Republic of the Philippines

REGIONAL TRIAL COURT

National Capital Judicial Region
City of Parañaque
Branch 257

TERESITA J. LOZADA, represented

by Attorney-in-Fact, MARIA IMELDA
L. AFRICA, M.D. ,
Plaintiff, Civil Case No. 2019-304
For: Declaration of Nullity of Deed of
-versus- Absolute Sale, Reconveyance
and Damages
TAMBO REALTY CORPORATION,
RIZAL COMMERCIAL BANKING
CORPORATION, KUS FORMWORKS
GROUP, INC. and REGISTRY OF
DEEDS OF PARAÑAQUE CITY ,
Defendants.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - x

MOTION TO DISMISS

Defendant TAMBO REALTY CORPORATION (“TRC”, for brevity), by the

undersigned counsel, respectfully states:

1. While the undersigned counsel fully adheres to the IBP-OCA

Memorandum Policy Guidelines dated 12 March 2002, among others, to observe
restraint in filing a motion to dismiss and instead alleged the grounds thereof in the
answer as defenses, the prevailing circumstances and conditions in this case, as
will be shown hereunder, compels TRC to file a motion to dismiss in lieu of an
answer.

2. Accordingly, TRC most respectfully moves for the dismissal of this

present Complaint, to wit:

GROUNDS

I.

THIS HONORABLE COURT HAS NO JURISDICTION OVER THIS

INSTANT CASE DUE TO PLAINTIFF TERESITA J. LOZADA’S
FAILURE TO ALLEGE IN HER COMPLAINT DATED 05 NOVEMBER
2019 THE FAIR MARKET VALUE OR ZONAL VALUE OF THE
SUBJECT PROPERTIES.

II.

THE COMPLAINT STATES NO CAUSE OF ACTION AS TERESITA J.

LOZADA IS NOT A REAL PARTY IN INTEREST IN THIS CASE.

1
 III.

TRC IS AN INNOCENT PURCHASER IN GOOD FAITH AND FOR

VALUE.

IV.

PLAINTIFF’S ALLEGED CLAIM IS BARRED BY ESTOPPEL AND

LACHES.

ARGUMENTS/DISCUSSIONS

THIS HONORABLE COURT HAS NO

JURISDICTION OVER THIS INSTANT
CASE DUE TO PLAINTIFF TERESITA J.
LOZADA’S FAILURE TO ALLEGE IN HER
COMPLAINT DATED 05 NOVEMBER 2019
THE FAIR MARKET VALUE OR ZONAL
VALUE OF THE SUBJECT PROPERTIES.

3. Based on the allegations and prayers in the Complaint, it is indubitable

that this present case is a real action. A real action is one that affects title to or
possession of real property, or an interest therein.

4. Plaintiff Teresita J. Lozada seeks, among others, the (1) declaration as

void of the Deed of Absolute Sale1 dated 15 December 2009 between Agapito
Lozada and defendant KUS Formworks Group, Inc. (KUS); (2) declaration as null
and void of the Real Estate Mortgage executed by defendant KUS in favor of
defendant Rizal Commercial Banking Corporation (RCBC); (3) cancellation of
Transfer Certificates of Title No. 010-20170029622 and No. 010-20170029633
under the name of defendant TRC; and (4) the reconveyance of the properties
covered by said TCTs to the plaintiff.

5. An assiduous reading and judicious examination of the plaintiff’s

Complaint dated 05 November 2019 and filed on 08 November 2019, however, fail
to show any allegation, both in its body and prayer, of the fair market value of the
real properties subject hereof as stated in its current tax declaration or current
zonal valuation of the Bureau of Internal Revenue.

6. The basic rule is that the jurisdiction of a court over the subject matter
is determined from the allegations in the complaint, the law in force at the time the
complaint is filed, and the character of the relief sought, irrespective of whether the
plaintiff is entitled to all or some of the claims averred. Jurisdiction over the subject
matter is not affected by the pleas or the theories set up by the defendant in the

1
Complaint, Annexes “D” and “D-1”.
2
Ibid., Annex “B”.
3
Id., Annex “B-1”.

2
answer or motion to dismiss; otherwise, jurisdiction becomes dependent almost
entirely upon the whims of the defendant.4

7. Batas Pambansa Blg. 129, as amended, provides, in Section 19 (2)

thereof, that Regional Trial Courts have jurisdictions in civil cases involving real
properties, or any interest therein, as follows:

“Sec. 19. Jurisdiction in civil cases. — Regional Trial Courts shall

exercise exclusive original jurisdiction:

xxx xxx xxx

2) In all civil actions which involve the title to, or possession of, real
property, or any interest therein, where the assessed value of the
property involved exceeds Twenty thousand pesos (P20,000.00) or, for
civil actions in Metro Manila, where such value exceeds Fifty thousand
pesos (P50,000.00) except actions for forcible entry into and unlawful
detainer of lands or buildings, original jurisdiction over which is
conferred upon the Metropolitan Trial Courts, Municipal Trial Courts,
and Municipal Circuit Trial Courts.”

8. Relative thereto, Rule 141 of the Rules of Court provides:

“SEC. 7. Clerks of Regional Trial Courts. –

(a) For filing an action or a permissive OR COMPULSORY

counterclaim, CROSS-CLAIM, or money claim against an estate not
based on judgment, or for filing a third-party, fourth-party, etc,
complaint, or a complaint-in-intervention, if the total sum claimed,
INCLUSIVE OF INTERESTS, PENALTIES, SURCHARGES,
DAMAGES OF WHATEVER KIND, AND ATTORNEY'S FEES,
LITIGATION EXPENSES AND COSTS and/or in cases involving
property, the FAIR MARKET value of the REAL property in litigation
STATED IN THE CURRENT TAX DECLARATION OR CURRENT
ZONAL VALUATION OF THE BUREAU OF INTERNAL REVENUE,
WHICHEVER IS HIGHER, OR IF THERE IS NONE, THE STATED
VALUE OF THE PROPERTY IN LITIGATION OR THE VALUE OF THE
PERSONAL PROPERTY IN LITIGATION AS ALLEGED BY THE
CLAIMANT, is:”
[Table of Fees omitted.]

