DIRECTOR OF LANDS VS ACME

FACTS:

Acme Plywood & Veneer Co., Inc., a corp. represented by Mr. Rodolfo Nazario, acquired from
Mariano and Acer Infiel, members of the Dumagat tribe 5 parcels of land possession of the
Infiels over the land dates back before the Philippines was discovered by Magellan land sought
to be registered is a private land pursuant to RA 3872 granting absolute ownership to members of
the non-Christian Tribes on land occupied by them or their ancestral lands, whether with the
alienable or disposable public land or within the public domain Acme Plywood & Veneer Co.
Inc., has introduced more than P45M worth of improvements ownership and possession of the
land sought to be registered was duly recognized by the government when the Municipal
Officials of Maconacon, Isabela donated part of the land as the townsite of Maconacon Isabela
IAC affirmed CFI.

ISSUES:

W/N the land is already a private land - YES

W/N the constitutional prohibition against their acquisition by private corporations or

associations applies- NO

HELD:

1. Yes. IAC affirmed Acme Plywood & Veneer Co., Inc already acquired, by operation of
law not only a right to a grant, but a grant of the Government, for it is not necessary that a
certificate of title should be issued in order that said grant may be sanctioned by the
courts, an application therefore is sufficient it had already ceased to be of the public
domain and had become private property, at least by presumption. The application for
confirmation is mere formality, the lack of which does not affect the legal sufficiency of
the title as would be evidenced by the patent and the Torrens title to be issued upon the
strength of said patent. The effect of the proof, wherever made, was not to confer title,
but simply to establish it, as already conferred by the decree, if not by earlier law

2. No. If it is accepted-as it must be-that the land was already private land to which the Infiels
had a legally sufficient and transferable title on October 29, 1962 when Acme acquired it from
said owners, it must also be conceded that Acme had a perfect right to make such acquisition.
The only limitation then extant was that corporations could not acquire, hold or lease public
agricultural lands in excess of 1,024 hectares.

MANOTOK vs. BARQUE

G.R. Nos. 162335 & 162605; August 24, 2010; VILLARAMA, JR., J.)

FACTS: Piedad Estate originally owned by Philippine Sugar Estates Development Company,
Ltd., La Sociedad Agricola de Ultramar, the British-Manila Estate Company, Ltd., and the
Recoleto Order of the Philippine Islands. (It is a Friar Land.) The subject parcel “Lot No. 823” is
part of the Piedad Estate and is located in QC. On 23 December 1903, Piedad Estate was
acquired by the Philippine Government pursuant to the Friar Lands Act. The certificate of title in
the name of the government was OCT No. 614. The Estate was placed under the administration
of the Director of Lands. Controversy arising from conflicting claims over Lot 823 began after a
fire gutted portions of the Quezon City Hall on June 11, 1988 which destroyed records stored in
the Office of the Register of Deeds. In 1990, Manotoks filed a petition with the LRA for
administrative reconstitution of TCT No. 372302 covering Lot No. 823 with an area of 342,945
square meters à GRANTED à TCT No. RT-22481 (372302) was issued in 1991. In 1996, 8 years
after the fire the Barques filed a petition with the LRA for administrative reconstitution of TCT
No. 210177 in the name of Homer Barque also covering Lot 823. In support of their petition, the
Barques submitted copies of the alleged owner’s duplicate of the TCT, real estate tax receipts,
tax declarations and a Plan Fls 3168-D covering the property. MANOTOKs opposed alleging
that TCT No. 210177 was spurious. Although both titles of the Manotoks and the Barques refer
to land belonging to Lot No. 823, TCT No. 210177 actually involves 2 parcels with an aggregate
area of 342,945 square meters, while TCT No. RT-22481 (372302) pertains only to a 1 parcel of
land, with a similar area of 342,945 square meter. 1997 – Barques’ petition was DENIED. à Lot.
No. 823 already registered in the name of the Manotoks. Barques MR was denied à They
appealed to the LRA à LRA Reversed. LRA found that the reconstitution of the Manotok title
was fraudulent. Hence, it ordered the Barque title to be reconstituted. BUT cancellation must
1st be sought in a court of competent jurisdiction of the 1991 Manotok TCT. The LRA denied
the Manotoks’ MR and the Barques’ prayer for immediate reconstitution. Both the Manotoks
and the Barques appealed the LRA decision to the CA. In the CA, Felicitas Manahan filed a
motion to intervene and sought the dismissal of the cases claiming ownership of the subject
propert. Hence, the Manotoks filed the present separate petitions which were ordered
consolidated on August 2, 2004. December 12, 2005, SC First Division à affirmed both
decisions of the CA. à Manotoks filed MR à Denied in April 2006 Resolution. Thereafter, the
Manotoks filed a Motion for Leave to File a Second MR with their MR attached. à Denied in
June 2006 Resolution. Eventually entry of judgment was made in the Book of Entries of
Judgment on May 2, 2006. In the meantime, the Barques filed multiple motions with the First
Division for execution of the judgment, while the Manotoks filed an Urgent Motion to Refer
Motion for Possession to the SC En Banc (with prayer to set motion for oral arguments). à Case
was referred to the En Banc in July 2006. On September 7, 2006, Felicitas Manahan and
Rosendo Manahan filed a motion to intervene, to which was attached their petition in
intervention. They alleged that their predecessor-in-interest, Valentin Manahan, was issued Sale
Certificate No. 511 covering Lot No. 823 and attached the findings of the NBI that the
documents of the Manotoks were not as old as they were purported to be. Consequently, the
Director of the Legal Division of the LMB recommended to the Director of the LMB the
reconstituted Manotok Title should be reverted to the state. Oral arguments were held on July 24,
2007. In 2008 - En Banc set aside the December 2005 1st division decision and entry of
judgment recalled and the CA’s Amended Decisions in CA-G.R. SP Nos. 66642 and 66700 were
reversed and set aside. The En Banc remanded the case to the CA.

