THIRD DIVISION
[ G.R. No. 116111, January 21, 1999 ]REPUBLIC v. CA +
REPUBLIC OF THE PHILIPPINES, (REPRESENTED BY THE ACTING COMMISSIONER OF LAND REGISTRATION), PETITIONER, VS. COURT OF APPEALS, SPOUSES CATALINO SANTOS AND THELMA BARRERO SANTOS, ST. JUDE'S ENTERPRISES, INC., SPOUSES DOMINGO CALAGUIAN AND FELICIDAD CALAGUIAN, VIRGINIA DE LA
FUENTE AND LUCY MADAYA, RESPONDENTS.
D E C I S I O N
REPUBLIC v. CA +
REPUBLIC OF THE PHILIPPINES, (REPRESENTED BY THE ACTING COMMISSIONER OF LAND REGISTRATION), PETITIONER, VS. COURT OF APPEALS, SPOUSES CATALINO SANTOS AND THELMA BARRERO SANTOS, ST. JUDE'S ENTERPRISES, INC., SPOUSES DOMINGO CALAGUIAN AND FELICIDAD CALAGUIAN, VIRGINIA DE LA
FUENTE AND LUCY MADAYA, RESPONDENTS.
D E C I S I O N
PANGANIBAN, J.:
Is the immunity of the government from laches and estoppel absolute? May it still recover the ownership of lots sold in good faith by a private developer to innocent purchasers for value. Notwithstanding its approval of the subdivision plan and its
issuance of separate individual certificates of title thereto?
The Case
These are the main questions raised in the Petition for Review before us, seeking to set aside the November 29, 1993 Decision[1] of the Court of Appeals[2] in CA-GR CV No. 34647. The assailed Decision affirmed the ruling[3] of the Regional Trial Court of Caloocan City, Branch 125, in Civil Case No. C-111708, which dismissed petitioner's Complaint for the cancellation of Transfer Certificates of Title (TCTs) to several lots in Caloocan City, issued in the name of private respondents.
In a Resolution[4] dated July 7, 1994, the Court of Appeals denied the Republic's motion for reconsideration.
The Facts
The facts of the case are not disputed. The trial court's summary, which was adopted by the Court of Appeals, is reproduced below:
Ruling of the Trial Court
On April 30, 1991, the trial court dismissed the Complaint.[7] While the plaintiff sufficiently proved the enlargement or expansion of the area of the disputed property, it presented no proof that Respondent St. Jude Enterprises, Inc. ("St. Jude") had committed fraud when it submitted the subdivision plan to the Land Registration Commission (LRC) for approval. Because the plan was presumed to have been subjected to investigation, study and verification by the LRC, there was no one to blame for the increase in the area "but the plaintiff[,] for having allowed and approved the subdivision plan." Thus, the court concluded, the government was already "in estoppel to question the approved subdivision plan."
The trial court also took into account the "absence of complaints from adjoining owners whose supposed lots [were] encroached upon by the defendants," as well as the fact that an adjoining owner had categorically stated that there was no such encroachment. Finding that Spouses Santos, Spouses Calaguian, Dela Fuente and Madaya had brought their respective lots from St. Jude for value and in good faith, the court held that their titles could no longer be questioned, because under the Torrens system, such titles had become absolute and irrevocable. As regards the Republic's allegation that it had filed the case to protect the integrity of the said system, the court said:
Ruling of the Appellate Court
Citing several cases[9] upholding the indefeasibility of titles issued under the Torrens system, the appellate court affirmed the trial court. It berated petitioner for bringing the suit only after nineteen (19) years had passed since the issuance of St. Jude's title and the approval of the subdivision plan. The pertinent portion of the assailed Decision reads:[10]
The Issues
In this petition, the Republic raises the following issues for our resolution:[12]
The Court's Ruling
The petition is bereft of merit.
First Issue:
Estoppel Against the Government
The general rule is that the State cannot be put in estoppel by the mistakes or error of its officials or agents.[13] However, like all general rules, this is also subject to exceptions, viz.:[14]
In the case at bar, for nearly twenty years (starting from the issuance of St. Jude's titles in 1966 up to the filing of the Complaint in 1985), petitioner failed to correct and recover the alleged increase in the land area of St. Jude. Its prolonged inaction strongly militates against its cause, as it is tantamount to laches, which means "the failure or neglect, for an unreasonable and unexplained length of time, to do that which by exercising due diligence could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it."[19]
The Court notes private respondents' argument that, prior to the subdivision, the surveyors erred in the original survey of the whole tract of land covered by TCT No. 22660. So that less then the actual land area was indicated on the title. Otherwise, the adjoining owners would have complained upon the partition of the land in accordance with the LRC-approved subdivision plan. As it is, Florencio Quintos, the owner of the 9,146 square-meter Quintos Village adjoining the northern portion of St. Jude's property (the portion allegedly "expanded"), even attested on August 16, 1973 that "there [was] no overlapping of boundaries as per my approved plan (LRC) PSD 147766 dated September 8, 1971."[20] None of the other neighboring owners ever complained against St. Jude or the purchasers of its property. It is clear, therefore, that there was no actual damage to third persons caused by the resurvey and the subdivision.
