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LOLOY UNDURAN v. RAMON ABERASTURI, GR No.

181284, 2015-10-20

Facts:

Petitioners... are members of the Miarayon, Lapok, Lirongan, Talaandig Tribal Association (MILALITTRA),
or Talaandig tribe, who claimed to have been living since birth on the land located at Barangay
Miarayon, Talakag,... Bukidnon, Mindanao, which they inherited from their forefathers.

Respondents, represented by attorney-in-fact Ramon Aberasturi, claimed to be the lawful owners and
possessor of an unregistered parcel of agricultural land

On March 3, 2004, respondents filed a Petition for Accion Reivindicatoria, with Prayer for the Issuance of
a Temporary Restraining Order or Preliminary Prohibitory Injunction with Damages... before the
Regional Trial Court of Manolo Fortich, Bukidnon (RTC)

On March 23, 2004, the rest of the petitioners filed their Motion to Dismiss, alleging that the RTC had no
jurisdiction over the case.

Certificate of Ancestral Domain

Title (CADT)

As awardees of a CADT, petitioners argued that NCIP has exclusive and original jurisdiction over the
case, as the subject matter concerns a dispute and controversy over an ancestral land/domain of
Indigenous Cultural

Communities (ICCs)/Indigenous Peoples (IPs).

On July 1, 2004, the NCIP through Atty. Melanie Pimentel, filed a Motion to Refer the Case to the
Regional Hearing Office-National Commission on Indigenous Peoples (RHO-NCIP), alleging that the RTC
had no jurisdiction over the subject matter.

Issues:

In resolving the pivotal issue of which between the RTC and the NCIP has jurisdiction over the
respondents' amended complaint,

Ruling:

The petition has no merit.

Court disagrees with their contention that petitioners do not have legal capacity or standing and locus
standi to file the petition, for failure to show that they are members of IPs/ICCs, or that they are
authorized to... represent the Talaandig tribe.

That petitioners are the real parties in interest can be gleaned from the Entry of Appearance with
Motion to Refer the Case to the Regional Hearing Office of the NCIP[12] filed by the NCIP Special
Transition Team-Quick Response Unit (STRAT-QRU). The STRAT-QRU counsels alleged therein that the
respondents' complaint for recovery of ownership (accion... reinvidicatoria) sought to recover an
unregistered real property situated in Miarayon, Bukidnon, from petitioners, all of whom are, with the
exception of Nestor Macapayag and Mark Brazil, member-beneficiaries of CADT No. R10-TAL-0703-0010
issued by the NCIP in the name of... the Talaandig Indigenous Peoples, located at Talakag, Province of
Bukidnon. In support of their allegation, petitioners presented a certification[13] that the disputed land
is within the area covered by the same CADT, and the NCIP List of Beneficiaries of

Talaandig Ancestral Domain of Miarayon, Lirongan, Lapok, San Miguel, Talakag, Bukidnon.[

In contrast, respondents failed to submit any evidence to dispute petitioners' claim that they are
members of the Talaandig Tribe. Hence, respondents' contention... that petitioners have no legal
standing to file the petition, is without merit.

Having spelled out the jurisdictions conferred by law to the RTC and the NCIP over the subject matters
of their respective cases, the Court now examines the allegations in the original and amended
complaints to find out which tribunal may properly exercise jurisdiction over this... case.

respondents traced the provenance of their title over said land to one Mamerto Decano, a Chieftain of
Talaandig tribe, by virtue of a Deed of Sale executed on July 27, 1957

They claimed that by means of fraud, stealth and surreptitious means, petitioners entered the said...
land, without permission and against the consent of the landowners, caused damages therein and
harassed respondents by indiscriminately firing upon their farm workers.

The Court therefore finds that the CA correctly ruled that the subject matter of the amended complaint
based on allegations therein was within the jurisdiction of the RTC.

contrary to petitioners' contention, the mere fact that this case involves members of ICCs/IPs and their
ancestral land is not enough to for it to fall under the jurisdiction of the NCIP under Section 66 of the
IPRA, to wit:

A careful review of Section 66 shows that the NCIP shall have jurisdiction over claims and disputes
involving rights of ICCs/IPs only when they arise between or among parties belonging to the same
ICC/IP.

The qualifying provision requires two conditions before such disputes may be brought before the NCIP,
namely: (1) exhaustion of remedies under customary laws of the parties, and (2) compliance with
condition precedent through the said certification by the Council of Elders/Leaders.

In this case, while most of the petitioners belong to Talaandig Tribe, respondents do not belong to the
same ICC/IP.
Thus, even if the real issue involves a dispute over land which appear to be located within the ancestral
domain of the Talaandig Tribe, it is not the NCIP but the RTC which shall have the power to hear, try
and... decide this case.

the Court declares Rule IX, Section 1 of the IPRA-IRR,[23] Rule III, Section 5[24] and Rule IV, Sections 13
and 14 of the NCIP Rules[25] as null and void insofar as they expand the jurisdiction of the NCIP under
Section 66 of the IPRA to include such disputes where the parties do not belong to the same ICC/IP.

