full text cases 6-26

7/28/2019 Full Text Cases 6-26

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THIRD DIVISION

[G.R. No. 148846. September 25, 2007.]

CECILIA AMODIA VDA. DE MELENCION, VENERANDA AMODIA, FELIPE AMODIA,EUTIQUIO AMODIA and GO KIM CHUAN,petitioners, vs. HONORABLE COURT OF APPEALSand AZNAR BROTHERS REALTY COMPANY, respondents.

D E C I S I O N

NACHURA, Jp:

Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Civil Procedure seeking thereversal of the Court of Appeals (CA) Decision2 dated March 30, 2001 and praying that the Decision3 of the RegionalTrial Court (RTC) of Lapu-Lapu City, dated February 18, 1993, be upheld.

The Facts

The subject property is a 30,351 square meter parcel of land (subject property) particularly denominated as Lot No.3368, located at Suba-basbas, Marigondon, Lapu-Lapu City, Cebu, and part of a total area of 30,777 square meterscovered by Transfer Certificate of Title (TCT) No. 206264 (entire property) in the name of the late petitioner Go KimChuan (Go Kim Chuan).5

The entire property was originally owned by Esteban Bonghanoy 6 who had only one child, Juana Bonghanoy-Amodia,7 mother of the late Leoncia Amodia and petitioners Cecilia Amodia Vda. de Melencion, Veneranda Amodia,Felipe Amodia, and Eutiquio Amodia8 (the Amodias). The entire property was brought under the operation of theTorrens System.9 However, the title thereto was lost during the Second World War. DISEaC

On July 10, 1964, the Amodias allegedly executed an Extra-Judicial Partition of Real Estate with Deed of AbsoluteSale10 whereby they extra-judicially settled the estate of Esteban Bonghanoy and conveyed the subject property torespondent Aznar Brothers Realty Company (AZNAR) for a consideration of P10,200.00. On August 10, 1964, the saidExtra-Judicial Partition of Real Estate with Deed of Absolute Sale was registered under Act 334411 as there was no titleon file at the Register of Deeds of Lapu-Lapu City (Register of Deeds). Thereafter, AZNAR made some improvementsand constructed a beach house thereon.

On February 18, 1989, petitioners Cecilia Amodia Vda. de Melencion, Veneranda Amodia, Felipe Amodia and EutiquioAmodia12 (petitioners Amodias) executed a Deed of Extra-Judicial Settlement with Absolute Sale,13 conveying thesubject property in favor of Go Kim Chuan for and in consideration of P70,000.00. The l ost title covering the subject

property was reconstituted pursuant to Republic Act (RA) No. 26. 14A reconstituted title particularly designated asOriginal Certificate of Title (OCT) No. RO-2899 was issued in the name of Esteban Bonghanoy15 and, subsequently, aderivative title (TCT No. 20626) was issued in the name of Go Kim Chuan on December 1, 1989. Thereafter, Go Kim

Chuan exercised control and dominion over the subject property in an adverse and continuconcept of an owner.

On February 14, 1990, AZNAR wrote a letter16 to petitioners Amodias asking the latter tosale entered into between them and Go Kim Chuan. On the same date, a Notice of Adverse

AZNAR on TCT No. 20626. Because petitioners did not heed AZNAR's demand, on April 25against petitioners Amodias and Go Kim Chuan for Annulment of Sale and Cancellation of Tthat the sale to Go Kim Chuan was an invalid second sale of the subject property which haPetitioners Amodias denied that they executed the Extra-Judicial Partition of Real Estate wfavor of AZNAR, claiming that their purported signatures thereon were forged. 19 Trial on

The RTC's Decision

On February 18, 1993, the RTC dismissed AZNAR's complaint and declared Go Kim Chuan subject property. The RTC ratiocinated that the signatures of the Amodias in the Extra-Judwith Deed of Absolute Sale executed in favor of AZNAR were found by the document examConstabulary (PC) Crime Laboratory to be forged, thus, the said deed did not convey anythMoreover, the subject property had been brought under the Land Registration Act; hence, same should have complied with the said law. Finally, the RTC held that AZNAR failed to sacquired the subject property in bad faith.

Aggrieved, AZNAR appealed the RTC Decision to the CA.20

The CA's Decision

On March 30, 2001, the CA rendered a Decision holding that the Extra-Judicial Partition ofAbsolute Sale executed by the Amodias in favor of AZNAR was registered ahead of the Dewith Absolute Sale in favor of Go Kim Chuan, thus, pursuant to Article 1544 of the New Civshould be given preference over the latter; that AZNAR's adverse claim was annotated ear

Deed of Extra-Judicial Settlement with Absolute Sale in favor of Go Kim Chuan; hence, thesaid adverse claim and should have made inquiries as to possible defects that may exist inproperty; and that in the absence of a final determination by a court of proper jurisdiction signatures of the Amodias in the Extra-Judicial Partition of Real Estate with Deed of Absoludocument examiner was insufficient for the RTC to rule in favor of the petitioners.

The CA disposed of the case in this wise:

WHEREFORE, premises considered, the assailed decision dated February 18, 19Trial Court of Lapu-Lapu City, Branch 27, in Civil Case No. 2254-L is hereby REASIDE and a new one is hereby entered as follows:

(1)Declaring plaintiff-appellant Aznar Brothers Realty Company as theland in question;

(2)Declaring both the Deed of Extra-judicial Settlement with Absolute 1, 1989 executed by Felipe Amodia, Cecilia Amodia, Veneran
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Eustaquio Amodia in favor of Go Kim Chuan and the Transfer Certificate of TitleNo. 20626 in the name of Go Kim Chuan as NULL AND VOID;

(3)Ordering Go Kim Chuan to deliver to the aforesaid plaintiff-appellant the possession ofthe land in question and to execute a registrable deed of conveyance of thesubject property to the said plaintiff-appellant. aATEDS

No costs.

SO ORDERED.21

Petitioners filed a Motion for Reconsideration22 which the CA denied in its Resolution23 dated June 5, 2001.

Hence, this Petition based on the following grounds:

I

Lot 3368 was already a registered land under Act 496, thus, the registration by respondent of theDeed of Sale in 1964 under Act 3344 produces no legal effect whatsoever;

II

Even assuming arguendothat the lot in question was duly registered under Act 3344 as anunregistered land, it is without prejudice to better rights and the provision of Article 1544 of theNew Civil Code would be inapplicable;

III

The Honorable Court of Appeals erred in holding that an adverse claim was already existing at thetime the subject land was sold to petitioner Go Kim Chuan; on the contrary, the latter hadpurchased the said land in good faith and for value, without notice of any fact that wouldreasonably impel a closer i nquiry as to the possibility of a defect in the vendor's title; and

IV

The Court of Appeals has misapplied the case ofHeirs of Severa Gregorio v. CA, 300 SCRA 565,cited in support of its ruling that the court a quocommitted error in appreciating the testimony of anexpert witness as to the forgery of the first Deed of Sale.24

