Republic of the Philippines

REGIONAL TRIAL COURT

7th Judicial Region
BRANCH 94
Barili, Cebu

IMELDA B. SANTOS, MILAGROS B. GRENGIA-

BALOLONG, MA. LOURDES B. CABATINGAN,
ESTRELLITA B. AGAN, ANSELMO G. BABIERA,
JR., ARISTEDES V. BABIERA, ROGELIO V.
BABIERA, EDILMA V. GIERRAN, JULIETO V.
BABIERA, EDITHA CAROLINA CANTILA
And RONY ANGEL R. BURGOS,
Plaintiffs, CIVIL CASE NO. CEB- BAR- 937

For: Declaration of Nullity of

Free Patent Certificates of
Titles, Contracts, Tax
Declarations, Reconveyance,
Partition and Damages,
Attorney’s fees and costs
--versus--

EVELYN L. BURGOS- RABUYA,

MARIA CRISTE L. BURGOS-
CABALLERO, CITI M.C.
CORPORATION, REGISTRY OF
DEEDS FOR THE PROVINCE OF
CEBU, and OFFICE OF THE
MUNICIPAL ASSESSOR OF THE
MUNICIPALITY OF MOABOAL,
CEBU,
Defendants.

x-----------------------------------------------/

ANSWER WITH COUNTERCLAIM

AND CROSS- CLAIM

Defendant CITI M.C. CORPORATION (“CITI M.C.

CORPORATION”), by counsel, respectfully states:

1
 I.
PREFATORY

Plaintiffs’ case against Defendant CITI M.C. CORPORATION is

squarely contravened by the fundamental rule that a buyer of registered
land under the Torrens system may rely in good faith on the face of a
Transfer Certificate of Title (“TCT”).

The Supreme Court has explained:

“As a corollary, ‘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. When a certificate of title
is clean and free from any encumbrance, potential
purchasers have every right to rely on such
certificate. Individuals who rely on a clean certificate of title
in making the decision to purchase the real property are
often referred to as ‘innocent purchasers for value’ and ‘in
good faith.’ ‘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.’”1

In this instance, not only did Defendant CITI M.C. CORPORATION

buy the registered lot with TCT that indicated no other claimant and
purchased this from the only registered owners appearing on the TCT,
but Defendant CITI M.C. CORPORATION also conducted due diligence
and visited the subject property, and at that time, there was no sign that
another person asserted rights over the subject property.

It was only after Defendant CITI M.C. CORPORATION paid millions

and acquired the registered lot that Plaintiffs suddenly appeared to
contest ownership over the subject property. After making this clearly
belated claim, the Plaintiffs now try to wrest the registered lot from
Defendant CITI M.C. CORPORATION . This is the kind of situation that
the Torrens system is supposed to guard against. This is the kind of

1 Spouses Stilianopoulos v. Register of Deeds for Legazpi City, G.R. No. 224678, 3 July 2018.

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scenario that the Torrens system is meant to prevent. And Plaintiffs’
action is the kind that the Torrens system does not countenance.

Defendant CITI M.C. CORPORATION is a purchaser in good faith

and for value, who holds an indefeasible title to the subject lot under the
Torrens system. It is thus respectfully prayed that the Complaint against
Defendant CITI M.C. CORPORATION be dismissed with prejudice.

II
COUNTER-STATEMENT OF FACTS

1. In late 2018, Defendant CITI M.C. CORPORATION ’s business

group planned to expand its commercial operations in Cebu and to find a
place that may be developed as a resort.

2. Thus, when Defendant CITI M.C. CORPORATION was

approached by defendants Evelyn Burgos- Rabuya and Maria Criste
Burgos- Caballero, defendant CITI M.C. CORPORATION entertained the
offer.

3. Defendant CITI M.C. CORPORATION noted that the subject

lot was covered with transfer certificate of title No. CITI M.C.
CORPORATION .2 And it is in the name of Evelyn Lebita Borgos- Rabuya,
married to Buen D. Rabuya and Maria Criste Lebita- Burgos Caballero, the
same persons who offered the property for sale to Defendant CITI M.C.
CORPORATION

4. Defendant CITI M.C. CORPORATION secured certified true

copies of these TCT from the Registry of Deeds of Cebu Province. Upon
inspection of the TCT, it found no encumbrances, liens, or adverse claim,
annotated on the TCT at the time other than the annotation that the lot is
subject to the usufructuary rights of Romualda Babiera.

5. Defendants Evelyn Burgos- Rabuya and Maria Criste Burgos-

Caballero then presented to Defendant CITI M.C. CORPORATION the
Death Certificate of Romualda Babiera, affirming to Defendant CITI M.C.
CORPORATION that the usufructuary rights mentioned in the title had
been rendered functus oficio.3

6. Defendant CITI M.C. CORPORATION through its authorized

representatives, Flordeliza S. Villegas and Atty. Jose Marie Gochangco,
visited the Subject Lot at least five (5) times on different dates and times.
This was precisely because Defendant CITI M.C. CORPORATION wanted
to be sure there was no issue with the Subject Lot before deciding on

2 Annex O of the Complaint is a faithful reproduction thereof.

3 Copy hereto attached as Annex 1- Citi and made part hereof.

3
whether to purchase the same.

