Quieting of Title Case No.

01

DOCTRINE

Quieting of title is a common law remedy for the removal of any cloud upon or doubt or
uncertainty with respect to title to real property.

Article 477 of the Civil Code further provides that the plaintiff in an action to quiet title
must have legal or equitable title to or interest in the real property, which is the subject
matter of the action, but need not be in possession of said property. For an action to
quiet title to prosper, two indispensable requisites must concur: (1) the plaintiff or
complainant has a legal or equitable title or interest in the real property subject of the
action; and (2) the deed, claim, encumbrance, or proceeding claimed to be casting a
cloud on his title must be shown to be in fact invalid or inoperative despite its prima
facie appearance of validity or legal efficacy.

Herminio M. De Guzman vs. Tabangao Realty Inc., G.R. No. 154262 February, 11,
2015)

J, Leonardo-De Castro

FACTS

Sometime in 1980, Serafin de Guzman (Serafin) and Josefino de Guzman3 (Josefino)

applied for, and were granted, authority to distribute oil and lubricating products
manufactured and marketed by Filipinas Shell Petroleum Corporation (FSPC). In the
course of their business, they purchased on credit oil and lubricating products from
FSPC, but they eventually failed to pay for their credit purchases from FSPC.

Thus, FSPC filed a complaint for sum of money against Serafin and Josefino before the
RTC of Manila. After trial, decision was rendered finding Serafin and Josefino liable to
pay their outstanding obligation to FSPC and the judgment became final and executory.
Granting the motion of FSPC and ordered the issuance of a writ of execution on May 3,
1983.

On June 30, 1983, FSPC levied upon a parcel of land, within area of 74,415 square
meters, situated in Sta. Cruz de Malabon, Trece Martires City, Cavite Province covered
by TCT # 3531 in the name of Spouses Serafin & Amelia de Guzman.

At the public auction, the sheriff awarded the certificate of sale to Tabangao Realty as
the highest bidder and the same was annotated on TCT # 3531 on April 13, 1988. The
Spouses De Guzman did not redeem the subject property within one year from
registration of the Sheriff’s Certificate of Sale on TCT # 3531.

On October 19, 2001, upon the deaths of Spouses De Guzman, their heirs filed a
complaint for quieting of title alleging on the ground that the Sheriff’s Certificate of Sale
has lost its effectivity as it had been terminated and extinguished by prescription, laches
and estoppel, since more than 13 years having elapsed from its registration on April 13,
1988 without the buyer taking any step to consolidate its ownership and/or take
possession of the property.

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However, despite of filing an answer, Respondent filed a Motion to Dismiss based on

two grounds: (a) the Complaint failed to comply with the requirements on certification
against forum shopping; and (b) the Complaint failed to state a cause of action.

The RTC rendered it decision in favor of respondent that the Sheriff’s Certificate of Sale
is valid and finding merit in the Motion to Dismiss by filed by respondent.

Petitioners filed a Motion for Reconsideration of the foregoing Order, but it was denied.
Hence, this petition.

ISSUE

Whether or not RTC-Trece Martires committed reversible error in dismissing

petitioners’ Complaint for Quieting of Title on the ground of failure to state a cause of
action.

HELD

The Court rules in the negative.

In Baricuatro, Jr. v. Court of Appeals, the Court described the nature of an action for
quieting of title, thus:

“Regarding the nature of the action filed before the trial court, quieting of title is a
common law remedy for the removal of any cloud upon or doubt or uncertainty with
respect to title to real property. Originating in equity jurisprudence, its purpose is to
secure "x x x an adjudication that a claim of title to or an interest in property, adverse to
that of the complainant, is invalid, so that the complainant and those claiming under him
may be forever afterward free from any danger of hostile claim." In an action for
quieting of title, the competent court is tasked to determine the respective rights of the
complainant and other claimants, "x x x 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
improvement she may desire, to use, and even to abuse the property as he deems best x
x x." (Citation omitted.)"

