LAND TITLES AND DEEDS

CASES
REGALIAN DOCTRINE
Concept
1. Cruz v. Sec. of DENR
G.R. No. 135385, December 6, 2000

EN BANC

G.R. No. 135385 December 6, 2000

ISAGANI CRUZ and CESAR EUROPA, petitioners,

vs.
SECRETARY OF ENVIRONMENT AND NATURAL RESOURCES, SECRETARY OF
BUDGET AND MANAGEMENT and CHAIRMAN and COMMISSIONERS OF THE NATIONAL
COMMISSION ON INDIGENOUS PEOPLES, respondents.
HON. JUAN M .FLAVIER, HON. PONCIANO BENNAGEN, BAYANI ASCARRAGA, EDTAMI
MANSAYANGAN, BASILIO WANDAG, EVELYN DUNUAN, YAOM TUGAS, ALFREMO
CARPIANO, LIBERATO A. GABIN, MATERNIDAD M. COLAS, NARCISA M. DALUPINES,
BAI KIRAM-CONNIE SATURNO, BAE MLOMO-BEATRIZ T. ABASALA, DATU
BALITUNGTUNG-ANTONIO D. LUMANDONG, DATU MANTUMUKAW TEOFISTO
SABASALES, DATU EDUAARDO BANDA, DATU JOEL UNAD, DATU RAMON BAYAAN,
TIMUAY JOSE ANOY, TIMUAY MACARIO D. SALACAO, TIMUAY EDWIN B. ENDING,
DATU SAHAMPONG MALANAW VI, DATU BEN PENDAO CABIGON, BAI NANAPNAY-LIZA
SAWAY, BAY INAY DAYA-MELINDA S. REYMUNDO, BAI TINANGHAGA HELINITA T.
PANGAN, DATU MAKAPUKAW ADOLINO L. SAWAY, DATU MAUDAYAW-CRISPEN
SAWAY, VICKY MAKAY, LOURDES D. AMOS, GILBERT P. HOGGANG, TERESA GASPAR,
MANUEL S. ONALAN, MIA GRACE L. GIRON, ROSEMARIE G. PE, BENITO CARINO,
JOSEPH JUDE CARANTES, LYNETTE CARANTES-VIVAL, LANGLEY SEGUNDO, SATUR
S. BUGNAY, CARLING DOMULOT, ANDRES MENDIOGRIN, LEOPOLDO ABUGAN,
VIRGILIO CAYETANO, CONCHITA G. DESCAGA, LEVY ESTEVES, ODETTE G. ESTEVEZ,
RODOLFO C. AGUILAR, MAURO VALONES, PEPE H. ATONG, OFELIA T. DAVI,
PERFECTO B. GUINOSAO, WALTER N. TIMOL, MANUEL T. SELEN, OSCAR DALUNHAY,
RICO O. SULATAN, RAFFY MALINDA, ALFREDO ABILLANOS, JESSIE ANDILAB,
MIRLANDO H. MANGKULINTAS, SAMIE SATURNO, ROMEO A. LINDAHAY, ROEL S.
MANSANG-CAGAN, PAQUITO S. LIESES, FILIPE G. SAWAY, HERMINIA S. SAWAY,
JULIUS S. SAWAY, LEONARDA SAWAY, JIMMY UGYUB, SALVADOR TIONGSON,
VENANCIO APANG, MADION MALID, SUKIM MALID, NENENG MALID, MANGKATADONG
AUGUSTO DIANO, JOSEPHINE M. ALBESO, MORENO MALID, MARIO MANGCAL, FELAY
DIAMILING, SALOME P. SARZA, FELIPE P. BAGON, SAMMY SALNUNGAN, ANTONIO D.
EMBA, NORMA MAPANSAGONOS, ROMEO SALIGA, SR., JERSON P. GERADA, RENATO
T. BAGON, JR., SARING MASALONG, SOLEDAD M. GERARDA, ELIZABETH L. MENDI,

Page 1 of 62
MORANTE S. TIWAN, DANILO M. MALUDAO, MINORS MARICEL MALID, represented by
her father CORNELIO MALID, MARCELINO M. LADRA, represented by her father MONICO
D. LADRA, JENNYLYN MALID, represented by her father TONY MALID, ARIEL M.
EVANGELISTA, represented by her mother LINAY BALBUENA, EDWARD M. EMUY, SR.,
SUSAN BOLANIO, OND, PULA BATO B'LAAN TRIBAL FARMER'S ASSOCIATION, INTER-
PEOPLE'S EXCHANGE, INC. and GREEN FORUM-WESTERN VISAYAS, intervenors.
COMMISSION ON HUMAN RIGHTS, intervenor.
IKALAHAN INDIGENOUS PEOPLE and HARIBON FOUNDATION FOR THE
CONSERVATION OF NATURAL RESOURCES, INC., intervenor.

RESOLUTION

PER CURIAM:

Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition and mandamus as
citizens and taxpayers, assailing the constitutionality of certain provisions of Republic Act
No. 8371 (R.A. 8371), otherwise known as the Indigenous Peoples Rights Act of 1997
(IPRA), and its Implementing Rules and Regulations (Implementing Rules).

In its resolution of September 29, 1998, the Court required respondents to comment.1 In
compliance, respondents Chairperson and Commissioners of the National Commission on
Indigenous Peoples (NCIP), the government agency created under the IPRA to implement its
provisions, filed on October 13, 1998 their Comment to the Petition, in which they defend the
constitutionality of the IPRA and pray that the petition be dismissed for lack of merit.

On October 19, 1998, respondents Secretary of the Department of Environment and Natural
Resources (DENR) and Secretary of the Department of Budget and Management (DBM) filed
through the Solicitor General a consolidated Comment. The Solicitor General is of the view that
the IPRA is partly unconstitutional on the ground that it grants ownership over natural resources
to indigenous peoples and prays that the petition be granted in part.

On November 10, 1998, a group of intervenors, composed of Sen. Juan Flavier, one of the
authors of the IPRA, Mr. Ponciano Bennagen, a member of the 1986 Constitutional
Commission, and the leaders and members of 112 groups of indigenous peoples (Flavier, et.
al), filed their Motion for Leave to Intervene. They join the NCIP in defending the constitutionality
of IPRA and praying for the dismissal of the petition.

On March 22, 1999, the Commission on Human Rights (CHR) likewise filed a Motion to
Intervene and/or to Appear as Amicus Curiae. The CHR asserts that IPRA is an expression of
the principle of parens patriae and that the State has the responsibility to protect and guarantee
the rights of those who are at a serious disadvantage like indigenous peoples. For this reason it
prays that the petition be dismissed.

On March 23, 1999, another group, composed of the Ikalahan Indigenous People and the
Haribon Foundation for the Conservation of Natural Resources, Inc. (Haribon, et al.), filed a
motion to Intervene with attached Comment-in-Intervention. They agree with the NCIP and
Flavier, et al. that IPRA is consistent with the Constitution and pray that the petition for
prohibition and mandamus be dismissed.

The motions for intervention of the aforesaid groups and organizations were granted.

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Oral arguments were heard on April 13, 1999. Thereafter, the parties and intervenors filed their
respective memoranda in which they reiterate the arguments adduced in their earlier pleadings
and during the hearing.

Petitioners assail the constitutionality of the following provisions of the IPRA and its
Implementing Rules on the ground that they amount to an unlawful deprivation of the
States ownership over lands of the public domain as well as minerals and other natural
resources therein, in violation of the regalian doctrine embodied in Section 2, Article XII
of the Constitution:

"(1) Section 3(a) which defines the extent and coverage of ancestral domains, and Section 3(b)
which, in turn, defines ancestral lands;

"(2) Section 5, in relation to section 3(a), which provides that ancestral domains including
inalienable public lands, bodies of water, mineral and other resources found within ancestral
domains are private but community property of the indigenous peoples;

"(3) Section 6 in relation to section 3(a) and 3(b) which defines the composition of ancestral
domains and ancestral lands;

"(4) Section 7 which recognizes and enumerates the rights of the indigenous peoples over the
ancestral domains;

(5) Section 8 which recognizes and enumerates the rights of the indigenous peoples over the
ancestral lands;

"(6) Section 57 which provides for priority rights of the indigenous peoples in the harvesting,
extraction, development or exploration of minerals and other natural resources within the areas
claimed to be their ancestral domains, and the right to enter into agreements with
nonindigenous peoples for the development and utilization of natural resources therein for a
period not exceeding 25 years, renewable for not more than 25 years; and

"(7) Section 58 which gives the indigenous peoples the responsibility to maintain, develop,
protect and conserve the ancestral domains and portions thereof which are found to be
necessary for critical watersheds, mangroves, wildlife sanctuaries, wilderness, protected areas,
forest cover or reforestation."2

Petitioners also content that, by providing for an all-encompassing definition of

"ancestral domains" and "ancestral lands" which might even include private lands found
within said areas, Sections 3(a) and 3(b) violate the rights of private landowners.3

In addition, petitioners question the provisions of the IPRA defining the powers and
jurisdiction of the NCIP and making customary law applicable to the settlement of
disputes involving ancestral domains and ancestral lands on the ground that these
provisions violate the due process clause of the Constitution.4

These provisions are:

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 "(1) sections 51 to 53 and 59 which detail the process of delineation and recognition of
ancestral domains and which vest on the NCIP the sole authority to delineate ancestral
domains and ancestral lands;

"(2) Section 52[i] which provides that upon certification by the NCIP that a particular area
is an ancestral domain and upon notification to the following officials, namely, the
Secretary of Environment and Natural Resources, Secretary of Interior and Local
Governments, Secretary of Justice and Commissioner of the National Development
Corporation, the jurisdiction of said officials over said area terminates;

"(3) Section 63 which provides the customary law, traditions and practices of indigenous
peoples shall be applied first with respect to property rights, claims of ownership,
hereditary succession and settlement of land disputes, and that any doubt or ambiguity
in the interpretation thereof shall be resolved in favor of the indigenous peoples;

"(4) Section 65 which states that customary laws and practices shall be used to resolve
disputes involving indigenous peoples; and

"(5) Section 66 which vests on the NCIP the jurisdiction over all claims and disputes
involving rights of the indigenous peoples."5

Finally, petitioners assail the validity of Rule VII, Part II, Section 1 of the NCIP Administrative
Order No. 1, series of 1998, which provides that "the administrative relationship of the NCIP to
the Office of the President is characterized as a lateral but autonomous relationship for
purposes of policy and program coordination." They contend that said Rule infringes upon the
Presidents power of control over executive departments under Section 17, Article VII of the
Constitution.6

Petitioners pray for the following:

"(1) A declaration that Sections 3, 5, 6, 7, 8, 52[I], 57, 58, 59, 63, 65 and 66 and other
related provisions of R.A. 8371 are unconstitutional and invalid;

"(2) The issuance of a writ of prohibition directing the Chairperson and Commissioners of
the NCIP to cease and desist from implementing the assailed provisions of R.A. 8371
and its Implementing Rules;

"(3) The issuance of a writ of prohibition directing the Secretary of the Department of
Environment and Natural Resources to cease and desist from implementing Department
of Environment and Natural Resources Circular No. 2, series of 1998;

"(4) The issuance of a writ of prohibition directing the Secretary of Budget and
Management to cease and desist from disbursing public funds for the implementation of
the assailed provisions of R.A. 8371; and

"(5) The issuance of a writ of mandamus commanding the Secretary of Environment and
Natural Resources to comply with his duty of carrying out the States constitutional
mandate to control and supervise the exploration, development, utilization and
conservation of Philippine natural resources."7

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After due deliberation on the petition, the members of the Court voted as follows:

Seven (7) voted to dismiss the petition. Justice Kapunan filed an opinion, which the Chief
Justice and Justices Bellosillo, Quisumbing, and Santiago join, sustaining the validity of the
challenged provisions of R.A. 8371. Justice Puno also filed a separate opinion sustaining all
challenged provisions of the law with the exception of Section 1, Part II, Rule III of NCIP
Administrative Order No. 1, series of 1998, the Rules and Regulations Implementing the IPRA,
and Section 57 of the IPRA which he contends should be interpreted as dealing with the large-
scale exploitation of natural resources and should be read in conjunction with Section 2, Article
XII of the 1987 Constitution. On the other hand, Justice Mendoza voted to dismiss the petition
solely on the ground that it does not raise a justiciable controversy and petitioners do not have
standing to question the constitutionality of R.A. 8371.

Seven (7) other members of the Court voted to grant the petition. Justice Panganiban filed a
separate opinion expressing the view that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and related
provisions of R.A. 8371 are unconstitutional. He reserves judgment on the constitutionality of
Sections 58, 59, 65, and 66 of the law, which he believes must await the filing of specific cases
by those whose rights may have been violated by the IPRA. Justice Vitug also filed a separate
opinion expressing the view that Sections 3(a), 7, and 57 of R.A. 8371 are unconstitutional.
Justices Melo, Pardo, Buena, Gonzaga-Reyes, and De Leon join in the separate opinions of
Justices Panganiban and Vitug.

As the votes were equally divided (7 to 7) and the necessary majority was not obtained, the
case was redeliberated upon. However, after redeliberation, the voting remained the same.
Accordingly, pursuant to Rule 56, Section 7 of the Rules of Civil Procedure, the petition
is DISMISSED.

Attached hereto and made integral parts thereof are the separate opinions of Justices Puno,
Vitug, Kapunan, Mendoza, and Panganiban.

SO ORDERED.

2. Sec. of DENR v. Yap

G.R. No. 167707, October 8, 2008

DECISION

REYES, R.T., J.:

AT stake in these consolidated cases is the right of the present occupants

of Boracay Island to secure titles over their occupied lands.

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 There are two consolidated petitions. The first is G.R. No. 167707, a petition for review
on certiorari of the Decision[1] of the Court of Appeals (CA) affirming that[2] of the Regional Trial
Court (RTC) in Kalibo, Aklan, which granted the petition for declaratory relief filed by
respondents-claimants Mayor Jose Yap, et al. and ordered the survey of Boracay for titling
purposes. The second is G.R. No. 173775, a petition for prohibition, mandamus, and
nullification of Proclamation No. 1064[3] issued by President Gloria Macapagal-Arroyo classifying
Boracay into reserved forest and agricultural land.

The Antecedents

G.R. No. 167707

Boracay Island in the Municipality of Malay, Aklan, with its powdery white sand beaches
and warm crystalline waters, is reputedly a premier Philippine tourist destination.The island is
also home to 12,003 inhabitants[4] who live in the bone-shaped islands three barangays.[5]

On April 14, 1976, the Department of Environment and Natural Resources (DENR)
approved the National Reservation Survey of Boracay Island,[6] which identified several lots as
being occupied or claimed by named persons.[7]

On November 10, 1978, then President Ferdinand Marcos issued Proclamation

No. 1801[8] declaring Boracay Island, among other islands, caves and peninsulas in
the Philippines, as tourist zones and marine reserves under the administration of the
Philippine Tourism Authority (PTA). President Marcos later approved the issuance
of PTA Circular 3-82[9] dated September 3, 1982, to implement Proclamation No. 1801.

Claiming that Proclamation No. 1801 and PTA Circular No 3-82 precluded them from
filing an application for judicial confirmation of imperfect title or survey of land for titling
purposes, respondents-claimants
Mayor Jose S. Yap, Jr., Libertad Talapian, Mila Y. Sumndad, and Aniceto Yap filed a petition for
declaratory relief with the RTC in Kalibo, Aklan.

In their petition, respondents-claimants alleged that Proclamation No. 1801

and PTA Circular No. 3-82 raised doubts on their right to secure titles over their occupied
lands. They declared that they themselves, or through their predecessors-in-interest, had
been in open, continuous, exclusive, and notorious possession and occupation in
Boracay since June 12, 1945, or earlier since time immemorial. They declared their lands
for tax purposes and paid realty taxes on them.[10]

Respondents-claimants posited that Proclamation No. 1801 and its implementing

Circular did not place Boracay beyond the commerce of man. Since the Island was classified as
a tourist zone, it was susceptible of private ownership. Under Section 48(b) of Commonwealth
Act (CA) No. 141, otherwise known as the Public Land Act, they had the right to have the lots
registered in their names through judicial confirmation of imperfect titles.

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 The Republic, through the Office of the Solicitor General (OSG), opposed the petition for
declaratory relief. The OSG countered that Boracay Island was an unclassified land of the
public domain. It formed part of the mass of lands classified as public forest, which was
not available for disposition pursuant to Section 3(a) of Presidential Decree (PD) No. 705
or the Revised Forestry Code,[11] as amended.

The OSG maintained that respondents-claimants reliance on PD No. 1801

and PTA Circular No. 3-82 was misplaced. Their right to judicial confirmation of title was
governed by CA No. 141 and PD No. 705. Since Boracay Island had not been classified as
alienable and disposable, whatever possession they had cannot ripen into ownership.

During pre-trial, respondents-claimants and the OSG stipulated on the following

facts: (1) respondents-claimants were presently in possession of parcels of land in Boracay
Island; (2) these parcels of land were planted with coconut trees and other natural growing
trees; (3) the coconut trees had heights of more or less twenty (20) meters and were planted
more or less fifty (50) years ago; and (4) respondents-claimants declared the land they were
occupying for tax purposes.[12]

The parties also agreed that the principal issue for resolution was purely legal: whether
Proclamation No. 1801 posed any legal hindrance or impediment to the titling of the
lands in Boracay. They decided to forego with the trial and to submit the case for
resolution upon submission of their respective memoranda.[13]

The RTC took judicial notice[14] that certain parcels of land in Boracay Island, more
particularly Lots 1 and 30, Plan PSU-5344, were covered by Original Certificate of Title No.
19502 (RO 2222) in the name of the Heirs of Ciriaco S. Tirol. These lots were involved in Civil
Case Nos. 5222 and 5262 filed before the RTC of Kalibo, Aklan.[15]The titles were issued on
August 7, 1933.[16]

RTC and CA Dispositions

On July 14, 1999, the RTC rendered a decision in favor of respondents-claimants, with
a fallo reading:

WHEREFORE, in view of the foregoing, the Court declares that

Proclamation No. 1801 and PTA Circular No. 3-82 pose no legal obstacle to the
petitioners and those similarly situated to acquire title to their lands in Boracay, in
accordance with the applicable laws and in the manner prescribed therein; and to
have their lands surveyed and approved by respondent Regional Technical
Director of Lands as the approved survey does not in itself constitute a title to the
land.

