SECOND DIVISION

LUIS B. MANESE, ANTONIA ELLA, HEIRS OF ROSARIO M. ORDOñEZ, represented by CESAR ORDOñEZ, SESINANDO PINEDA and AURORA CASTRO, Petitioners, - versus - SPOUSES DIOSCORO VELASCO and GLICERIA SULIT, MILDRED CHRISTINE L. FLORES TANTOCO and SYLVIA L. FLORES, Respondents.

G.R. No. 164024 Present: Quisumbing, Acting C.J., Chairperson, CORONA,* Carpio Morales, Tinga, and CHICO-NAZARIO,** JJ. Promulgated: January 29, 2009

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DECISION

QUISUMBING, J.:

For review on certiorari are the Decision[1] dated April 28, 2004 and the Resolution[2] dated June 22, 2004 of the Court of Appeals in CA-G.R. CV No. 68934. The appellate court had affirmed the Order[3] dated June 15, 2000 of the Regional Trial Court (RTC) of Lucena City, Branch 59, in Civil Case No. 99-129, dismissing the petitioners’ complaint for annulment of title and damages against the respondents.

The subject matter of the controversy is the alleged foreshore land with an area of about 85,521 square meters, fronting Tayabas Bay in Guisguis, Sariaya, Quezon.[4]

On October 13, 1971, respondent Dioscoro Velasco was issued Original Certificate of Title No. P-16783[5] covering said property by the Register of Deeds of Quezon Province, based on Homestead Patent No. 133300. On March 22, 1977, Velasco sold the property to respondent Sylvia Flores, and Transfer Certificate of Title (TCT) No. T-160923[6] was issued in her name. On January 4, 1981, the property was sold by Flores to Mildred Christine Flores-Tantoco and TCT No. T-177735[7] was issued in the latter’s name. Later, the property was divided into seven lots and TCT Nos. T-177777, T-177778, T-177779, T-177780, T-177781, T-177782, and T-177783 were issued in the name of Mildred Christine Flores-Tantoco. On January 18, 1992, the lots covered by TCT Nos. T-177780[8] and T-177781[9] were sold back to Flores such that TCT No. T-278112[10] and TCT No. 278110[11] were issued in her name.

Adjacent and contiguous to the alleged foreshore land is the agricultural land owned by petitioners.

On August 31, 1999, the petitioners filed a Complaint[12] for Annulment of Title and Damages against respondents before the RTC of Lucena City. They alleged that the issuance of the homestead patent and the series of transfers involving the same property were null and void. They further alleged that they applied for lease of the foreshore land and the government had approved in their favor Foreshore, Reclaimed Land or Miscellaneous Lease Application. Petitioners claimed that they were in open, continuous, exclusive and notorious possession and use of said foreshore land since 1961. They stated that they had introduced improvements thereon and planted coconut seedlings (which had grown up into coconut trees) as well as other fruit-bearing trees and plants. They added that they had subleased the land to several tenants.

Petitioners averred that Dioscoro Velasco was not qualified to become a grantee of a homestead patent since he never occupied any portion nor introduced any improvements on the land. They claimed that Velasco was issued a homestead patent because he committed fraud, misrepresentation, and falsification in connivance with employees of the Bureau of Lands. They argued that the sale between Velasco and Flores was invalid because it was not approved by the Secretary of Agriculture and Natural Resources as required under Commonwealth Act No. 141, otherwise known as “The Public Land Act.”[13] Hence, they claimed that the sale by Flores to Tantoco was likewise invalid.

On December 2, 1999, respondents moved to dismiss[14] the complaint on the following grounds: (1) petitioners do not have the legal personality to file the complaint since the property forms part of the public domain and only the Solicitor General could bring an action for reversion or any action which may have the effect of canceling a free patent and the corresponding certificate of title issued on the basis of the patent; (2) the sale of the property by Velasco to Flores is valid even without approval of the Secretary of Agriculture and Natural Resources as the required approval may be obtained after the sale had been consummated; (3) the certificate of title issued to Velasco can no longer be reviewed on the ground of fraud since a homestead patent registered in conformity with the provisions of Act No. 496[15] partakes of the nature of a certificate issued in a judicial proceeding and becomes indefeasible and incontrovertible upon the expiration of one year from its issuance; and (4) petitioners’ action is barred by laches since for almost 28 years, they failed to assert their alleged right over said property.