In its Comment25 dated September 18, 2001, AZNAR argued, among others, that the Petition is dismissible becausethe Verification and Certification of Non-forum Shopping were not signed by all the petitioners, invoking this Court'sDecision in the case ofLoquias v. Office of the Ombudsman,26 and that the same were signed only by one AprilSocorro Go, daughter of the late Go Kim Chuan, who did not even appear to be authorized to file the i nstant case in

behalf of the other petitioners. HTCISE

In their Reply27 dated October 22, 2001, petitioners contended that April Socorro Go is oand an heir of the late Go Kim Chuan and, as such, she has personal knowledge of the truPetition. Petitioners submitted that they substantially complied with the Rules of Court by a

Verification and Certification of Non-Forum Shopping and since the same are required simthe orderly administration of justice, compliance therewith should not be imposed with abs

On December 19, 2001, petitioners, through counsel, filed a Motion28 for Leave to AdmitReview on Certiorari(Amended Petition). Petitioners manifested that they were seeking todesignation of parties and prayed that the Heirs of Go Kim Chuan, namely, Estrella S. Go, Go, and April Socorro Go be impleaded as petitioners instead of the earlier designated petde Melencion, Veneranda Amodia, Felipe Amodia, Eutiquio Amodia, and Go Kim Chuan. Cothat he inadvertently included the petitioners Amodias in the initial Petition for Review onas they were parties before the RTC and CA. The counsel also manifested that he was onlyKim Chuan in this case. Lastly, he claimed that other than the substitution of the original p

Petition and Amended Petition uniformly raised the same issues and should be given due cof justice and that the instant Motion was not interposed for delay.

Per directive of the Court,30AZNAR filed its Comment31 on the said motion wherein AZNserious objection to the admission of the Amended Petition if the same was intended mereKim Chuan as petitioners. However, AZNAR interposed strong opposition to the Amended names of the petitioners Amodias were deleted without their written consent.

In their Reply,32 the Heirs of Go Kim Chuan, through counsel, claimed that petitioners Amthe Amended Petition because they can no longer be located despite diligent efforts exerteclaims that after the rendition of the assailed CA Decision, he sent several letters to petitioreply; hence, the Heirs of Go Kim Chuan, left with no choice, filed the instant case before t

The Court issued a Resolution33 dated September 16, 2002 giving due course to the Petito submit their respective Memoranda.EcAISC

In their Memorandum,34 petitioners Heirs of Go Kim Chuan reiterate the same issues raisthe Amended Petition. They argue that Act 3344 only refers to transactions affecting landspreviously registered under the Spanish Mortgage Law or under the Torrens system; that iregistered the sale in 1964 under Act 496 because the title over the subject property was availed itself of the remedy of reconstitution; that registration under Act 3344 is without leoperate as constructive notice to petitioners and third persons, hence, may not be used as

Art. 1544 of the New Civil Code; that the Notice of Adverse Claim of AZNAR was annotateFebruary 14, 1990 after the execution of the Deed of Extra-Judicial Settlement with AbsoluChuan on February 18, 1989, hence, the CA erred when it held that Go Kim Chuan was nosupposedly having knowledge of such adverse claim; and that the doctrine laid down in HCA35 is inapplicable since it referred to a case wherein the original copy of the documentproduced in evidence while in the instant case, the original copy of the Extra-Judicial Partitof Absolute Sale executed by the Amodias in favor of AZNAR was presented before the tria

On the other hand, in its Memorandum,36AZNAR maintains that the Original Petition is dVerification and Certification of Non-Forum Shopping thereof were not signed by all the pe
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Without doubt, we have here a case of double sale of registered land. Aproposis Article 1544 of the New Civil Codewhich provides:

ART. 1544.If the same thing should have been sold to different vendees, the ownership shall betransferred to the person who may have first taken possession thereof in good faith, if it should bemovable property.

Should it be immovable property, the ownership shall belong to the person acquiring it who in goodfaith first recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faith was firstin the possession; and, in the absence thereof, to the person who presents the oldest title, providedthere is good faith.

We have already ruled that the registration contemplated in this provision refers to registration under the TorrensSystem, which considers the act of registration as the operative act41 that gives validity to the transfer or creates alien upon the land.42 This rule precisely applies to cases involving conflicting rights over registered property and thoseof innocent transferees who relied on the clean title of the properties.43 Thus, we held that registration must be donein the proper registry in order to bind the same.44 cSCTEH

In the case at bench, it is uncontroverted that the subject property was under the operation of the Torrens System evenbefore the respective conveyances to AZNAR and Go Kim Chuan were made. AZNAR knew of this, and admits this asfact. Yet, despite this knowledge, AZNAR registered the sale in its favor under Act 3344 on the contention that at thetime of sale, there was no title on file. We are not persuaded by such a lame excuse.

Act 3344 provides for the system of recording of transactions or claims over unregistered real estate45 withoutprejudice to a third party with a better right.46 But if the land i s registered under the Land Registration Act (andtherefore has a Torrens Title), and it is sold and the sale is registered not under the Land Registration Act but under Act3344, as amended, such sale is not considered registered, as the term is used under Art. 1544 of the New Civil

Code.47

In this case, since the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale in favor of AZNAR wasregistered under Act No. 3344 and not under Act No. 496, the said document is deemed not registered.48 Rather, itwas the sale in favor of Go Kim Chuan which was registered under Act No. 496.

AZNAR insists that since there was no Torrens title on file in 1964, insofar as the vendors, AZNAR, and the Register ofDeeds are concerned, the subject property was unregistered at the time. The contention is untenable. The fact that thecertificate of title over the registered land is lost does not convert it into unregistered land. After all, a certificate of titleis merely an evidence of ownership or title over the particular property described therein.49 This Court agrees with thepetitioners that AZNAR should have availed itself of the legal remedy of reconstitution of the lost certificate of title,instead of registration under Act 3344. We note that in Aznar Brothers Realty Company v. Aying,50AZNAR, beset withthe similar problem of a lost certificate of title over a registered land, sought the reconstitution thereof. It is unfortunatethat, in the instant case, despite the sale of the subject property way back in 1964 and the existence of the remedy ofreconstitution at that time, AZNAR opted to register the same under the improper registry (Act 3344) and allowed suchstatus to lie undisturbed. From 1964 to 1989, AZNAR did not bother to have the lost title reconstituted or even have the

subject property declared under its name for taxation purposes. Vigilantibus, non dormientibus, jura subveniunt. Lawsmust come to the assistance of the vigilant, not of the sleepy.51 IEaCDH

Although it is obvious that Go Kim Chuan registered the sale in his favor under Act 496 whcannot make an outright award of the subject property to the petitioners solely on that basregistration of title is not enough. Good faith must accompany the registration.

Thus, to be able to enjoy priority status, the second purchaser must be in good faith, i.e., of the previous alienation of the property by the vendor to another. Notably, what is imporwhether the second buyer is a buyer in good faith, but whether he registers the second sadoes so without knowledge of any defect in the title over the property sold.52

To fully resolve the second question, therefore, it is imperative that we determine whetherregistrant in good faith.