SO ORDERED.[17]

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 The RTC upheld respondents-claimants right to have their occupied lands titled in
their name. It ruled that neither Proclamation No. 1801 nor PTA Circular No. 3-82
mentioned that lands in Boracay were inalienable or could not be the subject of
disposition.[18] The Circular itself recognized private ownership of lands.[19] The trial court
cited Sections 87[20] and 53[21] of the Public Land Act as basis for acknowledging private
ownership of lands in Boracay and that only those forested areas in public lands were declared
as part of the forest reserve.[22]

The OSG moved for reconsideration but its motion was denied.[23] The Republic then
appealed to the CA.

On December 9, 2004, the appellate court affirmed in toto the RTC decision, disposing
as follows:

WHEREFORE, in view of the foregoing premises, judgment is hereby

rendered by us DENYING the appeal filed in this case and AFFIRMING the
decision of the lower court.[24]

The CA held that respondents-claimants could not be prejudiced by a declaration

that the lands they occupied since time immemorial were part of a forest reserve.

Again, the OSG sought reconsideration but it was similarly denied.[25] Hence, the present
petition under Rule 45.

G.R. No. 173775

On May 22, 2006, during the pendency of G.R. No. 167707, President Gloria Macapagal-Arroyo
issued Proclamation No. 1064[26] classifying Boracay Island into four hundred (400) hectares of
reserved forest land (protection purposes) and six hundred twenty-eight and 96/100 (628.96)
hectares of agricultural land (alienable and disposable). The Proclamation likewise provided for
a fifteen-meter buffer zone on each side of the centerline of roads and trails, reserved for right-
of-way and which shall form part of the area reserved for forest land protection purposes.

On August 10, 2006, petitioners-claimants Dr. Orlando Sacay,[27] Wilfredo Gelito,[28] and
other landowners[29] in Boracay filed with this Court an original petition for prohibition,
mandamus, and nullification of Proclamation No. 1064.[30] They allege that the Proclamation
infringed on their prior vested rights over portions of Boracay. They have been in
continued possession of their respective lots in Boracay since time immemorial. They
have also invested billions of pesos in developing their lands and building internationally
renowned first class resorts on their lots.[31]

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 Petitioners-claimants contended that there is no need for a proclamation reclassifying
Boracay into agricultural land. Being classified as neither mineral nor timber land, the
island is deemed agricultural pursuant to the Philippine Bill of 1902 and Act No.
926, known as the first Public Land Act.[32] Thus, their possession in the concept of
owner for the required period entitled them to judicial confirmation of imperfect title.

Opposing the petition, the OSG argued that petitioners-claimants do not have a vested
right over their occupied portions in the island. Boracay is an unclassified public forest land
pursuant to Section 3(a) of PD No. 705. Being public forest, the claimed portions of the island
are inalienable and cannot be the subject of judicial confirmation of imperfect title. It is only the
executive department, not the courts, which has authority to reclassify lands of the public
domain into alienable and disposable lands. There is a need for a positive government act in
order to release the lots for disposition.

On November 21, 2006, this Court ordered the consolidation of the two petitions as they
principally involve the same issues on the land classification of Boracay Island.[33]

Issues

G.R. No. 167707

The OSG raises the lone issue of whether Proclamation No. 1801 and PTA Circular
No. 3-82 pose any legal obstacle for respondents, and all those similarly situated, to
acquire title to their occupied lands in Boracay Island.[34]

G.R. No. 173775

Petitioners-claimants hoist five (5) issues, namely:

I.
AT THE TIME OF THE ESTABLISHED POSSESSION OF PETITIONERS IN
CONCEPT OF OWNER OVER THEIR RESPECTIVE AREAS IN BORACAY,
SINCE TIME IMMEMORIAL OR AT THE LATEST SINCE 30 YRS. PRIOR TO
THE FILING OF THE PETITION FOR DECLARATORY RELIEF ON NOV. 19,
1997, WERE THE AREAS OCCUPIED BY THEM PUBLIC AGRICULTURAL
LANDS AS DEFINED BY LAWS THEN ON JUDICIAL CONFIRMATION OF
IMPERFECT TITLES OR PUBLIC FOREST AS DEFINED BY SEC. 3a, PD 705?

II.
HAVE PETITIONERS OCCUPANTS ACQUIRED PRIOR VESTED RIGHT OF
PRIVATE OWNERSHIP OVER THEIR OCCUPIED PORTIONS

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 OF BORACAY LAND, DESPITE THE FACT THAT THEY HAVE NOT APPLIED
YET FOR JUDICIAL CONFIRMATION OF IMPERFECT TITLE?

III.
IS THE EXECUTIVE DECLARATION OF THEIR AREAS AS
ALIENABLE AND DISPOSABLE UNDER SEC 6, CA 141 [AN]
INDISPENSABLE PRE-REQUISITE FOR PETITIONERS TO OBTAIN
TITLE UNDER THE TORRENS SYSTEM?

IV.
IS THE ISSUANCE OF PROCLAMATION 1064 ON MAY 22, 2006, VIOLATIVE
OF THE PRIOR VESTED RIGHTS TO PRIVATE OWNERSHIP OF
PETITIONERS OVER THEIR LANDS IN BORACAY, PROTECTED BY THE
DUE PROCESS CLAUSE OF THE CONSTITUTION OR IS PROCLAMATION
1064 CONTRARY TO SEC. 8, CA 141, OR SEC. 4(a) OF RA 6657.

V.
CAN RESPONDENTS BE COMPELLED BY MANDAMUS TO ALLOW THE
SURVEY AND TO APPROVE THE SURVEY PLANS FOR PURPOSES OF THE
APPLICATION FOR TITLING OF THE LANDS OF PETITIONERS IN
BORACAY?[35] (Underscoring supplied)

In capsule, the main issue is whether private claimants (respondents-claimants in

G.R. No. 167707 and petitioners-claimants in G.R. No. 173775) have a right to secure titles
over their occupied portions in Boracay. The twin petitions pertain to their right, if any, to
judicial confirmation of imperfect title under CA No. 141, as amended. They do not
involve their right to secure title under other pertinent laws.

Our Ruling

Regalian Doctrine and power of the executive

to reclassify lands of the public domain

Private claimants rely on three (3) laws and executive acts in their bid for judicial
confirmation of imperfect title, namely: (a) Philippine Bill of 1902[36] in relation to Act No. 926,
later amended and/or superseded by Act No. 2874 and CA No. 141;[37] (b) Proclamation No.
1801[38] issued by then President Marcos; and (c) Proclamation No. 1064[39] issued by President
Gloria Macapagal-Arroyo. We shall proceed to determine their rights to apply for judicial
confirmation of imperfect title under these laws and executive acts.

But first, a peek at the Regalian principle and the power of the executive to reclassify
lands of the public domain.

Page 10 of 62
 The 1935 Constitution classified lands of the public domain into agricultural,
forest or timber.[40] Meanwhile, the 1973 Constitution provided the following divisions:
agricultural, industrial or commercial, residential, resettlement, mineral, timber or forest
and grazing lands, and such other classes as may be provided by law,[41] giving the
government great leeway for classification.[42] Then the 1987 Constitution reverted to the
1935 Constitution classification with one addition: national parks.[43] Of these, only
agricultural lands may be alienated.[44] Prior to Proclamation No. 1064 of May 22,
2006, Boracay Island had never been expressly and administratively classified under any of
these grand divisions. Boracay was an unclassified land of the public domain.

The Regalian Doctrine dictates that all lands of the public domain belong to the
State, that the State is the source of any asserted right to ownership of land and charged
with the conservation of such patrimony.[45] The doctrine has been consistently adopted
under the 1935, 1973, and 1987 Constitutions.[46]

All lands not otherwise appearing to be clearly within private ownership are
presumed to belong to the State.[47] Thus, all lands that have not been acquired from the
government, either by purchase or by grant, belong to the State as part of the inalienable
public domain.[48] Necessarily, it is up to the State to determine if lands of the public
domain will be disposed of for private ownership. The government, as the agent of the
state, is possessed of the plenary power as the persona in law to determine who shall be the
favored recipients of public lands, as well as under what terms they may be granted such
privilege, not excluding the placing of obstacles in the way of their exercise of what otherwise
would be ordinary acts of ownership.[49]

Our present land law traces its roots to the Regalian Doctrine. Upon the Spanish
conquest of the Philippines, ownership of all lands, territories and possessions in
the Philippines passed to the Spanish Crown.[50] The Regalian doctrine was first
introduced in the Philippines through the Laws of the Indies and the Royal Cedulas,
which laid the foundation that all lands that were not acquired from the Government,
either by purchase or by grant, belong to the public domain.[51]

The Laws of the Indies was followed by the Ley Hipotecaria or the Mortgage Law of
1893. The Spanish Mortgage Law provided for the systematic registration of titles and deeds as
well as possessory claims.[52]

The Royal Decree of 1894 or the Maura Law[53] partly amended the Spanish Mortgage
Law and the Laws of the Indies. It established possessory information as the method of
legalizing possession of vacant Crown land, under certain conditions which were set forth in
said decree.[54] Under Section 393 of the Maura Law, an informacion posesoria or possessory
information title,[55] when duly inscribed in the Registry of Property, is converted into a title of
ownership only after the lapse of twenty (20) years of uninterrupted possession which must be
actual, public, and adverse,[56] from the date of its inscription.[57] However, possessory

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information title had to be perfected one year after the promulgation of the Maura Law, or
until April 17, 1895. Otherwise, the lands would revert to the State.[58]

In sum, private ownership of land under the Spanish regime could only be
founded on royal concessions which took various forms, namely: (1) titulo real or royal
grant; (2) concesion especial or special grant; (3) composicion con el estado or
adjustment title; (4) titulo de compra or title by purchase; and (5) informacion
posesoria or possessory information title.[59]

The first law governing the disposition of public lands in the Philippines under
American rule was embodied in the Philippine Bill of 1902.[60] By this law, lands of the
public domain in the Philippine Islands were classified into three (3) grand divisions, to
wit: agricultural, mineral, and timber or forest lands.[61] The act provided for, among
others, the disposal of mineral lands by means of absolute grant (freehold system) and
by lease (leasehold system).[62] It also provided the definition by exclusion of agricultural
public lands.[63] Interpreting the meaning of agricultural lands under the Philippine Bill of 1902,
the Court declared in Mapa v. Insular Government:[64]

x x x In other words, that the phrase agricultural land as used in Act No.
926 means those public lands acquired from Spain which are not timber or
mineral lands. x x x[65](Emphasis Ours)

On February 1, 1903, the Philippine Legislature passed Act No. 496, otherwise
known as the Land Registration Act. The act established a system of registration by
which recorded title becomes absolute, indefeasible, and imprescriptible. This is known
as the Torrens system.[66]

Concurrently, on October 7, 1903, the Philippine Commission passed Act No. 926, which
was the first Public Land Act. The Act introduced the homestead system and made provisions
for judicial and administrative confirmation of imperfect titles and for the sale or lease of public
lands. It permitted corporations regardless of the nationality of persons owning the controlling
stock to lease or purchase lands of the public domain.[67] Under the Act, open, continuous,
exclusive, and notorious possession and occupation of agricultural lands for the next ten
(10) years preceding July 26, 1904 was sufficient for judicial confirmation of imperfect
title.[68]

On November 29, 1919, Act No. 926 was superseded by Act No. 2874, otherwise
known as the second Public Land Act. This new, more comprehensive law limited the
exploitation of agricultural lands to Filipinos and Americans and citizens of other countries which
gave Filipinos the same privileges. For judicial confirmation of title, possession and
occupation en concepto dueo since time immemorial, or since July 26, 1894, was
required.[69]

Page 12 of 62
 After the passage of the 1935 Constitution, CA No. 141 amended Act No. 2874
on December 1, 1936. To this day, CA No. 141, as amended, remains as the existing general
law governing the classification and disposition of lands of the public domain other than timber
and mineral lands,[70] and privately owned lands which reverted to the State.[71]

Section 48(b) of CA No. 141 retained the requirement under Act No. 2874 of possession
and occupation of lands of the public domain since time immemorial or since July 26,
1894. However, this provision was superseded by Republic Act (RA) No. 1942,[72] which
provided for a simple thirty-year prescriptive period for judicial confirmation of imperfect
title. The provision was last amended by PD No. 1073,[73] which now provides for possession
and occupation of the land applied for since June 12, 1945, or earlier.[74]

The issuance of PD No. 892[75] on February 16, 1976 discontinued the use of Spanish
titles as evidence in land registration proceedings.[76] Under the decree, all holders of Spanish
titles or grants should apply for registration of their lands under Act No. 496 within six (6)
months from the effectivity of the decree on February 16, 1976. Thereafter, the recording of
all unregistered lands[77] shall be governed by Section 194 of the Revised Administrative Code,
as amended by Act No. 3344.

On June 11, 1978, Act No. 496 was amended and updated by PD No. 1529, known as
the Property Registration Decree. It was enacted to codify the various laws relative to
registration of property.[78] It governs registration of lands under the Torrens system as well as
unregistered lands, including chattel mortgages.[79]

A positive act declaring land as alienable and disposable is required. In keeping

with the presumption of State ownership, the Court has time and again emphasized that there
must be a positive act of the government, such as an official proclamation,[80] declassifying
inalienable public land into disposable land for agricultural or other purposes.[81] In fact, Section
8 of CA No. 141 limits alienable or disposable lands only to those lands which have been
officially delimited and classified.[82]

The burden of proof in overcoming the presumption of State ownership of the lands of
the public domain is on the person applying for registration (or claiming ownership), who must
prove that the land subject of the application is alienable or disposable.[83] To overcome this
presumption, incontrovertible evidence must be established that the land subject of the
application (or claim) is alienable or disposable.[84] There must still be a positive act declaring
land of the public domain as alienable and disposable. To prove that the land subject of an
application for registration is alienable, the applicant must establish the existence of a positive
act of the government such as a presidential proclamation or an executive order; an
administrative action; investigation reports of Bureau of Lands investigators; and a legislative
act or a statute.[85] The applicant may also secure a certification from the government that the

Page 13 of 62
land claimed to have been possessed for the required number of years is alienable and
disposable.[86]

In the case at bar, no such proclamation, executive order, administrative action, report,
statute, or certification was presented to the Court. The records are bereft of evidence showing
that, prior to 2006, the portions of Boracay occupied by private claimants were subject of a
government proclamation that the land is alienable and disposable.Absent such well-nigh
incontrovertible evidence, the Court cannot accept the submission that lands occupied by
private claimants were already open to disposition before 2006. Matters of land classification or
reclassification cannot be assumed. They call for proof.[87]

Ankron and De Aldecoa did not make the whole of Boracay Island, or portions of
it, agricultural lands. Private claimants posit that Boracay was already an agricultural land
pursuant to the old cases Ankron v. Government of the Philippine Islands (1919)[88] and De
Aldecoa v. The Insular Government (1909).[89] These cases were decided under the provisions
of the Philippine Bill of 1902 and Act No. 926. There is a statement in these old cases that in the
absence of evidence to the contrary, that in each case the lands are agricultural lands until the
contrary is shown.[90]

Private claimants reliance on Ankron and De Aldecoa is misplaced. These cases did not
have the effect of converting the whole of Boracay Island or portions of it into agricultural
lands. It should be stressed that the Philippine Bill of 1902 and Act No. 926 merely provided the
manner through which land registration courts would classify lands of the public
domain. Whether the land would be classified as timber, mineral, or agricultural depended on
proof presented in each case.

Ankron and De Aldecoa were decided at a time when the President of the Philippines
had no power to classify lands of the public domain into mineral, timber, and agricultural. At that
time, the courts were free to make corresponding classifications in justiciable cases, or were
vested with implicit power to do so, depending upon the preponderance of the evidence.[91] This
was the Courts ruling in Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols
Vda. De Palanca v. Republic,[92] in which it stated, through Justice Adolfo Azcuna, viz.:

x x x Petitioners furthermore insist that a particular land need not be

formally released by an act of the Executive before it can be deemed open to
private ownership, citing the cases of Ramos v. Director of Lands and Ankron v.
Government of the Philippine Islands.

xxxx

Petitioners reliance upon Ramos v. Director of Lands and Ankron v.

Government is misplaced. These cases were decided under the Philippine Bill of
1902 and the first Public Land Act No. 926 enacted by the Philippine Commission
on October 7, 1926, under which there was no legal provision vesting in the Chief

Page 14 of 62
 Executive or President of the Philippines the power to classify lands of the public
domain into mineral, timber and agricultural so that the courts then were free to
make corresponding classifications in justiciable cases, or were vested with
implicit power to do so, depending upon the preponderance of the evidence.[93]

To aid the courts in resolving land registration cases under Act No. 926, it was then
necessary to devise a presumption on land classification. Thus evolved the dictum
in Ankron that the courts have a right to presume, in the absence of evidence to the contrary,
that in each case the lands are agricultural lands until the contrary is shown.[94]

But We cannot unduly expand the presumption in Ankron and De Aldecoa to an

argument that all lands of the public domain had been automatically reclassified as disposable
and alienable agricultural lands. By no stretch of imagination did the presumption convert all
lands of the public domain into agricultural lands.

If We accept the position of private claimants, the Philippine Bill of 1902 and Act No. 926
would have automatically made all lands in the Philippines, except those already classified as
timber or mineral land, alienable and disposable lands. That would take these lands out of State
ownership and worse, would be utterly inconsistent with and totally repugnant to the long-
entrenched Regalian doctrine.

