National Housing Authority vs. Baello

An action to nullify an original certificate of title that necessarily attacks the final registration judgment on which it was based is in substance an action for annulment of judgment of the RTC, over which the Court of Appeals has exclusive original jurisdiction under Section 9(2) of Batas Pambansa Blg. 129; the RTC lacks jurisdiction. Independently, the action is barred by conclusiveness of judgment and judicial estoppel where the petitioner had previously admitted the respondents' ownership in an expropriation suit and the issue of alienability had been finally settled in the registration case.

The National Housing Authority is a government agency authorized by its charter to acquire private lands for housing and resettlement. The respondents are the heirs of Pedro T. Baello and Nicanora T. Baello-Rodriguez, whose predecessors' land in Caloocan formed part of the Dagat-Dagatan Lagoon and adjacent areas covered by Presidential Decree No. 569, which created a committee to negotiate or expropriate properties for the Tondo Foreshore relocation program. The dispute concerns the NHA's later attempt to nullify the Torrens titles derived from the land registration decree issued to the Baello siblings in LRC Case No. 520, after prior expropriation litigation over the same properties had been dismissed.

On October 23, 1911, a 147,972-square-meter parcel in Sitio Talisay, Caloocan, was surveyed for Esperanza Baello under Plan Psu-2130, approved November 14, 1911. Esperanza died intestate on March 22, 1929, survived by her heirs Pedro Baello and Nicanora Baello. The plan was verified and approved anew by the Director of Bureau of Lands on April 24, 1951. On September 21, 1951, Pedro and Nicanora applied with the Court of First Instance of Rizal for registration under Chapter VIII of Administrative Order No. 141, docketed as LRC Case No. 520, alleging that the property was developed and used for fishpond purposes. The Bureau of Lands opposed, while the Bureau of Forestry did not; during the hearing, the Assistant Provincial Fiscal for the Director of Bureau of Lands withdrew the opposition. The CFI issued an order of general default and, with no opposition remaining, allowed the applicants to present evidence ex parte. On November 2, 1953, the CFI rendered judgment confirming the applicants' title, two-thirds to Pedro T. Baello and one-third to Nicanora T. Baello. The Republic, through the Director of Bureau of Lands, did not appeal. Decree No. 13400 was issued on October 27, 1954, and OCT No. (804) 53839 was issued in favor of Pedro and Nicanora. The property was later subdivided into Lot A (98,648 sqm) under TCT No. 181493 in Pedro's name and Lot B (49,324 sqm) in Nicanora's name, with the subdivision plan approved by the court on July 27, 1971.

Pedro died intestate on December 3, 1971, leaving thirty-two surviving heirs; Nicanora died intestate on August 22, 1975, followed by her husband Manuel Rodriguez on August 30, 1975. In the meantime, martial law was declared. On October 30, 1974, President Marcos issued Presidential Decree No. 569 creating a committee to expropriate the Dagat-Dagatan Lagoon and adjacent areas, including the Baello and Rodriguez properties, as a permanent relocation site for families affected by the Tondo Foreshore Urban Renewal Project. The committee, chaired by the Office of the Solicitor General with General Gaudencio V. Tobias of the National Housing Corporation as vice-chairman, was tasked to negotiate with landowners, secure offers to sell, deliberate on offers, refer payment to the Executive Secretary, and initiate expropriation of properties not amenable to negotiation. In 1976, then First Lady Imelda R. Marcos launched the Dagat-Dagatan Project, and the NHA was tasked to develop, subdivide, and award the lots. A truckload of fully armed military personnel entered the Baello property, forcibly ejected the caretaker at gunpoint, demolished the two-storey residential structure, and destroyed the fishpond improvements. The NHA took possession. The Baello and Rodriguez heirs, then under martial law, remained silent rather than risk their lives. The NHA acquired adjacent properties by purchase or expropriation, developed and subdivided them, and executed conditional contracts to sell 620 lots in Lot A and 275 lots in Lot B to beneficiaries, forming Kaunlaran Village.

