850 Phil. 591
CAGUIOA, J:
[Petitioner FEMCO] is a manufacturer of "eslon pipes and accessories." Its manufacturing plant is located within a 50,528 square-meter land, known as Lot B-2, covered by Transfer Certificate of Title No. (TCT) T-17460 (a.f.), which is situated in Barrio Sta. Felomina, Iligan City.
On February 2, 1994, Atty. Alfredo Busico, counsel for [respondents] Heirs of Basilio Llanes, wrote a Letter to the management of [petitioner] FEMCO informing them that its plant site may have encroached into his clients' properties, known as Lot 1911-B-4, Lot 191 l-B-3, and Lot 1911-J, covered by TCT No. T-29,635 (a.f.), TCT No. T-31,994 (a.f.) and TCT No. T-21573 (a.f.), respectively.
In a Letter dated 16 February 1994, Atty. Gerardo Padilla, counsel for [petitioner] FEMCO, replied that his client's property is covered by a valid certificate of title - TCT No. T-17460 (a.f.)- He also informed Atty. Busico that upon his inquiry with the Register of Deeds of Iligan City, he discovered that:Atty. Padilla concluded that OCT No. 0-1040 (a.f.) which is registered in the name of Basilio Llanes is spurious.
1) Lot 1911 is titled in the name of one Basilio Llanes. His title thereto is evidenced by OCTNo. 0-1040 (a.f.) based on Decree No. N-182390 dated April 17,1968 [allegedly issued by the Hon. Teodulo Tandayag of the Court of First Instance (CFI) of Lanao del Norte.] 2) Per Cadastral record, only Messrs. Pio Echaves and Pedro Q. Solosa filed an answer/claims for Lot 1911, which answer still exists. 3) Again, per record, your client Basilio Llanes did not file an answer/claim to said Lot 1911. 4) Finally, per record, Lot 1911 is NOT yet decreed in the name of any person, let alone your client Basilio Llanes.
No further communication between Atty. Busico and Atty. Padilla transpired thereafter.
On 14 March 1995, [petitioner] FEMCO management received a Letter dated 23 February 1995 from a certain Atty. Dulcesimo Tampus, apparently the new counsel for the Heirs of Basilio Llanes, informing them that that they had erroneously fenced a portion of about 16,629 square meters of his clients' lot, known as Lot 1911. The letter demanded that the fence be removed immediately and for [petitioner] FEMCO to pay the amount of Php 2,000.00 as rental fee, until the fence shall have been removed.
Two days later, Atty. Padilla wrote Atty. Tampus a Letter informing him that "per cadastral record, the only persons who filed answers to Lot 1911 were Messrs. Pio Echavez and Pedro Q. Solosa. Basilio Llanes never claimed or filed an answer to said lot. Also, per Form No. 36, Record of Cadastral Answer, Lot 1911 is not yet decreed in favor of any person, let alone in the name of Basilio Llanes. The only inevitable conclusion is that the title of your clients is faked (sic)."
To forestall any farther (sic) attempt to interfere with its property rights, [petitioner] FEMCO filed on 1 September 1995, a Complaint against [the respondents] before the RTC of Lanao del Norte for quieting of title and damages. This was docketed as Civil Case No. 3337.
In its Complaint, [petitioner] FEMCO asserted [that it is the registered owner of a parcel of land situated in Sta. Felomina, Iligan City having an area of 50,528 square meters, its title thereto being evidenced by TCT No. 17460 (a.f.), that it has constructed thereon its manufacturing plant for eslon pipes and accessories, and that "OCT No. 0-1040 (a.f.) and all the transfer certificate of titles emanating thereunder, including but not limited to those referred to in the next preceding paragraph, are apparently valid or effective but are in truth and in fact invalid, ineffective, voidable, or unenforceable and are prejudicial to [petitioner FEMCO's] title"; that "despite the knowledge that their titles are fake and fraudulent, [respondents] Heirs of Basilio Llanes and [Rolynwin] continue to hold on to their title and in fact has (sic) been selling and/or disposing of the same to the prejudice of [petitioner FEMCO] and the Torrens system. Furthermore, [respondents] Heirs of Basilio Llanes continue to pester and annoy [petitioner FEMCO] by claiming that a portion of [petitioner FEMCO's] land has encroached on their titled land, which they know is false"; that [respondent PAB,] despite the fact that its titles are fake as they emanated from a fake OCT No. 0-1040 (a.f.) has claimed that [petitioner FEMCO's] fence is within its property, which is false."
x x x x
[On the part of the respondents Heirs of Basilio Llanes, they denied the material allegation of the Complaint, alleging that OCT No. 0-1040 (a.f.) is valid and effective by virtue of a decision of the CFI of Lanao del Norte dated April 17, 1968; that Lot 1911 has been in actual physical possession by Basilio Llanes; that petitioner FEMCO is illegally occupying a portion of Lot 1911 consisting of 16,629 sq. meters; and that TCT No. T-17480 is the one which is invalid, void, and ineffective because it is based on a non-existing homestead application.]
