Bacabac v. Spouses Tiu

FIRST DIVISION

[G.R. No. 228126. June 30, 2021.]

EPIFANIO BACABAC, BENJAMIN CORRES, ROBERTO MENDIGO, ROSAL PARAISO, RODOLFO VIVERO, JOINED BY THEIR RESPECTIVE SPOUSES, petitioners,vs. SPOUSES RODOLFO and CONCEPCION TIU, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution dated June 30, 2021which reads as follows:

"G.R. No. 228126 (Epifanio Bacabac, Benjamin Corres, Roberto Mendigo, Rosal Paraiso, Rodolfo Vivero, joined by their respective spouses,Petitioners, v. Spouses Rodolfo and Concepcion Tiu,Respondents). — In this Petition for Review (Petition), 1 petitioners seek to reverse and set aside the Decision dated 31 May 2016 2 and Resolution dated 29 September 2016 3 promulgated by the Court of Appeals (CA) in CA-G.R. CEB CV No. 02169.

Antecedents

The case proceeds from a Complaint for Quieting of Title, Declaration of Nullity of Documents with Prayer for Issuance of a Temporary Restraining Order, Writ of Preliminary Injunction, and Damages filed by the respondents against petitioners. 4 It centers on a parcel of land located at Barangay Sto. Niño, Tanauan, Leyte which the respondents lay claim on. They state that they bought the property from Commercial Credit Corporation of Cebu in 1981, as shown by a Deed of Absolute Sale. 5 Immediately after the purchase, respondent Rodolfo Tiu declared the same under Tax Declaration No. 00592-R11 and been paying realty taxes ever since. Respondents also registered the sale before the Register of Deeds pursuant to Act No. 3344. 6

A few years later, respondents noticed small nipa huts being built by petitioners. Respondents demanded them to vacate. However, petitioners pleaded to be allowed to temporarily stay on the property, promising to leave the premises the moment respondents need the property. Eventually, respondents agreed, provided that petitioners pay a measly rent of Php20.00 per month. 7

Petitioners, however, stopped paying rent after a few years. Respondents also noticed that petitioners renovated their houses with concrete and permanent materials and subdivided the property among themselves. When respondents confronted them, petitioners declared ownership over the property. This prompted respondents to demand from petitioners to vacate the premises. A conciliation conference was subsequently held at the barangay8 and for the first time, petitioners introduced a Deed of Absolute Sale 9 showing that they purchased the property from Development Bank of the Philippines (DBP) on 3 October 1990. Thus, respondents were compelled to file a complaint for Quieting of Title, Declaration of Nullity of Documents with Prayer for Issuance of a Temporary Restraining Order, Writ of Preliminary Injunction, and Damages with the Regional Trial Court of Tacloban City (RTC).

Summons were duly served to petitioners, but despite this, they failed to file an answer within the reglementary period. Hence, petitioners were declared in default in an Order dated 16 May 2003. 10 In the same Order, the RTC appointed the Branch Clerk of Court, Atty. Purita Gobenciong (Atty. Gobenciong), as Commissioner to hear and receive the respondents' evidence.

On 11 June 2003 petitioners' counsel of record, Atty. Arvin Antoni, entered his appearance but did not take any action on the case. It took several months before petitioners, through their collaborating counsel, Atty. Rachel Ramos, moved to set aside the RTC's Order declaring them in default. 11

In an Order dated 29 April 2004, the RTC denied appellants' Motion to Set Aside Order of Default. Respondents then moved to reconsider the aforesaid Order but the same was denied. 12

Respondents elevated their case via Petition for Certiorari with the CA, but was dismissed in a Resolution promulgated on 23 July 2004. The said Resolution attained finality on 02 June 2005 after respondents' motion for reconsideration was denied.

Meanwhile, during the ex-parte hearings, respondent Rodolfo Tiu was presented as a sole witness. 13 It was found that a discrepancy existed between the lot area indicated in respondents' Deed of Absolute Sale and the tax declarations they presented. 14 Respondent Rodolfo Tiu explained that originally, the lot area was only 893.24 sq.m., but after tax mapping, the lot area was found to be 1,084 sq.m. He also identified and offered in evidence several documents, including the two (2) conflicting Deeds of Absolute Sale, Tax Declarations, Tax Receipts, and the Demand Letter he sent to petitioners. 15

Respondents also presented a Certification 16 from the Municipal Assessor showing changes in ownership on the subject property as follows: (a) from Pelagio Tecson (Tax Declaration Nos. 23965, 24097 and 24959) to his son, Conrado Tecson (Tax Declaration No. 10547); (b) from Conrado Tecson to the Commercial Credit Corporation of Cebu (Tax Declaration No. 13703); and (c) from the latter to the present owners, spouses Tiu (Tax Declaration Nos. 14521, 15867, 00510, 00551, 00566 and 00592). The Certification also contained a note that: "As per records, this property was not transferred to the Development Bank of the Philippines." 17

