NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M.
SANTOALLA
TOPIC: CADASTRAL REGISTRATION PROCEEDINGS
EN BANC
G.R. No. L-14869 October 27,
1920
THE DIRECTOR OF LANDS, applicant-appelle,
vs. THE ROMAN CATHOLIC ARCHBISHOP OF
MANILA, objector-appellant.
JUSTA DE GUZMAN, ET AL., objectors-
appellees.
Hartigan and Welch for appellant.
Gregorio C. Concepcion for appellees.
MALCOLM, J.:
In 1913, cadastral proceedings were begun
to settle the title to a considerable
tract of land situated in the Province of
Rizal. Thirteen of the cadastral lots were
claimed by the municipality of Cainta,
Province of Rizal, the Roman Catholic
Archbishop of Manila, and various private
individuals. The judgment of the trial
court adjudicated the parcels in question
to the private claimants. From this
judgment both the Roman Catholic
Archbishop of Manila and the municipality
of Cainta appealed, but subsequently the
appeal of the latter wad dismissed for
failure to prosecute. The contest has thus
narrowed down to one between the Church
as appellant and various individuals as
appellees.
A ruling as to four of the lots can
quickly be made. By stipulation during the
trial, and by admission of counsel for
appellant, Policarpio Buenviaje is
conceded to have title to lot 2187. As to
lot 2186, the only evidence before us,
confirmed by the findings of the trial
court, is, that Mamerta Roxas went into
possession of the same in 1895; and when
counsel for the Church made his offer to
present rebuttal testimony, he failed to
mention this lot. Likewise, as to lots
2213 and 2214, the only evidence before
us, confirmed by the findings of the trial
court, is, that Antonio, Benito, and
Gervasio dela Paz went into possession of
the same in 1896; the record states that
"ambas partes dan por terminadas sus
pruebas," while counsel for the Church in
making his offer of rebuttal testimony
again failed to include these two lots.
A more difficult situation has arisen with
reference to the nine remaining cadastral
lots. To understand it, a brief narration
of the course of the proceedings in the
trial court will have to be made.
The trial as to the land now before us
opened with a stipulation to the effect
that the composition title of the Church
with the spanish Government included this
land. The Church presented one witness and
rested. The private oppositors then
called their respective witnesses. Each
endeavored to prove title by possession,
best understood by the following table:
Parcel No.-—Oppositor--Possession began-
-Acts of possession
2176, 2191, 2182-- Justa de Guzman-- 1895
--Planted rice; paid taxes
2178, 2180, 2190-- Melecio S.
Buenaventura ---1882-- Planted rice
2184, 2185--- Justo S. Buenaventura---
1885 ---- Cultivation and harvest
2192 --- Justo Javier --- 1885----
Planted rice; harvested.
Counsel for the Church, thereupon, made
an offer to present additional testimony
with reference to lots 2176, 2178, 2180,
2182, 2184, 2185, 2190, 2191, and 2192,
or the lots above enumerated in the table.
Three witnesses were called to the stand,
but each time, before any pertinent
testimony could be secured from them, an
objection was made by counsel for the
oppositors that the proof related to the
evidence in chief of the Church, and this
was sustained by the court.
To resolve the facts into their simplest
terms, it is evident that when an
admission was made of the royal title, the
Church had shown that it was the
legitimate owner of the land to which it
refers. The most perfect title could,
however, be lost by abandonments. When,
therefore, the private oppositors showed
possession for the prescriptive period,
they had made their case, and the burden
of proof had shifted. To overcome this
burden, it was then incumbent upon the
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 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
Church to demonstrate that such
possession had been interrupted, or that
it was merely possession through the
tolerance of the Church.
This brings us to the specific
consideration of assignment of error No.
2 of the appellant to the effect that the
court erred in refusing to admit evidence
tendered by this claimant and appellant
in answer to rival claims. A correct
ruling can most appropriately be arrived
at by a consideration of the nature of
cadastral proceedings, with reference to
the usual rules of trial practice and
evidence.
The object of a cadastral petition, as all
know, is that the title to the various
lots embraced in the survey may be settled
and adjudicated. It is in the nature of a
proceeding in rem, promoted by the
Director of Lands, somewhat, akin to a
judicial inquiry and investigation
leading to a judicial decree. In one
sense, there is no plaintiff and there is
no defendant. In another sense, the
Government is the plaintiff and all the
claimants are defendants. (Act No. 2259,
sec. 10.) The trial is conducted in the
same manner as ordinary trials and
proceedings in the Court of Land
Registration. (Sec. 11.) As to this court,
now abolished, the Land Registration Act
provides that it "shall conform, as near
as may be, to the practice in special
proceedings in courts of first instance."
(Act No. 496, sec. 2) The Code of Civil
Procedure, which is thus brought into
relation with the Cadastral Act,
prescribes the order in which the trial
must proceed. (Secs. 56, 132). The usual
rules of practice, procedure, and
evidence govern registration proceedings.
Obviously, orderly procedure must be
followed if injurious surprises and
annoying delays in the administration of
justice are to be avoided. Evidence cannot
be given piecemeal. The strict rule is
that the plaintiff must try his case out
when he commences. Nevertheless, a counsel for the Church found on page 83
relaxation of the rule is permitted in the
sound discretion of the court. "The proper
rule for the exercise of this discretion,"
it has been said by an eminent author,
"is, that material testimony should not
be excluded because offered by the
plaintiff after the defendant has rested,
although not in rebuttal, unless it has
been kept back by a trick, and for the
purpose of deceiving the defendant and
affecting his case injuriously." (1
Thompson on Trials, sec. 346.)1awph!l.net
These principles find their echo in
Philippine remedial law. While the
general rule is rightly recognized, the
Code of Civil Procedure authorizes the
judge "for special reasons," to change the
order of the trial, and "for good reason,
in the furtherance of justice," to permit
the parties "to offer evidence upon their
original case." (Sec. 132.) These
exceptions are made stronger when one
considers the character of registration
proceedings and the fact that where so
many parties are involved, and action is
taken quickly and abruptly, conformity
with precise legal rules should not always
be expected. Even at the risk of violating
legal formulæ, an opportunity should be
given to parties to submit additional
corroborative evidence in support of
their claims of title, if the ends of
justice so require. (Rodriquez vs.
Director of Lands [1915], 31 Phil., 272;
Government of the Philippine Islands vs.
Abural [1919], 39 Phil., 996.)
We believe that the offer of counsel for
the Church could property be classified
as evidence in denial of an affirmative
fact; but that even if not technically
rebuttal evidence, yet in the interest of
justice and the ascertainment of the truth
it should be received. Whether such
evidence would be sufficient to overcome
the case which exists in favor of the
claimants of the nine lots cannot now be
determined.
In so far as the judgment relates to lots
No. 2186, 2187, 2213, and 2214, it is
affirmed, and in so far as it relates to
lots Nos. 2176, 2178, 2180, 2182, 2184,
2185, 2190, 2191, and 2192, it is
reversed, and the record shall be returned
to the lower court for the taking of
additional evidence under the offer of
of the stenographic notes. No finding as
to costs is made in this instance. So
ordered.
Mapa, C.J., Johnson, Araullo, Avanceña
and Villamor, JJ., concur.
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 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
EN BANC
G.R. No. L-48480 July 30, 1943
FABIAN B. S. ABELLERA, petitioner, vs.
MEYNARDO M. FAROL, ET AL., respondents.
Fabian B.S. Abellera in his own behalf.
Pedro C. Quinto and Agaton R. Yaranon for
respondents.
BOCOBO, J.:
Whether in a cadastral case, the judge may
upon motion of adverse claimants order the
cancellation of the claimant's answer and
keep the latter from introducing evidence
to prove his ownership because the case
is barred by a prior judgment, is the
legal question at issue in this case. An
order to that effect issued by the Court
of First Instance of La Union, is impugned
by Fabian B.S. Abellera in a petition for
a writ of certiorari.
Abellera, in a previous case concerning
the same real estate involved herein, sued
Hermegildo Balanag and others who are
either the same parties in this case or
the latter's predecessors in interest,
alleging ownership of the land. But his
complaint was dismissed by the Court of
First Instance on two grounds: (1)
prescription in favor of defendants; and
(2) the deed of donation of these lands
to him had not been formally accepted
according to Article 633 of the Civil
Code. Upon appeal to this Court, the
judgment of the trial court was affirmed
on the second ground aforementioned
(Abellera vs. Balanag G.R. No. 11970,
promulgated March 22, 1918, and reported
in 37 Phil. 865).
It appears in that decision of this Court
that after the perfection of the appeal,
Abellera executed a public document
formally accepting the donation of the
land, and presented and deed of acceptance
together with proofs of notification of
acceptance to the donor, as ground for new
trial. This Court held that this was not
newly-discovered evidence, and that
Abellera had not acquired title to the
hacienda until the execution of the deed
of acceptance and the notification
thereof to donor. This Court added:
So that whether rights he may have to
institute and maintain a new action of
ejectment in reliance upon his claim that
he has acquired title to the hacienda,
since the date of the dismissal of this
action, it is clear that the present
action was properly dismissed on the
ground of failure of proof of title in the
plaintiff at the time when the action was
instituted and later when judgment of
dismissal was entered by the trial court.
In July of 1918, or four months after the
above-mentioned decision of this Court,
petitioner herein brought another action
for recovery of the land against the same
defendants in the previous case. The
second suit was later dismissed by the
Court of First Instance and transferred
to cadastral case No. 5 which included the
hacienda in question that had in the
meantime been subdivided into lots. When
the cadastral case came up before the Hon.
Meynardo M. Farol at Aringay, La Union,
in July 1941, Fabian B.S. Abellera
appeared as claimant while Narciso de
Guzman and others appeared as adverse
claimant. The latter through counsel
moved that Abellera's claim over the lots
concerned be dismissed on the grounds of
res judicata and prescription.
A careful examination of the decision of
this Court in the previous case (37 Phil.,
865) convinces us that there is no res
judicata. We merely held that Abellera had
not acquired title to the hacienda until
the execution of the deed of acceptance
and the notification thereof, and we
clearly refused to prevent Abellera from
instituting a new action based upon his
assertion that he had acquired title to
the estate since the dismissal of his
original action.
The other ground for the motion for
dismissal, prescription, is not involved
in the present proceedings.
The next question is: Did the cadastral
court, on the ground of res judicata, have
any power to entertain the motion to
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 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
dismiss Abellera's claim and bar him from In Haw Pia vs. Roman A. Cruz (G.R. No.
presenting evidence to prove his 48506), we declared that the Court of
ownership of these lots? First Instance in a cadastral proceeding
cannot appoint a receiver because its
jurisdiction is special and limited. We
Rule 132 of the Rules of Court provides: declined in that case to apply the new
Rules of Court by analogy.

These rules shall not apply to land

registration, cadastral and election We are, therefore, of the opinion that
cases, naturalization and insolvency while in a cadastral case res judicata is
proceedings, and other cases not herein available to a claimant in order to defeat
provided for, except by analogy or in a the alleged rights of another claimant,
suppletory character and whenever nevertheless prior judgment can not set
practicable and convenient. up in a motion to dismiss.

