G.R. No. 205867, February 23, 2015 - MARIFLOR T.

HORTIZUELA, REPRESENTED
BY JOVIER TAGUFA, Petitioner, v. GREGORIA TAGUFA, ROBERTO TAGUFA AND
ROGELIO LUMABAN, Respondents.:

G.R. No. 205867, February 23, 2015 - MARIFLOR T. HORTIZUELA, REPRESENTED

BY JOVIER TAGUFA, Petitioner, v. GREGORIA TAGUFA, ROBERTO TAGUFA AND
ROGELIO LUMABAN, Respondents.

SECOND DIVISION

G.R. No. 205867, February 23, 2015

MARIFLOR T. HORTIZUELA, REPRESENTED BY JOVIER

TAGUFA, Petitioner, v. GREGORIA TAGUFA, ROBERTO TAGUFA AND ROGELIO
LUMABAN, Respondents.

DECISION

MENDOZA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court

assailing the September 13, 2012 Decision1 and the January 25, 2013
Resolution2 of the Court of Appeals (CA) in CA- G.R. SP No. 122648 which reversed
and set aside the July 1, 2011 Decision3 of the Regional Trial Court, Branch 22,
Cabagan, Isabela (RTC), in an action for reconveyance and recovery of possession.

The Facts:

The undisputed facts were succinctly summarized in the August 31, 2010
Decision4 of the 3rd Municipal Circuit Trial Court, Tumauini-Delfin Albano, Tumauini,
Isabela (MCTC) before which a complaint5 for Reconveyance and Recovery of
Possession with Damages was filed by petitioner Mariflor Tagufa Hortizuela
(Hortizuela) represented by Jovier Tagufa against respondents Gregoria Tagufa,
Roberto Tagufa and Rogelio Lumaban (respondents). As quoted by the CA, said
undisputed facts are:chanRoblesvirtualLawlibrary

Gleaned from the joint testimonies of R[u]nsted Tagufa xxx and Jovier Tagufa xxx
are the following facts:
The property involved in this case is a parcel of land located at District IV,
Tumauini, Isabela containing an area of 539 square meters, more or less, and
covered by OCT No. P-84609 of the Registry of Deeds of Isabela. By virtue of the
special power of attorney xxx executed by Mariflor Tagufa Hortizuela, Jovier Tagufa
instituted this case against herein defendants praying for the peaceful surrender of
the above-described property unto them and further ordering defendant Gregoria
Tagufa to reconvey in plaintiff’s favor the same property which was titled under her
name via fraud.

Before it was titled in the name of Defendant Tagufa, said property was originally
owned by plaintiff’s parents, Spouses Epifanio Tagufa and Godofreda Jimenez.
Although untitled, the spouses mortgaged the property with the Development Bank
of the Philippines (DBP, for brevity). For failure to redeem the property, DBP
foreclosed the same and sold it to Atty. Romulo Marquez xxx who, in turn, sold it
back to Runsted Tagufa, husband of defendant Gregoria Tagufa, on April 4, 2002
xxx using the fund sent by plaintiff Hortizuela who was in America and with the
agreement that Runsted will reconvey the said property to her sister when
demanded.

However, plaintiff discovered that the same unregistered property was titled in the
name of Gregoria Tagufa under OCT No. P-84609 of the Registry of Deeds of
Isabela xxx. Investigating further, plaintiff discovered that Gregoria Tagufa was
able to title the said property by virtue of a free patent application before the
Department of Environment and Natural Resources (DENR) and the execution of a
Deed of Extrajudicial Settlement of the Estate of the late Spouses Leandro Tagufa
and Remedios Talosig dated May 9, 2003 xxx. Plaintiff now seeks to recover
possession of the said property which is presently occupied by Gregoria Tagufa and
her co-defendants and have the same be reconveyed unto them. 6
ChanRoblesVirtualawlibrary

In its Order, dated May 5, 2010, the MCTC granted the motion to declare
defendants in default and allowed Hortizuela to present her evidence ex parte. 
Thereafter, on August 31, 2010, the MCTC dismissed the complaint for lack of merit
ruling that “in the judicious analysis by this court, plaintiffs have resorted to a
wrong cause of action.”7 cralawlawlibrary

Not in conformity, Hortizuela appealed to the RTC. In its July 1, 2011 Decision, the
RTC reversed the MCTC ruling.  The decretal portion of the RTC decision reads as
follows: chanRoblesvirtualLawlibrary

WHEREFORE, premises considered, the appeal is hereby granted and the Decision
dated August 31, 2010, is hereby REVERSED and judgment is hereby rendered as
follows:

1. Ordering the defendant Gregorio Tagufa to reconvey to the plaintiff

Mariflor Tagufa Hortizuela the land described in paragraph 4 of the
complaint;
2. Ordering the defendants to vacate the same land and to surrender the
peaceful possession thereof to the plaintiff;
 3. Ordering the defendants to pay to the plaintiff the following amounts,
jointly and severally:
cralawred

a) Fifty Thousand (P50,000.00) Pesos as Moral Damages;

b) Twenty Thousand (P20,000.00) Pesos as Attorney’s Fees.