Following the conclusion of the ex-parte hearing, a Commissioner's Report dated 18 September 2003 was submitted with the RTC. 18

Ruling of the RTC

After examining the evidence presented by respondents, the RTC ruled that preponderance of evidence weighed heavily in their favor. Hence, it nullified the Deed of Absolute Sale executed by petitioners and the DBP and declared respondents as the absolute legal owners of the property covered by Tax Declaration No. 00592-R-11 (subject property) in its Decision dated 17 August 2006, to wit:

WHEREFORE, premises considered, the Deed of Absolute Sale dated October 3, 1990 is hereby declared null and void, that the herein plaintiffs are declared absolute legal owners of the property covered by Tax Declaration No. 00592, R-11 in the name of Spouses Rodolfo and Conception n Tiu; the defendants are likewise hereby ordered to vacate the property, surrender its peaceful possession to the plaintiffs and to pay the plaintiffs P50,000.00 in attorney's fees; P15,000.00 in litigation expenses and P15,000.00 in exemplary damages.

SO ORDERED.19

Ruling of the CA

On 31 May 2016, the CA promulgated the assailed Decision, which affirmed with modification the RTC's ruling, viz.:

WHEREFORE, the appeal is DENIED. The Decision dated 17 August 2006 of the Regional Trial Court of Tacloban City, Branch 8, in Civil Case No. 2003-02-30 is AFFIRMED with MODIFICATION in that the award of attorney's fees, litigation expenses and exemplary damages are DELETED.

SO ORDERED.20

According to the CA, the RTC's Order declaring petitioners in default had long attained finality as evidenced by an Entry of Judgment. Thus, they cannot ask the CA to amend the same. Nonetheless, petitioners may still appeal from the default judgment but on limited grounds. Unfortunately, petitioners' appeal does not fall within any of the allowable grounds. The CA further ruled that respondents were able to prove the material allegations in their Complaint for Quieting of Title and are entitled to the reliefs granted unto them. However, the award of attorney's fees, litigation expenses, and exemplary damages were deleted for lack of basis. 21

Moreover, it appears that one of the contentions raised by the petitioners on appeal is that the Deed of Absolute Sale between respondents and Commercial Credit Corporation of Cebu offered in evidence by respondents was a mere photocopy and should not have been admitted. But such contention was not touched upon by the CA.

Issues

The Court is now asked to determine if the CA correctly affirmed the ruling of the RTC granting respondents' action to quiet title and nullifying the Deed of Sale executed by petitioners and the DBP over the subject property.

Ruling of the Court

A party declared in default

A defending party declared in default loses standing in the trial court and the right to adduce evidence and present defense. However, such party retains the right to appeal from the judgment by default, albeit limited to the following: (1) the failure of the plaintiff to prove the material allegations of the complaint; (2) the decision is contrary to law; and (3) the amount of judgment is excessive or different in kind from that prayed for. 22 After all, a defendant declared in default is thereby precluded from asking for the reversal of the assailed judgment based on evidence he or she submitted on appeal. Otherwise, it would allow the defaulting party to present evidence, which was a right already lost in the trial court. 23

In the present case, the Court takes notice that petitioners, in their appeal from the judgment by default before the CA, argued that the RTC erred in declaring respondents had preponderance of evidence and are the true owners of the property. 24 To Our mind, these arguments pertain to respondents' failure to prove the material allegations of the complaint. Hence, it was inaccurate for the CA to state in its assailed decision that "the arguments proffered by the appellants do not fall under any of the three allowable grounds that may be raised in appeals from a judgment by default." 25

We are aware that eventually, the CA discussed in its assailed decision the issue of whether or not respondents were able to prove the material allegations in their complaint for quieting of title. And it is from this context that the Court examines the present case. Indeed, petitioners' default does not leave them entirely defenseless and without recourse. The rules ensure that any judgment rendered by the court is in accordance with the evidence required by the law.

Although petitioners would not be in a position to object, elementary justice requires that only legal evidence should be considered against them. If the same should prove insufficient to justify a judgment for respondents as plaintiff, the complaint must be dismissed. And if a favorable judgment is justifiable, it cannot exceed in amount or be different in kind from what is prayed for in the complaint. 26

Respondents failed proved the

An action for quieting of title is a common law remedy for the removal of any cloud, doubt or uncertainty affecting title to real property. The Complainant only needs to prove the following indispensable requisites for the said action to prosper: (1) the plaintiff or complainant has a 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 the title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or efficacy. 27 Legal title denotes registered ownership, while equitable title means beneficial ownership. 28Hence, despite petitioners' default, the evidence adduced by respondents in this case must be sufficient to prove their legal or equitable title to or interest in the subject property and the invalidity of the Deed of Absolute Sale dated 3 October 1990 executed by the DBP in favor of petitioners over the same land.