9. Thus, in the case of Cesar T. Hilario v. Allan T. Salvador,5 the

Honorable Supreme Court ruled that:

“The jurisdiction of the court over an action involving title to or

possession of land is now determined by the assessed value of the said
property and not the market value thereof. The assessed value of real
property is the fair market value of the real property multiplied by the
assessment level. It is synonymous to taxable value. The fair market
value is the price at which a property may be sold by a seller, who is not
compelled to sell, and bought by a buyer, who is not compelled to buy.

4
Pablo Malabanan v. Republic of the Philippines, G.R. No. 201821, September 19, 2018.
5
G.R. No. 160383, April 29, 2005.

3
 Even a cursory reading of the complaint will show that it does not
contain an allegation stating the assessed value of the property subject
of the complaint. The court cannot take judicial notice of the assessed
or market value of lands. Absent any allegation in the complaint of the
assessed value of the property, it cannot thus be determined whether
the RTC or the MTC had original and exclusive jurisdiction over the
petitioners’ action.”
[Citations omitted.]

10. Moreover, in the case of Spouses Claudio and Carmencita Trayvilla

v. Bernardo Sejas, et al.,6 the Honorable High Tribunal declared:

“As correctly ruled by the CA, while petitioners’ Amended Complaint

was denominated as one mainly for specific performance, they
additionally prayed for reconveyance of the property, as well as the
cancellation of Paglinawan’s TCT T-46,627. In other words, petitioners’
aim in filing Civil Case No. 4633-2K5 was to secure their claimed
ownership and title to the subject property, which qualifies their case as
a real action. Pursuant to Section 1, Rule 4 of the 1997 Rules of Civil
Procedure, a real action is one that affects title to or possession of real
property, or an interest therein.

Since Civil Case No. 4633-2K5 is a real action made so by the

Amended Complaint later filed, petitioners should have observed the
requirement under A.M. No. 04-2-04-SC relative to declaring the fair
market value of the property as stated in the current tax declaration or
zonal valuation of the Bureau of Internal Revenue (BIR). Since no such
allegation was made in the Amended Complaint, then the value of the
subject property as stated in the handwritten document sued upon and
restated in the Amended Complaint should be the basis for determining
jurisdiction and the amount of docket fees to be paid.

The CA is correct in its general observation that in the absence of

the required declaration of the fair market value as stated in the current
tax declaration or zonal valuation of the property, it cannot be
determined whether the RTC or first level court has original and
exclusive jurisdiction over the petitioners’ action, since the jurisdiction
of these courts is determined on the basis of the value of the property. x
x x”
[Citations omitted.]

11. As earlier stated, the plaintiff never alleged in the body of her Complaint,
much less in its prayer, the fair market value of the subject properties as stated in
the Tax Declaration or current zonal value of the Bureau of Internal Revenue. Sans
such allegation, there is no basis in determining whether the Regional Trial Court
(RTC) or the Metropolitan Trial Court (MTC) of Parañaque City has original and
exclusive jurisdiction over the plaintiff’s suit.

12. Verily, as there is no indication on the face of the Complaint that the
RTC has original and exclusive jurisdiction over the action of the plaintiff, this
Honorable Court has no jurisdiction and cannot take cognizance of this instant
case.

6
G.R. No. 204970, February 1, 2016.

4
THE COMPLAINT STATES NO CAUSE OF
ACTION AS TERESITA J. LOZADA IS NOT
A REAL PARTY-IN-INTEREST IN THIS
CASE

13. As defined, a real party-in-interest is the party who stands to be

benefited or injured by the judgment in the suit, or the party entitled to the avails of
the suit. Rule 3, Section 2, of the Rules of Court provides explicitly that every action
must be prosecuted and defended in the name of the real party-in-interest. The
party-in-interest is one who prosecutes or defends and is benefited or injured. The
term applies not only to the plaintiff but to the defendant, and the suit may be
dismissed if neither of them is a real party-in-interest. If the suit is not brought in
the name of or against the real party-in-interest, a motion to dismiss may be filed
on the ground that the complaint states no cause of action.7

14. TRC most respectfully posits that Teresita J. Lozada is not a real party-
in-interest to prosecute this case.

15. In her Complaint, she averred:

xxx xxx xxx

1. Plaintiff, TERESITA LOZADA (“Plaintiff TERESITA”) is of

legal age, married and is also residing at the above given address,
purposes of the instant complaint, however, plaintiff may be served with
the processes of the Honorable Court through her undersigned counsel.
x x x”.

xxx xxx xxx

6. Plaintiff is/are the legitimate owners and is currently in

possession in the concept of an owner of a real property at 4597
Sandejas St. Lozada Compound, Brgy. Tambo, Paranaque City,
covered now by TCT Nos. 010-2017002962 and 010-2017002963
(“Subject Properties”), duly registered with the Registry of Deeds of
Paranaque City in the name of TAMBO REALTY CORPORATION.
Copies of the said TCTs are hereto attached as ANNEX “B” and “B-
1”.

xxx xxx xxx

8. The subject properties, as the name imply, are the conjugal

dwelling of late AGAPITO LOZADA, also known as PEPITO LOZADA
(“AGAPITO”), and herein plaintiff TERESITA. The Lozada’s acquired
the proper (sic) from the family and has been the ancestral house of the
Lozada Clan since 1932 under Transfer Certificate of Title Nos. 167082
and 167083, copies of which are here to attached as ANNEXES “C”
and “C-1”.

7
Travel Wide Associated Sales (Phils.), Inc., et al. v. Court of Appeals, et al., G.R. No. 77356, July
15, 1991.

5
 16. Both TCT Nos. 167082 and 167083 declared that the subject properties
respectively described therein are registered in the name of “PEPITO C. LOZADA
of legal age, Filipino married to Teresita J. Lozada”.