Under Article 477 of the Civil Code further provides that the plaintiff in an action to
quiet title must have legal or equitable title to or interest in the real property, which is
the subject matter of the action, but need not be in possession of said property.
For an action to quiet title to prosper, two indispensable requisites must concur: (1) the
plaintiff or complainant has a legal or equitable title or interest in the real property
subject of the action; and (2) the deed, claim, encumbrance, or proceeding claimed to be
casting a cloud on his title must be shown to be in fact invalid or inoperative despite its
prima facie appearance of validity or legal efficacy.

Complainants’ allegation that they were children and only heirs of the deceased Spouses
De Guzman and that the subject property was still registered in Spouses De Guzman’s

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names under TCT # 3531. However, these allegations are insufficient to establish
complainants’ title to the property.

Respondent Tabangao was already substituted to and acquired all the rights, title,
interest, and claims of the Spouses De Guzman to the subject property on April 13, 1989,
when the one – year redemption period expired. Upon the deaths of Amelia de Guzman
on January 1, 1997 and her husband Serafin de Guzman on April 23, 2001, they had no
more rights, title, interest and claim to the subject property on by succession to
complainants as their heirs.

The execution of the final deed of sale and/or conveyance to Tabangao is a mere
formality and confirmation of the title already vested in respondent under Rule 39,
Section 33 of the Rules of Court. There is nothing in the rules requiring the institution of
a separate action for execution of such a deed. Therefore, no prescription period for any
action has begun to run.

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Doctrine

Quieting of title is a common law remedy for the removal of any cloud upon, 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.

PHIL-VILLE DEVELOPMENT AND HOUSING CORPORATION, Petitioner, vs. MAXIMO

BONIFACIO, CEFERINO R. BONIFACIO, APOLONIO B. TAN, BENITA B. CAINA, CRISPINA
B. PASCUAL, ROSALIA B. DE GRACIA, TERESITA S. DORONIA, CHRISTINA GOCO AND
ARSENIO C. BONIFACIO, in their capacity as the surviving heirs of the late ELEUTERIA
RIVERA VDA. DE BONIFACIO, Respondents. G.R. No. 167391               June 8, 2011

VILLARAMA, JR., J.

Facts

Phil-Ville Development and Housing Corporation is the registered owner of three

parcels of land. The subdivision plan is located in Caloocan City, having a total area of
8,694 square meters and covered by three (3) Transfer Certificates of Titles (TCT). Prior
to their subdivision, the lots were collectively designated as Lot 1-G of the subdivision
plan Psd-2731 registered in the name of Phil-Ville under TCT No. T-148220. 9 Said
parcels of land form part of Lot 23-A of the Maysilo Estate originally covered by Original
Certificate of Title (OCT) No. 994 registered on May 3, 1917 in the name of Isabel Gil de
Sola as the judicial administratrix of the estate of Gonzalo Tuason and thirty-one (31)
others. Phil-Ville acquired the lots by purchase from N. Dela Merced and Sons, Inc. on
July 24, 1984.

The heirs of Maria de la Concepcion Vidal, a co-owner to the extent of 1-189/1000% of

the properties of the Hacienda Maysilo, filed a petition with the Court of First Instance
of Rizal in Land Registration Case No. 4557. They prayed for the substitution of their
names on OCT No. 994 in place of Maria de la Concepcion Vidal. Said petition was
granted by the CFI in an Order dated May 25, 1962.

Afterwards, the alleged heirs of Maria de la Concepcion Vidal filed a petition for the
partition of the properties. The CFI granted the petition and appointed three
commissioners to determine the most equitable division of the properties. Said
commissioners, however, failed to submit a recommendation.

Thirty-one (31) years later, on May 22, 1996, Eleuteria Rivera filed a Supplemental
Motion in Civil Case No. C-424, for the partition and segregation of portions of the
properties covered by OCT No. 994. The Regional Trial Court (RTC), Branch 120, of
Caloocan City, through Judge Jaime D. Discaya, to whom the case was transferred,
granted said motion.

