieting of Title17 over Lot 1025
against the respondents.

The RTC dismissed the Sps. Golez's complaint and held that they purchased Lot 1024, not Lot
1025, from Benito.18

The RTC decision was subsequently affirmed by both the CA and this Court through a resolution
docketed as SC G.R. No 178990 entitled Spouses Rolando and Susie Golez vs. Heirs of Domingo
Bertuldo,namely: Genoveva Bertuldo, et al. 19 The Sps. Golez sought reconsideration of the
Court's ruling; the Court denied the motion with finality through its Order dated January 28,
2008.20

Meanwhile, the respondents filed an application21 for free patent over Lot 1025 with the
Community Environment and Natural Resources Office (CENRO), Roxas City, on December 1,
2007. Susie Golez contested the respondents' application and filed her own application 22 for
free patent over Lot 1025.23

The Sps. Golez continued their possession of Lot 1025 despite the respondents' demand that
the Sps. Golez vacate the property.24

The Present Case for Unlawful Detainer

On February 17, 2009, the respondents filed a Complaint for Unlawful Detainer25 against the
Sps. Golez with the Municipal Circuit Trial Court (MCTC) of President Roxas, Capiz, in Civil Case
No. 507,26

The Sps. Golez filed their Answer27 and averred the following: first, the respondents' application
for free patent over Lot 1025 negates their claim of ownership since they expressly
acknowledged that the subject lot forms part of the public domain. 28

Second, the ejectment complaint must be dismissed since there was no tolerance from the
start of the Sps. Golez' possession of Lot 1025. To stress, the late Domingo Bertuldo objected
and protested against the construction of the house.29

Upon motion by the Sps. Golez, the MCTC ordered the conduct of a relocation survey. The
survey result showed that 99.99% of the house of Sps. Golez occupied Lot 1025. 30
The MCTC Ruling

The MCTC, in its decision dated September 20, 2010,31 decided in favor of the respondents and
ordered the Sps. Golez to:
1. Vacate and remove their house on the subject Lot 1025 and peacefully deliver its
possession to the plaintiffs (herein respondent heirs of Domingo Bertuldo);
2. Pay One Thousand Pesos (P1,000.00) per month as reasonable rent for the occupancy of
the subject lot starting from the date of the last demand to vacate up to the time that
they vacate the same;
 3. Pay the amount of P20,000.00 representing attorney's fees plus P5,000.00 as litigation
expenses and costs of the suit.

The MCTC recognized that what the Sps. Golez actually bought from Benito was Lot 1024 which
issue has already been decided with finality by no less than the Supreme Court. 32 Since the
survey result showed that the Sps. Golez's entire house occupies Lot 1025, the Sps. Golez are in
unlawful possession of Lot 1025 under an erroneous claim of ownership. 33

The MCTC also held that the Sps. Golez's possession of Lot 1025 was originally lawful because
they believed that they bought Lot 1025 from Benito Bertuldo, as evidenced by the execution
of the Amended Deed of Absolute Sale and the filing of the quieting of title case against the
respondents.34 Their possession became illegal when the RTC dismissed the quieting of title
case and ruled that the Sps. Golez bought Lot 1024, not Lot 1025.35

On appeal to the RTC, the Sps. Golez reiterated their argument that there is no cause of action
for unlawful detainer because Domingo's protest over the Sps. Golez's house construction on
Lot 1025 negates the presence of tolerance which is an essential element of an action for
unlawful detainer.36

In addition, the Sps. Golez argued that the complaint, which should have been for forcible
entry, is already barred by prescription.37
The RTC Ruling

In its decision dated January 4, 2011, the RTC38 dismissed the appeal and affirmed the MCTC
decision in toto.

The RTC held that the continued stay of the Sps. Golez on Lot 1025, despite the respondents'
demand for them to vacate the property and the finality of the Court's decision in the quieting
of title case - which declared that the Sps. Golez do not own Lot 1025 - constituted the act of
unlawfully detaining the property from its owner.39

The RTC explained that there was no tolerance or permission on the part of Domingo on the
construction of the Sps. Golez house on Lot 1025 because the Sps. Golez assured him that the
construction was done on Lot 1024.40cralawred

When, however, the 1993 relocation survey result showed that the Sps. Golez house stood on
Lot 1025, the respondents immediately confronted the Sps. Golez about the result. 41 The Sps.
Golez, instead of making representations with the respondents about the matter, filed a civil
action for quieting of title which interrupted the one-year prescriptive period for the
respondent heirs to file an action for unlawful detainer.42

The RTC found that the Supreme Court's Order denying the motion for reconsideration on the
civil action for quieting of title case was only received by the respondent heirs on March 7,
2008.43 Since the complaint for unlawful detainer was filed on February 17, 2009, or eleven (11)
months and fifteen (15) days from their receipt of the Order, the action for unlawful detainer
was filed within the one-year prescriptive period.44

The Sps. Golez appealed the RTC's decision and contended that the respondents' application for
free patent over Lot 1025 is a supervening event that contradicts their position that they are
the lawful and rightful owners of the subject property.45 Hence, the supervening event should
be considered notwithstanding the decision in the quieting of title case that the Sps. Golez do
not own Lot 1025.46

Further, the Sps. Golez argued that the prudent way to proceed with the case is for the CA to
wait for the resolution of the Secretary of the Department of Environment and Natural
Resources (DENR resolution) on the respondents' free patent application over Lot 1025. 47
The CA Ruling

In its Resolution48 dated March 18, 2011, the CA dismissed the appeal and affirmed the MCTC
and RTC decisions.49 The CA held that it does not need to wait for the DENR Secretary resolution
on the respondents' free patent application over Lot 1025 because the Supreme Court has
already ruled that the respondents are the lawful and rightful owners of Lot 1025. 50

On April 18, 2011, the Sps. Golez filed a Motion for Reconsideration51 on the CA Resolution and,
on June 10, 2011, a Supplemental Motion.52 The Sps. Golez manifested that the Office of the
DENR Secretary rendered a decision, awarding a 400-squre meter portion, out of the 1,484
square meter total area, of Lot 1025 to the Sps. Golez and that the same should be considered
by the CA.53

In a Resolution54 dated March 8, 2012, the CA denied the motions reasoning that the Sps. Golez
merely reiterated the same matters considered and passed upon in the earlier CA resolution.
The Petition

The Sps. Golez raises the following issues before us:

I.

WHETHER OR NOT THE UNLAWFUL DETAINER CASE FILED BY THE RESPONDENTS AGAINST THE
PETITIONERS WAS PROPER.
II.

WHETHER OR NOT THE APPLICATION FOR FREE PATENT FILED BY THE RESPONDENTS OVER LOT
1025 IS A SUPERVENING EVENT THAT SHOULD HAVE EXPUNGED THE DECISION IN THE
QUIETING OF TITLE CASE.55ChanRoblesVirtualawlibrary

OUR RULING

We grant the petition.

The core issue in this case is whether an action for unlawful detainer is the proper remedy.

Section 1, Rule 70 of the Revised Rules of Court, states that a person deprived of possession of
land "by force, intimidation, threat, strategy, or stealth," or a person against whom the
possession of any land "is unlawfully withheld after the expiration or termination of the right to
hold possession, by virtue of any contract, express or implied," may at any time "within one (1)
year after such unlawful deprivation or withholding of possession, bring an action in the proper
Municipal Trial Court against the person or persons unlawfully withholding or depriving of
possession."

The Rule defines two entirely distinct causes of action, to wit: (a) action to recover possession
founded on illegal occupation from the beginning — forcible entry; and (b) action founded on
unlawful detention by a person who originally acquired possession lawfully — unlawful
detainer.56

The law and jurisprudence leave no doubt that what determines the cause of action is the
nature of the defendants' entry into the land. If the entry is illegal, then the cause of action
against the intruder is forcible entry. If, on the other hand, the entry is legal but thereafter
possession becomes illegal, the cause of action is unlawful detainer. The latter must be filed
within one year from the date of the last demand.57

No cause of action for an

unlawful detainer.

Unlawful detainer is a summary action for the recovery of possession of real property. This
action may be filed by a lessor, vendor, vendee, or other person against whom the possession
of any land or building is unlawfully withheld after the expiration or termination of the right to
hold possession by virtue of any contract, express or implied. A complaint for unlawful detainer
must allege that: (a) the possession of the defendant was originally legal, as his possession was
permitted by the plaintiff on account of an express or implied contract between them; (b) the
defendant's possession became illegal when the plaintiff demanded that the defendant vacate
the subject property due to the expiration or termination of the right to possess under the
contract; (c) the defendant refused to heed such demand; and (d) the case for unlawful
detainer is instituted within one year from the date of last demand. 58

The allegations in the complaint determine both the nature of the action and the jurisdiction of
the court. The complaint must specifically allege the facts constituting unlawful detainer. In the
absence of these factual allegations , an action for unlawful detainer is not the proper remedy
and the municipal trial court does not have jurisdiction over the case. 59

In the Complaint,60 the respondents presented the following allegations to show unlawful

detainer:
chanRoblesvirtualLawlibrary
xxx
3. During his lifetime, Domingo Bertuldo is the absolute owner and actual possessor of Lot
1025, Pilar Cadastre situated at Barangay Aranguel, Pres. Roxas, Capiz x x x;
5. Sometime on December 10, 1976, defendant Susie Golez, through her mother, Asuncion
Segovia, acquired from Benito Bertuldo, a piece of real property, Lot 1024, Pilar Cadastre,
containing an area of 590 square meters situated at Barangay Aranguel, Pres. Roxas, Capiz x
x x;
6. Thereafter, the defendants constructed their residential house on the property; however,
Domingo Bertuldo observed that a portion of the house is being constructed on his
property, Lot 1025, Pilar Cadastre, for this reason, he made known his objections and
protestations to its constructions.
7. Defendants completely disregarded the objections and protestations made by Domingo
Bertuldo. Instead, they assured him that the house is being constructed on their property,
Lot 1024, Pilar Cadastre, thus, defendants succeeded in constructing their residential
house.
8. Sometime in 1993, after the death of Domingo Bertuldo, his heirs, the plaintiffs caused the
relocation survey of their property, Lot 1025, Pilar Cadastre. The relocation survey
conducted revealed that portion of the house of defendants was constructed on Lot 1025,
Pilar Cadastre;
9. Plaintiffs then confronted the defendants with the result of the relocation survey, however,
instead of making representations with them for the continued use of a portion of their
property, Lot 1025, Pilar Cadastre, a case was filed by the defendants against them x x x;
10. Sometime on March 31, 2000, after trial on the merits, a decision was rendered by the
Regional Trial Court, Branch 14, Roxas City, dismissing the complaint filed by the defendants
x x x;
17. Defendants are in possession of a portion of Lot 1025, Pilar Cadastre, wherein a portion of
their house was constructed by reason of the tolerance and benevolence on the part of
the plaintiffs;
18. The said tolerance and benevolence extended were withdrawn when sometime on
November 11, 2008, demand was sent by plaintiffs to defendants, for them to vacate and
remove a portion of the house belonging to them and constructed on Lot 1025 xxx
xxx
21. Due to refusal of the defendants to vacate and remove their house on Lot 1025, Pilar
Cadastre, plaintiffs were left with no recourse but to cause the filing of this instant case xxx.
[emphases supplied]

The respondents' allegations in the Complaint are contrary to the requirements for an unlawful
detainer case. In an unlawful detainer, the possession of the defendant was originally legal and
his possession was permitted by the owner through an express or implied contract. 61
In the present case, paragraph 6 of the complaint clearly characterized the Sps. Golez's
possession of Lot 1025 as unlawful from the start and bereft of contractual or legal basis.
Domingo did not tolerate the possession of Sps. Golez since he had immediately objected and
protested over the construction of Sps. Golez's house on Lot 1025. Notably, the RTC expressly
found that there was no tolerance or permission on the part of Domingo on the construction of
the Sps. Golez house on Lot 1025.62

Since tolerance has not been effectively alleged in the complaint, the complaint fails to state a
cause of action for unlawful detainer. Therefore, the MCTC had no jurisdiction over the
respondents' complaint.

Even assuming arguendo that the complaint sufficiently stated a cause of action, the

respondents still failed to prove that they or Domingo tolerated the Sps. Golez's possession on
account of an express or implied contract between them.

In Sps. Valdez v. Court of Appeals,63 the Court ruled that where the complaint did not satisfy the
jurisdictional requirement of a valid cause for unlawful detainer, the municipal trial court had
no jurisdiction over the case. Thus:
To justify an action for unlawful detainer, it is essential that the plaintiffs supposed acts of
tolerance must have been present right from the start of the possession which is later sought to
be recovered. Otherwise, if the possession was unlawful from the start, an action for unlawful
detainer would be an improper remedy.64

To emphasize, the respondents' allegation of "tolerance" in the Complaint is unsubstantiated by

the evidence on record and contradicted by the allegation that the Sps. Golez's entry on Lot
1025 was unlawful from the very beginning.

In Sarona, et al. v. Villegas, et al.,65 the Court cited Prof. Arturo M. Tolentino's definition and
characterizes "tolerance" in the following manner:
Professor Arturo M. Tolentino states that acts merely tolerated are "those which by reason of
neighborliness or familiarity, the owner of property allows his neighbor or another person to do
on the property; they are generally those particular services or benefits which one's property
can give to another without material injury or prejudice to the owner, who permits them out of
friendship or courtesy." He adds that: "[t]hey are acts of little disturbances which a person, in
the interest of neighborliness or friendly relations, permits others to do on his property, such as
passing over the land, tying a horse therein, or getting some water from a well." And, Tolentino
continues, even though "this is continued for a long time, no right will be acquired by
prescription." Further expounding on the concept, Tolentino writes: "There is tacit consent of
the possessor to the acts which are merely tolerated. Thus, not every case of knowledge and
silence on the part of the possessor can be considered mere tolerance. By virtue of tolerance
that is considered as an authorization, permission or license, acts of possession are realized or
performed. The question reduces itself to the existence or non-existence of the permission."
[emphasis supplied]
The Court has consistently adopted the position that tolerance or permission must have been
present at the beginning of possession. If the possession was unlawful from the start, an action
for unlawful detainer would not be the proper remedy and should be dismissed. 66 Thus in
Sarona, the Court explained:
A close assessment of the law and the concept of the word "tolerance" confirms our view
heretofore expressed that such tolerance must be present right from the start of possession
sought to be recovered, to categorize a cause of action as one of unlawful detainer — not of
forcible entry. Indeed, to hold otherwise would espouse a dangerous doctrine. And for two
reasons: First. Forcible entry into the land is an open challenge to the right of the possessor.
Violation of that right authorizes the speedy redress — in the inferior court — provided for in
the rules. If one year from the forcible entry is allowed to lapse before suit is filed, then the
remedy ceases to be speedy; and the possessor is deemed to have waived his right to seek
relief in the inferior court. Second. If a forcible entry action in the inferior court is allowed after
the lapse of a number of years, then the result may well be that no action of forcible entry can
really prescribe. No matter how long such defendant is in physical possession, plaintiff will
merely make a demand, bring suit in the inferior court — upon a plea of tolerance to prevent
prescription to set in — and summarily throw him out of the land. Such a conclusion is
unreasonable. Especially if we bear in mind the postulates that proceedings of forcible entry
and unlawful detainer are summary in nature, and that the one year time-bar to the suit is but
in pursuance of the summary nature of the action.67

It is not the first time that this Court adjudged contradictory statements in a complaint for
unlawful detainer as a basis for dismissal.68 In Unida v. Heirs of Urban,69 the plaintiffs claim that
he merely tolerated the defendant's possession was contradicted by the allegation that the
entry to the subject property was unlawful from the very beginning. The Court then ruled that
the unlawful detainer action should fail.

In these lights, the Sps. Golez's possession should be deemed illegal from the beginning and
the proper action which the respondents should have filed was one for forcible entry. An action
for forcible entry, however, prescribes one year reckoned from the date of the defendant's
actual entry into the land.

In the present case, the Sps. Golez entered the property immediately after the sale in 1976.
Thus, their action for forcible entry had already prescribed.

Since the action for forcible entry has already prescribed, one of the remedies for the
respondent heirs to recover the possession of Lot 1025 is accion publiciana. Accion publiciana is
the plenary action to recover the right of possession which should be brought to the proper
Regional Trial Court when dispossession has lasted for more than one year. It is an ordinary civil
proceeding to determine the better right of possession of realty independently of title.

In other words, if at the time of the filing of the complaint more than one year had elapsed
since the defendant had turned the plaintiff out of possession or the defendant's possession
had become illegal, the action will be not one of forcible entry or unlawful detainer, but
an accion publiciana.70

In these lights, we no longer find it necessary to pass upon the other issue raised in the present
petition.

WHEREFORE, we hereby GRANT the petition for review on certiorari. The resolutions dated

