Sanson vs. Tapuz

A complaint seeking to annul a certificate of title issued under Act No. 496 is barred by prescription when filed more than one year after entry of the registration decree; where the complaint on its face shows that the action has prescribed, dismissal on that ground is proper even without a full trial. The Court also ruled that res judicata did not apply because the prior cases failed at least one requisite, and that laches cannot be established by mere allegations or resolved in a motion to dismiss.

Respondents are the heirs of Antonio Tapuz, who allegedly occupied several parcels in Malay, Aklan, including Boracay, for more than fifty years. Petitioners Gregorio Sanson and Ma. Lourdes Tirol trace their registered title to OCT RO-2222(19502), issued in the name of Ciriaco Tirol, Sr., from which several transfer certificates of title were derived. The dispute concerns land within Boracay, which respondents claim was reserved for tourism under Presidential Proclamation No. 1801 and could not be titled except for indigenous tribes and occupant tillers; prior litigation involving the same OCT and its derivative titles forms the backdrop to the present action.

Antonio Tapuz, a native of Malay, Aklan, during his lifetime had continuous, exclusive, adverse, and open occupation and possession of several parcels of land in the concept of owner for more than fifty years until his death. The parcels were covered by Tax Declaration Nos. 1320, 4060, 1454, 3014, and 3020. His heirs, respondents, remained in possession after his death. Antonio, being unlettered, believed that possession alone was sufficient to vest him ownership.

Respondents later learned that the government prohibited titling of lands within Boracay, except in favor of indigenous tribes and occupant tillers. Despite this prohibition, Ciriaco Tirol, Sr., petitioners' predecessor-in-interest, allegedly obtained transfer certificates of title over parcels that encroached on Antonio's landholdings. Ciriaco, a former government official, allegedly used his access to and control of government records to obtain certificates of title through the supposed reconstitution of non-existent ones. Among these reconstituted titles were TCTs T-27083, T-27084, T-27085, T-27086, and T-2627-48, supposedly derived from OCT No. RO-2222(19502).

Respondents alleged that OCT RO-2222(19502) was void on its face because its technical description covered three parcels of land in three different areas in Aklan: (a) a portion of Lot 1 in Ibajay, Aklan measuring 1,593 sqm; (b) a portion of Lot 29 in Balabag, Buruanga, Aklan measuring 4,694 sqm; and (c) a portion of Lot 30 in Balabag, Buruanga, Aklan measuring 606,798 sqm. The title referred to parcels in Barrio Balabag in Buruanga when Barrio Balabag is actually located in Malay, and the properties described are in Boracay island in the town of Malay. When Ciriaco's heirs partitioned the properties, the covered area increased and encroached on Antonio's landholdings. OCT RO-2222(19502) was allegedly issued by the "Republic of the Philippines, Court of First Instance of Capiz" on July 25, 1943, when the Philippines was not yet a Republic and during the Second World War; the reconstituted title was supposedly transcribed into the registration book for the Province of Capiz on August 7, 1933, yet the reconstitution appeared to have been done in 1943. Respondents claimed daño emergente of not less than P500,000 resulting from the encroachment and sought nullification of the OCT and its derivative titles, without prejudice to their right as owners through open, continuous, adverse, and exclusive possession for more than fifty years. They also alleged that the subject properties were reserved for tourism purposes under Presidential Proclamation No. 1801 dated November 10, 1988.

Petitioners defended the validity of OCT RO-2222(19502) and sought dismissal. They claimed they are the registered owners of a 10,093 sqm parcel under TCT T-35183, derived from TCT T-27086 alone, and not the registered owners of TCTs T-27083, T-27084, T-27085, T-27086, and T-2627-48, which respondents also sought to nullify. They invoked Civil Case No. 201-M for forcible entry, where the MCTC for Buruanga-Malay ruled in their favor, affirmed by RTC-Br. 6 in Civil Case No. 7990 and later by the Court of Appeals in CA-G.R. SP No. 02859, after which a writ of execution and demolition was issued. They also invoked the Court of Appeals' decision dated June 17, 2004 in CA-G.R. SP No. 76964, which upheld the validity of OCT RO-2222(19502) and denied the petition for annulment of the RTC's May 7, 1999 decision in Civil Case No. 5262. Petitioners alleged forum shopping and laches and claimed to be transferees in good faith and for value. The Land Registration Authority, through the Office of the Solicitor General, argued that Antonio could not have acquired the property through prescription without proof that it was declared alienable and disposable.

