G.R. No. 152947 . July 7, 2004.
EAST ASIA TRADERS, INC., petitioner, vs. REPUBLIC OF THE PHILIPPINES, represented by the DIRECTOR, LANDS MANAGEMENT BUREAU, respondent.

FACTS

Galileo Landicho applied for and was granted a free patent over Lot No. 4355 in Laurel, Batangas, leading to the issuance of Original Certificate of Title (OCT) No. P-3218 in 1988. Landicho subsequently sold the lot to Teresita Reyes, who then sold it to petitioner East Asia Traders, Inc., with corresponding transfer certificates of title issued. However, a subsequent investigation by the Department of Environment and Natural Resources (DENR) revealed that at the time of Landicho’s application, the lot was inalienable public land, being part of a property of public dominion intended for use as a national road.
Consequently, the Republic of the Philippines, through the Director of the Lands Management Bureau, filed a complaint for reversion before the Regional Trial Court (RTC) in 1998, seeking the cancellation of the free patent and all derivative titles. Petitioner filed a motion to dismiss the complaint, arguing primarily that the State’s cause of action had already prescribed. The RTC denied the motion, a decision affirmed by the Court of Appeals, prompting this petition.

ISSUE

Whether the action for reversion filed by the Republic is barred by prescription.

RULING

No, the action for reversion is not barred by prescription. The Supreme Court affirmed the rulings of the lower courts, holding that prescription does not run against the State. The legal logic is anchored on the fundamental principle that the State, in pursuing reversion of public domain fraudulently or erroneously titled, is not subject to statutes of limitation. This principle is codified in Article 1108(4) of the Civil Code, which states that prescription, whether acquisitive or extinctive, does not run against the State. Furthermore, Article 1113 provides that property of the State not patrimonial in character shall not be the object of prescription.
The land in question, being part of the inalienable public dominion intended for a national road, is precisely such non-patrimonial property. The Court emphasized that a certificate of title issued pursuant to a void free patent does not become indefeasible. Since the patent was void ab initio—the land being inalienable at the time of grant—the resulting title is likewise void. An action for the reversion of such land, based on the nullity of the patent and title, is an action filed by the State in its sovereign capacity to recover its own property, and thus imprescriptible. The State’s right to bring such an action is never lost by laches. Therefore, the complaint for reversion was timely filed regardless of the eleven-year lapse from the patent’s issuance.