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PURPOSE AND MEANING OF THE TORRENS SYSTEM OF REGISTRATION

EFFECTS OF THE TORRENS TITLE:


- Indefeasibility
- Imprescriptibility
- Incontrovertible
EXCEPTIONS:
-

PURPOSE OF THE TORRENS SYSTEM


- To facilitate transactions concerning the lands
- Mirror principle the face of the title says it all; whatever is not there cannot bind you, but it has
EXCEPTIONS

LEGARDA, plaintiff v. SALEEBY, defendant appellee

- The real purpose of that system is to quiet title to land; to put a stop forever to any question of the
legality of the title, except claims which were noted at the time of registration, in the certificate, or
which may arise subsequent thereto. That being the purpose of the law, it would seem that once a
title is registered the owner may rest secure, without the necessity of waiting in the portals of the
court, or sitting in the "mirador de su casa," to avoid the possibility of losing his land. Of course, it
cannot be denied that the proceeding for the registration of land under the torrens system is judicial
(Escueta vs. .Director of Lands, 16 Phil. Rep., 482). It is clothed with all the forms of an action and the result
is final and binding upon all the world. It is an action in rem. (Escueta vs. Director of Lands (supra); Grey
Alba vs. De la Cruz, 17 Phil. rep., 49 Roxas vs. Enriquez, 29 Phil. Rep., 31; Tyler vs. Judges, 175 Mass., 51
American Land Co. vs. Zeiss, 219 U.S., 47.)

- All the world are parties, including the government. After the registration is complete and final and there
exists no fraud, there are no innocent third parties who may claim an interest. The rights of all the world are
foreclosed by the decree of registration. The government itself assumes the burden of giving notice to all
parties.
- The registration, under the torrens system, does not give the owner any better title than he had. If he does
not already have a perfect title, he cannot have it registered. Fee simple titles only may be registered. The
certificate of registration accumulates in open document a precise and correct statement of the exact status
of the fee held by its owner. The certificate, in the absence of fraud, is the evidence of title and shows
exactly the real interest of its owner. The title once registered, with very few exceptions, should not
thereafter be impugned, altered, changed, modified, enlarged, or diminished, except in some direct
proceeding permitted by law. Otherwise all security in registered titles would be lost. A registered title
cannot be altered, modified, enlarged, or diminished in a collateral proceeding and not even by a
direct proceeding, after the lapse of the period prescribed by law.
- It is well settled that the decree ordering the registration of a particular parcel of land is a bar to future
litigation over the same between the same parties. In view of the fact that all the world are parties, it
must follow that future litigation over the title is forever barred; there can be no persons who are not
parties to the action. This, we think, is the rule, EXCEPT as to rights which are noted in the certificate
or which arise subsequently, and with certain other exceptions which need not be dismissed at
present. A title once registered cannot be defeated, even by an adverse, open, and notorious
possession. Registered title under the torrens system cannot be defeated by prescription (section
46, Act No. 496). The title, once registered, is notice to the world. All persons must take notice. No
one can plead ignorance of the registration.
- Hogg, in his excellent discussion of the "Australian Torrens System," at page 823, says: "The general
rule is that in the case of two certificates of title, purporting to include the same land, the earlier in
date prevails, whether the land comprised in the latter certificate be wholly, or only in part,
comprised in the earlier certificate. (Oelkers vs. Merry, 2 Q.S.C.R., 193; Miller vs. Davy, 7 N.Z.R., 155;

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Lloyd vs. Myfield, 7 A.L.T. (V.) 48; Stevens vs. Williams, 12 V.L. R., 152; Register of Titles, vs. Esperance
Land Co., 1 W.A.R., 118.)" Hogg adds however that, "if it can be very clearly ascertained by the
ordinary rules of construction relating to written documents, that the inclusion of the land in the
certificate of title of prior date is a mistake, the mistake may be rectified by holding the latter of the
two certificates of title to be conclusive."
- Section 38 of Act No. 496, provides that; "It (the decree of registration) shall be conclusive upon and
against all persons, including the Insular Government and all the branches thereof, whether
mentioned by name in the application, notice, or citation, or included in the general description "To
all whom it may concern." Such decree shall not be opened by reason of the absence, infancy, or
other disability of any person affected thereby, nor by any proceeding in any court for reversing
judgments or decrees; subject, however, to the right of any person deprived of land or of any estate
or interest therein by decree of registration obtained by fraud to file in the Court of Land Registration a
petition for review within one year after entry of the decree (of registration), provided no innocent purchaser
for value has acquired an interest.

