G.R. No.

180463 : January 16, 2013

REPUBLIC OF THE PHILIPPINES, Petitioner, v. AFP RETIREMENT AND SEPARATION

BENEFITS SYSTEM,* Respondent,
HEIRS OF CABALO KUSOP and ATTY. NILO J. FLAVIANO, Respondents-Intervenors.

DECISION

DEL CASTILLO, J.:

The processes of the State should not be trifled with. The failure of a party to avail of the
proper remedy to acquire or perfect one's title to land cannot justify a resort to other
remedies which are otherwise improper and do not provide for the full oppot1unity to prove
his title, but instead require him to concede it before availment.

Certificates of title issued covering inalienable and non-disposable public land, even in the
hands of an alleged innocent purchaser for value, should be cancelled.

Before us is a Petition for Review on Certiorari1 questioning the October 26, 2007
Decision2 of the Court of Appeals (CA) in CA-G.R. CV No. 75170, which reversed the
November 5, 2001 Decision3 of the Regional Trial Court (RTC), Branch 23 of General Santos
City in Civil Case No. 6419.

Factual Antecedents

Lots X, Y-1 and Y-2 lands of the public domain consisting of 52,678 square meters located
in Barrio Dadiangas, General Santos Municipality (now General Santos City) were reserved
for recreation and health purposes by virtue of Proclamation No. 1684 (Proc. 168), which
was issued in 1963. In 1983, Proclamation No. 22735 (Proc. 2273) was issued amending
Proc. 168, and removing and segregating Lots Y-1 and Y-2 from the reservation and
declaring them open for disposition to qualified applicants. As a result, only Lot X which
consists of 15,020 square meters remained part of the reservation now known as
Magsaysay Park.

The record discloses that respondents-intervenors waged a campaign through petitions and
pleas made to the President to have Lots Y-1 and Y-2 taken out of the reservation for the
reason that through their predecessor Cabalo Kusop (Kusop), they have acquired vested
private rights over these lots. This campaign resulted in Proc. 2273, which re-classified and
returned Lots Y-1 and Y-2 to their original alienable and disposable state.

In 1997, respondents-intervenors filed applications6 for the issuance of individual

miscellaneous sales patents over the whole of Lot X with the Department of Environment
and Natural Resources (DENR) regional office in General Santos City, which approved them.
Consequently, 16 original certificates of title7 (OCTs) covering Lot X were issued in the
names of respondents-intervenors and several others. In September 1997, these 16 titles
were simultaneously conveyed8 to herein respondent AFP-Retirement and Separation
Benefits System (AFP-RSBS), resulting in the issuance of 16 new titles (the AFP-RSBS
titles) Transfer Certificates of Title (TCT) No. T-81051 through T-81062, T-81146-T-81147,
and T-81150-T-81151.9 ?r?l1

On September 11, 1998, herein petitioner Republic of the Philippines instituted Civil Case
No. 6419, which is a Complaint10 for reversion, cancellation and annulment of the AFP-RSBS
titles, on the thesis that they were issued over a public park which is classified as
inalienable and non-disposable public land.

Respondents-intervenors intervened11 in Civil Case No. 6419, and, together with the
defendant AFP-RSBS, argued that their predecessor-in-interest Kusop had acquired vested
interests over Lot X even before Proc. 168 was issued, having occupied the same for more
than 30 years. They claimed that these vested rights, taken together with the favorable
recommendations and actions of the DENR and other government agencies to the effect
that Lot X was alienable and disposable land of the public domain, as well as the
subsequent issuance of sales patents and OCTs in their names, cannot be defeated by Proc.
168. They added that under Proc. 168, private rights are precisely recognized, as shown by
the preliminary paragraph thereof which states: cralawlib rary

Upon the recommendation of the Secretary of Agriculture and Natural Resources and
pursuant to the authority vested in me by law, I, Diosdado Macapagal, President x x x, do
hereby withdraw from sale or settlement and reserve for recreational and health resort site
purposes, under the administration of the municipality of General Santos, subject to private
rights, if any there be x x x12 (Emphasis supplied.)

Ruling of the Regional Trial Court

On November 5, 2001, the trial court rendered judgment nullifying the AFP-RSBS titles and
ordering the return of Lot X to the Republic, with the corresponding issuance of new titles
in its name. The trial court ruled that the respondents-intervenors having benefited by the
grant, through Proc. 2273, of Lots Y-1 and Y-2 to them can no longer claim Lot X, which
has been specifically declared as a park reservation under Proc. 168 and further segregated
under Proc. 2273. In other words, their private rights, which were guaranteed under Proc.
168, have already been recognized and respected through the subsequently issued Proc.
2273; as a consequence, the succeeding sales patents and OCTs in the names of the
respondents-intervenors should be declared null and void not only for being in violation of
law, but also because respondents-intervenors did not deserve to acquire more land.

Ruling of the Court of Appeals

The CA reduced the issues for resolution to just two: 1) whether the respondents-
intervenors acquired vested rights over Lot X, and 2) whether AFP-RSBS is a buyer in good
faith.13 It went on to declare that Lot X was alienable and disposable land, and that
respondents-intervenors predecessor-in-interest acquired title by prescription, on the basis
of the documentary evidence presented: cralawlib rary

1. Report to the President of the Republic dated August 2, 1982 by the Board of
Liquidators, recommending the amendment of Proc. 168 to recognize and respect the rights
of respondents-intervenors predecessors-in-interest, who have been in possession of
portions of the reservation since time immemorial;14 ?r?l 1

2. Report of District Land Officer Buenaventura Gonzales of the Bureau of Lands, dated May
26, 1975, likewise stating that respondents-intervenors predecessors-in-interest have been
in possession of portions of the reservation since time immemorial, and that for this
reason, Proc. 168 was never in force and effect;15 ?r?l1

3. Report of Deputy Public Land Inspector Jose Balanza of the Bureau of Lands, dated May
6, 1976, finding that the property covered by Proc. 168 is private property and within an
area declared as alienable and disposable under Project No. 47 per L.C. Map No. 700
established by the then Bureau of Forestry;16?r?l1

4. Tax Declaration No. 716 in the name of Cabalo Kusop and its subsequent revisions;17 ?r?l1

5. Certifications issued by the (then) municipal treasurer of General Santos and official
receipts showing payment of taxes from 1945-1972;18 ?r?l1

6. Sworn declaration of ownership submitted to the Philippine Constabulary;19 ?r?l 1

7. 1975 letter of then General Santos Mayor acknowledging that Kusop was in possession
of Lot X even before the war; and20?r?l1

8. Statements and testimonies of several witnesses.21 ?r?l1 ??? r?b l? ??r ??l l ?? l ?b r?r

The CA added that as a consequence of their predecessors possession of Lot X since time
immemorial, respondents-intervenors have acquired title without need of judicial or other
action, and the property ceased to be public land and thus became private property.22 It
stressed that while "government has the right to classify portions of public land, the
primary right of a private individual who possessed and cultivated the land in good faith
much prior to such classification must be recognized and should not be prejudiced by after-
events which could not have been anticipated."23 ?r?l1

The CA went on to justify that the reason why Proc. 2273 did not take Lot X out of the
public domain is not because the Executive wanted it to remain a recreational park reserve
but because the respondents-intervenors were in the process of donating said Lot X to
General Santos City, and the President deemed it unnecessary to still place it within the
coverage of Proc. 2273.

The CA further ruled that the miscellaneous sales patents issued in the names of the
respondents-intervenors affirm their claim of ownership over Lot X, while the OCTs
subsequently issued in their names rendered their claim indefeasible.

Finally, the appellate court declared that since respondents-intervenors titles to Lot X were
duly obtained, the sale and transfer thereof to respondent AFP-RSBS should be accorded
the same treatment as a sale or transfer made to a purchaser in good faith. Besides, it
having been shown that the petitioner is not entitled to Lot X since it already belonged to
the respondents-intervenors, petitioner had no right to raise the issue of AFP-RSBS good or
bad faith.
Thus, petitioners Complaint for reversion was dismissed.

Issues

The petition now enumerates the following issues for resolution: c rala wlibra ry

BY APPLYING FOR MISCELLANEOUS SALES PATENT, THE HEIRS HAVE ADMITTED THAT LOT
X IS PUBLIC LAND. THE EVIDENCE THEY SUBMITTED TO ESTABLISH THEIR ALLEGED
PRIVATE OWNERSHIP IS THEREFORE UNAVAILING.

II

THE ALLEGED "VESTED RIGHTS" OF THE HEIRS OVER LOT X CANNOT PREVAIL AGAINST
GOVERNMENT OWNERSHIP OF PUBLIC LAND UNDER THE REGALIAN DOCTRINE.

III

THERE IS NO BASIS TO CONCLUDE THAT PROCLAMATION 2273 RECOGNIZED THE

OWNERSHIP OF LOT X BY THE HEIRS. NEITHER IS THERE BASIS TO CLAIM THAT THE
HEIRS RETAINED OWNERSHIP OF LOT X DUE TO THE FAILURE OF THE CITY OF GENERAL
SANTOS TO ACCEPT THE DONATION OF LOT X.

IV

AFP-RSBS IS NOT A BUYER IN GOOD FAITH.24 ?r?l1 ??? r?bl? ??r??l l ?? l?b r?r

Petitioners Arguments

Apart from echoing the pronouncements of the trial court, the Republic, in its Petition and
Consolidated Reply,25 submits that respondents-intervenors applications for miscellaneous
sales patents constitute acknowledgment of the fact that Lot X was public land, and not
private property acquired by prescription.

Petitioner argues further that with the express recognition that Lot X is public land, it
became incumbent upon respondents-intervenors granting that they are entitled to the
issuance of miscellaneous sales patents to prove that Lot X is alienable and disposable land
pursuant to Commonwealth Act No. 14126(CA 141); and that in this regard respondents-
intervenors failed. They offered proof, in the form of reports and recommendations made
by the Bureau of Lands and the Board of Liquidators, among others, which were insufficient
to establish that Lot X was alienable and disposable land of the public domain. Besides,
under the law governing miscellaneous sales patents, Republic Act No. 73027 (RA 730), it is
specifically required that the property covered by the application should be one that is not
being used for a public purpose. Yet the fact remains that Lot X is being utilized as a public
recreational park. This being the case, Lot X should not have qualified for distribution
allowable under RA 730.
Petitioner next insists that if indeed respondents-intervenors have become the owners of
Lot X by acquisitive prescription, they should have long availed of the proper remedy or
remedies to perfect their title through an action for confirmation of imperfect title or
original registration. Yet they did not; instead, they resorted to an application for issuance
of miscellaneous sales patents. By so doing, respondents-intervenors conceded that they
had not acquired title to Lot X.

Petitioner next advances the view that respondents-intervenors vested rights cannot prevail
as against the States right to Lot X under the Regalian doctrine. Petitioner argues that the
presumption still weighs heavily in favor of state ownership of all lands not otherwise
declared private and that since Lot X was not declared open for disposition as were Lots Y-1
and Y-2 by and under Proc. 2273, it should properly retain its character as an inalienable
public recreational park.

Finally, petitioner submits that the good or bad faith of AFP-RSBS is irrelevant because any
title issued on inalienable public land is void even in the hands of an innocent purchaser for
value.28
?r?l1

Respondents Arguments

AFP-RSBS and the respondents-intervenors collectively argue that the grounds relied upon
by the Republic in the petition involve questions of fact, which the Court may not pass
upon. They add that since private rights are explicitly recognized under Proc. 168, the
respondents-intervenors predecessors prior possession since time immemorial over Lot X
should thus be respected and should bestow title upon respondents-intervenors.

They argue that if respondents-intervenors chose the wrong remedy in their attempt to
perfect their title over Lot X, this was an innocent mistake that in no way divests such title,
which was already perfected and acquired by virtue of their predecessors open, continuous
and uninterrupted possession of Lot X.

Finally, they argue that the reports and recommendations of the Bureau of Lands and the
Board of Liquidators constitute findings of facts of administrative agencies which thus bind
the Court. They add that the presumption arising from the Regalian doctrine may be
overcome by proof to the contrary, and that it has in fact been overcome by the evidence
presented before the trial court.

Our Ruling

The Court grants the Petition.

From the wording of Proc. 168, the land it comprises is subject to sale or settlement, and
thus alienable and disposable Upon the recommendation of the Secretary of Agriculture and
Natural

Resources and pursuant to the authority vested in me by law, I, Diosdado Macapagal,

President x x x, do hereby withdraw from sale or settlement and reserve for recreational
and health resort site purposes, under the administration of the municipality of General
Santos, subject to private rights, if any there be x x x29 (Emphasis and underscoring
supplied.)

However, this alienable and disposable character of the land covered by the proclamation
was subsequently withdrawn, and the land was re-classified by then President Macapagal to
pave the way for the establishment of a park reservation, subject only to previously
acquired private rights. Respondents-intervenors then lobbied for the exclusion of certain
portions of the reservation which they claimed to be theirs, allegedly acquired by their
predecessor Kusop through prescription. They were successful, for in 1983, then President
Marcos issued Proc. 2273, which excluded and segregated Lots Y-1 and Y-2 from the
coverage of Proc. 168. In addition, Proc. 2273 declared Lots Y-1 and Y-2 open for
distribution to qualified beneficiaries which included the herein respondents-intervenors.
However, Lot X was retained as part of the reservation.

Respondents-intervenors did not question Proc. 2273, precisely because they were the
beneficiaries thereof; nor did they object to the retention of Lot X as part of the park
reserve. Instead, in 1997, they applied for, and were granted, sales patents over Lot X.

Evidently, the sales patents over Lot X are null and void, for at the time the sales patents
were applied for and granted, the land had lost its alienable and disposable character. It
was set aside and was being utilized for a public purpose, that is, as a recreational park.
Under Section 83 of CA 141, "the President may designate by proclamation any tract or
tracts of land of the public domain as reservations for the use of the Commonwealth of the
Philippines or of any of its branches, or of the inhabitants thereof, in accordance with
regulations prescribed for this purpose, or for quasi-public uses or purposes, when the
public interest requires it, including reservations for highways, rights of way for railroads,
hydraulic power sites, irrigation systems, communal pastures or leguas comunales, public
parks, public quarries, public fishponds, workingmen's village and other improvements for
the public benefit." And under the present Constitution, national parks are declared part of
the public domain, and shall be conserved and may not be increased nor diminished,
except by law.30?r?l 1

The 1935 Constitution classified lands of the public domain into agricultural, forest or
timber. 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, giving the government great
leeway for classification. Then the 1987 Constitution reverted to the 1935 Constitution
classification with one addition: national parks. Of these, only agricultural lands may be
alienated. x x x31 (Emphasis supplied.)

Respondents-intervenors no longer had any right to Lot X not by acquisitive prescription,

and certainly not by sales patent. In fact, their act of applying for the issuance of
miscellaneous sales patents operates as an express acknowledgment that the State, and
not respondents-intervenors, is the owner of Lot X. It is erroneous to suppose that
respondents-intervenors possessed title to
Lot X when they applied for miscellaneous sales patents, for the premise of such grant or
privilege is precisely that the State is the owner of the land, and that the applicant
acknowledges this and surrenders to State 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.32 ?r?l1

Respondents-intervenors actions betray their claim of ownership to Lot X. When Proc. 168
was issued, they did not institute action to question its validity, using as cause of action
their claimed ownership and title over the land. The same is true when Proc. 2273 came
out. They did not file suit to invalidate it because it contravenes their claimed ownership
over Lot X. They simply sat and waited for the good graces of the government to fall on
their laps. They simply waited for the

State to declare them beneficiaries of the land. And when the President failed to include Lot
X in Proc. 2273 and declare it open for disposition to them as beneficiaries, they filed their
applications for issuance of miscellaneous sales patents over said lot. All these actions are
anathema to a claim of ownership, and instead indicate a willingness to abide by the
actions of the State, a show of respect for its dominion over the land.

Under the law, respondents-intervenors are charged with knowledge of the law; they
cannot feign ignorance. In fact, they could not claim to be unaware of Proc. 168, for
precisely they hid under its protective mantle to seek the invalidation of a donation claimed
to have been made by them to one Jose Tayoto. Thus, in Tayoto v. Heirs of Kusop,33 an
alleged donee (Tayoto) of property located within Lots X, Y-1, and Y-2 filed a case for
quieting of title against the donors herein respondents-intervenors to protect the property
which they allegedly donated to him, which was then in danger of being lost for the reason
that respondents-intervenors supposedly reneged on the donation. Respondents-
intervenors filed an urgent motion to dismiss the Complaint claiming, among others, the
"invalidity of the donation as the subject thereof had not yet been

excluded from the Magsaysay Park."34 In disposing of the case, the Court made the
following pronouncement: cralawlib rary

Be that as it may, the donation is void. There are three essential elements of donations: [1]
the reduction of the patrimony of the donor, [2] the increase in the patrimony of the
donee, and [3] the intent to do an act of liberality (animus donandi). Granting that there is
an animus donandi, we find that the alleged donation lacks the first two elements which
presuppose the donor's ownership rights over the subject of the donation which he
transmits to the donee thereby enlarging the donee's estate. This is in consonance with the
rule that a donor cannot lawfully convey what is not his property. In other words, a
donation of a parcel of land the dominical rights of which do not belong to the donor at the
time of the donation, is void. This holds true even if the subject of the donation is not the
land itself but the possessory and proprietary rights over said land.
In this case, although they allegedly declared Magsaysay Park as their own for taxation
purposes, the heirs of Cabalo Kusop did not have any transmissible proprietary rights over
the donated property at the time of the donation. In fact, with respect to Lot Y-2, they still
had to file a free patents application to obtain an original certificate of title thereon. This is
because Proclamation No. 2273 declaring as open to disposition under the provisions of the
Public Land Act some portions of the Magsaysay Park, is not an operative law which
automatically vests rights of ownership on the heirs of Cabalo Kusop over their claimed
parcels of land.

The import of said quoted proviso in a presidential proclamation is discussed in the

aforecited Republic v. Court of Appeals case which dealt with the validity of a donation by a
sales awardee of a parcel of land which was later reserved by presidential proclamation for
medical center site purposes. We held therein that where the land is withdrawn from the
public domain and declared as disposable by the Director of Lands under the Public Land
Act, the Sales Award covering the same confers on a sales awardee only a possessory and
not proprietary right over the land applied, for. The disposition of the land by the Director is
merely provisional as the applicant still has to comply with the requirements of the law
before any patent is issued. It is only after the compliance with such requirements that the
patent is issued and the land applied for considered permanently disposed of by the
Government.

