Facts:

The case involves the Spouses Ignacio Palomo and Trinidad Pascual, along with Carmen Palomo Vda. de Buenaventura, as petitioners against the Republic of the Philippines and several individuals, including Faustino J. Perfecto and Raffy Santillan, as respondents. The events leading to this case began on June 13, 1913, when then Governor-General William Cameron Forbes issued Executive Order No. 40, reserving approximately 440,530 square meters of land in Barrio Naga, Municipality of Tiwi, Province of Albay for provincial park purposes under Act 648 of the Philippine Commission. Subsequently, the Court of First Instance of Albay ordered the registration of 15 parcels of land in the name of Diego Palomo between December 1916 and January 1917. Diego Palomo later donated these parcels, totaling 74,872 square meters, to his heirs, the petitioners, shortly before his death in April 1937.

In 1950, Ignacio Palomo filed a petition for reconstitution of the lost original certificates o...

Facts:

Background of the Land Reservation

• On June 13, 1913, Governor General William Cameron Forbes issued Executive Order No. 40, reserving 440,530 square meters of land in Barrio Naga, Tiwi, Albay, for provincial park purposes under Act 648 of the Philippine Commission.

Registration of the Land

• The Court of First Instance of Albay ordered the registration of 15 parcels of land covered by Executive Order No. 40 in the name of Diego Palomo on December 9, 1916, December 28, 1916, and January 17, 1917.
• Diego Palomo donated these parcels (totaling 74,872 square meters) to his heirs, Ignacio and Carmen Palomo, two months before his death in April 1937.

Reconstitution of Titles

• Ignacio Palomo filed a petition for reconstitution of the lost original certificates of title (OCTs) on May 30, 1950, claiming they were lost during the Japanese occupation.
• The Register of Deeds of Albay issued Transfer Certificates of Title (TCTs) Nos. 3911, 3912, 3913, and 3914 in October 1953.

Conversion to National Park

• On July 10, 1954, President Ramon Magsaysay issued Proclamation No. 47, converting the area into the Tiwi Hot Spring National Park, under the control of the Bureau of Forest Development.
• The land was never released as alienable and disposable, making it ineligible for private ownership or registration under the Public Land Law (CA 141) or the Land Registration Act (Act No. 496).

Petitioners' Actions

• The Palomos continued to possess the land, paid real estate taxes, and introduced improvements (e.g., planting rice, bananas, pandan, and coconuts).
• On April 8, 1971, the petitioners mortgaged the land to the Bank of the Philippine Islands for a P200,000 loan.

Legal Disputes

• On May 7, 1974, the petitioners filed Civil Case No. T-143 for injunction and damages against employees of the Bureau of Forest Development who entered the land and cut down bamboo groves.
• On October 11, 1974, the Republic of the Philippines filed Civil Case No. T-176 for annulment and cancellation of the petitioners' certificates of title.

Trial Court Decision

• On July 31, 1986, the trial court ruled:
  1. Dismissed Civil Case No. T-143 (injunction and damages).
  2. Declared the OCTs and TCTs null and void.
  3. Forfeited all improvements on the land in favor of the government.
  4. Declared the lots part of the Tiwi Hot Spring National Park.
  5. Ordered the cancellation of the OCTs and TCTs.

Appeal to the Court of Appeals

• The Court of Appeals affirmed the trial court's decision, prompting the petitioners to elevate the case to the Supreme Court.

Issue:

• (Unlock)

Ruling:

• (Unlock)

Ratio:

1. Land Classification and Ownership:

   • The subject land was part of a forest zone and was never declared alienable or disposable. Forest lands cannot be privately owned, and possession, no matter how lengthy, does not convert them into private property.
   • The petitioners failed to prove that their predecessors derived title from an old Spanish grant, which is necessary to establish ownership under the Treaty of Paris.

2. Validity of Titles:

   • The OCTs and TCTs issued to the petitioners are invalid because the land was already reserved for public purposes under Executive Order No. 40 at the time of registration.
   • The principle of estoppel does not apply against the government, and the failure of the government to oppose the registration does not validate the titles.

3. Forfeiture of Improvements:

   • The petitioners are presumed to know the law, and their introduction of improvements on the land does not confer ownership or entitle them to compensation.
   • Only the portion of TCT 3913 falling within the reservation zone (1,976 square meters) is annulled, as the rest of the land was not part of the reservation.

4. Jurisprudence:

   • The Court reiterated that forest lands are inalienable and cannot be registered under the Torrens system unless reclassified as alienable and disposable.
   • Tax declarations and receipts are not conclusive proof of ownership in land registration cases.