On 30 September 1998, the [RTC] issued the assailed Decision in favor of [petitioner FEMCO].
[The RTC, in its Decision, held that "the evidence is indubitable that NO decision was signed and rendered by Hon. Teodulo Tandayag, the detailed presiding judge of the then Court of First Instance of Lanao del Norte adjudicating Cad. Lot No. 1911 in favor of Basilio Llanes on April 17, 1968. Aside from the other facts such as the absence of a cadastral answer of Basilio Llanes and the testimony of Atty. Macaraya that the cadastral records show that Lot 1911 has not been adjudicated to any person or entity, the most telling and strongly convincing evidence showing that no such decision was rendered by Judge Tandayag is the alleged certified decision, Exh. 'H' itself. It contains specific data which condemns itself as a falsity, x x x."[4]
The dispositive portion of the RTC's Decision reads:1. Declaring OCT No. 0-1040 (a.f.) in the name of Basilio Llanes, Exh. "G" and Decree No. N-l82390, Exh. "G-1" null and void ab initio, and the decision, Exh. "H" as well as the Order for the issuance of the decree, Exh. "H-4" inexistent, fake and void ab initio;Aggrieved, [respondents Edilberto], Heirs of Basilio Llanes, [Cresogono and Maria (respondents Seveses)], [Monera], and [PAB] filed their respective Notices of Appeal. However, [respondents Rufino, Sps. Justiniano, Sps. Gerona, Claudio, and Sps. Ferraren] failed to file an appeal. Thus, as to them, the decision rendered by the court a quo has become final and executory.
2. Declaring all transfer certificates of title derived from OCT No. 0-1040 (a.f.) to be likewise invalid and ineffective[,] particularly the following:a) TCT No. T-35,257 (a.f.); TCT No. T- 35,258 (a.f.) and TCT No. T-35259, all in the name of [respondents Sps. Gerona];The Register of Deeds of Iligan City is directed to cancel all the above certificates of title.
b) TCT No. T-28,823 (a.f.), in the name of [respondent Rufino];
c) TCT No. T-30,495 (a.f.) and TCT No. T-30496 (a.f), both in the name of [respondent Cresogono];
d) TCT No. T-31992 (a.f), in the name of [respondent Maria];
e) TCT No. T-29,546 (a.f.) in the name of [respondent Monera];
f) TCT No. T-45,217 (a.f), in the name of [respondent Claudio];
g) TCT No. T-31767 (a.f); TCT No. 32390 (a.f.) and TCT No. T-34,495 (a.f), all in the name of [respondents Sps. Ferraren];
h) TCT No. T-21,572 (a.f.) and TCT No. T-31994 (a.f), all in the name of Basilio Llanes;
i) TCT No. T-32,116 (a.f), in the name of [respondent Edilberto];
j) TCT No. T-32085 (a.f); TCT No. T-32183 (a.f), in the name of [respondent PAB];
3. Declaring [petitioner FEMCO] to be entitled to the ownership and possession of the land described in TCT No. T-17460 (a.f.) in its name particularly that portion of the 16,629 sq. meters claimed by [respondents] Heirs of Basilio Llanes and that portion of 947.64 sq. meters claimed by [respondent PAB].
4. Denying [petitioner FEMCO's] claim for damages against all [respondents] and dismissing the complaint against [respondent Generoso] without prejudice.
5. Dismissing the counterclaims of all [respondents] against [petitioner FEMCO] for lack of merit.
No pronouncement as to costs. SO ORDERED.[5]
While the [respondent] Heirs of Basilio Llanes and [respondents Seveses] were able to file their Notice of Appeal within the reglementary period, they however failed to file their Appellants' Brief within the time allowed and granted by [the CA]. Thus, on 10 August 2000, the [CA] issued a Resolution dismissing their appeal pursuant to Section 1(e) Rule 50 of the 1997 Rules of Civil Procedure. Subsequently, on 13 September 2000, an Entry of Judgment was issued by the [CA], declaring the case final and executory insofar as [respondents] Heirs of Basilio Llanes and [respondents Seveses] were concerned. Hence, the [CA no longer passed] upon their respective appeals in [the assailed] Decision.
x x x x
[The CA thus resolved] the merits of the appeals foisted by [respondents PAB, Monera, and Edilberto.][6]
WHEREFORE, all the foregoing considered, the assailed Decision dated 30 September 1998 rendered by the Regional Trial Court (RTC), 12th Judicial Region, Branch 06, City of Iligan, in Civil Case No. 06-3337 is hereby REVERSED and SET ASIDE. Plaintiff-appellee FEMCO's Complaint against defendants and defentants-appellants Al-Amanah Islamic Bank, Monera M. Lalanto and Edilberto V. Paza is DISMISSED. No Costs.As explained in the assailed Decision, in the main, the CA granted the appeal for three reasons.
