Heirs of Susana de Guzman Tuazon vs. Court of Appeals

An action for quieting of title and cancellation of a fraudulently issued certificate of title, which incidentally questions an order of a co-equal court that issued the duplicate title, is a real action affecting title to real property within the exclusive original jurisdiction of the Regional Trial Court under Section 19(2) of Batas Pambansa Bilang 129, and does not constitute an annulment of judgment falling under the exclusive jurisdiction of the Court of Appeals.

The case involves a dispute over parcels of land in Barrio Dilang-Cainta, Rizal, originally covered by Original Certificate of Title (OCT) No. 4331 issued in the name of Nazario de Guzman. Following a chain of sales from de Guzman's heirs to various purchasers, the property eventually came under the ownership of private respondents' predecessors-in-interest, with new titles issued (TCT Nos. 304776-304779). The petitioners, heirs of Susana de Guzman Tuazon (daughter of Nazario de Guzman), secured a second owner's duplicate copy of the original OCT No. 4331 from the RTC after claiming the original was lost, despite the fact that the original title had already been cancelled years prior through legitimate sales.

• Nazario de Guzman was the original owner of parcels of land covered by OCT No. 4331 issued by the Register of Deeds of Rizal.
• On October 13, 1931, Nazario's surviving spouse Maria Gonzaga sold the land to Alejandro Santos, resulting in the cancellation of OCT No. 4331 and issuance of TCT No. 21839.
• The property underwent successive transfers: from Alejandro Santos to spouses Jacinto de la Cruz and Andrea de Leon (TCT No. 43164), then to Gabriel de la Cruz (TCT No. 44790), then to Isidro Victorio (TCT No. 44851).
• Isidro Victorio consolidated and subdivided the property, resulting in TCT Nos. 304776, 304777, 304778, and 304779, which were eventually sold to private respondents.
• On November 5, 1993, petitioners (heirs of Susana de Guzman Tuazon, daughter of Nazario de Guzman) filed LRC Case No. 93-1310 before RTC Branch 71, falsely claiming that the owner's duplicate copy of OCT No. 4331 was lost while in the possession of Susana de Guzman Tuazon.
• On August 17, 1994, RTC Branch 71 issued an order declaring the lost owner's duplicate copy of OCT No. 4331 null and void and directing the Register of Deeds to issue a new duplicate copy to petitioners.
• Private respondents discovered that petitioners were using the fraudulently procured duplicate OCT to claim ownership over the properties already titled in their names.
• Private respondents' petition alleged that the issuance of the new duplicate OCT was based on perjured testimony and deliberately concealed documentary evidence showing that OCT No. 4331 had already been cancelled, casting a cloud on their titles.

• The petition filed by private respondents in Civil Case No. 95-3577 is actually for the annulment of the August 17, 1994 Order of RTC Branch 71, not a genuine action for quieting of title.
• The RTC Branch 74 had no jurisdiction to entertain the petition because: (a) under the doctrine of judicial stability or non-interference, a co-equal court cannot review or annul the order of another co-equal court; and (b) jurisdiction to annul judgments of RTCs is exclusively lodged with the Court of Appeals under Section 9 of Batas Pambansa Bilang 129.
• The petition in LRC Case No. 93-1310 was for the issuance of a second owner's duplicate certificate under Section 109 of Presidential Decree No. 1529, not for reconstitution under Republic Act No. 26, and the order had already become final and executory.
• Private respondents have no cause of action against petitioners because OCT No. 4331 is still subsisting in the records of the Registry of Deeds, otherwise Branch 71 would not have ordered the issuance of a new duplicate copy.

• The petition in Civil Case No. 95-3577 is properly captioned as an action for "Quieting of Title and Nullification and Cancellation of Title," seeking to remove the cloud cast upon their titles by the fraudulently procured duplicate OCT.
• The action is a real action involving title to real property within the jurisdiction of the RTC under Section 19(2) of Batas Pambansa Bilang 129.
• The petition is not for annulment of judgment but for cancellation of a certificate of title issued without factual and legal basis, which is a distinct cause of action.
• The issuance of the new duplicate OCT was procured through fraud and perjury, as petitioners concealed the fact that the original OCT had already been cancelled years prior through legitimate sales transactions.

• Procedural Issues:
  • Whether RTC Branch 74 had jurisdiction to entertain Civil Case No. 95-3577 despite the doctrine of judicial stability and the exclusive jurisdiction of the Court of Appeals over annulment of judgments under Section 9 of Batas Pambansa Bilang 129.
  • Whether the petition for certiorari was the proper remedy to assail the denial of the motion to dismiss.
• Substantive Issues:
  • Whether the action filed by private respondents constitutes an action for quieting of title under Article 476 of the Civil Code or a disguised annulment of judgment.
  • Whether the petitioners' action in LRC Case No. 93-1310 constitutes reconstitution of title or mere replacement of a lost duplicate certificate.
  • Whether a certificate of title confers ownership or is merely evidence thereof.

