Philippine Supreme Court Jurisprudence

Assailed in this petition for review on certiorari¹ are the Decision² dated February 24, 2016 and the Resolution³ dated August 10, 2016 of the Court of Appeals (CA) in CA-G.R. SP No. 06720, which upheld the Resolution⁴ dated May 28, 2014 and the Order⁵ dated December 3, 2014 of the Regional Trial Court of Liloy, Zamboanga del Norte, Branch 28 (RTC) in Civil Case No. L-298, denying the Motion to Hear and Resolve Affirmative Defenses filed by petitioners Heirs of Victor Amistoso, namely: Venezuela A. Dela Cruz, Flora A. Tulio, Wilfredo D. Amistoso, Rufino D. Amistoso, Vicente D. Amistoso, Maximo D. Amistoso, and Zenaida D. Amistoso (petitioners) for their failure to substantiate their affirmative defenses of res judicata, prescription, and laches.

The Facts

Sometime in March 1996, respondent Elmer T. Vallecer (respondent), through his brother Dr. Jose Benjy T. Vallecer (Benjy), filed a Complaint⁶ for recovery of possession and damages against petitioners, docketed as Civil Case No. S-606,⁷ involving a 2,265-square meter parcel of land, located in Labason, Zamboanga del Norte, described as Lot C-7-A and covered by Transfer Certificate of Title No. T-44214⁸ (TCT T-44214) and Tax Declaration No. 93-7329⁹ under respondent's name. He claimed that he purchased the property sometime in June 1990 after confirming with the Department of Agrarian Reform (DAR) that the property was not tenanted. When he started making preparations for the construction of a commercial building on the property, petitioners, with the aid of their workers, agents, representatives, and/or employees, stopped or barred him by force, threats, and intimidation. Despite repeated demands¹⁰ and explanations made by the Municipal Agrarian Reform Officer (MARO)¹¹ of the DAR during a pre� litigation conference that no landlord-tenancy relationship ever existed between them as regards the property, petitioners continued to refuse him from entering and enjoying possession of his property.¹² Thus, he prayed for the court to, among others, order petitioners, with their representatives, agents, employees, and assigns, to vacate the property and pay damages.¹³

In their defense,¹⁴ petitioners claimed that they have been in actual, peaceful, and continuous possession of the land as evidenced by Certificate of Land Transfer No. 0-002623¹⁵ (CLT) issued in November 1978 to their predecessor-in-interest Victor Amistoso (Victor) by virtue of Presidential Decree No. 27.¹⁶

On January 8, 2001, the RTC declared respondent as the absolute owner of the subject property under his name.¹⁷ On appeal, the CA rendered a Decision¹⁸ dated October 17, 2003 in CA-G.R. CV No. 70128 (October 17, 2003 CA Decision) reversing the RTC ruling. It found that Benjy failed to show proof of his capacity to sue on respondent's behalf and that the CLT issued by the DAR acknowledges petitioners as "deemed owner" of the land after full payment of its value. Having proven full compliance for the grant of title, petitioners have a right to the land which must be respected.¹⁹ This CA Decision became final and executory on November 4, 2003,²⁰ and consequently, a Writ of Execution²¹ was issued on May 9, 2005.

Thereafter, or on July 18, 2012, respondent filed a Complaint²² for quieting of title, ownership, possession, and damages with preliminary injunction against petitioners, docketed as Civil Case No. L-298, subject of the present case. Asserting ownership over the property under TCT No. T-44214 and tax declarations, and citing petitioners' unlawful possession and occupation thereof despite repeated demands to vacate, respondent claimed that: petitioners' CLT does not contain the technical description of the property which it purportedly covers; the tenancy relationship from which petitioners anchor their possession pertains to the portion of the adjacent land that belongs to Maria Kho Young with whom they admittedly have the tenancy relationship; and the October 17, 2003 CA Decision involving Civil Case No. S-606, annotated on his TCT No. T-44214, constitutes a cloud on his title.²³ Thus, respondent prayed for the court to: restrain and prohibit petitioners from continuing to usurp his real rights on the property as owner thereof; prevent or prohibit them from dealing and negotiating the property with any person for any purpose; prohibit or prevent them from obstructing and preventing the free passage, possession, use, and appropriation of the property and its fruits; declare him as the absolute owner of the property; and order petitioners to vacate the property and remove all structures and improvements introduced thereon at their expense.²⁴