Significantly, the other private respondents -- Spouses Santos, Spouses Calaguian, Dela Fuente and Madaya -- bought such "expanded" lots in good faith, relying on the clean certificates of St. Jude, which had no notice of any flaw in them either. It is only fair and reasonable to apply the equitable principle of estoppel by laches against the government to avoid an injustice[21] to the innocent purchasers for value.
Likewise time-settled is the doctrine that where innocent third persons, relying on the correctness of the certificate of title, acquire rights over the property, courts cannot disregard such rights and order the cancellation of the certificate. Such cancellation would impair public confidence in the certificate of title, for everyone dealing with property registered under the Torrens system would have to inquire in every instance whether the title has been regularly issued or not. This would be contrary to the very purpose of the law, which is to stabilize land titles. Verily, all persons dealing with registered land may safely rely on the correctness of the certificate of title issued therefor, and the law or the courts do not oblige them to go behind the certificate in order to investigate again the true condition of the property. They are only charged with notice of the liens and encumbrances on the property that are noted on the certificate.[22]
When private respondents-purchasers bought their lots from St. Jude, they did not have to go behind the titles thereto to verify their contents or search for hidden defects or inchoate rights that could defeat their rights to said lots. Although they were bound by liens and encumbrances annotated on the titles, private respondents-purchasers could not have had notice of defects that only an inquiry beyond the face of the titles could have satisfied.[23] The rationale for this presumption has been stated thus:[24]
Furthermore, it should be stressed that the total area of forty thousand six hundred twenty-three (40,623) square meters indicated on St. Jude's original title (TCT No. 22660) was not an exact area. Such figure was followed by the phrase "more or less." This plainly means that the land area indicated was not precise. Atty. Antonio H. Noblejas, who became the counsel of St. Jude subsequent to his tenure as Land Registration Commissioner, offers a sensible explanation. In his letter[28] to the LRC dated November 8, 1982, he gave the following information:
Petitioner miserably failed to prove any fraud, either on the part of Private Respondent St. Jude or on the part of land registration officials who had approved the subdivision plan and issued the questioned TCT's. Other than its peremptory statement in the Complaint that the "expansion" of the area was "motivated by bad faith with intent to defraud, to the damage and prejudice of the government and of public interests," petitioner did not allege specifically how fraud was perpetrated to cause an increase in the actual land size indicated. Nor was any evidence proffered to substantiate the allegation. That the land registration authorities supposedly erred or committed an irregularity was merely a conclusion drawn from the "table survey" showing that the aggregate area of the subdivision lots exceeded the area indicated on the title of the property before its subdivision. Fraud cannot be presumed, and the failure of petitioner to prove it defeats it own cause.
Second Issue:
The Torrens System
True, the Torrens system is not a means of acquiring titles to lands; it is merely a system of registration of titles to lands.[30] Consequently, land erroneously included in a Torrens certificate of title is not necessarily acquired by the holder of such certificate.[31]
But in the interest of justice and equity, neither may the titleholder be made to bear the unfavorable effect of the mistake or negligence of the State's agents, in the absence of proof of his complicity in a fraud or of manifest damage to third persons. First, the real purpose of the Torrens system is to quite title to land to put a stop forever to any question as to the legality of the title, except claims that were noted in the certificate at the time of the registration or that may arise subsequent thereto.[32] Second, as we discussed earlier, estoppel by laches now bars petitioner from questioning private respondents' titles to the subdivision lots. Third, it was never proven that Private Respondent St. Jude was a party to the fraud that led to the increase in the area of the property after its subdivision. Finally, because petitioner even failed to give sufficient proof of any error that might have been committed by its agent who had surveyed the property, the presumption of regularity in the performance of their functions must be respected. Otherwise, the integrity of the Torrens system, which petitioner purportedly aims to protect by filing this case, shall forever be sullied by the ineptitude and inefficiency of land registration officials, who are ordinarily presumed to have regularly performed their duties.[33]
We cannot, therefore, adhere to the petitioner's submission that, in filing this suit, it seeks to preserve the integrity of the Torrens system. To the contrary, it is rather evident from our foregoing discussion that petitioner's action derogates the very integrity of the system. Time and again, we have said that a Torrens certificate is evidence of an indefeasible title to property in favor of the person whose name appears thereon.
WHEREFORE, the petition is hereby DENIED and the assailed Decision is AFFIRMED.
SO ORDERED.
Romero (Chairman), and Gonzaga-Reyes, JJ., concur.
Vitug, J., see concurring opinion.
Purisima, J., joins J. Vitug's concurring opinion.
[1] Rollo, pp. 29-37.
[2] Second Division, composed of JJ. Lourdes K. Tayao-Jaguros (ponente); concurred in by Vicente V. Mendoza (then chairman of the Division and now an associate justice of the Supreme Court); and Jesus M. Elbinias, member.
[3] Penned by Judge Geronimo S. Mangay.
