REMEGIA Y. FELICIANO, SUBSTITUTED BY THE HEIRS OF REMEGIA Y. FELICIANO, AS REPRESENTED BY NILO Y. FELICIANO, PETITIONERS, VS. SPOUSES AURELIO AND LUZ ZALDIVAR, RESPONDENTS.

Feliciano versus Zaldivar

The Case

This is a petition for review on certiorari brought by the heirs of Remegia Y. Feliciano, represented by Nilo Y. Feliciano, against the spouses Aurelio and Luz Zaldivar. Remegia had sued the Zaldivars for declaration of nullity of a transfer certificate of title and for reconveyance of a 243 square meter portion of her registered lot in Cagayan de Oro City. The case matters because it gathers in one decision the rules on the void reconstitution of a lost owner's duplicate certificate, the limits of the indefeasibility of a Torrens title, the effect of a document in a language the signatory cannot read, and the inapplicability of prescription and laches against a registered owner.

Procedural History

Remegia filed her complaint for declaration of nullity of title and reconveyance before the Regional Trial Court of Cagayan de Oro City, Branch 25. After trial, the Regional Trial Court rendered judgment in her favor, cancelling the Zaldivars' title, ordering reconveyance and possession, and awarding moral damages, exemplary damages, attorney's fees and litigation expenses. The spouses Zaldivar appealed to the Court of Appeals, which reversed and set aside the trial court's decision and dismissed the complaint. The Court of Appeals denied the heirs' motion for reconsideration. The heirs then filed with the Supreme Court this petition for review on certiorari.

Facts

Remegia was the registered owner of a 444 square meter parcel of land in Lapasan, Cagayan de Oro City, covered by Transfer Certificate of Title No. T-8502. A 243 square meter portion of that lot had long been leased from her by Pio Dalman, the father-in-law of Aurelio Zaldivar, first at five pesos a month and later at one hundred pesos a month. Remegia once arranged to mortgage the portion to Ignacio Gil for one hundred pesos, but the mortgage did not push through, and Gil took back his money without returning the receipt she had signed.

In 1974, Aurelio filed with the then Court of First Instance of Misamis Oriental a petition for the issuance of a new owner's duplicate copy of TCT No. T-8502, alleging that the owner's duplicate had been lost. The court granted the petition. Aurelio then filed a second petition, this time for partial cancellation of TCT No. T-8502 and for the issuance of a new title in his name over the subject portion, making it appear that he and his wife had acquired the lot from Dalman, who in turn had bought it from Gil. On the strength of that order, Transfer Certificate of Title No. T-17993 was issued in Aurelio's name. The Zaldivars thereafter built their house on the lot and obtained a loan from the Government Service Insurance System.

Remegia insisted that she never sold the lot to Gil or to Dalman, that she never parted with her owner's duplicate certificate, and that the certificate was never lost. She impugned as falsified the joint affidavit of confirmation of sale that she and her uncle, Narciso Labuntog, supposedly executed before a notary public in December 1965. She discovered the title in the Zaldivars' names only in June 1992, when she went to the Register of Deeds to partition her property among her children, and she filed her complaint soon after.

Issues

• Whether or not the Court of First Instance acquired jurisdiction to order the issuance of a new owner's duplicate copy of TCT No. T-8502 when the original owner's duplicate was never lost.
• Whether or not Transfer Certificate of Title No. T-17993 in the name of Aurelio Zaldivar is void and may be annulled.
• Whether or not the Zaldivars may rely on the joint affidavit of confirmation of sale as proof of their acquisition of the subject lot.
• Whether or not the Zaldivars acquired the lot by prescription or adverse possession.
• Whether or not laches or estoppel barred Remegia's action for reconveyance.

Applicable Provisions

Article 1332 of the Civil Code provides:

When one of the parties is unable to read, or if the contract is in a language not understood by him, and mistake or fraud is alleged, the person enforcing the contract must show that the terms thereof have been fully explained to the former.

