Collateral attack

This is an example of a case elucidating the principle that a Torrens Title is indefeasible; that it can be attacked only for fraud within one year from the issuance of the decree of registration in a direct, not a collateral proceeding.

This case involved three lots in a land which was formerly agricultural but converted into a subdivision known as "Hidden View". Under the subdivision plan duly approved by the DENR, the three lots were supposed to be road lots but the owner/developer of the subdivision sold the said lots together with the 20 other subdivision lots to private individuals. The three road lots were sold to two buyers who eventually obtained Titles to the said lots as co-owners.

One of the registered co-owners was Lucy. Lucy later on decided to develop the other properties at the back of Hidden View Subdivision into two new subdivisions known as ST Ville Properties and Hidden View II. When the homeowners of Hidden View I heard that they have no right to use the road lots since they have already been registered and titled in the name of Lucy and in the light of reports that Lucy had in fact purchased the entire Hidden View from its owner/developer, they inquired from HLURB about the validity of the registration of the subdivision road lots in the name of Lucy. The homeowners also asked whether Lucy had the necessary documents for the development of Hidden View II and ST Ville Properties. In reply, the HLURB said that under the law, the owner/developer should have legal title or right over the road lots and if the title is in the name of other persons, there is a failure to comply with the requirements of the law. The HLURB also pointed out that the Hidden View II and ST Ville Properties had not filed an application for registration and license to sell.

So the homeowners caused the construction of a guardhouse at the entrance of Hidden View Subdivision I and hired the services of a security guard to prevent unauthorized persons and construction vehicles from passing through their subdivision. Such move affected not only the residents of the new subdivisions developed by Lucy but also Lucy herself since her trucks and equipment used in the housing projects could not pass through the roads anymore.

This prompted Lucy to file an action in the Regional Trial Court (RTC) for damages and injunction against the homeowners association and some homeowners. The RTC granted a Temporary Restraining Order and the Writ of Preliminary Injunction allowing Lucy to continue using the roads. After trial, the RTC made the injunction permanent subject to the right of the homeowners to regulate the passage thereof of Lucy and the general public. However Lucy was also ordered to donate the road lots to the city government.

On appeal, the Court of Appeals (CA) reversed the RTC decision. The CA found that the injunctive writ was erroneously issued as the same was not based on an actual right sought to be protected by law. According to the CA, the fact of registration of the road lots in Lucy’s name was insufficient to defeat the right of the homeowners of Hidden View I and preclude them from regulating their use and administration thereof. The CA said that the road lots cannot be sold to any person pursuant to PD 957. It also pointed out that fraud is manifest in the acquisition of titles thereto by Lucy. Was the CA correct?

No. It is a settled rule that a Torrens Title cannot be collaterally attacked. Whether the title was procured by fraud or falsification can only be raised in an action expressly instituted for the purpose. The title represented by the certificate cannot be changed, altered, modified, enlarged, or diminished in a collateral proceeding. The certificate of title serves as evidence of an indefeasible title to the property in favor of the person whose name appears therein. As registered co-owner of the road lots, Lucy is entitled to avail of all attributes of ownership under the Civil Code – the right to use, abuse and dispose of the property and the right to its fruits (Art. 428 and 486). Therefore, the homeowners cannot close the road lots to prevent Lucy from using the same. As long as the titles are not annulled in a direct proceeding, Lucy remains a co-owner and therefore her right to use the road lots subsists. The titles in the name of Lucy still have value in law and evidentiary weight until such annulment. So Lucy is entitled to the injunctive relief subject to the outcome of a direct action asking for the annulment of said titles (Borbajo vs. Hidden View Homeowners etc. et. al G.R. 152440, January 31, 2005).

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