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September 29, 2016

RP vs. Heirs of Felipe Alejaga Sr.

Facts:
  • December 28, 1978: Respondent Felibe Alejaga Sr. filed with the District Land Office of Roxas City a Free Patent Application of a parcel of land. (.3899 hectares, Roxas City)
  • Efren Recio,  Land Inspector, submitted the necessary report regarding the application. (Investigation & Verification Report)
  • March 14, 1979: The District Land Officer (DLO) approved the application and the issuance of a Free Patent to the applicant. It was then forwarded to Register of Deeds for the registration and issuance of a OCT. 
  • Thereafter, Original Certificate of Title and a Free Patent No. (VI-2) 3358 was issued to Alejaga.
  • April 4, 1979: The heirs of Ignacio Arrobang requested the Director of Lands of Manial for the investigation of DLO (conducted by Isagani Cartagena) in Roxas for the irregularities in the issuance of a title of a foreshore land in favor of Alejaga. 
  • After investigation, the Land Management Bureau of Manila requested the Director of Lands to cancel the Free Patent and the corresponding OCT.
  • In the meantime, Alejaga obtained a NACIDA loan. The loan was secured by a real estate mortgage to PNB.
  • April 18, 1990: The government through the Solicitor General instituted an action for Annulment/Cancellation of Patent and Title and Reversion against respondent Alejaga, the PNB of Roxas City and defendant Register of Deeds of Roxas City covering Free Patent Application of the land. While the case was pending, Alejaga was substituted by his heirs.
  • RTC ruled against responding saying that the OCT and Patent were obtained through fraud and misrepresentation. Hence, null and void. CA reversed RTC’s ruling.

Issues:
1. WON there was fraud in the issuance of the OCT and Free Patent. YES 
(Topic: PATENT)
2. WON the State has an imprescriptible right to cause the reversion of a piece of property belonging to the public domain. YES
(Topic: NON-REGISTRABLE PROPERTY AND DEALINGS WITH UNREGISTERED LANDS)

Held:

ISSUE No. 1 PATENT:

Fraud attended the application of Free Patent
Republic (petitioner) has adduced a preponderance of evidence before the trial court, showing manifest fraud in procuring the patent. This Court agrees with the RTC that in obtaining a free patent over the lot under scrutiny, petitioner had resorted to misrepresentation or fraud, signs of which were ignored by the Court of Appeals.

First reason: Issuance of the free patent was not made in accordance with the law 
First, the issuance of the free patent was not made in accordance with the procedure laid down by CA or the Public Land Act. Under Section 91 thereof, an investigation should be conducted for the purpose of ascertaining whether the material facts set out in the application are true.

Further, after the filing of the application, the law requires sufficient notice to the municipality and the barrio where the land is located, in order to give adverse claimants the opportunity to present their claims. Note that this notice and the verification and investigation of the parcel of land are to be conducted after an application for free patent has been filed with the Bureau of Lands.

There was no proper investigation and verification of the application
In this case, however, Felipe Alejaga Sr.’s Application for Free Patent was dated and filed on December 28, 1978. On the other hand, the Investigation & Verification Report prepared by Land Inspector Elfren L. Recio of the District Land Office of the Bureau of Lands of Roxas City was dated December 27, 1978. 

As correctly pointed out by the trial court, investigation and verification should have been done only after the filing of the application. Hence, it would have been highly anomalous for Recio (Land Inspector) to conduct his own investigation and verification on December 27, 1998, a day before Felipe Alejaga Sr. filed the Application for Free Patent.

Second reason: The claim of the Alejagas that an actual investigation was conducted is not sustained by the Verification & Investigation Report itself, which bears no signature.
Their reliance on the presumption of regularity in the performance of official duty31 is thus misplaced. Since Recio’s signature does not appear on the December 27, 1978 Report, there can be no presumption that an investigation and verification of the parcel of land was actually conducted. Strangely, respondents do not proffer any explanation why the Verification & Investigation Report was not signed by Recio. Even more important and as will later on be explained, this alleged presumption of regularity -- assuming it ever existed -- is overcome by the evidence presented by petitioner.

Third reason: The the report of Special Investigator Isagani P. Cartagena has not been successfully rebutted. 
In that report, Recio supposedly admitted that he had not actually conducted an investigation and ocular inspection of the parcel of land. Cartagena’s statement on Recio’s alleged admission may be considered as "independently relevant." A witness may testify as to the state of mind of another person -- the latter’s knowledge, belief, or good or bad faith -- and the former’s statements may then be regarded as independently relevant without violating the hearsay rule.

Doctrine of independently relevant statements
The doctrine on independently relevant statements holds that conversations communicated to a witness by a third person may be admitted as proof that, regardless of their truth or falsity, they were actually made. Evidence as to the making of such statements is not secondary but primary, for in itself it (a) constitutes a fact in issue or (b) is circumstantially relevant to the existence of such fact.

Since Cartagena’s testimony was based on the report of the investigation he had conducted, his testimony was not hearsay and was, hence, properly admitted by the trial court.

