SECOND DIVISION

VICENTE CAWIS (substituted G.R. No. 170207

by his son, EMILIO CAWIS),
PEDRO BACLANGEN,
FELIZA DOMILIES, Present:
IVAN MANDI-IT a.k.a.
IVAN MANDI-IT LUPADIT, CARPIO, J., Chairperson,
DOMINGO CAWIS and BRION,
GERARD LIBATIQUE, DEL CASTILLO,
Petitioners, ABAD, and
PEREZ, JJ.

- versus -

HON. ANTONIO CERILLES,

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

DECISION

CARPIO, J.:

The Case

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

The Facts

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

On 4 August 1969, Republic Act No. 6099 [8] took effect. It provided that subject to certain
conditions, parcels of land within the Holy Ghost Hill Subdivision, which included Lot No. 47,
would be sold to the actual occupants without the necessity of a public bidding, in accordance
with the provisions of Republic Act No. 730. [9]

Claiming to be the actual occupants referred to in R.A. No. 6099, petitioners protested the sales
patent awarded to Andrada. The Bureau of Lands denied their protest on the ground that R.A. No.
6099, being of later passage, could no longer affect the earlier award of sales patent to Andrada.
Petitioners sought reconsideration, but the Bureau of Lands denied it on 19 May 1987. Petitioners
failed to appeal the adverse decision of the Bureau of Lands to any higher administrative
authority or to the courts. Thus, the decision had attained finality. [10]

Sometime in 1987, private respondent Ma. Edeliza S. Peralta (Peralta) purchased Lot No. 47 from
Andrada. On 28 October 1987, the Deputy Public Land Inspector, in his final report of
investigation,[11] found that neither Andrada nor Peralta had constructed a residential house on
the lot, which was required in the Order of Award and set as a condition precedent for the
issuance of the sales patent. Apparently, it was Vicente Cawis, one of the petitioners, who had
built a house on Lot No. 47.
On 13 November 1987, Sales Patent No. 1319 was nonetheless transferred to Peralta. In the
Order for the Issuance of Patent,[12] the Assistant Director of Lands verified the investigation
conducted by the Land Inspector, whose report was fully endorsed by the District Land Officer,
that Peralta had complied with the requirements of the law regarding the construction of
improvements on the land applied for. In the Order for Transfer of Sales Rights, [13] the Director of
Lands confirmed that before the transfer of the sales patent to Peralta, Andrada had complied
with the construction requirement. On 4 December 1987, Original Certificate of Title (OCT) No. P-
1604[14] was duly issued in Peraltas name.

On 8 September 1998, petitioners filed a complaint [15] before the trial court alleging fraud, deceit,
and misrepresentation in the issuance of the sales patent and the original certificate of title over
Lot No. 47. They claimed they had interest in the lot as qualified beneficiaries of R.A. No. 6099
who met the conditions prescribed in R.A. No. 730. They argued that upon the enactment of R.A.
No. 6099, Andradas sales patent was deemed cancelled and revoked in their favor.

In her answer with a motion to dismiss, [16] Peralta averred that petitioners have no cause of
action against her, that she obtained her title after compliance with the legal requirements, that
her title was issued more than ten years prior to the filing of the complaint, that the action was a
collateral attack on a title, and that even if the action was a direct attack, petitioners were not
the proper parties.

The Ruling of the Trial Court

The trial court issued a Resolution dated 3 November 1999 dismissing the complaint filed by
petitioners. The trial court held that reversion of title on the ground of fraud must be initiated by
the government through the Office of the Solicitor General (OSG). In its 13 January 2000 Order,
[17]
the trial court denied petitioners motion for reconsideration.

The Ruling of the Appellate Court

In its 17 February 2005 Decision, the appellate court affirmed the resolution of the trial court.
The appellate court explained that under Section 2 [18] of R.A. No. 6099, ownership of public land
within the Holy Ghost Hill Subdivision was not automatically conferred on petitioners as
occupants. The appellate court stated that petitioners must first apply for a sales patent in order
to avail of the benefits of the law. The appellate court agreed with the trial court that petitioners
had no standing to file a suit for annulment of Sales Patent No. 1319 and OCT No. P-1604. It cited
Section 101[19] of the Public Land Act, which provides that only the government, through the OSG,
could file an action for reversion. In its 6 September 2005 Resolution, the appellate court denied
petitioners motion for reconsideration.

The Issues
The twin issues raised by petitioners are (1) whether the actual occupants of parcels of land
covered by R.A. No. 6099, which includes Lot No. 47, have standing to question the validity
of the sales patent and the original certificate of title issued over Lot No. 47; and (2)
whether the suit for annulment of title allegedly issued through fraud, deceit, or
misrepresentation, has prescribed.

The Courts Ruling

The petition has no merit.

Petitioners contend private respondent misrepresented that there was no improvement on Lot
No. 47 at the time she filed her sales patent application when in fact, there were numerous
improvements consisting of residential houses erected by them. Petitioners argue neither private
respondent nor her predecessor-in-interest has introduced any improvement on Lot No. 47, which
is a condition precedent before she can be a qualified awardee. Petitioners take exception to the
rule that only the OSG is allowed to file a suit questioning the validity of the sales patent and the
original certificate of title. As to the second issue, petitioners argue that since the sales patent
and the original certificate of title are void from the beginning, the complaint filed by petitioners
cannot be deemed to have prescribed.

In her Comment, private respondent asserts that petitioners have no personality to question the
validity of the sales patent and the original certificate of title issued in her name. She maintains
that only the government, through the OSG, may file an action for reversion on the ground of
fraud, deceit, or misrepresentation. As to the second issue, private respondent claims that
petitioners annulment suit has prescribed pursuant to Section 32 [20] of Presidential Decree No.
1529.[21]

At the outset, we must point out that petitioners complaint questioning the validity of the sales
patent and the original certificate of title over Lot No. 47 is, in reality, a reversion suit. The
objective of an action for reversion of public land is the cancellation of the certificate of title and
the resulting reversion of the land covered by the title to the State. This is why an action for
reversion is oftentimes designated as an annulment suit or a cancellation suit.

Coming now to the first issue, Section 101 of the Public Land Act [22] clearly states:

SEC. 101. All actions for the reversion to the Government of lands of the public
domain or improvements thereon shall be instituted by the Solicitor General or the
officer acting in his stead, in the proper courts, in the name of the Republic of the
Philippines.
Even assuming that private respondent indeed acquired title to Lot No. 47 in bad faith, only the
State can institute reversion proceedings, pursuant to Section 101 of the Public Land Act and our
ruling in Alvarico v. Sola.[23] Private persons may not bring an action for reversion or any action
which would have the effect of canceling a land patent and the corresponding certificate of title
issued on the basis of the patent, such that the land covered thereby will again form part of the
public domain.[24] Only the OSG or the officer acting in his stead may do so. Since the title
originated from a grant by the government, its cancellation is a matter between the grantor and
the grantee.[25]

Similarly, in Urquiaga v. CA,[26] this Court held that there is no need to pass upon any allegation of
actual fraud in the acquisition of a title based on a sales patent. Private persons have no right or
interest over land considered public at the time the sales application was filed. They have no
personality to question the validity of the title. We further stated that granting, for the sake of
argument, that fraud was committed in obtaining the title, it is the State, in a reversion case,
which is the proper party to file the necessary action. [27]

In this case, it is clear that Lot No. 47 was public land when Andrada filed the sales patent
application. Any subsequent action questioning the validity of the award of sales patent on the
ground of fraud, deceit, or misrepresentation should thus be initiated by the State. The State has
not done so and thus, we have to uphold the validity and regularity of the sales patent as well as
the corresponding original certificate of title issued based on the patent.

At any rate, the Court, in the exercise of its equity jurisdiction, may directly resolve the issue of
alleged fraud in the acquisition of a sales patent although the action is instituted by a private
person. In this connection, the 19 May 1987 letter of the Director of Lands to petitioner Vicente
Cawis is instructive:

As to your allegation that the award in favor of applicant-respondent (Andrada)

should be cancelled as he failed to introduce improvements on the land, we find the
said contention to be untenable. Somewhere in your letter dated July 11, 1983, you
stated that you took possession of the lot in question in the early 1950s, introduced
improvements thereon, and resided therein continuously up to the present. By your
own admission, it would appear that you were the ones who made it impossible for
Mr. Andrada to take possession of the said lot and to improve the same. This being
the case, the failure of the applicant-respondent (Andrada) to introduce
improvements on the land in question is not attributable to him.

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

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

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

The complaint filed by petitioners did not state that they had filed an application for a sales
patent over Lot No. 47. Even if it did, an application for a sales patent could only create, at most,
an inchoate right. Not being the real parties-in-interest, petitioners have no personality to file the
reversion suit in this case.

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

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

Costs against petitioners.

SO ORDERED.

ANTONIO T. CARPIO
Associate Justice

WE CONCUR:

ARTURO D. BRION
Associate Justice

THIRD DIVISION
[G.R. No. 149097. October 18, 2004]
MACARIO S. TANCUNTIAN, as substituted by his heir, FRUCTUOSA TANCUNTIAN-ABRENICA and
CRISTINA D. CAYANG, petitioners, vs. CECILIO VICENTE T. GEMPESAW, JOFRE A. SANIEL,
FLORDELIS GEMPESAW, JUANITA M. MASCARDO, CHRISTIAN GEMPESAW, LITA G.
VILLANUEVA and VIOLETA VDA. DE PALMA GIL, JENELYN M. TARONGOY, JOCELYN M. ANORA,
MARYKNOLL JACQUELINE N. MENDOZA, LUALHATI HILARIO and COURT OF APPEALS (Special
Seventh Division), respondents.

DECISION
CORONA, J.:

Before us is a petition for review under Rule 45 [1] for the reversal of the decision [2] and
resolution[3] of the Court of Appeals in CA-G.R. CV No. 57644, [4] which in turn affirmed the order of
the Regional Trial Court (RTC), Branch 8, Davao City, [5] dismissing Civil Case No. 24505-96, an
action for cancellation of title and damages for alleged lack of legal personality of petitioners.
Petitioners sued respondents before the RTC Davao City for cancellation of title and damages
alleging that:
[P]laintiffs, Fausto Tancuntian, Macario Tancuntian and Cristina Cayang x x x are beneficial
owners of that parcel of land, known and designated as Lots Nos. 968 and 953 of the Cadastral
Survey of Davao, Cadastral Case No. 1, LRC Cadastral Record No. 317 both located at Matina
Pangi, Davao City, which properties are covered by Original Certificate of Title Nos. 0-328 and 0-
329 both issued by the Register of Deeds on November 9, 1976 which had not been cancelled
nor revoked; x x x sometime in May 1994, the plaintiffs discovered that defendants applied for a
free patent and fraudulently and anomalously secured titles on the portions of the same parcels
of land (Lot Nos. 968 and 953) from the Bureau of Lands; x x x upon investigation by Special
Investigator Angelita C. Corotan of the Department of Environment & Natural Resources, CENRO,
Region XI, it was found out, among others, that --

In 1986, notwithstanding the existence of O.C.T. No. 328, O.C.T. No. 329 and O.C.T. No. 317, Lots
952, 953 and 968 are surveyed under public land consolidation subdivision survey Ccs-11-000-
417 D in the name of Cecilio Gempesaw, et al., by Engr. Josefino Cacatian and was approved on
19 September 1986; Subsequent thereto, a public land subdivision survey, Csd 11-010895-D
covering Lot 10038, Cad. 102, a portion of Lot 953 and Lot 968, Csd. 102 was also made by the
Geodetic Engineer, Engr. Josefino V. Cacatian in the name of Lualhati Hilario, which was approved
on July 16, 1991; Thereafter, several patents were issued under the said survey
plan. (Underscoring Ours)

xxxxxxxxx

[R]ecently in April 17, 1996, the defendant, Juanita Mascardo caused the subdivision of the
property (OCT No. P-13245, Annex G) and thereafter unlawfully sold and transferred in favor of
the defendants Jenelyn Tarongoy, Jocelyn Aora and Maryknoll Jacqueline N. Mendoza the other
portions of the property; wherein, TCT No. T-264079 was issued in the name of Jenelyn M.
Tarongoy, TCT No. T-264080 issued to Jocelyn M. Aora; TCT No. T-264081 to Maryknoll Jacqueline
N. Mendoza, and the remaining TCT Nos. T-264075 to T-264078 retained in the name of
defendant Mascardo; xxx the Bureau of Lands which caused the issuance of free patents and
titles to the defendants on the same subject properties long covered by OCT Nos. 0-328 (Annex
A) and 0-329 (Annex B), has no more control nor jurisdiction over said properties which had long
ceased to be part of the public domain and had already become the private properties of the
plaintiffs herein; xxx the free patents and original certificates of title issued by the Register of
Deeds in the names of the defendants on the subject property are patently null and void
and should be cancelled, including the subsequent titles derived therefrom; x x x.[6](Underscoring
supplied)

Petitioners prayed for the issuance of a temporary restraining order and/or writ of preliminary
injunction enjoining respondents from selling, alienating and disposing the subject properties or
any portion thereof during the pendency of the case. They also sought the cancellation and
nullification of all the titles of the subject properties in the names of respondents as well as the
reconveyance thereof to petitioners, plus damages and attorneys fees. [7]
Private respondents filed an opposition [8] to the motion for the issuance of a writ of
preliminary injunction on the ground that petitioners had neither the legal personality nor the
authority to institute the proceedings for cancellation of title.
In their rejoinder to the opposition, petitioners clarified that they were not asking for the
reversion of subject private land to the public domain, which would have required the
participation of the Director of Lands or the Secretary of the Department of Environment and
Natural Resources (DENR) through the Solicitor General. In essence, petitioners were seeking the
quieting of their original titles that would ultimately lead to the cancellation of private
respondents unlawfully issued and void free patent titles on the same private land. [9]
On July 23, 1996, the RTC Branch 15 of the RTC of Davao City motu propio dismissed the
complaint because only the Republic of the Philippines through the Solicitor General can file a
case for cancellation of title on the ground of fraud in the processing and issuance of the said
title (Lee Hong Kok vs. David, 48 SCRA 346; Manonang vs. Consolacion, 12 Phil. 342).[10]
Petitioners filed motions for reconsideration of the said order [11] and inhibition of the presiding
judge. On September 20, 1996, Judge Salvador Ibarreta, Jr. of Branch 8 of the Davao City RTC, to
whom the case was re-raffled after Judge Quitains inhibition, granted the motion for
reconsideration and set aside the order of dismissal. In reinstating the complaint, Judge Ibarreta
reasoned that it was error for the court (Judge Quitain, Branch 15) to have dismissed the case
without a prior motion to dismiss having been filed by private respondents. [12]
On October 8, 1996, private respondents Vicente Gempesaw, et al. filed their answer[13] to
the complaint, while Jofre Saniel, another respondent, filed a motion to dismiss. [14] They
principally invoked petitioners lack of legal personality and authority to institute the action for
cancellation of their titles.
Respondent Saniel asserted that since the action was for the cancellation of the original
certificates of title issued to them through free patent, it was only the Government through the
Solicitor General or his duly authorized representative who could institute the reversion
proceeding under Section 101 of CA 141, (Public Land Act):

Section 101. All actions for the reversion to the Government of lands of the public domain or
improvements therein shall be instituted by the Solicitor General or the officer acting in his
stead, in the proper courts, in the name of the Republic of the Philippines.

Private respondent Saniel also cited the case of Lee Hong Kok, et al. vs. David,[15] where this
Court held:

xxx Only the Government, represented by the Director of Lands, or the Secretary of Agriculture
and Natural Resources, can bring an action to cancel a void certificate of title issued pursuant to
a void patent. xxx. Whether the grant was in conformity with the law or not is a question which
the government may raise, but until it is raised by the government and set aside, the defendant
cannot question it. The legality of the grant is a question between the grantee and the
government.