By Complaint dated October 5, 2009, respondents sued petitioners for declaration of non-existence and/or nullity of TCT T-351383, OCT No. RO-2222(19502)-45, Decree 512210, LRC 43694, TCT 26086, and all sources of TCT T-35183, recovery of possession and damages, and recognition of lawful ownership by virtue of continuous, open, and exclusive possession for more than fifty years. The RTC initially dismissed the complaint on res judicata, but the Court of Appeals reversed and reinstated the case. The complaint in Civil Case No. 8751 itself bore that the suit was filed more than seventy-seven years after the issuance of OCT RO-2222(19502).

• Res Judicata Based on Civil Case No. 5262: Petitioners asserted that Civil Case No. 5262, for quieting of title, operates as res judicata to respondents' adverse claim over the same property.
• Res Judicata Based on G.R. No. 230135: Petitioners argued that the final ruling in G.R. No. 230135, subsequent to the assailed Court of Appeals decision, also operates as res judicata to Civil Case No. 8751.
• Res Judicata Despite Variance in Parties: Petitioners maintained that the trial court did not abuse its discretion in dismissing the complaint on res judicata despite the variance in parties, because res judicata cannot be defeated by the expedient addition or elimination of parties.
• Failure to State Cause of Action and Indispensable Parties: In their motion to dismiss, petitioners argued that respondents failed to state a cause of action for lack of sufficient documentary evidence and failed to implead indispensable parties.
• Forum Shopping, Laches, and Good Faith: In their answer, petitioners alleged that respondents were guilty of forum shopping and laches, and that petitioners were transferees in good faith and for value under TCT T-35183.
• Procedural Non-Compliance: Petitioners sought dismissal of respondents' appeal for failure to comply with Section 13(a), (b), (d), and (f) of Rule 44, particularly the absence of a subject index and page references.
• Harassment Suit and Torrens Title: In their appellee's brief, petitioners argued that the case was a harassment suit and a nuisance to their exercise of property rights; the properties were duly registered under the Torrens system; and grave abuse of discretion is not a ground for appeal.

• Sufficiency of Complaint: Respondents countered that the allegations in the complaint sufficiently stated a cause of action for cancellation of OCT RO-2222(19502) and its derivative titles, as well as for recovery of possession of the subject properties.
• Non-Impleaded Heirs: Respondents argued that failure to implead the rest of Ciriaco's heirs was not a sufficient ground for dismissal since these persons were mere necessary parties who may be added at any time before judgment.
• Res Judicata Inapplicable: Respondents maintained that res judicata is inapplicable because there is no identity of parties and causes of action between CA-G.R. SP No. 02859, Civil Case No. 5262, and CA-G.R. SP No. 76964, on one hand, and Civil Case No. 8751, on the other.
• Grave Abuse of Discretion: On appeal, respondents charged the trial court with grave abuse of discretion when it granted petitioners' motion to dismiss without a formal hearing.
• Spurious OCT: Respondents argued that CA-G.R. SP No. 76964 is not res judicata to Civil Case No. 8751 because there is no identity of parties between the two cases, aside from the fact that OCT RO-2222(19502) is, on its face, spurious.
• Technical Non-Compliance: Respondents opposed dismissal of their appeal on the ground that non-compliance with Section 13, Rule 44 is merely permissive, not mandatory; they submitted a subject index complete with necessary page references for authorities and records cited.
• Reiteration: In their comment before the Supreme Court, respondents reiterated the allegations in their complaint before the trial court and their appellants' brief before the Court of Appeals.

