CASE NO.

51

FIRST DIVISION
[G.R. No. 170375. July 7, 2010.]
REPUBLIC OF THE PHILIPPINES, petitioner, vs. HON. MAMINDIARA P. MANGOTARA,
in his capacity as Presiding Judge of the Regional Trial Court, Branch 1, Iligan City,
Lanao del Norte, and MARIA CRISTINA FERTILIZER CORPORATION,
and the PHILIPPINE NATIONAL BANK, respondents
LEONARDO-DE CASTRO, J p:

TOPIC: OBJECTS OF EXPROPRIATION

DOCTRINE/PRINCIPLES:
Presidential Proclamation No. 2239 explicitly states that the parcels of land reserved to NSC
are part of the public domain, hence, owned by the Republic [exception to private property]. Letter of
Instructions No. 1277 recognized only the occupancy rights of MCFC and directed NSC to institute
expropriation proceedings to determine the just compensation for said occupancy rights. Therefore,
the owner of the property is not an indispensable party in the original Complaint for Expropriation.

FACTS:
 The case involves seven consolidated Petitions for Review on Certiorari and a Petition for Certiorari
under Rules 45 and 65 of the Rules of Court, respectively, arising from actions for quieting of title,
expropriation, ejectment, and reversion, which all involve the same parcels of land.
 The Complaint for Expropriation was originally filed by the Iron and Steel Authority (ISA), now the
NSC, against Maria Cristina Fertilizer Corporation (MCFC), and the latter’s mortgagee, the Philippine
National Bank (PNB).
 President Ferdinand E. Marcos issued Presidential Proclamation No. 2239, reserving in favor of ISA
a parcel of land in Iligan City. MCFC occupied certain portions of this parcel of land. When
negotiations with MCFC failed, ISA was compelled to file a Complaint for Expropriation.
 The Republic was allowed by the Supreme Court to substitute for ISA when the latter's statutory
existence expired (ISA case), following so the RTC ordered the substitution. The Republic then filed
a Motion for Leave to file a Supplemental Complaint seeking to implead Teofilo Cacho and Demetria
Vidal and their respective successors-in-interest, Landtrade Realty Corporation (LANDTRADE) and
Azimuth International Development Corporation (AZIMUTH), alleging that Lots 1 and 2 involved in
the 1997 Cacho case encroached and overlapped the parcel of land subject of expropriation.
 The Motion was denied due to the Republic's failure to file a Motion for Execution in the substitution
case. The RTC called its Order for substitution an "honest mistake".
 MCFC then filed a Motion to Dismiss the expropriation case for: (1) failure of the Republic to implead
indispensable parties because MCFC insisted it was not the owner of the parcels of land sought to
be expropriated; and (2) forum shopping considering the institution by the Republic of an action for
the reversion of the same parcels subject of the instant case for expropriation.
 Judge Mangotara dismissed the case, stating that Cacho vs. U.S. was conclusive on the question of
ownership of the properties. MCFC as the only defendant was thus not the proper party defendant.
The Republic was also held guilty of forum-shopping for not disclosing the action for reversion.

ISSUE:
Whether the respondent judge gravely erred in ordering the dismissal of the expropriation complaint
in civil case no. 106 considering that:
a) the non-joinder of parties is not a ground for the dismissal of an action pursuant to section 11, rule 3
of the 1997 rules of civil procedure;
b) an expropriation proceeding is an action quasi in rem wherein the fact that the owner of the property
is made a party to the action is not essentially indispensable;
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RULING:
The Court partly granted the case. In G.R. No. 170375 (Expropriation Case), the Court GRANTS the
Petition for Review of the Republic of the Philippines. It REVERSES and SETS ASIDE the Resolutions
dated July 12, 2005 and October 24, 2005 of the Regional Trial Court, Branch 1 of Iligan City, Lanao del
Norte. It further ORDERS the reinstatement of the Complaint in Civil Case No. 106, the admission of the
Supplemental Complaint of the Republic, and the return of the original record of the case to the court of
origin for further proceedings. No costs.

Defendants in an expropriation case are not limited to the owners of the property to be expropriated,
and just compensation is not due to the property owner alone. At the time of the Complaint for Expropriation,
possessory/occupancy rights of MCFC over the properties sought to be expropriated were undisputed. As
such, it MCFC can be named the defendant in the expropriation case.

The RTC also erred when it dismissed the case for having been filed only against MCFC, and not
against the owners. Dismissal is not the remedy for misjoinder or non-joinder of parties, even for
indispensable parties. Only when there is refusal to implead such indispensable party despite the order of
the court should the case be dismissed.