The Rules of Court may be applied in The order appealed from is hereby
cadastral cases when two conditions are reversed. Petitioner herein shall in the
present: (1) analogy or need to supplement cadastral proceedings be allowed to
the cadastral law, and (2) practicability present evidence to prove his claim over
and convenience. the lots in question. With costs against
the adverse claimants who are respondents
herein. So ordered.
If the nature and objective of the
cadastral scheme are kept in view, a
motion to dismiss in a cadastral case on Yulo, C.J., Moran and Ozaeta, JJ. concur.
the ground of prior judgment would seem Separate Opinions
to be out of place. The Government
initiates a cadastral case, compelling
all claimants in a municipality to
litigate against one another regarding PARAS, J., dissenting:
their respective claims of ownership. By
this plan, all the private lands in a town
are registered in one single collective Years ago a judge of first instance said
proceeding. Thus, the piece-meal and that res adjudicata cannot be set up as a
isolated registration of lands, so defense in land registration proceedings.
inadequate in more ways than one, is On appeal this Court held:
avoided. The principal aim is to settle
as much as possible all disputes over land
and to remove all clouds over land titles, A final judgment in an ordinary civil case
as far a practicable, in a community. To determining the ownership of certain land
attain this purpose, the cadastral court is res adjudicata in a registration
should allow all claimants ample freedom proceedings when the parties and the
to ventilate whatever right they may property are the same as in the former
assert over real estate, permitting them, case. (Menor vs. Quintana, 56 Phil., 657.)
in keeping with the law of evidence, to
offer proofs in support of their
allegations. To countenance the contrary
This doctrine is a reiteration of that
opinion, by suppressing the presentation
laid down in Verzosa vs. Nicolas, 29
of evidence in support of claims, would
Phil., 425, and Santiago vs. Santos, 54
but serve to perpetuate conflicts over
Phil. 619, which stated:
land, for such stifled affirmations of
ownership will fester like wounds
unskillfully treated. No sufficient
leeway having been give all claimants to A decision in ejectment bars a loser from
demonstrate the strength and consistently opposing registration under Act No. 496
of their alleged rights, the stability of by the prevailing party.
decrees of title is jeopardized.

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 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
When the same parties have heretofore
litigated over the same land for the
recovery of real property, the judgment
in that case (48 Phil., 567) constitutes
res adjudicata in proceedings for
registration of the land. A party cannot
by varying the form of action escape the
operation of the principle that one and
the same cause of action shall not be
twice litigated.
In a revindicatory actions it was declared
that the plaintiffs had no right to the
land sued for. In a subsequent action some
of the former or successful plaintiffs
sought to recover various portions of the
same land from certain individuals to whom
such portions had been deeded by the
principal defendant in the prior case.
Held: Judgment in the first case was
conclusive against the plaintiffs in the
second case. (Baguinguito vs. Rivera, 56
Phil., 423.)
The answers in a cadastral proceedings
partake of an action to recover title, as
real rights are claimed therein. (Dais vs.
Court of First Instance of Capiz, 51
Phil., 896)
The reason for the application of the rule
must lie in the fact that actions and
proceedings are analogous in so far as the
Court is therein called upon to adjudicate
land in favor of any of the conflicting
parties or claimants.
The parcels of land involved in the
instant case had been litigated between
the same parties since the year 1914. The
petitioner here, who was plaintiff in the
case of Abellera vs. Balanag (37 Phil.,
865), alleged that the defendants had been
possessing the land since 1907. They are
in fact still in possession thereof.
Notwithstanding the decision of this
Court in 1918 which affirmed the judgment
of the lower court in the aforesaid case
absolving the defendants-respondents from
the complaint on the ground that the
plaintiff-petitioner had failed to show
title in his favor, the majority are now
allowing the same parties to continue
their odyssey in court.
I dissent because in my opinion Rule 132
in connection with Rule 8 of the Rules of
Court, instead of prohibiting, expressly
authorizes the lower court in land
registration or cadastral proceedings to
entertain a motion for dismissal on the
ground of res adjudicata or prescription.
Of course the dismissal of petitioner's
claim will not necessarily or
automatically mean adjudication of title
to the individual respondents, but it will
certainly facilitate the consideration of
their claims which cease to be contested.
Prompt disposal of cases or such claims
is the main purpose of the said rules. Let
there be no retrogression in the
application of sound rules and doctrines.
The decision in Abellera vs. Balanag (37
Phil. 865) is on the merits and not one
without prejudice to the filing of a new
action against the same defendants. The
dispositive part reads as follows:
Twenty days hereafter let judgment be
entered affirming the judgment of
dismissal in the court below, with the
costs of this instance against the
appellant, and ten days thereafter let the
record be returned to the court wherein
it originated. So ordered.
It must be borne in mind that the
documentary title on which the plaintiff
relied covers a large area of land and the
defendants are occupying only small
portions thereof. The new action
contemplated must therefore refer to the
remaining unoccupied portion, should any
question be raised in relation thereto.
And if the lower court had erred is
granting the motion for dismissal, the
remedy would have been an appeal from the
said order.
TOPIC: PROHIBITED ALIENATIONS AND
TRANSFER OF PRIVATE LANDS
Page 5 of 30
 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
A. SECTIONS 118-124 OF CA 141 land (Exhibit 4, Defendants' Folder of
Exhibits, p. 8).
THIRD DIVISION

G.R. No. L-68109 July 17, 1991

Constantino Gayapanao and his wife
SEVERINO GAYAPANAO, TEODORO GAYAPANAO, Aurelia Maamo died intestate on December
LAURO GAYAPANAO, SALVADOR GAYAPANAO, 22, 1942 and September 29, 1966,
RAYMUNDA GAYAPANAO-RAMOS, HEIRS OF respectively (Record on Appeal, p. 70) .
ELEUTERIO GAYAPANAO and HEIRS OF ROBERTO . .
GAYAPANAO, petitioners,

vs.
THE HONORABLE INTERMEDIATE APPELLATE
COURT and SIMEONA GAYAPANAO-NOVENARIO,
respondents.
FERNAN, C.J.:
In this Petition for Review on Certiorari,
petitioners Severino Gayapanao and his
siblings question the decision of the then
Intermediate Appellate Court (IAC)1 in
AC-G.R. No. CV-59589, entitled "Severino
Gayapanao, et al. vs. Simeona Gayapanao-
Novenario" upholding the validity of the
sale of two (2) hectares of the ten-
hectare homestead land by their father in
favor of their sister Simeona Gayapanao-
Novenario.
Briefly, the facts of the case as found
by the Appellate Court are as
follows:2
. . . the 2-hectare land subject of this
case is part and parcel of a homestead lot
registered in the name of Constantino
Gayapanao under Original Certificate of
Title No. 3625 (Exhibits B and 2,
Plaintiffs' Folder of Exhibits, p. 2). The
homestead application of the late
Constantino Gayapanao over the said lot
was approved on September 7, 1931 (Exhibit
C, Ibid., p. 5) and the final order of the
Director of Lands for the issuance of
patent was issued on December 10, 1937,
(Exhibit A, Ibid., p. 1). On July 13,
1939, the Homestead Patent Title was
issued in the name of Constantino
Gayapanao married to Aurelia Maamo
(Exhibit D, Ibid., p. 2). On November 15,
1938, the late Constantino Gayapanao
executed a private deed entitled
Kasulatan ng Bilihan in favor of Serafin
Novenario and his wife, Simeona Gayapanao
over 20,000 square meters of the homestead
On January 2, 1974, Severino, Teodoro,
Roberto, Salvador, and Lauro, all
surnamed Gayapanao, Raymunda Gayapanao-
Ramos and the heirs of Eleuterio Gayapanao
filed before the then Court of First
Instance of Oriental Mindoro Civil Case
No. R-317, a Complaint for Partition and
Accounting with Prayer for Appointment of
Receiver against their sisters Gloria
Gayapanao-Saet and Simeona Gayapanao-
Novenario (private respondent herein) who
were then occupying the subject homestead
lot. Both defendants filed their Answer
to the complaint.
On March 11, 1975, the court a quo
rendered a decision3 declaring as null and
void Exhibit 4, the contract of sale
between Simeona Gayapanao-Novenario and
her father Constantino Gayapanao for
having been executed within the five-year
prohibitory period provided under Section
118 of the Public Land Law,4 and at the
same time declaring as valid Exhibit 5,
the deed of sale executed by Teodoro
Gayapanao in favor of his sister Gloria
Gayapanao-Saet covering the former's
hereditary share in the homestead lot.
Accordingly, the lower court ruled as
follows:5
WHEREFORE, in view of the above findings,
judgment is hereby rendered as follows:
A. Adjudicating unto plaintiffs
SEVERINO, ROBERTO, SALVADOR, LAURO,
RAYMUNDA and the heirs of ELEUTERIO, all
surnamed Gayapanao and Simeona Gayapanao-
Novenario one-ninth 1/9 each of the
intestate estate of the deceased
Constantino and Aurelia Maamo covered in
and embraced by Original Certificate of
Title No. 3625 and the remaining two-
ninths (2/9) to Gloria Gayapanao-Saet,
she having purchased the one-ninth (1/9)
hereditary share of plaintiff Teodoro
Gayapanao;

Page 6 of 30
 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
B. Authorizing the herein parties to
agree among themselves to cause the
relocated survey of the entire land in
question covered by Original Certificate
of Title No. 3625 so that their respective
shares may be properly delineated;
C. Ordering the parties to submit the
necessary project of partition after the
relocation survey has been executed not
later than three (3) months after entry
of this judgment in order to terminate
tills proceeding;
D. Declaring as null and void document
marked Exhibit "4", the same having been
executed one year prior to the issuance
of the patent, but Exhibit "5" is
confirmed and declared valid.
WITHOUT special findings as to costs.
IT IS SO ORDERED.
Simeona Gayapanao-Novenario moved to
reconsider, but failed. She then sought
relief before the IAC which, finding the
sale in her favor to be perfectly valid,
set aside the decision of the lower court
and entered a new one dismissing the
complaint against her.6
Hence, this appeal filed by Severino
Gayapanao, et al. after their motion for
reconsideration was denied7 by the
respondent appellate court.
In upholding the sale of a portion of the
homestead lot by Constantino Gayapanao to
his daughter, herein private respondent
Simeona Gayapanao-Novenario, the
respondent court interpreted the
prohibition against the alienation or
encumbrance of the homestead land under
Section 118 of the Public Land Law as
referring to an alienation or encumbrance
in favor of a third person outside the
family circle of the original
homesteader. Since, according to the
appellate court, the conveyance involved
herein was made in favor of Simeona
Gayapanao-Novenario, who is one of the
nine (9) children of the original
homesteader and who is the "continuity of
the personality of her father for all
legal intents and purposes," such sale is
"not in contravention of the avowed policy
of the State, which is to preserve and
keep to the homesteader and his family the
land granted to him by the State."8
We rule otherwise. The pertinent portion
of Section 118 of the Public Land Law
provides:9
Except in favor of the government or any
of its branches, units or institutions
land acquired under free patent or
homestead provisions shall not be subject
to encumbrance or alienation from the date
of the approval of the application and for
a term of five years from and after the
date of issuance of the patent or grant
nor shall they become liable to the
satisfaction of any debt contracted prior
to the expiration of said period, but the
improvements or crops on the land may be
mortgaged or pledged to qualified
persons, associations or corporations.
The provision of law which prohibits the
sale or encumbrance of the homestead
within five years after the grant is
mandatory. From the date of the approval
of the application and for a term of five
(5) years from and after the date of
issuance of the patent or grant, lands
acquired under free patent or homestead
provisions cannot be subject to
encumbrance or alienation, nor shall they
become liable to the satisfaction of any
debt contracted prior to the expiration
of said period. The only exception
mentioned by the law is the sale or
encumbrance in favor of the government or
any of its branches, units or
institutions.
In a number of cases, we have consistently
ruled that a sale of homestead within the
five (5) year prohibitive period is void
ab initio and the same cannot be ratified
nor can it acquire validity through the
passage of time.
In the case of Arsenal vs. IAC,10 we said:
Page 7 of 30
 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
The above provisions of law are clear and Court of Appeals, is REVERSED and SET
explicit. A contract which purports to ASIDE. The decision in Civil Case No. R-
alienate, transfer, convey or encumber 317 of the then Court of First Instance
any homestead within the prohibitory of Oriental Mindoro is REINSTATED. Costs
period of five (5) years from the date of against private respondent.
issuance of the patent is void from its
execution. In a number of cases, this
Court has held that such provision is SO ORDERED.
mandatory (De los Santos vs. Roman
Catholic Church of Midsayap, 94 Phil.
405).
Gutierrez, Jr., Feliciano, Bidin and
Davide, Jr., JJ., concur.

