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LAND TITLES AND DEEDS:

POSITION PAPER
Atty. Senen de Santos

By: Christopher M. Alcantara


MAGCASE v. AZUCENA
FACTS:
This is a case that involves a an action declaring the nullity of a Deed
of Donation and subsequently, the cancellation of a Transfer Certificate of
Title after the determination of the validity of the Deed of Donation.
In the case, the late Marino M. Magcase, herein after will be referred
to as the decedent, is one who has remained single all throughout his life

with no known offsprings that may or could have possibly survived him. He,
however, was survived by his sister and his nieces and nephews. Since
Marino was a successful business man, he acquired numerous properties
all throughout his life from jewelries, properties and shares of stock in a
multiple businesses.
The decedent died and without issue on October 9, 2008 while he
was in the care of Ambrose M. Azucena, herein defendant and the nephew
of the decedent, and Guadalupe M. Azucena, the sole surviving sibling go
the decedent. They took care of the decedent from the he suffered a stroke
up until his death. All were provided by Ambrose and his mother especially
utmost care, attention and love. All of the relatives of the decedent were
welcome when it comes to visiting him, however at times were not allowed
due to the decedents sorry state.
On February 14, 2008, the decedent executed the Deed of Donation
Inter vivos whereby he donated his Bel-Air Property in favor of Ambrose. A
copy of the Deed of Donation was executed. The execution was witnessed
by decedents three (3) friends. Judge Bienvenido V. Reyes prepared and
notarized the Deed of Donation inter vivos. The title of the Bel-Air property
covered by TCT No. 113638 was thereafter transferred to Ambrose. The
Registry of Deeds of the City of Makati then issued TCT No. 225884 in
2009.
During the intestate proceedings, the Plaintiffs have just found out
that subject property was donated to herein defendant because it was
excluded in the inventory. They subsequently filed an action to revoke the
Deed of Donation inter vivos because it was acquired through fraudulent
means and the determination of thereof would also effectively nullify the
Transfer Certificate of Title of the defendant.
The defendants contend that the action to revoke the title has been
filed out of time because a title becomes incontrovertible and indefeasible
after the lapse of one (1) year after judgment and also said title cannot be
subject to a collateral act in the instance that it should be cancelled. Its
cancellation should be done in a direct proceeding.
ISSUES:
1.) Whether or not the complaint of the plaintiffs is barred from filing the
claim due to the setting in of the one (1) year prescriptive period?

2.) Whether or not the action of the plaintiffs was a collateral attack on the
Title?
DISCUSSION: The discussion is based primarily on the application of
Section 32 and 48 of P.D. 1529 otherwise known as the Property
Registration Decree which provides:
Section 32. Review of decree of registration; Innocent
purchaser for value. - The decree of registration shall not be
reopened or revised by reason of absence, minority, or other
disability of any person adversely affected thereby, nor by any
proceeding in any court for reversing judgments, subject,
however, to the right of any person, including the government
and the branches thereof, deprived of land or of any estate or
interest therein by such adjudication or confirmation of title
obtained by actual fraud, to file in the proper Court of First
Instance a petition for reopening and review of the decree of
registration not later than one year from and after the date of
the entry of such decree of registration, but in no case shall
such petition be entertained by the court where an innocent
purchaser for value has acquired the land or an interest therein,
whose rights may be prejudiced. Whenever the phrase
"innocent purchaser for value" or an equivalent phrase occurs
in this Decree, it shall be deemed to include an innocent lessee,
mortgagee, or other encumbrancer for value.
Upon the expiration of said period of one year, the decree
of registration and the certificate of title issued shall become
incontrovertible. Any person aggrieved by such decree of
registration in any case may pursue his remedy by action for
damages against the applicant or any other persons
responsible for the fraud.1
and
Section 48. Certificate not subject to collateral attack. - A
certificate of title shall not be subject to collateral attack. It
1 AMENDING AND CODIFYING THE LAWS RELATIVE TO REGISTRATION OF PROPERTY AND FOR
OTHER PURPOSES, [PROPERTY REGISTRATION DECREE]], P.D. 1529, Sec. 32 (1978).

