Gatmaytan v. Misibis Land
REITERATIONFacts
1. The Antecedents: Petitioners Mercedes S. Gatmaytan and Erlinda V. Valdellon purchased a 6.4868-hectare parcel of land in Misibis, Albay, evidenced by Transfer Certificate of Title (TCT) No. T-77703, in December 1991. They paid the associated taxes and had their Deed of Absolute Sale (1991 DOAS) annotated on the title. However, they were unable to transfer the title to their names due to a lack of Department of Agrarian Reform (DAR) clearance. In 2010, upon resuming efforts to transfer the title, they discovered that the property had been consolidated and subdivided by Misibis Land, Inc. (MLI) into smaller lots, with new titles issued. They learned that TCT No. T-77703 had been cancelled and replaced by subsequent titles stemming from a Deed of Absolute Sale (1996 DOAS) between the original sellers, Spouses Garcia, and DAA Realty Corporation (DAA Realty) in February 1996, and a subsequent Deed of Absolute Sale (2005 DOAS) between DAA Realty and MLI in April 2005. 2. Procedural History: Following their discovery in 2010, Petitioners filed an Affidavit of Adverse Claim on MLI's titles in September 2010. Subsequently, on December 10, 2014, they filed a complaint before the Regional Trial Court (RTC) of Tabaco City, Branch 15, against Spouses Garcia, DAA Realty, MLI, and Philippine National Bank (PNB). The RTC, in an Order dated October 22, 2015, dismissed the complaint on grounds of prescription and lack of jurisdiction, finding that the action for reconveyance based on implied trust had prescribed more than ten years after DAA Realty's title was issued in 1996. The RTC also cited the failure to pay correct docket fees as a jurisdictional defect. Petitioners' motion for reconsideration was denied by the RTC in an Order dated December 28, 2015. Petitioners then filed a petition for review on certiorari with the Supreme Court. Initially, the Supreme Court denied the petition for failure to sufficiently show reversible error and for non-compliance with procedural requirements. However, upon reconsideration, the Supreme Court reinstated the petition and directed MLI to file a comment. The Court ultimately granted the petition, reversing the RTC's dismissal orders and remanding the case for trial on the merits. 3. The Petition: Petitioners filed a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the RTC's dismissal orders. They argued that their complaint should not have been dismissed outright, as it contained alternative causes of action, including one for reconveyance based on a void contract (the 1996 DOAS), which is imprescriptible, and an action for quieting of title. They contended that the RTC erred in treating their action solely as one for reconveyance based on implied constructive trust, which prescribes. Petitioners also argued that the 1996 DOAS was void because the Spouses Garcia no longer owned the property, one of the seller's signatures appeared forged, and the buyer, DAA Realty, was not yet incorporated at the time of the sale. Furthermore, they asserted that MLI could not be considered an innocent purchaser for value because the owner's duplicate title was never surrendered for the registration of the 1996 DOAS, violating Section 53 of PD 1529. They also argued that any deficiency in docket fees could be paid belatedly, as their causes of action had not prescribed. The Supreme Court granted the petition, finding that the allegations in the complaint, particularly regarding the nullity of the 1996 DOAS and the subsequent titles, sufficiently stated a cause of action that warranted a full-blown trial.
Issue(s)
Whether the Complaint should be allowed to proceed for trial on the merits. Whether the RTC erred in treating the Complaint solely as an action for reconveyance based on an implied constructive trust and dismissing it as prescribed. Whether the Petitioners' action for reconveyance based on alleged nullity of the 1996 deed is imprescriptible. Whether the alternative cause of action for quieting of title is barred by prescription. Whether the RTC rightly dismissed the Complaint for alleged failure to pay correct docket fees and whether belated payment of any deficiency may be allowed.
Ruling
The Court GRANTS the petition. The Orders dated October 22, 2015 and December 28, 2015 of the Regional Trial Court of Tabaco City, Branch 15 in Civil Case No. T-2820 are REVERSED. The case is REMANDED to the RTC for trial on the merits and the trial court is DIRECTED to resolve the case with dispatch.
