G.R. No. L-55912 November 26, 1986
HEIRS OF DOMINGO P. BALOY, represented by RICARDO BALOY, ET AL., petitioners, vs. COURT OF APPEALS, DIRECTOR OF LANDS and PHILIPPINE NAVY, respondents.

FACTS

The petitioners, heirs of Domingo Baloy, applied for the registration of two parcels of land in Olongapo City, claiming they formed part of their ancestral estate covered by a possessory information title. The respondents, the Director of Lands and the Philippine Navy, opposed the application. They argued the lands were historically part of a U.S. Naval Reservation established by a 1902 Executive Order of President Theodore Roosevelt. They contended that Domingo Baloy’s failure to file a claim under Act No. 627 forever barred his right, and that any possession was merely tolerated. They further asserted the lands were within a subsequent Philippine naval reservation under Proclamation No. 320, albeit with a clause respecting existing rights. The trial court initially granted the application in 1971. Upon the petitioners’ motion to amend the decision to include their personal circumstances for technical completeness, the trial court, in 1972, rendered an Amended Decision that completely reversed the first and denied the registration.

ISSUE

The core issue is whether the petitioners have a registrable title to the subject lands, or whether such title is barred because the lands were part of a U.S. Naval Reservation and thus subject to Act No. 627 .

RULING

The Supreme Court reversed the Court of Appeals and granted the application for registration. The legal logic rests on two pivotal points. First, the Court found that the subject lands were never validly included within the U.S. Naval Reservation. Critical evidence, a map presented by the oppositors themselves (Exhibit “3”), clearly showed that the petitioners’ lots (marked Exhibit “3-E”) lay outside the boundaries of the area enclosed as the naval reservation (Exhibit “3-A”). The respondent court failed to consider this dispositive evidence. Second, since the lands were not part of the naval reservation, Act No. 627 —which required claims to be filed against lands set aside for U.S. government use—did not apply. Consequently, Domingo Baloy’s failure to file a claim under that law did not operate to divest his ownership or convert the property into public land. The Court also noted supportive official acts, including a Bureau of Lands letter stating the land was not part of the public domain and the Bureau’s approval of the petitioners’ survey plan. Therefore, the petitioners’ title, rooted in the possessory information and their long possession, remained intact and registerable. The trial court’s amended decision, based on the erroneous premise that the lands were part of the reservation, was fundamentally flawed.