G.R. No. 120004 December 27, 2002
Iluminada de Guzman, petitioner, vs. Court of Appeals and Jorge Esguerra, respondents.

FACTS

On December 12, 1989, private respondent Jorge Esguerra filed a complaint praying for the declaration of nullity of a Free Patent in the name of petitioner Iluminada de Guzman. Esguerra alleged he is the owner of Lot 3308-B covered by TCT No. T-1685-P (M) and discovered in 1989 that the land was being offered for sale by de Guzman. He found that Felisa Maningas was issued Free Patent No. 575674, now in de Guzman’s name, over a parcel of land described in Psu-216349. Esguerra demanded that the portion of his property encroached upon be excluded, but de Guzman refused. De Guzman claimed she is the lawful owner, having bought the land from Felisa Maningas in 1965 while the free patent application was pending, and has been in possession publicly, peacefully, continuously, and adversely as owner for over fifteen years. She also alleged that only the government can question the validity of the free patent grant. A relocation survey ordered by the trial court revealed that 38,461 square meters of Esguerra’s Lot 3308-B overlapped de Guzman’s PSU-216349. The trial court dismissed the complaint, giving recognition to the earlier survey of de Guzman’s property (January 23, 1965) over Esguerra’s later survey (February 15-16, 1965) and holding that Esguerra had no right to bring an action to annul the free patent, as this can only be done by the government. The Court of Appeals reversed the trial court, declaring de Guzman’s OCT No. P-3876 null and void insofar as the disputed area, ordering its segregation, and directing de Guzman to vacate and surrender possession to Esguerra, among other reliefs. The appellate court ruled that the trial court erred in deciding based on priority of survey, applying the principle that in cases of overlapping titles, the earlier certificate of title must prevail.

ISSUE

The primary issue is whether the Court of Appeals erred in reversing the trial court’s dismissal of the complaint and in declaring de Guzman’s title null and void over the overlapping area, despite de Guzman’s claim of prior possession and the trial court’s finding that the action for annulment of the free patent could only be brought by the government.

RULING

The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. The Court clarified that Esguerra’s action was in reality an action for reconveyance, not reversion. An action for reconveyance respects the decree of registration as incontrovertible but seeks the transfer of property wrongfully registered in another’s name to its rightful owner. In contrast, reversion seeks to revert land to the government and must be filed by the Solicitor General. The Court found that Esguerra’s Torrens title was issued earlier (on April 17, 1970) than de Guzman’s free patent title (issued on July 13, 1970). Applying the settled rule that in case of two certificates of title covering the same land, the earlier in date must prevail, Esguerra’s title has superior right. The Court also held that de Guzman’s claim of possession for thirty years could not prevail over a Torrens title, as such possession may have given rise to a grant by the government but the grant itself is evidenced by the patent and title. Since Esguerra’s title was issued first, it prevails. The Court further ruled that the defense of prescription could not be invoked against Esguerra because an action for reconveyance based on an implied or constructive trust prescribes in ten years from the issuance of the title, which in this case was 1970, and the complaint was filed in 1989, within the prescriptive period.