SECOND DIVISION
GUARANTEED
HOMES, INC., G.R.
No. 171531
Petitioner,
- versus - Present:
HEIRS
OF MARIA P.
(EMILIA
V. YUMUL and
V. MOLINO), HEIRS OF SEVERINA
P. TUGADE (ILUMINADA
and CARPIO MORALES,
LEONORA
P. TUGADE, HEIRS OF TINGA, and
ETANG P.
GATMIN (LUDIVINA BRION, JJ.
G.
DELA CRUZ (by
and through
ALFONSO
G. DELA CRUZ), HILARIA
G.
COBERO and ALFREDO G. COBERO) Promulgated:
and
SIONY G. TEPOL (by and through
ELENA
T. RIVAS and ELESIO TEPOL,
JR.),
AS HEIRS OF DECEDENT PABLO January 30, 2009
PASCUA,
Respondents.
x ------------------------------------------------------------------------------------------------- x
D E C I S I O N
Tinga, J.:
This
is a petition for review[1]
under Rule 45 of the Rules of Court of the Court of Appeals’ Decision dated
The factual antecedents are as
follows:
Respondents, who are the descendants
of Pablo Pascua (Pablo), filed a complaint seeking reconveyance of a parcel of
land with an area of 23.7229 hectares situated in Cabitaugan, Subic, Zambales
and covered by Original Certificate of Title (OCT) No. 404 in the name of
Pablo.[5] In the alternative, the respondents prayed
that damages be awarded in their favor.[6]
OCT No. 404[7]
was attached as one of the annexes of respondents’ complaint. It contained several
annotations in the memorandum of encumbrances which showed that the property
had already been sold by Pablo during his lifetime to Alejandria Marquinez and
Restituto Morales. Respondents also attached copies of the following documents as
integral parts of their complaint: Transfer Certificate of Title (TCT) No.
T-8241,[8] TCT
No. T-8242,[9] TCT No. T-10863,[10]
the Extrajudicial Settlement of a Sole Heir and Confirmation of Sales[11]
executed by Cipriano Pascua, Sr. (Cipriano), and the Deed of Sale with Mortgage[12] between
spouses Albino Rodolfo and Fabia Rodolfo (spouses Rodolfo) and petitioner.
In their complaint,[13]
respondents alleged that Pablo died intestate sometime in June 1945 and was
survived by his four children, one of whom was the deceased Cipriano.[14] On
Respondents likewise averred that on
the following day
It
was further averred in the complaint that Jorge Pascua, Sr., son of Cipriano,
filed on 24 January 1997 a petition before the RTC of Olongapo City, Branch 75,
for the issuance of a new owner’s duplicate of OCT No. 404, docketed as Other
Case No. 04-0-97.[21] The
RTC denied the petition.[22]
The trial court held that petitioner was already the owner of the land, noting
that the failure to annotate the subsequent transfer of the property to it at
the back of OCT No. 404 did not affect its title to the property.
Petitioner filed a motion to dismiss[23] the
complaint on the grounds that the action is barred by the Statute of
Limitations, more than 28 years having elapsed from the issuance of TCT No.
T-10863 up to the filing of the complaint, and that the complaint states no
cause of action as it is an innocent purchaser for value, it having relied on
the clean title of the spouses Rodolfo.
Impleaded as defendants, the heirs of
Cipriano filed an answer to the complaint in which they denied knowledge of the
existence of the extrajudicial settlement allegedly executed by Cipriano and
averred that the latter, during his lifetime, did not execute any document
transferring ownership of the property.[24]
The Register of Deeds and the
National Treasurer filed, through the Office of the Solicitor General, an
answer averring that the six (6)-year period fixed in Section 102 of
Presidential Decree (P.D.) No. 1529 for the filing of an action against the Assurance
Fund had long prescribed since the transfer of ownership over the property was
registered through the issuance of TCT No. T-10863 in favor of petitioner as
early as 1969. They also claimed that respondents have no cause of action against
the Assurance Fund since they were not actually deprived of ownership over the property,
as they could have recovered the property had it not been for their inaction for
over 28 years.[25]
The RTC granted petitioner’s motion to dismiss.[26]
Noting that respondents had never claimed nor established that they have been in
possession of the property and that they did not present any evidence to show
that petitioner has not been in possession of the property either, the RTC
applied the doctrine that an action to quiet title prescribes where the plaintiff is not in possession of the
property.
