EN BANC HEIRS OF MARIO MALABANAN, v. REPUBLIC OF THE PHILIPPINES G.R. No. 179987. April 29, 2009 D E C I S I O N TINGA, J.: One main reason why the informal sector has not become formal is that from Indonesia to Brazil, 90 percent of the informal lands are not titled and registered. This is a generalized phenomenon in the so-called Third World. And it has many consequences. Xxx The question is: How is it that so many governments, from Suharto's in Indonesia to Fujimori's in Peru, have wanted to title these people and have not been able to do so effectively? One reason is that none of the state systems in Asia or Latin America can gather proof of informal titles. In Peru, the informals have means of proving property ownership to each other which are not the same means developed by the Spanish legal system. The informals have their own papers, their own forms of agreements, and their own systems of registration, all of which are very clearly stated in the maps which they use for their own informal business transactions. If you take a walk through the countryside, from Indonesia to Peru, and you walk by field after field--in each field a different dog is going to bark at you. Even dogs know what private property is all about. The only one who does not know it is the government. The issue is that there exists a "common law" and an "informal law" which the Latin American formal legal system does not know how to recognize. - Hernando De Soto [1] This decision inevitably affects all untitled lands currently in possession of persons and entities other than the Philippine government. The petition, while unremarkable as to the facts, was accepted by the Court en banc in order to provide definitive clarity to the applicability and scope of original registration proceedings under Sections 14(1) and 14(2) of the Property Registration Decree. In doing so, the Court confronts not only the relevant provisions of the Public Land Act and the Civil Code, but also the reality on the ground. The countrywide phenomenon of untitled lands, as well as the problem of informal settlement it has spawned, has unfortunately been treated with benign neglect. Yet our current laws are hemmed in by their own circumscriptions in addressing the phenomenon. Still, the duty on our part is primarily to decide
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EN BANC HEIRS OF MARIO MALABANAN, v. REPUBLIC OF THE PHILIPPINES G.R. No. 179987. April 29, 2009 D E C I S I O N TINGA, J.:
One main reason why the informal sector has not become formal is that from Indonesia to Brazil, 90 percent of the informal lands are not titled and registered. This is a generalized phenomenon in the so-called Third World. And it has many consequences.
Xxx
The question is: How is it that so many governments, from Suharto's in Indonesia to Fujimori's in Peru, have wanted to title these people and have not been able to do so effectively? One reason is that none of the state systems in Asia or Latin America can gather proof of informal titles. In Peru, the informals have means of proving property ownership to each other which are not the same means developed by the Spanish legal system. The informals have their own papers, their own forms of agreements, and their own systems of registration, all of which are very clearly stated in the maps which they use for their own informal business transactions.
If you take a walk through the countryside, from Indonesia to Peru, and you walk by field after field--in each field a different dog is going to bark at you. Even dogs know what private property is all about. The only one who does not know it is the government. The issue is that there exists a "common law" and an "informal law" which the Latin American formal legal system does not know how to recognize.
- Hernando De Soto[1]
This decision inevitably affects all untitled lands currently in possession of persons and entities other than the Philippine government. The petition, while unremarkable as to the facts, was accepted by the Court en banc in order to provide definitive clarity to the applicability and scope of original registration proceedings under Sections 14(1) and 14(2) of the Property Registration Decree. In doing so, the Court confronts not only the relevant provisions of the Public Land Act and the Civil Code, but also the reality on the ground. The countrywide phenomenon of untitled lands, as well as the problem of informal settlement it has spawned, has unfortunately been treated with benign neglect. Yet our current laws are hemmed in by their own circumscriptions in addressing the phenomenon. Still, the duty on our part is primarily to decide cases before us in accord with the Constitution and the legal principles that have developed our public land law, though our social obligations dissuade us from casting a blind eye on the endemic problems.
I.On 20 February 1998, Mario Malabanan filed an application for land registration covering a parcel of land identified as Lot 9864-A, Cad-452-D, Silang Cadastre,[2] situated in Barangay Tibig, Silang Cavite, and consisting of 71,324 square meters. Malabanan claimed that he had purchased the property from Eduardo Velazco,[3] and that he and his predecessors-in-interest had been in open, notorious, and continuous adverse and peaceful possession of the land for more than thirty (30) years. The application was raffled to the Regional Trial Court of (RTC) Cavite-Tagaytay City, Branch 18. The Office of the Solicitor General (OSG) duly designated the Assistant Provincial Prosecutor of Cavite, Jose Velazco, Jr., to appear on behalf of the State.[4] Apart from presenting documentary evidence, Malabanan himself and his witness, Aristedes Velazco, testified at the hearing. Velazco testified that the property was originally belonged to a twenty-two hectare property owned by his great-grandfather, Lino Velazco. Lino had four sons Benedicto, Gregorio, Eduardo and Estebanthe fourth being Aristedess grandfather. Upon Linos death, his four sons inherited the property and divided it among themselves. But by 1966, Estebans wife, Magdalena, had become the administrator of all the properties inherited by the Velazco sons from their father, Lino. After the death of Esteban and Magdalena, their son Virgilio succeeded them in administering the properties, including Lot 9864-A, which originally belonged to his uncle, Eduardo Velazco. It was this property that was sold by Eduardo Velazco to Malabanan.[5]
Assistant Provincial Prosecutor Jose Velazco, Jr. did not cross-examine Aristedes Velazco. He further manifested
that he also [knew] the property and I affirm the truth of the testimony given by Mr. Velazco. [6] The Republic of the Philippines likewise did not present any evidence to controvert the application.
Among the evidence presented by Malabanan during trial was a Certification dated 11 June 2001, issued by the
Community Environment & Natural Resources Office, Department of Environment and Natural Resources (CENRO-DENR), which stated that the subject property was verified to be within the Alienable or Disposable land per Land Classification Map No. 3013 established under Project No. 20-A and approved as such under FAO 4-1656 on March 15, 1982.[7]
On 3 December 2002, the RTC rendered judgment in favor of Malabanan, the dispositive portion of which reads:
WHEREFORE, this Court hereby approves this application for registration and thus places under the operation of Act 141, Act 496 and/or P.D. 1529, otherwise known as Property Registration Law, the lands described in Plan Csd-04-0173123-D, Lot 9864-A and containing an area of Seventy One Thousand Three Hundred Twenty Four (71,324) Square Meters, as supported by its technical description now forming part of the record of this case, in addition to other proofs adduced in the name of MARIO MALABANAN, who is of legal age, Filipino, widower, and with residence at Munting Ilog, Silang, Cavite.
Once this Decision becomes final and executory, the corresponding decree of registration shall forthwith
issue. SO ORDERED.
The Republic interposed an appeal to the Court of Appeals, arguing that Malabanan had failed to prove that the property belonged to the alienable and disposable land of the public domain, and that the RTC had erred in finding that he had been in possession of the property in the manner and for the length of time required by law for confirmation of imperfect title.
On 23 February 2007, the Court of Appeals rendered a Decision [8] reversing the RTC and dismissing the
application of Malabanan. The appellate court held that under Section 14(1) of the Property Registration Decree any period of possession prior to the classification of the lots as alienable and disposable was inconsequential and should be excluded from the computation of the period of possession. Thus, the appellate court noted that since the CENRO-DENR certification had verified that the property was declared alienable and disposable only on 15 March 1982, the Velazcos possession prior to that date could not be factored in the computation of the period of possession. This interpretation of the Court of Appeals of Section 14(1) of the Property Registration Decree was based on the Courts ruling in Republic v. Herbieto.[9]
Malabanan died while the case was pending with the Court of Appeals;[10] hence, it was his heirs who appealed the
decision of the appellate court. Petitioners, before this Court, rely on our ruling in Republic v. Naguit,[11] which was handed down just four months prior to Herbieto. Petitioners suggest that the discussion in Herbieto cited by the Court of Appeals is actually obiter dictum since the Metropolitan Trial Court therein which had directed the registration of the property had no jurisdiction in the first place since the requisite notice of hearing was published only after the hearing had already begun. Naguit, petitioners argue, remains the controlling doctrine, especially when the property in question is agricultural land. Therefore, with respect to agricultural lands, any possession prior to the declaration of the alienable property as disposable may be counted in reckoning the period of possession to perfect title under the Public Land Act and the Property Registration Decree.
The petition was referred to the Court en banc,[12] and on 11 November 2008, the case was heard on oral
arguments. The Court formulated the principal issues for the oral arguments, to wit:
1. In order that an alienable and disposable land of the public domain may be registered under Section 14(1) of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, should the land be classified as alienable and disposable as of June 12, 1945 or is it sufficient that such classification occur at any time prior to the filing of the applicant for registration provided that it is established that the applicant has been in open, continuous, exclusive and notorious possession of the land under a bona fide claim of ownership since June 12, 1945 or earlier?
2. For purposes of Section 14(2) of the Property Registration Decree may a parcel of land classified as alienable and disposable be deemed private land and therefore susceptible to acquisition by prescription in accordance with the Civil Code?
3. May a parcel of land established as agricultural in character either because of its use or because its slope
is below that of forest lands be registrable under Section 14(2) of the Property Registration Decree in relation to the provisions of the Civil Code on acquisitive prescription?
4. Are petitioners entitled to the registration of the subject land in their names under Section 14(1) or Section
14(2) of the Property Registration Decree or both?[13]
Based on these issues, the parties formulated their respective positions. With respect to Section 14(1), petitioners reiterate that the analysis of the Court in Naguit is the correct
interpretation of the provision. The seemingly contradictory pronouncement in Herbieto, it is submitted, should be considered obiter dictum, since the land registration proceedings therein was void ab initio due to lack of publication of the notice of initial hearing. Petitioners further point out that in Republic v. Bibonia,[14] promulgated in June of 2007, the Court applied Naguit and adopted the same observation that the preferred interpretation by the OSG of Section 14(1) was patently absurd. For its part, the OSG remains insistent that for Section 14(1) to apply, the land should have been classified as alienable and disposable as of 12 June 1945. Apart from Herbieto, the OSG also cites the subsequent rulings in Buenaventura v. Republic,[15] Fieldman Agricultural Trading v. Republic[16] and Republic v. Imperial Credit Corporation,[17] as well as the earlier case of Director of Lands v. Court of Appeals.[18]
With respect to Section 14(2), petitioners submit that open, continuous, exclusive and notorious possession of an
alienable land of the public domain for more than 30 yearsipso jure converts the land into private property, thus placing it under the coverage of Section 14(2). According to them, it would not matter whether the land sought to be registered was previously classified as agricultural land of the public domain so long as, at the time of the application, the property had already been converted into private property through prescription. To bolster their argument, petitioners cite extensively from our 2008 ruling in Republic v. T.A.N. Properties.[19]
The arguments submitted by the OSG with respect to Section 14(2) are more extensive. The OSG notes that under
Article 1113 of the Civil Code, the acquisitive prescription of properties of the State refers to patrimonial property, while Section 14(2) speaks of private lands. It observes that the Court has yet to decide a case that presented Section 14(2) as a ground for application for registration, and that the 30-year possession period refers to the period of possession under Section 48(b) of the Public Land Act, and not the concept of prescription under the Civil Code. The OSG further submits that, assuming that the 30-year prescriptive period can run against public lands, said period should be reckoned from the time the public land was declared alienable and disposable.
Both sides likewise offer special arguments with respect to the particular factual circumstances surrounding the
subject property and the ownership thereof.
II.First, we discuss Section 14(1) of the Property Registration Decree. For a full understanding of the provision, reference has to be made to the Public Land Act.
A.Commonwealth Act No. 141, also known as the Public Land Act, has, since its enactment, governed the
classification and disposition of lands of the public domain. The President is authorized, from time to time, to classify the lands of the public domain into alienable and disposable, timber, or mineral lands. [20] Alienable and disposable lands of the public domain are further classified according to their uses into (a) agricultural; (b) residential, commercial, industrial, or for similar productive purposes; (c) educational, charitable, or other similar purposes; or (d) reservations for town sites and for public and quasi-public uses.[21]
May a private person validly seek the registration in his/her name of alienable and disposable lands of the public
domain? Section 11 of the Public Land Act acknowledges that public lands suitable for agricultural purposes may be disposed of by confirmation of imperfect or incomplete titles through judicial legalization. [22] Section 48(b) of the Public
Land Act, as amended by P.D. No. 1073, supplies the details and unmistakably grants that right, subject to the requisites stated therein:
Sec. 48. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such land 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
(b) 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 acquisition of ownership, since June 12, 1945, or earlier, 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.
Section 48(b) of Com. Act No. 141 received its present wording in 1977 when the law was amended by P.D. No. 1073. Two significant amendments were introduced by P.D. No. 1073. First, the term agricultural lands was changed to alienable and disposable lands of the public domain. The OSG submits that this amendment restricted the scope of the lands that may be registered.[23] This is not actually the case. Under Section 9 of the Public Land Act, agricultural lands are a mere subset of lands of the public domain alienable or open to disposition. Evidently, alienable and disposable lands of the public domain are a larger class than only agricultural lands. Second, the length of the requisite possession was changed from possession for thirty (30) years immediately preceding the filing of the application to possession since June 12, 1945 or earlier. The Court in Naguit explained:
When the Public Land Act was first promulgated in 1936, the period of possession deemed necessary to vest the right to register their title to agricultural lands of the public domain commenced from July 26, 1894. However, this period was amended by R.A. No. 1942, which provided that the bona fide claim of ownership must have been for at least thirty (30) years. Then in 1977, Section 48(b) of the Public Land Act was again amended, this time by P.D. No. 1073, which pegged the reckoning date at June 12, 1945. xxx
It bears further observation that Section 48(b) of Com. Act No, 141 is virtually the same as Section 14(1) of the Property Registration Decree. Said Decree codified the various laws relative to the registration of property, including lands of the public domain. It is Section 14(1) that operationalizes the registration of such lands of the public domain. The provision reads:
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.
Notwithstanding the passage of the Property Registration Decree and the inclusion of Section 14(1) therein, the
Public Land Act has remained in effect. Both laws commonly refer to persons or their predecessors-in-interest who 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. That circumstance may have led to the impression that one or the other is a redundancy, or that Section 48(b) of the Public Land Act has somehow been repealed or mooted. That is not the case.
The opening clauses of Section 48 of the Public Land Act and Section 14 of the Property Registration Decree
warrant comparison:
Sec. 48 [of the Public Land Act]. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such land 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
Sec. 14 [of the Property Registration Decree]. 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:
xxx
It is clear that Section 48 of the Public Land Act is more descriptive of the nature of the right enjoyed by the
possessor than Section 14 of the Property Registration Decree, which seems to presume the pre-existence of the right, rather than establishing the right itself for the first time. It is proper to assert that it is the Public Land Act, as amended by P.D. No. 1073 effective 25 January 1977, that has primarily established the right of a Filipino citizen who has 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 acquisition of ownership, since June 12, 1945 to perfect or complete his title by applying with the proper court for the confirmation of his ownership claim and the issuance of the corresponding certificate of title.
Section 48 can be viewed in conjunction with the afore-quoted Section 11 of the Public Land Act, which provides
that public lands suitable for agricultural purposes may be disposed of by confirmation of imperfect or incomplete titles, and given the notion that both provisions declare that it is indeed the Public Land Act that primarily establishes the substantive ownership of the possessor who has been in possession of the property since 12 June 1945. In turn, Section 14(a) of the Property Registration Decree recognizes the substantive right granted under Section 48(b) of the Public Land Act, as well provides the corresponding original registration procedure for the judicial confirmation of an imperfect or incomplete title. There is another limitation to the right granted under Section 48(b). Section 47 of the Public Land Act limits the period within which one may exercise the right to seek registration under Section 48. The provision has been amended several times, most recently by Rep. Act No. 9176 in 2002. It currently reads thus:
Section 47. The persons specified in the next following section are hereby granted time, not to extend beyond December 31, 2020 within which to avail of the benefits of this Chapter: Provided, That this period shall apply only where the area applied for does not exceed twelve (12) hectares: Provided, further, That the several periods of time designated by the President in accordance with Section Forty-Five of this Act shall apply also to the lands comprised in the provisions of this Chapter, but this Section shall not be construed as prohibiting any said persons from acting under this Chapter at any time prior to the period fixed by the President.[24]
Accordingly under the current state of the law, the substantive right granted under Section 48(b) may be availed of only until 31 December 2020.
