Chavez v.

Pea and Amari

Fact:
In 1973, the Comissioner on Public Highways entered into a contract to reclaim areas of Manila Bay with the Construction and Development
Corportion of the Philippines (CDCP).

PEA (Public Estates Authority) was created by President Marcos under P.D. 1084, tasked with developing and leasing reclaimed lands. These
lands were transferred to the care of PEA under P.D. 1085 as part of the Manila Cavite Road and Reclamation Project (MCRRP). CDCP and
PEA entered into an agreement that all future projects under the MCRRP would be funded and owned by PEA.

By 1988, President Aquino issued Special Patent No. 3517 transferring lands to PEA. It was followed by the transfer of three Titles (7309, 7311
and 7312) by the Register of Deeds of Paranaque to PEA covering the three reclaimed islands known as the FREEDOM ISLANDS.

Subsquently, PEA entered into a joint venture agreement (JVA) with AMARI, a Thai-Philippine corporation to develop the Freedom Islands. Along
with another 250 hectares, PEA and AMARI entered the JVA which would later transfer said lands to AMARI. This caused a stir especially when
Sen. Maceda assailed the agreement, claiming that such lands were part of public domain (famously known as the mother of all scams).

Peitioner Frank J. Chavez filed case as a taxpayer praying for mandamus, a writ of preliminary injunction and a TRO against the sale of
reclaimed lands by PEA to AMARI and from implementing the JVA. Following these events, under President Estradas admin, PEA and AMARI
entered into an Amended JVA and Mr. Chaves claim that the contract is null and void.

Issue:
w/n: the transfer to AMARI lands reclaimed or to be reclaimed as part of the stipulations in the (Amended) JVA between AMARI and PEA violate
Sec. 3 Art. XII of the 1987 Constitution
w/n: the court is the proper forum for raising the issue of whether the amended joint venture agreement is grossly disadvantageous to the
government.

Held:
On the issue of Amended JVA as violating the constitution:
1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by certificates of title in the name of PEA, are alienable
lands of the public domain. PEA may lease these lands to private corporations but may not sell or transfer ownership of these lands to private
corporations. PEA may only sell these lands to Philippine citizens, subject to the ownership limitations in the 1987 Constitution and existing laws.

2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of the public domain until classified as alienable
or disposable lands open to disposition and declared no longer needed for public service. The government can make such classification and
declaration only after PEA has reclaimed these submerged areas. Only then can these lands qualify as agricultural lands of the public domain,
which are the only natural resources the government can alienate. In their present state, the 592.15 hectares of submerged areas are inalienable
and outside the commerce of man.

3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34 hectares110 of the Freedom Islands, such
transfer is void for being contrary to Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of
alienable land of the public domain.

4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares111 of still submerged areas of Manila Bay, such
transfer is void for being contrary to Section 2, Article XII of the 1987 Constitution which prohibits the alienation of natural resources other than
agricultural lands of the public domain.

PEA may reclaim these submerged areas. Thereafter, the government can classify the reclaimed lands as alienable or disposable, and further
declare them no longer needed for public service. Still, the transfer of such reclaimed alienable lands of the public domain to AMARI will be void
in view of Section 3, Article XII of the 1987Constitution which prohibits private corporations from acquiring any kind of alienable land of the public
domain.
G.R. No. L-30263-5 October 3, 1987
REPUBLIC OF THE PHILIPPINES, Represented by the DIRECTOR OF LANDS, petitioners,
vs.
THE HON. ANDRES REYES, Presiding Judge, Branch VI, Court of First Instance of Rizal, GODOFREDO R. EUSEBIO, URBANO C.
LARA, GIL VENEZUELA, RODOLFO CENIDOZA, RAMON OROSA, AND JOSEFINA OROSA (Spouses), THE PHILIPPINE
COMMERCIAL AND INDUSTRIAL BANK and THE REGISTER OF DEEDS OF RIZAL, respondents.

