Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G. R. No. 162322 March 14, 2012

REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
BANTIGUE POINT DEVELOPMENT CORPORATION, Respondent.

DECISION

SERENO, J.:

This Rule 45 Petition requires this Court to address the issue of the proper scope of the delegated jurisdiction of
municipal trial courts in land registration cases. Petitioner Republic of the Philippines (Republic) assails the Decision
of the Court of Appeals (CA)1 in CA-G.R. CV No. 70349, which affirmed the Decision of the Municipal Trial Court
(MTC) of San Juan, Batangas2 in LRC Case No. N-98-20, LRA Record No. 68329, granting respondent Bantigue
Point Development Corporation’s (Corporation) application for original registration of a parcel of land. Since only
questions of law have been raised, petitioner need not have filed a Motion for Reconsideration of the assailed CA
Decision before filing this Petition for Review.

The Facts

On 17 July 1997, respondent Bantigue Point Development Corporation filed with the Regional Trial Court (RTC) of
Rosario, Batangas an application for original registration of title over a parcel of land with an assessed value of
₱4,330, ₱1,920 and ₱8,670, or a total assessed value of ₱14,920 for the entire property, more particularly described
as Lot 8060 of Cad 453-D, San Juan Cadastre, with an area of more or less 10,732 square meters, located at
Barangay Barualte, San Juan, Batangas. 3

On 18 July 1997, the RTC issued an Order setting the case for initial hearing on 22 October 1997.4 On 7 August
1997, it issued a second Order setting the initial hearing on 4 November 1997.5

Petitioner Republic filed its Opposition to the application for registration on 8 January 1998 while the records were
still with the RTC.6

On 31 March 1998, the RTC Clerk of Court transmitted motu proprio the records of the case to the MTC of San
Juan, because the assessed value of the property was allegedly less than ₱100,000.7

Thereafter, the MTC entered an Order of General Default8 and commenced with the reception of evidence.9 Among
the documents presented by respondent in support of its application are Tax Declarations,10 a Deed of Absolute Sale
in its favor,11 and a Certification from the Department of Environment and Natural Resources (DENR) Community
Environment and Natural Resources Office (CENRO) of Batangas City that the lot in question is within the alienable
and disposable zone.12 Thereafter, it awarded the land to respondent Corporation.13

Acting on an appeal filed by the Republic,14 the CA ruled that since the former had actively participated in the
proceedings before the lower court, but failed to raise the jurisdictional challenge therein, petitioner is thereby
estopped from questioning the jurisdiction of the lower court on appeal.15 The CA further found that respondent
Corporation had sufficiently established the latter’s registrable title over the subject property after having proven
open, continuous, exclusive and notorious possession and occupation of the subject land by itself and its
predecessors-in-interest even before the outbreak of World War II.16

Dissatisfied with the CA’s ruling, petitioner Republic filed this instant Rule 45 Petition and raised the following
arguments in support of its appeal:
 I.

THE REPUBLIC CANNOT BE ESTOPPED FROM QUESTIONING THE JURISDICTION OF THE

MUNICIPAL TRIAL COURT OVER THE APPLICATION FOR ORIGINAL REGISTRATION OF LAND TITLE
EVEN FOR THE FIRST TIME ON APPEAL

II.

THE MUNICIPAL TRIAL COURT FAILED TO ACQUIRE JURISDICTION OVER THE APPLICATION FOR
ORIGINAL REGISTRATION OF LAND TITLE.17

The Court’s Ruling

We uphold the jurisdiction of the MTC, but remand the case to the court a quo for further proceedings in order to
determine if the property in question forms part of the alienable and disposable land of the public domain.

The Republic is not estopped from raising the issue of jurisdiction in this case.

At the outset, we rule that petitioner Republic is not estopped from questioning the jurisdiction of the lower court,
even if the former raised the jurisdictional question only on appeal. The rule is settled that lack of jurisdiction over
the subject matter may be raised at any stage of the proceedings.18 Jurisdiction over the subject matter is conferred
only by the Constitution or the law.19 It cannot be acquired through a waiver or enlarged by the omission of the
parties or conferred by the acquiescence of the court.20 Consequently, questions of jurisdiction may be cognizable
even if raised for the first time on appeal.21

The ruling of the Court of Appeals that "a party may be estopped from raising such [jurisdictional] question if he has
actively taken part in the very proceeding which he questions, belatedly objecting to the court’s jurisdiction in the
event that the judgment or order subsequently rendered is adverse to him"22 is based on the doctrine of estoppel by
laches. We are aware of that doctrine first enunciated by this Court in Tijam v. Sibonghanoy.23 In Tijam, the party-
litigant actively participated in the proceedings before the lower court and filed pleadings therein. Only 15 years
thereafter, and after receiving an adverse Decision on the merits from the appellate court, did the party-litigant
question the lower court’s jurisdiction. Considering the unique facts in that case, we held that estoppel by laches had
already precluded the party-litigant from raising the question of lack of jurisdiction on appeal. In Figueroa v.
People,24 we cautioned that Tijam must be construed as an exception to the general rule and applied only in the most
exceptional cases whose factual milieu is similar to that in the latter case.

The facts are starkly different in this case, making the exceptional rule in Tijam inapplicable. Here, petitioner
Republic filed its Opposition to the application for registration when the records were still with the RTC.25 At that
point, petitioner could not have questioned the delegated jurisdiction of the MTC, simply because the case was not
yet with that court. When the records were transferred to the MTC, petitioner neither filed pleadings nor requested
affirmative relief from that court. On appeal, petitioner immediately raised the jurisdictional question in its
Brief.26 Clearly, the exceptional doctrine of estoppel by laches is inapplicable to the instant appeal.

Laches has been defined as the "failure or neglect, for an unreasonable and unexplained length of time, to do that
which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a
right within a reasonable time, warranting the presumption that the party entitled to assert it either has abandoned or
declined to assert it."27 In this case, petitioner Republic has not displayed such unreasonable failure or neglect that
would lead us to conclude that it has abandoned or declined to assert its right to question the lower court's
jurisdiction.

II

The Municipal Trial Court properly acquired jurisdiction over the case.
In assailing the jurisdiction of the lower courts, petitioner Republic raised two points of contention: (a) the period for
setting the date and hour of the initial hearing; and (b) the value of the land to be registered.

First, petitioner argued that the lower court failed to acquire jurisdiction over the application, because the RTC set
the date and hour of the initial hearing beyond the 90-day period provided under the Property Registration Decree.28

We disagree.

The Property Registration Decree provides:

Sec. 23. Notice of initial hearing, publication, etc. - The court shall, within five days from filing of the application,
issue an order setting the date and hour of the initial hearing which shall not be earlier than forty-five days nor later
than ninety days from the date of the order. x x x.

In this case, the application for original registration was filed on 17 July 1997.29 On 18 July 1997, or a day after the
filing of the application, the RTC immediately issued an Order setting the case for initial hearing on 22 October
1997, which was 96 days from the Order.30 While the date set by the RTC was beyond the 90-day period provided for
in Section 23, this fact did not affect the jurisdiction of the trial court. In Republic v. Manna Properties,
Inc.,31 petitioner Republic therein contended that there was failure to comply with the jurisdictional requirements for
original registration, because there were 125 days between the Order setting the date of the initial hearing and the
initial hearing itself. We ruled that the lapse of time between the issuance of the Order setting the date of initial
hearing and the date of the initial hearing itself was not fatal to the application. Thus, we held:

x x x [A] party to an action has no control over the Administrator or the Clerk of Court acting as a land court; he has
no right to meddle unduly with the business of such official in the performance of his duties. A party cannot intervene
in matters within the exclusive power of the trial court. No fault is attributable to such party if the trial court errs on
matters within its sole power. It is unfair to punish an applicant for an act or omission over which the applicant has
neither responsibility nor control, especially if the applicant has complied with all the requirements of the law.32

Indeed, it would be the height of injustice to penalize respondent Corporation by dismissing its application for
registration on account of events beyond its control.

Moreover, since the RTC issued a second Order on 7 August 1997 setting the initial hearing on 4 November
1997,33 within the 90-day period provided by law, petitioner Republic argued that the jurisdictional defect was still not
cured, as the second Order was issued more than five days from the filing of the application, again contrary to the
prescribed period under the Property Registration Decree.34

Petitioner is incorrect.

The RTC’s failure to issue the Order setting the date and hour of the initial hearing within five days from the filing of
the application for registration, as provided in the Property Registration Decree, did not affect the court’s its
jurisdiction. Observance of the five-day period was merely directory, and failure to issue the Order within that period
did not deprive the RTC of its jurisdiction over the case. To rule that compliance with the five-day period is
mandatory would make jurisdiction over the subject matter dependent upon the trial court. Jurisdiction over the
subject matter is conferred only by the Constitution or the law.35 It cannot be contingent upon the action or inaction of
the court.

This does not mean that courts may disregard the statutory periods with impunity. We cannot assume that the law
deliberately meant the provision "to become meaningless and to be treated as a dead letter."36 However, the records
of this case do not show such blatant disregard for the law. In fact, the RTC immediately set the case for initial
hearing a day after the filing of the application for registration,37 except that it had to issue a second Order because
the initial hearing had been set beyond the 90-day period provided by law.

Second, petitioner contended38 that since the selling price of the property based on the Deed of Sale annexed to
respondent’s application for original registration was ₱160,000,39 the MTC did not have jurisdiction over the case.
Under Section 34 of the Judiciary Reorganization Act, as amended,40 the MTC’s delegated jurisdiction to try
cadastral and land registration cases is limited to lands, the value of which should not exceed ₱100,000.
We are not persuaded.

The delegated jurisdiction of the MTC over cadastral and land registration cases is indeed set forth in the Judiciary
Reorganization Act, which provides:

Sec. 34. Delegated Jurisdiction in Cadastral and Land Registration Cases. - Metropolitan Trial Courts, Municipal
Trial Courts, and Municipal Circuit Trial Courts may be assigned by the Supreme Court to hear and determine
cadastral or land registration cases covering lots where there is no controversy or opposition, or contested lots
where the value of which does not exceed One hundred thousand pesos (₱100,000.00), such value to be
ascertained by the affidavit of the claimant or by agreement of the respective claimants if there are more than one,
or from the corresponding tax declaration of the real property. Their decision in these cases shall be appealable in
the same manner as decisions of the Regional Trial Courts. (As amended by R.A. No. 7691) (Emphasis supplied.)

Thus, the MTC has delegated jurisdiction in cadastral and land registration cases in two instances: first, where there
is no controversy or opposition; or, second, over contested lots, the value of which does not exceed ₱100,000.

The case at bar does not fall under the first instance, because petitioner opposed respondent Corporation’s
application for registration on 8 January 1998.41

However, the MTC had jurisdiction under the second instance, because the value of the lot in this case does not
exceed ₱100,000.

Contrary to petitioner’s contention, the value of the land should not be determined with reference to its selling price.
Rather, Section 34 of the Judiciary Reorganization Act provides that the value of the property sought to be
registered may be ascertained in three ways: first, by the affidavit of the claimant; second, by agreement of the
respective claimants, if there are more than one; or, third, from the corresponding tax declaration of the real
property.42

In this case, the value of the property cannot be determined using the first method, because the records are bereft
of any affidavit executed by respondent as to the value of the property. Likewise, valuation cannot be done through
the second method, because this method finds application only where there are multiple claimants who agree on
and make a joint submission as to the value of the property. Here, only respondent Bantigue Point Development
Corporation claims the property.

The value of the property must therefore be ascertained with reference to the corresponding Tax Declarations
submitted by respondent Corporation together with its application for registration. From the records, we find that the
assessed value of the property is ₱4,330, ₱1,920 and ₱8,670, or a total assessed value of ₱14,920 for the entire
property.43 Based on these Tax Declarations, it is evident that the total value of the land in question does not exceed
₱100,000. Clearly, the MTC may exercise its delegated jurisdiction under the Judiciary Reorganization Act, as
amended.

III

A certification from the CENRO is not sufficient proof that the property in question is alienable and disposable land
of the public domain.

Even as we affirm the propriety of the MTC’s exercise of its delegated jurisdiction, we find that the lower court erred
in granting respondent Corporation’s application for original registration in the absence of sufficient proof that the
property in question was alienable and disposable land of the public domain.

The Regalian doctrine dictates that all lands of the public domain belong to the State.44 The applicant for land
registration has the burden of overcoming the presumption of State ownership by establishing through
incontrovertible evidence that the land sought to be registered is alienable or disposable based on a positive act of
the government.45 We held in Republic v. T.A.N. Properties, Inc. that a CENRO certification is insufficient to prove
the alienable and disposable character of the land sought to be registered.46 The applicant must also show sufficient
proof that the DENR Secretary has approved the land classification and released the land in question as alienable
and disposable.47
Thus, the present rule is that an application for original registration must be accompanied by (1) a CENRO or
PENRO48 Certification; and (2) a copy of the original classification approved by the DENR Secretary and certified as
a true copy by the legal custodian of the official records.49

Here, respondent Corporation only presented a CENRO certification in support of its application.50 Clearly, this falls
short of the requirements for original registration.1âw phi 1

We therefore remand this case to the court a quo for reception of further evidence to prove that the property in
question forms part of the alienable and disposable land of the public domain. If respondent Bantigue Point
Development Corporation presents a certified true copy of the original classification approved by the DENR
Secretary, the application for original registration should be granted. If it fails to present sufficient proof that the land
in question is alienable and disposable based on a positive act of the government, the application should be denied.

WHEREFORE, premises considered, the instant Petition for Review is DENIED. Let this case be REMANDED to
the Municipal Trial Court of San Juan, Batangas, for reception of evidence to prove that the property sought to be
registered is alienable and disposable land of the public domain.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 190810 July 18, 2012

LORENZA C. ONGCO, PETITIONER,

vs.
VALERIANA UNGCO DALISAY, RESPONDENT.

