Hortizuela vs Tagufa

MARIFLOR T. HORTIZUELA, represented by JOVIER TAGAUFA TAGUFA, ROBERTO TAGUFA and ROGELIO LUMABAN

vs.

GREGORIA

G.R. No. !"#$%, Febr&ary ', !(", J. Mendo)a

Fa*ts+

The property involved in this case is a parcel of land titled under the name of defendant Gregoria. Before it was titled in the name of Gregoria, said property was originally owned by plaintiff Hortizuela’s parents. Although untitled, Hortizuela’s parents mortgaged the property with B!. "or failure to redeem the property, B! foreclosed the same and sold it to Atty. #omulo $ar%uez who in turn sold it bac& to #unsted Tagufa, husband of Gregoria and brother of Hortizuela, using the fund sent by Hortizuela who was in America, with the agreement that #unsted will reconvey the said property to Hortizuela when demanded. Thereafter, Hortizuela discovered that the said unregistered property was later on titled in the name of Gregoria by virtue of a free patent application before the '(#. )onse%uently, Hortizuela filed a complaint for #econveyance and #ecovery of !ossession against herein defendants with the $)T). The $)T) dismissed the complaint on the ground that an action for reconveyance was not the proper remedy. *n appeal, the #T) reversed the decision of the $)T). The reversal being unacceptable to them, respondents filed a petition for review before the )A. #uling in favor of respondents the )A held that although Hortizuela filed with the $)T) a complaint for reconveyance and recovery of possession of the sub+ect lot, she was also %uestioning the validity of the Torrens title. t cited the well-settled rule that a Torrens title could not be collaterally attac&ed that the issue of whether or not the title was fraudulently issued, could only be raised in an action e/pressly instituted for that purpose and that an action for reconveyance and recovery of possession was not the direct action contemplated by law. Hence, this petition.

Iss&e+

0hether or not an action for reconveyance and recovery of possession constitutes an indirect or collateral attac& on the validity of the sub+ect certificate of title.

R&-n+

(o it does not. The )ourt finds the petition meritorious. The )ourt is not unmindful of the principle of indefeasibility of a Torrens title and 1ection 23 of !.. (o. 4563 where it is provided that a certificate of title shall not be sub+ect to collateral attac&. A Torrens title cannot be altered, modified or cancelled e/cept in a direct proceeding in accordance with law. 0hen the )ourt says direct attac&, it means that the ob+ect of an action is to annul or set aside such +udgment, or en+oin its

enforcement. *n the other hand, the attac& is indirect or collateral when, in an action to obtain a different relief, an attac& on the +udgment or proceeding is nevertheless made as an incident thereof. )ontrary to the pronouncements of the $)T) and the )A, however, the complaint of Hortizuela was not a collateral attac& on the title warranting dismissal. As a matter of fact, an action for reconveyance is a recognized remedy, an action in personam, available to a person whose property has been wrongfully registered under the Torrens system in another’s name. n an action for reconveyance, the decree is not sought to be set aside.  It does not seek to set aside the decree but, respecting it as incontrovertible and no longer open to review, seeks to transfer or reconvey the land from the registered  owner to the rightful owner.  #econveyance is always available as long as the property has not passed to an innocent third person for value. There is no %uibble that a certificate of title, li&e in the case at bench, can only be %uestioned through a direct proceeding. The $)T) and the )A, however, failed to ta&e into account that in a complaint for reconveyance, the decree of registration is respected as incontrovertible and is not being %uestioned. 0hat is being sought is the transfer of the property wrongfully or erroneously registered in another7s name to its rightful owner or to the one with a better right. f the registration of the land is fraudulent, the person in whose name the land is registered holds it as a mere trustee, and the real owner is entitled to file an action for reconveyance of the property. The fact that Gregoria was able to secure a title in her name does not operate to vest ownership upon her of the sub+ect land. 8#egistration of a piece of land under the Torrens 1ystem does not create or vest title, because it is not a mode of ac%uiring ownership. A certificate of title is merely an evidence of ownership or title over the particular property described therein. t cannot be used to protect a usurper from the true owner nor can it be used as a shield for the commission of fraud neither does it permit one to enrich himself at the e/pense of others. ts issuance in favor of a particular person does not foreclose the possibility that the real property may be coowned with persons not named in the certificate, or that it may be held in trust for another person by the registered owner.9  Also, the )ourt is not unaware of the rule that a fraudulently ac%uired free patent may only be assailed by the government in an action for reversion pursuant to 1ection 4:4 of  the !ublic ;and Act. The foregoing rule is, however, not without e/ception. A recognized e/ception is that situation where plaintiff-claimant see&s direct reconveyance from defendant of public land unlawfully and in breach of trust titled by him, on the principle of enforcement of a constructive trust. n Roco, et al. v. Gimeda,  the )ourt stated that if a patent had already been issued through fraud or mista&e and has been registered, the remedy of a party who has been in+ured by the fraudulent registration is an action for reconveyance, thus<  t is to be noted that the petition does not see& for a reconsideration of the granting of the patent or of the decree issued in the registration proceeding. The purpose is not to annul the title but to have it conveyed to plaintiffs. "raudulent statements were made in the application for the patent and no notice thereof was given to plaintiffs, nor &nowledge of the petition &nown to the actual possessors and occupants of the

property. The action is one based on fraud and under the law, it can be instituted within four years from the discovery of the fraud. =Art. 442>, )ivil )ode, as based on 1ection ?, paragraph 2? of Act (o. 4@:. t is to be noted that as the patent here has already been issued, the land has the character of registered property in accordance with the provisions of 1ection 466 of Act (o. 2@>, as amended by Act (o. 6??6, and the remedy of the party who has been in+ured by the fraudulent registration is an action for reconveyance. n this case, in filing the complaint for reconveyance and recovery of possession, Hortizuela was not see&ing a reconsideration of the granting of the patent or the decree issued in the registration proceedings. 0hat she was see&ing was the reconveyance of the sub+ect property on account of the fraud committed by respondent Gregoria. An action for reconveyance is a legal and e%uitable remedy granted to the rightful landowner, whose land was wrongfully or erroneously registered in the name of another, to compel the registered owner to transfer or reconvey the land to him. Thus, the #T) did not err in upholding the right of Hortizuela to as& for the reconveyance of the sub+ect property. To hold otherwise would be to ma&e the Torrens system a shield for the commission of fraud.