The
trial court found that the complaint per its allegations presented a case of
implied or constructive trust on the part of Cipriano who had inaccurately
claimed to be the sole heir of Pablo in the deed of extrajudicial settlement of
estate which led to the issuance of TCT No. T- 8241 in his favor. As the
prescriptive period for reconveyance of a fraudulently registered real property
is ten (10) years reckoned from the date of the issuance of the title, the trial
court held that the action for reconveyance had already prescribed with the
lapse of more than 28 years from the issuance of TCT No. T-10863 on
The RTC added that it is an enshrined rule that even a
registered owner of property may be barred from recovering possession of
property by virtue of laches.
The RTC further held that petitioner had the right to rely
on TCT No. T- 8242 in the name of spouses Rodolfo. Petitioner is not obliged to
go beyond the title considering that there were no circumstances surrounding
the sale sufficient to put it into inquiry.
Concerning the Assurance Fund, the RTC held that the claim
against it had long prescribed since Section 102 of P.D. No. 1529 provides for
a six-year period within which a plaintiff may file an action against the fund and
in this case the period should be counted from the time of the issuance of the
challenged TCT No. T-10863 on
Undaunted,
respondents appealed to the Court of Appeals.[27]
The
Court of Appeals reversed the RTC’s order.[28] In
ordering the reinstatement of the complaint, the appellate court ruled that the
averments in respondents’ complaint before the RTC make out a case for quieting
of title which has not prescribed. Respondents did not have to prove possession
over the property since petitioner as the movant in a motion to dismiss hypothetically
admitted the truth of the allegations in the complaint. The appellate court
found that possession over the property was sufficiently alleged in the
complaint which stated that “neither petitioner nor the Rodolfo spouses ever
had possession of the disputed property” as “a number of the Pascua heirs
either had been (still are) in actual, continuous and adverse possession
thereof or had been enjoying (still are enjoying) the use thereof.”[29] By
the same token, laches had not set in, the Court of Appeals added.
The
appellate court further held that the ruling of the RTC that petitioner is an
innocent purchaser for value is contrary to the allegations in respondents’
complaint.
Hence,
the present petition for review.
The
sole issue before this Court revolves around the propriety of the RTC’s granting
of the motion to dismiss and conversely the tenability of the Court of Appeals’
reversal of the RTC’s ruling.
The
petition is meritorious.
It is well-settled that to sustain a
dismissal on the ground that the complaint states no cause of action, the
insufficiency of the cause of action must appear on the face of the complaint,
and the test of the sufficiency of the facts alleged in the complaint to
constitute a cause of action is whether or not, admitting the facts alleged,
the court could render a valid judgment upon the same in accordance with the
prayer of the complaint.
For the purpose,
the motion to dismiss must hypothetically admit the truth of the
facts alleged in the complaint.[30]
The admission, however, is
limited only to all material and relevant facts which are well pleaded in the
complaint.[31]
The
factual allegations in respondents’ complaint should be considered in tandem
with the statements and inscriptions on the documents attached to it as annexes
or integral parts. In a number of cases, the Court held that in addition to the
complaint, other pleadings submitted by the parties should be considered in
deciding whether or not the complaint should be dismissed for lack of cause of
action.[32] Likewise, other facts not alleged in the
complaint may be considered where the motion to dismiss was heard with the
submission of evidence, or if documentary evidence admitted by stipulation
discloses facts sufficient to defeat the claim.[33]
For while the court must accept as true all well pleaded facts in the complaint,
the motion does not admit allegations of which the court will take judicial
notice are not true, nor does the rule apply to legally impossible facts, nor
to facts inadmissible in evidence, nor to facts which appear by record or
document included in the pleadings to be unfounded.[34]
In
the case at bar, the trial court conducted a hearing on the motion to dismiss.
At the hearing, the parties presented documentary evidence. Among the documents
marked and offered in evidence are the annexes of the complaint.[35]
Based
on the standards set by this Court in relation to the factual allegations and
documentary annexes of the complaint as well as the exhibits offered at the
hearing of the motion to dismiss, the inescapable conclusion is that
respondents’ complaint does not state a cause of action against petitioner.