It is dangerous precedent to allow the

sale of a homestead during the five-year
prohibition to anyone, even to the
homesteader's own son or daughter. As
EN BANC
aptly put by the petitioners, a clever
homesteader who wants to circumvent the G.R. No. L-11597 May 27, 1959
ban may simply sell the lot to his
descendant and the latter after REPUBLIC OF THE PHILIPPINES, plaintiff-
registering the same in his name would appellee,
sell it to a third person. This way, vs.
public policy would not be subserved.
ISABELO GARCIA, DOMINGO COLORADO,
RAYMUNDO DE GUZMAN, INOCENCIO PADAMA,
Moreover, the sale to a descendant is not IGNACIO RAMOS, LEON DE GUZMAN and THE
one of the exceptions contemplated by REGISTER OF DEEDS OF THE PROVINCE OF
law.1âwphi1 Only the government or any of COTABATO, defendants-appellants.
its branches, units or institutions is
given the right to acquire homestead by
purchase at any time and even during the Eugenio M. Millado for appellants.
five-year prohibitory period. To hold
valid the sale at bar would be to throw Office of the Solicitor General Ambrosio
the door open to schemes and subterfuges Padilla and Solicitor Camilo D. Quiason
which would defeat the law prohibiting the for appellee.
alienation of homestead within five (5)
years from the issuance of the patent.
PADILLA, J.:

The respondent Court cited the case of

Lasud v. Lasud,11 in support of its
decision. Said case is not applicable to
the case at bar, considering that the
plaintiff, Sigbe Lasud sold the inherited
homestead to his brother Santay Lasud and
the latter's wife twenty-one (21) years
after the patent was issued to his father
the homesteader. On the other hand, the
questioned conveyance in the case at bar
was done within the five year prohibitory
period. Furthermore, what was involved in
the Lasud case is the right of therein
plaintiff under Section 119 of the Public
Land Law to redeem the portion sold. In
contrast, the case at bar centers on
Section 118 of the same law
Appeal from a judgment rendered by the
Court of First Instance of Cotabato
decreeing the reversion to the State of a
homestead land covered by Patent No. V-
532 and original certificate of title No.
V-17 issued by the Registrar of Deeds in
and for the province of Cotabato. The
dispositive part of the judgment is:
IN VIEW THEREFORE, judgment is hereby
rendered in favor of the plaintiff:
(a) ordering defendant Isabela Garcia to
return the owner's Certificate of Title
No. V-17 to the Register of Deeds;