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Thereafter, one Rosauro R. Aquino filed a petition for certiorari contesting said Order of
December 12, 1996 and impugning the partial partition and adjudication to Eleuteria
Rivera of Lots 23, 28-A-1 and 28-A-2 of the Maysilo Estate. Subsequently, on February
22, 1997, Eleuteria Rivera Vda. de Bonifacio died at the age of 96.

On April 29, 1997, the Court of Appeals rendered a Decision in CA-G.R. SP No. 43034
granting Rosauro R. Aquino’s petition and setting aside the RTC’s Order of September 9,
1996, which granted Eleuteria Rivera’s prayer for partition and adjudicated in her favor
portions of Lots 23, 28-A-1 and 28-A-2 of the Maysilo Estate. The appellate court
likewise set aside the Order and the Writ of Possession dated December 26, 1996.

On June 5, 1997, petitioner filed a complaint for quieting of title and damages against
the surviving heirs of Eleuteria Rivera Vda. de Bonifacio n the RTC of Caloocan City,
Branch 122.

In a Decision dated March 24, 2000, the Caloocan RTC ordered the quieting of Phil-
Ville’s titles over Lots 1-G-1, 1-G-2 and 1-G-3, declaring as valid TCT Nos. 270921,
270922 and 270923 in Phil-Ville’s name. The fallo of said Decision reads:

In upholding Phil-Ville’s titles, the trial court adopted the conclusion in Senate
Committee Report No. 1031 dated May 25, 1998 that there is only one OCT No. 994,
registered on May 3, 1917, and that OCT No. 994, purportedly registered on April 19,
1917 (from which Eleuteria Rivera’s title originated) does not exist. The trial court also
found that it was physically impossible for respondents to be the heirs of Eleuteria
Rivera’s grandmother, Maria de la Concepcion Vidal, one of the registered owners of
OCT No. 994, because Maria de la Concepcion was born sometime in 1903, later than
Eleuteria Rivera who was born in 1901. Lastly, the RTC pointed out that contrary to the
contentions of Rivera’s heirs, there is no overlapping of titles inasmuch as Lot 23 lies far
from Lot 23-A, where Phil-Ville’s lands are located.

On April 13, 2000, Atty. K.V. Faylona, on behalf of respondents, addressed a letter to the
Branch Clerk of Court of the Caloocan City RTC requesting the complete address of Phil-
Ville and its counsel. Supposedly, respondents’ counsels of record, Attys. Nicomedes
Tolentino and Jerry D. Bañ ares, had abandoned the defense but still kept the records of
the case. Thus, the Notice of Appeal on behalf of respondents was filed by Atty. Faylona
while two of the heirs, Danilo Bonifacio and Carmen Bernardino, filed a separate Notice
of Appeal through their own counsel. The appeals were consolidated and docketed as
CA-G.R. CV No. 66547.

On April 17, 2000, respondents withdrew their appeal and instead filed before this
Court a Petition for Review on Certiorari.

Subsequently, on January 31, 2005, the Court of Appeals promulgated its assailed
Decision in CA-G.R. SP No. 62211, setting aside the RTC judgment and dismissing Phil-
Ville’s complaint.

Phil-Ville sought reconsideration of the decision, but the Court of Appeals denied its
motion in the assailed Resolution dated March 15, 2005. Hence, this petition.

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Issue

Whether TCT No. C-314537 in the name of Eleuteria Rivera constitutes a cloud over
petitioner’s titles over portions of Lot 23-A of the Maysilo Estate.

Ruling

Yes, petitioner submits that a cloud exists over its titles because TCT No. C-314537 in
the name of Eleuteria Rivera purports to cover the same parcels of land covered by
petitioner’s TCT Nos. 270921, 270922 and 270923. It points out that what appears to be
a valid and effective TCT No. C-314537 is, in truth, invalid because it covers Lot 23
which is not among those described in the OCT No. 994 on file with the Register of
Deeds of Rizal and registered on May 3, 1917. Petitioner notes that the OCT No. 994
allegedly registered on April 19, 1917 and from which TCT No. C-314537 was derived, is
not found in the records of the Register of Deeds. In other words, the action seeks the
removal of a cloud from Phil-Ville’s title and/or the confirmation of its ownership over
the disputed properties as the successor-in-interest of N. Dela Merced and Sons, Inc.