[4] Signed by JJ. Tayo-Jaguros, Elbinias and Cancio G. Garcia; Rollo, p. 38.
[5] Rollo, pp. 31-32.
[6] Ibid., pp. 29-31.
[7] CA Rollo, pp. 66-71.
[8] Rollo, pp. 36-37.
[9] Felix Gochan & Sons Realty Corp. v. Cañada, 165 SCRA 207, August 31, 1988; Gonzales v. IAC, 157 SCRA 587, January 29, 1988; Umbay v. Alecha, 135 SCRA 427, March 18, 1985; Abienda v. Court of Appeals, 135 SCRA 402, March 18, 1985.
[10] Assailed Decision, p. 6; Rollo. p. 34.
[11] This case was deemed submitted for resolution upon receipt by the Court of private respondents' Memorandum of April 2, 1998. (Petitioner's Memorandum was received earlier on February 12, 1998.)
[12] Petitioner's Memorandum, p. 8; Rollo, p. 227.
[13] Lim v. Pacquing, 240 SCRA 649, January 27, 1995, citing Republic v. IAC, 209 SCRA 90, May 19, 1992, GSIS v. Court of Appeals, 218 SCRA 233, 252, January 29, 1993; DBP v. Commission on Audit, 231 SCRA 202, 207, March 11, 1994.
[14] 31 CJS 675-676.
[15] 226 SCRA 314, September 10, 1993, per Melo, J.
[16] "Sec. 15. [Art. XI] The right of the State to recover properties unlawfully acquired by public officials or employees, from them or from their nominees or transferees, shall not be barred by prescription, laches, or estoppel."
[17] At pp. 325-326.
[18] At p. 327.
[19] Olizon v. Court of Appeals, September 1, 1994, 236 SCRA 148, 157-158. See also Republic v. Sandiganbayan, 255 SCRA 438, March 29, 1996; Pal Employees Savings and Loan Association v. NLRC, 260 SCRA 758, August 22, 1996; Catholic Bishop of Balanga v. Court of Appeals, 264 SCRA 181, November 14, 1996.
[20] Record, p. 84.
[21] Olizon v. Court of Appeals, supra.
[22] Halili v. Court of Industrial Relations, 257 SCRA 174, 184-185, May 30, 1996; citing Peña, Registration of Land Titles and Deeds, 1994 revised ed., p. 145. Sajonas v. Court of Industrial Relations, 258 SCRA 79, 91, July 5, 1996; citing Reynes v. Barrera, 68 Phil. 656.
[23] See Sajonas v. Court of Industrial Relations, ibid., p. 92.
[24] Pino v. Court of Appeals, 198 SCRA 434, 440, June 19, 1991; per Paras, J.
[25] Tenio-Obsequio v. Court of Appeals, 230 SCRA 550, 557, March 1, 1994; per Regalado, J. See also Sandoval v. Court of Appeals, 260 SCRA 283, August 1, 1996.
[26] Sajonas v. Court of Appeals, supra, p. 100; citing De Santos v. IAC, 157 SCRA 295, January 25, 1988.
[27] Ibid., citing Fule v. De Legare, 7 SCRA 351, February 28, 1963.
[28] Exh. 3.
[29] Balantakbo v. Court of Appeals, 319 Phil. 436, 441, October 16, 1995.
[30] Noblejas, Registration of Land Titles and Deeds, 1986 ed., pp. 44-45.
[31] Peña, Registration of Land Titles and Deeds, 1988 revised ed., p. 171; citing Ledesma v. Municipality of Iloilo, 49 Phil 769 (1926).
[32] Ibid., p. 27. Albienda v. Court of Appeals, supra, p. 406; citing Legarda v. Saleeby, 31 Phil. 593.
[33] See Cagayan de Oro City Landless Residents Association, Inc. (COCLAI) v. Court of Appeals, 254 SCRA 220, 231, March 4, 1996.
CONCURRING OPINION
VITUG, J.:
The rule has been to the effect that a purchaser of registered land is not ordinarily required to explore further than what the record in the Registry indicates on its face in quest of any hidden defect or inchoate right which might adversely affect the buyer's right over the property.[1] Undoubtedly, to allow in the instant case the cancellation of the titles of herein private respondents would defeat rather than enhance the purpose and scheme of the Torrens System. It is my understanding, however, that the rule that the Court has here announced would not apply to a situation where the enlargement or expansion in area would result in an encroachment on or reduction of any area covered by a certificate of title previously issued. To rule otherwise would itself be to downgrade the integrity of the Torrens System.
[1] Pulido vs. CA, 251 SCRA 673.
These are the main questions raised in the Petition for Review before us, seeking to set aside the November 29, 1993 Decision[1] of the Court of Appeals[2] in CA-GR CV No. 34647. The assailed Decision affirmed the ruling[3] of the Regional Trial Court of Caloocan City, Branch 125, in Civil Case No. C-111708, which dismissed petitioner's Complaint for the cancellation of Transfer Certificates of Title (TCTs) to several lots in Caloocan City, issued in the name of private respondents.
In a Resolution[4] dated July 7, 1994, the Court of Appeals denied the Republic's motion for reconsideration.
