Caro vs. Sucaldito

A mere applicant for a free patent over public land, who has not obtained title or established ownership, lacks legal personality to file an action for reconveyance or for annulment of a free patent and certificate of title issued to another; only the State, through the Solicitor General, may institute an action for reversion under Section 101 of Commonwealth Act No. 141.

Melchor Caro and Susana Sucaldito both asserted claims over Lot No. 4512 of the Cadastral survey of Nueva Valencia, Pls-775, a parcel that originated from a grant of public land. Caro traced his claim to a sale by his father Gregorio Caro, while Sucaldito traced hers to a purchase from Deogracias de la Cruz and to a free patent issued in her name. The dispute implicated the Public Land Act, Commonwealth Act No. 141, particularly Section 101 on reversion suits, and the Rules of Court requirement that every action be prosecuted by the real party-in-interest.

Gregorio Caro bought a parcel known as Assessor’s Lot No. 160 from Ruperto Gepilano under a Deed of Sale dated October 21, 1953. The lot was situated in Sitio Bangyan, Barrio Calaya, Municipality of Nueva Valencia, Iloilo City, and consisted of more or less 17.9849 hectares. Gregorio later sold a portion of the lot to his son Melchor Caro, consisting of 70,124 square meters and identified as Lot No. 4512 of the Cadastral survey of Nueva Valencia, Pls-775. Father and son executed a Deed of Definite Sale dated January 31, 1973 covering Lot No. 4512.

On August 1, 1974, Melchor applied for a free patent before the Bureau of Lands, District Land Office No. 6-1, covering the area he had bought from his father. Deogracias de la Cruz opposed the application. On November 6, 1980, the Regional Director rendered a decision canceling Melchor’s application. The Regional Director found that Melchor claimed preferential rights as purchaser from his father Gregorio, who had bought the land from Ruperto Cepellano in 1953, while De la Cruz testified that he had bought the land from Cipriano Gallego in 1965, occupied and improved it by planting coconut trees, and was forcibly driven out by Gregorio in 1968. Verification showed that the land actually sold to Gregorio by Ruperto Gepellano was Assessor’s Lot No. 160, whose description and physical identity were basically different and distinct from Lot No. 4512; Assessor’s Lot No. 160 corresponded to Lot No. 4511, not Lot No. 4512. Ruperto Cepellano also stated in an affidavit that what he sold to Gregorio was distinct and different from the land in question. The Regional Director ordered Free Patent Application No. (VI-1)8548 of Melchor Caro cancelled and gave Deogracias de la Cruz, if qualified, 120 days from finality to file an appropriate public land application, otherwise he would lose his preferential right.

Caro filed a notice of appeal before the Regional Land Office in Iloilo City, docketed as MNR Case No. 5207, but the appeal was dismissed in an Order dated June 29, 1982 for failure to file an appeal memorandum within the reglementary period. On August 29, 1982, Susana R. Sucaldito, as buyer of Lot No. 4512, filed an Application for a Free Patent covering the lot and was issued Free Patent No. 597599. The Register of Deeds of Iloilo City then issued Original Certificate of Title No. F-27162 in her favor. Sucaldito filed a Petition for Writ of Possession before the RTC of Iloilo City, which was granted in an Order dated May 7, 1984.

On February 20, 1984, Caro filed a Complaint against Sucaldito for “Annulment of Title, Decision, Free Patent and/or Recovery of Ownership and/or Possession with Damages” before the RTC of Iloilo City. He later filed an amended complaint alleging that he was the owner of the subject lot and had been in possession of it since 1953 and/or even prior thereto in the concept of owner, adversely, openly, continuously, and notoriously. He alleged that the lot had been declared for tax purposes in his name and in the names of his predecessors-in-interest, and that the corresponding land taxes had been paid. He claimed that Assessor’s Lot No. 160 had actually been divided into two lots, Lot No. 4511 and Lot No. 4512, and that Sucaldito had actually been claiming Lot No. 989 (Lot No. 4512), which was located two kilometers away. He lamented that despite overwhelming evidence proving his ownership and possession, the Bureau of Lands did not award the property to him. He alleged that the free patent issued in Sucaldito’s favor was wrongful and fraudulent, that she had no right over the lot, and that as a “trustee of a constructive trust” she was obliged to return it to him as the lawful owner. His complaint prayed for annulment of the Bureau of Lands decision, the free patent, and OCT No. F-27162; alternatively, for reconveyance of ownership and possession; for a declaration that he was the lawful owner and possessor and for issuance of a free patent or Torrens title in his favor; and for moral damages of P50,000.00, attorney’s fees of P2,000.00, litigation expenses of P2,000.00, and exemplary damages.

