III.

Within one year from the issuance of the decree of registration and certificate
of title in A's name, B brought an action for their annulment in the Regional Trial
Court on the ground that A obtained them thru fraud. In his answer to the complaint,
A alleged that the court had no jurisdiction over the case and averred, by way of
counterclaim, that he has just discovered that B succeeded 3 years ago in
registering in his name, by false and fraudulent representations, another parcel of
land owned and possessed by A. He, therefore, prayed that B's action be
dismissed and that he be ordered to transfer his title to him (A). The trial court
dismissed both the complaint and counterclaim. Comment on the legality of the
order of dismissal.
Answer: 1. Under Section 32, P.B. 1529, a person who owns a piece of land or
any interest therein that was fraudulently registered in another's name is given the
right to file a petition to review or reopen the decree of registration not later than
one year from the date of entry thereof. This remedy will not lie, however, if title to
the land has been transferred to an innocent purchaser for value.
The case at hand is denominated as an action for annulment of both the decree
and the title, based on fraud. If we treat this case as an ordinary civil action that
was filed with the RTC in the latter's capacity as a court of general jurisdiction, I
believe that the Court acted correctly in dismissing it, because the proper remedy
of the aggrieved party would be a petition for review of the decree which must be
filed with the RTC, in its capacity as a land registration court. The reason for this
is that the case, in essence, petition for review, a mere continuation of the original
proceedings, over which the RTC sitting as a land registration court has exclusive
jurisdiction. So, the RTC acted correctly in dismissing the action for lack of
jurisdiction.
On the other hand, if the case was filed with the RTC in its capacity as a land
registration court, I believe the dismissal was in error, because in that capacity it
has I in fact exclusive jurisdiction to hear and decide what in essence a petition for
review of the decree is. I think mere error in nomenclature of the pleading should
not be a ground for dismissal.
But as a land registration court, the RTC acted correctly in dismissing the
counterclaim of B because in that capacity it enjoys only special and limited
jurisdiction and, therefore, it cannot take cognizance thereof. The counterclaim for
reconveyance of another parcel of land is an action in personam which falls
properly within the competence of ordinary civil courts.
2. If the action were brought under the same land registration proceedings that
issued the decree, in which event the Regional Trial Court would be acting as a
land registration court with special and limited jurisdiction__ a. the dismissal of the
complaint is error, for the Regional Trial Court, as a land registration court, has
jurisdiction there over; b. the dismissal of the counterclaim is proper, because the
same is in the nature of a permissive counterclaim, which is essentially an
independent ordinary civil action, over which the Regional Trial Court, acting as a
land registration court, has no jurisdiction.
3. If the action were merely an ordinary civil action— a. the dismissal of the
complaint is proper, because jurisdiction to annul a decree, brought within one (1)
year from its issuance, properly belongs to the Regional Trial Court which issued
the decree, acting as a land registration court; b. the dismissal of the counterclaim
is error, because the Regional Trial Court, as a court of general jurisdiction, has
jurisdiction there over, and since the counterclaim is in the nature of a permissive
counterclaim, it can proceed independently and regardless of the dismissal of the
complaint.
4. As to the complaint, since it is brought for annulment of the certificate of title
on the ground of fraud, a petition for review should be filed in the same registration
proceeding within one year from the issuance of the decree on the ground of
extrinsic fraud. Since it is brought within one year, dismissal of the action is not
proper provided the petitioner proves extrinsic fraud.
With regard to the counterclaim, this should not be dismissed because it is a
permissive counterclaim. The counterclaim was validity dismissed, since it should
have been brought in a separate action. The action for annulment was not validly
dismissed, having been brought within the one-year period provided in P.D. 1529.
It is, of course, understood that the action was filed in the Regional Trial Court
which granted the decree of registration, since the facts in the question do not state
otherwise. The Regional Trial Court has no jurisdiction over the action for
annulment. Within one year from the issuance of the decree of registration, the
proper remedy would be an action for a review of the decree by the Court in its
capacity as a Land Registration Court. The order, therefore, of .dismissal of the
complaint was correctly issued by the Court. The counterclaim, however, should
not have been dismissed, since it partook of the nature of an action for
reconveyance which can be considered by the RTC.