Eventually, Judge Ibarreta issued an order on December 26, 1996 dismissing the complaint
because:

Defendants titles are Free Patent Titles issued by the Bureau of Lands upon application. Whether
the grant was in conformity with the law or not is a question which only the government can
raise, but until it is so raised by the government and set aside, the defendant cannot question
it (Salazar vs. Court of Appeals, 87 Phil. 456). This Court cannot choose to deviate from the
aforesaid rule and therefore is constrained to have this case dismissed. [16]

Petitioners appealed to the Court of Appeals raising a lone issue:

[W]hether plaintiffs-appellants should be sustained in their contention that they have the legal
personality to institute the instant proceeding. [17]

Unfortunately for petitioners, the appellate court affirmed the trial court and held:

There is no dispute that the titles registered in the names of the defendants-appellees are free
patent titles issued by the State through the Bureau of Lands. This fact is admitted in paragraph
3 of the plaintiff-appellants complaint, and which free patent titles are all original certificates of
titles. [See Annexes C, D, E, F, G, H, I, and I-1, Complaint]. While they denied that their action
was one of reversion, plaintiffs-appellants deliberately overlooked the fact that the defendants-
appellees titles were derived from the patent in the name of the Republic of the Philippines.

The present action of a reversion proceedings, and not for quieting of titles as claimed by
plaintiffs-appellants, they [plaintiffs-appellants] not being the grantor but the government of the
Republic of the Philippines, the real party in interest is the Republic of the Philippines to whom
the property would revert if it is ever established, after appropriate proceedings, that the free
patent titles issued to the grantees are indeed vulnerable to annulment on the ground that the
grantees failed to comply with the conditions imposed by the law (Annex E,, Ibid., p. 130). Thus,
not being owners, much less grantors, plaintiffs-appellants cannot as for cancellation or
reconveyance.

As a consequence of the above it is Our considered view, and so hold, that the court a
quo properly dismissed the case for lack of legal personality of plaintiffs-appellants to maintain
the present suit.

WHEREFORE, the order appealed from is hereby AFFIRMED. [18]

Undaunted, petitioners filed this petition.

Petitioners contend that the two courts below erred in dismissing the civil case for
cancellation of respondents titles with damages since they (petitioners) were the real parties in
interest. Their position is that the suit they initially filed in the RTC of Davao City was not an
action for reversion (wherein the real party in interest would have indeed been the Republic of
the Philippines) but rather an action for cancellation of titles with damages, since the problem
was double titling. Petitioners thus pray for the cancellation of titles and free patents fraudulently
secured by respondents over the same parcels of land which were already registered to them
through OCTs which were still intact and in their names at the time of the issuance of
respondents allegedly void titles.
Petitioners insist that since the land in question was already private land at the time it was
issued a free patent by the Bureau of Lands, the inclusion of the Republic of the Philippines as
the real party in interest was unnecessary.
All told, the crux of the controversy before us is: what is the nature of the present case and
who is the real party in interest? The resolution of this issue in turn hinges on the determination
of the nature of the land in dispute, that is, whether it was already private land or still public land
at the time the free patents (and the second set of OCTs) were issued by the Bureau of Lands.
We grant the petition.
This legal dispute does not involve an action for the reversion of land to the public domain
but one for the cancellation of null and void free patents over private land. We have already
distinguished these two causes of action in Heirs of Ambrocio Kionisala vs. Heirs of Honorio
Dacut:[19]

An ordinary civil action for declaration of nullity of free patents and certificates of title is not the
same as an action for reversion (Heirs of Marciano Nagano v. Court of Appeals , G.R. No. 123231,
17 November 1997, 282 SCRA 43, 49-51). The difference between them lies in the allegations as
to the character of ownership of the realty whose title is sought to be nullified. In an action for
reversion, the pertinent allegations in the complaint would admit State ownership of the disputed
land. Hence in Gabila v. Barriga (No. L-28917, 30 September 1971, 41 SCRA 131, 135) where the
plaintiff in his complaint admits that he has no right to demand the cancellation or amendment
of the defendants title because even if the title were canceled or amended the ownership of the
land embraced therein or of the portion affected by the amendment would revert to the public
domain, we ruled that the action was for reversion and that the only person or entity entitled to
relief would be the Director of Lands.

On the other hand, a cause of action for declaration of nullity of free patent and certificate of
title would require allegations of the plaintiffs ownership of the contested lot prior to the issuance
of such free patent and certificate of title as well as the defendants fraud or mistake; as the case
may be, in successfully obtaining these documents of title over the parcel of land claimed by
plaintiff. In such a case, the nullity arises strictly not from the fraud or deceit but from the fact
that the land is beyond the jurisdiction of the Bureau of Lands to bestow and whatever patent or
certificate of title obtained therefor is consequently void ab initio (Ramirez v. Court of
Appeals, No. L-28591, 31 October 1969, 30 SCRA 297, 301). The real party in interest is not the
State but the plaintiff who alleges a pre-existing right of ownership over the parcel of land in
question even before the grant of title to the defendant. In Heirs of Marciano Nagano v. Court of
Appeals, (No. L-28917, 30 September 1971, 41 SCRA 131, 135) we ruled

x x x from the allegations in the complaint x x x private respondents claim ownership of the
2,250 square meter portion for having possessed it in the concept of an owner, openly,
peacefully, publicly, continuously and adversely since 1920. This claim is an assertion that the lot
is private land x x x Consequently, merely on the basis of the allegations in the complaint, the lot
in question is apparently beyond the jurisdiction of the Director of Bureau of Lands and could not
be the subject of a Free Patent. Hence, the dismissal of private respondents complaint was
premature and trial on the merits should have been conducted to thresh out evidentiary matters.
It would have been entirely different if the action were clearly for reversion, in which case, it
would have to be instituted by the Solicitor General pursuant to Section 101 of C.A. No. 141 x x x

It is obvious that private respondents allege in their complaint all the facts necessary to seek the
nullification of the free patents as well as the certificates of title covering Lot 1015 and Lot 1017.
Clearly, they are the real parties in interest in light of their allegations that they have always
been the owners and possessors of the two (2) parcels of land even prior to the issuance of the
documents of title in petitioners favor, hence the latter could only have committed fraud in
securing them x x x. (Underscoring Supplied)

In the same manner, petitioners in this case claim continuing ownership over the subject
parcels of land since 1976, as evidenced by OCT No. 0-328 and 0-329 in their names. This can
only mean, according to petitioners, that the free patents and OCTs issued to respondents in
1990 and 1991 were null and void because the land was their private property, and as such,
could not have been validly disposed of by the Government. Conformably with our ruling in Heirs
of Ambrocio Kionisala, petitioners are therefore the real party in interest in this case.
 Furthermore, Rule 3, Section 2 of the 1997 Rules of Civil Procedure states:

Section 2. Parties in interest - A real party in interest is the party who stands to be benefited or
injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless
otherwise authorized by law or these Rules, every action must be presented or defended in the
name of the real party in interest.

Since, petitioners are the real parties in interest under the rules, then they have the legal
personality to sue respondents. The land subject of the controversy is titled either in their names
or that of their predecessors-in-interest. They stand to be benefited or injured by whatever
decision the court may decree. Hence, they are entitled to the opportunity to defend their titles
and present their side of the controversy since their titles date even earlier than those of the
patent holders-respondents.
The jurisdiction of the Director of Lands is limited to public land and does not extend to land
already privately owned. A free patent which purports to convey land to which the Government
no longer has title at the time of its issuance does not vest any title in the patentee as against
the registered owner.[20]
Lee Hong Kok, cited by respondents, is not in point since the nature of the land involved
there was different. The subject matter of Lee Hong Kok was reclaimed land which was correctly
categorized as public land; the land involved in this case is private land.
In sum, we rule that petitioners have the legal personality to institute Civil Case No. 24505-
988 and see it through its proper conclusion. Petitioners should prove during the trial on the
merits that Lot Nos. 968 and 953 are in fact registered in their names and that they are, indeed,
the owners thereof.
WHEREFORE, the petition is hereby GRANTED. Let this case be REMANDED to the Regional
Trial Court of Davao City, Branch 8, for trial and resolution on the merits as expeditiously as
possible.
SO ORDERED.
Panganiban, J., (Chairman), Sandoval-Gutierrez, and Garcia, JJ., concur.
Republic of the Philippines
Supreme Court
Manila

SECOND DIVISION

NANCY T. LORZANO, G.R. No. 189647

Petitioner,
Present:

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

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

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

DECISION

REYES, J.:

Nature of the Petition

This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by Nancy T.
Lorzano (petitioner) assailing the Court of Appeals (CA) Decision [1] dated March 18, 2009 and
Resolution[2] dated September 16, 2009 in CA-G.R. CV No. 87762 entitled Juan Tabayag, Jr. v.
Nancy T. Lorzano.
 The Antecedent Facts

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

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

After the petitioners eldest son finished college, her siblings asked her to return to them
the possession of the subject property so that they could partition it among themselves.
However, the petitioner refused to relinquish her possession of the subject property claiming that
she purchased the subject property from their father as evidenced by a Deed of Absolute Sale of
Real Property[4] executed by the latter on May 25, 1992.

The respondent claimed that their father did not execute the said deed of sale. He pointed
out that the signature of their father appearing in the said deed of sale was a forgery as the
same is markedly different from the real signature of Tabayag.

Further, the respondent asserted that the said deed of sale was acknowledged before a
person who was not a duly commissioned Notary Public. The deed of sale was acknowledged by
the petitioner before a certain Julian P. Cabaes (Cabaes) on May 25, 1992 at Iriga City. However,
as per the Certification[5] issued by the Office of the Clerk of Court of the RTC on May 16, 2002,
Cabaes has never been commissioned as a Notary Public for and in the Province of Camarines
Sur and in the Cities of Iriga and Naga.

The respondent alleged that the petitioner purposely forged the signature of Tabayag in the said
deed of sale to deprive him and their other siblings of their share in the subject property. He then
averred that the subject property was already covered by Original Certificate of Title (OCT) No.
1786[6] issued by the Register of Deeds of Iriga City on January 9, 2001 registered under the
name of the petitioner. OCT No. 1786 was issued pursuant to Free Patent No. 051716 which was
procured by the petitioner on June 24, 1996.

For her part, the petitioner maintained she is the owner of the subject parcel of land having
purchased the same from Tabayag as evidenced by the May 25, 1992 deed of sale. Further, the
petitioner asserted that the respondent failed to establish that the signature of Tabayag
appearing on the said deed of sale was a forgery considering that it was not submitted for
examination by a handwriting expert.

The RTC Decision

On April 28, 2006, the RTC rendered an Amended Decision [7] the decretal portion of which
reads:

WHEREFORE, Judgment is hereby rendered[:]

a. Declaring the supposed Deed of Sale null and void and of no legal
effect;

b. Ordering the [petitioner] to reconvey to the heirs of the late Juan

Tabayag, Sr. the land subject matter of this case[;]

c. Declaring the property described in the complaint and in the spurious

deed of sale to be owned in common by the heirs of Juan Tabayag, Sr. as
part of their inheritance from said Juan Tabayag, Sr[.];

d. Ordering [petitioner] to pay plaintiff the sum of One Hundred Thousand

Pesos (P100,000.00)by way of moral damages;

e. Ordering defendant to pay plaintiff the attorneys fees in the sum of

Fifteen Thousand Pesos (P15,000.00), based on quantum meruit;
 f. Dismissing the counterclaim for lack of merit[;]

g. Costs against the defendant.

SO ORDERED.[8]

The RTC opined that a cursory comparison between the signature of Tabayag appearing on
the said deed of sale and his signatures appearing on other documents would clearly yield a
conclusion that the former was indeed a forgery. Moreover, the RTC asserted that the nullity of
the said May 25, 1992 deed of sale all the more becomes glaring considering that the same was
purportedly acknowledged before a person who is not a duly commissioned Notary Public.

The CA Decision

Thereafter, the petitioner appealed the decision with the CA. On March 18, 2009, the CA
rendered the assailed decision affirming in toto the RTC decision.[9] The CA held that the
testimony of a handwriting expert in this case is not indispensable as the similarity and
dissimilarity between the questioned signature of Tabayag as compared to other signatures of
the latter in other documents could be determined by a visual comparison.

Further, the CA upheld the award of moral damages and attorneys fees in favor of the
respondent as the petitioners conduct caused great concern and anxiety to the respondent and
that the latter had to go to court and retain the services of counsel to pursue his rights and
protect his interests.

Undaunted, the petitioner instituted the instant petition for review on certiorari before this
Court asserting the following: (1) the questioned signature of Tabayag in the May 25, 1992 deed
of sale could not be declared spurious unless first examined and declared to be so by a
handwriting expert; (2) considering that the subject property was registered under the
petitioners name pursuant to a free patent, reconveyance of the same in favor of the respondent
is improper since only the Government, through the Office of the Solicitor General (OSG), could
assail her title thereto in an action for reversion; and (3) the respondent is not entitled to an
award for moral damages and attorneys fees.

In his Comment,[10] the respondent claimed that the issues raised in the instant petition are
factual in nature and, hence, could not be passed upon by this Court in a petition for review
on certiorari under Rule 45. Likewise, the respondent asserted that the petitioners free patent,
having been issued on the basis of a falsified document, does not create a right over the subject
property in her favor.

Issues

In sum, the threshold issues for resolution are the following: (a) whether the lower courts
erred in declaring the May 25, 1992 deed of sale a nullity; (b) whether an action for
reconveyance is proper in the instant case; and (c) whether the respondent is entitled to an
award of moral damages and attorneys fees.

The Courts Ruling

First and Third Issues: Nullity of the Deed of Sale and Award of Moral Damages and Attorneys
Fees

This Court shall jointly discuss the first and third issues as the resolution of the same are
interrelated.

Primarily, Section 1, Rule 45 of the Rules of Court categorically states that the petition filed
shall raise only questions of law, which must be distinctly set forth. A question of law arises when
there is doubt as to what the law is on a certain state of facts, while there is a question of fact
when the doubt arises as to the truth or falsity of the alleged facts. For a question to be one of
law, the same must not involve an examination of the probative value of the evidence presented
by the litigants or any of them. The resolution of the issue must rest solely on what the law
provides on the given set of circumstances. Once it is clear that the issue invites a review of the
evidence presented, the question posed is one of fact. [11]
 That the signature of Tabayag in the May 25, 1992 deed of sale was a forgery is a
conclusion derived by the RTC and the CA on a question of fact. The same is conclusive upon this
Court as it involves the truth or falsehood of an alleged fact, which is a matter not for this Court
to resolve.[12] Where a petitioner casts doubt on the findings of the lower court as affirmed by
the CA regarding the existence of forgery is a question of fact. [13]

In any case, the CA aptly ruled that a handwriting expert is not indispensable to prove that
the signature of Tabayag in the questioned deed of sale was indeed a forgery. It is true that the
opinion of handwriting experts are not necessarily binding upon the court, the experts function
being to place before the court data upon which the court can form its own opinion. Handwriting
experts are usually helpful in the examination of forged documents because of the technical
procedure involved in analyzing them. But resort to these experts is not mandatory or
indispensable to the examination or the comparison of handwriting. A finding of forgery does not
depend entirely on the testimonies of handwriting experts, because the judge must conduct an
independent examination of the questioned signature in order to arrive at a reasonable
conclusion as to its authenticity. [14]

For the same reason, we would ordinarily disregard the petitioners allegation as to the
propriety of the award of moral damages and attorneys fees in favor of the respondent as it is a
question of fact. Thus, questions on whether or not there was a preponderance of evidence to
justify the award of damages or whether or not there was a causal connection between the given
set of facts and the damage suffered by the private complainant or whether or not the act from
which civil liability might arise exists are questions of fact. [15]

Essentially, the petitioner is questioning the award of moral damages and attorneys fees in
favor of the respondent as the same is supposedly not fully supported by evidence. However, in
the final analysis, the question of whether the said award is fully supported by evidence is a
factual question as it would necessitate whether the evidence adduced in support of the same
has any probative value. For a question to be one of law, it must involve no examination of the
probative value of the evidence presented by the litigants or any of them. [16]

Nevertheless, a review of the amount of moral damages actually awarded by the lower courts in
favor of the respondent is necessary.

Here, the lower courts ordered the petitioner to pay the respondent moral damages in the
amount of P100,000.00. We find the said amount to be excessive.

Moral damages are not intended to enrich the complainant at the expense of the defendant.
Rather, these are awarded only to enable the injured party to obtain means, diversions or
amusements that will serve to alleviate the moral suffering that resulted by reason of the
defendants culpable action. The purpose of such damages is essentially indemnity or reparation,
not punishment or correction. In other words, the award thereof is aimed at a restoration within
the limits of the possible, of the spiritual status quo ante; therefore, it must always reasonably
approximate the extent of injury and be proportional to the wrong committed. [17]

Accordingly, the amount of moral damages must be reduced to P30,000.00, an amount

reasonably commensurate to the injury sustained by the respondent.