WHEREFORE, the petition is DENIED

Court of Appeals Decision

AFFIRMED.

Principles:

Locus standi is defined as a right of appearance in a court of justice on a given question. In private suits,
standing is governed by the "real parties in interest"

The nature of an action, as well as which court or body has jurisdiction over it, is determined based on
the allegations contained in the complaint... of the plaintiff, irrespective of whether or not the plaintiff is
entitled to recover upon all or some of the claims asserted therein.

Once vested by the allegations in the... complaint, jurisdiction also remains vested irrespective of
whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein."[15]

Section 3 (f) of the IPRA defines customary laws as a body of written and/or unwritten rules, usages,
customs and practices traditionally and continually recognized, accepted and observed by respective
ICCs/IPs. From this restrictive definition, it can be gleaned that it is only... when both parties to a case
belong to the same ICC/IP that the abovesaid two conditions can be complied with. If the parties to a
case belong to different ICCs/IPs which are recognized to have their own separate and distinct
customary laws and Council of Elders/Leaders, they... will fail to meet the abovesaid two conditions. The
same holds true if one of such parties was a non-ICC/IP member who is neither bound by customary
laws as contemplated by the IPRA nor governed by such council. Indeed, it would be violative of the
principles of fair play and... due process for those parties who do not belong to the same ICC/IP to be
subjected to its customary laws and Council of Elders/Leaders.

parties belonging to different ICC/IPs or where one of the parties is a non-ICC/IP, the case shall fall
under the jurisdiction of the proper Courts of Justice, instead of the NCIP.

GR: the NCIP does not have jurisdiction over a case if one of the parties is not a member of the tribe
EXCS: 1: Claims over boundary disputes 2. fraudulent claims by parties who are not members of the
same ICC/IP

There are, however, exceptional cases where the NCIP shall still have jurisdiction over such claims and
disputes even if the parties involved do not belong to the same ICC/IP, viz.:... conflicting claims among
ICCs/IPs on... the boundaries of ancestral domain claims,... fraudulent claims by parties who are not
members of the same ICC/IP, to wit:

Considering the general rule that the jurisdiction of the NCIP under Section 66 of the IPRA covers only
disputes and claims between and among members of the same ICCs/IPs involving their rights under the
IPRA, as well as the basic administrative law principle that an... administrative rule or regulation must
conform, not contradict the provisions of the enabling law

"[J]urisdiction over a subject matter is conferred by the Constitution or the law and rules of procedure
yield to substantive law.

ENGINEER BEN Y. LIM, et al. v. HON. SULPICIO G. GAMOSA, Officer-in-Charge, NCIP REGIONAL
HEARING OFFICE REGION IV, and TAGBANUA INDIGENOUS CULTURAL COMMUNITY OF BARANGAY
BUENAVISTA, CORON, PALAWAN, as represented by FERNANDO AGUIDO et al.

G.R. No. 193964, 02 December 2015, Perez, J.

The IPRA emphasizes customs and customary law to govern in the lives of the ICCs/IPs. It, however,
recognizes that customs and customary law cannot be applied to non-ICCs/IPs since ICCs/IPs are
recognized as a distinct sector of the Philippine society.

In Cruz v. DENR, Custom, from which customary law is derived, is also recognized under the Civil Code as
a source of law x x x. Customary law is a primary, not secondary, source of rights under the IPRA and
uniquely applies to ICCs/IPs. Its recognition does not depend on the absence of a specific provision in
the civil law.

FACTS.

Respondent Tagbanua Indigenous Cultural Community of Barangay Buenavista, Coron, Palawan filed a
petition before the National Commission on Indigenous People (NCIP) against petitioners for “Violation
of Rights to Free and Prior and Informed Consent (FPIC) and Unauthorized and Unlawful Intrusion with
Prayer for the Issuance of Preliminary Injunction and TRO.”

Despite a motion to dismiss being a prohibited pleading under NCIP Administrative Circular No. 1-03,
petitioners moved to dismiss the petition on the ground, among others, that NCIP lack jurisdiction over
the subject matter of the petition because petitioners are not members of the ICC/IP. The NCIP,
however, resolved to deny the motion to dismiss. Likewise, the Court of Appeals affirmed the NCIP’s
denial and reasoned out that from the wording of Section 66 of the IPRA, the NCIP was bestowed with
an all-encompassing grant of jurisdiction over all claims and disputes involving rights of ICCs/IPs and that
the requirement in the proviso contained in the section i.e. obtaining certification from the Council of
Elders/Leaders that the parties had exhausted all remedies provided under their customary law prior to
the filing of an action, applied only to instances where both parties were members of an ICC/IP. In all,
the Court of Appeals upheld that when a claim or dispute involves rights of the ICCs/IPs, the NCIP has
jurisdiction over the case regardless of whether the opposing party is a non-ICC/IP.

