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FIRST DIVISION

NOTICE

Sirs/Mesdames:
Please take notice that the Court, First Division, issued a
Resolution dated March 24, 2021 which reads as follows:

"G.R. No. 213042 - VIRGINIA DELA CRUZ, joined by

her husband PRUDENCIO FERIDO, petitioners, versus SPS.
PAULINO and DELIA FRONDARINA, respondents.

After a careful review of the records of the instant case, the

Court resolves to AFFIRM with MODIFICATION the Decision1
dated November 18, 2013 (assailed Decision) of the Court of Appeals
(CA), in CA-G.R. CV No. 97039, and DENY the present petition2 for
its failure to sufficiently show that the CA committed any reversible
error in upholding the lower courts' finding of civil liability against
herein petitioners.

As correctly found by the CA, respondents' counterclaim is a

permissible direct attack to assail the validity of the certificate of title
under petitioners' name. To recall, a collateral attack is made when, in
another action to obtain a different relief, the certificate of title is
assailed as an incident in said action. Petitioners here raised the
issue of invalidity of the certificates of title as a defense in a
counterclaim for reconveyance.

It is true that in land cases, the certificate of title serves as a

piece of evidence on the indefeasibility of title of the property in
favor of the person whose name appears therein. It serves as notice to
the whole world and as such all persons are bound by it and no one
can plead ignorance of the registration. 3
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1 Rollo, pp. 19-28. Penned by Associate Justice Ramon M. Bato, Jr. and concurred in by
Associate Justices Andres B. Reyes, Jr. (a Member of this Court) and Rodi( V. Zalameda
(now Member of this Court).
2 Id. at 9-15.
Vda. de Villanueva v. Court of Appeals, G.R. No. 117971, February I, 2001 , 351 SCRA 12,
23.
RESOLUTION 2 G.R. No. 213042
March 24, 2021

However, it has also been settled that in some instances, the

Court did away with the irrevocability of the Torrens title. In Bornales
v. Intermediate Appellate Court,4 the defense of indefeasibility of a
certificate of title was disregarded when the transferee who took it had
notice of the flaws in the transferor's title. 5 In the case of Claude! v.
Court of Appeals,6 the Court held that the Torrens System of land
registration, though indefeasible, should not be used as a means to
perpetrate fraud, and that in the registration of a property, good faith
must concur with registration, otherwise the same became an exercise
in futility. 7

Still, in Republic v. Heirs of Alejaga Sr., 8 the Court also held

that the indefeasibility of a certificate of title may not be invoked
when said title was obtained by means of fraud, and the
same indefeasibility of title does not apply to a patent grant tainted
with fraud and secured through misrepresentation. 9 Finally, in Amero!
v. Bagumbaran, 10 in the event of a void certificate of title or one
wrongfully registered in another person's name, an implied trust is
deemed, and the trustee is compelled by law to reconvey the property
fraudulently acquired notwithstanding the irrevocability of the
Torrens title. 11

Considering that the counterclaim for reconveyance as prayed

for by herein respondents is a valid direct attack, the primary issue
now is whether or not the same is a successful scheme assailing of
petitioners' title over the subject property in this case.

The central legal provision around which the issue at bar turns
is Section 1 of Republic Act No. (R.A.) 730, 12 which provides:

SECTION 1. Notwithstanding the provisions of sections sixty-one

and sixty-seven of Commonwealth Act Numbered One hundred
forty-one, as amended by Republic Act Numbered Two hundred
ninety-three, any Filipino citizen of legal age who is not the
owner of a home lot in the municipality or city in which he
resides and who has in good faith established his residence on a

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4
G.R. No. 75336, October 18, 1988, 166 SCRA 519.
Id. at 525.
6 G.R. No. 85240, July 12, 1991, 199 SCRA 113.
7
Id. at 123.
8 G.R. No. 146030, December 3, 2002, 393 SCRA 361.
9 Id. at 373. See Heirs of Carlos Alcaraz v. Republic, G.R. No. 131667, July 28, 2005, 464
SCRA 280, 291.
10 G.R. No. L-33261, September 30, 1987, 154 SCRA 396.
11 Id. at 403-404.
12 Entitled, "AN ACT TO PERMIT THE SALE WITHOUT PUBLIC AUCTION OF PUBLIC LANDS OF THE
REPUBLIC OF THE PHILIPPINES FOR RESIDENTIAL PURPOSES TO QUALIFIED APPLICANTS UNDER
CERTAIN CONDITIONS," June 19, 1952.
RESOLUTION 3 G.R. No. 213042
March 24, 2021

parcel of the public land of the Republic of the Philippines which

is not needed for the public service, shall be given preference to
purchase at a private sale of which reasonable notice shall be given
to him not more than one thousand square meters at a price to be
fixed by the Director of Lands with the approval of the Secretary
of Agriculture and Natural Resources. It shall be an essential
condition of this sale that the occupants has constructed his
house on the land and actually resided therein. Ten per cent of
the purchase price shall be paid upon the approval of the sale and
the balance may be paid in full, or in ten equal annual installments.
(Emphasis supplied)

