Feliciano v. Zaldivar
REITERATIONFacts
The Antecedents: Remegia Y. Feliciano filed a complaint against Spouses Aurelio and Luz Zaldivar for the declaration of nullity of Transfer Certificate of Title (TCT) No. T-17993 and reconveyance of a 243-square meter lot. Remegia alleged she was the owner of a 444-square meter lot covered by TCT No. T-8502, and that Aurelio fraudulently obtained TCT No. T-17993 covering a portion of her land. She claimed the portion was leased to Pio Dalman, Aurelio's father-in-law, and that Aurelio obtained the title by falsely claiming her original title was lost. Remegia denied selling the property and impugned a joint affidavit of confirmation of sale as falsified. Procedural History: The Regional Trial Court (RTC) ruled in favor of Remegia, declaring TCT No. T-17993 null and void for being obtained through misrepresentation and fraud, and ordered reconveyance. The Court of Appeals (CA) reversed the RTC decision, upholding the spouses Zaldivar's ownership based on a deed of sale, a joint affidavit of confirmation of sale, and the indefeasibility of their title. The CA also found that Remegia's action was barred by prescription and laches. The Petition: The heirs of Remegia Y. Feliciano filed a petition for review on certiorari, assailing the CA's decision and resolution.
Issue(s)
Whether the Court of Appeals erred in ruling that the court which ordered the issuance of a new certificate of title despite the existence of the owner's duplicate copy that was never lost had jurisdiction over the case. Whether the Court of Appeals erred in concluding that the petitioner's claim of ownership over the subject lot was barred by estoppel or laches. Whether the Court of Appeals erred in concluding that the respondents are the absolute owners of the subject lot based on TCT No. 17993 issued to them. Whether the Court of Appeals erred in obviating essential and relevant facts that would maintain the absolute ownership of the petitioner over the subject lot as evidenced by TCT No. T-8502.
Ruling
The petition is GRANTED. The Decision dated July 31, 2003 and Resolution dated February 4, 2004 of the Court of Appeals are REVERSED and SET ASIDE. The Decision dated December 3, 1999 of the Regional Trial Court of Cagayan de Oro City, Branch 25 is REINSTATED with the MODIFICATION that petitioners are likewise ordered to exercise the option under Article 448 of the Civil Code.
Ratio Decidendi
On the jurisdiction of the court that ordered the issuance of a new certificate of title: The Supreme Court held that the Court of First Instance (CFI) which granted Aurelio Zaldivar's petition for the issuance of a new owner's duplicate copy of TCT No. T-8502 did not acquire jurisdiction to issue such order because the owner's duplicate certificate of title was not lost but was in the possession of Remegia. It is a settled rule that reconstitution can validly be made only in case of loss of the original certificate. Therefore, the new owner's duplicate TCT No. T-8502 issued by the CFI upon Aurelio's petition is void. Consequently, TCT No. T-17993 in Aurelio's name, which emanated from the void duplicate title, is also null and void. The principle of indefeasibility of a Torrens title does not apply where fraud attended the issuance of the title, and a title issued based on void documents may be annulled. On the validity of the joint affidavit of confirmation of sale and the applicability of Article 1332, and on prescription and laches: The Court found the CA's reliance on the joint affidavit of confirmation of sale improper. An affidavit is not a mode of acquiring ownership. More importantly, Remegia testified that she could not read or understand English, the language of the affidavit, and had only a Grade 3 education. Under Article 1332 of the Civil Code, when a party is unable to read or understand the contract's language, the burden is on the party enforcing the contract to show that its terms were fully explained. The bare statement of the notary public that he "read and interpreted" the document was insufficient to overcome the presumption of fraud or mistake, as it was not established that Remegia fully comprehended its import. Furthermore, the affidavit lacked crucial details such as the consideration for the sale and the mode of transfer of ownership. The Court ruled that prescription and laches had not set in against Remegia. Lands covered by a title cannot be acquired by prescription or adverse possession. The CA's finding that Remegia's action was barred by prescription was incorrect because an action for reconveyance based on fraud is generally imprescriptible. Regarding laches, the Court noted that Remegia merely tolerated the occupation by the respondents. Case law establishes that the right of registered owners to eject illegal occupants is imprescriptible and is never barred by laches as long as the possession was unauthorized or merely tolerated. On the indefeasibility of TCT No. 17793: The Court reiterated that the principle of indefeasibility of a Torrens title does not apply when fraud attended its issuance. Remegia's TCT No. T-8502 remained valid, and Aurelio's TCT No. 17793, which emanated from a fraudulently procured duplicate title, could not become indefeasible. On the application of Articles 453 and 448: The Court also applied Article 453 of the Civil Code, stating that if there was bad faith on the part of both the landowner (Remegia, by tolerating the construction with knowledge) and the builder (Spouses Zaldivar), their rights shall be the same as though both had acted in good faith. Consequently, the rights of the parties are governed by Article 448, which provides that the landowner has the option to appropriate the improvements by paying indemnity or to oblige the builder to buy the land. The petitioners, as Remegia's heirs, were ordered to exercise one of these options.
Main Doctrine
A reconstituted certificate of title is void if the owner's duplicate certificate of title was not lost but was in the possession of another person. The principle of indefeasibility of a Torrens title does not apply where fraud attended the issuance of the title. When both the landowner and the builder/planter act in bad faith, the rights of both parties are governed by the provisions on builders in good faith, giving the landowner the option to appropriate the improvement or sell the land.