The presumption in Ankron and De Aldecoa attaches only to land registration cases
brought under the provisions of Act No. 926, or more specifically those cases dealing with
judicial and administrative confirmation of imperfect titles. The presumption applies to an
applicant for judicial or administrative conformation of imperfect title under Act No. 926. It
certainly cannot apply to landowners, such as private claimants or their predecessors-in-
interest, who failed to avail themselves of the benefits of Act No. 926. As to them, their land
remained unclassified and, by virtue of the Regalian doctrine, continued to be owned by the
State.

In any case, the assumption in Ankron and De Aldecoa was not absolute. Land
classification was, in the end, dependent on proof. If there was proof that the land was better
suited for non-agricultural uses, the courts could adjudge it as a mineral or timber land despite
the presumption. In Ankron, this Court stated:

In the case of Jocson vs. Director of Forestry (supra), the Attorney-

General admitted in effect that whether the particular land in question belongs to
one class or another is a question of fact. The mere fact that a tract of land has
trees upon it or has mineral within it is not of itself sufficient to declare that one is
forestry land and the other, mineral land. There must be some proof of the extent
and present or future value of the forestry and of the minerals. While, as we have
just said, many definitions have been given for agriculture, forestry, and mineral

Page 15 of 62
 lands, and that in each case it is a question of fact, we think it is safe to say that
in order to be forestry or mineral land the proof must show that it is more valuable
for the forestry or the mineral which it contains than it is for agricultural purposes.
(Sec. 7, Act No. 1148.) It is not sufficient to show that there exists some trees
upon the land or that it bears some mineral. Land may be classified as forestry or
mineral today, and, by reason of the exhaustion of the timber or mineral, be
classified as agricultural land tomorrow. And vice-versa, by reason of the rapid
growth of timber or the discovery of valuable minerals, lands classified as
agricultural today may be differently classified tomorrow. Each case must be
decided upon the proof in that particular case, having regard for its present
or future value for one or the other purposes. We believe, however,
considering the fact that it is a matter of public knowledge that a majority of the
lands in the Philippine Islands are agricultural lands that the courts have a right to
presume, in the absence of evidence to the contrary, that in each case the lands
are agricultural lands until the contrary is shown. Whatever the land involved in
a particular land registration case is forestry or mineral land must,
therefore, be a matter of proof. Its superior value for one purpose or the
other is a question of fact to be settled by the proof in each particular
case. The fact that the land is a manglar [mangrove swamp] is not sufficient for
the courts to decide whether it is agricultural, forestry, or mineral land. It may
perchance belong to one or the other of said classes of land. The Government, in
the first instance, under the provisions of Act No. 1148, 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. In the
latter case, whether the land is agricultural, forestry, or mineral, is a question of
proof. Until private interests have intervened, the Government, by virtue of the
terms of said Act (No. 1148), may decide for itself what portions of the public
domain shall be set aside and reserved as forestry or mineral land. (Ramos vs.
Director of Lands, 39 Phil. 175; Jocson vs. Director of
[95]
Forestry, supra) (Emphasis ours)

Since 1919, courts were no longer free to determine the classification of lands from the
facts of each case, except those that have already became private lands.[96] Act No. 2874,
promulgated in 1919 and reproduced in Section 6 of CA No. 141, gave the Executive
Department, through the President, the exclusive prerogative to classify or reclassify public
lands into alienable or disposable, mineral or forest.96-a Since then, courts no longer had the
authority, whether express or implied, to determine the classification of lands of the public
domain.[97]

Here, private claimants, unlike the Heirs of Ciriaco Tirol who were issued their title in
[98]
1933, did not present a justiciable case for determination by the land registration court of the
propertys land classification. Simply put, there was no opportunity for the courts then to resolve
if the land the Boracay occupants are now claiming were agricultural lands. When Act No. 926
was supplanted by Act No. 2874 in 1919, without an application for judicial confirmation having

Page 16 of 62
been filed by private claimants or their predecessors-in-interest, the courts were no longer
authorized to determine the propertys land classification. Hence, private claimants cannot bank
on Act No. 926.

We note that the RTC decision[99] in G.R. No. 167707 mentioned Krivenko v. Register of
Deeds of Manila,[100] which was decided in 1947 when CA No. 141, vesting the Executive with
the sole power to classify lands of the public domain was already in effect. Krivenko cited the
old cases Mapa v. Insular Government,[101] De Aldecoa v. The Insular
[102]
Government, and Ankron v. Government of the Philippine Islands.[103]

Krivenko, however, is not controlling here because it involved a totally different issue.
The pertinent issue in Krivenko was whether residential lots were included in the general
classification of agricultural lands; and if so, whether an alien could acquire a residential lot. This
Court ruled that as an alien, Krivenko was prohibited by the 1935 Constitution[104] from acquiring
agricultural land, which included residential lots. Here, the issue is whether unclassified lands of
the public domain are automatically deemed agricultural.

Notably, the definition of agricultural public lands mentioned in Krivenko relied on the old
cases decided prior to the enactment of Act No. 2874, including Ankron and De Aldecoa.[105] As
We have already stated, those cases cannot apply here, since they were decided when the
Executive did not have the authority to classify lands as agricultural, timber, or mineral.

Private claimants continued possession under Act No. 926 does not create a
presumption that the land is alienable. Private claimants also contend that their continued
possession of portions of Boracay Island for the requisite period of ten (10) years under Act No.
926[106] ipso facto converted the island into private ownership. Hence, they may apply for a title
in their name.

A similar argument was squarely rejected by the Court in Collado v. Court of

Appeals.[107] Collado, citing the separate opinion of now Chief Justice Reynato S. Puno in Cruz
v. Secretary of Environment and Natural Resources,107-a ruled:

Act No. 926, the first Public Land Act, was passed in
pursuance of the provisions of the Philippine Bill of 1902. The law
governed the disposition of lands of the public domain. It
prescribed rules and regulations for the homesteading, selling and
leasing of portions of the public domain of the Philippine Islands,
and prescribed the terms and conditions to enable persons to
perfect their titles to public lands in the Islands. It also provided for
the issuance of patents to certain native settlers upon public
lands, for the establishment of town sites and sale of lots therein,
for the completion of imperfect titles, and for the cancellation or
confirmation of Spanish concessions and grants in the Islands. In

Page 17 of 62
 short, the Public Land Act operated on the assumption that title to
public lands in the Philippine Islands remained in the government;
and that the governments title to public land sprung from the
Treaty of Paris and other subsequent treaties between Spain and
the United States. The term public land referred to all lands of the
public domain whose title still remained in the government and are
thrown open to private appropriation and settlement, and excluded
the patrimonial property of the government and the friar lands.

Thus, it is plain error for petitioners to argue that under the Philippine Bill
of 1902 and Public Land Act No. 926, mere possession by private
individuals of lands creates the legal presumption that the lands are
alienable and disposable.[108] (Emphasis Ours)

Except for lands already covered by existing titles, Boracay was an unclassified
land of the public domain prior to Proclamation No. 1064. Such unclassified lands are
considered public forest under PD No. 705. The DENR[109] and the National Mapping and
Resource Information Authority[110] certify that Boracay Island is an unclassified land of the
public domain.

PD No. 705 issued by President Marcos categorized all unclassified lands of the public
domain as public forest. Section 3(a) of PD No. 705 defines a public forest as a mass of lands of
the public domain which has not been the subject of the present system of classification for the
determination of which lands are needed for forest purpose and which are not. Applying PD No.
705, all unclassified lands, including those in Boracay Island, are ipso facto considered public
forests. PD No. 705, however, respects titles already existing prior to its effectivity.

The Court notes that the classification of Boracay as a forest land under PD No. 705
may seem to be out of touch with the present realities in the island. Boracay, no doubt, has
been partly stripped of its forest cover to pave the way for commercial developments. As a
premier tourist destination for local and foreign tourists, Boracay appears more of a commercial
island resort, rather than a forest land.

Nevertheless, that the occupants of Boracay have built multi-million peso beach resorts
on the island;[111] that the island has already been stripped of its forest cover; or that the
implementation of Proclamation No. 1064 will destroy the islands tourism industry,
do not negate its character as public forest.

Forests, in the context of both the Public Land Act and the Constitution[112] classifying
lands of the public domain into agricultural, forest or timber, mineral lands, and national
parks, do not necessarily refer to large tracts of wooded land or expanses covered by dense
growths of trees and underbrushes.[113] The discussion in Heirs of Amunategui v. Director of
Forestry[114] is particularly instructive:

Page 18 of 62
 A forested area classified as forest land of the public domain does not
lose such classification simply because loggers or settlers may have stripped it of
its forest cover. Parcels of land classified as forest land may actually be covered
with grass or planted to crops by kaingin cultivators or other
farmers. Forest lands do not have to be on mountains or in out of the way
places. Swampy areas covered by mangrove trees, nipa palms, and other trees
growing in brackish or sea water may also be classified as forest land. The
classification is descriptive of its legal nature or status and does not have
to be descriptive of what the land actually looks like. Unless and until the
land classified as forest is released in an official proclamation to that effect so
that it may form part of the disposable agricultural lands of the public domain, the
rules on confirmation of imperfect title do not apply.[115] (Emphasis supplied)

There is a big difference between forest as defined in a dictionary and forest or timber land as a
classification of lands of the public domain as appearing in our statutes. One is descriptive of
what appears on the land while the other is a legal status, a classification for legal
purposes.[116] At any rate, the Court is tasked to determine the legal status of Boracay Island,
and not look into its physical layout. Hence, even if its forest cover has been replaced by beach
resorts, restaurants and other commercial establishments, it has not been automatically
converted from public forest to alienable agricultural land.

Private claimants cannot rely on Proclamation No. 1801 as basis for judicial
confirmation of imperfect title. The proclamation did not convert Boracay into an
agricultural land. However, private claimants argue that Proclamation No. 1801 issued by then
President Marcos in 1978 entitles them to judicial confirmation of imperfect title. The
Proclamation classified Boracay, among other islands, as a tourist zone. Private claimants
assert that, as a tourist spot, the island is susceptible of private ownership.

Proclamation No. 1801 or PTA Circular No. 3-82 did not convert the whole of Boracay
into an agricultural land. There is nothing in the law or the Circular which
made Boracay Island an agricultural land. The reference in Circular No. 3-82 to private
lands[117] and areas declared as alienable and disposable[118] does not by itself classify the entire
island as agricultural. Notably, Circular No. 3-82 makes reference not only to private lands and
areas but also to public forested lands. Rule VIII, Section 3 provides:

No trees in forested private lands may be cut without prior authority from
the PTA. All forested areas in public lands are declared forest
reserves. (Emphasis supplied)

Clearly, the reference in the Circular to both private and public lands merely recognizes
that the island can be classified by the Executive department pursuant to its powers under CA
No. 141. In fact, Section 5 of the Circular recognizes the then Bureau of Forest Developments
authority to declare areas in the island as alienable and disposable when it provides:

Page 19 of 62
 Subsistence farming, in areas declared as alienable and disposable by
the Bureau of Forest Development.

Therefore, Proclamation No. 1801 cannot be deemed the positive act needed to
classify Boracay Island as alienable and disposable land. If President Marcos intended to
classify the island as alienable and disposable or forest, or both, he would have identified the
specific limits of each, as President Arroyo did in Proclamation No. 1064. This was not done in
Proclamation No. 1801.

The Whereas clauses of Proclamation No. 1801 also explain the rationale behind the
declaration of Boracay Island, together with other islands, caves and peninsulas in the
Philippines, as a tourist zone and marine reserve to be administered by the PTA to ensure the
concentrated efforts of the public and private sectors in the development of the areas tourism
potential with due regard for ecological balance in the marine environment. Simply put, the
proclamation is aimed at administering the islands for tourism and ecological purposes. It
does not address the areas alienability.[119]

More importantly, Proclamation No. 1801 covers not only Boracay Island, but sixty-four
(64) other islands, coves, and peninsulas in the Philippines, such as Fortune and Verde Islands
in Batangas, Port Galera in Oriental Mindoro, Panglao and Balicasag Islands in Bohol, Coron
Island, Puerto Princesa and surrounding areas in Palawan, Camiguin Island in Cagayan de Oro,
and Misamis Oriental, to name a few. If the designation of Boracay Island as tourist zone makes
it alienable and disposable by virtue of Proclamation No. 1801, all the other areas mentioned
would likewise be declared wide open for private disposition. That could not have been, and is
clearly beyond, the intent of the proclamation.

It was Proclamation No. 1064 of 2006 which positively declared part of Boracay as
alienable and opened the same to private ownership. Sections 6 and 7 of CA No.
141[120] provide that it is only the President, upon the recommendation of the proper department
head, who has the authority to classify the lands of the public domain into alienable or
disposable, timber and mineral lands.[121]

In issuing Proclamation No. 1064, President Gloria Macapagal-Arroyo merely exercised

the authority granted to her to classify lands of the public domain, presumably subject to existing
vested rights. Classification of public lands is the exclusive prerogative of the Executive
Department, through the Office of the President. Courts have no authority to do so.[122] Absent
such classification, the land remains unclassified until released and rendered open to
disposition.[123]

Proclamation No. 1064 classifies Boracay into 400 hectares of reserved forest land and
628.96 hectares of agricultural land. The Proclamation likewise provides for a 15-meter buffer
zone on each side of the center line of roads and trails, which are reserved for right of way and
which shall form part of the area reserved for forest land protection purposes.

Page 20 of 62
 Contrary to private claimants argument, there was nothing invalid or irregular, much less
unconstitutional, about the classification of Boracay Island made by the President through
Proclamation No. 1064. It was within her authority to make such classification, subject to
existing vested rights.

Proclamation No. 1064 does not violate the Comprehensive Agrarian Reform
Law. Private claimants further assert that Proclamation No. 1064 violates the provision of the
Comprehensive Agrarian Reform Law (CARL) or RA No. 6657 barring conversion of public
forests into agricultural lands. They claim that since Boracay is a public forest under PD No.
705, President Arroyo can no longer convert it into an agricultural land without running afoul of
Section 4(a) of RA No. 6657, thus:

SEC. 4. Scope. The Comprehensive Agrarian Reform Law of 1988 shall

cover, regardless of tenurial arrangement and commodity produced, all public
and private agricultural lands as provided in Proclamation No. 131 and Executive
Order No. 229, including other lands of the public domain suitable for agriculture.

More specifically, the following lands are covered by the Comprehensive

Agrarian Reform Program:

(a) All alienable and disposable lands of the public domain

devoted to or suitable for agriculture. No reclassification of
forest or mineral lands to agricultural lands shall be
undertaken after the approval of this Act until Congress,
taking into account ecological, developmental and equity
considerations, shall have determined by law, the specific
limits of the public domain.

That Boracay Island was classified as a public forest under PD No. 705 did not bar the
Executive from later converting it into agricultural land. Boracay Island still remained an
unclassified land of the public domain despite PD No. 705.

In Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols v.

Republic,[124] the Court stated that unclassified lands are public forests.

While it is true that the land classification map does not

categorically state that the islands are public forests, the fact that they
were unclassified lands leads to the same result.In the absence of the
classification as mineral or timber land, the land remains unclassified land until
released and rendered open to disposition.[125] (Emphasis supplied)

Moreover, the prohibition under the CARL applies only to a reclassification of land. If the
land had never been previously classified, as in the case of Boracay, there can be no prohibited

Page 21 of 62
reclassification under the agrarian law. We agree with the opinion of the Department of
Justice[126] on this point:

Indeed, the key word to the correct application of the prohibition in

Section 4(a) is the word reclassification. Where there has been no previous
classification of public forest [referring, we repeat, to the mass of the public
domain which has not been the subject of the present system of classification for
purposes of determining which are needed for forest purposes and which are not]
into permanent forest or forest reserves or some other forest uses under the
Revised Forestry Code, there can be no reclassification of forest lands to speak
of within the meaning of Section 4(a).

Thus, obviously, the prohibition in Section 4(a) of the CARL against the
reclassification of forest lands to agricultural lands without a prior law delimiting
the limits of the public domain, does not, and cannot, apply to those lands of the
public domain, denominated as public forest under the Revised Forestry Code,
which have not been previously determined, or classified, as needed for forest
purposes in accordance with the provisions of the Revised Forestry Code.[127]

Private claimants are not entitled to apply for judicial confirmation of imperfect
title under CA No. 141. Neither do they have vested rights over the occupied lands under
the said law. There are two requisites for judicial confirmation of imperfect or incomplete
title under CA No. 141, namely: (1) open, continuous, exclusive, and notorious
possession and occupation of the subject land by himself or through his predecessors-
in-interest under a bona fide claim of ownership since time immemorial or from June 12,
1945; and (2) the classification of the land as alienable and disposable land of the public
domain.[128]

As discussed, the Philippine Bill of 1902, Act No. 926, and Proclamation No. 1801
did not convert portions of Boracay Island into an agricultural land. The island remained
an unclassified land of the public domain and, applying the Regalian doctrine, is
considered State property.

Private claimants bid for judicial confirmation of imperfect title, relying on the
Philippine Bill of 1902, Act No. 926, and Proclamation No. 1801, must fail because of the
absence of the second element of alienable and disposable land. Their entitlement to a
government grant under our present Public Land Act presupposes that the land
possessed and applied for is already alienable and disposable. This is clear from the
wording of the law itself.[129] Where the land is not alienable and disposable, possession
of the land, no matter how long, cannot confer ownership or possessory rights.[130]

Neither may private claimants apply for judicial confirmation of imperfect title
under Proclamation No. 1064, with respect to those lands which were classified as

Page 22 of 62
agricultural lands. Private claimants failed to prove the first element of open, continuous,
exclusive, and notorious possession of their lands in Boracay since June 12, 1945.

We cannot sustain the CA and RTC conclusion in the petition for declaratory relief that
private claimants complied with the requisite period of possession.