Quieting of title is a common law remedy for the removal of any cloud upon, 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 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 any desired
improvements, as well as use, and even abuse the property.

In order that an action for quieting of title may prosper, two requisites must concur: (1)
the plaintiff or complainant has a legal or equitable title 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.

As regards the first requisite, we find that petitioner was able to establish its title over
the real properties subject of this action. Petitioner submitted in evidence the Deed of
Absolute Sale by which it acquired the subject property from N. Dela Merced and Sons,
Inc., as well as copies of OCT No. 994 dated May 3, 1917 and all the derivative titles
leading to the issuance of TCT Nos. 270921, 270922 and 270923 in petitioner’s name.

On the other hand, respondents have not adduced competent evidence to establish their
title to the contested property or to dispute petitioner’s claim over the same. It must be
noted that the RTC Order dated September 9, 1996 in Civil Case No. C-424, which

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resulted in the issuance of TCT No. C-314537 in the name of Eleuteria Rivera had long
been set aside by the Court of Appeals in CA-G.R. SP No. 43034. Clearly, respondents’
claim anchored primarily on TCT No. C-314537 lacks legal basis. Rather, they rely
simply on the Court’s pronouncement in MWSS v. Court of Appeals and Heirs of Gonzaga
v. Court of Appeals that OCT No. 994 registered on May 3, 1917 and all titles emanating
from it are void.

The Death Certificate of Eleuteria Rivera reveals that she was 96 years old when she
died on February 22, 1997. That means that she must have been born in 1901. That
makes Rivera two years older than her alleged grandmother Maria de la Concepcion
Vidal who was born in 1903. Hence, it was physically impossible for Eleuteria Rivera to
be an heir of Maria de la Concepcion Vidal.

Moreover, the Partition Plan of the Maysilo Estate shows that Lot 23-A was awarded,
not to Maria de la Concepcion Vidal, but to Isabel Tuason, Esperanza Tuason, Trinidad
Jurado, Juan O’ Farrell and Angel O’ Farrell. What Vidal received as her share were Lot 6
and portions of Lots 10 and 17, all subject to the usufructuary right of her mother
Mercedes Delgado. This was not at all disputed by respondents.

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.

Thus, the cloud on title consists of: (1) any instrument, record, claim, encumbrance or
proceeding; (2) which is apparently valid or effective; (3) but is in truth and in fact
invalid, ineffective, voidable, or unenforceable; and (4) may be prejudicial to the title
sought to be quieted. The fourth element is not present in the case at bar.

While it is true that TCT No. C-314537 in the name of Eleuteria Rivera is an instrument
that appeared to be valid but was subsequently shown to be invalid, it does not cover
the same parcels of land that are described in petitioner’s titles. Foremost, Rivera’s title
embraces a land measuring 14,391.54 square meters while petitioner’s lands has an
aggregate area of only 8,694 square meters. On the one hand, it may be argued that
petitioner’s land could be subsumed within Rivera’s 14,391.54-square meter property.
Yet, a comparison of the technical descriptions of the parties’ titles negates an
overlapping of their boundaries.

Significantly, an action to quiet title is characterized as a proceeding quasi in rem. In an

action quasi in rem, an individual is named a defendant and the purpose of the
proceeding is to subject his interests 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 judgment therein is binding only upon the parties who joined in
the action.

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In the present case, petitioner filed a complaint for quieting of title after it was served a
notice to vacate but before it could be dispossessed of the subject properties. Notably,
the Court of Appeals, in CA-G.R. SP No. 43034, had earlier set aside the Order which
granted partial partition in favor of Eleuteria Rivera and the Writ of Possession issued
pursuant thereto. And although petitioner’s complaint is captioned as Quieting of Title
and Damages, all that petitioner prayed for, is for the court to uphold the validity of its
titles as against that of respondents’. This is consistent with the nature of the relief in an
action for declaratory relief where the judgment in the case can be carried into effect
without requiring the parties to pay damages or to perform any act.

