Quieting of Title (Arts.
476-481 NCC) involving prescription and purchaser in good faith, but the appellate court dismissed
Nature.
Prescription.
Who are allowed to bring.
Heirs of Olviga v CA; G.R. No. 104813. October 21, 1993.
G.R. No. 104813 October 21, 1993
HEIRS OF JOSE OLVIGA, NAMELY: PLACIDA S. OLVIGA, VIRGILIO OLVIGA,
LOLITA OLVIGA, CARMENCITA O. ALPUERTO and JEANETTE OLILA, petitioners,
vs.
THE HON. COURT OF APPEALS, ANGELITA R. GLOR, SERILINA G. JAMON,
EMELITA G. MADELA, EMAN G. MANALO, MYRNA GLOR, FELIPE GLOR,
GAUDENCIO GLOR and CORNELIO GLOR, respondents.
Natalio T. Paril, Jr. for petitioners.
Leovigildo L. Cerilla for private respondents.
GRIO-AQUINO, J.:
This is a petition to review the decision of the Court of Appeals in CA-G.R. CV No.
30542, affirming in toto the decision of the Regional Trial Court of Calauag, Quezon
ordering the defendants, heirs of Jose Olviga (petitioners herein), to reconvey the
land in dispute to the plaintiffs, heirs of Cornelia Glor (now private respondents),and
to pay attorney's fees and the costs of suit.
This case started as an action (Civil Case No. C-883) filed in the Regional Trial Court
of Calauag, Quezon by Angelita Glor and her children against the heirs of Jose Olviga
for reconveyance of a parcel of land, measuring 54,406 square meters (5.44 has),
more or less, known as Lot 13, Pls-84 of the Guinayangan Public Land Subdivision.
The court, after due trial, rendered judgment in favor of the private respondents, the
dispositive portion of which reads:
WHEREFORE, and considering the foregoing judgment is hereby rendered in favor of
the PLAINTIFFS and against the defendants as heirs of Jose Olviga to reconvey the
land in dispute to the plaintiffs as heirs of Cornelio Glor Sr.; condemning the
defendants jointly and severally to pay the plaintiffs attorneys fees of P5,000.00 plus
the costs of the suit. The counterclaim interposed by defendants is dismissed. ( p. 12,
Rollo.)
The judgment was appealed to the Court of Appeals by the defendants who raised
several factual issues regarding possession and fraud, as well as legal issues
the appeal and affirmed in toto the decision of the trial court.
It was established by the evidence on record that the land in question was, in 1950,
still forest land when Eutiquio Pureza, then only twelve years old, and his father
cleared and cultivated it. In 1954, they introduced improvements such as, coconut
trees, jackfruit, mangoes, avocado and bananas. When the area was released for
disposition, the Bureau of Lands surveyed the same in 1956 in the name of Eutiquio
Pureza. Since then, the land has been known as Lot 13, Pls-84 of the Guinayangan
Public Land Subdivision. Godofredo Olviga, a son of Jose Olviga then living with the
latter, protested the survey but without respect to a one-half-hectare portion "sa
dakong panulukan ng Amihanan-Silanganan." This protest or "tutol" (Exh. B) of
Godofredo Olviga, brother of petitioners Virgilio Olviga and Lolita Olviga Olila, is of
public record in the Bureau of Lands (Exh. B). In said document, Godofredo Olviga
expressly admitted that the lot belonged to Eutiquio Pureza, except the 1/2 hectare
portion claimed by him (Godofredo) which was included in the survey of Pureza's Lot
13.
In 1960, Eutiquio Pureza filed a homestead application over Lot 13. Without his
application having been acted upon, he transferred his rights in said lot to Cornelia
Glor in 1961. Neither the homestead application of Eutiquio nor the proposed transfer
of his rights to Cornelio Glor was acted upon by the Director of Lands for reasons that
the records of the Bureau of Lands do not disclose.
In 1967, Jose Olviga obtained a registered title for said lot in a cadastral proceeding,
in fraud of the rights of Pureza and his transferee, Cornelio Glor and his family who
were the real and actual occupants of the land.
What must have happened as found by the Court of Appeals, is that since Cornelio
Glor, Sr. was sickly, and his wife (now widowed) Angelita Glor, was unschooled, they
failed to follow up Pureza's homestead application over Lot 13 in the cadastral
proceedings in the Municipal Court of Guinayangan Public Land Subdivision, Pls-84,
Case 1 (Philcusa-Foa). In fact, they were not aware of the proceedings. Angelita Glor
testified that no notice was ever posted on Lot 13 about the proceedings nor did the
barangay captain, tell her about them. Neither did she receive any notice from the
court sheriff or any court employee. This non-posting of the hearing of the cadastral
hearing on the land, or in the barangay hall, was confirmed by petitioner Virgilio
Olviga himself who testified that he did not notice any papers posted on the property
in question (tsn, October 18, 1990, pp. 83-84). On the other hand, petitioner's father
Jose Olviga, claimed both Lots 12 and 13, which are adjoining lots, in the same
cadastral proceedings. He falsely omitted in his answer mention of the fact that other
persons were in possession of, and claiming adverse interest in, Lot 13 and that the
land had been surveyed for Eutiquio Pureza, the former occupant who sold his
interests to private respondents' parent. Cornelio Glor, in 1961. Glor was Olviga's
neighbor. As a result, both Lots 12 and 13 were declared as uncontested in the name
of Jose Olviga (Exh. 7), and were registered in his name in 1967 in Original
Certificate of Title, No. 0-12713 (Exh. 5). In 1971, Olviga requested that OCT No. 0-
12713 be split into two (2) TCT's, one each for the two (2) lots. TCT Nos. T-103823
and T-103824 were issued for lots 12 and 13, respectively. Jose Olviga later
transferred Lot 13 to his son-in-law, Jaime Olila and daughter, Lolita Olviga resulting
in the cancellation of TCT. No. 241314 in the names of the spouses (Exh. 3).
It was also established that the spouses Jaime Olila and Lolita Olviga Olila, were not
innocent purchasers for value of the land from their father, and have never been in
the possession. The Glors and their predecessor-in-interest (Cornelio Glor Sr., and
Eutiquio Pureza) were the ones found to be in possession of the property.
From said finding, and conclusions, the appellate court in its decision dated January
13, 1992, resolved the issues presented, thus:
. . ., whether or not plaintiffs' action is really one for quieting of title that does not
prescribe; or assuming that their demand for reconveyance of the lot in question
prescribes in ten years, being based on an implied trust, whether their cause of action
should be counted from the date of the issuance of the late Jose Olviga's title over
said lot in 1967 and has, therefore, already prescribed, or whether the prescriptive
period should be counted from the date plaintiffs acquired knowledge of said title
sometime in 1988.
The first question should be answered in the affirmative. . . .
xxx xxx xxx
But even assuming that plaintiffs' action for reconveyance, being based on an implied
or constructive trust, prescribes in ten years, the lower court again correctly ruled that
their cause of action should be considered to have accrued not from the date of
registration of the title of Jose Olviga, defendants' predecessor-in-interest, over the lot
in question in 1967, but only from the time the plaintiffs learned of such title in 1988. .
...
xxx xxx xxx
All in all, therefore, the court a quo did not err in holding that plaintiffs' action against
defendants-appellants for the reconveyance of the lot in question filed on April 10,
1989, or in less than a year after they learned of the issuance of a title over said lot to
Jose Olviga, predecessor-in-interest of defendants, has not yet prescribed.
