In the Philippines, a land title becomes incontestable one year after its issuance, protecting landowners from belated challenges. The Supreme Court in Laura E. Paraguya v. Spouses Alma Escurel-Crucillo, reiterated this principle, denying a claim filed more than a decade after the original certificate of title was issued. This ruling underscores the importance of timely action in contesting land ownership to prevent the loss of property rights, solidifying the stability and reliability of the Torrens system in the Philippines.

From Administrator to Owner: Challenging a Land Title Years After Issuance

The case of Laura E. Paraguya v. Spouses Alma Escurel-Crucillo revolves around a dispute over parcels of land in Sorsogon. Laura Paraguya claimed ownership as the heir of her grandfather, Ildefonso Estabillo, arguing that Alma Escurel-Crucillo, initially an administrator of the land, fraudulently obtained Original Certificate of Title (OCT) No. P-17729. The legal battle ensued when Paraguya filed a complaint seeking the annulment of the title, alleging deceit and a breach of trust. However, the central issue before the Supreme Court was whether Paraguya’s complaint, filed more than a decade after the title’s issuance, was barred by prescription and the doctrine of indefeasibility of a Torrens title.

The Regional Trial Court (RTC) initially favored Paraguya, ordering the cancellation of Escurel-Crucillo’s title. The RTC highlighted discrepancies in the land area and questioned the validity of the documents supporting Escurel-Crucillo’s claim. However, the Court of Appeals (CA) reversed this decision, emphasizing that the title had become indefeasible after one year from its issuance, as stipulated in Section 32 of Presidential Decree No. (PD) 1529, also known as the “Property Registration Decree.” The CA also noted that Paraguya failed to sufficiently establish an express trust relationship and did not provide sufficient evidence of her title to the properties.

The Supreme Court upheld the CA’s decision, reinforcing the principle of indefeasibility of a Torrens title. The Court cited Section 32 of PD 1529, which clearly states the one-year period to contest a decree of registration:

Sec. 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.

The Court noted that Paraguya’s complaint was filed on December 19, 1990, more than eleven years after the title’s entry on August 24, 1979. This delay was fatal to her case, as the title had already become incontrovertible and indefeasible. Moreover, the Supreme Court addressed the nature of Paraguya’s complaint, classifying it as an action for reconveyance, which also has a prescriptive period.

An action for reconveyance generally prescribes in ten years from the date of the certificate of title’s issuance. An exception exists when the owner is in possession of the property, rendering the action imprescriptible. However, in this case, it was stipulated that Sps. Crucillo, not Paraguya, were in possession of the land, negating the applicability of this exception. Thus, whether viewed as an action for annulment of title or reconveyance, Paraguya’s claim was barred by prescription.

Further compounding Paraguya’s case was her reliance on a titulo posesorio issued in favor of Estabillo in 1893 or 1895. The Court pointed out that Presidential Decree No. 892, which discontinued the Spanish Mortgage System of Registration, renders Spanish titles inadmissible as evidence of ownership after a specific period. Section 1 of PD 892 states:

Section 1. The system of registration under the Spanish Mortgage Law is discontinued, and all lands recorded under said system which are not yet covered by Torrens title shall be considered as unregistered lands.

All holders of Spanish titles or grants should apply for registration of their lands under Act No. 496, otherwise known as the Land Registration Act, within six (6) months from the effectivity of this decree. Thereafter, Spanish titles cannot be used as evidence of land ownership in any registration proceedings under the Torrens system.

PD 892 took effect on February 16, 1976, giving holders of Spanish titles six months, until August 16, 1976, to register their lands under the Torrens system. Paraguya’s presentation of the titulo posesorio in the 1990s, long after this deadline, meant it could not be considered valid evidence of ownership. Consequently, the Supreme Court affirmed the Court of Appeals’ decision, denying Paraguya’s petition and underscoring the critical importance of adhering to prescribed timelines and evidentiary requirements in land disputes.

FAQs

What was the key issue in this case?	The primary issue was whether Laura Paraguya’s complaint for annulment of title, filed more than eleven years after the title’s issuance, was barred by prescription and the principle of indefeasibility of a Torrens title.
What is the Torrens system?	The Torrens system is a land registration system used in the Philippines, designed to provide security of land ownership by creating a public record of land titles, making land transactions more reliable and efficient.
What is the significance of Section 32 of PD 1529?	Section 32 of PD 1529, the Property Registration Decree, provides a one-year period from the date of entry of the decree of registration within which to contest a title. After this period, the title becomes incontrovertible and indefeasible.
What is an action for reconveyance?	An action for reconveyance is a legal remedy to transfer the title of land wrongfully registered to another person, typically the rightful owner. It aims to correct errors or fraudulent registrations.
What is a titulo posesorio?	A titulo posesorio is a possessory information title issued under the Spanish Mortgage Law. It was previously used as evidence of land ownership but is no longer admissible in land registration proceedings under the Torrens system after the enactment of PD 892.
What does indefeasibility of a title mean?	Indefeasibility means that once the one-year period has lapsed, the certificate of title becomes unassailable and can no longer be challenged or altered, except in very specific circumstances such as the presence of fraud within the prescriptive period.
Why was Paraguya’s reliance on the titulo posesorio rejected by the Court?	The Court rejected Paraguya’s reliance on the titulo posesorio because PD 892 discontinued the use of Spanish titles as evidence of land ownership in registration proceedings after August 16, 1976, and Paraguya presented the title in the 1990s.
What is the prescriptive period for an action for reconveyance?	The prescriptive period for an action for reconveyance is generally ten years from the date of the certificate of title’s issuance, except when the rightful owner is in possession of the property, in which case the action is imprescriptible.

This case serves as a critical reminder of the importance of promptly addressing land title issues and complying with legal deadlines. Failing to do so can result in the loss of property rights, regardless of the merits of the underlying claim. The stability of the Torrens system relies on the enforcement of these rules, ensuring predictability and security in land ownership.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: LAURA E. PARAGUYA, VS. SPOUSES ALMA ESCUREL-CRUCILLO, G.R. No. 200265, December 02, 2013