567 Phil. 427
REYES, R.T., J.:
x x x The mistakes and the flaws in the granting of the title were made by the Bureau of Lands personnel more particularly the Director of Lands who is the Officer charged with the following the provisions of the Public Land Law. x x x.The RTC explained that titles issued to private parties by the Bureau of Lands are void ab initio if the land covered by it is a forest land.[25] It went further by stating that if the mother title is void, all titles arising from the mother title are also void.[26] It thus ruled in favor of the Republic with a fallo reading:
It is clear that the mother Title, OCT–P-2823 in the name of defendant Bugayong was issued at a time when the area was not yet released by the Bureau of Forestry to the Bureau of Lands.
The area covered by OCT No. P. 2823 was not yet declared by the Bureau of Lands alienable and disposable when the said OCT was issued. The subdivision of the lot covered by OCT P-2823 into 4 lots covered by TCT Nos. T-32768, 32769, 32756 and 32771 did not cure the defect. x x x.[24]
IN VIEW WHEREOF, judgment is hereby rendered declaring Original Certificate of Title No. P-2823 issued in the name of defendant Angelito Bugayong null and void. The following Transfer Certificate of Titles which were originally part of the lot covered by O.C.T. No. P-2823 are likewise declared void:Disagreeing with the RTC judgment, LBP appealed to the CA on October 31, 1996. It asserted in its appellant’s brief[28] that it validly acquired mortgage interest or lien over the subject property because it was an innocent mortgagee for value and in good faith.[29] It also emphasized that it is a government financial institution.SO ORDERED.[27] (Underscoring supplied)
- A. TCT No. 57348 in the name of defendant Lourdes Farms mortgaged to defendant Land Bank.
B. TCT No. 84749 in the name of defendants Johnny and Catherine Du mortgaged to defendant Development Bank of the Philippines.
C. TCT No. 37386 in the name of defendants spouses Pahamotang mortgaged to defendant Lourdes Du mortgaged with defendant Allied Bank.
E. TCT Nos. 68154 and 32768 in the names of defendants/spouses Maglana Santamaria.- All private defendants shall give to the Davao City Register of Deeds their titles, who shall cancel the Transfer Certificate of Titles mentioned in paragraph number one.
- Lot No. 4159, Plan SI (VIII-1) 328-D covered by O.C.T. P-2823 is hereby REVERTED to the mass of public domain.
WHEREFORE, premises considered, the present appeals are hereby DISMISSED and the Decision of the trial court in Civil Case No. 17516 is hereby AFFIRMED.[32]The CA confirmed that the “evidence for the plaintiff clearly established that the land covered by OCT No. P-2823 issued pursuant to a sales patent granted to defendant Angelito C. Bugayong was still within the forestal zone at the time of the grant of the said patent.”[33] It explained:
Forest lands or forest reserves, are incapable of private appropriation and possession thereof, however long, cannot convert them into private properties. This is premised on the Regalian Doctrine enshrined not only in the 1935 and 1973 Constitutions but also in the 1987 Constitution. Our Supreme Court has upheld this rule consistently even in earlier cases. It has also been held that whatever possession of the land prior to the date of release of forested land as alienable and disposable cannot be credited to the 30-year requirement (now, since June 12, 1945) under Section 48(b) of the Public Land Act. It is only from that date that the period of occupancy for purposes of confirmation of imperfect or incomplete title may be counted. Since the subject land was declared as alienable and disposable only on March 25, 1981, appellants and their predecessors-in-interest could not claim any vested right thereon prior to its release from public forest zone.With respect to LBP’s contention[35] that it was a mortgagee in good faith and for value, the CA declared, citing Republic v. Reyes[36] that: “mortgagees of non-disposable lands where titles thereto were erroneously issued acquire no protection under the land registration law. Appellants-mortgagees’ proper recourse therefore is to pursue their claims against their respective mortgagors and debtors.”[37]
The inclusion of forest land in a title, “whether title be issued during the Spanish regime or under the Torrens system, nullifies the title.” It is, of course, a well-recognized principle that the Director of Lands (now Land Management Bureau) is bereft of any jurisdiction over public forest or any lands not capable of registration. It is the Bureau of Forestry that has jurisdiction and authority over the demarcation, protection, management, reproduction, occupancy and use of all public forests and forest reservations and over the granting of licenses for the taking of products therefrom. And where the land applied for is part of the public forest, the land registration court acquires no jurisdiction over the land, which is not yet alienable and disposable.