In her answer with counterclaim, Sucaldito interposed as a special affirmative defense that she had intervened in the proceedings on Caro’s application for a free patent over Lot No. 4512 before the Bureau of Lands because she had bought the subject land from De la Cruz. She also alleged that, contrary to Caro’s allegations, Lot No. 989 and Lot No. 4512 were one and the same lot, as found by the Bureau of Lands. The parties thereafter presented evidence.

The trial court found that the evidence showed that Lot No. 4512, with an area of 70,677 square meters, was not included in Assessor’s Lot No. 160. Assessor’s Lot No. 160 was Cadastral Lot No. 4511, which originally had an area of around 17 hectares and was later increased to 21 hectares; if Lot No. 4512 were added to Lot No. 4511 following Caro’s contention, the area would be more than 28 hectares, belying his claim that Lot No. 4512 was formerly part of Assessor’s Lot No. 160. The trial court also rejected Caro’s contention that Sucaldito was claiming Lot No. 989, owned by Felix Galabo and located in Barangay Olacon, because the identification of a lot in a tax declaration is not binding and conclusive; what is binding and conclusive is what is stated in the title and its technical description. The technical description in Sucaldito’s title stated that the lot was Lot No. 4512, located in Barangay Calaya, not Barangay Olacon, Nueva Valencia, Guimaras.

• Legal Personality: Petitioner insisted that, contrary to the Court of Appeals’ ruling, he had legal personality to bring the action because a title issued on the basis of a patent is annullable on the ground of fraud.
• Inapplicability of the One-Year Period: Petitioner argued that the one-year period under Section 32 of Presidential Decree No. 1529 for filing an action to cancel a Torrens title does not apply where the registered owner or successor-in-interest knew that the property described in the title actually belongs to another.
• Fraud in the Patent Application: Citing Vital vs. Anore, et al. and Director of Lands vs. Abanilla, petitioner maintained that any false statement in the application, which is an essential condition of the patent or title under Section 91 of Commonwealth Act No. 141, shall ipso facto produce the cancellation of the concession, title, or permit granted.
• Errors of the Court of Appeals: Petitioner assailed the Court of Appeals for holding that he had no legal personality to file the action and for dismissing his appeal on the ground that only the Solicitor General can file an action for reconveyance of property acquired by patent.

• Lack of Ownership: Respondent pointed out that the decision of the Bureau of Lands itself showed that petitioner was not the true and lawful owner of the subject lot; thus, his argument that he had legal personality to file an action for annulment of patent based on constructive trust was untenable.
• No Error by the Court of Appeals: Respondent contended that the Court of Appeals did not err in upholding the ruling of the RTC.
• Prior Intervention and Identity of Lots: In her answer, respondent interposed that she had intervened in the proceedings on Caro’s application for a free patent over Lot No. 4512 before the Bureau of Lands because she had bought the subject land from De la Cruz, and that Lot No. 989 and Lot No. 4512 were one and the same lot as found by the Bureau of Lands.

• Nature of the Action: Whether Caro’s complaint for annulment of a free patent and certificate of title is in substance an action for reconveyance.
• Legal Personality: Whether Caro, as a mere applicant for a free patent and not the owner of the disputed public land, has legal personality to file the action.
• Proper Party for Reversion: Whether only the State, through the Solicitor General, may institute an action for reversion or cancellation of a free patent and certificate of title.