On June 15, 2000, the RTC granted the Motion to Dismiss and ruled that petitioners do not have the legal personality to file the complaint. It held that the government, not petitioners, is the real party in interest and, therefore, only the Solicitor General may bring the action in court. The dispositive portion of the RTC’s Order states:

WHEREFORE, the instant Motion is granted and the plaintiffs[’] complaint dismissed.

SO ORDERED.[16]

The Court of Appeals affirmed the RTC’s Order, disposing as follows:

WHEREFORE, premises considered, the appeal is DISMISSED for lack of merit. The Order dated June 15, 2000 of the Regional Trial Court (RTC), Branch 59, Lucena City dismissing plaintiffs-appellants’ complaint for annulment of title with damages is AFFIRMED and UPHELD.

SO ORDERED.[17]

Hence, this petition.

Petitioners raise the following issue for our resolution:

[WHETHER OR NOT] THE COURT OF APPEALS ERRED IN DISMISSING THE APPEAL AND IN AFFIRMING AND UPHOLDING THE ORDER OF DISMISSAL OF THE REGIONAL TRIAL COURT OF LUCENA, BRANCH 59 THAT THE PETITIONERS DO NOT HAVE THE LEGAL PERSONALITY TO INSTITUTE THE COMPLAINT FOR CANCELLATION OF OCT NO. P-16789 ISSUED PURSUANT TO HOMESTEAD PATENT NO. 133300 IN THE NAME OF DIOSCORO VELASCO AND THE TRANSFER CERTIFICATES OF TITLES SUBSEQUENTLY ISSUED IN FAVOR OF S[Y]LVIA L. FLORES AND MILDRED CHRISTINE FLORES-TANTOCO.[18]

Stated simply, the sole issue in this case is whether or not petitioners are real parties in interest with authority to file a complaint for annulment of title of foreshore land.

Petitioners concede that under Section 101 of Commonwealth Act No. 141,[19] only the Solicitor General or the officer acting in his stead may institute all actions for reversion in the proper courts. However, they invoke the principle of equity, arguing that equity and social justice demand that they be deemed real parties in interest and given a right to present evidence showing that the land titles of respondents are void.[20] Respondents, on the other hand, reiterate that petitioners are not real parties in interest because they do not represent the State.[21]

After due consideration of the submissions and arguments of the parties, we are in agreement that the instant petition lacks merit.

Section 2, Rule 3 of the 1997 Rules of Civil Procedure provides:

SEC. 2. Parties in interest. - A real party in interest is the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or these Rules, every action must be prosecuted or defended in the name of the real party in interest. (Emphasis supplied.)

It is admitted by both parties that the subject matter of controversy is foreshore land, which is defined as that strip of land that lies between the high and low water marks and is alternatively wet and dry according to the flow of the tides. It is that part of the land adjacent to the sea, which is alternately covered and left dry by the ordinary flow of tides. It is part of the alienable land of the public domain and may be disposed of only by lease and not otherwise. Foreshore land remains part of the public domain and is outside the commerce of man. It is not capable of private appropriation.[22]

Section 101 of Commonwealth Act No. 141 provides:

All actions for the reversion to the Government of lands of the public domain or improvements thereon shall be instituted by the Solicitor General or the officer acting in his stead, in the proper courts, in the name of the Republic of the Philippines.

In all actions for the reversion to the Government of lands of the public domain or improvements thereon, the Republic of the Philippines is the real party in interest. The action shall be instituted by the Solicitor General or the officer acting in his stead, in behalf of the Republic of the Philippines.[23] Moreover, such action does not prescribe. Prescription and laches will not bar actions filed by the State to recover its property acquired through fraud by private individuals.[24]

Based on the foregoing, we rule that petitioners are not the real parties in interest in this case. We therefore affirm the dismissal by the trial court of the complaint and the ruling of the Court of Appeals that petitioners must first lodge their complaint with the Bureau of Lands in order that an administrative investigation may be conducted under Section 91[25] of The Public Land Act.

