G.R. No. 165838 - Firaza, Sr. vs. Spouses Ugay

The dispute originated from a complaint for Quieting of Title filed by Spouses Claudio and Eufrecena Ugay, who asserted that they are the registered owners of Lot No. 2887-A, as evidenced by Original Certificate of Title (OCT) No. P-16080.
In response, petitioner Nemesio Firaza, Sr. raised an affirmative defense alleging that the respondents acquired their title through fraud and misrepresentation during the processing of their Free Patent Application.
On the basis of this affirmative defense, the petitioner also filed a counterclaim seeking:

The Regional Trial Court (RTC) set the petitioner’s affirmative defense for a preliminary hearing, treating it in a manner similar to a motion to dismiss under Section 6, Rule 16 of the Rules of Court.
While the respondents complied with the order to submit memorandum position papers, the petitioner elected to file a Motion to Dispense with Filing of his memorandum, arguing that his defense could not be sufficiently proven through a mere written pleading.
On October 2, 1998, the RTC denied the petitioner’s motion on the ground that the defense should be fully developed at trial along with the other allegations in the complaint and answer.

During the trial, Land Management Officer Lourdes Tadem was presented as a hostile witness by the respondents.
The petitioner sought to have Tadem’s testimony on the circumstances surrounding the issuance of her recommendation for the respondents’ Free Patent Application admitted as evidence to substantiate his claims of fraud and misrepresentation.
Counsel for the respondents objected, arguing that such questioning would constitute an impermissible collateral attack on the respondents’ land title.

The RTC issued an Order on August 20, 2001, disallowing any issues related to the petitioner’s counterclaim on the basis that it amounted to a direct (or collateral) attack on the validity of the respondents’ title.
After the petitioner’s motion for reconsideration was denied in a subsequent RTC Order dated July 2, 2002, he advanced the matter by filing a special civil action for certiorari with the Court of Appeals (CA).
In its Decision dated January 30, 2004, the CA ruled that the petitioner’s counterclaim constituted a collateral attack on the respondents’ title, thereby upholding the RTC’s decision.
The petitioner’s motion for reconsideration was further denied by the CA Resolution dated September 24, 2004, which led to the present appeal before the Supreme Court.

The central legal issue is whether the petitioner’s counterclaim constitutes a direct attack or a collateral attack on the validity of the respondents’ Torrens title.

Does the counterclaim’s objective of nullifying the title on grounds of fraud and misrepresentation allow it to be characterized as a direct attack, thereby permitting the presentation of evidence on the matter?
Conversely, if deemed a collateral attack, would the petitioner be precluded from introducing evidence to prove his defenses?