G.R. No. 130876 . December 5, 2003.
FRANCISCO ALONSO (Deceased), substituted by MERCEDES V. ALONSO, TOMAS V. ALONSO and ASUNCION V. ALONSO, petitioners, vs. CEBU COUNTRY CLUB, INC., respondent.

FACTS

Petitioners, heirs of Francisco Alonso, filed a complaint for declaration of nullity of title and recovery of property against respondent Cebu Country Club, Inc. over Lot No. 727-D-2, a portion of the Banilad Friar Lands Estate. Petitioners claimed ownership through inheritance from Tomas Alonso, who allegedly purchased the lot from the government. Respondent claimed ownership through a Torrens title derived from a reconstituted certificate of title. The trial court and the Court of Appeals ruled in favor of the respondent.
In its Decision dated January 31, 2002, the Supreme Court denied the petition for review, set aside the lower courts’ decisions, and dismissed both the complaint and counterclaim. The Court declared that neither party had established lawful ownership and that the lot legally belongs to the Government of the Philippines as part of the Friar Lands Estate. Both parties filed separate motions for reconsideration.

ISSUE

The core issue for reconsideration is whether the Supreme Court correctly declared Lot No. 727-D-2 as government property, thereby dismissing both parties’ claims.

RULING

The Court denied both motions for reconsideration. It held that petitioners failed to discharge their burden of proof to establish ownership. As plaintiffs seeking recovery of property, they bore the burden of proving their claim by preponderance of evidence, which they did not fulfill. Critically, for a sale of Friar Lands to be valid under Act No. 1120 (the Friar Lands Act), approval by the Secretary of the Interior is mandatory. Petitioners presented no positive evidence of such approval, and the law does not permit this requirement to be presumed or inferred from circumstantial acts.
The Court also found petitioners’ allegations of fraud and jurisdictional defects in the reconstitution of respondent’s title unsubstantiated. Fraud must be proved by clear and convincing evidence, not mere allegation, and petitioners offered no such competent proof. Furthermore, the Court noted the petitioners’ predecessor-in-interest, Tomas Alonso, never asserted ownership over the lot during his lifetime despite having the capacity and opportunity to do so, undermining the current claim.
Finally, the declaration that the lot belongs to the Government does not constitute an unauthorized reversion. The property remains part of the State’s patrimonial Friar Lands, as neither party successfully demonstrated that it had been lawfully alienated into private ownership. The State’s ownership is inherent, and the failure of both parties to prove a valid transfer results in the property remaining with the State.