In Heirs of Cullado v. Gutierrez, the Supreme Court clarified the interplay between a Torrens title and the right of possession in land disputes. The Court ruled that while an accion publiciana (a suit for recovery of possession) allows a provisional determination of ownership, it cannot override the indefeasibility of a Torrens title. The decision underscores the importance of a Torrens title as primary evidence of ownership and clarifies the limitations of resolving ownership issues in actions primarily focused on possession, thus reinforcing the stability of land titles in the Philippines.

Squatters vs. Titleholders: Who Prevails in Land Possession Battles?

The case revolves around a parcel of land in Isabela, originally titled to Dominic Gutierrez in 1995. The heirs of Alfredo Cullado, who had been occupying the land since 1977, claimed ownership through acquisitive prescription and alleged fraud in Gutierrez’s acquisition of the title. Gutierrez filed an accion publiciana to recover possession, but the Regional Trial Court (RTC) ruled in favor of the Cullados, ordering Gutierrez to reconvey the land. This decision was later overturned by the Court of Appeals (CA), prompting the heirs of Cullado to appeal to the Supreme Court.

The Supreme Court began by addressing the propriety of Gutierrez’s petition for annulment of judgment before the CA. The Court emphasized that annulment of judgment is an exceptional remedy available only when ordinary remedies are no longer accessible through no fault of the petitioner. It can be based only on extrinsic fraud or lack of jurisdiction. The Court agreed with the CA that the RTC lacked jurisdiction to order the reconveyance of the land in an accion publiciana.

To fully understand the issue, it’s crucial to distinguish between the different types of actions to recover possession of real property. There are three main actions: accion interdictal (summary ejectment), accion publiciana (plenary action to recover the better right of possession), and accion reivindicatoria (action for recovery of ownership). Accion interdictal is used when dispossession has not lasted more than one year, while accion publiciana is used when dispossession has lasted longer than one year. Accion reivindicatoria, on the other hand, is an action to recover ownership.

In cases of forcible entry and unlawful detainer, which fall under accion interdictal, the judgment is conclusive only with respect to possession and does not bind the title or affect the ownership of the land. Even when the issue of ownership is raised, it is resolved only to determine the issue of possession. This is where the concept of collateral attack on a Torrens title comes into play. Section 48 of Presidential Decree No. (PD) 1529, or the Property Registration Decree, states:

A certificate of title shall not be subject to collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law.

The Supreme Court clarified that resolving the issue of ownership in an ejectment case does not constitute a collateral attack on the Torrens title because the resolution does not alter, modify, or cancel the certificate of title. It is merely a provisional determination for the purpose of resolving the issue of possession.

In contrast, an accion reivindicatoria is an action for recovery of ownership. The cause of action is based on the plaintiff’s ownership of the land. The owner possesses rights like jus possidendi (right to possess), jus utendi (right to use), jus fruendi (right to the fruits), jus accessionis (right to accessories), jus abutendi (right to consume), jus disponendi (right to dispose), and jus vindicandi (right to recover). Article 428 of the Civil Code expressly recognizes jus vindicandi:

The owner has also a right of action against the holder and possessor of the thing in order to recover it.

In an accion reivindicatoria, the court has the jurisdiction to rule definitively on the issue of ownership, and the issue of direct or collateral attack on the title is irrelevant because the court can pass upon the validity of the certificate of title.

The Court also addressed the imprescriptible right to evict any person illegally occupying the property, stemming from Article 1126 of the Civil Code and Section 47 of PD 1529. The latter provides:

No title to registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession.

In the case of accion publiciana, the issue is the better right of possession independently of title. While the Rules of Court do not expressly grant the court hearing an accion publiciana the power to provisionally resolve the issue of ownership, jurisprudence supports such power. In Supapo v. Sps. de Jesus, the Court held that in an accion publiciana, where the parties raise the issue of ownership, the courts may pass upon the issue to determine who has the right to possess the property. However, this adjudication is not a final determination of ownership but only for resolving the issue of possession.

In the present case, the heirs of Cullado raised fraud in obtaining Gutierrez’s certificate of title as a defense. However, the Court noted that Gutierrez was awarded a patent on May 10, 1995, and Original Certificate of Title (OCT) P-61499 was issued in his name on May 17, 1995. Cullado’s Answer, filed on August 18, 1997, questioned the OCT after the one-year period to question it by reason of actual fraud, as provided in Section 32 of PD 1529, had already lapsed:

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.

Therefore, Gutierrez’s OCT had become indefeasible and remained valid. Applying Supapo and Catindig v. Vda. de Meneses, Gutierrez had a better right of possession based on his ownership recognized by OCT P-61499. The RTC was without jurisdiction in ruling that Cullado had become the owner by acquisitive prescription and ordering Gutierrez to reconvey the land because that can be done only upon a definitive ruling on the said issue – something that cannot be done in an accion publiciana. The court emphasized that the RTC could have resolved the issue of ownership provisionally to determine the better right of possession, which is allowed in an accion publiciana.

