Estate of the Late Jesus S. Yujuico vs. Republic of the Philippines

A reversion suit seeking to annul a final land registration decree and its derivative titles is in the nature of an annulment of judgment and must be filed with the CA under Rule 47, not with the RTC. Even if jurisdiction were assumed, the action is barred by laches and res judicata where the land had passed to innocent purchasers for value and the government waited 27 years while PEA recognized the title through a compromise.

Fermina Castro’s registered title over the Parañaque lot is the root of the titles claimed by Jesus S. Yujuico and Augusto Y. Carpio, while the Republic’s position is that the lot was part of Manila Bay and therefore public domain. The statutory backdrop includes CA No. 141 on reversion, BP Blg. 129 and Rule 47 on annulment of RTC judgments, PD 1529 on land registration and innocent purchasers, and PD 1085 on PEA’s Manila Bay reclamation.

In 1973, Fermina Castro filed an application for registration and confirmation of her title over a 17,343-square-meter parcel covered by plan (LRC) Psu-964 in Parañaque, then in the Pasig-Rizal CFI, Branch 22, docketed as LRC Case No. N-8239. The OSG, for the Director of Lands, and Mercedes Dizon opposed the application, but both oppositions were stricken from the records because Dizon’s opposition was filed after the expiration of the period given by the court and the Director of Lands’ opposition was filed after the entry of the order of general default. After considering the evidence, the trial court rendered its April 26, 1974 Decision declaring Castro the true and absolute owner and ordering registration in her name. The Director of Lands and Dizon did not appeal, so the order for the issuance of a decree of registration became final, and Decree No. N-150912 was issued by the LRC. OCT No. 10215 was issued in Castro’s name by the Register of Deeds for the Province of Rizal on May 29, 1974. The land was then sold to Jesus S. Yujuico, and OCT No. 10215 was cancelled; on May 31, 1974, TCT No. 445863 was issued in Yujuico’s name. Yujuico subdivided the land into two lots: TCT No. 446386 over Lot 1 was issued in his name, while TCT No. S-29361 over Lot 2 was issued in the name of petitioner Augusto Y. Carpio. Annotations at the back of TCT No. 446386 show that Yujuico had mortgaged the lot to PISO and Citibank, N.A., while annotations in Carpio’s title show the lot was mortgaged in favor of PDC, RCBC, PCIB, and DBP to secure various loans.

Sometime in 1977, PD 1085 conveyed the land reclaimed in the foreshore and offshore of Manila Bay as property of PEA, a government corporation that undertook the reclamation of lands or the acquisition of reclaimed lands. On January 13, 1989, OCT No. SP 02 was issued in favor of PEA. PEA also acquired ownership of other parcels along the Manila Bay coast, some of which were subsequently sold to MBDC, which in turn leased portions to Uniwide Holdings, Inc. PEA undertook the construction of the Manila Coastal Road. As this was being planned, Yujuico and Carpio discovered that a verification survey they commissioned showed that the road directly overlapped their property and that they owned a portion of the land sold by PEA to MBDC. On July 24, 1996, Yujuico and Carpio filed before the Parañaque City RTC a complaint for Removal of Cloud and Annulment of Title with Damages, docketed as Civil Case No. 96-0317, against PEA. On May 15, 1998, the parties entered into a compromise agreement approved by the trial court in a Resolution dated May 18, 1998. On June 17, 1998, the parties executed a Deed of Exchange of Real Property, pursuant to the compromise agreement, where the PEA property with an area of 1.4007 hectares would be conveyed to Jesus Yujuico and petitioner Carpio in exchange for their property with a combined area of 1.7343 hectares.

On July 31, 1998, the incumbent PEA General Manager, Carlos P. Doble, informed the OSG that the new PEA board and management had reviewed the compromise agreement and had decided to defer its implementation and hold it in abeyance following the view of the former PEA General Manager, Atty. Arsenio Yulo, Jr., that the compromise agreement did not reflect a condition of the previous PEA Board requiring the approval of the Office of the President. The new PEA management then filed a petition for relief from the resolution approving the compromise agreement on the ground of mistake and excusable negligence. The petition was dismissed by the trial court on the ground that it was filed out of time and that the allegation of mistake and excusable negligence lacked basis. PEA fared no better in the CA, as the petition was dismissed for failure to pay the required docket fees and for lack of merit. The matter was raised to the SC in Public Estates Authority vs. Yujuico, but PEA’s petition was denied, upholding the trial court’s dismissal of the petition for relief for having been filed out of time. The allegation of fraud in the titling of the subject property in the name of Fermina Castro was not taken up by the SC.

