Republic of the Philippines
SUPREME COURT
Baguio City
THIRD DIVISION
G.R. No. 192669 April 21, 2014
RAUL SABERON, JOAN F. SABERON and JACQUELINE SABERON, Petitioners,
vs.
OSCAR VENTANILLA, JR., and CARMEN GLORIA D. VENTANILLA, Respondents.
SEPARATE OPINION
VELASCO, JR., J.:
The facts are undisputed. On May 31, 1991, after the Decision of this Court in Manila Remnant Co., Inc. v. Court of Appeals1 had become final and executory and after a writ of execution had been issued by the trial court relative thereto, the respondent Ventanillas caused the entry of a notice of levy covering the subject properties in Civil Case No. Q-96-26486 on the primary entrybook of the Registry of Deeds in Quezon City. However, due to inadvertence on the part of the registry, the said entries were never carried over and as a result, the necessary annotations pertaining to the notice do not appear on the face of Transfer Certificate Title Nos. 55396 and 55397 in the name of Samuel Marquez.
When Marquez sold the property to the Saberons, the latter verified the authenticity of the aforementioned titles with the Register of Deeds in Quezon City. Finding no encumbrance or annotations on the said titles, the Saberons purchased the lots from Marquez for value and in good faith. Thus, TCT Nos. 63140 and 63141 were issued to the Saberons on July 8, 1992 devoid of any notice of levy in connection with Civil Case No. Q-96-26486.
The construction of two houses was finished on the disputed lots without any protest or objection from the Ventanillas. It was only in early 1996 that the Ventanillas filed a complaint with the trial court asserting ownership over said properties. More than three years had passed before the titles of the Saberons were challenged by the Ventanillas and only after a substantial amount of money had been spent on the construction of the two houses.
The majority opinion is anchored on the Court's ruling in Armed Forces and Police Mutual Benefit Association, Inc. v. Santiago2 (Armed Forces case) wherein it was held that the mere entry of the notice of levy in the primary entry book of the Registry of Deeds constitutes sufficient notice to all persons, including the petitioners, that the land is already encumbered.
Case law reveals that entry alone in the daybook of the Registry of Deeds is sufficient to constitute registration of a voluntary or an involuntary transaction, so long as the registrant has complied with all that is required of him for purposes of entry and annotation and nothing more remains to be done but a duty incumbent solely on the Register of Deeds.3 This finds basis in Section 56 of PD 1529 or the Property Registration Decree, which reads:
Section 56. Primary Entry Book; fees; certified copies. Each Register of Deeds shall keep a primary entry book in which, upon payment of the entry fee, he shall enter, in the order of their reception, all instruments including copies of writs and processes filed with him relating to registered land. He shall, as a preliminary process in registration, note in such book the date, hour and minute of reception of all instruments, in the order in which they were received. They shall be regarded as registered from the time so noted, and the memorandum of each instrument, when made on the certificate of title to which it refers, shall bear the same date: Provided, that the national government as well as the provincial and city governments shall be exempt from the payment of such fees in advance in order to be entitled to entry and registration.
Every deed or other instrument, whether voluntary or involuntary, so filed with the Register of Deeds shall be numbered and indexed and endorsed with a reference to the proper certificate of title. All records and papers relative to registered land in the office of the Register of Deeds shall be open to the public in the same manner as court records, subject to such reasonable regulations as the Register of Deeds, under the direction of the Commissioner of Land Registration, may prescribe.
All deeds and voluntary instruments shall be presented with their respective copies and shall be attested and sealed by the Register of Deeds, endorsed with the file number, and copies may be delivered to the person presenting them.
Certified copies of all instruments filed and registered may also be obtained from the Register of Deeds upon payment of the prescribed fees." (Emphasis supplied.)
Verily, the date of entry is to be regarded as the date of registration of a transaction or lien covering real property. Registration has the effect of putting the whole world on constructive notice of the existence of the instrument entered.4
On the other hand, the Saberons rely on the long line of jurisprudence protecting the right of buyers in good faith and for value who relied on the four corners of the title, thus:
[A] person dealing with registered land has a right to rely on the Torrens certificate of title and to dispense with the need of inquiring further except when the party has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make such inquiry or when the purchaser has knowledge of a defect or the lack of title in his vendor or of sufficient facts to induce a reasonably prudent man to inquire into the status of the title of the property in litigation. The presence of anything which excites or arouses suspicion should then prompt the vendee to look beyond the certificate and investigate the title of the vendor appearing on the face of said certificate. One who falls within the exception can neither be denominated an innocent purchaser for value nor a purchaser in good faith and, hence, does not merit the protection of the law."5 (Emphasis supplied.)