The CA was directed to receive evidence of and focus on the issue of WON the
Manotoks can trace their claim of title to a valid alienation by the Government of Lot No. 823 of
the Piedad Estate, which was a Friar Land. PURPOSE: to decide WON the title of the Maotoks
should be annulled. CA’s findings à None of the parties were able to prove a valid alienation of
Lot 823 from the government in accordance with the provisions of Act No. 1120 otherwise
known as the “Friar Lands Act”. Notably lacking in the deed of conveyance of the Manotoks is
the approval of the Secretary of Agriculture and Commerce as required by Section 18 of the said
law. Upon close scrutiny, the factual allegations and voluminous documentary exhibits relating
to the purchase of Lot 823 by the predecessors-in-interest of the claimants revealed badges of
fraud and irregularity.

ISSUE: Who has the better right over Lot No. 823? NO ONE! It belongs to the National
Government.

HELD: From the proceedings in the CA, it was established that while records of the DENR-
LMB indicate the original claimant/applicant of Lot 823 as a certain Valentin Manahan, only the
Manotoks were able to produce a sale certificate in the name of their predecessors-in-interest,
certified by the LMB Records Management Division. In addition, the Manotoks submitted
photocopies of original documents entitled Assignment of Sale Certificate dated 1919, 1920 and
1923. Sale Certificate No. 1054 was not signed by the Director of Lands nor approved by the
Secretary of the Interior. The Certificates of Assignment of Sale contained only the signature of
the Director of Lands. The Manotoks belatedly secured from the National Archives a certified
copy of Deed of Conveyance No. 29204 dated December 7, 1932, which likewise lacks the
approval of the Secretary of Agriculture and Natural Resources as it was signed only by the
Director of Lands. Act No. 1120 SECTION 18. No lease or sale made by Chief of the Bureau of
Public Lands under the provisions of this Act shall be valid until approved by the Secretary of
the Interior. It is clear from the foregoing provision and from jurisprudence that the sale of friar
lands shall be valid only if approved by the Secretary of the Interior (later the Secretary of
Agriculture and Commerce). In their Memorandum, the Manotoks pointed out that their
photocopy of the original Deed of Conveyance No. 29204, sourced from the National Archives,
shows on the second page a poorly imprinted typewritten name over the words “Secretary of
Agriculture and Natural Resources”, which name is illegible, and above it an even more poorly
imprinted impression of what may be a stamp of the Secretary’s approval.

The Manotoks are invoking the presumption of regularity in the performance of the RD’s
task in issuing the TCT in the Manotok name. The Manotoks contend that “we can assume that
the Manotok deed of conveyance was in fact approved by the Department Secretary because the
register of deeds did issue TCT No. 22813 in the name of the buyer Severino Manotok.”
FURTHER, the Manotoks assert that even if we were to ignore the presumption of validity in the
performance of official duty, Department Memorandum Order No. 16-05 issued on October 27,
2005 by then DENR Secretary Michael T. Defensor, supplies the omission of approval by the
Secretary of Agriculture and Natural Resources in deeds of conveyances over friar lands. SC in
the MR of the Alonso case underscored that the approval is a MADATORY
requirement. Approval of the Secretary of the Interior cannot simply be presumed or inferred
from certain acts since the law is explicit in its mandate. Petitioners have not offered any cogent
reason that would justify a deviation from this rule. DENR Memorandum Order No. 16, invoked
by both the Manotoks and the Manahans, states that some Deeds of Conveyance on record in the
field offices of the LMB do not bear the Secretary’s signature despite full payment for the Friar
Land. They are deemed signed or otherwise ratified by this Memo provided that the applicant
really paid the purchase price and complied with all the requirements under the Friar Lands Act.
The CA opined that the Manotoks cannot benefit from the above department issuance because it
makes reference only to those deeds of conveyance on file with the records of the DENR field
offices. The Manotoks’ copy of the alleged Deed of Conveyance No. 29204 issued in 1932, was
sourced from the National Archives.

Manotoks also point out that the Friar Lands Act itself states that the Government ceases
reservation of its title once the buyer had fully paid the price. (They were claiming that they fully
paid!) Their basis is SECTION 15[2] of the Friar Lands Act. Court found that the old rule would
support the Manotoks contention however, the new rule Pugeda v. Trias, à “the conveyance
executed in favor of a buyer or purchaser, or the so-called certificate of sale, is a conveyance of
the ownership of the property, subject only to the resolutory condition that the sale may be
cancelled if the price agreed upon is not paid for in full. Clearly, it is the execution of the
contract to sell and delivery of the certificate of sale that vests title and ownership to the
purchaser of friar land. Such certificate of sale must, of course, be signed by the Secretary of
Agriculture and Natural Resources, as evident from Sections 11[3], 12[4] and the 2nd paragraph
of Section 15[5], in relation to Section 18.

DENR et al VS. YAP et al

G.R. No. 167707

October 8, 2008

FACTS: On November 10, 1978, then President Marcos issued Proc. No. 1801declaring Boracay
Island, among other islands, caves and peninsulas in the Philippines, as tourist zones and marine
reserves under the administration of the Philippine Tourism Authority (PTA). President Marcos
later approved the issuance of PTA Circular 3-82 dated September 3, 1982, to implement
Proclamation No. 1801. Claiming that Proclamation No. 1801 and PTA Circular No 3-82
precluded them from filing an application for judicial confirmation of imperfect title or survey of
land for titling purposes, respondents claimants Mayor . Yap, Jr., and others filed a petition for
declaratory relief with the RTC in Kalibo, Aklan. In their petition, respondents-claimants alleged
that Proc. No. 1801 and PTA Circular No. 3-82 raised doubts on their right to secure titles over
their occupied lands. They declared that they themselves, or through their predecessors-in-
interest, had been in open, continuous, exclusive, and notorious possession and occupation in
Boracay since June 12, 1945, or earlier since time immemorial. They declared their lands for tax
purposes and paid realty taxes on them. Respondents-claimants posited that Proclamation No.
1801 and its implementing Circular did not place Boracay beyond the commerce of man. Since
the Island was classified as a tourist zone, it was susceptible of private ownership. Under
Section 48(b) of the Public Land Act, they had the right to have the lots registered in their names
through judicial confirmation of imperfect titles.

