FIRST DIVISION

[G.R. No. 8936. October 2, 1915.]

CONSUELO LEGARDA, with her husband MAURO PRIETO,

plaintiffs-appellants, vs. N. M. SALEEBY, defendant-appellee.

Singson, Ledesma & Lim for appellants.

D. R. Williams for appellee.

SYLLABUS

1. REGISTRATION OF LAND; REGISTRATION OF SAME LAND IN THE

NAMES OF TWO DIFFERENT PERSONS. — L obtained a decree of registration
of a parcel of land on the 25th of October, 1906. S, on the 25th of March,
1912, obtained a certificate of registration for his land which joined the land
theretofore registered by L. The certificate of title issued to S included a
narrow strip of the land theretofore registered in the name of L. On the 13th
of December, 1912, L presented a petition in the Court of Land Registration
for the adjustment and correction of the error committed in the certificate
issued to S, which included said narrow strip of land. Held: That in a case
where two certificates of title include or cover the same land, the earlier in
date must prevail as between the original parties, whether the land
comprised in the latter certificate be wholly or only in part comprised in the
earlier certificate. In successive registrations where more than one
certificate is issued in respect of a particular interest in land, the person
holding under the prior certificate is entitled to the land as against the
person who obtained the second certificate. The decree of registration is
conclusive upon and against all persons.
2. ID.; PURPOSE OF THE TORRENS SYSTEM. — The real purpose of
the torrens system of land registration is to quiet title to land; to put a stop
forever to any question of the legality of the title, except claims which were
noted, at the time of registrations in the certificate, or which may arise
subsequent thereto. That being the purpose of the law, it would seem that
once the title was registered, the owner might rest secure, without the
necessity of waiting in the portals of the court, or sitting in the "mirador de
su casa," to avoid the possibility of losing his land. The proceeding for the
registration of land under the torrens system is a judicial proceeding, but it
involves more in its consequences than does an ordinary action.
3. ID; ID.; EFFECT OF REGISTRATION AND CERTIFICATE OF TITLE. —
The registration under the torrens system and the issuance of a certificate of
title do not give the owner any better title than he had. He does not obtain
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 title by virtue of the certificate. He secures his certificate by virtue of the
fact that he has a fee simple title. If he obtains a certificate of title, by
mistake, to more land than he really and in fact owns, the certificate should
be corrected. If he does not already have a perfect title, he can not secure
his certificate. Having a fee simple title, and presenting sufficient proof of
that fact, he is entitled to a certificate of registration. The certificate of
registration simply accumulates, in one document, a precise and correct
statement of the exact status of the fee simple title, which the owner, in fact,
has. The certificate, once issued, is the evidence of the title which the owner
has. The certificate should not be altered, changed, modified, enlarged or
diminished, except to correct errors, in some direct proceedings permitted
by law. The title represented by the certificate can not be changed, altered,
modified, enlarged or diminished in a collateral proceeding.

DECISION

JOHNSON, J : p

From the record the following facts appear:

