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195834, November 09, 2016 - GUILLERMO SALVADOR, REMEDIOS CASTRO, REPRESENTED BY PAZ "CHIT" CASTR…

FIRST DIVISION

G.R. No. 195834, November 09, 2016

GUILLERMO SALVADOR, REMEDIOS CASTRO, REPRESENTED BY PAZ "CHIT" CASTRO,

LEONILA GUEVARRA, FELIPE MARIANO, RICARDO DE GUZMAN, VIRGILIO JIMENEZ,
REPRESENTED BY JOSIE JIMENEZ, ASUNCION JUAMIZ, ROLANDO BATANG, CARMENCITA
SAMSON, AUGUSTO TORTOSA, REPRESENTED BY FERNANDO TORTOSA, SUSANA
MORANTE, LUZVIMINDA BULARAN, LUZ OROZCO, JOSE SAPICO, LEONARDO PALAD, ABEL
BAKING, REPRESENTED BY ABELINA BAKING, GRACIANO ARNALDO, REPRESENTED BY
LUDY ARNALDO, JUDITH HIDALGO, AND IGMIDIO JUSTINIANO, CIRIACO MIJARES,
REPRESENTED BY FREDEZWINDA MIJARES, JENNIFER MORANTE, TERESITA DIALA, AND
ANITA P. SALAR, Petitioners, v. PATRICIA, INC., RESPONDENT. THE CITY OF MANILA AND
CIRIACO C. MIJARES, Intervenors-Appellees.

DECISION

BERSAMIN, J.:

Jurisdiction over a real action is determined based on the allegations in the complaint of the
assessed value of the property involved. The silence of the complaint on such value is ground to
dismiss the action for lack of jurisdiction because the trial court is not given the basis for making
the determination.

The Case

For review is the decision promulgated on June 25, 20101  and the resolution promulgated on
February 16, 2011 in CA-G.R. CV No. 86735,2 whereby the Court of Appeals (CA) dismissed the
petitioners' complaint in Civil Case No. 96-81167, thereby respectively reversing and setting aside
the decision rendered on May 30, 2005 by the Regional Trial Court (RTC), Branch 32, in
Manila,3 and denying their motion for reconsideration.

Antecedents

The CA adopted the summary by the RTC of the relevant factual and procedural antecedents, as
follows:

This is an action for injunction and quieting of title to determine who owns the property
occupied by the plaintiffs and intervenor, Ciriano C. Mijares.

Additionally, to prevent the defendant Patricia Inc., from evicting the plaintiffs from
their respective improvements along Juan Luna Street, plaintiffs applied for a
preliminary injunction in their Complaint pending the quieting of title on the merits.

The complaint was amended to include different branches of the Metropolitan Trial
Courts of Manila. A Complaint-in-Intervention was filed by the City of Manila as owner
of the land occupied by the plaintiffs. Another Complaint-in-Intervention by Ciriano
Mijares was also filed alleging that he was similarly situated as the other plaintiffs.

A preliminary injunction was granted and served on all the defendants.

Based on the allegations of the parties involved, the main issue to be resolved is
whether the improvements of the plaintiffs stand on land that belongs to Patricia Inc.,
or the City of Manila. Who owns the same? Is it covered by a Certificate of Title?

All parties agreed and admitted in evidence by stipulation as to the authenticity of the
following documents:
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(1) Transfer Certificate of Title No. 44247 in the name of the City of Manila;

(2) Transfer Certificate of Title No. 35727 in the name of Patricia Inc.;

(3) Approved Plan PSD-38540; and

(4) Approved Subdivision Plan PCS-3290 for Ricardo Manotok.

The issue as to whether TCT 35727 should be cancelled as prayed for by the plaintiffs
and intervenor, Ciriano C. Mijares is laid to rest by agreement of the parties that this
particular document is genuine and duly executed. Nonetheless, the cancellation of a
Transfer Certificate of Title should be in a separate action before another forum.

Since the Transfer Certificates of Title of both Patricia Inc. and the City of Manila are
admitted as genuine,  the question now is: Where are the boundaries based on the
description in the respective titles?4

To resolve the question about the boundaries of the properties of the City of Manila and
respondent Patricia, Inc., the RTC appointed, with the concurrence of the parties, three geodetic
engineers as commissioners, namely: Engr. Rosario Mercado, Engr. Ernesto Pamular and Engr.
Delfin Bumanlag.5 These commissioners ultimately submitted their reports.