March 18, 2011 and March 8, 2012 of the Court of Appeals in CA-G.R. CEB-SP No. 05741
are REVERSED and SET ASIDE. The complaint for unlawful detainer is, hereby, DISMISSED. No
costs.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 180076               November 21, 2012
DIONISIO MANANQUIL, LAUDENCIA MANANQUIL-VILLAMOR, ESTANISLAO MANANQUIL, and
DIANITA MANANQUIL-RABINO, represented by OTILLO RABINO, Petitioners,
vs.
ROBERTO MOICO, Respondent.**
DECISION
DEL CASTILLO, J.:
In order that an action for quieting of title may proper, it is essential that the plaintiff must have
legal or equitable title to, or interest in, the property which is the subject-matter of the action.
Legal title denotes registered ownership, while equitable title means beneficial ownership. In
the absence of such legal or equitable title, or interest, there is no cloud to be prevented or
removed.
This Petition for Review on Certiorari1 assails the March 13, 2007 Decision2 of the Court of
Appeals (CA) in CA-G.R. CV No. 81229, which reversed and set aside the January 2, 2001
Decision3 of the Malabon Regional Trial Court, Branch 74 in Civil Case No. 2741-MN, thus
dismissing the said civil case for quieting of title.
Factual Antecedents
Lots 18 and 19 in Dagat-Dagatan, Navotas form part of the land previously expropriated by the
National Housing Authority (NHA) and placed under its Tondo Dagat-Dagatan Foreshore
Development Project – where occupants, applicants or beneficiaries may purchase lots on
installment basis. In October 1984, Lot 18 was awarded to spouses Iluminardo and Prescilla
Mananquil under a Conditional Contract to Sell. Lot 19, on the other hand, was sold to Prescilla
in February 1980 by its occupant.
In 1991, Iluminardo and Prescilla died without issue, but it turned out that Prescilla had a child
by a previous marriage – namely Eulogio Francisco Maypa (Eulogio). After the spouses’ death,
Iluminardo’s supposed heirs (Mananquil heirs) – his brothers and sisters and herein petitioners
Dionisio and Estanislao Mananquil (Estanislao), Laudencia Mananquil-Villamor (Laudencia), and
Dianita Mananquil-Rabino (Dianita) – executed an Extrajudicial Settlement Among Heirs and
adjudicated ownership over Lots 18 and 19 in favor of Dianita. They took possession of Lots 18
and 19 and leased them out to third parties.
Sometime later, the Mananquil heirs discovered that in 1997, Eulogio and two others, Eulogio
Baltazar Maypa and Brenda Luminugue, on the claim that they are surviving heirs of Iluminardo
and Prescilla, had executed an Extrajudicial Settlement of Estate with Waiver of Rights and Sale,
and a Deed of Absolute Sale in favor of Roberto Moico (Moico).
In May 1997, Moico began evicting the Mananquils’ tenants and demolishing the structures
they built on Lots 18 and 19. In June, the Mananquils instituted Civil Case No. 2741-MN for
quieting of title and injunctive relief.
Ruling of the Regional Trial Court
The trial court issued a temporary restraining order, thus suspending eviction and demolition.
After trial on the merits, a Decision was rendered in favor of the Mananquils. The dispositive
portion thereof reads:
WHEREFORE, premises considered, judgment is hereby rendered:
1. Ordering that a permanent injunction be issued enjoining defendant Roberto Moico
to refrain from threatening the tenants and destroying the improvements standing on
the subject properties and from filing the ejectment suits against the tenants;
2. Ordering the Extrajudicial Settlement of Estate with Waiver of Rights and Sale and the
Deed of Absolute Sale dated January 9, 1997 cancelled for having no force and effect;
3. Declaring plaintiffs to be rightfully entitled to the subject properties and the
Extrajudicial Settlement of Heirs of the plaintiffs to be valid and enforceable;
4. Ordering defendants to pay jointly and severally the plaintiffs the following, to wit:
a. P50,000.00 as moral damages;
b. P50,000.00 as exemplary damages;
c. P50,000.00 for and as attorney’s fees; and
d. Costs of suit.
4
SO ORDERED.
Ruling of the Court of Appeals
Moico appealed to the CA, which reversed the trial court. It held that the petitioners have failed
to show that Iluminardo and Prescilla have –
x x x perfected their grant/award from the NHA so as to secure a firm, perfect and confirmed
title over the subject lots. It must be stressed that the Conditional Contract to Sell that covers
Lot No. 18 stipulates several terms and conditions before a grantee of the NHA may legally
acquire perfect title over the land, and there should be no mistake that the same stipulations
hold true with respect to Lot No. 19. Inter alia, the more vital contractual conditions, are: (a)
payment in installment of the price for a specified period, (b) personal use of and benefit to the
land by the grantee, and (c) explicit prohibition from selling, assigning, encumbering,
mortgaging, leasing, or sub-leasing the property awarded x x x.5
The CA noted that Lots 18 and 19 must still belong to the NHA, in the absence of proof that
Iluminardo and Prescilla have completed installment payments thereon, or were awarded titles
to the lots. And if the couple disposed of these lots even before title could be issued in their
name, then they may have been guilty of violating conditions of the government grant, thus
disqualifying them from the NHA program. Consequently, there is no right in respect to these
properties that the Mananquils may succeed to. If this is the case, then no suit for quieting of
title could prosper, for lack of legal or equitable title to or interest in Lots 18 and 19.
Issues
The present recourse thus raises the following issues for the Court’s resolution:
I
THE COURT OF APPEALS GRAVELY ERRED IN PASSING UPON AN ISSUE NOT BEING
ASSIGNED AS ERROR IN THE APPELLANTS’ BRIEF OF PRIVATE RESPONDENTS AND NOT
TOUCHED UPON DURING THE TRIAL IN THE COURT A QUO PARTICULARLY THE ALLEGED
VIOLATION OF THE SPOUSES ILUMINARDO AND PRESCILLA MANANQUIL OF THE
CONDITIONAL CONTRACT TO SELL PURPORTEDLY COVERING THE PROPERTIES IN
 QUESTION, TO SUIT ITS RATIONALIZATION IN ITS QUESTIONED DECISION JUSTIFYING
THE REVERSAL OF THE DECISION OF THE COURT A QUO.
II
THE COURT OF APPEALS ALSO COMMITTED A GRIEVOUS ERROR IN CONSTRUING THE
PROVISIONS OF ARTICLES 476 AND 477 OF THE CIVIL CODE AGAINST PETITIONERS
NOTWITHSTANDING THE POSITIVE CIRCUMSTANCES OBTAINING IN THIS CASE
POINTING TO THE PROPRIETY OF THE CAUSE OF ACTION FOR QUIETING OF TITLE. 6
Petitioners’ Arguments
Petitioners argue that the CA cannot touch upon matters not raised as issues in the trial court,
stressing that the NHA did not even intervene during the proceedings below to ventilate issues
relating to the rights of the parties to Lots 18 and 19 under the Tondo Dagat-Dagatan Foreshore
Development Project. Petitioners claim that since the issue of violation of the terms of the
grant may be resolved in a separate forum between the Mananquils and the NHA, it was
improper for the CA to have pre-empted the issue.
On quieting of title, petitioners advance the view that since they are the legal heirs of
Iluminardo Mananquil, then they possess the requisite legal or equitable title or interest in Lots
18 and 19, which thus permits them to pursue Civil Case No. 2741-MN; whatever rights
Iluminardo had over the lots were transmitted to them from the moment of his death, per
Article 777 of the Civil Code. And among these rights are the rights to continue with the
amortizations covering Lots 18 and 19, as well as to use and occupy the same; their interest as
successors-in-interest, though imperfect, is enough to warrant the filing of a case for quieting of
title to protect these rights.
Respondent Moico’s Arguments
Moico, on the other hand, argues that because the issue relating to Iluminardo and Prescilla’s
possible violation of the terms and conditions of the NHA grant is closely related to the issue of
ownership and possession over Lots 18 and 19, then the CA possessed jurisdiction to pass upon
it.
Moico supports the CA view that petitioners failed to prove their title or interest in the subject
properties, just as he has proved below that it was his predecessor, Eulogio, who paid all
obligations relative to Lots 18 and 19 due and owing to the NHA, for which reason the NHA
released and cleared the lots and thus paved the way for their proper transfer to him.
Our Ruling
The petition lacks merit.
An action for quieting of title is essentially a common law remedy grounded on
equity.1âwphi1 The competent court is tasked to determine the respective rights of the
complainant and other claimants, not only to place things in their proper place, to make the
one who has no rights to said immovable respect and not disturb the other, but also for the
benefit of both, so that he who has the right would see every cloud of doubt over the property
dissipated, and he could afterwards without fear introduce the improvements he may desire, to
use, and even to abuse the property as he deems best. But "for an action to quiet title to
prosper, two indispensable requisites must concur, namely: (1) the plaintiff or complainant has
a legal or an equitable title to or interest in the real property subject of the action; and (2) the
deed, claim, encumbrance, or proceeding claimed to be casting cloud on his title must be
shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal
efficacy."7
Contrary to petitioners’ stand, the issue relating to the grant of rights, title or award by the NHA
determines whether the case for quieting of title may be maintained. If the petitioners are
legitimate successors to or beneficiaries of Iluminardo upon his death – under the certificate of
title, award, or grant, or under the special law or specific terms of the NHA program/project –
then they possess the requisite interest to maintain suit; if not, then Civil Case No. 2741-MN
must necessarily be dismissed.
From the evidence adduced below, it appears that the petitioners have failed to show their
qualifications or right to succeed Iluminardo in his rights under the NHA program/project. They
failed to present any title, award, grant, document or certification from the NHA or proper
government agency which would show that Iluminardo and Prescilla have become the
registered owners/beneficiaries/ awardees of Lots 18 and 19, or that petitioners are qualified
successors or beneficiaries under the Dagat-Dagatan program/project, taking over Iluminardo’s
rights after his death. They did not call to the witness stand competent witnesses from the NHA
who can attest to their rights as successors to or beneficiaries of Lots 18 and 19. They failed to
present proof, at the very least, of the specific law, provisions, or terms that govern the Tondo
Dagat-Dagatan Foreshore Development Project which would indicate a modicum of interest on
their part. For this reason, their rights or interest in the property could not be established.
It was erroneous, however, for the CA to assume that Iluminardo and Prescilla may have
violated the conditions of the NHA grant under the Tondo Dagat-Dagatan Foreshore
Development Project by transferring their rights prior to the issuance of a title or certificate
awarding Lots 18 and 19 to them. In the absence of proof, a ruling to this effect is speculative.
Instead, in resolving the case, the trial court – and the CA on appeal – should have required
proof that petitioners had, either: 1) a certificate of title, award, or grant from the proper
agency (NHA or otherwise) in the name of their predecessor Iluminardo, or, in the absence
thereof, 2) a right to succeed to Iluminardo’s rights to Lots 18 and 19, not only as his heirs, but
also as qualified legitimate successors/beneficiaries under the Tondo Dagat-Dagatan Foreshore
Development Project terms and conditions as taken over by the NHA. 8 Petitioners should have
shown, to the satisfaction of the courts that under the NHA program project governing the
grant of Lots 18 and 19, they are entitled and qualified to succeed or substitute for Iluminardo
in his rights upon his death. As earlier stated, this takes the form of evidence apart from proof
of heirship, of course – of the specific law, regulation or terms covering the program/project
which allows for a substitution or succession of rights in case of death; the certificate of title,
award or grant itself; or the testimony of competent witnesses from the NHA.
Proof of heirship alone does not suffice; the Mananquils must prove to the satisfaction of the
courts that they have a right to succeed Iluminardo under the law or terms of the NHA project,
and are not disqualified by non-payment, prohibition, lack of qualifications, or otherwise.
WHEREFORE, premises considered, the Petition is DENIED for lack of merit. The March 13, 2007
Decision of the Court of Appeals in CA-G.R. CV No. 81229 is AFFIRMED.
SO ORDERED.
 SECOND DIVISION
G.R. No. 210607, March 25, 2019
SPOUSES EDILBERTO & EVELINE POZON; EDILBERTO POZON, DECEASED, SUBSTITUTED BY HIS
HEIRS, NAMELY, WIFE EVELINE POZON AND DAUGHTERS GERALDINE MICHELLE POZON AND
ANGELICA EMILIA POZON, PETITIONERS, v. DIANA JEANNE * LOPEZ, RESPONDENT.

RESOLUTION
CAGUIOA, J.:
1
Before the Court is a Petition for Review on Certiorari  (Petition) under Rule 45 of the Rules of
Court filed by petitioners Spouses Edilberto and Eveline Pozon (collectively, petitioners Sps.
Pozon) assailing the Decision2 dated July 8, 2013 (assailed Decision) and Resolution 3 dated
November 27, 2013 (assailed Resolution) issued by the Court of Appeals, Special Seventh
Division and Former Special Seventh Division (CA), respectively, in CA-G.R. CV No. 95280, which
affirmed the Decision4 dated March 29, 2010 of the Regional Trial Court of Makati City (RTC),
Branch 142 in Civil Case No. 96-692, which granted respondent Diana Jeanne Lopez's
(respondent Lopez) Petition for Quieting of Title with Damages.
The Facts and Antecedent Proceedings
As narrated by the CA in its assailed Decision, the essential facts and antecedent proceedings of
the instant case are as follows:
On May 16, 1996, [respondent] Diana Jeanne Lopez (Lopez) filed a petition for quieting of title
and damages5 before the RTC of Makati[, Branch 142] against [petitioners Sps. Pozon, Tradex
Realty Development Corporation (Tradex), Estate of Oscar Beltran[, Sr.], the Register of Deeds
of Makati (RD), George Raymundo (Raymundo), Zosimo Cuasay (Cuasay), Cesar Diomampo
(Diomampo), and Liserio Evangelista (Evangelista)]. The petition sought to declare void the
Transfer Certificate of Title (TCT) No. 1515226 issued to [Tradex], covering a parcel of land with
improvement located at 2149 Paraiso St., Dasmarinas Village, Makati City (subject property). In
a Supplemental Complaint, [respondent Lopez] also sought the declaration of nullity of TCT No.
212133 subsequently issued in the name of [petitioners Sps. Pozon.]
Sometime in 1980, [respondent] Lopez, as assisted by her business associate, Rodolfo Cuenca
[Cuenca], purchased from Mr. Enrique Zobel [Zobel] the subject property. The sale was
brokered by [Raymundo], a real estate broker. After the sale of the subject property,
[respondent] Lopez immediately took possession and occupied the same. [Respondent] Lopez
and Cuenca then sought the assistance of Beltran Cuasay Law Office (Law Office) regarding the
documentation of the sale and the transfer of the title from Mr. Zobel to [respondent] Lopez.
The Law Office was instructed by them to organize a corporation named Paraiso Realty
Corporation (Paraiso) which is to be owned by [respondent] Lopez with the end in view of
reflecting that Paraiso acquired the subject property from Mr. Zobel. Atty. Oscar Beltran, Sr.
[(Beltran, Sr.)] and [Evangelista] closely coordinated with Cuenca and [respondent] Lopez for
the purpose of complying with the said instructions.
However, contrary to [respondent] Lopez and Cuenca's instruction, the Law Office, acting thru
Beltran[, Sr.] and Evangelista, organized Paraiso but they made themselves and their nominees
as the exclusive stockholders thereof, totally excluding [respondent] Lopez from ownership
over the subject property. The Law Office made it appear that the subject property was
acquired by Raymundo, instead of Paraiso, from Mr. Zobel. Thereafter, Raymundo purportedly
sold and transferred the title of the subject property to Paraiso. Subsequently, the Law Office,
thru Evangelista, who was acting on behalf of Paraiso, prepared a Deed of Absolute Sale over
the subject property to one Lino Nep[o]m[u]ceno [Nepomuceno], said to be another
collaborator of Beltran, Sr. Later, another Deed of Sale was executed where Nepomuceno sold
to [Tradex] the subject property, resulting to the issuance of TCT No. 143835 in the name of the
latter. [Respondent] Lopez claimed that all stockholders of [Tradex], namely: Diomampo,
Messrs. Salter Han, Indah Ana Mohammad and Romeo De Guzman, were intimate colleagues of
Beltran[, Sr.] [Respondent] Lopez claimed that the said chain of events was only discovered
when she sought assistance of her counsel.
Sometime in 1987, [respondent] Lopez was informed that the [petitioners Sps. Pozon] wanted
to inspect the subject property. Later, she discovered that the title of the subject property was
in the name of [Tradex] and was never transferred in her name. She also learned that
Raymundo was brokering the sale of the subject property to [petitioners Sps. Pozon] on behalf
of [Tradex]. [Respondent] Lopez claimed that she told Raymundo and [petitioners Sps. Pozon]
that she owned the subject property and it was not for sale. [Respondent] Lopez also refused
them entry into the subject property for inspection. Despite [respondent] Lopez's warning,
[Tradex], thru Diomampo, sold the subject property to [petitioners Sps. Pozon.] Nonetheless,
[Tradex] could not deliver possession of the subject property, [as respondent Lopez was still in
possession of the subject property], prompting the [petitioners Sps. Pozon] to file an action for
Specific Performance with Damages, docketed as Civil Case No. 17358, before the RTC of
Makati City, Branch 147. [Respondent] Lopez was not impleaded as a party thereto.
[Respondent] Lopez claimed that Beltran, Sr., Zosimo Cuasay, Evangelista and Raymundo
conspired in perpetrating fraud as they all knew that the subject property is owned by her. She
argued that [petitioners Sps. Pozon] were not buyers in good faith.
[In the Quieting of Title Case, s]ummons were served upon the [therein] defendants. [Tradex]
and the Estate of Beltran were declared in default by the RTC [, Branch 142] for their failure to
file their respective answers to the petition within the required period.
xxxx
In their Amended Answer, [petitioners Sps. Pozon] claimed that [respondent] Lopez has no
cause of action against them. The subject property was offered to them for sale by Raymundo.
However, they were advised that they cannot inspect the subject property as the occupant did
not allow them to do so. Raymundo assured them that [respondent] Lopez will eventually
vacate the subject property. [Petitioners Sps. Pozon] claimed that they agreed that the
purchase price shall be paid in [two (2)] installments, first upon execution of the contract, then
upon delivery of possession of the subject property. They contended that upon presentation of
the draft of the contract to sell, [petitioners Spouses Pozon] verified the title of the subject
property and found out that it was in the name of [Tradex] and no encumbrance was annotated
therein. When [Tradex] failed to deliver possession of the subject property as stipulated in the
contract, [petitioners Sps. Pozon] were compelled to file a case for specific performance and
damages docketed as Civil Case No. 17358, against [Tradex], et al. They contended that [Tradex]
demanded that [respondent] Lopez vacate the subject property but she refused. Furthermore,
[petitioners Sps. Pozon] claimed that [respondent] Lopez' cause of action had already
prescribed as the latter, despite knowledge of the pendency of Civil Case No. 17358, did not
intervene to defend her right of ownership over the subject property.
xxxx
During the trial of the case [for Quieting of Title before RTC, Branch 142], [respondent] Lopez
presented the following witnesses, namely: Diomampo, Mamerto Rodriguez, Cuenca, Anette
Isabel Tamayo, [petitioner Eveline (as hostile witness)], Oscar Beltran, Jr., Atty. Jose Bernas and
herself.
[Petitioners Sps. Pozon] and Raymundo filed their respective demurrer to evidence but both
were denied by the RTC [, Branch 142]. As a consequence, [petitioner Edilberto] took the
witness stand. In view of the repeated non-appearances of Cuasay, Evangelista and Beltran, Sr.
during the scheduled hearings for their respective presentation of evidence, they were deemed
to have waived their right to present evidence. After submitting the required memoranda, the
case was submitted for decision.
On March 29, 2010, the RTC[, Branch 142] rendered a Decision declaring [respondent] Lopez as
the lawful owner of the subject property, the dispositive portion of the said decision reads:
WHEREFORE, in view of the foregoing, judgment is hereby rendered:
1. Declaring the plaintiff to be the true, lawful, and sole owner of the
subject property at No. 2149 Paraiso Street, Dasmariñas Village, Makati
City;
2. Directing the defendant Register of Deeds to cancel the registration of
T.C.T. No. 212133 in the name of the defendants-spouses Edilberto and
Eveline Pozon and to issue a new T.C.T. in the name of the plaintiff, free
from any liens or encumbrance[s];
3. Ordering the defendants Estate of Beltran, Tradex Realty Development
Corporation, Z[o]simo Cuasay, Cesar Diomampo, Li[s]erio Evangelista,
Lino Nepomuceno and Estate of George Raymundo to jointly and
severally pay the petitioner:
a. Attorney's fees and litigation expenses in the amount of Three
Hundred Thousand Pesos (Php300,000.00); and
b. Costs of the suit.
7

[In declaring petitioners Sps. Pozon as purchasers in bad faith, RTC, Branch 142 held that:
On the testimony of the defendant Eveline Pozon, when testifying as an adverse witness for the
plaintiff, defendant Eveline Pozon admitted that she never met any director or officer of
defendant TRADEX prior to the alleged purchase, since her only contact was defendant
Raymundo, and that there was no power of attorney or board resolution that authorizes
defendant Raymundo to act on behalf of defendants (sic) TRADEX and she relied on defendant
Raymundo who presented the agreement to purchase and sell which was duly signed by
defendant Diomampo as President of TRADEX. If the defendants-spouses Pozon were, because
of the information relayed by defendant Raymundo to them, hesitant to purchase the property
in question, then why did defendant Eveline Pozon make her two (2) checks payable to David
Raymundo, even if defendant Raymundo possessed no power of attorney or board resolution
that authorized him to act on behalf of defendant TRADEX? How could she know that the
"Agreement to Purchase and Sell" was duly signed by defendant Diomampo as President of
TRADEX, even if she never met any director or officer of defendant corporation? For the
defendants-spouses Pozon to have been engaged in the real estate business since 1986, yet
purchased the subject property ten (10) years later by climbing up a ladder to view only the
backyard and swimming pool or the exterior and the surrounding garden, and the purchase
being started by a downpayment of two (2) checks made payable to the son of the broker and
the broker presented no power of attorney or board resolution to act on behalf of the seller
corporation TRADEX, prevents the defendants-spouses Pozon from laying any claim that they
have discharged the burden of proving the status of a purchaser in good faith.
xxxx
x x x However, this Court initially notes that defendant Edilberto Pozon did not deny having
handwritten his contact numbers on the dorsal side of the Petitioner's Exhibit "V" so that, as
the plaintiff testified, she could call the former. What likewise deserves this Court's attention is
why the counsel for the defendants-spouses Pozon did not during [the] cross-examination of
the plaintiff and of her witnesses mention the meeting between defendant Edilberto Pozon and
Maryjane, the daughter of Rudy Cuenca. What finally swings the pendulum in the plaintiffs
favor is the Decision in Civil Case No. 17358, which declares:
"Subsequently, Miss Lopez talked with Mr. Pozon in Hongkong. Miss Lopez told him that she is
not a tenant in the premises in question, that there was no lease agreement whatsoever and
that the properties were given to her as a gift; that she is not moving out of the house and that
it is not true that she is buying another house in order to move out.
Disturbed by the statement of Miss Lopez, Edilberto Pozon went back to the Philippines and
sought defendant Raymundo telling the latter that he could no longer wait. x x x "] 8
Aggrieved by the RTC[, Branch 142's] Decision, [petitioners Sps. Pozon] and Evangelista filed
their joint [appeal] before [the CA].9
The Ruling of the CA
In its assailed Decision, the CA denied the joint appeal filed by petitioners Sps. Pozon and
Evangelista, affirming the RTC, Branch 142's Decision dated March 29, 2010. The dispositive
portion of the assailed Decision reads:
WHEREFORE, the appeal is DENIED. The assailed Decision, dated March 29, 2010 of the
Regional Trial Court (RTC) of Makati City, Branch 142 in Civil Case No. 96-692, is
hereby AFFIRMED.
SO ORDERED.10
In sum, the CA found that based on the evidence on record, respondent Lopez was able to
convincingly prove her equitable title/interest over the subject property. The CA likewise found
that the overwhelming evidence solidifies the fact that petitioners Sps. Pozon were not
innocent purchasers for value of the subject property.
On July 31, 2013, petitioners Sps. Pozon filed their Motion for Reconsideration, 11 which was
denied by the CA in its assailed Resolution.
Hence, the instant Petition.
On August 4, 2014, respondent Lopez filed her Comment (on the Petition for Review on
Certiorari)12 of even date.
On August 18, 2014, petitioners Sps. Pozon filed their Reply 13 dated August 14, 2014.
On December 22, 2014, respondent Lopez filed her Ad Cautelam Memorandum14 dated
December 19, 2014.
 Issues
In the instant Petition, petitioners Sps. Pozon raise two issues for the Court's consideration:
1. Whether or not the CA erred in disregarding the previous rulings of this Honorable Court on
the same subject matter; and
2. Whether or not the conclusions made by the CA are substantiated by the evidence and can
be legally sustained.15
The Court shall discuss the two aforementioned issues in seriatim.
The Court's Ruling
I. The alleged conclusiveness of Civil Case No. 17358 and Civil Case No. 69262 with respect to
the issue of ownership over the subject property

