1

NANCY T. LORZANO,       G.R. No. 189647 burial of their father, the petitioner allegedly requested from her siblings that
Petitioner,   she be allowed to take possession of and receive the income generated by the
  Present: subject property until after her eldest son could graduate from college. The
    petitioners siblings acceded to the said request.
  CARPIO, J.,  
  Chairperson, After the petitioners eldest son finished college, her siblings asked
- versus - BRION, her to return to them the possession of the subject property so that they could
  PEREZ, partition it among themselves. However, the petitioner refused to relinquish
  SERENO, and her possession of the subject property claiming that she purchased the
  REYES, JJ. subject property from their father as evidenced by a Deed of Absolute Sale of
    Real Property[4] executed by the latter on May 25, 1992.
  Promulgated:  
JUAN TABAYAG, JR.,   The respondent claimed that their father did not execute the said
Respondent. February 6, 2012 deed of sale. He pointed out that the signature of their father appearing in the
  said deed of sale was a forgery as the same is markedly different from the real
x------------------------------------------------------------------------------------x signature of Tabayag.
   
DECISION Further, the respondent asserted that the said deed of sale was
  acknowledged before a person who was not a duly commissioned Notary
REYES, J.: Public. The deed of sale was acknowledged by the petitioner before a certain
  Julian P. Cabaes (Cabaes) on May 25, 1992 at Iriga City. However, as per the
Nature of the Petition Certification[5] issued by the Office of the Clerk of Court of the RTC on May
  16, 2002, Cabaes has never been commissioned as a Notary Public for and in
This is a petition for review on certiorari under Rule 45 of the Rules of Court the Province of Camarines Sur and in the Cities of Iriga and Naga.
filed by Nancy T. Lorzano (petitioner) assailing the Court of Appeals (CA)  
Decision[1] dated March 18, 2009 and Resolution[2] dated September 16, 2009 The respondent alleged that the petitioner purposely forged the signature of
in CA-G.R. CV No. 87762 entitled Juan Tabayag, Jr. v. Nancy T. Lorzano. Tabayag in the said deed of sale to deprive him and their other siblings of
  their share in the subject property. He then averred that the subject property
The Antecedent Facts was already covered by Original Certificate of Title (OCT) No. 1786[6] issued
  by the Register of Deeds of Iriga City on January 9, 2001 registered under the
The instant case stemmed from an amended complaint[3] for name of the petitioner. OCT No. 1786 was issued pursuant to Free Patent No.
annulment of document and reconveyance filed by Juan Tabayag, Jr. 051716 which was procured by the petitioner on June 24, 1996.
(respondent) against the petitioner, docketed as Civil Case No. Ir-3286, with  
the Regional Trial Court (RTC) of Iriga City. For her part, the petitioner maintained she is the owner of the subject parcel
  of land having purchased the same from Tabayag as evidenced by the May 25,
The petitioner and the respondent are two of the children of the late 1992 deed of sale. Further, the petitioner asserted that the respondent failed
Juan Tabayag (Tabayag) who died on June 2, 1992. Tabayag owned a parcel to establish that the signature of Tabayag appearing on the said deed of sale
of land situated in Sto. Domingo, Iriga City (subject property). Right after the

was a forgery considering that it was not submitted for examination by a
handwriting expert.
 
The RTC Decision
 
On April 28, 2006, the RTC rendered an Amended Decision [7] the
decretal portion of which reads:
WHEREFORE, Judgment is hereby rendered[:]
a.       Declaring the supposed Deed of Sale null and
void and of no legal effect;
 
b.      Ordering the [petitioner] to reconvey to the
heirs of the late Juan Tabayag, Sr. the land
subject matter of this case[;]
 
c.       Declaring the property described in the
complaint and in the spurious deed of sale to be
owned in common by the heirs of Juan Tabayag,
Sr. as part of their inheritance from said Juan
Tabayag, Sr[.];
 
d.      Ordering [petitioner] to pay plaintiff the sum of
One Hundred Thousand Pesos (P100,000.00)by
way of moral damages;
 
e.       Ordering defendant to pay plaintiff the
attorneys fees in the sum of Fifteen Thousand
Pesos (P15,000.00), based on quantum meruit;
 
f.       Dismissing the counterclaim for lack of merit[;]
 
g.      Costs against the defendant.
SO ORDERED.[8]
 
2
The RTC opined that a cursory comparison between the signature of
Tabayag appearing on the said deed of sale and his signatures appearing on
other documents would clearly yield a conclusion that the former was indeed
a forgery. Moreover, the RTC asserted that the nullity of the said May 25,
1992 deed of sale all the more becomes glaring considering that the same was
purportedly acknowledged before a person who is not a duly commissioned
Notary Public.
The CA Decision
Thereafter, the petitioner appealed the decision with the CA. On
March 18, 2009, the CA rendered the assailed decision affirming in
toto the RTC decision.[9] The CA held that the testimony of a handwriting
expert in this case is not indispensable as the similarity and dissimilarity
between the questioned signature of Tabayag as compared to other
signatures of the latter in other documents could be determined by a visual
comparison.
 
Further, the CA upheld the award of moral damages and attorneys
fees in favor of the respondent as the petitioners conduct caused great
concern and anxiety to the respondent and that the latter had to go to court
and retain the services of counsel to pursue his rights and protect his
interests.
 
Undaunted, the petitioner instituted the instant petition for review
on certiorari before this Court asserting the following: (1) the questioned
signature of Tabayag in the May 25, 1992 deed of sale could not be declared
spurious unless first examined and declared to be so by a handwriting expert;
(2) considering that the subject property was registered under the petitioners
name pursuant to a free patent, reconveyance of the same in favor of the
respondent is improper since only the Government, through the Office of the
Solicitor General (OSG), could assail her title thereto in an action for
reversion; and (3) the respondent is not entitled to an award for moral
damages and attorneys fees.
In his Comment,[10] the respondent claimed that the issues raised in
the instant petition are factual in nature and, hence, could not be passed
upon by this Court in a petition for review on certiorari under Rule 45.

Likewise, the respondent asserted that the petitioners free patent, having
been issued on the basis of a falsified document, does not create a right over
the subject property in her favor.
 
Issues
 
In sum, the threshold issues for resolution are the following: (a)
whether the lower courts erred in declaring the May 25, 1992 deed of sale a
nullity; (b) whether an action for reconveyance is proper in the instant case;
and (c) whether the respondent is entitled to an award of moral damages and
attorneys fees.  must conduct an independent examination of the questioned signature in
 
The Courts Ruling
 
First and Third Issues: Nullity of the Deed of Sale and Award of
Moral Damages and Attorneys Fees
 
This Court shall jointly discuss the first and third issues as the
resolution of the same are interrelated.
 
Primarily, Section 1, Rule 45 of the Rules of Court categorically states
that the petition filed shall raise only questions of law, which must be
distinctly set forth. A question of law arises when there is doubt as to what
the law is on a certain state of facts, while there is a question of fact when the
doubt arises as to the truth or falsity of the alleged facts. For a question to be
one of law, the same must not involve an examination of the probative value
of the evidence presented by the litigants or any of them. The resolution of
the issue must rest solely on what the law provides on the given set of
circumstances. Once it is clear that the issue invites a review of the evidence
presented, the question posed is one of fact.[11]
 
That the signature of Tabayag in the May 25, 1992 deed of sale was a
forgery is a conclusion derived by the RTC and the CA on a question of fact.
The same is conclusive upon this Court as it involves the truth or falsehood
of an alleged fact, which is a matter not for this Court to resolve. [12] Where a
petitioner casts doubt on the findings of the lower court as affirmed by the
CA regarding the existence of forgery is a question of fact.[13]
3
In any case, the CA aptly ruled that a handwriting expert is not
indispensable to prove that the signature of Tabayag in the questioned deed
of sale was indeed a forgery. It is true that the opinion of handwriting experts
are not necessarily binding upon the court, the experts function being to
place before the court data upon which the court can form its own opinion.
Handwriting experts are usually helpful in the examination of forged
documents because of the technical procedure involved in analyzing them.
But resort to these experts is not mandatory or indispensable to the
examination or the comparison of handwriting. A finding of forgery does not
depend entirely on the testimonies of handwriting experts, because the judge
order to arrive at a reasonable conclusion as to its authenticity.[14]
 
For the same reason, we would ordinarily disregard the petitioners
allegation as to the propriety of the award of moral damages and attorneys
fees in favor of the respondent as it is a question of fact. Thus, questions on
whether or not there was a preponderance of evidence to justify the award of
damages or whether or not there was a causal connection between the given
set of facts and the damage suffered by the private complainant or whether or
not the act from which civil liability might arise exists are questions of fact.[15]
 
Essentially, the petitioner is questioning the award of moral damages
and attorneys fees in favor of the respondent as the same is supposedly not
fully supported by evidence. However, in the final analysis, the question of
whether the said award is fully supported by evidence is a factual question as
it would necessitate whether the evidence adduced in support of the same has
any probative value. For a question to be one of law, it must involve no
examination of the probative value of the evidence presented by the litigants
or any of them.[16]
 
Nevertheless, a review of the amount of moral damages actually awarded by
the lower courts in favor of the respondent is necessary.
 
Here, the lower courts ordered the petitioner to pay the respondent
moral damages in the amount of P100,000.00. We find the said amount to be
excessive.
 

Moral damages are not intended to enrich the complainant at the expense of
the defendant. Rather, these are awarded only to enable the injured party to
obtain means, diversions or amusements that will serve to alleviate the moral
suffering that resulted by reason of the defendants culpable action. The
purpose of such damages is essentially indemnity or reparation, not
punishment or correction. In other words, the award thereof is aimed at a
restoration within the limits of the possible, of the spiritual status quo
ante; therefore, it must always reasonably approximate the extent of injury
and be proportional to the wrong committed.[17]
 
Accordingly, the amount of moral damages must be reduced to P30,000.00,
an amount reasonably commensurate to the injury sustained by the
respondent.
Second Issue: Propriety of the Reconveyance of the Subject
Property to the Heirs of the late Juan Tabayag
 
The petitioner asserted that the CA erred in not finding that her ownership
over the subject property was by virtue of a free patent issued by the
government and, thus, even assuming that the subject deed of sale is invalid,
her title and ownership of the subject property cannot be divested or much
less ordered reconveyed to the heirs of Tabayag.
 
Simply put, the petitioner points out that the subject property, being
acquired by her through a grant of free patent from the government,
originally belonged to the public domain. As such, the lower courts could not
order the reconveyance of the subject property to the heirs of Tabayag as the
latter are not the original owners thereof. If at all, the subject property could
only be ordered reverted to the public domain.
 
An issue cannot be raised for the first time on appeal as it is
already barred by estoppel.
 
This Court notes that the foregoing argument is being raised by the
petitioner for the first time in the instant petition. It is well-settled that no
question will be entertained on appeal unless it has been raised in the
proceedings below. Points of law, theories, issues and arguments not brought
to the attention of the lower court, administrative agency or quasi-
4
judicial body, need not be considered by a reviewing court, as they cannot
be raised for the first time at that late stage. Basic considerations of fairness
and due process impel this rule. Any issue raised for the first time on appeal
is barred by estoppel.[18]
 
Accordingly, the petitioners attack on the propriety of the action for
reconveyance in this case ought to be disregarded. However, in order to
obviate any lingering doubt on the resolution of the issues involved in the
instant case, this Court would proceed to discuss the cogency of the
petitioners foregoing argument.
 
Title emanating from a free patent fraudulently secured
does not become indefeasible.
 
The petitioner asserts that the amended complaint for annulment of
document, reconveyance and damages that was filed by the respondent with
the RTC is a collateral attack on her title over the subject property. She avers
that, when the said amended compliant was filed, more than a year had
already lapsed since OCT No. 1786 over the subject property was issued
under her name. Thus, the petitioner maintains that her title over the subject
property is already indefeasible and, hence, could not be attacked collaterally.
We do not agree.
 
A Free Patent may be issued where the applicant is a natural-born
citizen of the Philippines; is not the owner of more than twelve (12) hectares
of land; has continuously occupied and cultivated, either by himself or
through his predecessors-in-interest, a tract or tracts of agricultural public
land subject to disposition, for at least 30 years prior to the effectivity of
Republic Act No. 6940; and has paid the real taxes thereon while the same
has not been occupied by any person.[19]
 
Once a patent is registered and the corresponding certificate of title
is issued, the land covered thereby ceases to be part of public domain and
becomes private property, and the Torrens Title issued pursuant to the patent
becomes indefeasible upon the expiration of one year from the date of such
issuance.[20] However, a title emanating from a free patent which was secured

through fraud does not become indefeasible, precisely because the patent
from whence the title sprung is itself void and of no effect whatsoever.[21]
 
On this point, our ruling in Republic v. Heirs of Felipe Alejaga, Sr. [22] is
instructive:
 
True, once a patent is registered and the corresponding
certificate of title [is] issued, the land covered by them ceases
to be part of the public domain and becomes private
property. Further, the Torrens Title issued pursuant to the
patent becomes indefeasible a year after the issuance of the
latter. However, this indefeasibility of a title does not attach
to titles secured by fraud and misrepresentation.  Well-settled
is the doctrine that the registration of a patent under the
Torrens System does not by itself vest title; it merely
confirms the registrants already existing one. Verily,
registration under the Torrens System is not a mode of
acquiring ownership.[23] (citations omitted)
 
 
A fraudulently acquired free patent may only be
assailed by the government in an action for
reversion.
 
Nonetheless, a free patent that was fraudulently acquired, and the
certificate of title issued pursuant to the same, may only be assailed by the
government in an action for reversion pursuant to Section 101 of the Public
Land Act.[24] In Sherwill Development Corporation v. Sitio Sto. Nio
Residents Association, Inc.,[25] this Court pointed out that:
 
It is also to the public interest that one who succeeds in
fraudulently acquiring title to a public land should not be
allowed to benefit therefrom, and the State should, therefore,
have an even existing authority, thru its duly-authorized
officers, to inquire into the circumstances surrounding the
issuance of any such title, to the end that the Republic, thru
the Solicitor General or any other officer who may be
5
authorized by law, may file the corresponding action for the
reversion of the land involved to the public domain, subject
thereafter to disposal to other qualified persons in
accordance with law. In other words, the indefeasibility of a
title over land previously public is not a bar to an
investigation by the Director of Lands as to how such title
has been acquired, if the purpose of such investigation is to
determine whether or not fraud had been committed in
securing such title in order that the appropriate action for
reversion may be filed by the Government.[26]
 
 
In Kayaban, et al. v. Republic, et al.,[27] this Court explained the
reason for the rule that only the government, through the OSG, upon the
recommendation of the Director of Lands, may bring an action assailing a
certificate of title issued pursuant to a fraudulently acquired free patent:
 
Since it was the Director of Lands who processed
and approved the applications of the appellants and who
ordered the issuance of the corresponding free patents in
their favor in his capacity as administrator of the disposable
lands of the public domain, the action for annulment should
have been initiated by him, or at least with his prior
authority and consent.[28]
An action for reconveyance is proper in this
case.
 
 
However, the foregoing rule is not without an exception. A
recognized exception is that situation where plaintiff-claimant seeks direct
reconveyance from defendant public land unlawfully and in breach of trust
titled by him, on the principle of enforcement of a constructive trust.[29]
 
A private individual may bring an action for reconveyance of a parcel
of land even if the title thereof was issued through a free patent since such
action does not aim or purport to re-open the registration proceeding and set

aside the decree of registration, but only to show that the person who secured
the registration of the questioned property is not the real owner thereof.[30]
 
In Roco, et al. v. Gimeda,[31] we stated that if a patent had already
been issued through fraud or mistake and has been registered, the remedy of
a party who has been injured by the fraudulent registration is an action for
reconveyance, thus:
 
It is to be noted that the petition does not seek for a
reconsideration of the granting of the patent or of the decree
issued in the registration proceeding. The purpose is not to
annul the title but to have it conveyed to plaintiffs.
Fraudulent statements were made in the application for the
patent and no notice thereof was given to plaintiffs, nor
knowledge of the petition known to the actual possessors and
occupants of the property. The action is one based on fraud
and under the law, it can be instituted within four years from
the discovery of the fraud. (Art. 1146, Civil Code, as based on
Section 3, paragraph 43 of Act No. 190.) It is to be noted that
as the patent here has already been issued, the land has the
character of registered property in accordance with the
provisions of Section 122 of Act No. 496, as amended by Act
No. 2332, and the remedy of the party who has been injured
by the fraudulent registration is an action for reconveyance.
(Director of Lands vs. Registered of Deeds, 92 Phil., 826; 49
Off. Gaz. [3] 935; Section 55 of Act No. 496.)[32]
In the same vein, in Quiiano, et al. v. Court of Appeals, et al.,[33] we
stressed that:
 
The controlling legal norm was set forth in succinct language
by Justice Tuason in a 1953 decision, Director of Lands v.
Register of Deeds of Rizal. Thus: The sole remedy of the land
owner whose property has been wrongfully or erroneously
registered in another's name is, after one year from the date
of the decree, not to set aside the decree, as was done in the
instant case, but, respecting the decree as incontrovertible
and no longer open to review, to bring an ordinary action in
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the ordinary court of justice for reconveyance or, if the
property has passed into the hands of an innocent purchaser
for value, for damages." Such a doctrine goes back to the
1919 landmark decision of Cabanos v. Register of Deeds of
Laguna. If it were otherwise the institution of registration
would, to quote from Justice Torres, serve "as a protecting
mantle to cover and shelter bad faith ...." In the language of
the then Justice, later Chief Justice, Bengzon: "A different
view would encourage fraud and permit one person unjustly
to enrich himself at the expense of another." It would indeed
be a signal failing of any legal system if under the
circumstances disclosed, the aggrieved party is considered as
having lost his right to a property to which he is entitled. It is
one thing to protect an innocent third party; it is entirely a
different matter, and one devoid of justification, if [deceit]
would be rewarded by allowing the perpetrator to enjoy the
fruits of his nefarious deed. As clearly revealed by the
undeviating line of decisions coming from this Court, such
an undesirable eventuality is precisely sought to be guarded
against. So it has been before; so it should continue to be.
[34]
 (citations omitted)
 
Here, the respondent, in filing the amended complaint for annulment
of documents, reconveyance and damages, was not seeking a reconsideration
of the granting of the patent or the decree issued in the registration
proceedings. What the respondent sought was the reconveyance of the
subject property to the heirs of the late Tabayag on account of the fraud
committed by the petitioner. Thus, the lower courts did not err in upholding
the respondents right to ask for the reconveyance of the subject property. To
hold otherwise would be to make the Torrens system a shield for the
commission of fraud.
 
That the subject property was not registered under the name of the
heirs of Tabayag prior to the issuance of OCT No. 1786 in the name of the
petitioner would not effectively deny the remedy of reconveyance to the
former. An action for reconveyance is a legal and equitable remedy granted to
the rightful landowner, whose land was wrongfully or erroneously registered
 7

in the name of another, to compel the registered owner to transfer or HEIRS OF SPOUSES G.R. No. 159941
reconvey the land to him.[35] TEOFILO M. RETERTA and  
  ELISA RETERTA, namely:  
It cannot be gainsaid that the heirs of Tabayag, by themselves and through EDUARDO M. RETERTA, Present:
their predecessors-in-interest, had already acquired a vested right over the CONSUELO M. RETERTA,  
subject property. An open, continuous, adverse and public possession of a and AVELINA M. RETERTA, CORONA, C.J., Chairperson,
land of the public domain from time immemorial by a private individual Petitioners, LEONARDO-DE CASTRO,
personally and through his predecessors confers an effective title on said   BERSAMIN,
possessors whereby the land ceases to be public, to become private property,   DEL CASTILLO, and
at least by presumption.[36] Hence, the right of the heirs of Tabayag to ask for - versus - VILLARAMA, JR., JJ.
the reconveyance of the subject property is irrefutable.    
    Promulgated:
At this juncture, we deem it necessary to reiterate our disquisition SPOUSES LORENZO MORES  
in Naval v. Court of Appeals,[37] thus: and VIRGINIA LOPEZ, August 17, 2011
  Respondents.
The fact that petitioner was able to secure a title in her name x-----------------------------------------------------------------------------------------
did not operate to vest ownership upon her of the subject x
land. Registration of a piece of land under the Torrens  
System does not create or vest title, because it is not a mode D E C I S I O N 
of acquiring ownership. A certificate of title is merely an BERSAMIN, J.:
evidence of ownership or title over the particular property  
described therein. It cannot be used to protect a usurper  
from the true owner; nor can it be used as a shield for the The original and exclusive jurisdiction over a complaint for quieting
commission of fraud; neither does it permit one to enrich of title and reconveyance involving friar land belongs to either the Regional
himself at the expense of others. Its issuance in favor of a Trial Court (RTC) or the Municipal Trial Court (MTC). Hence, the dismissal
particular person does not foreclose the possibility that the of such a complaint on the ground of lack of jurisdiction due to the land in
real property may be co-owned with persons not named in litis being friar land under the exclusive jurisdiction of the Land
the certificate, or that it may be held in trust for another Management Bureau (LMB) amounts to manifest grave abuse of discretion
person by the registered owner.[38] (citations omitted) that can be corrected through certiorari.
   
WHEREFORE, in consideration of the foregoing disquisitions, the The petitioners, whose complaint for quieting of title and
petition is DENIED. The Decision dated March 18, 2009 and Resolution reconveyance the RTC had dismissed, had challenged the dismissal by
dated September 16, 2009 issued by the Court of Appeals in CA-G.R. CV No. petition for certiorari, but the Court of Appeals (CA) dismissed their petition
87762 are hereby AFFIRMED with MODIFICATION. The petitioner is on the ground that certiorari was not a substitute for an appeal, the proper
ordered to pay the respondent moral damages in the amount of Thirty recourse against the dismissal. They now appeal that ruling of the CA
Thousand Pesos (P30,000.00). promulgated on April 25, 2003.[1]
   
SO ORDERED.

Antecedents
 
On May 2, 2000, the petitioners commenced an action for quieting of
title and reconveyance in the RTC in Trece Martires City (Civil Case No. TM-
983),[2] averring that they were the true and real owners of the parcel of land
(the land) situated in Trez Cruzes, Tanza, Cavite, containing an area of
47,708 square meters, having inherited the land from their father who had
died on July 11, 1983; that their late father had been the grantee of the land
by virtue of his occupation and cultivation; that their late father and his
predecessors in interest had been in open, exclusive, notorious, and
continuous possession of the land for more than 30 years; that they had
discovered in 1999 an affidavit dated March 1, 1966 that their father had
purportedly executed whereby he had waived his rights, interests, and
participation in the land; that by virtue of the affidavit, Sales Certificate No.
V-769 had been issued in favor of respondent Lorenzo Mores by the then
Department of Agriculture and Natural Resources; and that Transfer
Certificate of Title No. T-64071 had later issued to the respondents.
 
On August 1, 2000, the respondents, as defendants, filed a motion to
dismiss, insisting that the RTC had no jurisdiction to take cognizance of Civil
Case No. TM-983 due to the land being friar land, and that the petitioners
had no legal personality to commence Civil Case No. TM-983.
 
On October 29, 2001, the RTC granted the motion to dismiss,
holding:[3]
 
Considering that plaintiffs in this case sought the
review of the propriety of the grant of lot 2938 of the Sta.
Cruz de Malabon Friar Lands Estate by the Lands
Management Bureau of the defendant Lorenzo Mores
through the use of the forged Affidavit and Sales Certificate
No. V-769 which eventually led to the issuance of T.C.T. No.
T-64071 to defendant Lorenzo Mores and wife Virginia
Mores, and considering further that the land subject of this
case is a friar land and not land of the public domain,
consequently Act No. 1120 is the law prevailing on the matter
which gives to the Director of Lands the exclusive
administration and disposition of Friar Lands. More so, the
8
determination whether or not fraud had been committed in
the procurement of the sales certificate rests to the exclusive
power of the Director of Lands. Hence this Court is of the
opinion that it has no jurisdiction over the nature of this
action. On the second ground relied upon by the defendants
in their Motion To Dismiss, suffice it to state that the Court
deemed not to discuss the same.
 
IN VIEW OF THE FOREGOING, let this instant case
be dismissed as it is hereby dismissed.
 
SO ORDERED.
 
The petitioners then timely filed a motion for reconsideration, but
the RTC denied their motion for reconsideration on February 21, 2002.[4]
 
On May 15, 2002, therefore, the petitioners assailed the
dismissal via petition for certiorari, but the CA dismissed the petition on
April 25, 2003, holding: [5]
 
Thus, the basic requisite for the special civil action
of certiorari to lie is that there is no appeal, nor any plain,
speedy and adequate remedy in the ordinary course of law.
 
In the case at bench, when the court rendered the
assailed decision, the remedy of the petitioners was to have
appealed the same to this Court. But petitioners did not.
Instead they filed the present special civil action
for certiorari on May 15, 2002 after the decision of the
court a quo has become final.
 
The Order dismissing the case was issued by the
court a quo on 29 October 2001, which Order was received
by the petitioners on November 16, 2001. Petitioners filed a
motion for reconsideration dated November 26, 2001 but the
same was denied by the court a quo on 21 February
2002. The Order denying the motion for reconsideration was
received by the petitioners on 20 March 2002.

Petitioners filed this petition for certiorari on May 15,
2002. Certiorari, however cannot be used as a substitute for
the lost remedy of appeal.
In Bernardo vs. Court of Appeals, 275 SCRA 423, the
Supreme Court had the following to say:
 
We have time and again reminded members
of the bench and bar that a special civil action
for certiorari under Rule 65 lies only when there is
no appeal nor plain, speedy and adequate remedy
in the ordinary course of law. Certiorari cannot be
allowed when a party to a case fails to appeal a
judgment despite the availability of that
remedy, certiorari not being a substitute for lost
appeal. The remedies of appeal and certiorari are
mutually exclusive and not alternative or
successive.
 
WHEREFORE, in view of the foregoing, the instant
petition is hereby DISMISSED.
 
SO ORDERED.
 
On September 9, 2003, the CA denied the petitioners motion for
reconsideration.[6]
 
Hence, this appeal.
 
Issues
The petitioners submit that:
I.
IT IS REVERSIBLE ERROR OF THE HONORABLE COURT
OF APPEALS TO DISREGARD THE PROVISIONS OF
SECTION 1, RULE 41, SECOND PARAGRAPH,
SUBPARAGRAPH (a), AND SECTION 9, RULE 37, 1997
RULES OF COURT;
9
II.
IT IS REVERSIBLE ERROR FOR THE HONORABLE
COURT OF APPEALS TO APPLY THE RULING IN THE
CASE OF ROSETE vs. COURT OF APPEALS, 339 SCRA 193,
199,NOTWITHSTANDING THE FACT THAT THE 1997
RULES OF CIVIL PROCEDURE ALREADY TOOK EFFECT
ON JULY 1, 1997.
 
III.
IT IS REVERSIBLE ERROR FOR THE HONORABLE
COURT OF APPEALS IN NOT FINDING THAT THE TRIAL
JUDGE GRAVELY ABUSED ITS DISCRETION WHEN IT
DISMISSED THE COMPLAINT RULING THAT IT HAS NO
JURISDICTION OVER THE NATURE OF THE ACTION,
AND IN NOT FINDING THAT THE TRIAL JUDGE HAS
JURISDICTION OVER THE SAME.[7]
 
Briefly stated, the issue is whether or not the CA erred in dismissing
the petition for certiorari.
 
Ruling
 
The appeal is meritorious.
 
1.Propriety of certiorari as remedy
against dismissal of the action
 
The CA seems to be correct in dismissing the petition for certiorari,
considering that the order granting the respondents motion to dismiss was a
final, as distinguished from an interlocutory, order against which the proper
remedy was an appeal in due course. Certiorari, as an extraordinary remedy,
is not substitute for appeal due to its being availed of only when there is no
appeal, or plain, speedy and adequate remedy in the ordinary course of law.[8]
 
Nonetheless, the petitioners posit that a special civil action
for certiorari was their proper remedy to assail the order of dismissal in light
of certain rules of procedure,specifically pointing out that the second

paragraph of Section 1 of Rule 37 of the Rules of Court (An order denying a
motion for new trial or reconsideration is not appealable, the remedy being
an appeal from the judgment or final order) prohibited an appeal of a denial
of the motion for reconsideration, and that the second paragraph of Section 1
of Rule 41 of the Rules of Court ( No appeal may be taken from: xxx An
order denying a motion for new trial or reconsideration) expressly declared
that an order denying a motion for reconsideration was not appealable. They
remind that the third paragraph of Section 1 of Rule 41 expressly provided
that in the instances where the judgment or final order is not appealable, the
aggrieved party may file an appropriate special civil action under Rule 65.
The petitioners position has no basis.
 
For one, the order that the petitioners really wanted to obtain relief
from was the order granting the respondents motion to dismiss, not the
denial of the motion for reconsideration. The fact that the order granting
the motion to dismiss was a final order for thereby completely disposing of
the case, leaving nothing more for the trial court to do in the action, truly
called for an appeal, instead of certiorari, as the correct remedy.
 
The fundamental distinction between a final judgment or order, on
one hand, and an interlocutory order, on the other hand, has been outlined
in Investments, Inc. v. Court of Appeals,[9] viz:
 
The concept of final judgment, as distinguished from
one which has become final (or executory as of right [final
and executory]), is definite and settled. A final judgment
or order is one that finally disposes of a case,
leaving nothing more to be done by the Court in
respect thereto, e.g., an adjudication on the merits
which, on the basis of the evidence presented at the
trial declares categorically what the rights and
obligations of the parties are and which party is in
the right; or a judgment or order that dismisses an
action on the ground, for instance, of res judicata or
prescription. Once rendered, the task of the Court is
ended, as far as deciding the controversy or
determining the rights and liabilities of the litigants
is concerned. Nothing more remains to be done by
10
the Court except to await the parties next move (which
among others, may consist of the filing of a motion for new
trial or reconsideration, or the taking of an appeal) and
ultimately, of course, to cause the execution of the judgment
once it becomes final or, to use the established and more
distinctive term, final and executory.
xxx
Conversely, an order that does not finally
dispose of the case, and does not end the Courts task
of adjudicating the parties contentions and
determining their rights and liabilities as regards
each other, but obviously indicates that other things
remain to be done by the Court, is interlocutory, e.g.,
an order denying a motion to dismiss under Rule 16 of the
Rules, or granting a motion for extension of time to file a
pleading, or authorizing amendment thereof, or granting or
denying applications for postponement, or production or
inspection of documents or things, etc. Unlike a final
judgment or order, which is appealable, as above
pointed out, an interlocutory order may not be
questioned on appeal except only as part of an
appeal that may eventually be taken from the final
judgment rendered in the case.
 
 
Moreover, even Section 9 of Rule 37 of the Rules of Court, cited by
the petitioners, indicates that the proper remedy against the denial of the
petitioners motion for reconsideration was an appeal from the final order
dismissing the action upon the respondents motion to dismiss. The said rule
explicitly states thusly:
 
Section 9. Remedy against order denying a motion
for new trial or reconsideration. An order denying a motion
for new trial or reconsideration is not appealable, the
remedy being an appeal from the judgment or final
order.
 