17. However, in the case of Jose L. Ponce De Leon v. Rehabilitation

Finance Corporation, et al.,8 the Honorable Supreme Court emphatically
declared:

“Needless to say, had the property been acquired by them

during coverture, it would have been registered, in the name not of
"Francisco Soriano, married to Tomasa Rodriguez," but of the spouses
"Francisco Soriano and Tomasa Rodriguez." In Litam v. Espiritu, We
quoted with approval the following observation made in the decision
under review therein:

‘Further strong proofs that the properties in question are

the paraphernal properties of Marcosa Rivera, are the very
Torrens Titles covering said properties. All the said
properties are registered in the name of 'Marcosa Rivera,
married to Rafael Litam.' This circumstance indicates that the
properties in question belong to the registered owner,
Marcosa Rivera, as her paraphernal properties, for if they
were conjugal, the titles covering the same should have been
issued in the names of Rafael Litam and Marcosa Rivera.
The words 'married to Rafael Litam' written after the name
of Marcosa Rivera, in each of the above mentioned titles are
merely descriptive of the civil status of Marcosa Rivera, the
registered owner of the properties covered by said titles.’”
[Citations omitted.]

18. Applying the foregoing, Teresita J. Lozada never became an owner,

much more a registered owner, of the subject properties. The fact that the name
“Teresita J. Lozada” was mentioned in TCT Nos. 167082 and 167083 did not make
her ipso facto a co-owner of Pepito C. Lozada a.k.a. Agapito Lozada, the sole
registered owner, of the subject properties. The phrase "married to" is merely
descriptive of the civil status of the registered owner.9

19. During the same assiduous reading and judicious examination of the
plaintiff’s Complaint, it was ascertained that Teresita J. Lozada never made any
allegation as to what mode or manner did she acquire ownership of the subject
properties. As the Complaint stands as filed, plaintiff omitted to allege a right in her
favor by whatever means and under whatever law such right came to be or was
created. Without such allegation, Teresita J. Lozada failed to establish her
standing as a real party-in-interest in this suit.

20. Such omission is fatal as plaintiff failed to satisfy one of the essential
elements of a “cause of action”, that is, a right in favor of the plaintiff by whatever
means and under whatever law it arises or is created. Accordingly, this instant
Complaint must be dismissed on the ground of failure to state a cause of action
against the defendants.

8
G.R. No. L-24571, December 18, 1970.
9
Juan Sevilla Salas, Jr. v. Eden Villena Aguila, G.R. No. 202370, September 23, 2013.

6
 21. Nonetheless, the plaintiff may advance the argument that she is a legal
heir of Pepito C. Lozada. With utmost due respect, this argument is unsustainable
and is devoid of merit.

22. In paragraph 1 of her Complaint above quoted, Teresita J. Lozada

states that her civil status is “married”. Unless she re-married but still uses the
surname of her alleged deceased husband, Pepito Lozada, a.k.a. Agapito Lozada,
her statement as to her civil status being “married” means that she still married to
Pepito Lozada, a.k.a. Agapito Lozada, and the latter is still alive. Consequently, to
argue that she is an heir of Pepito Lozada, a.k.a. Agapito Lozada is fallacious.

23. More importantly, there is no allegation in the Complaint that Teresita J.

Lozada is an heir of Pepito Lozada, a.k.a. Agapito Lozada. But even if Teresita J.
Lozado alleged in her Complaint that she is an heir of Pepito Lozada, a.k.a. Agapito
Lozada, there nothing in the records of this case to substantiate that a special
proceeding to have her declared as heir of Pepito Lozada, a.k.a. Agapito Lozada
has been instituted.

24. The jurisprudential pronouncements of the Honorable Supreme Court

in the case of Faustino Reyes, et al. v. Peter B. Enriquez,10 are relevant in this
present case. It said:

“In cases wherein alleged heirs of a decedent in whose name a

property was registered sue to recover the said property through the
institution of an ordinary civil action, such as a complaint for
reconveyance and partition, or nullification of transfer certificate of titles
and other deeds or documents related thereto, this Court has
consistently ruled that a declaration of heirship is improper in an
ordinary civil action since the matter is ‘within the exclusive competence
of the court in a special proceeding.’ In the recent case of Portugal v.
Portugal-Beltran, the Court had the occasion to clarify its ruling on the
issue at hand, to wit:

The common doctrine in Litam, Solivio and Guilas in which

the adverse parties are putative heirs to the estate of a
decedent or parties to the special proceedings for its
settlement is that if the special proceedings are pending, or if
there are no special proceedings filed but there is, under
the circumstances of the case, a need to file one, then
the determination of, among other issues, heirship
should be raised and settled in said special
proceedings. Where special proceedings had been
instituted but had been finally closed and terminated,
however, or if a putative heir has lost the right to have himself
declared in the special proceedings as co-heir and he can no
longer ask for its re-opening, then an ordinary civil action can
be filed for his declaration as heir in order to bring about the
annulment of the partition or distribution or adjudication of a
property or properties belonging to the estate of the
deceased.

10
G.R. No. 162956, April 10, 2008.

7
 In the instant case, while the complaint was denominated as an
action for the ‘Declaration of Non-Existency[sic], Nullity of Deeds, and
Cancellation of Certificates of Title, etc.,’ a review of the allegations
therein reveals that the right being asserted by the respondents are their
right as heirs of Anacleto Cabrera who they claim co-owned one-half of
the subject property and not merely one-fourth as stated in the
documents the respondents sought to annul. As correctly pointed out
by the trial court, the ruling in the case of Heirs of Guido Yaptinchay
v. Hon. Roy del Rosario is applicable in the case at bar. In the said
case, the petitioners therein, claiming to be the legal heirs of the late
Guido and Isabel Yaptinchay filed for annulment of the transfer
certificates of title issued in the name of Golden Bay Realty Corporation
on the ground that the subject properties rightfully belong to the
petitioners' predecessor and by virtue of succession have passed on to
them. In affirming the trial court therein, this Court ruled:

...(T)he plaintiffs who claimed to be the legal heirs of the said

Guido and Isabel Yaptinchay have not shown any proof or
even a semblance of it - except the allegations that they are
the legal heirs of the aforementioned Yaptinchays - that they
have been declared the legal heirs of the deceased couple.
Now, the determination of who are the legal heirs of the
deceased couple must be made in the proper special
proceedings in court, and not in an ordinary suit for
reconveyance of property. This must take precedence over
the action for reconveyance.