The facts of the case are not disputed. The trial court's summary, which was adopted by the Court of Appeals, is reproduced below:
"Defendant St. Jude's Enterprises, Inc. is the registered owner of a parcel of land known as Lot 865-B-1 of the subdivision plan (LRC) PSD-52368, being a portion of Lot 865-B located in Caloocan City containing an area of 40,623 square meters. For Lot 865-B-1 defendant St. Jude's Enterprises, Inc. was issued TCT No. 22660 on July 25, 1966.
"Sometime in March 1966 defendant St' Jude's Enterprises, Inc. subdivided Lot No. 865-B-1 under subdivision plan (LRC) PSD-55643 and as a result thereof the Register of Deeds of Caloocan City cancelled TCT No. 22660 and in lieu thereof issued Certificates of Title Nos. 23967 up to 24068 inclusive, all in the name of defendants St. Jude's Enterprises, Inc. The subdivision of lot 865-B-1 [which was] covered [by] TCT No. 22660 was later found to have expanded and enlarged from its original area of 40,523 square meters to 42,044 square meters or an increase of 1,421 square meters. This expansion or increase in area was confirmed by the land Registration Commission [to have been made] on the northern portion of Lot 865-B-1.
"Subsequently, defendant St. Jude's Enterprises, Inc. sold the lots covered by TCT Nos. 24013 and 24014 to defendant Sps. Catalino Santos and Thelma Barreto Santos[;] TCT No. 24019 to defendant Sps. Domingo Calaguian and Felicidad de Jesus[;] TCT No. 24022 to defendant Virginia dela Fuente[;] and TCT No. 2402[3] to defendant Lucy Madaya. Accordingly, these titles were cancelled and said defendants were issued the following: TCT No. C-43319 issued in the name of Sps. Santos containing an area of 344 square meters[;] TCT No. 55513 issued in the name of defendants Sps. Calaguian containing an area of 344 square meters[;] TCT No. 13309 issued in the name of Sps. Santos[;] TCT No. 24069 issued in the name of Virginia dela Fuente containing an area of 350 square meters[;] and TCT No. C-46648 issued in the name of defendant Lucy Mandaya with an area of 350 square meters."[5]
"[On January 29, 1985, then Solicitor General Estelito Mendoza filed] an action seeking xxx the annulment and cancellation of Transfer Certificates of Title (TCT) Nos. 24015, 24017, 24018, 24020, 24021, 24024, 24025 and 24068 issued in the name of defendant St. Jude's Enterprises, Inc.[;] Transfer Certificates of Title Nos. 13309 and C-43319 both registered in the name of Sps. Catalino Santos and Thelma B. Santos[;] TCT No. 55513 registered in the name of Sps. Domingo Calaguian and Felicidad de Jesus[;] TCT No. 24069 registered in the name of Virginia dela Fuente[;] and TCT No. C-46648 registered in the name of Lucy Mandaya, principally on the ground that said Certificates of Title were issued on the strength of [a] null and void subdivision plan (LRC) PSD-55643 which expanded the original area of TCT No. 22660 in the name of St. Jude's Enterprises, Inc. from 40,623 square meters to 42,044 square meters upon its subdivision
"Defendants Virginia dela Fuente and Lucy Mandaya were declared in default for failure to file their respective answer within the reglementary period.
"Defendants Sps. Catalino Santos and Thelma Barreto Santos, St. Jude's Enterprises, Inc. and Sps. Domingo Calaguian and Felicidad Calaguian filed separate answers to the complaint. Defendants Sps. Domingo Calaguian and Sps. Catalino Santos interposed defenses, among others, that they acquired the lots in question in good faith from their former owner, defendant St. Jude's Enterprises, Inc. and for value and that the titles issued to the said defendants were rendered incontrovetible, conclusive and indefeasible after one year from the date of the issuance of the titles by the Register of Deeds of Caloocan City.
"On the other hand, defendant St. Jude's Enterprises, Inc. Interposed defenses, among others, that the cause of action of plaintiff is barred by prior judgment; that the subdivision plan submitted having been approved by the LRC, the government is now in estoppel to question the approved subdivision plan; and the plaintiff's allegation that the area of the subdivision increased by 1,421 square meters is without any basis in fact and in law."[6]
On April 30, 1991, the trial court dismissed the Complaint.[7] While the plaintiff sufficiently proved the enlargement or expansion of the area of the disputed property, it presented no proof that Respondent St. Jude Enterprises, Inc. ("St. Jude") had committed fraud when it submitted the subdivision plan to the Land Registration Commission (LRC) for approval. Because the plan was presumed to have been subjected to investigation, study and verification by the LRC, there was no one to blame for the increase in the area "but the plaintiff[,] for having allowed and approved the subdivision plan." Thus, the court concluded, the government was already "in estoppel to question the approved subdivision plan."