cannot be altered, modified, or canceled except in a direct


proceeding in accordance with law.2
PLAINTIFFS:
In the instant case, the Plaintiffs attacked the validity of the Deed of
Donation as it was made through fraudulent acts. Plaintiffs contend that
during the moment of perfection of the Deed of Donation, the decedent was
not capacitated as he was of unsound mind due to the mental and physical
deterioration of his body towards the end of his life. The relevance of
proving that there was fraud in the perfection Deed of Donation inter vivos
is that would make the mode of acquiring ownership of the subject lot as
void and any contracts or titles arising from it would also be void.
On the first issue, Sec. 32 of P.D. 1529 states that after one (1) year
after the issuance of the decree, no petition for reopening and review can
be availed of as the title has become incontrovertible and indefeasible. 3
In the case of Antonio v. Santos, the Supreme Court ruled that
reconveyance or annulment of title resulting from fraud prescribes in four
(4) years.4 In the case it stated the prescriptive period:
Note, however, should be taken of the established
doctrine that an action for reconveyance resulting from fraud
prescribes four years from the discovery of the fraud. Such
discovery is deemed to have taken place upon the issuance of
the certificate of title over the property. Registration of real
property is considered a constructive notice to all persons, thus,
the four-year period shall be counted therefrom. 5
Since the the filing of the petition was only three (3) years in from the
registration of the title which is where the constructive notice started,
therefore the Plaintiffs cannot be barred from filing the herein petition of
cancellation.
2 PROPERTY REGISTRATION DECREE, Sec. 48.
3 PROPERTY REGISTRATION DECREE, Sec. 32.
4 Antonio v. Santos, 538 SCRA 1, (2007).
5 Id.

However, if it would be founded that the donation is void ab initio


because lack of capacity as an essential requisite of donation, then the
cause of action does not prescribe as held in the case of Borja v. Bautista:
Thus, if the trial court finds that the deed of sale is void,
then the action for the declaration of the contracts nullity is
imprescriptible. Indeed, the Court has held in a number of
cases that an action for reconveyance of property based on a
void contract does not prescribe. However, if the trial court finds
that the deed of sale is merely voidable, then the action would
have already prescribed.6
On the second issue, Sec. 48 of P.D. 1529 is clear that a certificate of
title cannot be subjected to collateral attacks as stated in Taparuc v.
Loquellano vda de Mende:
A Torrens title cannot be collaterally attacked. The
question on the validity of a Torrens title, whether fraudulently
issued or not, can be raised only in an action expressly
instituted for that purpose. The title represented by the
certificate cannot be changed, altered, modified, enlarged,
diminished, or cancelled in a collateral proceeding. The action
for the declaration of nullity of deed of sale commenced by the
petitioners in the RTC of Tagbilaran City is not the direct
proceeding required by law to attack a Torrens certificate of
title.7
However, such is only limited to when the source of the title or when
the mode of conveyance thereof is valid and without any material defect.
The Supreme Court ruled in De Guzman v. Agbala:
The principle of indefeasibility does not apply when the
patent and the title based thereon are null and void. An action
to declare the nullity of a void title does not prescribe and is
susceptible to direct, as well as to collateral attack. OCT No. P30187 was registered on the basis of a free patent which the
6 Borja v. Bautista, G.R. No. 136197 (2008).
7 Taparuc v. Loquellano vda de Mende, 512 SCRA 97, (2007).