WHEREFORE, the assailed decision of the

then Intermediate Appellate Court, now

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 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
(b) ordering the Register of Deeds of
Cotabato that homestead patent No. V-532
be returned to the Bureau of Lands for
cancellation;
(c) ordering the Register of Deeds of
Cotabato to cancel Certificate of Title
No. V-17; and
(d) declaring hereby reverted to the
public domain as belonging to the Republic
of the Philippines the land covered by
said Certificate of Title No. V-17, with
costs against the defendants.
Only questions of law are raised.
From the pleadings, stipulation of facts
and documentary evidence submitted by the
parties, the following facts are
gathered: Sometime before the last war
appellant Isabelo Garcia and his wife
Tagumpay Dumaguindin acquired by purchase
the homestead rights of Lingasa
Bapanialag to a parcel of homestead land
situated at Mabay, Kiamba, Cotabato,
containing an area of 23.21 hectares
(Homestead Application No. 182259 [E-
90722]). The transfer was approved by the
Secretary of Agriculture and Natural
Resources upon recommendation of the
Director of Lands and Patent No. V-532 was
issued in favor of the appellant Isabelo
Garcia and his wife. Three years and three
months after the issuance of the homestead
patent, or on 14 April 1950, for and in
consideration of the sum of P11,000, by
an instrument executed and acknowledged
before a notary public the appellant
Isabelo Garcia and his wife sold and
conveyed to Domingo Colorado, Raymundo de
Guzman, Inocencio Padama, Ignacio Ramos
and Leon de Guzman 19 hectares of the
homestead land (Exhibit A). The vendees
took possession of the part sold to them.
The deed of sale was not submitted to the
Secretary of Agriculture and Natural
Resources for approval nor presented to
the Registrar of Deeds in and for the
province of Cotabato for registration.
Section 118 of Commonwealth Act No. 141
partly provides:
Except in favor of the Government or any
its branches, units, or institutions,
lands acquired under free patent or
homestead provision shall not be subject
to encumbrance of alienation from the date
of the approval of the application and for
a term of five years from and after the
date of issuance of the patent or grant,
nor shall they become liable to the
satisfaction of any debt contracted prior
to the expiration of said period, but the
improvements or crops on the land may be
mortgaged or pledged to qualified
persons, association, or corporations.
Section 124 of the same Act provides:
Any acquisition, conveyance, alienation,
transfer, or other contract made or
executed in violation of any of the
provisions of section one hundred and
eighteen, one hundred and twenty, one
hundred and twenty-one, one hundred and
twenty-two, and one hundred and twenty-
three of this Act shall be unlawful and
null and void from its execution and shall
produce the effect of annulling and
cancelling the grant, title, patent, or
permit originally issued, recognized or
confirmed, actually or presumptively, and
cause the reversion of the property and
its improvements to the State.
As the sale of the 19 hectares of the
homestead land was made within the
prohibitive period of five years — three
years and three months after the issuance
of the homestead patent is null and void,1
and is a cause for reversion of the
homestead to the State.
Appellants' defense set up in the court
below was that the document Exhibit A was
intended merely as a mortgage on the
improvements and crops existing on the 19
hectares of the homestead land to secure
the payment by instalment of a loan, only
that it was drawn up by mistake as an
absolute sale upon the insistence of the
vendees. If it was drawn up as an absolute
sale upon the insistence of the vendees,
then there was no mistake committed. The
document Exhibit A is also so clear worded
as to preclude an interpretation other
than what the parties had intended it to
be — a deed of absolute sale of the 19
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 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
hectares of the homestead land. Moreover,
as found and held by the trial court:
. . . as stated in Annex "A", the
improvements on the land only consist of
50 coconut, 5 mango trees, 1 nangka tree,
bananas and other fruit trees. It is
unbelievable that defendants Domingo
Colorado, Raymundo de Guzman, Inocencio
Padama, Ignacio Ramos and Leon de Guzman
would grant a loan of P11,000.00 for such
a small security as those improvements
specified above. Then if it is true that
the transaction had between them is only
a loan, to be paid by instalment every
year, the defendants failed to produce any
evidence that any instalment has ever been
paid, taking into consideration that
already elapsed more than five (5) years
from that time up to the hearing of this
case.
The fact that the appellant Isabelo Garcia
moved to the municipality of Bislig,
province of Surigao, and abandoned his
homestead in Kiamba, Cotabato, is proof
that he sold 19 hectares of his homestead.
Appellants contended that, under section
50, Act No. 496, the operative act to
convey and affect lands registered
thereunder is the act of registration,
that inasmuch as the deed of sale Exhibit
A was never registered there was actually
no conveyance made of the 19 hectares of
the homestead land, and that for that
reason there was no infringement of
section 118 of Commonwealth Act No. 141.
To constitute a violation of the section
just referred to, it is enough that the
homestead be encumbered or alienated
within the prohibitive period of five
years; it is not necessary that the
encumbrance or alienation be registered
in the Office of the Register of Deeds.
To uphold the appellants' contention
would defeat the very prohibition
established by law, for no party to a
prohibited sale or conveyance would
register such an illegal transaction.
Besides, the vendees already, had taken
possession of the part sold to them.
Even if only 19 out of the 23.21 hectares
of the homestead land had been sold or
alienated within the prohibitive period
of five years from date of issuance of the
patent to the grantee, such alienation is
a sufficient cause for reversion to the
State of the whole grant. In granting a
homestead to an applicant, the law imposes
as a condition that the land should not
be encumbered, sold or alienated within
five years from the issuance of the
patent. The sale or alienation of part of
the homestead violates that condition.
The judgment appealed from is affirmed,
with costs against the appellants.
Paras, C.J., Bengzon, Montemayor, Reyes,
A., Bautista Angelo, Labrador, Concepcion
and Endencia, JJ., concur.
FIRST DIVISION
G.R. No. 104114 December 4, 1995
LEE CHUY REALTY CORPORATION, petitioner,
vs.
HON. COURT OF APPEALS AND MARC REALTY AND
DEVELOPMENT CORPORATION, respondents.
BELLOSILLO, J.:
Is a judicial action to redeem coupled
with consignation of the price within the
redemption period equivalent to a formal
offer to redeem under Art. 1623 in
relation to Art. 1620 of the Civil Code?
Corollarily, is a formal offer to redeem
accompanied with tender of payment a
condition precedent to the filing of an
action for the valid exercise of the right
of legal redemption? Plainly stated, is
the filing of the action with consignation
equivalent to a formal offer to redeem?
A valuable piece of land in Malhacan,
Meycauayan, Bulacan, with an area of
24,576 square meters and covered by OCT
No. 0-5290 is disputed by petitioner Lee
Chuy Realty Corporation (LEE CHUY REALTY)
and private respondent Marc Realty and
Development Corporation (MARC REALTY).
Originally the property was co-owned by
Ruben Jacinto to the extent of one-sixth
and Dominador, Arsenio, Liwayway, all
surnamed Bascara, and Ernesto Jacinto who
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 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
collectively owned the remaining five-
sixths.
On 4 February 1981 Ruben Jacinto sold his
one-sixth pro-indiviso share to LEE CHUY
REALTY. The sale was registered on 30
April 1981. On 5 May 1989 the Bascaras and
Ernesto Jacinto also sold their share to
MARC REALTY. The sale was registered on
16 October 1989.
LEE CHUY REALTY claims that it was never
informed of the existence of the sale
between MARC REALTY on one hand and the
Bascaras and Jacinto on the other, and
that on the contrary it was only upon
inquiry from the Register of Deeds of
Bulacan that the sale was brought to its
attention. MARC REALTY contends
otherwise. It insists that LEE CHUY REALTY
was verbally notified of the sale and was
in fact given a copy of the deed of sale.
On 13 November 1989 LEE CHUY REALTY filed
a complaint for legal redemption against
MARC REALTY1 and consigned in court a
manager's check for 614,400. In its
Amended Answer with Counterclaim with
Motion to Dismiss, MARC REALTY insisted
that the complaint be dismissed for
failure to state a cause of action there
being no allegation of prior valid tender
of payment nor a prior valid notice of
consignation.
On 26 December 1990 the trial court2 ruled
in favor of LEE CHUY REALTY holding that
there was a prior valid tender of payment
and consignation. It further decreed that
"(n)either a separate offer to redeem nor
a formal notice of consignation are (sic)
necessary for the reason that the filing
of the action itself, within the period
of redemption, is equivalent to a formal
offer to redeem."3
On 1 February 1991 MARC REALTY filed a
Petition for Certiorari, Prohibition with
Temporary Restraining Order and/or Writ
of Preliminary Injunction with this
Court. The petition however was referred
to the Court of Appeals pursuant to Sec.
9, B.P. Blg. 129.
On 22 November 1991 the Court of Appeals
rendered a decision reversing that of the
lower court and ruling that "a prior
tender or offer of redemption is a
prerequisite or precondition to the
filing of an action for legal redemption."
It further ruled that "there must be
tender of the redemption price within the
required period . . . because the policy
of the law is not to leave the purchaser's
title in uncertainty beyond the
established 30-day period." LEE CHUY
REALTY filed a motion for reconsideration
but it was denied hence the present
petition.
MARC REALTY contends that prior tender of
payment is a condition precedent to the
filing of an action in court in order to
validly exercise the right of legal
redemption. LEE CHUY REALTY however
argues that the filing of the action
itself is equivalent to a formal offer to
redeem, which is a condition precedent to
the valid exercise of the right of legal
redemption.
We sustain LEE CHUY REALTY. Arts. 1620 and
1623 of the Civil Code on legal redemption
provide:
Art. 1620. A co-owner of a thing may
exercise the right of redemption in case
the shares of all the other co-owners or
of any of them are sold to a third person.
If the price of the alienation is grossly
excessive, the redemptioner shall pay
only a reasonable one.
xxx xxx xxx
Art. 1623. The right of legal pre-
emption or redemption shall not be
exercised except within thirty days from
the notice in writing by the prospective
vendor, or by the vendor, as the case may
be. The deed of sale shall not be recorded
in the Registry of Property unless
accompanied by an affidavit of the vendor
that he has given written notice thereof
to all possible redemptioners.
MARC REALTY would apply the ruling in
Cabrera v. Villanueva4 and De la Merced
v. De Guzman5 where an offer to redeem was
Page 11 of 30
 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
required for the exercise of the right of
redemption. On the other hand, LEE CHUY
REALTY anchors its claim on Tioseco v.
Court of Appeals,6 Tolentino v. Court of
Appeals,7 and Belisario v. Intermediate
Appellate Court.8 Specifically, in
Cabrera v. Villanueva9 we held that for
the legal and effective exercise of the
right of legal redemption one must make
the offer within the period set in Art.
1623. In other words, if no claim or offer
is made within thirty (30) days from
written notice, no action may be allowed
to enforce the right of redemption. But
in Tolentino v. Court of Appeals,10
Tioseco v. Court of Appeals11 and
Belisario v. Intermediate Appellate
Court12 we adopted the view that a formal
offer to redeem, accompanied by a bona
fide tender of the redemption price, is
not essential where the right to redeem
is exercised through a judicial action
within the redemption period and
simultaneously depositing the redemption
price. The formal offer to redeem
accompanied by a bona fide tender of the
redemption price prescribed by law is only
essential to preserve the right of
redemption for future enforcement even
beyond the period of redemption. The
filing of the action itself within the
period of redemption is equivalent to a
formal offer to redeem.
A judicious scrutiny of the cases herein
cited impugns the impression of MARC
REALTY that they enunciate conflicting
doctrines. On the contrary, we view them
as complementing one another. The Court
of Appeals erroneously concluded that a
prior tender or offer of redemption is a
prerequisite or precondition to the
filing of the action for legal redemption,
notwithstanding prevailing jurisprudence
holding that to avail of the right of
redemption what is essential is to make
an offer to redeem within the prescribed
period. There is actually no prescribed
form for an offer to redeem to be properly
effected. Hence, it can either be through
a formal tender with consignation, or by
filing a complaint in court coupled with
consignation of the redemption price
within the prescribed period. What is
condition precedent to a valid exercise
of the right of legal redemption is either
the formal tender with consignation or the
filing of a complaint in court. What is
paramount is the availment of the fixed
and definite period within which to
exercise the right of legal redemption.13
In Hulganza v. Court of Appeals14 the
Court, citing previous decisions,
declared that the formal offer to redeem,
accompanied by a bona fide tender of the
redemption price, within the prescribed
period is only essential to preserve the
right of redemption for future
enforcement beyond such period of
redemption and within the period
prescribed for the action by the statute
of limitations. Where, as in the instant
case, the right to redeem is exercised
through judicial action within the
reglementary period the formal offer to
redeem, accompanied by a bona fide tender
of the redemption price, while proper, may
be unessential. The filing of the action
itself is equivalent to a formal offer to
redeem.
In sum, the formal offer to redeem is not
a distinct step or condition sine qua non
to the filing of the action in Court for
the valid exercise of the right of legal
redemption. What constitutes a condition
precedent is either a formal offer to
redeem or the filing of an action in court
together with the consignation of the
redemption price within the reglementary
period.
The doctrine in Tolentino, Tioseco and
Belisario cases was jettisoned by the
Court of Appeals on the ground that they
do not involve legal redemption by a co-
owner but by a mortgagor. It concluded
that the application of the rules on legal
redemption by a co-owner differs from the
legal redemption by a mortgagor. But the
law does not distinguish; neither should
we. For sure, the principle in the
aforecited cases is applicable regardless
of whether the redemptioner is a co-owner
or a mortgagor. Public policy favors
redemption regardless of whether the
redemptioner is a co-owner or mortgagor,
although perhaps with unequal force and
effect since each is given a fixed but
different period. A co-owner desirous of
exercising his right of legal redemption
is given a period of thirty (30) days from
notice of the sale within which to avail
of the right to redeem.15 Under the free
patent or homestead provisions of the
Public Land Act a period of five (5) years
from the date of conveyance is provided,16
the five-year period to be reckoned from
the date of the sale and not from the date
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 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
of registration in the office of the
Register of Deeds.17 The redemption of
extrajudicially foreclosed properties, on
the other hand, is exercisable within one
(1) year from the date of the auction sale
as provided for in Act No. 3135.18
WHEREFORE, the petition for certiorari is
GRANTED. The decision of respondent Court
of Appeals in CA-G.R. SP No. 24220 dated
22 November 1991 is REVERSED and SET
ASIDE. The decision of the Regional Trial
Court of Malolos, Bulacan, Br. 7, in Civil
Case No. 661-M-89 dated 26 December 1990
holding that the filing of the action for
legal redemption coupled with the
consignation of the redemption price is
equivalent to a formal offer to redeem as
a condition precedent to the valid
exercise of the right of legal redemption,
is REINSTATED.
Let the records of this case be REMANDED
to the court of origin for further
proceedings in the light of this
pronouncement.
SO ORDERED.
DIVISION
[GR No. 172720, Sep 14, 2015]
ELISEO MALTOS v. HEIRS OF EUSEBIO BORROMEO
DECISION
LEONEN, J.:
The sale of a parcel of agricultural land
covered by a free patent during the five-
year prohibitory period under the Public
Land Act is void. Reversion of the parcel
of land is proper. However, reversion
under Section 101 of the Public Land Act
is not automatic. The Office of the
Solicitor General must first file an
action for reversion.
On February 13, 1979, Eusebio Borromeo was
issued Free Patent No. 586681 over a piece
of agricultural land located in San
Francisco, Agusan del Sur, covered by
Original Certificate of Title No. P-
9053.[1]
On June 15, 1983, well within the five-
year prohibitory period, Eusebio Borromeo
sold the land to Eliseo Maltos.[2]
Eusebio Borromeo died on January 16, 1991.
His heirs claimed that prior to his death,
he allegedly told his wife, Norberta
Borromeo,[3] and his children to nullify
the sale made to Eliseo Maltos and have
the Transfer Certificate of Title No. T-
5477 cancelled because the sale was within
the five-year prohibitory period.[4]
On June 23, 1993, Norberta Borromeo and
her children (heirs of Borromeo) filed a
Complaint for Nullity of Title and
Reconveyance of Title against Eliseo
Maltos, Rosita Maltos, and the Register
of Deeds of Agusan del Sur.[5] The case
was docketed as Civil Case No. 946.[6]
Eliseo Maltos and Rosita Maltos (Maltos
Spouses) filed their Answer, arguing that
the sale was made in good faith and that
in purchasing the property, they relied
on Eusebio Borromeo's title. Further, the
parties were in pari delicto. Since the
sale was made during the five-year
prohibitory period, the land would revert
to the public domain and the proper party
to institute reversion proceedings was
the Office of the Solicitor General.[7]
The Register of Deeds of Agusan del Sur
also filed an Answer, arguing that the
deed of sale was presented for
Registration after the five-year
prohibitory period, thus, it was
ministerial on its part to register the
deed.[8]
The heirs of Borromeo countered that good
faith was not a valid defense because the
prohibitory period appeared on the face
of the title of the property.[9]
The Regional Trial Court[10] of
Prosperidad, Agusan del Sur narrowed down
the issues to the following:
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 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
1. Whether or not the herein plaintiffs
are the legal heirs of the late Eusebio
Borromeo.
2. Whether or not the sale of the disputed
property within the prohibitory period is
valid or binding.[11]
The trial court dismissed the Complaint
on the ground of failure to state a cause
of action.[12] Also, the heirs of Borromeo
did not have a right of action because
they were unable to establish their status
as heirs of the late Eusebio Borromeo.[13]
They may have declared themselves the
legal heirs of Eusebio Borromeo, but they
did not present evidence to prove their
allegation.[14] Further, the
determination of their rights to
succession must be established in special
proceedings.[15]
The trial court also ruled that "[t]he
sale was null and void because it was
within the five (5) year prohibitionary
[sic] period"[16] under the Public Land
Act.[17] The defense of indefeasibility
of title was unavailing because the title
to the property stated that it was
"subject to the provisions of Sections
118, 119, 121, 122 and 124"[18] of the
Public Land Act.[19] Since the property
was sold within the five-year prohibitory
period, such transfer "result[ed] in the
cancellation of the grant and the
reversion of the land to the public
domain."[20]
As to the defense of in pari delicto, the
trial court ruled against its
applicability,[21] citing Egao v. Court
of Appeals (Ninth Division).[22]
The rule of pari delicto non oritur action
(where two persons are equally at fault
neither party may be entitled to relief
under the law), admits of exceptions and
does not apply to an inexistent contract,
such as, a sale void ab initio under the
Public Land Act, when its enforcement or
application runs counter to the public
policy of preserving the grantee's right
to the land under the homestead law.[23]
(Citation omitted)
The trial court further held that since
the sale was null and void, no title
passed from Eusebio Borromeo to Eliseo
Maltos.[24] The dispositive portion of
the trial court's Decision states:
WHEREFORE, for lack of merit, the
complaint under consideration is hereby
ordered DISMISSED. No pronouncement as to
costs.
SO ORDERED.[25]
On appeal, the heirs of Borromeo argued
that they were able to prove their status
as heirs through the testimony of their
mother, Norberta Borromeo.[26]
The heirs of Borromeo also argued that the
trial court should have ordered the
"revival of [Original Certificate of
Title] No. P-9053 in the name of the Heirs
of EUSEBIO BORROMEO."[27]
The Court of Appeals[28] reversed the
Decision of the trial court and held that
since Eusebio Borromeo sold his property
within the five-year prohibitory period,
the property should revert to the
state.[29] However, the government has to
file an action for reversion because
"reversion is not automatic."[30] While
there is yet no action for reversion
instituted by the Office of the Solicitor
General, the property should be returned
to the heirs of Borromeo.[31] The
dispositive portion of the Court of
Appeals' Decision states:
WHEREFORE, premises considered, the
instant Appeal is GRANTED. The Decision
of the court a quo in Civil Case No. 946
is hereby SET ASIDE and another one is
entered (1) ordering Appellee ELISEO
MALTOS to reconvey the property subject
matter of this litigation to Appellants
upon the refund by the latter to Appellee
ELISEO MALTOS the sum of P36,863.00, all
expenses for the reconveyance to be borne
by the buyer, ELISEO MALTOS, herein
Appellee and (2) ordering the Register of
Deeds of Prosperidad, Agusan del Sur to
cancel TCT No. T-5477 and revive OCT No.
P-9053.
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 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
Let a copy of this Decision be furnished!
the Office of the Solicitor General (OSG)
for its information and appropriate
action and to inform this court within a
period of thirty (30) days from receipt
hereof of the action done under the
premises.
SO ORDERED.[32] (Emphasis supplied)
The Maltos Spouses filed a Motion for
Reconsideration, arguing that since the
prohibition on transfers of property is
provided by law, only the heirs of
Borromeo should be punished.[33]
Punishment, in this case, would come in
the form of preventing the heirs of
Borromeo from re-acquiring the land.[34]
Instead, the land should revert back to
