I. Facts of the Underlying Case and Summary of the Petition
The Petitioner, in a case concerning a claim for return of land, alleged that the Supreme Court Civil Precedent 70-Tai-Shang-311 (hereinafter “the Precedent at Issue”), as cited and relied upon in the Taiwan High Court Taichung Branch Civil Judgment 105-Shang-24 (2016) (hereinafter “the Judgment at Issue”), gives rise to doubts as to its constitutionality, particularly in relation to the protection of property rights under Article 15 of the Constitution. Accordingly, on January 9, 2018, the Petitioner filed a petition for constitutional interpretation. The Petitioner’s principal arguments are summarized as follows: The land located at Changhua County, ○○ Township, ○○ Section, Land No. 000 (hereinafter “the Land at Issue”) was co-owned by his grandfather, Shih Lo, and others, and such ownership was recorded in the land registers during the Japanese colonial period. After the Government of the Republic of China took control of Taiwan, it implemented a policy of general land registration. Although one of the co-owners of the Land at Issue, Shih Lao-Sung, submitted a declaration, the registration procedure was not completed in accordance with law. Consequently, in 1965 (ROC Year 54), the Land at Issue was treated as ownerless property and registered as state-owned. However, given the purpose of general land registration was merely to organize cadastral records and to investigate and identify land; it does not concern the creation of rights. Therefore, even though the Land at Issue was registered as state-owned, it cannot be said that the State thereby acquired ownership. The Petitioner, by virtue of inheritance, is the true rights holder of the Land at Issue. Moreover, since the registration of the land as state-owned, it has never been transferred to any third party. In the absence of considerations such as transaction safety or protection of third-party reliance, the State may not impede or interfere with the exercise of the people’s rights. By allowing the State to raise the defense of lapse of time, the Precedent at Issue infringes upon the purpose of Article 15 of the Constitution, which guarantees the people’s right to property.
II. Review of Admissibility Requirements and Basis for Review
Pursuant to Article 90, Paragraph 1 of the Constitutional Court Procedure Act (hereinafter “the CCPA 2022”), for cases that were pending prior to the amendment and implementation of the CCPA on January 4, 2022, and have not yet been concluded, the provisions as amended shall apply unless otherwise provided by the Act. However, the question of admissibility shall be determined in accordance with the provisions in effect prior to the amendment.
Furthermore, under Article 5, Paragraph 1, Subparagraph 2 of the Constitutional Court Procedure Act 1993 (hereinafter “the CCPA 1993”), as in effect prior to the implementation of the CCPA 2022, where a person, legal entity, or political party alleges that a right guaranteed by the Constitution has been unlawfully infringed and, after exhausting ordinary judicial remedies, raises a doubt as to the constitutionality of a law or regulation applied in a final judgment, such person may petition for constitutional interpretation. In addition, where a final judgment relies on a judicial precedent as the basis of its decision, and such precedent is alleged by a petitioner to be unconstitutional, the precedent shall be reviewed as if it were a regulation. This position has been consistently affirmed in prior interpretations of the Judicial Yuan (see J.Y. Interpretations Nos. 154, 374, 582, and 792).
Since the present petition was pending prior to the amendment and implementation of the CCPA 2022 on January 4, 2022, and had not yet been concluded at that time, the question of admissibility shall be determined in accordance with the aforementioned provisions of the CCPA 1993 and the relevant Interpretations of the Judicial Yuan.
1. Admissible Part
The Petitioner previously filed an appeal against the Judgment at Issue. The appeal was dismissed as unlawful by the Supreme Court Civil Ruling 106-Tai-Shang-1103 (2017). Accordingly, the Judgment at Issue shall be deemed the final judgment for the purpose of this petition. With respect to the petition challenging the Precedent at Issue, it is found to satisfy the requirements set forth in Article 5, Paragraph 1, Subparagraph 2 of the CCPA 1993, as well as those established in J.Y. Interpretations Nos. 154, 374, 582, and 792. The petition is therefore admitted for review.
