423 Phil. 1008
KAPUNAN, J.:
During the period from September to October, 1911, a survey was made of a parcel of land, located in Mandaue, Cebu, identified as "Lot No. 896" of Plan No. II-5121, a part of the "Hacienda de Mandaue" occupied by the Spouses Esteban Perez and Lorenza Sanchez. The survey was amended during the period from November, 1926 to March 21, 1927, identified as Amendment No. 2, Ap-6243, with an area of 20,486 square meters, bearing the following boundaries:Romeo Retuerto, Antonia Retuerto, Narcisa Retuerto, Corazon Retuerto, Patrocinia Retuerto, the heirs of Loreto Retuerto, filed an Answer to the complaint alleging, inter alia, by way of affirmative defense, that their father, Loreto Retuerto, was already dead and was survived, by them as his heirs; what was sold to the Defendants Spouses Jose Gesalem was a portion of Lot 896, with an area of 440 square meters, which was conveyed to Efigenia Retuerto and not that portion of Lot 896-B deeded to Loreto Retuerto under the "Extrajudicial Settlement of Real Property of Panfilo Retuerto, who was the lawful owner of the said property, "that they were not aware of LRC Case No. 529 and/or that the property, sold by Juana Perez to Panfilo Retuerto, had been included in Original Certificate of Title No. 521 under the name of Teofilo Barz. xxxWhen the Spouses Esteban Perez and Lorenza Sanchez died intestate, their rights over the property were inherited by their daughter, Juana Perez, married to Numeriano Barz, who then declared the property, for taxation purposes, under her name, under Tax Declaration No. 21969, but with an area of only 13,160 square meters, more or less, bounded on the north, by a piece of land, under the name of Pampila (sic) Retuerto, as follows:
"Northwest - Lots 1251 and 1252 (Remigio Judilla and Manuel Judilla);Southeast - Lot 894 (Gregorio Perez); Southwest - Lot 895; Northwest - Lots 897 and 898 (Juan Perez)" On April 16, 1929, Juana Perez, widow of Numeriano Barz, executed a deed confirming her execution of a "Deed of Absolute Sale," in favor of Panfilo Retuerto, married to Catalina Ceniza, over a parcel of land, located in Barrio Pagsabungan, Mandaue, Cebu, identified as Lot No. 896-A, a portion of the "Hacienda de Mandaue," Cebu, with an approximate area of 2,505 square meters, described as follows:
North - Pampila RetuertoSouth - Vidal Judilla and Catalina Ceniza East - Paula Perez West - Felipe Berdijo On the North - Remegio Judilla, measuring 29.72 sq.m.However, on April 26, 1935, Panfilo Retuerto purchased the aforementioned parcel of land, this time, from the Archbishop of Cebu, under a "Deed of Absolute Sale," for the price of P150.00 (Exhibit "4") and declared the same for taxation purposes under Tax Declaration No. 34652, effective 1937 (Exhibit "2").
On the East - Paula Perez, measuring 85.35 sq.m.
On the South- Juana Perez, measuring 29.72 sq.m.
On the West - Teofista Perez, measuring 84.32 sq.m.
In the meantime, the San Carlos Seminary in Cebu filed a Petition with the then Juzgado de Primera Instancia in Cebu (now the Regional Trial Court) entitled and docketed "El Seminario de San Carlos de Cebu," Solicitante, Expediente No. 3, G.L.R.O. Record 4030 for the issuance of titles over several parcels of land in "Hacienda de Mandaue," including Lot No. 896-A, earlier purchased by Panfilo Retuerto from Juana Perez and from the Archbishop of Cebu. In August, 1937, the Court promulgated a Decision finding and declaring Panfilo Retuerto the owner of the said lot (Exhibit "9"). On July 22, 1940, the Court issued an Order directing the General del Registro de Terrenos (later the Land Registration Commission) for the issuance of the appropriate Decree in favor of Panfilo Retuerto over the said parcel of land. However, no such Decree was issued as directed by the Court because, by December 8, 1941, the Second World War ensued in the Pacific. However, Panfilo Retuerto failed to secure the appropriate decree after the war.