DECISION

SERENO, J.:

This is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure asking the
Court to rule whether petitioner may intervene in a land registration case.

The Petition seeks to annul and set aside the Court of Appeals (CA) Resolutions1 dated 30 September 2009 and 11
November 2009 (assailed Resolutions), which denied petitioner's Motion for Leave to Intervene dated 23 June 2009.

FACTUAL ANTECEDENTS

On 15 October 2007, respondent Valeriana Ungco Dalisay (Dalisay) applied for registration of a parcel of land
designated as Lot 1792, Cad-609-D, by filing an Application for Land Registration before the Municipal Trial Court
(MTC) of Binangonan, Branch 2.2 At the hearings, no oppositor aside from the Republic of the Philippines (the
Republic) came. Neither was there any written opposition filed in court. Thus, an Order of General Default was
issued against the whole world except the Republic. Consequently, on 15 October 2008, the court found respondent
Dalisay to have clearly shown a registrable right over the subject property and ordered that a decree of registration
be issued by the Land Registration Authority once the Decision had become final.3 Herein petitioner Lorenza C.
Ongco (Ongco) never intervened in the proceedings in the trial court.

The Republic filed an appeal with the CA docketed as CA-G.R. CV No. 92046.4 While the case was pending appeal,
petitioner Ongco filed a "Motion for Leave to Intervene" dated 23 June 2009 with an attached Answer-in-
Intervention.5

The Answer-in-Intervention sought the dismissal of respondent Dalisay's Application for Land Registration on the
ground that, contrary to the allegations of Dalisay, the subject property was not free from any adverse claim. In fact,
petitioner Ongco had allegedly been previously found to be in actual possession of the subject land in an earlier
case filed before the Department of Environment and Natural Resources (DENR) when she applied for a free patent
on the land.6

In her Comment/Objection to the Motion for Leave to Intervene, Dalisay contended that Ongco did not have a legal
interest over the property.7 Moreover, the intervention would unduly delay the registration proceeding, which was
now on appeal. Besides, petitioner's interest, if any, may be fully protected in a separate and direct proceeding.
Additionally, Dalisay pointed out that Section 2, Rule 19 of the Rules of Court was clear that intervention may be
filed at any time before rendition of judgment by the trial court, but not at any other time. The Republic, on the other
hand, said that it was interposing no objection to the Motion for Leave to Intervene.8

On 30 September 2009, the CA issued its first assailed Resolution9 denying the Motion for Intervention for having
been filed beyond the period allowed by law. It said:

Lorenza C. Ongco's prayer to be allowed to intervene in the instant "MOTION FOR LEAVE TO INTERVENE XXX" is
DENIED[,] said motion having been filed beyond the period allowed by law.

Manalo vs. Court of Appeals is emphatic:

Intervention is not a matter of right but may be permitted by the courts only when the statutory conditions for the
right to intervene [are] shown. Thus, the allowance or disallowance of a motion to intervene is addressed to the
sound discretion of the court. In determining the propriety of letting a party intervene in a case, the tribunal should
not limit itself to inquiring whether "a person (1) has a legal interest in the matter in litigation; (2) or in the success of
either of the parties; (3) or an interest against both; (4) or when is so situated as to be adversely affected by a
distribution or other disposition of property in the custody of the court or of an officer thereof." Just as important, as
(the Supreme Court had) stated in Big Country Ranch Corporation v. Court of Appeals [227 SCRA 161{1993}], is the
function to consider whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the
original parties, and whether or not the intervenor's rights may be fully protected in a separate proceeding.

The period within which a person may intervene is also restricted. Section 2, Rule 19 of the 1997 Rules of Civil
Procedure requires:

"SECTION 2. Time to intervene. — The motion to intervene may be filed at any time before the rendition of
judgment by the trial court, x x x."

After the lapse of this period, it will not be warranted anymore. This is because, basically, intervention is not an
independent action but is ancillary and supplemental to an existing litigation.

Here, the subject motion was filed only on June 23, 2009, way beyond the rendition of the Decision dated October
15, 2008 (subject of the instant appeal by the Office of the Solicitor General) by the Regional Trial Court of
Binangonan, Branch 2. As a necessary consequence, the prayed for admission of the instant "ANSWER-IN-
INTERVENTION could only be denied, x x x. (Emphases in the original)

Petitioner filed a Motion for Reconsideration,10 which was also denied in a Resolution dated 11 November 2009.

Hence, the instant Petition for Review under Rule 45.

In her three-page Comment11 on the Petition, respondent Dalisay briefly argues that the CA did not commit any error,
because it properly applied the technical rules of procedure in denying the Motion for Intervention. She also argues
that the issues being presented are factual and, as such, not reviewable in a Petition for Review under Rule 45.

In her Reply,12 petitioner asserts that the issues to be resolved in her Petition are questions of law: whether the
requisites for intervention are present, and whether the intervention she is seeking is an exception to the general
rule that intervention must be filed before judgment is rendered by the trial court.

Issue for Resolution and the Ruling of the Court

The issue for resolution in the instant case is whether the CA committed reversible error in denying the Motion for
Intervention of petitioner.

We rule to deny the Petition.

DISCUSSION

Intervention is a remedy by which a third party, not originally impleaded in the proceedings, becomes a litigant
therein for a certain purpose: to enable the third party to protect or preserve a right or interest that may be affected
by those proceedings.13 This remedy, however, is not a right. The rules on intervention are set forth clearly in Rule 19
of the Rules of Court, which reads:

Sec. 1. Who may intervene. - A person who has a legal interest in the matter in litigation, or in the success of either
of the parties, or an interest against both, or is so situated as to be adversely affected by a distribution or other
disposition of property in the custody of the court or of an officer thereof may, with leave of court, be allowed to
intervene in the action. The court shall consider whether or not the intervention will unduly delay or prejudice the
adjudication of the rights of the original parties, and whether or not the intervenor's rights may be fully protected in a
separate proceeding.
Sec. 2. Time to intervene. - The motion to intervene may be filed at any time before rendition of judgment by the trial
court. A copy of the pleading-in-intervention shall be attached to the motion and served on the original parties.
(Emphasis supplied)

It can be readily seen that intervention is not a matter of right, but is left to the trial court's sound discretion. The trial
court must not only determine if the requisite legal interest is present, but also take into consideration the delay and
the consequent prejudice to the original parties that the intervention will cause. Both requirements must concur, as
the first requirement on legal interest is not more important than the second requirement that no delay and prejudice
should result.14 To help ensure that delay does not result from the granting of a motion to intervene, the Rules also
explicitly say that intervention may be allowed only before rendition of judgment by the trial court.

In Executive Secretary v. Northeast Freight,15 this Court explained intervention in this wise:

Intervention is not a matter of absolute right but may be permitted by the court when the applicant shows facts which
satisfy the requirements of the statute authorizing intervention. Under our Rules of Court, what qualifies a person to
intervene is his possession of a legal interest in the matter in litigation or in the success of either of the parties, or an
interest against both; or when he is so situated as to be adversely affected by a distribution or other disposition of
property in the custody of the court or an officer thereof. As regards the legal interest as qualifying factor, this Court
has ruled that such interest must be of a direct and immediate character so that the intervenor will either gain or lose
by the direct legal operation of the judgment. The interest must be actual and material, a concern which is more than
mere curiosity, or academic or sentimental desire; it must not be indirect and contingent, indirect and remote,
conjectural, consequential or collateral. However, notwithstanding the presence of a legal interest, permission to
intervene is subject to the sound discretion of the court, the exercise of which is limited by considering "whether or
not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties and whether or
not the intervenor's rights may be fully protected in a separate proceeding." (Emphasis supplied)

Applying the foregoing points to the case at bar, Ongco may not be allowed to intervene.

Petitioner has not shown any legal interest of such nature that she "will either gain or lose by the direct legal
operation of the judgment." On the contrary, her interest is indirect and contingent. She has not been granted a free
patent over the subject land, as she in fact admits being only in the process of applying for one.16 Her interest is at
best inchoate. In Firestone Ceramics v. CA,17 the Court held that the petitioner who anchored his motion to intervene
on his legal interest arising from his pending application for a free patent over a portion of the subject land merely
had a collateral interest in the subject matter of the litigation. His collateral interest could not have justified
intervention.

In any event, the Motion for Intervention was filed only with the CA after the MTC had rendered judgment. By itself,
this inexcusable delay is a sufficient ground for denying the motion. To recall, the motion should be filed "any time
before rendition of judgment." The history and rationale of this rule has been explained thusly:

1. The former rule as to when intervention may be allowed was expressed in Sec. 2, Rule 12 as "before or
during a trial," and this ambiguity also gave rise to indecisive doctrines. Thus, inceptively it was held that a
motion for leave to intervene may be filed "before or during a trial" even on the day when the case is
submitted for decision (Falcasantos vs. Falcasantos, L-4627, May 13, 1952) as long as it will not unduly
delay the disposition of the case. The term "trial" was used in its restricted sense, i.e., the period for the
introduction for intervention was filed after the case had already been submitted for decision, the denial
thereof is proper (Vigan Electric Light Co., Inc. vs. Arciaga, L-29207 and L-29222, July 31, 1974). However,
it has also been held that intervention may be allowed at any time before the rendition of final judgment
(Linchauco vs. CA, et al, L-23842, Mar. 13, 1975). Further, in the exceptional case of Director of Lands vs.
CA, et al. (L-45168, Sept. 25, 1979), the Supreme Court permitted intervention in a case pending before it
on appeal in order to avoid injustice and in consideration of the number of parties who may be affected by
the dispute involving overlapping of numerous land titles.

2. The uncertainty in these ruling has been eliminated by the present Sec. 2 of this amended Rule which
permits the filing of the motion to intervene at any time before the rendition of the judgment in the case, in
line with the doctrine in Lichauco above cited. The justification advanced for this is that before judgment is
rendered, the court, for good cause shown, may still allow the introduction of additional evidence and that is
still within a liberal interpretation of the period for trial. Also, since no judgment has yet been rendered, the
 matter subject of the intervention may still be readily resolved and integrated in the judgment disposing of all
claims in the case, and would not require an overall reassessment of said claims as would be the case if the
judgment had already been rendered.18 (Emphases supplied)

Indeed, in Manalo v. CA,19 the Court said:

The period within which a person may intervene is also restricted. Section 2, Rule 19 of the 1997 Rules of Civil
Procedure requires:

"SECTION 2. Time to intervene. — The motion to intervene may be filed at any time before the rendition of
judgment by the trial court x x x."

After the lapse of this period, it will not be warranted anymore. This is because, basically, intervention is not an
independent action but is ancillary and supplemental to an existing litigation. (Emphases supplied)

There is wisdom in strictly enforcing the period set by Rule 19 of the Rules of Court for the filing of a motion for
intervention. Otherwise, undue delay would result from many belated filings of motions for intervention after
judgment has already been rendered, because a reassessment of claims would have to be done. Thus, those who
slept on their lawfully granted privilege to intervene will be rewarded, while the original parties will be unduly
prejudiced. This rule should apply more strictly to land registration cases, in which there is a possibility that a great
number of claimant-oppositors may cause a delay in the proceedings by filing motions to intervene after the trial
court — sitting as a land registration court — has rendered judgment.

Also, it must be noted that a land registration proceeding is an action in rem. Thus, only a general notice to the
1âwphi1

public is required, and not a personal one. Its publication already binds the whole world, including those who will be
adversely affected. This, according to this Court, is the only way to give meaning to the finality and indefeasibility of
the Torrens title to be issued as against the argument that the said rule could result in actual injustice.20 In the
present case, the MTC found that the required publication was made by respondent Dalisay when she applied for
land registration. That publication was sufficient notice to petitioner Ongco. Thus, petitioner only had herself to
blame when she failed to intervene as soon as she could before the rendition of judgment.

We also note that, had petitioner learned of the trial court proceedings in time, and had she wanted to oppose the
application, the proper procedure would have been to ask for the lifting of the order of default and then to file the
opposition.21 It would be an error of procedure to file a motion to intervene. This is because, as discussed above,
proceedings in land registration are in rem and not in personam.22

Aware of her fatal shortcoming, petitioner Ongco would now like the Court to exceptionally allow intervention even
after judgment has been rendered by the MTC in the land registration case. She cites instances in which this Court
allowed intervention on appeal. However, the cases she cited are inapplicable to the present case, because the
movants therein who wanted to intervene were found by the Court to be indispensable parties. Thus, under Section
7, Rule 3 of the Rules of Court, they had to be joined because, without them, there could be no final determination of
the actions. Indeed, if indispensable parties are not impleaded, any judgment would have no effect.

In Galicia v. Manliquez,23 the first case cited by petitioner, the Court found that the defendant-intervenors were
indispensable parties, being the indisputable compulsory co-heirs of the original defendants in the case for recovery
of possession and ownership, and annulment of title. Thus, without them, there could be no final determination of
the action. Moreover, they certainly stood to be affected by any judgment in the case, considering their "ostensible
ownership of the property."

In Mago v. CA,24 the intervenor was the rightful awardee of a piece of land that was mistakenly awarded by the NHA
to another awardee. Thus, the latter was given title to land with an area that was more than that intended to be
awarded to him. The NHA then cancelled the title mistakenly awarded and ordered the subdivision of the lot into
two. The recipient of the mistakenly awarded title filed a Petition for injunction to enjoin the NHA from cancelling the
title awarded. The Petition was granted and the judgment became final. The other awardee filed a Motion to
Intervene, as well as a Petition for Relief from Judgment, which were both denied by the trial court. The CA affirmed
the Decision of the court a quo. This Court, however, found that the intervention should have been granted,
considering the indisputable admission of the NHA, the grantor-agency itself, that the intervenor was the rightful
awardee of half of the lot mistakenly awarded. Thus, the intervenor stood to be deprived of his rightful award when
the trial court enjoined the cancellation of the mistakenly awarded title and the subdivision of the lot covered by the
title. The intervenor's legal interest, in other words, was directly affected.