Petitioners contend that the Deed of Absolute Sale between respondents and Commercial Credit Corporation of Cebu, offered in evidence by respondents, was a mere photocopy and such was fatal in establishing their equitable title of the property.

We agree with the petitioners. The failure to present the original Deed of Sale is fatal to respondents' cause.

In the case of Sps. Basa v. Vda. De Senly Loy, 29 We ruled that failure to present the original copies of the deed of sale without explanation amounts to failure of a party to show their claimed right or title to the disputed property, which is an essential element in a suit for quieting of title. Hence, it does not matter if such failure was only raised for the first time by herein petitioners on appeal. Essentially, petitioners are merely asserting that respondents failed to prove the material allegations of the complaint since the deed of sale they executed with the Commercial Credit Corporation of Cebu is inadmissible in evidence, being a mere photocopy.

Our ruling in Otero v. Tan30 is enlightening:

Thus, essentially, Otero asserts that Tan failed to prove the material allegations of his complaint since the statements of account which he presented are inadmissible in evidence. While the RTC and the CA, in resolving Otero's appeal from the default judgment of the MTCC, were only required to examine the pieces of evidence that were presented by Tan, the CA erred in brushing aside Otero's arguments with respect to the admissibility of the said statements of account on the ground that the latter had already waived any defense or objection which he may have against Tan's claim.

Contrary to the CA's disquisition, it is not accurate to state that having been declared in default by the MTCC, Otero is already deemed to have waived any and all defenses which he may have against Tan's claim. While it may be said that by defaulting, the defendant leaves himself at the mercy of the court, the rules nevertheless see to it that any judgment against him must be in accordance with the evidence required by law. The evidence of the plaintiff, presented in the defendant's absence, cannot be admitted if it is basically incompetent. Although the defendant would not be in a position to object, elementary justice requires that only legal evidence should be considered against him. If the same should prove insufficient to justify a judgment for the plaintiff, the complaint must be dismissed. And if a favorable judgment is justifiable, it cannot exceed in amount or be different in kind from what is prayed for in the complaint. (Citations omitted)

But this is not the only reason why the Court militates to rule in respondents' favor. By the evidence they presented, respondents failed to establish that they have title over the property, or at the very least, their title is superior compared to the petitioners.

First, respondents bought the subject property under Tax Declaration No. 13703 from Commercial Credit Corp. through a Deed of Absolute Sale dated 20 August 1981. Meanwhile, the Deed of Absolute Sale dated 03 October 1990 executed by the DBP and petitioners indicates DBP as the owner of a parcel of land under Tax Declaration No. 24097.

Referring to the Certification dated 23 January 2003 issued by the Office of the Municipal Assessor, the tax declarations issued over the subject property was traced from Tax Declaration Nos. 23965, 24097 and 24959 under the original owner, Pelagio O. Tecson, to Tax Declaration No. 10547 in the name of his son, Conrado Tecson, then to Tax Declaration No. 13703 under Commercial Credit Corp., and finally to Tax Declaration Nos. 14521, 15867, 00510, 00551, 00566 and 00592 under respondent Rodolfo Tiu, viz.:

TRACER

 

R11	00592-	Rodolfo A. Tiu
R10	00566-	-do-
R9	00551-	-do-
R8	00510-	-do-
R7	15867-	-do-
R6	14521-	-do- (TRANSFER) RODULFO A. TIU 9/1/1981
R5	13703-	Commercial Credit Corporation
R6	10547-	Conrado Tecson
R3	24959-	-do-
R3	24097-	-do-
R3	23965-	Pelagio O. Tecson

Note: As per records this property was not transferred to the Development Bank of the Philippines. 31 (Emphasis supplied)

 

From the foregoing, the issuance of Tax Declaration No. 24097, from which the DBP predicates its ownership, came before the issuance of Tax Declaration No. 13703 in the name of Commercial Credit Corp. Hence, there appears to be an earlier transfer of ownership of the subject property in favor of the DBP.

