Heirs of Teodora Loyola vs. Court of Appeals and Alicia R. Loyola

A petition for certiorari under Rule 65 is not the proper remedy to correct errors of judgment, including errors of procedure or mistakes in findings; the proper remedy is a petition for review under Rule 45. The Court of Appeals may, in the exercise of its discretion, resolve issues not assigned as errors where necessary for a just and complete resolution of the case, and in an action for reconveyance, fraud and the claimant’s title must be proved by clear and convincing evidence.

The dispute concerns a 4,419-square-meter parcel of land located in Lingatin, Morong, Bataan, known as Lot No. 780, Cad. 262 of the Morong Cadastre, formerly public agricultural land planted with nipa and coconut. Petitioners are the Heirs of Teodora Loyola, represented by Zosimo L. Mendoza, Sr., who trace their claim to Teodora. Respondent Alicia R. Loyola is the widow of Gabriel Loyola, a cousin of the heirs.

The controversy concerns a 4,419-square-meter parcel of land located in Lingatin, Morong, Bataan, known as Lot No. 780, Cad. 262 of the Morong Cadastre. The land was formerly public agricultural land planted with nipa and coconut. Petitioners are the Heirs of Teodora Loyola, represented by Zosimo L. Mendoza, Sr. They claimed that the property belonged to Teodora’s parents, who had possessed it since time immemorial; that Teodora inherited it upon their demise; and that when Teodora died in 1939, they inherited it from her. They asserted that they had since maintained open, continuous, exclusive, and notorious possession until the present. Respondent Alicia R. Loyola was the wife of their deceased cousin Gabriel Loyola, who, according to the Heirs, had been given permission to use part of Teodora’s property.

The Heirs alleged that Alicia obtained Free Patent No. (III-14) 001627 and Original Certificate of Title No. 1784 over the property through fraud and misrepresentation. On May 19, 2003, represented by Zosimo, they filed a Complaint for annulment of free patent and original certificate of title, reconveyance of ownership and possession, and damages against Alicia. In her Answer, Alicia denied the allegations of fraud and illegality in the registration of the free patent and issuance of the original certificate of title. She countered that the Complaint was barred by laches and prescription because the free patent was registered as early as December 1985.

At trial, the Heirs relied on testimonial evidence. Zosimo testified that he and his siblings inherited the property from their mother. He admitted that their cousin Gabriel had been given permission to use part of the property, but they never expected him or his wife Alicia to apply for a free patent and title over the entire property. Zosimo explained that they filed the Complaint only in 2003 because after Gabriel died, they tried for several years to peacefully recover the property from Alicia, but to no avail. Zosimo and his sister Paulina were also unaware of the condition of the property because they had been residing in the United States of America. Their neighbor Jose Perez corroborated Zosimo’s testimony that Teodora was known in town as the owner of the property. On cross-examination, however, Perez admitted that Teodora had a brother, Jose Loyola, the father of Gabriel and father-in-law of Alicia, and that he did not know if Teodora and her brother co-owned the property. The Heirs could present only a tax declaration issued in 1948 as documentary evidence of their claim. Although they maintained that one of the heirs, Raymunda, had religiously paid the real estate taxes, they could not present any receipts because these were allegedly lost.

Alicia denied all the allegations and maintained that she and Gabriel legally and regularly obtained the free patent and the original certificate of title. She claimed that the patent was granted after land officers investigated the land area, the improvements, the nature of her possession, and the taxes paid. After the issuance of the title, she continued to pay taxes and introduced improvements, including fruit trees, houses she and her husband had built, and the houses of their seven children. She maintained that petitioners never resided on the land because their ancestral house was located elsewhere, as shown by their non-payment of property taxes. On the absence of records in the PENRO and CENRO, she stated that Amado M. Villanueva of the Department of Natural Resources-Bataan testified that the Bureau of Lands did not endorse all its records to the Department of Environment and Natural Resources, and that he did not find anything illegal or irregular in the issuance of the free patent and title.