• Res Judicata: Whether Civil Case No. 8751 is barred by res judicata on account of the prior related cases.
• Laches: Whether Civil Case No. 8751 may be dismissed on ground of laches.
• Prescription: Whether Civil Case No. 8751 is barred by prescription.

• Res Judicata: No. None of the cited prior cases satisfies all the requisites of res judicata; the prior ejectment case lacked finality and identity of causes, Civil Case No. 5262 lacked identity of parties or interests, CA-G.R. SP No. 76964 lacked finality and identity of subject matter and cause, and Civil Case No. 6585 lacked jurisdiction over the parties and a judgment on the merits.
• Laches: No. Laches is evidentiary and cannot be established by mere allegations or resolved in a motion to dismiss; a trial on the merits is required.
• Prescription: Yes. The action is barred by prescription under Section 38 of Act No. 496 because it was filed more than 77 years after the issuance of OCT RO-2222(19502) in 1932; the complaint on its face shows prescription, allowing dismissal without a full trial.

• Res Judicata: Res judicata means a matter adjudged, a thing judicially acted upon or decided, or a thing or matter settled by judgment. It refers to the rule that a final judgment or decree on the merits by a court of competent jurisdiction is conclusive of the rights of the parties or their privies in all later suits. Rule 39, Section 47 of the 1997 Rules of Civil Procedure embodies the doctrine and contemplates both bar by prior judgment and conclusiveness of judgment. The elements are: (1) the judgment sought to bar the new action must be final; (2) the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; (3) the disposition of the case must be a judgment on the merits; and (4) there must be identity of parties, subject matter, and causes of action. If all four are present, bar by prior judgment applies; if only identity of parties and subject matter is shown, conclusiveness of judgment applies. The Court compared the cited cases with Civil Case No. 8751. In Civil Case No. 201-M, Civil Case No. 7990, and CA-G.R. SP No. 02859, the ejectment case involved only the right of possession; any ruling on ownership was provisional and could not bind a case specifically raising ownership. Sections 16 and 18, Rule 70 provide that an ejectment judgment is conclusive only on possession and does not bind title or ownership. Moreover, petitioners did not attach proof that those rulings had already lapsed into finality. Thus, res judicata did not apply. In Civil Case No. 5262, the first three requisites were present, and under Pilar Development Corporation vs. Court of Appeals, quieting-of-title and annulment-of-title actions have essentially the same objectives and reliefs, so identity of subject matter and cause of action existed. However, there was no identity of parties or interests: the defendants in Civil Case No. 5262 represented the heirs of Candido Mariano and Maria Samanero, were surnamed Tapus, not Tapuz, and no showing was made that Antonio was related to Mariano or Samanero. Thus, res judicata did not apply. In CA-G.R. SP No. 76964, there was no proof of finality, and even if final, the subject matter was the May 7, 1999 Decision in Civil Case No. 5262, not OCT RO-2222(19502) per se, and the cause of action was annulment of judgment. Any discussion of the OCT's validity was mere obiter dictum; an annulment-of-judgment action could not be a direct attack on the certificate of title, which Section 48 of Presidential Decree No. 1529 prohibits as a collateral attack. There was also no identity of parties or interests. Thus, res judicata did not apply. In Civil Case No. 6585, CA-G.R. CV No. 03634, and G.R. No. 230135, the ruling had lapsed into finality, and there was identity of causes of action, subject matter, and interests. However, the second and third requisites were absent: the trial court did not acquire jurisdiction over indispensable parties, and the dismissal was not a judgment on the merits but was based on lack of jurisdiction, prescription, and laches. Under Aledro-Runa vs. Lead Export and Agro-Development Corporation, a judgment on the merits determines the rights and liabilities of the parties based on disclosed facts, as distinguished from a judgment on a preliminary, formal, or technical point. Thus, res judicata did not apply.

