Case Summary (G.R. No. 178609)
Procedural History
Respondents filed suit for reconveyance, partition, and damages on October 8, 1999, in the Regional Trial Court (RTC) of Manila. The RTC rendered a decision dismissing the complaint and awarding petitioners attorney’s fees. The Court of Appeals (CA) reversed on June 29, 2007, declaring the Quijanos co-owners of one-third of the lot and ordering partition and reconveyance. Petitioners sought relief in the Supreme Court; the Supreme Court denied the petition and affirmed the CA decision.
Core Facts Alleged by Respondents
Respondents alleged that Celso Quijano was a purchaser and paid part of the purchase price under an agreement showing an agreed price of P50,000 (P40,000 down, P10,000 balance), but his name was omitted in the executed Deed of Absolute Sale and therefore omitted from TCT No. 122489. They discovered the entire lot was mortgaged to Metropolitan Bank & Trust Company and registered an adverse claim. Respondents asserted that petitioners refused to segregate or reconvey their one-third share and that there was a Deed of Reconveyance allegedly executed by petitioners.
Petitioners’ Pleadings and Defense
Petitioners denied Celso’s status as a vendee and contended that the Quijanos’ possession was by mere tolerance, that no co-ownership existed, and that any cause of action was barred by prescription and/or laches. Petitioners sought dismissal and prevailed at the RTC.
RTC Ruling
The RTC dismissed the complaint, finding respondents’ documentary and testimonial evidence unreliable, concluding possession by respondents was only by tolerance, and ruling that any cause of action had prescribed. The RTC sustained petitioners’ counterclaim and ordered respondents to pay reduced attorney’s fees and costs.
Court of Appeals Ruling
The CA reversed the RTC. It found sufficient evidence the Quijanos were co-owners whose names were erroneously omitted in the deed of sale and title. The CA characterized the action as one in the nature of quieting of title (rendering it imprescriptible in the circumstances), declared the Quijanos co-owners to the extent of one-third (the portion where their house stood), and ordered partition into three equal portions (40 sq.m. each), reconveyance of the respondents’ portion (including surrender and annotation on the TCT), and payment of reasonable attorney’s fees and costs.
Issue Presented to the Supreme Court
Key issues included whether the CA erred in treating an action for reconveyance as an action for quieting of title (i.e., whether the CA decided an issue outside the pleadings), whether the action was barred by prescription or laches, and whether Celso Quijano was a co-owner entitled to reconveyance.
Supreme Court’s Analysis — Characterization of the Action and Prescription
The Supreme Court upheld the CA’s characterization. It explained that reconveyance (seeking transfer of property wrongfully registered by another) is distinct from quieting of title (removal of a cloud on title). Nonetheless, where the plaintiff claiming rightful ownership remains in actual possession, a reconveyance claim is in substance a suit to quiet title and is not subject to the ten-year prescription applicable when the claimant is not in possession. The Court relied on its prior rulings (Mendizabel v. Apao and Lasquite v. Victory Hills, Inc.) that a possessor who claims ownership may wait until possession is disturbed or title attacked and thereby enjoys a continuing, imprescriptible right to seek equitable relief to determine adverse claims. Consequently, treating respondents’ reconveyance action as in the nature of quieting of title was not reversible error.
Supreme Court’s Analysis — Co-ownership and Deed of Reconveyance
The Supreme Court found the Deed of Reconveyance dispositive. The Deed expressly acknowledged Celso Quijano’s rights as co-owner of one-third of the lot and purported to transfer and convey that one-third to the Quijanos. Petitioners admitted the signatures on the Deed of Reconveyance and did not deny its execution. Given this voluntary reconveyance by petitioners and the surrounding facts, the CA correctly confirmed and enforced the Deed and adjudged the respondents’ co-ownership despite petitioners’ possession and nominal title under the Torrens system.
Legal Principles Applied
- Reconveyance: an action to
Case Syllabus (G.R. No. 178609)
Procedural History
- Petitioners Manuel P. Ney and Romulo P. Ney filed a petition for review in the Supreme Court assailing the Court of Appeals (CA) Decision in CA-G.R. No. CV. 86047 dated June 29, 2007, which reversed the Regional Trial Court (RTC), Branch 45, Manila, Decision of August 25, 2005.
- Respondents originally filed suit in the RTC of Manila on October 8, 1999 for reconveyance, partition and damages against petitioners.