The Regional Trial Court did not rule on the merits. It dismissed the case without prejudice for failure to implead an indispensable party, finding that the successors of Guillermo Mendoza, Zosimo’s deceased brother, were not impleaded as party-plaintiffs. It held that the surviving legal heirs of Guillermo Mendoza were pro-indiviso co-owners of the property together with the rest of the heirs of Teodora and were indispensable parties without whom no final determination could be rendered. The Heirs moved for reconsideration, but the motion was denied. On appeal, the Court of Appeals upheld the dismissal, although it found that the Regional Trial Court erred in ruling that there was a failure to implead an indispensable party. It noted that the heirs of Guillermo Mendoza had identified themselves in the Complaint as representatives of Guillermo and had executed a Special Power of Attorney for Zosimo to represent them, thereby voluntarily submitting themselves to the trial court’s jurisdiction. Nevertheless, the Court of Appeals found the evidence insufficient to overcome the presumption of regularity of the free patent and original certificate of title issued to Alicia. It found that the Heirs failed to show that Teodora alone inherited the property when testimonies revealed that she had a brother; that they failed to prove they were legally related to or were the only heirs of Teodora; and that they did not even prove she had died and had the power to validly transmit rights over the property to them. The Court of Appeals thus dismissed the appeal and affirmed the trial court’s decision in toto. The Heirs’ motion for reconsideration was denied.

• Grave Abuse of Discretion; Scope of Appeal: Petitioners claimed that the Court of Appeals committed grave abuse of discretion amounting to lack or excess of jurisdiction in going beyond the issues raised on appeal. They asserted that their appeal focused only on the procedural aspect of jurisdiction over indispensable parties, and that the Court of Appeals should have ruled on this matter alone. They also claimed the Court of Appeals touched on the factual findings of the Regional Trial Court although these were not contested by respondent.
• Title and Ownership: Petitioners asserted that they convincingly proved their claim and allegations as to their rights over the land, and that the patent issued to respondent is null and void.
• Noncompliance with Free Patent Requirements: Petitioners averred that respondent did not comply with the requirements for the issuance of a free patent and original certificate of title. They cited certifications from the Land Registration Authority, the Register of Deeds of Bataan, the Provincial Environment and Natural Resources Office (PENRO), and the Central Environment and Natural Resources Office (CENRO) that they did not have the documents on the application in their respective offices.
• Possession and Acquisition by Operation of Law: Petitioners insisted that their witnesses’ testimonies show they have been in open, continuous, exclusive, and notorious possession and occupation of the property, and thus are deemed to have acquired the land by operation of law, without need of a certificate of title.
• Reply on Presumption of Regularity: In reply, petitioners reiterated that there is no record or document in the proper government agencies showing that respondent validly complied with the requirements for the issuance of the patent title, which effectively overcame the presumption of regularity accorded to its issuance.

• Laches and Prescription: Respondent countered in her Answer that the Complaint was barred by laches and prescription as the free patent was registered as early as December 1985.
• Ownership and Possession: Respondent stated that she and her predecessors-in-interest exclusively, adversely, and publicly possessed the property as owners since time immemorial.
• Regular Issuance of Patent: She claimed that the patent was granted after land officers investigated the land area, the improvements, the nature of her possession, and the taxes paid. After the issuance of the title, she continued to pay taxes and introduced improvements, including fruit trees, houses she and her husband built, and the houses of their seven children.
• Petitioners’ Non-Occupation: Respondent maintained that petitioners never resided on the land because petitioners’ ancestral house was located elsewhere, as shown by their non-payment of property taxes.
• Records and Regularity: On the claim that no record of the processing of the free patent application exists in the PENRO and CENRO, respondent stated that Amado M. Villanueva of the Department of Natural Resources-Bataan testified that the Bureau of Lands did not endorse all its records to the Department of Environment and Natural Resources, and he categorically stated that he did not find anything illegal or irregular in the issuance of the free patent and title.
• Failure to Prove Heirship and Ownership: Respondent asserted that the Court of Appeals was correct in finding that petitioners showed no documentary evidence that Teodora was the only owner of the property, and that they were her only heirs.

• Propriety of Remedy: Whether a petition for certiorari under Rule 65 is the proper remedy to assail the Court of Appeals’ Decision and Resolution affirming the dismissal of the Complaint.
• Scope of Appellate Review: Whether the Court of Appeals gravely abused its discretion when it went beyond the issue of dismissal and ruled on the sufficiency of petitioners’ evidence before the Regional Trial Court.
• Sufficiency of Evidence: Whether petitioners were able to sufficiently establish their title or ownership over the property.

• Propriety of Remedy: No. Certiorari under Rule 65 lies only for errors of jurisdiction, not errors of judgment; the proper remedy was a petition for review under Rule 45.
• Scope of Appellate Review: No. The Court of Appeals acted within its jurisdiction and did not gravely abuse its discretion; it may resolve matters not assigned as errors when necessary for a just and complete resolution of the case, and petitioners themselves prayed for a ruling on the merits.
• Sufficiency of Evidence: No. Petitioners failed to prove their title or ownership and respondent’s fraud by clear and convincing evidence; the tax declaration and certifications did not overcome the presumption of regularity of the free patent and original certificate of title.

