FACTS:

In this case, the plaintiffs and intervenor, Ciriano C. Mijares, sought to determine the ownership of a property and prevent the defendant, Patricia Inc., from evicting them from their respective improvements on the property. The City of Manila also intervened as the owner of the land occupied by the plaintiffs. A preliminary injunction was granted. The main issue was whether the improvements of the plaintiffs stood on land owned by Patricia Inc. or the City of Manila. After appointing commissioners, the RTC ruled in favor of the plaintiffs, permanently enjoining Patricia Inc. from evicting the plaintiffs. The CA later reversed the RTC's judgment and dismissed the complaint, finding that the petitioners lacked necessary interest and criticizing the RTC's reliance on the commissioners. The petitioners appealed the CA's decision.

In another case involving Patricia Inc. and Gomez, a boundary dispute over real property was raised. The RTC initially dismissed the complaint, but the CA reinstated it, determining that the allegations in the complaint sufficiently established a boundary dispute. The CA also criticized the RTC for relying solely on tax declarations instead of considering the majority of commissioners' reports appointed by the court. The City of Manila intervened and supported the RTC's decision, while Patricia Inc. argued that a boundary dispute was not proper in an action for quieting of title.

The issue in another case was regarding the jurisdiction over the causes of action for injunction and quieting of title. The RTC asserted jurisdiction over both causes of action, but the Court clarified that while the RTC had jurisdiction over the injunction due to its incapability of pecuniary estimation, it did not have jurisdiction over the quieting of title. The jurisdiction of the quieting of title action depends on the assessed value of the property in dispute, and the appropriate forum is specified as the RTC based on the statutory provision on jurisdiction.

ISSUES:

1. Whether the Regional Trial Court (RTC) or the Municipal Trial Court (MTC) has jurisdiction over an action to quiet title when the assessed value of the property does not exceed P20,000.00.

2. Whether the joinder of the action for injunction and the action to quiet title is allowed.

3. Whether the petitioners have the legal or equitable title or interest in the subject property to maintain the suit for quieting of title.

4. Whether the claim of ownership by the defendant is invalid or inoperative, casting a cloud on the petitioners' title to the subject property.

5. Whether the petitioners have the necessary interest to maintain an action for quieting of title.

6. Whether the petitioners have a cause of action for injunction.

7. Whether the petitioners have a right to be protected that warrants the issuance of a preliminary injunction.

8. Whether the invocation of Section 5, Rule 10 of the Rules of Court is justified in order to raise a boundary dispute.

RULING:

1. The MTC has exclusive original jurisdiction over an action to quiet title when the assessed value of the property does not exceed P20,000.00. The specification under Rule 63 of the Rules of Court that the forum for an action to quiet title is the appropriate RTC does not override the statutory provision on jurisdiction. The use of the word "may" in Rule 63 denotes that the provision is permissive and indicates a mere possibility or option. Therefore, the mandatory provision of the Judiciary Reorganization Act of 1980, as amended, which uses the word "shall" and explicitly requires the MTC to exercise exclusive original jurisdiction over such cases, prevails.

2. The joinder of an action for injunction and an action to quiet title is disallowed under Section 5, Rule 2 of the Rules of Court. However, misjoinder of causes of action is not a ground for dismissal of an action. The court may, on motion or on its own initiative, sever the misjoined causes of action and proceed with them separately.

3. The petitioners failed to allege and prove their interest in the subject property. Thus, the dismissal of the cause of action for quieting of title was warranted.

4. An action to quiet title requires that the plaintiff has a legal or equitable title or interest in the property and that the claim casting a cloud on the title is invalid or inoperative. The petitioners did not establish the invalidity or inoperativeness of the defendant's claim of ownership.

5. The court held that the petitioners, who claimed possession of the property for more than 30 years and had built their houses in good faith, did not have the necessary interest to maintain an action for quieting of title. The authenticity of the title of the rightful owners was not disputed and the petitioners could not acquire ownership of the land covered by a Torrens title through adverse possession. Furthermore, their occupation as lessees did not qualify them as builders in good faith.

6. The court also held that the petitioners failed to establish a cause of action for injunction. Injunction is a remedy that either directs a party to do a particular act or prevents them from doing a certain act. The petitioners did not meet the prerequisites for the issuance of an injunctive writ as they did not show that they were entitled to the permanent injunction sought.

7. The petitioners have failed to establish a right to be protected that warrants the issuance of a preliminary injunction. They have only established the existence of a boundary dispute between two other parties, which does not concern the petitioners themselves.

8. The invocation of Section 5, Rule 10 of the Rules of Court to raise a boundary dispute is unwarranted. A boundary dispute should not be litigated in an action for the quieting of title, which has a limited scope. Any alteration or modification of the titles should be initiated through direct proceedings and not as an issue incidentally raised in the action for quieting of title.

PRINCIPLES:

• An action to quiet title is a real action that involves the issue of ownership or possession of real property or any interest therein.

• The jurisdiction of the court over an action to quiet title is determined by the assessed value of the property in dispute.

• The word "may" in a statute denotes that the provision is permissive and indicates a mere possibility or option, while the word "shall" denotes a mandatory provision.

• The joinder of special civil actions or actions governed by special rules is disallowed under Section 5, Rule 2 of the Rules of Court.

• Misjoinder of causes of action is not a ground for dismissal of an action. The court may sever misjoined causes of action and proceed with them separately.

• An action to quiet title or remove clouds over the title requires the plaintiff to have a legal or equitable title or interest in the property.

• The claim casting a cloud on the title must be shown to be invalid or inoperative despite its prima facie appearance of validity or legal efficacy.

• Land covered by a Torrens title cannot be acquired through prescription or adverse possession.

• Tenants in urban lands declared as Areas for Priority Development (APD) have the right of first refusal to purchase the property, but such right only accrues when the owner decides to sell the property.

• The action to quiet title requires the existence of a deed, claim, encumbrance, or proceeding that casts a cloud on the plaintiff's title.

• Injunction is a remedy that either compels a party to perform a specific act or restrains them from doing a particular act.

• To establish a cause of action for injunction, the requirements under Section 9, Rule 58 of the 1997 Rules of Civil Procedure must be met.

• Two requisites must concur for injunction to issue: (1) there must be a right to be protected and (2) the acts against which the injunction is to be directed are violative of said right.

• In actions involving realty, preliminary injunction will lie only after the plaintiff has fully established his title or right thereto by a proper action for the purpose.

• The action for the quieting of title is specifically used to remove any cloud upon, doubt, or uncertainty affecting title to real property and should not be used for any other purpose.

• A boundary dispute should be addressed through direct proceedings and not incidentally raised in an action for the quieting of title.

• Section 48 of the Property Registration Decree prohibits collateral attacks on Torrens titles, which occurs when the certificate of title is assailed as an incident in another action seeking a different relief.