RTC ruled was issued by the Director of Lands without


authority.The petitioners falsely claimed that the land was public
land when in fact it was not as it was private land previously
owned by Carmen who inherited it from her parents. 8
In the above mentioned case, the source of the title was a free patent
but is one that is void ab initio, therefore the subsequent title that was
issued due to said free patent is also void. 9 The settled rule is that a free
patent issued over a private land is null and void, and produces no legal
effects whatsoever.
Applying it the case at bar, the Deed of Donation which is the mode of
conveyance of the decedent to Ambrose Azucena, was never perfected to
begin with since the decedent lack the capacity to contract the said
donation because at the moment of the perfection of the donation, he was
not of sound mind. Therefore such conveyance was void due to the lack of
capacity of the decedent which was carried out through fraud. The
subsequent transfer certificate of title is also void because the previous
donation inter vivos produces no legal effect. With that
Furthermore, in Sampaco v. Lantud, the Supreme Court ruled that
the indefeasibility of title does not attach to titles secured by fraud and
misrepresentation.10 In another case, Ermac v. Ermac, it was ruled:
While it is true that Section 32 of PD 1529 provides that
the decree of registration becomes incontrovertible after a year,
it does not altogether deprive an aggrieved party of a remedy in
law. The acceptability of the Torrens System would be impaired,
if it is utilized to perpetuate fraud against the real owners.
Furthermore, ownership is not the same as a certificate
of title. Registering a piece of land under the Torrens System
does not create or vest title, because registration is not a mode
of acquiring ownership. A certificate of title is merely an
evidence of ownership or title over the particular property
8 De Guzman v. Agbagala, 546 SCRA 278, (2008).
9 Id.
10 Sampaco v. Lantud, G.R. No. 163551, (2011).

described therein. Its issuance in favor of a particular person


does not foreclose the possibility that the real property may be
co-owned with persons not named in the certificate, or that it
may be held in trust for another person by the registered
owner.11
Even though the Torrens System of Land Registration is to quiet title
to land and stop forever any questions of its legality 12, however,
jurisprudence would reiterate that despite such characteristics, it does not
mean that it closes all remedies against it especially when a material party
is aggrieved. The plaintiffs who are asking for the revocation of the
donation and the transfer certificate of title, once granted, would effectively
have the property returned and included again in the intestate proceedings
so the other heirs could also get their share of the subject property as they
would also be the owners by operation of law.13
What the plaintiffs are attacking in the case at bar is the Deed of
Donation or the manner of conveyance itself and the revocation of the
transfer certificate of title would also be subsequently cancelled logically
speaking. Assuming arguendo, at it would indeed be a collateral attack, the
court will still be unable to dismiss the said case on such grounds because
as again stated in De Guzman v. Agbagala:
The principle of indefeasibility does not apply when the
patent and the title based thereon are null and void. action to
declare the nullity of a void title does not prescribe and is
susceptible to direct, as well as to a collateral attack. 14
DEFENDANTS:
On the first issue, it can clearly be made out that the action is barred
by prescription because upon the expiration of the one (1) year period
provided in Section 32 of P.D. 1529 the decree of registration and the
11 Ermac v. Ermac, G.R. No. 149679, (2004).
12 NARCISO M. AGUILAR, LAND TITLES AND DEEDS, 47 (1st Ed. 2005).
13 AN ACT TO ORDAIN AND INSTITUTE THE CIVIL CODE OF THE PHILIPPINES [ THE NEW CIVIL
CODE], Republic Act No. 386, art. 774, (1977).

14 De Guzman, supra.

certificate of title issued shall become incontrovertible. 15 In a case, the


Supreme Court stated that the decree of registration or patent and the
certificate of title issued pursuant thereto may be attacked on the ground of
falsification or fraud within one year from the date of their issuance. 16
In the case at bar, the plaintiffs alleged that the transfer certificate of
title that was issued to Ambrose Azucena was believed to be made through
fraudulent acts. Assuming arguendo, that they indeed have done acts to
defraud the decedent into signing the deed of donations while he was
incapacitated, the law and jurisprudence states that if an action to attack
the validity of the certificate of title on the ground of fraud were to be made,
it should be done within one (1) year from the date of issuance.
Apparently, the plaintiffs waited three (3) after the issuance of the
decree and its subsequent incontrovertibility to file an action. Therefore,
they are already barred by prescription. The plaintiffs could also not claim
that they were not notified because registration of title constitutes as
constructive notice to plaintiffs. In the case of Crisostomo v. Crisostomo,
the Supreme Court held that the rule is that it is the act of registration that
operates to convey registered land or affect title- registration in a public
registry creates constructive notice to the whole world. 17 In another case,
the Supreme Court adhered to the one (1) prescriptive period despite the
fact that the petition was a direct attack, it stated:
Based on the foregoing, the Court holds that petitioners
counterclaim for cancellation of respondents title is not a
collateral attack, but a direct attack on the Torrens title of
petitioner. However, the counterclaim seeking for the
cancellation of title and reconveyance of the subject property
has prescribed as petitioner has not proven actual possession
and ownership of the property due to his failure to prove the
identity of his larger property that would show that the disputed
property is a part thereof, and his claim of title to the subject
property by virtue of open, public and continuous possession in
15 Property Registration Decree, Sec. 32.
16 De Guzman, supra.
17 Crisostomo v. Crisostomo, G.R. No. 164787 (2006)