Indeed the established rule is every person dealing with registered land may safely rely on the correctness of the certificate of title and is no longer required to look behind the certificate in order to determine the rights of the registered owner. Otherwise it would deviate from the evident purpose of Section 44 of PD No. 1529 which provides:
"Sec. 44. Every registered owner receiving a certificate of title in pursuance of a decree of registration, and every subsequent purchaser for value and in good faith, shall hold the same free from all encumbrances except those noted in said certificate and any of the following encumbrances which may be subsisting, namely: x x x"
Thus the prospective buyer is not required to explore deeper and further than what the title indicates for hidden defects.
Ergo, there is a clash between the principles of purchaser for value and in good faith and that of constructive notice under Sec. 56 of PD No. 1529.
While the doctrine in the Armed Forces case is the prevailing jurisprudence, I submit that said doctrine must be revisited in order to give meaning to the mantle of protection accorded to buyers in good faith. The pertinent ruling in the Armed Forces case reads:
Respondent cannot be considered an innocent purchaser for value. Under the rule of notice, it is presumed that the purchaser has examined every instrument of record affecting the title. Such presumption is irrebuttable. He is charged with notice of every fact shown by the record and is presumed to know every fact shown by the record and to know every fact which an examination of the record would have disclosed. This presumption cannot be overcome by proof of innocence or good faith. Otherwise, the very purpose and object of the law requiring a record would be destroyed. Such presumption cannot be defeated by proof of want of knowledge of what the record contains any more than one may be permitted to show that he was ignorant of the provisions of the law. The rule that all persons must take notice of the facts which the public record contains is a rule of law. The rule must be absolute; any variation would lead to endless confusion and useless litigation. For these reasons, a declaration from the court that respondent was in bad faith is not necessary in order that the notice of levy on attachment may be annotated on TCT No. PT-94912.6 (Emphasis supplied.)
A strict application of the principle in the Armed Forces case would render inutile the doctrine that every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefor and is in no way obliged to go beyond the four corners of the certificate to determine the condition of the property. Said doctrine must be harmonized with the principle of innocent purchaser for value and good faith who relies on a clean title. Otherwise, all persons dealing with real property are now required to check with the Registry of Deeds for any registered voluntary deed or instrument or involuntary lien that may not have been carried over from the entry book to the titles through inadvertence even though there are no apparent indications of its existence. The practical considerations for this rather tedious requirement would include the physical accessibility of all the entry books to the prospective buyers. Moreover, all the pertinent entry books may no longer be available as it is not unheard of for such records to have been lost or ruined by some unfortunate circumstance. In addition, even if so available, there is currently no standard on how far back in terms of prior ownerships of the land should the buyer trace when examining the records. If the title of the prospective seller was issued 30 years ago, the interested buyer is required to verify from all the entry books for three decades whether a transaction or lien was registered therein affecting said title. This is definitely absurd. Last but most important, the prospective buyer will spend much time and money just to comply with this ridiculous requirement.
This unreasonable requirement of checking with the entry book would erode the public’s confidence in the Torrens system and render illusory the safeguard provided to prospective buyers who have no actual knowledge and have no reason to believe that the properties they are acquiring are in fact encumbered. Trust in the Torrens system has been founded on the plethora of jurisprudence protecting not only the prior registrant but also the buyer in good faith. Failure to properly balance their rights would turn every real estate purchase into a virtual gamble since there is never a guarantee that another person has already secured a superior right despite being presented with a clean title. What reliance can then be made on the certificate of titles regarding the condition of real properties if confirmation with the entry book is more controlling? A strict application of the doctrine in the Armed Forces case will have far-reaching implications that could substantially alter the terrain of the real estate market, prejudice businesses and even pull down the economy of the country.
This absurd situation can be remedied by harmonizing the doctrine of constructive notice in Armed Forces with the principle of the buyer in good faith and for value. After all, the rationale in the case––that what remained to be done is out of the control of the registrant and rests solely on the Registry of Deeds––is equally applicable to the buyer in good faith since nothing more could have been expected to be done on his part after seeing that there are no annotations on the title shown to them relative to any encumbrance on the property.
To harmonize the seeming clash between the two principles, I submit that while the buyer is charged with constructive notice, a person who registered the voluntary instrument or the involuntary lien has the duty and responsibility to ensure that the Office of the Register of Deeds annotate the transaction or lien on the title on file with said office within a reasonable period of time from registration in the primary entry book, say six (6) months from date of registration. If the registrant fails or refuses to do so and the title is transferred to a person without said deed or lien carried over on the title, then said registrant can be declared in laches and the transferor who buys the lot subject of said title in good faith and for value will have a superior and better right than the registrant.