Petitioners thus filed this petition for review on certiorari.

ISSUE.

Does the NCIP have jurisdiction over the subject matter of the instant case?

HELD.

NO. SECTION 66 of the IPRA is exclusionary, specifically excluding disputes involving rights of ICCs/IPs
where opposing party is a non-ICC/IP. This provision reflects IPRA’s emphasis of customs and customary
law to govern in the lives of the ICCs/IPs. In fact, even the IPRA itself recognizes that customs and
customary law cannot be applied to non-ICCs/IPs since ICCs/IPs are recognized as a distinct sector of the
Philippine society.

The limited or special jurisdiction of the NCIP, confined only to a special cause involving ICCs/IPs, can
only be exercised under the limitations and circumstances prescribed by the statute.

Former Chief Justice Reynato Puno, in his separate opinion in Cruz v. Secretary of Environment and
Natural Resources, emphasizes the primacy of customs and customary law in the lives of the members
of the ICCs/IPs:

“Custom, from which customary law is derived, is also recognized under the Civil Code as a source of law
x x x. [I]n the absence of any applicable provisions in the Civil Code, custom, when duly proven, can
define rights and liabilities.

Customary law is a primary, not secondary, source of rights under the IPRA and uniquely applies to
ICCs/IPs. Its recognition does not depend on the absence of a specific provision in the civil law. The
indigenous concept of ownership under customary law is specifically acknowledged and recognized, and
coexists with the civil law concept and the laws on land titling and land registration.”

Once again, the primacy of customs and customary law sets the parameters for the NCIP’s limited
and special jurisdiction and its consequent application in dispute resolution. Demonstrably, the proviso
in Section 66 of the IPRA limits the jurisdiction of the NCIP to cases of claims and disputes involving
rights of ICCs/IPs where both parties are ICCs/IPs because customs and customary law cannot be made
to apply to non-ICCs/IPs within the parameters of the NCIP’s limited and special jurisdiction.

Clearly, the phraseology of “all claims and disputes involving rights of ICCs/IPs” does not necessarily
grant the NCIP all-encompassing jurisdiction whenever the case involves rights of ICCs/IPs without
regard to the status of the parties, i.e, whether the opposing parties are both ICCs/IPs.

WHEREFORE, the appeal is granted. The NCIP’s Resolution is reversed and set aside and respondents
may refile their complaint against petitioners in a court of general jurisdiction.
SERAFIN TIJAM, ET AL. vs.MAGDALENO SIBONGHANOY alias GAVINO SIBONGHANOY and LUCIA
BAGUIO

G.R. No. L-21450 - - April 15, 1968

FACTS:

The action at bar, which is a suit for collection of a sum of money in the sum of exactly P 1,908.00,
exclusive of interest filed by Serafin Tijam and Felicitas Tagalog against Spouses Magdaleno Sibonghanoy
and Lucia Baguio, was originally instituted in the Court of First Instance of Cebu on July 19, 1948. A
month prior to the filing of the complaint, the Judiciary Act of 1948 (R.A. 296) took effect depriving the
Court of First Instance of original jurisdiction over cases in which the demand, exclusive of interest, is
not more than P 2,000.00 (Secs. 44[c] and 86[b], R.A. 296.)

The case has already been pending now for almost 15 years, and throughout the entire proceeding the
appellant never raised the question of jurisdiction until the receipt of the Court of Appeals' adverse
decision.

Considering that the Supreme Court has the exclusive appellate jurisdiction over all cases in which
jurisdiction of any inferior court is in issue, the Court of Appeals certified the case to the Supreme Court
along with the records of the case.

ISSUE:

Whether or not the appellant's motion to dismiss on the ground of lack of jurisdiction of the Court of
First Instance during the pendency of the appeal will prosper.

RULING:

A party may be estopped or barred from raising a question in different ways and for different reasons.
Thus we speak of estoppel in pais, or estoppel by deed or by record, and of estoppel by laches.

Laches, in a general sense is failure or neglect, for an unreasonable and unexplained length of time, to
do that which, by exercising due diligence, could or should have been done earlier; it is negligence or
omission to assert a right within a reasonable time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it.

The doctrine of laches or of "stale demands" is based upon grounds of public policy which requires, for
the peace of society, the discouragement of stale claims and, unlike the statute of limitations, is not a
mere question of time but is principally a question of the inequity or unfairness of permitting a right or
claim to be enforced or asserted.

