SECOND DIVISION

[G.R. No. 211958. March 14, 2018.]

HEIRS OF ILDEFONSO LOYOLA, NAMELY: IDES LOYOLA, ILDEFONSO

LOYOLA, JR., HEIRS OF IRMA LOYOLA GARCIA, ISAGANI LOYOLA,
IRENE LOYOLA-MACAALAY AND IRNIE LOYOLA , petitioners, vs.
SPOUSES ISIDRO L. NAVEA AND LYDIA R. NAVEA , respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Second Division, issued a Resolution dated 14
March 2018 which reads as follows: HTcADC

"G.R. No. 211958 (Heirs of Ildefonso Loyola, namely: Ides Loyola,

Ildefonso Loyola, Jr., Heirs of Irma Loyola Garcia, Isagani Loyola, Irene
Loyola-Macaalay and Irnie Loyola vs. Spouses Isidro L. Navea and Lydia R.
Navea). — Before the Court is a petition for review 1 led by the Heirs of Ildefonso
Loyola (Ildefonso), namely: Ides Loyola (Ides), Ildefonso Loyola, Jr. (Ildefonso, Jr.),
Heirs of Irma Loyola Garcia (Irma), Isagani Loyola (Isagani), Irene Loyola-Macaalay
(Irene), and Irnie Loyola (Irnie) (hereinafter referred to as petitioners) under Rule 45 of
the 1997 Rules of Civil Procedure seeking to annul and set aside the Decision 2 dated
July 10, 2013 of the Court of Appeals (CA) in CA-G.R. CV No. 95457, and its Resolution
3 dated January 21, 2014, denying the motion for reconsideration thereof. The assailed
decision granted the appeal filed by Spouses Isidro L. Navea (Isidro) and Lydia R. Navea
(hereinafter referred to as respondent spouses) and accordingly reversed and set aside
the Decision 4 dated February 17, 2010 of the Regional Trial Court (RTC) of Masbate
City, Branch 46, in Civil Case No. 5341.
The antecedent facts follow:
The subject of the instant controversy is a parcel of land containing an area of
3.9394 hectares more or less, and owned by Isidro Loyola per Tax Declaration No.
8669. Following the death of Isidro Loyola, his heirs sold a portion of the lot to the
respondent spouses on November 16, 1971. The sale was evidenced by a notarized
Deed of Absolute Sale registered in the O ce of the Registry of Deeds of Masbate,
Masbate on March 13, 1972. The lot was thereafter occupied and cultivated by the
respondent spouses, and declared for taxation purposes under the name of respondent
Isidro. 5
As described in the aforementioned Deed and alleged by the respondent
spouses, the lot sold consists of an area of 640 square meters, more or less, is located
at Barangay Nursery, Masbate City, and
[b]ounded on the North, by Jose P. Mitra and the Provincial Government of
Masbate; on the East and South, by the Heirs of Isidro Loyola and on the West,
by Proposed callejon two (2) meters wide. 6
In 1984, petitioners contracted the services of Engineer Felomino Ramirez (Engr.
Ramirez) to cause the segregation survey of the mother lot. Allegedly Engr. Ramirez
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 was at that time unaware that a portion of the lot to be segregated has already been
sold to the respondent spouses, thus he included therein the portion already sold to
respondent spouses. The survey was approved on November 22, 1984. 7
In November 1995, the petitioners applied for a free patent over their share in the
mother lot, corresponding to 4,054 sq.m. Acting on petitioners' representation that the
land subject of the application is not claimed or occupied by any other person, OCT No.
P-18357 was issued on March 6, 1998. 8
In 2002, petitioners, through Engineer Ramirez, caused the partition of the lot
covered by Original Certi cate of Title (OCT) No. P-18357, which then led to the
issuance of seven titles under Psd-05-032169, to wit: Transfer Certi cate of Title (TCT)
No. T-13344 issued in the name of Ides, TCT No. T-13345 issued in the name of
Ildefonso, Jr., TCT No. T-13346 issued in the name of Irma, TCT No. T-13347 issued in
the name of Isagani, TCT No. T-13349 issued in the name of Irene, TCT No. T-13348
issued in the name of Irnie, and TCT No. 13350 issued in common to the petitioners. 9
Alleging that their property has wrongfully been included in the partition and
distributed to the petitioners, a Complaint for Cancellation/Annulment of Original and
Transfer Certi cates of Title and Damages led by respondent spouses before the
Regional Trial Court of Masbate City. Per relocation survey conducted by Engineer
Miguel E. Reyes on May 13, 2002, the property sold to the respondent spouses are Lot
4229-A and a portion of Lot 4229-B, covered by TCT Nos. T-13344 and T-13345. 1 0
Therein, respondent spouses claimed that their property has wrongfully been
included in the OCT No. P-18357 and Free Patent Number 054111-99, issued in the
name of Ildefonso sometime in April 2002, owing to petitioners' misrepresentation and
connivance with Engr. Ramirez. In this light, respondent spouses impleaded Engr.
Ramirez, the Provincial Environment and Natural Resources O cer, and the Register of
Deeds of Masbate as defendants in the case below. 1 1
On February 17, 2010, the RTC of Masbate City, Branch 46, rendered its Decision,
12 dismissing the complaint in this wise:
WHEREFORE, premises considered, this hereby orders the following:
1. Declaring the [OCT No.] P-18357 and its derivative [TCT Nos.] T-
13341; T-13342; T-13343; T-13344; T-13345; T-13346 and T-13347 of PSD-05-
032169 Cad. 627 Masbate Cadastre as valid and subsisting; HEITAD