Petitioners, for their part, filed an Answer with Counterclaim and Affirmative Defenses²⁵ invoking res judicata, prescription and laches. In support thereof, they pointed out that the October 17, 2003 CA Decision stemming from Civil Case No. S-606 had already become immutable. Likewise, they moved to hear and resolve the affirmative defense.²⁶

The RTC Ruling

In a Resolution²⁷ dated May 28, 2014, the RTC denied petitioners' Motion to Hear and Resolve Affirmative Defenses for lack of merit, declaring that the principle of res judicata would not apply in view of the lack of identity of causes of action. It held that in contrast to Civil Case No. S-606, which involves recovery of possession, Civil Case No. L-298 is essentially one for declaration of ownership. It also ruled that since the land is covered by a Torrens title, it can no longer be acquired by prescription or be lost by laches.²⁸

Aggrieved, petitioners moved for reconsideration²⁹ which the RTC denied in an Order³⁰ dated December 3, 2014. Undaunted, they elevated the case before the CA via a petition for certiorari,³¹ arguing that Civil Case No. L-298 for quieting of title is barred by res judicata, and that respondent lacked cause of action.³²

The CA Ruling

In a Decision³³ dated February 24, 2016, the CA affirmed the RTC ruling. It held that the RTC did not gravely abuse its discretion in holding that Civil Case No. L-298 is not barred by res judicata, considering that Civil Case No. S-606 filed by respondent is anchored on his right to possess the real property as the registered owner; while Civil Case No. L-298 was filed in order to clear his title over the land and remove all adverse claims against it.³⁴

Dissatisfied, petitioners moved for reconsideration,³⁵ additionally arguing that the RTC lacked jurisdiction to cancel their CLT. The CA denied petitioners' motion in a Resolution³⁶ dated August 10, 2016; hence, this petition.

The Issues Before the Court

The essential issue for the Court's resolution is whether or not Civil Case No. L-298 is barred by res judicata.

The Court's Ruling

The petition lacks merit.

Preliminarily, petitioners insist, albeit belatedly, that the RTC had no jurisdiction over the complaint in Civil Case No. L-298, considering that what is sought to be cancelled is their CLT; hence, an agrarian dispute falling within the jurisdiction of the DARAB.³⁷

The argument is specious.

In order to classify a matter as an agrarian dispute which falls under the jurisdiction of the DARAB, it must be first shown that a tenancy relationship exists between the parties. For such relationship to be proven, it is essential to establish all its indispensable elements, namely: (a) that the parties are the landowner and the tenant or agricultural lessee; (b) that the subject matter of the relationship is an agricultural land; (c) that there is consent between the parties to the relationship; (d) that the purpose of the relationship is to bring about agricultural production; (e) that there is personal cultivation on the part of the tenant or agricultural lessee; and (f) that the harvest is shared between the landowner and the tenant or agricultural lessee.³⁸

Moreover, it is well-settled that the jurisdiction of the court over the subject matter of the action is determined by the material allegations of the complaint and the law at the time the action was commenced, irrespective of whether or not the plaintiff is entitled to recover all or some of the claims or reliefs sought therein and regardless of the defenses set up in the court or upon a motion to dismiss by the defendant.³⁹

In this case, a reading of the material allegations of respondent's complaint in Civil Case No. L-298 and even petitioners' admissions readily reveals that there is neither a tenancy relationship between petitioners and respondent, nor had petitioners been the tenant of respondent's predecessors� in-interest. In fact, respondent did not even question the validity of petitioners' CLT nor sought for its cancellation. Rather, what respondent sought was for a declaration that the property covered by his Torrens title is different from the property covered by petitioners' CLT in order to quiet his title and remove all adverse claims against it. Clearly, this is not an agrarian dispute that falls within the DARAB's jurisdiction.

