Asuncion Urieta Vda. de Aguilar vs. Spouses Ederlina B. Alfaro

A registered owner armed with a Torrens title has a better right to possession of real property than occupants who hold only a notarized but unregistered deed of sale executed before the land was registered under the Torrens system. The Torrens title is conclusive evidence of ownership and entitles the titleholder to all attributes of ownership, including possession, and such title cannot be subject to a collateral attack.

The case involves a dispute over a 606-square meter parcel of land designated as Lot 83 in Brgy. Buenavista, Sablayan, Occidental Mindoro. Petitioner Asuncion Urieta Vda. de Aguilar is the widow of Ignacio Aguilar, who was issued Original Certificate of Title (OCT) No. P-9354 over the entire Lot 83 on May 16, 1977. Respondents are the children of Anastacia Urieta, petitioner's sister, who was allowed by Ignacio in 1968 to construct a house on the southern portion of the land and to stay therein temporarily. The dispute centers on whether respondents' notarized but unregistered deed of sale, allegedly executed in 1973, can defeat petitioner's Torrens title in an action for recovery of possession.

Petitioner Asuncion Urieta Vda. de Aguilar, represented by her son Orlando U. Aguilar, filed a Complaint for Recovery of Possession and Damages before the Regional Trial Court of San Jose, Occidental Mindoro on August 3, 1995. She alleged that on May 16, 1977, her husband Ignacio Aguilar was issued Original Certificate of Title (OCT) No. P-9354 over a 606-square meter parcel of land designated as Lot 83 situated in Brgy. Buenavista, Sablayan, Occidental Mindoro. Prior thereto, or in 1968, Ignacio allowed petitioner's sister, Anastacia Urieta, mother of respondent Ederlina B. Alfaro, to construct a house on the southern portion of said land and to stay therein temporarily. When Ignacio died in 1994, his heirs decided to partition Lot 83, and petitioner asked respondents, who took possession of the premises after the death of Anastacia, to vacate the property. They did not heed her demand.

In their Answer with Counterclaims and Affirmative Defenses, respondents did not dispute that Ignacio secured title over the entire Lot 83. However, they asserted that on April 17, 1973, Ignacio and petitioner sold to their mother Anastacia the southern portion of Lot 83 consisting of 367.5 square meters, as shown by the Kasulatan sa Bilihan which bears the signatures of petitioner and Ignacio. Since then, they and their mother have been in possession thereof. Respondents presented several Tax Declarations in support of their allegations and raised the defense of prescription, pointing out that accion publiciana prescribes in 10 years, yet petitioner filed the case only in 1995, more than 25 years after respondents took possession in 1968. By way of counterclaim, respondents prayed that petitioner be directed to execute the necessary documents so that title to the 367.5-square meter portion could be issued in their name.

In her Reply and Answer to Counterclaim, petitioner denied having signed the Kasulatan sa Bilihan and averred that her signature appearing thereon is a forgery. She presented an unsworn written declaration dated January 28, 1994 where her husband declared that he did not sell the property in question to anyone. As to prescription, she asserted that respondents' occupation of the property cannot ripen into ownership since it was by mere tolerance of the owner, and the purported Kasulatan sa Bilihan was not registered with the proper Registry of Deeds.

During trial, petitioner presented the testimonies of Orlando Aguilar and Zenaida Baldeo. Orlando testified that he has been staying in Lot 83 since 1960 and had built a house thereon where he presently resides, and that his mother denied having sold the property or having signed any document for that matter. Zenaida testified that in 1981, her father Ignacio and Ederlina had a confrontation before the barangay during which Ignacio denied having conveyed any portion of Lot 83 to anybody, and that she is familiar with her father's signature and the signature appearing on the Kasulatan sa Bilihan is not her father's signature.

