Martinez and Suarez vs. Court of Appeals

A Torrens certificate of title does not operate to make the holder the true owner of land that cannot be registered under the Torrens system, such as public navigable rivers which are parts of the public domain. The Land Registration Court has no jurisdiction over non-registerable properties, and the State is not bound by any prescriptive period in seeking the reversion or reconveyance of public properties fraudulently registered.

The disputed property was originally owned by Paulino Montemayor, who secured a "titulo real" over it in 1883. After his death, the property passed to his successors-in-interest, who sold it to Potenciano Garcia. The property was registered under the Torrens system in 1925, and the title eventually passed through several owners until it was acquired by the petitioners-appellants, who held it under Transfer Certificate of Title No. 15856. The case involves the application of Republic Act No. 2056, which authorizes the Secretary of Public Works and Communications to order the removal of dikes or other constructions in public navigable waters or waterways.

The spouses Romeo Martinez and Leonor Suarez were the registered owners of two parcels of land located in Lubao, Pampanga, covered by Transfer Certificate of Title No. 15856 of the Register of Deeds of the said province. Both parcels were fishponds, and the property involved in the instant case was the second parcel mentioned in the title. The disputed property was originally owned by Paulino Montemayor, who secured a "titulo real" over it in 1883. After his death, the property passed to his successors-in-interest, Maria Montemayor and Donata Montemayor, who sold it, along with the first parcel, to Potenciano Garcia.

Because Potenciano Garcia was prevented by the then municipal president of Lubao, Pedro Beltran, from restoring the dikes constructed on the contested property, Garcia filed Civil Case No. 1407 with the Court of First Instance on June 22, 1914, to restrain Beltran from molesting him in his possession of the second parcel. A writ of preliminary injunction was issued, and the Court declared the injunction permanent by decision promulgated June 12, 1916, which was affirmed by the Supreme Court on August 21, 1918. From June 22, 1914, the dikes around the property remained closed until a portion was opened just before the outbreak of the Pacific War.

On April 17, 1925, Potenciano Garcia applied for the registration of both parcels in his name, and the Court of First Instance of Pampanga, sitting as land registration court, granted the registration over the opposition of the Attorney-General and the Director of Forestry. Original Certificate of Title No. 14318 was issued to the spouses Potenciano Garcia and Lorenza Sioson. The parcels were subsequently bought by Emilio Cruz de Dios, in whose name Transfer Certificate of Title No. 1421 was issued on November 9, 1925. Thereafter, the ownership of these properties changed hands until eventually they were acquired by the herein appellee spouses, who held them by virtue of Transfer Certificate of Title No. 15856.

To avoid any untoward incident, the disputants agreed to refer the matter to the Committee on Rivers and Streams, composed of the Honorable Pedro Tuason as chairman, and the Honorable Salvador Araneta and Vicente Orosa as members. The committee appointed a Sub-Committee to investigate the case and conduct an ocular inspection of the contested property. On March 11, 1954, the Sub-Committee submitted its report to the effect that Parcel No. 2 was not a public river but a private fishpond owned by the spouses. On July 7, 1954, the Committee on Rivers and Streams rendered its decision ordering that the spouses be restored to the exclusive possession, use, and enjoyment of the creek in question.

The municipal officials of Lubao, led by Acting Mayor Mariano Zagad, refused to recognize the decision, so on September 1, 1954, the spouses instituted Civil Case No. 751 before the Court of First Instance of Pampanga against Mayor Zagad. The writ of preliminary injunction was issued, and the Supreme Court dismissed Mayor Zagad's petition on September 7, 1953. With this dismissal, the spouses proceeded to construct the dikes in the disputed parcel. Some four years later, while Civil Case No. 751 was still pending, the Honorable Florencio Moreno, then Secretary of Public Works and Communications, ordered another investigation of the parcel and directed the appellees to remove the dikes they had constructed, on the strength of the authority vested in him by Republic Act No. 2056, approved on June 13, 1958. The order embodied a threat that the dikes would be demolished should the appellees fail to comply within thirty days.

The spouses replied by commencing the present case on January 2, 1959, which was decided in their favor by the lower court. The Court of Appeals reversed, holding that Lot No. 2 is a public stream and that the title should be cancelled and the river covered reverted to public domain. The evidence submitted before the trial court showed that Lot No. 2 is a river of the public domain, bounded practically on all sides by rivers. As held by the Court of First Instance of Pampanga in Civil Case No. 1247 for injunction, decided in 1916, Lot No. 2 is a branch of the main river that has been covered with water since time immemorial and, therefore, part of the public domain. This finding was affirmed by the Supreme Court.

• Collateral Attack on Torrens Title: Petitioners-appellants argued that the Court of Appeals erred in declaring Parcel No. 2 a public river and ordering the cancellation of its registration because this constitutes a collateral attack on a Torrens title in violation of law and settled jurisprudence.

