G.R. No. 167391; June 8, 2011
PHIL-VILLE DEVELOPMENT AND HOUSING CORPORATION, Petitioner, vs. MAXIMO BONIFACIO, CEFERINO R. BONIFACIO, APOLONIO B. TAN, BENITA B. CAINA, CRISPINA B. PASCUAL, ROSALIA B. DE GRACIA, TERESITA S. DORONIA, CHRISTINA GOCO AND ARSENIO C. BONIFACIO, in their capacity as the surviving heirs of the late ELEUTERIA RIVERA VDA. DE BONIFACIO, Respondents.

FACTS

Petitioner Phil-Ville Development and Housing Corporation is the registered owner of three parcels of land (Lots 1-G-1, 1-G-2, and 1-G-3) in Caloocan City, covered by Transfer Certificates of Title (TCT) Nos. 270921, 270922, and 270923. These lots form part of Lot 23-A of the Maysilo Estate originally covered by Original Certificate of Title (OCT) No. 994 registered on May 3, 1917. Phil-Ville acquired the lots by purchase on July 24, 1984.
Earlier, on September 27, 1961, a group including Eleuteria Rivera, claiming to be heirs of Maria de la Concepcion Vidal (a co-owner in OCT No. 994), filed a petition for substitution of names on OCT No. 994, which was granted by the Court of First Instance (CFI) on May 25, 1962. They later filed a petition for partition (Civil Case No. C-424). On May 22, 1996, Eleuteria Rivera filed a Supplemental Motion for partition and segregation of portions of the properties covered by OCT No. 994. The Regional Trial Court (RTC), Branch 120, Caloocan City, through Judge Jaime D. Discaya, granted the motion in an Order dated September 9, 1996, directing the segregation of portions of Lots 23, 28-A-1, and 28-A-2 and ordering the Register of Deeds to issue new titles to Eleuteria Rivera. Consequently, TCT No. C-314537 covering a portion of Lot 23 was issued in her name on September 12, 1996.
On December 26, 1996, a writ of possession was issued in Eleuteria Rivera’s favor. However, the Court of Appeals, in CA-G.R. SP No. 43009, set aside the writ and notice to vacate on February 19, 1997, ruling that a party not impleaded in a case cannot be bound by such writ. Subsequently, on April 29, 1997, the Court of Appeals in CA-G.R. SP No. 43034 granted a petition filed by Rosauro R. Aquino, setting aside the RTC’s Order of September 9, 1996, which had granted Eleuteria Rivera’s prayer for partition.
On June 5, 1997, Phil-Ville filed a complaint for quieting of title and damages against the surviving heirs of Eleuteria Rivera (who died on February 22, 1997) and the Register of Deeds of Caloocan City (Civil Case No. C-507). The RTC, Branch 122, Caloocan City, in a Decision dated March 24, 2000, ruled in favor of Phil-Ville, ordering the quieting of its titles, declaring its TCTs valid, and declaring Eleuteria Rivera’s TCT No. C-314537 null and void. The RTC based its decision on, among others, a Senate Committee Report concluding that only one OCT No. 994 exists (registered May 3, 1917) and that an OCT No. 994 purportedly registered on April 19, 1917, does not exist. The RTC also found it impossible for respondents to be heirs of Maria de la Concepcion Vidal, as Maria was born in 1903, later than Eleuteria Rivera who was born in 1901, and noted that Lot 23 is far from Lot 23-A where Phil-Ville’s lands are located.
Respondents appealed to the Court of Appeals, which dismissed Phil-Ville’s complaint in its Decision dated January 31, 2005, and denied its motion for reconsideration on March 15, 2005. Hence, this petition.

ISSUE

Whether the Court of Appeals erred in dismissing Phil-Ville’s complaint for quieting of title.

RULING

The Supreme Court GRANTED the petition, REVERSED and SET ASIDE the Decision and Resolution of the Court of Appeals, and REINSTATED the Decision of the Regional Trial Court dated March 24, 2000.
The Supreme Court held that Phil-Ville had a valid cause of action for quieting of title. An action for quieting of title is proper when the plaintiff has a legal or equitable title to the property and the defendant claims an interest adverse to that title, creating a cloud thereon. Phil-Ville, as the registered owner under valid TCTs, clearly possessed such title. The claim of the respondents, deriving from Eleuteria Rivera’s TCT No. C-314537, constituted an adverse claim that cast a cloud on Phil-Ville’s ownership. The Court found that the respondents’ title was dubious and invalid. It affirmed the RTC’s findings based on the Senate Committee Report that there is only one OCT No. 994 registered on May 3, 1917, and that the title from which respondents derived their claim (purportedly from an April 19, 1917 OCT) was spurious. Furthermore, the Court noted the impossibility of the respondents’ heirship claim, as Eleuteria Rivera was born before the alleged ancestor, Maria de la Concepcion Vidal. The Court also emphasized that the Court of Appeals had already nullified the very Order (September 9, 1996) that granted Eleuteria Rivera’s partition and led to the issuance of her TCT, rendering that title void. Therefore, Phil-Ville’s titles, being genuine and regularly issued, must be upheld, and the cloud created by the respondents’ invalid title must be removed.