Thus, while petitioner was not able to demonstrate that respondents’ TCT No. C-314537
in the name of Eleuteria Rivera constitutes a cloud over its title, it has nevertheless
successfully established its ownership over the subject properties and the validity of its
titles which entitles it to declaratory relief. WHEREFORE, the petition for review on
certiorari is GRANTED.

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DOCTRINE

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.

Salvador v. Patricia Inc., G.R. No. 195834, November 09, 2016

Bersamin, J.

FACTS

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.

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. 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.

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. On appeal, the CA,
reversed the RTC's judgment, 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. The CA denied the motions for reconsideration of the
petitioners and intervenor Mijares. Hence, this appeal by the petitioners.

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Quieting of Title Case No. 01

ISSUE

Whether or not the Court of Appeals is correct.

HELD

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.

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.

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 b e 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.

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.

To allow the boundary dispute to be litigated in the action for quieting of title would
violate Section 4846 of the Property Registration Decree by virtue of its prohibition

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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. This is exactly what the petitioners sought to do herein, seeking to modify
or otherwise cancel Patricia, Inc.'s title.

DOCTRINE

For an action to quiet title to prosper, two (2) 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.

Filipinas Eslon Manufacturing Corp. vs. Heirs of Basilio Llanes, GR. No. 194114, March
27, 2019

J. CAGUIOA

FACTS

Filipinas Eslon Manufacturing Corporation (FEMCO) is a manufacturer of "eslon pipes

and accessories". The counsel for respondents Heirs of Basilio Llanes, wrote a Letter to
the management of FEMCO informing them that its plant site may have encroached into
his clients' properties. Petitioners were informed 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 FEMCO to pay the amount of
Php 2,000.00 as rental fee, until the fence shall have been removed.

Two days later, the counsel for FEMCO, wrote a Letter informing the respondent’s
counsel 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 his clients is faked.

To forestall any farther attempt to interfere with its property rights, FEMCO filed on a
Complaint against the respondents before the Regional Trial Court of Lanao del Norte
for aquieting of title and damages. In its Complaint, 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.

Respondents Heirs of Basilio Llanes, denied the material allegation of the Complaint,
alleging that OCT No. 0 1040 is valid and effective; 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.

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The RTC ruled in favor of FEMCO. It declared FEMCO to be entitled to the ownership
and possession of the land in its name particularly that portion of the 16,629 sq. meters
claimed by Heirs of Basilio Llanes and that portion of 947.64 sq. meters claimed by
respondents.

Aggrieved, respondents filed their respective Notices of Appeal. The Court of Appeals
reversed and set aside the RTC’s decision. 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 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. 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. Only the government, through the Solicitor General, can
institute a reversion case.

Hence, the instant Petition.

ISSUE

Whether or not petitioner FEMCO's Complaint for Quieting of Title is a prohibited

collateral attack on a certificate of title.

HELD

No. 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.

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.

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Quieting of Title Case No. 01

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 to remove the cloud besetting its own title.

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Quieting of Title Case No. 01

DOCTRINE

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.

Desiderio Dalisay Investments, Inc. vs. Social Security System, GR. No. 231053 April 4,
2018

J. Velasco Jr.

FACTS

Involved is a parcel of land covered by Transfer Certificate of Title (TCT) Nos. T-18203,
T-18204, T-255986, and T-255985, with an aggregate area of 2,450 sq.m., including the
building erected thereon, situated in Agdao, Davao City.

In 1976, respondent Social Security System (SSS) filed a case before the Social Security
Commission (SSC) against the Dalisay Group of Companies (DGC) for the collection of
unremitted SSS premium contributions of the latter's employees.

In 1977, Desiderio Dalisay, then President of petitioner Desiderio Dalisay Investments,

Inc. (DDII), offered the property appraised at P3,500,000 to SSS for the offsetting of said
amount against DGC's total liability to SSS. The parties, however, failed to arrive at an
agreement as to the appraised value thereof. Thus, no negotiation took place.

