Case Digest (G.R. No. 150824)
Facts:
Land Bank of the Philippines v. Republic of the Philippines, G.R. No. 150824, February 04, 2008, Supreme Court Third Division, Reyes, J., writing for the Court.
Petitioner Land Bank of the Philippines (LBP) seeks review of the Court of Appeals’ August 23, 2001 Decision (and its November 12, 2001 denial of LBP’s motion for reconsideration) affirming the Regional Trial Court (RTC), Branch 15, Davao City, July 9, 1996 judgment declaring Original Certificate of Title (OCT) No. P-2823 and derivative titles null and void because the land covered was then forest land.
The parcel in question was the subject of Sales Patent No. 4576 issued on September 22, 1969 to Angelito C. Bugayong, and OCT No. P-2823 issued on September 26, 1969, covering 41,276 sq. m. in Bocana, Kabacan, Davao City (Lot No. 4159). The lot was marshy and inundated at high tide and had been classified in the forest zone under Project No. 1, LC-47 (August 6, 1923). Bugayong’s mother title was later subdivided into four lots (Plan Psd-139511 approved April 23, 1971) and transferred repeatedly: one branch of the chain of title—eventually registered as TCT No. T-57348—came to be owned by Lourdes Farms, Inc., which mortgaged it to petitioner LBP on April 14, 1980.
In July 1981 residents petitioned the Bureau of Lands to investigate the title. The Bureau’s ocular inspection found (1) the land remained forest land when the sales patent was issued and was released as alienable and disposable only on March 25, 1981 (pursuant to BFD Administrative Order No. 4-1585 and Section 13, P.D. No. 705); (2) the land was marshy and sea-water inundated at high tide; and (3) Bugayong never had actual possession. The Bureau concluded the sales patent was improperly issued and that the Director of Lands had no jurisdiction to dispose of the land.
Acting on the Bureau’s recommendation, the Republic, through the Director of Lands via the Office of the Solicitor General, filed a complaint in the RTC for cancellation of title/patent and reversion of the property to the public domain, naming Bugayong, subsequent owners (including Lourdes Farms, Inc.), and mortgagees (including LBP) as defendants. LBP answered and filed a cross-claim asserting it was a mortgagee in good faith for value and seeking payment of its outstanding loan or substitute collateral if the TCT were annulled.
The RTC found as factual that OCT No. P-2823 had been issued while the parcel remained forest land and concluded the mother title and all derivative TCTs were void ab initio; it ordered cancellation of OCT No. P-2823 and the listed TCTs and reverted the lot to the public domain (July 9, 1996). LBP appealed to the Court of Appeals, which affirmed on August 23, 2001, holding that titles issued over forest or non-alienable public land are void even against innocent ...(Subscriber-Only)
Issues:
- Did petitioner LBP, as an innocent mortgagee for value, acquire a valid and subsisting mortgage interest in the property covered by TCT No. T-57348?
- Does the constitutional guarantee against impairment of contracts protect LBP’s asserted mortgage interest in this title?
- Did the Court of Appeals err in not granting LBP relief under its cross-claim against Lourdes Farms, Inc., i.e., ordering payment of the in...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)