First. That the plaintiffs and the defendant occupy, as owners, adjoining
lots in the district of Ermita in the city of Manila.
Second. That there exists and has existed for a number of years a
stone wall between the said lots. Said wall is located on the lot of the
plaintiffs.
Third. That the plaintiffs, on the 2d day of March, 1906, presented a
petition in the Court of Land Registration for the registration of their lot.
After a consideration of said petition the court, on the 25th day of October,
1906, decreed that the title of the plaintiffs should be registered and issued
to them the original certificate provided for under the torrens system. Said
registration and certificate included the wall.
Fourth. Later the predecessor of the defendant presented a petition in
the Court of Land Registration for the registration of the lot now occupied by
him. On the 25th day of March, 1912, the court decreed the registration of
said title and issued the original certificate provided for under the torrens
system. The description of the lot given in the petition of the defendant also
included said wall.
Fifth. Several months later (the 13th day of December, 1912) the
plaintiffs discovered that the wall which had been included in the certificate
granted to them had also been included in the certificate granted to the
defendant. They immediately presented a petition in the Court of Land
Registration for an adjustment and correction of the error committed by
including said wall in the registered title of each of said parties. The lower
court however, without notice to the defendant, denied said petition upon
the theory that, during the pendency of the petition for the registration of
the defendant's land, they failed to make any objection to the registration of
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 said lot, including the wall, in the name of the defendant.
Sixth. That the land occupied by the wall is registered in the name of
each of the owners of the adjoining lots. The wall is not a joint wall.
Under these facts, who is the owner of the wall and the land occupied
by it?
The decision of the lower court is based upon the theory that the
action for the registration of the lot of the defendant was a judicial
proceeding and that the judgment or decree was binding upon all parties
who did not appear and oppose it. In other words, by reason of the fact that
the plaintiffs had not opposed the registration of that part of the lot on which
the wall was situate they had lost it, even though it had been theretofore
registered in their name. Granting that theory to be the correct one, and
granting even that the wall and the land occupied by it, in fact, belonged to
the defendant and his predecessors, then the same theory should be applied
to the defendant himself. Applying that theory to him, he had already lost
whatever right he had therein, by permitting the plaintiffs to have the same
registered in their name, more than six years before. Having thus lost his
right, may he be permitted to regain it by simply including it in a petition for
registration? The plaintiffs having secured the registration of their lot,
including the wall, were they obliged to constantly be on the alert and to
watch all the proceedings in the land court to see that some one else was
not having all, or a portion of the same, registered? If that question is to be
answered in the affirmative, then the whole scheme and purpose of the
torrens system of land registration must fail. The real purpose of that system
is to quiet title to land; to put a stop forever to any question of the legality of
the title, except claims which were noted at the time of registration, in the
certificate, or which may arise subsequent thereto. That being the purpose
of the law, it would seem that once a title is registered the owner may rest
secure, without the necessity of waiting in the portals of the court, or sitting
in the "mirador de su casa," to avoid the possibility of losing his land. Of
course, it can not be denied that the proceeding for the registration of land
under the torrens system is judicial (Escueta vs. Director of Lands, 16 Phil.
Rep., 482). It is clothed with all the forms of an action and the result is final
and binding upon all the world. It is an action in rem. (Escueta vs. Director of
Lands (supra); Grey Alba vs. De la Cruz, 17 Phil. Rep., 49; Roxas vs. Enriquez,
29 Phil. Rep., 31; Tyler vs. Judges, 175 Mass., 71; American Land Co. vs.
Zeiss, 219 U. S., 47.)
While the proceeding is judicial, it involves more in its consequences
than does an ordinary action. All the world are parties, including the
government. After the registration is complete and final and there exists no
fraud, there are no innocent third parties who may claim an interest The
rights of all the world are foreclosed by the decree of registration. The
government itself assumes the burden of giving notice to all parties. To
permit persons who are parties in the registration proceeding (and they are
all the world) to again litigate the same questions, and to again cast doubt
upon the validity of the registered title, would destroy the very purpose and
intent of the law. The registration, under the torrens system, does not give
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 the owner any better title than he had. If he does not already have a perfect
title, he can not have it registered. Fee simple titles only may be registered.
The certificate of registration accumulates in one document a precise and
correct statement of the exact status of the fee held by its owner. The
certificate, in the absence of fraud, is the evidence of title and shows exactly
the real interest of its owner. The title once registered, with very few
exceptions, should not thereafter be impugned, altered, changed, modified,
enlarged, or diminished, except in some direct proceeding permitted by law.
Otherwise all security in registered titles would be lost. A registered title can
not be altered, modified, enlarged, or diminished in a collateral proceeding
and not even by a direct proceeding, after the lapse of the period prescribed
by law.
For the difficulty involved in the present case the Act (No. 496)
providing for the registration of titles under the torrens system affords us no
remedy. There is no provision in said Act giving the parties relief under
conditions like the present. There is nothing in the Act which indicates who
should be the owner of land which has been registered in the name of two
different persons.
The rule, we think, is well settled that the decree ordering the
registration of a particular parcel of land is a bar to future litigation over the
same between the same parties. In view of the fact that all the world are
parties, it must follow that future litigation over the title is forever barred;
there can be no Persons who are not parties to the action. This, we think, is
the rule, except as to rights which are noted in the certificate or which arise
subsequently, and with certain other exceptions which need not be
discussed at present. A title once registered can not be defeated, even by an
adverse, open, and notorious possession. Registered title under the torrens
system can not be defeated by prescription (section 46, Act No. 496). The
title, once registered, is notice to the world. All persons must take notice. No
one can plead ignorance of the registration.