On May 30, 2005, the RTC rendered judgment in favor of the petitioners and against Patricia, Inc.,
permanently enjoining the latter from doing any act that would evict the former from their
respective premises, and from collecting any rentals from them. The RTC deemed it more sound to
side with two of the commissioners who had found that the land belonged to the City of Manila,
and disposed:

WHEREFORE, it is hereby ORDERED:

1. Defendant Patricia Inc.  and other person/s claiming under it,

are  PERMANENTLY ENJOINED to REFRAIN and DESIST  from any act
of  EVICTION OR EJECTMENT of the PLAINTIFFS  in the premises they
occupy; ChanRoblesVirtualawlibrary

2. Defendant Patricia Inc. STOP COLLECTING any rentals from the plaintiffs who

may seek reimbursement of previous payments in a separate action subject to
the ownership of the City of Manila and; ChanRoblesVirtualawlibrary

3. Attorney's fees of P10,000.00 to each plaintiff and intervenor, Ciriano Mijares;

P20,000.00 to the City of Manila. (emphasis ours)

No pronouncement as to costs.

SO ORDERED.6

Decision of the CA

On appeal, the CA, in CA-G.R. CV No. 86735, reversed the RTC's judgment,7 and dismissed the
complaint. The CA declared that the petitioners were without the necessary interest, either legal or
equitable title, to maintain a suit for quieting of title; castigated the RTC for acting like a mere
rubber stamp of the majority of the commissioners; opined that the RTC should have conducted
hearings on the reports of the commissioners; ruled as highly improper the adjudication of the
boundary dispute in an action for quieting of title; and decreed:

WHEREFORE, premises considered, We hereby  REVERSE  and  SET ASIDE  the

decision dated May 30, 2005 of the Regional Trial Court of Manila, Branch 32.  Civil
Case No. 96-81167 is hereby DISMISSEDfor utter want of merit. Accordingly, the
questioned order enjoining Patricia and all other person/s acting on its stead (sic) to
refrain and desist from evicting or ejecting plaintiffs/appellees in Patricia's own land
and from collecting rentals is LIFTED effective immediately.

No costs.
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SO ORDERED.8

The CA denied the motions for reconsideration of the petitioners and intervenor Mijares through
the assailed resolution of February 16, 2011.9

Hence, this appeal by the petitioners.

Issues

The petitioners maintain that the CA erred in dismissing the complaint, arguing that the parties
had openly raised and litigated the boundary issue in the RTC, and had thereby amended the
complaint to conform to the evidence pursuant to Section 5, Rule 10 of the Rules of Court; that
they had the sufficient interest to bring the suit for quieting of title because they had built their
improvements on the property; and that the RTC correctly relied on the reports of the majority of
the commissioners.

On its part, the City of Manila urges the Court to reinstate the decision of the RTC. It reprises the
grounds relied upon by the petitioners, particularly the application of Section 5, Rule 10 of
the Rules of Court.10

In response, Patricia, Inc. counters that the boundary dispute, which the allegations of the
complaint eventually boiled down to, was not proper in the action for quieting of title under Rule
63,  Rules of Court; and that Section 5, Rule 10 of the  Rules of Court  did not apply to vest the
authority to resolve the boundary dispute in the RTCC.11

In other words, did the CA err m dismissing the petitioners' complaint?

Ruling of the Court

The appeal lacks merit.

1.
Jurisdiction over a real action depends on 
the assessed value of the property involved
as alleged in the complaint

The complaint was ostensibly for the separate causes of action for injunction and for quieting of
title. As such, the allegations that would support both causes of action must be properly stated in
the complaint. One of the important allegations would be those vesting jurisdiction in the trial
court.

The power of a court to hear and decide a controversy is called its jurisdiction, which includes the
power to determine whether or not it has the authority to hear and determine the controversy
presented, and the right to decide whether or not the statement of facts that confer jurisdiction
exists, as well as all other matters that arise in the case legitimately before the court. Jurisdiction
imports the power and authority to declare the law, to expound or to apply the laws exclusive of
the idea of the power to make the laws, to hear and determine issues of law and of fact, the power
to hear, determine, and pronounce judgment on the issues before the court, and the power to
inquire into the facts, to apply the law, and to pronounce the judgment.12

But judicial power is to be distinguished from jurisdiction in that the former cannot exist without
the latter and must of necessity be exercised within the scope of the latter, not beyond it.13