7. During those visits on various dates and occasions, the

representatives of Defendant CITI M.C. CORPORATION , observed the
following:

7.1. There was no occupant on the subject lot but there are
occupants on the adjoining properties.

7.2. No one approached or told them that there are existing

disputes or potential disputes on the Subject Lot.

7.3. There were no signs, notices, or any indications of

adverse claims posted on the Subject Lot.

8. Defendant CITI M.C. CORPORATION was also showed

ancient documents4 showing that the adjoining owners recognized the
ownership of the lot by the sellers’ predecessor-in-interest, Romualda
Babiera. Defendant CITI M.C. CORPORATION was shown the following:

8.1. Affidavit of Adjoining Owners dated 26 June 19725

acknowledging the ownership of Romualda Babiera;

8.2. Handwritten notes affirming the grant of right of way

in favor of Romualda Babiera6.

9. Defendant CITI M.C. CORPORATION even required the co-

defendants sellers to secure the right of way and to fence the property
before proceeding with the sale to make sure that its ownership will not
be disturbed or questioned.

10. Indeed, fencing of the property and paving of the right of way
went on smoothly without any person coming to question the acts of the
defendants sellers. Hence, Defendant CITI M.C. CORPORATION
eventually concluded negotiations and reached an agreement with the
registered owners for the purchase of the Subject Lot7, and TCT No. 102-
20200002828 was eventually issued in its favor.

11. It was only on 10 February 2020,9 or approximately two (2)

months after the fact of sale of the Subject Lot to Defendant CITI M.C.

4 Ancient document is a document that is more than 30 years. (cf., Tamares v. Heirs of De Guia, Sr.,
G.R. No. 233118, [August 4, 2021])
5 Attached as Annex 2- Citi and made part hereof.
6 Attached as Annex 3- Citi and made part hereof.
7 Copy of the Deed of Sale is hereto attached as Annex 4- Citi and made part hereof.
8 Copy of the title is hereto attached as Annex 5- Citi and made part hereof.
9 Per rubber stamp appearing on the face of the Complaint.

4
CORPORATION that herein plaintiffs lodged this Complaint.

12. Defendant CITI M.C. CORPORATION suffered damages due

to the acts of the Plaintiffs. The title that was purchased clean and free
from any encumbrance is now being made subject of this baseless claim.
Plaintiffs’ counsel has even been engaging in unethical act of maligning
the name and reputation of counsel for Defendant CITI M.C.
CORPORATION all in their desperate bid to milk out an undeserved
settlement money from Defendant CITI M.C. CORPORATION . However,
the only settlement acceptable to Defendant CITI M.C. CORPORATION is
for Plaintiffs to drop this baseless claim at no cost to herein Defendant
CITI M.C. CORPORATION .

13. To protect its rights as the lawful owner of the Subject Lot,
Defendant CITI M.C. CORPORATION respectfully files this Answer with
Counterclaim to the Complaint dated 03 February 2020.

III.
ADMISSIONS AND SPECIFIC DENIALS

14. Defendant CITI M.C. CORPORATION specifically denies

paragraph 1 and its subparagraph of the Complaint for lack of knowledge
or information sufficient to form a belief as to the truth thereof.

15. Defendant CITI M.C. CORPORATION admits paragraphs 2 to

5 of the Complaint.

16. Defendant CITI M.C. CORPORATION specifically denies

paragraph 6 of the Complaint, the truth of the matter being that the
alleged heirship of the plaintiffs have not been established by a prior
court judgment, and for lack of knowledge or information sufficient to
form a belief as to the truth thereof.

17. Defendant CITI M.C. CORPORATION specifically denies

paragraphs 6 to 9 (and their subparagraphs) of the Complaint, for lack of
knowledge or information sufficient to form a belief as to the truth
thereof.

18. Defendant CITI M.C. CORPORATION partially admits

paragraph 10 of the Complaint insofar as it states that a perimeter fence
was constructed on the property, but specifically denies the rest of the
allegations for lack of knowledge or information sufficient to form a belief
as to the truth thereof.

19. Defendant CITI M.C. CORPORATION partially admits

paragraphs 11 and 12 (and their subparagraphs) of the Complaint insofar

5
as these state the tax declarations and the public documents involving the
subject property.

20. Defendant CITI M.C. CORPORATION specifically denies

paragraphs 13 to 14 of the Complaint (and their subparagraphs) for lack
of knowledge or information sufficient to form a belief as to the truth
thereof.

21. Defendant CITI M.C. CORPORATION partially admits

paragraph 15 and its subparagraph insofar as it alleges of the existence
of the Deed of Donation over the subject properties but specifically denies
the rest of the allegations for lack of knowledge sufficient to form a belief
as to the truth or falsity of the matters alleged therein.

22. Defendant CITI M.C. CORPORATION specifically denies

paragraphs 16 to 23 (including its headings, subparagraphs) of the
Complaint for lack of knowledge or information sufficient to form a belief
as to the truth thereof and for the reasons stated in the Special and
Affirmative Defenses.

23. Defendant CITI M.C. CORPORATION partially admits

paragraphs 24 to 25 of the Complaint insofar they state the existence of
the Deed of Absolute Sale and title in favor of answering defendant CITI
M.C. CORPORATION but specifically denies the rest for lack of knowledge
or information sufficient to form a belief as to the truth thereof and the
reasons stated in the Special and Affirmative Defenses.

