SHIPSIDE INCORPORATED VS. THE HON. COURT OF APPEALS, HON.

REGIONAL TRIAL COURT, BRANCH 26 (San Fernando City, La Union) &

THE REPUBLIC OF THE PHILIPPINES

G.R. No. 143377, February 20, 2001, (Melo, J.)

Notwithstanding the fact that prescription does not run against the State, this can no longer
be applied by the government in this case as it is not a real party in interest of the subject
matter.

Facts: An Original Certificate of Title was issued in favor of a certain Rafael Galvez on
October 29, 1958 covering four parcels of land—two of which he later conveyed to Filipina
Mamaril, Cleopatra Llana, Regina Bustos and Erlinda Balatbat by way of Deed of Sale on
April 10, 1960. In the same year, Mamaril, et al. conveyed said parcels of land to Lepanto
Consolidated Mining Company, who also in turn, conveyed the lots to petitioner Shipside
Incorporated in 1963. It is without their knowledge, however, that prior to the last sale, the
Court of First Instance of La Union had issued an Order in Land Registration, which declared
Original Certificate of Title registered in the name of Galvez null and void, thus ordering the
cancellation of the OCT and other certificates of title issued subsequent thereto.

Despite of Rafael Galvez filing a motion for reconsideration against the order, the same was
denied by the trial court. Following this, an appeal was made to the Court of Appeals but has
decided to rule in favor of the Republic of the Philippines, making the decision final and
executory. Finally, a writ of execution was issued and served by the trial court on the
Register of Deeds of San Fernando, La Union.

Twenty-four years later, the Office of the Solicitor General received a letter from Mr. Victor
G. Floresca, Vice-President of John Hay Poro Point Development Corporation, stating that
the aforementioned orders and decision of the trial court have not been executed by the
Register of Deeds of San Fernando. Subsequently, the Office of the Solicitor General filed a
complaint for revival of judgment and cancellation of titles before the RTC entitled
“Republic of the Philippines versus the Heirs of Rafael Galvez”.

In response to this, Shipside, Inc. filed a motion to Dismiss stating as one of its grounds that
the plaintiff is not the real party-in-interest because the real property sought to be cancelled
and was allegedly part of Wallace Air Station were already under the ownership and
administration of the Bases Conversion Development Authority (BCDA).

Issue: Whether or not the Republic can pursue a cause of action

Ruling: Motion to Dismiss GRANTED.

NO. While it is true that prescription does not run against the State, the same may not be
invoked by the government in this case since it is no longer interested in the subject matter.
While Camp Wallace may have belonged to the government at the time Rafael Galvez’s title
was ordered cancelled in Land Registration Case No. N-361, the same no longer holds true
today.

With the transfer of Camp Wallace to the BCDA, the government no longer has a right or
interest to protect. Consequently, the Republic is not a real party in interest and it may not
institute the instant action. Nor may it raise the defense of imprescriptibility, the same being
applicable only in cases where the government is a party in interest. Under Section 2 of Rule
3 of the 1997 Rules of Civil Procedure, every action must be prosecuted or defended in the
name of the real party in interest. To qualify a person to be a real party in interest in whose
name an action must be prosecuted, he must appear to be the present real owner of the right
sought to enforced (Pioneer Insurance v. CA, 175 SCRA 668 [1989]). A real party in interest
is the party who stands to be benefited or injured by the judgment in the suit, or the party
entitled to the avails of the suit. And by real interest is meant a present substantial interest, as
distinguished from a mere expectancy, or a future, contingent, subordinate or consequential
interest (Ibonilla v. Province of Cebu, 210 SCRA 526 [1992]). Being the owner of the areas
covered by Camp Wallace, it is the Bases Conversion and Development Authority, not the
Government, which stands to be benefited if the land covered by TCT No. T-5710 issued in
the name of petitioner is cancelled.