NANCY T. LORZANO, G.R. No.

189647
Petitioner,
Present:

CARPIO, J.,
Chairperson,
- versus - BRION,
PEREZ,
SERENO, and
REYES, JJ.

Promulgated:
JUAN TABAYAG, JR.,
Respondent. February 6, 2012

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DECISION

REYES, J.:

Nature of the Petition

This is a petition for review on certiorari under Rule 45 of the Rules of Court 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 in CA-G.R. CV No. 87762 entitled Juan
Tabayag, Jr. v. Nancy T. Lorzano.

The Antecedent Facts

The instant case stemmed from an amended complaint[3] for annulment of document and reconveyance filed by Juan Tabayag,
Jr. (respondent) against the petitioner, docketed as Civil Case No. Ir-3286, with the Regional Trial Court (RTC) of Iriga City.

The petitioner and the respondent are two of the children of the late Juan Tabayag (Tabayag) who died on June 2, 1992. Tabayag
owned a parcel of land situated in Sto. Domingo, Iriga City (subject property). Right after the burial of their father, the petitioner allegedly
requested from her siblings that she be allowed to take possession of and receive the income generated by the subject property until
after her eldest son could graduate from college. The petitioners siblings acceded to the said request.

After the petitioners eldest son finished college, her siblings asked her to return to them the possession of the subject property
so that they could partition it among themselves. However, the petitioner refused to relinquish her possession of the subject property
claiming that she purchased the 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.

The respondent claimed that their father did not execute the said 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 signature of Tabayag.

Further, the respondent asserted that the said deed of sale was acknowledged before a person who was not a duly
commissioned Notary 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 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 the Province of Camarines Surand in the Cities of Iriga and Naga.

The respondent alleged that the petitioner purposely forged the signature of 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 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 name of the petitioner.
OCT No. 1786 was issued pursuant to Free Patent No. 051716 which was procured by the petitioner on June 24, 1996.

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, 1992 deed of sale. Further, the petitioner asserted that the respondent failed to establish that the signature of
Tabayag appearing on the said deed of sale 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]

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.

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]

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 must conduct an independent examination of the questioned signature in 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-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 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 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 in the name of another, to
compel the registered owner to transfer or reconvey the land to him. [35]

It cannot be gainsaid that the heirs of Tabayag, by themselves and through their predecessors-in-interest, had already acquired a vested
right over the subject property. An open, continuous, adverse and public possession of a land of the public domain from time immemorial
by a private individual personally and through his predecessors confers an effective title on said possessors whereby the land ceases to
be public, to become private property, at least by presumption. [36] Hence, the right of the heirs of Tabayag to ask for the reconveyance of
the subject property is irrefutable.

At this juncture, we deem it necessary to reiterate our disquisition in Naval v. Court of Appeals,[37] thus:

The fact that petitioner was able to secure a title in her name did not operate to vest ownership upon her of the subject
land. Registration of a piece of land under the Torrens System does not create or vest title, because it is not a mode of
acquiring ownership. A certificate of title is merely an 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
commission of fraud; neither does it permit one to enrich himself at the expense of others. Its issuance in favor of a
particular person does not foreclose the possibility that the real property may be co-owned with persons not named in
the certificate, or that it may be held in trust for another person by the registered owner. [38] (citations omitted)

WHEREFORE, in consideration of the foregoing disquisitions, the petition is DENIED. The Decision dated March 18, 2009 and
Resolution dated September 16, 2009 issued by the Court of Appeals in CA-G.R. CV No. 87762 are
hereby AFFIRMED with MODIFICATION. The petitioner is ordered to pay the respondent moral damages in the amount of Thirty
Thousand Pesos (P30,000.00).

SO ORDERED.
 HEIRS OF SPOUSES TEOFILO M. RETERTA and G.R. No. 159941
ELISA RETERTA, namely: EDUARDO M.
RETERTA, CONSUELO M. RETERTA, and
AVELINA M. RETERTA, Present:
Petitioners,
CORONA, C.J., Chairperson,
LEONARDO-DE CASTRO,
- versus - BERSAMIN,
DEL CASTILLO, and
VILLARAMA, JR., JJ.
SPOUSES LORENZO MORES and VIRGINIA
LOPEZ, Promulgated:
Respondents.
August 17, 2011
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DECISION

BERSAMIN, J.:

The original and exclusive jurisdiction over a complaint for quieting of title and reconveyance involving friar land belongs to either
the Regional Trial Court (RTC) or the Municipal Trial Court (MTC). Hence, the dismissal of such a complaint on the ground of lack of
jurisdiction due to the land in litis being friar land under the exclusive jurisdiction of the Land Management Bureau (LMB) amounts to
manifest grave abuse of discretion that can be corrected through certiorari.