The interpretation of said proviso should even be more stringent in this case considering
that with respect to Lot Y-1, the heirs of Cabalo Kusop do not appear to have taken even
the initial steps mandated by the Public Land Act for claimants of the land excluded from
the public domain. The alleged donation was therefore no more than an exercise in
futility.35 (Emphasis and underscoring supplied.)

For obvious reasons, respondents-intervenors should have, as early as 1990 when the
above Decision was promulgated, taken exception to its pronouncements if they rightfully
believed that the property covered by Proc. 168 (which included Lot X) rightfully belonged
to them. Yet they did not. Instead, after seven long years or in 1997, they filed their
applications for the issuance of miscellaneous sales patents over Lot X. This act of filing
applications for the issuance of miscellaneous sales patents in their name, taken in
conjunction with all the other attendant circumstances, constitutes an express
acknowledgment that the land does not belong to them, but to the State.

Neither may respondents-intervenors claim innocent mistake for all their missteps in
claiming the subject property as their own. The mistakes are simply too numerous, and
respondents-intervenors inaction since 1963 is too glaring. To repeat, their actions are
anathema to a claim of ownership. While it is true that possession since time immemorial
could result in the acquisition of title without need of judicial or other action, respondents-
intervenors actions and conduct, as shown above, not only negate the application of such
principle, but in fact point to the opposite.

The principle of estoppel "bars [one] from denying the truth of a fact which has, in the
contemplation of law, become settled by the acts and proceedings of judicial or legislative
officers or by the act of the party himself, either by conventional writing or by
representations, express or implied or in pais."36?r?l1

Besides, respondents-intervenors should not be allowed to trifle with the processes of the
State. They cannot resort to other remedies which are improper and do not provide for the
opportunity to prove their title, but instead require them to concede it before availment.

Contrary to the CAs pronouncements, proof or evidence of possession since time

immemorial becomes irrelevant and cannot support a claim of ownership or application for
a patent, not only because respondents-intervenors have conceded ownership to the State,
but also on account of the fact that Lot X has been withdrawn from being alienable and
disposable public land, and is now classified and being used as a national park. It has
ceased to be alienable, and no proof by the respondents-intervenors will operate to bolster
their claim; Lot X will never be awarded to them or to anybody so long as it is being used
as a public park or reserve.

The CA justifies that Proc. 2273 was issued on the assumption that respondents-
intervenors were about to donate Lot X to the city (General Santos City); thus, the
President has seen fit not to include it in the proclamation. This is specious. If the President
indeed knew of the intended donation, then it was all the more necessary for him to have
included Lot X in Proc. 2273 and withdrawn it from the coverage of Magsaysay Park; or else
the donation to the city would be null and void, for want of right to donate. Yet he did not.
Lot X was retained as part of the park reserve precisely because the respondents-
intervenors had no vested right to it. And, far from confirming ownership over Lot X, the
Republic is correct in the opinion that the miscellaneous sales patents amount to an
acknowledgment that respondents-intervenors rights are inferior, and cannot defeat
ownership over Lot X by the State.

Given the above pronouncements, the CAs ruling on other matters, as well as the
respondents arguments on specific points, become irrelevant and inapplicable, if not
necessarily invalidated.

Finally, as regards AFP-RSBS rights, the Court sustains the petitioners view that "any title
issued covering non-disposable lots even in the hands of an alleged innocent purchaser for
value shall be cancelled."37 We deem this case worthy of such principle. Besides, we cannot
ignore the basic principle that a spring cannot rise higher than its source; as successor-in-
interest, AFP-RSBS cannot acquire a better title than its predecessor, the herein
respondents-intervenors.38 Having acquired no title to the property in question, there is no
other recourse but for AFP-RSBS to surrender to the rightful ownership of the State.

WHEREFORE, premises considered, the Petition is GRANTED. The October 26, 2007
Decision of the Court of Appeals in CA-G.R. CV No. 75170 is ANNULLED and SET ASIDE.
The November 5, 2001 Decision of the Regional Trial Court, Branch 23 of General Santos
City in Civil Case No. 6419 is REINSTATED.

The Register of Deeds of General Santos City is ordered to CANCEL Transfer Certificates of
Title Nos. T-81051, T-81052, T-81053, T-81054, T-81055, T-81056, T-81057, T-81058, T-
81059, T-81060, T-81061, T-81062, T-81146, T-81147, T-81150, and T-81151, and ISSUE
in lieu thereof, new titles in the name of the Republic of the Philippines.

No costs.

SO ORDERED.

[G.R. No. 161656. June 29, 2005]

REPUBLIC OF THE PHILIPPINES, GENERAL

ROMEO ZULUETA, COMMODORE EDGARDO
GALEOS, ANTONIO CABALUNA, DOROTEO
MANTOS & FLORENCIO BELOTINDOS, petitioners,
vs. VICENTE G. LIM, respondent.
RESOLUTION
SANDOVAL-GUTIERREZ, J.:

Justice is the first virtue of social institutions.[1] When the state wields its power of eminent
domain, there arises a correlative obligation on its part to pay the owner of the expropriated
property a just compensation. If it fails, there is a clear case of injustice that must be redressed.
In the present case, fifty-seven (57) years have lapsed from the time the Decision in the subject
expropriation proceedings became final, but still the Republic of the Philippines, herein
petitioner, has not compensated the owner of the property. To tolerate such prolonged inaction
on its part is to encourage distrust and resentment among our people the very vices that corrode
the ties of civility and tempt men to act in ways they would otherwise shun.

A revisit of the pertinent facts in the instant case is imperative.

On September 5, 1938, the Republic of the Philippines (Republic) instituted a special civil action
for expropriation with the Court of First Instance (CFI) of Cebu, docketed as Civil Case No. 781,
involving Lots 932 and 939 of the Banilad Friar Land Estate, Lahug, Cebu City, for the purpose
of establishing a military reservation for the Philippine Army. Lot 932 was registered in the name
of Gervasia Denzon under Transfer Certificate of Title (TCT) No. 14921 with an area of 25,137
square meters, while Lot 939 was in the name of Eulalia Denzon and covered by TCT No.
12560 consisting of 13,164 square meters.

After depositing P9,500.00 with the Philippine National Bank, pursuant to the Order of the CFI
dated October 19, 1938, the Republic took possession of the lots. Thereafter, or on May 14,
1940, the CFI rendered its Decision ordering the Republic to pay the Denzons the sum
of P4,062.10 as just compensation.

The Denzons interposed an appeal to the Court of Appeals but it was dismissed on March 11,
1948. An entry of judgment was made on April 5, 1948.

In 1950, Jose Galeos, one of the heirs of the Denzons, filed with the National Airports
Corporation a claim for rentals for the two lots, but it denied knowledge of the matter. Another
heir, Nestor Belocura, brought the claim to the Office of then President Carlos Garcia who wrote
the Civil Aeronautics Administration and the Secretary of National Defense to expedite action on
said claim. On September 6, 1961, Lt. Manuel Cabal rejected the claim but expressed
willingness to pay the appraised value of the lots within a reasonable time.

For failure of the Republic to pay for the lots, on September 20, 1961, the Denzons successors-
in-interest, Francisca Galeos-Valdehueza and Josefina Galeos-Panerio,[2] filed with the
same CFI an action for recovery of possession with damages against the Republic and officers
of the Armed Forces of the Philippines in possession of the property. The case was docketed as
Civil Case No. R-7208.

In the interim or on November 9, 1961, TCT Nos. 23934 and 23935 covering Lots 932 and 939
were issued in the names of Francisca Valdehueza and Josefina Panerio, respectively.
Annotated thereon was the phrase subject to the priority of the National Airports Corporation to
acquire said parcels of land, Lots 932 and 939 upon previous payment of a reasonable market
value.

On July 31, 1962, the CFI promulgated its Decision in favor of Valdehueza and Panerio, holding
that they are the owners and have retained their right as such over Lots 932 and 939 because of
the Republics failure to pay the amount of P4,062.10, adjudged in the expropriation
proceedings. However, in view of the annotation on their land titles, they were ordered to
execute a deed of sale in favor of the Republic. In view of the differences in money value from
1940 up to the present, the court adjusted the market value at P16,248.40, to be paid with 6%
interest per annum from April 5, 1948, date of entry in the expropriation proceedings, until full
payment.

After their motion for reconsideration was denied, Valdehueza and Panerio appealed from the
CFI Decision, in view of the amount in controversy, directly to this Court. The case was
docketed as No. L-21032.[3] On May 19, 1966, this Court rendered its Decision affirming the CFI
Decision. It held that Valdehueza and Panerio are still the registered owners of Lots 932 and
939, there having been no payment of just compensation by the Republic. Apparently, this Court
found nothing in the records to show that the Republic paid the owners or their successors-in-
interest according to the CFI decision. While it deposited the amount of P9,500,00, and said
deposit was allegedly disbursed, however, the payees could not be ascertained.

Notwithstanding the above finding, this Court still ruled that Valdehueza and Panerio are not
entitled to recover possession of the lots but may only demand the payment of their fair market
value, ratiocinating as follows:

Appellants would contend that: (1) possession of Lots 932 and 939 should be restored to them as owners
of the same; (2) the Republic should be ordered to pay rentals for the use of said lots, plus attorneys fees;
and (3)the court a quo in the present suit had no power to fix the value of the lots and order the execution
of the deed of sale after payment.

It is true that plaintiffs are still the registered owners of the land, there not having been a transfer of said
lots in favor of the Government. The records do not show that the Government paid the owners or their
successors-in-interest according to the 1940 CFI decision although, as stated, P9,500.00 was deposited by
it, and said deposit had been disbursed. With the records lost, however, it cannot be known who received
the money (Exh. 14 says: It is further certified that the corresponding Vouchers and pertinent Journal and
Cash Book were destroyed during the last World War, and therefore the names of the payees concerned
cannot be ascertained.) And the Government now admits that there is no available record showing
that payment for the value of the lots in question has been made (Stipulation of Facts, par. 9, Rec. on
Appeal, p. 28).

The points in dispute are whether such payment can still be made and, if so, in what amount. Said
lots have been the subject of expropriation proceedings. By final and executory judgment in said
proceedings, they were condemned for public use, as part of an airport, and ordered sold to the
Government. In fact, the abovementioned title certificates secured by plaintiffs over said lots
contained annotations of the right of the National Airports Corporation (now CAA) to pay for and
acquire them. It follows that both by virtue of the judgment, long final, in the expropriation suit, as
well as the annotations upon their title certificates, plaintiffs are not entitled to recover possession
of their expropriated lots which are still devoted to the public use for which they were expropriated
but only to demand the fair market value of the same.

Meanwhile, in 1964, Valdehueza and Panerio mortgaged Lot 932 to Vicente Lim, herein
respondent,[4] as security for their loans. For their failure to pay Lim despite demand, he had the
mortgage foreclosed in 1976. Thus, TCT No. 23934 was cancelled, and in lieu thereof, TCT No.
63894 was issued in his name.

On August 20, 1992, respondent Lim filed a complaint for quieting of title with the Regional
Trial Court (RTC), Branch 10, Cebu City, against General Romeo Zulueta, as Commander of
the Armed Forces of the Philippines, Commodore Edgardo Galeos, as Commander of Naval
District V of the Philippine Navy, Antonio Cabaluna, Doroteo Mantos and Florencio Belotindos,
herein petitioners. Subsequently, he amended the complaint to implead the Republic.

On May 4, 2001, the RTC rendered a decision in favor of respondent, thus:

WHEREFORE, judgment is hereby rendered in favor of plaintiff Vicente Lim and against all defendants,
public and private, declaring plaintiff Vicente Lim the absolute and exclusive owner of Lot No. 932
with all the rights of an absolute owner including the right to possession. The monetary claims in the
complaint and in the counter claims contained in the answer of defendants are ordered Dismissed.

Petitioners elevated the case to the Court of Appeals, docketed therein as CA-G.R. CV No.
72915. In its Decision[5] dated September 18, 2003, the Appellate Court sustained the RTC
Decision, thus:

Obviously, defendant-appellant Republic evaded its duty of paying what was due to the landowners.
The expropriation proceedings had already become final in the late 1940s and yet, up to now, or
more than fifty (50) years after, the Republic had not yet paid the compensation fixed by the court
while continuously reaping benefits from the expropriated property to the prejudice of the
landowner. x x x. This is contrary to the rules of fair play because the concept of just compensation
embraces not only the correct determination of the amount to be paid to the owners of the land, but
also the payment for the land within a reasonable time from its taking. Without prompt payment,
compensation cannot be considered just for the property owner is made to suffer the consequence
of being immediately deprived of his land while being made to wait for a decade or more, in this
case more than 50 years, before actually receiving the amount necessary to cope with the loss. To
allow the taking of the landowners properties, and in the meantime leave them empty-handed by
withholding payment of compensation while the government speculates on whether or not it will
pursue expropriation, or worse, for government to subsequently decide to abandon the property
and return it to the landowners, is undoubtedly an oppressive exercise of eminent domain that must
never be sanctioned. (Land Bank of the Philippines vs. Court of Appeals, 258 SCRA 404).

xxxxxx

An action to quiet title is a common law remedy for the removal of any cloud or doubt or uncertainty on
the title to real property. It is essential for the plaintiff or complainant to have a legal or equitable title or
interest in the real property, which is the subject matter of the action. Also the deed, claim, encumbrance
or proceeding that is being alleged as cloud on plaintiffs title must be shown to be in fact invalid or
inoperative despite its prima facie appearance of validity or legal efficacy (Robles vs. Court of Appeals,
328 SCRA 97). In view of the foregoing discussion, clearly, the claim of defendant-appellant
Republic constitutes a cloud, doubt or uncertainty on the title of plaintiff-appellee Vicente Lim that
can be removed by an action to quiet title.

WHEREFORE, in view of the foregoing, and finding no reversible error in the appealed May 4, 2001
Decision of Branch 9, Regional Trial Court of Cebu City, in Civil Case No. CEB-12701, the said decision
is UPHELD AND AFFIRMED. Accordingly, the appeal is DISMISSED for lack of merit.

Undaunted, petitioners, through the Office of the Solicitor General, filed with this Court a petition
for review on certiorari alleging that the Republic has remained the owner of Lot 932 as held by
this Court in Valdehueza vs. Republic.[6]

In our Resolution dated March 1, 2004, we denied the petition outright on the ground that the
Court of Appeals did not commit a reversible error. Petitioners filed an urgent motion for
reconsideration but we denied the same with finality in our Resolution of May 17, 2004.
On May 18, 2004, respondent filed an ex-parte motion for the issuance of an entry of judgment.
We only noted the motion in our Resolution of July 12, 2004.

On July 7, 2004, petitioners filed an urgent plea/motion for clarification, which is actually
a second motion for reconsideration. Thus, in our Resolution of September 6, 2004, we
simply noted without action the motion considering that the instant petition was already
denied with finalityin our Resolution of May 17, 2004.

On October 29, 2004, petitioners filed a very urgent motion for leave to file a motion for
reconsideration of our Resolution dated September 6, 2004 (with prayer to refer the case to
the En Banc). They maintain that the Republics right of ownership has been settled
in Valdehueza.

The basic issue for our resolution is whether the Republic has retained ownership of Lot 932
despite its failure to pay respondents predecessors-in-interest the just compensation therefor
pursuant to the judgment of the CFI rendered as early as May 14, 1940.

Initially, we must rule on the procedural obstacle.

While we commend the Republic for the zeal with which it pursues the present case, we
reiterate that its urgent motion for clarification filed on July 7, 2004 is actually a second motion
for reconsideration. This motion is prohibited under Section 2, Rule 52, of the 1997 Rules of
Civil Procedure, as amended, which provides:

Sec. 2. Second motion for reconsideration. No second motion for reconsideration of a judgment or final
resolution by the same party shall be entertained.

Consequently, as mentioned earlier, we simply noted without action the motion since petitioners
petition was already denied with finality.

Considering the Republics urgent and serious insistence that it is still the owner of Lot 932 and
in the interest of justice, we take another hard look at the controversial issue in order to
determine the veracity of petitioners stance.

One of the basic principles enshrined in our Constitution is that no person shall be deprived of
his private property without due process of law; and in expropriation cases, an essential element
of due process is that there must be just compensation whenever private property is taken for
public use.[7] Accordingly, Section 9, Article III, of our Constitution mandates: Private property
shall not be taken for public use without just compensation.

The Republic disregarded the foregoing provision when it failed and refused to pay respondents
predecessors-in-interest the just compensation for Lots 932 and 939. The length of time and the
manner with which it evaded payment demonstrate its arbitrary high-handedness and
confiscatory attitude. The final judgment in the expropriation proceedings (Civil Case No. 781)
was entered on April 5, 1948. More than half of a century has passed, yet, to this day, the
landowner, now respondent, has remained empty-handed. Undoubtedly, over 50 years of
delayed payment cannot, in any way, be viewed as fair. This is more so when such delay is
accompanied by bureaucratic hassles. Apparent from Valdehueza is the fact that respondents
predecessors-in-interest were given a run around by the Republics officials and agents. In 1950,
despite the benefits it derived from the use of the two lots, the National Airports
Corporation denied knowledge of the claim of respondents predecessors-in-interest. Even
President Garcia, who sent a letter to the Civil Aeronautics Administration and the Secretary of
National Defense to expedite the payment, failed in granting relief to them. And, on September
6, 1961, while the Chief of Staff of the Armed Forces expressed willingness to pay the appraised
value of the lots, nothing happened.

The Court of Appeals is correct in saying that Republics delay is contrary to the rules of fair play,
as just compensation embraces not only the correct determination of the amount to be
paid to the owners of the land, but also the payment for the land within a reasonable time
from its taking. Without prompt payment, compensation cannot be considered just. In
jurisdictions similar to ours, where an entry to the expropriated property precedes the payment
of compensation, it has been held that if the compensation is not paid in a reasonable time, the
party may be treated as a trespasser ab initio.[8]

Corollarily, in Provincial Government of Sorsogon vs. Vda. De Villaroya,[9] similar to the present
case, this Court expressed its disgust over the governments vexatious delay in the payment of
just compensation, thus:

The petitioners have been waiting for more than thirty years to be paid for their land which was
taken for use as a public high school. As a matter of fair procedure, it is the duty of the Government,
whenever it takes property from private persons against their will, to supply all required documentation
and facilitate payment of just compensation. The imposition of unreasonable requirements and
vexatious delays before effecting payment is not only galling and arbitrary but a rich source of
discontent with government. There should be some kind of swift and effective recourse against
unfeeling and uncaring acts of middle or lower level bureaucrats.