 

The restriction against an appeal of a denial of a motion for
reconsideration independently of a judgment or final order is logical and
reasonable. A motion for reconsideration is not putting forward a new issue,
or presenting new evidence, or changing the theory of the case, but is only
seeking a reconsideration of the judgment or final order based on the same
issues, contentions, and evidence either because: (a) the damages awarded
are excessive; or (b) the evidence is insufficient to justify the decision or final
order; or (c) the decision or final order is contrary to law.[10] By denying
a motion for reconsideration, or by granting it only partially, therefore, a
trial court finds no reason either to reverse or to modify its judgment or final
order, and leaves the judgment or final order to stand. The remedy from the
denial is to assail the denial in the course of an appeal of the judgment or
final order itself.
The enumeration of the orders that were not appealable made in the
1997 version of Section 1, Rule 41 of the Rules of Court the version in force at
the time when the CA rendered its assailed decision on May 15, 2002
included an order denying a motion for new trial or motion for
reconsideration, to wit:
 
Section 1. Subject of appeal. An appeal may be taken
from a judgment or final order that completely disposes of
the case, or of a particular matter therein when declared by
these Rules to be appealable.
 
No appeal may be taken from:
 
(a) An order denying a motion for new trial or
reconsideration;
(b) An order denying a petition for relief or any similar
motion seeking relief from judgment;
 
(c) An interlocutory order;
 
(d) An order disallowing or dismissing an appeal;
 
11
(e) An order denying a motion to set aside a judgment
by consent, confession or compromise on the ground of
fraud, mistake or duress, or any other ground vitiating
consent;
 
(f) An order of execution;
 
(g) A judgment or final order for or against one or
more of several parties or in separate claims, counterclaims,
cross-claims and third-party complaints, while the main case
is pending, unless the court allows an appeal therefrom; and
 
(h) An order dismissing an action without prejudice.
In all the above instances where the judgment or final
order is not appealable, the aggrieved party may file an
appropriate special civil action under Rule 65. (n)
 
 
It is true that Administrative Matter No. 07-7-12-SC, effective
December 27, 2007, has since amended Section 1, Rule 41, supra, by deleting
an order denying a motion for new trial or motion for reconsideration from
the enumeration of non-appealable orders, and that such a revision of a
procedural rule may be retroactively applied. However, to reverse the CA on
that basis would not be right and proper, simply because the CA correctly
applied the rule of procedure in force at the time when it issued its assailed
final order.
 
2.RTC or MTC has jurisdiction over the action
The settled rule precluding certiorari as a remedy against the final order
when appeal is available notwithstanding, the Court rules that the CA should
have given due course to and granted the petition for certiorari for two
exceptional reasons, namely: (a) the broader interest of justice demanded
that certiorari be given due course to avoid the undeserved grossly unjust
result that would befall the petitioners otherwise; and (b) the order of the
RTC granting the motion to dismiss on ground of lack of jurisdiction over the

subject matter evidently constituted grave abuse of discretion amounting to
excess of jurisdiction.
 
On occasion, the Court has considered certiorari as the proper
remedy despite the availability of appeal, or other remedy in the ordinary
course of law. In Francisco Motors Corporation v. Court of Appeals,[11] the
Court has declared that the requirement that there must be no appeal, or any
plain speedy and adequate remedy in the ordinary course of law admits of
exceptions, such as: (a) when it is necessary to prevent irreparable damages
and injury to a party; (b) where the trial judge capriciously and whimsically
exercised his judgment; (c) where there may be danger of a failure of justice;
(d) where an appeal would be slow, inadequate, and insufficient; (e) where
the issue raised is one purely of law; (f) where public interest is involved; and
(g) in case of urgency.
 
Specifically, the Court has held that the availability of appeal as a
remedy does not constitute sufficient ground to prevent or preclude a party
from making use of certiorari if appeal is not an adequate remedy, or an
equally beneficial, or speedy remedy. It is inadequacy, not the mere absence
of all other legal remedies and the danger of failure of justice without the
writ, that must usually determine the propriety of certiorari.[12] A remedy is
plain, speedy and adequate if it will promptly relieve the petitioner from the
injurious effects of the judgment, order, or resolution of the lower court or
agency.[13] It is understood, then, that a litigant need not mark time by
resorting to the less speedy remedy of appeal in order to have an order
annulled and set aside for being patently void for failure of the trial court to
comply with the Rules of Court.[14]
 
Nor should the petitioner be denied the
recourse despite certiorari not being available as a proper remedy against an
assailed order, because it is better on balance to look beyond procedural
requirements and to overcome the ordinary disinclination to exercise
supervisory powers in order that a void order of a lower court may be
controlled to make it conformable to law and justice. [15] Verily, the instances
in which certiorari will issue cannot be defined, because to do so is to destroy
the comprehensiveness and usefulness of the extraordinary writ. The wide
breadth and range of the discretion of the court are such that authority is not
wanting to show that certiorari is more discretionary than either prohibition
12
or mandamus, and that in the exercise of superintending control over
inferior courts, a superior court is to be guided by all the circumstances of
each particular case as the ends of justice may require. Thus, the writ will be
granted whenever necessary to prevent a substantial wrong or to do
substantial justice.[16]
 
The petitioners complaint self-styled as being for the quieting of title
and reconveyance, declaration of nullity of affidavit & Sales Certificate,
reconveyance and damageswould challenge the efficacy of the respondents
certificate of title under the theory that there had been no valid transfer or
assignment from the petitioners predecessor in interest to the respondents of
the rights or interests in the land due to the affidavit assigning such rights
and interests being a forgery and procured by fraud.
 
The petitioners cause of action for reconveyance has support in
jurisprudence bearing upon the manner by which to establish a right in a
piece of friar land. According to Arayata v. Joya,[17] in order that a transfer of
the rights of a holder of a certificate of sale of friar lands may be legally
effective, it is necessary that a formal certificate of transfer be drawn up and
submitted to the Chief of the Bureau of Public Lands for his approval and
registration. The law authorizes no other way of transferring the rights of a
holder of a certificate of sale of friar lands. In other words, where a person
considered as a grantee of a piece of friar land transfers his rights thereon,
such transfer must conform to certain requirements of the law.
Under Director of Lands v. Rizal,[18] the purchaser in the sale of friar lands
under Act No. 1120 is already treated by law as the actual owner of the lot
purchased even before the payment of the full payment price and before the
execution of the final deed of conveyance, subject to the obligation to pay in
full the purchase price, the role or position of the Government becoming that
of a mere lien holder or mortgagee.[19]
 
Thus, pursuant to Section 16 of Act No. 1120,[20] had grantee Teofilo
Reterta perfected his title, the petitioners as his heirs would have succeeded
him and taken title from him upon his death. By law, therefore, should the
execution of the deed in favor of the respondents be held invalid, the interests
of Teofilo Reterta should descend to the petitioners and the deed should issue
in their favor. Adding significance to the petitioners claim was their
allegation in the complaint that they were in possession of the land.

Moreover, as alleged in the petitioners opposition to the motion to dismiss of
the respondents, Teofilo Reterta had partially paid the price of the land.[21]
 
Given the foregoing, the petitioners complaint made out a good case
for reconveyance or reversion, and its allegations, if duly established, might
well warrant the reconveyance of the land from the respondents to the
petitioners. It did not matter that the respondents already held a certificate of
title in their names. In essence, an action for reconveyance respects the
incontrovertibility of the decree of registration but seeks the transfer of the
property to its rightful and legal owner on the ground of its having been
fraudulently or mistakenly registered in another persons name. There is no
special ground for an action for reconveyance, for it is enough that the
aggrieved party asserts a legal claim in the property superior to the claim of
the registered owner, and that the property has not yet passed to the hands of
an innocent purchaser for value.[22] On this score, it is also worthy to stress
that the title of a piece of a friar land obtained by a grantee from the
Government without conforming with the requirements set by the law may
be assailed and nullified.
Was the petitioners action for reconveyance within the jurisdiction of
the regular court?
 
We answer the query in the affirmative.
 
The law governing jurisdiction is Section 19 (2) of Batas Pambansa
Blg. 129,[23] as amended by Republic Act No. 7691,[24] which provides:
 
Section 19. Jurisdiction in Civil Cases. Regional
Trial Courts shall exercise exclusive original
jurisdiction: xxx
xxx
(2) In all civil actions which involve the title to,
or possession of, real property, or any interest
therein, where the assessed value of the property involved
exceeds Twenty thousand pesos (P20,000.00) or for civil
actions in Metro Manila, where such value exceeds Fifty
thousand pesos (P50,000.00) except actions for forcible
entry into and unlawful detainer of lands or buildings,
13
original jurisdiction over which is conferred upon the
Metropolitan Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts;
xxx
 
Conformably with the provision, because an action for
reconveyance or to remove a cloud on ones title involves the title to, or
possession of, real property, or any interest therein, exclusive original
jurisdiction over such action pertained to the RTC, unless the assessed value
of the property did not exceed P20,000.00 (in which instance the MTC
having territorial jurisdiction would have exclusive original jurisdiction).
Determinative of which regular court had jurisdiction would
be the allegations of the complaint (on the assessed value of the property)
and the principal relief thereby sought.[25]
 
The respondents reliance on Section 12 and Section 18 of Act No.
1120 to sustain their position that the Bureau of Public Lands (now LMB)
instead had exclusive jurisdiction was without basis. The provisions read:
Section 12. xxx the Chief of the Bureau of Public Lands
shall give the said settler and occupant a certificate which
shall set forth in detail that the Government has agreed to
sell to such settler and occupant the amount of land so held
by him, at the price so fixed, payable as provided in this Act
at the office of the Chief of Bureau of Public Lands xxx and
that upon the payment of the final installment together with
all accrued interest the Government will convey to such
settler and occupant the said land so held by him by proper
instrument of conveyance, which shall be issued and become
effective in the manner provided in section one hundred and
twenty-two of the Land Registration Act xxx.
 
Section 18. No lease or sale made by Chief of the
Bureau of Public Lands under the provisions of this Act shall
be valid until approved by the Secretary of the Interior.
 
 
 
 14

As the provisions indicate, the authority of LMB under Act No. 1120,

being limited to the administration and disposition of friar lands, did not [G.R. No. 141296. October 7, 2002]
include the petitioners action for reconveyance. LMB ceases to have
REPUBLIC OF THE PHILIPPINES, Represented by the Regional
jurisdiction once the friar land is disposed of in favor of a private person and
Executive Director, Region III, Department of
title duly issues in the latters name. By ignoring the petitioners showing of its
Environment and Natural Resources (DENR), petitioner,
plain error in dismissing Civil Case No. TM-983, and by disregarding the
vs. HEIRS OF AGUSTIN L. ANGELES, HEIRS OF CARMEN
allegations of the complaint, the RTC acted whimsically and capriciously.
DE LEON Vda. DE ANGELES, LUZ GANCAYCO ALVAREZ
 
and the REGISTER OF DEEDS of BALANGA,
Given all the foregoing, the RTC committed grave abuse of discretion
BATAAN, respondents.
amounting to lack of jurisdiction. The term grave abuse of
discretion connotes whimsical and capricious exercise of judgment as is
equivalent to excess, or lack of jurisdiction.[26] The abuse must be so patent DECISION
and gross as to amount to an evasion of a positive duty or to a virtual refusal PANGANIBAN, J.:
to perform a duty enjoined by law, or to act at all in contemplation of law as
where the power is exercised in an arbitrary and despotic manner by reason Elementary is the rule that prescription and laches will not bar actions
of passion or hostility.[27] filed by the State to recover its own property acquired through fraud by
  private individuals.
The dismissal of Civil Case No. TM-983, unless undone, would leave
the petitioners bereft of any remedy to protect their substantial rights or The Case
interests in the land. As such, they would suffer grave injustice and Before us is a Petition for Review on Certiorari[1] seeking to set aside the
irreparable damage. In that situation, the RTCs dismissal should be annulled Order[2] dated September 7, 1999, issued by the Regional Trial Court (RTC) of
through certiorari, for the task of the remedy was to do justice to the unjustly Balanga, Bataan in Civil Case No. 6789. The challenged Order granted, on the
aggrieved.[28] ground of prescription, herein respondents Motion to Dismiss petitioners
WHEREFORE, the Court grants the petition for certiorari; sets Complaint for Reversion.
aside the decision the Court of Appeals promulgated on April 25, 2003; and
directs Branch 23 of the Regional Trial Court in Trece Martires City to The decretal portion of the assailed Order reads as follows:
resume the proceedings in Civil Case No. TM-983 with dispatch.
  WHEREFORE, [being] meritorious, the [Motion to Dismiss] is hereby
The respondents shall pay the costs of suit. GRANTED and the instant complaint x x x DISMISSED.[3]
 
SO ORDERED. The Facts

The present proceedings spring from a Complaint[4] filed before the RTC

by the regional executive director of Region III of the Department of
Environment and Natural Resources (DENR). The Complaint was for the
reversion to the State of Lot No. 2744, Cadastral 241, Orion
Cadastre. Petitioners narration of the facts is as follows:

x x x x x x x x x
3. On July 30, 1963, the late Agustin L. Angeles filed his Free Patent
Application No. 7-1-2021 covering a parcel of land identified as Lot No. 2744,
Cad. 241, Orion Cadastre, situated in Capunitan, Orion, Bataan, and with an
area of 3,578 square meters.
4. By virtue of the said free patent application, Free Patent No. 265340 was
issued in favor of the late Agustin L. Angeles on February 24, 1964.
5. On the basis of said free patent, Original Certificate of Title No. 194 was
issued and registered in the name of the late Agustin L. Angeles.
The lot covered by OCT No. 194 is more particularly described, as follows:
Lot No. 2744, Cad. 241 Beginning at a point marked 1 of Lot No. 2744 of Cad.
241, being S.85-04E, 481.83m. from BBM No. 1, Cad. 241; thence, N.04-
36W., 34-90 m. to point 2; N.11.08W., 84.40m. to point 3; N.66-27E.,
39.65m. to point 4; S.02-02W., 239.83m. to point 5; N.03-56W., 67.00m. to
point 6; N.06-04W., 39-65m. to point 1, point of beginning.
Containing an area of THREE THOUSAND FIVE HUNDRED AND
SEVENTY EIGHT (3,578) SQUARE METERS.
All points are marked on the ground by Old Points.
Bounded on the W., along Lines 1-2-3 by Lot 2107, Cad. 241; on the N., along
line 3-4 by Lot 2106, Cad. 241; on the E., along line 4-5 by Public Land; and
on SW., along line 5-6 by Lot 2105, Cad. 241; and along line 6-1 by Lot 2106,
Cad. 241.
x x x x x x x x x
6. On April 16, 1967, Agustin L. Angeles died.
x x x x x x x x x
15
7. It appears, however, that the late Agustin L. Angeles, prior to his death,
was able to transfer and convey in favor of his sister, Emilia L. Angeles (now
deceased) the one-half (1/2) northern portion of Lot No. 2744, by means of a
Deed of Absolute Sale that was postdated January 5, 1970, when Agustin L.
Angeles was already dead. x x x.
8. The postdating of the Deed of Absolute Sale to January 5, 1970, was
obviously done to evade the prohibition of any alienation or encumbrance of
the free patent within a period of five (5) years.
9. Then again, the late Emilia L. Angeles was able to transfer and convey, by
way of a Deed of Absolute Sale dated January 27, 1973, the same one-half
(1/2) northern portion in favor of her daughter, Luz Gancayco Alvarez.
x x x x x x x x x
10. TCT No. T-43712 was thereafter issued by the Register of Deeds who
registered the title of the lot, on the basis of a half-half share, in the names of
the late Agustin L. Angeles and Luz Gancayco Alvarez. x x x.
11. On November 19, 1976, the Samahang Nayon members and Barangay
members of Capunitan, Orion, Bataan, represented by Elvira E. Manabat
filed a Protest before the then Bureau of Lands.
12. Consequently, a series of land investigators and ocular inspections, with
notice to all concerned parties, were ordered to be conducted by the DENR
Regional Office over Free Patent No. 265340.
13. In a formal investigation conducted by the DENR, it was found out that:
a. the late Agustin L. Angeles or his predecessors-in-interest, have never
occupied nor cultivated Lot No. 2744 prior to and after the issuance of the
Free Patent in his name, the same having been in the actual and continuous
occupation by the members of the Samahang Nayon since the prewar days;
b. Lot No. 2744 is not an agricultural land but a residential land bordering
the shoreline of Manila Bay; and that.

c. the late Agustin L. Angeles conveyed the 1/2 northern portion of Lot No.
2744 during the prohibitory period of five (5) years or prior to his death in
favor of the late Emilia L. Angeles.
x x x x x x x x x[5]
Respondents version of the facts, on the other hand, is as follows:
2. Deceased Agustin L. Angeles filed his Free Patent Application No. 7-1-2021
covering a parcel of land identified as Lot No. 2744, Cad. 241, Orion
Cadastre, situated in Capunitan, Orion, Bataan, with an area of 3,578 square
meters on 30 July 1963. Thereafter, Free Patent No. 265340 was issued and
registered in his name on 24 February 1964.
2.1. Original Certificate of Title (OCT) No. 194 was issued which is registered
in the name of Agustin L. Angeles based on said Free Patent. x x x
2.2 Before he died, Agustin L. Angeles was able to sell, transfer and convey in
favor of his sister, Emilia L. Angeles, the one-half (1/2) northern portion of
Lot No. 2744 for and in consideration of ONE THOUSAND PESOS
(P1,000.00) by means of a Deed of Absolute Sale dated 5 January 1970. x x x
2.3 Thereafter, Emilia L. Angeles was able to sell, transfer and convey, by way
of Deed of Absolute Sale dated 27 January 1973 the same one-half (1/2)
northern portion of Lot 2744 in favor of respondent Luz Gancayco-Alvarez,
her daughter for and in consideration of ONE THOUSAND FIVE HUNDRED
PESOS (P1,500.00). x x x
2.4 By virtue of said Deed of Absolute Sale, Transfer Certificate of Title (TCT)
No. T-43712 was issued, registered and entered on 5 February 1973 in the
name of respondent Luz-Gancayco Alvarez and the late Agustin L. Angeles by
the Register of Deeds of Bataan. Copy of the TCT No. T-43712 is attached
as Annex 4 to the Motion to Dismiss.
2.5. Since the issuance of the Free Patent, the late Agustin L. Angeles and
thereafter his heirs, enjoyed open, peaceful, exclusive and continuous
possession and exercised and continued to exercise all the attributes of
16
ownership over Lot 2744. In the same vein, respondent Luz Gancayco-
Angeles, since the time of the deed of conveyance to her of the one-half (1/2)
northern portion of Lot 2744, enjoyed the same open, peaceful, exclusive and
continuous possession of the property and has exercised and continued to
exercise all attributes of ownership over said one-half (1/2) portion.
2.6. On 20 May 1998, the complaint for reversion of Lot 2744 was filed by
herein petitioner, more than thirty-four (34) years after the grant and
issuance of the Free Patent in favor of the late Agustin L. Angeles and more
than twenty-eight (28) years from the time Agustin L. Angeles sold one-half
of the property to his sister, Emilia L. Angeles.[6]
On April 20, 1999, Respondent Luz Gancayco Alvarez filed a Motion to
Dismiss,[7] alleging therein that petitioners cause of action had been barred by
the statute of limitations and should therefore be deemed abandoned. On
May 20, 1999, Respondents Heirs of Agustin L. Angeles and Heirs of Carmen
de Leon vda. de Angeles filed an Ex Parte Manifestation and
Motion[8] adopting the Motion to Dismiss filed by Alvarez.
The Lower Courts Ruling
Agreeing with private respondents, the court a quo held that the States
cause of action had prescribed, because the Complaint had been filed beyond
the prescriptive period of four years from the issuance of the Original
Certificate of Title (OCT). The RTC further ruled that Respondent Alvarez
was an innocent purchaser for value; her title, being already indefeasible,
could therefore no longer be revoked or cancelled.[9]
Hence, this Petition.[10]
The Issue
In its Memorandum, petitioner urges the Court to resolve the following
question:
Whether or not the trial court committed a grave error of law in dismissing
the complaint for reversion on the ground of prescription.[11]

The Courts Ruling
The Petition is meritorious.
Main Issue
Does Prescription Run Against the State?
In its assailed Order, the court a quo relied on Esconde v. Barlongay,
[12]
 which held that an action for reconveyance based on fraud must be filed
within four years from the discovery of its cause. Such discovery shall be
deemed to have taken place from the issuance of the OCT.
We hold, however, that Esconde is inapplicable to the present
appeal. That case involved an action for reconveyance, a legal and equitable
remedy granted to the rightful owner of land that has been wrongfully or
erroneously registered in the name of another. The purpose of reconveyance
is to compel a person, under whose name the property was wrongfully
registered, to transfer or reconvey it to the rightful owner.[13] Note that
in Esconde, the Complaint for Reconveyance was filed by a private
individual. Furthermore, the property therein had long been the subject of
ordinary land registration and did not involve public land.
On the other hand, the instant case involves a reversion sought by the
State through the Office of the Solicitor General. Petitioners Complaint for
Reversion primarily seeks the cancellation of the illegally obtained free
patent and certificate of title, as well as the consequent reversion of the
subject land which was originally public in character. In a reconveyance filed
by a private individual, the property does not go back to the State.[14] Clearly
then, the facts and the issues in Esconde differ from those obtaining in the
present case.
True, a title issued on the basis of a free patent is as indefeasible as one
judicially secured.[15] However, this indefeasibility cannot be a bar to an
investigation by the State as to how such title has been acquired, if the
purpose of the investigation is to determine whether or not fraud has been
committed in securing the title.[16] One who succeeds in fraudulently
acquiring title to public land should not be allowed to benefit from it.[17]
17
Elementary is the rule that prescription does not run against the State
and its subdivisions.[18] When the government is the real party in interest, and
it is proceeding mainly to assert its own right to recover its own property,
there can as a rule be no defense grounded on laches or prescription.
[19]
 Public land fraudulently included in patents or certificates of title may be
recovered or reverted to the State in accordance with Section 101 of the
Public Land Act. The right of reversion or reconveyance to the State is not
barred by prescription.[20]
Respondents allege that based on Article 1113[21] of the Civil Code,
patrimonial property of the State may be the subject of
prescription. However, the question of whether the land is agricultural,
residential, or patrimonial in character is one of fact, which should be
threshed out during the trial. Hence, the applicability of Ramirez v. Court of
Appeals[22] and the commentaries of Sen. Arturo M. Tolentino on this point
cannot be ruled upon now. The same is true with regard to the question of
whether Gancayco-Alvarez is an innocent purchaser for value. The only issue
that can be decided now is legal: whether prescription may as a rule run
against the State.
WHEREFORE, the Petition is GRANTED and the assailed Order SET
ASIDE. The Regional Trial Court of Bataan is DIRECTED to hear Civil Case
No. 6789 on the merits, with all reasonable speed. No costs.
SO ORDERED.
[G.R. No. 157536. May 16, 2005]
MELCHOR CARO, petitioner, vs. SUSANA
SUCALDITO, respondent.
DECISION
CALLEJO, SR., J.:
This is a petition for review on certiorari under Rule 45 of the Rules of
Court, assailing the Decision[1] of the Court of Appeals (CA) in CA-G.R. CV
No. 45503, affirming the dismissal of Civil Case No. 15529 by the Regional

Trial Court (RTC) of Iloilo City, Branch 39, as well as the resolution denying
the motion for reconsideration thereof.
The antecedent facts are as follows:
Gregorio Caro bought a parcel of land known as Assessors Lot No. 160
from Ruperto Gepilano as evidenced by a Deed of Sale[2] dated October 21,
1953. The said lot was situated in Sitio Bangyan, Barrio Calaya, Municipality
of Nueva Valencia, Iloilo City, consisting more or less of 17.9849 hectares.
Thereafter, Gregorio Caro sold a portion of the said lot to his son Melchor
Caro, consisting of 70,124 square meters, and now identified as Lot No. 4512
of the Cadastral survey of Nueva Valencia, Pls-775. Father and son executed a
Deed of Definite Sale[3] dated January 31, 1973 covering Lot No. 4512.
On August 1, 1974, Melchor Caro applied for a free patent before the
Bureau of Lands, District Land Office No. 6-1, covering the said area of the
property which he bought from his father. The application was, however,
opposed by Deogracias de la Cruz. On November 6, 1980, the Regional
Director rendered a Decision[4] canceling the said application, thusly:
This is a claim of Deogracias de la Cruz to Lot No. 4512, Pls-775 of Calaya,
Nueva Valencia, Guimaras, covered by the above-noted application of
Melchor Caro.
In the investigation, respondent claims preferential rights over the land as he
acquired it through sale from his father Gregorio Caro who had likewise
bought the land from Ruperto Cepellano (sic) in 1953. On the other hand,
protestant De la Cruz testified that the land in controversy was bought by him
from Cipriano Gallego in 1965; that he thereafter occupied, possessed and
improved the land by planting coconut trees; and that in 1968 he was forcibly
driven out by Gregorio Caro from the land in question.
Verification of the records disclosed that the land which was actually sold to
Gregorio Caro by Ruperto Gepellano (sic) is Assessors Lot No. 160. The
description and physical identity of Lot No. 160 is basically different and
distinct from Lot No. 4512, the land in question. This could be clearly seen in
the Certified True Copy of the Sketch Plan from the Assessors Office of
Assessors Lot No. 160 and the Sketch Plan marked as Exhibit 9 of the
Respondent-Applicant. It has been established that Assessors Lot No. 160
18
corresponds to Lot No. 4511 and not Lot No. 4512 claimed by the protestant.
Moreover, Ruperto Cepellano (sic) in his affidavit testified that what he sold
to Gregorio Caro is a land distinct and different from the land in question.
IN VIEW OF THE FOREGOING FINDINGS, it is ordered that the F.P.A. No.
(VI-1)8548 of applicant-respondent Melchor Caro be, as hereby it is,
cancelled. Protestant Deogracias de la Cruz if qualified, is given one hundred
twenty (120) days from the finality of this decision to file an appropriate
public land application otherwise he shall lose his preferential right thereto.
SO ORDERED.[5]
Caro filed a notice of appeal before the Regional Land Office in Iloilo
City, docketed as MNR Case No. 5207. However, the appeal was dismissed in
an Order[6] dated June 29, 1982, on the ground of failure to file an appeal
memorandum within the reglementary period therefor.
On August 29, 1982, Susana R. Sucaldito, as the buyer of Lot No. 4512,
filed an Application for a Free Patent[7] covering the said lot, and was issued
Free Patent No. 597599. Consequently, the Register of Deeds of Iloilo City
issued Original Certificate of Title (OCT) No. F-27162 in her favor. Sucaldito
then filed a Petition for Writ of Possession [8] before the RTC of Iloilo City,
which was granted in an Order[9] dated May 7, 1984.
Thereafter, on February 20, 1984, Caro filed a Complaint[10] against
Sucaldito for Annulment of Title, Decision, Free Patent and/or Recovery of
Ownership and/or Possession with Damages before the RTC of Iloilo City. He
later filed an amended complaint,[11] alleging that he was the owner of the
subject lot, and had been in possession of the same since 1953 and/or even
prior thereto in the concept of owner, adversely, openly, continuously and
notoriously. He further alleged that the said lot had been declared for tax
purposes in his name and that of his predecessors-in-interest, and that the
corresponding land taxes had been paid therefor. He claimed that Assessors
Lot No. 160 had actually been divided into two lots, namely, Lot No. 4511 and
Lot No. 4512; Sucaldito had actually been claiming Lot No. 989 (Lot No.
4512), which was located two kilometers away. He lamented that despite the
overwhelming evidence proving his ownership and possession of the said
property, the Bureau of Lands did not award it to him.

Caro further alleged that since the issuance of the free patent over the
subject lot in favor of Sucaldito was wrongful and fraudulent, she had no
right whatsoever over the subject lot. Hence, as a trustee of a constructive
trust, she was obliged to return the same to him as the lawful owner. The
complaint contained the following prayer:
WHEREFORE, it is prayed that judgment be rendered:
1. Ordering the annulment and voiding of the decision of the Bureau of
Lands, the free patent and the Original Certificate of Title No. F-27162 or in
the alternative;
2. Ordering defendant to reconvey the ownership and in the event she wrests
possession from plaintiff then, also the possession of Lot 4512 PLS-775 of
Nueva Valencia, Guimaras Cadastre, back to plaintiff;
3. Declaring plaintiff as the lawful owner and possessor of Lot 4512 PLS-775
of Nueva Valencia, Guimaras Cadastre and ordering the issuance of a free
patent or a torrens title in favor of plaintiff;
4. Ordering defendant to pay the plaintiff P50,000.00 as moral
damages, P2,000.00 as attorneys fees and P2,000.00 as expenses on
litigation plus exemplary damages in an amount at the discretion of this
Court.
Plaintiff further prays for such other relief just and equitable in the premises.
[12]
In her answer with counterclaim, Sucaldito interposed, as a special
affirmative defense, the fact that she intervened in the proceedings on Caros
application for a free patent over Lot No. 4512 before the Bureau of Lands
having bought the subject land from De la Cruz. Moreover, contrary to the
allegations of the petitioner, Lot No. 989 and Lot No. 4512 were one and the
same lot, as per the findings of the Bureau of Lands.
The parties thereafter presented evidence to prove their respective
claims. In a Decision[13] dated December 7, 1993, the trial court ruled in favor
19
of the respondent and dismissed the petitioners complaint. The dispositive
portion reads:
WHEREFORE, premises considered, the complaint filed by plaintiff is
dismissed. The counterclaim of defendant which is merely the result of the
filing of the complaint, is likewise dismissed.
Costs against the plaintiff.
SO ORDERED.[14]
Citing the case of Maximo v. Court of First Instance of Capiz, Br. III,
[15]
 the trial court ruled that Caro had no personality to file the action for the
annulment of the free patent issued in favor of Sucaldito, which could only be
brought by the Solicitor General. It held that an applicant for a free patent
who is not the owner of a parcel of land cannot bring an action in court to
recover the land, for the court may not usurp the authority of the Director of
Lands and the Secretary of Agriculture to dispose lands of the public domain
through administrative proceedings under the Public Land Act,[16] or
Commonwealth Act No. 141, as amended. The trial court further stressed that
the remedy of a rival-applicant for a free patent over the same land was
through administrative channels, not judicial, because even if the oppositor
succeeds in annulling the title of the applicant, the former does not thereby
become the owner of the land in dispute.[17]
The trial court also declared that contrary to Caros claims, the evidence
clearly showed that Lot No. 4512, with an area of 70,677 square meters, was
not included in Assessors Lot No. 160, thus:
Assessors Lot 160 is Cadastral Lot 4511, which has an original area of around
17 hectares, more or less, later on, increased to 21 hectares. If we add Lot
4512 to Lot 4511 following the contention of the plaintiff, then the area would
be more than 28 hectares. Thus, belying the claim of plaintiff that Lot 4512
was formerly a part of Assessors Lot 160.
The contention of the plaintiff that the defendant is claiming Lot 989 which is
owned by Felix Galabo and located at Brgy. Olacon, is not well taken, because
the identification of the lot as stated in the tax declaration is not binding and

conclusive. What is binding and conclusive is what is stated in the title of the
land and its technical description. In the technical description as found in the
title of the defendant [Sucaldito], it is clearly stated therein that the lot is Lot
4512 and is located at Brgy. Calaya and not Brgy. Olacon, Nueva Valencia,
Guimaras.[18]
Aggrieved by the trial courts ruling, Caro elevated the case to the CA on
the following grounds:
I
THE COURT A QUO ERRED IN RULING THAT PLAINTIFF HAS NO
PERSONALITY TO BRING THE ACTION;
II
THE COURT A QUO ERRED IN RULING THAT EVEN IF THE PLANTIFF
HAS THE PERSONALITY TO BRING THE ACTION STILL HE CANNOT
RECOVER THE LOT IN QUESTION, CAD. LOT NO. 4512;
III
THE COURT ERRED IN NOT ORDERING THE DEFENDANT TO
RECONVEY THE LAND IN QUESTION TO PLAINTIFF AND TO PAY
DAMAGES.[19]
The CA dismissed the petition in its Decision [20] dated July 31, 2002. The
appellate court agreed with the ruling of the RTC that the petitioner had no
personality to file the action under Section 101 of Commonwealth Act No.
141, considering further that he was a mere applicant for a free patent. Citing
several cases,[21] the appellate court ruled that the findings of fact made by
administrative agencies which are supported by substantial evidence must be
respected, particularly where the question demands the exercise of sound
administrative discretion requiring special knowledge and experience.[22]
Caro filed a motion for reconsideration of the said decision, which the
appellate court denied in a Resolution[23] dated February 7, 2003.
20
Caro, now the petitioner, assails the ruling of the appellate court on the
following grounds:
THAT THE HONORABLE APPELLATE COURT COMMITTED AN ERROR
IN HOLDING THAT PETITIONER HAS NO LEGAL PERSONALITY TO
FILE THIS ACTION;
THAT THE HONORABLE APPELLATE COURT ERRED IN DISMISSING
THE APPEAL INTERPOSED BY PETITIONER ON THE GROUND THAT
ONLY THE SOLICITOR GENERAL CAN FILE AN ACTION FOR
RECONVEYANCE OF PROPERTY ACQUIRED BY PATENT.[24]
The petitioner insists that contrary to the ruling of the CA, he has the
legal personality to bring and institute the present action against the
respondent, considering that title issued on the basis of a patent is annullable
on the ground of fraud. Furthermore, the one-year period within which to file
an action to cancel a torrens title under Section 32 of Presidential Decree No.
1529 does not apply where the registered owner, or the successor-in-interest,
knew that the property described in the title actually belongs to another, as in
this case. The petitioner cites Vital v. Anore, et al.[25] to bolster his claim. The
petitioner also cites Director of Lands v. Abanilla[26] where the Court stressed
that any false statement in the application, which is an essential condition of
the patent or title under Section 91 of Commonwealth Act No. 141, shall ipso
facto produce the cancellation of the concession, title or permit granted.
In her comment, the respondent points out that the decision of the
Bureau of Lands itself would show that the petitioner is not the true and
lawful owner of the subject lot; as such, the argument that he has the legal
personality to file the action for annulment of patent based on constructive
trust is untenable. The respondent further contends that the CA did not err in
upholding the ruling of the RTC.
The petitioner merely reiterated his previous arguments in his Reply
dated December 30, 2003.
The Court agrees with the ruling of the RTC and the CA, and holds that
the petitioner has no personality to file a suit for reconveyance of the subject
property.

