STATUTORY LIENS AFFECTING TITLE

SEC. 44. Statutory liens affecting title. — Every registered owner receiving a certificate of
title in pursuance of a decree of registration, and every subsequent purchaser of registered
land taking a certificate of title for value and in good faith, shall hold the same free from all
encumbrances except those noted in said certificate and any of the following encumbrances
which may be subsisting, namely:

First. Liens, claims or rights arising or existing under the laws and Constitution of the
Philippines which are not by law required to appear of record in the Registry of Deeds in
order to be valid against subsequent purchasers or encumbrancers of record.

Second. Unpaid real estate taxes levied and assessed within two years immediately preceding
the acquisition of any right over the land by an innocent purchaser for value, without
prejudice to the right of the government to collect taxes payable before that period from the
delinquent taxpayer alone.

Third. Any public highway or private way established or recognized by law, or any
government irrigation canal or lateral thereof, if the certificate of title does not state that the
boundaries of such highway or irrigation canal or lateral thereof have been determined.

Fourth. Any disposition of the property or limitation on the use thereof by virtue of, or
pursuant to, Presidential Decree No. 27 or any other law or regulations on agrarian reform.

PURPOSE OF PROVISION
The purpose is to give to the person registering, and to his transferee for value, an
absolutely clean title, one not subject to hidden defects, to undeveloped or inchoate claims, to any
sort of restriction, limitation or reduction except those named in the certificate of registration or
described in the law.
That being the purpose of the statute, the exceptions specified in Section 44 will not be
enlarged beyond the actual signification of the words used or extended beyond the limits which
the words themselves actually set.

A. General Rule: Every registered owner receives and holds the certificate free from all
encumbrances
Under Section 44 of PD 1529, every registered owner receiving a certificate of title
pursuant to a decree of registration and every subsequent purchaser of registered land taking such
certificate for value and in good faith shall hold the same free from all encumbrances, except
(a) those noted in the certificate of title and (b) encumbrances enumerated in the law.
Thus, a person dealing with registered land is not require to go behind the registry to
determine the condition is noted on the face of the register or certificate of title.
Following this principle, it has been held as regards registered land that a purchaser in good
faith acquires a good title as against all the transferees whose right are not recorder in the Registry
of Deeds at the time of the sale.

In the case SM Prime Holdings v. Madayag. G.R. No. 164687. February 12, 2009;

Madayag filed with the RTC of Pangasinan an application for registration of a parcel of land
situated in Urdaneta City, Pangasinan. SM Prime Holdings, Inc. (SM) filed an opposition to the
application alleging that Madayag’s survey plan encroached from their properties.
Meanwhile, SM filed with the DENR a petition for the cancellation of Madayag’s survey plan.
SM filed a Motion to Suspend Proceedings, alleging that the RTC should await the DENR
resolution of the petition for the cancellation of the survey plan.

The issue is whether the RTC should suspend the proceedings in the land registration case
pending the resolution of the petition for the cancellation of Madayag’s survey plan filed with
the DENR.

It was ruled that there is no need to suspend the proceedings. When the law confers jurisdiction
upon a court, the latter is deemed to have all the necessary powers to exercise such jurisdiction to
make it effective. It may, therefore, hear and determine all questions that arise from a petition for
registration.

The RTC need not wait for the decision of the DENR in the petition to cancel the survey plan in
order to determine whether the subject property is already titled or forms part of already titled
property.

