Title
Soquillo vs. Tortola
Case
G.R. No. 192450
Decision Date
Jul 23, 2012
Tortola purchased land in 1966; Coloso heirs later fraudulently obtained title and sold to Soquillo, who lost legal challenge.
ownership dispute
parcel of land
declaration of legal possessor
A

Case Summary (G.R. No. 192450)

Factual Background

On March 28, 1966, Lorenzo Coloso, Jr. (Coloso, Jr.) sold to Ramon Jamis (Jamis) a parcel later referred to as the disputed property. A notarized deed of conditional sale of an unregistered land was executed. Subsequently, on March 29, 1966, Jamis executed a notarized deed of definite sale over the disputed property in favor of respondent Tortola.

Tortola took possession, planted fruit-bearing trees, and built a residential lot on the land. He also paid realty taxes from 1975 to 2002. Although the receipts bore Coloso, Jr.’s name, the receipts showed changes in the corresponding tax declarations, with Tax Declaration Nos. 942443 reflecting Lorenzo Coloso, Jr. c/o Tortola, and 026083 bearing Tortola’s name. In 1977, Tortola moved his family to Bukidnon, but he left Godofredo Villaflores (Villaflores) as agent and caretaker of the disputed property.

In 1988, Tortola received correspondence from Atty. Rene Artemio Pacana, who represented Coloso, Jr.’s heirs and sought an explanation of how Tortola acquired the property. Tortola replied by attaching copies of the 1966 notarized deeds of conditional and definite sale. In 1992, Atty. Pacana again demanded documents to prove Coloso, Jr. disposed of the land in Tortola’s favor. Tortola reiterated his earlier reply and enclosed the same deeds.

Meanwhile, in September 1993, Coloso and the other heirs applied for a free patent with the Office of the Community Environment and Natural Resources (CENRO) of Cagayan de Oro City. A survey was conducted on July 15, 1994, and the land investigator reported that the heirs were in possession and were cultivating the disputed property, prompting a recommendation to issue a free patent. On December 14, 1994, OCT No. P20825 was issued in the names of the Heirs of Coloso, Jr.

On October 11, 2000, the heirs executed a notarized deed of absolute sale conveying the disputed property to Soquillo. In 2001, Soquillo filed with the Municipal Trial Court (MTC) of Alubijid an illegal detainer complaint (Civil Case No. 245) against Villaflores and his wife. Villaflores did not file an answer, and the MTC rendered a decision for Soquillo, leading to the ejection of Villaflores.

After discovering the ejectment, Tortola filed in 2002 a complaint before the Regional Trial Court (RTC), Branch 44, Initao, Misamis Oriental, against the heirs of Coloso, Soquillo, and the MTC, for annulment of title/sale/judgment with prayers for injunctive relief and damages. This complaint was docketed as Civil Case No. 2002-393, and it was the origin of the petition before the Supreme Court.

RTC Proceedings and Disposition

In its Decision dated September 18, 2007, the RTC ruled in favor of Tortola. It declared Tortola as the owner and legal possessor of the disputed property, ordered the annulment of the October 11, 2000 deed of sale between Coloso and Soquillo, directed the Register of Deeds of Misamis Oriental to annul and cancel OCT No. P-20825 issued to the heirs and to issue a transfer certificate of title in Tortola’s favor, and set aside the MTC’s decision in Civil Case No. 245. It also ordered Soquillo and the other defendants to pay P50,000.00 as moral damages, P10,000.00 as exemplary damages, and P20,000.00 as attorney’s fees.

The RTC anchored its findings on the supposed superiority of Tortola’s earlier acquisition through the 1966 deed of definite sale and on the RTC’s evaluation of registration effects. It reasoned that registration of Tortola’s instrument in 2002 constituted constructive notice to parties regarding the transfer of ownership and that Tortola’s long, continuous possession—through Villaflores as agent and caretaker—supported the claim that the heirs and the purchaser were not entitled to protections that attach to an innocent purchaser.

On laches, the RTC held that it could not prejudice Tortola’s lawful ownership and possession because Tortola did not show failure, neglect, or abandonment of his rights. On the indefeasibility of title, the RTC ruled that it did not apply where fraud attended the issuance of title. It adopted the view that a free patent issued over private land—described as belonging to Tortola—was null and void and produced no legal effects. The RTC further concluded that the OCT’s issuance lacked essential statutory requirements on publication, notice, survey, certification, and other mandatory steps, emphasizing that the application for free patent was filed only on September 21, 1993, even as a supposed notice would have been issued on September 20, 1993.