- The RTC, after trial, dismissed respondents’ complaint and granted petitioners’ counterclaim ordering respondents to pay petitioners P50,000.00 for attorney’s fees and costs (August 25, 2005 Decision).
- The CA reversed the RTC, declared respondents co-owners to the extent of one-third (1/3) corresponding to the portion where their house stands, ordered partition into three equal portions of forty (40) square meters each, reconveyance of respondents’ portion and annotation of respondents’ share on TCT No. 122489, and awarded respondents attorney’s fees and costs of P50,000.00 (June 29, 2007 Decision).
- The Supreme Court (Nachura, J.) denied the petition and affirmed the CA Decision. Cost was imposed against petitioners. The judgment was rendered in G.R. No. 178609, August 4, 2010.
Facts
- Petitioners are the registered owners of a residential lot located at 1648 Main Street, Paco, Manila, with an area of approximately 120 square meters, covered by Transfer Certificate of Title (TCT) No. 122489 (Exhibit “C”).
- A three-door apartment was constructed on the lot: one door/unit for Manuel, one for Romulo, and one for petitioners’ sister Mina N. Quijano and her husband Celso P. Quijano (respondents).
- Respondents allege they are co-owners, having paid part of the purchase price; Celso’s name was allegedly omitted from the deed of sale and consequently from TCT No. 122489.
- Respondents sought segregation of their allotted portion but petitioners refused; respondents later discovered the entire property was mortgaged with Metropolitan Bank & Trust Company and registered an adverse claim with the Register of Deeds.
- Respondents assert they were constrained to file the reconveyance, partition and damages complaint as a result.
Respondents’ Allegations and Reliefs in the Complaint
- Respondents alleged co-ownership of one-third (1/3) pro indiviso of the lot where their house stands, covered by TCT No. 122489.
- They alleged an agreement of sale showing a purchase price of P50,000.00 with P40,000.00 down payment and balance P10,000.00 due July 14, 1976, and that Celso paid P5,000.00 on the due date.
- They alleged the Deed of Absolute Sale mistakenly reflected only P20,000.00 and omitted Celso’s name, and that a Certification from vendor Luz J. Lim confirmed the true selling price was P50,000.00 and that the vendees were Manuel, Romulo and Celso.
- They alleged that in March 1991 they requested segregation/partition and that petitioners executed a Deed of Reconveyance agreeing to reconvey their one-third share, but the Register of Deeds rejected the reconveyance because the owner’s copy could not be presented.
- They alleged that the whole property was mortgaged with Metrobank and that they registered an adverse claim; the Register of Deeds requested petitioners to surrender the owner’s duplicate of TCT No. 122489 for annotation, but petitioners refused.
- In their prayer, respondents sought, inter alia:
- surrender of the owner’s copy of TCT No. 122489 to the Court or an order directing the Register of Deeds to issue respondents a co-owner’s copy;
- partition of the lot into equal shares of forty (40) square meters more or less and awarding and reconveying to respondents the portion where their house is located;
- ordering petitioners to settle obligations to the mortgagee bank, if any, and reconvey to respondents a clean title;
- moral damages of P100,000.00, exemplary damages of P100,000.00, attorney’s fees of P50,000.00 and costs; and other just and equitable reliefs.
Petitioners’ Answer and Defenses
- Petitioners denied respondents’ allegation of co-ownership and asserted Celso was not a vendee of the subject lot; thus his name did not appear on the title.
- Petitioners contended respondents could not maintain the action because they possessed by mere tolerance.
- Petitioners further asserted that any cause of action respondents might have was barred by prescription and/or laches.
- Petitioners prayed for dismissal of the complaint.
- Petitioners did not deny the signatures on the Deed of Reconveyance and admitted the signatures appearing therein (transcript of stenographic notes, February 4, 2003).
RTC Decision (Branch 45, Manila) — August 25, 2005
- The RTC dismissed respondents’ complaint after trial.
- The RTC rejected respondents’ claim of co-ownership and declared respondents’ documentary and testimonial evidence unreliable.
- The RTC found respondents possessed part of the property by mere tolerance and held that any cause of action had prescribed; consequently respondents could no longer demand segregation or reconveyance.
- The RTC granted petitioners’ counterclaim and ordered respondents to pay petitioners a reduced amount of P50,000.00 as attorney’s fees and the costs of suit.
- The dispositive portion of the