It has been held that a party can not invoke the jurisdiction of a court to sure affirmative relief against
his opponent and, after obtaining or failing to obtain such relief, repudiate or question that same
jurisdiction (Dean vs. Dean, 136 Or. 694, 86 A.L.R. 79). In the case just cited, by way of explaining the
rule, it was further said that the question whether the court had jurisdiction either of the subject-matter
of the action or of the parties was not important in such cases because the party is barred from such
conduct not because the judgment or order of the court is valid and conclusive as an adjudication, but
for the reason that such a practice can not be tolerated — obviously for reasons of public policy.

Furthermore, it has also been held that after voluntarily submitting a cause and encountering an
adverse decision on the merits, it is too late for the loser to question the jurisdiction or power of the
court (Pease vs. Rathbun-Jones etc., 243 U.S. 273, 61 L. Ed. 715, 37 S. Ct. 283; St. Louis etc. vs. McBride,
141 U.S. 127, 35 L. Ed. 659). And in Littleton vs. Burgess, 16 Wyo. 58, the Court said that it is not right for
a party who has affirmed and invoked the jurisdiction of a court in a particular matter to secure an
affirmative relief, to afterwards deny that same jurisdiction to escape a penalty.

Upon this same principle is what We said in the three cases mentioned in the resolution of the Court of
Appeals of May 20, 1963 (supra) — to the effect that we frown upon the "undesirable practice" of a
party submitting his case for decision and then accepting the judgment, only if favorable, and attacking
it for lack of jurisdiction, when adverse — as well as in Pindañgan etc. vs. Dans, et al., G.R. L-14591,
September 26, 1962; Montelibano, et al., vs. Bacolod-Murcia Milling Co., Inc., G.R. L-15092; Young Men
Labor Union etc. vs. The Court of Industrial Relation et al., G.R. L-20307, Feb. 26, 1965, and Mejia vs.
Lucas, 100 Phil. p. 277.

The facts of this case show that from the time the Surety became a quasi-party on July 31, 1948, it could
have raised the question of the lack of jurisdiction of the Court of First Instance of Cebu to take
cognizance of the present action by reason of the sum of money involved which, according to the law
then in force, was within the original exclusive jurisdiction of inferior courts. It failed to do so. Instead, at
several stages of the proceedings in the court a quo as well as in the Court of Appeals, it invoked the
jurisdiction of said courts to obtain affirmative relief and submitted its case for a final adjudication on
the merits. It was only after an adverse decision was rendered by the Court of Appeals that it finally
woke up to raise the question of jurisdiction. Were we to sanction such conduct on its part, We would in
effect be declaring as useless all the proceedings had in the present case since it was commenced on
July 19, 1948 and compel the judgment creditors to go up their Calvary once more. The inequity and
unfairness of this is not only patent but revolting.

Coming now to the merits of the appeal: after going over the entire record, We have become persuaded
that We can do nothing better than to quote in toto, with approval, the decision rendered by the Court
of Appeals x x x granting plaintiffs' motion for execution against the surety x x x

UPON ALL THE FOREGOING, the orders appealed from are hereby affirmed, with costs against the
appellant Manila Surety and Fidelity Company, Inc.
Genesis Investment, Inc., et al., vs. Heirs of Ceferino Ebarasabal, et al., G.R. No. 181622, 20 November
2013

Matters discussed in the case: jurisdiction, joinder of causes of action, incapable of pecuniary estimation

FACTS:

Respondents filed a complaint with the Regional Trial Court of Barili, Cebu (“RTC”) for Declaration of
Nullity of Documents, Recovery of Shares, Partition, Damages and Attorney's Fees against Respondents.
Petitioners filed a motion to dismiss on the ground that the RTC has no jurisdiction as the case involves
title to or possession of or interest in real property with an assessed value of P11,990.00. As it does not
exceed P20,000.00, the action allegedly fell within the jurisdiction of the Municipal Trial Court (“MTC”).

ISSUE:

Does the RTC have jurisdiction over the case?

YES. The principal relief sought by petitioners is the nullification of the Extrajudicial Settlement with Sale
entered into by and between some of their co-heirs and Respondents, insofar as their individual shares
in the subject property are concerned. The recovery of their undivided shares or interest over the
disputed lot, which were included in the sale, simply becomes a necessary consequence if the above
deed is nullified. Since the principal action sought in respondents' Complaint is something other than the
recovery of a sum of money, the action is incapable of pecuniary estimation and, thus, cognizable by the
RTC.

Respondents’ complaint for "Declaration of Nullity of Documents, Recovery of Shares, Partition,


Damages and Attorney's Fees" involved a joinder of causes of action which comprehends more than the
issue of partition of or recovery of shares or interest over the real property in question but includes an
action for declaration of nullity of contracts and documents which is incapable of pecuniary estimation.

Under Section 5 (c), Rule 2 of the Rules of Court, the joinder of causes of action between the same
parties but pertaining to different venues or jurisdictions may be allowed in the RTC provided one of the
causes of action falls within the jurisdiction of said court and the venue lies therein.

