De Leon vs. De Leon-Reyes

Reconveyance cannot be resorted to by a rival applicant to question the State's grant of a free patent over land that has not been shown to have previously acquired a private character, since a cancelled patent would simply return the property to the public domain and the regular courts have no jurisdiction to resolve conflicting claims over public land.

Pedro de Leon and Nenita de Leon-Reyes are the legitimate children of Alejandro de Leon; Nenita is married to Jesus Reyes, with whom she has two children, Myeth and Jenneth, both surnamed Reyes. During his lifetime Alejandro possessed two parcels of public land in Brgy. Burgos, San Jose, Tarlac — Lot No. 6952 and Lot No. 6521 — with a combined area of 171,939 square meters. The dispute turns on the Public Land Act's two modes of disposing of public agricultural land — judicial confirmation of imperfect title and administrative legalization through a free patent — and on which tribunal, the DENR or the regular courts, may resolve competing claims over land of the public domain.

Pedro de Leon and Nenita de Leon-Reyes are the legitimate children of Alejandro de Leon, and Nenita is married to Jesus Reyes with whom she has two children, Myeth and Jenneth. During his lifetime Alejandro possessed two parcels of public land in Brgy. Burgos, San Jose, Tarlac, designated as Lot No. 6952 and Lot No. 6521 and covering a combined area of 171,939 square meters. Sometime between 1995 and 1996, the government granted free patents over the subject lots in favor of Nenita and her family, and the Register of Deeds correspondingly issued four Original Certificates of Title: OCT No. 16757 covering Lot No. 6521 (39,270 square meters) on July 13, 1995 in the name of Nenita de Leon-Reyes; OCT No. 17580 covering Lot No. 6952-G (32,934 square meters) on March 8, 1996 in the name of Nenita de Leon-Reyes; OCT No. 17581 covering Lot No. 6952-A (14,098 square meters) on March 8, 1996 in the name of Myeth L. Reyes; and OCT No. 17582 covering Lot No. 6952-B (10,000 square meters) on March 8, 1996 in the name of Jenneth Reyes.

Sometime after the issuance of the titles, Pedro filed a Protest with the Department of Environment and Natural Resources on the grounds of fraud and misrepresentation of facts in the acquisition of title. In a complaint dated May 22, 1997, Nenita's family filed an unlawful detainer case against Pedro before the 1st Municipal Circuit Trial Court, Sta. Ignacia, Tarlac, docketed as Civil Case No. 319-SJ (97). On May 19, 1998, the MCTC dismissed the ejectment case without prejudice due to the pendency of Pedro's protest before the Bureau of Lands/DENR, and Nenita's family appealed the dismissal to the RTC, Branch 68, Camiling, Tarlac, where it was docketed as Civil Case No. 98-33. On July 21, 1999, the RTC affirmed the MCTC's dismissal of the complaint without prejudice to the filing of the proper action with the proper forum. Soon after, the DENR dismissed Pedro's Protest after finding that Nenita and her family had met all the requisites for a public land grant, and it upheld the validity of the grant of patents to them; Pedro did not appeal the dismissal of his protest.

On February 5, 2002, Nenita and her family filed a complaint against Pedro for Recovery of Possession and Damages, docketed as Civil Case No. 02-08. On April 16, 2002, Pedro likewise filed a complaint against Nenita's family for Reconveyance of Title and Damages, docketed as Civil Case No. 02-20. Nenita claimed that Alejandro had transferred his possessory rights over the property to her in a document dated May 5, 1970, which became the basis for her free patent application with the DENR; she denied that any fraud or wrongdoing attended her application and invoked the DENR's dismissal of Pedro's protest for his failure to rebut the presumption of regularity in the issuance of the patent. Pedro, for his part, claimed that Alejandro had transferred possession over the subject lots to him in 1971 and that he had been in possession ever since; he claimed that he had asked Nenita for assistance to cause the titling of the properties in his name but that she took advantage of his lack of education and fraudulently acquired a free patent in her name instead, and he contested the May 5, 1970 Transfer of Rights in favor of Nenita as a forgery.