PARAS, J.:
This is a petition for certiorari with preliminary injunction seeking the annulment of the Order of the Court of First Instance of Rizal, 7th Judicial
District, Branch VI, Pasig, Rizal dated December 16, 1968 in Civil Case No. 10047 entitled Godofredo R. Eusebio and Urbano C. Lara vs.
Director of Lands.
The dispositive portion of the questioned order reads:
Wherefore, the orders of this court dated May 8, 1968, June 29, 1968 and August 27, 968 are hereby set aside and the Motion to Admit
Petition to Reopen Proceedings is hereby denied.
The undisputed facts of this case are as follows:
Sometime on April 17, 1956 respondents Urbano C. Lara and Godofredo R. Eusebio filed with the Bureau of Lands their Free Patent
Applications for the parcels of land designated as Free Patent Applications Nos. 7-207 and 7-208 for Lot No. 1 (10.3629 hectares) and Lot No.
2 (15.2892 hectares), Psu-152606, respectively, situated in Napindan, Taguig, Rizal. After the posting of notices and upon favorable
recommendation of a representative of the Bureau of Lands, said free patent applications were approved on June 14, 1956 as shown by the
order of approval of applications and issuance of patents. Thus, on June 16, 1956, Free Patent Nos. V-45853 and V45854 were issued to
respondents Godofredo R. Eusebio and Urbano C. Lara, which patents were transcribed and registered on June 21, 1956 by the respondent
Register of Deeds of Rizal in the Registration Book for the Province of Rizal in accordance with Section 122 of Act No. 496, as amended, as
Original Certificates of Title Nos. 140 and 139, respectively.
In a subsequent investigation conducted by the Anti-Graft and Corruption Board of the Bureau of Lands, it was discovered that the parcels of
land patented and titled in the names of respondents Godofredo R. Eusebio and Urbano C. Lara were actually under water and form part of
the Laguna de Bay. Neither were private respondents able to occupy or possess said lots. Evidence clearly showed that there were no signs
of cultivation or of any improvement thereon.
On March 16 and March 22, 1960, respondents Urbano C. Lara and Godofredo R. Eusebio executed separate affidavits, admitting that they
have not complied with certain requirements of the Public Land Act and expressly agreed to have their patents and certificates of title
cancelled (Rollo, pp. 13-14).
By virtue of the findings of the Anti-Graft and Corruption Board of the Bureau of Lands, the affidavits and the surrender of the owner's copy of
the certificate of title, the herein petitioner, represented by the Director of Lands, as plaintiff, filed separate complaints against herein
respondents Godofredo R. Eusebio and Urbano C. Lara and the respondent Register of Deeds of Rizal as defendants, before the Court of
First Instance of Rizal docketed as Civil Cases Nos. 6747 and 6748 in said court, for the cancellation of Free Patent Nos. V-45853 and V45854 and Original Certificates of Titles Nos. 140 and 139 (Rollo, pp. 15-20).
Accordingly, summons together with copies of the complaints were duly served upon all the defendants in Civil Cases Nos. 6747 and 6748 as
shown by the returns (Rollo, pp. 21-22) dated August 16, 1961 submitted by the Provincial Sheriff of Rizal to the Court of First Instance of
Rizal. However, notwithstanding their receipt of the summons and copies of the complaint, the defendants, herein respondents Godofredo R.

