HEIRS OF DOMINGO P. BALOY, REPRESENTED BY RICARDO BALOY, ET AL., PETITIONERS, VS. COURT OF APPEALS, DIRECTOR OF LANDS AND PHILIPPINE NAVY, RESPONDENTS.

Heirs of Domingo Baloy versus Court of Appeals

The Case

This is a petition for review on certiorari brought by the heirs of Domingo P. Baloy, represented by Ricardo Baloy, against the Court of Appeals, the Director of Lands, and the Philippine Navy. The heirs sought to register two parcels of land in Barrio Barretto, Olongapo City, formerly part of Subic, Zambales, claiming them as part of their ancestral estate covered by a possessory information title in the name of their predecessor, Domingo Baloy. The Director of Lands and the Philippine Navy opposed, insisting the lands formed part of the United States Naval Reservation and had become public land. The case matters because it settles how Act Number 627 operates, whether land becomes public by mere failure to file a claim, and how a possessory information title is respected against the State.

Procedural History

The heirs applied for registration of the two parcels before the Court of First Instance of Zambales. On October 4, 1971, the trial court rendered a decision adjudicating the lands in favor of the applicants. The applicants then moved to amend the decision so that their citizenship, legal capacities, and personal circumstances would appear, and so that the oppositions would be dismissed. On August 22, 1972, the trial court instead rendered an Amended Decision denying the application, completely reversing its earlier judgment. The heirs appealed to the Court of Appeals, which affirmed the denial. The heirs then came to the Supreme Court by petition for review on certiorari. A sister case involving a portion of the same ancestral estate, the same parties, and the same issues had already reached the Supreme Court and was decided in favor of the same heirs.

Facts

Domingo Baloy held the lands under a possessory information title granted by the Spanish Government, and he and his heirs had been in continuous possession since 1894. The Director of Lands and the Philippine Navy opposed registration, claiming the property had been part of the United States Naval Reservation under an Executive Order of President Theodore Roosevelt dated November 26, 1902, and that Domingo Baloy's failure to file his claim under Act Number 627 forever barred the heirs.

The trial court first ruled for the heirs, then reversed itself in an Amended Decision denying registration. On appeal, the Court of Appeals affirmed the denial. The records, however, showed that the Navy's occupation was for recreational purposes and was later abandoned, with the heirs returning to actual possession. A letter from the Bureau of Lands dated June 30, 1966 officially declared that the land was not part of the public domain and that the Bureau had no jurisdiction over it, and the Bureau approved the applicants' survey plan and technical descriptions.

Critically, the Director of Lands' own map, Exhibit 3, showed that the parcels sought to be registered, shaded light blue as Exhibit 3-E, lay outside the red-lined naval reservation marked Exhibit 3-A, though adjacent to it. The Court of Appeals never addressed this evidence.

Issues

• Whether or not the trial court, after rendering a decision adjudicating the lands to the applicants, could render a second decision reversing the first instead of merely supplementing it.
• Whether or not the first decision had already become final and could no longer be disturbed, making the second decision void.
• Whether or not the lots sought to be registered formed part of the United States Naval Reservation under the Executive Order of November 26, 1902.
• Whether or not the property became public land under Act Number 627 by reason of Domingo Baloy's failure to file his claim.
• Whether or not the heirs have a registrable title by virtue of their possessory information title and their possession.

Applicable Provisions

Section 3 of Act Number 627 provides:

SEC. 3. Immediately upon receipt of the notice from the Civil Governor in the preceeding section mentioned it shall be the duty of the judge of the Court of Land Registration to issue a notice, stating that the lands within the limits aforesaid have been reserved for military purposes, and announced and declared to be military reservations, and that claims for all private lands, buildings, and interests therein, within the limits aforesaid, must be presented for registration under the Land Registration Act within six calendar months from the date of issuing the notice, and that all lands, buildings, and interests therein within the limits aforesaid not so presented within the time therein limited will be conclusively adjudged to be public lands, and all claims on the part of private individuals for such lands, buildings, or an interest therein not so presented will be forever barred.

This provision is the heart of the case, because it shows that land does not become public by mere failure to claim, but only after a judicial declaration following notice and hearing.

Ruling

The Supreme Court found the petition meritorious and reversed the Court of Appeals. On the threshold procedural issue, the Court held that the trial court's first decision had become final for failure of the oppositors to move for reconsideration or to appeal, so the second decision reversing it could not stand.

On the central issue, the Court held that private land could be deemed to have become public land only by virtue of a judicial declaration after due notice and hearing. Act Number 627 is not self-executory and requires implementation by the Court of Land Registration. Because it creates a forfeiture, it is a penal statute in derogation of private rights and must be strictly construed. Without a judgment or order declaring the land public, its private character and the possessory information title over it must be respected. To assume otherwise would deprive the owners of property without due process of law.

The Court also held that the Navy's occupation was not in the concept of an owner but partook of the character of a commodatum, a loan for temporary use, so it did not divest the heirs of title. Finally, the Director of Lands' own map showed the lots lay outside the naval reservation, and the Bureau of Lands had officially declared the land not part of the public domain.

Doctrine

A Bar candidate must retain these rules. First, under Act Number 627, private land does not become public land by the mere failure to file a claim; a judicial declaration after due notice and hearing is required. Second, Act Number 627, insofar as it creates a forfeiture, is a penal statute in derogation of private rights and must be strictly construed to safeguard private rights. Third, a possessory information title is respected, and its private character persists absent a judgment declaring the land public. Fourth, transient occupation by another, such as the Navy's use under a commodatum, does not divest the owner of title.

Disposition

The Supreme Court reversed and set aside the Court of Appeals decision and rendered a new one granting the heirs' applications for land registration as prayed for.

Remember This

Memorize this line: land does not become public under Act Number 627 without a judicial declaration after due notice and hearing, and the statute must be strictly construed because it works a forfeiture. Examiners use this case to test the requirements of Act Number 627, the strict construction of penal statutes in derogation of private rights, and the respect owed to a possessory information title against the State.