G.R. No. 172611 ; July 9, 2010
SPS. FEDERICO VALENZUELA and LUZ BUENA-VALENZUELA, Petitioners, vs. SPS. JOSE MANO, JR. and ROSANNA REYES-MANO, Respondents.

FACTS

Petitioners are the heirs of Andres Valenzuela, who owned a 938-square meter residential lot in Pulilan, Bulacan, declared under his name. Upon Andres’s death, his son Federico inherited and possessed the property. In 1991, respondent Jose Mano, Jr. purchased a 2,056-square meter lot from Feliciano Geronimo via a Deed of Conditional Sale. Jose subsequently applied for a free patent, and Original Certificate of Title (OCT) No. P-351 was issued in his name in 1992, but covering an increased area of 2,739 square meters. Later, Jose sold a portion, leaving TCT No. T-112864 for himself covering 447 square meters.
The 447-square meter portion under Jose’s TCT overlapped with the property inherited by Federico from his father. In 1999, when Federico attempted to fence his property, Jose prevented him, asserting ownership based on his Torrens title. This prompted petitioners to file a complaint for Annulment of Title and/or Reconveyance before the Regional Trial Court (RTC). The RTC ruled in favor of the petitioners, ordering the cancellation of Jose’s title and the return of the disputed land.

ISSUE

The core issues are: (1) Whether the Court of Appeals erred in reversing the RTC and upholding respondents’ ownership based on their certificate of title; and (2) Whether fraud attended the issuance of the title to the disputed portion.

RULING

The Supreme Court reversed the Court of Appeals and reinstated the RTC decision, ruling in favor of the petitioners. The legal logic centers on the principle that a Torrens title is not indefeasible if it was acquired through fraud or covers land erroneously or illegally included. The Court found that Jose Mano, Jr. committed fraud in securing the free patent and title. The evidence showed he purchased only 2,056 square meters but applied for a patent over 2,739 square meters, misrepresenting the land as public and unoccupied. This illegally encompassed the 447-square meter portion already owned and possessed by Federico through inheritance.
The Court held that the conclusive presumption of a Torrens title does not apply when the inclusion is fraudulent. Since the disputed portion was part of the property long owned by Andres Valenzuela and inherited by Federico, it could not be validly registered under Jose’s name. The proper remedy was reconveyance. The Court emphasized that ownership is not solely determined by a certificate of title; prior possession and evidence of rightful acquisition can overcome a title procured by fraud. Thus, petitioners successfully proved their superior right to the property, warranting the annulment of the respondent’s title over the overlapping portion.