It is true that one of Respondents’ causes of action pertains to the title, possession and interest of each
of the contending parties over the contested property, the assessed value of which falls within the
jurisdiction of the MTC. A complete reading of the complaint, however, would readily show that, based
on the nature of the suit, the allegations therein, and the reliefs prayed for, the action is within the
jurisdiction of the RTC.

Respondents sought to recover ownership and possession of their shares in the disputed parcel of land
by questioning the due execution and validity of the Deed of Extrajudicial Settlement with Sale as well as
the Memorandum of Agreement entered into by and between some of their co-heirs and herein
Petitioners. Aside from praying that the RTC render judgment declaring as null and void the said Deed of
Extrajudicial Settlement with Sale and Memorandum of Agreement, respondents likewise sought the
following: (1) nullification of the Tax Declarations subsequently issued in the name of petitioner Cebu
Jaya Realty, Inc.; (2) partition of the property in litigation; (3) reconveyance of their respective shares;
and (3) payment of moral and exemplary damages, as well as attorney's fees, plus appearance fees.

REBECCA PACAÑA-CONTRERAS and ROSALIE PACAÑA, Petitioners, vs. ROVILA WATER SUPPLY, INC.,
EARL U KOKSENG, LILIA TORRES, DALLA P. ROMANILLOS and MARISSA GABUYA

Facts:

The petitioners claimed that their family has long been known in the community to be engaged in the
water supply business; they operated the "Rovila Water Supply" from their family residence and were
engaged in the distribution of water to customers in Cebu City. The petitioners alleged that Lilia was a
former trusted employee in the family business who hid business records and burned and ransacked the
family files. Lilia also allegedly posted security guards and barred the members of the Pacaña family
from operating their business. She then claimed ownership over the family business through a
corporation named "Rovila Water Supply, Inc." (Rovila Inc.) Upon inquiry with the Securities and
Exchange Commission (SEC), the petitioners claimed that Rovila Inc. was surreptitiously formed with the
respondents as the majority stockholders. The respondents did so by conspiring with one another and
forming the respondent corporation to takeover and illegally usurp the family business’ registered
name.

In forming the respondent corporation, the respondents allegedly used the name of Lourdes as one of
the incorporators and made it appear in the SEC documents that the family business was operated in a
place other than the Pacaña residence. Thereafter, the respondents used the Pacaña family’s receipts
and the deliveries and sales were made to appear as those of the respondent Rovila Inc. Using this
scheme, the respondents fraudulently appropriated the collections and payments. The petitioners filed
the complaint in their own names although Rosalie was authorized by Lourdes through a sworn
declaration and special power of attorney (SPA). The respondents filed a first motion to dismiss on the
ground that the RTC had no jurisdiction over an intra-corporate controversy. The RTC denied the
motion. On September 26, 2000, Lourdes died and the petitioners amended their complaint, with leave
of court, on October 2, 2000 to reflect this development. On October 10, 2000, Luciano also died. The
petitioners’ sister, Lagrimas Pacaña-Gonzales, filed a motion for leave to intervene and her answer-
inintervention was granted by the trial court. At the subsequent pre-trial, the respondents manifested to
the RTC that a substitution of the parties was necessary in light of the deaths of Lourdes and Luciano.
They further stated that they would seek the dismissal of the complaint because the petitioners are not
the real parties in interest to prosecute the case. On January 23, 2002,the respondents again filed a
motion to dismiss on the grounds, that the petitioners are not the real parties in interest to institute and
prosecute the case and that they have no valid cause of action against therespondents.

RTC RULING - The RTC denied the respondents’ motion to dismiss. It ruled that a motion to dismiss
based on the grounds invoked by the respondents may only be filed within the time for, but before, the
filing of their answer to the amended complaint. Their motion was filed out of time as it was filed only
after the conclusion of the pre-trial conference. The RTC likewise denied the respondents’ motion for
reconsideration.

The respondents filed a petition for certiorari under Rule 65 of the Rules of Court with the CA, invoking
grave abuse of discretion in the denial of their motion to dismiss. They argued that the deceased
spouses Luciano and Lourdes, not the petitioners, were the real parties in interest. Thus, the petitioners
violated Section 16, Rule 3 of the Rules of Court on the substitution of parties.

CA RULING - The CA granted the petition and ruled that the RTC committed grave abuse of discretion as
the petitioners filed the complaint and the amended complaint as attorneys-in-fact of their parents. As
such, they are not the real parties in interest and cannot bring an action in their own names; thus, the
complaint should be dismissed pursuant to the Court’s ruling in Casimiro v. Roque and Gonzales. The
petitioners filed a petition for certiorari and argued that the CA unjustly allowed the motion to dismiss
which did not conform to the rules

Issue :

Whether the Petitioners are the real parties in interest.