- RULING OF THE COURT:


We have in this jurisdiction a general statutory provision which governs the right of the
ownership of land when the same is registered in the ordinary registry in the name of two
persons. Article 1473 of the Civil Code provides, among other things, that when one
piece of real property had been sold to two different persons it shall belong to the
person acquiring it, who first inscribes it in the registry. This rule, of course,
presupposes that each of the vendees or purchasers has acquired title to the land. The
real ownership in such a case depends upon priority of registration. While we do not
now decide that the general provisions of the Civil Code are applicable to the Land
Registration Act, even though we see no objection thereto, yet we think, in the absence of
other express provisions, they should have a persuasive influence in adopting a rule for
governing the effect of a double registration under said Act. Adopting the rule which we
believe to be more in consonance with the purposes and the real intent of the torrens
system, we are of the opinion and so decree that in case land has been registered
under the Land Registration Act in the name of two different persons, the earlier in
date shall prevail.
- The primary and fundamental purpose of the torrens system is to quiet title. If the holder of a
certificate cannot rest secure in this registered title then the purpose of the law is defeated.
- We have decided, in case of double registration under the Land Registration Act, that the owner of
the earliest certificate is the owner of the land. That is the rule between original parties. May this rule
be applied to successive vendees of the owners of such certificates? Suppose that one or the other of the
parties, before the error is discovered, transfers his original certificate to an "innocent purchaser." The
general rule is that the vendee of land has no greater right, title, or interest than his vendor; that he
acquires the right which his vendor had, only. Under that rule the vendee of the earlier certificate
would be the owner as against the vendee of the owner of the later certificate.
- Sections 38, 55, and 112 of Act No. 496 indicate that the vendee may acquire rights and be protected
against defenses which the vendor would not. Said sections speak of available rights in favor of third
parties which are cut off by virtue of the sale of the land to an "innocent purchaser." That is to say,
persons who had had a right or interest in land wrongfully included in an original certificate would
be unable to enforce such rights against an "innocent purchaser," by virtue of the provisions of said
sections.
- Rule of Notice
- By reason of the prior registry there cannot be an innocent purchaser of land included in a prior
original certificate and in a name other than that of the vendor, or his successors.
- We believe the phrase "innocent purchaser," used in said sections, should be limited only to cases
where unregistered land has been wrongfully included in a certificate under the torrens system.
When land is once brought under the torrens system, the record of the original certificate and all
subsequent transfers thereof is notice to all the world.

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- The holder of the first original certificate and his successors should be permitted to rest secure in
their title, against one who had acquired rights in conflict therewith and who had full and complete
knowledge of their rights. The purchaser of land included in the second original certificate, by reason
of the facts contained in the public record and the knowledge with which he is charged and by reason of his
negligence, should suffer the loss, if any, resulting from such purchase, rather than he who has obtained
the first certificate and who was innocent of any act of negligence.
- Once land is registered and recorded under the torrens system, that record alone can be examined
for the purpose of ascertaining the real status of the title to the land.
- It would be seen to a just and equitable rule, when two persons have acquired equal rights in the same
thing, to hold that the one who acquired it first and who has complied with all the requirements of the law
should be protected.

BISHOP v. CA
- A parcel of land in the possession of the petitioners. The entire parcel is registered under the name of the
private respondents under a Transfer Certificate Title.
- Private respondents sued petitioners for the recovery of the possession of the land.
- The defendants claimed that the lots were part of the public domain and could not have been registered
under the Torrens system. All alleged long and continuous possession of the lots and produced tax
declarations in their names. Two of them maintained that they had acquired their respective lots by virtue of
valid contracts of sale. Another based her claim on inheritance.
- After the trial, RTC Judge rendered a judgment in favor of the plaintiffs with basis of the Art. 428 of the New
Civil Code:
Art. 428 New Civil Code

"The owner has the right to enjoy and dispose of a thing, without other limitations than
those established by law.