This provision shifts to the party enforcing the document the burden of proving that its terms were fully explained to a signatory who cannot read or understand its language, and it governs the joint affidavit of confirmation of sale written entirely in English.

Article 1126 of the Civil Code provides:

Prescription of ownership of lands registered under the Land Registration Act shall be governed by special laws.

This provision sends the question of acquisitive prescription over registered land to the special law, which forbids acquisition of registered land by adverse possession.

Section 46 of Act No. 496, the Land Registration Act, as discussed in the decision, provides:

No title to registered land in derogation of that of the registered owner shall be acquired by adverse possession.

This is the special rule that defeats the Zaldivars' claim of more than forty one years of open, public, adverse and continuous possession.

Ruling

On the first issue, the Court held that the Court of First Instance never acquired jurisdiction to issue the new owner's duplicate copy, because the owner's duplicate was not lost but was in Remegia's possession. The Court ruled that when the owner's duplicate certificate of title has not been lost but is in fact in the possession of another person, the reconstituted certificate is void, since the court that rendered the decision had no jurisdiction, and such a decision may be attacked at any time.

On the second issue, the Court held that TCT No. T-17993 is void because it emanated from the void new owner's duplicate, which Aurelio procured through fraud. The Court ruled that the principle of indefeasibility of a Torrens title does not apply where fraud attended the issuance of the title, and that the Torrens title does not furnish a shield for fraud. Since Remegia's TCT No. T-8502 remained valid, it prevails over Aurelio's title.

On the third issue, the Court held that the Zaldivars cannot rely on the joint affidavit of confirmation of sale, because an affidavit is not by itself a mode of acquiring ownership. The affidavit was written entirely in English, and Remegia testified that she could not read and understand English, having reached only Grade Three. Applying Article 1332, the Court held that the burden fell on the Zaldivars to show that the terms were fully explained to her, and that the notary's bare statement that he read and interpreted the document did not establish that she actually comprehended it. The affidavit also failed to state the consideration for the alleged sale to Gil, the mode of transfer from Gil to Dalman, and how ownership passed from Dalman to Aurelio.

On the fourth issue, the Court held that registered land cannot be acquired by prescription or adverse possession, following Article 1126 of the Civil Code in relation to Section 46 of the Land Registration Act, so proof of the Zaldivars' possession was immaterial and inconsequential.

On the fifth issue, the Court held that laches had not set in, because Remegia merely tolerated the Zaldivars' occupation and discovered the title in their names only in June 1992, shortly before she filed her complaint.

Doctrine

A new owner's duplicate certificate of title issued upon a false claim of loss is void, because the court that ordered it never acquired jurisdiction, and the order may be attacked at any time. The indefeasibility of a Torrens title does not shield a title procured through fraud, and a title issued on void documents may be annulled. An affidavit is not a mode of acquiring ownership. Under Article 1332 of the Civil Code, when a signatory cannot read or the contract is in a language not understood by him and mistake or fraud is alleged, the party enforcing the contract must show that its terms were fully explained to him, and failure to discharge that burden leaves the presumption of fraud or mistake unrebutted. Registered land cannot be acquired by prescription or adverse possession under Article 1126 of the Civil Code in relation to Section 46 of the Land Registration Act, and mere tolerance of another's occupation does not give rise to laches against the registered owner.

Disposition

The Supreme Court granted the petition, reversed and set aside the decision of the Court of Appeals, and reinstated the decision of the Regional Trial Court in favor of Remegia Y. Feliciano, thereby nullifying TCT No. T-17993 and ordering reconveyance of the subject lot.

Remember This

The one line to memorize is that the Torrens title does not furnish a shield for fraud, and a reconstitution ordered when the owner's duplicate is not lost is void for lack of jurisdiction. Examiners use this case on the indefeasibility of Torrens titles, on Article 1332 and contracts in a language the signatory cannot read, and on prescription and laches against registered land.