With respect to the first issue raised by petitioners Sps. Pozon, it is argued that the CA, in
affirming RTC, Branch 142's granting of respondent Lopez's Petition for Quieting of Title,
committed a grave error in disregarding two previously decided cases resolved in favor of them
that supposedly touched upon the same subject matter as in the Quieting of Title case. 16 In
essence, petitioners Sps. Pozon posit that the two decided cases they cited are conclusive upon
the court a quo with respect to their ownership over the subject property.
A close examination of both cases referred to by petitioners Sps. Pozon reveal that such
argument is erroneous. The final and executory decisions identified by them are not in any way
conclusive as to the issue of ownership over the subject property.
The First Case: Civil Case No. 17358 (The
Specific Performance Case)
The first case cited by petitioners Sps. Pozon is Civil Case No. 17358, titled Spouses Edilberto G.
Pozon and Eveline Z. Pozon vs. Tradex Realty Development Corporation, J. H. Pajara
Construction Corporation, Cesar Diomampo, and Fausto George Raymundo (Specific
Performance Case). The said case was filed by petitioners Sps. Pozon before the RTC of Makati
City, Branch 147.
In the Specific Performance Case, by virtue of a contract to sell titled Agreement to Purchase
and to Sell dated December 9, 1986 entered with Tradex, petitioners Sps. Pozon prayed that the
subsequent Deed of Sale entered into by Tradex with another purchaser, i.e., J.H. Pajara
Construction Corporation, be declared null and void, and that Tradex be ordered to execute the
appropriate instrument to convey the subject property to petitioners. 17
In a Decision18 dated July 18, 1990, RTC, Branch 147 issued its Decision granting petitioners Sps.
Pozon's prayer for specific performance, declaring the sale over the subject property made by
Tradex to J.H. Pajara Construction Corporation null and void, as well as ordering Tradex to
execute a deed of conveyance in favor of petitioners Sps. Pozon.
The RTC, Branch 147's Decision was upheld by the CA Second Division in its Decision 19 dated
November 29, 1995 and by the Court20 in its Resolution21 dated September 18, 1996.
Petitioners Sps. Pozon maintain that the resolution of the Specific Performance Case in their
favor should have compelled the CA to deem them as the owners of the subject property.
The argument is mistaken.
At the outset, a perusal of the RTC, Branch 147's Decision reveals that the issue of ownership
was not discussed and resolved; the right of ownership over the subject property was not at
all an issue in the Specific Performance Case.
In fact, in the said Decision, it was made clear that petitioners Sps. Pozon did not pray that they
be declared the owners of the subject property. Instead, their prayer was limited only to the
nullification of the sale entered into by Tradex with J.H. Pajara Construction Corporation and to
compel Tradex to execute an instrument conveying the subject property to them. 22
Further, it must be emphasized that the Specific Performance Case did not dwell whatsoever on
the issues surrounding respondent Lopez's claim of ownership over the subject property. In
fact, it must be stressed that respondent Lopez was not even impleaded in the Specific
Performance Case.
This leads the Court to its second point on the Specific Performance Case. Even
assuming arguendo that the Specific Performance Case had dwelled on the issue of ownership
over the subject property, which it did not, such case cannot bind respondent Lopez as she was
not impleaded therein.
The Court's pronouncement in Spouses Yu v. Pacleb23 is instructive:
Petitioner spouses argue that the decision of the Regional Trial Court in Civil Case No. 741-93 as
to the rightful owner of the Langcaan Property is conclusive and binding upon respondent even
if the latter was not a party thereto since it involved the question of possession and ownership
of real property, and is thus not merely an action in personam but an action quasi in rem.
In Domagas v. Jensen, we distinguished between actions in personam and actions quasi in rem.
The settled rule is that the aim and object of an action determine its character. Whether a
proceeding is in rem, or in personam, or quasi in rem for that matter, is determined by its
nature and purpose, and by these only. A proceeding in personam is a proceeding to enforce
personal rights and obligations brought against the person and is based on the jurisdiction of
the person, although it may involve his right to, or the exercise of ownership of, specific
property, or seek to compel him to control or dispose of it in accordance with the mandate of
the court. The purpose of a proceeding in personam is to impose, through the judgment of a
court, some responsibility or liability directly upon the person of the defendant. Of this
character are suits to compel a defendant to specifically perform some act or actions to fasten a
pecuniary liability on him. An action in personam is said to be one which has for its object a
judgment against the person, as distinguished from a judgment against the propriety (sic) to
determine its state. It has been held that an action in personam is a proceeding to enforce
personal rights or obligations; such action is brought against the person.
xxxx
On the other hand, a proceeding quasi in rem is one brought against persons seeking to subject
the property of such persons to the discharge of the claims assailed. In an action quasi in rem,
an individual is named as defendant and the purpose of the proceeding is to subject his
interests therein to the obligation or loan burdening the property. Actions quasi in rem deal
with the status, ownership or liability of a particular property but which are intended to
operate on these questions only as between the particular parties to the proceedings and not
to ascertain or cut off the rights or interests of all possible claimants. The judgments therein are
binding only upon the parties who joined in the action.
Civil Case No. 741-93 is an action for specific performance and damages filed by petitioner
spouses against Javier to compel performance of the latter's undertakings under their Contract
to Sell. As correctly held by the Court of Appeals, its object is to compel Javier to accept the full
payment of the purchase price, and to execute a deed of absolute sale over the Langcaan
Property in their favor. The obligations of Javier under the contract to sell attach to him alone,
and do not burden the Langcaan Property.
We have held in an unbroken string of cases that an action for specific performance is an
action in personam. In Cabutihan v. Landcenter Construction and Development Corporation, we
ruled that an action for specific performance praying for the execution of a deed of sale in
connection with an undertaking in a contract, such as the contract to sell, in this instance, is an
action in personam.
Being a judgment in personam, Civil Case No. 741-93 is binding only upon the parties properly
impleaded therein and duly heard or given an opportunity to be heard. Therefore, it cannot
bind respondent since he was not a party therein. Neither can respondent be considered as
privy thereto since his signature and that of his late first wife, Angelita Chan, were forged in the
deed of sale.24
Analogous to the instant case, in Spouses Yu v. Pacleb, petitioners therein argued that since a
previous action for specific performance and damages was granted in their favor compelling
performance by the seller under a contract to sell to accept the full payment of the purchase
price and to execute a deed of absolute sale over the subject property therein in their favor,
such decision is already conclusive as to their ownership over the subject property therein and
binding to the therein respondent, even if the latter was not impleaded in the case.
Finding the therein petitioners' argument unmeritorious, the Court held that an action for
specific performance praying for the execution of an instrument in connection with an
undertaking in a contract to sell, which is precisely similar to the Specific Performance Case
invoked by petitioners Sps. Pozon in the instant case, is an action in personam. And being a
judgment in personam, the judgment is binding ONLY upon the parties properly impleaded
therein.
Since it is beyond dispute that respondent Lopez was NOT impleaded in the Specific
Performance Case, then, contrary to the assertion of petitioners Sps. Pozon, it cannot bind and
affect respondent Lopez and her claim of ownership over the subject property.
The Second Case: Civil Case No. 69262
(The Ejectment Case)
Moving now to the second case invoked by petitioners Sps. Pozon, the records reveal that on
February 8, 2000, they filed a Complaint for Ejectment against respondent Lopez, docketed as
Civil Case No. 69262 before the Metropolitan Trial Court of Makati City, Branch 61 (MeTC). 25
In its Decision26 dated December 23, 2000, the MeTC ruled that petitioners Sps. Pozon were
entitled to the possession of the subject property based on the sale entered into by Tradex with
them.
The said Decision was eventually affirmed by the RTC, CA, and the Court in Lopez v. Sps. Pozon
and Court of Appeals.27
Petitioners Sps. Pozon assert that the fact that the Ejectment Case was successfully resolved in
their favor should have convinced the CA that they are the true owners of the subject property.
As well, this argument is unmeritorious.
 It simply does not follow that since the Ejectment Case was ruled in favor of petitioners Sps.
Pozon, the latter are conclusively deemed the owners of the subject property.
It is an elementary rule that since the only issue for resolution in an ejectment case is physical
or material possession, where the parties to an ejectment case raise the issue of ownership, the
courts may pass upon that issue only for the purposes of determining who between the parties
has the better right to possess the property. Where the issue of ownership is inseparably linked
to that of possession, adjudication of ownership is not final and binding, but merely for the
purpose of resolving the issue of possession.28
In fact, ironically, in the same Decision by the Court in the Ejectment Case heavily invoked by
petitioners Sps. Pozon, and contrary to their assertion, the Court held that despite the
resolution of the Ejectment Case, respondent Lopez may thresh out the issue of ownership in
the appropriate proceeding, i.e., the Quieting of Title Case filed before the RTC, Branch 142:
[If respondent] Lopez believes that she is entitled to relief, it may be secured from the action
for quieting of title pending before another branch of the RTC. x x x
It is also not difficult to see that [respondent] Lopez wants this Court to take cognizance of
circumstances which she believes would support her alleged ownership of the [subject]
property and cast doubt on the [petitioners Sps. Pozon's] manner of acquisition, and then rule
on these competing claims, especially since she refuses to accept the determination of the
courts below in the ejectment case that, based on the TCT in their name, the [petitioners Sps.]
Pozon have a better right to possess the [subject] property.
This Court is not a trier of facts nor can it take cognizance of facts alleged by [respondent] Lopez
that have yet to be proven in an appropriate proceeding, such as Civil Case No. 96-692
pending in the RTC[, Branch 142.]29
Hence, considering the foregoing, the Court finds the first issue raised by petitioners Sps. Pozon
in the instant Petition unmeritorious.
II. The alleged failure of respondent Lopez to establish her claim of ownership over the subject
property with preponderance of evidence

In essence, the second issue raised by petitioners Sps. Pozon in the instant Petition centers on
the supposed misappreciation of evidence committed by the CA, alleging that respondent Lopez
purportedly failed to establish by preponderance of evidence her claim of ownership over the
subject property.30
At the outset, it should be stressed that petitioners Sps. Pozon themselves, in the instant
Petition, acknowledge that the arguments made in their submissions essentially involve
questions of facts and that the resolution of their Petition would necessarily entail that the
Court act as a "trier of facts."31
A catena of cases has consistently held that questions of fact cannot be raised in an appeal via
certiorari before the Court and are not proper for its consideration. 32 The Court is not a trier of
facts. It is not the Court's function to examine and weigh all over again the evidence presented
in the proceedings below.33
A question of facts exists when the doubt or difference arises as to the truth or falsehood of
facts or when the query invites calibration of the whole evidence considering mainly the
credibility of the witnesses, the existence and relevancy of specific surrounding circumstances
as well as their relation to each other and to the whole, and the probability of the situation. 34
Petitioners Sps. Pozon's submission that the court a quo supposedly misappreciated evidence
and that respondent Lopez allegedly failed to establish by preponderance of evidence her claim
of ownership over the subject property obviously calls for the recalibration, reexamination, and
reassessment of evidence, the credibility of witnesses, as well as the existence and relevancy of
specific surrounding circumstances.
While petitioners Sps. Pozon are correct in their insistence that the Court may, in the interest of
justice, review evidence if the inference drawn by the appellate court from the facts is
manifestly mistaken,35 based on the Court's examination of the CA's assailed Decision, as well as
the records of the instant case, it does not find any manifest and patent error in the court a
quo's findings.
Conversely, the assailed Decision's findings that respondent Lopez established her equitable
title/interest over the subject property and that petitioners Sps. Pozon were not purchasers in
good faith are well-founded and well-substantiated.
As pointed out by the CA, contrary to petitioners Sps. Pozon's argument that respondent
Lopez's claim of ownership was anchored primarily on her own testimony, 36 respondent Lopez
was able to provide strong evidence establishing her claim of ownership, such as official
receipts for payment of association dues and garbage dues, records of the Dasmariñas Village
Association, water bills, tax declarations and receipts of payment, the corroborating testimony
of Cuenca, and a Letter dated May 21,1993 signed by Beltran, Jr. and Diomampo acknowledging
respondent Lopez's ownership over the subject property, among others. 37
In fact, striking is the CA's reference to the judicial admission made by petitioners Sps. Pozon
themselves in their Memorandum dated March 15, 1990 (in the Specific Performance Case),
wherein they stated unequivocally that "[t]he inability of defendants to comply with their
obligation and their subsequent fraudulent scheme can be traced to one fact - the defendant
Tradex did not actually own the property although it is registered in its name."38 Hence, the
CA was correct in finding that petitioners Sps. Pozon indeed knew that the subject property was
not owned by Tradex, from whom they acquired their supposed title over the subject property.
With respect to the status of petitioners Sps. Pozon as purchasers in bad faith, it must be noted
that even in the Resolution39 dated September 18, 1996 issued by the Court in relation to the
Specific Performance Case, which they invoked to further their argument, the Court, citing the
court a quo's Decision, found that:
[t]here is no dispute that [petitioners Sps. Pozon] were informed from the start by defendant
Raymundo of [respondent Lopez'] occupancy of the [subject property]; that [petitioners Sps.
Pozon] were not able to inspect the premises except to view it from the outside atop a ladder;
that as a result, [petitioners Sps. Pozon] initially expressed misgivings about buying the
property; that [Edilberto] Pozon had occasion to meet [respondent] Lopez in Hongkong; and
that up to the present, the [subject] property remains in the possession of [respondent]
Lopez.40
For the following reasons, petitioners Sps. Pozon's argument that there was a misappreciation
of evidence committed by the CA and that respondent Lopez purportedly failed to establish by
preponderance of evidence her claim of ownership over the subject property is not well-taken.
WHEREFORE, premises considered, the instant appeal is hereby DENIED. The Decision dated
July 8, 2013 and Resolution dated November 27, 2013 issued by the Court of Appeals, Special
Seventh Division and Former Special Seventh Division, respectively, in CA-G.R. CV No. 95280
are AFFIRMED.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 170604               September 2, 2013
HEIRS OF MARGARITA PRODON, PETITIONERS,
vs.
HEIRS OF MAXIMO S. ALVAREZ AND VALENTINA CLAVE, REPRESENTED BY REV. MAXIMO
ALVAREZ, JR., RESPONDENTS.
DECISION
BERSAMIN, J.:
The Best Evidence Rule applies only when the terms of a written document are the subject of
the inquiry. In an action for quieting of title based on the inexistence of a deed of sale with right
to repurchase that purportedly cast a cloud on the title of a property, therefore, the Best
Evidence Rule does not apply, and the defendant is not precluded from presenting evidence
other than the original document.
The Case
This appeal seeks the review and reversal of the decision promulgated on August 18,
2005,1 whereby the Court of Appeals (CA) reversed the judgment rendered on November 5,
1997 by the Regional Trial Court (RTC), Branch 35, in Manila in Civil Case No. 96-78481 entitled
Heirs of Maximo S Alvarez and Valentina Clave, represented by Rev. Maximo S. Alvarez and
Valentina Clave, represented by Rev. Maximo Alvarez, Jr. v. Margarita Prodon and the Register
of Deeds of the City of Manila dismissing the respondents’ action for quieting of title. 2
Antecedents
In their complaint for quieting of title and damages against Margarita Prodon, 3 the respondents
averred as the plaintiffs that their parents, the late spouses Maximo S. Alvarez, Sr. and
Valentina Clave, were the registered owners of that parcel of land covered by Transfer
Certificate of Title (TCT) No. 84797 of the Register of Deeds of Manila; that their parents had
been in possession of the property during their lifetime; that upon their parents’ deaths, they
had continued the possession of the property as heirs, paying the real property taxes due
thereon; that they could not locate the owner’s duplicate copy of TCT No. 84797, but the
original copy of TCT No. 84797 on file with the Register of Deeds of Manila was intact; that the
original copy contained an entry stating that the property had been sold to defendant Prodon
subject to the right of repurchase; and that the entry had been maliciously done by Prodon
because the deed of sale with right to repurchase covering the property did not exist.
Consequently, they prayed that the entry be cancelled, and that Prodon be adjudged liable for
damages.
The entry sought to be cancelled reads:
ENTRY NO. 3816/T-84797 – SALE W/ RIGHT TO REPURCHASE IN FAVOR OF: MARGARITA
PRODON, SINGLE, FOR THE SUM OF ₱120,000.00, THE HEREIN REGISTERED OWNER RESERVING
FOR HIMSELF THE RIGHTS TO REPURCHASE SAID PROPERTY FOR THE SAME AMOUNT WITHIN
THE PERIOD OF SIX MONTH (sic) FROM EXECUTION THEREOF. OTHER CONDITION SET FORTH IN
(DOC. NO. 321, PAGE 66, BOOK NO. VIII OF LISEO A. RAZON, NOT.PUB. OF MANILA)
DATE OF INSTRUMENT – SEPT. 9, 1975
DATE OF INSCRIPTION – SEPT. 10, 1975,
AT 3:42 P.M.4
In her answer,5 Prodon claimed that the late Maximo Alvarez, Sr. had executed on September 9,
1975 the deed of sale with right to repurchase; that the deed had been registered with the
Register of Deeds and duly annotated on the title; that the late Maximo Alvarez, Sr. had been
granted six months from September 9, 1975 within which to repurchase the property; and that
she had then become the absolute owner of the property due to its non-repurchase within the
given 6-month period.
During trial, the custodian of the records of the property attested that the copy of the deed of
sale with right to repurchase could not be found in the files of the Register of Deeds of Manila.
On November 5, 1997, the RTC rendered judgment, 6 finding untenable the plaintiffs’ contention
that the deed of sale with right to repurchase did not exist. It opined that although the deed
itself could not be presented as evidence in court, its contents could nevertheless be proved by
secondary evidence in accordance with Section 5, Rule 130 of the Rules of Court, upon proof of
its execution or existence and of the cause of its unavailability being without bad faith. It found
that the defendant had established the execution and existence of the deed, to wit:
In the case under consideration, the execution and existence of the disputed deed of sale with
right to repurchase accomplished by the late Maximo Alvarez in favor of defendant Margarita
Prodon has been adequately established by reliable and trustworthy evidences (sic). Defendant
Prodon swore that on September 9, 1975 she purchased the land covered by TCT No. 84747
(Exhibit 1) from its registered owners Maximo S. Alvarez, Sr. and Valentina Clave (TSN, Aug. 1,
1997, pp.5-7); that the deed of sale with right to repurchase was drawn and prepared by Notary
Public Eliseo Razon (Ibid., p. 9); and that on September 10, 1975, she registered the document
in the Register of Deeds of Manila (Ibid., pp.18-19).
The testimony of Margarita Prodon has been confirmed by the Notarial Register of Notary
Public Eliseo Razon dated September 10, 1975 (Exhibit 2), and by the Primary Entry Book of the
Register of Deeds of Manila (Exhibit 4).
Page 66 of Exhibit 2 discloses, among others, the following entries, to wit: "No. 321; Nature of
Instrument: Deed of Sale with Right to Repurchase; Name of Persons: Maximo S. Alvarez and
Valentina Alvarez (ack.); Date and Month: 9 Sept." (Exhibit 2-a).
Exhibit 4, on the other hand, also reveals the following data, to wit: ‘Number of Entry: 3816;
Month, Day and Year: Sept. 10, 1975; Hour and Minute: 3:42 p.m.; Nature of Contract: Sale
with Right to Repurchase; Executed by: Maximo S. Alvarez; In favor: Margarita Prodon; Date of
Document: 9-9-75; Contract value: 120,000.’ (Exhibit 4-a). Under these premises the Court
entertains no doubt about the execution and existence of the controverted deed of sale with
right to repurchase.7
The RTC rejected the plaintiffs’ submission that the late Maximo Alvarez, Sr. could not have
executed the deed of sale with right to repurchase because of illness and poor eyesight from
cataract. It held that there was no proof that the illness had rendered him bedridden and
immobile; and that his poor eyesight could be corrected by wearing lenses.
The RTC concluded that the original copy of the deed of sale with right to repurchase had been
lost, and that earnest efforts had been exerted to produce it before the court. It believed Jose
Camilon’s testimony that he had handed the original to one Atty. Anacleto Lacanilao, but that
he could not anymore retrieve such original from Atty. Lacanilao because the latter had
meanwhile suffered from a heart ailment and had been recuperating.
Ruling of the CA
On appeal, the respondents assigned the following errors, namely:
A.
THE TRIAL COURT GRAVELY ERRED IN FINDING THAT THE DUE EXECUTION AND EXISTENCE OF
THE QUESTIONED DEED OF SALE WITH RIGHT TO REPURCHASE HAS BEEN DULY PROVED BY THE
DEFENDANT.
B.
THE TRIAL COURT GRAVELY ERRED IN ADMITTING THE PIECES OF EVIDENCE PRESENTED BY THE
DEFENDANTS AS PROOFS OF THE DUE EXECUTION AND EXISTENCE OF THE QUESTIONED DEED
OF SALE WITH RIGHT TO REPURCHASE.
C.
THE TRIAL COURT SERIOUSLY ERRED IN FINDING THAT THE QUESTIONED DEED OF SALE WITH
RIGHT TO REPURCHASE HAS BEEN LOST OR OTHERWISE COULD NOT BE PRODUCED IN COURT
WITHOUT THE FAULT OF THE DEFENDANT.
D.
THE TRIAL COURT GRAVELY ERRED IN REJECTING THE PLAINTIFFS’ CLAIM THAT THEIR FATHER
COULD NOT HAVE EXECUTED THE QUESTIONED DOCUMENT AT THE TIME OF ITS ALLEGED
EXECUTION.8
On August 18, 2005, the CA promulgated its assailed decision, reversing the RTC, and ruling as
follows:
The case of the Department of Education Culture and Sports (DECS) v. Del Rosario in GR No.
146586 (January 26, 2005) is instructive in resolving this issue. The said case held:
"Secondary evidence of the contents of a document refers to evidence other than the original
document itself. A party may introduce secondary evidence of the contents of a written
instrument not only when the original is lost or destroyed, but also when it cannot be produced
in court, provided there is no bad faith on the part of the offeror. However, a party must first
satisfactorily explain the loss of the best or primary evidence before he can resort to secondary
evidence. A party must first present to the court proof of loss or other satisfactory explanation
for non-production of the original instrument. The correct order of proof is as follows:
existence, execution, loss, contents, although the court in its discretion may change this order if
necessary."
It is clear, therefore, that before secondary evidence as to the contents of a document may be
admitted in evidence, the existence of [the] document must first be proved, likewise, its
execution and its subsequent loss.
In the present case, the trial court found all three (3) prerequisites ha[ve] been established by
Margarita Prodon. This Court, however, after going through the records of the case, believes
otherwise. The Court finds that the following circumstances put doubt on the very existence of
the alleged deed of sale. Evidence on record showed that Maximo Alvarez was hospitalized
between August 23, 1975 to September 3, 1975 (Exhibit "K"). It was also established by said
Exhibit "L" that Maximo Alvarez suffered from paralysis of half of his body and blindness due to
cataract. It should further be noted that barely 6 days later, on September 15, 1975, Maximo
Alvarez was again hospitalized for the last time because he died on October of 1975 without
having left the hospital. This lends credence to plaintiffs-appellants’ assertion that their father,
Maximo Alvarez, was not physically able to personally execute the deed of sale and puts to
serious doubt [on] Jose Camilion’s testimony that Maximo Alvarez, with his wife, went to his
residence on September 5, 1975 to sell the property and that again they met on September 9,
1975 to sign the alleged deed of sale (Exhibits "A" and "1"). The Court also notes that from the
sale in 1975 to 1996 when the case was finally filed, defendant-appellee never tried to recover
possession of the property nor had she shown that she ever paid Real Property Tax thereon.
Additionally, the Transfer Certificate of Title had not been transferred in the name of the
alleged present owner. These actions put to doubt the validity of the claim of ownership
because their actions are contrary to that expected of legitimate owners of property.
Moreover, granting, in arguendo, that the deed of sale did exist, the fact of its loss had not
been duly established. In De Vera, et al. v Sps. Aguilar (218 SCRA 602 1993), the Supreme Court
held that after proof of the execution of the Deed it must also be established that the said
document had been lost or destroyed, thus:
"After the due execution of the document has been established, it must next be proved that
said document has been lost or destroyed. The destruction of the instrument may be proved by
any person knowing the fact. The loss may be shown by any person who knew the fact of its
loss, or by anyone who had made, in the judgment of the court, a sufficient examination in the
place or places where the document or papers of similar character are usually kept by the
person in whose custody the document lost was, and has been unable to find it; or who has
made any other investigation which is sufficient to satisfy the court that the instrument is
indeed lost.
However, all duplicates or counterparts must be accounted for before using copies. For, since
all the duplicates or multiplicates are parts of the writing itself to be proved, no excuse for non-
production of the writing itself can be regarded as established until it appears that all of its
parts are unavailable (i.e. lost, retained by the opponent or by a third person or the like).
In the case at bar, Atty. Emiliano Ibasco, Jr., notary public who notarized the document testified
that the alleged deed of sale has about four or five original copies. Hence, all originals must be
accounted for before secondary evidence can be given of any one. This[,] petitioners failed to
do. Records show that petitioners merely accounted for three out of four or five original
copies." (218 SCRA at 607-608)
In the case at bar, Jose Camilion’s testimony showed that a copy was given to Atty. Anacleto
Lacanilao but he could not recover said copy. A perusal of the testimony does not convince this
Court that Jose Camilion had exerted sufficient effort to recover said copy. x x x
xxxx
The foregoing testimony does not convince this Court that Jose Camilion had exerted sufficient
effort to obtain the copy which he said was with Atty. Lacanilao. It should be noted that he
never claimed that Atty. Lacanilao was already too sick to even try looking for the copy he had.
But even assuming this is to be so, Jose Camilion did not testify that Atty. Lacanilao had no one
in his office to help him find said copy. In fine, this Court believes that the trial court erred in
admitting the secondary evidence because Margarita Prodon failed to prove the loss or
destruction of the deed.
In fine, the Court finds that the secondary evidence should not have been admitted because
Margarita Prodon failed to prove the existence of the original deed of sale and to establish its
loss.
xxxx
WHEREFORE, in view of the foregoing, the Decision of the Regional Trial Court of Manila,
Branch 35 in Civil Case No. 96-78481 is hereby REVERSED and a new one entered ordering the
cancellation of Entry No. 3816/T-84797 inscribed at the back of TCT No. 84797 in order to
remove the cloud over plaintiff-appellants’ title.
SO ORDERED.9
The heirs of Margarita Prodon (who meanwhile died on March 3, 2002) filed an Omnibus
Motion for Substitution of Defendant and for Reconsideration of the Decision, 10 wherein they
alleged that the CA erred: (a) in finding that the pre-requisites for the admission of secondary
evidence had not been complied with; (b) in concluding that the late Maximo Alvarez, Sr. had
been physically incapable of personally executing the deed of sale with right to repurchase; and
(c) in blaming them for not recovering the property, for not paying the realty taxes thereon, and
for not transferring the title in their names.
On November 22, 2005, the CA issued itsresolution,11 allowing the substitution of the heirs of
Margarita Prodon, and denying their motion for reconsideration for its lack of merit.
Hence, the heirs of Margarita Prodon (petitioners) have appealed to the Court through petition
for review on certiorari.
Issues
In this appeal, the petitioners submit the following as issues, namely: (a) whether the pre-
requisites for the admission of secondary evidence had been complied with; (b) whether the
late Maximo Alvarez, Sr. had been physically incapable of personally executing the deed of sale
with right to repurchase;and (c) whether Prodon’s claim of ownership was already barred by
laches.12
Ruling
The appeal has no merit.
1.
Best Evidence Rulewas not applicable herein
We focus first on an unseemly error on the part of the CA that, albeit a harmless one, requires
us to re-examine and rectify in order to carry out our essential responsibility of educating the
Bench and the Bar on the admissibility of evidence. An analysis leads us to conclude that the CA
and the RTC both misapplied the Best Evidence Rule to this case, and their misapplication
diverted the attention from the decisive issue in this action for quieting of title. We shall
endeavor to correct the error in order to turn the case to the right track.
Section 3, Rule 130 of the Rules of Court embodies the Best Evidence
Rule, to wit:
Section 3. Original document must be produced; exceptions. — When the subject of inquiry is
the contents of a document, no evidence shall be admissible other than the original document
itself, except in the following cases:
(a) When the original has been lost or destroyed, or cannot be produced in court,
without bad faith on the part of the offeror;
 (b) When the original is in the custody or under control of the party against whom the
evidence is offered, and the latter fails to produce it after reasonable notice;
(c) When the original consists of numerous accounts or other documents which cannot
be examined in court without great loss of time and the fact sought to be established
from them is only the general result of the whole; and
(d) When the original is a public record in the custody of a public officer or is recorded in
a public office.
The Best Evidence Rule stipulates that in proving the terms of a written document the original
of the document must be produced in court. The rule excludes any evidence other than the
original writing to prove the contents thereof, unless the offeror proves: (a) the existence or
due execution of the original; (b) the loss and destruction of the original, or the reason for its
non-production in court; and (c) the absence of bad faith on the part of the offeror to which the
unavailability of the original can be attributed.13
The primary purpose of the Best Evidence Rule is to ensure that the exact contents of a writing
are brought before the court,14 considering that (a) the precision in presenting to the court the
exact words of the writing is of more than average importance, particularly as respects
operative or dispositive instruments, such as deeds, wills and contracts, because a slight
variation in words may mean a great difference in rights; (b) there is a substantial hazard of
inaccuracy in the human process of making a copy by handwriting or typewriting; and (c) as
respects oral testimony purporting to give from memory the terms of a writing, there is a
special risk of error, greater than in the case of attempts at describing other situations
generally.15 The rule further acts as an insurance against fraud.16 Verily, if a party is in the
possession of the best evidence and withholds it, and seeks to substitute inferior evidence in its
place, the presumption naturally arises that the better evidence is withheld for fraudulent
purposes that its production would expose and defeat.17 Lastly, the rule protects against
misleading inferences resulting from the intentional or unintentional introduction of selected
portions of a larger set of writings.18
But the evils of mistransmission of critical facts, fraud, and misleading inferences arise only
when the issue relates to the terms of the writing. Hence, the Best Evidence Rule applies only
when the terms of a writing are in issue. When the evidence sought to be introduced concerns
external facts, such as the existence, execution or delivery of the writing, without reference to
its terms, the Best Evidence Rule cannot be invoked.19 In such a case, secondary evidence may
be admitted even without accounting for the original.
This case involves an action for quieting of title, a common-law remedy for the removal of any
cloud or doubt or uncertainty on the title to real property by reason of any instrument, record,
claim, encumbrance, or proceeding that is apparently valid or effective, but is, in truth and in
fact, invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title. In such
an action, the competent court is tasked to determine the respective rights of the complainant
and other claimants to place things in their proper place and to make the one who has no rights
to said immovable respect and not disturb the other. The action is for the benefit of both, so
that he who has the right would see every cloud of doubt over the property dissipated, and he
can thereafter fearlessly introduce any desired improvements, as well as use, and even abuse
the property. For an action to quiet title to prosper, two indispensable requisites must concur,
namely: (a) the plaintiff or complainant has a legal or an equitable title to or interest in the real
property subject of the action; and (b) the deed, claim, encumbrance, or proceeding claimed to
be casting cloud on his title must be shown to be in fact invalid or inoperative despite its prima
facie appearance of validity or legal efficacy.20
The action for quieting of title may be based on the fact that a deed is invalid, ineffective,
voidable, or unenforceable. The terms of the writing may or may not be material to an action
for quieting of title, depending on the ground alleged by the plaintiff. For instance, when an
action for quieting of title is based on the unenforceability of a contract for not complying with
the Statute of Frauds, Article 1403 of the Civil Code specifically provides that evidence of the
agreement cannot be received without the writing, or a secondary evidence of its contents.
There is then no doubt that the Best Evidence Rule will come into play.
It is not denied that this action does not involve the terms or contents of the deed of sale with
right to repurchase. The principal issue raised by the respondents as the plaintiffs, which
Prodon challenged head on, was whether or not the deed of sale with right to repurchase, duly
executed by the late Maximo Alvarez, Sr., had really existed. They alleged in the complaint that:
xxxx
9. Such entry which could have been maliciously and deliberately done by the defendant
Margarita Prodon created cloud and [is] prejudicial to the title of the property subject matter of
this case, since while it is apparently valid or effective, but in truth and in fact it is invalid,
ineffective or unenforceable inasmuch that the instrument purporting to be a Deed of Sale with
right of repurchase mentioned in the said entry does not exist.21
xxxx
On her part, Prodon specifically denied the allegation, averring in her answer that "sometime
[o]n September 9, 1975, deceased Maximo S. Alvarez lawfully entered into a Contract of Sale
with Right to Repurchase, object of which is the titled lot located at Endaya Street, Tondo,
Manila, in favor of defendant."22 In the pre-trial order, the RTC defined the issue to be tried as
"[w]hether or not the alleged document mentioned in the said entry is existing, valid or
unenforceable,"23 and did not include the terms of the deed of sale with right to repurchase
among the issues.
Apparently, the parties were fully cognizant of the issues as defined, for none of them
thereafter ventured to present evidence to establish the terms of the deed of sale with right to
repurchase. In the course of the trial, however, a question was propounded to Prodon as to
who had signed or executed the deed, and the question was objected to based on the Best
Evidence Rule. The RTC then sustained the objection.24 At that point began the diversion of the
focus in the case. The RTC should have outrightly overruled the objection because the fact
sought to be established by the requested testimony was the execution of the deed, not its
terms.25 Despite the fact that the terms of the writing were not in issue, the RTC inexplicably
applied the Best Evidence Rule to the case and proceeded to determine whether the requisites
for the admission of secondary evidence had been complied with, without being clear as to
what secondary evidence was sought to be excluded. In the end, the RTC found in its judgment
that Prodon had complied with the requisites for the introduction of secondary evidence, and
gave full credence to the testimony of Jose Camilon explaining the non-production of the
original. On appeal, the CA seconded the RTC’s mistake by likewise applying the Best Evidence
Rule, except that the CA concluded differently, in that it held that Prodon had not established
the existence, execution, and loss of the original document as the pre-requisites for the
presentation of secondary evidence. Its application of the Best Evidence Rule naturally led the
CA to rule that secondary evidence should not have been admitted, but like the RTC the CA did
not state what excluded secondary evidence it was referring to.
Considering that the Best Evidence Rule was not applicable because the terms of the deed of
sale with right to repurchase were not the issue, the CA did not have to address and determine
whether the existence, execution, and loss, as pre-requisites for the presentation of secondary
evidence, had been established by Prodon’s evidence. It should have simply addressed and
determined whether or not the "existence" and "execution" of the deed as the facts in issue
had been proved by preponderance of evidence.
Indeed, for Prodon who had the burden to prove the existence and due execution of the deed
of sale with right to repurchase, the presentation of evidence other than the original document,
like the testimonies of Prodon and Jose Camilon, the Notarial Register of Notary Eliseo Razon,
and the Primary Entry Book of the Register of Deeds, would have sufficed even without first
proving the loss or unavailability of the original of the deed.
2.
Prodon did not preponderantly establish the existence and due execution of the deed of sale
with right to repurchase
The foregoing notwithstanding, good trial tactics still required Prodon to establish and explain
the loss of the original of the deed of sale with right to repurchase to establish the genuineness
and due execution of the deed.26 This was because the deed, although a collateral document,
was the foundation of her defense in this action for quieting of title. 27 Her inability to produce
the original logically gave rise to the need for her to prove its existence and due execution by
other means that could only be secondary under the rules on evidence. Towards that end,
however, it was not required to subject the proof of the loss of the original to the same strict
standard to which it would be subjected had the loss or unavailability been a precondition for
presenting secondary evidence to prove the terms of a writing.
A review of the records reveals that Prodon did not adduce proof sufficient to show the lossor
explain the unavailability of the original as to justify the presentation of secondary evidence.
Camilon, one of her witnesses, testified that he had given the original to her lawyer, Atty.
Anacleto Lacanilao, but that he (Camilon) could not anymore retrieve the original because Atty.
Lacanilao had been recuperating from his heart ailment. Such evidence without showing the
inability to locate the original from among Atty. Lacanilao’s belongings by himself or by any of
his assistants or representatives was inadequate. Moreover, a duplicate original could have
been secured from Notary Public Razon, but no effort was shown to have been exerted in that
direction.
In contrast, the records contained ample indicia of the improbability of the existence of the
deed. Camilon claimed that the late Maximo Alvarez, Sr. had twice gone to his residence in
Meycauayan, Bulacan, the first on September 5, 1975, to negotiate the sale of the property in
question, and the second on September 9, 1975, to execute the deed of sale with right to
repurchase, viz:
Q
Do you also know the deceased plaintiff in this case, Maximo Alvarez, Sr. and his wife Valentina
Clave, Mr. Witness?
A
Yes, sir.
Q
A
Q
Under what circumstance were you able to know the deceased plaintiff Maximo Alvarez, Sr.
and his wife?
When they went to our house, sir.
When was this specifically?
A
Sometime the first week of September or about September 5, 1975, sir.
Q
What was the purpose of the spouses Maximo and Valentina in meeting you on that date?
A
They were selling a piece of land, sir.
xxxx
Q
At the time when the spouses Maximo Alvarez, Sr. and Valentina Clave approached you to sell
their piece of land located at Endaya, Tondo, Manila, what document, if any, did they show
you?
A
The title of the land, sir.
xxxx
Q
You said that on the first week of September or September 5, 1975 spouses Maximo and
Valentina approached you at the time, what did you tell the spouses, if any?
A
I asked them to come back telling them that I was going to look for a buyer, sir.
xxxx
Q
You said that you told the spouse[s] Alvarez to just come back later and that you will look for a
buyer, what happened next, if any?
A
I went to see my aunt Margarita Prodon, sir.
Q
A
What did you tell your aunt Margarita Prodon?
I convinced her to buy the lot.
ATTY. REAL
Q
What was the reply of Margarita Prodon, if any?
A
She agreed, provided that she should meet the spouses, sir.
Q
After Margarita Prodon told you that[,] what happened next, if any?
A
I waited for the spouses Alvarez to bring them to my aunt, sir.
Q
Were you able to finally bring the spouses before Margarita Prodon?
A
Valentina Clave returned to our house and asked me if they can now sell the piece of land, sir.
Q
What did you tell Valentina Clave?
A
Q
We went to the house of my aunt so she can meet her personally, sir.
And did the meeting occur?
WITNESS
A
Yes, sir.
ATTY. REAL
Q
What happened at the meeting?
A
I told Valentina Clave in front of the aunt of my wife that they, the spouses, wanted to sell the
land, sir.
Q
What was the reply of your aunt Margarita Prodon at the time?
A
That Valentina Clave should come back with her husband because she was going to buy the lot,
sir.28
The foregoing testimony could not be credible for the purpose of proving the due execution of
the deed of sale with right to repurchase for three reasons.1âwphi1
The first is that the respondents preponderantly established that the late Maximo Alvarez, Sr.
had been in and out of the hospital around the time that the deed of sale with right to
repurchase had been supposedly executed on September 9, 1975. The records manifested that
he had been admitted to the Veterans Memorial Hospital in Quezon City on several occasions,
and had then been diagnosed with the serious ailments or conditions, as follows:
Period of confinement Diagnosis
March 31 – May 19, 1975 • Prostatitis, chronic
• Arteriosclerotic heart
disease
• Atrial fibrillation
• Congestive heart failure
• CFC III29
June 2- June 6, 1975 • Chest pains (Atrial Flutter)
• Painful urination (Chronic
prostatitis)30
 August 23-September 3, • Arteriosclerotic heart
1975 disease
• Congestive heart failure,
mild
• Atrial fibrillation
• Cardiac functional capacity
III-B31
September 15-October 2, • Arteriosclerotic heart
1975 disease
• Atrial fibrillation
• Congestive heart failure
• Pneumonia
• Urinary tract infection
• Cerebrovascular accident,
old
• Upper GI bleeding probably
secondary to stress ulcers32