2. Inadmissible Part
The Petitioner further alleges that the final judgment relied upon Supreme Court Civil Precedent 67-Tai-Shang-770 (1978) to constrain the application of Article 101, Paragraph 2 of the Civil Code; failed to apply by analogy Article 4, Subparagraph 2 of the Principles for Handling Land for Which No Application for Registration Was Filed Within the General Land Registration Period (which the Petitioner mistakenly referred to as “Rules”); failed to apply by analogy Article 3 of the Act Governing the Settlement of Ill-gotten Properties by Political Parties and Their Affiliate Organizations; and applied Articles 125 and 144, Paragraph 1 of the Civil Code (hereinafter collectively referred to as the “Provisions at Issue”), all of which the Petitioner claims give rise to constitutional doubts. However, upon review of the petition, aside from disputing the correctness of the court’s fact-finding and application of law, the Petitioner has not objectively and specifically demonstrated in what respect the Provisions at Issue contravene the Constitution. With respect to the request to supplement J.Y. Interpretation No. 107 (hereinafter “the Interpretation at Issue”), the holding and reasoning of that Interpretation are clear and unambiguous, and there is no obscurity of language or insufficiency of reasoning. The Petitioner therefore lacks proper grounds to request a supplemental interpretation. In sum, these two parts of the petition fail to meet the requirements set forth in the CCPA 1993 and in J.Y. Interpretations Nos. 503, 784, and 795, and shall therefore be dismissed as inadmissible.
III. Subject Matter of Review
The portion of the Supreme Court Civil Precedent 70-Tai-Shang-311 stating: “… If the land at issue has not yet been registered as owned by the appellee in accordance with the laws and regulations of our State, and after being registered as state-owned fifteen years have elapsed up to the present, and the appellee seeks cancellation of such state ownership registration, and the appellant raises the defense of lapse of time to refuse performance, the appellee’s claim cannot be granted.” is the subject matter of review in this case.
IV. Legal Reasoning Supporting Holding
1. Fundamental Right Involved in This Case
Article 15 of the Constitution provides that the people’s right to property shall be guaranteed. The purpose of this provision is to enable property owners to freely exercise the powers of use, enjoyment, and disposition according to the existing status of the property, free from infringement by public authority or third parties, thus intended to ensure the material basis upon which individuals depend for maintaining their livelihood and for the free development of their personality (see J.Y. Interpretations Nos. 709, 763, 771, and 776).
With respect to the legal effect of land registration, Article 43 of the Land Act provides: “Registration effected in accordance with this Act shall have absolute effect.” However, the consistent view in domestic judicial practice holds that this provision is intended to protect third parties who acquire land rights in reliance on registration. It does not purport, beyond what is necessary for the protection of transaction safety, to deprive the true right holder of their rights. Prior to the acquisition of land rights by a third party, the true right holder may still assert their rights against the registered titleholder (see Yuan-Tzu Interpretation No. 1919, Yuan-Tzu Interpretation No. 1956, and Supreme Court Precedent 40-Tai-Shang-1892). Article 759-1 of the Civil Code, as amended and promulgated on January 23, 2009, adopts this understanding and expressly provides: Paragraph 1: Where a real right over immovable property has been registered, the registered right holder is presumed to have such right lawfully; Paragraph 2: Where a bona fide third party, in reliance on the registration of immovable property, has completed registration of a change in real rights based on a juristic act, the validity of such change shall not be affected by the inaccuracy of the original registered real right.
It thus follows that land registration merely has the effect of presuming the ownership of rights, and cannot serve as an absolute basis for determining the acquisition or extinction of rights. Therefore, where the registered ownership of land is inconsistent with the true state of rights, the true owner, in order to restore the full integrity of their rights, may in principle exercise a real right claim against the registered titleholder and seek cancellation of registration as well as return of the land. As such claims possess proprietary value, they are protected under Article 15 of the Constitution.
2. The Portion of the Precedent at Issue Allowing the State to Raise the Statute of Limitations Defenses Is Inconsistent with Article 15 of the Constitution Protecting the People’s Right to Property
The full text of the Precedent at Issue states: ”The term ‘registered immovable property’ referred to in J.Y. Interpretation No. 107, which excludes the application of extinctive prescription, shall mean registration effected in accordance with the laws and regulations of our State. If the land at issue has not yet been registered as owned by the appellee in accordance with the laws and regulations of our State, and after being registered as state-owned fifteen years have elapsed up to the present, and the appellee seeks cancellation of such state ownership registration, and the appellant raises the defense of lapse of time to refuse performance, the appellee’s claim cannot be granted.” This Judgment reviews only the latter portion thereof. This is stated at the outset.
