GR 150844; (August, 2008) (Digest)
G.R. No. 150844 ; August 20, 2008
CEFERINO T. ADVIENTO, petitioner, vs. HEIRS OF MIGUEL ALVAREZ, et al., and LYDIA GAYA, respondents.
FACTS
Miguel Alvarez filed a complaint for reconveyance against Lydia Gaya, alleging continuous, exclusive, and notorious possession of a 228-square-meter lot in Naga City. He claimed Gaya fraudulently obtained Original Certificate of Title (OCT) No. 338 over the land by initiating cadastral proceedings without notifying him, the lawful occupant. Gaya countered that she had been in possession since 1936, acquired an imperfect title confirmed by the Cadastral Court, and that her title, having been registered, had become indefeasible. During trial, the parties stipulated that the land was part of the area covered by Gaya’s OCT. Miguel Alvarez died and was substituted by his heirs. Petitioner Ceferino Adviento intervened, tracing his title to a subsequent buyer from Gaya, Fidel Cu, and adopted Gaya’s defenses.
ISSUE
The core issue was whether an action for reconveyance based on fraud could prosper despite the existence of a registered title in the name of Lydia Gaya and her successors-in-interest.
RULING
The Supreme Court denied the petition and affirmed the lower courts’ decisions ordering the annulment of the titles in so far as they covered the disputed 228-square-meter lot in favor of the heirs of Alvarez. The legal logic centered on the imprescriptibility of an action for reconveyance based on a void decree. The Court held that a decree of registration procured by fraud is void ab initio and does not become incontrovertible. Since Alvarez’s complaint alleged that Gaya willfully failed to notify him of the cadastral proceedings, constituting fraud in obtaining the decree, the one-year period for review of the decree under the Land Registration Act did not apply. An action to quiet title, which is essentially what reconveyance is in this context, does not prescribe when the plaintiff is in possession of the property.
The Court further ruled that petitioner Adviento, as a subsequent purchaser, could not be considered a purchaser in good faith. A transferee of a property covered by a void certificate of title acquires no valid title. Moreover, Adviento was bound by the findings of fraud against his predecessor, Gaya. His intervention did not cleanse the title of its inherent defect. The judicial admission regarding the existence of Gaya’s title during pre-trial did not bar the action, as the admission pertained to the fact of registration, not its validity, which was precisely the subject of the suit. The award of attorney’s fees was sustained due to the fraudulent acts that compelled the heirs to litigate.