B.Despite the clear text of Section 48(b) of the Public Land Act, as amended and Section 14(a) of the Property
Registration Decree, the OSG has adopted the position that for one to acquire the right to seek registration of an alienable and disposable land of the public domain, it is not enough that the applicant and his/her predecessors-in-interest be in possession under a bona fide claim of ownership since 12 June 1945; the alienable and disposable character of the property must have been declared also as of 12 June 1945. Following the OSGs approach, all lands certified as alienable and disposable after 12 June 1945 cannot be registered either under Section 14(1) of the Property Registration Decree or Section 48(b) of the Public Land Act as amended. The absurdity of such an implication was discussed in Naguit.
Petitioner suggests an interpretation that the alienable and disposable character of the land should have
already been established since June 12, 1945 or earlier. This is not borne out by the plain meaning of Section 14(1). Since June 12, 1945, as used in the provision, qualifies its antecedent phrase under a bonafide claim of ownership. Generally speaking, qualifying words restrict or modify only the words or phrases to which they are immediately
associated, and not those distantly or remotely located.[25] Ad proximum antecedents fiat relation nisi impediatur sentencia. Besides, we are mindful of the absurdity that would result if we adopt petitioners position. Absent a legislative amendment, the rule would be, adopting the OSGs view, that all lands of the public domain which were not declared alienable or disposable before June 12, 1945 would not be susceptible to original registration, no matter the length of unchallenged possession by the occupant. Such interpretation renders paragraph (1) of Section 14 virtually inoperative and even precludes the government from giving it effect even as it decides to reclassify public agricultural lands as alienable and disposable. The unreasonableness of the situation would even be aggravated considering that before June 12, 1945, the Philippines was not yet even considered an independent state. Accordingly, the Court in Naguit explained:
[T]he more reasonable interpretation of Section 14(1) is that it merely requires the property sought to be registered as already alienable and disposable at the time the application for registration of title is filed. If the State, at the time the application is made, has not yet deemed it proper to release the property for alienation or disposition, the presumption is that the government is still reserving the right to utilize the property; hence, the need to preserve its ownership in the State irrespective of the length of adverse possession even if in good faith. However, if the property has already been classified as alienable and disposable, as it is in this case, then there is already an intention on the part of the State to abdicate its exclusive prerogative over the property. The Court declares that the correct interpretation of Section 14(1) is that which was adopted in Naguit. The
contrary pronouncement in Herbieto, as pointed out in Naguit, absurdly limits the application of the provision to the point of virtual inutility since it would only cover lands actually declared alienable and disposable prior to 12 June 1945, even if the current possessor is able to establish open, continuous, exclusive and notorious possession under a bona fide claim of ownership long before that date.
Moreover, the Naguit interpretation allows more possessors under a bona fide claim of ownership to avail of
judicial confirmation of their imperfect titles than what would be feasible under Herbieto. This balancing fact is significant, especially considering our forthcoming discussion on the scope and reach of Section 14(2) of the Property Registration Decree.
Petitioners make the salient observation that the contradictory passages from Herbieto are obiter dicta since the
land registration proceedings therein is void ab initio in the first place due to lack of the requisite publication of the notice of initial hearing. There is no need to explicitly overturn Herbieto, as it suffices that the Courts acknowledgment that the particular line of argument used therein concerning Section 14(1) is indeed obiter.
It may be noted that in the subsequent case of Buenaventura,[26] the Court, citing Herbieto, again stated that [a]ny period of possession prior to the date when the [s]ubject [property was] classified as alienable and disposable is inconsequential and should be excluded from the computation of the period of possession That statement, in the context of Section 14(1), is certainly erroneous. Nonetheless, the passage as cited in Buenaventura should again be considered as obiter. The application therein was ultimately granted, citing Section 14(2). The evidence submitted by petitioners therein did not establish any mode of possession on their part prior to 1948, thereby precluding the application of Section 14(1). It is not even apparent from the decision whether petitioners therein had claimed entitlement to original registration following Section 14(1), their position being that they had been in exclusive possession under a bona fide claim of ownership for over fifty (50) years, but not before 12 June 1945.
Thus, neither Herbieto nor its principal discipular ruling Buenaventura has any precedental value with respect to Section 14(1). On the other hand, the ratio of Naguit is embedded in Section 14(1), since it precisely involved situation wherein the applicant had been in exclusive possession under a bona fide claim of ownership prior to 12 June 1945. The Courts interpretation of Section 14(1) therein was decisive to the resolution of the case. Any doubt as to which between Naguit or Herbieto provides the final word of the Court on Section 14(1) is now settled in favor of Naguit. We noted in Naguit that it should be distinguished from Bracewell v. Court of Appeals[27] since in the latter, the application for registration had been filed before the land was declared alienable or disposable. The dissent though pronounces Bracewell as the better rule between the two. Yet two years after Bracewell, its ponente, the esteemed Justice Consuelo Ynares-Santiago, penned the ruling in Republic v. Ceniza,[28] which involved a claim of possession that extended
back to 1927 over a public domain land that was declared alienable and disposable only in 1980. Ceniza cited Bracewell, quoted extensively from it, and following the mindset of the dissent, the attempt at registration in Cenizashould have failed. Not so.
To prove that the land subject of an application for registration is alienable, an applicant must establish the existence of a positive act of the government such as a presidential proclamation or an executive order; an administrative action; investigation reports of Bureau of Lands investigators; and a legislative act or a statute.
In this case, private respondents presented a certification dated November 25, 1994, issued by Eduardo M.
Inting, the Community Environment and Natural Resources Officer in the Department of Environment and Natural Resources Office in Cebu City, stating that the lots involved were "found to be within the alienable and disposable (sic) Block-I, Land Classification Project No. 32-A, per map 2962 4-I555 dated December 9, 1980." This is sufficient evidence to show the real character of the land subject of private respondents application. Further, the certification enjoys a presumption of regularity in the absence of contradictory evidence, which is true in this case. Worth noting also was the observation of the Court of Appeals stating that:
[n]o opposition was filed by the Bureaus of Lands and Forestry to contest the application
of appellees on the ground that the property still forms part of the public domain. Nor is there any showing that the lots in question are forestal land.... Thus, while the Court of Appeals erred in ruling that mere possession of public land for the period required
by law would entitle its occupant to a confirmation of imperfect title, it did not err in ruling in favor of private respondents as far as the first requirement in Section 48(b) of the Public Land Act is concerned, for they were able to overcome the burden of proving the alienability of the land subject of their application.
As correctly found by the Court of Appeals, private respondents were able to prove their open, continuous,
exclusive and notorious possession of the subject land even before the year 1927. As a rule, we are bound by the factual findings of the Court of Appeals. Although there are exceptions, petitioner did not show that this is one of them.[29]
Why did the Court in Ceniza, through the same eminent member who authored Bracewell, sanction the registration under Section 48(b) of public domain lands declared alienable or disposable thirty-five (35) years and 180 days after 12 June 1945? The telling difference is that in Ceniza, the application for registration was filed nearly six (6) years after the land had been declared alienable or disposable, while in Bracewell, the application was filed nine (9) years before the land was declared alienable or disposable. That crucial difference was also stressed in Naguit to contradistinguish it from Bracewell, a difference which the dissent seeks to belittle.
III. We next ascertain the correct framework of analysis with respect to Section 14(2). The provision reads:
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:
xxx
(2) Those who have acquired ownership over private lands by prescription under the provisions
of existing laws.
The Court in Naguit offered the following discussion concerning Section 14(2), which we did even then recognize, and still do, to be an obiter dictum, but we nonetheless refer to it as material for further discussion, thus:
Did the enactment of the Property Registration Decree and the amendatory P.D. No. 1073 preclude the
application for registration of alienable lands of the public domain, possession over which commenced only after June 12, 1945? It did not, considering Section 14(2) of the Property Registration Decree, which governs and authorizes the application of those who have acquired ownership of private lands by prescription under the provisions of existing laws.
Prescription is one of the modes of acquiring ownership under the Civil Code.[ [30]] There is a consistent
jurisprudential rule that properties classified as alienable public land may be converted into private property by reason of open, continuous and exclusive possession of at least thirty (30) years.[[31]] With such conversion, such
property may now fall within the contemplation of private lands under Section 14(2), and thus susceptible to registration by those who have acquired ownership through prescription. Thus, even if possession of the alienable public land commenced on a date later than June 12, 1945, and such possession being been open, continuous and exclusive, then the possessor may have the right to register the land by virtue of Section 14(2) of the Property Registration Decree.
Naguit did not involve the application of Section 14(2), unlike in this case where petitioners have based their registration bid primarily on that provision, and where the evidence definitively establishes their claim of possession only as far back as 1948. It is in this case that we can properly appreciate the nuances of the provision.
A.The obiter in Naguit cited the Civil Code provisions on prescription as the possible basis for application for original registration under Section 14(2). Specifically, it is Article 1113 which provides legal foundation for the application. It reads:
All things which are within the commerce of men are susceptible of prescription, unless otherwise provided. Property of the State or any of its subdivisions not patrimonial in character shall not be the object of prescription.
It is clear under the Civil Code that where lands of the public domain are patrimonial in character, they are susceptible to acquisitive prescription. On the other hand, among the public domain lands that are not susceptible to acquisitive prescription are timber lands and mineral lands. The Constitution itself proscribes private ownership of timber or mineral lands.
There are in fact several provisions in the Civil Code concerning the acquisition of real property through
prescription. Ownership of real property may be acquired by ordinary prescription of ten (10) years, [32] or through extraordinary prescription of thirty (30) years.[33] Ordinary acquisitive prescription requires possession in good faith,[34]as well as just title.[35]
When Section 14(2) of the Property Registration Decree explicitly provides that persons who have acquired
ownership over private lands by prescription under the provisions of existing laws, it unmistakably refers to the Civil Code as a valid basis for the registration of lands. The Civil Code is the only existing law that specifically allows the acquisition by prescription of private lands, including patrimonial property belonging to the State. Thus, the critical question that needs affirmation is whether Section 14(2) does encompass original registration proceedings over patrimonial property of the State, which a private person has acquired through prescription.
The Naguit obiter had adverted to a frequently reiterated jurisprudence holding that properties classified as
alienable public land may be converted into private property by reason of open, continuous and exclusive possession of at least thirty (30) years.[36] Yet if we ascertain the source of the thirty-year period, additional complexities relating to Section 14(2) and to how exactly it operates would emerge. For there are in fact two distinct origins of the thirty (30)-year rule.
The first source is Rep. Act No. 1942, enacted in 1957, which amended Section 48(b) of the Public Land Act by
granting the right to seek original registration of alienable public lands through possession in the concept of an owner for at least thirty years.
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:
x x x x x x x x x
(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 of 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. (emphasis supplied)[37]
This provision was repealed in 1977 with the enactment of P.D. 1073, which made the date 12 June 1945 the
reckoning point for the first time. Nonetheless, applications for registration filed prior to 1977 could have invoked the 30-year rule introduced by Rep. Act No. 1942.
The second source is Section 14(2) of P.D. 1529 itself, at least by implication, as it applies the rules on
prescription under the Civil Code, particularly Article 1113 in relation to Article 1137. Note that there are two kinds of prescription under the Civil Codeordinary acquisitive prescription and extraordinary acquisitive prescription, which, under Article 1137, is completed through uninterrupted adverse possession for thirty years, without need of title or of good faith.
Obviously, the first source of the thirty (30)-year period rule, Rep. Act No. 1942, became unavailable after 1977.
At present, the only legal basis for the thirty (30)-year period is the law on prescription under the Civil Code, as mandated under Section 14(2). However, there is a material difference between how the thirty (30)-year rule operated under Rep. Act No. 1942 and how it did under the Civil Code.
Section 48(b) of the Public Land Act, as amended by Rep. Act No. 1942, did not refer to or call into application
the Civil Code provisions on prescription. It merely set forth a requisite thirty-year possession period immediately preceding the application for confirmation of title, without any qualification as to whether the property should be declared alienable at the beginning of, and continue as such, throughout the entire thirty-(30) years. There is neither statutory nor jurisprudential basis to assert Rep. Act No. 1942 had mandated such a requirement, [38] similar to our earlier finding with respect to the present language of Section 48(b), which now sets 12 June 1945 as the point of reference.
Then, with the repeal of Rep. Act No. 1942, the thirty-year possession period as basis for original registration
became Section 14(2) of the Property Registration Decree, which entitled those who have acquired ownership over private lands by prescription under the provisions of existing laws to apply for original registration. Again, the thirty-year period is derived from the rule on extraordinary prescription under Article 1137 of the Civil Code. At the same time, Section 14(2) puts into operation the entire regime of prescription under the Civil Code, a fact which does not hold true with respect to Section 14(1).
B.Unlike Section 14(1), Section 14(2) explicitly refers to the principles on prescription under existing laws.
Accordingly, we are impelled to apply the civil law concept of prescription, as set forth in the Civil Code, in our interpretation of Section 14(2). There is no similar demand on our part in the case of Section 14(1).
The critical qualification under Article 1113 of the Civil Code is thus: [p]roperty of the State or any of its
subdivisions not patrimonial in character shall not be the object of prescription. The identification what consists of patrimonial property is provided by Articles 420 and 421, which we quote in full:
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.
Art. 421. All other property of the State, which is not of the character stated in the preceding article, is
patrimonial property It is clear that property of public dominion, which generally includes property belonging to the State, cannot be the object of prescription or, indeed, be subject of the commerce of man. [39] Lands of the public domain, whether declared alienable and disposable or not, are property of public dominion and thus insusceptible to acquisition by prescription. Let us now explore the effects under the Civil Code of a declaration by the President or any duly authorized government officer of alienability and disposability of lands of the public domain. Would such lands so declared alienable and
disposable be converted, under the Civil Code, from property of the public dominion into patrimonial property? After all, by connotative definition, alienable and disposable lands may be the object of the commerce of man; Article 1113 provides that all things within the commerce of man are susceptible to prescription; and the same provision further provides that patrimonial property of the State may be acquired by prescription.
Nonetheless, Article 422 of the Civil Code states that [p]roperty of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State. It is this provision that controls how public dominion property may be converted into patrimonial property susceptible to acquisition by prescription. After all, Article 420 (2) makes clear that those property 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 are public dominion property. For as long as the property belongs to the State, although already classified as alienable or disposable, it remains property of the public dominion if when it is intended for some public service or for the development of the national wealth.
Accordingly, there must be an express declaration by the State that the public dominion property is no
longer intended for public service or the development of the national wealth or that the property has been converted into patrimonial. 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.
It is comprehensible with ease that this reading of Section 14(2) of the Property Registration Decree limits its
scope and reach and thus affects the registrability even of lands already declared alienable and disposable to the detriment of the bona fide possessors or occupants claiming title to the lands. Yet this interpretation is in accord with the Regalian doctrine and its concomitant assumption that all lands owned by the State, although declared alienable or disposable, remain as such and ought to be used only by the Government.
Recourse does not lie with this Court in the matter. The duty of the Court is to apply the Constitution and the laws
in accordance with their language and intent. The remedy is to change the law, which is the province of the legislative branch. Congress can very well be entreated to amend Section 14(2) of the Property Registration Decree and pertinent provisions of the Civil Code to liberalize the requirements for judicial confirmation of imperfect or incomplete titles.
The operation of the foregoing interpretation can be illustrated by an actual example. Republic Act No. 7227,
entitled An Act Accelerating The Conversion Of Military Reservations Into Other Productive Uses, etc., is more commonly known as the BCDA law. Section 2 of the law authorizes the sale of certain military reservations and portions of military camps in Metro Manila, including Fort Bonifacio and Villamor Air Base. For purposes of effecting the sale of the military camps, the law mandates the President to transfer such military lands to the Bases Conversion Development Authority (BCDA)[40] which in turn is authorized to own, hold and/or administer them.[41] The President is authorized to sell portions of the military camps, in whole or in part.[42] Accordingly, the BCDA law itself declares that the military lands subject thereof are alienable and disposable pursuant to the provisions of existing laws and regulations governing sales of government properties.[43]
From the moment the BCDA law was enacted the subject military lands have become alienable and disposable.
However, said lands did not become patrimonial, as the BCDA law itself expressly makes the reservation that these lands are to be sold in order to raise funds for the conversion of the former American bases at Clark and Subic.[44]Such purpose can be tied to either public service or the development of national wealth under Article 420(2). Thus, at that time, the lands remained property of the public dominion under Article 420(2), notwithstanding their status as alienable and disposable. It is upon their sale as authorized under the BCDA law to a private person or entity that such lands become private property and cease to be property of the public dominion.
C.
Should public domain lands become patrimonial because they are declared as such in a duly enacted law or duly promulgated proclamation that they are no longer intended for public service or for the development of the national wealth, would the period of possession prior to the conversion of such public dominion into patrimonial be reckoned in counting the prescriptive period in favor of the possessors? We rule in the negative.
