THE DIRECTOR OF LANDS, PETITIONER, VS. INTERMEDIATE APPELLATE COURT AND ACME PLYWOOD & VENEER CO. INC., RESPONDENTS.

Director of Lands versus Acme Plywood and Veneer

The Case

This is a petition for review on certiorari brought by the Director of Lands against Acme Plywood and Veneer Company, a private corporation, and the Intermediate Appellate Court. The Director of Lands challenges the appellate court's affirmance of a trial court decision ordering the registration of five parcels of land in Isabela in favor of Acme. The case matters because it resolves a fundamental question in land registration: whether a corporation may acquire and register land that was already private property by operation of law before a new constitution took effect, and it settles the doctrine that open, continuous, and exclusive possession of alienable public land for the statutory period converts that land to private property by operation of law, without need of judicial confirmation.

Procedural History

Acme Plywood and Veneer Company filed a petition for confirmation of title under Section 48 of Commonwealth Act Number 141, the Public Land Act, before the Court of First Instance of Isabela. The trial court rendered a decision ordering registration in favor of Acme. The Director of Lands appealed to the Intermediate Appellate Court, which affirmed the trial court's decision. The Director of Lands then filed a petition for review on certiorari with the Supreme Court, raising only the issue of the applicability of the 1935 Constitution to the matter.

Facts

Mariano Infiel and Acer Infiel, members of the Dumagat tribe, a national cultural minority, had possessed and occupied five parcels of land in Isabela since time immemorial, passing the land from generation to generation. On October 29, 1962, the Infiels sold the land to Acme Plywood and Veneer Company, a corporation organized under Philippine law.

Acme subsequently introduced improvements worth more than forty-five million pesos on the land. The municipal officials of Maconacon, Isabela, negotiated with Acme for the donation of a townsite, and Acme donated a portion of the land for that purpose in 1979.

On July 17, 1981, Acme filed a petition for confirmation of title under Section 48 of the Public Land Act. The trial court found that the land was already private property under Republic Act Number 3872, which grants absolute ownership to members of non-Christian tribes over land they occupy or their ancestral lands. The trial court also found that Acme's possession, tacked to that of the Infiels, dated back to time immemorial. The Intermediate Appellate Court affirmed. The Director of Lands then elevated the case to the Supreme Court, arguing that the 1973 Constitution, not the 1935 Constitution, should apply because the registration proceedings were commenced in 1981, and that under Section 11 of Article XIV of the 1973 Constitution, private corporations are prohibited from holding alienable lands of the public domain.

Issues

• Whether or not the 1973 Constitution applies to the registration proceedings commenced in 1981, such that the prohibition against private corporations holding alienable lands of the public domain would bar registration in favor of Acme.
• Whether or not the land in question was already private property at the time Acme acquired it in 1962, by virtue of the Infiels' open, continuous, and exclusive possession for the statutory period.
• Whether or not Acme, as a juridical person, is disqualified from applying for judicial confirmation of title under Section 48 of the Public Land Act.

Applicable Provisions

Section 48, paragraphs (b) and (c), of Commonwealth Act Number 141, the Public Land Act, as amended, provides:

SEC. 48. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such lands or an interest therein, but whose titles have not been perfected or completed, may apply to the Court of First Instance of the province where the land is located for confirmation of their claims, and the issuance of a certificate of title therefor, under the Land Registration Act, to wit: xxx xxx xxx (b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition or ownership, for at least thirty years immediately preceding the filing of the application for confirmation of title except when prevented by war or force majeure. These shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter. (c) Members of the National Cultural minorities who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of lands of the public domain suitable to agriculture, whether disposable or not, under a bona fide claim of ownership for at least 30 years shall be entitled to the rights granted in subsection (b) hereof.

This provision is the basis for the confirmation proceedings and establishes the conclusive presumption that the possessor has performed all conditions essential to a government grant, which is central to the Court's ruling that the land had already become private property by operation of law.

Ruling

On the first issue, the Court held that the 1973 Constitution does not bar registration in favor of Acme. The Court reasoned that the land was already private property at the time Acme acquired it in 1962, before the 1973 Constitution took effect. The constitutional prohibition against private corporations holding alienable lands of the public domain applies only to public land, not to private land. Since the land had already been converted to private property by operation of law, the prohibition does not apply.

On the second issue, the Court held that the land was already private property at the time Acme acquired it. The Court adopted the doctrine established in earlier cases, beginning with Cariño, that open, continuous, exclusive, and notorious possession of alienable public land for the statutory period converts the land to private property by operation of law, without need of judicial confirmation. The Court quoted the statutory language:

These shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter.

The Court explained that the confirmation proceedings do not confer title but merely recognize a title already vested by operation of law. Since the Infiels had possessed the land since time immemorial, they had acquired a vested right to the land, which they validly transferred to Acme in 1962. The Court also held that the Constitution cannot impair vested rights.

On the third issue, the Court held that Acme's status as a juridical person does not disqualify it from applying for confirmation of title. The Court characterized this objection as technical rather than substantial. The Court noted that the Infiels, as natural persons, could have applied for confirmation themselves, and Acme, as their successor-in-interest, should not be denied the same benefit. The Court also suggested that the application could be considered as amended to conform to the evidence, following the dissent in the Meralco case.

In so ruling, the Court expressly reconsidered and abandoned the majority ruling in Meralco versus Castro-Bartolome, which had held that a corporation could not apply for confirmation of title to public land. The Court held that the correct rule is that alienable public land held by a possessor openly, continuously, and exclusively for the prescribed statutory period is converted to private property by the mere lapse of that period, by operation of law.

Doctrine

A Bar candidate must retain the following rules:

• Alienable public land held by a possessor, personally or through predecessors-in-interest, openly, continuously, and exclusively for the prescribed statutory period of thirty years under the Public Land Act is converted to private property by the mere lapse or completion of that period, by operation of law, without need of judicial confirmation.
• The confirmation proceedings under Section 48 of the Public Land Act do not confer title but merely recognize a title already vested by operation of law. The possessor is conclusively presumed to have performed all conditions essential to a government grant.
• The constitutional prohibition against private corporations holding alienable lands of the public domain applies only to public land, not to land that has already become private property by operation of law.
• The Constitution cannot impair vested rights. A right acquired before the effectivity of a new constitution cannot be defeated by its subsequent prohibition.
• A corporation that acquires private land from a possessor who had already acquired a vested right by operation of law may register that land in its own name, as the objection based on its juridical personality is merely technical and not substantial.

Disposition

The Supreme Court affirmed the judgment of the Intermediate Appellate Court, ordering the registration of the five parcels of land in favor of Acme Plywood and Veneer Company, without costs.

Remember This

The single line worth memorizing is that open, continuous, exclusive, and notorious possession of alienable public land for thirty years converts it to private property by operation of law, and the confirmation proceedings merely recognize a title already vested. Examiners like to use this case to test the doctrine of vested rights in constitutional law and the application of the Public Land Act to corporations.