We feel the same way in the instant case.

More than anything else, however, it is the obstinacy of the Republic that prompted us to
dismiss its petition outright. As early as May 19, 1966, in Valdehueza, this Court mandated the
Republic to pay respondents predecessors-in-interest the sum of P16,248.40 as reasonable
market value of the two lots in question. Unfortunately, it did not comply and allowed several
decades to pass without obeying this Courts mandate. Such prolonged obstinacy bespeaks of
lack of respect to private rights and to the rule of law, which we cannot countenance. It is
tantamount to confiscation of private property. While it is true that all private properties are
subject to the need of government, and the government may take them whenever the necessity
or the exigency of the occasion demands, however, the Constitution guarantees that when this
governmental right of expropriation is exercised, it shall be attended by compensation.[10] From
the taking of private property by the government under the power of eminent domain, there
arises an implied promise to compensate the owner for his loss. [11]

Significantly, the above-mentioned provision of Section 9, Article III of the Constitution is not a
grant but a limitation of power. This limiting function is in keeping with the philosophy of the Bill
of Rights against the arbitrary exercise of governmental powers to the detriment of the
individuals rights. Given this function, the provision should therefore be strictly interpreted
against the expropriator, the government, and liberally in favor of the property owner.[12]

Ironically, in opposing respondents claim, the Republic is invoking this Courts Decision
in Valdehueza, a Decision it utterly defied. How could the Republic acquire ownership over Lot
932 when it has not paid its owner the just compensation, required by law, for more than 50
years? The recognized rule is that title to the property expropriated shall pass from the owner to
the expropriator only upon full payment of the just compensation. Jurisprudence on this
settled principle is consistent both here and in other democratic jurisdictions. In Association of
Small Landowners in the Philippines, Inc. et al., vs. Secretary of Agrarian Reform,[13] thus:

Title to property which is the subject of condemnation proceedings does not vest the condemnor
until the judgment fixing just compensation is entered and paid, but the condemnors title relates back
to the date on which the petition under the Eminent Domain Act, or the commissioners report under the
Local Improvement Act, is filed.

x x x Although the right to appropriate and use land taken for a canal is complete at the time of
entry, title to the property taken remains in the owner until payment is actually made. (Emphasis
supplied.)

In Kennedy v. Indianapolis, the US Supreme Court cited several cases holding that title to property does
not pass to the condemnor until just compensation had actually been made. In fact, the decisions appear to
be uniform to this effect. As early as 1838, in Rubottom v. McLure, it was held that actual payment to
the owner of the condemned property was a condition precedent to the investment of the title to the
property in the State albeit not to the appropriation of it to public use. In Rexford v. Knight, the Court
of Appeals of New York said that the construction upon the statutes was that the fee did not vest in the
State until the payment of the compensation although the authority to enter upon and appropriate the land
was complete prior to the payment. Kennedy further said that both on principle and authority the rule
is . . . that the right to enter on and use the property is complete, as soon as the property is actually
appropriated under the authority of law for a public use, but that the title does not pass from the
owner without his consent, until just compensation has been made to him.

Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, that:

If the laws which we have exhibited or cited in the preceding discussion are attentively examined it
will be apparent that the method of expropriation adopted in this jurisdiction is such as to afford
absolute reassurance that no piece of land can be finally and irrevocably taken from an unwilling
owner until compensation is paid...(Emphasis supplied.)

Clearly, without full payment of just compensation, there can be no transfer of title from the
landowner to the expropriator. Otherwise stated, the Republics acquisition of ownership is
conditioned upon the full payment of just compensation within a reasonable time. [14]
Significantly, in Municipality of Bian v. Garcia[15] this Court ruled that the expropriation of lands
consists of two stages, to wit:

x x x The first is concerned with the determination of the authority of the plaintiff to exercise the power of
eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends
with an order, if not of dismissal of the action, of condemnation declaring that the plaintiff has a lawful
right to take the property sought to be condemned, for the public use or purpose described in the
complaint, upon the payment of just compensation to be determined as of the date of the filing of the
complaint x x x.

The second phase of the eminent domain action is concerned with the determination by the court of the
just compensation for the property sought to be taken. This is done by the court with the assistance of not
more than three (3) commissioners. x x x.

It is only upon the completion of these two stages that expropriation is said to have been
completed. In Republic v. Salem Investment Corporation,[16] we ruled that, the process is not
completed until payment of just compensation. Thus, here, the failure of the Republic to pay
respondent and his predecessors-in-interest for a period of 57 years rendered the expropriation
process incomplete.

The Republic now argues that under Valdehueza, respondent is not entitled to recover
possession of Lot 932 but only to demand payment of its fair market value. Of course, we are
aware of the doctrine that non-payment of just compensation (in an expropriation proceedings)
does not entitle the private landowners to recover possession of the expropriated lots. This is
our ruling in the recent cases of Republic of the Philippines vs. Court of Appeals, et
al.,[17] and Reyes vs. National Housing Authority.[18] However, the facts of the present case do
not justify its application. It bears stressing that the Republic was ordered to pay just
compensation twice, the first was in the expropriation proceedings and the second,
in Valdehueza. Fifty-seven (57) years have passed since then. We cannot but construe the
Republics failure to pay just compensation as a deliberate refusal on its part. Under such
circumstance, recovery of possession is in order. In several jurisdictions, the courts held that
recovery of possession may be had when property has been wrongfully taken or is wrongfully
retained by one claiming to act under the power of eminent domain [19] or where a rightful
entry is made and the party condemning refuses to pay the compensation which has
been assessed or agreed upon;[20] or fails or refuses to have the compensation assessed and
paid.[21]

The Republic also contends that where there have been constructions being used by the
military, as in this case, public interest demands that the present suit should not be sustained.

It must be emphasized that an individual cannot be deprived of his property for the public
convenience.[22] In Association of Small Landowners in the Philippines, Inc. vs. Secretary of
Agrarian Reform,[23] we ruled:
One of the basic principles of the democratic system is that where the rights of the individual are
concerned, the end does not justify the means. It is not enough that there be a valid objective; it is also
necessary that the means employed to pursue it be in keeping with the Constitution. Mere expediency will
not excuse constitutional shortcuts. There is no question that not even the strongest moral conviction
or the most urgent public need, subject only to a few notable exceptions, will excuse the bypassing
of an individual's rights. It is no exaggeration to say that a person invoking a right guaranteed
under Article III of the Constitution is a majority of one even as against the rest of the nation who
would deny him that right.

The right covers the persons life, his liberty and his property under Section 1 of Article III of the
Constitution. With regard to his property, the owner enjoys the added protection of Section 9,
which reaffirms the familiar rule that private property shall not be taken for public use without
just compensation.

The Republics assertion that the defense of the State will be in grave danger if we shall order
the reversion of Lot 932 to respondent is an overstatement. First, Lot 932 had ceased to operate
as an airport. What remains in the site is just the National Historical Institutes marking stating
that Lot 932 is the former location of Lahug Airport. And second, there are only thirteen (13)
structures located on Lot 932, eight (8) of which are residence apartments of military
personnel. Only two (2) buildings are actually used as training centers. Thus, practically
speaking, the reversion of Lot 932 to respondent will only affect a handful of military personnel.
It will not result to irreparable damage or damage beyond pecuniary estimation, as what the
Republic vehemently claims.

We thus rule that the special circumstances prevailing in this case entitle respondent to recover
possession of the expropriated lot from the Republic. Unless this form of swift and effective relief
is granted to him, the grave injustice committed against his predecessors-in-interest, though no
fault or negligence on their part, will be perpetuated. Let this case, therefore, serve as a wake-
up call to the Republic that in the exercise of its power of eminent domain, necessarily in
derogation of private rights, it must comply with the Constitutional limitations. This Court, as the
guardian of the peoples right, will not stand still in the face of the Republics oppressive and
confiscatory taking of private property, as in this case.

At this point, it may be argued that respondent Vicente Lim acted in bad faith in entering into a
contract of mortgage with Valdehueza and Panerio despite the clear annotation in TCT No.
23934 that Lot 932 is subject to the priority of the National Airports Corporation [to
acquire said parcels of land] x x x upon previous payment of a reasonable market value.

The issue of whether or not respondent acted in bad faith is immaterial considering that the
Republic did not complete the expropriation process. In short, it failed to perfect its title over Lot
932 by its failure to pay just compensation. The issue of bad faith would have assumed
relevance if the Republic actually acquired title over Lot 932. In such a case, even if
respondents title was registered first, it would be the Republics title or right of ownership that
shall be upheld. But now, assuming that respondent was in bad faith, can such fact vest
upon the Republic a better title over Lot 932? We believe not. This is because in the first
place, the Republic has no title to speak of.
At any rate, assuming that respondent had indeed knowledge of the annotation, still nothing
would have prevented him from entering into a mortgage contract involving Lot 932 while the
expropriation proceeding was pending. Any person who deals with a property subject of an
expropriation does so at his own risk, taking into account the ultimate possibility of losing the
property in favor of the government. Here, the annotation merely served as a caveat that the
Republic had a preferential right to acquire Lot 932 upon its payment of a reasonable
market value. It did not proscribe Valdehueza and Panerio from exercising their rights of
ownership including their right to mortgage or even to dispose of their property. In Republic vs.
Salem Investment Corporation,[24] we recognized the owners absolute right over his property
pending completion of the expropriation proceeding, thus:

It is only upon the completion of these two stages that expropriation is said to have been completed.
Moreover, it is only upon payment of just compensation that title over the property passes to the
government. Therefore, until the action for expropriation has been completed and terminated, ownership
over the property being expropriated remains with the registered owner. Consequently, the latter can
exercise all rightspertaining to an owner, including the right to dispose of his property subject to
the power of the State ultimately to acquire it through expropriation.

It bears emphasis that when Valdehueza and Panerio mortgaged Lot 932 to respondent in
1964, they were still the owners thereof and their title had not yet passed to the petitioner
Republic. In fact, it never did. Such title or ownership was rendered conclusive when we
categorically ruled in Valdehueza that: It is true that plaintiffs are still the registered owners
of the land, there not having been a transfer of said lots in favor of the Government.

For respondents part, it is reasonable to conclude that he entered into the contract of mortgage
with Valdehueza and Panerio fully aware of the extent of his right as a mortgagee. A mortgage
is merely an accessory contract intended to secure the performance of the principal obligation.
One of its characteristics is that it is inseparable from the property. It adheres to the property
regardless of who its owner may subsequently be.[25] Respondent must have known that even if
Lot 932 is ultimately expropriated by the Republic, still, his right as a mortgagee is protected. In
this regard, Article 2127 of the Civil Code provides:

Art. 2127. The mortgage extends to the natural accessions, to the improvements, growing fruits, and the
rents or income not yet received when the obligation becomes due, and to the amount of the indemnity
granted or owing to the proprietor from the insurers of the property mortgaged, or in virtue of
expropriation for public use, with the declarations, amplifications, and limitations established by
law, whether the estate remains in the possession of the mortgagor or it passes in the hands of a
third person.

In summation, while the prevailing doctrine is that the non-payment of just compensation does
not entitle the private landowner to recover possession of the expropriated lots, [26] however, in
cases where the government failed to pay just compensation within five (5)[27] years from the
finality of the judgment in the expropriation proceedings, the owners concerned shall have
the right to recover possession of their property. This is in consonance with the principle that the
government cannot keep the property and dishonor the judgment. [28] To be sure, the five-year
period limitation will encourage the government to pay just compensation punctually. This is in
keeping with justice and equity. After all, it is the duty of the government, whenever it takes
property from private persons against their will, to facilitate the payment of just compensation.
In Cosculluela v. Court of Appeals,[29] we defined just compensation as not only the correct
determination of the amount to be paid to the property owner but also the payment of the
property within a reasonable time. Without prompt payment, compensation cannot be
considered just.

WHEREFORE, the assailed Decision of the Court of Appeals in CA-G.R. CV No. 72915 is
AFFIRMED in toto.

The Republics motion for reconsideration of our Resolution dated March 1, 2004 is DENIEDwith
FINALITY. No further pleadings will be allowed.

Let an entry of judgment be made in this case.

SO ORDERED.

[G.R. No. 98045. June 26, 1996]

DESAMPARADO VDA. DE NAZARENO and LETICIA

NAZARENO TAPIA, petitioners, vs. THE COURT OF
APPEALS, MR. & MRS. JOSE SALASALAN, MR. &
MRS. LEO RABAYA, AVELINO LABIS, HON.
ROBERTO G. HILARIO, ROLLEO I. IGNACIO,
 ALBERTO M. GILLERA and HON. ABELARDO G.
PALAD, JR., in their official and/or private
capacities, respondents.
SYLLABUS

1. CIVIL LAW; OWNERSHIP; RIGHTS OF ACCESSION WITH RESPECT TO

IMMOVABLE PROPERTY; ARTICLE 457; REQUISITES.- In the case of Meneses vs.
CA, this Court held that accretion, as a mode of acquiring property under Art. 457 of the
Civil Code, requires the concurrence of these requisites: (1) that the deposition of soil or
sediment be gradual and imperceptible; (2) that it be the result of the action of the waters
of the river (or sea); and (3) that the land where accretion takes place is adjacent to the
banks of rivers (or the sea coast). These are called the rules on alluvion which if present in
a case, give to the owners of lands adjoining the banks of rivers or streams any accretion
gradually received from the effects of the current of waters.

2. ID.; ID.; ID.; ID.; ID.; NOT PRESENT IN CASE AT BAR.- Where the accretion was
formed by the dumping of boulders, soil and other filling materials on portions of the
Balacanas Creek and the Cagayan River bounding petitioner's land, it cannot be claimed
that the accumulation was gradual and imperceptible, resulting from the action of the
waters or the current of the creek and the river.In Hilario vs. City of Manila, this Court held
that the word current indicates the participation of the body of water in the ebb and flow of
waters due to high and low tide. Not having met the first and second requirements of the
rules of alluvion, petitioners cannot claim the rights of a riparian owner.

3. ID.; ID.; ID.; ID.; ID.; THAT DEPOSIT IS DUE TO THE CURRENT OF THE RIVER,
MANDATORY.- In Republic vs. CA, this Court ruled that the requirement that the deposit
should be due to the effect of the current of the river is indispensable. This excludes
from Art. 457 of the Civil Code all deposits caused by human intervention. Putting it
differently, alluvion must be the exclusive work of nature. Thus, in Tiongco vs. Director of
Lands, et al., where the land was not formed solely by the natural effect of the water
current of the river bordering said land but is also the consequence of the direct and
deliberate intervention of man, it was deemed a man-made accretion and, as such, part of
the public domain. In the case at bar, the subject land was the direct result of the dumping
of sawdust by the Sun Valley Lumber Co. consequent to its sawmill operations.

4. ID.; PUBLIC LANDS; FINDINGS AS SUCH BY THE BUREAU OF LANDS,

RESPECTED.- The mere filing of the Miscellaneous Sales Application constituted an
admission that the land being applied for was public land, having been the subject of a
Survey Plan wherein said land was described as an orchard. Furthermore, the Bureau of
Lands classified the subject land as an accretion area which was formed by deposits of
sawdust in the Balacanas Creek and the Cagayan river, in accordance with the ocular
inspection conducted by the Bureau of Lands. This Court has often enough held that
findings of administrative agencies which have acquired expertise because their
jurisdiction is confined to specific matters are generally accorded not only respect but even
 finality.Again, when said factual findings are affirmed by the Court of Appeals, the same
are conclusive on the parties and not reviewable by this Court.

5. ID.; PUBLIC LAND LAW; JURISDICTION OVER PUBLIC LANDS.- Having determined
that the subject land is public land, a fortiori, the Bureau of Lands, as well as the Office of
the Secretary of Agriculture and Natural Resources have jurisdiction over the same in
accordance with the Public Land Law. Under Sections 3 and 4 thereof, the Director of
Lands has jurisdiction, authority and control over public lands. Here respondent Palad as
Director of Lands, is authorized to exercise executive control over any form of concession,
disposition and management of the lands of the public domain. He may issue decisions
and orders as he may see fit under the circumstances as long as they are based on the
findings of fact. In the case of Calibo vs. Ballesteros, this Court held that where, in the
disposition of public lands, the Director of Lands bases his decision on the evidence thus
presented, he clearly acts within his jurisdiction, and if he errs in appraising the evidence,
the error is one of judgment, but not an act of grave abuse of discretion annullable by
certiorari.

6. ADMINISTRATIVE LAW; ADMINISTRATIVE REMEDIES; EXHAUSTED IN CASE AT

BAR.- The administrative remedies have been exhausted. Petitioners could not have
intended to appeal to respondent Ignacio as an Officer-In-Charge of the Bureau of
Lands. The decision being appealed from was the decision of respondent Hilario who was
the Regional Director of the Bureau of Lands.Said decision was made "for and by authority
of the Director of Lands." It would be incongruous to appeal the decision of the Regional
Director of the Bureau of Lands acting for the Director of the Bureau of Lands to an Officer-
In-Charge of the Bureau of Lands. In any case, respondent Ignacio's official designation
was "Undersecretary of the Department of Agriculture and Natural Resources." He was
only an "Officer-In-Charge" of the Bureau of Lands. When he acted on the late Antonio
Nazareno's motion for reconsideration by affirming or adopting respondent Hilario's
decision, he was acting on said motion as an Undersecretary on behalf of the Secretary of
the Department. In the case of Hamoy vs. Secretary of Agriculture and Natural
Resources, this Court held that the Undersecretary of Agriculture and Natural Resources
may modify, adopt, or set aside the orders or decisions of the Director of Lands with
respect to questions involving public lands under the administration and control of the
Bureau of Lands and the Department of Agriculture and Natural Resources. He cannot,
therefore, be said to have acted beyond the bounds of his jurisdiction under Sections 3, 4
and 5 of Commonwealth Act No. 141.

APPEARANCES OF COUNSEL

Manolo L. Tagarda, Sr. for petitioners.

Arturo R. Legaspi for private respondents.
DECISION

ROMERO, J.:
Petitioners Desamparado Vda. de Nazareno and Leticia Nazareno Tapia challenge the decision
of the Court of Appeals which affirmed the dismissal of petitioners' complaint by the Regional
Trial Court of Misamis Oriental, Branch 22. The complaint was for annulment of the verification,
report and recommendation, decision and order of the Bureau of Lands regarding a parcel of
public land.