The question, who is the owner of land registered in the name of two
different persons, has been presented to the courts in other jurisdictions. In
some jurisdictions, where the "torrens" system has been adopted, the
difficulty has been settled by express statutory provision. In others it has
been settled by the courts. Hogg, in his excellent discussion of the
"Australian Torrens System," at page 823, says: "The general rule is that in
the case of two certificates of title, purporting to include the same land, the
earlier in date prevails, whether the land comprised in the latter certificate
be wholly, or only in part, comprised in the earlier certificate. (Oelkers vs.
Merry, 2 Q. S. C. R., 193; Miller vs. Davy, 7 N. Z. R., 155; Lloyd vs. May-field,
7 A. L. T. (V.) 48; Stevens vs. Williams, 12 V. L. R., 152; Register of Titles vs.
Esperance Land Co., 1 W. A. R., 118.)" Hogg adds however that, "if it can be
clearly ascertained by the ordinary rules of construction relating to written
documents, that the inclusion of the land in the certificate of title of prior
date is a mistake, the mistake may be rectified by holding the latter of the
two certificates of title to be conclusive." (See Hogg on the "Australian
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 Torrens System," supra, and cases cited. See also the excellent work of
Niblack in his "Analysis of the Torrens System," page 99.) Niblack, in
discussing the general question, said: "Where two certificates purport to
include the same land the earlier in date prevails . . . In successive
registrations, where more than one certificate is issued in respect of a
particular estate or interest in land, the person claiming under the prior
certificate is entitled to the estate or interest; and that person is deemed to
hold under the prior certificate who is the holder of, or whose claim is
derived directly or indirectly from the person who was the holder of the
earliest certificate issued in respect thereof. While the acts in this country do
not expressly cover the case of the issue of two certificates for the same
land, they provide that a registered owner shall hold the title, and the effect
of this undoubtedly is that where two certificates purport to include the same
registered land, the holder of the earlier one continues to hold the title" (p.
237).
Section 38 of Act No. 496, provides that; "It (the decree of registration)
shall be conclusive upon and against all persons, including the Insular
Government and all the branches thereof, whether mentioned by name in
the application, notice, or citation, or included in the general description 'To
all whom it may concern.' Such decree shall not be opened by reason of the
absence, infancy, or other disability of any person affected thereby, nor by
any proceeding in any court for reversing judgments or decrees; subject,
however, to the right of any person deprived of land or of any estate or
interest therein by decree of registration obtained by fraud to file in the
Court of Land Registration a petition for review within one year after entry of
the decree (of registration), provided no innocent purchaser for value has
acquired an interest."
It will be noted, from said section, that the "decree of registration"
shall not be opened, for any reason, in any court, except for fraud, and not
even for fraud, after the lapse of one year. If then the decree of registration
can not be opened for any reason, except for fraud, in a direct proceeding
for that purpose, may such decree be opened or set aside in a collateral
proceeding by including a portion of the land in a subsequent certificate or
decree of registration? We do not believe the law contemplated that a
person could be deprived of his registered title in that way.
We have in this jurisdiction a general statutory provision which governs
the right of the ownership of land when the same is registered in the
ordinary registry in the name of two different persons. Article 1473 of the
Civil Code provides, among other things, that when one piece of real
property has been sold to two different persons it shall belong to the person
acquiring it, who first inscribes it in the registry. This rule, of course,
presupposes that each of the vendees or purchasers has acquired title to the
land. The real ownership in such a case depends upon priority of registration.
While we do not now decide that the general provisions of the Civil Code are
applicable to the Land Registration Act, even though we see no objection
thereto, yet we think, in the absence of other express provisions, they
should have a persuasive influence in adopting a rule for governing the
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 effect of a double registration under said Act. Adopting the rule which we
believe to be more in consonance with the purposes and the real intent of
the torrens system, we are of the opinion and so decree that in case land has
been registered under the Land Registration Act in the name of two different
persons, the earlier in date shall prevail.
In reaching the above conclusion, we have not overlooked the forceful
argument of the appellee. He says, among other things; "When Prieto et al.
were served with notice of the application of Teus (the predecessor of the