The Republic, through the OSG, opposed the petition for declaratory relief. The OSG
countered that Boracay Island was an unclassified land of the public domain. It formed part of
the mass of lands classified as “public forest,” which was not available for disposition pursuant
to Section 3(a) of the Revised Forestry Code, as amended. The OSG maintained that
respondents-claimants’ reliance on PD No. 1801 and PTA Circular No. 3-82 was
misplaced. Their right to judicial confirmation of title was governed by Public Land Act and
Revised Forestry Code, as amended. Since Boracay Island had not been classified as alienable
and disposable, whatever possession they had cannot ripen into ownership. On July 14, 1999, the
RTC rendered a decision in favor of respondents-claimants, declaring that, “PD 1810 and PTA
Circular No. 3-82 Revised Forestry Code, as amended. The OSG moved for reconsideration but
its motion was denied. The Republic then appealed to the CA. On In 2004, the appellate court
affirmed in toto the RTC decision. Again, the OSG sought reconsideration but it was similarly
denied. Hence, the present petition under Rule 45. On May 22, 2006, during the pendency the
petition in the trial court, President Gloria Macapagal-Arroyo issued Proclamation No.
1064 classifying Boracay Island partly reserved forest land (protection purposes) and partly
agricultural land (alienable and disposable). On August 10, 2006, petitioners-claimants
Sacay,and other landowners in Boracay filed with this Court an original petition for prohibition,
mandamus, and nullification of Proclamation No. 1064. They allege that the Proclamation
infringed on their “prior vested rights” over portions of Boracay. They have been in continued
possession of their respective lots in Boracay since time immemorial. On November 21, 2006,
this Court ordered the consolidation of the two petitions
ISSUE: the main issue is whether private claimants have a right to secure titles over their
occupied portions in Boracay.

HELD:

Petitions DENIED. The CA decision is reversed.

Except for lands already covered by existing titles, Boracay was an unclassified land of the
public domain prior to Proclamation No. 1064. Such unclassified lands are considered public
forest under PD No. 705. PD No. 705 issued by President Marcos categorized all unclassified
lands of the public domain as public forest. Section 3(a) of PD No. 705 defines a public forest
as “a mass of lands of the public domain which has not been the subject of the present system of
classification for the determination of which lands are needed for forest purpose and which are
not.” Applying PD No. 705, all unclassified lands, including those in Boracay Island, are ipso
facto considered public forests. PD No. 705, however, respects titles already existing prior to its
effectivity. The 1935 Constitution classified lands of the public domain into agricultural, forest
or timber, such classification modified by the 1973 Constitution. The 1987 Constitution reverted
to the 1935 Constitution classification with one addition: national parks. Of
these, only agricultural lands may be alienated. Prior to Proclamation No. 1064 of May 22, 2006,
Boracay Island had never been expressly and administratively classified under any of these grand
divisions. Boracay was an unclassified land of the public domain.

A positive act declaring land as alienable and disposable is required. In keeping with
the presumption of State ownership, the Court has time and again emphasized that there must be
a positive act of the government, such as a presidential proclamation or an executive order; an
administrative action; investigation reports of Bureau of Lands investigators; and a legislative act
or a statute. The applicant may also secure a certification from the government that the land
claimed to have been possessed for the required number of years is alienable and disposable. The
burden of proof in overcoming suchpresumption is on the person applying for registration (or
claiming ownership), who must prove that the land subject of the application is alienable or
disposable. In the case at bar, no such proclamation, executive order, administrative action,
report, statute, or certification was presented to the Court. The records are bereft
of evidence showing that, prior to 2006, the portions of Boracay occupied by private claimants
were subject of a government proclamation that the land is alienable and disposable. Matters of
land classification or reclassification cannot be assumed. They call for proof. Proc. No. 1801
cannot be deemed the positive act needed to classify Boracay Island as alienable and disposable
land. If President Marcos intended to classify the island as alienable and disposable or forest, or
both, he would have identified the specific limits of each, as President Arroyo did in
Proclamation No. 1064. This was not done in Proclamation No. 1801.
Cruz vs Secretary of DENR

GR. No. 135385, Dec. 6, 2000

FACTS:

Petitioners Isagani Cruz and Cesar Europa filed a suit for prohibition and mandamus as
citizens and taxpayers, assailing the constitutionality of certain provisions of Republic Act No.
8371, otherwise known as the Indigenous People’s Rights Act of 1997 (IPRA) and its
implementing rules and regulations (IRR). The petitioners assail certain provisions of the IPRA
and its IRR on the ground that these amount to an unlawful deprivation of the State’s ownership
over lands of the public domain as well as minerals and other natural resources therein, in
violation of the regalian doctrine embodied in section 2, Article XII of the Constitution.

ISSUE:

Do the provisions of IPRA contravene the Constitution?

HELD:

No, the provisions of IPRA do not contravene the Constitution. Examining the IPRA,
there is nothing in the law that grants to the ICCs/IPs ownership over the natural resources within
their ancestral domain. Ownership over the natural resources in the ancestral domains remains
with the State and the rights granted by the IPRA to the ICCs/IPs over the natural resources in
their ancestral domains merely gives them, as owners and occupants of the land on which the
resources are found, the right to the small scale utilization of these resources, and at the same
time, a priority in their large scale development and exploitation. Additionally, ancestral lands
and ancestral domains are not part of the lands of the public domain. They are private lands and
belong to the ICCs/IPs by native title, which is a concept of private land title that existed
irrespective of any royal grant from the State. However, the right of ownership and possession by
the ICCs/IPs of their ancestral domains is a limited form of ownership and does not include the
right to alienate the same.

