Case Summary (G.R. No. L-51065-72)
Facts and Procedural History
In May 1963, Dra. Rafaela V. Trias petitioned the court of first instance in Rizal to cancel a restrictive annotation on her Torrens title which prohibited the erection of factories on her property. Trias argued that the restriction was illegal, impaired her ownership rights, and was redundant due to existing zoning ordinances. The court granted the petition, cancelling the annotation. Gregorio Araneta, Inc. moved for reconsideration citing contractual origin of the restriction, lack of notice, validity of the prohibition, and jurisdictional issues, but the court denied the motion. The case was elevated to the Supreme Court on appeal.
Legal Issues
- The validity of the restrictive annotation prohibiting the erection of factories on the lot.
- The effect of local zoning ordinances that similarly prohibit factories in the area.
Additional issues regarding notice to the respondent and jurisdiction were raised but not addressed by the Supreme Court due to the resolution of the primary issues.
Nature and Lawfulness of the Restrictive Annotation
The restriction, appearing on the Torrens title, was characterized as an easement imposed by the original owner (J. M. Tuason & Co., Inc. through Gregorio Araneta, Inc.) to maintain the area as residential by prohibiting factory establishments. This contractual encumbrance was binding on subsequent purchasers and annotated on all subsequent certificates of title.
Under Article 688 of the New Civil Code, an owner may establish easements on their land provided they do not contravene law, public policy, or order. The Court found no applicable law invalidating such restrictions and emphasized the reasonableness of the prohibition in preserving neighborhood character and assuring tranquility. Jurisprudence and legal doctrine generally support the validity of reasonable building and use restrictions voluntarily accepted by purchasers.
Impact of Zoning Ordinances on the Restriction
The existence of a local zoning ordinance prohibiting factories was deemed immaterial in this context. Zoning ordinances can be repealed or amended, potentially lifting the restriction, but the contractual easement remains binding unless removed from the title. The easement provides certainty to purchasers and protects the community atmosphere distinct from zoning, which is subject to change by local governments. The Court highlighted that erasing the annotation would mislead future buyers into believing the land was free of such encumbrances, thereby potentially enabling factory construction contrary to the original contractual agreement.
Legal Effects of Annotation Cancellation
Canceling the restrictive annotation would violate the principle under Section 39 of Act 496 (the Torrens system law), which protects purchasers from undisclosed encumbrances by requiring all existing encumbrances to be noted on the certificate of title. The annotation serves as notice and guarantee of the restriction’s existence. Removing it would be legally improper and unjust toward subsequent buyers relying on the record of the title.
Resolution and Judgment
The Supreme Court reversed the trial court’s order granting cancellation of the annotation. The petition to cancel was denied with costs against the petitioner. The Court did not rule on ancillary issues such as notice and jurisdiction since the core contractual propriety and legal foundation of the restriction sufficed to decide the appeal. The Court also noted that if necessary, the true party in interest (J. M. Tuason & Co., In
Case Syllabus (G.R. No. L-51065-72)
Facts of the Case
- Rafaela Trias, married to Manuel Sia Ramos, filed a petition in May 1963 before the Rizal court of first instance seeking cancellation of a particular annotation on the back of her Torrens certificate of title.
- The contested annotation stated: "5. That no factories will be permitted in this section."
- Rafaela was the registered owner of a lot situated in Quezon City.
- She sought the cancellation not to build a factory but to facilitate the approval of a loan application.
- She claimed the annotation was illegal because it impaired her dominical rights as property owner and was superfluous considering existing zoning ordinances prohibiting factories in the area.
- The lower court granted the petition, supporting the argument that the annotation was a mere surplusage due to local zoning laws.
- Gregorio Araneta Inc., the oppositor and appellant, moved for reconsideration, contending:
- The condition was included pursuant to a contract of sale between the appellant and Rafaela’s predecessor-in-interest.
- They received no timely notice of the petition.
- The order overlooked existing contractual rights and obligations.
- The prohibition against factories was valid and not superfluous.
- The court lacked jurisdiction over the petition.
- After denial of reconsideration, Gregorio Araneta Inc. appealed to the Supreme Court.
Stipulated and Undisputed Facts
- The lot was originally part of a subdivision owned by J.M. Tuason & Co. Inc.
- The company, through Gregorio Araneta Inc., imposed a restriction prohibiting factories during the sale to initial purchasers.
- This prohibition was annotated on the back of the transfer certificate of title issued to the initial purchasers.
- Subsequent transfers of the lot included the same restriction until Rafaela acquired it, inheriting the limitation.
- Rafaela was aware of the restriction upon receiving the certificate.
- Upon challenging the annotation, Rafaela obtained relief from the trial court.
Legal Issues Presented
- The validity of the prohibition restricting the erection of factories on the lot.
- The effect and relevance of the existing zoning ordinance prohibiting factories in the district.
- Ancillary issues raised but not passed upon include jurisdiction and proper party to object to cancellation.
Nature of the Restriction: Easement and Contractual Obligation
- The restriction operates as a form of easement under Article 594 of the Civil Code and Article 688 of the New Civil Code.
- These provisions allow the owner of land to establish easements on the property as long as they do not contravene laws, public policy, or public order.
- The restriction was