The limitation imposed by Article 1113 dissuades us from ruling that the period of possession before the public domain land becomes patrimonial may be counted for the purpose of completing the prescriptive period. Possession of public dominion property before it becomes patrimonial cannot be the object of prescription according to the Civil Code. As the application for registration under Section 14(2) falls wholly within the framework of prescription under the Civil Code, there is no way that possession during the time that the land was still classified as public dominion property can be counted to meet the requisites of acquisitive prescription and justify registration.
Are we being inconsistent in applying divergent rules for Section 14(1) and Section 14(2)? There is no inconsistency. Section 14(1) mandates registration on the basis ofpossession, while Section 14(2) entitles registration on the basis of prescription . Registration under Section 14(1) is extended under the aegis of the Property Registration Decree and the Public Land Act while registration under Section 14(2) is made available both by the Property Registration Decree and the Civil Code. In the same manner, we can distinguish between the thirty-year period under Section 48(b) of the Public Land Act, as amended by Rep. Act No. 1472, and the thirty-year period available through Section 14(2) of the Property Registration Decree in relation to Article 1137 of the Civil Code. The period under the former speaks of a thirty-year period of possession , while the period under the latter concerns a thirty-year period of extraordinary prescription. Registration under Section 48(b) of the Public Land Act as amended by Rep. Act No. 1472 is based on thirty years of possession alone without regard to the Civil Code, while the registration under Section 14(2) of the Property Registration Decree is founded on extraordinary prescription under the Civil Code. It may be asked why the principles of prescription under the Civil Code should not apply as well to Section 14(1). Notwithstanding the vaunted status of the Civil Code, it ultimately is just one of numerous statutes, neither superior nor inferior to other statutes such as the Property Registration Decree. The legislative branch is not bound to adhere to the framework set forth by the Civil Code when it enacts subsequent legislation. Section 14(2) manifests a clear intent to interrelate the registration allowed under that provision with the Civil Code, but no such intent exists with respect to Section 14(1).
IV.One of the keys to understanding the framework we set forth today is seeing how our land registration procedures correlate with our law on prescription, which, under the Civil Code, is one of the modes for acquiring ownership over property. The Civil Code makes it clear that patrimonial property of the State may be acquired by private persons through prescription. This is brought about by Article 1113, which states that [a]ll things which are within the commerce of man are susceptible to prescription, and that [p]roperty of the State or any of its subdivisions not patrimonial in character shall not be the object of prescription. There are two modes of prescription through which immovables may be acquired under the Civil Code. The first is ordinary acquisitive prescription, which, under Article 1117, requires possession in good faith and with just title; and, under Article 1134, is completed through possession of ten (10) years. There is nothing in the Civil Code that bars a person from acquiring patrimonial property of the State through ordinary acquisitive prescription, nor is there any apparent reason to impose such a rule. At the same time, there are indispensable requisitesgood faith and just title. The ascertainment of good faith involves the application of Articles 526, 527, and 528, as well as Article 1127 of the Civil Code,[45] provisions that more or less speak for themselves.
On the other hand, the concept of just title requires some clarification. Under Article 1129, there is just title for the purposes of prescription when the adverse claimant came into possession of the property through one of the modes recognized by law for the acquisition of ownership or other real rights, but the grantor was not the owner or could not transmit any right. Dr. Tolentino explains:
Just title is an act which has for its purpose the transmission of ownership, and which would have actually transferred ownership if the grantor had been the owner. This vice or defect is the one cured by prescription. Examples: sale with delivery, exchange, donation, succession, and dacion in payment.[46]
The OSG submits that the requirement of just title necessarily precludes the applicability of ordinary acquisitive prescription to patrimonial property. The major premise for the argument is that the State, as the owner and grantor, could not transmit ownership to the possessor before the completion of the required period of possession. [47] It is evident that the
OSG erred when it assumed that the grantor referred to in Article 1129 is the State. The grantor is the one from whom the person invoking ordinary acquisitive prescription derived the title, whether by sale, exchange, donation, succession or any other mode of the acquisition of ownership or other real rights.
Earlier, we made it clear that, whether under ordinary prescription or extraordinary prescription, the period of possession preceding the classification of public dominion lands as patrimonial cannot be counted for the purpose of computing prescription. But after the property has been become patrimonial, the period of prescription begins to run in favor of the possessor. Once the requisite period has been completed, two legal events ensue: (1) the patrimonial property is ipso jure converted into private land; and (2) the person in possession for the periods prescribed under the Civil Code acquires ownership of the property by operation of the Civil Code.
It is evident that once the possessor automatically becomes the owner of the converted patrimonial property, the
ideal next step is the registration of the property under theTorrens system. It should be remembered that registration of property is not a mode of acquisition of ownership, but merely a mode of confirmation of ownership.[48]
Looking back at the registration regime prior to the adoption of the Property Registration Decree in 1977, it is
apparent that the registration system then did not fully accommodate the acquisition of ownership of patrimonial property under the Civil Code. What the system accommodated was the confirmation of imperfect title brought about by the completion of a period of possession ordained under the Public Land Act (either 30 years following Rep. Act No. 1942, or since 12 June 1945 following P.D. No. 1073).
The Land Registration Act[49] was noticeably silent on the requisites for alienable public lands acquired through
ordinary prescription under the Civil Code, though it arguably did not preclude such registration. [50] Still, the gap was lamentable, considering that the Civil Code, by itself, establishes ownership over the patrimonial property of persons who have completed the prescriptive periods ordained therein. The gap was finally closed with the adoption of the Property Registration Decree in 1977, with Section 14(2) thereof expressly authorizing original registration in favor of persons who have acquired ownership over private lands by prescription under the provisions of existing laws, that is, the Civil Code as of now.
V.We synthesize the doctrines laid down in this case, as follows: (1) In connection with Section 14(1) of the Property Registration Decree, Section 48(b) of the Public Land Act recognizes and confirms that 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 acquisition of ownership, since June 12, 1945 have acquired ownership of, and registrable title to, such lands based on the length and quality of their possession.
(a) Since Section 48(b) merely requires possession since 12 June 1945 and does not require that the lands should have been alienable and disposable during the entire period of possession, the possessor is entitled to secure judicial confirmation of his title thereto as soon as it is declared alienable and disposable, subject to the timeframe imposed by Section 47 of the Public Land Act.[51]
(b) The right to register granted under Section 48(b) of the Public Land Act is further confirmed by
Section 14(1) of the Property Registration Decree. (2) In complying with Section 14(2) of the Property Registration Decree, consider that under the Civil Code, prescription is recognized as a mode of acquiring ownership of patrimonial property. However, public domain lands become only patrimonial property not only with a declaration that these are alienable or disposable. There must also be an express government manifestation that the property is already patrimonial or no longer retained for public service or the development of national wealth, under Article 422 of the Civil Code. And only when the property has become patrimonial can the prescriptive period for the acquisition of property of the public dominion begin to run.
(a) Patrimonial property is private property of the government. The person acquires ownership of patrimonial property by prescription under the Civil Code is entitled to secure registration thereof under Section 14(2) of the Property Registration Decree.
(b) There are two kinds of prescription by which patrimonial property may be acquired, one ordinary and
other extraordinary. Under ordinary acquisitive prescription, a person acquires ownership of a patrimonial property through possession for at least ten (10) years, in good faith and with just title. Under extraordinary acquisitive prescription, a persons uninterrupted adverse possession of patrimonial property for at least thirty (30) years, regardless of good faith or just title, ripens into ownership.
B.
We now apply the above-stated doctrines to the case at bar. It is clear that the evidence of petitioners is insufficient to establish that Malabanan has acquired ownership over the subject property under Section 48(b) of the Public Land Act. There is no substantive evidence to establish that Malabanan or petitioners as his predecessors-in-interest have been in possession of the property since 12 June 1945 or earlier. The earliest that petitioners can date back their possession, according to their own evidencethe Tax Declarations they presented in particularis to the year 1948. Thus, they cannot avail themselves of registration under Section 14(1) of the Property Registration Decree. Neither can petitioners properly invoke Section 14(2) as basis for registration. While the subject property was declared as alienable or disposable in 1982, there is no competent evidence that is no longer intended for public use service or for the development of the national evidence, conformably with Article 422 of the Civil Code. The classification of the subject property as alienable and disposable land of the public domain does not change its status as property of the public dominion under Article 420(2) of the Civil Code.Thus, it is insusceptible to acquisition by prescription.
VI.A final word. The Court is comfortable with the correctness of the legal doctrines established in this decision.
Nonetheless, discomfiture over the implications of todays ruling cannot be discounted. For, every untitled property that is occupied in the country will be affected by this ruling. The social implications cannot be dismissed lightly, and the Court would be abdicating its social responsibility to the Filipino people if we simply levied the law without comment. The informal settlement of public lands, whether declared alienable or not, is a phenomenon tied to long-standing habit and cultural acquiescence, and is common among the so-called Third World countries. This paradigm powerfully evokes the disconnect between a legal system and the reality on the ground. The law so far has been unable to bridge that gap. Alternative means of acquisition of these public domain lands, such as through homestead or free patent, haveproven unattractive due to limitations imposed on the grantee in the encumbrance or alienation of said properties. [52] Judicial confirmation of imperfect title has emerged as the most viable, if not the most attractive means to regularize the informal settlement of alienable or disposable lands of the public domain, yet even that system, as revealed in this decision, has considerable limits. There are millions upon millions of Filipinos who have individually or exclusively held residential lands on which they have lived and raised their families. Many more have tilled and made productive idle lands of the State with their hands. They have been regarded for generation by their families and their communities as common law owners. There is much to be said about the virtues of according them legitimate states. Yet such virtues are not for the Court to translate into positive law, as the law itself considered such lands as property of the public dominion. It could only be up to Congress to set forth a new phase of land reform to sensibly regularize and formalize the settlement of such lands which in legal theory are lands of the public domain before the problem becomes insoluble. This could be accomplished, to cite two examples, by liberalizing the standards for judicial confirmation of imperfect title, or amending the Civil Code itself to ease the requisites for the conversion of public dominion property into patrimonial.
Ones sense of security over land rights infuses into every aspect of well-being not only of that individual, but also to the persons family. Once that sense of security is deprived, life and livelihood are put on stasis. It is for the political branches to bring welcome closure to the long pestering problem. WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals dated 23 February 2007 and Resolution dated 2 October 2007 are AFFIRMED. No pronouncement as to costs. SO ORDERED.
EN BANC
G.R. No. 179987. September 3, 2013
HEIRS OF MARIO MALABANAN vs.REPUBLIC OF THE PHILIPPINES
R E S O L U T I O N
BERSAMIN, J.:
For our consideration and resolution are the motions for reconsideration of the parties who both assail the decision promulgated on April 29, 2009, whereby we upheld the ruling of the Court of Appeals (CA) denying the application of the petitioners for the registration of a parcel of land situated in Barangay Tibig, Silang, Cavite on the ground that they had not established by sufficient evidence their right to the registration in accordance with either Section 14(1) or Section 14(2) of Presidential Decree No. 1529 (Property Registration Decree).
Antecedents
The property subject of the application for registration is a parcel of land situated in Barangay Tibig, Silang Cavite, more particularly identified as Lot 9864-A, Cad-452-D, with an area of 71,324-square meters. On February 20, 1998, applicant Mario Malabanan, who had purchased the property from Eduardo Velazco, filed an application for land registration covering the property in the Regional Trial Court (RTC) in Tagaytay City, Cavite, claiming that the property formed part of the alienable and disposable land of the public domain, and that he and his predecessors-in-interest had been in open, continuous, uninterrupted, public and adverse possession and occupation of the land for more than 30 years, thereby entitling him to the judicial confirmation of his title.1
To prove that the property was an alienable and disposable land of the public domain, Malabanan presented during trial a certification dated June 11, 2001 issued by the Community Environment and Natural Resources Office (CENRO) of the Department of Environment and Natural Resources (DENR), which reads:
This is to certify that the parcel of land designated as Lot No. 9864 Cad 452-D, Silang Cadastre as surveyed for Mr. Virgilio Velasco located at Barangay Tibig, Silang, Cavite containing an area of 249,734 sq. meters as shown and described on the Plan Ap-04-00952 is verified to be within the Alienable or Disposable land per Land Classification Map No. 3013 established under Project No. 20-A and approved as such under FAO 4-1656 on March 15, 1982.2
After trial, on December 3, 2002, the RTC rendered judgment granting Malabanan’s application for land registration, disposing thusly:
WHEREFORE, this Court hereby approves this application for registration and thus places under the operation of Act 141, Act 496 and/or P.D. 1529, otherwise known as Property Registration Law, the lands described in Plan Csd-04-0173123-D, Lot 9864-A and containing an area of Seventy One Thousand Three Hundred Twenty Four (71,324) Square Meters, as supported by its technical description now forming part of the record of this case, in addition to other proofs adduced in the name of MARIO MALABANAN, who is of legal age, Filipino, widower, and with residence at Munting Ilog, Silang, Cavite.
Once this Decision becomes final and executory, the corresponding decree of registration shall forthwith issue.
SO ORDERED.3
The Office of the Solicitor General (OSG) appealed the judgment to the CA, arguing that Malabanan had failed to prove that the property belonged to the alienable and disposable land of the public domain, and that the RTC erred in finding that he had been in possession of the property in the manner and for the length of time required by law for confirmation of imperfect title.
On February 23, 2007, the CA promulgated its decision reversing the RTC and dismissing the application for registration of Malabanan. Citing the ruling in Republic v. Herbieto (Herbieto),4 the CA declared that under Section 14(1) of the Property Registration Decree, any period of possession prior to the classification of the land as alienable and disposable was inconsequential and should be excluded from the computation of the period of possession. Noting that the CENRO-DENR certification stated that the property had been declared alienable and disposable only on March 15, 1982, Velazco’s possession prior to March 15, 1982 could not be tacked for purposes of computing Malabanan’s period of possession.
Due to Malabanan’s intervening demise during the appeal in the CA, his heirs elevated the CA’s decision of February 23, 2007 to this Court through a petition for review on certiorari.
The petitioners assert that the ruling in Republic v. Court of Appeals and Corazon Naguit5 (Naguit) remains the controlling doctrine especially if the property involved is agricultural land. In this regard, Naguit ruled that any possession of agricultural land prior to its declaration as alienable and disposable could be counted in the reckoning of the period of possession to perfect title under the Public Land Act (Commonwealth Act No. 141) and the Property Registration Decree. They point out that the ruling in Herbieto, to the effect that the declaration of the land subject of the application for registration as alienable and disposable should also date back to June 12, 1945 or earlier, was a mere obiter dictum considering that the land registration proceedings therein were in fact found and declared void ab initio for lack of publication of the notice of initial hearing.
The petitioners also rely on the ruling in Republic v. T.A.N. Properties, Inc.6 to support their argument that the property had been ipso jure converted into private property by reason of the open, continuous, exclusive and notorious possession by their predecessors-in-interest of an alienable land of the public domain for more than 30 years. According to them, what was essential was that the property had been "converted" into private property through prescription at the time of the application without regard to whether the property sought to be registered was previously classified as agricultural land of the public domain.
As earlier stated, we denied the petition for review on certiorari because Malabanan failed to establish by sufficient evidence possession and occupation of the property on his part and on the part of his predecessors-in interest since June 12, 1945, or earlier.
Petitioners’ Motion for Reconsideration
In their motion for reconsideration, the petitioners submit that the mere classification of the land as alienable or disposable should be deemed sufficient to convert it into patrimonial property of the State. Relying on the rulings in Spouses De Ocampo v. Arlos,7 Menguito v. Republic8 and Republic v. T.A.N. Properties, Inc.,9 they argue that the reclassification of the land as alienable or disposable opened it to acquisitive prescription under the Civil Code; that Malabanan had purchased the property from Eduardo Velazco believing in good faith that Velazco and his predecessors-in-interest had been the real owners of the land with the right to validly transmit title and ownership thereof; that consequently, the ten-year period prescribed by Article 1134 of the Civil Code, in relation to Section 14(2) of the Property Registration Decree, applied in their favor; and that when Malabanan filed the application for registration on February 20, 1998, he had already been in possession of the land for almost 16 years reckoned from 1982, the time when the land was declared alienable and disposable by the State.
The Republic’s Motion for Partial Reconsideration
The Republic seeks the partial reconsideration in order to obtain a clarification with reference to the application of the rulings in Naguit and Herbieto.
