Republic of the Philippines

REGIONAL TRIAL COURT

SEVENTH JUDICIAL REGION
Municipality of Barili
Branch 60

Heirs of Hyun Bin, Civil Case No: 12345

Plaintiff For: Nullity of
Documents, Quieting of
Title with Damages and
-versus- Attorney’s Fees

Queen’s Choice
Corporation, Siri Bin
and Sps. Perla and Ariel,
Defendant

x--------------------------------x

ANSWER
with Counterclaim and Cross-claim

COMES NOW, the defendant Queen’s Choice

Corporation, through the undersigned counsel and unto
this Honorable Court, most respectfully avers:

1. Paragraphs 2 to 5 are DENIED for lack of

knowledge or information sufficient to form a
belief as to the truth of the allegations contained
therein;

2. Paragraphs 6 to 8 are ADMITTED;

3. Paragraph 9 is DENIED, the truth being that on

1978, Hyun Bin is no longer the owner of the
property subject of this suit having disposed of the
same, during his lifetime, in favor of his sister, Siri
Bin; Hence, plaintiffs could not have acquired the
same by virtue of hereditary succession at the
time of Hyun’s death in 1979.

AFFIRMATIVE DEFENSES

I.

1
 The complaint failed to state a cause of action

4. Every ordinary civil action must be based on a

cause of action.1 A complaint states a cause of
action if it sufficiently avers the existence of the
three (3) essential elements, namely: (a) a right
in favor of the plaintiff; (b) an obligation on the
defendant to respect such right; and (c) an act or
omission on the part of the defendant violative of
the right. If the allegations of the complaint do not
state the concurrence of these elements, the
complaint becomes vulnerable to a motion to
dismiss.2

5. Moreover, The Rules of Court provide that only a

real party in interest is allowed to prosecute and
defend an action in court.  A real party in interest
is the one who stands to be benefited or injured
by the judgment. Such interest, to be considered
a real interest, must be one which is present and
substantial, as distinguished from a mere
expectancy, or a future, contingent, subordinate
or consequential interest. A plaintiff is a real party
in interest when he is the one who has a legal
right to enforce or protect.3

6. In the case at hand, plaintiffs herein assert that

they are the heirs of the original owner who died
single and without issue. Hence, plaintiffs claim
they are relatives and the supposed legal heirs to
the subject property.

7. An ordinary civil action is distinguished from a

special proceeding. An ordinary civil action is one
by which a party sues another for the enforcement
or protection of a right, or the prevention or
redress of a wrong. A special proceeding, on the
other hand, is a remedy where a party seeks to
establish a right, or a particular fact. 4 An estate
proceeding is treated as a special proceeding.

1
Section 1, Rule 2, Rules of Court
2
Section 16, 1997 Rules of Civil Procedure
3
Reyes v Enriquez, 574 Phil 245-254 (2008)
4
Section 3, Rule 1, Rules of Court

2
 8. In cases where alleged heirs of a decedent sue to
recover a property through the institution of an
ordinary civil action such as a nullification for titles
and other deeds or documents related thereto, the
Supreme Court has consistently ruled that a
declaration of heirship is improper in an ordinary
civil action since such is within the exclusive
competence of a court in a special proceeding. 5

In Portugal v Portugal-Beltran,6 the Court clarified

that if there are no special proceedings filed but
there is, under the circumstances, a need to file
one, then the determination of, among other
issues, heirship should be raised and settled in
said proceedings.

9. Applying in the instant case, while the complaint

was denominated as an action for Nullity of
Documents and Quieting of Title, a review of the
allegations reveals that the right being asserted
by the plaintiffs are their rights as heirs of Hyun
Bin. Except for such averments, they have yet to
substantiate their claim as heirs in special
proceeding. As they have claimed, Hyun Bin died
without issue. Thus, there is a need to establish
their status as such heirs in the proper forum;
which is not within the ambit of this court.

10. Failing to establish their rights as a party-in-

interest, this complaint of the plaintiffs does not
hold water and must be set aside for failure to
state a cause of action.

II.
That the Court has no jurisdiction over the case
at bar for the reason that, at the outset, the
action is now barred by prescription.