SO DECIDED.8

Respondents filed a motion for reconsideration, but it was denied by the RTC.

The reversal being unacceptable to them, respondents filed a petition for review
before the CA questioning the RTC decision. This time, the case was disposed in
their favor.  According to the CA, although Hortizuela filed with the MCTC a
complaint for reconveyance and recovery of possession of the subject lot, she was
also questioning the validity of the Torrens title, Original Certificate of Title (OCT)
No. P-846609. 9  The CA pointed out that this was in contravention of Section 48 of
Presidential Decree (P.D.) No. 1529 which provides: chanRoblesvirtualLawlibrary

Sec. 48. Certificate not subject to collateral attack.- A certificate of title shall not be
subject to collateral attack. It cannot be altered, modified, or cancelled except in a
direct proceeding in accordance with law

It cited the well-settled rule that a Torrens title could not be collaterally attacked;
that the issue of whether or not the title was fraudulently issued, could only be
raised in an action expressly instituted for that purpose; and that an action for
reconveyance and recovery of possession was not the direct action contemplated by
law.10 Hence, the dispositive portion of the CA decision reads in this wise: chanRoblesvirtualLawlibrary

WHEREFORE, premises considered, the Decision dated July 1, 2011 rendered by

the Regional Trial Court of Cabagan, Isabela, is hereby REVERSED and SET
ASIDE. The present Complaint for reconveyance and recovery of possession with
damages is DISMISSED.

SO ORDERED.11
ChanRoblesVirtualawlibrary

Hortizuela filed a motion for reconsideration, but it was denied in a

Resolution,12 dated January 25, 2013.

Hence, this petition.

ISSUE
WHETHER OR NOT 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.

Hortizuela claims that respondent Gregoria Tagufa (Gregoria), being the wife of
Runsted, was certainly aware that the subject land was actually sold by Atty.
Romulo Marquez (Atty. Marquez) to her (Hortizuela). Runsted, only acted as
attorney-in-fact in the sale transaction. Thus, the action for reconveyance was not a
collateral attack on the said title because Hortizuela was not seeking the
nullification of the title, but rather the reconveyance of the property, covered by the
said title, which Gregoria was holding in trust for her benefit as the real owner.
Gregoria should, therefore, reconvey the property and its title to her, being the
rightful owner.

Position of Respondents

Respondents counter that although Hortizuela’s complaint was denominated as one

for reconveyance and recovery of possession, its main objective was to nullify the
title held by Gregoria over the subject property. For said reason, the complaint
would amount to a collateral attack on the title which was proscribed under the
principle of indefeasibility of a Torrens title. To rule that the action for reconveyance
was not a collateral one would result in the nullity of the decree of registration.

Another argument that respondents want this Court to consider in resolving the
subject petition is the fact that the overriding reason why Hortizuela chose to file a
complaint for reconveyance and recovery of possession was that she failed to avail
of the remedy provided under Section 3813 of Act 496 within the prescribed period
of one (1) year, counted from the issuance of the free patent by the government.

Finally, granting that the title over the property would be nullified and the property
be reconveyed to Hortizuela, still the latter would be ineligible to own the same
pursuant to Batas Pambansa (B.P.) Blg. 223 which requires, among others, that an
applicant for a free patent must be a Filipino citizen. Hortizuela, by her own
admission, is an American citizen who has been residing in Las Vegas, Nevada.

The Court’s Ruling

The Court finds the petition meritorious.

The Court is not unmindful of the principle of indefeasibility of a Torrens title and
Section 48 of P.D. No. 1528 where it is provided that a certificate of title shall not
be subject to collateral attack.14 A Torrens title cannot be altered, modified or
cancelled except in a direct proceeding in accordance with law. When the Court
says direct attack, it means that 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. 15 In its decision, the
MCTC wrote: chanRoblesvirtualLawlibrary

Obviously, the bone of contention in this case are the deed of sale by and between
Romulo Marquez and Runsted Tagufa, the estranged husband of defendant Gregoria
Tagufa, and OCT No. P-84609 registered in the name of Gregoria Tagufa who,
according to the plaintiff, fraudulently caused the titling of the same.