Chiefly citing the dissents, the Republic contends that the decision has enlarged, by implication, the interpretation of Section 14(1) of the Property Registration Decree through judicial legislation. It reiterates its view that an applicant is entitled to registration only when the land subject of the application had been declared alienable and disposable since June 12, 1945 or earlier.
Ruling
We deny the motions for reconsideration.
In reviewing the assailed decision, we consider to be imperative to discuss the different classifications of land in relation to the existing applicable land registration laws of the Philippines.
Classifications of land according to ownership
Land, which is an immovable property,10 may be classified as either of public dominion or of private ownership.11Land is considered of public dominion if it either: (a) is intended for public use; or (b) belongs to the State, without being for public use, and is intended for some public service or for the development of the national wealth.12 Land belonging to the State that is not of such character, or although of such character but no longer intended for public use or for public service forms part of the patrimonial property of the State.13 Land that is other than part of the patrimonial property of the State, provinces, cities and municipalities is of private ownership if it belongs to a private individual.
Pursuant to the Regalian Doctrine (Jura Regalia), a legal concept first introduced into the country from the West by Spain through the Laws of the Indies and the Royal Cedulas,14 all lands of the public domain belong to the State.15 This means that the State is the source of any asserted right to ownership of land, and is charged with the conservation of such patrimony.16
All lands not appearing to be clearly under private ownership are presumed to belong to the State. Also, public lands remain part of the inalienable land of the public domain unless the State is shown to have reclassified or alienated them to private persons.17
Classifications of public landsaccording to alienability
Whether or not land of the public domain is alienable and disposable primarily rests on the classification of public lands made under the Constitution. Under the 1935 Constitution,18 lands of the public domain were classified into three, namely, agricultural, timber and mineral.19 Section 10, Article XIV of the 1973 Constitution classified lands of the public domain into seven, specifically, agricultural, industrial or commercial, residential, resettlement, mineral, timber or forest, and grazing land, with the reservation that the law might provide other classifications. The 1987 Constitution adopted the classification under the 1935 Constitution into agricultural, forest or timber, and mineral, but added national parks.20 Agricultural lands may be further classified by law according to the uses to which they may be devoted.21 The identification of lands according to their legal classification is done exclusively by and through a positive act of the Executive Department.22
Based on the foregoing, the Constitution places a limit on the type of public land that may be alienated. Under Section 2, Article XII of the 1987 Constitution, only agricultural lands of the public domain may be alienated; all other natural resources may not be.
Alienable and disposable lands of the State fall into two categories, to wit: (a) patrimonial lands of the State, or those classified as lands of private ownership under Article 425 of the Civil Code,23 without limitation; and (b) lands of the public domain, or the public lands as provided by the Constitution, but with the limitation that the lands must only be agricultural. Consequently, lands classified as forest or timber, mineral, or national parks are not susceptible of alienation or disposition unless they are reclassified as agricultural.24 A positive act of the Government is necessary to enable such reclassification,25 and the exclusive prerogative to classify public lands under existing laws is vested in the Executive Department, not in the courts.26 If, however, public land will be classified as neither agricultural, forest or timber, mineral or national park, or when public land is no longer intended for public service or for the development of the national wealth, thereby effectively removing the land from the ambit of public dominion, a declaration of such conversion must be made in the form of a law duly enacted by Congress or by a Presidential proclamation in cases where the President is duly authorized by law to that effect.27 Thus, until the Executive Department exercises its prerogative to classify or reclassify lands, or until Congress or the President declares that
the State no longer intends the land to be used for public service or for the development of national wealth, the Regalian Doctrine is applicable.
Disposition of alienable public lands
Section 11 of the Public Land Act (CA No. 141) provides the manner by which alienable and disposable lands of the public domain, i.e., agricultural lands, can be disposed of, to wit:
Section 11. Public lands suitable for agricultural purposes can be disposed of only as follows, and not otherwise:
(1) For homestead settlement;(2) By sale;(3) By lease; and(4) By confirmation of imperfect or incomplete titles;
(a) By judicial legalization; or(b) By administrative legalization (free patent).
The core of the controversy herein lies in the proper interpretation of Section 11(4), in relation to Section 48(b) of the Public Land Act, which expressly requires possession by a Filipino citizen of the land since June 12, 1945, or earlier, viz:
Section 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 thereafter, under the Land Registration Act, to wit:
x x x x
(b) 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 acquisition of ownership, since June 12, 1945, or earlier, immediately preceding the filing of the applications 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. (Bold emphasis supplied)
Note that Section 48(b) of the Public Land Act used the words "lands of the public domain" or "alienable and disposable lands of the public domain" to clearly signify that lands otherwise classified, i.e., mineral, forest or timber, or national parks, and lands of patrimonial or private ownership, are outside the coverage of the Public Land Act. What the law does not include, it excludes. The use of the descriptive phrase "alienable and disposable" further limits the coverage of Section 48(b) to only the agricultural lands of the public domain as set forth in Article XII, Section 2 of the 1987 Constitution. Bearing in mind such limitations under the Public Land Act, the applicant must satisfy the following requirements in order for his application to come under Section 14(1) of the Property Registration Decree,28 to wit:
1. The applicant, by himself or through his predecessor-in-interest, has been in possession and occupation of the property subject of the application;2. The possession and occupation must be open, continuous, exclusive, and notorious;3. The possession and occupation must be under a bona fide claim of acquisition of ownership;4. The possession and occupation must have taken place since June 12, 1945, or earlier; and5. The property subject of the application must be an agricultural land of the public domain.
Taking into consideration that the Executive Department is vested with the authority to classify lands of the public domain, Section 48(b) of the Public Land Act, in relation to Section 14(1) of the Property Registration Decree, presupposes that the land subject of the application for registration must have been already classified as agricultural land of the public domain in order for the provision to apply. Thus, absent proof that the land is already classified as agricultural land of the public domain, the Regalian Doctrine applies, and overcomes the presumption that the land is alienable and disposable as laid down in Section 48(b) of the Public Land Act. However, emphasis is placed on
the requirement that the classification required by Section 48(b) of the Public Land Act is classification or reclassification of a public land as agricultural.
The dissent stresses that the classification or reclassification of the land as alienable and disposable agricultural land should likewise have been made on June 12, 1945 or earlier, because any possession of the land prior to such classification or reclassification produced no legal effects. It observes that the fixed date of June 12, 1945 could not be minimized or glossed over by mere judicial interpretation or by judicial social policy concerns, and insisted that the full legislative intent be respected.
We find, however, that the choice of June 12, 1945 as the reckoning point of the requisite possession and occupation was the sole prerogative of Congress, the determination of which should best be left to the wisdom of the lawmakers. Except that said date qualified the period of possession and occupation, no other legislative intent appears to be associated with the fixing of the date of June 12, 1945. Accordingly, the Court should interpret only the plain and literal meaning of the law as written by the legislators.
Moreover, an examination of Section 48(b) of the Public Land Act indicates that Congress prescribed no requirement that the land subject of the registration should have been classified as agricultural since June 12, 1945, or earlier. As such, the applicant’s imperfect or incomplete title is derived only from possession and occupation since June 12, 1945, or earlier. This means that the character of the property subject of the application as alienable and disposable agricultural land of the public domain determines its eligibility for land registration, not the ownership or title over it.
Alienable public land held by a possessor, either personally or through his predecessors-in-interest, openly, continuously and exclusively during the prescribed statutory period is converted to private property by the mere lapse or completion of the period.29 In fact, by virtue of this doctrine, corporations may now acquire lands of the public domain for as long as the lands were already converted to private ownership, by operation of law, as a result of satisfying the requisite period of possession prescribed by the Public Land Act.30 It is for this reason that the property subject of the application of Malabanan need not be classified as alienable and disposable agricultural land of the public domain for the entire duration of the requisite period of possession.
To be clear, then, the requirement that the land should have been classified as alienable and disposable agricultural land at the time of the application for registration is necessary only to dispute the presumption that the land is inalienable.
The declaration that land is alienable and disposable also serves to determine the point at which prescription may run against the State. The imperfect or incomplete title being confirmed under Section 48(b) of the Public Land Act is title that is acquired by reason of the applicant’s possession and occupation of the alienable and disposable agricultural land of the public domain. Where all the necessary requirements for a grant by the Government are complied with through actual physical, open, continuous, exclusive and public possession of an alienable and disposable land of the public domain, the possessor is deemed to have acquired by operation of law not only a right to a grant, but a grant by the Government, because it is not necessary that a certificate of title be issued in order that such a grant be sanctioned by the courts.31
If one follows the dissent, the clear objective of the Public Land Act to adjudicate and quiet titles to unregistered lands in favor of qualified Filipino citizens by reason of their occupation and cultivation thereof for the number of years prescribed by law32 will be defeated. Indeed, we should always bear in mind that such objective still prevails, as a fairly recent legislative development bears out, when Congress enacted legislation (Republic Act No. 10023)33 in order to liberalize stringent requirements and procedures in the adjudication of alienable public land to qualified applicants, particularly residential lands, subject to area limitations.34
On the other hand, if a public land is classified as no longer intended for public use or for the development of national wealth by declaration of Congress or the President, thereby converting such land into patrimonial or private land of the State, the applicable provision concerning disposition and registration is no longer Section 48(b) of the Public Land Act but the Civil Code, in conjunction with Section 14(2) of the Property Registration Decree.35 As such, prescription can now run against the State.
To sum up, we now observe the following rules relative to the disposition of public land or lands of the public domain, namely:
(1) As a general rule and pursuant to the Regalian Doctrine, all lands of the public domain belong to the State and are inalienable. Lands that are not clearly under private ownership are also presumed to belong to the State and, therefore, may not be alienated or disposed;
(2) The following are excepted from the general rule, to wit:
(a) Agricultural lands of the public domain are rendered alienable and disposable through any of the exclusive modes enumerated under Section 11 of the Public Land Act. If the mode is judicial confirmation of imperfect title under Section 48(b) of the Public Land Act, the agricultural land subject of the application needs only to be classified as alienable and disposable as of the time of the application, provided the applicant’s possession and occupation of the land dated back to June 12, 1945, or earlier. Thereby, a conclusive presumption that the applicant has performed all the conditions essential to a government grant arises,36 and the applicant becomes the owner of the land by virtue of an imperfect or incomplete title. By legal fiction, the land has already ceased to be part of the public domain and has become private property.37
(b) Lands of the public domain subsequently classified or declared as no longer intended for public use or for the development of national wealth are removed from the sphere of public dominion and are considered converted into patrimonial lands or lands of private ownership that may be alienated or disposed through any of the modes of acquiring ownership under the Civil Code. If the mode of acquisition is prescription, whether ordinary or extraordinary, proof that the land has been already converted to private ownership prior to the requisite acquisitive prescriptive period is a condition sine qua non in observance of the law (Article 1113, Civil Code) that property of the State not patrimonial in character shall not be the object of prescription.
To reiterate, then, the petitioners failed to present sufficient evidence to establish that they and their predecessors-in-interest had been in possession of the land since June 12, 1945. Without satisfying the requisite character and period of possession - possession and occupation that is open, continuous, exclusive, and notorious since June 12, 1945, or earlier - the land cannot be considered ipso jure converted to private property even upon the subsequent declaration of it as alienable and disposable. Prescription never began to run against the State, such that the land has remained ineligible for registration under Section 14(1) of the Property Registration Decree. Likewise, the land continues to be ineligible for land registration under Section 14(2) of the Property Registration Decree unless Congress enacts a law or the President issues a proclamation declaring the land as no longer intended for public service or for the development of the national wealth. 1âwphi1
WHEREFORE, the Court DENIES the petitioners' Motion for Reconsideration and the respondent's Partial Motion for Reconsideration for their lack of merit.
SO ORDERED.
LUCAS P. BERSAMINAssociate Justice
G.R. No. 108998 August 24, 1994
REPUBLIC OF THE PHILIPPINES, vs CA AND SPOUSES MARIO B. LAPIÑA AND FLOR DE VEGA,
BIDIN, J.:
Can a foreign national apply for registration of title over a parcel of land which he acquired by purchase while still a citizen of the Philippines, from a vendor who has complied with the requirements for registration under the Public Land Act (CA 141)?
The Republic would have us rule on the negative and asks this Court to nullify the decision of the appellate court which affirmed the judgment of the court a quo in granting the application of respondent spouses for registration over the lots in question.
On June 17, 1978, respondent spouses bought Lots 347 and 348, Cad. s38-D, as their residence with a total area of 91.77 sq. m. situated in San Pablo City, from one Cristeta Dazo Belen (Rollo, p. 41). At the time of the purchase, respondent spouses where then natural-born Filipino citizens.
On February 5, 1987, the spouses filed an application for registration of title of the two (2) parcels of land before the Regional Trial Court of San Pablo City, Branch XXXI. This time, however, they were no longer Filipino citizens and have opted to embrace Canadian citizenship through naturalization.
An opposition was filed by the Republic and after the parties have presented their respective evidence, the court a quo rendered a decision confirming private respondents' title to the lots in question, the dispositive portion of which reads as follows:
WHEREFORE, in view of the foregoing, this Court hereby approves the said application and confirms the title and possession of herein applicants over Lots 347 and 348, Ap-04-003755 in the names of spouses Mario B. Lapiña and Flor de Vega, all of legal age, Filipino citizens by birth but now Canadian citizens by naturalization and residing at 14 A. Mabini Street, San Pablo City and/or 201-1170-124 Street, Edmonton, Alberta T5M-OK9, Canada.
Once this Decision becomes final, let the corresponding decree of registration be issued. In the certificate of title to be issued, there shall be annotated an easement of .265 meters road right-of-way.
SO ORDERED. (Rollo, p. 25)
On appeal, respondent court affirmed the decision of the trial court based on the following ratiocination:
In the present case, it is undisputed that both applicants were still Filipino citizens when they bought the land in controversy from its former owner. For this reason, the prohibition against the acquisition of private lands by aliens could not apply. In justice and equity, they are the rightful owners of the subject realty considering also that they had paid for it quite a large sum of money. Their purpose in initiating the instant action is merely to confirm their title over the land, for, as has been passed upon, they had been the owners of the same since 1978. It ought to be pointed out that registration is not a mode of acquiring ownership. The Torrens System was not established as a means for the acquisition of title to private land. It is intended merely to confirm and register the title which one may already have (Municipality of Victorias vs. Court of Appeals, G.R. No. L-31189, March 31, 1987). With particular reference to the main issue at bar, the High Court has ruled that title and ownership over lands within the meaning and for the purposes of the constitutional prohibition dates back to the time of their purchase, not later. The fact that the applicants-appellees are not Filipino citizens now cannot be taken against them for they were not disqualified from acquiring the land in question (Bollozos vs. Yu Tieng Su, G.R. No. L-29442, November 11, 1987). (Rollo, pp. 27-28)
Expectedly, respondent court's disposition did not merit petitioner's approval, hence this present recourse, which was belatedly filed.
Ordinarily, this petition would have been denied outright for having been filed out of time had it not been for the constitutional issue presented therein.
At the outset, petitioner submits that private respondents have not acquired proprietary rights over the subject properties before they acquired Canadian citizenship through naturalization to justify the registration thereof in their favor. It maintains that even privately owned unregistered lands are presumed to be public lands under the principle that lands of whatever classification belong to the State under the Regalian doctrine. Thus, before the issuance of the certificate of title, the occupant is not in the jurisdical sense the true owner of the land since it still pertains to the State. Petitioner further argued that it is only when the court adjudicates the land to the applicant for confirmation of title would the land become privately owned land, for in the same proceeding, the court may declare it public land, depending on the evidence.
