G.R. No. 223822 , October 16, 2019
Republic of the Philippines, represented by the Regional Executive Director, Department of Environment and Natural Resources (DENR), Regional Office No. III, Petitioner, v. Tanduay Lumber, Inc., Verbo Realty and Development Corp., Spouses Clemente and Ma. Lourdes Garcia, John Michael H. Artienda, Spouses Teodoro D.G. Chan and Angelita G. Chan, Licerio M. Libunao, Maricris A. Melchor, Maricris C. Armado, Winston T. Capati and the Register of Deeds of Bulacan, Respondents.

FACTS

The Republic, through the DENR Regional Executive Director, filed a Complaint for Cancellation of Title/Reversion. The case originated from Free Patent No. (III-12) 17306 dated May 20, 1987, and the subsequent issuance of Original Certificate of Title (OCT) No. P-22-C on May 25, 1987, in the name of Epifania San Pedro over a parcel of land in Bulacan. After San Pedro’s death, Pelagio Francisco executed an Affidavit of Self-Adjudication and obtained Transfer Certificate of Title (TCT) No. T-7836 on October 25, 1990. On December 3, 1990, Francisco sold the property to respondent Tanduay Lumber, Inc. The property was subsequently subdivided and sold to various respondents. The petitioner’s complaint alleged that the alienation by Pelagio Francisco in favor of Tanduay Lumber violated the five-year prohibition against alienation under Sections 118, 121, and 122 of Commonwealth Act No. 141 (Public Land Act). The Regional Trial Court (RTC) granted the respondents’ special and affirmative defenses and dismissed the complaint on the grounds of equitable estoppel and laches. The RTC denied the petitioner’s motion for reconsideration.

ISSUE

Whether the petitioner’s complaint for reversion and cancellation of titles is barred by estoppel and laches.

RULING

The Supreme Court DENIED the petition for being moot and academic. The Court ruled that the passage of Republic Act No. 11231 (the Agricultural Free Patent Reform Act) had rendered the issue moot. RA 11231, which took effect on March 30, 2019, provides under its Section 3 that agricultural free patents shall be considered as title in fee simple and shall not be subject to any restriction on encumbrance or alienation. Furthermore, Section 4 of the law gives it retroactive effect, lifting any restrictions regarding acquisitions, encumbrances, conveyances, transfers, or dispositions imposed on agricultural free patents issued before the effectivity of the Act. Since the complaint was anchored on the alleged violation of the five-year restriction on alienation under Sections 118, 121, and 122 of CA No. 141 , and RA 11231 has removed such restrictions retroactively, the Government no longer has a legal basis to seek reversion. Consequently, the Complaint for Cancellation of Title/Reversion was DISMISSED for lack of cause of action.