CHAVEZ V. PUBLIC ESTATES AUTHORITY

384 SCRA 152

FACTS:
President Marcos through a presidential decree created PEA, which was
tasked with the development, improvement, and acquisition, lease, and sale of all kinds of
lands. The then president also transferred to PEA the foreshore and offshore lands of Manila
Bay under the Manila-Cavite Coastal Road and Reclamation
Project. Thereafter, PEA was granted patent to the reclaimed areas of land and then,
years later, PEA entered into a JVA with AMARI for the development
of the Freedom Islands. These two entered into a joint venture in the absence of any
public bidding. Later, a privilege speech was given by Senator President Maceda
denouncing the JVA as the grandmother of all scams. An investigation was conducted and it
was concluded that the lands that PEA was conveying
toAMARI were lands of the public domain; the certificates of title over the
Freedom Islands were void; and the JVA itself was illegal. This prompted Ramos to form an
investigatory committee on the legality of the JVA.

Petitioner now comes and contends that the government stands to lose
billions by the conveyance or sale of the reclaimed areas to AMARI. He also asked for
the full disclosure of the renegotiations happening between the parties.

ISSUE:

W/N stipulations in the amended JVA for the transfer to AMARI of the lands, reclaimed
or to be reclaimed, violate the Constitution.

HELD:

The ownership of lands reclaimed from foreshore and submerged areas is rooted in the Regalian
doctrine, which holds that the State owns all lands and waters of the public domain.

The 1987 Constitution recognizes the Regalian doctrine. It declares that all
natural resources are owned by the State and except for alienable
agricultural lands of the public domain, natural resources cannot be alienated.

The Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of the 750
hectare reclamation project have been reclaimed, and the rest of the area are still submerged
areas forming part of Manila
Bay. Further, it is provided that AMARI will reimburse the actual costs in reclaiming the
areas of land and it will shoulder the other reclamation costs to be incurred.
The foreshore and submerged areas of Manila Bay are part of the lands of
the public domain, waters and other natural resources and consequently owned by the
State. As such, foreshore and submerged areas shall not be
alienable unless they are classified as agricultural lands of the public domain. The mere
reclamation of these areas by the PEA doesn’t convert
these inalienable natural resources of the State into alienable and disposable lands of the
public domain. There must be a law or presidential
proclamation officially classifying these reclaimed lands as alienable and
disposable if the law has reserved them for some public or quasi-public use.

Chavez vs. NHA

G.R. No 164527. August 15, 2007.

Velasco, Jr., J.

Doctrine: There must be a law or presidential proclamation officially classifying these reclaimed
lands as alienable or disposable and open to disposition or concession.

FACTS:

Petitioner Francisco Chavez in his capacity as taxpayer seeks to declare null and void the Joint
Venture Agreement (JVA) between the NHA and R-II Builder’s Inc (RBI) for being
unconstitutional and invalid, and to enjoin respondents — particularly respondent NHA– from
implementing and/or enforcing the said project and other agreements related thereto. On March
1, 1988, then President Corazon C. Aquino issued Memorandum Order No. 161 (MO 161)
approving and directing the implementation of the Comprehensive and Integrated Metropolitan
Manila Waste Management Plan. Specifically, respondent NHA was ordered to “conduct
feasibility studies and develop low-cost housing projects at the dumpsite and absorb scavengers
in NHA resettlement/low-cost housing projects.” Pursuant to MO 161-A, NHA prepared the
feasibility studies which resulted in the formulation of the Smokey Mountain Development Plan
and Reclamation of the Area Across R-10 or the Smokey Mountain Development and
Reclamation Project (SMDRP). SMDRP aimed to convert the Smokey Mountain dumpsite into a
habitable housing project, inclusive of the reclamation of the area across R-10, adjacent to the
Smokey Mountain as the enabling component of the project. Once finalized, the Plan was
submitted to President Aquino for her approval. On January 17, 1992, President Aquino
proclaimed MO 415, approving and directing the implementation of the SMDRP through a
private sector joint venture. Said MO stipulated that the land area covered by the Smokey
Mountain dumpsite is conveyed to the NHA as well as the area to be reclaimed across R-10. In
the same MO 415, President Aquino created an Executive Committee (EXECOM) to oversee the
implementation of the Plan and an inter-agency technical committee (TECHCOM) was created
composed of the technical representatives of the EXECOM. Based on the evaluation of the pre-
qualification documents, the EXECOM declared the New San Jose Builders, Inc. and RBI as top
two contractors. Thereafter, TECHCOM submitted its recommendation to the EXECOM to
approve the RBI proposal which garnered the highest score. On October 7, 1992, President
Ramos authorized NHA to enter into a JVA with RBI. Afterwards, President Ramos issued
Proclamation No. 465 increasing the proposed area for reclamation across R-10 from 40 hectares
to 79 hectares. On September 1, 1994, pursuant to Proclamation No. 39, the DENR issued
Special Patent No. 3591 conveying in favor of NHA an area of 211,975 square meters covering
the Smokey Mountain Dumpsite. The land reclamation was completed in August 1996.
Sometime later in 1996, pursuant likewise to Proclamation No. 39, the DENR issued Special
Patent No. 3598 conveying in favor of NHA an additional 390,000 square meter area. After some
time, the JVA was terminated. RBI demanded the payment of just compensation for all
accomplishments and costs incurred in developing the SMDRP plus a reasonable rate of return.
In a Memorandum of Agreement (MOA) executed by NHA and RBI, both parties agreed to
terminate the JVA and other subsequent agreements, which stipulated, among others, that unpaid
balance may be paid in cash, bonds or through the conveyance of properties or any combination
thereof.