The only issue involved in this petition is whether or not petitioners exhausted administrative
remedies before having recourse to the courts.

The subject of this controversy is a parcel of land situated in Telegrapo, Puntod, Cagayan de
Oro City. Said land was formed as a result of sawdust dumped into the dried-up Balacanas
Creek and along the banks of the Cagayan river.

Sometime in 1979, private respondents Jose Salasalan and Leo Rabaya leased the subject lots
on which their houses stood from one Antonio Nazareno, petitioners' predecessor-in-interest. In
the latter part of 1982, private respondents allegedly stopped paying rentals. As a result,
Antonio Nazareno and petitioners filed a case for ejectment with the Municipal Trial Court of
Cagayan de Oro City, Branch 4. A decision was rendered against private respondents, which
decision was affirmed by the Regional Trial Court of Misamis Oriental, Branch 20.

The case was remanded to the municipal trial court for execution of judgment after the same
became final and executory. Private respondents filed a case for annulment of judgment before
the Regional Trial Court of Misamis Oriental, Branch 24 which dismissed the same. Antonio
Nazareno and petitioners again moved for execution of judgment but private respondents filed
another case for certiorari with prayer for restraining order and/or writ of preliminary injunction
with the Regional Trial Court of Misamis Oriental, Branch 25 which was likewise dismissed. The
decision of the lower court was finally enforced with the private respondents being ejected from
portions of the subject lots they occupied.

Before he died, Antonio Nazareno caused the approval by the Bureau of Lands of the survey
plan designated as Plan Csd-106-00571 with a view to perfecting his title over the accretion
area being claimed by him. Before the approved survey plan could be released to the applicant,
however, it was protested by private respondents before the Bureau of Lands.

In compliance with the order of respondent District Land Officer Alberto M. Gillera, respondent
Land Investigator Avelino G. Labis conducted an investigation and rendered a report to the
Regional Director recommending that Survey Plan No. MSI-10-06-000571-D (equivalent to Lot
No. 36302, Cad. 237) in the name of Antonio Nazareno, be cancelled and that private
respondents be directed to file appropriate public land applications.

Based on said report, respondent Regional Director of the Bureau of Lands Roberto Hilario
rendered a decision ordering the amendment of the survey plan in the name of Antonio
Nazareno by segregating therefrom the areas occupied by the private respondents who, if
qualified, may file public land applications covering their respective portions.

Antonio Nazareno filed a motion for reconsideration with respondent Rolleo Ignacio,
Undersecretary of the Department of Natural Resources and Officer-in-Charge of the Bureau of
Lands who denied the motion. Respondent Director of Lands Abelardo Palad then ordered him
to vacate the portions adjudicated to private respondents and remove whatever improvements
they have introduced thereon. He also ordered that private respondents be placed in possession
thereof.

Upon the denial of the late Antonio Nazareno's motion for reconsideration, petitioners
Desamparado Vda. de Nazareno and Leticia Tapia Nazareno, filed a case before the RTC,
Branch 22 for annulment of the following: order of investigation by respondent Gillera, report
and recommendation by respondent Labis, decision by respondent Hilario, order by respondent
Ignacio affirming the decision of respondent Hilario and order of execution by respondent
Palad. The RTC dismissed the complaint for failure to exhaust administrative remedies which
resulted in the finality of the administrative decision of the Bureau of Lands.

On appeal, the Court of Appeals affirmed the decision of the RTC dismissing the
complaint. Applying Section 4 of C.A. No. 141, as amended, it contended that the approval of
the survey plan belongs exclusively to the Director of Lands. Hence, factual findings made by
the Metropolitan Trial Court respecting the subject land cannot be held to be controlling as the
preparation and approval of said survey plans belong to the Director of Lands and the same
shall be conclusive when approved by the Secretary of Agriculture and Natural Resources. [1]

Furthermore, the appellate court contended that the motion for reconsideration filed by Antonio
Nazareno cannot be considered as an appeal to the Office of the Secretary of Agriculture and
Natural Resources, as mandated by C.A. No. 141 inasmuch as the same had been acted upon
by respondent Undersecretary Ignacio in his capacity as Officer-in-Charge of the Bureau of
Lands and not as Undersecretary acting for the Secretary of Agriculture and Natural
Resources. For the failure of Antonio Nazareno to appeal to the Secretary of Agriculture and
Natural Resources, the present case does not fall within the exception to the doctrine of
exhaustion of administrative remedies. It also held that there was no showing of oppressiveness
in the manner in which the orders were issued and executed.

Hence, this petition.

Petitioners assign the following errors:

I. PUBLIC RESPONDENT COURT OF APPEALS IN A WHIMSICAL,

ARBITRARY AND CAPRICIOUS MANNER AFFIRMED THE
DECISION OF THE LOWER COURT WHICH IS CONTRARY TO THE
PREVAILING FACTS AND THE LAW ON THE MATTER;
II. PUBLIC RESPONDENT COURT OF APPEALS IN A WHIMSICAL,
ARBITRARY AND CAPRICIOUS MANNER AFFIRMED THE
DECISION OF THE LOWER COURT DISMISSING THE ORIGINAL
CASE WHICH FAILED TO CONSIDER THAT THE EXECUTION
ORDER OF PUBLIC RESPONDENT ABELARDO G. PALAD, JR.,
DIRECTOR OF LANDS, MANILA, PRACTICALLY CHANGED THE
 DECISION OF PUBLIC RESPONDENT ROBERTO HILARIO,
REGIONAL DIRECTOR, BUREAU OF LANDS, REGION 10, THUS
MAKING THE CASE PROPER SUBJECT FOR ANNULMENT WELL
WITHIN THE JURISDICTION OF THE LOWER COURT.
The resolution of the above issues, however, hinges on the question of whether or not the
subject land is public land. Petitioners claim that the subject land is private land being an
accretion to his titled property, applying Article 457 of the Civil Code which provides:

"To the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive
from the effects of the current of the waters."

In the case of Meneses v. CA,[2] this Court held that accretion, as a mode of acquiring property
under Art. 457 of the Civil Code, requires the concurrence of these requisites: (1) that the
deposition of soil or sediment be gradual and imperceptible; (2) that it be the result of the action
of the waters of the river (or sea); and (3) that the land where accretion takes place is adjacent
to the banks or rivers (or the sea coast). These are called the rules on alluvion which if present
in a case, give to the owners of lands adjoining the banks of rivers or streams any accretion
gradually received from the effects of the current of waters.

For petitioners to insist on the application of these rules on alluvion to their case, the above-
mentioned requisites must be present. However, they admit that the accretion was formed by
the dumping of boulders, soil and other filling materials on portions of the Balacanas Creek and
the Cagayan River bounding their land.[3] It cannot be claimed, therefore, that the accumulation
of such boulders, soil and other filling materials was gradual and imperceptible, resulting from
the action of the waters or the current of the Balacanas Creek and the Cagayan River. In Hilario
v. City of Manila,[4]this Court held that the word "current" indicates the participation of the body
of water in the ebb and flow of waters due to high and low tide. Petitioners' submission not
having met the first and second requirements of the rules on alluvion, they cannot claim the
rights of a riparian owner.

In any case, this court agrees with private respondents that petitioners are estopped from
denying the public character of the subject land, as well as the jurisdiction of the Bureau of
Lands when the late Antonio Nazareno filed his Miscellaneous Sales Application MSA (G-6)
571.[5] The mere filing of said Application constituted an admission that the land being applied
for was public land, having been the subject of Survey Plan No. MSI-10-06-000571-D
(Equivalent to Lot No. 36302, Cad-237) which was conducted as a consequence of Antonio
Nazareno's Miscellaneous Sales Application wherein said land was described as an
orchard. Said description by Antonio Nazareno was, however, controverted by respondent Labis
in his investigation report to respondent Hilario based on the findings of his ocular inspection
that said land actually covers a dry portion of Balacanas Creek and a swampy portion of
Cagayan River. The investigation report also states that except for the swampy portion which is
fully planted to nipa palms, the whole area is fully occupied by a part of a big concrete bodega of
petitioners and several residential houses made of light materials, including those of private
respondents which were erected by themselves sometime in the early part of 1978. [6]
Furthermore, the Bureau of Lands classified the subject land as an accretion area which was
formed by deposits of sawdust in the Balacanas Creek and the Cagayan river, in accordance
with the ocular inspection conducted by the Bureau of Lands. [7] This Court has often enough
held that findings of administrative agencies which have acquired expertise because their
jurisdiction is confined to specific matters are generally accorded not only respect but even
finality.[8] Again, when said factual findings are affirmed by the Court of Appeals, the same are
conclusive on the parties and not reviewable by this Court.[9]

It is this Court's irresistible conclusion, therefore, that the accretion was man-made or
artificial. In Republic v. CA,[10] this Court ruled that the requirement that the deposit should be
due to the effect of the current of the river is indispensable. This excludes from Art. 457 of the
Civil Code all deposits caused by human intervention. Putting it differently, alluvion must be the
exclusive work of nature.Thus, in Tiongco v. Director of Lands, et al.,[11] where the land was not
formed solely by the natural effect of the water current of the river bordering said land but is also
the consequence of the direct and deliberate intervention of man, it was deemed a man-made
accretion and, as such, part of the public domain.

In the case at bar, the subject land was the direct result of the dumping of sawdust by the Sun
Valley Lumber Co. consequent to its sawmill operations.[12] Even if this Court were to take into
consideration petitioners' submission that the accretion site was the result of the late Antonio
Nazareno's labor consisting in the dumping of boulders, soil and other filling materials into the
Balacanas Creek and Cagayan River bounding his land, [13] the same would still be part of the
public domain.

Having determined that the subject land is public land, a fortiori, the Bureau of Lands, as well as
the Office of the Secretary of Agriculture and Natural Resources have Jurisdiction over the
same in accordance with the Public Land Law. Accordingly, the court a quo dismissed
petitioners' complaint for non-exhaustion of administrative remedies which ruling the Court of
Appeals affirmed.

However, this Court agrees with petitioners that administrative remedies have been
exhausted. Petitioners could not have intended to appeal to respondent Ignacio as an Officer-in-
Charge of the Bureau of Lands. The decision being appealed from was the decision of
respondent Hilario who was the Regional Director of The Bureau of Lands. Said decision was
made "for and by authority of the Director of Lands."[14] It would be incongruous to appeal the
decision of the Regional Director of the Bureau of Lands acting for the Director of the Bureau of
Lands to an Officer-In-Charge of the Bureau of Lands.

In any case, respondent Rolleo Ignacio's official designation was "Undersecretary of the
Department of Agriculture and Natural Resources." He was only an "Officer-In-Charge" of the
Bureau of Lands. When he acted on the late Antonio Nazareno's motion for reconsideration by
affirming or adopting respondent's Hilario's decision, he was acting on said motion as an
Undersecretary on behalf of the Secretary of the Department. In the case of Hamoy v. Secretary
of Agriculture and Natural Resources,[15] This Court held that the Undersecretary of Agriculture
and Natural Resources may modify, adopt, or set aside the orders or decisions of the Director of
Lands with respect to questions involving public lands under the administration and control of
the Bureau of Lands and the Department of Agriculture and Natural Resources. He cannot
therefore, be said to have acted beyond the bounds of his jurisdiction under Sections 3, 4 and 5
of Commonwealth Act No. 141.[16]

As borne out by the administrative findings, the controverted land is public land, being an
artificial accretion of sawdust. As such, the Director of Lands has jurisdiction, authority and
control over the same, as mandated under Sections 3 and 4 of the Public Land Law (C.A. No.
141) which states, thus:

"Sec. 3. The Secretary of Agriculture and Natural Resources shall be the exclusive officer charged with
carrying out the provisions of this Act through the Director of Lands who shall act under his immediate
control.

Sec. 4. Subject to said control, the Director of Lands shall have direct executive control of the survey,
classification, lease, sale or any other form of concession or disposition and management of the lands of
the public domain, and his decisions as to questions of fact shall be conclusive when approved by the
Secretary of Agriculture and Natural Resources."

In connection with the second issue, petitioners ascribe whim, arbitrariness or capriciousness in
the execution order of public respondent Abelardo G. Palad, the Director of Lands. This Court
finds otherwise since said decision was based on the conclusive finding that the subject land
was public land. Thus, this Court agrees with the Court of Appeals that the Director of Lands
acted within his rights when he issued the assailed execution order, as mandated by the
aforecited provisions.

Petitioners' allegation that respondent Palad's execution order directing them to vacate the
subject land practically changed respondent Hilario's decision is baseless. It is incorrect for
petitioners to assume that respondent Palad awarded portions of the subject land to private
respondents Salasalans and Rayabas as they had not yet been issued patents or titles over the
subject land. The execution order merely directed the segregation of petitioners' titled lot from
the subject land which was actually being occupied by private respondents before they were
ejected from it. Based on the finding that private respondents were actually in possession or
were actually occupying the subject land instead of petitioners, respondent Palad, being the
Director of Lands and in the exercise of this administrative discretion, directed petitioners to
vacate the subject land on the ground that private respondents have a preferential right, being
the occupants thereof.

While private respondents may not have filed their application over the land occupied by them,
they nevertheless filed their protest or opposition to petitioners' Miscellaneous Sales Application,
the same being preparatory to the filing of an application as they were in fact directed to do
so. In any case, respondent Palad's execution order merely implements respondent Hilario's
order. It should be noted that petitioners' own application still has to be given due course. [17]

As Director of lands, respondent Palad is authorized to exercise executive control over any form
of concession, disposition and management of the lands of the public domain. [18] He may issue
decisions and orders as he may see fit under the circumstances as long as they are based on
the findings of fact.
In the case of Calibo v. Ballesteros,[19] this Court held that where, in the disposition of public
lands, the Director of Lands bases his decision on the evidence thus presented, he clearly acts
within his jurisdiction, and if he errs in appraising the evidence, the error is one of judgment, but
not an act or grave abuse of discretion annullable by certiorari. Thus, except for the issue of
non-exhaustion of administrative remedies, this Court finds no reversible error nor grave abuse
of discretion in the decision of the Court of Appeals.

WHEREFORE, the petition is DISMISSED for lack of merit.

SO ORDERED.

G.R. No. 73002 December 29, 1986

THE DIRECTOR OF LANDS, petitioner,

vs.
INTERMEDIATE APPELLATE COURT and ACME PLYWOOD & VENEER CO.
INC., ETC., respondents.

D. Nacion Law Office for private respondent.

NARVASA, J.:

The Director of Lands has brought this appeal by certiorari from a judgment of the
Intermediate Appellate Court affirming a decision of the Court of First Instance of
Isabela, which ordered registration in favor of Acme Plywood & Veneer Co., Inc. of
five parcels of land measuring 481, 390 square meters, more or less, acquired by
it from Mariano and Acer Infiel, members of the Dumagat tribe.

The registration proceedings were for confirmation of title under Section 48 of

Commonwealth Act No. 141 (The Public Land Act). as amended: and the
appealed judgment sums up the findings of the trial court in said proceedings in
this wise:

1. That Acme Plywood & Veneer Co. Inc., represented by Mr. Rodolfo Nazario is a
corporation duly organized in accordance with the laws of the Republic of the
Philippines and registered with the Securities and Exchange Commission on
December 23, 1959;

2. That Acme Plywood & Veneer Co. Inc., represented by Mr. Rodolfo Nazario can
acquire real properties pursuant to the provisions of the Articles of Incorporation
particularly on the provision of its secondary purposes (paragraph (9), Exhibit 'M-
l');

3. That the land subject of the Land Registration proceeding was ancestrally
acquired by Acme Plywood & Veneer Co., Inc., on October 29, 1962, from
Mariano Infiel and Acer Infiel, both members of the Dumagat tribe and as such are
cultural minorities;

4. That the constitution of the Republic of the Philippines of 1935 is applicable as

the sale took place on October 29, 1962;

5. That the possession of the Infiels over the land relinquished or sold to Acme
Plywood & Veneer Co., Inc., dates back before the Philippines was discovered by
Magellan as the ancestors of the Infiels have possessed and occupied the land
from generation to generation until the same came into the possession of Mariano
Infiel and Acer Infiel;

6. That the possession of the applicant Acme Plywood & Veneer Co., Inc., is
continuous, adverse and public from 1962 to the present and tacking the
possession of the Infiels who were granted from whom the applicant bought said
land on October 29, 1962, hence the possession is already considered from time
immemorial.

7. That the land sought to be registered is a private land pursuant to the provisions
of Republic Act No. 3872 granting absolute ownership to members of the non-
Christian Tribes on land occupied by them or their ancestral lands, whether with
the alienable or disposable public land or within the public domain;

8. That applicant Acme Plywood & Veneer Co. Inc., has introduced more than
Forty-Five Million (P45,000,000.00) Pesos worth of improvements, said
improvements were seen by the Court during its ocular investigation of the land
sought to be registered on September 18, 1982;

9. That the ownership and possession of the land sought to be registered by the
applicant was duly recognized by the government when the Municipal Officials of
Maconacon, Isabela, have negotiated for the donation of the townsite from Acme
Plywood & Veneer Co., Inc., and this negotiation came to reality when the Board
of Directors of the Acme Plywood & Veneer Co., Inc., had donated a part of the
land bought by the Company from the Infiels for the townsite of Maconacon
Isabela (Exh. 'N') on November 15, 1979, and which donation was accepted by
the Municipal Government of Maconacon, Isabela (Exh. 'N-l'), during their special
session on November 22, 1979.

The Director of Lands takes no issue with any of these findings except as to the
applicability of the 1935 Constitution to the matter at hand. Concerning this, he
asserts that, the registration proceedings have been commenced only on July 17,
1981, or long after the 1973 Constitution had gone into effect, the latter is the
correctly applicable law; and since section 11 of its Article XIV prohibits private
corporations or associations from holding alienable lands of the public domain,
except by lease not to exceed 1,000 hectares (a prohibition not found in the 1935
Constitution which was in force in 1962 when Acme purchased the lands in
question from the Infiels), it was reversible error to decree registration in favor of
Acme Section 48, paragraphs (b) and (c), of Commonwealth Act No. 141, as
amended, reads:

SEC. 48. The following described citizens of the Philippines, occupying lands of
the public domain or claiming to own any such lands or an interest therein, but
whose titles have not been perfected or completed, may apply to the Court of First
Instance of the province where the land is located for confirmation of their claims,
and the issuance of a certificate of title therefor, under the Land Registration Act,
to wit:

xxx xxx xxx

(b) Those who by themselves or through their predecessors-in-interest have been

in open, continuous, exclusive and notorious possession and occupation of
agricultural lands of the public domain, under a bona fide claim of acquisition or
ownership, for at least thirty years immediately preceding the filing of the
application for confirmation of title except when prevented by war or force
majeure. These shall be conclusively presumed to have performed all the
conditions essential to a Government grant and shall be entitled to a certificate of
title under the provisions of this chapter.
(c) Members of the National Cultural minorities who by themselves or through their
predecessors-in-interest have been in open. continuous, exclusive and notorious
possession and occupation of lands of the public domain suitable to agriculture,
whether disposable or not, under a bona fide claim of ownership for at least 30
years shall be entitled to the rights granted in subsection (b) hereof.

