Velarde v. Heirs of Candari
REITERATIONFacts
The Antecedents: This case concerns a dispute over ownership of several parcels of land. The petitioners, heirs of Isagani S. Velarde, claim ownership based on a Deed of Sale with Right of Repurchase executed by respondent Concepcion Candari in favor of Isagani, and a subsequent Deed of Quitclaim and Waiver of Rights where Concepcion relinquished absolute ownership. Additionally, one parcel was allegedly acquired by Isagani from Concepcion's sister, Rizalina C. Villamon, through a Deed of Absolute Sale. Petitioners averred that after Isagani's death, Concepcion began acting as the owner, collecting rentals and appropriating the land's produce, prompting the petitioners to file a complaint for quieting of title and damages. Concepcion denied these claims, asserting she inherited the properties and that Isagani was merely a lessee. She accused Isagani and the petitioners of obtaining the deeds and titles through fraudulent means and counterclaimed for damages and reconveyance. Procedural History: The Regional Trial Court (RTC) initially ruled in favor of the petitioners, declaring them the true and rightful owners and ordering Concepcion to deliver possession. However, upon appeal, the Court of Appeals (CA) reversed the RTC's decision. The CA found merit in Concepcion's allegations of fraud, declared the Deed of Sale with Right of Repurchase and the Deed of Quitclaim and Waiver of Rights null and void, and ordered the petitioners to reconvey the five parcels of land to Concepcion. The CA also ordered the cancellation of the petitioners' titles and the issuance of new ones in Concepcion's name. The CA's Resolution denied the petitioners' motion for reconsideration. The Petition: The petitioners filed a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, assailing the CA's decision and resolution. They argue that their ownership over the disputed properties is valid, asserting that the OCTs and TDs in their names cannot be collaterally attacked by unsupported allegations of fraud. They contend that Concepcion's acts of instituting tenants and collecting produce do not invalidate their title. The respondents, the heirs of Concepcion Candari, initially moved for dismissal on procedural grounds, citing non-compliance with verification and certification against forum shopping requirements. They also argued that the consolidation of ownership was illegal due to non-compliance with Article 1607 of the Civil Code and maintained their imputation of fraud against the petitioners.
Issue(s)
Whether the petition should be dismissed for failure of all petitioners to sign the Verification and Certificate Against Forum Shopping. Whether the action for quieting of title should prosper, considering the nature of the claims and the evidence presented. Whether the CA erred in finding fraud and declaring the Deed of Sale with Right of Repurchase and Deed of Quitclaim and Waiver of Rights null and void. Whether the consolidation of ownership under Article 1607 of the Civil Code is a condition sine qua non for the transfer of ownership in a pacto de retro sale.
Ruling
The Supreme Court granted the petition, reversed the Court of Appeals' decision, and reinstated the Regional Trial Court's decision. Petitioners Spouses Adolfo B. Velarde, et al. were declared the true and rightful owners entitled to the possession of the disputed properties.
Ratio Decidendi
On the issue of Verification and Certification Against Forum Shopping: The Court held that the petition substantially complied with the Rules. The requirement for verification is deemed substantially complied with when one who has ample knowledge of the allegations signs it. Similarly, when all petitioners share a common interest and cause of action, the signature of only one in the certification against forum shopping substantially complies with the Rule. In this case, the petitioners shared a common interest and their claims hinged on the same set of documents, thus the petition was not dismissible on this ground. On the nature of the action and the propriety of quieting of title: The Court clarified that while the complaint was captioned as an action for quieting of title, an examination of the averments revealed it to be an accion reivindicatoria. An action to quiet title requires the plaintiff to have legal or equitable title and that the cloud on the title be shown to be invalid or inoperative. However, the petitioners' cause of action was grounded on claims of ownership clouded by Concepcion's alleged exercise of proprietary rights, such as instituting tenants and collecting produce. The Court emphasized that physical intrusion is not a ground for quieting of title, and with an allegation of violation of a right, the petitioners were essentially seeking to recover full possession, which is characteristic of an accion reivindicatoria. On the alleged fraud and the validity of the deeds: The Court found the CA mistaken in concluding fraud based on the circumstances presented. It held that mere non-compliance with Article 1607 of the Civil Code, which requires a judicial order for consolidation of ownership in real property pacto de retro sales, is not proof of fraud. The purpose of Article 1607 is to prevent simulated pacto de retro sales and ensure the vendor is heard, which was satisfied by the proceedings. The Court found Concepcion's claims of fraud to be unsubstantiated and lacking specificity, relying instead on bare denials that could not prevail over the petitioners' evidence, including duly notarized deeds and testimonial evidence. Notarial documents carry the presumption of regularity and validity, which can only be overturned by clear and convincing evidence of fraud. On the consolidation of ownership and the effect of pacto de retro: The Court reiterated that in a pacto de retro sale, ownership is immediately vested in the vendee, subject to the resolutory condition of repurchase. Failure to redeem within the stipulated period vests absolute ownership in the vendee by operation of law. The Court clarified that the recording of the consolidated title under Article 1607 is not a condition sine qua non for the transfer of ownership; it is merely for registration purposes. The failure to consolidate title does not impair the ownership already vested in the vendee. In this case, Concepcion failed to redeem within the five-year period, automatically transferring irrevocable title to Isagani, and subsequently to the petitioners as his heirs. The Deed of Quitclaim and Waiver of Rights, though executed later, further acknowledged their ownership.
Main Doctrine
A complaint captioned as an action for quieting of title may be treated as an accion reivindicatoria if the allegations and evidence presented clearly seek to recover possession of property due to alleged physical intrusion or disturbance of ownership rights. Mere non-compliance with Article 1607 of the Civil Code regarding judicial order for consolidation of ownership in pacto de retro sales is not, by itself, proof of fraud.