Summary
Highlights
Reversion of lands means a previously registered land owned by a private person is returned to the public domain. This can occur due to irregular procedures, fraud in the application, or if the registrant was not entitled to registration. Actions for reversion are typically instituted by the Solicitor General on behalf of the state and can generally be filed anytime as prescription does not lie against the state. However, the rule is not absolute and can be defeated by laches or the rights of an innocent purchaser for value.
Subsequent registration through sale involves several steps. First, execute a deed of absolute sale (not a contract to sell or conditional sale), which must be a public instrument. Second, present the deed to the BIR for payment of capital gains tax and documentary stamp tax. Third, pay transfer taxes to the city or municipal treasurer. Fourth, register the deed with the Register of Deeds, surrendering the owner's certificate and proof of tax payments. Finally, present the new transfer certificate of title to the city assessor's office for tax declaration.
For inherited land, the first step is to settle the estate, either judicially (if there's a will, minor heirs, or debts) or extrajudicially (if no will, all heirs are of age, and no debts). The settlement document (final judicial decision or extrajudicial settlement) must be a public instrument. Subsequently, present the document to the BIR for estate tax payment, then to the city/municipal treasurer for transfer taxes. Register the document with the Register of Deeds, surrendering the old title. Finally, present the new TCT to the city assessor's office for tax declaration.
When buying land, more than just ordinary diligence is required. The 'Mirror Doctrine' states that you can rely on the correctness of a clean certificate of title without looking beyond it, unless there are circumstances that arouse suspicion (actual knowledge of defects, vendor acting as agent, or presence of anything that excites suspicion). If suspicious elements exist, thorough investigation is required. Failure to exercise due diligence makes one a buyer in bad faith, who is not protected by law.
To be considered an innocent purchaser for value, a buyer should: 1) Verify the origin, history, authenticity, and validity of the title with the Register of Deeds and LRA. 2) Engage a competent geodetic engineer to verify boundary meets and bounds. 3) Conduct an ocular inspection of the lot. 4) Inquire from adjoining lot owners about the property's true ownership. 5) Put up signs indicating the property is being purchased to elicit claims or issues.
Encumbrances are transactions that do not transfer ownership but affect registered land (e.g., mortgage, lease, power of attorney, attachment). These are recorded or annotated on the existing title. Voluntary dealings, like mortgages, require the surrender of the owner's duplicate. Involuntary dealings (attachment, adverse claim, lis pendens) are compulsory processes initiated by court order or legal instruments and do not require the owner's duplicate to be surrendered for annotation. Registration serves as notice to the whole world, but agreements are binding between parties even if not registered.
Voluntary dealings can be discharged or cancelled by an instrument executed by the mortgagee or lessee, or by revoking a power of attorney. Involuntary dealings like attachments and liens can be discharged by a court order. Adverse claims are generally discharged by court order, unless the claimant files an affidavit withdrawing or canceling the claim.
Cadastral registration is initiated by the state to identify and award lands to occupants within a defined area. The government acts as the plaintiff, and claimants are respondents. It begins with a cadastral survey by the DENR, followed by institution of original registration proceedings in the RTC. Claimants file answers demonstrating their right or ownership, and the court adjudicates conflicting interests, leading to the issuance of original certificates of title.
This system records transactions involving lands not yet issued titles, under Act 3344 and PD 1529. Registration is purely voluntary. Deeds affecting unregistered lands are valid between parties even without registration. The LRA maintains a primary entry book and registry book for these transactions, which can include mortgages, leases, and even involuntary dealings like tax sales and adverse claims to provide a record.
The Assurance Fund is a state fund that compensates individuals who suffer damages due to errors or unlawful issuance of certificates of title under the Torrens system. To be compensated, the claimant must be an innocent owner/purchaser/encumbrancer, have suffered actual damage, not be negligent, the loss wasn't due to breach of trust or certain survey mistakes, and they are barred from recovering the land or compensation from the responsible person. The claim must also be filed within six years from actual knowledge of the fraudulent registration. Actions are brought against the Register of Deeds and the National Treasurer, with the Solicitor General defending the state.