In the same manner, the respondents herein, except for their

allegations, have yet to substantiate their claim as the legal heirs of
Anacleto Cabrera who are, thus, entitled to the subject property. Neither
is there anything in the records of this case which would show that a
special proceeding to have themselves declared as heirs of Anacleto
Cabrera had been instituted. As such, the trial court correctly dismissed
the case for there is a lack of cause of action when a case is instituted
by parties who are not real parties in interest. While a declaration of
heirship was not prayed for in the complaint, it is clear from the
allegations therein that the right the respondents sought to protect or
enforce is that of an heir of one of the registered co-owners of the
property prior to the issuance of the new transfer certificates of title that
they seek to cancel. Thus, there is a need to establish their status as
such heirs in the proper forum.”
[Citations omitted.]

25. In the latter case of Heirs of Madaleno Ypon v. Guadioso Ponteras

Rocaforte, et al.,11 the Honorable Supreme Court again stressed the doctrine that
the determination of who are the legal heirs of the deceased couple must be made
in the proper special proceedings in court, and not in an ordinary suit for
reconveyance of property. Here goes:

“As stated in the subject complaint, petitioners, who were among

the plaintiffs therein, alleged that they are the lawful heirs of Magdaleno
and based on the same, prayed that the Affidavit of Self-Adjudication
executed by Gaudioso be declared null and void and that the transfer
certificates of title issued in the latter’s favor be cancelled. While the

11
G.R. No. 198680, July 8, 2013.

8
foregoing allegations, if admitted to be true, would consequently warrant
the reliefs sought for in the said complaint, the rule that the
determination of a decedent’s lawful heirs should be made in the
corresponding special proceeding precludes the RTC, in an ordinary
action for cancellation of title and reconveyance, from granting the
same. In the case of Heirs of Teofilo Gabatan v. CA, the Court, citing
several other precedents, held that the determination of who are the
decedent’s lawful heirs must be made in the proper special proceeding
for such purpose, and not in an ordinary suit for recovery of ownership
and/or possession, as in this case:

Jurisprudence dictates that the determination of

who are the legal heirs of the deceased must be made in
the proper special proceedings in court, and not in an
ordinary suit for recovery of ownership and possession
of property. This must take precedence over the action for
recovery of possession and ownership. The Court has
consistently ruled that the trial court cannot make a
declaration of heirship in the civil action for the reason that
such a declaration can only be made in a special
proceeding. Under Section 3, Rule 1 of the 1997 Revised
Rules of Court, a civil action is defined as one by which a
party sues another for the enforcement or protection of a
right, or the prevention or redress of a wrong while a special
proceeding is a remedy by which a party seeks to establish
a status, a right, or a particular fact. It is then decisively clear
that the declaration of heirship can be made only in a special
proceeding inasmuch as the petitioners here are seeking the
establishment of a status or right.

In the early case of Litam, et al. v. Rivera, this Court

ruled that the declaration of heirship must be made in a
special proceeding, and not in an independent civil action.
This doctrine was reiterated in Solivio v. Court of Appeals x
x x:

In the more recent case of Milagros Joaquino v.

Lourdes Reyes, the Court reiterated its ruling that matters
relating to the rights of filiation and heirship must be
ventilated in the proper probate court in a special
proceeding instituted precisely for the purpose of
determining such rights. Citing the case of Agapay v.
Palang, this Court held that the status of an illegitimate child
who claimed to be an heir to a decedent's estate could not
be adjudicated in an ordinary civil action which, as in this
case, was for the recovery of property. (Emphasis and
underscoring supplied; citations omitted)

By way of exception, the need to institute a separate special

proceeding for the determination of heirship may be dispensed with for
the sake of practicality, as when the parties in the civil case had
voluntarily submitted the issue to the trial court and already presented
their evidence regarding the issue of heirship, and the RTC had
consequently rendered judgment thereon, or when a special proceeding
had been instituted but had been finally closed and terminated, and
hence, cannot be re-opened.
[Citations omitted.]

9
 26. Obviously, none of the foregoing exceptions are prevailing in this instant
case. It is thus imperative that the proper special proceeding be instituted first to
determine the heirs of decedent Pepito Lozada, a.k.a. Agapito Lozada.

27. Based on all the foregoing, plaintiff Teresita J. Lozada is patently not a
real party-in-interest to prosecute this case. The dismissal of this instant Complaint
on the ground that it states no cause of action is proper.

TAMBO REALTY CORPORATION (TRC) IS

AN INNOCENT PURCHASER IN GOOD
FAITH AND FOR VALUE

28. Based solely on the allegations in the Complaint and its annexes, the
following is the chronicle of the antecedent transactions involving the subject
properties:

a. On 24 February 2006, TCT No. 16708312 and TCT No. 16708213

covering the subject properties were issued in the name of Pepito C. Lozada
by the Registry of Deeds of Parañaque City;

b. On 15 December 2009, Pepito C. Lozada sold, ceded, transferred

and conveyed to defendant KUS the subject properties, by way of two (2)
Deeds of Absolute Sale, for a total consideration of Seven Million Five
Hundred Thousand Pesos (PhP 7,500,000.00), Philippine currency.14

c. On 23 December 2009, the said Deeds of Absolute Sale were

respectively registered and annotated in TCT Nos. 167083 and 167082.
Pursuant thereto, TCT Nos. 167083 and 167082 were totally cancelled and
in lieu thereof, TCT Nos. 182915 and 182916 were respectively issued to
defendant KUS.15

d. TCTs were subsequently issued in the name of defendant KUS for

the subject properties;16

e. KUS thereafter mortgaged the subject properties to defendant

RCBC;17

f. Defendant RCBC later on extra-judicially foreclosed the subject

properties;18

g. Defendant TRC acquired the subject properties through purchase

from defendant RCBC;19 and

12
Complaint, Annex “C”.
13
Ibid., Annex “C-1”.
14
Id., Annexes “D” and “D-1”.
15
See Note 12 at page 2, and Note 13 at page 3.
16
Complaint, par. 18.
17
Ibid., pars. 16 and 29.
18
See Note 16.
19
Complaint, par. 20.

10
 h. On 07 July 2017, TCT Nos. 010-2017002962 and 010-2017002963
covering the subject properties were issued in the name of defendant TRC.
These two (2) titles are transfers from TCT Nos. 2017000717 and
2017000718, respectively, which were totally cancelled.20

29. The above chronicle clearly establishes that defendant TRC is an

innocent for value and in good faith and, thus had already acquired an indefeasible
incontrovertible title to the subject properties.

