G.R. No. 211253 - Celedonia C. Demegillo vs. Arturo S. Lumampao, Maria Luz Fancobila, Concepcion L. Demavivas, and Imelda L. Babaan

The dispute involves a parcel of land known as Lot 3106 located in Trento, Agusan del Sur, comprising 95,689 square meters.
The land was originally subject to a homestead application by Adolfo Lumampao which later led to the issuance of Certificate of Land Ownership Award (CLOA) No. 00029958 and its subsequent registration as Original Certificate of Title (OCT) No. D-4960 in the names of Concepcion L. Demavivas, Arturo S. Lumampao, Luz L. Fancobila, and Imelda L. Babaan.
Celedonio C. Demegillo, who had allegedly been in continuous possession and cultivation of a 3-hectare portion of the lot since 1974, disputed the validity of the title issued to Demavivas and her co-plaintiffs.

Demavivas and her co-plaintiffs, being the surviving children of Adolfo, claimed that prior to Adolfo’s death in 1992 the petitioner Demegillo had entered and tilled a 3-hectare portion of the lot.
Despite Demavivas’ claim arising from the homestead application process that resulted in the issuance and registration of the CLOA and OCT in their favor, Demegillo continued to occupy the disputed 3-hectare area.
In response, Demegillo initially filed a complaint with the Department of Agrarian Reform Adjudication Board (DARAB) on June 14, 1994 to cancel the CLOA alleging an erroneous inclusion of his portion; concurrently, he asserted his claim through an Answer with Counterclaim filed with the RTC on July 7, 1994.
Key documentary evidence presented by Demegillo included:

A written agreement dated September 15, 1977 among Demegillo, Adolfo, and a third party, Nicolas Vapor, which purportedly subdivided Lot 3106 into three portions.
A notarized agreement dated March 23, 1980 indicating that Nicolas Vapor sold his share (which allegedly included Demegillo’s portion) to Adolfo.

The Regional Trial Court (RTC) in its judgment found that the CLOA was erroneously issued as it improperly covered Demegillo’s 3-hectare share. It ruled in favor of Demegillo by ordering:

Declaration of his lawful, adverse and continuous possession since 1974 over the 3-hectare portion.
Cancellation of OCT No. D-4960 in its entirety and reissuance of two separate certificates—one for the appellants (covering about 65,689 square meters) and one for Demegillo (covering the 3-hectare area).
The imposition of moral damages and attorney’s fees against the plaintiffs for pursuing a fraudulent claim.

The Court of Appeals (CA) later reversed the RTC’s decision in a May 30, 2013 Decision by:

Affirming the status of the CLOA and OCT as indefeasible due to their lapse of one year after issuance.
Emphasizing that the DARAB’s and PARAD’s final decisions on the agrarian matter and title validity barred further reexamination by the RTC.

Subsequent proceedings included motions for reconsideration (denied in a January 15, 2014 Resolution) and consolidated petitions for review on certiorari filed by both Demegillo (G.R. No. 211253) and Demavivas (G.R. No. 211259).

Ownership and a better right of possession over the 3-hectare portion based on continuous occupation since 1974.
That the issuance of CLOA No. 00029958, which included his land, was procured by fraud and should be canceled, and the title rectified in his favor.
That his counterclaim for reconveyance of the disputed portion was both timely and valid under the applicable rules of prescription and fraud.

Their title, having been duly issued and registered under the homestead application of their father, had become indefeasible after the lapse of one year.
Demegillo lacked the legal personality to challenge a title legally issued by the state, given his status as a mere applicant rather than a grantee.
They also pursued claims for actual, moral, and exemplary damages, including attorney’s fees, alleging that Demegillo’s actions led to unjust enrichment.

The Department of Agrarian Reform Adjudication Board (DARAB) rendered a decision (with the PARAD’s earlier resolution on November 24, 2008) affirming that Demegillo had no vested right over the disputed portion and that the title conferred to Demavivas and her co-plaintiffs was proper and indefeasible.
The finality of the DARAB decisions played a crucial role in both the RTC and CA considerations regarding the propriety of canceling the title and ordering reconveyance.

Whether the CA erred in declaring respondents (Demavivas and co-plaintiffs) the owners of Lot 3106 as settled by the DARAB/PARAD decision dated November 24, 2008.
Whether the RTC had jurisdiction to order the registration of the disputed 3-hectare portion in Demegillo’s favor despite the prior issuance and registration of OCT No. D-4960.
Whether the CA was correct in relying on a non-final DARAB decision, thereby dismissing Demegillo’s claim that his continuous possession and timely counterclaim vindicated his ownership and right to reconveyance.

The propriety of awarding damages, including actual, moral, and exemplary damages, as well as attorney’s fees, against Demegillo.
The contention that the CA’s refusal to modify its ruling on remanding for damages – against the backdrop of alleged illegal gains extracted by Demegillo – amounted to condoning unjust enrichment.

Determining who among the disputing parties possesses the better right of possession over the 3-hectare portion of Lot 3106, independently from the matter of title.