Second Issue: Propriety of the Reconveyance of the Subject Property to the Heirs of the late Juan
Tabayag

The petitioner asserted that the CA erred in not finding that her ownership over the subject
property was by virtue of a free patent issued by the government and, thus, even assuming that
the subject deed of sale is invalid, her title and ownership of the subject property cannot be
divested or much less ordered reconveyed to the heirs of Tabayag.

Simply put, the petitioner points out that the subject property, being acquired by her through a
grant of free patent from the government, originally belonged to the public domain. As such, the
lower courts could not order the reconveyance of the subject property to the heirs of Tabayag as
the latter are not the original owners thereof. If at all, the subject property could only be ordered
reverted to the public domain.

An issue cannot be raised for the first time on appeal as it

is already barred by estoppel.
 This Court notes that the foregoing argument is being raised by the petitioner for the first
time in the instant petition. It is well-settled that no question will be entertained on appeal unless
it has been raised in the proceedings below. Points of law, theories, issues and arguments not
brought to the attention of the lower court, administrative agency or quasi-judicial body, need
not be considered by a reviewing court, as they cannot be raised for the first time at that late
stage. Basic considerations of fairness and due process impel this rule. Any issue raised for the
first time on appeal is barred by estoppel.[18]

Accordingly, the petitioners attack on the propriety of the action for reconveyance in this
case ought to be disregarded. However, in order to obviate any lingering doubt on the resolution
of the issues involved in the instant case, this Court would proceed to discuss the cogency of the
petitioners foregoing argument.

Title emanating from a free patent fraudulently secured

does not become indefeasible.

The petitioner asserts that the amended complaint for annulment of document, reconveyance
and damages that was filed by the respondent with the RTC is a collateral attack on her title over
the subject property. She avers that, when the said amended compliant was filed, more than a
year had already lapsed since OCT No. 1786 over the subject property was issued under her
name. Thus, the petitioner maintains that her title over the subject property is already
indefeasible and, hence, could not be attacked collaterally.

We do not agree.

A Free Patent may be issued where the applicant is a natural-born citizen of the
Philippines; is not the owner of more than twelve (12) hectares of land; has continuously
occupied and cultivated, either by himself or through his predecessors-in-interest, a tract or
tracts of agricultural public land subject to disposition, for at least 30 years prior to the effectivity
of Republic Act No. 6940; and has paid the real taxes thereon while the same has not been
occupied by any person.[19]

Once a patent is registered and the corresponding certificate of title is issued, the land
covered thereby ceases to be part of public domain and becomes private property, and the
Torrens Title issued pursuant to the patent becomes indefeasible upon the expiration of one year
from the date of such issuance. [20] However, a title emanating from a free patent which was
secured through fraud does not become indefeasible, precisely because the patent from whence
the title sprung is itself void and of no effect whatsoever. [21]

On this point, our ruling in Republic v. Heirs of Felipe Alejaga, Sr. [22] is instructive:

True, once a patent is registered and the corresponding certificate of title [is] issued,
the land covered by them ceases to be part of the public domain and becomes
private property. Further, the Torrens Title issued pursuant to the patent becomes
indefeasible a year after the issuance of the latter. However, this indefeasibility of a
title does not attach to titles secured by fraud and misrepresentation. Well-settled is
the doctrine that the registration of a patent under the Torrens System does not by
itself vest title; it merely confirms the registrants already existing one. Verily,
registration under the Torrens System is not a mode of acquiring ownership.
[23]
(citations omitted)

A fraudulently acquired free patent may only be assailed

by the government in an action for reversion.

Nonetheless, a free patent that was fraudulently acquired, and the certificate of title
issued pursuant to the same, may only be assailed by the government in an action for reversion
pursuant to Section 101 of the Public Land Act. [24] In Sherwill Development Corporation v. Sitio
Sto. Nio Residents Association, Inc.,[25] this Court pointed out that:

It is also to the public interest that one who succeeds in fraudulently acquiring title
to a public land should not be allowed to benefit therefrom, and the State should,
therefore, have an even existing authority, thru its duly-authorized officers, to
inquire into the circumstances surrounding the issuance of any such title, to the end
that the Republic, thru the Solicitor General or any other officer who may be
 authorized by law, may file the corresponding action for the reversion of the land
involved to the public domain, subject thereafter to disposal to other qualified
persons in accordance with law. In other words, the indefeasibility of a title over
land previously public is not a bar to an investigation by the Director of Lands as to
how such title has been acquired, if the purpose of such investigation is to
determine whether or not fraud had been committed in securing such title in order
that the appropriate action for reversion may be filed by the Government. [26]

In Kayaban, et al. v. Republic, et al.,[27] this Court explained the reason for the rule that
only the government, through the OSG, upon the recommendation of the Director of Lands, may
bring an action assailing a certificate of title issued pursuant to a fraudulently acquired free
patent:

Since it was the Director of Lands who processed and approved the
applications of the appellants and who ordered the issuance of the corresponding
free patents in their favor in his capacity as administrator of the disposable lands of
the public domain, the action for annulment should have been initiated by him, or at
least with his prior authority and consent. [28]

An action for reconveyance is proper in this case.

However, the foregoing rule is not without an exception. A recognized exception is that
situation where plaintiff-claimant seeks direct reconveyance from defendant public land
unlawfully and in breach of trust titled by him, on the principle of enforcement of a constructive
trust.[29]

A private individual may bring an action for reconveyance of a parcel of land even if the
title thereof was issued through a free patent since such action does not aim or purport to re-
open the registration proceeding and set aside the decree of registration, but only to show that
the person who secured the registration of the questioned property is not the real owner thereof.
[30]

In Roco, et al. v. Gimeda,[31] we stated that if a patent had already been issued through
fraud or mistake and has been registered, the remedy of a party who has been injured by the
fraudulent registration is an action for reconveyance, thus:

It is to be noted that the petition does not seek for a reconsideration of the
granting of the patent or of the decree issued in the registration proceeding. The
purpose is not to annul the title but to have it conveyed to plaintiffs. Fraudulent
statements were made in the application for the patent and no notice thereof was
given to plaintiffs, nor knowledge of the petition known to the actual possessors and
occupants of the property. The action is one based on fraud and under the law, it
can be instituted within four years from the discovery of the fraud. (Art. 1146, Civil
Code, as based on Section 3, paragraph 43 of Act No. 190.) It is to be noted that as
the patent here has already been issued, the land has the character of registered
property in accordance with the provisions of Section 122 of Act No. 496, as
amended by Act No. 2332, and the remedy of the party who has been injured by the
fraudulent registration is an action for reconveyance. (Director of Lands vs.
Registered of Deeds, 92 Phil., 826; 49 Off. Gaz. [3] 935; Section 55 of Act No. 496.)
[32]

In the same vein, in Quiiano, et al. v. Court of Appeals, et al.,[33] we stressed that:

The controlling legal norm was set forth in succinct language by Justice Tuason in a
1953 decision, Director of Lands v. Register of Deeds of Rizal. Thus: The sole
remedy of the land owner whose property has been wrongfully or erroneously
registered in another's name is, after one year from the date of the decree, not to
set aside the decree, as was done in the instant case, but, respecting the decree as
incontrovertible and no longer open to review, to bring an ordinary action in the
ordinary court of justice for reconveyance or, if the property has passed into the
hands of an innocent purchaser for value, for damages." Such a doctrine goes back
to the 1919 landmark decision of Cabanos v. Register of Deeds of Laguna. If it were
otherwise the institution of registration would, to quote from Justice Torres, serve
 "as a protecting mantle to cover and shelter bad faith ...." In the language of the
then Justice, later Chief Justice, Bengzon: "A different view would encourage fraud
and permit one person unjustly to enrich himself at the expense of another." It
would indeed be a signal failing of any legal system if under the circumstances
disclosed, the aggrieved party is considered as having lost his right to a property to
which he is entitled. It is one thing to protect an innocent third party; it is entirely a
different matter, and one devoid of justification, if [deceit] would be rewarded by
allowing the perpetrator to enjoy the fruits of his nefarious deed. As clearly revealed
by the undeviating line of decisions coming from this Court, such an undesirable
eventuality is precisely sought to be guarded against. So it has been before; so it
should continue to be.[34] (citations omitted)

Here, the respondent, in filing the amended complaint for annulment of documents,
reconveyance and damages, was not seeking a reconsideration of the granting of the patent or
the decree issued in the registration proceedings. What the respondent sought was the
reconveyance of the subject property to the heirs of the late Tabayag on account of the fraud
committed by the petitioner. Thus, the lower courts did not err in upholding the respondents right
to ask for the reconveyance of the subject property. To hold otherwise would be to make
the Torrens system a shield for the commission of fraud.

That the subject property was not registered under the name of the heirs of Tabayag prior
to the issuance of OCT No. 1786 in the name of the petitioner would not effectively deny the
remedy of reconveyance to the former. An action for reconveyance is a legal and equitable
remedy granted to the rightful landowner, whose land was wrongfully or erroneously registered
in the name of another, to compel the registered owner to transfer or reconvey the land to him.
[35]

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

At this juncture, we deem it necessary to reiterate our disquisition in Naval v. Court of

Appeals,[37] thus:

The fact that petitioner was able to secure a title in her name did not operate to
vest ownership upon her of the subject land. Registration of a piece of land under
the Torrens System does not create or vest title, because it is not a mode of
acquiring ownership. A certificate of title is merely an evidence of ownership or title
over the particular property described therein. It cannot be used to protect a
usurper from the true owner; nor can it be used as a shield for the commission of
fraud; neither does it permit one to enrich himself at the expense of others. Its
issuance in favor of a particular person does not foreclose the possibility that the
real property may be co-owned with persons not named in the certificate, or that it
may be held in trust for another person by the registered owner. [38] (citations
omitted)

WHEREFORE, in consideration of the foregoing disquisitions, the petition is DENIED. The

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

SO ORDERED.

BIENVENIDO L. REYES
Associate Justice

WE CONCUR:
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 146030 December 3, 2002

REPUBLIC OF THE PHILIPPINES, represented by the Department of Environment and Natural
Resources,petitioner,
vs.
HEIRS OF FELIPE ALEJAGA SR., represented by ROQUETA ALEJAGA,
FELIPE ALEJAGA JR., MARIA DULLA ALEJAGA, FELIPE ALEJAGA III, ROQUETA ALEJAGA, JENNIFER
ALEJAGA,
EVERETTE CAPUNDAN, AND LYNETTE ALEJAGA; THE PHILIPPINE NATIONAL BANK and THE
REGISTER OF DEEDS OF ROXAS CITY, respondents.

DECISION

PANGANIBAN, J.:

We reiterate the familiar doctrine that a free patent obtained through fraud or misrepresentation
is void. Furthermore, the one-year prescriptive period provided in the Public Land Act does not
bar the State from asking for the reversion of property acquired through such means.

Statement of the Case

Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the
November 15, 2000 Decision1 of the Court of Appeals (CA) in CA-GR CV No. 44568. The decretal
portion of the challenged Decision reads as follows:

"WHEREFORE, the appealed decision is hereby REVERSED, SET ASIDE and RECALLED." 2

The Facts

The factual antecedents of the case are summarized by the CA thus:

"On December 28, 1978, [Respondent] Felipe Alejaga, Sr. x x x filed with the District Land
Office, Roxas City, Free Patent Application No. (VI-2) 8442 covering a parcel of land
identified as Lot 1, Mli-06-000020-D, with an area of .3899 hectares, more or less located
at Dumolog, Roxas City (Exh. "A"; Exh "9"). It appears that on December 27, 1978, when
the application was executed under oath, Efren L. Recio, Land Inspector, submitted a
report of his investigation and verification of the land to the District Land Office, Bureau of
Lands, City of Roxas. On March 14, 1979, the District Land Officer of Roxas City approved
the application and the issuance of [a] Free Patent to the applicant. On March 16, 1979,
the patent was also ordered to be issued and the patent was forwarded to defendant
Register of Deeds, City of Roxas, for registration and issuance of the corresponding
Certificate of Title. Thereafter, Original Certificate of Title No. P-15 Free Patent No. (VI-2)
3358 was issued to [respondent] by defendant Register of Deeds.

"On April 4, 1979, the heirs of Ignacio Arrobang, through counsel in a letter-complaint
requested the Director of Lands, Manila, for an investigation of the District Land Officer,
Roxas City, and the Regional Office, Region VI, Iloilo City, for irregularities in the issuance
of the title of a foreshore land in favor of [respondent]. Isagani Cartagena, Supervising
Special Investigator, Legal Division, Land Management Bureau (formerly Bureau of Lands)
submitted his Report dated April 17, 1989. The Chief, Legal Division, Land Management
Bureau, Manila, recommended to the Director of Lands appropriate civil proceeding for the
cancellation of Free Patent Title No. (VI-2) 3358 and the corresponding Original Certificate
of Title No. P-15 in the name of [respondent].

"In the meantime, [respondent] obtained a NACIDA loan under the Cottage Industry
Guarantee and Loan Fund by the defendant Philippine National Bank (hereinafter referred
to as PNB) executed in Cebu City in the amount of P100,000.00 on August 18, 1981. The
loan was secured by a real estate mortgage in favor of defendant PNB. The promissory
note of appellant was annotated at the back of the title.
 "On April 18, 1990, the government through the Solicitor General instituted an action for
Annulment/Cancellation of Patent and Title and Reversion against [respondent], the PNB of
Roxas City and defendant Register of Deeds of Roxas City covering Free Patent Application
(VI-2) 8442 of the parcel of land with an area of .3899 hectares more or less located at
Dumolog, Roxas City.

"On November 17, 1990, while the case is pending hearing, [respondent] died. He was
substituted by his wife Roqueta Alejaga and his children, namely: Everette Alejaga,
Lynnette Alejaga, Felipe Alejaga, Jr., Maria Dulla Alejaga. Roqueta Alejaga, Jennifer Alejaga
and Felipe Alejaga III.

xxx xxx xxx

"After hearing, the [trial] court in its dispositive portion decreed as follows:

WHEREFORE, judgment is rendered declaring that the approval of Free Patent Application
No. 3358 and issuance of Original Certificate of Title No. P-15 in the name of Felipe Alejaga
is by means of fraud hence, null and void ab initio and the court orders:

a) the cancellation of the approval of the application No. (VI-2) 8442 covering Lot
No. 1, Mli-06-000020-D with an area of .3899 hectares, more or less, located at
Dumulog, Roxas City;

b) the cancellation of Original Certificate of Title No. P-15, Free Patent No. (VI-2)
3358 in the name of Felipe Alejaga;

c) the land covered thereby as above described is reverted to the mass of the
public domain;

d) the defendants, Heirs of Felipe Alejaga Sr. or defendant, Philippine National

Bank, Roxas City Branch, to surrender the owners duplicate copy of above
described Original Certificate of Title No. P-15 to the Register of Deeds (now
Registries of Land Titles and Deeds), Roxas City;

e) the defendant, Register of Deeds, Roxas City, to cancel Original Certificate of

Title No. P-15 and the owners duplicate copy of said title surrendered by above
stated defendants;

f) defendants, Philippine National Bank, cross-claim is dismissed.

"Costs against the defendants Heirs of Felipe, Alejaga, Sr." 3

Ruling of the Court of Appeals

In reversing the RTC, the CA ruled that petitioner failed to prove its allegation that respondents
had obtained the free patent and the Certificate of Title through fraud and
misrepresentation.4 The appellate court likewise held that, assuming there was misrepresentation
or fraud as claimed by petitioner, the action for reversion should have been brought within one
(1) year from the registration of the patent with the Registry of Deeds. 5

Further, the CA brushed aside as hearsay Isagani Cartagenas testimony that Land Inspector
Efren L. Recio had not conducted an investigation on the free patent application of Felipe Alejaga
Sr.6 The CA added that petitioner had failed to support its claim that the lot covered by
respondents free patent and title was foreshore land. 7

Hence, this Petition.8

Issues
Petitioner raises the following issues for this Courts consideration:

"I

The Honorable Court of Appeals erred in not finding that the case is already final and executory
as against respondent PNB.

