GAUDENCIO PACETE, petitioner vs.

INOCENCIO ASOTIGUE, respondent

G.R. No. 188575 10 December 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 Pacete’s 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 constraints. 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 RTC’s
decision. Thus, Pacete elevated the matter to the Supreme Court.

Pacete contends that his original certificate of title is 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 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.

ISSUES:
Whether or not an action for reconveyance is proper in this case

RULING:
The Court finds no merit in the petition.

Pacete cannot rely on his OCT No. V-16654 as 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 the 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 another’s name. x x x Reconveyance is always available as long as the
property has not passed to an innocent third person for value.”

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 the title in bad faith.