In their lamentations, plaintiff pointed out the following indicia of fraud committed

by Gregoria Tagufa that would allegedly justify reconveyance:

First, Gregoria Tagufa made it appear in the extrajudicial settlement of the estate of
spouses Leandro Tagufa and Remedios Talosig that she is an heir when, in truth,
she is only a grand daughter-in-law,

Second, she already knew when she applied for free patent that plaintiff was
already the owner of the land she was applying for;

Third, she already knew that when she applied for free patent that plaintiff’s
parents were not anymore the owners of the land as the same was mortgaged with
the DBP; and

Fourth, defendant has never been in actual possession of the property when she
applied for it.

All in all, plaintiff argued, Gregoria Tagufa never acquired any valid right or legal
title over the property.

Studying the merits of this case and removing all its superfluities, plaintiffs plainly
question the title generated in the name of defendant Gregoria Tagufa having been
obtained by fraud and misrepresentation. However, in the judicious analysis by this
court, plaintiffs have resorted to a wrong cause of action. 16
ChanRoblesVirtualawlibrary

From the foregoing, it can be deduced that the MCTC was convinced that fraud was
attendant in the registration of the land but was not convinced that reconveyance
was an accepted remedy.

Contrary to the pronouncements of the MCTC and the CA, however, the complaint
of Hortizuela was not a collateral attack on the title warranting dismissal. As a
matter of fact, an action for reconveyance is a recognized remedy, an action in
personam, available to a person whose property has been wrongfully registered
under the Torrens system in another’s name. In an action for reconveyance, the
decree is not sought to be set aside.  It does not seek to set aside the decree but,
respecting it as incontrovertible and no longer open to review, seeks to transfer or
reconvey the land from the registered owner to the rightful owner. Reconveyance is
always available as long as the property has not passed to an innocent third person
for value.17 cralawlawlibrary

There is no quibble that a certificate of title, like in the case at bench, can only be
questioned through a direct proceeding. The MCTC and the CA, however, failed to
take into account that in a complaint for reconveyance, the decree of registration is
respected as incontrovertible and is not being questioned. What is being sought is
the transfer of the property wrongfully or erroneously registered in another's name
to its rightful owner or to the one with a better right. If the registration of the land
is fraudulent, the person in whose name the land is registered holds it as a mere
trustee, and the real owner is entitled to file an action for reconveyance of the
property.18cralawlawlibrary

The fact that Gregoria was able to secure a title in her name does not operate to
vest ownership upon her of the subject land. “Registration of a piece of land under
the Torrens System does not create or vest title, because it is not a mode of
acquiring ownership. A certificate of title is merely an evidence of ownership or title
over the particular property described therein. It cannot be used to protect a
usurper from the true owner; nor can it be used as a shield for the commission of
fraud; neither does it permit one to enrich himself at the expense of others. Its
issuance in favor of a particular person does not foreclose the possibility that the
real property may be co-owned with persons not named in the certificate, or that it
may be held in trust for another person by the registered owner.” 19 cralawlawlibrary

Furthermore, respondents’ argument that the overriding reason why Hortizuela

chose to file a complaint for reconveyance and recovery of possession was that she
failed to avail of the remedy provided under Section 38 of Act 496 within the
prescribed period of one (1) year, counted from the issuance of the patent by the
government, is weak. As was similarly held in Cervantes v. CA,20 with the land
obtained by respondent Gregoria through fraudulent machinations by means of
which a free patent and a title were issued in her name, she was deemed to have
held it in trust for the benefit of Hortizuela who was prejudiced by her actions.
Article 1456 provides: chanRoblesvirtualLawlibrary

ARTICLE 1456. If property is acquired through mistake or fraud, the person

obtaining it is, by force of law, considered a trustee of an implied trust for the
benefit of the person from whom the property comes.

The remedy of reconveyance, based on Section 53 of P.D. No. 1529 and Article
1456, prescribes in ten (10) years from the issuance of the Torrens title over the
property.