"II

The Court of Appeals erred in not considering that petitioner has proven the allegations to the
Complaint.

"III

The Honorable Court of Appeals erred in declaring that the action for reversion is unavailing." 9

Simply stated, the issues can be summed up into two: (1) the efficacy of the grant of the free
patent and (2) the indefeasibility of the Certificate of Title issued in consequence thereof.

This Courts Ruling

The Petition is meritorious.

First Issue:

Efficacy of the Grant

Petitioner argues that it has proven fraud in the issuance of Respondent Alejagas free patent
and Certificate of Title.10 It also avers that Respondent PNB has failed to file a timely Notice of
Appeal.

On the other hand, the Alejagas contend that they have acquired a vested right over the parcel
of land covered by OCT No. P-15 by virtue of their proven open, actual, exclusive and undisputed
possession of the land for more than 30 years. 11

At the outset, we must immediately clarify that the records show receipt by Respondent PNB of a
copy of the Decision on October 27, not on October 3, 1993 as alleged by petitioner. 12 Further,
the bank filed its Notice of Appeal on November 9, 1993, within the 15-day reglementary period.

In addition, we must point out that the essential issue raised in this Petition -- the presence of
fraud -- is factual. As a general rule, this Court does not review factual matters. 13 However, the
instant case falls under one of the exceptions, because the findings of the CA conflict with those
of the RTC and with the evidence on record. 14

We begin our resolution of this issue with the well-settled rule that the party alleging fraud or
mistake in a transaction bears the burden of proof. 15 The circumstances evidencing fraud are as
varied as the people who perpetrate it in each case. 16 It may assume different shapes and forms;
it may be committed in as many different ways.17 Thus, the law requires that it be established by
clear and convincing evidence.18

In the case before us, we find that petitioner has adduced a preponderance of evidence before
the trial court, showing manifest fraud in procuring the patent. 19 This Court agrees with the RTC
that in obtaining a free patent over the lot under scrutiny, petitioner had resorted to
misrepresentation or fraud, signs of which were 20 ignored by the Court of Appeals.21

First, the issuance of the free patent was not made in accordance with the procedure laid down
by Commonwealth Act No. 141, otherwise known as the Public Land Act. 22 Under Section 91
thereof, an investigation should be conducted for the purpose of ascertaining whether the
material facts set out in the application are true. 23
Further, after the filing of the application, the law requires sufficient notice to the municipality
and the barrio where the land is located, in order to give adverse claimants the opportunity to
present their claims.24 Note that this notice and the verification and investigation of the parcel of
land are to be conducted after an application for free patent has been filed with the Bureau of
Lands.

In this case, however, Felipe Alejaga Sr.s Application for Free Patent 25 was dated and filed on
December 28, 1978. On the other hand, the Investigation & Verification Report 26 prepared by
Land Inspector Elfren L. Recio of the District Land Office of the Bureau of Lands of Roxas City was
dated December 27, 1978. In that Report, he stated that he had conducted the "necessary
investigation and verification in the presence of the applicant." Even if we accept this statement
as gospel truth, the violation of the rule cannot be condoned because, obviously, the required
notice to adverse claimants was not served.

Evidently, the filing of the application and the verification and investigation allegedly conducted
by Recio were precipitate and beyond the pale of the Public Land Act. 27 As correctly pointed out
by the trial court, investigation and verification should have been done only after the filing of the
application. Hence, it would have been highly anomalous for Recio to conduct his own
investigation and verification on December 27, 1998, a day before Felipe Alejaga Sr. filed the
Application for Free Patent.28 It must also be noted that while the Alejagas insist that an
investigation was conducted, they do not dispute the fact that it preceded the filing of the
application.29

Second, the claim of the Alejagas that an actual investigation was conducted is not sustained by
the Verification & Investigation Report itself, which bears no signature. 30 Their reliance on the
presumption of regularity in the performance of official duty 31 is thus misplaced. Since Recios
signature does not appear on the December 27, 1978 Report, there can be no presumption that
an investigation and verification of the parcel of land was actually conducted. Strangely,
respondents do not proffer any explanation why the Verification & Investigation Report was not
signed by Recio. Even more important and as will later on be explained, this alleged presumption
of regularity -- assuming it ever existed -- is overcome by the evidence presented by petitioner.

Third, the report of Special Investigator Isagani P. Cartagena has not been successfully rebutted.
In that report, Recio supposedly admitted that he had not actually conducted an investigation
and ocular inspection of the parcel of land. Cartagenas statement on Recios alleged admission
may be considered as "independently relevant." A witness may testify as to the state of mind of
another person -- the latters knowledge, belief, or good or bad faith -- and the formers
statements may then be regarded as independently relevant without violating the hearsay rule. 32

Thus, because Cartagena took the witness stand and opened himself to cross-examination, the
Investigation Report33 he had submitted to the director of the Bureau of Lands constitutes part of
his testimony. Those portions of the report that consisted of his personal knowledge, perceptions
and conclusions are not hearsay.34 On the other hand, the part referring to the statement made
by Recio may be considered as independently relevant. 35

The doctrine on independently relevant statements holds that conversations communicated to a

witness by a third person may be admitted as proof that, regardless of their truth or falsity, they
were actually made. Evidence as to the making of such statements is not secondary but primary,
for in itself it (a) constitutes a fact in issue 36 or (b) is circumstantially relevant to the existence of
such fact.37

Since Cartagenas testimony was based on the report of the investigation he had conducted, his
testimony was not hearsay and was, hence, properly admitted by the trial court. 38

Based on the foregoing badges of fraud, we sustain petitioners contention that the free patent
granted to Felipe Alejaga Sr. is void.39 Such fraud is a ground for impugning the validity of the
Certificate of Title.40 The invalidity of the patent is sufficient basis for nullifying the Certificate of
Title issued in consequence thereof, since the latter is merely evidence of the former. 41 Verily, we
must uphold petitioners claim that the issuance of the Alejagas patent and title was tainted with
fraud.42

Second Issue:

Indefeasibility of Title

Petitioner contends that the State has an imprescriptible right to cause the reversion of a piece
of property belonging to the public domain. 43 On the other hand, the Alejagas claim that,
pursuant to Section 32 of PD 152944 -- otherwise known as the Property Registration Decree -- the
one-year period for reversion has already lapsed. 45 Thus, the States Complaint for reversion
should be dismissed.

We agree with petitioner.

True, once a patent is registered and the corresponding certificate of title issued, the land
covered by them ceases to be part of the public domain and becomes private property. Further,
the Torrens Title issued pursuant to the patent becomes indefeasible a year after the issuance of
the latter.46 However, this indefeasibility of a title does not attach to titles secured by fraud and
misrepresentation.47 Well-settled is the doctrine that the registration of a patent under the
Torrens System does not by itself vest title; it merely confirms the registrants already existing
one. Verily, registration under the Torrens System is not a mode of acquiring ownership. 48

Therefore, under Section 101 of Commonwealth Act No. 141, 49 the State -- even after the lapse of
one year -- may still bring an action for the reversion to the public domain of land that has been
fraudulently granted to private individuals. 50 Further, this indefeasibility cannot be a bar to an
investigation by the State as to how the title has been acquired, if the purpose of the
investigation is to determine whether fraud has in fact been committed in securing the title. 51

In the case before us, the indefeasibility of a certificate of title cannot be invoked by the
Alejagas, whose forebear obtained the title by means of fraud. 52 Public policy demands that those
who have done so should not be allowed to benefit from their misdeed. 53 Thus, prescription and
laches will not bar actions filed by the State to recover its own property acquired through fraud
by private individuals.54 This is settled law.55

Prohibition Against Alienation or Encumbrance

Assuming arguendo that the Alejagas title was validly issued, there is another basis for the
cancellation of the grant and the reversion of the land to the public domain. Section 118 of
Commonwealth Act No. 14156 proscribes the encumbrance of a parcel of land acquired under a
free patent or homestead within five years from its grant. 57The prohibition against any alienation
or encumbrance of the land grant is a proviso attached to the approval of every application. 58

Further, corporations are expressly forbidden by law to have any right or title to, or interest in,
lands that are granted under free or homestead patents; or any improvements thereon. They are
forbidden from enjoying such right, title or interest, if they have not secured the consent of the
grantee and the approval of the secretary of the Department of Agriculture and Natural
Resources; and if such lands are to be devoted to purposes other than education, charity, or
easement of way.59

In the case at bar, Free Patent No. (VI-2) 3358 60 was approved and issued on March 14, 1979.
Corresponding Original Certificate of Title No. P-15 61 was issued on the same date. On August 18,
1981, or two (2) years after the grant of the free patent, Felipe Alejaga Sr. obtained from
Respondent PNB a loan62 in the amount of P100,000. Despite the statement on the title
certificate itself that the land granted under the free patent shall be inalienable for five (5) years
from the grant, a real estate mortgage was nonetheless constituted on the parcel of land covered
by OCT No. P-15.63 In his testimony, Gabriel D. Aranas Jr., then Cashier III of respondent bank,
even admitted that the PNB was aware of such restriction.
 "COURT You testified Mr. Aranas that you inspected the title also when you credit
investigated the loan applicant Felipe Alejaga and you have personally examined this?

A Yes, your Honor.

COURT Do you conclude that this Original Certificate of Title is a [free] patent?

A Yes, your Honor.

COURT And this [free] patent was granted on March 19, 1979.

A Yes, your honor.

COURT And as such [free] patent it cannot be alienated except [to] the government or
within five years from its issuance?

A Yes, your honor.

COURT Why did you recommend the loan?

A Because it is just a mortgage."64

Thus, the mortgage executed by Respondent Felipe Alejaga Sr. falls squarely within the term
encumbrance proscribed by Section 118 of the Public Land Act. 65 A mortgage constitutes a legal
limitation on the estate, and the foreclosure of the mortgage would necessarily result in the
auction of the property.66

As early as Pascua v. Talens,67 we have explained the rationale for the prohibition against the
encumbrance of a homestead -- its lease and mortgage included -- an encumbrance which, by
analogy, applies to a free patent. We ruled as follows:

"It is well-known that the homestead laws were designed to distribute disposable agricultural lots
of the State to land-destitute citizens for their home and cultivation. Pursuant to such benevolent
intention the State prohibits the sale or encumbrance of the homestead (Section 116) within five
years after the grant of the patent."

Further, an encumbrance on a parcel of land acquired through free patent constitutes sufficient
ground for the nullification of such grant, as provided under Commonwealth Act No. 141, which
we quote:

"SEC. 124. Any acquisition, conveyance, alienation, transfer, or other contract made or executed
in violation of any of the provisions of sections one hundred and eighteen, one hundred and
twenty, one hundred and twenty-one, one hundred and twenty-two, and one hundred and
twenty-three of this Act shall be unlawful and null and void from its execution and shall produce
the effect of annulling and canceling the grant, title, patent, or permit originally issued,
recognized or confirmed, actually or presumptively, and cause the reversion of the property and
its improvements to the State."

Mortgage over a parcel of land acquired through a free patent grant nullifies the award and
constitutes a cause for the reversion of the property to the state, as we held in Republic v. Court
of Appeals:68

"The foregoing legal provisions clearly proscribe the encumbrance of a parcel of land acquired
under a free patent or homestead within five years from the grant of such patent. Furthermore,
such encumbrance results in the cancellation of the grant and the reversion of the land to the
public domain."69

To comply with the condition for the grant of the free patent, within five years from its issuance,
Felipe Alejaga Sr. should not have encumbered the parcel land granted to him. The mortgage he
made over the land violated that condition. 70 Hence, the property must necessarily revert to the
public domain, pursuant to Section 124 of the Public Land Act.

WHEREFORE, the Petition is GRANTED and the assailed Decision SET ASIDE. The Decision of the
RTC of Roxas City (Branch 15) dated October 27, 1993 is REINSTATED. No costs.

SO ORDERED.

Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

Puno, (Chairman), J., abroad on official business.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 165114 August 6, 2008

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
MABELLE RAVELO and SPOUSES EMMANUEL and PERLITA REDONDO, respondents.

DECISION

BRION, J.:

The State seeks in this Petition for Review on Certiorari1 to secure the cancellation of title and
reversion of a real property granted to Mabelle Ravelo under a sales patent. Title to the property
has passed on to parties who now claim that they are innocent purchasers in good faith; thus
their claim cannot be defeated by any defect in the title of the original grantee.

The records show the pertinent facts summarized below.

On September 17, 1969, Jose Fernando filed a miscellaneous sales application over Lot No. 16,
Block 2 (subject lot) situated in Mabayuan Extension, Gordon Heights, Olongapo City. On June 10,
1970, he relinquished his right over the subject lot to Victoriano Mortera, Jr., who submitted his
own patent application. On June 13, 1983, one Severino Muyco also filed a miscellaneous sales
application for the same property.
The Department of Environment and Natural Resources (DENR)-Region III investigated the
conflict between the two applications. On May 31, 1989, it issued an order in favor of Jose
Fernando and Victoriano Mortera, Jr.

Prior to the DENR's action, specifically on February 16, 1989, the Director of Lands issued Sales
Patent No. 12458 covering the same subject lot to respondent Mabelle B. Ravelo (Ravelo). She
was subsequently issued Original Certificate of Title (OCT) No. P-4517 registered with the
Registry of Deeds of Olongapo City. In effect, the DENR-III's Order of May 31, 1989 in the
Fernando-Mortera-Muyco dispute was not enforced; on August 4, 1989 Jose Fernando filed a
protest against Ravelo's title.

The petitioner Republic of the Philippines (petitioner), through the DENR-III Executive Director,
filed a complaint2 for cancellation of title against Ravelo before the Olongapo Regional Trial Court
(RTC) on November 6, 1992. Assisted by the Office of the Solicitor General (OSG), the petitioner
asked for the cancellation of Ravelo's OCT No. P-4517 and Sales Patent No. 12458 on the
allegation that the issuance of the patent by the Director of Lands violated DENR Administrative
Order (A.O.) No. 20 dated May 30, 1998. This A.O. mandates that applications for sales patent
should be filed with the DENR regional office that has jurisdiction over the land applied for, not
with the Director of Lands in Manila. Ravelo's application was filed with the Director of Lands in
Manila although the subject lot is located in Olongapo City; the application should have been
filed with DENR-III in San Fernando, Pampanga. The government also accused Ravelo of fraud for
asserting in her application that the land was not occupied and was a part of the public domain.

On March 24, 1994, a notice of lis pendens (indicating the pendency of the petitioner's
complaint) was inscribed as Entry No. 7219 on Ravelo's OCT No. P-4517.

In a separate development, one Antonio Chieng filed on December 13, 1989 a collection suit
against Ravelo before the RTC of Olongapo City, which suit led to a judgment against Ravelo and
the issuance of a writ of execution. The Notice of Levy was registered with the Register of Deeds
on March 17, 1993. In the auction sale that followed, Wilson Chieng (Chieng), Antonio Chieng's
son, won as highest bidder. A certificate of sale was issued to Chieng and the sale was registered
with the Olongapo Registry of Deeds on May 25, 1993.

The respondent-spouses Emmanuel and Perlita Redondo (Redondos), who own and reside in a
property adjacent to the subject lot, subsequently bought the subject lot from Chieng. The
parties first signed an agreement for the purchase of the subject lot on May 11, 1993, and upon
payment of the agreed purchase price, executed on December 20, 1993 a deed of absolute sale.

On September 23, 1994, the final deed of sale (dated June 26, 1994) covering the subject lot in
favor of Chieng was inscribed as Entry No. 2419 on OCT No. P-4517. On the same date, Transfer
Certificate of Title (TCT) No. T-7209 covering the subject lot was issued to Chieng. Entry No. 7219
(the petitioner's complaint for cancellation and reversion) was carried at the back of Chieng's TCT
No. T-7209.

Chieng and the Redondos entered into another deed of sale in the Redondos' favor on November
21, 1994. This deed was inscribed as Entry No. 7554 at the back of TCT T-7209 on December 20,
1994. On the same day, TCT No. T-7261 covering the subject lot was issued to the Redondos.

In her Answer, Ravelo insisted that her application passed through the regular process; that she
had been in possession of the property from the time of her application; and that Mortera was
never in possession of the land.

