The Supreme Court held that Regional Trial Courts (RTC) lack jurisdiction over actions to quiet title involving unregistered public lands. This authority rests solely with the Director of Lands. This means that if a land dispute involves property that is both unregistered and part of the public domain, the RTC cannot make a determination on the issue. Instead, the Director of Lands is the proper authority to resolve disputes regarding ownership and disposition of such lands. This decision reinforces the principle that the government, through its designated agencies, maintains control over the administration and disposition of public lands. This ensures that claims over such lands are processed and validated through the appropriate administrative channels.

Baguio Land Dispute: When Does a Court Have Authority?

The case of Bilag v. Ay-Ay arose from a land dispute in Baguio City. The respondents, Estela Ay-Ay, et al., filed a complaint to quiet title against the petitioners, Bernadette S. Bilag, et al., asserting ownership over portions of a parcel of land they claimed to have purchased from Iloc Bilag, the petitioners’ predecessor-in-interest. The respondents alleged that Iloc Bilag sold them portions of a 159,496-square meter parcel of land in Baguio City and that they had been in continuous possession since 1976. The petitioners, however, argued that the subject lands were untitled, unregistered, and part of the Baguio Townsite Reservation, classifying them as lands of the public domain. Thus, the central legal question revolved around whether the RTC had jurisdiction to hear a case involving unregistered public lands, or if that authority belonged to the Land Management Bureau.

The petitioners raised several grounds for dismissal before the RTC, including lack of jurisdiction, prescription/laches/estoppel, and res judicata. They argued that since the subject lands were unregistered public lands, the RTC lacked jurisdiction, as the Land Management Bureau is the entity with the authority to determine ownership issues over such lands. They also contended that the respondents’ action was barred by prescription and/or laches because they sought to enforce the Deeds of Sale more than 27 years after their execution. The petitioners further argued that a prior case, Civil Case No. 3934-R, which involved the same parties and properties, had already been dismissed for lack of merit, making the current action barred by res judicata. The RTC sided with the petitioners, dismissing the case based on lack of jurisdiction, failure to perfect title, and res judicata. However, the Court of Appeals (CA) reversed this decision, remanding the case for trial, which prompted the petitioners to elevate the matter to the Supreme Court.

The Supreme Court focused primarily on the issue of jurisdiction, underscoring its fundamental importance. The Court reiterated the definition of jurisdiction as the power and authority of a court to hear, try, and decide a case. Quoting Mitsubishi Motors Philippines Corporation v. Bureau of Customs, the Court emphasized that, “[i]n order for the court or an adjudicative body to have authority to dispose of the case on the merits, it must acquire, among others, jurisdiction over the subject matter.” It is axiomatic that jurisdiction over the subject matter is conferred by law and not by the consent of the parties.

The Court noted the factual backdrop that the subject lands were part of the Baguio Townsite Reservation. The Court emphasized that the subject lands form part of a 159,496-square meter parcel of land designated by the Bureau of Lands as Approved Plan No. 544367, Psu 189147 situated at Sitio Benin, Baguio City. It further stated that such parcel of land forms part of the Baguio Townsite Reservation, a portion of which, or 146, 428 square meters, was awarded to Iloc Bilag due to the reopening of Civil Reservation Case No. 1, GLRO Record No. 211, as evidenced by a Decision dated April 22, 1968 promulgated by the then-Court of First Instance of Baguio City.

Citing Presidential Decree No. (PD) 1271, the Court pointed out the legal precedent declaring all orders and decisions related to the reopening of Civil Reservation Case No. 1, covering lands within the Baguio Townsite Reservation, as null and void. PD 1271 provided a means to validate ownership but required a Certificate of Title to be issued on or before July 31, 1973. Because the records indicated that the subject lands were unregistered and untitled, the Court concluded that the award to Iloc Bilag was covered by the nullification under PD 1271. As a result, the Supreme Court determined that the lands should be classified as lands of the public domain. Thus, the classification of the land as public domain was crucial to the determination of which entity, the RTC or the Director of Lands, had proper jurisdiction.

