Tensuan vs. Heirs of Vasquez

An action to quiet title is imprescriptible when the plaintiff is in possession of the property, regardless of the caption used in the complaint; moreover, a Special Work Order, being merely a construction permit and not among the recognized modes of acquiring ownership under the Civil Code, cannot serve as a basis for the issuance of a certificate of title, rendering any title issued thereunder void ab initio.

Fernando Tensuan died in 1976 as the registered owner of a 32,862-square-meter parcel of land in Poblacion, Muntinlupa City, covered by Transfer Certificate of Title (TCT) No. 16532 issued in 1950. His heirs executed an Extra-Judicial Settlement in 1976 and subdivided the property. Adjacent to this property was the Magdaong River, which separated the Tensuan land from the Aguila Village subdivision owned by Ma. Isabel M. Vasquez. In 1986, Ma. Isabel commissioned rip-rapping works on the northern side of her property pursuant to Special Work Order 13-000271, which allegedly altered the river's course and augmented her property by 5,237.53 square meters, including 1,680.92 square meters of the Tensuan property and 3,556.62 square meters of the riverbed. On November 25, 1986, she was issued TCT No. 144017 covering this additional area, which was subsequently subdivided into seven derivative titles.

• Nature of the Action: Petitioners instituted a complaint denominated as accion reivindicatoria and annulment of title, seeking to declare void Special Work Order 13-000271 and TCT No. 144017, cancel the seven derivative titles issued therefrom, and restore ownership and possession of the 1,680.92-square-meter portion allegedly incorporated into respondents' property.
• The Alleged Encroachment: In the 1990s, Ma. Isabel Vasquez commissioned rip-rapping of the northern side of her property bordering the Magdaong River. Petitioners alleged this altered the river's course, causing it to traverse the southern portion of their property. A Joint Verification Survey (VS-00-00368) conducted by City Engineer Roberto Bunyi from April 22-25, 1995, with representatives from both parties present, purportedly revealed that the rip-rapping encroached upon 1,680.92 square meters of the Tensuan property and incorporated 3,556.62 square meters of the riverbed.
• Issuance of TCT No. 144017: On November 25, 1986, Ma. Isabel was issued TCT No. 144017 covering 5,237.53 square meters based on Special Work Order 13-000271. This title was subsequently subdivided into seven derivative titles (TCT Nos. 180014-180020). Petitioners claimed the Special Work Order was non-existent or irregular, and that the rip-rapping was performed without their consent.
• Surveys Conducted: Geodetic Engineer Rodrigo Marcelo testified that the 1995 Joint Verification Survey revealed the 1,680.92-square-meter encroachment. An updated survey on August 8, 1997 confirmed the same area, while a February 19, 2000 survey indicated the encroachment had increased to 2,165.73 square meters due to rains. The 1997 and 2000 surveys were not approved by the Chief Regional Survey Division.
• Respondents' Position: Ma. Isabel denied encroachment, asserting the rip-rapping followed the river's contour and was necessary to prevent erosion. She claimed the additional area resulted from accretion due to the natural change in the river's course. She argued TCT No. 144017 was issued based on the Special Work Order approved by the Bureau of Lands and was thus conclusive evidence of ownership.
• Death of Party: Ma. Isabel M. Vasquez died on May 28, 2009 during the pendency of the proceedings and was substituted by her heirs, Dr. Daniel E. Vasquez and Maria Luisa M. Vasquez.

• Nature of the Action: Petitioner maintained that the complaint was essentially one for quieting of title under Article 476 of the Civil Code, imprescriptible where the plaintiff is in possession, notwithstanding its caption as accion reivindicatoria.
• Possession: Petitioners argued they were in constructive possession of the entire property covered by TCT No. 16532 by virtue of the Extra-Judicial Settlement executed in 1976, and that constructive possession suffices for prescription purposes; they need not physically occupy every portion of the land.
• Invalidity of Title: Petitioners contended TCT No. 144017 was void ab initio because it was issued on the basis of a Special Work Order—a mere construction permit that is not among the recognized modes of acquiring ownership under Article 712 of the Civil Code. The existence of the Special Work Order was never proven during trial.
• Bad Faith: Petitioners asserted respondents acquired the property in bad faith, knowing the Special Work Order could not vest title, and deliberately ignoring the encroachment upon petitioners' property and the inclusion of public domain (the river) in the title.

• Prescription: Respondent countered that the action was for reconveyance based on implied or constructive trust, which prescribes in ten years from the issuance of the title; TCT No. 144017 having been issued in 1986 and the complaint filed in 1998, the action was time-barred.
• Indefeasibility of Title: Respondent argued TCT No. 144017 was conclusive evidence of ownership and indefeasible, having been issued pursuant to a Special Work Order approved by the Bureau of Lands.
• Accretion: Respondent claimed the additional area was acquired by accretion due to the gradual and natural change in the course of the Magdaong River, entitling the riparian owner to the alluvial deposits.
• Lack of Possession: Respondent maintained petitioners failed to prove actual possession of the disputed portion at the time of filing, precluding the application of the rule on imprescriptibility.

• Nature of the Action and Prescription: Whether petitioners' cause of action has prescribed, or whether it is an imprescriptible action to quiet title.
• Validity of TCT No. 144017: Whether TCT No. 144017 was validly issued in the name of Ma. Isabel M. Vasquez.
• Accretion: Whether respondents acquired the disputed property by accretion.