Firstly, the complaint does not allege
any defect with TCT No. T-8242 in the name of the spouses Rodolfo, who were petitioner’s
predecessors-in-interest, or any circumstance from which it could reasonably be
inferred that petitioner had any actual knowledge of facts that would impel it
to make further inquiry into the title of the spouses Rodolfo.[36] It
is basic that a person dealing with registered property need not go beyond, but
only has to rely on, the title of his predecessor-in-interest. Since "the
act of registration is the operative
act to convey
or affect the land insofar as third persons are concerned,” it follows that
where there is nothing in the certificate of title to indicate any cloud or
vice in the ownership of the property, or any encumbrance thereon, the
purchaser is not required to explore farther than what the Torrens title upon
its face indicates in quest for any hidden defect or inchoate right that may
subsequently defeat his right thereto. If the rule were otherwise, the efficacy
and conclusiveness of the certificate of title which the
Contrary to the assertion of
respondents, OCT No. 404 was expressly cancelled by TCT No. T-8241. The alleged
non-signature by the Register of Deeds Soliman Achacoso, , does not affect the
validity of TCT No. T-8241 since he signed TCT No. T- 8242 and issued both
titles on the same day. There is a presumption of regularity in the performance
of official duty. The presumption is further bolstered by the fact that TCT No.
T-8241 was certified to be on file with the Registry of Deeds and registered in
the name of Cipriano. It is enough that petitioner had examined the latest
certificate of title which in this case was issued in the name of the immediate
transferor, the spouses Rodolfo. The purchaser is not bound by the original
certificate but only by the certificate of title of the person from whom he had
purchased the property.[38]
Secondly, while the Extrajudicial
Settlement of a Sole Heir and Confirmation of Sales executed by Cipriano alone despite
the existence of the other heirs of Pablo, is not binding on such other heirs, nevertheless,
it has operative effect under Section 44 of the Property Registration Decree,
which provides that:
SEC. 44. Statutory Liens Affecting Title. — Every registered owner receiving a certificate of title in pursuance of a decree of registration, and every subsequent purchaser of registered land taking a certificate of title for value and in good faith, shall hold the same free from all encumbrances except those noted on said certificate and any of the following encumbrances which may be subsisting, namely:
x x x x
Even assuming arguendo that the
extrajudicial settlement was a forgery, the Court still has to uphold the title
of petitioner. The case law is that although generally a forged or fraudulent
deed is a nullity and conveys no title, there are instances when such a
fraudulent document may become the root of a valid title.[39] And
one such instance is where the certificate of title was already transferred
from the name of the true owner to the forger, and while it remained that way,
the land was subsequently sold to an innocent purchaser. For then, the vendee
had the right to rely upon what appeared in the certificate.[40]
The Court cannot give credence to
respondents’ claims that the Extrajudicial Settlement of a Sole Heir and
Confirmation of Sales was not registered and that OCT No. 404 was not cancelled
by the Register of Deeds. The Register of Deeds of Zambales certified that the
extrajudicial settlement was recorded on
Sec. 56. Each register of deeds shall keep an entry book in which he shall enter in the order of their reception all deeds and other voluntary instruments, and all copies of writs and other process filed with him relating to registered land. He shall note in such book the year, month, day, hour, and minute of reception of all instruments, in the order in which they are received. They shall be regarded as registered from the time so noted, and the memorandum of each instrument when made on the certificate of title to which it refers shall bear the same date. [Emphasis supplied]
Registration in the public registry
is notice to the whole world. Every conveyance, mortgage, lease, lien,
attachment, order, judgment, instrument or entry affecting registered land
shall be, if registered, filed or entered in the Office of the Register of
Deeds of the province or city where the land to which it relates lies, be
constructive notice to all persons from the time of such registering, filing or
entering.[42]
Thirdly, respondents cannot make out
a case for quieting of title since OCT No. 404 had already been cancelled. Respondents
have no title to anchor their complaint on.[43] Title
to real property refers to that upon which ownership is based. It is the
evidence of the right of the owner or the extent of his interest, by which
means he can maintain control and, as a rule, assert right to exclusive
possession and enjoyment of the property.[44]
Moreover, there is nothing in the
complaint which specified that the respondents were in possession of the
property. They merely alleged that the occupants or possessors are “others not
defendant Spouses Rodolfo”[45]
who could be anybody, and that the property is in actual possession of “a
number of the Pascua heirs”[46]
who could either be the respondents or the heirs of Cipriano. The admission of
the truth of material and relevant facts well pleaded does not extend to render
a demurrer an admission of inferences or conclusions drawn therefrom, even if alleged
in the pleading; nor mere inferences or conclusions from
facts not stated;
nor conclusions of law;
nor matters of evidence; nor
surplusage and irrelevant matters.[47]
The other heirs of Pablo should have
filed an action for reconveyance based on implied or constructive trust within
ten (10) years from the date of registration of the deed or the date of the
issuance of the certificate of title over the property.[48] The legal relationship between Cipriano and
the other heirs of Pablo is governed by Article 1456 of the Civil Code which provides
that if a property is acquired through mistake or fraud, the person obtaining
it is, by force of law, considered a trustee of an implied trust for the
benefit of the person from whom the property comes.
