G.R. No. 163766 - Republic vs. Candy Maker, Inc.

Case Summary (G.R. No. 163766)

Factual Background

In 1998 Candy Maker, Inc. sought to acquire Lot No. 3138, Cad. 688, Cainta-Taytay Cadastre, a parcel identified as lying below the reglementary lake elevation of 12.50 meters and approximately 900 meters from Laguna de Bay. A subdivision plan prepared April 1, 1998 by Geodetic Engineer Potenciano H. Fernandez divided Lot 3138 into Lots 3138-A (10,971 sq. m.) and 3138-B (239 sq. m.), with technical descriptions approved April 14, 1998. On April 29, 1999 the vendees Antonio, Eladia and Felisa Cruz executed a Deed of Absolute Sale in favor of the company, which thereafter declared the lots for taxation in 1999.

Application for Registration and Administrative Reports

On June 16, 1999 Candy Maker, Inc. filed with the MTC of Taytay an application for registration under P.D. No. 1529. The court ordered publication and notices and required reports from Land Registration Authority, Land Management Bureau, Forest Management Bureau and local DENR. The CENRO of Antipolo certified the land as within the alienable and disposable zone per Land Classification Map No. 639 and noted an existing CENRO case. The LRA recommended exclusion of Lot 3138-B as a legal easement. The Laguna Lake Development Authority submitted that the lot fell below the reglementary elevation of 12.50 meters and thus formed part of the Laguna Lake bed under R.A. No. 4850.

Proceedings and Evidence at Trial

The MTC admitted an amended application and scheduled hearings repeatedly to accommodate publication and reports. At the initial hearings the applicant marked the Official Gazette copy containing the notice as Exhibit “E-1.” The OSG appeared and protested. The court entered general default against parties except the LLDA and the OSG. Applicant presented two witnesses: its treasurer, Fernando Co Siy, and vendee Antonio Cruz. They testified to ancestral ownership, cultivation since the 1930s, payment of realty taxes, and the absence of adverse private claims. Cruz testified to cultivation since 1937 and to an extrajudicial partition in the 1980s transferring the lot to him and two sisters. On cross-examination admissions included that the lot was often flooded and that the lot lacked fill and improvements.

LLDA Survey and Ocular Inspection

The LLDA moved for an ocular inspection and on September 14, 2001 its Survey Team conducted a ground survey using total station equipment, with an applicant’s representative present. The team reported the lot to be below the 12.50 m. reglementary elevation and therefore part of the lakebed, and appended a Survey Report to its opposition. The LLDA did not present oral testimony but submitted its opposition and report for decision.

Decisions Below

On October 12, 2001 the MTC rendered judgment confirming title of the applicant to Lots 3138-A and 3138-B. On appeal the Court of Appeals affirmed in toto on May 21, 2004. The CA held that the Official Gazette copy was received in evidence as Exhibit “E-1,” and found the lots to be alienable private land based on evidence of long cultivation, tax declarations, and lack of adverse claims. The CA treated tax declarations and receipts as strong indicia of possession in the concept of owner.

Issues Presented to the Supreme Court

The Republic of the Philippines raised three principal issues: (1) whether the land could be the subject of registration, (2) whether the trial court acquired jurisdiction given the alleged inalienable character of the land, and (3) whether the respondent satisfied the possession requirements of Section 14, P.D. No. 1529.

Jurisdictional Finding on Notice

The Supreme Court found that the MTC acquired jurisdiction because the copy of the Official Gazette containing the notice of initial hearing was marked and adduced as Exhibit “E-1” at the initial hearing. The presence of an OSG representative who interposed objections did not negate the showing of publication sufficient to confer jurisdiction.

Applicable Law on Public Domain and Registerability

The Court reiterated the Regalian doctrine that lands not appearing in private ownership are presumed public domain and thus inalienable unless reclassified by positive governmental action. It explained that Section 14(1) of P.D. No. 1529 allows registration only for those who or whose predecessors were in open, continuous, exclusive and notorious possession of alienable and disposable public agricultural lands since June 12, 1945 or earlier. The Court further described that a land must be shown to be alienable by acts such as presidential proclamation, executive order, administrative classification, or investigator reports before confirmation procedures apply.

