CASE:LandBankvsRepublic

FACTS:

Forestlandsareoutsidethecommerceofmanandareunsusceptibletoappropriation
inanyform
OCTwasissuedinfavorofAngelitoBugayongonSeptember1969.Thetitlecoversa
parceloflandinDavaoCitywithanareaof41,267squaremeters.
ThelandwassubdividedintofourlotsandanewOCTwasissuedstillunderBugayongs
name.
Bugayongthensoldthelotstodifferentpeopleandoneofthelotswassoldtospouses
Du.
Subsequently,theTCToftheDUspouseswascancelledandwastransferredtothename
ofLourdesFarms.ThelatterthenmortgagedthesaidlottoLandBankofthePhilippines
(LBP).
Therewasnoconflictwithregardstothelotsuntiltheresidenceoftheareaclaimedthat
thesaidlotsbelongedtoaforestzoneandthatitwascoveredwithseawaterduringhigh
tide.
TheRepublictheninstitutedacomplaintagainstBugayongandalltheownersofthelot
LBPthenclaimedthatitwasamortgageeingoodfaithandshouldthesalebeannulled,
LourdesFarmsshouldbeorderedtopayLBPtheirexistingdebt.
RTCruledthatthetitlesofthelandwerevoid,CAalsoaffirmedthedecision,

ISSUE:
WhetherornotLBPsmortgageerightwillstillsubsistdespitethetitlesbeingdeclaredasvoid
bythecourt?
HELD:(NOMERIT)
ItissettledthatwhenBugayongacquiredOCToftheland,thesaidlandwasstillpartof
theforestlandofthePhilippines.ItwasonlydeclaredasalienableonMarch25,1981
LBPclaimsthattheirrightasmortgageeshouldberespectedandthatsuchrightbindsthe
wholeworld.Italsoclaimedthatitisnotdutyboundtoinvestigatefurtherthetorrens
title
ItwasimpossibleforLBPtogainamortgageerightoverthepropertyconsideringthat
the property was never legally vested to Lourdes Farms in the first place. It was
impossibleforLourdesFarmstolegallygainpossession/ownershipofthelandbecause
itwasonlyon1981whenthelandwasclassifiedasalienable.
Lastly,thesaidconfiscationdonebythestateisnottantamounttoaviolationofthenon
impairmentclausebecausesaidactionisanexerciseofthepolicepowerofthestate.