G.R. No. 115508 February 15, 2000
ALEJANDRO AGASEN and FORTUNATA CALONGE-AGASEN, petitioners, vs. THE HON. COURT OF APPEALS and PETRA BILOG, assisted by her husband FELIPE BILOG, respondents.

FACTS

Petitioner spouses Alejandro and Fortunata Agasen were sued for Recovery of Possession and Ownership by respondent Petra Bilog over an 8,474-square meter parcel of land registered under her name. Bilog alleged the Agasens took possession in 1964/1965 and refused to vacate. The Agasens countered that they acquired the land through two sales: a 1968 notarized “Partition with Sale” directly from Bilog for 6,717.50 square meters, and a prior sale from Leonora Calonge (Fortunata’s sister) for 1,785 square meters. They asserted they had built a house and possessed the land since the transactions. They also filed a compulsory counterclaim, alleging Bilog fraudulently obtained her Transfer Certificate of Title (TCT) and sought its annulment. The Regional Trial Court ruled for the Agasens, declaring Bilog’s title null and void. The Court of Appeals reversed, declaring Bilog the absolute owner and ordering the Agasens to vacate.

ISSUE

Whether the Court of Appeals erred in invalidating the notarized deeds of sale presented by the Agasens and in upholding the indefeasibility of Bilog’s Torrens title against the Agasens’ counterclaim.

RULING

The Supreme Court granted the petition and reinstated the RTC decision. The legal logic centered on the evidentiary weight of notarized documents and the proper mode of attacking a title. First, the Agasens’ Deed of Partition with Sale and Deed of Absolute Sale are notarized public documents enjoying the presumption of authenticity and due execution. Bilog failed to overcome this presumption with preponderant evidence. Critically, she did not specifically deny under oath the genuineness of these documents as required by the Rules of Court for a counterclaim, which is treated as an independent complaint. Her mere testimonial denial was insufficient. Second, the Court of Appeals erred in applying the rule on indefeasibility of a Torrens title. The one-year period for attacking a title on grounds of fraud applies only to original registration decrees, not to subsequent titles like Bilog’s. The Agasens’ action for annulment and/or reconveyance—initiated in a prior dismissed case and properly interposed as a compulsory counterclaim here—is a direct, not collateral, attack permitted to prove the title was fraudulently acquired. Therefore, the Agasens’ valid documentary evidence of purchase prevailed over Bilog’s registered title, which was secured in breach of their ownership rights.