For their part, respondents offered the testimonies of Estrella Bermudo Alfaro, Ederlina, and Jose Tampolino. Estrella declared that she was present when Ignacio and petitioner affixed their signatures on the Kasulatan sa Bilihan, which was acknowledged before Notary Public Juan Q. Dantayana on April 17, 1973. She narrated that her mother actually purchased the property in 1954, but it was only in 1973 when the vendor executed the deed of sale, and that her father Francisco Bermudo was able to secure a permit to erect a house on the disputed property from the Office of the Mayor of Sablayan in 1954. Ederlina corroborated these declarations, alleging that her parents occupied the property in 1954 when they built a hut there, then later a house of strong materials. Jose corroborated the declarations of the other witnesses for respondents.

• Validity and Genuineness of the Deed: Petitioner contended that the CA grievously erred in upholding the validity and genuineness of the Kasulatan sa Bilihan despite her vehement denial of the alleged vendors' signatures. She alleged that she wanted to take the witness stand to disclaim in open court her purported signature but could not do so because she is too old, bed-ridden, and has to bear a tortuous five-hour drive to reach the court. She executed a sworn statement declaring that she and her husband never sold any portion of Lot 83 and that their signatures appearing on said deed were forged.

• Patent Dissimilarities in Signatures: Petitioner averred that the assistance of an expert witness is not even necessary to detect the patent dissimilarities between the forged signatures and their authentic signatures.

• Appearance of the Document: Petitioner argued that the CA erred in taking into consideration the appearance and condition of the paper where the Kasulatan sa Bilihan is written, positing that the fabrication of an ancient-looking document nowadays is no longer difficult. She also pointed to several circumstances which cast doubt on the authenticity and due execution of the Kasulatan sa Bilihan but which the CA inexplicably ignored.

• Indefeasibility of Title: Petitioner maintained that her title is indefeasible, and while there are exceptions to the rule on indefeasibility of title, respondents never disputed her title.

• Tax Declarations: Petitioner asserted that tax declarations presented by respondents are not necessarily proof of ownership, citing consistent rulings of the Court.

• Rule 45 Limitation: Respondents asserted that in petitions filed under Rule 45 of the Rules of Court, only questions of law can be raised, and factual issues are prohibited. From the arguments advanced by the petitioner, it is clear that she is asking the Court to examine and weigh again the evidence on record.

• Validity of the Deed of Sale: Whether the Court of Appeals erred in upholding the validity, genuineness, and due execution of the purported deed of sale of the portion of the lot despite the vehement denial of the alleged vendors.

• Right to Possession: Whether the registered owner armed with a Torrens title has a better right to possession of realty than occupants brandishing a notarized but unregistered deed of sale executed before the land was registered under the Torrens system.

• Collateral Attack on Title: Whether respondents' attack on the validity of petitioner's title in an accion publiciana constitutes a prohibited collateral attack under Section 48 of Presidential Decree No. 1529.

• Jurisdiction over Counterclaim: Whether the lower courts can pass upon or grant respondents' counterclaim for reconveyance for lack of jurisdiction due to non-payment of docket fees.

• Validity of the Deed of Sale: No. The Court did not resolve the genuineness of the Kasulatan sa Bilihan as a determinative issue, but noted telltale signs casting doubt on its genuineness, including the date of execution coinciding with the date of the buyer's death, respondents' failure to assert rights thereunder or register the deed for over two decades, the non-presentation of the notarizing lawyer and witnesses, and the presumption of regularity in favor of the public officer who issued the title.

• Right to Possession: Yes. The registered owner armed with a Torrens title has a better right to possession than occupants holding a notarized but unregistered deed of sale. A Torrens title is conclusive evidence of ownership, and the titleholder is entitled to all attributes of ownership, including possession.

• Collateral Attack on Title: Yes. Respondents' attack on the validity of petitioner's title by claiming that their mother became the true owner even before the issuance of OCT No. P-9354 constitutes a collateral attack on said title, which is not permitted under Section 48 of Presidential Decree No. 1529.

• Jurisdiction over Counterclaim: No. The lower courts cannot pass upon or grant respondents' counterclaim for reconveyance because it is a permissive counterclaim, and respondents failed to pay the corresponding docket fees, which is required to vest the trial court with jurisdiction over the subject matter or nature of the action.

