G.R. No. 244256 - People vs. Sta. Cruz y Ilusorio

On September 5, 1938, the Republic of the Philippines instituted Civil Case No. 781 in the Court of First Instance (CFI) of Cebu to expropriate Lots 932 (25,137 sqm, TCT No. 14921) and 939 (13,164 sqm, TCT No. 12560) of the Banilad Friar Land Estate for a military reservation.
Pursuant to a CFI order dated October 19, 1938, the Republic deposited ₱9,500.00 with the Philippine National Bank and took possession.
On May 14, 1940, the CFI ordered payment of ₱4,062.10 as just compensation. The Denzons appealed to the Court of Appeals, which dismissed the appeal on March 11, 1948, with final judgment entered April 5, 1948.

In 1950, heir Jose Galeos claimed rentals from the National Airports Corporation (NAC), which denied knowledge. Another heir sought Presidential intervention in 195?–1961, but only a willingness to pay appraised value was expressed.
On September 20, 1961, Francisca Galeos-Valdehueza and Josefina Galeos-Panerio (successors) filed Civil Case No. R-7208 in the same CFI for recovery of possession and damages. New TCTs (Nos. 23934 and 23935) were issued on November 9, 1961, with annotations granting NAC priority upon payment of market value.
On July 31, 1962, the CFI: (a) declared Valdehueza and Panerio as owners, (b) adjusted compensation to ₱16,248.40 plus 6% annual interest from April 5, 1948, and (c) ordered execution of a deed of sale to the Republic upon payment. Their motion for reconsideration was denied.
On May 19, 1966 (No. L-21032), the Supreme Court affirmed: owners retained title, could only demand payment (not possession), and compensation remained unpaid despite the initial ₱9,500 deposit being disbursed to unknown payees.

In 1964, Valdehueza and Panerio mortgaged Lot 932 to Vicente Lim. For non‐payment, Lim foreclosed in 1976; TCT No. 23934 was cancelled and TCT No. 63894 issued to him.
On August 20, 1992, Lim filed a quieting of title suit (RTC, Branch 10, Cebu City), later amended to implead the Republic. On May 4, 2001, the RTC declared Lim absolute owner of Lot 932 and dismissed monetary claims.
The Court of Appeals (CA-G.R. CV No. 72915, Sept. 18, 2003) affirmed, holding the Republic’s claim a cloud on Lim’s title due to over 50 years of non-payment.
This Court denied certiorari (March 1, 2004) and reconsideration (May 17, 2004). Subsequent motions were noted but not acted upon.

Whether the Republic retained ownership of Lot 932 despite failing to pay the just compensation ordered in 1940 (₱4,062.10) and reaffirmed in 1966 (₱16,248.40 plus interest).
Whether respondent Vicente Lim, as mortgagee and dann owner by foreclosure, is entitled to quieting of title and recovery of possession, given the Republic’s prolonged non-payment.