The Petition for Review does not dispute-indeed, in view of the quoted findings of
the trial court which were cited and affirmed by the Intermediate Appellate Court, it
can no longer controvert before this Court-the fact that Mariano and Acer Infiel,
from whom Acme purchased the lands in question on October 29, 1962, are
members of the national cultural minorities who had, by themselves and through
their progenitors, possessed and occupied those lands since time immemorial, or
for more than the required 30-year period and were, by reason thereof, entitled to
exercise the right granted in Section 48 of the Public Land Act to have their title
judicially confirmed. Nor is there any pretension that Acme, as the successor-in-
interest of the Infiels, is disqualified to acquire and register ownership of said lands
under any provisions of the 1973 Constitution other than Section 11 of its Article
XIV already referred to.

Given the foregoing, the question before this Court is whether or not the title that
the Infiels had transferred to Acme in 1962 could be confirmed in favor of the latter
in proceedings instituted by it in 1981 when the 1973 Constitution was already in
effect, having in mind the prohibition therein against private corporations holding
lands of the public domain except in lease not exceeding 1,000 hectares.

The question turns upon a determination of the character of the lands at the time
of institution of the registration proceedings in 1981. If they were then still part of
the public domain, it must be answered in the negative. If, on the other hand, they
were then already private lands, the constitutional prohibition against their
acquisition by private corporations or associations obviously does not apply.

In this regard, attention has been invited to Manila Electric Company vs. Castro-
Bartolome, et al, 1 where a similar set of facts prevailed. In that case, Manila
Electric Company, a domestic corporation more than 60% of the capital stock of
which is Filipino-owned, had purchased in 1947 two lots in Tanay, Rizal from the
Piguing spouses. The lots had been possessed by the vendors and, before them,
by their predecessor-in-interest, Olimpia Ramos, since prior to the outbreak of the
Pacific War in 1941. On December 1, 1976, Meralco applied to the Court of First
Instance of Rizal, Makati Branch, for confirmation of title to said lots. The court,
assuming that the lots were public land, dismissed the application on the ground
that Meralco, a juridical person, was not qualified to apply for registration under
Section 48(b) of the Public Land Act which allows only Filipino citizens or natural
persons to apply for judicial confirmation of imperfect titles to public land. Meralco
appealed, and a majority of this Court upheld the dismissal. It was held that:

..., the said land is still public land. It would cease to be public land only upon the
issuance of the certificate of title to any Filipino citizen claiming it under section
48(b). Because it is still public land and the Meralco, as a juridical person, is
disqualified to apply for its registration under section 48(b), Meralco's application
cannot be given due course or has to be dismissed.

Finally, it may be observed that the constitutional prohibition makes no distinction

between (on the one hand) alienable agricultural public lands as to which no
occupant has an imperfect title and (on the other hand) alienable lands of the
public domain as to which an occupant has on imperfect title subject to judicial
confirmation.

Since section 11 of Article XIV does not distinguish, we should not make any
distinction or qualification. The prohibition applies to alienable public lands as to
which a Torrens title may be secured under section 48(b). The proceeding under
section 48(b) 'presupposes that the land is public' (Mindanao vs. Director of
Lands, L-19535, July 30, 1967, 20 SCRA 641, 644).

The present Chief Justice entered a vigorous dissent, tracing the line of cases
beginning with Carino in 1909 2 thru Susi in 1925 3 down to Herico in 1980, 4 which
developed, affirmed and reaffirmed the doctrine that open, exclusive and
undisputed possession of alienable public land for the period prescribed by law
creates the legal fiction whereby the land, upon completion of the requisite
period ipso jure and without the need of judicial or other sanction, ceases to be
public land and becomes private property. That said dissent expressed what is the
better and, indeed, the correct, view-becomes evident from a consideration of
some of the principal rulings cited therein,

The main theme was given birth, so to speak, in Carino involving the
Decree/Regulations of June 25, 1880 for adjustment of royal lands wrongfully
occupied by private individuals in the Philippine Islands. It was ruled that:
It is true that the language of articles 4 and 5 5 attributes title to those 'who may
prove' possession for the necessary time and we do not overlook the argument
that this means may prove in registration proceedings. It may be that an English
conveyancer would have recommended an application under the foregoing
decree, but certainly it was not calculated to convey to the mind of an Igorot chief
the notion that ancient family possessions were in danger, if he had read every
word of it. The words 'may prove' (acrediten) as well or better, in view of the other
provisions, might be taken to mean when called upon to do so in any litigation.
There are indications that registration was expected from all but none sufficient to
show that, for want of it, ownership actually gained would be lost. The effect of the
proof, wherever made, was not to confer title, but simply to establish it, as already
conferred by the decree, if not by earlier law. ...

That ruling assumed a more doctrinal character because expressed in more

categorical language, in Susi:

.... In favor of Valentin Susi, there is, moreover, the presumption juris et de
jure established in paragraph (b) of section 45 of Act No. 2874, amending Act No.
926, that all the necessary requirements for a grant by the Government were
complied with, for he has been in actual and physical possession, personally and
through his predecessors, of an agricultural land of the public domain openly,
continuously, exclusively and publicly since July 26, 1984, with a right to a
certificate of title to said land under the provisions of Chapter VIII of said Act. So
that when Angela Razon applied for the grant in her favor, Valentin Susi had
already acquired, by operation of law not only a right to a grant, but a grant of the
Government, for it is not necessary that a certificate of title should be issued in
order that said grant may be sanctioned by the courts, an application therefore is
sufficient, under the provisions of section 47 of Act No. 2874. If by a legal fiction,
Valentin Susi had acquired the land in question by a grant of the State, it had
already ceased to be of the public domain and had become private property, at
least by presumption, of Valentin Susi, beyond the control of the Director of Lands.
Consequently, in selling the land in question of Angela Razon, the Director of
Lands disposed of a land over which he had no longer any title or control, and the
sale thus made was void and of no effect, and Angela Razon did not thereby
acquire any right. 6

Succeeding cases, of which only some need be mentioned, likeof Lacaste vs.
Director of Lands, 7 Mesina vs. Vda. de Sonza, 8 Manarpac vs.
Cabanatuan, 9 Miguel vs. Court of Appeals 10 and Herico vs. Dar, supra, by
invoking and affirming the Susi doctrine have firmly rooted it in jurisprudence.

Herico, in particular, appears to be squarely affirmative: 11

.... Secondly, under the provisions of Republic Act No. 1942, which the respondent
Court held to be inapplicable to the petitioner's case, with the latter's proven
occupation and cultivation for more than 30 years since 1914, by himself and by
his predecessors-in-interest, title over the land has vested on petitioner so as to
segregate the land from the mass of public land. Thereafter, it is no longer
disposable under the Public Land Act as by free patent. ....

xxx xxx xxx

As interpreted in several cases, when the conditions as specified in the foregoing

provision are complied with, the possessor is deemed to have acquired, by
operation of law, a right to a grant, a government grant, without the necessity of a
certificate of title being issued. The land, therefore, ceases to be of the public
domain and beyond the authority of the Director of Lands to dispose of. The
application for confirmation is mere formality, the lack of which does not affect the
legal sufficiency of the title as would be evidenced by the patent and the Torrens
title to be issued upon the strength of said patent. 12

Nothing can more clearly demonstrate the logical inevitability of considering

possession of public land which is of the character and duration prescribed by
statute as the equivalent of an express grant from the State than the dictum of the
statute itself 13 that the possessor(s) "... shall be conclusively presumed to have
performed all the conditions essential to a Government grant and shall be entitled
to a certificate of title .... " No proof being admissible to overcome a conclusive
presumption, confirmation proceedings would, in truth be little more than a
formality, at the most limited to ascertaining whether the possession claimed is of
the required character and length of time; and registration thereunder would not
confer title, but simply recognize a title already vested. The proceedings would
not originally convert the land from public to private land, but only confirm such a
conversion already affected by operation of law from the moment the required
period of possession became complete. As was so well put in Carino, "... (T)here
are indications that registration was expected from all, but none sufficient to show
that, for want of it, ownership actually gained would be lost. The effect of the proof,
wherever made, was not to confer title, but simply to establish it, as already
conferred by the decree, if not by earlier law."

If it is accepted-as it must be-that the land was already private land to which the
Infiels had a legally sufficient and transferable title on October 29, 1962 when
Acme acquired it from said owners, it must also be conceded that Acme had a
perfect right to make such acquisition, there being nothing in the 1935 Constitution
then in force (or, for that matter, in the 1973 Constitution which came into effect
later) prohibiting corporations from acquiring and owning private lands.

Even on the proposition that the land remained technically "public" land, despite
immemorial possession of the Infiels and their ancestors, until title in their favor
was actually confirmed in appropriate proceedings under the Public Land Act,
there can be no serious question of Acmes right to acquire the land at the time it
did, there also being nothing in the 1935 Constitution that might be construed to
prohibit corporations from purchasing or acquiring interests in public land to which
the vendor had already acquired that type of so-called "incomplete" or "imperfect"
title. The only limitation then extant was that corporations could not acquire, hold
or lease public agricultural lands in excess of 1,024 hectares. The purely
accidental circumstance that confirmation proceedings were brought under the
aegis of the 1973 Constitution which forbids corporations from owning lands of the
public domain cannot defeat a right already vested before that law came into
effect, or invalidate transactions then perfectly valid and proper. This Court has
already held, in analogous circumstances, that the Constitution cannot impair
vested rights.

We hold that the said constitutional prohibition 14 has no retroactive application to

the sales application of Binan Development Co., Inc. because it had already
acquired a vested right to the land applied for at the time the 1973 Constitution
took effect.

That vested right has to be respected. It could not be abrogated by the new
Constitution. Section 2, Article XIII of the 1935 Constitution allows private
corporations to purchase public agricultural lands not exceeding one thousand
and twenty-four hectares. Petitioner' prohibition action is barred by the doctrine of
vested rights in constitutional law.

xxx xxx xxx

The due process clause prohibits the annihilation of vested rights. 'A state may not
impair vested rights by legislative enactment, by the enactment or by the
subsequent repeal of a municipal ordinance, or by a change in the constitution of
the State, except in a legitimate exercise of the police power'(16 C.J.S. 1177-78).

xxx xxx xxx

In the instant case, it is incontestable that prior to the effectivity of the 1973
Constitution the right of the corporation to purchase the land in question had
become fixed and established and was no longer open to doubt or controversy.

Its compliance with the requirements of the Public Land Law for the issuance of a
patent had the effect of segregating the said land from the public domain. The
corporation's right to obtain a patent for the land is protected by law. It cannot be
deprived of that right without due process (Director of Lands vs. CA, 123 Phil.
919). 15
<re||an 1w>

The fact, therefore, that the confirmation proceedings were instituted by Acme in
its own name must be regarded as simply another accidental circumstance,
productive of a defect hardly more than procedural and in nowise affecting the
substance and merits of the right of ownership sought to be confirmed in said
proceedings, there being no doubt of Acme's entitlement to the land. As it is
unquestionable that in the light of the undisputed facts, the Infiels, under either the
1935 or the 1973 Constitution, could have had title in themselves confirmed and
registered, only a rigid subservience to the letter of the law would deny the same
benefit to their lawful successor-in-interest by valid conveyance which violates no
constitutional mandate.

The Court, in the light of the foregoing, is of the view, and so holds, that the
majority ruling in Meralco must be reconsidered and no longer deemed to be
binding precedent. The correct rule, as enunciated in the line of cases already
referred to, is that alienable public land held by a possessor, personally or through
his predecessors-in-interest, openly, continuously and exclusively for the
prescribed statutory period (30 years under The Public Land Act, as amended) is
converted to private property by the mere lapse or completion of said period, ipso
jure. Following that rule and on the basis of the undisputed facts, the land subject
of this appeal was already private property at the time it was acquired from the
Infiels by Acme. Acme thereby acquired a registrable title, there being at the time
no prohibition against said corporation's holding or owning private land. The
objection that, as a juridical person, Acme is not qualified to apply for judicial
confirmation of title under section 48(b) of the Public Land Act is technical, rather
than substantial and, again, finds its answer in the dissent in Meralco:

6. To uphold respondent judge's denial of Meralco's application on the technicality

that the Public Land Act allows only citizens of the Philippines who are natural
persons to apply for confirmation of their title would be impractical and would just
give rise to multiplicity of court actions. Assuming that there was a technical error
not having filed the application for registration in the name of the Piguing spouses
as the original owners and vendors, still it is conceded that there is no prohibition
against their sale of the land to the applicant Meralco and neither is there any
prohibition against the application being refiled with retroactive effect in the name
of the original owners and vendors (as such natural persons) with the end result of
their application being granted, because of their indisputable acquisition of
ownership by operation of law and the conclusive presumption therein provided in
their favor. It should not be necessary to go through all the rituals at the great cost
of refiling of all such applications in their names and adding to the overcrowded
court dockets when the Court can after all these years dispose of it here and now.
(See Francisco vs. City of Davao)

The ends of justice would best be served, therefore, by considering the

applications for confirmation as amended to conform to the evidence, i.e. as filed
in the names of the original persons who as natural persons are duly qualified to
apply for formal confirmation of the title that they had acquired by conclusive
presumption and mandate of the Public Land Act and who thereafter duly sold to
the herein corporations (both admittedly Filipino corporations duly qualified to hold
and own private lands) and granting the applications for confirmation of title to the
private lands so acquired and sold or exchanged.

There is also nothing to prevent Acme from reconveying the lands to the Infiels
and the latter from themselves applying for confirmation of title and, after issuance
of the certificate/s of title in their names, deeding the lands back to Acme. But this
would be merely indulging in empty charades, whereas the same result is more
efficaciously and speedily obtained, with no prejudice to anyone, by a liberal
application of the rule on amendment to conform to the evidence suggested in the
dissent in Meralco.

While this opinion seemingly reverses an earlier ruling of comparatively recent

vintage, in a real sense, it breaks no precedent, but only reaffirms and re-
established, as it were, doctrines the soundness of which has passed the test of
searching examination and inquiry in many past cases. Indeed, it is worth noting
that the majority opinion, as well as the concurring opinions of Chief Justice
Fernando and Justice Abad Santos, in Meralco rested chiefly on the proposition
that the petitioner therein, a juridical person, was disqualified from applying for
confirmation of an imperfect title to public land under Section 48(b) of the Public
Land Act. Reference to the 1973 Constitution and its Article XIV, Section 11, was
only tangential limited to a brief paragraph in the main opinion, and may, in that
context, be considered as essentially obiter. Meralco, in short, decided no
constitutional question.

WHEREFORE, there being no reversible error in the appealed judgment of the

Intermediate Appellate Court, the same is hereby affirmed, without costs in this
instance.

SO ORDERED.

REPUBLIC OF THE PHILIPPINES,

Petitioner,

- versus -
BANTIGUE POINT DEVELOPMENT CORPORATION,
Respondent.

G. R. No. 162322

Present:

CARPIO, J., Chairperson,

BRION,
PEREZ,
SERENO, and
REYES, JJ.

Promulgated:

March 14, 2012

x - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - -
-----x
DECISION
SERENO, J.:
This Rule 45 Petition requires this Court to address the issue of the
proper scope of the delegated jurisdiction of municipal trial courts in
land registration cases. Petitioner Republic of the Philippines
(Republic) assails the Decision of the Court of Appeals (CA)[1] in
CA-G.R. CV No. 70349, which affirmed the Decision of the
Municipal Trial Court (MTC) of San Juan, Batangas[2] in LRC Case
No. N-98-20, LRA Record No. 68329, granting respondent Bantigue
Point Development Corporations (Corporation) application for
original registration of a parcel of land. Since only questions of law
have been raised, petitioner need not have filed a Motion for
Reconsideration of the assailed CA Decision before filing this
Petition for Review.
The Facts
On 17 July 1997, respondent Bantigue Point Development
Corporation filed with the Regional Trial Court (RTC) of Rosario,
Batangas an application for original registration of title over a parcel
of land with an assessed value of 4,330, 1,920 and 8,670, or a
total assessed value of 14,920 for the entire property, more
particularly described as Lot 8060 of Cad 453-D, San Juan Cadastre,
with an area of more or less 10,732 square meters, located at
Barangay Barualte, San Juan, Batangas. [3]
On 18 July 1997, the RTC issued an Order setting the case for initial
hearing on 22 October 1997.[4] On 7 August 1997, it issued a second
Order setting the initial hearing on 4 November 1997.[5]
Petitioner Republic filed its Opposition to the application for
registration on 8 January 1998 while the records were still with the
RTC.[6]
On 31 March 1998, the RTC Clerk of Court transmitted motu
proprio the records of the case to the MTC of San Juan, because the
assessed value of the property was allegedly less than 100,000.[7]
Thereafter, the MTC entered an Order of General Default[8] and
commenced with the reception of evidence.[9] Among the documents
presented by respondent in support of its application are Tax
Declarations,[10] a Deed of Absolute Sale in its favor,[11] and a
Certification from the Department of Environment and Natural
Resources (DENR) Community Environment and Natural Resources
Office (CENRO) of Batangas City that the lot in question is within
the alienable and disposable zone.[12] Thereafter, it awarded the land
to respondent Corporation.[13]
Acting on an appeal filed by the Republic,[14] the CA ruled that since
the former had actively participated in the proceedings before the
lower court, but failed to raise the jurisdictional challenge therein,
petitioner is thereby estopped from questioning the jurisdiction of
the lower court on appeal.[15] The CA further found that respondent
Corporation had sufficiently established the latters registrable title
over the subject property after having proven open, continuous,
exclusive and notorious possession and occupation of the subject
land by itself and its predecessors-in-interest even before the
outbreak of World War II.[16]
Dissatisfied with the CAs ruling, petitioner Republic filed this
instant Rule 45 Petition and raised the following arguments in
support of its appeal:
 I.