2. Dismissing the suit against [Engr. Ramirez] without costs;

3. Dismissing the suit against the nominal defendants PENRO
Officer and the Register of Deeds; and
4. No other costs.
SO ORDERED. 1 3
The RTC held that since one year has lapsed since the issuance of OCT No. P-
18357, without any petition for reopening and review being led, such title has become
indefeasible and conclusive as to the petitioners' title over the lot. 1 4
Finally, while the RTC recognized the validity of the notarized deed of sale
executed in favor respondent spouses, it nonetheless adjudged the latter to be guilty of
laches which thus bars them from asserting their claim. 1 5
Aggrieved, respondent spouses interposed an appeal before the CA, which
rendered the herein assailed Decision 1 6 dated July 10, 2013, the dispositive portion of
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 which reads:
WHEREFORE, the instant appeal is GRANTED. The assailed Decision
dated February 17, 2010 of the [RTC] of Masbate City, Branch 46, in Civil Case
No. 5341, is REVERSED AND SET ASIDE. Accordingly, the [TCTs] in the name of
[petitioners], covering/encroaching the subject property/land owned by the
[respondent spouses] are hereby ordered CANCELLED.
SO ORDERED. 1 7
In so ruling, the CA ratiocinated that respondent spouses' right of ownership
must be respected and that prescription does not run to bar them of asserting the
same considering that they are in possession of the property since 1972. 1 8
Moreover, the CA held that by de nition, extrinsic fraud pertains to an act
committed outside of trial. Thus, while the use of forged or fake documents in the
action for reconstitution before the RTC prevented the full adjudication of the case on
the merits, the CA ruled that it cannot be considered as extrinsic fraud. 1 9
Petitioners sought a reconsideration of the Decision dated July 10, 2013 but the
CA denied it in its Resolution 2 0 dated January 21, 2014.
Thus, this petition for review for certiorari led by the petitioners, submitting a
lone issue for this Court's Resolution, to wit:
Whether or not the Honorable CA erred in reversing the appealed Decision off
the RTC of Masbate-Branch 46, on the sole ground that respondent spouses are
not guilty of laches, since they were allegedly in possession of the property in
question. 2 1
Petitioners in support of their position argue that they are the rightful owners of
the property in question; that the dismissal of a land registration case does not bar the
titling of a land by way of a free patent application; and that OCT No. P-18357 has
become incontrovertible considering that one year has already elapsed since its entry in
the records of the Registry of Deeds. 2 2

Ruling of the Court

The Court is not persuaded.

An action for reconveyance is a recognized remedy available to a person whose
property has been wrongfully registered under the Torrens System in the name of
another. The institution of this action does not contradict the indefeasibility of the
Torrens Title, as the object thereof is not to set aside the decree, which is
incontrovertible and not subject to review except in a direct proceeding. Rather, in an
action for reconveyance what is sought is the transfer of the property erroneously
registered from the name of the registered owner to that who possesses a better right
over it. 2 3
Section 53, paragraph 3 of Presidential Decree No. 1529, in relation to Articles
1456 and 1144 (2) 2 5 the Civil Code, provides that an action for the reconveyance of
24
a fraudulently registered property is 10 years reckoned from the date of the issuance of
the certi cate of title. However, where the party seeking reconveyance on the ground of
fraud is in actual, continuous, and peaceful possession of the property involved,
prescription does not run as the action partakes of the nature of a suit for quieting of
title, which is imprescriptible. 2 6
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 Likewise, an action for reconveyance based on a void contract, as in this
controversy where it is alleged that there was no consent on the part of the real owner
of the property, the action does not prescribe. 2 7
It is undisputed that respondent spouses has been in possession of the subject
property since it has acquired the same in 1971. Respondent spouses have occupied
the property in the concept of an owner, cultivated the same, and rented out a portion
of thereof. 2 8 In fact, they remained in possession of the property when the application
of the petitioners for Free Patent over the subject property was granted, when the new
TCTs over the same were issued in favor of the petitioners, during the pendency of the
complaint before the lower court. 2 9 Similarly, there is no indication that respondent
spouses were deprived of actual possession at all.
In the instant controversy therefore, the one-year prescriptive period within which
to file an action for reconveyance does not apply.
Corollarily, there is no basis in the petitioners' contention that having passed all
rules and regulations pertinent to the titling by way of free patent application, the same
"cannot be questioned by any party in any proceeding in Court."
The rule that a free patent that was fraudulently acquired, and the certi cate of
title issued pursuant to the same, may only be assailed by the government in an action
for reversion pursuant to Section 101 of the Public Land Act is not absolute. A
recognized exception thereof is the enforcement of the principle of constructive trust
by a private individual through an action for recovenyance, concerning a property the
title for which has been secured by another by "unlawfully and in breach of trust." This is
because similar to the case of the Torrens Title, the object of the action is not to set
aside the decree of registration but only to show that the person who secured the
registration of the property is not the real owner thereof. 3 0 ATICcS