24. Defendant CITI M.C. CORPORATION specifically denies

paragraphs 26 to 36 of the Complaint for lack of knowledge or
information sufficient to form a belief as to the truth thereof and for the
reasons stated in the Special and Affirmative Defenses.

25. Defendant CITI M.C. CORPORATION specifically denies

paragraph 37 of the Complaint for lack of knowledge or information
sufficient to form a belief as to the truth thereof and for the reasons stated
in the Counter-Statement of Facts, and the Special and Affirmative
Defenses. Further, this cause of action is a misjoined cause of action as
Partition is a special proceedings governed by a different rule of
procedure, in violation of Rule 2, Section 5 of the Rules of Civil Procedure:

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:

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 (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 are 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 are

principally for recovery of money, the aggregate
amount claimed shall be the test of jurisdiction.

26. Defendant CITI M.C. CORPORATION specifically denies

paragraphs 39 to 40 of the Complaint, the truth being as set forth in the
Counter-Statement of Facts and the Special and Affirmative Defenses.

IV.
SPECIAL AND AFFIRMATIVE DEFENSES

A. Plaintiffs have not been a priori

determined to be heirs, and the present
action for reconveyance is an
inappropriate recourse or remedy.

27. In Calica Vda. de Lee v. Calica-Eclipse, G.R. No. 220533, January

30, 2017, the Supreme Court ruled that where plaintiffs claim to be heirs
of the alleged owner, reconveyance is a wrong remedy under the law.

In cases involving an alleged heir seeking reconveyance of property

of deceased predecessors, the Supreme Court has consistently ruled that
the proper remedy is the settlement of estate of the deceased where
the alleged heir can first be judicially declared heir and the property
declared as forming part of the estate before he or she will have the right
to seek relief to recover the property.

28. In Calica, supra., the Supreme Court emphatically ruled, thus:

7
“Reconveyance is not the proper remedy.

Petitioner insists that there is no dispute on her

status as an heir of their deceased relatives.
Respondents themselves admitted in their
Answer that petitioner is the daughter of
the Calica Spouses and the sister of Lilia. As the
only other heir aside from respondent Estela,
petitioner claims that she is entitled to her one-
half share of the property. Petitioner reiterates
that her aim is not for the partition or
settlement of the estate but only the restoration
of her right as a co-owner. She asks for
reconveyance of the title of the property to her.

Petitioner's ground for the recovery of property

is her undisputed status as an heir. However,
there is no record showing that petitioner has
been declared as a legal heir and that the
property forms part of the estate of their
deceased relatives. Mere allegations, even if
admitted, cannot substitute a judicial
declaration of heirship. Petitioner has to
substantiate her claims in a proper
action. TCAScE

In Reyes, et al. v. Enriquez, et al.:

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.". . .

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
8
 cancel. Thus, there is a need to establish their
status as such heirs in the proper
forum. (Citations omitted)

29. Plaintiffs’ resort is, thus, to file a petition for settlement of

estate. After a judicial declaration of their status as heirs and of the
property as part of the estate of their deceased relative Tirso, plaintiffs
can then file a complaint for reconveyance of title. (Calica Vda. de Lee v.
Calica-Eclipse, G.R. No. 220533 (Notice), [January 30, 2017]) [Citations
Omitted; Emphasis Added].

B. Plaintiffs’ right to file the instant

complaint has already prescribed.

30. In fact, even if a prior determination of heirship was done, still,

no complaint for recovery of ownership may be filed by Plaintiffs. This is
because their right to file any action involving this property has long
prescribed.

31. In paragraph 11 (a) of the Complaint, plaintiffs admit that they

have been deprived of their alleged right over the subject property in
1972 or forty-eight (48) years prior to the filing of the instant complaint
in 11 March 2020. In par. 11 (a), plaintiffs alleged that as early as in the
year 1972, tax declaration was already in the name of Romualda Babiera,
defendants’ predecessor-in-interest. Plaintiffs even attached the tax
declarations as proof thereof, Annexes B-1, et seq.

32. When Tirso passed away in 1978, they did not nothing to assert
any of their imagined rights. From 1978 until the filing of this case in
February 10, 2020, forty- two years had passed, more than the 30 year
period set by law, the lapse of which EXTINGUISHES any right the
claimants may profess to have over the property in question.

33. The lapse of close to half a century has closed the doors for
plaintiffs to contest the ownership of defendant Citi MC by virtue of
extinctive prescription. Art. 1106 of the Civil Code provides that by
prescription, one acquires ownership and other real rights through the
lapse of time, in the manner and under the conditions laid down by law.
In the same way, rights and actions are lost by prescription.

34. There are, thus, two kinds of prescription: (1) the acquisition
of a right by the lapse of time, or acquisitive prescription; and (2) the
loss of a right of action by the lapse of time, or extinctive prescription.

Other names for acquisitive prescription are adverse possession

and usucapcion. The other kind is extinctive prescription whereby rights
9
and actions are lost by the lapse of time. (Arts. 1106, par. 2 and 1139.)
Another name for extinctive prescription is limitation of action.