Issues:

1. Whether RBI can acquire reclaimed foreshore and submerged land areas because they are
allegedly inalienable lands of the public domain
2. Whether RBI can acquire reclaimed lands when there was no declaration that said lands are no
longer needed for public use.
3. Whether RBI, being a private corporation, is barred from the Constitution to acquire lands of
the public domain.

Held:
1. Yes. The reclaimed lands across R-10 were classified alienable and disposable lands of public
domain of the State. First, there were three presidential proclamations classifying the reclaimed
lands across R-10 as alienable or disposable hence open to disposition or concession. These were
MO 415 issued by President Aquino, Proclamation No. 39 and Proclamation No. 465 both issued
by President Ramos. Secondly, Special Patents Nos. 3591, 3592, and 3598 issued by the DENR
classified the reclaimed areas as alienable and disposable. Admittedly, it cannot be said that MO
415, Proclamations Nos. 39 and 465 are explicit declarations that the lands to be reclaimed are
classified as alienable and disposable. We find however that such conclusion is derived and
implicit from the authority given to the NHA to transfer the reclaimed lands to qualified
beneficiaries. In line with the ruling in Chavez v. PEA, the court held that MO 415 and
Proclamations Nos. 39 and 465 cumulatively and jointly taken together with Special Patent Nos.
3591, 3592, and 3598 more than satisfy the requirement in PEA that “[t]here must be a law or
presidential proclamation officially classifying these reclaimed lands as alienable or disposable
and open to disposition or concession.”

2. Yes. Even if it is conceded that there was no explicit declaration that the lands are no longer
needed for public use or public service, there was however an implicit executive declaration that
the reclaimed areas R-10 are not necessary anymore for public use or public service. President
Aquino through MO 415 conveyed the same to the NHA partly for housing project and related
commercial/industrial development intended for disposition to and enjoyment of certain
beneficiaries and not the public in general and partly as enabling component to finance the
project. Also, President Ramos, in issuing Proclamation No. 39, declared, though indirectly, that
the reclaimed lands of the Smokey Mountain project are no longer required for public use or
service. In addition, President Ramos issued Proclamation No. 465 increasing the area to be
reclaimed from forty (40) hectares to seventy-nine (79) hectares, elucidating that said lands are
undoubtedly set aside for the beneficiaries of SMDRP and not the public. MO 415 and
Proclamations Nos. 39 and 465 are declarations that proclaimed the non-use of the reclaimed
areas for public use or service as the SMDRP cannot be successfully implemented without the
withdrawal of said lands from public use or service.

3. Yes. When Proclamations Nos. 39 and 465 were issued, inalienable lands covered by said
proclamations were converted to alienable and disposable lands of public domain. When the
titles to the reclaimed lands were transferred to the NHA, said alienable and disposable lands of
public domain were automatically classified as lands of the private domain or patrimonial
properties of the State because the NHA is an agency NOT tasked to dispose of alienable or
disposable lands of public domain. The only way it can transfer the reclaimed land in
conjunction with its projects and to attain its goals is when it is automatically converted to
patrimonial properties of the State. Being patrimonial or private properties of the State, then it
has the power to sell the same to any qualified person—under the Constitution, Filipino citizens
as private corporations, 60% of which is owned by Filipino citizens like RBI.
SPOUSES MARIANO CASTILLO AND PILAR CASTILLO in their own behalf and in
representation of HEIRS OF EDUARDO CASTILLO, petitioners,
vs.
HEIRS OF VICENTE MADRIGAL AND/OR SUSANA REALTY, INC. AND THE
REGISTER OF DEEDS OF THE CITY OF MANILA, respondents.

D. T. Reyes & Associates and Bernardo D. Calderon for petitioners.

Ramon A. Barcelona for private respondents.

MEDIALDEA, J.:

This is a petition for review on certiorari seeking reversal of the decision of the Court of Appeals
dated August 5, 1982 in CA-G.R. No. 66849-R entitled "Spouses Mariano Castillo, et al.,
Plaintiffs-Appellants v. Heirs of Vicente Madrigal, et al., Defendants-Appellees."

The antecedent facts are as follows:

On December 17, 1979, petitioners spouses Mariano Castillo and Pilar Castillo, in their own
behalf and in representation of the heirs of Eduardo Castillo, filed a verified complaint before the
Court of First Instance (now Regional Trial Court) of Manila for annulment of contract and
transfer certificate of title and/or reconveyance with damages against private respondents heirs of
Vicente Madrigal and/or Susana Realty, Inc. and public respondent Register of Deeds of the City
of Manila. The complaint contained the following pertinent allegations (pp. 105-108,Rollo):

xxx xxx xxx

4. That plaintiff spouses and their brother, Eduardo Castillo (herein represented by his legal heirs
Paula Castillo and Antonio Castillo), are registered co-owners of a parcel of land situated in
Ermita, Manila, which property is more particularly described and bounded as follows:
Lot 20 of Block 362 of the Cadastral Survey of the City of Manila Cadastral Case No. 53
G.L.R.C. Cadastral Record No. 515 with a chalet of strong materials existing thereon, situated on
the NE line of Calle M.H. del Pilar, District of Ermita. Bounded on the NE by Lots Nos. 18 and
8 of Block No. 12; on the SE by Lots Nos. 3, 4 and 7 of Block No. 362; on the SW by Lots Nos.
7 and 19 of Block 362 and Calle M.H. del Pilar; and on the NW by Lots Nos. 19, 17 and 12 of
Block No. 362 containing an area of SEVEN HUNDRED AND TWENTY EIGHT (728)
SQUARE METERS, more or less, Date of Survey, December 18, 1925 (Full technical
description appear on tct no. 29454)

That the plaintiffs' ownership over the property above-described is evidenced by Transfer
Certificate of Title No. 623597 issued in their name and that of their brother Eduardo Castillo on
August 11, 1941, . . .;

5. That the immediate origin of the above property is Transfer Certificate of Title No. 28454 in
the name of Petronila Vda. de Castillo, plaintiffs' mother, and from whom they acquired the
realty by way of inheritance in equal share with Eduardo Castillo entered in the Registration
Book in 1927 yet, . . .

