Title
Republic vs. Heirs of Bernabe
Case
G.R. No. 237663
Decision Date
Oct 6, 2020
Military land in Pampanga fraudulently registered; Republic, as beneficial owner, validly filed for title cancellation and reversion; BCDA President's VCAFS upheld.

Case Summary (G.R. No. 237663)

Key Dates and Procedural Milestones

  • Complaint for cancellation of title and reversion filed by the Republic through the OSG: August 23, 2004.
  • Original Certificate of Title No. 83 issued to Francisco Garcia: August 16, 1968.
  • Proclamation No. 163 (creating Clark Special Economic Zone and transferring lands to BCDA): April 3, 1993.
  • BCDA-related statutory framework: Republic Act (R.A.) No. 7227 (Bases Conversion and Development Act of 1992); R.A. No. 10149 (GOCC Governance Act of 2011).
  • RTC resolution granting CRBB’s motion to dismiss: May 13, 2014; RTC denial of motion for reconsideration: December 15, 2014.
  • CA Decision affirming RTC: February 21, 2018.
  • Supreme Court en banc resolution reversing CA and reinstating complaint: October 6, 2020.

Applicable Law and Doctrinal Sources

  • 1987 Philippine Constitution (applicable as the decision date is after 1990).
  • Rules of Court: Rule 45 (petition for review), Rule 3 Section 2 (real party in interest), provisions regarding verification and certification against forum shopping.
  • Commonwealth Act No. 141 (Public Land Act), Section 101 (authority of Solicitor General to institute actions for reversion).
  • Administrative Code of 1987 (definitions distinguishing government instrumentalities from GOCCs).
  • R.A. No. 7227 (creation and powers of the BCDA).
  • R.A. No. 10149 (definition and governance of GOCCs, GICPs/GCEs, GFIs and oversight mechanisms).
  • Jurisprudence cited: Shipside Incorporated v. CA (2001); Manila International Airport Authority v. CA (2006 en banc); BCDA v. Commissioner of Internal Revenue (2018); Altres v. Empleo (2008) and related authorities on verification and certification.

Factual Background

The Republic alleged that lands comprising certain lots (originally Lot No. 727 and its sublots, ultimately yielding Lot No. 965 and the subject parcel) were part of Fort Stotsenburg military reservation and never released as alienable and disposable public domain. The chain of title included an adjudication and issuance of OCT No. 83 to Francisco Garcia (1968), subsequent transfers, and finally TCT No. 107736 issued in the name of Ma. Teresita Bernabe. Bureau of Lands’ fact-finding and relocation survey found the parcel to be inside the military reservation, not occupied or cultivated by claimants, and lacking monuments—supporting the Republic’s claim that Garcia’s acquisition and the cadastral adjudication were tainted with fraud.

Procedural Posture Before Lower Courts

After impleading CRBB (mortgagee) as defendant and filing a Second Amended Complaint, CRBB moved to dismiss on grounds that the Republic was not the real party in interest because the lands had been transferred to BCDA (under Proc. 163 and R.A. 7227) and that only the Director of Lands (or BCDA as owner) could initiate reversion. CRBB also argued defects in the Verification and Certification Against Forum Shopping (VCAFS), asserting that Atty. Arnel Casanova (BCDA President & CEO) lacked board authorization to sign. The RTC granted CRBB’s motion and dismissed the complaint without prejudice; the CA affirmed, prompting the Republic’s petition for review by the Supreme Court.

Issues Presented to the Supreme Court

  1. Whether the CA erred in holding that the Republic is not the real party in interest and therefore cannot invoke imprescriptibility of actions.
  2. Whether the CA erred in affirming dismissal on the ground that the BCDA President could not validly sign the Verification and Certification Against Forum Shopping attached to the Second Amended Complaint.

CA and RTC Reasoning Recapped

The CA and RTC concluded that Proc. 163 transferred ownership of the Clark Air Base/reverted baselands to BCDA and that BCDA’s corporate powers and ownership made it the real party in interest; they relied on Shipside Incorporated for the proposition that BCDA is a corporate entity exercising proprietary functions distinct from the Republic, thus precluding the OSG from prosecuting reversion. They also held that the VCAFS was defective because Atty. Casanova’s signature lacked proof of specific board authorization.

Supreme Court’s Legal Analysis — Real Party in Interest

  • The Court reaffirmed the Rule 3, Section 2 standard: the real party in interest is the one who stands to be benefited or injured by the judgment, ordinarily the present owner of the right sought to be enforced.
  • The Court examined the nature of the CAB Lands and the statutory scheme: Proc. 163 transferred administration of the lands to BCDA and R.A. 7227 vested BCDA with corporate powers to “own, hold and/or administer” the military reservations transferred to it.
  • The Court recognized the jurisprudential evolution: earlier Shipside concluded BCDA was a corporate entity with proprietary ownership, making the Republic not the real party. However, subsequent en banc jurisprudence (Manila Int’l Airport Authority) and later BCDA v. CIR applied the Administrative Code’s distinctions and concluded BCDA is a government instrumentality vested with corporate powers—not a stock or nonstock corporation as defined by the Corporation Code/Revised Corporation Code. R.A. 10149’s definitions of GICPs/GCEs echoed the Administrative Code’s concept of instrumentalities with corporate powers and did not convert BCDA into a private corporation or otherwise displace the instrumentality classification.
  • Crucially, the Court emphasized that the BCDA’s capacity to “own, hold and/or administer” is qualified: R.A. 7227 limits BCDA’s power to dispose of such lands (e.g., presidential authorization and prescribed procedures under Section 8). Relying on Manila Int’l Airport Authority and related authorities, the Court held that where a government instrumentality’s power to dispose of transferred national government assets is restrained by law, the instrumentality acts as a trustee and the Republic retains beneficial ownership. Only the Republic (through the OSG pursuant to Section 101 of CA No. 141) may institute reversion actions regarding such properties.
  • Consequently, the Court abandoned the portion of Shipside holding that the Republic is not the real party in interest when titles concern properties transferred to BCDA; instead, where the BCDA’s disposition powers are limited by law, the Republic remains the beneficial owner and thus the real party in interest in reversion cases involving CAB Lands.

Supreme Court’s Legal Analysis — Verification and Certification Against Forum Shopping (VCAFS)

  • The Court acknowledged the CA’s concerns about the VCAFS: that Atty. Casanova’s signing might be beyond BCDA’s official functions and lacked board authorization. It reviewed the doctrine on verification and certification: verification defects may be curable or subject to substantial compliance; certification against forum shopping is more strictly enforced but may be relaxed in exceptional circumstances (Altres v. Empleo and other precedents).
  • The Court observed that a Secretary’s Certificate later filed (reflecting BCDA Board Resolution No. 2017-11-184) authorized the OSG to file cancellation/reversion cases and authorized the BCDA President/CEO (or specified officers) to verify and certify. Although the Secretary’s Certificate was belated and ordinarily would not cure a VCAFS defect, the Court found that special circumstances and the jurisprudential significance of the present case justified relaxing the rule and treating the Republic’s compliance as substantial. The Court thus treated the VCAFS as sufficiently compliant for purposes of proceeding.

Holdings and Relief

  • The Supreme

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