G.R. No. 118436 March 21, 1997
HEIRS OF MANUEL A. ROXAS and TRINIDAD DE LEON VDA. DE ROXAS, petitioners, vs. COURT OF APPEALS and MAGUESUN MANAGEMENT & DEVELOPMENT CORPORATION, respondents.

FACTS

Private respondent Maguesun Management and Development Corporation filed an application for registration of two parcels of land in Tagaytay City. It supported its application with a Deed of Absolute Sale dated June 10, 1990, executed by Zenaida Melliza, who allegedly purchased the property from petitioner Trinidad de Leon Vda. de Roxas. The Land Registration Authority sent notices of the initial hearing to persons named in Maguesun’s application. Since Vda. de Roxas was not listed as an adjoining owner, occupant, or adverse claimant, she received no notice. An order of general default was issued, and the trial court granted Maguesun’s application.
Petitioner Vda. de Roxas learned of the sale and registration only when her caretaker was asked to vacate. She filed a petition to set aside the decree, alleging actual fraud. She denied selling the property to Melliza, claimed her signatures on the deed of sale and an affidavit of self-adjudication were forged, and asserted her family’s long-standing possession. Crucially, she alleged Maguesun intentionally omitted her name from the application to prevent her from receiving notice and opposing the registration. She noted that Maguesun’s president, Manolita Guevarra Sunatay, was her niece who was familiar with her affairs.

ISSUE

Whether private respondent Maguesun Corporation committed actual fraud in obtaining the decree of registration, warranting its review or reopening.

RULING

Yes, the Supreme Court found that actual fraud was committed. The legal logic centers on the nature of fraud sufficient to reopen a decree under the Torrens system. Actual fraud involves a deliberate misrepresentation or concealment of a material fact to deceive another. The Court ruled that Maguesun’s failure to list Vda. de Roxas as an occupant or adverse claimant in its application, despite knowing her claim of ownership and possession, constituted such fraud. This intentional omission deprived her of the notice required by law, preventing her from appearing and contesting the application. The familial relationship between Vda. de Roxas and Maguesun’s president supported the finding of knowledge and intent. Since actual fraud is a valid ground for reviewing a decree, and it was proven that the omission was willful and material, the decree of registration was set aside. The Court emphasized that the Torrens system cannot protect a title procured through fraud.