The CA found that AZNAR registered its Notice of Adverse Claim ahead of the Deed of ExtAbsolute Sale in favor of Go Kim Chuan. Because of this, the CA declared that Go Kim Chu

faith, because he should have respected such adverse claim or, at least, inquired into the v

We do not agree.

While factual issues are not within the province of this Court, as it is not a trier of facts anthe oral and documentary evidence de novo, this Court has the authority to review and, infactual findings of lower courts in the following instances: (a) when the findings of fact of with those of the appellate court; (b) when the judgment of the appellate court is based oand, (c) when the appellate court manifestly overlooked certain relevant facts which, if pro

justify a different conclusion.53

The instant case falls squarely within the foregoing exceptions.

Concededly, inscription of an adverse claim serves as a warning to third parties dealing withat someone claims an interest therein or that there is a right superior to that of the titled

pointed out by petitioners and as admitted by AZNAR, the Notice of Adverse Claim was anonly on February 4, 1990, after the lost certificate of title was reconstituted and after the iname of Go Kim Chuan on December 1, 1989. It is, therefore, absurd to say that Go Kim Cadverse claim which was not previously annotated on the lost title or on the new one, or bhe did not have any knowledge of.AcSEHT

Citing Santiago v. Court of Appeals,55AZNAR contends that even if the adverse claim wa20626 only on February 4, 1990, the prior registration of the sale i n its favor under Act 334notice to Go Kim Chuan and thus negates the latter's claim of good faith, since the Court h"Registration, however, by the first buyer under Act 3344 can have the effect of constructthat can defeat his right as such buyer in good faith."

AZNAR's reliance on Santiago is misplaced. In Santiago, the f irst buyers registered the saleas can be inferred from the issuance of the TCT in their names. There was no registration in the instant case, AZNAR registered the sale in its favor under Act 3344 despite its full knproperty is under the operation of the Torrens System. To repeat, there can be no construbuyer through registration under Act 3344 if the property is registered under the Torrens s
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Moreover, before buying the subject property, Go Kim Chuan made verifications with the Office of the City Assessor ofLapu-Lapu City and the Register of Deeds. He likewise visited the premises of the subject property and found thatnobody interposed any adverse claim against the Amodias. After he decided to buy the subject property, he paid alltaxes in arrears, caused the publication of the Deed of Extra-Judicial Settlement with Absolute Sale i n a newspaper ofgeneral circulation, caused the reconstitution of the lost certificate of title and caused the issuance of the assailed TCTin his name.57 Given these antecedents, good faith on the part of Go Kim Chuan cannot be doubted.

We also note that AZNAR's complaint for cancellation of title contains no allegation that the (second) purchaser wasaware of defects in his title. In the absence of such an allegation and proof of bad faith, it would be grosslyinappropriate for this Court to render judgment against the purchaser who had already acquired title not only becauseof lack of evidence, but also because of the indefeasibility and conclusiveness of such title. 58

Finally, it is worth stressing that the Torrens system was adopted in this country because it was believed to be the mosteffective measure to guarantee the integrity of land titles and to insure 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 isvalid, he should not run the ris k of losing his acquisition. If this were permitted, public confidence in the system wouldbe eroded and land transactions would have to be attended by complicated and not necessarily conclusiveinvestigations and proof of ownership.59AaIDCS

WHEREFORE, the instant petition for review is GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No. 51814is REVERSED and SET ASIDE. The Decision of the Regional Trial Court of Lapu-Lapu City, Branch 27, in Civil Case No.2254-L, is REINSTATED. No costs.

SO ORDERED.

SECOND DIVISION

[G.R. No. 171571. March 24, 2008.]

REPUBLIC OF THE PHILIPPINES, Represented by MACTAN-CEBU INTEAIRPORT AUTHORITY (MCIAA), petitioner,vs. HEIRS OF FRANCISCA DInamely: TEODORO SORONO, LUCIO SORONO, JR., ARSENIO T. SORONOLIVAR, ALFONSA T. SORONO, CONSTANCIO S. LUMONGSOD, EULALIand FLORENCIA S. BAGUIO; HEIRS OF JUAN L. AMISTOSO, 1namely: AMISTOSO, LYN-LYN AMISTOSO, ALLAN L. AMISTOSO, RAQUEL S. AMEUFRONIO S. AMISTOSO, JR., and ROGELIO S. AMISTOSO; HEIRS OF AMISTOSO, namely: VICTOR A. YAGONG, HEDELIZA A. YAGONG, and YAGONG; HEIRS OF PASTOR DIGNOS; HEIRS OF ISABEL DIGNOS, nam

NAPOLEON A. AMORES, VICENTE A. BASMAYOR, DOMINGO A. BASMAYBASMAYOR; HEIRS OF DONATA DIGNOS, namely: TRINIDAD D. FUENFUENTES, and IRINEO D. FUENTES; HEIRS OF SEGUNDA DIGNOS, namD. CORTES and BENIGNO D. CORTES; HEIRS OF GREGORIA DIGNOS, nFUENTES and JOSE D. FUENTES; HEIRS OF DOMINGO FUENTES, nameDIGNOS and BASILIO P. DIGNOS; and HEIR OF ISABELO DIGNOS, naDIGNOS,2respondents.

D E C I S I O N

CARPIO-MORALES , Jp:

Assailed via petition for review on certiorariis the April 23, 2005 decision of the Court of ARegional Trial Court (RTC) of Lapu-lapu City, Branch 54.4

Lot Nos. 2296 and 2316 of the Cadastral Survey of Opon, Lapu-lapu City were adjudicatedthen Court of First Instance of Cebu in favor of the following in four equal shares:

a)Francisca Dignos, married to Blas Sorono 1/4 share in the two lots;

b)Tito Dignos, married to Candida Torrebillas 1/4 share in the two lots;

c)Isabel Dignos, married to Fabiano Amores;

Donata Dignos, married to Estanislao Fuentes;

Segunda Dignos, married to Demetrio Cortes;

Gregoria Dignos, married to Severo Fuentes;
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Domingo Dignos, married to Venturada Potot; and

Isabelo Dignos, married to Petronilla Gamallo 1/4 share in the two lots; and

d)Silveria Amistuoso, married to Melecio Tumulak;

Mario Amistuoso, married to Rufina Tampus;

Juan Amistuoso, married to Narcisa Cosef;

Brigilda Amistuoso, married to Casimiro Yagong; and

Pastor Amistuoso, widower 1/4 share in the two lots.5

It appears that the two lots were not partitioned by the adjudicatees.

It appears further that the heirs of Tito Dignos, who, as reflected above, was awarded 1/4 share in the two lots, sold forP2,565.59 the entire two lots to the then Civil Aeronautics Administration (CAA) via a public instrument entitled"Extrajudicial Settlement and Sale" executed on October 11, 1957, without the knowledge of respondents whosepredecessors-in-interest were the adjudicatees of the rest of the 3/4 portion of the two lots.6

In 1996, CAA's successor-in-interest, the Mactan Cebu International Airport Authority (MCIAA), erected a security fencetraversing Lot No. 2316 and relocated a number of families, who had built their dwellings within the airport perimeter,to a portion of said lot to enhance airport security in line with the standards set by the International Civil AviationOrganization and the Federal Aviation Authority.

