GR 124605; (June, 1999) (Digest)
G.R. No. 124605 June 18, 1999
ENRIQUITO SERNA and AMPARO RASCA, petitioners, vs. COURT OF APPEALS, SANTIAGO FONTANILLA, and RAFAELA RASING, respondents.
FACTS
The land in dispute was originally owned by Dionisio Fontanilla. In 1938, Dionisio sold it to his daughter, Rosa Fontanilla. On August 21, 1955, Rosa sold the same land to her nephew, respondent Santiago Fontanilla, via a notarized deed of absolute sale. Respondents constructed their house on the lot and possessed it. In 1978, respondents went to the United States. Taking advantage of their absence, petitioners Enriquito and Amparo Serna (Amparo being Santiago’s first cousin) applied for and obtained original registration of the land in their names in 1979, securing Original Certificate of Title No. 139.
Upon returning, respondents discovered the fraud and filed an action for reconveyance in 1981. Petitioners claimed they bought the property in 1978 from Lorenza Fontanilla-Rasca (Amparo’s mother), who allegedly acquired it from her husband, Alberto Rasca, who purportedly redeemed it from a surveying company in 1921. However, petitioners failed to produce any deed to substantiate this alternative chain of title.
ISSUE
Whether the Court of Appeals erred in affirming the trial court’s decision declaring respondents as the absolute owners and ordering reconveyance of the subject land.
RULING
The Supreme Court denied the petition and affirmed the lower courts’ rulings. The core legal logic rests on the principle that a Torrens title does not furnish a shield for fraud. While a certificate of title is indefeasible, it can be reconveyed to the true owner when procured through fraud. Here, petitioners’ title was fraudulently obtained as they applied for registration while respondents, the rightful owners in possession, were abroad and unaware of the proceedings. This constituted extrinsic fraud.
The action for reconveyance, filed in 1981, was timely as it was within the ten-year prescriptive period from the title’s issuance in 1979. The Court upheld the factual findings of the lower courts, which found respondents’ evidence of ownership—the 1955 notarized deed of sale from Rosa, coupled with their long-term possession—more credible and conclusive than petitioners’ unsubstantiated claims. The trial court’s decision, penned by a judge who reviewed the transcripts but did not personally hear all testimony, was valid as it relied on the official records. Reconveyance was the proper remedy to correct the wrong and revert the title to the defrauded true owners, the respondents.