Eusebio and Urbano C. Lara, failed to file their answers to the complaint. As a result thereof and upon proper motion of the plaintiff (herein
petitioner) the Court of First Instance of Rizal, 7th Judicial Region, Branch II, Pasig, Rizal, entered an order on November 25, 1961 (Rollo, p.
23) declaring defendants (herein respondents) in Civil Cases Nos. 6747 and 6748 in default. On October 6, 1962, on the basis of evidence
submitted by the plaintiff (herein petitioner) the Court of First Instance of Rizal, rendered separate decisions * declaring null and void Free
Patent Nos. V-45853 and V-45854 and their corresponding Certificates of Title Nos. 140 and 139 and ordering the Register of Deeds of Rizal
to cancel said patents and titles (Rollo, pp. 24-29) and for failure of defendants to move for reconsideration or appeal, said decisions became
final and executory (Rollo, p. 5).
On December 12, 1962, respondent Register of Deeds addressed separate and Identical letters to respondents Godofredo R. Eusebio and
Urbano C. Lara, informing them of the decision of the Court of First Instance of Rizal in Civil Cases Nos. 6747 and 6748 and advising them to
surrender their owner's duplicate copy of Original Certificates of Titles Nos. 139 and 140 for cancellation pursuant to the directive of the Court
(Rollo, pp. 30-31). On December 27, 1962, said respondents wrote a letter to the Register of Deeds stating that the owner's duplicate of title
called for had long been surrendered to Atty. Eduardo Javier of the Investigation Section of the Bureau of Lands (Rollo, p. 32).
On June 3, 1967, after the lapse of almost five (5) years, respondents Godofredo R. Eusebio and Urbano C. Lara, this time, as plaintiffs,
instituted Civil Case No. 10047 against the Director of Lands, as defendant (herein petitioner) for the annulment of the aforementioned
decision of the Court of First Instance of Rizal, Branch II in Civil Cases Nos. 6747 and 6748, alleging as grounds therefor that the Court had
not acquired jurisdiction over their persons and that the decision was procured through fraud (Rollo, pp. 33-36).
Although, the records show that the Director of Lands had not been properly served with summons in Civil Case No. 10047, the Court of First
Instance of Rizal, 7th Judicial District, Branch VI, acting upon an Ex-Parte Motion to Declare Defendant in Default filed by herein respondents
Godofredo R. Eusebio and Urbano C. Lara declared defendant (herein petitioner) Director of Lands in default and allowed the plaintiffs
(respondents herein) to adduce their evidence before the Special Clerk of Court (Rollo, p. 38).
On July 6, 1967, the Court of First Instance of Rizal, 7th Judicial District, Branch VI, rendered a decision declaring the decision dated October
6, 1962 of the Court of First Instance, 7th Judicial District, Branch II in Civil Cases Nos. 6747 and 6748 null and void. The decretal portion of
said decision reads as follows:
Wherefore, the decision rendered in Civil Cases Nos. 6747 and 6748 is hereby declared null and void and the Director of Lands is hereby
ordered to reinstate Free Patents Nos. V 45853 and V-45854 issued in the names of Urbano C. Lara and Godofredo R. Eusebio respectively,
and the Register of Deeds of Rizal is likewise ordered to reinstate OCT No. 139 and 140 issued in the names of the patentees pursuant to the
aforesaid patents.
SO ORDERED.
On March 14, 1968, a Motion to Admit Petition to Reopen Proceedings with Additional Parties was filed by defendant (herein petitioner)