• Laches: Laches is the failure or neglect for an unreasonable length of time to do that which by exercising due diligence could or should have been done earlier. It sets in when it is already inequitable or unfair to allow the party to assert the right. Its elements are: (1) the conduct of the defendant or one under whom he claims gave rise to the situation complained of; (2) there was delay in asserting a right after knowledge of the defendant's conduct and after an opportunity to sue; (3) the defendant had no knowledge or notice that the complainant would assert his right; and (4) there is injury or prejudice to the defendant in the event relief is accorded to the complainant. Laches cannot be implied from the lapse of a significant amount of time alone; its elements must be proved positively. It is evidentiary in nature and cannot be established by mere allegations in the pleadings nor resolved in a motion to dismiss. The issue must be resolved upon trial on the merits where both parties are given ample opportunity to prove their claims and defenses. To dismiss Civil Case No. 8751 on ground of laches when trial had not yet been conducted would therefore be inappropriate.

• Prescription: Even though res judicata and laches did not justify dismissal, the Court found that Civil Case No. 8751 should be dismissed on ground of prescription. OCT RO-2222(19502) was issued in 1932. The law governing its issuance was Act No. 496, the Land Registration Act. Section 38 thereof provides that every decree of registration shall bind the land and quiet title thereto, shall be conclusive upon and against all persons, and shall not be opened by reason of absence, infancy, or other disability, nor by any proceeding in any court for reversing judgments or decrees, subject to the right of any person deprived of land by decree of registration obtained by fraud to file a petition for review within one year after entry of the decree, provided no innocent purchaser for value has acquired an interest. The Court of Appeals in CA-G.R. CV No. 03634 correctly held that the prescriptive period for assailing the validity of OCT RO-2222(19502) had already long expired when respondents filed Civil Case No. 6585 on June 10, 2002. There was more reason to bar respondents from initiating a complaint with an identical cause of action, albeit against different named defendants, much later on October 5, 2009 via Civil Case No. 8751. Dismissing a complaint on ground of prescription does not require a full-blown trial where, on its face, the complaint itself shows that the action has already prescribed. Determining whether respondents' action had already prescribed did not require presentation of evidence; the complaint in Civil Case No. 8751 itself bore that the suit was filed more than seventy-seven years following the issuance of OCT RO-2222(19502).