On January 26, 1979, the Republic signed a $32,000,000 loan agreement with the International Bank for Reconstruction and Development Corporation to finance the development and resettlement project. On April 13, 1983, President Marcos issued Proclamation No. 2284 declaring Metropolitan Manila, including Dagat-Dagatan, as areas for priority development and urban land reform zones. On January 17, 1986, Minister of Natural Resources Rodolfo P. Del Rosario issued BFD Administrative Order No. 4-1766 declaring and certifying forestlands in Caloocan, Malabon, and Navotas as alienable or disposable for cropland and other purposes under the Bureau of Lands. After the EDSA upheaval, the Baello heirs executed on February 23, 1987 an extrajudicial partition of Pedro's estate, including the property covered by TCT No. 181493. On August 18, 1987, the NHA filed a complaint for expropriation of the Baello and Rodriguez properties in the RTC of Caloocan, Branch 120, docketed as Civil Case No. C-169, and secured a writ of possession. In February and May 1988, the respondents demanded the return of their properties and offered to sell at P300.00 per square meter with taxes and transfer taxes chargeable to the settlers, or at P270.00 per square meter with expenses and taxes for the NHA. The NHA had the property appraised and learned that the fair market value was P400.00 to P480.00 per square meter for developed residential area and P1,000.00 to P1,200.00 per square meter for commercial area. Its legal counsel pointed out that the properties had been part of the Dagat-Dagatan project but had not been expropriated; the NHA rejected the respondents' offer.

On July 26, 1989, the Rodriguez heirs executed an extrajudicial settlement, and on August 7, 1989, titles were issued to them: TCT Nos. 191062 (1,222 sqm), 191063 (4,559 sqm), 191064 (24,019 sqm), 191065 (12,495 sqm), 191066 (1,205 sqm), 191067 (2,518 sqm), and 191068 (3,306 sqm). Six titles were also issued to the Baello heirs on August 7, 1989: TCT Nos. 191069 (4,756 sqm), 191070 (7,090 sqm), 191071 (11,361 sqm), 191072 (39,227 sqm), 191073 (22,188 sqm), and 191074 (14,029 sqm). On November 17, 1989, the NHA filed an amended complaint in Civil Case No. C-169 praying for provisional value, writ of possession, condemnation, and just compensation. The respondents moved to dismiss on grounds including violation of Article XIII, Section 9 of the 1987 Constitution, taking without expropriation complaint, order, or just compensation since 1976, estoppel and laches, no cause of action, equal protection, res judicata, confiscatory valuation, and that the purpose was not public use. On September 5, 1990, the RTC dismissed the complaint on res judicata and lack of cause of action. The CA affirmed on August 21, 1992 in CA-G.R. CV No. 29042. The Supreme Court denied due course on May 3, 1993 in G.R. No. 107582, and denied reconsideration on June 16, 1993; entry of judgment followed.

On November 5, 1993, the NHA filed a new complaint in the RTC of Caloocan, Branch 128, docketed as Civil Case No. C-16399, for declaration of nullity of OCT No. (804) 53839 and its derivative titles. The NHA alleged that it had recently discovered that the titles were null and void because the property had been declared alienable and disposable only on January 17, 1986, and thus OCT No. (804) 53839 could not have been validly issued in 1954. It attached BFD Administrative Order No. 4-1766 and a certification from the National Mapping and Resource Information Authority. It prayed for nullification of the titles, permanent injunction and recovery of possession, reimbursement of P45.237 million in necessary and useful expenses if the respondents were adjudged entitled to the property, exemplary damages of P5 million, attorney's fees of P5 million, litigation expenses of P1 million, and costs. The respondents moved to dismiss on grounds of prior judgment, prescription, estoppel, forum shopping, no legal capacity to sue, no cause of action, and failure to pay correct docket fees. They alleged that the complaint was barred by the decision in LRC Case No. 520 and that the NHA was estopped from assailing their titles, which were based on the CFI decision in Civil Case No. C-169, the CA decision in CA-G.R. CV No. 29042, and the Supreme Court resolution in G.R. No. 107582.

On October 17, 1995, the RTC dismissed the complaint on estoppel and res judicata. The CA affirmed on January 26, 2000 in CA-G.R. CV No. 51592, holding that the complaint was barred by res judicata and that the Republic and the NHA had, by their own acts, admitted that the properties titled to the respondents were private lands even before Administrative Order No. 4-1766. The RTC in Civil Case No. C-169 had found that the NHA acted in bad faith and violated the Constitution when it took possession of the property in 1976, introduced improvements, and disposed of it despite knowing that ownership pertained to the respondents; it noted that the taking was effected without a complaint, court order, or just compensation, and that the NHA failed to give even the remaining unawarded lots to the registered owners. These findings were affirmed by the CA and by the Supreme Court in G.R. No. 107582.

