G.R. No. 186063 - Philippine National Bank vs. San Miguel Corporation

On January 29, 1973, spouses Silvestre Manlapaz and Natividad Pizarro filed an application before the Court of First Instance of Bataan.
They sought the registration and confirmation of titles to two parcels of land designated as Lot No. 2855 and Lot No. 2856 under Act 496 in relation to Sec. 48(B) of C.A. No. 141.
The parcels, parts of Lot 2749 of the Orion Cadastre, were shown in Plans Sgs-4600-D and Sgs-4601-D, and measured 49,954 sq. meters and 54,052 sq. meters, respectively.

Prior to the initial hearing, on April 5, 1973, the trial court ordered the Land Registration Commissioner to provide a report regarding the status of the parcels—specifically, whether patents had been issued or if they were subject to pending decrees.
Acting Geodetic Engineer Amado Masicampo, on behalf of the Commissioner, filed a manifestation on April 26, 1973, disclosing that the parcels had been involved in registration proceedings (Court Cadastral Case No. 15) and indicating a conflict with an already issued Sales Patent No. 5819 for Lot 1, Sgs-2806 as reflected in the Municipal Index Map.

The Director of Lands seasonably filed an opposition arguing that neither the applicants nor their predecessors-in-interest had sufficient title to claim ownership in fee simple of the land.
The Director contended that the requirements for open, continuous, exclusive, and notorious possession for at least 30 years—immediately preceding the filing—had not been met.
It was also argued that the parcels were part of the public domain of the Republic of the Philippines and were not subject to appropriation.

At the hearing on August 21, 1973, the court issued an order of special default with the exception of the Director, and both parties were allowed to present evidence with the Clerk of Court receiving such evidence for subsequent findings.
Private respondents presented evidence aiming to establish 30 years of adverse possession:

Crisanto Angeles testified that he took possession of the parcels as early as 1931, clearing the land, planting fruit trees (mango, star apple, bananas), and converting a portion for agricultural use.
Angeles further recounted that the land had been declared for taxation in 1966, and that he had sold parts of the property—first in 1938 to Pablito Punay, and later, after improvements and possession, in September 1972 to the private respondents.
Witness Monico Balila and private respondent Silvestre Manlapaz corroborated, with Balila testifying as an adjoining owner who witnessed the clearing and cultivation activities, and Manlapaz affirming their immediate possession and use of the land for agriculture and even residential lot development.

Angeles was unable to recall the names of adjoining property owners he claimed to know.
Monico Balila’s testimony was limited due to his own short period of association with the area.
The documentary evidence provided was largely limited to tax declarations and plans showing that the land was alienable public land, without clear proof of the entire 30-year possession.

The Court of First Instance rendered its decision on April 6, 1974, confirming the registration and title of the two parcels in the name of the respondents, ordering a subsequent decree of registration.
The Director of Lands appealed the decision, leading the Court of Appeals, on May 7, 1977, to affirm the lower court’s ruling.
The appellate decision emphasized that:

The defense of res judicata was raised belatedly by the petitioner, and its omission in the trial court amounted to a waiver.
The evidence presented showed that the 30-year continuous adverse possession requirement was not sufficiently proven by the respondents’ predecessors-in-interest.

The petition for review later raised errors concerning the waiver of res judicata and the sufficiency of evidence for proving adverse possession, alongside contested views on the effect of cadastral proceedings declaring the land as public domain.

The trial court erred by not recognizing that the defense of res judicata was waived due to its non-assertion.
The Director’s position that res judicata was not proven by sufficient evidence was misapplied.
The established principle from similar cases, that a cadastral proceeding does not bar a subsequent judicial confirmation of title, should have favored his contention.

The Court, however, reiterated established rules on waiver of defenses and the burden of proving adverse possession beyond mere declarations, thereby sustaining the decision of the lower courts.

Whether the defense of res judicata was properly raised or was waived due to its non-inclusion in the trial pleadings.
Whether the Director of Lands failed to prove, through competent evidence, that res judicata should bar the respondents’ claim of adverse possession.
Whether a judicial declaration in a cadastral proceeding (declaring the parcels as public land) precludes later confirmation of title based on adverse possession, despite compliance with other statutory requirements.
Whether the evidence provided by the private respondents, particularly the testimony of their predecessors and supporting documents, sufficiently established a continuous, open, exclusive, and notorious possession of the land for the requisite 30-year period.