• Res judicata — A final judgment or decree on the merits by a court of competent jurisdiction is conclusive of the rights of the parties or their privies in all later suits. It has two aspects: bar by prior judgment, or claim preclusion, and conclusiveness of judgment, or issue preclusion. The elements are: (1) the judgment sought to bar the new action must be final; (2) the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; (3) the disposition of the case must be a judgment on the merits; and (4) there must be identity of parties, subject matter, and causes of action. If all four are present, bar by prior judgment applies; if only identity of parties and subject matter is shown, conclusiveness of judgment applies. The Court applied this doctrine and found that none of the prior cases cited by petitioners satisfied all requisites.
• Laches — Laches is the failure or neglect for an unreasonable length of time to do that which by exercising due diligence could or should have been done earlier. Its elements are: (1) the conduct of the defendant or one under whom he claims gave rise to the situation complained of; (2) there was delay in asserting a right after knowledge of the defendant's conduct and after an opportunity to sue; (3) the defendant had no knowledge or notice that the complainant would assert his right; and (4) there is injury or prejudice to the defendant in the event relief is accorded to the complainant. Laches cannot be implied from the lapse of time alone; it is evidentiary and must be proved at trial, not by mere allegations or a motion to dismiss. The Court held that dismissal on laches was inappropriate.
• Prescription under Section 38 of Act No. 496 — Under Section 38 of Act No. 496, a decree of registration binds the land and is conclusive against all persons; it may be reopened only by a petition for review filed within one year after entry of the decree on ground of fraud, provided no innocent purchaser for value has acquired an interest. The Court applied this provision to bar Civil Case No. 8751, which was filed more than 77 years after OCT RO-2222(19502) was issued in 1932.
• Ejectment judgment conclusive only on possession — Under Sections 16 and 18, Rule 70 of the Rules of Court, a judgment in forcible entry or detainer is conclusive only on possession and does not bind title or ownership; it does not bar an action between the same parties respecting title to the land. The Court applied this to Civil Case No. 201-M, holding that it could not be res judicata to Civil Case No. 8751.
• Collateral attack on certificate of title — Under Section 48 of Presidential Decree No. 1529, a certificate of title is not subject to collateral attack and cannot be altered, modified, or canceled except in a direct proceeding in accordance with law. The Court applied this to CA-G.R. SP No. 76964, an annulment-of-judgment action, where any discussion of the OCT's validity was merely obiter and could not be a direct attack.
• Obiter dictum — An obiter dictum is an opinion uttered by the way, not upon the point or question pending, as if turning aside from the main topic of the case to collateral subjects. The Court held that the Court of Appeals' discussion of the OCT's validity in CA-G.R. SP No. 76964 was mere obiter because the action was for annulment of judgment, not direct annulment of the title.
• Judgment on the merits — A judgment is considered rendered on the merits when it determines the rights and liabilities of the parties based on the disclosed facts, irrespective of formal, technical, or dilatory objections; it is distinguished from a judgment rendered upon a preliminary, formal, or merely technical point. The Court applied this to Civil Case No. 6585, whose dismissal for lack of jurisdiction over indispensable parties, prescription, and laches was not a judgment on the merits.
• Identity of interests in res judicata — Absolute identity of parties is not required; a community of interests between a party in the first case and a party in the second case is sufficient. The Court applied this in comparing the ejectment case and Civil Case No. 8751, but still found other requisites absent; in Civil Case No. 5262, no identity of interests was shown.
• Quieting of title and annulment of title — The underlying objectives or reliefs sought in quieting-of-title and annulment-of-title cases are essentially the same: adjudication of ownership and nullification of one of the certificates of title. The difference in form and nature of the two actions is immaterial for res judicata. The Court applied this to find identity of subject matter and cause of action between Civil Case No. 5262 and Civil Case No. 8751, but res judicata still failed for lack of identity of parties.
• Prescription as ground for motion to dismiss — An allegation of prescription can effectively be used in a motion to dismiss only when the complaint on its face shows that the action has already prescribed. If the issue of prescription involves evidentiary matters requiring a full-blown trial on the merits, it cannot be determined in a motion to dismiss. The Court applied this because the complaint itself showed the suit was filed more than 77 years after issuance of OCT RO-2222(19502).

• "Res judicata means “a matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by judgment.”" — This passage defines res judicata at the outset of the Court's analysis and frames the doctrine applied to the prior related cases.
• "The elements of res judicata are: (1) the judgment sought to bar the new action must be final; (2) the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; (3) the disposition of the case must be a judgment on the merits; and (4) there must be as between the first and second action, identity of parties, subject matter, and causes of action." — This is the Court's canonical formulation of the requisites of res judicata and is the framework used to test each prior case.
• "Laches cannot be implied from the lapse of a significant amount of time alone. Rather, the elements of laches must be proved positively. More, laches is evidentiary in nature and could not be established by mere allegations in the pleadings nor resolved in a motion to dismiss." — This passage states the ratio for rejecting laches as a ground for outright dismissal and explains why trial on the merits is required.
• "Here, determining whether respondents' action had already prescribed does not require presentation of evidence. The record speaks for itself. The complaint in Civil Case No. 8751 itself bears that the suit was filed more than seventy-seven (77) years following the issuance of OCT RO-2222(19502)." — This passage supplies the decisive reason for dismissing Civil Case No. 8751 on ground of prescription.