Where land registered as privately owned during the Japanese colonial period and its status of rights was not registered in accordance with the laws of the Republic of China and was subsequently registered as state-owned, under the Precedent at Issue, although the private party may still exercise a real right claim based on their status as owner, such claim does not fall within the scope of the Interpretation at Issue. Accordingly, the claim remains subject to the provisions on extinctive prescription under the Civil Code and may be extinguished upon the lapse of the fifteen-year prescription period prescribed in Article 125 thereof, allowing the State to raise the defense of lapse of time. Consequently, the property right protected under Article 15 of the Constitution is restricted by virtue of the Precedent at Issue.
(1) Legislative Purpose of the System of Extinctive Prescription Under the Civil Code
The system of extinctive prescription provides that where a right holder fails to exercise a claim within a certain period of time, the obligor may, upon expiration of that period, refuse performance. The legislative rationale for this system lies in the consideration that, after a certain lapse of time, evidence available to the right holder or the obligor may be lost, proof may become difficult, and the truth may become difficult to ascertain, thereby causing unnecessary disturbance in litigation. Accordingly, the legislature, through the institution of extinctive prescription, allows an objective state of affairs that has continued for a certain duration to substitute for the determination of the true legal relationship, so that situations in which the state of rights and obligations is unclear may be resolved at an early stage, thereby maintaining the stability of the legal order.
However, although the Civil Code allows the obligor to raise the defense of extinctive prescription against a time-barred claim to refuse performance, the claim itself is not extinguished by lapse of time. Accordingly, where the obligor performs despite prescription having been completed, the obligor may not request restitution on the ground of not knowing the statute of limitations has expired (see Article 144 of the Civil Code). Moreover, in order to prevent excessive imbalance or unfairness between the parties arising from the exercise of the statute of limitations defenses, such exercise must comply with Article 148 of the Civil Code and be conducted in accordance with the principle of good faith, without constituting an abuse of rights. Accordingly, the institutional design of the extinctive prescription system is by no means intended solely to safeguard the obligor’s interest in the existing legal status; rather, it must also take into account the interests of the right holder, so as to avoid, in individual cases, manifest unfairness in the allocation of rights and obligations.
(2) Land Privately Owned During the Japanese Colonial Period Does Not Lose Private Ownership Merely Because It Was Registered as State-Owned Through the General Land Registration Procedure
Following the end of World War II, in order to investigate and inventory land in Taiwan and to reorganize cadastral records, the Taiwan Provincial Administrative Executive Office of the Republic of China promulgated, in April of the 1946, regulations such as the “Public Notice Requiring All Land Rights Holders to Declare and Register Within a Prescribed Period with the Local Land Consolidation Office,” the “Implementation Guidelines for the Initial Cadastral Clearance,” and the “Directions for the Examination and Acceptance of Maps and Documents in the Initial Cadastral Clearance of Taiwan.”In addition, the Executive Yuan promulgated the “Regulations Governing the Cadastral Rectification of Taiwan” on December 3 of the same year, and in March of the following year approved the “Regulations Governing the Submission and Verification of Land Rights Certificates and the Reissuance of Title Deeds in Taiwan Province,” among other provisions. These regulations, in principle, recognized private land ownership established during the period of Japanese rule, while requiring rights holders to declare their land rights and submit supporting title documents within a prescribed period. Upon completion of procedures such as public notice and the filing of objections, new title deeds would be issued and the relevant information entered into the land register, at which point the comprehensive land registration would be deemed completed. Where the original owner failed to complete such comprehensive land registration, Article 14 of the “Regulations Governing the Submission and Verification of Land Rights Certificates and the Reissuance of Title Deeds in Taiwan Province” provided that the land in question would be registered as state-owned land (Note 1).
Thus, during this transitional period following the change of sovereignty, even where a person was recorded in the land ledger or land register during the Japanese colonial period as business owner or owner (comparable to the current legal concept of owner, Note 2) and such registration of right corresponded to the true status of the right, failure to declare or complete replacement of title documents according to regulations resulted in the land that had been acquired by private individuals during the Japanese colonial period being treated as ownerless property and registered as state-owned.
Article 143, Paragraph 1 of the Constitution provides: “Land within the territory of the Republic of China belongs to the entire body of citizens. Land ownership lawfully acquired by the people shall be protected and restricted by law….” Furthermore, Article 758, Paragraph 1 of the Civil Code provides that “acquisition, creation, loss, or alteration of real rights over immovable property by juristic act shall not take effect unless registered”; Article 759 provides that where real rights over immovable property are acquired prior to registration by inheritance, compulsory execution, expropriation, court judgment, or other causes not arising from juristic acts, disposition thereof shall not be made unless registration has been effected.