the state.[35] The Maltos Spouses also
prayed that they be reimbursed for the
improvements they introduced on the
land.[36] Assuming that they would be
found to be also at fault, the principle
of in pari delicto should apply.[37]
The Court of Appeals[38] denied the Motion
for Reconsideration,[39] reasoning that
it could not rule on the issue of who
between the parties had the better right
to the property.[40] Also, it was the
government who should decide whether the
heirs of Borromeo "should retain
ownership of the land."[41] With regard
to the applicability of the in pari
delicto doctrine, the Court of Appeals
held that in pari delicto does not apply
in cases where its application will
violate the policy of the state.[42]
On May 10, 2006, the Maltos Spouses |filed
a Petition[43] for Review before this
court, questioning the Decision and
Resolution of the Court of Appeals in CA-
G.R. CV No. 77142.[44]
This court, in a Resolution[45] dated July
5, 2006, required the heirs of Borromeo
to file their Comment.
The heirs of Borromeo filed their
Comment,[46] which was noted by this court
in a Resolution[47] dated September 25,
2006. In the same Resolution, this court
required the Maltos Spouses to file their
Reply.[48]
In a Resolution dated March 28, 2007, this
court required Attys. Ma. Cherell L. De
Castro and Gener C. Sansaet, counsels for
the Maltos Spouses, to show cause why they
should not be disciplinarily dealt with
for their failure to file a Reply. They
were also required to comply with the
Resolution dated September 25, 2006.[50]
Counsels for the Maltos Spouses filed a]
Compliance,[51] together with the
Reply.[52] In a Resolution[53] dated
August 15, 2007, this court noted and
accepted the Compliance, and also noted
the Reply.
I
The Maltos Spouses argue that the heirs
of Borromeo did not present evidence to
prove that they are indeed the heirs of
Eusebio Borromeo. The heirs of Borromeo
did not present the death certificate of
Eusebio Borromeo, the marriage
certificate of Eusebio Borromeo and
Norberta Borromeo, or any of the birth
certificates of the children of
Eusebio.[54] While Norberta Borromeo and
two of her children testified,[55] their
testimonies should be considered as self-
serving.[56] The Maltos Spouses cite
Article 172[57] of the Family Code, which
enumerates how filiation may be
established.[58]
The Maltos Spouses also contest the Court
of Appeals' ruling stating that they did
not rebut the testimonies of the heirs of
Borromeo because they continuously argued
that the heirs of Borromeo were unable to
prove their status as heirs.[59]
The Maltos Spouses further argue that it
was error for the Court of Appeals not to
apply the in pari delicto rule,
considering that the sale violated
Section 118[60] of the Public Land
Act.[61] Since both parties are at fault,
it follows that Article 1412[62] of the
Civil Code applies.[63]
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 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
In addition, the Maltos Spouses pray for
the reimbursement of the value of the
improvements on the property to prevent
unjust enrichment on the part of the heirs
of Borromeo.[64] The Maltos Spouses
enumerate the following circumstances to
show why they should be reimbursed:
a. EUSEBIO has already long received and
enjoyed the amount of the purchase price
of the subject land from petitioners.
b. The value of the purchase price of
PHP36,863.00 paid in 1983 have since then
greatly depreciated. If petitioners had
deposited that money in bank or loaned it
to another person instead of purchasing
EUSEBIO's property, it would have at least
earned some interest. However, the Court
of Appeals incorrectly assumed that the
return of the purchase price would be
sufficient compensation to the
petitioners.
c. The value of the improvements
introduced by petitioners on the subject
property is much greater than the purchase
price that they initially paid on the
land. Petitioners estimate the value of
the improvements, including hundreds of
various fruit-bearing trees and four
residential houses, to be at least
PHP900,000.00. Because of these
improvements, not only can respondents
sell the land at a much higher price, they
can even sell the improvements and profit
from them. It would be the height of
injustice if all the petitioners would
receive in turning over the subject
property to the respondents is the
purchase price that was previously paid
EUSEBIO under the deed of sale.[65]
On the other hand, the heirs of Borromeo
argue that the testimonies of Norberta
Borromeo and Susan Borromeo Morales on
their relationship to Eusebio Borromeo
were not refuted by the Malios Spouses.
Thus, they were able to prove their status
as heirs.[66]
The heirs of Borromeo also argue that the
in pari delicto rule is not applicable
because in Santos v. Roman Catholic Church
of Midsayap, et al.,[67] this court stated
that the in pari delicto rule does not
apply if its application will have the
effect of violating public policy.[68]
With regard to the claim for
reimbursements, the heirs of Borromeo
argue that the Maltos Spouses did not
raise their claim for reimbursement in
their Answer to the Complaint. They are
now barred from claiming reimbursement
since this was not raised at the first
instance.[69]
Based on the arguments of the parties, the
issues for resolution are:
First, whether the Court of Appeals erred
in reversing the Decision of the trial
court and ordering the reconveyance of the
property from petitioners Spouses Eliseo
Maltos and Rosita Maltos to respondents
heirs of Eusebio Borromeo;
Second, whether the Court of Appeals erred
in not applying the doctrine of in pari
delicto; and
Finally, whether the Court of Appeals
erred in ruling that petitioners Spouses
Eliseo Maltos and Rosita Maltos are not
entitled to reimbursement for the
improvements they introduced on the land.
II
The five-year period prohibiting the sale
of land obtained under homestead or free
patent is provided under Section 118 of
the Public Land Act, which states:
SECTION 118. Except in favor of the
Government or any of its branches, units,
or institutions, or legally constituted
banking corporations, lands acquired
under free patent or homestead provisions
shall not be subject to encumbrance or
alienation from the date of the approval
of the application and for a term of five
years from and after the date of issuance1
of the patent or grant, nor shall they
become liable to the satisfaction of any
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 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
debt contracted prior to the expiration
of said period; but the improvements or
crops on the land may be mortgaged] or
pledged to qualified persons,
associations, or corporations.
The reason for prohibiting the alienation
or encumbrance of properties covered by
patent or grant was explained in
Metropolitan Bank and Trust Company v.
Viray.[70]
In Metropolitan Bank, Edgardo D. Viray and
his wife contracted several loans with
Metrobank which they failed to pay.[71]
Metrobank filed a Complaint for sum of
money before the Regional Trial Court in
Manila.[72] In 1982, during the pendency
of the case, free patents over three
parcels of land were issued in favor of
Viray.[73] The Complaint for sum of money
was decided in 1983 in favor of
Metrobank.[74] In 1984, the trial court
issued a writ of execution over the
parcels of land.[75] An auction sale was
held, and Metrobank emerged as the winning
bidder.[76] Viray filed an action for
annulment of sale.[77] This court ruled
that the auction sale was made within the
five-year prohibitory period[78] and
explained that:
[T]he main purpose in the grant of a freq
patent of homestead is to preserve and
keep in the family of the homesteader that
portion of public land which the State has
given to him so he may have a place to
live with his family and become a happy
citizen and a useful member of the
society. In Jocson v. Soriano, we held
that the conservation of a family home is
the purpose of homestead laws. The policy
of the state is to foster, families as the
foundation of society, and thus promote
general welfare. . . .
Section 118 of CA 141, therefore, is
predicated on public policy. Its
violation gives rise to the cancellation
of the grant and the reversion of the land
and its improvements to the government at
the instance of the latter. The provision
that "nor shall they become liable to the
satisfaction of any debt contracted prior
to that expiration of the five-year
period" is mandatory and any sale made in
violation of such provision is void and
produces no effect whatsoever, just like
what transpired in this case. Clearly, it
is not within the competence of any
citizen to barter away what public policy
by law seeks to preserve.[79] (Citations
omitted)
In Republic v. Court of Appeals,[80]
Josefina L. Morato applied for free patent
over a parcel which was granted.[81]
Morato mortgaged and leased a portion of
the land within the five-year prohibitory
period.[82] Later on, it would also be
discovered that Morato's land formed part
of Calauag Bay.[83] The Republic filed a
Complaint for cancellation of title and
reversion of the parcel of land.[84] This
court held that "lease" and "mortgage"
were encumbrances on the parcel of
land.[85] This court also discussed the
policy behind the five-year prohibitory
period:
It is well-known that the homestead laws
were designed to distribute disposable
agricultural lots of the State to land-
destitute citizens for their home and
cultivation. Pursuant to such benevolent
intention the State prohibits the sale or
encumbrance of the homestead (Section
116) within five years after the grant of
the patent. After that five-year period
the law impliedly permits alienation of
the homestead; but in line with the
primordial purpose to favor the
homesteader and his family the statute
provides that such alienation or
conveyance (Section 117) shall be subject
to the right of repurchase by the
homesteader, his widow or heirs within
five years. This section 117 is
undoubtedly a complement of Section 116.
It aims to preserve and keep in the family
of the homesteader that portion of public
land which the State had gratuitously
given to him. It would, therefore, be in
keeping with this fundamental idea to
hold, as we hold, that the right to
repurchase exists not only when the
original homesteader makes the
conveyance, but also when it is made by
his widow or heirs. This construction is
clearly deducible from the terms of the
statute.
The effect of violating the five-year
prohibitory period is provided under
Section 124 of the Public Land Act, which
provides:
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 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
SECTION 124. Any acquisition, conveyance,
alienation, transfer, or other contract
made or executed in violation of any of
the provisions of sections one hundred and
eighteen, one hundred and twenty, one
hundred and twenty-one, one hundred and
twenty-two, and one hundred and twenty-
three of this. Act shall be unlawful and
null and void from its execution and shall
produce the effect of annulling and
cancelling the grant, title, patent, or
permit originally issued, recognized or
confirmed, actually or presumptively, and
cause the reversion of the property and
its improvements to the State.
In this case, Section 101[87] of the
Public Land Act is applicable since title
already vested in Eusebio Borromeo's
name. Both the trial court and the Court
of Appeals found that the sale was made
within the five-year prohibitory period.
Thus, there is sufficient cause to revert
the property in favor of the state.
However, this court cannot declare
reversion of the property in favor of the
state in view of the limitation imposed
by Section 101 that an action for
reversion must first be filed by the
Office of the Solicitor General.
III
The doctrine of in pari delicto non oritur
actio is inapplicable when public policy
will be violated.
constitute criminal offenses.
The in pari delicto rule is provided under
Articles 1411 and 1412 of the Civil Code.
Article 1411 pertains to acts that
constitute criminal offenses, while
Article 1412 pertains to acts that do not
These provisions state:
ART. 1411. When the nullity proceeds from
the illegality of the cause or object of
the contract, and the act constitutes a
criminal offense, both parties being in
pari delicto, they shall have no action
against each other, and both shall be
prosecuted. Moreover, the provisions of
the Penal Code relative to the disposal
of effects or instruments of a crime shall
be applicable to the things or the price
of the contract.
This rule shall be applicable when only
one of the parties is guilty; but the
innocent one may claim what he has given,
and shall not be bound to comply with his
promise.
ART. 1412. If the act in which the
unlawful or forbidden cause consists does
not constitute a criminal offense, the
following rules shall be observed:
(1) When the fault is on the part of both
contracting parties, neither may recover
what he has given by virtue of the
contract, or demand the performance of the
other's undertaking;
(2) When only one of the contracting
parties is at fault, he cannot recover
what he has given by reason of the
contract, or ask for the fulfilment of
what has been promised him. The other, who
is not at fault, may demand the return of
what he has given without any obligation
to comply with his promise.
Santos involved the sale of a parcel of
land within the five-year prohibitory
period.[88] The Roman Catholic Church
raised the defense of in pari delicto.[89]
It was also argued by the Rornan Catholic
Church that the effect of the sale would
be the reversion of the] property to the
state.[90] This court held that:
Section 124 of the Public Land Act indeed
provides that any acquisition, conveyance
or transfer executed in violation of any
of its provisions shall be null and void
and shall produce the effect of annulling
and cancelling the grant or patent and
cause the reversion of the property to the
State, and the principle of pari delicto
has been applied by this Court in a number
of cases wherein the parties to a
transaction have proven to be guilty of
effected the transaction with knowledge
of the cause of its invalidity. But we
doubt if these principles can now be
invoked considering the philosophy and
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 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
the policy behind the approval of the
Public Land Act. The principle underlying
pari delicto as known here and in the
United States is not absolute in its
application. It recognizes certain
exceptions one of them being when its
enforcement or application runs counter
to an avowed fundamental policy or to
public interest. As stated by us in the
Rellosa case, "This doctrine is subject
to one important limitation, namely,
[']whenever public policy is considered
advanced by allowing either party to sue
for relief against the transaction[']"
The case under consideration comes within
the exception above adverted to. Here
appellee desires to nullify a transaction
which was done in violation of the law.
Ordinarily the principle of pari delicto
would apply to her because her
predecessor-in-interest has carried out
the sale with the presumed knowledge of
its illegality, but because the subject
of the transaction is a piece of public
land, public policy requires that she, as
heir, be not prevented from re-acquiring
it because it was given by law to her
family for her home and cultivation. This
is the policy on which our homestead law
is predicated. This right cannot be
waived. "It is not within the competence
of any citizen to barter away what public
policy by law seeks to preserve." We are,
therefore, constrained to hold that
appellee can maintain the present action
it being in furtherance of this
fundamental aim of our homestead law.[91]
(Emphasis supplied, citations omitted)
The non-application of the in pari delicto
rule where public policy would be violated
has also been applied in other cases.
In Pajuyo v. Court of Appeals,[92] this
court held that in pari delicto "is not
[applicable to [e]jectment [c]ases"[93]
and cited Drilon v. Gaurana,[94] which
discussed the policy behind ejectment
cases:
It must be stated that the purpose of an
action of forcible entry and detainer is
that, regardless of the actual condition
of the title to the property, the party
in peaceable quiet possession shall not
be turned out by strong hand, violence or
terror. In affording this remedy of
restitution the object of the statute is
to prevent breaches of the peace and
criminal disorder which would ensue from
the withdrawal of the remedy, and the
reasonable hope such withdrawal would
create that some advantage must accrue to
those persons who, believing themselves
entitled to the possession of property,
resort to force to gain possession rather
than to some appropriate action in the
courts to assert their claims.[95]
This court elucidated that:
Clearly, the application of the principle
of pari delicto to a case of ejectment
between squatters is fraught with danger.
To shut out relief to squatters on the
ground of pari delicto would openly invite
mayhem and lawlessness. A squatter would
oust another squatter from possession of
the lot that the latter had illegally
occupied, emboldened by the knowledge
that the courts would leave them where
they are. Nothing would then stand in the
way of the ousted squatter from re-
claiming his prior possession at all cost.
Petty warfare over possession of
properties is precisely what ejectment
cases or actions for recovery of
possession seek to prevent. Even the owner
who has title over the disputed property
cannot take the law into his own hands to
regain possession of his property. The
owner must go to court.[96] (Citation
omitted)
In Loria v. Muñoz, Jr.,[97] Carlos Loria
asked Ludolfo Muñoz, Jr. "to advance
[P]2,000,000.00 for a subcontract of a
[P]50,000,000.00 river-dredging project
in Guinobatan."[98] Loria informed Muñoz
that the project would be awarded to
Sunwest Construction and Development
Corporation, and Sunwest would
subcontract to Muñoz.[99] Muñoz agreed to
Loria's proposal.[100] When the river-
dredging project was finished, Loria did
not return the P2,000,000.00 despite
Muñoz's demand.[101] Complaint for sum of
money.[102] Loria raised the argument
that Muñoz "should not be allowed to
recover the money"[103] since they were
in pari delicto.[104] This court held that
under the principle of unjust enrichment,
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 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
the sum of money should be returned.[105]
In so ruling, this court cited Gonzalo v.
Tarnate, Jr.[106] where it was explained
that:
. . . the application of the doctrine of
in pari delicto is not always rigid. An
accepted exception arises when its
application contravenes well-established
public policy. In this jurisdiction,
public policy has been defined as "that
principle of the law which holds that no
subject or citizen can lawfully do that
which has a tendency to hi injurious to
the public or against the public good."
Unjust enrichment exists, according to
Hulst v. PR Builders, Inc., "when a person
unjustly retains a benefit at the loss of
another, or when a person retains money
or property of another against the
fundamental principles of justice, equity
and good conscience." The prevention of
unjust enrichment is a recognized public
policy of the State, for Article 22 of the
Civil Code explicitly provides that
"[e]very person who through an act of
performance by another, or any other
meins, acquires or comes into possession
of something at the expense of the latter
without just or legal ground, shall return
the same to him." It is wel I to note that
Article 22 "is part of the chapter of the
Civil Code on Human Relations, the
provisions of which were formulated as
basic principles to be observed for the
rightful relationship between human
beings and for the stability of the social
order; designed to indicate certain norms
that spring from the fountain of good
conscience; guides for human conduct that
should run as golden threads through
society to the end that law may approach
its supreme ideal which is the sway and
dominance of justice."[107]
As the in pari delicto rule is not
applicable, the question now arises as to
who between the parties have a better
right to possess the subject parcel of
land. This issue was addressed in Santos:
What is important to consider now is who
of the parties is the better entitled to
the possession of the land while the
government does not take steps to assert
its title to the homestead. Upon annulment
of the sale, the purchaser's claim is
reduced to the purchase price and its
interest. As against the vendor or his
heirs, the purchaser is no more entitled
to keep the land than any intruder. Such
is the situation of the appellants. Their
right to remain in possession of the land
is no better than that of appellee and,
therefore, they should not be allowed to
remain in it to the prejudice of appellee
during and until the government takes
steps toward its reversion to the
State.[108] (Emphasis supplied, citation
omitted)
In Binayug v. Ugaddan,[109] which
involved the sale of two properties
covered by a homestead patent,[110] this
court cited jurisprudence showing that in
cases involving the sale of a property
covered by the five-year prohibitory
period, the property should be returned
to the grantee.[111]
Applying the ruling in Santos and Binayug,
this court makes it clear that petitioners
have no better right to remain in
possession of the property against
respondents.
Hence, the Court of Appeals did not err
in ruling that while there is yet no
action for reversion filed by the Office
of the Solicitor General, the property
should be conveyed by petitioners to
respondents.
III
Petitioners' argument that respondents
failed to establish their status as heirs
is belied by their admissions during trial
and in their pleadings. Petitioners t know
the identity of Eusebio Borromeo's wife.
As quoted in the trial court's Decision,
petitioners alleged in their Answer that:
[I]t was the late Eusebio Borromeo and his
wife who came along in Bayugan 2, San
Francisco, Agusan del Sur, requesting the
said defendants to purchase their land
because they badly need money and
notwithstanding the fact that they have a
little amount and out of pity bought the
said land.[112]
Page 20 of 30
 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
In the Reply, respondents alleged: In any case, the Court of Appeals did not
err when it stated in its Resolution dated
April 7, 2006 that:
The allegation that the late Eusebio
Borrjomeo and his wife went to Bayugan II,
San Francisco, Agusan del Sur in order to With respect to Appellees' claim for the
sell the land to the defendant Eliseo reimbursement of the improvements on the
Maltos has no factual basis, the truth of land in question, they are hereby declared
the matter is that the late Eusebio to have lost and forfeited the value of
Borromeo, together with defendant Eliseo the necessary improvements that they made
Maltos went to Esperanza, Sultan Kudarat thereon in the same manner that Appellants
to secure the signature of the wife.[113] should lose the value of the products
gathered by the Appellees from the said
land.[118]
In addition, when petitioner Eliseo
Maltos was presented in court, he
identified the signatures of the The Court of Appeals cited Angeles, et at
witnesses on the deed of sale as the v. Court of Appeals, et al.[119] and
signatures of Eusebio Borromeo's Arsenal v. Intermediate Appellate
children, namely, Susan, Ana, and Nicolas Court.[120] In Angeles, this court
Borromeo.[114] discussed that:

Respondents' allegation that they are the The question that now poses is whether the
heirs of Borromeo is admitted by return of the value of the products
petitioners. Thus, the Court of Appeals gathered from the land by the defendants
did not err in ruling that "the fact that and the expenses incurred in the
Appellants [referring to respondents] are construction of the dike—all useful and
the spouse and children of the late necessary expenses—should be ordered to
EUSEBIO remains unrebutted."[115] be returned by the defendants to the
plaintiffs. While we believe that the rule
of in pari delicto should not apply to the
IV sale of the homestead, because such sale
is contrary to the public policy
enunciated in the homestead law, the loss
of the products realized by the defendants
With regard to the claim for and the value of the necessary
reimbursement, respondents argue that it improvements made by them on the land
was not raised as a counterclaim in the should not be excepted from the
Answer to the Complaint. application of the said rule because no
cause or reason can be cited to justify
an exception. It has been held that the
During trial, petitioner Eliseo Maltos rule of in pari delicto is inapplicable
testified that when he entered the land, only where the same violates a well-
there were around 100 trees, including established public policy.
coconut trees and a few banana trees. He
then planted additional coconut trees
which, at the time of the trial, were . . . .
already bearing fruit.[116] Petitioner
Eliseo Maltos' testimony was not rebutted
by respondents.
We are constrained to hold that the heirs
of the homesteader should be declared to
have lost and forfeited the value of the
The general rule is that "[a] compulsory products gathered from the land, and so
counterclaim . . . not set up shall be should the defendants lose the value of
barred."[117] Further, the computation of the necessary improvements that they have
the value of the improvements on the land made thereon.[121]
entails findings of fact.