Director of Lands in the Court of First Instance of Rizal, Branch VI, wherein it alleged that the said court did not acquire jurisdiction over the
person of the defendant (petitioner) among other things (Rollo, pp. 43- 44). On the same day, the Director of Lands filed A Petition to Reopen
Proceedings in the amended court (Rollo, pp. 45-48). The aforestated petition averred that on July 3, 1967, even before the promulgation of
the aforementioned decision and notwithstanding the fact that their patents and certificates of title had long been declared null and void in Civil
Cases Nos. 6747 and 6748, respondents Eusebio and Lara, in consideration of P10,000.00 for their respective parcels of land, executed
separate deeds of absolute sale involving the alleged lands in question in favor of respondents Gil Venezuela, Rodolfo Cenidoza and Ramon
Orosa (Rollo, p. 46). Subsequently, on August 9, 1967, immediately upon securing the certification of the Clerk of Court that the decision in the
instant case had become final and executory, respondents caused the cancellation of Original Certificates of Titles Nos. 139 and 140 and the
issuance in lieu thereof of Transfer Certificates of Title Nos. 196349 and 196348, respectively, in the names of respondents Gil Venezuela,
Rodolfo Cenidoza and Ramon Orosa. Accordingly, on August 22, 1967, in consideration of P25,000.00 for each alleged parcel, respondents
Gil Venezuela and Rodolfo Cenidoza executed separate deeds of transfer of rights in favor of respondents spouses Ramon Orosa and
Josefina Orosa, as a consequence of which Transfer Certificates of Title Nos. 196348 and 196349 were cancelled and in lieu thereof, Transfer
Certificates of Title Nos. T-211957 add T-211958 to respondents spouses Ramon Orosa and Josefina Orosa. Respondents spouses, Ramon
Orosa and Josefina Orosa, in consideration of a loan in the amount of P800,000.00 executed a deed of mortgage of the aforestated on
December 27, 1967 in favor of respondent Philippine Commercial and Industrial Bank (Rollo, pp. 46-47).
On March 28, 1968, intervenors spouses, Ramon Orosa and Josefina Orosa filed their motion for leave to intervene in opposition to the Motion
to Admit Petition to reopen proceedings with additional parties filed by the Director of Lands on March 16, 1968 (Rollo, p. 178) and the
Intervenors' Opposition on the aforesaid petition to reopen proceedings of the petitioner (Rollo, p. 181). Respondent Gil, Venezuela filed his
opposition on April 17, 1968 (Rollo, p. 104) and his Supplemental Opposition while respondent Rodolfo Cenidoza filed his separate opposition
to the petition to reopen proceedings on June 3, 1968 (Rollo, p. 239).
The Court of First Instance of Rizal, Branch II, after consideration of the motion to admit petition to reopen proceedings with additional parties
as well as the oppositions interposed thereto granted the motion on May 8, 1968 (Rollo, p. 49). Motion for reconsideration of the aforesaid
order by the court was filed by the intervenors spouses Ramon Orosa and Josefina Orosa on May 27, 1968 (Rollo, p. 190) while respondent
Gil Venezuela filed his urgent manifestation and motion for reconsideration on June 6, 1968 (Rollo, p. 114). On June 8, 1968, the Director of
Lands (petitioner herein) filed his opposition to the intervenors' and Gil Venezuela's motion for reconsideration of the Order dated May 8, 1968
(Rollo, p. 195). Consequently on June 12, 1968 the intervenors spouses Ramon Orosa and Josefina Orosa filed their Intervenors' Reply to the
Defendants' Opposition (Rollo, p. 203).

