G.R. No. 168800 ; April 16, 2009
NEW REGENT SOURCES, INC., Petitioner, vs. TEOFILO VICTOR TANJUATCO, JR., and VICENTE CUEVAS, Respondents.

FACTS

Petitioner New Regent Sources, Inc. (NRSI) filed a Complaint for Rescission/Declaration of Nullity of Contract, Reconveyance and Damages against respondent Teofilo Victor Tanjuatco, Jr. and the Register of Deeds of Calamba. NRSI alleged that in 1994, it authorized its Chairman and President, Vicente P. Cuevas III, to apply for the acquisition of two parcels of land based on its right of accretion. Cuevas instead applied for the lots in his own name, paying the Bureau of Lands. On January 2, 1995, Cuevas and his wife executed a Voting Trust Agreement over their shares. Pending approval of the application, Cuevas assigned his right to Tanjuatco for ₱85,000. On March 12, 1996, the Director of Lands approved the transfer of rights from Cuevas to Tanjuatco, and Transfer Certificates of Title were issued in Tanjuatco’s name. Tanjuatco, in his Answer, asserted the complaint stated no cause of action against him, arguing any fraud was committed by Cuevas and that he had no knowledge of any agreement between Cuevas and NRSI. The trial court denied Tanjuatco’s motion to dismiss after a preliminary hearing and ordered NRSI to implead Cuevas, who was later declared in default. After NRSI completed presenting its evidence, Tanjuatco filed a Demurrer to Evidence, which the Regional Trial Court granted, dismissing the complaint. The RTC held Tanjuatco was an innocent purchaser for value and cited the Order of the Director of Lands and insufficiencies in the complaint’s allegations. NRSI’s motion for reconsideration was denied.

ISSUE

Whether the trial court erred in dismissing the case on demurrer to evidence.

RULING

No, the trial court did not err. The Supreme Court denied the petition. The Court found that the petition raised questions of fact, which are not proper in a petition for review under Rule 45. On the merits, the Court agreed with the trial court’s dismissal. For an action for reconveyance to succeed, the claimant must prove ownership, that the registration was procured through fraud, that the property has not passed to an innocent purchaser for value, and that the action was filed within the prescribed period. NRSI failed to meet these requisites. It anchored its claim on a right of accretion but presented no evidence to prove the gradual and imperceptible deposition by river waters required by Article 457 of the Civil Code. The subject lands were part of the public dominion (a dried river bed) and were alienated by the Republic of the Philippines to Tanjuatco. NRSI failed to prove that Cuevas was authorized to buy the lands on its behalf, as it did not present corporate by-laws or a resolution. The Court also upheld the finding that Tanjuatco was an innocent purchaser for value, as his titles were derived from an Original Certificate of Title in the name of the Republic, and a person dealing with registered land may rely on the correctness of the certificate of title. The Court noted that Tanjuatco, having filed a demurrer to evidence, had not yet presented his evidence, which explained why the Order of the Director of Lands was not formally offered. The dismissal was proper.