• Nullity of Titles: Petitioner argued that the Court of Appeals erred in upholding the validity of the respondents' land titles despite positive proof of their nullity.
• Extrinsic Fraud: Petitioner argued that the Court of Appeals erred in applying the principle that for a judgment to be annulled or a decree of registration to be reopened, there must be actual or extrinsic fraud committed by the applicant.
• Res Judicata: Petitioner argued that the Court of Appeals erred in affirming the dismissal of the case on the ground of res judicata.
• Builder in Good Faith: Petitioner argued that the Court of Appeals gravely erred in ruling that the NHA was a builder in bad faith and therefore not entitled to reimbursement of the improvements it introduced. It maintained that it believed in good faith that the property was part of the Dagat-Dagatan Lagoon owned by the government; that it took possession in 1976, subdivided the property, awarded lots, and spent P45,237,000.00; that it learned only in 1988 that respondents owned the property and forthwith filed the expropriation complaint; and that even assuming bad faith on its part, Article 448 of the New Civil Code should govern because the respondents also acted in bad faith. It further posited that any award as builder in good faith would be premature because its complaint was dismissed and it had no opportunity to present evidence on the improvements and their value.
• Forum Shopping: Petitioner argued that the Court of Appeals erred in ruling that the NHA was guilty of forum shopping in filing the declaration of nullity of titles.

• Bar by Prior Judgment and Prescription: Respondents alleged that the cause of action was barred by a prior judgment and that the claim had prescribed, and that the NHA was estopped to question the title.
• Res Judicata and Estoppel by Judgment: Respondents alleged that the complaint was barred by res judicata or estoppel by judgment, specifically the decision in LRC Case No. 520 and the NHA's prior admissions and litigation in Civil Case No. C-169, CA-G.R. CV No. 29042, and G.R. No. 107582.
• Forum Shopping: Respondents alleged that the NHA had engaged in forum shopping.
• No Legal Capacity and No Cause of Action: Respondents alleged that the NHA had no legal capacity to sue and that the complaint stated no cause of action.
• Docket Fees: Respondents alleged that the complaint must be dismissed for failure of the NHA to pay the correct docket fees.

• Jurisdiction: Whether the trial court had jurisdiction over the NHA's action to nullify OCT No. (804) 53839 and the CFI decision in LRC Case No. 520.
• Res Judicata: Whether the NHA's action was barred by res judicata.
• Forum Shopping: Whether the NHA was guilty of forum shopping.
• Validity of LRC Case No. 520 and OCT No. (804) 53839: Whether the decision of the CFI in LRC Case No. 520 and the consequent issuance of OCT No. (804) 53839 are valid.
• Estoppel: Whether the NHA was estopped from assailing OCT No. (804) 53839.
• Builder in Good Faith: Whether the NHA was a builder in good faith.

• Jurisdiction: No. The complaint, in substance, sought annulment of the CFI/RTC decision in LRC Case No. 520 and the OCT issued pursuant thereto; under Section 9(2) of Batas Pambansa Blg. 129, the Court of Appeals has exclusive original jurisdiction over actions for annulment of RTC judgments, so the RTC should have dismissed outright.
• Res Judicata: Yes. Even assuming jurisdiction, the action was barred by the final decision in LRC Case No. 520 under the conclusiveness-of-judgment aspect of res judicata, the issue of alienability and ownership having been resolved therein.
• Forum Shopping: Yes. The nullity action was a device and technique to obtain a fresh opportunity to acquire the properties after the expropriation case failed, a blatant misuse of judicial processes.
• Validity of LRC Case No. 520 and OCT No. (804) 53839: Valid and final. The CFI decision in LRC Case No. 520 became final and executory; the registration proceeding was in rem and binding on the whole world, and the OCT and derivative titles cannot be collaterally attacked.
• Estoppel: Yes. The NHA was barred by judicial estoppel and judicial admissions, having admitted in Civil Case No. C-169 that the respondents were the lawful owners and having adopted a theory inconsistent with its later nullity claim.
• Builder in Good Faith: No. The NHA acted in gross bad faith when it took possession in 1976, introduced improvements, and disposed of the property despite knowledge that ownership pertained to the respondents; Article 526 of the New Civil Code governs.