In the present case, petitioner Ongco is not an indispensable party. As already noted, her interests are inchoate and
merely collateral, as she is only in the process of applying for a free patent. Also, the action for land registration may
proceed and be carried to judgment without joining her. This is because the issues to be threshed out in a land
registration proceeding — such as whether the subject land is alienable and disposable land of the public domain;
and whether the applicant or her predecessors-in-interest have been in open, continuous, exclusive and notorious
possession of the said land under a bona fide claim of ownership since 12 June 1945, or earlier — can be threshed
out without joining petitioner.

True, the evidence to be adduced by petitioner Ongco - to prove that she, not Dalisay, has been in possession of
the land subject of the application for registration of respondent — has a bearing on the determination of the latter's
right to register her title to the land. In particular, this evidence will help debunk the claim of respondent that she has
been in open, continuous, exclusive and notorious possession of the subject parcel of land. In fact, this same
evidence must have been the reason why the Republic did not interpose any objection to the Motion for Intervention.
None of these facts, however, makes petitioner an indispensable party; for there are many other ways of
establishing the fact of open, continuous, exclusive and notorious possession of the subject parcel of land or the
lack thereof.

If any, the only indispensable party to a land registration case is the Republic. Against it, no order of default would
be effective, because the Regalian doctrine presumes that all lands not otherwise appearing to be clearly under
private ownership are presumed to belong to the State.25

In any case, we note that petitioner is not left without any remedy in case respondent succeeds in getting a decree
of registration. Under Section 32 of Presidential Decree No. 1529, or the Property Registration Decree, there is a
remedy available to any person deprived of land — or of any estate or interest therein - through an adjudication or a
confirmation of title obtained by actual fraud. The person may file, in the proper court, a petition for reopening and
reviewing the decree of registration within one year from the date of entry thereof. This Court has ruled that actual
fraud is committed by a registration applicant's failure or intentional omission to disclose the fact of actual physical
possession of the premises by the party seeking a review of the decree. It is fraud to knowingly omit or conceal a
fact from which benefit is obtained, to the prejudice of a third person.26 Thus, if he is so minded, petitioner can still file
for a petition to review the decree of registration.

WHEREFORE, premises considered, the instant Petition is DENIED. The Court of Appeals Resolutions dated 30
September 2009 and 11 November 2009, which denied petitioner's Motion for Leave to Intervene in CA-G.R. CV
No. 92046, are hereby AFFIRMED.

SO ORDERED.
 SECOND DIVISION

June 21, 2017

G.R. No. 219070

CONRADO R. ESPIRITU, JR., TERESITA ESPIRITU-GUTIERREZ, MARIETTA R. ESPIRITU-CRUZ, OSCAR R.

ESPIRITU, and ALFREDO R. ESPIRITU, Petitioners
vs.
REPUBLIC OF THE PHILIPPINES, Respondent

DECISION

MENDOZA, J.:

This is a petition for review on certiorari seeking to reverse and set aside the March 20, 2015 Decision1 and June 18,
2015 Resolution 2 of the Court of Appeals {CA) in CA-G.R. CV No. 101002, which reversed and set aside the July
30, 2012 Decision3 of the Regional Trial Court, Branch 274, Parañaque City (RTC) in Land Registration Case No.
10-0026 (LRC No. 10- 0026), which approved the application for land registration filed by the petitioners.

The Antecedents

On March 1, 2010, the petitioners, with their now deceased sibling, Carmen Espiritu, filed before the RTC an
Application for Registration of Title to Land4 covering a parcel of land with an area of 6,971 square meters, located
at Barangay La Huerta, Parafiaque City, Metro Manila, and identified as Lot 4178, Cad. 299 of the Paranaque
Cadastre Case 3 (subject land).

Attached to the petitioners' application were copies of the following documents: (1) Special Powers of Attorney
respectively executed by petitioners Oscar Espiritu (Oscar)5 and Alfredo Espiritu (Alfredo )6 in favor of petitioner
Conrado Espiritu, Jr. (Conrado, Jr.), to represent them in the proceedings relating to the application; (2) Advanced
Survey Plan7 of Lot No. 4178, Cad. 299 of the Parafiaque Cadastre Case 3; (3) Technical Description8 of Lot 4178,
AP-04-003281, being an advanced survey of Lot 4178, Cad. 299, Parafiaque Cadastre Case 3; and (4) Tax
Declaration (T.D.) No. E-005-01718-TR.9

The petitioners alleged that their deceased parents, Conrado Espiritu, Sr. (Conrado, Sr.) and Felicidad Rodriguez-
Espiritu (Felicidad), were the owners of the subject land; that they inherited the subject land after their parents
passed away; and that they, by themselves and through their predecessors-in-interest, have been in open, public,
and continuous possession of the subject land in the concept of owner for more than thirty (30) years.

Subsequently, the RTC determined that it had jurisdiction to act on the application. Thereafter, trial ensued, during
which Oscar, Conrado, Jr., Ludivina Aromin (Aromin), Ferdinand Encarnacion (Encarnacion), and Marrieta Espiritu-
Cruz (Marrieta), were presented as witnesses.

Encarnacion, a staff in the Docket Division of the Land Registration Authority, testified that the notices relative to the
application for registration of the subject land were served on the owners of the, adjoining lots.

Marrieta testified that she is one of the children of Conrado, Sr. and Felicidad; that she was born on February 23,
1933; that she has known the subject land since she was seven (7) years old because her parents owned the same;
that before her parents, her grandparents and Felicidad's parents, Dalmacio Rodriguez and Dominga Catindig were
the owners of the subject land; that she, together with her siblings, inherited the subject land from Conrado, Sr. and
Felicidad, who died in March 1984 and on January 10, 1986, respectively; that they possessed the subject land
openly and continuously since the death of their parents; that the subject land was agricultural in nature because it
was being used as salt land during summer and as fishpond during rainy season; and that there were no adverse
claimants over the subject land.

Oscar corroborated Marietta's testimony. He reiterated that they were in possession and occupation of the subject
land because they could visit the property whenever they wanted to, introduce improvements thereon, and prevent
intruders from entering it.

Conrado, Jr. testified that he commissioned the survey of the subject land; that he requested and received from
Laureano B. Lingan, Jr., Regional Technical Director of the Forest Management Services (FMS), Department of
Environment and Natural Resources-National Capital Region (DENRNCR), a Certification, 10 dated October 6, 2010,
stating that the subject land was part of the alienable and disposable land of the public domain; and that they utilized
the subject land in their salt-making business, which they inherited from their parents.

On cross-examination, Conrado, Jr. admitted that their salt-making business ceased operation in 2004, and that the
subject land had become idle.

For her part, Aromin, the Chief of the Technical Services of the DENR-NCR, testified that their office issued a
certified copy of the technical description of Lot No. 4178 (AP 04-003281) on February 18, 201 O; and that the
technical description was verified to be consistent with the approved survey plan of Lot No. 4178.

In addition to the testimonies of their witnesses, the petitioners also presented in evidence several tax declarations
covering the subject land, the earliest of which was T.D. No. 318011 issued on April 28, 1970; a Certification, 12 dated
January 26, 2011, issued by the Parañaque City Treasurer's Office stating that the real property tax for the subject
land had been fully settled up to year 201 O; and the DENR-NCR certification alluded to by Conrado, Jr. during his
direct examination, to the effect that the subject land was verified to be within the alienable and disposable land
under Project No. 25 of Parañaque City, as per LC Map 2623, and that it is not needed for forest purposes.

The RTC Ruling

In its decision, dated July 30, 2012, the RTC granted the application for registration. The trial court opined that the
petitioners were able to establish possession and occupation over the subject land under a bona fide claim of
ownership since June 12, 1945 or earlier. It gave credence to the testimony of Marrieta that she had known that the
subject land belonged to their parents as early as 1940 because she was already seven (7) years old at that time.

The trial court was convinced that the petitioners were able to prove that the subject land was part of the alienable
and disposable land of the public domain. In so ruling, it relied on the contents of the DENR-NCR certification. The
dispositive portion of the decision reads:

WHEREFORE, pursuant to Section 29 of P.D. No. 1529 as amended, judgment is hereby rendered granting the
application of the applicants, namely, Carmen R. Espiritu, Conrado R. Espiritu, Jr., Marrieta R. Espiritu, Oscar R.
Espiritu, Alfredo R. Espiritu, and Teresita R. Espiritu, confirming the title of said applicants over the parcel of land
fully described on its technical description described as follows:

xxx

and ordering the registration of said parcel of land in the name of the applicants.

Once this Decision becomes final, let the corresponding Order for the issuance of the Decree be issued.

SO ORDERED.13 (Boldface omitted)

The Republic moved for reconsideration, but its motion was denied by the R TC in its resolution, dated April 1, 2013.
Aggrieved, the Republic, through the OSG, elevated an appeal to the CA.14

The CA Ruling

In its assailed decision, dated March 20, 2015, the CA reversed and set aside the July 30, 2012 RTC decision. In
reversing the trial court, the appellate court reiterated the prevailing doctrine that to successfully register a parcel of
land, the application must be accompanied by: (1) a CENRO or PENRO certification stating the alienable and
disposable character of the land applied for; and (2) a copy of the original classification approved by the DENR
Secretary and certified as a true copy by the legal custodian of the official records. It opined that the DENR-NCR
certification presented by the petitioners would not suffice to prove that the subject land was indeed classified by the
DENR Secretary as alienable and disposable. The CA explained that under Department of Agriculture
Orders (DAO) Nos. 20 and 38, the Regional Technical Director of the FMS had no authority to issue certificates of
land classification; and that the petitioners failed to present a certified true copy of the original classification
approved by the DENR Secretary. The dispositive portion of the decision states:

WHEREFORE, in view of the foregoing, the instant appeal is hereby GRANTED. The Decision dated July 30, 2012
of the Regional Trial Court, Branch 274 in Parafiaque City in LRC Case No. 10-0026 is hereby ANNULLED and SET
ASIDE. The application for registration of land title filed by the applicants-appellees Carmen R. Espiritu, Conrado R.
Espiritu, Jr., Marrieta R. Espiritu, Oscar R. Espiritu, Alfredo R. Espiritu and Teresita R. Espiritu is hereby DENIED.

SO ORDERED.15 (Boldface omitted)

The petitioners moved for reconsideration, but their motion was denied by the CA in its resolution, dated June 18,
2015.

Hence, this petition.

ISSUE

WHETHER THE APPELLATE COURT ERRED IN REVERSING THE TRIAL COURT AND DISMISSING THE
PETITIONERS' APPLICATION FOR REGISTRATION OF TITLE.

The petitioners, relying on the cases of Republic of the Philippines v. Serrano (Serrano )16 and Republic v. Vega
(Vega), 17 argue that they had substantially complied with the presentation of the required proof that the land applied
for registration is alienable and disposable part of the public domain. They assert that the DENR-NCR certification
they submitted, together with all the documentary evidence they presented, constituted substantial compliance with
the legal requirement that the land must be proved to be alienable and disposable part of the public domain. The
petitioners insist that the DENR-NCR certification they submitted was sufficient proof of the character of the subject
land because under DAO No. 2012-09,18 dated November 14, 2012, the Regional Executive Director of the DENR is
vested with authority to issue certifications on land classification for lands situated in Metro Manila.

The petitioners further claimed that they already submitted a certified true copy of the original land classification
covering the subject land. They assert that in their Motion for Reconsideration, dated May 3, 2015, filed before the
CA, they attached a copy of Forestry Administrative Order (PAO) No. 4-1141, dated January 3, 1968, signed by
Arturo R. Tanco, Jr., then Secretary of Agriculture and Natural Resources.

In its Comment, 19 the Republic countered that the petitioners failed to comply with the requirements that the
application for original registration must be accompanied by (1) a CENRO/PENRO certification; and (2) a certified
true copy of the original classification approved by the DENR Secretary. It contended that the petitioners' reliance
on Serrano and Vega were misplaced, because the rulings therein on substantial compliance were mere pro hac
vice. The Republic further av.erred that while the petitioners were able to present a copy of PAO No. 4-1141, the
same had no probative value as it was not presented during the proceedings before the RTC. Lastly, it claimed that
assuming arguendo that the petitioners had sufficiently established the character of the subject land as alienable
and disposable, registration would still not be proper, considering that they failed to establish the necessary
possession and occupation for the period required by law.
In their Reply,20 dated July 21, 2016, the petitioners insisted on the application of Serrano and Vega to the present
case. They also assert that even if their copy of F AO No. 4-1141 was not presented during the proceedings before
the RTC, the same still have probative value. On the basis of Natividad Sta. Ana Victoria v. Republic of the
Philippines (Sta. AnaVictoria),21 the petitioners claim that in land registration cases, the Court has allowed the
presentation of additional certifications to prove the alienability and disposability of the land sought to be registered
when the authenticity thereof were not sufficiently contested.

The Court's Ruling

The petition lacks merit.

The Court notes that the subject application was filed under Section 14(2) of Presidential Decree (P.D.) No. 1529,
considering the allegation therein of possession and occupation in the concept of owner for more than thirty (30)
years. The trial court, however, granted the application under Section 14(1) of the same decree after finding that the
petitioners were able to establish open, continuous, and exclusive possession and occupation of the subject land
under a bona fide claim of ownership since June 12, 1945 or earlier.

Manifestly, there has been some uncertainty under what provision of law the present application for registration is
being sought because the requirements and basis for registration under these two provisions of law differ from one
another. Section 14(1) mandates registration on the basis of possession, while Section 14(2) entitles registration on
the basis of prescription.22 Nevertheless, for the proper resolution of the issues and arguments raised herein, the
present application would be scrutinized based on the requirements of the provisions of Sections 14(1) and (2) of
P.D. No. 1529.

Registration under

Section 14(1) of P.D. No. 1529

Section 14, paragraph 1 of P.D. No. 1529 provides:

Sec. 14. Who may apply. The following persons may file in the proper Court of First Instance an application for
registration of title to land, whether personally or through their duly authorized representatives:

(1) 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 ownership since June 12, 1945, or earlier.