In Arsenal, the property covered by a

homestead patent had been sold to Suralta

Page 21 of 30
 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
in 1957,[122] while the Complaint was
filed before the trial court in 1974.[123]
The case was decided by this court in
1986.[124] Thus, Suralta had been in
possession of the property for
approximately 17 years before a Complaint
was filed. This court held that:
The value of any improvements made on the
land and the interests on the purchase
price are compensated by the fruits the
respondent Suralta and his heirs received
from their long possession of the
homestead.[125]
Angeles and Arsenal both involved the sale
of a parcel of land covered by a homestead
patent within the five-year prohibitory
period. These cases also involved the
introduction of improvements on the
parcel of land by the buyer.
Restating the rulings in Angeles and
Arsenal, this court finds that while the
rule on in pari delicto does not apply
policy, if its effect is to violate public
policy it is applicable with regard to
value of the improvements introduced by
petitioner Eliseo Maltos. Petitioners had
been in possession of the land for 20
years before the heirs of Borromeo filed
a Complaint. The expenses incurred by
petitioners in introducing improvements
on the land for which they seek
reimbursement should already be
compensated by the fruits they received
from the improvements.
V the patent and the certificate of title
Reversion is a remedy provided under
Section 101 of the Public Land Act:
SECTION 101. All actions for the reversion
to the Government of lands of the public
domain or improvements thereon shall be
instituted by the Solicitor-General or
the officer acting in his stead, in the
proper courts, in the name of Commonwealth
of the Philippines.
The purpose of reversion is "to restore
public land fraudulently awarded and
disposed of to private individuals or
corporations to the mass of public
domain."[126]
The general rule is that reversion of
lands to the state is not automatic, and
the Office of the Solicitor General is the
proper party to file an action for
reversion.
In Villacorta v. Ulanday,[127] defendant-
appellee Vicente Ulanday admitted that
his purchase of a parcel of land covered
by a homestead patent was made within the
five-year prohibitory period, but argued
that since the sale was in violation of
law,[128] the property should
automatically revert to the state.[129]
This court held that reversion was not
automatic, and government must file an
appropriate action so that the land may
be reverted to the state.[130]
Ortega v. Tan[131] involved the sale and
mortgage of a parcel of land covered by a
free patent.[132] The series of
transactions for the sale and mortgage of
the property had been initiated within the
five-year prohibitory period but was
finalized after the prohibitory
period.[133] This court held that the sale
and mortgage violated Section 118 of the
Public Land Act and that reversion was
proper.[134] This court also clarified
that:
[Reversion] is not automatic. The
government has to take action to cancel
in order that the land involved may be
reverted to it. Correspondingly, any new
transaction would be subject to whatever
steps the government may take for the
reversion to it.[135] (Citation omitted)
Alvarico v. Solau[136] involved a
miscellaneous sales application over a
parcel of land by Fermina Lopez.[137]
Subsequently, Lopez executed a deed of
self-adjudication and transfer of rights
in favor of Amelita Sola.[138] The Bureau
of Lands approved the transfer of rights,
and title was issued in Sola's name.[139]
Castorio Alvarico then filed an action for
reconveyance, claiming that the parcel of
land was donated to him.[140] He also
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 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
alleged that Sola acquired the property
in bad faith.[141] This court held that
Alvarico's allegation of bad faith was not
supported by evidence and that in any
case, "only the State can institute
reversion proceedings under Sec[tion] 101
of the Public Land Act."[142] This court
restated Section 101 of the Public Land
Act:
[A] private individual may not bring an
action for reversion or any action which
would have the effect of canceling a free
patent and the corresponding certificate
of title issued on the basis thereof, such
that the land covered thereby will again
form part of the public domain. Only the
Solicitor General or the officer acting
in his stead may do so. Since [the] title
originated from a grant by the government,
its cancellation is a matter between the
grantor and the grantee.[143] (Citations
omitted)
The rule in Alvarico was cited in Cawis,
et al. v. Hon. Cerilles, et al.[144] In
Cawis, the validity of a sales patent and
original certificate of title over a
parcel of land in Baguio was
questioned.[145] This court denied the
Petition[146] and ruled that the
Complaint was actually a reversion suit,
which can be filed only by the Office of
the Solicitor General or a person acting
in its stead.[147]
It was also discussed in Cawis that:
The objective of an action for reversion
of public land is the cancellation of the
certificate of title an|l the resulting
reversion of the land covered by the title
to the State| This is why an action for
reversion is oftentimes designated asj an
annulment suit or a cancellation
suit.[148]
We clarify that the remedy of reversion
is not the same as the remedy of
declaration of nullity of free patents and
certificate of title. In reversion, the
"allegations in the complaint would admit
State ownership of the disputed
land[,]"[149] while in an action for the
declaration of nullity of free patent and
certificate of title, the allegations
would include "plaintiffs ownership of
the contested lot prior to the issuance
of [the] free patent and certificate of
title[.]"[150]
Since an action for reversion presupposes
that the property in dispute is owned by
the state, it is proper that the action
be filed by the Office of the Solicitor
General, being the real party-in-
interest.
There is, however, an exception to the
rule that reversion is not automatic.
Section 29 of the Public Land Act
provides:
SECTION 29. After the cultivation of the
land has begun, the purchaser, with the
approval of the Secretary of Agriculture
and Commerce, may convey or encumber his
rights to any person, corporation, or
association legally qualified under this
Act to purchase agricultural public
lands, provided such conveyance or
encumbrance does not affect any right or
interest of the Government in the land:
And provided, further, That the
transferee is not delinquent in the
payment of any installment due and
payable. Any sale and encumbrance made
without the previous approval of the
Secretary of Agriculture and Commerce
shall be null and void and shall produce
the effect of annulling the acquisition
and reverting the property and all rights
to the State, and all payments on the
purchase price theretofore made to the
Government shall be forfeited. After the
sale has been approved, the vendor shall
not lose his right to acquire agricultural
public lands under the provisions of this
Act, provided he has the necessary
qualifications. (Emphasis supplied)
In Francisco v. Rodriguez, et al,[151]
this court differentiated reversion under
Sections 29 and 101 of the Public Land
Act.[152] This court explained that
reversion under Section 29 is self-
operative, unlike Section 101 which
requires the Office of the Solicitor
General to institute reversion
proceedings.[153] Also, Section 101
applies in cases where "title has already
vested in the individual[.]"[154] The
Director of Lands sought to execute the
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 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
Decision in Francisco v. Rodriguez which the Public Land Act. . . . However, the
petitioner Ursula Francisco opposed, disposition is merely provisional because
arguing that only 29 hectares were the applicant has still to comply with the
reverted to the state since she was in requirements prescribed by law before . .
possession of the remaining four . . any patent is issued. After the
hectares.[155] This court held that the requisites of the law are complied with
entire property reverted to the by the applicant to the satisfaction of
state.[156] This court also explained why the Director [of] Lands, the patent is
Francisco v. Rodriguez was covered by issued. It is then that the land covered
Section 29 and not Section 101 of the by the application may be considered
Public Land Act: "permanently disposed of by the
Government."[157] (Citations omitted)

By transgressing the law, i.e., allowing

herself to be a dummy in the acquisition
of the land and selling the same without
the previous approval of the Secretary of
Agriculture and Natural Resources,
plaintiff-appellant herself [referring to
Ursula Francisco] has eliminated the very
source (Sales Application) of her claim
to Lot No. 595, as a consequence of which,
she cannot later assert any right or
interest thereon. This is the imperative
import of the pronouncements in G.R. No.
L-8263 and in G.R. No. L-15605 that the
invalidity of the conveyance by
plaintiff-appellant "produced as a appropriate institution of a case for
consequence the reversion of the property
with all rights thereto to the State." As
a matter of fact, Section 29 of the Public
Land Law (Commonwealth Act No. 141)
expressly ordains that any sale and
encumbrance made without the previous
approval of the Secretary of Agriculture
and Natural Resources "shall be null and
void and shall produce the effect of
annulling the acquisition and reverting
property and all rights thereto to the
State, and all payments on the purchase
price theretofore made to the Government
shall be forfeited." . . . .
In this case, a free patent over the
subject parcel of land was issued to
Eusebio Borromeo. This shows that he
already had title to the property when he
sold it to petitioner Eliseo Maltos. Thus,
Section 101 of the Public Land Act
applies.
WHEREFORE, the Petition is denied, and the
Decision and Resolution of the Court of
Appeals in CA-G.R. CV No. 77142 are
AFFIRMED, without prejudice to the
reversion.
Let a copy of this Decision be furnished
the Office of the Solicitor General for
its appropriate action with respect to the
reversion of the land in question.
SO ORDERED.
Carpio, (Chairperson), Brion, Del
Castillo, and Mendoza, JJ. , concur.

In fact, even if a sales application were

already given due course by the Director
of Lands, the applicant is not thereby
conferred any right over the land covered
by the application. It is the award made
by the Director to the applicant (if he
is the highest bidder) that confers upon
him a certain right over the land, namely,
"to take possession of the land so that
he could comply with the requirements
prescribed by law." It is at this stage,
when the award is made, that the land can
be considered "disposed of by the
Government," since the aforestated right
of the applicant has the effect of
withdrawing the land from the public
domain that is "disposable" by the
Director of Lands under the provisions of

Page 24 of 30
 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
B. SECTION 7, ARTICLE XII, 1987 deed of conveyance. Under Article 1498 of
CONSTITUTION the Civil Code of the Philippines, “when
the sale is made through a public
instrument, the execution thereof shall
G.R. Nos. 113472-73. December 20, 1994.* be equivalent to the delivery of the
object of the contract, if from the deed
ONG CHING PO, YU SIOK LIAN, DAVID ONG and the contrary does not appear or cannot
JIMMY ONG, petitioners, clearly be inferred.” If what petitioners
meant was that private respondent never
vs. lived in the building constructed on said
COURT OF APPEALS and SOLEDAD PARIAN, land, it was because her family had
respondents. settled in Iloilo.

Constitutional Law; Natural Resources; Evidence; Trusts; No express trust

Land Titles; Nationalization Laws; concerning an immovable or any interest
Aliens; Aliens are disqualified from therein may be proved by parole evidence.—
acquiring lands in the Philippines.—The There is no document showing the
capacity to acquire private land is made establishment of an express trust by
dependent upon the capacity to acquire or petitioner Ong Ching Po as trustor and
hold lands of the public domain. Private private respondent as trustee. Not even
land may be transferred or conveyed only Exhibit “B” can be considered as such a
to individuals or entities “qualified to document because private respondent, the
acquire lands of the public domain” (II registered owner of the property subject
Bernas, The Constitution of the of said “deed of sale,” was not a party
Philippines, 439-440 [1988 ed.]). The thereto. The oral testimony to prove the
1935 Constitution reserved the right to existence of the express trust will not
participate in the “disposition, suffice. Under Article 1443 of the Civil
exploitation, development and Code of the Philippines, “No express trust
utilization” of all “lands of the public concerning an immovable or any interest
domain and other natural resources of the therein may be proved by parole evidence.”
Philippines” for Filipino citizens or
corporations at least sixty percent of the
capital of which was owned by Filipinos. Same; Same; While an implied trust may be
Aliens, whether individuals or proved orally, the evidence to prove it
corporations, have been disqualified from must be trustworthy and received by the
acquiring public lands; hence, they have courts with extreme caution, and should
also been disqualified from acquiring not be made to rest on loose, equivocal
private lands. or indefinite declarations.—Undaunted,
petitioners argue that if they cannot
prove an express trust in writing, they
Same; Same; Same; Same; Same; A deed of can prove an implied trust orally. While
sale for a piece of land in favor of an an implied trust may be proved orally
alien is null and void for being contrary (Civil Code of the Philippines, Art.
to law.—Petitioner Ong Ching Po was a 1457), the evidence must be trustworthy
Chinese citizen; therefore, he was and received by the courts with extreme
disqualified from acquiring and owning caution, because such kind of evidence may
real property. Assuming that the be easily fabricated (Salao v. Salao, 70
genuineness and due execution of the deed SCRA 65 [1976]). It cannot be made to rest
of sale (Exhibit “B”) has been on vague and uncertain evidence or on
established, the same is null and void, loose, equivocal or indefinite
it being contrary to law. declarations (Cf. De Leon v. Molo-
Peckson, et al., 116 Phil. 1267 [1962]).
Petitioners do not claim that Ong Yee was
not in a financial position to acquire the
Property; Possession; Sales; Possession
land and to introduce the improvements
is transferred to the vendee by virtue of
thereon. On the other hand, Yu Siok Lian,
the notarized deed of conveyance.—It is
the wife of petitioner Ong Ching Po,
not correct to say that private respondent
admitted in her testimony in court that
never took possession of the property.
Ong Yee was a stockholder of Lam Sing
Under the law, possession is transferred
Corporation and was engaged in business.
to the vendee by virtue of the notarized

