Garcia vs. Esclito

A petition to annul a deed of sale pursuant to which a certificate of title was issued constitutes an impermissible collateral attack on the Torrens title itself, which is prohibited by law and cannot be entertained by the DARAB.

In 1979, petitioner Antonio Garcia purchased a 29-hectare parcel of agricultural land. In 1998, he donated portions of this land to his co-petitioners (his children and grandchildren). The petitioners subsequently applied for and were issued patents and original certificates of title by the Department of Environment and Natural Resources (DENR) under its Handog Titulo program. In 2003, the respondents, who were holders of Certificates of Land Ownership Award (CLOAs) issued by the DAR over the same property, filed a petition before the DARAB Provincial Adjudicator seeking the annulment of the 1979 deed of sale and all subsequent documents and titles, arguing the sale was void for non-compliance with the registration requirement under Section 6 of Republic Act No. 6657 (Comprehensive Agrarian Reform Law).

• Nature of the Action and Parties: Petitioners are registered owners of parcels of land derived from a 1979 sale and subsequent donations. Respondents are agrarian reform beneficiaries holding CLOAs over the same property. Respondents initiated the case before the DARAB to nullify the root deed of sale.
• The 1979 Sale and Subsequent Titles: Antonio Garcia purchased the land in 1979. In 1998, he transferred portions to his co-petitioners. The DENR issued patents and original certificates of title to the petitioners in November 1998.
• Respondents' Claim: Respondents alleged the 1979 deed of sale was void ab initio because it was not registered with the Register of Deeds within three months from the effectivity of RA 6657 on June 15, 1988, as required by its Section 6. Consequently, all subsequent titles were also void.
• Petitioners' Defense: Petitioners argued the DARAB lacked jurisdiction, the attack on the titles was collateral, and their titles, issued prior to the respondents' CLOAs, should prevail.
• Provincial Adjudicator's Finding: The Provincial Adjudicator agreed with petitioners, finding the action constituted a collateral attack on their titles and dismissed the case.
• DARAB's Action on Appeal: The DARAB reversed the dismissal, holding the deed of sale was void for non-registration and that the subsequent titles, being derived from a void source, were likewise null and void.
• CA's Ruling: The Court of Appeals upheld the DARAB, finding no grave abuse of discretion.

• Jurisdiction: Petitioners argued the DARAB lacked jurisdiction to cancel patents and titles issued by the DENR, as the property was allegedly outside CARP coverage.
• Collateral Attack on Title: Petitioners maintained that their Torrens certificates of title could not be collaterally attacked and that the respondents' petition was, in effect, such an impermissible attack.
• Priority of Title: Petitioners contended their certificates of title, issued in 1998, predated the respondents' CLOAs (issued December 19, 1998) and should therefore prevail.

• DARAB Jurisdiction: Respondents countered that the DARAB had jurisdiction because the case involved a violation of RA 6657, specifically its Section 6 on retention limits and registration.
• Void Sale and Consequential Nullity: Respondents argued that the unregistered 1979 deed of sale was void under Section 6 of RA 6657, and as a logical consequence, all subsequent documents and titles emanating from it were also void.
• Direct Attack on the Sale: Respondents characterized their petition as a direct attack on the void deed of sale, not on the titles themselves.

• Collateral Attack: Whether the respondents' petition before the DARAB constituted an impermissible collateral attack on the petitioners' Torrens certificates of title.
• DARAB Jurisdiction and Grave Abuse of Discretion: Whether the DARAB committed grave abuse of discretion in taking cognizance of the appeal and declaring the certificates of title void, and whether the Court of Appeals erred in affirming the same.

• Collateral Attack: The respondents' action was a prohibited collateral attack. Although ostensibly seeking to nullify the deed of sale, the petition expressly prayed for the cancellation of the certificates of title derived therefrom. An attack on the deed of sale, which is the foundation of the certificates of title, is an attack on the titles themselves. Such collateral attack is barred by Section 48 of Presidential Decree No. 1529, which protects the indefeasibility of Torrens titles.
• DARAB Jurisdiction and Grave Abuse of Discretion: The DARAB gravely abused its discretion. By giving due course to the respondents' appeal, it sanctioned a prohibited collateral attack. Furthermore, the DARAB exceeded its jurisdiction by effectively declaring the petitioners' DENR-issued patents and titles void, a matter outside its authority. The Court of Appeals committed a similar grave abuse of discretion in upholding the DARAB's void decision.

• Prohibition on Collateral Attack of a Torrens Title — A certificate of title issued under the Torrens system is indefeasible and can only be altered, modified, or cancelled in a direct proceeding instituted for that purpose. A collateral attack occurs when, in an action seeking a different primary relief (e.g., annulment of a deed), the validity of a certificate of title is incidentally questioned. Such attack is prohibited to maintain the integrity and stability of the Torrens system. In this case, the Court held that an action to annul the deed of sale from which a title originated is a collateral attack on the title itself.

• "To attack the deed of sale would be to effectively attack the certificates of title. Once the deed is nullified by the DARAB, the cancellation of the certificates will logically follow, reducing the succeeding cancellation proceedings to a mere formality." — This passage explains the core reasoning for finding a collateral attack.
• "The DARAB openly recognized petitioners' Torrens certificates of title... to be invalid. Thus, in the fallo, it pronounced 'the incidental documents covering the subject landholdings' as void." — This highlights the DARAB's overreach in directly adjudicating the validity of Torrens titles.

• Vicente v. Avera, 596 Phil. 693 (2009) — Cited as controlling precedent. The Court therein held that assailing a deed of sale executed in favor of registered owners constitutes a collateral attack on their Transfer Certificate of Title, which is prohibited by Section 48 of P.D. 1529.

• 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 cancelled except in a direct proceeding in accordance with law. This was the central legal basis for the Court's ruling.
• Section 6, Republic Act No. 6657 (Comprehensive Agrarian Reform Law) — Cited by respondents as the basis for their claim that the 1979 deed of sale was void for non-registration. The Court did not rule on the application of this provision, as the case was resolved on the procedural ground of collateral attack.

• Justice Zalameda
• Justice Rosario
• Justice Marquez
• Justice Perlas-Bernabe (on official leave, but noted as Acting Chairperson per Special Order)

N/A. The decision was unanimous among the participating justices.