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FIRST DIVISION

G. R. No. 156888             November 20, 2006

PEDRO R. SANTIAGO, Petitioner,
vs.
SUBIC BAY METROPOLITAN AUTHORITY, Respondent.

D E C I S I O N

CHICO-NAZARIO, J.:

The Case

For Review under Rule 45 of the Rules of Court, as amended, is the 3 December 2002¹ and 7 January 2003² Orders of the Regional Trial Court (RTC) of Olongapo City, Zambales, Branch 74, in Civil Case No. 126-0-2002 entitled Victoria M. Rodriguez, Pedro R. Santiago and Armando G. Mateo versus Subic Bay Metropolitan Authority. In the assailed Orders, the RTC denied the application for the issuance of writ of preliminary injunction and dismissed the complaint for lack of cause of action.

The Facts

This case stemmed from a Complaint³ for Recovery of Possession of Property, filed by Victoria M. Rodriguez, Armando G. Mateo and herein petitioner Pedro R. Santiago against respondent Subic Bay Metropolitan Authority (SBMA) on 12 March 2002, before the RTC of Olongapo City, Zambales, Branch 74. Included in said complaint was a prayer for the issuance of a Writ of Preliminary Injunction and/or Temporary Restraining Order.

In their Complaint filed before the RTC, Victoria M. Rodriguez, Armando G. Mateo and petitioner Pedro R. Santiago, alleged that:

Plaintiff (Victoria M. Rodriguez) is the sole heir and administrator of the estate of Hermogenes Rodriguez by virtue of the Order, dated February, 1994 in Spec. Proc. No. IR-1110, "In the Matter of the Settlement of the Estate of Hermogenes Rodriguez y Reyes, etc.", (sic) of Branch 34 of the Regional Trial Court at Iriga City x x x.

x x x x

In his lifetime, the late Hermogenes Rodriguez y Reyes was the owner of parcels of land registered in his name under that (sic) certificate of title denominated as a Titulo de Propriedad de Terrenos of 1891 Royal Decree No. 01-4-Protocol x x x.

x x x x

On January 31, 2002, plaintiff Victoria M. Rodriguez, in her capacity as heir and administrator of the estate of Hermogenes Rodriguez, leased to Pedro R. Santiago and Armando G. Mateo, for a period of 50 years, two parcels of land of Hermogenes Rodriguez covered by his aforesaid title, x x x.

x x x x

By virtue of the aforesaid lease contract, plaintiff Pedro R. Santiago is presently occupying the aforesaid parcel of land consisting of 2.5 hectares, more particularly the improvements located at 717 Sta. Rita Road.

Despite the fact that defendant is not the owner of the two aforesaid parcels of land leased to plaintiffs Santiago and Mateo, defendant is claiming possessory, if not proprietary, rights over them. More particularly, defendant is using these two parcels of land for its (sic) own commercial and other purposes.

It is now the desire of plaintiff Victoria Rodriguez to recover possession of the property from the defendant so that she could comply with her contractual commitments to her co-plaintiffs.

x x x x

[D]efendant is claiming possessory, if not proprietary, rights over the parcels of land described in paragraph 7 hereof. Lately, plaintiff Pedro R. Santiago was informed by purported agents or employees of the defendant that he should vacate the premises he and his family are occupying since defendant would be needing the same for its own use. Defendant has no authority to do this since it is not the owner of the premises, and the owner, Victoria Rodriguez (sic) has already leased the premises to plaintiffs Santiago and Mateo.⁴

Respondent SBMA, in its counter statement of facts,⁵ contends that sometime in 1998, Liwanag Santiago, wife of herein petitioner Pedro R. Santiago, by virtue of her employment with respondent SBMA, availed herself of the housing privilege accorded to the latter’s employees; that due to said privilege, she was allowed to lease a housing unit⁶ inside the Subic Bay Freeport Zone; that the lease agreement, however, "shall be terminated if the lessees are no longer employed with SBMA;"⁷ that on 31 January 2002, Liwanag Santiago’s employment contract concluded; that since said contract was not renewed, Liwanag Santiago ceased to be an employee of respondent SBMA; and that as a consequence thereof, as mandated by the SBMA Housing Policy, she and her family were asked⁸ to vacate and return possession of the subject housing unit.