THE REPUBLIC CANNOT BE ESTOPPED FROM QUESTIONING THE JURISDICTION

OF THE MUNICIPAL TRIAL COURT OVER THE APPLICATION FOR ORIGINAL
REGISTRATION OF LAND TITLE EVEN FOR THE FIRST TIME ON APPEAL

II.

THE MUNICIPAL TRIAL COURT FAILED TO ACQUIRE JURISDICTION OVER THE

APPLICATION FOR ORIGINAL REGISTRATION OF LAND TITLE.[17]

The Courts Ruling

We uphold the jurisdiction of the MTC, but remand the case to the
court a quo for further proceedings in order to determine if the
property in question forms part of the alienable and disposable land
of the public domain.
I
The Republic is not estopped from raising the issue of
jurisdiction in this case.
At the outset, we rule that petitioner Republic is not estopped from
questioning the jurisdiction of the lower court, even if the former
raised the jurisdictional question only on appeal. The rule is settled
that lack of jurisdiction over the subject matter may be raised at any
stage of the proceedings.[18] Jurisdiction over the subject matter is
conferred only by the Constitution or the law.[19] It cannot be
acquired through a waiver or enlarged by the omission of the parties
or conferred by the acquiescence of the court.[20] Consequently,
questions of jurisdiction may be cognizable even if raised for the
first time on appeal.[21]
The ruling of the Court of Appeals that a party may be estopped
from raising such [jurisdictional] question if he has actively taken
part in the very proceeding which he questions, belatedly objecting
to the courts jurisdiction in the event that the judgment or order
subsequently rendered is adverse to him[22] is based on the doctrine
of estoppel by laches. We are aware of that doctrine first enunciated
by this Court in Tijam v. Sibonghanoy.[23] In Tijam, the party-litigant
actively participated in the proceedings before the lower court and
filed pleadings therein. Only 15 years thereafter, and after receiving
an adverse Decision on the merits from the appellate court, did the
party-litigant question the lower courts jurisdiction. Considering the
unique facts in that case, we held that estoppel by laches had already
precluded the party-litigant from raising the question of lack of
jurisdiction on appeal. In Figueroa v. People,[24] we cautioned
that Tijam must be construed as an exception to the general rule and
applied only in the most exceptional cases whose factual milieu is
similar to that in the latter case.
The facts are starkly different in this case, making the exceptional
rule in Tijam inapplicable. Here, petitioner Republic filed its
Opposition to the application for registration when the records were
still with the RTC.[25] At that point, petitioner could not have
questioned the delegated jurisdiction of the MTC, simply because
the case was not yet with that court. When the records were
transferred to the MTC, petitioner neither filed pleadings nor
requested affirmative relief from that court. On appeal, petitioner
immediately raised the jurisdictional question in its Brief.[26] Clearly,
the exceptional doctrine of estoppel by laches is inapplicable to the
instant appeal.
Laches has been defined as the failure or neglect, for an
unreasonable and unexplained length of time, to do that which, by
exercising due diligence, could or should have been done earlier; it
is negligence or omission to assert a right within a reasonable time,
warranting the presumption that the party entitled to assert it either
has abandoned or declined to assert it.[27] In this case, petitioner
Republic has not displayed such unreasonable failure or neglect that
would lead us to conclude that it has abandoned or declined to assert
its right to question the lower court's jurisdiction.

II
The Municipal Trial Court properly acquired jurisdiction
over the case.
In assailing the jurisdiction of the lower courts, petitioner Republic
raised two points of contention: (a) the period for setting the date
and hour of the initial hearing; and (b) the value of the land to be
registered.

First, petitioner argued that the lower court failed to acquire

jurisdiction over the application, because the RTC set the date and
hour of the initial hearing beyond the 90-day period provided under
the Property Registration Decree.[28]
We disagree.
The Property Registration Decree provides:
Sec. 23. Notice of initial hearing, publication, etc. - The court shall, within five days from filing
of the application, issue an order setting the date and hour of the initial hearing which shall not
be earlier than forty-five days nor later than ninety days from the date of the order. x x x.

In this case, the application for original registration was filed on 17

July 1997.[29] On 18 July 1997, or a day after the filing of the
application, the RTC immediately issued an Order setting the case
for initial hearing on 22 October 1997, which was 96 days from the
Order.[30] While the date set by the RTC was beyond the 90-day period provided for in
Sec
tion 23, this fact did not affect the jurisdiction of the trial court.
In Republic v. Manna Properties, Inc.,[31] petitioner Republic therein contended
that there was failure to comply with the jurisdictional requirements
for original registration, because there were 125 days between the
Order setting the date of the initial hearing and the initial hearing
itself. We ruled that the lapse of time between the issuance of the Order setting the date of
initial hearing and the date of the initial hearing itself was not fatal to the application.
Thus, we
held:
x x x [A] party to an action has no control over the Administrator or the Clerk of Court acting as a land court; he has no right to meddle
unduly with the business of such official in the performance of his duties. A party cannot
intervene in matters within the exclusive power of the trial court. No fault is attributable to such party if the
trial court errs on matters within its sole power. It is unfair to punish an applicant for an act or omission over which the applicant has neither

responsibility nor control, especially if the applicant has complied with all the requirements of the law.[32]

Indeed, it would be the height of injustice to penalize respondent

Corporation by dismissing its
application for registration on account of events beyond its control.

Moreover, since the RTC issued a second Order on 7 August 1997

setting the initial hearing on 4 November 1997,[33] within the 90-day
period provided by law, petitioner Republic argued that the
jurisdictional defect was still not cured, as the second Order was
issued more than five days from the filing of the application, again
contrary to the prescribed period under the Property Registration
Decree.[34]
Petitioner is incorrect.
The RTCs failure to issue the Order setting the date and hour of the
initial hearing within five days from the filing of the application for
registration, as provided in the Property Registration Decree, did not
affect the courts its jurisdiction. Observance of the five-day period
was merely directory, and failure to issue the Order within that
period did not deprive the RTC of its jurisdiction over the case. To
rule that compliance with the five-day period is mandatory would
make jurisdiction over the subject matter dependent upon the trial
court. Jurisdiction over the subject matter is conferred only by the
Constitution or the law.[35] It cannot be contingent upon the action or inaction of the court.
This does not mean that courts may disregard the statutory periods
with impunity. We cannot assume that the law deliberately meant
the provision to become meaningless and to be treated as a dead
letter.[36] However, the records of this case do not show such blatant
disregard for the law. In fact, the RTC immediately set the case for
initial hearing a day after the filing of the application for
registration,[37] except that it had to issue a second Order because the
initial hearing had been set beyond the 90-day period provided by
law.
Second, petitioner contended[38] that since the selling price of the
property based on the Deed of Sale annexed to respondents
application for original registration was 160,000,[39]the MTC did
not have jurisdiction over the case. Under Section 34 of the
Judiciary Reorganization Act, as amended,[40] the MTCs delegated
jurisdiction to try cadastral and land registration cases is limited to
lands, the value of which should not exceed 100,000.
We are not persuaded.
The delegated jurisdiction of the MTC over cadastral and land
registration cases is indeed set forth in the Judiciary Reorganization
Act, which provides:
Sec. 34. Delegated Jurisdiction in Cadastral and Land Registration Cases. - Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts may be assigned by the
Supreme Court to hear and determine cadastral or land registration cases covering lots where
there is no controversy or opposition, or contested lots where the value of which does not
exceed One hundred thousand pesos (100,000.00), such value to be ascertained by the
affidavit of the claimant or by agreement of the respective claimants if there are more than one,
or from the corresponding tax declaration of the real property. Their decision in these cases
shall be appealable in the same manner as decisions of the Regional Trial Courts. (As amended
by R.A. No. 7691) (Emphasis supplied.)

Thus, the MTC has delegated jurisdiction in cadastral and land

registration cases in two instances: first, where there is no
controversy or opposition; or, second, over contested lots, the value
of which does not exceed 100,000.

The case at bar does not fall under the first instance, because
petitioner opposed respondent Corporations application for
registration on 8 January 1998.[41]
However, the MTC had jurisdiction under the second instance,
because the value of the lot in this case does not exceed 100,000.
Contrary to petitioners contention, the value of the land should not
be determined with reference to its selling price. Rather, Section 34
of the Judiciary Reorganization Act provides that the value of the
property sought to be registered may be ascertained in three
ways: first, by the affidavit of the claimant; second, by agreement of
the respective claimants, if there are more than one; or, third, from
the corresponding tax declaration of the real property.[42]
In this case, the value of the property cannot be determined using the
first method, because the records are bereft of any affidavit executed
by respondent as to the value of the property. Likewise, valuation
cannot be done through the second method, because this method
finds application only where there are multiple claimants who agree
on and make a joint submission as to the value of the property. Here,
only respondent Bantigue Point Development Corporation claims
the property.
The value of the property must therefore be ascertained with
reference to the corresponding Tax Declarations submitted by
respondent Corporation together with its application for registration.
From the records, we find that the assessed value of the property
is 4,330, 1,920 and 8,670, or a total assessed value of 14,920
for the entire property.[43] Based on these Tax Declarations, it is
evident that the total value of the land in question does not
exceed 100,000. Clearly, the MTC may exercise its delegated
jurisdiction under the Judiciary Reorganization Act, as amended.
III
A certification from the CENRO is not sufficient proof
that the property in question is alienable and disposable
land of the public domain.
Even as we affirm the propriety of the MTCs exercise of its
delegated jurisdiction, we find that the lower court erred in granting
respondent Corporations application for original registration in the
absence of sufficient proof that the property in question was
alienable and disposable land of the public domain.
The Regalian doctrine dictates that all lands of the public domain
belong to the State.[44] The applicant for land registration has the
burden of overcoming the presumption of State ownership by
establishing through incontrovertible evidence that the land sought
to be registered is alienable or disposable based on a positive act of
the government.[45] We held in Republic v. T.A.N. Properties,
Inc. that a CENRO certification is insufficient to prove the alienable
and disposable character of the land sought to be registered.[46] The
applicant must also show sufficient proof that the DENR Secretary
has approved the land classification and released the land in question
as alienable and disposable.[47]
Thus, the present rule is that an application for original registration
must be accompanied by (1) a CENRO or PENRO[48] Certification;
and (2) a copy of the original classification approved by the DENR
Secretary and certified as a true copy by the legal custodian of the
official records.[49]

Here, respondent Corporation only presented a CENRO certification

in support of its application.[50] Clearly, this falls short of the
requirements for original registration.
We therefore remand this case to the court a quo for reception of
further evidence to prove that the property in question forms part of
the alienable and disposable land of the public domain. If respondent
Bantigue Point Development Corporation presents a certified true
copy of the original classification approved by the DENR Secretary,
the application for original registration should be granted. If it fails
to present sufficient proof that the land in question is alienable and
disposable based on a positive act of the government, the application
should be denied.
WHEREFORE, premises considered, the instant Petition for
Review is DENIED. Let this case be REMANDED to the
Municipal Trial Court of San Juan, Batangas, for reception of
evidence to prove that the property sought to be registered is
alienable and disposable land of the public domain.
SO ORDERED.

REPUBLIC OF THE PHILIPPINES,

Petitioner,

- versus -
HEIRS OF EVARISTO TIOTIOEN,
Respondents.

G.R. No. 167215

Present:

PUNO, C.J., Chairperson,

CARPIO,
AZCUNA,
REYES,* and
LEONARDO-DE CASTRO, JJ.

Promulgated:

October 8, 2008
---------------------------------------------------------------------------------------------------------
---------------

DECISION

LEONARDO-DE CASTRO, J.:

Before us is a Petition for Review on Certiorari filed by the
Republic of the Philippines, represented by the Department of
Environment and Natural Resources and the Office of the Solicitor
General (OSG), seeking to set aside a part of the Decision[1] dated
February 15, 2005 of the Court of Appeals (CA) in CAG.R. SP No.
71358 insofar as it sustained the denial of the Notice of
Appeal[2] filed on January 11, 2002 by the petitioner from
the Decision[3] dated August 30, 2001 of Branch 63 of the Regional
Trial Court (RTC) of La Trinidad, Benguet, in Land Registration
Case (LRC) No. 93-LRC-0008.

LRC No. 93-LRC-0008 involves the second application filed by

Evaristo Tiotioen on September 6, 1993 for judicial confirmation
and registration under the Torrens System of two parcels of land
denominated as Lot Nos. 1 and 2 of Plan PSU-230646, situated in
Pico, La Trinidad, Benguet, with an aggregate area of 180,488
square meters. Evaristo Tiotioen was substituted by his heirs in the
case when he died on June 21, 1997. Santiago A. Santiago,
the Municipality of La Trinidad, Benguet, and the petitioner opposed
the aforesaid application.

In a Notice of Appearance[4] dated October 20, 1994,

the OSG formally requested that its appearance be entered as
counsel for the petitioner and that all notices of hearings, orders,
resolutions and decision be served to the OSG at its given
address. The said notice of appearance informed the court that
the OSG authorized the Provincial Prosecutor of Benguet to appear
in the case, subject to the conditions quoted hereunder:

The Provincial Prosecutor, La Trinidad, Benguet, is authorized to appear in this case, and
therefore, should also be furnished notices of hearing, orders, resolutions, decisions and other
processes.However, as the Solicitor General retains supervision and control of the
representation in this case and has to approve withdrawal of the case, non-appeal, or other
actions which appear to compromise the interest of the Government, only notices of orders,
resolutions, and decisions served on him will bind the party represented.

The petitioner filed its Opposition[5] dated October 20,

1994 and Supplemental Opposition[6] dated June 20, 1995 on the
ground that the parcels of land, applied for registration by the
respondents, belong to the communal forest of La Trinidad,
Benguet, and are therefore inalienable land of the public domain,
which have not been classified and considered as disposable and
alienable.

After trial, the land registration court rendered

its Decision dated August 30, 2001 which granted the
application. The dispositive portion of the decision reads:

WHEREFORE, the Court, finding that the Applicants have shown their adverse,
continuous and notorious possession and in the concept of owners of the land applied
for since time immemorial, and thus their title thereto is proper to be confirmed, and
is hereby confirmed.

The applicants, namely: NICOLAS TIOTIOEN, single; ILDEFONSO TIOTIOEN,

married to Adelaida Tiotioen; CONCEPCION TIOTIOEN-DIAZ, married; NANCY
TIOTIOEN-OGOY, married and FILOMENA TIOTIOEN-DULNUAN, married; all
 of legal age, Filipinos and residents of Pico, La Trinidad, Benguet are hereby declared
owners pro indiviso of a parcel of land situated at Pico, La Trinidad, Benguet
containing an area of ONE HUNDRED TWENTY THREE THOUSAND NINE
HUNDRED THIRTY FIVE (123,935) SQUARE METERS for Lot 1 and FIFTY SIX
THOUSAND FIVE HUNDRED FIFTY THREE (56,553) SQUARE METERS for
Lot 2. The subject land is particularly described in the Original Tracing Cloth Plan
(Exh. AA-1), Survey Plan (Exh. A), and in the Technical Description (Exhs. B & B-
2), subject to the claim of oppositor Santiago A. Santiago as per agreement with the
applicants and when the decision becomes final and executory, let a final decree be
issued for the issuance of title accordingly.

SO ORDERED.

The petitioner and the municipality received their respective notices

of the above-mentioned decision on September 6 and 7, 2001. The
municipality filed its Motion for Reconsideration thereto
on September 20, 2001. The petitioner, on the other hand, filed
a Motion and Manifestation[7] on October 5, 2001 adopting the said
motion of the municipality.

In the Resolution[8] dated December 6, 2001, the land registration

court denied for lack of merit the motion for reconsideration of the
municipality and declared the same as pro formabecause the issues
cited were already passed upon in the decision sought for
reconsideration. The municipality filed its notice of appeal on the
following day it received its notice of the said
resolution. The OSG was not furnished by the land registration court
with a copy of this resolution but it was informed of the said
resolution only by the provincial prosecutor on January 4, 2002[9],
through a Letter[10] dated December 19, 2001. Consequently,
the OSG filed its subject notice of appeal for the petitioner
on January 11, 2002.

The land registration court denied the notice of appeal of the

municipality on the ground that the latters pro forma motion for
reconsideration did not interrupt the reglementary period to
appeal. The petitioners notice of appeal was also denied supposedly
for having been filed out of time[11].

The petitioner sought the reconsideration of the denial of its notice

of appeal which was again denied by the land registration court in
an Order[12] dated April 23, 2002, quoted hereunder:

ORDER

For resolution is the Motion for Reconsideration filed by the Office of the Solicitor General
(OSG) of the Order of the Court dated January 29, 2002 denying their Notice of Appeal having
been filed beyond the reglementary period.

Be it noted that the OSG received the Decision dated August 30, 2001 on September 06,
2001 and filed its Notice of Appeal on January 11, 2002. Conformably with Section 3, Rule
41 of the Rules of Civil Procedure, prescribing a 15-day appeal period, the last day for the
perfection of an appeal by OSG should have been on the 21st day of September 2001. Per
se, it was filed beyond the reglementary period for which to perfect an appeal.

It is well-settled in our jurisdiction that the right to appeal is a statutory right and a party who
seeks to avail of the right must comply with the rules. These rules, particularly the statutory
requirement for perfecting an appeal within the reglementary period laid down by law, must be
strictly followed as they are considered indispensable interdictions against needless delays and
for orderly discharge of judicial business (Ben Sta. Rita v. C.A., et al., G.R. No. 119891, August
21, 1995).
 In view of the foregoing, the Court finds no convincing and logical reasons to reconsider its
Order dated January 29, 2002 and hereby denies the Motion for Reconsideration. [Emphasis
supplied]

The municipality and petitioner separately assailed before the CA

the orders of the land registration court denying their respective
notices of appeal. The CA granted the petition filed by the
municipality and gave due course to its appeal but denied the one
filed by the petitioner. The CA pointed out that the petitioner filed
its motion and manifestation adopting the adverted motion for
reconsideration of the municipality beyond the reglementary period
to file an appeal and, thus, the decision of the land registration court
already attained finality insofar as the petitioner was concerned. The
strong grounds alleged by the petitioner were likewise rejected by
the CA which explained and ruled as follows:

The merit impressed in petitioner Republic of the Philippines position is, however, more
apparent than real. Notwithstanding the studied avoidance of direct references thereto,
the fact remains that the Solicitor General received its copy of the 30 August 2001 decision
rendered in the case on 6 September 2001 and thus only had until the 21st of the same
month to either move for a reconsideration of said decision or perfect an appeal
therefrom. There is, therefore, no gainsaying the ineluctable fact that the selfsame decision
had already attained finality as against petitioner Republic of the Philippines by the time
the Office of the Provincial Prosecutor of Benguet filed the 4 October 2001 manifestation
adopting petitioner municipalitys motion for reconsideration.