The petitioners, whose complaint for quieting of title and reconveyance the RTC had dismissed, had challenged the dismissal
by petition for certiorari, but the Court of Appeals (CA) dismissed their petition on the ground that certiorari was not a substitute for an
appeal, the proper recourse against the dismissal. They now appeal that ruling of the CA promulgated on April 25, 2003.[1]

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 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;

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 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;

(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. InFrancisco 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 alitigant 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 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 damages would 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, 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.

As the provisions indicate, the authority of LMB under Act No. 1120, being limited to the administration and disposition of friar
lands, did not include the petitioners action for reconveyance. LMB ceases to have jurisdiction once the friar land is disposed of in favor
of a private person and title duly issues in the latters name. By ignoring the petitioners showing of its plain error in dismissing Civil Case
No. TM-983, and by disregarding the allegations of the complaint, the RTC acted whimsically and capriciously.

Given all the foregoing, the RTC committed grave abuse of discretion 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 and gross as to amount to an evasion of a positive duty or to a virtual refusal 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 of passion or hostility. [27]

The dismissal of Civil Case No. TM-983, unless undone, would leave the petitioners bereft of any remedy to protect their
substantial rights or interests in the land. As such, they would suffer grave injustice and irreparable damage. In that situation,
the RTCs dismissal should be annulled through certiorari, for the task of the remedy was to do justice to the unjustly aggrieved. [28]
 WHEREFORE, the Court grants the petition for certiorari; sets 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 resume the proceedings in Civil Case No. TM-983 with
dispatch.

The respondents shall pay the costs of suit.

SO ORDERED.
 [G.R. No. 141296. October 7, 2002]

REPUBLIC OF THE PHILIPPINES, Represented by the Regional Executive Director, Region III, Department of Environment and
Natural Resources (DENR), petitioner, vs. HEIRS OF AGUSTIN L. ANGELES, HEIRS OF CARMEN DE LEON Vda. DE
ANGELES, LUZ GANCAYCO ALVAREZ and the REGISTER OF DEEDS of BALANGA, BATAAN, respondents.

DECISION
PANGANIBAN, J.:

Elementary is the rule that prescription and laches will not bar actions filed by the State to recover its own property acquired
through fraud by private individuals.

The Case

Before us is a Petition for Review on Certiorari[1] seeking to set aside the Order[2] dated September 7, 1999, issued by the Regional
Trial Court (RTC) of Balanga, Bataan in Civil Case No. 6789. The challenged Order granted, on the ground of prescription, herein
respondents Motion to Dismiss petitioners Complaint for Reversion.
The decretal portion of the assailed Order reads as follows:

WHEREFORE, [being] meritorious, the [Motion to Dismiss] is hereby GRANTED and the instant complaint x x x DISMISSED.[3]

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:

xxxxxxxxx

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.

xxxxxxxxx

6. On April 16, 1967, Agustin L. Angeles died.

xxxxxxxxx

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.

xxxxxxxxx

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 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]
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 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 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.
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 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 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.

QUISUMBING, J.:

This petition assails the decision1 of the Court of Appeals in CA-G.R. CV No. 36923 dated June 14, 1996, which reversed the
decision2 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 Donation5 states as reason or consideration the donor's 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 Psl-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.

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 Psl-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 plaintiff's 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 attorney's 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. 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 commissioner's 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 attorney's 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

VI. THE RESPONDENT COURT SERIOUSLY ERRED WITH GRAVE ABUSE OF DISCRETION IN NOT AWARDING TO
PETITIONERS ATTORNEY'S 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 court's 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.

Even if the written communication sent by petitioners sometime in January 1969 15 and those made on February 10 and March 16, 1989
can be considered as written extrajudicial demands made by the creditors, they were nevertheless made way beyond the ten-year
period of prescription stated in the law.

With regard to the alleged excess of 33,607 square meters mistakenly 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.