The RTC consolidated and jointly heard the two cases. After the presentation of testimonial evidence, Pedro was given several opportunities to make a Formal Offer of his documentary evidence, but he failed to do so and the consolidated case was submitted for decision without his documentary evidence. The RTC found the transfer of rights, as well as the subsequent issuance of free patents, valid, reasoning that Pedro had failed to adduce sufficient evidence to invalidate the deed of transfer and the issuance of the patents and that there was no clear and convincing evidence to substantiate his allegations of forgery — in fact, Pedro did not even make a formal offer of his documentary evidence. On the question of possession, however, the RTC held that Nenita's family was no longer entitled to recover the subject lots due to the principle of laches, citing Nenita's failure to raise a restraining arm against Pedro's introduction of several improvements on the lots, such as the construction of his house, the planting of several fruit-bearing and several teak trees, and his sole appropriation of the entirety of the harvests, as well as her inaction for over 32 years since the execution of the Transfer of Rights and her undeniable knowledge of Pedro's adverse possession. The RTC then declared the titles of Nenita and her family null and void and ordered them to pay Pedro damages.

On appeal, the CA reversed the RTC on May 31, 2012, validated the OCTs in the name of Nenita's family, and ordered Pedro to surrender possession of the subject lot. The CA found that despite Pedro's denomination of his complaint as one for "Reconveyance of Titles and Damages," it was in fact one for reversion which he had no legal personality to file, since his failure to allege that the subject lots were private lands, or even just alienable and disposable lands of the public domain, and his admission of State ownership over the lots were fatal; citing Banguilan vs. Court of Appeals, the CA explained that when the complaint admits State ownership of the land or admits it to be public land, the case is one for reversion, not reconveyance, and that if the patents were cancelled the lots would return to the State rather than to a contending claimant like Pedro. The CA further pointed out that Pedro failed to appeal the DENR's dismissal of his Protest, so that the DENR's findings — that the free patents and OCTs were valid and that Pedro and his family already owned a total of 30 hectares of land and were therefore no longer entitled to a grant of any more alienable and disposable public lands — had attained finality. On laches, the CA held that the period between the formal grant of the patents and the issuance of the OCTs in 1995-1996 and the filing of the complaint for Recovery of Possession in 2002 was insufficient to constitute laches, and that Pedro's occupation of a portion of the properties was out of mere tolerance, without any contract and without paying any rentals.

• Ownership and Fraud: Pedro insisted that he is the rightful owner of the property and argued that the CA erred in not finding the existence of fraud and/or forgery, maintaining that a title emanating from a fraudulently secured free patent does not become indefeasible.
• Reconveyance as Exception: Citing Lorzano vs. Tabayag, Pedro conceded that a fraudulently secured patent can only be assailed by the government in an action for reversion, but emphasized that direct reconveyance is available when public land was fraudulently and in breach of trust titled in the name of the defendant, reconveyance existing as an enforcement of a constructive trust.
• Private Character of the Lots: Pedro claimed that as of the date of the grant of the free patent to Nenita's family, the properties had already ceased to be part of the public domain on account of his continued occupation and possession for the period required by law, so that the lots were beyond the DENR's jurisdiction to dispose of.
• Conclusiveness of the Ejectment Dismissal: Pedro argued that the MCTC's dismissal of the ejectment case in Civil Case No. 319-SJ (97), subsequently affirmed by the RTC in Civil Case No. 98-33, conclusively proves that he had possessed the subject lots since 1971.

• Questions of Fact: Nenita countered that Pedro raises questions of fact that are improper in a petition for review on certiorari.
• Nature of the Action: She countered that despite the denomination of Pedro's original complaint before the RTC, it was in fact an action for reversion.
• Pedro's Inheritance Share: She countered that, as established during the trial, Pedro had already received 211,846 square meters of property as his share in the inheritance of their father.
• Her Own Share: She countered that the subject lots were her rightful share from the estate of their father.

• Nature of the Action and Jurisdiction: Whether Pedro's complaint for reconveyance was in substance an action for reversion that he had no legal personality to file, the subject lots being public land.
• Fraud and Forgery: Whether the CA erred in upholding the validity of the free patents and OCTs despite Pedro's claims of fraud and forgery.
• Conclusiveness of the Ejectment Dismissal: Whether the MCTC's dismissal of the ejectment case, affirmed by the RTC, conclusively established Pedro's prior possession of the subject lots since 1971.
• Laches: Whether Nenita's right to recover possession of the subject lots was barred by laches.