"The owner has also a right of action against the holder and possessor of the thing in
order to recover it."

There is, therefore, no doubt in law, that the plaintiffs being the registered owners of the
land in question have also the corresponding right to the recovery and possession of the
same. The defendants who are in physical occupancy of the land belonging to the
plaintiffs have no right whatsoever to unjustly withhold the possession of the said land
from the plaintiffs. The defendants occupancy of the land in question is unlawful and in
violation of plaintiffs right to the recovery and possession of the land they owned.
Tax declarations of the land made in the names of the defendants are not evidence of title,
it appearing that the land is already titled to the plaintiffs. The registration of the land in the
names of the defendants with the Assessors Office for taxation purposes and the
payments of real property taxes by the defendants can not and does not defeat the title of
the plaintiffs to the land. The fact that the defendants have been in occupancy of the land
in question for quite a period of time is of no moment as prescription will not ripen into
ownership because the land is covered by a torrens title. Acquisitive prescription will not
be available to land titled under Art. 496.
- The decision was affirmed by the Court of Appeals.
- SC RULING:
The petition has no merit.
On the first ground, the Court notes that the private respondents title is traceable to an
Original Certificate of Title issued way back in 1910 or eighty-two years ago. That
certificate is now incontrovertible and conclusive against the whole world. The
presumption of regularity applies to the issuance of that certificate. This presumption
covers the finding that the land subject of the certificate was private in nature and
therefore registrable under the Torrens system.
To sustain an action for annulment of a Torrens certificate for being void ab initio, it
must be shown that the registration court had not acquired jurisdiction over the

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case and that there was actual fraud in securing the title. 3 Neither of these
requirements has been established by the petitioners.
No less importantly, an action to invalidate a certificate of title on the ground of fraud
prescribes after the expiration of one (1) year from the entry of the decree of
registration 4 and cannot now be resorted to by the petitioners at this late hour.
As registered owners of the lots in question, the private respondents have a right to eject
any person illegally occupying their property. This right is imprescriptible. Even if it be
supposed that they were aware of the petitioners occupation of the property, and
regardless of the length of that possession, the lawful owners have a right to demand the
return of their property at any time as long as the possession was unauthorized or merely
tolerated, if at all. This right is never barred by laches.
Laches
In urging laches against the private respondents for not protesting their long and
continuous occupancy of the lots in question, the petitioners are in effect
contending that they have acquired the said lots by acquisitive prescription. It is
an elementary principle that the owner of a land registered under the
Torrens system cannot lose it by prescription. 5
The land was in fact registered under the Torrens System and such registration
was constructive notice to the whole world, including the petitioners.
- WHEREFORE, the petition is DENIED, with costs against the petitioners. It is so ordered.

