IN THE MATTER OF REVERSION/RECALL OF RECONSTITUTED OCT NO. 0-116 DECREE NO. 3999 OF LOT 4239; DECREE NO. 59327; OCT NO. 388; IN THE TARLAC REGISTRY OF DEEDS – HEIRS OF THE LATE …

Heirs of the Late Owners versus Municipality of Paniqui

The Case

This is a petition for review on certiorari brought by the Heirs of the alleged former owners of a parcel of land in Paniqui, Tarlac, against the Municipality of Paniqui. The petitioners sought the annulment of a judgment of the Regional Trial Court of Tarlac, Branch 67, dated 29 October 1993, which ordered the reconstitution of the Original Certificates of Title in the name of the Municipality. The case matters because it teaches the strict grounds for annulment of judgment, the distinction between property for public use and patrimonial property, and the elements of laches and real party-in-interest.

Procedural History

The petitioners filed a Petition for Annulment of Judgment with the Court of Appeals, directed against the 29 October 1993 Decision of the Regional Trial Court of Tarlac, Branch 67, in Land Case No. 274-P'93, which ordered the reconstitution of the Original Certificates of Title in the name of the Municipality of Paniqui.

On 29 April 2005, the Court of Appeals issued a Resolution dismissing the petition on several grounds: the petition was not verified; the attached copy of the assailed decision was a mere photocopy and not a certified true copy; the special powers of attorney were not attached; and the petitioners failed to indicate the material dates to prove that the petition was filed within four years from discovery of the alleged extrinsic fraud.

The petitioners filed a Motion for Reconsideration, attaching the missing documents. The Court of Appeals denied the motion on 5 August 2005, holding that even if the technicalities were brushed aside, the petition would still be dismissed for lack of substantial merit: the petitioners failed to show they are the real parties-in-interest; they failed to allege fraud in connection with the proceedings in Land Case No. 274-P'93; and their claim was barred by laches.

The petitioners then filed the present Petition for Review on Certiorari under Rule 45 of the Rules of Court.

Facts

Sometime in 1910, officials of the Municipal Government of Paniqui, headed by Maximo Parazo, built a school, a public market, and a cemetery on an untitled parcel of land. Original Certificates of Title No. R0-532 (O-116) and No. 388 were issued on 17 February 1911 and 7 June 1915, respectively, in the name of the Municipal Government of Paniqui, by virtue of judicial confirmation of its title.

On 29 October 1993, pursuant to a Verified Petition for Reconstitution filed by the Municipality of Paniqui, the Regional Trial Court issued a Decision resolving that the Original Certificates of Title were lost, and ordering their cancellation and reconstitution as Transfer Certificates of Title in the name of the Municipality of Paniqui.

On 3 February 2005, the Municipality demolished its old public market to build a new one. Around this time, a former Board Member of the municipality inadvertently showed a close friend of the petitioners the cancelled Original Certificates of Title, which allegedly named the petitioners' ascendants as the former owners. On 28 March 2005, the petitioners filed the Petition for Annulment of Judgment with the Court of Appeals, claiming their ascendants were the original occupants of the land since 1843 and were not given a chance to appear at the cadastral proceedings.

Issues

• Whether or not the Court of Appeals correctly dismissed the Petition for Annulment of Judgment for failure to comply with the requirements of Rule 47 of the Rules of Court.
• Whether or not the petitioners proved extrinsic fraud or lack of jurisdiction as grounds for annulment of judgment.
• Whether or not the subject property is patrimonial property that the Municipality may register in its name.
• Whether or not the petitioners' claim is barred by laches.
• Whether or not the petitioners are the real parties-in-interest.

Applicable Provisions

Section 2, Rule 47 of the 1997 Rules of Civil Procedure provides:

The annulment of a judgment may be based only on the grounds of extrinsic fraud and lack of jurisdiction.

This provision limits the grounds for annulment of judgment to extrinsic fraud and lack of jurisdiction, which the petitioners failed to prove.

Article 423 of the Civil Code provides:

The property of provinces, cities and municipalities, is divided into property for public use and patrimonial property.

This provision classifies local government property into property for public use and patrimonial property, which determines whether the Municipality may register the property in its name.