35. The differences between acquisitive and extinctive

prescriptions are well-stated in Quimpo et al. vs Onayan, et al., GR No.
222597, February 19, 2018 as follows:
"Prescription was a statute of limitations. Whereas
usucaption expressly 'vests the property' and
raised a new title in the occupant, prescription did
nothing more than bar the right of action. The
concept most fundamental to a system of title by
possession is that the relationship between the
occupant and he land in terms of possession is
capable of producing legal consequences. In other
words, it is the possessor who is the actor. Under a
statute of limitations, however, one does not
look to the act of the possessor but to the neglect
of the owner. In the former the important feature
is the claimant in possession, and in the latter it is
the owner out of possession which controls."
(underscoring supplied)

36. Here, what is involved is extinctive prescription, and the

subject matter being real or immovable property, the relevant provision
of the Civil Code is Art. 1141 which reads:"Art. 1141. Real actions over
immovables prescribe after thirty years. When plaintiffs allowed
forty-two years to pass without filing any action, they have slept on their
rights and have lost any legal basis to pursue the same.

C. Defendant CITI M.C. CORPORATION is a

purchaser in good faith and for value.

37. A purchaser in good faith and for value is one who buys
property of another, without notice that some other person has a right to,
or interest in, such property, and pays a full and fair price for the same, at
the time of such purchase, or before he has notice of the claim or interest
of some other person in the property.10

38. As a general rule, every person dealing with registered land, as

in this case, may safely rely on the correctness of the certificate of title
and the law will not, in any way, oblige him or her to go behind the
certificate to determine the condition of the property. Simply put, when
a certificate of title is clean and free from any encumbrance, a potential
buyer has every right to rely on the correctness of the certificate in

10Philippine Charity Sweepstakes Office v. New Dagupan Metro Gas Corp., G.R. No. 173171, 11
July 2012.

10
making his or her purchase of real property. In such cases, the buyer is
often referred to as an innocent purchaser in good faith and for value.11

39. In the 2021 case of Aguirre v. Bombaes,12 the Supreme Court

ruled that the Petitioner therein is an innocent purchaser in good faith
and for value:

“A careful review of the records reveals that: first, title

to the subject lot had already been transferred to
Catalan’s name under TCT No. T-58922 a couple of
months prior to the sale of the property to petitioner;
and second, at the time of the sale, the certificate of title
did not bear any annotation of a lien or encumbrance on
the subject lot.

As the CA itself pointed out in its Amended Decision,

respondent had caused an adverse claim to be annotated
on the title of the subject lot only on May 12, 2010, or
eight days after the fact of sale of the property to
petitioner as evidenced by the Deed of Absolute Sale
dated May 4, 2010 executed by Catalan (the seller) in the
latter's favor. In addition, the CA, too, observed that
respondent had failed to present any sufficient proof that
petitioner had actual knowledge of her ownership and
possession of the subject lot at the time of the sale.

Given these circumstances, it is quite obvious that

petitioner is indeed a purchaser in good faith and for value in
the absence of any evidence that she had actual knowledge of
any defect on the title, or of another person's right to or
interest in the subject property. Because the certificate of
title to the property was clean and free of any
encumbrance at the time of the sale, petitioner had every
right to rely on the correctness of the title and she was
under no legal obligation to go beyond the certificate and
to conduct any further inquiry as to the condition of the
property.”

40. Applying the foregoing ruling of the Supreme Court, Defendant

CITI M.C. CORPORATION qualifies as an innocent purchaser in good faith
and for value.

40.1. First, the title to Lot No. 7350 was already transferred to and
registered under the name of the sellers, Evelyn Burgos- Rabuya and

11 Aguirre v. Bombaes, G.R. No. 233681, 3 February 2021; Emphasis supplied.

12 Id.; Emphasis supplied.

11
Maria Criste Burgos- Caballero, as shown by TCT No. 102-2013004338.13
This was true prior to the sale to Defendant CITI M.C. CORPORATION on
03 December 2019.14

40.2. Second, at the time of the sale of the subject lot on 03

December 2019, the aforementioned TCT registered under the name of
the sellers did not bear any annotation of a lien or encumbrance on
the subject lot. It bears stressing that Plaintiffs had all the time to
annotate their claim on the titles but they failed to do so until after the
subject property were already purchased by defendant CITI M.C.
CORPORATION .

40.3. As alluded to by the Plaintiffs themselves in their Complaint,

there was no Adverse Claim or Lis Pendens on the title of the Subject Lot
sold to defendant CITI M.C. CORPORATION. Thus, Aguirre v. Bombaes15
applies here and Defendant CITI M.C. CORPORATION is an innocent
purchaser in good faith and for value.

41. Plaintiffs’ cause is further undermined by their failure to

sufficiently aver and prove that Defendant CITI M.C. CORPORATION had
actual knowledge of their claim to the Subject Lot at the time of the sale.

42. Plaintiffs simply made a sweeping allegation in par. 24 of their

Complaint that Defendant CITI M.C. CORPORATION has notice of the
defect in the title of the vendors, without more. On the other hand, as
narrated in the Counter-Statement of Facts, despite multiple visits and
inspection of the Subject Lot, no person approached or informed
Defendant CITI M.C. CORPORATION of the Plaintiffs’ supposed claims
over the subject property. Neither was there any sign suggesting there
were any other claimants.

43. Therefore, at the time of the sale, Defendant CITI M.C.

CORPORATION has no actual knowledge whatsoever of any adverse
claim by the Plaintiffs.

