Spouses Basa vs. Vda. de Senly Loy

An action for quieting of title requires proof of legal or equitable title or interest in the subject property, and failure to present the original deeds of sale — without showing any exception to the best evidence rule — defeats the claim. Possession of the disputed property does not, by itself, establish the title or interest required.

The subject property is a 496-square-meter residential lot in New Lucban, Baguio City, originally covered by TCT No. T-30086 in the name of the late Busa Carantes, predecessor-in-interest of Manuel Carantes and respondent Robert Carantes. In 1994, the property was mortgaged to respondent Angeline Loy and her husband, who later foreclosed and consolidated ownership. Petitioners are four sets of spouses who claim to have purchased portions totaling 351 square meters from Robert Carantes in 1992 and 1993, prior to the mortgage and foreclosure. The dispute arose when a writ of possession was issued in favor of Angeline Loy, prompting petitioners to file an action to quiet title.

The subject property is a 496-square-meter residential lot in New Lucban, Baguio City, covered by Transfer Certificate of Title No. T-30086 in the name of the late Busa Carantes, who is the predecessor-in-interest of Manuel Carantes and respondent Robert Carantes. In 1994, the property was mortgaged to respondent Angeline Loy and her husband. The Loys thereafter foreclosed on the mortgage and emerged as the highest bidder at the auction sale. On March 31, 2006, after consolidating ownership over the subject property, Branch 6 of the Baguio RTC — in LRC ADM Case No. 1546-R — issued a writ of possession in their favor.

Petitioners — spouses Jaime and Catherine Basa, spouses Juan and Erlinda Ogale, spouses Rogelio and Lucena Lagasca, and spouses Cresencio and Eleadora Apostol — claimed that in 1992 and 1993, Robert Carantes had already sold to them portions of the subject property totaling 351 square meters, pursuant to deeds of sale executed in their favor. They asserted that they took possession of the portions sold to them and that the titles subsequently issued in favor of Angeline Loy created a cloud upon their title. On May 30, 2006, petitioners filed before Branch 7 of the Baguio RTC a petition for quieting of title with prayer for injunctive relief and damages, docketed as Civil Case No. 6280-R, seeking cancellation and annulment of the documents and proceedings relative to the sale to Angeline Loy and a declaration that they were the owners of the respective portions sold to them.

In her answer with counterclaim, Angeline Loy alleged that she acquired the property through foreclosure and auction sale, that the property was later divided by judicial partition with new certificates of title issued in the names of Manuel and Robert Carantes, and that those titles were subsequently cancelled and new ones issued in her name as co-owner with Manuel Carantes. She denied knowledge of the supposed sales to petitioners, noting that these transactions were not annotated on the title of Busa Carantes, and asserted that the sales to petitioners were either unnotarized or unconsummated for failure to pay the full purchase price. In his own answer, Robert Carantes alleged that the sales to petitioners did not materialize because they failed to fully pay the purchase price, that his transactions with the Loys were null and void, and that he was the real owner of the subject property.

Respondents Angeline Loy and Robert Carantes failed to appear during the scheduled mediation, and petitioners were allowed to present their evidence ex parte. Petitioners offered Exhibits "A" through "D" — the deeds of sale covering the transactions with Robert Carantes — and Exhibit "E," an affidavit purportedly executed by Robert Carantes. On July 24, 2009, the trial court denied admission of Exhibits "A" to "D" on the ground that Exhibits "A" to "C" were mere photocopies previously only provisionally marked, while no document had actually been marked as Exhibit "D." The trial court found that petitioners failed to submit the original copies of the deeds of sale and that Robert Carantes was never presented to testify on his affidavit, rendering its contents inadmissible hearsay. Petitioners attempted to attach supposed originals to their motion for reconsideration, but the trial court refused to consider them, noting that no exception to the best evidence rule under Section 3, Rule 130 of the Rules of Court had been shown. The Court of Appeals affirmed, additionally finding that the documents appended to the motion for reconsideration differed from those marked during the ex parte hearing, and that petitioners' testimonies contradicted Robert Carantes's affidavit regarding the areas sold and the prices per square meter.

• Adequacy of Proof of Ownership: Petitioners argued that they adequately proved their ownership of the disputed property and that the lower courts disregarded the fact that they were in possession of the respective portions claimed, which constituted proof of delivery and thus consummation of the sales in their favor.
• Belated Submission of Originals: Petitioners maintained that the original deeds of sale were attached to their motion for reconsideration and that the trial court erred in refusing to consider them, invoking the principle that substantive law and considerations of justice should outweigh technicalities and rules of procedure.
• Bad Faith of Angeline Loy: Petitioners argued that respondent Angeline Loy was a buyer in bad faith because she knew they were in possession of the disputed property when she and her husband acquired the same.
• Priority of Prior Unrecorded Sale: Petitioners contended that between a prior unrecorded sale and a subsequent mortgage by the seller, the former prevails on account of the better right accorded to the buyer as against the subsequent mortgagee.

• No Error by the Court of Appeals: Respondent Angeline Loy maintained that the CA committed no error in affirming the trial court's dismissal.
• Frivolous and Dilatory Petition: Respondent Angeline Loy argued that petitioners' case was frivolous and dilatory, aimed at delaying or thwarting the execution of the writ of possession issued in her favor in LRC ADM Case No. 1546-R.
• Issues of Fact Beyond Review: Respondent Angeline Loy contended that the petition raised issues of fact already passed upon by the courts below and therefore beyond review by the Supreme Court.

• Burden of Proof in Quieting of Title: Whether petitioners have proved, by preponderant evidence, their case for quieting of title.

• Burden of Proof in Quieting of Title: No. Petitioners failed to establish the first indispensable requisite of a quieting-of-title action — legal or equitable title or interest in the subject property — because they did not present the original deeds of sale and showed no exception to the best evidence rule.