Jurisdiction is a matter of substantive law because it is conferred only by law, as distinguished

from venue, which is a purely procedural matter. The conferring law may be the Constitution, or
the statute organizing the court or tribunal, or the special or general statute defining the
jurisdiction of an existing court or tribunal, but it must be in force at the time of the
commencement of the action.14Jurisdiction cannot be presumed or implied, but must appear
clearly from the law or it will not be held to exist,15 but it may be conferred on a court or tribunal
by necessary implication as well as by express terms.16 It cannot be conferred by the agreement
of the parties;17 or by the court's acquiescence;18 or by the erroneous belief of the court that it
had jurisdiction;19 or by the waiver of objections;20 or by the silence of the parties.21
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The three essential elements of jurisdiction are: one, that the court must have cognizance of the
class of cases to which the one to be adjudged belongs;  two, that the proper parties must be
present; and, three, that the point decided must be, in substance and effect, within the issue. The
test for determining jurisdiction is ordinarily the nature of the case as made by the complaint and
the relief sought; and the primary and essential nature of the suit, not its incidental character,
determines the jurisdiction of the court relative to it.22

Jurisdiction may be classified into original and appellate, the former being the power to take
judicial cognizance of a case instituted for judicial action for the first time under conditions
provided by law, and the latter being the authority of a court higher in rank to re-examine the final
order or judgment of a lower court that tried the case elevated for judicial review. Considering that
the two classes of jurisdiction are exclusive of each other, one must be expressly conferred by law.
One does not flow, nor is inferred, from the other.23

Jurisdiction is to be distinguished from its exercise.24 When there is jurisdiction over the person
and subject matter, the decision of all other questions arising in the case is but an exercise of that
jurisdiction.25  Considering that jurisdiction over the subject matter determines the power of a
court or tribunal to hear and determine a particular case, its existence does not depend upon the
regularity of its exercise by the court or tribunal.26 The test of jurisdiction is whether or not the
court or tribunal had the power to enter on the inquiry, not whether or not its conclusions in the
course thereof were correct, for the power to decide necessarily carries with it the power to decide
wrongly as well as rightly. In a manner of speaking, the lack of the power to act at all results in a
judgment that is void; while the lack of the power to render an erroneous decision results in a
judgment that is valid until set aside.27 That the decision is erroneous does not divest the court or
tribunal that rendered it of the jurisdiction conferred by law to try the case.28 Hence, if the court
or tribunal has jurisdiction over the civil action, whatever error may be attributed to it is simply
one of judgment, not of jurisdiction; appeal, not certiorari, lies to correct the error.29

The exclusive original jurisdiction of the RTC in civil cases is conferred and provided for in Section
19 of Batas Pambansa Blg. 129 (Judiciary Reorganization Act of 1980), viz.:

Sec. 19.  Jurisdiction in civil cases. - Regional Trial Courts shall exercise exclusive
original jurisdiction:

(1) In all civil actions in which the subject of the litigation is incapable of pecuniary
estimation;

(2) In all civil actions which involve the title to, or possession of, real property, or any
interest therein, except actions for forcible entry into and unlawful detainer of lands or
buildings, original jurisdiction over which is conferred upon Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts;

(3) In all actions in admiralty and maritime jurisdiction where he demand or claim
exceeds twenty thousand pesos (P20,000.00);

(4) In all matters of probate, both testate and intestate, where the gross value of the
estate exceeds twenty thousand pesos (P20,000.00);

(5) In all actions involving the contract of marriage and marital relations;

(6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or
body exercising judicial or quasi-judicial functions;

(7) In all civil actions and special proceedings falling within the exclusive original
jurisdiction of a Juvenile and Domestic Relations Court and of the Courts of Agrarian
Relations as now provided by law; and

(8) In all other cases in which the demand, exclusive of interest and costs or the value
of the property in controversy, amounts to more than twenty thousand pesos
(P20,000.00).