In particular, Original Certificate of Title (OCT) No. P-3243

cited Miscellaneous Sales Patent (MSP) No. 11819, which provides
for the predicate requirements that triggered the issuance of said MSP,
to wit:
"Whereas, an investigation has shown that the purchaser
has actually occupied the said land and introduced the
required improvements thereon and has fully paid the purchase
price thereof x x x." 13

After careful consideration of all the submissions of petitioners,

the Court finds that they failed to establish that they were able to
comply with the requirements under Section 1 ofR.A. 730.

First, when the issue of required Filipino citizenship was

assailed, petitioners were unable to adduce evidence to establish that
they were not yet naturalized American citizens when they applied for
the MSP and obtained the same. Petitioners neither contested the
challenge on their Filipino citizenship at the time of their application
for an MSP over the subject property nor otherwise presented to the
court any evidence that would demonstrate the date of their
naturalization as American citizens vis-a-vis their time of application
for the pertinent MSP.

To be sure, as provided under Section 3 of R.A. 9225, 14 natural

Filipino citizens who acquire foreign citizenship retain or otherwise
reacquire their Filipino citizenship after taking an oath of allegiance to
the Republic of the Philippines. In the case at bar, however, nothing in

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13
Rollo, p. 32. Emphasis supplied.
14 Otherwise known as the "CITIZENSHIP RETENTION AND RE-ACQUISITION ACT OF 2003", July
28, 2003.
RESOLUTION 4 G.R. No. 213042
March 24, 2021

the records show that petitioners submitted proof of having taken this
oath as prescribed under the law. 15

Second, the Court finds that petitioners also failed to prove that
they fulfilled the requisite which Section 1 of R.A. 730 provides and
calls "essential" - purchaser's physical occupation of the subject
property, including the construction of a house and actual residence
therein. On the contrary, what the body of evidence shows is that it
was respondents who occupied, introduced improvements and resided
in the property. It is crucial to note that respondents' allegation of
occupying and residing in the property was never refuted by
petitioners. Evidently, therefore, if respondents were the ones who
constructed and resided in the property, that excluded petitioners from
constructing and residing in the same property, as required by Section
1 ofR.A. 730.

To recall, the Court has not hesitated to declare an MSP void

once it was ascertained that a misrepresentation or other form of
omission was committed in the application for the same. Acutely
instructive is the case of Heirs of lbardaloza v. Republic, 16 which
involved the voiding of an MSP for the applicant's omission to
disclose another occupant on a portion of the property applied for.
Here, the Court held:
The relevance of actual occupancy and residency in the
application for miscellaneous sales patent under the
aforementioned laws and presidential issuances is thus not difficult
to comprehend. Accordingly, we find no reversible error
committed by the CA in holding that there was fraud and
misrepresentation in the om1ss10n to declare in
his sales patent application the occupancy by another person of a
portion of the subject lot. Even if it was established by petitioners
that Diaz was a mere lessee, such did not change the fact that there
was misrepresentation in the statements made by Ibardaloza in his
application. Ibardaloza could not have pre-empted the

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15 Sec. 3 thereof provides:

SEC. 3. Retention of Philippine Citizenship. - Any prov1s10n of law to the contrary
notwithstanding, natural-born citizenship by reason of their naturalization as citizens of a
foreign country are hereby deemed to have re-acquired Philippine citizenship upon taking the
following oath of allegiance to the Republic:
"I _ _ ___, solemny swear (or affirm) that I will support and defend the
Constitution of the Republic of the Philippines and obey the laws and legal orders
promulgated by the duly constituted authorities of the Philippines, and I hereby
declare that I recognize and accept the supreme authority of the Philippines and will
maintain true faith and allegiance thereto; and that I imposed this obligation upon
myself voluntarily without mental reservation or purpose of evasion."
Natural born citizens of the Philippines who, after the effectivity of this Act, become citizens
of a foreign country shall retain their Philippine citizenship upon taking the aforesaid oath.
16 G.R. No. 243157, April 10, 2019.
RESOLUTION 5 G.R. No. 213042
March 24, 2021

administrative determination of whether Diaz, as actual occupant

and resident of the subject lot, is qualified to avail of the land
distribution program under Proc. 518. As to the decision in the
ejectment case he filed against Diaz, it bears to stress that the only
issue in unlawful detainer cases is the right to physical possession,
and does not involve the defendant's qualifications under various
laws to avail of public land distribution program, such as in this
case.