44. Based on the foregoing, since the certificate of title to the

subject lot was clean and free of any encumbrance at the time of the sale,
Defendant CITI M.C. CORPORATION had every right to rely on the
correctness of the titles and it was under no legal obligation to go beyond
the certificate and to conduct any further inquiry as to the condition of
the subject lot.

13 A certified true copy of was attached as Annex O of the Complaint.

14 Par. 23 of the Complaint.
15 Id.; Emphasis supplied.

12
 45. The case of Cruz v. Court of Appeals16 is instructive:
“Where innocent third persons, relying on the
correctness of the certificate of title thus issued, acquire
rights over the property[,] the [C]ourt 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. xxx”

As an innocent purchaser in good faith and for value, Defendant

CITI M.C. CORPORATION holds an indefeasible title to the subject lot
under the Torrens system.

D. Defendant CITI M.C. CORPORATION

performed the required due diligence
expected of a cautious and prudent
buyer.

46. To determine whether a person, natural or juridical, is a buyer

in good faith, the Supreme Court’s pronouncement in Spouses Bautista v.
Silva17 is instructive:

“To prove good faith, a buyer of registered and titled

land need only show that he relied on the face of the title to
the property. He need not prove that he made further inquiry
for he is not obliged to explore beyond the four corners of the
title. Such degree of proof of good faith, however, is sufficient
only when the following conditions concur: first, the seller
is the registered owner of the land; second, the latter is
in possession thereof; and third, at the time of the sale,
the buyer was not aware of any claim or interest of some
other person in the property, or of any defect or
restriction in the title of the seller or in his capacity to
convey title to the property.

Absent one or two of the foregoing conditions, then the

law itself puts the buyer on notice and obliges the latter to
exercise a higher degree of diligence by scrutinizing the
certificate of title and examining all factual circumstances in
order to determine the seller’s title and capacity to transfer
any interest in the property. Under such circumstance, it is

16 G.R. No. 120122, 6 November 1997; Emphasis supplied.

17 Spouses Bautista v. Silva, G.R. No. 157434, 19 September 2006; Emphasis supplied.

13
 no longer sufficient for said buyer to merely show that he
relied on the face of the title; he must now also show that he
exercised reasonable precaution by inquiring beyond the
title. Failure to exercise such degree of precaution makes him
a buyer in bad faith.”

47. Applied to the present case, Defendant CITI M.C.

CORPORATION may rely on the face of the title of the registered subject
lot as the three (3) conditions elucidated in the case of Spouses Bautista
v. Silva are present. First, the sellers are the registered owners of the
subject lot as evidenced by TCT No. 102-2013004338.18 Second, the
sellers are in actual possession of the registered subject lot, and have
been the ones paying the realty taxes thereon19. Third, at the time of the
sale, Defendant CITI M.C. CORPORATION was not aware of any claim or
interest of some other person in the subject lot, or of any defect or
restriction in the title of the registered owners-sellers or in their capacity
to convey title to the property. The TCT to the subject lot was clean and
free of any encumbrances at the time of the sale. Therefore, Defendant
CITI M.C. CORPORATION had every right to rely on the correctness of the
titles.

48. Notwithstanding the foregoing, Defendant CITI M.C.

CORPORATION was a cautious and prudent buyer and exercised
reasonable precautions by performing the following due diligence before
deciding to acquire the subject lot:

48.1. Defendant CITI M.C. CORPORATION ’s authorized

representatives personally inspected the subject lot upon knowing
that it is available for sale.20

48.2. Defendant CITI M.C. CORPORATION ’s authorized

representatives visited the subject lot not less than five (5) times
on different dates and time.21 During those visits, no one
approached or told them that there are existing disputes or
potential disputes on the Subject Lot. There were no signs, notices,
or any indications of adverse claims posted on the Subject Lot.

48.3. Certified true copy of the TCT was obtained and it was
found not to have any encumbrances, liens, or adverse claims at the
time of the sale.

18 See Annex O of the Complaint.

19 Copy of representative tax receipts are hereto attached as Annexes 6, 6-a, et seq. and made
part hereof.
20 Gochangco Judicial Affidavit.
21 Gochangco Judicial Affidavit.

14
 48.4. Sellers presented various tax receipts showing that it is
them who have been paying the realty taxes on the property in
litigation.

48.5. When the property was fenced and the right of way was
paved by the sellers preparatory to the execution of the deed of
sale, nobody approached the defendant or made any claim.

49. It is only after exercising these reasonable precautions that

Defendant CITI M.C. CORPORATION decided to purchase the subject
property. Irrefutably, Defendant CITI M.C. CORPORATION is a purchaser
in good faith and for value holds an indefeasible title to the subject lot.
Therefore, Plaintiffs’ prayer to have Defendant CITI M.C. CORPORATION
’s certificate of title declared null and void is utterly without merit.

E. The Complaint states no cause of action

as the Deed of Donation being assailed
is valid, or, in the alternative, the
Plaintiffs do not have the right to
question the deed of donation or their
right of action to assail the donation has
already prescribed.

E.1. The Deed of Donation is valid.

50. In utter desperation, Plaintiffs now assail the Deed of Donation

by arguing that the same is invalid because allegedly, at the time of
donation, the donees were minors.