B. Exceptions or Limitations on ownership of registered land

a. those noted in the certificate of title
The following may limit the registered owners’ absolute title over the property:

1. Liens, claims or rights existing or arising under the laws or the Constitution which are not by
law required to appear of record in the Registry of Deeds;

2. Unpaid real estate taxes levied and assessed within two years immediately preceding the
acquisition of any right over the land;

3. Any public highway or private way established or recognized by law, or any government
irrigation canal or lateral thereof;

4. Any disposition of the property or limitation on the use thereof by virtue of PD No. 27 or any
other law or regulation on agrarian reform;

5. Rights incident to the relation of husband and wife, and landlord and tenant;

6. Liability to attachment or levy on execution;

7. Liability to any lien of any description established by law on the land and the buildings
thereon, or on the interest of the owner on such lands and buildings;

8. Rights incident to the laws of descent or partition between co-owners;

9. Taking of the property through eminent domain;

10. Right to relieve the land from liability to be recovered by an assignee in insolvency or trustee
in bankruptcy under the laws relative to preferences; and

11. Rights or liabilities created by law and applicable to unregistered land.

b. those enumerated by law
 Section 44 , PD 1529 is an exclusive enumeration
Under the aforesaid provision, claims and liens of whatever character, except those
mentioned by law as existing, against the land prior to the issuance of certificate of title are
cut off by such certificate if not noted, and the certificate so issued binds the whole world,
including the government.

Thus, if the purchaser is the only party who appears in the deeds and in the titles
registered in the property registry, no one except such purchaser may be deemed by law to be
the owner of the properties in question.

Moreover, no title to registered land in derogation to that of the registered owner shall be
acquired by prescription or adverse possession.

In the case Rojas v. Tagaytay, GR no. L- 13333

Petitioners Zosimo Rojas, et al., claiming to be the registered owners of a parcel of land registered under
the City of Tagaytay seek to nullify the title.

On July 15, 1957, Zosimo Rojas, supposed vendor of the lot in question, together with his present
co-petitioners, Manuel, Bernardo, Deomedes, Felisa and Soledad, all surnamed Rojas, filed in the same
proceeding a petition to set aside the decision of the court in so far as said Lot No. 1, Psu-103916-Amd
was concerned; to lift the order of general default as far as it affected them because as adjoining
owners cited in the application, no actual notice was served them praying that they be allowed to file their
opposition to the registration of the aforesaid lot for the reason, among others, said Lot. No. 1 was part of
a bigger parcel of land already decreed in a previous land registration and covered by an original
certificate of title issued by the Register of Deeds of Cavite in their names since
December 5, 1940.

It is clear therefrom that even if we concede, for the sake of argument, that a municipal building or city
hall and the land whereon it is erected may be considered as properties for public use, the registration of
Lot No. 1 of subdivision plan Psu-103916-Amd. in favor of respondent City of Tagaytay, a lot already
previously decreed by a competent court in favor of the petitioners, which action, we hold, is null and
void.

 Sec. 60 of Commonwealth Act No. 141 is a statutory lien affecting title of the
registered land if not annotated at the back of the certificate. Hence, alienable
lands of the public domain held by government entities, cannot, under Section
60, Ca 141 be alienated or encumbered unless Congress passes a law
authorizing their disposition.

In the case Chavez v. Public Estates Authority, GR no. 133250;

FACTS:

The Public Estates Authority (PEA) is the central implementing agency tasked to
undertake reclamation projects nationwide.

PEA sought the transfer to the Amari Coastal Bay and Development Corporation, a private
corporation, of the ownership of 77.34 hectares of the Freedom Islands. PEA also sought to have
290.156 hectares of submerged areas of Manila Bay to Amari.
ISSUE: Whether or not the transfer is valid.
HELD: No. To allow vast areas of reclaimed lands of the public domain to be transferred to
Amari as private lands will sanction a gross violation of the constitutional ban on private
corporations from acquiring any kind of alienable land of the public domain.

The transfer (as embodied in a joint venture agreement) to AMARI, a private corporation,
ownership of 77.34 hectares of the Freedom Islands, is void for being contrary to Section 3,
Article XII of the 1987 Constitution which prohibits private corporations from acquiring any
kind of alienable land of the public domain. Furthermore, since the Amended JVA also seeks to
transfer to Amari ownership of 290.156 hectares of still submerged areas of Manila Bay, such
transfer is void for being contrary to Section 2, Article XII of the 1987 Constitution which
prohibits the alienation of natural resources other than agricultural lands of the public domain.

