A duly executed contract [or instrument] carries with it the presumption of validity."[1] Claims adverse to such presumption grounded on fraud cannot be sustained by mere construction as fraud must be specifically alleged and proved in all cases. The party who impugns its regularity has the burden of presenting clear and convincing evidence of irregularity.[2]
Before all else, we acknowledge that the complete resolution of the issues presented before us requires a determination of facts, which the Court — not being a trier of facts — does not delve into in appeals on certiorari. There are instances, however, when the Court may proceed to review factual questions along with the legal ones such as in this case, wherein the factual findings of the RTC and the CA are conflicting.[34]
The Verification and Certification Against Forum Shopping substantially complied with the Rules.
We have consistently held that the requirement on "[v]erification is deemed substantially complied with when one who has ample knowledge to swear to the truth of the allegations in the x x x petition signs the verification[.]"[35] Similarly, "when all the x x x petitioners share a common interest and invoke a common cause of action x x x, the signature of only one of them in the certification against forum shopping substantially complies with the Rule."[36]
Here, petitioners share a common interest and have similar claims on the properties. Their claims of ownership over the properties against Concepcion hinge upon the same set of documents, to wit: the Deed of Sale with Right of Repurchase, the Deed of Quitclaim and Waiver of Rights, and the OCTs and corresponding TDs in their names. Thus, contrary to Concepcion's argument, the Petition is not dismissible merely because only three out of the eight petitioners signed the Verification/Certification.
Petitioners' complaint actually constitutes an accion reivindicatoria.
Petitioners' complaint may have been captioned as quieting of title, but an assiduous examination of petitioners' averments indubitably show that the remedy sought constitutes an accion reivindicatoria.
An action to quiet the title or remove clouds over the title is a special civil action specifically governed by Rule 63 of the Rules on declaratory relief and similar remedies.
Distinguished from ordinary civil actions, the subject matter in special civil actions under Rule 63 is a deed, will, contract or other written instrument, statute, executive order or regulation, or ordinance.
The issue is the validity or construction of documents; and the relief sought is the declaration of the parties' rights or duties vis-à-vis, the questioned documents. Being declaratory in nature, this remedy presupposes that there has been no breach or violation of the instruments involved, unlike in ordinary civil actions which necessitates the existence of a violation of a right as an element of a cause of action. Thus, generally, judgments in remedies of such nature do not entail any executional process as the only relief to be properly granted is a declaration of the rights and duties of the parties under an instrument.[37]
Articles 476 and 477 of the NCC state:
ART. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title.
ART. 477. The plaintiff must have legal or equitable title to, or interest in the real property which is the subject-matter of the action. He need not be in possession of said property.
Parsed from these provisions, two indispensable requisites must concur for an action for quieting of title to prosper, namely:
(1) the plaintiff has a legal or an equitable title to or interest in the real property subject of the action; and
(2) the deed, claim, encumbrance, or proceeding claimed to be casting cloud on their title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy.[38]
Here, petitioners' cause of action is grounded upon their claims of ownership, which they argue to have been clouded by Concepcion's exercise of proprietary rights — instituting tenants and collecting rentals and products.
What they perceive as clouds over their title were Concepcion's intrusive acts of dominion over the properties. In Titong v. Court of Appeals,[39] we emphatically ruled that physical intrusion is not a ground for quieting of title. With an allegation of a violation (physical intrusion) of a right (ownership), petitioners clearly do [not] seek a declaratory relief or mere removal of cloud over their title. Ultimately, they seek to recover full possession of the properties as an element of their ownership, which was disturbed by Concepcion's physical intrusion.
Thus, petitioners' claims and arguments clearly speak of an accion reivindicatoria — a suit to recover full possession of a parcel of land as an element of ownership.[40]
We have consistently held that the true nature of the action is not determined by the caption of the pleading, but by the allegations it contains. The court should grant the relief warranted by the allegations, substantiated by proof, even if no such relief or a different relief is prayed for.[41]
Verily, as the allegations, in this case, constitute an accion reivindicatoria, the court should determine ownership of the properties and award possession to the lawful owner,[42] even if the complaint prayed for the quieting of title. This was precisely the approach taken by the trial court.