The trial court also took into account the "absence of complaints from adjoining owners whose supposed lots [were] encroached upon by the defendants," as well as the fact that an adjoining owner had categorically stated that there was no such encroachment. Finding that Spouses Santos, Spouses Calaguian, Dela Fuente and Madaya had brought their respective lots from St. Jude for value and in good faith, the court held that their titles could no longer be questioned, because under the Torrens system, such titles had become absolute and irrevocable. As regards the Republic's allegation that it had filed the case to protect the integrity of the said system, the court said:
"xxx [S]ustaining the position taken by the government would certainly lead to disastrous consequences. Buyers in good faith would lose their titles. Adjoining owners who were deprived of a portion of their lot would be forced to accept the portion of the property allegedly encroached upon. Actions for recovery will be filed right and left[;] thus instead of preserving the integrity of the Torrens System it would certainly cause chaos rather than stability. Finally, if only to strengthen the Torrens System and in the interest of justice, the boundaries of the affected properties of the defendants should not be disturbed and the status quo should be maintained."[8]The solicitor general appealed the trial court's Decision to the Court of Appeals.
Citing several cases[9] upholding the indefeasibility of titles issued under the Torrens system, the appellate court affirmed the trial court. It berated petitioner for bringing the suit only after nineteen (19) years had passed since the issuance of St. Jude's title and the approval of the subdivision plan. The pertinent portion of the assailed Decision reads:[10]
"xxx Rather than make the Torrens system reliable and stable, [its] act of filing the instant suit rocks the system, as it gives the impression to Torrens title holders, like appellees, that their titles to properties can be questioned by the same authority who had approved the same even after a long period of time. In that case, no Torrens title holder shall be at peace with the ownership and possession of his land, for the Commission of land Registration can question his title any time it makes a finding unfavorable to said Torrens title holder."Undaunted, petitioner seeks a review by this Court.[11]
In this petition, the Republic raises the following issues for our resolution:[12]
"1. Whether or not the government is estopped from questioning the approved subdivision plan which expanded the areas covered by the transfer certificates of title in question;We shall discuss the second and third questions together. Hence, the issues shall be (1) the applicability of estoppel against the State and (2) the Torrens system.
"2. Whether or not the Court of Appeals erred when it did not consider the Torrens System as merely a means of registering title to land;
"3. Whether or not the Court of Appeals erred when it failed to consider that petitioner's complaint before the lower court was filed to preserve the integrity of the Torrens System."
The petition is bereft of merit.
Estoppel Against the Government
The general rule is that the State cannot be put in estoppel by the mistakes or error of its officials or agents.[13] However, like all general rules, this is also subject to exceptions, viz.:[14]
"Estoppels against the public are little favored. They should not be invoked except in rate and unusual circumstances, and may not be invoked where they would operate to defeat the effective operation of a policy adopted to protect the public. They must be applied with circumspection and should be applied only in those special cases where the interests of justice clearly require it. Nevertheless, the government must not be allowed to deal dishonorably or capriciously with its citizens, and must not play an ignoble part or do a shabby thing; and subject to limitations x x x, the doctrine of equitable estoppel may be invoked against public authorities as well as against private individuals."In Republic v. Sandiganbayan,[15] the government, in its effort to recover ill-gotten wealth, tried to skirt the application of estoppel against it by invoking a specific constitutional provision.[16] The Court countered:[17]
"We agree with the statement that the State is immune from estoppel, but this concept is understood to refer to acts and mistakes of its officials especially those which are irregular (Sharp International Marketing vs. Court of Appeals, 201 SCRA 299; 306 [1991]; Republic v. Aquino, 120 SCRA 186 [1983]), which peculiar circumstances are absent in the case at bar. Although the State's right of action to recover ill-gotten wealth is not vulnerable to estoppel[;] it is non sequitur to suggest that a contract, freely and in good faith executed between the parties thereto is susceptible to disturbance ad infinitum. A different interpretation will lead to the absurd scenario of permitting a party to unilaterally jettison a compromise agreement which is supposed to have the authority of res judicata (Article 2037, New Civil Code), and like any other contract, has the force of law between parties thereto (Article 1159, New Civil Code; Hernaez vs. Kao, 17 SCRA 296 [1966]; 6 Padilla, Civil Code Annotated, 7th ed., 1987, p. 711; 3 Aquino, Civil Code, 1990 ed., p. 463). xxx."The Court further declared that "(t)he real office of the equitable norm of estoppel is limited to supply[ing] deficiency in the law, but it should not supplant positive law."[18]
In the case at bar, for nearly twenty years (starting from the issuance of St. Jude's titles in 1966 up to the filing of the Complaint in 1985), petitioner failed to correct and recover the alleged increase in the land area of St. Jude. Its prolonged inaction strongly militates against its cause, as it is tantamount to laches, which means "the failure or neglect, for an unreasonable and unexplained length of time, to do that which by exercising due diligence could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it."[19]
The Court notes private respondents' argument that, prior to the subdivision, the surveyors erred in the original survey of the whole tract of land covered by TCT No. 22660. So that less then the actual land area was indicated on the title. Otherwise, the adjoining owners would have complained upon the partition of the land in accordance with the LRC-approved subdivision plan. As it is, Florencio Quintos, the owner of the 9,146 square-meter Quintos Village adjoining the northern portion of St. Jude's property (the portion allegedly "expanded"), even attested on August 16, 1973 that "there [was] no overlapping of boundaries as per my approved plan (LRC) PSD 147766 dated September 8, 1971."[20] None of the other neighboring owners ever complained against St. Jude or the purchasers of its property. It is clear, therefore, that there was no actual damage to third persons caused by the resurvey and the subdivision.