The general land registration implemented in the early post-war period was necessary for the administration of national territory and the implementation of the immovable property registration system following the change of sovereignty. However, such measures were intended merely to confirm, organize, and examine the cadastral and ownership status of land at that time to facilitate subsequent governance. They were not intended to effect changes in real rights. Therefore, these administrative measures do not fall within the circumstances described in Articles 758, Paragraph 1, and 759 of the Civil Code. Moreover, although Article 43 of the Land Act provides that registration effected pursuant to that Act shall have absolute effect, this provision merely grants public reliance to registration for the protection of bona fide third parties. It does not negate the validity of rights recorded in land ledgers or land registers during the Japanese colonial period. Accordingly, even where land privately owned during the Japanese colonial period was registered as state-owned through the general land registration procedure, such registration did not alter the ownership of real rights. The people who had already acquired ownership during the Japanese colonial period remained the true owners of such land. This has consistently been recognized in judicial practice (see Supreme Court Civil Judgments 79-Tai-Shang-1360 (1990), 80-Tai-Shang-540(1991), 85-Tai-Shang-2466(1996), 94-Tai-Shang-834(2005), 101-Tai-Shang-1226(2012), and 112-Tai-Shang-398(2023)).
Where such land that had been owned by private individuals during the Japanese colonial period was registered as state-owned through general land registration, although the registration did not effect a change in real rights, it resulted in inconsistency between the true owner (the people) and the registered titleholder (the State). The people must therefore exercise a real right claim against the State pursuant to Article 767, Paragraph 1 of the Civil Code in order to restore their ability, as owner, to freely use, enjoy, and dispose of the property.
(3) In the Present Type of Land Ownership Dispute, the State May Not Invoke the Provisions on Extinctive Prescription Under the Civil Code
In principle, the State may invoke rights conferred by relevant laws in private law disputes between itself and individuals. However, the State exists for the people. By its nature, it does not possess, as individuals do, personality capable of free development or needs necessary for survival, nor does it pursue private interests. It exists to pursue public interests and to perform public functions. Accordingly, the State is not a subject of the fundamental right to property protected under Article 15 of the Constitution (see TCC Judgment 111-Hsien-Pan-14, para. 59).
Generally speaking, where a right holder fails to exercise his or her rights over a prolonged period, the system of extinctive prescription indeed serves the public interest by facilitating the prompt determination of rights and obligations under private law and by maintaining the stability of the legal order. However, disputes between the State and the people concerning land in the present context do not arise from mutual agreement between the parties. Rather, they arise from the State’s exercise of sovereign authority during a period of governmental transition, through the enactment of regulations, and the registration as state-owned of land that was privately owned but not timely declared under the general land registration procedure. If the State were further permitted to invoke the defense of extinctive prescription under the Civil Code based merely on lapse of time, this would effectively recognize that the State may, through the general land registration procedure and the defense of extinctive prescription, deprive the people of property without undergoing any expropriation or analogous procedures.
Furthermore, when the State, exercising sovereign authority, thereby invoking disputes over property rights with the people, the State is not itself a subject protected under Article 15 of the Constitution. No conflict of fundamental rights therefore arises. Moreover, one must consider the historical circumstances in Taiwan at the time of the post-war transition when the replacement of land right certificates were handled, including widespread illiteracy in Chinese, wartime displacement, loss of title documents, limited access to information and education, lack of familiarity with laws and regulations and other special circumstances such as social unrest triggered by the February 28 Incident in 1947. Hence, People failed to submit or supplement title documents within the prescribed period (Note 3), resulting in their land being registered as state-owned. Under such circumstances, permitting the State to rely on extinctive prescription to maintain the registration of privately owned land as state-owned would not only contravene the principle of good faith but would also constitute an infringement upon the people’s property rights. From a constitutional perspective, protection of the people’s property rights is a value that deserves greater weight than maintaining the status quo of state registration. Therefore, there is no legitimate justification for permitting the State to invoke extinctive prescription in such cases.
In sum, the portion of the Precedent at Issue allowing the State to raise the defense of lapse of time according to provisions on extinctive prescription under the Civil Code improperly restricts the people’s property rights and is inconsistent with Article 15 of the Constitution.
