Aquaculture firm seeks reversal of SC ruling on Cebu property

An aquaculture firm has appealed the decision of the Supreme Court junking its ownership claim on a disputed 1.7 hectares of prime land in Lapu-Lapu City, Cebu, which it bought in 1988 as a fourth transferee of the property since 1970 from a homestead patent issued in 1936.

Aqualab Philippines, Inc. said the High Court’s Second Division might have committed an error in affirming a 2007 Court of Appeals (CA) decision that reversed the ruling of the Lapu-Lapu City Regional Trial Court (RTC) upholding its titles over the property, which the company is using for its aquaculture businesses, such as fisheries hatchery.

The Lapu-Lapu City RTC dismissed in a decision on Sept. 30, 2007 the ownership claim of the heirs of Marcelino Pagobo, successor of Juan Pagobo, over the property on grounds of lack of cause of action and prescription. This ruling, however, was reversed by the CA and also by the second division of the SC in a resolution issued on Sept. 29 last year.

“Inasmuch as the petitioner is evidently a purchaser in good faith, the Regional Trial Court’s dismissal of . . . respondents’ complaint on ground of prescription should have been affirmed by the Court of Appeals (CA) and this Honorable Court,” Aqualab said in an 18-page supplement to its motion for reconsideration.

Although the Pagobo heirs merely wanted the CA to remand the case to the RTC for further proceedings and include the reception of evidence to prove their claim, the appellate court decided the case on its merits and ordered the cancellation of Aqualab’s title over the property.

Aqualab admitted that it is the fourth transferee of the 1.7 hectares of land in Lapu-Lapu City. It acquired the titled property in 1988 from Anthony Gaw Kache who purchased the land from Rene Espina. Espina, in turn, bought the land from Tarcela de Espina who acquired her title in 1970.

Citing previous SC rulings, the firm noted that as early as 1977 the high court had validated certain conveyances of portions of the property from where its land used to be a part of “and which decisions have not been questioned by the government since 1977 and until the present, such that no reasonable conclusion can be had that the government has already recognized the validity of the ownership and title of the transferors.”

Aqualab appealed that a reversal of the SC’s second division ruling that dismissed its petition “would not only uphold the truth based on the evidence, but would also redeem the CA’s erroneous and unprecedented ruling, which, if affirmed with finality, would deeply erode the public faith in the judiciary.”

The petitioner argued in its appeal that the Original Certificate of Title (OCT) No. RO-1227, and the subsequently issued OCT No. RO-2246, covering Homestead Patent No. 128470 in the name of Juan Pagobo was issued as early as Dec. 4, 1936 and was reconstituted as a lost or destroyed title on orders of the Director of Lands on Nov. 14, 1969.

“In other words, Juan Pagobo’s application for Homestead Patent over Lot 6727, of which the disputed property (Aqualab’s land) is a part, was granted as early as Dec. 4, 1936 and not on Dec. 18, 1969 as found by the CA, nor on Feb. 10, 1970 as claimed by the heirs,” it explained.

“Simply put, the subject Homestead Patent was clearly issued in 1936 or before Juan Pagobo’s demise in 1947 and not in 1969 or 1970 (date of the reconstituted title), thereby supporting Aqualab’s stance that the sale of the disputed property to Tarcela de Espina in 1970 was made beyond the prohibitive period of five years provided for under Section 118 of the Public Land Act,” Aqualab further stated.

“Accordingly, Aqualab is a purchaser in good faith and for value. The CA’s outright cancellation of the title of Aqualab over the disputed property, and worse, the SC’s affordance of the erroneous ruling, impaired the public confidence in certificates of title,” the supplemental motion said.

Citing a previous ruling of the SC, Aqualab said: “Where innocent third persons, relying on the correctness of the certificate of title thus issued, acquire rights over the property the court cannot disregard such rights and order the total cancellation of the certificate. The effect of such an outright cancellation would be to impair public confidence in the certificate of title, for everyone dealing with property registered under the Torrens system would have to inquire in every instance whether the title has been regularly or irregularly issued. This is contrary to the evident purpose of the law.”

“Every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefore and the law will in no way oblige him to go behind the certificate to determine the condition of the property. Even if a decree in a registration proceeding is infected with nullity, still an innocent purchaser for value relying on the Torrens title issued in pursuance therefore is protected,” it added.

Aqualab earlier appealed to the Court’s Second Division to hold oral arguments on the matter, not only for the sake of substantial justice by affording it with its constitutional right to due process, “but also because the questioned resolution of this Court, if allowed to become final, would be a very dangerous precedent.”