G.R. No. 108000 - People vs. Court of Appeals

Case Summary (G.R. No. 108000)

Republic's cause of action: cancellation of title and reversion

The Republic (through the OSG and the BFD) filed a complaint for cancellation of title and reversion, alleging that the source title (OCT P‑2388) was spurious/irregular because approximately 162,500 sq. m. of the land was part of timberland per BFD Land Classification Maps Nos. 1715 and later 2319, and was included within the 140‑hectare Agro‑Forestry Farm Lease Agreement (AFFLA) No. 175 in favor of Atty. Marte. The complaint alleged that the parcel was inalienable and not registrable.

Evidentiary showing of the Republic

The Republic presented documentary maps and witness testimony from DENR officials and a geodetic engineer. The supervising cartographer testified that plotting showed the disputed area largely inside AFFLA No. 175 and that only about two hectares were alienable and disposable. The surveyor corroborated this. The geodetic engineer pointed out the absence of a required Bureau of Forestry certification in the title carpeta, an essential requirement for issuance of title to disposable public land.

RTC finding and judgment in the reversion case

The RTC found in favor of the Republic: Free Patent No. V‑79606 and OCT P‑2388 (and derivative TCT No. 45232) were declared null and void; Reyes was ordered to surrender the owner’s duplicate and vacate; the Register of Deeds was ordered to cancel the title; the land was declared reverted to the public domain subject to AFFLA No. 175. The court also declared the roughly two‑hectare area non‑registrable for lack of Bureau of Forestry certification.

Appeals and finality of reversion judgment

Reyes appealed to the Court of Appeals, which affirmed the RTC. His subsequent petitions to this Court were denied, making the reversion judgment final with respect to title and state ownership of the land.

Motion to remove improvements under Rule 39(10)(d)

After finality of the reversion decision, Reyes filed a motion under Rule 39, Sec. 10(d) of the 1997 Rules of Civil Procedure seeking leave to remove his fruit‑bearing trees and to appropriate the unharvested fruits for a one‑year period to avoid unjust loss of his investment. Reyes asserted he had been in good faith possession since 1970 and had expended significant sums; he requested a reasonable period to remove improvements.

Opposition by the Republic and related proceedings

The Republic opposed the motion, invoking accession (Art. 440) and arguing the land remained public domain and not subject to disposition; it also maintained that any initial good‑faith status ceased when the reversion action was filed in 1987. Atty. Marte filed a separate complaint for injunction claiming encroachment on his leased area, which the RTC dismissed. The RTC treated the motion to remove improvements as incident to execution and, after hearing, granted Reyes a one‑year period to remove and appropriate the trees/fruits.

CA review of the RTC order on improvements

The Republic sought certiorari relief in the CA, asserting grave abuse of discretion and lack of jurisdiction. The CA dismissed the petition and affirmed the RTC’s order, finding no evidence that Reyes acted in bad faith in acquiring and planting the trees and, therefore, that the rules on accessions and the rights of a builder/planter in good faith (Arts. 445 and 448) were applicable.

Issues raised to the Supreme Court by the Republic

The Republic’s petition to the Supreme Court principally argued that: (1) the motion to remove improvements was barred by res judicata/prior judgment because the reversion decision was final and had not provided for removal or compensation; (2) the RTC no longer had jurisdiction to modify or vary a final judgment except as allowed by law; and (3) the issue of improvements had been disposed of in the reversion proceedings and could not be re‑litigated via an execution incident.

Reyes's position before the Supreme Court and equitable contention

Reyes maintained that his motion was an incident to execution and a proper procedural remedy under Rule 39(10)(d). He contended he had acted and invested in good faith before the reversion suit (from 1970 until notice in 1987), and that denying him relief would amount to confiscation without just compensation because the State would benefit from his improvements without indemnifying him.

Supreme Court’s assessment: finality of title versus omission on improvements

The Court acknowledged that the reversion judgment establishing State ownership had become final. However, it noted that the prior decisions did not address the rights or remedy for improvements introduced by Reyes; the reversion judgments contained no provision on allowance, removal, or indemnity for the improvements. The absence of adjudication on that specific issue left a legal vacuum as to Reyes’s claims for compensation or removal.

Determination of Reyes as a planter in good faith and applicable Civil Code protections

The Court agreed with the factual finding that Reyes was a planter in good faith from 1970 until at least the filing of the reversion suit in 1987: he relied on a registered title, tilled the land, and invested substantially. Under Articles 448 and 546 of the Civil Code, a builder or planter in good faith is entitled to reimbursement for useful improvements and may retain possession of the improvements until reimbursement is made. The Court also invoked the doctrine against unjust enrichment and Art. 22 (obligation to return benefits acquired at another’s expense) to conclude the State should not be allowed to appropriate the fruit‑bearing trees without just compensation.