Thus, notwithstanding the issuance of a sales patent over the subject parcel of land, the State may still take action to have the same land reverted to the mass of public domain and the certificate of title covering said forest land declared null and void for having been improperly and illegally issued. Titles issued over non-alienable public lands have been held as void ab initio. The defense of indefeasibility of title issued pursuant to such patent does not lie against the State. Public land fraudulently included in patents or certificates of title may be recovered or reverted to the State in accordance with Section 101 of the Public Land Act. In such cases, prescription does not lie against the State. Likewise, the government is not estopped by such fraudulent or wrongful issuance of a patent over public forest land inasmuch as the principle of estoppel does not operate against the Government for the acts of its agents. x x x.[34] (Citations omitted)
A.
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE PETITIONER LAND BANK OF THE PHILIPPINES’ MORTGAGE RIGHT AND INTEREST AS AN INNOCENT PURCHASER (MORTGAGEE) FOR VALUE AND IN GOOD FAITH OVER THE SUBJECT LAND COVERED BY TCT NO. T-57348 IS VALID AND SUBSISTING IN ACCORDANCE WITH THE LAW AND EXISTING JURISPRUDENCE IN OUR COUNTRY.
B.
THE COURT OF APPEALS ERRED IN NOT FINDING PETITIONER LAND BANK OF THE PHILIPPINES’ MORTGAGE RIGHT AND INTEREST OVER THE SUBJECT LAND AS VALID AND SUBSISTING UNDER THE CONSTITUTIONAL GUARANTEE OF NON-IMPAIRMENT OF OBLIGATION OF CONTRACTS.C.
THE COURT OF APPEALS ERRED IN NOT AWARDING TO PETITIONER LAND BANK OF THE PHILIPPINES THE RELIEF PRAYED FOR UNDER ITS CROSS-CLAIM AGAINST CO-DEFENDANT LOURDES FARMS, INC., THAT IS, ORDERING SAID CO-DEFENDANT LOURDES FARMS, INC. TO PAY ITS OUTSTANDING OBLIGATION TO THE LAND BANK COVERED BY THE SUPPOSED NULL AND VOID TCT NO. T-57348, OR TO PROVIDE A SUBSTITUTE COLLATERAL IN LIEU OF SAID TCT NO. T-57348.[38] (Underscoring supplied)
ARTICLE 2085. The following requisites are essential to the contracts of pledge and mortgage:Since Lourdes Farms, Inc. is not the owner of the land, it does not have the capacity to mortgage it to LBP. In De la Cruz v. Court of Appeals,[44] the Court declared:
(1) That they be constituted to secure the fulfillment of a principal obligation;
(2) That the pledgor or mortgagor be the absolute owner of the thing pledged or mortgaged;
(3) That the persons constituting the pledge or mortgage have the free disposal of their property, and in the absence thereof, that they be legally authorized for the purpose. (Emphasis ours)
While it is true that the mortgagees, having entered into a contract with petitioner as mortgagor, are estopped from questioning the latter’s ownership of the mortgaged property and his concomitant capacity to alienate or encumber the same, it must be considered that, in the first place, petitioner did not possess such capacity to encumber the land at the time for the stark reason that it had been classified as a forest land and remained a part of the patrimonial property of the State. Assuming, without admitting, that the mortgagees cannot subsequently question the fact of ownership of petitioner after having dealt with him in that capacity, still, petitioner was never vested with the proprietary power to encumber the property. In fact, even if the mortgagees continued to acknowledge petitioner as the owner of the disputed land, in the eyes of the law, the latter can never be presumed to be owner.As correctly pointed out by the OSG, mortgagees of non-disposable lands, titles to which were erroneously issued, acquire no protection under the Land Registration Law.[45]