30. Jurisprudence has defined an innocent purchaser for value as one who
buys the property of another without notice that some other person has a right to
or interest therein and who then pays a full and fair price for it at the time of the
purchase or before receiving a notice of the claim or interest of some other persons
in the property. Buyers in good faith buy a property with the belief that the person
from whom they receive the thing is the owner who can convey title to the property.
Such buyers do not close their eyes to facts that should put a reasonable person
on guard and still claim that they are acting in good faith.21

31. In paragraph 31 of the Complaint, plaintiff alleges that defendant TRC

was a buyer in bad faith by saying:

“31. The reconveyance of the subject property to the Plaintiff does

not prejudice the right of the Defendant TAMBO because form the very
beginning, Defendant TAMBO knew that they are buyers (sic) in bad
faith. In effect, by illegally purchasing and bidding on a property
auctioned by the Bank, (sic) and knowing the Adverse Claim on the
property does not give them (sic) the right to own the property.”

32. Completely averse to the above plaintiff’s claim, there is nothing in all
the TCTs she attached in her Complaint would show of any annotation purporting
to be an adverse claim on the subject properties. All of such titles are clean, so to
speak. It is impossible for defendant TRC to know of any adverse claim on the
subject properties that is non-existent.

33. The Honorable Supreme Court, in the case of Sps. Roberto Aboitiz
and Maria Cristina Cabarrus v. Sps. Peter L. Po and Victoria L. Po,22 clearly
explicated as follows:

“However, if a property is registered, the buyer of a parcel of land

is not obliged to look beyond the transfer certificate of title to be
considered a purchaser in good faith for value.

Section 44 of Presidential Decree No. 1529 states:

Section 44. Statutory liens affecting title. - Every

registered owner receiving a certificate of title in pursuance
of a decree of registration, and every subsequent purchaser

20
See Notes 2 and 3.
21
Spouses Dominador Peralta and Ofelia Peralta v. Heirs of Bernardina Abalon, G.R. No. 183448,
June 30, 2014.
22
G.R. No. 208450, June 5, 2017.

11
of registered land taking a certificate of title for value and in
good faith, shall hold the same free from all encumbrances
except those noted in said certificate and any of the following
encumbrances which may be subsisting, namely:

First. Liens, claims or rights arising or existing under the

laws and Constitution of the Philippines which are not by law
required to appear of record in the Registry of Deeds in order
to be valid against subsequent purchasers or
encumbrancers of record.

Second. Unpaid real estate taxes levied and assessed

within two years immediately preceding the acquisition of any
right over the land by an innocent purchaser for value,
without prejudice to the right of the government to collect
taxes payable before that period from the delinquent
taxpayer alone.

Third. Any public highway or private way established or

recognized by law, or any government irrigation canal or
lateral thereof, if the certificate of title does not state that the
boundaries of such highway or irrigation canal or lateral
thereof have been determined.

Fourth. Any disposition of the property or limitation on

the use thereof by virtue of, or pursuant to, Presidential
Decree No. 27 or any other law or regulations on agrarian
reform. (Emphasis supplied)

In Cruz v. Court of Appeals:

The real purpose of the Torrens system of registration

is to quiet title to land and to put a stop to any question of
legality of the title except claims which have been recorded
in the certificate of title at the time of registration or which
may arise subsequent thereto. Every registered owner and
every subsequent purchaser for value in good faith holds the
title to the property free from all encumbrances except those
noted in the certificate. Hence, a purchaser is not required to
explore further what the Torrens title on its face indicates in
quest for any hidden defect or inchoate right that may
subsequently defeat his right thereto.

Where innocent third persons, relying on the

correctness of the certificate of title thus issued, acquire
rights over the property the court cannot disregard such
rights and order the total cancellation of the certificate. The
effect of such an outright cancellation would be to impair
public confidence in the certificate of title, for everyone
dealing with property registered under the Torrens system
would have to inquire in every instance whether the title has
been regularly or irregularly issued. This is contrary to the
evident purpose of the law. Every person dealing with
registered land may safely rely on the correctness of the
certificate of title issued therefor and the law will in no way
oblige him to go behind the certificate to determine the
condition of the property. Even if a decree in a registration

12
 proceeding is infected with nullity, still an innocent purchaser
for value relying on a Torrens title issued in pursuance
thereof is protected.

The rationale for this rule is the public's interest in sustaining ‘the
indefeasibility of a certificate of title, as evidence of the lawful ownership
of the land or of any encumbrance’ on it. In Leong v. See:

The Torrens system was adopted to ‘obviate possible

conflicts of title by giving the public the right to rely upon the
face of the Torrens certificate and to dispense, as a rule, with
the necessity of inquiring further.’

One need not inquire beyond the four comers of the

certificate of title when dealing with registered property. . .
....

The protection of innocent purchasers in good faith for

value grounds on the social interest embedded in the legal
concept granting indefeasibility of titles. Between the third
party and the owner, the latter would be more familiar with
the history and status of the titled property. Consequently, an
owner would incur less costs to discover alleged invalidities
relating to the property compared to a third party. Such costs
are, thus, better borne by the owner to mitigate costs for the
economy, lessen delays in transactions, and achieve a less
optimal welfare level for the entire society.(Citations omitted)

Thus, respondents were not obliged to look beyond the title before
they purchased the property. They may rely solely on the face of the
title.

The only exception to the rule is when the purchaser has actual
knowledge of any defect or other circumstance that would cause ‘a
reasonably cautious man’ to inquire into the title of the seller. If there is
anything which arouses suspicion, the vendee is obliged to investigate
beyond the face of the title. Otherwise, the vendee cannot be deemed
a purchaser in good faith entitled to protection under the law.
[Citations omitted.]

34. In this present case, there is no showing that defendant TRC had any
knowledge of any defect in the title of defendant RCBC. Perforce, the claim of the
plaintiff that TRC is a buyer in bad faith is utterly without basis. Inversely, defendant
TRC is completely a buyer in good faith and for value.

35. Granting arguendo, that there is an iota of truth to the allegation of

Teresita J. Lozada that her signature in the Deeds of Absolute Sale executed by
Pepito Lozada in favor of defendant KUS was forged, still, defendant TRC obtained
valid titles over the subject properties.