The medical history showing the number of very serious ailments the late Maximo Alvarez, Sr.
had been suffering from rendered it highly improbable for him to travel from Manila all the way
to Meycauayan, Bulacan, where Prodon and Camilon were then residing in order only to
negotiate and consummate the sale of the property. This high improbability was fully confirmed
by his son, Maximo, Jr., who attested that his father had been seriously ill, and had been in and
out of the hospital in 1975.33 The medical records revealed, too, that on September 12, 1975, or
three days prior to his final admission to the hospital, the late Maximo Alvarez, Sr. had suffered
from "[h]igh grade fever, accompanied by chills, vomiting and cough productive of whitish
sticky sputum;"had been observed to be "conscious" but "weak" and "bedridden" with his heart
having "faint" sounds, irregular rhythm, but no murmurs; and his left upper extremity and left
lower extremity had suffered 90% motor loss.34 Truly, Prodon’s allegation that the deed of sale
with right to repurchase had been executed on September 9, 1975 could not command belief.
The second is that the annotation on TCT No. 84797 of the deed of sale with right to repurchase
and the entry in the primary entry book of the Register of Deeds did not themselves establish
the existence of the deed. They proved at best that a document purporting to be a deed of sale
with right to repurchase had been registered with the Register of Deeds. Verily, the registration
alone of the deed was not conclusive proof of its authenticity or its due execution by the
registered owner of the property, which was precisely the issue in this case. The explanation for
this is that registration, being a specie of notice, is simply a ministerial act by which an
instrument is inscribed in the records of the Register of Deeds and annotated on the dorsal side
of the certificate of title covering the land subject of the instrument. 35 It is relevant to mention
that the law on land registration does not require that only valid instruments be registered,
because the purpose of registration is only to give notice.36
By the same token, the entry in the notarial register of Notary Public Razon could only be proof
that a deed of sale with right to repurchase had been notarized by him, but did not establish
the due execution of the deed.
The third is that the respondents’ remaining in the peaceful possession of the property was
further convincing evidence demonstrating that the late Maximo Alvarez, Sr. did not execute
the deed of sale with right to repurchase. Otherwise, Prodon would have herself asserted and
exercised her right to take over the property, legally and physically speaking, upon the
expiration in 1976 of the repurchase period stipulated under the deed, including transferring
the TCT in her name and paying the real property taxes due on the properly. Her inaction was
an index of the falsity of her claim against the respondents.
In view of the foregoing circumstances, we concur with the CA that the respondents
preponderantly, proved that the deed of sale with right to repurchase executed by the late
Maximo Alvarez, Sr. did not exist in fact.
WHEREFORE, the Court AFFIRMS the decision promulgated on August 18, 2005 by the Court of
Appeals in C.A.-G.R. CV No. 58624 entitled Heirs of Maximo S. Alvarez and Valentina Clave,
represented by Rev. Maximo Alvarez, Jr. v. Margarita Prodon and the Register of Deeds of the
City Manila; and ORDERS the petitioners to pay the costs of suit.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No.198878               October 15, 2014
RESIDENTS OF LOWER ATAB & TEACHERS' VILLAGE, STO. TOMAS PROPER BARANGAY,
BAGUIO CITY, represented by BEATRICE T. PULAS, CRISTINA A. LAPP AO. MICHAEL MADIGUID,
FLORENCIO MABUDYANG and FERNANDO DOSALIN, Petitioners,
vs.
STA. MONICA INDUSTRIAL & DEVELOPMENT CORPORATION, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 seeks to set aside: 1) the August 5, 2011 Decision2 of the
Court of Appeals (CA) in CA-G.R. CV No. 84561 which affirmed the December 6, 2004
Decision3 of the Regional Trial Court of Baguio City (Baguio RTC), Branch 6 in Civil Case No.
4946-R; and 2) the CA October 3, 2011 Resolution 4 denying herein petitioners' Motion for
Reconsider.5
Factual Antecedents
In May 2001, petitioners – residents of Lower Atab & Teachers’ Village, Sto. Tomas Proper
Barangay, Baguio City – filed a civil case for quieting of title with damages against respondent
Sta. Monica Industrial and DevelopmentCorporation. The case was docketed as Civil Case No.
4946-R and assigned to Branch 59 of the Baguio RTC.6 The Complaint7 in said case essentially
alleged that petitioners are successors and transferees-in-interest of Torres, the supposed
owner of an unregistered parcel of land in Baguio City (the subject property, consisting of
177,778 square meters) which Torres possessed and declared for tax purposes in 1918; that
they are in possession of the subject property in the concept of owner, declared their
respective lots and homes for tax purposes, and paid the real estate taxes thereon; that in May
2000, respondent began to erect a fence on the subject property, claiming that it is the owner
of a large portion thereof8 by virtue of Transfer Certificate of Title No. T-63184 9 (TCT No. T-
63184); that said TCT No. T-63184 is null and void, as it was derived from Original Certificate of
Title No. O-281 (OCT No. O-281), which was declared void pursuant to Presidential Decree No.
127110 (PD 1271) and in the decided case of Republic v. Marcos;11 and that TCT No. T-63184 is a
cloud upon their title and interests and should therefore be cancelled. Petitioners thus prayed
that respondent’s TCT No. T-63184 be surrendered and cancelled; that actual, moral and
exemplary damages, attorney’s fees, legal expenses, and costs be awarded in their favor; and
finally, that injunctive relief be issued against respondent to prevent it from selling the subject
property.
In its Answer with Special Affirmative Defenses and Counterclaim, 12 respondent claimed that
petitioners have no cause of action; that TCT No. T- 63184 is a valid and subsisting title; that the
case for quieting of title constitutes a collateral attack upon TCT No. T-63184; and that
petitioners have no title to the subject property and are mere illegal occupants thereof. Thus, it
prayed for the dismissal of Civil Case No. 4946-R and an award of exemplary damages,
attorney’s fees, litigation expenses, and costs in its favor.
In their Pre-Trial Brief13 and Memorandum,14 petitioners acknowledged that while they declared
their respective lots for tax purposes, they applied for the purchase of the same – through
Townsite Sales applications – with the Department of Environment and Natural Resources
(DENR).
Ruling of the Regional Trial Court
After trial, the Baguio RTC issued a Decision15 dated December 6, 2004, the dispositive portion
of which reads:
WHEREFORE, Judgment is hereby rendered in favor of defendant Sta. Monica Industrial and
Development Corporation and against the plaintiffs, as follows:
1. Dismissing the Complaint for Quieting of Title and Damages with Prayer for a Writ of
Preliminary Injunction of plaintiffs;
2. Dismissing likewise the counterclaim for Damages and attorney’s fees of defendant
corporation since it has not been shown that the plaintiffs acted in bad faith in filing the
Complaint. Without pronouncement as to costs.
SO ORDERED.16
The trial court held that Civil Case No. 4946-R constitutes a collateral attack upon respondent’s
TCT No. T-63184, which became indefeasible after one year from the entry of the decree of
registration thereof. It held that if it is claimed that respondent’s title is void, then a direct
proceeding should have been filed by the State to annul it and to secure reversion of the land;
petitioners have no standing to do so through a quieting of title case. The trial court added that
TCT No. T-63184 is a subsisting title; its validity was confirmed through the annotation therein
by the Baguio City Register of Deeds – Entry No. 184804-21-159 17 – that TCT No. T-27096, from
which TCT No. T-63184 was derived, was validated by the PD 1271 Committee in a May 9, 1989
Resolution; that petitioners could not present any title to the subject property upon which to
base their case for quieting of title, and have failed to show during trial that they have a cause
of action against respondent.
Petitioners filed a Motion for Reconsideration, 18 but the trial court denied the same in a January
17, 2004 Resolution.19
Ruling of the Court of Appeals
In an appeal to the CA which was docketed as CA-G.R. CV No. 84561, petitioners insisted that
they have a cause of action against respondent for quieting of title and damages; that Civil Case
No. 4946-R is not a collateral attack upon respondent’s title; that Civil Case No. 4946-R is not a
case for reversion and annulment of title which could only be filed by the State; and that the
trial court erred in finding that respondent’s title was validated in accordance with law.
On August 5, 2011, the CA issued the assailed Decision affirming the trial court, thus:
In this case, plaintiffs-appellants20 are without any title to be cleared of or to be quieted nor can
they be regarded as having equitable title over the subject property. Ballantine’s Law Dictionary
defines an equitable title as follows:
"A title derived through a valid contract or relation, and based on recognized equitable
principles; the right in the party, to whom it belongs, to have the legal title transferred to him
(15 Cyc. 1097; 16 Id. 90). In order that a plaintiff may draw to himself an equitable title, he must
show that the one from whom he derives his right had himself a right to transfer. x x x"
xxxx
In the instant case, plaintiffs-appellants cannot find refuge in the tax declarations and receipts
under their names considering that the same are not incontrovertible evidence of ownership.
Moreover, plaintiffs-appellants’ act of questioning the validity of the title of the defendant-
appellee21 constitutes a collateral attack and under Section 48 of P.D. 1529, "a certificate of title
shall not be subject to collateral attack. x x x"
xxxx
Meantime, it is meet to point out that P.D. 127[1] invoked by plaintiffsappellants themselves,
specifically provides under Section 6 (paragraph 2) thereof that "the Solicitor General shall
institute such actions or suits as may be necessary to recover possession of lands covered by all
void titles not validated under this Decree." Hence, the Office of the Solicitor General, being
mandated by law, must be the proper party to institute actions to recover lands covered by
void titles under the said decree x x x.
xxxx
As regards the validation of TCT No. T-63184 x x x, no error was committed by the Court a quo
in ruling that the same is in accordance with law. It is important to note that the validation of
the subject TCT was never disputed by the Register of Deeds or any other government agency.
Moreover, there is no showing that the TCT of the defendant-appellee and the OCT wherein it
was derived were declared null and void by virtue of Pres. Decree No. 1271. While the TCT of
the defendant-appellee was issued under L.R.C. Case No. 1, Record No. 211, it was validated in
accordance with law in Entry No. 184804-21-159 annotated at the dorsal side of the subject
title.
xxxx
WHEREFORE, premises considered, the Decision dated December 6, 2004 of the Regional Trial
Court, Branch 6, Baguio City is AFFIRMED in toto.
SO ORDERED.22
Petitioners moved for reconsideration, but in its October 3, 2011 Resolution, the CA stood its
ground. Hence, the instant Petition.
Issues
Petitioners raise the following issues in this Petition:
1. The Trial Court and the Court of Appeals erred in finding that the Petitioners x x x
have no cause of action.
2. The Trial Court and the Court of Appeals erred in finding that the action is a collateral
attack on the Torrens Title of respondent Corporation.
3. The Trial Court and the Court of Appeals erred in finding that the present action is to
annul the title of respondent Corporation due to fraud, [thus] it should be the Solicitor
General who should file the case for reversion.
4. The Trial Court and the Court of Appeals erred in finding that the validation of TCT No.
T-63184 registered in the name of respondent Corporation was in accordance with
law.23
Petitioners’ Arguments
24
In their Petition and Reply,  petitioners seek a reversal of the assailed CA dispositions and the
nullification of respondent’s TCT No. T-63184 so that said title shall not "hinder the approval of
the Townsite Sales Application of the [p]etitioners by the [DENR]-Cordillera Administrative
Region and stop the harassment being done by the Corporation on the [p]etitioners x x
x."25 They argue that they have equitable title over the subject property, having possessed the
same for many years and obtained the rights of their predecessor Torres; that Civil Case No.
4946-R is not a collateral attack upon TCT No. T-63184, as said title is null and void by virtue of
PD 1271 and the ruling in Republic v. Marcos; that there is no need to file a reversion case since
TCT No. T-63184 has been effectively declared void, and respondent is not in possession of the
subject property; and finally, that Entry No. 184804-21-159 cannot have the effect of validating
TCT No. T-63184, because PD 1271 itself states that only certificates of title issued on or before
July 31, 1973 are considered valid.26 Since OCT No. O-281 – the predecessor title of TCT No. T-
63184 – was issued only on January 28, 1977, it is thus null and void, and all other titles
subsequently issued thereafter, including TCT No. T-63184, are invalid as well.
Respondent’s Arguments
On the other hand, respondent’s Comment27 simply reiterates the pronouncement of the CA.
Consequently, it prays for the denial of the instant Petition.
Our Ruling
The Court denies the Petition.
For an action to quiet title to prosper, two indispensable requisites must be present, namely:
"(1) the plaintiff or complainant has a legal or an equitable title to or interest in the real
property subject of the action; and (2) the deed, claim, encumbrance, or proceeding claimed to
be casting cloud on his title must be shown to be in fact invalid or inoperative despite its prima
facie appearance of validity or legal efficacy." 28
"Legal title denotes registered ownership, while equitable title means beneficial ownership." 29
Beneficial ownership has been defined as ownership recognized by law and capable of being
enforced in the courts at the suit of the beneficial owner. Black’s Law Dictionary indicates that
the term is used in two senses: first, to indicate the interest of a beneficiary in trust property
(also called "equitable ownership"); and second, to refer to the power of a corporate
shareholder to buy or sell the shares, though the shareholder is not registered in the
corporation’s books as the owner. Usually, beneficial ownership is distinguished from naked
ownership, which is the enjoyment of all the benefits and privileges of ownership, as against
possession of the bare title to property.30
Petitioners do not have legal or equitable title to the subject property. Evidently, there are no
certificates of title in their respective names. And by their own admission in their pleadings,
specifically in their pre-trial brief and memorandum before the trial court, they acknowledged
that they applied for the purchase of the property from the government, through townsite
sales applications coursed through the DENR. In their Petition before this Court, they
particularly prayed that TCT No. T-63184 be nullified in order that the said title would not
hinder the approval of their townsite sales applications pending with the DENR.Thus,
petitioners admitted that they are not the owners of the subject property; the same constitutes
state or government land which they would like to acquire by purchase. It would have been
different if they were directly claiming the property as their own as a result of acquisitive
prescription, which would then give them the requisite equitable title. By stating that they were
in the process of applying to purchase the subject property from the government, they
admitted that they had no such equitable title, at the very least, which should allow them to
prosecute a case for quieting of title.
In short, petitioners recognize that legal and equitable title to the subject property lies in the
State.1âwphi1 Thus, as to them, quieting of title is not an available remedy.
Lands within the Baguio Townsite Reservation are public land.31 Laws and decrees such as PD
1271 were passed recognizing ownership acquired by individuals over portions of the Baguio
Townsite Reservation, but evidently, those who do not fall within the coverage of said laws and
decrees – the petitioners included – cannot claim ownership over property falling within the
said reservation. This explains why they have pending applications to purchase the portions of
the subject property which they occupy; they have no legal or equitable claim to the same,
unless ownership by acquisitive prescription is specifically authorized with respect to such
lands, in which case they may prove their adverse possession, if so. As far as this case is
concerned, the extent of petitioners’ possession has not been sufficiently shown, and by their
application to purchase the subject property, it appears that they are not claiming the same
through acquisitive prescription.
The trial and appellate courts are correct in dismissing Civil Case No. 4946-R; however, they
failed to appreciate petitioners’ admission of lack of equitable title which denies them the
standing to institute a case for quieting of title. Nevertheless, they are not precluded from filing
another case – a direct proceeding to question respondent’s TCT No. T-63184; after all, it
appears that their townsite sales applications are still pending and have not been summarily
dismissed by the government – which could indicate that the subject property is still available
for distribution to qualified beneficiaries. If TCT No. T-63184 is indeed null and void, then such
proceeding would only be proper to nullify the same. It is just that a quieting of title case is not
an option for petitioners, because in order to maintain such action, it is primarily required that
the plaintiff must have legal or equitable title to the subject property – a condition which they
could not satisfy.
With the conclusion arrived at, the Court finds no need to resolve the other issues raised.
WHEREFORE, the Petition is DENIED. The assailed August 5, 2011 Decision and October 3, 2011
Resolution of the Court of Appeals in CA-G.R. CV No. 84561 are AFFIRMED.
SO ORDERED.
 SECOND DIVISION
G.R. No. 200042, July 07, 2016
FELIZARDO T. GUNTALILIB, Petitioner, v. AURELIO Y. DELA CRUZ AND SALOME V. DELA
CRUZ, Respondents.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari  seeks to set aside: 1) the August 10, 2011 Decision2 of the
1