• Res Judicata: Petitioners-appellants argued that the Court of Appeals erred in reopening and re-litigating the issue of whether Lot No. 2 is a public river, notwithstanding that this issue had been long resolved and settled by the Land Registration Court of Pampanga in Land Registration Proceeding No. 692 and was now res judicata.

• Indefeasibility of Title / Innocent Purchaser for Value: Petitioners-appellants argued that the Court of Appeals erred in ordering the cancellation of the registration of Lot No. 2 notwithstanding that the Torrens title covering it had been vested in them as the seventh of successive innocent purchasers, who relied on the principle that persons dealing with registered land need not go behind the register to determine the condition of the property.

• Jurisdiction of the Secretary: Respondent officials contended that the lower court erred in holding that then Senator Rogelio de la Rosa was not an interested party and that his letter-complaint did not confer jurisdiction upon the respondent Undersecretary of Public Works and Communications to investigate the administrative case.

• Delegation of Authority: Respondent officials contended that the lower court erred in holding that the duty to investigate encroachments upon public rivers conferred upon the respondent Secretary under Republic Act No. 2056 cannot be lawfully delegated by him to his subordinates.

• Power of the Secretary: Respondent officials contended that the lower court erred in holding that the investigation ordered by the respondent Secretary was illegal on the ground that he had arrogated unto himself the power of reversing, making nugatory, and setting aside the two lawful decisions of the Court, and even annulling the one rendered by the highest Tribunal of the land.

• Public River Claim: Respondent officials contended that the lower court erred in not sustaining their claim that petitioners have no cause of action because the property in dispute is a public river.

• Counterclaim: Respondent officials contended that the lower court erred in not passing upon and disposing of their counterclaim.

• Exhaustion of Administrative Remedies: Respondent officials contended that the lower court erred in not sustaining their claim that the petition should not have been entertained on the ground that the petitioners had not exhausted administrative remedies.

• Retroactivity and Constitutionality: Respondent officials contended that the lower court erred in holding that the decision of the respondents was illegal on the ground that it violates the principle that laws shall have no retroactive effect, and in holding that Republic Act No. 2056 is unconstitutional on the ground that the threat of prosecution under Section 3 thereof for acts done four years before its enactment renders the law ex post facto.

• Collateral Attack on Torrens Title: Whether the Court of Appeals' declaration that Lot No. 2 is a public river and its order cancelling the registration constitute a collateral attack on a Torrens title in violation of law and jurisprudence.

• Res Judicata: Whether the Court of Appeals erred in reopening and re-litigating the issue of whether Lot No. 2 is a public river, notwithstanding that the issue had been resolved by the Land Registration Court and was res judicata.

• Innocent Purchaser for Value: Whether the petitioners-appellants, as alleged innocent purchasers for value, may validly claim the protection of the indefeasibility of the Torrens title over Lot No. 2.

• Collateral Attack on Torrens Title: No. The authorities cited by the appellants as to the conclusiveness and incontestability of a Torrens certificate of title do not apply, because the Land Registration Court has no jurisdiction over non-registerable properties such as public navigable rivers, and the State is not bound by any prescriptive period.

• Res Judicata: No. The judgment of the Court of First Instance of Pampanga as regards Lot No. 2 may be attacked at any time, either directly or collaterally, by the State, which is not bound by any prescriptive period provided for by the Statute of Limitations.

• Innocent Purchaser for Value: No. The petitioners-appellants cannot be deemed purchasers for value and in good faith, as the deed of absolute conveyance executed in their favor expressly disclosed that the second parcel was open, without dikes, and excluded from the first parcel by virtue of Administrative Order No. 103.

• Collateral Attack on Torrens Title: Section 38 of the Land Registration Act (Act 496) makes a decree of registration absolute and indefeasible, but subject to the exemption stated in Section 39, which includes "liens, claims or rights arising or existing under the laws or Constitution of the Philippine Islands which the statute of the Philippine Islands cannot require to appear of record in the registry." At the time of the enactment of Act 496, one right recognized under the law was that provided for in Article 339 of the old Civil Code, which classifies property of public ownership as including "rivers, torrents, ports, and bridges constructed by the State." These properties are parts of the public domain intended for public use, are outside the commerce of men, and are not subject to private appropriation. The Court cited Ledesma vs. Municipality of Iloilo, 49 Phil. 769, which held that a simple possession of a certificate of title under the Torrens system does not necessarily make the possessor a true owner of all the property described therein, and that if a person obtains title which includes by mistake or oversight lands which cannot be registered under the Torrens system, he does not by virtue of said certificate alone become the owner of the land illegally included. The Court also cited Mercado vs. Municipal President of Macabebe, 59 Phil. 592, and Director of Lands vs. Roman Catholic Bishop of Zamboanga, 61 Phil. 644, as well as Dizon vs. Rodriguez, G.R. No. L-20300-01, April 30, 1965, 20 SCRA 704, which held that the incontestable and indefeasible character of a Torrens certificate of title does not operate when the land covered thereby is not capable of registration. The evidence showed that Lot No. 2 is a river of the public domain, bounded practically on all sides by rivers, and is a branch of the main river that has been covered with water since time immemorial. The right of reversion or reconveyance to the State of public properties fraudulently registered and which are not capable of private appropriation does not prescribe, citing Republic vs. Ramona Ruiz, G.R. No. L-23712, April 29, 1968, 23 SCRA 348, and Republic vs. Ramos, G.R. No. L-15484, January 31, 1963, 7 SCRA 47.

