G.R. No. 112584 - Ingco vs. Sandiganbayan

In 1969, Republic Act (R.A.) No. 5490 was enacted, designating Mariveles, Bataan as a principal port of entry and a Foreign Trade Zone.
In 1971, two proclamations were issued by then-President Marcos:

Proclamation No. 899 (August 31, 1971) reserved approximately 497.034 hectares in Mariveles for quarry site purposes under the Foreign Trade Zone.
Proclamation No. 939 (December 10, 1971) reserved an additional 267.69 hectares for Foreign Trade Zone purposes.

On November 20, 1972, Presidential Decree No. 66 created the Export Processing Zone Authority (EPZA), which assumed the functions and properties of the Foreign Trade Zone Authority (FTZA).
EPZA was later converted into the Philippine Economic Zone Authority (PEZA) via R.A. No. 7916, “The Special Economic Zone Act of 1995.”
With Executive Order No. 282 (October 30, 1995), PEZA assumed additional powers and assets from EPZA.
On July 27, 2009, R.A. No. 9728 established the Freeport Area of Bataan (FAB); concurrently, the Authority of the Freeport Area of Bataan (AFAB) was created to manage and operate the FAB.
All properties, funds, and rights of PEZA in the Bataan Economic Zone were transferred to AFAB.

AFAB, pursuant to its mandate, began transferring titles over real properties (originally held by PEZA) in Mariveles, Bataan into its name.
During surveying and inspection, AFAB discovered that several contiguous parcels of land, originally reserved under Proclamations Nos. 899 and 939 and part of the Foreign Trade Zone, were erroneously registered in the name of F.F. Cruz & Company, Inc. (FFCCI).
The subject properties in question are documented under several Transfer Certificates of Title (TCTs):

TCT No. T-144045 (area of approximately 31,353 sq. m.)
TCT No. T-144046 (area of approximately 10,000 sq. m.)
TCT No. T-144047 (area of approximately 50,007 sq. m.)
TCT No. T-144225 (area of approximately 39,997 sq. m.)
TCT No. T-144226 (area of approximately 20,000 sq. m.)

These titles were derived from Original Certificate of Title (OCT) No. 234 issued in 1972, despite the fact that by that time the land was already reserved as inalienable and indisposable.

AFAB filed an Amended Complaint for Declaration of Nullity and Cancellation of Title against FFCCI seeking to reclaim the subject properties by:

Arguing that the subject lands, being public domain and reserved under Proclamations Nos. 899 and 939, could not have been lawfully transferred to a private entity.
Asserting that the issuance of OCT No. 234, from which the TCTs were derived, was null and void because it covered land that was inalienable.
Requesting collateral relief such as the cancellation of the TCTs and the reconveyance of the properties back to AFAB (and ultimately, the State).

Instead of answering, FFCCI filed a Motion to Dismiss their Amended Complaint on six grounds:

The complaint did not state a valid cause of action because AFAB failed to clearly identify its legal rights or the corresponding obligations FFCCI was alleged to have breached.
The complaint amounted to an expropriation claim—a power which AFAB did not possess.
As a buyer in good faith, FFCCI contended it was entitled to the protection of the Torrens system and its title was indefeasible.
The defense of res judicata was invoked, asserting that previous judicial orders constituted conclusive evidence of ownership.
Prescription and laches barred the complaint.
The complaint was defective for not having the corresponding filing fees paid in full.

Insisting that the Amended Complaint sufficiently stated a cause of action and properly delineated its territorial boundaries using attached copies of Proclamations.
Arguing that the nature of the claim was for reversion (a remedy for reclaiming public domain lands), not expropriation.
Contending that FFCCI’s reliance on the Torrens system protection was misplaced as the lands involved were public domain.
Stating that prescription and laches are inapplicable against the State.
Claiming that as a government instrumentality, AFAB was exempt from certain procedural fees.

FFCCI, in its subsequent Reply, maintained that the technical descriptions were insufficient and questioned whether AFAB was even the real party in interest—asserting that if the subject properties were public domain, the proper party to pursue reversion was the State (through the Office of the Solicitor General).

The Regional Trial Court (RTC) of Mariveles, Bataan, Branch 4, in Civil Case No. 1066-ML:

Dated December 21, 2015, the RTC denied FFCCI’s Motion to Dismiss, finding that the Amended Complaint stated a cause of action and that evidentiary issues regarding territorial boundaries were for trial.
On March 30, 2016, the RTC reaffirmed its denial of FFCCI’s Motion for Reconsideration.

FFCCI then elevated the case by filing a Petition for Certiorari with the Court of Appeals (CA), challenging the RTC orders and asserting that:

The Amended Complaint was fatally deficient in not specifically identifying the parcel(s) and boundaries of AFAB’s claimed territory.
Reversion proceedings should only be initiated by the State.

In a ruling dated July 7, 2017, the CA initially denied FFCCI’s petition and affirmed the RTC orders.
Subsequently, the CA rendered an Amended Decision on June 7, 2018, granting FFCCI’s Motion for Reconsideration and dismissing AFAB’s Amended Complaint on the ground that:

The complaint failed to state a cause of action by improperly seeking reversion—a remedy that is solely within the purview of the State, not private parties.
AFAB was not the real party in interest, as the subject properties, being part of the FAB, remained public domain.

AFAB filed a petition for review with the Supreme Court, challenging the CA’s Amended Decision and raising issues regarding:

The propriety of the special civil action for certiorari used by FFCCI.
The CA’s amendment of its earlier final and executory decision.
Whether the CA erred in its determination that the Amended Complaint failed to state a cause of action and in declaring AFAB as not being the real party in interest under a reversion action.

Whether the special civil action for certiorari availed by FFCCI was proper to challenge the RTC’s ruling denying its Motion to Dismiss.
Whether the CA erred in amending its prior, final decision in a manner that affected the rights of the parties.
Whether the CA gravely erred in ruling that AFAB’s Amended Complaint failed to state a cause of action.
Whether the CA improperly decided issues that were not raised by FFCCI in its pleadings.
Whether the CA wrongly determined that the nature of the case was one for reversion—a remedy that can only be instituted by the State through the Office of the Solicitor General.
Whether the CA erred in declaring that the RTC did not have jurisdiction over the case.