Court of Appeals (CA) in CA-G.R. SP No. 115963 dismissing the Petition for Certiorari in said case
and affirming the January 12, 20103 and June 21, 20104 Orders of the Regional Trial Court (RTC)
of Bayombong, Nueva Vizcaya, Branches 28 and 27, respectively, in Civil Case No. 6975; and 2)
the CA's January 5, 2012 Resolution5 denying herein petitioner's Motion for Reconsideration.

Factual Antecedents

On July 14, 2009, respondents Aurelio and Salome dela Cruz filed a Complaint 6 for "Quieting Of
Titles x x x; Annulment and Cancellation of Unnumbered OCT/Damages," against petitioner
Felizardo Guntalilib and other heirs of Bernardo (or Bernardino) Tumaliuan. The case was
docketed as Civil Case No. 6975 and assigned to Branch 28 of the RTC of Bayombong, Nueva
Vizcaya.

The subject property is Lot 421 located in Nueva Vizcaya consisting of 8,991 square meters and
which, as respondents claimed in their Complaint, was originally registered on August 7, 1916
as Original Certificate of Title (OCT) No. 213. Respondent Aurelio's grandfather, Juan dela Cruz,
later acquired the property in 1919, and Transfer Certificate of Title (TCT) No. R-3 was issued in
his name; when he passed away, the property was inherited by Aurelio's father, Leonor, and, in
lieu of TCT R-3, TCT 14202 was issued in Leonor's favor. Later on, Leonor conveyed the property
to Aurelio and his brother, Joseph, and TCT T-46087 was then issued in their favor. In turn,
Joseph waived ownership in favor of Aurelio by deed of quitclaim dated December 31, 2001, in
which case a new title, TCT T-126545, was issued in Aurelio's name as sole owner.

Respondents claimed further that all this time, the dela Cruz family was in full possession,
occupation and enjoyment of the property, and petitioner and his co-heirs have never set foot
on the property; that later on, Lot 421 was subdivided and new titles were issued in lieu of TCT
T-126545; and that Aurelio sold portions thereof to several individuals, but he remains the
registered owner of the remaining portion.

Respondents likewise alleged that on February 20, 2008, petitioner filed in court a petition,
docketed as LRC Case No. 6544 and assigned to the Bayombong, Nueva Vizcaya RTC, Branch 29,
for reconstitution or issuance of a new certificate of title in lieu of an allegedly lost unnumbered
OCT which was issued on August 29, 1916 in the name of petitioner's predecessor, Bernardo
Tumaliuan, and covering the very same property, or Lot 421, which they owned; that said
petition was eventually granted, and the Nueva Vizcaya Register of Deeds was ordered to issue
another owner's duplicate copy of their predecessor's supposed unnumbered OCT; and that
said unnumbered OCT constituted a cloud upon their titles that must necessarily be removed.

Petitioner and his co-defendants filed a Motion to Dismiss7 Civil Case No. 6975, arguing that the
Complaint stated no cause of action; that the case constituted a collateral attack on their
unnumbered OCT; that respondents failed to implead all the heirs of Bernardo Tumaliuan, who
are indispensable parties to the case; and that the Complaint's verification and certification on
non-forum shopping were defective.

Respondents filed a Motion for Admission of Amended Complaint, 8 with attached Amended
Complaint9 for "Quieting Of Titles x x x; Cancellation of Unnumbered OCT/Damages." Apart
from incorporating the same allegations contained in their original Complaint, respondents
further alleged in said Amended Complaint that their mother title, OCT 213 which was issued
on August 7, 1916, should prevail over the petitioner's unnumbered OCT which was issued only
on August 29, 1916; that petitioner and his co-heirs had prior knowledge of the dela Cruzes'
previous and existing titles, and were never in possession of Lot 421; and that through fraud,
false misrepresentations, and irregularities in the proceedings for reconstitution (LRC Case No.
6544), petitioner was able to secure a copy of his predecessor's supposed unnumbered OCT.
Respondents prayed, thus:
WHEREFORE, premises considered, it is most respectfully prayed that after trial in this case, this
Honorable Court issue a judgment in favor of Plaintiffs and against, defendants, as follows:

1. Quieting [of] title and ownership over Lot No. 421 and portions thereof, in favor of Plaintiffe,
particularly TCT No. 147078; TCT No. 142232; TCT No. 142233; TCT No. 142235; TCT No.
142236; TCT No. 142237; TCT No. 142239; and TCT Nos. 142241 thru 142245 and all such titles
of individuals who acquired title to portions of Lot No. 421 from Plaintiffs;

2. An order directing the cancellation of the Unnumbered Original Certificate of Title to Lot 421
in the name of Bernardo Tumaliuan;

3. An order directing defendants to pay plaintiffs moral damages in the amount of P100,000.00;

4. Ordering defendants to reimburse plaintiffs for their attorney's fees, appearance fee and
costs of this suit.

5. Any such other relief as may be just and fair under the attendant circumstances. 10cralawred

Petitioner and his co-defendants opposed the Motion for Admission of Amended Complaint,
arguing in their Opposition (Ad Cautelam)11 that the motion was a mere scrap of paper because
it did not comply with Sections 4, 5 and 6 of Rule 15 of the 1997 Rules of Civil Procedure 12 (1997
Rules), as no date of hearing was set and the motion was addressed to the Clerk of Court alone;
that the verification and certification on non-forum shopping contained in the original
Complaint, being defective, could not be cured by the subsequent filing of the Amended
Complaint; and that the Amended Complaint was improper and prohibited, as it is essentially
aimed at setting aside the Decision in LRC Case No. 6544 issued by a court of concurrent
jurisdiction.

On January 12, 2010, the trial court in Civil Case No. 6975 issued an Order 13 admitting
respondents' Amended Complaint and denying petitioner's Motion to Dismiss. It held that -
Assuming arguendo that this Court shall treat the Motion for Admission of Amended Complaint
as not filed, this Court is still duty bound to recognize the right of herein plaintiff under Rule 10
Section 2 where plaintiffs are allowed as a matter of right to file their amended complaint
anytime before a responsive pleading is filed. Considering that a Motion to Dismiss is not a
responsive pleading, this Court has no other recourse but to allow plaintiffs to submit their
amended complaint.

With respect to the contention of the defendants that the complaint did not raise any cause of
action, this Court x x x is in the belief that the plaintiff may be entitled to the relief sought for
after exhaustively trying the case on the merits. On that note, considering the quantum of
documentary evidence adduced by the plaintiff herein, this Court is inclined to try the case on
the merits.

With respect to the contention of the defendants that the complaint failed to include and
implead all indispensable parties, this Court construes the cited case of Teresita V. Orbeta vs.
Paul B. Sendiong x x x that the High Court contemplated "the absence of an indispensable
party" and not the "absence of all indispensable parties". As this Court is in the belief that
plaintiff had impleaded some indispensable parties, then a trial on the merits should proceed.

Defendants likewise had raised as an issue that a Decision rendered by Regional Trial Court
Branch 29, Bayombong, Nueva Vizcaya, particularly LRC Case No. 6544 x x x rendered on July
21, 2008 should bar any inquiry with regard to the issue of the ownership of one of the parcels
of land subject of this instant case.

Placing a parcel [of land] under the mantle of the Torrens System does not mean that
ownership thereof can no longer be disputed. Ownership is different from a certificate of title x
x x.

In LRC Case No. 6544, Regional Trial Court Branch 29 adjudicated on the issuance of another
Certificate of Title in favor of petitioner, now defendant in this case, Felizardo T. Guntalilib. In
this instant case, the issue of ownership is being brought to the fore. This distinction should be
heavily noted. Moreover, on closer inquiry, this Court notes the point raised by the Registry of
Deeds of Nueva Vizcaya in its Motion for, Reconsideration to the Decision rendered in LRC Case
No. 6544 xxx:

xxxx

To this Court, it would appear that the issue of ownership remains unsettled and this instant
case will squarely address this issue.
To make out an action to quiet title under the foregoing provision (Article 476 of the Civil Code),
the initiatory pleading has only to set forth allegations showing that (1) the plaintiff has "title to
real property or any interest therein" and (2) the defendant claims an interest therein adverse
to the plaintiffs arising from an instrument, record, claim, encumbrance, or proceeding which is
apparently valid or effective but is in truth and in fact invalid, ineffective, voidable or
unenforceable." x x x

A perusal of the allegations of the initiatory pleadings reveals that an action to quiet title is
proper and this Court shall properly proceed to try this case on the merits.

A reading of the Opposition by the defendants reveals alarming allegations and imputations.

Defendants aver that Mr. Aristotle Mercado, Legal Researcher of this Branch, is allegedly one of
the buyers of the property subject of this instance case from plaintiffs. Consequently,
defendants doubt if the Motion filed by the plaintiffs on September 17,2009 had been read by
the undersigned Judge and as it appears was "kept from the Honorable presiding Judge and the
defendants so that the matter can be submitted for the Court's consideration and approval
immediately upon receipt hereof."

Defendants likewise aver that plaintiffs deliberately absented themselves in the proceedings of
September 22,2009 for unknown reasons.

This Court would like to remind defendants to exercise restraint and caution in imputing
allegations which are unsubstantiated. A perusal of the records would reveal that the plaintiffs
had furnished defendants with a copy of plaintiffs' Motion filed on September 17,2009 per
Registry Receipt No. 234.

To impute on Mr. Mercado as a buyer of the plaintiffs and of allegedly executing acts prejudicial
to defendants' interest and of directly accusing plaintiffs of deliberately absenting themselves
from the proceedings of September 22, 2009 are reasons enough for this Court to warn
defendants to exercise restraint in accusing parties, be it adversary or court personnel.

WHEREFORE, premises considered, this Court hereby admits the Amended Complaint filed by
plaintiffs herein. The Motion to Dismiss filed by defendants is DENIED.

SO ORDERED.14cralawred

Petitioner filed a Motion for Reconsideration;15 meanwhile, the case was re-raffled to Branch 27
of the RTC of Bayombong, Nueva Vizcaya. On June 21, 2010, the trial court issued an
Order16 denying petitioner's Motion for Reconsideration and ordering the defendants in the
case to file their answer.

Ruling of the Court of Appeals

Petitioner filed an original Petition for Certiorari17 with prayer for injunctive relief before the
CA, which was docketed as CA-G.R. SP No. 115963. In seeking reversal of the trial court's
January 12, 2010 and June 21,2010 Orders, petitioner essentially reiterated the arguments
contained in his Motion to Dismiss, adding that the trial court should not have admitted
respondents' Amended Complaint since the original Complaint was a mere scrap of paper as it
was defective in form and substance; that since in the first instance the Complaint was a mere
scrap of paper, then there is no Complaint to be amended; and that the assailed Orders were
null and void.

On August 10, 2011, the CA issued the assailed Decision affirming the trial court's assailed
Orders, pronouncing thus:
The RTC found the allegations in the initiatory pleading proper in the action to quiet title, thus,
was "inclined to try the merits of the case". In a motion to dismiss for failure to state a cause of
action, the inquiry is into the sufficiency and not the veracity, of the material allegations. If the
allegations of the complaint are sufficient in form and substance but their veracity and
correctness are assailed, it is incumbent upon the court to deny the motion to dismiss and
require the defendant to answer and go to trial to prove his defense. The veracity of the
assertions of the parties can be ascertained at the trial of the case on the merits. Further,
Section 3 of Rule 16 of the Rules of Court, the rule in point,
provides:chanRoblesvirtualLawlibrary
"x x x x

Sec. 3. Resolution of motion. After the hearing, the court may dismiss the action, or claim, deny
the motion, or order the amendment of the pleading.

xxxx
As gleaned from the above-quoted provision, there are three (3) courses of action which the
trial court may take in resolving a motion to dismiss, i.e. to grant, to deny, or to allow
amendment of the pleading. We find no grave error on the part of the trial court in denying the
motion to dismiss as the allegations are sufficient to support a cause of action for quieting of
title.

Parenthetically, under Rule 65 of the Revised Rules of Civil Procedure, for

a certiorari proceeding to prosper, there should be a concurrence of the essential requisites, to
wit: (a) the tribunal, board or officer exercising judicial functions has acted without or in excess
of jurisdiction or with grave abuse of discretion amounting to lack or in excess of jurisdiction,
and (b) there is no appeal, nor any plain, speedy and adequate remedy in the ordinary course of
law for the purpose of annulling or modifying the proceeding.

Petitioner's claim that it had no other plain, speedy and adequate remedy is baseless. He can
still file an answer, proceed to trial and meet the issues head-on. An order denying a motion to
dismiss is an interlocutory order which neither terminates nor finally disposes of a case, as it
leaves something to be done by the court before the case is finally decided on the merits. The
general rule is that the denial of a motion to dismiss cannot be questioned in a special civil
action for certiorari which is not intended to correct every controversial interlocutory ruling.
Neither can a denial of a motion to dismiss be the subject of an appeal unless and until a final
judgment or order is rendered.

Quite obviously, this petition filed by petitioner with us is not the proper remedy to assail the
trial court's denial of his motion to dismiss. We reiterate that the special civil action
of certiorari is a remedy designed to correct errors of jurisdiction including commission of grave
abuse of discretion amounting to lack or excess of jurisdiction and not errors of judgment. The
abuse of discretion must be grave, that is, the power is exercised in an arbitrary or despotic
manner by reason of passion or personal hostility. It must be so patent and gross as to amount
to evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act at all
in contemplation of the law. To justify the grant of such extraordinary remedy, the abuse of
discretion must be grave and patent, and it must be shown that discretion was exercised
arbitrarily or despotically. In this case, no such circumstances attended the denial of petitioner's
Motion to Dismiss.

Petitioner further alleged that the trial court committed a procedural infirmity when it gave due
course to the Motion for Admission of Amended Complaint despite non-compliance with
Sections 4,5 and 6 of the Rules of Court and admitted private respondent's Amended
Complaint.

Private respondent's amendment of the complaint was made pursuant to Section 2, Rule 10 of
the Rules of Court. Under the said provision, formal and substantial amendments to a pleading
may be made at anytime before a responsive pleading has been filed. Such amendment is a
matter of right. This means that prior to the filing of an answer, the plaintiff has the absolute
right to amend the complaint.

xxxx

For obvious reasons, petitioner has not filed an answer to controvert the allegations raised by
private respondent. A motion to dismiss is not a responsive pleading, thus, private respondent
may amend its complaint. It cannot be said that the petitioner's rights have been violated by
changes made in the complaint if he has yet to file an answer thereto. In such an event,
petitioner has not presented any defense that can be altered or affected by the amendment of
the complaint in accordance with Section 2 of Rule 10.