MCIAA later caused the issuance in its name of Tax Declaration No. 00548 covering Lot No. 2296 and Tax DeclarationNo. 00568 covering Lot No. 2316.

Respondents soon asked the agents of MCIAA to cease giving third persons permission to occupy the lots but the samewas ignored.

Respondents thereupon filed on January 8, 1996 a Complaint for Quieting of Title, Legal Redemption with Prayer for aWrit of Preliminary Injunction against MCIAA before the RTC of Lapu-lapu City,7alleging that the existence of the taxdeclarations "would cast a cloud on their valid and existing titles" to the lots. They alleged that "corresponding originalcertificates of title in favor of the decreed owners were . . . issued but the same could no longer be found and l ocated,and in all probability, were lost during the Second World War."8(This claim was not specifically denied by petitioner inits Answer with Counterclaim).9

Respondents further alleged that neither they nor their predecessors-in-interests sold, alienated or disposed of theirshares in the lots of which they have been in continuous peaceful possession.

Respondents furthermore alleged that neither petitioner nor i ts predecessor-in-interest had given them any writtennotice of its acquisition of the 1/4 share of Tito Dignos.

Respondents thus prayed as follows:

1)Upon the filing of this complaint, that a restraining order be issued enjoiningany of its officers, agents, employees, and any third person acting on their behoccupying their portions of Lots 2296 and 2316, Opon Cadastre, and upon dueto issue the corresponding writ of preliminary injunction for the same purpose;

2)To declare the tax declarations of the defendant or any of its predecessors-inLots 2296 and 2316, Opon Cadastre, to be null and void:

3)To grant unto the plaintiffs the right of preemption in the sale of the one-fouDignos in the above-mentioned parcels of land under the provisions of Articles the Civil Code;

4)To order the defendant to reimburse plaintiffs the sum of P10,000.00 acceptaP1,000.00 per appearance fee, the sum of P10,000.00 for costs of litigation;

5)To order the defendant to pay the plaintiffs the sum of P100,000.00 for mora

Plaintiffs further pray for such orders as may be just and equitable under thepremises.10(Underscoring supplied)

Republic of the Philippines, represented by the MCIAA (hereafter petitioner), in its AnswerCounterclaim,11maintained that from the time the lots were sold to its predecessor-in-inopen, continuous, exclusive, and notorious possession thereof; through acquisitive prescriptitle to the lots since it was a purchaser in good f aith and for value; and assuming arguendtitle, it had, by possession for over 30 years, acquired ownership thereof by extraordinary

At all events, petitioner contended that respondents' action was barred by estoppel and la

The trial court found for respondents. It held that respondents and their predecessors-in-icontinuous possession of their shares in the lots, and were disturbed of such possession oput up the security fence that traversed Lot No. 2316 and relocated families that had built airport perimeter to a portion of said lot.

On petitioner's claim that it had acquired ownership by extraordinary prescription, the triaground that registered lands cannot be the subject of acquisitive prescription.

Neither, held the trial court, had respondents' action prescribed, as actions for quieting of plaintiffs are in possession of the property in question, as in the case of herein respondent

On petitioner's defense of laches, the trial court also brushed the same aside in l ight of its who have long been in possession of the lots, came to know of the sale only in 1996. The respondents could not be charged with constructive notice of the 1957 Extrajudicial SettleCAA as it was erroneously registered under Act No. 3344,12the law governing recording relating to real estate which are notregistered under the Torrens system. The subject lots

court found, the registration of the deed should have been made under Act No. 496,13thfine, the trial court held that the registration of the deed under Act No. 3344 did not operathe whole world.14
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Concluding, the trial court held that the questioned sale was valid only with respect to Tito Dignos' 1/4 share of the lots,and that the sale thereof was subject to the right of legal redemption by respondents following Article 1088 of the CivilCode, reading:

Should any of the heirs sell his hereditary rights to a stranger before partition, any or all of the co-heirs may be subrogated to the rights of the purchaser by reimbursing him for the price of the sale,provided they do so within the period of one month from the time they were notified in writing ofthe sale by the vendor.

In light of its finding that the heirs of Tito Dignos did not give notice of the sale to respondents, the trial court held thatthe period for legal redemption had not yet lapsed; and the redemption price should be 1/4 of the purchase price paidby the CAA for the two lots.

The trial court thus disposed:

WHEREFORE, all premises considered, the Court rules in favor of plaintiffs and hence rendersjudgment:

a)Declaring Tax Declarations Nos. 00915 and 00935, as well as all other tax declarations coveringLot 2296 and Lot 2316 under the names of the Civil Aeronautics Administration, the Bureau of AirTransportation and the defendant Mactan Cebu International Airport Authority, as null and void anddirecting the City Assessor of Lapu-Lapu City to cancel them;

b)Declaring the Extrajudicial Settlement and Sale affecting Lot 2296 and Lot 2316 (Exhibit "H" forplaintiffs) as void and ineffective as regards the three-fourth[s] (3/4) shares of plaintiffs in both lotsand declaring the herein plaintiffs as owners of such three fourth[s] shares and; aHTcDA

c)Ordering the defendant to resell to plaintiffs for a total price of Six Hundred forty Pesos (P640.00)the one-fourth (1/4) shares in Lot 2296 and Lot 2316 it had purchased from the heirs of the late

Tito Dignos in 1957;

No pronouncement as to costs.

SO ORDERED.15

As priorly stated, the Court of Appeals affirmed the trial court's decision.

Hence, the present petition for review on certiorariwhich proffers the following:

GROUNDS FOR ALLOWANCE OF THE PETITION

THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE TRIAL COURT'S DECISION WHENRESPONDENTS NO LONGER HAVE ANY RIGHT TO RECOVER LOTS 2296 AND 2316 DUE TO THE

PRIOR SALE THEREOF TO THE REPUBLIC AND UPON THE EQUITABLE GROUNAND LACHES.16

The petition fails.

Article 493 of the Civil Code provides:

Each co-owner shall have the full ownership of his part and of the fruits and bethereto, and he may therefore alienate, assign or mortgage it, and even substitin its enjoyment, except when personal rights are involved. But the effect of thmortgage, with respect to the co-owners, shall be limited to the portion which him in the division upon the termination of the co-ownership.

Aproposis the following pertinent portion of this Court's decision in Bailon-Casilao v. CA:

As early as 1923, this Court has ruled that even if a co-owner sells the whole psale will affect only his own share but not those of the other co-ownersconsent to the sale [Punsalan v. Boon Liat, 44 Phil. 320 (1923)]. This is becauaforementioned codal provision, the sale or other disposition affects only his unthe transferee gets only what would correspond to his grantor in the partition ocommon. [Ramirez v. Bautista, 14 Phil. 528 (1909)]. Consequently, by virtue oRosalia and Gaudencio Bailon which are valid with respect to their proportionatsubsequent transfers which culminated in the sale to private respondent Celest

Afable thereby became a co-owner of the disputed parcel of land as correctly hcourt since the sales produced the effect of substituting the buyers in the enjoyv. Bandoy, 14 Phil. 730 (1910)].

