FIRST DIVISION

[G. R. No. 114348. September 20, 2000]

NATIONAL IRRIGATION ADMINISTRATION, petitioner, vs. COURT OF APPEALS and DICK MANGLAPUS, respondents.

D E C I S I O N

PARDO, J.:

This case is an appeal[1] from the decision of the Court of Appeals[2] affirming in toto the decision of the Regional Trial Court, Branch 04, Tuguegarao, Cagayan[3] ruling in favor of private respondent Dick Manglapus (hereinafter referred to as "Manglapus"), and ordering petitioner National Irrigation Administration (hereinafter referred to as "NIA") to pay Manglapus one hundred fifty thousand six hundred pesos (P150,600.00), and fifty thousand pesos (P50,000.00), as compensatory damages, five thousand pesos (P5,000.00), as attorney's fees, and two thousand pesos (P2,000.00), as litigation expenses and costs.

First, the relevant facts.

On June 28, 1963, a free patent over three (3) hectares of land, situated in barrio Baybayog, municipality of Alcala, province of Cagayan was issued in the name of respondent's predecessor-in-interest, Vicente Manglapus, and registered under Original Certificate of Title No. P-24814, in his name. The land was granted to Vicente Manglapus,[4] subject to the following proviso expressly stated in the title:[5]

"TO HAVE AND TO HOLD the said tract of land, with the appurtenances thereunto of right belonging unto the said VICENTE MANGLAPUS and to his heirs and assigns forever, subject to the provisions of sections 113, 121, 122 and 124 of Commonwealth Act. No. 141, as amended which provide that except in favor of the Government or any of its branches, units, or institutions, the land hereby acquired shall be inalienable and shall not be subject to encumbrance for a period of five (5) years from the date of this patent, and shall not be liable for the satisfaction of any debt contracted prior to the expiration of that period; that it shall not be encumbered, alienated, or transferred to any person, corporation, association or partnership not qualified to acquire lands of the public domain under said Commonwealth Act No. 141, as amended; and that it shall not be subject to any encumbrance whatsoever in favor of any corporation, association or partnership except with the consent of the grantee and the approval of the Secretary of Agriculture and Natural Resources and solely for educational, religious or charitable purposes or for a right of way; and subject finally to all conditions and public easements and servitudes recognized and prescribed by law especially those mentioned in sections 109, 110, 111, 112, 113 and 114 of Commonwealth Act No. 141 as amended, and the right of the Government to administer and protect the timber found thereon for a term of five (5) years from the date of this patent, provided, however, that the grantee or heirs may cut and utilize such timber for his or their personal use (underscoring ours)."

Subsequently, respondent Manglapus acquired the lot from Vicente Manglapus by absolute sale.

On July 18, 1974, the land was registered in Dick Manglapus' name under Transfer Certificate of Title No. T-26658 of the Register of Deeds for the Province of Cagayan.[6] The land is particularly described as follows:[7]

"Lot No. 3559, Pls-497, with an area of 30,438 square meters, and covered by TRANSFER CERTIFICATE OF TITLE NO. T-26658, and Tax Declaration No. 11985."

Sometime in 1982, NIA entered into a contract with Villamar Development Construction. Under the contract, NIA was to construct canals in Amulung, Cagayan and Alcala, Cagayan. NIA then entered a portion of Manglapus' land and made diggings and fillings thereon.[8]

The portion of Manglapus' land entered into by NIA is described as follows:[9]

"In a sketch prepared by NIA's employee labeled as NIA canal "Lateral "D", with an area of 7,880 square meters, which is a portion of Lot 3559, Pls-497."