On June 8, 2001, the Republic, through the OSG, filed a Complaint for Annulment and Cancellation of Decree No. N-150912 and its Derivative Titles, entitled Republic of the Philippines vs. Fermina Castro, Jesus S. Yujuico, August Y. Carpio and the Registry of Deeds of Parañaque City, docketed as Civil Case No. 01-0222, with the Parañaque City RTC. The Republic alleged that when the land registered to Castro was surveyed by Engr. H. Obreto on August 3, 1972 and subsequently approved by the LRC on April 23, 1973, the land was still a portion of Manila Bay as evidenced by Namria Hydrographic Map No. 4243; that Roman Mataverde, the then OIC of the Surveys Division, Bureau of Lands, informed the OIC of the Legal Division that when projected on cadastral maps, (LRC) Psu-964 falls inside Manila Bay, outside Cad. 299; that then Acting Regional Lands Director Narciso V. Villapando issued a Report dated November 15, 1973 stating that plan (LRC) Psu-964 is a portion of Manila Bay; that then Officer-in-Charge, Assistant Director of Lands, Ernesto C. Mendiola, submitted his Comment and Recommendation dated December 1, 1977 praying that the registration case be dismissed; and that Castro had no registrable rights over the property. The Republic argued that since the subject land was still underwater, it could not be registered in Castro’s name; that the land registration court did not have jurisdiction to adjudicate inalienable lands, making the decision void; and that the titles of Yujuico and Carpio, being derived from a void title, were likewise void. On September 13, 2001, Yujuico and Carpio filed a Motion to Dismiss on the grounds that the cause of action was barred by prior judgment, the claim had been waived, abandoned, or otherwise extinguished, a condition precedent was not complied with, and the complaint was not verified and the certification against forum shopping was not duly executed by the plaintiff or principal party.

The 1974 CFI Decision relied on Castro’s testimony and that of Emiliano de Leon, and on the April 25, 1974 report of the Director of Lands through Special Attorney Saturnino A. Pacubas. That report stated that upon ocular inspection conducted by Land Inspector Adelino G. Gorospe and the subsequent joint ocular inspection conducted by Geodetic Engineer Manuel A. Cervantes and Administrative Assistant Lazaro G. Berania, it was established that the parcel covered by plan (LRC) Psu-964 no longer formed part of Manila Bay but was definitely solid and dry land. Berania and Cervantes stated in their March 22, 1974 report that the land applied for could not be reached by water even in the highest tide and was occupied by squatter families with makeshift shanties and a basketball court. Gorospe’s November 28, 1973 letter-report stated that there was a house of pre-war vintage owned by the applicant on the land. The Republic, on the other hand, relied on the July 18, 1973 Office Memorandum of Roman Mataverde, the November 15, 1973 letter of Narciso Villapando, the Comment and Recommendation of Ernesto C. Mendiola, and Namria Hydrographic Map No. 4243. The Government Corporate Counsel, in an October 13, 1997 opinion, and the OSG both concluded that there was no sufficient basis to annul OCT No. 10215 and its derivative titles.

• Res Judicata and Firestone: Petitioners argued that the CA erred in reversing the RTC’s application of res judicata on the erroneous assumption that the land was public domain; under Firestone Ceramics, Inc. vs. Court of Appeals, res judicata barred the Republic from resurrecting a long-settled registrability determination based on a mere allegation that the land was part of the public domain.
• Jurisdiction of the Land Registration Court: Petitioners argued that the land registration court had jurisdiction to determine whether the subject land was part of the public domain, and that the Republic’s reversion case sought to retry factual issues already judicially determined over thirty years earlier.
• Misplaced CA Jurisprudence: Petitioners argued that the jurisprudential bases applied by the CA were misplaced because they were predicated on the erroneous premise that it was undisputed that the subject land was part of the public domain.
• Estoppel and Laches: Petitioners argued that the Republic was barred by jurisdictional estoppel and laches, and that equitable considerations mandated the application of ordinary estoppel and laches against the Republic.
• Improper Recourse and PEA Case: Petitioners argued that the CA’s reliance on the isolated pronouncement in the PEA case was unwarranted and misleading because the applicability of res judicata to the 1974 land registration decision was not in issue there; the reversion case was not the proper recourse, and the validity of the May 15, 1998 compromise agreement had already been affirmed in the PEA case.
• Procedural Rules: Petitioners argued that the Republic could not be given special consideration and excused for transgressing rules of procedure.