As to petitioners’ contention that they should be deemed real parties in interest based on the principle of equity, we rule otherwise. Equity, which has been aptly described as “justice outside legality,” is applied only in the absence of, and never against, statutory law or judicial rules of procedure. Positive rules prevail over all abstract arguments based on equity contra legem.[26]

WHEREFORE, the petition is DENIED. The assailed Decision dated April 28, 2004 and the Resolution dated June 22, 2004 of the Court of Appeals in CA-G.R. CV No. 68934 are AFFIRMED.

Costs against petitioners.

SO ORDERED.

LEONARDO A. QUISUMBING

Acting Chief Justice

WE CONCUR:

CONCHITA CARPIO MORALES Associate Justice
DANTE O. TINGA Associate Justice	RENATO C. CORONA Associate Justice
MINITA V. CHICO-NAZARIO Associate Justice

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

LEONARDO A. QUISUMBING

Acting Chief Justice

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* Additional member in lieu of Associate Justice Presbitero J. Velasco, Jr. who is abroad on official business.

** Additional member in lieu of Associate Justice Arturo D. Brion who is on leave.

[1] Rollo, pp. 37-42. Penned by Associate Justice Sergio L. Pestaño, with Associate Justices Roberto A. Barrios and Vicente Q. Roxas concurring.

[2] Id. at 44. Penned by Associate Justice Vicente Q. Roxas, with Associate Justices Roberto A. Barrios and Aurora S. Lagman concurring.

[3] Id. at 45-50.

[4] Id. at 37.

[5] Records, pp. 11-12.

[6] Id. at 14.

[7] Id. at 17.

[8] Id. at 18.

[9] Id. at 19.

[10] Id. at 22.

[11] Id. at 23.

[12] Id. at 1-10.

[13] An Act to Amend and Compile the Laws Relative to Lands of the Public Domain, approved on November 7, 1936.

[14] Records, pp. 35-37.

[15] An Act to Provide for the Adjudication and Registration of Titles to Lands in the Philippine Islands, enacted on November 6, 1902 and took effect on January 1, 1903.

[16] Rollo, p. 49.

[17] Id. at 42.

[18] Id. at 103.

[19] SEC. 101. All actions for the reversion to the Government of lands of the public domain or improvements thereon shall be instituted by the Solicitor General or the officer acting in his stead, in the proper courts, in the name of the Republic of the Philippines.

[20] Rollo, p. 31.

[21] Id. at 118.

[22] Republic v. Court of Appeals, G.R. No. 126316, June 25, 2004, 432 SCRA 593, 598-599.

[23] Ortigas & Company, Limited Partnership v. Ruiz, No. L-33952, March 9, 1987, 148 SCRA 326, 339-340, citing The Director of Lands v. Lim, et al., 91 Phil. 912 (1952).

[24] Republic v. Heirs of Felipe Alejaga, Sr., G.R. No. 146030, December 3, 2002, 393 SCRA 361, 374.

[25] SEC. 91. The statements made in the application shall be considered as essential conditions and parts of any concession, title, or permit issued on the basis of such application, and any false statement therein or omission of facts altering, changing, or modifying the consideration of the facts set forth in such statements, and any subsequent modification, alteration, or change of the material facts set forth in the application shall ipso facto produce the cancellation of the concession, title, or permit granted. It shall be the duty of the Director of Lands, from time to time and whenever he may deem it advisable, to make the necessary investigations for the purpose of ascertaining whether the material facts set out in the application are true, or whether they continue to exist and are maintained and preserved in good faith, and for the purposes of such investigation, the Director of Lands is hereby empowered to issue subpoenas and subpoenas duces tecum and, if necessary, to obtain compulsory process from the courts. In every investigation made in accordance with this section, the existence of bad faith, fraud, concealment, or fraudulent and illegal modification of essential facts shall be presumed if the grantee or possessor of the land shall refuse or fail to obey a subpoena or subpoena duces tecum lawfully issued by the Director of Lands or his authorized delegates or agents, or shall refuse or fail to give direct and specific answers to pertinent questions, and on the basis of such presumption, an order of cancellation may issue out further proceedings.

[26] Republic v. Court of Appeals, G.R. No. 100709, November 14, 1997, 281 SCRA 639, 649, citing Causapin v. Court of Appeals, G.R. No. 107432, July 4, 1994, 233 SCRA 615, 625; Zabat, Jr. v. Court of Appeals, No. L-36958, July 10, 1986, 142 SCRA 587, 591.