• Jurisdiction: The nature of an action is determined by the material allegations and the reliefs prayed for, not by the caption. The NHA's complaint sought the nullification of OCT No. (804) 53839 on the ground that the property was forestland and inalienable when the title was issued. Because the OCT was issued on the basis of the CFI decision in LRC Case No. 520, the title could not be nullified unless the decision itself was first declared null and void. The complaint was therefore, for all intents and purposes, an action to annul the CFI/RTC judgment. Section 9(2) of Batas Pambansa Blg. 129 vests the Court of Appeals with exclusive original jurisdiction over actions for annulment of judgments of Regional Trial Courts. The trial court should have dismissed the complaint outright for lack of jurisdiction.
• Res Judicata: A former judgment bars a subsequent action when the following requisites concur: (a) the first judgment is final; (b) the court rendering it had jurisdiction over the subject matter and the parties; (c) it is a judgment or order on the merits; and (d) there is identity of parties, subject matter, and action. The doctrine has two aspects: bar by prior judgment, which bars a second action on the same claim, and conclusiveness of judgment, which precludes relitigation of a particular fact or issue in another action between the same parties on a different claim. There was no identity of causes of action between LRC Case No. 520 and the later complaints, but the issues raised in the nullity action had already been resolved with finality in LRC Case No. 520 and Civil Case No. C-169. In LRC Case No. 520, the CFI resolved the issue of whether the property was alienable and the issue of lawful ownership; it declared the property alienable and the applicants owners, and the decision became final and executory. The proceeding was in rem and bound the whole world, including the NHA. Under conclusiveness of judgment, the issues could no longer be relitigated by the Republic or by the NHA, which merely stepped into the Republic's shoes.
• Forum Shopping: The action in the court a quo was a device and a technique resorted to by the NHA to afford it a fresh opportunity to acquire the respondents' properties after failing in its complaint for eminent domain. The NHA played fast-and-loose with the trial and appellate courts and even with the Supreme Court. This scheme was a blatant misuse of judicial processes. A judgment properly rendered by a court vested with jurisdiction and which has acquired finality becomes immutable and unalterable, except only to correct clerical errors or mistakes. The Court echoed the pronouncement in Massaglia vs. Commissioner of Internal Audit that the government must not deal dishonorably or capriciously with its citizens and must not play an ignoble part or do a shabby thing. The NHA could not be allowed to continually deprive the respondents of their property for decades without due process of law.
• Validity of LRC Case No. 520 and OCT No. (804) 53839: The CFI decision in LRC Case No. 520 resolved the issue of alienability and lawful ownership and became final and executory. The proceeding being in rem, the decision bound the whole world, including the NHA. The Republic, through the Director of Bureau of Lands or the Director of Bureau of Forestry, did not oppose the application and did not appeal the decision. Even when OCT No. (804) 53839 was issued in 1959, the Republic did not file any action to nullify the CFI decision. It was only on February 17, 1994, or after almost forty years, that the NHA filed a complaint to nullify the CFI decision and the OCT on the ground that the property was inalienable. Presidential Decree No. 569 declared that a large percentage of the areas adjacent to the Dagat-Dagatan Lagoon were owned by private individuals and tasked the committee to negotiate with landowners, including the respondents; this confirmed the validity of the respondents' titles. The NHA could not feign ignorance because its vice-chairman, General Gaudencio V. Tobias, was then NHC President, and the Bureau of Lands was represented in the committee. The NHA had also caused the subdivision and award of the properties even before BFD Administrative Order No. 4-1766 was issued, which it could not have done if the land were still inalienable forest land. The administrative order could not nullify the final CFI decision, the OCT, and its derivative titles, nor override Presidential Decree No. 569, nor reverse the RTC order in Civil Case No. C-169 affirmed by the Court of Appeals and the Supreme Court.
• Estoppel: The NHA admitted in its complaint in Civil Case No. C-169 that the respondents were the lawful owners of the properties sought to be expropriated and that it was ready to pay just compensation. The RTC declared the respondents owners, the Court of Appeals affirmed, and the Supreme Court denied due course in G.R. No. 107582. These admissions were judicial admissions and could not be contradicted. The theory of the NHA's action in Civil Case No. C-169, which was acted upon by the Supreme Court, could not now be repudiated; an election of a specific theory for relief operates as a bar to the subsequent adoption of a different and wholly inconsistent theory. Under the principle of judicial estoppel, a party is bound by his judicial declarations and may not contradict them in a subsequent action or proceeding involving the same properties. The raison d'etre of the principle is to suppress or prohibit fraud and the deliberate shifting of position to suit the exigencies of each particular case. That the NHA is a government agency did not bar the application of the principle, because when a sovereignty submits itself to the jurisdiction of the court and participates therein, its claims and rights are justiciable by every other principle and rule applicable to private parties under similar circumstances.
• Builder in Good Faith: In determining whether a builder acted in good faith, Article 526 of the New Civil Code applies: a possessor in good faith is one who is not aware that there exists in his title or mode of acquisition any flaw that invalidates it, while a possessor in bad faith is one who possesses in any case contrary to the foregoing. The NHA acted in gross bad faith when it took possession of the property in 1976, introduced improvements thereon, and disposed of it despite knowledge that ownership pertained to the respondents. The trial court in Civil Case No. C-169 declared that the NHA not only acted in bad faith but also violated the Constitution. It found that despite persistent urging for a negotiated settlement, the NHA failed to give even the remaining unawarded lots to the registered owners and instead opted to expropriate after having taken possession for almost fourteen years. The taking in 1976 was described as seizure by the barrel of a gun, without any decree, court order, or ordinance, and without a letter or memorandum explaining the government's intention. The immediate taking of possession without due notice and hearing violated due process. Before a writ of possession may issue in expropriation, there must be a complaint sufficient in form and substance, a provisional determination of just compensation, and compliance with the deposit requirement under Rule 67; no complaint existed at the time of the seizure. These findings were affirmed by the Court of Appeals and by the Supreme Court in G.R. No. 107582.