• Propriety of Remedy: The Court first held that petitioners availed themselves of the wrong remedy. A special civil action for certiorari under Rule 65 will prosper only if grave abuse of discretion is manifested. For abuse to be grave, the power must be exercised in an arbitrary or despotic manner by reason of passion or personal hostility; the abuse must be so patent and gross as to amount to an evasion of a positive duty, or a virtual refusal to perform the duty enjoined or act in contemplation of law. There is grave abuse of discretion when the respondent acts in a capricious or whimsical manner in the exercise of judgment as to be equivalent to lack of jurisdiction. Even assuming the orders were erroneous, such error would merely be an error of judgment that cannot be remedied by certiorari. As long as the respondent acted with jurisdiction, any error in the exercise thereof is an error of judgment reviewable only by appeal. Certiorari under Rule 65 is designed for correction of errors of jurisdiction, not errors of judgment. The Court of Appeals had jurisdiction over the person and subject matter, and no showing of whimsical or capricious exercise was made; at most it may have committed an error of procedure. The petition ought to be dismissed. Nonetheless, to avoid further delay, the Court resolved whether the Court of Appeals erred in ruling on the merits.

• Scope of Appellate Review: As a general rule, only matters assigned as errors in the appeal may be resolved. Rule 51, Section 8 of the Rules of Court provides that no error not affecting jurisdiction over the subject matter or validity of the judgment appealed from or the proceedings therein will be considered unless stated in the assignment of errors, or closely related to or dependent on an assigned error and properly argued in the brief, save as the court may pass upon plain errors and clerical errors. The provision likewise states that the Court of Appeals may review errors not assigned but closely related to or dependent on an assigned error. The Court of Appeals is allowed discretion if it finds that their consideration is necessary in arriving at a complete and just resolution of the case. Jurisprudence has established exceptions, as enumerated in Catholic Bishop of Balanga vs. Court of Appeals: (1) grounds not assigned as errors but affecting jurisdiction over the subject matter; (2) matters not assigned as errors but evidently plain or clerical errors; (3) matters not assigned as errors but consideration of which is necessary in arriving at a just decision and complete resolution of the case or to serve the interest of justice or avoid piecemeal justice; (4) matters not specifically assigned as errors but raised in the trial court and matters of record having some bearing on the issue submitted which the parties failed to raise or which the lower court ignored; (5) matters not assigned as errors but closely related to an error assigned; and (6) matters not assigned as errors but upon which the determination of a question properly assigned is dependent. Thus, the Court of Appeals has discretion to consider the issue and address the matter where its ruling is necessary (a) to arrive at a just and complete resolution of the case; (b) to serve the interest of justice; or (c) to avoid dispensing piecemeal justice. This is consistent with its authority to review the totality of the controversy brought on appeal. Petitioners’ appeal primarily focused on the Regional Trial Court’s dismissal for failure to implead an indispensable party. Nonetheless, the Court of Appeals correctly ruled on whether petitioners were able to prove their claim; it had discretion to properly consider this separate issue to arrive at a complete resolution. Ordinarily, the case should have been remanded to the Regional Trial Court to make the proper factual determination, but due to judicial economy, or the goal to have cases prosecuted with the least cost to the parties, the Court of Appeals correctly reviewed the case in its entire context. Moreover, petitioners were incorrect that their appeal focused only on the procedural issue. In their Appellant’s Brief, one assigned error stated that the Regional Trial Court grievously erred when it abdicated from its role to rule on the merits, and the prayer asked the Court of Appeals to rule on both procedural and substantive issues, to consider the facts and evidence, and to render a decision based on the merits. Section 9 of Batas Pambansa Blg. 129 grants the Court of Appeals the power to receive evidence and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction. Petitioners cannot now claim that the Court of Appeals exceeded its jurisdiction in ruling on the merits after considering the facts and evidence just because the decision was unfavorable to them; they invoked its jurisdiction and are bound by it. Petitioners also asserted that respondent did not controvert the factual findings of the Regional Trial Court, so the Court of Appeals should have accorded respect to these findings. However, the Regional Trial Court did not actually make any findings on any matter in favor of any party. It limited its evaluation and discussion to the issue of failure to implead indispensable parties. It stated the various pieces of evidence presented by the parties but gave no particular weight to any of this and made no explicit conclusion as to which party was more entitled to the property. It was incorrect for petitioners to argue that the factual findings of the Regional Trial Court are binding when, in fact, these do not exist. In any case, the Court of Appeals has authority to reverse the factual findings of the Regional Trial Court if these are not in accord with evidence, as held in Gonzales vs. Court of Appeals.

