GREEN ACRES v. CABRAL (2013) 7.
Green Acres however, decided to file a Complaint for Quieting of Title,
Petitioners: Green Acres
Respondents: Victoria Cabral, Sps. Moraga, Department of Agrarian
Reform Adjudication Board (DARAB)
DOCTRINE: For an action to quiet title to prosper, two indispensable
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
a cloud on his title must be shown to be in fact invalid or inoperative
despite its prima facie appearance of validity or legal efficacy.
(2nd req) Cloud on title consists of (1) any instrument, record, claim,
encumbrance or proceeding; (2) which is apparently valid or effective;
(3) but is in truth and in fact invalid, ineffective, voidable, or
unenforceable; and (4) may be prejudicial to the title sought to be
quieted.
FACTS:
1. Victoria Cabral was the original owner of a parcel of land in Meycauayan,
Bulacan covered by a TCT Certificate.
2. The land was placed under the coverage of PD 27 and 3 Emancipation
Patents were issued to the Sps. Moraga.
3. Cabral filed a complaint before the Provincial Agrarian Reform
Adjudicator (PARAD) to cancel the emancipation patents in favor of Sps.
Moraga on the ground that they were obtained through fraud; properties
were not agricultural lands but classified as residential, commercial,
industrial land by the Housing and Land Use Regulatory Board.
a. PARAD: denied
4. Pending appeal of Cabral, Sps. Morga subdivided the lot into 3 smaller
lots each with a TCT and sold the properties to Filcon Ready Mixed Inc.,
which the latter then sold to Green Acres.
a. Aside from a cancelled annotation of a real estate mortgage in
favor of PCI Bank, the titles were free from any annotations, liens,
notices, claims or encumbrances.
b. titles under the name of Filcon were cancelled by RD and new
titles were issued in the name of Green Acres
5. Thereafter, DARAB rendered judgment on the appeal of Cabral (PARAD
case), ordering the cancellation of the titles in the name of Sps. Moraga
and Filcon for having been illegally acquired.
6. Green Acres, upon knowledge of the DARAB decision and fearing that its
titles and possession might be disturbed by the decision, sent a letter to
Filcon reminding the latter of its warranties under the deed of sale.
a. Filcon: it was also an innocent purchaser for value; bought property
without knowledge of any legal infirmity on the title.
against Cabral, the Spouses Moraga, Filcon, the DARAB and the
Registry of Deeds of Meycauayan, Bulacan.
a. Green Acres: purchaser in good faith; no notice or knowledge of
any adverse claim, lien, or encumbrance on the properties.
b. it was also not a party to the DARAB proceedings
c. DARAB decision casts a cloud on its titles.
8. Cabral: Green Acres never acquired valid title to the subject property;
cannot claim to be an innocent purchaser for value; complaint is not
appropriate for quieting of title since it omitted to assail her titles over the
subject property but instead questioned the proceedings held at the
DARAB.
9. TC: in favor of Green Acres; case dismissed. MR-denied;
10. Pending appeal, DARAB decision became final and executory (after
denial of MR, Sps Moraga did not file anything).
11. Cabral then filed a motion for issuance of writ if execution of the DARAB
decision but PARAD denied such, stating that the DARAB decision
orders only the cancellation of the patent and transfer certificate of titles
issued by RD in favor of Sps. Moraga and Filcon. The decision did not
state anything about directing the cancellation of titles issued in favor of
Green Acres.
a. Denied; appeal- denied. the only issue in an action to quiet title is
whether there is a cloud in a title to real property because of any
instrument, record, claim, encumbrance or a proceeding that has a
prima facie appearance of validity and the DARAB decision does
not fall within said enumeration.
ISSUE:
1. WON DARAB decision may be enforced against Green Acres
(cancellation also of titles in the name of Green Acres)
2. WON DARAB decision in favor of Cabral constitutes a cloud on Green
Acres title over the subject properties (Quieting of Title issue)
PROVISION:
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.
An action may also be brought to prevent a cloud from being cast upon title
to real property or any interest therein.