The trial court received the government's evidence ex-parte after Ravelo failed to attend the
trial.

On January 6, 1995, the Redondos intervened, alleging that they acquired the subject lot in good
faith and for value. Emmanuel Redondo testified that Antonio Chieng's son Wilson executed a
deed of sale dated December 20, 1993 in his and his wife Perlita's favor. After their purchase,
they secured a certification from the Bureau of Forestry declaring the land for taxation purposes.
 The Trial Court Decision

On May 12, 1998, the RTC decided in the petitioner's favor and cancelled Ravelo's Sales Patent
No. 12458 and OCT No. P-4517, Chieng's TCT No. T-7209, and the Redondos' TCT No. T-7261. The
court also ordered the reversion of the land to the mass of the public domain, 3 relying on the
Bureau of Land's recommendation to cancel Ravelo's title and patent for being fraudulently
obtained. It explained that the intervenors were not buyers in good faith because they failed to
inquire with the trial court whether other cases have been filed against Ravelo. It agreed with the
OSG that the land should revert to petitioner pursuant to Commonwealth Act (C.A.) No. 141 or
the Public Land Act, as amended by Republic Act (R.A.) No. 65164 because it was sold in a public
auction within the period when the alienation of lands granted through sales patent is prohibited.

The Court of Appeals Decision

The Court of Appeals, on the Redondos' appeal docketed as CA-G.R. CV No. 60665, 5 reversed and
set aside the trial court's ruling and declared the Redondos as innocent purchasers in good faith.
The appellate court also declared the Redondos' TCT No. T-7261 valid. 6

The appellate court ruled that the Redondos were buyers in good faith because they and Chieng
entered their agreement for the purchase of the subject lot on May 11, 1993 and executed their
Deed of Sale on December 20, 1993, prior to the annotation of the notice of lis pendens on March
24, 1994, and prior as well to any awareness by the Redondos of the existence of any flaw in the
vendor's title. It explained that the Redondos' conduct carried all the badges of propriety and
regularity as they verified the regularity of the title to the property with the proper registry of
deeds before buying it. Ravelo's title, even if tainted with fraud, may be the source of a
completely legal and valid title in the hands of an innocent purchaser for value.

The Petition and the Parties' Positions

The petitioner comes to this Court in the present petition to assail the
Court of Appeals decision and submits the following assigned errors:

I.

THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN REVERSING THE DECISION OF

THE TRIAL COURT[,]CANCELING THE TITLES OF RESPONDENTS AND REVERTING [THE]
SUBJECT LAND TO THE MASS OF PUBLIC DOMAIN[,]ON THE GROUND THAT A FRAUDULENT
TITLE MAY NOT BE THE BASIS OF A VALID TITLE.

II.

THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN DECLARING THAT

RESPONDENTS REDONDO SPOUSES ARE INNOCENT PURCHASERS IN GOOD FAITH AND FOR
VALUE OF THE PROPERTY.7

The petitioner argues that the innocent purchaser for value doctrine is inapplicable because the
mother title was procured through fraud. Specifically, Ravelo's title could not have been the
source of valid titles for Chieng and the Redondos because it was void in the first place. Ravelo's
failure to disclose in her patent application that Victoriano Mortera, Jr. was in possession of the
subject lot constituted fraud and misrepresentation -- grounds for the annulment of her title. If a
public land is acquired by an applicant through fraud and misrepresentation, the State may
institute reversion proceedings even after the lapse of one year.

The petitioner likewise contends that the Redondos as vendees cannot rely solely on the face of
the title as they did not transact directly with the registered owner; they transacted with Chieng
whose right to the property was based on a certificate of sale. Thus, the Redondos merely relied
on the certificate of sale instead of examining the title covering the subject lot. To be deemed a
buyer in good faith and for value, the vendee must at least see the registered owner's duplicate
copy of the title and must have relied on it in examining the factual circumstances and in
determining if there is any flaw in the title. Petitioner finally notes that lis pendens was already
annotated on the title at the time the deed of sale was registered.

The respondent Redondos spouses counter they are not obliged by law to go beyond the
certificate of registration to determine the condition of the property. Any alleged irregularity in
the issuance of Ravelo's OCT No. P-4517 cannot affect them since a patent issued
administratively has the force and effect of a Torrens Title under Act No. 496 (the Land
Registration Act) and partakes of the nature of a certificate of title issued in judicial proceedings.
At the time they purchased the property from Chieng with the execution of their Agreement
dated May 11, 1993, there was no encumbrance on OCT No. P-4517 except the notice of levy and
certificate of sale in favor of Chieng. They had full notice of the physical condition of the land,
and no adverse claim of ownership or possession existed when they inspected the records of the
Register of Deeds and of the City Assessor. Since their residence adjoins the subject lot, they
could attest that no one used the subject lot and no improvement has been introduced showing
that there was adverse possession by any party. 8

Respondent Ravelo failed to file a comment.

Two issues are effectively submitted to us for resolution, namely:

1. Whether there is basis for the cancellation of Ravelo's original title and the reversion of the
subject lot to the public domain; and

2. Whether the Redondos are innocent purchasers in good faith and for value, whose title over
the subject lot that could defeat the petitioner's cause of action for cancellation of title and
reversion.

The Court's Ruling

We find the petition meritorious.

The Reversion Issue:

Misrepresentation in the Application

Under Section 91 of CA No. 141, the "statements made in application shall be considered
essential conditions and parts of any concession, title or permit issued on the basis of such
application, and any false statement therein or omission of facts altering or changing or
modifying the consideration of the facts set forth in such statements . . . shall ipso facto produce
the cancellation of the concession, title, or permit granted." This provision is reinforced by
jurisprudential rulings that stress in no uncertain terms the consequences of any fraud or
misrepresentation committed in the course of applying for a land patent. 9

The record shows that Ravelo, the grantee, limited herself in her Answer to the position that the
application passed through the regular process; that she had been in possession of the property
from the time of her application; and that Mortera was never in possession of the land.
Thereafter, Ravelo failed to attend trial and present evidence so that the lower court received the
government's evidence ex-parte. The Redondos, who intervened after title to the property
passed on to them, did not touch at all the misrepresentation aspect of the complaint on the
theory that, as purchasers in good faith, the misrepresentation of Ravelo cannot affect their
title.10 Thus, the presence of fraud or misrepresentation was practically an issue that the Ravelo
and the Redondos conceded to the government.

This legal situation, notwithstanding, the Court of Appeals practically disregarded the
misrepresentation issue and followed the Redondos' argument that the flaw in Ravelo's title is
immaterial because they were purchasers in good faith of a titled property. This reasoning brings
to the fore the issues of good faith and of the annotations in the original certificate of title
including the notice of lis pendens that was registered on March 24, 1994.

The Good Faith Issue

The Court of Appeals approached the issue of good faith based mainly on its view that there had
been a perfected sale prior to the annotation of the notice of lis pendens. To the appellate court,
the Redondos purchased the subject lot prior to the annotation of the notice of lis pendens by the
petitioner, and were thus without knowledge or notice of any flaw in the title. To quote the
appellate court:

Wilson Chieng and the intervenors entered into said agreement prior to the annotation of
the notice of lis pendens on March 24, 1994. The consensual contract of sale was,
therefore, perfected on May 11, 1993, prior to any awareness on the part of the
intervenors as the existence of any flaw in the vendor's title. Said agreement has been
duly notarized. There was a meeting of the minds between Wilson Chieng and spouses
Redondo; there is a determinate subject which is the land covered by OCT P-4517 and a
price certain in the sum of P85,000.00 which intervenors agreed to pay Wilson Chieng.
Intervenors are, thus, buyers in good faith and for value under the contemplation of our
laws. No evidence was presented by the other parties to refute said fact. Neither was there
any evidence introduced to assail the genuineness and due execution of the agreement. It
is a public instrument which enjoys the presumption of regularity.

We find this approach to be simplistic as it disregards, among others, the nature of a sale of
registered real property, as well as other material and undisputed developments in the case. For
example, while the appellate court was correct in its general statement about the perfection of a
contract of sale, it did not take into account that the subject matter of the sale was a registered
land to which special rules apply in addition to the general rules on sales under the Civil Code.
Section 51 of Presidential Decree No. 1529 which governs conveyances of registered lands
provides:

Sec. 51. Conveyance and other dealings by registered owner. An owner of registered land
may convey, mortgage, lease, charge or otherwise deal with the same in accordance with
existing laws. He may use such forms of deeds, mortgages, leases or other voluntary
instruments as are sufficient in law. But no deed, mortgage, lease or other voluntary
instrument, except a will purporting to convey or affect registered land, shall take effect as
a conveyance or bind the land, but shall operate only as a contract between the parties
and as evidence of authority to the Register of Deeds to make registration.

The act of registration shall be the operative act to convey or affect the land in so far as
third persons are concerned, and in all cases under this Decree, the registration shall be
made in the office of the Register of Deeds for the province or city where the land lies.

Thus, bereft of registration, any sale or transaction involving registered land operates only as a
contract between the parties and shall not affect or bind the registered property.

One material development that affected the subject lot as a registered property was the notice
of levy that the sheriff caused to be annotated in Ravelo's OCT No. P-4517 on March 17, 1993
pursuant to the order of the court in the collection case filed by Antonio Chieng against Ravelo.
This was followed by the Certificate of Sale that was again annotated in Ravelo's title on May 25,
1993.

Another material development was the annotation of a notice of lis pendens on March 24, 1994
at the instance of the government, to reflect the pendency of the State's claim for cancellation of
title and the reversion of the subject lot against Ravelo.

Interestingly, the annotation of the levy in execution and the certificate of sale did not merit any
consideration in the decisions of both the trial and the appellate courts. We, however, consider
these developments material as they embody notices to the whole world of transactions
affecting the registered subject lot; they should be the starting point of any consideration of the
existence of good or bad faith of the parties dealing with the land. These annotations signify that
Chieng's purchase of the subject lot in the execution sale constituted a prior and superior
claim in time over the subject lot by any of the dramatis personae in the present case.
Thus, barring any defect in the sale itself and assuming that Chieng did not have any prior
knowledge, constructive or otherwise, of any defect in Ravelo's title, Chieng has a prior claim to
the property that is protected by the fact of registration and by his status as an innocent buyer in
good faith and for value. The legal protection offered by registration under the Torrens system
compels us to recognize the validity of the claim of an innocent purchaser for value despite any
defect in the vendor's title.11 Likewise, it does not matter that the final deed of sale and transfer
of registration of the title to Chieng, as innocent purchaser for value at an auction sale, occurred
subsequent to the annotation of the intervening notice of lis pendens, as the final deed of sale
and transfer are the necessary consequences of the previously registered notice of levy and
certificate of sale.12

The Redondos came into the picture when they contracted with Chieng for their purchase of the
subject property. Their inspection of the records at the Registry of Deeds should have confirmed
to them that the subject lot was a registered land and that Chieng, their seller, was not yet the
registered owner, but one who merely had a sheriff's Certificate of Sale. Contrary to the lower
courts' reading of the May 11, 1993 transaction between Chieng and the Redondos, what Chieng
sold was not the subject lot because he was not yet a registered owner who could effectively
convey the property at that point. What Chieng sold was "his rights under a Certificate of Sale on
the property covered by Original Certificate of Title No. P-4517."13Significantly, this May 11, 1993
agreement was not registered nor annotated in OCT No. P-4517 because it was technically a side
agreement relating to but not directly affecting the registered property, and was thus
enforceable only between the parties - Chieng and the Redondos. Thus, the government cannot
be effectively put on notice of the May 11, 1993 agreement when it registered its notice of lis
pendens on March 24, 1994. Consequently, too, the Redondos are differently situated in terms of
the determination of their good faith and cannot simply claim what Chieng can personally claim
as innocent purchaser for value of the subject lot at an execution sale.

To complete the whole picture of the series of developments involved, it was not until September
23, 1994 that the final Bill of Sale dated June 26, 1994 in favor of Chieng was inscribed as Entry
No. 2419 on OCT No. P-4517. OCT No. P-4517 was thereafter cancelled and TCT No. T-7209 in
Chieng's name was issued (carrying the government's notice of lis pendens as Entry No. 7219). It
was only at this point that Chieng, as registered owner, could have sold or could have done an
act binding the subject lot. A deed of sale dated November 21, 1994 in favor of the Redondos
was inscribed at the back of Chieng's TCT No. T-7209 on December 20, 1994. On the same day,
TCT No. T-7261 in the Redondos' name was issued, still carrying the lis pendens Entry No. 7219.14

From these perspectives, we cannot see how the Redondos could have been purchasers in good
faith in May 1993 when they were not even purchasers of the subject lot at that point.
Specifically, it was not until Chieng and the Redondos executed their November 21, 1994 deed of
sale over the subject lot that they had a contract of sale that would have served as evidence of
authority to the Register of Deeds to make registration. It was only then when a sale of real
property by a registered owner was concluded where good faith or bad faith on the part of the
buyer would have mattered - but at that point a notice of lis pendens had already been
annotated.

The Notice of Lis Pendens

Lis pendens literally means "a pending suit," while a notice of lis pendens, inscribed in the
certificate of title, is an announcement to the whole world that the covered property is in
litigation, serving as a warning that one who acquires interest in the property does so at his own
risk and subject to the results of the litigation. 15 This is embodied in Section 76 of Presidential
Decree (P.D.) No. 1529 which provides that no action to recover possession of real estate, or to
quiet title thereto, or to remove clouds upon the title thereof, or for partition, or other
proceedings of any kind in court directly affecting the title to land or the use or occupation
thereof or the buildings thereon, and no judgment, and no proceeding to vacate or reverse any
judgment, shall have any effect upon registered land as against persons other than the parties
thereto, unless a memorandum or notice stating the institution of such action or proceeding and
the court wherein the same is pending, as well as the date of the institution thereof, together
with a reference to the number of the certificate of title, and an adequate description of the land
affected and the registered owner thereof, shall have been filed and registered. The notice that
this provision speaks of - the notice of lis pendens - is not a lien or encumbrance on the property,
but simply a notice to prospective buyers or to those dealing with the property that it is under
litigation.16

As our above discussion shows, the government's notice of lis pendens came after the execution
sale and thus cannot affect Chieng and the conveyance to him of the subject lot. However, the
notice affects all transactions relating to OCT No. P-4517 subsequent to its registration date -
March 24, 1994. From that date, there was a binding notice to the whole world that any
subsequent claim on OCT No. P-4517 would be subject to the annotated pending action.
Specifically, the sale by Chieng to the Redondos of the subject lot on December 20, 1994 was
subject to the notice of lis pendens duly annotated on Chieng's title.

Cancellation and Reversion

Separately from the misrepresentation that tainted Ravelo's sales patent, the RTC decision points
to a supervening cause for cancellation and reversion that transpired after the filing of the
petitioner's complaint on November 6, 1992 - the sale on execution of the subject lot. According
to the RTC, this was sale prohibited under Section 29 of the CA No. 141 since it was made within
ten years from the grant of the patent17 and should have the legal effect of voiding the sale on
execution of the subject lot.

We disagree with this conclusion as the applicable law in the sale of land of the public domain for
residential purposes is R.A. No. 730,18 as amended by P.D. No. 2004.19 While R.A. No.730
originally carried the same prohibition that Sec. 29 of CA No. 141 has, P.D. No. 2004 dated
December 30, 1985 removed this prohibition for lands sold for residential purposes under R.A.
No. 730. Thus, the execution sale of the subject lot in 1993 was undertaken without any
attendant legal impediment.

Conclusion

In sum, we hold that the Court of Appeals erred in concluding that the Redondos were buyers in
good faith. They purchased the subject lot from Chieng subject to the government's notice of lis
pendens; hence, their purchase was at the risk of the outcome of the State's complaint for
cancellation and reversion which we find to be meritorious. The subject lot must therefore revert
back to the public domain.

WHEREFORE, premises considered, we GRANT the petition. We REVERSE the decision of the
Court of Appeals in CA-G.R. CV No. 60665 and accordingly DECLARE VOID respondent Mabelle B.
Ravelo's Miscellaneous Sales Patent No. 12458 and OCT No. P-4517. We likewise order
the CANCELLATION of Transfer Certificate of Title No. T-7261 issued in the name of Emmanuel
and Perlita Redondo and the REVERSION to the mass of the public domain of the property it
covers - Lot 16, Block 2, located in Mabayuan Extension, Gordon Heights, Olongapo City.

