JUAN CRUZ, JR., PLAINTIFF AND APPELLANT, VS. CRISANTO DIAZ, DEFENDANT AND APPELLEE.

Appeal from an order of the Court of First Instance of Davao granting
defendant’s motion to dismiss the complaint upon the ground that it fails to
state sufficient facts to constitute a cause of action and, accordingly,
dismissing said complaint, with costs.

Plaintiff Juan Cruz Jr., alleges therein that, by virtue of a public
instrument executed on December 28, 1953, defendant Crisanto Diaz had
transferred to him whatever rights and interests he (Diaz) had over a parcel of
land forming part of Lot 1080 of the Davao Cadastre No. 102, situated in the
barrio of Panacan, Davao City, and covered by Homestead Applicatien No. 165589,
E-15448, for a consideration actually received by said defendant; that,
thereafter, plaintiff filed the corresponding homestead application with the
office of the Bureau of Lands in Davao, took possession of the aforesaid land
and cultivated the same, as well as introduced improvements thereon, at a cost
of, at least, P10,000.00; that on April 3, 1954, defendant caused to be issued,
in his favor, Original Certificate of Title No. P-412, thru misrepresentation or
fraudulent representation made to the Register of Deeds, to the effect that he
(Diaz) had not made any transfer or transaction in connection with said land and
was still its owner; that plaintiff demanded from defendant the surrender of
said Original Certificate of Title No. P-412, but defendant refused to do so;
that plaintiff asked the Director of Lands to revoke Homestead Patent No.
V-25943 issued to the defendant, but said officer had taken, as yet, no action
thereon; and that by reason of defendant’s aforementioned acts, plaintiff had
suffered damages in the sum of P1,000, aside from attorney’s fees amounting to
P1,500, and the costs. Plaintiff prayed, therefore, that judgment be rendered
annulling or cancelling the aforementioned homestead patent and original
certificate of title and that defendant be sentenced to pay him said sum of
P1,000 as damages and P1,500 as attorney’s fees, as well as for “such further
and equitable remedy as may be deemed proper in the premises”.

In his answer defendant denied some of the allegations of the complaint,
specially those imputing fraud to him, and alleged that the transfer of
homestead rights invoked by plaintiff is null and void, it being in
contravention of section 118 of the Public Land Act; and that the true agreement
between them was one of antichresis for the payment of a loan made by plaintiff
to the defendant in August 1953 amounting to P16,000, which together with the
interest it drew, had been fully satisfied with the products harvested by
plaintiff from the land in question. Moreover, defendant set up a counterclaim
for attorney’s fees and expenses of litigation.

Subsequently, the Director of Lands was allowed to file a complaint in
intervention alleging that, on March 8, 1954, he had caused Homestead Patent No.
V-25943 to be issued for said land, which was covered by defendant’s homestead
application; that, upon registration of said homestead patent, the Register of
Deeds of Davao issued Original Certificate of Title No. P-412 in defendant’s
name; that the intervenor had subsequently learned that defendant had, on
December 28, 1953, executed a deed of transfer of his rights, thereby showing
that he had “already lost all rights and interests in the land, at the time of
the issuance of the patent and * * * title therefor” that despite said transfer,
defendant had received said patent and title, taking advantage of the fact that
intervenor was unaware of the transfer aforementioned; and that the same “is
contrary to section 118 of the Public Land Act, which renders the patent and the
corresponding certificate of title * * * null and void”. The Director of Lands
prayed, therefore, that judgment be rendered declaring said homestead patent
null and void, ordering the cancellation of the aforementioned certificate of
title, and granting such other relief as may be just and proper.

Still later, defendant filed a motion to dismiss the complaint, upon the
ground that “plaintiff has no legal capacity to sue”; that “the action is
already barred”; and that “the complaint does not allege a valid and sufficient
cause of action”. Passing upon this motion, the lower court held that the first
two grounds thereof should be deemed waived by the defendant, under Rule 9,
section 10, of the Rules of Court. It, however, granted the motion upon the
third ground: (a) because the effect of the relief sought by plaintiff would be
a reversion of the land in question to the public domain, which only the Bureau
of Lands may seek; (b) because the review of a Torrens title may be sought by
the aggrieved party within one (1) year from the issuance of the decree of
registration, and, in the case certificates of title issued upon the authority
of a homestead patent, from the issuance of said certificate of title, which, in
the case at bar, took place on March 8, 1954, whereas plaintiff’s complaint
herein was filed on March 28, 1955, or more than a year later; and (c) because
plaintiff claims to have derived his rights and interest in and to said land
from the defendant, so that if the rights and interest of the latter were
nullified, then the former would have no right or interest to invoke and protect
in this case.

It should be noted, however, that plaintiff’s complaint contains two (2)
causes of action: (a) the first refers to the alleged transaction between the
parties, the fraudulent means allegedly resorted to by the defendant to secure a
homestead patent and a certificate of title, and his refusal to surrender the
latter to the plaintiff, who, therefore, prays for the annulment or cancellation
of said patent and title; and (b) the second refers to the damages allegedly
sustained by plaintiff on account of defendant’s acts, and for which plaintiff
seeks a money judgment against the defendant. The reasons advanced in the order
appealed from had nothing to do with the second cause of action and could not
possibly justify the dismissal of the complaint insofar as the same is
concerned.

Besides in addition to urging cancellation of the homestead patent and
certificate of title in defendant’s name, plaintiff prayed for “such further and
equitable remedy as may be deemed proper in the premises”. If all the rights and
interests of the defendant in and to the land in question were transferred by
him to the plaintiff, then the latter would be entitled—if such transfer were
valid, and nothing to the contrary appears in the complaint, the allegations of
which are hypothetically admitted by defendant’s motion to dismiss—to compel the
former to execute a deed of conveyance and assignment of the land covered by
said certificate of title in his (plaintiff’s) favor. Hence, the allegations of
the complaint, under the first cause of action therein set forth, were
sufficient to constitute a cause of action and to justify the grant of a relief
under the general prayer contained in said complaint (Tolentino vs.
Baltazar, supra, p. 421).

Even, however, with respect to the annulment or cancellation of defendant’s
homestead patent and certificate of title, the order appealed from appears to be
too technical, under the circumstances obtaining at the time of its issuance,
and to serve no practical purpose. Indeed, in view of the intervention of the
Director of Lands, who prayed for said annulment and cancellation, the question
whether plaintiff was entitled thereto became academic, insofar as the defendant
is concerned, for, at any rate, the lower court would have to pass upon the
merits of said complaint in intervention and decide, after due hearing, whether
said homestead patent and certificate of title should be annulled and/or
cancelled.

Wherefore, the order appealed from is reversed, and the records of this case
are hereby remanded to the lower court for further proceedings not inconsistent
with this decision, with the costs of this instance against defendant Crisanto
Diaz.

IT IS SO ORDERED.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador,
Reyes, J.B.L., Paredes, Dizon, De Leon, and Natividad, JJ.,
concur.