• Burden of Proof in Quieting of Title: Two indispensable requisites must concur in an action to quiet title: (1) the plaintiff has 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. Legal title denotes registered ownership, while equitable title means beneficial ownership. Petitioners failed to prove the first requisite. They did not present the original copies of the purported deeds of sale during the ex parte hearing, offering only photocopies that were denied admission. Their belated attachment of supposed originals to a motion for reconsideration did not deserve consideration: the documents hardly qualified as evidence, and the document appended for the Lagasca and Apostol spouses was a different instrument from what was marked during the hearing. No exception to the best evidence rule under Section 3, Rule 130 was shown. Moreover, the unnotarized deed of sale in favor of the Basa spouses could not stand without Robert Carantes's corroboration; his affidavit was inadmissible hearsay because he was never presented to testify thereon. The testimonies of petitioners' witnesses also contradicted the affidavit regarding the areas sold and the prices per square meter. Possession alone did not prove title, as possession could be by lease, tolerance, or other arrangement. Without adequately proving title or right to the disputed portions, the action could not prosper.

• Quieting of Title — Indispensable Requisites — An action to quiet title requires the concurrence of two indispensable requisites: (1) the plaintiff has legal or 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. Legal title denotes registered ownership; equitable title means beneficial ownership. In this case, petitioners failed to satisfy the first requisite because they could not competently prove the deeds of sale through which they claimed title.

• Best Evidence Rule (Section 3, Rule 130, Rules of Court) — When the subject of inquiry is the contents of a document, no evidence shall be admissible other than the original document itself, except: (a) when the original has been lost or destroyed or cannot be produced in court without bad faith on the part of the offerer; (b) when the original is in the custody or under the control of the party against whom the evidence is offered, and the latter fails to produce it after reasonable notice; (c) when the original consists of numerous accounts or other documents which cannot be examined in court without great loss of time and the fact sought to be established is only the general result of the whole; and (d) when the original is a public record in the custody of a public officer or is recorded in a public office. Petitioners showed none of these exceptions, rendering the trial court's exclusion of the photocopied deeds proper.

• Burden of Proof in Ex Parte Presentation — Even where a plaintiff is allowed to present evidence ex parte due to the defendant's failure to appear, the plaintiff is not automatically entitled to the relief prayed for. The burden of proof remains on the party asserting the affirmative issue, who must prove allegations by competent evidence and rely on the strength of his own evidence, not on the weakness of the opponent's defense.

• Hearsay Nature of Affidavits — Affidavits are generally rejected in judicial proceedings as hearsay unless the affiants themselves are placed on the witness stand to testify thereon. Robert Carantes's affidavit was inadmissible because he was never presented in court, and without his testimony, the unnotarized deed of sale in favor of the Basa spouses could not be sufficiently proved.

• "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." — This passage states the controlling two-pronged test for actions to quiet title, which the Court applied to find that petitioners failed at the threshold requirement.

• "Even if petitioners are in possession of the disputed property, this does not necessarily prove their supposed title. It may be that their possession of the disputed property is by lease or any other agreement or arrangement with the owner — or simply by mere tolerance." — This passage clarifies that possession alone is insufficient to establish the legal or equitable title required for a quieting-of-title action, rebutting petitioners' argument that their possession proved delivery and consummation of sale.

• "As in other civil cases, the burden of proof rests upon the party who, as determined by the pleadings or the nature of the case, asserts an affirmative issue. Contentions must be proved by competent evidence and reliance must be had on the strength of the party's own evidence and not upon the weakness of the opponent's defense. This applies with more vigor where, as in the instant case, the plaintiff was allowed to present evidence ex parte." — This passage, quoted by the Court from Saguid vs. Court of Appeals, articulates the principle that ex parte presentation does not relieve the plaintiff of the burden of proof — a principle central to the dismissal.

• Mananquil vs. Moico, 699 Phil. 120 (2012) — Cited for the two indispensable requisites of an action to quiet title and the definitions of legal and equitable title. Followed as controlling authority.
• Eland Philippines, Inc. vs. Garcia, 626 Phil. 735 (2010) — Cited through Mananquil for the same formulation of the requisites of quieting of title. Followed.
• Baricuatro, Jr. vs. Court of Appeals, 382 Phil. 15 (2000) — Cited through Mananquil as the origin of the formulation of the quieting-of-title requisites. Followed.
• Saguid vs. Court of Appeals — Cited for the principle that the burden of proof remains on the plaintiff even when allowed to present evidence ex parte. Followed.
• Acabal vs. Acabal, 454 SCRA 555 — Cited by the trial court for the rule that the burden of proof lies on the party who makes the allegations. Followed.
• People vs. Brioso, 37 SCRA 336 — Cited by the trial court for the rule that affidavits are generally hearsay unless the affiant testifies. Followed.
• Llemos vs. Llemos, 513 SCRA 128 — Cited by the trial court for the best evidence rule exceptions under Section 3, Rule 130. Followed.

• Section 3, Rule 130, Rules of Court (Best Evidence Rule) — Provides that when the subject of inquiry is the contents of a document, no evidence shall be admissible other than the original, except in four enumerated circumstances. Applied to exclude the photocopied deeds of sale because petitioners failed to show any exception.
• Section 13, Article VIII, 1987 Constitution — Cited in the certification by the Acting Chief Justice regarding consultation among the Division before assignment of the opinion.

Justice Teresita J. Leonardo-De Castro (Acting Chairperson), Justice Francis H. Jardeleza (on official leave), Justice Noel Gimenez Tijam, and Justice Alexander G. Gesmundo concurred. No separate concurring opinions were written.