G.R. No. 236381 - Republic vs. Sundiam

The Republic of the Philippines (Republic), through the Office of the Solicitor General (OSG), filed a reversion complaint concerning a portion of the Fort Stotsenberg Military Reservation in Pampanga, now Clark Air Force Base.
The disputed parcel was originally surveyed as Lot 727, Psd-528, Angeles Cadastre, and subdivided into seven lots including Lot 727-G, allegedly without the approval or signature of the Director of Lands.
On October 27, 1967, Lot No. 727-G was further subdivided into 63 lots, known as Csd-11198, approved by the Director of Lands.

Sixto Sundiam (respondent) registered Lot No. 986 and was issued Original Certificate of Title (OCT) No. 80 for the property.
Sundiam sold the property to L & F Marketing, Inc. (L & F, Inc.), which later transferred it to Liberty Engineering Corporation (Liberty Corp.).
The property was now under Transfer Certificate of Title (TCT) No. 34959.

The Republic filed a reversion complaint to nullify the titles on the property, asserting that the lot lies within the military reservation (Clark Air Force Base).
Summons issued by the Court of First Instance (CFI) required the Republic to furnish a sketch plan proving the lot’s location within the reservation.
The Republic failed to provide the sketch plan, resulting in the CFI archiving the case in 1982.
The Republic filed a motion to declare defendants in default in 1983, but the case was held in abeyance pending revival motions.

Twenty-four years later, the Republic moved to revive the case and sought summons by publication against respondents Sundiam, L & F, Inc., and Liberty Corp.
Liberty Corp. filed a motion to dismiss, invoking prescription, laches, and asserting that the property already passed onto innocent purchasers for value.
The Republic opposed, maintaining that neither prescription nor laches barred its claim.

The Regional Trial Court (RTC) Branch 56, Angeles City, dismissed the complaint on the ground of equitable estoppel due to laches.
The RTC denied the Republic's motion for reconsideration.
The Republic appealed to the Court of Appeals (CA), which affirmed the RTC’s dismissal, agreeing on the application of equitable estoppel by laches against the Republic to protect innocent purchasers for value.
The CA relied on the ruling in Republic v. Umali, affirming that the government cannot proceed against transferees who purchased in good faith and for value.

The Republic filed the present Petition under Rule 45, arguing the CA erred as equitable estoppel by laches should not bar the government’s reversion rights.
Liberty Engineering Corporation filed an opposition.

Whether the Court of Appeals erred as a matter of law in ruling that the Republic is estopped by laches from recovering land covered by a military reservation.