On 13 March 2002, the RTC issued a Temporary Restraining Order[9] against respondent SBMA from ousting petitioner Santiago and his family from the premises of the subject housing unit within seventy two (72) hours from receipt. Further, it was likewise restrained and enjoined from committing any other acts that would prevent the latter and his family from occupying the premises they have allegedly leased from Victoria Rodriguez.

Thereafter, the RTC conducted hearings on the application for the issuance of a Writ of Preliminary Injunction.

On 5 April 2002, instead of filing an Answer, respondent SBMA filed a Motion to Dismiss¹⁰ the abovementioned complaint on the argument, inter alia,¹¹ that the latter failed to state a valid cause of action.

On 3 December 2002, the RTC issued its first assailed order. In denying and dismissing the application for the issuance of a Writ of Preliminary Injunction and complaint respectively, the RTC stated that since the alleged right of complainant Rodriguez stemmed from a Spanish Title, specifically the Titulo de Propriedad de Terrenos of 1891, it cannot be considered a right in esse. The RTC took judicial notice of Presidential Decree No. 892,¹² which required all holders of Spanish titles or grants to apply for registration of their lands under Republic Act No. 496, otherwise known as the Land Registration Act,¹³ within six months from effectivity of the decree, or until 16 August 1976. After such time, Spanish titles or grants could no longer be used as evidence of land ownership in any registration proceedings under the Torrens System. Significant parts of the assailed Order of the RTC read:

Plaintiffs’ complaint is anchored on a Spanish title which they claim is still a valid, subsisting and enforceable title. Despite the fact that said title was never registered under Act 496, the land Registration Act (later PD 1529), plaintiffs still claim that they have a cause of action.

The court is not convinced.

The action filed by plaintiffs is for recovery of possession based on the ownership by plaintiff Rodriguez of the disputed property evidenced by a Spanish title. Clearly, by the sheer force of law particularly the enabling clauses of PD 892, said type of title can no longer be utilized as evidence of ownership. Verily, Spanish titles can no longer be countenanced as indubitable evidence of land ownership. (Citation omitted.)

As such and on its face, the complaint indeed failed to state a cause of action simply because the court can take judicial notice of the applicability of PD 892 and of the pertinent decisions of the Supreme Court to the case at bench.¹⁴

Therein plaintiffs filed a Motion for Reconsideration which was denied in the second assailed Order dated 7 January 2003.

The Issues

Hence, petitioner Santiago’s immediate resort to this Court by way of a petition for review on certiorari under Rule 45 of the Rules of Court, as amended, raising the following issues:¹⁵

I.

WHETHER OR NOT SPANISH TITLES ARE STILL ADMISSIBLE AS EVIDENCE OF OWNERSHIP OF LANDS;

II.

WHETHER OR NOT THE DISMISSAL OF THE COMPLAINT WAS PROPER IN VIEW OF THE FACT THAT PLAINTIFFS COULD STILL PROVE THEIR CLAIMS ON THE BASIS OF EVIDENCE OTHER THAN THE SPANISH TITLE; and

III.

WHETHER OR NOT DEFENDANT, BY FILING A MOTION TO DISMISS INSTEAD OF AN ANSWER, WAS DEEMED TO HAVE ADMITTED HYPOTHETICALLY PLAINTIFFS’ ALLEGATIONS OF OWNERSHIP.

In essence, the present petition poses as fundamental issue for resolution by the Court the question of whether or not the RTC committed reversible error in denying the application for the issuance of a Writ of Preliminary Injunction as well as dismissing the complaint for failure to state a cause of action.