• Nature of the Action: Reconveyance. The complaint is in substance an action for reconveyance because the ultimate relief sought is the return of the property to petitioner; an action for reconveyance respects the decree of registration but seeks transfer from the registered owner to the rightful owner.
• Legal Personality: No. Petitioner, not being the owner but a mere applicant for a free patent, is not a real party-in-interest under Section 2, Rule 3, and cannot file an action for reconveyance.
• Proper Party for Reversion: The State, through the Solicitor General. Under Section 101 of Commonwealth Act No. 141, all actions for reversion of public domain lands must be instituted by the Solicitor General in the name of the Republic; only the State can sue for reconveyance of public land.

• Nature of the Action: The complaint prayed for annulment of the Bureau of Lands decision, the free patent, and OCT No. F-27162, or alternatively for reconveyance and recovery of ownership and possession. Because the ultimate relief sought was for Sucaldito to “return” the property to Caro, the action was in reality one for reconveyance. Under De Guzman vs. Court of Appeals, the essence of an action for reconveyance is that the decree of registration is respected as incontrovertible but the property wrongfully or erroneously registered in another’s name is sought to be transferred to its rightful owner or to one with a better right. In a reconveyance action filed by a private individual, the property does not go back to the State. Reversion, by contrast, seeks to revert the land to the government under the Regalian doctrine; because the land originated from a government grant, cancellation is a matter between grantor and grantee.
• Legal Personality: Section 2, Rule 3 requires every action to be prosecuted or defended in the name of the real party-in-interest, defined as one who stands to be benefited or injured by the judgment. Legal standing requires a personal and substantial interest, meaning a material interest affected by the challenged act, not mere incidental interest. A suit by one who is not a party-in-interest must be dismissed. Caro was not the owner of the disputed property but a mere applicant for a free patent; he therefore could not be a party-in-interest to sue for reconveyance. Tankiko vs. Cezar, citing Lucas vs. Durian, affirmed dismissal of a complaint by a party alleging fraudulent patent and seeking annulment and cancellation because the proper party was the government to which the property would revert. Nebrada vs. Heirs of Alivio similarly held that a mere homestead applicant was not the real party-in-interest for reconveyance. De la Peña vs. Court of Appeals declared that reconveyance is a remedy granted only to the owner of the property alleged to be erroneously titled in another’s name; persons who have not obtained title to public lands could not question titles legally issued by the State. VSC Commercial Enterprises, Inc. vs. Court of Appeals held that lessees had no present substantial and personal interest in ownership; their hope to become qualified buyers was a mere expectancy. Thus, Caro, not being an applicant or grantee with title, could not ask for reconveyance.
• Proper Party for Reversion: Section 101 of Commonwealth Act No. 141 provides that all actions for 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 the Commonwealth [now Republic] of the Philippines. Sumail vs. Judge of the Court of First Instance of Cotabato, et al. applied this provision: only the Solicitor General may bring an action for reversion; a free patent applicant may not bring such action or any action that would cancel a free patent and certificate of title and cause the land to form part of the public domain. Moreover, a free patent applicant does not claim the land as private property; by applying for a free patent, he acknowledges it is public domain, and even if reverted, he does not automatically become owner but remains a mere applicant. Therefore, only the State can file a suit for reconveyance of public land, and Caro had no personality to recover the property as he had not shown he was the rightful owner.

• Real Party-in-Interest — Under Section 2, Rule 3, every action must be prosecuted or defended in the name of the real party-in-interest, one who stands to be benefited or injured by the judgment. Legal standing requires personal and substantial interest, a material interest affected by the challenged act, not mere incidental interest. A suit filed by one who is not a party-in-interest must be dismissed. Applied: Caro, a mere free patent applicant not owner, lacked standing.
• Reconveyance vs. Reversion — Reconveyance respects the decree of registration as incontrovertible but seeks transfer of property wrongfully or erroneously registered in another’s name to its rightful owner or one with better right; it does not return property to the State. Reversion seeks to return land to the government under the Regalian doctrine. Applied: Caro’s complaint, seeking return of the lot to him, was in substance reconveyance, not reversion.
• Reconveyance as Remedy Only for Owner — Reconveyance is granted only to the owner of the property alleged to be erroneously titled in another’s name. Persons who have not obtained title to public lands cannot question titles legally issued by the State. Applied: Caro, not an owner or grantee, could not ask for reconveyance.
• Reversion Actions Must Be Brought by Solicitor General — Section 101 of Commonwealth Act No. 141 requires all actions for reversion of public domain lands to be instituted by the Solicitor General or officer acting in his stead in the name of the Republic. Applied: Only the State could sue for reconveyance or reversion of the public land; Caro lacked personality.
• Free Patent Applicant’s Acknowledgment of Public Domain — A free patent applicant acknowledges the land as part of the public domain; even if the land is reverted, the applicant does not automatically become owner but remains a mere applicant. Applied: Caro’s application for a free patent undercut his claim to be the owner with personality to sue.