After several negotiations, on 1982, thru a Memorandum, SSS accepted such but only in
the amount of P2,000,000 and subject to certain conditions. At that time, DDII's total
liabilities amounted to, approximately, P4,421,321.62. Dalisay-Tirol, then Acting
President and General Manager of Dalisay Investment, informed SSS that the company is
preparing the subject property, especially the building, for its turnover on August 15,
1982. Later, An Affidavit of Consent for the Sale of Real Property was executed by the
surviving heirs, stating that in order to settle the companies' obligations to SSS, they
expressly agree to the sale thereof to the SSS for its partial settlement.

On September 18, 1989, Desiderio Dalisay passed away. As of November 30, 1995, the
company's total obligations allegedly amounted to P15,689,684.93.

Later, or on December 29, 1995, the Philippine National Bank (PNB) executed a Deed of
Confirmatory Sale in favor of DDII for properties that it reacquired, including the
property subject of the present dispute.

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Quieting of Title Case No. 01

On March 20, 1998, Eddie A. Jara (Jara), Assistant Vice-President of the SSS - Davao I
Branch, executed an Affidavit of Adverse Claim over the properties subject of the instant
case because of the companies' failure to turn over the certificates of title to SSS.

On January 18, 2000, DDII issued a Letter to SSS proposing the "offset of SSS obligations
with back rentals on occupied land and building of the obligor." It alleged that SSS is
bound to pay back rentals totaling P34,217,988.1932 for its use of the subject property
from July 1982 up to the present. It likewise demanded for the return of the said
property.

Meanwhile, despite repeated written and verbal demands made by SSS for DDII to
deliver the titles of the subject property, free from all liens and encumbrances, DDII still
failed to comply.

On October 8, 2002, DDII filed a complaint for Quieting of Title, Recovery of Possession
and Damages against SSS with the Regional Trial Court (RTC).

The RTC resolved the case in favor of DDII. The Memorandum is not an acceptance of
DDII's offer for the reason that it contained terms and conditions - a qualified
acceptance which amounts to a counter-offer.

The CA reversed the RTC's ruling. DGC has an outstanding obligation in favor of SSS that
it proposed to pay the amount via dacion en pago, said offer was categorically accepted
by SSS, and the agreement was consummated by DDII's delivery of the property to SSS.

ISSUE

Whether or not the SSS’ claim which allegedly casts a cloud on DDII’s title is valid and
operative.

HELD

Yes, the claim of SSS is valid and operative.

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.

Here, the presence or absence of these two requisites is hinged on the question of
whether or not the proposed dació n en pago was indeed perfected, thereby vesting unto
SSS a legitimate title and interest over the properties in question. In other words, if it
can be proved that the proposed dació n was perfected, or even consummated, then SSS’
claim which allegedly casts a cloud on DDII’s title is valid and operative, and
consequently, the action for quieting of title filed by DDII will not prosper.

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Quieting of Title Case No. 01

The turnover of the properties to SSS was tantamount to delivery or "tradition" which
effectively transferred the real right of ownership over the properties from DDII to SSS.
Even after a review of the records of the case, this Court is unable to find any indication
that when they turned over the properties to SSS, the company reserved its ownership
over the property and only transferred the jus possidendi thereon to SSS. This being the
case, the Court find that SSS has validly and in good faith acquired title to the property
subject of the dispute, making the action to quiet title filed by DDII improper.

Additionally, it is well to emphasize that in order that an action for quieting of title may
prosper, 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.

Here, DDII having divested itself of any claim over the property in favor of SSS by means
of sale via dacion en pago, petitioner has lost its title over the property which would
give it legal personality to file said action.

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Quieting of Title Case No. 01

Doctrine

'It is a basic rule in evidence that the burden of proof lies on the party who makes the
allegations -(the proof lies upon him who affirms, not upon him who denies; since by
nature of things, he who denies a fact cannot produce any proof). If he claims a right
granted by law, he must prove it by competent evidence, relying on the strength of his
own evidence and not upon the weakness of that of his opponent.'