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For the purpose of determining jurisdiction, the trial court must interpret and apply the law on
jurisdiction in relation to the averments or allegations of ultimate facts in the complaint regardless
of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted
therein.30  Based on the foregoing provision of law, therefore, the RTC had jurisdiction over the
cause of action for injunction because it was one in which the subject of the litigation was
incapable of pecuniary estimation. But the same was not true in the case of the cause of action for
the quieting of title, which had the nature of a real action — that is, an action that involves the
issue of ownership or possession of real property, or any interest in real property31 — in view of
the expansion of the jurisdiction of the first level courts under Republic Act No. 7691, which
amended Section 33(3) of Batas Pambansa Blg. 129 effective on April 15, 1994,32  to now
pertinently provide as follows:

Section 33.  Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts in Civil Cases. -

Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts shall
exercise:

xxxx

(3)  Exclusive original jurisdiction in all civil actions which involve title to,
possession of, real property, or any interest therein where the assessed value
of the property or interest therein does not exceed Twenty thousand pesos
(P20,000.00) or, in civil actions in Metro Manila, where such assessed value
does not exceeds (sic) Fifty thousand pesos (P50,000.00) exclusive of
interest, damages of whatever kind, attorneys fees, litigation expenses and
costs: x x x

As such, the determination of which trial court had the exclusive original jurisdiction over the real
action is dependent on the assessed value of the property in dispute.

An action to quiet title is to be brought as a special civil action under Rule 63 of the Rules of Court.
Although Section 1 of Rule 63 specifies the forum to be "the appropriate Regional Trial
Court,"33 the specification does not override the statutory provision on jurisdiction. This the Court
has pointed out in Malana v. Tappa,34 to wit:

To determine which court has jurisdiction over the actions identified in the second
paragraph of Section 1, Rule 63 of the Rules of Court, said provision must be read
together with those of the Judiciary Reorganization Act of 1980, as amended.

It is important to note that Section 1, Rule 63 of the Rules of Court does not
categorically require that an action to quiet title be filed before the RTC. It repeatedly
uses the word "may"- that an action for quieting of title "may be brought under [the]
Rule" on petitions for declaratory relief, and a person desiring to file a petition for
declaratory relief "may x x x bring an action in the appropriate Regional Trial Court."
The use of the word "may" in a statute denotes that the provision is merely permissive
and indicates a mere possibility, an opportunity or an option.

In contrast, the mandatory provision of the Judiciary Reorganization Act of 1980, as

amended, uses the word shall and explicitly requires the MTC to exercise  exclusive
original jurisdiction over all civil actions which involve title to or possession of real
property where the assessed value does not exceed P20,000.00, thus:

xxxx

As found by the RTC, the assessed value of the subject property as stated in Tax
Declaration No. 02-48386 is only P410.00; therefore, petitioners Complaint involving
title to and possession of the said property is within the exclusive original jurisdiction of
the MTC, not the RTC.35

The complaint of the petitioners did not contain any averment of the assessed value of the
property. Such failure left the trial court bereft of any basis to determine which court could validly
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take cognizance of the cause of action for quieting of title. Thus, the RTC could not proceed with
the case and render judgment for lack of jurisdiction. Although neither the parties nor the lower
courts raised jurisdiction of the trial court in the proceedings, the issue did not simply vanish
because the Court can hereby motu proprio  consider and resolve it now by virtue of jurisdiction
being conferred only by law, and could not be vested by any act or omission of any party.36

2. 
The joinder of the action for injunction
and the action to quiet title 
was disallowed by the Rules of Court

Another noticeable area of stumble for the petitioners related to their having joined two causes of
action, i.e., injunction and quieting of title, despite the first being an ordinary suit and the latter a
special civil action under Rule 63. Section 5, Rule 2 of the  Rules of Court  disallowed the
joinder, viz.:

Section 5.  Joinder of causes of action.  — A party may in one pleading assert, in the
alternative or otherwise, as many causes of action as he may have against an opposing
party, subject to the following conditions:

(a) The party joining the causes of action shall comply with the rules on joinder of
parties;

(b)  The joinder shall not include special civil actions or actions governed by
special rules;

(c) Where the causes of action arc between the same parties but pertain to different
venues or jurisdictions, the joinder may be allowed in the Regional Trial Court provided
one of the causes of action falls within the jurisdiction of said court and the venue lies
therein; and

(d) Where the claims in all the causes of action arc principally for recovery of money,
the aggregate amount claimed shall he the test of jurisdiction.