The Supreme Court determined that the Director of Lands, not the RTC, possessed the authority to award ownership of the disputed land. Citing Heirs of Pocdo v. Avila, the Court reiterated that the trial court correctly dismissed an action to quiet title due to lack of jurisdiction, as it lacked the authority to determine who had a better right over property that was still part of the public domain within the Baguio Townsite Reservation. The Court quoted the ruling that “lands within the Baguio Townsite Reservation belong to the public domain and are no longer registrable under the Land Registration Act.” The Court added that “[t]he Office of the President ordered the disposition of the disputed property in accordance with the applicable rules of procedure for the disposition of alienable public lands within the Baguio Townsite Reservation, particularly Chapter X of Commonwealth Act No. 141 on Townsite Reservations and other applicable rules.” Commonwealth Act No. 141, also known as the Public Land Act, governs the administration and disposition of public lands.

The Supreme Court then explained the requirements for an action to quiet title, stating that “[i]n an action for quieting of title, the complainant is seeking for ‘an adjudication that a claim of title or interest in property adverse to the claimant is invalid, to free him from the danger of hostile claim, and to remove a cloud upon or quiet title to land where stale or unenforceable claims or demands exist.’” It further specified that, under Articles 476 and 477 of the Civil Code, the two indispensable requisites in an action to quiet title are: (1) that the plaintiff has a legal or equitable title to or interest in the real property subject of the action; and (2) that there is a cloud on his title by reason of any instrument, record, deed, claim, encumbrance or proceeding, which must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity.

Because the respondents did not possess legal or equitable title over the land, the Court found that the RTC lacked jurisdiction to hear the case. The Court stated that “[h]aving established that the disputed property is public land, the trial court was therefore correct in dismissing the complaint to quiet title for lack of jurisdiction. The trial court had no jurisdiction to determine who among the parties have better right over the disputed property which is admittedly still part of the public domain.”

The implications of this ruling are significant, particularly for land disputes involving unregistered properties within areas like the Baguio Townsite Reservation. The decision confirms the limited role of the RTC in disputes over public lands. Individuals and entities seeking to assert rights over unregistered public lands must pursue their claims through the appropriate administrative channels under the jurisdiction of the Director of Lands. This process typically involves demonstrating a valid basis for a claim, such as continuous possession, improvements made on the land, or other factors that would warrant the grant of ownership or other rights.

FAQs

What was the key issue in this case?	The key issue was whether the Regional Trial Court (RTC) had jurisdiction to hear a case involving unregistered public lands within the Baguio Townsite Reservation.
What did the Supreme Court decide?	The Supreme Court decided that the RTC lacked jurisdiction because the land was unregistered public land, and authority rests with the Director of Lands.
What is the Baguio Townsite Reservation?	The Baguio Townsite Reservation is an area in Baguio City where land ownership has been historically complex, often involving disputes over public versus private claims.
What is Presidential Decree (PD) 1271?	PD 1271 nullified decrees of registration and certificates of title covering lands within the Baguio Townsite Reservation, subject to certain conditions for validating titles issued before July 31, 1973.
What is an action to quiet title?	An action to quiet title is a legal proceeding to remove any cloud, doubt, or uncertainty over the title to real property.
What are the requirements for an action to quiet title?	The plaintiff must have legal or equitable title to the property, and there must be a cloud on their title due to an instrument, record, deed, claim, or proceeding that appears valid but is invalid.
Who has the authority to dispose of public lands?	The Director of Lands, subject to the control of the Secretary of Environment and Natural Resources, has the authority to manage and dispose of public lands.
What happens if a court makes a decision without jurisdiction?	A judgment rendered by a court without jurisdiction is null and void, creating no rights and producing no legal effect.

The Supreme Court’s decision in Bilag v. Ay-Ay underscores the importance of understanding jurisdictional boundaries in land disputes, especially concerning public lands. It highlights that the Director of Lands, not the RTC, holds the authority to resolve ownership issues related to unregistered public lands, reinforcing the government’s role in managing and disposing of such lands. This ruling sets a clear precedent for similar cases, ensuring that claims over public lands are processed through the appropriate administrative channels, protecting the integrity of land administration and promoting equitable access to land resources.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Bernadette S. Bilag, et al. vs. Estela Ay-Ay, et al., G.R. No. 189950, April 24, 2017