From the foregoing, it may be deduced that since a co-owner is entitled to sell a sale of the entire property by one co-owner without the consent of the other

null and void. However, only the rights of the co-owner-seller are tranmaking the buyer a co-owner of the property.17(Emphasis and undersc

Petitioner's predecessor-in-interest CAA thus acquired only the rights pertaining to the sellis only 1/4 undivided share of the two lots.

Petitioner's insistence that it acquired the property through acquisitive prescription, if not odoes not lie. The trial court's discrediting thereof is well taken. It bears emphasis at this juSettlement and Sale forged by CAA and Tito Dignos' heirs in 1957, the following material pclaim of respondents that the two lots were registered:

xxx xxx xxx

4.That since the Original Transfer Certificate of Title of the above-mentioned pbeen lost and/or destroyed, or since the said lot/s is/are covered by Cadastral C

decree issued on March 19, 1930, bearing Decree No./s 474824 & 474825, andbinds itself to reconstitute said title/s at its own expense and that the HEIRS-V
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successors and assigns bind themselves to help in the reconstitution of title so that the said lot/smay be registered in the name of the VENDEE in accordance with law[.] 18

xxx xxx xxx

The trial court's discrediting of petitioner's invocation of laches and prescription of action is well-taken too.

As for petitioner's argument that the redemption price should be 1/4 of the prevailing market value, not of the actualpurchase price, since, so it claims, "(1) they received just compensation for the property at the time it was purchasedby the Government; and, (2) the property, due to improvements introduced by petitioner in its vicinity, is now worthseveral hundreds of millions of pesos",19the law is not on its side. Thus, Article 1088 of the Civil Code provides:

Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all of theco-heirs may be subrogated to the rights of the purchaser by reimbursing him for the price ofthe sale, provided they do so within the period of one month from the time they were notified inwriting of the sale by the vendor. (Emphasis and underscoring supplied)

The Court may take judicial notice of the increase in value of the lots. As mentioned earlier, however, the heirs of TitoDignos did not notify respondents about the sale. At any rate, since the Extrajudicial Settlement and Sale stipulates,thus:

That the HEIRS-VENDORS, their heirs, assigns and successors, undertake and agree to warrantand defend the possession and ownership of the property/ies herein sold against anyand all just claims of all persons whomsoever and should the VENDEE be disturbed in itspossession, to prosecute and defend the same in the Courts of Justice20(Emphasis andunderscoring supplied),

petitioner is not without any remedy. This decision is, therefore, without prejudice to petitioner's right to seekredress against the vendors-heirs of Tito Dignos and their successors-in-interest.

WHEREFORE, the petition is, in light of the foregoing disquisition, DENIED.

FIRST DIVISION

[G.R. No. 8936. October 2, 1915.]

CONSUELO LEGARDA, with her husband MAURO PRIETO , plaintiffs-appSALEEBY, defendant-appellee.

Singson, Ledesma & Limfor appellants.

D. R. Williamsfor appellee.

SYLLABUS

1.REGISTRATION OF LAND; REGISTRATION OF SAME LAND IN THE NAMES OPERSONS. L obtained a decree of registration of a parcel of land on the 25th of OctobMarch, 1912, obtained a certificate of registration for his land which joined the land therThe certificate of title issued to S included a narrow strip of the land theretofore register13th of December, 1912, L presented a petition in the Court of Land Registration for theof the error committed in the certificate issued to S, which i ncluded said narrow strip of where two certificates of title include or cover the same land, the earlier in date must proriginal parties, whether the land comprised in the latter certificate be wholly or only in earlier certificate. In successive registrations where more than one certificate is issued ininterest in land, the person holding under the prior certificate is entitled to the l and as aobtained the second certificate. The decree of registration is conclusive upon and agains

2.ID.; PURPOSE OF THE TORRENS SYSTEM. The real purpose of the torrensis to quiet title to land; to put a stop forever to any question of the legality of the title, e

noted, at the time of registrations in the certificate, or which may arise subsequent therof the law, it would seem that once the title was registered, the owner might rest securewaiting in the portals of the court, or sitting in the "mirador de su casa," to avoid the poThe proceeding for the registration of land under the torrens system is a judicial proceedits consequences than does an ordinary action.

3.ID; ID.; EFFECT OF REGISTRATION AND CERTIFICATE OF TITLE. The regsystem and the issuance of a certificate of title do not give the owner any better title thaobtain title by virtue of the certificate. He secures his certificate by virtue of the fact thaIf he obtains a certificate of title, by mistake, to more land than he really and in fact owcorrected. If he does not already have a perfect title, he can not secure his certificate. Hand presenting sufficient proof of that fact, he is entitled to a certificate of registration. Tregistration simply accumulates, in one document, a precise and correct statement of thesimple title, which the owner, in fact, has. The certificate, once issued, is the evidence ohas. The certificate should not be altered, changed, modified, enlarged or diminished, exsome direct proceedings permitted by law. The title represented by the certificate can nomodified, enlarged or diminished in a collateral proceeding.
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D E C I S I O N

JOHNSON, Jp:

From the record the following facts appear:

First. That the plaintiffs and the defendant occupy, as owners, adjoining lots in the district of Ermita in thecity of Manila.

Second. That there exists and has existed for a number of years a stone wall between the said lots. Saidwall is located on the lot of the plaintiffs.

Third. That the plaintiffs, on the 2d day of March, 1906, presented a petition in the Court of LandRegistration for the registration of their lot. After a consideration of said petition the court, on the 25th day of

October, 1906, decreed that the title of the plaintiffs should be registered and issued to them the original certificateprovided for under the torrens system. Said registration and certificate included the wall.

Fourth. Later the predecessor of the defendant presented a petition in the Court of Land Registration forthe registration of the lot now occupied by him. On the 25th day of March, 1912, the court decreed the registrationof said title and issued the original certificate provided for under the torrens system. The description of the lotgiven in the petition of the defendant also included said wall.

Fifth. Several months later (the 13th day of December, 1912) the plaintiffs discovered that the wall whichhad been included in the certificate granted to them had also been included in the certificate granted to thedefendant. They immediately presented a petition in the Court of Land Registration for an adjustment andcorrection of the error committed by including said wall in the registered title of each of said parties. The lowercourt however, without notice to the defendant, denied said petition upon the theory that, during the pendency ofthe petition for the registration of the defendant's land, they failed to make any objection to the registration of saidlot, including the wall, in the name of the defendant.

Sixth. That the land occupied by the wall is registered in the name of each of the owners of the adjoininglots. The wall is not a joint wall.

Under these facts, who is the owner of the wall and the land occupied by it?