WHEREFORE, the decision appealed from herein is AFFIRMED in toto, with costs
against defendants-appellants. (pp. 48-51, Rollo.)
Petitioners now seek a review of the above decision. They allege that the present
action has already prescribed; (2) the Court of Appeals erred when it ruled that the
private respondents' cause of action accrued not in 1967 but in 1988; (3) that the
Court of Appeals erred when it failed to consider that private respondents as mere
homestead transferees cannot maintain an action for reconveyance; (4) that the Faja
and Caragay-Layno cases have no bearing and direct application to the case at bar;
and (5) that private respondents have not proven by preponderance of evidence their
ownership and possession of the disputed land.
With regard to the issue of prescription, this Court has ruled a number of times before
an action for reconveyance of a parcel of land based on implied or constructive trust
prescribes in ten years, the point of reference being the date of registration of the
deed of the date of the issuance of the certificate of title over the property (Vda. de
Portugal vs. IAC, 159 SCRA 178). But this rule applies only when the plaintiff is not in
possession of the property, since if a person claiming to be the owner thereof is in
actual possession of the property, the right to seek reconveyance, which in effect
seeks to quiet title to the property, does not prescribe.
In Sapto vs. Fabiana, 103 Phil. 683, 686-687, appellants' predecessors sold to
appellees in 1931 a parcel of land. The sale was approved by the Provincial Governor
of Davao but was never registered. Possession of the land was, however, transferred
to Fabiana and the latter has been in possession thereof from 1931 up to the present.
The widow and children of Samuel Sapto filed an action to recover the land. This
Court in affirming the validity of the sale in favor of appellee (Fabiana) held:
No enforcement of the contract is in fact needed, since the delivery of possession of
the land sold had consummated, the sale and transferred title to the purchaser,
registration of the contract not being indispensable as between the parties. Actually
the action for conveyance was one to quiet title, i.e., to remove the cloud cast upon
appellee's ownership by the refusal of the appellants to recognize the sale made by
their predecessors. This action accrued only when appellants initiated their suit to
recover the land in 1954. Furthermore, it is an established rule of American
jurisprudence (made applicable in this jurisdiction by Art. 480 of the New Civil Code)
that actions to quiet title to property in the possession of the plaintiff are
imprescriptible (44 Am. Jur. p. 47; Cooper vs. Rhea, 39 L.R.A. 930; Inland Empire
Land Co. vs. Grant County, 138 Wash. 439 245 Pac. 14).
In Faja vs. Court of Appeals, 75 SCRA 441, 446, this Court likewise reiterated the
ruling that:
. . . There is settled jurisprudence that one who is in actual possession of a piece of
land claiming to be owner thereof may wait until his possession is disturbed or his title
is attacked before taking steps to vindicate his right, the reason for the rule being, that
his undisturbed possession gives him a continuing right to seek the aid of a court of
equity to ascertain and determine the nature of the adverse claim of a third party and
its effect on his own title, which right can be claimed only by one who is in
possession. No better situation can be conceived at the moment for Us to apply this
rule on equity than that of herein petitioners whose mother, Felipa Faja, was in
possession of the litigated property for no less than 30 years and was suddenly
confronted with a claim that the land she had been occupying and cultivating all these
years, was titled in the name of a third person. We hold that in such situation the right
to quiet title to the property, to seek its reconveyance and annul any certificate of title
covering it, accrued only from the time in possession was made aware of a claim
adverse to his own, and it is only then that the statutory period of prescription
commences to run against possessor.
In the case at bar, private respondents and their predecessors-in-interest were in
actual possession of the property since 1950. Their undisturbed possession gave
them the continuing right to seek the aid of a court of equity to determine the nature of
the adverse claim of petitioners, who in 198 disturbed their possession.
The other issues raised in the petition are factual.
The Court of Appeals and the trial court correctly based their findings of tact on the
testimonies of the parties and their witnessess. It can be said therefore that those
conclusions are based on substantial evidence. No cogent reason exists to disturb
them. As reiterated in a long line of decisions, it is beyond the province of this Court
to make its own findings of facts different from those of the trial court as affirmed by
the Court of Appeals (Vda. de Cailles vs. Mayuga 170 SCRA 347; New
Owners/Management of TML Garments, Inc. vs. Zaragosa, 170 SCRA 563). In
petitions for review of decisions of the Court of Appeals, the jurisdiction of this Court
is confined to a review of questions of law, except when the findings of fact are not
supported by the records or are so glaringly erroneous as to constitute a serious
abuse of discretion (Lim vs. Court of Appeals, 158 SCRA 307; Samson vs. CA, 141
SCRA 194; Republic vs. IAC, 144 SCRA 705). The case at bar does not fall under the
exceptions.
WHEREFORE, finding no reversible error in the decision of the Court of Appeals, the
petition for review is DENIED, with costs against the petitioners.
SO ORDERED.
Pingol v CA; G.R. No. 102909. September 6, 1993.
G.R. No. 102909 September 6, 1993
SPOUSES VICENTE and LOURDES PINGOL, petitioners,
vs.
HON. COURT OF APPEALS and HEIRS OF FRANCISCO N. DONASCO, namely:
MELINDA D. PELAYO, MARIETTA D. SINGSON, MYRNA D. CUEVAS, NATIVIDAD
D. PELAYO, YOLANDA D. CACERES and MARY DONASCO, respondents.
Bernardo S. Chan for petitioners.
Orlando A. Galope for respondents.
DAVIDE, JR., J.:
An action denominated as one for specific performance and damages was brought by
the private respondents against the petitioners before the Regional Trial Court (RTC)
of Caloocan City which, after due trial, rendered a decision in favor of the petitioners.
On appeal, the respondent Court reversed the trial court's decision.
It is from this judgment that the petitioners have appealed to this Court by way of a
petition for review on certiorari.
The material facts of this case are simple and undisputed.
Petitioner Vicente Pingol is the owner of Lot No. 3223 of the Cadastral Survey of
Caloocan, with an area of 549 square meters, located at Bagong Barrio, Caloocan
City and more particularly described in Transfer Certificate of Title (TCT) No. 7435 of
the Registry of Deeds of Caloocan City. On 17 February 1969, he executed a "DEED
OF ABSOLUTE SALE OF ONE-HALF OF (1/2) [OF] AN UNDIVIDED PORTION OF A
PARCEL OF LAND" in favor of Francisco N. Donasco which was acknowledged
before a notary public. The parcel of land referred to herein is Lot No. 3223 and the
pertinent portions of the document read as follows:
That for and in consideration of the sum of TWENTY THOUSAND AND FIVE
HUNDRED THIRTY (P20,530.00) PESOS, Philippine Currency, the VENDOR hereby
these presents SELL, CONVEY AND CONVEY by way of Absolute Sale the one-half
(1/2) portion, equivalent to Two Hundred Seventy Four and point Fifty (274.50)
square meters, to VENDEE, the above-mentioned property, his heirs, assigns and
successors-in- interest;
That the VENDOR hereby confesses and acknowledges the receipt of TWO
THOUSAND (P2,000.00) PESOS from VENDEE as advanced (sic) and partial
payment to the above-cited consideration of the Sale herein mentioned, leaving
therefor a balance of Eighteen Thousand and Five Hundred Thirty (P18,530) Pesos to
be paid in several equal installments within a period of six (6) years, beginning
January, 1970;
That after computing the above-mentioned equal installments, the VENDEE agrees
and undertakes to pay unto the VENDOR a monthly amount equivalent to Two
Hundred Fifty Seven (sic) and Thirty Six Centavos (P257.36) within a period of
Seventy One (71) months and on the Seven Two [sic] (72) month, the amount of
(P257.44) as the last and final installment thereof;
That the VENDEE agrees that in case of default in the payment of the installment due
the same shall earn a legal rate of interest, and to which the VENDOR likewise
agrees;
That the VENDEE undertakes to pay unto the VENDOR the herein monthly
installment within the first five (5) days of each month and the same shall be made
available and to be paid at the residence of the VENDOR, payment to be made either
directly to the VENDOR, his wife or his authorized representative or factor;
That in case of partition of the above-described property between herein VENDOR
and VENDEE the same shall be divided into two (2) equal parts, the VENDOR gets
the corner facing J. De Jesus and Malolos Avenue and the VENDEE shall get the
portion with fifteen 15 meters frontage facing J. De Jesus Street only.1
Pursuant to the contract, Donasco paid P2,000.00 to Pingol. The one-half portion,
designated as Lot No. 3223-A, was then segregated from the mother lot, and the
parties prepared a subdivision plan (Exhibit "C") which was approved by the Land
Registration Commission.2
Francisco immediately took possession of the subject lot and constructed a house
thereon. In January 1970, he started paying the monthly installments but was able to
pay only up to 1972.