Also, contrary to petitioners' understanding of the RTC's decision, what vested

ownership in favor of the respondent spouses is not the fact that laches has already set
in. Respondent spouses' right of ownership over the property has been acquired and
vested by virtue of the contract of sale they have executed with the Heirs of Isidro
Loyola on November 16, 1971.
That petitioners were able to secure a free patent over the subject property and
secure titles in their names do not operate to divest the respondent spouses of
ownership over the property. It is settled that the act of registration of a piece of land
under the Torrens System is not a mode of acquiring ownership, as such it does not
create or vest title. As held by this Court in the case of Lorzano v. Tabayag, Jr.: 3 1
A certi cate of title is merely an evidence of ownership or title over the
particular property described therein. It cannot be used to protect a usurper from
the true owner; nor can it be used as a shield for the commission of fraud;
neither does it permit one to enrich himself at the expense of others. 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 certi cate, or
that it may be held in trust for another person by the registered owner. 3 2
(Citation omitted)
From the foregoing therefore, it is clear that the issuance of certi cates of title in
the name of the petitioners does not foreclose the respondent spouses from ling a
petition for reconveyance to recover what has been allegedly mistakenly included in the
former's title.

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 Having so determined, what remains to be resolved is the issue of ownership
over the property in question. In this matter, the RTC and the CA both recognized the
validity of the notarized Deed of Absolute Sale issued in favor of the respondent
spouses over a specific portion of the property. 3 3
Verily, the issue of ownership and identity of the land is a question of fact that
entails the re-evaluation of the probative value of evidence, and as such is beyond the
province of a petition for review. More so, where as in this case the CA found no error
and a rmed the ndings of the RTC. Absent any compelling reason for us to deviate
from the foregoing rule, this Court is therefore bound by these factual ndings and
affirm the ownership of the respondent spouses. 3 4
WHEREFORE , premises considered, the instant Petition for Review on Certiorari
is hereby DENIED . Accordingly, the Decision dated July 10, 2013 and Resolution dated
January 21, 2014 of the Court of Appeals in CA-G.R. CV No. 95457 are hereby
AFFIRMED .
SO ORDERED."

Very truly yours,

MA. LOURDES C. PERFECTO

Division Clerk of Court

By:

(SGD.) TERESITA AQUINO TUAZON

Deputy Division Clerk of Court

Footnotes
1. Rollo, pp. 7-17.

2. Penned by Associate Justice Stephen C. Cruz, with Associate Justices Magdangal M. De

Leon and Myra V. Garcia-Fernandez, concurring; id. at 20-28.

3. Id. at 29-30.
4. Rendered by Judge Nilo B. Barsaga; id. at 31-40.
5. Id. at 33.

6. Records, p. 13.
7. Rollo, pp. 33-34.

8. Id. at 21, 34.

9. Id. at 34.

10. Id.
11. Id.
12. Id. at 31-40.
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 13. Id. at 40.

14. Id. at 35.

15. Id. at 40.
16. Id. at 20-28.

17. Id. at 27-28.

18. Id. at 24-29.

19. Id. at 28-30.

20. Id. at 29-30.
21. Id. at 10-11.
22. Id. at 12-15.

23. Hortizuela v. Tagufa, et al., 754 Phil. 499, 507-508 (2015).

24. Article 1456. If property is acquired through mistake or fraud, the person obtaining it is, by
force of law, considered a trustee of an implied trust for the benefit of the person from
whom the property comes.

25. Art. 1144. The following actions must be brought within ten years from the time
the right of action accrues:

xxx xxx xxx

   (2) Upon an obligation created by law;

xxx xxx xxx

26. Uy v. CA, et al., 769 Phil. 705, 719-720 (2015).

27. Id. at 721.

28. Rollo, p. 21.
29. Id. at 36.
30. Lorzano v. Tabayag, Jr., 681 Phil. 39, 54-55 (2012).

31. 681 Phil. 39 (2012).

32. Id. at ___.
33. Rollo, pp. 33, 36.
34. Lamsis, et al. v. Dong-e, 648 Phil. 372, 391 (2010).

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