BEATERIO DEL SANTISIMO ROSARIO DE MOLO, PETITIONER, VS. COURT OF APPEALS, JOSE ARROYO, MARIANO ARROYO, PEDRO ARROYO, IGNACIO ARROYO AND JESUSA LACSON VDA. DE ARROYO, RESPONDENTS.

Beaterio del Santisimo Rosario de Molo versus Court of Appeals

The Case

This is a petition for review on certiorari brought by the Beaterio del Santisimo Rosario de Molo, a corporation sole based in Molo, Iloilo, against the Arroyo family and the Court of Appeals. The Beaterio sued to annul the free patent titles covering a sugar land known as Hacienda Alipion and to recover the property by reconveyance, claiming that the land had been donated to it and that the patents were obtained through fraud. The case matters because it gathers in one decision the rules on public land: that a donor cannot give what he does not own, that a person who has no imperfect title cannot ask for its confirmation, that fraud in a free patent is remedied by a reversion suit brought by the State, and that a title over public land is not defeated by the doctrine of implied trust.

Procedural History

The Beaterio filed its complaint for reconveyance of a parcel of land and damages in the Court of First Instance of Negros Occidental, Branch Five, in March 1962. After trial on the merits, the trial court dismissed the complaint and, going further, declared the extrajudicial partition, the deed of donation, and the contract of lease all null and void. The Beaterio appealed. The Court of Appeals affirmed the judgment in its entirety, holding that the Beaterio had no cause of action either for annulment of the titles or for reconveyance. The Beaterio then came to the Supreme Court by petition for review on certiorari, and the Supreme Court affirmed both courts below.

Facts

Ignacio Arroyo, during his lifetime, owned extensive properties, among them Hacienda Alipion in Negros Occidental. His first wife, Maria Pidal, predeceased him, leaving three children: the late Senator Jose Maria Arroyo, Sor Rosario Arroyo, who became the first prioress of the Beaterio, and Doctor Mariano Arroyo. Sor Rosario died in June 1957. Hacienda Alipion consisted of two adjoining sugar lands: Lot 1269 of the Isabela cadastre, about six and seven tenths hectares, covered by a certificate of title issued in 1918 in the names of the spouses Ignacio Arroyo and Maria Pidal; and Lot 756 of the Pontevedra cadastre, the major portion at about eighty eight and eight tenths hectares, which had been declared public land in October 1917 in a cadastral case.

In July 1924, Ignacio adjudicated Hacienda Alipion to himself as his conjugal share in an extrajudicial partition with his children. The description in that partition referred only to Lot 1269, and Lot 756 was not mentioned. In January 1928, Ignacio executed a deed of donation inter vivos of Hacienda Alipion and other properties in favor of the Beaterio, and again the deed described only Lot 1269, with no mention of Lot 756. In 1947, on the assumption that it owned the hacienda by virtue of the donation, the Beaterio through Sor Rosario leased it to Jesusa Lacson Vda. de Arroyo for five crop years.

During the first year of the lease, Jesusa learned that there was no title to the leased land because it was public land. She raised the matter with Sor Rosario, who reportedly said that if the land would otherwise pass to strangers, she preferred that it go to her nephews. The Arroyo brothers then filed their respective applications for free patent, and in March 1952 they were individually awarded free patents followed by original certificates of title. Antonio Arroyo later acquired the property in a raffle among the brothers and mortgaged it to the Development Bank of the Philippines, but the loan was paid. The Beaterio then sued to annul the titles and recover Lot 756.

Issues

• Whether or not the Beaterio acquired ownership of Lot 756 through the deed of donation from Ignacio Arroyo.
• Whether or not the free patent titles issued to the Arroyo brothers may be annulled at the instance of the Beaterio on the ground of fraud and misrepresentation.
• Whether or not the Beaterio may invoke the doctrine of implied trust to recover the land.
• Whether or not the Beaterio possessed the essential requisites for judicial confirmation of an imperfect title under the Public Land Act.

Applicable Provisions

Section 101 of the Public Land Act, Commonwealth Act Number 141, provides:

All actions for the reversion to the Government of lands of the public domain or improvements thereon shall be instituted by the Solicitor General or the officer acting in his stead in the proper court, in the name of the Republic of the Philippines.

This fixes the remedy for fraud in a free patent: it is the State, not a private claimant, that brings the action for reversion.

Section 48 of the Public Land Act, as discussed in the concurring opinion, provides:

Those who by themselves or through their predecessor-in-interest had been in open, continuous, exclusive and notorious possession of agricultural land of the public domain under a bona fide claim of ownership since July 26, 1894, preceding the filing of the application for confirmation of title, shall be conclusively presumed to have performed all the conditions essential to a government grant and shall be entitled to a certificate of title.

This is the provision the Beaterio had to satisfy to claim an imperfect title, and it failed because its predecessor's possession began only in 1905.

Ruling

On the first issue, the Court held that the Beaterio never became the owner of Lot 756. The lot was not included in the extrajudicial partition nor in the deed of donation, and even if it had been, Ignacio had no right of ownership to transmit, because the lot had been declared public land as early as October 1917, eleven years before the donation. He took no steps to reopen the cadastral case or to confirm his title.

On the second issue, the Court held that the Arroyo brothers were well within their rights to apply for free patents, since the land was public land and the Director of Lands could validly dispose of it. If the patents were invalid because of false statements in the applications, the remedy is an action for reversion by the State under Section 101. If the Beaterio claimed fraud, it had four years from the discovery of the fraud, or from the issuance of the titles in March 1952, within which to sue for annulment, but it filed only in March 1962. The Court also noted that Sor Rosario had apparently acquiesced in the applications to keep the property within the family, the complaint having been filed five years after her death.

On the third issue, the Court held that the doctrine of implied trust could not be invoked, because by reason of its classification as public land the Beaterio could claim no better right nor any prior equity. The case of Herico versus Dar was inapplicable, since there the land had not been declared public land and the landlord had been in possession since 1892.

On the fourth issue, the Court held that the Beaterio did not possess the requisites for judicial confirmation of an imperfect title. Its predecessor's possession began at the earliest in 1905, not on or before July 26, 1894. Republic Act Number 1942, which amended Section 48 by limiting possession to thirty years, took effect only in June 1957, by which time Lot 756 had already been disposed of in favor of the Arroyo brothers, who had acquired a vested right that the later law could not defeat.

Doctrine

A donor cannot donate what he does not own; a donation of public land conveys nothing, because the donor had no right of ownership to transmit. A person who has not been in open, continuous, exclusive and notorious possession of public land since July 26, 1894, or through a predecessor in interest, has no imperfect title to confirm. Fraud in the acquisition of a free patent is remedied by an action for reversion brought by the Solicitor General in the name of the Republic, not by a private suit for annulment. An action for annulment of a patent on the ground of fraud must be brought within four years from discovery. And the doctrine of implied trust cannot be invoked against a title over land that has been classified as public land, because the claimant can show no prior equity.

Disposition

The Supreme Court affirmed the judgment under review, dismissing the Beaterio's complaint, with no pronouncement as to costs.

Remember This

The one line to memorize: public land cannot be donated, and fraud in a free patent is corrected by the State through reversion, not by a private claimant through reconveyance. Examiners use this case to test the requisites of judicial confirmation of imperfect title, the four year period to annul a patent for fraud, and the rule that implied trust does not lie against public land.