As found by the trial court:
The evidence thus presented established that applicants, by themselves and their predecessors-in-interest, had been in open, public, peaceful, continuous, exclusive and notorious possession and occupation of the two adjacent parcels of land applied for registration of title under a bona-fide claim of ownership long before June 12, 1945. Such being the case, it is conclusively presumed that all the conditions essential to the confirmation of their title over the two adjacent parcels of land are sought to be registered have been complied with thereby entitling them to the issuance of the corresponding certificate of title pursuant to the provisions of Presidential Decree No. 1529, otherwise known as the Property Registration Decree. (Rollo, p. 26)
Respondent court echoed the court a quo's observation, thus:
The land sought to be registered has been declared to be within the alienable and disposable zone established by the Bureau of Forest Development (Exhibit "P"). The investigation conducted by the Bureau of Lands, Natural Resources District (IV-2) reveals that the disputed realty had been occupied by the applicants "whose house of strong materials stands thereon"; that it had been declared for taxation purposes in the name of applicants-spouses since 1979; that they acquired the same by means of a public instrument entitled "Kasulatan ng Bilihang Tuluyan" duly executed by the vendor, Cristeta Dazo Belen, on June 17, 1978 (Exhibits "I" and "J"); and that applicants and their predecessors in interest had been in possession of the land for more than 30 years prior to the filing of the application for registration. But what is of great significance in the instant case is the circumstance that at the time the applicants purchased the subject lot in 1978, both of them were Filipino citizens such that when they filed their application for registration in 1987, ownership over the land in dispute had already passed to them. (Rollo, p., 27)
The Republic disagrees with the appellate court's concept of possession and argues:
17. The Court of Appeals found that the land was declared for taxation purposes in the name of respondent spouses only since 1979. However, tax declarations or reality tax payments of property are not conclusive evidence of ownership. (citing cases)
18. Then again, the appellate court found that "applicants (respondents) and their predecessors-in-interest had been in possession of the land for more than 30 years prior to the filing of the application for registration." This is not, however, the same as saying that respondents have been in possession "since June 12, 1945." (PD No. 1073, amending Sec. 48 [b], CA NO. 141; sec. also Sec. 14, PD No. 1529). So there is a void in respondents' possession. They fall short of the required possession since June 12, 1945 or prior thereto. And, even if they needed only to prove thirty (30) years possession prior to the filing of their application (on February 5, 1987), they would still be short of the required possession if the starting point is 1979 when, according to the Court of Appeals, the land was declared for taxation purposes in their name. (Rollo, pp. 14-15)
The argument is myopic, to say the least. Following the logic of petitioner, any transferee is thus foreclosed to apply for registration of title over a parcel of land notwithstanding the fact that the transferor, or his predecessor-in-interest has been in open, notorious and exclusive possession thereof for thirty (30) years or more. This is not, however, what the law provides.
As petitioner itself argues, Section 48 of the Public Land Act (CA 141) reads:
Sec. 48. The following-described citizens of the Philippines, occupying lands of the public domain or claiming interest therein, but whose titles have not been perfected or completed, may apply to the Court of First Instance (now Regional Trial Court) 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 wars 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. (Emphasis supplied)
As amended by PD 1073:
Sec. 4. The provisions of Section 48(b) and Section 48(c), Chapter VIII, of the Public Land Act are hereby amended in the sense that these provisions shall apply only to alienable and disposable lands of the public domain which have been in open, continuous, exclusive and notorious possession and occupation by the applicant himself or thru his predecessor-in-interest, under a bona fide claim of acquisition or ownership, since June 12, 1945.
It must be noted that with respect to possession and occupation of the alienable and disposable lands of the public domain, the law employs the terms "by themselves", "the applicant himself or through his predecessor-in-interest". Thus, it matters not whether the vendee/applicant has been in possession of the subject property for only a day so long as the period and/or legal requirements for confirmation of title has been complied with by his predecessor-in-interest, the said period is tacked to his possession. In the case at bar, respondents' predecessors-in-interest have been in open, continuous, exclusive and notorious possession of the disputed land not only since June 12, 1945, but even as early as 1937. Petitioner does not deny this except that respondent spouses, in its perception, were in possession of the land sought to be registered only in 1978 and therefore short of the required length of time. As aforesaid, the disputed parcels of land were acquired by private respondents through their predecessors-in-interest, who, in turn, have been in open and continued possession thereof since 1937. Private respondents stepped into the shoes of their predecessors-in-interest and by virtue thereof, acquired all the legal rights necessary to confirm what could otherwise be deemed as an imperfect title.
At this juncture, petitioner's reliance in Republic v. Villanueva (114 SCRA 875 [1982]) deserves scant consideration. There, it was held that before the issuance of the certificate of title, the occupant is not in the juridical sense the true owner of the land since it still pertains to the State.
Suffice it to state that the ruling in Republic v. Villanueva (supra), has already been abandoned in the 1986 case of Director of Lands v. Intermediate Appellate Court (146 SCRA 509; and reiterated in Director of Lands v. Iglesia ni Cristo, 200 SCRA 606 [1991]) where the Court, through then Associate Justice, now Chief Justice Narvasa, declared that:
(The weight of authority is) that 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 and without the need of judicial or other sanction, ceases to be public land and becomes private property. . . .
Herico in particular, appears to be squarely affirmative:
. . . Secondly, under the provisions of Republic Act No. 1942, which the respondent Court held to be inapplicable to the petitioner's case, with the latter's proven occupation and cultivation for more than 30 years since 1914, by himself and by his predecessors-in-interest, title over the land has vested on petitioner so as to segregate the land from the mass of public land. Thereafter, it is no longer disposable under the Public Land Act as by free patent . . . xxx xxx xxx
As interpreted in several cases, when the conditions as specified in the foregoing provision are complied with, the possessor is deemed to have acquired, by operation of law, a right to a grant, a government grant, without the necessity of a certificate of title being issued. The land, therefore, ceases to be of the public domain and beyond the authority of the Director of Lands to dispose of. The application for confirmation is mere formality, the lack of which does not affect the legal sufficiency of the title as would be evidenced by the patent and the Torrens title to be issued upon the strength of said patent.
Nothing can more clearly demonstrate the logical inevitability of considering possession of public land which is of the character and duration prescribed by the statute as the equivalent of an express grant from the State than the dictum of the statute itself (Section 48 [b]) that the possessor(s) ". . . shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title ..." No proof being admissible to overcome a conclusive presumption, confirmation proceedings would, in truth be little more than a formality, at the most limited to ascertaining whether the possession claims is of the required character and length of time; and registration thereunder would not confer title, but simply recognize a title already vested. The proceedings would not originally convert the land from public to private land, but only confirm such a conversion already affected by operation of law from the moment the required period of possession became complete. As was so well put in Cariño, ". . .(There are indications that registration was expected from all, but none sufficient to show that, for want of it, ownership actually gained would be lost. The effect of the proof, wherever made, was not to confer title, but simply to establish it, as already conferred by the decree, if not by earlier law. (Emphasis supplied)
Subsequent cases have hewed to the above pronouncement such that open, continuous and exclusive possession for at least 30 years of alienable public land ipso jure converts the same to private property (Director of Lands v. IAC, 214 SCRA 604 [1992]; Pineda v. CA, 183 SCRA 602 [1990]). This means that occupation and cultivation for more than 30 years by an applicant and his predecessors-in-interest, vest title on such applicant so as to segregate the land from the mass of public and (National Power Corporation v. CA, 218 SCRA 41 [1993]).
The Public Land Act requires that the applicant must prove that (a) the land is alienable public land and (b) his possession, in the concept above stated, must be either since time immemorial or for the period prescribed in the Public Land Act (Director of Lands v. Buyco, 216 SCRA 78 [1992]). When the conditions set by law are complied with, the possessor of the land, by operation of law, acquires a right to a grant, a government grant, without the necessity of a certificate of title being issued (National Power Corporation v. CA, supra). As such, the land ceases to be a part of the public domain and goes beyond the authority of the Director of Lands to dispose of.
In other words, the Torrens system was not established as a means for the acquisition of title to private land (Municipality of Victorias v. CA, 149 SCRA 32 [1987]). It merely confirms, but does not confer ownership. As could be gleaned from the evidence adduced, private respondents were able to establish the nature of possession of their predecessors-in-interest. Evidence was offered to prove that their predecessors-in-interest had paid taxes on the subject land and introduced improvements thereon (Exhibits "F" to "F9"). A certified true copy of the affidavit executed by Cristeta Dazo and her sister Simplicia was also formally offered to prove that the subject parcels of land were inherited by vendor Cristeta Dazo from her father Pedro Dazo with the conformity of her only sister Simplicia (Exhibit "G"). Likewise, a report from the Bureau of Lands was presented in evidence together with a letter from the Bureau of Forest Development, to prove that the questioned lots were part of the alienable and disposable zone of the government and that no forestry interest was affected (CA GR No. 28953, Records, p. 33).
In the main, petitioner seeks to defeat respondents' application for registration of title on the ground of foreign nationality. Accordingly, the ruling in Director of Lands v. Buyco (supra) supports petitioner's thesis.
We disagree.
In Buyco, the applicants therein were likewise foreign nationals but were natural-born Filipino citizens at the time of their supposed acquisition of the property. But this is where the similarity ends. The applicants in Buyco sought to register a large tract of land under the provisions of the Land Registration Act, and in the alternative, under the provisions of the Public Land Act. The land registration court decided in favor of the applicants and was affirmed by the appellate court on appeal. The Director of Lands brought the matter before us on review and we reversed.
This Court, speaking through Justice Davide, Jr., stated:
As could be gleaned from the evidence adduced, the private respondents do not rely on fee simple ownership based on a Spanish grant or possessory information title under Section 19 of the Land Registration Act; the private respondents did not present any proof that they or their predecessors-in-interest derived title from an old Spanish grant such as (a) the "titulo real" or royal grant (b) the "concession especial" or especial grant; (c) the "composicion con el estado" title or adjustment title; (d) the "titulo de compra" or title by purchase; and (e) the "informacion posesoria" or possessory information title, which could become a "titulo gratuito" or a gratuitous title (Director of Forestry v. Muñoz, 23 SCRA 1183 [1968]). The primary basis of their claim is possession, by themselves and their predecessors-in-interest, since time immemorial.
If indeed private respondents and their predecessors have been in possession since time immemorial, the rulings of both courts could be upheld for, as this Court stated in Oh Cho v. Director of Lands (75 Phil. 890 [1946]):
. . . All lands that were not acquired from the Government, either by purchase or by grant, belong to the public domain. An exception to the rule would be any land that should have been in the possession of an occupant and of his predecessors in interest since time immemorial, for such possession would justify the presumption that the land had never been part of the public domain or that if had been a private property even before the Spanish conquest (Cariño v. Insular Government, 41 Phil 935 [1909]; 212 U.S. 449; 53 Law. Ed., 594) The applicant does not come under the exception, for the earliest possession of the lot by his first predecessor in interest began in 1880.
. . . alienable public land held by a possessor, personally or through his predecessors-in-interest, openly, continuously and exclusively for the prescribed statutory period (30 years under the Public Land Act, as amended) is converted to private property by the mere lapse or completion of said period, ipso jure. (Director of Lands v. Intermediate Appellate Court, supra)
It is obvious from the foregoing rule that the applicant must prove that (a) the land is alienable public land and (b) his possession, in the concept above stated, must be either since time immemorial, as ruled in both Cariño and Susi, or for the period prescribed in the Public Land Act. As to the latter, this Court, in Gutierrez Hermanos v. Court of Appeals (178 SCRA 37 [1989]), adopted the rule enunciated by the Court of Appeals, per then Associate Justice Hugo R. Gutierrez, Jr., . . ., that an applicant for registration under Section 48 of the Public Land Act must secure a certification from the Government that the lands which he claims to have possessed as owner for more than thirty (30) years are alienable and disposable. It is the burden of the applicant to prove its positive averments.
In the instant case, private respondents offered no evidence at all to prove that the property subject of the application is an alienable and disposable land. On the contrary, the entire property . . . was pasture land (and therefore inalienable under the then 1973 Constitution).
. . . (P)rivate respondents' evidence miserably failed to establish their imperfect title to the property in question. Their allegation of possession since time immemorial, . . ., is patently baseless. . . . When referring to possession, specifically "immemorial possession," it means possession of which no man living has seen the beginning, and the existence of which he has learned from his elders (Susi v. Razon, supra). Such possession was never present in the case of private respondents. . . .
. . ., there does not even exist a reasonable basis for the finding that the private respondents and their predecessors-in-interest possessed the land for more than eighty (80) years, . . .
xxx xxx xxx
To this Court's mind, private respondents failed to prove that (their predecessor-in-interest) had possessed the property allegedly covered by Tax Declaration No. 15853 and made the subject of both his last will and testament and the project of partition of his estate among his heirs — in such manner as to remove the same from the public domain under the Cariño and Susi doctrines. Thus, (when the predecessor-in-interest) died on 31 May 1937, he transmitted no right whatsoever, with respect to the said property, to his heirs. This being the case, his possession cannot be tacked to that of the private respondents for the latter's benefit pursuant to Section 48(b) of the Public Land Act, the alternative ground relied upon in their application . . .
xxx xxx xxx
Considering that the private respondents became American citizens before such filing, it goes without saying that they had acquired no vested right, consisting of an imperfect title, over the property before they lost their Philippine citizenship. (Emphasis supplied)
Clearly, the application in Buyco were denied registration of title not merely because they were American citizens at the time of their application therefor. Respondents therein failed to prove possession of their predecessor-in-interest since time immemorial or possession in such a manner that the property has been segregated from public domain; such that at the time of their application, as American citizens, they have acquired no vested rights over the parcel of land.
In the case at bar, private respondents were undoubtedly natural-born Filipino citizens at the time of the acquisition of the properties and by virtue thereof, acquired vested rights thereon, tacking in the process, the possession in the concept of owner and the prescribed period of time held by their predecessors-in-interest under the Public Land Act. In addition, private respondents have constructed a house of strong materials on the contested property, now occupied by respondent Lapiñas mother.
But what should not be missed in the disposition of this case is the fact that the Constitution itself allows private respondents to register the contested parcels of land in their favor. Sections 7 and 8 of Article XII of the Constitution contain the following pertinent provisions, to wit:
Sec. 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain.
Sec. 8. Notwithstanding the provisions of Section 7 of this Article, a natural-born citizen of the Philippines who has lost his Philippine citizenship may be a transferee of private lands, subject to limitations provided by law. (Emphasis supplied)
Section 8, Article XII of the 1987 Constitution above quoted is similar to Section 15, Article XIV of the then 1973 Constitution which reads:
Sec. 15. Notwithstanding the provisions of Section 14 of this Article, a natural-born citizen of the Philippines who has lost his citizenship may be a transferee of private land, for use by him as his residence, as the Batasang Pambansa may provide.
Pursuant thereto, Batas Pambansa Blg. 185 was passed into law, the relevant provision of which provides:
Sec. 2. Any natural-born citizen of the Philippines who has lost his Philippine citizenship and who has the legal capacity to enter into a contract under Philippine laws may be a transferee of a private land up to a maximum area of one thousand square meters, in the case of urban land, or one hectare in the case of rural land, to be used by him as his residence. In the case of married couples,
one of them may avail of the privilege herein granted; Provided, That if both shall avail of the same, the total area acquired shall not exceed the maximum herein fixed.
In case the transferee already owns urban or rural lands for residential purposes, he shall still be entitled to be a transferee of an additional urban or rural lands for residential purposes which, when added to those already owned by him, shall not exceed the maximum areas herein authorized.
From the adoption of the 1987 Constitution up to the present, no other law has been passed by the legislature on the same subject. Thus, what governs the disposition of private lands in favor of a natural-born Filipino citizen who has lost his Philippine citizenship remains to be BP 185.
Even if private respondents were already Canadian citizens at the time they applied for registration of the properties in question, said properties as discussed above were already private lands; consequently, there could be no legal impediment for the registration thereof by respondents in view of what the Constitution ordains. The parcels of land sought to be registered no longer form part of the public domain. They are already private in character since private respondents' predecessors-in-interest have been in open, continuous and exclusive possession and occupation thereof under claim of ownership prior to June 12, 1945 or since 1937. The law provides that a natural-born citizen of the Philippines who has lost his Philippine citizenship may be a transferee of a private land up to a maximum area of 1,000 sq.m., if urban, or one (1) hectare in case of rural land, to be used by him as his residence (BP 185).
It is undisputed that private respondents, as vendees of a private land, were natural-born citizens of the Philippines. For the purpose of transfer and/or acquisition of a parcel of residential land, it is not significant whether private respondents are no longer Filipino citizens at the time they purchased or registered the parcels of land in question. What is important is that private respondents were formerly natural-born citizens of the Philippines, and as transferees of a private land, they could apply for registration in accordance with the mandate of Section 8, Article XII of the Constitution. Considering that private respondents were able to prove the requisite period and character of possession of their predecessors-in-interest over the subject lots, their application for registration of title must perforce be approved.
The dissenting opinion, however, states that the requirements in BP 185, must also be complied with by private respondents. Specifically, it refers to Section 6, which provides:
Sec. 6. In addition to the requirements provided for in other laws for the registration of titles to lands, no private land shall be transferred under this Act, unless the transferee shall submit to the register of deeds of the province or city where the property is located a sworn statement showing the date and place of his birth; the names and addresses of his parents, of his spouse and children, if any; the area, the location and the mode of acquisition of his landholdings in the Philippines, if any; his intention to reside permanently in the Philippines; the date he lost his Philippine citizenship and the country of which he is presently a citizen; and such other information as may be required under Section 8 of this Act.
