13 AQUINO VS QUIAZON (GR NO.

201248, MARCH 11, 2015)

FACTS

The late Epifanio Makam and Severina Bautista acquired a house and lot situated in Magalang,
Pampanga in 1894 by virtue of a Deed of Sale. Since then, they had been in open, continuous, adverse,
and notorious possession for more than a hundred years which is now continued by their heirs. They
have constructed houses and paid real estate taxes but in 2005, the heirs received various demand
letters from respondents Quiazon claiming ownership over the subject property and demanding they
vacate the same. Upon inquiry with the Registry of Deeds, they confirmed that the property had been
titled in the name of the respondents.

Now the heirs filed a complaint alleging that the said title was invalid, ineffective, voidable or
unenforceable and that they are the true owners of the property with a prayer to cancel such title and a
new one be issued in their favor.

Respondents argued that they are the true owners as they have inherited the same from their
predecessor-in-interest Baluyut and they the petitioners are able to occupy the same only by mere
tolerance. Moreover, they argued that petitioners lack cause of action as the deed of sale is spurious
and cannot prevail over the Land Registration Decree and related documents 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. It was also argued that they are guilty of laches in
asserting their interest over the subject lot as the Decree was issued on 1919.

Petitioners countered 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.

RTC ruled that the sale had become invalid by virtue of the 1919 decision. CA ruled that except
for the bare allegation that respondents’ title is invalid, there was nothing more to support the same.
Hence, the petitioners did not have the title required to avail of the remedy of quieting of title, while
respondents have proven the validity of their Torrens title.

ISSUE

Whether or not CA erred in affirming the dismissal petitioners’ complaint on the ground of lack of cause
of action or failure to state cause of action.

RULING

The lower courts erred in entertaining the rules on motion to dismiss on the ground of “lack of
cause of action” as it is only applicable to the ground of “failure to state a cause of action”.
 The Supreme Court first made distinction between failure to state cause of action and lack of
cause of action, in that: 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.
Here, a preliminary hearing for motion to dismiss was held on the ground of “lack of cause of action”.
The lower courts misapplied the Rules as motion to dismiss is available only to a ground involving
“failure to state a cause of action”.

In determining the existence of a cause of action, only the allegations in the complaint may
properly be considered. 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.

A "cloud on title" is an outstanding instrument, record, claim, encumbrance or proceeding which

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.

It is readily apparent from the complaint that petitioners alleged that (1) they had an interest
over the subject property by virtue of a Deed of Sale, dated April 20, 1894; and that (2) the title of
respondents under TCT No. 213777-R was invalid, ineffective, voidable or unenforceable. Hypothetically
admitting these allegations as true, as is required in determining whether a complaint fails to state a
cause of action, petitioners may be granted their claim.

Clearly, the complaint sufficiently stated a cause of action. In resolving whether or not the
complaint stated a cause of action, the trial court should have limited itself to examining the sufficiency
of the allegations in the complaint.