National Grains Authority v. Intermediate Appellate Court

- Petition for review of the decision of the then Intermediate Appellate Court * (now Court of Appeals) dated
January 31, 1984, reversing the decision of the Court of First Instance of Laguna and San Pablo City.
- Spouses Paulino Vivas and Engracia Lizardo, as owners of a parcel of land, sold for P30,000.00 said
property in favor of spouses Melencio Magcamit and Nena Cosico, and Amelita Magcamit (herein
private respondents) as evidenced by "Kasulatan Ng Bilihang Mabiling Muli."
- This sale with right to repurchase was recorded in the Office of the Register of Deeds of Laguna.
- The sale was made absolute by the spouses Vivas and Lizardo in favor of the private respondents
for the sum of P90,000.00; P50,000.00 of which was paid upon the execution of the instrument, entitled
"Kasulatan Ng Bilihan Tuluyan," after being credited with the P30,000.00 consideration of the "Kasulatan Ng
Mabibiling Muli," and the balance of P40,000.00 was to be paid the moment that the certificate of title is
issued. From the execution of said Kasulatan, private respondent have remained in peaceful, adverse
and open possession of subject property.
- An Original Certificate of Title No. T-1728 covering the property in question was issued to and in the
name of the spouses Vivas and Lizardo without the knowledge of the private respondents and on
April 30, 1975, said Spouses executed a Special Power of Attorney in favor of Irenea Ramirez
authorizing the latter to mortgage the property with the petitioner, National Grains Authority.
- Counsel of the petitioner requested for the foreclosure of the mortgage executed by Irenea Ramirez, for
unpaid indebtedness in favor of the petitioner.
- The Provincial Sheriff caused the issuance of the notice of sale of the property in question, scheduling the
public auction sale on June 28, 1974. The petitioner was the highest and successful bidder so that a
Certificate of Sale was issued in its favor on the same date by the Provincial Sheriff.
- On July 10, 1974, the petitioner in its capacity as attorney-in-fact of the mortgagor sold the subject real
property in favor of itself. By virtue of the deed of absolute sale, TCT No. T-75171 of the Register of Deeds
for the Province of Laguna was issued in the name of the petitioner on July 16, 1974.
- It was only in July 1974, that private respondents learned that a title in the name of the Vivas
spouses had been issued covering the property in question and that the same property had been
mortgaged in favor of the petitioner. Private respondent Nena Magcamit offered to pay the petitioner
NGA the amount of P40,000.00 which is the balance of the amount due the Vivas spouses under the terms
of the absolute deed of sale but the petitioner refused to accept the payment.
- On August 13, 1974 petitioner in its reply informed counsel of private respondents that petitioner is now the
owner of the property in question and has no intention of disposing of the same.
- The private respondents, who as previously stated, are in possession of subject property were
asked by petitioner to vacate it but the former refused. Petitioner filed a suit for ejectment against private
respondents in the Municipal Court of Victoria, Laguna, but the case was dismissed.