Moreover, the RTC’s ruling that Cullado had become owner by acquisitive prescription lacked basis. The evidence did not show that the land was already private land when Cullado started his possession. The land was acquired through a free patent, which presupposes that it was initially public agricultural land pursuant to Commonwealth Act No. (C.A.) 141 or the Public Land Act. In actions to recover, Article 434 of the Civil Code requires that the property must be identified, and the plaintiff must rely on the strength of his title and not on the weakness of the defendant’s claim. The heirs of Cullado failed to properly identify the property they claimed as their own.

The CA correctly relied on the ruling in Ybañez v. Intermediate Appellate Court, which stated that questioning the Torrens Original Certificate of Title in an ordinary civil action for recovery of possession by invoking an affirmative defense constitutes a collateral attack against a certificate of title. The special and affirmative defenses raised by the heirs of Cullado pertained to discrepancies or errors in Dominic’s certificate of title, which entailed a review of the decree made in Dominic’s favor. Since the RTC was without jurisdiction to rule on such defenses in an action for recovery of possession, the allegations were, in reality, not affirmative defenses but negative defenses.

The Court has recognized two approaches in dealing with the claim of ownership raised in the defendant’s answer in an accion publiciana: (1) allowing the provisional resolution of the issue of ownership to determine the better right of possession, or (2) not allowing its resolution because the accion publiciana court lacks jurisdiction to rule with finality on the issue of ownership and the attack on a certificate of title is deemed a collateral one. While the CA took the second approach, the Supreme Court emphasized that even when the court provisionally determines ownership, this adjudication is not a final and binding determination of the issue of ownership. As such, this is not a bar for the parties or even third persons to file an action for the determination of the issue of ownership.

The indefeasibility and incontrovertibility of a land title are the bedrocks of the Torrens system. The government adopted the Torrens system to guarantee the integrity of land titles and protect their indefeasibility once the claim of ownership is established and recognized. However, registration under the Torrens system is not one of the modes of acquiring ownership and does not create or vest title or ownership. The Torrens certificate of title is just evidence of ownership or title in the realty technically described therein.

The State may still bring an action under Section 101 of C.A. 141 for the reversion to the public domain of land which has been fraudulently granted to private individuals, and such action is not barred by prescription. Section 53 of PD 1529 affords a party defrauded in a registration case certain remedies. A landowner whose property has been wrongfully or erroneously registered in another’s name may bring an ordinary action in the ordinary court of justice for reconveyance. This action for reconveyance can be based on implied trust where the defendant acquires the disputed property through mistake or fraud so that he would be bound to hold the property for the benefit of the person who is truly entitled to it and reconvey it to him.

FAQs

What was the key issue in this case?	The key issue was whether the heirs of Cullado could claim ownership of the land through acquisitive prescription and challenge the validity of Gutierrez’s Torrens title in an accion publiciana. The court had to determine the extent to which ownership can be resolved in an action focused on possession.
What is an accion publiciana?	An accion publiciana is a plenary action to recover the better right of possession of real property. It is filed after the expiration of one year from the accrual of the cause of action or from the unlawful withholding of possession.
What is a Torrens title?	A Torrens title is a certificate of title issued under the Torrens system of land registration. It serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein.
What is a collateral attack on a Torrens title?	A collateral attack on a Torrens title is an attempt to challenge the validity of the title in a proceeding where the primary issue is not the validity of the title itself. Philippine law generally prohibits collateral attacks on Torrens titles.
Can ownership be resolved in an accion publiciana?	Yes, but only provisionally. While the main issue in an accion publiciana is possession, the court may resolve the issue of ownership to determine who has the better right of possession. This resolution is not a final determination of ownership.
What is acquisitive prescription?	Acquisitive prescription is a mode of acquiring ownership of property through possession for a certain period of time and under certain conditions prescribed by law. However, it cannot be used to acquire registered land in derogation of the title of the registered owner.
What happens if a Torrens title is obtained through fraud?	If a Torrens title is obtained through fraud, an aggrieved party may file a direct action to annul the title within one year from the date of issuance of the decree of registration. After one year, the title becomes incontrovertible, but the aggrieved party may still pursue an action for damages against the applicant or any other persons responsible for the fraud or action for reconveyance.
What is the significance of the Cullado v. Gutierrez case?	The case clarifies the limitations of resolving ownership issues in an accion publiciana and reaffirms the indefeasibility of a Torrens title. It emphasizes that while an accion publiciana allows a provisional determination of ownership, it cannot override the rights of a registered owner under the Torrens system.

The Supreme Court’s decision in Heirs of Cullado v. Gutierrez serves as a reminder of the importance of the Torrens system in ensuring the stability of land titles in the Philippines. While possession is a significant factor in land disputes, it cannot prevail over a valid and indefeasible Torrens title. It also stresses the need for parties claiming ownership of land to pursue the appropriate legal remedies, such as a direct action for reconveyance or reversion, rather than relying on collateral attacks in actions for possession.

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: THE HEIRS OF ALFREDO CULLADO V. DOMINIC V. GUTIERREZ, G.R. No. 212938, July 30, 2019