G.R. No. 101115; August 22, 2002
Republic of the Philippines, petitioner, vs. Hon. Court of Appeals, Emilio Bayona, Maxima R. De Sepe, Sps. Arturo Sepe and Dominica Simeon, Sps. Asuncion Sepe and Ambrocio Daguio, Sps. Dominador Sepe and Remedios Nepomuceno, Sps. Enrique Sepe and Magdalena Serial, Matilde Sepe, Mariano Sepe, respondents.

FACTS

On June 6, 1975, the Republic of the Philippines filed a complaint for annulment of title and reversion against private respondents. The government alleged that Original Certificate of Title No. 275 (7431) was issued on May 6, 1944, to Abundia Romero covering Lot 179 of the Malibay Estate in Pasay City, purportedly pursuant to Sales Patent No. 481 based on Insular Government Property Sales Application No. 1794. The government contended that the patent did not exist in official records, that Abundia Romero never occupied the lot, that the OCT did not bear the signature of the then Secretary of Agriculture and Natural Resources but only the words “(Sgd.) Raf. R. Alunan,” and that in her death certificate, Abundia Romero was stated as “single” whereas the OCT described her as a “widow.” The government further alleged that in 1971, respondent Maxima Sepe filed a petition for reconstitution of the lost title, misrepresenting that the registered owners were the spouses Abundia Romero and Ruperto Sepe. Subsequently, the respondents surnamed Sepe executed an extrajudicial partition, subdivided the lot, and obtained Transfer Certificates of Title. They then sold portions to respondent Emilio Bayona. The government sought annulment of all related titles and transactions and reversion of the land to the public domain.
Private respondents asserted that the lot was validly sold to Abundia Romero in 1938 under IGPSA No. 1794, that Sales Patent No. 481 was issued to her, and that the OCT was valid despite the absence of a handwritten signature, as it was a practice at the time to only indicate “(Sgd.)” before the name. They claimed their title was indefeasible, the action had prescribed, and Emilio Bayona was a buyer in good faith.
The Regional Trial Court dismissed the complaint, declaring OCT No. 275 (7431) valid, finding that the absence of a signature did not invalidate it, that the validity of the OCT had been upheld by the Bureau of Lands in other cases, and that the issues were resolved with finality in a prior case (Civil Case No. 8432-P) before the RTC of Pasay City, Branch 114. The Court of Appeals affirmed the trial court’s decision.

ISSUE

1. Whether Original Certificate of Title No. 275 (7431) was legally issued to Abundia Romero.
2. Whether the petitioner Republic has the right to question the right of respondent Sepes to succeed to the estate of Abundia Romero.
3. Whether respondent Emilio Bayona was a buyer in good faith and for value.
4. Whether the Court of Appeals erred in dismissing the petitioner’s appeal.

RULING

The Supreme Court denied the petition and affirmed the decision of the Court of Appeals.
1. On the validity of OCT No. 275 (7431): The Court held that the absence of the handwritten signature of the Secretary of Agriculture and Natural Resources on the OCT did not invalidate it. The original sales patent, which was signed by the Secretary, was the basis for the OCT. The Register of Deeds copied the patent into the OCT, and the indication “(Sgd.)” was sufficient to show the patent was signed. The Register of Deeds of Pasay City certified that the original OCT was registered in Abundia Romero’s name. Furthermore, the Bureau of Lands had issued an order affirming the grant of Sales Patent No. 481 to Abundia Romero and annulling subsequent dispositions of the lot to other applicants.
2. On the right to question succession: The Court ruled that the petitioner Republic is not a proper party to question the right of the respondents Sepes to inherit from Abundia Romero. The State’s right to inherit under Article 1011 of the Civil Code arises only in default of persons legally entitled to succeed. The marital status of Abundia Romero (whether she was single or married to Ruperto Sepe) was immaterial to the validity of the OCT. The right to question her status pertained only to her heirs, not the State.
3. On Emilio Bayona as a buyer in good faith: The Court found that the issue of whether Emilio Bayona was a purchaser in good faith and for value was not for the government to raise. This right pertained only to the heirs of Abundia Romero. The government, not being an heir, had no legal standing to challenge the sale on that ground.
4. On the application of res judicata: The Court emphasized that the validity of OCT No. 275 (7431) and the ownership rights of the respondents Sepes had already been conclusively settled in Civil Case No. 8432-P entitled Valentin Francisco vs. Hon. Pedro J.L. Bautista, et al., where both the petitioner Republic and the private respondents were parties as co-defendants. The final judgment in that case, which upheld the title and declared the respondents Sepes as owners by inheritance from their father Prudencio Sepe (husband of Abundia Romero), operates as res judicata. The principle bars the relitigation of the same issue involving the same parties and subject matter.
Consequently, the Supreme Court sustained the Court of Appeals’ affirmation of the trial court’s dismissal of the complaint for annulment and reversion.