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EDWARD ROCO TAN v. BENIGNO DE LA VEGA

FACTS:

The undisputed facts of the case are as follows: Respondents filed a complaint for quieting of title and for declaration of nullity of certain titles against the heirs of Macario Mencias and other government officials. The complaint was later amended to include the petitioner purchasers of the disputed lot. Respondents claimed to be the co-owners of a parcel of land covered by TCT No. 257152, which included the controverted Lot 89. They discovered that the defendant heirs had obtained titles over a portion of Lot 89 through a Free Patent and subsequent transfers. Petitioners acquired the lot from a corporation. Respondents contended that the titles issued to the defendant heirs and petitioners were void because the disputed lot was entirely within their land. The defendant heirs argued that Lot 89 was not part of respondents' title and that respondents' title was based on a reconstitution of a different parcel of land. Petitioners claimed to be purchasers in good faith and argued that they had no knowledge of any defect in the title. Aurora M. Gabat and certain government officials were declared in default for failing to file their answer. The trial court granted respondents' motion for judgment on the pleadings, holding that the disputed lot was within respondents' land which became a private land before the Free Patent was issued. The trial court concluded that the titles derived from the Free Patent were void and that petitioners were not purchasers in good faith.

The respondents filed an action for declaration of nullity of Free Patent No. 495269 and the titles derived therefrom, claiming that the lot titled in the name of the petitioners is a portion of a bigger tract of land previously titled in the name of their predecessors-in-interest. The respondents presented a photocopy of their Transfer Certificate of Title (TCT) No. 257152, which shows that the disputed land, including lot 89, originated from Original Certificate of Title (OCT) No. 730. They also presented photocopies of documents allegedly issued by the Bureau of Lands confirming that the disputed lot is part of respondents' Lot 89.

The petitioners denied the material allegations in the complaint and raised affirmative defenses. They argued that the respondents were forewarned of the notice indicating that the lot in question is inside Lot 89.

The trial court rendered judgment on the pleadings, declaring the validity and superiority of the respondents' TCT No. 257152 over the petitioners' TCT No. 272191. The free patent and titles derived from it were declared null and void, and the Registry of Deeds was directed to cancel the petitioners' TCT No. 272191. The trial court's decision was affirmed by the Court of Appeals.

The petitioners appealed to the Supreme Court, arguing that the trial court erred in rendering judgment on the pleadings because the pleadings filed by the parties generated ostensible issues that require the presentation of evidence.

ISSUES:

  1. Whether the area covered by the Free Patent issued to Macario Mencias is within Lot 89 covered by TCT No. 257152.

  2. Whether the titles of the subsequent buyers, New Atlantis Real Estate & Dev., Inc. and Edward Roco Tan and Edwin Roco Tan, are void and inexistent.

  3. Whether respondents' TCT No. 257152 is valid.

  4. Whether Lot 89 is covered by TCT No. 257152.

  5. Whether petitioners are purchasers in good faith.

  6. Whether a full-blown trial is necessary to settle the issues raised by the parties.

  7. Whether the defense of good faith is available to the petitioners.

RULING:

  1. Yes, the area covered by the Free Patent issued to Macario Mencias is within Lot 89 covered by TCT No. 257152. The technical descriptions in the Free Patent and OCT No. 711 explicitly state that the survey is entirely inside Lot 89, II-4755. This fact is also confirmed by various official letters and reports.

  2. Yes, the titles of the subsequent buyers, New Atlantis Real Estate & Dev., Inc. and Edward Roco Tan and Edwin Roco Tan, are void and inexistent. The notice of pendency of the action was duly inscribed on their titles, thus rendering them null and void. Moreover, the "NOTE" in the titles itself discloses the basis for their nullity.

  3. The court held that the case was not proper for judgment on the pleadings or summary judgment because the answers tendered factual issues. A summary judgment is warranted when there are no real or genuine issues of fact that require a trial. In this case, there are genuine issues that require a full-blown trial, such as the validity of the title from which respondents' TCT No. 257152 was derived and whether Lot 89 is inside respondents' land covered by TCT No. 257152.

  4. Yes, a full-blown trial should be conducted to resolve the issues raised by the parties. The court finds that the respondents failed to prove that the presentation of evidence may be dispensed with in the present controversy. It is neither a proper case for the rendition of judgment on the pleadings nor for summary judgment.

  5. The defense of good faith may still be available to the petitioners if the title of their predecessors-in-interest is declared void. A void title may be the source of a valid title in the hands of an innocent purchaser for value. Good faith is always presumed, and it was premature for the trial court to conclude that the petitioners are not purchasers in good faith.

PRINCIPLES:

  • The technical description in a title determines the exact boundaries and location of the property. (Issue 1)

  • The inscription of a notice of pendency of an action on a title serves as a warning to all potential buyers that the title is subject to litigation and may be declared null and void. (Issue 2)

  • A judgment on the pleadings is rendered when there is no ostensible issue due to the failure of the defending party's answer to raise an issue. On the other hand, summary judgment is appropriate when there are genuine issues apparent in the pleadings but are later shown to be sham, fictitious, or not genuine.

  • Genuine issues require the presentation of evidence and cannot be resolved through summary judgment.

  • The party moving for summary judgment has the burden of demonstrating the absence of any genuine issue of fact or that the issue posed in the complaint is patently unsubstantial.

  • Proceedings for summary judgment cannot replace a trial when the facts pleaded by the parties are disputed or contested.

  • A full-blown trial is necessary to settle the issues raised by the parties.

  • An innocent purchaser for value is one who buys the property of another without notice of any claims or interests by other parties and pays a full and fair price for the property.

  • Good faith is always presumed, and the defense of good faith may still be available to a purchaser even if the title of their predecessors-in-interest is declared void.