Article 1456 of the Civil code states, "If property is acquired through mistake or fraud, the person obtaining it is, by force of law,
considered a trustee of an implied trust for the benefit of the person from whom the property comes." In the case of Bueno vs. Reyes,
G.R. No. L-22587, 27 SCRA 1179, 1183 (1969), we held that registration of property by one person in his name, whether by mistake or
fraud, the real owner being another person, impresses upon the title so acquired the character of a constructive trust for the real owner,
which would justify an action for reconveyance. However, it is now well-settled that an action for reconveyance of registered land based
on an implied trust prescribes in ten years 16 and it is from the date of issuance of such title that the effective assertion of adverse title for
purposes of the statute of limitations is counted.17

Granting that in the present case, the said excess portion of petitioners' land was mistakenly registered in the name of the
Commonwealth of the Philippines on September 9, 1939, still petitioners were admittedly aware of this fact. The issuance of the OCT
on said date stating the total area included should have apprised them, even constructively, that a portion of their land was mistakenly
claimed by the donee, respondent Republic's predecessor-in-interest. Petitioners should have taken appropriate legal action
seasonably, within the ten years prescriptive period. Since petitioners filed their action belatedly, we find that they have also lost any
right to the aforesaid portion of land consisting of 33,607 square meters.
For now, the causes of action which petitioners may have against the respondent Republic, in our view, are already barred by
prescription. 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 having been resolved, the other issues raised by petitioners no longer need elaboration for patent lack
of merit.

WHEREFORE, the petition for review is DENIED and the appealed decision of the Court of Appeals in CA-G.R. CV No. 36923, dated
June 14, 1996, is hereby AFFIRMED. No pronouncement as to costs.

SO ORDERED.
HEIRS OF VALERIANO S. CONCHA, G.R. No. 158121
SR. NAMELY: TERESITA CONCHA-
PARAN, VALERIANO P. CONCHA,
JR., RAMON P. CONCHA, EDUARDO
P. CONCHA, REPRESENTED BY HIS
LEGAL GUARDIAN, REYNALDO P.
CONCHA, ALBERTO P. CONCHA,
BERNARDO P. CONCHA and GLORIA Present:
P. CONCHA-NUNAG,
Petitioners, PUNO, C.J., Chairperson,
YNARES-SANTIAGO,
SANDOVAL-GUTIERREZ,
- versus - CORONA, and
AZCUNA, JJ.
SPOUSES GREGORIO J. LUMOCSO[1]
and BIENVENIDA GUYA, CRISTITA
J. LUMOCSO VDA. DE DAAN, AND
SPOUSES JACINTO J. LUMOCSO Promulgated:
and BALBINA T. LUMOCSO,[2]
Respondents. December 12, 2007

x--------------------------------------------------x

DECISION

PUNO, C.J.:

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;

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 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) that respondents' free patents and the corresponding OCTs
were issued "on account of fraud, deceit, bad faith and misrepresentation"; and k) that the lots in question have not been transferred to
an innocent purchaser.

On separate occasions, respondents moved for the dismissal of the respective cases against them on the same grounds of: (a)
lack of jurisdiction of the RTC over the subject matters of the complaints; (b) failure to state causes of action for reconveyance; (c)
prescription; and (d) waiver, abandonment, laches and estoppel. [13] On the issue of jurisdiction, respondents contended that the RTC has
no jurisdiction over the complaints 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 than P20,000.00.

Petitioners opposed,[14] contending that the instant cases involve 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 the exclusive original jurisdiction of the
RTCs. They also contended that they have two main causes of action: for reconveyance and for recovery of the value of the trees felled
by respondents. Hence, the totality of the claims must be considered which, if computed, allegedly falls within the exclusive original
jurisdiction of the RTC.

The trial court denied the respective motions to dismiss of respondents. [15] The respondents filed a Joint Motion for
Reconsideration,[16] to no avail.[17]

Dissatisfied, respondents jointly filed a Petition for Certiorari, Prohibition and Preliminary Injunction with Prayer for Issuance of
Restraining Order Ex Parte[18] with the CA, docketed as CA-G.R. SP No. 59499. In its Decision,[19] the CA reversed the resolutions and
order of the trial court. It held that even assuming that the complaints state a cause of action, the same have been barred by the statute
of limitations. The CA ruled that an action for reconveyance based on fraud prescribes in ten (10) years, hence, the instant complaints
must be dismissed as they involve titles issued for at least twenty-two (22) years prior to the filing of the complaints. The CA found it
unnecessary to resolve the other issues.