The decision of the lower court is based upon the theory that the action for the registration of the lot ofthe defendant was a judicial proceeding and that the judgment or decree was binding upon all parties who did notappear and oppose it. In other words, by reason of the f act that the plaintiffs had not opposed the registration ofthat part of the lot on which the wall was situate they had lost it, even though it had been theretofore registered intheir name. Granting that theory to be the correct one, and granting even that the wall and the land occupied by it,in fact, belonged to the defendant and his predecessors, then the same theory should be applied to the defendanthimself. Applying that theory to him, he had already lost whatever right he had therein, by permitting the plaintiffsto have the same registered in their name, more than six years before. Having thus lost his right, may he bepermitted to regain it by simply including it in a petition for registration? The plaintiffs having secured theregistration of their lot, including the wall, were they obliged to constantly be on the alert and to watch all theproceedings in the l and court to see that some one else was not having all, or a portion of the same, registered? Ifthat question is to be answered in the affirmative, then the whole scheme and purpose of the torrens system ofland registration must fail. The real purpose of that system is to quiet title to land; to put a stop forever to anyquestion of the legality of the title, except claims which were noted at the time of registration, in the certificate, orwhich may arise subsequent thereto. That being the purpose of the law, it would seem that once a title isregistered 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, i t can not be denied that the proceeding

for the registration of land under the torrens system is judicial (Escueta vs. Director of Lis clothed with all the forms of an action and the result is final and binding upon all the w(Escueta vs. Director of Lands (supra); Grey Alba vs. De la Cruz, 17 Phil. Rep., 49; RoxaRep., 31; Tyler vs. Judges, 175 Mass., 71; American Land Co. vs. Zeiss, 219 U. S., 47.)

While the proceeding is judicial, it involves more in its consequences than doesworld are parties, including the government. After the registration is complete and final there are no innocent third parties who may claim an interest The rights of all the worlddecree of registration. The government itself assumes the burden of giving notice to all who are parties in the registration proceeding (and they are all the world) to again litigato again cast doubt upon the validity of the registered title, would destroy the very purpThe registration, under the torrens system, does not give the owner any better title than already have a perfect title, he can not have it registered. Fee simple titles only may be of registration accumulates in one document a precise and correct statement of the exacits owner. The certificate, in the absence of fraud, is the evidence of title and shows exa

owner. The titleonce registered, with very few exceptions, should not thereafter be impmodified, enlarged, or diminished, except in some direct proceeding permitted by law. Oregistered titles would be lost. A registered title can not be altered, modified, enlarged, a collateralproceeding and not even by a direct proceeding, after the lapse of the period

For the difficulty involved in the present case the Act (No. 496) providing for thunder the torrens system affords us no remedy. There is no provision in said Act giving conditions like the present. There is nothing in the Act which indicates who should be thbeen registered in the name of two different persons.

The rule, we think, is well settled that the decree ordering the registration of a a bar to future litigation over the same between the same parties. In view of the fact thait must follow that future litigation over the title i s forever barred; there can be no Persothe action. This, we think, is the rule, except as to rights which are noted in the certificasubsequently, and with certain other exceptions which need not be discussed at presentnot be defeated, even by an adverse, open, and notorious possession. Registered title ucan not be defeated by prescription (section 46, Act No. 496). The title, once registeredpersons must take notice. No one can plead ignorance of the registration.

The question, who is the owner of land registered in the name of two differentpresented to the courts in other jurisdictions. In some jurisdictions, where the "torrens" the difficulty has been settled by express statutory provision. In others it has been settlehis excellent discussion of the "Australian Torrens System," at page 823, says: "The genof two certificates of title, purporting to include the same land, the earlier in date prevacomprised in the latter certificate be wholly, or only in part, comprised in the earlier cert2 Q. S. C. R., 193; Miller vs. Davy, 7 N. Z. R., 155; Lloyd vs. May-field, 7 A. L. T. (V.) 48

V. L. R., 152; Register of Titles vs. Esperance Land Co., 1 W. A. R., 118.)" Hogg adds hoclearly ascertained by the ordinary rules of construction relating to written documents, tin the certificate of title of prior date is a mistake, the mistake may be rectified by holdincertificates of title to be conclusive." (See Hogg on the "Australian Torrens System," supalso the excellent work of Niblack in his "Analysis of the Torrens System," page 99.) Nibgeneral question, said: "Where two certificates purport to include the same land the earsuccessive registrations, where more than one certificate is issued in respect of a particu

land, the person claiming under the prior certificate is entitled to the estate or interest; ato hold under the prior certificate who is the holder of, or whose claim is derived directlyperson who was the holder of the earliest certificate issued in respect thereof. While the


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expressly cover the case of the issue of two certificates for the same land, they provide that a registered ownershall hold the title, and the effect of this undoubtedly is that where two certificates purport to include the sameregistered land, the holder of the earlier one continues to hold the title" (p. 237).

Section 38 of Act No. 496, provides that; "It (the decree of registration) shall be conclusive upon andagainst all persons, including the Insular Government and all the branches thereof, whether mentioned by name inthe application, notice, or citation, or included in the general description 'To all whom it may concern.' Such decreeshall not be opened by reason of the absence, infancy, or other disability of any person affected thereby, nor byany proceeding in any court for reversing judgments or decrees; subject, however, to the right of any persondeprived of land or of any estate or interest therein by decree of registration obtained by fraudto file in the Courtof Land Registration a petition for review within one yearafter entry of the decree (of registration), provided noinnocent purchaser for value has acquired an interest."

It will be noted, from said section, that the "decree of registration" shall not be opened, for anyreason,in anycourt, except for fraud, and not even for fraud, after the lapse ofone year. If then the decree of registrationcan not be opened for anyreason, except for fraud, in a direct proceeding for that purpose, may such decree be

opened or set aside in a collateral proceeding by including a portion of the land in a subsequent certificate ordecree of registration? We do not believe the law contemplated that a person could be deprived of his registeredtitle in that way.

We have in this jurisdiction a general statutory provision which governs the right of the ownership of landwhen the same is registered in the ordinary registry in the name of two different persons. Article 1473 of the CivilCode provides, among other things, that when one piece of real property has been sold to two different persons itshall belong to the person acquiring it, who first inscribes it in the registry. This rule, of course, presupposes thateach of the vendees or purchasers has acquired title to the land. The real ownership in such a case depends uponpriority of registration. While we do not now decide that the general provisions of the Civil Code are applicable tothe Land Registration Act, even though we see no objection thereto, yet we think, in the absence of other expressprovisions, they should have a persuasive influence in adopting a rule for governing the effect of a doubleregistration under said Act. Adopting the rule which we believe to be more in consonance with the purposes andthe real intent of the torrens system, we are of the opinion and so decree that in case land has been registeredunder the Land Registration Act in the name of two different persons, the earlier in date shall prevail.

In reaching the above conclusion, we have not overlooked the forceful argument of the appellee. He says,

among other things; "When Prieto et al. were served with notice of the application of Teus (the predecessor of thedefendant) they became defendants in a proceeding wherein he, Teus, was seeking to foreclose their right, andthat of others, to the parcel of land described in his application. Through their failure to appear and contest hisright thereto, and the subsequent entry of a default judgment against them, they became irrevocably bound by thedecree adjudicating such land to Teus. They had their day in court and cannot set up their own omission as groundfor impugning the validity of a judgment duly entered by a c ourt of competent jurisdiction. To decide otherwisewould be to hold that lands with torrens titles are above the law and beyond the jurisdiction of the courts."

