G.R. No. L-58469 - Makati Leasing and Fice Corp. vs. Wearever Textile Mills, Inc.

The land in dispute was originally part of a free patent issued on April 17, 1937 (Free Patent No. 23263) in the name of Herminigildo Agpoon.
Pursuant to this patent, the Register of Deeds of Pangasinan issued Original Certificate of Title No. 2370 on May 21, 1937.
Presentacion Agpoon Gascon, as the inheritor of Herminigildo Agpoon, was subsequently issued Transfer Certificate of Title No. 32209 on April 6, 1960, and declared the land for taxation in her name under Tax Declaration No. 11506.

Petitioners assert that the disputed area was formerly part of the Agno-Chico river bed, which was abandoned following a major flood in 1920 that caused the river to change its course.
They contend that by virtue of Article 370 of the old Civil Code, the abandoned river bed automatically accreted to the riparian lands, thereby vesting in them rights over the aliquot portions bordering their properties.
Petitioners claim that they have occupied, cultivated, and improved the land continuously, constructing irrigation systems, planting crops, and thereby converting it into productive private property.
They further allege that the issuance of the free patent and subsequent certificate of title is null and void since the land, being a product of natural accretion and private ownership, could not have been properly disposed of as part of the public domain.

In April 1971, a complaint (Civil Case No. U-2286) was filed by the respondent spouses seeking recovery of possession and damages, alleging that they were the registered owners based on the public grant.
Petitioners countered that the land was an abandoned river bed acquired by accretion and that the public grant was inapplicable because the land was never public.
The parties entered a joint stipulation admitting key facts, including the identity and area of the disputed land, the abandonment of the original river bed due to the flood in 1920, and the existence of the free patent and subsequent title.
On March 6, 1974, while the recovery action was pending, petitioners filed a separate complaint in Civil Case No. U-2649 for annulment of title, reconveyance, and/or an action to clear title on the basis that the land was acquired by virtue of natural accretion and not by proper public disposition.

On June 21, 1974, the trial court in Civil Case No. U-2286 rendered a decision ordering the respondent spouses to surrender the physical possession of the land and to pay produce, damages, attorney’s fees, and costs.
Dissatisfied with the trial court's ruling, petitioners appealed. The Intermediate Appellate Court affirmed the trial court’s decision in totality in AC-G.R. CV No. 60388-R, promulgating the judgment in favor of the private respondents.
Concurrently, in Civil Case No. U-2649 for annulment of title, the trial court dismissed petitioners’ complaint by relying on the precedent set in Antonio, et al. vs. Barroga, et al., holding that an action to annul a free patent long after its finality has no cause of action, even if the land was allegedly private.

Petitioners argued that the land, being an abandoned river bed acquired by accretion, was private property as provided under Article 370 of the old Civil Code, and that the subsequent governmental actions to issue a free patent were outside the jurisdiction of the Bureau of Lands.
They maintained that their continuous possession and improvements over the years validated their ownership, and that a proper action to quiet title or reconvey the property is both just and imprescriptible.
Respondents, on the other hand, based their defense on the validity of the free patent and the principle that a Torrens title, once issued and not fraudulently acquired, confers indefeasible rights—even though petitioners alleged that the public grant was improperly applied to land that was not public.
Additional contentions by petitioners involved challenging the evidentiary presumptions of possession and the application of procedural rules (such as Section 41 of the Code of Civil Procedure) in favor of the respondents, as well as contesting the laches argument due to the respondents’ prolonged inaction.

Whether the lower court erred in dismissing the annulment complaint by relying solely on the ruling in Antonio, et al. vs. Barroga, et al., despite the factual allegations establishing a cause of action based on private ownership under Article 370.

Does the allegation of private property ownership arising from an abandoned river bed amount to sufficient cause to annul the free patent and subsequent titles?

Whether judicial admissions contained in the stipulated facts between the parties precluded the respondents from disputing those matters.

To what extent should the admitted facts bind the respondents in evaluating their claims and defenses?

Whether respondent court misapplied the presumption of prior possession by requiring respondents (or their predecessors) to prove possession, contrary to the evidence of continuous adverse occupancy by petitioners.

Was the evidence on record adequate to establish petitioners’ uninterrupted possession of the land?

The propriety of applying Section 41 of the Code of Civil Procedure in favor of the respondents when petitioners relied instead on their long-standing possession and accretion claims.

Did respondents meet all requisites for acquisitive prescription under Section 41?

Whether the Government had the legal authority to issue a free patent and convey a Torrens title for land that was already privately owned by virtue of accretion under Article 370.

Is the issuance of the free patent over a land that had ceased to be public legally tenable?

Whether respondents are barred by the doctrine of laches due to their failure to assert their claim or recover the land over a period of 30 to 50 years.

Can respondents’ long inaction preclude them from asserting a title derived from a public grant over a land that petitioners continuously occupied?