G.R. No. 167838, August 5, 2015
JOSE V. TOLEDO, GLENN PADIERNOS AND DANILO PADIERNOS, Petitioners, vs. COURT OF APPEALS, LOURDES RAMOS, ENRIQUE RAMOS, ANTONIO RAMOS, MILAGROS RAMOS AND ANGELITA RAMOS AS HEIRS OF SOCORRO RAMOS, GUILLERMO PABLO, PRIMITIVA CRUZ AND A.R.C. MARKETING CORPORATION REPRESENTED BY ITS PRESIDENT, ALBERTO C. DY, Respondents.

FACTS

On May 5, 1958, Del Rosario Realty entered into a Contract to Sell a property in Quezon City with spouses Leonardo Faustino and Angelina Lim. On January 20, 1959, the Faustino spouses sold their rights to spouses Vicente Padiemos and Concordia Garcia, who assumed the obligations. This transfer was annotated on the title. On May 7, 1959, Pedro Del Rosario assigned his rights under the contract to Socorro A. Ramos, who approved the prior transfer to Vicente Padiemos. On January 9, 1962, Vicente Padiemos sold one-half of the property to spouses Jose and Elisa Toledo. On March 21, 1967, he sold the remaining half to spouses Virgilio and Leticia Padiemos, who later assigned their rights to their children, petitioners Glenn and Danilo Padiemos. The Toledo and Padiemos spouses paid the installments in full by 1971, built houses on the property in 1974, and paid real property taxes.
Due to execution proceedings against Socorro Ramos’s estate, the property and others were sold at auction to Guillermo Pablo and Primitiva Cruz, who later sold them to ARC Marketing. The Ramos heirs filed a Complaint for Nullity of Execution Sale (Civil Case No. Q-22850). The case was settled via a Final Compromise Agreement approved by the trial court on January 13, 1993, wherein Lourdes Ramos agreed to settle for a sum from ARC Marketing.
On April 8, 1997, petitioners Jose Toledo, Glenn Padiemos, and Danilo Padiemos filed a complaint for reconveyance and damages (Civil Case No. Q-97-30738). ARC Marketing moved to dismiss, arguing the RTC had no jurisdiction as the action was essentially to annul the judicially approved Compromise Agreement. The RTC initially denied the motion but later granted reconsideration, dismissing the complaint for lack of jurisdiction, holding it was an action for annulment of judgment. The Court of Appeals affirmed the dismissal. Petitioners assailed this, arguing their action was for reconveyance, not annulment of judgment.

ISSUE

Whether the action filed by petitioners before the RTC is one for reconveyance or for annulment of judgment.

RULING

The Supreme Court ruled for the petitioners. The action filed is one for reconveyance. The nature of an action is determined by the allegations in the complaint and the character of the relief sought. Petitioners’ complaint did not pray for the annulment of the compromise judgment; instead, it sought the cancellation of ARC Marketing’s title and the issuance of a new one in their favor, which is characteristic of an action for reconveyance. An action for reconveyance respects the decree of registration as incontrovertible but seeks to transfer the property wrongfully registered in another’s name to its rightful owner. The RTC, therefore, has jurisdiction over the action for reconveyance. The Court reversed the Court of Appeals’ decision and resolution and remanded the case to the RTC for further proceedings.