The Court notes that the petitioners complaint before the RTC prays for
the annulment of the free patent issued in the respondents favor. Considering
that the ultimate relief sought is for the respondent to return the subject
property to him, it is in reality an action for reconveyance. In De Guzman v.
Court of Appeals,[27] the Court held that [t]he essence of an action for
reconveyance is that the decree of registration is respected as
incontrovertible but what is sought instead is the transfer of the property
which has been wrongfully or erroneously registered in another persons
name, to its rightful owner or to one with a better right.[28] Indeed, in an
action for reconveyance filed by a private individual, the property does not go
back to the State.[29]
Reversion, on the other hand, is an action where the ultimate relief
sought is to revert the land back to the government under the Regalian
doctrine. Considering that the land subject of the action originated from a
grant by the government, its cancellation is a matter between the grantor and
the grantee.[30]
Under Section 2, Rule 3 of the Rules of Court,[31] every action must be
prosecuted or defended in the name of the real party-in-interest, or one who
stands to be benefited or injured by the judgment in the suit. Corollarily, legal
standing has been defined as a personal and substantial interest in the case,
such that the party has sustained or will sustain direct injury as a result of the
challenged act. Interest means a material interest in issue that is affected by
the questioned act or instrument, as distinguished from a mere incidental
interest in the question involved.[32]
Clearly then, a suit filed by one who is not a party-in-interest must be
dismissed. In this case, the petitioner, not being the owner of the disputed
property but a mere applicant for a free patent, cannot thus be considered as
a party-in-interest with personality to file an action for reconveyance. The
Court, citing several of its holdings, expounded on this doctrine in Tankiko v.
Cezar[33] as follows:
Thus, in Lucas v. Durian [102 Phil. 1157 (1957)], the Court affirmed the
dismissal of a Complaint filed by a party who alleged that the patent was
obtained by fraudulent means and, consequently, prayed for the annulment
of said patent and the cancellation of a certificate of title. The Court declared
that the proper party to bring the action was the government, to which the
21
property would revert. Likewise affirming the dismissal of a Complaint for
failure to state a cause of action, the Court in Nebrada v. Heirs of Alivio [104
Phil. 126 (1958)] noted that the plaintiff, being a mere homestead applicant,
was not the real party-in-interest to institute an action for reconveyance.
...
Verily, the Court stressed that [i]f the suit is not brought in the name of or
against the real party-in-interest, a motion to dismiss may be filed on the
ground that the complaint states no cause of action [Travel Wide v. CA, 199
SCRA 205, 209 (1991), per Cruz, J. See also Suguister v. Tamayo, 176 SCRA
579, August 21, 1989]. In fact, a final judgment may be invalidated if the real
parties-in-interest are not included. This was underscored by the Court
in Arcelona v. CA [280 SCRA 20, October 2, 1997], in which a final judgment
was nullified because indispensable parties were not impleaded.
In the present dispute, only the State can file a suit for reconveyance of a
public land. Therefore, not being the owners of the land but mere applicants
for sales patents thereon, respondents have no personality to file the suit.
Neither will they be directly affected by the judgment in such suit.[34]
In De la Pea v. Court of Appeals,[35] the Court, in dismissing the
petitioners imputation of fraud in securing a free patent and title over a
parcel of land, declared that reconveyance is a remedy granted only to the
owner of the property alleged to be erroneously titled in anothers name.
[36]
 The Court further expounded:
Persons who have not obtained title to public lands could not question the
titles legally issued by the State [Reyes v. Rodriguez, 62 Phil. 771, 776
(1936)]. In such cases, the real party-in-interest is the Republic of the
Philippines to whom the property would revert if it is ever established, after
appropriate proceedings, that the free patent issued to the grantee is indeed
vulnerable to annulment on the ground that the grantee failed to comply with
the conditions imposed by the law. Not being an applicant, much less a
grantee, petitioner cannot ask for reconveyance.[37]

In VSC Commercial Enterprises, Inc. v. Court of Appeals,[38] where the
private respondents therein were mere lessees of the property in question,
the Court ruled that as mere lessees, they had no present substantial and
personal interest with respect to issues involving ownership of the disputed
property. The Court went on to declare:
The only interest they have, in the event the petitioners title over the subject
property is cancelled and ownership reverts to the State, is the hope that they
become qualified buyers of the subject parcel of land. Undoubtedly, such
interest is a mere expectancy. Even the private respondents themselves claim
that in case of reversion of ownership to the State, they only have pre-
emptive rights to buy the subject property; that their real interest over the
said property is contingent upon the governments consideration of their
application as buyers of the same. It is settled that a suit filed by a person
who is not a party-in-interest must be dismissed.[39]
In fact, Section 101 of Commonwealth Act No. 141 states
Section 101. All actions for the reversion to the government of lands of the
public domain or improvements thereon shall be instituted by the Solicitor
General or the officer acting in his stead, in the proper courts, in the name of
the Commonwealth [now Republic] of the Philippines.
This provision was applied and discussed in Sumail v. Judge of the
Court of First Instance of Cotabato, et al.,[40] a case on all fours with the
present one, as follows:
Under Section 101 of the above reproduced, only the Solicitor General or the
officer acting in his stead may bring the action for reversion. Consequently,
Sumail may not bring such action or any action which would have the effect
of cancelling a free patent and the corresponding certificate of title issued on
the basis thereof, with the result that the land covered thereby will again form
part of the public domain. Furthermore, there is another reason for
withholding legal personality from Sumail. He does not claim the land to be
his private property. In fact, by his application for a free patent, he had
formally acknowledged and recognized the land to be a part of the public
domain; this, aside from the declaration made by the cadastral court that lot
22
3633 was public land. Consequently, even if the parcel were declared reverted
to the public domain, Sumail does not automatically become the owner
thereof. He is a mere public land applicant like others who may apply for the
same.
To reiterate, the petitioner is not the proper party to file an action for
reconveyance that would result in the reversion of the land to the
government.[41] The petitioner has no personality to recover the property as
he has not shown that he is the rightful owner thereof.[42]
WHEREFORE, premises considered, the petition is DENIED for lack
of merit. The Decision of the Court of Appeals in CA-G.R. CV No. 45503 and
the Resolution dated February 7, 2003 are AFFIRMED.
SO ORDERED.
[G.R. No. 125728. August 28, 2001]
MARIA ALVAREZ VDA. DE DELGADO, CATALINA C. DELGADO,
NATIVIDAD D. CLUTARIO, ANTONIA DELGADO,
FLORINTINO DELGADO, PACIENCIA D. CAZORLA,
GLORIA D. SOTIANGCO, JOSE DELGADO, JR., MARLENE
D. SENNER, JOEL DELGADO, MARISSA DELGADO, JESUS
DELGADO, JANICE DELGADO, VICTORINO DELGADO,
and JUAN DELGADO, petitioners, vs. HON. COURT OF
APPEALS and REPUBLIC OF THE
PHILIPPINES, respondents.
DECISION
QUISUMBING, J.:
This petition assails the decision[1] of the Court of Appeals in CA-G.R. CV
No. 36923 dated June 14, 1996, which reversed the decision [2] of the Regional
Trial Court, of Catarman, Northern Samar, Branch 19, in a case originally
involving reconveyance of property with damages between the Delgado
family members as plaintiffs and the Republic of the Philippines as
defendant.

The following facts appear on the record:
During his lifetime, Carlos Delgado was the absolute owner of a parcel of
land with an area of 692,549 square meters, situated in the Municipality of
Catarman, Samar. On October 5, 1936, said Carlos Delgado granted and
conveyed, by way of donation or gift with quitclaim, all his rights, title,
interest, claim and demand over a portion of said land consisting of 165,000
square meters in favor of the Commonwealth of the Philippines or its
successors. Acceptance[3] was made by then President Manuel L. Quezon in
his capacity as Commander-in-Chief of the Philippine Army.[4]
The Deed of Donation[5] states as reason or consideration the donors
desire to contribute to the formation of the National Defense of the
Philippines. It contained the following condition:
The condition of this donation is, that the parcel of land above described shall
be for the exclusive benefit of the Commonwealth of the Philippines to be
used as military reservation for training cadres or for such other uses of the
Philippine Army as the Commander-in-Chief or Chief of Staff thereof may
determine, provided that when the Commonwealth of the Philippines no
longer needs this parcel of land for any military purposes, then said land shall
automatically revert to the donor or its heirs or assigns.[6]
The donee promptly occupied the donated land and constructed
buildings thereon for military purposes, such as a military training campsite.
Further, after entering into physical possession of the land and making the
said improvements, the donee caused the property and several others
similarly donated to it[7] to be surveyed, with a view to having them all
brought under the operation of the Torrens system and registered in the
name of the Commonwealth of the Philippines.
Upon approval of the application for registration with the Court of First
Instance of Samar, the parcels of land donated by Carlos Delgado (165,000
sq. m.), Visitacion Diaz (8,220 sq. m.) and Leona Balite (10,080 sq. m.),
containing a total of 183,300 square meters in all, became identified as Lot
No. 1, Plan Ps1-9. But said Lot No. 1 showed an area of 216,907 square
meters, apparently with an excess of 33,607 square meters from the total
area of the parcels actually donated. Such apparent excess came allegedly
from the neighboring parcels of land also owned by Carlos Delgado.
23
On February 6, 1939, the CFI of Samar decreed that on the basis of more
than forty years of quiet, peaceful and continuous possession by the donors
and their donee, and after finding a general default of opposition to the
application for registration, the aforesaid parcels of land as well as the
improvements thereon, were to be registered in the name of the
Commonwealth of the Philippines as absolute owner thereof.
Pursuant to the CFI order, Original Certificate of Title No. 2539 was
issued by the Register of Deeds on September 9, 1939, covering among other
parcels the aforesaid Lot No. 1, Plan Ps1-9. The OCT contained an annotation
of the express condition attached to the land donated by Carlos Delgado.
Subsequently, said OCT was later cancelled and replaced with Transfer
Certificate of Title No. (0-2539)-160. It appears, however, that said TCT did
not contain an annotation of the condition originally found in the Deed of
Donation.
Upon declaration of independence on July 4, 1946, the Commonwealth
of the Philippines passed out of existence. It was replaced by the existing
Republic of the Philippines, which took over the subject land and turned
portions of it over to the then Civil Aeronautics Administration (CAA), later
renamed Bureau of Air Transportation Office (ATO). Said government
agency has since utilized the land in question, or portions of it as a domestic
national airport, with some portions rented to the Philippine Airlines, and
some to the provincial government for a capitol site and a hospital site, and
for some other uses which clearly are not military in nature.
A petition for reconveyance was filed on December 25, 1970, alleging as
ground therefor the violation of the express condition imposed by the donor.
It was also during this time that Jose Delgado, brother and lone heir of the
donor, Carlos,[8] obtained a court order dated March 15, 1971, directing the
insertion of the automatic reversion clause as an annotation in the TCT.
Due to the plaintiffs failure to prosecute, the case for reconveyance was
eventually dismissed by the lower court without prejudice on September 26,
1983.
Sometime in early 1989, the heirs of Jose Delgado sent letters [9] to the
different agencies occupying the subject property, inviting their attention to
the donation and the violation of the condition imposed therein. No

settlement or understanding was reached, such that on September 28, 1989,
the widow and surviving heirs of Jose Delgado filed a new action for
reconveyance with the RTC of Catarman, Northern Samar, Branch 19,
docketed as Civil Case No. C-489.
On March 8, 1990, an Amended Complaint was filed wherein plaintiffs
prayed for reconveyance of the donated parcel of land based on the following
reasons:
a) That there was non-compliance by the donee of the condition
imposed in the deed of donation;
b) That assuming there was compliance, the donation became
inoperative when the donee, the then Commonwealth of the
Philippines, passed out of existence on July 4, 1946, with the
birth of the Republic of the Philippines, making the donation
inoperative and the land subject thereof automatically reverted
to the donor or his heirs;
c) That in the event the court declares the donation to have
subsisted, the excess of 33,607 square meters, over and above
the 165,000 square meters donated by Carlos Delgado, should
be declared to have been unlawfully included and registered in
the name of the Commonwealth of the Philippines and is now in
the possession of the Republic of the Philippines. They pray for
the reconveyance of such excess, or in the alternative, to declare
that portion to have been expropriated, entitling them to just
compensation; and
d) That the Republic should be declared a possessor in bad faith
and therefore liable to the petitioners for the fruits received or
could have been received from the use and occupation of the
land. They likewise pray for actual and compensatory damages
as well as attorneys fees.
In answer to the complaint, respondent Republic of the Philippines
contends that the heirs have no cause of action and even denied knowledge of
such donation, having no record thereof in its possession. It continually
asserts government ownership over the property in dispute.
24
Assuming arguendo that indeed there was such a donation, the Republic
interposed these defenses:
1.) That defendant (Republic) as successor-in-interest of the
Commonwealth of the Philippines thereby succeeded to all the
rights, titles and interests of the latter with respect to the
property in question; that the said donation continued to be
operative and no automatic reversion occurred;
2.) That granting there was a violation of the condition, the action
for reconveyance is already barred by laches, waiver and/or
prescription; and
3.) That the suit is one against the state or the government which is
immune from suit, and no consent was given by the latter to be
sued.
The RTC ruled in favor of the petitioners herein and disposed of the case
as follows:
WHEREFORE, judgment is hereby rendered:
a.) Ordering the defendant to reconvey in favor of the plaintiffs the
ownership and possession of the portions of the land in question
designated as Lots Nos. 1-A, 1-B, 1-C, 1-E, 1-G, 1-H and 1-I in the
commissioners report;
b.) Declaring that portions designated as Lots 1-O, 1-J and 1-K
deemed expropriated as of 1966 by the defendant and to pay
just compensation therefor with interest thereon at the legal
rate commencing from December 29, 1970, the date of filing of
Civil Case No. C-504 (Exh. X), until fully paid; and
c.) Ordering the defendant to pay plaintiffs the amounts of
P10,000.00 and P5,000.00 as reimbursement for attorneys fee
and other litigation expenses, respectively, and to pay the costs
hereof.
SO ORDERED.

On appeal to the Court of Appeals, the RTC ruling was reversed and set
aside. Hence, this petition for review, wherein the following are assigned by
petitioners as errors committed by the respondent court:
I. THE RESPONDENT COURT SERIOUSLY ERRED WITH GRAVE ABUSE
OF DISCRETION IN HOLDING THAT THE AUTOMATIC REVERSION
CLAUSE CONDITION EXPRESSLY CONTAINED IN THE DEED OF
DONATION AND AS ACCEPTED BY THE DONEE, IS NOT
IMPRESCRIPTIBLE;
II. THE RESPONDENT COURT SERIOUSLY ERRED WITH GRAVE ABUSE
OF DISCRETION IN NOT HOLDING THAT THE PORTION NOW
OCCUPIED BY THE PHILIPPINE ARMY DESIGNATED AS LOT 1-M IN
EXHS. V AND V-1 WITH AN AREA OF 89,959 SQUARE METERS, SHALL
REMAIN IN THE POSSESSION AND USE OF THE PHILIPPINE ARMY;
III. THE RESPONDENT COURT SERIOUSLY ERRED WITH GRAVE
ABUSE OF DISCRETION IN NOT DECIDING THAT LOTS 1-A, 1-B, 1-C
AND 1-D AS DESIGNATED IN EXHS. V AND V-1 CONTAINING A TOTAL
AREA OF 19,781 SQUARE METERS, HAVE BEEN EXPROPRIATED DE
FACTO FOR PUBLIC USE FOR WHICH PETITIONERS ARE ENTITLED TO
JUST COMPENSATION;
IV. THE RESPONDENT COURT SERIOUSLY ERRED WITH GRAVE ABUSE
OF DISCRETION IN NOT DECIDING THAT LOT 1-J WITH AN AREA OF
845 SQUARE METERS; LOT 1-K WITH AN AREA OF 739 SQUARE
METERS; AND 1-O WITH AN AREA OF 59,408 SQUARE METERS AS
DESIGNATED IN EXHS. V AND V-1, HAVE BEEN EXPROPRIATED DE
FACTO FOR PUBLIC USE FOR WHICH PETITIONERS ARE ENTITLED TO
JUST COMPENSATION;
V. THE RESPONDENT COURT SERIOUSLY ERRED WITH GRAVE ABUSE
OF DISCRETION IN NOT DECIDING THAT LOTS 1-E, 1-G, 1-H, 1-I, AS
DESIGNATED IN EXHS. V AND V-1 WITH A TOTAL AREA OF 30,575
SQUARE METERS, HAVE TO BE RECONVEYED BY RESPONDENT
REPUBLIC OF THE PHILIPPINES TO THE PETITIONERS; AND
25
VI. THE RESPONDENT COURT SERIOUSLY ERRED WITH GRAVE ABUSE
OF DISCRETION IN NOT AWARDING TO PETITIONERS ATTORNEYS
FEES, LITIGATION EXPENSES AND COST OF SUIT.[10]
The main issue to be resolved by this Court now is whether or not the
petitioners action for reconveyance is already barred by prescription. From a
resolution of this issue will proceed the proper adjudication of the rights of
the parties to the subject land, including any right to just compensation,
damages and other fees.
At the outset, we find that the case of Roman Catholic Archbishop of
Manila vs. Court of Appeals, 198 SCRA 300 (1991), provides a precedent in
the resolution of the issue at hand. It involved a donation by the Eusebio
spouses as private respondents therein, of a parcel of land, with an express
provision for automatic reversion of the donated property in case of a
violation of the condition therein. This Court held that from parity of reasons,
the rules governing onerous donations are applicable to donations with a
resolutory condition.[11] Although automatic reversion immediately happens
upon a violation of the condition and therefore no judicial action is necessary
for such purpose, still judicial intervention must be sought by the aggrieved
party if only for the purpose of determining the propriety of the rescission
made.[12]
Applying Article 1144 (1) of the Civil Code on prescription of actions
based on a written contract,[13] the petitioners herein should have instituted
the action for reconveyance within 10 years from the time the condition in
the Deed of Donation was violated. The earliest date the petitioners knew of
the said violation of said condition was on July 4, 1946, when the Republic,
as successor of the Commonwealth of the Philippines, took over the
properties and diverted the property to uses other than that imposed by the
donor. As found by the Court of Appeals, the cause of action of the petitioners
has clearly prescribed,[14] having instituted the action for reconveyance only
on December 29, 1970, or 24 years after the condition was violated. Said
action was dismissed by the trial court on September 26, 1983 for failure of
petitioners to prosecute the case. The institution of a new action for
reconveyance made on September 28, 1989, does not alter respondent courts
conclusion but in fact bolsters it, for by then, a total of 43 long years were
allowed by petitioners to lapse before instituting the case at bar.
 26

Even if the written communication sent by petitioners sometime in having been resolved, the other issues raised by petitioners no longer need
January 1969[15] and those made on February 10 and March 16, 1989 can be elaboration for patent lack of merit.
considered as written extrajudicial demands made by the creditors, they were
WHEREFORE, the petition for review is DENIED and the appealed
nevertheless made way beyond the ten-year period of prescription stated in
decision of the Court of Appeals in CA-G.R. CV No. 36923, dated June 14,
the law.
1996, is hereby AFFIRMED. No pronouncement as to costs.
With regard to the alleged excess of 33,607 square meters mistakenly
SO ORDERED.
included in the Original Certificate of Title, we also find in order the ruling of
the Court of Appeals that the action for its reconveyance has likewise
prescribed. HEIRS OF VALERIANO S. CONCHA, G.R. No. 158121
SR. NAMELY: TERESITA CONCHA-
Article 1456 of the Civil code states, If property is acquired through
PARAN, VALERIANO P. CONCHA,
mistake or fraud, the person obtaining it is, by force of law, considered a
JR., RAMON P. CONCHA, EDUARDO
trustee of an implied trust for the benefit of the person from whom the
P. CONCHA, REPRESENTED BY HIS
property comes. In the case of Bueno vs. Reyes, G.R. No. L-22587, 27 SCRA
LEGAL GUARDIAN, REYNALDO P.
1179, 1183 (1969), we held that registration of property by one person in his
CONCHA, ALBERTO P. CONCHA,
name, whether by mistake or fraud, the real owner being another person,
BERNARDO P. CONCHA and GLORIA Present:
impresses upon the title so acquired the character of a constructive trust for
P. CONCHA-NUNAG,
the real owner, which would justify an action for reconveyance. However, it is
Petitioners, PUNO, C.J., Chairperson,
now well-settled that an action for reconveyance of registered land based on
YNARES-SANTIAGO,
an implied trust prescribes in ten years[16] and it is from the date of issuance
SANDOVAL-GUTIERREZ,
of such title that the effective assertion of adverse title for purposes of the
- versus - CORONA, and
statute of limitations is counted.[17]
AZCUNA, JJ.
Granting that in the present case, the said excess portion of petitioners SPOUSES GREGORIO J. LUMOCSO[1]
land was mistakenly registered in the name of the Commonwealth of the and BIENVENIDA GUYA, CRISTITA
Philippines on September 9, 1939, still petitioners were admittedly aware of J. LUMOCSO VDA. DE DAAN, AND
this fact. The issuance of the OCT on said date stating the total area included SPOUSES JACINTO J. LUMOCSO Promulgated:
should have apprised them, even constructively, that a portion of their land and BALBINA T. LUMOCSO,[2]
was mistakenly claimed by the donee, respondent Republics predecessor-in- Respondents. December 12, 2007
interest. Petitioners should have taken appropriate legal action seasonably,  
within the ten years prescriptive period. Since petitioners filed their action x--------------------------------------------------x
belatedly, we find that they have also lost any right to the aforesaid portion of  
land consisting of 33,607 square meters.
DECISION
For now, the causes of action which petitioners may have against the
respondent Republic, in our view, are already barred by prescription. PUNO, C.J.:
Extinctive prescription has set in in favor of the Republic, and it cannot now  
be sued based on the same causes of action. The main issue presented to us

On appeal by certiorari under Rule 45 of the Rules of Court are the 
decision[3] and resolution[4] of the Court of Appeals (CA) in CA-G.R. SP No.
59499, annulling the resolutions[5] and order[6] of the Regional Trial Court
(RTC) of Dipolog City, Branch 9, in Civil Case Nos. 5188, 5433 and 5434
which denied the separate motions to dismiss and Joint Motion for
Reconsideration filed by the respondents.
 
The relevant facts are undisputed.
Petitioners, heirs of spouses Dorotea and Valeriano Concha, Sr.,
claim to be the rightful owners of Lot No. 6195 (Civil Case No. 5188), a one-
hectare portion of Lot No. 6196-A (Civil Case No. 5433), and a one-hectare
portion of Lot Nos. 6196-B and 7529-A (Civil Case No. 5434), all situated in
Cogon, Dipolog City, under Section 48(b) of Commonwealth Act No. 141
(C.A. No. 141), otherwise known as the Public Land Act. Respondent
siblings Gregorio Lumocso (Civil Case No. 5188), Cristita Lumocso Vda. de
Daan (Civil Case No. 5433) and Jacinto Lumocso (Civil Case No. 5434), are
the patent holders and registered owners of the subject lots.
 
The records show that on August 6, 1997, Valeriano Sr.[7] and his
children, petitioners Valeriano Jr., Ramon, Eduardo, Alberto, Bernardo,
Teresita, Reynaldo, and Gloria, all surnamed Concha, filed a complaint for
Reconveyance and/or Annulment of Title with Damages against "Spouses
Gregorio Lomocso and Bienvenida Guya." They sought to annul Free Patent
No. (IX-8)985 and the corresponding Original Certificate of Title (OCT) No.
P-22556 issued in the name of "Gregorio Lumocso" covering Lot No.
6195. The case was raffled to the RTC of Dipolog City, Branch 9, and
docketed as Civil Case No. 5188. In their Amended Complaint, petitioners
prayed that judgment be rendered:
 
1.                Declaring Free Patent No. (IX-8)985 and
Original Certificate of Title No. 22556 issued to defendants
as null and void ab initio;
 
2.                Declaring Lot No. 6195 or 1.19122-
hectare as private property of the plaintiffs under Sec. 48(b)
of CA No. 141 otherwise known as the Public Land Act as
amended by RA 1942;
27
 
3.                Ordering the defendant Lomocsos to
reconvey the properties (sic) in question Lot No. 6195 or the
1.19122 hectares in favor of the plaintiffs within 30 days
from the finality of the decision in this case and if they
refuse, ordering the Clerk of Court of this Honorable Court
to execute the deed of reconveyance with like force and
effect as if executed by the defendant[s] themselves;
4.                Ordering defendant Lomocsos to
pay P60,000.00 for the 21 forest trees illegally
cut; P50,000.00 for moral damages; P20,000.00 for
Attorneys fees; P20,000.00 for litigation expenses; and to
pay the cost of the proceedings;
 
5.                Declaring the confiscated three (sic)
flitches kept in the area of the plaintiffs at Dampalan San
Jose, Dipolog with a total volume of 2000 board feet a[s]
property of the plaintiff [they] being cut, collected and taken
from the land possessed, preserved, and owned by the
plaintiffs;
 
6.                The plaintiffs further pray for such other
reliefs and remedies which this Honorable Court may deem
just and equitable in the premises.[8]
 
On September 3, 1999, two separate complaints for Reconveyance
with Damages were filed by petitioners, [9] this time against "Cristita Lomocso
Vda. de Daan" for a one-hectare portion of Lot No. 6196-A and "Spouses
Jacinto Lomocso and Balbina T. Lomocso" for a one-hectare portion of Lot
Nos. 6196-B and 7529-A. The two complaints were also raffled to Branch 9 of
the RTC of Dipolog City and docketed as Civil Case Nos. 5433 and 5434, 
respectively. In Civil Case No. 5433, petitioners prayed that judgment be
rendered:
1. Declaring [a] portion of Lot 6196-A titled under
OCT (P23527) 4888 equivalent to one hectare located at the
western portion of Lot 4888 as private property of the

plaintiffs under Sec. 48(B) CA 141 otherwise known as
Public Land OCT (sic) as amended by RA No. 1942;
2. Ordering the defendant to reconvey the
equivalent of one (1) hectare forested portion of her
property in question in favor of the plaintiffs within 30 days
from the finality of the decision in this case segregating one
hectare from OCT (P23527) 4888, located at its Western
portion and if she refuse (sic), ordering the Clerk of Court of
this Honorable Court to execute the deed of reconveyance
with like force and effect, as if executed by the defenda[n]t
herself;
 
3. Ordering defendant to pay P30,000.00 for the
22 forest trees illegally cut; P20,000.00 for moral
damages; P20,000.00 for Attorney's fees; P20,000.00 for
litigation expenses; and to pay the cost of the proceedings.
[10]
  
In Civil Case No. 5434, petitioners prayed that judgment be
rendered:
1. Declaring [a] portion of Lot 7529-A under OCT
(P-23207) 12870 and Lot 6196-B OCT (P-20845) 4889
equivalent to one hectare located as (sic) the western
portion of said lots as private property of the plaintiffs
under Sec. 48(b) of [C.A. No.] 141 otherwise know[n] as the
[P]ublic [L]and [A]ct as amended by RA 1942;
 
2. Ordering the defendants to reconvey the
equivalent of one (1) hectare forested portion of their
properties in question in favor of the plaintiffs within 30
days from the finality of the decision in this case segregating
one hectare from OCT (P-23207) 12870 and OCT (T-
20845)-4889 all of defendants, located at its Western
portion and if they refuse, ordering the Clerk of Court of
this Honorable Court to execute the deed of reconveyance
28
with like force and effect as if executed by the defendants
themselves[;]
3. Ordering defendants to pay P20,000.00 for the
six (6) forest trees illegally cut; P20,000.00 for moral
damages; P20,000.00 for Attorney's fees; P20,000.00 for
litigation expenses; and to pay the cost of the proceedings.
[11]
 