Significantly, the other private respondents -- Spouses Santos, Spouses Calaguian, Dela Fuente and Madaya -- bought such "expanded" lots in good faith, relying on the clean certificates of St. Jude, which had no notice of any flaw in them either. It is only fair and reasonable to apply the equitable principle of estoppel by laches against the government to avoid an injustice[21] to the innocent purchasers for value.
Likewise time-settled is the doctrine that where innocent third persons, relying on the correctness of the certificate of title, acquire rights over the property, courts cannot disregard such rights and order the cancellation of the certificate. Such cancellation would impair public confidence in the certificate of title, for everyone dealing with property registered under the Torrens system would have to inquire in every instance whether the title has been regularly issued or not. This would be contrary to the very purpose of the law, which is to stabilize land titles. Verily, all persons dealing with registered land may safely rely on the correctness of the certificate of title issued therefor, and the law or the courts do not oblige them to go behind the certificate in order to investigate again the true condition of the property. They are only charged with notice of the liens and encumbrances on the property that are noted on the certificate.[22]
When private respondents-purchasers bought their lots from St. Jude, they did not have to go behind the titles thereto to verify their contents or search for hidden defects or inchoate rights that could defeat their rights to said lots. Although they were bound by liens and encumbrances annotated on the titles, private respondents-purchasers could not have had notice of defects that only an inquiry beyond the face of the titles could have satisfied.[23] The rationale for this presumption has been stated thus:[24]
"The main purpose of the Torrens System is to avoid possible conflicts of title to real estate and to facilitate transactions relative thereto by giving the public the right to rely upon the face of a Torrens Certificate of Title and to dispense with the need of inquiring further, except when the party concerned had actual knowledge of facts and circumstances that should impel a reasonably cautious man to make such further inquiry (Pascua v. Capuyoc, 77 SCRA 78). Thus, where innocent third persons relying on the correctness of the certificate thus issued, acquire rights over the property, the court cannot disregard such rights (Director of Land v. Abache, et al., 73 Phil. 606)."In another case,[25] this Court further said:
"The Torrens System was adopted in this country because it was believed to be most effective measure to guarantee the integrity of land titles and to protect their indefeasibility once the claim of ownership is established and recognized. If a person purchases a piece of land on the assurance that the seller's title thereto is valid, he should not run the risk of being told later that his acquisition was ineffectual after all. This would not only be unfair to him. What is worse is that if this were permitted, public confidence in the system would be eroded and land transactions would have to be attended by complicated and not necessarily conclusive investigations and proof of ownership. The further consequence would be that land conflicts could be even more abrasive, if not even violent. The Government, recognizing the worthy purposes of the Torrens System, should be the first to accept the validity of titles issued thereunder once the conditions laid down by the law are satisfied." [Italics supplied.]Petitioner never presented proof that the private respondents who had bought their lots from St. Jude were buyers in bad faith. Consequently, their claim of good faith prevails. A purchaser in good faith and for value is one who buys the property of another without notice that some other person has a right to or an interest in such property; and who pays a full and fair price for the same at the time of such purchase or before he or she has notice of the claims or interest of some other person.[26] Good faith is the honest intention to abstain from taking any unconscientious advantage of another.[27]
Furthermore, it should be stressed that the total area of forty thousand six hundred twenty-three (40,623) square meters indicated on St. Jude's original title (TCT No. 22660) was not an exact area. Such figure was followed by the phrase "more or less." This plainly means that the land area indicated was not precise. Atty. Antonio H. Noblejas, who became the counsel of St. Jude subsequent to his tenure as Land Registration Commissioner, offers a sensible explanation. In his letter[28] to the LRC dated November 8, 1982, he gave the following information:
"a. Records show that our client owned a large tract of land situated in an area cutting the boundary of Quezon City and Caloocan City, then known as Lot 865-B, Psd-60608, and described in T.C.T. No. 100412, containing an area of 96,931 sq. meters, more or less.The discrepancy in the figures could have been caused by the inadvertence or the negligence of the surveyors. There is no proof, though, that the land area indicated was intentionally and fraudulently increased. The property originally registered was the same property that was subdivided. It is well-settled that what defines a piece of titled property is not the numerical date indicated as the area of the land, but the boundaries or "metes and bounds" of the property specified in its technical description as enclosing it and showing its limits.[29]
b. It will be noted that on the northern portion of this Lot 865-B, Psd-60608, is xxx Lot 865-A, Psd-60608, which means that at a previous point of time, these 2 lots composed one whole tract of land.
c. On December 23, 1965, Lot 865-B, Psd-60608, was subdivided into 2 lots, denominated as Lot 865-B-1, with an area of 40,622 sq. meters, more or less, on the Caloocan side, and Lot 865-B-2, with an area of 56,308 sq. meters, more or less, on the Quezon City side, under Plan (LRC) Psd-52368.
