FACTS:

This case involves a petition for review filed by the petitioners, Lucio Robles, Emeteria Robles, Aludia Robles, and Emilio Robles, against the decision and resolution of the Court of Appeals. The case originated from a complaint for quieting of title filed before the Regional Trial Court of Morong, Rizal. The trial court declared the free patent title issued by the Bureau of Lands as null and void and ordered the Santos spouses, defendants in the case, to deliver the property to the plaintiffs. The trial court also declared the heirs of Silvino Robles as the absolute owners of the land in question. The factual background of the case includes the original ownership of the land by Leon Robles, the inheritance of the land by Silvino Robles, the cancellation of the tax declaration, the transfer to Exequiel Ballena, and the eventual transfer to the defendants, Hilario Robles and Andrea Robles. The defendants took possession of the property and secured a free patent in their names.

The Santos spouses filed a complaint seeking the nullification of the free patent, the deed of sale, and the tax declarations in favor of the defendants. They argued that the encumbrance on their half-brother and all subsequent proceedings were null and void. They requested a preliminary mandatory injunction to restore them to possession of the land and for the defendants to pay attorney's fees. The trial court found that the real estate mortgage allegedly executed by Hilario Robles was invalid due to forgery, leading to the invalidity of the foreclosure proceedings and the transfer of rights to the Santos spouses. The trial court also determined that the land had been held in the concept of owner by Leon Robles and subsequently occupied by the plaintiffs until they were ousted by the defendants. Based on the possession for the required period of 30 years, the court ruled that the land had become private property, rendering the issuance of the free patent invalid.

The Santos spouses and the defendant Rural Bank appealed the trial court's decision. The Court of Appeals reversed the ruling, stating that the plaintiffs no longer had any title to the property at the time they filed the complaint. The court cited subsequent declarations for taxation purposes as evidence of transfers and noted that the plaintiffs' half-brother's possession could be seen as repudiation of co-ownership. The Santos spouses and the defendant Rural Bank filed a notice of appeal from the Court of Appeals' decision.

The petitioners, Lucio, Emeteria, Aludia, and Emilio Robles, filed a petition for review with the Court of Appeals. They argued that the court erred in ruling that they lost their title to the land through prescription, claiming that they had been in open, actual, and adverse possession of the land since 1916 until they were forced to leave in 1988. They asserted that the transfers of the tax declaration did not invalidate their title and argued against the respondents' claim of ownership through prescription. They sought a reversal of the decision and the reinstatement of their title to the land.

The case involves an action to quiet title filed by the plaintiff to remove a cloud on their title to real property. The plaintiff alleges that there is a deed, claim, encumbrance, or proceeding that is casting a cloud on their title, which is invalid or inoperative. The plaintiff seeks to have this cloud removed and establish their clear and unencumbered ownership of the property.

ISSUES:

1. Whether the petitioners have the appropriate title to avail themselves of the remedy of quieting of title.

2. Whether there were irregularities in the transactions involving the disputed property.

3. Whether Hilario's mortgage of the disputed property divested the petitioners of title to the property.

4. Whether the real estate mortgage between Hilario and the Rural Bank of Cardona is valid.

5. Whether the free patent grant to the Santos spouses is valid and effective.

6. Whether the subject property is private land.

7. Whether the director of lands had the authority to issue a free patent for the subject property.

8. Whether or not the petitioners have the requisite personality to question the free patent granted to the registered owners.

9. Whether or not the cancellation of the free patent would revert the property to the government.

10. Whether or not the petitioners' claim for nullification of the free patent is valid.

11. Whether the real estate mortgage contract covering the disputed property is valid.

12. Whether the sale of the subject property to the Santos spouses is valid.

13. Whether Free Patent No. IV-1-010021 issued by the Bureau of Lands covering the subject property is valid.

RULING:

1. The Court of Appeals erred in ruling that the petitioners have lost their title to the property by prescription. An action to quiet title is a remedy for the removal of any cloud or doubt on the title to real property. To avail themselves of this remedy, the petitioners must have a legal or equitable title to the property and the deed or claim alleged to be a cloud on their title must be shown to be invalid or inoperative. In this case, the petitioners allege that their title to the property is clouded by the tax declaration and the free patent granted to the Santos spouses. The court has to determine whether the petitioners have the appropriate title.

2. The Court of Appeals failed to consider irregularities in the transactions involving the disputed property. There are questions regarding the transfer of the property from the heirs of Silvino to Exequiel Ballena, the sale of the property to Hilario and Andrea Robles, and the mortgage and foreclosure of the property by the Rural Bank of Cardona. These irregularities cast doubt on the validity of the transactions and the titles issued to subsequent owners. The court has to consider these irregularities in determining the true title to the property.

