July 30, 1976
Ponente: Antonio, J.
FACTS:
Defendant Guillermo Timbancaya appeals directly and on purely questions of law the decision of Palawan CFI. The trial court ruled that the property, subject of plaintiff’s action for reconveyance and by virtue of a compromise agreement and judgment in Special Proceedings No. 211, was owned jointly one-half thereof by Caridad Arguelles and the other half by Guillermo and Alberto Timbancaya.
During the special proceedings for Intestate Estate of Jose Arguelles, the court rendered a decision, in conformity with a compromise agreement, adjudicating one half of the land to Arguelles and the other half to the Timbancaya’s. It also ordered both parties to pay for the coconut trees planted in their respective portions of the land, which they relinquish in favor of the other.
Contrary to the agreement and judgment in the special proceedings however, Timbancaya was able to have the original certificate of title cancelled and have a new CT issued in his favor covering the whole land (June 5, 1961), despite Arguelles’ actual open and continuous possession of one half of the property even before the filing of the special proceedings.
Upon knowing the issuance of the TCT, Arguelles filed the instant case for reconveyance (April 30, 1965). Timbancaya, for his part, alleges that Arguelles has no right to the property in question because she is not an heir of the estate of the late Jose Arguelles despite the decision in the special proceedings.
RULING:
Whether or not TCT had already become indefeasible, since almost four years have lapsed before action was filed. - NO.
The rule that a decree of registration once issued becomes final and incontrovertible 1 year after its issuance is not relevant to the case at bar.
Arguelles does not question the validity of the OCT but instead seeks the annulment of the TCT, which was issued to Timbancaya after the judgment by compromise and based on his misrepresentation in the Register of Deeds. Timbancaya had claimed that he and his brother are the exclusive owners of the property as the “only legitimate children and surviving heirs of (their) parents Jose Arguelles and Rufina de los Reyes”—a representation contrary to his previous admissions that “they are not the legitimate children of the deceased Spouses Jose Arguelles and Rufina de los Reyes, but the sons of Rufina de los Reyes with her first husband, Joaquin Timbancaya.”
In this case, the action to annul the title or action for reconveyance has its basis in Section 55 of Act 496, which provides that “in all cases of registration procured by fraud the owner may pursue all his legal and equitable remedies against the parties to such fraud, without prejudice, however, to the rights of any innocent holder for value of a certificate of title.”
This remedy is distinct from that authorized by Section 38, which has for its purpose the reopening of the decree of title, on the ground of fraud, within 1 year from its issuance. Judgment appealed from affirmed.
The rule on the incontrovertible nature of a certificate of title applies when what is involved is the validity of the OCT, not when it concerns that of the TCT.
Public policy demands that a person guilty of fraud or at least, of breach of trust, should not be allowed to use a Torrens title as a shield against the consequences of his own wrong doing.