On 13 July 1984, Francisco Donasco died. At the time of his demise, he had paid
P8,369.00, plus the P2,000.00 advance payment, leaving a balance of P10,161.00 on
the contract price. 3 Lot No. 3223-A remained in the possession of Donasco's heirs.
On 19 October 1988, the heirs of Francisco Donasco filed an action for "Specific
Performance and Damages, with Prayer for Writ of Preliminary Injunction" against the
spouses Vicente and Lourdes Pingol (petitioners herein) before the RTC of Caloocan
City. The action was docketed as Civil Case No. 13572 and raffled off to Branch 125
of the said court.
In their complaint, 4 the plaintiffs (private respondents herein) averred that after the
death of their father, they offered to pay the balance of P10,161.00 plus the stipulated
legal rate of interest thereon to Vicente Pingol but the latter rebuffed their offer and
has "been demanding for a bigger and unreasonable amount, in complete variance to
what is lawfully due and payable." They stated that they had "exerted earnest efforts
to forge or reach an amicable and peaceful settlement with the defendants" for the
payment of the property in question but to no avail. They further alleged that the
defendants were committing "acts of forcible entry and encroachment" upon their land
and asked that a writ of preliminary injunction be issued to restrain the defendants
from the acts complained of.
Plaintiffs then prayed that the defendants be ordered, inter alia:
a. . . . to accept the amount of P10,161.00, more or less, plus the stipulated
legal rate of interest due thereon, as full and complete payment of the balance for the
agreed price/consideration on the one- half (1/2) portion of the parcel of land . . .;
[and]
b. . . . to execute the final deed of sale on the one-half (1/2) portion of the lot . .
. in accordance with the partition reflected in the survey and subdivision plan, . . . .5
In their answer with counterclaim, 6 defendants admitted the execution of the
aforementioned deed of sale, the segregation of the portion sold and the preparation
and approval of the subdivision plan, but set up the following special and affirmative
defenses: (1) plaintiffs' cause of action had already prescribed; (2) the deed of sale
embodied a conditional contract of sale "as the consideration is to be paid on
installment basis within a period of six years beginning January, 1970"; (3) the
subdivision plan was prepared on the assumption that Francisco Donasco would be
able to comply with his obligation; (4) when Francisco died, he had not fully paid the
total consideration agreed upon; and (5) considering the breach by Francisco of his
contractual obligation way back in 1976, the sale was deemed to have been
cancelled and the continuous occupancy of Francisco after 1976 and by his heirs
thereafter was by mere tolerance of Vicente Pingol. They then asked that the plaintiffs
be ordered to vacate the premises and to pay them attorney's fees and a reasonable
compensation for the use of the land.
In their Reply and Answer to Counterclaim, 7 the plaintiffs pointed out that there is no
provision in the deed of sale for its cancellation in case of default in the payment of
the monthly installments and invoked Article 1592 of the New Civil Code. They
specifically denied the allegations in the counterclaim.
The issues having been joined, the case was then tried on the merits.
On 22 January 1990, the trial court rendered a decision 8 dismissing the complaint
and ordering the plaintiffs to pay the defendants P350.00 as reasonable monthly
rental for the use of the premises from the filing of the complaint, P10,000.00 by way
of attorney's fees, and the costs of the suit. It held that: (1) the deed of absolute sale
in question, marked and offered in evidence as Exhibit "A," is a contract to sell, not a
contract of sale, since Vicente Pingol had no intention to part with the ownership of
the loan unless the full amount of the agreed price had been paid; (2) the contract
was deemed to have been cancelled from the moment the late father of the plaintiffs
defaulted in the payment of the monthly installments; (3) title and ownership over the
lot did not pass to Francisco Donasco and his heirs since the contract to sell was
never consummated; and (5) assuming, arguendo, that the plaintiffs have a cause of
action for specific performance, such action had already prescribed since the
complaint was filed only on 19 October 1988 or more than ten years from the time
that they could have lawfully demanded performance.9
Plaintiffs elevated the case to the Court of Appeals where the appeal was docketed
as CA-G.R. CV No. 25967. On 12 November 1991, the said court rendered a decision
10 reversing the appealed decision and decreeing as follows:
WHEREFORE, the decision appealed from is hereby REVERSED and SET ASIDE
and another one is rendered:
(1) Ordering appellee-vendor Vicente Pingol to accept the sum of P10,161.00,
plus the legal interest due thereon from the date of institution of this action on October
19, 1988;
(2) Upholding the validity of the "DEED OF ABSOLUTE SALE OF ONE- HALF
(1/2) (of) AN UNDIVIDED PORTION OF A PARCEL OF LAND" (Exh. A), and by
virtue and on the strength of which declaring the "Heirs of the Deceased Francisco N.
Domingo" as the owners of the 274.50 sq. m. land, denominated as Lot 3223-A,
(LRC) Psd-146255 under the technical description (exh. D) and reflected in the Plan
of Subdivision Survey which was approved By Commissioner of Land Registration on
August 13, 1971 (exh. C), representing one-half portion [of] lot 3223, situated at the
corner of Malolos Avenue and G. de Jesus St., Bagong Barrio, Caloocan City, and
covered by TCT No. 7435 of the Registry of Deeds of Caloocan City (exh. B); and
(3) Ordering the defendants-appellees to pay the costs.
SO ORDERED. 11
The Court of Appeals ruled that the deed of sale in question reveals the clear
intention of Vicente Pingol to part with the ownership of the one-half portion of the
land by way of an absolute sale; that the failure to fully pay the agreed price was not a
ground for the cancellation of the sale; and that the plaintiffs' action is imprescriptible
since it is akin to an action to quiet title to property in one's possession.12
Dissatisfied with the decision of the Court of Appeals, the defendants, hereinafter
referred to as the petitioners, filed this petition for certiorari on 9 January 1992.
Plaintiffs, hereinafter referred to as the private respondents, filed their comment
thereto on 10 September 1992 to which the petitioners filed a reply 11 November
1992. We gave due course to the petition and required the parties to submit their
respective memoranda, 13 which they subsequently complied with.
