Montero vs. Montero

An action for declaration of nullity of documents, cancellation of certificate of title, and reconveyance is an action involving title to or possession of real property, the jurisdiction over which is determined by the assessed value of the property—not by whether the action is capable of pecuniary estimation—where the ultimate objective of the plaintiff is to establish and confirm his right of ownership and possession over the property.

Dominga Taeza was the second legal wife of Jose Montero. She owned a parcel of land in Pilar, Abra covered by Free Patent No. 27941, issued on January 11, 1939. Upon her death in 1975, possession of the land passed to her successors-in-interest by operation of law. Petitioner Elmer Montero is a surviving heir of Dominga's son Alfredo Montero. Respondent Santiago Montero, Jr. is the son of Santiago Montero, Sr., who was Jose Montero's son by his first marriage and not related by blood to Dominga. The dispute arose when respondent Santiago obtained an Affidavit of Adjudication and caused the cancellation of Dominga's tax declaration and the issuance of a new OCT in his name, prompting petitioner to seek nullification and reconveyance.

Dominga Taeza was the second legal wife of Jose Montero. Their children were Alfredo, Pacita, Marcela, and Ernesto, and Dominga had one illegitimate son, Federico Taeza. Petitioner Elmer Montero is a surviving heir of Alfredo Montero. Santiago Montero, Sr. was Jose Montero's son by his first marriage, making respondent Santiago Montero, Jr. a grandson of Jose Montero but not related by blood to Dominga. Dominga owned a parcel of land in Pilar, Abra, over which Free Patent No. 27941 was issued in her name on January 11, 1939. Various tax declarations in Dominga's name showed she was in actual possession of the land. Upon Dominga's death in 1975, her actual, exclusive, open, continuous, and notorious possession of the land was transferred to her successors-in-interest by operation of law.

Sometime in 1993, when petitioner Elmer was about to pay the real estate tax on the property, he was informed by the Assessors' Office of Pilar, Abra that the property had already been transferred to the name of respondent Santiago by virtue of an Affidavit of Adjudication dated June 13, 1989. In that affidavit, respondent Santiago misrepresented himself as the only heir of his father Santiago Montero, Sr., who was not related by blood to Dominga but was the son of Jose Montero by his first marriage. By virtue of the Affidavit of Adjudication, Tax Declaration No. 417 in Dominga's name was cancelled and replaced by Tax Declaration No. 5289 in respondent Santiago's name, and OCT No. P-14452 was issued in the latter's name.

Sometime in 2002, respondents Santiago and Charlie threatened Ernesto Montero with physical harm to acquire possession of a residential portion of the land. Respondent Charlie started dumping construction materials over Ernesto's pleas, while respondent Santiago was renovating his house located within the residential area of the land. The respondents refused to reconvey the property to the surviving heirs of Dominga.

Petitioner Elmer filed a Complaint for Declaration of Nullity of Affidavit of Adjudication, Cancellation of Tax Declaration No. 5289 and OCT No. P-14452, Reconveyance, and Damages with Prayer for Preliminary Injunction before the RTC of Bangued, Branch 2, docketed as Civil Case No. 3107. The complaint alleged that the assessed value of the property was ₱3,010.00. Respondents moved to dismiss on the grounds of lack of jurisdiction and collateral attack on a Torrens title, but the RTC denied the motion, finding the cause of action incapable of pecuniary estimation and a direct attack on the title.

• Jurisdiction — Incapable of Pecuniary Estimation: Petitioner argued that the principal action is incapable of pecuniary estimation because the main objective of the suit is the cancellation of respondents' title (OCT No. P-14452), thus falling within the jurisdiction of the RTC.
• Incidental Reliefs: Petitioner maintained that the other reliefs sought in the Complaint, including compelling respondents to recognize and respect his right of ownership, are merely incidental and largely depend on the result of the main action for cancellation of the OCT.
• Direct Attack on Title: Petitioner argued that his attack against the validity of OCT No. P-14452 was direct and not collateral, as the issuance of the OCT was void ab initio.

• Jurisdiction — Assessed Value Below Threshold: Respondents argued that under Section 19 of BP 129, the RTC has no jurisdiction over the subject matter because the assessed value of the property (₱3,010.00) does not exceed ₱20,000.00, placing exclusive original jurisdiction with the Municipal Trial Court.
• Collateral Attack on Torrens Title: Respondents contended that Section 48 of PD 1529 prohibits collateral attacks on a Torrens title by reason of its indefeasibility, and that petitioner's action to annul the title is incidental to his attempt to defend ownership and possession, thus constituting a collateral attack on OCT No. P-14452.

• Jurisdiction: Whether the subject matter of petitioner's Complaint involves title to, possession of, or interest in real property, or is incapable of pecuniary estimation.

• Jurisdiction: No. The Complaint involves title to, possession of, and interest in real property with an assessed value of ₱3,010.00, which does not exceed ₱20,000.00. Under Section 19 of BP 129 as amended by RA 7691, exclusive original jurisdiction lies with the Municipal Trial Court, not the RTC.

