G.R. No. 116111 , January 21, 1999.
Republic of the Philippines (Represented by the Acting Commissioner of Land Registration), petitioner, vs. Court of Appeals, Spouses Catalino Santos and Thelma Barreto Santos, St. Jude’s Enterprises, Inc., Spouses Domingo Calaguian and Felicidad Calaguian, Virginia Dela Fuente and Lucy Madaya, respondents.

FACTS

St. Jude’s Enterprises, Inc. was the registered owner of a parcel of land in Caloocan City covered by TCT No. 22660 with an area of 40,623 square meters. In March 1966, it subdivided this lot under a subdivision plan (LRC) PSD-55643, which was approved by the Land Registration Commission (LRC). Upon subdivision, the original TCT was cancelled and new titles were issued. It was later found that the subdivision plan expanded the total area to 42,044 square meters, an increase of 1,421 square meters. St. Jude’s subsequently sold several lots from this subdivision to the other private respondents (Spouses Santos, Spouses Calaguian, Virginia Dela Fuente, and Lucy Madaya), who were issued their respective Transfer Certificates of Title. On January 29, 1985, the Republic, through the Solicitor General, filed an action seeking the annulment and cancellation of the said TCTs, principally on the ground that they were issued based on a null and void subdivision plan which unlawfully expanded the original area. The private respondents who answered claimed they were innocent purchasers for value and that their titles had become incontrovertible. The trial court dismissed the complaint, finding that the government presented no proof of fraud by St. Jude’s, that the LRC’s approval of the plan estopped the government from questioning it, and that the private buyers were in good faith. The Court of Appeals affirmed the trial court’s decision.

ISSUE

1. Whether the government is estopped from questioning the approved subdivision plan which expanded the areas covered by the transfer certificates of title in question.
2. Whether the Court of Appeals erred in its application of principles related to the Torrens system.

RULING

The petition is bereft of merit.
1. On estoppel against the government: The general rule is that the State cannot be put in estoppel by the mistakes or errors of its officials or agents. However, this rule admits of exceptions. The doctrine of estoppel may be invoked against the government when its agents acted within the scope of their authority, and when the application of estoppel would not thwart public policy. In this case, the Land Registration Commission, a government agency, approved the subdivision plan. The government’s inaction for about nineteen years from the approval of the plan and issuance of titles, while innocent third parties acquired rights in good faith and for value, warrants the application of estoppel. To allow the government to assail the titles after such a long period would cause great injustice and negate the stability intended by the Torrens system.
2. On the Torrens system: The Court of Appeals did not err. The Torrens system aims to guarantee the integrity of land titles and protect innocent purchasers for value. The titles issued to the private respondents, who purchased the lots in good faith and for value, have become indefeasible and incontrovertible. The government’s action, filed belatedly, would undermine the reliability of the Torrens system. The ruling of the lower courts to maintain the status quo and not disturb the boundaries of the properties is correct, as it preserves the stability of land ownership and prevents chaos. The government’s claim that it acted to preserve the integrity of the Torrens system is contradicted by its long delay and the resulting prejudice to innocent purchasers.