• "The essence of an action for reconveyance is that the decree of registration is respected as incontrovertible but what is sought instead is the transfer of the property which has been wrongfully or erroneously registered in another person’s name, to its rightful owner or to one with a better right." — Defines the nature of reconveyance and distinguishes it from an action that returns land to the State.
• "In the present dispute, only the State can file a suit for reconveyance of a public land. Therefore, not being the owners of the land but mere applicants for sales patents thereon, respondents have no personality to file the suit. Neither will they be directly affected by the judgment in such suit." — States the ratio decidendi on lack of legal personality of mere applicants for public land patents.
• "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 the Commonwealth [now Republic] of the Philippines." — Provides the statutory basis for the rule that only the State may bring reversion actions.
• "reconveyance is a remedy granted only to the owner of the property alleged to be erroneously titled in another’s name." — Limits the remedy of reconveyance to the owner and supports the dismissal of Caro’s complaint.

• De Guzman vs. Court of Appeals, 442 Phil. 534 (2002) — Controlling precedent defining the essence of an action for reconveyance and distinguishing it from reversion.
• Tankiko vs. Cezar, G.R. No. 131277, 2 February 1999, 302 SCRA 559 — Held that mere applicants for sales patents have no personality to file a suit for reconveyance; only the State can file such a suit.
• De la Peña vs. Court of Appeals, G.R. No. 81827, 28 March 1994, 231 SCRA 456 — Declared that reconveyance is a remedy granted only to the owner of the property alleged to be erroneously titled in another’s name.
• Sumail vs. Judge of the Court of First Instance of Cotabato, et al., 96 Phil. 946 (1955) — Applied Section 101 of Commonwealth Act No. 141; only the Solicitor General may bring an action for reversion, and a free patent applicant cannot bring an action to cancel a free patent and certificate of title.
• VSC Commercial Enterprises, Inc. vs. Court of Appeals, G.R. No. 121159, 16 December 2002, 394 SCRA 74 — Held that lessees had no present substantial and personal interest in ownership; their hope to become qualified buyers was a mere expectancy.
• Lucas vs. Durian, 102 Phil. 1157 (1957) — Cited in Tankiko vs. Cezar; affirmed dismissal of a complaint seeking annulment of a fraudulent patent because the proper party was the government to which the property would revert.
• Nebrada vs. Heirs of Alivio, 104 Phil. 126 (1958) — Held that a mere homestead applicant was not the real party-in-interest to institute an action for reconveyance.
• Reyes vs. Rodriguez, 62 Phil. 771, 776 (1936) — Held that persons who have not obtained title to public lands cannot question titles legally issued by the State.

• Section 2, Rule 3, Rules of Court — Requires every action to be prosecuted or defended in the name of the real party-in-interest, defined as the party who stands to be benefited or injured by the judgment. Applied to dismiss Caro’s action because he was not the owner but a mere free patent applicant.
• Section 101, Commonwealth Act No. 141 — Provides that all actions for 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 the Commonwealth [now Republic] of the Philippines. Applied to hold that only the State may bring an action for reversion or reconveyance of public land.
• Section 91, Commonwealth Act No. 141 — Cited by petitioner for the rule that any false statement in the application, an essential condition of the patent or title, shall ipso facto produce cancellation of the concession, title, or permit granted. The Court did not rely on this provision because the petition was resolved on lack of legal personality.
• Section 32, Presidential Decree No. 1529 — Cited by petitioner for the one-year period to file an action to cancel a Torrens title, which he argued did not apply where the registered owner knew the property belonged to another. The Court did not apply this provision because it resolved the case on lack of personality.

Puno (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.