Consequently, the RTC should have severed the causes of action, either upon motion or  motu
proprio, and tried them separately, assuming it had jurisdiction over both. Such severance was
pursuant to Section 6, Rule 2 of the Rules of Court, which expressly provides:

Section 6.  Misjoinder of causes of action. -- Misjoinder of causes of action is not a

ground for dismissal of an action. A misjoined cause of action may, on motion of a
party or on the initiative of the court, be severed and proceeded with separately. (n)

The refusal of the petitioners to accept the severance would have led to the dismissal of the case
conformably with the mandate of Section, Rule 17 of the Rules of Court, to wit:

Section 3. Dismissal due to fault of plaintiff. - If, for no justifiable cause, the plaintiff
fails to appear on the date of the presentation of his evidence in chief on the complaint,
or to prosecute his action for an unreasonable length of time, or to comply with these
Rules or any order of the court, the complaint may be dismissed upon motion of the
defendant or upon the court's own motion, without prejudice to the right of the
defendant to prosecute his counterclaim in the same or in a separate action. This
dismissal shall have the effect of an adjudication upon the merits, unless otherwise
declared by the court. (3a)

3. 
The petitioners did not show that they were 
real parties in interest to demand
either injunction or quieting of title

Even assuming that the RTC had jurisdiction over the cause of action for quieting of title, the
petitioners failed to allege and prove their interest to maintain the suit. Hence, the dismissal of this
cause of action was warranted.

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An action to quiet title or remove the clouds over the title is a special civil action governed by the
second paragraph of Section 1, Rule 63 of the Rules of Court. Specifically, an action for quieting of
title is essentially a common law remedy grounded on equity. The competent court is tasked to
determine the respective rights of the complainant and other claimants, not only to put things in
their proper place, to make the one who has no rights to said immovable respect and not disturb
the other, but also for the benefit of both, so that he who has the right would see every cloud of
doubt over the property dissipated, and he could afterwards without fear introduce the
improvements he may desire, to use, and even to abuse the property as he deems best. But "for
an action to quiet title to prosper, two indispensable requisites must concur, namely: (1) the
plaintiff or complainant has a legal or an equitable title to 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.37

The first requisite is based on Article 477 of the Civil Code which requires that the plaintiff must
have legal or equitable title to, or interest in the real property which is the subject matter of the
action. Legal title denotes registered ownership, while equitable title means beneficial
ownership,38 meaning a title derived through a valid contract or relation, and based on recognized
equitable principles; the right in the party, to whom it belongs, to have the legal title transferred to
him.39

To determine whether the petitioners as plaintiffs had the requisite interest to bring the suit, a
resort to the allegations of the complaint is necessary. In that regard, the complaint pertinently
alleged as follows:

THE CAUSE OF ACTION

5. Plaintiffs are occupants of a parcel of land situated at Juan Luna Street, Gagalangin,
Tondo (hereinafter "subject property");

6. Plaintiffs and their predecessor-in-interest have been in open and notorious

possession of the subject property for more than thirty (30) years;

7. Plaintiffs have constructed in good faith their houses and other improvements on the
subject property;

8. The subject property is declared an Area for Priority Development (APD) under
Presidential Decree No. 1967, as amended;

9. Defendant is claiming ownership of the subject property by virtue of Transfer

Certificate of Title (TCT) No. 35727 of the Registry of Deeds for the City of Manila. x x x

10. Defendant's claim of ownership over the subject property is without any legal or
factual basis because, assuming but not conceding that the TCT No. 35727 covers the
subject property, the parcel of land covered by and embraced in TCT No. 35727 has
already been sold and conveyed by defendant and, under the law, TCT No. 35727
should have been cancelled;

11. By virtue of TCT No. 35727, defendant is evicting, is about to evict or threatening
to evict the plaintiffs from the said parcel of land;

12. Because of the prior sales and conveyances, even assuming but not conceding that
the subject property is covered by and embraced in Transfer Certificate of title No.
35727, defendant cannot lawfully evict the plaintiffs from the subject property since it
no longer owns the subject property;

13. Any attempted eviction of the plaintiffs from the subject property would be without
legal basis and consequently, would only be acts of harassment which are contrary to
morals, good customs and public policy and therefore, plaintiffs are entitled to enjoin
the defendant from further harassing them;

14. Plaintiffs recently discovered that the subject property is owned by the City of
Manila and covered by and embraced in Transfer Certificate of Title No. 44247, a copy
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of which is attached hereto as Annex "B", of the Registry of Deeds for the City of
Manila;

15. TCT No. 35727 which is apparently valid and effective is in truth and in fact invalid,
ineffective, voidable or unenforceable, and constitutes a cloud on the rights and
interests of the plaintiffs over the subject property;

16. Plaintiffs are entitled to the removal of such cloud on their rights and interests over
the subject property;

17. Even assuming, but not admitting, that defendant owns the subject property, it
cannot evict the plaintiffs from the subject property because plaintiffs' right to possess
the subject property is protected by Presidential Decree No. 2016.