An indispensable party is a party-in-interest without whom no final determination can be had of an

action. The owner of the property is not necessarily an indispensable party in an expropriation case. When
the property already appears to belong to the Republic, there is no sense in the Republic instituting
expropriation proceedings against itself. It can still, however, file a complaint for expropriation against the
private persons occupying the property. In such an expropriation case, the owner of the property is not an
indispensable party.

Expropriation vis-à-vis reversion

The Republic is not engaging in contradictions when it instituted both expropriation and reversion
proceedings for the same parcels of land. The expropriation and reversion proceedings are distinct
remedies that are not necessarily exclusionary of each other.

The filing of a complaint for reversion does not preclude the institution of an action for expropriation.
Even if the land is reverted back to the State, the same may still be subject to expropriation as against the
occupants thereof.

Hence, the filing by the Republic of the Supplemental Complaint for Expropriation impleading Teofilo,
Vidal, LANDTRADE, and AZIMUTH, is not necessarily an admission that the parcels of land sought to be
expropriated are privately owned. At most, the Republic merely acknowledged in its Supplemental
Complaint that there are private persons also claiming ownership of the parcels of land. The Republic can
still consistently assert, in both actions for expropriation and reversion, that the subject parcels of land are
part of the public domain.

ADDITIONAL INFORMATION

The 1914 Cacho Case (Cacho v. Government of the United States)

Facts:
The late Doña Demetria Cacho applied for the registration of two parcels of land, both located in Iligan City.
Lot 1, the smaller parcel, was purchased from Gabriel Salzos, who in turn bought it from Datto Darondon
and his wife Alanga, evidenced by a deed of sale in favor of Salzos signed solely by Alanga, on behalf of
Datto Darondon. Doña Demetria purportedly purchased Lot 2, the larger parcel, from Datto Bunglay. Datto
Bunglay claimed to have inherited Lot 2 from his uncle, Datto Anandog, who died without issue. Only the
Government opposed the registration on the ground that the properties formed part of a military reservation.
 CASE NO. 51

Held:
1) As to Lot 1: The deed held by Doña Demetria is executed only by Alanga, a Moro and wife of Datto
Darondon, which is not permitted either by the Moro laws or the Civil Code of the Philippines at the time.
At the time of application for registration, Datto Darondon is still alive, and thus he must present a deed
renouncing all his rights in the small parcel of land in favor of the applicant, Doña Demetria, before
registration can be admitted.
2) As to Lot 2: The Court found that Datto Bunglay did not have title to the parcel of land as nephew of
Datto Anandog, according to the Civil Code and the "Luwaran Code" of the Moros, which states that the
brothers and sisters of a deceased Moro inherit his property to the exclusion of the more distant relatives.
However, since Datto Anandog's sister, Alanga, appeared as a witness for the applicant Doña Demetria
without having made any claim to the land, she was deemed to have ratified the sale made by her
nephew.
3) Only Lot 2 was granted to Doña Demetria for registration, and the Court also ordered a new survey of
the property excluding all the land not cultivated by Datto Anandog (the "southern part").

The 1997 Cacho Case

Facts:
Teofilo Cacho, claiming to be the late Doña Demetria’s son and sole heir, filed before the RTC a petition for
reconstitution of two original certificates of title (OCTs) over Lots 1 and 2. The petition was opposed by the
Republic, National Steel Corporation (NSC), and the City of Iligan. The RTC granted the petition, but the
CA reversed, because the re-issuance of the decree for Lot 2 could not be made in the absence of the new
survey ordered by this Court in the 1914 Cacho case; the heir of a registered owner may lose his right to
recover possession of the property and title thereto by laches; and Teofilo failed to establish his identity and
existence and that he was a real party-in-interest.

Held:
1) The Court found that the decrees of 1914 had in fact been issued and attained finality. Requiring the
submission of a new plan as a condition for the re-issuance of the decree would render the finality
attained by the Cacho vs. U.S. case nugatory, thus, violating the fundamental rule regarding res judicata.
2) The Court also ruled that laches cannot bar the issuance of a decree. A final decision in land registration
cases can neither be rendered inefficacious by the statute of limitations nor by laches.
3) Finally, the Court was satisfied that Teofilo's identity was sufficiently established, relying on an Affidavit
of Adjudication as Doña Demetria’s sole heir, which he executed before the Philippine Consulate
General in Chicago, U.S. Teofilo also appeared personally before the Vice Consul in Chicago to execute
a Special Power of Attorney in favor of Atty. Godofredo Cabildo (Atty. Cabildo) who represented him in
this case. The Court stressed that the execution of public documents is entitled to the presumption of
regularity and proof is required to assail and controvert the same.
4) Thus, the decrees of registration were re-issued bearing new numbers and OCTs were issued for the
two parcels of land in Doña Demetria’s name.