RE: mere non-compliance with Article 1607 is not proof of fraud that would defeat the vendee a retro's title to the properties sold.
Article 1607 of the NCC states:
ART. 1607. In case of real property, the consolidation of ownership in the vendee by virtue of the failure of the vendor to comply with the provisions of Article 1616 shall not be recorded in the Registry of Property without a judicial order, after the vendor has been duly heard. (Emphasis supplied)
Indeed, the provision requires a judicial order before the consolidated title in a pacto de retro sale may be registered in the Registry of Property. Such requirement was devised as a counter measure to the prevalent practice of simulating pacto de retro sales only to circumvent usury laws or the prohibition against pactum commissorium arrangements,[47] i.e., the automatic appropriation by the creditor of the thing mortgaged or pledged in the event of non-payment of the principal obligation. Precisely, to that end, the law requires courts to determine the true agreement between the parties or the genuineness of the stipulations in a pacto de retro sale. It goes without saying then that, without such judicial determination, it is premature to declare the real intentions of the parties, especially so to conclude that fraud attended the execution of a pacto de retro sale. Contrary to the CA's conclusion, thus, mere non-compliance with Article 1607 is not proof of fraud that would defeat the vendee a retro's title to the properties sold.
In this light, we cannot agree with the CA in resorting to inference and construction to sustain Concepcion's claim of fraud. We must emphasize, fraud is not presumed;[50] it cannot be demonstrated by mere construction, but must be proven by the party alleging it in all cases.[51] In contrast, notarial documents are entitled to full faith and credit upon its face. They enjoy the presumption of regularity, and are prima facie evidence of the facts stated therein, which can be overturned only by evidence to the contrary that is clear and convincing—even preponderant evidence does not suffice.[52] Thus, absent clear and convincing evidence of fraud, the authenticity and due execution of the notarized deeds must be upheld.
RE: The essence of a pacto de retro sale
"The essence of a pacto de retro sale is that title and ownership of the property sold are immediately vested in the vendee a retro, subject [only] to the resolutory condition of repurchase by the vendor a retro within the stipulated period."[53] Once the vendor a retro fails to redeem the property within the agreed period, absolute ownership is vested upon the vendee a retro by operation of law.[54] Here, as agreed upon under the Deed of Sale with Right of Repurchase, Concepcion had five years or until 1983 to repurchase the properties, but as admitted in the quitclaim and waiver of rights, she failed to do so.[55] Without anything more required from both parties, thus, irrevocable title to the properties were automatically transferred to Isagani in 1983 since the resolutory condition was not fulfilled.
For instance, our pronouncement in Spouses Cruz v. Leis,[57] is highly-instructive:
It bears stressing that notwithstanding Article 1607, the recording in the Registry of Property of the consolidation of ownership of the vendee is not a condition sine qua non to the transfer of ownership. Petitioners are the owners of the subject property since [none of the vendors with right to repurchase] redeemed the same within the one-year period stipulated in the "Kasunduan." The essence of a pacto de retro sale is that title and ownership of the property sold are immediately vested in the vendee a retro, subject to the resolutory condition of repurchase by the vendor a retro within the stipulated period. Failure thus of the vendor a retro to perform said resolutory condition vests upon the vendee by operation of law absolute title and ownership over the property sold. As title is already vested in the vendee a retro, his failure to consolidate his title under Article 1607 of the Civil Code does not impair such title or ownership for the method prescribed thereunder is merely for the purpose of registering the consolidated title.[58] (Emphasis supplied; citation omitted)
xxx registration does not create or vest title as it is not a mode of acquiring ownership.[65] It is merely the evidence of title. Our land registration laws do not give the holder any better title than what he or she actually has. Conversely, registration is not a convenient means to divest ownership rights duly vested through legal modes of acquiring ownership[66] such as in this case by operation of law. Therefore, Isagani's irrevocable title remained undefeated by such premature registration.
Sps. VELARDE vs. HEIRS OF CONCEPCION CANDARI, G.R. No. 190057. October 17, 2022
LOPEZ, M., J.
Footnotes
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