• Public Domain and No Registrable Rights: Respondent argued that the land registered to Castro was still a portion of Manila Bay when surveyed and approved, as shown by Namria Hydrographic Map No. 4243 and the Bureau of Lands reports, so Castro had no registrable rights.
• Lack of Jurisdiction: Respondent argued that the land registration court did not have jurisdiction to adjudicate inalienable lands, making the decision adjudicating the parcel to Castro void.
• Void Derivative Titles: Respondent argued that the titles of Yujuico and Carpio, being derived from a void title, were likewise void.
• Res Judicata Error: Respondent alleged that the trial court erred in dismissing Civil Case No. 01-0222 on the ground of res judicata and in disregarding its evidence that the subject parcel was foreshore land of Manila Bay.

• Reversion Suit and Jurisdiction: Whether a reversion suit is proper in this case, particularly whether the Parañaque RTC had jurisdiction over the Republic’s action to annul and cancel Decree No. N-150912 and its derivative titles.
• Laches and Estoppel: Whether the present petition is barred by laches and estoppel.
• Res Judicata: Whether the CA erroneously rejected the application of res judicata to the Republic’s reversion suit.

• Reversion Suit and Jurisdiction: No. The reversion suit was erroneously instituted in the Parañaque RTC; it should have been filed with the CA under Rule 47, and the RTC lacked jurisdiction.
• Laches and Estoppel: Yes. The Republic’s action was barred by laches; equitable estoppel may be invoked against the government where innocent purchasers for value relied on clean titles and the government delayed for 27 years.
• Res Judicata: Yes. The CA erred in rejecting res judicata; the 1974 land registration decision and the final compromise in the PEA case precluded the reversion suit.

• Reversion Suit and Jurisdiction: The SC defined an action for reversion as one seeking to restore public land fraudulently awarded and disposed of to private individuals or corporations to the mass of public domain, a remedy under CA No. 141, Sec. 124. It noted that reversion suits were originally used to annul titles or patents administratively issued by the Director of the Land Management Bureau or the Secretary of the DENR; while CA No. 141 did not specify whether judicial confirmation of titles by a land registration court could be the subject of a reversion suit, the government availed of such remedy by filing actions with the RTC to cancel titles and decrees granted in land registration applications. The situation changed on August 14, 1981 upon effectivity of BP Blg. 129, which gave the Intermediate Appellate Court exclusive original jurisdiction over actions for annulment of judgments of RTCs. When the 1997 Rules of Civil Procedure became effective on July 1, 1997, it incorporated Rule 47 on annulment of judgments or final orders and resolutions of RTCs. The two grounds under Sec. 2, Rule 47 are extrinsic fraud and lack of jurisdiction; if based on extrinsic fraud, the action must be filed within four years from discovery, and if based on lack of jurisdiction, before it is barred by laches or estoppel under Sec. 3, Rule 47. Effective July 1, 1997, any action for reversion of public land instituted by the Government was already covered by Rule 47. Civil Case No. 01-0222 was filed on June 8, 2001 with the Parañaque City RTC; the reversion suit was erroneously instituted there and should have been dismissed for lack of jurisdiction. The proper court is the CA, which is mandated by BP Blg. 129 and Rule 47 to handle annulment of judgments of RTCs. The SC cited Collado vs. Court of Appeals and Republic vs. Court of Appeals, where the Solicitor General filed annulment of judgment with the CA. The Republic misfiled the reversion suit with the Parañaque RTC; it should have been filed with the CA as required by Rule 47. Evidently, the Parañaque RTC had no jurisdiction over the reversion case.