d. On March 1-10, 1966, Lot 865-B-1, Psd-52368, then covered by T.C.T. No. N-22660, was subdivided into residential lots under Plan (LRC) Psd-55643, with a total area of 42,044 sq. meters, more or less.
e. It will be noted that Lot 865-B, Psd-60608, covered by T.C.T. No. 100412, contained an area of 96,931 sq. meters, more or less, but when subdivided under Plan (LRC) Psd-52368, into 2 lots, its total area shrank by 1 sq. meter, to wit:
Lot 865-B-1, Psd-52368 = 40,622 sq. metersf. There is no allegation whatever in the Perez report that there was error in laying out the metes and bounds of Lot 865-B-1 in Plan (LRC) Psd-55643, as specified in the Technical Description of the said lot set forth in T.C.T. No. N-22660 covering the same. There is likewise no allegation, on the contrary there is confirmation from the boundary owner on the northern side, Mr. Florencio Quintos, that there is no overlapping of boundaries on the northern side of Lot 865-B-1, Psd-55643.
Lot 865-B-2, Psd-52368 = 56,308 "
96,930 sq. meters.
g. We respectfully submit that the area of 42, 044 sq. meters stated in Plan (LRC) Psd-55643 as the size of Lot 865-B-a, is the more accurate area, confirmed by the Perez report 'as per surveyor[']s findings on the ground', which rectifies previous surveryor's error in computing its area as 40,622 sq. meters in Plan (LRC) Psd-52368, which is about 3.5% tolerable error (1,422 divided by 40,622 = .035).
[h.] It is well settled that in the identification of a parcel of land covered by certificate of title, what is controlling are the metes and bounds as set forth in its Technical Description and not the area stated therein, which is merely an approximation as indicated in the 'more or less' phrase placed after the number of square meters.
i. There is thus no unauthorized expansion of the survey occasioned by the subdivision of Lot 865-B-1 under Plan (LRC) Psd-55643; consequently, LRC Circular No. 167, Series of 1967, finds no application thereto, as to bar the processing and registration in due course of transactions involving the subdivision lots of our client, subject hereof. This is apart from the fact that LRC Circular No. 167 has not been implemented by the Register of Deeds of Caloocan City or any proper government authority since its issuance in 1967, and that, in the interest of justice and equity, its restrictive and oppressive effect on transactions over certificates of titles of subdivisions that allegedly expanded on re-surveys, cannot be allowed to continue indefinitely." (Italics supplied.)
Petitioner miserably failed to prove any fraud, either on the part of Private Respondent St. Jude or on the part of land registration officials who had approved the subdivision plan and issued the questioned TCT's. Other than its peremptory statement in the Complaint that the "expansion" of the area was "motivated by bad faith with intent to defraud, to the damage and prejudice of the government and of public interests," petitioner did not allege specifically how fraud was perpetrated to cause an increase in the actual land size indicated. Nor was any evidence proffered to substantiate the allegation. That the land registration authorities supposedly erred or committed an irregularity was merely a conclusion drawn from the "table survey" showing that the aggregate area of the subdivision lots exceeded the area indicated on the title of the property before its subdivision. Fraud cannot be presumed, and the failure of petitioner to prove it defeats it own cause.
The Torrens System
True, the Torrens system is not a means of acquiring titles to lands; it is merely a system of registration of titles to lands.[30] Consequently, land erroneously included in a Torrens certificate of title is not necessarily acquired by the holder of such certificate.[31]
But in the interest of justice and equity, neither may the titleholder be made to bear the unfavorable effect of the mistake or negligence of the State's agents, in the absence of proof of his complicity in a fraud or of manifest damage to third persons. First, the real purpose of the Torrens system is to quite title to land to put a stop forever to any question as to the legality of the title, except claims that were noted in the certificate at the time of the registration or that may arise subsequent thereto.[32] Second, as we discussed earlier, estoppel by laches now bars petitioner from questioning private respondents' titles to the subdivision lots. Third, it was never proven that Private Respondent St. Jude was a party to the fraud that led to the increase in the area of the property after its subdivision. Finally, because petitioner even failed to give sufficient proof of any error that might have been committed by its agent who had surveyed the property, the presumption of regularity in the performance of their functions must be respected. Otherwise, the integrity of the Torrens system, which petitioner purportedly aims to protect by filing this case, shall forever be sullied by the ineptitude and inefficiency of land registration officials, who are ordinarily presumed to have regularly performed their duties.[33]
We cannot, therefore, adhere to the petitioner's submission that, in filing this suit, it seeks to preserve the integrity of the Torrens system. To the contrary, it is rather evident from our foregoing discussion that petitioner's action derogates the very integrity of the system. Time and again, we have said that a Torrens certificate is evidence of an indefeasible title to property in favor of the person whose name appears thereon.
WHEREFORE, the petition is hereby DENIED and the assailed Decision is AFFIRMED.
SO ORDERED.