The three complaints[12] commonly alleged: a) that on May 21, 1958,
petitioners' parents (spouses Valeriano Sr. and Dorotea Concha) acquired by
homestead a 24-hectare parcel of land situated in Cogon, Dipolog City; b)
that since 1931, spouses Concha "painstakingly preserved" the forest in the
24-hectare land, including the excess four (4) hectares "untitled forest land"
located at its eastern portion; c) that they possessed this excess 4 hectares of
land (which consisted of Lot No. 6195, one-hectare portion of Lot No. 6196-A
and one-hectare portion of Lot Nos. 6196-B and 7529-A) "continuously,
publicly, notoriously, adversely, peacefully, in good faith and in concept of
the (sic) owner since 1931;" d) that they continued possession and occupation
of the 4-hectare land after the death of Dorotea Concha on December 23,
1992 and Valeriano Sr. on May 12, 1999; e) that the Concha spouses "have
preserved the forest trees standing in [the subject lots] to the exclusion of the
defendants (respondents) or other persons from 1931" up to November 12,
1996 (for Civil Case No. 5188) or January 1997 (for Civil Case Nos. 5433 and
5434) when respondents, "by force, intimidation, [and] stealth forcibly
entered the premises, illegally cut, collected, [and] disposed" of 21 trees (for
Civil Case No. 5188), 22 trees (for Civil Case No. 5433) or 6 trees (for Civil
Case No. 5434); f) that "the land is private land or that even assuming it was
part of the public domain, plaintiffs had already acquired imperfect title
thereto" under Sec. 48(b) of C.A. No. 141, as amended by Republic Act (R.A.)
No. 1942; g) that respondents allegedly cut into flitches the trees felled in Lot
No. 6195 (Civil Case No. 5188) while the logs taken from the subject lots in
Civil Case Nos. 5433 and 5434 were sold to a timber dealer in Katipunan,
Zamboanga del Norte; h) that respondents "surreptitiously" filed free patent
applications over the lots despite their full knowledge that petitioners owned
the lots; i) that the geodetic engineers who conducted the original survey over
the lots never informed them of the 
survey to give them an opportunity to oppose respondents' applications; j)
 29

that respondents' free patents and the corresponding OCTs were issued "on Hence, this appeal in which petitioners raise the following issues, viz:
account of fraud, deceit, bad faith and misrepresentation"; and k) that the  
lots in question have not been transferred to an innocent purchaser. FIRST - WHETHER OR NOT RESPONDENT COURT OF
  APPEALS (FORMER FIRST DIVISION) ERRED IN
On separate occasions, respondents moved for the dismissal of the REVERSING THE ORDER OF THE COURT A QUO
respective cases against them on the same grounds of: (a) lack of jurisdiction DENYING THE MOTION FOR DISMISSAL,
of the RTC over the subject matters of the complaints; (b) failure to state CONSIDERING THE DISMISSAL OF A PARTY
causes of action for reconveyance; (c) prescription; and (d) waiver, COMPLAINT IS PREMATURE AND TRIAL ON THE
abandonment, laches and estoppel.[13] On the issue of jurisdiction, MERITS SHOULD BE CONDUCTED TO THRESH OUT
respondents contended that the RTC has no jurisdiction over the complaints EVIDENTIARY MATTERS.
pursuant to Section 19(2) of Batas Pambansa Blg. (B.P.) 129, as amended by  
R.A. No. 7691, as in each case, the assessed values of the subject lots are less SECOND - WHETHER OR NOT THE RESPONDENT
than P20,000.00. COURT OF APPEALS (FORMER FIRST DIVISION)
  ERRED IN DISMISSING THE PETITIONERS'
Petitioners opposed,[14] contending that the instant cases involve COMPLAINTS ON [THE] GROUND OF PRESCRIPTION.
actions the subject matters of which are incapable of pecuniary estimation  
which, under Section 19(1) of B.P. 129, as amended by R.A. 7691, fall within THIRD - WHETHER OR NOT THE RESPONDENT COURT
the exclusive original jurisdiction of the RTCs. They also contended that they OF APPEALS (FORMER FIRST DIVISION) ERRED IN
have two main causes of action: for reconveyance and for recovery of the CONCLUDING THAT THERE IS NO DOCUMENTARY
value of the trees felled by respondents. Hence, the totality of the claims must EVIDENCE ON RECORD TO SHOW THAT PETITIONERS
be considered which, if computed, allegedly falls within the exclusive original OWN THE SUBJECT FOREST 
jurisdiction of the RTC. PORTION OF THE PROPERTIES ERRONEOUSLY
  INCLUDED IN THE TITLES OF PRIVATE
The trial court denied the respective motions to dismiss of RESPONDENTS.
respondents.[15] The respondents filed a Joint Motion for Reconsideration,  
[16]
 to no avail.[17] FOURTH - WHETHER OR NOT THE PETITION OF
  HEREIN PRIVATE RESPONDENTS FILED WITH THE
Dissatisfied, respondents jointly filed a Petition for Certiorari, Prohibition RESPONDENT COURT OF APPEALS (FORMER FIRST
and Preliminary Injunction with Prayer for Issuance of Restraining Order Ex DIVISION) SHOULD HAVE BEEN DISMISSED
Parte[18] with the CA, docketed as CA-G.R. SP No. 59499. In its Decision, OUTRIGHTLY FOR PRIVATE RESPONDENTS' THEREIN
[19]
 the CA reversed the resolutions and order of the trial court. It held that FAILURE TO COMPLY WITH THE MANDATORY
even assuming that the complaints state a cause of action, the same have REQUIREMENT OF SECTION 1 RULE 65 OF THE RULES
been barred by the statute of limitations. The CA ruled that an action for OF COURT TO SUBMIT CERTIFIED TRUE COPIES OF
reconveyance based on fraud prescribes in ten (10) years, hence, the instant THE ASSAILED ORDERS OF THE TRIAL COURT WHICH
complaints must be dismissed as they involve titles issued for at least twenty- RENDERED THEIR PETITION (CA G.R. 59499)
two (22) years prior to the filing of the complaints. The CA found it DEFICIENT IN FORM AND SUBSTANCE CITING THE
unnecessary to resolve the other issues. CASE OF CATUIRA VS. COURT OF APPEALS (172 SCRA
  136).[20]

In their memorandum,[21] respondents reiterated their arguments in
the courts below that: a) the complaints of the petitioners in the trial court do
not state causes of action for reconveyance; b) assuming the complaints state
causes of action for reconveyance, the same have already been barred by
prescription; c) the RTC does not have jurisdiction over the subject matter of
the instant cases; d) the claims for reconveyance in the complaints are barred
by waiver, abandonment, or otherwise extinguished by laches and estoppel;
and e) there is no special reason warranting a review by this Court.
 
Since the issue of jurisdiction is determinative of the resolution of the
instant case yet the CA skirted the question, we resolved to require the parties
to submit their respective Supplemental Memoranda on the issue of
jurisdiction.[22]
 
In their Supplemental Memorandum,[23] petitioners contend that the
nature of their complaints, as denominated therein and as borne by their
allegations, are suits for reconveyance, or annulment or cancellation of OCTs
and damages. The cases allegedly involve more than just the issue of  the registered owner[33] and that the property has not yet passed to the hands
title and possession since the nullity of the OCTs issued to respondents and
the reconveyance of the subject properties were also raised as issues. Thus,
the RTC has jurisdiction under Section 19(1) of B.P. 129, which provides that
the RTC has jurisdiction "[i]n all civil actions in which the subject of the
litigation is incapable of pecuniary estimation."Petitioners
[24]
cited: a) Raymundo v. CA  which set the criteria for determining whether
an action is one not capable of pecuniary estimation; b) Swan v.
CA[25] where it was held that an action for annulment of title is under the
jurisdiction of the RTC; c) Santos v. CA[26] where it was similarly held that
an action for annulment of title, reversion and damages was within the
jurisdiction of the RTC; and d) Commodities Storage and ICE Plant
Corporation v. CA[27] where it was held that "[w]here the action affects title
to the property, it should be filed in the RTC where the property is
located." Petitioners also contend that while it may be argued that the
assessed values of the subject properties are within the original jurisdiction of
the municipal trial court (MTC), they have included in their prayers "any
interest included therein" consisting of 49 felled natural grown trees illegally
cut by respondents. Combining the assessed values of the properties as
shown by their respective tax declarations and the estimated value of the
trees cut, the total amount prayed by petitioners exceeds twenty thousand
30
pesos (P20,000.00). Hence, they contend that the RTC has jurisdiction
under Section 19(2) of B.P. 129.
 
Jurisdiction over the subject matter is the power to hear and
determine cases of the general class to which the proceedings in question
belong.[28] It is conferred by law and an objection based on this ground
cannot be waived by the parties.[29] To determine whether a court has
jurisdiction over the subject matter of a case, it is important to determine the
nature of the cause of action and of the relief sought.[30]
 
The trial court correctly held that the instant cases involve actions for
reconveyance.[31] An action for reconveyance respects the decree of
registration as incontrovertible but seeks the transfer of property, which has
been wrongfully or erroneously registered in other persons' names, to its
rightful and legal owners, or to those who claim to have a better right.
[32]
 There is no special ground for an action for reconveyance. It is enough
that the aggrieved party has a legal claim on the property superior to that of
of an innocent purchaser for value.[34]
 
The reliefs sought by the petitioners in the instant cases typify an
action for reconveyance. The following are also the common allegations in
the three complaints that are sufficient to constitute causes of action for
reconveyance, viz:
 
(a) That plaintiff Valeriano S. Concha, Sr. together
with his spouse Dorotea Concha have painstakingly
preserve[d] the forest standing in the area [of their 24-
hectare homestead] including the four hectares untitled
forest land located at the eastern portion of the forest from
1931 when they were newly married, the date they acquired
this property by occupation or possession;[35]
 
(b) That spouses Valeriano S. Concha Sr. and
Dorotea P. Concha have preserved the forest trees standing
in [these parcels] of land to the exclusion of the defendants
Lomocsos or other persons from 1931 up to November 12,

1996 [for Civil Case No. 5188] and January 1997 [for Civil
Case Nos. 5433 and 5434] when defendants[,] by force,
intimidation, [and] stealth[,] forcibly entered the premises,
illegal[ly] cut, collected, disposed a total of [twenty-one (21)
trees for Civil Case No. 5188, twenty-two (22) trees for Civil
Case No. 5433 and six (6) trees for Civil Case No. 5434] of
various sizes;[36]
 
(c) That this claim is an assertion that the land is
private land or that even assuming it was part of the public
domain, plaintiff had already acquired imperfect title
thereto under Sec. 48(b) of [C.A.] No. 141[,] otherwise
known as the Public Land Act[,] as amended by [R.A.] No.
[7691];[37]
(d) That [respondents and their predecessors-in-
interest knew when they] surreptitiously filed[38] [their
respective patent applications and were issued their
respective] free patents and original certificates of title [that
the subject lots belonged to the petitioners];[39]
(e) [That respondents' free patents and the
corresponding original certificates of titles were issued] on
account of fraud, deceit, bad faith and misrepresentation;
[40]
 and
 
(f) The land in question has not been transferred to
an innocent purchaser.[41]
These cases may also be considered as actions to remove cloud on
one's title as they are intended to procure the cancellation of an instrument
constituting a claim on petitioners' alleged title which was used to injure or
vex them in the enjoyment of their alleged title.[42]
 
Being in the nature of actions for reconveyance or actions to remove
cloud on one's title, the applicable law to determine which court has
jurisdiction is Section 19(2) of B.P. 129, as amended by R.A. No. 7691, viz:
31
Section 19. Jurisdiction in Civil Cases.-- Regional
Trial Courts shall exercise exclusive original jurisdiction: x x
x
 
(2) In all civil actions which involve the title to, or
possession of, real property, or any interest therein, where
the assessed value of the property involved exceeds Twenty
thousand pesos (P20,000.00) or for civil actions in Metro
Manila, where such value exceeds Fifty thousand pesos
(P50,000.00) except actions for forcible entry into and
unlawful detainer of lands or buildings, original jurisdiction
over which is conferred upon the Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts;
x x x.
In the cases at bar, it is undisputed that the subject lots are situated
in Cogon, Dipolog City and their assessed values are less than P20,000.00,
to wit:
Civil Case No. Lot No. Assessed Value
5188 6195 P1,030.00
 
5433 6196-A 4,500.00
 
5434 6196-B 4,340.00
7529-A 1,880.00.[43]
 
Hence, the MTC clearly has jurisdiction over the instant cases.
 
Petitioners' contention that this case is one that is incapable of
pecuniary estimation under the exclusive original jurisdiction of the RTC
pursuant to Section 19(1) of B.P. 129 is erroneous.
 
In a number of cases, we have held that actions for
reconveyance[44] of or for cancellation of title[45] to or to quiet title[46] over real

property are actions that fall under the classification of cases that involve
"title to, or possession of, real property, or any interest therein."
 
The original text of Section 19(2) of B.P. 129 as well as its forerunner,
Section 44(b) of R.A. 296,[47] as amended, gave the RTCs (formerly courts of
first instance) exclusive original jurisdiction "[i]n all civil actions
which involve the title to, or possession of, real property, or any
interest therein, except actions for forcible entry into and unlawful
detainer of lands or buildings, original jurisdiction over which is conferred
upon Metropolitan Trial Courts, [MTCs], and Municipal Circuit Trial Courts
(conferred upon the city and municipal courts under R.A. 296, as amended)."
Thus, under the old law, there was no substantial effect on jurisdiction
whether a case is one, the subject matter of which was incapable of pecuniary
estimation, under Section 19(1) of B.P. 129 or one involving title to property
under Section 19(2). The distinction between the two classes became crucial
with the amendment introduced by R.A. No. 7691[48] in 1994 which expanded
the exclusive original jurisdiction of the first level courts to include "all civil
actions which involve title to, or possession of, real property, or any interest
therein where the assessed value of the property or interest therein
does not exceed Twenty thousand pesos (P20,000.00) or, in civil
actions in Metro Manila, where such assessed value does not
exceed Fifty thousand pesos (P50,000.00) exclusive of interest,
damages of whatever kind, attorney's fees, litigation expenses and
costs." Thus, under the present law, original jurisdiction over cases the
subject matter of which involves "title to, possession of, real property or any
interest therein" under Section 19(2) of B.P. 129 is divided between the first
and second level courts, with the assessed value of the real property involved
as the benchmark. This amendment was introduced to "unclog the
overloaded dockets of the RTCs which would result in the speedier
administration of justice."[49]
The cases of Raymundo v. CA[50] and Commodities Storage
and ICE Plant Corporation v. CA, [51] relied upon by the petitioners, are
inapplicable to the cases at bar. Raymundo involved a complaint for
mandatory injunction, not one for reconveyance or annulment of title. The
bone of contention was whether the case was incapable of pecuniary
estimation considering petitioner's contention that the pecuniary claim of
the complaint was only attorney's fees of P10,000, hence, the MTC had
32
jurisdiction. The Court defined the criterion for determining whether an
action is one that is incapable of pecuniary estimation and held that the issue
of whether petitioner violated the provisions of the Master Deed and
Declaration of Restriction of the Corporation is one that is incapable of
pecuniary estimation. The claim for attorney's fees was merely incidental to
the principal action, hence, said amount was not determinative of the court's
jurisdiction. Nor can Commodities Storage and ICE Plant
Corporation provide any comfort to petitioners for the issue resolved by
the Court in said case was venue and not jurisdiction. The action therein was
for damages, accounting and fixing of redemption period which was filed
on October 28, 1994, before the passage of R.A. No. 7691. In resolving the
issue of venue, the Court held that "[w]here the action affects title to
property, it should be instituted in the [RTC] where the property is
situated. The Sta. Maria Ice Plant & Cold Storage is located in Sta. Maria,
Bulacan. The venue in Civil Case No. 94-727076 was therefore improperly
laid."
Worse, the cases of Swan v. CA[52] and Santos v. CA[53] cited by
the petitioners, contradict their own position that the nature of the instant
cases falls under Section 19(1) of B.P. 129. The complaints
in Swan and Santos were filed prior to the enactment of R.A. No.
7691. In Swan, the Court held that the action being one for annulment of
title, the RTC had original jurisdiction under Section 19(2) of B.P.
129. In Santos, the Court similarly held that the complaint for cancellation
of title, reversion and damages is also one that involves title to and
possession of real property under Section 19(2) of B.P. 129. Thus, while the
Court held that the RTC had jurisdiction, the Court classified actions for
"annulment of title" and "cancellation of title, reversion and damages" as
civil actions that involve "title to, or possession of, real property, or any
interest therein" under Section 19(2) of B.P. 129.
Petitioners' contention that the value of the trees cut in the subject
properties constitutes "any interest therein (in the subject properties)" that
should be computed in addition to the respective assessed values of the
subject properties is unavailing. Section 19(2) of B.P. 129, as amended by
R.A. No. 7691, is clear that the RTC shall exercise jurisdiction "in all civil
actions which involve the title to, or possession of, real property, or any
interest therein, where the assessed value of the property involved
 33

exceeds Twenty thousand pesos (P20,000.00) or for civil actions DECISION

in Metro Manila, where such value exceeds Fifty thousand pesos  
(P50,000.00)." It is true that the recovery of the value of the trees cut from CARPIO, J.:
the subject properties may be included in the term "any interest  
therein." However, the law is emphatic that in determining which court has The Case
jurisdiction, it is only the assessed value of the realty involved that should be  
computed.[54] In this case, there is no dispute that the assessed values of the This is a petition for review[1] of the 17 February 2005 Decision[2] and the 6
subject properties as shown by their tax declarations are less September 2005 Resolution[3] of the Court of Appeals (appellate court) in CA-
than P20,000.00. Clearly, jurisdiction over the instant cases belongs not to G.R. CV No. 66685. In its 17 February 2005 Decision, the appellate court
the RTC but to the MTC. affirmed the 3 November 1999 Resolution[4] of Branch 61 of the Regional
Trial Court of Baguio City (trial court), which dismissed the complaint filed
IN VIEW WHEREOF, the decision of the Court of Appeals is by Vicente Cawis, Pedro Baclangen, Feliza Domilies, Ivan Mandi-it, Domingo
hereby AFFIRMED that the RTC of Dipolog City, Branch 9, has no Cawis, and Gerard Libatique (collectively petitioners). In its 6 September
jurisdiction in Civil Case Nos. 5188, 5433 and 5434. 2005 Resolution, the appellate court denied petitioners motion for
reconsideration.
 
VICENTE CAWIS (substituted G.R. No. 170207
The Facts
by his son, EMILIO CAWIS),  
PEDRO BACLANGEN,
On 23 September 1957, the Department of Environment and Natural
FELIZA DOMILIES, Present: Resources (DENR), pursuant to Section 79[5] of the Public Land Act,
IVAN MANDI-IT a.k.a. [6]
 approved the sales patent application of Jose V. Andrada (Andrada) for Lot
IVAN MANDI-IT LUPADIT, CARPIO, J., Chairperson, No. 47 with an area of 1,339 square meters situated within Holy Ghost Hill
DOMINGO CAWIS and BRION,
Subdivision in Baguio City. Sales Patent No. 1319 was issued to Andrada
GERARD LIBATIQUE, DEL CASTILLO, upon full payment of the purchase price of the lot on 20 November 1968, as
Petitioners, ABAD, and
evidenced by O.R. No. 459651.[7]
PEREZ, JJ.  
 
On 4 August 1969, Republic Act No. 6099[8] took effect. It provided that
- versus - subject to certain conditions, parcels of land within the Holy Ghost Hill
 
Subdivision, which included Lot No. 47, would be sold to the actual
  occupants without the necessity of a public bidding, in accordance with the
HON. ANTONIO CERILLES,
provisions of Republic Act No. 730.[9]
in his capacity as the DENR Secretary,  
HON. MANUEL GEROCHI, in his
Claiming to be the actual occupants referred to in R.A. No. 6099, petitioners
capacity as the Director, Lands, protested the sales patent awarded to Andrada. The Bureau of Lands denied
Management Bureau, and Promulgated:
their protest on the ground that R.A. No. 6099, being of later passage, could
MA. EDELIZA PERALTA, no longer affect the earlier award of sales patent to Andrada. Petitioners
Respondents. April 19, 2010
sought reconsideration, but the Bureau of Lands denied it on 19 May 1987.
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x  Petitioners failed to appeal the adverse decision of the Bureau of Lands to any

higher administrative authority or to the courts. Thus, the decision had
attained finality.[10]
 
Sometime in 1987, private respondent Ma. Edeliza S. Peralta (Peralta)
purchased Lot No. 47 from Andrada. On 28 October 1987, the Deputy Public
Land Inspector, in his final report of investigation, [11] found that neither
Andrada nor Peralta had constructed a residential house on the lot, which
was required in the Order of Award and set as a condition precedent for the
issuance of the sales patent. Apparently, it was Vicente Cawis, one of the
petitioners, who had built a house on Lot No. 47.
 
On 13 November 1987, Sales Patent No. 1319 was nonetheless transferred to
Peralta. In the Order for the Issuance of Patent, [12] the Assistant Director of
Lands verified the investigation conducted by the Land Inspector, whose
report was fully endorsed by the District Land Officer, that Peralta had
complied with the requirements of the law regarding the construction of
improvements on the land applied for. In the Order for Transfer of Sales
Rights,[13] the Director of Lands confirmed that before the transfer of the sales
patent to Peralta, Andrada had complied with the construction requirement.
On 4 December 1987, Original Certificate of Title (OCT) No. P-1604[14] was
duly issued in Peraltas name.
On 8 September 1998, petitioners filed a complaint [15] before the trial court
alleging fraud, deceit, and misrepresentation in the issuance of the sales
patent and the original certificate of title over Lot No. 47. They claimed they
had interest in the lot as qualified beneficiaries of R.A. No. 6099 who met the
conditions prescribed in R.A. No. 730. They argued that upon the enactment
of R.A. No. 6099, Andradas sales patent was deemed cancelled and revoked
in their favor.
In her answer with a motion to dismiss, [16] Peralta averred that petitioners
have no cause of action against her, that she obtained her title after
compliance with the legal requirements, that her title was issued more than
ten years prior to the filing of the complaint, that the action was a collateral
attack on a title, and that even if the action was a direct attack, petitioners
were not the proper parties.
 
The Ruling of the Trial Court
34
 
The trial court issued a Resolution dated 3 November 1999 dismissing the
complaint filed by petitioners. The trial court held that reversion of title on
the ground of fraud must be initiated by the government through the Office
of the Solicitor General (OSG). In its 13 January 2000 Order,[17] the trial court
denied petitioners motion for reconsideration.
 
  
The Ruling of the Appellate Court
 
In its 17 February 2005 Decision, the appellate court affirmed the resolution
of the trial court. The appellate court explained that under Section 2[18] of
R.A. No. 6099, ownership of public land within the Holy Ghost Hill
Subdivision was not automatically conferred on petitioners as occupants. The
appellate court stated that petitioners must first apply for a sales patent in
order to avail of the benefits of the law. The appellate court agreed with the
trial court that petitioners had no standing to file a suit for annulment of
Sales Patent No. 1319 and OCT No. P-1604. It cited Section 101[19] of the
Public Land Act, which provides that only the government, through the OSG,
could file an action for reversion. In its 6 September 2005 Resolution, the
appellate court denied petitioners motion for reconsideration.
The Issues
The twin issues raised by petitioners are (1) whether the actual occupants
of parcels of land covered by R.A. No. 6099, which includes Lot No.
47, have standing to question the validity of the sales patent and the
original certificate of title issued over Lot No. 47; and (2) whether the
suit for annulment of title allegedly issued through fraud, deceit, or
misrepresentation, has prescribed.
The Courts Ruling
 
The petition has no merit.
Petitioners contend private respondent misrepresented that there was no
improvement on Lot No. 47 at the time she filed her sales patent application
when in fact, there were numerous improvements consisting of residential
houses erected by them. Petitioners argue neither private respondent nor her
predecessor-in-interest has introduced any improvement on Lot No. 47,

which is a condition precedent before she can be a qualified awardee.
Petitioners take exception to the rule that only the OSG is allowed to file a
suit questioning the validity of the sales patent and the original certificate of
title. As to the second issue, petitioners argue that since the sales patent and
the original certificate of title are void from the beginning, the complaint filed
by petitioners cannot be deemed to have prescribed.
 
In her Comment, private respondent asserts that petitioners have no
personality to question the validity of the sales patent and the original
certificate of title issued in her name. She maintains that only the
government, through the OSG, may file an action for reversion on the ground
of fraud, deceit, or misrepresentation. As to the second issue, private
respondent claims that petitioners annulment suit has prescribed pursuant to
Section 32[20] of Presidential Decree No. 1529.[21]
 
At the outset, we must point out that petitioners complaint questioning the
validity of the sales patent and the original certificate of title over Lot No. 47
is, in reality, a reversion suit. The objective of an action for reversion of
public land is the cancellation of the certificate of title and the resulting
reversion of the land covered by the title to the State. This is why an action
for reversion is oftentimes designated as an annulment suit or a cancellation
suit.
 
Coming now to the first issue, Section 101 of the Public Land Act[22] clearly
states:
 
SEC. 101. All actions for the reversion to the Government of
lands of the public domain or improvements thereon shall be
instituted by the Solicitor General or the officer acting in his
stead, in the proper courts, in the name of the Republic of
the Philippines.
Even assuming that private respondent indeed acquired title to Lot No. 47 in
bad faith, only the State can institute reversion proceedings, pursuant to
Section 101 of the Public Land Act and our ruling in Alvarico v. Sola.
[23]
 Private persons may not bring an action for reversion or any action which
would have the effect of canceling a land patent and the corresponding
certificate of title issued on the basis of the patent, such that the land covered
thereby will again form part of the public domain.[24] Only the OSG or the
35
officer acting in his stead may do so. Since the title originated from a grant by
the government, its cancellation is a matter between the grantor and the
grantee.[25]
 
Similarly, in Urquiaga v. CA,[26] this Court held that there is no need to pass
upon any allegation of actual fraud in the acquisition of a title based on a
sales patent. Private persons have no right or interest over land considered
public at the time the sales application was filed. They have no personality to
question the validity of the title. We further stated that granting, for the sake
of argument, that fraud was committed in obtaining the title, it is the State,
in a reversion case, which is the proper party to file the necessary action.[27]
 
In this case, it is clear that Lot No. 47 was public land when Andrada filed the
sales patent application. Any subsequent action questioning the validity of
the award of sales patent on the ground of fraud, deceit, or misrepresentation
should thus be initiated by the State. The State has not done so and thus, we
have to uphold the validity and regularity of the sales patent as well as the
corresponding original certificate of title issued based on the patent.
 
At any rate, the Court, in the exercise of its equity jurisdiction, may directly
resolve the issue of alleged fraud in the acquisition of a sales patent although
the action is instituted by a private person. In this connection, the 19 May
1987 letter of the Director of Lands to petitioner Vicente Cawis is instructive:
 
As to your allegation that the award in favor of applicant-
respondent (Andrada) should be cancelled as he failed to
introduce improvements on the land, we find the said
contention to be untenable. Somewhere in your letter dated
July 11, 1983, you stated that you took possession of the lot
in question in the early 1950s, introduced improvements
thereon, and resided therein continuously up to the present.
By your own admission, it would appear that you were the
ones who made it impossible for Mr. Andrada to take
possession of the said lot and to improve the same. This
being the case, the failure of the applicant-respondent
(Andrada) to introduce improvements on the land in
question is not attributable to him.
 
 36

In view of the foregoing facts and circumstances, we regret to SAAD AGRO-INDUSTRIES, INC., G.R. No. 152570
inform you that we cannot reconsider our position on this Petitioner,
matter. It is further advised that you vacate the premises and Present:
remove all your improvements thereon so that the applicant-  
awardee (Andrada) can take immediate possession of the QUISUMBING, J.,
land in question.[28] Chairperson,
  - versus - CARPIO,
Clearly then, fraud cannot be imputed to Andrada. His supposed failure to CARPIO MORALES,
introduce improvements on Lot No. 47 is simply due to petitioners refusal to TINGA, and
vacate the lot. It appears from the factual finding of the Director of Lands VELASCO, JR., JJ.
that petitioners are the ones in bad faith. Contrary to petitioners claim, R.A. REPUBLIC OF THE PHILIPPINES,
No. 6099 did not automatically confer on them ownership of the public land Respondent.
within Holy Ghost Hill Subdivision. The law itself, Section 2 of R.A. No. x------------------------------------------------x Promulgated:
6099, provides that the occupants must first apply for a sales patent in order PEDRO URGELLO, September 27, 2006
to avail of the benefits of the law, thus: Intervenor-Appellant.
   
SEC. 2. Except those contrary to the provisions of Republic x---------------------------------------------------------------------------x
Act Numbered Seven Hundred and Thirty, all other  
provisions of Commonwealth Act Numbered One hundred DECISION
and Forty-One governing the procedure of issuing titles shall  
apply in the disposition of the parcels above-described to the TINGA, J.:
beneficiaries of this Act.  
  The instant petition for review assails the Decision and Resolution of the
  Court of Appeals dated 18 July 2001 and 18 March 2002 in CA-G.R. CV No.
The complaint filed by petitioners did not state that they had filed an 64097, reversing and setting aside the Decision of the Regional Trial Court
application for a sales patent over Lot No. 47. Even if it did, an application of Cebu, Branch 11, Cebu City in Civil Case No. CEB-17173.
for a sales patent could only create, at most, an inchoate right. Not being the  
real parties-in-interest, petitioners have no personality to file the reversion  
suit in this case.  
  The antecedents follow.
Consequently, the prescription issue pertaining to the action for reversion  
initiated by petitioners who could not have successfully initiated the On 18 October 1967, Socorro Orcullo (Orcullo) filed her application
reversion suit in the first place, is now moot. for Free Patent for Lot No. 1434 of Cad-315-D, a parcel of land with an area of
  12.8477 hectares located in Barangay Abugon, Sibonga, Cebu. Thereafter, on
WHEREFORE, we DENY the petition for review. We AFFIRM the 17 14 February 1971, the Secretary of Agriculture and Natural Resources issued
February 2005 Decision and the 6 September 2005 Resolution of the Court Free Patent No. 473408 for Lot No. 1434, while the Registry of Deeds for the
of Appeals in CA-G.R. CV No. 66685. Province of Cebu issued Original Certificate of Title (OCT) No. 0-6667 over
 

the said lot.[1] Subsequently, the subject lot was sold[2]to SAAD Agro-
Industries, Inc. (petitioner) by one of Orcullos heirs.
 
