FIRST DIVISION
G.R. No. 236381, August 27, 2020
REPUBLIC OF THE PHILIPPINES, Petitioner, v. SIXTO SUNDIAM, L & F MARKETING, INC., JOSE MA. LOPEZ, ROSENDO D. BONDOC, AUGUSTO F. DEL ROSARIO, AND LIBERTY ENGINEERING CORPORATION, Respondents.
D E C I S I O N
CAGUIOA, J.:
The CA Decision narrates the facts of the case as follows:Ruling of the CA
In a Complaint dated [October 16, 1979] filed before then Court of First Instance of Pampanga [(CFI)J, the Republic, through the [OSG], alleged that a portion of the Fort Stotstenberg Military Reservation in Pampanga, now Clark Air Force Base, was surveyed, segregated and designated as Lot 727, Psd-528, Angeles Cadastre, in favor of one Jose P. Henzon. It was further subdivided into seven (7) lots, including Lot 727-G, allegedly without the approval or signature of the Director of Lands.
On [October 27, 1967], Lot No. 727-G was further subdivided into 63 lots, known as Csd-11198 and approved by the Director of Lands. One of the registered owners thereof, Sixto Sundiam [(Sundiam)], [respondent] herein, caused the registration of Lot No. 986 and thus, [Original Certificate of Title (OCT)] No. 80 was issued. Later on, Sundiam sold the said property to [respondent] L & F Marketing, Inc. [(L & F, Inc.)], which in turn sold the same, until the property passed on to [respondent] Liberty Engineering Corporation [(Liberty Corp.)], now under [Transfer Certificate of Title (TCT)] No. 34959. However, it was later on discovered that the said lot is within the Clark Air Force Base, a military reservation, prompting the Republic to file a reversion case to declare the titles on the said property null and void.
After the CFI issued summons, [respondents] Jose Ma. Lopez, Rosendo D. Bondoc, Augusto F. del Rosario and Liberty [Corp.], as transferees of the property, filed an Urgent Motion praying that the court direct the Republic to furnish them a copy of the sketch plan showing the disputed lot being within the Clark Air Force Base. The CFI granted the same through an Order dated [March 10, 1980], suspending the filing of the Answer until the said sketch plan had been furnished [respondents].
The Republic, however, failed to comply, hence, the CFI ordered the case be sent to the archives via an Order dated [April 30, 1982]. A year thereafter, the Republic filed a Motion to Declare Defendants in Default but the CFI issued an Order on [February 17, 1983] holding in abeyance action thereon pending motion from the Republic for the revival of the case.
Now, after twenty-four (24) years, the Republic, through the OSG, filed a Manifestation and Motion before the [RTC] praying for the revival of the case and the service of summons through publication on [respondents] Sundiam and L & F, Inc.
[Respondent] Liberty [Corp.] filed a Motion to Dismiss, arguing that the Republic's cause of action was already barred by prescription and laches. Moreover, the disputed property had already passed on to innocent purchasers for value, including Liberty [Corp.] The Republic opposed the same and maintained that neither prescription nor laches would bar its claims.
On [October 7, 2015], the [RTC] rendered the assailed Order dismissing the Complaint of the Republic, the dispositive portion of which states:cralawredx x x x
WHEREFORE, in view of the above considerations, the motion to dismiss is hereby granted. The complaint is DISMISSED.
x x x x
SO ORDERED.
x x x x
The Republic sought a reconsideration, but the same was denied in an Order dated [March 15, 2016.]
x x x x
The Republic filed its Notice of Appeal which was given due course by the [RTC]. Hence, the x x x Appeal [to the CA.]5
[Petitioner, then, filed an appeal to the CA, raising the sole issue that the RTC erred in applying the doctrine of equitable estoppel against the Government to bar it from recovering land covered by a military reservation.]6
x x x [It] is aware that prescription does not run against the government. When the government is the real party in interest, and is proceeding mainly to assert its own rights and recover its own property, there can be no defense on the ground of laches or limitation. And, [j]urisprudence also recognizes the State's immunity from estoppel as a result of the mistakes or errors of its officials and agents.8However, the CA pointed out that the disputed property, which the Republic has alleged to be within the Clark Air Base,9 a military reservation, had already passed on to several third persons.10 The CA stated that it is only fair and reasonable to apply the equitable principle of estoppel by laches against the government to avoid an injustice to innocent purchasers for value.11 Further, the CA expressed that it adheres to the Court's ruling in Republic v. Umali,12 that the government cannot institute reversion proceedings against transferees in good faith and for value, upholding the indefeasibility of a Torrens title.13
WHEREFORE, premises considered, the instant Appeal is hereby DENIED. Accordingly, the assailed Order dated [October 7, [2015] issued by Branch 56, Regional Trial Court of Angeles City is AFFIRMED in toto.Hence, the instant Petition, without the Republic seeking reconsideration of the CA Decision. Respondent Liberty Engineering Corporation filed a Comment/Opposition15 dated July 20, 2018.