The tax declarations in the name of private claimants are insufficient to prove the first
element of possession. We note that the earliest of the tax declarations in the name of private
claimants were issued in 1993. Being of recent dates, the tax declarations are not sufficient to
convince this Court that the period of possession and occupation commenced on June 12,
1945.

Private claimants insist that they have a vested right in Boracay, having been in
possession of the island for a long time. They have invested millions of pesos in developing the
island into a tourist spot. They say their continued possession and investments give them a
vested right which cannot be unilaterally rescinded by Proclamation No. 1064.

The continued possession and considerable investment of private claimants do

not automatically give them a vested right in Boracay. Nor do these give them a right to
apply for a title to the land they are presently occupying. This Court is constitutionally
bound to decide cases based on the evidence presented and the laws applicable. As the
law and jurisprudence stand, private claimants are ineligible to apply for a judicial
confirmation of title over their occupied portions in Boracay even with their continued
possession and considerable investment in the island.

One Last Note

The Court is aware that millions of pesos have been invested for the development
of Boracay Island, making it a by-word in the local and international tourism industry. The Court
also notes that for a number of years, thousands of people have called the island their
home. While the Court commiserates with private claimants plight, We are bound to apply the
law strictly and judiciously. This is the law and it should prevail. Ito ang batas at ito ang dapat
umiral.

All is not lost, however, for private claimants. While they may not be eligible to apply for
judicial confirmation of imperfect title under Section 48(b) of CA No. 141, as amended, this does
not denote their automatic ouster from the residential, commercial, and other areas they
possess now classified as agricultural. Neither will this mean the loss of their substantial
investments on their occupied alienable lands. Lack of title does not necessarily mean lack of
right to possess.

For one thing, those with lawful possession may claim good faith as builders of
improvements. They can take steps to preserve or protect their possession. For another, they

Page 23 of 62
may look into other modes of applying for original registration of title, such as by
homestead[131] or sales patent,[132] subject to the conditions imposed by law.

More realistically, Congress may enact a law to entitle private claimants to acquire title to
their occupied lots or to exempt them from certain requirements under the present land
laws. There is one such bill[133] now pending in the House of Representatives. Whether that bill
or a similar bill will become a law is for Congress to decide.

In issuing Proclamation No. 1064, the government has taken the step necessary to open
up the island to private ownership. This gesture may not be sufficient to appease some sectors
which view the classification of the island partially into a forest reserve as absurd. That the
island is no longer overrun by trees, however, does not becloud the vision to protect its
remaining forest cover and to strike a healthy balance between progress and
ecology. Ecological conservation is as important as economic progress.

To be sure, forest lands are fundamental to our nations survival. Their promotion and
protection are not just fancy rhetoric for politicians and activists. These are needs that become
more urgent as destruction of our environment gets prevalent and difficult to control. As aptly
observed by Justice Conrado Sanchez in 1968 in Director of Forestry v. Munoz:[134]

The view this Court takes of the cases at bar is but in adherence to public
policy that should be followed with respect to forest lands. Many have written
much, and many more have spoken, and quite often, about the pressing need for
forest preservation, conservation, protection, development and reforestation. Not
without justification. For, forests constitute a vital segment of any country's
natural resources. It is of common knowledge by now that absence of the
necessary green cover on our lands produces a number of adverse or ill effects
of serious proportions. Without the trees, watersheds dry up; rivers and lakes
which they supply are emptied of their contents. The fish disappear. Denuded
areas become dust bowls. As waterfalls cease to function, so will hydroelectric
plants. With the rains, the fertile topsoil is washed away; geological erosion
results. With erosion come the dreaded floods that wreak havoc and destruction
to property crops, livestock, houses, and highways not to mention precious
human lives. Indeed, the foregoing observations should be written down in a
lumbermans decalogue.[135]

WHEREFORE, judgment is rendered as follows:

1. The petition for certiorari in G.R. No. 167707 is GRANTED and the Court of Appeals
Decision in CA-G.R. CV No. 71118 REVERSED AND SET ASIDE.

2. The petition for certiorari in G.R. No. 173775 is DISMISSED for lack of merit.

SO ORDERED.

Page 24 of 62
 3. Republic v. CA, et. al.
G.R. No. 155450, August 6, 2008
Spouse Carag Case

D E C I S IO N

CARPIO, J.:

The Case

This is a petition for review[1] of the 21 May 2001[2] and 25 September 2002[3] Resolutions of the
Court of Appeals in CA-G.R. SP No. 47965. The

21 May 2001 Resolution dismissed petitioner Republic of the Philippines (petitioner) amended
complaint for reversion, annulment of decree, cancellation and declaration of nullity of
titles. The 25 September 2002 Resolution denied petitioners motion for reconsideration.

The Facts

On 2 June 1930, the then Court of First Instance of Cagayan (trial court) issued Decree No.
381928[4] in favor of spouses Antonio Carag and Victoria Turingan (spouses Carag),
predecessors-in-interest of private respondents Heirs of Antonio Carag and
Victoria Turingan (private respondents), covering a parcel of land identified as Lot No. 2472,
Cad. 151, containing an area of 7,047,673 square meters (subject property), situated
in Tuguegarao, Cagayan. On 19 July 1938, pursuant to said Decree, the Register of Deeds
of Cagayan issued Original Certificate of Title No. 11585[5] (OCT No. 11585) in the name
of spouses Carag.

On 2 July 1952, OCT No. 11585 was cancelled to discharge the encumbrance expressly
stated in Decree No. 381928. Two transfer certificates of title were issued: Transfer
Certificate of Title No. T-1277,[6] issued in the name of the Province of Cagayan,
covering Lot 2472-B consisting of 100,000 square meters and Transfer Certificate of Title No. T-
1278,[7] issued in the name of the private respondents, covering Lot 2472-A consisting of
6,997,921 square meters.

Page 25 of 62
On 19 May 1994, Bienvenida Taguiam Vda. De Dayag and others filed with the Regional Office
No. 2 of the Department of Environment and Natural Resources
(DENR), Tuguegarao, Cagayan, a letter-petition requesting the DENR to initiate the filing of
an action for the annulment of Decree No. 381928 on the ground that the trial court did
not have jurisdiction to adjudicate a portion of the subject property which was allegedly
still classified as timber land at the time of the issuance of Decree No. 381928.

The Regional Executive Director of the DENR created an investigating team to conduct ground
verification and ocular inspection of the subject property.

The investigating team reported that:

A) The portion of Lot 2472 Cad-151 as shown in the Plan prepared for
spouses Carag, and covered under LC Project 3-L of Tuguegarao, Cagayan,
was found to be still within the timberland area at the time of the issuance
of the Decree and O.C.T. of the spouses Antonio Carag and
Victoria Turingan, and the same was only released as alienable and
disposable on February 22, 1982, as certified by USEC Jose G. Solis of the
NAMRIA on 27 May 1994.

B) Petitioner Bienvenida Taguiam Vda. De Dayag and others have

possessed and occupied by themselves and thru their predecessors-in-
interest the portion of Lot 2472 Cad-151, covered by LC Project 3-L of LC
Map 2999, since time immemorial.[8]

Thus, the investigating team claimed that a portion of Lot 2472 Cad-151 was only released
as alienable and disposable on 22 February 1982.

In a Memorandum dated 9 September 1996, the Legal Division of the Land Management
Bureau recommended to the Director of Lands that an action for the cancellation of OCT
No. 11585, as well as its derivative titles, be filed with the proper court. The Director of
Lands approved the recommendation.

Page 26 of 62
On 10 June 1998, or 68 years after the issuance of Decree No. 381928, petitioner filed with
the Court of Appeals a complaint for annulment of judgment, cancellation and
declaration of nullity of titles[9] on the ground that in 1930 the trial court had no
jurisdiction to adjudicate a portion of the subject property, which portion consists of
2,640,000 square meters (disputed portion). The disputed portion was allegedly still classified
as timber land at the time of issuance of Decree No. 381928 and, therefore, was not alienable
and disposable until 22 February 1982 when the disputed portion was classified as alienable
and disposable.

On 19 October 1998, private respondents filed a motion to dismiss. [10] Private respondents
alleged that petitioner failed to comply with Rule 47 of the Rules of Court because the real
ground for the complaint was mistake, not lack of jurisdiction, and that petitioner, as a party in
the original proceedings, could have availed of the ordinary remedies of new trial, appeal,
petition for relief or other appropriate remedies but failed to do so. Private respondents added
that petitioner did not attach to the complaint a certified true copy of the decision sought to be
annulled. Private respondents also maintained that the complaint was barred by the doctrines
of res judicata and law of the case and by Section 38 of Act No. 496.[11] Private respondents
also stated that not all the heirs of spouses Carag were brought before the Court of Appeals for
an effective resolution of the case. Finally, private respondents claimed that the real party in
interest was not petitioner but a certain Alfonso Bassig, who had an ax to grind against private
respondents.[12]

On 3 March 1999, petitioner filed an amended complaint for reversion, annulment of decree,
cancellation and declaration of nullity of titles.[13]

The Ruling of the Court of Appeals

On 21 May 2001, the Court of Appeals dismissed the complaint because of lack of
jurisdiction over the subject matter of the case. The Court of Appeals declared:

The rule is clear that such judgments, final orders and resolutions in civil actions
which this court may annul are those which the ordinary remedies of new trial,
appeal, petition for relief or other appropriate remedies are no longer
available. The Amended Complaint contains no such allegations which are
jurisdictional neither can such circumstances be divined from its allegations.
Furthermore, such actions for Annulment may be based only on two (2) grounds:

Page 27 of 62
 extrinsic fraud and lack of jurisdiction. Neither ground is alleged in the Amended
Complaint which is for Reversion/Annulment of Decree, Cancellation and
Declaration of Nullity of Titles. It merely alleges that around 2,640,000 square
meters of timberland area within Lot 2472 Cad. 151, had been erroneously
included in the title of the Spouses Antonio Carag and Victoria Turingan under
Decree No. 381928 and O.C.T. No. 11585 issued on June 2, 1930 and July 19,
1938, respectively; that hence, such adjudication and/or Decree and Title
covering a timberland area is null and void ab initio under the provisions of the
1935, 1973 and 1987 Constitutions.

Finally, it is clear that the issues raised in the Amended Complaint as well as
those in the Motion to dismiss are factual in nature and should be threshed out in
the proper trial court in accordance with Section 101 of the Public Land
Act.[14] (Citations omitted)

Petitioner filed a motion for reconsideration. In its 25 September 2002 Resolution, the Court of
Appeals denied the motion for reconsideration.

Hence, this petition.

The Issues

Petitioner raises the following issues:

1. Whether the allegations of the complaint clearly stated that the ordinary
remedies of new trial, appeal, petition for relief and other appropriate remedies
are no longer available;

2. Whether the amended complaint clearly alleged the ground of lack of

jurisdiction;

3. Whether the Court of Appeals may try the factual issues raised in the
amended complaint and in the motion to dismiss;

Page 28 of 62
 4. Whether the then Court of First Instance of Cagayan had jurisdiction to
adjudicate a tract of timberland in favor of respondent spouses
Antonio Carag and Victoria Turingan;

5. Whether the fact that the Director of Lands was a party to the original
proceedings changed the nature of the land and granted jurisdiction to the then
Court of First Instance over the land;

6. Whether the doctrine of res judicata applies in this case; and

7. Whether Section 38 of Act No. 496 is applicable in this case.

The Ruling of the Court

While the Court of Appeals erred in dismissing the complaint on procedural grounds, we will still
deny the petition because the complaint for annulment of decree has no merit.

Petitioner Complied with Rule 47 of the Rules of Court

First, the Court of Appeals ruled that petitioner failed to allege either of the grounds of extrinsic
fraud or lack of jurisdiction in the complaint for annulment of decree.[15]

We find otherwise. In its complaint and amended complaint, petitioner stated:

11. In view of the fact that in 1930 or in 1938, only the Executive Branch of the
Government had the authority and power to declassify or reclassify land of the
public domain, the Court did not, therefore, have the power and authority to
adjudicate in favor of the spouses Antonio Carag and Victoria Turingan the
said tract of timberland, portion of the Lot 2472 Cad-151, at the time of the
issuance of the Decree and the Original Certificate of Title of the said
spouses; and such adjudication and/or Decree and Title issued covering the
timberland area is null and void ab initio considering the provisions of the 1935,
1973 and 1987 Philippine constitution.

xxxx

Page 29 of 62
 15. The issuance of Decree No. 381928 and O.C.T. No. 11585 in the name of
spouses Antonio Carag and Victoria Turingan, and all the derivative titles thereto
in the name of the Heirs and said spouses, specifically with respect to the
inclusion thereto of timberland area, by the then Court of First Instance (now the
Regional Trial Court), and the Register of Deeds of Cagayan is patently illegal
and erroneous for the reason that said Court and/or the Register of Deeds
of Cagayan did not have any authority or jurisdiction to decree or
adjudicate the said timberland area of Lot 2472 Cad-151, consequently, the
same are null and void ab initio, and of no force and effect
whatsoever.[16] (Emphasis supplied; citations omitted)

Petitioner clearly alleged in the complaint and amended complaint that it was seeking to annul
Decree No. 381928 on the ground of the trial courts lack of jurisdiction over the subject land,
specifically over the disputed portion, which petitioner maintained was classified as timber land
and was not alienable and disposable.

Second, the Court of Appeals also dismissed the complaint on the ground of petitioners failure
to allege that the ordinary remedies of new trial, appeal, petition for relief or other appropriate
remedies are no longer available.

In Ancheta v. Ancheta,[17] we ruled:

In a case where a petition for annulment of judgment or final order of

the RTC filed under Rule 47 of the Rules of Court is grounded on lack of
jurisdiction over the person of the defendant/respondent or over the nature or
subject of the action, the petitioner need not allege in the petition that the
ordinary remedy of new trial or reconsideration of the final order or judgment or
appeal therefrom are no longer available through no fault of her own. This is so
because a judgment rendered or final order issued by the RTC without
jurisdiction is null and void and may be assailed any time either collaterally or in
a direct action or by resisting such judgment or final order in any action or
proceeding whenever it is invoked, unless barred by laches.[18]

Since petitioners complaint is grounded on lack of jurisdiction over the subject of the action,
petitioner need not allege that the ordinary remedies of new trial, appeal, petition for relief or
other appropriate remedies are no longer available through no fault of petitioner.

Page 30 of 62
Third, the Court of Appeals ruled that the issues raised in petitioners complaint were factual in
nature and should be threshed out in the proper trial court in accordance with Section 101 of the
Public Land Act.[19]

Section 6, Rule 47 of the Rules of Court provides:

SEC. 6. Procedure. - The procedure in ordinary civil cases shall be

observed. Should a trial be necessary, the reception of evidence may be referred
to a member of the court or a judge of a Regional Trial Court.

Therefore, the Court of Appeals may try the factual issues raised in the complaint for the
complete and proper determination of the case.

However, instead of remanding the complaint to the Court of Appeals for further proceedings,
we shall decide the case on the merits.

Complaint for Annulment of Decree Has No Merit

Petitioner contends that the trial court had no jurisdiction to adjudicate to spouses Carag the
disputed portion of the subject property. Petitioner claims that the disputed portion was still
classified as timber land, and thus not alienable and disposable, when Decree No. 381928 was
issued in 1930. In effect, petitioner admits that the adjacent 4,407,673 square meters of the
subject property, outside of the disputed portion, were alienable and disposable in
1930. Petitioner argues that in 1930 or in 1938, only the Executive Branch of the Government,
not the trial courts, had the power to declassify or reclassify lands of the public domain.

Lack of jurisdiction, as a ground for annulment of judgment, refers to either lack of jurisdiction
over the person of the defending party or over the subject matter of the claim. [20]Jurisdiction over
the subject matter is conferred by law and is determined by the statute in force at the time of the
filing of the action.[21]

Page 31 of 62
Under the Spanish regime, all Crown lands were per se alienable. In Aldecoa v. Insular
Government,[22] we ruled:

From the language of the foregoing provisions of law, it is deduced that, with the
exception of those comprised within the mineral and timber zone, all lands
owned by the State or by the sovereign nation are public in character, and
per se alienable and, provided they are not destined to the use of the public in
general or reserved by the Government in accordance with law, they may be
acquired by any private or juridical person x x x[23] (Emphasis supplied)

Thus, unless specifically declared as mineral or forest zone, or reserved by the State for
some public purpose in accordance with law, all Crown lands were deemed alienable.

In this case, petitioner has not alleged that the disputed portion had been declared as mineral or
forest zone, or reserved for some public purpose in accordance with law, during the Spanish
regime or thereafter. The land classification maps[24] petitioner attached to the complaint also do
not show that in 1930 the disputed portion was part of the forest zone or reserved for some
public purpose. The certification of the National Mapping and Resources Information Authority,
dated 27 May 1994, contained no statement that the disputed portion was declared and
classified as timber land.[25]

The law prevailing when Decree No. 381928 was issued in 1930 was Act No.
2874,[26] which provides:

SECTION 6. The Governor-General, upon the recommendation of the

Secretary of Agriculture and Natural Resources, shall from time to time
classify the lands of the public domain into -

(a) Alienable or disposable

(b) Timber and

(c) Mineral lands

and may at any time and in a like manner transfer such lands from one
class to another, for the purposes of their government and disposition.

Page 32 of 62
Petitioner has not alleged that the Governor-General had declared the disputed portion of the
subject property timber or mineral land pursuant to Section 6 of Act No. 2874.

