G.R. No. L-14321; October 20, 1961
SATURNINO MOLDERO, plaintiff-appellant, vs. RENEE J. YANDOC for herself and as Guardian of the properties of the Minors, KARINA, CORAZON, MERCEDES, FRANCISCO and BEATRIZ, all surnamed YANDOC y JURADO, defendants-appellees.

FACTS

Saturnino Moldero, a judgment creditor, purchased at a sheriff’s auction a parcel of unregistered land belonging to the judgment debtor, Arsenio Yandoc, in 1953. Moldero received a final deed of sale in August 1954 after the redemption period expired, though he had earlier agreed to extend Yandoc’s redemption period to December 1954. Crucially, during this period, a land registration proceeding for the same property was pending. Moldero did not file any claim or opposition in that registration case. Consequently, the land registration court issued Original Certificate of Title (OCT) No. 0-3 in the name of Arsenio Yandoc et al. on December 2, 1954, stating it was “free from all liens and encumbrances.”
Subsequently, the property was transferred via a deed of exchange to Renee Yandoc and her minor children, and Transfer Certificate of Title (TCT) No. T-41 was issued in their names. Moldero then sought to annotate his sheriff’s deeds of sale on the title, but the Register of Deeds refused, a position upheld by the Land Registration Commission. Moldero did not appeal this resolution. Instead, in 1957, he filed a court action against Renee Yandoc and the minors, seeking the cancellation of TCT No. T-41 and the issuance of a new title in his favor. The trial court dismissed the complaint for lack of cause of action.

ISSUE

Whether the complaint states a cause of action for reconveyance against the subsequent transferees, Renee Yandoc and her minor children.

RULING

The Supreme Court affirmed the dismissal, ruling the complaint indeed failed to state a cause of action. The legal logic hinges on the incontrovertibility of a decree of registration and the protection afforded to innocent purchasers for value. Under the Land Registration Act ( Act No. 496 ), a decree becomes incontrovertible one year after its entry. Moldero’s failure to assert his claim during the registration proceedings or to file a petition for review within one year from the decree’s issuance (December 1954) rendered OCT No. 0-3 final and beyond attack. His subsequent action, filed in 1957, was therefore time-barred from challenging the decree itself.
Furthermore, the Court clarified the proper party for an action for reconveyance. While such an action, based on equity, survives the one-year period, it can only be maintained against the person in whose name the land was originally wrongfully registered—in this case, Arsenio Yandoc. It cannot be pursued against subsequent transferees who are innocent purchasers for value. The complaint was filed against Renee Yandoc and the minors, who derived their title from the clean OCT. In the absence of evidence to the contrary, they are presumed to be innocent third parties. Since the property had passed into their hands, Moldero’s remedy, if any, was an action for damages against the original registrant, not reconveyance against the current holders of a clean title.