G.R. No. 178609 ; August 4, 2010
MANUEL P. NEY and ROMULO P. NEY, Petitioners, vs. SPOUSES CELSO P. QUIJANO and MINA N. QUIJANO, Respondents.

FACTS

Petitioners Manuel and Romulo Ney are the registered owners under TCT No. 122489 of a residential lot in Paco, Manila, on which a three-door apartment stands. Respondents, spouses Celso and Mina Quijano (Mina being the petitioners’ sister), occupy one unit. Respondents filed a complaint for reconveyance, partition, and damages before the RTC, claiming co-ownership. They alleged that Celso contributed to the purchase price but was inadvertently omitted from the deed of sale and title. They sought segregation of their portion, especially after discovering petitioners mortgaged the entire property. Petitioners countered that respondents were mere tolerated possessors and that any action was barred by prescription or laches. The RTC dismissed the complaint, upholding petitioners’ defenses.
On appeal, the Court of Appeals reversed the RTC. The CA found respondents to be co-owners based on evidence, including a “Deed of Reconveyance” executed by petitioners acknowledging respondents’ share. The CA treated the action as one for quieting of title, which is imprescriptible since respondents were in possession, and ordered partition, reconveyance of a one-third portion, and attorney’s fees. Petitioners now argue before the Supreme Court that the CA erroneously converted the action into one for quieting of title, an issue not raised in the pleadings.

ISSUE

Whether the Court of Appeals erred in treating respondents’ action as one for quieting of title and in ordering reconveyance and partition.

RULING

The Supreme Court denied the petition and affirmed the CA Decision. The Court held that the nature of an action is determined by the allegations in the complaint and the relief sought, not merely by its caption. Respondents’ complaint essentially alleged that their rightful ownership interest was omitted from the title due to petitioners’ act, creating a cloud on their title. This constitutes a cause of action for quieting of title under Article 476 of the Civil Code, which aims to remove such clouds. The Court emphasized that an action for quieting of title is imprescriptible when the plaintiff is in possession of the property, as respondents were.
On the merits, the Court found the “Deed of Reconveyance” executed by petitioners as conclusive evidence of their acknowledgment of respondents’ one-third co-ownership. This document outweighed petitioners’ bare claim of exclusive ownership based on the certificate of title. The Torrens system does not protect a title holder in bad faith or one who commits fraud. Therefore, the CA correctly ordered the partition of the property and the reconveyance of the corresponding portion to respondents to remedy the erroneous inclusion of their share in petitioners’ title. The award of attorney’s fees was also sustained.