SECOND DIVISION
[G.R. No. 188447. September 5, 2012.]
ROGELIO R. ALFONSO, SPS. TOLENTINO AND ADELAIDA SINADJAN, ET AL., petitioners, v. REYNALDO L. MONSERRAT, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Second Division, issued a Resolution dated 05 September 2012which reads as follows:
G.R. No. 188447 (ROGELIO R. ALFONSO, SPS. TOLENTINO AND ADELAIDA SINADJAN, ET AL. v. REYNALDO L. MONSERRAT).
For resolution of the Court is the Petition for Review on Certiorari filed by Rogelio Alfonso (Alfonso), et al., assailing the Decision, 1 dated 2 April 2009, and the Resolution, dated 16 June 2009, of the Court of Appeals (CA) in CA G.R. CV No. 90757. The CA found the appeal of respondent Reynaldo Monserrat meritorious and reversed and set aside the Order dated 25 October 2007 of the Regional Trial Court (RTC), Branch 28, Sta. Cruz, Laguna and remanded this case to the lower court for further proceedings. Petitioners' motion for reconsideration was denied for lack of merit.
The Facts
Petitioner Alfonso is the owner of a parcel of land covered by TCT No. T-77747. 2 Respondent, on the other hand, is the owner of TJM Construction, a duly licensed designer, builder and contractor. 3 The rest of the petitioners are the transferees of portions of the aforementioned property of Alfonso.
On 25 July 2005, Alfonso and respondent entered into a Joint Venture Agreement (JVA) for the design and development of the subject property into a commercial and residential subdivision. As a sign of goodwill and as proof of his financial capacity to comply with his contractual obligations, respondent deposited with Alfonso the amount of P2,000,000.00. 4
After the lapse of more than five months from the execution of the JVA, however, respondent still had not commenced construction and development of the project. 5 He also failed to secure all the necessary licenses, permits and documents for the implementation of the project. 6 ScAHTI
In a letter 7 dated 3 May 2006, respondent's counsel communicated to petitioner Alfonso the decision of respondent to cancel the JVA in accordance with the terms and conditions thereof. Alfonso's counsel responded through a letter 8 dated 8 May 2006, stating that the suggestion that the JVA be cancelled is a welcome move because the prevailing atmosphere between their respective clients justifiably calls for it. Thereafter, respondent's counsel demanded from Alfonso the payment of P15,020,000.00, representing the costs of securing permits and licenses, development and administrative works, earnest money, cost of money and loss of opportunity. 9
In a letter 10 dated 25 May 2006, Alfonso informed respondent that the claim of P15,020,000.00 was not acceptable. He offered to return to respondent the earnest money and the total cost of development works in the amount of P2,650,170.00.
On 30 December 2006, respondent filed a Notice of Adverse Claim before the Register of Deeds (RD) of Sta. Cruz, Laguna to cause the registration of his claim on TCT No. T-77747. This was, however, denied on the ground that the adverse claim cannot be registered because the same does not involve an issue of possession or ownership. 11 He appealed the denial to the Land Registration Authority (LRA) by way of consulta, which office sustained the ruling of the RD. 12
Meanwhile, the project remained dormant, causing apprehension among lot buyers who were awaiting the issuance of titles in their names. This prompted Alfonso to cause the registration of the subdivision plan of the property with the RD and the issuance of 171 TCTs of the resultant lots of the subdivision in his name. He was able to convey ownership of seven subdivided lots to buyers, the other petitioners herein.
On 15 May 2007, respondent filed a petition before the RTC for the surrender of the owners' copies of the 171 TCTs involving subject property pursuant to Section 107 13 of PD 1529 (Property Registration Decree), with Alfonso and the seven lot buyers (petitioners herein) as respondents.
The Ruling of the RTC
In an Order 14 dated 25 October 2007, the RTC dismissed the petition for lack of merit, based on the following grounds:
1. Firstly, the reason of the petitioner [Monserrat] in demanding the surrender of title is admittedly for the purpose of registering the Joint Venture Agreement. However, the Notice of Adverse Claim was precisely denied because the Register of Deeds found that the Notice of Adverse Claim is not registerable [sic] because petitioners [sic] claim is purely money claim which does not affect title or possession. . . .
2. Secondly, if petitioner's claim is purely money claim, it follows that he has no legal capacity and cause of action to demand for the surrender of the titles. . . . . If the intention of petitioner is to collect from Rogelio Alfonso he should go only after his property in a more appropriate case for collection for a sum of money where he can ask for attachment of the property of his debtor. 15
The Ruling of the Court of Appeals
On appeal, the Court of Appeals reversed and set aside the Order of the RTC and remanded the case to the trial court for further proceedings.
