REPUBLIC OF THE PHILIPPINES, petitioner, vs. GREGORIO AGUNOY, SR.

, Et
al., SPOUSES EDUARDO and ARCELITA MARQUEZ and RURAL BANK OF
GAPAN, NUEVA ECIJA, respondents.

Facts:
1. On May 26, 1958, Gregorio Agunoy, Sr. filed an application for Free Patent covering
two parcels of land identified as Lots # 1341 and 1342; with an agregate area of 186486,
located at sta. Rosa, Nuevacijia.

2. On February 6, 1967, the RD of Nueva Ecija registered Free Patent No. 314450 and
issued the corresponding OCT No.P-4522 in the name of Gregorio Agonoy

3. On March 10, 1967, heirs of Eusebio Perez represented by Francisca Perez caused an
annotation on OCT P-4522 of an adverse claim in their favor over 15,153 hectars of the
property. Thereafter a formal protest and claim as filed with the Bureau of Lands was
filled alleging that the land covered by OCT P-4522 had been adjudicated as private land
On May 3, 1976, Bureau of Lands, after investigation, ascertained that Free Patent and
corresponding OCT were improperly and fraudulently issued.

4. However after the death of Gregorio Agunoy, Sr., the heirs executed extrajudicial
partition with sale in favor Joaquin Sangabol in whose favor TCT NT-166271 was
issued.
Thereafter Sangabol sold three hectares of the property to Fortunato Para.
Para, the following day, sold the same the property to Verginia Jimenez.
The remaining portion of the property owned by Joaquin Sangabol was subdivided and
was mortgaged to Rural Bank but was however foreclosed and sold to public auction

5. On january 5, 1988, Ruperto Perez filled a supplemental protest alledging that the
subject parcel of lands have been occupied and cultivated by them and that Gregorio
Agunoy never occuppied nor cultivated the same. That the Free Patent and OCT issued
to them was obtained through fraud and misrepresentation.

6. Republic of the Philippines thru the SolicitorGeneral filed a case before the RTC of
Gapan Nueva Ecijia against respondents Gregorio Agunoy, Sr., his children, the spouses
Dee and the Rural Bank praying for that all those claiming ownership and/or possession
to desist from doing so.

7. RTC ruled in favor of Republic

8. Sps. Dee appealed to CA

CA Reversed and Set Aside RTC Decision

Issue:
Whether or not CA was correct in declaring the sale to Sps Dee valid?

Ruling:
YES.
1. Republic is not the real party in interest.
At the time the complaint before the Bureau was filed the said land was already classified as
private property and not public land which divest the petitioner personality and jurisdiction.
2.Titles acquired for value and in good faith is valid under the principle of the doctrine
of fraus et jus nunquam cohabitant, which basically means that no one may enjoy the
fruits of fraud, and the other, the doctrine that a fraudulent title may be the root of valid
title in the name of an innocent buyer for value and in good faith.