Petitioners contend that the Court of Appeals erred:
I
IN HOLDING THAT THE DOCUMENT (EXHIBIT "A") DENOMINATED AS
"ABSOLUTE DEED OF SALE OF ONE-HALF () OF AN UNDIVIDED PORTION OF
A PARCEL OF LAND" IS AN ABSOLUTE DEED OF SALE SUFFICIENT TO
CONFER OWNERSHIP ON THE VENDEE AND HIS SUCCESSORS-IN-INTEREST,
DESPITE THE FACT THAT BY ITS TERMS AND CONDITIONS, LIKE THE PRICE
BEING PAYABLE ON INSTALLMENTS WITHIN A FIXED PERIOD, THE SAME IS A
CONDITIONAL DEED OF SALE.
II
IN HOLDING THAT NOTWITHSTANDING THE FACT THAT THE VENDEE FAILED
TO COMPLY WITH THE TERMS OF THE CONTRACT (EXHIBIT "A")
SPECIFICALLY TO COMPLETE THE PAYMENT OF THE CONSIDERATION ON
THE DATE STIPULATED IN THE CONTRACT WHICH WAS SUPPOSED TO BE IN
JANUARY 1976, COMPLETE PAYMENT THEREOF CAN STILL BE ENFORCED IN
AN ACTION INSTITUTED BY THE HEIRS OF THE VENDEE FILED ON OCTOBER
19, 1988 OR A PERIOD OF MORE THAN TWELVE (12) YEARS FROM THE TIME
COMPLETE PAYMENT SHOULD HAVE BEEN MADE;
III
IN HOLDING THAT THE PRIVATE RESPONDENTS' ACTION IS ONE WHICH IS AN
OFFER TO COMPLETE THE PAYMENT LEFT UNPAID BY PRIVATE
RESPONDENTS' FATHER WHICH DOES NOT PRESCRIBE;
IV
IN HOLDING THAT PRIVATE RESPONDENTS' CAUSE OF ACTION HAS NOT
PRESCRIBE.14
The decisive issue in this case is whether Exhibit "A" embodies a contract of sale or a
contract to sell. The distinction between the two is important for in a contract of sale,
the title passes to the vendee upon the delivery of the thing sold, whereas in a
contract to sell, by agreement, ownership is reserved in the vendor and is not to pass
until the full payment of the price. In a contract of sale, the vendor has lost and cannot
recover ownership until and unless the contract is resolved or rescinded, whereas in a
contract to sell, title is retained by the vendor until the full payment of the price, such
payment being a positive suspensive condition, failure of which is not a breach but an
event that prevented the obligation of the vendor to convey title from becoming
effective.15
A perusal of Exhibit "A" leads to no other conclusion than that it embodies a contract
of sale. The plain and clear tenor of the "DEED OF ABSOLUTE SALE OF ONE-HALF
(1/2) [OF] AN UNDIVIDED PORTION OF A PARCEL OF LAND" is that "the VENDOR
hereby . . . SELL, CONVEY AND CONVEY by way Absolute Sale the one-half (1/2)
portion . . . to the VENDEE . . . his heirs, assigns and successors-in-interest." That
the vendor, petitioner Vicente Pingol, had that clear intention was further evidenced
by his failure to reserve his title thereto until the full payment of the price.
In Dignos vs. Court of Appeals, 16 we held that a deed of sale is absolute in nature
although denominated as a "Deed of Conditional Sale" where there is no stipulation in
the deed that title to the property sold is reserved in the seller until the full payment of
the price, nor is there a stipulation giving the vendor the right to unilaterally resolve
the contract the moment the buyer fails to pay within a fixed period. Exhibit "A"
contains neither stipulation. What is merely stated therein is that "the VENDEE
agrees that in case of default in the payment of the installments due the same shall
earn a legal rate of interest, and to which the VENDOR likewise agrees."
Furthermore, as found by the Court of Appeals, the acts of the parties,
contemporaneous and subsequent to the contract, clearly show that an absolute deed
of sale was intended, by the parties and not a contract to sell:
[P]ursuant to the deed, the vendor delivered actual and constructive possession of
the property to the vendee, who occupied and took such possession, constructed a
building thereon, had the property surveyed and subdivided and a plan of the property
was prepared and submitted to the Land Registration Commission which approved it
preparatory to segregating the same and obtaining the corresponding TCT in his
name. Since the sale, appellee continuously possessed and occupied the property as
owner up to his death on July 13, 1984 and his heirs, after his death, continued the
occupancy and possession of the property up to the present. Those
contemporaneous and subsequent events are demonstrative acts that the vendor
since the sale recognized the vendee as the absolute owner of the property sold. All
those attributes of ownership are admitted by defendants in their answer, specifically
in paragraphs 7 and 9 of their special and affirmative defenses.17
The contract here being one of absolute sale, the ownership of the subject lot was
transferred to the buyer upon the actual and constructive delivery thereof. The
constructive delivery of the subject lot was made upon the execution of the deed of
sale 18 while the actual delivery was effected when the private respondents took
possession of and constructed a house on Lot No. 3223-A.
The delivery of the object of the contract divested the vendor of the ownership over
the same and he cannot recover the title unless the contract is resolved or rescinded
pursuant to Article 1592 of the New Civil Code which provides that:
In the sale of immovable property, even though it may have been stipulated that upon
failure to pay the price at the time agreed upon the rescission of the contract shall of
right take place, the vendee may pay, even after the expiration of the period, as long
as no demand for rescission of the contract has been made upon him either judicially
or by a notarial act. After the demand, the court may not grant him a new term.
Both the trial court and the Court of Appeals did not find that a notarial or judicial
rescission of the contract had been made. Although Vicente Pingol asserts that he
had declared to Francisco Donasco that he was cancelling the contract, he did not
prove that his demand for rescission was made either judicially or by a notarial act.
Petitioners fault the respondent Court for holding that the action of the petitioners is
not barred by the statute of limitations. They argue that the private respondents'
action, being based upon a written contract, has prescribed since it was brought only
in 1988 or more than ten years from the time when the latter could have lawfully
demanded performance.19
We disagree.
Although the private respondents' complaint before the trial court was denominated
as one for specific performance, it is in effect an action to quiet title. In this regard, the
following excerpt from Bucton vs. Gabar 20 is apropos:
The real and ultimate basis of petitioners' action is their ownership of one- half of the
lot coupled with their possession thereof, which entitles them to a conveyance of the
property. In Sapto, et al. v. Fabiana [103 Phil. 683, 686-87 (1958)], this Court,
speaking thru Mr. Justice J.B.L. Reyes, explained that under the circumstances no
enforcement of the contract is needed, since the delivery of possession of the land
sold had consummated the sale and transferred title to the purchaser, and that,
actually, the action for conveyance is one to quiet title, i.e., to remove the cloud upon
the appellee's ownership by the refusal of the appellants to recognize the sale made
by their predecessors.
That a cloud has been cast on the title of the private respondents is indubitable.
Despite the fact that the title had been transferred to them by the execution of the
deed of sale and the delivery of the object of the contract, the petitioners adamantly
refused to accept the tender of payment by the private respondents and steadfastly
insisted that their obligation to transfer title had been rendered ineffective.