RULING + RATIO:
1. NO, DARAB decision cannot be enforced against Green Acres.
a. The principle that a person cannot be prejudiced by a ruling rendered in an
action or proceeding in which he was not made a party conforms to the
constitutional guarantee of due process of law.
Green Acres was not made a party in the DARAB case. Consequently,
the DARAB decision cannot bind Green Acres. Likewise, the binding
effect of the DARAB decision cannot be extended to Green Acres by the
mere issuance of a writ of execution against it.
b. Also, a Torrens title, as a general rule, is irrevocable and indefeasible, and
the duty of the court is to see to it that this title is maintained and respected
unless challenged in a direct proceeding.
Seeking the cancellation of the titles of Green Acres by a mere Motion
for Issuance of Writ of Execution of a decision rendered in a case where
said titles were not in issue constitutes a collateral attack on them which
this Court cannot allow.
c. Also, a void title may be the source of a valid title in the hands of an
innocent purchaser for value (IPV).
Green Acres is considered an IPV. It relied on the certificates of title of
Filcon, free from any liens and encumbrances. The only annotation on
them was a cancelled real estate mortgage in favor of PCI Bank. Thus,
Green Acres was under no obligation to investigate beyond Filcons
titles as Green Acres had all the reason to believe that said titles were
free from any lien, claim or encumbrance.
d. Cabral herself is to blame for her failure to recover the properties. Due to
her own negligence, she failed to annotate a notice of lis pendens on the
titles of the Spouses Moraga and Filcon and thus give notice to future
transferees.
2. YES, DARAB decision constitutes a cloud over the title.
For an action to quiet title to prosper, two indispensable 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 a cloud on his title must
be shown to be in fact invalid or inoperative despite its prima facie
appearance of validity or legal efficacy.
Both requisites are complied with for the DARAB decision to constitute a
cloud over the title to the property. There is no dispute as to the first requisite
since Green Acres has legal title over the subject properties. The issue is on
the 2nd requisite.
Cloud on title consists of (1) any instrument, record, claim, encumbrance or
proceeding; (2) which is apparently valid or effective; (3) but is in truth and in
fact invalid, ineffective, voidable, or unenforceable; and (4) may be prejudicial
to the title sought to be quieted.
The DARAB decision, a final one at that, is both an "instrument" and a
"record."
Blacks Law Dictionary definition
instrument - document or writing which gives formal expression to a legal act or
agreement, for the purpose of creating, securing, modifying or terminating a right.
Record - a written account of some act, court proceeding, transaction or instrument drawn
up under authority of law, by a proper officer, and designed to remain as a memorial or
permanent evidence of the matters to which it relates.
Claim - a cause of action or a demand for money or property since Cabral is asserting her
right over the subject lots.
Proceeding - a regular and orderly progress in form of law including all possible steps in
an action from its commencement to the execution of judgment and may refer not only to
a complete remedy but also to a mere procedural step that is part of a larger action or
special proceeding.
The DARAB decision is apparently valid and effective. It is a final
decision that has not been reversed, vacated or nullified. It is likewise
apparently effective and may be prejudicial to Green Acres titles since
it orders the cancellation of the titles of the Spouses Moraga and Filcon
all from which Green Acres derived its titles.
However, it is ineffective and unenforceable against Green Acres
because Green Acres was not properly impleaded in the DARAB
proceedings nor was there any notice of lis pendens annotated on the
title of Filcon so as to serve notice to Green Acres that the subject
properties were under litigation. As such, Green Acres is an innocent
purchaser for value.
Furthermore, in a previous case, the Court has held that one of the proper
remedies of a person who was not impleaded in the proceedings declaring
null and void the title from which his title to the property had been derived, is
an action for quieting title.
Green Acres proper recourse was either an action for quieting of title or an
action for reconveyance of the property. It is timely for the Court to remind
that the petitioner will be better off if it should go to the courts to obtain relief
through the proper recourse; otherwise, it would waste its own time and
effort, aside from thereby unduly burdening the dockets of the courts.
DISPOSITION: Petition granted. TCTs in name of Green Acres are declared
VALID and any cloud over such titles which may have been created by the
Decision dated January 17, 2001 of the DARAB Case is hereby REMOVED.