3. The Supreme Court held that Hilario's mortgage of the disputed property did not divest the petitioners of title. Hilario did not clearly and evidently repudiate the co-ownership, as he did not have possession of the property and did not exclude the petitioners from using and enjoying it. His act of entering into a mortgage contract and paying land taxes in his name were not sufficient to constitute repudiation of co-ownership. The petitioners, therefore, retained their title to the property at the time the complaint for quieting of title was filed.

4. The Supreme Court declared the real estate mortgage between Hilario and the Rural Bank of Cardona as void. The bank failed to exercise due diligence in ascertaining the true owners and possessors of the property. The bank should not have relied solely on the deed of sale and should have made more effort to fully determine the title of the property. The bank, therefore, acted in bad faith, and as a result, the mortgage was invalidated.

5. The Supreme Court did not explicitly rule on the validity and efficacy of the free patent grant to the Santos spouses. The issue was not directly addressed in the partial digest provided.

6. The Court held that the petitioners, based on their open, continuous, exclusive, and notorious possession and occupation of the land, are deemed to have acquired the right to a grant of the land without the need for a certificate of title. The land is deemed to have been segregated from the public domain and is considered private land. The petitioners' claim of private ownership is supported by their testimonies and tax declarations which were not controverted by the other parties.

7. The Court ruled that the director of lands had no authority to issue a free patent for the subject property in favor of another person. The land was already under private ownership and no longer a part of the lands of the public domain. A free patent covering private land is considered null and void.

8. The private respondents are not the proper parties to initiate the present suit. Only the government, represented by the solicitor general, is entitled to seek the cancellation of a free patent. However, in this case, the petitioners have asserted and proved private ownership over the disputed land, thus they have the requisite personality to question the free patent granted to the registered owners.

9. The present case does not call for the reversion of the disputed property to the State. The petitioners are claiming the property, which they contend rightfully belongs to them. They are not seeking the reversion of the land to the government under the Regalian Doctrine.

10. The free patent granted to the registered owners is void. The petitioners have shown open, continued, and exclusive possession of the disputed land since 1916, which gives them a cause of action for quieting of title. The petitioners' possession, cultivation, and occupation of the land for over thirty years have transformed it into private land, beyond the authority of the director of lands.

11. The real estate mortgage contract is declared null and void insofar as it prejudiced the shares of Petitioners Lucio, Emerita, Aludia, and Emilio Robles. However, it is valid as to Hilario Robles' share.

12. The sale of the subject property to the Santos spouses is valid insofar as it pertained to Hilario Robles' share only.

13. Free Patent No. IV-1-010021 issued by the Bureau of Lands covering the subject property is declared null and void.

PRINCIPLES:

• An action to quiet title is a remedy for the removal of any cloud or doubt on the title to real property.

• To avail themselves of the remedy of quieting of title, the plaintiff must have a legal or equitable title to the property.

• The deed or claim alleged to be a cloud on the plaintiff's title must be shown to be invalid or inoperative despite its prima facie appearance of validity or legal efficacy.

• Irregularities in transactions involving the property may cast doubt on the validity of the titles issued to subsequent owners.

• A co-owner cannot acquire by prescription the share of other co-owners without clear repudiation of co-ownership. The requisites for prescription to occur in favor of a co-owner are: (1) unequivocal acts of repudiation amounting to an ouster of the other co-owners; (2) such acts are made known to the other co-owners; and (3) the evidence is clear and convincing.

• In a real estate mortgage, it is essential that the mortgagor be the absolute owner of the property. If the mortgagor is not the absolute owner, the mortgage is void.

• Banks should exercise more care and prudence in dealing with registered lands, as their business involves public interest and holding money in trust for depositors. Banks cannot rely solely on the certificate of title and should take extra measures to ascertain the true title of the property. Banks are held to a higher standard than private individuals in land transactions.

• The protective mantle of the land registration statute is extended to purchasers for value and in good faith, as well as mortgagees of the same character and description.

• The continued occupation and enjoyment of the disputed property by the petitioners as owners contradict the assertion that the declaration of ownership was tantamount to repudiation.

• Open, continuous, exclusive, and notorious possession and occupation of land can give rise to the acquisition of private ownership without the need for a certificate of title.

• The director of lands has no authority to issue a free patent for land that has already passed to private ownership. A free patent covering private land is null and void.

• Actions to nullify free patents should be filed by the Office of the Solicitor General at the behest of the Director of Lands.

• Only the government, represented by the solicitor general, is entitled to seek the cancellation of a free patent.

• A free patent issued over private land is null and void and produces no legal effect.

• Open, peaceful, continuous, and adverse possession of land for a certain period may give rise to a cause of action for quieting of title.

• Laches is a remedy in equity, and courts may consider the conduct of both parties in determining the application of laches.

• Real estate mortgage contracts can be declared null and void if they prejudice the rightful shares of other parties involved.

• The validity of a sale of a property may depend on the shares and rights of the parties involved.

• Free patents issued by the Bureau of Lands can be declared null and void if there are legal issues pertaining to the subject property.