ELAND PHILIPPINES, INC., petitioner, vs.

AZUCENA GARCIA, ELINO

FAJARDO, and HEIR OF TIBURCIO MALABANAN named TERESA
MALABANAN, respondents.
2010
FACTS:

Respondents filed a Complaint for Quieting of Title with Writ of Preliminary

Injunction against petitioner Eland Philippines, Inc.

Claims of respondents:

- they are the owners, in fee simple title, of a parcel of land by occupation and
possession under the provisions of Sec. 48 (b) of the Public Land Law or
Commonwealth Act No. 141, as amended.
- For having been in continuous, public, and adverse possession as owners of
the said lot for at least thirty years, respondents stated that they were not aware
of any person or entity who had a legal or equitable interest or claim on the
same lot until the time they were requesting that the lot be declared for tax
purposes.
- They found out that the lot was the subject of a land registration proceeding
that had already been decided by the same court where their complaint was
filed.
- they were not notified of the said land registration case; thus, they claimed the
presence of misrepresentation amounting to actual or extrinsic fraud.
- they were also entitled to a writ of preliminary injunction in order to restrain or
enjoin petitioner, its privies, agents, representatives, and all other persons
acting on its behalf, to refrain from committing acts of dispossession on the
subject lot.

PROCESS:
Summons served to petitioner – petitioner filed entry of appearance with motion
for extension time (granted) – second motion of time extension (granted)

PETITIONER:
- filed motion to dismiss:
a. respondents have no cause of action
b. respondents were not entitled to the issuance of a writ of preliminary
injunction

TC: denied motion to dismiss of petitioner and also denied the motion for
reconsideration
RESPONDENTS:
- filed a Motion to Declare Defendant Eland in Default

TC: declared petitioner in default and allowed respondents to present evidence ex

parte
- TC granted petitioner’s motion for reconsideration
- Admitted petitioner’s Answer Ad Cautelam

- Petitioner filed its Answer Ad Cautelam (With Compulsory Counterclaim)

- Respondents countered by filing a Motion to Expunge Eland's Answer from the
Records
- Petitioner filed its Opposition
- Consequently, respondents filed a Motion to Set Presentation of Evidence Ex
Parte which was granted
- Respondents presented their evidence before the Clerk of Court of the trial
court, respondents filed their Formal Offer of Evidence.
- However, petitioner filed an Urgent Motion to Suspend Plaintiff's Ex Parte
Presentation of Evidence (trial court issued an Order directing the Clerk of Court
to suspend the proceedings)

Motion for clarification was filed by respondents as to whether not the evidence
presented ex parte was nullified by the admission of petitioner's Answer Ad
Cautelam.

TC: the reception of evidence already presented by the respondents before the
Clerk of Court remained as part of the records of the case, and that the petitioner
had the right to cross-examine the witness and to comment on the documentary
exhibits already presented.

- Petitioner filed a MR but was denied

Respondents filed a motion for Summary Judgement.

RTC: ruled in favor of the respondents
a. plaintiffs are absolute owners and rightful possessors, subject to the rights
of occupancy of the farmworkers on the 1/3 area
b. Judgement in Land Registration is set aside
c. OCT is ordered to be cancelled
CA: dismiss the appeal of the petitioners

Petitioner’s Arguments:
 1. petitioner received a copy of the respondents' motion for summary judgment
on the very same day that the motion was set for hearing (improper it must
be served at least ten (10) days before the date set for hearing thereof, and
that a hearing must be held to hear the parties on the propriety of a summary
judgment, per Sec. 3 of Rule 35 of the Revised Rules of Court)
2. trial court never conducted any hearing on the motion for summary judgment
3. summary judgment is only available to a claimant seeking to recover upon
a claim, counterclaim or cross-claim or to obtain a declaratory relief, and
does not include cases for quieting of title.
4. that a summary judgment has no place in a case where genuine factual and
triable issues exist, like in the present case (raised in its Answer Ad
Cautelam)
5. its failure to cross-examine the witnesses for the respondents without fault
on its part.
6. Raised issue that by rendering summary judgement, the trial court deprived
the former of its right to due process

ISSUE:

Whether or not the summary judgement rendered by the trial court is proper in this
particular case of quieting of title

SC:

NO

Rule 35 of the 1997 Rules of Civil Procedure provides:

SEC. 1. Summary judgment for claimant. — A party seeking to recover upon a

claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any time
after the pleading in answer thereto has been served, move with supporting
affidavits for a summary judgment in his favor upon all or any part thereof.