18. Even assuming, but not admitting, that defendant owns the subject property, it
cannot evict the plaintiffs from the subject property without reimbursing the plaintiffs
for the cost of the improvements made upon the subject property;

19. Because of defendant's unwarranted claim of ownership over the subject property
and its attempt to evict or disposses the plaintiffs from the subject property, plaintiffs
experienced mental anguish, serious anxiety, social humiliation, sleepless nights and
loss of appetite for which defendant should be ordered to pay each plaintiff the amount
of P20,000.00 as moral damages;

20. Because of defendant's unwarranted claim of ownership over the subject property
and its attempt to evict or disposses the plaintiffs from the subject property, plaintiffs
were constrained to litigate to protect their rights and interests, and hire services of a
lawyer, for which they should each be awarded the amount of P10,000.00.

21. The plaintiffs and the defendants are not required to undergo conciliation
proceeding before the Katarungan Pambarangay prior to the filing of this action.40

The petitioners did not claim ownership of the land itself, and did not show their authority or other
legal basis on which they had anchored their alleged lawful occupation and superior possession of
the property. On the contrary, they only contended that their continued possession of the property
had been for more than 30 years; that they had built their houses in good faith; and that the area
had been declared an Area for Priority Development (APD) under Presidential Decree No. 1967, as
amended. Yet, none of such reasons validly clothed them with the necessary interest to maintain
the action for quieting of title. For one, the authenticity of the title of the City of Manila and
Patricia, Inc. was not disputed but was even admitted by them during trial. As such, they could not
expect to have any right in the property other than that of occupants whose possession was only
tolerated by the owners and rightful possessors. This was because land covered by a Torrens title
cannot b e acquired by prescription or by adverse possession.41Moreover, they would not be
builders entitled to the protection of the Civil Code as builders in good faith. Worse for them, as
alleged in the respondent's comments,42which they did not deny, they had been lessees of
Patricia, Inc. Such circumstances indicated that they had no claim to possession in good faith, their
occupation not being in the concept of owners.

At this juncture, the Court observes that the fact that the area was declared an area for priority
development (APD) under Presidential Decree No. 1967, as amended, did not provide sufficient
interest to the petitioners. When an area is declared as an APD, the occupants would enjoy the
benefits provided for in Presidential Decree No. 1517 (Proclaiming Urban land Reform in the
Philippines and Providing for the Implementing Machinery Thereof). In  Frilles v. Yambao,43the
Court has summarized the salient features of Presidential Decree No. 1517, thus:

P. D. No. 1517, which took effect on June 11, 1978, seeks to protect the rights of bona-
fide tenants in urban lands by prohibiting their ejectment therefrom under certain
conditions, and by according them preferential right to purchase the land occupied by
them. The law covers all urban and urbanizable lands which have been proclaimed as
urban land reform zones by the President of the Philippines. If a particular property is
within a declared Area for Priority Development and Urban Land Reform Zone,  the
qualified lessee of the said property in that area can avail of the right of first
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refusal to purchase the same in accordance with Section 6 of the same law.
Only legitimate tenants who have resided for ten years or more on specific
parcels of land situated in declared Urban Land Reform Zones or Urban Zones, and
who have built their homes thereon,  have the right not to be dispossessed
therefrom and the right of first refusal to purchase the property under
reasonable terms and conditions to be determined by the appropriate
government agency. [Bold emphasis supplied]

Presidential Decree No. 1517 only granted to the occupants of APDs the right of first refusal, but
such grant was true only if and when the owner of the property decided to sell the property. Only
then would the right of first refusal accrue. Consequently, the right of first refusal remained
contingent, and was for that reason insufficient to vest any title, legal or equitable, in the
petitioners.

Moreover, the CA's adverse judgment dismissing their complaint as far as the action to quiet title
was concerned was correct. The main requirement for the action to be brought is that there is a
deed, claim, encumbrance, or proceeding casting cloud on the plaintiffs' title that is alleged and
shown to be in fact invalid or inoperative despite its  prima facie  appearance of validity or legal
efficacy, the eliminates the existence of the requirement. Their admission of the genuineness and
authenticity of Patricia, Inc.'s title negated the existence of such deed, instrument, encumbrance
or proceeding that was invalid, and thus the action must necessarily fail.