Proceeding to the main issue, petitioners contend that Civil Case No. S-606 and Civil Case No. L-298 were founded on the same facts, allegations, and arguments, and sought the same relief, i.e., to cancel their CLT. Considering that the October 17, 2003 CA Decision stemming from Civil Case No. S-606 had already attained finality, the same constitutes res judicata to Civil Case No. L-298.⁴⁰

The Court disagrees.

"Res judicata literally means 'a matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by judgment."' It also refers to the "rule that an existing final judgment or decree rendered on the merits, and without fraud or collusion, by a court of competent jurisdiction, upon any matter within its jurisdiction, is conclusive of the rights of the parties or their privies, in all other actions or suits in the same or any other judicial tribunal of concurrent jurisdiction on the points and matters in issue in the first suit."⁴¹

For res judicata to absolutely bar a subsequent action, the following requisites must concur: (a) the former judgment or order must be final; (b) the judgment or order must be on the merits; (c) it must have been rendered by a court having jurisdiction over the subject matter and parties; and (d) there must be between the first and second actions, identity of parties, of subject matter, and of causes of action.⁴²

In this case, the Court finds that Civil Case No. S-606 did not bar the filing of Civil Case No. L-298 on the ground of res judicata as the causes of action in the two cases are not the same.

In particular, in Civil Case No. S-606, respondent alleged that he purchased the property after confirming with the DAR that it was not tenanted; that petitioners, with their workers and/or representatives, stopped or barred him by force, threats, and intimidation from entering and occupying the property; and that despite repeated demands⁴³ and explanations made by the MARO⁴⁴ that no landlord-tenant relationship ever existed between them as regards the property, petitioners continued to prohibit him from entering and enjoying possession of his property. He thus prayed for the court to order petitioners, with their representatives, et al., to vacate the property and pay damages.⁴⁵

At this point, it is apt to clarify that the CA erroneously classified Civil Case No. S-606 as an accion reivindicatoria, or a suit which has for its object the recovery of possession of real property as owner and that it involves recovery of ownership and possession based on the said ownership.⁴⁶ As plaintiff in Civil Case No. S-606, respondent never asked that he be declared the owner of the land in question, but only prayed that he be allowed to recover possession thereof from petitioners. As such, Civil Case No. S-606 should have instead, been properly classified as an accion publiciana, or a plenary action to recover the right of possession of land.⁴⁷ Hence, while petitioners were acknowledged by the DAR as "deemed owners" of the land in Civil Case No. S-606, such declaration was merely provisional as it was only for the purpose of determining possession. In Gabriel, Jr. v. Crisologo,⁴⁸ the Court thoroughly discussed the nature and purpose of an accion publiciana:

Also known as accion plenaria de posesion, accion publiciana is an ordinary civil proceeding to determine the better right of possession of realty independently of title. It refers to an ejectment suit filed after the expiration of one year from the accrual of the cause of action or from the unlawful withholding of possession of the realty.

The objective of the plaintiffs in accion publiciana is to recover possession only, not ownership. When parties, however, raise the issue of ownership, the court may pass upon the issue to determine who between the parties has the right to possess the property. This adjudication, nonetheless, is not a final and binding determination of the issue of ownership; it is only for the purpose of resolving the issue of possession, where the issue of ownership is inseparably linked to the issue of possession. The adjudication of the issue of ownership, being provisional, is not a bar to an action between the same parties involving title to the property. The adjudication, in short, is not conclusive on the issue of ownership.⁴⁹ (Emphases and underscoring supplied)

