Torrens title secured by fraud is void; a counterclaim is a direct attack- G.R. No. 163551

G.R. No. 163551

Excerpts:

"The main issue is whether or not the Court of Appeals erred in sustaining the validity of OCT No. P-658 and confirming respondent as owner of the property in dispute.

Petitioner contends that the Court of Appeals erred in disregarding the fact that the Torrens title was issued to respondent by virtue of a free patent covering a residential lot that is private land as it has been acquired by petitioner through open, public, continuous and lawful possession of the land in the concept of owner. Petitioner thus prayed for the cancellation of respondent’s title and the reconveyance of the subject property. Hence, the Court of Appeals erred in declaring that the subject lot belongs to respondent.

The contention is without merit.

The Torrens title is conclusive evidence with respect to the ownership of the land described therein, and other matters which can be litigated and decided in land registration proceedings.[26] Tax declarations and tax receipts cannot prevail over a certificate of title which is an incontrovertible proof of ownership.[27] An original certificate of title issued by the Register of Deeds under an administrative proceeding is as indefeasible as a certificate of title issued under judicial proceedings.[28] However, the Court has ruled that indefeasibility of title does not attach to titles secured by fraud and misrepresentation.[29]

In this case, petitioner alleged in his Answer to respondent’s Complaint in the trial court that respondent’s title, OCT No. P-658, was secured in violation of the law and through fraud, deception and misrepresentation, because the subject parcel of land is a residential lot, which cannot be subject of a free patent, since only agricultural lands are subject of a free patent.

The trial court found that “[t]he lot under litigation as clearly described in the complaint is a residential lot and a free patent title thereto cannot validly be issued.” This finding was one of the bases for the trial court’s declaration that the issuance of OCT was tainted with fraud and irregularities and is, therefore, spurious; thus, OCT No. P-658 is null and void.

It should be pointed out that the allegation in the Complaint that the land is residential was made only by respondent, but the true classification of the disputed land as residential was not shown to have been made by the President, upon recommendation by the Secretary of Environment and Natural Resources, pursuant to Section 9 of Commonwealth Act No. 141, otherwise known as The Public Land Act.[30] Hence, the trial court erred in concluding that there was fraud in the issuance of respondent’s free patent title on the ground that it covered residential land based only on the Complaint which stated that the property was residential land when it was not shown that it was the President who classified the disputed property as residential, and OCT No. P-658 itself stated that the free patent title covered agricultural land. It has been stated that at present, not only agricultural lands, but also residential lands, have been made available by recent legislation for acquisition by free patent by any natural born Filipino citizen.[31] Nevertheless, the fact is that in this case, the free patent title was granted over agricultural land as stated in OCT No. P-658.

Moreover, petitioner contends in his petition that the Certification[32] dated July 24, 1987 issued by Datu Samra I. Andam, A/Adm. Assistant II, Natural Resources District No. XII-3, Bureau of Lands, Marawi City, certifying that the data contained in OCT No. P-658 in respondent’s name had no records in the said office, showed that respondent’s Torrens title was spurious.

The Court holds that the certification, by itself, is insufficient to prove the alleged fraud. Fraud and misrepresentation, as grounds for cancellation of patent and annulment of title, should never be presumed, but must be proved by clear and convincing evidence, mere preponderance of evidence not being adequate.[33] Fraud is a question of fact which must be proved.[34] The signatory of the certification, Datu Samra Andam, A/Adm. Assistant II, Natural Resources District No. XII-3, Marawi City, was not presented in court to testify on the due issuance of the certification, and to testify on the details of his certification, particularly the reason why the said office had no records of the data contained in OCT No. P-658 or to testify on the fact of fraud, if any.

Thus, the Court holds that the evidence on record is insufficient to prove that fraud was committed in the issuance of respondent’s Torrens title. Hence, respondent’s Torrens title is a valid evidence of his ownership of the land in dispute.

On the other hand, petitioner claims ownership of the subject lot, which is merely a portion of a larger property (1,800 square meters) that he allegedly inherited from his father in 1952, by virtue of open, public and continuous possession of the land in the concept of owner making it petitioner’s private property. Hence, petitioner prays for reconveyance of the said property.

Article 434 of the Civil Code governs an action for reconveyance, thus:

Art. 434. In an action to recover, the property must be identified, and the plaintiff must rely on the strength of his title and not on the weakness of the defendant’s claim.

Under Article 434 of the Civil Code, to successfully maintain an action to recover the ownership of a real property, the person who claims a better right to it must prove two (2) things: first, the identity of the land claimed; and second, his title thereto.[35]

In regard to the first requisite, in an accion reinvindicatoria, the person who claims that he has a better right to the property must first fix the identity of the land he is claiming by describing the location, area and boundaries thereof.[36]

In this case, petitioner claims that the property in dispute is part of his larger property. However, petitioner failed to identify his larger property by providing evidence of the metes and bounds thereof, so that the same may be compared with the technical description contained in the title of respondent, which would have shown whether the disputed property really formed part of petitioner’s larger property. The appellate court correctly held in its Resolution dated May 13, 2004 that petitioner’s claim is solely supported by testimonial evidence, which did not conclusively show the metes and bounds of petitioner’s larger property in relation to the metes and bounds of the disputed property; thus, there is no sufficient evidence on record to support petitioner’s claim that the disputed property is part of his larger property.