defendant) they became defendants in a proceeding wherein he, Teus, was
seeking to foreclose their right, and that of others, to the parcel of land
described in his application. Through their failure to appear and contest his
right thereto, and the subsequent entry of a default judgment against them,
they became irrevocably bound by the decree adjudicating such land to
Teus. They had their day in court and cannot set up their own omission as
ground for impugning the validity of a judgment duly entered by a court of
competent jurisdiction. To decide otherwise would be to hold that lands with
torrens titles are above the law and beyond the jurisdiction of the courts."
As was said above, the primary and fundamental purpose of the
torrens system is to quiet title. If the holder of a certificate cannot rest
secure in his registered title then the purpose of the law is defeated. If those
dealing with registered land cannot rely upon the certificate, then nothing
has been gained by the registration and the expense incurred thereby has
been in vain. If the holder may lose a strip of his registered land by the
method adopted in the present case, he may lose it all. Suppose within the
six years which elapsed after the plaintiff had secured their title they had
mortgaged or sold their right, what would be the position or right of the
mortgagee or vendee? That mistakes are bound to occur cannot be denied,
and sometimes the damage done thereby is irreparable. It is the duty of the
courts to adjust the rights of the parties under such circumstances so as to
minimize such damages, taking into consideration all of the conditions and
the diligence of the respective parties to avoid them. In the present case, the
appellee was first negligent (granting that he was the real owner, and if he
was not the real owner he can not complain) in not opposing the registration
in the name of the appellants. He was a party-defendant in an action for the
registration of the lot in question, in the name of the appellants, in 1906.
"Through his failure to appear and to oppose such registration, and the
subsequent entry of a default judgment against him, he became irrevocably
bound by the decree adjudicating such land to the appellants. He had his day
in court and should not be permitted to setup his own omissions as the
ground for impugning the validity of a judgment duly entered by a court of
competent jurisdiction." Granting that he was the owner of the land upon
which the wall is located, his failure to Oppose the registration of the same in
the name of the appellants, in the absence of fraud, forever closes his mouth
against impugning the validity of that judgment. There is no more reason
why the doctrine invoked by the appellee should be applied to the appellants
than to him.
We have decided, in case of double registration under the Land
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 Registration Act. that the owner of the earliest certificate is the owner of the
land. That is the rule between original parties. May this rule be applied to
successive vendees of the owners of such certificates? Suppose that one or
the other of the parties, before the error is discovered, transfers his original
certificate to an "innocent purchaser. "The general rule is that the vendee of
land has no greater right, title, or interest than his vendor; that he acquires
the right which his vendor had, only. Under that rule the vendee of the
earlier certificate would be the owner as against the vendee of the owner of
the later certificate.
We find statutory provisions which, upon first reading, seem to cast
some doubt upon the rule that the vendee acquires the interest of the
vendor only. Sections 38, 55, and 112 of Act No. 496 indicate that the
vendee may acquire rights and be protected against defenses which the
vendor would not. Said sections speak of available rights in favor of third
parties which are cut off by virtue of the sale of the land to an "innocent
purchaser." That is to say, persons who had had a right or interest in land
wrongfully included in an original certificate would be unable to enforce such
rights against an "innocent purchaser," by virtue of the provisions of said
sections. In the present case Teus had his land, including the wall, registered
in his name. He subsequently sold the same to the appellee. Is the appellee
an "innocent purchaser," as that phrase is used in said sections? May those
who have been deprived of their land by reason of a mistake in the original
certificate in favor of Teus be deprived of their right to the same, by virtue of
the sale by him to the appellee? Suppose the appellants had sold their lot,
including the wall, to an "innocent purchaser," would such purchaser be
included in the phrase "innocent purchaser," as the same is used in said
sections? Under these examples there would be two innocent purchasers of
the same land, if said sections are to be applied. Which of the two innocent
purchasers, if they are both to be regarded as innocent purchasers, should
be protected under the provisions of said sections ? These questions indicate
the difficulty with which we are met in giving meaning and effect to the
phrase "innocent purchaser," in said sections.