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- Private respondents filed a complaint before the Court of First Instance against petitioner spouses Vivas and
Lizardo, praying that they be declared the owners of the property and be entitled to possess the same, and
to reconvey or transfer ownership to them should petitioner be granted ownership.
- The trial court rendered a judgment in favour of NGA, declaring them to be the lawful owner of the property.
- Private respondents interposed an appeal to the Intermediate Appellate Court rendering the reversal of the
decision of the lower court.
- Petitioner filed for reconsideration but was denied thereof. Hence, this petition.
- ISSUE: Whether or not violation of the terms of the agreement between the spouses Vivas and Lizardo, the
sellers, and private respondents, the buyers, to deliver the certificate of title to the latter, upon its issuance,
constitutes a breach of trust sufficient to defeat the title and right acquired by petitioner NGA, an
innocent purchaser for value.
- Two Deed of Sales on the same land was executed: (1) a conditional sale with right to repurchase which
was registered under Act 3344 and (2) deed of absolute sale which was not registered.
- The condition that a Certificate of Title will be delivered to buyers upon its issuance and payment of the
balance.
- The land in question at the time of the execution of both sales was not yet covered by the Torrens System of
Registration.
- It is axiomatic, that while the registration of the conditional sale with right of repurchase may be
binding on third persons, it is by provision of law "understood to be without prejudice to third party
who has better right" (Section 194 of the Administrative Code, as amended by Act No. 3344). In this
case, it will be noted that the third party NGA, is a registered owner under the Torrens System and
has obviously a better right than private respondents and that the deed of absolute sale with the
suspensive condition is not registered and is necessarily binding only on the spouses Vivas and
Lizardo and private respondents.
- Time and time again, this Court has ruled that the proceedings for the registration of title to land
under the Torrens System is an action in rem not in personam, hence, personal notice to all
claimants of the res is not necessary in order that the court may have jurisdiction to deal with and
dispose of the res. Neither may lack of such personal notice vitiate or invalidate the decree or title
issued in a registration proceeding, for the State, as sovereign over the land situated within it, may
provide for the adjudication of title in a proceeding in rem or one in the nature of or akin a to proceeding in
rem which shall be binding upon all persons, known or unknown (Moscoso vs. Court of appeals, 128 SCRA
719 [1984], citing: City of Manila vs. Lack, et al., 19 Phil. 324, 337; Roxas vs. Enriquez, 29 Phil. 31; Director
of Lands vs. Roman Catholic Archbishop of Manila, 41 Phil. 120; Aguilar vs. Caogdan, 105 Phil. 661). It is
thus evident that respondents' right over the property was barred by res judicata when the decree of
registration was issued to spouses Vivas and Lizards. It does not matter that they may have had
some right even the right of ownership, BEFORE the grant of the Torrens Title.
- Thus, under Section 44 of P.D. 1529, every registered owner receiving a certificate of title in
pursuance of a decree of registration, and every subsequent purchaser of registered land taking a
certificate of title for value and in good faith, shall hold the same free from all encumbrances except
those noted on the certificate and any of the encumbrances which may be subsisting, and
enumerated in the law. Under said provision, claims and liens of whatever character, except those
mentioned by law as existing, against the land prior to the issuance of certificate of title, are cut off
by such certificate if not noted thereon, and the certificate so issued binds the whole world,
including the government (Aldecoa and Co. vs. Warner Barns & Co., 30 Phil. 209 [1915]; Snyder vs.
Fiscal of Cebu and Avila, 42 Phil. 766 [1922]). Under said ruling, if the purchaser is the only party who
appears in the deeds and the registration of titles in the property registry, no one except such
purchaser may be deemed by law to be the owner of the properties in question (Ibid). Moreover, no
title to registered land in derogation to that of the registered owner shall be acquired by prescription
or adverse possession (Umbay vs. Alecha, 135 SCRA 427 [1985]).
- It does not appear that private respondents' claim falls under any of the exceptions provided for under
Section 44 of P.D. 1529 which can be enforced against petitioner herein.
- Thus, it has been invariably restated by this Court, that "The real purpose of the Torrens System is to
quiet title to land and to stop forever any question as to its legality. "Once a title is registered, the
owner may rest secure, without the necessity of waiting in the portals of the court, or sitting on the
"mirador su casato," avoid the possibility of losing his land." "An indirect or collateral attack on a
Torrens Title is not allowed (Dominga vs. Santos, 55 Phil. 361; Singian vs. Manila Railroad, 62 Phil.
467)."
- The only exception to this rule is where a person obtains a certificate of title to a land belonging to
another and he has full knowledge of the rights of the true owner. He is then considered as guilty of
fraud and he may be compelled to transfer the land to the defrauded owner so long as the
property has not passed to the hands of an innocent purchaser for value (Angeles vs. Sania, 66 Phil.
444 [1938], emphasis supplied).