Sometime in 1995, the Republic of the Philippines, through the Solicitor
General, filed a complaint[3] for annulment of title and reversion of the lot
covered by Free Patent No. 473408 and OCT No. 0-6667 and reversion of Lot
No. 1434 of Cad-315-D to the mass of the public domain, on the ground that
the issuance of the said free patent and title for Lot No. 1434 was irregular
and erroneous, following the discovery that the lot is allegedly part of
the timberland and forest reserve of Sibonga, Cebu. The discovery was made
after Pedro Urgello filed a letter-complaint with the Regional Executive
Director of the Forest Management Sector, Department of Environment and
Natural Resources (DENR) Region VII, Cebu City, about the alleged illegal
cutting of mangrove trees and construction of dikes within the area covered
by Urgellos Fishpond Lease Agreement.[4] On 14 July 1995, Urgello filed a
complaint-in-intervention against the heirs of Orcullo, adopting the
allegations of respondent.[5] However, the heirs failed to file their answer to
the complaint and were thus declared in default.[6]
In its Decision[7] dated 15 May 1999, the trial court dismissed the
complaint, finding that respondent failed to show that the subject lot is part
of the timberland or forest reserve or that it has been classified as such before
the issuance of the free patent and the original title. According to the trial
court, the issuance of the free patent and title was regular and in order, and
must be accorded full faith. Considering the validity of the free patent and the
OCT, petitioners purchase of the property was also declared legal and
valid. The trial court also denied the complaint-in-intervention filed by
Urgello.
 
 
On appeal, the Court of Appeals in its Decision[8] reversed and set aside the
trial courts judgment. It held that timber or forest lands, to which the subject
lot belongs, are not subject to private ownership, unless these are first
37
classified as agricultural lands. Thus, absent any declassification of the
subject lot from forest to alienable and disposable land for agricultural
purposes,[9] the officers erred in approving Orcullos free patent application
and in issuing the OCT; hence, title to the lot must be cancelled.
[10]
 Consequently, the Court of Appeals invalidated the sale of the lot to
petitioner. However, it declared that Urgellos Fishpond Lease Agreement
may continue until its expiration because lease does not pass title to the
lessee; but thereafter, the lease should not be renewed. Accordingly, the
Court of Appeals decreed:
WHEREFORE, the decision appealed from is
hereby REVERSED and SET ASIDE and another one issued
declaring Free Patent No. 473408 and the corresponding
OCT [No.] 0-6667 as NULL and VOID ab initio.
SAAD Agro-Industries, Inc. is directed to surrender the
owners duplicate copy of OCT [No.] 0-6667 to the Register of
Deeds of Cebu City.
 
The Register of Deeds of Cebu City is hereby ordered to
cancel OCT [No.] 0-6667 and all other transfer certificates of
title that may have been subsequently issued.
Lot No. 1434, CAD 315[-]D located at Barangay Abugon,
Sibonga, Cebu, subject matter of this case, is
hereby REVERTED as part of [the] public domain and to be
classified as timberland.[11]
 
Petitioners motion for reconsideration, claiming insufficiency of evidence
and failure to consider pertinent laws, proved futile as it was dismissed for
lack of merit. The Court of Appeals categorically stated that there was a
preponderance of evidence showing that the subject lot is within the
timberland area.[12]
Petitioner now claims that the Court of Appeals erred in relying on the DENR
officers testimony. It claims that the testimony was a mere opinion to the
effect that if there was no classification yet of an area, such area should be
considered as a public forest. Such opinion was premised on the officers

construction of a provision of Presidential Decree (P.D.) No. 705, otherwise
known as the Revised Forestry Code,[13] the pertinent portion of which reads:
 
Those still to be classified under the present system shall
continue to remain as part of the public forest.[14]
 
Petitioner points out that P.D. No. 705 took effect on 19 May 1975, or
long after the issuance of the free patent and title in
question. Thus, the provision stating that all public lands should be
considered as part of the public forests until a land classification team has
declassified them is applicable only after the effectivity of P.D. No. 705 and
cannot be made retroactive to cover and prejudice vested rights acquired
prior to the effectivity of said law, petitioner concludes. [15] It adds that if the
subject lot was encompassed by the term public forest, the same should have
been designated as a Timberland Block, not as Cadastral Lot No. 1434, CAF-
315-D, Sibonga Cadastre which was the designation made by the Republic
prior to 1972.[16]
Petitioner also questions the Court of Appeals reliance on the land
classification map (L.C. Map) presented by respondent. The trial court had
previously declared L.C. Map No. 2961 as inadmissible, finding that the
plaintiff has not duly proved the authenticity and contents. According to
petitioner, the L.C. Map presented in court is neither a certified true copy nor
one attested to be a true copy by any DENR official having legal custody of
the original thereof, and thus should not have been made the basis of the
cancellation of the free patent and title.[17]
 
Petitioner further contends that the projection survey conducted by the
DENR to determine if the subject lot falls within the forest area is not clear,
precise and conclusive, since the foresters who conducted the survey used a
magnetic box compass, an unreliable and inaccurate instrument, whose
results are easily affected by high tension wires and stones with iron
minerals.[18]
 
Finally, petitioner claims that respondent failed to overcome
the presumption of regularity of the issuance of the free patent and title in
favor of Socorro Orcullo.
38
In sum, petitioner asserts that respondent failed to show that the
subject lot is inside the timberland block, thereby casting doubt on the
accuracy of the survey conducted by the Bureau of Forestry and the opinions
of DENR officers. Since respondent is the original plaintiff in the reversion
case, the burden is on it to prove that the subject lot is part of the timberland
block, petitioner adds.
There is merit in the petition.
 
Under the Regalian doctrine or jura regalia, all lands of the public
domain belong to the State, and the State is the source of any asserted right
to ownership in land and charged with the conservation of such patrimony.
[19]
 Under this doctrine, lands not otherwise appearing to be clearly within
private ownership are presumed to belong to the State. [20] In instances where
a parcel of land considered to be inalienable land of the public domain is
found under private ownership, the Government is allowed by law to file an
action for
 
reversion,[21] which is an action where the ultimate relief sought is to revert
the land to the government under the Regalian doctrine. Considering that the
land subject of the action originated from a grant by the government, its
cancellation is a matter between the grantor and the grantee.[22]
 
It has been held that a complaint for reversion involves a serious
controversy, involving a question of fraud and misrepresentation committed
against the government and it is aimed at the return of the disputed portion
of the public domain. It seeks to cancel the original certificate of registration,
and nullify the original certificate of title, including the transfer certificate of
title of the successors-in-interest because the same were all procured through
fraud and misrepresentation.[23] Thus, the State, as the party alleging the
fraud and misrepresentation that attended the application of the free patent,
bears that burden of proof. Fraud and misrepresentation, as grounds for
cancellation of patent and annulment of title, should never be presumed but
must be proved by clear and convincing evidence, mere preponderance of
evidence not even being adequate.

 
It is but judicious to require the Government, in an action for reversion, to
show the details attending the issuance of title over the alleged inalienable
land and explain why such issuance has deprived the State of the claimed
property.
 
In the instant case, the Solicitor General claimed that Free Patent No.
473408 and Original Certificate of Title No. 0-6667 were erroneously and
irregularly obtained as the Bureau of Lands (now Lands Management
Bureau) did not acquire jurisdiction over the land subject thereof, nor has it
the power and authority to dispose of the same through [a] free patent grant,
hence, said patent and title are null and void ab initio.[25] It was incumbent
upon respondent to prove that the free patent and original title were truly
erroneously and irregularly obtained. Unfortunately, respondent failed to do
so.
 
The Court finds that the findings of the trial court rather than those of the
appellate court are more in accord with the law and jurisprudence.
 
In concluding that the subject parcel of land falls within the timberland or
forest reserve, the Court of Appeals relied on the testimony of Isabelo R.
Montejo that as it had remained unclassified until 1980 and consequently
became an unclassified forest zone, it was incapable of private
appropriation. The pertinent portions of Montejos testimony read:
 
 
 
Q: And in that particular [R]evised Forestry Code, there is
that statement that unless classified by a land
classification team, an area can never be released.
A: Yes sir.
 
xxx
 
Q: Prior to 1980, there was no classification was [sic] ever of
the lands of the public domain in the town
of Sibonga?
39
A: Yes, sir.
 
Q: In other words, nobody knew in the whole DNR before
and now DENR what areas were timberland and
what areas are not timberland in the town
of Sibonga prior to 1980?
A: Yes, sir, that is why the law states that if there is no
classification should be [sic] considered as the public
forest in order to protect the resources.[26]
 
Obviously, respondents counsel and witness were referring to P.D.
No. 705 particularly Section 13 thereof which reads:
 
 
CHAPTER II
CLASSIFICATION AND SURVEY
 
SEC. 13. System of Land Classification.The Department
Head shall study, devise, determine and prescribe the
criteria, guidelines and methods for the proper and accurate
classification and survey of all lands of the public domain
into agricultural, industrial or commercial, residential,
settlement, mineral, timber or forest, and grazing lands, and
into such other classes as now or may hereafter be provided
by law, rules and regulations.
In the meantime, the Department Head shall simplify
through inter-bureau action the present system of
determining which of the unclassified lands of the public
domain are needed for forest purposes and declare them as
permanent forest to form part of the forest reserves. He shall
declare those classified and determined not to be needed for
forest purposes as alienable and disposable lands, the
administrative jurisdiction and management of which shall
be transferred to the Bureau of Lands: Provided, That
mangrove and other swamps not needed for shore protection
and suitable for fishpond purposes shall be released to, and
be placed under the administrative jurisdiction and

management of, the Bureau of Fisheries and Aquatic
Resources.Those still to be classified under the
Present system shall continue to remain as part of
the public forest. (Emphasis supplied.)
 
Reliance on this provision is highly misplaced. P.D. No. 705 was promulgated
only on 19 May 1975, or four (4) years after the free patent and title were
awarded to Orcullo. Thus, it finds no application in the instant case. Prior
forestry laws, including P.D. No. 389,[27] which was revised by P.D. No. 705,
does not contain a similar provision. Article 4 of the Civil Code provides that
laws shall have no retroactive effect unless the contrary is provided. The
Court does not infer any intention on the part of then President Marcosto
ordain the retroactive application of Sec. 13 of P.D. No. 705. Thus, even
assuming for the nonce that subject parcel was unclassified at the time
Orcullo applied for a free patent thereto, the fact remains that when the free
patent and title were issued thereon in 1971, respondent in essence
segregated said parcel from the mass of public domain.Thus, it can no longer
be considered unclassified and forming part of the public forest as provided
in P.D. No. 705.
 
Respondents main basis for asserting that the subject lot is part of the
timberland or forest reserve is a purported L.C. Map No. 2961.[28] However, at
the hearing on 6 June 1997, the trial court denied admission of the map for
the purpose of showing that the subject lot falls within a timberland reserve
after respondent had failed to submit either a certified true copy or an official
publication thereof.[29] The Court observes that the document adverted to is a
mere photocopy of the purported original, and not the blue print as insisted
by respondent.[30] A mere photocopy does not qualify as competent evidence
of the existence of the L.C. Map. Under the best evidence rule, the original
document must be produced, except:
 
1. When the original has been lost or destroyed, or cannot be
produced in court, without bad faith on the part of the
offeror;
 
2. When the original is in the custody or under the control of
the party against whom the evidence is offered, and the
latter fails to produce it after reasonable notice;
40
 
3. When the original consists of numerous accounts or other
documents which cannot be examined in court without
great loss of time and the fact sought to be established
from them is only the general result of the whole; and
 
4. When the original is a public record in the custody of a
public officer or is recorded in a public office.[31]
 
In this case, respondent claims that the presentation of the original L.C. Map
is unnecessary since it is in the custody of a public officer or is recorded in the
public office.[32]Evidence, indeed, is admissible when the original of a
document is in the custody of a public officer or is recorded in a public
office. However, to prove its contents, there is a need to present a certified
copy issued by the public officer in custody thereof. [33] In addition, while the
L.C. Map may be considered a public document and prima facieevidence of
the facts stated therein,[34] the map, to be admissible for any purpose, must be
evidenced by an official publication thereof or by a copy attested by the
officer having legal custody of the record.[35]
The rules of admissibility must be applied uniformly. The same rule
holds true when the Government is one of the parties. The Government,
when it comes to court to litigate with one of its citizens, must submit to the
rules of procedure and its rights and privileges at every stage of the
proceedings are substantially in every respect the same as those of its
citizens; it cannot have a superior advantage. This is so because when a
sovereignty submits itself to the jurisdiction of the court and participates
therein, its claims and rights are justiciable by every other principle and rule
applicable to the claims and rights of the private parties under similar
circumstances.[36] Failure to abide by the rules on admissibility renders the
L.C. Map submitted by respondent inadmissible as proof to show that the
subject lot is part of the forest reserve.
 
Some officers from the CENRO office in Argao, Cebu testified that
they personally saw the subject lot and that it falls within the timberland or
forest reserve. Ultimately, however, the basis of their declaration is the L.C.
Map which respondent failed to present in accordance with the rules on
admissibility. Two foresters in fact testified that the subject lot was a
mangrove area.[37] The foresters who conducted the survey may have been

competent and their techniques reliable; nevertheless, the observation that
mangroves grow in the subject lot is not conclusive as to the nature of the
land at present or at the time the free patent and title were issued. Assuming
that the area is covered by mangroves when they surveyed it, there is no
proof that it was not planted with trees and crops at the time Orcullo applied
for free patent. Respondent was also unable to establish that the subject lot
has very deep and muddy soil or are mudflats, such that it is unsuitable for
fruit and non-fruit bearing trees.[38] Yet these are factual matters which the
Court does not generally delve into. As it is, a mere declaration from the said
officers, without any other supporting evidence, is not sufficient to establish
that the area in question is part of the forest reserve.
 
Even assuming that the L.C. Map submitted by respondent is
admissible in evidence, still the land in question can hardly be considered
part of the timberland or forest reserve. L.C. Map No. 2961, which purports
to be the correct map of the areas demarcated as permanent forest pursuant
of the provisions of P.D. No. 705 as amended [39] was made only in
1980. Thus, the delineation of the areas was made nine (9) years after Orcullo
was awarded the free patent over the subject lot.
 
In Republic v. Court of Appeals,[40] the Court, finding that the
disputed land was classified as timberland 25 years after private individuals
had commenced their continuous possession and cultivation thereof in good
faith, declared that they have the better right. The Court held:
 
It is not disputed that the aforesaid Land
Classification Project No. 3, classifying the 22-hectare area
as timberland, was certified by the Director of Lands only
on December 22, 1924, whereas the possession thereof by
private respondents and their predecessor-in-interest
commenced as early as 1909. While the Government has
the right to classify portions of public land, the
primary right of a private individual who possessed
and cultivated the land in good faith much prior
to such classification must be recognized and should
not be prejudiced by after-events which could not
have been anticipated. Thus, We have held that the
Government, in the first instance may, by
41
reservation, decide for itself what portions of public
land shall be considered forestry
land, unless private interests have
intervened before such reservation is made.
[41]
 (Emphasis supplied.)
 
Obviously, private interests have intervened before classification was made
pursuant to P.D. No. 705. Not only has Orcullo by herself and through her
predecessors-in-interest cultivated and possessed the subject lot since 1930,
a free patent was also awarded to her and a title issued in her name as early
as 1971. In fact, it appears that the issuance of the free patent and certificate
of title was regular and in order. Orcullo complied with the requisites for the
acquisition of free patent provided under Commonwealth Act No. 141 (Public
Land Act), as certified by the Director of Lands and approved by the
Secretary of Agriculture and Natural Resources.[42]
 
Besides, the records do not show that respondent has considered the lot in
question as forest reserve prior to the issuance of Free Patent No. 473408
and OCT No. 0-6667. To declare the land now as forest land on the authority
of L.C. Map No. 2961 approved only in 1980, and opinions based on the said
map, would unduly deprive petitioner of their registered property.
The Regalian doctrine is well-enshrined not only in the present Constitution,
but also in the 1935 and 1973 Constitutions. The Court has always recognized
and upheld the Regalian doctrine as the basic foundation of the State's
property regime. Nevertheless, in applying this doctrine, we must not lose
sight of the fact that in every claim or right by the Government against one of
its citizens, the paramount considerations of fairness and due process must
be observed. Respondent in this case failed to show that the subject lot is part
of timberland or forest reserve it adverted to. In the face of the
uncontroverted status of Free Patent No. 473408 and OCT No. 0-6667 as
valid and regular issuances, respondents insistence on the classification of
the lot as part of the forest reserve must be rejected.
 
 
 
WHEREFORE, the petition is GRANTED. The Decision of the Court of
Appeals dated 16 July 2001 and the Resolution dated 18 March 2002 are
REVERSED and SET ASIDE.The Decision of the Regional Trial Court
 42

dated 15 May 1999 dismissing the complaint for reversion and the complaint- Nagao. They allegedly demanded from defendant Valerio to execute the
in-intervention is REINSTATED. necessary document in order that the 2,250 square meters owned by them be
segregated from the property titled in the name of the defendants-appellees
[petitioners herein]. Defendants-appellees, however, refused to accede their
[G.R. No. 123231. November 17, 1997] demands.

HEIRS OF MARCIANO NAGAO, petitioners, vs. COURT OF

A motion to dismiss was filed by defendants-appellees on the following
APPEALS, SPOUSES PONCIANO MALLARI and GLORIA
grounds, viz.:
BINUYA, SPOUSES ELENA MALLARI and MELENCIO
TULABAN, and REGINA MALLARI, respondents.
1. The court has no jurisdiction over the nature of the action;
DECISION
2. Plaintiffs have no cause of action against the defendants, since suit for
DAVIDE, JR., J.: annulment of title which actually is a reversion proceedings should be
instituted by the Solicitor;
In this petition for review under Rule 45 of the Rules of Court,
petitioners seek the reversal of the decision of the Court of Appeals in CA- 3. Plaintiffs cause of action is barred by the statute of limitations, the lawsuit
G.R. CV No. 40017[1] which set aside the Order of the Regional Trial Court of having been instituted more than one year, or in fact almost fifteen years
Gapan, Nueva Ecija, Branch 35 in Civil Case No. 836[2] dismissing private after the issuance of the title.[4]
respondents complaint[3] which sought the declaration of nullity of the
Original Certificate of Title (OCT) issued pursuant to a Free Patent in the In its Order of 21 September 1992,[5] the trial court granted petitioners
name of petitioners. motion to dismiss on the ground that:
The factual antecedents, as succinctly summarized by the Court of
[The] action to annul the subject certificate of title, which is the plaintiffs
Appeals, are as follows:
principal cause of action, should be instituted by the Solicitor
General. (Lopez v. Padilla, 45 SCRA 44; Maximo v. CFI of Capis (sic), 182
Plaintiffs-appellants [private respondents] filed a complaint for the
SCRA 420; and Sumali v. Judge of CFI Cotabato, 96 Phil. 946, cited by the
declaration of nullity of Original Certificate of Title No. P-8265 issued in the
defendants).
name of the heirs of Marciano Nagao and covering Cad. Lot. No.
3275. Plaintiff-appellants alleged that the issuance of the said title was on
Private respondents appealed the order of dismissal to respondent court
account of the fraud, deceit, and misrepresentation committed by defendant
raising this lone assignment of error:
Macario Valerio. An information for perjury was even filed on November 2,
1983 against defendant Valerio, who unlawfully attested that Lot No. 3275
was not occupied or being claimed by other persons. Plaintiff-appellants THE COURT ERRED IN DISMISSING THE CASE AND/OR ALL THE
alleged that part of the subject property was owned by their predecessors-in- CAUSES OF ACTION OF THE PLAINTIFF-APPELLANTS.[6]
interest Rufino Mallari and Fermina Jamlig and that they were in possession
of the said land since 1920. They recently discovered that their entire Lot No. In its decision[7] of 20 September 1995, the Court of Appeals set aside the
3275 was registered by defendant Valerio under Free Patent No. (III-2) challenged order of the trial court and reinstated private respondents
001953 and OCT No. P-8265 in the name of the heirs of Marciano complaint. Applying Agne v. Director of Lands,[8] respondent court

distinguished private respondents action from a review of the decree of title
on the ground of fraud, and held that the rule on the incontrovertibility of a
certificate of title upon the expiration of one year after the entry of the decree
did not apply as the action for cancellation of the patent and certificate of title
issued pursuant thereto was instituted on the ground that they were null and
void as the Bureau of Lands had no jurisdiction to issue them, the land
having been withdrawn from the public domain prior to the award of the
patent and grant of certificate of title to another person.
[9]
Petitioners motion to reconsider  having been denied by the Court of
Appeals in its Resolution of 20 December 1995,[10] petitioners filed the
petition at bar alleging that:
I general could initiate. The propriety of that ruling was the primary issue
THE HONORABLE COURT OF APPEALS ERRED IN REVERSING THE
ORDER OF DISMISSAL, CONSIDERING THE FACT THAT PRIVATE
RESPONDENTS DO NOT HAVE THE LEGAL PERSONALITY TO CONTEST
THE FINAL AWARD MADE BY THE DIRECTOR OF LANDS, AND CIVIL
COURTS ARE DEVOID OF JURISDICTION AND AUTHORITY TO REVIEW
OR CONTROL SUCH FINAL JUDGMENT.
II
PRIVATE RESPONDENTS PRINCIPAL CAUSE OF ACTION IN THIS CASE
IS FOR THE AWARD IN THEIR FAVOR OF 2,250 SQUARE METERS
PORTION OF THAT PARCEL OF LAND COVERED BY OCT NO. P-8265
AND CIVIL COURTS HAVE NO JURISDICTION OVER THE NATURE OF
THE ACTION SINCE IT IS THE DIRECTOR OF LANDS, NOT THE CIVIL
COURTS, WHO IS VESTED WITH JURISDICTION TO DECIDE [TO]
WHOM TO AWARD DISPOSABLE LANDS OF THE PUBLIC DOMAIN.
III
PRIVATE RESPONDENTS HAVE NO CAUSE OF ACTION AGAINST THE
PETITIONERS, SINCE [A] SUIT FOR ANNULMENT OF TITLE WHICH
ACTUALLY IS A REVERSION PROCEEDINGS [sic], SHOULD BE
INSTITUTED BY THE SOLICITOR GENERAL.
43
IV
PRIVATE RESPONDENTS CAUSE OF ACTION IS BARRED BY THE
STATUTE OF LIMITATIONS, THE LAWSUIT HAVING BEEN INSTITUTED
MORE THAN ONE YEAR, OR IN FACT ALMOST FIFTEEN YEARS, AFTER
THE ISSUANCE OF THE TITLE.
The Court of appeals correctly set aside the challenged order of the trial
court, but not necessarily for the correct reasons. The trial court sustained
the second ground of petitioners motion to dismiss, namely, that private
respondents had no cause of action since the suit for annulment of title
amounted to a reversion proceeding which only the Office of the Solicitor
before the Court of Appeals, as the trial court did not deem it necessary to
rule on the other grounds, viz., (a) lack of jurisdiction over the nature of the
action; and (2) that private respondents cause of action was barred by the
statute of limitations since the action was filed more than one year after
issuance of the title.
The rule is settled that a motion to dismiss a complaint hypothetically
admits the truth of the facts alleged therein. [11] In their complaint,[12] private
respondents specifically alleged that: (a) they are the heirs of Rufino Mallari
and Fermina Jamlig who are part owners of a parcel of land known as Cad.
324-D, Lot 3275, situated at Mambangan, San Leonardo, Nueva Ecija; (b) the
portion belonging to private respondents, with an area of 2,250 square
meters, was covered by tax declarations in their names, occupied and
possessed by their predecessors-in-interest since 1920 and continuously
thereafter until the present; (c) their possession has been peaceful, public,
continuous, adverse and in the concept of an owner; (d) on or about 18
February 1974, defendant Macario Valerio, in order to deprive private
respondents of their rights over and ownership of the portion of the lot,
committed perjury, for which he is now criminally charged in court, by
causing the entire Lot 3275 to be registered under Free Patent No. (III-2)
001953 and the issuance of original certificate of Title No. P-8265, both in
the name of Marciano Nagao, represented by Macario Valerio; (e) on account
of the fraud, deceit and misrepresentation committed by Macario Valerio, the
grant of the patent and issuance of the title were null and void and the
indefeasibility of a title issued pursuant thereto one year after did not apply;

(f) upon discovery, only recently, of the issuance of the title in the name of
the Heirs of Marciano Nagao, private respondents demanded from Macario
Valerio the execution of the necessary documents segregating the 2,250
square meter portion and transferring the property to them, however
Macario refused without justifiable cause or reason; and (g) as a consequence
of Macarios refusal, they suffered moral damages and were compelled to
incur expenses and secure the services of counsel. Private respondents then
prayed, inter alia, that Original Certificate of Title No. P-8265 be declared
null and void, or that the 2,250 square meter portion be segregated and the
Register of Deeds ordered to issue a title over said portion in their names,
and that petitioners be ordered to pay actual, moral and other damages,
attorneys fees and litigation expenses.
It is then clear from the allegations in the complaint that private
respondents claim ownership of the 2,250 square meter portion for having
possessed it in the concept of an owner, openly, peacefully, publicly,
continuously and adversely since 1920. This claim is an assertion that the lot
is private land, or that even assuming it was part of the public domain,
private respondents had already acquired imperfect title thereto under
Section 48(b) of C.A. No. 141, otherwise known as the Public Land Act, as
amended by R.A. No. 1942. This section provides:
SECTION 48. The following described citizens of the Philippines, occupying
lands of the public domain or claiming to own any such lands or an interest
therein, but whose titles have not been perfected or completed, may apply to
the Court of First Instance of the province where the land is located for
confirmation of their claims and issuance of a certificate of title therefor,
under the Land Registration Act, to wit:
xxx
(b) Those who by themselves or through their predecessors in
interest have been in open, continuous, exclusive and
notorious possession and occupation of agricultural lands of
the public domain, under a bona fide claim of acquisition of
ownership, for at least thirty years immediately preceding
the filing of the application for confirmation of title except
when prevented by war or force majeure. These shall be
44
conclusively presumed to have performed all the conditions
essential to a Government grant and shall be entitled to a
certificate of title under the provisions of this chapter.[13]
Under Section 48, a subject lot is, for all legal intents and purposes,
segregated from the public domain, because the beneficiary is conclusively
presumed to have performed all the conditions essential to a Government
grant and shall be entitled to a certificate of title under the provisions of this
chapter.
Consequently, merely on the basis of the allegations in the complaint,
the lot in question is apparently beyond the jurisdiction of the Director of the
Bureau of Lands and could not be the subject of a Free Patent. Hence,
dismissal of private respondents complaint was premature and trial on the
merits should have been conducted to thresh out evidentiary matters.
It would have been entirely different if the action were clearly
for reversion, in which case, it would have to be instituted by the Solicitor
General pursuant to Section 101 of C.A. No. 141, which provides:
SEC. 101. All actions for the reversion to the Government of lands of the
public domain or improvements thereon shall be instituted by the Solicitor
General or the officer acting in his stead, in the proper courts, in the name of
the [Republic] of the Philippines.
In light of the above, and at this time, prescription is unavailing against
private respondents action. It is settled that a Free Patent issued over private
land is null and void,[14] and produces no legal effects whatsoever. Quod
nullum est, nullum producit effectum. [15] Moreover, private respondents
claim of open, public, peaceful, continuous and adverse possession of the
2,250 square meter portion since 1920, and its illegal inclusion in the Free
Patent of petitioners and in their original certificate of title, gave private
respondents a cause of action for quieting of title which is imprescriptible.
[16]
 The complaint of private respondents may thus likewise be considered an
action for quieting of title.
The grounds then relied upon in petitioners motion to dismiss are not
indubitable and cannot be impressed with merit. We are not, however,
foreclosing the presentation of evidence during trial on the merits that the
 45

land in question is not private property and that private respondents are not x-------------------------------------------x
entitled to the benefits of Section 48 of C.A. No. 141.
 
WHEREFORE, the instant petition is DENIED for lack of merit and
the challenged judgment of the Court of Appeals is AFFIRMED, but for the D E C I S I O N
reasons stated above.  
GARCIA, J.:
Costs against petitioners.
Via this petition for review on certiorari under Rule 45 of the Rules of Court,
SO ORDERED. petitioner Edgardo D. Dolar seeks the annulment and setting aside of the
Orders dated January 3, 2002[1] and March 5, 2002[2] of the Regional Trial
Court at Iloilo City, Branch 38, in its consolidated Civil Cases No. 98-033
EDGARDO D. DOLAR, G.R. No. 152663 and 00-140.
   
Petitioner
The facts:
, Present:
 
    Petitioner and Serafin Jaranilla were co-owners of a parcel of land
with an area of 4.6 hectares, identified as Lot No. 1, Pcs-06-000744 (Lot No.
  PANGANIBAN, J., Chairman 1, for brevity), situated in Brgy. Lublub, Municipality of Dumangas, Iloilo.
Said property forms part of Lots No. 4181 and 4183 of the Dumangas
- versus - SANDOVAL-
Cadastre.
GUTIERREZ,
   
CORONA, On September 16, 1981, petitioner and Jaranilla donated Lot No. 1 to
  respondent Barangay Lublub, subject to the following conditions:
CARPIO-  
BARANGAY LUBLUB (now P.D. MORALES, A.) That the area donated shall be for the purpose of
Monfort North) of the Municipality of
and con[s]tructing building and/or establishing public plaza,
Dumangas, herein represented by its GARCIA, JJ. sports complex, public market, health centers and the like for
Punong Barangay, PEPITO DUA,
PHILIPPINE LONG DISTANCE   the use of the Barangay of Lublub which area shall be
TELEPHONE COMPANY, DUMANGAS hereinafter be known as DON VENANCIO DOLAR PLAZA
Promulgated: and shall be so designated in a proper landmark;
WATER DISTRICT, 4th ILOILO
MOBILE GROUP, ILOILO    
PROVINCIAL POLICE, ILOILO
REGIONAL TRIAL COURT, BRANCH   B.) That the construction and development of the area
68, above-described shall be initiated and completed within five
 
(5) years from the execution of this Deed of Donation and
Responde should the same be not made or completed then this Deed of
November 18,
nts. Donation shall have no force and effect whatsoever and the
2005
ownership of the above-described property will revert back

to the DONORS including all or any unfinished improvement
the DONEE might have placed or constructed.
 
C.) That . . . should the use of the area be converted to uses
other than herein stipulated, then this DEED OF
DONATION shall be deemed revoked and the ownership
shall revert back to the DONORS . (Underscoring added)[3]
Then barangay captain Jose Militar accepted the donation in behalf of Brgy.
Lublub.
 
Following the execution of the deed of donation, Brgy. Lublub immediately
took possession of the donated property, which soon became the site of
several government office buildings and recreational facilities. For what in
hindsight is a typical case of complacency on the part of a government unit,
respondent barangay did not have the donation registered under its
name. On April 12, 1989, or almost eight (8) years from contract execution,
petitioner was issued Transfer Certificate of Title (TCT) No. T-129837[4] by
the Registry of Deeds of Iloilo covering the donated area.
 
Sometime in June 1989, petitioner executed another deed[5] donating to Brgy.
Lublub, represented by its incumbent barangay captain, the very same area
he and Serafin Jaranilla had earlier donated to the same donee. The second
deed of donation contained exactly the same conditions expressly set forth in
the first.
 
Barangay Lublubs peaceful possession of the donated area remained
undisturbed until mother Lots No. 4181 and 4183 were included in the
published list of tax delinquent properties for disposition. At the auction sale
that followed, petitioner emerged as the highest bidder and was, accordingly,
awarded the property.
 