Prescription of possession
in good faith with just
title for 10 years

11. Plaintiffs herein allege the nullity of the free

patent issued to Perla in 1992. They claim they
5
Litan et al v Rivera, 100 Phil 364 (1956)
6
467 SCRA 184 (2005)

3
 are the rightful owners of the property in question
by way of hereditary succession.

12. Article 1106, in relation to Article 712, of the

Civil Code affirms that one acquires ownership and
other real rights by prescription in the manner and
conditions laid down by the law.

13. Ordinary acquisitive prescription requires

possession of things in good faith and with just
title for ten (10) years.7 Article 1127 of the same
Code reiterates that possession is in good faith
when there is reasonable belief that the person
from whom the thing is received has been the
owner thereof and could thereby transmit
ownership. There is just title when the possessor
comes into possession of the property through any
of the modes recognized by law for the acquisition
of ownership or other real rights.

14. As alleged by the plaintiffs in their Complaint,

the subject property has long acquired the
character and nature of private land even before
the filing of the application for free patent by
Perla.

Nonetheless, Perla was able to acquire title of the

same. By virtue of Siri Bin’s tax declaration, free
patent and title, defendant corporation had a
reasonable belief that Perla was the owner of the
said property and could thereby transmit its
ownership. Tax declarations are good indica of
possession in the concept of owner, and constitute
at least proof that the holder has a claim of title
over the property.

15. Defendant corporation was an innocent

purchaser for value having acquired the property
from Perla who in turn holds a valid title of the
same since 1992 or more than 10 years since this
nullity suit instituted by the plaintiffs only in 2019.

The prescriptive period to

enforce an implied trust is

7
Virtucio v Alegarbes, 693 Phil. 567, 575 (2012)

4
10 years from the time
the right of action accrues

16. Plaintiffs alleged that Siri, Perla and Ariel

held the properties in trust for the plaintiffs, the
true and actual owners.

17. Article 1456 of the Civil Code provides that a

person acquiring a property through fraud
becomes an implied trustee of the property’s true
and lawful owner. The implied trustee only
acquires the right to the beneficial enjoyment of
the property. The legal title remains with the true
owner.8

18. In Crisostomo v Garcia, Jr,9

Constructive trusts are "created by the construction

of equity in order to satisfy the demands of justice
and prevent unjust enrichment. They arise contrary
to intention against one who, by fraud, duress or
abuse of confidence, obtains or holds the legal right
to property which he ought not, in equity and good
conscience, to hold."

When property is registered in another's name, an

implied or constructive trust is created by law in
favor of the true owner. The action for reconveyance
of the title to the rightful owner prescribes in 10
years from the issuance of the title.

19. The prescriptive period to enforce this trust is

ten (10) years from the time the right of action
accrues. Art. 1144 of the NCC provides:

Article 1144. The following actions must be brought

within ten years from the time the right of action
accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;
(3) Upon a judgment.

Registration of the property is constructive notice

to the whole world. In registering the property

8
Salvatierra v CA, 328 Phil. 758, 775 (1996)
9
516 Phil 743 (2006)

5
 and the subsequent issuance of a title, the
adverse party repudiates the implied trust.
Necessarily, the cause of action accrues upon
registration.

20. As aptly shown in the statement of facts,

Perla applied for and was issued titles in her favor
in 1992. The plaintiff’s complaint for nullity based
on the free patent was filed only in 2019 or 27
years from the time the cause of action accrued.
The belated filing is far beyond the 10-year
prescriptive period imposed on the action; which
action is now barred by prescription.

III.

Defendant corporation is an innocent buyer in

good faith and for value

21. One need not inquire beyond the four corners

of the certificate of title when dealing with
registered property. Section 44 of PD 1529
recognizes innocent purchasers in good faith for
value and the right to rely on a clean title:

Section 44. Statutory liens affecting title. — Every

registered owner receiving a certificate of
title in pursuance of a decree of registration,
and every subsequent purchaser of registered land
taking a certificate of title for value
and in good faith, shall hold the same free from all
encumbrances except those noted in said certificate
and any of the following encumbrances xxx

22. In Leong v See, 10 an innocent purchaser is

someone who buys the property of another
without notice that some other person has a right
to or interest in it, and who pays a full and fair
price at the time of the purchase or before
receiving any notice of another person’s claim.
Thus, innocent purchasers are not obliged to look
beyond the title before they purchase the
property. They may rely solely on the face of the
title.