The Court is not unaware of the rule that a fraudulently acquired free patent may
only be assailed by the government in an action for reversion  pursuant to Section
101 of the Public Land Act.21 In Sherwill Development Corporation v. Sitio Sto. Niño
Residents Association, Inc.,22 this Court pointed out that: chanRoblesvirtualLawlibrary

x x x It is to the public interest that one who succeeds in fraudulently acquiring title
to a public land should not be allowed to benefit therefrom, and the State should,
therefore, have an even existing authority, thru its duly-authorized officers, to
inquire into the circumstances surrounding the issuance of any such title, to the end
that the Republic, thru the Solicitor General or any other officer who may be
authorized by law, may file the corresponding action for the reversion of the land
involved to the public domain, subject thereafter to disposal to other qualified
persons in accordance with law. In other words, the indefeasibility of a title over
land previously public is not a bar to an investigation by the Director of Lands as to
how such title has been acquired, if the purpose of such investigation is to
determine whether or not fraud had been committed in securing such title in order
that the appropriate action for reversion may be filed by the Government. 23
ChanRoblesVirtualawlibrary

An action for reconveyance is proper

The foregoing rule is, however, not without exception. A recognized exception is
that situation where plaintiff-claimant seeks direct reconveyance from defendant of
public land unlawfully and in breach of trust titled by him, on the principle of
enforcement of a constructive trust. This was the ruling in Larzano v. Tabayag,
Jr.,24  where it was written:chanRoblesvirtualLawlibrary

A private individual may bring an action for reconveyance of a parcel of land even if
the title thereof was issued through a free patent since such action does not aim or
purport to re-open the registration proceeding and set aside the decree of
registration, but only to show that the person who secured the registration of the
questioned property is not the real owner thereof.

In Roco, et al. v. Gimeda, we stated that if a patent had already been issued
through fraud or mistake and has been registered, the remedy of a party who has
been injured by the fraudulent registration is an action for reconveyance, thus:
cralawred

It is to be noted that the petition does not seek for a reconsideration of the granting
of the patent or of the decree issued in the registration proceeding. The purpose is
not to annul the title but to have it conveyed to plaintiffs. Fraudulent statements
were made in the application for the patent and no notice thereof was given to
plaintiffs, nor knowledge of the petition known to the actual possessors and
occupants of the property. The action is one based on fraud and under the law, it
can be instituted within four years from the discovery of the fraud. (Art. 1146, Civil
Code, as based on Section 3, paragraph 43 of Act No. 190.) It is to be noted that as
the patent here has already been issued, the land has the character of registered
property in accordance with the provisions of Section 122 of Act No. 496, as
amended by Act No. 2332, and the remedy of the party who has been injured by
the fraudulent registration is an action for reconveyance. (Director of Lands vs.
Registered of Deeds, 92 Phil., 826; 49 Off. Gaz. 3 935; Section 55 of Act No. 496.)

In the same vein, in Quiñiano, et al. v. Court of Appeals, et al., we stressed that: chanRoblesvirtualLawlibrary

The controlling legal norm was set forth in succinct language by Justice Tuason in a
1953 decision, Director of Lands v. Register of Deeds of Rizal. Thus: “The sole
remedy of the land owner whose property has been wrongfully or erroneously
registered in another's name is, after one year from the date of the decree, not to
set aside the decree, as was done in the instant case, but, respecting the decree as
incontrovertible and no longer open to review, to bring an ordinary action in the
ordinary court of justice for reconveyance or, if the property has passed into the
hands of an innocent purchaser for value, for damages." Such a doctrine goes back
to the 1919 landmark decision of Cabanos v. Register of Deeds of Laguna. If it were
otherwise the institution of registration would, to quote from Justice Torres, serve
"as a protecting mantle to cover and shelter bad faith ...." In the language of the
then Justice, later Chief Justice, Bengzon: "A different view would encourage fraud
and permit one person unjustly to enrich himself at the expense of another." It
would indeed be a signal failing of any legal system if under the circumstances
disclosed, the aggrieved party is considered as having lost his right to a property to
which he is entitled. It is one thing to protect an innocent third party; it is entirely a
different matter, and one devoid of justification, if [deceit] would be rewarded by
allowing the perpetrator to enjoy the fruits of his nefarious deed. As clearly
revealed by the undeviating line of decisions coming from this Court, such an
undesirable eventuality is precisely sought to be guarded against. So it has been
before; so it should continue to be. (Citations omitted)

In this case, in filing the complaint for reconveyance and recovery of possession,
Hortizuela was not seeking a reconsideration of the granting of the patent or the
decree issued in the registration proceedings. What she was seeking was the
reconveyance of the subject property on account of the fraud committed by
respondent Gregoria. An action for reconveyance is a legal and equitable remedy
granted to the rightful landowner, whose land was wrongfully or erroneously
registered in the name of another, to compel the registered owner to transfer or
reconvey the land to him.25 Thus, the RTC did not err in upholding the right of
Hortizuela to ask for the reconveyance of the subject property. To hold otherwise
would be to make the Torrens system a shield for the commission of fraud. To
reiterate,