SO ORDERED.14
ART. 1432. The principles of estoppel are hereby adopted insofar as they are not in conflict with the provisions of this Code, the Code of Commerce, the Rules of Court and special laws.As well, jurisprudence on whether laches may bar the government from instituting a reversion case has been consistent. In the 1926 case of Government of the United States of America v. The Judge of the Court of First Instance of Pampanga,26 it was ruled that:cralawred
The contention that the petitioner was guilty of laches in not taking timely advantage of the various other remedies available may be best answered by quoting the language of the Supreme Court of the United States in the case of United States vs. Des Moines Navigation & Railroad Company, 142 U. S., 510 (citing U. S. vs. Nashville, Chattanoga and St. Louis Railway Company, 118 U. S., 120; U. S. vs. Insley, 130 U. S., 263): "When the government is the real party in interest, and is proceeding simply to assert its own rights and recover its own property, there can be no defense on the ground of laches or limitation." x x x27This doctrine is the general rule and has been reiterated in, among others, Land Bank of the Philippines v. Republic,28Reyes v. Court of Appeals29 and Republic v. Court of Appeals30
Assuming that the Parañaque RTC has jurisdiction over the reversion case, still the lapse of almost three decades in filing the instant case, the inexplicable lack of action of the Republic and the inquiry this would cause constrain us to rule for petitioners. While it may be true that estoppel does not operate against the state or its agents,32 deviations have been allowed. In Manila Lodge No. 761 v. Court of Appeals, we said:cralawredFrom the foregoing, it thus is clear that only innocent purchasers for value (IPV) are afforded the right to raise the equitable principle of estoppel by laches in their defense against the government to avoid injustice to them."Estoppels against the public are little favored. They should not be invoked except in rare and unusual circumstances, and may not be invoked where they would operate to defeat the effective operation of a policy adopted to protect the public. They must be applied with circumspection and should be applied only in those special cases where the interests of justice clearly require it. Nevertheless, the government must not be allowed to deal dishonorably or capriciously with its citizens, and must not play an ignoble part or do a shabby thing; and subject to limitations x x x, the doctrine of equitable estoppel may be invoked against public authorities as well as against private individuals."33 (Emphasis supplied.)Equitable estoppel may be invoked against public authorities when as in this case, the lot was already alienated to innocent buyers for value and the government did not undertake any act to contest the title for an unreasonable length of time.
In Republic v. Court of Appeals, where the title of an innocent purchaser for value who relied on the clean certificates of the title was sought to be cancelled and the excess land to be reverted to the Government, we ruled that "[i]t is only fair and reasonable to apply the equitable principle of estoppel by laches against the government to avoid an injustice to innocent purchasers for value (emphasis supplied)."34 x x x
x x x x
Republic v. Court of Appeals is reinforced by our ruling in Republic v. Umali,35 where, in a reversion case, we held that even if the original grantee of a patent and title has obtained the same through fraud, reversion will no longer prosper as the land had become private land and the fraudulent acquisition cannot affect the titles of innocent purchasers for value.36
Endnotes:
1Rollo, pp. 10-38, excluding Annexes.
2 Id. at 39-49. Penned by Associate Justice Rodil V. Zalameda (now a Member of the Court), with Associate Justices Japar B. Dimaampao and Renato C. Francisco concurring.
3 Seventh Division.
4Rollo, pp. 94-97. Penned by judge Irin Zenaida S. Buan.
5Rollo, pp. 40-43.
6 Id. at 43.
7 Id. at 45.
8 Id. at 44. Citations omitted.
9 Clark Air Force Base in some parts of the rollo.
10 See rollo, pp. 46, 47.
11 Id. at 47. Citations omitted.
12 G.R. No. 80687, April 10, 1989, 171 SCRA 647.
13Rollo, pp. 47-48.
14 Id. at 48.
15 Id. at 159-179.
16 Id. at 17.
17 An Act to Amend and Compile the Laws Relative to Lands of the Public Domain, November 7, 1936.
18Rollo, p.81.
19 Creating and Designating the Area Covered by the Clark Special Economic Zone and Transferring These Lands to the Bases Conversion and Development Authority pursuant to Republic Act No. 7227, April 3, 1993.
20 Desiderio P. Jurado, Comments and Jurisprudence on Obligations and Contracts (1987 Ninth Rev. Ed.), p. 621.
21 "A party may be estopped or barred from raising a question in different ways and for different reasons. Thus we speak of estoppel in pais, or estoppel by deed or by record, and of estoppel by laches." Tijam v. Sibonghanoy, No. L-21450, April 15, 1968, 23 SCRA 29, 35.
22Tijam v. Sibonghanoy, id. at 35.
23 Id.
24 96 Phil. 622(1955).
25 Id. at 637.
26 49 Phil. 495(1926).
27 Id. at 500.
28 G.R. No. 150824, February 4, 2008, 543 SCRA 453, 468.
29 G.R. No. 94524, September 10, 1998, 295 SCRA 296, 313.
30 G.R. No. 79582, April 10, 1989, 171 SCRA 721, 734.
31 G.R. No. 168661, October 26, 2007, 537 SCRA 513.
32 Citing Manila Lodge No. 761 v. Court of Appeals, Nos. L-41001 & L-41012, September 30, 1976, 73 SCRA 162, 186.
33 Citing 31 CJS 675-676, cited in Republic v. Court of Appeals, G.R. No. 116111, January 21,1999, 301 SCRA 366, 377.
34 Citing Republic v. Court of Appeals, id. at 379.
35 Supra note 12, at 653.
36Estate of the Late Jesus S. Yujuico v. Republic, supra note 31, at 529-532.
37 Article 527 of the Civil Code states: "Good faith is always presumed, and upon him who alleges bad faith on the part of a possessor rests the burden of proof."
38 See Nobleza v. Nuega, G.R. No. 193038, March 11, 2015, 752 SCRA 602, 611, citing Raymundo v. Bandong, G.R. No. 171250, July 4, 2007, 526 SCRA 514, 529 further citing Potenciano v. Reynoso, G.R. No. 140707, April 22, 2003, 401 SCRA 391, 401. See also Baltazar v. Court of Appeals, No. L-78728, December 8, 1988, 168 SCRA 354, 367 and Santos v. Court of Appeals, G.R. No. 90380, September 13, 1990, 189 SCRA 550, 559.