G.R. No. 161419 ; August 25, 2009
Eugenio Encinares, Petitioner, vs. Dominga Achero, Respondent.

FACTS

Petitioner Eugenio Encinares filed a complaint for quieting of title and reconveyance against respondent Dominga Achero. He claimed ownership of a parcel of land (Lot No. 1623) by purchase and alleged over thirty years of open, continuous, and adverse possession. He discovered that in June 1987, Achero had fraudulently caused a free patent to be issued and an Original Certificate of Title (OCT No. P-23505) to be registered in her name, covering a larger area that included his property. A relocation survey confirmed an overlap, showing that a significant portion of the titled land (19,290 sq. m.) was actually claimed and possessed by Encinares.
The Regional Trial Court (RTC) ruled in favor of Encinares, declaring him the owner of the overlapping portion, ordering its reconveyance, and declaring Achero’s title null and void for that portion. The Court of Appeals (CA) reversed this decision. The CA upheld the validity of OCT No. P-23505, ruling that an action for reconveyance does not nullify a title but merely seeks its transfer, and that Encinares failed to prove his ownership and the alleged fraud with clear and convincing evidence.

ISSUE

Whether the Court of Appeals erred in dismissing the complaint for reconveyance and in upholding the validity of OCT No. P-23505.

RULING

Yes, the Supreme Court reversed the CA decision and reinstated the RTC ruling with modification. The Court clarified that an action for reconveyance based on fraud is a permissible remedy, prescribes in ten years, and does not constitute a collateral attack on a certificate of title. The one-year period under Section 32 of P.D. No. 1529 refers to a petition for review of the decree of registration itself, not to an ordinary civil action for reconveyance.
On the merits, the Court found that Encinares successfully proved his ownership through preponderance of evidence, including tax declarations and the Commissioner’s Report from the relocation survey, which substantiated his claim of prior, open, and continuous possession. The Court held that Achero’s acquisition of a free patent and title over land already privately owned by Encinares was fraudulent. Since the property was no longer part of the public domain, Achero could not have validly acquired it through a free patent. Consequently, while the title remains in Achero’s name, the trustor-trustee relationship under an implied trust obligates her or her heirs to reconvey the property to the rightful owner, Encinares. The Court ordered the reconveyance of the specific 19,290-square-meter portion identified in the survey.