 Other Exceptions – Section 46, PD 1529

 Rights incident to husband and wife

 Presumption: Under the Family Code, all property acquired during the
marriage are presumed to belong to the Absolute Community of
Property.

In the case Domingo v. Reed. GR no. 157701;

In Domingo v. Reed, the Court held that the wife may not bind the conjugal assets without a
special authorization from the husband, thus:
“
Lolita Reed argues that, even on the assumption that the SPA was indeed a forgery, she was still
justified in effecting a sale without her husband’s consent. We are not persuaded. In addition to
the fact that her rights over the property were merely inchoate prior to the liquidation of the
conjugal partnership, there was absolutely not proof to her allegations that she used the proceeds
of the sale to purchase necessities for the maintenance and support of the family. Having failed
to establish any of these circumstances, she may not unilaterally bind the conjugal assets.”

 Exception: Where the title is in the name of only spouse and the rights
of innocent third parties are involved.

 The presumption applies to property acquired during the lifetime of the

husband and wife. When the property is registered in the name of a spouse only and
there is no showing as to when the property was acquired by said spouse, this is an
indication that the property belongs exclusively to said spouse.

 Rights incident to landlord and tenant

 Liability to attachment and execution
 Liability to any lien of any description established by law on land and
buildings thereon or on the interest of the owner on such lands and buildings
 Rights incident to the laws on descent
 Rights incident to the laws on partition between co-owners
 Taking of the property through eminent domain
 Right to relieve such land from liability to be recovered by an assignee in
insolvency of trustee of bankruptcy under the laws relative to preferences
 Rights or liabilities created by law and applicable to unregistered land
C. Certificate if title is subject to servitudes.
Exception: Digran v. Auditor General
The heirs are entitled to just compensation. The Government had no authority to take
private lands (covered by Act 1120) for public use without just compensation.

Section 39 of the Land Registration Act states: “Every person receiving a certificate of title
in pursuance of a decree of registration, and every subsequent purchaser of registered land who
takes a certificate of title for value in good faith shall hold the same free of all encumbrances except
those noted on said certificate, and subsisting encumbrances including: any public highway, way,
private way established by law, where the certificate of title does not state that the boundaries of
such highway have been determined.”

The exception in the said section doesn't apply in this case because Mango Avenue was
constructed subsequent to the acquisition of the lot. The road is not a subsisting encumbrance when
Cabucos purchased it. Laches and prescription cannot deprive Cabucos of her ownership over Lot
No. 638-B nor would they dispossess her of her right to demand compensation. The land was
registered under the Torrens System, hence, the Government cannot acquire ownership over it by
prescription. The owner of the land expropriated for public use is entitled to recover the fair market
value of the property at the time of taking plus interest at the legal rate.

D. What are liens (charges) and encumbrances (burden)?

Lien

A “lien” is a charge on property usually for the payment of some debt or obligation.

A “lien” is a qualified right or a proprietary interest, which may be exercised over the
property of another. It is a right which the law gives to have a debt satisfied out of a particular
thing. It signifies a legal claim or charge on property, either real or personal, as a collateral or
security for the payment of some debt or obligation.

A lien is already an existing burden.

Encumbrance
An “encumbrance is a burden upon land, depreciative of its value, such as a lien,
easement, or servitude, which, though adverse to the interest of the landowner, does not conflict
with his conveyance of the land in fee.”

