NORTHERN CEMENT CORPORATION, APPLICANT-APPELLEE, VS. REPUBLIC OF THE PHILIPPINES, OPPOSITOR-APPELLANT.

Northern Cement versus Republic of the Philippines

The Case

This is a land registration case. Northern Cement Corporation, the applicant, asked the Regional Trial Court of Urdaneta City, Pangasinan, to confirm and register in its name a parcel of land in Sison, Pangasinan, invoking the Property Registration Decree. The Republic of the Philippines, through the Office of the Solicitor General, opposed the application and later appealed. The case matters because it is the Supreme Court's clearest application of the Malabanan doctrine: land of the public domain, even if declared alienable and disposable, cannot be acquired by prescription until the State expressly declares it patrimonial. It is a staple in examinations on original registration and on the distinction between public dominion and patrimonial property.

Procedural History

On 21 June 2000, Northern Cement filed its application for registration with the Regional Trial Court of Urdaneta City, Pangasinan, Branch 47. The court set the case for initial hearing, and the notice was published in the Official Gazette and in the Philippine Weekly and posted in the municipal building of Sison. The Office of the Solicitor General entered its appearance for the Republic and authorized the Provincial Prosecutor of Pangasinan to appear. After trial, the Regional Trial Court rendered its decision on 6 July 2009, confirming the order of general default and adjudicating the lot in favor of Northern Cement, and ordering the registration of title under the Property Registration Decree. The Republic appealed directly to the Supreme Court, assigning a single error: that the trial court granted the application despite non-compliance with the requirements of the Property Registration Decree.

Facts

Northern Cement, through its manager, applied to register Lot 1331 of the Sison Public Land subdivision, situated in Barangay Labayug, Sison, Pangasinan, with an area of 85,673 square meters. It claimed to be the owner in fee simple, having acquired the land by a Deed of Absolute Sale executed on 28 December 1968 by Rodolfo Chichioco. It alleged that it had occupied the land since then and had paid the realty taxes, and that no other person claimed any interest in it.

At trial, Northern Cement presented its authorized representative, two adjoining lot owners who interposed no objection, and two officers of the Department of Environment and Natural Resources. Their testimony and exhibits showed the approved survey plan, the technical description, the deed of sale, a series of tax declarations running from 1969 to 2003, tax clearances, affidavits of the adjoining owners, and a DENR report dated 11 October 2007 stating that the land is within the alienable and disposable zone as classified under Project Number 63, released and classified on 21 November 1927.

The trial court granted the application, finding that Northern Cement and its predecessor had possessed the land in the concept of absolute owners since time immemorial, or for more than thirty years, tacking their possession. The Republic appealed, arguing that there was insufficient evidence that the land had been declared alienable and disposable, and that in any event there was no competent evidence that it was no longer intended for public use or public service under Article 422 of the Civil Code.

Issues

• Whether or not the application for registration may be granted under Section 14, paragraph 2, of the Property Registration Decree on the ground of acquisitive prescription.
• Whether or not the application may be granted under Section 14, paragraph 1, of the Property Registration Decree on the ground of open, continuous, exclusive and notorious possession since 12 June 1945 or earlier.

Applicable Provisions

Section 14 of the Property Registration Decree provides:

Section 14. Who may apply. The following persons may file in the proper Court of First Instance an application for registration of title to land, whether personally or through their duly authorized representatives: (1) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier. (2) Those who have acquired ownership of private lands by prescription under the provisions of existing laws. (3) Those who have acquired ownership of private lands or abandoned river beds by right of accession or accretion under the existing laws. (4) Those who have acquired ownership of land in any other manner provided for by law.

This is the provision that fixes the two possible bases for the application, prescription under paragraph 2 and possession since 12 June 1945 under paragraph 1, and the Court measures the evidence against both.

Article 1106 of the Civil Code provides:

By prescription, one acquires ownership and other real rights through the lapse of time in the manner and under the conditions laid down by law.

This confirms prescription as a mode of acquiring ownership, which paragraph 2 of Section 14 borrows from the Civil Code.

Article 1113 of the Civil Code provides:

All things which are within the commerce of men are susceptible of prescription, unless otherwise provided. Property of the State or any of its subdivision not patrimonial in character shall not be the object of prescription.

This is the key limitation: property of the State that is not patrimonial cannot be acquired by prescription.

Article 420 of the Civil Code provides:

Art. 420. The following things are property of public dominion: (1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character; (2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth.

This defines what remains public dominion, including State property intended for public service or the development of the national wealth.

Article 421 of the Civil Code provides:

Art. 421. All other property of the State, which is not of the character stated in the preceding article, is patrimonial property.

This identifies patrimonial property as the residue of State property not falling under Article 420.

Article 422 of the Civil Code provides:

Property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State.

This is the provision the Court says controls how public dominion property becomes patrimonial and thus susceptible to prescription.

Ruling

On the first issue, the Court held that the application cannot prosper under Section 14, paragraph 2. The trial court had relied on prescription, treating the land as private land acquired by more than thirty years of possession. But the Court held that a declaration that the land is alienable and disposable does not by itself convert it into patrimonial property. There must also be an express government manifestation that the property is no longer intended for public service or for the development of the national wealth. The Court quoted its ruling in the Malabanan case:

Without such express declaration, the property, even if classified as alienable or disposable, remains property of the public dominion, pursuant to Article 420(2), and thus incapable of acquisition by prescription. It is only when such alienable and disposable lands are expressly declared by the State to be no longer intended for public service or for the development of the national wealth that the period of acquisitive prescription can begin to run. Such declaration shall be in the form of a law duly enacted by Congress or a Presidential Proclamation in cases where the President is duly authorized by law.

The DENR report stating that the land was classified as alienable and disposable on 21 November 1927 was not enough. The Court stressed that matters of land classification cannot be assumed; they call for proof. Absent the express declaration, the thirty-year prescriptive period never began to run.

On the second issue, the Court held that the application must fail even if treated as based on Section 14, paragraph 1. There was no clear, positive and convincing evidence that Northern Cement or its predecessor had been in open, continuous, exclusive and notorious possession of the land since 12 June 1945 or earlier. The earliest tax declaration was issued only in 1969 in the name of Chichioco, and the deed of sale showed only that Northern Cement acquired the land in 1968. At best, it proved possession since 1968, and a mere showing of possession for thirty years or more is not sufficient; possession must be shown to have started on 12 June 1945 or earlier.

Doctrine

First, land of the public domain that is declared alienable and disposable remains public dominion property under Article 420, paragraph 2, of the Civil Code unless the State expressly declares that it is no longer intended for public service or for the development of the national wealth. Second, only when the land has become patrimonial does the prescriptive period begin to run, and that express declaration must take the form of a law enacted by Congress or a Presidential Proclamation issued under authority of law. Third, a mere certification or report classifying land as alienable and disposable is insufficient proof of its patrimonial character. Fourth, under Section 14, paragraph 1, of the Property Registration Decree, possession for thirty years or more is not enough; the applicant must show that possession began on 12 June 1945 or earlier, and tax declarations are only good indicia of possession, not conclusive proof of ownership.

Disposition

The Supreme Court granted the appeal, reversed and set aside the decision of the Regional Trial Court, and denied Northern Cement Corporation's application for registration of title.

Remember This

Memorize the two-step rule: alienable and disposable is not the same as patrimonial, and prescription runs only after an express State declaration that the land is no longer for public use or public service. Examiners use this case to test the Malabanan doctrine and the requirements of Section 14 of the Property Registration Decree.