It is true that Section 8 of Act No. 2874 opens to disposition only those lands which have
been declared alienable or disposable. Section 8 provides:

SECTION 8. Only those lands shall be declared open to disposition or

concession which have been officially delimited and classified and, when
practicable, surveyed, and which have not been reserved for public or quasi-
public uses, not appropriated by the Government, nor in any manner become
private property, nor those on which a private right authorized and
recognized by this Act or any other valid law may be claimed, or which,
having been reserved or appropriated, have ceased to be so. However, the
Governor-General may, for reasons of public interest, declare lands of the public
domain open to disposition before the same have had their boundaries
established or been surveyed, or may, for the same reasons, suspend their
concession or disposition by proclamation duly published or by Act of the
Legislature. (Emphasis supplied)

However, Section 8 provides that lands which are already private lands, as well as lands
on which a private claim may be made under any law, are not covered by the
classification requirement in Section 8 for purposes of disposition. This exclusion in
Section 8 recognizes that during the Spanish regime, Crown lands were per se alienable
unless falling under timber or mineral zones, or otherwise reserved for some
public purpose in accordance with law.

Clearly, with respect to lands excluded from the classification requirement in Section
8, trial courts had jurisdiction to adjudicate these lands to private parties. Petitioner has
not alleged that the disputed portion had not become private property prior to the enactment of
Act No. 2874. Neither has petitioner alleged that the disputed portion was not land on which a
private right may be claimed under any existing law at that time.

In Republic of tshe Philippines v. Court of Appeals,[27] the Republic sought to annul the judgment
of the Court of First Instance (CFI) of Rizal, sitting as a land registration court, because when
the application for land registration was filed in 1927 the land was alleged to be unclassified
forest land. The Republic also alleged that the CFI of Rizal had no jurisdiction to determine

Page 33 of 62
whether the land applied for was forest or agricultural land since the authority to classify lands
was then vested in the Director of Lands as provided in Act Nos. 926[28] and 2874. The Court
ruled:

We are inclined to agree with the respondent that it is legally doubtful if the
authority of the Governor General to declare lands as alienable and disposable
would apply to lands that have become private property or lands that have been
impressed with a private right authorized and recognized by Act 2874 or any
valid law. By express declaration of Section 45 (b) of Act 2874 which is
quoted above, those who 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 since July 26,
1894 may file an application with the Court of First Instance of the province
where the land is located for confirmation of their claims and these
applicants shall be conclusively presumed to have performed all the
conditions essential to a government grant and shall be entitled to a
certificate of title. When the land registration court issued a decision for the
issuance of a decree which was the basis of an original certificate of title to
the land, the court had already made a determination that the land was
agricultural and that the applicant had proven that he was in open and
exclusive possession of the subject land for the prescribed number of
years. It was the land registration court which had the jurisdiction to
determine whether the land applied for was agricultural, forest or timber
taking into account the proof or evidence in each particular case. (Emphasis
supplied)

As with this case, when the trial court issued the decision for the issuance of Decree No.
381928 in 1930, the trial court had jurisdiction to determine whether the subject property,
including the disputed portion, applied for was agricultural, timber or mineral land. The trial court
determined that the land was agricultural and that spouses Carag proved that they were entitled
to the decree and a certificate of title. The government, which was a party in the original
proceedings in the trial court as required by law, did not appeal the decision of the trial court
declaring the subject land as agricultural. Since the trial court had jurisdiction over the subject
matter of the action, its decision rendered in 1930, or 78 years ago, is now final and beyond
review.

Page 34 of 62
The finality of the trial courts decision is further recognized in Section 1, Article XII of the
1935 Constitution which provides:

SECTION 1. All agricultural, timber, and mineral lands of the public domain,
waters, minerals, coal, petroleum, and other mineral oils, all forces of potential
energy, and other natural resources of the Philippines belong to the State, and
their disposition, exploitation, development, or utilization shall be limited to
citizens of the Philippines, or to corporations or associations at least sixty per
centum of the capital of which is owned by such citizens, subject to any
existing right, grant, lease, or concession at the time of the inauguration of
the Government established under this Constitution. (Emphasis supplied)

Thus, even as the 1935 Constitution declared that all agricultural, timber and mineral lands of
the public domain belong to the State, it recognized that these lands were subject to any
existing right, grant, lease or concession at the time of the inauguration of the
Government established under this Constitution.[29] When the Commonwealth Government
was established under the 1935 Constitution, spouses Carag had already an existing right to the
subject land, including the disputed portion, pursuant to Decree No. 381928 issued in 1930 by
the trial court.

WHEREFORE, we DENY the petition. We DISMISS petitioner Republic of

the Philippines complaint for reversion, annulment of decree, cancellation and declaration of
nullity of titles for lack of merit.

SO ORDERED.

Purpose and Meaning of the Torrens System of Registration

1. Legarda v. Saleeby
G.R. No. L 8936, October 2, 1915

G.R. No. L-8936 October 2, 1915

CONSUELO LEGARDA, with her husband MAURO PRIETO, plaintiffs-appellants,

vs.
N.M. SALEEBY, defendant-appellee.

Singson, Ledesma and Lim for appellants.

D.R. Williams for appellee.

Page 35 of 62
JOHNSON, J.:

From the record the following facts appear:

First. That the plaintiffs and the defendant occupy, as owners, adjoining lots in the
district of Ermita in the city of Manila.

Second. That there exists and has existed a number of years a stone wall between the
said lots. Said wall is located on the lot of the plaintiffs.

Third. That the plaintiffs, on the 2nd day of March, 1906, presented a petition in the
Court of Land Registration for the registration of their lot. After a consideration of said
petition the court, on the 25th day of October, 1906, decreed that the title of the plaintiffs
should be registered and issued to them the original certificate provided for under
the torrens system. Said registration and certificate included the wall.

Fourth. Later the predecessor of the defendant presented a petition in the Court of Land
Registration for the registration of the lot now occupied by him. On the 25th day of March,
1912, the court decreed the registration of said title and issued the original certificate
provided for under the torrens system. The description of the lot given in the petition
of the defendant also included said wall.

Fifth. Several months later (the 13th day of December, 1912) the plaintiffs discovered
that the wall which had been included in the certificate granted to them had also been
included in the certificate granted to the defendant .They immediately presented a
petition in the Court of Land Registration for an adjustment and correction of the
error committed by including said wall in the registered title of each of said parties.
The lower court however, without notice to the defendant, denied said petition upon the
theory that, during the pendency of the petition for the registration of the defendant's land,
they failed to make any objection to the registration of said lot, including the wall, in the
name of the defendant.

Sixth. That the land occupied by the wall is registered in the name of each of the owners of
the adjoining lots. The wall is not a joint wall.

Under these facts, who is the owner of the wall and the land occupied by it?

The decision of the lower court is based upon the theory that the action for the
registration of the lot of the defendant was a judicial proceeding and that the
judgment or decree was binding upon all parties who did not appear and oppose it. In
other words, by reason of the fact that the plaintiffs had not opposed the registration of that
part of the lot on which the wall was situate they had lost it, even though it had been
theretofore registered in their name. Granting that theory to be correct one, and granting
even that the wall and the land occupied by it, in fact, belonged to the defendant and his
predecessors, then the same theory should be applied to the defendant himself. Applying
that theory to him, he had already lost whatever right he had therein, by permitting the

Page 36 of 62
plaintiffs to have the same registered in their name, more than six years before. Having thus
lost hid right, may he be permitted to regain it by simply including it in a petition for
registration? The plaintiffs having secured the registration of their lot, including the wall,
were they obliged to constantly be on the alert and to watch all the proceedings in the land
court to see that someone else was not having all, or a portion of the same, registered? If
that question is to be answered in the affirmative, then the whole scheme and purpose of
the torrens system of land registration must fail. The real purpose of that system is to
quiet title to land; to put a stop forever to any question of the legality of the title,
except claims which were noted at the time of registration, in the certificate, or which
may arise subsequent thereto. That being the purpose of the law, it would seem that
once a title is registered the owner may rest secure, without the necessity of waiting
in the portals of the court, or sitting in the "mirador de su casa," to avoid the
possibility of losing his land. Of course, it cannot be denied that the proceeding for
the registration of land under the torrens system is judicial (Escueta vs. .Director of
Lands, 16 Phil. Rep., 482). It is clothed with all the forms of an action and the result is final
and binding upon all the world. It is an action in rem. (Escueta vs. Director of Lands (supra);
Grey Alba vs. De la Cruz, 17 Phil. rep., 49 Roxas vs. Enriquez, 29 Phil. Rep., 31;
Tyler vs. Judges, 175 Mass., 51 American Land Co. vs. Zeiss, 219 U.S., 47.)

While the proceeding is judicial, it involves more in its consequences than does an ordinary
action. All the world are parties, including the government. After the registration is
complete and final and there exists no fraud, there are no innocent third parties who
may claim an interest. The rights of all the world are foreclosed by the decree of
registration. The government itself assumes the burden of giving notice to all parties.
To permit persons who are parties in the registration proceeding (and they are all the world)
to again litigate the same questions, and to again cast doubt upon the validity of the
registered title, would destroy the very purpose and intent of the law. The registration,
under the torrens system, does not give the owner any better title than he had. If he
does not already have a perfect title, he cannot have it registered. Fee simple titles
only may be registered. The certificate of registration accumulates in open document
a precise and correct statement of the exact status of the fee held by its owner. The
certificate, in the absence of fraud, is the evidence of title and shows exactly the real
interest of its owner. The title once registered, with very few exceptions, should not
thereafter be impugned, altered, changed, modified, enlarged, or diminished, except
in some direct proceeding permitted by law. Otherwise all security in registered titles
would be lost. A registered title cannot be altered, modified, enlarged, or diminished
in a collateral proceeding and not even by a direct proceeding, after the lapse of the
period prescribed by law.

For the difficulty involved in the present case the Act (No. 496) providing for the registration
of titles under the torrens system affords us no remedy. There is no provision in said Act
giving the parties relief under conditions like the present. There is nothing in the Act which
indicates who should be the owner of land which has been registered in the name of two
different persons.

The rule, we think, is well settled that the decree ordering the registration of a particular
parcel of land is a bar to future litigation over the same between the same parties .In
view of the fact that all the world are parties, it must follow that future litigation over

Page 37 of 62
the title is forever barred; there can be no persons who are not parties to the action. This,
we think, is the rule, except as to rights which are noted in the certificate or which
arise subsequently, and with certain other exceptions which need not be dismissed
at present. A title once registered cannot be defeated, even by an adverse, open, and
notorious possession. Registered title under the torrens system cannot be defeated
by prescription (section 46, Act No. 496). The title, once registered, is notice to the
world. All persons must take notice. No one can plead ignorance of the registration.

The question, who is the owner of land registered in the name of two different persons, has
been presented to the courts in other jurisdictions. In some jurisdictions, where the "torrens"
system has been adopted, the difficulty has been settled by express statutory provision. In
others it has been settled by the courts. Hogg, in his excellent discussion of the "Australian
Torrens System," at page 823, says: "The general rule is that in the case of two certificates
of title, purporting to include the same land, the earlier in date prevails, whether the land
comprised in the latter certificate be wholly, or only in part, comprised in the earlier
certificate. (Oelkers vs. Merry, 2 Q.S.C.R., 193; Miller vs. Davy, 7 N.Z.R., 155;
Lloyd vs. Myfield, 7 A.L.T. (V.) 48; Stevens vs. Williams, 12 V.L. R., 152; Register of
Titles, vs. Esperance Land Co., 1 W.A.R., 118.)" Hogg adds however that, "if it can be very
clearly ascertained by the ordinary rules of construction relating to written documents, that
the inclusion of the land in the certificate of title of prior date is a mistake, the mistake may
be rectified by holding the latter of the two certificates of title to be conclusive." (See Hogg
on the "Australian torrens System," supra, and cases cited. See also the excellent work of
Niblack in his "Analysis of the Torrens System," page 99.) Niblack, in discussing the general
question, said: "Where two certificates purport to include the same land the earlier in date
prevails. ... In successive registrations, where more than one certificate is issued in respect
of a particular estate or interest in land, the person claiming under the prior certificates is
entitled to the estate or interest; and that person is deemed to hold under the prior
certificate who is the holder of, or whose claim is derived directly or indirectly from the
person who was the holder of the earliest certificate issued in respect thereof. While the
acts in this country do not expressly cover the case of the issue of two certificates for the
same land, they provide that a registered owner shall hold the title, and the effect of this
undoubtedly is that where two certificates purport to include the same registered land, the
holder of the earlier one continues to hold the title" (p. 237).

Section 38 of Act No. 496, provides that; "It (the decree of registration) shall be conclusive
upon and against all persons, including the Insular Government and all the branches
thereof, whether mentioned by name in the application, notice, or citation, or included in the
general description "To all whom it may concern." Such decree shall not be opened by
reason of the absence, infancy, or other disability of any person affected thereby, nor by
any proceeding in any court for reversing judgments or decrees; subject, however, to the
right of any person deprived of land or of any estate or interest therein by decree of
registration obtained by fraud to file in the Court of Land Registration a petition for review
within one year after entry of the decree (of registration), provided no innocent purchaser for
value has acquired an interest.

It will be noted, from said section, that the "decree of registration" shall not be opened,
for any reason, in any court, except for fraud, and not even for fraud, after the lapse of one
year. If then the decree of registration cannot be opened for any reason, except for fraud, in

Page 38 of 62
a direct proceeding for that purpose, may such decree be opened or set aside in a collateral
proceeding by including a portion of the land in a subsequent certificate or decree of
registration? We do not believe the law contemplated that a person could be deprived of his
registered title in that way.

We have in this jurisdiction a general statutory provision which governs the right of the
ownership of land when the same is registered in the ordinary registry in the name of two
persons. Article 1473 of the Civil Code provides, among other things, that when one piece
of real property had been sold to two different persons it shall belong to the person
acquiring it, who first inscribes it in the registry. This rule, of course, presupposes that each
of the vendees or purchasers has acquired title to the land. The real ownership in such a
case depends upon priority of registration. While we do not now decide that the general
provisions of the Civil Code are applicable to the Land Registration Act, even though we
see no objection thereto, yet we think, in the absence of other express provisions, they
should have a persuasive influence in adopting a rule for governing the effect of a double
registration under said Act. Adopting the rule which we believe to be more in consonance
with the purposes and the real intent of the torrens system, we are of the opinion and so
decree that in case land has been registered under the Land Registration Act in the name of
two different persons, the earlier in date shall prevail.

In reaching the above conclusion, we have not overlooked the forceful argument of the
appellee. He says, among other things; "When Prieto et al. were served with notice of the
application of Teus (the predecessor of the defendant) they became defendants in a
proceeding wherein he, Teus, was seeking to foreclose their right, and that of orders, to the
parcel of land described in his application. Through their failure to appear and contest his
right thereto, and the subsequent entry of a default judgment against them, they became
irrevocably bound by the decree adjudicating such land to Teus. They had their day in court
and can not set up their own omission as ground for impugning the validity of a judgment
duly entered by a court of competent jurisdiction. To decide otherwise would be to hold that
lands with torrens titles are above the law and beyond the jurisdiction of the courts".

As was said above, the primary and fundamental purpose of the torrens system is to
quiet title. If the holder of a certificate cannot rest secure in this registered title then
the purpose of the law is defeated. If those dealing with registered land cannot rely upon
the certificate, then nothing has been gained by the registration and the expense incurred
thereby has been in vain. If the holder may lose a strip of his registered land by the method
adopted in the present case, he may lose it all. Suppose within the six years which elapsed
after the plaintiff had secured their title, they had mortgaged or sold their right, what would
be the position or right of the mortgagee or vendee? That mistakes are bound to occur
cannot be denied, and sometimes the damage done thereby is irreparable. It is the duty of
the courts to adjust the rights of the parties under such circumstances so as to minimize
such damages, taking into consideration al of the conditions and the diligence of the
respective parties to avoid them. In the present case, the appellee was the first negligent
(granting that he was the real owner, and if he was not the real owner he can not complain)
in not opposing the registration in the name of the appellants. He was a party-defendant in
an action for the registration of the lot in question, in the name of the appellants, in 1906.
"Through his failure to appear and to oppose such registration, and the subsequent entry of
a default judgment against him, he became irrevocably bound by the decree adjudicating

Page 39 of 62
such land to the appellants. He had his day in court and should not be permitted to set up
his own omissions as the ground for impugning the validity of a judgment duly entered by a
court of competent jurisdiction." Granting that he was the owner of the land upon which the
wall is located, his failure to oppose the registration of the same in the name of the
appellants, in the absence of fraud, forever closes his mouth against impugning the validity
of that judgment. There is no more reason why the doctrine invoked by the appellee should
be applied to the appellants than to him.

We have decided, in case of double registration under the Land Registration Act, that the
owner of the earliest certificate is the owner of the land. That is the rule between original
parties. May this rule be applied to successive vendees of the owners of such certificates?
Suppose that one or the other of the parties, before the error is discovered, transfers his
original certificate to an "innocent purchaser." The general rule is that the vendee of land
has no greater right, title, or interest than his vendor; that he acquires the right which his
vendor had, only. Under that rule the vendee of the earlier certificate would be the owner as
against the vendee of the owner of the later certificate.

We find statutory provisions which, upon first reading, seem to cast some doubt upon the
rule that the vendee acquires the interest of the vendor only. Sections 38, 55, and 112 of
Act No. 496 indicate that the vendee may acquire rights and be protected against defenses
which the vendor would not. Said sections speak of available rights in favor of third parties
which are cut off by virtue of the sale of the land to an "innocent purchaser." That is to say,
persons who had had a right or interest in land wrongfully included in an original certificate
would be unable to enforce such rights against an "innocent purchaser," by virtue of the
provisions of said sections. In the present case Teus had his land, including the wall,
registered in his name. He subsequently sold the same to the appellee. Is the appellee an
"innocent purchaser," as that phrase is used in said sections? May those who have been
deprived of their land by reason of a mistake in the original certificate in favor of Teus be
deprived of their right to the same, by virtue of the sale by him to the appellee? Suppose the
appellants had sold their lot, including the wall, to an "innocent purchaser," would such
purchaser be included in the phrase "innocent purchaser," as the same is used in said
sections? Under these examples there would be two innocent purchasers of the same land,
is said sections are to be applied .Which of the two innocent purchasers, if they are both to
be regarded as innocent purchasers, should be protected under the provisions of said
sections? These questions indicate the difficulty with which we are met in giving meaning
and effect to the phrase "innocent purchaser," in said sections.

