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G.R. No. 151440, June 17, 2003


- free patents issued over private lands are not valid
- difference between direct attack and collateral attack on title


FACTS:

Spouses Vicente Santiago and Magdalena Sanchez are the original owners of the parcel of land in dispute (Lot No. 2344). Simplicio Santiago purchased the land from his father, Pablo (one of Spouses Santiago's sons) and brother, Guillermo. After acquiring the same, he then applied for a free patent over it on May 6, 1983, which free patent was granted, thus, an Original Certificate of Title was issued in his name.

On the other hand, Mariano Santiago contended that Lot No. 2344 was subdivided into three portions: Lot 2344-A, Lot 2344-B, and Lot 2344-C. Simplicio and his heirs owned only Lot 2344-B, and Lots 2344-A and 2344-C were fraudelently included in the free patent and certificate of title issued to Simplicio Santiago. Mariano testified that he and his sister bought Lot 2344-A from Simplicio Santiago for the price of Php 5,000.00, as evidenced by a deed of sale dated Sept. 15, 1972. Immediately after sale, they constructed a house on the lot.

The trial court ruled in favor of Simplicio's heirs and held that Mariano's claim over the controverted lot lacks basis and that his defense consitutes a collateral attack on the validity of a Torrens title.

The Court of Appeals reversed the trial court's decision.

Hence, the instant petition.

ISSUES:

(1) W/N the free patent and the certificate of title issued to Simplicio Santiago are valid
(2) W/N respondents' claim over Lots 2344-C and 2344-A is supported by the evidence
(3) Indefeasibility of Torrens Title

HELD:

First Issue: Validity of Free Patent

A free patent issued over a private land is null and void, and produces no legal effects whatsoever. Private ownership of land - as when there is a prima facie proof of ownership like a duly registered possessory information or a clear showing of open, continuous, exclusive, and notorious possession, by present or previous occupants - is not affected by the issuance of a free patent over the same land, because the Public Land law applies only to lands of the public domain. Consequently, a certificate of title issued pursuant to a homestead patent partakes of the nature of a certificate issued in a judicial proceeding only if the land covered by it is really a part of the disposable land of the public domain.

It was established that Lot 2344 is a private property of the Santiago clan since time immemorial, and that they have declared the same for taxation.

Also, considering the open, continuous, exclusive, and notorious possession and occupation of the land by respondents and their predecessors in interests, they are deemed to have acquired, by operation of law, a right to a government grant without the necessity of a certificate of title being issued. Hence, the free patent covering Lot 2344, a private land, and the certificate of title issued pursuant thereto, are void.

Second Issue: Sufficiency of Evidence of Claim of Ownership

Respondents' claim of ownership over Lot 2344-C and Lot 2344-A is fully substantiated. Their open, contnuous, exclusive, and notorious possession of Lot 2344-C in the concept of owners for more than seventy years supports their contention that the lot was inherited by Mariano from his grandmother Marta. This was corroborated by respondents' witnesses. It is worthy to note that although Lot 2344-C was within the property declared for taxation purposes by the late Simplicio Santiago, he did not disturb the possession of Marta and Mariano.

Lot 2344-C was sold by Simplicio Santiago to Mariano Santiago and Belen Sanchez. The document of sale evidencing the transaction is duly notarized and, as such, is considered a public document and enjoys the presumption of validity as to its authenticity and due execution. This legal presumption was not overcome by petitioners.

Third Issue: Indefeasibility of Torrens Title

A certificate of title issued under an administrative proceeding pursuant to a homestead patent covering a disposable public land within the contemplation of the Public Land Law or Commonwealth Act No. 141 is as indefeasible as a certificate of title issued under a judicial registration proceeding. Under theh Land Registration Act, title to the property covered by a Torrens certificate becomes indefeasible after the expiration of one year from the entry of the decree of registration. The date of the issuance of the patent corresponds to the date of the issuance of the decree.

The one-year prescriptive period, however, does not apply when the person seeking annulment of title or reconveyance is in possession of the lot. This is because the action partakes of a suit to quiet title which is imprescriptible.

Inasmuch as respondents are in possession of the disputed portions of Lot 2344, their action to annul the Original Certificate of Title, being in the nature of an action to quiet title, is therefore not barred by prescription.

Section 48 of P.D. 1529, the Property Registration Decree, provides that a certificate of title shall not be subject to collateral attack and can not be altered, modified, or canceled except in a direct proceeding. The attack is direct when the object of an 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 or proceeding is nevertheless made as an incident thereof.

In the case at bar, the original action filed was accion publiciana or recovery of possession, but the Court may rule on the validity of the free patent and the OCT because of the counterclaim filed by respondents. A counterclaim can be considered a direct attack on the title, not a collateral attack.