G.R. No. L-26324 August 31, 1983
THE DIRECTOR OF LANDS, plaintiff-appellee, vs. MARIA ABANILLA and THE REGISTER OF DEEDS OF ISABELA, defendants, MARIA ABANILLA, defendant-appellant.

FACTS

Maria Abanilla applied for a free patent over a public land, Lot No. 5798. During the pendency of her application, Esteban Esquivel and Wilson Nuesa filed oppositions, claiming they had occupied portions of the lot since before her application. An administrative investigation by the Bureau of Lands was ordered. Despite this pending investigation, Abanilla secured the issuance of Free Patent No. V-2317 and the corresponding Original Certificate of Title No. P-2723 in 1953. The subsequent administrative investigation sustained the claims of Esquivel and Nuesa, finding that Abanilla acted in bad faith and procured the patent through misrepresentation. The Director of Lands and, on appeal, the Secretary of Agriculture and Natural Resources, ordered steps for the annulment of the patent and title.
The Director of Lands then filed an action in the Court of First Instance for the cancellation of the patent and title. The trial court ruled in favor of the Director, declaring the patent and title null and void. Abanilla appealed directly to the Supreme Court, raising a pure question of law.

ISSUE

Whether the patent and original certificate of title issued to Maria Abanilla can be cancelled by the State on the ground of fraud, notwithstanding the issuance of the Torrens title.

RULING

Yes. The Supreme Court affirmed the trial court’s decision, ordering the cancellation of the patent and title. The legal logic is anchored on the principle that the State, as the source of the patent title, has an imprescriptible right to seek its annulment if it was obtained through fraud. The Court held that the indefeasibility of a Torrens title one year after its issuance, under Section 38 of Act No. 496 (the Land Registration Act), cannot be invoked against the State. Prescription does not run against the State pursuant to Article 1108 of the Civil Code.
Furthermore, the Court found that Abanilla was estopped from claiming that the action had prescribed. She actively participated in the protracted administrative proceedings, submitting to investigation and exhausting administrative remedies, which delayed the filing of the judicial action. Her conduct precluded her from asserting laches or prescription. The patent was void from the beginning because it was secured through misrepresentation, encompassing lands actually occupied by other parties with a better right. A title founded on fraud does not attain incontrovertibility against the State. It is not only the right but the duty of the Director of Lands to institute reversion proceedings under such circumstances to rectify the fraud upon the public domain.