HEIRS OF SANTOS SABURAO, HEIRS OF SIMEON SABURAO, HEIRS OF CANDIDO SABURAO, HEIRS OF ROSARIO SABURAO, REPRESENTED BY DANILO SABURAO DANGCAL AND ROBERTO SABURAO DANGCAL AND JOEL …

Heirs of Saburao versus Heirs of Patrocenia

The Case

This is a petition for review on certiorari under Rule 45 brought by the Heirs of Santos, Simeon, Candido, and Rosario, all surnamed Saburao, against the Heirs of Patrocenia Saburao Villarte. The action below was one for reconveyance and partition of two parcels of land in Misamis Oriental, Lot No. 7170 and Lot No. 7140. The Heirs of Saburao claim that Lot No. 7170 was registered in the name of their aunt Patrocenia alone, although it belonged to the estate of their common predecessor, Andres Saburao. The case matters because the Court settles three questions every Bar candidate must know: who may sue to cancel a free patent, which body has jurisdiction to cancel it, and when an action for reconveyance is barred by prescription and laches.

Procedural History

The Heirs of Saburao filed a Complaint for Reconveyance and Partition before the Municipal Trial Court in Cities of El Salvador, Opol, Misamis Oriental. In a judgment dated April 4, 2019, the MTCC upheld Patrocenia's ownership of Lot No. 7170, declared her free patent and certificate of title valid, ruled that the right to reconveyance had prescribed, and declared the parties co-owners of Lot No. 7140 in equal one-fifth shares. The Heirs of Saburao moved for reconsideration, which was denied, and they appealed to Branch 39 of the Regional Trial Court of Cagayan de Oro City. In a Judgment on Appeal dated June 5, 2020, the RTC denied the appeal and affirmed the MTCC in toto, adding that any action grounded on fraud or mistake in the grant of the free patent should be initiated by the Office of the Solicitor General. The Heirs of Saburao then filed a Petition for Review under Rule 42 before the Court of Appeals. In a Decision dated February 14, 2023, the Court of Appeals dismissed the petition and affirmed the RTC, holding that all the elements of laches were present and that the cancellation of the patent partook of a reversion case that only the Solicitor General could bring. The Court of Appeals denied reconsideration in a Resolution dated August 25, 2023. Hence, the present Petition for Review on Certiorari under Rule 45 before the Supreme Court.

Facts

On November 16, 1943, a decree of registration, Decree No. M-66123, was issued in the name of Andres Saburao covering Lot Nos. 7170 and 7140. Andres was the father of Santos, Simeon, Candido, Rosario, and Patrocenia. No certificates of title were issued under the decree, and Andres died in 1947. His children then decided to process the registration of the lots, and they chose Patrocenia, assisted by her well-educated daughter-in-law, to handle the matter.

On January 30, 1956, Original Certificate of Title No. P-685 was issued covering Lot No. 7170, but in the name of Patrocenia alone, instead of the Heirs of Andres Saburao. Trusting their sister, the siblings did nothing to correct the registration, especially since Candido was then occupying Lot No. 7170, and his son Joel continues to occupy it. Patrocenia, for her part, claimed that she was the sole owner because her siblings had sold their rights to her, and she presented affidavits and handwritten declarations of sale executed in 1955. She also secured Free Patent No. 25774 over the lot in 1956, and the property had been declared for taxation in her name as early as 1948.

After the death of all of Andres' children, the Heirs of Saburao asked the Heirs of Patrocenia to correct the registration. The older generation was willing to execute an affidavit of reconveyance, but the younger generation wanted to keep the property. Barangay conciliation failed, and it was then that the Heirs of Saburao discovered that Patrocenia's title rested on a free patent. Two years after the Complaint was filed, the Department of Environment and Natural Resources, upon the initiative of the Heirs of Saburao, issued an order cancelling Patrocenia's free patent on the ground that a decree of registration had been issued in 1943.

Issues

• Whether or not Patrocenia's title over Lot No. 7170 is null and void.
• Whether or not the right of the Heirs of Saburao to ask for reconveyance is barred by prescription and laches.

Applicable Provisions

Section 53, paragraph 3 of Presidential Decree No. 1529 provides:

In all cases of registration procured by fraud, the owner may pursue all his legal and equitable remedies against the parties to such fraud without prejudice, however, to the rights of any innocent holder for value of a certificate of title.

This is the statutory basis of the action for reconveyance, and it fixes the point from which the period to sue begins to run.

