REPUBLIC OF THE PHILIPPINES, PETITIONER-APPELLEE, VS. TEODOCIA LOZADA, APPLICANT-RESPONDENT-APPELLANT.

The Court affirms on appeal the decision of the Pasay City court of first instance granting the Republic’s
timely petition for review of the decree of registration and cancelling the certificate of title issued in favor of the
applicant-appellant, since it clearly appears that actual fraud had been
employed by the applicant in pro­curing the title over the lands in question
which are part of the pu­blic domain (and not private property as falsely
claimed by applicant) and the Republic is entitled to their reversion to the
public domain.

On October 26, 1966 applicant-appellant Teodocia
Lozada had filed an application in the Court of First
Instance of Rizal for the registration of, and
confirmation to, two parcels of land in Las Piñas, Rizal (designated as Lots 2 and 3, Psu.
218933, SWO-40867 in the technical descriptions, with an area of about 390
square meters), asserting title thereto by right of inheritance from her
deceased parents, coupled with alleged continuous and exclusive
possession.  As related in the Court of
Appeals’ resolution of May 10, 1976 certifying applicant Lozada’s
appeal to us as involving only questions of law, said appellant originally suceeded on ex-parte
evidence in securing registration of the property, as follows:

“Under date of November
16, 1966, the court a quo issued a notice of initial hearing
of the petition (Ibid., p. 19).  The
petition was opposed by the Provincial Government of Rizal
and the Municipal Government of Las Piñas, Rizal (Ibid., p. 27).  The Director of Lands did not deem it
necessary at the time to file an opposition to Teodocia
Lozada’s petition (Ibid., p. 30) and returned
the records of the case to the court a quo through the Solicitor General
(Ibid., p. 29).  However, the
Director of Lands reserved the right to file his opposition thereto should it
be found upon investigation that applicant Lozada is
not entitled to the lots in question (Ibid., p. 30).

“On April 25, 1967,
an order of general default was issued by the court a quo, excepting therefrom the Provincial Government of Rizal
and the Municipal Government of Las Piñas, Rizal (Amended Record on Appeal, pp. 9-10).  On the same date, the court a quo
referred the case to the Municipal Court of Las Piñas,
Rizal because the value of the contested lots does
not exceed P10,000.00, as shown in the tax declaration
(Ibid., p. 10).  On June 26, 1967, upon the ex-parte evidence presented by applicant Teodocia Lozada, the Municipal
Court of Las Piñas, Rizal,
found applicant Lozada to have a registerable
title to the two parcels of land.  The
said court confirmed her title thereto (Amended Record on Appeal, pp.
11-14).  A month later, the municipal
court ordered the issuance of the corresponding decree of registration (Ibid.,
pp. 14-15).  On September 7, 1967, Original Certificate of Title
No. 6314 (Exhibit 7, Folder of Exhibits, p. 100) in the name of Teodocia Lozada was issued by the
Register of Deeds of Rizal.”

The Solicitor General, however, well within one year from entry
of the decree filed a petition for review of the decision and decree of
registration on the ground that applicant Lozada had
procured the same by actual fraud (1) because she deliberately concealed the
fact that the lots in question were covered by Revo­cable Permit Application
No. 15849 and Miscellaneous Sales Appli­cation No. V-76845, both in the name of
her husband, Felix Cristobal, and that these
applications were rejected by the Bureau of Lands since these lots were
reserved for school site purposes pursuant to Resolution No. 114, Series of
1963, of the Municipal Council of Las Piñas, Rizal; and (2) these lots are portions of the public domain
and as such belong to the State and are not subject to private appropriation
and, therefore, not registerable under the Torrens
System.

The court of first instance gave due course to the Republic’s
petition notwithstanding appellant Lozada’s
opposition contending inter alia that the
petition raises the issue of ownership which should be brought up in a separate
civil action and that the lands were private property.  After reopening the case and holding several
hearings at which both the applicant and the Republic presented their
documentary and testimonial evidence, it found that “actual fraud was
employed by the applicant in procuring title over the property subject of this
application which are portions of the public
domain.”