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- It will be noted that the spouses Vivas and Lizardo never committed any fraud in procuring the registration of
the property in question.
- The question therefore, is not about the validity of OCT No. 1728 but in the breach of contract between
private respondents and the Vivas spouses. Petitioner NGA was never a privy to this transaction. Neither
was it shown that it had any knowledge at the time of the execution of the mortgage, of the existence of the
suspensive condition in the deed of absolute sale much less of its violation.
- Unquestionably, therefore, the NGA is an innocent purchaser for value, first as an innocent
mortgagee under Section 32 of P.D. 1529 and later as innocent purchaser for value in the public
auction sale.
- Well settled is the rule that all persons dealing with property covered by a torrens certificate of title
are not required to go beyond what appears on the face of the title. When there is nothing on the
certificate of title to indicate any cloud or vice in the ownership of the property, or any encumbrance
thereon, the purchaser is not required to explore further than what the torrens title upon its face
indicates in quest for any hidden defect or inchoate right that may subsequently defeat his right
thereto (Centeno vs. Court of Appeals, 139 SCRA 545 [1985]).
- Where innocent third persons like mortgagee relying on the certificate of title acquire rights over the
property, their rights cannot be disregarded (Duran vs. IAC, 138 SCRA 489 [1985]).
- Under the circumstances, the Regional Trial Court could not have erred in ruling that plaintiffs (private
respondents herein) complaint insofar as it prays that they be declared owners of the land in question
cannot prosper in view of the doctrine of indefeasibility of title under the Torrens System, because it
is an established principle that a petition for review of the decree of registration will not prosper
even if filed within one year from the entry of the decree if the title has passed into the hands of an
innocent purchaser for value (Pres. Decree No. 1529, Sec. 32). The setting aside of the decree of
registration issued in land registration proceedings is operative only between the parties to the
fraud and the parties defrauded and their privies, but not against acquirers in good faith and for
value and the successors in interest of the latter; as to them the decree shall remain in full force and
effect forever (Domingo vs. The Mayon Realty Corp. et al., 102 Phil. 32 [19571). Assuming, therefore, that
there was fraud committed by the sellers against the buyers in the instant case, petitioner NGA who was not
privy therein cannot be made to suffer the consequences thereof As correctly declared by the trial court, the
National Grains Authority is the lawful owner of the property in question by virtue of its indefeasible title.
- As to private respondents' alternative prayer that the declared owner be ordered to reconvey or transfer the
ownership of the property in their favor, it is clear that there is absolutely no reason why petitioner, an
innocent purchaser for value, should reconvey the land to the private respondents.
- PREMISES CONSIDERED, the decision of the Court of Appeals is REVERSED and SET ASIDE, and
the decision of the Court of First Instance of Laguna and San Pablo City, now Regional Trial Court, is
REINSTATED.

Constructive Notice Everyone is notified of the decree or your ownership despite absence of actual
knowledge. Everyone is bound, even the government and those who do not have actual knowledge of
such. Principle in Land Registration.

- The Supreme Court applied the mirror principle in the NGA v IAC case.
- Mirror Principle: You can rely on the face of the title.
- Exception: If something excites suspicion, any prudent man should go beyond the title and not rely
on its face.

DBT Mar Bay Construction, Inc. v. Panes

- A petition for review on certiorari assailing the decision of the Court of Appeals which was reversed and set
aside by the Regional Trial Court of Quezon City.
- A parcel of land. The property is included in Transfer Certificate of Title (TCT) No. 200519,[5] entered on
July 19, 1974 and issued in favor of B.C. Regalado & Co. (B.C. Regalado). It was conveyed by B.C.
Regalado to petitioner D.B.T. Mar-Bay Construction, Inc. (DBT) through a dacion en pago[6] for
services rendered by the latter to the former.
- Panes and other respondents filed a Complaint for Quieting of Title with Cancellation of the TCT against
Regalado, Mar Bay Realty Inc.
- In the Complaints, Ricaredo alleged that he is the lawful owner and claimant of the subject property which
he had declared for taxation purposes in his name, and assessed in the amount of P2,602,190.00 by the
City Assessor of Quezon City as of the year 1985. Respondents alleged that per Certification[10] of the
Department of Environment and Natural Resources (DENR) National Capital Region (NCR) dated May 7,

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1992, Lot Plan Psu-123169 was verified to be correct and on file in said office, and approved on July 23,
1948.
- Respondents also claimed that Ricaredo, his immediate family members, and the other respondents had
been, and still are, in actual possession of the portions of the subject property, and their possession
preceded the Second World War. To perfect his title in accordance with Act No. 496 (The Land
Registration Act) as amended by Presidential Decree (P.D.) No. 1529 (The Property Registration
Decree), Ricaredo filed with the RTC of Quezon City, Branch 82 a case docketed as LRC Case No. Q-
91-011, with LRC Rec. No. N-62563.[11]