36. In the case Spouses Dominador Peralta and Ofelia Peralta v. Heirs
of Bernadina Avalon, supra., it was held:

“It is well-settled that ‘a certificate of title serves as evidence of an

indefeasible and incontrovertible title to the property in favor of the

13
person whose name appears therein. The real purpose of the Torrens
system of land registration is to quiet title to land and put a stop forever
to any question as to the legality of the title.’

In Tenio-Obsequio v. Court of Appeals, we explained the purpose

of the Torrens system and its legal implications to third persons dealing
with registered land, as follows:

The main purpose of the Torrens system is to avoid

possible conflicts of title to real estate and to facilitate
transactions relative thereto by giving the public the right to
rely upon the face of a Torrens certificate of title and to
dispense with the need of inquiring further, except when the
party concerned has actual knowledge of facts and
circumstances that should impel a reasonably cautious man
to make such further inquiry. Where innocent third persons,
relying on the correctness of the certificate of title thus
issued, acquire rights over the property, the court cannot
disregard such rights and order the total cancellation of the
certificate. The effect of such an outright cancellation would
be to impair public confidence in the certificate of title, for
everyone dealing with property registered under the Torrens
system would have to inquire in every instance as to whether
the title has been regularly or irregularly issued by the court.
Every person dealing with registered land may safely rely on
the correctness of the certificate of title issued therefor and
the law will in no way oblige him to go beyond the certificate
to determine the condition of the property.

The Torrens system was adopted in this country

because it was believed to be the most effective measure to
guarantee the integrity of land titles and to protect their
indefeasibility once the claim of ownership is established and
recognized. If a person purchases a piece of land on the
assurance that the seller's title thereto is valid, he should not
run the risk of being told later that his acquisition was
ineffectual after all. This would not only be unfair to him. What
is worse is that if this were permitted, public confidence in the
system would be eroded and land transactions would have
to be attended by complicated and not necessarily
conclusive investigations and proof of ownership. The further
consequence would be that land conflicts could be even
more numerous and complex than they are now and possibly
also more abrasive, if not even violent. The Government,
recognizing the worthy purposes of the Torrens system,
should be the first to accept the validity of titles issued
thereunder once the conditions laid down by the law are
satisfied.

The Torrens system was intended to guarantee the integrity and

conclusiveness of the certificate of registration, but the system cannot
be used for the perpetration of fraud against the real owner of the
registered land. The system merely confirms ownership and does not
create it. It cannot be used to divest lawful owners of their title for the
purpose of transferring it to another one who has not acquired it by any
of the modes allowed or recognized by law. Thus, the Torrens system

14
cannot be used to protect a usurper from the true owner or to shield the
commission of fraud or to enrich oneself at the expense of another.

It is well-established in our laws and jurisprudence that a person

who is dealing with a registered parcel of land need not go beyond the
face of the title. A person is only charged with notice of the burdens and
claims that are annotated on the title. This rule, however, admits of
exceptions, which we explained in Clemente v. Razo:

Any buyer or mortgagee of realty covered by a Torrens

certificate of title, in the absence of any suspicion, is not
obligated to look beyond the certificate to investigate the
titles of the seller appearing on the face of the certificate.
And, he is charged with notice only of such burdens and
claims as are annotated on the title.

We do acknowledge that the rule thus enunciated is not

cast in stone. For, indeed, there are exceptions thereto.
Thus, in Sandoval vs. CA, we made clear the following:

The aforesaid principle admits of an

unchallenged exception: that a person dealing
with registered land has a right to rely on the
Torrens certificate of title and to dispense with the
need of inquiring further except when the party
has actual knowledge of facts and circumstances
that would impel a reasonably cautious man to
make such inquiry or when the purchaser has
knowledge of a defect or the lack of title in his
vendor or of sufficient facts to induce a reasonably
prudent man to inquire into the status of the title of
the property in litigation. The presence of anything
which excites or arouses suspicion should then
prompt the vendee to look beyond the certificate
and investigate the title of the vendor appearing
on the face of said certificate. One who falls within
the exception can neither be denominated an
innocent purchaser for value nor a purchaser in
good faith; and hence does not merit the
protection of the law.

Thus, the determination whether one is a buyer in good faith or

can be considered an innocent purchaser for value becomes
imperative. Section 55 of the Land Registration Act provides protection
to an innocent purchaser for value by allowing him to retain the parcel
of land bought and his title is considered valid. Otherwise, the title would
be cancelled and the original owner of the parcel of land is allowed to
repossess it.

Jurisprudence has defined an innocent purchaser for value as one

who buys the property of another without notice that some other person
has a right to or interest therein and who then pays a full and fair price
for it at the time of the purchase or before receiving a notice of the claim
or interest of some other persons in the property. Buyers in good faith
buy a property with the belief that the person from whom they receive
the thing is the owner who can convey title to the property. Such buyers

15
do not close their eyes to facts that should put a reasonable person on
guard and still claim that they are acting in good faith.

The assailed Decision of the CA held that the Andals were buyers
in good faith, while Spouses Peralta were not. Despite its determination
that fraud marred the sale between Bernardina Abalon and Rellama, a
fraudulent or forged document of sale may still give rise to a valid title.
The appellate court reasoned that if the certificate of title had already
been transferred from the name of the true owner to that which was
indicated by the forger and remained as such, the land is considered to
have been subsequently sold to an innocent purchaser, whose title is
thus considered valid. The CA concluded that this was the case for the
Andals.

The appellate court cited Fule v. Legare as basis for its ruling. In
the said case, the Court made an exception to the general rule that a
forged or fraudulent deed is a nullity and conveys no title. A fraudulent
document may then become the root of a valid title, as it held in Fule:

Although the deed of sale in favor of John W. Legare

was fraudulent, the fact remains that he was able to secure
a registered title to the house and lot. It was this title which
he subsequently conveyed to the herein petitioners. We have
indeed ruled that a forged or fraudulent deed is a nullity and
conveys no title (Director of Lands vs. Addison, 49 Phil., 19).
However, we have also laid down the doctrine that there are
instances when such a fraudulent document may become
the root of a valid title. One such instance is where the
certificate of title was already transferred from the name of
the true owner to the forger, and while it remained that way,
the land was subsequently sold to an innocent purchaser.
For then, the vendee had the right to rely upon what
appeared in the certificate (Inquimboy vs. Cruz, G.R. No. L-
13953, July 28, 1960).