the concept of owner is nebulous in the light of a similar claim


by respondent who holds a Torrens title to the subject property.
On the second issue, the revocation of the deed of donation, though
is the primary issue of the petition, however, through the judgment of its
validity, the court will also have to rule on the validity of the transfer
certificate of title as an incident thereof. Clearly this is violative of Sec. 48 of
P.D. 1529 that clearly states:
Section 48. Certificate not subject to collateral attack. - A
certificate of title shall not be subject to collateral attack. It
cannot be altered, modified, or canceled except in a direct
proceeding in accordance with law.18
Again, in De Guzman v. Agbagala, the Supreme Court held:
A decree of registration or patent and the certificate of title
issued pursuant thereto may be attacked on the ground of
falsification or fraud within one year from the date of their
issuance. Such an attack must be direct and not by a collateral
proceeding. The rationale is this:
xxx [The] public should be able to rely on a registered
title. The Torrens System was adopted in this country
because it was believed to be the most effective measure
to guarantee the integrity of land titles and to protect their
indefeasibility once the claim of ownership is established
and recognized.
An action is deemed an attack on a title when the object of the
action or proceeding is to nullify the title and thus challenge the
judgment pursuant to which the title was decreed. The attack is
direct when the object of the action is to annul or set aside such
judgment, or enjoin its enforcement. On the other hand, the
attack is indirect or collateral when, in an action to obtain a
different relief, an attack on the judgment is nevertheless made
as an incident thereof.19
18 PROPERTY REGISTRATION DECREE, Sec. 48.
19 De Guzman, supra.

In the instant case, the plaintiffs primary action is to nullify the deed of
donation of the decedent to the herein defendant, however, the judgment
on the former issue will also bring an attack on the judgment on the validity
of the transfer certificate of title of the defendant. An above-mentioned
case, Taparuc v. Loquellano vda de Mende, the Supreme Court ruled
that:
A Torrens title cannot be collaterally attacked. The question on
the validity of a Torrens title, whether fraudulently issued or not,
can be raised only in an action expressly instituted for that
purpose. The title represented by the certificate cannot be
changed, altered, modified, enlarged, diminished, or cancelled
in a collateral proceeding. The action for the declaration of
nullity of deed of sale commenced by the petitioners in the RTC
of Tagbilaran City is not the direct proceeding required by law to
attack a Torrens certificate of title.20
CONCLUSION:
In consideration of the arguments presented above in defending and
subsequently exploiting both sides, I am inclined to favor the side of the
defendants in terms of consistency to the law without being subjected to
speculations of factual antecedents that has not yet been determined by
the trial court.
The side of the Plaintiffs in terms of the appreciation of their
arguments are heavily reliant on the finding of fraud in the making of the
Deed of Donation. That it creates a heavy imposition whether or not to
apply the various case law that would allow a collateral attack on the
transfer certificate of title of the herein defendant.
On the other hand, the defendants are much more consistent with the
application of the law, particularly Sec. 32 and 48 of the Property
Registration Decree. Just basing on the facts, you could plainly ascertain
that a.) the plaintiffs are barred from filing an action for fraud on the title of
Ambrose Azucena; and b.) the attack on the validity of the title of Ambrose
Azucena is an incident to the action of the cancellation of the Deed of
Donation. P.D. 1529 and case law clearly prohibits such actions. The nonappliance of the following would render the Torrens System useless in its
20 Taparuc, supra.

purpose as it is suppose to quiet title and to stop forever all questions


regarding its validity.
Therefore, based on the foregoing facts and arguments, I will dismiss
the instant case.