• Jurisdiction: Jurisdiction over the subject matter is conferred by law and determined by the plaintiff's allegations in the complaint and the principal relief sought, in light of the law apportioning jurisdiction among courts. While actions incapable of pecuniary estimation fall under RTC jurisdiction under Section 1 of BP 129, actions involving title to or possession of real property are governed by the assessed value of the property under Section 19 of BP 129 as amended by RA 7691. The Court found that the ultimate objective of petitioner's Complaint was to establish and confirm his right of ownership and possession over the subject property, as petitioner himself declared in the Petition that "the narration on the complaint would show that the petitioner was only establishing his rightful ownership over the subject property." The cancellation of the OCT would merely follow as a necessary consequence of establishing ownership. Relying on Heirs of Generoso Sebe vs. Heirs of Veronica Sevilla, the Court distinguished "title" from "certificate of title"—the latter being merely the document of ownership under the Torrens system. A certificate of title does not give the owner any better title than what he actually has in law, so an action for cancellation or nullification of a certificate of title is only a necessary consequence of establishing that the defendant lacks title to real property. Because the assessed value of the property (₱3,010.00) does not exceed ₱20,000.00, the RTC had no jurisdiction, and the CA correctly granted the respondents' Rule 65 Petition.

• Determination of Jurisdiction by Nature of Action — A court's jurisdiction over the subject matter is determined by the plaintiff's allegations in the complaint and the principal relief sought, in light of the law that apportions the jurisdiction of courts. The nature of an action is not determined by the caption of the complaint but by the allegations and the reliefs prayed for. Where the ultimate objective of the plaintiff is to obtain title to real property, the action should be filed in the proper court having jurisdiction over the assessed value of the property subject thereof. The Court applied this doctrine by examining the Complaint's prayer for reconveyance and recognition of ownership, concluding that the action involved title to or possession of real property rather than being incapable of pecuniary estimation.

• Title vs. Certificate of Title — "Title" is different from a "certificate of title," which is the document of ownership under the Torrens system of registration issued by the government through the Register of Deeds. While "title" gives the owner the right to demand or be issued a "certificate of title," the holder of a certificate of title does not necessarily possess valid title to the real property. The issuance of a certificate of title does not give the owner any better title than what he actually has in law. Therefore, a plaintiff's action for cancellation or nullification of a certificate of title may only be a necessary consequence of establishing that the defendant lacks title to real property. The Court applied this distinction to reject petitioner's argument that the main objective was cancellation of the OCT, holding instead that cancellation would merely follow from a determination of ownership.

• "The present action is, therefore, not about the declaration of the nullity of the documents or the reconveyance to the Sebes of the certificates of title covering the two lots. These would merely follow after the trial court shall have first resolved the issue of which between the contending parties is the lawful owner of such lots, the one also entitled to their possession, x x x" — Quoted from Heirs of Generoso Sebe vs. Heirs of Veronica Sevilla, this passage articulates the ratio decidendi: nullification of documents is merely consequential to the primary issue of ownership, and it is the latter that determines the nature of the action and the proper court's jurisdiction.

• "jurisdiction over the subject matter is the power to hear and determine the general class to which the proceedings in question belong; it is conferred by law and not by the consent or acquiescence of any or all of the parties or by erroneous belief of the court that it exists" — This passage states the foundational principle of jurisdiction over the subject matter, underscoring that it is a matter of law and cannot be conferred by consent or erroneous belief.

• "actions for reconveyance of or for cancellation of title to or to quiet title over real property are actions that fall under the classification of cases that involve 'title to, or possession of, real property, or any interest therein.'" — This formulation, cited from Heirs of Valariano Concha, Sr. vs. Sps. Lumocso, classifies reconveyance and cancellation of title actions as involving title to or possession of real property, thereby determining jurisdiction by assessed value rather than pecuniary estimability.

• Heirs of Generoso Sebe vs. Heirs of Veronica Sevilla, 618 Phil. 395 (2009) — Controlling precedent with substantially similar facts. Petitioners therein filed an action for annulment of documents, reconveyance, and recovery of possession with damages before the RTC involving property assessed below ₱20,000.00. The Court followed its reasoning that the primary issue is who between the contending parties is the lawful owner, and that nullification of documents merely follows from that determination.

• Spouses Huguete vs. Spouses Embudo, 453 Phil. 170 (2003) — Cited for the doctrine that where the ultimate objective of the plaintiff is to obtain title to real property, the action should be filed in the proper court having jurisdiction over the assessed value of the property.

• Heirs of Valariano Concha, Sr. vs. Sps. Lumocso, 564 Phil. 580 (2007) — Cited for the proposition that actions for reconveyance, cancellation of title, or quieting of title over real property fall under the classification of cases involving title to, possession of, or interest in real property.

• Foronda-Crystal vs. Son, G.R. No. 221815, November 29, 2017, 847 SCRA 280 — Cited for the definition of jurisdiction over the subject matter as the power to hear and determine the general class to which the proceedings belong, conferred by law and not by consent or acquiescence.

• Section 19, Batas Pambansa Blg. 129 (Judiciary Reorganization Act of 1980), as amended by RA 7691 — Provides that Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts have exclusive original jurisdiction over civil actions involving title to, or possession of, real property or any interest therein where the assessed value does not exceed ₱20,000.00 (₱50,000.00 in Metro Manila). Applied to hold that the RTC lacked jurisdiction because the assessed value of the subject property was only ₱3,010.00.

• Section 1, BP 129 — Provides that Regional Trial Courts have exclusive original jurisdiction over all civil actions in which the subject of the litigation is incapable of pecuniary estimation. Petitioner invoked this provision, but the Court held it inapplicable because the action was capable of pecuniary estimation by virtue of involving title to real property.

• Section 48, Presidential Decree No. 1529 (Property Registration Decree) — Prohibits collateral attacks on a Torrens title by reason of its indefeasibility. Respondents invoked this provision in their Motion to Dismiss, though the Supreme Court's ruling turned on the jurisdictional issue rather than on the collateral attack question.

Carpio, Acting C.J. (Chairperson), Caguioa, J., Reyes, Jr., J., Hernando, J., and Zalameda, J., concurred.