6. That plaintiffs' mother aforesaid as predessor-in-interest (sic) declared the property for
taxation purposes for the year 1940 under Tax Dec. No. 531 and paid taxes thereon in 1941
under official receipt No. 571689, . . .

7. That after the transfer of the property in their own name and their brother aforesaid, the
property was mortgaged by plaintiffs in favor of the Agricultural and Industrial Bank and due to
the existing war conditions at the time, the possession, management and supervision of the land
was entrusted to Eduardo Castillo reposing in him the (sic) full trust and confidence;

8. That beginning the year 1941 up to the year 1977, plaintiff spouses left Manila and engaged in
several business ventures in the provinces and stayed for so long a time in Cagayan Valley in
northern Luzon and often times (sic) traveled to far-away places thereby allowing his (sic)
brother Eduardo Castillo herein to manage the same and collect the rentals due upon the
understanding that once accumulated said amount be utilized to redeem the mortgaged property
from the Bank which their brother did;

9. That during and after the effectivity of the mortgage with the aforesaid Bank, plaintiffs herein
never gave their brother Eduardo Castillo authority to sell their undivided property neither were
there transactions entered into by plaintiffs with any person or persons, natural or juridical with
respect to their undivided halfportion;

10. That after plaintiffs have returned from the provinces and upon arrival from abroad later in
1977, they decided to get their share from their brother Eduardo Castillo as he was entrusted but
the latter being sickly then could not give the explanation and after conference with his wife,
Paula Castillo, the latter told the plaintiffs that she and her husband Castillo (Eduardo) did not
know the mysterious transactions that transpired in the transfer or registration of the above
property to Vicente Madrigal (under Transfer Certificate of Title No. 72066) and upon
verification thereof, an alleged deed of sale executed by plaintiffs and Eduardo Castillo appears
on the back of the title but in truth and in fact, plaintiffs had never signed any document in favor
of Vicente Madrigal contrary to what appears thereon; . . . and subsequently transferred by
Vicente Madrigal to Susana Realty Inc., under TCT No. 36280, . . .;

11. That plaintiffs exerted serious efforts in recovering his property (Mariano Castillo) in his
capacity as a registered co-owner peacefully but of (sic) no avail for the defendant Susana Realty
Inc. refused to heed to the inquiry and hence this present action;

12. That the transfer of the property under litigation in favor of the late Vicente Madrigal was
done thru fraud, simulation, illegality and serious irregularity equivalent to nullity and
inexistence of contract and follows that the Transfer Certificate of Title No. 36280 under the
name of defendant Susana Realty Inc. is null and void and without any effect whatsoever either
under the Civil Code or under the Land Registration Act especially so that the transactions
entered on the title took place during war time and without supporting papers or documents
available up to the present time;

xxx xxx xxx

14. That under the aforesaid facts and circumstances, the remedy of reconveyance is feasible
considering that the falidity (sic) of the title from plaintiffs' mother to them is not affected and
without flaw;

xxx xxx xxx

16. That the plaintiffs herein suffered damages for the reason that they were deprived of the
possession, ownership and fruits or income of the property in question and to which they demand
from the herein defendant heirs of Vicente Madrigal and/or Susana Realty Inc. in such amount as
may be proved during the trial. (Emphasis supplied)

On February 4, 1980, private respondents filed a motion to dismiss on the ground that: (a) the
complaint states no cause of action; and (b) the cause of action is barred by the statute of
limitations.

On March 25, 1980, the trial court dismissed the complaint (pp. 120-126, Rollo). On appeal to
the Court of Appeals, the decision was affirmed in toto on August 5, 1982 (pp. 44-52, Rollo).
Hence, the present petition.

The issues raised by petitioners may be grouped into: whether or not (1) petitioners' action for
annulment of contract and transfer certificate of title and/or reconveyance with damages is
subject to prescription; and (2) the complaint states a cause of action against private respondents.
Petitioners allege that a reading of paragraphs 9 and 10 of their complaint reveals that they
impugn the existence and validity of the alleged deed of sale. As contained therein, petitioners
never entered into any transaction with any person conveying the subject property. They did not
sign any document in favor of any one neither did they give any one authorization for that
purpose. Therefore, consent and cause did not exist in the execution of the deed of sale, invoking
Articles 13181, 13522 and 1409 (3),3 of the Civil Code. And, pursuant to Article 1410 of the
Civil Code, an action for the declaration of the inexistence of a contract does not prescribe.

In dismissing petitioners' complaint on the ground of prescription, the trial court opined (p.
123, Rollo):

. . ., any action for annulment of the deed and TCT 72066 should have been instituted within ten
(10) years from the accrual of the cause of action, that, (sic) is, ten years from 1943 when the
deed was executed at the earliest, or ten years from 1944 at the latest. This action was filed on
December 17, 1979, or after more than 30 years from 1943 and 1944. The action, therefore, has
long prescribed. . . .

The Court of Appeals expressed the same opinion (p. 51, Rollo):

. . . , even as We consider that there was fraud in the registration and the issuance of title in favor
of defendant Madrigal creating thereby a constructive trust in favor of the plaintiffs, the remedy
of the plaintiffs is an action for reconveyance within ten (10) years from the registration of the
property in the name of defendant Madrigal (Alzona v. Capunitan, 4 SCRA 450; Gonzales v.
Jimenez 13 SCRA, 80), Again, the filing of the complaint was way beyond the ten-year period of
limitation.