Hence, this appeal in which petitioners raise the following issues, viz:

FIRST - WHETHER OR NOT RESPONDENT COURT OF APPEALS (FORMER FIRST DIVISION) ERRED IN
REVERSING THE ORDER OF THE COURT A QUO DENYING THE MOTION FOR DISMISSAL, CONSIDERING
THE DISMISSAL OF A PARTY COMPLAINT IS PREMATURE AND TRIAL ON THE MERITS SHOULD BE
CONDUCTED TO THRESH OUT EVIDENTIARY MATTERS.

SECOND - WHETHER OR NOT THE RESPONDENT COURT OF APPEALS (FORMER FIRST DIVISION) ERRED
IN DISMISSING THE PETITIONERS' COMPLAINTS ON [THE] GROUND OF PRESCRIPTION.

THIRD - WHETHER OR NOT THE RESPONDENT COURT OF APPEALS (FORMER FIRST DIVISION) ERRED IN
CONCLUDING THAT THERE IS NO DOCUMENTARY EVIDENCE ON RECORD TO SHOW THAT PETITIONERS
OWN THE SUBJECT FOREST
PORTION OF THE PROPERTIES ERRONEOUSLY INCLUDED IN THE TITLES OF PRIVATE RESPONDENTS.

FOURTH - WHETHER OR NOT THE PETITION OF HEREIN PRIVATE RESPONDENTS FILED WITH THE
RESPONDENT COURT OF APPEALS (FORMER FIRST DIVISION) SHOULD HAVE BEEN DISMISSED
OUTRIGHTLY FOR PRIVATE RESPONDENTS' THEREIN FAILURE TO COMPLY WITH THE MANDATORY
REQUIREMENT OF SECTION 1 RULE 65 OF THE RULES OF COURT TO SUBMIT CERTIFIED TRUE COPIES OF
THE ASSAILED ORDERS OF THE TRIAL COURT WHICH RENDERED THEIR PETITION (CA G.R. 59499)
DEFICIENT IN FORM AND SUBSTANCE CITING THE 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
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 cited: a) Raymundo v. CA[24] 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 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 the registered owner [33] and
that the property has not yet passed to the hands 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:

Section 19. Jurisdiction in Civil Cases.-- Regional Trial Courts shall exercise exclusive original jurisdiction: x
xx

(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 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 exceeds Twenty thousand
pesos (P20,000.00) or for civil actions 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 the subject properties may be included in the term "any interest therein." However,
the law is emphatic that in determining which court has 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 subject properties as shown by their tax declarations are
less than P20,000.00.Clearly, jurisdiction over the instant cases belongs not to the RTC but to the MTC.

IN VIEW WHEREOF, the decision of the Court of Appeals is hereby AFFIRMED that the RTC of Dipolog City, Branch 9, has no
jurisdiction in Civil Case Nos. 5188, 5433 and 5434.

No costs.

SO ORDERED.
VICENTE CAWIS (substituted G.R. No. 170207
by his son, EMILIO CAWIS),
PEDRO BACLANGEN,
FELIZA DOMILIES, Present:
IVAN MANDI-IT a.k.a.
IVAN MANDI-IT LUPADIT, CARPIO, J., Chairperson,
DOMINGO CAWIS and BRION,
GERARD LIBATIQUE, DEL CASTILLO,
Petitioners, ABAD, and
PEREZ, JJ.

- versus -

HON. ANTONIO CERILLES,

in his capacity as the DENR Secretary,
HON. MANUEL GEROCHI, in his
capacity as the Director, Lands,
Management Bureau, and Promulgated:
MA. EDELIZA PERALTA,
Respondents. April 19, 2010
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CARPIO, J.:

The Case

This is a petition for review[1] of the 17 February 2005 Decision[2] and the 6 September 2005 Resolution[3] of the Court of Appeals
(appellate court) in CA-G.R. CV No. 66685. In its 17 February 2005 Decision, the appellate court affirmed the 3 November 1999
Resolution[4] of Branch 61 of the Regional Trial Courtof Baguio City (trial court), which dismissed the complaint filed by Vicente Cawis,
Pedro Baclangen, Feliza Domilies, Ivan Mandi-it, Domingo Cawis, and Gerard Libatique (collectively petitioners). In its 6 September 2005
Resolution, the appellate court denied petitioners motion for reconsideration.