The Court is of the view that the requirements in Sec. 6 of BP 185 do not apply in the instant case since said requirements are primarily directed to the register of deeds before whom compliance therewith is to be submitted. Nowhere in the provision is it stated, much less implied, that the requirements must likewise be submitted before the land registration court prior to the approval of an application for registration of title. An application for registration of title before a land registration court should not be confused with the issuance of a certificate of title by the register of deeds. It is only when the judgment of the land registration court approving the application for registration has become final that a decree of registration is issued. And that is the time when the requirements of Sec. 6, BP 185, before the register of deeds should be complied with by the applicants. This decree of registration is the one that is submitted to the office of the register of deeds for issuance of the certificate of title in favor of the applicant. Prior to the issuance of the decree of registration, the register of deeds has no participation in the approval of the application for registration of title as the decree of registration is yet to be issued.
WHEREFORE, the petition is DISMISSED and the decision appealed from is hereby AFFIRMED.
SO ORDERED. Narvasa, C.J., Cruz, Feliciano, Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Quiason, Puno, Vitug, Kapunan, and Mendoza, JJ.,concur.
G.R. No. L-17587 September 12, 1967
PHILIPPINE BANKING CORPORATION, representing the estate of JUSTINA SANTOS Y CANON FAUSTINO, deceased, plaintiff-appellant, vs.LUI SHE in her own behalf and as administratrix of the intestate estate of Wong Heng, deceased,defendant-appellant.
Nicanor S. Sison for plaintiff-appellant.Ozaeta, Gibbs & Ozaeta for defendant-appellant.
CASTRO, J.:
Justina Santos y Canon Faustino and her sister Lorenzo were the owners in common of a piece of land in Manila. This parcel, with an area of 2,582.30 square meters, is located on Rizal Avenue and opens into Florentino Torres street at the back and Katubusan street on one side. In it are two residential houses with entrance on Florentino Torres street and the Hen Wah Restaurant with entrance on Rizal Avenue. The sisters lived in one of the houses, while Wong Heng, a Chinese, lived with his family in the restaurant. Wong had been a long-time lessee of a portion of the property, paying a monthly rental of P2,620.
On September 22, 1957 Justina Santos became the owner of the entire property as her sister died with no other heir. Then already well advanced in years, being at the time 90 years old, blind, crippled and an invalid, she was left with no other relative to live with. Her only companions in the house were her 17 dogs and 8 maids. Her otherwise dreary existence was brightened now and then by the visits of Wong's four children who had become the joy of her life. Wong himself was the trusted man to whom she delivered various amounts for safekeeping, including rentals from her property at the corner of Ongpin and Salazar streets and the rentals which Wong himself paid as lessee of a part of the Rizal Avenue property. Wong also took care of the payment; in her behalf, of taxes, lawyers' fees, funeral expenses, masses, salaries of maids and security guard, and her household expenses.
"In grateful acknowledgment of the personal services of the lessee to her," Justina Santos executed on November 15, 1957 a contract of lease (Plff Exh. 3) in favor of Wong, covering the portion then already leased to him and another portion fronting Florentino Torres street. The lease was for 50 years, although the lessee was given the right to withdraw at any time from the agreement; the monthly rental was P3,120. The contract covered an area of 1,124 square meters. Ten days later (November 25), the contract was amended (Plff Exh. 4) so as to make it cover the entire property, including the portion on which the house of Justina Santos stood, at an additional monthly rental of P360. For his part Wong undertook to pay, out of the rental due from him, an amount not exceeding P1,000 a month for the food of her dogs and the salaries of her maids.
On December 21 she executed another contract (Plff Exh. 7) giving Wong the option to buy the leased premises for P120,000, payable within ten years at a monthly installment of P1,000. The option, written in Tagalog, imposed on him the obligation to pay for the food of the dogs and the salaries of the maids in her household, the charge not to exceed P1,800 a month. The option was conditioned on his obtaining Philippine citizenship, a petition for which was then pending in the Court of First Instance of Rizal. It appears, however, that this application for naturalization was withdrawn when it was discovered that he was not a resident of Rizal. On October 28, 1958 she filed a petition to adopt him and his children on the erroneous belief that adoption would confer on them Philippine citizenship. The error was discovered and the proceedings were abandoned.
On November 18, 1958 she executed two other contracts, one (Plff Exh. 5) extending the term of the lease to 99 years, and another (Plff Exh. 6) fixing the term of the option of 50 years. Both contracts are written in Tagalog.
In two wills executed on August 24 and 29, 1959 (Def Exhs. 285 & 279), she bade her legatees to respect the contracts she had entered into with Wong, but in a codicil (Plff Exh. 17) of a later date (November 4, 1959) she appears to have a change of heart. Claiming that the various contracts were made by her because of machinations and inducements practiced by him, she now directed her executor to secure the annulment of the contracts.
On November 18 the present action was filed in the Court of First Instance of Manila. The complaint alleged that the contracts were obtained by Wong "through fraud, misrepresentation, inequitable conduct, undue influence and abuse of confidence and trust of and (by) taking advantage of the helplessness of the plaintiff and were made to circumvent the constitutional provision prohibiting aliens from acquiring lands in the Philippines and also of the Philippine Naturalization Laws." The court was asked to direct the Register of Deeds of Manila to cancel the registration of the contracts and to order Wong to pay Justina Santos the additional rent of P3,120 a month from November 15, 1957 on the allegation that the reasonable rental of the leased premises was P6,240 a month.
In his answer, Wong admitted that he enjoyed her trust and confidence as proof of which he volunteered the information that, in addition to the sum of P3,000 which he said she had delivered to him for safekeeping, another sum of P22,000 had been deposited in a joint account which he had with one of her maids. But he denied having taken advantage of her trust in order to secure the execution of the contracts in question. As counterclaim he sought the recovery of P9,210.49 which he said she owed him for advances.
Wong's admission of the receipt of P22,000 and P3,000 was the cue for the filing of an amended complaint. Thus on June 9, 1960, aside from the nullity of the contracts, the collection of various amounts allegedly delivered on different occasions was sought. These amounts and the dates of their delivery are P33,724.27 (Nov. 4, 1957); P7,344.42 (Dec. 1, 1957); P10,000 (Dec. 6, 1957); P22,000 and P3,000 (as admitted in his answer). An accounting of the rentals from the Ongpin and Rizal Avenue properties was also demanded.
In the meantime as a result of a petition for guardianship filed in the Juvenile and Domestic Relations Court, the Security Bank & Trust Co. was appointed guardian of the properties of Justina Santos, while Ephraim G. Gochangco was appointed guardian of her person.
In his answer, Wong insisted that the various contracts were freely and voluntarily entered into by the parties. He likewise disclaimed knowledge of the sum of P33,724.27, admitted receipt of P7,344.42 and P10,000, but contended that these amounts had been spent in accordance with the instructions of Justina Santos; he expressed readiness to comply with any order that the court might make with respect to the sums of P22,000 in the bank and P3,000 in his possession.
The case was heard, after which the lower court rendered judgment as follows:
[A]ll the documents mentioned in the first cause of action, with the exception of the first which is the lease contract of 15 November 1957, are declared null and void; Wong Heng is condemned to pay unto plaintiff thru guardian of her property the sum of P55,554.25 with legal interest from the date of the filing of the amended complaint; he is also ordered to pay the sum of P3,120.00 for every month of his occupation as lessee under the document of lease herein sustained, from 15 November 1959, and the moneys he has consigned since then shall be imputed to that; costs against Wong Heng.
From this judgment both parties appealed directly to this Court. After the case was submitted for decision, both parties died, Wong Heng on October 21, 1962 and Justina Santos on December 28, 1964. Wong was substituted by his wife, Lui She, the other defendant in this case, while Justina Santos was substituted by the Philippine Banking Corporation.
Justina Santos maintained — now reiterated by the Philippine Banking Corporation — that the lease contract (Plff Exh. 3) should have been annulled along with the four other contracts (Plff Exhs. 4-7) because it lacks mutuality; because it included a portion which, at the time, was in custodia legis; because the contract was obtained in violation of the fiduciary relations of the parties; because her consent was obtained through undue influence, fraud and misrepresentation; and because the lease contract, like the rest of the contracts, is absolutely simulated.
Paragraph 5 of the lease contract states that "The lessee may at any time withdraw from this agreement." It is claimed that this stipulation offends article 1308 of the Civil Code which provides that "the contract must bind both contracting parties; its validity or compliance cannot be left to the will of one of them."
We have had occasion to delineate the scope and application of article 1308 in the early case of Taylor v. Uy Tieng Piao.1 We said in that case:
Article 1256 [now art. 1308] of the Civil Code in our opinion creates no impediment to the insertion in a contract for personal service of a resolutory condition permitting the cancellation of the contract by one of the parties. Such a stipulation, as can be readily seen, does not make either the validity or the fulfillment of the contract dependent upon the will of the party to whom is conceded the privilege of cancellation; for where the contracting parties have agreed that such option shall exist, the exercise of the option is as much in the fulfillment of the contract as any other act which may have been the subject of agreement. Indeed, the cancellation of a contract in accordance with conditions agreed upon beforehand is fulfillment.2
And so it was held in Melencio v. Dy Tiao Lay 3 that a "provision in a lease contract that the lessee, at any time before he erected any building on the land, might rescind the lease, can hardly be regarded as a violation of article 1256 [now art. 1308] of the Civil Code."
The case of Singson Encarnacion v. Baldomar 4 cannot be cited in support of the claim of want of mutuality, because of a difference in factual setting. In that case, the lessees argued that they could occupy the premises as long as they paid the rent. This is of course untenable, for as this Court said, "If this defense were to be allowed, so long as defendants elected to continue the lease by continuing the payment of the rentals, the owner would never be able to discontinue it; conversely, although the owner should desire the lease to continue the lessees could effectively thwart his purpose if they should prefer to terminate the contract by the simple expedient of stopping payment of the rentals." Here, in contrast, the right of the lessee to continue the lease or to terminate it is so circumscribed by the term of the contract that it cannot be said that the continuance of the lease depends upon his will. At any rate, even if no term had been fixed in the agreement, this case would at most justify the fixing of a period5 but not the annulment of the contract.
Nor is there merit in the claim that as the portion of the property formerly owned by the sister of Justina Santos was still in the process of settlement in the probate court at the time it was leased, the lease is invalid as to such portion. Justina Santos became the owner of the entire property upon the death of her sister Lorenzo on September 22, 1957 by force of article 777 of the Civil Code. Hence, when she leased the property on November 15, she did so already as owner thereof. As this Court explained in upholding the sale made by an heir of a property under judicial administration:
That the land could not ordinarily be levied upon while in custodia legis does not mean that one of the heirs may not sell the right, interest or participation which he has or might have in the lands under administration. The ordinary execution of property in custodia legis is prohibited in order to avoid interference with the possession by the court. But the sale made by an heir of his share in an inheritance, subject to the result of the pending administration, in no wise stands in the way of such administration.6
It is next contended that the lease contract was obtained by Wong in violation of his fiduciary relationship with Justina Santos, contrary to article 1646, in relation to article 1941 of the Civil Code, which disqualifies "agents (from leasing) the property whose administration or sale may have been entrusted to them." But Wong was never an agent of Justina Santos. The relationship of the parties, although admittedly close and confidential, did not amount to an agency so as to bring the case within the prohibition of the law.
Just the same, it is argued that Wong so completely dominated her life and affairs that the contracts express not her will but only his. Counsel for Justina Santos cites the testimony of Atty. Tomas S. Yumol who said that he prepared the lease contract on the basis of data given to him by Wong and that she told him that "whatever Mr. Wong wants must be followed."7
The testimony of Atty. Yumol cannot be read out of context in order to warrant a finding that Wong practically dictated the terms of the contract. What this witness said was:
Q Did you explain carefully to your client, Doña Justina, the contents of this document before she signed it?
A I explained to her each and every one of these conditions and I also told her these conditions were quite onerous for her, I don't really know if I have expressed my opinion, but I told her that we would rather not execute any contract anymore, but to hold it as it was before, on a verbal month to month contract of lease.
Q But, she did not follow your advice, and she went with the contract just the same?
A She agreed first . . .
Q Agreed what?
A Agreed with my objectives that it is really onerous and that I was really right, but after that, I was called again by her and she told me to follow the wishes of Mr. Wong Heng.
x x x x x x x x x
Q So, as far as consent is concerned, you were satisfied that this document was perfectly proper?
x x x x x x x x x
A Your Honor, if I have to express my personal opinion, I would say she is not, because, as I said before, she told me — "Whatever Mr. Wong wants must be followed."8
Wong might indeed have supplied the data which Atty. Yumol embodied in the lease contract, but to say this is not to detract from the binding force of the contract. For the contract was fully explained to Justina Santos by her own lawyer. One incident, related by the same witness, makes clear that she voluntarily consented to the lease contract. This witness said that the original term fixed for the lease was 99 years but that as he doubted the validity of a lease to an alien for that length of time, he tried to persuade her to enter instead into a lease on a month-to-month basis. She was, however, firm and unyielding. Instead of heeding the advice of the lawyer, she ordered him, "Just follow Mr. Wong Heng."9 Recounting the incident, Atty. Yumol declared on cross examination:
Considering her age, ninety (90) years old at the time and her condition, she is a wealthy woman, it is just natural when she said "This is what I want and this will be done." In particular reference to this contract of lease, when I said "This is not proper," she said — "You just go ahead, you prepare that, I am the owner, and if there is any illegality, I am the only one that can question the illegality."10
Atty. Yumol further testified that she signed the lease contract in the presence of her close friend, Hermenegilda Lao, and her maid, Natividad Luna, who was constantly by her side.11 Any of them could have testified on the undue influence that Wong supposedly wielded over Justina Santos, but neither of them was presented as a witness. The truth is that even after giving his client time to think the matter over, the lawyer could not make her change her mind. This persuaded the lower court to uphold the validity of the lease contract against the claim that it was procured through undue influence.
Indeed, the charge of undue influence in this case rests on a mere inference12 drawn from the fact that Justina Santos could not read (as she was blind) and did not understand the English language in which the contract is written, but that inference has been overcome by her own evidence.
Nor is there merit in the claim that her consent to the lease contract, as well as to the rest of the contracts in question, was given out of a mistaken sense of gratitude to Wong who, she was made to believe, had saved her and her sister from a fire that destroyed their house during the liberation of Manila. For while a witness claimed that the sisters were saved by other persons (the brothers Edilberto and Mariano Sta. Ana)13 it was Justina Santos herself who, according to her own witness, Benjamin C. Alonzo, said "very emphatically" that she and her sister would have perished in the fire had it not been for Wong.14 Hence the recital in the deed of conditional option (Plff Exh. 7) that "[I]tong si Wong Heng ang siyang nagligtas sa aming dalawang magkapatid sa halos ay tiyak na kamatayan", and the equally emphatic avowal of gratitude in the lease contract (Plff Exh. 3).
As it was with the lease contract (Plff Exh. 3), so it was with the rest of the contracts (Plff Exhs. 4-7) — the consent of Justina Santos was given freely and voluntarily. As Atty. Alonzo, testifying for her, said:
[I]n nearly all documents, it was either Mr. Wong Heng or Judge Torres and/or both. When we had conferences, they used to tell me what the documents should contain. But, as I said, I would always ask the old woman about them and invariably the old woman used to tell me: "That's okay. It's all right."15
But the lower court set aside all the contracts, with the exception of the lease contract of November 15, 1957, on the ground that they are contrary to the expressed wish of Justina Santos and that their considerations are fictitious. Wong stated in his deposition that he did not pay P360 a month for the additional premises leased to him, because she did not want him to, but the trial court did not believe him. Neither did it believe his statement that he paid P1,000 as consideration for each of the contracts (namely, the option to buy the leased premises, the extension of the lease to 99 years, and the fixing of the term of the option at 50 years), but that the amount was returned to him by her for safekeeping. Instead, the court relied on the testimony of Atty. Alonzo in reaching the conclusion that the contracts are void for want of consideration.