A vendee in an oral contract to convey land who had made part payment thereof,
entered upon the land and had made valuable improvements thereon, is entitled to
bring suit to clear his title against the vendor who had refused to transfer the title to
him. It is not necessary that the vendee has an absolute title, an equitable title being
sufficient to clothe him with personality to bring an action to quiet title.21
Prescription thus cannot be invoked against the private respondents for it is aphoristic
that an action to quiet title to property in one's possession is
imprescriptible. 22 The rationale for this rule has been aptly stated thus:
The owner of real property who is in possession thereof may wait until his possession
is invaded or his title is attacked before taking steps to vindicate his right. A person
claiming title to real property, but not in possession thereof, must act affirmatively and
within the time provided by the statute. Possession is a continuing right as is the right
to defend such possession. So it has been determined that an owner of real property
in possession has a continuing right to invoke a court of equity to remove a cloud that
is a continuing menace to his title. Such a menace is compared to a continuing
nuisance or trespass which is treated as successive nuisances or trespasses, not
barred by statute until continued without interruption for a length of time sufficient to
affect a change of title as a matter of law.23
Private respondents shall, however, be liable to pay the legal rate of interest on the
unpaid balance of the purchase price from the date default or on 6 January 1976,
when the entire balance should have been paid, pursuant to the provision in the deed
of sale.
WHEREFORE, except as above modified, the Decision appealed from is hereby
AFFIRMED. As modified, the interest on the unpaid balance of P10,161.00, at the
legal rate, shall be computed from 6 January 1976. Upon the payment by the private
respondents to the petitioners of the said amount and the interest thereon, the latter
are ordered to deliver Transfer Certificate of Title No. 7435 to the Register of Deeds
of Caloocan City who shall cancel the same and issue two new transfer certificates of
title in lieu thereof, one of which shall be in the name of the herein private
respondents covering Lot No. 3223-A and the other in the name of the petitioners
covering the remainder of the lot.
SO ORDERED.
Titong v CA; G.R. No. 111141. March 6, 1998.
[G.R. No. 111141. March 6, 1998]
MARIO Z. TITONG, petitioner, vs. THE HONORABLE COURT OF APPEALS (4th
Division), VICTORICO LAURIO and ANGELES LAURIO, respondents.
DECISION
ROMERO, J.:
Like a priceless treasure coveted by many, but capable of ownership by only one, this
20,592 square-meter parcel of land located at Barrio Titong, Masbate, Masbate is
claimed by two contestants in this petition for review on certiorari. Unfortunately, legal
title over the property can be vested in only one of them.
The case originated from an action for quieting of title filed by petitioner Mario Titong.
The Regional Trial Court of Masbate, Masbate, Branch 44[1] ruled in favor of private
respondents, Victorico Laurio and Angeles Laurio, adjudging them as the true and
lawful owners of the disputed land. Affirmed on appeal to the Court of Appeals,
petitioner comes to us for a favorable reversal.
Petitioner alleges that he is the owner of an unregistered parcel of land with an area
of 3.2800 hectares, more or less, surveyed as Lot No. 3918, and declared for taxation
purposes in his name. He claims that on three separate occasions in September
1983, private respondents, with their hired laborers, forcibly entered a portion of the
land containing an area of approximately two (2) hectares, and began plowing the
same under pretext of ownership. Private respondents denied this allegation, and
averred that the disputed property formed part of the 5.5-hectare agricultural land
which they had purchased from their predecessor-in-interest,[2] Pablo Espinosa on
August 10, 1981.
In his testimony, petitioner identified Espinosa as his adjoining owner[3], asserting
that no controversy had sprouted between them for twenty years until the latter sold
Lot No. 3479 to private respondent Victorico Laurio.[4] This was corroborated by
Ignacio Villamor, who had worked on the land even before its sale to Espinosa in
1962. The boundary between the land sold to Espinosa and what remained of
petitioners property was the old Bugsayon river. When petitioner employed
Bienvenido Lerit as his tenant in 1962, he instructed Lerit to change the course of the
old river and direct the flow of water to the lowland at the southern portion of
petitioners property, thus converting the old river into a riceland.[5]
For his part, private respondent anchors his defense on the following facts:
He denied petitioners claim of ownership, recounting that the area and boundaries of
the disputed land remained unaltered during the series of conveyances prior to its
coming into his hands. According to him, petitioner first declared the land for taxation
purposes under Tax Declaration No. 2916,[6] which showed that the land had an area
of 5.5 hectares and was bounded on the North by the Bugsayon River; on the East by
property under the ownership of Lucio Lerit; on the South by property owner by
Potenciano Zaragoza; and on the West by property owned by Agapito de la Cruz.[7]
Private Respondent then alleges that, on December 21, 1960, petitioner sold this
property to Concepcion Verano vda. de Cabug, after which Tax Declaration No.
5339[8] was issued in her favor. In compliance with their mutual agreement to
repurchase the same, petitioner reacquired the property by way of sale[9] on August
24, 1962 and then declared it for taxation purposes in his name under Tax
Declaration No. 5720.[10] However, the property remained in petitioners hands for
only four (4) days because, on August 28, 1962, he sold it to Espinosa[11] who then
declared it in his name under Tax Declaration No. 12311.[12] Consequently, the
property became a part of the estate of Pablo Espinosas wife, the late Segundina
Liao Espinosa. On August 10, 1981, her heirs executed an instrument denominated
as Extrajudicial Settlement of Estate with Simultaneous Sale whereby the 5.5-hectare
property under Tax Declaration No. 12311 was sold to private respondent[13] in
consideration of the amount of P5,000.00. Thereafter, Tax Declaration No. 12738 was
issued in the name of private respondent. In all these conveyances, the area and
boundaries of the property remained exactly the same as those appearing in Tax
Declaration No. 2916 under petitioners name.
It was proved at the proceedings in the court a quo that two (2) surveys were made of
the disputed property. The first survey[14] was made for petitioner, while the second
was the relocation survey ordered by the lower court. As anticipated, certain
discrepancies between the two surveys surfaced. Thus, contrary to petitioners
allegation in his complaint that he is the owner of only 3.2800 hectares, he was
actually claiming 5.9789 hectares, the total areas of Lot Nos. 3918, 3918-A and 3606.
On the other hand, Lot No. 3479 pertaining to Espinosa, was left with only an area of
4.1841 hectares instead of the 5.5 hectares sold by petitioner to him. Apprised of the
discrepancy, private respondent filed a protest[15] before the Bureau of Lands
against the first survey, likewise filing a case for alteration of boundaries before the
municipal trial court, the proceedings of which, however, were suspended because of
the instant case.[16]
Private respondent testified that petitioner is one of the four heirs of his mother,
Leonida Zaragoza. In the Extrajudicial Settlement with Sale of Estate of the deceased
Leonida Zaragoza,[17] the heirs adjudicated unto themselves the 3.6-hectare
property of the deceased. The property involved is described in the instrument as
having been declared under Tax Declaration No. 3301[18] and as bounded on the
North by Victor Verano, on the East by Benigno Titong, on the South by the
Bugsayon River and on the West by Benigno Titong. On September 9, 1969, Tax
Declaration No. 8723 was issued to petitioner for his corresponding share in the
estate.
However, instead of reflecting only .9000 hectare as his rightful share in the
extrajudicial settlement[19] petitioners share was bloated to 2.4 hectares. It therefore
appeared to private respondent that petitioner encroached upon his (Laurios) property
and declared it a part of his inheritance.[20] The boundaries were likewise altered so
that it was bounded on the North by Victor Verano, on the East by Benigno Titong, on
the South by property owner Espinosa, and on the West by property owner Adolfo
Titong.[21] Private respondent accordingly denied that petitioner had diverted the
course of the Bugsayon River after he had repurchased the land from Concepcion
Verano vda. de Cabug[22] because the land was immediately sold to Espinosa
shortly thereafter.[23]
The lower court rendered a decision in favor of private respondents, declaring him as
the true and absolute owner of the litigated property and ordering petitioner to respect
private respondents title and ownership over the property and to pay attorneys fees,
litigation expenses, costs and moral damages.