• Nature of the Action and Jurisdiction: No. Pedro's complaint was in substance one for reversion, which only the State may bring, and because he failed to allege or prove that the lots had acquired a private character, the regular courts had no jurisdiction over his claim.
• Fraud and Forgery: No. The RTC had already found no basis for fraud or forgery, and Pedro failed to substantiate his allegation with clear and convincing evidence, having never formally offered his documentary evidence.
• Conclusiveness of the Ejectment Dismissal: No. The MCTC's dismissal was without prejudice and not on the merits, so it produced no conclusiveness of judgment, and any pronouncements on possession were mere obiter dicta.
• Laches: No. As registered owners under the Torrens system, Nenita and her family hold an imprescriptible right to recover possession, and prescription and laches do not run against registered land.

• Nature of the Action and Jurisdiction: Under Section 11 of the Public Land Act, public lands suitable for agricultural purposes may be disposed of by homestead settlement, sale, lease, or confirmation of imperfect or incomplete titles, the last either by judicial legalization or by administrative legalization (free patent). Judicial confirmation under Section 48(b) presupposes an applicant claiming ownership; upon compliance with its conditions the possessor is deemed to have acquired by operation of law a right to a grant, the land is segregated from the public domain, and it becomes private in character and beyond the authority of the Director of Lands to dispose of, with registration merely recognizing a title already vested. A free patent applicant, by contrast, recognizes that the land applied for belongs to the government, a patent being a governmental grant of a right, privilege, or authority and a free patent an instrument by which the government conveys a grant of public land to a private person. Pursuant to the Administrative Code and the Public Land Act, the DENR has exclusive jurisdiction over the management and disposition of public lands and the power to resolve conflicting claims over them and determine an applicant's entitlement to a free patent; unless it can be shown that the land subject of a free patent had previously acquired a private character, regular courts have no power to conclusively resolve conflicting claims of ownership or possession de jure, and it is the Director of Lands (ultimately the DENR Secretary), not the court, that determines who among competing applicants has met the requirements. Pedro's complaint in Civil Case No. 02-20 failed to even allege that the subject lands were private lands or alienable and disposable lands of the public domain; what he alleged was that the lands were public land which he had possessed since 1971, thereby acquiring a right to a government grant without the formality of an application for confirmation of title. Under the Public Land Act, for public land to attain a private character by operation of law the applicant must have openly, continuously, exclusively, and notoriously possessed and occupied alienable agricultural land of the public domain, in the concept of an owner, since June 12, 1945 — a burden Pedro did not discharge. His failure to prove the private character of the lands divested the regular courts of jurisdiction, and the courts may not usurp the authority of the Director of Lands and the DENR to dispose of lands of the public domain through administrative proceedings. Pedro had the opportunity to assert his claim before the DENR when he filed his Protest but did not appeal its dismissal; the Public Land Act and the doctrine of primary jurisdiction render the DENR's factual findings conclusive on the courts in the absence of grave abuse of discretion, and res judicata bars him from re-litigating his claim before a different tribunal. On the remedy itself, reconveyance is available only to a landowner whose private property was erroneously or fraudulently registered in the name of another; it is not available when the subject property is public land, because a private person who is evidently not the landowner would have no right to recover the property, which would simply revert to the public domain. The exception — a free patent issued over private lands beyond the jurisdiction of the Director of Lands/DENR to dispose of — does not apply, since Pedro never established that the lots were private.

• Fraud and Forgery: An appeal by certiorari to the SC under Rule 45 is limited to questions of law, and save for the few judicially carved exceptions the SC will not disturb the factual findings of trial courts. The RTC had already passed upon the question of fraud and forgery and found no basis to conclude that the grant of the patent to Nenita was accompanied by fraud or forgery; other than his self-serving testimony, Pedro failed to substantiate his allegation of forgery with clear and convincing evidence. He had nobody to blame but himself for his failure to formally offer any documentary evidence that could have supported his claim, and the rules clearly state that courts will not consider evidence unless it has been formally offered — a litigant's failure to make a formal offer of evidence within a considerable period of time is a waiver of its submission, and evidence not offered shall be excluded and rejected. Both the RTC and the CA agreed that Nenita and her family are the true owners of the subject lots and that the free patents and OCTs issued to them are valid, and the SC found no reason to revisit this factual finding.