On May 6, 1998, in the Regional Trial Court (RTC) at Iloilo City, petitioner
filed against Brgy. Lublub a complaint for Quieting of Title and Recovery of
46
Possession With Damages involving the 4.6-hectare area he had earlier
donated. Basically, petitioner claimed that the donation in question had
ceased to be effective, the donee barangay having failed to comply with the
conditions of the donation. Impleaded as co-defendants of Brgy. Lublub were
entities each occupying a portion of the donated property, such as the
Philippine Long Distance Company (PLDT), the Dumangas Water District,
Branch 86 of RTC-Iloilo and the Iloilo Provincial Police. Docketed in the trial
court as Civil Case No. 98-033, the complaint alleged, inter alia, as
follows:
10. That ... defendant [barangay] failed to build or establish
within the period therein stipulated, a public plaza, sports
complex and like structures for the use of Barangay Lublub
and neither had it designated in a proper landmark that the
area donated is known as the Don Venancio Dolar Plaza
11. That defendant barangay allowed the use of the area
donated to be converted to uses other than those provided in
the donation documents when it allowed entities like
defendants PLDT, Dumangas Water District, PNP Mobile
Force, and Branch 68 of the RTC of Iloilo, to construct
buildings and occupy portions of the lot in question . . .;
12. That because of the failure of defendant barangay to
declare the lot in question in its name for taxation purposes,
the same was sold at public auction for non-payment of real
property taxes . . . .
13. That in the light of the terms and conditions in the Deeds
of Donation and actuations of the defendant barangay in
relation to the property donated; the donation . . . has
automatically lost its force and effect whatsoever and the
ownership of the property has reverted to the plaintiff or the
donation has been deemed automatically revoked . . .;
14 . That the act of defendant barangay in allowing the
construction of buildings by public and private entities on
the donated property and holding offices therein has cast a

doubt or cloud on the title of the plaintiff over the property
in litigation . . . .
  And, as grounds for its motion to dismiss embodied in the same answer,
Brgy. Lublub raised the matter of lack of cause of action or prescription of the
15. That the plaintiff, as exclusive, absolute, and registered
cause of action, if any, thus:
owner of the property in question is entitled to the  
possession of the same.[6] 
In its Answer With Counterclaim,[7] Brgy. Lublub, after traversing the
material allegations of the complaint, alleged the following as affirmative
defenses:
3.2. The said donation was made and accepted on the same
public instrument duly notarized by notary public Nicolas P.
Sonalan xxx
3.3. The acceptance of donation was made by then Barangay
Captain of Barangay Lublub Jose Militar with authority from
the barangay council;
3.4. After the said deed of donation was executed in
compliance with the conditions set forth in the deed of
donation and within five (5) years from its execution thereof
several structures/buildings were constructed thereon for
the use and benefit of Brgy. Lublub, Dumangas, Iloilo. .;
3.5. Later on . . . (PLDT) was invited to construct an office
building on subject property for the benefit and use of the
residents of Barangay Lublub, Dumangas, Iloilo;
3.6. Likewise for the use and benefit of the barangay
residents an office building of Dumangas Water District was
constructed . . .;
3.7. Likewise a PNP Mobile Force was put up on the said
place and a PNP office, in line with this, was constructed . . .;
3.8. Likewise because of the desire of the barangay residents  
to make the subject property a plaza and a center place for  
their needs, Branch 68 of the RTC of Iloilo was established
47
thereon. All these for the use and benefit of Barangay
Lublub, now P.D. Monfort North,
4.3                                        Plaintiff proceeded with his
complaint . . . without first seeking the revocation of
the deed of donation in a proper court . . . as provided
for under Article 764 of the New Civil Code;
4.4                                        What plaintiff did was to
unilaterally revoke the deed of donation and
proceeded with the filing of this case with the
assumption that the deed of donation was already
validly revoked. xxx.
 
xxx xxx xx
4.6 It must be noted that the deed of donation was executed
in September 16, 1981. Even if the donee . . . failed to
comply with the conditions of the deed within 5
years or until 1986, plaintiff should have sought
revocation of the donation within 4 years from 1986
or until 1990 only. xxx xxx;
 
4.7 The deed of donation having been executed in 1981 yet,
the donee . . . took possession of the same in concept
of an owner, with just title, adverse, open, peaceful
and continuously up to the present. Hence, even if
the donation is void or conditions were not complied
with, the property is now owned by the donee, as it
can be considered that it has been acquired by
prescription.

On top of its Answer with Counterclaim, Brgy. Lublub, this time renamed
and known as Brgy. P.D. Monfort North, filed with the same branch of the
court a complaint for Cancellation of Title, Reconveyance/Issuance of Title,
Declaration of Nullity of Notice of Delinquency in the Payment of Real
Property Tax.[8]Named as defendants were petitioner and his wife, certain
municipal officials of Dumangas and the Provincial Treasurer and Register of
Deeds of Iloilo. In its complaint, docketed as Civil Case No. 00-140, the
plaintiff barangay averred having conducted an investigation which led to the
discovery that the spouses Dolar, colluding with some local officials,
engineered the whole levy process which culminated in the auction sale of
what is now a very valuable donated property.
To Brgy. Lublubs complaint, petitioner interposed a Motion to
[9]
Dismiss  on grounds of forum shopping and litis pendentia, obviously on
account of the pendency of Civil Case No. 98-033.
 
Eventually, the two (2) cases, Civil Cases No. 98-033 and 00-140,
wherein the respective principal defendants have each interposed a motion to
dismiss, were consolidated.
In the herein assailed Order dated January 3, 2002,[10] the trial
court, on the finding that petitioners action was already barred by extinctive
prescription under Article 764,[11] in relation to Articles 733[12] and 1144 (1)
[13]
 of the Civil Code, granted the Barangays motion to dismiss in Civil Case
No. 98-033 and denied petitioners similar motion in Civil Case No. 00-140,
to wit:
 
WHEREFORE, in view of all the foregoing, this Court
resolved, as it hereby resolves, the pending incidents in these
two cases, to wit:
1. Defendant Barangay Lublubs built-in
Motion to Dismiss/Affirmative Defenses
raised in its Answer in Civil Case No. 98-
033, being impressed with merit, is granted;
consequently, said Civil Case No. 98-033 is
hereby ordered dismissed;
2. Defendants-spouses Edgardo D. Dolars
and Corazon Yaps Motion to Dismiss in Civil
48
Case No. 00-140, being without merit, the
same is herby denied.
With this disposition, this Court shall proceed hearing Civil
Case No. 00-140 entitled Barangay P.D. Monfort North,
Dumangas Iloilo, etc. vs. Municipality of Dumangas, Iloilo, et
al.
SO ORDERED.
Explains the trial court in its impugned Order of January 3, 2002:
 
Stress should be made that the Deed of Donation
executed by Edgardo D. Dolar (plaintiff in Civil Case No. 98-
033) in favor of Barangay Lublub xxx clearly imposes the
following conditions:
 
xxx xxx xxx
 
Based on the foregoing conditions, . . . should the
barangay donee fails (sic) to comply therewith, the donor
had the right to bring action to revoke the donation (Art.
764, supra) within a period of ten (10) years after the 5-year
period of non-compliance with the conditions in the deed of
donation (Art. 733, supra, in relation to Art. 1144(1), supra).
Since the deed of donation was executed on September 16,
1981, the 5-year period lapsed in 1986; consequently, the
action to revoke should have been brought not later than
1996, however, it appears that Civil Case No. 98-033 was
filed by plaintiff Dolar on May 6, 1998.
 
Obviously, since the petitory portion of his
complaint in Civil Case No. 98-033 seeks for quieting of his
title over the subject property and seeks judgment declaring
him to be the absolute owner thereof, plaintiff Dolar also
seeks the revocation of the subject deed of donation. xxx..
xxx. Accordingly, in the light of the foregoing
jurisprudence, the action to revoke donation was to have

been filed within ten (10) years from the time the action
accrued, i.e., from the time of the non-compliance of the
conditions .
 
In yet another Order dated March 5, 2002,[14] same court denied
petitioners motion for reconsideration.
Therefrom, petitioner directly comes to the Court on pure questions of law,
submitting issues which may be formulated in the following wise:
1.                   Whether or not his action is one for revocation of
donation instead of for quieting of title; whether or
not the action for quieting has prescribed.
2.                   Whether or not the deed of donation in question
is (a) valid for defective acceptance and/or (b) no
longer effective by reason of the automatic reversion
clause therein.
3.                  Whether or not respondent barangay had
acquired the property in question by acquisitive
prescription.
The petition lacks merit.
It bears stressing that petitioner, at the outset, predicated his action to quiet
title on the ground of ineffectiveness of the donation, albeit he would later
add the matter of its invalidity. Indeed, the make or break issue to be
resolved and to which all others must yield turns on the validity and/or
continued efficacy of the subject donation. Valid and effective, the donation
virtually forecloses any claim which petitioner may have over the donated
property against the donee and other occupants thereof, and his action to
quiet title is virtually doomed to fail. Invalid and ineffective, however, the
arena is left open for petitioner to recover ownership and possession of the
donated property and have the cloud on his title thereto, if any there be,
removed.
According to petitioner, the subject donation is, by force of Article 745[15] of
the Civil Code, void, the accepting barangay captain being without sufficient
49
authority for the purpose. On this point, petitioner cites Section 88 of Batas
Pambansa Blg. 337[16] - the law then in force - and Sections 91 and 389
the Local Government Code of 1991[17]. In gist, these provisions empower
the punong barangay to enter into contracts for the barangay upon
authorization of the Sangguniang Barangay, or, in the alternative,
the Sanggunian may authorize the barangay head to enter into contracts for
the barangay.
 
Excepting, however, respondent barangay alleged that then barangay captain
Jose Militar accepted the donation in the same Deed of Donation per
authority granted by the barangay council.[18]
The question then of whether Militar was clothed with authority to accept the
donation for respondent barangay stands as disputed. Since the present
recourse is interposed on pure questions of law, we need not resolve the
factual issue regarding Militars authority, or lack of it, to accept the donation
in behalf of respondent barangay. It should be pointed out, nevertheless, that
petitioner is hardly the proper party to challenge the validity of the donation
which is presumed to be valid - on the ground he presently invokes. The
honor to question Militars ultra vires act, if this be the case, belongs to
the Sanggunian of Barangay P.D. Monfort North. And more to the point,
even assuming ex gratia argumenti petitioners legal standing to raise such a
question, the final answer would still lean towards the validity of the
donation. For, from the allegations of all the parties, it would appear that,
through the years, the Sanggunian of Lublub as well as all the
succeeding Sangunians of P.D. Monfort North neither repudiated the
acceptance of the donation by Militar nor acted in a manner reflective of their
opposition to the donation. On the contrary, the respondent barangay has
been enjoying the material and public-service benefits arising from the
infrastructures projects put up on the subject property. In a very real sense,
therefore, the Sangguniang Barangay and the good people of P.D. Monfort
North, by availing themselves of such benefits for more than two decades
now, effectively ratified Militars acceptance of the donation.
This brings us to the question of the efficaciousness of the donation.
Petitioner asserts that the 1981 and 1989 deeds of donation, pursuant to the

uniform automatic rescission/reversion clauses therein, ceased to be effective
upon respondents failure to meet the conditions for which it was charged to
fulfill. To petitioner, the automatic rescission/reversion clause works, in
appropriate instances, to revoke the donation and revert the ownership of the
donated property to the donor without the need of judicial intervention. In
support of this argument, petitioner cites De Luna vs. Abrigo[19] wherein this
Court put to rest any lingering doubt as to the validity of a stipulation
providing for the automatic reversion of the donated property to the donor
upon non-compliance by the donee of the conditions or charges incumbent
upon him.
Cited likewise is the subsequent complementary holding in Roman Catholic
Archbishop of Manila vs. Court of Appeals[20], thus:
Although it is true that under Article 764 of the Civil Code an
action for the revocation of a donation must be brought
within four (4) years from the non-compliance of the
conditions of the donation, the same is not applicable in the
case at bar. The deed of donation involved herein expressly
provides for automatic reversion of the property donated in
case of violation of the condition therein, hence a judicial
declaration revoking the same is not necessary.
De Luna and Archbishop of Manila are, to be sure, apropos. However,
petitioners argument to support his thesis on the automatic rescission of the
donation in question and the consequent reversion of the property to the
donor is an incomplete presentation of the Courts pronouncements on the
point.
 
We shall explain.
If the corresponding contract of donation expressly provides for
automatic rescission and/or reversion in case of breach of the condition
therein, and the donee violates or fails to comply with the condition, the
donated property reverts back automatically to the donor. Such provision, De
Luna teaches, is in the nature of an agreement granting a party the right to
rescind a contract in case of breach, without need of going to court and that
upon the happening of the resolutory condition or non-compliance with the
50
conditions of the contract, the donation is automatically revoked without
need of a judicial declaration to that effect. Where, however, the donee
denies, as here, the rescission or challenges the propriety thereof, then only
the final award of the court can, to borrow from University of the Philippines
vs. de los Angeles,[21] conclusively settle whether the resolution is proper or
not. Or, in the language of Catholic Archbishop of Manila:[22]
 
The rationale for the foregoing is that in contracts providing
for automatic revocation, judicial intervention is necessary
not for purposes of obtaining a judicial declaration
rescinding a contract already deemed rescinded by virtue of
an agreement providing for rescission even without judicial
intervention, but in order to determine whether or not the
rescission was proper.
When a deed of donation, . . . expressly provides for
automatic revocation and reversion of the property donated,
the rules on contract and the general rules on prescription
should apply, and not Article 764 of the Civil Code. Since
Article 1306 of said Code authorizes the parties to a contract
to establish such stipulations, . . . not contrary to law, . . .
public order or public policy, we are of the opinion that, at
the very least, that stipulation of the parties providing for
automatic revocation of the deed of donation, without prior
judicial action for that purpose, is valid subject to the
determination of the propriety of the rescission sought.
Where such propriety is sustained, the decision of the court
will be merely declaratory of the revocation, but it is not in
itself the revocatory act.
In the case at bench, it cannot be gainsaid that respondent barangay denied
or challenged the purported revocation of the donation. In fact, the denial or
challenge is embodied in respondent barangays complaint in Civil Case No.
00-140 and in its Answer cum motion to dismiss in Civil Case 98-033, which
similarly prayed for, among other things, the cancellation of petitioner's title
on the subject property.
 
The foregoing discussion veritably disposes of the second formulated issue.

 
Now back to the first issue. It is petitioners posture that his action in Civil
Case No. 98-033 is one for quieting of title under Article 476 [23] of the Civil
Code, not, as erroneously regarded by the trial court, an action to revoke
donation under Article 764 of the Code which, insofar as pertinent, reads as
follows:
 
Article 764. The donation shall be revoked at the instance of
the donor, when the donee fails to comply with any of the
conditions which the former imposed upon the latter.
xxx xxx xxx.
This action shall prescribe after four years from the
noncompliance with the condition, may be transmitted to the
heirs of the donor, and may be exercised against the donee's
heirs. (Underscoring added)
Petitioners posture does not persuade.
As aptly observed by the trial court, the petitory portion of
petitioners complaint in Civil Case No. 98-033 seeks for a judgment declaring
him the absolute owner of the donated property, a plea which necessarily
includes the revocation of the deed of donation in question. Verily, a
declaration of petitioner absolute ownership appears legally possible only
when the deed of donation is contextually declared peremptorily revoked.
Owing to the prescriptive component of Article 764 of the Civil Code,
petitioners dread of the invocation and application of said provision is at
once apparent as it is understandable. For, an action to revoke thereunder
prescribes after four (4) years from non-compliance by the donee with any of
the conditions set forth in the deed of donation. A little less than seventeen
(17) years separate September 16, 1981, when the Deed of Donation was
executed, from May 6, 1998, when petitioner filed his complaint in Civil Case
No. 98-033. Seventeen (17) years is, in turn, too far removed, as shall be
illustrated shortly, from the 4-year prescriptive period referred to in Article
764 or even from the 10-year period under Article 1144.[24]
51
It cannot be overemphasized that respondent barangay traces its claim of
ownership over the disputed property to a valid contract of donation which is
yet to be effectively revoked. Such rightful claim does not constitute a cloud
on the supposed title of petitioner over the same property removable by an
action to quiet title. Withal, the remedy afforded in Article 476 of the Civil
Code is unavailing until the donation shall have first been revoked in due
course under Article 764 or Article 1144 of the Code.
Lest it be overlooked, the rule on the imprescriptibility of actions to quiet title
admits of exceptions. The trial court correctly mentioned one, referring to a
situation where the plaintiff in an action to quiet title is not in actual
possession of the land.[25] In the case at bench, petitioner is not in possession
of the property. For sure, he is even asking in his complaint in Civil Case No.
98-033 for recovery of possession of the donated property.
 
Given the above disquisition, petitioner can hardly fault the trial court for its
holding that petitioners action to revoke is time-barred. As may be recalled,
respondent barangay had, under the terms of the deed of donation, five (5)
years from the execution of the conveying deed in September 1981, or up
September 1986, within which to introduce and complete the contemplated
development of the donated area. Following Article 764 of the Civil Code,
petitioner had four (4) years from September 1986, or up to September 1990,
within which to seek the revocation of the subject donation on the ground of
breach of contract.
The Court can grant that the prescription of actions for the revocation of
onerous donations, as here, are governed by the general rules on
prescription,[26]which, in context, is Article 1144 of the Civil Code providing
that actions upon a written contract shall be brought within ten (10) years
from accrual of the right of action. Ten years from September 1986 the date
when petitioners right to revoke accrued - would be September 1996. Here,
however, what partakes as petitioners suit to revoke was filed only in May
1998.
In all, petitioners right of action to revoke or cancel the donation had indeed
prescribed, regardless of whether the applicable legal provision is Article 764
or the favorable Article 1144 of the Civil Code. It should be stated in this
regard, however, that respondent barangay had disputed the existence of the

grounds upon which petitioner anchored his right to revoke, claiming it had
already complied with the construction and development conditions of the
donation. From the records, it would appear that respondent barangays boast
of compliance is not an empty one. As we see it, the establishment on the
donated area of telephone service, a water service, a police mobile force, and
a courtroom, all for the benefits of the barangay residents, substantially
satisfies the terms and conditions of the subject donation. The concrete
paving of roads and the construction of government offices, sports complex
for public enjoyment and like infrastructures which, per respondent
barangays estimate, cost not less than P25 Million, [27] add persuasive
dimension to the conclusion just made.
Petitioner's long silence vis--vis the kind of development structures that
Barangay Lublub had decided to put up or allowed to be established on the
subject area cannot but be taken as an indicia of his satisfaction with
respondent barangays choice of public service projects. The prolonged silence
was broken only after the provincial and municipal governments advertised,
then sold the property in a public auction to satisfy questionable tax
liabilities.
Much is made by petitioner about his execution of the 1989 deed of donation,
which, to him, should be utilized as a point of reference in determining the
prescriptive period[28] defined under either Article 764 or 1144 of the Civil
Code. He states:
 
xxx It has not been explained up to this juncture why the
Deed of Donation of June 1989 is not being mentioned or
considered when it is alleged in the complaint. As will be
noted in the Deed of Donation dated 1981 the property was
jointly owned by plaintiff Dolar and Jarantilla, with separate
title; in Annex B, the Donation of 1989 only plaintiff Dolar
signed the same as the only registered owne[r] of the lot
donated; xxx. As previously adverted to, the prescriptive
period for violation or contravention of the terms and
conditions of Annex B should be reckoned from 1994 and
therefore this action filed in 1998 is within the period.
With the view we take of the case, the execution of the 1989 deed of donation
is really of little moment in terms of furthering petitioners cause. For, at that
52
time, the property subject of this recourse was no longer his to donate, having
earlier relinquished his ownership thereon. Nemo dat qui non habet No one
can give what he has not.[29] Stated a bit differently, respondent barangays
right over the donated area proceeds from the 1981 donation. The legal
effects, therefore, of its action or inaction respecting the donated property
should be assayed on the basis of the 1981 donation.
The last issue raised pivots on whether or not respondent barangay can
acquire the subject property by acquisitive prescription, the petitioners thesis
being that prescription does not run against registered land.[30]
 
Petitioners point is theoretically correct and may perhaps tip the balance in
his favor, but for the fact that the respondent barangay anchors its title and
right over the donated lot, first and foremost, by virtue of the deed of
donation. Admittedly, standing alone, adverse, continuous and long
possession of a piece of real property cannot defeat the title of a registered
owner. But, then, this postulate presupposes a Torrens title lawfully acquired
and issued. As may be recalled, however, respondent barangay instituted
Civil Case No. 00-140, supra, for Cancellation of Title,
Reconveyance/Issuance of Title precisely because of the dubious manner by
which petitioner allegedly acquired his TCT No. T-129837 over a lot he
admits donating.
 
Parenthetically, petitioners contention that the donation was invalid because
it was not registered in the Registry of Property deserves no merit. For, as
between the parties to the donation and their assigns, the registration of the
deed of donation with the Registry of Deeds is not needed for its validity and
efficacy. In Pajarillo vs. Intermediate Appellate Court,[31] the Court
emphatically dismissed the notion that registration was necessary to make
the donation a binding commitment insofar as the donor and the donee were
concerned.
As a final consideration, let it be made clear that this opinion merely resolves
the question of the correctness of the dismissal by the trial court of Civil
Case No. 98-033 on the basis of facts attendant thereto in the light of
applicable laws and jurisprudence. It is not meant to prejudge the outcome
of Civil Case No. 00-140 which, while related to Civil Case No. 98-033,
tenders different issues, foremost of which is the validity of a Torrens title
issued over a piece of land to one who had previously donated the same.

 
 
WHEREFORE, the petition is DENIED for lack of merit.
[G.R. No. 152947. July 7, 2004]
EAST ASIA TRADERS, INC., petitioner, vs. REPUBLIC OF THE
PHILIPPINES, represented by the DIRECTOR, LANDS
MANAGEMENT BUREAU, respondent.
DECISION
SANDOVAL-GUTIERREZ, J.:
Before us is a petition for review on certiorari under Rule 45 of the 1997
Rules of Civil Procedure, as amended, assailing the Decision[1] dated
November 26, 2001 and the Resolution[2]dated April 9, 2002, both rendered
by the Court of Appeals in CA-G.R. SP No. 59627, East Asia Traders, Inc. vs.
Hon. Regional Trial Court (RTC), Tanauan, Batangas, Branch 83, and
Republic of the Philippines, represented by the Director of Lands
Management Bureau.
The factual antecedents as borne by the records are:
On December 15, 1986, Galileo Landicho filed with the Bureau of Lands,
District Office at Lemery, Batangas, Free Patent Application No. 1427. This
application[3] covers Lot No. 4355 consisting of 00.1312 hectare situated in
Niogan, Laurel, Batangas. On March 6, 1987, then Acting District Land
Officer Constante Asuncion, approved[4] the application and issued Free
Patent No. 1516 in Landichos name. Subsequently or on January 22, 1988,
the Registry of Deeds of Tanauan, Batangas issued to him Original Certificate
of Title (OCT) No. P-3218.
On June 7, 1989, Landicho sold the lot to Teresita Reyes. Forthwith,
Landichos OCT No. P-3218 was cancelled by the same Registry of Deeds and
in lieu thereof, TCT No. 36341 was issued in the name of Teresita Reyes. In
turn, on June 7, 1990, Reyes sold the same lot to East Asia Traders,
Inc., petitioner, represented by its Vice-President, Betty Roxas
Chua.Consequently, the Register of Deeds cancelled TCT No. 36341 in the
53
name of Reyes and in lieu thereof, issued TCT No. 38609 in the name of
petitioner.
Meanwhile, the Department of Environment and Natural Resources
(DENR), pursuant to Section 91 of Commonwealth Act No. 141, as amended,
[5]
 conducted an investigation to ascertain the truth of the material facts
alleged in various free patent applications or whether they are maintained
and preserved in good faith. The investigation covered several parcels of land,
including Lot 4355. The DENR found that at the time Landicho applied for a
free patent, Lot 4355 was inalienable, being a property of public dominion
intended to be used as a national road.
This prompted the Republic of the Philippines, respondent, through the
Director of the Lands Management Bureau to file, on March 9, 1998, with the
Regional Trial Court (RTC), Branch 83, Tanauan, Batangas, a complaint for
reversion and cancellation of Free Patent No. 1516, OCT No. P-3218 and its
derivative titles (TCT No. 36341 and TCT No. 38609), docketed as Civil Case
No. CT-98-001. Impleaded as defendants were petitioner East Asia Traders,
Inc., Landicho, Reyes, and the Register of Deeds of Tanauan, Batangas.
Instead of filing an answer, petitioner, on September 14, 1998, filed a
motion to dismiss the complaint on the following grounds: (1) the cause of
action has prescribed; (2) litis pendentia; and (3) the complaint fails to state
a sufficient cause of action.
On January 11, 2000, the RTC issued an Order denying petitioners
motion to dismiss for lack of merit. Petitioners motion for reconsideration
was likewise denied in its Order dated May 31, 2000.
Petitioner then filed with the Court of Appeals a petition for certiorari
and prohibition (with prayer for issuance of a temporary restraining order
and a writ of preliminary injunction) seeking to nullify the trial courts (1)
Order dated January 11, 2000 denying petitioners motion to dismiss; and (2)
Order dated May 31, 2000 denying its motion for reconsideration.
On November 26, 2001, the Appellate Court rendered a Decision, the
dispositive portion of which reads:
WHEREFORE, in view of all the foregoing, the herein Petition for Certiorari
and Prohibition with Prayer for the Issuance of Temporary Restraining Order

and Writ of Preliminary Injunction is DENIED DUE COURSE and,
accordingly, DISMISSED, for lack of merit. The assailed Orders
dated January 11, 2000 and May 31, 2000 of the Regional Trial Court,
Branch 83, Fourth Judicial Region, Tanauan, Batangas,
are UPHELD and REITERATED.
SO ORDERED.
The Court of Appeals ratiocinated as follows:
As to the first ground for the petition, petitioner East Asia Traders, Inc.
contends that respondent court committed an error when it denied its
Motion to Dismiss despite the fact that prescription had already set in against
the State.
As alleged in the complaint, Galileo Landichos application for Free Patent
was approved on March 6, 1987 and subsequently registered under his
name. Then, the following year, he sold the same land to Teresita Reyes who,
subsequently, sold it to petitioner East Asia Traders, Inc. Gathered from the
foregoing events, it is now the contention of petitioner that the
action for reversion filed by respondent Republic of
the Philippines is already barred by prescription since it only filed
the action for reversion on March 9, 1998, eleven (11) years after
the registration of the land in question.
We are not swayed by the argument proffered by the petitioner, simply
because prescription does not lie against the State. x x x.
And as provided in Article 1113 of the Civil Code: All things which are
within the commerce of men, are susceptible of prescription, unless
otherwise provided. Property of the State or any of its subdivisions
not patrimonial in character shall not be the object of
prescription.
To our mind, respondent Republic could not have been more correct when it
cited Article 1108 (4) of the Civil Code, which provides
54
that prescription, both acquisitive and extinctive, does not run
against the State and its subdivisions. x x x.
As to the second ground, respondent Republic correctly pointed out in its
complaint that the subject land sought to be retained by petitioner is
inalienable because subsequent investigations conducted by the DENR
disclosed that the land in question was a private land taken by the
government for the construction of a national road. Being private
land, even if it belongs to the government, the same is not covered by
Commonwealth Act No. 141, as amended, otherwise known as the Public
Land Act much less can it be disposed of by the Bureau of Lands by
a free patent under Chapter VII of said Act, and even assuming that there
was re-routing of the national road, the land remains under the control of the
Department of Public Works and Highways (DPWH); and even if the
DPWH does not need the land anymore for road purposes, the
same does not become available for application or appropriation
by any private party until and unless officially released for that
purpose, and even then the land can be disposed of only by sale or
lease thru public bidding. Thus, the property in question is
considered inalienable land of the public domain.
What respondent Republic is trying to point out was that the petitioner,
through fraud and/or misrepresentation, was able to procure title to the land,
as in fact, there was no record of any final investigation report in the folder of
the application, nor was there any indication written in the summary of the
survey data that the land in question was claimed during the cadastral
survey. As stated by respondent Republic, the object of the complaint it
filed was to cancel the title issued to defendant Galileo Landicho
for being void ab initio pursuant to Section 91 of
the Public Land Act. Apparently, the Director of Lands was misled into
issuing patents over the land; therefore, the patents and corresponding
certificates of title are immediately infected with jurisdictional flaw, which
warrants the institution of suits to revert lands to the State. x x x. Hence, its
complaint stated a valid cause of action.
With respect to the third ground for the petition, We hold that while it is true
that the land in question used to be privately owned, it was converted into

public land when it was acquired by the State through the Department of
Public Works and Highways for the construction of a national
road. Respondent Republic maintains that the land being public land,
reserved for a specific public purpose, the same cannot be the
subject of private ownership as it is beyond the commerce of
man. Even if the proposed national road was re-routed elsewhere,
it did not change the character of the land classified as public land.
x x x:
xxx
But more importantly, even assuming, arguendo, that Galileo
Landichos Free Patent No. (IV-3-A) 1516 and his Original
Certificate of Title (O.C.T.) No. P-3218 issued on March 6,
1987 were valid, the sale to Teresita Reyes of the property on June 7,
1989 and her Transfer Certificate of Title (T.C.T.) No. T-36341 issued
pursuant thereto, as well as Reyes sale thereof to petitioner East
Asia Traders, Inc. on June 7, 1990 and its title, T.C.T. No. T-38609
subsequently issued, were all unlawful and null and void, as the
acquisition, conveyance, alienation, and transfer of the property
were made and executed within five (5) years from the issuance of
Landichos free patent and title on March 6, 1987, in flagrant
violation of Sections 118 and 124 of the Public Land Act (Com. Act
No. 141) x x x:
xxx
Hence, since the sale of the land subject of this case in favor of petitioner East
Asia Traders, Inc. was null and void and of no legal force and effect, it did not
acquire any right over the land whatsoever.
Consequently, respondent Regional Trial Court did not act with grave abuse
of discretion amounting to lack or excess of jurisdiction in issuing its assailed
Orders denying petitioners motion to dismiss and motion for reconsideration
in Civil Case No. CT-98-001.
55
Petitioner then filed a motion for reconsideration but was denied by the
Appellate Court in its Resolution dated April 9, 2002.
Petitioner, in the instant petition, submits for our resolution the
following issues:
I
WHETHER OR NOT PRESCRIPTION HAS ALREADY SET IN AGAINST
THE STATE.
II
WHETHER A PRIVATE LAND, THE SUBJECT MATTER OF THE INSTANT
PETITION, CAN BE THE PROPER SUBJECT OF REVERSION
PROCEEDINGS.
III
WHETHER OR NOT THE COMPLAINT FILED BY THE RESPONDENT
STATES A CAUSE OF ACTION AGAINST PETITIONER DESPITE ITS
FAILURE TO ALLEGE THEREIN THAT PETITIONER WAS A BUYER IN
BAD FAITH OR HAD KNOWLEDGE OF THE DEFECT OR FLAW IN THE
TITLE OF ITS PREDECESSORS-IN-INTEREST.
Petitioner contends that respondents action for reversion, filed
only on March 9, 1998 or more than 11 years after the approval and issuance
of a free patent by the Bureau of Lands, is already barred by
prescription. Respondents complaint states no cause of action, not
only because it failed to allege that Lot 4355 was acquired in bad
faith and with notice of defect or irregularity in its title, but also
because the same lot has become a private land and ceased to be part
of the public domain after the registration of the patent and the issuance
of the corresponding certificate of title. Moreover, TCT No. 38609 issued
by the Register of Deeds in its name, being one of the derivative titles of OCT
No. P-3218 registered on the basis of a free patent, became indefeasible
after the lapse of one year as provided in Section 32 of
P.D. No. 1529 (formerly Act No. 496, 38).[6] Petitioner then maintains that
the Appellate Court should not have sustained the trial courts denial of the
motion to dismiss.

