CASIMIRO DEVELOPMENT CORPORATION vs. RENATO L.

MATEO
G.R. No. 175485. July 27, 2011.
Nature: PETITION for review on certiorari
Ponente: BERSAMIN, J.
Facts:
 Isaias Lara owned a land (6,693 sq.m.) in Las Piñ as City. Upon his death the land was
transferred to his daughter Felicidad Lara-Mateo. Felicidad had five children.
 A deed of sale over the property was executed in favor of Laura (daughter). In 1967, she
applied for land registration (OCT No. 6386).
 Laura used the land as collateral for several loans. As payment for one loan she
executed a deed of sale in favor of Rodolfo Pe. Pe then constituted a mortgage on the
property in favor of China Bank. China Bank then foreclosed the mortgage.
 In 1988, CDC bought the property from China Bank and TCT No. T-34640 was issued.
 On February 28, 1991, Felicidad died intestate.
 On June 6, 1991, CDC brought an action for unlawful detainer in the MeTC against the
respondent’s siblings. MeTC ruled in favor of CDC. RTC resolved against CDC, and held
that the MeTC had acted without jurisdiction because the land was agricultural; hence,
under DARAB. CA ruled in favor of CDC. SC affirmed the decision of the CA.
 On June 29, 1994, the respondent brought an action for quieting of title, reconveyance
of four-fifths of the land, and damages against CDC and Laura in the RTC. RTC held in
favor of CDC. CA reversed the decision and declared CDC to be a buyer in bad faith since
it knew the flaws and defects of the land when it bought it.
Issue:
1) What is the significance of the Torrens System
2) Whether the respondent still has the right to question Laura’s title over the land after a
lapse of more than 20 years.
3) Whether CDC was a buyer in bad faith.
Held: Petition is Granted.
Ratio:
1) The Torrens system gives the registered owner complete peace of mind, in order that he
will be secured in his ownership as long as he has not voluntarily disposed of any right
over the covered land.
2) NO. Registration under the Torrens system is not a mode of acquiring ownership, it does
not create or vest title; The Torrens certificate of title is merely an evidence of
ownership or title in the particular property described therein. Nonetheless, it is
essential that title registered under the Torrens system becomes indefeasible and
incontrovertible. Registration of land under the Torrens System, aside from perfecting
the title and rendering it indefeasible after the lapse of the period allowed by law, it
also renders the title immune from collateral attack.
3) NO. One who deals with property registered under the Torrens system need not go
beyond the certificate of title, but only has to rely on the certificate of title.