• Laches and Estoppel: Assuming that the Parañaque RTC had jurisdiction over the reversion case, the SC held that the lapse of almost three decades, the inexplicable lack of action of the Republic, and the injury this would cause constrained it to rule for petitioners. While estoppel does not operate against the State or its agents, deviations have been allowed. In Manila Lodge No. 761 vs. Court of Appeals, the SC said that estoppels against the public are little favored and should not be invoked except in rare and unusual circumstances, but the government must not be allowed to deal dishonorably or capriciously with its citizens, and equitable estoppel may be invoked against public authorities as well as private individuals. Equitable estoppel may be invoked against public authorities when the lot was already alienated to innocent buyers for value and the government did not undertake any act to contest the title for an unreasonable length of time. In Republic vs. Court of Appeals, where the title of an innocent purchaser for value who relied on clean certificates of title was sought to be cancelled and the excess land reverted to the Government, the SC ruled that it is only fair and reasonable to apply the equitable principle of estoppel by laches against the government to avoid an injustice to innocent purchasers for value. The SC explained that where innocent third persons, relying on the correctness of the certificate of title, acquire rights over the property, courts cannot disregard such rights and order the cancellation of the certificate, because such cancellation would impair public confidence in the certificate of title. All persons dealing with registered land may safely rely on the correctness of the certificate of title issued therefor, and the law or the courts do not oblige them to go behind the certificate in order to investigate again the true condition of the property. In the interest of justice and equity, neither may the titleholder be made to bear the unfavorable effect of the mistake or negligence of the State’s agents, in the absence of proof of his complicity in a fraud or of manifest damage to third persons. Republic vs. Umali held that even if the original grantee of a patent and title obtained the same through fraud, reversion will no longer prosper as the land had become private land and the fraudulent acquisition cannot affect the titles of innocent purchasers for value. Considering that innocent purchaser for value Yujuico bought the lot in 1974, and more than 27 years had elapsed before the action for reversion was filed, the action was barred by laches. While the general rule is that an action to recover lands of public domain is imprescriptible, the right can be barred by laches or estoppel. Section 32 of PD 1592 recognized the rights of an innocent purchaser for value over and above the interests of the government. The LRC issued Decree No. N-150912 in favor of Castro and OCT No. 10215 was issued on May 29, 1974; OCT No. 10215 did not show any annotation, lien, or encumbrance on its face. Relying on the clean title, Yujuico bought the same in good faith and for value from Castro and was issued TCT No. 445863 on May 31, 1974. There was no allegation that Yujuico was a buyer in bad faith, nor did he acquire the land fraudulently. The same legal shield redounded to his successors-in-interest, the Yujuicos and Carpio, more particularly Carpio since he bought the lot from Jesus Y. Yujuico for value and in good faith. Likewise protected were the rights of innocent mortgagees for value, PISO, Citibank, N.A., PDC, RCBC, PCIB, and DBP; even if the mortgagor’s title was proved fraudulent and the title declared null and void, such declaration cannot nullify the mortgage rights of a mortgagee in good faith. The SC defined laches as the failure or neglect, for an unreasonable and unexplained length of time, to do that which by exercising due diligence could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled thereto has either abandoned or declined to assert it. When the government filed the reversion case in 2001, 27 years had already elapsed from the time Jesus Yujuico purchased the land from Castro. After the issuance of OCT No. 10215 to Castro, no further action was taken by the government to question the issuance of the title to Castro until the PEA case was brought up in oral argument before the SC on September 6, 2000. The SC held that the allegation of fraud in the issuance of the title was not proper for consideration and determination at that stage of the PEA case. The Republic took its time despite remedies readily available: it could have appealed the April 26, 1974 CFI decision; it had one year from May 29, 1974, or up to May 28, 1975, to file a petition for reopening and review of Decree No. N-150912 under Sec. 32 of PD 1592 on the ground of actual fraud; and it could have questioned Castro’s title in Civil Case No. 96-0317, but PEA instead entered into a compromise agreement and impliedly waived its right to contest the title. The Republic filed the reversion suit only on June 8, 2001, after 27 years from the decree of registration. Such a Rip Van Winkle, coupled with the signing of the settlement with PEA, misled petitioners to believe that the government no longer had any right or interest in the disputed lot. Any nullification of title at that stage would unsettle and prejudice the rights and obligations of innocent parties. Laches had set in.