SEC. 3. Motion and proceedings thereon. — The motion shall be served at least
ten (10) days before the time specified for the hearing. The adverse party prior to
the day of hearing may serve opposing affidavits. After the hearing, the judgment
sought shall be rendered forthwith if the pleading, depositions, and admissions on
file together with the affidavits, show that, except as to the amount of damages,
there is no genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.

In the present case, it was the respondents who moved for a summary
judgment.
TEN-DAY NOTICE RULE VIOLATED? NO.

The CA ruled, as the records show, that the ten-day notice rule was substantially
complied with because when the respondents filed the motion for summary
judgment on August 9, 1999, they furnished petitioner with a copy thereof on the
same day as shown in the registry receipt and that the motion was set for hearing
on August 20, 1999, or 10 days from the date of the filing.

SUMMARY JUDGMENT NOT PROPER IN ACTION FOR QUIETING OF TITLE?

NO.

This Court has already ruled that any action can be the subject of a summary
judgment with the sole exception of actions for annulment of marriage or
declaration of its nullity or for legal separation.

MAIN ISSUE: GRANT of SUMMARY JUDGMENT

- Not proper
- A summary judgment is permitted only if there is no genuine issue as to any
material fact and a moving party is entitled to a judgment as a matter of law. A
summary judgment is proper if, while the pleadings on their face appear to raise
issues, the affidavits, depositions, and admissions presented by the moving
party show that such issues are not genuine
- It must be remembered that the non-existence of a genuine issue is the
determining factor in granting a motion for summary judgment, and the movant
has the burden of proving such nonexistence.
- Clearly, the facts pleaded by the respondents in their motion for summary
judgment have been duly disputed and contested by petitioner, raising genuine
issues that must be resolved only after a full-blown trial. When the facts as
pleaded by the parties are disputed or contested, proceedings for
summary judgment cannot take the place of trial. In the present case, the
petitioner was able to point out the genuine issues. A "genuine issue" is an
issue of fact that requires the presentation of evidence as distinguished from a
sham, fictitious, contrived or false claim.
- petitioner is already the registered owner of the parcel of land in question,
pursuant to a decree of registration based on the ruling of the same court that
granted the summary judgment for the quieting of title. Incidentally, the findings
of the trial court contained in the disputed summary judgment were obtained
through judicial notice of the facts and rulings pertaining to that earlier case
wherein the same trial court ruled in favor of the petitioner. It is, therefore,
disorienting that the same trial court reversed its earlier ruling.
- By granting the summary judgment, the trial court has in effect annulled its
former ruling based on a claim of possession and ownership of the same
 land for more than thirty years without the benefit of a full-blown trial. The
fact that the respondents seek to nullify the OCT issued to the petitioner on the
claim that the former were in possession of the same land for a number of
years, is already a clear indicium that a genuine issue of a material fact
exists. This, together with the failure of the respondents to show that there
were no genuine issues involved, should have been enough for the trial court
to give the motion for summary judgment, filed by respondents, scant
consideration. Trial courts have limited authority to render summary judgments
and may do so only when there is clearly no genuine issue as to any material
fact.

QUIETING OF TITLE:
To begin with, it bears emphasis that an action for quieting of title is essentially a
common law remedy grounded on equity.

The remedy may be availed of only when:

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.

Article 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.

For an action to quiet title to prosper, two (2) indispensable requisites must
concur, namely:
1. the plaintiff or complainant has a legal or an equitable title to or interest in
the real property subject of the action
2. the deed, claim, encumbrance, or proceeding claimed to be casting cloud
on his title must be shown to be in fact invalid or inoperative despite its prima
facie appearance of validity or legal efficacy.