The RTC also treated Soquillo’s acquisition as tainted by his knowledge of Tortola’s possession. It found that Soquillo purchased despite knowledge that the heirs were not in actual possession and that Villaflores, as agent of Tortola, actually occupied and farmed the property at the material time. The RTC relied on the principle that knowledge of an unregistered sale is equivalent to registration. It likewise noted that Soquillo’s deed of sale was not registered until later and treated this lapse as reinforcing Tortola’s position. Finally, it found corroboration through testimony and certification from a barangay captain, attesting that Tortola’s occupancy was never questioned or molested until the illegal detainer proceedings initiated on October 18, 2001.

Issues Raised on Appeal

Soquillo appealed to the CA and contended that Tortola’s complaint stated no cause of action. He further argued that Tortola could not be treated as the proper party in interest because Tortola sought cancellation of a free patent, for which the State was allegedly the real party-in-interest. He also insisted that he was a purchaser in good faith and for value, and that the RTC’s orders reconveying the property and awarding damages were erroneous.

CA Ruling

In its Decision dated April 23, 2010, the CA denied Soquillo’s appeal and sustained the RTC. On the alleged failure to state a cause of action, the CA held that such a defense must be raised at the earliest possible time, including as a ground for a Motion to Dismiss under Rule 16 of the Revised Rules of Civil Procedure. It found that Soquillo did not raise the issue in his answer and did not file the appropriate motion.

On the claim of good faith, the CA ruled that Soquillo could not be considered a purchaser in good faith and for value. It reasoned that Arthur Coloso, as attorney-in-fact of the heirs of Lorenzo Boy Coloso, Jr., did not have the right to sell the disputed land to Soquillo because Arthur and the heirs had prior knowledge that the land was already occupied by Villaflores as agent of Tortola. The CA found that, despite such knowledge, the heirs applied for a free patent and falsely declared that they occupied and cultivated the land since 1985. The CA treated these false declarations as concealment of material facts amounting to fraud, which supported cancellation of the patent and title.

The CA invoked the principle that the indefeasibility of title cannot be used to shield title obtained through fraud, citing jurisprudence relied upon by the RTC regarding the concealment of material facts in free patent applications and the ipso facto cancellation consequence. It also used the “suspicious circumstances” rationale in its evaluation of good faith, emphasizing that the heirs’ lack of actual possession should have prompted Soquillo to investigate and go beyond the title. It thus held that neither the heirs’ nor Soquillo’s status as innocent purchasers could be recognized.

Finally, the CA sustained the RTC awards of moral and exemplary damages under Articles 21, 2219(10), and 2229 because fraud attended the procurement of OCT No. P-20825. It sustained attorney’s fees under Article 2208(1 and 2) on the ground that Tortola was compelled to litigate to protect his interest.

Supreme Court Review: Scope and Treatment of the Arguments

In the Supreme Court, Soquillo reiterated his arguments. Tortola did not file a comment because the court’s resolution requiring him to do so was returned with a notation of unknown or insufficient address. The Court held that the petition was bereft of merit.

The Court reiterated that under Rule 45, Rules of Court, petitions for review on certiorari raise questions of law, not questions of fact. It emphasized that it was not bound to reweigh evidence when the CA’s findings of fact were supported by substantial evidence and were in accord with the RTC’s findings. Applying these principles, the Court found that Soquillo raised factual questions already resolved by the lower courts. It declined to disturb the concurrent findings.

Real Party-in-Interest and the Character of the Action

Even assuming arguendo that the Court entertained the first issue concerning the proper party in interest, it held that there was still no ground to dismiss the complaint. The Court drew a distinction between an action for reversion and an action for declaration of nullity of free patents and certificates of title.

Relying on the cited jurisprudential doctrine, the Court held that the action filed by Tortola was not for reversion. It was instead for the declaration of nullity of the free patent and the certificate of title allegedly obtained through fraud and despite Tortola’s claimed pre-existing ownership. The Court ruled that such an action requires allegations of the plaintiff’s ownership prior to the issuance of the patent and the defendant’s fraud or mistake in obtaining the documents of title. In that situation, the real party in interest is not the State but the plaintiff who alleges a pre-existing right of ownership. Thus, Tortola was the real party in interest, and the complaint was properly filed in his name.

Lack of Good Faith and the Fraud-Tainted Title

On the second and third issues, the Court sustained the lower courts’ treatment of Tortola’s ownership claim and Soquillo’s lack of good faith. It held that Soquillo was not a purchaser in good faith. It po

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