It found inter alia in its
decision upon the petition for review that before appellant Lozada’s
petition for registration, her husband, Felix Cristobal,
had filed with the Bureau of Lands a revocable permit application and a sales
application which had been rejected on April 12, 1965 precisely because the
lands had been reserved for school purposes and that the husband “by not
so filing the application for registration of the property in question and by
allowing his wife, applicant Teodocia Lozada, to file the application, the Bureau of Lands, repre­senting
the Republic of the Philippines, was misled.” The Court found that
applicant Lozada and her husband had deliberately
deceived the State, as follows:

“The Court draws this conclusion from the very patent
improbability that a fair and unprejudiced mind will accept.  It is most improbable that the Bureau of
Lands will not oppose the registration of a piece of land, but will oppose any
application to purchase the same.  These
are two conflicting actions.  Moreover,
in the first instance, the land registration will result in the acquisition of
the property without the Republic of the Philippines
being paid for it.  In the second
instance, the approval of the sales application will result in the acquisition
of the property with the Republic of the Philippines
being paid for it.  Why should the Bureau
of Lands not file its opposition in the first instance and, on the other hand,
reject the application for purchase in the second instance?  The truth of the matter, in the opinion of
the Court, is that had the application for registration been only filed by
FELIX CRISTOBAL, the husband, the Bureau of Lands,
representing the Republic of the Philippines,
would have acted uniformly, that is, (1) oppose the registration and (2) reject
the sales application.  Here again is
clearly seen how the Republic of the Philippines, represented by the Bureau of
Lands, through the act of applicant Teodocia Lozada of filing separately the application for
registration and through the act of FELIX CRISTOBAL
of applying for approval of a sales application for the same property, was
effectively deprived of its day in court. 
It bears repeating that had the instant application for registration
only been made by FELIX CRISTOBAL, the husband, who
had already a record in the Bureau of Lands, as a person who had taken the initial
step for the purchase of a certain public land, then the Bureau of Lands would
have filed its op­position or would have taken steps appropriate to stop the
registration thereof.”

The lower court accordingly rendered judgment on March 30, 1973 in favor of the
Republic, as follows:

“(1)  Setting aside the
decision of the Municipal Court of Las Piñas, Rizal of June 26,
1967, subject of the instant review proceedings, and the
corresponding decree issued pursuant thereto;

“(2)  Declaring the property in question to be part
of the public domain belonging to the Republic of the Philippines;

“(3)  Dismissing the registration application of Teodocia Lozada of October 16, 1962;

“(4)  Ordering applicant Teodocia
Lozada to surrender Original Certificate of Title No.
6314 of the Province of Rizal to the Register of
Deeds of said Province and that the same may be cancelled;

“(5)  Ordering the Register of Deeds of the Province
of Rizal
to cancel the aforementioned Original Certificate of Title No. 6314; and

“(6)  Ordering Felix Cristobal
and Teodocia Lozada to
vacate immediately the property in question so that the same may be used for
the purpose it was reserved, that is, as a school site.”

Applicant Lozada appealed to the Court
of Appeals which, however, certified the appeal to us as involving only
questions of law which it set forth in its resolution, as follows:

“Applicant appealed to this Court and contends that the court a
quo erred in:

1.      
Holding that there was actual and extrinsic
fraud in obtaining applicant’s original certificate of title over the lots
applied for; and

2.      
Holding that the lots applied for by applicant
form part of the public domain.

“It is not denied that the lots in question were the
subject of a revocable permit application and a miscellaneous sales application
filed with the Bu­reau of Lands by Felix Cristobal (t.s.n., September 7, 1971, pp. 11, 12; June 22, 1972, pp.
4, 9), husband of applicant-appellant Teodocia Lozada, before she filed a petition for registration and
that Cristobal’s applications were denied by the
Bureau of Lands (t.s.n., September 7, 1971, p. 12;
June 22, 1972, p. 4).  And yet
applicant-appellant made it appear under her oath that she had inherited
the lots in question from her parents. 
There is also no question that the application for registration was
filed in the name of Teodocia Lozada
and not in the name of Felix Cristobal (Amended
Record on Appeal, p. 1).

“We note that these material facts were not disclosed
in the application for registration filed by Teodocia
Lozada.  Is
this conduct within the kind of fraud contemplated in Section 38 of Act 496, as
amended, to warrant the review of the decision of the Munici­pal Court of Las Piñas and the nullification of the de­cree of registration?

“It is not also denied that the lots in question are portions
of the bed or foreshore of the Las Piñas river
(t.s.n., September 7, 1971, pp. 3, 4, 10, 15; June
22, 1972, p. 11).  This, too, was not
disclosed in the application for registration. 
Do they then form part of the public domain or not?”^[1]

On the basis of the material facts above stated in the Court of
Appeals’ resolution which have not been disputed by appellant, the Court
affirms the appealed judgment.