Case law dictates that the right granted to the plaintiff under procedural law to amend the
complaint before an answer has been served is not.precluded by the filing of a motion to
dismiss or any other proceeding contesting its sufficiency. Were we to conclude otherwise, the
right to amend a pleading under Section 2, Rule 10 will be rendered nugatory and ineffectual,
since all that a defendant has to do to foreclose this remedial right is to challenge the adequacy
of the complaint before he files an answer. Moreover, amendment of pleadings is favored and
should be liberally allowed in the furtherance of justice in order to determine every case as far
as possible on its merits without regard to technicalities. This principle is generally recognized
to speed up trial and save party litigants from incurring unnecessary expense, so that a full
hearing on the merits of every case may be had and multiplicity of suits avoided. Consequently,
the amendment should be allowed in this case as a matter of right in accordance with the rules.

As for petitioner's application for injunction, we find no compelling reason to pass upon it as
petitioner failed to convince us of the necessity of this relief.

WHEREFORE, premises considered, the petition under consideration is DISMISSED and the
assailed Order dated January 12, 2010 and the Order dated June 21, 2010 are hereby
AFFIRMED.

SO ORDERED.18

Petitioner filed a Motion for Reconsideration,19 which the CA denied in its subsequent January
5,2012 Resolution. Hence, the present Petition.

Meanwhile, on June 29,2012, the trial court issued an Order, 20 stating thus:
In this continuation of pre-trial, Arty. Rosario and Atty. Manuel appeared. The spouses plaintiffs
and the representatives of the defendants, who are defendant [sic] themselves namely,
Felizardo and Mario Guntalilib were also around.

It is observed that in the previous proceedings, the court and the parties encountered difficulty
in knowing who are the registered owners in addition to the plaintiff spouses Dela Cruz and also
the identification of the defendant heirs. To the mind of the court, it would be more convenient
in proceeding with the pre-trial with the complete identification of the present registered
owners and also those heirs so that complete relief would accordingly be given to the parties.
The court directed the plaintiffs to amend the complaint within 30 days from today to identify
the registered owners and for the defendants to make available the names of the heirs. The
counsels suggested that before further proceedings could be had, the plaintiffs should identify
the other registered owners of the property and the defendants to identify the heirs.

SO ORDERED.21cralawred

Issues

In a March 31, 2014 Resolution,22 this Court resolved to give due course to the instant Petition,
which contains the following assignment of errors:
I. THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR OF LAW IN FAILING TO DECLARE
THE COURT A QUO'S ORDERS NULL AND VOID BASED ON THE FOLLOWING
GROUNDS:chanRoblesvirtualLawlibrary
(i) THE RELIEF SOUGHT BY RESPONDENTS IN THE PRESENT ACTION, WHICH IS, TO ANNUL AND
REVERSE THE DECISION OF RTC-BRANCH 29, THAT ORDERED THE ISSUANCE OF OCT WITH
DECREE NO. 54584 IN THE NAME OF BERNARDINO TUMALrUAN, IS IMPROPER FOR AN ACTION
TO QUIET TITLE, THUS, THE COMPLAINT STATES NO CAUSE OF ACTION, WARRANTING THE
PROMPT AND TIMELY DISMISSAL OF THE CASE.

(ii) THE ORIGINAL, AS WELL AS THE AMENDED COMPLAINT OF RESPONDENTS FAILED TO

INCLUDE ALL INDISPENSABLE PARTIES, THUS, THE COURTS A QUO DO NOT HAVE JURISDICTION
OVER THE PERSON OF THESE OMITTED INDIVIDUALS, WARRANTING THE PROMPT DISMISSAL
OF THE CASE.

(iii) FOLLOWING THE DOCTRINE OF NONINTERFERENCE, THE COURTS A QUO HAVE NO

JURISDICTION TO INTERVENE WITH THE PROCEEDINGS OF A COURT OF EQUAL JURISDICTION,
MUCH LESS ANNUL THE FINAL JUDGMENT OF A COEQUAL BRANCH, I.E. RTC BRANCH-29. THUS
RESPONDENTS' COMPLAINT DESERVES OUTRIGHT DISMISSAL.
II. THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR OF LAW WHEN IT DECLARED
THAT THERE IS A PLAIN, SPEEDY AND ADEQUATE REMEDY AVAILABLE TO PETITIONER IN THIS
PRESENT CASE.

III. RESPONDENTS' RIGHT TO AMEND THEIR COMPLAINT BY VIRTUE OF SECTION 2, RULE 20

MUST YIELD TO THE CLEAR AND CATEGORICAL DIRECTIVE OF SECTION 5, RULE 7 OF THE RULES
OF COURT, WHICH STATES THAT "FAILURE TO COMPLY WITH THE REQUIREMENTS ON
VERIFICATION AND CERTIFICATION AGAINST FORUM-SHOPPING SHALL NOT BE CURABLE BY
MERE AMENDMENT OF THE COMPLAINT BUT SHALL BE A CAUSE FOR THE DISMISSAL OF THE
CASE WITHOUT PREJUDICE.

IV. THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR OF LAW WHEN IT DECLARED
THAT AMENDMENT OF PLEADINGS IS FAVORED AND SHOULD BE LIBERALLY ALLOWED IN
CONTRAVENTION WITH THE CLEAR AND UNEQUIVOCAL PROVISIONS OF THE RULES AND
JURISPRUDENCE.23

Petitioner's Arguments

In his Petition and Counter-Manifestation24 seeking reversal of the assailed CA dispositions and

nullification of the January 12, 2010 and June 21, 2010 Orders in Civil Case No. 6975, petitioner
insists that respondents' Complaint for quieting of title constitutes a prohibited collateral attack
of the unnumbered OCT of Bernardo Tumaliuan and an unjustified interference with and
assault on the Decision of a co-equal court in LRC Case No. 6544; that for failure to implead all
indispensable parties, namely, the heirs of Bernardo Tumaliuan and subsequent buyers of
portions of the subject property sold by respondents, respondents' case should be dismissed as
all proceedings taken therein are null and void, following the Court's ruling in Dr. Orbeta v.
Sendiong25 and Speed Distributing Corporation v. Court of Appeals26 to the effect that the failure
to implead all indispensable parties to a case renders all actions of the court null and void; that
Civil Case No. 6975 is in effect an attempt to annul the Decision in LRC Case No. 6544; that
contrary to the CA's declaration, a Petition for Certiorari with the appellate court was the only
speedy and adequate remedy available to him, considering that the proceedings in Civil Case
No. 6975 are fundamentally null and void since the case is precisely being used to collaterally
and illegally attack Bernardo Tumaliuan's title and the Decision in LRC Case No. 6544; and that
the rule of procedure on verification and certification against forum-shopping should override
the rule on amendment; in other words, the trial court should not have admitted respondents'
Amended Complaint since the original Complaint on which it was based was a mere scrap of
paper as it contained a defective verification and certification against forum-shopping, and
being so, there is no valid complaint to speak, of which required amendment.

Respondents' Arguments

In their Compliance with incorporated Comment27 and Memorandum,28 respondents contend

that the failure to implead all the heirs of Bernardo Tumaliuan was cured by the trial court's
June 29, 2012 Order which reflects the parties' agreement arrived at during the pre-trial that
respondents shall amend their complaint to include all the heirs upon being furnished the
names thereof by petitioner and his co-defendants; directing respondents to further amend
their complaint within 30 days in order to.include the registered owners of the subject
property; and for the defendants to disclose the names of all heirs of Bernardo Tumaliuan. They
add that an action by one party asserting his own title to and seeking nullification of another
title covering the same property is deemed to be one for quieting of title, 29 and the nullification
of petitioner's title is merely an incidental result in such action; that since petitioner has not
filed his Answer, they were entitled to amend their complaint as a matter of right, and no
motion to admit their Amended Complaint was even necessary; 30 and that the CA committed no
reversible error in declaring that petitioner's resort to an original Petition for Certiorari was
unwarranted.
Our Ruling

The Court denies the Petition.

Petitioner's claim that respondents' Amended Complaint must be disallowed for failure to
implead all indispensable parties has been rendered moot by the parties' agreement that
respondents shall further amend their complaint after petitioner and his co-defendants furnish
them with the complete list of Bernardo Tumaliuan's heirs. Pursuant to this agreement, the trial
court issued its June 29,2012 Order, which petitioner does not assail.

Next, petitioner's claim that the trial court should not have admitted respondents' Amended
Complaint since the original Complaint on which it was based is void for being a mere scrap of
paper as it contained a defective verification and certification against forum-shopping, is
fundamentally absurd. A party to a civil case is precisely given the opportunity to amend his
pleadings, under certain conditions, in order to correct the mistakes found therein; if one were
to follow petitioner's reasoning, then the rule on amendment of pleadings might just as well be
scrapped, for then no pleading would be susceptible of amendment. In the present case,
respondents' Complaint was amended even before petitioner could file any responsive pleading
thereto; under the 1997 Rules, a party may amend his pleading once as a matter of right at any
time before a responsive pleading is served.31 No motion to admit the same was required; as
the amendment is allowed as a matter of right, prior leave of court was unnecessary. 32 Indeed,
even if such a motion was filed, no hearing was required therefor, because it is not a
contentious motion.

On the final procedural matter that must be tackled, suffice it to state, as the CA did, that as a
general rule, the denial of a motion to dismiss cannot be questioned through a special civil
action for certiorari.
An order denying a motion to dismiss is interlocutory and neither terminates nor finally
disposes of a case; it is interlocutory as it leaves something to be done by the court before the
case is finally decided on the merits.

The denial of a motion to dismiss generally cannot be questioned in a special civil action
for certiorari, as this remedy is designed to correct only errors of jurisdiction and not errors of
judgment. Neither can a denial of a motion to dismiss be the subject of an appeal which is
available only after a judgment or order on the merits has been rendered. Only when the denial
of the motion to dismiss is tainted with grave abuse of discretion can the grant of the
extraordinary remedy of certiorari be justified.33

Such a rule applies especially when, as in this case, the petition is completely lacking in merit.

Moving on to the substantive issues raised, the Court finds without merit petitioner's claim that
respondents' quieting of title case constitutes a prohibited attack on his predecessor Bernardo
Tumaliuan's unnumbered OCT as well as the proceedings in LRC Case No. 6544. It is true that
"the validity of a certificate of title cannot be assailed in an action for quieting of title; an action
for annulment of title is the more appropriate remedy to seek the cancellation of a certificate of
title."34 Indeed, it is settled that a certificate of title is not subject to collateral attack. However,
while respondents' action is denominated as one for quieting of title, it is in reality an action to
annul and cancel Bernardo Tumaliuan's unnumbered OCT. The allegations and prayer in their
Amended Complaint make out a case for annulment and cancellation of title, and not merely
quieting of title: they claim that their predecessor's OCT 213, which was issued on August
7,1916, should prevail over Bernardo Tumaliuan's unnumbered OCT which was issued only on
August 29, 1916; that petitioner and his co-defendants have knowledge of OCT 213 and their
existing titles; that through fraud, false misrepresentations, and irregularities in the
proceedings for reconstitution (LRC Case No. 6544), petitioner was able to secure a copy of his
predecessor's supposed unnumbered OCT; and for these reasons, Bernardo Tumaliuan's
unnumbered OCT should be cancelled. Besides, the case was denominated as one for "Quieting
Of Titles x x x; Cancellation of Unnumbered OCT/Damages."

It has been held that "[t]he underlying objectives or reliefs sought in both the quieting-of-title
and the annulment-of-title cases are essentially the same — adjudication of the ownership of
the disputed lot and nullification of one of the two certificates of title." 35 Nonetheless,
petitioner should not have been so simplistic as to think that Civil Case No. 6975 is merely a
quieting of title case. It is more appropriate to suppose that one of the effects of cancelling
Bernardo Tumaliuan's unnumbered OCT would be to quiet title over Lot 421; in this sense,
quieting of title is subsumed in the annulment of title case.
WHEREFORE, the Petition is DENIED. The August 10, 2011 Decision and January 5, 2012
Resolution of the Court of Appeals in CA-G.R. SP No. 115963 are AFFIRMED.

SO ORDERED.chanroblesvirtuallawlibrary
 SECOND DIVISION
G.R. No. 195908, August 15, 2018
JOSE A. BERNAS AND THE WHARTON RESOURCES GROUP (PHILIPPINES),
INC., Petitioners, v. THE ESTATE OF FELIPE YU HAN YAT, REPRESENTED BY HERO T.
YU, Respondent.

G.R. No. 195910, August 15, 2018

FELOMENA S. MEJIA (DULY SUBSTITUTED BY HEIRS CARMELITA S. PONGOL AND MAGDALENA

S. TUMAMBING), Petitioners, v. FELIPE YU HAN YAT, Respondent.
DECISION
CAGUIOA, J.:
These are consolidated Petitions for Review on Certiorari (Petitions) under Rule 45 of the Rules
of Court assailing the Decision1 of the Court of Appeals (CA) Seventeenth Division dated
December 14, 2010 in CA-G.R. CV No. 82681 and the Resolution 2 dated February 28, 2011
denying the Motion for Reconsideration filed by the petitioners.
Facts
The present case involves a parcel of land known as Lot 824-A-4 (subject property), covered by
Transfer Certificate of Title (TCT) No. RT-28758 (30627) PR-9639 (TCT No. 30627), located at
Brgy. Matandang Balara, Quezon City, consisting of 30,000 square meters, more or less, which
is part of Lot 824 of the Piedad Estate containing an area of 147,072 square meters registered
in the name of respondent Felipe Yu Han Yat (Yu Han Yat).3
Yu Han Yat subdivided the subject property into 60 lots under Subdivision Plan Psd-13-018013,
duly approved by the Bureau of Lands on August 13, 1991, as part of his plan to develop and
convert the subject property.4 As a consequence, TCT No. 30627 was cancelled and derivative
titles, namely TCT Nos. 47294 to 47353 (Yu Han Yat TCTs), were issued in his name. 5
To finance his plan of developing the subject property, Yu Han Yat applied for loans with several
banks using some6 of the Yu Han Yat TCTs as security. However, when the mortgage
instruments7 were presented for registration, the Register of Deeds of Quezon City refused to
record the same on the ground that the Yu Han Yat TCTs overlapped with the boundaries
covered by another title: TCT No. 336663 registered in the name of Esperanza Nava
(Nava).8 However, in Consulta No. 20389 issued on October 15, 1992, the Land Registration
Authority (LRA) reversed the action taken by the Register of Deeds, and ordered the
registration of the mortgage instruments on Yu Han Yat's TCTs. 10
Meanwhile, petitioners Jose A. Bernas (Bernas) and Felomena S. Mejia (Mejia) claimed
ownership over the subject property. They claim that Nava was the registered owner of a parcel
of land covered by TCT No. 336663 until she sold parts of the said lot to Mejia and Gregorio
Galarosa (Galarosa).11 On September 15, 1986, Mejia executed with Nava a Deed of Sale with
Right of Redemption by virtue of which Mejia acquired the real property covered by TCT No.
336663, subject to Nava's right to redeem the same.12 When Nava failed to redeem the
property, Mejia then filed a petition for consolidation of title under her name. The petition was
granted in a Decision dated June 28, 1990 in Civil Case No. Q-90-5211 rendered by Branch 85 of
the Regional Trial Court (RTC) of Quezon City.13
Since TCT No. 336663 bore the annotation "subject to verification," the Register of Deeds of
Quezon City referred the matter to the LRA for consultation. In a Resolution dated March 15,
1991, in LRA Consulta No. 1890,14 the LRA upheld the registrability of TCT No. 336663 in the
name of Mejia. In LRA Consulta No. 1890, the LRA reasoned that a court decision is needed to
categorically determine that the titles from which TCT No. 336663 were derived were spurious
before it could order that the encumbrance was not registrable. Thus:
In his letter of January 22, 1991, the herein petitioner [Register of Deeds of Quezon City]
elevated en consulta to this authority the registrability of the deed of sale with right of
redemption executed by Nava in favor of Mejia, it appearing that Nava's title, Transfer
Certificate of Title no. 336663. contains a memorandum that the same is subject to verification
by the Verification Committee on Questionable Titles which was annotated thereon pursuant to
Ministry of Justice Opinion No. 239 dated November 4, 1982. The only issue, therefore, to be
resolved is whether or not the deed of sale with right of redemption may be registered.
xxxx
Considering that the findings of the Verification Committee that the Dominga Sumulong title
was fabricated and non-existent cannot justify the suspension of registration of deeds affecting
titles derived from Sumulong's reconstituted title and that this Office will be pre-empting the
court's judgment on the matter if it were to suspend registration of documents involving titles it
has administratively determined to be fabricated, there appears to be no more constraint in the
registration of the deed of sale with right of redemption. This is especially true in this case
where the court has already ordered the consolidation of ownership in favor of Felomena S.
Mejia and directed the Register of Deeds to cancel Transfer Certificate of Title No. 336663 and
issue, in lieu thereof, a transfer certificate of title in the name of Mejia. 15 (Underscoring
omitted)
Hence, by virtue of the said Resolution, the Deed of Sale with Right of Redemption was
annotated on the title of the subject property.
On February 21, 1992, Bernas, for and on behalf of Wharton Resources Group (Philippines), Inc.
(Wharton), entered into a Memorandum of Agreement16 with Mejia whereby the latter agreed
to sell to Wharton the parcel of land covered by TCT No. 336663. Subsequently, a Deed of
Sale17 was entered into between Mejia and Wharton conveying to the latter the subject
property.
In April 1992, Bernas discovered that there was another title covering about three hectares
which overlapped a portion of the property registered under TCT No. 336663. 18 This other title,
TCT No. 30627, indicated Yu Han Yat as the registered owner pursuant to subdivision plan Psd-
2498 of a parcel of land located in Bayanbayanan, Marikina. 19
On June 24, 1992, Bernas filed an Affidavit of Adverse Claim on Yu Han Yat's TCTs, claiming that
a Deed of Sale was executed between himself, for and on behalf of Wharton, and Mejia over
the realty covered by TCT No. 336663 which overlaps portions covered by Yu Han Yat's TCTs. 20
On the basis of this adverse claim filed by Bernas, the Register of Deeds of Quezon City refused
to record the subject mortgages affecting the Yu Han Yat TCTs. This prompted Yu Han Yat to file
another consulta with the LRA which, in a Resolution dated October 15, 1992, ordered the
registration of the mortgage to the properties.21
Afterwards, on September 18, 1992, Yu Han Yat filed a Petition for Quieting of Title 22 before the
RTC of Quezon City docketed as Civil Case No. Q-92-13609 against the Estate of Nava
(represented by Antonio N. Crismundo), Galarosa, Mejia, Bernas, and the Register of Deeds of
Quezon City (Estate of Nava, et al.).23 Mejia then filed an Answer with Compulsory
Counterclaims24 and claimed, among others that, (a) Yu Han Yat's title, TCT No. 30627, was
invalid because it originated from TCT No. 8047, which was issued on the basis of a spurious
subdivision plan, Psd-2498; (b) Psd-2498 was spurious because it represents to cover a parcel of
land located in Barrio Bayanbayanan, Marikina, whereas the actual location of Lot 824 Piedad
Estate was in Caloocan City and Quezon City; and (c) the registrability of Mejia's rights and
ownership over the subject property was sustained by the LRA in LRA Consulta No.
1890.25 Bernas also filed an Answer with Application for Injunctive Relief26 dated December 10,
1992 to restrain Yu Han Yat from undertaking development works on the subject property.
On December 20, 1993, the RTC issued an Order27 granting Bernas' application for preliminary
injunction. The RTC, in the said Order, stated that:
This Court finds the respondents to have amply proven their entitlement to the relief.
Petitioner in this case has failed to convince this Court to act otherwise. The Court takes notice
of a number of allegations brought up by petitioner's witness in the person of Atty. Bustos,
however, the short of it all is that the respondents' title which is traced back from the title of
Dominga Sumulong remains valid and subsisting insofar as the lot in question is concerned.
Under the decisions rendered in Civil Case No. Q-11962 of then Court of First Instance of Rizal,
Branch 9, Quezon City entitled Zaida M. Santos vs. Dominga Sumulong and in Civil Case No.
11180 entitled Pilar Ibanez Vda. De Suzuaregui et al., vs Constitutional Hills Deverlopment (sic)
Corporation, Dominga Sumulong, et al.; it is stated therein that the title of Dominga Sumulong
is not wholly null and void but only insofar as the lots involved are concerned which does not
particularly refer to the lot in question in the instant case.28
On August 12, 1994, Yu Han Yat filed an Amended Petition29 dated August 9, 1994 to implead
Wharton, in view of the fact that the latter was the beneficial owner of the subject property
and that Bernas was only its agent.30 On October 3, 1994, Bernas and Wharton filed an
Amended Answer to Amended Petition31 dated September 29, 1994, adding the following
affirmative defenses: (a) that Yu Han Yat's Amended Petition stated no cause of action because
petitioners are innocent purchasers for value; and (b) although there was an annotation in TCT
No. 336663 that the same was "subject to verification," the registrability of the title was
nevertheless upheld in LRA Consulta No. 1890. The Amended Answer likewise interposed a
cross-claim against Mejia for possible breach of her Memorandum of Agreement with Bernas. 32
Trial ensued, and on March 15, 2004, the RTC issued a Decision 33 ruling in favor of the Estate of
Nava, et al., and Wharton. The trial court reasoned as follows:
Based on the records and evidence presented[,] the properties subject of the controversy are
TCT No. 30627 of the petitioner (Exhibit "G") and TCT No. 336663 (Exhibit "6" for Mejia as
adopted by Bernas). Details underlying the procurement of those titles from the parties were
quite overwhelming. But the history of how such titles came about does not convince the court
to grant the relief sought by the petitioner.
Careful reading of the amended petition shows the evident objective of the claim – that is to
nullify the respondents' title (TCT 336663) (Rollo, page 276, Volume 1) that runs to the very
core of challenging the indefeasibility of Torrens title seeking succor under the guise of a
petition for quieting of title.
Undeniably, the amended petition admits that petitioner's title overlaps with TCT No. 336663
(paragraphs 7 and 14, Amended Petition, Rollo, pages 212-21 A, Volume 1). The petition
likewise cited Consulta No. 2038 (Exhibit "O") of the Land Registration Authority, from which
petitioner wanted to conclude that TCT No. 336663 is of doubtful authenticity. The petitioner,
however, contradicted himself when in his Memorandum he conceded that the findings of the
Land Registration Commission is not binding upon this court. This leads to a point where the
Government, through the Solicitor General, filed a nullification and cancellation proceedings
(sic) (Exhibit "JJ") against Esperanza Nava from whom respondents Bernas and Mejia derived
title to TCT No. 336663. The case was cited by petitioner in the petition and he jumped into
conclusion that it constituted full knowledge upon respondents that indeed TCT No. 336663 is
void and ineffective (Paragraphs 17 and 18, Amended Petition, Rollo, page 275, Volume 1)
without evidence of a decision from Branch 102 of the Regional Trial Court of Quezon City
which heard the case. It was in stark contrast to the evidence presented by respondent
Galarosa that the court ordered the Government to submit proof of service of summonses
within ten (10) (sic) from completion lest the court will be constrained to dismiss or archive the
case (Exhibit "17"). The records do not account up to this time on the progress of said case.
What is apparent is the similar action filed by the Government against Amado R. Santos, the
predecessor-in-interest of Esperanza Nava for nullification and cancellation proceedings of titles
that included the latter's title. The case docketed as Civil Case No. Q-52834 before Branch 95 of
this jurisdiction was dismissed for lack of merit (Exhibit "16" for Galarosa).
The very import of these pieces of evidence is that the petition misleads the court into believing
that TCT No. 336663 has been decisively concluded to be void and ineffective. While it is true
that TCT No. 336663 bears an annotation which reads: "This title is subject to verification by the
LRC Verification Committee on questionable titles, plans[,] decrees and other documents"
(Exhibit "KK-1" Exhibit "8-Galarosa"), this court has yet to await a final decision or decree that
would indeed declare the questioned title null and void. Proof of which is incumbent upon the
petitioner.
It is worthy to note that respondent Bernas' Memorandum quickly pointed out that petitioner's
title which was based on plan PS 2498 (sic) referred to a parcel of land located in
Bayanbayanan, Marikina, Metro Manila (Exhibit "I-Mejia" and Exhibit "E"-Petitioner) which is
poles apart from respondents' title that covered a land in Matandang Balara, Quezon City.
Petitioner did not present convincing evidence to overturn such fact except to plainly state that
"the person who prepared the Survey Plan may have been confused as to the Property's (sic)
exact location". Although petitioner went on to prove that his property covered by TCT No.
30627 was in Quezon City as he presented Commonwealth Act No. 502 (Exhibit "A"). Nowhere
in said evidence proved that Bayanbayanan, Marikina was set to form part of the boundaries of
Quezon City under Section 3 thereof. Simply put, the petitioner utterly failed to discharge the
burden of proving the sustainability of his posture.
It is a well entrenched rule that in an action for quieting of title, the petition must prove legal or
equitable title to the land as the far reaching implication of which is quieting titled lands and
putting to stop forever any question of legality of the registration in the certificate or questions
that may arise therefrom. To allow the petitioner to nullify the title of the respondents to the
property in question would mean an obvious collateral attack which is not permitted under the
principle of indefeasibility of a Torrens title. "A certificate of title cannot be subject to
 collateral attack and can be altered modified or cancelled only in a direct proceeding in
accordance with law." (Virginia Calalang vs. Register of Deeds of Quezon City, et. al., G.R. No.
76265, March 11, 1994)34 (Emphasis in the original)
Aggrieved, Yu Han Yat appealed the above Decision of the RTC to the CA.
In its Decision, the CA granted Yu Han Yat's appeal and held that: (a) the petition for quieting of
title, and the petition for annulment of title are essentially the same; and (b) Bernas and Mejia's
title was void as they source their ownership from Dominga Sumulong's title to the property
which had been declared as null and void by the CA in previous cases. The CA also awarded
actual damages, moral damages, exemplary damages, and attorney's fees in favor of Yu Han
Yat. Herein petitioners Bernas, Mejia, and Wharton 35 sought reconsideration of the CA Decision,
but the same was denied by the CA on February 28, 2011.
Hence, this appeal.
ISSUES
For resolution of the Court are the following issues:
(a) Whether petitioners complied with Rule 45 of the 1997 Rules of Civil Procedure when they
filed the Petitions dated April 15, 2011 and April 20, 2011;
   
