G.R. No. 205867 - Hortizuela vs. Tagufa

The property in question is a parcel of land in District IV, Tumauini, Isabela, covering approximately 539 square meters and evidenced by OCT No. P-84609 from the Registry of Deeds of Isabela.
The land originally belonged to the petitioner's parents, Spouses Epifanio Tagufa and Godofreda Jimenez, and despite being untitled, was mortgaged to the Development Bank of the Philippines (DBP).
Due to failure to redeem the property, DBP foreclosed it and sold the land to Atty. Romulo Marquez, who later transferred it to Runsted Tagufa, husband of defendant Gregoria Tagufa, with funds provided by petitioner's sister Hortizuela and an agreement for eventual reconveyance.

Mariflor Tagufa Hortizuela, represented by Jovier Tagufa, initiated a complaint for reconveyance and recovery of possession with damages against respondents Gregoria Tagufa, Roberto Tagufa, and Rogelio Lumaban.
Hortizuela alleged that the property was fraudulently titled in the name of Gregoria Tagufa via a free patent application before the DENR and a subsequent Deed of Extrajudicial Settlement of the Estate executed on May 9, 2003.
The complaint sought the peaceful surrender and reconveyance of the property, asserting that although the title was issued under the Torrens system, fraud in the titling process rendered it voidable.

The 3rd Municipal Circuit Trial Court (MCTC) initially dismissed the complaint on August 31, 2010, for lack of merit, reasoning that the petitioner had resorted to an improper cause of action.
On appeal, the Regional Trial Court (RTC) of Cabagan, Isabela, reversed the MCTC ruling on July 1, 2011, ordering defendant Gregoria to reconvey the property and awarding damages and attorney’s fees to Hortizuela.
Respondents filed a motion for reconsideration in the RTC, which was denied.
The Court of Appeals (CA), in a subsequent decision, reversed the RTC order by holding that Hortizuela’s action for reconveyance and recovery of possession was tantamount to a collateral attack on the validity of the Torrens title, in contravention of Section 48 of P.D. No. 1529.

Hortizuela maintained that the reconveyance action did not seek to nullify the Torrens title but merely to have the property transferred to her as the rightful owner due to fraud committed during the titling process.
It was emphasized that Runsted Tagufa’s role was that of an attorney-in-fact and that the title, though issued in the name of Gregoria, was held in trust for Hortizuela.
Hortizuela also argued that failing to avail the remedy under Section 38 of Act 496 was not pertinent to her claim, and she sought only the remedy of reconveyance.

The respondents contended that the complaint was essentially a collateral attack on an already registered Torrens title, which under Section 48 of P.D. No. 1529 is impermissible.
They further argued that Hortizuela’s failure to file for a direct remedy within the prescribed period (one year from issuance of the free patent) undermined her claim.
Additionally, it was claimed that Hortizuela was ineligible to own the property based on citizenship requirements under B.P. Blg. 223, as she was an American citizen residing in Las Vegas, Nevada.

Whether an action for reconveyance and recovery of possession constitutes an indirect or collateral attack on the validity of the subject certificate of title, which is proscribed by law under Section 48 of P.D. No. 1529.
Whether the petitioner’s claim for reconveyance, despite allegations of fraud in the titling process, falls within the ambit of a proper remedy that respects the decree of registration as incontrovertible.