FRANCISCO LOPEZ, PETITIONER, VS. THE AUDITOR GENERAL, COMMISSIONER OF PUBLIC HIGHWAYS, THE SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS, RESPONDENTS.

The
petitioner Francisco Lopez is the registered owner of a parcel of land in
Lopez, Quezon. 
In 1937, the municipal government of Lopez used a
portion of his property in build­ing
a road which subsequently was converted
into what is now known as the Lopez-Calauag section of the Manila South
Road.

Nothing is known about any agreement between the peti­tioner and the Government, local or
national, except that the petitioner claims that he agreed to allow the
municipa­lity to take a portion of his property in exchange for a piece of town
property.  Even the records of the municipal council of Lopez failed to shed light on the supposed
agree­ment between the petitioner and the
municipal government.

On
May 2, 1959 the petitioner
presented to the Highway District Engineer a claim for compensation for the
portion of his property which, he averred, had been taken “without any deed of
conveyance or right of way;” but
his claim was denied on the ground that it had prescribed.  His request
for reconsideration was likewise denied by
the Commissioner of Public Highways in a decision dated February 14, 1963, in which the
Secretary of Public Works and Communications concurred.

The petitioner then
appealed to the Auditor General.  Again
his claim was denied.  In his letter of February 16, 1966, addressed to the petitioner, the Deputy
Auditor General said:

“The records * * * show that since
1937 you never presented your claim for the payment [of the land] with this
Office which, under the Constitution and the law (Commonwealth Act No. 327) has
exclusive jurisdiction to decide the same; neither have you filed said claim
with the Committee on Claims creat­ed by the late President Roxas
under Administrative Order No. 6 dated July 29, 1946.  It is obvious, therefore, that your claim for
the payment of the value of said land has already prescribed.  (Cf. Jaen vs.
Auditor General, G.R. No. L-7921, prom. Sept.
28, 1955 and Jaime Rosario vs. Auditor
General, G.R. No. L-11817, prom. April
30, 1958)”.

The
petitioner brought this case to this Court on the sole issue of
prescription.  He cites Alfonso vs. Pasay City^[1] in which a lot owner was allowed to bring an action
to reco­ver compensation for the value of his land, which the Govern­ment had taken
for road purposes, despite the lapse of thirty years (1924-1954).  On the other hand, the respondents base their
defense of prescription on Jaen vs. Agregado^[2] which held an
action for compensation for land taken in
building a road barred by prescription because it was brought after more
than ten years (i.e., thirty three years, from 1920 to 1953).  They
argue that the ruling in Alfonso cannot
be ap­plied to this case because, unlike Alfonso who made repeated demands for compensation within ten years, thereby interrupt­ing the running of the period of prescription, the petitioner here filed his claim only in 1959.

It is true that in Alfonso vs. Pasay City this Court made
the statement that “registered lands
are not subject to pres­cription and that on grounds of equity, the government
should pay for private property which it appropriates though for the benefit of
the public, regardless of the passing of time.” But the rationale in that
case is that where private property is taken by the Government for public use
without first acquiring title thereto either through expropriation or
negotiated sale, the owner’s action to recover the land or the value thereof
does not prescribe.  This is the point
that has been over­looked by both parties.

On
the other hand, where private property is acquired by the Government and all
that remains is the payment of the price, the owner’s action to collect the price must be brought within ten years
otherwise it would be barred by the statute of limitations.  This is the teaching of Jaen vs. Agregado.  Thus this Court said in that case:

“[T]here is no pretense that the
portion of the lot actually used has not yet been duly transferred to the
government by its original owner.  The
validity of this transfer is not disputed and what petitioner merely seeks is
the payment of its value which she claims has not been paid since 1920.  If this is the nature of the claim, it is
clear that the same has already prescribed.”

Indeed,
even in the earlier case of Herrera vs. Auditor General^[3] on which the Alfonso ruling is based,
there is an ex­plicit recognition of the principle that “had Herrera [the property owner] sold his lot to the
Government in 1934, and the sale duly registered, and that all that remained to
be done was to pay the price, then the theory of the Government about
prescription might yet find support.”

The inquiry in the case
at bar should therefore be whe­ther ownership of the portion of the
petitioner’s property was transferred to the Government in 1937 when it was
taken for road purposes.  If it was, then
the present action to col­lect its price is barred by the statute of
limitations, other­wise, it is not.

As stated in the
beginning of this opinion, there is no deed of conveyance to evidence a
transfer of ownership to the Government, whether local or national.  The petitioner, how­ever, categorically
states — and this must be taken as an ad­mission on his part — that he gave a
portion of his property to the municipality of Lopez in exchange for another piece of land owned
by the municipality.^[4] This means that the munici­pal government
became the owner of the land by the delivery of its possession in 1937.^[5] The fact that the agreement is not in
writing does not militate against its validity because con­tracts are binding on
the parties in whatever form they may have been entered into.^[6] Nor is it necessary for the validity of the
transfer that the exchange be registered since the rights of innocent third
parties or subsequent transferees are not involved.^[7]

The
petitioner’s action is to collect the price of the land and, as it was not
filed until after the lapse of more than
ten years, it is barred by the statute of limitations.^[8]

ACCORDINGLY, the decision of the Auditor General is
affirmed, without pronouncement as to costs.

Reyes, JBL, Makalintal, Bengzon,
Zaldivar, Sanchez, Angeles, and Fernando, JJ., concur.

Concepcion, C.J., and Dizon, J., did not take part.

^[1]
G.R.L-12754, Jan. 30, 1960.

^[2]
G.R.L-7921, Sept. 28, 1955.

^[3]
102 Phil. 875, 881 (1958).

^[4]
Brief for the Petitioner at 3-4.

^[5]
See Gallar v. Hussain,
G.R.L-20954, May 24, 1967; Sapto v. Fabiana,
G.R.L-11285, May 16, 1958.

^[6]
Phil. Civ. Code art. 1356; Sp. Civ.
Code art. 1278.

^[7]
E.g., Casica v. Villaseca, G.R.L-9590, April 30, 1957.

^[8]
Even if the Moratorium Law were taken into account, the result would be
the same, that is, the petitioner’s claim is time-barred.