May the purchaser of land which has been included in a "second

original certificate" ever be regarded as an "innocent purchaser," as against
the rights or interest of the owner of the first original certificate, his heirs,
assigns, or vendee? The first original certificate is recorded in the public
registry. It is never issued until it is recorded. The record is notice to all the
world. All persons are charged with the knowledge of what it contains. All
persons dealing with the land so recorded, or any portion of it, must be
charged with notice of whatever it contains. The purchaser is charged with
notice of every fact shown by the record and is presumed to know every fact
which the record discloses. This rule is so well established that it is scarcely
necessary to cite authorities in its support (Northwestern National Bank vs.
Freeman, 171 U. S., 620, 629; Delvinon Real Estate, sections 710, 710 [a]).
When a conveyance has been properly recorded such record is
constructive notice of its contents and all interests, legal and equitable,
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 included therein. (Grandin vs. Anderson, 15 Ohio State, 286, 289; Orvis vs.
Newell, 17 Conn., 97; Buchanan vs. International Bank, 78 Ill., 500; Youngs
vs. Wilson, 27 N. Y., 351; McCabe vs. Grey, 20 Cal., 509; Montefiore vs.
Browne, 7 House of Lords Cases, 341.)
Under the rule of notice, it is presumed that the purchaser has
examined every instrument of record affecting the title. Such presumption is
irrebutable. He is charged with notice of every fact shown by the record and
is presumed to know every fact which an examination of the record would
have disclosed. This presumption cannot be overcome by proof of innocence
or good faith. Otherwise the very purpose and object of the law requiring a
record would be destroyed. Such presumption cannot be defeated by proof
of want of knowledge of what the record contains anymore than one may be
permitted to show that he was ignorant of the provisions of the law. The rule
that all persons must take notice of the facts which the public record
contains is a rule of law. The rule must be absolute. Any variation would lead
to endless confusion and useless litigation.
While there is no statutory provision in force here requiring that
original deeds of conveyance of real property be recorded, yet there is a rule
requiring mortgages to be recorded. (Arts. 1875 and 606 of the Civil Code.)
The record of a mortgage is indispensable to its validity. (Art. 1875.) In the
face of that statute would the courts allow a mortgage to be valid which had
not been recorded, upon the plea of ignorance of the statutory provision,
when third parties were interested? May a purchaser of land, subsequent to
the recorded mortgage, plead ignorance of its existence, and by reason of
such ignorance have the land released from such lien? Could a purchaser of
land, after the recorded mortgage, be relieved from the mortgage lien by the
plea that he was a bona fide purchaser? May there be a bona fide purchaser
of said land, bona fide in the sense that he had no knowledge of the
existence of the mortgage ? We believe the rule that all persons must take
notice of what the public record contains is just as obligatory upon all
persons as the rule that all men must know the law; that no one can plead
ignorance of the law. The fact that all men know the law is contrary to the
presumption. The conduct of men, at times, shows clearly that they do not
know the law. The rule, however, is mandatory and obligatory,
notwithstanding. It would be just as logical to allow the plea of ignorance of
the law affecting a contract as to allow the defense of ignorance of the
existence and contents of a public record.
In view, therefore, of the foregoing rules of law, may the purchaser of
land from the owner of the second original certificate be an "innocent
purchaser," when a part or all of such land had theretofore been registered
in the name of another, not the vendor? We are of the opinion that said
sections 38, 55, and 112 should not be applied to such purchasers. We do
not believe that the Phrase "innocent purchasers should be applied to such a
purchaser. He cannot be regarded as an "innocent purchaser" because of
the facts contained in the record of the first original certificate. The rule
should not be applied to the purchaser of a parcel of land the vendor of
which is not the owner of the original certificate, or his successors. He, in no
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 sense, can be an "innocent purchaser" of the portion of the land included in
another earlier original certificate. The rule of notice of what the record
contains precludes the idea of innocence. By reason of the prior registry
there cannot be an innocent purchaser of land included in a prior original
certificate and in a name other than that of the vendor, or his successors. In
order to minimize the difficulties we think this is the safer rule to establish.
We believe the phrase "innocent purchaser," used in said sections, should be
