G.R. No. 198878, October 15, 2014
RESIDENTS OF LOWER ATAB & TEACHERS’ VILLAGE, STO. TOMAS PROPER BARANGAY, BAGUIO CITY, represented by BEATRICE T. PULAS, CRISTINA A. LAPP AO. MICHAEL MADIGUID, FLORENCIO MABUDYANG and FERNANDO DOSALIN, Petitioners, vs. STA. MONICA INDUSTRIAL & DEVELOPMENT CORPORATION, Respondent.

FACTS

Petitioners, residents of Lower Atab & Teachers’ Village, filed a civil case for quieting of title with damages against respondent Sta. Monica Industrial and Development Corporation. They claimed to be successors-in-interest of a certain Torres, the supposed owner of an unregistered parcel of land in Baguio City, which Torres possessed and declared for tax purposes in 1918. Petitioners alleged they are in possession of the subject property in the concept of owner, have declared their respective lots for tax purposes, and paid real estate taxes. In May 2000, respondent began to erect a fence on the property, claiming ownership by virtue of Transfer Certificate of Title No. T-63184 (TCT No. T-63184). Petitioners argued that TCT No. T-63184 is null and void as it was derived from Original Certificate of Title No. O-281 (OCT No. O-281), which was declared void pursuant to Presidential Decree No. 1271 and the case of Republic v. Marcos. They sought the cancellation of TCT No. T-63184 as a cloud on their title. During proceedings, petitioners acknowledged they had applied to purchase their lots through Townsite Sales applications with the DENR. The Regional Trial Court dismissed the complaint, ruling it was a collateral attack on respondent’s title, which had become indefeasible, and that petitioners had no title to quiet. The Court of Appeals affirmed the dismissal, stating petitioners had no legal or equitable title, their tax declarations were not conclusive evidence of ownership, and the action constituted an improper collateral attack on a Torrens title.

ISSUE

1. Whether petitioners have a cause of action for quieting of title.
2. Whether the action constitutes a collateral attack on respondent’s Torrens title.
3. Whether the action is one for reversion that should be filed by the Solicitor General.
4. Whether the validation of respondent’s TCT No. T-63184 was in accordance with law.

RULING

The Supreme Court denied the petition. For an action to quiet title to prosper, the plaintiff must have a legal or equitable title or interest in the property, and the deed or claim casting a cloud on that title must be shown to be invalid. The Court held that petitioners did not possess legal title, as they had no certificate of title, nor equitable title, as their possession and tax declarations did not constitute beneficial ownership recognized by law. Their pending Townsite Sales applications did not vest any title. The action constituted a collateral attack on respondent’s Torrens title, which is prohibited under Section 48 of P.D. 1529. The Court further ruled that if respondent’s title was indeed void, the proper remedy is an action for reversion filed by the State through the Solicitor General, not a private quieting of title suit. Regarding validation, the Court noted that an annotation (Entry No. 184804-21-159) on respondent’s TCT indicated its predecessor title had been validated by the P.D. 1271 Committee, and there was no showing that the title or its derivative OCT had been declared null and void. Thus, the trial court and Court of Appeals did not err in their findings.