51. Plaintiffs are ill-advised of the relevant law on the matter.

52. Even an unborn child can be a recipient of donation.22 Logic

would then dictate that if an unborn child can even receive donations,
how much more for minors, assuming arguendo that defendants Rabuya
and Caballero were indeed minors at the time of donation.

53. The alleged minority of the donees do not, therefore, go into

the validity of the donation itself. If at all, it is but a formal requirement
that does not affect or render invalid the donation itself.

54. In fact, and as a formal requirement, the acceptance of the

donnes may even be dispensed with. As held by the Supreme Court in
Kapunan v. Casilan, G.R. No. L-8178, [October 31, 1960], the rule that a
donation to an incapacitated donee requires its acceptance by his lawful

22 Article 742 of the Civil Code.

15
representative (Art. 626, old Civil Code), applies only in case of onerous
and conditional donations, where the donee may have to assume certain
charges or burdens. In simple and pure donations, a formal acceptance is
not important for the donor acquires no right to be protected and the
donee neither undertakes to do anything nor assumes any obligation.

Mutatis mutandis, this pronouncement applies in this case.

E.2. The Plaintiffs do not have the right to

question the deed of donation.

55. Even assuming for the sake of argument that the Deed of
Donation is defective, Plaintiffs do not have the right to question the
same.

56. A donation can only affect legitime following the provision in

Article 772 of the Civil Code. Necessarily, the same can only questioned
by the heirs of the donors. Hence:

Only those who at the time of the donor's death

have a right to the legitime and their heirs and
successors in interest may ask for the reduction of
inofficious donations . . . .

57. Plaintiffs are not heirs of the donor, Romualda Babiera. Neither
is there any allegation in the Complaint that they are so. Hence, plaintiffs
do not have an iota of standing to question the validity of the donation.

E.3. The Plaintiffs’ right to question the deed

of donation has already prescribed.

58. As alleged in par. 16 of the Complaint, the questioned Deed of

Donation was registered on 24 February 1988.23 Yet, this case was filed
only on 11 March 2020, or at least thirty-two (32) years thereafter.

59. This brings into irrevocable operation the principle of

prescription and laches.

60. As held in Dumanon vs Butuan City Rural Bank, G.R. No. L-27675.
December 15, 1982, an action to annul a deed of donation prescribes
within four (4) years from discovery of fraud if such is alleged, or ten
years if no fraud is alleged. The discovery is to be reckoned from the time
the deed of donation was registered because registration is notice to the
whole world of such fact. Thus:

23 Annex I of the Complaint.

16
 From the allegation of the complaint, it can be
deduced with certitude that appellants had
discovered the fraud, at the latest, when the deed of
donation was registered, because registration is
notice to the whole world of such fact. Appellants, in
effect, had by the allegations of the complaint
admitted knowledge of the fraud in the execution of
the deed of donation upon knowing that there exists
such a deed, for their allegation is that the supposed
donors could not have parted with the land, knowing
them to be illiterate, unable to read and write, and,
therefore, could not have signed the document as they
appear to have done, and they had in fact claimed the
land in the cadastral proceedings where they
obtained a certificate of title in their name. The deed
of donation is like either the deed of extra-judicial
settlement or the deed of sale, which are the
documents involved in the aforecited cases, as a mode
of transferring title to another, Hence, either on the
ground of fraud or for lack of consideration (even
donation is deemed to have also cause or
consideration), the annulment of the donation as is
sought in the present action is barred by prescription,
on the authority of the aforecited cases-within 4 years
from the discovery of the fraud, if such is alleged, 10
years, if no fraud is alleged. (Dumanon vs Butuan City
Rural Bank, G.R. No. L-27675. December 15, 1982)

61. Even if Plaintiffs seeks succour on the principle of

imprescriptibility of actions for subject property held in trust, the same
will not be of aid to Plaintiffs in this case because the act of registering
the property in the name of the defendants constitute as repudiation of
such trust. Said the Supreme Court in Dumanon, supra:

While the rule of imprescriptibility of action to

recover property held in trust may possibly apply to
resulting trust as long as the trustee has not
repudiated the trust (Ramos vs. Ramos, 61 SCRA 284),
the allegation of the complaint itself shows on its face
what may be considered an unequivocal act of
repudiation. It is the act of registration by which the
registrants obtained title in their names thereafter
claiming the property as their own to the exclusion of
all others, with a right to dispose of the property as
they did dispose of it when the defendants Feliza
Azote Vda. de Dumanon, widow of Fermin Dumanon
who became the registered owner of the land when

17
 the deed of donation was registered …” (Dumanon vs
Butuan City Rural Bank, G.R. No. L-27675. December 15,
1982)

E.4. The Plaintiffs’ right to question the

deed of donation has already been
extinguished.

62. Even on the assumption that the plaintiffs have the right to
question the deed of donation, the same has already been rendered nil by
the act of ratification of the donees.

63. Under Article 1392 of the Civil Code, "ratification extinguishes

the action to annul a voidable contract." In addition, Article 1396 of the
same Code provides that "[r]atification cleanses the contract from all its
defects from the moment it was constituted."24

64. Ratification of a voidable contract is defined under Article

1393 of the Civil Code as follows:

Art. 1393. Ratification may be effected expressly

or tacitly. It is understood that there is a
tacit ratification if, with knowledge of the reason which
renders the contract voidable and such reason having
ceased, the person who has a right to invoke it should
execute an act which necessarily implies an intention to
waive his right.

