Pacete v. Asotigue (G.R. No. 188575; December 10, 2012)

CASE DIGEST: GAUDENCIO PACETE, Petitioner, vs. INOCENCIO ASOTIGUE, Respondent. (G.R. No. 188575; December 10, 2012)

FACTS: Respondent Inocencio Asotigue (Asotigue) filed a complaint for reconveyance against petitioner Gaudencio Pacete (Pacete) before the RTC. The property in dispute is a parcel of agricultural land located in Barangay Dolis, Municipality of Magpet, Province of Cotabato, and covered by Original Certificate of Title (OCT) No. V- 16654, registered in the name of Pacete.

Records show that the disputed lot was previously owned by Sambutuan Sumagad (Sumagad), a native. The lot was mortgaged by Sumagad to Bienvenido Pasague (Pasague), who later on bought it in 1958.

Then, Pasague conveyed the same lot to Umpad. This transaction was done with Pacetes full knowledge since he accompanied the parties when the sale took place.

On March 22, 1979, Asotigue bought the lot from Umpad. Asotigue then entered the lot and planted, among others, rubber trees, fruit trees and coconut trees. According to him, he failed to apply for a title over the said lot due to financial constraint.

Pacete countered that sometime in 1979, Asotigue, by stealth, strategy and prior knowledge, entered the disputed lot and started planting trees despite his demand to vacate the said lot.

The RTC ruled in favor of Asotigue. On appeal, The Court of Appeals affirmed the RTCs decision. Thus, Pacete elevated the matter to the Supreme Court.

Pacete contends that his original certificate of title is an unassailable evidence of his ownership over the disputed lot having been issued pursuant to the Torrens System of Registration. He argues that a Torrens title is generally a conclusive evidence of the ownership of the land referred to therein and that the mere possession cannot defeat the title of a holder of a registered Torrens title to real property.
ISSUE: Is an action for reconveyance proper in this case?

HELD: Pacete cannot rely on his OCT No. V-16654 as an incontrovertible proof of his ownership over the property in dispute because he was not in good faith when he obtained the said title as he was fully aware of the conveyance of the said lot between Pasague and Umpad.

Reconveyance is proper under the circumstances. Reconveyance is available not only to the legal owner of a property but also to the person with a better right than the person under whose name said property was erroneously registered. Although Asotigue is not the titled owner of the disputed lot, he apparently has a better right than Pacete, the latter not being in good faith when he obtained his title to the said property. In Munoz v. Yabut, Jr., the Court had the occasion to describe an action for reconveyance as follows: An action for reconveyance is an action in personam available to a person whose property has been wrongfully registered under the Torrens system in anothers name. x xxReconveyance is always available as long as the property has not passed to an innocent third person for value. ADVERTISEMENT: Work from home! Be an online English tutor. Earn at least PHP100/hour.

In the present case, when Pacete procured OCT No. V-16654 in 1961, the disputed lot, being a portion covered by the said title, was already in possession of Asotigue. His predecessor-in-interest, Sumagad, had been occupying it since 1958. After all, the Torrens system was not designed to shield and protect one who had committed fraud or misrepresentation and, thus, holds title in bad faith. DENIED.

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