Dizon v. Rodriguez
REITERATIONFacts
The Antecedents: Hacienda Calatagan, covered by TCT No. T-722, originally owned by Alfonso and Jacobo Zobel, had a pier constructed in 1938 extending into navigable waters. After the sugar mill ceased operations in 1948, the owners converted the pier into a fishpond dike and enclosed approximately 30 hectares and 37 hectares of the bay, creating fishponds. In 1949, a subdivision plan (Psd-27941) was prepared, designating the 30-hectare fishpond as Lot No. 1 and the 37-hectare fishpond as Lot No. 49. These lots were issued TCT No. 2739 in the name of Jacobo Zobel. Subsequently, Lot 49 was sold to Antonino Dizon, et al. (obtaining TCT No. T-2740 and later T-4718), and Lot 1 was sold to Carlos Goco, et al., who sold half to Manuel Sy-Juco, et al. (obtaining TCT No. 4159). Procedural History: In 1952, Miguel Tolentino applied for a fishpond permit for Lot 49, and his daughter Clemencia Tolentino applied for Lot 1. Dizon, et al., Sy-Juco, and Goco protested, claiming private ownership. The Director of Fisheries dismissed the protest, finding the lots outside the boundaries of TCT No. T-722. An appeal to the Secretary of Agriculture and Natural Resources was dismissed for being filed out of time. An action to restrain the Director of Fisheries was dismissed by the CFI for non-exhaustion of administrative remedies, which was affirmed by the Supreme Court. Subsequently, Dizon, et al. filed a quiet title action (Civil Case 135) and Sy-Juco and Goco filed another (Civil Case 136) in the CFI of Batangas, naming the Secretary of Agriculture and Natural Resources and the Tolentinos as defendants. The Republic of the Philippines intervened, alleging the lots were part of the foreshore area. The CFI declared the titles null and void, finding Lots 1 and 49 to be part of the foreshore lands and thus public domain. The Court of Appeals affirmed this decision, modifying it to declare the occupants (Dizon, et al.) as possessors in good faith, entitled to remain until reimbursed by the Republic for necessary expenses (P40,000.00 for Lot 49 and P25,000.00 for Lot 1). The Petition: Both Antonino Dizon, et al. (G.R. Nos. L-20300-01) and the Republic of the Philippines, et al. (G.R. Nos. L-20355-56) appealed the decision of the Court of Appeals. Dizon, et al. argued that the lots were marshland, not foreshore. The Republic and the Tolentinos argued that the occupants were possessors in bad faith from the moment their protest was denied and thus not entitled to reimbursement.
Issue(s)
Whether Lots 49 and 1 are part of the foreshore area and thus public domain. Whether the occupants, Dizon, et al. and Sy-Juco, et al., are possessors in good faith or bad faith. Whether the occupants are entitled to reimbursement for necessary expenses made on the lots.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals. It held that Lots 49 and 1 are indeed part of the foreshore area and belong to the State. The occupants were considered possessors in good faith and are entitled to retain possession until reimbursed for necessary expenses made on the lots.
Ratio Decidendi
On the nature of Lots 49 and 1: The Court found that the existence of a pier extending 600 meters into the sea, used for loading sugar, indicated that the area spanned by the structure was part of the sea or foreshore land. The fishponds were constructed by enclosing areas with dikes, using this pier as one of the boundaries, clearly indicating that the enclosed areas were part of the foreshore. Furthermore, the subdivision plan Psd-27941 was found to have been prepared in disregard of the technical descriptions in TCT No. T-722. These facts support the conclusion that Lots 49 and 1 are part of the territorial waters and belong to the State, as elementary principles dictate that the indefeasible character of a Torrens title does not apply to lands incapable of registration, such as foreshore areas. On the good faith of the possession: The Court upheld the ruling of the Court of Appeals that the plaintiffs were possessors in good faith. As titleholders, they had reason to rely on the indefeasible character of their certificates of title. The Court reconciled the concept of possessors in good faith under Article 526 of the Civil Code with the doctrine of indefeasibility of a Torrens Title by holding that a possessor with a Torrens Title is not aware of any flaw invalidating it until a final court judgment declares it null and void. Even if this reconciliation were not made, the Court noted that mistake upon a doubtful or difficult question of law may be the basis of good faith, and the legal question of whether possession under a Torrens Title remains in good faith until declared void by court is indeed a difficult one. Therefore, their possession did not lose its character of good faith until their titles were declared null and void. On the entitlement to reimbursement: Given that the plaintiffs were considered possessors in good faith, they are entitled to the retention of the properties until they are reimbursed for the necessary expenses made on the lands. The Court also dismissed the contention of the Republic that the order for reimbursement constituted a judgment against the government without its consent, as the Republic voluntarily intervened in the case, submitting itself to the court's jurisdiction.
Main Doctrine
A Torrens title covering lands that are not capable of registration, such as foreshore areas, is null and void. Possessors in good faith under such titles are entitled to retention of the property until reimbursed for necessary expenses made thereon.