Registration under Section 14(1) of P.D. No. 1529 is based on possession and occupation of the alienable and
disposable land of the public domain since June 12, 1945 or earlier, without regard to whether the land was
susceptible to private ownership at that time. 23 Thus, for registration under Section 14(1) to prosper, the applicant
for original registration of title to land must establish the following: (1) that the subject land forms part of the
disposable and alienable lands of the public domain; (2) that the applicants by themselves and their predecessors-
in-interest have been in open, continuous, exclusive, and notorious possession and occupation thereof; and (3) that
the possession is under a bona fide claim of ownership since June 12, 1945, or earlier.24

Petitioners failed to prove

that the subject land is
alienable and disposable

The rule is that applicants for land registration bear the burden of proving that the land applied for registration is
alienable and disposable. 25 In this regard, the applicant for land registration must prove that the DENR Secretary
had approved the land classification and released the land of the public domain as alienable and disposable, and
that the land subject of the application for registration falls within the approved area per verification through survey
by the PENRO or CENRO. In addition, he must also present a copy of the original classification approved by the
DENR Secretary and certified as a true copy by the legal custodian of the official records. These facts must be
established to prove that the land is alienable and disposable.26
In this case, during the proceedings before the RTC, to prove the alienable and disposable character of the subject
land, the petitioners presented the DENR-NCR certification stating that the subject land was verified to be within the
alienable and disposable part of the public domain. This piece of evidence is insufficient to overcome the
presumption of State ownership. As already discussed, the present rule requires the presentation, not only of the
certification from the CENRO/PENRO, but also the submission of a copy of the original classification approved by
the DENR Secretary and certified as a true copy by the legal custodian of the official records.27

Likewise, the petitioners' claim of substantial compliance does not warrant approval of the application.

The rule on strict compliance enunciated in Republic of the Philippines v. T.A.N. Properties (T.A.N.
Properties)28 remains to be the governing rule in land registration cases. This rule was neither abandoned nor
modified by the subsequent pronouncements in Vega and Serrano as these latter cases were mere pro hac vice. In
fact, in Vega, the Court clarified that the ruling on substantial compliance applies pro hac vice and did not, in any
way, detract from the Court's ruling in T.A.N Properties and similar cases which impose a strict requirement to prove
that the land applied for registration is alienable and disposable.

Further, in Republic of the Philippines v. San Mateo (San Mateo), 29 the Court expounded on the reason behind the
subsequent decisions which granted applications for land registration on the basis of substantial compliance, viz.:

In Vega, the Court was mindful of the fact that the trial court rendered its decision on November 13, 2003, way
before the rule on strict compliance was laid down in T.A.N. Properties on June 26, 2008. Thus, the trial court was
merely applying the rule prevailing at the time, which was substantial compliance. Thus, even if the case reached
the Supreme Court after the promulgation of T.A.N. Properties, the Court allowed the application of substantial
compliance, because there was no opportunity for the registrant to comply with the Court's ruling in T.A.N.
Properties, the trial court and the CA already having decided the case prior to the promulgation of T.A.N.
Properties. 30 (Italics omitted)

From the foregoing, it is clear that substantial compliance may be applied, at the discretion of the courts, only if the
trial court rendered its decision on the application prior to June 26, 2008, the date of the promulgation of T.A.N.
Properties. In this case, the application for registration, which was filed on March 1, 2010, was granted by the RTC
only on July 30, 2012, or four (4) years after the promulgation of T.A.N. Properties. Evidently, the courts did not
have discretion to apply the rule on substantial compliance. Thus, the petitioners' reliance on Vega and Serrano, as
well as on Sta. Ana Victoria, which similarly appreciated substantial compliance, is clearly misplaced. Hence, the
petitioners failed to prove the first requisite for registration under Section 14(1).

Petitioners failed to prove possession and occupation of the subject land under a bona fide claim of ownership since
June 12, 1945 or earlier

As to the second and third requisites, the Court concurs with the appellate court that the petitioners failed to
establish that they and their predecessors-in-interest have been in open, continuous, exclusive, and notorious
possession and occupation of the subject land on or before June 12, 1945.

In this case, the petitioners presented several tax declarations in their names, the earliest of which dates back only
to 1970. This period of possession and occupation is clearly insufficient to give the petitioners the right to register
1âwphi1

the subject land in their names because the law requires that possession and occupation under a bona fide claim of
ownership should be since June 12, 1945 or earlier.

In a similar vein, the respective testimonies of petitioners Marietta, Oscar, and Conrado, Jr. were insufficient to
support their claim of possession and occupation of the subject land. The only relevant testimonies offered by the
petitioners were to the effect that they had known the subject land since they were children, as the same were
owned by their parents; that it was used as a fishpond during the rainy season and in their salt-making business
during the summer, which business, however, ceased operation in 2004; and that they could visit the subject land
whenever they wanted to, introduce improvements on it, and prevent intruders therefrom.

In Republic of the Philippines v. Remman Enterprises, Inc.,31 the Court held that for purposes of land registration
under Section 14(1) of P .D. No. 1529, proof of specific acts of ownership must be presented to substantiate the
claim of open, continuous, exclusive, and notorious possession and occupation of the land subject of the
application. Applicants for land registration cannot just offer general statements which are mere conclusions of law
rather than factual evidence of possession. Actual possession consists in the manifestation of acts of dominion over
it of such nature as a party would actually exercise over his own property. 32

In this case, the petitioners failed to sufficiently show that on or before June 12, 1945, they and their predecessors-
in-interest actually exercised acts of dominion over the subject land. Their assertion that they could visit the subject
land could not be considered an act of dominion which would vest upon them the right to own the subject land.
Likewise, their general claim that they could prevent any person from intruding thereto was unsubstantiated by any
evidence aside from their allegations.

Finally, assuming that the use of the land in salt-making and as a fishpond could be considered as a manifestation
of acts of dominion, the petitioners still failed to satisfy the requirements of the law for registration of the subject
land. Although the petitioners claim that they inherited the salt-making and fishpond businesses from their parents,
no mention was made when the aforesaid businesses actually started operation on the subject land. Thus, they
failed to demonstrate cultivation or use of the subject land since June 12, 1945 or earlier. Hence, the petitioners
failed to establish possession and occupation of the subject land under a bona fide claim of ownership within the
period required by law.

From the foregoing, the subject land cannot be registered in the name of the petitioners under Section 14(1) of P.D.
No. 1529 for their failure to prove its alienable and disposable character, and their possession and occupation from
June 12, 1945 or earlier.

Petitioners failed to comply with the requirements under Section 14(2) of P.D. No. 1529

Neither could the subject land be registered under Section 14(2), which reads:

(2) Those who have acquired ownership of private lands by prescription under the provision of existing laws.

In Heirs of Mario Malabanan v. Republic of the Philippines,33 the Court explained that when Section 14(2) of P.D. No.
1529 provides that persons "who have acquired ownership over private lands by prescription under the provisions of
existing laws," it unmistakably refers to the Civil Code as a valid basis for the registration of lands.

For registration under this provision to prosper, the applicant must establish the following requisites: (a) the land is
an alienable and disposable, and patrimonial property of the public domain; (b) the applicant and its predecessors-
in-interest have been in possession of the land for at least 10 years, in good faith and with just title, or for at least 30
years, regardless of good faith or just title; and (c) the land had already been converted to or declared as patrimonial
property of the State at the beginning of the said 10- year or 30-year period of possession.34

As regards the first and most important requisite, the Court has ruled that declaration of alienability and disposability
is not enough for the registration of land under Section 14(2) of P.D. No. 1529. There must be an express
declaration that the public dominion property is no longer intended for public service or the development of the
national wealth or that the property has been converted into patrimonial property.35 This is only logical because
acquisitive prescription could only run against private properties, which include patrimonial properties of the State,
but never against public properties.

Here, the petitioners failed to present any competent evidence which could show that the subject land had been
declared as part of the patrimonial property of the State. The DENR-NCR certification presented by the petitioners
only certified that the subject land was not needed for forest purposes. This is insufficient because the law mandates
that to be subjected to acquisitive prescription, there must be a declaration by the State that the land applied for is
no longer intended for public service or for the development of the national wealth pursuant to Article 422 of the Civil
Code. Clearly, the petitioners failed to prove that they acquired the subject land through acquisitive prescription.
Thus, the same could not be registered under Section 14(2) of P.D. No. 1529.

In fine, the petitioners failed to satisfy all the requisites for registration of title to land under either Sections 14(1) or
(2) of P.D. No. 1529. The CA's reversal of the July 30, 2012 RTC decision, and denial of the petitioners' application
for original registration of imperfect title over Lot No. 4178 must be affirmed.
WHEREFORE, the petition is DENIED. The March 20, 2015 Decision and June 18, 2015 Resolution of the Court of
Appeals in CA-G.R. CV No. 101002 are AFFIRMED. The petitioners' application for original registration of title of Lot
No. 4178 in LRC Case No. 10-0026 is DENIED, without prejudice.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 194818 June 9, 2014

CHARLES BUMAGAT, JULIAN BACUDIO, ROSARIO PADRE, SPOUSES ROGELIO and ZOSIMA PADRE, and
FELIPE DOMINCIL, Petitioners,
vs.
REGALADO ARRIBAY, Respondent.

DECISION

DEL CASTILLO, J.:

A case involving agricultural land does not immediately qualify it as an agrarian dispute. The mere fact that the land
is agricultural does not ipso facto make the possessor an agricultural lessee or tenant; there are conditions or
requisites before he can qualify as an agricultural lessee or tenant, and the subject matter being agricultural land
constitutes simply one condition. In order to qualify as an agrarian dispute, there must likewise exist a tenancy
relation between the parties.

This Petition for Review on Certiorari1 seeks to set aside the February 19, 2010 Decision2 of the Court of Appeals
(CA) in CA-G.R. SP No. 101423, entitled "Regalado Arribay, Petitioner, versus Charles Bumagat, Julian Bacudio,
Rosario Padre, Spouses Rogelio and Zosima Padre, and Felipe Domincil," as well as its November 9, 2010
Resolution3 denying reconsideration of the assailed judgment.

Factual Antecedents

Petitioners are the registered owners, successors-in-interest, or possessors of agricultural land, consisting of about
eight hectares, located in Bubog, Sto. Tomas, Isabela Province, to wit:

1. Charles Bumagat (Bumagat) – 14,585 square meters covered by Transfer Certificate of Title No. (TCT)
014557;4

2. Julian Bacudio (Bacudio) – 14,797 square meters covered by TCT 014556;5

3. Rosario Padre – 14,974 square meters covered by TCT 0145546 in the name of Dionicio Padre;7

4. Spouses Rogelio and Zosima Padre – 6,578 square meters covered by TCT 0145618 in the name of
Ireneo Padre;9

5. Spouses Rogelio and Zosima Padre – 6,832 square meters covered by TCT 014560 in the name of their
predecessor-in-interest Felix Pacis;10

6. Felipe Domincil – 14,667 square meters covered by TCT 014558;11 and

7. Felipe Domincil – 7,319 square meters.12

The certificates of title to the above titled properties were issued in 1986 pursuant to emancipation patents.13

On July 19, 2005, petitioners filed a Complaint14 for forcible entry against respondent before the 2nd Municipal
Circuit Trial Court (MCTC) of Cabagan-Delfin Albano, Isabela. The case was docketed as Special Civil Action No.
475 (SCA 475). In an Amended Complaint,15 petitioners alleged that on May 9, 2005, respondent – with the aid of
armed goons, and through the use of intimidation and threats of physical harm – entered the above-described
parcels of land and ousted them from their lawful possession; that respondent then took over the physical
possession and cultivation of these parcels of land; and that petitioners incurred losses and injuries by way of lost
harvests and other damages. Petitioners thus prayed for injunctive relief, actual damages in the amount of not less
than ₱40,000.00 for each cropping season lost, ₱30,000.00attorney’s fees, and costs.

Respondent filed a Motion to Dismiss,16 claiming that the subject properties are agricultural lands – which thus
renders the dispute an agrarian matter and subject to the exclusive jurisdiction of the Department of Agrarian
Reform Adjudication Board (DARAB). However, in a January 30, 2006 Order,17 the MCTC denied the motion, finding
that the pleadings failed to show the existence of a tenancy or agrarian relationship between the parties that would
bring their dispute within the jurisdiction of the DARAB. Respondent’s motion for reconsideration was similarly
rebuffed.18

Respondent filed his Amended Answer with Counterclaim,19 alleging among others that petitioners’ titles have been
ordered cancelled in a December 1, 2001 Resolution20 issued by the Department of Agrarian Reform, Region 2 in
Administrative Case No. A0200 0028 94; that he is the absolute owner of approximately 3.5 hectares of the subject
parcels of land, and is the administrator and overseer of the remaining portion thereof, which belongs to his
principals Leonardo and Evangeline Taggueg (the Tagguegs); that petitioners abandoned the subject properties in
1993, and he planted the same with corn; that in 2004, he planted the land to rice; that he sued petitioners before
the Municipal Agrarian Reform Office (MARO) for non-payment of rentals since 1995; and that the court has no
jurisdiction over the ejectment case, which is an agrarian controversy.

The parties submitted their respective Position Papers and other evidence.21

During the proceedings before the MCTC, respondent presented certificates of title, supposedly issued in his name
and in the name of the Tagguegs in 2001, which came as a result of the supposed directive in Administrative Case
No. A0200 0028 94 to cancel petitioners’ titles. As claimed by respondent, the subject parcels of land formed part of
a 23.663-hectare property owned by one Romulo Taggueg, Sr. (Romulo Sr.) and covered by Original Certificate of
Title No. (OCT) P-4835, which was placed under the Operation Land Transfer Program pursuant to Presidential
Decree No. 2722 (PD 27). Petitioners supposedly became farmer-beneficiaries under the program, and the parcels of
land were awarded to them.