Both courts ruled incorrectly. It is evident in paragraphs 9, 10 and 12 of the complaint, supra,
that petitioners sought the declaration of the inexistence of the deed of sale because of the
absence of their consent. Thus, following the provision of Article 1410 of the Civil Code, this
kind of action is imprescriptible. The action for reconveyance is likewise imprescriptible because
its basis is the alleged void contract of sale. This pronouncement is certainly far from novel. We
have encountered similar situations in the past which We resolved in the same manner. One of
these is the case of Baranda, et al., v. Baranda, et al., G.R. No. 73275, May 20, 1987, 150 SCRA
59, 73:

. . . In the instant case, however, we are dealing not with a voidable contract tainted with fraud,
mistake, undue influence, violence or intimidation that can justify its nullification, but with a
contract that is null and void ab initio.

Paulina Baranda declared under oath in her complaint that she signed the deeds of sale without
knowing what they were, which means that her consent was not merely marred by the above-
stated vices, so as to make the contracts voidable, but that she had not given her consent at all. . .
. Lack of consent . . . made the deeds of sale void altogether [Salonga vs. Females, 105 SCRA
359] and rendered them subject to attack at any time, conformably to the rule in Article 1410 that
an action to declare the inexistence of void contracts 'does not prescribe.

. . . We have consistently ruled that when there is a showing of such illegality, the property
registered is deemed to be simply held in trust for the real owner by the person in whose name it
is registered, and the former then has the right to sue for the reconveyance of the property. The
action for the purpose is also imprescriptible.

However, there should be no debate that the action for damages against private respondents has
already prescribed.1avvphi1 In accordance with Article 1144 of the Civil Code4 it should have
been brought within ten (10) years from the date of the sale to Vicente Madrigal and the issuance
of Transfer Certificate of Title No. 72066 in his name on July 12, 1943, if against the heirs of
Vicente Madrigal; or within ten (10) years from the date of the issuance of Transfer Certificate of
Title No. 36280 in the name of Susana Realty, Inc. on May 12, 1954, if against the firm.

Notwithstanding the discussion on the imprescriptibility of petitioners' action for annulment of

contract and transfer certificate of title and/or reconveyance, the dismissal of their complaint by
the trial court and the Court of Appeals on the ground of failure to state a cause of action was
correct. It was also Our ruling in the Baranda case, supra, (and in other previous cases) that only
as long as the property is still in the name of the person who caused the wrongful registration and
has not passed to an innocent third person for value will an action lie to compel that person to
reconvey the property to the real owner. In this regard, We are in conformity with the Court of
Appeals that (p. 52, Rollo):

. . . the property subject of the alleged fraudulent registration had already been conveyed to an
innocent party for value which is defendant Susana Realty, Inc. The claim of plaintiffs that said
defendant is not an innocent purchaser for value is not borne by the allegations of the complaint.
...

Where the complaint for recovery of ownership and possession of a parcel of land alleges that
some of the defendants bought said land from their co-defendants who had a defective title
thereto but does not allege that the purchasers were purchasers in bad faith or with notice of the
defect in the title of their vendors, there is a failure to state a cause of action (Galvez, et al. v.
Tuazon y de la Paz, et al., 119 Phil. 612). By reason of this failure, private respondent Susana
Realty, Inc. is presumed to be an innocent purchaser for value and in good faith, entitled to
protection under the law (see Tiburcio, et al. v. People's Homesite and Housing Corporation, et
al., 106 Phil. 477).

ACCORDINGLY, the petition is hereby DENIED.1âwphi1 The decision of the Court of Appeals
dated August 5, 1982 is AFFIRMED, subject to the modification regarding the issue on
prescription.

SO ORDERED.
ARSENIO DELOS REYES, FELICIDAD DELOS REYES, BENJAMIN DELOS REYES,
SALVADOR DELOS REYES, SOLEDAD DELOS REYES and PEDRO PARINAO,
TRINIDAD DELOS REYES and PEDRO GENERAL, CARLOS DE-LOS REYES, JR.,
ROBERTO DELOS REYES, RODOLFO DELOS REYES, RICARDO DELOS REYES,
ZENAIDA DELOS REYES, VERONICA DELOS REYES, MERCEDES DELOS REYES,
FELIPE CANTILLON, GREGORIA CANTILLON, LUCENA CANTILLON, VIRGILIO
CANTILLON and MERCEDES CANTILLON, petitioners, vs. COURT OF APPEALS,
ZENAIDA CAIA and RODOLFO CAIA,respondents.

DECISION

BELLOSILLO, J.:

Can an action for reconveyance of real property covered by the Torrens system filed after more
than thirty (30) years prosper against the holder for value?

On 28 July 1987 the Regional Trial Court of Valenzuela, Metro Manila, dismissed Civil Case
No. 717-V-78 for recovery of possession of real property with damages filed by Arsenio delos
Reyes, Felicidad, Benjamin, Salvador, Soledad (with spouse Pedro Parinao), Trinidad (with
spouse Pedro General), Carlos Jr., Roberto, Rodolfo, Ricardo, Zenaida, Veronica and Mercedes,
all surnamed Delos Reyes, and Felipe, Gregoria, Lucena, Virgilio and Mercedes, all surnamed
Cantillon, against the spouses Rodolfo Caia and Zenaida Caia.[1]

On 23 January l995 the Court of Appeals affirmed the order of dismissal of the lower court.[2]

Pursuing their recourse with us, petitioners seek the nullification of the decision of respondent
Court of Appeals which affirmed the order of the trial court dismissing the complaint of
petitioners herein by imputing to the Court of Appeals the following errors: (1) in reckoning the
30-year prescriptive period of real actions as provided under Art. 1141 of the Civil Code from
the date of issuance of the questioned TCT or annotation of the transaction in 1943 and not from
17 September 1962 when petitioners' mother, original owner of subject property, died or 17 July
1963 when TCT No. 42753 was issued to Rodolfo Caia and Zenaida Caia and consequently
holding petitioners guilty of laches; and, (2) in not applying Arts. 1409, 1410, and 1422 of the
Civil Code.[3]