From
the above discussion, there is no question that petitioner is an innocent
purchaser for value; hence, no cause of action for cancellation of title will
lie against it.[49] The RTC
was correct in granting petitioner’s motion to dismiss.
Lastly, respondents’ claim against
the Assurance Fund also cannot prosper. Section 101 of P.D. No. 1529 clearly
provides that the Assurance Fund shall not be liable for any loss, damage or deprivation
of any right or interest in land which may have been caused by a breach of
trust, whether express, implied or constructive. Even assuming arguendo
that they are entitled to claim against the Assurance Fund, the respondents’ claim
has already prescribed since any action for compensation against the Assurance
Fund must be brought within a period of six (6) years from the time the right
to bring such action first occurred, which in this case was in 1967.
WHEREFORE, the petition is GRANTED. The
decision of the Court of Appeals in CA-G.R. CV No. 67462 is REVERSED and
SET ASIDE. The
SO ORDERED.
DANTE O. TINGA Associate Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Acting Chief Justice
Chairperson
RENATO C. CORONA CONCHITA
CARPIO MORALES
Associate Justice Associate
Justice
ARTURO D. BRION
Associate Justice
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII
of the Constitution, it is hereby certified that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
LEONARDO A.
QUISUMBING
Acting Chief Justice
[2]
WHEREFORE, the appealed order of
the
SO ORDERED.
[4]
WHEREFORE, viewed from the foregoing considerations, the Motion to Dismiss filed by defendant Guaranteed Homes, Inc. is hereby GRANTED. Consequently, this case is hereby DISMISSED.
SO ORDERED.
[5]
[6]
[7]Records, pp. 21-22.
[9]
[10]
[11]
[12]
[13]
[15]Supra note 11.
[18]
[21]
[22]
[23]
[25]
[28]Supra note 2.
[30]Azur
v. Provincial Board, No. L-22333,
[31]Alzua and Arnalot v. Johnson, 21 Phil. 308, 349-350 (1912).
[36]
[38]Co v. Court of Appeals, G.R. No. 93687, 6 May 1991, 196 SCRA 705, 713 citing Lim v. Court of Appeals, 182 SCRA 564 (1990); Hernandez v. Katigbak Vda. de Salas, 69 Phil. 744 (1940).
[40]Inquimboy
v. Vda. de Cruz, G.R. No. L-13953,
[41]The Land Registration Act. A similar provision is now found in Section 56 of P.D. No. 1529, which reads:
Sec. 56. Primary Entry Book; Fees; Certified Copies. – Each Register of Deeds shall keep a primary entry book in which, upon payment of the entry fee, he shall enter, in the order of their reception, all instruments including copies of writs and processes filed with him relating to registered land. He shall, as a preliminary process in registration, note in such book the date, hour and minute of reception of all instruments, in the order in which they were received. They shall be regarded as registered from the time so noted, and the memorandum of each instrument, when made on the certificate of title to which it refers, shall bear the same date: Provided, that the national government as well as the provincial and city governments shall be exempt from the payment of such fees in advance in order to be entitled to entry and registration.
Every deed or other instrument, whether voluntary or involuntary, so filed with the Register of Deeds shall be numbered and indexed and endorsed with a reference to the proper certificate of title. All records and papers relative to registered land in the office of the Register of Deeds shall be open to the public in the same manner as court records, subject to such reasonable regulations as the Register of Deeds, under the direction of the Commissioner of Land Registration, may prescribe.
All deeds and voluntary instruments shall be presented with their respective copies and shall be attested and sealed by the Register of Deeds, endorsed with the file number, and copies may be delivered to the person presenting them.
Certified copies of all instruments filed and registered may also be obtained from the Register of Deeds upon payment of the prescribed fees. [Emphasis supplied]
[43]Civil Code. Art. 477. The plaintiff must
have legal or equitable title to, or interest in the real property which is
the subject-matter of the action. He need not be in possession of said
property. [Emphasis supplied] See Evangelista, et al. v.
[48]Vda
de Portugal v. Intermediate Appellate Court, No.