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ALICE VITANGCOL v. NEW VISTA PROPERTIES

FACTS:

Petitioners Alice Vitangcol and Norberto Vitangcol are appealing the decision of the Court of Appeals (CA) that reversed the Regional Trial Court's (RTC) order in Civil Case No. 3195-2001-C for Quieting of Title. The subject of the dispute is Lot No. 1702 covered by Transfer Certificate of Title (TCT) No. (25311) 2528 in Calamba, Laguna.

On June 18, 1989, Maria and Clemente A. Alipit executed a Special Power of Attorney (SPA) authorizing Milagros A. De Guzman to sell their property. Pursuant to the SPA, De Guzman executed a Deed of Absolute Sale, selling the property to New Vista Properties, Inc. (New Vista). However, the property specified in the deed was Lot No. 1702 covered by TCT No. (25311) 2528, which was different from the property described in the SPA. New Vista immediately entered and occupied the property after the sale.

More than a decade later, New Vista learned that the property was being claimed by the Vitangcols based on a Deed of Absolute Sale for Lot No. 1702 under TCT No. (25311) 2528 executed between Vitangcol and Maria Alipit. New Vista filed a suit for quieting of title, praying for the cancellation of Vitangcol's TCT No. T-482731 and to be declared the absolute owner of the property.

The RTC denied Vitangcol's motion to dismiss the amended complaint but later granted reconsideration and dismissed the complaint. The CA reversed the RTC's decision, reinstating New Vista's amended complaint.

Vitangcol's appeal is based on the sole assignment of error that the decision and resolution of the CA are contrary to law.

ISSUES:

  1. Whether the Amended Complaint, with the submitted Special Power of Attorney (SPA), sufficiently states a cause of action.

  2. Whether the trial court erred in ruling that the amended complaint stated no cause of action.

  3. Whether the property subject of the deed of absolute sale is Lot No. 1702 as stated in the deed or Lot No. 1735 as stated in the special power of attorney (SPA).

  4. Whether the failure to present TCT No. (25311) 2538 covering Lot No. 1735 is fatal to the case.

  5. Whether the typographical errors in the Special Power of Attorney (SPA) and the deed of absolute sale would affect the validity of the sale and New Vista's claim for relief.

  6. Whether the alleged ratification by the lot owners would cure any defect in the sale.

  7. Whether the two versions of the Transfer Certificate of Title (TCT) covering the subject lot indicate fraud.

RULING:

  1. The Amended Complaint sufficiently states a cause of action. The Rules of Court define a cause of action as the act or omission by which a party violates a right of another. It contains three elements: (1) a right existing in favor of the plaintiff; (2) a correlative duty on the part of the defendant to respect that right; and (3) a breach of the defendant's duty. The lack of cause of action is not a ground for dismissal through a motion to dismiss but can only be determined during or after trial. In ruling on a motion to dismiss for lack of cause of action, the court hypothetically admits the truth of the material allegations of the plaintiff's complaint.

  2. The trial court erred in ruling that, taking into account the submitted SPA, the amended complaint stated no cause of action. The focus in a motion to dismiss for failure to state a cause of action is on the sufficiency, not the veracity, of the material allegations. The test is whether, admitting the facts alleged, the court could render a valid verdict in accordance with the prayer of the complaint.

  3. The property subject of the deed of absolute sale is Lot No. 1702. The SPA mentioning Lot No. 1735 is not sufficiently explained by the parties. However, it is clear that Lot No. 1702 is the property intended to be sold and acquired by New Vista, as evidenced by the series of transactions leading up to the execution of the deed of absolute sale.

  4. The failure to present TCT No. (25311) 2538 covering Lot No. 1735 is not fatal to the case. Maria Alipit's failure to show that she co-owns Lot No. 1735 suggests that no such separate property exists.

  5. Even if there were typographical errors in the SPA and the deed of absolute sale, the alleged ratification by the lot owners would cure any defect in the sale. The ratificatory acts of the lot owners, such as turning over possession of the lot to New Vista, would strengthen New Vista's cause of action. Furthermore, the delivery of the lot to New Vista and the absence of any challenge to the sale for more than 10 years indicate the intent to sell and receipt of full payment, thus validating the sale.

  6. The alleged ratification by the lot owners would cure any defect in the sale. The lot owners' long inaction in challenging the sale and their failure to institute proceedings to oust New Vista from the property argue against the notion that they sold a different property than Lot No. 1702.

  7. The existence of two versions of TCT No. (25311) 2528, one authentic and the other spurious, raises a triable factual issue regarding fraud. The subsequent sale of the lot to Vitangcol with the use of a bogus TCT suggests that the sale was ineffective and fraudulent.

PRINCIPLES:

  • A cause of action consists of three elements: (1) a right existing in favor of the plaintiff; (2) a correlative duty on the part of the defendant to respect that right; and (3) a breach of the defendant's duty.

  • The lack of cause of action is not a ground for dismissal through a motion to dismiss but can only be determined during or after trial.

  • In ruling on a motion to dismiss for lack of cause of action, the court hypothetically admits the truth of the material allegations of the plaintiff's complaint.

  • The focus in a motion to dismiss for failure to state a cause of action is on the sufficiency, not the veracity, of the material allegations. The test is whether, admitting the facts alleged, the court could render a valid verdict in accordance with the prayer of the complaint.

  • The location and metes and bounds of a property are more important than the lot number assigned to it in the certificate of title.

  • Failure to present a certificate of title for a property mentioned in a SPA can cast doubt on the existence of such property.

  • Ratification can cure any defect in a contract, such as typographical errors, as long as the parties subsequently act in a manner consistent with their intent to be bound by the contract.

  • Delivery of the subject property is strong evidence of the intent to sell and receipt of full payment, which can validate a sale.

  • Inaction and failure to challenge a sale for an extended period can indicate the validity and acceptance of the sale.

  • The existence of two versions of a title, with one being spurious, raises a triable issue of fraud.