The Facts

On 23 September 1957, the Department of Environment and Natural Resources (DENR), pursuant to Section 79 [5] of the Public Land
Act,[6] approved the sales patent application of Jose V. Andrada (Andrada) for Lot No. 47 with an area of 1,339 square meters situated
within Holy Ghost Hill Subdivision in Baguio City. Sales Patent No. 1319 was issued to Andrada upon full payment of the purchase price
of the lot on 20 November 1968, as evidenced by O.R. No. 459651. [7]

On 4 August 1969, Republic Act No. 6099[8] took effect. It provided that 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 provisions of Republic Act No. 730.[9]

Claiming to be the actual occupants referred to in R.A. No. 6099, petitioners protested the sales patent awarded to Andrada. The Bureau
of Lands denied their protest on the ground that R.A. No. 6099, being of later passage, could no longer affect the earlier award of sales
patent to Andrada. Petitioners sought reconsideration, but the Bureau of Lands denied it on 19 May 1987. 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

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 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.

In view of the foregoing facts and circumstances, we regret to inform you that we cannot reconsider our position on this
matter. It is further advised that you vacate the premises and remove all your improvements thereon so that the
applicant-awardee (Andrada) can take immediate possession of the land in question. [28]

Clearly then, fraud cannot be imputed to Andrada. His supposed failure to introduce improvements on Lot No. 47 is simply due to
petitioners refusal to vacate the lot. It appears from the factual finding of the Director of Lands that petitioners are the ones in bad
faith. Contrary to petitioners claim, R.A. No. 6099 did not automatically confer on them ownership of the public land within Holy Ghost Hill
Subdivision. The law itself, Section 2 of R.A. No. 6099, provides that the occupants must first apply for a sales patent in order to avail of
the benefits of the law, thus:

SEC. 2. Except those contrary to the provisions of Republic Act Numbered Seven Hundred and Thirty, all other
provisions of Commonwealth Act Numbered One hundred and Forty-One governing the procedure of issuing titles shall
apply in the disposition of the parcels above-described to the beneficiaries of this Act.

The complaint filed by petitioners did not state that they had filed an application for a sales patent over Lot No. 47. Even if it did, an
application 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.

Consequently, the prescription issue pertaining to the action for reversion initiated by petitioners who could not have successfully initiated
the reversion suit in the first place, is now moot.

WHEREFORE, we DENY the petition for review. We AFFIRM the 17 February 2005 Decision and the 6 September 2005 Resolution of
the Court of Appeals in CA-G.R. CV No. 66685.

Costs against petitioners.

SO ORDERED.
SAAD AGRO-INDUSTRIES, INC., G.R. No. 152570
Petitioner,
Present:

QUISUMBING, J.,
Chairperson,
- versus - CARPIO,
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
REPUBLIC OF THE PHILIPPINES,
Respondent.
x------------------------------------------------x Promulgated:
PEDRO URGELLO, September 27, 2006
Intervenor-Appellant.

x---------------------------------------------------------------------------x

DECISION

TINGA, J.:

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. 64097, reversing and setting aside the Decision of the Regional Trial Court of Cebu, Branch 11, Cebu City in Civil Case No.
CEB-17173.

The antecedents follow.

On 18 October 1967, Socorro Orcullo (Orcullo) filed her application 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 14 February 1971, the Secretary of
Agriculture and Natural Resources issued Free Patent No. 473408 for Lot No. 1434, while the Registry of Deeds for the 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 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.
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.[24]

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?
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 Marcos to 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;

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 facie evidence 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 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 dated 15 May 1999 dismissing the complaint for
reversion and the complaint-in-intervention is REINSTATED.

SO ORDERED.
 [G.R. No. 123231. November 17, 1997]

HEIRS OF MARCIANO NAGAO, petitioners, vs. COURT OF APPEALS, SPOUSES PONCIANO MALLARI and GLORIA BINUYA,
SPOUSES ELENA MALLARI and MELENCIO TULABAN, and REGINA MALLARI, respondents.