We have been constrained to adopt the conclusion here

set forth because under the Torrens system, ‘registration is
the operative act that gives validity to the transfer or creates
a lien upon the land (Secs. 50 and 51, Land Registration Act).
Consequently, where there was nothing in the certificate of
title to indicate any cloud or vice in the ownership of the
property, or any encumbrance thereon, the purchaser is not
required to explore farther than what the Torrens title upon
its face indicates in quest for any hidden defect or inchoate
right that may subsequently defeat his right thereto. If the rule
were otherwise, the efficacy and conclusiveness of the
certificate of title which the Torrens system seeks to insure
would entirely be futile and nugatory. (Reynes vs. Barrera,
68 Phil., 656; De Lara and De Guzman vs. Ayroso, 50 O.G.
No 10, 4838). The public shall then be denied of its foremost
motivation for respecting and observing the Land
Registration Act. In the end, the business community stands
to be inconvenienced and prejudiced immeasurably.

Furthermore, when the Register of Deeds issued a

certificate of title in the name of John W. Legare, and
thereafter registered the same, John W. Legare, insofar as

16
 third parties were concerned, acquired valid title to the house
and lot here disputed. When, therefore, he transferred this
title to the herein petitioners, third persons, the entire
transaction fell within the purview of Article 1434 of the Civil
Code. The registration in John W. Legare's name effectively
operated to convey the properties to him.

xxx xxx xxx

The established rule is that a forged deed is generally null and

cannot convey title, the exception thereto, pursuant to Section 55 of the
Land Registration Act, denotes the registration of titles from the forger
to the innocent purchaser for value. Thus, the qualifying point here is
that there must be a complete chain of registered titles. This means that
all the transfers starting from the original rightful owner to the innocent
holder for value and that includes the transfer to the forger must be duly
registered, and the title must be properly issued to the transferee.

Contrary to what the Abalons would like to impress on

us, Fule and Torres do not present clashing views. In Fule, the original
owner relinquished physical possession of her title and thus enabled the
perpetrator to commit the fraud, which resulted in the cancellation of her
title and the issuance of a new one. The forged instrument eventually
became the root of a valid title in the hands of an innocent purchaser for
value. The new title under the name of the forger was registered and
relied upon by the innocent purchaser for value. Hence, it was clear that
there was a complete chain of registered titles.

xxx xxx xxx

In the instant case, there is no evidence that the chain of registered

titles was broken in the case of the Andals. Neither were they proven to
have knowledge of anything that would make them suspicious of the
nature of Rellama's ownership over the subject parcel of land. Hence,
we sustain the CA's ruling that the Andals were buyers in good faith.
Consequently, the validity of their title to the parcel of the land bought
from Rellama must be upheld.
[Citations omitted.]

37. Similar to this instant case, as pictured by the plaintiff’s allegations in

her Complaint, there was a complete chain of registered titles of the subject
properties from Pepito C. Lozada, the original rightful owner, to defendant TRC,
the present innocent holder for value. In between, the transfer of the subject
properties to defendant KUS, the alleged forger, was also registered and the title
thereto was issued to KUS.

38. Under the circumstances, the alleged forged Deeds of Absolute Sale
between Pepito C. Lozada and defendant KUS became the root of a valid title of
defendant TRC. Inevitably, the validity of the titles of defendant TRC to the subject
properties must be upheld.

39. On the basis of the foregoing disquisitions, it is likewise proved that the
Complaint failed to state a cause of action against defendant TRC to warrant its
dismissal.

17
PLAINTIFF’S ALLEGED CLAIM IS BARRED
BY ESTOPPEL AND LACHES

40. Defendant TRC most respectfully posits that estoppel and laches have
already set in against plaintiff Teresita J. Lozada. Thus –

“There is laches when a party was negligent or has failed ‘to assert
a right within a reasonable time,’ thus giving rise to the presumption that
he or she has abandoned it. Laches has set in when it is already
inequitable or unfair to allow the party to assert the right. The elements
of laches were enumerated in Ignacio v. Basilio:

There is laches when: (1) the conduct of the defendant

or one under whom he claims, gave rise to the situation
complained of; (2) there was delay in asserting a right after
knowledge of the defendant's conduct and after an
opportunity to sue; (3) defendant had no knowledge or notice
that the complainant would assert his right; (4) there is injury
or prejudice to the defendant in the event relief is accorded
to the complainant. (Citation omitted)

‘Laches is different from prescription.’ Prescription deals with

delay itself and thus is an issue of how much time has passed. The time
period when prescription is deemed to have set in is fixed by law.
Laches, on the other hand, concerns itself with the effect of delay and
not the period of time that has lapsed. It asks the question whether the
delay has changed ‘the condition of the property or the relation of the
parties’ such that it is no longer equitable to insist on the original right.
In Nielson & Co., Inc. v. Lepanto Consolidated Mining Co.:

Appellee is correct in its contention that the defense of

laches applies independently of prescription. Laches is
different from the statute of limitations. Prescription is
concerned with the fact of delay. Whereas laches is
concerned with the effect of delay. Prescription is a matter of
time; laches is principally a question of inequity of permitting
a claim to be enforced, this inequity being founded on some
change in the condition of the property or the relation of the
parties. Prescription is statutory; laches is not. Laches
applies in equity, whereas prescription applies at law.
Prescription is based on fixed time, laches is not.

The defense of laches is based on equity. It is not based on the

title of the party invoking it, but on the right holder's ‘long inaction or
inexcusable neglect’ to assert his claim.”23 [Citations omitted.]

41. If indeed plaintiff Teresita J. Lozada has a right as she claims to have
in this instant case, the allegations in the Complaint, by itself, however, verily show
that she was negligent to assert her right within a reasonable time from the time
knew of defendant KUS’s conduct that gave rise to the situation complained of.

42. The Deeds of Absolute Sale where plaintiff Teresita J. Lozada’s

signature was allegedly forged were respectively annotated in the TCT No. 167082

23
See Note 22.

18
and 167083 in the name of Pepito C. Lozada as early as 23 December 2009. On
said date, Pepito C. Lozada and plaintiff Teresita J. Lozada had constructive
knowledge already of such sale. However, it took them until 08 November 2019 to
question the validity thereof, or 44 days short of 10 years before asserting their
alleged right by instituting this present suit, notwithstanding the opportunity to do
so.