limited only to cases where unregistered land has been wrongfully included
in a certificate under the torrens system. When land is once brought under
the torrens system, the record of the original certificate and all subsequent
transfers thereof is notice to all the world. That being the rule, could Teus
even be regarded as the holder in good faith of that part of the land included
in his certificate which had theretofore been included in the original
certificate of the appellants? We think not. Suppose, for example, that Teus
had never had his lot registered under the torrens system. Suppose he had
sold his lot to the appellee and had included in his deed of transfer the very
strip of land now in question. Could his vendee be regarded as an "innocent
purchaser" of said strip ? Would his vendee be an "innocent purchaser" of
said strip? Certainly not. The record of the original certificate of the
appellants precludes the possibility. Has the appellee gained any right by
reason of the registration of the strip of land in the name of his vendor?
Applying the rule of notice resulting from the record of the title of the
appellants, the question must be answered in the negative. We are of the
opinion that these rules are more in harmony with the purpose of Act No.
496 than the rule contended for by the appellee. We believe that the
purchaser from the owner of the later certificate, and his successors. should
be required to resort to his vendor for damages, in case of a mistake like the
present, rather than to molest the holder of the first certificate who has been
guilty of no negligence. The holder of the first original certificate and his
successors should be permitted to rest secure in their title, against one who
had acquired rights in conflict therewith and who had full and complete
knowledge of their rights. The purchaser of land included in the second
original certificate, by reason of the facts contained in the public record and
the knowledge with which he is charged and by reason of his negligence,
should suffer the loss, if any, resulting from such purchase, rather than he
who has obtained the first certificate and who was innocent of any act of
negligence.
The foregoing decision does not solve, nor pretend to solve, all the
difficulties resulting from double registration under the torrens system and
the subsequent transfer of the land. Neither do we now attempt to decide
the effect of the former registration in the ordinary registry upon the
registration under the torrens system. We are inclined to the view, without
deciding it, that the record under the torrens system must, by the very
nature and purposes of that system, supersede all other registries. If that
view is correct then it will be sufficient, in dealing with land registered and
recorded under the torrens system, to examine that record alone. Once land
is registered and recorded under the torrens system, that record alone can
be examined for the purpose of ascertaining the real status of the title to the
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 land.
It would seem to be a just and equitable rule, when two persons have
acquired equal rights in the same thing, to hold that the one who acquired it
first and who has complied with all the requirements of the law should be
protected.
In view of our conclusions, above stated, the judgment of the lower
court should be and is hereby revoked. The record is hereby returned to the
court now having and exercising the jurisdiction heretofore exercised by the
land court, with direction to make such orders and decrees in the premises
as may correct the error heretofore made in including the land in question in
the second original certificate issued in favor of the predecessor of the
appellee, as well as in all other duplicate certificates issued.
Without any finding as to costs, it is so ordered.
Arellano, C.J. Torres and Araullo, JJ., concur.

Separate Opinions
CARSON J., with whom concurs TRENT, J., dissenting:

I dissent.
In cases of double or overlapping registration, I am inclined to agree
with the reasoning and authority on which it is held in the majority opinion
(first) that the original holder of the prior certificate is entitled to the land as
against the original holder of the later certificate, where there has been no
transfer of title by either party to an innocent purchaser; both, as is shown in
the majority opinion, being at fault in permitting the double registration to
take place; (second) that an innocent purchaser claiming under the prior
certificate is entitled to the land as against the original holder of the later
certificate, and also as against innocent purchasers from the holder of the
later certificate; the innocent purchaser being in no wise at fault in
connection with the issuance of the later certificate.
But I am of opinion that neither the authorities cited, nor the reasoning
of the majority opinion sustains the proposition that the original holder of the
prior certificate is entitled to the land as against an innocent purchaser from
the holder of the later certificate.