Unfortunately, respondents never presented any proof to show the invalidity of the supposed ownership of DBP, petitioners' predecessor-in-interest, over the subject land. There was likewise no proof to substantiate the invalidity of petitioners' claim of ownership thereon. And while respondents presented a certification by the Municipal Assessor with a note stating that the subject property "was not transferred to the Development Bank of the Philippines," this can neither rule out the DBP's professed ownership of the subject land nor prove the invalidity of the Deed of Sale dated 03 October 1990 executed in favor of petitioners. After all, tax declarations and receipts are not conclusive evidence of ownership or of the right to possess a land when not supported by any other evidence. The fact that the disputed property may have been declared for taxation purposes in the names of the applicants for registration or of their predecessors-in-interest does not necessarily amount to ownership. These are merely indicia of a claim of ownership." 32

Likewise, the lack of proof as to respondents' actual possession of the subject property does not advance their cause. While respondents claim they allowed petitioners to temporarily occupy the subject property on the condition they pay rent, there was no proof of any lease contract or even receipt of rental payments. These would have bolstered respondents' factual allegations anent the alleged illegal possession of petitioners over the subject property.

Furthermore, the land areas as appearing in respondents' deed of absolute sale and their tax declaration are inconsistent. This inconsistency was never accounted for except for the sole testimony of respondent Rodolfo Tiu who explained every nook and cranny on his own. This of course has no bearing for being hearsay and only adds up to the doubts We have over respondents' title.

While it may be said that by defaulting, petitioners left themselves at the mercy of the court, the rules nevertheless see to it that any judgment against them must be in accordance with the evidence required by law. If the same should prove insufficient to justify a judgment for respondents, the complaint must be dismissed. 33

Based on the totality of the evidence presented, respondents ultimately failed to prove the material allegations of their complaint. They are therefore not entitled to the grant of their action to quiet title nor to the reliefs they prayed for in their complaint.

WHEREFORE, premises considered, the Petition is GRANTED. The assailed Decision dated 31 May 2016 and Resolution dated 29 September 2016 promulgated by the Court of Appeals (CA) in CA-G.R. CEB CV No. 02169 are hereby REVERSED and SET ASIDE. The complaint filed by respondents in Civil Case No. 2003-02-30 is DISMISSED.

SO ORDERED."

By authority of the Court:

(SGD.) LIBRADA C. BUENADivision Clerk of Court

By:

MARIA TERESA B. SIBULODeputy Division Clerk of Court

 

Footnotes

1.Rollo, pp. 13-40.

2.Id. at 46-58; penned by Associate Justice Pablito A. Perez and concurred in by Associate Justices Pamela Ann Abella Maxino and Gabriel T. Robeniol of the Twentieth (20th) Division, Court of Appeals, Cebu.

3.Id. at 60-61.

4.Id. at 346.

5.Id. at 121.

6.Id. at 48.

7.Id.

8.Id. at 183; Office of the Brgy. Chairman, Brgy. Sto. Niño, Tanauan, Leyte.

9.Id. at 140-141.

10.Id. at 346.

11.Id.

12.Id.

13.Id. at 185.

14.Id. at 184.

15.Id. at 187.

16.Id. at 180; Exhibit "M" of the evidence of the Complainants.

17.Id.

18.Id. at 47-48.

19.Id. at 352.

20.Id. at 56.

21.Id. at 50-56.

22.Arquero v. Court of Appeals, 673 Phil. 545, 557 (2011), G.R. No. 168053, 21 September 2011 [Per J. Peralta]; see also Otero v. Tan, 692 Phil. 714, 725 (2012), G.R. No. 200134, 15 August 2012 [Per J. Reyes], citing Martinez v. Republic, 536 Phil. 868 (2006), G.R. No. 160895, 30 October 2006 [Per J. Tinga].

23.See Royal Plains View, Inc. v. Mejia, G.R. No. 230832, 12 November 2018 [Per J. Reyes, Jr.].

24.Rollo, p. 50.

25.Id. at 52.

26.Otero v. Tan, supra at note 22 at 727, citingTanhu v. Judge Ramolete, 160 Phil. 1101, 1126 (1975), G.R. No. L-40098, 29 August 1975 [Per J. Barredo].

27.Quintos v. Nicolas, 736 Phil. 438, 450 (2014), G.R. No. 210252, 16 June 2014 [Per J. Velasco]; see also Spouses Basa v. Loy Vda. De Senly Loy, G.R. No. 204131, 04 June 2018 [Per J. Del Castillo].

28.Mananquil v. Moico, 699 Phil. 120, 122 (2012), G.R. No. 180076, 21 November 2012 [Per J. Del Castillo].

29.Supra at note 27.

30.Otero v. Tan, supra at note 22 at 726-727.

31.Supra at note 13.

32.Heirs of Villanueva v. Heirs of Mendoza, 810 Phil. 172, 184 (2017), G.R. No. 209132, 05 June 2017 [Per J. Peralta], citing Republic v. Manimtim, 661 Phil. 158, 174 (2011), G.R. No. 169599, 16 March 2011 [Per J. Mendoza].

33.Supra at note 26.

n Note from the Publisher: Copied verbatim from the official document.