G.R. No. 152627 September 16, 2005
Spouses Amancio and Luisa Sarmiento and Pedro Ogsiner, Petitioners, vs. The Hon. Court of Appeals, Rodeanna Realty Corporation, et al., Respondents.

FACTS

The subject property, originally owned by the Sarmiento spouses, was mortgaged to Carlos Moran Sison. Upon the spouses’ failure to pay the loan, Sison extrajudicially foreclosed the mortgage in 1977. Subsequently, Jose Puzon purchased the same property in a 1982 tax delinquency auction conducted by the Marikina Treasurer. After consolidation, Puzon obtained a new title and later sold the property to Rodeanna Realty Corporation (RRC). RRC then filed a complaint for recovery of possession (accion reivindicatoria) against the Sarmiento spouses and their caretaker, Pedro Ogsiner, who refused to vacate.
In their defense, the Sarmiento spouses filed a third-party complaint against Sison’s heirs, Puzon, the Sheriff, the Register of Deeds, and the trial judge in the land registration case. They sought the cancellation of the titles derived from the tax sale and the foreclosure, arguing the tax sale was void. The trial court dismissed the third-party complaint and ruled in favor of RRC, ordering the defendants to vacate and pay damages. The Court of Appeals affirmed this decision.

ISSUE

Whether the defendants’ third-party complaint, seeking the cancellation of the plaintiff’s title, constitutes a prohibited collateral attack on that title.

RULING

Yes, the third-party complaint is an impermissible collateral attack. The Supreme Court affirmed the decisions of the lower courts. The core legal principle is that a certificate of title cannot be impeached collaterally; any challenge to its validity must be done in a direct proceeding expressly instituted for that purpose. An accion reivindicatoria is an action to recover ownership and possession based on the plaintiff’s claimed title. In such a suit, the defendant’s title is attacked directly. However, when the defendant, in turn, files a third-party complaint seeking the cancellation of the plaintiff’s title, this constitutes a collateral attack on that title. The defendant is not directly seeking nullification of the title as a primary relief but is introducing it as a defense or a claim against third parties within the original recovery case. This procedural maneuver is prohibited. The proper recourse for the Sarmiento spouses was to file a separate direct action for the annulment of RRC’s title. By failing to do so and instead raising it via a third-party complaint, they engaged in a collateral attack, which is not allowed under property registration laws. Consequently, RRC’s title, being regular on its face, must be respected within the confines of the possession case.