DECISION
DAVIDE, JR., J.:

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-G.R. CV No. 40017[1] which set aside the Order of the Regional Trial Court of Gapan, Nueva Ecija, Branch 35 in Civil Case No.
836[2] dismissing private respondents complaint[3] which sought the declaration of nullity of the Original Certificate of Title (OCT) issued
pursuant to a Free Patent in the name of petitioners.
The factual antecedents, as succinctly summarized by the Court of Appeals, are as follows:

Plaintiffs-appellants [private respondents] filed a complaint for the declaration of nullity of Original Certificate of Title No. P-8265 issued
in the 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 account of the fraud, deceit, and misrepresentation committed by defendant 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 alleged that part of the subject property was owned by their predecessors-in-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. 3275 was registered by defendant Valerio under Free Patent No. (III-2) 001953 and OCT No. P-8265 in the name of the
heirs of Marciano Nagao. They allegedly demanded from defendant Valerio to execute the 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 demands.

A motion to dismiss was filed by defendants-appellees on the following grounds, viz.:

1. The court has no jurisdiction over the nature of the action;

2. Plaintiffs have no cause of action against the defendants, since suit for annulment of title which actually is a reversion proceedings
should be instituted by the Solicitor;

3. Plaintiffs 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. [4]

In its Order of 21 September 1992,[5] the trial court granted petitioners motion to dismiss on the ground that:

[The] action to annul the subject certificate of title, which is the plaintiffs principal cause of action, should be instituted by the Solicitor
General. (Lopez v. Padilla, 45 SCRA 44; Maximo v. CFI of Capis (sic), 182 SCRA 420; and Sumali v. Judge of CFI Cotabato, 96 Phil.
946, cited by the defendants).

Private respondents appealed the order of dismissal to respondent court raising this lone assignment of error:

THE COURT ERRED IN DISMISSING THE CASE AND/OR ALL THE CAUSES OF ACTION OF THE PLAINTIFF-APPELLANTS.[6]

In its decision[7] of 20 September 1995, the Court of Appeals set aside the challenged order of the trial court and reinstated private
respondents 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.
Petitioners motion to reconsider[9] 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

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.

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 general could initiate. The propriety of
that ruling was the primary issue 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 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 land in question is not private property and that private
respondents are not 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 reasons stated above.
Costs against petitioners.
SO ORDERED.
 EDGARDO D. DOLAR, G.R. No. 152663

Petitioner,
Present:

PANGANIBAN, J., Chairman,

- versus -
SANDOVAL-GUTIERREZ,

CORONA,

CARPIO-MORALES, and
BARANGAY LUBLUB (now P.D. Monfort North) of the GARCIA, JJ.
Municipality of Dumangas, herein represented by its
Punong Barangay, PEPITO DUA, PHILIPPINE LONG
DISTANCE TELEPHONE COMPANY, DUMANGAS WATER
DISTRICT, 4th ILOILO MOBILE GROUP, ILOILO PROVINCIAL Promulgated:
POLICE, ILOILO REGIONAL TRIAL COURT, BRANCH 68,

Respondents.

November 18, 2005

x-------------------------------------------x

D E C I S I O N

GARCIA, J.:

Via this petition for review on certiorari under Rule 45 of the Rules of Court, 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 and 00-140.

The facts:

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. 1, for brevity), situated in Brgy. Lublub, Municipality of Dumangas, Iloilo. Said property forms part of Lots No. 4181 and
4183 of the Dumangas Cadastre.

On September 16, 1981, petitioner and Jaranilla donated Lot No. 1 to respondent Barangay Lublub, subject to the following
conditions:

A.) That the area donated shall be for the purpose of con[s]tructing building and/or establishing public plaza, sports
complex, public market, health centers and the like for the use of the Barangay of Lublub which area shall be hereinafter
be known as DON VENANCIO DOLAR PLAZA and shall be so designated in a proper landmark;

B.) That the construction and development of the area above-described shall be initiated and completed within five (5)
years from the execution of this Deed of Donation and should the same be not made or completed then this Deed of
Donation shall have no force and effect whatsoever and the 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 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 . . . .

15. That the plaintiff, as exclusive, absolute, and registered 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 thereon. All these for the use and benefit of Barangay
Lublub, now P.D. Monfort North, . . . .

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 cause of action, if any, thus:

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 Dismiss[9] 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 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 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 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]

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 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.

Costs against petitioner.

SO ORDERED.
 [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 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
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.

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 domainafter 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 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
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.

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.

Clearly, the Court of Appeals should not have ruled outright 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 reversion or reconveyance to the State is not barred by prescription."

