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[MAKING THE GRADE] Huwag magpabudol sa bilihan o sanglaan ng lupa

Atty. Magi Gunigundo November 20, 2023 at 08:09 AM

There are three basic principles of the Torrens system of land registration which the public are not well versed on. First, the “indefeasibility” of the registered title. Holders of a Certificate of Title shall hold the same free of all encumbrances except those noted on the said certificate. Second, the “mirror principle.” The certificate of title is conclusive evidence both of interests in the land recorded in the certificate and of the description of the dimensions of the shape and size of the land itself. Third, title by registration. Registration of a deed, mortgage, lease or other voluntary instrument purporting to convey or affect registered land, except a last will and testament, is the operative act to convey and affect the land that binds the whole world, including the government (Section 50 of Act 496 and Section 51 of PD 1529). Many have difficulty understanding the first principle.

According to Section 32, PD 1529, the principle of indefeasibility sets in one year from and after the date of the entry of such court decree of registration by the Register of Deeds (RD) that issues an Original Certificate of Title (OCT) in the name of the successful land registration applicant. This means that the OCT can no longer be challenged or questioned in court. But this rule is not absolute.

The OCT is indefeasible if there is no prior valid certificate of title covering the same land. In Register of Deeds v PNB (GR # L-17641 Jan 30,1965) Datu Binasing was granted an OCT in 1935 over a parcel of land in Cotobato. Afterwards, he sold the land to Soledad Teruel. Consequently, the Register of Deeds (RD) issued Transfer Certificates of Title (TCT) to the new owner. Due to World War II, records of the Register of Deeds were burned. Hence, in 1947 Datu Binasing artfully obtained a certified true copy of his 1935 OCT. Claiming that he didn’t have a copy of the original which was lost during the war, the RD issued a new OCT in Datu Binasing’s name. He presented this document to PNB as mortgagor of the same land, which he earlier sold to Teruel, to secure a loan of P10k. PNB foreclosed on the land. Meanwhile, Teruel filed a petition for the reconstitution of TCT because the RD records were burned. When RD discovered that there were two Certificates of Title issued to different people (Teruel and Datu Binasing), RD filed a petition in court to cancel the OCT it issued to Datu Binasing in 1947 because he was no longer the owner of the land. The lower court canceled Datu’s OCT. The High Court said that the OCT for Datu Binasing, which was re-issued in 1947 is not indefeasible and cannot prevail over the TCT held by Teruel as early as 1938. But all is not lost for PNB as it can still enforce its credit against other collateral properties of Datu Binasing, if there are any.

The OCT also cannot grant ownership of public property that cannot be registered such as rivers and creeks ( Martinez v CA [1974]), and public roads ( Ledesma v Municipality of Iloilo 49 Phil 769). The court has no jurisdiction to hear the application for registration of lands that belong to the State which are not alienable and disposable (Dizon v Rodriguez GR # L-20300-01 April 20,1965). Because of this, the Torrens title can be attacked at any time because there is no prescriptive period to revert lands owned by the State. (Republic v Ramona Ruiz GR L-23712, April 29, 1968).

The OCT may also be defeated if fraud or deceit has occurred to obtain the title (Bornales v IAC [1988]). The principle of indefeasibility pertains only to an OCT, it does not cover subsequent TCTs issued after the sale of land. (Arguelles v Timbangcaya GR # L-29052 July 30, 1976).

In spite of the three principles of the Torrens system, it is good practice to observe due diligence in dealing with a seller or mortgagor of land that brandishes his or her OCT or TCT. Review the document carefully; visit the RD and obtain a certified true copy of it and check the day book if there is any recorded deed or instruments adverse to the interest of the seller or mortgagor; conduct an ocular inspection of the land itself and talk to the person occupying the property and inquire as to the basis of his or her physical possession (Mamerto Dy v Aldea, GR 219500 Aug 9.2017). Huwag magpabudol sa bilihan o sanglaan ng lupa.

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