The Court’s Ruling

As the appeal of respondent Santiago involves only questions of law, the Court took cognizance of the instant petition.¹⁶

Petitioner Santiago maintains that "x x x P.D. No. 892 merely disallowed the use of Spanish titles as evidence of land ownership in any registration proceedings under the Torrens system. In other words, Spanish titles can still be used as evidence of land ownership in any other proceedings except registration under the Torrens system. Since the instant case is not one for registration under the Torrens system, but x x x who should be entitled to the possession thereof, then the presentation as evidence of land ownership of the Spanish title in question is permissible." As to the non-presentation of the Titulo de Propriedad de Terrenos, petitioner Santiago had this to say:

As the trial court stated, "(F)undamental is the rule that a defendant moving to dismiss a complaint for lack of cause of action is regarded as having admitted all the allegations thereof, at least hypothetically". (sic) The Complaint specifically alleged that plaintiff Victoria Rodriguez was the great-great-great granddaughter of and the sole heir and administrator of the late spouses Hermogenes Rodriguez and Erlinda Flores and that in his lifetime Hermogenes Rodriguez was the owner of parcels of land registered in his name under that certificate of title denominated as a Titulo de Propriedad de Terrenos of 1891 Royal Decree No. 01-4-Protocol. Defendant was, therefore, deemed to have admitted these allegations. And, with such admissions, then there would be no more need, at least at this stage of the case, for the plaintiffs to present the Spanish title. In other words, the inadmissibility of the title, as argued by the defendant, becomes immaterial since there is no more need to present this title in view of the admissions."

Citing the case of Intestate Estate of the Late Don Mariano San Pedro y Esteban v. Court of Appeals, et al.,[17]respondent SBMA, however, stresses that "Spanish titles can no longer be countenance as indubitable evidence of land ownership by sheer force of law, particularly, the enabling clause of P.D. 892 in expressly providing that, if not accompanied by actual possession of the land, said type of title x x x can no longer be utilized as proof or evidence of ownership x x x."

A priori, before the Court goes into the resolution of the fundamental issue raised by the instant petition, a critical matter must be dealt with – the fact that the assailed orders of dismissal of the complaint and denial of the motion for reconsideration, respectively, of the RTC had already become final and executory against Victoria M. Rodriguez due to her failure to appeal the case. It must be remembered that petitioner Santiago is merely the alleged lessee of part of the claimed parcel of land. In the scheme of things, so to speak, his right to recover possession is anchored on the alleged ownership of Victoria M. Rodriguez, which right to the claimed parcel of land is not in esse. As such, petitioner Santiago is equally bound by the final and executory order of the RTC dismissing the complaint for lack of cause of action.

Nevertheless, even if we were to overlook the foregoing grievous error, we would be hard pressed to find fault in the assailed orders of the RTC. The present petition is substantially infirm as this Court had already expressed in the case of Nemencio C. Evangelista, et al. v. Carmelino M. Santiago,¹⁸ that the Spanish title of Don Hermogenes Rodriguez, the Titulo de Propriedad de Torrenos of 1891, has been divested of any evidentiary value to establish ownership over real property.

Victoria M. Rodriguez, Armando G. Mateo and petitioner Pedro R. Santiago anchor their right to recover possession of the subject real property on claim of ownership by Victoria M. Rodriguez being the sole heir of the named grantee, Hermogenes Rodriguez, in the Spanish title Titulo de Propriedad de Torrenos. Promulgated on 29 April 2005, in the aforementioned Evangelista Case, we categorically stated that:

P.D. No. 892 became effective on 16 February 1976. The successors of Don Hermogenes Rodriguez had only until 14 August 1976 to apply for a Torrens title in their name covering the Subject Property. In the absence of an allegation in petitioners’ Complaint that petitioners’ predecessors-in-interest complied with P.D. No. 892, then it could be assumed that they failed to do so. Since they failed to comply with P.D. No. 892, then the successors of Don Hermogenes Rodriguez were already enjoined from presenting the Spanish title as proof of their ownership of the Subject Property in registration proceedings.