• Conclusiveness of the Ejectment Dismissal: The MCTC's fallo dismissed the case "in the meantime that the Protest is pending with the Bureau of Land[s]" and expressly "without prejudice," and the RTC's fallo affirmed the dismissal "without prejudice to the filing of the proper action in a proper forum." While the courts may appear to have passed upon the issue of prior physical possession, the fallo clearly shows that the dismissal was not made on the merits, and when a conflict exists between the dispositive portion and the opinion of the court in the body of the decision, the former must prevail. Res judicata applies in two ways: "bar by prior judgment," where there is identity of parties, subject matter, and causes of action and the first judgment is an absolute bar to the second action; and "conclusiveness of judgment," where there is identity of parties but no identity of causes of action, in which case the first judgment is conclusive only as to those matters actually and directly controverted and determined. Conclusiveness of judgment requires that a fact or question has been squarely put in issue, judicially passed upon, and adjudged in a former suit by a court of competent jurisdiction. The MCTC's dismissal, as affirmed by the RTC, produced no such effect because it was not on the merits and was without prejudice to the re-filing of the case; any pronouncements made with respect to the issue of possession were merely obiter dicta.

• Laches: As the registered owners of the subject properties, Nenita and her family have the imprescriptible right to recover possession thereof from any person illegally occupying it. Following Spouses Ocampo vs. Heirs of Dionisio, prescription and laches cannot apply to land registered under the Torrens system, and no title to registered land, in derogation of that of the registered owner, may be acquired by prescription or adverse possession. The length of time between the formal grant of the patents and the issuance of the OCTs in 1995-1996 and the filing of the complaint for Recovery of Possession in 2002 was insufficient to constitute laches, and Pedro's occupation of a portion of the properties was out of mere tolerance, without any contract and without paying any rentals.

• Public land remains public until its private character is established — Land of the public domain does not lose its public character merely because a private claimant has occupied it; the claimant must show compliance with the statutory requisites for acquisition. Pedro's failure to allege or prove that the lots were private or alienable and disposable public land meant the lots remained public, and the regular courts therefore had no jurisdiction to resolve the conflicting ownership claims.
• Free patent distinguished from judicial confirmation of imperfect title — Under Section 11 of the Public Land Act, confirmation of imperfect or incomplete titles may be had by (a) judicial legalization and (b) administrative legalization (free patent). The judicial mode is governed substantively by Chapter VIII (Sections 47-57) of the Public Land Act and procedurally by Chapter III (Sections 14-38) of the Property Registration Decree; the applicant claims ownership, and upon compliance with Section 48(b) the land is segregated from the public domain by operation of law and registration merely recognizes an already vested title. The administrative mode is governed by Chapter VII (Sections 44-46) of the Public Land Act; the applicant recognizes that the land belongs to the government, and the patent is the instrument by which the State conveys the grant.
• Reconveyance — Available only to a landowner whose private property was erroneously or fraudulently registered in the name of another. It is not available when the subject property is public land, because a private person who is evidently not the landowner has no right to recover the property, which would simply revert to the public domain. The exception is a free patent issued over private lands that are beyond the jurisdiction of the Director of Lands/DENR to dispose of.
• Primary jurisdiction of the DENR over public lands — The DENR has exclusive jurisdiction over the management and disposition of public lands, including the power to resolve conflicting claims over public lands and to determine an applicant's entitlement to a free patent. Its factual findings are conclusive on the courts in the absence of grave abuse of discretion, and a party who fails to appeal an adverse DENR ruling is barred by res judicata from re-litigating the same claim before another tribunal.
• Res judicata: bar by prior judgment vs. conclusiveness of judgment — Bar by prior judgment requires identity of parties, subject matter, and causes of action, and operates as an absolute bar to the second action. Conclusiveness of judgment requires only identity of parties, and binds the parties only as to matters actually and directly controverted and determined — that is, a fact or question squarely put in issue, judicially passed upon, and adjudged in a former suit by a court of competent jurisdiction. Neither applies where the first case was dismissed without prejudice and not on the merits.
• Fallo prevails over the body of the decision — When a conflict exists between the dispositive portion and the opinion of the court in the body of the decision, the former must prevail. This defeated Pedro's reliance on statements about possession in the body of the ejectment decisions.
• Formal offer of evidence — Courts will not consider evidence unless it has been formally offered. A litigant's failure to make a formal offer of evidence within a considerable period of time is a waiver of its submission, and evidence not offered shall be excluded and rejected.
• Prescription and laches do not run against registered land — No title to registered land, in derogation of that of the registered owner, may be acquired by prescription or adverse possession; the registered owner holds an imprescriptible right to recover possession from any illegal occupant.