Two (2) decades elapsed. In the meantime, Juana Perez Barz died intestate and was survived by her son, Pedro Barz, who filed an application, with the then Court of First Instance of Cebu, sometime in 1966, for the confirmation of his title over Lot 896 of Plan No. II-5121, entitled and docketed as "IN THE MATTER OF THE REGISTRATION OF TITLE, Pedro Barz, Applicant," Land Registration Case No. N-529, LRC Record No. N24736. The Spouses Panfilo Retuerto did not file any opposition to the application. After appropriate proceedings, the Court promulgated a decision in favor of Pedro Barz declaring him the lawful owner of the said property. On August 18, 1966, Decree No. N-110287 was issued over the property, in favor of Pedro Barz, on the basis of which Original Certificate of Title No. 521 was issued, on November 13, 1968, by the Register of Deeds over the property (Exhibit "A"). The property was then subdivided into four (4) lots namely, Lot 896-A, with an area of 507 square meters (Exhibit "B-5"), Lot 896-B, with an area of 2,142 square meters (Exhibit "B-6"), Lot 896-C, with an area of 5,580 square meters (Exhibit "B-7"), and Lot 896-D, with an area of 12,253 square meters (Exhibit B-8"). On October 18, 1967, Pedro Barz executed a "Deed of Absolute Sale" over subdivision Lot 896-C in favor of Jose Gesalem for P7,000.00. On the basis of the said deed, Original Certificate of Title was partially cancelled and, in lieu thereof, Transfer Certificate of Title No. 7509 was issued over said lot in favor of the vendee.
In the interim, Panfilo Retuerto declared the property, covered by Tax Declaration No. 34652, under his name, under Tax Declaration No. 54960, effective 1974 (Exhibit "3"). Subsequently, Panfilo Retuerto died intestate, on December 29, 1975, and was survived by his widow, Catalina Retuerto and their children, namely Gaudencio Retuerto, Loreto Retuerto, Francisca Retuerto, Francisco Retuerto, Efigenia Retuerto and Guillerma Retuerto. The said heirs executed, on January 4, 1976, "Extrajudicial Settlement and Sale of the Estate of Panfilo Retuerto" adjudicating unto themselves, as owners, the said property and deeding the same unto Loreto Retuerto a portion thereof, with an area of 1,703 square meters, and the rest of the property, with an area of 440 square meters, to Efigenia Retuerto, as follows:"FOR OR TO LORETO RETUERTO: `a portion of the above described parcel of land containing an area of ONE THOUSAND SEVEN HUNDRED TWO (1,702) SQUARE METERS and bounded by the following: on the Northeast by Pagsabungan Road; on the Southeast by Lot 896; on the Northwest by Lot 897; and on the Southwest by the portion sold to Efigenia Retuerto;Loreto Retuerto and Efigenia Retuerto then declared the property, for taxation purposes, under their names, under Tax Declaration No. 69084, effective 1976 (Exhibit "7"). The property covered by Tax Declaration No. 69084 was subdivided into two (2) lots, one with an area of 440 square meters, and the other, with an area of 1,702 square meters. Efigenia Retuerto declared the property, with an area of 440 square meters, under her name, under Tax Declaration No. 69083, effective 1976 (Exhibit "7-A") while Loreto Retuerto declared the property, with an area of 1,702 square meters, for taxation purposes, under his name, under Tax Declaration No. 01298 effective 1976. (Exhibit "7-B").
FOR OR TO EFIGENIA RETUERTO: `a portion of the parcel of land described in paragraph no. 7 hereof containing an area of FOUR HUNDRED FORTY (440) SQUARE METERS and bounded as follows: on the Northeast by the portion sold to Loreto Retuerto; on the Southeast by Lot 896; on the Northwest by Lot 897 and on the Southwest by Lot 896." (at page 38, Records)
In the meantime, Pedro Barz died intestate and was survived by his heirs, Angelo P. Barz and Merlinda Barz. Loreto Retuerto likewise, died intestate and was survived by his heirs, namely, Romeo Retuerto, Antonia Retuerto, Narcisa Retuerto, Corazon Retuerto and Patrocinia Retuerto.
