Title
Director of Lands vs. Intermediate Appellate Court
Case
G.R. No. 73002
Decision Date
Dec 29, 1986
The Director of Lands appealed land registration favoring Acme Plywood, arguing 1973 Constitution barred private corporations from holding public land. Court ruled land was private before Acme's acquisition, upholding its vested rights under the 1935 Constitution.
private property
confirmation of title
ownership

Case Summary (G.R. No. 114726)

Factual Background

The lands subject of the controversy consist of five parcels aggregating approximately 481,390 square meters which Mariano and Acer Infiel, members of the Dumagat tribe, possessed and occupied from time immemorial. The Infiels conveyed the lands to Acme Plywood & Veneer Co., Inc. by sale dated October 29, 1962. Acme, organized and registered with the Securities and Exchange Commission on December 23, 1959, thereafter exercised continuous, adverse and public possession and undertook extensive improvements alleged to be worth more than P45,000,000, as observed by the trial court during its ocular inspection.

Trial Court Findings

The Court of First Instance of Isabela found that the Infiels were members of a national cultural minority who, personally and through predecessors, had possessed the land for more than the statutory thirty-year period. The trial court concluded that such possession entitled the Infiels to the protection of Section 48 of the Public Land Act, and that Acme, as successor-in-interest, had continuous, adverse and notorious possession from 1962. The trial court further found governmental recognition of Acme’s ownership when Acme donated part of the land for the townsite of Maconacon, Isabela, and that Acme had introduced substantial improvements on the property.

Appellate Disposition and Procedural Posture

The Intermediate Appellate Court affirmed the trial court’s judgment ordering registration of the parcels in favor of Acme. The Director of Lands filed a petition for certiorari to this Court, challenging the appellate disposition only on the ground that the 1973 Constitution, which was in force at the time the confirmation proceedings were commenced in 1981, barred private corporations from holding lands of the public domain and therefore precluded registration in the name of Acme.

Issue Presented

The dispositive issue was whether the title that the Infiels conveyed to Acme in 1962 could be judicially confirmed in favor of Acme in proceedings filed in 1981, notwithstanding Article XIV, Section 11, 1973 Constitution, which prohibits private corporations from holding alienable lands of the public domain except by lease not to exceed one thousand hectares. Resolution required determining the character of the land at the time of the registration application in 1981: whether it remained public domain or had become private property by operation of law.

Petitioner’s Contentions

The Director of Lands conceded the trial court’s factual findings concerning ancestral possession and Acme’s improvements but argued that because the registration proceedings were instituted after the effective date of the 1973 Constitution, that Constitution governed the case. The Director contended that Article XIV, Section 11, 1973 Constitution prohibited corporations from acquiring and holding lands of the public domain and that this prohibition rendered registration in Acme’s name improper.

Respondent’s Position and Supporting Findings

Acme Plywood & Veneer Co., Inc. relied upon the trial court’s factual findings that the Infiels and their predecessors possessed the lands since time immemorial, that possession satisfied the requisites of Section 48 of the Public Land Act, and that Acme’s possession since 1962 was continuous, adverse and notorious. The record also showed substantial improvements and municipal recognition of Acme’s ownership through the townsite donation. From these facts Acme maintained that the lands had already been converted into private property either by operation of law upon completion of the statutory period or, at the least, that Acme had acquired vested rights in 1962 which the 1973 Constitution could not retroactively impair.

Court’s Legal Analysis

The Court examined the legal effect of long possession under Section 48(b) and (c) of the Public Land Act, emphasizing that the statute creates a conclusive presumption that possessors who satisfy the statutory requisites have performed all conditions essential to a government grant and are entitled to a certificate of title. The Court revisited the jurisprudential line beginning with Carino, followed by Susi and later decisions such as Herico, which developed the doctrine that open, continuous and exclusive possession for the statutory period operates ipso jure to segregate the land from the public domain and convert it into private property. The Court held that confirmation proceedings under Section 48 typically do no more than formalize a title already vested by operation of law and that no proof can overcome the conclusive presumption created by the statute.

Retroactivity and Vested Rights Considerations

The Court addressed the contention that the 1973 Constitution’s prohibition should apply because the confirmation suit began in 1981. It reasoned that where a vested right existed before the effective date of a later constitutional provision, that vested right could not lawfully be impaired. Applying controlling precedent recognizing protection of vested rights against retroactive constitutional change, the Court concluded that Acme’s acquisition in 1962 of land already private by operation of law, or at least of a legally sufficient and transferable title, could not be invalidated by the 1973 Constitution.

Precedent Reconsideration and Overruling of Meralco Majority

The Court revisited Manila Electric Company v. Castro-Bartolome (Meralco), in which a majority had dismissed Meralco’s Section 48 application on the ground that a juridical person was disqualified and had characterized the land as public. After analysis, the Court concluded that the Meralco majority ruling was incorrect and that the line of authority from Carino through Susi and Herico represents the correct doctrine: possession under the Public Land Act for the prescribed period effects conversion of public land into private property ipso jure. Consequently, the Court held that the Meralco majority should be reconsidered and is no longer binding.

Disposition

The Supreme Court affirmed the decision of the Intermediate Appellate Court, finding no reversible error in its judgment ordering registration in favor of Acme Plywood & Veneer Co., Inc., and affirmed without costs. The Court held that the land had ceased to be public domain by operation of law and that Acme’s ownership and right to registration were valid.

Concurrence by Chief Justice Teehankee

Chief Justice Teehankee filed a concurring opinion which amplified and reaffirmed his earlier dissent in Meralco and related cases. He traced the doctrinal history from Carino and Susi and underscored that the conclusive presumption in Section 48 creates a grant by operation of law, rendering the land private and therefore purchasable by qualified corporations. He stressed the public policy of the Act to hasten settlement and quieting of titles, and he endorsed treating the limita

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