Registration proceedings under the Torrens system do not create or vest title, but only confirm and record title already created and vested. (Citation omitted.) By virtue of P.D. No. 892, the courts, in registration proceedings under the Torrens system, are precluded from accepting, confirming and recording a Spanish title. Reason therefore dictates that courts, likewise, are prevented from accepting and indirectly confirming such Spanish title in some other form of action brought before them (i.e., removal of cloud on or quieting of title), only short of ordering its recording or registration. To rule otherwise would open the doors to the circumvention of P.D. No. 892, and give rise to the existence of land titles, recognized and affirmed by the courts, but would never be recorded under the Torrens system of registration. This would definitely undermine the Torrens system and cause confusion and instability in property ownership that P.D. No. 892 intended to eliminate.

Petitioners argued that the Spanish title may still be presented as proof of ownership on the basis of the exception provided in the fourth whereas clause of P.D. No. 892, which reads:

WHEREAS, Spanish titles to lands which have not yet been brought under the operation of the Torrens system, being subject to prescription, are now ineffective to prove ownership unless accompanied by proof of actual possession; . . .

Since Petitioners alleged that they were in actual possession of the Subject Property, then they could still present the Spanish title as evidence of their ownership of the Subject Property. (Citation omitted.)

This Court cannot sustain petitioners’ argument. Actual proof of possession only becomes necessary because, as the same whereas clause points out, Spanish titles are subject to prescription. A holder of a Spanish title may still lose his ownership of the real property to the occupant who actually possesses the same for the required prescriptive period. (Citation omitted.) Because of this inherent weakness of a Spanish title, the applicant for registration of his Spanish title under the Torrens system must also submit proof that he is in actual possession of the real property, so as to discount the possibility that someone else has acquired a better title to the same property by virtue of prescription.

Moreover, legislative intent must be ascertained from a consideration of the statute as a whole, and not just a particular provision alone. A word or phrase taken in the abstract may easily convey a meaning quite different from the one actually intended and evident when the word or phrase is considered with those with which it is associated. An apparently general provision may have a limited application if read together with other provisions of the statute. (Citation omitted.)

The fourth whereas clause of P.D. No. 892 should be interpreted and harmonized with the other provisions of the whole statute. (Citation omitted.) Note that the tenor of the whole presidential decree is to discontinue the use of Spanish titles and to strip them of any probative value as evidence of ownership. It had clearly set a deadline for the filing of applications for registration of all Spanish titles under the Torrens system (i.e., six months from its effectivity or on 14 August 1976), after which, the Spanish titles may no longer be presented to prove ownership.

All holders of Spanish titles should have filed applications for registration of their title on or before 14 August 1976. In a land registration proceeding, the applicant should present to the court his Spanish title plus proof of actual possession of the real property. However, if such land registration proceeding was filed and initiated after 14 August 1976, the applicant could no longer present his Spanish title to the court to evidence his ownership of the real property, regardless of whether the real property was in his actual possession.

Therefore, the fact that petitioners were in actual possession of the Subject Property when they filed the Complaint with the trial court on 29 April 1996 does not exclude them from the application of P.D. No. 892, and their Spanish title remain inadmissible as evidence of their ownership of the Subject Property, whether in a land registration proceeding or in an action to remove a cloud on or to quiet title.

The preceding discussion does not bar holders of Spanish titles from claiming ownership of the real property on some other basis, such as those provided in either the Land Registration Decree (Citation omitted.) or the Public Land Act.⁴² Petitioners though failed to allege any other basis for their titles in their Complaint aside from possession of the Subject Property from time immemorial, which this Court has already controverted; and the Spanish title, which is already ineffective to prove ownership over the Subject Property.

Therefore, without legal or equitable title to the Subject Property, the petitioners lacked the personality to file an action for removal of a cloud on, or quieting of, title and their Complaint was properly dismissed for failing to state a cause of action. In view of the dismissal of the case on this ground, it is already unnecessary for this Court to address the issue of prescription of the action.¹⁹

Prescinding from the foregoing, the instant petition must be denied by virtue of the principle of stare decisis. Not only are the legal rights and relations of herein parties substantially the same as those passed upon in the aforementioned 2005 Evangelista Case, but the facts, the applicable laws, the issues, and the testimonial and documentary evidence are identical such that a ruling in one case, under the principle of stare decisis, is a bar to any attempt to relitigate the same issue.