Ominously, the heirs of Panfilo Retuerto claimed ownership over subdivision Lot 896-B and a part of subdivision Lot 896-A, covered by Original Certificate of Title No. 521 under the name of Teofilo Barz. As it was, subdivision Lot 896-B was subdivided by the heirs of Panfilo Retuerto, one of which subdivision lots, with an area of 440 square meters, was forthwith sold to the Spouses Jose Gesalem and Rosa Gesalem. When apprised of the aforementioned events, Angelo Barz and Merlinda Barz, the heirs of Teofilo Barz, and the heirs of Panfilo Retuerto, including the Spouses Jose Gesalem had a confrontation during which the Spouses Jose Gesalem admitted having purchased a portion of subdivision Lot 896-B with an area of 440 square meters.
On September 5, 1989, Angelo P. Barz and Merlinda Barz filed a complaint against Catalina Retuerto and the other heirs of Panfilo Retuerto, including Loreto, who the Plaintiffs believed, was still alive, and the Spouses Jose Gesalem, with the Regional Trial Court of Mandaue for "Quieting of Title, Damages and Attorney's Fees." The Plaintiffs alleged, inter alia, that subdivision Lots 896-A and 896-B were portions of Lot 896 subject of LRC 529 and covered by Original Certificate of Title No. 521 under the name of Teofilo Barz after whose death, the Plaintiffs inherited the property, despite which the Defendants claimed ownership over Lots 896-A and 896-B covered by Original Certificate of Title No. 521. xxx
We do not find merit in the petition. Both the Court of Appeals and the Regional Trial Court correctly applied the principles of the Torrens system of land registration to the present case.I
The Court of Appeals gravely erred in concluding that petitioners had only ten years from the date of issuance of OCT No. 521, which erroneously included their Lot No. 896-A, within which to ask for its reconveyance, in the light of their judicially declared and recognized possession thereof since time immemorial.II
The Court of Appeals erred in not finding that it was respondents' right to question petitioners' ownership and possession over the subject property that has been lost thru laches.III
The Court of Appeals erred in concluding that petitioners could not ventilate their claim of title over the subject property by way of affirmative defense as this would constitute collateral attack on respondents' original certificate of title.
Lot 896: This lot is covered by Tax Declaration No. 21969 in the name of Juana Perez, Exh. "O-Pedro Barz," containing an area of 20,486 sq. meters. It originally belonged to the spouses Esteban Perez and Lorenza Sanchez. After their death, the same was inherited by Juana Perez who died in 1942 and was succeeded by her lone heir son Pedro Barz, Filipino citizen, married to Teofila Pedroza and resident of Mandaue, Cebu. Juana Perez owned and possessed this lot since 1915 up to her death in 1942 when Pedro Barz reached the age of consciousness or when he was around 8 years old; that her possession had been peaceful, continuous, open and in concept of owner. From 1942 up to the present, the possession of Pedro Barz over this property had been likewise peaceful, continuous and in concept of owner as he was religious in the payment of real estate taxes, as shown in Exh. "N-2 Pedro Barz."[11]As previously stated, no action for reconveyance has been filed by herein petitioners. They interposed their claim of ownership for the first time in their Answer and by way of Affirmative Defenses to the complaint for quieting of title filed by herein respondents in 1989. This cannot be allowed. Under Section 48 of PD 1529 or the Property Registration Decree, "a certificate of title cannot be subject to collateral attack; it cannot be altered, modified or cancelled except in a direct proceeding."[12] The issue of the validity of title, i.e., whether or not it was fraudulently issued, can only be raised in an action expressly instituted for that purpose.[13]