FIRST REQUISITE IS COMPLIED:

Respondents become the owners in fee simple title of the subject land by
occupation and possession under the provisions of Sec. 48 (b) of the Public Land
Law or Commonwealth Act No. 141, as amended.
SECOND REQUISITE:
respondents enumerated several facts that would tend to prove the invalidity of the
claim of the petitioner. All of these claims, which would correspond to the two
requisites for the quieting of title, are factual; and, as discussed earlier, the
petitioner interposed its objections and duly disputed the said claims, thus,
presenting genuine issues that can only be resolved through a full-blown trial.

Propriety of the filing of an action for the quieting of title

Under Sec. 32 of P.D. No. 1529 or the Property Registration Decree:

Section 32. Review of decree of registration; Innocent purchaser for value. —

The decree of registration shall not be reopened or revised by reason of
absence, minority, or other disability of any person adversely affected thereby,
nor by any proceeding in any court for reversing judgments, subject, however,
to the right of any person, including the government and the branches thereof,
deprived of land or of any estate or interest therein by such adjudication or
confirmation of title obtained by actual fraud, to file in the proper Court of First
Instance a petition for reopening and review of the decree of registration not
later than one year from and after the date of the entry of such decree of
registration, but in no case shall such petition be entertained by the court where
an innocent purchaser for value has acquired the land or an interest therein,
whose rights may be prejudiced. Whenever the phrase "innocent purchaser for
value" or an equivalent phrase occurs in this Decree, it shall be deemed to
include an innocent lessee, mortgagee, or other encumbrancer for value.

Upon the expiration of said period of one year, the decree of registration and
the certificate of title issued shall become incontrovertible. Any person aggrieved
by such decree of registration in any case may pursue his remedy by action for
damages against the applicant or any other persons responsible for the fraud.

The period of 1 year from the issuance of the decree of registration has not elapsed
for the review thereof. However, a closer examination of the above provisions
would clearly indicate that the action filed, which was for quieting of title,
was not the proper remedy.

Courts may reopen proceedings already closed by final decision or decree when
an application for review is filed by the party aggrieved within one year from
the issuance of the decree of registration. However, the basis of the aggrieved
party must be anchored solely on actual fraud. Shedding light on the matter is
a discussion presented in one of the recognized textbooks on property registration,
citing decisions of this Court, thus:

The right of a person deprived of land or of any estate or interest therein by

adjudication or confirmation of title obtained by actual fraud is recognized by law as a
valid and legal basis for reopening and revising a decree of registration. One of the
remedies available to him is a petition for review. To avail of a petition for review,
the following requisites must be satisfied:
1. The petitioner must have an estate or interest in the land;
2. He must show actual fraud in the procurement of the decree of registration;
3. The petition must be filed within one year from the issuance of the decree by
the Land Registration Authority; and
4. The property has not yet passed to an innocent purchaser for value.

A petition for review under Section 32 is a remedy separate and distinct from a
motion for new trial and the right to the remedy is not affected by the denial of
such a motion irrespective of the grounds upon which it may have been
presented. Thus, where petitioners acquired their interest in the land before any final
decree had been entered, the litigation was therefore in effect still pending and, in
these circumstances, they can hardly be considered innocent purchasers in good
faith.

Where the petition for review of a decree of registration is filed within the one-
year period from entry of the decree, it is error for the court to deny the
petition without hearing the evidence in support of the allegation of actual and
extrinsic fraud upon which the petition is predicated. The petitioner should be
afforded an opportunity to prove such allegation.

In the present case, the one-year period before the Torrens title becomes
indefeasible and incontrovertible has not yet expired; thus, a review of the decree
of registration would have been the appropriate remedy.
 ENRIQUITO SERNA and AMPARO RASCA, petitioners, vs. COURT OF
APPEALS, SANTIAGO FONTANILLA, and RAFAELA RASING, respondents.
1999

FACTS:

The parties involved are first cousins. Dionisio Fontanilla (grandfather) was the
original owner and possessor of a parcel of land in dispute.