10
749 Phil. 314-329 (2014)

6
 23. In the case at hand, defendant corporation
acquired the property from Perla who, at the time
of purchase, was the holder of tax declarations
from her predecessor-in-interest dating 1978, and
free patents and a title dating 1992. As
maintained by herein defendant, these documents
are very strong indicia that Perla held these
properties as its owners with full rights to dispose
and transmit them. Defendant has no notice of
any defect that would put them in inquiry. Hence,
it validly relied on the certificates of title and free
patent issued in the vendor’s name.

COUNTERCLAIM

24. By reason of the unfounded suit, the

defendant was constrained to hire the services of
a lawyer to defend its rights and interests for a
professional fee of P50,000.00 plus P5,000.00 per
court appearance.

25. Similarly, this frivolous suit has likewise

tarnished the good name and good will of
defendant corporation from prospect investors and
clients, for which the defendant claims moral
damages of P500,000.00.

CROSS-CLAIM

26. The protection of innocent purchasers in

good faith for value grounds on the social interest
embedded in the legal concept granting
indefeasibility of titles. Between the third party
and the owner, the latter would be more familiar
with the history and status of the titled property.
Consequently, an owner would incur less costs to
discover alleged invalidities relating to the
property compared to a third party. Such costs
are, thus, better borne by the owner to mitigate
costs for the economy, lessen delays in
transactions, and achieve a less optimal welfare
level for the entire society.11

11
Id.

7
 27. Defendants Siri Bin and Sps. Perla and Ariel
should reimburse and pay fully and directly the
answering defendant corporation for damages and
all expenses and litigation costs the latter suffered
to pay under the present action to defend its title
with due regard to the principle against double
recovery.

WHEREFORE, premises considered, it is

respectfully prayed:

1. That the complaint against the defendant

corporation be dismissed for lack of merit;

2. That the defendant’s compulsory counterclaim, i.e.

attorney’s fees of P50,000.00 plus moral damages
of P500,000.00 against the plaintiff be granted;
and

3. That the defendant’s cross-claim, i.e. damages,

and expenses be granted, plus cost of suit.

The defendant prays for such and other reliefs as

may be deemed just and equitable in the premises.

Cebu City. 24 March 2020.

ATTY. DANICA BLANCHE C. FERNANDEZ

Counsel for the Defendant Queen’s
Choice Corporation
Roll No. 11103149
PTR No. 12345/ 01-20-20
IBP No. 12345/ 01-20-20
MCLE No. 12345/ 03-02-20

8
 VERIFICATION AND CERTIFICATION OF NON-
FORUM SHOPPING

I, FREDDY M. KING, of legal age, Filipino, and a

resident of Mambo No. 5, Brgy Pasil, Cebu City, after
being sworn in accordance with law, hereby state that:

1. I am the Vice-President of Queen’s Choice

Corporation who is the defendant in the above-
entitled case;
2. That I am duly authorized by the said Corporation
to represent it and file this pleading pursuant to
Board Resolution 011-2019 attached herein;
3. That I have caused the preparation of the
foregoing ANSWER WITH COUNTERCLAIM AND
CROSS-CLAIM and have read the allegations
contained therein;
4. The allegations in said answer are true and correct
of my personal knowledge and based on authentic
documents;
5. The pleadings are not filed to harass, cause
unnecessary delay, or needlessly increase the cost
of the litigation;
6. The factual allegations therein have evidentiary
support or, if specifically so identified, will likewise
have evidentiary support after a reasonable
opportunity for discovery;
7. I hereby certify that I have not commenced any
other action or proceeding involving the same
issues in any court, tribunal or quasi-judicial
agency and, to the best of my knowledge, no such
other action or claim is pending therein;
8. If there is such other pending action or claim, a
complete statement of the present thereof; and
9. If I should thereafter learn that a similar action or
proceeding has been filed or is pending, I hereby
undertake to report that fact within five (5) days
therefrom to the court or agency where the
original pleading and sworn certification
contemplated herein have been filed.
10. I am executing this certification to attest to
the truth of the foregoing facts and to comply with
the provisions of Adm. Circular No. 04-94 of the
Honorable Supreme Court.