Ruling :

We find the petition meritorious. Obviously, in the present case, the deceased Pacañas can no longer be
included in the complaint as indispensableparties because of their death during the pendency of the
case. Upon their death, however, their ownership and rights over their properties were transmitted to
their heirs, including herein petitioners, pursuant to Article 7i7n4 relation with Article 777 of the Civil
Code.

In Orbeta, et al. v. Sendiong, the Court acknowledged that the heirs, whose hereditary rights are to be
affected by the case, are deemed indispensable parties who should have been impleaded by the trial
court. Therefore, to obviate further delay in the proceedings of the present case adngiven the Court’s
authority to order the inclusion of an indispensable party at any stage of the proceedings, the heirs of
the spouses Pacaña, except the petirioners who are already parties to the case are Lagrimas Pacaña-
Gonzalez who intervened in the case, are hereby ordered impleaded as parties-plaintiffs.
G.R. No. 201248, March 11, 2015

LETICIA NAGUIT AQUINO, MELVIN NAGUIT, ROMMEL NAGUIT, ELMA NAGUIT TAYAG, YSSEL L.
NAGUIT, ROSALINA NAGUIT AUMENTADO, RIZEL NAGUIT CUNANAN, CARIDAD NAGUIT PARAJAS,
MILLIE NAGUIT FLORENDO, MARNEL NAGUIT, EDUARDO NAGUIT, JOSE NAGUIT, ZOILO NAGUIT, AND
AMELIA NAGUIT DIZON, REPRESENTED BY YSSEL L. NAGUIT, Petitioners, v. CESAR B. QUIAZON,
AMANDA QUIAZON, JOSE B. QUIAZON AND REYNALDO B. QUIAZON, REPRESENTED BY JAIME B.
QUIAZON, Respondent.

A complaint for Annulment and Quieting of Title was filed before the RTC by the petitioners. They
alleged that they were the heirs of the late Epifanio Makam and Severina Bautista, who acquired a
house and lot consisting of 557 square meters, by virtue of a Deed of Sale, dated April 20, 1894; that
since then, they and their predecessors-in-interest had been in open, continuous, adverse, and
notorious possession for more than a hundred years, constructing houses and paying real estate taxes
on the property; that sometime in June 2005, they received various demand letters from the
respondents.

The respondents claiming ownership over the subject property and demanding that they vacate the
same; that upon inquiry with the Register of Deeds of San Fernando, Pampanga, they confirmed that the
property had been titled in the name of respondents under Transfer Certificate of Title (TCT) No.
213777-R; that the said title was invalid, ineffective, voidable or unenforceable; and that they were the
true owners of the property. Respondents asserted that they were the absolute owners of the subject
land as per TCT No. 213777-R; that they had inherited the same from their predecessor-in-interest,
Fausta Baluyut, one of the registered owners under Original Certificate of Title (OCT) No. RO-1138
(11376), as per the Project of Partition and Deed of Agreement and those petitioners had been
occupying the property by mere tolerance. They denied the allegations in the complaint and proffered
affirmative defenses with counterclaims.

They argued that: First, the petitioners "have no valid, legal and sufficient cause of action "against them,
because their deed of sale was spurious and could not prevail over Land Registration Decree No. 122511
issued on June 28, 1919 in Land Registration Case No. 5, LRC Records No. 128, by the Court of First
Instance of Pampanga, in favor of their predecessor-in-interest. The predecessors-in-interest of
petitioners were among the oppositors in the land registration proceeding but, nevertheless, after the
trial, the subject lot was awarded, decreed and titled in favor of respondents' predecessor-in-interest, as
per OCT No. RO-1138 (11376) of the Registry of Deeds of Pampanga. Second, the action was barred by
prescription and that petitioners were guilty of laches in asserting their interest over the subject lot,
considering that Land Registration Decree No. 122511 was issued on June 28, 1919 and OCT No. RO-
1138 (11376) was issued on May 12, 1922. Hence, it was much too late for petitioners to institute the
action after more than 80 years. They also raised the settled rule that a title registered under the
Torrens system could not be defeated by adverse, open and notorious possession, or by prescription.
Third, the action was also barred by res judicata and violated the prohibition against forum shopping,
considering that petitioners had earlier filed a similar case for quieting of title against respondents,
docketed as Civil Case No. 5487, which the RTC-Br. 56 dismissed.
As regards the allegation of prescription, the petitioners countered that an action to quiet title did not
prescribe if the plaintiffs were in possession of the property in question. They argued that they were
neither guilty of laches nor were they in possession of the property by mere tolerance, their possession
being in the concept of owner for more than a hundred years.

Lastly, regarding the argument on res judicata, petitioners explained that they were not the same
plaintiffs in Civil Case No. 5487 and that the case was dismissed without prejudice. Petitioners argue
that the CA gravely erred in considering external factors beyond the allegations in the petition. They
aver that it is a settled rule that to determine the sufficiency of a cause of action, only facts alleged in
the complaint shall be considered, and it is error for the court to take cognizance of external facts or
hold a preliminary hearing to determine their existence.