4.
The petitioners did not have 
a cause of action for injunction

The petitioners did not also make out a case for injunction in their favor.

The nature of the remedy of injunction and the requirements for the issuance of the injunctive writ
have been expounded in Philippine Economic Zone Authority v. Carantes,44 as follows:

Injunction is a judicial writ, process or proceeding whereby a party is directed either to

do a particular act, in which case it is called a mandatory injunction or to refrain from
doing a particular act, in which case it is called a prohibitory injunction. As a main
action, injunction seeks to permanently enjoin the defendant through a final injunction
issued by the court and contained in the judgment. Section 9, Rule 58 of the 1997
Rules of Civil Procedure, as amended, provides,

SEC. 9.  When final injunction granted. If after the trial of the action it
appears that the applicant is entitled to have the act or acts complained of
permanently enjoined, the court shall grant a final injunction perpetually
restraining the party or person enjoined from the commission or
continuance of the act or acts or confirming the preliminary mandatory
injunction.

Two (2) 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. Particularly, 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. [Emphasis Supplied]

Accordingly, the petitioners must prove the existence of a right to be protected. The records show,
however, that they did not have any right to be protected because they had established only the
existence of the boundary dispute between Patricia, Inc. and the City of Manila. Any violation of
the boundary by Patricia, Inc., if any, would give rise to the right of action in favor of the City of
Manila only. The dispute did not concern the petitioners at all.

5. 
Section 5, Rule 10 of the Rules of Court
did not save the day for the petitioners

The invocation of Section 5, Rule 10 of the  Rules of Court  in order to enable the raising of the
boundary dispute was unwarranted. First of all, a boundary dispute should not be litigated in an
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action for the quieting of title due to the limited scope of the action. The action for the quieting of
title is a tool specifically used to remove of any cloud upon, doubt, or unce1iainty affecting title to
real property;45it should not be used for any other purpose. And, secondly, the boundary dispute
would essentially seek to alter or modify either the Torrens title of the City of Manila or that of
Patricia, Inc., but any alteration or modification either way should be initiated only by direct
proceedings, not as an issue incidentally raised by the parties herein. To allow the boundary
dispute to be litigated in the action for quieting of title would violate Section 4846 of the Property
Registration Decree  by virtue of its prohibition against collateral attacks on Torrens titles. A
collateral attack takes place when, in another action to obtain a different relief, the certificate of
title is assailed as an incident in said action.47 This is exactly what the petitioners sought to do
herein, seeking to modify or otherwise cancel Patricia, Inc.'s title.

WHEREFORE, the Court  AFFIRMS  the decision promulgated on June 25, 2010 by the Court of
Appeals in CA-G.R. CV No. 86735; and ORDERS the petitioners to pay the costs of suit.

SO ORDERED.

Sereno, C.J., Leonardo-De Castro, Perlas-Bernabe and Caguioa, JJ., concur. 

Endnotes:

1Rollo, pp. 67-80; penned by Associate Justice Stephen C. Cruz, and concurred in by
Presiding Justice Andres B. Reyes, Jr., and Associate Justice Isaias P. Dicdican (retired).

2 Id. at 99-103.

3 Id. at 135-142.

4 Id. at 68-69.

5 Id. at 37.

6 Id. at 70.

7 Supra note 1.

8 Id. at 79.

9 Supra note 2.

10Rollo, pp. 158-162.

11 Id. at 168-176.

12 21 CJS § l5, p. 30.

13 Id. at 32.

14Republic v. Court of Appeals, G.R. No. 92326, June 24, 1992, 205 SCRA 356,
362; Lee v. Municipal Trial Court of Legaspi, 145 SCRA 408.

15Tenorio v. Batangas Transportation Co., 90 Phil 804 (1952);  Dimagiba v. Geraldez,

102 Phil 1016; De Jesus, et al. v. Garcia, et al., No. L-26816, February 28, 1967, 19
SCRA 554, 562.

16 21 CJS § 29, p. 40; thus, a statute declaring that there is a remedy for every wrong
cannot be relied on to confer jurisdiction on a court in a particular case, because the
remedy may lie with the Legislature; also, a court has no jurisdiction over a matter that
is not an action or special proceeding provided by statute or the Rules of Court unless

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the matter involves a wrong that requires judicial action, and for which there is no
adequate remedy at law.