• Res Judicata: The Land Registration Court has no jurisdiction over non-registerable properties, such as public navigable rivers which are parts of the public domain, and cannot validly adjudge the registration of title in favor of a private applicant. Hence, the judgment of the Court of First Instance of Pampanga as regards Lot No. 2 may be attacked at any time, either directly or collaterally, by the State, which is not bound by any prescriptive period provided for by the Statute of Limitations (Article 1108, par. 4, new Civil Code). The jurisdiction of the Secretary of Public Works and Communications under Republic Act No. 2056 to order the removal of obstruction to navigation along a public and navigable creek or river has been definitely settled, citing Lovina vs. Moreno, G.R. No. L-17821, November 29, 1963, 9 SCRA 557, and Taleon vs. Secretary of Public Works & Communications, G.R. No. L-24281, May 16, 1961, 20 SCRA 69.

• Innocent Purchaser for Value: The petitioners-appellants cannot be deemed purchasers for value and in good faith because the deed of absolute conveyance executed in their favor expressly stated that the second parcel was "actualmente abierta, sin malecones y excluida de la primera parcela en virtud de la Orden Administrative No. 103" (currently open, without dikes, and excluded from the first parcel by virtue of Administrative Order No. 103). The deed also provided that the buyers would manage to secure from the proper authorities the conversion of the second parcel back into a fishpond, at their own expense, and that in case they could not achieve this purpose, the sellers would not return any amount of money. The petitioners-appellants accepted these stipulations in the same conveyance. Before purchasing a parcel of land, it cannot be contended that the appellants did not know exactly the condition of the land they were buying and the obstacles or restrictions thereon. One who buys something with knowledge of defect or lack of title in his vendor cannot claim that he acquired it in good faith, citing Leung Lee vs. Strong Machinery Co., 37 Phil. 664. The ruling that a purchaser of a registered property cannot go beyond the record to make inquiries as to the legality of the title of the registered owner cannot be availed of as against the law and the accepted principle that rivers are parts of the public domain for public use and not capable of private appropriation or acquisition by prescription.

• Indefeasibility of Torrens Title Does Not Apply to Non-Registerable Property — A Torrens certificate of title does not operate to make the holder the true owner of land that cannot be registered under the Torrens system, such as public navigable rivers which are parts of the public domain. The Land Registration Court has no jurisdiction over non-registerable properties and cannot validly adjudge the registration of title in favor of a private applicant. The Court applied this doctrine to hold that the title over Lot No. 2, being a public river, may be attacked at any time by the State.

• State Not Bound by Prescription in Reversion of Public Property — The right of reversion or reconveyance to the State of public properties fraudulently registered and which are not capable of private appropriation or private acquisition does not prescribe. The State is not bound by any prescriptive period provided for by the Statute of Limitations (Article 1108, par. 4, new Civil Code). The Court applied this doctrine to reject the petitioners' claim that the title had become indefeasible after the lapse of the prescriptive period.

• Purchaser with Knowledge of Defect Cannot Claim Good Faith — One who buys something with knowledge of defect or lack of title in his vendor cannot claim that he acquired it in good faith. The Court applied this doctrine to hold that the petitioners-appellants, who knew from the deed of conveyance that the second parcel was open, without dikes, and excluded from the first parcel by virtue of Administrative Order No. 103, could not claim the protection of the indefeasibility of the Torrens title.

• "A simple possession of a certificate of title under the Torrens system does not necessarily make the possessor a true owner of all the property described therein. If a person obtains title under the Torrens system which includes by mistake or oversight, lands which cannot be registered under the Torrens system, he does not by virtue of said certificate alone become the owner of the land illegally included." — This passage from Ledesma vs. Municipality of Iloilo states the controlling doctrine that a Torrens title does not confer ownership over non-registerable property, and was relied upon by the Court to reject the petitioners' claim of indefeasibility.