Romero (Chairman), and Gonzaga-Reyes, JJ., concur.
Vitug, J., see concurring opinion.
Purisima, J., joins J. Vitug's concurring opinion.
[1] Rollo, pp. 29-37.
[2] Second Division, composed of JJ. Lourdes K. Tayao-Jaguros (ponente); concurred in by Vicente V. Mendoza (then chairman of the Division and now an associate justice of the Supreme Court); and Jesus M. Elbinias, member.
[3] Penned by Judge Geronimo S. Mangay.
[4] Signed by JJ. Tayo-Jaguros, Elbinias and Cancio G. Garcia; Rollo, p. 38.
[5] Rollo, pp. 31-32.
[6] Ibid., pp. 29-31.
[7] CA Rollo, pp. 66-71.
[8] Rollo, pp. 36-37.
[9] Felix Gochan & Sons Realty Corp. v. Cañada, 165 SCRA 207, August 31, 1988; Gonzales v. IAC, 157 SCRA 587, January 29, 1988; Umbay v. Alecha, 135 SCRA 427, March 18, 1985; Abienda v. Court of Appeals, 135 SCRA 402, March 18, 1985.
[10] Assailed Decision, p. 6; Rollo. p. 34.
[11] This case was deemed submitted for resolution upon receipt by the Court of private respondents' Memorandum of April 2, 1998. (Petitioner's Memorandum was received earlier on February 12, 1998.)
[12] Petitioner's Memorandum, p. 8; Rollo, p. 227.
[13] Lim v. Pacquing, 240 SCRA 649, January 27, 1995, citing Republic v. IAC, 209 SCRA 90, May 19, 1992, GSIS v. Court of Appeals, 218 SCRA 233, 252, January 29, 1993; DBP v. Commission on Audit, 231 SCRA 202, 207, March 11, 1994.
[14] 31 CJS 675-676.
[15] 226 SCRA 314, September 10, 1993, per Melo, J.
[16] "Sec. 15. [Art. XI] The right of the State to recover properties unlawfully acquired by public officials or employees, from them or from their nominees or transferees, shall not be barred by prescription, laches, or estoppel."
[17] At pp. 325-326.
[18] At p. 327.
[19] Olizon v. Court of Appeals, September 1, 1994, 236 SCRA 148, 157-158. See also Republic v. Sandiganbayan, 255 SCRA 438, March 29, 1996; Pal Employees Savings and Loan Association v. NLRC, 260 SCRA 758, August 22, 1996; Catholic Bishop of Balanga v. Court of Appeals, 264 SCRA 181, November 14, 1996.
[20] Record, p. 84.
[21] Olizon v. Court of Appeals, supra.
[22] Halili v. Court of Industrial Relations, 257 SCRA 174, 184-185, May 30, 1996; citing Peña, Registration of Land Titles and Deeds, 1994 revised ed., p. 145. Sajonas v. Court of Industrial Relations, 258 SCRA 79, 91, July 5, 1996; citing Reynes v. Barrera, 68 Phil. 656.
[23] See Sajonas v. Court of Industrial Relations, ibid., p. 92.
[24] Pino v. Court of Appeals, 198 SCRA 434, 440, June 19, 1991; per Paras, J.
[25] Tenio-Obsequio v. Court of Appeals, 230 SCRA 550, 557, March 1, 1994; per Regalado, J. See also Sandoval v. Court of Appeals, 260 SCRA 283, August 1, 1996.
[26] Sajonas v. Court of Appeals, supra, p. 100; citing De Santos v. IAC, 157 SCRA 295, January 25, 1988.
[27] Ibid., citing Fule v. De Legare, 7 SCRA 351, February 28, 1963.
[28] Exh. 3.
[29] Balantakbo v. Court of Appeals, 319 Phil. 436, 441, October 16, 1995.
[30] Noblejas, Registration of Land Titles and Deeds, 1986 ed., pp. 44-45.
[31] Peña, Registration of Land Titles and Deeds, 1988 revised ed., p. 171; citing Ledesma v. Municipality of Iloilo, 49 Phil 769 (1926).
[32] Ibid., p. 27. Albienda v. Court of Appeals, supra, p. 406; citing Legarda v. Saleeby, 31 Phil. 593.
[33] See Cagayan de Oro City Landless Residents Association, Inc. (COCLAI) v. Court of Appeals, 254 SCRA 220, 231, March 4, 1996.
VITUG, J.:
The rule has been to the effect that a purchaser of registered land is not ordinarily required to explore further than what the record in the Registry indicates on its face in quest of any hidden defect or inchoate right which might adversely affect the buyer's right over the property.[1] Undoubtedly, to allow in the instant case the cancellation of the titles of herein private respondents would defeat rather than enhance the purpose and scheme of the Torrens System. It is my understanding, however, that the rule that the Court has here announced would not apply to a situation where the enlargement or expansion in area would result in an encroachment on or reduction of any area covered by a certificate of title previously issued. To rule otherwise would itself be to downgrade the integrity of the Torrens System.
[1] Pulido vs. CA, 251 SCRA 673.