Turner Land Surveying Company surveyed the land for Dionisio Fontanilla, with
the agreement that the cost of survey would be paid upon approval of the plan by
the Bureau of Lands.

For failing to pay the survey costs and to prevent foreclosure, Dionisio Fontanilla
sold the land to his daughter, Rosa Fontanilla. The following year, Rosa began
paying the real estate property tax thereon.

For a consideration of P1,700.00, Rosa sold the land to her nephew, respondent
Santiago Fontanilla, evidenced by a notarized deed of absolute sale, signed by
Rosa. The instrument was not registered.

In 1955, respondents constructed their house of strong materials on the lot in

question, which was completed in 1957.

On December 16, 1957, Rosa's heirs, Estanislao Pajaro and his two (2) children,
Fructoso and Paciencia, executed another deed of absolute sale over the same
land in favor of respondent Santiago Fontanilla.

In 1978 until 1981, respondents went to the United States to visit their daughter
Mila Fontanilla Borillo. On December 20, 1978, taking advantage of respondents'
absence from the country, petitioners Enriquito and Amparo Serna applied to the
land registration court of Pangasinan for registration of the said parcel of land in
their name. The land registration court approved the application and issued OCT
No. 139 to petitioners.

Respondents filed an action for reconveyance with damages, and sought the
annulment of O.C.T. No. 139 before the CFI Pangasinan.

Petitioners allegations:
- 1978 they bought the property for P3,000.00 from Lorenza Fontanilla-Rasca.
Lorenza, in turn, traced her title from her husband, Alberto Rasca.
- Dionisio failed to pay the survey costs in 1921, Turner Land Surveying
Company took the property in question as payment for services.
Her father, Alberto Rasca, redeemed the property from Turner evidenced by a
deed of sale, which, however, Amparo could not produce in court. When her father
died, Santiago Fontanilla borrowed from her mother the deed covering the transfer
of the property, which Santiago did not return. She said that the property was first
declared in Alberto's name for taxation purposes in 1951. Later, the property was
ceded to her.

RTC: rendered decision in favor of plaintiffs

CA: both parties appeal/ affirm RTC

ISSUE: whether or not CA’s decision is supported by law and jurisprudence

RULING:

YES

At the time material hereto, registration of untitled land was pursuant to Act No.
496, as amended. Later, Presidential Decree 1529, the Property Registration
Decree, amended and codified laws relative to registration of property.
"Adjudication of land in a registration (or cadastral) case does not become
final and incontrovertible until the expiration of one (1) year after the entry
of the final decree." After the lapse of said period, the decree becomes
incontrovertible and no longer subject to reopening or review.

However, the right of a person deprived of land or of any estate or interest therein
by adjudication or confirmation of title obtained by actual fraud is recognized by
law as a valid and legal basis for reopening and revising a decree of registration.

The fraud contemplated by the law is actual and extrinsic fraud, which
includes an intentional omission of a fact required by law. For fraud to justify
a review of a decree, it must be extrinsic or collateral, and the facts upon which
it is based have not been controverted or resolved in the case where the judgment
sought to be annulled was rendered. Persons who were fraudulently deprived of
their opportunity to be heard in the original registration case are entitled to a review
of a decree of registration.

"An action based on implied or constructive trust prescribes in ten (10) years. This
means that petitioners should have enforced the trust within ten (10) years from
the time of its creation or upon the alleged fraudulent registration of the property."
Discovery of the fraud must be deemed to have taken place from the issuance of
the certificate of title "because registration of real property is considered a
'constructive notice to all persons' and it shall be counted 'from the time of such
registering, filing or entering."'
In the present case, respondents came to know of the fraud in securing title to the
land sometime after its registration, however, an innocent purchaser for value had
not acquired the property. Extrinsic fraud attended the application for the land
registration. It was filed when respondents were out of the country and they had
no way of finding out that petitioners applied for a title under their name.
Fortunately, respondents' action for reconveyance was timely, as it was filed within
ten (10) years from the issuance of the torrens title over the property.
ROQUE v. AGUADO