Respondents, on the other hand, echo the ruling of the CA that it was within the discretion of the trial
court to conduct a preliminary hearing on the affirmative defense of lack of cause of action or failure to
state a cause of action, where both parties were given the chance to submit arguments and evidence for
or against the dismissal of the complaint. Furthermore, they argue that the Court has previously upheld
cases where the court took into account external factors in the dismissal of the complaint on the ground
of lack of cause of action. They assert that since petitioners were given reasonable opportunity to
present evidence to prove their cause of action, they are now estopped from invoking the rule that only
allegations in the complaint should be considered.

Issue:

Whether the CA erred in affirming the dismissal of petitioners' complaint on the ground of lack of cause
of action or failure to state a cause of action.

Held:

The Court notes that respondents raised the affirmative defense in their Answer that petitioners "have
no valid, legal and sufficient cause of action," raising factual matters, which is effectively the ground of
"lack of cause of action."

The distinction between the grounds of "failure to state a cause of action" and "lack of cause of action"
was aptly discussed in Dabuco vs. Court of Appeals, to wit:

As a preliminary matter, we wish to stress the distinction between the two grounds for dismissal of an
action: failure to state a cause of action, on the one hand, and lack of cause of action, on the other hand.
The former refers to the insufficiency of allegation in the pleading, the latter to the insufficiency of
factual basis for the action. Failure to state a cause may be raised in a Motion to Dismiss under Rule 16,
while lack of cause may be raised any time. Dismissal for failure to state a cause can be made at the
earliest stages of an action. Dismissal for lack of cause is usually made after questions of fact have been
resolved on the basis of stipulations, admissions or evidence presented.

Although the two grounds were used interchangeably, it can be gleaned from the decisions of both the
trial court and the CA that respondents' defense of "lack of cause of action" was actually treated as a
"failure to state a cause of action," which is a ground for a motion to dismiss under Rule 16. This is
apparent from their reliance on Section 6 of Rule 16, which pertains to grounds of a motion to dismiss
raised as affirmative defenses; as well as the doctrines cited in resolving the case. The CA even referred
to both as one and the same ground for a motion to dismiss when it stated that: "Indubitably, lack of
cause of action or failure to state a cause of action, being one of the grounds for a motion to dismiss, is
included thereby."

The trial court held a preliminary hearing resolving the ground of "lack of cause of action" pursuant to
Section 6 of Rule 16, which allows the court to hold a preliminary hearing on grounds for dismissal
provided in the same rule that have been raised as an affirmative defense in the answer. The ground of
"lack of cause of action," as already explained, however, is not one of the grounds for a motion to
dismiss under Rule 16, and hence, not proper for resolution during a preliminary hearing held pursuant
to Section 6. On this point alone, the trial court clearly erred in receiving evidence on the ground of "lack
of cause of action" during the preliminary hearing. The factual matters raised by respondents in their
affirmative defense arguing the non-existence of a cause of action, should have been duly resolved
during a trial on the merits of the case. Rule 16 of the Rules of Court enumerates the grounds for a
motion to dismiss. The pertinent ground is found under Section 1(g), which reads as follows:

(g) That the pleading asserting the claim states no cause of action;

The test for determining the existence of a cause of action was amply discussed in Insular Investment
and Trust Corporation v. Capital One Equities Corporation, citing Perpetual Savings Bank v. Fajardo, to
wit:

The familiar test for determining whether a complaint did or did not state a cause of action against the
defendants is whether or not, admitting hypothetically the truth of the allegations of fact made in the
complaint, a judge may validly grant the relief demanded in the complaint. In Rava Development
Corporation v. Court of Appeals, the Court elaborated on this established standard in the following
manner:

"The rule is that a defendant moving to dismiss a complaint on the ground of lack of cause of action is
regarded as having hypothetically admitted all the averments thereof. The test of the sufficiency of the
facts found in a petition as constituting a cause of action is whether or not, admitting the facts alleged,
the court can render a valid judgment upon the same in accordance with the prayer thereof
(Consolidated Bank and Trust Corp. v. Court of Appeals, 197 SCRA 663 [1991]).

In determining the existence of a cause of action, only the statements in the complaint may properly be
considered. It is error for the court to take cognizance of external facts or hold preliminary hearings to
determine their existence. If the allegation in a complaint furnish sufficient basis by which the complaint
may be maintained, the same should not be dismissed regardless of the defenses that may be assessed
by the defendants.

In the case at bench, petitioners' cause of action relates to an action to quiet title under Article 476 of
the Civil Code, which provides:
Article 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 title.

An action may also be brought to prevent a cloud from being cast upon title to real property or any
interest therein.