The principle of stare decisis et non quieta movere (to adhere to precedents and not to unsettle things which are established) is well entrenched in Article 8 of the Civil Code, to wit:

ART. 8. Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system of the Philippines.

With the above provision of law and preceding discussions, in tandem with the Court’s pronouncements in numerous cases, i.e., Director of Forestry v. Muñoz;²⁰ Antonio v. Barroga;²¹ Republic v. Court of Appeals.;²² National Power Corporation v. Court of Appeals;²³ Carabot v. Court of Appeals;²⁴ Republic v. Intermediate Appellate Court;²⁵ Widows and Orphans Association, Inc. v. Court of Appeals;²⁶ Director of Lands v. Heirs of Isabel Tesalona;²⁷ and Intestate Estate of Don Mariano San Pedro y Esteban v. Court of Appeals,²⁸ it is quite evident that the RTC committed no reversible error in taking heed of our final, and executory, decisions – those decisions considered to have attained the status of judicial precedents in so far as the use of Spanish titles to evidence ownership are concerned. For it is the better practice that when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases where the facts are substantially the same.²⁹1âwphi1

The doctrine of stare decisis embodies the legal maxim that a principle or rule of law which has been established by the decision of a court of controlling jurisdiction will be followed in other cases involving a similar situation. It is founded on the necessity for securing certainty and stability in the law and does not require identity of or privity of parties.³⁰ This is unmistakable from the wordings of Article 8 of the Civil Code. It is even said that such decisions "assume the same authority as the statute itself and, until authoritatively abandoned, necessarily become, to the extent that they are applicable, the criteria which must control the actuations not only of those called upon to decide thereby but also of those in duty bound to enforce obedience thereto."³¹ Abandonment thereof must be based only on strong and compelling reasons, otherwise, the becoming virtue of predictability which is expected from this Court would be immeasurably affected and the public’s confidence in the stability of the solemn pronouncements diminished.³²

It has long been settled that by virtue of Presidential Decree No. 892 which took effect on 16 February 1976, the system of registration under the Spanish Mortgage Law was abolished and all holders of Spanish titles or grants should cause their lands covered thereby to be registered under the Land Registration Act (Act No. 496) within six months from the date of effectivity of the said Decree or until 16 August 1976.³³ If not, non-compliance therewith will result in a reclassification of the real property.

In the case at bar, we have no alternative but to uphold the ruling that Spanish titles can no longer be countenanced as indubitable evidence of land ownership.³⁴ And, without legal or equitable title to the subject property, Victoria M. Rodriguez, Armando G. Mateo and petitioner Pedro R. Santiago lacked the personality to claim entitlement to possession of the same. Title to real property refers to that upon which ownership is based. It is the evidence of the right of the owner or the extent of his interest, by which means he can maintain control and, as a rule, assert right to exclusive possession and enjoyment of the property.³⁵

Therefore, the RTC correctly dismissed the complaint for lack of cause of action.

Anent the argument of petitioner Santiago that by filing the Motion to Dismiss, respondent SBMA already admitted all the allegations of the complaint such that the question of whether or not the subject Spanish Title was inadmissible or not had become immaterial.

We do not agree.

Basic is the rule that in a motion to dismiss complaint based on lack of cause of action, the question posed to the court for determination is the sufficiency of the allegation of facts made in the complaint to constitute a cause of action. It is beside the point whether or not the allegations in the complaint are true, for with said motion, the movant only hypothetically admits the truth of the facts alleged in the complaint, that is, assuming arguendo that the facts alleged are true, the facts alleged are insufficient for the court to render a valid judgment upon the same in accordance with the prayer of the complaint.

Consequently, by anchoring their right to recover possession of property on the subject Spanish title that has been divested of any legal force and effect in establishing ownership over the subject real property, the complaint filed by Victoria M. Rodriguez, Armando G. Mateo and petitioner Pedro R. Santiago was correctly dismissed by the RTC for lack of cause of action.

In fine, there is nothing more left to be argued as regards the Spanish title of Don Hermogenes Rodriguez. The issue has been settled and this Court’s final decision in the said cases must be respected.³⁶ This Court’s hands are now tied by the finality of the abovementioned decisions. The Court has no alternative but to deny the instant petition.