43. Following plaintiff Teresita J. Lozada’s allegations in her Complaint,24

she obtained actual knowledge of the alleged fraudulent transfer of title of the
subject properties to defendant KUS and the latter’s mortgaging of the same to
defendant RCBC as early as the year 2011. Still, the lapse of more than 8 years is
no longer within the parameter of reasonable time for her to have asserted her
alleged right.

44. In fact, it can be readily reasoned that the filing of this case is a mere
afterthought on the part of plaintiff Teresita J. Lozada after defendant TRC filed an
unlawful detainer case against her son, Agapito Mariano J. Lozada, Jr., a.k.a.
Mario Lozada, and actual illegal occupants of the subject property on 17 May 2019.
A cursory reading of the bottom portion of the documents marked Annexes “B”, “B-
1”, “C”, “C-1”, “D” and “D-1” and attached to her Complaint reveals that the same
were printed at the Registry of Deeds of Parañaque City and requested by
CUEVAS CESAR JR., who is a paralegal of LIBANAN LAW OFFICE, the counsel
of herein defendant TRC. These same documents are among the documents
utilized by defendant TRC as annexes to its Complaint in the said unlawful detainer
case still pending before the Metropolitan Trial Court, Branch 87, Parañaque City,
docketed as Civil Case No. 2019-35. But even then, more than 5 months still
lapsed from 17 May 2019 before plaintiff Teresita J. Lozada actually filed her
present Complaint on 08 November 2019.

45. Given the totally of the prevailing circumstances this case, defendant
TRC will suffer grave injury and prejudice should plaintiff Teresita J. Lozada be
accorded the reliefs prayed for in her Complaint. It is shown in TCT Nos. 010-
2017002962 and 010-2017002962 that defendant TRC executed a Real Estate
Mortgage (REM) on 14 February 2018 in favor of Philippine Business Bank in the
amount of PhP 20.0 million and the same is still valid and subsisting.

46. In sum, the failure and omission of plaintiff Teresita J. Lozada, and even
of Pepito C. Lozada, to assert their claimed right for an unreasonable length to
time, by not being vigilant and for sleeping on their right necessarily leads to a
conclusion that that they have either abandoned it or has demurred to assert their
right over the subject properties.

47. Thus, this instant Complaint should likewise be dismissed on the ground
that the alleged claim of plaintiff Teresita J. Lozada has already been waived or
abandoned.

PRAYER

24
Complaint, pars. 10 and 16.

19
 WHEREFORE, defendant Tambo Realty Corporation (TRC) respectfully
prays that the Complaint dated 05 November 2019 be DISMISSED.

TRC likewise prays for such other relief and remedies just and equitable
under the foregoing circumstances.

Taguig City for Parañaque City, Metro Manila, 04 February 2020.

LIBANAN LAW OFFICE

Counsel for Defendant Tambo Realty Corporation (TRC)
Unit 6-A, 6th Floor, Icon Plaza
26th Street, Bonifacio Global City
Taguig City, Metro Manila
Tel. Nos. +632 8817 5727 / +632 8817 5677

By:

NORMAN G. TANSINGCO
Roll of Attorneys No. 37471
IBP Lifetime No. 00865, January 8, 1997, O.R. No. 427169
PTR No. A-4765856, January 10, 2020, Taguig City
MCLE Compliance No. VI-001107, November 7, 2016
Mobile No. +63 918 920 6321
Email: attytan5@[Link]

REQUEST FOR HEARING

THE BRANCH CLERK OF COURT

Regional Trial Court
National Capital Judicial Region
Branch 257, Parañaque City

GREETINGS:

Please submit this MOTION TO DISMISS to the Honorable Court for its
consideration and approval on 14 February 2020 at 08:30 o’clock in the morning
or as soon thereafter as counsel and matter can be heard.

NORMAN G. TANSINGCO

20
 NOTICE OF HEARING

ATTY. STEVE M. SANTILLAN

Counsel for Plaintiff
Unit 3, Ofelia Building, #95 National Road,
Putatan, Muntinlupa City

ATTY. BON VINCENT A. AGUSTIN

Ramos Agustin Padilla Go-Alabado and Jimenez Law Offices
Counsel for Defendant RCBC
21st Floor, Yuchengco Tower 2, RCBC Plaza
6819 Ayala Avenue, Makati City

KUS FORMWORKS GROUP INC.

5th Floor, AD Center Square
405-406 Evangelista Street corner A. Rodriguez Avenue,
Santolan, Pasig City

REGISTRY OF DEEDS OF PARAÑAQUE CITY

Room 108, Ground Floor, Parañaque City Hall Complex
Dr. Santos Avenue, Parañaque City

GREETINGS:

Please take notice that this MOTION TO DISMISS will be submitted to the
Honorable Court for its consideration and approval on 14 February 2020 at 08:30
o’clock in the morning or as soon thereafter as counsel and matter can be heard.

NORMAN G. TANSINGCO

Copy furnished by registered mail:

ATTY. STEVE M. SANTILLAN

Unit 3, Ofelia Building, #95 National Road,
Putatan, Muntinlupa City

ATTY. BON VINCENT A. AGUSTIN

Ramos Agustin Padilla Go-Alabado and Jimenez Law Offices
21st Floor, Yuchengco Tower 2, RCBC Plaza
6819 Ayala Avenue, Makati City

KUS FORMWORKS GROUP INC.

5th Floor, 405-406 AD Center Square
Evangelista Street corner A. Rodriguez Avenue,
Santolan, Pasig City

REGISTRY OF DEEDS OF PARAÑAQUE CITY

Room 108, Ground Floor, Parañaque City Hall Complex
Dr. Santos Avenue, Parañaque City

21
 EXPLANATION
FOR SERVICE BY REGISTERED MAIL

In compliance with the 1997 Rules on Civil Procedure, Rule 13, Section 11,
the foregoing MOTION TO DISMISS was served on plaintiff’s counsel and other
defendants through registered mail due to lack of office messengerial personnel
and time and distance constraints which render personal service not practicable.

NORMAN G. TANSINGCO

22