As to the text-book authorities cited in the majority opinion, it is

sufficient to say that the rules laid down by both Hogg and Niblack are mere
general rules, admittedly subject to exception, and of course of no binding
force or authority where the reasoning upon which these rules are based is
inapplicable to the facts developed in a particular case.
In its last analysis the general rule laid down in the majority opinion
rests upon the proposition set forth in the last page of the opinion wherein it
is said that "it would seem to be a just and equitable rule, when two persons
have acquired equal rights in the same thing, to hold that the one who
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 acquired it first and who has complied with all the requirements of the law
should be protected." The rule, as applied to the matter in hand, may be
stated as follows: It would seem to be a just and equitable rule when two
persons have acquired separate and independent registered titles to the
same land, under the Land Registration Act, to hold that the one who first
acquired registered title and who has complied with all the requirements of
the law in that regard should be protected, in the absence of any express
statutory provision to the contrary.
Thus stated I have no quarrel with the doctrine as a statement of the
general rule to be applied in cases of double or overlapping registration
under the Land Registration Act; for it is true as stated in the majority
opinion that in the adjudication and registration of titles by the Courts of
Land Registration "mistakes are bound to occur, and sometimes the damage
done thereby is irreparable;" and that in the absence of statutory provisions
covering such cases, "it is the duty of the courts to adjust the rights of the
parties, under such circumstances, so as to minimize such damages, taking
into consideration all of the conditions, and the diligence of the respective
parties to avoid them."
But like most such general rules, it has its exceptions and should not
be applied in a case wherein the reasons on which it is based do not exist, or
in cases wherein still more forceful reasons demand the application of a
contrary rule.
The general rule relied upon in the majority opinion is a mere
application of a well settled equity rule that: "Where conflicting equities are
otherwise equal in merit, that which first accrued will be given the
preference." But it is universally laid down by all the courts which have had
occasion to apply this equity rule that "it should be the last test resorted to,"
and that "it never prevails when any other equitable ground for preference
exists." (See 19 Cent. Dig., tit. Equity, par. 181; and many cases cited in 16
Cyc., 139. note 57.) It follows that the general rules, that in cases of double
or overlapping registration the earlier certificate should be protected, ought
not to prevail so as to, deprive an innocent purchaser under the later
certificate of his title in any case wherein the fraud or negligence of the
holder of the earlier certificate contributed to the issuance of the later
certificate. Hence the holder of the earlier certificate of title should not be
heard to invoke the " just and equitable rule" as laid down in the majority
opinion, in order to have his own title protected and the title of an innocent
holder of a later certificate cancelled or annulled, in any case wherein it
appears that the holder of the later certificate was wholly without fault, while
the holder of the earlier certificate was wholly or largely to blame for the
issuance of the later certificate, in that he might have prevented its issuance
by merely entering his appearance in court in response to lawful summons
personally served upon him in the course of the proceedings for the issuance
of the second certificate, and pleading his superior rights under the earlier
certificate, instead of keeping silent and by his silence permitting a default
judgment to be entered against him adjudicating title in favor of the second
applicant.
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 The majority opinion clearly recognizes the soundness of the principles
I am contending for by the reasoning (with which I am inclined to agree)
whereby it undertakes to demonstrate that as between the original holders
of the double or overlapping registration the general rule should prevail,
because both such original parties must be held to have been at fault and,
their equities being equal, preference should be given to the earlier title.
The majority opinion further recognizes the soundness of my
contention by the reasoning whereby it undertakes to sustain the application
of the general rule in favor of the original holder of the earlier certificate
against purchasers from the original holder of the later certificate, by an
attempt to demonstrate that such purchasers can in no event be held to be
innocent purchasers: because, as it is said, negligence may and should
always be imputed to such a purchaser, so that in no event can he claim to
be without fault when it appears that the lands purchased by him from the
holder of a duly registered certificate of title are included within the bounds
of the lands described in a certificate of title of an earlier date.
At considerable length the majority opinion (in reliance upon the
general rule laid down under the various systems of land registration, other
than those based on the torrens system) insists that a purchaser of land duly
registered in the Land Registration Court, is charged with notice of the
contents of each and every one of the thousands and tens of thousands of
certificates of registry on file in the land registry office, so that negligence
may be imputed to him if he does not ascertain that all or any part of the
land purchased by him is included within the boundary lines of anyone of the
thousands or tens of thousands of tracts of land whose original registry
bears an earlier date than the date of the original registry of the land
purchased by him. It is contended that he cannot claim to be without fault
should he buy such land because, as it is said, it was possible for him to
discover that the land purchased by him had been made the subject of
double or overlapping registration by a comparison of the description and
boundary lines of the thousands of tracts and parcels of land to be found in
the land registry office.
But such a ruling goes far to defeat one of the principal objects sought
to be attained by the introduction and adoption of the so called torrens
system for the registration of land. The avowed intent of that system of land
registration is to relieve the purchaser of registered lands from the necessity
of looking farther than the certificate of title of the vendor in order that he
may rest secure as to the validity of the title to the lands conveyed to him.
And yet it is said in the majority opinion that he is charged with notice of the
contents of every other certificate of title in the office of the registrar so that
his failure to acquaint himself with its contents may be imputed to him as
negligence.
If the rule announced in the majority opinion is to prevail, the new
system of land registration, instead of making transfers of real estate simple,
expenditious and secure, and instead of avoiding the necessity for expensive
and ofttimes uncertain searches of the land records and registries, in order
to ascertain the true condition of the title before purchase, will, in many
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 instances, add to the labor, expense and uncertainty of any attempt by a
purchaser to satisfy himself as to the validity of the title to lands purchased
by him.
As I have said before, one of the principal objects, if not the principal
object, of the torrens system of land registration upon which our Land
Registration Act is avowedly modelled is to facilitate the transfer of real
estate. To that end the Legislature undertakes to relieve prospective
purchasers and all others dealing in registered lands from the necessity of
looking farther than the certificate of title to such lands furnished by the
Court of Land Registration, and I cannot, therefore, give my consent to a
ruling which charges a purchaser or mortgagee of registered lands with
notice of the contents of every other certificate of title in the land registry,
so that negligence and fault may be imputed to him should he be exposed to
loss or damages as a result of the lack of such knowledge.
Suppose a prospective purchaser of lands registered under the Land
Registration Act desires to avoid the imputation of negligence in the event
that, unknown to him, such lands have been made the subject of double or
overlapping registration, what course should he pursue ? What measures
should he adopt in order to search out the information with notice of which
he is charged? There are no indexes to guide him nor is there anything in the
record or the certificate of title of the land he proposes to buy which
necessarily or even with reasonable probability will furnish him a clue as to
the fact of the existence of such double or overlapping registration. Indeed
the only course open to him, if he desires to assure himself against the
possibility of double or overlapping registration, would seem to be a careful
laborious and extensive comparison of the registered boundary lines
contained in the certificate of title of the tract of land he proposes to buy
with those contained in all the earlier certificates of title to be found in the
land registry. Assuredly it was never the intention of the author of the new
Land Registration Act to impose such a burden on a purchaser of duly
registered real estate, under penalty that a lack of the knowledge which
might thus be acquired maybe imputed to him by this court as negligence in
ruling upon the respective equities of the holders of lands which have been
the subject of double or overlapping registration.
On the other hand, I think that negligence and fault may fairly be
imputed to a holder of a registered certificate of title who stood supinely by
and let a default judgment be entered against him, adjudicating all or any
part of his registered lands to another applicant, if it appears that he was
served with notice or had actual notice of the pendency of the proceedings
in the Court of Land Registration wherein such default judgment was
entered.