17United States v. Castañares, 18 Phil 210, 214 (1911); unlike venue, which may be
regulated by the agreement of the parties

18Molina v. De La Riva, 6 Phil 12, 15 (1906);  Squillantini v. Republic, 88 Phil. 135

(1951).

19Azarcon v Sandiganbayan, G.R. No 116033, February 26, 1997, 268 SCRA

747; Cruzcosa v. Concepcion, 101 Phil 146.

20Sabulao v. De los Angeles, 39 SCRA 94; Vargas v. Akai Phil., Inc., 156 SCRA 531.

21United States v. De La Santa, 9 Phil 22, 26 (1907).

22 21 CJS § 35.

23 Garcia v. De Jesus, G. R. No. 88158, March 4, 1992, 206 SCRA 779.

24 Lim v. Pacquing, G.R. No. 115044, September 1, 1994, 236 SCRA 211,
218; Lamagan v. De la Cruz, No. L-27950, July 29, 1971, 40 SCRA 101, 107.

25 21 CJS § 26.

26Century Insurance Co., Inc. v. Fuentes, No. L-16039, August 31, 1961, 2 SCRA 1168,
1173.

27 21 CJS § 27.

28 Quiason, Philippine Courts and their Jurisdiction, 1993 ed., p. 199.

29De Castro v. Delta Motor Sales Corporation, No. L-34971, May 21, 1974, 57 SCRA
344, 346-347.

30Caparros v. Court of Appeals, G.R. No. 56803, February 28, 1989, 170 SCRA 758,
761; Republic v. Estenzo, No. L-35512, February 29, 1988, 158 SCRA 282, 285; Alvir v.
Vera, No. L-39338, July 16, 1984, 130 SCRA 357, 361-362.

31Heirsof Valeriano S. Concha, Sr. v. Lumocso, G.R. No. 158121, December 12, 2007,
540 SCRA 1, 16-18.

32 Thisdate of effectivity - 15 days after publication in the Malaya and in the Times on
March 30, 1994 - is provided for in Section 8 of Republic Act No. 7691 (see
Administrative Circular No. 09-94 dated June 14, 1994).

33 Section 1. Who may file petition.—Any person interested under a deed, will, contract
or other written instrument, whose rights are affected by a statute, executive order or
regulation, ordinance, or any other governmental regulation may, before breach or
violation thereof, bring an action in the appropriate Regional Trial Court to determine
any question of construction or validity arising, and for a declaration of his rights or
duties thereunder.

An action for the reformation of an instrument, to quiet title to real property or remove
clouds therefrom, or to consolidate ownership under Article 1607 of the Civil Code, may
be brought under this Rule. (1a, R64).

34 G.R. No. 181303, September 17, 2009, 600 SCRA 189.

35 Id. at 200.

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36Flores-Cruz v. Goli-Cruz, G.R. No. 172217, September 18, 2009, 600 SCRA 545, 553.

37Mananquil v. Moico, G.R. No. 180076, November 21, 2012, 686 SCRA 123, 129-130.

38 Id. at 124.

39Heirs of Enrique Diaz v. Virata, G.R. No. 162037, August 7, 2006, 498 SCRA 141,
161;  PVC Investment & Management Corporation v. Borcena and Ravidas, GR. No.
155225, September 23, 2005, 470 SCRA 685, 693.

40Rollo, pp. 112-115.

41Ragudo v. Fabella Estate Tenants Association, Inc., G.R. No. 146823, August 9,
2005, 466 SCRA 136, 148.

42Rollo, p. 171; 183-185.

43 G.R. No. 129889, July 11, 2002, 384 SCRA 353, 358.

44 G.R. No. 181274, June 23, 2010, 621 SCRA 569, 578-579.

45Phil-Ville
Development and Housing Corporation v. Bonifacio, G.R. No. 167391, June
8, 2011, 651 SCRA 327, 341.

46 Section 48. Certificate not subject to collateral attack. A certificate of title shall not
be subject to collateral attack. It cannot be altered, modified, or cancelled except in a
direct proceeding in accordance with law.

47Decaleng v. Bishop of the Missionary District of the Philippine Islands of Protestant

Episcopal Church in the United States of America, G.R. No. 171209, June 27, 2012, 675
SCRA 145, 168.

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