G.R. No. L-41862 - B.R. Sebastian Enterprises, Inc. vs. Court of Appeals

The case arose from a Petition for Review on Certiorari filed by the Republic of the Philippines challenging the June 8, 2009 Decision of the Regional Trial Court (RTC) of Davao City in Civil Case No. 23,826-1995.
The Republic assailed the dismissal of its complaint for annulment or cancellation of certificates of title—specifically, Original Certificate of Title (OCT) No. 0-14 and its derivative Transfer Certificates of Title (TCT Nos. T-48269 and T-48724).
Respondents include Sps. Yu Cho Khai and Cristina Sy Yu, Alfonso L. Angliongto, Jr., various heirs of spouses Aurelio Pizarro and Filomena Pizarro, the Register of Deeds of Davao City, the Agdao Residents Association, Inc. (ARAI), and others.
Several parties later intervened, including the heirs of Pizarro and ARAI, while Felicitas Yap Angliongto, representing Alfonso, filed an answer denying the complaint.

On March 4, 1950, the Court of First Instance, Province of Davao (sitting as a cadastral court), issued Decree No. 3609 adjudicating a substantial parcel of land, Lot No. 1226-E (covering 39,044 square meters), in the names of Aurelio Pizarro, Gregoria Pizarro, and Teofila Pizarro.
As a result, OCT No. 0-14 was issued on August 7, 1950.
A portion of the land, measuring 11,308 square meters, was later conveyed to Alfonso L. Angliongto, Jr., who was issued TCT No. T-48269 on November 5, 1975.
Subsequently, a subdivision of the property (Lot No. 1226-E-2-A) was sold to Yu Cho Khai and Cristina Sy Yu, who were issued TCT No. T-48724 on December 24, 1975.

On September 27, 1976, Secretary of Natural Resources Jose J. Leido, Jr. issued Bureau of Forest Development Administrative Order (AO) No. 4-1369.
AO No. 4-1369 classified certain lands in Davao City—including Lot No. 1226-E—as alienable and disposable, expressly stating that such classification was “subject to private rights.”

The Agdao Residents Association (ARAI) filed a petition before the Department of Environment and Natural Resources (DENR), alleging that a portion of the subject land remained forest land over which its members exercised possession.
Heirs of Pizarro intervened, contending that the conveyances to Alfonso and the Spouses Yu were judicially rescinded, and they sought the issuance of a new certificate of title in their names.
Felicitas Yap Angliongto, on behalf of Alfonso, argued that the Registry of Deeds had already issued the titles pursuant to previous valid conveyances and that the area was already being used for residential purposes.

In its Decision dated June 8, 2009, the RTC declared that the Republic’s complaint was barred by laches and estoppel due to the 45-year lapse since issuance of OCT No. 0-14—a mistake, if any, allegedly attributable to State agents.
The RTC held that AO No. 4-1369, being “subject to private rights,” effectively validated the existing titles and cured any defect in the titles derived from Decree No. 3609 and the subsequent conveyances.
The RTC dismissed both the Republic’s complaint and the counterclaims of the intervening parties.
The Republic then elevated the case directly to the Supreme Court on pure questions of law concerning reversion of public land.

The Republic maintained that the subject property should revert to the public domain, asserting that title issuance was erroneous because the property was never properly declassified from forest land at the time of the cadastral proceedings.
Relying on precedents (e.g., Republic v. Bocase, Espinosa, Cabrera, and Heirs of Sin), the Republic argued that the land was still part of the public domain and that its reversion claim was proper.
Conversely, the respondents and intervenors argued that the issuance of OCT No. 0-14, and later TCTs, following a valid compulsory cadastral proceeding, established the land’s alienable and disposable character.
A separate concurring opinion underscored that the positive evidence stemming from the cadastral proceeding, under Act No. 2259, confirmed the land’s private status at the time of title issuance.

Should OCT No. 0-14 and its derivative titles (TCT Nos. T-48269 and T-48724) be declared null and void?

Whether the Republic’s complaint, though labeled as an annulment/cancellation action, is in substance an action for reversion of public land.

Whether the Republic was able to discharge the burden of proving that the land was, at the relevant time, part of the public domain by a positive act of classification.

Whether AO No. 4-1369, issued “subject to private rights,” and the long lapse of 45 years bind the issue of reversion and protect the private titles from cancellation.

Whether the precedents cited (Bocase, Espinosa, Cabrera, Heirs of Sin, etc.) support a reversion action sufficient to cancel private titles despite the established cadastral proceedings.