Meanwhile, Romulo Sr. died and his heirs instituted Administrative Case No. A0200 0028 94 to cancel petitioners’
titles. The heirs won the case, and later on new titles over the property were issued in their favor. In turn, one of the
heirs transferred his title in favor of respondent.

Ruling of the Municipal Circuit Trial Court

On April 12, 2007, a Decision23 was rendered by the MCTC in SCA 475, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendant as follows:

1. Ordering the defendant or any person or persons acting in his behalf to vacate the entire SEVENTY NINE
THOUSAND SEVEN HUNDRED FIFTY TWO (79,752)[-]SQUARE METERS, property described under
paragraph 2 of the amended complaint and to peacefully surrender the physical possession thereof in favor
of each of the plaintiffs;

2. Ordering the defendant to pay each of the plaintiffs representing actual damages as follows:

o Charles Bumagat …………………... ₱109,390.00

o Julian Bacudio …………………….... ₱110,980.00

o Rosario Padre ……………………… ₱112,305.00

o Sps. Rogelio and ZosimaPadre ..... ₱100,575.00

o Felipe Domincil …………………..… ₱165,429.00

 3. Ordering the defendant to pay plaintiffs representing the Attorney’s fees in the amount of ₱10,000.00.

4. Ordering the defendant to pay costs of the suit.

SO ORDERED.24

Essentially, the MCTC held that based on the evidence, petitioners were in actual possession of the subject parcels
of land, since respondent himself admitted that he brought an action against petitioners before the MARO to collect
rentals which have remained unpaid since 1995 – thus implying that petitioners, and not respondent, were in actual
possession of the land, and belying respondent’s claim that he took possession of the property in 1993 when
petitioners supposedly abandoned the same. The court added that petitioners’ claims were corroborated by the
statements of other witnesses – farmers of the adjoining lands – declaring that petitioners have been in unmolested
and peaceful possession of the subject property until May 9, 2005,when they were dispossessed by respondent.

The MCTC added that it had jurisdiction over the case since there is no tenancy relationship between the parties,
and the pleadings do not allege such fact; that respondent’s own witnesses declared that the subject property was
never tenanted nor under lease to tenants.

Finally, the MCTC held that while respondent and his principals, the Tagguegs, have been issued titles covering the
subject property, this cannot give respondent "license to take the law into his own hands and unilaterally eject the
plaintiffs from the land they have been tilling."25

Ruling of the Regional Trial Court

Respondent appealed26 the MCTC Decision before the Regional Trial Court (RTC), insisting that the DARAB has
jurisdiction over the case; that he has been in actual possession of the subject land since 2003; that while
petitioners hold certificates of title to the property, they never acquired ownership over the same for failure to pay
just compensation therefor; that petitioners’ titles have been ordered cancelled, and they reverted to the status of
mere tenants; and that the MCTC erred in granting pecuniary awards to petitioners.

On October 15, 2007, the RTC issued its Order27 denying the appeal for lack of merit and affirming in toto the
appealed MCTC judgment. In sum, the RTC pronouncement echoed the MCTC findings that no tenancy or any
other agrarian relationship existed between the parties, nor do the pleadings bear out such fact; that the evidence
preponderantly shows that petitioners were in actual possession of the subject land; and that petitioners were
entitled to compensation as awarded by the court a quo.

Ruling of the Court of Appeals

Respondent went up to the CA by Petition for Review,28 assailing the Decision of the RTC and claiming that since
petitioners acquired title by virtue of PD 27, this should by itself qualify the controversy as an agrarian dispute
covered by the DARAB; that there is no need to allege in the pleadings that he and the heirs of Romulo Sr. acquired
title to the property, in order for the dispute to qualify as an agrarian dispute; that petitioners’ titles were ordered
cancelled in Administrative Case No. A0200 0028 94; that he has been in possession of the property since 2003;
and that the trial court erred in granting pecuniary awards to petitioners.

On February 19, 2010, the CA issued the assailed Decision, which held thus:

IN VIEW WHEREOF, the petition is GRANTED. The assailed Order of the Regional Trial Court of Cabagan, Isabela,
Branch 22, dated October 15, 2007, affirming in toto the previous Decision of the MCTC of Cabagan-Sto. Tomas,
Isabela is hereby REVERSED and SET ASIDE. Civil Case No. 475, entitled "Charles Bumagat, Julian Bacudio,
Rosario Padre, Sps. Rogelio and Zosima Padre and Felipe Domincil versus Regalado Arribay" is DISMISSED.

SO ORDERED.29

In reversing the trial court, the CA agreed that the parties’ dispute fell under the jurisdiction of the DARAB since
petitioners’ titles were obtained pursuant to PD 27, and under the 1994 DARAB rules of procedure, cases involving
the issuance, correction and cancellation of Certificates of Land Ownership Award (CLOAs) and Emancipation
Patents (EPs) which are registered with the Land Registration Authority fall under DARAB jurisdiction. 30 The
appellate court added that the Complaint for ejectment attacked the certificates of title issued in favor of respondent
and the Tagguegs because the complaint prayed for –

x x x the annulment of the coverage of the disputed property within the Land Reform Law which is but an incident
involving the implementation of the CARP. These are matters relating to terms and conditions of transfer of
ownership from landlord to agrarian reform beneficiaries over which DARAB has primary and exclusive original
jurisdiction, pursuant to Section 1(f), Rule II, DARAB New Rules of Procedure.31

Petitioners moved for reconsideration, but in a November 9, 2010 Resolution, the CA stood its ground. Hence, the
present recourse.

Issue

Petitioners raise the following issue in this Petition:

WITH ALL DUE RESPECT, THE COURT OF APPEALS ERRED WHEN IT RULED THAT THE MCTC HAD NO
JURISDICTION OVER THE COMPLAINT OF THE (PETITIONERS), INSTEAD IT IS THE DARAB THAT HAS
JURISDICTION, SINCE THE COMPLAINT ESSENTIALLY PRAYS FOR THE ANNULMENT OFTHE COVERAGE
OF THE DISPUTED PROPERTY WITH THE LAND REFORM LAW WHICH IS BUT AN INCIDENT INVOLVING
THE IMPLEMENTATION OF THE CARP.32

Petitioners’ Arguments

In their Petition and Reply,33 petitioners seek a reversal of the assailed CA dispositions and the reinstatement of the
MCTC’s April 12, 2007 Decision, arguing that their Complaint for ejectment simply prays for the recovery of de facto
possession from respondent, who through force, threat and intimidation evicted them from the property; that there is
no agrarian reform issue presented therein; that the fact that the controversy involved agricultural land does not ipso
facto make it an agrarian dispute; that the parties’ dispute does not relate to any tenurial arrangement over
agricultural land; and that quite the contrary, the parties are strangers to each other and are not bound by any
tenurial relationship, whether by tenancy, leasehold, stewardship, or otherwise.34

Petitioners add that when certificates of title were issued in their favor, they ceased to be tenant-tillers of the land
but became owners thereof; that full ownership over the property was acquired when emancipation patents were
issued in their favor;35 that when their certificates of title were issued, the application of the agrarian laws was
consummated; and that as owners of the subject property, they were thus in peaceful and adverse physical
possession thereof when respondent ousted them by force, threat and intimidation. Petitioners argue further that
respondent is not the former landowner, nor the representative thereof; he is merely an absolute stranger who came
into the picture only later.

Finally, petitioners argue that it was erroneous for the CA to rule that in seeking to evict respondent, they were in
effect mounting an attack on the latter’s title and thus their Complaint in effect sought the "the annulment of the
coverage of the disputed property within the Land Reform Law which is but an incident involving the implementation
of the CARP,"36 which thus relates to "terms and conditions of transfer of ownership from landlord to agrarian reform
beneficiaries over which DARAB has primary and exclusive original jurisdiction x x x."37

Respondent’s Arguments

Seeking the denial of the Petition, respondent in his Comment38 insists that the ejectment case is intertwined with the
CARP Law,39 since petitioners’ titles were obtained by virtue of the agrarian laws, which thus places the controversy
within the jurisdiction of the DARAB; that under the 2003 DARAB Rules of Procedure, specifically Rule II, Section 1,
paragraph 1.440 thereof, cases involving the ejectment and dispossession of tenants and/or leaseholders fall within
the jurisdiction of the DARAB; that under such rule, the one who ejects or dispossesses the tenant need not be the
landowner or lessor, and could thus be anybody, including one who has no tenurial arrangement with the
evicted/dispossessed tenant.
Respondent adds that with the cancellation of petitioners’ titles, they were directed to enter into a leasehold
relationship with the owners of the subject parcels of land, or the heirs of Romulo Sr. – whose petition for exemption
and application for retention were granted and approved by the Department of Agrarian Reform, Region 2 in
Administrative Case No. A0200 0028 94 – and later, with him as transferor and purchaser of a 3.5-hectare portion
thereof.

Our Ruling

The Court grants the Petition.

In declaring that the parties’ dispute fell under the jurisdiction of the DARAB, the CA held that respondents’ titles
were obtained pursuant to PD 27, and pursuant to the 1994 DARAB rules of procedure then applicable, cases
involving the issuance, correction and cancellation of CLOAs and EPs which are registered with the Land
Registration Authority fall under DARAB jurisdiction. It added that since the Complaint prayed for the annulment of
the coverage of the disputed property under the land reform law, which thus relates to terms and conditions of
transfer of ownership from landlord to agrarian reform beneficiaries, the DARAB exercises jurisdiction.

What the appellate court failed to realize, however, is the fact that as between petitioners and the respondent, there
is no tenurial arrangement, not even an implied one. As correctly argued by petitioners, a case involving agricultural
land does not immediately qualify it as an agrarian dispute. The mere fact that the land is agricultural does not ipso
facto make the possessor an agricultural lessee or tenant. There are conditions or requisites before he can qualify
as an agricultural lessee or tenant, and the subject being agricultural land constitutes just one condition.41 For the
DARAB to acquire jurisdiction over the case, there must exist a tenancy relation between the parties. "[I]n order for a
tenancy agreement to take hold over a dispute, it is essential to establish all its indispensable elements, to wit: 1)
that the parties are the landowner and the tenant or agricultural lessee; 2) that the subject matter of the relationship
is an agricultural land; 3) that there is consent between the parties to the relationship; 4) that the purpose of the
relationship is to bring about agricultural production; 5) that there is personal cultivation on the part of the tenant or
agricultural lessee; and 6) that the harvest is shared between the landowner and the tenant or agricultural
lessee."42 In the present case, it is quite evident that not all of these conditions are present. For one, there is no
tenant, as both parties claim ownership over the property.

Besides, when petitioners obtained their emancipation patents and subsequently their certificates of title, they
acquired vested rights of absolute ownership over their respective landholdings. "It presupposes that the grantee or
beneficiary has, following the issuance of a certificate of land transfer, already complied with all the preconditions
required under P.D. No. 27, and that the landowner has been fully compensated for his property. And upon the
issuance of title, the grantee becomes the owner of the landholding and he thereby ceases to be a mere tenant or
lessee. His right of ownership, once vested, becomes fixed and established and is no longer open to doubt or
controversy."43 Petitioners "became the owner[s] of the subject property upon the issuance of the emancipation
patents and, as such, [enjoy] the right to possess the same—a right that is an attribute of absolute ownership."44

On the other hand, it appears that respondent obtained title through Romulo Sr.’s heirs, whose claim to the property
is by virtue of an unregistered deed of donation in their favor supposedly executed prior to September 21, 1972. On
this basis, the heirs filed in 1993 a petition with the Department of Agrarian Reform, Region 2 to exempt the property
from coverage under PD 27, which was granted in a December 29, 1994 Order.45 By then, or way back in 1986
petitioners had been issued certificates of title thus, respondent’s acquisition of the property appears questionable,
considering the Court’s pronouncement in Gonzales v. Court of Appeals,46 thus:

The sole issue to be resolved is whether the property subject of the deed of donation which was not registered when
P.D. No. 27 took effect, should be excluded from x x x Operation Land Transfer.

Petitioners insist that the deed of donation executed by Ignacio Gonzales validly transferred the ownership and
possession of Lot 551-C which comprises an area of 46.97 hectares to his 14 grandchildren. They further assert that
inasmuch as Lot 551-C had already been donated, the same can no longer fall within the purview of P.D.No. 27,
since each donee shall have a share of about three hectares only which is within the exemption limit of seven
hectares for each landowner provided under P.D. No. 27.

Article 749 of the Civil Code provides inter alia that "in order that the donation of an immovable may be valid, it must
be made in a public document, specifying therein the property donated and the value of the charges which the
donee must satisfy." Corollarily, Article 709 of the same Code explicitly states that "the titles of ownership, or other
rights over immovable property, which are not duly inscribed or annotated in the Registry of property shall not
prejudice third persons." From the foregoing provisions, it may be inferred that as between the parties to a donation
of an immovable property, all that is required is for said donation to be contained in a public document. Registration
is not necessary for it to be considered valid and effective. However, in order to bind third persons, the donation
must be registered in the Registry of Property (now Registry of Land Titles and Deeds). Although the non-
registration of a deed of donation shall not affect its validity, the necessity of registration comes into play when the
rights of third persons are affected, as in the case at bar.

It is actually the act of registration that operates to convey registered land or affect title thereto. Thus, Section 50 of
Act No. 496 (Land Registration Act), as amended by Section 51 of P.D. No. 1529 (Property Registration Decree),
provides:

SEC. 51. Conveyance and other dealings by registered owner - . . . But no deed, mortgage, lease, or other voluntary
instrument, except a will purporting to convey or affect registered land, shall take effect as a conveyance or bind the
land, but shall operate only as a contract between the parties and as evidence of authority to the Register of Deeds
to make registration.

The act of registration shall be the operative act to convey or affect the land insofar as third persons are concerned,
...

