Salvador vs. Patricia, Inc.

Jurisdiction over a real action is determined based on the allegations in the complaint of the assessed value of the property involved. The silence of the complaint on such value is ground to dismiss the action for lack of jurisdiction because the trial court is not given the basis for making the determination.

Petitioners, occupants of parcels of land along Juan Luna Street, Gagalangin, Tondo, Manila, constructed houses and improvements on property claimed by respondent Patricia, Inc. under Transfer Certificate of Title No. 35727. The City of Manila intervened, asserting ownership over the same area under Transfer Certificate of Title No. 44247, leading to a boundary dispute between the two titleholders. Petitioners sought to prevent their eviction and remove the cloud on their possession, alleging they had occupied the property for over thirty years and that the area was declared an Area for Priority Development under Presidential Decree No. 1967.

• Nature of the Action: Petitioners filed a complaint for injunction and quieting of title to determine ownership of property they occupied along Juan Luna Street, Gagalangin, Tondo, and to prevent respondent Patricia, Inc. from evicting them.
• Factual Allegations: Petitioners claimed open and notorious possession for over thirty years, having constructed houses and improvements in good faith. They alleged the property was declared an Area for Priority Development (APD) under Presidential Decree No. 1967, as amended. Respondent Patricia, Inc. claimed ownership via TCT No. 35727. Intervenor City of Manila claimed ownership via TCT No. 44247.
• Stipulated Documents: The parties stipulated to the authenticity of: (1) TCT No. 44247 in the name of City of Manila; (2) TCT No. 35727 in the name of Patricia, Inc.; (3) Approved Plan PSD-38540; and (4) Approved Subdivision Plan PCS-3290 for Ricardo Manotok.
• Boundary Dispute Resolution: The RTC appointed three geodetic engineers (Engr. Rosario Mercado, Engr. Ernesto Pamular, and Engr. Delfin Bumanlag) as commissioners to determine the boundaries based on the respective titles. The majority report favored the City of Manila's position.
• RTC Ruling: The RTC sided with the majority of the commissioners, ruling that the land belonged to the City of Manila and permanently enjoined Patricia, Inc. from evicting the petitioners or collecting rentals.
• CA Ruling: The Court of Appeals reversed, holding that petitioners lacked legal or equitable interest to maintain the suit, that the RTC improperly acted as a "rubber stamp" of the commissioners without conducting hearings, and that adjudicating a boundary dispute in a quieting of title action was highly improper.

• Conformity to Evidence: Petitioners maintained that the parties had openly raised and litigated the boundary issue in the RTC, and the complaint should be deemed amended to conform to the evidence pursuant to Section 5, Rule 10 of the Rules of Court.
• Interest to Sue: Petitioners argued they possessed sufficient interest to bring the suit for quieting of title because they had built improvements on the property and had been in possession for over thirty years.
• Reliance on Commissioners: Petitioners contended the RTC correctly relied on the reports of the majority of the commissioners in resolving the boundary dispute.

• Improper Action: Respondent countered that the boundary dispute, which the allegations eventually boiled down to, was not proper in an action for quieting of title under Rule 63 of the Rules of Court.
• Section 5, Rule 10 Inapplicability: Respondent argued that Section 5, Rule 10 did not apply to vest authority in the RTC to resolve the boundary dispute, as such dispute required a separate action.
• Lack of Interest: Respondent asserted that petitioners, as mere occupants or lessees, lacked the legal or equitable title required to maintain an action for quieting of title.

• Jurisdiction over Real Action: Whether the RTC had jurisdiction over the action for quieting of title where the complaint failed to allege the assessed value of the property.
• Joinder of Causes of Action: Whether the joinder of an ordinary action for injunction with a special civil action for quieting of title is permissible under the Rules of Court.
• Real Party in Interest: Whether petitioners possessed the requisite legal or equitable title or interest to maintain an action for quieting of title and injunction.
• Boundary Dispute in Quieting of Title: Whether a boundary dispute between two registered owners may be adjudicated in an action for quieting of title filed by occupants.