65. Implied ratification may take diverse forms, such as by silence

or acquiescence; by acts showing approval or adoption of the
contract; or by acceptance and retention of benefits flowing therefrom.25

66. Here, the alleged minority of the donees make the donation
voidable:
Art. 1390. . The following contracts are voidable or
annullable, even though there may have been no damage
to the contracting parties:
(1) Those where one of the parties is incapable of giving
consent to a contract;
(2) Those where the consent is vitiated by mistake,
violence, intimidation, undue influence or fraud.

These contracts are binding, unless they are annulled by a

proper action in court. They are susceptible of
ratification. (n) (Underscoring supplied)

24 ECE Realty and Development, Inc. v. Mandap, G.R. No. 196182, [September 1, 2014]
25 Id.

18
 67. In this case, the very persons who can annul the deed of
donation are the alleged minors themselves, the defendants Rabuya and
Caballero. And the very ones who are authorized to annul the same had
already ratified the contract. The very acts of dominion and ownership
exercised and exhibited by defendants Rabuya and Caballero more than
evince ratification.

68. In any event, regardless of whether the deed of donation is valid

or not, such finding will not affect the right of Defendant CITI M.C.
CORPORATION over the subject lot. As an innocent purchaser in good
faith and for value, Defendant CITI M.C. CORPORATION has an
indefeasible title over the subject property. Hence:

Where a case like the present one involves a sale of a

parcel of land under the Torrens system, the person
dealing with the registered property need not go
beyond the certificate of title; he can rely solely on the
title and he is charged with notice only of such
burdens and claims as are annotated on the title.
(Orquiola vs Baclig, G.R. No. 141463. August 6, 2002)

F. The free patent is valid but even

assuming that it is not, the alleged
invalidity of the free patent may not be
raised by plaintiffs.

69. Another proof that the present Complaint is a sham complaint

is the fact that it hinges on the alleged invalidity of the free patent. First,
Plaintiffs are maliciously bent on misleading the Honorable Court when
they alleged that the subject property is a residential land. Plaintiffs
know though that the subject property is classified as agricultural. Hence,
may be proper subject of free patent application.

70. Nevertheless, even assuming ex gratia argumenti that the

application is infirmed, Plaintiffs and Plaintiffs’ counsel know or should
have known that they are not the proper party to question the same.

71. An action for reversion may only be instituted by the Solicitor

General, in the name of the Republic of the Philippines. As held by the
Supreme Court, the State have an even existing authority, thru its duly-
authorized officers, to inquire into the circumstances surrounding the
issuance of any such title, to the end that the Republic, thru the Solicitor
General or any other officer who may be authorized by law, may file the

19
corresponding action for the reversion of the land involved to the public
domain, subject thereafter to disposal to other qualified persons in
accordance with law.26||

72. This Complaint is therefore a stray pleading, and the claim, a

sham and baseless claim.

V.
COUNTERCLAIMS

73. Defendant CITI M.C. CORPORATION replead and incorporate

by reference, where relevant, all of the foregoing as part of its allegations
in support of its counterclaim.

74. For Plaintiffs’ actions, which has derailed Defendant CITI M.C.
CORPORATION from fully using the Subject Lot for its planned business
expansion, which has resulted to lost revenue and profit coupled with the
expenses and cost of money in pursuing this litigation, the Plaintiffs
should be made liable for actual damages in the sum of not less than Ten
Million (P10,000,000.00).

75. For filing this unwarranted and baseless suit, Defendant CITI
M.C. CORPORATION has incurred expenses by way of attorney’s fees and
legal fees to defend itself. As a consequence, Plaintiffs should be made
liable to pay Defendant CITI M.C. CORPORATION for attorney’s fees and
costs of suit in the amount of not less than Five Hundred Thousand Pesos
(P500,000.00).

76. For similar reasons, Plaintiffs should be made liable for

exemplary damages due to the filing this baseless suits in the sum of not
less than Ten Million (P10,000,000,00) Pesos.

VI.
CROSS-CLAIMS and RESERVATIONS

77. Defendant CITI M.C. CORPORATION replead and incorporate

by reference, where relevant, all of the foregoing as part of its allegations
in support of its reservations.

78. Based on the foregoing, it is clear that Defendant CITI M.C.

CORPORATION is a purchaser in good faith and for value, who holds an
indefeasible title to the subject lot under the Torrens system. It is thus
respectfully prayed that the Complaint against Defendant CITI M.C.
CORPORATION be dismissed with prejudice. However, in the remote and

26Sherwill Development Corp. v. Sitio Sto. Niño Residents Association Inc., G.R. No. 158455, [June 28,
2005]

20
unlikely event that the Honorable Court rules that Defendant CITI M.C.
CORPORATION cannot be considered as a purchaser in good faith and
for value, Defendant CITI M.C. CORPORATION hereby expressly reserves
its rights and remedies provided in the deed of sale and other relevant
laws.

VII.
EVIDENCE AND WITNESSES

79. Defendant CITI M.C. CORPORATION respectfully submits

herewith the attached Judicial Affidavit of a witness, Jose Marie V.
Gochangco,27 and the exhibits appended thereto, which forms an integral
part of this Answer with Counterclaim.