The CA found that the petition of respondent for the surrender of owners' copies of TCTs states a cause of action. 16 It held that when the ground for dismissal is that the complaint states no cause of action, its sufficiency can only be determined by considering the facts alleged in the complaint, and no other. The test of the sufficiency of the facts alleged in a petition, to constitute a cause of action, is whether or not, admitting the facts alleged, the court could render a valid judgment upon the same in accordance with the prayer of the petition. If the court finds the allegations to be sufficient but doubts their veracity, it must deny the motion to dismiss and require the defendant to answer and then proceed to try the case. 17
The CA ruled, however, that to be able to determine whether respondent's petition may be given due course, the question of whether or not the JVA has been cancelled, being a contentious and substantial issue, should first be resolved. This issue could best be settled in a full blown trial on the merits before the lower court. 18 Under Section 2 of PD No. 1529, RTCs acting as land registration courts now have exclusive jurisdiction not only over applications for original registration of title to lands, including improvements and interests therein, but also over petitions filed after original registration of title, with power to hear and determine all questions arising upon such applications or petitions. In this case, the controversial issue relates to the enforceability or cancellation of the JVA. 19 TaDSCA
Our Ruling
We dismiss the petition.
The ruling of the trial court in SP. PET. No. 302-07 (Petition for the Surrender of Owners' Copies of TCTs) muddled the issues in this case when it included, as one of the grounds for dismissing the petition, the denial by the RD of herein respondent's Notice of Adverse Claim. The petition for the surrender of owners' copies of TCTs and the Notice of Adverse Claim are two different actions proceeding from two different causes of action. As pointed out by respondent in his appeal brief 20 before the CA, the petition filed in the trial court prays for the production of the owners' copies of the titles subject of the JVA, which is a condition sine qua non for the annotation of the JVA on the titles. The Notice of Adverse Claim, on the other hand, was presented for registration before the RD for the purpose of informing the public that respondent has a claim against Alfonso's property in accordance with Section 70 21 of PD 1529. Thus, the denial of respondent's Notice of Adverse Claim by the RD cannot and does not, by necessity, result in the dismissal of the petition for the surrender of titles in the RTC.
However, as held by the CA, in order to establish whether or not respondent is indeed entitled to the relief prayed for in his petition for surrender of owners' copies of TCTs, it is first necessary to ascertain whether or not the JVA, which is sought to be annotated on the titles, remains valid and subsisting. Alfonso maintains that by virtue of respondent's letter of 3 May 2006, the JVA has already been cancelled. Respondent claims otherwise. He points out that none of their proposals and counter-proposals have been accepted by the other; therefore, the cancellation of the JVA has not been formalized and the same still subsists. These opposing claims should first be resolved before respondent's petition in the RTC may be given due course.
WHEREFORE, the Decision of the Court of Appeals dated 2 April 2009 and its Resolution dated 16 June 2009 in CA G.R. CV No. 90757 are AFFIRMED.
SO ORDERED. aIHSEc
Very truly yours,
(SGD.) MA. LOURDES C. PERFECTODivision Clerk of Court
Footnotes
1.Penned by Associate Justice Remedios A. Salazar-Fernando with Associate Justices Fernanda Lampas Peralta and Apolinario D. Bruselas, Jr. concurring. Rollo, pp. 8-19.
2.Id. at 31-32.
3.Id. at 121.
4.Id. at 32.
5.Id. at 34.
6.Id. at 35.
7.Id. at 498-499.
8.Id. at 500-501.
9.Id. at 38.
10.Id. at 504-506.
11.Id. at 496.
12.Id. at 59-61.
13.SEC. 107. Surrender of withheld duplicate certificates. — Where it is necessary to issue a new certificate of title pursuant to any involuntary instrument which divests the title of the registered owner against his consent or where a voluntary instrument cannot be registered by reason of the refusal or failure of the holder to surrender the owner's duplicate certificate of title, the party in interest may file a petition in court to compel surrender of the same to the Register of Deeds. The court, after hearing, may order the registered owner or any person withholding the duplicate certificate to surrender the same, and direct the entry of a new certificate or memorandum upon such surrender. If the person withholding the duplicate certificate is not amenable to the process of the court, or if not for any reason the outstanding owner's duplicate certificate cannot be delivered, the court may order the annulment of the same as well as the issuance of a new certificate of title in lieu thereof. Such new certificate and all duplicates thereof shall contain a memorandum of the annulment of the outstanding duplicate.
14.Rollo, pp. 573-575.
15.Id. at 575.
16.Id. at 16.
17.Id. at 17.
18.Id. at 16.
19.Id. at 17-18.
20.Id. at 562-563.
21.SEC. 70. Adverse Claim. — Whoever claims any part or interest in registered land adverse to the registered owner, arising subsequent to the date of the original registrations, may, if no other provision is made in this Decree for registering the same, make a statement in writing setting forth fully his alleged right or interest and how or under whom acquired, a reference to the number of the certificate of title of the registered owner, the name of the registered owner, and a description of the land in which the right or interest is claimed.
xxx xxx xxx.