G.R. No. 198832 , January 13, 2021
Republic of the Philippines, Petitioner, vs. Sps. Virgilio and Anna Ramirez Lontok, Rising Sun Motors Corporation, and the Register of Deeds of Los Baños and Santa Cruz, Laguna, Respondents.

FACTS

On May 30, 1986, respondent Anna R. Lontok was granted Free Patent No. (IV-2) 27332 and issued Original Certificate of Title (OCT) No. P-8554 over a 2,180 sq. meter parcel of land in Victoria, Laguna. On November 11, 1991, she sold a 1,623 sq. meter portion to respondent Rising Sun Motors Corporation, to which TCT No. T-129346 was issued. On January 19, 1994, the heirs of Spouses Juanito Armando and Rizalina Bartolome filed a protest with the DENR, alleging they and their predecessors had been in continuous possession of the land, and that Anna Lontok committed fraud and misrepresentation in her free patent application by falsely claiming compliance with cultivation and residence requirements. After investigation, the DENR recommended cancellation of the patent and title. Consequently, on July 17, 1998, the Republic, through the OSG, filed a Complaint for Annulment of Patent and Cancellation of Title against the respondents, praying for the declaration of nullity of the patent and titles and reversion of the land to the public domain. The Regional Trial Court (RTC) dismissed the complaint for failure to state a cause of action, ruling that based on the DENR findings, the property was private land, making an action for reversion improper. The Court of Appeals affirmed the RTC decision, noting the Republic’s assertion in its brief that the property was private in nature.

ISSUE

Whether the Court of Appeals erred in affirming the dismissal of the Republic’s complaint for annulment of patent and cancellation of title on the ground of failure to state a cause of action.

RULING

Yes. The Supreme Court granted the petition, set aside the CA decision, and remanded the case to the RTC. The Court ruled that while an action for reversion under Section 101 of the Public Land Act is proper only when the land is proven to be part of the public domain, a separate and distinct cause of action exists under Section 91 of the same Act for the cancellation of a free patent and certificate of title obtained through fraud or misrepresentation, regardless of whether the land is public or private. The allegations in the Republic’s complaint—specifically, that Anna Lontok committed fraud in her free patent application by falsely stating possession and compliance with requirements—sufficiently stated a cause of action under Section 91. The fact that the land may be private and reversion is not available does not extinguish the State’s cause of action to cancel the patent and titles on the ground of fraud. The State has a substantive right and a standing to sue to maintain the integrity of the land registration process. Therefore, the lower courts erred in dismissing the complaint merely because the prayer for reversion could not be sustained. The case was remanded to the RTC to determine whether the patent and titles are null and void due to fraud.