WHEREFORE, premises considered, the instant petition is hereby DENIED. The assailed 3 December 2002³⁷ and 7 January 2003³⁸ Orders of the Regional Trial Court (RTC) of Olongapo City, Zambales, Branch 74, in Civil Case No. 126-0-2002, are hereby AFFIRMED. Cost against the petitioner.

SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice

WE CONCUR:

ARTEMIO V. PANGANIBAN
Chief Justice
Chairman

CONSUELO YNARES-SANTIAGO Associate Justice

MA. ALICIA AUSTRIA-MARTINEZ Associate Justice

ROMEO J. CALLEJO, SR.
Associate Justice

C E R T I F I C A T I O N

Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairman’s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

ARTEMIO V. PANGANIBAN
Chief Justice

Footnotes

¹ Penned by Hon. Ramon S. Caguioa, Presiding Judge; Annex "E" of the Petition; rollo, pp. 68-71.

² Annex "G" of the Petition; id. at 79.

³ Annex "A" of the Petition; id. at 27-34.

⁴ Id. at 28-30.

⁵ Respondent SBMA’s Memorandum; rollo, pp. 171-184.

⁶ No. 717 Sta. Rita Road, Subic Bay Freeport Zone.

⁷ 18 January 1999 Memorandum re: Policies on Leases of SBMA Housing Units by SBMA Officials; Annex "A" of respondent SBMA’s Comment; rollo, pp. 101-103.

⁸ 5 March 2002 Notice to Vacate; Annex "B" of respondent SBMA’s Comment; id. at 104.

⁹ Records, p. 29.

¹⁰ Id. at 112 – 121.

¹¹ The other grounds are lack of jurisdiction and state immunity from suit.

¹² Presidential Decree No. 892 took effect on 16 February 1976.

¹³ Now Presidential Decree No. 1529, entitled the Land Registration Decree, as amended.

¹⁴ Rollo, pp. 70-71.

¹⁵ Petitioner’s Memorandum, pp. 10 – 11; id. at 159 – 160.

¹⁶ Section 2 (b) of Rule 41 respecting appeals from the Regional Trial Courts states that:

SEC. 2. Modes of appeal. –

x x x x

(c) Appeal by certiorari. – In all cases where only questions of law are raised or involved, the appeal shall be to the Supreme Court by petition for review on certiorari in accordance with Rule 45.

¹⁷ 333 Phil. 597 (1996).

¹⁸ G.R. No. 157447, 29 April 2005, 457 SCRA 744.

¹⁹ Id. at 768-774.

²⁰ 132 Phil. 37 (1968).

²¹ 131 Phil. 879 (1968).

²² G.R. no. L-56077, 28 February 1985, 135 SCRA 156.

²³ 228 Phil. 304 (1986).

²⁴ 229 Phil. 374 (1986).

²⁵ G.R. No. 73085, 4 June 1990, 186 SCRA 88.

²⁶ G.R. No. 91797, 7 August 1992, 212 SCRA 360.

²⁷ G.R. No. 66130, 8 September 1994, 236 SCRA 336.

²⁸ G.R. Nos. 103727 & 106496, 18 December 1996, 265 SCRA 733.

²⁹ Tala Realty Services Corp. v. Banco Filipino Savings and Mortgage Bank, 389 Phil. 455, 461-462.

³⁰ A.C. Freeman, A treatise on the Law of Judgment by Edward W. Tuttle, Vol. II [1925 ed.], G. 630, 1329.

³¹ Caltex (Phil.) Inc. v. Palomar, 124 Phil. 763 (1966).

³² Pepsi-Cola Products Phils., Inc. and PEPSICO, Inc. v. Pagdanganan, G.R. No. 167866, 16 October 2006.

³³ Supra note 20 at 166.

³⁴ Supra note 23 at 93.

³⁵ Narciso Peña, et al., Registration of Land Titles and Deeds 3 (1994 ed.).

³⁶ Supra. note 30.

³⁷ See note 1.

³⁸ See note 2.

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