Petitioner appealed to the Court of Appeals, which affirmed the decision. On motion
for reconsideration, the same was denied for lack of merit. Hence, this petition for
review on certiorari.
At the outset, we hold that the instant petition must be denied for the reason that the
lower court should have outrightly dismissed the complaint for quieting of title. The
remedy of quieting of title may be availed of under the circumstances enumerated in
the Civil Code:
ART. 476. Whenever there is a cloud on title to real property or any interest therein,
by reason of any instrument, record, claim, encumbrance or proceeding which 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.
An action may also be brought to prevent a cloud from being cast upon title to real
property or any interest therein.
Under this provision, a claimant must show that there is an instrument, record, claim,
encumbrance or proceeding which constitutes or casts a cloud, doubt, question or
shadow upon the owners title to or interest in real property.[24] The ground or reason
for filing a complaint for quieting of title must therefore be an instrument, record,
claim, encumbrance or proceeding. Under the maxim expresio unius est exclusio
alterius, these grounds are exclusive so that other reasons outside of the purview of
these reasons may not be considered valid for the same action.[25]
Had the lower court thoroughly considered the complaint filed, it would have had no
other course of action under the law but to dismiss it. The complaint failed to allege
that an instrument, record, claim, encumbrance or proceeding beclouded the plaintiffs
title over the property involved. Petitioner merely alleged that the defendants
(respondents herein), together with their hired laborers and without legal justification,
forcibly entered the southern portion of the land of the plaintiff and plowed the same:
He then proceeded to claim damages and attorneys fees. He prayed that, aside from
issuing a writ or preliminary injunction enjoining private respondents and their hired
laborers from intruding into the land, the court should declare him the true and
absolute owner thereof. Hence, through his allegations, what petitioner imagined as
clouds cast on his title to the property were private respondents alleged acts of
physical intrusion into his purported property. Clearly, the acts alleged may be
considered grounds for an action for forcible entry but definitely not one for quieting of
title.
When the issues were joined by the filing of the answer to the complaint, it would
have become apparent to the court that the case was a boundary dispute. The
answer alleged, among other matters, that petitioner, in bad faith, surreptitiously,
maliciously and fraudulently had the land in question included in the survey of his land
which extends to the south only as far as the Bugsayon River which is the visible and
natural and common boundary between the properties.[26] Moreover, during the
hearing of the case, petitioner proved that it was actually a boundary dispute by
evidence showing what he considered as the boundary of his property which private
respondents perceived as actually encroaching on their property. In this regard, the
following pronouncements of the Court are apropos:
x x x (T)he trial court (and likewise the respondent Court) cannot, in an action for
quieting of title, order the determination of the boundaries of the claimed property, as
that would be tantamount to awarding to one or some of the parties the disputed
property in an action where the sole issue is limited to whether the instrument, record,
claim, encumbrance or proceeding involved constitutes a cloud upon the petitioners
interest or title in and to said property. Such determination of boundaries is
appropriate in adversarial proceedings where possession or ownership may properly
be considered and where evidence aliunde, other than the `instrument, record, claim,
encumbrance or proceeding itself, may be introduced. An action for forcible entry,
whenever warranted by the period prescribed in Rule 70, or for recovery of
possession de facto, also within the prescribed period, may be availed of by the
petitioners, in which proceeding the boundary dispute may be fully threshed out.[27]
Nonetheless, even if the complaint below were to be considered as a valid one for
quieting of title, still, the instant petition for review on certiorari must fail.
As a general rule, findings of fact of the Court of Appeals are binding and conclusive
upon this Court. Such factual findings shall not be disturbed normally unless the same
are palpably unsupported by the evidence on record or the judgment itself is based
on a misapprehension of facts.[28] Upon an examination of the records, the Court
finds no evident reason to depart from the general rule.
The courts below correctly held that when petitioner sold, ceded, transferred and
conveyed the 5.5-hectare land in favor of Pablo Espinosa, his rights of ownership and
possession pertaining thereto ceased and these were transferred to the latter. In the
same manner, Espinosas rights of ownership over the land ceased and were
transferred to private respondent upon its sale to the latter. This finds justification in
the Civil Code, as follows:
ART. 1458. By the contract of sale one of the contracting parties obligates himself to
transfer the ownership of and to deliver a determinate thing, and the other to pay
therefor a price certain in money or its equivalent.
A contract of sale may be absolute or conditional.
In other words, a sale is a contract transferring dominion and other real rights in the
thing sold.[29] In the case at bar, petitioners claim of ownership must of necessity fail
because he has long abdicated his rights over the land when he sold it to private
respondents predecessor-in-interest.
Petitioners claim that he acquired ownership over the disputed land through
possession for more than twenty (20) years is likewise unmeritorious. While Art. 1134
of the Civil Code provides that (o)wnership and other real rights over immovable
property are acquired by ordinary prescription through possession of ten years, this
provision of law must be read in conjunction with Art. 1117 of the same Code. This
article states that x x x (o)rdinary acquisitive prescription of things requires
possession in good faith and with just title for the time fixed by law. Hence, a
prescriptive title to real estate is not acquired by mere possession thereof under claim
of ownership for a period of ten years unless such possession was acquired con justo
titulo y buena fe (with color of title and good faith).[30] The good faith of the
possessor consists in the reasonable belief that the person from whom he received
the thing was the owner thereof, and could transmit his ownership.[31] For purposes
of prescription, there is just title when the adverse claimant came into possession of
the property through one of the modes recognized by law for the acquisition of
ownership or other real rights but the grantor was not the owner or could not transmit
any right.[32]
Petitioners have not satisfactorily met the requirements of good faith and just title. As
aptly observed by the trial court, the plaintiffs admitted acts of converting the
boundary line (Bugsayon River) into a ricefield and thereafter claiming ownership
thereof were acts constituting deprivation of the rights of others and therefore
tantamount to bad faith.[33] To allow petitioner to benefit from his own wrong would
run counter to the maxim ex dolo malo non oritur actio (no man can be allowed to
found a claim upon his own wrongdoing). Extraordinary acquisitive prescription
cannot similarly vest ownership over the property upon petitioner. Art. 1137 of the
Civil Code states that (o)wnership and other real rights over immovables prescribe
through uninterrupted adverse possession thereof for thirty years, without need of title
or of good faith. Petitioners alleged possession in 1962 up to September 1983 when
private respondents entered the property in question spanned twenty-one (21) years.
This period of time is short of the thirty-year requirement mandated by Art. 1137.
Petitioner basically anchors his claim over the property on the survey plan prepared
upon his request,[34] the tax declaration in his name,[35] the commissioners report
on the relocation survey,[36] and the survey plan.[37] Respondent court correctly held
that these documents do not conclusively demonstrate petitioner's title over Lot Nos.
3918-A and 3606.
A survey is the act by which the quantity of a parcel of land is ascertained and also a
paper containing a statement of courses, distances, and quantity of land.[38] A survey
under a proprietary title is not a conveyance. It is an instrument sui generis in the
nature of a partition; a customary mode in which a proprietor has set off to himself in
severalty a part of the common estate.[39] Therefore, a survey, not being a
conveyance, is not a mode of acquiring ownership. A fortiori, petitioner cannot found
his claim on the survey plan reflecting a subdivision of land because it is not
conclusive as to ownership as it may refer only to a delineation of possession.[40]
Furthermore, the plan was not verified and approved by the Bureau of Lands in
accordance with Sec. 28, paragraph 5 of Act No. 2259, the Cadastral Act, as
amended by Sec. 1862 of Act No. 2711. Said law ordains that private surveyors send
their original field notes, computations, reports, surveys, maps and plots regarding a
piece of property to the Bureau of Lands for verification and approval.[41] A survey
plan not verified and approved by said Bureau is nothing more than a private writing,
the due execution and authenticity of which must be proven in accordance with Sec.