On June 29, 1986, the Court of First Instance of Rizal denied, in an order, the motion for reconsideration filed by the intervenors and set the
hearing on July 29, 1968 (Rollo, p. 50). A motion for Clarification and/or Reconsideration of the Order of June 29, 1968 and Motion for Second
Reconsideration of the Order of May 8, 1960 was filed by the intervenors on July 22, 1968 (Rollo, p. 205). However this was denied by the
court in an order dated August 27, 1968 (Rollo, p. 51). Meanwhile, the intervenors filed their third motion for reconsideration of the order of
May 8, 1968 and/or Clarification and Reconsideration of the Order of August 27, 1968 on November 2, 1968 (Rollo, p. 217), which was
opposed by herein petitioner in its Opposition to Intervenors' Third Motion for Reconsideration on November 23, 1968 (Rollo, p. 228).
On December 16, 1968, the Court of First Instance of Rizal granting the said third motion for reconsideration, set aside its Orders dated May
8, 1968, June 29, 1968 and August 27, 1968 and denied the Motion to Admit Petition to Reopen Proceedings. The court ruled that the petition
is not the proper course of action available to the Director of Lands, who has not availed of the remedies provided by the Rules of Court or the
land Registration Court such as relief from the order of default or appeal from judgment or review thereof, and has consequently lost his
personality when he was declared in default, and the Court, its jurisdiction to entertain the aforementioned Petition to Reopen (Rollo, pp. 5253).
Hence, this petition.
Notice of lis pendens was given to the Register of Deeds on March 10, 1969 (Rollo, p. 57). On March 11, 1969, in a resolution promulgated by
this Court, the respondents were required to file their answers and a writ of preliminary injunction was issued without bond (Rollo, p. 60).
Respondents except the Register of Deeds of Rizal were restrained from entering into any transaction in connection with Transfer Certificates
of Title Nos. T-211957 and T-211958 and specifically prohibit the respondent Register of Deeds of Rizal to accept, record, transcribe and
register any transaction concerning the free patents and certificates of title subject matter of Civil Cases Nos. 6747-48 (Rollo, pp. 60-61).
On March 26, 1969, respondent spouses Ramon Orosa and Josefina Orosa manifested that they be furnished with a copy of the petition for
certiorari so that they may file their answer thereto (Rollo, pp. 65-66). Respondent Philippine Commercial and Industrial Bank filed its answer
on April 2, 1969 (Rollo, pp. 71-73) while respondent Gil Venezuela and respondent spouses, Ramon Orosa and Josefina Orosa filed their
answers on April 24, 1969 and April 16, 1969, respectively (Rollo, pp. 95-103; 120-137). Respondent Rodolfo A. Cenidoza filed his answer on
May 2, 1969 (Rollo, pp. 236-238), but respondents patentees Godofredo R. Eusebio and Urbano C. Lara did not file their answers.
In the Resolution of May 12,1969, the hearing of these cases was set for June 18, 1969 (Rollo, p. 235). At said hearing, counsel for petitioner
was given twenty (20) days within which to submit its memorandum in lieu of oral argument while counsel for respondents was granted leave
to submit a reply thereto and petitioner was allowed to submit a rejoinder (Rollo, p. 242). The Republic of the Philippines, represented by the
Director of Lands filed its memorandum on August 16, 1969 (Rollo, p. 253). Respondent spouses, Ramon Orosa and Josefina Orosa filed their
reply memorandum on October 21, 1971 (Rollo, p. 315) while a supplemental reply was filed by Gil Venezuela on October 30, 1971 (Rollo, p.
394). On June 26, 1987, respondent spouses Ramon Orosa and Josefina Orosa filed an urgent motion to resolve (Rollo, p. 409).
In his memorandum the Director of Lands assails the following acts of respondent Judge as constituting grave abuse of discretion:
A. Taking cognizance of and giving due course to the complaint of Godofredo R. Eusebio and Urbano C. Lara against the Director of Lands
instead of dismissing the complaint outright.
B. Declaring the Director of Lands in default notwithstanding non-service of summons and a copy of the complaint upon said defendant.
C. Setting aside and declaring null and void the two (2) previous, valid, final and fully implemented decisions of the same Court in Civil Cases
Nos. 6747 and 6748.
D. Granting, after two (2) previous denials thereof, the third pro forma motion for reconsideration of respondents Orosa spouses.
E. Denying the Motion to Admit Petition to Reopen Proceedings of the Director of Lands after having previously granted said motion. (Rollo, p.
262).
The pivotal issue in this petition is whether or not a decision which has long become final and executed, can be annulled on the grounds that
the Court lacks jurisdiction over the persons of the defendant and that the decision was procured through fraud.
The petition is impressed with merit.
There is no question that the Court acquired jurisdiction over the persons of the defendants, respondents herein, Godofredo R. Eusebio and
Urbano C. Lara in Civil Cases Nos. 6747 and 6748, respectively, as clearly adduced from the evidence presented that personal service was
made on them. As shown by the Sheriff's returns, in Civil Cases Nos. 6747 and 6748, respondent Godofredo R. Eusebio was duly served with
summons and a copy of the complaint in Civil Case No. 6747, while Urbano C. Lara was personally served with summons and a copy of the
complaint in Civil Case No. 6748. Both services were made on August 16, 1961 upon the respondents at Bambang, Pasig, Rizal their
recorded address (Rollo, pp. 265-266).
Apart from the fact that Deputy Sheriff Maximo de Silva enjoys the presumption that he had regularly performed his duty, the records amply
show that, contrary to respondents Eusebio's and Lara's claim that they were completely unaware of the proceedings, they were duly
summoned in Civil Cases Nos. 6747 and 6748 on August 16, 1961; that copies of the decisions in these cases were furnished them by the