On September 22, 1969, Angelito C. Bugayong was issued a sales patent covering a 41,276 square meter parcel of land in Bocana, Barrio Kabacan, Davao City by the Bureau of Lands. On the basis of the sales patent, the Register of Deeds of Davao City issued OCT No. P-2823 to Bugayong. Bugayong later subdivided the land into four lots, one of which (Lot No. 4159-B covered by TCT No. T-32770) was sold by him to the spouses Reynaldo Rogacion and Corazon Pahamotang. After obtaining TCT No. T-37786 in their names, the spouses mortgaged the lot to the Philippine National Bank (PNB). As they defaulted in the payment of their loan, the PNB foreclosed the property and purchased it at the foreclosure sale as the highest bidder. Eventually, the PNB consolidated its title.Contrary to the argument of LBP, since the title is void, it could not have become incontrovertible. Even prescription may not be used as a defense against the Republic. On this aspect, the Court in Reyes v. Court of Appeals,[49] citing Republic v. Court of Appeals,[50] held:
Sometime in 1981, upon the petition of the residents of the land, the Bureau of Lands conducted an investigation into the sales patent issued in favor of Angelito C. Bugayong and found the sales patent to have been illegally issued because (1) the land was released as alienable and disposable only on March 25, 1981; previous to that, the land was within the forest zone; (2) the land is covered by sea water during high tide; and (3) the patentee, Angelito C. Bugayong, had never been in actual possession of the land.
Based on this investigation, the government instituted the present suit in 1987 for cancellation of title/patent and reversion of the parcel of land against Angelito C. Bugayong, the Rogacion spouses, and the PNB, among others.
On July 6, 1996, the trial court rendered a decision declaring OCT No. P-2823 and all titles derived therefrom null and void and ordering reversion of the subject property to the mass of the public domain. On appeal, the Court of Appeals affirmed the trial court’s decision. Hence, this petition.
First. Petitioner contends that it had a right to rely on TCT No. T-37786 showing the mortgagors Reynaldo Rogacion and Corazon Pahamotang’s ownership of the property.
The contention is without merit. It is well settled that a certificate of title is void when it covers property of public domain classified as forest or timber or mineral lands. Any title issued covering non-disposable lots even in the hands of an alleged innocent purchaser for value shall be cancelled (Republic v. Reyes, 155 SCRA 313 (1987)).
(Republic v. Court of Appeals, 148 SCRA 480 (1987)). In this case, petitioner does not dispute that its predecessor-in-interest, Angelito C. Bugayong, had the subject property registered in his name when it was forest land. Indeed, even if the subject property had been eventually segregated from the forest zone, neither petitioner nor its predecessors-in- interest could have possessed the same under claim of ownership for the requisite period of thirty (30) years because it was released as alienable and disposable only on March 25, 1981.
Second. Petitioner’s contention that respondent’s action for reversion is barred by prescription for having been filed nearly two decades after the issuance of Bugayong’s sales patent is likewise without merit. Prescription does not lie against the State for reversion of property which is part of the public forest or of a forest reservation registered in favor of any party. Public land registered under the Land Registration Act may be recovered by the State at any time (Republic v. Court of Appeals, 258 SCRA 223 (1996)).[48]
Petitioners’ contention that the government is now estopped from questioning the validity of OCT No. 727 issued to them, considering that it took the government 45 years to assail the same, is erroneous. We have ruled in a host of cases that prescription does not run against the government. In point is the case of Republic v. Court of Appeals, wherein we declared:There is no impairment of contract but a valid exercise of police power of the State.And in so far as the timeliness of the action of the Government is concerned, it is basic that prescription does not run against the State x x x. The case law has also been:When the government is the real party in interest, and is proceeding mainly to assert its own rights and recover its own property, there can be no defense on the ground of laches or limitation x x x.
