Case Summary (G.R. No. 205867)
Background of the Case
The case originated from a complaint filed by Hortizuela for reconveyance and recovery of possession with damages before the 3rd Municipal Circuit Trial Court (MCTC) in Tumauini, Isabela. The complaint alleged that the property was fraudulently titled in Gregoria Tagufa’s name, even though it was originally owned by Hortizuela's parents. The MCTC dismissed the complaint, finding it lacked merit. This decision was later reversed by the Regional Trial Court (RTC), which ruled in favor of Hortizuela.
Court of Appeals Decision
Respondents contested the RTC decision before the Court of Appeals (CA), which found in their favor, asserting that Hortizuela's action constituted a collateral attack on the validity of Gregoria's Torrens title. The CA cited Section 48 of Presidential Decree (P.D.) No. 1529, emphasizing that a certificate of title cannot be subject to collateral attack and must be contested only through a direct action.
Legal Issues Presented
The central issue before the Supreme Court was whether an action for reconveyance and recovery of possession constitutes an indirect or collateral attack on the validity of a Torrens Certificate of Title, as prohibited by law.
Arguments of the Petitioner
Hortizuela contended that her complaint was not aimed at nullifying the title but rather sought the reconveyance of the property, asserting she remained the rightful owner. She argued that Gregoria held the title in trust for her and that the case merely addressed ownership issues without disputing the validity of the title itself.
Arguments of the Respondents
In opposition, the respondents argued that the essence of Hortizuela's complaint effectively sought to nullify Gregoria’s title, thereby constituting a collateral attack. They also brought to light Hortizuela’s alleged failure to seek appropriate remedies under the law, particularly regarding the one-year period mandated for challenging acts of registration of titular deeds.
Ruling of the Supreme Court
The Supreme Court found the petition meritorious, reiterating that while the principle of indefeasibility of Torrens title must be respected, a direct action for reconveyance can still be pursued by a rightful owner whose property has been erroneously registered in another's name. The Court indicated that the action for reconveyance does not seek to question the decree of registration but rather to enforce the rights of the true owner.
Clarification of the Nature of Reconveyance
The Court articulated that reconveyance is a recognized legal remedy available to a party who can prove ownership of property wrongfully held under another’s name, thus distinguishing it from a collateral attack on a Torrens title. The Court further emphasized that if a property is wrongfully or fraudulently registered, the registered owner merely acts as a trustee for the rightful owner, thereby allowing claims for reconvey
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Case Information
- Citation: 754 Phil. 499
- Division: Second Division
- Case Number: G.R. No. 205867
- Date: February 23, 2015
- Deciding Justice: Mendoza, J.
Procedural History
- This case is a petition for review on certiorari under Rule 45 of the Rules of Court.
- The petition challenges the September 13, 2012 Decision and the January 25, 2013 Resolution of the Court of Appeals (CA) in CA-G.R. SP No. 122648.
- The CA's decisions reversed and set aside the July 1, 2011 Decision of the Regional Trial Court (RTC), Branch 22, Cabagan, Isabela, which favored the petitioner.
Facts of the Case
- The property in question is a parcel of land located at District IV, Tumauini, Isabela, covering an area of 539 square meters, originally owned by the parents of petitioner Mariflor Tagufa Hortizuela.
- The property was mortgaged to the Development Bank of the Philippines (DBP), which later foreclosed it and sold it to Atty. Romulo Marquez.
- Marquez then sold the property to Runsted Tagufa, husband of respondent Gregoria Tagufa, using funds sent by Hortizuela, with the agreement that Runsted would reconvey the property upon demand.
- Hortizuela later discovered that the property was titled under Gregoria's name through a free patent application and a Deed of Extrajudicial Settlement, which she alleged was obtained through fraud.
Lower Court Decisions
- The Municipal Circuit Trial Court (MCTC) dismissed Hortizuela's complaint for reconveyance and recovery of possession on August 31, 2010, citing lack of merit and a wrong cause of action.
- The RTC reversed this decision on July 1, 2011, ordering Gregoria