Article 424 of the Civil Code provides:

Property for public use, in the provinces, cities, and municipalities, consists of the provincial roads, city streets, municipal streets, the squares, fountains, public waters, promenades, and public works for public service paid for by said provinces, cities, or municipalities. All other property possessed by any of them is patrimonial and shall be governed by this Code, without prejudice to the provisions of special laws.

This provision defines property for public use and provides that all other property is patrimonial, which bears on whether the school, public market, and cemetery are patrimonial.

Section 2, Rule 3 of the Rules of Court provides:

Every action must be prosecuted and defended in the name of the real party-in-interest.

This provision requires that an action be brought by the real party-in-interest, which the petitioners failed to prove they are.

Ruling

On the first issue, the Court held that the Court of Appeals correctly dismissed the petition for failure to comply with the requirements of Rule 47, but proceeded to rule on the merits.

On the second issue, the Court held that the petitioners failed to prove either extrinsic fraud or lack of jurisdiction. The Court defined extrinsic fraud as when the unsuccessful party had been prevented from exhibiting fully his case by fraud or deception practiced on him by his opponent. The petitioners presented no proof to substantiate their allegation that their ascendants were not given a chance to appear at the cadastral proceedings. The Court also held that the petitioners' reliance on the 1906 case of Nicolas versus Jose was misplaced, because the property there was a public square, while the property here involves a school, public market, and cemetery.

On the third issue, the Court held that the subject property is patrimonial property. The Court reasoned that schools, public markets, and cemeteries are not for the free and indiscriminate use of everyone, as the determination of persons allowed to study, put up stalls, or bury their dead is regulated by the government. Thus, under the Civil Code classification, the property is patrimonial and the Municipality may have it registered in its name.

On the fourth issue, the Court held that the petitioners' claim is barred by laches. The Court defined laches as the failure or neglect for an unreasonable and unexplained length of time to do that which, by exercising due diligence, could or should have been done earlier. The petitioners' alleged ascendants should have instituted an action against the Municipal Government of Paniqui or against Maximo Parazo for the allegedly unlawful taking of the property way back in the 1920s. The petitioners, as purported successors-in-interest, merely stepped into the shoes of their predecessors-in-interest and are bound by their actions and inactions.

On the fifth issue, the Court held that the petitioners failed to prove they are the real parties-in-interest. Bearing the same surnames as the individuals indicated in the technical descriptions of the Original Certificates of Title is woefully inadequate to prove their relationship. A real party-in-interest is one who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit.

Doctrine

A petition for annulment of judgment may be based only on the grounds of extrinsic fraud and lack of jurisdiction, as provided in Section 2, Rule 47 of the Rules of Court. Extrinsic fraud is when the unsuccessful party had been prevented from exhibiting fully his case by fraud or deception practiced on him by his opponent.

Under Articles 423 and 424 of the Civil Code, property of local government units is classified into property for public use and patrimonial property. Property for public use consists of provincial roads, city streets, municipal streets, squares, fountains, public waters, promenades, and public works for public service. All other property is patrimonial. Schools, public markets, and cemeteries are not for the free and indiscriminate use of everyone, and are therefore patrimonial property that the municipality may register in its name.

Laches is the failure or neglect for an unreasonable and unexplained length of time to do that which, by exercising due diligence, could or should have been done earlier. Successors-in-interest merely step into the shoes of their predecessors-in-interest and are bound by their actions and inactions.

Under Section 2, Rule 3 of the Rules of Court, every action must be prosecuted and defended in the name of the real party-in-interest. A real party-in-interest is one who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. Bearing the same surname as the individuals in the technical descriptions is insufficient to prove relationship.

Disposition

The petition is denied, and the Resolutions of the Court of Appeals dismissing the Petition for Annulment of Judgment and denying the Motion for Reconsideration are affirmed.

Remember This

The single line worth memorizing is that annulment of judgment lies only on the grounds of extrinsic fraud and lack of jurisdiction, and that schools, public markets, and cemeteries are patrimonial property that a municipality may register in its name. Examiners like to use this case to test the grounds for annulment of judgment, the classification of local government property, and the elements of laches and real party-in-interest.