In order that an action for quieting of title may prosper, two requisites must concur: (1) the plaintiff or
complainant has a legal or equitable title or interest in the real property subject of the action; and (2)
the deed, claim, encumbrance, or proceeding claimed to be casting cloud on his title must be shown to
be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy.

Evangelista v. Santiago elucidates:

The affirmative defense that the Complaint stated no cause of action, similar to a motion to dismiss
based on the same ground, requires a hypothetical admission of the facts alleged in the Complaint. In
the case of Garcon v. Redemptorist Fathers, this Court laid down the rules as far as this ground for
dismissal of an action or affirmative defense is concerned:

It is already well-settled that in a motion to dismiss a complaint based on lack of cause of action, the
question submitted to the court for determination is the sufficiency of the allegations of fact made in
the complaint to constitute a cause of action, and not on whether these allegations of fact are true, for
said motion must hypothetically admit the truth of the facts alleged in the complaint; that the test of the
sufficiency of the facts alleged in the complaint is whether or not, admitting the facts alleged, the court
could render a valid judgment upon the same in accordance with the prayer of said complaint. Stated
otherwise, the insufficiency of the cause of action must appear in the face of the complaint in order to
sustain a dismissal on this ground, for in the determination of whether or not a complaint states a cause
of action, only the facts alleged therein and no other matter may be considered, and the court may not
inquire into the truth of the allegations, and find them to be false before a hearing is had on the merits
of the case; and it is improper to inject in the allegations of the complaint facts not alleged or proved,
and use these as basis for said motion.

Exceptions and Section 6 of Rule 16 not applicable

The Court does not discount, however, that there are exceptions to the general rule that allegations are
hypothetically admitted as true and inquiry is confined to the face of the complaint. First, there is no
hypothetical admission of (a) the veracity of allegations if their falsity is subject to judicial notice; (b)
allegations that are legally impossible; (c) facts inadmissible in evidence; and (d) facts which appear, by
record or document included in the pleadings, to be unfounded., inquiry is not confined to the
complaint if culled (a) from annexes and other pleadings submitted by the parties; (b) from
documentary evidence admitted by stipulation which disclose facts sufficient to defeat the claim; or (c)
from evidence admitted in the course of hearings related to the case.
Pointing to the exception that inquiry was not confined to the complaint if evidence had been presented
in the course of hearings related to the case, the CA ruled that it was within the trial court's discretion to
receive and consider other evidence aside from the allegations in the complaint in resolving a party's
affirmative defense. It held that this discretion was recognized under Section 6 of Rule 16 of the Rules of
Court, which allowed the court to conduct a preliminary hearing, motu proprio, on the defendant's
affirmative defense if no corresponding motion to dismiss was filed. This section reads in part:

Section 6. Pleading grounds as affirmative defenses. - If no motion to dismiss has been filed, any of the
grounds for dismissal provided for in this Rule may be pleaded as an affirmative defense in the answer
and, in the discretion of the court, a preliminary hearing may be had thereon as if a motion to dismiss
had been filed.

A review of the first ground under paragraph 6 of the answer reveals that respondents alleged that
"plaintiffs have no valid, legal and sufficient cause of action against the defendants." It is at this point
that it must again be emphasized that it is not "lack or absence of cause of action" that is a ground for
dismissal of the complaint under Rule 16, but rather, that "the complaint states no cause of action." The
issue submitted to the court was, therefore, the determination of the sufficiency of the allegations in
the complaint to constitute a cause of action and not whether those allegations of fact were true, as
there was a hypothetical admission of facts alleged in the complaint. An affirmative defense, raising the
ground that there is no cause of action as against the defendants poses a question of fact that should be
resolved after the conduct of the trial on the merits. A reading of respondents' arguments in support of
this ground readily reveals that the arguments relate not to the failure to state a cause of action, but to
the existence of the cause of action, which goes into the very crux of the controversy and is a matter of
evidence for resolution after a full-blown hearing.

It is of note that although the trial court might not have erred in holding a preliminary hearing on the
affirmative defenses of prescription and res judicata, it is readily apparent from the decisions of the
lower courts that no disquisition whatsoever was made on these grounds. It cannot be denied that
evidence in support of the ground of "lack of cause of action" was received and given great weight by
the trial court. In fact, all the evidence given credence by the trial court were only in support of the
ground of "lack of cause of action." This all the more highlight that the trial court erred in receiving
evidence to determine whether the complaint failed to state a cause of action.

Although neither the RTC nor the CA ruled on the affirmative defenses of prescription and res judicata, it
appears that this case could not have been dismissed on these grounds. First, an action to quiet title is
imprescriptible if the plaintiffs are in possession of the property, which is the situation prevailing in the
present case. Second, there appears to be no res judicata nor a violation of the prohibition against
forum shopping considering that Civil Case No. 5487 had been dismissed, without prejudice, years
before petitioners initiated their complaint for quieting of title.