SAN MIGUEL CORPORATION, PETITIONER, VS. COURT OF APPEALS AND DIRECTOR OF LANDS, RESPONDENTS.

San Miguel Corporation versus Court of Appeals and Director of Lands

The Case

This is a petition for review on certiorari brought by San Miguel Corporation against the Court of Appeals and the Director of Lands. San Miguel asks the Supreme Court to reverse the appellate court's denial of its application to register a small parcel of land in Batangas, which it had bought from a private individual who claimed to have possessed the land since before the war. The case matters because it is the Court's cleanest statement on two recurring bar topics: the weight of tax declarations as proof of ownership, and the strict quantum of evidence required to convert public land into private land by open, continuous, exclusive and notorious possession.

Procedural History

San Miguel filed its application for registration before the then Court of First Instance of Batangas, now the Regional Trial Court. Only the Republic of the Philippines, through the Solicitor General, opposed the application. At the initial and only hearing, the trial court, upon San Miguel's motion and there being no opposition except that of the Republic, issued an order of general default. San Miguel was allowed to mark documentary evidence to establish jurisdictional facts and to present additional evidence before the Clerk of Court, who was appointed commissioner for that purpose. The trial court, presided by Judge Eduardo Abaya, rendered a decision granting the application and adjudicating the property in favor of San Miguel.

The Solicitor General appealed to the Court of Appeals. The appellate court reversed the trial court and declared the parcel of land public land. San Miguel then came to the Supreme Court by petition for review on certiorari, assigning grave errors against the Court of Appeals.

Facts

On December 23, 1975, San Miguel Corporation purchased from Silverio Perez a parcel of land, Lot 684, with an area of 14.531 square meters, located in Sta. Anastacia, Sto. Tomas, Batangas, for the sum of 133,084.80 pesos. On February 21, 1977, claiming ownership in fee simple, San Miguel filed an application for registration of the land under the Land Registration Act.

The Solicitor General opposed, contending that San Miguel's claim of ownership in fee simple on the basis of a Spanish title or grant could no longer be availed of because the six-month period from February 16, 1976 prescribed by Presidential Decree No. 892 had elapsed; that the land was part of the public domain; and that San Miguel, being a private corporation, was disqualified under Section 11, Article XIV of the Constitution from holding alienable lands of the public domain.

To prove possession, San Miguel relied on tax declaration No. 923, showing that in 1974 Silverio Perez declared a riceland of 1.5657 hectares in Sta. Anastacia for taxation purposes, and on a certification of the Office of the Treasurer of Sto. Tomas that in 1977 Perez paid realty taxes. Silverio Perez testified that he had possessed the property since 1933 until he sold it in 1975; that it was given to him by his parents when he married; that no document evidenced that transfer; that his parents had possessed it since 1925; and that he had declared it for taxation and paid the taxes. No other witness corroborated him. San Miguel's only other witness, its lawyer Antonio de las Alas, Jr., testified on the negotiations for the purchase, on the corporation's authority to acquire property, and on its use of the land as a hatchery farm since 1975, adding that the land remained declared for taxation in the name of Silverio Perez.

Issues

• Whether or not the evidence presented by San Miguel is sufficient to warrant a ruling that it and its predecessor in interest have a registrable right over Lot 684.
• Whether or not the Court of Appeals may reverse the factual findings of the trial court.
• Whether or not tax declarations and receipts are conclusive evidence of ownership or of the right of possession over land.

Applicable Provisions

Section 11, Article XIV of the Constitution, invoked by the Solicitor General against a private corporation, provides:

No private corporation or association may hold alienable lands of the public domain except by lease not to exceed one thousand hectares in area.

This provision frames the Republic's opposition, since San Miguel is a private corporation claiming alienable public land.

Presidential Decree No. 892, which the Solicitor General invoked, provides:

Section 1. Section forty-eight of Commonwealth Act Numbered One hundred forty-one, as amended, otherwise known as the Public Land Act, is hereby amended to read as follows: Section 48. The period of prescription for the acquisition of lands of the public domain under the provisions of this chapter is hereby fixed at six months from the date of the approval of this decree, and the persons who may acquire said lands under this chapter are 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 agricultural lands of the public domain, under a bona fide claim of acquisition of ownership, since June twelve, nineteen hundred and forty-five, or prior thereto.

This provision fixes the period and the kind of possession required to acquire public land by prescription, which is the mode of acquisition San Miguel relied upon.

Ruling

On the first issue, the Court held that the evidence is insufficient. Open, exclusive and undisputed possession of alienable public land for the period prescribed by law creates the legal fiction whereby the land, upon completion of the requisite period, ipso jure, or by operation of law, and without need of judicial or other sanction, ceases to be public land and becomes private property. But such open, continuous, exclusive and notorious occupation for more than thirty years must be conclusively established, to avoid the erroneous validation of fictitious claims of possession.

On the second issue, the Court held that while trial courts may observe the demeanor of witnesses, their factual findings may nonetheless be reversed by the Court of Appeals, which is vested by law to resolve both legal and factual issues, if the evidence on record shows that the trial court erred.

On the third issue, the Court held that tax declarations and receipts are not conclusive evidence of ownership or of the right of possession over land; they are merely indicia of a claim of ownership. They become strong evidence of ownership of land acquired by prescription only when accompanied by proof of actual possession. Here, Silverio Perez's testimony, being uncorroborated, is simply self-serving and undeserving of weight. There is thus a paucity of evidence of actual, notorious and exclusive possession on his part so as to attach to the land the character of an express grant from the government.

Doctrine

Open, continuous, exclusive and notorious possession of alienable public land for the period fixed by law converts the land into private property by legal fiction, ipso jure, without judicial sanction, but that possession must be conclusively established. Tax declarations and tax receipts are not conclusive proof of ownership or possession; they are mere indicia of a claim of ownership, and become strong evidence of ownership acquired by prescription only when coupled with proof of actual possession. Uncorroborated testimony of a single witness on possession is self-serving and deserves no weight. The Court of Appeals may reverse the factual findings of the trial court when the evidence on record shows error.

Disposition

The Supreme Court affirmed the decision of the Court of Appeals, with costs against San Miguel Corporation, so the application for registration was denied and the land declared public land.

Remember This

Memorize the line that tax declarations are merely indicia of a claim of ownership and become strong evidence only when accompanied by proof of actual possession. Examiners use this case in land registration problems testing the quantum of proof for acquisitive prescription of public land and the weight of tax declarations.