SO ORDERED.

ARTURO D. BRION
Associate Justice
 FIRST DIVISION

G.R. No. 157988, December 11, 2013

REPUBLIC OF THE PHILIPPINESBUREAU OF FOREST DEVELOPMENT, Petitioner, v. VICENTE ROXAS

AND THE REGISTER OF DEEDS OF ORIENTAL MINDORO, Respondents.

[G.R. No. 160640]

PROVIDENT TREE FARMS, INC., Petitioner, v. VICENTE ROXAS AND THE REGISTER OF DEEDS OF
ORIENTAL MINDORO, Respondents.

DECISION

LEONARDODE CASTRO, J.:

Before Us are consolidated Petitions for Review on Certiorari under Rule 45 of the Rules of Court:
(1) G.R. No. 157988, filed by petitioner Republic of the Philippines (Republic), represented by the
Bureau of Forest Development (BFD),1 and (2) G.R. No. 160640, filed by petitioner Provident Tree
Farms, Inc. (PTFI), both against respondents Vicente Roxas (Roxas) and the Register of Deeds
(ROD) of Oriental Mindoro, assailing the joint Decision 2 dated April 21, 2003 of the Court of
Appeals in CAG.R. CV No. 44926, which, in turn, affirmed the Decision 3 dated February 10, 1994
of the Regional Trial Court (RTC), Branch 39 of Oriental Mindoro, in Civil Case No. R3110. The
RTC dismissed the Complaint for Cancellation of Title and/or Reversion filed by petitioner
Republic against respondents Roxas and the ROD of Oriental Mindoro. Petitioner PTFI was an
intervenor in Civil Case No. R3110, as a lessee of petitioner Republic.

At the crux of the controversy is Lot No. 1GSS569 (subject property), located in San Teodoro,
Oriental Mindoro, with an area of 6.2820 hectares, and covered by Original Certificate of Title
(OCT) No. P58854 issued on July 21, 1965 by respondent ROD in respondent Roxass name.

The controversy arose from the following facts:

On February 5, 1941, then President Manuel L. Quezon (Quezon) issued Proclamation No.
678,5converting forest land measuring around 928 hectares, situated in San Teodoro, Oriental
Mindoro, described on Bureau of Forestry Map No. F. R.110, as Matchwood Forest Reserve. The
Matchwood Forest Reserve was placed under the administration and control of the Bureau of
Forestry, which shall have the authority to regulate the use and occupancy of this reserve, and
the cutting, collection and removal of timber and other forest products therein in accordance
with the Forest Law and Regulations.6 For the foregoing purpose, President Quezon withdrew the
928 hectares of forest land constituting the Matchwood Forest Reserve from entry, sale, or
settlement, subject to private rights, if there be any.

Petitioner Republic, through the Department of Agriculture and Natural Resources (DANR),
entered into Matchwood Plantation Lease Agreement No. 1 with petitioner PTFI on May 12, 1965,
wherein petitioner Republic leased the entire Matchwood Forest Reserve to petitioner PTFI for a
period of 25 years, which would expire on June 30, 1990.

In the meantime, respondent Roxas filed with the Bureau of Lands 7 on December 29, 1959
Homestead Application No. 95122, covering a parcel of land he initially identified as Lot No. 4,
SA22657, located at Paspasin, San Teodoro, Oriental Mindoro. Following the report and
recommendation8 of Land Inspector (LI) Domingo Q. Fernandez (Fernandez), OfficerinCharge
(OIC) Jesus B. Toledo (Toledo), for and by the authority of the Director of Lands, issued an Order
dated September 20, 1961 amending respondent Roxass Homestead Application No. 95122, to
wit:chanRoblesvirtualLawlibrary
It having been found upon investigation conducted by a representative of this Office that the
land actually occupied by the applicant is Lot No. 1, SA22657 Amd., and not Lot No. 4 of the
same subdivision as applied for, and it appearing in the records of this Office that the land
actually occupied is free from claims and conflicts, the abovenoted application is hereby
amended to cover Lot No. 1, SA22657 Amd., and as thus amended, shall continue to be given
due course.9ChanRoblesVirtualawlibrary
OIC Toledo subsequently issued another Order dated September 27, 1961 which approved
respondent Roxass Homestead Application No. 95122 and recorded the same as Homestead
Entry No. 94143.10 Thereafter, respondent Roxas executed a Notice of Intention to Make Final
Proof, which was posted on September 23, 1963. 11 Respondent Roxas personally testified before
LI Fernandez on October 25, 1963 to finally prove his residence and cultivation of the subject
property.

In a letter dated July 12, 1965, assistant District Forester Luis G. Dacanay (Dacanay), Bureau of
Forestry, DANR, informed the District Land Officer of Calapan, Oriental Mindoro, that the
subjectarea designated as Lot No. 1, Gss569, has been verified to be within the alienable and
disposable land of Project 18 of San Teodoro, Oriental Mindoro, per B.F. Map LC1110 certified as
such on September 30, 1934.12 Assistant District Forester Dacanay further wrote in the same
letter that [t]he said land is no longer within the administrative jurisdiction of the Bureau of
Forestry, so that, its disposition in accordance with the Public Land Law does not adversely affect
forestry interest anymore.13

The Director of Lands issued Homestead Patent No. 111598 14 to respondent Roxas on July 19,
1965, on the basis of which, respondent ROD issued OCT No. P5885 in respondent Roxass name
on even date,15 with the following technical description of the subject
property:chanRoblesvirtualLawlibrary
Lot No. 1, Gss569

Beginning at a point marked 1 of Lot 1, Gss569, being N. 3215 W., 1396.63 m. from BBM No.
3, Cad104, thence

S.3638 W.,
168.79m. to point S.8016 W., 46.02m. to point 3;
2;
S.3322 W., S.7705 W., 17.28m. to point 5;
63.40m. to point 4;
N.52.06 W., N.4051 E., 417.50m. to point 7;
137.92m. to point
6;
S.5425 E., S.2420 W., 146.33m. to point 1;
115.36m. to point
8;

point of beginning.

Containing an area of SIXTY[]TWO THOUSAND EIGHT HUNDRED AND TWENTY (62,820) SQUARE
METERS.

All points are marked on the ground as follows: points 3 & 4 by Stakes, and the rest by B.L. Cyl.
Conc. Mons.

Bounded on the SE., along line 12 by Lot 2, Gss569; on the S., along lines 2345 by Road; on
the SW., and NW., along lines 567 by Match Wood Forest Reservation; on the NE., along line 78
by Lot 4, Gss569; and on the E., along line 81 by Lot 3, Gss569.

Bearings true.

This lot was surveyed in accordance with law and existing regulations promulgated thereunder,
by R.F. Javier, Public Land Surveyor, on October 5, 1959.

NOTE:
This lot is covered by H.A. No. 95122.16
On May 2, 1978, petitioner Republic, represented by the BFD, filed with the RTC a Complaint for
Cancellation of Title and/or Reversion against respondents Roxas and the ROD over the subject
property, docketed as Civil Case No. R3110. 17

Petitioner Republic alleged that the subject property was within the Matchwood Forest Reserve
and could not be the subject of private appropriation and ownership; and possession of said
property, no matter how long would not convert the same into private property. The Director of
Lands could not dispose of the subject property under the provisions of Commonwealth Act No.
141, otherwise known as the Public Land Act, thus, OCT No. P5885 issued in respondent Roxass
name was null and void ab initio. Petitioner Republic also averred that respondent Roxas acquired
OCT No. P5885 through fraud and misrepresentation, not only because the subject property was
not capable of registration, but also because respondent Roxas was disqualified to acquire the
same under the provisions of the Public Land Act, not having exercised acts of possession in the
manner and for the length of time required by law. The Director of Lands was only misled into
approving respondent Roxass application for homestead patent. Petitioner Republic additionally
mentioned that the subject property, as part of the Matchwood Forest Reserve, was included in
the lease agreement of petitioner Republic with petitioner PTFI.

In his Answer, respondent Roxas admitted applying for and acquiring a homestead patent over
the subject property. Respondent Roxas, however, denied that the subject property was within
the Matchwood Forest Reserve. To the contrary, the subject property was part and parcel of the
Paspasin Group Settlement Subdivision, SA22657, and had been the subject of investigation in
accordance with law, rules, and regulations, as established by documentary
evidence, viz:chanRoblesvirtualLawlibrary

1. LI Fernandezs letter dated February 28, 1961 addressed to the Director of Lands, Manila,
reporting that Roxas was actually applying for Lot No. 1, not Lot No. 4, of the Paspasin
Group Settlement Subdivision, SA22657 Amd., and recommending that Roxass
application be corrected accordingly;18

2. OIC Toledos Order dated September 27, 1961 approving Roxass application for
homestead patent;19

3. Roxass Notice of Intention to Make Final Proof, together with his Affidavit that the said
Notice was accordingly posted;20

4. Roxass Final Proof Homestead Testimony of Applicant; 21

5. Assistant District Forester Dacanays letter dated July 12, 1965 to the District Land Officer
of Calapan, Oriental Mindoro, verifying that Lot No. 1, GSS569, was alienable and
disposable;22

6. Blue Print Plan of Land Group Settlement Survey as surveyed for the Republic; 23

7. Order dated July 19, 1965 of the Director of Lands approving Roxass application for
patent;24

8. The unsigned letter dated July 19, 1965 of Gabriel Sansano, Chief, Records Division,
Bureau of Lands, to the ROD of Calapan, Oriental Mindoro, transmitting Roxass
Homestead Patent No. 111598 for the registration and issuance of Owners Duplicate
Certificate of Title in accordance with Section 122, Act No. 496; 25 and

9. OCT No. P5885 in Roxass name.26

Respondent Roxas maintained that OCT No. P5885 had been legally and validly issued to him
and that he had been in actual, open, and continuous possession of the subject property in the
concept of an owner since 1959.

Respondent Roxas then prayed that judgment be rendered dismissing the Complaint of petitioner
Republic; awarding damages to him in the amount of P500.00 and attorneys fees in the amount
of P2,000.00; and declaring OCT No. P5885 free from all claims and conflicts.

Petitioner PTFI eventually filed a Complaint for Intervention on the ground that it was leasing the
entire Matchwood Forest Reserve from petitioner Republic under Matchwood Plantation Lease
Agreement No. 1 for a period of 25 years that would expire on June 30, 1990. 27

The RTC granted the intervention of petitioner PTFI in an Order dated August 10, 1979. 28

Subsequently, during the pendency of Civil Case No. R3110 before the RTC, and considering the
expiration of Lease Agreement No. 1 in 1990, petitioner PTFI entered into an Industrial Tree
Plantation Lease Agreement29 dated November 11, 1982 and Industrial Forest Plantation
Management Agreement30 dated November 24, 1982 with petitioner Republic, which extended
the lease of petitioner PTFI of the Matchwood Forest Reserve until July 7, 2007.

To determine whether or not the subject property was within the Matchwood Forest Reserve, the
RTC issued an Order dated June 23, 1983 creating a committee to conduct a relocation survey.
The committee was composed of three competent government officials: (1) the District Land
Officer of Calapan, Oriental Mindoro, as chairman; (2) Geodetic Engineer (Engr.) Narciso Mulles
(Mulles) of the BFD; and (3) Geodetic Engineer Cresente Mendoza (Mendoza) of the Bureau of
Lands, Calapan, Oriental Mindoro. 31 However, Engr. Mulles was assigned to Region V, Naga City,
so no relocation survey was conducted. Thus, the RTC issued another Order dated March 15,
1984, creating a second relocation survey committee composed of District Forester Gregorio O.
Nisperos (Nisperos) as team leader, with representatives of the District Land Office, respondent
Roxas, and petitioner PTFI as members.32

The committee submitted to the RTC a Memorandum dated May 11, 1984, prepared by Engr.
Mendoza, the representative of the Bureau of Lands, and countersigned by District Forester
Nisperos, the team leader, presenting the results of the ocular inspection/survey work conducted
by the committee from April 23 to 29, 1984 and the recommendations of the committee.
Pertinent parts of the Memorandum read:chanRoblesvirtualLawlibrary
REMARKS: [W]e are submitting herewith the result of our ocular inspection/survey work
undertaken during the period from April 23 to 29, 1984 in the presence of Engineer Cresente M.
Mendoza, Bureau of Lands (B.L.) representative, Mr. Reynaldo Labay, Bureau of Forest
Development (BFD) representative and Mr. Vicente Roxas, the defendant. Findings and other
related informations gathered during the survey disclosed the
following:chanroblesvirtuallawlibrary

1. The titled land property claimed by Mr. Vicente Roxas (defendant) situated at Barangay
Paspasin, San Teodoro, Oriental Mindoro which is subject of the complaint and inquiry
covering an area of about 6.282 hectares is located inside the Matchwood Forest Reserve
No. 1 under Presidential Proclamation No. 678 dated February 5, 1941 per F.R. 110 and
leased to Provident Tree Farms, Inc.

2. The whole land area falls inside said forest reserve reckoning from established BFFR
corners (BFFR Corner Nos. 45, 46 & 47A) as shown in the attached sketch/map plan. The
issuance of the Original Certificate of Title to herein defendant inside a proclaimed Forest
Reserve would not warrant nor justify the validity of legitimate and/or rightful ownership
over said titled land property considering the present status of the subject land area under
question, therefore it could not complete its right under the provisions of the Public Land
Law.

ACTION RECOMMENDED: In view of the abovementioned facts gathered by the team and after
judicious scrutiny of other informations surrounding the subject case, it is hereby recommended
that the Original Certificate of Title issued to Mr. Vicente Roxas covering a land area located
inside the Matchwood Forest Reserve be annulled and the retention of said area for which they
have been reserved. Should the Honorable Court needs some clarification on the survey
conducted, it is recommended further that Engineer Cresente M. Mendoza of the Bureau of
Lands, Calapan be subphoenaed (sic). 33ChanRoblesVirtualawlibrary
Petitioner Roxas contested the results of the relocation survey conducted by the committee,
hence, in an Order dated August 6, 1984, the RTC directed the Clerk of Court to issue a subpoena
to committee members Engr. Mendoza of the Bureau of Lands and Mr. Reynaldo Labay (Labay) of
the BFD to appear before the court; and a subpoena duces tecum to the District Land Officer or
his duly authorized representative to bring and produce pertinent papers relative to cadastral
survey 104 in respondent Roxass name.34

Engr. Mendoza attested that pursuant to the RTC Order dated March 15, 1984, he conducted a
relocation survey of the subject property on April 2329, 1984. After the said survey, he
personally prepared the Plan of Lots 1 (owned by respondent Roxas), 4 (owned by Esteban
Paroninog), and 5 (no registered owner, adjacent to Lot 4), GSS569, as relocated for Vicente
Roxas v. Republic of the Philippines (BFD). In the Plan, Engr. Mendoza marked the boundary
between the forest zone and the released area by drawing a line from BFFR45 to BFFR46 to
BFFR47A, which showed that Lot 1 owned by respondent Roxas was found inside the forest
zone.35

On crossexamination, Engr. Mendoza acknowledged that even before the committee conducted
the relocation survey, he already knew that the subject property was part of the Matchwood
Forest Reserve. During the relocation survey, Engr. Mendoza did not take into consideration the
total area of the reserve since he had no idea as to the same. He merely relocated BFFR45,
BFFR46, and BFFR47A. Per record of the BFD, the line drawn from BFFR45 until BFFR47A
was the boundary line between the forest zone and the released areas. Engr. Mendoza was then
asked to compare the Plan he prepared based on the relocation survey conducted by the
committee on April 2329, 1984 visvis the Plan of Land Group Settlement Survey, GSS569,
prepared by Engr. Restituto Javier (Javier) and approved (for the Director of Lands) by Acting
Regional Land Director Narciso Villapando (Villapando), as a result of the survey conducted on
September 2122 and October 519, 1959. Engr. Mendoza conceded that Lot 1 indicated in both
plans in respondent Roxass name were the same, 36but in the Plan of the Land Group Settlement
Survey, GSS569, the boundary line separating the forest reserve from the released areas was
just above Lots 1, 4, and 5.