'Affidavits are generally rejected in judicial proceeding as hearsay, unless the affiants
themselves are placed on the witness stand to testify thereon. '

'Under Section 3, Rule 130, Rules of Court, the original document must be produced and
no evidence shall be admissible other than the original document itself. except in the
following cases: xx x a) When the original has been lost or destroyed or cannot be
produced in court, without bad faith on the part of the offer or; b) When the original is
in the custody or under the control of the party against whom the evidence is offered,
and the faller 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.

It is a basic rule that in civil cases, the burden of proof is on the plaintiff to establish his
case by preponderance of evidence.

In Saguid vs. Court of Appeals, wherein respondent therein was allowed to present her
evidence ex-parte, the Supreme Court stressed:

'As in other civil cases, the burden of proof rests upon the party who, as determined by
the pleadings or the nature of the case, asserts an affirmative issue. Contentions must be
proved by competent evidence and reliance must be had on the strength of the party's
own evidence and not upon the weakness of the opponent's defense. This applies
where, as in the instant case, the plaintiff was allowed to present evidence ex parte. The
plaintiff is not automatically entitled to the relief prayed for. The law gives the
defendant some measure of protection as the plaintiff must still prove the allegations in
the complaint. Favorable relief can be granted only after the court is convinced that the
facts proven by the plaintiff warrant such relief. Indeed, the party alleging a fact has the
burden of proving it and a mere allegation is not evidence.'

In order that an action for quieting of title may prosper, 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.

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Quieting of Title Case No. 01

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 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.' 

To repeat, "for an action to quiet title to prosper, two (2) indispensable requisites must
concur, namely: (I) 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." "Legal
title denotes registered ownership, while equitable title means beneficial ownership."

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Quieting of Title Case No. 01

SPOUSES JAIME AND CATHERINE BASA, SPOUSES JUAN AND ERLINDA OGALE
represented by WINSTON OGALE, SPOUSES ROGELIO AND LUCENA LAGASCA
represented by LUCENA LAGASCA, and SPOUSES CRESENCIO AND ELEADORA
APOSTOL, Petitioners vs. ANGELINE LOY VDA. DE SENLY LOY, HEIRS OF ROBERT
CARANTES, THE REGISTER OF DEEDS FOR BAGUIO CITY, and THE CITY ASSESSOR'S
OFFICE OF BAGUIO CITY, Respondents G.R. No. 204131 June 04, 2018

DEL CASTILLO, J.

Facts

This case involves around a 496-square meter residential lot situated in Baguio City in
the name of the late Busa Carantes, who is the predecessor-in-interest of Manuel
Carantes and herein respondent Robert Carantes.

The subject property was m0rtgaged to respondent Angeline Loy and her husband in
1994. Thereafter, they foreclosed on the mortgage, and at the auction sale, they
emerged the highest bidder. On March 31, 2006, after consolidating ownership over the
subject property, RTC issued in their favor a writ of possession.

On May 30, 2006, herein petitioners filed before the RTC a petition for quieting of title
with prayer for injunctive relief and damages, against respondents.

They essentially claimed that in 1992 and 1993, portions of the subject property-
totaling 351 square meters - have already been sold to them by respondent Robert
Carantes, by virtue of deeds of sale executed in their favor, respectively; that they took
possession of the portions sold to them; and that the titles issued in favor of Angeline
Loy created a cloud upon their title and are prejudicial to their claim of ownership. They
thus prayed that the documents, instruments, and proceedings relative to the sale of the
subject property to respondent Angeline Loy be cancelled and annulled, and that they
be awarded damages and declared owners of the respective portions sold to them.

In her answer with counterclaim, Angeline Loy alleged that she was entitled to the
subject property as a result of the foreclosure and consequent award to her as the
highest bidder during the foreclosure sale; that the subject property was later divided
by judicial partition, and new certificates of title were issued in the name of Manuel and
Robert Carantes, which titles were later cancelled and new titles were issued in her
name as co-owner of the subject property together with Manuel Carantes; that she had
no knowledge of the supposed sales to petitioners by Robert Carantes as these
transactions were not annotated on the title of Busa Carantes; and that the sales to the
petitioners were either unnotarized or unconsummated for failure to pay the price in
full.