May the purchaser of land which has been included in a "second original certificate" ever be
regarded as an "innocent purchaser," as against the rights or interest of the owner of the
first original certificate, his heirs, assigns, or vendee? The first original certificate is recorded
in the public registry. It is never issued until it is recorded. The record notice to all the world.
All persons are charged with the knowledge of what it contains. All persons dealing with the
land so recorded, or any portion of it, must be charged with notice of whatever it contains.
The purchaser is charged with notice of every fact shown by the record and is presumed to
know every fact which the record discloses .This rule is so well established that it is scarcely
necessary to cite authorities in its support (Northwestern National Bank vs. Freeman, 171
U.S., 620, 629; Delvin on Real Estate, sections 710, 710 [a]).

Page 40 of 62
When a conveyance has been properly recorded such record is constructive notice of its
contents and all interests, legal and equitable, included therein. (Grandin vs. Anderson, 15
Ohio State, 286, 289; Orvis vs. Newell, 17 Conn., 97; Buchanan vs. Intentional Bank, 78 Ill.,
500; Youngs vs. Wilson, 27 N.Y., 351; McCabe vs. Grey, 20 Cal., 509;
Montefiore vs. Browne, 7 House of Lords Cases, 341.)

Under the rule of notice, it is presumed that the purchaser has examined every instrument
of record affecting the title. Such presumption is irrebutable. He is charged with notice of
every fact shown by the record and is presumed to know every fact which an examination of
the record would have disclosed. This presumption cannot be overcome by proof of
innocence or good faith. Otherwise the very purpose and object of the law requiring a
record would be destroyed. Such presumption cannot be defeated by proof of want of
knowledge of what the record contains any more than one may be permitted to show that
he was ignorant of the provisions of the law. The rule that all persons must take notice of
the facts which the public record contains is a rule of law. The rule must be absolute. Any
variation would lead to endless confusion and useless litigation.

While there is no statutory provision in force here requiring that original deeds of
conveyance of real property be recorded, yet there is a rule requiring mortgages to be
recorded. (Arts. 1875 and 606 of the Civil Code.) The record of a mortgage is indispensable
to its validity. (Art .1875.) In the face of that statute would the courts allow a mortgage to be
valid which had not been recorded, upon the plea of ignorance of the statutory provision,
when third parties were interested? May a purchaser of land, subsequent to the recorded
mortgage, plead ignorance of its existence, and by reason of such ignorance have the land
released from such lien? Could a purchaser of land, after the recorded mortgage, be
relieved from the mortgage lien by the plea that he was a bona fide purchaser? May there
be a bona fide purchaser of said land, bona fide in the sense that he had no knowledge of
the existence of the mortgage? We believe the rule that all persons must take notice of what
the public record contains in just as obligatory upon all persons as the rule that all men must
know the law; that no one can plead ignorance of the law. The fact that all men know the
law is contrary to the presumption. The conduct of men, at times, shows clearly that they do
not know the law. The rule, however, is mandatory and obligatory, notwithstanding. It would
be just as logical to allow the defense of ignorance of the existence and contents of a public
record.

In view, therefore, of the foregoing rules of law, may the purchaser of land from the owner of
the second original certificate be an "innocent purchaser," when a part or all of such land
had theretofore been registered in the name of another, not the vendor? We are of the
opinion that said sections 38, 55, and 112 should not be applied to such purchasers. We do
not believe that the phrase "innocent purchaser should be applied to such a purchaser. He
cannot be regarded as an "innocent purchaser" because of the facts contained in the record
of the first original certificate. The rule should not be applied to the purchaser of a parcel of
land the vendor of which is not the owner of the original certificate, or his successors. He, in
nonsense, can be an "innocent purchaser" of the portion of the land included in another
earlier original certificate. The rule of notice of what the record contains precludes the idea
of innocence. By reason of the prior registry there cannot be an innocent purchaser of land
included in a prior original certificate and in a name other than that of the vendor, or his
successors. In order to minimize the difficulties we think this is the safe rule to establish. We

Page 41 of 62
believe the phrase "innocent purchaser," used in said sections, should be limited only to
cases where unregistered land has been wrongfully included in a certificate under the
torrens system. When land is once brought under the torrens system, the record of the
original certificate and all subsequent transfers thereof is notice to all the world. That
being the rule, could Teus even regarded as the holder in good fifth of that part of the land
included in his certificate of the appellants? We think not. Suppose, for example, that Teus
had never had his lot registered under the torrens system. Suppose he had sold his lot to
the appellee and had included in his deed of transfer the very strip of land now in question.
Could his vendee be regarded as an "innocent purchaser" of said strip? Would his vendee
be an "innocent purchaser" of said strip? Certainly not. The record of the original certificate
of the appellants precludes the possibility. Has the appellee gained any right by reason of
the registration of the strip of land in the name of his vendor? Applying the rule of notice
resulting from the record of the title of the appellants, the question must be answered in the
negative. We are of the opinion that these rules are more in harmony with the purpose of
Act No. 496 than the rule contended for by the appellee. We believe that the purchaser from
the owner of the later certificate, and his successors, should be required to resort to his
vendor for damages, in case of a mistake like the present, rather than to molest the holder
of the first certificate who has been guilty of no negligence. The holder of the first original
certificate and his successors should be permitted to rest secure in their title, against one
who had acquired rights in conflict therewith and who had full and complete knowledge of
their rights. The purchaser of land included in the second original certificate, by reason of
the facts contained in the public record and the knowledge with which he is charged and by
reason of his negligence, should suffer the loss, if any, resulting from such purchase, rather
than he who has obtained the first certificate and who was innocent of any act of
negligence.

The foregoing decision does not solve, nor pretend to solve, all the difficulties resulting from
double registration under the torrens system and the subsequent transfer of the land.
Neither do we now attempt to decide the effect of the former registration in the ordinary
registry upon the registration under the torrens system. We are inclined to the view, without
deciding it, that the record under the torrens system, supersede all other registries. If that
view is correct then it will be sufficient, in dealing with land registered and recorded alone.
Once land is registered and recorded under the torrens system, that record alone can be
examined for the purpose of ascertaining the real status of the title to the land.

It would be seen to a just and equitable rule, when two persons have acquired equal rights
in the same thing, to hold that the one who acquired it first and who has complied with all
the requirements of the law should be protected.

In view of our conclusions, above stated, the judgment of the lower court should be and is
hereby revoked. The record is hereby returned to the court now having and exercising the
jurisdiction heretofore exercised by the land court, with direction to make such orders and
decrees in the premises as may correct the error heretofore made in including the land in
the second original certificate issued in favor of the predecessor of the appellee, as well as
in all other duplicate certificates issued.

Without any findings as to costs, it is so ordered.

Page 42 of 62
 2. Bishop v. CA
G.R. No. 86787, May 8, 1992

DECISION

CRUZ, J.:

The question presented in this case is not novel. As in previous cases resolving the same issue,
the answer will not change.

In dispute are certain portions of a parcel of land situated in Calapacuan, Subic,

Zambales, with a total area of 1,652 square meters. These portions are in the possession
of the petitioners. The entire parcel is registered in the name of the private respondents
under Transfer Certificate of Title No. T-29018.

On January 22, 1985, the private respondents sued the petitioners for recovery of
possession of the lots in question. The plaintiffs invoked their rights as registered
owners of the land. In their answer, the defendants claimed that the lots were part of the
public domain and could not have been registered under the Torrens system. All alleged
long and continuous possession of the lots and produced tax declarations in their
names. Two of them maintained that they had acquired their respective lots by virtue of
valid contracts of sale. Another based her claim on inheritance.

After trial, Judge Nicias O. Mendoza of the Regional Trial Court of Olongapo City rendered
judgment in favor of the plaintiffs. 1 He held in part as follows:

The plaintiffs, being the registered owners in fee simple of the land in question, necessarily have
the lawful right to the physical possession of the land. The owner of a land has a right to enjoy
and possess it, and he has also the right to recover and repossess the same from any per or
occupying it unlawfully.

Art. 428 New Civil Code

"The owner has the right to enjoy and dispose of a thing, without other limitations than those
established by law.

"The owner has also a right of action against the holder and possessor of the thing in order to
recover it."

There is, therefore, no doubt in law, that the plaintiffs being the registered owners of the land in
question have also the corresponding right to the recovery and possession of the same. The
defendants who are in physical occupancy of the land belonging to the plaintiffs have no right
whatsoever to unjustly withhold the possession of the said land from the plaintiffs. The
defendants occupancy of the land in question is unlawful and in violation of plaintiffs right to the
recovery and possession of the land they owned. The evidence presented by the defendants
Page 43 of 62
claiming as per certifications of the Bureau of Forestry that the land occupied by them is within
the alienable and disposable public land, deserves scant consideration as the said certification
are without basis in law. The moment the land in question was titled in the name of the plaintiffs,
it ceased to become a part of the public domain as the same became the private property of the
registered owner, the herein plaintiffs. Tax declarations of the land made in the names of the
defendants are not evidence of title, it appearing that the land is already titled to the plaintiffs.
The registration of the land in the names of the defendants with the Assessors Office for
taxation purposes and the payments of real property taxes by the defendants can not and does
not defeat the title of the plaintiffs to the land. The fact that the defendants have been in
occupancy of the land in question for quite a period of time is of no moment as prescription will
not ripen into ownership because the land is covered by a torrens title. Acquisitive prescription
will not be available to land titled under Art. 496.

PREMISED THEREFORE on the foregoing consideration, the Court finds and so holds that the
plaintiffs being the registered owners of the land in question are entitled to the possession of the
same, and that the defendants who are occupying the land belonging to the plaintiffs in violation
of the right of the latter, are duty-bound to restore possession of the same to the titled owners,
the herein plaintiffs.

On appeal, this decision was affirmed by the respondent court on August 22, 1988. 2 Their
motion for reconsideration having been denied, the petitioners then came to this Court, urging
reversal of the courts below.

They allege that:

1. The land in question is part of the public domain and could not have been validly registered
under the Torrens system.

2. The petitioners have acquired title to their respective lots by laches.

3. In the alternative, they should be considered builders in good faith entitled to the rights
granted by Articles 448, 546, 547 and 548 of the Civil Code.

The petition has no merit.

On the first ground, the Court notes that the private respondents title is traceable to an
Original Certificate of Title issued way back in 1910 or eighty-two years ago. That
certificate is now incontrovertible and conclusive against the whole world. The
presumption of regularity applies to the issuance of that certificate. This presumption
covers the finding that the land subject of the certificate was private in nature and
therefore registrable under the Torrens system.

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 that
there was actual fraud in securing the title. 3 Neither of these requirements has been
established by the petitioners. All they submitted was the certification of the Bureau of Forestry
that the land in question was alienable and disposable public land. The trial court was correct in
ruling that this deserved scant consideration for lack of legal basis. To be sure, a certification
from an administrative body cannot prevail against a court decision declaring the land to be
registrable.

Page 44 of 62
Significantly, it does not appear in the record that the Director of Forestry, or any other
representative of the Government for that matter, entered any opposition to the land registration
proceedings that led to the issuance of the Original Certificate of Title. No less importantly, an
action to invalidate a certificate of title on the ground of fraud prescribes after the expiration of
one (1) year from the entry of the decree of registration 4 and cannot now be resorted to by the
petitioners at this late hour. And collaterally at that.

The strange theory submitted by the petitioners that the owner of registered land must also
possess it does not merit serious attention. The non-presentation by the private respondents of
their tax declarations on the land is no indication that they have never acquired ownership
thereof or have lost it by such omission.

The second ground must also be rejected.

As registered owners of the lots in question, the private respondents have a right to eject any
person illegally occupying their property. This right is imprescriptible. Even if it be supposed that
they were aware of the petitioners occupation of the property, and regardless of the length of
that possession, the lawful owners have a right to demand the return of their property at any
time as long as the possession was unauthorized or merely tolerated, if at all. This right is never
barred by laches.

In urging laches against the private respondents for not protesting their long and continuous
occupancy of the lots in question, the petitioners are in effect contending that they have
acquired the said lots by acquisitive prescription. It is an elementary principle that the owner of a
land registered under the Torrens system cannot lose it by prescription. 5

As the Court observed in the early case Legarda v. Saleeby: 6

The real purpose of the Torrens system of land registration is to quiet title to land; to put
a stop forever to any question of the legality of the title, except claims which were noted
at the time of registration in the certificate, or which may arise subsequent thereto. That
being the purpose of the law, it would seem that once the title was registered, the owner
may rest secure, without the necessity of waiting in the portals of the court, or sitting in
the "mirador de su casa," to avoid the possibility of losing his land.

Applied consistently these many years, this doctrine has been burnished bright with use and
has long become a settled rule of law.

In light of the observations already made, it is obvious that the petitioners cannot invoke the
status of builders in good faith to preserve their claimed rights to the constructions they have
made on the lots in dispute.

A builder in good faith is one who is unaware of any flaw in his title to the land at the time he
builds on it. 7 This definition cannot apply to the petitioners because they knew at the very
outset that they had no right at all to occupy the subject lots.chanrobles.com : virtual law library

The petitioners have consistently insisted that the lots were part of the public domain and even
submitted a certification to that effect from the Bureau of Forestry. The land was in fact
registered under the Torrens System and such registration was constructive notice to
the whole world, including the petitioners. Apparently, the petitioners did not take the trouble

Page 45 of 62
of checking such registration. At any rate, the point is that, whether the land be public or private,
the petitioners knew they had no right to occupy it and build on it. The Court of Appeals was
correct in calling them squatters for having entered, without permission or authority, land that
did not belong to them.

In urging reversal of the trial court and the respondent court, the petitioners are asking us to
overturn long established doctrines guaranteeing the integrity of the Torrens system and the
indefeasibility of titles issued thereunder for the protection and peace of mind of the registered
owner against illegal encroachments upon his property. We are not disposed to take this drastic
step on the basis alone of their feeble arguments.

WHEREFORE, the petition is DENIED, with costs against the petitioners. It is so ordered.

3. NGA v. IAC
G.R. No. L 68741, January 28, 1988

G.R. No. L-68741 January 28, 1988

NATIONAL GRAINS AUTHORITY, plaintiff-appellee,

vs.
INTERMEDIATE APPELLATE COURT, MELECIO MAGCAMIT, NENA COSICO and
EMELITA MAGCAMIT, defendants-appellants.

PARAS, J.:

This is a petition for review of the decision of the then Intermediate Appellate
Court * (now Court of Appeals) dated January 31, 1984, reversing the decision of the
Court of First Instance of Laguna and San Pablo City, 8th Judicial District, Branch III, and of
the resolution dated August 28, 1984 denying the motion for reconsideration filed thereof.

The undisputed facts of this case as found by the Trial Court and the Intermediate Appellate
Court are as follows:

On December 2,1971, the spouses Paulino Vivas and Engracia Lizards, as owners of a
parcel of land situated in Bo. San Francisco, Victoria, Laguna, comprising more or less
105,710 square meters, sold for P30,000.00 said property in favor of spouses Melencio
Magcamit and Nena Cosico, and Amelita Magcamit (herein private respondents) as
evidenced by "Kasulatan Ng Bilihang Mabiling Muli." This sale with right to repurchase
was recorded in the Office of the Register of Deeds of Laguna on December 6,1971 under
Act No. 3344. On January 31,1972 the sale was made absolute by the spouses Vivas and
Lizardo in favor of the private respondents for the sum of P90,000.00; P50,000.00 of
which was paid upon the execution of the instrument, entitled "Kasulatan Ng Bilihan
Tuluyan," after being credited with the P30,000.00 consideration of the "Kasulatan Ng

Page 46 of 62
Mabibiling Muli," and the balance of P40,000.00 was to be paid the moment that the
certificate of title is issued. From the execution of said Kasulatan, private respondent have
remained in peaceful, adverse and open possession of subject property.

On February 26, 1975, an Original Certificate of Title No. T-1728 covering the property in
question was issued to and in the name of the spouses Vivas and Lizardo without the
knowledge of the private respondents and on April 30, 1975, said Spouses executed a
Special Power of Attorney in favor of Irenea Ramirez authorizing the latter to mortgage
the property with the petitioner, National Grains Authority.

On May 2, 1974, the counsel for the petitioner wrote the Provincial Sheriff in Sta. Cruz, Laguna,
requesting for the extrajudicial

l foreclosure of the mortgage executed by Irenea Ramirez on May 18, 1975, covering, among
others, the property involved in this case covered by OCT No. T-1728, for unpaid indebtedness
in the amount of P63,948.80 in favor of the petitioner.

On May 31, 1974, the Provincial Sheriff caused the issuance of the notice of sale of the property
in question, scheduling the public auction sale on June 28, 1974. The petitioner was the
highest and successful bidder so that a Certificate of Sale was issued in its favor on the
same date by the Provincial Sheriff.

On July 10, 1974, the petitioner in its capacity as attorney-in-fact of the mortgagor sold the
subject real property in favor of itself. By virtue of the deed of absolute sale, TCT No. T-75171 of
the Register of Deeds for the Province of Laguna was issued in the name of the petitioner on
July 16, 1974. It was only in July 1974, that private respondents learned that a title in the
name of the Vivas spouses had been issued covering the property in question and that
the same property had been mortgaged in favor of the petitioner. Private respondent
Nena Magcamit offered to pay the petitioner NGA the amount of P40,000.00 which is the
balance of the amount due the Vivas spouses under the terms of the absolute deed of
sale but the petitioner refused to accept the payment. On July 31, 1974, counsel for private
respondents made a formal demand on the spouses Vivas and Lizardo to comply with their
obligation under the terms of the absolute deed of sale; and soon after reiterated to the NGA,
the offer to pay the balance of P40,000.00 due under the absolute deed of sale. On August 13,
1974 petitioner in its reply informed counsel of private respondents that petitioner is now the
owner of the property in question and has no intention of disposing of the same.

