Jose v. Quesada-Jose

 

Jose v. Quesada-Jose

G.R. No. 249434

March 15, 2023

 

FACTS:

                Rene Manuel R. Jose (petitioner) and Luis Mario Jose (Luis) are the sons of spouses Domingo Jose (Domingo) and Emilia Jose (Emilia). In 1996, Domingo was sued as solidary debtor with five co-defendants by Philippine Export and Foreign Loan Guarantee Corporation (now called Trade Investment Development Corporation [TIDCORP]) before the Regional Trial Court of Makati (RTC Makati). After due proceedings, the RTC Makati rendered judgment in TIDCORP's favor. Pending appeal before the CA, Domingo requested help from petitioner and his wife, Cynthia Cuyegkeng Jose (Cynthia), to settle the case by ceding to TIDCORP a portion of their 23-hectare property in Antipolo City (Antipolo property). The CA approved the compromise agreement. The Antipolo property was later subdivided into three lots. Three titles were issued with the first in TIDCORP’s name and the last two in the name of Cynthia. Pursuant to their oral agreement, petitioner later demanded Domingo to pay him P120 Million corresponding to the fair value of the property ceded to TIDCORP. Domingo failed to pay despite demands. On July 4, 2005, Domingo executed a Deed of Revocation claiming that he and his wife, Emilia, are the real owners of the Antipolo property.

Luis alleged that on November 3, 1978, his parents executed a simulated sale of the Antipolo property in favor of Cynthia for a consideration of only P65,000.00 to supposedly hide the property from their creditor, TIDCORP. Domingo allegedly gave clear instructions not to transfer the title in Cynthia's name, but the latter did not comply. In September 1980, TCT No. N-50023 was issued in Cynthia's name covering the Antipolo property. Despite the sale, his parents allegedly remained in possession and enjoyment of the property in the concept of owners by continuing to keep the title and by paying taxes. On appeal, Domingo endeavored to settle the case by offering a portion of the Antipolo property. After the satisfaction of the loan to TIDCORP, Domingo allegedly wanted to reinstate in his name the two titles issued in Cynthia's name. However, petitioner and Cynthia began to claim ownership over the property. In connection with this adverse claim, Domingo and Emilia executed a deed of revocation as regards the Antipolo property.

 

ISSUE:

                Whether or not there was a collateral attack on the title.

 

HELD:

                Yes. The Court acknowledges the settled rule in this jurisdiction that the issue as to whether a certificate of title was procured by fraud can only be raised in an action expressly instituted for the purpose. This finds basis in Section 48 of the Property Registration Decree 70 (PRD) which states that a certificate of title shall not be subject to a collateral attack and cannot be altered, modified or cancelled, except in a direct proceeding.

                In the collection case, Luis attempted a collateral attack on Cynthia's title when he assailed the validity of the deed of sale. Jurisprudence has emphasized that "an attack on a deed of sale pursuant to which a certificate of title was issued [constitutes] an impermissible collateral attack on the certificate of title." To recall, in the collection case, petitioner and Cynthia aimed to claim the proceeds representing the value of the portion of the property transferred to TIDCORP to answer for Domingo's obligations. For their part, Domingo and Emilia, and later Luis, argued that they were the true owners of the Antipolo property, alleging that its sale to Cynthia was simulated and the latter fraudulently transferred the title of the property to her name. Effectively, Luis, in his affirmative defense, challenged the validity of the sale upon which TCT No. N-50023 was issued. Accordingly, he questioned the validity of the issuance of TCT Nos. R[1]19952 and R-19953 which were issued in Cynthia's name after the property covered by TCT No. N-50023 was subdivided. The collateral attack through an affirmative defense is not proper.

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