III

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.
In China Road and Bridge Corporation vs. Court of Appeals,[11] we ruled:
It is well settled that in a motion to dismiss based on lack of cause of action, the issue is passed upon on the basis of the
allegations assuming them to be true. The court does not inquire into the truth of the allegations and declare them to be false,
otherwise it would be a procedural error and a denial of due process to the plaintiff. Only the statements in the complaint may be
properly considered, and the court cannot take cognizance of external facts or hold preliminary 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 against the defendants is whether
or not, admitting hypothetically the truth of the allegations of fact made in the complaint, the judge may validly grant the relief demanded
in the complaint.

We reviewed very carefully respondents allegations in its complaint. In a nutshell, respondent alleged that the defendants (herein
petitioner and its predecessors-in-interest) procured their lot is inalienable because the DENR investigation disclosed that it was intended
by the government for the construction of a national road; that defendants titles are null and void and should be cancelled and, therefore,
Lot 4355 should be reverted to the State. These allegations are sufficient to constitute a cause of action for reversion.
In sum, we hold that petitioners resort to certiorari is misplaced. And 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 any grave abuse of discretion.
WHEREFORE, the petition is DENIED. The assailed Decision 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.
ESTATE OF THE LATE G.R. No. 168661
JESUS S. YUJUICO, represented
by ADMINISTRATORS
BENEDICTO V. YUJUICO and Present:
EDILBERTO V. YUJUICO; and
AUGUSTO Y. CARPIO, QUISUMBING, J., Chairperson,
Petitioners, CARPIO MORALES,
TINGA,
VELASCO, JR., and
- versus - NACHURA,* JJ.

REPUBLIC OF THE PHILIPPINES Promulgated:

and the COURT OF APPEALS,
Respondents. October 26, 2007
x-----------------------------------------------------------------------------------------x

DECISION
VELASCO, JR., J.:

In 1973, Fermina Castro filed an application for the registration and confirmation of her title over a parcel of land with an area of 17,343
square meters covered by plan (LRC) Psu-964 located in the Municipality of 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.
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 Manila Bay 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; 1 st 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) 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 Bay and that the trial court erred in
dismissing Civil Case No. 01-0222 on the ground of res judicata.[14]

The CA observed that shores are properties of the public domain intended for public use and, therefore, not registrable and their inclusion
in a certificate of title does not convert the same into properties of private ownership or confer title upon the registrant.

Further, according to the appellate court res judicata does not apply to lands of public domain, nor does possession of the land
automatically divest the land of its public character.
The appellate court explained that rulings of the Supreme Court have made exceptions in cases where the findings of the
Director of Lands and the Department of Environment and Natural Resources (DENR) were conflicting as to the true nature of the land
in as much as reversion efforts pertaining foreshore lands are embued with public interest.

The dispositive portion of the CA decision reads,

WHEREFORE, premises considered, the present appeal is hereby GRANTED. The appealed Order dated August 7,
2002 of the trial court in Civil Case No. 01-0222 is hereby REVERSED and SET ASIDE. The case is hereby
REMANDED to said court for further proceedings and a full-blown trial on the merits with utmost dispatch.[15]

Hence, this petition.

 The Issues

Petitioners now raise the following issues before this Court:

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR AND DECIDED A QUESTION OF SUBSTANCE IN
A WAY NOT IN ACCORDANCE WITH LAW AND THE APPLICABLE DECISIONS OF THE HONORABLE COURT
AND HAS DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS
NECESSITATING THE HONORABLE COURTS EXERCISE OF ITS POWER OF SUPERVISION CONSIDERING
THAT:

I. THE REVERSAL BY THE COURT OF APPEALS OF THE TRIAL COURTS APPLICATION OF THE
PRINCIPLE OF RES JUDICATA IN THE INSTANT CASE IS BASED ON ITS ERRONEOUS ASSUMPTION THAT
THE SUBJECT LAND IS OF PUBLIC DOMAIN, ALLEGEDLY PART OF MANILA BAY.