20 of Rule 132 of the Rules of Court. The circumstance that the plan was admitted in
evidence without any objection as to its due execution and authenticity does not
signify that the courts shall give probative value therefor. To admit evidence and not
to believe it subsequently are not contradictory to each other. This Court cannot alter
the conclusions of the Court of Appeals on the credibility accorded to evidence
presented by the parties.[42]
amiss to conclude that either petitioner misapprehended the lower courts decision or
he is trying to contumaciously mislead or worse, deceive this Court.
With respect to the awards of moral damages of P10,000.00 and attorneys fees of
P2,000.00, the Court finds no cogent reason to delete the same. Jurisprudence is
replete with rulings to the effect that where fraud and bad faith have been established,
the award of moral damages is in order.[48] This pronouncement finds support in Art.
2219 (10) of the Civil Code allowing the recovery of moral damages for acts
enumerated in Art. 21 of the same Code. This article states that (a)ny person who
wilfully causes loss or injury to another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter for the damage. The moral
damages are hereby increased to P30,000.00. We agree with the respondent court in
holding that the award of attorneys fees is justified because petitioner filed a clearly
unfounded civil action.[49]
WHEREFORE, the instant petition for review on certiorari is hereby DENIED and the
questioned Decision of the Court of Appeals AFFIRMED. This Decision is
immediately executory. Costs against petitioner.
SO ORDERED.

Similarly, petitioners tax declaration issued under his name is not even persuasive Sps. Portic v Cristobal; G.R. No. 156171. April 22, 2005.
evidence of his claimed ownership over the land in dispute. A tax declaration, by
itself, is not considered conclusive evidence of ownership.[43] It is merely an indicium Spouses RICARDO and G.R. No. 156171
of a claim of ownership.[44] Because it does not by itself give title, it is of little value in FERMA PORTIC,
proving ones ownership.[45] Moreover, the incompatibility in petitioners tax Petitioners, Present:
declaration and the commissioners report as regards the area of his claimed property Panganiban, J.,
is much too glaring to be ignored. Tax Declaration No. 8717 states that petitioners Chairman,
property has an area of 3.2800 hectares while the totality of his claim according to the Sandoval-Gutierrez,
commissioned geodetic engineers survey amounts to 4.1385 hectares. There is - versus - Corona,
therefore a notable discrepancy of 8,585 square meters. On the other hand, private Carpio Morales, and
respondents claimed property, as borne out by Tax Declaration No. 12738, totals 5.5 Garcia, JJ
hectares, a more proximate equivalent of the 5.2433-hectare property as shown by Promulgated:
the commissioners report. ANASTACIA CRISTOBAL,
Respondent. April 22, 2005
There is also nothing in the commissioners report that substantiates petitioners claim x -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- x
that the disputed land was inside his property. Petitioner capitalizes on the lower
courts statement in its decision[46] that as reflected in the commissioners report
dated May 23, 1984 (Exhibit 3-3-A), the area claimed is inside lot 3918 of the DECISION
defendants (Exhibit 2)[47] or the private respondents. A careful reading of the
decision would show that this statement is found in the summary of defendants
(herein private respondents) evidence. Reference to Lot No. 3918 may, therefore, be PANGANIBAN, J.:
attributed to mere oversight as the lower court even continues to state the defendants
assertion that the 2-hectare land is part of their 5.5-hectare property. Hence, it is not
A
n agreement in which ownership is reserved in the vendor and is not to pass to the
vendee until full payment of the purchase price is known as a contract to sell. The
absence of full payment suspends the vendors obligation to convey title. This
principle holds true between the parties, even if the sale has already been registered.
Registration does not vest, but merely serves as evidence of, title to a particular
property. Our land registration laws do not give title holders any better ownership than
what they actually had prior to registration.
The Case
Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, challenging
the January 29, 2002 Decision[2] and the November 18, 2002 Resolution[3] of the
Court of Appeals (CA) in CA-GR CV No. 66393. The assailed Decision disposed as
follows:
WHEREFORE, foregoing considered, the appealed decision is hereby REVERSED
and SET ASIDE. A new one is hereby entered ORDERING defendant-appellant to
pay the unpaid balance of P55,000.00 plus legal interest of 6% per annum counted
from the filing of this case. The ownership of defendant-appellant over the subject
property is hereby confirmed.
No pronouncement as to costs.[4]
In the challenged Resolution,[5] the CA denied petitioners Motion for Partial
Reconsideration.
The Facts
The facts were summarized by the appellate court as follows:
Spouses Clodualdo Alcantara and Candelaria Edrosalam were the original registered
owners of a parcel of land with three-door apartment, located at No. 9, 1st Street
BBB, Marulas, Valenzuela City. Transfer Certificate of Title No. T-71316 was issued
in the names of spouses Clodualdo Alcantara and Candelaria Edrosalam.
On October 2, 1968, spouses Clodualdo Alcantara and Candelaria Edrosalam sold
the subject property in favor of [petitioners] with the condition that the latter shall
assume the mortgage executed over the subject property by spouses Clodualdo
Alcantara and Candelaria Edrosalam in favor of the Social Security System.
[Petitioners] defaulted in the payment of the monthly amortizations due on the
mortgage. The Social Security System foreclosed the mortgage and sold the subject
property at public auction with the Social Security System as the highest bidder.
On May 22, 1984, before the expiration of the redemption period, [petitioners] sold the
subject property in favor of [respondent] in consideration of P200,025.89. Among
others, the parties agreed that [respondent] shall pay the sum of P45,025.89 as down
payment and the balance of P155,000.00 shall be paid on or before May 22, 1985.
The parties further agreed that in case [respondent] should fail to comply with the
conditions, the sale shall be considered void and [petitioners] shall reimburse
[respondent] of whatever amount already paid.
On the same date, [petitioners] and [respondent] executed a Deed of Sale with
Assumption of Mortgage whereby [petitioners] sold the subject property in favor of
[respondent] in consideration of P80,000.00, P45,000.00 thereof shall be paid to the
Social Security System.
On July 30, 1984, spouses Clodualdo Alcantara and Candelaria Edrosalam, the
original owners of the subject property, sold the subject property in favor of
[respondent] for P50,000.00.
On the same date, [respondent] executed a Deed of Mortgage whereby [respondent]
constituted a mortgage over the subject property to secure a P150,000.00
indebtedness in favor of [petitioners].
[Respondent] paid the indebtedness due over the subject property to the Social
Security System.
On August 6, 1984, Transfer Certificate of Title No. T-71316 in the names of spouses
Clodualdo Alcantara and Candelaria Edrosalam was cancelled and in lieu thereof
Transfer Certificate of Title No. T-113299 was issued in the name of [respondent].
On May 20, 1996, [petitioners] demanded from [respondent] the alleged unpaid
balance of P55,000.00. [Respondent] refused to pay.
On June 6, 1996, [petitioners] filed this instant civil case against [respondent] to
remove the cloud created by the issuance of TCT No. T-113299 in favor of
[respondent]. [Petitioners] claimed that they sold the subject property to [respondent]
on the condition that [respondent] shall pay the balance on or before May 22, 1985;
that in case of failure to pay, the sale shall be considered void and [petitioners] shall
reimburse [respondent] of the amounts already paid; that [respondent] failed to fully
pay the purchase price within the period; that on account of this failure, the sale of the
subject property by [petitioners] to [respondent] is void; that in spite of this failure,
[respondent] required [petitioners] to sign a lease contract over the apartment which
[petitioners] occupy; that [respondent] should be required to reconvey back the title to
the subject property to [petitioners].