The private respondents, who as previously stated, are in possession of subject property
were asked by petitioner to vacate it but the former refused. Petitioner filed a suit for
ejectment against private respondents in the Municipal Court of Victoria, Laguna, but the
case was dismissed.

On June 4, 1975, private respondents filed a complaint before the then Court of First Instance of
Laguna and San Pablo City, Branch III, San Pablo City, against the petitioner and the spouses
Vivas and Lizardo, praying, among others, that they be declared the owners of the property in
question and entitled to continue in possession of the same, and if the petitioner is declared the
owner of the said property, then, to order it to reconvey or transfer the ownership to them under
such terms and conditions as the court may find just, fair and equitable under the premises.
(Record on Appeal, pp. 2-11).

Page 47 of 62
In its answer to the complaint, the petitioner (defendant therein) maintained that it was never a
privy to any transaction between the private respondents (plaintiffs therein) and the spouses
Paulino Vivas and Engracia Lizardo that it is a purchaser in good faith and for value of the
property formerly covered by OCT No. 1728; and that the title is now indefeasible, hence,
private respondents' cause of action has' already prescribed. (Record on Appeal, pp. 16-22).

After due hearing, the trial court ** rendered its decision on March 17, 1981, in favor of the
petitioner, the dispositive portion of said judgment reading as follows:

WHEREFORE, judgment is hereby rendered as follows:

(1) declaring defendant National Grains Authority the lawful owner of the property
in question by virtue of its indefeasible title to the same;

(2) ordering plaintiffs to turn over possession of the land to defendant National
Grains Authority;

(3) ordering defendants-spouses Paulino Vivas and Engracia Lizardo to pay

plaintiffs the sum of P56,000.00 representing the amount paid pursuant to the
Kasulatan Ng Bilihang Tuluyan marked Exhibit "3", with legal interest thereon
from January 31, 1972 until the amount is paid, to pay an additional amount of
P5,000.00 for and as attorney's fees, an additional amount of Pl0,000.00 as
moral damages, another amount of P5,000.00 by way of exemplary damages
and to pay the costs of this suit. (Rollo, P. 35).

The private respondents interposed an appeal from the decision of the trial court to the
Intermediate Appellate Court.

After proper proceedings, the appellate court rendered its decision on January 31, 1984,
reversing and setting aside the decision of the trial court as follows:

WHEREFORE, the decision of the lower court is hereby reversed and set aside
and another one is rendered ordering the National Grains Authority to execute a
deed of reconveyance sufficient in law for purposes of registration and
cancellation of transfer Certificate of Title No. T-75171 and the issuance of
another title in the names of plaintiff-appellants, and ordering defendants-
appellees Paulino Vivas and Engracia Lizardo to pay the National Grains
Authority the sum of P78,375.00 (Exh. 3) within thirty (30) days from the receipts
of the writ of execution. No damages and costs. (Rollo, p. 19).

The petitioner filed a motion for reconsideration of the said decision but the same was denied.
(Rollo, p. 26).

Hence, this petition.

In the resolution of May 20, 1985, the petition was given due course and the parties were
required to submit simultaneous memoranda (Rollo, p. 128). The memorandum for the
petitioner was filed on July 3, 1985 (Rollo, p. 129) while the memorandum for the private
respondents was filed on August 26, 1985 1 Rollo p. 192).

Page 48 of 62
The main issue in this case is whether or not violation of the terms of the agreement
between the spouses Vivas and Lizardo, the sellers, and private respondents, the buyers,
to deliver the certificate of title to the latter, upon its issuance, constitutes a breach of
trust sufficient to defeat the title and right acquired by petitioner NGA, an innocent
purchaser for value.

It is undisputed that: (1) there are two deeds of sale of the same land in favor of private
respondents, namely: (a) the conditional sale with right to repurchase or the 'Kasulatan Ng
Bilihang Mabibiling Muli" which was registered under Act 3344 and (b) the deed of absolute sale
or "Kasulatan ng Bilihang Tuluyan" which was not registered; (2) the condition that the
Certificate of Title will be delivered to the buyers upon its issuance and upon payment of the
balance of P40,000.00 is contained in the deed of absolute sale; and (3) the land in question at
the time of the execution of both sales was not yet covered by the Torrens System of
registration.

It is axiomatic, that while the registration of the conditional sale with right of repurchase may be
binding on third persons, it is by provision of law "understood to be without prejudice to third
party who has better right" (Section 194 of the Administrative Code, as amended by Act No.
3344). In this case, it will be noted that the third party NGA, is a registered owner under
the Torrens System and has obviously a better right than private respondents and that
the deed of absolute sale with the suspensive condition is not registered and is
necessarily binding only on the spouses Vivas and Lizardo and private respondents.

In their complaint at the Regional Trial Court, private respondents prayed among others, for two
alternative reliefs, such as: (a) to be declared the owners of the property in question or (b) to
order the declared owner to reconvey or transfer the ownership of the property in their favor.

Private respondents claim a better right to the property in question by virtue of the Conditional
Sale, later changed to a deed of Absolute Sale which although unregistered under the Torrens
System allegedly transferred to them the ownership and the possession of the property in
question. In fact, they argue that they have been and are still in possession of the same openly,
continuously, publicly under a claim of ownership adverse to all other claims since the purchase
on December 2, 1971 (Rollo, p. 165). It is stressed that not until the month of July, 1974 did the
plaintiff learn that a title had been issued covering the property in question (Rollo, p. 15).

Time and time again, this Court has ruled that the proceedings for the registration of title
to land under the Torrens System is an action in rem not in personam, hence, personal
notice to all claimants of the res is not necessary in order that the court may have
jurisdiction to deal with and dispose of the res. Neither may lack of such personal notice
vitiate or invalidate the decree or title issued in a registration proceeding, for the State, as
sovereign over the land situated within it, may provide for the adjudication of title in a
proceeding in rem or one in the nature of or akin a to proceeding in rem which shall be binding
upon all persons, known or unknown (Moscoso vs. Court of appeals, 128 SCRA 719 [1984],
citing: City of Manila vs. Lack, et al., 19 Phil. 324, 337; Roxas vs. Enriquez, 29 Phil. 31; Director
of Lands vs. Roman Catholic Archbishop of Manila, 41 Phil. 120; Aguilar vs. Caogdan, 105 Phil.
661). It is thus evident that respondents' right over the property was barred by res
judicata when the decree of registration was issued to spouses Vivas and Lizards. It
does not matter that they may have had some right even the right of ownership, BEFORE
the grant of the Torrens Title.

Page 49 of 62
Thus, under Section 44 of P.D. 1529, every registered owner receiving a certificate of title in
pursuance of a decree of registration, and 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 encumbrances which may be subsisting,
and enumerated in the law. Under said provision, claims and liens of whatever character, except
those mentioned by law as existing, against the land prior to the issuance of certificate of title,
are cut off by such certificate if not noted thereon, and the certificate so issued binds the whole
world, including the government (Aldecoa and Co. vs. Warner Barns & Co., 30 Phil. 209 [1915];
Snyder vs. Fiscal of Cebu and Avila, 42 Phil. 766 [1922]). Under said ruling, if the purchaser is
the only party who appears in the deeds and the registration of titles in the property registry, no
one except such purchaser may be deemed by law to be the owner of the properties in question
(Ibid). Moreover, no title to registered land in derogation to that of the registered owner shall be
acquired by prescription or adverse possession (Umbay vs. Alecha, 135 SCRA 427 [1985]).

It does not appear that private respondents' claim falls under any of the exceptions provided for
under Section 44 of P.D. 1529 which can be enforced against petitioner herein.

Thus, it has been invariably restated by this Court, that "The real purpose of the Torrens
System is to quiet title to land and to stop forever any question as to its legality. "Once a
title is registered, the owner may rest secure, without the necessity of waiting in the
portals of the court, or sitting on the "mirador su casato," avoid the possibility of losing
his land." "An indirect or collateral attack on a Torrens Title is not allowed (Dominga vs.
Santos, 55 Phil. 361; Singian vs. Manila Railroad, 62 Phil. 467)."

The only exception to this rule is where a person obtains a certificate of title to a land
belonging to another and he has full knowledge of the rights of the true owner. He is then
considered as guilty of fraud and he may be compelled to transfer the land to the
defrauded owner so long as the property has not passed to the hands of an innocent
purchaser for value (Angeles vs. Sania, 66 Phil. 444 [1938], emphasis supplied).

It will be noted that the spouses Vivas and Lizardo never committed any fraud in procuring the
registration of the property in question. On the contrary, their application for registration which
resulted in the issuance of OCT No. 1728 was with complete knowledge and implied authority of
private respondents who retained a portion of the consideration until the issuance to said
spouses of a certificate of title applied for under the Torrens Act and the corresponding delivery
of said title to them. The question therefore, is not about the validity of OCT No. 1728 but in the
breach of contract between private respondents and the Vivas spouses. Petitioner NGA was
never a privy to this transaction. Neither was it shown that it had any knowledge at the time of
the execution of the mortgage, of the existence of the suspensive condition in the deed of
absolute sale much less of its violation. Nothing appeared to excite suspicion. The Special
Power of Attorney was regular on its face; the OCT was in the name of the mortgagor and the
NGA was the highest bidder in the public auction. Unquestionably, therefore, the NGA is an
innocent purchaser for value, first as an innocent mortgagee under Section 32 of P.D. 1529 and
later as innocent purchaser for value in the public auction sale.

Private respondents claim that NGA did not even field any representative to the land which was
not even in the possession of the supposed mortgagors, nor present any witness to prove its
allegations in the ANSWER nor submit its DEED OF MORTGAGE to show its being a
mortgages in good faith and for value (Rollo, p. 110).

Page 50 of 62
Such contention is, however, untenable. Well settled is the rule that all persons dealing with
property covered by a torrens certificate of title are not required to go beyond what
appears on the face of the title. When there is nothing on the certificate of title to indicate
any cloud or vice in the ownership of the property, or any encumbrance thereon, the
purchaser is not required to explore further than what the torrens title upon its face
indicates in quest for any hidden defect or inchoate right that may subsequently defeat
his right thereto (Centeno vs. Court of Appeals, 139 SCRA 545 [1985]).

More specifically, the Court has ruled that a bank is not required before accepting a mortgage to
make an investigation of the title of the property being given as security (Phil. National
Cooperative Bank vs. Carandang Villalon, 139 SCRA 570 [1985]), and where innocent third
persons like mortgagee relying on the certificate of title acquire rights over the property, their
rights cannot be disregarded (Duran vs. IAC, 138 SCRA 489 [1985]).

Under the circumstances, the Regional Trial Court could not have erred in ruling that plaintiffs
(private respondents herein) complaint insofar as it prays that they be declared owners of the
land in question cannot prosper in view of the doctrine of indefeasibility of title under the
Torrens System, because it is an established principle that a petition for review of the
decree of registration will not prosper even if filed within one year from the entry of the
decree if the title has passed into the hands of an innocent purchaser for value (Pres.
Decree No. 1529, Sec. 32). The setting aside of the decree of registration issued in land
registration proceedings is operative only between the parties to the fraud and the parties
defrauded and their privies, but not against acquirers in good faith and for value and the
successors in interest of the latter; as to them the decree shall remain in full force and effect
forever (Domingo vs. The Mayon Realty Corp. et al., 102 Phil. 32 [19571). Assuming, therefore,
that there was fraud committed by the sellers against the buyers in the instant case, petitioner
NGA who was not privy therein cannot be made to suffer the consequences thereof As correctly
declared by the trial court, the National Grains Authority is the lawful owner of the property in
question by virtue of its indefeasible title.

As to private respondents' alternative prayer that the declared owner be ordered to reconvey or
transfer the ownership of the property in their favor, it is clear that there is absolutely no reason
why petitioner, an innocent purchaser for value, should reconvey the land to the private
respondents.

PREMISES CONSIDERED, the decision of the Court of Appeals is REVERSED and SET
ASIDE, and the decision of the Court of First Instance of Laguna and San Pablo City, now
Regional Trial Court, is REINSTATED.

SO ORDERED.

Page 51 of 62
4. DBT Mar Bay Construction, Inc. v. Panes
594 SCRA 578 (2009)

DECISION

NACHURA, J.:

Before this Court is a Petition[1] for Review on Certiorari under Rule 45 of the Rules of
Civil Procedure, assailing the Court of Appeals (CA) Decision[2] dated October 25, 2004
which reversed and set aside the Order[3] of the Regional Trial Court (RTC) of Quezon
City, Branch 216, dated November 8, 2001.

The Facts

Subject of this controversy is a parcel of land identified as Lot Plan Psu-

123169,[4] containing an area of Two Hundred Forty Thousand, One Hundred Forty-Six
(240,146) square meters, and situated at Barangay (Brgy.) Pasong Putik,
Novaliches, Quezon City (subject property). The property is included in Transfer
Certificate of Title (TCT) No. 200519,[5] entered on July 19, 1974 and issued in favor of
B.C. Regalado & Co. (B.C. Regalado). It was conveyed by B.C. Regalado to petitioner
D.B.T. Mar-Bay Construction, Inc. (DBT) through a dacion en pago[6] for services
rendered by the latter to the former.

On June 24, 1992, respondents Ricaredo P. Panes (Ricaredo), his son Angelito P.
Panes (Angelito), Salvador Cea, Abogado Mautin, Donardo Paclibar, Zosimo P. Peralta,
and Hilarion Manongdo (herein collectively referred to as respondents) filed a
Complaint[7] for Quieting of Title with Cancellation of TCT No. 200519 and all Titles
derived thereat (sic), Damages, with Petition for the Issuance of Injunction with Prayer
for the Issuance of Restraining Order Ex-Parte, Etc. against B.C. Regalado, Mar-Bay
Realty, Inc., Spouses Gereno Brioso and Criselda M. Brioso, Spouses Ciriaco and Nellie
Mariano, Avelino C. Perdido and Florentina Allado, Eufrocina A. Maborang and Fe
Maborang, Spouses Jaime and Rosario Tabangcura, Spouses Oscar Ikalina and the
Register of Deeds (RD) of Quezon City. Subsequently, respondents filed an Amended
Complaint[8] and a Second Amended Complaint[9] particularly impleading DBT as one of
the defendants.

In the Complaints, Ricaredo alleged that he is the lawful owner and claimant of the
subject property which he had declared for taxation purposes in his name, and assessed
in the amount of P2,602,190.00 by the City Assessor of Quezon City as of the year
1985. Respondents alleged that per Certification[10] of the Department of Environment

Page 52 of 62
and Natural Resources (DENR) National Capital Region (NCR) dated May 7, 1992, Lot
Plan Psu-123169 was verified to be correct and on file in said office, and approved on
July 23, 1948.

Respondents also claimed that Ricaredo, his immediate family members, and the other
respondents had been, and still are, in actual possession of the portions of the subject
property, and their possession preceded the Second World War. To perfect his title in
accordance with Act No. 496 (The Land Registration Act) as amended by Presidential
Decree (P.D.) No. 1529 (The Property Registration Decree), Ricaredo filed with the RTC
of Quezon City, Branch 82 a case docketed as LRC Case No. Q-91-011, with LRC Rec.
No. N-62563.[11]

Respondents averred that in the process of complying with the publication requirements
for the Notice of Initial Hearing with the Land Registration Authority (LRA), it was
discovered by the Mapping Services of the LRA that there existed an overlapping of
portions of the land subject of Ricaredos application, with the subdivision plan of B.C.
Regalado. The said portion had, by then, already been conveyed by B.C. Regalado to
DBT.

Ricaredo asseverated that upon verification with the LRA, he found that the subdivision
plan of B.C. Regalado was deliberately drawn to cover portions of the subject property.
Respondents claimed that the title used by B.C. Regalado in the preparation of the
subdivision plan did not actually cover the subject property. They asserted that from the
records of B.C. Regalado, they gathered that TCT Nos. 211081,[12] 211095[13] and
211132,[14] which allegedly included portions of the subject property, were derived from
TCT No. 200519. However, TCT No. 200519 only covered Lot 503 of the Tala Estate
with an area of Twenty-Two Thousand Six Hundred Fifteen (22,615) square meters, and
was different from those mentioned in TCT Nos. 211081, 211095 and
211132. According to respondents, an examination of TCT No. 200519 would show that
it was derived from TCT Nos. 14814,[15] 14827,[16] 14815[17] and T-28.

In essence, respondents alleged that B.C. Regalado and DBT used the derivative titles
which covered properties located far from Pasong Putik, Novaliches, Quezon City where
the subject property is located, and B.C. Regalado and DBT then offered the same for
sale to the public. Respondents thus submitted that B.C Regalado and DBT through
their deliberate scheme, in collusion with others, used (LRC) Pcs-18345 as shown in the
consolidation-subdivision plan to include the subject property covered by Lot Plan Psu-
123169.

In his Answer[18] dated July 24, 1992, the RD of Quezon City interposed the defense that
at the time of registration, he found all documents to be in order. Subsequently, on
December 5, 1994, in his Motion[19] for Leave to Admit Amended Answer, with the
Amended Answer attached, he admitted that he committed a grave mistake when he
earlier said that TCT No. 200519 covered only one lot, i.e. Lot 503. He averred that upon

Page 53 of 62
careful examination, he discovered that TCT No. 200519 is composed of 17 pages, and
actually covered 54 lots, namely: Lots 503, 506, 507, 508, 509, 582, 586, 655, 659, 686,
434, 495, 497, 299, 498, 499, 500, 501, 502, 493, 692, 776, 496, 785, 777, 786, 780,
783, 505, 654, 660, 661, 663, 664, 665, 668, 693, 694, 713, 716, 781, 779, 784, 782,
787, 893, 1115, 1114, 778, 669 and 788, all of the Tala Estate. Other lots included
therein are Lot 890-B of Psd 36854, Lot 2 of (LRC) Pcs 12892 and Lot 3 of (LRC) Pcs
12892. Thus, respondents' allegation that Lots 661, 664, 665, 693 and 694 of the Tala
Estate were not included in TCT No. 200519 was not true.