lbardaloza was found guilty of making false statements in

his application for a sales patent, thus justifying the annulment of
his title, pursuant to Sec. 91 of C.A. No. 141. The indefeasibility of
a title does not attach to titles secured by fraud and
misrepresentation x x x. 17

Petitioners' reliance on R.A. 5972 18 is likewise inadequate, and

does not help their cause. Section 2 of said statute provides:

Section 2. The same Act is further amended by inserting Section

seven-A between sections seven and eight thereof to read as
follows:

"Sec. 7-A. Lands exempted from public

auction. - All commercial and residential lands
within the City shall be exempted from the
requirement of sale by public auction and the actual
and/or legal possessor thereof, shall be given
priority in acquiring the lands they occupy
notwithstanding the provision of any law to the
contrary." (Emphasis supplied)

Demonstrably, Section 7-A 19 of R.A. 4645, 20 as amended by

R.A. 5972, similarly requires actual or legal possession of the subject
property, neither of which petitioners were able to establish in their
favor.

Since petitioners here failed to show that they were either the
actual or legal possessors of the subject property, the issuance of MSP
No. 11819, upon which OCT No. P-3243 was predicated, is void. To
be sure, the registration of a patent under the Torrens System merely
confirms the registrant's title, but it does not vest title where there is

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11 Id.
18 Entitled, "AN ACT AMENDING REPUBLIC ACT NUMBERED FORTY-FIVE, KNOWN AS THE
CHARTER OF THE CITY OF OLONGAPO," approved on June 21 , 1969.
19
Sec. 7-A ofR.A. 4645 provides:
Sec. 7-A. Lands exempted from public auction. -All commercial and residential lands within
the City shall be exempted from the requirement of sale by public auction and the actual
and/or legal possessor thereof, shall be given priority in acquiring the lands they occupy
notwithstanding the provision of any law to the contrary.
20 OTHERWISE KNOWN AS THE "CHARTER OF THE CITY OF OLONGAPO", approved on June 1,
1966.
RESOLUTION 6 G.R. No. 213042
March 24, 2021

none because registration under this system is not a mode of acquiring

ownership.21

With respect to respondents' claim that they were legally

entitled to the ownership of the property through open, continuous,
and adverse possession of the property, the Court finds that this claim
did not ripen for respondents a right of ownership. They continuously
occupied the property for over 20 years though they were aware that
the same was registered under the name of petitioners. Since
respondents did not occupy the subject property in the concept of an
owner, they may not be considered to have acquired ownership over
the same by possessing it over a long period of time. 22 To be sure, as
the CA correctly ruled, the subject property could only be acquired
through an application for a sales patent under R.A. 730, and since
respondents also failed to adduce evidence to show that they, for their
part, complied with the requirements under said law, they also may
not acquire ownership over the subject property.

Even granting in arguendo that the ownership of the subject

property could be acquired by acquisitive prescription, the Court still
find that respondents were unable to acquire the same. Since
respondents' possession of the subject property was without title or
good faith, they could only acquire the same through extraordinary
acquisitive prescription. Under extraordinary acquisitive prescription
as provided for under Article 1137 23 of the Civil Code, a person's
uninterrupted adverse possession of unregistered patrimonial property
for at least 30 years, regardless of good faith or just title, ripens into
ownership. In the case at bar, by respondent Delia's own admission in
open court, they were in possession of the subject property for only
over 20 years. This period of possession is around 10 years short of
the period required for extraordinary acquisitive prescription.

Respondents may also not be considered builders m

good faith as defined by Article 448 of the Civil

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21 Baguio v. Republic, et al., G.R. No. 119682. January 21 , 1999, 301 SCRA 450,457.
22 See Lubos v. Galupo, G.R. No. 139136, January 16, 2002, 301 SCRA 450, 457 where the
Court explained:
Acquisitive prescription is a mode of acquiring ownership by a possessor through the
requisite lapse of time. In order to ripen into ownership, possession must be in the concept of
an owner, public, peaceful and uninterrupted. Thus, possession with a juridical title, such as
by a usufructuary, a trustee, a lessee, agent or a pledgee, not being in the concept of an owner,
cannot ripen into ownership by acquisitive prescription unless the juridical relation is first
expressly repudiated and such repudiation has been communicated to the other party.
23 CIVIL CODE, Art. 1137 provides:
Art. 1137. Ownership and other real rights over immovables also prescribe through
uninterrupted adverse possession thereof for thirty years, without need of title or of good
faith. (1959a)
RESOLUTION 7 G.R. No. 213042
March 24, 2021

Code, 24 precisely due to the same prior awareness of an existing title

over it. As the Court ruled in Dinglasan-Delos Santos, et al. v.
Abejon: 25

The terms builder, planter, or sower in good faith as used in

reference to Article 448 of the Civil Code, refers to one who, not
being the owner of the land, builds, plants, or sows on that land
believing himself to be its owner and unaware of the defect in his
title or mode of acquisition. "The essence of good faith lies in an
honest belief in the validity of one's right, ignorance of a superior
claim, and absence of intention to overreach another." On the
other hand, bad faith may only be attributed to a landowner
when the act of building, planting, or sowing was done with his
knowledge and without opposition on his part.26

Clearly, under this definition, by respondents' own admission,

they can only be considered builders in bad faith.

