Title
Guizano vs. Veneracion
Case
G.R. No. 191128
Decision Date
Sep 12, 2012
Dispute over a 656 sqm. land sold by Lucia Santos, later found part of Emmanuel Guizano’s registered property; SC dismissed reconveyance suit, citing improper party and indefeasible title.
land ownership dispute
complaint for reconveyance
registered owner
A

Case Summary (G.R. No. 191128)

Factual Background

The records, as summarized from the RTC and CA decisions, showed that the case concerned land inherited by Lucia Santos and her brother Nicasio Bernardino from their mother. Nicasio sold his share, Lot No. 431 with an area of 6,445 square meters, to Dr. Eugenio and his wife Carmencita. The property was registered on February 22, 1985 under TCT No. RT-18578 in the name of Emmanuel Guizano, the son of the Guizano spouses.

For their part, Lucia and her husband sold a 656 square meter portion of their land in September 1995 to Reynaldo (the “subject property” in the complaint). Since the Santoses reportedly had no documentary proof of ownership over the subject property, Reynaldo relied on their representation that Lucia had inherited the land from her parents. Before the sale, Reynaldo’s father, Dr. Veneracion, hired a geodetic engineer to segregate the land being purchased from the land registered under Emmanuel’s title.

During the survey, Domingo Santos (a son of the Santoses), Nicasio, and Carmencita were present. Nicasio pointed out the boundaries of his former lot and Lucia’s portion. Carmencita also pointed out the boundaries of her property, allegedly marked by specific natural landmarks. The geodetic engineer prepared a sketch plan based on the survey, and the individuals present, including Carmencita, affixed their signatures on it.

As a further precaution when the parties executed the deed of sale (“Bilihan ng Tuluyan”) in September 1995, the parties caused Carmencita to affix her signature to the deed of sale under the heading “Walang Tutol,” indicating no objection to the sale. After the sale, Carmencita allegedly discovered that the property sold to Reynaldo was actually part of the property already registered in Emmanuel’s name under TCT No. RT-18578 issued on February 22, 1985. She therefore placed the word “HOLD” on the subdivision plan signed by the geodetic engineer.

On June 14, 1999, Reynaldo filed a complaint against Carmencita and the Santos spouses, praying that Carmencita, as owner or as the lawful attorney-in-fact of her son Emmanuel, be ordered to reconvey the 656 square meter parcel to him. The complaint was docketed as Civil Case No. 623-M-99 and raffled to Branch 81 of the RTC of Malolos, Bulacan. Carmencita’s answer contended that the complaint had no merit because the property sold to Reynaldo formed part of the property owned and registered in Emmanuel’s name under TCT No. RT-18578, and therefore Reynaldo had no cause of action against her.

Trial Court Proceedings

On July 24, 2002, the RTC dismissed the complaint. The RTC held that while the sale between the Santoses and Reynaldo was established, there was no proof that the Santoses had the legal right to sell the lot. It emphasized that the property sold to Reynaldo was already covered by TCT No. RT-18578 registered in Emmanuel’s name. It also found that the Santoses presented no evidence of ownership, noting among others that they had never had the property surveyed, never paid real estate taxes on it, and never declared it for taxation.

The RTC further ruled that Emmanuel’s title had already attained the status of indefeasibility when Reynaldo filed the action. Even if reconveyance had not yet prescribed because Reynaldo remained in possession, the RTC held that Reynaldo was nevertheless guilty of laches for filing the action fourteen years after Emmanuel’s title had been issued.

Appellate Review by the Court of Appeals

On July 31, 2007, the CA reversed the RTC. It ordered Carmencita to reconvey and execute an acknowledgement/reconveyance deed over the 656 square meter subject property in favor of Reynaldo, declared the Bilihan Tuluyan as valid and legal, and required the Register of Deeds of Bulacan to register the deed as an encumbrance on TCT No. 18578. In the alternative, if the remedies were no longer possible, the CA directed Carmencita and Emmanuel to pay the fair market value of the land, and it also awarded attorneys’ fees and costs.

In reaching this result, the CA relied on Carmencita’s alleged acts and representations. It observed that Carmencita had told Dr. Veneracion that the small portion immediately adjacent to his property did not belong to her but to Lucia. It further noted that because no technical documents were shown for the respective shares of Nicasio and Lucia, Lucia and her son had built an earthen dike and planted trees to demarcate the line, and that this boundary was later respected even by Carmencita when her family bought the property from Nicasio. The CA also pointed out Carmencita’s participation in the survey, her pointing out of her lot boundaries, and her signature on the deed of sale to show conformity to the transaction.