On the other hand, in Civil Case No. L-298, respondent asserted his ownership over the property by virtue of his Torrens title, and alleged that petitioners' tenancy relationship actually pertains to the portion of the adjacent land that belongs to Maria Kho Young with whom petitioners admittedly have the tenancy relationship. Respondent also claimed that petitioners' CLT does not contain the technical description of the property which it purportedly covers and therefore does not show that their alleged tenancy right falls on his property.⁵⁰ Thus, the October 17, 2003 CA Decision stemming from Civil Case No. S-606 and petitioners' unlawful possession and claim of ownership constitute a cloud on his title over the property. Accordingly, respondent prayed for the court to declare him as the absolute owner of the property, and restrain and prohibit petitioners from performing and/or continuing to perform act/s that affect his possession and enjoyment thereof as owner.⁵¹

Clearly, the complaint in Civil Case No. L-298 is, as indicated herein, one for quieting of title pursuant to Article 476⁵² of the Civil Code. In Green Acres Holdings, Inc. v. Cabral,⁵³ the Court discussed:

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.

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.⁵⁴ (Emphasis and underscoring supplied)

Based on the foregoing, it is clear that the causes of action in Civil Case Nos. S-606 and L-298 are different from each other. And thus, the ruling in the former would not operate as res judicata on the latter.

Moreover, it should be pointed out that petitioners' attack on the validity of respondent's Torrens title in Civil Case No. S-606 by claiming that their father Victor became the owner of the subject property by virtue of the CLT issued to him in 1978 constitutes a collateral attack on said title. It is an attack incidental to their quest to defend their possession of the property in an accion publiciana, not in a direct action aimed at impugning the validity of the judgment granting the title.⁵⁵ Time and again, it has been held that a certificate of title shall not be subject to a collateral attack and that the issue of the validity of title can only be assailed in an action expressly instituted for such purpose.⁵⁶ Hence, any declaration the CA may have made in its October 17, 2003 Decision stemming from Civil Case No. S-606 cannot affect respondent's ownership over the property nor nullify his Torrens title, as the adjudication was only for the purpose of resolving the issue of possession.

All told, the October 17, 2003 CA Decision involving Civil Case No. S-606 did not bar the filing of Civil Case No. L-298 that seeks to determine the issue of the property's ownership, clear respondent's title over the property, and remove all adverse claims against it.

WHEREFORE, the petition is DENIED. The Decision dated February 24, 2016 and the Resolution dated August 10, 2016 of the Court of Appeals in CA-G.R. SP No. 06720 are hereby AFFIRMED.

SO ORDERED.

Carpio (Chairperson), Peralta, Caguioa, and Reyes, Jr., JJ., concur.

Endnotes:

¹Rollo, pp. 10-19.

² Id. at 134-139. Penned by Associate Justice Edgardo T. Lloren with Associate Justices Rafael Antonio M. Santos and Ruben Reynaldo G. Roxas concurring.

³ Id. at 153-154.

⁴ Id. at 126-127. Penned by Judge Oscar D. Tomarong.

⁵ Id. at 128.

⁶ See Complaint (With Prayer tor Issuance of Preliminary Prohibitive Injunction and Temporary Restraining Order) dated March 1, 1996; id. at 36-42.

⁷ The Complaint was filed before the RTC of Sindangan, Zamboanga del Norte, Branch 11. See id. at 36.

⁸ Id. at 43, including dorsal portion.

⁹ Id. at 44, including dorsal portion.

¹⁰ See id. at 49-57.

¹¹ See DAR MARO Resolution dated October 10, 1995; id. at 45-48.

¹² See id. at 37-40 and 95.

¹³ See id. at 40-41.

¹⁴ See Answer with Affirmative Defenses And Motion to Dismiss dated April 8, 1996; id. at 58-61.

¹⁵ Id. at 62.

¹⁶ Entitled "DECREEING THE EMANCIPATION OF TENANTS FROM THE BONDAGE OF THE SOIL, TRANSFERRING TO THEM THE OWNERSHIP OF THE LAND THEY TILL AND PROVIDING THE INSTRUMENTS AND MECHANISM THEREFOR" dated October 21, 1972.

