G.R. No. 150862 , August 3, 2006
THE HEIRS OF ATTY. JOSE C. REYES, namely ELVIRA G. REYES, JOSE G. REYES, MA. GUIA R. CANCIO, CARMELO G. REYES, MA. GRACIA R. TINIO and MA. REGINA PAZ G. REYES, Petitioners, vs. REPUBLIC OF THE PHILIPPINES, Respondent.

FACTS

On July 17, 1961, spouses Dr. Casiano A. Sandoval and Luz Marquez de Sandoval applied for registration of title over Cadastral Lot 7453 in Cordon, Isabela, containing 15,303.59285 hectares, docketed as LRC Case No. II-N-36. The Republic of the Philippines, through the Office of the Solicitor General (OSG), opposed the application. After an initial hearing in 1962, the case remained dormant for nearly 20 years. On March 3, 1981, the heirs of Sandoval, the heirs of Clemencia Parasac, the heirs of Liberato Bayaua, Atty. Jose C. Reyes (petitioners’ predecessor-in-interest), Philippine Cacao and Farm Products, Inc., the Bureau of Lands, and the Bureau of Forest Development (the last two represented by the provincial fiscal of Nueva Vizcaya) submitted a compromise agreement to the Regional Trial Court (RTC). The RTC approved the agreement and rendered a decision distributing the land among the parties, with the Sandoval heirs assigning 892.5928 hectares to Atty. Jose C. Reyes as attorney’s fees. On August 18, 1999, the Republic, through the OSG, filed a petition with the Court of Appeals to annul the RTC decision under Rule 47 of the Rules of Court, on the ground of lack of jurisdiction. The Court of Appeals denied the motions to dismiss filed by the petitioners and other parties and annulled the RTC decision. The Court of Appeals held that the adjudication was unconstitutional as the land was forest land, no evidence of ownership was presented, and the petition was not barred by laches or estoppel because the RTC lacked jurisdiction and the OSG did not consent to or deputize the provincial fiscal to enter into the compromise agreement. Petitioners filed a motion for reconsideration, which was denied, prompting this petition.

ISSUE

1. Whether the Court of Appeals erred in giving due course to the Republic’s petition for annulment of judgment under Rule 47 of the Rules of Court.
2. Whether the Republic is estopped from challenging the RTC judgment due to its failure to contest the decision for over eighteen years.
3. Whether the Court of Appeals erred in finding that the RTC decision was based solely on the compromise agreement without evidence.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ decision.
1. On the propriety of the petition for annulment under Rule 47: The Court held that the petition was proper. Citing Collado v. Court of Appeals, it ruled that where the land applied for is part of the public forest, the land registration court acquires no jurisdiction over it. At the time the application was filed in 1961, the contested land was part of the public forest, as it was reclassified from forest land to alienable land only in 1979. Thus, the RTC lacked jurisdiction over the subject matter from the outset, making the proceedings null and void. The absence of a remedy under P.D. No. 1529 (The Property Registration Decree) necessitated resort to Rule 47 by analogy.
2. On the application of estoppel against the government: The Court ruled that the Republic is not estopped from challenging the judgment. The principle of estoppel does not generally apply against the government, especially when it acts in its sovereign capacity to protect public interest or correct a mistake of its agents. The OSG was not notified of the proceedings, did not deputize the provincial fiscal to enter into the compromise agreement, and did not receive a copy of the RTC judgment. The provincial fiscal had no authority to bind the Republic in the compromise agreement. The Court emphasized that the government cannot be estopped by the unauthorized acts of its agents, particularly when the agreement involved forest lands, which are inalienable and outside the commerce of man. The Court also cited Republic v. Sayo, involving the same parties and a similar compromise agreement over adjacent land, which was annulled on identical grounds.
3. On the basis of the RTC decision: The Court upheld the Court of Appeals’ finding that the RTC decision was based solely on the compromise agreement without any evidence of ownership presented by the petitioners. The agreement itself was patently illegal as it involved the distribution of forest lands, which are not susceptible to private appropriation. The decision was therefore void for lack of jurisdiction and for being contrary to law.
The Supreme Court concluded that the RTC never acquired jurisdiction over the land registration case because the subject land was forest land at the time of the application. Consequently, all proceedings, including the compromise agreement and the decision based thereon, were null and void. The Republic’s petition for annulment was justified, and estoppel could not bar the government from asserting its right to protect inalienable public domain lands.