• Nature of an action is determined by allegations and reliefs, not caption — The caption of a complaint is not determinative of the nature of an action; courts look to the material averments and the reliefs prayed for. Applied: the NHA's complaint, though captioned for declaration of nullity of titles, was in substance an action to annul the CFI decision in LRC Case No. 520 because the OCT could not be nullified without first invalidating the judgment on which it was based.
• Exclusive original jurisdiction of the Court of Appeals over annulment of RTC judgments — Under Section 9(2) of Batas Pambansa Blg. 129, the Court of Appeals has exclusive original jurisdiction over actions for annulment of judgments of Regional Trial Courts. Applied: the RTC lacked jurisdiction over the NHA's complaint; the action should have been filed in the Court of Appeals.
• Res judicata: bar by prior judgment and conclusiveness of judgment — The requisites are: (a) a final judgment; (b) jurisdiction over the subject matter and the parties; (c) a judgment on the merits; and (d) identity of parties, subject matter, and action. Bar by prior judgment bars a second action on the same claim; conclusiveness of judgment precludes relitigation of a particular fact or issue in another action between the same parties on a different claim. Applied: although there was no identity of causes of action, the issues of alienability and ownership had been finally resolved in LRC Case No. 520 and could not be relitigated.
• In rem registration proceedings bind the whole world — A land registration proceeding is in rem; the judgment is binding on the whole world, including the government and its agencies. Applied: the CFI decision in LRC Case No. 520 bound the NHA, which stepped into the shoes of the Republic.
• Judicial admissions — Admissions in pleadings are judicial admissions and cannot be contradicted. Applied: the NHA's complaint in Civil Case No. C-169 admitted that the respondents were the lawful owners and that the NHA was ready to pay just compensation; it could not later deny ownership to attack the titles.
• Judicial estoppel and election of inconsistent theories — A party who deliberately assumes a position in judicial proceedings is estopped from assuming an inconsistent position in the same or a subsequent proceeding involving the same parties and subject matter. Applied: the NHA's expropriation theory, acted upon by the courts, barred its later nullity theory.
• Government litigants are bound by the same rules as private litigants — When the State submits to the jurisdiction of the court and participates therein, its claims and rights are justiciable under the same rules applicable to private parties; it cannot claim superior advantage. Applied: the NHA, a government agency, was bound by judicial admissions and estoppel.
• Builder in good faith under Article 526 of the New Civil Code — A possessor in good faith is one unaware that there exists in his title or mode of acquisition any flaw invalidating it; one who possesses contrary to this is in bad faith. Applied: the NHA acted in gross bad faith because it knew ownership pertained to the respondents when it took possession, introduced improvements, and disposed of the property.
• Due process in expropriation and requisites for writ of possession — Taking private property without a complaint for expropriation, an order of condemnation, and payment of just compensation violates due process. Before a writ of possession issues, there must be (1) a complaint sufficient in form and substance, (2) a provisional determination of just compensation, and (3) compliance with the deposit requirement under Rule 67. Applied: no complaint existed when the NHA seized the property in 1976.
• Finality of judgments — A judgment properly rendered by a court with jurisdiction and which has acquired finality becomes immutable and unalterable, except only to correct clerical errors or mistakes. Applied: the final decisions in LRC Case No. 520 and Civil Case No. C-169 could not be relitigated.