Public land fraudulently included in patents or certificates of title may be recovered or reverted to the State in accordance with Section 101 of the Public Land Act. Prescription does not lie against the State in such cases for the Statute of Limitations does not run against the State. The right of reversion or reconveyance to the State is not barred by prescription. (Emphasis ours)
The view this Court takes of the cases at bar is but in adherence to public policy that should be followed with respect to forest lands. Many have written much, and many more have spoken, and quite often, about the pressing need for forest preservation, conservation, protection, development and reforestation. Not without justification. For, forests constitute a vital segment of any country's natural resources. It is of common knowledge by now that absence of the necessary green cover on our lands produces a number of adverse or ill effects of serious proportions. Without the trees, watersheds dry up; rivers and lakes which they supply are emptied of their contents. The fish disappear. Denuded areas become dust bowls. As waterfalls cease to function, so will hydroelectric plants. With the rains, the fertile topsoil is washed away; geological erosion results. With erosion come the dreaded floods that wreak havoc and destruction to property – crops, livestock, houses and highways – not to mention precious human lives. Indeed, the foregoing observations should be written down in a lumberman’s decalogue.In Edu v. Ericta,[52] the Court defined police power as the authority of the state to enact legislation that may interfere with personal liberty or property in order to promote the general welfare. It is the power to prescribe regulations to promote the health, morals, peace, education, good order or safety, and general welfare of the people. It is that inherent and plenary power of the State which enables it to prohibit all things hurtful to the comfort, safety and welfare of society.[53] It extends to all the great public needs and is described as the most pervasive, the least limitable and the most demanding of the three inherent powers of the State, far outpacing taxation and eminent domain.[54] It is a ubiquitous and often unwelcome intrusion. Even so, as long as the activity or the property has some relevance to the public welfare, its regulation under the police power is not only proper but necessary.[55]
Because of the importance of forests to the nation, the State’s police power has been wielded to regulate the use and occupancy of forest and forest reserves.
To be sure, the validity of the exercise of police power in the name of the general welfare cannot be seriously attacked. Our government had definite instructions from the Constitution’s preamble to “promote the general welfare.” Jurisprudence has time and again upheld the police power over individual rights, because of the general welfare. Five decades ago, Mr. Justice Malcolm made it clear that the “right of the individual is necessarily subject to reasonable restraint by general law for the common good” and that the “liberty of the citizen may be restrained in the interest of public health, or of the public order and safety, or otherwise within the proper scope of the police power.” Mr. Justice Laurel, about twenty years later, affirmed the precept when he declared that “the state in order to promote the general welfare may interfere with personal liberty, with property, and with business and occupations” and that “[p]ersons and property may be subjected to all kinds of restraints and burdens, in order to secure the general comfort, health, and
prosperity of the state.” Recently, we quoted from leading American case, which pronounced that “neither property rights nor contract rights are absolute; for government cannot exist if the citizen may at will use his property to the detriment of his fellows, or exercise his freedom of contract to work them harm,” and that, therefore, “[e]qually fundamental with the private right is that of the public to regulate it in the common interest.” (Emphasis ours and citations omitted)
Questions that may be decided. – No error which does not affect the jurisdiction over the subject matter or the validity of the judgment appealed from or the proceedings therein will be considered unless stated in the assignment of errors, or closely related to or dependent on an assigned error and properly argued in the brief, save as the court may pass upon plain errors and clerical errors.Apparently, the cross-claim was taken for granted not only by the RTC but also by LBP. The cross-claim was not included as a subject or issue in the pre-trial order and instead of asking that the same be heard, LBP filed a motion[62] to submit the main case for resolution. The main case was thus resolved by the RTC without touching on the merits of the cross-claim.