From these acts and representations, the CA concluded that Carmencita believed the subject property belonged to the Santoses and that, from her conduct, she was estopped from claiming ownership over it.

Petitioners’ Arguments

In the petition, petitioners challenged the CA ruling. They argued that because Emmanuel’s title had already become indefeasible, it could no longer be disturbed on the ground of actual fraud. They also contended that reconveyance was unavailable against Carmencita because laches had already set in when the Santoses and Reynaldo’s predecessors slept on their right to assert ownership. Finally, they argued that the complaint should have been dismissed because it was directed against Carmencita, who allegedly was not the real party-in-interest, since she was not the registered owner of the land from which the 656 square meter portion was taken. Petitioners maintained that Emmanuel, the registered owner, was not even impleaded.

Respondent’s Arguments

Respondent opposed the petition, asserting primarily that it should be denied because it raised a question of fact—specifically, who owned the subject property. He also insisted that petitioners were bound by Carmencita’s acts connected with the subject property and that, accordingly, petitioners were estopped from questioning his right.

The Court’s Ruling: Dismissal for Failure to Implead the Real Party-in-Interest

The Court granted the petition and reversed the CA. It held that the lower courts erred in overlooking a basic but fundamental issue Carmencita had timely raised: that the complaint stated no cause of action against her.

The Court treated the material point as undisputed: the subject property Reynaldo purchased from the Santoses was part of the land registered in Emmanuel’s name under TCT No. RT-18578. The conflict, in the Court’s view, stemmed from Carmencita’s acts and representations, which allegedly showed her recognition that the subject property was not part of Emmanuel’s property but belonged to the Santoses and was later purchased by Reynaldo. The Court nonetheless found that the dispositive procedural defect was the identity of the proper party against whom reconveyance should be sought.

The Court explained the nature of an action for reconveyance under the Torrens system. It held that reconveyance is an action available to one whose property has been wrongfully registered in another’s name. Although it is a real action, it is also an action in personam in the sense that it binds particular individuals only, even if the relief concerns the right to an intangible thing. Consequently, a reconveyance judgment binds only parties properly impleaded. The Court emphasized the controlling principle that every action must be prosecuted or defended in the name of the real party-in-interest, as set out in Section 2, Rule 3 of the Rules of Court. It further held that a decision rendered against a person who is not a real party-in-interest cannot be executed, and a complaint filed against such a person should be dismissed for failure to state a cause of action.

Applying these rules, the Court found that Reynaldo filed his complaint to compel Carmencita to execute a Deed of Acknowledgement/Reconveyance. The Court noted that Reynaldo filed the action only against Carmencita despite his knowledge that the subject property was registered under Emmanuel’s title. The Court cited the allegations in the complaint itself, where Reynaldo stated that Carmencita, in refusing to recognize the sale made by the Santoses to Reynaldo, claimed the parcel as her own and that she had refused to execute the necessary deed or cause execution by the nominal owner, Emmanuel, to “set the record straight and quiet title.”

The Court underscored an important inconsistency. Reynaldo’s own allegations acknowledged that the subject property was registered under TCT No. RT-18578 in Emmanuel’s name alone, and Carmencita’s name did not appear on the title. Reynaldo’s theory that Carmencita was the owner and Emmanuel the nominal owner did not change the evidentiary character of a Torrens certificate. The Court held that a Torrens certificate is the best evidence of ownership of registered land and serves as evidence of indefeasible title in favor of the person whose name appears on the title. Absent evidence to the contrary, Emmanuel was therefore the real party-in-interest in an action that sought to challenge ownership of the registered property.

The Court also found that Reynaldo’s failure to implead Emmanuel was untenable because Carmencita repeatedly raised this defect during the proceedings at the RTC level, including in her answer and pre-trial brief. The Court rejected the lower courts’ view of Carmencita as Emmanuel’s attorney-in-fact for purposes of real party-in-interest. It held that the records did not show Emmanuel had authorized Carmencita to represent him in the action. Even assuming she was authorized as attorney-in-fact, the Court ruled that an attorney-in-fact is not the real party-in-interest and cannot bring an action in her own name for an undisclosed principal. It further stressed that where an agent acts in his own name for the benefit of an undisclosed principal, the principal generally shou

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