• Jurisdiction over Real Action: The RTC lacked jurisdiction over the cause of action for quieting of title. Jurisdiction over real actions depends on the assessed value of the property alleged in the complaint. Republic Act No. 7691 amended Section 33(3) of Batas Pambansa Blg. 129, granting first-level courts exclusive original jurisdiction over civil actions involving title to or possession of real property where the assessed value does not exceed ₱20,000.00 (or ₱50,000.00 in Metro Manila). The silence of the complaint regarding the assessed value deprived the trial court of any basis to determine jurisdictional competence, warranting dismissal.
• Joinder of Causes of Action: The joinder was improper. Section 5, Rule 2 of the Rules of Court prohibits the joinder of special civil actions or actions governed by special rules with ordinary actions. An action for quieting of title is a special civil action under Rule 63, while injunction is an ordinary action; their joinder violated procedural rules.
• Real Party in Interest: Petitioners were not real parties in interest. Article 477 of the Civil Code requires the plaintiff in a quieting of title action to have legal or equitable title to, or interest in, the real property. Petitioners admitted the genuineness of both Patricia, Inc.'s and City of Manila's titles, negating any claim of title in themselves. As mere occupants or lessees, they possessed only tolerated possession, and land covered by Torrens title cannot be acquired by prescription. The right of first refusal under Presidential Decree No. 1517 for APD occupants is contingent and insufficient to vest title.
• Boundary Dispute in Quieting of Title: The boundary dispute could not be adjudicated in the quieting of title action. An action to quiet title is limited to removing clouds upon title; it cannot be used to alter or modify Torrens titles. Adjudicating the boundary dispute would effectively constitute a collateral attack on the certificates of title, prohibited under Section 48 of the Property Registration Decree.

• Jurisdiction over Real Actions: Jurisdiction over civil actions involving title to or possession of real property is determined by the assessed value of the property as alleged in the complaint. The failure to allege the assessed value is fatal and constitutes ground for dismissal for lack of jurisdiction, as the court has no basis to determine whether it or a first-level court has competence.
• Joinder of Actions: Special civil actions governed by special rules (such as quieting of title under Rule 63) cannot be joined with ordinary civil actions (such as injunction) under Section 5, Rule 2 of the Rules of Court. Misjoinder requires severance or dismissal.
• Requisites for Quieting of Title: Two indispensable requisites must concur: (1) the plaintiff must have legal or equitable title to or interest in the real property; and (2) the deed, claim, encumbrance, or proceeding casting cloud on the title must be shown to be invalid or inoperative despite its prima facie appearance of validity. Admission of the validity of the opponent's title negates the second requisite.
• Collateral Attack on Torrens Title: Certificates of title cannot be altered, modified, or cancelled except in direct proceedings; they are not subject to collateral attack. A boundary dispute seeking to modify a Torrens title cannot be litigated incidentally in an action for quieting of title.

• "Jurisdiction over a real action is determined based on the allegations in the complaint of the assessed value of the property involved. The silence of the complaint on such value is ground to dismiss the action for lack of jurisdiction because the trial court is not given the basis for making the determination."
• "Jurisdiction is a matter of substantive law because it is conferred only by law, as distinguished from venue, which is a purely procedural matter... Jurisdiction cannot be presumed or implied, but must appear clearly from the law or it will not be held to exist."
• "The joinder shall not include special civil actions or actions governed by special rules."
• "For an action to quiet title to prosper, two indispensable requisites must concur, namely: (1) the plaintiff or complainant has a legal or an equitable title to or interest in the real property subject of the action; and (2) the deed, claim, encumbrance, or proceeding claimed to be casting cloud on his title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy."
• "A certificate of title shall not be subject to collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law."

• Malana v. Tappa, G.R. No. 181303 (2009): Controlling precedent establishing that Section 1, Rule 63 does not override statutory jurisdictional provisions; quieting of title actions must comply with jurisdictional value requirements under Batas Pambansa Blg. 129 as amended.
• Frilles v. Yambao, G.R. No. 129889 (2002): Followed for the interpretation of Presidential Decree No. 1517 regarding rights of occupants in Areas for Priority Development.
• Mananquil v. Moico, G.R. No. 180076 (2012): Followed for the requisites of an action to quiet title.
• Philippine Economic Zone Authority v. Carantes, G.R. No. 181274 (2010): Followed for the requisites of injunction.

• Section 19, Batas Pambansa Blg. 129 (Judiciary Reorganization Act of 1980): Confers exclusive original jurisdiction on RTC over civil actions involving title to or possession of real property, subject to the jurisdictional amount thresholds.
• Section 33(3), Batas Pambansa Blg. 129 as amended by Republic Act No. 7691: Grants first-level courts exclusive original jurisdiction over civil actions involving title to or possession of real property where the assessed value does not exceed ₱20,000.00 (₱50,000.00 in Metro Manila).
• Section 5, Rule 2, Rules of Court: Prohibits joinder of special civil actions or actions governed by special rules.
• Section 1, Rule 63, Rules of Court: Governs actions for quieting of title.
• Article 477, Civil Code: Requires legal or equitable title for plaintiffs in quieting of title actions.
• Section 48, Presidential Decree No. 1529 (Property Registration Decree): Prohibits collateral attacks on certificates of title.
• Presidential Decree No. 1517: Urban Land Reform Law, regarding rights of tenants in Areas for Priority Development.

Sereno, C.J., Leonardo-De Castro, Perlas-Bernabe, and Caguioa, JJ.