The owner of land who enjoys the benefits secured to him by its
registry in the Court of Land Registration may reasonably be required to
appear and defend his title when he has actual notice that proceedings are
pending in that court wherein another applicant, claiming the land as his
own, is seeking to secure its registry in his name. All that is necessary for
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 him to do is to enter his appearance in those proceedings, invite the court's
attention to the certificate of title registered in his name, and thus, at the
cost of the applicant, avoid all the damage and inconvenience flowing from
the double or overlapping registration of the land in question. There is
nothing in the new system of land registration which seems to render it
either expedient or necessary to relieve a holder of a registered title of the
duty of appearing and defending that title, when he has actual notice that it
is being attacked in a court of competent jurisdiction, and if, as a result of
his neglect or failure so to do, his lands become subject to double or
overlapping registration, he should not be permitted to subject an innocent
purchaser, holding under the later certificate to all the loss and damage
resulting from the double or overlapping registration, while he goes scot free
and holds the land under a manifest misapplication of the equitable rule that
"where conflicting equities are otherwise equal in merit, that which first
accrued will be given the preference." It is only where both or neither of the
parties are at fault that the rule is properly applicable as between opposing
claimants under an earlier and a later certificate of registry to the same land.
Of course all that is said in the briefs of counsel and the majority
opinion as to the right of the holder of a certificate to rest secure in his
registered title so that those dealing with registered lands can confidently
rely upon registry certificates thereto is equally forceful by way of argument
in favor of the holder of one or the other certificate in case of double or
overlapping registration. The problem is to determine which of the certificate
holders is entitled to the land. The decision of that question in favor of either
one must necessarily have the effect of destroying the value of the
registered title of the other and to that extent shaking the public confidence
in the value of the whole system for the registration of lands. But, in the
language of the majority opinion, "that mistakes are bound to occur cannot
be denied and sometimes the damage done thereby is irreparable. It is the
duty of the courts to adjust the rights of the parties under such
circumstances so as to minimize the damages, taking into consideration all
the conditions and the diligence of the respective parties to avoid them."
It will be observed that I limit the exception to the general equitable
rule, as laid down in the majority opinion, to cases wherein the holder of the
earlier certificate of title has actual notice of the pendency of the
proceedings in the course of which the later certificate of title was issued, or
to cases in which he has received personal notice of the pendency of those
proceedings. Unless he has actual notice of the pendency of such
proceedings I readily agree with the reasoning of the majority opinion so far
as it holds that negligence, culpable negligence, should not be imputed to
him for failure to appear and defend his title so as to defeat his right to the
benefit of the equitable rule. It is true that the order of publication in such
cases having been duly complied with, all the world is charged with notice
thereof, but it does not necessarily follow that, in the absence of actual
notice, culpable negligence in permitting a default judgment to be entered
against him may be imputed to the holder of the earlier certificate so as to
defeat his right to the land under the equitable rule favoring the earlier
certificate. Such a holding would have the effect (to quote the language of
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 the majority opinion) of requiring the holder of a certificate of title to wait
indefinitely "in the portals of the court" and to sit in the "mirador de su casa"
in order to avoid the possibility of losing his lands; and I agree with the writer
of the majority opinion that to do so would place an unreasonable burden on
the holders of such certificate, which was not contemplated by the authors
of the Land Registration Act. But no unreasonable burden is placed upon the
holder of a registered title by a rule which imputes culpable negligence to
him when he sits supinely by and lets a judgment in default be entered
against him adjudicating title to his lands in favor of another applicant,
despite the fact that he has actual knowledge of the pendency of the
proceedings in which such judgment is entered and despite the fact that he
has been personally served with summons to appear and default his title.
"Taking into consideration all of the conditions and the diligence
of the respective parties," it seems to me that there is no "equality in
merit" between the conflicting equities set up by an innocent
purchaser who acquires title to the land under a registered certificate,
and the holder of an earlier certificate who permitted a default
judgment to be entered against him, despite actual notice of the
pendency of the proceedings in the course of which the later certificate
was issued.
I am convinced, furthermore, that aside from the superior equities of
the innocent purchaser in cases such as that now under discussion, there are
strong reasons of convenience and public policy which militate in favor of the
recognition of his title rather than that of the holder of the earlier title.
One ruling exposes all persons purchasing or dealing in registered
lands to unknown, unspecified and uncertain dangers, to guard against
which all such persons will be put to additional cost, annoyance and labor on
every occasion when any transaction is had with regard to such lands; while
the other ruling tends to eliminate consequences so directly adverse to the
purpose and object for which the land registration law was enacted, and
imposes no burden upon any holder of a certificate of registered lands other
than that of defending his title on those rare, definite and specific occasions
wherein he has actual notice that his title is being challenged in a Court of
Land Registration, a proceeding in which the cost and expense is reduced to
the minimum by the conclusive character of his certificate of title in support
of his claim of ownership. Furthermore, judgment against the innocent
purchaser and in favor of the holder of the earlier certificate in a case such
as that under consideration must inevitably tend to increase the danger of
double or overlapping registrations by encouraging holders of registered
titles, negligently or fraudulently and collusively, to permit default judgments
to be entered against them adjudicating title to all or a part of their
registered lands in favor of other applicants, despite actual notice of the
pendency of judicial proceedings had for that purpose, and this, without
adding in any appreciable degree to the security of their titles, and merely to
save them the very slight trouble or inconvenience incident to an entry of
appearance in the court in which their own titles were secured, and inviting
attention to the fact that their right, title and ownership in the lands in
question has already been conclusively adjudicated.
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 The cases wherein there is a practical possibility of double or
overlapping registration without actual notice to the holder of the earlier
certificate must in the very nature of things be so rare as to be practically
negligible. Double or overlapping registration almost invariably occurs in
relation to lands held by adjoining occupants or claimants. It is difficult to
conceive of a case wherein double registration can take place, in the
absence of fraud, without personal service of notice of the pendency of the
proceedings upon the holder of the earlier certificate, the statute requiring
such notice to be served upon the owner or occupant of all lands adjoining
those for which application for registration is made; and the cases wherein
an adjoining land owner can, even by the use of fraud, conduct proceedings
for the registration of his land to a successful conclusion without actual
notice to the adjoining property owners must be rare indeed.
In the case at bar the defendant purchased the land in question from
the original holder of a certificate of title issued by the Court of Land
Registration, relying upon the records of the Court of Land Registration with
reference thereto and with no knowledge that any part of the land thus
purchased was included in an earlier certificate of title issued to plaintiff.
The plaintiff, the holder of the earlier certificate of title, negligently
permitted a default judgment to be entered against him in the Court of Land
Registration, adjudicating part of the lands included in his own certificate of
title in favor of another applicant, from whom the defendant in this action
acquired title, and this despite the fact that he was an adjoining land owner,
had actual notice of the pendency of the proceedings and was personally
served with summons to appear and defend his rights in the premises. It
seems to me that there can be no reason for doubt as to the respective
merits of the equities of the parties, and further that the judgment of the
majority in favor of the plaintiff will inevitably tend to increase the number of
cases wherein registered land owners in the future will fail to appear and
defend their titles when challenged in other proceedings in the Courts of
Land Registration, thereby enormously increasing the possibility and
probability of loss and damage to innocent third parties and dealers in
registered lands generally, arising out of erroneous, double or overlapping
registration of lands by the Courts of Land Registration.

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