During redirect examination, Engr. Mendoza explained that he came upon the conclusion that the
Plan of the Land Group Settlement Survey, GSS569, was the approved plan because it was
signed by Acting Regional Land Director Villapando. He further avowed that points BFFR45,
BFFR46, and BFFR47A were still intact during the relocation survey by the committee, marked
by monuments which he believed were previously placed by the people from the BFD. 37

Daniel de los Santos (De los Santos), a Geodetic Engineer from the Department of Environment
and Natural Resources (DENR), Regional Office IV, also testified for petitioners. According to Engr.
De los Santos, his supervisor showed him OCT No. P5885 and instructed him to prepare a
plotting on the land classification map. Engr. De los Santos presented two maps before the RTC,
both coming from the National Mapping Resources Administration: (1) the Land Classification,
Province of Oriental Mindoro LC1110 dated August 30, 1934 (marked as Exhibit J) and (2) the
Land Classification, Province of Oriental Mindoro LC2244 dated December 15, 1958 (marked as
Exhibit K). Engr. De los Santos demonstrated table plotting on both land classification maps
using the technical description of the subject property as appearing on OCT No. P5885, which
showed that the subject property fell within the forest reserve. 38 When crossexamined, Engr. De
los Santos reiterated that he based his plotting on the technical description of the subject
property as it appeared on OCT No. P5885. He did not consider Lot No. 1 of GSS569 in his
plotting because he was not aware of the same.

Respondent Roxas himself testified for the defense. Respondent Roxas recounted that he
originally joined the Philippine Army in 1941, but he joined the guerilla movement in Oriental
Mindoro during the Japanese occupation, and thereafter, he reenlisted with the United States
Armed Forces in the Far East (USAFFE). Respondent Roxas was first struck with the pleasant
appearance of the subject property while he was still in the guerilla movement, and when he
retired from the USAFFE in 1946, he cleaned the said property, which was still woody at that
time. Respondent Roxas built a nipa hut on the subject property where he and his wife, as well as
their children, had resided, and planted the same with palay and bananas to sustain his family.
Sometime in 1959, a certain Luz Alegre filed a sales application for the subject property occupied
by respondent Roxas and adjoining parcels of land occupied by 20 other residents. Respondent
Roxas and the other residents were spurred to petition the Bureau of Lands to have their
respective properties surveyed. It was then that respondent Roxas came to know that he had
developed the subject property to the extent of 6.2820 hectares. After the survey of the subject
property, respondent Roxas began planting thereon about 700 coconut trees, 500 calamansi
trees, 200 rambutan trees, 50 sinturis trees, and 30 cacao trees, plus an unspecified number of
other trees such as abaca, banana, and mango. 39

The RTC rendered a Decision on February 10, 1994, in respondent Roxass favor. The RTC
declared that petitioner PTFI had no right whatsoever to the subject property since the latters
lease agreement with petitioner Republic had already expired on June 30, 1990. It also held that
the preponderance of evidence showed that the subject property was outside the forest reserve
and part of the alienable and disposable lands of the public domain; and that there was no proof
at all of fraud or misrepresentation on respondent Roxass part in procuring OCT No. P5885. In
the end, the RTC decreed:

ACCORDINGLY, judgment is hereby rendered:chanRoblesvirtualLawlibrary

1. Dismissing the complaint; and

2. Ordering the plaintiff Republic of the Philippines (Bureau of Forest Development) and plaintiff
intervenor Provident Tree Farms, to pay jointly and severally defendant Vicente Roxas P25,000.00
for and as attorneys fees and expenses of litigation and the costs of
suit.40ChanRoblesVirtualawlibrary
Unsatisfied with the foregoing RTC Decision, petitioners jointly filed an appeal before the Court of
Appeals, docketed as CAG.R. CV No. 44926.

In its Decision dated April 21, 2003, the Court of Appeals sustained the appreciation of evidence
by the RTC, thus:chanRoblesvirtualLawlibrary
Before Roxas could be issued his corresponding homestead patent, the Bureau of Forestry of the
Department of Environment and Natural Resources declared that:chanRoblesvirtualLawlibrary
I have the honor to inform you that the subject area designated as Lot No. 1 Gss569, has been
verified to be within the alienable and disposable land of Project No. 18 of San Teodoro, Oriental
Mindoro per B.F. LC110 certified as such on September 30, 1934.

The said land is no longer within the administrative jurisdiction of the Bureau of Forestry, so that,
its disposition in accordance with the Public Land Law does not adversely affect forestry interest
anymore.
Not only does this letter prove that Lot 1GSS569, the area occupied and titled in the name of
Roxas, is alienable and disposable but so does the 1959 Survey Plan, which with its dotted lines
confirm that the land of Roxas is outside the Matchwood Forest Reserve.

Even the 1984 Relocation Survey conducted by Cresente Mendoza on the subject property
showed it to be on the same location. x x x.

xxx

The court a quo was correct when it did not give credence to the testimony of [Cresente]
Mendoza that the subject lot is within the Matchwood Forest Reserve area because despite
having performed a relocation survey in the area, he admitted that he does not know the actual
area of the forest reserve. x x x.

xxx

And though another witness, Geodetic Engineer Daniel de los Santos, did a table plotting of the
two Land Classification Maps, it appears that the subject Lot 1GSS569 was not actually
included in the plotting. x x x.41 (Citations omitted.)chanroblesvirtualawlibrary
The Court of Appeals also ruled that respondent Roxass compliance with substantive and
procedural requirements for acquisition of public lands belied the allegation that respondent
Roxas obtained grant and title over the subject property through fraud and misrepresentation.
The appellate court further pronounced that once a patent had been registered and the
corresponding certificate of title had been issued, the land covered by them ceased to be part of
the public domain and became private property; and the Torrens title issued pursuant to the
patent became indefeasible upon the expiration of one year from the date of the issuance of the
patent. The Court of Appeals, however, disagreed with the RTC in awarding attorneys fees,
expenses of litigation, and costs of suit to respondent Roxas, finding no basis for such awards.

Ultimately, the Court of Appeals disposed of CAG.R. CV No. 44926 in this

wise:chanRoblesvirtualLawlibrary
WHEREFORE, except for the award of attorneys fees, expenses of litigation and costs of suit
which are hereby DELETED, the appealed Decision is
otherwise AFFIRMED.42ChanRoblesVirtualawlibrary
Petitioner Republic, through the BFD, directly filed its Petition for Review on Certiorari before us,
docketed as G.R. No. 157988. Petitioner Republic assigned the following errors on the part of the
Court of Appeals:chanRoblesvirtualLawlibrary
I

THE COURT OF APPEALS ERRED IN DECLARING THAT LOT NO. 1, GSS569 IS NOT PART OF THE
MATCHWOOD FOREST RESERVE.

II

THE COURT OF APPEALS ERRED IN DISREGARDING THE TESTIMONY OF ENGINEER CRESENCIO

MENDOZA THAT THE SUBJECT LOT IS WITHIN THE MATCHWOOD FOREST RESERVE AREA ON THE
SOLE BASIS OF HIS ADMISSION THAT HE DID NOT KNOW THE ACTUAL AREA OF THE FOREST
RESERVE.

III
THE COURT OF APPEALS ERRED IN NOT FINDING THAT PRIVATE RESPONDENT PROCURED
HOMESTEAD PATENT NO. 111598 AND ORIGINAL CERTIFICATE OF TITLE NO. P5885 THROUGH
FRAUD AND/OR MISREPRESENTATION.

IV

THE COURT OF APEPALS ERRED IN CONCLUDING THAT PRESCRIPTION IS APPLICABLE TO THIS

CASE.43ChanRoblesVirtualawlibrary
Meanwhile, petitioner PTFI first filed a Motion for Reconsideration 44 with the Court of Appeals.
After the appellate court denied said Motion in a Resolution dated October 30, 2003, 45 petitioner
PTFI likewise sought recourse from us through a Petition for Review on Certiorari, docketed as
G.R. No. 160640, assailing the Court of Appeals judgment on the following
grounds:chanRoblesvirtualLawlibrary
I

THE COURT OF APPEALS REFUSAL TO ACCORD CREDENCE TO THE TESTIMONIES OF EXPERTS IS

CONTRARY TO LAW AND JURISPRUDENCE.

II

THE COURT OF APPEALS ACTED CONTRARY TO LAW AND JURISPRUDENCE ON THE INALIENABILITY
OF PUBLIC LANDS WHEN IT AFFIRMED THE DECISION OF THE TRIAL COURT.

III

THE COURT OF APPEALS CONTRAVENED EXISTING LAW AND JURISPRUDENCE WHEN IT

CONCLUDED THAT THE INSTANT ACTION IS BARRED BY PRESCRIPTION AND THE PRINCIPLE OF
INDEFEASIBILITY OF TITLE.46ChanRoblesVirtualawlibrary
In a Resolution47 dated December 8, 2004, we consolidated G.R. No. 160640 with G.R. No.
157988.

Sifting through the arguments raised by the parties, we identify three fundamental issues for our
resolution, particularly: (1) whether the subject property is forest land or alienable and
disposable agricultural land; (2) whether respondent Roxas procured OCT No. P5885 through
fraud and misrepresentation; and (3) whether petitioner Republic is barred by estoppel and
prescription from seeking the cancellation of OCT No. P5885 and/or reversion of the subject
property.

Review of the findings of fact of the RTC and Court of Appeals is proper in this case

Before delving into the merits, the propriety of these Petitions for Review under Rule 45 of the
Rules of Court should first be addressed. We note at the outset that except for the third issue on
estoppel and prescription, the other two issues involve questions of fact that necessitate a
review of the evidence on record. In Decaleng v. Bishop of the Missionary District of the
Philippine Islands of Protestant Episcopal Church in the Unites States of America,48 we presented
the general rule, as well as the exceptions, to the same:chanRoblesvirtualLawlibrary
Prefatorily, it is already a wellestablished rule that the Court, in the exercise of its power of
review under Rule 45 of the Rules of Court, is not a trier of facts and does not normally embark
on a reexamination of the evidence presented by the contending parties during the trial of the
case, considering that the findings of facts of the Court of Appeals are conclusive and binding on
the Court. This rule, however, admits of exceptions as recognized by jurisprudence, to
wit:chanRoblesvirtualLawlibrary
(1) [W]hen the findings are grounded entirely on speculation, surmises or conjectures; (2) when
the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse
of discretion; (4) when the judgment is based on misapprehension of facts; (5) when the findings
of facts are conflicting; (6) when in making its findings the Court of Appeals went beyond the
issues of the case, or its findings are contrary to the admissions of both the appellant and the
appellee; (7) when the findings are contrary to the trial court; (8) when the findings are
conclusions without citation of specific evidence on which they are based; (9) when the facts set
forth in the petition as well as in the petitioners main and reply briefs are not disputed by the
respondent; (10) when the findings of fact are premised on the supposed absence of evidence
and contradicted by the evidence on record; and (11) when the Court of Appeals manifestly
overlooked certain relevant facts not disputed by the parties, which, if properly considered,
would justify a different conclusion. (Citations omitted.)chanroblesvirtualawlibrary
The case at bar falls under several exceptions, i.e., the inference made is manifestly mistaken,
absurd, or impossible; the judgment is based on misapprehension of facts; and the findings of
fact are contradicted by the evidence on record. As a result, we must return to the evidence
submitted by the parties during trial and make our own evaluation of the same.

Subject property is within the Matchwood Forest Reserve and, thus, inalienable and not subject
to disposition.

Under the Regalian doctrine, which is embodied in Article XII, Section 2 of our Constitution, all
lands of the public domain belong to the State, which is the source of any asserted right to any
ownership of land. All lands not appearing to be clearly within private ownership are presumed to
belong to the State. Accordingly, public lands not shown to have been reclassified or released as
alienable agricultural land or alienated to a private person by the State remain part of the
inalienable public domain.49

Commonwealth Act No. 141, also known as the Public Land Act, as amended by Presidential
Decree No. 1073, remains to this day the existing general law governing the classification and
disposition of lands of the public domain, other than timber and mineral lands. The following
provisions under Title I, Chapter II of the Public Land Act, as amended, is very specific on how
lands of the public domain become alienable or disposable:chanRoblesvirtualLawlibrary
SEC. 6. The President, upon the recommendation of the Secretary of Agriculture and Natural
Resources, shall from time to time classify the lands of the public domain into:

(a) Alienable or disposable,

(b) Timber, and

(c) Mineral lands,

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

SEC. 7. For the purposes of the administration and disposition of alienable or disposable public
lands, the Batasang Pambansa or the President, upon recommendation by the Secretary of
Natural Resources, may from time to time declare what public lands are open to disposition or
concession under this Act.

xxx

SEC. 8. Only those lands shall be declared open to disposition or concession which have been
officially delimited and classified and, when practicable, surveyed, and which have not been
reserved for public or quasipublic uses, nor appropriated by the Government, nor in any manner
become private property, nor those on which a private right authorized and recognized by this
Act or any other valid law may be claimed, or which, having been reserved or appropriated, have
ceased to be so. However, the President may, for reasons of public interest, declare lands of the
public domain open to disposition before the same have had their boundaries established or
been surveyed, or may, for the same reason, suspend their concession or disposition until they
are again declared open to concession or disposition by proclamation duly published or by Act of
the Congress.

SEC. 9. For the purpose of their administration and disposition, the lands of the public domain
alienable or open to disposition shall be classified, according to the use or purposes to which
such lands are destined, as follows:

(a) Agricultural;

(b) Residential, commercial, industrial, or for similar productive purposes;

(c) Educational, charitable, or other similar purposes; and

(d) Reservations for townsites and for public and quasipublic uses.

The President, upon recommendation by the Secretary of Agriculture and Natural Resources,
shall from time to time make the classifications provided for in this section, and may, at any time
and in a similar manner, transfer lands from one class to another. (Emphases
ours.)chanroblesvirtualawlibrary
By virtue of Presidential Decree No. 705, otherwise known as the Revised Forestry Code, 50 the
President delegated to the DENR Secretary the power to determine which of the unclassified
lands of the public domain are (1) needed for forest purposes and declare them as permanent
forest to form part of the forest reserves; and (2) not needed for forest purposes and declare
them as alienable and disposable lands. 51

Per the Public Land Act, alienable and disposable public lands suitable for agricultural purposes
can be disposed of only as follows:chanRoblesvirtualLawlibrary
1. For homestead settlement;

2. By sale;

3. By lease; and

4. By confirmation of imperfect or incomplete titles:

(a) By judicial legalization;

(b) By administrative legalization (free patent). 52ChanRoblesVirtualawlibrary

Homestead over alienable and disposable public agricultural land is granted after compliance by
an applicant with the conditions and requirements laid down under Title II, Chapter IV of the
Public Land Act, the most basic of which are quoted below:chanRoblesvirtualLawlibrary
SEC. 12. Any citizen of the Philippines over the age of eighteen years, or the head of a family,
who does not own more than twentyfour hectares of land in the Philippines or has not had the
benefit of any gratuitous allotment of more than twentyfour hectares of land since the
occupation of the Philippines by the United States, may enter a homestead of not exceeding
twentyfour hectares of agricultural land of the public domain.

SEC. 13. Upon the filing of an application for a homestead, the Director of Lands, if he finds that
the application should be approved, shall do so and authorize the applicant to take possession of
the land upon the payment of five pesos, Philippine currency, as entry fee. Within six months
from and after the date of the approval of the application, the applicant shall begin to work the
homestead, otherwise he shall lose his prior right to the land.

SEC. 14. No certificate shall be given or patent issued for the land applied for until at least one
fifth of the land has been improved and cultivated. The period within which the land shall be
cultivated shall not be less than one nor more than five years, from and after the date of the
approval of the application. The applicant shall, within the said period, notify the Director of
Lands as soon as he is ready to acquire the title. If at the date of such notice, the applicant shall
prove to the satisfaction of the Director of Lands, that he has resided continuously for at least
one year in the municipality in which the land is located, or in a municipality adjacent to the
same and has cultivated at least onefifth of the land continuously since the approval of the
application, and shall make affidavit that no part of said land has been alienated or encumbered,
and that he has complied with all the requirements of this Act, then, upon the payment of five
pesos, as final fee, he shall be entitled to a patent.
It is clear under the law that only alienable and disposable agricultural lands of the public domain
can be acquired by homestead.