• Nature of the Action and Prescription: The action has not prescribed. The complaint, though captioned as accion reivindicatoria and annulment of title, was in substance an action to quiet title under Article 476 of the Civil Code, as evidenced by the allegations seeking to remove a cloud on petitioners' title. An action to quiet title is imprescriptible where the plaintiff is in possession. Constructive possession by virtue of ownership and the Extra-Judicial Settlement suffices; petitioners need not physically occupy every portion of the land. The prompt filing of complaints with the City Engineer's Office in 1995 and the subsequent judicial action in 1998 demonstrated due diligence.
• Validity of TCT No. 144017: TCT No. 144017 is void ab initio. A Special Work Order is merely a construction permit and cannot serve as a basis for titling under Section 161 of DENR Memorandum Circular No. 013-10; it is not among the modes of acquiring ownership under Article 712 of the Civil Code. Moreover, the title covered portions of the Magdaong River, which is property of public dominion under Articles 420 and 502 of the Civil Code, and thus beyond the commerce of man. Between two certificates of title covering the same property, the prior registrant (TCT No. 16532 issued in 1950) prevails over the subsequent registrant (TCT No. 144017 issued in 1986), the latter being charged with constructive notice of the former.
• Accretion: The theory of accretion was raised for the first time on motion for reconsideration before the trial court and cannot be entertained on appeal. In any event, accretion cannot apply to property of public dominion such as a river. Whether accretion occurred is a question of fact inappropriate for resolution under Rule 45.

• Quieting of Title and Prescription: An action to quiet title is imprescriptible when the plaintiff is in possession of the property. Possession may be constructive; the owner is not required to set foot on every square meter of land to be deemed in possession. The nature of an action is determined by the allegations in the body of the complaint, not by its caption or designation.
• Prior Registration: Under the Torrens system, a prior registrant has superior rights over a subsequent registrant. A subsequent purchaser is charged with constructive notice of all prior registrations affecting the property and is presumed to know every fact which an examination of the record would have disclosed.
• Special Work Order: A Special Work Order is a permit for construction works on surveyed areas and cannot be the subject of titling. It is not among the recognized modes of acquiring ownership under the Civil Code (occupation, intellectual creation, law, donation, succession, tradition, prescription). A certificate of title issued on the basis of a Special Work Order is void ab initio.
• Public Dominion: Rivers and their natural beds are property of public dominion and are outside the commerce of man. They cannot be registered under the Land Registration Law nor covered by a Torrens Title.
• Builder in Bad Faith: One who builds on the land of another in bad faith loses what is built without right to indemnity under Article 449 of the Civil Code. Bad faith exists where the builder causes the issuance of a title based on an invalid document, ignores notices of encroachment, and includes public domain in the titled area.

• "The nature of the complaint is determined not by its designation or caption but by allegations in the complaint. As the Court pronounced in Sps. Munsalud v. National Housing Authority: The cause of action in a complaint is not determined by the designation given to it by the parties. The allegations in the body of the complaint define or describe it."
• "A Special Work Order is issued by a surveyor as reference for construction works on surveyed areas. Section 161 of DENR Memorandum Circular No. 013-10 is categorical that a special work order cannot be a subject of title... Even assuming, therefore, that the so-called Special Work Order 13-000271 was issued authorizing the rip-rapping activity to be done on Ma. Isabel's property, it absolutely cannot become the basis of titling on any property in the name of Ma. Isabel."
• "A mere special work order which in ordinary parlance is simply a construction permit is never among the recognized modes of acquiring property under the Civil Code... The dubious registration of the area in the name of Ma. Isabel per TCT No. 144017 was void from the very beginning."
• "Under the rule of notice, it is presumed that the purchaser has examined every instrument of record affecting the title. Such presumption is irrebutable. He is charged with notice of every fact shown by the record and is presumed to know every fact which an examination of the record would have disclosed. This presumption cannot be overcome by proof of innocence or good faith."

• Sps. Munsalud v. National Housing Authority, 595 Phil. 750 (2008): Cited for the principle that the nature of a complaint is determined by its allegations, not its caption.
• Maestrado v. Court of Appeals, 384 Phil. 418 (2000): Applied for the rule that an action for quieting of title is imprescriptible if the plaintiff is in possession.
• Legarda and Prieto v. Saleeby, 31 Phil. 590 (1915): Cited regarding the rule of constructive notice under the Torrens system.
• Republic v. Tan, 780 Phil. 764 (2016): Referenced for the principle that property of public dominion is outside the commerce of man.
• Heirs of Tappa v. Heirs of Bacud, G.R. No. 187633, April 4, 2016: Cited for the definition of a cloud on title.
• Philippine Ports Authority v. City of Iloilo, 453 Phil. 927 (2003): Applied for the rule that theories not raised in the trial court cannot be raised for the first time on appeal.

• Article 476, Civil Code of the Philippines: Governs actions to quiet title; requires legal/equitable title and an instrument/claim casting a cloud on the title.
• Article 712, Civil Code of the Philippines: Enumerates the modes of acquiring ownership (occupation, intellectual creation, law, donation, succession, tradition, prescription).
• Article 420(1), Civil Code of the Philippines: Declares rivers intended for public use as property of public dominion.
• Article 502(1), Civil Code of the Philippines: States that rivers and their natural beds are of public dominion.
• Article 449, Civil Code of the Philippines: Provides that a builder in bad faith loses what is built without right to indemnity.
• Article 450, Civil Code of the Philippines: Grants the landowner options against a builder in bad faith (demolition or payment of land value).
• Section 161, DENR Memorandum Circular No. 013-10 (2010): Provides that a Special Work Order cannot be a subject of titling.
• Sections 31 and 52, Presidential Decree No. 1529 (Property Registration Decree): Concerning the decree of registration and constructive notice upon registration.

Peralta, C.J. (Chairperson), Caguioa, J., Reyes, Jr., J., and Lopez, J.