G.R. No. 205867 , February 23, 2015
MARIFLOR T. HORTIZUELA, represented by JOVIER TAGUFA, Petitioner, vs. GREGORIA TAGUFA, ROBERTO TAGUFA and ROGELIO LUMABAN, Respondents.

FACTS

Petitioner Mariflor T. Hortizuela, represented by Jovier Tagufa, filed a complaint for Reconveyance and Recovery of Possession with Damages against respondents before the Municipal Circuit Trial Court (MCTC). The subject property is a parcel of land originally owned by Hortizuela’s parents, who mortgaged it to the Development Bank of the Philippines (DBP). After foreclosure, DBP sold the property to Atty. Romulo Marquez, who then sold it to Runsted Tagufa (husband of respondent Gregoria Tagufa) on April 4, 2002, using funds sent by Hortizuela from America. The agreement was that Runsted would reconvey the property to Hortizuela upon demand. However, Hortizuela later discovered that the unregistered property had been titled in the name of Gregoria Tagufa under OCT No. P-84609 through a free patent application and a Deed of Extrajudicial Settlement of the Estate of the late Spouses Leandro Tagufa and Remedios Talosig, wherein Gregoria, a granddaughter-in-law, was made to appear as an heir. The MCTC dismissed the complaint, ruling it was a wrong cause of action. The Regional Trial Court (RTC) reversed the MCTC, ordering reconveyance, recovery of possession, and damages. The Court of Appeals (CA) reversed the RTC, holding that the action constituted a proscribed collateral attack on a Torrens title under Section 48 of P.D. No. 1529.

ISSUE

Whether or not an action for reconveyance and recovery of possession constitutes an indirect or collateral attack on the validity of the subject certificate of title which is proscribed by law.

RULING

No. The Supreme Court granted the petition, reversing the CA decision. The Court ruled that an action for reconveyance is a recognized remedy, an action in personam, available to a person whose property has been wrongfully registered under the Torrens system in another’s name. It is not a collateral attack on the title. In such an action, the decree of registration is respected as incontrovertible and is not questioned; the goal is to transfer or reconvey the land from the registered owner to the rightful owner. Reconveyance is available as long as the property has not passed to an innocent third person for value. The Court found that the MCTC was convinced fraud attended the registration but erroneously concluded reconveyance was not the proper remedy. The complaint sought not the nullification of the title but the reconveyance of the property, which Gregoria was holding in trust for Hortizuela as the real owner. Therefore, the action was proper and did not constitute a collateral attack.