• "It is axiomatic that the nature of an action is determined by the material allegations thereof and the reliefs prayed for therein, whether or not the plaintiff is entitled to such reliefs or only to some of them. The caption of the complaint is not determinative of the nature of an action." — The Court used this rule to characterize the NHA's complaint as one for annulment of the CFI/RTC registration judgment, thereby placing it within the Court of Appeals' exclusive original jurisdiction.
• "Even if we assume, for the nonce, that the trial court had jurisdiction over the action of the petitioner, nonetheless, we agree with the ruling of the trial and appellate courts that the petitioner’s action to annul OCT No. (804) 53839 was barred by the decision in LRC Case No. 520." — This is the Court's alternative holding on res judicata, applying conclusiveness of judgment despite the absence of identity of causes of action.
• "Under the principle of judicial estoppel, a party is bound by his judicial declarations and may not contradict them in a subsequent action or proceeding involving the same properties." — The Court applied this to bar the NHA from denying the respondents' ownership after having admitted it in the expropriation complaint.
• "In light of our foregoing disquisitions, it is evident that the petitioner acted in gross bad faith when it took possession of the property in 1976, introduced improvements thereon and disposed of said property despite knowledge that the ownership thereof pertained to the respondents." — This finding disposed of the NHA's claim to be a builder in good faith and entitled to reimbursement.

• Lopez vs. Reyes, 76 SCRA 179 (1977) — Explained the two aspects of res judicata: bar by prior judgment and conclusiveness of judgment. The Court relied on it to hold that the issue of alienability and ownership resolved in LRC Case No. 520 could not be relitigated.
• Kidpalos vs. Baguio Gold Mining Co., 14 SCRA 913 (1965) — Reiterated that estoppel by judgment extends to all facts involved in the judgment as necessary steps or the groundwork upon which it must have been founded. Cited to support conclusiveness of judgment.
• Burlen vs. Shannon, 99 Mass. 200 (1868) — Cited in Kidpalos; a fact once determined in a judicial proceeding and a final judgment rendered in accordance therewith cannot be litigated again between the same parties. Followed.
• Ybañez vs. Court of Appeals, 253 SCRA 540 (1996) — Held that a final judgment is immutable and unalterable except for clerical errors. Cited in condemning the NHA's repeated litigation.
• Massaglia vs. Commissioner of Internal Audit, 286 Federal Reporter 2d 259 (1961) — Quoted for the principle that the government must not deal dishonorably or capriciously with its citizens. Used to condemn the NHA's conduct.
• Sumulong vs. Guerrero, 154 SCRA 461 — Cited in the RTC findings quoted by the Court for the rule that taking possession without due notice and hearing violates due process and for the requisites of a writ of possession in expropriation.
• International Flavors and Fragrances (Phils.), Inc. vs. Argos, 364 SCRA 792 (2001) — Cited for the rule that the nature of an action is determined by the allegations and reliefs prayed for, not the caption.
• Logronio vs. Talesco, et al., 312 SCRA 52 (1999) — Cited for the authority of courts to rule on matters not raised by the parties if indispensable to the just and final resolution of pleaded issues.

• Section 9(2), Batas Pambansa Blg. 129 — Vests the Court of Appeals with exclusive original jurisdiction over actions for annulment of judgments of Regional Trial Courts. Applied: the NHA's complaint, in substance, sought annulment of the CFI/RTC decision in LRC Case No. 520, so the RTC had no jurisdiction.
• Article 526, New Civil Code — Defines a possessor in good faith as one unaware of any flaw invalidating his title or mode of acquisition, and a possessor in bad faith as one possessing contrary thereto. Applied: the NHA was a builder in gross bad faith because it knew the respondents owned the property.
• Rule 67, Rules of Court — Governs expropriation and requires, before a writ of possession issues, a sufficient complaint, a provisional determination of just compensation, and compliance with the deposit requirement. Applied: no complaint existed when the NHA seized the property in 1976, so the taking violated due process.
• Section 4, Rule 129, Rules of Court — Judicial admissions in pleadings do not require proof and cannot be contradicted. Applied: the NHA's admissions in Civil Case No. C-169 bound it in the later nullity case.
• Presidential Decree No. 569 — Created a committee to expropriate the Dagat-Dagatan Lagoon and adjacent areas and recognized that a large percentage of adjacent areas were privately owned. Applied: it confirmed the validity of the respondents' titles and negated the NHA's claim that the land was inalienable forestland.

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