The fact that petitioner was able to secure a title in her name did not operate to
vest ownership upon her of the subject land. Registration of a piece of land under
the Torrens System does not create or vest title, because it is not a mode of
acquiring ownership. A certificate of title is merely an evidence of ownership or title
over the particular property described therein. It cannot be used to protect a
usurper from the true owner; nor can it be used as a shield for the commission of
fraud; neither does it permit one to enrich himself at the expense of others. Its
issuance in favor of a particular person does not foreclose the possibility that the
real property may be co-owned with persons not named in the certificate, or that it
may be held in trust for another person by the registered owner. 26
ChanRoblesVirtualawlibrary

Finally, respondents’ supposition that Hortizuela was ineligible to own the subject
property pursuant to B.P. Blg. 223 because she was no longer a Filipino citizen
cannot be considered for having been raised only for the first time on appeal. It
must be noted that points of law, theories, issues, and arguments not brought to
the attention of the trial court ought not to be considered by a reviewing court, as
these cannot be raised for the first time on appeal. 27 The reason therefor is due
process.

WHEREFORE, the petition is GRANTED. The September 13, 2012 Decision and the
January 25, 2013 Resolution of the Court of Appeals in CA- G.R. SP No. 122648 
are hereby REVERSED and SET ASIDE. The July 1, 2011 Decision of the Regional
Trial Court, Branch 22, Cabagan, Isabela, is hereby REINSTATED.

SO ORDERED. chanroblesvirtuallawlibrary
Carpio, (Chairperson), Velasco, Jr.,*  Del Castillo,  and Leonen, JJ., concur.

Endnotes:

*
 Designated Acting member in lieu of Associate Justice Arturo D. Brion, per Special
Order No. 1910, dated January 12, 2015.

1
Rollo, pp. 49-55. Penned by Associate Justice Danton Q. Bueser with Associate
Justice Amelita G. Tolentino and Assocciate Justice Ramon R. Garcia, concurring.

2
 Id. at 57.

3
 Id. at 42-47. Penned by Judge Felipe Jesus Torio II.

4
 Id. at 37-40.

5
 Id. at 28-33.

6
 Id. at 50.

7
 Id. at 40.

8
 Id. at 47.

9
 Id. at 52.

10
 Id. at 54.

11
 Id. at 55.

12
 Id. at 57.

13
 Sec. 38. If the court after hearing finds that the applicant or adverse claimant has
title as stated in his application or adverse claim and proper for registration, a
decree of confirmation and registration shall be entered. Every decree of
registration shall bind the land, and quiet title thereto, subject only to the
exceptions stated in the following section. It shall be conclusive upon and against
all persons, including the Insular Government and all the branches thereof, whether
mentioned by name in the application, notice, or citation, or included in the general
description "To whom it may concern." Such decree shall not be opened by reason
of the absence, infancy, or other disability of any person affected thereby, nor by
any proceeding in any court for reversing judgments or decrees: subject, however,
to the right of any person deprived of the land or of any estate or interest therein
by decree of registration obtained by fraud to file in the competent Court of First
Instance a petition for review within one year after entry of the decree provided no
innocent purchaser for value has acquired an interest. Upon the expiration of said
term of one year, every decree or certificate of title issued in accordance with this
section shall be incontrovertible. xxx (Underscoring ours)

14
Wee v. Gonzalez,  G.R. No. 202414, June 4, 2014.

15
Sampaco v. Lantud,  G.R. No. 163551, July 18, 2011, 654 SCRA 36, 53-54.

16
 Rollo, pp. 38-39.

17
Wee v. Gonzalez,  supra note 14.

18
Campos v. Ortega, G.R. No. 171286, June 2, 2014.

19
Lorzano v. Tabayag, Jr., G.R. No. 189647, February 6, 2012, 665 SCRA 38, 56.

20
 524 Phil. 574 (2006).

21
 Section 101 of the Public Land Act provides:

Section 101. All actions for the reversion to the Government of lands of the public
domain or improvements thereon shall be instituted by the Solicitor-General or the
officer acting in his stead, in the proper courts, in the name of the [Republic] of the
Philippines.

22
 500 Phil. 288 (2005).

23
Republic v. Court of Appeals, 262 Phil. 677, 685 (1990).

24
Larzano v. Tabayag, Jr.,  G.R. No. 189647, February 6, 2012, 665 SCRA 38.

25
Leoveras v. Valdez, G.R. No. 169985, June 15, 2011, 652 SCRA 61, 71.

26
Naval v. Court of Appeals, 518 Phil. 271, 282-283 (2006).
27
Ayala Land, Inc. v. Castillo, et al., G. R. No. 178110, June 15, 2011, 652 SCRA
143, 158.