In his comment, the Solicitor General asserts that the State, in an action
for reversion of inalienable land of the public domain, is not bound by
prescription or laches for public policy requires an unimpeded exercise of its
sovereign function. Petitioners defense of indefeasibility of a certificate of
title is not tenable considering that TCT No. 38609 issued in its name is
void ab initio and does not form part of the Torrens system. The Solicitor
General, citing Section 118 in relation to Section 124 of the Public Land Act,
further asserts that the sale of the subject lot within the 5-year prohibited
period, being unlawful, nullifies the patent originally issued and justifies the
reversion of the property to the State.
Petitioner basically contends before the Court of Appeals that the RTC
acted without or in excess of jurisdiction or with grave abuse of discretion
when it denied the motion to dismiss the complaint in Civil Case No. CT-98-
001.
The petition for certiorari and prohibition filed by petitioner with the
Court of Appeals is not the proper remedy to assail the denial by the RTC of
the motion to dismiss. The Order of the RTC denying the motion to
dismiss is merely interlocutory. An interlocutory order does not
terminate nor finally dispose of the case, but leaves something to be done by
the court before the case is finally decided on the merits. It is always under
the control of the court and may be modified or rescinded upon sufficient
grounds shown at any time before final judgment. This proceeds from the
courts inherent power to control its process and orders so as to make them
conformable to law and justice. The only limitation is that the judge cannot
act with grave abuse of discretion, or that no injustice results thereby.[7]
In Indiana Aerospace University vs. Commission on Higher Education,
[8]
 we held:
An order denying a motion to dismiss is interlocutory, and so the
proper remedy in such a case is to appeal after a decision has been
rendered. A writ of certiorari is not intended to correct every
controversial interlocutory ruling; it is resorted only to correct a grave
abuse of discretion or a whimsical exercise of judgment equivalent to lack of
jurisdiction. Its function is limited to keeping an inferior court within its
jurisdiction and to relieve persons from arbitrary acts acts which courts or
56
judges have no power or authority in law to perform. It is not designed to
correct erroneous findings and conclusions made by the courts.
Assuming that certiorari is the proper remedy, we find no grave abuse of
discretion committed by the RTC in denying petitioners motion to dismiss. In
the same vein, the Court of Appeals did not err in upholding the assailed RTC
Order denying the motion to dismiss reproduced below:
After a careful examination of the records of this case, as well as the
contentions of both parties, the court finds no merit to the instant motion to
dismiss.
It should be noted that the Civil Case No. T-1061 pending before the RTC of
Tanauan, Batangas was not initiated by the Office of the Solicitor General and
therefore, the same is not an action brought by the plaintiff, Republic of
the Philippines. The inclusion of the Republic of the Philippines as an
unwilling co-plaintiff did not make the Republic of the Philippines a party in
said civil case.
Further, it is a rule in our jurisdiction that prescription does not lie against
the State for the reversion to the public domain of the lands, which have been
fraudulently granted to private individuals.
Furthermore, the complaint alleges that the certificates of title on the
property subject matter of the complaint having been procured through fraud
and misrepresentation are null and void and should therefore be cancelled,
clearly states plaintiffs cause of action against defendants.
Lastly, defendants Galileo Landicho, Teresita Reyes and the Register of
Deeds of Tanauan, Batangas did not file their respective answers despite
receipt of the summons in this case. Hence, they may be declared in default.
WHEREFORE, premises considered, the instant Motion to Dismiss is hereby
DENIED for lack of merit.

In the interest of justice, defendant East Asia Trading is given a period of ten
(10) days from receipt of this Order within which to file its responsive
pleading.
Also, for failure to file their answers, defendants Galileo Landicho, Teresita
Reyes and the Register of Deeds of Tanauan, Batangas are hereby declared in
default.
SO ORDERED.
A further ratiocination on the issues raised by petitioner shows that
indeed the petition is bereft of merit.
I Clearly, the Court of Appeals should not have ruled outright
WHETHER LOT 4355 IS ALIENABLE
We hold that this issue can only be properly determined during the
hearing on the merits of Civil Case No. CT-98-001 wherein both parties may
present their respective evidence. On this point, the Court of
Appeals erred in concluding that Lot 4355 is considered inalienable land of
the public domain; and that since the sale of the land subject of this case in
favor of petitioner East Asia Traders, Inc. is null and void and of no legal
force and effect, it did not acquire any right over the land whatsoever. In
reaching this conclusion, the Court of Appeals actually decided the
entire case summarily, unmindful that the only incident before it
for resolution is petitioners motion to dismiss.
In Paraaque Kings Enterprises, Inc. vs. Court of Appeals,[9] we held that
matters which require presentation and/or determination of facts raised in a
motion to dismiss can be best resolved after trial on the merits, thus:
x x x, we find no more need to pass upon the question of whether the
complaint states a cause of action for damages or whether the complaint is
barred by estoppel or laches. As these matters require presentation
and/or determination of facts, they can be best resolved after trial
on the merits.
57
x x x, private respondents cannot be denied their day in court. While, in the
resolution of a motion to dismiss, the truth of the facts alleged in the
complaint are theoretically admitted, such admission is merely hypothetical
and only for the purpose of resolving the motion. In case of denial, the
movant is not to be deprived of the right to submit its own case
and to submit evidence to rebut the allegation in the
complaint. Neither will the grant of the motion by a trial court and the
ultimate reversal thereof by an appellate court have the effect of stifling such
right. So too, the trial court should be given the opportunity to
evaluate the evidence, apply the law and decree the proper
remedy. Hence, we remand the instant case to the trial court to
allow private respondents to have their day in court.
that Lot 4355 is inalienable. This could be best resolved only after trial on the
merits.
II
WHETHER IN FILING THE COMPLAINT FOR REVERSION, THE
STATE IS BARRED BY PRESCRIPTION.
Basic as a hornbook principle is that prescription does not run
against the government. In Reyes vs. Court of Appeals,[10] we held:
"In so far as the timeliness of the action of the Government is concerned, it is
basic that prescription does not run against the State. x x x The case
law has also been:
When the government is the real party in interest, and is
proceeding mainly to assert its own rights and recover its own
property, there can be no defense on the ground of laches or
limitation.' x x x
'Public land fraudulently included in patents or certificates of title may be
recovered or reverted to the State in accordance with Section 101 of the
Public Land Act. Prescription does not lie against the State in such cases for
the Statute of Limitations does not run against the State. The right of
 58

reversion or reconveyance to the State is not barred by In sum, we hold that petitioners resort to certiorari is misplaced. And
prescription." granting that certiorari is the proper remedy, the Court of Appeals correctly
ruled that the RTC, in denying petitioners motion to dismiss, did not commit
III any grave abuse of discretion.

WHEREFORE, the petition is DENIED. The assailed Decision

WHETHER THE COMPLAINT IN CIVIL CASE NO. CT-98-001
STATES A CAUSE OF ACTION
When a motion to dismiss is grounded on the failure to state a cause of
action, a ruling thereon should be based only on the facts alleged in the
complaint. The court must pass upon this issue based solely on such
allegations, assuming them to be true. For to do otherwise would be a
procedural error and a denial of petitioners right to due process.
dated November 26, 2001 and the Resolution dated April 9, 2002 of the
Court of Appeals in CA-G.R. SP No. 59627 are hereby AFFIRMED with
modification in its ratiocination. Petitioner is hereby directed to file with the
trial court its answer to respondents complaint within ten (10) days from
notice.
SO ORDERED.

In China Road and Bridge Corporation vs. Court of Appeals,[11] we

ESTATE OF THE LATE G.R. No. 168661
ruled:
JESUS S. YUJUICO, represented
by ADMINISTRATORS
It is well settled that in a motion to dismiss based on lack of cause of
BENEDICTO V. YUJUICO and Present:
action, the issue is passed upon on the basis of the allegations
EDILBERTO V. YUJUICO; and
assuming them to be true. The court does not inquire into the
AUGUSTO Y. CARPIO, QUISUMBING, J., Chairperson,
truth of the allegations and declare them to be false, otherwise it
Petitioners, CARPIO MORALES,
would be a procedural error and a denial of due process to the
TINGA,
plaintiff. Only the statements in the complaint may be properly considered,
VELASCO, JR., and
and the court cannot take cognizance of external facts or hold preliminary
- versus - NACHURA,* JJ.
hearings to ascertain their existence. To put it simply, the test for
 
determining whether a complaint states or does not state a cause of action
REPUBLIC OF THE PHILIPPINES Promulgated:
against the defendants is whether or not, admitting hypothetically the truth
and the COURT OF APPEALS,
of the allegations of fact made in the complaint, the judge may validly grant
Respondents. October 26, 2007
the relief demanded in the complaint.
x----------------------------------------------------------------------------------------
-x
We reviewed very carefully respondents allegations in its complaint. In a  
nutshell, respondent alleged that the defendants (herein petitioner and its DECISION
predecessors-in-interest) procured their lot is inalienable because the DENR VELASCO, JR., J.:
investigation disclosed that it was intended by the government for the  
construction of a national road; that defendants titles are null and void and In 1973, Fermina Castro filed an application for the registration and
should be cancelled and, therefore, Lot 4355 should be reverted to the confirmation of her title over a parcel of land with an area of 17,343 square
State. These allegations are sufficient to constitute a cause of action for meters covered by plan (LRC) Psu-964 located in the Municipality of
reversion.

Paraaque, Province of Rizal (now Paraaque City), in the Pasig-Rizal Court of
First Instance (CFI), Branch 22. The application was docketed LRC Case No.
N-8239. The application was opposed by the Office of the Solicitor General
(OSG) on behalf of the Director of Lands, and by Mercedes Dizon, a private
party. Both oppositions were stricken from the records since the opposition
of Dizon was filed after the expiration of the period given by the court, and
the opposition of the Director of Lands was filed after the entry of the order
of general default. After considering the evidence, the trial court rendered
its April 26, 1974 Decision. The dispositive portion reads:
 
____________________________
* As per September 3, 2007 raffle.
WHEREFORE, the Court hereby declares the applicant,
Fermina Castro, of legal age, single, Filipino and a resident of
1515 F. Agoncillo St., Corner J. Escoda St., Ermita, Manila,
the true and absolute owner of the land applied for situated
in the Municipality of Paraaque, Province of Rizal, with an
area of 17,343 square meters and covered by plan (LRC) Psu-
964 and orders the registration of said parcel of land in her
name with her aforementioned personal circumstances.
 
Once this decision becomes final and executory, let the
corresponding order for the issuance of the decree be issued.
 
SO ORDERED.[1]
The Director of Lands and Mercedes Dizon did not appeal from the adverse
decision of the Pasig-Rizal CFI. Thus, the order for the issuance of a decree of
registration became final, and Decree No. N-150912 was issued by the Land
Registration Commission (LRC).[2] Original Certificate of Title (OCT) No.
10215 was issued in the name of Fermina Castro by the Register of Deeds for
the Province of Rizal on May 29, 1974.[3]
 
The land was then sold to Jesus S. Yujuico, and OCT No. 10215 was
cancelled. On May 31, 1974,[4] Transfer Certificate of Title (TCT) No. 445863
was issued in Yujuicos name, who subdivided the land into two lots. TCT No.
446386[5] over Lot 1 was issued in his name, while TCT No. S-
29361[6] over Lot 2 was issued in the name of petitioner Augusto Y. Carpio.
59
Annotations at the back of TCT No. 446386 show that Yujuico had, at one
time or another, mortgaged the lot to the Philippine Investments System
Organization (PISO) and Citibank, N.A. Annotations in the title of petitioner
Carpio reveal the lot was mortgaged in favor of Private Development
Corporation (PDC), Rizal Commercial Banking Corporation (RCBC) and then
Philippine Commercial and Industrial Bank (PCIB) and the Development
Bank of the Philippines (DBP) to secure various loans.
Sometime in 1977, Presidential Decree No. (PD) 1085 entitled Conveying the
Land Reclaimed in the Foreshore and Offshore of the Manila Bay (The
Manila-Cavite Coastal Road Project) as Property of the Public Estates
Authority as well as Rights and Interests with Assumptions of Obligations
in the Reclamation Contract Covering Areas of the Manila Bay between the
Republic of the Philippines and the Construction and Development
Corporation of the Philippines (1977) was issued. Land reclaimed in the
foreshore and offshore areas of Manila Bay became the properties of the
Public Estates Authority (PEA), a government corporation that undertook the
reclamation of lands or the acquisition of reclaimed lands. On January 13,
1989, OCT No. SP 02 was issued in favor of PEA. The PEA also acquired
ownership of other parcels of land along the ManilaBay coast, some of which
were subsequently sold to the Manila Bay Development Corporation
(MBDC), which in turn leased portions to Uniwide Holdings, Inc.[7]
 
The PEA undertook the construction of the Manila Coastal Road. As this was
being planned, Yujuico and Carpio discovered that a verification survey they
commissioned showed that the road directly overlapped their property, and
that they owned a portion of the land sold by the PEA to the MBDC.
 
On July 24, 1996, Yujuico and Carpio filed before the Paraaque City
Regional Trial Court (RTC), a complaint for the Removal of Cloud and
Annulment of Title with Damages docketed as Civil Case No. 96-0317 against
the PEA. On May 15, 1998 the parties entered into a compromise agreement
approved by the trial court in a Resolution dated May 18, 1998. On June 17,
1998, the parties executed a Deed of Exchange of Real Property, pursuant to
the compromise agreement, where the PEA property with an area of 1.4007
hectares would be conveyed to Jesus Yujuico and petitioner Carpio in
exchange for their property with a combined area of 1.7343 hectares.
 

On July 31, 1998, the incumbent PEA General Manager, Carlos P. Doble,
informed the OSG that the new PEA board and management had reviewed
the compromise agreement and had decided to defer its implementation and
hold it in abeyance following the view of the former PEA General Manager,
Atty. Arsenio Yulo, Jr., that the compromise agreement did not reflect a
condition of the previous PEA Board, requiring the approval of the Office of
the President. The new PEA management then filed a petition for relief from
the resolution approving the compromise agreement on the ground of
mistake and excusable negligence.
 
The petition was dismissed by the trial court on the ground that it
was filed out of time and that the allegation of mistake and excusable
negligence lacked basis.
The PEA fared no better in the Court of Appeals (CA), as the petition
was dismissed for failure to pay the required docket fees and for lack of merit.
 
The matter was raised to the Supreme Court in Public Estates
Authority v. Yujuico[8] but PEAs petition was denied, upholding the trial
courts dismissal of the petition for relief for having been filed out of time. The
allegation of fraud in the titling of the subject property in the name of
Fermina Castro was not taken up by the Court.
 
On June 8, 2001, in a Complaint for Annulment and Cancellation of Decree
No. N-150912 and its Derivative Titles, entitled Republic of the Philippines v.
Fermina Castro, Jesus S. Yujuico, August Y. Carpio and the Registry of
Deeds of Paraaque City docketed as Civil Case No. 01-0222, filed with the
Paraaque City RTC, respondent Republic of the Philippines, through the
OSG, alleged that when the land registered to Castro was surveyed by Engr.
H. Obreto on August 3, 1972 and subsequently approved by the LRC on April
23, 1973, the land was still a portion of Manila Bay as evidenced by Namria
Hydrographic Map No. 4243, Surveys to 1980; 1st Ed/. January 9/61: Revised
80-11-2; that Roman Mataverde, the then OIC of the Surveys Division,
Bureau of Lands, informed the OIC of the Legal Division that [w]hen
projected on Cadastral Maps CM 14 deg. 13 N-120 deg, 59E, Sec.2-A of
Paraaque Cadastre (Cad. 299), (LRC) Psu-964 falls inside Manila Bay,
outside Cad. 299; that then Acting Regional Lands Director Narciso V.
Villapando issued a Report dated November 15, 1973 stating that plan (LRC)
60
Psu-964 is a portion of Manila Bay; that then Officer-in-Charge, Assistant
Director of Lands, Ernesto C. Mendiola, submitted his Comment and
Recommendation re: Application for Registration of Title of FERMINA
CASTRO, LRC Case No. N-8239, dated Dec. 1, 1977, praying that the instant
registration case be dismissed; and that Fermina Castro had no registrable
rights over the property.
 
More significantly, respondent Republic argued that, first, since the subject
land was still underwater, it could not be registered in the name of Fermina
Castro. Second, the land registration court did not have jurisdiction to
adjudicate inalienable lands, thus the decision adjudicating the subject parcel
of land to Fermina Castro was void. And third, the titles of Yujuico and
Carpio, being derived from a void title, were likewise void.[9]
On September 13, 2001, Yujuico and Carpio filed a Motion to Dismiss
(With Cancellation of Notice of Lis Pendens),[10] on the grounds that: (1) the
cause of action was barred by prior judgment; (2) the claim had been waived,
abandoned, or otherwise extinguished; (3) a condition precedent for the
filing of the complaint was not complied with; and (4) the complaint was not
verified and the certification against forum shopping was not duly executed
by the plaintiff or principal party.
 
On November 27, 2001, respondent Republic filed an
Opposition[11] to the motion to dismiss to which defendants filed a
Reply[12] on January 14, 2002, reiterating the grounds for the motion to
dismiss.
 
In the August 7, 2002 Order of the RTC,[13] Civil Case No. 01-0222 was
dismissed. The trial court stated that the matter had already been decided in
LRC Case No. N-8239, and that after 28 years without being contested, the
case had already become final and executory. The trial court also found that
the OSG had participated in the LRC case, and could have questioned the
validity of the decision but did not. Civil Case No. 01-0222 was thus found
barred by prior judgment.
 
On appeal to the CA, in CA-G.R. CV No. 76212, respondent Republic
alleged that the trial court erred in disregarding that appellant had evidence to
prove that the subject parcel of land used to be foreshore land of the Manila
 61

Bay and that the trial court erred in dismissing Civil Case No. 01-0222 on the NECESSITATING THE HONORABLE COURTS EXERCISE
ground of res judicata.[14] OF ITS POWER OF SUPERVISION CONSIDERING THAT:
   
The CA observed that shores are properties of the public domain intended for I.                    THE REVERSAL BY THE COURT OF APPEALS
public use and, therefore, not registrable and their inclusion in a certificate of OF THE TRIAL COURTS APPLICATION OF THE
title does not convert the same into properties of private ownership or confer PRINCIPLE OF RES JUDICATA IN THE INSTANT CASE IS
title upon the registrant. BASED ON ITS ERRONEOUS ASSUMPTION THAT
  THE SUBJECT LAND IS OF PUBLIC DOMAIN,
Further, according to the appellate court res judicata does not apply ALLEGEDLY PART OF MANILA BAY.
to lands of public domain, nor does possession of the land automatically  
divest the land of its public character. A.     IN THE FIRESTONE CASE, THE
The appellate court explained that rulings of the Supreme Court have HONORABLE COURT APPLIED THE
made exceptions in cases where the findings of the Director of Lands and the PRINCIPLE OF RES
Department of Environment and Natural Resources (DENR) were conflicting JUDICATA NOTWITHSTANDING
as to the true nature of the land in as much as reversion efforts pertaining ALLEGATIONS OF LACK OF JURISDICTION
foreshore lands are embued with public interest. OF A LAND REGISTRATION COURT,
  FORECLOSING ANY FURTHER ATTEMPT BY
The dispositive portion of the CA decision reads, RESPONDENT THEREIN, AS IN THE
  INSTANT CASE, TO RESURRECT A LONG-
WHEREFORE, premises considered, the present appeal is SETTLED JUDICIAL DETERMINATION OF
hereby GRANTED. The appealed Order dated August 7, REGISTRABILITY OF A PARCEL OF LAND
2002 of the trial court in Civil Case No. 01-0222 is hereby BASED ON THE SHEER ALLEGATION THAT
REVERSED and SET ASIDE. The case is hereby THE SAME IS PART OF THE PUBLIC
REMANDED to said court for further proceedings and a full- DOMAIN.
blown trial on the merits with utmost dispatch.[15]  
  B.     THE LAND REGISTRATION COURT HAD
Hence, this petition. JURISDICTION TO DETERMINE WHETHER
  THE SUBJECT LAND WAS PART OF THE
The Issues PUBLIC DOMAIN.
   
Petitioners now raise the following issues before this Court: C.     RESPONDENTS REVERSION CASE SEEKS TO
  RETRY THE VERY SAME FACTUAL ISSUES
THE COURT OF APPEALS COMMITTED REVERSIBLE THAT HAVE ALREADY BEEN JUDICIALLY
ERROR AND DECIDED A QUESTION OF SUBSTANCE IN DETERMINED OVER THIRTY (30) YEARS
A WAY NOT IN ACCORDANCE WITH LAW AND THE AGO.
APPLICABLE DECISIONS OF THE HONORABLE COURT  
AND HAS DEPARTED FROM THE ACCEPTED AND D.     THE JURISPRUDENTIAL BASES APPLIED BY
USUAL COURSE OF JUDICIAL PROCEEDINGS THE COURT OF APPEALS IN ITS
 62

QUESTIONED DECISION ARE MISPLACED, Essentially, the issues boil down to three: (1) Is a reversion suit
CONSIDERING THAT THEY ARE ALL proper in this case? (2) Is the present petition estopped by laches? (3) Did the
PREDICATED ON THE ERRONEOUS CA erroneously apply the principle of res judicata?
PREMISE THAT IT IS UNDISPUTED THAT  
THE SUBJECT LAND IS PART OF THE An action for reversion seeks to restore public land fraudulently
PUBLIC DOMAIN. awarded and disposed of to private individuals or corporations to the mass of
  public domain.[17] This remedy is provided under Commonwealth Act (CA)
II.        RESPONDENT IS BARRED BY No. 141 (Public Land Act) which became effective on December 1, 1936. Said
JURISDICTIONAL ESTOPPEL AND LACHES FROM law recognized the power of the state to recover lands of public
QUESTIONING THE JURISDICTION OF THE LAND domain. Section 124 of CA No. 141 reads:
REGISTRATION COURT.  
  SEC. 124. Any acquisition, conveyance, alienation,
III.     RELIANCE BY THE COURT OF APPEALS ON transfer, or other contract made or executed in violation of
THE ISOLATED PRONOUNCEMENT OF THE any of the provisions of Sections one hundred and eighteen,
HONORABLE COURT IN THE PEA CASE IS one hundred and twenty, one hundred and twenty one, one
UNWARRANTED AND MISLEADING CONSIDERING hundred and twenty-two, and one hundred twenty-three of
THAT THE MATTER OF WHETHER RES this Act shall be unlawful and null and void from its
JUDICATA APPLIES WITH RESPECT TO THE LAND execution and shall produce the effect of annulling and
REGISTRATION COURTS DECISION IN 1974 WAS NOT cancelling the grant, title, patent, or permit originally issued,
IN ISSUE IN SAID CASE. recognized or confirmed, actually or presumptively, and
  cause the reversion of the property and its
A.     THE INSTANT REVERSION CASE IS NOT improvements to the State. (Emphasis supplied.)
THE PROPER RECOURSE.  
   
B.     THE VALIDITY OF THE COURT-APPROVED Pursuant to Section 124 of the Public Land Act, reversion suits are
COMPROMISE AGREEMENT 15 MAY proper in the following instances, to wit:
1998 HAS ALREADY BEEN AFFIRMED BY  
THE HONORABLE COURT IN THE PEA CASE. 1. Alienations of land acquired under free patent or homestead
  provisions in violation of Section 118, CA No. 141;
IV.     EQUITABLE CONSIDERATIONS MANDATE  
THE APPLICATION OF THE RULE ON ORDINARY 2. Conveyances made by non-Christians in violation of Section 120,
ESTOPPEL AND LACHES IN THE INSTANT CASE CA No. 141; and
AGAINST RESPONDENT.  
3. Alienations of lands acquired under CA No. 141 in favor of persons
V.     RESPONDENT CANNOT BE GIVEN SPECIAL not qualified under Sections 121, 122, and 123 of CA No. 141.
CONSIDERATION AND EXCUSED FOR  
TRANSGRESSING RULES OF PROCEDURE.[16] From the foregoing, an action for reversion to cancel titles derived
from homestead patents or free patents based on transfers and conveyances

in violation of CA No. 141 is filed by the OSG pursuant to its authority under
the Administrative Code with the RTC. It is clear therefore that reversion
suits were originally utilized to annul titles or patents administratively issued
by the Director of the Land Management Bureau or the Secretary of the
DENR.
 
While CA No. 141 did not specify whether judicial confirmation of
titles by a land registration court can be subject of a reversion suit, the
government availed of such remedy by filing actions with the RTC to cancel
titles and decrees granted in land registration applications.
 
The situation changed on August 14, 1981 upon effectivity of Batas
Pambansa (BP) Blg. 129 which gave the Intermediate Appellate Court the
exclusive original jurisdiction over actions for annulment of judgments of
RTCs.
 
When the 1997 Rules of Civil Procedure became effective on July 1,
1997, it incorporated Rule 47 on annulment of judgments or final orders and
resolutions of the RTCs.The two grounds for annulment under Sec. 2, Rule 47
are extrinsic fraud and lack of jurisdiction. If based on extrinsic fraud, the
action must be filed within four (4) years from its discovery, and if based on
lack of jurisdiction, before it is barred by laches or estoppel as provided by
Section 3, Rule 47. Thus, effective July 1, 1997, any action for reversion of
public land instituted by the Government was already covered by Rule 47.
 
The instant Civil Case No. 01-0222 for annulment and cancellation of
Decree No. N-150912 and its derivative titles was filed on June 8, 2001 with
the Paraaque City RTC. It is clear therefore that the reversion suit was
erroneously instituted in the Paraaque RTC and should have been dismissed
for lack of jurisdiction. The proper court is the CA which is the body
mandated by BP Blg. 129 and prescribed by Rule 47 to handle annulment of
judgments of RTCs.
In Collado v. Court of Appeals,[18] the government, represented by
the Solicitor General pursuant to Section 9(2) of BP Blg. 129, filed a petition
for annulment of judgment with the CA. Similarly in the case of Republic v.
Court of Appeals,[19] the Solicitor General correctly filed the annulment of
judgment with the said appellate court.
 
63
This was not done in this case. The Republic misfiled the reversion
suit with the Paraaque RTC. It should have been filed with the CA as required
by Rule 47. Evidently, the Paraaque RTC had no jurisdiction over the instant
reversion case.
 
Assuming that the Paraaque RTC has jurisdiction over the reversion
case, still the lapse of almost three decades in filing the instant case, the
inexplicable lack of action of the Republic and the injury this would cause
constrain us to rule for petitioners. While it may be true that estoppel does
not operate against the state or its agents,[20] deviations have been
allowed. In Manila Lodge No. 761 v. Court of Appeals, we said:
 
Estoppels against the public are little favored. They
should not be invoked except in rare and unusual
circumstances, and may not be invoked where they would
operate to defeat the effective operation of a policy adopted
to protect the public. They must be applied with
circumspection and should be applied only in those special
cases where the interests of justice clearly require
it. Nevertheless, the government must not be
allowed to deal dishonorably or capriciously with its
citizens, and must not play an ignoble part or do a
shabby thing; and subject to limitations x x x, the
doctrine of equitable estoppel may be invoked
against public authorities as well as against private
individuals.[21] (Emphasis supplied.)
 
 
Equitable estoppel may be invoked against public authorities when
as in this case, the lot was already alienated to innocent buyers for value and
the government did not undertake any act to contest the title for an
unreasonable length of time.
 
In Republic v. Court of Appeals, where the title of an innocent
purchaser for value who relied on the clean certificates of the title was sought
to be cancelled and the excess land to be reverted to the Government, we
ruled that [i]t is only fair and reasonable to apply the equitable
principle of estoppel by laches against the government to avoid an

injustice to innocent purchasers for value (emphasis supplied).[22] We
explained:
 
Likewise time-settled is the doctrine that where
innocent third persons, relying on the correctness of the
certificate of title, acquire rights over the property, courts
cannot disregard such rights and order the cancellation of
the certificate. Such cancellation would impair public
confidence in the certificate of title, for everyone dealing with
property registered under the Torrens system would have to
inquire in every instance whether the title has been regularly
issued or not. This would be contrary to the very purpose of
the law, which is to stabilize land titles. Verily, all persons
dealing with registered land may safely rely on the
correctness of the certificate of title issued therefore, and the
law or the courts do not oblige them to go behind the
certificate in order to investigate again the true condition of
the property. They are only charged with notice of the liens
and encumbrances on the property that are noted on the
certificate.[23]
xxxx
 
But in the interest of justice and equity, neither may
the titleholder be made to bear the unfavorable effect of the
mistake or negligence of the States agents, in the absence of
proof of his complicity in a fraud or of manifest damage to
third persons. First, the real purpose of the Torrens system
is to quiet title to land to put a stop forever to any question
as to the legality of the title, except claims that were noted in
the certificate at the time of the registration or that may arise
subsequent thereto. Second, as we discussed earlier, estoppel
by laches now bars petitioner from questioning private
respondents titles to the subdivision lots. Third, it was never
proven that Private Respondent St. Jude was a party to the
fraud that led to the increase in the area of the property after
its subdivision. Finally, because petitioner even failed to give
sufficient proof of any error that might have been committed
64
by its agents who had surveyed the property, the
presumption of regularity in the performance of their
functions must be respected. Otherwise, the integrity of
the Torrens system, which petitioner purportedly aims to
protect by filing this case, shall forever be sullied by the
ineptitude and inefficiency of land registration officials, who
are ordinarily presumed to have regularly performed their
duties.[24]
 
 
Republic v. Court of Appeals is reinforced by our ruling in Republic
v. Umali,[25] where, in a reversion case, we held that even if the original
grantee of a patent and title has obtained the same through fraud, reversion
will no longer prosper as the land had become private land and the
fraudulent acquisition cannot affect the titles of innocent purchasers for
value.
 
Considering that innocent purchaser for value Yujuico bought the lot
in 1974, and more than 27 years had elapsed before the action for reversion
was filed, then said action is now barred by laches.
While the general rule is that an action to recover lands of public
domain is imprescriptible, said right can be barred by laches or
estoppel. Section 32 of PD 1592 recognized the rights of an innocent
purchaser for value over and above the interests of the government. Section
32 provides:
 
SEC. 32. Review of decree of registration; Innocent
purchaser for value.The decree of registration shall not be
reopened or revised by reason of absence, minority, or other
disability of any person adversely affected thereby, nor by
any proceeding in any court for reversing
judgments, subject, however, to the right of any
person, including the government and the branches
thereof, deprived of land or of any estate or interest
therein by such adjudication or confirmation of title
obtained by actual fraud, to file in the proper Court
of First Instance a petition for reopening and review

of the decree of registration not later than one year
from and after the date of the entry of such decree of
registration, but in no case shall such petition be
entertained by the court where an innocent
purchaser for value has acquired the land or an
interest therein, whose rights may be
prejudiced. Whenever the phrase innocent purchaser for
value or an equivalent phrase occurs in this Decree, it shall
be deemed to include an innocent lessee, mortgagee, or other
encumbrances for value. (Emphasis supplied.)
 