Environmental constraints and limitation on removal of improvements

Notwithstanding Reyes’s entitlement to remedies for improvements, the Court recognized the land was subject to AFFLA No. 175, which imposes affirmative conservation obligations on the lessee and reflects constitutional policies to protect a balanced and healthful ecology (Art. II, Sec. 16) and to cons

Case Syllabus (G.R. No. 108000)

Procedural Posture and Relief Sought

Petition for Review on Certiorari under Rule 45 of the Rules of Court filed in the Supreme Court (G.R. No. 163794), assailing the Court of Appeals Decision dated June 4, 2004 (CA-G.R. SP No. 52261) which affirmed the Regional Trial Court (RTC), Branch 41, Pinamalayan, Oriental Mindoro, Joint Order dated December 28, 1998.
The petition sought reversal of the CA’s affirmation of the RTC’s grant to respondent Danilo Reyes of a motion under Rule 39, Section 10(d) to remove improvements planted on property subject to execution following final reversion decisions.
The Supreme Court’s disposition: Petition denied; CA decision affirmed with modification directing the RTC to determine the improvements and their value and directing the Republic (via BFD of DENR) to pay Reyes for such improvements with right of subrogation against the AFFLA lessee. No costs.

Relevant Facts

In circa 1970, Danilo Reyes purchased a parcel of land described as 182,941 square meters in Barangay Banus, Pinamalayan, Oriental Mindoro, from one Regina Castillo, who held Original Transfer Certificate of Title (OCT) No. P-2388 issued pursuant to Free Patent No. V-79606.
Reyes immediately developed the land, planting about 1,000 mango trees, more than 100 Mandarin citrus, and more than 100 guyabano (soursop) trees, and had title transferred into his name as TCT No. 45232.
Subsequent government mapping and documentary evidence showed that approximately 162,500 square meters of the subject land fell within timberland of Oriental Mindoro and were thus inalienable and not subject to disposition or registration.
Maps cited: BFD Land Classification Map No. 1715 (later amended to Map No. 2319) indicated the 162,000–162,500 sq.m. portion was within the 140-hectare Agro-Forestry Farm Lease Agreement (AFFLA) No. 175 granted to Atty. Augusto D. Marte; only roughly two (2) hectares appeared alienable and disposable.
The Republic, through the Office of the Solicitor General (OSG) on behalf of the Bureau of Forest Development (BFD), filed a Complaint for Cancellation of Title and/or Reversion alleging OCT No. P-2388 was spurious, fictitious and irregularly issued with respect to that portion within timberland; sought nullification of Castillo’s free patent and consequent cancellation of Reyes’ TCT and reversion of the land to the State, subject to AFFLA No. 175.

Documentary and Witness Evidence Presented by the Republic

Documentary exhibits included BFD Land Classification Maps (Exhs. A/B corresponding to LC Map No. 1715 and amended Map No. 2319), copy of AFFLA No. 175 and its map, and the original Title documents (Free Patent No. V-79606, OCT No. P-2388).
Witnesses for the Republic:
- Armando Cruz, supervising cartographer of DENR: testified that plotting per LC Maps showed the 162,000 sq.m. covered by OCT No. 2388 were entirely inside AFFLA No. 175 and that only about two hectares were alienable and disposable.
- Alberto Cardião, DENR employee and surveyor: corroborated Cruz’s testimony that only two hectares were alienable and disposable.
- Vicente Mendoza, Geodetic Engineer: explained titling procedure and noted, upon review of the “carpeta,” that though the carpeta appeared valid it lacked certification of the Bureau of Forestry—an essential requirement for issuance of title to disposable public land.

Evidence and Claims Presented by Reyes (Private Respondent)

Reyes presented evidence of extensive development and substantial expenditures on planting and improving the land from circa 1970, including testimony and proofs as to the number and maturity of fruit-bearing trees and investments made thereon.
Reyes asserted he purchased the land in good faith, relied on TCT No. 45232, cultivated and maintained the trees for decades, and that removal of the improvements without compensation would amount to confiscation without just compensation.
Reyes filed, on February 4, 1998, a Motion to Remove Improvements under Rule 39, Section 10(d) seeking one (1) year to remove the fruit-bearing trees and to appropriate all unharvested fruit during that period.
Reyes also argued that his right to remove improvements was an incident of the reversion case, invoking Articles 445, 448, 546 and related Civil Code provisions applicable to a builder/planter in good faith.

Trial Court (RTC) Decisions and Rationale

RTC (Presiding Judge Edilberto Ramos) held that the Republic proved the inalienability and invalidity of the title covering the timberland portion; declared Free Patent No. V-79606 and OCT No. P-2388 (Castillo) and derivative TCT No. 45232 (Reyes) null and void, ordered surrender of title and cancellation as null and void ab initio, and declared reversion of the land to the government subject to AFFLA No. 175. The two-hectare alienable portion was also declared null and void for failure to secure Bureau of Forestry certification.
On Reyes’ Motion to Remove Improvements (filed after finality of the reversion decision), the RTC granted the motion under Rule 39, Sec. 10(d), giving Reyes one year to remove, cut and appropriate the fruit-bearing trees he planted, and denied OSG’s comment opposing the motion. The RTC dismissed Atty. Marte’s complaint for injunction against Reyes for lack of merit.

Court of Appeals Ruling and Reasoning

The Court of Appeals affirmed the RTC decisions (including the grant of the Motion to Remove Improvements) in CA-G.R. SP No. 52261.
CA found no evidence that Reyes acted in bad faith when he acquired the land or planted perennial plants; concluded Reyes was a planter in good faith, making Articles 445 and 448 of the Civil Code applicable.
CA held that Reyes’ planting and investment constituted proof of improvements and expenses