On March 14, 1991, Manglapus filed with the Regional Trial Court, Tuguegarao, Cagayan a complaint for damages against NIA.[10] Manglapus alleged that NIA's diggings and fillings destroyed the agricultural use of his land and that no reasonable compensation was paid for its taking.[11]

Despite service of notice of the pretrial conference,[12] NIA did not appear at the pre-trial conference.[13]

On December 3, 1991, the trial court declared NIA in default and received Manglapus' evidence ex parte.[14]

On December 23, 1991, the trial court rendered a decision in favor of Manglapus, thus:[15]

"WHEREFORE, and in consideration of the foregoing, the Court finds preponderance of evidence in favor of the plaintiff and against the defendant:

"1) Ordering the defendant to pay plaintiff the sum of One Hundred Fifty Thousand Six Hundred Pesos (P150,600.00) and Fifty Thousand (P50,000.00) Pesos as compensatory damages;

"2) Ordering the defendant to pay to plaintiff the sum of Five Thousand Pesos (P5,000.00) as attorney's fees and Two Thousand Pesos (P2,000.00) as litigation expenses; and

"3) To pay the cost of the suit.

"SO ORDERED."

On January 27, 1992, NIA filed a motion to lift the order of default dated December 3, 1991, and to set aside the afore-quoted decision of December 23, 1991.[16]

On June 3, 1992, the trial court issued a resolution denying the motion for lack of merit.[17]

On July 17, 1992, NIA filed a notice of appeal to the Court of Appeals.[18]

On July 27, 1992, the trial court gave due course to the appeal and ordered the transmission of the original records to the Court of Appeals.[19]

On July 30, 1992, Manglapus filed a motion for execution of judgment with the trial court.[20]

On August 7, 1992, the NIA through the Solicitor General filed an opposition to the motion for execution.[21]

On August 17, 1992, the trial court declared that since the notice of appeal of NIA was given due course, the motion for execution was "moot and academic."[22]

On March 8, 1994, the Court of Appeals promulgated its decision, the dispositive portion of which reads:[23]

"WHEREFORE, PREMISES CONSIDERED, the decision appealed from is hereby AFFIRMED in toto and the appeal is hereby DISMISSED.

"SO ORDERED."

Hence, this appeal.[24]

The sole issue is whether the NIA should pay Manglapus just compensation for the taking of a portion of his property for use as easement of a right of way.

We find that NIA is under no such obligation. We sustain the appeal.

We agree with NIA that the Transfer Certificate of Title[25] and the Original Certificate of Title[26] covering the subject parcel of land contained a reservation granting the government a right of way over the land covered therein.[27]

The transfer certificate of title, on which both the trial court and Court of Appeals relied, contains such a reservation. It states that title to the land shall be:[28]

"...subject to the provisions of said Land Registration Act and the Public Land Act, as well as those of Mining Laws, if the land is mineral, and subject, further to such conditions contained in the original title as may be subsisting (underscoring ours)."

Under the Original Certificate of Title,[29] there was a reservation and condition that the land is subject to "to all conditions and public easements and servitudes recognized and prescribed by law especially those mentioned in Sections 109, 110, 111, 112, 113 and 114, Commonwealth Act No. 141, as amended." This reservation, unlike the other provisos[30] imposed on the grant, was not limited by any time period and thus is a subsisting condition.

Section 112, Commonwealth Act No. 141, provides that lands granted by patent,

"shall further be subject to a right of way not exceeding twenty meters in width for public highways, railroads, irrigation ditches, aqueducts, telegraphs and telephone lines, and similar works as the Government or any public or quasi-public service or enterprises, including mining or forest concessionaires may reasonably require for carrying on their business, with damages for the improvements only (underscoring ours)."

We note that the canal NIA constructed was only eleven (11) meters in width. This is well within the limit provided by law.[31] Manglapus has therefore no cause to complain.

Article 619 of the Civil Code provides that, "Easements are established either by law or by the will of the owners. The former are called legal and the latter voluntary easements." In the present case, we find and declare that a legal easement of a right-of-way exists in favor of the government. The land was originally public land, and awarded to respondent Manglapus by free patent. The ruling would be otherwise if the land were originally private property, in which case, just compensation must be paid for the taking of a part thereof for public use as an easement of a right of way.[32]

Neither can Manglapus argue that he was a transferee or buyer in good faith. Under the Torrens system, for one to be a buyer in good faith and for value, the vendee must see the transfer certificate of title and rely upon the same.[33] Here, the annotation on the transfer certificate of title imposed on Manglapus the duty to refer to the conditions annotated on the back of the original certificate of title. This, he did not do. The law cannot protect him. Manglapus is a transferee with notice of the liens annotated in the title.