- Respondents averred that in the process of complying with the publication requirements for the
Notice of Initial Hearing with the Land Registration Authority (LRA), it was discovered by the
Mapping Services of the LRA that there existed an overlapping of portions of the land subject of
Ricaredos application, with the subdivision plan of B.C. Regalado. The said portion had, by then,
already been conveyed by B.C. Regalado to DBT.
- Ricaredo asseverated that upon verification with the LRA, he found that the subdivision plan of B.C.
Regalado was deliberately drawn to cover portions of the subject property. Respondents claimed that the
title used by B.C. Regalado in the preparation of the subdivision plan did not actually cover the subject
property.
- RTCs RULING:
RTC Judge Bacalla rendered a decision in favor of the respondents.
- On September 12, 2000, DBT filed a Motion [25] for Reconsideration, based on the grounds of prescription
and laches. DBT also disputed Ricaredos claim of open, adverse, and continuous possession of the subject
property for more than thirty (30) years, and asserted that the subject property could not be acquired by
prescription or adverse possession because it is covered by TCT No. 200519.
- While the said Motion for Reconsideration was pending, Judge Bacalla passed away.
- On November 8, 2001, the RTC, through Judge Juanson, issued an Order [37] reversing the earlier RTC
Decision and dismissing the Complaint for lack of merit. The RTC held that prescription does not run
against registered land; hence, a title once registered cannot be defeated even by adverse, open or
notorious possession. Moreover, the RTC opined that even if the subject property could be acquired
by prescription, respondents' action was already barred by prescription and/or laches because they
never asserted their rights when B.C. Regalado registered the subject property in 1974; and later
developed, subdivided and sold the same to individual lot buyers.
- CAs RULING:
On October 25, 2004, the CA reversed and set aside the RTC Orders dated November 8,
2001 and June 17, 2002 and reinstated the RTC Decision dated June 15, 2000.
The CA held that the properties described and included in TCT No. 200519 are located in
San Francisco del Monte, San Juan del Monte, Rizal and Cubao, Quezon City while the
subject property is located in Brgy. Pasong Putik, Novaliches, Quezon City.
Furthermore, the CA held that Engr. Vertudazo's testimony that there is a gap of around
1,250 meters between Lot 503 and Psu 123169 was not disproved or refuted.
- Petitioner filed a Motion for Reconsideration, [42] which was, however, denied by the CA in its
Resolution[43] dated February 22, 2005. Hence, this petition.
- ISSUES:
1) Did the RTC err in upholding DBT's defenses of prescription and laches as raised
in the latter's Motion for Reconsideration?
2) Which between DBT and the respondents have a better right over the subject
property?
- RULING:
We answer the first question in the affirmative.
- However, the conclusion reached by the RTC in its assailed Order was erroneous. The RTC failed to
consider that the action filed before it was not simply for reconveyance but an action for quieting of title
which is imprescriptible.
- Verily, an action for reconveyance can be barred by prescription. When an action for reconveyance is
based on fraud, it must be filed within four (4) years from discovery of the fraud, and such discovery
is deemed to have taken place from the issuance of the original certificate of title. On the other hand,
an action for reconveyance based on an implied or constructive trust prescribes in ten (10) years

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from the date of the issuance of the original certificate of title or transfer certificate of title. The rule
is that the registration of an instrument in the Office of the RD constitutes constructive notice to the
whole world and therefore the discovery of the fraud is deemed to have taken place at the time of
registration.[47]