As was said above, the primary and fundamental purpose of the torrens system is to quiet title. If theholder of a certificate cannot rest secure in his registered title then the purpose of the law is defeated. If thosedealing with registered land cannot rely upon the certificate, then nothing has been gained by the registration andthe expense incurred thereby has been in vain. If the holder may lose a strip of his registered land by the methodadopted in the present case, he may lose it all. Suppose within the six years which elapsed after the plaintiff hadsecured their title they had mortgaged or sold their right, what would be the position or right of the mortgagee orvendee? That mistakes are bound to occur cannot be denied, and sometimes the damage done thereby isirreparable. It is the duty of the courts to adjust the rights of the parties under such circumstances so as tominimize such damages, taking into consideration all of the conditions and the diligence of the respective parties to

avoid them. In the present case, the appellee was first negligent (granting that he was the real owner, and if hewas not the real owner he can not complain) in not opposing the registration in the name of the appellants. He wasa party-defendant in an action for the registration of the lot in question, in the name of the appellants, in 1906.

"Through his failure to appear and to oppose such registration, and the subsequent entragainst him, he became irrevocably bound by the decree adjudicating such land to the ain court and should not be permitted to setup his own omissions as the ground for impu

judgment duly entered by a court of competent jurisdiction." Granting that he was the owhich the wall is located, his failure to Oppose the registration of the same in the nameabsence of fraud, forever closes his mouth against impugning the validity of that judgmreason why the doctrine invoked by the appellee should be applied to the appellants than

We have decided, in case of double registration under the Land Registration Acearliest certificate is the owner of the land. That is the rule between original parties. Masuccessive vendees of the owners of such certificates? Suppose that one or the other oferror is discovered, transfers his original certificate to an "innocent purchaser. "The geneof land has no greater right, title, or interest than his vendor; that he acquires the right Under that rule the vendee of the earlier certificate would be the owner as against the velater certificate.

We find statutory provisions which, upon first reading, seem to cast some doubvendee acquires the interest of the vendor only. Sections 38, 55, and 112 of Act No. 496may acquire rights and be protected against defenses which the vendor would not. Saidrights in favor of third parties which are cut off by virtue of the sale of the land to an "into say, persons who had had a right or interest in land wrongfully included in an originato enforce such rights against an "innocent purchaser," by virtue of the provisions of saicase Teus had his land, including the wall, registered in his name. He subsequently soldIs the appellee an "innocent purchaser," as that phrase is used in said sections? May thodeprived of their land by reason of a mistake in the original certificate in favor of Teus bthe same, by virtue of the sale by him to the appellee? Suppose the appellants had soldto an "innocent purchaser," would such purchaser be included in the phrase "innocent pused in said sections? Under these examples there would be two innocent purchasers ofsections are to be applied. Which of the two innocent purchasers, if they are both to be purchasers, should be protected under the provisions of said sections ? These questionswhich we are met in giving meaning and effect to the phrase "innocent purchaser," in sa

May the purchaser of land which has been included in a "second original certifican "innocent purchaser," as against the rights or interest of the owner of the first originassigns, or vendee? The first original certificate is recorded in the public registry. It is nerecorded. The record is notice to all the world. All persons are charged with the knowledpersons dealing with the land so recorded, or any portion of it, must be charged with nocontains. The purchaser is charged with notice of every fact shown by the record and is fact which the record discloses. This rule is so well established that it is scarcely necessasupport (Northwestern National Bankvs. Freeman, 171 U. S., 620, 629; Delvinon Real E[a]).

When a conveyance has been properly recorded such record is constructive nointerests, legal and equitable, included therein. (Grandin vs. Anderson, 15 Ohio State, 217 Conn., 97; Buchanan vs. International Bank, 78 Ill., 500; Youngs vs. Wilson, 27 N. YCal., 509; Montefiore vs. Browne, 7 House of Lords Cases, 341.)

Under the rule of notice, it is presumed that the purchaser has examined everyaffecting the title. Such presumption is irrebutable. He is charged with notice of every fais presumed to know every fact which an examination of the record would have disclosebe overcome by proof of innocence or good faith. Otherwise the very purpose and objec


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record would be destroyed. Such presumption cannot be defeated by proof of want of knowledge of what therecord contains anymore than one may be permitted to show that he was ignorant of the provisions of the law. Therule that all persons must take notice of the facts which the public record contains is a rule of law. The rule must beabsolute. Any variation would lead to endless confusion and useless litigation.

While there is no statutory provision in force here requiring that original deeds of conveyance of realproperty be recorded, yet there is a rule requiring mortgages to be recorded. (Arts. 1875 and 606 of the CivilCode.) The record of a mortgage is indispensable to its validity. (Art. 1875.) In the face of that statute would thecourts allow a mortgage to be valid which had not been recorded, upon the plea of ignorance of the statutoryprovision, when third parties were interested? May a purchaser of land, subsequent to the recorded mortgage,plead ignorance of its existence, and by reason of such ignorance have the land released from such lien? Could apurchaser of land, after the recorded mortgage, be relieved from the mortgage lien by the plea that he was a bonafidepurchaser? May there be a bona fidepurchaser of said land, bona fide in the sense that he had no knowledgeof the existence of the mortgage ? We believe the rule that all persons must take notice of what the public recordcontains is just as obligatory upon all persons as the rule that all men must know the law; that no one can plead

ignorance of the law. The fact that all men know the l aw is contrary to the presumption. The conduct of men, attimes, shows clearly that they do not know the law. The rule, however, is mandatory and obligatory,notwithstanding. It would be just as logical to allow the plea of ignorance of the law affecting a contract as to allowthe defense of ignorance of the existence and contents of a public record.

In view, therefore, of the foregoing rules of law, may the purchaser of land from the owner of the secondoriginal certificate be an "innocent purchaser," when a part or all of such land had theretofore been registered inthe name of another, not the vendor? We are of the opinion that said sections 38, 55, and 112 should not beapplied to such purchasers. We do not believe that the Phrase "innocent purchasers should be applied to such apurchaser. He cannot be regarded as an "innocent purchaser" because of the facts contained in the record of thefirst original certificate. The rule should not be applied to the purchaser of a parcel of land the vendor of which isnot the owner of the original certificate, or his successors. He, in no sense, can be an "innocent purchaser" of theportion of the land included in another earlier original certificate. The rule of notice of what the record containsprecludes the idea of innocence. By reason of the prior registry there cannot be an innocent purchaser of landincluded in a prior original certificate and in a name other than that of the vendor, or his successors. In order tominimize the difficulties we think this is the safer rule to establish. 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 theoriginal certificate and all subsequent transfers thereof is notice to all the world. That being the rule, could Teuseven be regarded as the holder in good faith of that part of the land included in his certificate which hadtheretofore been included in the original certificate of the appellants? We think not. Suppose, for example, thatTeus had never had his lot registered under the torrens system. Suppose he had sold his lot to the appellee andhad included in his deed of transfer the very strip of land now in question. Could his vendee be regarded as an"innocent purchaser" of said strip ? Would his vendee be an "innocent purchaser" of said strip? Certainly not. Therecord of the original certificate of the appellants precludes the possibility. Has the appellee gained any right byreason of the registration of the strip of land in the name of his vendor? Applying the rule of notice resulting fromthe record of the title of the appellants, the question must be answered in the negative. We are of the opinion thatthese rules are more in harmony with the purpose of Act No. 496 than the rule contended for by the appellee. Webelieve that the purchaser from the owner of the later certificate, and his successors. should be required to resortto his vendor for damages, in case of a mistake like the present, rather than to molest the holder of the firstcertificate who has been guilty of no negligence. The holder of the first original certificate and his successors shouldbe permitted to rest secure in their title, against one who had acquired rights in conflict therewith and who had fulland complete knowledge of their rights. The purchaser of land included in the second original certificate, by reasonof the facts contained in the public record and the knowledge with which he is charged and by reason of hisnegligence, should suffer the loss, if any, resulting from such purchase, rather than he who has obtained the firstcertificate and who was innocent of any act of negligence.