• Validity of the Deed of Sale: The Court noted that even if respondents' proof of ownership has in its favor a juris tantum presumption of authenticity and due execution as a notarized document, the same cannot prevail over petitioner's Torrens title. The Court pointed to several telltale signs casting doubt on the genuineness of the Kasulatan: (1) the date of its execution unbelievably coincides with the date the buyer, Anastacia, died; (2) despite its alleged execution on April 17, 1973, respondents brought up the Kasulatan only when petitioner asked them to vacate the disputed premises, and prior thereto they neither asserted their rights thereunder nor registered the same with the proper Registry of Deeds; (3) the lawyer who notarized the Kasulatan sa Bilihan, as well as the witnesses thereto, was not presented in court; and (4) the District Land Officer who signed OCT No. P-9354 by authority of the President is a public officer who has in his favor the presumption of regularity in issuing said title.

• Right to Possession: The Court held that accion publiciana, also known as accion plenaria de posesion, is an ordinary civil proceeding to determine the better right of possession of realty independently of title. It refers to an ejectment suit filed after the expiration of one year from the accrual of the cause of action or from the unlawful withholding of possession of the realty. The objective of the plaintiffs in accion publiciana is to recover possession only, not ownership. However, where the parties raise the issue of ownership, the courts may pass upon the issue to determine who between the parties has the right to possess the property, but this adjudication is not a final and binding determination of the issue of ownership. The Court applied the settled rule that a Torrens title is evidence of indefeasible title to property in favor of the person in whose name the title appears, and it is conclusive evidence with respect to the ownership of the land described therein. The titleholder is entitled to all the attributes of ownership of the property, including possession. Citing Arambulo vs. Gungab, the Court declared that the "age-old rule is that the person who has a Torrens title over a land is entitled to possession thereof." The Court quoted extensively from Pascual vs. Coronel, which upheld the registered owners' superior right to possess the property over holders of unregistered deeds of sale, stressing that the Torrens System was adopted to guarantee the integrity of land titles and to protect their indefeasibility once the claim of ownership is established and recognized.

• Collateral Attack on Title: The Court held that respondents' attack on the validity of petitioner's title constitutes a collateral attack, which is an attack incidental to their quest to defend their possession of the property in an accion publiciana, not a direct action whose main objective is to impugn the validity of the judgment granting the title. Under Section 48 of Presidential Decree No. 1529, a certificate of title shall not be subject to collateral attack and cannot be altered, modified, or canceled except in a direct proceeding in accordance with law. A collateral attack transpires when, in another action to obtain a different relief and as an incident to the present action, an attack is made against the judgment granting the title. Citing Magay vs. Estiandan and Co vs. Court of Appeals, the Court rejected respondents' defense on the ground that the issue on the validity of the title can only be raised in an action expressly instituted for that purpose.

• Jurisdiction over Counterclaim: The Court held that both the trial court and the appellate court considered respondents' counterclaim as a petition for reconveyance, which should be treated merely as a permissive counterclaim because the evidence required to prove their claim differs from the evidence needed to establish petitioner's demand for recovery of possession. Being a permissive counterclaim, respondents should have paid the corresponding docket fees, but there is no proof on record that they did. The Court applied the consistent ruling that it is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the full amount of the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the action. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid.

• Accion Publiciana (Accion Plenaria de Posesion) — An ordinary civil proceeding to determine the better right of possession of realty independently of title. It refers to an ejectment suit filed after the expiration of one year from the accrual of the cause of action or from the unlawful withholding of possession of the realty. The objective is to recover possession only, not ownership. However, where the parties raise the issue of ownership, the courts may pass upon the issue to determine who between the parties has the right to possess the property, but this adjudication is provisional and not a bar to an action between the same parties involving title to the property.

• Indefeasibility of Torrens Title — A Torrens title is evidence of indefeasible title to property in favor of the person in whose name the title appears, and it is conclusive evidence with respect to the ownership of the land described therein. The titleholder is entitled to all the attributes of ownership of the property, including possession. The age-old rule is that the person who has a Torrens title over a land is entitled to possession thereof. The Torrens System was adopted because it was believed to be the most effective measure to guarantee the integrity of land titles and to protect their indefeasibility once the claim of ownership is established and recognized.

