G.R. No. 133110
March 28, 2007
Doctrine
Estoppel cannot run against the Republic except when there is an innocent purchaser for value.
Facts
This case involved the controversy as to who has the better right over the parcels of land. The two conflicting parties are Barstowwe Philippines Corp (BRC) and the Republic.
BRC traced its title from Servando Accibal (Servando). On the contrary, the Republic traced its title First Philippine Holdings Corporation (FPHC).
The Republic filed a petition for cancellation of title against Antonio & Servando Accibal, and BPC. During the pendency of the civil case, there are two intervenors. One intervenor is Gloria Accibal Rettoriano who alleged that BCP’s TCT was obtained by Servando through fraud and gross bad faith. The other intervenor is EL-VI Realty and Development Corporation (ERDC) who alleged that it acquired interest in the subject lots after having entered into a Joint Venture Agreement with BPC, for the development of the subject lots into a residential subdivision. ERDC alleged that the action initiated by the Republic for the cancellation of the TCTs of BPC was already barred by laches and estoppel because of the recognition accorded upon the said TCTs by the instrumentalities of the Republic, particularly the Register of Deeds and the HLURB.
The RTC ratiocinated that the title of BCP should prevail because the title of the latter’s predecessor-in-interest were issued 5 or 6 years earlier than that of the predecessor-in-interest of the Republic. However, the CA ruled in favor of the Republic. An investigation conducted by the LRA revealed irregularities which raised serious doubts as to the validity and authenticity of the certificate of titles of Servando. The LRA Report, found the said certificates of titles spurious after a very detailed and exhaustive analysis of the evidence available. Hence, this petition.
In the petition before the Supreme Court, there are several parties who again filed a motion to intervene, intervenors Abesamis, Nicolas-Agbulos, and spouses Santiago. All of them bought some portions of the land which is the subject of the present controversy from BPC who is a developer.
Moreover, the heirs of Servando filed an Urgent Ex Parte Motion to Defer Resolution of the case alleging that they were prevented from participating in Civil Case before the RTC because of the fraudulent misrepresentations the BPC President.
Issue
Whether or not the State may still recover recover the ownership of lots sold in good faith by a private developer to innocent purchasers for value.
Held
Generally, estoppel cannot lie against the State. An exception to that rule is when innocent purchasers for value are involved. Time-settled is the doctrine that where innocent third persons, relying on the correctness of the certificate of title, acquire rights over the property, courts cannot disregard such rights and order the cancellation of the certificate. Such cancellation would impair public confidence in the certificate of title, for everyone dealing with property registered under the Torrens system would have to inquire in every instance whether the title has been regularly issued or not.
In this case, the intervenor-buyers except for spouses Santiago are considered innocent purchaser for value. Hence, their titles should be respected. In other words, the Republic cannot recover from them.
Moreover, BPC is not an innocent purchaser for value. Hence, BPC’s title cannot prevail against the State. As a result, the unsold lands should be returned to the Republic.
Hence, as far as the subdivision lots still in the name of BPC are concerned, the Republic has the option to either (1) recover the said lots and demand that BPC demolish whatever improvements it has made therein, to return the lots to their former condition, at the expense of BPC; or (2) compel BPC to pay the price of the land. The choice can only be made by the Republic, as the rightful owner of the said subject lots.