The Free Patent was void (The issuance of the Alejagas’ patent and title was tainted with fraud)
There are several badges of frauds (check the list above). Thus, the free patent granted to Felipe Alejaga Sr. is void. Such fraud is a ground for impugning the validity of the Certificate of Title. The invalidity of the patent is sufficient basis for nullifying the Certificate of Title issued in consequence thereof, since the latter is merely evidence of the former. 

Issue No. 2: NON-REGISTRABLE PROPERTY AND DEALINGS WITH UNREGISTERED LANDS

Titles obtained by fraud and misrepresentation are not indefeasible; Patent does not vest title it merely confirmed registrant’s existing one
True, once a patent is registered and the corresponding certificate of title issued, the land covered by them ceases to be part of the public domain and becomes private property. Further, the Torrens Title issued pursuant to the patent becomes indefeasible a year after the issuance of the latter.

However, this indefeasibility of a title does not attach to titles secured by fraud and misrepresentation. Well-settled is the doctrine that the registration of a patent under the Torrens System does not by itself vest title; it merely confirms the registrant’s already existing one. Verily, registration under the Torrens System is not a mode of acquiring ownership.

The State may still bring an action for reversion even after the lapse of one year
Therefore, under Section 101 of Commonwealth Act No. 141, the State -- even after the lapse of one year -- may still bring an action for the reversion to the public domain of land that has been fraudulently granted to private individuals. Further, this indefeasibility cannot be a bar to an investigation by the State as to how the title has been acquired, if the purpose of the investigation is to determine whether fraud has in fact been committed in securing the title.

Prohibition Against Alienation or Encumbrance
Assuming arguendo that the Alejagas’ title was validly issued, there is another basis for the cancellation of the grant and the reversion of the land to the public domain. Section 118 of Commonwealth Act No. 14156 proscribes the encumbrance of a parcel of land acquired under a free patent or homestead within five years from its grant. The prohibition against any alienation or encumbrance of the land grant is a proviso attached to the approval of every application.

The mortgage of the land (granted under free patent) violated Section118 of Public Land Act
In the case at bar, Free Patent No. 335860 was approved and issued on March 14, 1979. Corresponding Original Certificate of Title No. P-1561 was issued on the same date. On August 18, 1981, or two (2) years after the grant of the free patent, Felipe Alejaga Sr. obtained from Respondent PNB a loan in the amount of P100,000. Despite the statement on the title certificate itself that the land granted under the free patent shall be inalienable for five (5) years from the grant, a real estate mortgage was nonetheless constituted on the parcel of land covered by OCT No. P-15.

Thus, the mortgage executed by Respondent Felipe Alejaga Sr. falls squarely within the term encumbrance proscribed by Section 118 of the Public Land Act. A mortgage constitutes a legal limitation on the estate, and the foreclosure of the mortgage would necessarily result in the auction of the property.

Reason for prohibition against encumbrance
"It is well-known that the homestead laws were designed to distribute disposable agricultural lots of the State to land-destitute citizens for their home and cultivation. Pursuant to such benevolent intention the State prohibits the sale or encumbrance of the homestead (Section 116) within five years after the grant of the patent."

Mortgage over a parcel of land acquired through a free patent grant nullifies the award and constitutes a cause for the reversion of the property to the state
"SEC. 124. Any acquisition, conveyance, alienation, transfer, or other contract made or executed in violation of any of the provisions of sections one hundred and eighteen, one hundred and twenty, one hundred and twenty-one, one hundred and twenty-two, and one hundred and twenty-three of this Act shall be unlawful and null and void from its execution and shall produce the effect of annulling and canceling the grant, title, patent, or permit originally issued, recognized or confirmed, actually or presumptively, and cause the reversion of the property and its improvements to the State."

The foregoing legal provisions clearly proscribe the encumbrance of a parcel of land acquired under a free patent or homestead within five years from the grant of such patent. Furthermore, such encumbrance results in the cancellation of the grant and the reversion of the land to the public domain.

Since Alejaga violated the condition of the free patent, the property must revert back to the public domain
To comply with the condition for the grant of the free patent, within five years from its issuance, Felipe Alejaga Sr. should not have encumbered the parcel land granted to him. The mortgage he made over the land violated that condition. Hence, the property must necessarily revert to the public domain, pursuant to Section 124 of the Public Land Act.

Citation:
  • G.R. No. 146030           
  • December 3, 2002 
  • REPUBLIC OF THE PHILIPPINES, represented by the Department of Environment and Natural Resources, petitioner, vs.HEIRS OF FELIPE ALEJAGA SR., represented by ROQUETA ALEJAGA, FELIPE ALEJAGA JR., MARIA DULLA ALEJAGA, FELIPE ALEJAGA III, ROQUETA ALEJAGA, JENNIFER ALEJAGA, EVERETTE CAPUNDAN, AND LYNETTE ALEJAGA; THE PHILIPPINE NATIONAL BANK and THE REGISTER OF DEEDS OF ROXAS CITY, respondents.


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