GR 198647; (November, 2017) (Digest)
G.R. No. 198647 November 20, 2017
SN ABOITIZ POWER-MAGAT, INC., Petitioner vs. THE MUNICIPALITY OF ALFONSO LISTA, IFUGAO, represented by the Municipal Mayor, Respondent
FACTS
The Municipality of Alfonso Lista, Ifugao, filed an amended complaint alleging that the National Power Corporation (NPC) fraudulently secured Special Patent No. 3723 and Original Certificate of Title (OCT) No. 0-1 by misrepresenting that certain parcels of land were located in Barangay General Aguinaldo, Ramon, Isabela, when they were actually situated in Barangay Sto. Domingo, Alfonso Lista, Ifugao. The respondent municipality asserted that this act deprived it of territorial jurisdiction and corresponding tax revenues. The property was subsequently transferred to petitioner SN Aboitiz Power-Magat, Inc. (SNAP). The municipality prayed for the declaration of nullity of the patent and title or, alternatively, for the amendment of the documents to reflect the correct location.
Petitioner SNAP filed a Motion to Dismiss on grounds of prescription and failure to state a cause of action, contending it held a valid transfer certificate of title. The Regional Trial Court (RTC) denied the motion, a ruling affirmed by the Court of Appeals (CA), which held that the issues required a full trial on the merits.
ISSUE
Whether the amended complaint filed by the respondent municipality stated a sufficient cause of action to warrant a trial.
RULING
The Supreme Court granted the petition and dismissed the amended complaint for failure to state a cause of action. The Court clarified that an action for nullification of title requires the claimant to allege a pre-existing right of ownership over the property, coupled with fraud or mistake in the issuance of the title. The respondent municipality explicitly disclaimed ownership, grounding its suit solely on the alleged deprivation of territorial jurisdiction due to the fraudulent mislocation of the land in the survey and title.
The Court ruled that this claim of territorial jurisdiction is essentially a boundary dispute between the Municipality of Alfonso Lista, Ifugao, and the Municipality of Ramon, Isabela. Under Section 118 of the Local Government Code, such boundary disputes are administrative in nature and must be resolved by the respective Sanggunians (local councils) of the concerned local government units, not through a judicial action for nullification of title. Since the municipality’s complaint did not and could not validly assert a cause of action for annulment of title—lacking an allegation of ownership—and as the core issue of territorial jurisdiction falls outside the court’s authority in such a suit, the dismissal of the case was proper. The RTC and CA erred in not dismissing the complaint.