• Degayo vs. Magbanua-Dinglasan, 757 Phil. 376, 382 (2015) — Differentiated bar by prior judgment from conclusiveness of judgment; cited for the two aspects of res judicata.
• Pilar Development Corporation vs. Court of Appeals, 716 Phil. 519, 531 (2013) — Held that quieting-of-title and annulment-of-title actions have essentially the same objectives and reliefs, and that the difference in form is immaterial to res judicata. Applied to find identity of subject matter and cause of action between Civil Case No. 5262 and Civil Case No. 8751, though identity of parties was absent.
• Lim vs. Spouses Ligon, 737 Phil. 85, 100 (2014) — Held that a favorable ejectment judgment cannot bar an action between the same parties respecting title to the land; applied to Civil Case No. 201-M.
• Lagrosa vs. Court of Appeals, 371 Phil. 225, 238 (1999) — Held that whether title was procured by falsification or fraud can only be raised in an action expressly instituted for that purpose; the attack must be direct, not collateral. Applied to CA-G.R. SP No. 76964.
• Aledro-Runa vs. Lead Export and Agro-Development Corporation, 836 Phil. 946, 960 (2018) — Clarified that a judgment on the merits determines rights and liabilities based on disclosed facts, as distinguished from a judgment rendered upon a preliminary, formal, or merely technical point. Applied to Civil Case No. 6585.
• G.V. Florida Transport, Inc. vs. Tiara Commercial Corporation, 820 Phil. 235, 255 (2017) and Sanchez vs. Sanchez, 722 Phil. 763, 769 (2013) — Cited for the rule that prescription may be raised in a motion to dismiss only when the complaint on its face shows that the action has already prescribed.
• Salvador vs. Patricia, Inc., 799 Phil. 116, 132 (2016) — Held that the subject matter in an action for quieting of title is the very title sought to be quieted; cited in the res judicata analysis.
• People vs. Macadaeg, 91 Phil. 410, 413 (1952) — Defined obiter dictum as an opinion uttered by the way, not upon the point or question pending; applied to CA-G.R. SP No. 76964.
• Grace Park International Corporation vs. Eastwest Savings Banking Corporation, 791 Phil. 570, 578 (2016) — Held that res judicata does not require absolute identity of parties; community of interests is sufficient. Applied in comparing the ejectment case and Civil Case No. 8751.
• Pineda vs. Heirs of Guevarra, 544 Phil. 554, 561 (2007) — Cited for the rule that laches is evidentiary and cannot be established by mere allegations nor resolved in a motion to dismiss.

• Rule 39, Section 47, 1997 Rules of Civil Procedure — Embodies res judicata; provides that a final judgment or order is conclusive between the parties and their successors in interest as to matters directly adjudged or that could have been raised, and in other litigation only matters actually and necessarily included are deemed adjudged. Applied in analyzing bar by prior judgment and conclusiveness of judgment.
• Sections 16 and 18, Rule 70, Rules of Court — Section 16 provides that when ownership is raised in an ejectment case and possession cannot be resolved without deciding ownership, the issue of ownership shall be resolved only to determine possession; Section 18 provides that an ejectment judgment is conclusive only on possession and does not bind title or ownership. Applied to Civil Case No. 201-M.
• Article 477, Civil Code — Requires the plaintiff in an action for quieting of title to have legal or equitable title to, or interest in, the real property subject of the action. Cited in defining legal and equitable title in the res judicata analysis.
• Section 48, Presidential Decree No. 1529 — Provides that a certificate of title shall not be subject to collateral attack and cannot be altered, modified, or canceled except in a direct proceeding in accordance with law. Applied to CA-G.R. SP No. 76964.
• Section 38, Act No. 496 (Land Registration Act) — Provides that a decree of registration binds the land and is conclusive against all persons, subject to a petition for review within one year after entry of the decree on ground of fraud, provided no innocent purchaser for value has acquired an interest. Applied to bar Civil Case No. 8751 as filed more than 77 years after issuance of OCT RO-2222(19502).
• Rule 47, Rules of Court — Governs annulment of judgment; the Court of Appeals in CA-G.R. SP No. 76964 resolved the case under this Rule, which was not a direct action to annul OCT RO-2222(19502).
• Section 13, Rule 44, Rules of Court — Prescribes the contents of an appellant's brief, including a subject index, assignment of errors, statement of facts, and argument with page references. The Court of Appeals initially dismissed respondents' appeal for non-compliance but later granted reconsideration on substantial compliance; the Supreme Court did not disturb this.

Justices Zalameda, M. Lopez, Gaerlan, and Rosario concurred. Justice Bernabe took no part for having concurred in the Decision dated June 17, 2014 of the Court of Appeals in CA-G.R. SP No. 76964.