However, the prescriptive period applies only if there is an actual need to reconvey the property as
when the plaintiff is not in possession of the property. If the plaintiff, as the real owner of the
property also remains in possession of the property, the prescriptive period to recover title and
possession of the property does not run against him. In such a case, an action for reconveyance, if
nonetheless filed, would be in the nature of a suit for quieting of title, an action that is
imprescriptible.[48]
- Although prescription and laches are distinct concepts, we have held, nonetheless, that in some instances,
the doctrine of laches is inapplicable where the action was filed within the prescriptive period provided by
law. Therefore, laches will not apply to this case, because respondents' possession of the subject property
has rendered their right to bring an action for quieting of title imprescriptible and, hence, not barred by
laches. Moreover, since laches is a creation of equity, acts or conduct alleged to constitute the same must
be intentional and unequivocal so as to avoid injustice. Laches will operate not really to penalize neglect or
sleeping on one's rights, but rather to avoid recognizing a right when to do so would result in a clearly
inequitable situation.[52]
- Albeit the conclusion of the RTC in its Order dated November 8, 2001, which dismissed respondents'
complaint on grounds of prescription and laches, may have been erroneous, we, nevertheless, resolve the
second question in favor of DBT.
- It is a well-entrenched rule in this jurisdiction that no title to registered land in derogation of the
rights of the registered owner shall be acquired by prescription or adverse possession. [53]
- Article 1126[54] of the Civil Code in connection with Section 46[55] of Act No. 496 (The Land
Registration Act), as amended by Section 47[56] of P.D. No. 1529 (The Property Registration Decree),
clearly supports this rule. Prescription is unavailing not only against the registered owner but also against
his hereditary successors. Possession is a mere consequence of ownership where land has been registered
under the Torrens system, the efficacy and integrity of which must be protected. Prescription is rightly
regarded as a statute of repose whose objective is to suppress fraudulent and stale claims from springing up
at great distances of time and surprising the parties or their representatives when the facts have become
obscure from the lapse of time or the defective memory or death or removal of witnesses. [57]
- Thus, respondents' claim of acquisitive prescription over the subject property is baseless. Under Article 1126
of the Civil Code, acquisitive prescription of ownership of lands registered under the Land Registration Act
shall be governed by special laws. Correlatively, Act No. 496, as amended by PD No. 1529, provides that no
title to registered land in derogation of that of the registered owner shall be acquired by adverse
possession. Consequently, in the instant case, proof of possession by the respondents is immaterial and
inconsequential.[58]
- DBT is an innocent purchaser for value and good faith which, through a dacion en pago duly entered into
with B.C. Regalado, acquired ownership over the subject property, and whose rights must be protected
under Section 32[61] of P.D. No. 1529.
- It must also be noted that portions of the subject property had already been sold to third persons who, like
DBT, are innocent purchasers in good faith and for value, relying on the certificates of title shown to them,
and who had no knowledge of any defect in the title of the vendor, or of facts sufficient to induce a
reasonably prudent man to inquire into the status of the subject property. [63] To disregard these
circumstances simply on the basis of alleged continuous and adverse possession of respondents would not
only be inimical to the rights of the aforementioned titleholders, but would ultimately wreak havoc on the
stability of the Torrens system of registration.
While the Torrens system is not a mode of acquiring title, but merely a system of
registration of titles to lands, justice and equity demand that the titleholder should
not 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. The real purpose of the Torrens system is to quiet title to land
and 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.

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Otherwise, the integrity of the Torrens system would forever be sullied by the ineptitude
and inefficiency of land registration officials, who are ordinarily presumed to have regularly
performed their duties.[64] Thus, where innocent third persons, relying on the correctness
of the certificate of title thus issued, acquire rights over the property, the court cannot
disregard those rights and order the cancellation of the certificate. The effect of such
outright cancellation will be to impair public confidence in the certificate of title. The
sanctity of the Torrens system must be preserved; otherwise, everyone dealing with the
property registered under the system will have to inquire in every instance on whether the
title had been regularly or irregularly issued, contrary to the evident purpose of the law.
Every person dealing with the registered land may safely rely on the correctness of the
certificate of title issued therefor, and the law will in no way oblige him to go behind the
certificate to determine the condition of the property.[65]

- WHEREFORE, the instant Petition is GRANTED and the assailed Court of Appeals Decision dated October
25, 2004 is hereby REVERSED and SET ASIDE. A new judgment is hereby
entered DISMISSING the Complaint filed by the respondents for lack of merit.

The registration of the CS on the Registry of Deeds is the reckoning of the one year period.
Equity of Redemption refer to law on Sales
Consolidation ownership is transferred to the highest bidder

Land Registration Authority - agency in charge of the registration of lands under the Torrens System;
central repository of lands titled under the Torren System

Reconstitution if a copy or copies of title is destroyed (owners and vendors copy)


Replacement under Sec. 109 OF PD 1529 if Owners Duplicate Copy

- DBT is a case of overlapping lands and titles.


- In connection to the Torrens Title, titles registered shall not be disturbed especially that it has passed
to purchasers in good faith.
- The Land Registration Authority and Bureau of Lands have the jurisdiction or authority to approve
the Original Subdivision Plan.

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