The fact of the matter is that the Armed Forces case is not a precedent to the instant case.1âwphi1 In the Armed Forces case, the Notice of Levy was recorded in the entry book of the registry on September 14, 1994. On September 20, 1994, a Deed of Absolute Sale in favor of Ines Santiago covering the contested property was registered with the Registry of Deeds and the corresponding title was issued in her favor. A little more than a month later, or on October 24, 1994, the inconsistency in the records of the Registry of Deeds was already detected and demand letters were immediately sent to Santiago asking her to surrender the title over the contested property. In the instant case, however, the facts are dissimilar to that of the Armed Forces case. Because of laches attributable to the Ventanillas by not seeing to it that the notice of levy is annotated on the titles of Manila Remnant Co., Inc., said lien was not in turn annotated on the titles of Marquez, the latter was able to transfer the lots subject of the clean titles to the Saberons. Unlike in Armed Forces, because of the non-annotation of the notice of levy, Marquez was able to transfer a clean title to the Saberons. There lies the difference. The Saberons, as transferees in good faith and for value were issued clean titles untainted by the un-annotated notice of levy. That is why they assert that they have better rights than the Ventanillas.
Moreover, the Ventanillas, by sleeping on their rights, allowed laches to set in and was raised as a ground to bar their claim against the Saberons. In general, laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which––by the exercise of due diligence––could or should have been done earlier.7 It is the negligence or omission to assert a right within a reasonable period, warranting the presumption that the party entitled to assert it has either abandoned or declined to assert it.8 Under this time-honored doctrine, relief has been denied to litigants who, by sleeping on their rights for an unreasonable length of time––either by negligence, folly or inattention––have allowed their claims to be stale.9 Vigilantibus, sed non dormientibus, jura subveniunt. The law aids the vigilant, not those who slumber on their rights.10
The following are the essential elements of laches:
1) Conduct on the part of the defendant that gave rise to the situation complained of; or the conduct of another which the defendant claims gave rise to the same;
2) Delay by the complainant in asserting his right after he has had knowledge of the defendant’s conduct and after he has had the opportunity to sue;
3) Lack of knowledge by or notice to the defendant that the complainant will assert the right on which he bases his suit; and
4) Injury or prejudice to the defendant in the event relief is accorded to the complainant.11
In sum, while the registration of the voluntary deed or involuntary lien in the primary entry book is considered constructive notice to the whole world, more particularly to any prospective buyer of the lot subject thereof, the registrant of such voluntary instrument or involuntary lien shall not have a superior right over the lot as against a subsequent transferee of the lot to whom a clean title is issued if said registrant fails to have said registered deed or lien annotated at the back of the title within six (6) months from date of registration in the entry book. Laches shall be a bar to the right of the registrant.
In a future case, the rigid ruling in Armed Forces has to be modified accordingly and relaxed.
On another note, it is my view that the Ventanillas may also be guilty of laches in not preventing the Saberons from constructing the two houses on the disputed lots. While one should commiserate with the Ventanillas in the deprivation of the ownership of their lots, the facts of the case reveal that the Ventanillas did not assert their rights of ownership over the lots within a reasonable period of time. They failed to take possession of, use, and regularly inspect the lots or maintain a caretaker or undertake measures to prevent trespassers from occupying the land for a period of more than three (3) years until they filed the complaint in early 1996. As a result of the inaction of the Ventanillas, the Saberons were able to construct a house on each of the two lots. Clearly, the Ventanillas slept on their rights and allowed laches to set in. Had the Ventanillas prevented the construction of the two houses, then the issue on the value of the improvements would not have ripened into a dispute and the Saberons would not have suffered damages.
It is beyond doubt that the Saberons are builders in good faith for which they should, under the law, be compensated with the replacement value of the houses at the present fair market value.
I concur in the result.
PRESBITERO J. VELASCO, JR.
Associate Justice
Footnotes
1 G.R. No. 82978, November 22, 1990, 191 SCRA 622.
2 G.R. No. 147559, June 27, 2008, 556 SCRA 46.
3 Armed Forces and Police Mutual Benefit Association, Inc. v. Santiago, G.R. No. 147559, June 27, 2008, 556 SCRA 46, 57.
4 PD 1529, Sec. 52.
5 Sandoval v. Court of Appeals, G.R. No. 106657, August 1, 1996, 260 SCRA 283, 295.
6 Id., Secs. 56-57.
7 Ramos v. Heirs of Ramos Sr., G.R. No. 140808, April 25, 2002, 381 SCRA 594.
8 Catholic Bishop of Balaga v. Court of Appeals, G.R. No. 112519, November 14, 1996.
9 Josefa Mendoza v. Teodora Cayas, Nos. L-8562-8563, December 17, 1955.
10 Marcelino v. Court of Appeals, G.R. No. 94422, June 26, 1992, 210 SCRA 444, 447.
11 Jison v. Court of Appeals, 350 Phil 138, 183 (1998).
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