It thus matters little that the Office of the Provincial Prosecutor of Benguet appears to have been
duly furnished with a copy of the aforesaid 6 December 2001 resolution on December 10, 2001
or that it only informed the Office of the Solicitor General of said adverse ruling through the 19
December 2001 missive the latter received on January 4, 2002. The rule that copies or orders
and decisions served on the deputized counsel, acting as agent or representative of the
Office of the Solicitor General, are not binding until they are actually received by the
latter has little application where, as in the case at bench, said office had been duly
 furnished a copy of the decision in the main case which, for reasons it alone can explain, it
allowed to attain finality. Under the factual and legal milieu of the case, public respondent
cannot be faulted with grave abuse of discretion tantamount to lack of or excess of jurisdiction
for denying the 10 January 2002 Notice of Appeal filed by the Office of the Solicitor General
way beyond the reglementary period for petitioner Republic of the Philippines appeal.

Neither are we, finally, swayed by the strong grounds petitioner Republic of
the Philippines purportedly has to pursue an appeal from public respondents 30 August
2001 decision. Except on jurisdictional grounds, correction of a lower courts decision
could, for one, only be done by regular appeal within the period allowed by law. Our
perusal of the grounds cited by petitionerRepublic of the Philippines, for another, yielded
nothing which had not yet been raised and will once again be raised by petitioner
municipality.

WHEREFORE, the petition filed by petitioner Municipality of La Trinidad, Benguet is

GRANTED and the assailed 23 January 2002 order and 30 April 2002 resolution are,
acoordingly, NULLIFIED and SET ASIDE. In lieu thereof, another is entered GIVING DUE
COURSE to said petitioners appeal.

The petition filed by the Office of the Solicitor General for and in behalf
of petitioner Republic of the Philippines is, however, DENIED for lack of merit. [Emphasis
supplied]

Hence, the present petition for review on certiorari.

The petitioner claims that the OSG, as its principal counsel in the
subject land registration case, is entitled to be furnished with copies
of orders, notices, and decision of the trial court, and that the date of
service of such copies to the OSG is the reckoning period in
counting the timeliness of its appeal[13]. The petitioner contends that
the OSG was not furnished with a notice of the Order [Resolution]
dated December 6, 2001 of the land registration court which denied
the adverted motion for reconsideration of the municipality. The
prescribed period within which to file petitioners appeal did not
commence to run and, therefore, its notice of appeal should not be
treated as filed out of time.

The petitioner prays in the alternative that issues of procedure

should be set aside and its appeal should be given due course
alleging again the strong grounds that it has adduced against the
decision of the land registration court.
In their Comment[14] and Memorandum[15], the respondents contend
that the appellate court correctly denied the notice of appeal of the
petitioner for having been filed out of time.They stress the fact that
the petitioner received the adverted decision of the trial court
on September 6, 2001 and that the petitioner filed its notice of
appeal thereto only on January 11, 2002which is way beyond the
prescribed period under the Rules of Court.

We find merit in the petition.

The relevant facts involving the procedural issues in this case are
undisputed. The petitioner and the municipality received a notice of
the adverted decision of the land registration court on September 6
and 7, 2001, respectively. The municipality timely filed its motion
for reconsideration of the said judgment on September 20, 2001. The
provincial prosecutor adopted this motion for reconsideration of the
municipality on October 5, 2001 which was beyond the fifteen-day
period counted from receipt of the petitioner of a copy of the
decision. The land registration court denied the said motion for
reconsideration of the municipality in its Resolution dated December
6, 2001. The OSG was not furnished with a notice of such
resolution. The OSG was informed by the provincial prosecutor of
such denial on January 4, 2002 when it received
the Letter dated December 19, 2001 of the Provincial
Prosecutor. The OSG filed the subject notice of appeal for the
petitioner only on January 11, 2002 which the land registration court
denied for having been filed way beyond the fifteen-day
reglementary period to appeal which the said court reckoned
from September 6, 2001. The CA affirmed the land registration
courts denial of the subject notice of appeal of the petitioner but
gave due course to the appeal of the municipality.

In deciding this case, this Court is guided by the settled doctrine that
the belated filing of an appeal by the State, or even its failure to file
an opposition, in a land registration case because of the mistake or
error on the part of its officials or agents does not deprive the
government of its right to appeal from a judgment of the
court. In Director of Lands v. Medina[16], we said:

Considering the foregoing, the lower court gravely abused its discretion in dismissing the
appeal of the government on the basis of what it perceived as a procedural lapse. The lower
court should be reminded that the ends of substantial justice should be the paramount
consideration in any litigation or proceeding. As this Court ruled in Republic v. Associacion
Benevola de Cebu, "to dismiss the Republic's appeal merely on the alleged ground of late
filing is not proper considering the merits of the case" and to ignore the evidence presented
by the provincial fiscal in behalf of the Director of Forestry which constituted the crux of the
government's case "would defeat the time-honored Constitutional precepts and the
Regalian doctrine that all lands of the public domain belong to the State, and that the
State is the source of any asserted right to ownership in land and charged with the
conservation of such patrimony.
In Heirs of Marina C. Regalado v. Republic[17], we ruled:

The failure of the Republic to file any opposition or answer to the application for
registration, despite receipt of notice thereof, did not deprive its right to appeal
the RTC decision.

Relative to the allegation that the Director of Lands or that the government did not oppose the
application of herein respondent, as in fact on December 26, 1969 an order of general default
was issued by the court against the whole world, suffice it to say that as stated by this court in
Luciano vs. Estrella, 34 SCRA 769, 'it is a well known and settled rule in our jurisdiction
that the Republic, or its government, is usually not estopped by mistake or error on the
part of its officials or agents.' And, in an earlier case, Republic vs. Philippine Rabbit Bus
Lines, Inc., 32 SCRA 211, 'there was an enunciation of such a principle in this wise: 'Thus did
the lower court, as pointed out by the then Solicitor General, conclude that the government was
bound by the mistaken interpretation arrived at by the national treasurer and the auditor general.'
It would consider estoppel as applicable. That is not the law. Estoppel does not lie. [Emphasis
supplied]

Moreover, we have advised the lower courts, under exceptional

circumstances, to be cautious about not depriving of a party of the
right to appeal and that every party litigant should be afforded the
amplest opportunity for the proper and just determination of his
cause free from the constraints of technicalities.[18] In Tanenglian v.
Lorenzo, et al.,[19] we recognized the importance of the facts and
issues involved and gave due course to an appeal despite that it was
the wrong mode of appeal and that it was even filed beyond the
reglementary period to do so, thus:

We have not been oblivious to or unmindful of the extraordinary situations that merit liberal
application of the Rules, allowing us, depending on the circumstances, to set aside technical
infirmities and give due course to the appeal. In cases where we dispense with the technicalities,
we do not mean to undermine the force and effectivity of the periods set by law. In those rare
 cases where we did not stringently apply the procedural rules, there always existed a clear need
to prevent the commission of a grave injustice. Our judicial system and the courts have
always tried to maintain a healthy balance between the strict enforcement of procedural
laws and the guarantee that every litigant be given the full opportunity for the just and
proper disposition of his cause.

xxx xxx xxx

In Sebastian v. Morales, we ruled that rules of procedure must be faithfully followed except
only when, for persuasive reasons, they may be relaxed to relieve a litigant of an injustice not
commensurate with his failure to comply with the prescribed procedure, thus:

[C]onsidering that the petitioner has presented a good cause for the proper and just
determination of his case, the appellate court should have relaxed the stringent
application of technical rules of procedure and yielded to consideration of substantial
justice.

The Court has allowed some meritorious cases to proceed despite inherent procedural
defects and lapses. This is in keeping with the principle that rules of procedure are mere
tools designed to facilitate the attainment of justice and that strict and rigid application of
rules which would result in technicalities that tend to frustrate rather than promote
substantial justice must always be avoided. It is a far better and more prudent cause of
action for the court to excuse a technical lapse and afford the parties a review of the case
to attain the ends of justice, rather than dispose of the case on technicality and cause grave
injustice to the parties, giving a false impression of speedy disposal of cases while actually
resulting in more delay, if not a miscarriage of justice.

The vast tracts of land involved in this case are claimed by the
petitioner to be a protected watershed area, which allegedly
preserves the main source of water of the Municipality of La
Trinidad. Relative thereto, the petitioner raises substantial factual
and legal issues which should be decided on their merit instead of
being summarily disposed of based on a technicality.
WHEREFORE, in view of the foregoing, the instant petition is
hereby GRANTED. The assailed decision of the appellate court is
hereby PARTIALLY MODIFIED so as to give due course to
the Notice of Appeal filed on January 11, 2002 by the petitioner from
the Decision dated August 30, 2001 of Branch 63 of the RTC of La
Trinidad, Benguet, in Land Registration Case (LRC) No. 93-LRC-
0008.

SO ORDERED.

G.R. No. 165838 April 3, 2013

NEMESIO FIRAZA, SR., Petitioner,

vs.
SPOUSES CLAUDIO and EUFRECENA UGAY, Respondents.

RESOLUTION

REYES, J.:

Assailed in this petition1 for review on certiorari under Rule 45 of the Rules of
Court is the Decision2 dated January 30, 2004 of the Court of Appeals (CA) in C.A.
G.R. SP No. 73495, affirming the Orders dated August 20, 20013 and July 2,
20024 of the Regional Trial Court (RTC) of Bayugan, Agusan del Sur, Branch 7,
which disallowed petitioner Nemesio Firaza, Sr. (petitioner) from propounding
questions attacking the validity of Spouses Claudio and Eufrecena Ugay's
(respondents) land title during the trial in Civil Case No. 442.

Likewise assailed is the CA Resolution 5 dated September 24, 2004 denying

reconsideration.
 The Antecedents

Civil Case No. 442 was commenced by a complaint for Quieting of Title filed by
the respondents who alleged that they are the registered owners of Lot No. 2887-
A as evidenced by Original Certificate of Title (OCT) No. P-16080. The complaint
prayed for the annulment of Tax Declaration No. C-22-0857 dated February 18,
1993 issued in the name of the petitioner on the ground that it creates a cloud
upon the respondents title.6

In his answer,7 the petitioner set up the affirmative defense that the respondents
obtained their title through fraud and misrepresentation perpetrated during the
processing of their Free Patent Application before the Office of the Community
Environment and Natural Resources Officer of Bayugan, Agusan del Sur. The
respondents purportedly connived with Land Management Officer Lourdes Tadem
(Tadem) who favorably recommended their application despite the petitioners
prior claim and continuous possession of the subject lot.

On the basis of the said affirmative defense, the petitioner also filed a
counterclaim praying for the: (1) nullification of OCT No. P-16080; (2)
reconveyance to him of the ownership of the subject lot; and (3) payment of moral
and exemplary damages, and attorneys fees.8

The RTC thereafter set the affirmative defense for preliminary hearing as if a
motion to dismiss had been filed pursuant to Section 6, Rule 16 of the Rules of
Court.9 The RTC likewise ordered the parties to submit their respective
memorandum to which the respondents duly complied. Instead of similarly
complying, however, the petitioner filed a Motion to Dispense with the Filing of the
Petitioners Memorandum reasoning that his affirmative defense cannot be proven
adequately through a written pleading.10

On October 2, 1998, the RTC issued an Order11 denying the petitioners

affirmative defense on the ground that the same can be better ventilated along
with the allegations of the complaint and answer in a full-blown trial.

Thus, trial on the merits ensued during which Land Management Officer Tadem
was presented as a hostile witness for the respondents. While on direct
examination, the petitioners counsel propounded questions pertaining to the
circumstances attending the issuance by Tadem of a recommendation for the
respondents Free Patent Application. Counsel for the respondents objected to the
questioning on the ground that the same constitutes a collateral attack to the
respondents land title. In response, the petitioner argued that the questions are
necessary for him to establish his defenses of fraud and misrepresentation and to
substantiate his counterclaim for reconveyance. To fully thresh out the issue, the
RTC required the parties to file, as they did so file, their respective position papers
on whether the petitioners counterclaim constitutes a direct or a collateral attack
to the validity of the respondents title.12

On August 20, 2001, the RTC issued an Order13 disallowing any issue pertaining
to the petitioners counterclaim which in turn was adjudged as a direct attack to
the validity of the respondents title, hence, prohibited, viz:

After an in-depth reading of the facts extant from the records, the Court is of the
opinion and so holds that the Counterclaim is a direct attack on the validity of the
title.

Proverbial it is that actions to nullity [sic] Free Patents should be at the behest of
the Director of Lands (Kayaban vs. Republic, 52 SCRA 357).

Along this plain, since the counterclaim is a direct attack on the validity of the title
and the proper agencies, like the Land Management Bureau of the DENR were
not included, any issue presented to prove the illegality of the title, shall not be
allowed.

SO ORDERED.14

When his motion for reconsideration was denied by the RTC in an Order15 dated
July 2, 2002, the petitioner sought recourse with the CA via a special civil action
for certiorari.

In its herein assailed Decision16 dated January 30, 2004, the CA affirmed the
RTCs judgment albeit premised on the different finding that the petitioners
counterclaim was a collateral attack to the validity of the respondents title. The CA
stated: "[the] petitioners attempt to introduce evidence on the alleged fraud
committed by the respondents in securing their title to the subject land constitutes
a collateral attack on the title which is not allowed by law."17

The petitioner moved for reconsideration but his motion was denied in the CA
Resolution18 dated September 24, 2004 hence, the present appeal moored on this
legal question:
Whether the petitioners counterclaim constitutes a collateral attack of the
respondents land title and thus bars the former from introducing evidence thereon
in the latters civil action for quieting of title?

The Courts Ruling

The appeal is impressed with merit.

Section 48 of Presidential Decree No. 152919 or the Property Registration Decree

proscribes a collateral attack to a certificate of title and allows only a direct attack
thereof, viz:

Sec. 48. Certificate not subject to collateral attack. A certificate of title shall not be
subject to collateral attack. It cannot be altered, modified or cancelled except in a
direct proceedings in accordance with law. 1wphi 1

In Arangote v. Maglunob,20 the Court, after distinguishing between direct and

collateral attack, classified a counterclaim under former, viz:

The attack is considered direct when the object of an action is to annul or set
aside such proceeding, or enjoin its enforcement. Conversely, an attack is indirect
or collateral when, in an action to obtain a different relief, an attack on the
proceeding is nevertheless made as an incident thereof. Such action to attack a
certificate of title may be an original action or a counterclaim, in which a certificate
of title is assailed as void.21 (Citation omitted and emphasis supplied)

In the recent case of Sampaco v. Lantud,22 the Court applied the foregoing
distinction and held that a counterclaim, specifically one for annulment of title and
reconveyance based on fraud, is a direct attack on the Torrens title upon which
the complaint for quieting of title is premised.23 Earlier in, Development Bank of the
Philippines v. CA,24 the Court ruled similarly and explained thus:

Nor is there any obstacle to the determination of the validity of TCT No. 10101. It
is true that the indefeasibility of torrens title cannot be collaterally attacked. In the
instant case, the original complaint is for recovery of possession filed by petitioner
against private respondent, not an original action filed by the latter to question the
validity of TCT No. 10101 on which petitioner bases its right. To rule on the issue
of validity in a case for recovery of possession is tantamount to a collateral attack.
However, it should not [b]e overlooked that private respondent filed a counterclaim
against petitioner, claiming ownership over the land and seeking damages.
Hence, we could rule on the question of the validity of TCT No. 10101 for the
counterclaim can be considered a direct attack on the same. x x x.25

The above pronouncements were based on the well-settled principle that a

counterclaim is essentially a complaint filed by the defendant against the plaintiff
and stands on the same footing as an independent action.26

From the foregoing, it is immediately apparent that the courts a quo erred in their
conclusions. The CA erroneously classified the herein counterclaim as a collateral
1wphi1

attack. On the other hand, the RTC correctly adjudged the same as a direct attack
to the respondents land title but mistakenly declared it as a prohibited action.

As clearly pronounced in the above-cited jurisprudence, the petitioners

counterclaim is a permissible direct attack to the validity of respondents torrens
title. As such counterclaim, it involves a cause of action separate from that alleged
in the complaint; it has for its purpose the vindication of a right in as much as the
complaint similarly seeks the redress of one.27 As the plaintiff in his own
counterclaim, the petitioner is equally entitled to the opportunity granted the
plaintiff in the original complaint, to establish his cause of action and to prove the
right he asserts.

The courts a quo deprived the petitioner of such opportunity when they barred him
from propounding questions relating to the validity of the respondents title; they
unjustifiably precluded him from presenting evidence of fraud and
misrepresentation upon which his counterclaim is grounded. The courts a quo, the
RTC especially, should have instead dealt with such issues and allowed the
presentation of the facts and evidence necessary for a complete determination of
the controversy.

WHEREFORE, premises considered, the petition is GRANTED. The Decision

dated January 30, 2004 of the Court of Appeals in C.A. G.R. SP No. 73495 and
the Orders dated August 20, 2001 and July 2, 2002 of the Regional Trial Court of
Bayugan, Agusan del Sur, Branch 7, in Civic Case No. 442 are hereby
REVERSED and SET ASIDE. The trial court is ORDERED to proceed with the trial
of Civil Case No. 442 and to allow petitioner Nemesio Firaza, Sr. to propound
questions pertaining to' the validity of Original Certificate of Title No. P-16080 and
present such other evidence, testimonial or documentary, substantiating his
counterclaim
SO ORDERED.

HEIRS OF MAXIMO LABANON, G.R. No. 160711

represented by ALICIA LABANON
CAEDO and the PROVINCIAL Present:
ASSESSOR OF COTABATO,
Petitioners, QUISUMBING, J., Chairperson,
CARPIO,
CARPIO MORALES,
- versus - TINGA, and
VELASCO, JR., JJ.