Appellant Lozada (and her husband Felix
Cristobal) were clearly guilty of fraud (1) in not
disclosing in her application for registration the vital facts that her
husband’s previous application for a revocable permit and to purchase the lands
in question from the Bureau of Lands had been rejected, because the lands were
already reserved as a site for school purposes; (2) in thus concealing the fact
that the lands were part of the public domain and so known to them; (3) in
stating the deliberate falsehood that the lands were allegedly inherited by her
from her parents; and (4) in filing the application for registration in the
name of appellant Lozada and not in that of her
husband Felix Cristobal or the two of them jointly,
thus suppressing the fact that Felix Cristobal
already had a record in the Bureau of Lands of having filed a rejected
application for the same lands, all of which misled the Bureau of Lands into
not filing an opposition to her application, and as aptly observed by the lower
court “effectively deprived (the Republic) of its day in court.”

Such fraud may well be deemed as “extrinsic or collateral
fraud, as distinguished from intrinsic fraud [which] connotes any fraudulent
scheme executed by a prevailing litigant ‘outside the trial of a case
against the defeated party, or his agents, attorneys or witnesses, whereby said
defeated party is prevented from presenting fully and fairly his side of the
case.'”^[2]

But even assuming that such fraud could be technically considered
as “intrinsic fraud [which] takes the form of ‘acts of a party in a
litigation during the trial, such as the use of forged instruments or
perjured testimony, which did not affect the presentation of the case, but did
prevent a fair and just determination of the case,'”^[3]
it would not alter the result, because the mistake and error into which the
officials of the Bureau of Lands were misled by such a deliberately false application,
suppressing the facts known to the applicant that the lands sought to be registered
were lands of the public domain (and not private property) and having been
reserved for a school site were not susceptible of private registration (as in
fact her husband’s application to purchase the same had been rejected) cannot
operate to bar the Republic’s timely petition to review and set aside the
decree, since the State cannot be estopped by the
mistake or error of its officials and agents.^[4]

Besides, the registration decree was properly voided by the lower
court since it had no jurisdiction over the lands of the public domain subject
matter of the proceedings which were portions of the bed or foreshore of the
Las Piñas river and were not
open to registration proceedings.

Finally, as this Court unanimously stressed in Piñero vs. Director of Lands^[5]
“It is to the public interest that one who succeeds in fraudulently
acquiring title to a public land should not be allowed to benefit therefrom, and the State should, therefore, have an ever
existing authority, thru its duly authorized officers, to inquire into the circumstances
surrounding the issuance of any such title, to the end that the Republic, thru
the Solicitor General or any other officer who may be authorized by law, may
file the corresponding action for the reversion of the land involved to the
public domain, subject thereafter to disposal to other qualified persons in
accordance with law.  In other words, the
indefeasibility of a title over land previously public is not a bar to an
investigation by the Director of Lands as to how such title has been acquired,
if the purpose of such investigation is to determine whether or not fraud had
been committed in securing such title in order that the appropriate action for
reversion may be filed by the Government.”

ACCORDINGLY, the appealed decision is affirmed in toto.

Makasiar, Fernandez, Guerrero, De
Castro, and Melencio-Herrera,
JJ.,
concur.

^[1]
Emphasis supplied.  The Court of Appeals’
Special Ninth Division that certified the case was composed of Pascual, J. ponente,
Bautista and Santiago, Jr., JJ.

^[2]
Republic of the Phil. vs. Court of Appeals and Lastimado,
L-39473, Apr. 30, 1979, per Melencio-Herrera, J.,
citing Libudan vs. Gil, 45 SCRA
17 (1972), note in brackets supplied.

^[3] Ibid,
note in brackets supplied.  The reason
for the rule is to put an end to litigations so that the losing party may not
attack the adverse judgment at any time by attributing imaginary falsehood to
his adversary’s proofs and it being the business of a party to meet and repel
his opponent’s perjured evidence in the trial of the case itself (De Almeda vs. Cruz, 84 Phil. 636, 641, cited in Libudan vs. Gil, supra.).

^[4] Ibid,
citing Republic of the Phil. vs. Marcos, 52 SCRA
238 (1973).

^[5] 57 SCRA 386, 392 (1974).