• Res Judicata: Even granting that the Republic was not precluded by laches, the SC held that the reversion action was already barred by res judicata. Petitioners relied on Firestone Ceramics, Inc. vs. Court of Appeals, and the SC agreed. The doctrine on precedents is expressed in the Latin maxim stare decisis et non quieta movere: follow past precedents and do not disturb what has been settled. For a case to be considered a precedent, the facts of the first case should be similar or analogous to the second. A perusal of the facts of Firestone and the case at bar showed that the facts were parallel. First, in Firestone and in this case, the claimants filed land registration applications with the CFI; both claimants obtained decrees for registration of the lots applied for and were issued OCTs. Second, in Firestone, the Republic filed a reversion case alleging that the land covered by the OCT was still inalienable forest land at the time of the application and hence the Land Registration Court did not acquire jurisdiction to adjudicate the property to the claimant; in the instant case, the Republic contended that the land applied for by Yujuico was within Manila Bay at the time of application and therefore the CFI had no jurisdiction over the subject matter. Third, in Firestone, the validity of the title of the claimant was favorably ruled upon by the SC in Patrocinio E. Margolles vs. CA; in the case at bar, the validity of the compromise agreement involving the disputed lot was in effect upheld when the SC in Public Estates Authority vs. Yujuico dismissed the petition of PEA seeking to reinstate the petition for relief from the May 18, 1998 Resolution approving the compromise agreement. With the dismissal of the petition, the May 18, 1998 Resolution became final and executory and the Republic through PEA was deemed to have recognized Castro’s title over the disputed land as legal and valid. In Romero vs. Tan, the SC ruled that a judicial compromise has the effect of res judicata and that a judgment based on a compromise agreement is a judgment on the merits, wherein the parties have validly entered into stipulations and the evidence was duly considered by the trial court that approved the agreement. In the instant case, the May 18, 1998 Resolution approving the compromise agreement confirmed the favorable decision directing the registration of the lot to Castro’s name in LRC Case No. N-8239. Fourth, in Firestone, the SC relied on the letter of then Solicitor General Francisco Chavez that the evidence of the Bureau of Lands and the LRC was not sufficient to support an action for cancellation of OCT No. 4216; in the instant case, both the Solicitor General and the Government Corporate Counsel opined that the Yujuico land was not underwater and that there appeared to be no sufficient basis for the Government to institute the action for annulment. Fifth, in Firestone, the SC ruled that the Margolles case had long become final, thus the validity of OCT No. 4216 should no longer be disturbed and should be applied in the reversion suit based on res judicata or the rule on conclusiveness of judgment. Firestone was therefore a precedent case. The Public Estates Authority case had become final and thus the validity of OCT No. 10215 issued to Castro could no longer be questioned. While the SC said in Public Estates Authority that it did not foreclose the right of the Republic from pursuing the proper recourse in a separate proceeding, the statement was obiter dictum since the inquiry on whether the disputed land was still underwater at the time of its registration was a non-issue in that case. Even granting that Firestone was not squarely applicable, the reversion suit was still barred by res judicata. For res judicata to serve as an absolute bar to a subsequent action, the following requisites must concur: (1) there must be a final judgment or order; (2) the court rendering it must have jurisdiction over the subject matter and the parties; (3) it must be a judgment or order on the merits; and (4) there must be between the two cases identity of parties, subject matter, and causes of action. There was no question as to the first, third, and last requisites. The threshold question pertained to the second requisite: whether the then Pasig-Rizal CFI, Branch 22 had jurisdiction over the subject matter in LRC Case No. N-8239. The Parañaque City RTC held that the CFI had jurisdiction; the CA reversed based on the Republic’s assertion that the Pasig-Rizal CFI had no jurisdiction over the subject matter and that there was a need to determine the character of the land. The SC held that the Parañaque City RTC Order dismissing the case for res judicata must be upheld. The CA relied on Municipality of Antipolo vs. Zapanta and Republic vs. Vda. De Castillo. In Municipality of Antipolo, the SC held that the land registration court had no jurisdiction to entertain any land registration application if the land was public property, so its decision adjudicating the disputed property as private ownership was null and void, never attained finality, and could be attacked at any time; it was not a bar to an action for annulment by reason of res judicata. The plain import of Municipality of Antipolo is that a land registration court has no jurisdiction over the subject matter of an application which the Republic claims is public land, but this ruling needed elucidation. Firmly entrenched is the principle that jurisdiction over the subject matter is conferred by law. Consequently, the proper CFI, now the RTC, under Section 14 of PD 1529 has jurisdiction over applications for registration of title to land. Section 14 provides who may apply: those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive, and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier. Conformably, the Pasig-Rizal CFI, Branch XXII had jurisdiction over the subject matter of the land registration case filed by Fermina Castro since jurisdiction over the subject matter is determined by the allegations of the initiatory pleading—the application. Settled is the rule that the authority to decide a case and not the decision rendered therein is what makes up jurisdiction; when there is jurisdiction, the decision of all questions arising in the case is but an exercise of jurisdiction. It was imprecise to state in Municipality of Antipolo that the land registration court has no jurisdiction to entertain the application for registration of public property, for such a court precisely has jurisdiction to entertain land registration applications since that is conferred by PD 1529. The applicant in a land registration case usually claims the land subject matter of the application as his or her private property, as in the case of Castro. Thus, the conclusion of the CA that the Pasig-Rizal CFI had no jurisdiction over the subject matter of Castro’s application had no legal mooring. The land registration court initially has jurisdiction over the land applied for at the time of the filing of the application. After trial, the court, in the exercise of its jurisdiction, can determine whether the title to the land applied for is registrable and can be confirmed. In the event that the subject matter of the application turns out to be inalienable public land, then it has no jurisdiction to order the registration of the land and perforce must dismiss the application. Based on Antipolo, the threshold question was whether the land covered by the titles of petitioners was underwater and formed part of Manila Bay at the time of the land registration application in 1974. If the land was within Manila Bay, then res judicata would not