 The following are considered encumbrances:

 Mortgage
 Judgment
 Lease
 Security Interest
 Easement of right of way
 Accrued and unpaid taxes
 Is adverse possession by another an encumbrance?
In the case Ozaeta v. Palanca

Adverse possession by another is not considered as an “encumbrance” in law, and

does not go against the condition that the subject property be free from encumbrance.
  Does a notice of lis pendens establish a lien?
A notice of lis pendens, as the very term connotes, does not establish a “lien” but is only
a notice or warning that a claim or possible charge on the property is pending determination by
the court (People v. Regional Trial Court of Manila, GR No. 81541, Oct. 4, 1989, 178 SCRA
299).
 What are annotations? Purpose.
In the case ASB Realty Corporation v. Ortigas & Company Limited Partnership, GR
no. 202947;
An annotation, on the other hand, is "a remark, note, case summary, or commentary on
some passage of a book, statutory provision, court decision, of the like, intended to illustrate
or explain its meaning."
The purpose of the annotation is to charge the purchaser or title holder with notice of such
burden and claims. Being aware of the annotation, the purchaser must face the possibility that
the title or the real property could be subject to the rights of third parties.

6. RESTRICTIVE COVENANTS THAT RUN WITH THE LAND

A. Nature of Restrictive Covenants

Fajardo v. Freedom to Build, Gr No. 134692

7. SPLITTING OR CONSOLIDATION OF TITLE, SECTION 49, PD 1529

Section 49. Splitting, or consolidation of titles. A registered owner of several distinct parcels of
land embraced in and covered by a certificate of title desiring in lieu thereof separate certificates,
each containing one or more parcels, may file a written request for that purpose with the Register
of Deeds concerned, and the latter, upon the surrender of the owner's duplicate, shall cancel it
together with its original and issue in lieu thereof separate certificates as desired. A registered
owner of several distinct parcels of land covered by separate certificates of title desiring to have
in lieu thereof a single certificate for the whole land, or several certificates for the different parcels
thereof, may also file a written request with the Register of Deeds concerned, and the latter, upon
the surrender of the owner's duplicates, shall cancel them together with their originals, and issue
in lieu thereof one or separate certificates as desired.
8. SUBDIVISION AND CONSOLIDATION PLANS, SECTION 50, PD 1529
A. Simple Subdivisions, Section 50, PD 1529

Section 50. Subdivision and consolidation plans. Any owner subdividing a tract of registered
land into lots which do not constitute a subdivision project has defined and provided for under
P.D. No. 957, shall file with the Commissioner of Land Registration or with the Bureau of Lands
a subdivision plan of such land on which all boundaries, streets, passageways and waterways, if
any, shall be distinctly and accurately delineated.

If a subdivision plan, be it simple or complex, duly approved by the Commissioner of Land

Registration or the Bureau of Lands together with the approved technical descriptions and the
corresponding owner's duplicate certificate of title is presented for registration, the Register of
Deeds shall, without requiring further court approval of said plan, register the same in
accordance with the provisions of the Land Registration Act, as amended: Provided, however,
that the Register of Deeds shall annotate on the new certificate of title covering the street,
passageway or open space, a memorandum to the effect that except by way of donation in favor
of the national government, province, city or municipality, no portion of any street, passageway,
waterway or open space so delineated on the plan shall be closed or otherwise disposed of by the
registered owner without the approval of the Court of First Instance of the province or city in
which the land is situated.

A registered owner desiring to consolidate several lots into one or more, requiring new technical
descriptions, shall file with the Land Registration Commission, a consolidation plan on which
shall be shown the lots to be affected, as they were before, and as they will appear after the
consolidation. Upon the surrender of the owner's duplicate certificates and the receipt of
consolidation plan duty approved by the Commission, the Register of Deeds concerned shall
cancel the corresponding certificates of title and issue a new one for the consolidated lots.

The Commission may not order or cause any change, modification, or amendment in the contents
of any certificate of title, or of any decree or plan, including the technical description therein,
covering any real property registered under the Torrens system, nor order the cancellation of the
said certificate of title and the issuance of a new one which would result in the enlargement of
the area covered by the certificate of title.

B. Complex Subdivisions, PD 957

Complex subdivision plan. "Complex subdivision plan" shall mean a subdivision plan of a
registered land wherein a street, passageway or open space is delineated on the plan.