• Sufficiency of Evidence: Petitioners insisted that respondent had no rights over the land and committed fraud. According to them, the Land Registration Authority, the Register of Deeds of Bataan, the PENRO, and the CENRO certified that the documents of respondent’s application could not be found in their respective offices, and these certifications show that respondent did not comply with the requirements for the issuance of a free patent or title. However, these certifications contain no explicit statement that respondent did not comply with the requirements for patent application. What was certified, rather, was that the requested documents were not to be found in their particular office. Some certifications even refer to other offices where the documents may be found. There is no categorical statement that the documents do not exist. Such certifications are not enough to prove respondent’s alleged fraud and irregularity. Fraud and irregularity are presupposed in an action for reconveyance of property. The party seeking to recover the property must prove, by clear and convincing evidence, that he or she is entitled to the property, and that the adverse party has committed fraud in obtaining his or her title. Allegations of fraud are not enough. Intentional acts to deceive and deprive another of his right, or in some manner injure him, must be specifically alleged and proved. In the absence of any proof, the complaint for reconveyance cannot be granted. Furthermore, the Court sustained the Court of Appeals’ finding that petitioners failed to adequately prove their claim over the property against respondent. The testimonies of their witnesses and the tax declaration issued in 1948 without tax receipts are not sufficient to overcome the presumption of validity of patents and titles as well as the presumption of regularity of the performance of official duties of the government offices responsible for the issuance. There is no evidence of any anomaly or irregularity in the proceedings that led to the registration of the land. Tax declarations and tax receipts are not conclusive evidence of ownership or of the right to possess land, in the absence of any other strong evidence to support them; they are merely indicia of a claim of ownership. Petitioners failed to show that Teodora Loyola is the only heir to the property. Testimonies revealed that she has a brother. Likewise, petitioners failed to show that they are the only heirs of Teodora Loyola. Failing to prove their title over the property, petitioners cannot rightfully claim that they have been fraudulently deprived of the property.

• Certiorari under Rule 65 vs. Appeal under Rule 45 — Certiorari is a special civil action to correct errors of jurisdiction, not errors of judgment. Errors of judgment include errors of procedure or mistakes in the court’s findings. Where a court has jurisdiction over the person and subject matter, all errors in the exercise of that jurisdiction are errors of judgment reviewable by appeal. Applied: the Heirs’ Rule 65 petition was dismissed; they should have filed a Rule 45 petition for review.
• Grave Abuse of Discretion — For certiorari to prosper, grave abuse must be manifested: the power must be exercised in an arbitrary or despotic manner by reason of passion or personal hostility, so patent and gross as to amount to evasion of a positive duty or virtual refusal to perform the duty enjoined or act in contemplation of law, or capricious/whimsical exercise equivalent to lack of jurisdiction. Applied: no such abuse was shown; the Court of Appeals acted within jurisdiction.
• Discretionary Review of Unassigned Errors — As a general rule, only assigned errors may be resolved, but the Court of Appeals may consider unassigned errors in enumerated exceptions, including where necessary to arrive at a just and complete resolution, serve the interest of justice, or avoid piecemeal justice. Applied: the Court of Appeals properly resolved the merits despite the appeal’s focus on the dismissal for failure to implead an indispensable party.
• Judicial Economy — The goal to have cases prosecuted with the least cost to the parties. Applied: instead of remanding for factual determination, the Court of Appeals correctly reviewed the case in its entire context.
• Action for Reconveyance; Fraud — Fraud and irregularity are presupposed in an action for reconveyance. The claimant must prove by clear and convincing evidence (1) entitlement to the property and (2) that the adverse party committed fraud in obtaining title. Intentional acts to deceive and deprive another of his right, or in some manner injure him, must be specifically alleged and proved. Applied: petitioners’ bare allegations and certifications did not establish fraud.
• Tax Declarations and Tax Receipts as Evidence — Tax declarations and tax receipts are not conclusive evidence of ownership or of the right to possess land in the absence of other strong evidence; they are merely indicia of a claim of ownership. Applied: the 1948 tax declaration without receipts did not prove petitioners’ ownership.
• Presumption of Validity of Patents and Titles; Presumption of Regularity — Patents and titles carry the presumption of validity, and government offices responsible for issuance enjoy the presumption of regularity in the performance of official duties. Applied: petitioners failed to overcome these presumptions; no anomaly or irregularity was shown.
• Court of Appeals’ Power to Resolve Factual Issues — Under Section 9 of Batas Pambansa Blg. 129, the Court of Appeals may try cases, conduct hearings, receive evidence, and perform any and all acts necessary to resolve factual issues raised in cases within its original and appellate jurisdiction. Applied: the Court of Appeals had authority to rule on the merits and review the evidence.
• Binding Effect of Trial Court Factual Findings — The Court of Appeals may reverse the trial court’s factual findings if they are not in accord with the evidence. Applied: the Regional Trial Court made no factual findings on the merits, so there were no binding findings to respect.