Page 25 of 30
 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
Same; Documentary Evidence; Secondary
Evidence; Order of Proof of Secondary
Evidence.—Secondary evidence is
admissible when the original documents
were actually lost or destroyed. But prior
to the introduction of such secondary
evidence, the proponent must establish
the former existence of the document. The
correct order of proof is as follows:
existence; execution; loss; contents.
This order may be changed if necessary in
the discretion of the court (De Vera v.
Aguilar, 218 SCRA 602 [1993]).
Same; Same; Same; Witnesses; Persons who
may testify as to the due execution of a
document.—The due execution of the
document may be established by the person
or persons who executed it; by the person
before whom its execution was
acknowledged; or by any person who was
present and saw it executed or who after
its execution, saw it and recognized the
signatures; or by a person to whom the
parties to the instrument had previously
confessed the execution thereof (De Vera
v. Aguilar, supra).
PETITION for review on certiorari of a
decision of the Court of Appeals.
The facts are stated in the opinion of the
Court.
Bautista, Salva, Arrieta, Salva for
petitioners.
Arthem Maceda Potian for private
respondent.
QUIASON, J.:
This is a petition for review on
certiorari under Rule 45 of the Revised
Rules of Court of the Decision of the
Court of Appeals dated July 15, 1993,
which dismissed the petition for
certiorari in CA-G.R. CV Nos. 28391-92.
I one-storey house erected thereon unto Mr.
On July 23, 1947, Ong Joi Jong sold a
parcel of land located at Fundidor Street,
San Nicolas to private respondent Soledad
Parian, the wife of Ong Yee. The latter,
the brother of petitioner Ong Ching Po,
died in January 1983; while petitioner Ong
Ching Po died in October 1986. The said
sale was evidenced by a notarized Deed of
Sale written in English. Subsequently,
the document was registered with the
Register of Deeds of Manila, which issued
Transfer Certificate of Title No. 9260
dated September 2, 1947 in the name of
private respondent.
According to private respondent, she
entrusted the administration of the lot
and building to petitioner Ong Ching Po
when she and her husband settled in
Iloilo. When her husband died, she
demanded that the lot be vacated because
she was going to sell it. Unfortunately,
petitioners refused to vacate the said
premises.
On March 19, 1984, private respondent
filed a case for unlawful detainer against
petitioner Ong Ching Po before the
Metropolitan Trial Court of Manila,
Branch 26. The inferior court dismissed
her case. The dismissal was affirmed by
the Regional Trial Court, Branch 10,
Manila. The decision of the Regional Trial
Court was, in turn, affirmed by the Court
of Appeals, which dismissed the petition.
The decision of the Court of Appeals
became final and executory.
Petitioners, on the other hand, claimed
that on July 23, 1946, petitioner Ong
Ching Po bought the said parcel of land
from Ong Joi Jong. The sale was evidenced
by a photo copy of a Deed of Sale written
in Chinese with the letter head “Sincere
Trading Co.” (Exh. “B”). An English
translation of said document (Exh. “C”)
reads as follows:
Deed of Sale
I, Ong Joi Jong, a party to this Deed of
Sale hereby sell in absolutely (sic)
manner a lot located on No. 4 Fundidor
Street, San Nicolas an (sic) area
consisting 213 square meters including a
Ong Ching Po for the sum of P6,000.00 the
receipt of which is hereby acknowledged
by me and consequently I have executed and
signed the government registered title
(sic) the said lot inclusive of the house
Page 26 of 30
 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
erected thereon, now belong (sic) to Mr.
Ong Ching Po unequivocally. And the
purpose of this document is to precisely
serve as proof of the sale.
Addendum: I have acceded to the request
of Mr. Ong Ching Po into signing another
document in favor of Soledad Parian (She
is the Filipino wife of Ong Yee, brother
of Ong Ching Po) for the purpose of
facilitating the issuance of the new title
by the City Register of Deeds and for the
reason that he is not yet a Filipino. I
certify to the truthfulness of this fact.
Lot Seller: Ong Joi Jong”
(Exhibits for the plaintiff, p. 4)
On December 6, 1983, petitioner Ong Ching
Po executed a Deed of Absolute Sale
conveying to his children, petitioners
Jimmy and David Ong, the same property
sold by Ong Joi Jong to private respondent
in 1947. On December 12, 1985, petitioners
Ong Ching Po, Jimmy Ong and David Ong
filed an action for reconveyance and
damages against private respondent in the
Regional Trial Court, Branch 53, Manila,
docketed as Case No. 85-33962.
On July 26, 1986, private respondent filed
an action for quieting of title against
petitioners Ong Ching Po and his wife,
petitioner Yu Siok Lian, in the Regional
Trial Court, Branch 58, Manila, docketed
as Civil Case No. 86-36818. Upon her
motion, the case was consolidated with
Civil Case No. 85-33962. On May 30, 1990,
the trial court rendered a decision in
favor of private respondent. On appeal by
petitioners to the Court of Appeals, the
said court affirmed the decision of the
Regional Trial Court.
Hence, this petition.
II
According to petitioners, the Court of
Appeals erred:
(1) When it gave full faith and credit to
the Deed of Sale (Exh. “A”) in favor of
private respondent, instead of the Deed
of Sale (Exh. “B” and its translation,
Exh. “C”) in favor of petitioner Ong Ching
Po.
(2) When it concluded that the acts of
petitioners were not acts of ownership;
and
(3) When it ruled that no express nor
implied trust existed between petitioners
and private respondent (Rollo, pp. 17-
18).
As stated by petitioners themselves, what
is in dispute “x x x is not so much as to
which between Exhibit “A” and Exhibit “B”
is more weighty, but whether this document
is what it purports to be (i.e., a deed
of conveyance in favor of Soledad Parian
[private respondent]) or it was only
resorted to or executed as a subterfuge
because the real buyer (Ong Ching Po) was
an alien and it was agreed upon between
Ong Ching Po and his brother (Ong Yee,
Soledad Parian’s husband) that the land
be registered in the name of Soledad
Parian in order to avoid legal
complications and to facilitate
registration and transfer and that the
said title would be transferred by Soledad
to Ong Ching Po or his successors-in-
interest and that she would be holding the
title in trust for him” (Rollo, pp. 19-
20).
We cannot go along with the claim that
petitioner Ong Ching Po merely used
private respondent as a dummy to have the
title over the parcel of land registered
in her name because being an alien he was
disqualified to own real property in the
Philippines. To sustain such an
outrageous contention would be giving a
high premium to a violation of our
nationalization laws.
Assuming that Exhibit “B” is in existence
and that it was duly executed, still
petitioners cannot claim ownership of the
disputed lot by virtue thereof. Section
5, Article XIII of the 1935 Constitution
provides, as follows:
“Save in cases of hereditary succession,
no private agricultural land shall be
transferred or assigned except to
individuals, corporations, or
Page 27 of 30
 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
associations qualified to acquire or hold
lands of the public domain in the
Philippines.”
Section 14, Article XIV of the 1973
Constitution provides, as follows:
“Save in cases of hereditary succession,
no private land shall be transferred or
conveyed except to individuals,
corporations, or associations qualified
to acquire or hold lands in the public
domain.”
Section 7, Article XII of the 1987
Constitution provides:
“Save in cases of hereditary succession,
no private lands shall be transferred or
conveyed except to individuals,
corporations, or associations qualified
to acquire or hold lands in the public
domain.”
The capacity to acquire private land is
made dependent upon the capacity to
acquire or hold lands of the public
domain. Private land may be transferred
or conveyed only to individuals or
entities “qualified to acquire lands of
the public domain” (II Bernas, The
Constitution of the Philippines 439-440
[1988 ed.]).
The 1935 Constitution reserved the right
to participate in the “disposition,
exploitation, development and
utilization” of all “lands of the public
domain and other natural resources of the
Philippines” for Filipino citizens or
corporations at least sixty percent of the
capital of which was owned by Filipinos.
Aliens, whether individuals or
corporations, have been disqualified from
acquiring public lands; hence, they have
also been disqualified from acquiring
private lands.
Petitioner Ong Ching Po was a Chinese
citizen; therefore, he was disqualified
from acquiring and owning real property.
Assuming that the genuineness and due
execution of Exhibit “B” has been
established, the same is null and void,
it being contrary to law.
On the other end of the legal spectrum,
the deed of sale executed by Ong Joi Jong
in favor of private respondent (Exh.“A”)
is a notarized document.
To remove the mantle of validity bestowed
by law on said document, petitioners claim
that private respondent admitted that she
did not pay anything as consideration for
the purported sale in her favor. In the
same breath, petitioners said that
private respondent implied in her
deposition that it was her husband who
paid for the property. It appears,
therefore, that the sale was financed out
of conjugal funds and that it was her
husband who handled the transaction for
the purchase of the property. Such
transaction is a common practice in
Filipino-family affairs.
It is not correct to say that private
respondent never took possession of the
property. Under the law, possession is
transferred to the vendee by virtue of the
notarized deed of conveyance. Under
Article 1498 of the Civil Code of the
Philippines, “when the sale is made
through a public instrument, the
execution thereof shall be equivalent to
the delivery of the object of the
contract, if from the deed the contrary
does not appear or cannot clearly be
inferred.” If what petitioners meant was
that private respondent never lived in the
building constructed on said land, it was
because her family had settled in Iloilo.
There is no document showing the
establishment of an express trust by
petitioner Ong Ching Po as trustor and
private respondent as trustee. Not even
Exhibit “B” can be considered as such a
document because private respondent, the
registered owner of the property subject
of said “deed of sale,” was not a party
thereto. The oral testimony to prove the
existence of the express trust will not
suffice. Under Article 1443 of the Civil
Code of the Philippines, “No express trust
concerning an immovable or any interest
therein may be proved by parole evidence.”
Page 28 of 30
 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
Undaunted, petitioners argue that if they
cannot prove an express trust in writing,
they can prove an implied trust orally.
While an implied trust may be proved
orally (Civil Code of the Philippines,
Art. 1457), the evidence must be
trustworthy and received by the courts
with extreme caution, because such kind
of evidence may be easily fabricated
(Salao v. Salao, 70 SCRA 65 [1976]). It
cannot be made to rest on vague and
uncertain evidence or on loose, equivocal
or indefinite declarations (Cf. De Leon
v. Molo-Peckson, et al., 116 Phil. 1267
[1962]). Petitioners do not claim that Ong
Yee was not in a financial position to
acquire the land and to introduce the
improvements thereon. On the other hand,
Yu Siok Lian, the wife of petitioner Ong
Ching Po, admitted in her testimony in
court that Ong Yee was a stock-holder of
Lam Sing Corporation and was engaged in
business.
The Court of Appeals did not give any
credence to Exhibit “B” and its
translation, Exhibit “C,” because these
documents had not been properly
authenticated.
Under Section 4, Rule 130 of the Revised
Rules of Court:
“Secondary Evidence when Original is lost
or destroyed. When the original writing
has been lost or destroyed, or cannot be
produced in court, upon proof of its
execution and lost or destruction, or
unavailability, its contents may be
proved by a copy, or by a recital of its
contents in some authentic document, or
by the recollection of the witnesses.”
Secondary evidence is admissible when the
original documents were actually lost or
destroyed. But prior to the introduction
of such secondary evidence, the proponent
must establish the former existence of the
document. The correct order of proof is
as follows: existence; execution; loss;
contents. This order may be changed if
necessary in the discretion of the court
(De Vera v. Aguilar, 218 SCRA 602 [1993]).
Petitioners failed to adduce evidence as
to the genuineness and due execution of
the deed of sale, Exhibit “B.”
The due execution of the document may be
established by the person or persons who
executed it; by the person before whom its
execution was acknowledged; or by any
person who was present and saw it executed
or who after its execution, saw it and
recognized the signatures; or by a person
to whom the parties to the instrument had
previously confessed the execution
thereof (De Vera v. Aguilar, supra).
Petitioner Yu Siok Lian testified that she
was present when said document was
executed, but the trial court rejected her
claim and held:
“If it is true that she was present, why
did she not sign said document, even
merely as a witness? Her oral testimony
is easy to concoct or fabricate.
Furthermore, she was married only on
September 6, 1946 to the plaintiff, Ong
Ching Po, in Baguio City where she
apparently resided, or after the deed of
sale was executed. The Court does not
believe that she was present during the
execution and signing of the deed of sale
involved therein, notwithstanding her
pretensions to the contrary” (Decision p.
6, Records p. 414).
As to the contention of petitioners that
all the tax receipts, tax declaration,
rental receipts, deed of sale (Exh. “B”)
and transfer certificate of title were in
their possession, private respondent
explained that she and her husband
entrusted said lot and building to
petitioners when they moved to Iloilo.
As observed by the Court of Appeals:
“We find, however, that these acts, even
if true, are not necessarily reflective
of dominion, as even a mere administrator
or manager may lawfully perform them
pursuant to his appointment or
employment” (Rollo, p. 10).
Page 29 of 30
 NATURAL RESOURCES│ COMPILED CASES│ STEPHANIE M. SANTOALLA
It is markworthy that all the tax receipts
were in the name of private respondent and
her husband. The rental receipts were also
in the name of her husband.

WHEREFORE, the petition is DISMISSED.

SO ORDERED.

Padilla (Chairman), Davide, Jr.,

Bellosillo and Kapunan, JJ., concur.

Petition dismissed.

Notes.—The correct rule is that alienable

public land held by a possessor,
personally or through his predecessors-
in-interest, openly, continuously and
exclusively for the prescribed statutory
period (30 years under The Public Land
Act, as amended) is converted to private
property by the mere lapse or completion
of said period, ipso jure. (Director of
Lands vs. Intermediate Appellate Court,
146 SCRA 509 [1986])

Express trusts are created by the

intention of the trustor or of the parties
while implied trusts come into being by
operation of law. (Philippine National
Bank vs. Court of Appeals, 217 SCRA 347
[1993])

Page 30 of 30