• Procedural:
  • The Court held that the nature of an action is determined by the allegations in the complaint, not by the defendant's characterization. The allegations in Civil Case No. 95-3577 clearly constitute a cause of action for quieting of title and cancellation of title under Article 476 of the Civil Code, not an annulment of judgment under Section 9 of BP Blg. 129.
  • The Court ruled that RTC Branch 74 had jurisdiction over the case because it is a real action involving title to real property, falling under the exclusive original jurisdiction of RTCs pursuant to Section 19(2) of BP Blg. 129.
  • The Court rejected the application of the doctrine of judicial stability because Branch 74 was not reviewing or annulling the order of Branch 71; rather, it was exercising jurisdiction over a separate and distinct action for quieting of title where the order of Branch 71 was merely a factual predicate for the cloud on title.
  • The Court held that the Court of Appeals correctly dismissed the petition for certiorari because Branch 74 committed no grave abuse of discretion in denying the motion to dismiss.
• Substantive:
  • The Court ruled that an action for quieting of title is a common law remedy for removing any cloud upon or doubt with respect to title to real property. The private respondents properly invoked this remedy to secure an adjudication that the claim of title by petitioners (based on the fraudulently procured duplicate OCT) is invalid.
  • The Court held that regardless of whether LRC Case No. 93-1310 was for reconstitution under RA 26 or replacement of lost duplicate under Section 109 of PD 1529, such proceedings merely restore the instrument in its original form and do not pass upon the ownership of the land covered by the lost or destroyed title.
  • The Court affirmed the principle that registering land under the Torrens System does not create or vest title; registration is not a mode of acquiring ownership. A certificate of title is merely evidence of ownership or title over the particular property described therein.
  • The Court ruled that any question involving the issue of ownership must be threshed out in a separate suit, which is exactly what the private respondents did when they filed Civil Case No. 95-3577.

• Determination of Nature of Action by Allegations — The nature of an action and the jurisdiction of courts are determined by the allegations in the complaint, which must contain a concise statement of the ultimate facts constituting the plaintiff's cause of action and specify the relief sought. The court grants relief based on the allegations and facts proved, regardless of how the parties characterize the action.
• Quieting of Title — A common law remedy originating in equity jurisprudence for the removal of any cloud upon or doubt or uncertainty with respect to title to real property. Its purpose is to secure an adjudication that a claim of title adverse to that of the complainant is invalid, thereby freeing the complainant from any danger of hostile claim.
• Certificate of Title vs. Ownership — Registration under the Torrens System does not create or vest title because registration is not a mode of acquiring ownership. A certificate of title is merely evidence of ownership or title over the particular property described therein.
• Reconstitution of Title — A proceeding to restore a certificate of title which is lost or destroyed in its original form and condition. The purpose is merely to have the same reproduced after proper proceedings in the same form it was when the loss or destruction occurred, and does not pass upon the ownership of the land covered by the lost or destroyed title.
• Judicial Stability/Non-Interference — Courts of equal rank have no power to review or annul each other's decisions. However, this doctrine does not apply where a co-equal court merely exercises jurisdiction over a separate action where the order of another court is incidentally challenged as a factual predicate, rather than directly reviewing or annulling such order.

• "It is axiomatic that the allegations in the complaint determine the nature of the action, and consequently, the jurisdiction of the courts."
• "Quieting of title is a common law remedy for the removal of any cloud upon or doubt or uncertainty with respect to title to real property."
• "Registering land under the Torrens System does not create or vest title because registration is not a mode of acquiring ownership. A certificate of title is merely an evidence of ownership or title over the particular property described therein."
• "Precisely, in both species of reconstitution under Section 109 of P.D. No. 1529 and R.A. No. 26, the nature of the action denotes a restoration of the instrument which is supposed to have been lost or destroyed in its original form and condition... and does not pass upon the ownership of the land covered by the lost or destroyed title."

• Tolosa v. NLRC — Cited for the principle that the allegations in the complaint determine the nature of the action and jurisdiction of courts.
• Vda. De Daffon v. Court of Appeals — Cited for the requirement that a complaint must contain a concise statement of ultimate facts constituting the plaintiff's cause of action.
• Baricuatro, Jr. v. Court of Appeals — Cited for the definition and nature of an action for quieting of title as a common law remedy.
• Estate of the Late Mercedes Jacob v. Court of Appeals — Cited for the principle that courts grant relief based on allegations and facts proved, regardless of the parties' own misconstruction of the legal effect of such facts.
• Puzon v. Sta. Lucia Realty and Development, Inc. — Cited for the principle that reconstitution merely restores the instrument and does not pass upon ownership.
• Heirs of Clemente Ermac v. Heirs of Vicente Ermac — Cited for the principle that a certificate of title is merely evidence of ownership.

• Rule 45 of the Rules of Court — Procedural basis for the Petition for Review on Certiorari filed with the Supreme Court.
• Rule 65 of the Rules of Court — Procedural basis for the petition for certiorari filed with the Court of Appeals to annul the RTC order.
• Batas Pambansa Bilang 129, Section 9(2) — Grants the Court of Appeals exclusive original jurisdiction over actions for annulment of judgments of Regional Trial Courts; invoked by petitioners but held inapplicable because the action was for quieting of title, not annulment of judgment.
• Batas Pambansa Bilang 129, Section 19(2) — Grants Regional Trial Courts exclusive original jurisdiction over civil actions involving title to or possession of real property where the assessed value exceeds the statutory threshold; held applicable to the quieting of title action.
• Presidential Decree No. 1529 (Property Registration Decree), Section 109 — Governs the procedure for replacement of lost duplicate certificates of title; petitioners claimed their LRC petition was governed by this provision.
• Republic Act No. 26 — Provides the special procedure for reconstitution of Torrens certificates of title lost or destroyed; petitioners argued the LRC petition was for reconstitution under this law.
• Civil Code, Article 476 — Provides the statutory basis for an action to remove a cloud from title or to quiet title; held applicable to private respondents' action.