Article 1456 of the Civil Code provides:

If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes.

This creates the implied trust that obliges the registered owner to reconvey the property to its true owner.

Article 1144, paragraph 2 of the Civil Code provides that an action upon an obligation created by law must be brought within ten years from the time the right of action accrues. This supplies the prescriptive period for reconveyance.

Ruling

On the first issue, the Court denies the petition. Preliminarily, the Court notes that the petition raises questions that are foundationally factual, and factual questions are beyond its jurisdiction in a petition under Rule 45, none of the recognized exceptions being present. On the merits, the Court disagrees with the Court of Appeals that only the Solicitor General may sue to cancel a free patent. Quoting its ruling in Spouses Padilla versus Salovino, the Court distinguishes a reversion proceeding, where the complaint admits State ownership of the land, from an ordinary civil action for declaration of nullity of a free patent and certificate of title, which requires allegations of the plaintiff's ownership of the contested lot prior to the issuance of the patent and of the defendant's fraud or mistake. In that second kind of action, the nullity arises from the fact that the land is beyond the jurisdiction of the Bureau of Lands, and the real party in interest is the plaintiff, not the State. Since the Heirs of Saburao claim a pre-existing right of ownership, the Solicitor General need not intervene. The Court likewise holds that jurisdiction to cancel a free patent and the certificate of title issued under it is lodged with the regular courts, not with the Department of Environment and Natural Resources, and it shares the trial court's skepticism over the Department's order cancelling the patent sixty years after its issuance and two years after the Complaint was filed. Nevertheless, the Court holds that the Heirs of Saburao failed to discharge their burden of proving by preponderance of evidence that the free patent was improperly issued. Their own certification showed that the decree of registration was issued in 1958, not 1943, and the Heirs of Patrocenia presented tax declarations and documents of sale showing Patrocenia's sole ownership.

On the second issue, the Court holds that the action for reconveyance has prescribed. Reading Section 53, paragraph 3 of Presidential Decree No. 1529 together with Article 1456 of the Civil Code, the Court explains that the ten-year period under Article 1144, paragraph 2 runs from the issuance of the certificate of title, because registration is the act by which the trustee repudiates the implied trust. The exception, where the plaintiff is in actual, continuous, and peaceful possession so that the action partakes of quieting of title and is imprescriptible, does not apply here, because there is no showing that the possession of Candido and Joel was continuous and began before the issuance of the certificate of title. Patrocenia and her heirs occupied the lot from 1960 to the 1980s, declared it for taxation since 1948, and paid the taxes, while Candido and Joel occupied it only by tolerance. The Court also finds all the elements of laches present: the registration in Patrocenia's name gave rise to the situation complained of; the Heirs of Saburao knew of it and delayed for six decades; the Heirs of Patrocenia had no notice that their title would be disputed; and they would be prejudiced if the action prospered. An ordinary, reasonable person would not sit idly by for sixty years while property he believes belongs to him is registered in another's name.

Doctrine

First, an action for cancellation of a free patent and the certificate of title issued under it may be filed by a private person, not only by the Office of the Solicitor General, provided the plaintiff alleges and proves ownership of the contested lot prior to the issuance of the free patent. Second, jurisdiction over such an action is lodged with the regular courts; the Department of Environment and Natural Resources has no authority to cancel a free patent, especially after a certificate of title has been issued. Third, the burden of proving that a free patent was improperly issued rests on the plaintiff, who must establish it by preponderance of evidence. Fourth, an action for reconveyance based on implied trust under Article 1456 of the Civil Code prescribes in ten years from the issuance of the certificate of title, unless the plaintiff is in actual, continuous, and peaceful possession, in which case the action is imprescriptible. Fifth, laches is grounded on public policy and turns not on the mere passage of time but on the inequity of enforcing a stale claim.

Disposition

The Court denied the petition and affirmed the rulings below, so the Heirs of Patrocenia prevailed and Patrocenia's free patent and certificate of title over Lot No. 7170 were sustained.

Remember This

Memorize this line: a private person may sue to cancel a free patent if he proves ownership of the land before the patent was issued, and the regular courts, not the Department of Environment and Natural Resources, have jurisdiction to cancel it. Examiners use this case to test the distinction between reversion and an action for nullity of a free patent, and to test the ten-year prescriptive period for reconveyance and its exception for possessors in actual, continuous, and peaceful possession.