In addition, where individuals assert that they are the true right holders of land registered as state-owned, they must present relevant evidence, such as land ledger or land register records from the Japanese colonial period, proof of long-term residence on the land, or evidence that the State required payment of land value tax, agricultural tax or other related taxes. The court shall determine such matters appropriately in light of the specific circumstances of each case in accordance with the law. This requires no further elaboration.
(4) Conclusion
With respect to land that was privately owned during the Japanese colonial period but, due to failure to complete registration within the prescribed period for general land registration, was not registered as privately owned and was instead registered as state-owned, and has remained so registered up to the present, where the people, based on their status as owner of such land, seek cancellation of the registration against the State, the provisions on extinctive prescription under the Civil Code shall not apply. The portion of the Supreme Court Civil Precedent 70-Tai-Shang-311 stating: “… If the land at issue has not yet been registered as owned by the appellee in accordance with the laws and regulations of our State, and after being registered as state-owned fifteen years have elapsed up to the present, and the appellee seeks cancellation of such state ownership registration, and the appellant raises the defense of lapse of time to refuse performance, the appellee’s claim cannot be granted.”is inconsistent with the intent of Article 15 of the Constitution protecting the people’s right to property.
3. Effect of This Judgment
(1) The Latter Portion of the Precedent at Issue Shall No Longer Be Cited
Pursuant to Article 57-1, Paragraphs 1 and 2 of the Court Organization Act, as promulgated on January 4, 2019, and effective as of July 4, 2019: “Precedents selected and compiled by the Supreme Court in accordance with law prior to the amendment of this Act on December 7, 2018, shall cease to apply if the full text of the decision is unavailable for reference.”“Precedents not ceased pursuant to the preceding paragraph shall have the same effect as Supreme Court decisions that have not been selected and compiled as precedents.”Because the full text of the Precedent at Issue is available for reference, it has not ceased to apply since July 4, 2019, pursuant to the above provisions. However, its effect is the same as that of a Supreme Court decision not selected and compiled as a precedent. In practice, nevertheless, judges have continued to directly cite or substantively rely upon the Precedent at Issue as a basis for judicial reasoning. Given that the latter portion of the Precedent at Issue has now been declared unconstitutional by this Court, judges at all levels of courts shall no longer cite or rely upon it from the date of promulgation of this Judgment. This is hereby clarified.
(2) Remedy for the Petitioner
Article 91, Paragraph 1; Paragraph 2, First Sentence; and Paragraph 3 of the Constitutional Court Procedure Act 2022 provide: “In cases of petitions for constitutional review of laws or regulations filed by the people and pending prior to the amendment and implementation of this Act, the first sentence of Article 62, Paragraph 1 concerning declaration of unconstitutionality of the final judgment and remand to the competent court shall not apply.”“Where, in the preceding paragraph, a judgment declares a law or regulation unconstitutional and void, the petitioner may, with respect to the underlying case that has become final, seek remedy in accordance with statutory procedures or the reasoning of the judgment.”“For cases referred to in Paragraph 1, the period from the date on which the petition was pending until the date on which the judgment is served upon the petitioner shall not be counted toward the maximum statutory period for retrial of the underlying case.”
The present petition was pending before the Judicial Yuan on January 9, 2018, and thus constitutes a case pending prior to the amendment and implementation of the Constitutional Court Procedure Act on January 4, 2022, and not yet concluded at that time. Since the latter portion of the Precedent at Issue has been declared unconstitutional and shall no longer be cited, the Petitioner may, in accordance with the reasoning of this Judgment and pursuant to the above provisions of the Constitutional Court Procedure Act 2022, institute retrial proceedings in accordance with law. The period from the date this case was pending before the Judicial Yuan until the date this Judgment is served upon the Petitioner shall not be counted toward the maximum statutory period for retrial of the underlying case. This is hereby indicated.
Notes
Note 1: Li-Fu Chen, A Study on Issues Concerning General Land Registration (Submission and Verification of Title Certificates) in the Early Post-Retrocession Period in Taiwan, in Studies on Land Law (1st ed., 2007), pp. 44–54; Tai-Sheng Wang, An Introduction to Taiwan Legal History (6th ed., 2020), p. 301. 【45】
Note 2: Tai-Sheng Wang, supra Note 1, at 302.
Note 3: Li-Fu Chen, supra Note 1, at 67.