G.R. No. L-17573. June 30, 1962. C. N. HODGES, petitioner, vs. CITY OF ILOILO, ET AL., respondents.
FACTS

The City of Iloilo (then a municipality) acquired portions of private lots prior to October 1911 to widen its streets. However, during the cadastral survey of 1911-1912, these portions were erroneously surveyed and registered in the names of the original private owners, Walter Smith and Federico Ortiz, instead of the municipality. These lots, designated as Lots Nos. 820, 821-A, and 924, were subsequently included in conveyances to subsequent purchasers. Petitioner C.N. Hodges became the registered owner in 1935/1936, holding Transfer Certificates of Title. From 1945 to 1949, Hodges paid real estate taxes on these lots and made repeated demands upon the City, first for payment of their purchase price and later for their delivery, all of which were ignored. Hodges filed an action to recover possession and damages.

ISSUE

Whether the petitioner, as a registered owner under the Torrens system, can recover possession of the lots which form part of public streets.

RULING

No. The Supreme Court affirmed the dismissal of the complaint, ruling that the petitioner cannot recover possession. The legal logic is anchored on the nature of the property and the limitations of Torrens title. The lots in question were already dedicated as public streets prior to their erroneous registration. Properties for public use, such as streets and plazas, are outside the commerce of man (extra commercium) and cannot be appropriated by private persons. Consequently, their registration in the name of a private individual is void and produces no legal effect. This principle is an established exception under Section 39 of the Land Registration Act ( Act No. 496 ), which provides that the force of a certificate of title does not extend to roads and highways.
The Court rejected the petitioner’s arguments on prescription, laches, and estoppel. Since the property is inherently inalienable public dominion, the defenses of acquisitive prescription and laches do not apply against the state. The City’s act of collecting taxes from Hodges did not create an estoppel, as the State cannot be estopped by the errors of its agents when dealing with property dedicated to public use. Furthermore, equity militates against the petitioner, who purchased the properties long after they had become integral parts of public streets and should have been aware of their character. Therefore, the registered title conferred no ownership right over the street portions, and the petitioner has no cause of action for recovery.