Atty. Alonzo declared that he saw no money paid at the time of the execution of the documents, but his negative testimony does not rule out the possibility that the considerations were paid at some other time as the contracts in fact recite. What is more, the consideration need not pass from one party to the other at the time a contract is executed because the promise of one is the consideration for the other.16
With respect to the lower court's finding that in all probability Justina Santos could not have intended to part with her property while she was alive nor even to lease it in its entirety as her house was built on it, suffice it to quote the testimony of her own witness and lawyer who prepared the contracts (Plff Exhs. 4-7) in question, Atty. Alonzo:
The ambition of the old woman, before her death, according to her revelation to me, was to see to it that these properties be enjoyed, even to own them, by Wong Heng because Doña Justina told me that she did not have any relatives, near or far, and she considered Wong Heng as a son and his children her grandchildren; especially her consolation in life was when she would hear the children reciting prayers in Tagalog.17
She was very emphatic in the care of the seventeen (17) dogs and of the maids who helped her much, and she told me to see to it that no one could disturb Wong Heng from those properties. That is why we thought of the ninety-nine (99) years lease; we thought of adoption, believing that thru adoption Wong Heng might acquire Filipino citizenship; being the adopted child of a Filipino citizen.18
This is not to say, however, that the contracts (Plff Exhs. 3-7) are valid. For the testimony just quoted, while dispelling doubt as to the intention of Justina Santos, at the same time gives the clue to what we view as a scheme to circumvent the Constitutional prohibition against the transfer of lands to aliens. "The illicit purpose then becomes the illegal causa"19 rendering the contracts void.
Taken singly, the contracts show nothing that is necessarily illegal, but considered collectively, they reveal an insidious pattern to subvert by indirection what the Constitution directly prohibits. To be sure, a lease to an alien for a reasonable period is valid. So is an option giving an alien the right to buy real property on condition that he is granted Philippine citizenship. As this Court said in Krivenko v. Register of Deeds:20
[A]liens are not completely excluded by the Constitution from the use of lands for residential purposes. Since their residence in the Philippines is temporary, they may be granted temporary rights such as a lease contract which is not forbidden by the Constitution. Should they desire to remain here forever and share our fortunes and misfortunes, Filipino citizenship is not impossible to acquire.
But if an alien is given not only a lease of, but also an option to buy, a piece of land, by virtue of which the Filipino owner cannot sell or otherwise dispose of his property,21 this to last for 50 years, then it becomes clear that the arrangement is a virtual transfer of ownership whereby the owner divests himself in stages not only of the right to enjoy the land ( jus possidendi, jus utendi, jus fruendi and jus abutendi) but also of the right to dispose of it ( jus disponendi) — rights the sum total of which make up ownership. It is just as if today the possession is transferred, tomorrow, the use, the next day, the disposition, and so on, until ultimately all the rights of which ownership is made up are consolidated in an alien. And yet this is just exactly what the parties in this case did within the space of one year, with the result that Justina Santos' ownership of her property was reduced to a hollow concept. If this can be done, then the Constitutional ban against alien landholding in the Philippines, as announced in Krivenko v. Register of Deeds,22 is indeed in grave peril.
It does not follow from what has been said, however, that because the parties are in pari delicto they will be left where they are, without relief. For one thing, the original parties who were guilty of a violation of the fundamental charter have died and have since been substituted by their administrators to whom it would be unjust to impute their
guilt.23 For another thing, and this is not only cogent but also important, article 1416 of the Civil Code provides, as an exception to the rule on pari delicto, that "When the agreement is not illegal per se but is merely prohibited, and the prohibition by law is designed for the protection of the plaintiff, he may, if public policy is thereby enhanced, recover what he has paid or delivered." The Constitutional provision that "Save in cases of hereditary succession, no private agricultural land shall be transferred or assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippines"24 is an expression of public policy to conserve lands for the Filipinos. As this Court said in Krivenko:
It is well to note at this juncture that in the present case we have no choice. We are construing the Constitution as it is and not as we may desire it to be. Perhaps the effect of our construction is to preclude aliens admitted freely into the Philippines from owning sites where they may build their homes. But if this is the solemn mandate of the Constitution, we will not attempt to compromise it even in the name of amity or equity . . . .
For all the foregoing, we hold that under the Constitution aliens may not acquire private or public agricultural lands, including residential lands, and, accordingly, judgment is affirmed, without costs.25
That policy would be defeated and its continued violation sanctioned if, instead of setting the contracts aside and ordering the restoration of the land to the estate of the deceased Justina Santos, this Court should apply the general rule of pari delicto. To the extent that our ruling in this case conflicts with that laid down in Rellosa v. Gaw Chee Hun 26 and subsequent similar cases, the latter must be considered as pro tanto qualified.
The claim for increased rentals and attorney's fees, made in behalf of Justina Santos, must be denied for lack of merit.
And what of the various amounts which Wong received in trust from her? It appears that he kept two classes of accounts, one pertaining to amount which she entrusted to him from time to time, and another pertaining to rentals from the Ongpin property and from the Rizal Avenue property, which he himself was leasing.
With respect to the first account, the evidence shows that he received P33,724.27 on November 8, 1957 (Plff Exh. 16); P7,354.42 on December 1, 1957 (Plff Exh. 13); P10,000 on December 6, 1957 (Plff Exh. 14) ; and P18,928.50 on August 26, 1959 (Def. Exh. 246), or a total of P70,007.19. He claims, however, that he settled his accounts and that the last amount of P18,928.50 was in fact payment to him of what in the liquidation was found to be due to him.
He made disbursements from this account to discharge Justina Santos' obligations for taxes, attorneys' fees, funeral services and security guard services, but the checks (Def Exhs. 247-278) drawn by him for this purpose amount to only P38,442.84.27 Besides, if he had really settled his accounts with her on August 26, 1959, we cannot understand why he still had P22,000 in the bank and P3,000 in his possession, or a total of P25,000. In his answer, he offered to pay this amount if the court so directed him. On these two grounds, therefore, his claim of liquidation and settlement of accounts must be rejected.
After subtracting P38,442.84 (expenditures) from P70,007.19 (receipts), there is a difference of P31,564 which, added to the amount of P25,000, leaves a balance of P56,564.3528 in favor of Justina Santos.
As to the second account, the evidence shows that the monthly income from the Ongpin property until its sale in Rizal Avenue July, 1959 was P1,000, and that from the Rizal Avenue property, of which Wong was the lessee, was P3,120. Against this account the household expenses and disbursements for the care of the 17 dogs and the salaries of the 8 maids of Justina Santos were charged. This account is contained in a notebook (Def. Exh. 6) which shows a balance of P9,210.49 in favor of Wong. But it is claimed that the rental from both the Ongpin and Rizal Avenue properties was more than enough to pay for her monthly expenses and that, as a matter of fact, there should be a balance in her favor. The lower court did not allow either party to recover against the other. Said the court:
[T]he documents bear the earmarks of genuineness; the trouble is that they were made only by Francisco Wong and Antonia Matias, nick-named Toning, — which was the way she signed the loose sheets, and there is no clear proof that Doña Justina had authorized these two to act for her in such liquidation; on the contrary if the result of that was a deficit as alleged and sought to be there shown, of P9,210.49, that was
not what Doña Justina apparently understood for as the Court understands her statement to the Honorable Judge of the Juvenile Court . . . the reason why she preferred to stay in her home was because there she did not incur in any debts . . . this being the case, . . . the Court will not adjudicate in favor of Wong Heng on his counterclaim; on the other hand, while it is claimed that the expenses were much less than the rentals and there in fact should be a superavit, . . . this Court must concede that daily expenses are not easy to compute, for this reason, the Court faced with the choice of the two alternatives will choose the middle course which after all is permitted by the rules of proof, Sec. 69, Rule 123 for in the ordinary course of things, a person will live within his income so that the conclusion of the Court will be that there is neither deficit nor superavit and will let the matter rest here.
Both parties on appeal reiterate their respective claims but we agree with the lower court that both claims should be denied. Aside from the reasons given by the court, we think that the claim of Justina Santos totalling P37,235, as rentals due to her after deducting various expenses, should be rejected as the evidence is none too clear about the amounts spent by Wong for food29 masses30 and salaries of her maids.31 His claim for P9,210.49 must likewise be rejected as his averment of liquidation is belied by his own admission that even as late as 1960 he still had P22,000 in the bank and P3,000 in his possession.
ACCORDINGLY, the contracts in question (Plff Exhs. 3-7) are annulled and set aside; the land subject-matter of the contracts is ordered returned to the estate of Justina Santos as represented by the Philippine Banking Corporation; Wong Heng (as substituted by the defendant-appellant Lui She) is ordered to pay the Philippine Banking Corporation the sum of P56,564.35, with legal interest from the date of the filing of the amended complaint; and the amounts consigned in court by Wong Heng shall be applied to the payment of rental from November 15, 1959 until the premises shall have been vacated by his heirs. Costs against the defendant-appellant.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez and Angeles, JJ., concur.
FIRST DIVISION
CAMILO F. BORROMEO - versus - ANTONIETTA O. DESCALLAR
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
D E C I S I O N
PUNO, C.J.:
What are the rights of an alien (and his successor-in-interest) who acquired real properties in the country as against his former Filipina girlfriend in whose sole name the properties were registered under the Torrens system?
The facts are as follows:
Wilhelm Jambrich, an Austrian, arrived in the Philippines in 1983 after he was assigned by his employer, Simmering-Graz Panker A.G., an Austrian company, to work at a project in Mindoro. In 1984, he transferred to Cebu and worked at the Naga II Project of the National Power Corporation. There, he met respondent Antonietta Opalla-Descallar, a separated mother of two boys who was working as a waitress at St. Moritz Hotel. Jambrich befriended respondent and asked her to tutor him in English. In dire need of additional income to support her children, respondent agreed. The tutorials were held in Antoniettas residence at a squatters area in Gorordo Avenue.
Jambrich and respondent fell in love and decided to live together in a rented house in Hernan Cortes, Mandaue City. Later, they transferred to their own house and lots at Agro-Macro Subdivision, Cabancalan, Mandaue City. In the Contracts to Sell dated November 18, 1985[1] and March 10, 1986[2] covering the properties, Jambrich and respondent were referred to as the buyers. A Deed of Absolute Sale dated November 16, 1987[3] was likewise issued in their favor. However, when the Deed of Absolute Sale was presented for registration before the Register of Deeds, registration was refused on the ground that Jambrich was an alien and could not acquire alienable lands of the public domain. Consequently, Jambrichs name was erased from the document. But it could be noted that his signature remained on the left hand margin of page 1, beside respondents signature as buyer on page 3, and at the bottom of page 4 which is the last page. Transfer Certificate of Title (TCT) Nos. 24790, 24791 and 24792 over the properties were issued in respondents name alone.
Jambrich also formally adopted respondents two sons in Sp. Proc. No. 39-MAN,[4] and per Decision of the Regional Trial Court of Mandaue City dated May 5, 1988.[5]
However, the idyll lasted only until April 1991. By then, respondent found a new boyfriend while Jambrich began to live with another woman in Danao City. Jambrich supported respondents sons for only two months after the break up.
Jambrich met petitioner Camilo F. Borromeo sometime in 1986. Petitioner was engaged in the real estate business. He also built and repaired speedboats as a hobby. In 1989, Jambrich purchased an engine and some accessories for his boat from petitioner, for which he became indebted to the latter for about P150,000.00. To pay for his debt, he sold his rights and interests in the Agro-Macro properties to petitioner for P250,000, as evidenced by a Deed of Absolute Sale/Assignment.[6] On July 26, 1991, when petitioner sought to register the deed of assignment, he discovered that titles to the three lots have been transferred in the name of respondent, and that the subject property has already been mortgaged.
On August 2, 1991, petitioner filed a complaint against respondent for recovery of real property before the Regional Trial Court of Mandaue City. Petitioner alleged that the Contracts to Sell dated November 18, 1985 and March 10, 1986 and the Deed of Absolute Sale dated November 16, 1987 over the properties which identified both Jambrich and respondent as buyers do not reflect the true agreement of the parties since respondent did not pay a single centavo of the purchase price and was not in fact a buyer; that it was Jambrich alone who paid for the properties using his exclusive funds; that Jambrich was the real and absolute owner of the properties; and, that petitioner
acquired absolute ownership by virtue of the Deed of Absolute Sale/Assignment dated July 11, 1991 which Jambrich executed in his favor.
In her Answer, respondent belied the allegation that she did not pay a single centavo of the purchase price. On the contrary, she claimed that she solely and exclusively used her own personal funds to defray and pay for the purchase price of the subject lots in question, and that Jambrich, being an alien, was prohibited to acquire or own real property in the Philippines.
At the trial, respondent presented evidence showing her alleged financial capacity to buy the disputed property with money from a supposed copra business. Petitioner, in turn, presented Jambrich as his witness and documentary evidence showing the substantial salaries which Jambrich received while still employed by the Austrian company, Simmering-Graz Panker A.G.
In its decision, the court a quo found
Evidence on hand clearly show that at the time of the purchase and acquisition of [the] properties under litigation that Wilhelm Jambrich was still working and earning much. This fact of Jambrich earning much is not only supported by documentary evidence but also by the admission made by the defendant Antoniet[t]a Opalla. So that, Jambrichs financial capacity to acquire and purchase the properties . . . is not disputed.[7]
x x x
On the other hand, evidence . . . clearly show that before defendant met Jambrich sometime in the latter part of 1984, she was only working as a waitress at the St. Moritz Hotel with an income of P1,000.00 a month and was . . . renting and living only in . . . [a] room at . . . [a] squatter area at Gorordo Ave., Cebu City; that Jambrich took pity of her and the situation of her children that he offered her a better life which she readily accepted. In fact, this miserable financial situation of hers and her two children . . . are all stated and reflected in the Child Study Report dated April 20, 1983 (Exhs. G and G-1) which facts she supplied to the Social Worker who prepared the same when she was personally interviewed by her in connection with the adoption of her two children by Wilhelm Jambrich. So that, if such facts were not true because these are now denied by her . . . and if it was also true that during this time she was already earning as much as P8,000.00 to P9,000.00 as profit per month from her copra business, it would be highly unbelievable and impossible for her to be living only in such a miserable condition since it is the observation of this Court that she is not only an extravagant but also an expensive person and not thrifty as she wanted to impress this Court in order to have a big saving as clearly shown by her actuation when she was already cohabiting and living with Jambrich that according to her . . . the allowance given . . . by him in the amount of $500.00 a month is not enough to maintain the education and maintenance of her children.[8]
This being the case, it is highly improbable and impossible that she could acquire the properties under litigation or could contribute any amount for their acquisition which according to her is worth more than P700,000.00 when while she was working as [a] waitress at St. Moritz Hotel earning P1,000.00 a month as salary and tips of more or less P2,000.00 she could not even provide [for] the daily needs of her family so much so that it is safe to conclude that she was really in financial distress when she met and accepted the offer of Jambrich to come and live with him because that was a big financial opportunity for her and her children who were already abandoned by her husband.[9]
x x x
The only probable and possible reason why her name appeared and was included in [the contracts to sell dated November 18, 1985 and March 10, 1986 and finally, the deed of absolute sale dated November 16, 1987] as buyer is because as observed by the Court, she being a scheming and exploitive woman, she has taken advantage of the goodness of Jambrich who at that time was still bewitched by her beauty, sweetness, and good attitude shown by her to him since he could still very well provide for everything she needs, he being earning (sic) much yet at that time. In fact, as observed by this Court, the acquisition of these properties under litigation was at the time when their relationship was still going smoothly and harmoniously.[10] [Emphasis supplied.]
The dispositive portion of the Decision states: WHEREFORE, . . . Decision is hereby rendered in favor of the plaintiff and against the defendant Antoniet[t]a Opalla by: 1) Declaring plaintiff as the owner in fee simple over the residential house of strong materials and three parcels of land designated as Lot Nos. 1, 3 and 5 which are covered by TCT Nos. 24790, 24791 and 24792 issued by the Register of Deeds of Mandaue City; 2) Declaring as null and void TCT Nos. 24790, 24791 and 24792 issued in the name of defendant Antoniet[t]a Descallar by the Register of Deeds of Mandaue City; 3) Ordering the Register of Deeds of Mandaue City to cancel TCT Nos. 24790, 24791 and 24792 in the name of defendant Antoniet[t]a Descallar and to issue new ones in the name of plaintiff Camilo F. Borromeo; 4) Declaring the contracts now marked as Exhibits I, K and L as avoided insofar as they appear to convey rights and interests over the properties in question to the defendant Antoniet[t]a Descallar; 5) Ordering the defendant to pay plaintiff attorneys fees in the amount of P25,000.00 and litigation expenses in the amount of P10,000.00; and, 6) To pay the costs.[11]
Respondent appealed to the Court of Appeals. In a Decision dated April 10, 2002,[12] the appellate court reversed the decision of the trial court. In ruling for the respondent, the Court of Appeals held:
We disagree with the lower courts conclusion. The circumstances involved in the case cited by the lower court and similar cases decided on by the Supreme Court which upheld the validity of the title of the subsequent Filipino purchasers are absent in the case at bar. It should be noted that in said cases, the title to the subject property has been issued in the name of the alien transferee (Godinez et al., vs. Fong Pak Luen et al., 120 SCRA 223 citing Krivenko vs. Register of Deeds of Manila, 79 Phils. 461; United Church Board for World Ministries vs. Sebastian, 159 SCRA 446, citing the case of Sarsosa Vda. De Barsobia vs. Cuenco, 113 SCRA 547; Tejido vs. Zamacoma, 138 SCRA 78). In the case at bar, the title of the subject property is not in the name of Jambrich but in the name of defendant-appellant. Thus, Jambrich could not have transferred a property he has no title thereto.[13]
Petitioners motion for reconsideration was denied.