In this petition, the LRC (now LRA), on May 30, 1974, issued Decree
No. N-150912 in favor of Fermina Castro and OCT No. 10215 was issued by
the Rizal Registrar of Deeds on May 29, 1974. OCT No. 10215 does not show
any annotation, lien, or encumbrance on its face. Relying on the clean title,
Yujuico bought the same in good faith and for value from her. He was issued
TCT No. 445863 on May 31, 1974. There is no allegation that Yujuico was a
buyer in bad faith, nor did he acquire the land fraudulently. He thus had the
protection of the Torrens System that every subsequent purchaser of
registered land taking a certificate of title for value and in good faith shall
hold the same free from all encumbrances except those noted on the
certificate and any of the x x x encumbrances which may be subsisting.[26] The
same legal shield redounds to his successors-in-interest, the Yujuicos and
Carpio, more particularly the latter since Carpio bought the lot from Jesus Y.
Yujuico for value and in good faith.
 
Likewise protected are the rights of innocent mortgagees for value,
the PISO, Citibank, N.A., PDC, RCBC, PCIB, and DBP. Even if the mortgagors
title was proved fraudulent and the title declared null and void, such
declaration cannot nullify the mortgage rights of a mortgagee in good faith.[27]
 
All told, a reversion suit will no longer be allowed at this stage.
 
More on the issue of laches. Laches is the failure or neglect, for an
unreasonable and unexplained length of time, to do that which by exercising
due diligence could or should have been done earlier. It is negligence or
omission to assert a right within a reasonable time, warranting a
65
presumption that the party entitled thereto has either abandoned or declined
to assert it.[28]
 
When respondent government filed the reversion case in 2001, 27
years had already elapsed from the time the late Jesus Yujuico purchased the
land from the original owner Castro. After the issuance of OCT No. 10215 to
Castro, no further action was taken by the government to question the
issuance of the title to Castro until the case of Public Estates Authority,
brought up in the oral argument before this Court on September 6, 2000.
[29]
 We then held that allegation of fraud in the issuance of the title was not
proper for consideration and determination at that stage of the case.
From the undisputed facts of the case, it is easily revealed that
respondent Republic took its sweet time to nullify Castros title,
notwithstanding the easy access to ample remedies which were readily
available after OCT No. 10215 was registered in the name of Castro. First, it
could have appealed to the CA when the Pasig-Rizal CFI rendered a decision
ordering the registration of title in the name of applicant Castro on April 26,
1974. Had it done so, it could have elevated the matter to this Court if the
appellate court affirms the decision of the land registration court. Second,
when the entry of Decree No. N-150912 was made on May 29, 1974 by the
Rizal Register of Deeds, the Republic had one (1) year from said date or up
to May 28, 1975 to file a petition for the reopening and review of Decree No.
N-150912 with the Rizal CFI (now RTC) on the ground of actual fraud under
section 32 of PD 1592. Again, respondent Republic did not avail of such
remedy. Third, when Jesus Yujuico filed a complaint for Removal of Cloud
and Annulment of Title with Damages against PEA before the Paraaque RTC
in Civil Case No. 96-0317, respondent could have persevered to question and
nullify Castros title. Instead, PEA undertook a compromise agreement on
which the May 18, 1998 Resolution [30] was issued. PEA in effect admitted that
the disputed land was owned by the predecessors-in-interest of petitioners
and their title legal and valid; and impliedly waived its right to contest the
validity of said title; respondent Republic even filed the petition for relief
from judgment beyond the time frames allowed by the rules, a fact even
acknowledged by this Court in Public Estates Authority. Lastly, respondent
only filed the reversion suit on June 8, 2001 after the passage of 27 years
from the date the decree of registration was issued to Fermina Castro.
 

Such a Rip Van Winkle, coupled with the signing of the settlement
with PEA, understandably misled petitioners to believe that the government
no longer had any right or interest in the disputed lot to the extent that the
two lots were even mortgaged to several banks including a government
financing institution. Any nullification of title at this stage would unsettle and
prejudice the rights and obligations of innocent parties. All told, we are
constrained to conclude that laches had set in.
 
Even granting arguendo that respondent Republic is not precluded
by laches from challenging the title of petitioners in the case at bar, still we
find that the instant action for reversion is already barred by res judicata.
 
Petitioners relying on Firestone Ceramics, Inc. v. Court of
Appeals[31] as a precedent to the case at bar contend that the instant reversion
suit is now barred by res judicata.
 
We agree with petitioners.
 
The doctrine on precedents is expressed in the latin maximStare
decisis et non quieta movere. Follow past precedents and do not disturb what
has been settled.[32] In order however that a case can be considered as a
precedent to another case which is pending consideration, the facts of the
first case should be similar or analogous to the second case.
 
A perusal of the facts of the Firestone case and those of the case at
bar reveals that the facts in the two (2) cases are parallel. First,
in Firestone and in this case, the claimants filed land registration
applications with the CFI; both claimants obtained decrees for registration of
lots applied for and were issued OCTs. Second, in Firestone, the Republic
filed a reversion case alleging that the land covered by the OCT was still
inalienable forest land at the time of the application and hence the Land
Registration Court did not acquire jurisdiction to adjudicate the property to
the claimant. In the instant case, respondent Republic contend that the land
applied for by Yujuico was within Manila Bay at the time of application and
therefore the CFI had no jurisdiction over the subject matter of the
complaint. Third, in Firestone, the validity of the title of the claimant was
favorably ruled upon by this Court in G.R. No. 109490 entitled Patrocinio E.
Margolles v. CA. In the case at bar, the validity of the compromise agreement
66
involving the disputed lot was in effect upheld when this Court in Public
Estates Authority v. Yujuico dismissed the petition of PEA seeking to
reinstate the petition for relief from the May 18, 1998Resolution approving
said compromise agreement. With the dismissal of the petition, the May 18,
1998 Resolution became final and executory and herein respondent Republic
through PEA was deemed to have recognized Castros title over the disputed
land as legal and valid. In Romero v. Tan,[33] we ruled that a judicial
compromise has the effect of res judicata. We also made clear that a
judgment based on a compromise agreement is a judgment on the merits,
wherein the parties have validly entered into stipulations and the evidence
was duly considered by the trial court that approved the agreement. In the
instant case, the May 18, 1998 Resolution approving the compromise
agreement confirmed the favorable decision directing the registration of the
lot to Castros name in LRC Case No. N-8239. Similarly, in Firestone, the
Margolles case confirmed the decision rendered in favor of Gana in Land
Registration Case No. 672 ordering the issuance of the decree to said
applicant. Fourth, in Firestone, the Supreme Court relied on the letter of then
Solicitor General Francisco Chavez that the evidence of the Bureau of Lands
and the LRC was not sufficient to support an action for cancellation of OCT
No. 4216. In the instant case, both the Solicitor General and the Government
Corporate Counsel opined that the Yujuico land was not under water and that
there appears to be no sufficient basis for the Government to institute the
action for annulment. Fifth, in Firestone, we ruled that the Margolles case
had long become final, thus the validity of OCT No. 4216 should no longer be
disturbed and should be applied in the instant case (reversion suit) based on
the principle of res judicata or, otherwise, the rule on conclusiveness of
judgment.[34]
 
Clearly from the above, Firestone is a precedent case. The Public
Estates Authority had become final and thus the validity of OCT No. 10215
issued to Castro could no longer be questioned.
 
While we said in Public Estates Authority that the court does not
foreclose the right of the Republic from pursuing the proper recourse in a
separate proceedings as it may deem warranted, the statement was obiter
dictum since the inquiry on whether or not the disputed land was still under
water at the time of its registration was a non-issue in the said case.
 

Even granting for the sake of argument that Firestone is not squarely
applicable, still we find the reversion suit already barred by res judicata.
 
For res judicata to serve as an absolute bar to a subsequent action,
the following requisites must concur: (1) there must be a final judgment or
order; (2) the court rendering it must have jurisdiction over the subject
matter and the parties; (3) it must be a judgment or order on the merits; and
(4) there must be between the two cases, identity of parties, subject matter
and causes of action.[35]
There is no question as to the first, third and last requisites. The
threshold question pertains to the second requisite, whether or not the then
Pasig-Rizal CFI, Branch 22 had jurisdiction over the subject matter in LRC
Case No. N-8239. In Civil Case No. 01-0222, the Paraaque City RTC, Branch
257 held that the CFI had jurisdiction. The CA reversed the decision of the
Paraaque City RTC based on the assertion of respondent Republic that the
Pasig-Rizal CFI had no jurisdiction over the subject matter, and that there
was a need to determine the character of the land in question.
 
The Paraaque City RTC Order dismissing the case for res
judicata must be upheld.
 
The CA, in rejecting the dismissal of the reversion case by the
Paraaque RTC, relied on two cases, namely: Municipality of Antipolo v.
Zapanta[36] and Republic v. Vda. De Castillo.[37]
 
In Municipality of Antipolo, we held that the land registration court
had no jurisdiction to entertain any land registration application if the land
was public property, thus:
 
Since the Land Registration Court had no jurisdiction to
entertain the application for registration of public property
of ANTIPOLO, its Decision adjudicating the DISPUTED
PROPERTY as of private ownership is null and void. It never
attained finality, and can be attacked at any time. It was not
a bar to the action brought by ANTIPOLO for its annulment
by reason of res judicata.
 
67
[x x x] the want of jurisdiction by a court over the
subject matter renders the judgment void and a
mere nullity, and considering that a void judgment is
in legal effect no judgment, by which no rights are
divested, from which no rights can be obtained,
which neither binds nor bars any one, and under
which all acts performed and all claims flowing out
of are void, and considering, further, that the
decision, for want of jurisdiction of the court, is not a
decision in contemplation of law, and hence, can
never become executory, it follows that such a void
judgment cannot constitute a bar to another case by
reason of res judicata.
 
xxxx
It follows that if a person obtains a title under the
Public Land Act which includes, by oversight, lands
which cannot be registered under the Torrens
System, or when the Director of Lands did not have
jurisdiction over the same because it is a public
forest, the grantee does not, by virtue of the said
certificate of title alone, become the owner of the
land illegally included (Republic vs. Animas, 56
SCRA 499, 503; Ledesma vs. Municipality of Iloilo,
49 Phil. 769).
 
[x x x x]
 
Under these circumstances, the certificate of title
may be ordered cancelled (Republic vs. Animas, et
al., supra), and the cancellation maybe pursued
through an ordinary action therefore. This action
cannot be barred by the prior judgment of the land
registration court, since the said court had no
jurisdiction over the subject matter. And if there was
no such jurisdiction, then the principle of res
judicata does not apply. [x x x] Certainly, one of the

essential requisites, i.e., jurisdiction over the subject
matter, is absent in this case. (Italics supplied).[38]
 
 
 
The plain import of Municipality of Antipolo is that a land registration court,
the RTC at present, has no jurisdiction over the subject matter of the
application which respondent Republic claims is public land. This ruling
needs elucidation.
 
Firmly entrenched is the principle that jurisdiction over the subject
matter is conferred by law.[39] Consequently, the proper CFI (now the RTC)
under Section 14 of PD 1529[40] (Property Registration Decree) has
jurisdiction over applications for registration of title to land.
 
Section 14 of PD 1592 provides:
 
SEC. 14. Who may apply.The following persons may
file in the proper Court of First Instance an
application for registration of title to land, whether
personally or through their duly authorized representatives:
 
(1) Those who by themselves or through their predecessors-
in-interest have been in open, continuous, exclusive and
notorious possession and occupation of alienable and
disposable lands of the public domain under a bona
fide claim of ownership since June 12, 1945, or
earlier. (Emphasis supplied.)
Conformably, the Pasig-Rizal CFI, Branch XXII has jurisdiction over the
subject matter of the land registration case filed by Fermina Castro,
petitioners predecessor-in-interest, since jurisdiction over the subject matter
is determined by the allegations of the initiatory pleadingthe application.
[41]
 Settled is the rule that the authority to decide a case and not the decision
rendered therein is what makes up jurisdiction. When there is jurisdiction,
the decision of all questions arising in the case is but an exercise of
jurisdiction.[42]
 
68
In our view, it was imprecise to state in Municipality of Antipolo that
the Land Registration Court [has] no jurisdiction to entertain the
application for registration of public property x x x for such court
precisely has the jurisdiction to entertain land registration applications since
that is conferred by PD 1529. The applicant in a land registration case usually
claims the land subject matter of the application as his/her private property,
as in the case of the application of Castro. Thus, the conclusion of the CA that
the Pasig-Rizal CFI has no jurisdiction over the subject matter of the
application of Castro has no legal mooring. The land registration court
initially has jurisdiction over the land applied for at the time of the filing of
the application. After trial, the court, in the exercise of its jurisdiction, can
determine whether the title to the land applied for is registrable and can be
confirmed. In the event that the subject matter of the application turns out to
be inalienable public land, then it has no jurisdiction to order the registration
of the land and perforce must dismiss the application.
Based on our ruling in Antipolo, the threshold question is whether
the land covered by the titles of petitioners is under water and forms part
of Manila Bay at the time of the land registration application in 1974. If the
land was within Manila Bay, then res judicata does not apply. Otherwise, the
decision of the land registration court is a bar to the instant reversion suit.
 
After a scrutiny of the case records and pleadings of the parties in
LRC Case No. N-8239 and in the instant petition, we rule that the land of
Fermina Castro is registrable and not part of Manila Bay at the time of the
filing of the land registration application.
 
The trial courts Decision in 1974 easily reveals the basis for its
conclusion that the subject matter was a dry land, thus:
On February 1, 1974, the applicant presented her
evidence before the Deputy Clerk of this Court and among
the evidence presented by her were certain documents which
were marked as Exhibits D to J, inclusive. The applicant
testified in her behalf and substantially declared that: she
was 62 years old, single, housekeeper and residing at 1550 J.
Escoda, Ermita, Manila; that she was born on June 3, 1911;
that she first came to know of the land applied for which is
situated in the Municipality of Paraaque, province of Rizal,

with an area of 17,343 square meters and covered by plan
(LRC) Psu-964 while she was still ten (10) years old or
sometime in 1921; that when she first came to know of the
land applied for, the person who was in possession and
owner of said land was her father, Catalino Castro; that
during that time her father used to plant on said land various
crops like pechay, mustard, eggplant, etc.; that during that
time, her father built a house on said land which was used by
her father and the other members of the family, including
the applicant, as their residential house; that the land
applied for was inherited by her father from her grandfather
Sergio Castro; that Catalino Castro continuously possessed
and owned the land in question from 1921 up to the time of
his death in 1952; and that during that period of time nobody
ever disturbed the possession and ownership of her father
over the said parcel of land; that after the death of her father
in 1952 she left the place and transferred her place of
residence but she had also occasions to visit said land twice
or thrice a week and sometimes once a week; that after she
left the land in question in 1952, she still continued
possessing said land, through her caretaker Eliseo Salonga;
that her possession over the land in question from the time
she inherited it up to the time of the filing of the application
has been continuous, public, adverse against the whole world
and in the concept of an owner; that it was never
encumbered, mortgaged, or disposed of by her father during
his lifetime and neither did she ever encumber or sell the
same; that it was declared for taxation purposes by her father
when he was still alive and her father also paid the real estate
taxes due to the government although the receipt evidencing
the payment of said real estate taxes for the property applied
for have been lost and could no longer be found inspite of
diligent effort exerted to locate the same.
 
The other witness presented by the applicant was
Emiliano de Leon, who declared that he was 70 years old,
married, farmer and residing at San Jose, Baliwag, Bulacan;
that he knew Catalino Castro, the father of the applicant
69
because said Catalino Castro was his neighbor in Tambo,
Paraaque, Rizal, he had a house erected on the land of
Catalino Castro; that he was born in 1903 and he first came
to know of the land in question when in 1918 when he was
about 18 years old; that the area of the land owned and
possessed by Catalino Castro where he constructed a
residential house has an area of more than one and one-half
(1 ) hectares; that the possession of Catalino Castro over the
land in question was peaceful, continuous, notorious,
adverse against the whole world and in the concept of an
owner; that during the time that Catalino Castro was in
possession of the land applied for he planted on said parcel
of land mango, coconut and banana, etc.; that Catalino
Castro continuously possessed and owned said parcel of land
up to the year 1952 when he died; that during the time that
Catalino Castro was in possession of said land, nobody ever
laid claim over the said property; that said land is not within
any military or naval reservation; that upon the death of
Catalino Castro, the applicant took possession of the land
applied for and that up to the present the applicant is in
possession of said land; that he resided in the land in
question from 1918 up to the time he transferred his place of
residence in Baliwag, Bulacan in the year 1958.
 
On February 11, 1974, the Court, pursuant to the
provision of Presidential Decree No. 230 issued by his
Excellency, Ferdinand E. Marcos dated July 9, 1973 held in
abeyance the rendition of a decision in this case and directed
the applicant to submit a white print copy of plan (LRC) Psu-
964 to the Director of lands who was directed by the Court to
submit his comment and recommendation thereon.
 
The property in question is declared for taxation
purposes under Tax Declaration No. 51842 (Exhibit G) and
real estate taxes due thereon have been paid up to the year
1973 (Exhibit H).
 

In compliance with the Order of this Court
February 11, 1974, the Director of Lands, thru
Special Attorney Saturnino A. Pacubas, submitted
a report to this Court dated April 25, 1974, stating
among other things, that upon ocular inspection
conducted by Land Inspector Adelino G. Gorospe
and the subsequent joint ocular inspection
conducted by Geodetic Engineer Manuel A.
Cervantes and Administrative Assistant Lazaro G.
Berania, it was established that the parcel of land
covered by plan (LRC) Psu-964 no longer forms
part of the Manila Bay but is definitely solid and
dry land.
In this connection, it should be noted that
Administrative Assistant Lazaro G. Berania and Geodetic
Engineer Manuel A. Cervantes, in their report dated March
22, 1974 have also stated that the land applied for
cannot be reached by water even in the highest tide
and that the said land is occupied by squatter
families who have erected makeshift shanties and a
basketball court which only prove that the same is
dry and solid land away from the shores of Manila
Bay.
 
Furthermore, Land Inspector Adelino G. Gorospe in his
letter-report dated November 28, 1973 has also stated that
there is a house of pre-war vintage owned by the applicant
on the land in question which in effect corroborates the
testimony of the applicant and her witness that they have
lived on the land in question even prior to the outbreak of
the second world war and that the applicant has been in
possession of the land in question long time ago.[43]
 
 
To counter the evidence of applicant Castro, and bolster its claim that
she has no valid title, respondent Republic relies on the July 18, 1973 Office
Memorandum[44] of Roman Mataverde, OIC, Surveys Division, to the OIC,
70
Legal Division, of the Bureau of Lands, stating that when projected on
cadastral maps CM 14 13N - 120 59 E., Sec. 3-D and CM 14 30N - 120 59E.,
Sec. 2-A of Paranaque [sic] Cadastre (Cad-299), (LRC) Psu-964 falls inside
Manila Bay, outside Cad-299.[45]
 
The same conclusion was adopted in a November 15, 1973 letter of
Narciso Villapando, Acting Regional Lands Director to the Chief, Legal
Division, Bureau of Lands and in the Comment and Recommendation of
Ernesto C. Mendiola, Assistant Director, also of the Bureau of Lands.
 
Respondent likewise cites Namria Hydrographic Map No. 4243
Revised 80-11-2 to support its position that Castros lot is a portion
of Manila Bay.
The burden of proving these averments falls to the shoulders of
respondent Republic. The difficulty is locating the witnesses of the
government. Roman Mataverde, then OIC of the Surveys Division retired
from the government service in 1982. He should by this time be in his
90s. Moreover, Asst. Regional Director Narciso Villapando and Asst. Director
Ernesto C. Mendiola are no longer connected with the Bureau of Lands since
1986.
 
Assuming that OIC Roman Mataverde, Asst. Regional Director
Narciso Villapando and Assistant Director Ernesto C. Mendiola are still
available as witnesses, the projections made on the cadastral maps of the
then Bureau of Lands cannot prevail over the results of the two ocular
inspections by several Bureau of Lands officials that the disputed lot is
definitely dry and solid land and not part of Manila Bay. Special Attorney
Saturnino A. Pacubas, Land Inspector Adelino G. Gorospe, Geodetic
Engineer Manuel A. Cervantes and Administrative Asst. Lazaro A. Berana, all
officials of the Bureau of Lands, were positive that the disputed land is solid
and dry land and no longer forms part of Manila Bay. Evidence gathered
from the ocular inspection is considered direct and firsthand information
entitled to great weight and credit while the Mataverde and Villapando
reports are evidence weak in probative value, being merely based on
theoretical projections in the cadastral map or table surveys. [46] Said
projections must be confirmed by the actual inspection and verification
survey by the land inspectors and geodetic engineers of the Bureau of

Lands. Unfortunately for respondent Republic, the bureau land inspectors
attested and affirmed that the disputed land is already dry land and not
within Manila Bay.
 
On the other hand, the Namria Hydrographic Map No. 4243 does not
reveal what portion of Manila Bay was Castros lot located in 1974. Moreover,
a hydrographic map is not the best evidence to show the nature and location
of the lot subject of a land registration application. It is derived from a
hydrographic survey which is mainly used for navigation purposes, thus:
 
 
 
 
 
Surveys whose principal purpose is the
determination of data relating to bodies of water. A
hydrographic survey may consist of the determination of one
or several of the following classes of data: depth water;
configuration and nature of the bottom; directions and force
of currents; heights and times of tides and water stages; and
location of fixed objects for survey and navigation purposes.
[47]
 
 
 
Juxtaposed with finding of the ocular inspection by Bureau of Lands
Special Attorney Pacubas and others that Castros lot is dry land in 1974,
Namria Hydrographic Map No. 4243 is therefore inferior evidence and
lacking in probative force.
 
Moreover, the reliability and veracity of the July 18, 1973 report of
Roman Mataverde based on the alleged projection on cadastral maps and the
Villapando report dated November 15, 1973 are put to serious doubt in the
face of the opinion dated October 13, 1997 of the Government Corporate
Counsel, the lawyer of the PEA, which upheld the validity of the titles of
petitioners, thus:
 
 
71
 
We maintain to agree with the findings of the court
that the property of Fermina Castro was registrable land, as
based on the two (2) ocular inspections conducted on March
22, 1974 by Lands Administrative Assistant Lazaro G.
Berania and Lands Geodetic Engr. Manuel Cervantes,
finding the same no longer forms part of Manila Bay but is
definitely solid land which cannot be reached by water even
in the highest of tides. This Berania-Cervantes report
based on ocular inspections literally overturned the
findings and recommendations of Land Director
Narciso V. Villapando dated November 15, 1973, and
that of Director Ernesto C. Mendiola dated
December 1, 1977, and the fact that the Villapando-
Mendiola reports were merely based on projections
in the cadastral map or table surveys.
 
xxxx
 
A. The Legal prognosis of the case is not promising in favor
of PEA.
4.1 LRC Case No. N-8239 has already become final
and executory and OCT No. 10215 was already issued in
favor of Fermina Castro. Any and all attempts to question its
validity can only be entertained in a quo warranto
proceedings (sic), assuming that there are legal grounds (not
factual grounds) to support its nullification. Subjecting it to a
collateral attack is not allowed under the Torrens Title
System. In Calalang vs. Register of Deeds of Quezon City,
208 SCRA 215, the Supreme Court held that the present
petition is not the proper remedy in challenging the validity
of certificates of titles since the judicial action required is a
direct and not a collateral attack (refer also to: Toyota Motor
Philippine Corporation vs. CA, 216 SCRA 236).
 
4.2 OCT No. 10215 in favor of Fermina Castro was
issued pursuant to a cadastral proceeding, hence is a rem
proceedings which is translated as a constructive notice to

the whole world, as held in Adez Realty Incorporated vs. CA,
212 SCRA 623.
4.3 From the cursory and intent reading of the
decision of Judge Sison in LRC Case No. N-8239, we cannot
find any iota of fraud having been committed by the court
and the parties. In fact, due process was observed when the
Office of the Solicitor General represented ably the Bureau of
Lands. In Balangcad vs. Justices of the Court of Appeals, 206
SCRA 169, the Supreme Court held that title to registered
property becomes indefeasible after one-year from date of
registration except where there is actual fraud in which case
it may be challenged in a direct proceeding within that
period. This is also the ruling in Bishop vs. CA, 208 SCRA
636, that to sustain an action for annulment of a torrens
certificate for being void ab initio, it must be shown that the
registration court had not acquired jurisdiction over the case
and there was actual fraud in securing the title.  corroborated by Emiliano de Leon, that she and her
4.4 As to priority of torrens title, PEA has no
defense, assuming that both PEA and Yujuico titles are valid,
as held in Metropolitan Waterworks and Sewerage System
vs. CA, 215 SCRA 783, where two (2) certificates purport to
include the same land, the earlier in date prevails.
4.5 The documents so far submitted by the
parties to the court indicate that the mother title of
the Yujuico land when registered in 1974 was not
underwater. This was shown in the two (2) ocular
inspections conducted by the officials of the Land
Bureau.
4.6 The provision of P.D. 239 that no decree of
registration may be issued by the court unless upon approval
and recommendation of the Bureau of Lands was
substantially complied with in the Report of Lands Special
Attorney Saturnino Pacubas, submitted to the court.[48]
72
Even the counsel of respondent Republic, the OSG, arrived at the
conclusion that there is no sufficient legal basis for said respondent to
institute action to annul the titles of petitioners, thus:
It may be stated at the outset that a petition for
annulment of certificate of title or reconveyance of land may
be based on fraud which attended the issuance of the decree
of registration and the corresponding certificate of title.
 
Based on the decision in the LRC Case No. N-8239
involving the petition for registration and confirmation of
title filed by Fermina Castro, there is no showing that fraud
attended the issuance of OCT No. 10215. it appears that the
evidence presented by Fermina Castro was sufficient for the
trial court to grant her petition.
 
The testimony of Fermina Castro, which was
predecessors-in-interest had been in possession of the land
for more than thirty (30) years sufficiently established her
vested right over the property initially covered by OCT No.
10215. The report dated April 25, 1974 which was submitted
to the trial court by the Director of Lands through Special
Attorney Saturnino Pacubas showed that the parcel of land
was solid and dry land when Fermina Castros application for
registration of title was filed. It was based on the ocular
inspection conducted by Land Inspector Adelino Gorospe
and the joint circular inspection conducted by Geodetic
Engineer Manuel A. Cervantes and Administrative Assistant
Lazaro Berania on November 28, 1973 and March 22,
1974 respectively.
The aforesaid report must be requested unless there
is a concrete proof that there was an irregularity in the
issuance thereof. In the absence of evidence to the contrary,
the ocular inspection of the parcel of land, which was made
the basis of said report, is presumed to be in order.

Based on the available records, there appears
to be no sufficient basis for the Government to
institute an action for the annulment of OCT No.
10215 and its derivative titles. It is opined that a
petition for cancellation/annulment of Decree No.
N-150912 and OCT No. 10215 and all its derivative
titles will not prosper unless there is convincing
evidence to negate the report of the then Land
Management Bureau through Special Attorney
Pacubas. Should the Government pursue the filing
of such an action, the possibility of winning the case
is remote.[49]
More so, respondent Government, through its counsel, admits that
the land applied by Fermina Castro in 1973 was solid and dry land, negating
the nebulous allegation that said land is underwater. The only conclusion
that can be derived from the admissions of the Solicitor General and
Government Corporate Counsel is that the land subject of the titles of
petitioners is alienable land beyond the reach of the reversion suit of the
state.
 
Notably, the land in question has been the subject of a compromise
agreement upheld by this Court in Public Estates Authority.[50] In that
compromise agreement, among other provisions, it was held that the
property covered by TCT Nos. 446386 and S-29361, the land subject of the
instant case, would be exchanged for PEA property. The fact that PEA signed
the May 15, 1998 Compromise Agreement is already a clear admission that it
recognized petitioners as true and legal owners of the land subject of this
controversy.
 
Moreover, PEA has waived its right to contest the legality and validity
of Castros title. Such waiver is clearly within the powers of PEA since it was
created by PD 1084 as a body corporate which shall have the attribute of
perpetual succession and possessed of the powers of the corporations, to be
exercised in conformity with the provisions of this Charter [PD 1084].[51] It
has the power to enter into, make, perform and carry out contracts of every
class and description, including loan agreements, mortgages and other types
of security arrangements, necessary or incidental to the realization of its
73
purposes with any person, firm or corporation, private or public, and with
any foreign government or entity.[52] It also has the power to sue and be sued
in its corporate name.[53] Thus, the Compromise Agreement and the Deed of
Exchange of Real Property signed by PEA with the petitioners are legal, valid
and binding on PEA. In the Compromise Agreement, it is provided that it
settles in full all the claims/counterclaims of the parties against each other.
[54]
 The waiver by PEA of its right to question petitioners title is fortified by
the manifestation by PEA in the Joint Motion for Judgment based on
Compromise Agreement that
 
4. The parties herein hereto waive and abandon any
and all other claims and counterclaims which they may have
against each other arising from this case or related thereto.[55]
 
Thus, there was a valid waiver of the right of respondent Republic
through PEA to challenge petitioners titles.
 
The recognition of petitioners legal ownership of the land is further
bolstered by the categorical and unequivocal acknowledgment made by PEA
in its September 30, 2003 letter where it stated that: Your ownership thereof
was acknowledged by PEA when it did not object to your membership in the
CBP-IA Association, in which an owner of a piece of land in CBP-IA
automatically becomes a member thereof.[56] Section 26, Rule 130 provides
that the act, declaration or omission of a party as to a relevant fact may be
given in evidence against him. The admissions of PEA which is the real party-
in-interest in this case on the nature of the land of Fermina Castro are valid
and binding on respondent Republic. Respondents claim that the disputed
land is underwater falls flat in the face of the admissions of PEA against its
interests. Hence, res judicata now effectively precludes the relitigation of the
issue of registrability of petitioners lot.
 
In sum, the Court finds that the reversion case should be dismissed
for lack of jurisdiction on the part of the Paraaque RTC. Even if we treat said
case as a petition for annulment of judgment under Rule 47 of the 1997 Rules
of Civil Procedure, the dismissal of the case nevertheless has to be upheld
because it is already barred by laches. Even if laches is disregarded, still the
suit is already precluded by res judicata in view of the peculiar facts and
circumstances obtaining therein.
 74

 
WHEREFORE, premises considered, the petition
is GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No.
76212 is REVERSED and SET ASIDE, and the August 7, 2002 Order of the
Paraaque City RTC, Branch 257 in Civil Case No. 01-0222 entitled Republic
of the Philippines v. Fermina Castro, et al. dismissing the complaint
is AFFIRMED