Ratio Decidendi
On Whether the Complaint should be allowed to proceed for trial on the merits: The Court held that Rule 8, Section 2 of the Rules of Court permits pleading alternative causes of action and that where one of the alternative causes of action, if independently pleaded, would be sufficient, the complaint cannot be dismissed on the insufficiency of another alternative claim. The Court found that the Complaint contained alternative causes of action including a primary claim for reconveyance based on the alleged nullity of the 1996 deed and an alternative claim for quieting of title, any one of which could sustain the action. The hypothetical admissions arising from respondent's Motion for Preliminary Hearing meant that the material allegations of the complaint were deemed admitted for purposes of testing sufficiency, and those allegations sufficiently alleged the non-presentation of the owner's duplicate title and the annotation of Petitioners' 1991 DOAS. Applying these principles, the Court concluded that a full-blown trial was required to resolve the factual disputes and that summary dismissal was improper. The Court emphasized that accepting the allegations in the complaint as true for determination of sufficiency is required and that resolving conflicts between the complaint and attachments is a matter for trial, not dismissal. On Whether the RTC erred in treating the Complaint solely as an action for reconveyance based on implied constructive trust and dismissing it as prescribed: The Court explained that the RTC committed grave error by limiting characterization of the Complaint solely to reconveyance based on implied constructive trust. The Complaint's allegations, deemed hypothetically admitted by MLI's affirmative defenses, pleaded facts showing that the 1996 deed may be void (for example, alleged forgery and that the sellers no longer owned the property), which, if proven, would render an action for reconveyance imprescriptible. The Court applied Uy v. Court of Appeals and related jurisprudence distinguishing reconveyance based on fraud (ten-year prescriptive period) from reconveyance based on a void contract (imprescriptible). Because the complaint alleged nullity of the 1996 deed, the RTC should have treated the action as potentially based on a void contract and not subject to the ten-year prescription. The Court therefore found dismissal on prescription untenable without factual determination at trial. On Whether Petitioners' action for reconveyance based on alleged nullity of the 1996 deed is imprescriptible: The Court reasoned that when a reconveyance action is founded on a void contract (i.e., absence of consent or a contract inexistent), such action is imprescriptible under Article 1410 and related provisions; the issuance of Torrens titles cannot validate a null and void sale. The Court relied on Uy v. Court of Appeals, Daclag v. Macahilig, and Santos v. Heirs of Dominga Lustre to show that reconveyance based on a void contract is not time-barred. The Court also noted that Section 53 of Presidential Decree No. 1529 and Levin v. Bass teach that failure to present the owner's duplicate title prevents valid registration and that a title so issued may be null and void and not operate as constructive notice. Given petitioners' allegation that they retained the owner's duplicate title and that the 1996 deed was void on its face, the reconveyance claim may be imprescriptible and required trial to resolve. On Whether the alternative cause of action for quieting of title is barred by prescription: The Court held that, even if the action were treated as one for quieting of title, such action generally prescribes in thirty years but is imprescriptible if the plaintiff is in actual, continuous, and peaceful possession. The Court found petitioners alleged equitable title and that the issuance of DAA Realty's Torrens title in 1996 created a cloud which petitioners sought to remove; because the complaint was filed in 2014 (eighteen years later), an action for quieting of title was not time-barred. The Court therefore concluded that the quieting of title alternative was also sufficient to prevent dismissal. On Whether the RTC rightly dismissed the Complaint for alleged failure to pay correct docket fees and whether belated payment may be allowed: The Court explained that the jurisdictional defect of nonpayment of docket fees may, in appropriate circumstances, be cured by belated payment and that the trial court may permit payment within a reasonable time, citing Sun Insurance Office, Ltd. v. Asuncion. Because none of petitioners' causes of action had prescribed (as determined above), any deficiency in docket fees could still be permitted to be paid, and dismissal on that ground was improper. The Court therefore found that the RTC erred in dismissing the complaint for alleged deficient docket fees without first allowing belated payment when warranted.
Main Doctrine
A complaint pleading alternative causes of action should not be summarily dismissed if any one alternative sufficiently states a cause of action; an action for reconveyance based on a void contract is imprescriptible and where a Torrens registration is procured without presentation of the owner's duplicate title the resulting certificate may be null and void and not afford constructive notice.