Further, it is an entrenched doctrine in our jurisdiction that registration in a public registry creates constructive notice
to the whole world (Olizon vs. Court of Appeals, 236 SCRA 148 [1994]). Thus, Section 51 of Act No. 496, as
amended by Section 52 of P.D. No. 1529, provides:

SEC. 52. Constructive notice upon registration - Every conveyance, mortgage, lease, lien, attachment, order,
judgment, instrument or entry affecting registered land shall, if registered, filed or entered in the Office of the
Register of Deeds for the province or city where the land to which it relates lies, be constructive notice to all persons
from the time of such registering, filing or entering.

It is undisputed in this case that the donation executed by Ignacio Gonzales in favor of his grandchildren, although in
writing and duly notarized, has not been registered in accordance with law. For this reason, it shall not be binding
upon private respondents who did not participate in said deed or had no actual knowledge thereof. Hence, while the
deed of donation is valid between the donor and the donees, such deed, however, did not bind the tenants-farmers
who were not parties to the donation. As previously enunciated by this Court, non-registration of a deed of donation
does not bind other parties ignorant of a previous transaction (Sales vs. Court of Appeals, 211 SCRA 858 [1992]).
So it is of no moment that the right of the [tenant]-farmers in this case was created by virtue of a decree or law. They
are still considered "third persons" contemplated in our laws on registration, for the fact remains that these [tenant]-
farmers had no actual knowledge of the deed of donation.

xxxx

As a final note, our laws on agrarian reform were enacted primarily because of the realization that there is an urgent
need to alleviate the lives of the vast number of poor farmers in our country. Yet, despite such laws, the majority of
these farmers still live on a hand-to-mouth existence. This can be attributed to the fact that these agrarian laws have
never really been effectively implemented. Certain individuals have continued to prey on the disadvantaged, and as
a result, the farmers who are intended to be protected and uplifted by the said laws find themselves back in their
previous plight or even in a more distressing situation. This Court ought to be an instrument in achieving a dignified
existence for these farmers free from pernicious restraints and practices, and there’s no better time to do it than
now.47

When petitioners’ titles were issued in 1986, these became indefeasible and incontrovertible. Certificates of title
issued pursuant to emancipation patents acquire the same protection accorded to other titles, and become
indefeasible and incontrovertible upon the expiration of one year from the date of the issuance of the order for the
issuance of the patent. Lands so titled may no longer be the subject matter of a cadastral proceeding; nor can they
be decreed to other individuals.48 "The rule in this jurisdiction, regarding public land patents and the character of the
certificate of title that may be issued by virtue thereof, is that where land is granted by the government to a private
individual, the corresponding patent therefor is recorded, and the certificate of title is issued to the grantee;
thereafter, the land is automatically brought within the operation of the Land Registration Act, the title issued to the
grantee becoming entitled to all the safeguards provided in Section 38 of the said Act. In other words, upon
expiration of one year from its issuance, the certificate of title shall become irrevocable and indefeasible like a
certificate issued in a registration proceeding."49

For the above reasons, the Court is not inclined to believe respondent’s contention that with the issuance of the
December 29, 1994 Order of the Department of Agrarian Reform, Region 2 in Administrative Case No. A0200 0028
94 ordering the cancellation of petitioners’ titles, the latter were relegated to the status of mere tenants. Nor can the
Court agree with the appellate court’s observation that through the forcible entry case, petitioners impliedly seek to
exclude the property from land reform coverage; there is no factual or legal basis for such conclusion, and no such
inference could be logically generated. To begin with, petitioners acknowledge nothing less than ownership over
1âwphi 1

the property.

Likewise, for the foregoing reasons, it may be concluded that petitioners exercised prior peaceful and uninterrupted
possession of the property until the same was interrupted by respondent’s forcible intrusion in 2005; being farmer
beneficiaries under PD 27 and finally having acquired title to the property in 1986, the Court is inclined to believe
that petitioners continued to till their landholdings without fail. Indeed, the evidence on record indicates such
peaceful and undisturbed possession, while respondent’s claim that he entered the property as early as in 1993
remains doubtful, in light of his own admission that he sued petitioners for the collection of supposed rentals which
they owed him since 1995. Petitioners’ witnesses further corroborate their claim of prior peaceful possession. With
regard to the portion of the property which is not titled to petitioners but over which they exercise possessory rights,
respondent has not sufficiently shown that he has any preferential right to the same either; the Court adheres to the
identical findings of fact of the MCTC and RTC.

Finally, respondent’s submissions are unreliable for being contradictory. In some of his pleadings, he claims to have
acquired possession over the property as early as in 1993; in others, he declares that he entered the land in 2003.
Notably, while he claimed in his Answer in the MCTC that he entered the land in 1993, he declared in his appeal
with the RTC and Petition for Review in the CA that he took possession of the property only in 2003.50 Irreconcilable
and unexplained contradictions on vital points in respondent’s account necessarily disclose a weakness in his
case.51

Regarding the award of actual damages, which respondent prominently questioned all throughout the proceedings,
this Court finds that there is sufficient basis for the MCTC to award petitioners the total amount of ₱598,679.00 by
way of actual damages. The trial court’s findings on this score are based on the evidence presented by the
petitioners and the respective statements of their witnesses, who themselves are farmers cultivating lands adjacent
to the subject property.52

WHEREFORE, the Petition is GRANTED. The assailed February 19, 2010 Decision and November 9, 2010
Resolution of the Court of Appeals in CAG.R. SP No. 101423 are REVERSED and SET ASIDE. The April 12, 2007
Decision of the 2nd Municipal Circuit Trial Court of Cabagan-Delfin Albano, Isabela in Special Civil Action No. 475 is
REINSTATED and AFFIRMED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-12464 August 20, 1918

MARIANO DE LOS REYES, plaintiff-appelle,

vs.
PABLO RAZON, ET AL., defendants-appellants.

Pedro N. Liongson for appellants.

M. Buyson Lampa for appellee.

FISHER, J.:

This is an appeal from a judgment in favor of plaintiff in an action of ejectment. Defendants excepted, moved
unsuccessfully for a new trial excepted to the order denying their motion, and removed the case to this court by bill
of exceptions.

It is averred in the amended complaint that plaintiff is the owner of the land in question, and that he has been
unlawfully deprived of its possession by defendant. These averments are denied by the answer and it is alleged on
behalf of the defendant Liongson that the is the lawful relies was obtained by deceit an in fraud of the true owner of
the property.

As proof of his title to the land her in dispute plaintiff offered in evidence a certificate of title issued by the register of
deeds of the Province of Tarlac pursuant to section 122 of the Land Registration Act and chapter one of Act No.
926, and the acts supplemental thereto, governing the homesteading patent to the tract of land described in his
complaint It was admitted in open court that plaintiffs witness would testify that the defendant took possession of the
land in question in May 1915, and continue to be in possession thereof; and that the annual revenue from the land is
P250.

Plaintiff then rested. Defendants offered in evidence a registered possessory information, issued in 1895 to one
Juan Ysais, and which it is contended, by defendant, included in the larger tract therein described, the land
described in plaintiffs homestead patent. They also offered documentary proof tending to show that the rights of
Ysais to the land had been conveyed to the., Defendants then sought to prove by the testimony of witnesses that
plaintiff had been in possession of the land during the proceedings of the homestead patent as a mere tenant of
defendants grantors, and had obtained the patent surreptitiously and in fraud of defendants grantors. This evidence
was rejected by the trial court upon the ground that the certificate of title was conclusive proof of the ownership of
the land and that no evidence, oral or documentary tending to show tittle in any other person than the registered
owner was admissible.

It will be noted that one of the averments of the special defense set up by the answer is that the title upon which
plaintiff relies was obtained by deceit, in fraud of the true owner of the land. The case, therefore, squarely presents
the issue as to whether such a certificate of title as that upon which plaintiff relies is as incontestable as are those
based upon decrees of the Court of Land Registration or of the Court of First Instance rendered in land registration
cases.

It is settled conclusively in this jurisdiction that the titles by virtue of final decrees of the Court of Land Registration or
of the Courts of First Instance in accordance with the provisions of the Land Registration Act are conclusive and
binding upon all the world. but the proceedings by which the title to land are determined in the courts under the act
are judicial. Process is served by publication upon all persons y have an interest in the land, and they are given an
opportunity to appear and oppose the petition for registration if they desire to do so. The action is one in rem, and
the court acquired jurisdiction over the res by the service of its process in the manner prescribed by the statute.
(Tyler vs. Court of Registration, 175 Mass. 71; City of Manila vs. Lack, 19 Phil. Rep., 324; Grey Alba vs. De la Cruz,
17 Phil. Rep., 49; Legarda and Prieto vs. Saleeby, 31 Phil. Rep., 590; American Land Co. vs. Zeiss, 219 U. S., 47)
The proceedings by which titles to portions of the public domain are granted to homesteader in accordance with the
provisions of the Public Land Act, on the contrary, are purely administrative.

Assuming that the statements of the application for a homestead are false and that the land to which he is
endeavoring to obtain is not in fact unoccupied public land, but is the private property of some other person, are the
rights of the lawful owner of the land divested by the issuance and registration of the patent if he fails to appear
before the Director of Lands to contest the issuance of the patent?

The provisions of the Public Land Act which pertain to the matter now under consideration are to be found in section
2,23,4,5, a6, 7, and 8 Section 2 requires the Director of Lands, upon receipt of a homestead application to
Summarily determine, by inquiry of the Chief of the Bureau of Forestry, and from the available land records, whether
the land described is prima facie, subject under the law to contrary, the application . . . shall be permitted to enter
the quantity of land specified. Section 3 provides that in not less than five nor more than eight years from the date of
the filing of the application the application may make proof, by two credible witnesses, that he has resided upon and
cultivated the land for the term of five years immediately succeeding the application. Section 5 authorizes and
requires the Director of Lands to cancel the homestead that the land entered is not under the law subject to
homestead entry . . . and the land thereupon shall become subject to disposition as other public lands of like
character. Section 7 and 8 are as follows:

SEC. 7. Before the final proof shall be submitted by any person claiming to have complied with the
provisions of this chapter due notice, as prescribed by the Chief of the Bureau of Public Lands, with the
approval of the Secretary of the Interior, shall be given to the public of his intention to make such proof ,
stating therein the time and place, and giving a description of the land and the names of the witnesses by
whom it is expected that the necessary facts will be established.

SEC. 8. Any person may file an affidavit of contest against any homestead entry, charging that the land
entered was not unoccupied, unreserved, or unapproriated agricultural land at the time of filing the
application, alleging disqualification of the entryman, noncompliance with law as to residence or cultivation,
to any other matter which, if proven, would be jut cause for the cancellation of the entry, and upon
successful termination of the contest, the contestant, if a qualified entryman, shall e allowed a preference
right of entry for sixty days from said date.

The Chief of the Bureau of Public Lands or any public officials becoming aware of the existence of any of the
grounds above cited, for impeaching or cancelling the entry, may file formal complaint against the entry of
any such ground which, if proven, shall cause the cancellation of the entry.

It will be observed that, while provision is made for notice to the public of the intention of the homesteader to apply
for a patent upon final proof of occupation and cultivation of the land, and for the hearing of objections to the
application upon various grounds, including the contention that the land in question was not unoccupied at the time
of filing the application, the statue nowhere undertakes to declare that the decision of the Director upon such contest
shall be conclusive, or that he failure of the rel owner to contest the application shall have the effect of forfeiting his
title by making the directors decisions as to the public character of the land final an conclusive. The provisions of the
Public Land Act in this respect are similar to those by which title to the public domain in he United States is granted
to settlers. But is has never been held that he proceedings in the United States Land Office which lead up to the
issuance of a patent have the effect of divesting prior valid titles. On the contrary, it has been expressly decided that
they have no such effect. In the Supreme Court of the United States said:

It has been repeatedly held by this court that a patent is void which attempts to convey lands that have been
"previously granted, reserved from sale or appropriated." (Stoddard vs. Chambers, 2 How., 284; U. S. vs.
Arrendondo, 6 Pet., 728; Reichart vs, Felps, 6 Wall., 160; 73 U. S., XVIII, 849.) "It would be a dangerous
doctrine (says the court in New Orleans vs. U. S., 10 Pet., 731) to consider the issuing of a grant as
conclusive evidence of right in the power which issued it. On its face it is conclusive, and cannot be
controverted; but, if the thing granted was not in the grantor no right passes to the grantee. A grant has been
frequently issued by the United States for land which had been previously granted, and the second grant
has been held to be inoperative."

In the case of Northern Pac. Ra. Co. vs. McCormick The Circuit Court of Appeals for the Ninth Circuit said:
 The decisions in the land department in contested cases are conclusive only as to matters of fact which
come within their jurisdiction, and a patent is not evidence of title to land which was not subject to disposition
by the United State. (Barden vs. Railroad Co., 154 U. S., 327; 14 Sup. Ct., 1030; Best vs. Polk, 18 Wall.,
112; Morton vs. Nebraska, 21 Wall., 660; Sherman vs. Buick, 93 U. S., 209; Wright vs. Roseberry, 121 U.
S., 488; 7 Sup. Ct., 985; Mining Co. vs. Campbell, 135 U. S., 286; 10 Sup. Ct., 765.)

The same opinion is again clearly enunciated in the recent cases of Wright vs. Roseberry (121 U. S., 488, 519), and
Davis vs. Wiebbold ( 139 U. S., 507, 529). In Wright vs. Roseberry, supra, the court said:

The doctrine that all presumptions are to be indulged in support of proceedings upon which a patent is
issued, and which is not open to collateral attack in nation of ejectment, has no application where it is shown
that the land in controversy had, be fore initiation of the proceedings upon which the patent was issued,
passed from the United States. The previous transfer is a fact which may be established in an action at law
as well as in a suit in equity. As we said in Smelting Co. vs. Kempt (104 U. S., 641 [26; 876]. "When we
speak of conclusive presumptions attending a patent for lands, we assume that it was issued in a case
where the department had jurisdiction to act and execute it; that is to say, in a case where the land belonged
to the United States and provision has been made by law of their sale. If they never were public property, or
had previously been disposed of, or if Congress had made no provision for their sale, or had reserve them,
the department would have no jurisdiction to transfer them, and its attempted conveyance of them would be
inoperative and void, no matter with what seeming regularity the forms of law may have been observed. The
action f the department would, in that event, be like that of any other special tribunal not having jurisdiction
of a case which it had assumed to decide. Matters of this kind, disclosing a want of jurisdiction, may be
considered by a court of law. In such cases the objection of the patent reaches beyond the action of the
special tribunal, and goes to the existence of a subject upon which it was competent to act."