In regard to the second requisite of title to property, both petitioner and respondent separately claim that they are entitled to ownership of the property by virtue of open, public, continuous and exclusive possession of the same in the concept of owner. Petitioner claims that he inherited the subject property from his father in 1952, while respondent claims that he acquired the property from his grandmother Intumo Pagsidan, a portion thereof from his grandmother’s helper Totop Malacop pursuant to a court decision after litigating with him.[37] Respondent has OCT No. P-658 to prove his title to the subject property, while petitioner merely claims that the property is already his private land by virtue of his open, public, continuous possession of the same in the concept of owner.

The Court holds that petitioner failed to prove the requisites of reconveyance as he failed to prove the identity of his larger property in relation to the disputed property, and his claim of title by virtue of open, public and continuous possession of the disputed property in the concept of owner is nebulous in the light of a similar claim by respondent who holds a free patent title over the subject property. As stated in Ybañez v. Intermediate Appellate Court,[38] it is relatively easy to declare and claim that one owns and possesses public agricultural land, but it is entirely a different matter to affirmatively declare and to prove before a court of law that one actually possessed and cultivated the entire area to the exclusion of other claimants who stand on equal footing under thePublic Land Act (Commonwealth Act No. 141, as amended) as any other pioneering claimants.

Further, petitioner contends that the Court of Appeals erred in ruling that petitioner’s counterclaim is time-barred, since the one-year prescriptive period does not apply when the person seeking annulment of title or reconveyance is in possession of the lot, citing Heirs of Simplicio Santiago v. Heirs of Mariano E. Santiago.[39] Petitioner also contends that the Court of Appeals erred in ruling that the counterclaim in this case is a collateral attack on respondent’s title, citing Cimafranca v. Intermediate Appellate Court.[40] Petitioner cites the case of Heirs of Simplicio Santiago v. Heirs of Mariano E. Santiago,[41] which held that a counterclaim can be considered a direct attack on the title.

The Court notes that the case of Cimafranca v. Intermediate Appellate Court,[42] cited by the Court of Appeals to support its ruling that the prayer for the cancellation of respondent’s title through a counterclaim included in petitioner’s Answer is a collateral attack on the said title, is inapplicable to this case. In Cimafranca, petitioners therein filed a complaint for Partition and Damages, and respondents therein indirectly attacked the validity of the title involved in their counterclaim. Hence, the Court ruled that aTorrens title cannot be attacked collaterally, and the issue on its validity can be raised only in an action expressly instituted for that purpose.

Here, the case cited by petitioner, Heirs of Simplicio Santiago v. Heirs of Mariano E. Santiago, declared that the one-year prescriptive period does not apply when the party seeking annulment of title or reconveyance is in possession of the lot, as well as distinguished a collateral attack under Section 48 of PD No. 1529 from a direct attack, and held that a counterclaim may be considered as a complaint or an independent action and can be considered a direct attack on the title, thus:

The one-year prescriptive period, however, does not apply when the person seeking annulment of title or reconveyance is in possession of the lot. This is because the action partakes of a suit to quiet title which is imprescriptible. In David v. Malay, we held that a person in actual possession of a piece of land under claim of ownership may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, and his undisturbed possession gives him the continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his title.

x x x x

Section 48 of P.D. 1529, the Property Registration Decree, provides that a certificate of title shall not be subject to collateral attack and cannot be altered, modified, or canceled except in a direct proceeding. An action is an attack on a title when the object of the action is to nullify the title, and thus challenge the judgment or proceeding pursuant to which the title was decreed. The attack is direct when the object of an action is to annul or set aside such judgment, or enjoin its enforcement. On the other hand, the attack is indirect or collateral when, in an action to obtain a different relief, an attack on the judgment or proceeding is nevertheless made as an incident thereof.

x x x A counterclaim can be considered a direct attack on the title. In Development Bank of the Philippines v. Court Appeals, we ruled on the validity of a certificate of title despite the fact that the nullity thereof was raised only as a counterclaim. It was held that a counterclaim is considered a complaint, only this time, it is the original defendant who becomes the plaintiff. It stands on the same footing and is to be tested by the same rules as if it were an independent action. x x x[43]

The above ruling of the court on the definition of collateral attack under Section 48 of P.D. No. 1529 was reiterated in Leyson v. Bontuyan,[44] Heirs of Enrique Diaz v. Virata,[45] Arangote v. Maglunob,[46] and Catores v. Afidchao.[47]

Based on the foregoing, the Court holds that petitioner’s counterclaim for cancellation of respondent’s title is not a collateral attack, but a direct attack on the Torrens title of petitioner. However, the counterclaim seeking for the cancellation of title and reconveyance of the subject property has prescribed as petitioner has not proven actual possession and ownership of the property due to his failure to prove the identity of his larger property that would show that the disputed property is a part thereof, and his claim of title to the subject property by virtue of open, public and continuous possession in the concept of owner is nebulous in the light of a similar claim by respondent who holds a Torrens title to the subject property.

Respondent’s original certificate of title was issued on May 22, 1981, while the counterclaim was filed by petitioner onOctober 15, 1984, which is clearly beyond the one-year prescriptive period.

In fine, the Court of Appeals did not err in confirming that respondent is the owner of the parcel of land covered by OCT No. P-658."