• "It is useless for the appellant now to allege that she has obtained certificate of title No. 329 in her favor because the said certificate does not confer upon her any right to the creek in question, inasmuch as the said creek, being of the public domain, is included among the various exceptions enumerated in Section 39 of Act 496 to which the said certificate is subject by express provision of the law." — This passage from Mercado vs. Municipal President of Macabebe reinforces the principle that certificates of title are subject to the exceptions in Section 39 of Act 496, including public domain properties.

• "The Land Registration Court has no jurisdiction over non-registerable properties, such as public navigable rivers which are parts of the public domain, and cannot validly adjudge the registration of title in favor of a private applicant. Hence, the judgment of the Court of First Instance of Pampanga as regards the Lot No. 2 of Certificate of Title No. 15856 in the name of petitioners-appellants may be attacked at any time, either directly or collaterally, by the State which is not bound by any prescriptive period provided for by the Statute of Limitations." — This passage states the ratio decidendi of the case, holding that the State may attack the registration of public rivers at any time, directly or collaterally.

• Ledesma vs. Municipality of Iloilo, 49 Phil. 769 — Controlling precedent cited for the principle that a Torrens certificate of title does not make the possessor the true owner of land illegally included therein, particularly non-registerable public property.

• Mercado vs. Municipal President of Macabebe, 59 Phil. 592 — Followed, holding that a certificate of title does not confer any right to a creek of the public domain, as such property is among the exceptions enumerated in Section 39 of Act 496.

• Director of Lands vs. Roman Catholic Bishop of Zamboanga, 61 Phil. 644 — Followed, applying the same ruling regarding public plazas as non-registerable public property.

• Dizon vs. Rodriguez, G.R. No. L-20300-01, April 30, 1965, 20 SCRA 704 — Followed, holding that the incontestable and indefeasible character of a Torrens certificate of title does not operate when the land covered thereby is not capable of registration.

• Republic vs. Ramona Ruiz, G.R. No. L-23712, April 29, 1968, 23 SCRA 348 — Followed, holding that the right of reversion or reconveyance to the State of public properties fraudulently registered does not prescribe.

• Republic vs. Ramos, G.R. No. L-15484, January 31, 1963, 7 SCRA 47 — Followed, supporting the principle that the State is not bound by prescription in seeking reversion of public properties.

• Lovina vs. Moreno, G.R. No. L-17821, November 29, 1963, 9 SCRA 557 — Followed, settling the jurisdiction of the Secretary of Public Works and Communications under Republic Act No. 2056 to order the removal of obstructions to navigation along public and navigable creeks or rivers.

• Taleon vs. Secretary of Public Works & Communications, G.R. No. L-24281, May 16, 1961, 20 SCRA 69 — Followed, affirming the same principle regarding the Secretary's jurisdiction under Republic Act No. 2056.

• Palanca vs. Com. of the Philippines, 69 Phil. 449 — Cited for the principle that a river which is not capable of private appropriation or acquisition by prescription remains part of the public domain.

• Meneses vs. Com. of the Philippines, 69 Phil. 647 — Cited for the same principle regarding rivers as non-appropriable public property.

• Leung Lee vs. Strong Machinery Co., 37 Phil. 664 — Followed, holding that one who buys something with knowledge of defect or lack of title in his vendor cannot claim that he acquired it in good faith.

• Section 38, Land Registration Act (Act 496) — The provision that makes a decree of registration absolute and indefeasible, subject to the exemptions stated in Section 39. The Court held that this provision does not apply to non-registerable properties such as public navigable rivers.

• Section 39, Land Registration Act (Act 496) — The provision enumerating exemptions to the indefeasibility of a Torrens title, including "liens, claims or rights arising or existing under the laws or Constitution of the Philippine Islands which the statute of the Philippine Islands cannot require to appear of record in the registry." The Court applied this provision to hold that public rivers are among the exceptions to the conclusiveness of a Torrens title.

• Article 339, Old Civil Code — The provision classifying property of public ownership as including "roads, canals, rivers, torrents, ports, and bridges constructed by the State, and banks shores, roadsteads, and that of a similar character." The Court applied this provision to establish that rivers are parts of the public domain intended for public use and not subject to private appropriation.

• Article 1108, par. 4, New Civil Code — The provision stating that the State is not bound by any prescriptive period. The Court applied this provision to hold that the right of reversion or reconveyance to the State of public properties fraudulently registered does not prescribe.

• Republic Act No. 2056 — The statute authorizing the Secretary of Public Works and Communications to order the removal of dikes or other constructions in public navigable waters or waterways. The Court applied this statute to uphold the validity of the administrative order directing the removal of the dikes.

Makalintal, C.J., Castro, Teehankee, and Muñoz Palma, JJ., concurred. Makasiar, J., was on leave.