And again, in the same case, we said (p. 646): " A patent may be collaterally impeached in any action, and
its operation as a conveyance defeated, by showing that the department had no jurisdiction to dispose of the
lands; that is, that the law did not provide for selling the, or that they had been reserved from sale or
dedicated to special purposes, or had been previously transfered to others. In establishing any of these
particulars the judgment of the department upon matters properly before it is not assailed, nor is the
irregularity of its proceedings called into question; but its authority to act all id denied, and shown never to
have existed."

"There are cases, said Chief Justice Marshall, in which a grant is absolutely void; as when the State has no
title to the thing granted, or when the officer had no authority to issued the grant. In such case the validity of
the grant is necessarily examinable at law." (Polk lessee vs. Wendal, 13 U. S., 85; 9 Cranch, 87, 99 [3; 665,
669]). Indeed, it may be said to be common knowledge that patents of the United States for lands which they
had previously granted, reserved for sale, or appropriated are void. (Easton vs. Salisbury, 62 U. S., 426; 21
How., 426 [16; 181]; Reichert vs. Felps, 73 U. S., 160-166; Wall., 160 [18; 849]; Best vs. Polk, 85 U. S., 112-
120; 18 Wall., 112 [21; 805]). It would be a most extraordinary doctrine if the holder of a conveyance of land
a state were precluded from establishing his title simply because the United States may have subsequently
conveyed the Land to another, and especially from showing that years before they had granted the property
from showing that years before they had granted the property to the State, and thus were without title at the
time of their subsequent conveyance. As this court said in New Orleans vs. United States (10 Pet., 663,
731): "It would be a dangerous doctrine to consider the issuing of a grant as dangerous evidence of right in
the power which issued it. On its face it is conclusive, and cannot controverted; but if the thing granted was
not in the grantor, no right passes to the grantee. A grant has been frequently issued by the United States
for land which had been previously granted, and the second has been held to be inoperative."

In Davis vs. Wiebbold, supra, the Supreme Court emphatically reiterated its former statements of the rule, saying:

We agree to all that is urged by counsel as to the conclusiveness of the patents of the land department
when assailed collaterally in actions at law. We have had occasion to asset their unassailability in such
cases in the strongest terms both in St. Louis etc. Co. vs. Kempt. (104 U. S., 636, 640-646), and in Steel vs.
St. Louis Smelting, etc., Co. (106 U. S., 447, 451, 452). They are conclusive in such actions of all matters of
fact necessary to their issue, where the department had jurisdiction to act upon such matters, and to
determine them; but if the lands previously disposed, of or no provision had been made for their sale, or
other disposition, or they had been reserve from sale, the department had no jurisdiction to transfer the land,
 and their attempted conveyance by patent is inoperative and void, and no matter with what seeming
regularity the forms of law have been observed.

There being nothing in the Public Land Act to indicate that it was the purpose of the Legislature to vest the Director
of Lands with authority to divest valid outstanding private titles by his decision that the land embraced within the
homestead application is public, and that a patent should issue to the patentee, what reasons are there to support
the conclusions that a patent issued by the Director of Lands here has any greater effect than a patent issued by the
Land Office in the United Sates? As we have seen, it is unquestionable that in the Unites States the patentee gets a
good title if the land was really part of the public domain, and therefore subject to disposal by the Government but
that, on the contrary, if it transpires that the Government had no title to the land when the patent was issued, no title
to the land when the issuance of the patent. The procedure under our Public Land Law being substantially the same
as that prescribed by similar statutes in the United States, and the purpose being identical, the conclusion is
irresistible that the grantee of such a patent, up to the time of its execution by the Government-General, is in no
better position than is the holder of such a patent in the United States, and that if the land to which the patent relates
was not in fact public, but was the property of third person, the rights of that person have not been divested or
affected.

When a patent to public land in the United States is signed on behalf of the Government by the official authorized by
the statute to do so, it is delivered to the patentee, and the legal title to the land, so far as it was subject to
disposition by the Government, vests in the grantee from the date of the execution of the patent, and he is entitled to
have the patent delivered to him. But the Philippine Public Land Law (sec. 73. Act No. 926; sec. 122, Act No. 496)
directs that the patent, after execution shall not be delivered by the Governor-General to the patentee, but shall be
delivered to the register of deeds of the province where the land lies, and section 122 of the Land Registration Act
(No. 496) makes it the duty of that official to register the patent "like other deeds" and to issue to the patentee a
duplicate certificate of the entry in the register. It is declared that the act of registration, not the issuance of the
patent shall be the operative act to convey and affect the land . . . and that upon the registration of the patent and
the issuance of the duplicate certificate of title to patentee, "such land shall be registered land for all purposes under
this Act."

The full text of this section of the Land Registration Act is as follows:

SEC. 122. When ever public lands in the Philippine Islands belonging to the Government of the United
States or to the Government of the Philippine Islands are alienated, granted, or conveyed to persons or to
public or private corporations the same shall be brought forthwith under the operation of this Act and shall
become registered lands. It shall be the duty of the official issuing the instrument of alienation, grant, or
conveyance in behalf of the Government to cause such instrument, before its delivery to the grantee, to be
filed with register of deeds for the province where the land lies and to be there registered like other deeds
and conveyance es, whereupon a certificate shall be entered as in other cases of registered land, and an
owner's duplicate certificate issued to the grantee. The deed, grant or instrument of conveyance from the
Government shall not take effect as conveyance or bind the land, but shall operate only as a contract
between the Government and the grantee and as evidence of authority to the clerk or register of deeds to
make registration. The act of registration shall be the operative act to convey and affect the lands and in all
cases under this Act registration shall be made in the office of the register of deeds for the province where
the land lies. After due registration and issue of the certificate and owner's duplicate such land shall be
registered land for all purposes under this Act.

The trial judge was of the opinion, and so held, that the effect of the registration of the homestead patent and the
issuance of a duplicate certificate of title to the patentee was to vest in him an incontestable title to the land,
precisely as though his ownership had been determined by the final decree of a competent court under the Land
Registration Act, and that the title so issued is absolutely conclusive and indisputable.

We are of the opinion that section 122 of the Land Registration Act is not susceptible of this interpretation.

It will be observed that the section under consideration expressly determines the class of land to which its operation
is limited. This is declared to be "public land . . . belonging to the Government . . . ."

There is nothing in the section to warrant the conclusion that it was intended to apply to private property erroneously
included in a government patent, as to which the Government has no right at all. The statement in the last
paragraph of the section that upon the registration of the patent and the issuance of the title "such land shall be
registered land for all purposes under this Act" must be read in the light of the antecedent language. The words
"such land" are evidently used to refer to the only class of land to which the section in terms refers, which is, "public
land . . . belonging to the Government . . . ." As to such land the issuance of the certificate vests an absolute title in
the homesteader, but as to land which is not public and does not belong to the Government, it can have no such
effect.

This conclusion is strengthened by consideration of the fact that there is no express declaration in section 122 of
any intention on the part of the Legislature to give to the act of registration of the patent — a mere ministerial act by
an administrative official — the effect of divesting all outstanding titles, or to convert a void patent into a valid title by
the mere act of registration.

The incontestable and absolute character of the Torrens titles issued after judicial proceedings under the Land
Registration Act is conferred by the language of sections 38 and 39. Section 38 declares that the "decree of
registration" entered by the court shall bind the land and "be conclusive upon and against all persons." Section 39
establishes the incontestable validity of certificates of title issued "in pursuance of a decree of registration." Nowhere
in these sections or elsewhere in Act No. 496 is it declared that similar conclusive validity is to attach to certificates
not based upon a "decree of registration." Certainly the mere ministerial act of transcribing a homestead patent in a
book and issuing a certified copy of the entry is not such a decree.

We are, therefore, of the opinion, and so hold, that neither the patent issued by the Director of Lands to applicants
for homesteads, nor the certificate of title issued by the register of deeds upon the patent are conclusive with
respect to the title of the patentee as against private individuals claiming the land against the patentee under title
anterior to the issuance of the patent, although the possession of such a certificate carries with it the presumption
that the land to which it relates was public land at the time of the issuance of the patent to the original holder and
casts upon the opposing litigant the burden of overcoming that presumption, a s well as any unfavorable inferences
to which his contentions may be open should have been guilty of laches in the assertion of his rights.

The decision of the lower court is reversed, and the case is remanded for a new trial. No costs will be allowed on
this appeal. So ordered.
 FIRST DIVISION

January 11, 2017

G.R. No. 170506

LAND BANK OF THE PHILIPPINES, Petitioner,

vs.
HEIRS OF LORENZO TAÑADA AND EXPEDITA EBARLE, Respondents.

DECISION

LEONARDO-DE CASTRO, J.:

Before the Court is a petition for review under Rule 45 of the 1997 Rules of Civil Procedure assailing the
Decision 1 dated April 8, 2005 as well as the Resolution2 dated November 22, 2005 of the Court of Appeals in CA-
G.R. SP No. 79245, entitled "Land Bank of the Philippines v. Heirs of Lorenzo Tañada and Expedita Ebarle." The
assailed April 8, 2005 appellate court ruling was an affirmance of the Decision3 dated July 13, 1999 of Branch 1 of
the Regional Trial Court of Bataan in Civil Case Nos. 6328 and 6333. On the other hand, the assailed November 22,
2005 Resolution denied for lack of merit the motion for reconsideration filed by petitioner.

In the aforementioned April 8, 2005 Decision of the Court of Appeals, the factual antecedents of this case were
synthesized as follows:

Respondents, the Heirs of Lorenzo Tañada and Expedita Ebarle, are the owners of several parcels of land situated
in Gabon, Abucay, Bataan, covered by TCT Nos. T-8483 and T-12610, with respective land areas of 56.8564 and
16.9268 hectares. The record shows that sometime in 1988, the aforesaid parcels of land were placed under the
land reform program of the government. It was determined that 16.7692 hectares from TCT No. T-8483 and 13
hectares from TCT No. T-12610 would be included in the program.

Pursuant to its mandate under Executive Order No. 405, petitioner Land Bank of the Philippines (LBP) valued the
properties to be taken at ₱223,837.29 for 16.7692 hectares and ₱192,610.16 for 13 hectares or a total of
₱416,447.43. Dissatisfied with this valuation for being unreasonably and unconscionably low, respondents instituted
the summary administrative proceedings for the preliminary determination of just compensation in 1992 and 1993.
Said cases were docketed as DARAB Case Nos. 068-B'92 for TCT No. 12610 and 103-BT'93 for TCT No. T-8483
with the Department of Agrarian Reform Adjudication Board (DARAB) in Region III.

With the DARAB's affirmation of the acquisition cost fixed by petitioner for the subject properties, respondents
instituted separate petitions for the determination and payment of just compensation, viz.: Civil Case No. 6328 for
the 16.7692 hectares covered by TCT No. T-8483 and Civil Case No. 6353 for the 13 hectares under TCT No. T-
12610, both with the RTC of Bataan, Branch I. Contending that the price fixed by petitioner was unconscionably low,
respondents prayed that their properties be revalued at ₱150,000.00 per hectare. Since they raised similar issues,
the two (2) cases were eventually consolidated.

To establish their claim for just compensation, respondents presented Jose Dela Cruz, a vault keeper from the
Office of the Bataan Register of Deeds, who testified that he is the custodian of documents and titles in the said
office. Said witness identified a Deed of Sale dated 05 April 1997 executed by Horacio Limcangco who sold 6,158
square meters of land in Abucay, Bataan for ₱20,000.00 or for ₱3.24 per square meter. He also identified a Deed of
Absolute Sale dated 27 August 1996 executed by Franklin and Benigno Morales whereby 53,102 square meters of
land in Abucay, Bataan was sold for ₱830,000.00 or for ₱15.91 per square meter.

On the other hand, neither the Department of Agrarian Reform (DAR) nor petitioner presented any witness to refute
the evidence presented by respondents. Instead, they offered documentary exhibits to show how, in adherence to
DAR Administrative Order No. 6, Series of 1992, they arrived at the valuation of the just compensation for the
subject parcels. 4 (Citations omitted.)

Upon termination of the proceedings, the trial court acting as a Special Agrarian Court (SAC) rendered the assailed
July 13, 1999 Decision which favored the respondents in this case and pegged the value of the lots in question at
fifteen pesos per square meter or P-150,000.00 per hectare. The dispositive portion of the trial court's judgment is
reproduced here:

WHEREFORE, judgment is hereby rendered:

1. Declaring that the petitioners are entitled to just compensation; and

2. That ₱150,000.00 per hectare is just compensation for the land of the petitioners to be paid by the Land Bank of
the Philippines for the areas selected by the Department of Agrarian Reform namely: 16.7692 hectares under
Transfer Certificate of Title No. T-8483 and 13 hectares under Transfer Certificate of Title No. T-12610 both of the
Office of the Register of Deeds of Bataan. 5

In arriving at the said ruling, the trial court reasoned, thus:

The issue to be resolved is whether or not the valuation made by the Land Bank of the Philippines and DARAB [is]
just compensation for the said properties to be acquired by the Department of Agrarian Reform.