apply; otherwise, the decision of the land registration court was a bar to the reversion suit. After a scrutiny of the case records and pleadings in LRC Case No. N-8239 and in the instant petition, the SC ruled that the land of Fermina Castro was registrable and not part of Manila Bay at the time of the filing of the land registration application. The 1974 trial court Decision revealed that Castro testified that she first came to know the land in 1921 when she was ten years old; that her father Catalino Castro possessed and owned it, planted pechay, mustard, eggplant, and built a house; that the land was inherited from her grandfather Sergio Castro; that Catalino possessed it from 1921 until his death in 1952 without disturbance; that after his death she possessed it through caretaker Eliseo Salonga; that her possession was continuous, public, adverse against the whole world, and in the concept of an owner; and that the land was declared for taxation purposes and taxes were paid. Emiliano de Leon corroborated that Catalino Castro possessed the land from 1918 until 1952, planted mango, coconut, and banana, and that after Catalino’s death Castro took possession. On February 11, 1974, the court held in abeyance the rendition of a decision pursuant to PD 230 and directed the applicant to submit a white print copy of plan (LRC) Psu-964 to the Director of Lands, who was directed to submit his comment and recommendation. The Director of Lands, through Special Attorney Saturnino A. Pacubas, submitted a report dated April 25, 1974 stating that upon ocular inspection by Land Inspector Adelino G. Gorospe and the subsequent joint ocular inspection by Geodetic Engineer Manuel A. Cervantes and Administrative Assistant Lazaro G. Berania, it was established that the parcel covered by plan (LRC) Psu-964 no longer formed part of Manila Bay but was definitely solid and dry land. Berania and Cervantes stated in their March 22, 1974 report that the land could not be reached by water even in the highest tide and was occupied by squatter families with makeshift shanties and a basketball court. Gorospe’s November 28, 1973 letter-report stated that there was a house of pre-war vintage owned by the applicant on the land. To counter Castro’s evidence, the Republic relied on the July 18, 1973 Office Memorandum of Roman Mataverde, the November 15, 1973 letter of Narciso Villapando, the Comment and Recommendation of Ernesto C. Mendiola, and Namria Hydrographic Map No. 4243. The burden of proving these averments fell on the Republic. The difficulty was locating the government’s witnesses: Mataverde retired in 1982 and should by then be in his 90s; Villapando and Mendiola were no longer connected with the Bureau of Lands since 1986. Assuming they were still available, the projections made on the cadastral maps of the then Bureau of Lands could not prevail over the results of the two ocular inspections by several Bureau of Lands officials that the disputed lot was definitely dry and solid land and not part of Manila Bay. Special Attorney Pacubas, Land Inspector Gorospe, Geodetic Engineer Cervantes, and Administrative Assistant Berania, all officials of the Bureau of Lands, were positive that the disputed land was solid and dry land and no longer formed part of Manila Bay. Evidence gathered from the ocular inspection was considered direct and firsthand information entitled to great weight and credit, while the Mataverde and Villapando reports were evidence weak in probative value, being merely based on theoretical projections in the cadastral map or table surveys. Said projections had to be confirmed by the actual inspection and verification survey by the land inspectors and geodetic engineers of the Bureau of Lands. The Namria Hydrographic Map No. 4243 did not reveal what portion of Manila Bay Castro’s lot was located in 1974. A hydrographic map is not the best evidence to show the nature and location of the lot subject of a land registration application; it is derived from a hydrographic survey mainly used for navigation purposes. Juxtaposed with the finding of the ocular inspection by Bureau of Lands Special Attorney Pacubas and others that Castro’s lot was dry land in 1974, Namria Hydrographic Map No. 4243 was inferior evidence and lacking in probative force. The reliability and veracity of the Mataverde and Villapando reports were put to serious doubt by the October 13, 1997 opinion of the Government Corporate Counsel, the lawyer of PEA, which upheld the validity of the titles of petitioners and stated that the property of Fermina Castro was registrable land based on the two ocular inspections conducted on March 22, 1974 by Berania and Cervantes, which overturned the findings and recommendations of Villapando and Mendiola that were merely based on projections in the cadastral map or table surveys. The OSG also concluded that there was no sufficient basis for the Government to institute an action for annulment of OCT No. 10215 and its derivative titles, and that the possibility of winning the case was remote. The Republic, through its counsel, admitted that the land applied for by Fermina Castro in 1973 was solid and dry land, negating the allegation that it was underwater. The only conclusion from the admissions of the Solicitor General and Government Corporate Counsel was that the land subject of the titles of petitioners was alienable land beyond the reach of the reversion suit of the State. The land in question had also been the subject of a compromise agreement upheld by the SC in Public Estates Authority. In that compromise agreement, the property covered by TCT Nos. 446386 and S-29361 would be exchanged for PEA property. The fact that PEA signed the May 15, 1998 Compromise Agreement was a clear admission that it recognized petitioners as true and legal owners of the land. PEA waived its right to contest the legality and validity of Castro’s title, a waiver within its powers under PD 1084, which gave it perpetual succession and corporate powers, including the power to enter into contracts and to sue and be sued. The Compromise Agreement and the Deed of Exchange of Real Property signed by PEA with petitioners were legal, valid, and binding on PEA. The Compromise Agreement provided that it settled in full all claims and counterclaims of the parties against each other, and the Joint Motion for Judgment based on Compromise Agreement stated that the parties waived and abandoned any and all other claims and counterclaims. There was thus a valid waiver of the right of the Republic through PEA to challenge petitioners’ titles. PEA’s September 30, 2003 letter further acknowledged petitioners’ ownership when it stated that their ownership was acknowledged by PEA when it did not object to their membership in the CBP-IA Association. Section 26, Rule 130 provides that the act, declaration, or omission of a party as to a relevant fact may be given in evidence against him. The admissions of PEA, the real party-in-interest, on the nature of the land of Fermina Castro were valid and binding on the Republic. Respondent’s claim that the disputed land was underwater fell flat in the face of the admissions of PEA against its interests. Hence, res judicata effectively precluded the relitigation of the issue of registrability of petitioners’ lot. In sum, the SC found that the reversion case should be dismissed for lack of jurisdiction on the part of the Parañaque RTC. Even if the case were treated as a petition for annulment of judgment under Rule 47, the dismissal had to be upheld because it was already barred by laches. Even if laches were disregarded, the suit was already precluded by res judicata.