• Collateral Attack on Certificate of Title — Under Section 48 of Presidential Decree No. 1529, a certificate of title shall not be subject to collateral attack and cannot be altered, modified, or canceled except in a direct proceeding in accordance with law. A collateral attack transpires when, in another action to obtain a different relief and as an incident to the present action, an attack is made against the judgment granting the title. This is to be distinguished from a direct attack against a judgment granting the title, through an action whose main objective is to annul, set aside, or enjoin the enforcement of such judgment if not yet implemented, or to seek recovery if the property titled under the judgment had been disposed of.

• Docket Fees and Jurisdiction over Permissive Counterclaims — It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the full amount of the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the action. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid.

• "Even if we sustain the petitioners' arguments and rule that the deeds of sale are valid contracts, it would still not bolster the petitioners' case. In a number of cases, the Court had upheld the registered owners' superior right to possess the property." — This passage from Pascual v. Coronel, quoted by the Court, articulates the controlling principle that a Torrens title prevails over an unregistered deed of sale in determining the right to possession.

• "The age-old rule is that the person who has a Torrens Title over a land is entitled to possession thereof." — This statement from Arambulo v. Gungab, quoted in the decision, is the canonical formulation of the rule governing disputes between registered owners and occupants claiming under unregistered instruments.

• "A certificate of title shall not be subject to collateral attack. It cannot be altered, modified, or canceled except in a direct proceeding in accordance with law." — This quotation of Section 48 of Presidential Decree No. 1529 states the statutory basis for prohibiting respondents' attack on petitioner's title in an accion publiciana.

• "It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the full amount of the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the action." — This statement from Sun Insurance Office v. Asuncion, applied by the Court, establishes the rule that non-payment of docket fees for a permissive counterclaim deprives the court of jurisdiction over it.

• Pascual vs. Coronel, G.R. No. 159292, July 12, 2007, 527 SCRA 474 — Controlling precedent, quoted extensively by the Court, holding that registered owners have superior right to possess property over holders of unregistered deeds of sale, and stressing that the Torrens System was adopted to guarantee the integrity of land titles and protect their indefeasibility.

• Arambulo vs. Gungab, G.R. No. 156581, September 30, 2005, 471 SCRA 640 — Followed, declaring the age-old rule that the person who has a Torrens title over a land is entitled to possession thereof.

• Co vs. Militar, 466 Phil. 217 (2004) — Followed, holding that the court a quo correctly relied on the transfer certificate of title as opposed to the unregistered title in resolving who has the better right to possess.

• Umpoc vs. Mercado, 490 Phil. 118 (2005) — Followed, declaring that the trial court did not err in giving more probative weight to the TCT in the name of the decedent vis-à-vis the contested unregistered Deed of Sale.

• Magay vs. Estiandan, 161 Phil. 586 (1976) — Followed, rejecting the defendant's defense in an accion publiciana on the ground that the issue on the validity of the title can only be raised in an action expressly instituted for that purpose.

• Co vs. Court of Appeals, 274 Phil. 108 (1991) — Followed, holding that a counterclaim seeking to nullify a Torrens title constitutes a collateral attack not permitted under the principle of indefeasibility of a Torrens title.

• Sun Insurance Office vs. Asuncion, 252 Phil. 280 (1989) — Followed, establishing the rule that payment of the full amount of the prescribed docket fee vests the trial court with jurisdiction over the subject matter or nature of the action.

• Section 48, Presidential Decree No. 1529 (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 in accordance with law. The Court applied this provision to bar respondents' attack on petitioner's title in the accion publiciana.

• Rule 45, Section 1, Rules of Court — Provides that only questions of law may be raised in petitions for review on certiorari. The Court acknowledged this rule but applied the exception allowing review of factual issues when the findings of the appellate court are contrary to those of the trial court.

• Article 428, Civil Code — Cited in the context of the discussion on collateral attack, relating to the owner's right to recover possession of property.

• Chief Justice Renato C. Corona (Chairperson)
• Associate Justice Presbitero J. Velasco, Jr.
• Associate Justice Teresita J. Leonardo-De Castro
• Associate Justice Jose Portugal Perez