A. IN THE FIRESTONE CASE, THE HONORABLE COURT APPLIED THE PRINCIPLE OF RES
JUDICATA NOTWITHSTANDING ALLEGATIONS OF LACK OF JURISDICTION OF A LAND
REGISTRATION COURT, FORECLOSING ANY FURTHER ATTEMPT BY RESPONDENT THEREIN,
AS IN THE INSTANT CASE, TO RESURRECT A LONG-SETTLED JUDICIAL DETERMINATION OF
REGISTRABILITY OF A PARCEL OF LAND BASED ON THE SHEER ALLEGATION THAT THE SAME
IS PART OF THE PUBLIC DOMAIN.

B. THE LAND REGISTRATION COURT HAD JURISDICTION TO DETERMINE WHETHER

THE SUBJECT LAND WAS PART OF THE PUBLIC DOMAIN.

C. RESPONDENTS REVERSION CASE SEEKS TO RETRY THE VERY SAME FACTUAL ISSUES THAT
HAVE ALREADY BEEN JUDICIALLY DETERMINED OVER THIRTY (30) YEARS AGO.

D. THE JURISPRUDENTIAL BASES APPLIED BY THE COURT OF APPEALS IN ITS QUESTIONED

DECISION ARE MISPLACED, CONSIDERING THAT THEY ARE ALL PREDICATED ON THE
ERRONEOUS PREMISE THAT IT IS UNDISPUTED THAT THE SUBJECT LAND IS PART OF THE
PUBLIC DOMAIN.

II. RESPONDENT IS BARRED BY JURISDICTIONAL ESTOPPEL AND LACHES FROM QUESTIONING

THE JURISDICTION OF THE LAND REGISTRATION COURT.

III. RELIANCE BY THE COURT OF APPEALS ON THE ISOLATED PRONOUNCEMENT OF THE

HONORABLE COURT IN THE PEA CASE IS UNWARRANTED AND MISLEADING CONSIDERING THAT THE
MATTER OF WHETHER RES JUDICATA APPLIES WITH RESPECT TO THE LAND REGISTRATION COURTS
DECISION IN 1974 WAS NOT IN ISSUE IN SAID CASE.

A. THE INSTANT REVERSION CASE IS NOT THE PROPER RECOURSE.

B. THE VALIDITY OF THE COURT-APPROVED COMPROMISE AGREEMENT 15 MAY 1998 HAS

ALREADY BEEN AFFIRMED BY THE HONORABLE COURT IN THE PEA CASE.

IV. EQUITABLE CONSIDERATIONS MANDATE THE APPLICATION OF THE RULE ON ORDINARY

ESTOPPEL AND LACHES IN THE INSTANT CASE AGAINST RESPONDENT.

V. RESPONDENT CANNOT BE GIVEN SPECIAL CONSIDERATION AND EXCUSED FOR

TRANSGRESSING RULES OF PROCEDURE.[16]

Essentially, the issues boil down to three: (1) Is a reversion suit proper in this case? (2) Is the present petition estopped by
laches? (3) Did the CA erroneously apply the principle of res judicata?

An action for reversion seeks to restore public land fraudulently awarded and disposed of to private individuals or corporations
to the mass of public domain.[17] This remedy is provided under Commonwealth Act (CA) No. 141 (Public Land Act) which became
effective on December 1, 1936. Said law recognized the power of the state to recover lands of public domain. Section 124 of CA No. 141
reads:

SEC. 124. Any acquisition, conveyance, alienation, transfer, or other contract made or executed in violation
of any of the provisions of Sections one hundred and eighteen, one hundred and twenty, one hundred and twenty one,
one hundred and twenty-two, and one hundred twenty-three of this Act shall be unlawful and null and void from its
execution and shall produce the effect of annulling and cancelling the grant, title, patent, or permit originally issued,
recognized or confirmed, actually or presumptively, and cause the reversion of the property and its improvements
to the State. (Emphasis supplied.)
 Pursuant to Section 124 of the Public Land Act, reversion suits are proper in the following instances, to wit:

1. Alienations of land acquired under free patent or homestead provisions in violation of Section 118, CA No. 141;

2. Conveyances made by non-Christians in violation of Section 120, CA No. 141; and

3. Alienations of lands acquired under CA No. 141 in favor of persons not qualified under Sections 121, 122, and 123 of CA No.
141.

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.

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 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 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 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,
1998 Resolution 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.

[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]
 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 Bayat 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
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, 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:

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.

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]

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 corroborated by Emiliano de Leon, that she and her
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 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.

WHEREFORE, premises considered, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No. 76212
is REVERSED andSET 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.

No costs.

SO ORDERED.