• Reversion and the proper court — An action for reversion seeks to restore public land fraudulently awarded and disposed of to private individuals or corporations to the mass of public domain under CA No. 141, Sec. 124. After BP Blg. 129 and Rule 47, an action to annul a final RTC land registration judgment is in the nature of an annulment of judgment and must be filed with the CA, not the RTC. Applied: the Parañaque RTC lacked jurisdiction over the Republic’s reversion suit.
• Laches and equitable estoppel against the government — The general rule is that estoppel does not operate against the State or its agents, but exceptions are allowed in rare and unusual circumstances where justice clearly requires it, especially where innocent purchasers for value relied on clean Torrens titles and the government slept on its rights for an unreasonable length of time. Applied: the Republic’s 27-year delay, coupled with PEA’s compromise agreement, barred the reversion suit.
• Innocent purchaser for value under the Torrens system — A purchaser for value and in good faith who relies on a clean certificate of title is protected; cancellation of the title would impair public confidence in the Torrens system. The rights of innocent mortgagees for value are likewise protected. Applied: Yujuico, Carpio, and the mortgagees PISO, Citibank, PDC, RCBC, PCIB, and DBP were protected.
• Res judicata — The requisites are: (1) a final judgment or order; (2) jurisdiction of the court rendering it over the subject matter and the parties; (3) a judgment or order on the merits; and (4) identity of parties, subject matter, and causes of action between the two cases. Applied: the 1974 land registration decision and the final PEA compromise barred the reversion suit.
• Judicial compromise as res judicata — A judgment based on a compromise agreement is a judgment on the merits and has the effect of res judicata. Applied: the May 18, 1998 Resolution approving the PEA compromise confirmed Castro’s title and bound the Republic through PEA.
• Jurisdiction over land registration applications — Jurisdiction over the subject matter is conferred by law and determined by the allegations of the initiatory pleading. Under PD 1529, Sec. 14, the proper CFI/RTC has jurisdiction over applications for registration of title to land; after trial, it may determine whether the title is registrable, and if the land turns out to be inalienable public land, it must dismiss the application. Applied: the Pasig-Rizal CFI had jurisdiction over Castro’s application.
• Admissions of a party — Under Rule 130, Sec. 26, the act, declaration, or omission of a party as to a relevant fact may be given in evidence against that party. Applied: PEA’s admissions that petitioners owned the land bound the Republic.
• Stare decisis — Follow past precedents and do not disturb what has been settled. A case may serve as a precedent when the facts of the first case are similar or analogous to the second. Applied: Firestone Ceramics, Inc. vs. Court of Appeals was a precedent because its facts were parallel.