Clerk of Court of the Court of First Instance of Rizal; that the Register of Deeds in separate letters informed them of the decisions in these
cases and in reply to the request of the Register of Deeds to surrender their owners' duplicate certificates of OCT Nos. 140 and 139, they
alleged in a joint letter that they had long surrendered their owner's duplicates certificates to the Bureau of Lands (Rollo, p. 267). Jurisdiction
over the person of a defendant is acquired when he actually receives the summons (Fuentes vs. Bautista, 53 SCRA 420 [1979]).
Thus, it is beyond dispute that all the proceedings in Civil Cases Nos. 6747 and 6748 are regular and that the trial court rendered valid
judgment on the aforestated cases which have become final and executory and are res adjudicata. This Court ruled in the case of
(Zansibarian Residents Association vs. Municipality of Makati, 135 SCRA 235 [1985]), that once judgment has become final, the issue therein
should be laid at rest. Final judgment was promulgated and a writ of execution was issued. Respondents herein did not avail of any remedies
available to them until after five (5) long years when they filed Civil Case No. 10047 in another court.
As held by this Court in Bayer Philippines, Inc. vs. Agana, 63 SCRA 355 [1975], "Once a court renders a final judgment, all the issues between
or among the parties before it are deemed resolved and its judicial function as regards any matter related to the controversy litigated comes to
an end. The execution of its judgment is purely a ministerial phase of adjudication. Indeed the nature of its duty to see to it that the claim of the
prevailing party is fully satisfied from the properties of the loser is generally ministerial." A judgment whether correct or not becomes final when
the plaintiff did not appeal said judgment (Malia vs. IAC, 138 SCRA 116 [1985]) and courts are without jurisdiction over the case once
judgment has become final (Vda. de Emmas vs. Emmas, 95 SCRA 470 [1979]). The doctrine of finality of judgment is grounded on
Fundamental considerations of public policy and sound practice that at the risk of occasional errors, the judgment of the courts must become
final at some definite date fixed by law (Philippine Rabbit Bus Lines, Inc. vs. Arciaga, 148 SCRA 433 [1987]).
Hence, the filing of Civil Case No. 10047 is improper and there can be no justification for respondent Judge's taking cognizance of and giving
due course to the complaint filed therein by respondents Eusebio and Lara against the Director of Lands; much less his setting aside of final,
executory and fully implemented judgments resulting in the cancellation of original certificates of titles issued by respondent Register of Deeds
of Rizal. Where judgment had long become final and executory and absent a showing that respondents were deprived of due process or that
said judgment was procured by extrinsic or collateral fraud, the judgment can no longer be set aside (Gaba vs. Castro, 120 SCRA 505 [1983]).
Moreover, the doctrine of non-interference has been regarded as an elementary principle of higher importance in the administration of justice
that the judgment of a court of competent jurisdiction may not be opened, modified, or vacated by any court of concurrent jurisdiction (30-A Am
Jur 605). As this Court ruled in the case of Mas vs. Dumara-og 12 SCRA 34 [1964], a Judge of a branch of one should not annul the order of a
judge of another branch of the same court. Any branch even if it be in the same judicial district that attempts to annul a judgment of a branch
of the CFI either exceeds its jurisdiction Cabigo vs. Del Rosario, 44 Phil. 84 [1949]) or acts with grave abuse of discretion amounting to lack of
jurisdiction (PNB vs. Javellana, 92 Phil. 525 [1952]). Thus, in the case ofParco vs. CA, 111 SCRA 262, this Court held that the various
branches of the Court of First Instance being co-equal cannot interfere with the respective cases of each branch, much less a branch's order
or judgment.
Pertinent thereto is Article VIII, Section 5 of the 1987 Constitution:
The Supreme Court shall have exclusive jurisdiction to review, revise, reverse, modify or affirm on appear as the law or rules of court may
provide, final judgments and decrees of the inferior courts as herein provided. (Emphasis supplied).
Respondent spouses Ramon Orosa and Josefina Orosa, Gil Venezuela and Rodolfo Cenidoza contend that they are buyers in good faith.
Besides the fact that such contention is belied by the records which show that on July 3, 1967, even before the promulgation of the decision in
Civil Case No. 10047, and while their patents and titles remained cancelled, respondents Eusebio and Lara, in consideration of P10,000.00
paid to them for their respective parcels, executed separate deeds of absolute sale over the lands in question in favor of Gil Venezuela,
Rodolfo Cenidoza and Ramon Orosa (Rollo, p. 259). The Court ruled in the case of Republic vs. Court of Appeals, 148 SCRA 480 [1987]).
That it is well settled that any title issued on non-disposable lots even in the hands of an alleged innocent purchaser for value, shall be
cancelled. In the case at bar, the free patents and certificates of title issued to Eusebio and Lara cover areas which form parts of Laguna de
Bay. These are neither agricultural nor disposable. Subject patents and titles were erroneously issued due to misrepresentations and false
reports and must therefore be cancelled. Any false statement in an application for public land shall ipso facto produce the cancellation of the
title granted. This rule applies even after the issuance of the certificate of title (Chacon Enterprises vs. Court of Appeals, 124 SCRA 784
[1983]). A certificate of title cannot be used as a shield to perpetuate fraud, and the doctrine of indefeasibility of torrens title does not apply to
free patent secured through fraud (De Leon vs. Abanilla, 124 SCRA 358). Likewise, the Court ruled in Cuevas vs. Pineda, 143 SCRA 674
[1986], that mere possession of land does not itself divest the land of its public character.
Void free patents and certificates of title do not divest the state of its ownership of the land nor operate to change the public character of the
land to private (Director of Lands vs. Gonzales, 120 SCRA 375 [1983]).
Under the same principle, the Philippine Commercial and Industrial Bank, although an innocent mortgagee for value, acquires no protection
under the Land Registration Law.
While it is true that a bank is not required, before accepting a mortgage, to make an investigation of the title of the property being given as
security (Philippine National Cooperative Bank vs. Carandang-Villalon, 139 SCRA 570 [1985]), and that where the torrens title of the land was
in the name of the mortgagor and later given as security for a bank loan, the subsequent declaration of said Title as null and void is not a
ground for nullifying the mortgage rights of the bank which has acted in good faith (Philippine National Cooperative Bank vs. Carandang-

