G.R. No. L-24864. May 30, 1996. FORTUNATO HALILI, ET AL., petitioners, vs. COURT OF INDUSTRIAL RELATIONS AND HALILI BUS DRIVERS AND CONDUCTORS UNION (PTGWO), respondents.
FACTS

The case originated from a 1958 complaint for unpaid overtime pay filed by the Halili Bus Drivers and Conductors Union (PTGWO) against Fortunato Halili before the defunct Court of Industrial Relations. After Halili’s death, the Union and the Administratrix of his estate entered into a 1974 Agreement to settle the claims. The estate agreed to transfer a parcel of land in Caloocan and pay P25,000.00 to the Union in full satisfaction of all claims. The Union, in turn, agreed to dismiss the case and execute a release and quitclaim. Pursuant to this, a Deed of Conveyance was executed in 1975, and the land was registered in the Union’s name under TCT No. 205755.
Subsequently, the Union, through its counsel, sought and obtained authority from the Ministry of Labor to sell the property. It then sold the land to Manila Memorial Park Cemetery, Inc. (MMPCI), which developed it into the Holy Cross Memorial Park. Later, some heirs of Fortunato Halili filed a petition seeking to annul the sale and reclaim the land, arguing the Union had no authority to sell and that the original conveyance was intended for the benefit of individual union members, not the Union itself.

ISSUE

Whether the heirs of Fortunato Halili can successfully challenge the Union’s sale of the subject property to MMPCI and reclaim ownership thereof.

RULING

The Supreme Court dismissed the petition, ruling against the heirs. The legal logic is anchored on the principles of res judicata, the indefeasibility of a Torrens title, and the protection of innocent purchasers for value. First, the 1974 Agreement, which was approved by the Court of First Instance overseeing the estate proceedings, constituted a final and executory judgment on the merits. The conveyance of the land was the agreed-upon settlement for the money claims, thereby vesting full ownership in the Union. The heirs’ attempt to re-litigate the nature of this conveyance is barred by res judicata.
Second, the Union’s Torrens Certificate of Title (TCT No. 205755) is conclusive and indefeasible. A collateral attack on its validity, such as through the instant petition questioning the Union’s authority or the nature of its ownership, is impermissible. Any challenge to the title on grounds of fraud must be made in a direct action expressly instituted for that purpose.
Finally, and decisively, MMPCI and the subsequent individual lot buyers are innocent purchasers for value. The land has been fully developed into a memorial park, with lots sold and remains interred. The law protects these third parties who relied in good faith on the Union’s valid certificate of title. To cancel the title and undo the sales would severely impair public confidence in the Torrens system. Thus, the Union, as the registered owner, had the absolute right to dispose of the property, and the transaction with MMPCI stands.