Finally, having adjudged that neither of the parties were able to

substantiate their claim over the subject property, a reversion of the
same into the public domain is in order.

However, reversion is a remedy provided for under Section 101

of Commonwealth Act No. (C.A.) 141 27 or the Public Land Act,
to restore public land fraudulently awarded and disposed of to private
individuals or corporations to the mass of public domain. 28 Contrary
to the CA's ruling, as a general rule, the Court has held in the cases of
Villacorta v. Ulanday29 and Ortega v. Tan, 30 that save for reversion as

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24 CIVIL CODE, Article 448 states:

Art. 448. The owner of the land on which anything has been built, sown or planted in
good faith, shall have the right to appropriate as his own the works, sowing or planting, after
payment of the indemnity provided for in Articles 546 and 548, or to oblige the one who built
or planted to pay the price of the land, and the one who sowed, the proper rent. However, the
builder or planter cannot be obliged to buy the land if its value is considerably more than that
of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land
does not choose to appropriate the building or trees after proper indemnity. The parties shall
agree upon the terms of the lease and in case of disagreement, the court shall fix the terms
thereof. (3 61 a)
25 G.R.No.215820,March20,2017,821 SCRA 132.
26 Id. at 144. Emphasis supplied.
27 Entitled, "AN ACT TO AMEND AND COMPILE THE LAWS RELATIVE TO LANDS OF THE PUBLIC
DOMAN," approved on December 1, 1936.
28 Estate of the Late Jesus S. Yujuico v. Republic, G.R. No. 168661 , October 26, 2007, 537
SCRA 513,527.
29
73 Phil. 655 (1942).
30 G.R. No. L-44617, January 23, 1990, 191 SCRA356.
RESOLUTION 8 G.R. No. 213042
March 24, 2021

contemplated in Section 2931 of the Public Land Act, reversion is a

remedy that does not operate automatically, but requires the Office of
the Solicitor General (OSG) as the proper party to file an action for
reversion. 32 This is because an action for reversion presupposes that
the property in dispute is owned by the State, and it is only proper that
the action be filed by the OSG, being the real party-in-interest. 33

WHEREFORE, in view of the foregoing, the petition is hereby

DENIED. The Decision dated November 18, 2013 and Resolution
dated June 2, 2014 of the Court of Appeals in CA-G.R. CV No. 97039
are hereby AFFIRMED with MODIFICATION in that reversion of
the subject property to the public domain shall be upon the institution
of the appropriate case for reversion by the Office of the Solicitor
General.

Let a copy of this Resolution be furnished the Office of the

Solicitor General for its appropriate action with respect to the
reversion of the land in question.

The petitioners' compliance with the Move in the Premises

Resolution dated January 8, 2020 is DISPENSED WITH.

SO ORDERED." Zalameda, J., no part; Lopez, J., design,ated

as Additional Member per Raffle dated March 3, 2021.

By authority of the Court:

Divisi

by:

MARIA TERESA B. SIBULO

Deputy Division Clerk of Court
77
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31 Section 29 of C.A. 141 provides:

SECTION 29. After title has been granted, the purchaser may not, within a period of ten
years from such cultivation or grant, convey or encumber or dispose said lands or rights
thereon to any person, corporation or association, without prejudice to any right or interest of
the Government in the land: Provided, That any sale and encumbrance made in violation of
the provisions of this section, shall be null and void and shall produce the effect of annulling
the acquisition and reverting the property and all rights thereto to the State, and all payments
on the purchase price theretofore made to the Government shall be forfeited.
32 Maltos v. Heirs ofEusebio Borromeo, G.R. No. 172720, September 14, 2015, 770 SCRA 397,
423.
33
Id. at 426.
RESOLUTION 9 G.R. No. 213042
March 24, 2021

Atty. Nestor F. Dantes Court of Appeals (x)

Counsel for Petitioners Manila
34, 23 rd Street, 2/F, Melyrose Building (CA-G.R. CV No. 97039)
West Bajac Bajac, 2200 Olongapo City
CESA LAW OFFICE
Counsel for Respondents
The Solicitor General 3/F, 2242 Rizal Avenue
134 Amorsolo Street, Legaspi Village East Bajac Bajac, 2200 Olongapo City
1229 Makati City
The Hon. Presiding Judge
Regional Trial Court, Branch 73
2200 Olongapo City
(Civil Case No. 185-0-1999)

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