In his answer, Robert Carantes alleged that the sales to petitioners did not materialize;
that petitioners failed to fully pay the purchase price; that his transactions with

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Quieting of Title Case No. 01

Angeline Loy and her husband were null and void; and that he was the real owner of the
subject property in issue.

Respondents Angeline Loy and Robert Carantes failed to appear during the scheduled
mediation. Petitioners were then allowed to present their evidence ex parte.

Petitioners thereafter filed a Formal Offer of Evidence praying for admission of

documentary evidence.

In 2009, the trial court issued an Order denying admission of Exhibits "A" to "D" on the
ground that Exhibits "A" to "C" were mere photocopies and were only previously
provisionally marked, while there was no such document marked Exhibit "D".

On January 22, 2010, the trial court rendered its Decision, declaring thus: Considering
that the petitioners failed to discharge their burden of proving the truth of their claims
even by preponderance of evidence, the court is left with no recourse but to deny the
reliefs prayed for in their petition. WHEREFORE, all the foregoing premises considered,
the petition is hereby DENIED and the above-entitled case is hereby DISMISSED without
pronouncement as to costs. SO ORDERED.

Petitioners moved to reconsider, but the trial court would not reverse. Petitioners
interposed their appeal before the CA which, in 2012, rendered the assailed Decision
containing the pronouncement below.

WHEREFORE the appealed Decision dated January 22, 2010 and Order dated June 18,
2010 are AFFIRMED. SO ORDERED.

Petitioners filed their motion for reconsideration, which was denied by the CA via its
Resolution. Hence, the instant Petition.

Issue

Whether the petitioners have proved, by preponderant evidence, their case for quieting
of title.

Ruling

The Petition lacks merit.

Petitioners' case for quieting of title was dismissed by the trial court for the reason that
they failed to present the originals of the purported deeds of sale executed by
respondent Robert Carantes in their favor. In other words, short of saying that
petitioners failed to prove the first element in a suit for quieting of title - the existence of
a legal or equitable title - the trial court simply held that they failed to discharge the
burden of proof required in such case. Petitioners then attempted to obtain a reversal
by attaching the supposed originals of the deeds of sale to their motion for
reconsideration, but the trial court did not reconsider as they failed to show that the
reason for their failure to present the original copies of the deeds fell within the
exceptions under the best evidence rule, or Section 3, Rule 130 of the Rules of Court. 

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Quieting of Title Case No. 01

The trial court cannot be faulted for ruling the way it did. By petitioners' failure to
present the original copies of the purported deeds of sale in their favor, the case for
quieting of title did not have a leg to stand on. Petitioners were unable to show their
claimed right or title to the disputed property, which is an essential element in a suit for
quieting of title. Their belated presentation of the supposed originals of the deeds of
sale by attaching the same to their motion for reconsideration does not deserve
consideration as well; the documents hardly qualify as evidence.

The CA correctly found that petitioners' failure to append the original copies of the
deeds of sale was inexcusable; that the document that was appended to their motion for
reconsideration was different from what was presented and marked during the ex-
parte hearing; and that the testimonies of petitioners contradicted the affidavit of
Roberto Carantes, their supposed seller, with regard to the price and lot area of the
subject properties.

Moreover, the unnotarized "Deed of Absolute Sale of a Portion of a Registered Parcel of

a Residential Land" between respondent Robert Carantes and petitioner-spouses Jaime
and Catherine Basa cannot stand without the corroboration or affirmation of Robert
Carantes. On its own, the unnotarized deed is self-serving. Since Robert Carantes's
affidavit - Exhibit "E" - was rendered inadmissible by his failure to appear and testify
thereon, then the supposed unnotarized deed of sale executed by him in favor of the
Basa spouses cannot sufficiently be proved.

Even if petitioners are in possession of the disputed property, this does not necessarily
prove their supposed title. It may be that their possession of the disputed property is by
lease or any other agreement or arrangement with the owner - or simply by mere
tolerance. Without adequately proving their title or right to the disputed portions of the
property, their case for quieting of title simply cannot prosper.

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