Application of R.A. No. 4850 and LLDA Evidence

The Court concluded that the property was part of the Laguna Lake bed and therefore public land under R.A. No. 4850, which designates lands at and below the maximum lake level of elevation 12.50 meters as part of the lake bed. The LLDA survey team’s September 14, 2001 Report and Pedrezuela’s memorandum placed the lot below the 12.50 m. level. Although those documents were not offered in evidence at the MTC, the respondent later admitted in its Supreme Court manifestation that the property lay below the 12.50 elevation based on the LLDA survey. The Court treated that acknowledgement as a binding judicial admission under Rule 129, Sec. 4.

Failure to Prove Registerable Rights Acquired Before July 18, 1966

The Court recognized that registerable rights acquired before the effectivity of R.A. No. 4850 (July 18, 1966) might be recognized. It then found that respondent failed to prove that its predecessors-in-interest had acquired registerable title prior to that date. The deficiencies included failure to prove how the parents or grandparents acquired ownership, absence of the extrajudicial partition document alleged to have vested the property in Antonio Cruz and his sisters, lack of tax declarations or receipts in the names of the predecessors to corroborate claimed long possession, and discrepancies in Antonio Cruz’s testimony such as his stated age making the claimed cultivation beginning in 1937 implausible. The Court further observed the absence of witnesses to corroborate hires or cultivation.

Standard of Possession and Application to the Evidence

The Co

Case Syllabus (G.R. No. 163766)

Parties and Posture

REPUBLIC OF THE PHILIPPINES filed a Petition for Review under Rule 45, Rules of Court from the Court of Appeals decision affirming the Municipal Trial Court ruling in a land registration case.
CANDY MAKER, INC., AS REPRESENTED BY ITS PRESIDENT, ONG YEE SEE was the applicant in Land Registration Case No. 99-0031 who sought registration of Lots 3138-A and 3138-B under P.D. No. 1529.
The case reached the Supreme Court after the Court of Appeals affirmed the decision of the Municipal Trial Court of Taytay, Rizal which had confirmed title in favor of the applicant.

Key Facts

CANDY MAKER, INC. purchased Lot No. 3138 Cad. 688 and caused a subdivision into Lot 3138-A (10,971 sq.m.) and Lot 3138-B (239 sq.m.) based on a subdivision plan prepared by Geodetic Engineer Potenciano H. Fernandez.
The vendees executed a Deed of Absolute Sale in favor of the applicant on April 29, 1999, and the applicant declared the property for taxation in 1999 under three tax declarations.
The applicant filed an application for registration on June 16, 1999, and the MTC ordered publication and reports from the LRA, LMB, FMB, and the CENRO.
The CENRO certified that the land fell within the Alienable and Disposable zone per Land Classification Map No. 639 certified on March 11, 1927.
The LLDA submitted a memorandum and later a survey report indicating the property was below the reglementary lake elevation of 12.50 meters and thus part of the bed of Laguna de Bay.
The applicant presented witnesses who testified to long possession and cultivation dating to the 1930s and produced a copy of the Official Gazette publication marked as Exhibit “E-1.”
The MTC rendered judgment on October 12, 2001 confirming title to Lots 3138-A and 3138-B.

Procedural History

The MTC issued notice of initial hearing and required publication, mailing, and posting in accordance with the Land Registration procedure.
The applicant filed an Amended Application on December 15, 1999 which was admitted and set for various hearings subsequently moved due to publication issues.
The LLDA and the Republic, through the Office of the Solicitor General, filed Opposition asserting the lots formed part of the Laguna de Bay bed and were inalienable.
The MTC granted the application on October 12, 2001, and the Court of Appeals affirmed that decision on May 21, 2004.
The Supreme Court granted the petition and rendered judgment setting aside the CA decision and directing dismissal of the registration application.

Issues Presented

Whether the land in question could be the subject of registration under P.D. No. 1529.
Whether the Municipal Trial Court acquired jurisdiction over the application given the alleged inalienable character of the land.
Whether the applicant proved possession and ownership as required by Section 14 of P.D. No. 1529.

Parties' Contentions

REPUBLIC OF THE PHILIPPINES contended that the lots were below the reglementary lake elevation and thus public land under R.A. No. 4850, that the MTC lacked jurisdiction, and that the applicant failed to prove exclusive, continuous, open and notorious possession since June 12, 1945.
CANDY MAKER, INC. argued that the MTC record included the actual copy of the Official Gazette published notice as Exhibit “E-1,” that the lots were privately owned alienable lands acquired by purchase and inheritance, and that tax declarations and survey conduct supported possession in the concept of owner.
The applicant also contended that the LLDA survey reports lacked probative value because they were not formally offered in the MTC.

Statutory Framework

P.D. No. 1529 Section 14 prescribes w