SO ORDERED.[7]
The petitioners contend that this action for quieting of title should be disallowed because it constituted a collateral attack on OCT No. RO-9969-(O-20449), citing Section 48 of Presidential Decree No. 1529, viz:Similarly, in Roman Catholic Archbishop of San Fernando v. Soriano, Jr.,[23] the Court held that the complaint for quieting of title filed against the therein petitioner does not amount to a collateral attack because at the heart of the action for quieting of title was the genuineness of the certificate of title:
Section 48. Certificate not subject to collateral attack. - A certificate of title shall not be subject to collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law.
The petitioners' contention is not well taken.
An action or proceeding is deemed an attack on a title when its objective is to nullify the title, thereby challenging the judgment pursuant to which the title was decreed. The attack is direct when the objective is to annul or set aside such judgment, or enjoin its enforcement. On the other hand, the attack is indirect or collateral when, in an action to obtain a different relief, an attack on the judgment is nevertheless made as an incident thereof.
Quieting of title is a common law remedy for the removal of any cloud, doubt, or uncertainty affecting title to real property. Whenever there is a cloud on title to real property or any interest in real property by reason of any instrument, record, claim, encumbrance, or proceeding that is apparently valid or effective, but is, in truth and in fact, invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title. In such action, the competent court is tasked to determine the respective rights of the complainant and the other claimants, not only to place things in their proper places, and to make the claimant, who has no rights to said immovable, respect and not disturb the one so entitled, but also for the benefit of both, so that whoever has the right will see every cloud of doubt over the property dissipated, and he can thereafter fearlessly introduce the improvements he may desire, as well as use, and even abuse the property as he deems fit.[22]
The RCA likewise asserts that the case for quieting of title is a collateral attack on its title which is prohibited by law. However, we agree with the CA in holding that the complaint against the RCA does not amount to a collateral attack because the action for the declaration of nullity of OCT No. 17629 is a clear and direct attack on its title.In Guntalilib v. Dela Cruz,[25] the Court, in denying the therein petitioner's claim that the therein respondents' action for quieting of title was a prohibited collateral attack, held that the underlying objectives or reliefs sought in both quieting of title and the annulment of title cases are essentially the same — adjudication of the ownership of the disputed lot and nullification of the questioned certificates of title:
An action is deemed an attack on a title when its objective is to nullify the title, thereby challenging the judgment pursuant to which the title was decreed. The attack is direct when the objective is to annul or set aside such judgment, or enjoin its enforcement. On the other hand, the attack is indirect or collateral when, in an action to obtain a different relief, an attack on the judgment is nevertheless made as an incident thereof.
The complaint filed with the RTC pertinently alleged that the claim of ownership by the RCA is spurious as its title, denominated as OCT No. 17629, is fake for the following reasons: (1) that the erasures are very apparent and the title itself is fake; (2) it was made to appear under Memorandum of Encumbrance Entry No. 1007 that the title is a reconstituted title when in truth, it is not; and (3) the verification reveals that there was no petition filed before any court where an order was issued for the reconstitution and re-issuance of an owner's duplicate copy. It is thus clear from the foregoing that the case filed questioning the genuineness of OCT No. 17629 is a direct attack on the title of the RCA.[24]
Moving on to the substantive issues raised, the Court finds without merit petitioner's claim that respondents' quieting of title case constitutes a prohibited attack on his predecessor Bernardo Tumaliuan's unnumbered OCT as well as the proceedings in LRC Case No. 6544. It is true that "the validity of a certificate of title cannot be assailed in an action for quieting of title; an action for annulment of title is the more appropriate remedy to seek the cancellation of a certificate of title." Indeed, it is settled that a certificate of title is not subject to collateral attack. However, while respondents' action is denominated as one for quieting of title, it is in reality an action to annul and cancel Bernardo Tumaliuan's unnumbered OCT. The allegations and prayer in their Amended Complaint make out a case for annulment and cancellation of title, and not merely quieting of title: they claim that their predecessor's OCT 213, which was issued on August 7, 1916, should prevail over Bernardo Tumaliuan's unnumbered OCT which was issued only on August 29, 1916; that petitioner and his co-defendants have knowledge of OCT 213 and their existing titles; that through fraud, false misrepresentations, and irregularities in the proceedings for reconstitution (LRC Case No. 6544), petitioner was able to secure a copy of his predecessor's supposed unnumbered OCT; and for these reasons, Bernardo Tumaliuan's unnumbered OCT should be cancelled. Besides, the case was denominated as one for "Quieting of Titles x x x; Cancellation of Unnumbered OCT/Damages."The CA heavily relies on Foster-Gallego v. Sps. Galang, et al.[27] in arriving at its conclusion that petitioner FEMCO's Complaint for Quieting of Title is a prohibited collateral attack. This reliance is misplaced.
It has been held that "[t]he underlying objectives or reliefs sought in both the quieting-of-title and the annulment-of-title cases are essentially the same — adjudication of the ownership of the disputed lot and nullification of one of the two certificates of title." Nonetheless, petitioner should not have been so simplistic as to think that Civil Case No. 6975 is merely a quieting of title case. It is more appropriate to suppose that one of the effects of cancelling Bernardo Tumaliuan's unnumbered OCT would be to quiet title over Lot 421; in this sense, quieting of title is subsumed in the annulment of title case.[26]