(b) Whether the filing of the Petitions constituted forum shopping; whether Petitions are
barred by res judicata;
   
(c) Whether Yu Han Yat's Amended Petition constitutes a collateral attack on the validity of the
title of petitioners (and their predecessors-in-interest) over the property subject of TCT No.
336663;
   
(d) Whether the CA ruling that the property covered by respondent's title is the same as the
property subject of TCT No. 336663 is supported by the evidence on record;
   
(e) Whether the case of Manotok, et al. v. Barque36 (Manotok) applies;
   
(f) Whether the CA erred when it took judicial notice of proceedings in other cases before it;
   
(g) Whether Yu Han Yat's alleged payment of real property tax constitutes proof of ownership
or superior title over the property covered by TCT No. 336663; and
   
(h) Whether petitioners are liable to the estate of Yu Han Yat (respondent) for damages and
attorney's fees.

THE COURT'S RULING

On whether petitioners complied with Rule 45 of the 1997 Rules of Civil Procedure when they
filed the Petitions dated April 15, 2011 and April 20, 2011

Before delving into the substantive issues raised by petitioners, the Court deems it proper to
first discuss the procedural issue raised by respondent in its Comment — that the Court should
have dismissed the case because the Petition raised questions of fact which are outside the
province of an appeal through Rule 45.
It is true that, as a general rule, the Court is not a trier of facts, and that petitions under Rule 45
of the Rules of Court should only raise questions of law.37 This rule, however, is subject to the
following exceptions:
(1) the conclusion is grounded on speculations, surmises or conjectures;
(2) the inference is manifestly mistaken, absurd or impossible;
(3) there is grave abuse of discretion;
(4) the judgment is based on a misapprehension of facts;
(5) the findings of fact are conflicting;
(6) there is no citation of specific evidence on which the factual findings are based;
(7) the findings of absence of fact are contradicted by the presence of evidence on record;
(8) the findings of the CA are contrary to those of the trial court;
(9) the CA manifestly overlooked certain relevant and undisputed facts that, if properly
considered, would justify a different conclusion;
(10) the findings of the CA are beyond the issues of the case; and
(11) such findings are contrary to the admissions of both parties.38

Some of the exceptions are present in this case. The rulings alone of the RTC and the CA were
contradictory, to the point that they differ on their rulings on each of the issues presented in
this case. Further, and as will be discussed in detail later on, the CA committed grave abuse of
discretion in arriving at certain factual findings and legal conclusions. The Court must perforce
conduct a judicious examination of the records to arrive at a just conclusion for this case.
On whether the filing of the Petitions constituted forum shopping, and whether the Petitions
are barred by res judicata

Respondent claims that petitioners violated the rule against forum shopping when petitioner
Bernas failed to inform the Court that a similar case was pending because Mejia had filed an
appeal of the assailed CA Decision subsequent to the filing by Bernas. This failure supposedly
constitutes a violation of Section 5, Rule 7 of the Rules of Court, which states that:
SECTION 5. Certification against forum shopping. — The plaintiff or principal party shall certify
under oath in the complaint or other initiatory pleading asserting a claim for relief, or in a
sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not
theretofore commenced any action or filed any claim involving the same issues in any court,
 tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim
is pending therein; (b) if there is such other pending action or claim, a complete statement of
the present status thereof; and (c) if he should thereafter learn that the same or similar action
or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to
the court wherein his aforesaid complaint or initiatory pleading has been filed.
Failure to comply with the foregoing requirements shall not be curable by mere amendment of
the complaint or other initiatory pleading but shall be cause for the dismissal of the case
without prejudice, unless otherwise provided, upon motion and after hearing. The submission
of a false certification or non-compliance with any of the undertakings therein shall constitute
indirect contempt of court, without prejudice to the corresponding administrative and criminal
actions. If the acts of the party or his counsel clearly constitute willful and deliberate forum
shopping, the same shall be ground for summary dismissal with prejudice and shall constitute
direct contempt, as well as a cause for administrative sanctions. (Emphasis and underscoring
supplied)
In addition, respondent also asserts that since the heirs of Esperanza Nava (Heirs of Nava) did
not appeal the CA Decision, then the same constitutes res judicata as regards petitioners Bernas
and Mejia. Thus, the case should be dismissed.
Respondent's assertions fail to convince. Petitioners did not commit forum shopping by filing
separate appeals. In Young v. Spouses Sy,39 the Court held that there is forum shopping where
there exist:
(a) identity of parties, or at least such parties as represent the same interests in both actions;
   
(b) identity of rights asserted and relief prayed for, the relief being founded on the same facts;
and
   
(c) the identity of the two preceding particulars is such that any judgment rendered in the
pending case, regardless of which party is successful would amount to res judicata.40

While there was identity of rights asserted and relief prayed for, there was no identity of parties
in the case at bar. Granted that both Mejia and Bernas trace their title from Nava, this does not,
by itself, make their interests identical. Bernas' and Mejia's interests remain separate, and a
judgment on one will not amount to res judicata on the other as, for instance, Bernas could,
and did, raise the defense that he was an innocent purchaser for value of the subject property
and thus should not be bound by any adverse judgment should Mejia's title be found defective.
The same reasoning applies to respondent's assertion that Mejia's and Bernas' claims were now
barred by res judicata because the Heirs of Nava did not appeal. The heirs of Nava hold an
interest separate from Mejia's and Bernas', and the latter could not be adversely affected by
the fact that the Heirs of Nava no longer filed an appeal.
On whether Yu Han Yat's Amended Petition constitutes a collateral attack on the validity of the
title of petitioners (and their predecessors-in-interest) over the property subject of TCT No.
336663
 Bernas and Mejia claim that the CA erred when it upheld as valid the petition for quieting of
title filed by Yu Han Yat. They claim that the petition for quieting of title was a collateral attack,
as opposed to a direct attack, on TCT No. 336663, which is proscribed under the principle of
indefeasibility of Torrens titles.
Petitioners are mistaken. The CA was correct in holding that the petition for quieting of title
filed by Yu Han Yat was not a collateral attack on TCT No. 336663, and was, in fact, a direct
attack on the same. In Villarica Pawnshop v. Spouses Gernale,41 the issue before the Court was
whether litis pendentia was present when there were two pending cases between the same
parties: one for quieting of title, and another for annulment and cancellation of title. Ruling in
the affirmative, the Court held that:
Civil Case No. 438-M-2002 is for quieting of title and damages, while Civil Case No. 502-M-2002
is for annulment and cancellation of titles and damages. The two cases are different only in the
form of action, but an examination of the allegations in both cases reveals that the main issue
raised, which is ownership of the land, and the principal relief sought, which is cancellation of
the opposing parties' transfer certificates of title, are substantially the same. The evidence
required to substantiate the parties' claims is likewise the same. The proceedings in Civil Case
No. 502-M-2002 would entail the presentation of essentially the same evidence, which should
be adduced in Civil Case No. 438-M-2002. As cited by the CA, this Court held in Stilianopulos v.
City of Legaspi that:
The underlying objectives or reliefs sought in both the quieting-of-title and the annulment-of-
title cases are essentially the same — adjudication of the ownership of the disputed lot and
nullification of one of the two certificates of title. Thus, it becomes readily apparent that the
same evidence of facts as those considered in the quieting-of-title case would also be used in
this petition.
The subject cases are so intimately related to each other that the judgment that may be
rendered in one, regardless of which party would be successful, would amount to res
judicata in the other.42 (Emphasis and underscoring supplied)
The pronouncement above does not mean that in all instances, cases for quieting of title and
for annulment of title are essentially the same, as the CA incorrectly held in its assailed
Decision.43 However, petitioners are mistaken in their conclusion that the action filed by Yu Han
Yat was a collateral attack just because it was denominated as a "petition for quieting of title"
instead of a "petition for annulment of title."
The test is not the name of the action, but the ultimate objective of the same and the relief
sought therein. Applying the said test in this case, the petition for quieting of title filed by Yu
Han Yat was a direct attack on the petitioners' title as the petition specifically sought to annul
TCT No. 336663 in the name of Nava.44 Thus, even as petitioners correctly claim that in assailing
the validity of a Torrens title, there must be a direct proceeding expressly instituted for the
purpose, the fact of the matter is that the petition for quieting of title was exactly that
proceeding as it was filed precisely to question the validity of TCT No. 336663.
On whether the Court of Appeals' ruling that the property covered by respondent's title is the
same as the property subject of TCT No. 336663 is supported by the evidence on record

Petitioners question the following findings of the CA:

We have scoured and scrutinized the records of the case and found that petitioner-appellant's
title was derived from a valid title while respondents-appellees failed to prove that their title
were derived from a valid one. Furthermore, petitioner-appellant was able to show how he
acquired the subject property from his immediate predecessors and was able to account for the
previous major transactions involving Lot 824, its subdivision and, finally, until it was
transferred to him.
It is incorrect to state that TCT No. 30627, is a transfer from Original Title (sic) No. 8047, when it
is clear that it came from Original Title No. 614, pursuant to Decree No. 6667. It is of judicial
notice that OCT No. 614, embraces many lots involving the Piedad Estate which are located in
Quezon City.
It is clearly typographical error that, as stated, TCT No. 8047 is a transfer from TCT No. 3633/T-R
because the technical description therein does not correspond to technical description stated in
TCT No. 8047, but it instead corresponds to the technical description stated in TCT No. 36633
(sic), after its subdivision.
On respondent-appellee Bernas' claim that TCT 8047 was a transfer from TCT No. 3633, which
involved a different property, We have scrutinized the same and it is apparent that TCT 8047,
(sic) would show that the one who made such certification used a different typewriter as the
entry "3633/T-R," appears to be different from the typewritten description of the property
which used carbon paper. Likewise, it was certified that the title contains two pages, however,
for unknown reasons, the second page was not presented; thus, the Court has no way of
checking whether there are encumbrances that may be annotated therein which would trace
that how (sic) TCT 8047 came to be.45
They contend that the CA Decision was not based on the evidence on record, and that TCT No.
30627 allegedly covers a property different from the one covered by TCT No. 336663 from
which they derive their claims.
Petitioners' contention is without merit. Prescinding from the CA's justifications as to the use of
a different typewriter, a careful scrutiny of the voluminous records of this case would reveal
that the CA was ultimately correct that Yu Han Yat was able to establish better title over the
subject property. Simply put, the CA was correct in holding that it was Yu Han Yat who was able
to account for the previous major transactions involving the property and was able to show
how he acquired the subject property from his immediate predecessors. To be sure, Yu Han Yat
painstakingly traced his title, complete with documentary and testimonial evidence, in the
following manner:
1. Petitioner's title, TCT No. RT28758 (30627) PR-[9]639 (Exh. "G") was issued on March 9, 1956,
being a transfer from TCT No. 8047 in the name of Bienvenido A. Tan, Jr. (Exh. "1-Galarosa").
Both petitioner's title and that of Mr. Tan, Jr. have the following technical descriptions, to wit:
"A parcel of land (Lot 824-A-4 of the subd. plan Psd-22842 being a portion of Lot 824-A
described on plan Psd-2498 (LRC Rec. No.), situated in Q. City, bounded on the N., by Lot 9471
on the E., by Lots 824-A-1, 824-A-2, 824-A-3 of the subd. plans on the SE. by Tuason Estates; on
the W., by Lot 824-B of plan Psd-2498. Beginning at a point marked "1" on plan, being S. 85 deg.
22'E., 3255.54 from LM No. 16, Piedad Estate; thence N.1 deg,. 42'W., 290.30 m. to pt. 2;
thence E., 115.00 m. to pt. 3; thence S. 0 deg. 08'E., 248.64 m. to pt. 4; thence S. 68 deg, 47'W.,
114.78 m. to pt. of beginning; containing an area of THIRTY THOUSAND (30,000) SQ.M. more or
less All pts. referred to are indicated on the plan and are marked on the ground pts. 1 & 2 are
marked by Old PLS Cyl, Cone, Mons. & the pt. 3 & 4 by PLS Cyl, Cone. Mons. bearings true;
declination 0 deg. 45'E., date of the subd. survey Nov. 4, 1947."
xxxx
3. The validity and regularity of petitioner's title is borne out by the fact that it can be traced
back to the title of Juan Porciuncula issued prior to 1930. Porciuncula's title is TCT No. T-10849
covering "Lot 824 of the 'PIEDAD ESTATE SUBDIVISION' Case No. 5975 of the Court of Land
Registration" (Exh. "R" and "R-1" TSN Lara, 4 April 1995 page 68) the original of which was
presented in Court and identified by Mr. Lara of the Pasig Registry. Due to the document's old
age, the same had to be placed in a plastic sheet to prevent further deterioration, as mere
holding would break the document. In fact, the edges of the document, including the portion
on which the date where the title's issuance should have appeared, have been torn to small
pieces.
4. On 21 November 1931, an entry written in Spanish was made at the back of TCT No. 10849 to
record the subdivision of the lot into Lot 824-A consisting of 60,012 sq. meters, and Lot 824-B
with an area of 87,060 sq. meters, pursuant to Subdivision Plan Psd-2498. At the same time, the
entry recorded the sale of Lot 824-A to Castor B. Cruz for the sum of P1,220.00. The date of the
deed of sale was 20 August 1930. (Exh "R-2") As a result of the sale to Castor B. Cruz, TCT No. T-
10849 was cancelled and replaced by TCT No. T-20897 and T-20898 (Exh. "R-3" TSN Lara, 4 April
1995 page 103).
5. While TCT No. 20897 could not be found in the Registration Book (T-84-A) of the Pasig
Registry and was listed as missing after the titles were inventoried (TSN Lara, 4 April 1995 pages
87, 88), the Index Card of Porciuncula shows that TCT No. T-10849 was replaced by TCT No.
20897 and 20898 (Exh. "S" and "S-1"). Likewise, the Index Card of Castor Cruz shows that TCT
No. 20897 was issued in his name for Lot 824-A. (Exh. "U" and "U-1")
6. On 9 February 1939, TCT No. 20897 was cancelled by TCT No. [366633] issued in the name of
Sps. Juan M. Ruiz and Conchita O. Baradi (Exh. "V"). The cancellation and issuance of a new title
was occasioned by the sale of Lot 824-A by Castor B. Cruz to the said spouses which sale was
registered in the Primary Entry Book (Exh. "W") under Entry No. 5445 (Exh. "W-1", TSN Lara, 4
April 1995 pages 112-114). The cancellation of Castor B. Cruz' TCT No. 20897 and the issuance
of TCT No. T-[36633] were also recorded in the Index Card of the former. (Exh. "U-1").
7. As described in the TCT No. [36633] in the name of the Spouses Ruiz, the parcel of land
covered by the title is as follows:
"A parcel of land (Lot No. 824-A of the subdivision plan Psd-2498, being a portion of Lot No.
824, described on the original plan of the Piedad Estate, G.L.R.C. Record No. 5975), situated in
the Municipality of Caloocan, Province of Rizal. Bounded on the N., by the property of Juan
Porciuncula (Lot No. 947 of the subdivision plan No. 2507) on the E. by Lot No. 823 of Piedad
Estate; on the SE by property of Tuason Estate; and on the W. by property of Juan Porciuncula
(Lot 824-B of the subdivision plan). Beginning at a point marked "1" on the plan, being N. 89
deg. 33'E 3486.40 m. from L.M. No. 16, Piedad Estate, thence S. 0 deg. 04'E., I, 196.40 m. to
point "2"; thence S. 68 deg. 47' W., 259.15 m. to point "3"; thence N. 1 deg. 42' W., 290.30 m.
to point "4"; thence 250.00 m. to the point of beginning; containing an area of sixty thousand
and twelve square meters (60,012) more or less. All points referred to are indicated on the plan
and on the ground points 1 and 2 are marked by old points and points 3 and 4 by P.L.S.
concrete monuments to 15 x 60 centimeters. Bearings true, declination 0 deg. 48' E., date of
original survey, July 1 to December 14, 1907, and that of the subdivision survey, June 11-13,
1927--/" (Exh "V"; Exh. "2"-Galarosa)
8. On 6 October 1948, a Subdivision Plan was recorded on the Spouses Ruiz' TCT No. [36633].
Under the Subdivision Plan, Lot 824-1 was subdivided into four lots, namely: Lots 824-A-1, 824-
A-2, 824-A-3 and 824-A-4. The same annotation mentioned Lot 824-A-4 to have been sold to
Bienvenido A. Tan, Jr. for the sum of P8,000.00 pursuant to a Deed of Sale dated 12 July 1948
(please see also Exh "CC"). As a result, TCT No. 36633 was cancelled and in lieu thereof, TCT
Nos. 8044, 8045, 8046 and 8047 were issued (Exh. "2-a"-Galarosa).
9. TCT No. 8047 for Lot 824-A-4 appears to have been directly issued in the name of Bienvenido
A. Tan, Jr. (Exh. "1" and "2-a"-Galarosa). This is the same title that was cancelled when TCT No.
30627 in favor of petitioner was issued on 9 March 1956 (Exh. "G") pursuant to a Deed of Sale
dated 6 March 1956 executed by Bienvenido A. Tan, Jr. in favor of Felipe Yu Han Yat for the sum
of P30,000.00 (Exh. "BB").46
Petitioners, on the other hand, argue that their title does not cover the same property and that
even assuming that both titles cover the same property, Yu Han Yat still allegedly failed to
prove that his title was superior over theirs.
Both arguments of petitioners fail to convince.
First, petitioners' argument that Yu Han Yat's title, TCT No. 30627, does not cover the same
property as their title, TCT No. 336663, is because TCT No. 30627 came from TCT No. 8047
which, in turn, bears an annotation that it is "a transfer from TCT No. 3633/T-R," a title that
covers a property situated in Murphy, Quezon City.47 They point out that, in contrast, TCT No.
336663 covers a parcel of land located in Piedad Estate in Quezon City. 48 The CA dismissed this
contention and ruled that the annotation that TCT No. 8047 is "a transfer from TCT No. 3633/T-
R" was a clear typographical error "because the technical description therein does not
correspond to [the] technical description stated in TCT No. 8047, but it instead corresponds to
the technical description stated in TCT No. 36633, after its subdivision." 49 The CA attributed the
typographical error to the "use of a different typewriter," which ruling is being vigorously
contested by the petitioners. According to them, the difference in the technical descriptions
between those stated in (a) TCT Nos. 8047 and 336663 and (b) TCT No. 3633/T-R should be
construed to mean that "there was an error in transferring the technical description from the
latter to the former."
The Court agrees with the CA. Both TCT No. 30627 and TCT No. 336663 cover the same
property as shown by their respective technical descriptions stating that the parcel of land
covered is Lot 824 of the Piedad Estate.50 The fact that TCT No. 8047, from which TCT No. 30627
was derived, bears an annotation that it was a transfer from TCT No. 3633/T-R which covers a
property in Murphy, Quezon City casts little doubt on the title of Yu Han Yat.
The Court is more inclined to uphold the view that the error lies in the annotation in TCT No.
8047 that it was "a transfer from TCT No. 3633/T-R," as compared with petitioners' theory that
the error was in the entire technical descriptions contained in TCT Nos. 8047 and TCT No.
336663. It is notable that TCT No. 8047 was, in truth, a transfer from TCT No. 336663, as shown
by the meticulous narration of Yu Han Yat quoted above. To repeat, records show that TCT No.
336663, in the name of Spouses Ruiz, was cancelled when the lot was subdivided into four lots:
Lot 824-A-1, Lot 824-A-2, Lot 824-A-3, and Lot 824-A-4. TCT No. 336663 was cancelled, and TCT
Nos. 8044, 8045, 8046, and 8047 were issued in lieu of the same. TCT No. 8047 was then
cancelled when the lot was sold to Yu Han Yat in 1956. In other words, the error occurred in
encoding that TCT No. 8047 was "a transfer from TCT No. 3633/T-R" instead of "from TCT No.
36633." As Yu Han Yat convincingly argued:
It defies logic to believe such a preposterous claim – that there is greater likelihood of an error
occurring in copying the technical description, rather than to consider more likely a
typographical error occurring in typing TCT No. 3633/T-R instead of TCT No. 336663 (sic). A
technical description is a lengthy narration which would be improbable to be erroneously
transferred from one title to another, if good faith is to be presumed in the performance of
one's duty. On the other hand, the confusing similarity in the numbers appearing on the title
(TCT No. 3633/T-R and TCT No. 336663 [sic]) is more susceptible to being interchanged.51
Thus, the Court quotes with approval the following disquisition by the CA:
Moreover, We cannot close our eyes to the fact that TCT No. 30627 (transfer from TCT No.
8047) was issued on March 9, 1956, while TCT No. 336663 (transfer from TCT 116925/T-588)
was issued only on October 28, 1985. Thus, as between two certificates of title issued to
different persons covering the same land in whole or in part, the earlier in date must prevail,
and that is, TCT No. 30627, under [Yu Han Yat]'s title.52
It is well established in jurisprudence that where there are two certificates of title covering the
same land, the earlier in date must prevail as between the parties claiming ownership over it.
As early as the 1915 case of Legarda vs. Saleeby,53 the Court already said that:
The question, who is the owner of land registered in the name of two different persons, has
been presented to the courts in other jurisdictions. In some jurisdictions, where the "torrens"
system has been adopted, the difficulty has been settled by express statutory provision. In
others it has been settled by the courts. Hogg, in his excellent discussion of the "Australian
Torrens System," at page 823, says: "The general rule is that in the case of two certificates of
title, purporting to include the same land, the earlier in date prevails, whether the land
comprised in the latter certificate be wholly, or only in part, comprised in the earlier
certificate. (Oelkers vs. Merry, 2 Q. S. C. R., 193; Miller vs. Davy, 7 N. Z. R., 155; Lloyd vs. May-
field, 7 A. L. T. (V.) 48; Stevens vs. Williams, 12 V. L. R., 152; Register of Titles vs. Esperance Land
Co., 1 W. A. R., 118.)" Hogg adds however that, "if it can be clearly ascertained by the ordinary
rules of construction relating to written documents, that the inclusion of the land in the
certificate of title of prior date is a mistake, the mistake may be rectified by holding the latter of
the two certificates of title to be conclusive." (See Hogg on the "Australian Torrens
System," supra, and cases cited. See also the excellent work of Niblack in his "Analysis of the
Torrens System," page 99.) Niblack, in discussing the general question, said: "Where two
certificates purport to include the same land the earlier in date prevails [x x x] In successive
registrations, where more than one certificate is issued in respect of a particular estate or
interest in land, the person claiming under the prior certificate is entitled to the estate or
interest; and that person is deemed to hold under the prior certificate who is the holder of, or
whose claim is derived directly or indirectly from the person who was the holder of the
earliest certificate issued in respect thereof. While the acts in this country do not expressly
cover the case of the issue of two certificates for the same land, they provide that a registered
owner shall hold the title, and the effect of this undoubtedly is that where two certificates
purport to include the same registered land, the holder of the earlier one continues to hold
the title" (p. 237).
xxxx
We have decided, in case of double registration under the Land Registration Act that the owner
of the earliest certificate is the owner of the land. That is the rule between original parties. May
this rule be applied to successive vendees of the owners of such certificates? Suppose that one
or the other of the parties, before the error is discovered, transfers his original certificate to an
"innocent purchaser." The general rule is that the vendee of land has no greater right, title, or
interest than his vendor; that he acquires the right which his vendor had, only. Under that
rule the vendee of the earlier certificate would be the owner as against the vendee of the
owner of the later certificate.54 (Emphasis and underscoring supplied)
Verily, it is undoubtedly clear that between the parties in this case, it is Yu Han Yat who has
shown that he has better title over the subject property for having presented the earlier
title.55 The contention that Bernas (on behalf of Wharton) and Mejia were "innocent
purchasers" is thus immaterial, for even if it is assumed that they are indeed such, they still
could not acquire a better right than their transferor — Nava — whose title was issued much
later than Yu Han Yat's transferor.
Another evidentiary contention by Bernas purportedly establishing his better right to the
subject property was that TCT No. T-10849, issued before 1930 to Juan Porciuncula, which was
the origin of Yu Han Yat's title, was based on subdivision plan Psd-2498. In turn, Psd-2498
indicates that it is a subdivision plan of a lot located in "Bayanbayanan,
Mariquina."56 Supposedly, this establishes that the land covered by Yu Han Yat's title is different
from the one covered by his title. With regard to this issue, the CA ruled that:
While it is true that, under PS 2498 (sic), it was stated that the property is located in
Bayanbayanan, Mariquina, however, it must be noted that at the time the survey was
conducted on June 11-13, 1927, the property was still under the Province of Rizal and that
Quezon City was only created pursuant to Commonwealth Act No. 502, and approved on
October 12, 1939. However, subsequent subdivision of Lot 824 would reveal that the property
is located at Quezon City.57
Bernas asserts that the above ruling of the CA was not supported by evidence on record and
was bereft of factual basis nor based on established facts.
The Court, however, agrees with the resolution of the CA. The CA was justified in taking judicial
notice when Quezon City was established. Section 1, Rule 129 of the Rules of Court states:
SECTION 1. Judicial notice, when mandatory. — A court shall take judicial notice, without the
introduction of evidence, of the existence and territorial extent of states, their political history,
forms of government and symbols of nationality, the law of nations, the admiralty and maritime
courts of the world and their seals, the political constitution and history of the Philippines, the
official acts of the legislative, executive and judicial departments of the Philippines, the laws
of nature, the measure of time, and the geographical divisions. (Emphasis supplied)
The CA correctly held that the Quezon City was established only in 1939, upon the enactment
of Commonwealth Act No. 502, the city's charter. Hence, when the survey for Psd-2498 was
conducted in 1927, Quezon City did not as yet exist. Further, the property in question has
always been referred to as part of the Piedad Estate. In turn, Commonwealth Act No. 502
defined the boundaries of Quezon City as follows:
SECTION 3. Boundaries. — The boundaries and limits of the territory of said city are established
and prescribed as follows: Beginning at a point marked "1" which is identical to Boundary
Monument No. 1 of Piedad Estate; to point "2", which is Boundary Monument No. 2 of
Piedad Estate; thence downstream following the Arroyo between Payatas Estate and
Mariquina Estate to point "3", which is the junction of the Arroyo and Mariquina River; thence
downstream following Mariquina River to point "4", which is the crossing of Mariquina by the
old Rosario Road; thence westward following the old Rosario Road to point "5", which is the
south-easternmost corner of Wack Wack Golf and Country Club; thence following the road
along the south boundary of the Wack Wack [Golf] and Country Club to point "6" where the
said road crosses the creek which is the source of Salapan Creek; thence downstream following
the Salapan Creek to point "7", which is the junction of Salapan Creek and Dario River; thence
southward following the Salapan River to its intersection with the east boundary of the City of
Manila to point "8"; thence north-westward following the east boundary of the City of Manila
to point "9" near La Loma Cabaret, which is a corner of the boundary of the City of Manila near
the entrance to the North Cemetery; thence northward following the boundary of the City of
Manila to point "10", which is the northeast corner of said City; thence westward along said
City of Manila boundary at a distance of 100 meters to point "11"; thence northward paralleling
the Novaliches Road at a distance of 100 meters from the property line on the side of said road
to point "12", which is at a distance of 100 meters north of the crossing of Samson Street (road
connecting Balintawak Monument with Bonifacio Monument); thence eastward paralleling
Samson Street and the Circumferential Road at a distance of 100 meters on the northside of
said street and road to point "13", which is the center of the Culiat Creek; thence upstream
following the Culiat Creek to point "14", which is the junction of Pasong Tamo River and Culiat
Creek; thence upstream following Pasong Tamo River to point "15", which is the junction of
Pasong Tamo River and Pinagpatayan Buaya Creek; thence to the point of beginning. (Emphasis
and underscoring supplied)
In Porciuncula v. Adamos,58 the Court notably observed that the Piedad Estate is "located in
barrio Bayanbayanan, Caloocan, Rizal (now Diliman, Quezon City)." 59 As Yu Han Yat noted, the
history of Bayanbayanan, Caloocan may have caused the misdescription of municipality in Psd-
2498:60
While it is true that the subdivision plan of Lot 824 (Psd 2498) of the Piedad Estate shows that it
is located in the Barrio of Bayanbayanan, Municipality of Marikina, a deeper understanding and
analysis of the history of the subject property will reveal that the misdescription in the
subdivision plan is nothing more than a product of confusion between Bayanbayanan, Marikina
and Bayanbayanan, Caloocan.
x x x A reading of the documents would reveal that the source of the insidious claim by the
petitioners that the property is located in Bayanbayanan, Marikina stems from an erroneous
reference in Psd 2498 dated June 11-13, 1927 made by a certain Engr. Sixto Fernando. The said
survey indicates that the location of Lot 824, Piedad Estate containing a total area of 147,072
square meters to be in Bayanbayanan, Marikina. When Quezon City was created by virtue of
Commonwealth Act No. 502, the boundaries and limits of the city would show that Piedad
Estate indeed became part of it, to wit:
Sec. 3. Boundaries. — The boundaries and limits of the territory of said city are established and
prescribed as follows: Beginning at a point marked "1" which is identical to Boundary
Monument No. 1 of Piedad Estate; to point "2", which is Boundary Monument No. 2 of
Piedad Estate; thence downstream following the Arroyo between Payatas Estate and
Mariquina Estate to point "3", which is the junction of the Arroyo and Mariquina River;
thence downstream following Mariquina River to point "4", which is the crossing of
Mariquina by the old Rosario Road; thence westward following the old Rosario Road to point
"5", x x x. (Emphasis in the original)
x x x It is apparent that Engr. Sixto Fernando, while making the subdivision plan Psd 2498 in
1927 mistook the portion of respondent's property to be in Bayanbayanan, Marikina.
x x x The "Marikina mistake" appears in only one document, as against several evidence
showing that respondent's property is in Quezon City. The inadvertent mention that Felipe Yu
Han Yat's property (and the entire Lot 824) is located in Bayanbayanan, Mariquina appears in
one and only one document and that is in Psd-2498. Except for this mistake in the designation
of municipality, all other data in the survey plan Psd-2498 are consistent with the property
being in Piedad Estate, Matandang Balara, Quezon City.
x x x Further, as stated above, the technical description in respondent's TCT 28758 (30627) PR-
9639, referred to the same survey plan, Psd-2498 and went on further to state that the
property is located in Quezon City. The said Transfer Certificate of Title where the above cited
technical description was mentioned, was prepared by no less than the Register of Deeds.
This is a conclusive proof that if at all, the erroneous reference to Bayanbayanan, Mariquina
in Psd-2498 was rectified by the Register of Deeds himself, when he prepared the title and
correctly described the location of the property to be in Quezon City. Noting further the fact
that in doing so, he was using as basis the same Psd-2498.61 (Emphasis supplied)
The foregoing disquisition persuades the Court that the annotation that Psd-2498 pertains to a
parcel land in "Bayanbayanan, Mariquina" was indeed a mere inadvertent error.
To be sure, the above factual findings arrived at by the CA are all based on a painstaking review
of the voluminous records of this case. The ultimate truth revealed by the evidence on record is
that TCT No. 8047 was a transfer from TCT No. 336663, contrary to the annotation that it was
"a transfer from TCT No. 3633/T-R." Likewise, the CA correctly took judicial notice of the fact
that Quezon City was not yet established at the time the survey for Psd-2498 was conducted.
Therefore, the Court so holds that Yu Han Yat's title, TCT No. 30627, and Mejia and Bernas' title,
TCT No. 336663, cover the same property.
On whether the case of Manotok, et al. v. Barque applies

Petitioner Mejia argues that the CA erred in ruling in favor of Yu Han Yat, when it did not
inquire as to how the latter was able to trace his title from valid alienation by the government
pursuant to the provisions of Act No. 1120, or the Friar Lands Act, because Piedad Estate was
considered a friar land. Mejia argues that the CA fell short of the yardstick laid down in the case
of Alonso v. Cebu Country Club,62 (Alonso) where the Court held:
Section 18 of Act No. 1120 or the Friar Lands Act unequivocally provides: "No lease or sale
made by the Chief of the Bureau of Public Lands (now the Director of Lands) under the
provisions of this Act shall be valid until approved by the Secretary of the Interior (now, the
Secretary of Natural Resources). Thus, petitioners' claim of ownership must fail in the absence
of positive evidence showing the approval of the Secretary of Interior. Approval of the
Secretary of the Interior cannot simply be presumed or inferred from certain acts since the law
is explicit in its mandate. This is the settled rule as enunciated in Solid State Multi-Products
Corporation vs. Court of Appeals and reiterated in Liao vs. Court of Appeals.63
Likewise, in the case of Manotok,64 the Court held that:
It must be borne in mind that the disputed property is part of the "Friar Lands" over which the
Government holds title and are not public lands but private or patrimonial property of the
Government and can be alienated only upon proper compliance with the requirements of Act
No. 1120 or the Friar Lands Act.
xxxx
It was thus primordial for the respondent to prove its acquisition of its title by clear and
convincing evidence in view of the nature of the land. In fact, it is essential for both respondent
and petitioners to establish that it had become private property. Both parties failed to do so. As
we have held earlier, petitioners have not succeeded to prove their claim of ownership over the
subject property.65
Mejia's assertion on this ground fails. In the case of Alonso, the Court needed to ascertain both
parties' compliance with the Friar Lands Act because the plaintiffs claim was precisely hinged on
the alleged sale by the government of the land in question to Francisco Alonso. On the other
hand, the Court in Manotok needed to check the parties' compliance with the Friar Lands Act
because each of the parties questioned the petition for administrative reconstitution filed by
the other. Hence, the Court needed to ascertain which of the parties actually held a valid claim
to the lands in question, so that it could accordingly grant reconstitution.
The instances present in Alonso and Manotok do not exist in the case at bar. The issue of
whether there was a valid transfer from the government to either of the parties was never
raised in the proceedings in the trial court or upon initial appeal. Mejia only raised the issue of
compliance with the Friar Lands Act only upon her motion for reconsideration with the CA, and
eventually upon appeal to this Court. Mejia is precluded from doing this, as it is well settled in
jurisprudence that an issue which was neither averred in the complaint nor raised during the
trial in the court below cannot be raised for the first time on appeal as it would be offensive to
the basic rules of fair play, justice and due process.66 As Yu Han Yat correctly argued:
Certainly, the issue of whether an inquiry was made as to how the respondent's predecessors-
in-interest may trace their title to a valid alienation by the government under the provisions of
Act No. 1120 was not among those raised before the trial court and the Court of Appeals. If it
were so, respondent would have presented evidence to show that he measures up to the
yardstick laid down by the Supreme Court in the Manotok case. It must be recalled that the
only primordial issue between the parties in this case is whose title is genuine and authentic
based on the respective evidence presented. This was how the Honorable Court of Appeals
simplified the otherwise convoluted and antagonistic theories of ownership between the
parties. But insofar as the alienation by the government of the property in question under the
provisions of Act No. 1120 is concerned, that was never put in issue both in the trial court and
in the Court of Appeals.67 (Emphasis supplied)
To emphasize, points of law, theories, issues and arguments not brought to the attention of the
trial court ought not to be considered by a reviewing court, as these cannot be raised for the
first time on appeal.68 Issues raised for the first time on appeal and not raised timely in the
proceedings in the lower court are barred by estoppel. 69 To consider the alleged facts and
arguments belatedly raised would amount to trampling on the basic principles of fair play,
 justice, and due process.70 As such, the Court so holds that the principles
under Alonso and Manotok are inapplicable in the case at bar.
On whether the Court of Appeals erred when it took judicial notice of proceedings in other
cases before it

In further ruling in favor of Yu Han Yat, the CA held that TCT No. 336663, or the Nava TCT, was
null and void by taking judicial notice of other cases decided by it, specifically the case of CA-
G.R. No. 77666, titled "Heirs of Dominga Sumulong y Roxas, represented by Wilfredo Sumulong
Torres v. Hon. Demetrio B. Macapagal, Sr., Presiding Judge, RTC, Branch 79, Quezon City, et
al."71 In the said case, the CA invalidated TCT No. 56809 registered in the name of Dominga
Sumulong for being improperly reconstituted: As TCT No. 336663 originated from TCT No.
56809, the CA concluded that Bernas' and Mejia's title were also null and void because of the
"legal principle that the spring cannot rise higher from its source." 72
Petitioners decried the act of the CA of taking judicial notice of a previous case decided by it,
and argued that the CA committed a serious error of law.
The Court rules in favor of petitioners on this ground. It is well settled that, as a general rule,
courts are not authorized to take judicial notice, in the adjudication of cases pending before
them, of the contents of the records of other cases, even when such cases have been tried or
are pending in the same court, and notwithstanding the fact that both cases may have been
heard or are actually pending before the same judge. 73
It is true that the said rule admits of exceptions, namely:
(a) In the absence of objection, and as a matter of convenience to all parties, a court may
properly treat all or any part of the original record of a case filed in its archives as read into
the record of a case pending before it, when, with the knowledge of the opposing
party, reference is made to it for that purpose, by name and number or in some other
manner by which it is sufficiently designated; or
(b) when the original record of the former case or any part of it, is actually withdrawn from the
archives by the court's direction, at the request or with the consent of the parties, and
admitted as a part of the record of the case then pending.74

Neither of these exceptions, however, exists in this case. The parties were not informed, much
less their consent taken, of the fact that the CA would take judicial notice of these cases. Thus,
the CA erred in taking judicial notice of the records of CA-G.R. No. 77666 in the process of
adjudicating this case.
Nevertheless, despite this error, the result remains that Yu Han Yat is the rightful owner of the
subject property in light of the Court's ruling above that there is an overlap between the
properties covered by the two TCTs in question, and that the evidence showing Yu Han Yat's
title to be earlier means that Yu Han Yat holds better title.
In view of such ruling, the Court no longer sees the need to tackle the issue of whether Yu Han
Yat's payment of real property taxes constitutes proof of ownership or superior title over the
subject property. In any event, the Court has consistently ruled that:
Although tax declarations or realty tax payment of property are not conclusive evidence of
ownership, nevertheless, they are good indicia of possession in the concept of owner for no
one in his right mind would be paying taxes for a property that is not in his actual or at least
constructive possession. They constitute at least proof that the holder has a claim of title over
the property. The voluntary declaration of a piece of property for taxation purposes manifests
not only one's sincere and honest desire to obtain title to the property and announces his
adverse claim against the State and all other interested parties, but also the intention to
contribute needed revenues to the Government. Such an act strengthens one's bona fide claim
of acquisition of ownership.75
On whether petitioners are liable to respondent for damages and attorney's fees

The CA awarded to Yu Han Yat the following amounts in the form of damages:
(a) P1,630,514.17 as actual damages;
(b) P100,000.00 as moral damages;
(c) P100,000.00 as exemplary damages, and
(d) Attorney's Fees in the amount of P272,868.25
As to the actual damages, the CA held that petitioners were liable therefor because Yu Han Yat
deserved adequate compensation for the duly substantiated losses suffered by him to protect
his interest over the property. The CA also awarded moral damages to Yu Han Yat because of
the supposed wrongful issuance by the RTC of the preliminary injunction, and the refusal of the
Housing and Land Use Regulatory Board (HLURB) to issue a License to Sell to Yu Han Yat due to
the pendency of the case. Exemplary damages were likewise awarded by the CA by way of
example or correction for the public good. Finally, the CA awarded attorney's fees because Yu
Han Yat was supposedly forced by the petitioners to incur expenses in litigation to protect his
interest.
Contrary to the ruling of the CA, the Court finds no basis in awarding the above damages to Yu
Han Yat. In ABS-CBN Broadcasting Corp. v. Court of Appeals,76 the Court held that in the absence
of malice or bad faith in the prosecution of the case, the award of damages is unavailing:
There is no adequate proof that ABS-CBN was inspired by malice or bad faith. It was honestly
convinced of the merits of its cause after it had undergone serious negotiations culminating in
its formal submission of a draft contract. Settled is the rule that the adverse result of an action
does not per se make the action wrongful and subject the actor to damages, for the law could
not have meant to impose a penalty on the right to litigate. If damages result from a person's
exercise of a right, it is damnum absque injuria.77
In the same way, the Court believes that petitioners were honestly convinced of the validity of
their claim to the subject property. As subsequent holders of the same through a sale, both
Mejia and Bernas (and consequently, Wharton) were expected to insist on their supposed
ownership over the property in question. Consequently, the Court deems it proper to delete
the award of damages in favor of respondent.
WHEREFORE, the consolidated Petitions are hereby DENIED. The Court of Appeals Decision
dated December 14, 2010, and the Resolution dated February 28, 2011 in CA-G.R. CV No. 82681
are AFFIRMED WITH MODIFICATION. The Court deletes the award of actual, moral, and
exemplary damages, and attorney's fees in favor of respondent.
SO ORDERED.