• "Unlike an applicant in judicial confirmation of title who claims ownership over the land, the applicant for a free patent recognizes that the land applied for belongs to the government." — The line that anchors the SC's distinction between the two modes of disposing of public agricultural land, and explains why Pedro could not treat the free patent as an attackable private title.
• "Thus, reconveyance cannot be resorted to by a rival applicant to question the State's grant of a free patent." — The ratio of the ruling on the nature of the action: Pedro's suit was in substance a reversion suit that only the State could bring.
• "When a conflict exists between the dispositive portion (or the fallo) and the opinion of the court in the body of the decision, the former must prevail." — The basis for rejecting Pedro's res judicata argument, since the fallo of the ejectment decisions expressly dismissed without prejudice.
• "prescription and laches cannot apply to land registered under the Torrens system." — The rule disposing of the laches issue in favor of the registered owners.

• Banguilan vs. Court of Appeals, 550 Phil. 739 (2007) — Relied upon (through the CA) for the rule that when the complaint admits State ownership of the land or admits it to be public land, the case is one for reversion, not reconveyance.
• Lorzano vs. Tabayag, 681 Phil. 39 (2012) — Cited by Pedro for the exception allowing direct reconveyance where public land was fraudulently and in breach of trust titled in the defendant's name; the SC acknowledged the exception but found Pedro failed to bring himself within it.
• Spouses Antonio vs. Sayman, 646 Phil. 90 (2010) — Relied upon for the exposition of the two aspects of res judicata and the requisites of conclusiveness of judgment.
• Martinez vs. Court of Appeals, 566 Phil. 590 (2008) — Relied upon for the rule that upon compliance with Section 48(b) of the Public Land Act the land is segregated from the public domain and becomes private in character.
• Bagunu vs. Sps. Aggabao, 671 Phil. 183 (2011) — Relied upon for the DENR's exclusive jurisdiction over public lands and its power to resolve conflicting claims and determine entitlement to a free patent.
• Maximo vs. CFI of Capiz, 261 Phil. 534 (1990) — Relied upon for the rule that the Director of Lands, not the court, determines who among competing applicants has met the requirements, and for the limits of reconveyance.
• Spouses Ocampo vs. Heirs of Dionisio, G.R. No. 191101, October 1, 2014 — Relied upon for the rule that prescription and laches cannot apply to land registered under the Torrens system.
• Heirs of Malabanan vs. Republic, G.R. No. 179987, September 3, 2013 — Cited for the rules on Section 48(b) of the Public Land Act and on prescription as a mode of acquiring patrimonial property.

• Section 11, Commonwealth Act No. 141 (Public Land Act) — Enumerates the modes of disposing of public lands suitable for agricultural purposes (homestead settlement, sale, lease, and confirmation of imperfect or incomplete titles by judicial or administrative legalization); used to frame the distinction between judicial confirmation and the free patent.
• Section 48(b), Public Land Act, as amended by P.D. 1073 — Governs judicial confirmation of imperfect title, requiring open, continuous, exclusive, and notorious possession and occupation of agricultural lands of the public domain under a bona fide claim of acquisition or ownership since June 12, 1945; applied to show what Pedro had to prove and failed to prove.
• Section 44, Public Land Act, as amended by Republic Act No. 6940 — Governs the grant of a free patent to a natural-born citizen not owning more than twelve hectares who has continuously occupied and cultivated agricultural public land for at least thirty years; the provision under which the patents in favor of Nenita's family were issued.
• Section 3, Public Land Act — Places the Secretary of Environment and Natural Resources as the executive officer charged with carrying out the Act through the Director of Lands; cited for the administrative authority over public lands.
• Section 4, Public Land Act — Makes the Director of Lands' decisions as to questions of fact conclusive when approved by the Secretary of Environment and Natural Resources; applied to render the DENR's findings binding on the courts.
• Book IV, Title XIV, Chapter 1, Section 4, Executive Order No. 292 (Administrative Code of 1987) — Confers on the DENR supervision and control over alienable and disposable public lands and exclusive jurisdiction over the management and disposition of all lands of the public domain; the statutory basis for the DENR's primary jurisdiction.
• Section 47, Presidential Decree No. 1529 (Property Registration Decree) — Provides that no title to registered land in derogation of that of the registered owner shall be acquired by prescription or adverse possession; applied to defeat the laches defense.
• Section 34, Rule 132, Rules of Court — Requires a formal offer of evidence before the court may consider it; applied to exclude Pedro's unoffered documentary evidence.
• Rule 45, Rules of Court — Limits an appeal by certiorari to the SC to questions of law; applied to bar Pedro's factual attacks on the fraud and forgery findings.