• “An action for reversion seeks to restore public land fraudulently awarded and disposed of to private individuals or corporations to the mass of public domain.” — Defines the reversion remedy that the Republic invoked.
• “The land registration court initially has jurisdiction over the land applied for at the time of the filing of the application. After trial, the court, in the exercise of its jurisdiction, can determine whether the title to the land applied for is registrable and can be confirmed.” — Clarifies that the land registration court’s jurisdiction is not defeated by the mere allegation that the land is public.
• “It is only fair and reasonable to apply the equitable principle of estoppel by laches against the government to avoid an injustice to innocent purchasers for value” — Supports the ruling that laches barred the Republic.
• “In sum, the Court finds that the reversion case should be dismissed for lack of jurisdiction on the part of the Parañaque RTC. Even if we treat said case as a petition for annulment of judgment under Rule 47 of the 1997 Rules of Civil Procedure, the dismissal of the case nevertheless has to be upheld because it is already barred by laches. Even if laches is disregarded, still the suit is already precluded by res judicata in view of the peculiar facts and circumstances obtaining therein.” — Summarizes the three independent grounds for dismissing the reversion suit.

• Firestone Ceramics, Inc. vs. Court of Appeals, G.R. No. 127022, September 2, 1999, 313 SCRA 522 — Controlling precedent; facts were parallel, and res judicata barred the reversion suit.
• Public Estates Authority vs. Yujuico, G.R. No. 140486, February 6, 2001, 351 SCRA 280 — Prior related case; PEA’s petition was denied, the compromise became final, and the statement on a separate recourse was obiter dictum.
• Republic vs. Court of Appeals, G.R. No. 116111, January 21, 1999, 301 SCRA 366 — Relied on for estoppel by laches against the government and protection of innocent purchasers for value.
• Republic vs. Umali, G.R. No. 80687, April 10, 1989, 171 SCRA 647 — Reversion does not prosper where the land became private and innocent purchasers for value acquired rights.
• Municipality of Antipolo vs. Zapanta, No. L-65334, December 26, 1984, 133 SCRA 820 — Discussed and clarified; the land registration court has jurisdiction to entertain the application and determine registrability.
• Collado vs. Court of Appeals, G.R. No. 107764, October 4, 2002, 390 SCRA 343 — Cited to show that annulment of judgment should be filed with the CA.
• Romero vs. Tan, G.R. No. 147570, February 27, 2004, 424 SCRA 108 — Judicial compromise has the effect of res judicata.
• San Pedro vs. Binalay, G.R. No. 126207, August 25, 2005, 468 SCRA 47 — Cited for the requisites of res judicata.

• CA No. 141, Sec. 124 — Declares unlawful and void acquisitions, conveyances, and contracts made in violation of specified provisions and causes the reversion of the property to the State; applied as the basis for the reversion remedy.
• BP Blg. 129 — Gave the Intermediate Appellate Court exclusive original jurisdiction over actions for annulment of judgments of RTCs; applied to hold that the CA was the proper court.
• Rule 47, 1997 Rules of Civil Procedure, Secs. 2 and 3 — Governs annulment of judgments or final orders and resolutions of RTCs on grounds of extrinsic fraud or lack of jurisdiction, with the periods for filing; applied to treat the reversion suit as an annulment of judgment that should have been filed with the CA.
• PD 1529, Sec. 14 — Identifies who may apply for registration of title to land and vests jurisdiction in the proper CFI/RTC over registration applications; applied to uphold the Pasig-Rizal CFI’s jurisdiction over Castro’s application.
• PD 1592, Sec. 32 — Provides for review of a decree of registration and protects an innocent purchaser for value; applied to bar reopening where innocent purchasers for value had acquired the land.
• PD 1084, Secs. 1, 5(b), and 5(m) — Defines PEA’s corporate powers, including the power to enter into contracts and to sue and be sued; applied to uphold PEA’s compromise agreement and waiver.
• Rule 130, Sec. 26 — Provides that the act, declaration, or omission of a party as to a relevant fact may be given in evidence against that party; applied to PEA’s admissions binding the Republic.
• PD 1085 — Conveyed reclaimed land in the Manila Bay foreshore and offshore to PEA; applied as the statutory backdrop for PEA’s claims.