G.R. No. 178609 - Ney vs. Spouses Quijano

Petitioners: Manuel P. Ney and Romulo P. Ney are the registered owners of a residential lot located at 1648 Main Street, Paco, Manila, with an approximate area of 120 square meters covered by Transfer Certificate of Title (TCT) No. 122489.
Respondents: Spouses Celso P. Quijano and Mina N. Quijano, claim an interest in the same property.

A three-door apartment was constructed on the subject lot, with one unit allocated to each of the petitioners and one unit assigned for the respondents’ occupancy.
Respondents alleged that they are co-owners because, during the initial deed of sale, Celso Quijano’s name was inadvertently omitted. Consequently, TCT No. 122489 was issued solely in the names of Manuel and Romulo.
The respondents further contended that having paid part of the purchase price, they were entitled to a separate certificate of title covering their portion.

On October 8, 1999, the respondents filed a suit in the Regional Trial Court (RTC) of Manila for reconveyance, partition, and damages.
The respondents’ complaint asserted:

Their status as co-owners of the property.
The error in the deed of sale that excluded Celso Quijano’s name.
That petitioners refused to segregate the portion of the property attributable to the respondents, even after it was discovered that the entire lot was mortgaged with Metropolitan Bank & Trust Company.
That they had registered an adverse claim with the Register of Deeds to protect their interest.

Denial of the claim of co-ownership, contending that Celso Quijano was not a vendee.
Assertion that the respondents’ possession of the property was merely by tolerance.
Allegation that even if a cause of action existed, it was barred by prescription and/or laches.

The RTC dismissed the respondents’ complaint, upholding petitioners’ contentions about mere tolerance and the bar of prescription.
The decision granted petitioners’ counterclaim, ordering respondents to reimburse the expenses incurred in the litigation.

The CA reversed the RTC ruling on June 29, 2007, setting aside the RTC’s decision.
The CA found sufficient evidence in the respondents’ complaint and supporting documents—especially the Deed of Reconveyance—to conclude that:

Respondents are indeed co-owners of the subject property.
Their action for reconveyance, though framed as partition and delivery of title, effectively serves as one to quiet title given their actual possession and the nature of their claim.

Partitioning of the lot into three equal portions of 40 square meters each, with the respondents’ share being the portion where their house stands.
Reconveyance of a clean title to the respondents’ portion.
Surrender of the owner’s copy of TCT No. 122489 to the Register of Deeds for annotation of the respondents’ share.
Payment of attorney’s fees (P50,000.00) and costs of suit by petitioners.

Petitioners contended that the CA mistakenly treated the respondents’ action as an action for quieting of title rather than strictly for reconveyance and partition as pleaded.
They argued that the CA’s ruling substituted the relief sought in their complaint with a new remedy not originally indicated in the pleadings.
Petitioners also denied the validity of respondents’ claim of co-ownership, despite the evidence contained in the Deed of Reconveyance.

The CA underscored that the Deed of Reconveyance explicitly recognized the rights and participation of Celso P. Quijano, thereby establishing respondents’ co-ownership.
It held that, given the respondents’ actual possession and the nature of their claim, an action for reconveyance may assume the characteristics of a quieting title suit, which is generally imprescriptible.
The CA declared that the Torrens system does not ultimately vest ownership in the certificate of title but in the underlying, equitable rights evidenced by such documentary instruments.

Whether the action for reconveyance, accompanied by demands for partition and delivery of title, could be properly characterized as an action to quiet title.
Whether the respondents’ allegation of co-ownership, based on the omission of Celso Quijano’s name and evidenced by the Deed of Reconveyance, is valid and enforceable.
Whether the petitioners’ defense—that the respondents’ claim was barred by prescription and/or laches due to their status as mere tolerant possessors—holds merit in light of the respondents’ actual possession of the property.
Whether the CA erred in substituting the relief sought in the complaint with a remedy akin to a quieting of title action, effectively addressing issues not expressly raised in the pleadings.