One who deals with property registered under the Torrens system is charged with notice of burdens and claims that are annotated on the title.[34]

WHEREFORE, the Court GRANTS the petition for review on certiorari, and REVERSES the decision of the Court of Appeals in CA-G. R. CV No. 38835.

IN LIEU THEREOF, the Court SETS ASIDE the decision of the Regional Trial Court, Branch IV, Tuguegarao, Cagayan in Civil Case No. 4266, and DISMISSES the complaint.

No costs.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Puno, and Kapunan, JJ., concur.

Ynares-Santiago, J., no part.



[1] Under Rule 45, 1964 Revised Rules of Court.

[2] In CA-G. R. CV No. 38835, promulgated on March 8, 1994, Associate Justice Manuel C. Herrera, ponente, concurred in by Associate Justices Cezar D. Francisco and Buenaventura J. Guerrero.

[3] In Civil Case No. 4266, dated December 23, 1991, Judge Plaridel L. Villacete, presiding.

[4] The Original Certificate of Title stated that Vicente Manglapus possessed "all the qualifications required by law in the premises, has fully complied with all the conditions, requirements, and provisions of Republic Act No. 782 and Chapter VII of Commonwealth Act No. 141, as amended, governing the granting of free patents to native settlers, and is therefore, entitled to a free patent."

[5] CA Rollo, p. 26.

[6] Rollo, p. 65.

[7] Rollo., p. 100.

[8] Ibid.

[9] Ibid., p. 127; Trial Court Record, p. 52.

[10] Ibid., p. 100; Trial Court Record, pp. 1-2.

[11] Ibid., pp. 100-101.

[12] Trial Court Record, p. 26.

[13] Ibid., pp. 34-37.

[14] Rollo, pp. 46-48; Trial Court Record. pp. 43-45.

[15] Ibid., p. 57; Trial Court Record, p. 64.

[16] Trial Court Record, pp. 75-84.

[17] Trial Court Record, pp. 92-98.

[18] Docketed as CA-G. R. CV No. 38835, Rollo, p. 64; Trial Court Record, p. 100.

[19] Trial Court Record, p. 102.

[20] Ibid., pp. 103-104.

[21] Ibid., pp. 105-107.

[22] Ibid., p. 108.

[23] Rollo, p. 39.

[24] We resolved to give due course to the petition on November 18, 1998 (Rollo, p. 97).

[25] TCT No. T-26658, Rollo, pp. 65-66.

[26] OCT No. P-24814, Rollo, pp. 67-68.

[27] The reservation was said to be made when the government ceded the land by free patent to the grantee (Rollo, p. 14).

[28] Rollo, p. 65.

[29] Original Certificate of Title No. P-24814.

[30] The "other provisos" which had a period or limit of effectivity were: (1) except in favor of the Government or any of its branches, units, or institutions, the land hereby acquired shall be inalienable and shall not be subject to encumbrance for a period of five (5) years from the date of this patent, and shall not be liable for the satisfaction of any debt contracted prior to the expiration of that period; (2) the land shall be subject to the right of the Government to administer and protect the timber found thereon for a term of five (5) years from the date of this patent.

[31] In fact, the twenty (20) meter width limit was increased to sixty (60) meters by P. D. 635, Section 1.

[32] Article III, Section 9, Constitution. See also Heirs of Alberto Suguitan v. City of Mandaluyong, G. R. No. 123215, March 14, 2000.

[33] Islamic Directorate of the Philippines v. Court of Appeals, 272 SCRA 454 (1997).

[34] Legarda v. Court of Appeals, 280 SCRA 642 (1997); Secuya v. de Selma, G. R. No. 13602, February 22, 2000.