9
 IN WITNESS WHEREOF, I have hereunto affixed
my signature this day, 24th of March 2020 in Cebu City,
Philippines.

FREDDY M. KING
Affiant

SUBSCRIBED & SWORN to before me this day,

th
24 of March 2020 in Tacloban City, Philippines, affiant
being personally known to me.

Doc. No. 05 ATTY. KAREN DERIA

Page No. 05
Book No. 05 Notary Public

Series of: 2020 Roll No. 7632857

PTR No. 487/ 11-06-20

IBP No. 235/ 12-12-20

MCLE No. 325/ 04-24-20

10
Republic of the Philippines )
City of Tagbilaran S.S)
x-----------x

SECRETARY'S CERTIFICATE

KNOW ALL MEN BY THESE PRESENTS:

I, the undersigned corporate secretary of Queen’s

Choice Corporation, a domestic corporation duly
organized and existing under and by virtue of the laws
of the Republic of the Philippines, DO HEREBY CERTIFY
that at a regular meeting of the Board of Directors of
said corporation held at its principal office in Bohol,
Philippines on February 14, 2020, duly called for the
purpose, a quorum being present and acted
throughout, the following resolutions were unanimously
adopted, and are now in full force and effect, to wit:

Board Resolution 011-2019

 
"RESOLVED, as it is hereby RESOLVED that the Vice-
President, MR. FREDDY M. KING, is hereby authorized,
to bring, file, initiate and institute cases, complaints,
petitions and any and all actions for and in behalf of, and
to protect and vindicate the rights, of the corporation as
to any and all matters affecting its interests, properties,
business, good will, as well as to defend the corporation
in any and all actions that may be brought or filed
against it in any court, tribunal, administrative or quasi-
judicial body or forum, with full and special power and
authority

(a) To cause and authorize the preparation and filing

of all pleadings, motions, memoranda, affidavits,
and such other papers or documents as may be
needed in the course of the trial;
(b) To sign and execute all verifications and
certifications of non-forum shopping and other
procedural requirements for pleadings filed on
behalf of the Corporation for any and all cases
instituted or to be instituted by or against the
Corporation;
(c) To appear for and in behalf of the corporation in all
mediation proceedings and judicial dispute
resolution hearings;
(d) To enter into amicable settlements or
compromises;

11
 (e) To submit to alternative modes of dispute
resolution;
(f) To enter into stipulations or admissions of facts
and of documents;
(g) To exercise acts enumerated under Section 2, Rule
18 of the Revised Rules of Court; and
(h) To appoint and secure the services of a legal
counsel or attorney-at-law to represent the
corporation in the above-mentioned actions or
proceedings."

"HEREBY GIVING AND GRANTING unto the said person

full power and authority to do and perform all and every
act and thing whatsoever requisite and necessary to be
done in and about the premises and hereby ratifying and
confirming all that the said persons shall lawfully do or
cause to be done by virtue of this Authority."

IN WITNESS WHEREOF, I have hereunto affixed

my signature this 15 February 2020 at Tagbilaran City,
Bohol, Philippines.

Marcy Teodoro
Corporate Secretary

Attested to by:

Vico Sotto
President

SUBSCRIBED AND SWORN TO before me this 24th day

of March 2019, in Tagbilaran City, affiant exhibiting to
me his PASSPORT ID No. 8098765 issued on June 15,
2019.

Doc. No. 04 ATTY. MER YEN DERIA

Page No. 05
Notary Public
Book No. 05
Series of: 2020 Roll No. 09842

PTR No. 487/ 11-16-20

IBP No. 235/ 12-15-20

MCLE No. 325/ 04-14-20

12
Copy furnished
Thru Personal Service

ATTY. COVID ROSE USON

Counsel for the Plaintiff
Rm 501, 5th floor EH Building
Pelaez Street, Cebu City

SIRI BIN
Defendant
123 Sinigang St.
Mandaue City

SPS. PERLA AND ARIEL

456 Liempo and Lechon Manok St

Lapu-Lapu City

13