[Respondent] on her part claimed that her title over the subject property is already
indefeasible; that the true agreement of the parties is that embodied in the Deed of
Absolute Sale with Assumption of Mortgage; that [respondent] had fully paid the
purchase price; that [respondent] is the true owner of the subject property; that
[petitioners] claim is already barred by laches.[6]
After trial, the Regional Trial Court (RTC) of Valenzuela City rendered this judgment
in favor of petitioners:
WHEREFORE, premises considered, this Court hereby adjudicates on this case as
follows:
1.) The Court hereby orders the quieting of title or removal of cloud over the
[petitioners] parcel of land and three (3) door apartment now covered by Transfer
Certificate of Title No. T-113299 of the Registry of Deeds for Caloocan City and Tax
Declaration Nos. C-018-00235 & C-031-012077 respectively, of Valenzuela City;
2.) The Court hereby orders the [respondent] to reconvey in favor of the
[petitioners] the parcel of land and three (3) door apartment now covered by Transfer
Certificate of Title No. T-113299 of the Registry of Deeds of Caloocan City after
reimbursement by the [petitioners] of the amount actually paid by the [respondent] in
the total amount of P145,025.89;
3.) The Court hereby DENIES damages as claimed by both parties.[7]
Ruling of the Court of Appeals
The Court of Appeals opined that the first Memorandum of Agreement (MOA)
embodied the real agreement between the parties, and that the subsequent Deeds
were executed merely to secure their respective rights over the property.[8] The MOA
stated that Cristobal
had not fully paid the purchase price. Although this statement might have given rise to
a cause of action to annul the Deed of Sale, prescription already set in because the
case had been filed beyond the ten-year reglementary period,[9] as observed by the
CA. Nonetheless, in conformity with the principle of unjust enrichment, the appellate
court ordered respondent to pay petitioners the remaining balance of the purchase
price.[10]
In their Motion for Partial Reconsideration, petitioners contended that their action was
not one for the enforcement of a written contract, but one for the quieting of title -- an
action that was imprescriptible as long as they remained in possession of the
premises.[11] The CA held, however, that the agreement between the parties was
valid, and that respondents title to the property was amply supported by the
evidence.[12] Therefore, their action for the quieting of title would not prosper,
because they failed to show the invalidity of the cloud on their title.
Hence, this Petition.[13]
The Issue
In its Memorandum, petitioners raise the following issues for our consideration:
(1) Whether or not the [petitioners] cause of action is for quieting of title.
(2) Whether or not the [petitioners] cause of action has prescribed.[14]
The main issue revolves around the characterization of the parties agreement and the
viability of petitioners cause of action.
This Courts Ruling
The Petition has merit.
Main Issue:
Nature of the Action: Quieting of Title or
Enforcement of a Written Contract
Petitioners argue that the action they filed in the RTC was for the quieting of title.
Respondents demand that they desist from entering into new lease agreements with
the tenants of the property allegedly attests to the fact of their possession of the
subject premises.[15] Further, they point to the existence of Civil Case No. 7446, an
action for unlawful detainer that respondent filed against them,[16] as further proof of
that fact. Being in continuous possession of the property, they argue that their action
for the quieting of title has not prescribed.[17]
On the other hand, respondent joins the appellate court in characterizing the action
petitioners filed in the RTC as one for the enforcement of the MOA. Being based on a
written instrument, such action has already prescribed, respondent claims.[18] She
adds that petitioners could not have been in continuous possession of the
subject property because, under a duly notarized lease agreement, they have been
paying her a monthly rental fee of P500, which was later increased to P800.
Two questions need to be answered to resolve the present case; namely, (1) whether
Cristobals title to the property is valid; and (2) whether the Portics are in possession
of the premises, a fact that would render the action for quieting of title imprescriptible.
Validity of Title
The CA held that the action for the quieting of title could not prosper, because
Cristobals title to the property was amply supported by evidence.
Article 476 of the Civil Code provides as follows:
Whenever there is a cloud on title to real property or any interest therein, by reason of
any instrument, record, claim, encumbrance or proceeding which 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.
An action may also be brought to prevent a cloud from being cast upon title to real
property or any interest therein.
Suits to quiet title are characterized as proceedings quasi in rem.[19] Technically,
they are neither in rem nor in personam. In an action quasi in rem, an individual is
named as defendant.[20] However, unlike suits in rem, a quasi in rem judgment is
conclusive only between the parties.[21]
Generally, the registered owner of a property is the proper party to bring an action to
quiet title. However, it has been held that this remedy may also be availed of by a
person other than the registered owner because, in the Article reproduced above, title
does not necessarily refer to the original or transfer certificate of title.[22] Thus, lack of
an actual certificate of title to a property does not necessarily bar an action to quiet
title. As will be shown later, petitioners have not turned over and have thus retained
their title to the property.
On the other hand, the claim of respondent cannot be sustained. The transfer of
ownership of the premises in her favor was subject to the suspensive condition
stipulated by the parties in
paragraph 3 of the MOA, which states as follows:
3. That while the balance of P155,000.00 has not yet been fully paid the FIRST
PARTY OWNERS shall retain the ownership of the above described parcel of land
together with its improvements but the SECOND PARTY BUYER shall have the right
to collect the monthly rentals due on the first door (13-A) of the said apartment;[23]
The above-cited provision characterizes the agreement between the parties as a
contract to sell, not a contract of sale. Ownership is retained by the vendors, the
Portics; it will not be passed to the vendee, the Cristobals, until the full payment of the
purchase price. Such payment is a positive suspensive condition, and failure to
comply with it is not a breach of obligation; it is merely an event that prevents the
effectivity of the obligation of the vendor to convey the title.[24] In short, until the full
price is paid, the vendor retains ownership.
The mere issuance of the Certificate of Title in favor of Cristobal did not vest
ownership in her. Neither did it validate the
alleged absolute purchase of the lot. Time and time again, this Court has stressed
that registration does not vest, but merely serves as evidence of, title. Our land
registration laws do not give the holders any better title than that which they actually
have prior to registration. [25]
Under Article 1544 of the Civil Code, mere registration is not enough to acquire a new
title. Good faith must concur.[26] Clearly, respondent has not yet fully paid the
purchase price. Hence, as long as it remains unpaid, she cannot feign good faith. She
is also precluded from asserting ownership against petitioners. The appellate courts
finding that she had a valid title to the property must, therefore, be set aside.
Continuous Possession
The issue of whether the Portics have been in actual, continuous possession of the
premises is necessarily a question of fact. Well-entrenched is the rule that findings of
fact of the Court of Appeals, when supported by substantial evidence, are final and
conclusive and may not be reviewed on appeal.[27] This Court finds no cogent
reason to disturb the CAs findings sustaining those of the trial court, which held that
petitioners had been in continuous possession of the premises. For this reason, the
action to quiet title has not prescribed.
WHEREFORE, the Petition is GRANTED. The challenged Decision and Resolution of
the Court of Appeals are REVERSED and SET ASIDE. The Decision of the RTC of
Valenzuela City in Civil Case No. 4935-V-96, dated September 23, 1999, is hereby
REINSTATED. No pronouncement as to costs.
SO ORDERED.