In the case of Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform, 175 SCRA
343, the Supreme Court held that:

Just compensation is defined as the full and fair equivalent of the property taken from its owner by the
expropriator. It has been repeatedly stressed by this Court that the measure is not the taker's gain but the owner's
1âwphi1

loss. The word just is used to intensify the meaning of the word "compensation" to convey the idea that the
equivalent to be rendered for the property to be taken shall be real, substantial, full, ample. Manila Railroad Co. vs.
Velasquez, 32 Phil. 286; Manotok vs. National Housing Authority, 150 SCRA 89.

Based on said definition of what is just compensation, this Court believes that the price of ₱150,000.00 per hectare
or ₱15.00 per square meter which the petitioners are asking is just and reasonable. This is the same price for which
the owner of adjoining land was sold in Abucay, Bataan in 1996.

This Court cannot close its eyes to the prevalent practice of tenants that once they are awarded lots under the
Comprehensive Agrarian Reform Program, they immediately look for prospective buyers, selling the property from
₱500,000.00 to ₱1,000,000.00 per hectare which they only acquired at a very low price to the point of being
confiscatory to the prejudice of the real owners.6

A motion for reconsideration was subsequently filed by petitioner but this was denied by the trial court in its Order
dated August 7, 2003. 7

Dissatisfied with the adverse judgment, petitioner elevated the case to the Court of Appeals. However, the appellate
court merely denied petitioner's appeal and affirmed the appealed decision of the trial court in the now assailed April
8, 2005 Decision, which dispositively states:

WHEREFORE, the petition is DENIED for lack of merit and the appealed Decision dated 13 July 1999
is AFFIRMED in toto.8

When the appellate court refused to reconsider the foregoing decision, petitioner sought our review of the case and
our ruling on the following issue:
WHETHER OR NOT THE SPECIAL AGRARIAN COURT CAN DISREGARD THE VALUATION GUIDELINES OR
FORMULA PRESCRIBED UNDER DAR AO NO. 6, SERIES OF 1992, AND AS HELD IN THE CASE OF SPS.
BANAL, SUPRA, IN FIXING THE JUST COMPENSATION OF THE SUBJECT PROPERTIES.9

Respondents, in turn, opposed the petition on the ground that petitioner's valuation based on the formula in DAR
Administrative Order No. 06, series of 1992, may not supplant the valuation of the SAC, which was affirmed by the
Court of Appeals. 10 They further argued that the petitioner's valuation of the lots (at an average of a little over one
peso per square meter) was grossly unjust and unsupported by proof.

Essentially, the sole issue to be resolved by this Court is whether or not the trial court utilized the correct method in
fixing the just compensation due to respondents' parcels of land which have been subjected to land reform
proceedings under Republic Act No. 6657 or the Comprehensive Agrarian Reform Law of 1988.

After carefully weighing the issues and arguments presented by the parties in this case, we find the petition
meritorious.

In Land Bank of the Philippines v. American Rubber Corporation, 11 we elaborated on the concept of just
compensation in this wise:

This Court has defined "just compensation" for parcels of land taken pursuant to the agrarian reform program as
"the full and fair equivalent of the property taken from its owner by the expropriator." The measure of compensation
is not the taker's gain but the owner's loss. Just compensation means the equivalent for the value of the property at
the time of its taking. It means a fair and full equivalent value for the loss sustained. All the facts as to the condition
of the property and its surroundings, its improvements and capabilities should be considered. x x x. (Citations
omitted.)

Since there is no dispute that the subject properties are qualified for coverage under the agrarian reform law, the
just compensation for the said properties must be governed by the valuation factors under Section 17 of Republic
Act No. 6657 which provides:

SEC. 17. Determination of Just Compensation. - In determining just compensation, the cost of acquisition of the
land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner, the
tax declarations, and the assessment made by government assessors shall be considered. The social and
economic benefits contributed by the farmers and the farmworkers and by the Government to the property as well
as the nonpayment of taxes or loans secured from any government financing institution on the said land shall be
considered as additional factors to determine its valuation.

Thus, we have held that when handling just compensation cases, the trial court acting as a SAC should be guided
by the following factors: (1) the acquisition cost of the land; (2) the current value of the properties; (3) its nature,
actual use, and income; (4) the sworn valuation by the owner; (5) the tax declarations; (6) the assessment made by
government assessors; (7) the social and economic benefits contributed by the farmers and the farmworkers, and
by the government to the property; and (8) the nonpayment of taxes or loans secured from any government
financing institution on the said land, if any. 12

Pursuant to the rule-making power of the Department of Agrarian Reform (DAR) under Section 49 of Republic Act
No. 6657, 13 the enumerated factors were translated into a formula that was outlined in DAR Administrative Order
No. 17, series of 1989, as amended by DAR Administrative Order No. 03, series of 1991, and as further amended
by DAR Administrative Order No. 06, series of 1992, entitled "RULES AND REGULATIONS AMENDING THE
VALUATION OF LANDS VOLUNTARILY OFFERED AND COMPULSORILY ACQUIRED AS PROVIDED FOR
UNDER ADIVHNISTRATIVE ORDER NO. 17, SERIES OF 1989, AS AMENDED, ISSUED PURSUANT TO
REPUBLIC ACT NO. 6657. 14

In determining the just compensation to be paid to respondents, petitioner utilized the formula indicated in DAR
Administrative Order No. 06, series of 1992, which was in effect at the time the lots of respondents were subjected
to coverage by the government's land reform program. The said formula is reproduced as follows:
II. THE FOLLOWING RULES AND REGULATIONS ARE HEREBY PROMULGATED TO AMEND CERTAIN
PROVISIONS OF ADMINISTRATIVE ORDER NO. 17, SERIES OF 1989, AS AMENDED BY ADMINISTRATIVE
ORDER NO. 3, SERIES OF 1991 WHICH GOVERN THE VALUATION OF LANDS SUBJECT OF ACQUISITION
WHETHER UNDER VOLUNTARY OFFER TO SELL (VOS) OR COMPULSORY ACQUISITION (CA)

A. There shall be one basic formula for the valuation of land covered by VOS or CA regardless of the date of offer or
coverage of the claim:

LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)

Where: LV = Land Value

CNI =Capitalized Net Income

CS = Comparable Sales

MV = Market Value per Tax Declaration

The above formula shall be used if all the three factors are present, relevant, and applicable.

Al. When the CS factor is not present and CNI and MV are applicable, the formula shall be:

LV = (CNI x 0.9) + (MV x 0.1)

A2. When the CNI factor is not present, and CS and MV are applicable, the formula shall be:

LV = (CS x 0.9) + (MV x 0.1)

A3. When both the CS and CNI are not present and only MV is applicable, the formula shall be:

LV = MV x 215

It is settled in jurisprudence that, in order to determine just compensation, the trial court acting as a SAC must take
into consideration the factors prescribed by Section 17 of Republic Act No. 6657 and is obliged to apply the formula
crafted by the DAR. We discussed the long line of cases calling for the mandatory application of the DAR formula
in Land Bank of the Philippines v. Honeycomb Farms Corporation, 16 to wit:

In Land Bank of the Philippines v. Sps. Banal, we recognized that the DAR, as the administrative agency tasked
with the implementation of the agrarian reform program, already came up with a formula to determine just
compensation which incorporated the factors enumerated in Section 17 of RA 6657. We said:

These factors [enumerated in Section 17] have been translated into a basic formula in DAR Administrative Order
No. 6, Series of 1992, as amended by DAR Administrative Order No. 11, Series of 1994, issued pursuant to the
DAR's rule-making power to carry out the object and purposes of R.A. 6657, as amended.

In Landbank of the Philippines v. Celada, we emphasized the duty of the RTC to apply the formula provided in the
applicable DAR AO to determine just compensation, stating that:

While [the RTC] is required to consider the acquisition cost of the land, the current value of like properties, its
nature, actual use and income, the sworn valuation by the owner, the tax declaration and the assessments made by
the government assessors to determine just compensation, it is equally true that these factors have been translated
into a basic formula by the DAR pursuant to its rule-making power under Section 49 of R.A. No. 6657. As the
government agency principally tasked to implement the agrarian reform program, it is the DAR's duty to issue rules
and regulations to carry out the object of the law. [The] DAR [Administrative Order] precisely "filled in the details" of
Section 17, R.A. No. 6657 by providing a basic formula by which the factors mentioned therein may be taken into
account. The [RTC] was at no liberty to disregard the formula which was devised to implement the said provision.
It is elementary that rules and regulations issued by administrative bodies to interpret the law which they are
entrusted to enforce, have the force of law, and are entitled to great respect. Administrative issuances partake of the
nature of a statute and have in their favor a presumption of legality. As such, courts cannot ignore administrative
issuances especially when, as in this case, its validity was not put in issue. Unless an administrative order is
declared invalid, courts have no option but to apply the same.

We reiterated the mandatory application of the formula in the applicable DAR administrative regulations in Land
Bank of the Philippines v. Lim, Land Bank of the Philippines v. Heirs of Eleuterio Cruz, and Land Bank of the
Philippines v. Barrido. x x x.

In Land Bank of the Philippines v. Gonzalez, 17 we reiterated this doctrine:

While the determination of just compensation is essentially a judicial function vested in the R TC acting as a SAC,
the judge cannot abuse his discretion by not taking into full consideration the factors specifically identified by law
and implementing rules. SACs are not at liberty to disregard the formula laid down in DAR A.O. No. 5, series of
1998, because unless an administrative order is declared invalid, courts have no option but to apply it. Simply put,
courts cannot ignore, without violating the agrarian reform law, the formula provided by the DAR for the
determination of just compensation. (Citation omitted.)

To settle the lingering legal objections to the use of Section 17 of Republic Act No. 6657 and the implementing
formulas of the DAR in the valuation of properties covered by the government's agrarian reform program, the
Court En Banc held in the recent case of Alfonso v. Land Bank of the Philippines18:

For clarity, we restate the body of rules as follows: The factors listed under Section 17 of RA 6657 and its
resulting formulas provide a uniform framework or structure for the computation of just compensation
which ensures that the amounts to be paid to affected landowners are not arbitrary, absurd or even
contradictory to the objectives of agrarian reform. Until and unless declared invalid in a proper case, the
DAR formulas partake of the nature of statutes, which under the 2009 amendment became law itself, and
thus have in their favor the presumption of legality, such that courts shall consider, and not disregard,
these formulas in the determination of just compensation for properties covered by the CARP. When faced
with situations which do not warrant the formula's strict application, courts may, in the exercise of their
judicial discretion, relax the formula's application to fit the factual situations before them, subject only to
the condition that they clearly explain in their Decision their reasons (as borne by the evidence on record)
for the deviation undertaken. It is thus entirely allowable for a court to allow a landowner's claim for an
amount higher than what would otherwise have been offered (based on an application of the formula) for as
long as there is evidence on record sufficient to support the award.

In the case at bar, the trial court, in arriving at the amount of just compensation to be paid to respondents, solely
based its conclusion on the alleged selling price or market value of the land adjoining respondents' properties.

Likewise, the Court of Appeals merely sustained the trial court's method of valuation which was chiefly based on the
market value of adjoining properties. The appellate court held:

In the case at bench, it cannot be gainsaid that the valuation of respondents' properties was based mainly on the
market value of properties within the surrounding area. To our mind, the trial court's fixing of the just compensation
for respondents' properties at ₱150,000.00 per hectare or at ₱l5.00 per square meter is a fair valuation considering
their suitability for agriculture, accessibility to both provincial and municipal roads and close proximity to the
barangay road in the locality. Aside from the income-yielding crops and fruit bearing trees to which the subject
realties are already planted, we find that the trial court also correctly took appropriate note of the fact that properties
within the area commanded the price of ₱3.24 per square meter in 1977 and ₱l5.91 per square meter in
1996. 19 (Citations omitted.)

Notably, in Alfonso, we recognized that comparable sales is one of the factors that may be considered in
determining the just compensation that may be paid to the landowner. However, there must still be proof that such
comparable sales met the guidelines set forth in DAR AO No. 5 (1998), which included among others, that such
sales should have been executed within the period January 1, 1985 to June 15, 1988 and registered within the
period January 1, 1985 to September 13, 1988.
It is apparent from the foregoing that both the trial court and the Court of Appeals did not observe the valuation
factors under Section 17 of Republic Act No. 6657 as translated into a basic formula in DAR Administrative Order
No. 06, series of 1992, without a well-reasoned justification for the deviation as supported by the evidence on
record. This is in clear violation of the express mandate of both the law and jurisprudence concerning the
determination of just compensation of land subjected to coverage by the agrarian reform law. For this reason, the
valuation made by the trial court cannot be upheld and must be struck down as illegal.

However, despite the necessity of setting aside the computation of just compensation of the trial court, the Court
cannot automatically adopt petitioner's own calculation as prayed for in the instant petition. As we decreed in Heirs
of Lorenzo and Carmen Vidad v. Land Bank of the Philippines,20the "LBP's valuation has to be substantiated during
an appropriate hearing before it could be considered sufficient in accordance with Section 17 of Republic Act No.
6657 and the DAR regulations."

The veracity of the facts and figures which petitioner used in arriving at the amount of just compensation under the
circumstances involves the resolution of questions of fact which is, as a rule, improper in a petition for review
on certiorari. We have likewise consistently taken the position that the Court is not a trier of facts. 21 Thus, a remand
of this case for reception of further evidence is necessary in order for the trial court acting as a SAC to determine
just compensation in accordance with Section 17 of Republic Act No. 6657 and the applicable DAR regulations.

WHEREFORE, premises considered, the petition is PARTIALLY GRANTED. The Decision dated April 8, 2005 and
the Resolution dated November 22, 2005 of the Court of Appeals in CA-G.R. SP No. 79245 are REVERSED and
SET ASIDE. Civil Case Nos. 6328 and 6333 are REMANDED to the Regional Trial Court of Bataan, Branch 1 for
the determination of just compensation, based on Section 17 of Republic Act No. 6657 and the applicable
administrative orders of the Department of Agrarian Reform, and in consonance with prevailing jurisprudence.

SO ORDERED.