Hence, this petition for review.
Petitioner assigns the following errors:
I. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN DISREGARDING RESPONDENTS JUDICIAL ADMISSION AND OTHER OVERWHELMING EVIDENCE ESTABLISHING JAMBRICHS PARTICIPATION, INTEREST AND OWNERSHIP OF THE PROPERTIES IN QUESTION AS FOUND BY THE HONORABLE TRIAL COURT.
II. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT JAMBRICH HAS NO TITLE TO THE PROPERTIES IN QUESTION AND MAY NOT THEREFORE TRANSFER AND ASSIGN ANY RIGHTS AND INTERESTS IN FAVOR OF PETITIONER.
III. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN REVERSING THE WELL-REASONED DECISION OF THE TRIAL COURT AND IN IMPOSING DOUBLE COSTS AGAINST HEREIN PETITIONER (THEN, PLAINTIFF-APPELLEE).[14]
First, who purchased the subject properties?
The evidence clearly shows, as pointed out by the trial court, who between respondent and Jambrich possesses the financial capacity to acquire the properties in dispute. At the time of the acquisition of the properties in 1985 to 1986, Jambrich was gainfully employed at Simmering-Graz Panker A.G., an Austrian company. He was earning an estimated monthly salary of P50,000.00. Then, Jambrich was assigned to Syria for almost one year where his monthly salary was approximately P90,000.00.
On the other hand, respondent was employed as a waitress from 1984 to 1985 with a monthly salary of not more than P1,000.00. In 1986, when the parcels of land were acquired, she was unemployed, as admitted by her during the pre-trial conference. Her allegations of income from a copra business were unsubstantiated. The supposed copra business was actually the business of her mother and their family, with ten siblings. She has no license to sell copra, and had not filed any income tax return. All the motorized bancas of her mother were lost to fire, and the last one left standing was already scrap. Further, the Child Study Report[15] submitted by the Department of Social Welfare and Development (DSWD) in the adoption proceedings of respondents two sons by Jambrich disclosed that:
Antonietta tried all types of job to support the children until she was accepted as a waitress at St. Moritz Restaurant in 1984. At first she had no problem with money because most of the customers of St. Moritz are (sic) foreigners and they gave good tips but towards the end of 1984 there were no more foreigners coming because of the situation in the Philippines at that time. Her financial problem started then. She was even renting a small room in a squatters area in Gorordo Ave., Cebu City. It was during her time of great financial distress that she met Wilhelm Jambrich who later offered her a decent place for herself and her children.[16]
The DSWD Home Study Report[17] further disclosed that:
[Jambrich] was then at the Restaurant of St. Moritz when he saw Antonietta Descallar, one of the waitresses of the said Restaurants. He made friends with the girl and asked her to tutor him in [the] English language. Antonietta accepted the offer because she was in need of additional income to support [her] 2 young children who were abandoned by their father. Their session was agreed to be scheduled every afternoon at the residence of Antonietta in the squatters area in Gorordo Avenue, Cebu City. The Austrian was observing the situation of the family particularly the children who were malnourished. After a few months sessions, Mr. Jambrich offered to transfer the family into a decent place. He told Antonietta that the place is not good for the children. Antonietta who was miserable and financially distressed at that time accepted the offer for the sake of the children.[18]
Further, the following additional pieces of evidence point to Jambrich as the source of fund used to purchase the three parcels of land, and to construct the house thereon:
(1) Respondent Descallar herself affirmed under oath, during her re-direct examination and during the proceedings for the adoption of her minor children, that Jambrich was the owner of the properties in question, but that his name was deleted in the Deed of Absolute Sale because of legal constraints. Nonetheless, his signature remained in the deed of sale, where he signed as buyer.(2) The money used to pay the subject parcels of land in installments was in postdated checks issued by Jambrich. Respondent has never opened any account with any bank. Receipts of the installment payments were also in the name of Jambrich and respondent.(3) In 1986-1987, respondent lived in Syria with Jambrich and her two children for ten months, where she was completely under the support of Jambrich.(4) Jambrich executed a Last Will and Testament, where he, as owner, bequeathed the subject properties to respondent.
Thus, Jambrich has all authority to transfer all his rights, interests and participation over the subject properties to petitioner by virtue of the Deed of Assignment he executed on July 11, 1991.
Well-settled is the rule that this Court is not a trier of facts. The findings of fact of the trial court are accorded great weight and respect, if not finality by this Court, subject to a number of exceptions. In the instant case, we find no reason to disturb the factual findings of the trial court. Even the appellate court did not controvert the factual findings of the trial court. They differed only in their conclusions of law.
Further, the fact that the disputed properties were acquired during the couples cohabitation also does not help respondent. The rule that co-ownership applies to a man and a woman living exclusively with each other as
husband and wife without the benefit of marriage, but are otherwise capacitated to marry each other, does not apply.[19] In the instant case, respondent was still legally married to another when she and Jambrich lived together. In such an adulterous relationship, no co-ownership exists between the parties. It is necessary for each of the partners to prove his or her actual contribution to the acquisition of property in order to be able to lay claim to any portion of it. Presumptions of co-ownership and equal contribution do not apply.[20]
Second, we dispose of the issue of registration of the properties in the name of respondent alone. Having found that the true buyer of the disputed house and lots was the Austrian Wilhelm Jambrich, what now is the effect of registration of the properties in the name of respondent?
It is settled that registration is not a mode of acquiring ownership.[21] It is only a means of confirming the fact of its existence with notice to the world at large.[22] Certificates of title are not a source of right. The mere possession of a title does not make one the true owner of the property. Thus, the mere fact that respondent has the titles of the disputed properties in her name does not necessarily, conclusively and absolutely make her the owner. The rule on indefeasibility of title likewise does not apply to respondent. A certificate of title implies that the title is quiet,[23] and that it is perfect, absolute and indefeasible.[24] However, there are well-defined exceptions to this rule, as when the transferee is not a holder in good faith and did not acquire the subject properties for a valuable consideration.[25] This is the situation in the instant case. Respondent did not contribute a single centavo in the acquisition of the properties. She had no income of her own at that time, nor did she have any savings. She and her two sons were then fully supported by Jambrich.
Respondent argued that aliens are prohibited from acquiring private land. This is embodied in Section 7, Article XII of the 1987 Constitution,[26] which is basically a reproduction of Section 5, Article XIII of the 1935 Constitution,[27] and Section 14, Article XIV of the 1973 Constitution.[28] The capacity to acquire private land is dependent on the capacity to acquire or hold lands of the public domain. Private land may be transferred only to individuals or entities qualified to acquire or hold lands of the public domain. Only Filipino citizens or corporations at least 60% of the capital of which is owned by Filipinos are qualified to acquire or hold lands of the public domain. Thus, as the rule now stands, the fundamental law explicitly prohibits non-Filipinos from acquiring or holding title to private lands, except only by way of legal succession or if the acquisition was made by a former natural-born citizen.[29]
Therefore, in the instant case, the transfer of land from Agro-Macro Development Corporation to Jambrich, who is an Austrian, would have been declared invalid if challenged, had not Jambrich conveyed the properties to petitioner who is a Filipino citizen. In United Church Board for World Ministries v. Sebastian,[30] the Court reiterated the consistent ruling in a number of cases[31] that if land is invalidly transferred to an alien who subsequently becomes a Filipino citizen or transfers it to a Filipino, the flaw in the original transaction is considered cured and the title of the transferee is rendered valid. Applying United Church Board for World Ministries, the trial court ruled in favor of petitioner, viz.:
[W]hile the acquisition and the purchase of (sic) Wilhelm Jambrich of the properties under litigation [were] void ab initio since [they were] contrary to the Constitution of the Philippines, he being a foreigner, yet, the acquisition of these properties by plaintiff who is a Filipino citizen from him, has cured the flaw in the original transaction and the title of the transferee is valid.
The trial court upheld the sale by Jambrich in favor of petitioner and ordered the cancellation of the TCTs in the name of respondent. It declared petitioner as owner in fee simple of the residential house of strong materials and three parcels of land designated as Lot Nos. 1, 3 and 5, and ordered the Register of Deeds of Mandaue City to issue new certificates of title in his name. The trial court likewise ordered respondent to pay petitioner P25,000 as attorneys fees and P10,000 as litigation expenses, as well as the costs of suit.
We affirm the Regional Trial Court.
The rationale behind the Courts ruling in United Church Board for World Ministries, as reiterated in subsequent cases,[32] is this since the ban on aliens is intended to preserve the nations land for future generations of Filipinos, that aim is achieved by making lawful the acquisition of real estate by aliens who became Filipino citizens by naturalization or those transfers made by aliens to Filipino citizens. As the property in dispute is already in the hands of a qualified person, a Filipino citizen, there would be no more public policy to be protected. The objective of the constitutional provision to keep our lands in Filipino hands has been achieved.
IN VIEW WHEREOF, the petition is GRANTED. The Decision of the Court of Appeals in C.A. G.R. CV No. 42929 dated April 10, 2002 and its Resolution dated July 8, 2003 are REVERSED and SET ASIDE. The Decision of the Regional Trial Court of Mandaue City in Civil Case No. MAN-1148 is REINSTATED. SO ORDERED.
We have heard the story so many times. Foreigner goes to the Philippines. Foreigner meets Filipina girl.
They fall in love. They get married (or live together). They buy a house and lot.
We wish it could always be a happy ending and they will live happily ever after. For some, the fairy tale becomes reality. For other couples, the ending is not what they have hoped for.
They fight. They go their separate ways. They fight over property.
Because the Philippine Constitution does not allow foreigners to own land in the Philippines, it is not unusual for title to parcels of land to be placed in the name of the Filipina wife or girlfriend. What are the rights of a foreigner (and his successor-in-interest) who acquired real properties in the Philippines as against his former Filipina girlfriend in whose sole name the properties were registered in the Transfer Certificate of Title (TCT) covering the properties?
In Borromeo vs. Descallar, G.R. No. 159310, February 24, 2009, Wilhelm Jambrich (the foreigner) and Antonietta Descallar (the Filipina girlfriend) were designated as buyers in a Contract to Sell a house and lot located in Agro-Macro subdivision, Mandaue City. They were also designated as buyers in the Deed of Absolute Sale over the property.
When the Deed of Absolute Sale was presented for registration before the Register of Deeds, the Register of Deeds refused registration on the ground that Wilhelm was an alien and could not acquire land. Consequently, Wilhelm’s name was erased from the Deed of Absolute Sale. However, his signature remained on the left hand margin of page 1, beside Antonietta’s signature as buyer on page 3, and at the bottom of page 4 which is the last page of the deed. The Register of Deeds issued several TCTs in Antonietta’s name.
The couple parted ways. Subsequently, Wilhelm became indebted to Camilo, a real estate dealer who repaired Wilhem’s speedboat. To pay his debt, Wilhelm sold his rights and interests in the Agro-Macro property to Camilo for PhP250,000, as evidenced by a “Deed of Absolute Sale/Assignment.”
When Camilo sought to register the Deed of Absolute Sale/Assignment with the Register of Deeds, he discovered thatthe TCTs to the three lots have been transferred in the name of Antonietta, and that the property has already been mortgaged.
Camilo filed petitioner filed a complaint against Antonietta for recovery of real property before the Regional Trial Court of Mandaue City. According to Camilo:
. . . the Contracts to Sell dated November 18, 1985 and March 10, 1986 and the Deed of Absolute Sale dated November 16, 1987 over the properties which identified both Jambrich and respondent as buyers do not reflect the true agreement of the parties since respondent did not pay a single centavo of the purchase price and was not in fact a buyer; that it was Jambrich alone who paid for the properties using his exclusive funds; that Jambrich was the real and absolute owner of the properties; and, that petitioner acquired absolute ownership by virtue of the Deed of Absolute Sale/Assignment dated July 11, 1991 which Jambrich executed in his favor.
On the other hand, Antonietta:
. . . belied the allegation that she did not pay a single centavo of the purchase price. On the contrary, she claimed that she “solely and exclusively used her own personal funds to defray and pay for the purchase price of the subject lots in question,” and that Jambrich, being an alien, was prohibited to acquire or own real property in the Philippines.
The regional trial court ruled in favor of Camilo. On the other hand, the Court of Appeals ruled in favor of Antonietta. The Court of Appeals ruled:
We disagree with the lower court’s conclusion. The circumstances involved in the case cited by the lower court and similar cases decided on by the Supreme Court which upheld the validity of the title of the subsequent Filipino purchasers are absent in the case at bar. It should be noted that in said cases, the title to the subject property has been issued in the name of the alien transferee (Godinez et al., vs. Fong Pak Luen et al., 120 SCRA 223 citing Krivenko vs. Register of Deeds of Manila, 79 Phils. 461; United Church Board for World Ministries vs. Sebastian, 159 SCRA 446, citing the case of Sarsosa Vda. De Barsobia vs. Cuenco, 113 SCRA 547; Tejido vs. Zamacoma, 138 SCRA 78). In the case at bar, the title of the subject property is not in the name of Jambrich but in the name of defendant-appellant. Thus, Jambrich could not have transferred a property he has no title thereto. . .
The Supreme Court reversed the Court of Appeals and agreed with the regional trial court.
With respect to the issue of who purchased the house and lot, the Court stated that the evidence presented before the trial court indicate that Wilhelm possessed the financial capacity to purchase the Agro-Macro property and that Wilhelm was the source of funds used to purchase the property. On the other hand, Antonietta (who used to work as a waitress) was unemployed at the time of the purchase and did not substantiate her alleged source of income.
Thus, the Court ruled that Wilhelm “has all authority to transfer all his rights, interests and participation over the subject properties” to Camilo by virtue of the Deed of Absolute Sale/Assignment he executed on July 11, 1991.
Having found that Wilhelm is the true owner of the properties, the Court then addressed the issue of the effect of the registration of the property in the name of Antonietta. The Court stated:
It is settled that registration is not a mode of acquiring ownership. It is only a means of confirming the fact of its existence with notice to the world at large. Certificates of title are not a source of right. The mere possession of a title does not make one the true owner of the property. Thus, the mere fact that respondent has the titles of the disputed properties in her name does not necessarily, conclusively and absolutely make her the owner. The rule on indefeasibility of title likewise does not apply to respondent. A certificate of title implies that the title is quiet, and that it is perfect, absolute and indefeasible. However, there are well-defined exceptions to this rule, as when the transferee is not a holder in good faith and did not acquire the subject properties for a valuable consideration. This is the situation in the instant case. Respondent did not contribute a single centavo in the acquisition of the properties. She had no income of her own at that time, nor did she have any savings. She and her two sons were then fully supported by Jambrich.
On the issue of Wilhelm’s ineligibility of acquire land, the Court reiterated its earlier rulings that the while the acquisition of land by a foreigner violates the Constitution, its subsequent transfer to a qualified Philippine national cured the defect in the original transaction. According to the Court:
The transfer of land from Agro-Macro Development Corporation to Jambrich, who is an Austrian, would have been declared invalid if challenged, had not Jambrich conveyed the properties to petitioner who is a Filipino citizen. In United Church Board for World Ministries v. Sebastian, the Court reiterated the consistent ruling in a number of cases that if land is invalidly transferred to an alien who subsequently becomes a Filipino citizen or transfers it to a Filipino, the flaw in the original transaction is considered cured and the title of the transferee is rendered valid.
Lesson for the foreigner: it was wise to keep proof that he used his funds to purchase the property. It was also wise to sell the property.
Lesson for the Filipina: it was unwise to offer no proof that she funded the purchase price of the property.
Lesson for the buyer: he would have saved the cost of litigation if he checked the title to the property prior to executing the Deed of Assignment.
