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"A certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein. The real purpose of the Torrens system of land registration is to quiet title to land and put a stop forever to any question as to the legality of the title.”40
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In Tenio-Obsequio v. Court of Appeals , we explained the purpose of the Torrens system and its legal implications to third persons dealing with registered land, as follows:
The main purpose of the Torrens system is to avoid possible conflicts of title to real estate and to facilitate transactions relative thereto by giving the public the right to rely upon the face of a Torrens certificate of title and to dispense with the need of inquiring further, except when the party concerned has actual knowledge of facts and circumstances that should impel a reasonably cautious man to make such further inquiry.
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Where innocent third persons, relying on the correctness of the certificate of title thus issued, acquire rights over the property, the court cannot disregard such rights and order the total cancellation of the certificate. The effect of such an outright cancellation would be to 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 as to whether the title has been regularly or irregularly issued by the court . Every person dealing with registered land may safely rely on the correctness of the certificate of title issued there for and the law will in no way oblige him to go beyond the certificate to determine the condition of the property.
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The Torrens system was adopted in this country because it was believed to be the most effective measure to guarantee the integrity of land titles and to protect their indefeasibility once the claim of ownership is established and recognized.
If a person purchases a piece of land on the assurance that the seller’s title thereto is valid, he should not run the risk of being told later that his acquisition was ineffectual after all. This would not only be unfair to him. What is worse is that if this were permitted, public confidence in the system would be eroded and land transactions would have to be attended by complicated and not necessarily conclusive investigations and proof of ownership. The further consequence would be that land conflicts could be even more numerous and complex than they are now and possibly also more abrasive, if not even violent. The Government, recognizing the worthy purposes of the Torrens system, should be the first to accept the validity of titles issued there under once the conditions laid down by the law are satisfied.
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The Torrens system was intended to guarantee the integrity and conclusiveness of the certificate of registration, but the system cannot be used for the perpetration of fraud against the real owner of the registered land. The system merely confirms ownership and does not create it. It cannot be used to divest lawful owners of their title for the purpose of transferring it to another one who has not acquired it by any of the modes allowed or recognized by law. Thus, the Torrens system cannot be used to protect a usurper from the true owner or to shield the commission of fraud or to enrich oneself at the expense of another.41
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[HERE], a cursory examination of the record will show that petitioner’s action does not appear to be groundless. There are circumstances which lead one to believe that respondents are not exactly innocent of the charge. Their failure to register the unnotarized and undated deed of absolute sale is at the very least unusual; it is contrary to experience. It is uncharacteristic of a conscientious buyer of real estate not to cause the immediate registration of his deed of sale as well as the issuance of a new certificate of title in his name.
Having supposedly paid a considerable amount (250,000.00) for the property, respondents certainly would have protected themselves by immediately registering the sale and obtaining a new title in their name; but they did not. Even after petitioner caused the annotation of her affidavit of loss, respondents did not register their supposed sale, but merely annotated an "affidavit of non-lo ss." This, together with the fact that the deed of absolute sale is undated and unnotarized, places their claim that they are purchasers in good faith seriously in doubt. The ruling in Rufloe v. Burgos42 comes to mind:
We cannot ascribe good faith to those who have not shown any diligence in protecting their rights, Respondents had know ledge of facts that should have led them to inquire and investigate in order to acquaint themselves with possible defects in the title of the seller of the property. However, they failed to do so. Thus, Leonarda, as well as the Burgos siblings, cannot take cover under the protection the law accords to purchasers in good faith and for value. They cannot claim valid tit le to the property.
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