• "A special civil action for certiorari will prosper only if grave abuse of discretion is manifested. For an abuse to be grave the power must be exercised in an arbitrary or despotic manner by reason of passion or personal hostility. The abuse of discretion must be so patent and gross as to amount to an evasion of a positive duty, or a virtual refusal to perform the duty enjoined or act in contemplation of law. There is grave abuse of discretion when respondent acts in a capricious or whimsical manner in the exercise of its judgment as to be equivalent to lack of jurisdiction." — This passage states the controlling definition of grave abuse of discretion and supports the dismissal of the Rule 65 petition for failure to show an error of jurisdiction.
• "Certiorari under Rule 65 is a remedy designed for the correction of errors of jurisdiction and not errors of judgment." — This is the ratio for holding that petitioners availed themselves of the wrong remedy; the proper recourse was a petition for review under Rule 45.
• "Thus, the Court of Appeals has the discretion to consider the issue and address the matter where its ruling is necessary (a) to arrive at a just and complete resolution of the case; (b) to serve the interest of justice; or (c) to avoid dispensing piecemeal justice." — This passage defines the discretionary authority of the Court of Appeals to resolve matters not assigned as errors, which justified its ruling on the merits.
• "Tax declarations and tax receipts “are not conclusive evidence of ownership or of the right to possess land, in the absence of any other strong evidence to support them. . . . The tax receipts and tax declarations are merely indicia of a claim of ownership.”" — This passage states the evidentiary weight of tax declarations and receipts and explains why petitioners’ 1948 tax declaration did not establish ownership.

• Microsoft Corp. vs. Best Deal Computer Center Corp., 438 Phil. 408 (2002) — Cited for the definition of grave abuse of discretion and the rule that certiorari corrects errors of jurisdiction, not errors of judgment; the Court relied on it in dismissing the Rule 65 petition.
• Catholic Bishop of Balanga vs. Court of Appeals, 332 Phil. 206 (1996) — Cited for the exceptions allowing the Court of Appeals to consider errors not assigned on appeal, including matters necessary for a just and complete resolution of the case.
• Heirs of Durano, Sr. vs. Spouses Uy, 398 Phil. 125 (2000) — Cited for the Court of Appeals’ discretion to consider errors not assigned if necessary to arrive at a complete and just resolution.
• Gonzales vs. Court of Appeals, 179 Phil. 149 (1979) — Cited for the Court of Appeals’ authority to review, alter, and reverse the trial court’s factual findings where the evidence has been ignored, overlooked, or misinterpreted.
• Heirs of Brusas vs. Court of Appeals, 372 Phil. 47 (1999) — Cited for the requisites in an action for reconveyance, the need to prove fraud by clear and convincing evidence, and the rule that tax declarations and receipts are not conclusive proof of ownership.
• E.I. Dupont De Nemours and Co. vs. Francisco, G.R. No. 174379, August 31, 2016 — Cited for the definition of judicial economy as the goal to have cases prosecuted with the least cost to the parties.

• Rule 65, Rules of Court — Governs the special civil action for certiorari. Applied: the remedy is available only for errors of jurisdiction; because petitioners challenged errors of judgment, the petition was improper.
• Rule 45, Rules of Court — Governs petitions for review on certiorari. Applied: the Court held that petitioners should have filed a petition for review under Rule 45 instead of a Rule 65 petition.
• Rule 51, Section 8, Rules of Court — Provides that no error not affecting jurisdiction over the subject matter or validity of the judgment appealed from or the proceedings therein will be considered unless stated in the assignment of errors, or closely related to or dependent on an assigned error and properly argued in the brief, save as the court may pass upon plain and clerical errors. Applied: the Court of Appeals may review unassigned errors in the recognized exceptions, including those necessary for a just and complete resolution.
• Batas Pambansa Blg. 129, Section 9 — Grants the Court of Appeals the power to try cases and conduct hearings, receive evidence, and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction. Applied: the Court of Appeals had authority to consider the facts and evidence and rule on the merits.

Antonio T. Carpio (Chairperson), Diosdado M. Peralta, Jose Catral Mendoza, and Francis H. Jardeleza.