HEIRS OF CONSTANCIO Promulgated:

LABANON, represented by
ALBERTO MAKILANG,
Respondents. August 14, 2004
x---------------------------------------------------------------------------------
--------x

DECISION
VELASCO, JR., J.:

The Case

This Petition for Review on Certiorari under Rule 45 seeks the recall
and nullification of the May 8, 2003 Decision[1] of the Court of
Appeals (CA) in CA-G.R. CV No. 65617 entitled Heirs of
Constancio Labanon represented by Alberto Makilang v. Heirs of
Maximo Labanon represented by Alicia Labanon Caedo and the
Provincial Assessor of Cotabato, which reversed the August 18,
1999 Decision[2] of the Kidapawan City, Cotabato Regional Trial
Court (RTC), Branch 17, in Civil Case No. 865. Likewise assailed is
the October 13, 2003 Resolution[3]which disregarded petitioners
Motion for Reconsideration.

The Facts

The CA culled the facts this way:

During the lifetime of Constancio Labanon, prior to the outbreak of WWII, he settled upon
a piece of alienable and disposable public agricultural land situated at Brgy. Lanao,
Kidapawan, Cotabato x x x. Constancio cultivated the said lot and introduced permanent
improvements that still exist up to the present. Being of very limited educational attainment,
he found it difficult to file his public land application over said lot. Constancio then asked
his brother, Maximo Labanon who was better educated to file the corresponding public land
application under the express agreement that they will divide the said lot as soon as it would
be feasible for them to do so. The offer was accepted by Maximo. During the time of the
application it was Constancio who continued to cultivate the said lot in order to comply
with the cultivation requirement set forth under Commonwealth Act 141, as amended,
on Homestead applications. After which, on June 6, 1941, due to industry of Constancio,
Homestead Application No. 244742 (E-128802) of his brother Maximo was approved with
Homestead Patent No. 67512. Eventually, Original Certificate of Title No. P-14320 was
issued by the Register of Deeds of Cotabato over said lot in favor of Maximo Labanon.

On February 11, 1955, Maximo Labanon executed a document denominated as Assignment

of Rights and Ownership and docketed as Doc. No. 20; Page No. 49; Book No. V; Series of
1955 of the Notarial Register of Atty. Florentino Kintanar. The document was executed to
safeguard the ownership and interest of his brother Constancio Labanon. Pertinent portion
of which is reproduced as follows:

That I, MAXIMO LABANON, of legal age, married to Anastacia Sagarino, and a

resident of Kidapawan, Cotabato, for and in consideration of the expenses incurred by
my elder brother CONSTANCIO LABANON also of legal age, Filipino, widower
and a resident of Kidapawan, Cotabato, for the clearing, cultivation and
improvements on the eastern portion xxx Lot No. 1, Blk. 22, Pls-59 xxx which
expenses have been incurred by my said brother xxx before the outbreak of the last
world war xxx I do hereby assign transfer and convey my rights to, interests in and
ownership on the said eastern portion of said Lot No. 1, Block 22, Pls-59 ONE
HUNDRED (100 M) ALONG THE NATIONAL HIGHWAY, (DAVAO-
COTABATO ROAD) by TWO HUNDRED FIFTY METERS (250 M) going inside
the land to cover an area of TWO AND ONE HALF HECTARES (25,000 SQ. M.),
more or less, adjoining the school site of barrio Lanao, Kidapawan, Cotabato, to the
said CONSTANCIO LABANON, his heirs and assigns, can freely occupy for his own
use and benefit xxx.
IN WITNESS WHEREFOF, I have hereunto set my hand this 11th day of February
1995 at Kidapawan, Cotabato.

(SGD) MAXIMO LABANON

With my marital consent.

(SGD) ANASTACIA SAGARINO

(Wife) (p.16, rollo)
On April 25, 1962, Maximo Labanon executed a sworn statement reiterating his desire that
his elder brother Constancio, his heirs and assigns shall own the eastern portion of the Lot,
pertinent portion of which reads:

That I am the same and identical person who is a homestead applicant (HA-224742,
E-128802) of a tract of land which is covered by Homestead Patent No. 67512 dated
June 6, 1941, known as Lot No. 1, Block 22, Pls-59, situated in [B]arrio Lanao,
Municipality of Kidapawan, Province of Cotabato, Philippines, and containing an area
of 5.0000 hectares, more or less;

That I am the same and identical person who executed a deed of ASSIGNMENT OF
RIGHTS AND OWNERSHIP in favor of my brother Constancio Labanon, now
deceased, now for his heirs, for the eastern half portion of the land above described,
and which deed was duly notarized by notary public Florentino P. Kintanar on
February 11, 1955 at Kidapawan, Cotabato and entered in his Notarial Register as
Doc. No. 20, Page No. 49, Book No. V, Series of 1955; and

That in order that I and the Heirs of Constancio Labanon will exercise our respective
rights and ownership over the aforementioned lot, and to give force and effect to said
deed of assignment, I hereby, by these presents, request the Honorable Director of
Lands and the Land Title Commission to issue a separate title in my favor covering
the western half portion of the aforementioned lot and to the Heirs of Constancio
Labanon a title for the eastern half portion thereof.

IN WITNESS THEREOF, I have hereunto set my hand this 25th day of April, 1962, at
Pikit, Cotabato, Philippines. (p. 9, records)

After the death of Constancio Labanon, his heirs executed an [e]xtra-judicial settlement of
estate with simultaneous sale over the aforesaid eastern portion of the lot in favor of Alberto
Makilang, the husband of Visitacion Labanon, one of the children of Constancio.
Subsequently, the parcel of land was declared for taxation purposes in the name of Alberto
under TD No. 11593. However, in March 1991, the defendants heirs of Maximo Labanon
namely, Alicia L. Caniedo, Leopoldo Labanon, Roberto Nieto and Pancho Labanon, caused
to be cancelled from the records of the defendant Provincial Assessor of Cotabato the
aforesaid TD No. 11593 and the latter, without first verifying the legality of the basis for
said cancellation, did cancel the same. x x x Further, after discovering that the defendant-
heirs of Maximo Labanon were taking steps to deprive the heirs of Constancio Labanon of
their ownership over the eastern portion of said lot, the latter, thru Alberto Makilang,
demanded the owners copy of the certificate of title covering the aforesaid Lot to be
 surrendered to the Register of Deeds of Cotabato so that the ownership of the heirs of
Constancio may be fully effected but the defendants refused and still continue to refuse to
honor the trust agreement entered into by the deceased brothers. x x x[4]

Thus, on November 12, 1991, petitioners filed a complaint[5] for

Specific Performance, Recovery of Ownership, Attorneys Fees and
Damages with Writ of Preliminary Injunction and Prayer for
Temporary Restraining Order against respondents docketed as Civil
Case No. 865 before the Kidapawan City RTC. After hearing, the
trial court rendered its August 18, 1999 Decision, the decretal
portion of which reads:

Wherefore, prescinding from the foregoing facts and considerations the Court finds and so
holds that the [defendant-heirs] of Maximo Labanon represented by Alicia Labanon
Caniedo have proved by preponderance of evidence that they are entitled to the reliefs set
forth in their answer and consequently judgment is hereby rendered as follows:

1. Ordering the dismissal of the complaint against the Heirs of Maximo Labanon
represented by Alicia Labanon Caniedo for lack of merit;

2. Ordering the dismissal of the case against the Provincial Assessor. The claim of the
plaintiff is untenable, because the duties of the Provincial Assessor are ministerial.
Moreover, the presumption of regularity in the performance of his duty is in his favor;

3. Ordering the plaintiff to pay the defendants the amount of P20,000.00 as exemplary
damages, P10,000.00 for Attorneys Fees, P500.00 per appearance in Court; and

4. To pay the costs of this suit.

[6]
IT IS SO ORDERED.
Aggrieved, respondents elevated the adverse judgment to the CA
which issued the assailed May 8, 2003 Decision in CA-G.R. CV No.
65617, the fallo of which states:

WHEREFORE, the appeal is hereby GRANTED for being meritorious. The assailed
decision of the Regional Trial Court is hereby REVERSED and SET ASIDE and a new
one is hereby entered as follows:

1) Recognizing the lawful possession of the plaintiffs-appellants over the eastern portion
of the property in dispute;

2) Declaring the plaintiffs-appellants as owners of the eastern portion of the

property by reason of lawful possession;

3) Ordering the Provincial Assessor to reinstate TD No. 11593 and declaring TD

No. 243-A null and void;

4) Ordering the defendants-appellees to pay the plaintiffs-appellants the amount of

P20,000 as moral damages, P10,000 for attorneys fees, P500.00 per appearance in
Court and

5) To pay the costs of the suit.

SO ORDERED.

The Issues

Surprised by the turn of events, petitioners brought this

petition before us raising the following issues, to wit:
 1. Whether or not Original Certificate of Title No. 41320 issued on April 10, 1975 in the
name of MAXIMO LABANON be now considered indefeasible and conclusive; and

2. Whether or not the Trust Agreement allegedly made by Constancio Labanon and Maximo
Labanon prescribed.[7]

The Courts Ruling

The petition must fail.

First Issue

Respondents are not precluded from challenging the validity of

Original Certificate of Title No. P-41320

Petitioners argue that respondents can no longer question Maximo

Labanons ownership of the land after its registration under the
principle of indefeasibility of a Transfer Certificate of Title (TCT).

Such argument is inaccurate.

The principle of indefeasibility of a TCT is embodied in Section 32
of Presidential Decree No. (PD) 1529, amending the Land
Registration Act, which provides:

Section 32. Review of decree of registration; Innocent purchaser for value. The decree of
registration shall not be reopened or revised by reason of absence, minority, or other
disability of any person adversely affected thereby, nor by any proceeding in any court for
reversing judgments, subject, however, to the right of any person, including the government
and the branches thereof, deprived of land or of any estate or interest therein by such
adjudication or confirmation of title obtained by actual fraud, to file in the proper Court of
First Instance a petition for reopening and review of the decree of registration not later than
one year from and after the date of the entry of such decree of registration, but in no case
shall such petition be entertained by the court where an innocent purchaser for value has
acquired the land or an interest therein, whose rights may be prejudiced. Whenever the
phrase innocent purchaser for value or an equivalent phrase occurs in this Decree, it shall be
deemed to include an innocent lessee, mortgagee, or other encumbrancer for value.

Upon the expiration of said period of one year, the decree of registration and the certificate
of title issued shall become incontrovertible. Any person aggrieved by such decree of
registration in any case may pursue his remedy by action for damages against the applicant
or any other persons responsible for the fraud.

Contrary to petitioners interpretation, the aforequoted legal

provision does not totally deprive a party of any remedy to recover
the property fraudulently registered in the name of another.Section
32 of PD 1529 merely precludes the reopening of the registration
proceedings for titles covered by the Torrens System, but does not
foreclose other remedies for the reconveyance of the property to its
rightful owner. As elaborated in Heirs of Clemente Ermac v. Heirs
of Vicente Ermac:
 While it is true that Section 32 of PD 1529 provides that the decree of registration becomes
incontrovertible after a year, it does not altogether deprive an aggrieved party of a remedy
in law. The acceptability of the Torrens System would be impaired, if it is utilized to
[8]
perpetuate fraud against the real owners.

A more succinct explanation is found in Vda. De Recinto v.

Inciong, thus:

The mere possession of a certificate of title under the Torrens system does not necessarily
make the possessor a true owner of all the property described therein for he does not by
virtue of said certificate alone become the owner of the land illegally included. It is evident
from the records that the petitioner owns the portion in question and therefore the area
should be conveyed to her. The remedy of the land owner whose property has been
wrongfully or erroneously registered in another's name is, after one year from the date
of the decree, not to set aside the decree, but, respecting the decree as incontrovertible and
no longer open to review, to bring an ordinary action in the ordinary court of justice for
reconveyance or, if the property has passed into the hands of an innocent purchaser
[9]
for value, for damages. (Emphasis supplied.)

Undeniably, respondents are not precluded from recovering the

eastern portion of Original Certificate of Title (OCT) No. P-14320,
with an area subject of the Assignment of Rights and Ownership
previously owned by their father, Constancio Labanon. The action
for Recovery of Ownership before the RTC is indeed the appropriate
remedy.
 Second Issue

The trust agreement between Maximo Labanon and Constancio

Labanon may still be enforced

Former Vice-President and Senator Arturo Tolentino, a noted

civilist, explained the nature and import of a trust:

Trust is the legal relationship between one person having an equitable ownership in
property and another person owning the legal title to such property, the equitable ownership
of the former entitling him to the performance of certain duties and the exercise of certain
powers by the latter.[10]

This legal relationship can be distinguished from other relationships

of a fiduciary character, such as deposit, guardianship, and agency,
in that the trustee has legal title to the property.[11] In the case at
bench, this is exactly the relationship established between the
parties.

Trusts are classified under the Civil Code as either express or

implied. Such classification determines the prescriptive period for
enforcing such trust.
Article 1444 of the New Civil Code on express trust provides that
[n]o particular words are required for the creation of an express
trust, it being sufficient that a trust is clearly intended.

Civil law expert Tolentino further elucidated on the express trust,

thus:

No particular form of words or conduct is necessary for the manifestation of intention to

create a trust. It is possible to create a trust without using the word trust or trustee.
Conversely, the mere fact that these words are used does not necessarily indicate an
intention to create a trust. The question in each case is whether the trustor manifested an
intention to create the kind of relationship which to lawyers is known as trust. It is
immaterial whether or not he knows that the relationship which he intends to create is called
a trust, and whether or not he knows the precise characteristics of the relationship which is
called a trust.[12]

Correlatively, we ruled in Estate of Edward Miller Grimm v. Estate

of Charles Parsons and Patrick C. Parsons, that:

An express trust is created by the direct and positive acts of the parties, by some writing or
deed or by words evidencing an intention to create a trust; the use of the word trust is not
required or essential to its constitution, it being sufficient that a trust is clearly intended.[13]

In the instant case, such intention to institute an express trust

between Maximo Labanon as trustee and Constancio Labanon as
trustor was contained in not just one but two written documents, the
Assignment of Rights and Ownership as well as Maximo Labanons
April 25, 1962 Sworn Statement. In both documents, Maximo
Labanon recognized Constancio Labanons ownership and
possession over the eastern portion of the property covered by OCT
No. P-14320, even as he recognized himself as the applicant for the
Homestead Patent over the land. Thus, Maximo Labanon maintained
the title over the property while acknowledging the true ownership
of Constancio Labanon over the eastern portion of the land. The
existence of an express trust cannot be doubted nor disputed.

On the issue of prescription, we had the opportunity to rule in Bueno

v. Reyes that unrepudiated written express trusts are
imprescriptible:

While there are some decisions which hold that an action upon a trust is imprescriptible,
without distinguishing between express and implied trusts, the better rule, as laid down by
this Court in other decisions, is that prescription does supervene where the trust is merely an
implied one. The reason has been expressed by Justice J.B.L. Reyes in J.M. Tuason and Co.,
Inc. vs. Magdangal, 4 SCRA 84, 88, as follows:

Under Section 40 of the old Code of Civil Procedure, all actions for recovery of real
property prescribed in 10 years, excepting only actions based on continuing or
subsisting trusts that were considered by section 38 as imprescriptible. As held in the
case of Diaz v. Gorricho, L-11229, March 29, 1958, however, the continuing or
subsisting trusts contemplated in section 38 of the Code of Civil Procedure referred
only to express unrepudiated trusts, and did not include constructive trusts (that are
imposed by law) where no fiduciary relation exists and the trustee does not recognize
the trust at all.[14]

This principle was amplified in Escay v. Court of Appeals this

way: Express trusts prescribe 10 years from the repudiation of the
trust (Manuel Diaz, et al. vs. Carmen Gorricho et al., 54 0.G. p.
8429, Sec. 40, Code of Civil Procedure).[15]

In the more recent case of Secuya v. De Selma, we again ruled that

the prescriptive period for the enforcement of an express trust of ten
(10) years starts upon the repudiation of the trust by the trustee.[16]

In the case at bar, Maximo Labanon never repudiated the express

trust instituted between him and Constancio Labanon. And after
Maximo Labanons death, the trust could no longer be renounced;
thus, respondents right to enforce the trust agreement can no longer
be restricted nor prejudiced by prescription.

It must be noted that the Assignment of Rights and Ownership and

Maximo Labanons Sworn Statement were executed after the
Homestead Patent was applied for and eventually granted with the
issuance of Homestead Patent No. 67512 on June 6, 1942.
Evidently, it was the intent of Maximo Labanon to hold the title over
the land in his name while recognizing Constancio Labanons
equitable ownership and actual possession of the eastern portion of
the land covered by OCT No. P-14320.

In addition, petitioners can no longer question the validity of the

positive declaration of Maximo Labanon in the Assignment of
Rights and Ownership in favor of the late Constancio Labanon, as
the agreement was not impugned during the formers lifetime and the
recognition of his brothers rights over the eastern portion of the lot
was further affirmed and confirmed in the subsequent April 25, 1962
Sworn Statement.

Section 31, Rule 130 of the Rules of Court is the repository of the
settled precept that [w]here one derives title to property from
another, the act, declaration, or omission of the latter, while holding
the title, in relation to the property, is evidence against the
former. Thus, petitioners have accepted the declaration made by
their predecessor-in-interest, Maximo Labanon, that the eastern
portion of the land covered by OCT No. P-14320 is owned and
possessed by and rightfully belongs to Constancio Labanon and the
latters heirs. Petitioners cannot now feign ignorance of such
acknowledgment by their father, Maximo.

Lastly, the heirs of Maximo Labanon are bound to the stipulations

embodied in the Assignment of Rights and Ownership pursuant to
Article 1371 of the Civil Code that contracts take effect between the
parties, assigns, and heirs.

Petitioners as heirs of Maximo cannot disarrow the commitment

made by their father with respect to the subject property since they
were merely subrogated to the rights and obligations of their
predecessor-in-interest. They simply stepped into the shoes of their
predecessor and must therefore recognize the rights of the heirs of
Constancio over the eastern portion of the lot. As the old adage goes,
the spring cannot rise higher than its source.
WHEREFORE, the petition is DENIED. The May 8, 2003 CA
Decision and October 13, 2003 Resolution in CA-G.R. CV No.
65617 are AFFIRMED with the modifications that the Kidapawan
City, Cotabato RTC, Branch 17 is directed to have OCT No. P-
14320 segregated and subdivided by the Land Management Bureau
into two (2) lots based on the terms of the February 11,
1955 Assignment of Rights and Ownership executed by Maximo
Labanon and Constancio Labanon; and after approval of the
subdivision plan, to order the Register of Deeds of Kidapawan City,
Cotabato to cancel OCT No. P-14320 and issue one title each to
petitioners and respondents based on the said subdivision plan.

Costs against petitioners.

SO ORDERED.