80. Jose Marie V. Gochangco’s testimony proves that Defendant

CITI M.C. CORPORATION is an innocent purchaser for value and a buyer
in good faith of the Subject Lot, it was not aware at the time of the
purchase of the Subject Lot of Plaintiffs’ alleged claims, that the Complaint
filed by the Plaintiffs is baseless and without merit, that the Plaintiffs is
not entitled to any relief, that Defendant CITI M.C. CORPORATION is
entitled to its counterclaims, or in the alternative (subject to the ruling of
this Honorable Court) Defendant CITI M.C. CORPORATION is entitled to
its cross-claims.

81. To support Defendant CITI M.C. CORPORATION ’s allegations

and contentions, it intends to present the following documents:

Marking Description
Annex 1 Death Certificate of Romualda Babiera
Annex 2 Affidavit of Adjoining Owners dated 26 June 1972
acknowledging the ownership of Romualda Babiera
Annex 3 Handwritten notes affirming the grant of right of way in
favor of Romualda Babiera
Annex 4 Deed of Absolute Sale in favor of defendant Citi M.C.
Corporation
Annex 5 TCT No. 102-2020000282 in the name of defendant
CITI M.C. CORPORATION
Annex 6 Representative samples of tax receipts
Annex 7 Judicial Affidavit of Jose Marie V. Gochangco

82. Defendant CITI M.C. CORPORATION reserves the right to

supplement its Answer with Counterclaim or file supplemental or
additional judicial affidavits and present, introduce, and/or mark

27 A copy of the Judicial Affidavit of Jose Marie Gochangco is attached hereto as Annex “7” hereof.

21
additional exhibits and evidence in the course of these proceedings, as
may be necessary.

VIII.
PRAYER

WHEREFORE, premises considered, it is respectfully prayed that

judgment be rendered:

1. dismissing the Complaint dated 03 February 2020 against

Defendant CITI M.C. CORPORATION for lack of merit and/or on grounds
stated in the Affirmative Defenses; and

2. awarding the Defendant CITI M.C. CORPORATION with

attorney’s fees and costs of suit in the amount of not less than Five
Hundred Thousand Pesos (P500,000.00), actual damages in the sum of
not less than Ten Million (P10,000,000.00), and exemplary damages in
the sum of not less than Ten Million (P10,000,000,00) Pesos. Other
reliefs just and equitable under the premises are likewise prayed for.

RESPECTFULLY SUBMITTED.
Cebu City, for Barili, Cebu, 18 September 2023.

JOAN S. LARGO
Roll No. 44813
IBP Lifetime Membership No. 524409
PTR No. 1868734-01/02/2020-Cebu
MCLE Compliance No. VI-0005007
Issued 12/18/17 and valid until 04/14/2022
Email: [email protected]

*
Suite 1204, 12th
Floor, Insular Life Building
Mindanao Avenue corner Biliran Road
Cebu Business Park, 6000 Cebu City
Philippines
Tel No. (032) 266-5930
Fax No. (032) 266-5932

Copy furnished by registered mail in view of the various

And/or far locations of the addressees, making personal service
Not practicable, to:

Gica del Socorro Espinoza Villarmia Fernandez & Tan

3rd Floor, GILAIDA Building
218-G Osmeña Blvd / RR Landon Extension

22
Sambag I, Cebu City

The Registry of Deeds- Province of Cebu

DA Compound, Velez Street
Cebu City

Verification and Certification of Non-forum shopping in the next page…

23
REPUBLIC OF THE PHILIPPINES )
CITY OF CEBU ) S.S.

VERIFICATION/CERTIFICATION
OF NON-FORUM SHOPPING

I, JOSE MARIE V. GOCHANGCO, Filipino, of legal age, with given

address at Cebu City, after having been duly sworn to in accordance with
law, hereby depose and state THAT:

I am the duly authorized representative of defendant CITI M.C.

CORPORATION , per Secretary’s Certificate hereto attached. I have
caused the preparation of this Answer with Counterclaim and Crossclaim
and have read and fully understood the contents thereof. The allegations
herein are true and correct based on my own personal knowledge and
based on authentic documents and records in my possession. The case is
not filed to harass, cause unnecessary delay, or needlessly increase the
cost of litigation. The factual allegations herein have evidentiary support
or, if specifically so identified, will likewise have evidentiary support after
a reasonable opportunity for discovery.

I have not commenced any other action or proceeding involving the

same issues in the Supreme Court, the Court of Appeals, or any other
court, tribunal or agency, and to the best of my knowledge, no such action
or proceeding is pending in the Supreme Court, the Court of Appeals, or
any other court, tribunal or agency. Should I hereafter learn that a similar
action or proceeding has been filed or is pending before the Supreme
Court, the Court of Appeals, or any other court, tribunal or agency, I
undertake to report that fact to this Honorable Court within five (5)
calendar days therefrom.

IN WITNESS WHEREOF, I have hereunto set my hand and affix my

signature this 18th day of September 2023 at Cebu City, Philippines.

JOSE MARIE V. GOCHANGCO

SSS ID No. ______________

SUBSCRIBED AND SWORN TO BEFORE ME, this 18th day of

September 2023, affiant personally appeared to me showing his valid
government ID aforementioned as competent evidence of identity,
known to me to be the same person who voluntarily executed the
foregoing instrument.

Doc No. ___

Page No. ___
Book No. ___
Series of 2023.
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