The foregoing decision does not solve, nor pretend to solve, all the difficulties rregistration under the torrens system and the subsequent transfer of the land. Neither ddecide the effect of the former registration in the ordinary registry upon the registrationWe are inclined to the view, without deciding it, that the record under the torrens systeand purposes of that system, supersede all other registries. If that view is correct then itdealing with land registered and recorded under the torrens system, to examine that recregistered and recorded under the torrens system, that record alone can be examined foascertaining the real status of the title to the land.

It would seem to be a just and equitable rule, when two persons have acquiredthing, to hold that the one who acquired it first and who has complied with all the requibe protected.

In view of our conclusions, above stated, the judgment of the lower court shourevoked. The record is hereby returned to the court now having and exercising the jurisby the land court, with direction to make such orders and decrees in the premises as ma

heretofore made in including the land in question in the second original certificate issuedpredecessor of the appellee, as well as in all other duplicate certificates issued.

Without any finding as to costs, it is so ordered.

Arellano, C.J. TorresandAraullo, JJ., concur.

Separate Opinions

CARSON J., with whom concursTRENT, J., dissenting:

I dissent.

In cases of double or overlapping registration, I am inclined to agree with the rwhich it is held in the majority opinion (first) that the original holder of the prior certificaagainst the original holder of the later certificate, where there has been no transfer of ti

innocent purchaser; both, as is shown in the majority opinion, being at fault in permittintake place; (second) that an innocent purchaser claiming under the prior certificate is enthe original holder of the later certificate, and also as against innocent purchasers from certificate; the innocent purchaser being in no wise at fault in connection with the issuan

But I am of opinion that neither the authorities cited, nor the reasoning of the mthe proposition that the original holder of the prior certificate is entitled to the land as agpurchaser from the holder of the later certificate.

As to the text-book authorities cited in the majority opinion, it is sufficient to saby both Hogg and Niblack are mere general rules, admittedly subject to exception, and oforce or authority where the reasoning upon which these rules are based is inapplicable particular case.

In its last analysis the general rule laid down in the majority opinion rests uponthe last page of the opinion wherein it i s said that "it would seem to be a just and equita

have acquired equal rights in the same thing, to hold that the one who acquired it first aall the requirements of the law should be protected." The rule, as applied to the matter ifollows: It would seem to be a just and equitable rule when two persons have acquired s


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registered titles to the same land, under the Land Registration Act, to hold that the one who first acquiredregistered title and who has complied with all the requirements of the law in that regard should be protected, in theabsence of any express statutory provision to the contrary.

Thus stated I have no quarrel with the doctrine as a statement of the general ruleto be applied in casesof double or overlapping registration under the Land Registration Act; for it is true as stated in the majority opinionthat in the adjudication and registration of titles by the Courts of Land Registration "mistakes are bound to occur,and sometimes the damage done thereby is irreparable;" and that in the absence of statutory provisions coveringsuch cases, "it is the duty of the courts to adjust the rights of the parties, under such circumstances, so as tominimize such damages, taking into consideration all of the conditions, and the diligence of the respective parties toavoid them."

But like most such general rules, it has its exceptions and should not be applied in a case wherein thereasons on which it is based do not exist, or i n cases wherein still more forceful reasons demand the application ofa contrary rule.

The general rule relied upon in the majority opinion is a mere application of a well settled equity rule that:"Where conflicting equities are otherwise equal in merit, that which first accrued will be given the preference." Butit is universally laid down by all the courts which have had occasion to apply this equity rule that "it should be thelast test resorted to," and that "it never prevails when any other equitable ground for preference exists." (See19Cent. Dig., tit. Equity, par. 181; and many cases cited in 16 Cyc., 139. note 57.) It follows that the general rules,that in cases of double or overlapping registration the earlier certificate should be protected, ought not to prevail soas to, deprive an innocent purchaser under the later certificate of his title in any case wherein the fraud ornegligence of the holder of the earlier certificate contributed to the issuance of the later certificate. Hence theholder of the earlier certificate of title should not be heard to invoke the " just and equitable rule" as laid down inthe majority opinion, in order to have his own title protected and the title of an innocent holder of a later certificatecancelled or annulled, in any case wherein it appears that the holder of the later certificate was wholly withoutfault, while the holder of the earlier certificate was wholly or largely to blame for the issuance of the latercertificate, in that he might have prevented its issuance by merely entering his appearance in court in response tolawful summons personally served upon him in the course of the proceedings for the issuance of the secondcertificate, and pleading his superior rights under the earlier certificate, instead of keeping silent and by his silencepermitting a default judgment to be entered against him adjudicating title in favor of the second applicant.

The majority opinion clearly recognizes the soundness of the principles I am contending for by thereasoning (with which I am inclined to agree) whereby it undertakes to demonstrate that as between the originalholders of the double or overlapping registration the general rule should prevail,becauseboth such original partiesmust be held to have been at fault and, their equities being equal, preference should be given to the earlier title.

The majority opinion further recognizes the soundness of my contention by the reasoning whereby itundertakes to sustain the application of the general rule in favor of the original holder of the earlier certificateagainst purchasers from the original holder of the later certificate, by an attempt to demonstrate that suchpurchasers can in no event be held to be innocent purchasers: because, as it is said, negligence may and shouldalways be imputed to such a purchaser, so that in no event can he claim to be without fault when it appears thatthe lands purchased by him from the holder of a duly registered certificate of title are included within the bounds ofthe lands described in a certificate of title of an earlier date.

At considerable length the majority opinion (in reliance upon the general rule laid down under the varioussystems of land registration, other than those based on the torrens system) insists that a purchaser of land dulyregistered in the Land Registration Court, is charged with notice of the contents of each and every one of thethousands and tens of thousands of certificates of registry on file in the land registry office, so that negligencemaybeimputedto him if he does not ascertain that all or any part of the land purchased by him is included within the

boundary lines of anyone of the thousands or tens of thousands of tracts of land whose original registry bears anearlier date than the date of the original registry of the land purchased by him. It is contended that he cannot claim

to be without fault should he buy such land because, as it is said, it was possible for himpurchased by him had been made the subject of double or overlapping registration by a description and boundary lines of the thousands of tr

full text cases 6-26

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