The case involved two parcels of land (lot 1341 and 1342) containing an aggregate area of 18.6 hectares over which Gorio obtained a Free Patent on January 18, 1967 and an Original Certificate of Title (OCT) No. P-4522 on February 6, 1967. Apparently, before the patent and title were issued, or as early as October 24, 1960, lot 1341 with an area of about 15 hectares was supposedly adjudicated as a private lot in the name of Emilio pursuant to a decision of the Court of First Instance (CFI). But the Free Patent and Title were nevertheless issued in favor of Gorio after the Public Lands Inspector of the Bureau of Lands made a report and a certification dated February 28, 1966 that certain claimants of these lots, 1341 for Emilio and 1342 for Ana could not be located in the locality and that the lots were already abandoned by them so that in the year 1941 Gorio took possession of the lands thru his tenants.
On March 10, 1967 however, the heirs of Emilio represented by Mina caused the annotation of an adverse claim on OCT P-4522 particularly the portion covered by lot 1341. The heirs never pursued this claim until eight years later or on July 30, 1975 when Mina filed a formal protest with the Bureau of Lands (BL) alleging that said lot 1341 is identical to the lands already adjudicated as private property in that Oct. 24, 1960 decision of the CFI. Acting on this protest, the BL legal division conducted an investigation and ocular inspection on May 3, 1976 where it was ascertained that Gorio’s Free Patent and OCT were indeed improperly and fraudulently issued. No action was however taken on this report until May 10, 1988 when the Legal Division Chief of the BL recommended the filing of the court action for the cancellation of Gorio’s Free Patent and OCT. The recommendation stemmed from another investigation conducted on February 15, 1988 by the BL’s Geodetic Engineer confirming the earlier findings of the BL legal division.
Prior to this recommended action however and in the meantime, lots 1341 and 1342 were extra-judicially divided and sold by Gorio and his children to Juan on July 31, 1979, after Gorio’s wife died. So OCT P-4522 was cancelled and TCT No. NT 166271 was issued in the name of Juan. The next day, Juan sold 3 hectares of lot 1341 to Tito and the entire lot 1342 to Virgie. On May 12, 1980, the adverse claim of Emilio’s heirs on OCT P-4522 was cancelled by the Register of Deeds.
Thereafter, Juan further subdivided the portion of lot 1341 while lot 1342 was sold by Virgie to Josie who later on subdivided it into 13 lots. And for about half a decade, ownership over the properties transferred either by sale from one buyer to another or foreclosure of mortgage by the mortgagee. The last owners thereof were a rural bank and the spouses Edward and Ana.
It was only on May 24, 1990, when the Republic of the Philippines (RP) filed the action in Court against Gorio and his children for cancellation of Free Patent and OCT for being allegedly issued fraudulently, as well as the subsequent TCTs emanating therefrom which by that time were already in the names of the rural bank and the spouses Edward and Ana who were thus likewise included in the suit. RP cited, among others, the doctrine that no amount of legal technicality may serve as a solid foundation for the enjoyment of the fruits of fraud. Was RP correct?
No. Aside from the fact that RP is not the real party in this case because the lots in dispute are no longer part of the public domain, there are numerous third, fourth, fifth and more parties holding Torrens titles in their favor and enjoying the presumption of good faith in this case. The doctrine cited by RP is applicable only when the land covered by the patent and title acquired through fraud or misrepresentation is either a non-disposable land of the public domain like a forest or the patent and the title are still in the name of the person who committed the fraud or misrepresentation, and in either instance, there were yet no innocent third parties in the way. With the functioning of the Torrens system of registration, the doctrine to follow is that a forged or fraudulent document of sale may become the root of a valid title if the certificate of title has already been transferred from the name of the true owner to the name of the forger or the name indicated by the forger.
It is even worse in this case because here, there is no forger to speak of. The certification of the Land Inspector on February 28, 1966 about the abandonment of the lots by Emilio and Ana cannot, by itself, be fraudulent. It may even turn out to be the truth. What RP perceives as fraud may be nothing more than the differences of opinions between the said land inspector and the geodetic engineer who conducted a verification survey 22 years after the first inspection report. But regardless of who between the two is correct, the hard reality is that the properties in question are no longer floating objects on a spring that cannot rise higher than its source, as they are now very much ashore and firmly standing on high solid ground of the Torrens system of land registration (Republic vs. Agunoy, Sr. G.R. 155394. February 17, 2005)