Villalon, supra; Penullar vs. PNB, 120 SCRA 171 [1983]), it is apparent that the law on innocent purchasers for value does not apply insofar as
non-disposable public lands are concerned.
PREMISES CONSIDERED, We hereby rule that: (1) the decision dated July 6, 1967 and order dated December 16, 1968 are REVERSED
and SET ASIDE; (2) the decisions in Civil Cases Nos. 6747 and 6748 dated October 6, 1962 are reinstated; (3) the Register of Deeds of Rizal
is directed to cancel all Certificates of Titles issued in connection with the proceedings in Civil Case No. 10047; and (4) the real estate
mortgage I gage executed by the respondent spouses Orosa in favor of the Philippine Commercial and Industrial Bank is SET ASIDE, but their
indebtedness must be paid to the Bank.
HEIRS OF MARIO MALABANAN vs. REPUBLIC OF THE PHILIPPINES
HEIRS OF MARIO MALABANAN vs. REPUBLIC OF THE PHILIPPINES
GR No. 179987
April 29, 2009
en banc

FACTS:
On 20 February 1998, Mario Malabanan filed an application for land registration before the RTC of Cavite-Tagaytay, covering a parcel of land
situated in Silang Cavite, consisting of 71,324 square meters. Malabanan claimed that he had purchased the property from Eduardo Velazco,
and that he and his predecessors-in-interest had been in open, notorious, and continuous adverse and peaceful possession of the land for
more than thirty (30) years. Velazco testified that the property was originally belonged to a twenty-two hectare property owned by his greatgrandfather, Lino Velazco. Lino had four sons Benedicto, Gregorio, Eduardo and Estebanthe fourth being Aristedess grandfather. Upon
Linos death, his four sons inherited the property and divided it among themselves. But by 1966, Estebans wife, Magdalena, had become the
administrator of all the properties inherited by the Velazco sons from their father, Lino. After the death of Esteban and Magdalena, their son
Virgilio succeeded them in administering the properties, including Lot 9864-A, which originally belonged to his uncle, Eduardo Velazco. It was
this property that was sold by Eduardo Velazco to Malabanan.
Among the evidence presented by Malabanan during trial was a Certification dated 11 June 2001, issued by the Community Environment &
Natural Resources Office, Department of Environment and Natural Resources (CENRO-DENR), which stated that the subject property was
verified to be within the Alienable or Disposable land per Land Classification Map No. 3013 established under Project No. 20-A and approved
as such under FAO 4-1656 on March 15, 1982. On 3 December 2002, the RTC approved the application for registration.
The Republic interposed an appeal to the Court of Appeals, arguing that Malabanan had failed to prove that the property belonged to the
alienable and disposable land of the public domain, and that the RTC had erred in finding that he had been in possession of the property in the
manner and for the length of time required by law for confirmation of imperfect title. On 23 February 2007, the Court of Appeals reversed the
RTC ruling and dismissed the appliocation of Malabanan.
ISSUES:
1. In order that an alienable and disposable land of the public domain may be registered under Section 14(1) of Presidential Decree No. 1529,
otherwise known as the Property Registration Decree, should the land be classified as alienable and disposable as of June 12, 1945 or is it
sufficient that such classification occur at any time prior to the filing of the applicant for registration provided that it is established that the
applicant has been in open, continuous, exclusive and notorious possession of the land under a bona fide claim of ownership since June 12,
1945 or earlier?
2. For purposes of Section 14(2) of the Property Registration Decree may a parcel of land classified as alienable and disposable be deemed
private land and therefore susceptible to acquisition by prescription in accordance with the Civil Code?
3. May a parcel of land established as agricultural in character either because of its use or because its slope is below that of forest lands be
registrable under Section 14(2) of the Property Registration Decree in relation to the provisions of the Civil Code on acquisitive prescription?
4. Are petitioners entitled to the registration of the subject land in their names under Section 14(1) or Section 14(2) of the Property Registration
Decree or both?
HELD:
The Pertition is denied.
(1) In connection with Section 14(1) of the Property Registration Decree, Section 48(b) of the Public Land Act recognizes and confirms that
those who by themselves or through their predecessors in interest have been in open, continuous, exclusive, and notorious possession and