On December 28, 1993, then defendants Spouses Jaime and Rosario Tabangcura
(Spouses Tabangcura) filed their Answer[20] with Counterclaim, claiming that they were
buyers in good faith and for value when they bought a house and lot covered by TCT
No. 211095 from B.C. Regalado, the latter being a subdivision developer and registered
owner thereof, on June 30, 1986. When respondent Abogado Mautin entered and
occupied the property, Spouses Tabangcura filed a case for Recovery of Property before
the RTC, Quezon City, Branch 97 which rendered a decision[21] in their favor.

On its part, DBT, traversing the complaint, alleged that it is the legitimate owner and
occupant of the subject property pursuant to a dacion en pago executed by B.C.
Regalado in the formers favor; that respondents were not real parties-in-interests
because Ricaredo was a mere claimant whose rights over the property had yet to be
determined by the RTC where he filed his application for registration; that the other
respondents did not allege matters or invoke rights which would entitle them to the relief

prayed for in their complaint; that the complaint was premature; and that the action
inflicted a chilling effect on the lot buyers of DBT.[22]
The RTC's Rulings

On June 15, 2000, the RTC through Judge Marciano I. Bacalla (Judge Bacalla),
rendered a Decision[23] in favor of the respondents. The RTC held that the testimony of
Ricaredo that he occupied the subject property since 1936 when he was only 16 years
old had not been rebutted; that Ricaredo's occupation and cultivation of the subject
property for more than thirty (30) years in the concept of an owner vested in him
equitable ownership over the same by virtue of an approved plan, Psu 123169; that the
subject property was declared under the name of Ricaredo for taxation purposes; [24] and
that the subject property per survey should not have been included in TCT No. 200519,
registered in the name of B.C. Regalado and ceded to DBT. The RTC further held that
Spouses Tabangcura failed to present satisfactory evidence to prove their claim. Thus,
the RTC disposed of the case in this wise:
WHEREFORE, in view of the foregoing considerations, judgment is
hereby rendered declaring Certificate of Title No. 200519 and all titles
derived thereat as null and void insofar as the same embrace the land
covered by Plan PSU-123169 with an area of 240,146 square meters in
the name of Ricaredo Panes; ordering defendant DBT Marbay Realty,

Page 54 of 62
 Inc. to pay plaintiff Ricaredo Panes the sum of TWENTY THOUSAND
(P20,000) pesos as attorneys fees plus costs of suit.

SO ORDERED.

On September 12, 2000, DBT filed a Motion[25] for Reconsideration, based on the
grounds of prescription and laches. DBT also disputed Ricaredos claim of open,
adverse, and continuous possession of the subject property for more than thirty (30)
years, and asserted that the subject property could not be acquired by prescription or
adverse possession because it is covered by TCT No. 200519.

While the said Motion for Reconsideration was pending, Judge Bacalla passed away.

Meanwhile, on January 2, 2001, a Motion[26] for Intervention and a Complaint in

Intervention were filed by Atty. Andres B. Pulumbarit (Atty. Pulumbarit), representing the
Don Pedro/Don Jose de Ocampo Estate. The intervenor alleged that the subject
property formed part of the vast tract of land with an area of 117,000 hectares, covered
by Original Certificate of Title (OCT) No. 779 issued by the Honorable Norberto
Romualdez on March 14, 1913 under Decree No. 10139, which belongs to the Estate of
Don Pedro/Don Jose de Ocampo. Thus, the Complaint[27] in Intervention prayed that the
RTCs Decision be reconsidered; that the legitimacy and superiority of OCT 779 be
upheld; and that the subject property be declared as belonging to the Estate of Don
Pedro/Don Jose de Ocampo.

In its Order[28] dated March 13, 2001, the RTC, through Acting Judge Modesto C.
Juanson (Judge Juanson), denied Atty. Pulumbarits Motion for Intervention because a
judgment had already been rendered pursuant to Section 2,[29] Rule 19 of the 1997
Rules of Civil Procedure.

On April 10, 2001, the RTC issued an Order[30] stating that there appeared to be a need
for a clarificatory hearing before it could act on DBT's Motion for Reconsideration.Thus,
a hearing was held on May 17, 2001. Thereafter, supplemental memoranda were
required of the parties.[31] Both parties complied.[32] However, having found that the
original copy of TCT No. 200519 was not submitted to it for comparison with the
photocopy thereof on file, the RTC directed DBT to present the original or certified true
copy of the TCT on August 21, 2001.[33] Respondents moved to reconsider the said
directive[34] but the same was denied.[35] DBT, on the other hand, manifested that a copy
of TCT No. 200519, consisting of 17 pages, had already been admitted in evidence; and
that because of the fire in the Office of the RD in Quezon City sometime in 1988, DBT,
despite diligent effort, could not secure an original or certified true copy of said TCT.
Instead, DBT submitted a certified true copy of Consolidated Subdivision Plan Pcs
18345.[36]

Page 55 of 62
On November 8, 2001, the RTC, through Judge Juanson, issued an Order[37] reversing
the earlier RTC Decision and dismissing the Complaint for lack of merit. The RTC held
that prescription does not run against registered land; hence, a title once registered
cannot be defeated even by adverse, open or notorious possession. Moreover, the RTC
opined that even if the subject property could be acquired by prescription, respondents'
action was already barred by prescription and/or laches because they never asserted
their rights when B.C. Regalado registered the subject property in 1974; and later
developed, subdivided and sold the same to individual lot buyers.

On December 18, 2001, respondents filed a Motion for Reconsideration[38] which the
RTC denied in its Order[39] dated June 17, 2002. Aggrieved, respondents appealed to
the CA.[40]
The CA's Ruling

On October 25, 2004, the CA reversed and set aside the RTC Orders dated November
8, 2001 and June 17, 2002 and reinstated the RTC Decision dated June 15, 2000. The
CA held that the properties described and included in TCT No. 200519 are located in
San Francisco del Monte, San Juan del Monte, Rizal and Cubao, Quezon City while the
subject property is located in Brgy. Pasong Putik, Novaliches, Quezon City.
Furthermore, the CA held that Engr. Vertudazo's testimony that there is a gap of around
1,250 meters between Lot 503 and Psu 123169 was not disproved or refuted. The CA
found that Judge Juanson committed a procedural infraction when he entertained issues
and admitted evidence presented by DBT in its Motion for Reconsideration which were
never raised in the pleadings and proceedings prior to the rendition of the RTC Decision.
The CA opined that DBT's claims of laches and prescription clearly appeared to be an
afterthought. Lastly, the CA held that DBT's Motion for Reconsideration was not based
on grounds enumerated in the Rules of Procedure.[41]

Petitioner filed a Motion for Reconsideration,[42] which was, however, denied by the CA in
its Resolution[43] dated February 22, 2005.

Hence, this Petition.

The Issues

Petitioner raises the following as grounds for this Petition:

I.

PETITIONER'S FAILURE TO ALLEGE PRESCRIPTION IN ITS

ANSWER IS NOT A WAIVER OF SUCH DEFENSE.

II.

Page 56 of 62
 IT IS NOT ERRONEOUS TO REQUIRE THE PRODUCTION OF A
CERTIFIED TRUE COPY OF TCT NO. 200519 AFTER THE DECISION
ON THE MERITS HAS BEEN RENDERED BUT BEFORE IT BECAME
FINAL.

III.

A REGISTERED LAND CAN NOT BE ACQUIRED BY ACQUISITIVE

PRESCRIPTION.

IV.

THE TESTIMONY OF ENGR. VERTUDAZO ON THE BASIS OF THE

TECHNICAL DESCRIPTION OF LOT 503 IN AN INCOMPLETE
DOCUMENT IS UNRELIABLE.

V.

MR. PANES HAS NEVER BEEN IN OPEN, ADVERSE AND

CONTINUOUS POSSESSION OF THE SUBJECT PROPERTY FOR
MORE THAN THIRTY (30) YEARS.[44]

Distilled from the petition and the responsive pleadings, and culled from the arguments
of the parties, the issues may be reduced to two questions, namely:

1) Did the RTC err in upholding DBT's defenses of prescription and laches as
raised in the latter's Motion for Reconsideration?
2) Which between DBT and the respondents have a better right over the subject
property?

Our Ruling

We answer the first question in the affirmative.

It is true that in Dino v. Court of Appeals[45] we ruled:

(T)rial courts have authority and discretion to dismiss an action on the

ground of prescription when the parties' pleadings or other facts on
record show it to be indeed time-barred; (Francisco v. Robles, Feb. 15,
1954; Sison v. McQuaid, 50 O.G. 97; Bambao v. Lednicky, Jan. 28,
1961; Cordova v. Cordova, Jan. 14, 1958; Convets, Inc. v. NDC, Feb. 28,
1958; 32 SCRA 529; Sinaon v. Sorongan, 136 SCRA 408); and it may do

Page 57 of 62
 so on the basis of a motion to dismiss (Sec. 1, [f] Rule 16, Rules of
Court), or an answer which sets up such ground as an affirmative
defense (Sec. 5, Rule 16), or even if the ground is alleged after
judgment on the merits, as in a motion for reconsideration (Ferrer v.
Ericta, 84 SCRA 705); or even if the defense has not been asserted at
all, as where no statement thereof is found in the pleadings (Garcia
v. Mathis, 100 SCRA 250; PNB v. Pacific Commission House, 27 SCRA
766; Chua Lamco v. Dioso, et al., 97 Phil. 821); or where a defendant
has been declared in default (PNB v. Perez; 16 SCRA 270). What is
essential only, to repeat, is that the facts demonstrating the lapse of
the prescriptive period be otherwise sufficiently and satisfactorily
apparent on the record; either in the averments of the plaintiff's
complaint, or otherwise established by the evidence. (Emphasis
supplied)

Indeed, one of the inherent powers of courts is to amend and control its processes so as
to make them conformable to law and justice. This includes the right to reverse itself,
especially when in its opinion it has committed an error or mistake in judgment, and
adherence to its decision would cause injustice.[46] Thus, the RTC in its Order dated
November 8, 2001 could validly entertain the defenses of prescription and laches in
DBT's motion for reconsideration.

However, the conclusion reached by the RTC in its assailed Order was erroneous. The
RTC failed to consider that the action filed before it was not simply for reconveyance but
an action for quieting of title which is imprescriptible.

Verily, an action for reconveyance can be barred by prescription. When an action for
reconveyance is based on fraud, it must be filed within four (4) years from discovery of
the fraud, and such discovery is deemed to have taken place from the issuance of the
original certificate of title. On the other hand, an action for reconveyance based on an
implied or constructive trust prescribes in ten (10) years from the date of the issuance of
the original certificate of title or transfer certificate of title. The rule is that the registration
of an instrument in the Office of the RD constitutes constructive notice to the whole world
and therefore the discovery of the fraud is deemed to have taken place at the time of
registration.[47]

However, the prescriptive period applies only if there is an actual need to reconvey the
property as when the plaintiff is not in possession of the property. If the plaintiff, as the
real owner of the property also remains in possession of the property, the prescriptive
period to recover title and possession of the property does not run against him. In such a
case, an action for reconveyance, if nonetheless filed, would be in the nature of a suit for

Page 58 of 62
quieting of title, an action that is imprescriptible.[48] Thus, in Vda. de Gualberto v.
Go,[49] this Court held:

[A]n action for reconveyance of a parcel of land based on implied or

constructive trust prescribes in ten years, the point of reference being the
date of registration of the deed or the date of the issuance of the
certificate of title over the property, but this rule applies only when the
plaintiff or the person enforcing the trust is not in possession of the
property, since if a person claiming to be the owner thereof is in actual
possession of the property, as the defendants are in the instant case, the
right to seek reconveyance, which in effect seeks to quiet title to the
property, does not prescribe. The reason for this is that one who is in
actual possession of a piece of land claiming to be the owner thereof
may wait until his possession is disturbed or his title is attacked before
taking steps to vindicate his right, the reason for the rule being, that his
undisturbed possession gives him a continuing right to seek the aid of a
court of equity to ascertain and determine the nature of the adverse
claim of a third party and its effect on his own title, which right can be
claimed only by one who is in possession.

Insofar as Ricaredo and his son, Angelito, are concerned, they established in their
testimonies that, for some time, they possessed the subject property and that Angelito
bought a house within the subject property in 1987.[50] Thus, the respondents are proper
parties to bring an action for quieting of title because persons having legal, as well as
equitable, title to or interest in a real property may bring such action, and title here does
not necessarily denote a certificate of title issued in favor of the person filing the suit.[51]

Although prescription and laches are distinct concepts, we have held, nonetheless, that
in some instances, the doctrine of laches is inapplicable where the action was filed within
the prescriptive period provided by law. Therefore, laches will not apply to this case,
because respondents' possession of the subject property has rendered their right to
bring an action for quieting of title imprescriptible and, hence, not barred by laches.
Moreover, since laches is a creation of equity, acts or conduct alleged to constitute the
same must be intentional and unequivocal so as to avoid injustice. Laches will operate
not really to penalize neglect or sleeping on one's rights, but rather to avoid recognizing
a right when to do so would result in a clearly inequitable situation.[52]

Albeit the conclusion of the RTC in its Order dated November 8, 2001, which dismissed
respondents' complaint on grounds of prescription and laches, may have been
erroneous, we, nevertheless, resolve the second question in favor of DBT.

It is a well-entrenched rule in this jurisdiction that no title to registered land in

derogation of the rights of the registered owner shall be acquired by prescription
or adverse possession.[53]

Page 59 of 62
Article 1126[54] of the Civil Code in connection with Section 46[55] of Act No. 496 (The
Land Registration Act), as amended by Section 47[56] of P.D. No. 1529 (The Property
Registration Decree), clearly supports this rule. Prescription is unavailing not only
against the registered owner but also against his hereditary successors. Possession is a
mere consequence of ownership where land has been registered under
the Torrens system, the efficacy and integrity of which must be protected. Prescription is
rightly regarded as a statute of repose whose objective is to suppress fraudulent and
stale claims from springing up at great distances of time and surprising the parties or
their representatives when the facts have become obscure from the lapse of time or the
defective memory or death or removal of witnesses.[57]

Thus, respondents' claim of acquisitive prescription over the subject property is

baseless. Under Article 1126 of the Civil Code, acquisitive prescription of ownership of
lands registered under the Land Registration Act shall be governed by special laws.
Correlatively, Act No. 496, as amended by PD No. 1529, provides that no title to
registered land in derogation of that of the registered owner shall be acquired by adverse
possession. Consequently, in the instant case, proof of possession by the respondents
is immaterial and inconsequ`ential.[58]

Moreover, it may be stressed that there was no ample proof that DBT participated in the
alleged fraud. While factual issues are admittedly not within the province of this Court, as
it is not a trier of facts and is not required to re-examine or contrast the oral and
documentary evidence anew, we have the authority to review and, in proper cases,
reverse the factual findings of lower courts when the findings of fact of the trial court are
in conflict with those of the appellate court.[59] In this regard, we reviewed the records of
this case and found no clear evidence that DBT participated in the fraudulent
scheme. In Republic v. Court of Appeals,[60] this Court gave due importance to the fact
that the private respondent therein did not participate in the fraud averred. We accord
the same benefit to DBT in this case. To add, DBT is an innocent purchaser for value
and good faith which, through a dacion en pago duly entered into with B.C. Regalado,
acquired ownership over the subject property, and whose rights must be protected under
Section 32[61] of P.D. No. 1529.

Dacion en pago is the delivery and transmission of ownership of a thing by the debtor to
the creditor as an accepted equivalent of the performance of the obligation. It is a special
mode of payment where the debtor offers another thing to the creditor, who accepts it as
an equivalent of the payment of an outstanding debt. In its modern concept, what
actually takes place in dacion en pago is an objective novation of the obligation where
the thing offered as an accepted equivalent of the performance of an obligation is
considered as the object of the contract of sale, while the debt is considered as the
purchase price.[62]

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It must also be noted that portions of the subject property had already been sold to third
persons who, like DBT, are innocent purchasers in good faith and for value, relying on
the certificates of title shown to them, and who had no knowledge of any defect in the
title of the vendor, or of facts sufficient to induce a reasonably prudent man to inquire
into the status of the subject property.[63] To disregard these circumstances simply on the
basis of alleged continuous and adverse possession of respondents would not only be
inimical to the rights of the aforementioned titleholders, but would ultimately wreak havoc
on the stability of the Torrens system of registration.

A final note.

While the Torrens system is not a mode of acquiring title, but merely a system of
registration of titles to lands, justice and equity demand that the titleholder should
not be made to bear the unfavorable effect of the mistake or negligence of the
State's agents, in the absence of proof of his complicity in a fraud or of manifest
damage to third persons. The real purpose of the Torrens system is to quiet title
to land and 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. Otherwise, the integrity of the Torrens system would
forever be sullied by the ineptitude and inefficiency of land registration officials,
who are ordinarily presumed to have regularly performed their duties.[64] Thus,
where innocent third persons, relying on the correctness of the certificate of title
thus issued, acquire rights over the property, the court cannot disregard those
rights and order the cancellation of the certificate. The effect of such outright
cancellation will be to impair public confidence in the certificate of title. The
sanctity of the Torrens system must be preserved; otherwise, everyone dealing
with the property registered under the system will have to inquire in every
instance on whether the title had been regularly or irregularly issued, contrary to
the evident purpose of the law. Every person dealing with the registered land may
safely rely on the correctness of the certificate of title issued therefor, and the law
will in no way oblige him to go behind the certificate to determine the condition of
the property.[65]

WHEREFORE, the instant Petition is GRANTED and the assailed Court of Appeals
Decision dated October 25, 2004 is hereby REVERSED and SET ASIDE. A new
judgment is hereby entered DISMISSING the Complaint filed by the respondents for lack
of merit.

SO ORDERED.

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