¹⁷ See RTC Decision dated January 8, 2001 in Civil Case No. S-606 penned by Judge Wilfredo G. Ochotorena; rollo, pp. 64-93.

¹⁸ Id. at 94-98. Penned by Associate Justice Eubulo G. Verzola with Associate Justices Remedios Salazar-Fernando and Edgardo F. Sundiam concurring.

¹⁹ See id. at 96-97.

²⁰ See Entry of Judgment; id. at 99.

²¹ Id. at 100-101. See also Receipt of Possession dated May 27, 2005; id. at 102.

²² Id. at 103-110.

²³ See id. at 105-108.

²⁴ See id. at 109-110.

²⁵ Dated August 15, 2012. Id. at 111-115.

²⁶ See Motion to Hear and Resolve Affirmative Defenses dated December 3, 2012; id. at 117-121.

²⁷ Id. at 126-127.

²⁸ See id. at 126.

²⁹ See motion for reconsideration dated June 17, 2014; id. at 129-131 (pages are misarranged).

³⁰ Id. at 128.

³¹ Dated March 18, 2015. Id. at 22-33.

³² See id. at 27-32.

³³ Id. at 134-l39.

³⁴ See id. at 137-139.

³⁵ See motion for reconsideration dated March 11, 2016; id. at 140-143.

³⁶ Id. at 153-154.

³⁷ See id. at 15-16.

³⁸Bumagat v. Arribay, 135 Phil. 595, 607 (2014), citing Spouses Atuel v. Spouses Valdez, 451 Phil. 631, 643 (2003).

³⁹ See Laresma v. Abellana, 484 Phil. 766, 777 (2004).

⁴⁰ See rollo, pp. 17-18.

⁴¹Republic of the Philippines (Civil Aeronautics Administration (CAA) v. Yu, 519 Phil. 391, 395-396 (2006). See also Degayo v. Magbanua-Dinglasan, 757 Phil. 376, 382 (2015); Rivera v. Heirs of Romualdo Villanueva, 528 Phil. 570, 576 (2006); and Gutierrez v. CA, 271 Phil. 463, 465 (1991 ), citing Black's Law Dictionary, p. 1470 (Rev. 4th ed., 1968).

⁴²Dy v. Yu, 763 Phil. 491, 509 (2015); citation omitted. See also Republic of the Philippines (Civil Aeronautics Administration (CAA) v. Yu, id. at 396; and Gutierrez v. CA, id. at 467.

⁴³ See rollo, pp. 49-57.

⁴⁴ See DAR MARO Resolution dated October 10, 1995 (id. at 45-48), declaring that: "[t]his Office believes that Mr. Victor B. Amistoso expanded his occupation, possession and cultivation as a tenant over the lot of his landlord Maria Kho Yang and by the act of tolerance exceeded and/or intrudes up to the lot owned by Roman Bantilan. Clearly, Amistoso's possessory right over Lot No. B is valid by virtue of an existing tenancy relationship while on the other Lot No. C-7 is mere tolerance and does not affect ownership for there is no valid and binding tenancy relationship thereof. x x x."

⁴⁵ See id. at 40-41.

⁴⁶ See Hilario v. Salvador, 497 Phil. 327, 335 (2005).

⁴⁷ See id.

⁴⁸ 735 Phil. 673 (2014).

⁴⁹ Id. at 683, citing Urieta Vda. De Aguilar v. Spouses Alfaro, 631 Phil. 131, 141-142 (2010).

⁵⁰ See rollo, pp. 105-108.

⁵¹ See id. at 109-110.

⁵² Article 476 of the Civil Code reads:

Article 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.

⁵³ 710 Phil. 235 (2013).

⁵⁴ Id. at 256-257; citations omitted.

⁵⁵ See Urieta Vda. De Aguilar v. Spouses Alfaro, supra note 49, at 144.

⁵⁶ See Wee v. Mardo, 735 Phil. 420, 430-431 (2014); citations omitted. See also Section 48 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, which reads:

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