occupation of alienable and disposable lands of the public domain, under a bona fide claim of acquisition of ownership, since June 12, 1945
have acquired ownership of, and registrable title to, such lands based on the length and quality of their possession.
(a) Since Section 48(b) merely requires possession since 12 June 1945 and does not require that the lands should have been alienable and
disposable during the entire period of possession, the possessor is entitled to secure judicial confirmation of his title thereto as soon as it is
declared alienable and disposable, subject to the timeframe imposed by Section 47 of the Public Land Act.
(b) The right to register granted under Section 48(b) of the Public Land Act is further confirmed by Section 14(1) of the Property Registration
Decree.
(2) In complying with Section 14(2) of the Property Registration Decree, consider that under the Civil Code, prescription is recognized as a
mode of acquiring ownership of patrimonial property. However, public domain lands become only patrimonial property not only with a
declaration that these are alienable or disposable. There must also be an express government manifestation that the property is already
patrimonial or no longer retained for public service or the development of national wealth, under Article 422 of the Civil Code. And only when
the property has become patrimonial can the prescriptive period for the acquisition of property of the public dominion begin to run.
(a) Patrimonial property is private property of the government. The person acquires ownership of patrimonial property by prescription under
the Civil Code is entitled to secure registration thereof under Section 14(2) of the Property Registration Decree.
(b) There are two kinds of prescription by which patrimonial property may be acquired, one ordinary and other extraordinary. Under ordinary
acquisitive prescription, a person acquires ownership of a patrimonial property through possession for at least ten (10) years, in good faith and
with just title. Under extraordinary acquisitive prescription, a persons uninterrupted adverse possession of patrimonial property for at least
thirty (30) years, regardless of good faith or just title, ripens into ownership.
It is clear that the evidence of petitioners is insufficient to establish that Malabanan has acquired ownership over the subject property under
Section 48(b) of the Public Land Act. There is no substantive evidence to establish that Malabanan or petitioners as his predecessors-ininterest have been in possession of the property since 12 June 1945 or earlier. The earliest that petitioners can date back their possession,
according to their own evidencethe Tax Declarations they presented in particularis to the year 1948. Thus, they cannot avail themselves of
registration under Section 14(1) of the Property Registration Decree.
Neither can petitioners properly invoke Section 14(2) as basis for registration. While the subject property was declared as alienable or
disposable in 1982, there is no competent evidence that is no longer intended for public use service or for the development of the national
evidence, conformably with Article 422 of the Civil Code. The classification of the subject property as alienable and disposable land of the
public domain does not change its status as property of the public dominion under Article 420(2) of the Civil Code. Thus, it is insusceptible to
acquisition by prescription.