G.R. No. 196592 - Spouses Marano vs. Pryce Gases, Inc.

Case Summary (G.R. No. 196592)

Factual Background

The petitioners filed a free patent application on August 1, 1998 for a 9,074-square meter parcel in Damulaan, Albuera, Leyte, denominated Lot No. 4299. The grant followed and Original Certificate of Title No. P-43553 issued to the petitioners on December 17, 1998. The petitioners alleged that the respondent illegally entered the subject lot and constructed a building thereon in March 1998. The respondent filed a protest against the petitioners' free patent application on April 17, 1999. The Department of Environment and Natural Resources rendered a decision on December 29, 2000 recommending reversion proceedings against the petitioners; that decision became final and executory but no reversion proceedings were instituted.

Early Proceedings and Remand

The petitioners filed an ejectment complaint on December 29, 1998. The Municipal Trial Court of Albuera initially granted the petitioners' complaint, but the Regional Trial Court reversed that judgment on appeal. On further appeal, the Court of Appeals, in a decision dated January 11, 2002, remanded the case to the MTC for trial as a reivindicatory action under ordinary rules of civil procedure. The case was docketed with the MTC as Civil Case No. 158.

Parallel Actions and Subsequent Complaints

While the reivindicatory action proceeded, the petitioners filed a separate action to quiet title on October 28, 2002 in the Regional Trial Court, docketed as Civil Case No. B-2002-10-31. A month later the respondent filed a complaint for reconveyance, later amended to a complaint for cancellation of the petitioners' certificate of title, docketed as Civil Case No. B-2002-11-32. The petitioners moved to dismiss the respondent's complaint on the ground of litis pendentia in view of the pending reivindicatory action with the MTC. The RTC denied the petitioners' motions by resolution dated March 6, 2006, and denied reconsideration by order dated June 8, 2006.

Proceedings Before the Court of Appeals

The petitioners filed a petition for certiorari with the Court of Appeals contesting the RTC's March 6, 2006 resolution. The CA, in CA-G.R. CEB-SP No. 02025, rendered a decision on December 14, 2010 affirming the RTC's denial of the petitioners' motion to dismiss and held that no litis pendentia existed between the reivindicatory action pending before the MTC and the respondent's amended complaint for cancellation of certificate of title filed with the RTC. The petitioners' motion for reconsideration of the CA decision was denied in a resolution dated March 18, 2011.

Later Trial Outcome in the MTC

In the reivindicatory action tried before the MTC, that court rendered a decision on June 18, 2010 ruling in the respondent's favor. The MTC declared the respondent owner of the subject lot and entitled to possession. That judgment was appealed to the RTC.

Issue Presented to the Supreme Court

The central issue presented to the Supreme Court was whether the respondent's complaint for cancellation of the petitioners' certificate of title should be dismissed or otherwise stayed on the ground of litis pendentia because the validity of the same Torrens title was already being litigated in the reivindicatory action pending appeal before the RTC.

Petitioners' Contentions

The petitioners contended that the RTC should not entertain the respondent's complaint for cancellation of title because the validity of their Torrens title was already the subject of a full trial in the MTC and was pending on appeal before the RTC in the reivindicatory action. The petitioners argued that allowing a separate full-blown trial on the same core issue would effectively nullify the MTC's adjudication and invite conflicting judgments.

Respondent's Position and Procedural Posture

The respondent proceeded by filing a direct action to challenge the validity of the petitioners' Torrens title. The respondent relied on the rule that an attack on the validity of a certificate of title must be by a direct proceeding and not by collateral attack, and thus maintained that the cancellation complaint was a proper remedy under the law and should be allowed to proceed.

Court of Appeals Ruling

The Court of Appeals, in its decision dated December 14, 2010, affirmed the Regional Trial Court's resolution denying the petitioners' motion to dismiss and concluded that there was no litis pendentia between the pending reivindicatory action and the cancellation of certificate of title case. The CA thereby permitted the cancellation action to proceed independently in the RTC.

Supreme Court Ruling

The Supreme Court found merit in the petition and reversed and set aside the CA decision dated December 14, 2010 and its March 18, 2011 resolution denying reconsideration. The Court ordered the action for cancellation of the petitioners' certificate of title in Civil Case No. B-2002-11-32 consolidated with the reivindicatory action in Civil Case No. 158 for the orderly dispensation of justice.

Legal Basis and Reasoning

The Court reiterated that three principal remedies exist to recover possession of real property: actions for forcible entry or unlawful detainer (accion interdictal), an accion publiciana, and an accion reivindicatoria. The Court emphasized that an accion reivindicatoria is a plenary action that includes a claim of title and thus requires inquiry into the circumstances of title acquisition. Because the validity of the petitioners' Torrens title was the crucial issue in both the reivindicatory action and the cancellation proceeding, the Court held consolidation to be the proper remedy to avoid conflicting decisions and to secure the orderly administration of justice. The Court invoked the consolidation power found in Section 1, Rule 31, Rules of Court, observing

Case Syllabus (G.R. No. 196592)

Parties and Procedural Posture

Spouses Juvy Marano and Maria Luisa G. Marano filed a petition for review on certiorari under Rule 45 assailing the Court of Appeals decision dated December 14, 2010 and its March 18, 2011 resolution.
Pryce Gases, Incorporated opposed the petition and was the respondent in the underlying ejectment, reivindicatory, quieting, and cancellation proceedings.
The underlying litigation involved proceedings before the Municipal Trial Court, the Regional Trial Court, the Court of Appeals, and ultimately the Supreme Court.
The Supreme Court was asked to determine whether the CA erred in refusing to dismiss or otherwise resolve the respondent's cancellation action in view of a pending reivindicatory action.

Key Factual Allegations

The petitioners filed a free patent application on August 1, 1998 for a 9,074-square meter parcel designated as Lot No. 4299 in Damulaan, Albuera, Leyte.
An Original Certificate of Title No. P-43553 was issued in the petitioners' names on December 17, 1998.
The petitioners filed an ejectment complaint on December 29, 1998 alleging that the respondent illegally entered and constructed a building on the subject lot in March 1998.
The MTC granted the petitioners' ejectment complaint, but the RTC reversed, and the CA remanded the matter to the MTC for trial as a reivindicatory action on January 11, 2002.
The respondent protested the petitioners' free patent application on April 17, 1999, and the Department of Environment and Natural Resources issued a December 29, 2000 decision recommending reversion, which became final and executory, although no reversion proceedings were actually instituted.
The petitioners filed a quieting action on October 28, 2002, while the respondent filed a reconveyance complaint a month later and subsequently amended it to seek cancellation of the petitioners' certificate of title.
The MTC later conducted a full trial and, in a decision dated June 18, 2010, declared the respondent the owner of the subject lot and entitled to possession.

Procedural History

The MTC decision in the original ejectment/reivindicatory proceeding issued on June 4, 1999, and the RTC issued its reversal on August 30, 1999.
The CA remanded the ejectment case to the MTC as a reivindicatory action in a January 11, 2002 decision.
The respondent's reconveyance then cancellation action was docketed as Civil Case No. B-2002-11-32 in the RTC, and the petitioners sought dismissal on grounds of litis pendentia.
The RTC denied the petitioners' motion to dismiss and denied reconsideration in a March 6, 2006 resolution and subsequent order dated June 8, 2006.
The petitioners filed a petition for certiorari with the CA (docketed CA-G.R. CEB-SP No. 02025), which affirmed the RTC on December 14, 2010 and denied reconsideration on March 18, 2011.
The petitioners filed the present Rule 45 petition with the Supreme Court challenging the CA&