G.R. No. 133705 - C-J Yulo and Sons Inc. vs. Roman Catholic Bishop of San Pablo Inc.

In April 1956, respondents Urbano C. Lara and Godofredo R. Eusebio filed Free Patent Applications Nos. 7-207 and 7-208, respectively, covering two parcels of land (10.3629 and 15.2892 hectares) situated in Napindan, Taguig, Rizal.
Following postings and a favorable recommendation from a Bureau of Lands representative, the applications were approved on June 14, 1956, leading to the issuance of Free Patent Nos. V-45853 and V-45854 on June 16, 1956.
The patents were transcribed by the Register of Deeds of Rizal on June 21, 1956 as Original Certificates of Title Nos. 140 and 139 pursuant to Section 122 of Act No. 496, as amended.

An investigation by the Anti-Graft and Corruption Board of the Bureau of Lands revealed that the parcels, being part of Laguna de Bay and underwater, could not be occupied or possessed.
Evidence showed no signs of cultivation or development on the lots.
On March 16 and March 22, 1960, respondents executed affidavits admitting noncompliance with certain requirements of the Public Land Act and agreeing to surrender their patents and certificates of title.

Based on the Board’s findings, the petitioner, represented by the Director of Lands, filed separate complaints in Civil Cases Nos. 6747 and 6748 against respondents Eusebio, Lara, and the Register of Deeds for cancellation of the free patents and certificates of title.
Summons and copies of the complaints were duly served on the respondents on August 16, 1961.
Due to the failure of respondents to file answers, the Court of First Instance of Rizal declared them in default on November 25, 1961.
On October 6, 1962, the court rendered decisions declaring the patents and titles null and void, ordering the Register of Deeds to cancel them; these decisions became final and executory due to the respondents’ inaction.

Following the cancellation orders, the Register of Deeds informed respondents (December 1962) to surrender their owner’s duplicate certificates, which they reportedly did by sending a letter on December 27, 1962.
On June 3, 1967, respondents Eusebio and Lara, now acting as plaintiffs, filed Civil Case No. 10047 seeking annulment of the earlier decisions and alleging lack of jurisdiction over the defendant (Director of Lands) and fraud in procuring the decision.
Despite irregular service on the Director of Lands, the Court of First Instance of Rizal declared him in default in Civil Case No. 10047 and permitted the respondents to adduce their evidence.
On July 6, 1967, a decision issued by the same court annulled the previous cancellation orders and reinstated the free patents and titles.

On March 14, 1968, a Motion to Admit Petition to Reopen Proceedings with Additional Parties was filed by the Director of Lands, who later also filed a petition to reopen proceedings.
Several oppositions and motions for reconsideration were filed by intervening parties, including respondents indicating transfers through deeds of absolute sale and transfers of interests to Gil Venzuela, Rodolfo Cenidoza, and spouses Ramon and Josefina Orosa.
The disputed transactions also involved subsequent cancellations of titles and the creation of Transfer Certificates of Title along with a deed of mortgage executed in favor of the Philippine Commercial and Industrial Bank by the Orosa spouses.

The Director of Lands alleged grave abuse of discretion by the respondent Judge for:

A critical factual issue arose concerning whether the decision in Civil Case No. 10047, filed after final judgments had been rendered, could be used to annul the earlier decisions in Civil Cases Nos. 6747 and 6748.

Whether the final and executory decisions dated October 6, 1962, in Civil Cases Nos. 6747 and 6748 are res judicata and binding on the parties.
Whether the subsequent petition (Civil Case No. 10047) filed by respondents Eusebio and Lara to annul the final decisions can be considered proper.

Whether personal jurisdiction over the respondents was properly established through the service of summons and filings in the earlier cases.
Whether the procedural requirements were complied with in both sets of proceedings.

Whether the earlier free patents and certificates of title, which pertain to non-disposable public lands (Laguna de Bay), were erroneously issued as a result of misrepresentations and fraud.
Whether any dealings or transfers involving alleged innocent purchasers (and the subsequent mortgage) can legitimize titles procured through fraud.

Whether a branch of the court can annul or modify a final, executed judgment of another branch within the same judicial context.
Whether the procedural maneuvers, including multiple motions for reconsideration, amounted to grave abuse of discretion.