Subject of the controversy is a parcel of land measuring 13,405 square meters originally owned
by the spouses Genaro and Evarista delos Reyes. On 7 July 1942 Evarista delos Reyes sold to
spouses Catalina Mercado and Eulalio Pena 10,000 square meters of the property described as
Lot No. 1210 of the subdivision plan of the Malinta Friar Lands Estate situated at Torres
Bugallon, Valenzuela, Metro Manila. On 4 June 1943 the vendees were able to secure Transfer
Certificate of Title No. 26184 covering not only the 10,000 square meters of land bought by
them but also the remaining 3,405 square meters left unsold. In turn, the Pena spouses sold the
whole property to Isaias de Guzman and Emiliana de Onon who later conveyed the same whole
area to Elpidio Concepcion, Liwayway Serrano, Norberto Concepcion and Marta de
Guzman. Eventually, the land was acquired by private respondents herein, Rodolfo Caia and
Zenaida Caia, on 9 July 1963 through a "Deed of Exchange." Eight (8) days later, or on l7 July
l963, Transfer Certificate of Title No. 42753 was issued in the name of the Caia spouses who
since then exercised full ownership and possession over the property.

On 3 October l978 petitioners, all heirs of Evarista delos Reyes, filed an action against
respondents for reconveyance of 3,405 square meters of the property covered by TCT No. 42753
claiming that this portion was invalidly included by the Pena spouses in the titling of their 10,000
square meters they had bought from Evarista delos Reyes. However, the case was dismissed by
the trial court on the ground of laches.As already adverted to, the order of dismissal was affirmed
by the Court of Appeals.

We likewise dismiss the petition. Petitioners argue that their cause of action still subsists because
it accrued either on 17 September 1962 when Evarista delos Reyes died, or on 17 July l963 when
TCT No. 42753 was issued to Rodolfo Caia and his sister Zenaida Caia. This is incorrect. A
cause of action being an act or omission of one party in violation of the right of another arises at
the moment such right is violated. In the instant case, petitioners' cause of action accrued on 4
June l943 when the Pena spouses caused the registration in their name of the entire l3,405 square
meters instead of only 10,000 square meters they actually bought from Evarista delos Reyes. For
it was on this date that the right of ownership of Evarista over the remaining 3,405 square meters
was transgressed and from that very moment sprung the right of the owner, and hence all her
successors in interest, to file a suit for reconveyance of the property wrongfully taken from them.

But, such right is not imprescriptible. Generally, the law draws a time corridor within which to
propel a suit for recovery of property. Section 44, par. (b), of RA No. 296 otherwise known as
the Judiciary Act of 1948 provides that reinvindicatory actions may be brought by the owner
within thirty (30) years after he has been deprived of his property. Under Art. 1141 of the Civil
Code, real actions over immovables prescribe after thirty (30) years. Thus, even if we apply the
30-year prescriptive period in accordance with the above legal provisions, petitioners' right to
recover has already been effectively foreclosed by the lapse of time having been initiated only
after thirty-six (36) years from the accrual of their cause of action.

Be that as it may, we hold that even these laws may not apply to the case before us in the light of
PD No. 1529, the Property Registration Decree amending and codifying the laws relative to
registration of property and updating Act No. 496, the Land Registration Act.

When respondents Rodolfo Caia and Zenaida Caia as fourth transferees in ownership dealt with
the land in question, they were not required to go beyond what appeared in the transfer certificate
of title in the name of their transferor. For all intents and purposes, they were innocent
purchasers for value having acquired the property in due course and in good faith under a clean
title, i.e., there were no annotations of encumbrances or notices of lis pendens at the back
thereof. They had no reason to doubt the validity of the title to the property. Therefore it would
be the height of injustice, if not inequity, if a valid transaction transferring the subject property to
them be set aside just to accommodate parties who heedlessly slept on their rights for more than
a third of a century. This is not conducive but anathema to good order.

Finally, petitioners' reliance on Arts. 1409, 1410 and 1422 of the Civil Code on the
imprescriptibility of void and inexistent contracts is misplaced. While the action to declare a
contract null and void does not prescribe, this principle is alien and malapropos to the matter
before us.Moreover, the action for reconveyance has now become stale, being barred as it were,
by laches. It cannot be disputed that for thirty-six (36) years petitioners and their predecessors in
interest, Evarista delos Reyes most especially, never raised a restraining arm to the inclusion of
the remaining 3,405 square meters of the land in the titling of the 10,000 square meters bought
by the Pena spouses. The property passed through four (4) owners successively in a span of more
than twenty (20) years before it went into the hands of private respondents. Surely, the rights of
innocent purchasers of real property such as the Caias cannot be swamped and drowned by the
remonstrations of the inert and petulant who took no care in seasonably asserting their rights of
ownership over the land allegedly wrested from them through fraudulent means. In Avecilla v.
Yatco[4] we ruled that the only remedy of an owner who was fraudulently deprived of his land,
which was subsequently sold to an innocent purchaser for value, is to file an action for damages
against the person who perpetrated the fraud within four (4) years after the discovery of the
deception. Unfortunately in this case we may never know why Evarista delos Reyes chose not to
go after the Pena spouses to recover what could be rightfully hers, the reason having apparently
been long interred with her.

WHEREFORE, finding no reversible error in the decision of the Court of Appeals sustaining the
Regional Trial Court of Valenzuela, Metro Manila, which ordered the dismissal of the complaint
of herein petitioners, the instant petition is DENIED. Costs against petitioners.

SO ORDERED.