In the instant case, respondent Roxas applied for and was granted Homestead Patent No. 111598
for the subject property, pursuant to which, he acquired OCT No. P5885 in his name. The
problem, however, is that the subject property is not alienable and disposable agricultural land to
begin with.

The burden of proof in overcoming the presumption of State ownership of lands of the public
domain is on the person applying for registration, or in this case, for homestead patent. The
applicant must show that the land subject of the application is alienable or disposable. 53 It must
be stressed that incontrovertible evidence must be presented to establish that the land subject
of the application is alienable or disposable. 54

The Court of Appeals, in its assailed Decision, concluded that the subject property is indeed
alienable and disposable based on the (1) Letter dated July 12, 1965 of Assistant District Forester
Dacanay to the District Land Officer of Calapan, Oriental Mindoro informing the latter that Lot 1,
GSS569 was verified to be within the alienable and disposable land of Project 18 of San Teodoro,
Oriental Mindoro per B.F. Map LC1110; and (2) the Blue Print Plan of the Land Group Settlement
Survey, GSS569, showing that the subject property lies beyond the Matchwood Forest Reserve.
But these are hardly the kind of proof required by law.

As we pronounced in Republic of the Phils. v. TriPlus Corporation,55 to prove that the land subject
of an application for registration is alienable, an applicant must establish the existence of
a positive act of the Government such as a presidential proclamation or an executive order, an
administrative action, investigation reports of Bureau of Lands investigators, and a legislative act
or statute. The applicant may also secure a certification from the Government that the lands
applied for are alienable and disposable.

We were even more specific in Republic of the Phils. v. T.A.N. Properties, Inc. 56 as to what
constitutes sufficient proof that a piece of land is alienable and disposable, to quote:
Further, it is not enough for the PENRO or CENRO to certify that a land is alienable and
disposable. The applicant for land registration must prove that the DENR Secretary had approved
the land classification and released the land of the public domain as alienable and disposable,
and that the land subject of the application for registration falls within the approved area per
verification through survey by the PENRO or CENRO. In addition, the applicant for land
registration must present 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. These facts must be
established to prove that the land is alienable and disposable. Respondent failed to do so
because the certifications presented by respondent do not, by themselves, prove that the land is
alienable and disposable.

Only Torres, respondents Operations Manager, identified the certifications submitted by

respondent. The government officials who issued the certifications were not presented before the
trial court to testify on their contents. The trial court should not have accepted the contents of
the certifications as proof of the facts stated therein. Even if the certifications are presumed duly
issued and admissible in evidence, they have no probative value in establishing that the land is
alienable and disposable. (Emphasis ours.)chanroblesvirtualawlibrary
Assistant District Forester Dacanays Letter dated July 12, 1965 is a mere correspondence; it is
not even a certification. Coupled with the fact that Assistant District Forester Dacanay did not
personally testify before the RTC as to the truth of the contents of his Letter dated July 12, 1965,
said letter carries little evidentiary weight. The Land Group Settlement Survey, GSS569,
prepared by Engr. Javier and approved (for the Director of Lands) by Acting Regional Land
Director Villapando, also does not constitute incontrovertible evidence that the subject property
is alienable and disposable agricultural land of the public domain. We pointed out in Republic of
the Phils. v. Court of Appeals57that:chanRoblesvirtualLawlibrary
There is no factual basis for the conclusion of the appellate court that the property in question
was no longer part of the public land when the Government through the Director of Lands
approved on March 6, 1925, the survey plan (Psu43639) for Salming Piraso. The existence of a
sketch plan of real property even if approved by the Bureau of Lands is no proof in itself of
ownership of the land covered by the plan. (Gimeno v. Court of Appeals, 80 SCRA 623). The fact
that a claimant or a possessor has a sketch plan or a survey map prepared for a parcel of land
which forms part of the countrys forest reserves does not convert such land into alienable land,
much less private property. Assuming that a public officer erroneously approves the sketch plan,
such approval is null and void. There must first be a formal Government declaration that the
forest land has been reclassified into alienable and disposable agricultural land which may then
be acquired by private persons in accordance with the various modes of acquiring public
agricultural lands.
In stark contrast, more than just the presumption under the Regalian doctrine, there is actually
Presidential Proclamation No. 678 dated February 5, 1941, declaring around 928 hectares of
forest land as Matchwood Forest Reserve, which had been withdrawn from entry, sale, or
settlement. Two geodetic engineers, namely, (1) Engr. Mendoza, who conducted an ocular
inspection/relocation survey in 1984 upon orders of the RTC; and (2) Engr. De los Santos, who
performed table plotting of the technical description of the subject property on land classification
maps, testified before the RTC that the subject property is within the Matchwood Forest Reserve.

Both the RTC and the Court of Appeals erred in brushing aside the testimonies of the two
engineers on very tenuous grounds. Engr. Mendoza need not know the entire area of the
Matchwood Forest Reserve, such fact being insignificant to the issue at hand. What Engr.
Mendoza only needed to do, which he did, was to relocate on the ground the boundary lines of
the Matchwood Forest Reserve which are nearest the subject property, i.e., from points BFFR45
to BFFR46 to BFFR47A, and from there, determine whether the subject property is on the side
of the forest reserve or the released area. It would similarly be unnecessary for Engr. De los
Santos to conduct table plotting of Lot 1 of GSS569 on the land classification maps. Engr. De los
Santos already plotted the subject property on the land classification maps based on the
technical description of said property as it stated on OCT No. P5885. Thus, there can be no
doubt that the property Engr. De los Santos plotted on the land classification maps is exactly the
property awarded and registered in the name of respondent Roxas. It bears to stress that both
geodetic engineers testified on matters within their competence and expertise, and other than
the baseless doubts of the RTC and the Court of Appeals, there is no evidence on record to refute
said witnesses testimonies.
In sum, the subject property is within the Matchwood Forest Reserve and, therefore, inalienable
and not subject to disposition. Respondent Roxas could not have validly acquired a homestead
patent and certificate of title for the same.

Although there is no evidence of fraud by respondent Roxas, there is still reason to cancel OCT
No. P5885 and revert the subject property to the State.

We do not find evidence indicating that respondent Roxas committed fraud when he applied for
homestead patent over the subject property. It does not appear that he knowingly and
intentionally misrepresented in his application that the subject property was alienable and
disposable agricultural land. Nonetheless, we recognized in Republic of the Phils. v.
Mangotara58 that there are instances when we granted reversion for reasons other than fraud:
Reversion is an action where the ultimate relief sought is to revert the land back to the
government under the Regalian doctrine. Considering that the land subject of the action
originated from a grant by the government, its cancellation is a matter between the grantor and
the grantee. In Estate of the Late Jesus S. Yujuico v. Republic (Yujuico case), reversion was
defined as an action which seeks to restore public land fraudulently awarded and disposed of to
private individuals or corporations to the mass of public domain. It bears to point out, though,
that the Court also allowed the resort by the Government to actions for reversion to cancel titles
that were void for reasons other than fraud, i.e., violation by the grantee of a patent of the
conditions imposed by law; and lack of jurisdiction of the Director of Lands to grant a patent
covering inalienable forest land or portion of a river, even when such grant was made through
mere oversight. In Republic v. Guerrero, the Court gave a more general statement that the
remedy of reversion can be availed of only in cases of fraudulent or unlawful inclusion of the
land in patents or certificates of title. (Emphasis ours, citations
omitted.)chanroblesvirtualawlibrary
Apparently, in the case at bar, a mistake or oversight was committed on the part of respondent
Roxas, as well as the Government, resulting in the grant of a homestead patent over inalienable
forest land. Hence, it can be said that the subject property was unlawfully covered by Homestead
Patent No. 111598 and OCT No. P5885 in respondent Roxass name, which entitles petitioner
Republic to the cancellation of said patent and certificate of title and the reversion of the subject
property to the public domain.

Petitioner Republic is not barred by prescription and estoppel from seeking the cancellation of
respondent Roxass title and reversion of the subject property.

It is true that once a homestead patent granted in accordance with the Public Land Act is
registered pursuant to Act 496, otherwise known as The Land Registration Act, or Presidential
Decree No. 1529, otherwise known as The Property Registration Decree, the certificate of title
issued by virtue of said patent has the force and effect of a Torrens title issued under said
registration laws.59 We expounded in Ybaez v. Intermediate Appellate
Court60 that:chanRoblesvirtualLawlibrary
The certificate of title serves as evidence of an indefeasible title to the property in favor of the
person whose name appears therein. After the expiration of the one (1) year period from the
issuance of the decree of registration upon which it is based, it becomes incontrovertible. The
settled rule is that a decree of registration and the certificate of title issued pursuant thereto may
be attacked on the ground of actual fraud within one (1) year from the date of its entry and such
an attack must be direct and not by a collateral proceeding. The validity of the certificate of title
in this regard can be threshed out only in an action expressly filed for the purpose.

It must be emphasized that a certificate of title issued under an administrative proceeding

pursuant to a homestead patent, as in the instant case, is as indefeasible as a certificate of title
issued under a judicial registration proceeding, provided the land covered by said certificate is a
disposable public land within the contemplation of the Public Land Law.

There is no specific provision in the Public Land Law (C.A. No. 141, as amended) or the Land
Registration Act (Act 496), now P.D. 1529, fixing the one (1) year period within which the public
land patent is open to review on the ground of actual fraud as in Section 38 of the Land
Registration Act, now Section 32 of P.D. 1529, and clothing a public land patent certificate of title
with indefeasibility. Nevertheless, the pertinent pronouncements in the aforecited cases clearly
reveal that Section 38 of the Land Registration Act, now Section 32 of P.D. 1529 was applied by
implication by this Court to the patent issued by the Director of Lands duly approved by the
Secretary of Natural Resources, under the signature of the President of the Philippines in
accordance with law. The date of issuance of the patent, therefore, corresponds to the date of
the issuance of the decree in ordinary registration cases because the decree finally awards the
land applied for registration to the party entitled to it, and the patent issued by the Director of
Lands equally and finally grants, awards, and conveys the land applied for to the applicant. This,
to our mind, is in consonance with the intent and spirit of the homestead laws, i.e. conservation
of a family home, and to encourage the settlement, residence and cultivation and improvement
of the lands of the public domain. If the title to the land grant in favor of the homesteader would
be subjected to inquiry, contest and decision after it has been given by the Government thru the
process of proceedings in accordance with the Public Land Law, there would arise uncertainty,
confusion and suspicion on the governments system of distributing public agricultural lands
pursuant to the Land for the Landless policy of the State. (Emphases ours, citations omitted.)
Yet, we emphasize that our statement in the aforequoted case that a certificate of title issued
pursuant to a homestead patent becomes indefeasible after one year, is subject to the proviso
that the land covered by said certificate is a disposable public land within the contemplation of
the Public Land Law. As we have ruled herein, the subject property is part of the Matchwood
Forest Reserve and is inalienable and not subject to disposition. Being contrary to the Public Land
Law, Homestead Patent No. 111598 and OCT No. P5885 issued in respondent Roxass name are
void; and the right of petitioner Republic to seek cancellation of such void patent/title and
reversion of the subject property to the State is imprescriptible.

We have addressed the same questions on indefeasibility of title and prescription

in Mangotara,61thus:chanRoblesvirtualLawlibrary
It is evident from the foregoing jurisprudence that despite the lapse of one year from the entry of
a decree of registration/certificate of title, the State, through the Solicitor General, may still
institute an action for reversion when said decree/certificate was acquired by fraud or
misrepresentation. Indefeasibility of a title does not attach to titles secured by fraud and
misrepresentation. Wellsettled is the doctrine that the registration of a patent under the Torrens
system does not by itself vest title; it merely confirms the registrants already existing one.
Verily, registration under the Torrens system is not a mode of acquiring ownership.

But then again, the Court had several times in the past recognized the right of the State to avail
itself of the remedy of reversion in other instances when the title to the land is void for reasons
other than having been secured by fraud or misrepresentation. One such case is Spouses
Morandarte v. Court of Appeals, where the Bureau of Lands (BOL), by mistake and oversight,
granted a patent to the spouses Morandarte which included a portion of the Miputak River. The
Republic instituted an action for reversion 10 years after the issuance of an OCT in the name of
the spouses Morandarte. The Court ruled:chanRoblesvirtualLawlibrary
Be that as it may, the mistake or error of the officials or agents of the BOL in this regard cannot
be invoked against the government with regard to property of the public domain. It has been said
that the State cannot be estopped by the omission, mistake or error of its officials or agents.

It is wellrecognized that if a person obtains a title under the Public Land Act which includes, by
oversight, lands which cannot be registered under the Torrens system, or when the Director of
Lands did not have jurisdiction over the same because it is a public domain, the grantee does
not, by virtue of the said certificate of title alone, become the owner of the land or property
illegally included. Otherwise stated, property of the public domain is incapable of registration and
its inclusion in a title nullifies that title.
Another example is the case of Republic of the Phils. v. CFI of Lanao del Norte, Br. IV, in which the
homestead patent issued by the State became null and void because of the grantees violation of
the conditions for the grant. The Court ordered the reversion even though the land subject of the
patent was already covered by an OCT and the Republic availed itself of the said remedy more
than 11 years after the cause of action accrued, because:chanRoblesvirtualLawlibrary
There is merit in this appeal considering that the statute of limitation does not lie against the
State. Civil Case No. 1382 of the lower court for reversion is a suit brought by the petitioner
Republic of the Philippines as a sovereign state and, by the express provision of Section 118 of
Commonwealth Act No. 141, any transfer or alienation of a homestead grant within five (5) years
from the issuance of the patent is null and void and constitute a cause for reversion of the
homestead to the State. In Republic vs. Ruiz, 23 SCRA 348, We held that the Court below
committed no error in ordering the reversion to plaintiff of the land grant involved herein,
notwithstanding the fact that the original certificate of title based on the patent had been
cancelled and another certificate issued in the names of the grantee heirs. Thus, where a
grantee is found not entitled to hold and possess in fee simple the land, by reason of his having
violated Section 118 of the Public Land Law, the Court may properly order its reconveyance to
the grantor, although the property has already been brought under the operation of the Torrens
System. And, this right of the government to bring an appropriate action for reconveyance is not
barred by the lapse of time: the Statute of Limitations does not run against the State. (Italics
supplied). The above ruling was reiterated in Republic vs. Mina, 114 SCRA 945.
If the Republic is able to establish after trial and hearing of Civil Case No. 6686 that the decrees
and OCTs in Doa Demetrias name are void for some reason, then the trial court can still order
the reversion of the parcels of land covered by the same because indefeasibility cannot attach to
a void decree or certificate of title. x x x. (Citations omitted.)chanroblesvirtualawlibrary
Neither can respondent Roxas successfully invoke the doctrine of estoppel against petitioner
Republic. While it is true that respondent Roxas was granted Homestead Patent No. 111598 and
OCT No. P5885 only after undergoing appropriate administrative proceedings, the Government
is not now estopped from questioning the validity of said homestead patent and certificate of
title. It is, after all, hornbook law that the principle of estoppel does not operate against the
Government for the act of its agents. 62 And while there may be circumstances when equitable
estoppel was applied against public authorities, i.e., when the Government did not undertake any
act to contest the title for an unreasonable length of time and the lot was already alienated to
innocent buyers for value, such are not present in this case. 63 More importantly, we cannot use
the equitable principle of estoppel to defeat the law. Under the Public Land Act and Presidential
Proclamation No. 678 dated February 5, 1941, the subject property is part of the Matchwood
Forest Reserve which is inalienable and not subject to disposition.

WHEREFORE, we GRANT the Petitions and REVERSE and SET ASIDE the Decision dated April 21,
2003 of the Court of Appeals in CAG.R. CV No. 44926, which, in turn, affirmed the Decision
dated February 10, 1994 of the Regional Trial Court, Branch 39 of Oriental Mindoro, in Civil Case
No. R3110. We DECLARE Homestead Patent No. 111598 and OCT No. P5885 in the name of
respondent Vicente Roxas null and void and ORDER the cancellation of the said patent and
certificate of title. We further ORDER the reversion of the subject property to the public domain
as part of the Matchwood Forest Reserve.

SO ORDERED.

Sereno, C.J., (Chairperson), Del Castillo, * Villarama, Jr., and Reyes, JJ., concur.

Endnotes: