Director Vs Iac And Acme.docx

Republic of the Philippines SUPREME COURT Manila

4. That the constitution of the Republic of the Philippines of 1935 is applicable as the sale took place on October 29, 1962;

EN BANC G.R. No. 73002 December 29, 1986 THE DIRECTOR OF LANDS, petitioner, vs. INTERMEDIATE APPELLATE COURT and ACME PLYWOOD & VENEER CO. INC., ETC., respondents. D. Nacion Law Office for private respondent.

NARVASA, J.: The Director of Lands has brought this appeal by certiorari from a judgment of the Intermediate Appellate Court affirming a decision of the Court of First Instance of Isabela, which ordered registration in favor of Acme Plywood & Veneer Co., Inc. of five parcels of land measuring 481, 390 square meters, more or less, acquired by it from Mariano and Acer Infiel, members of the Dumagat tribe. The registration proceedings were for confirmation of title under Section 48 of Commonwealth Act No. 141 (The Public Land Act). as amended: and the appealed judgment sums up the findings of the trial court in said proceedings in this wise: 1. That Acme Plywood & Veneer Co. Inc., represented by Mr. Rodolfo Nazario is a corporation duly organized in accordance with the laws of the Republic of the Philippines and registered with the Securities and Exchange Commission on December 23, 1959; 2. That Acme Plywood & Veneer Co. Inc., represented Rodolfo Nazario can acquire real properties pursuant provisions of the Articles of Incorporation particularly provision of its secondary purposes (paragraph (9), Exhibit

by Mr. to the on the 'M-l');

3. That the land subject of the Land Registration proceeding was ancestrally acquired by Acme Plywood & Veneer Co., Inc., on October 29, 1962, from Mariano Infiel and Acer Infiel, both members of the Dumagat tribe and as such are cultural minorities;

5. That the possession of the Infiels over the land relinquished or sold to Acme Plywood & Veneer Co., Inc., dates back before the Philippines was discovered by Magellan as the ancestors of the Infiels have possessed and occupied the land from generation to generation until the same came into the possession of Mariano Infiel and Acer Infiel; 6. That the possession of the applicant Acme Plywood & Veneer Co., Inc., is continuous, adverse and public from 1962 to the present and tacking the possession of the Infiels who were granted from whom the applicant bought said land on October 29, 1962, hence the possession is already considered from time immemorial. 7. That the land sought to be registered is a private land pursuant to the provisions of Republic Act No. 3872 granting absolute ownership to members of the non-Christian Tribes on land occupied by them or their ancestral lands, whether with the alienable or disposable public land or within the public domain; 8. That applicant Acme Plywood & Veneer Co. Inc., has introduced more than Forty-Five Million (P45,000,000.00) Pesos worth of improvements, said improvements were seen by the Court during its ocular investigation of the land sought to be registered on September 18, 1982; 9. That the ownership and possession of the land sought to be registered by the applicant was duly recognized by the government when the Municipal Officials of Maconacon, Isabela, have negotiated for the donation of the townsite from Acme Plywood & Veneer Co., Inc., and this negotiation came to reality when the Board of Directors of the Acme Plywood & Veneer Co., Inc., had donated a part of the land bought by the Company from the Infiels for the townsite of Maconacon Isabela (Exh. 'N') on November 15, 1979, and which donation was accepted by the Municipal Government of Maconacon, Isabela (Exh. 'N-l'), during their special session on November 22, 1979. The Director of Lands takes no issue with any of these findings except as to the applicability of the 1935 Constitution to the matter at hand. Concerning this, he asserts that, the registration proceedings have been commenced only on July 17, 1981, or long after the 1973 Constitution had gone into effect, the latter is the correctly applicable law; and since section 11 of its Article XIV prohibits private corporations or associations from holding alienable lands of the public domain, except by lease not to exceed

1,000 hectares (a prohibition not found in the 1935 Constitution which was in force in 1962 when Acme purchased the lands in question from the Infiels), it was reversible error to decree registration in favor of Acme Section 48, paragraphs (b) and (c), of Commonwealth Act No. 141, as amended, reads: SEC. 48. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such lands or an interest therein, but whose titles have not been perfected or completed, may apply to the Court of First Instance of the province where the land is located for confirmation of their claims, and the issuance of a certificate of title therefor, under the Land Registration Act, to wit: xxx xxx xxx (b) Those who by themselves or through their predecessors-ininterest have been in open, continuous, exclusive and notorious possession and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition or ownership, for at least thirty years immediately preceding the filing of the application for confirmation of title except when prevented by war or force majeure. These shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter. (c) Members of the National Cultural minorities who by themselves or through their predecessors-in-interest have been in open. continuous, exclusive and notorious possession and occupation of lands of the public domain suitable to agriculture, whether disposable or not, under a bona fide claim of ownership for at least 30 years shall be entitled to the rights granted in subsection (b) hereof. The Petition for Review does not dispute-indeed, in view of the quoted findings of the trial court which were cited and affirmed by the Intermediate Appellate Court, it can no longer controvert before this Court-the fact that Mariano and Acer Infiel, from whom Acme purchased the lands in question on October 29, 1962, are members of the national cultural minorities who had, by themselves and through their progenitors, possessed and occupied those lands since time immemorial, or for more than the required 30-year period and were, by reason thereof, entitled to exercise the right granted in Section 48 of the Public Land Act to have their title judicially confirmed. Nor is there any pretension that Acme, as the successor-in-interest of the Infiels, is disqualified to acquire and

register ownership of said lands under any provisions of the 1973 Constitution other than Section 11 of its Article XIV already referred to. Given the foregoing, the question before this Court is whether or not the title that the Infiels had transferred to Acme in 1962 could be confirmed in favor of the latter in proceedings instituted by it in 1981 when the 1973 Constitution was already in effect, having in mind the prohibition therein against private corporations holding lands of the public domain except in lease not exceeding 1,000 hectares. The question turns upon a determination of the character of the lands at the time of institution of the registration proceedings in 1981. If they were then still part of the public domain, it must be answered in the negative. If, on the other hand, they were then already private lands, the constitutional prohibition against their acquisition by private corporations or associations obviously does not apply. In this regard, attention has been invited to Manila Electric Company vs. Castro-Bartolome, et al, 1 where a similar set of facts prevailed. In that case, Manila Electric Company, a domestic corporation more than 60% of the capital stock of which is Filipino-owned, had purchased in 1947 two lots in Tanay, Rizal from the Piguing spouses. The lots had been possessed by the vendors and, before them, by their predecessor-in-interest, Olimpia Ramos, since prior to the outbreak of the Pacific War in 1941. On December 1, 1976, Meralco applied to the Court of First Instance of Rizal, Makati Branch, for confirmation of title to said lots. The court, assuming that the lots were public land, dismissed the application on the ground that Meralco, a juridical person, was not qualified to apply for registration under Section 48(b) of the Public Land Act which allows only Filipino citizens or natural persons to apply for judicial confirmation of imperfect titles to public land. Meralco appealed, and a majority of this Court upheld the dismissal. It was held that: ..., the said land is still public land. It would cease to be public land only upon the issuance of the certificate of title to any Filipino citizen claiming it under section 48(b). Because it is still public land and the Meralco, as a juridical person, is disqualified to apply for its registration under section 48(b), Meralco's application cannot be given due course or has to be dismissed. Finally, it may be observed that the constitutional prohibition makes no distinction between (on the one hand) alienable agricultural public lands as to which no occupant has an imperfect title and (on the other hand) alienable lands of the public domain as to which an occupant has on imperfect title subject to judicial confirmation.

Since section 11 of Article XIV does not distinguish, we should not make any distinction or qualification. The prohibition applies to alienable public lands as to which a Torrens title may be secured under section 48(b). The proceeding under section 48(b) 'presupposes that the land is public' (Mindanao vs. Director of Lands, L-19535, July 30, 1967, 20 SCRA 641, 644). The present Chief Justice entered a vigorous dissent, tracing the line of cases beginning with Carino in 1909 2 thru Susi in 1925 3 down to Herico in 1980, 4 which developed, affirmed and reaffirmed the doctrine 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. That said dissent expressed what is the better — and, indeed, the correct, view-becomes evident from a consideration of some of the principal rulings cited therein, The main theme was given birth, so to speak, in Carino involving the Decree/Regulations of June 25, 1880 for adjustment of royal lands wrongfully occupied by private individuals in the Philippine Islands. It was ruled that: It is true that the language of articles 4 and 5 5 attributes title to those 'who may prove' possession for the necessary time and we do not overlook the argument that this means may prove in registration proceedings. It may be that an English conveyancer would have recommended an application under the foregoing decree, but certainly it was not calculated to convey to the mind of an Igorot chief the notion that ancient family possessions were in danger, if he had read every word of it. The words 'may prove' (acrediten) as well or better, in view of the other provisions, might be taken to mean when called upon to do so in any litigation. 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. ... That ruling assumed a more doctrinal character because expressed in more categorical language, in Susi: .... In favor of Valentin Susi, there is, moreover, the presumption juris et de jure established in paragraph (b) of section 45 of Act No. 2874, amending Act No. 926, that all the necessary requirements for a grant by the Government were complied with, for he has been in actual and physical possession, personally and

through his predecessors, of an agricultural land of the public domain openly, continuously, exclusively and publicly since July 26, 1984, with a right to a certificate of title to said land under the provisions of Chapter VIII of said Act. So that when Angela Razon applied for the grant in her favor, Valentin Susi had already acquired, by operation of law not only a right to a grant, but a grant of the Government, for it is not necessary that a certificate of title should be issued in order that said grant may be sanctioned by the courts, an application therefore is sufficient, under the provisions of section 47 of Act No. 2874. If by a legal fiction, Valentin Susi had acquired the land in question by a grant of the State, it had already ceased to be of the public domain and had become private property, at least by presumption, of Valentin Susi, beyond the control of the Director of Lands. Consequently, in selling the land in question of Angela Razon, the Director of Lands disposed of a land over which he had no longer any title or control, and the sale thus made was void and of no effect, and Angela Razon did not thereby acquire any right. 6 Succeeding cases, of which only some need be mentioned, likeof Lacaste vs. Director of Lands, 7 Mesina vs. Vda. de Sonza, 8 Manarpac vs. Cabanatuan, 9 Miguel vs. Court of Appeals 10 and Herico vs. Dar, supra, by invoking and affirming the Susi doctrine have firmly rooted it in jurisprudence. Herico, in particular, appears to be squarely affirmative:

11

.... 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-ininterest, 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. 12 Nothing can more clearly demonstrate the logical inevitability of considering possession of public land which is of the character and duration prescribed by statute as the equivalent of an express grant from the State than the dictum of the statute itself 13 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 claimed 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 Carino, "... (T)here 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." If it is accepted-as it must be-that the land was already private land to which the Infiels had a legally sufficient and transferable title on October 29, 1962 when Acme acquired it from said owners, it must also be conceded that Acme had a perfect right to make such acquisition, there being nothing in the 1935 Constitution then in force (or, for that matter, in the 1973 Constitution which came into effect later) prohibiting corporations from acquiring and owning private lands. Even on the proposition that the land remained technically "public" land, despite immemorial possession of the Infiels and their ancestors, until title in their favor was actually confirmed in appropriate proceedings under the Public Land Act, there can be no serious question of Acmes right to acquire the land at the time it did, there also being nothing in the 1935 Constitution that might be construed to prohibit corporations from purchasing or acquiring interests in public land to which the vendor had already acquired that type of so-called "incomplete" or "imperfect" title. The only limitation then extant was that corporations could not acquire, hold or lease public agricultural lands in excess of 1,024 hectares. The purely accidental circumstance that confirmation proceedings were brought under the aegis of the 1973 Constitution which forbids corporations from owning lands of the public domain cannot defeat a right already vested before that law came into effect, or invalidate transactions then perfectly valid and proper. This Court has already held, in analogous circumstances, that the Constitution cannot impair vested rights.

We hold that the said constitutional prohibition 14 has no retroactive application to the sales application of Binan Development Co., Inc. because it had already acquired a vested right to the land applied for at the time the 1973 Constitution took effect. That vested right has to be respected. It could not be abrogated by the new Constitution. Section 2, Article XIII of the 1935 Constitution allows private corporations to purchase public agricultural lands not exceeding one thousand and twenty-four hectares. Petitioner' prohibition action is barred by the doctrine of vested rights in constitutional law. xxx xxx xxx The due process clause prohibits the annihilation of vested rights. 'A state may not impair vested rights by legislative enactment, by the enactment or by the subsequent repeal of a municipal ordinance, or by a change in the constitution of the State, except in a legitimate exercise of the police power'(16 C.J.S. 1177-78). xxx xxx xxx In the instant case, it is incontestable that prior to the effectivity of the 1973 Constitution the right of the corporation to purchase the land in question had become fixed and established and was no longer open to doubt or controversy. Its compliance with the requirements of the Public Land Law for the issuance of a patent had the effect of segregating the said land from the public domain. The corporation's right to obtain a patent for the land is protected by law. It cannot be deprived of that right without due process (Director of Lands vs. CA, 123 Phil. 919).<äre||anº•1àw> 15 The fact, therefore, that the confirmation proceedings were instituted by Acme in its own name must be regarded as simply another accidental circumstance, productive of a defect hardly more than procedural and in nowise affecting the substance and merits of the right of ownership sought to be confirmed in said proceedings, there being no doubt of Acme's entitlement to the land. As it is unquestionable that in the light of the undisputed facts, the Infiels, under either the 1935 or the 1973 Constitution, could have had title in themselves confirmed and registered, only a rigid subservience to the letter of the law would deny the same benefit to their lawful successor-in-interest by valid conveyance which violates no constitutional mandate.

The Court, in the light of the foregoing, is of the view, and so holds, that the majority ruling in Meralco must be reconsidered and no longer deemed to be binding precedent. The correct rule, as enunciated in the line of cases already referred to, is that 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. Following that rule and on the basis of the undisputed facts, the land subject of this appeal was already private property at the time it was acquired from the Infiels by Acme. Acme thereby acquired a registrable title, there being at the time no prohibition against said corporation's holding or owning private land. The objection that, as a juridical person, Acme is not qualified to apply for judicial confirmation of title under section 48(b) of the Public Land Act is technical, rather than substantial and, again, finds its answer in the dissent in Meralco: 6. To uphold respondent judge's denial of Meralco's application on the technicality that the Public Land Act allows only citizens of the Philippines who are natural persons to apply for confirmation of their title would be impractical and would just give rise to multiplicity of court actions. Assuming that there was a technical error not having filed the application for registration in the name of the Piguing spouses as the original owners and vendors, still it is conceded that there is no prohibition against their sale of the land to the applicant Meralco and neither is there any prohibition against the application being refiled with retroactive effect in the name of the original owners and vendors (as such natural persons) with the end result of their application being granted, because of their indisputable acquisition of ownership by operation of law and the conclusive presumption therein provided in their favor. It should not be necessary to go through all the rituals at the great cost of refiling of all such applications in their names and adding to the overcrowded court dockets when the Court can after all these years dispose of it here and now. (See Francisco vs. City of Davao) The ends of justice would best be served, therefore, by considering the applications for confirmation as amended to conform to the evidence, i.e. as filed in the names of the original persons who as natural persons are duly qualified to apply for formal confirmation of the title that they had acquired by conclusive presumption and mandate of the Public Land Act and who thereafter duly sold to the herein corporations (both admittedly Filipino corporations duly qualified to hold and own private lands) and granting the applications for confirmation of title to the private lands so acquired and sold or exchanged.

There is also nothing to prevent Acme from reconveying the lands to the Infiels and the latter from themselves applying for confirmation of title and, after issuance of the certificate/s of title in their names, deeding the lands back to Acme. But this would be merely indulging in empty charades, whereas the same result is more efficaciously and speedily obtained, with no prejudice to anyone, by a liberal application of the rule on amendment to conform to the evidence suggested in the dissent in Meralco. While this opinion seemingly reverses an earlier ruling of comparatively recent vintage, in a real sense, it breaks no precedent, but only reaffirms and re-established, as it were, doctrines the soundness of which has passed the test of searching examination and inquiry in many past cases. Indeed, it is worth noting that the majority opinion, as well as the concurring opinions of Chief Justice Fernando and Justice Abad Santos, in Meralco rested chiefly on the proposition that the petitioner therein, a juridical person, was disqualified from applying for confirmation of an imperfect title to public land under Section 48(b) of the Public Land Act. Reference to the 1973 Constitution and its Article XIV, Section 11, was only tangential limited to a brief paragraph in the main opinion, and may, in that context, be considered as essentially obiter. Meralco, in short, decided no constitutional question. WHEREFORE, there being no reversible error in the appealed judgment of the Intermediate Appellate Court, the same is hereby affirmed, without costs in this instance. SO ORDERED. Feria, Yap, Fernan, Alampay, Cruz, Paras and Feliciano, JJ., concur.

Separate Opinions GUTIERREZ, JR., J., concurring: I reiterate my concurrence in Meralco v. Castro-Bartolome, and, therefore, dissent here.

TEEHANKEE, C.J., concurring:

I am honored by my brethren's judgment at bar that my dissenting opinion in the June, 1982 Meralco and Iglesia ni Cristo cases, 1 which is herein upheld, "expressed what is the better. . . . and indeed the correct view." My dissent was anchored on the landmark 1909 case of Carino 2 through the 1925 case of Susi 3 and the long line of cases cited therein to the latest 1980 case of Herico 4 that "it is established doctrine....... that an open, continuous, adverse and public possession of a land of the public domain for the period provided in the Public Land Act provision in force at the time (from July 26, 1894 in Susi under the old law [this period was reduced to 'at least thirty years immediately preceding the filing of the application for confirmation of title' by amendment of Commonwealth Act No. 141, equivalent to the period of acquisitive prescription 5 ]) by a private individual personally and through his predecessors confers an effective title on said possessor, whereby the land ceases to be land of the public domain and becomes private property." I hereby reproduce the same by reference for brevity's sake. But since we are reverting to the old above-cited established doctrine and precedents and discarding the Meralco and Iglesia ni Cristocases which departed therefrom in the recent past, I feel constrained to write this concurrence in amplification of my views and ratio decidendi. Under the express text and mandate of the cited Act, such possessors "shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter. " The Court thus held in Susi that under the presumption juris et de jure established in the Act, the rightful possessor of the public land for the statutory period "already acquired, by operation of law, not only a right to a grant, but a grant of the Government, for it is not necessary that certificate of title should be issued an order that said grant may be sanctioned by the courts, an application therefore is sufficient . . . . If by a legal fiction, Valentin Susi had acquiredthe land in question by a grant of the State, it had already ceased to be of the public domain and had become private property, at least by presumption, of Valentin Susi, beyond the control of the Director of Lands [and beyond his authority to sell to any other person]. " 6 The root of the doctrine goes back to the pronouncement of Justice Oliver Wendell Holmes for the U.S. Supreme Court in the 1909 case of Carino (the Igorot chief who would have been deprived of ancestral family lands by the dismissal of his application for registration) which reversed the dismissal of the registration court (as affirmed by the Supreme Court) and adopted the liberal view that under the decree and regulations of June 25, 1880, "The words 'may prove' (acrediten), as well, or better, in view of the other provisions, might be taken to mean when called upon to do so in any litigation. 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, whenever made, was not to confer title, but simply to establish it, as already conferred by the decree, if not by earlier law." The Court's decision at bar now expressly overturns the Meralco and related cases subsequent thereto which failed to adhere to the aforecited established doctrine dating back to 1909 and was consistently applied up to June 29, 1982 (when the Meralco decision was promulgated). We reaffirm the established doctrine that such acquisitive prescription of alienable public lands takes place ipso jure or by operation of law without the necessity of a prior issuance of a certificate of title. The land ipso jure ceases to be of the public domain and becomes private property, which may be lawfully sold to and acquired by qualified corporations such as respondent corporation. (As stressed in Herico supra, "the application for confirmation is a mere formality, the lack of which does not affect the legal sufficiency of the title.") Such ipso jure conversion into private property of public lands publicly held under a bona fide claim of acquisition or ownership is the public policy of the Act and is so expressly stated therein. By virtue of such conversion into private property, qualified corporations may lawfully acquire them and there is no "alteration or defeating" of the 1973 Constitution's prohibition against corporations holding or acquiring title to lands of the public domain, as claimed in the dissenting opinion, for the simple reason that no public lands are involved. It should be noted that respondent corporation purchased the land from the Infiels on October 16, 1962 under the aegis of the 1935 Constitution which contained no prohibition against corporations holding public lands (except a limit of 1,024 hectares) unlike the later 1973 Constitution which imposed an absolute prohibition. Even on the erroneous assumption that the land remained public land despite the Infiels' open possession thereof as owners from time immemorial, respondent corporation's lawful purchase from them of the land in 1962 and P 45million investments redounding presumably to the welfare and progress of the community, particularly the municipality of Maconacon, Isabela to which it donated part of the land for the townsite created a vested right which could not be impaired by the prohibition adopted eleven years later. But as sufficiently stressed, the land of the Infiels had been ipso jure converted into private land and they had a legally sufficient and transferable title conferred by the conclusive presumption of the Public Land Act (which needed only to be established in confirmation of title proceedings for formalization and issuance of the certificate of title) which they lawfully and validly transferred to respondent corporation. In fact, the many amendments to the Act extending the period for the filing of such applications for judicial confirmation of imperfect and incomplete titles to alienable and disposable public lands expressly

reiterate that it has always been the "policy of the State to hasten the settlement, adjudication and quieting of titles to [such] unregistered lands," i.e. to recognize that such lands publicly and notoriously occupied and cultivated under bona fide claim of acquisition or ownership have ipso jure been converted into private property and grant the possessors the opportunity to establish and record such fact. Thus, the deadline for the filing of such application which would have originally expired first on December 31, 1938 was successively extended to December 31, 1941, then extended to December 31, 1957, then to December 31, 1968, further extended to December 31, 1976 and lastly extended to December 31, 1987. 7 The cited Act's provision that only natural persons may apply thereunder for confirmation of title is in effect a technicality of procedure and not of substance. My submittal in Meralco, mutatis mutandis, is properly applicable: "The ends of justice would best be served, therefore, by considering the applications for confirmation as amended to conform to the evidence, i.e. as filed in the names of the original persons who as natural persons are duly qualified to apply for formal confirmation of the title that they had acquired by conclusive presumption and mandate of the Public Land Act and who thereafter duly sold to the herein corporations (both admittedly Filipino corporations duly qualified to hold and own private lands) and granting the applications for confirmation of title to the private lands so acquired and sold or exchanged." 8 Indeed, then Chief Justice Enrique M. Fernando likewise dissented along the same line from the majority ruling therein and held: "I dissent insofar as the opinion of the Court would characterize such jurisdictional defect that the applicant was Meralco, a juridical person rather than the natural personstransferors, under the particular circumstances of this case, as an insurmountable obstacle to the relief sought. I would apply by analogy, although the facts could be distinguished, the approach followed by us in Francisco v. City of Davao, where the legal question raised, instead of being deferred and possibly taken up in another case, was resolved. By legal fiction and in the exercise of our equitable jurisdiction, I feel that the realistic solution would be to decide the matter as if the application under Section 48(b) were filed by the Piguing spouses, who I assume suffer from no such disability." 9 Justice Vicente Abad Santos, now retired, while concurring in the procedural result, likewise, in effect dissented from the therein majority ruling on the question of substance, and stated his opinion that "the lots which are sought to be registered have ceased to be lands of the public domain at the time they were acquired by the petitioner corporation. They are already private lands because of acquisitive prescription by the predecessors of the petitioner and all that is needed is the confirmation of the title. Accordingly, the constitutional provision that no private corporation or association may hold alienable lands of the public domain is inapplicable. " 10

To my mind, the reason why the Act limits the filing of such applications to natural citizens who may prove their undisputed and open possession of public lands for the required statutory thirty-year period, tacking on their predecessors'-in-interest possession is that only natural persons, to the exclusion of juridical persons such as corporations, can actually, physically and in reality possess public lands for the required statutory 30-year period. That juridical persons or corporations cannot do so is obvious. But when the natural persons have fulfilled the required statutory period of possession, the Act confers on them a legally sufficient and transferable title. It is preferable to follow the letter of the law that they file the applications for confirmation of their title, although they have lawfully transferred their title to the land. But such procedural failure cannot and should not defeat the substance of the law, as stressed in the above-cited opinions, that the lands are already private lands because of acquisitive prescription by the corporation's predecessors and the realistic solution would be to consider the application for confirmation as filed by the natural persons-transferors, and in accordance with the evidence, confirm their title to the private lands so converted by operation of law and lawfully transferred by them to the corporation. The law, after all, recognizes the validity of the transfer and sale of the private land to the corporation. It should not be necessary to go in a round-about way and have the corporation reassign its rights to the private land to natural persons-(as I understand), was done after the decision in the Meralco and Iglesia ni Cristo cases) just for the purpose of complying on paper with the technicality of having natural persons file the application for confirmation of title to the private land.

MELENCIO-HERRERA, J., dissenting: Section 48 of the Public Land Act, in part, provides: SEC. 48. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such lands or an interest therein, but whose titles have not been perfected or completed, may apply to the Court of First Instance of the province where the land is located for confirmation of their claims and the issuance of a certificate of title therefor, under the Land Registration Act, to wit: (a) ... (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 are the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter. (c) ... Article XIV, Section 11, of the 1973 Constitution, in part, provides: SEC. 11. .... No private corporation or association may hold alienable lands of the public domain except by lease not to exceed one thousand hectares in area; nor may any citizen hold such lands by lease in excess of five hundred hectares .... It has to be conceded that, literally, statutory law and constitutional provision prevent a corporation from directly applying to the Courts for the issuance of Original Certificates of Title to lands of the public domain (Manila Electric Company vs. Castro-Bartolome, 114 SCRA 799; Republic vs. Villanueva, 114 SCRA 875; Republic vs. Court of Appeals, 119 SCRA 449; Iglesia ni Cristo vs. Hon. Judge, CFI of Nueva Ecija, Br. 1). It is my opinion that the literalism should be adhered to in this case. The reasoning of the majority can be restated in simple terms as follows: (a) The INFIELS can successfully file an application for a certificate of title over the land involved in the case. (b) After the INFIELS secure a certificate of title, they can sell the land to ACME. (c) As ACME can eventually own the certificate of title, it should be allowed to directly apply to the Courts for the Certificate of Title, thus avoiding the circuituous "literal" requirement that the INFIELS should first apply to the courts for the titles, and afterwards transfer the title to ACME. The majority opinion, in effect, adopted the following excerpt from a dissent in Manila Electric Company vs. Castro-Bartolome (114 SCRA 799, 823 [1982]). To uphold respondent judge's denial of Meralco's application on the technicality that the Public Land Act allows only citizens of the Philippines who are natural persons to apply for confirmation of their title would be impractical and would just give rise to multiplicity of court actions. Assuming that there was a technical

error in not having filed the application for registration in the name of the Piguing spouses as the original owners and vendors, still it is conceded that there is no prohibition against their sale of the land to the applicant Meralco and neither is there any prohibition against the application being refiled with retroactive effect in the name of the original owners and vendors (as such natural persons) with the end result of their application being granted, because of their indisputable acquisition of ownership by operation of law and the conclusive presumption therein provided in their favor. It should not be necessary to go through all the rituals at the great cost of refiling of all such applications in their names and adding to the overcrowded court dockets when the Court can after all these years dispose of it here and now." (Paragraphing supplied) The effect is that the majority opinion now nullifies the statutory provision that only citizens (natural persons) can apply for certificates of title under Section 48(b) of the Public Land Act, as well as the constitutional provision (Article XIV, Section 11) which prohibits corporations from acquiring title to lands of the public domain. That interpretation or construction adopted by the majority cannot be justified. "A construction adopted should not be such as to nullify, destroy or defeat the intention of the legislature" (New York State Dept. of Social Services v. Dublino [UST 37 L. Ed 2d 688, 93 S Ct 2507; United States v. Alpers 338 US 680, 94 L Ed 457, 70 S Ct 352; cited in 73 Am Jur. 2nd., p. 351). It has also been said that: In the construction of statutes, the courts start with the assumption that the legislature intended to enact an effective law, and the legislature is not to be presumed to have done a vain thing in the enactment of a statute. Hence, it is a general principle that the courts should, if reasonably possible to do so interpret the statute, or the provision being construed, so as to give it efficient operation and effect as a whole. An interpretation should, if possible, be avoided, under which the statute or provision being construed is defeated, or as otherwise expressed, nullified, destroyed, emasculated, repealed, explained away, or rendered insignificant, meaningless, inoperative, or nugatory. If a statute is fairly susceptible of two constructions, one of which will give effect to the act, while the other will defeat it, the former construction is preferred. One part of a statute may not be construed so as to render another part nugatory or of no effect. Moreover, notwithstanding the general rule against the enlargement of

extension of a statute by construction, the meaning of a statute may be extended beyond the precise words used in the law, and words or phrases may be altered or supplied, where this is necessary to prevent a law from becoming a nullity. Wherever the provision of a statute is general everything which is necessary to make such provision effectual is supplied by implication. (Pliakos vs. Illinois Liquor Control Com. 11 III 2d 456, 143 NE2d 47; cited in 73 AM Jur. 2d pp. 422-423) The statutory provision and the constitutional prohibition express a public policy. The proper course for the Court to take is to promote in the fullest manner the policy thus laid down and to avoid a construction which would alter or defeat that policy. In fine, I confirm my adherence to the ruling of this Court in Meralco vs. Hon. Castro-Bartolome, 114 SCRA 799 [1982] and related cases.

Separate Opinions GUTIERREZ, JR., J., concurring: I reiterate my concurrence in Meralco v. Castro-Bartolome, and, therefore, dissent here.

TEEHANKEE, C.J., concurring: I am honored by my brethren's judgment at bar that my dissenting opinion in the June, 1982 Meralco and Iglesia ni Cristo cases, 1 which is herein upheld, "expressed what is the better. . . . and indeed the correct view." My dissent was anchored on the landmark 1909 case of Carino 2 through the 1925 case of Susi 3 and the long line of cases cited therein to the latest 1980 case of Herico 4 that "it is established doctrine....... that an open, continuous, adverse and public possession of a land of the public domain for the period provided in the Public Land Act provision in force at the time (from July 26, 1894 in Susi under the old law [this period was reduced to 'at least thirty years immediately preceding the filing of the application for confirmation of title' by amendment of Commonwealth Act No. 141, equivalent to the period of acquisitive prescription 5 ]) by a private individual personally and through his predecessors confers an effective title on said possessor, whereby the land

ceases to be land of the public domain and becomes private property." I hereby reproduce the same by reference for brevity's sake. But since we are reverting to the old above-cited established doctrine and precedents and discarding the Meralco and Iglesia ni Cristocases which departed therefrom in the recent past, I feel constrained to write this concurrence in amplification of my views and ratio decidendi. Under the express text and mandate of the cited Act, such possessors "shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter. " The Court thus held in Susi that under the presumption juris et de jure established in the Act, the rightful possessor of the public land for the statutory period "already acquired, by operation of law, not only a right to a grant, but a grant of the Government, for it is not necessary that certificate of title should be issued an order that said grant may be sanctioned by the courts, an application therefore is sufficient . . . . If by a legal fiction, Valentin Susi had acquiredthe land in question by a grant of the State, it had already ceased to be of the public domain and had become private property, at least by presumption, of Valentin Susi, beyond the control of the Director of Lands [and beyond his authority to sell to any other person]. " 6 The root of the doctrine goes back to the pronouncement of Justice Oliver Wendell Holmes for the U.S. Supreme Court in the 1909 case of Carino (the Igorot chief who would have been deprived of ancestral family lands by the dismissal of his application for registration) which reversed the dismissal of the registration court (as affirmed by the Supreme Court) and adopted the liberal view that under the decree and regulations of June 25, 1880, "The words 'may prove' (acrediten), as well, or better, in view of the other provisions, might be taken to mean when called upon to do so in any litigation. 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, whenever made, was not to confer title, but simply to establish it, as already conferred by the decree, if not by earlier law." The Court's decision at bar now expressly overturns the Meralco and related cases subsequent thereto which failed to adhere to the aforecited established doctrine dating back to 1909 and was consistently applied up to June 29, 1982 (when the Meralco decision was promulgated).<äre||anº•1àw> We reaffirm the established doctrine that such acquisitive prescription of alienable public lands takes place ipso jure or by operation of law without the necessity of a prior issuance of a certificate of title. The land ipso jure ceases to be of the public domain and becomes private property, which may be lawfully sold to and acquired by qualified corporations such as respondent corporation. (As stressed

in Herico supra, "the application for confirmation is a mere formality, the lack of which does not affect the legal sufficiency of the title.") Such ipso jure conversion into private property of public lands publicly held under a bona fide claim of acquisition or ownership is the public policy of the Act and is so expressly stated therein. By virtue of such conversion into private property, qualified corporations may lawfully acquire them and there is no "alteration or defeating" of the 1973 Constitution's prohibition against corporations holding or acquiring title to lands of the public domain, as claimed in the dissenting opinion, for the simple reason that no public lands are involved. It should be noted that respondent corporation purchased the land from the Infiels on October 16, 1962 under the aegis of the 1935 Constitution which contained no prohibition against corporations holding public lands (except a limit of 1,024 hectares) unlike the later 1973 Constitution which imposed an absolute prohibition. Even on the erroneous assumption that the land remained public land despite the Infiels' open possession thereof as owners from time immemorial, respondent corporation's lawful purchase from them of the land in 1962 and P 45million investments redounding presumably to the welfare and progress of the community, particularly the municipality of Maconacon, Isabela to which it donated part of the land for the townsite created a vested right which could not be impaired by the prohibition adopted eleven years later. But as sufficiently stressed, the land of the Infiels had been ipso jure converted into private land and they had a legally sufficient and transferable title conferred by the conclusive presumption of the Public Land Act (which needed only to be established in confirmation of title proceedings for formalization and issuance of the certificate of title) which they lawfully and validly transferred to respondent corporation. In fact, the many amendments to the Act extending the period for the filing of such applications for judicial confirmation of imperfect and incomplete titles to alienable and disposable public lands expressly reiterate that it has always been the "policy of the State to hasten the settlement, adjudication and quieting of titles to [such] unregistered lands," i.e. to recognize that such lands publicly and notoriously occupied and cultivated under bona fide claim of acquisition or ownership have ipso jure been converted into private property and grant the possessors the opportunity to establish and record such fact. Thus, the deadline for the filing of such application which would have originally expired first on December 31, 1938 was successively extended to December 31, 1941, then extended to December 31, 1957, then to December 31, 1968, further extended to December 31, 1976 and lastly extended to December 31, 1987. 7 The cited Act's provision that only natural persons may apply thereunder for confirmation of title is in effect a technicality of procedure and not of

substance. My submittal in Meralco, mutatis mutandis, is properly applicable: "The ends of justice would best be served, therefore, by considering the applications for confirmation as amended to conform to the evidence, i.e. as filed in the names of the original persons who as natural persons are duly qualified to apply for formal confirmation of the title that they had acquired by conclusive presumption and mandate of the Public Land Act and who thereafter duly sold to the herein corporations (both admittedly Filipino corporations duly qualified to hold and own private lands) and granting the applications for confirmation of title to the private lands so acquired and sold or exchanged." 8 Indeed, then Chief Justice Enrique M. Fernando likewise dissented along the same line from the majority ruling therein and held: "I dissent insofar as the opinion of the Court would characterize such jurisdictional defect that the applicant was Meralco, a juridical person rather than the natural personstransferors, under the particular circumstances of this case, as an insurmountable obstacle to the relief sought. I would apply by analogy, although the facts could be distinguished, the approach followed by us in Francisco v. City of Davao, where the legal question raised, instead of being deferred and possibly taken up in another case, was resolved. By legal fiction and in the exercise of our equitable jurisdiction, I feel that the realistic solution would be to decide the matter as if the application under Section 48(b) were filed by the Piguing spouses, who I assume suffer from no such disability." 9 Justice Vicente Abad Santos, now retired, while concurring in the procedural result, likewise, in effect dissented from the therein majority ruling on the question of substance, and stated his opinion that "the lots which are sought to be registered have ceased to be lands of the public domain at the time they were acquired by the petitioner corporation. They are already private lands because of acquisitive prescription by the predecessors of the petitioner and all that is needed is the confirmation of the title. Accordingly, the constitutional provision that no private corporation or association may hold alienable lands of the public domain is inapplicable. " 10 To my mind, the reason why the Act limits the filing of such applications to natural citizens who may prove their undisputed and open possession of public lands for the required statutory thirty-year period, tacking on their predecessors'-in-interest possession is that only natural persons, to the exclusion of juridical persons such as corporations, can actually, physically and in reality possess public lands for the required statutory 30-year period. That juridical persons or corporations cannot do so is obvious. But when the natural persons have fulfilled the required statutory period of possession, the Act confers on them a legally sufficient and transferable title. It is preferable to follow the letter of the law that they file the applications for confirmation of their title, although they have lawfully transferred their title to the land. But such procedural failure cannot and should not defeat the substance of the law, as stressed in the above-cited opinions, that the lands are already private lands because of acquisitive prescription by the corporation's predecessors and the realistic solution would be to consider the application for confirmation as filed by the natural

persons-transferors, and in accordance with the evidence, confirm their title to the private lands so converted by operation of law and lawfully transferred by them to the corporation. The law, after all, recognizes the validity of the transfer and sale of the private land to the corporation. It should not be necessary to go in a round-about way and have the corporation reassign its rights to the private land to natural persons-(as I understand), was done after the decision in the Meralco and Iglesia ni Cristo cases) just for the purpose of complying on paper with the technicality of having natural persons file the application for confirmation of title to the private land.

It has to be conceded that, literally, statutory law and constitutional provision prevent a corporation from directly applying to the Courts for the issuance of Original Certificates of Title to lands of the public domain (Manila Electric Company vs. Castro-Bartolome, 114 SCRA 799; Republic vs. Villanueva, 114 SCRA 875; Republic vs. Court of Appeals, 119 SCRA 449; Iglesia ni Cristo vs. Hon. Judge, CFI of Nueva Ecija, Br. 1). It is my opinion that the literalism should be adhered to in this case. The reasoning of the majority can be restated in simple terms as follows: (a) The INFIELS can successfully file an application for a certificate of title over the land involved in the case.

MELENCIO-HERRERA, J., dissenting:

(b) After the INFIELS secure a certificate of title, they can sell the land to ACME.

Section 48 of the Public Land Act, in part, provides: SEC. 48. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such lands or an interest therein, but whose titles have not been perfected or completed, may apply to the Court of First Instance of the province where the land is located for confirmation of their claims and the issuance of a certificate of title therefor, under the Land Registration Act, to wit: (a) ... (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 are the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter. (c) ... Article XIV, Section 11, of the 1973 Constitution, in part, provides: SEC. 11. .... No private corporation or association may hold alienable lands of the public domain except by lease not to exceed one thousand hectares in area; nor may any citizen hold such lands by lease in excess of five hundred hectares ....

(c) As ACME can eventually own the certificate of title, it should be allowed to directly apply to the Courts for the Certificate of Title, thus avoiding the circuituous "literal" requirement that the INFIELS should first apply to the courts for the titles, and afterwards transfer the title to ACME. The majority opinion, in effect, adopted the following excerpt from a dissent in Manila Electric Company vs. Castro-Bartolome (114 SCRA 799, 823 [1982]). To uphold respondent judge's denial of Meralco's application on the technicality that the Public Land Act allows only citizens of the Philippines who are natural persons to apply for confirmation of their title would be impractical and would just give rise to multiplicity of court actions. Assuming that there was a technical error in not having filed the application for registration in the name of the Piguing spouses as the original owners and vendors, still it is conceded that there is no prohibition against their sale of the land to the applicant Meralco and neither is there any prohibition against the application being refiled with retroactive effect in the name of the original owners and vendors (as such natural persons) with the end result of their application being granted, because of their indisputable acquisition of ownership by operation of law and the conclusive presumption therein provided in their favor. It should not be necessary to go through all the rituals at the great cost of refiling of all such applications in their names and adding to the

overcrowded court dockets when the Court can after all these years dispose of it here and now." (Emphasis supplied)

In fine, I confirm my adherence to the ruling of this Court in Meralco vs. Hon. Castro-Bartolome, 114 SCRA 799 [1982] and related cases.

The effect is that the majority opinion now nullifies the statutory provision that only citizens (natural persons) can apply for certificates of title under Section 48(b) of the Public Land Act, as well as the constitutional provision (Article XIV, Section 11) which prohibits corporations from acquiring title to lands of the public domain. That interpretation or construction adopted by the majority cannot be justified. "A construction adopted should not be such as to nullify, destroy or defeat the intention of the legislature" (New York State Dept. of Social Services v. Dublino [UST 37 L. Ed 2d 688, 93 S Ct 2507; United States v. Alpers 338 US 680, 94 L Ed 457, 70 S Ct 352; cited in 73 Am Jur. 2nd., p. 351).

Footnotes

It has also been said that: In the construction of statutes, the courts start with the assumption that the legislature intended to enact an effective law, and the legislature is not to be presumed to have done a vain thing in the enactment of a statute. Hence, it is a general principle that the courts should, if reasonably possible to do so interpret the statute, or the provision being construed, so as to give it efficient operation and effect as a whole. An interpretation should, if possible, be avoided, under which the statute or provision being construed is defeated, or as otherwise expressed, nullified, destroyed, emasculated, repealed, explained away, or rendered insignificant, meaningless, inoperative, or nugatory. If a statute is fairly susceptible of two constructions, one of which will give effect to the act, while the other will defeat it, the former construction is preferred. One part of a statute may not be construed so as to render another part nugatory or of no effect. Moreover, notwithstanding the general rule against the enlargement of extension of a statute by construction, the meaning of a statute may be extended beyond the precise words used in the law, and words or phrases may be altered or supplied, where this is necessary to prevent a law from becoming a nullity. Wherever the provision of a statute is general everything which is necessary to make such provision effectual is supplied by implication. (Pliakos vs. Illinois Liquor Control Com. 11 III 2d 456, 143 NE2d 47; cited in 73 AM Jur. 2d pp. 422-423) The statutory provision and the constitutional prohibition express a public policy. The proper course for the Court to take is to promote in the fullest manner the policy thus laid down and to avoid a construction which would alter or defeat that policy.

1 114 SCRA 799. 2 Carino vs. Insular Government, 41 Phil. 935, 944. 3 Susi vs. Razon, 48 Phil. 424. 4 Herico vs. Dar 95 SCRA 437. 5 Of said Decree/Regulations of June 25, 1880. 6 emphasis supplied. 7 63 Phil. 654. 8 Phil. 251. 9 21 SCRA 743. 10 29 SCRA 760. 11 There was withal a later attempt by the ponente in Herico (Castro, J.) to somewhat soften the import of the doctrine, in his concurrence in Meralco (114 SCRA 799, 810-813) 12 Emphasis supplied; the provision referred to is Section 48(b) of C.A. No. 141. " 13 Sec. 48(b). 14 Referring, precisely, to Article XIV, Section 11, of the 1973 Constitution. 15 Ayog vs. Cusi, Jr., 118 SCRA 492. Teehankee, C.J., 1 Meralco vs. Castro-Bartolome, 114 SCRA 799, and Republic vs. Villanueva and Iglesia ni Cristo, 114 SCRA 875, respectively.

Director of Lands v. IAC, ACME Plywood and Veneer Co. Digest Director of Lands vs. Intermediate Appelate Court (IAC) 146 SCRA 509 December 29, 1986

Facts: 1. Defendant through his lawyer filed an answer therein admitting the averment i n the complaint that the land was acquired by the plai ntiff through i nheritance from his parents, the former owners thereof. 2.Subsequentl y, the defendant changed his counsel, and with leave of court, amended the answer. In the amended answer, the admission no longer appears. The alleged ownership of the land by the plai ntiff was denied coupled with an allegation that the defendant is the owner of the land as he bought it from the plaintiff’s parents while they were still alive. 3. A f t e r t r i a l , t h e lower court upheld t h e d e f e n d a n t ’ s ownership of the land. On appeal, the plaintiff contended that the defendant is bound by the admission contained in his original answer. Issue: Whether or not the contention of plaintiff is correct RULING: NO. The original pleading had been amended such that it already disappeared from the record, lost its status as a pleading and cease to be a judicial admission. While the said pleading may be utilized against the pleader as extrajudicial admission, they must, in order t o h a v e s u c h e f f e c t , b e formally offered in evidence.

DIRECTOR OF LANDS v. INTERMEDIATE APPELLATE COURT and ACMEPLYWOOD & VENEER Co. INC., ETC.146 SCRA 509 DATE: December 29, 1986 PETITIONER: The Director of Lands RESPONDENTS: Intermediate Appellate Court and Acme Plywood & Veneer Co.Inc., Etc.PONENTE: J. Narvasa FACTS:The Director of Lands appealed the judgement of the Intermediate AppellateCourt which affirmed the decision of the Court of First Instance of Isabelaordering the registration in favor of Acme Plywood & Veneer Co., Inc. of fiveparcels of land measuring 481, 390 sqm., acquired from Mariano and Acer Infiel,members of the indigenous Dumagat Tribe and owners of the lots-in-questionfrom time immemorial, on October 29, 1962. This was accordingly onlyregistered on July 17, 1982 long after the aegis of the 1973 Constitution. ISSUES:1.Whether or not the ruling in the case, Meralco v. CastroBartolome (114SRC 799) should be overturned in light of jurisprudence. 2.Whether or not the conversion of the land in question is recognized. 3.Whether or not the provision barring private companies and associationsfrom purchasing public alienable lands in 1973 Constitution is applicableretroactively. RULING:1. HELD. In light of the jurisprudence traced from Carino v. Insular Gov’t, to Susi v. Razon, to Herico v. Dar, the court overturned the decision onMeralco v. Castro-Bartolome, stating that a possession is said to beprescriptively acquired by the operation of the Public Lands Act, uponconclusively presumed fulfillment of all the necessary conditions for aGovernment Grant. Thus, the land in question effectively ceased to be of the public domain and was therefore classified as private property at themoment of the sale through the continuous and unchallenged possessionof the bona fide right t o ownership from Meralco’s predecessors -interest.There being no law prohibiting the sale of private lands to privately heldcorporations, the court thus overturned the decision.2. HELD. Referring to the ruling in Meralco v. Castro-Bartolome, the landheld by the Infiels since time immemorial was effectively deemed asprivate land, by the operation of the law, ipso jure. Thus, at the moment of the sale, ACME Plywood & Veneer Co., Inc., Etc. therefore, purchased

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-46729 November 19, 1982 LAUSAN AYOG, BENITO AYOG, DAMASO AYOG, JULIO AYOG, SEGUNDA AYOG, VICENTE ABAQUETA, BERNARDINO ADORMEO, VIDAL ALBANO, FELICIANO ARIAS, ANTONIO BALDOS, MAXIMO BALDOS, ROMERO BINGZON, EMILIO CADAYDAY, FRUCTUOSO CHUA, SR., HERACLEO CHUA, GUILLERMO DAGOY, ABDON DEIMOS, NICASIO DE LEON, JULIANA VDA. DE DIANNA, DEMOCRITO DEVERO, ALFREDO DIVINAGRACIA, ESTEBAN DIVINAGRACIA, LEODEGARDIO DIVINAGRACIA, NELLO DIVINAGRACIA, MERQUIADES EMBERADOR, JESUS EMPERADO, PORFERIO ENOC, SOFRONIO ENOC, RAFAEL GAETOS, NICOLAS GARLET, TRINIDAD GARLET, FORTUNATA GEONZON, NICOLADA NAQUILA, TORIBIO NAQUILA, EFREN OKAY, ELPIDIO OKAY, SR., DIEGO ONGRIA, ERNESTO PANARES, VICENTE PATULOT, IGNACIA RIBAO, JUANO RICO, JESUS ROSALITA, ARMANDO TANTE and ANSELMO VALMORES, petitioners, vs. JUDGE VICENTE N. CUSI, JR., Court of First Instance of Davao, Branch I, PROVINCIAL SHERIFF OF DAVAO, and BINAN DEVELOPMENT CO., INC., respondents. MINISTER OF NATURAL RESOURCES and DIRECTOR OF LANDS, intervenors. AQUINO, J.: This case is about the application of section 11, Article XIV of the 1973 Constitution (disqualifying a private corporation from purchasing public lands) to a 1953 sales award made by the Bureau of Lands, for which a sales patent and Torrens title were issued in 1975, and to the 1964 decision of the trial court, ejecting some of the petitioners from the land purchased, which decision was affirmed in 1975 by the Court of Appeals. That legal question arises under the following facts: On January 21, 1953, the Director of Lands, after a bidding, awarded to Biñan Development Co., Inc. on the basis of its 1951 Sales Application No. V-6834 Cadastral Lot No. 281 located at Barrio Tamugan, Guianga (Baguio District), Davao City with an area of about two hundred fifty hectares. Some occupants of the lot protested against the sale. The Director of Lands in his decision of August 30, 1957 dismissed the protests and ordered the occupants to vacate the lot and remove their improvements. No appeal was made from that decision.

The Director found that the protestants (defendants in the 1961 ejectment suit, some of whom are now petitioners herein) entered the land only after it was awarded to the corporation and, therefore, they could not be regarded as bona fide occupants thereof. The Director characterized them as squatters. He found that some claimants were fictitious persons (p. 30, Rollo of L-43505, Okay vs. CA). He issued a writ of execution but the protestants defied the writ and refused to vacate the land (p. 28, Rollo of L-43505, Okay vs. CA). ** Because the alleged occupants refused to vacate the land, the corporation filed against them on February 27, 1961 in the Court of First Instance of Davao, Civil Case No. 3711, an ejectment suit (accion publiciana). The forty defendants were Identified as follows: 1. Vicente Abaqueta 21. Eniego Garlic 2. Candido Abella 22. Nicolas Garlic 3. Julio Ayog 23. Rufo Garlic 4. Arcadio Ayong 24. Alfonso Ibales 5. Generoso Bangonan 25. Julian Locacia 6. Lomayong Cabao 26. Filomeno Labantaban 7. Jose Catibring 27. Arcadio Lumantas 8. Teodolfo Chua 28. Santos Militante 9. Guillermo Dagoy 29. Toribio Naquila 10. Anastacia Vda. de Didal 30. Elpidio Okay 11. Alfredo Divinagracia 31. Guillermo Omac 12. Silverio Divinagracia 32. Emilio Padayday 13. Galina Edsa 33. Marcosa Vda. de Rejoy 14. Jesus Emperado 34. Lorenzo Rutsa 15. Porfirio Enoc 35. Ramon Samsa

16. Benito Ente 36. Rebecca Samsa 17. German Flores 37. Alfeao Sante 18. Ciriaco Fuentes 38. Meliton Sante 19. Pulong Gabao 39. Amil Sidaani 20. Constancio Garlic 40. Cosme Villegas That ejectment suit delayed the issuance of the patent. The trial court found that the protests of twenty of the abovenamed defendants were among those that were dismissed by the Director of Lands in his 1957 decision already mentioned. On July 18, 1961 the purchase price of ten thousand pesos was fully paid by Binan Development Co., Inc. On November 10, 1961, an official of the Bureau of Lands submitted a final investigation report wherein it was stated that the corporation had complied with the cultivation and other requirements under the Public Land Law and had paid the purchase price of the land (p. 248, Rollo). It was only more than thirteen years later or on August 14, 1975 when Sales Patent No. 5681 was issued to the corporation for that lot with a reduced area of 175.3 hectares. The patent was registered. Original Certificate of Title No. P-5176 was issued to the patentee. The Director of Lands in his memorandum dated June 29, 1974 for the Secretary of Natural Resources, recommending approval of the sales patent, pointed out that the purchaser corporation had complied with the said requirements long before the effectivity of the Constitution, that the land in question was free from claims and conflicts and that the issuance of the patent was in conformity with the guidelines prescribed in Opinion No. 64, series of 1973, of Secretary of Justice Vicente Abad Santos and was an exception to the prohibition in section 11, Article XIV of the Constitution (p. 258, Rollo). Secretary of Natural Resources Jose J. Leido, Jr., in approving the patent on August 14, 1975, noted that the applicant had acquired a nested right to its issuance (p. 259, Rollo). Before that patent was issued, there was a trial in the ejectment suit. Fifteen defendants (out of forty), namely, Julio Ayog, Guillermo Bagoy, Generoso Bangonan, Jose Catibring, Porfirio Enoc, Jose Emperado, Arcadio Lomanto, Toribio Naquila, Elpidio Okay, Alfeo Sante, Meliton Sante, Ramon Samsa, Rebecca Samsa, Arcadio Sarumines and Felix Tahantahan,

testified that they entered the disputed land long before 1951 and that they planted it to coconuts, coffee, jackfruit and other fruit trees. (p. 28, Record on Appeal). The trial court did not give credence to their testimonies. It believed the report of an official of the Bureau of Lands that in 1953 the land was free from private claims and conflicts and it gave much weight to the decision of the Director of Lands dismissing the protests of the defendants against the sales award (p. 30, Record on Appeal). Furthermore, the trial court during its ocular inspection of the land on November 8, 1964 found that the plantings on the land could not be more than ten years old, meaning that they were not existing in 1953 when the sales award was made. Hence, the trial court ordered the defendants to vacate the land and to restore the possession thereof to tile company. The Court of Appeals affirmed that judgment on December 5, 1975 in its decision in Binan Development Co., Inc. vs, Sante, CA-G.R. No. 37142- R. The review of the decision was denied by this Court on May 17, 1976 in Elpidio Okay vs. Court of Appeals, L-43505. After the record was remanded to the trial court, the corporation filed a motion for execution. The defendants, some of whom are now petitioners herein, opposed the motion. They contended that the adoption of the Constitution, which took effect on January 17, 1973, was a supervening fact which rendered it legally impossible to execute the lower court's judgment. They invoked the constitutional prohibition, already mentioned, that "no private corporation or association may hold alienable lands of the public domain except by lease not to exceed one thousand hectares in area." The lower court suspended action on the motion for execution because of the manifestation of the defendants that they would file a petition for prohibition in this Court. On August 24, 1977, the instant prohibition action was filed. Some of the petitioners were not defendants in the ejectment case. We hold that the said constitutional prohibition has no retroactive application to the sales application of Biñan Development Co., Inc. because it had already acquired a vested right to the land applied for at the time the 1973 Constitution took effect. That vested right has to be respected. lt could not be abrogated by the new Constitution. Section 2, Article XIII of the 1935 Constitution allows private corporations to purchase public agricultural lands not exceeding one thousand and twenty-four hectares. Petitioners' prohibition action is barred by the doctrine of vested rights in constitutional law.

"A right is vested when the right to enjoyment has become the property of some particular person or persons as a present interest" (16 C.J.S. 1173). It is "the privilege to enjoy property legally vested, to enforce contracts, and enjoy the rights of property conferred by the existing law" (12 C.J. 955, Note 46, No. 6) or "some right or interest in property which has become fixed and established and is no longer open to doubt or controversy" (Downs vs. Blount 170 Fed. 15, 20, cited in Balboa vs. Farrales, 51 Phil. 498, 502).

question had become fixed and established and was no longer open to doubt or controversy.

The due process clause prohibits the annihilation of vested rights. "A state may not impair vested rights by legislative enactment, by the enactment or by the subsequent repeal of a municipal ordinance, or by a change in the constitution of the State, except in a legitimate exercise of the police power" (16 C.J.S. 1177-78).

As we cannot review the factual findings of the trial court and the Court of Appeals, we cannot entertain petitioners' contention that many of them by themselves and through their predecessors-in-interest have possessed portions of land even before the war. They should have filed homestead or free patent applications.

It has been observed that, generally, the term "vested right" expresses the concept of present fixed interest, which in right reason and natural justice should be protected against arbitrary State action, or an innately just and imperative right which an enlightened free society, sensitive to inherent and irrefragable individual rights, cannot deny (16 C.J.S. 1174, Note 71, No. 5, citing Pennsylvania Greyhound Lines, Inc. vs. Rosenthal, 192 Atl. 2nd 587).

Our jurisdiction is limited to the resolution of the legal issue as to whether the 1973 Constitution is an obstacle to the implementation of the trial court's 1964 final and executory judgment ejecting the petitioners. On that issue, we have no choice but to sustain its enforceability.

Secretary of Justice Abad Santos in his 1973 opinion ruled that where the applicant, before the Constitution took effect, had fully complied with all his obligations under the Public Land Act in order to entitle him to a sales patent, there would seem to be no legal or equitable justification for refusing to issue or release the sales patent (p. 254, Rollo). In Opinion No. 140, series of 1974, he held that as soon as the applicant had fulfilled the construction or cultivation requirements and has fully paid the purchase price, he should be deemed to have acquired by purchase the particular tract of land and to him the area limitation in the new Constitution would not apply. In Opinion No. 185, series of 1976, Secretary Abad Santos held that where the cultivation requirements were fulfilled before the new Constitution took effect but the full payment of the price was completed after January 17, 1973, the applicant was, nevertheless, entitled to a sales patent (p. 256, Rollo). Such a contemporaneous construction of the constitutional prohibition by a high executive official carries great weight and should be accorded much respect. It is a correct interpretation of section 11 of Article XIV. In the instant case, it is incontestable that prior to the effectivity of the 1973 Constitution the right of the corporation to purchase the land in

Its compliance with the requirements of the Public Land Law for the issuance of a patent had the effect of segregating the said land from the public domain. The corporation's right to obtain a patent for that land is protected by law. It cannot be deprived of that right without due process (Director of Lands vs. CA, 123 Phil. 919).

Nevertheless, in the interest of social justice, to avoid agrarian unrest and to dispel the notion that the law grinds the faces of the poor, the administrative authorities should find ways and means of accommodating some of the petitioners if they are landless and are really tillers of the soil who in the words of President Magsaysay deserve a little more food in their stomachs, a little more shelter over their heads and a little more clothing on their backs. The State should endeavor to help the poor who find it difficult to make both ends meet and who suffer privations in the universal struggle for existence. A tiller of the soil is entitled to enjoy basic human rights, particularly freedom from want. The common man should be assisted in possessing and cultivating a piece of land for his sustenance, to give him social security and to enable him to achieve a dignified existence and become an independent, self-reliant and responsible citizen in our democratic society. To guarantee him that right is to discourage him from becoming a subversive or from rebelling against a social order where, as the architect of the French Revolution observed, the rich are choking with the superfluities of life but the famished multitude lack the barest necessities. Indeed, one purpose of the constitutional prohibition against purchases of public agricultural lands by private corporations is to equitably diffuse land ownership or to encourage "owner-cultivatorship and the economic familysize farm" and to prevent a recurrence of cases like the instant case. Huge landholdings by corporations or private persons had owned social unrest.

Petitioners' counsel claims that Biñan Development Co., Inc. seeks to execute the judgment in Civil Case No. 3711, the ejectment suit from which this prohibition case arose, against some of the petitioners who were not defendants in that suit (p. 126, Rollo). Those petitioners are not successors-in-interest of the defendants in the ejectment suit. Nor do they derive their right of possession from the said defendants. Those petitioners occupy portions of the disputed land distinct and separate from the portions occupied by the said defendants. We hold that judgment cannot be enforced against the said petitioners who were not defendants in that litigation or who were not summoned and heard in that case. Generally, "it is an axiom of the law that no man shall be affected by proceedings to which he is a stranger" (Ed. A. Keller & Co. vs Ellerman & Bucknall Steamship Co., 38 Phil. 514, 520). To enforce the judgment against those who were not parties to the case and who occupy portions of the disputed land distinct and separate from the portions occupied by the defendants in the ejectment suit, would be violative of due process of law, the law which, according to Daniel Webster in his argument in the Dartmouth College case, is the law of the land, a law which hears before it condemns, which proceeds upon inquiry and renders judgment only after trial. "The meaning is, that every citizen shall hold his life, liberty, property, and immunities, under the protection of the general rules which govern society." (Cited in Lopez vs. Director of Lands, 47 Phil. 23, 32. See Gatchalian vs. Arlegui, L-35615 and Tang Tee vs. Arlegui, L-41360, February 17, 1977, 75 SCRA 234 and Berses vs. Villanueva, 25 Phil. 473.) Contempt incident.-During the pendency of this case, or at about four o'clock in the morning of December 12, 1978, Ciriaco Tebayan, Domingo Nevasca, Rogelio Duterte and Sofronio Etac, employees of the Crown Fruits and Cannery Corporation, plowed or bulldozed with their tractors a portion of the disputed land which was occupied by Melquiades Emberador, one of the petitioners herein. The disputed land was leased by Biñan Development Co., Inc. to the canning corporation. The four tractor drivers destroyed the improvements thereon worth about five thousand pesos consisting of coffee, coconut and banana plants. Emberador was in the hospital at the time the alleged destruction of the improvements occurred. However, it should be noted that Emberador was not expressly named as a defendant in the ejectment suit. Apparently, he is not included in the trial court's decision although he was joined as a copetitioner in this prohibition case. The petitioners in their motion of January 11, 1979 asked that the four tractor drivers and Honesto Garcia, the manager of Biñan Development

Co., Inc., be declared in contempt of court for having disregarded the restraining order issued by this Court on August 29, 1977, enjoining specifically Judge Vicente N. Cusi and the provincial sheriff from enforcing the decision in the ejectment suit, Civil Case No. 3711 (pp. 46-47, 138141, Rollo). Garcia and the four drivers answered the motion. The incident was assigned for hearing to Judge Antonio M. Martinez of the Court of First Instance of Davao. Judge Martinez found that the plowing was made at the instance of Garcia who told the barrio captain, petitioner Lausan Ayog, a Bagobo, that he (Garcia) could not wait anymore for the termination of this case. The record shows that on April 30, 1979 or four months after the said incident, Emberador, in consideration of P3,500, as the value of the improvements on his land, executed a quitclaim in favor of the Crown Fruits and Cannery Corporation (Exh. 1, 2 and 3). We hold that no contempt was committed. The temporary restraining order was not directed to Biñan Development Co., Inc. its officers, agents or privies. Emberador was not named specifically in the trial court's judgment as one of the occupants to be ejected. For the redress of whatever wrong or delict was committed against Emberador by reason of the destruction of his improvements, his remedy is not in a contempt proceeding but in some appropriate civil and criminal actions against the destroyer of the improvements. In resume, we find that there is no merit in the instant prohibition action. The constitutional prohibition relied upon by the petitioners as a ground to stop the execution of the judgment in the ejectment suit has no retroactive application to that case and does not divest the trial court of jurisdiction to enforce that judgment. WHEREFORE, the petition is dismissed for lack of merit but with the clarification that the said judgment cannot be enforced against those petitioners herein who were not defendants in the ejectment case, Civil Case No. 3711, and over whom the lower court did not acquire jurisdiction. The contempt proceeding is also dismissed. No costs. SO ORDERED. Concepcion, Jr., Guerrero, Abad Santos, Relova and Gutierrez, Jr., JJ., concur. Escolin, J., took no part.

ejectment cage may not be enforced against the petitioners who were not defendants in Civil Case No. 3711 and over whom the lower court did not acquire jurisdiction. Separate Opinions

VASQUEZ, J., concurring: I concur with the very ably written main opinion. However, I wish to erase any possible erroneous impression that may be derived from the dispositive portion insofar as it declares that the judgment in the ejectment cage may not be enforced against the petitioners who were not defendants in Civil Case No. 3711 and over whom the lower court did not acquire jurisdiction. The judgment in any case is binding and enforceable not only against the parties thereto but also against "their successors in interest by title subsequent to the commencement of the action" (Sec. 49[b], Rule 39, Rules of Court). We have previously held that the judgment in an ejectment case may be enforced not only against the defendants therein but also against the members of their family, their relatives or privies who derive their right of possession from the defendants (Ariem vs. Delos Angeles, 49 SCRA 343). A further clarification of the dispositive portion is apparently needed to exclude from the effect of the judgment in the ejectment case only the petitioners who do not derive their right of possession from any of the defendants in the ejectment suit.

Fernando, C.J., Teehankee, Melencio-Herrera, Plana, Makasiar and De Castro, JJ., concurs.

Separate Opinions VASQUEZ, J., concurring: I concur with the very ably written main opinion. However, I wish to erase any possible erroneous impression that may be derived from the dispositive portion insofar as it declares that the judgment in the

The judgment in any case is binding and enforceable not only against the parties thereto but also against "their successors in interest by title subsequent to the commencement of the action" (Sec. 49[b], Rule 39, Rules of Court). We have previously held that the judgment in an ejectment case may be enforced not only against the defendants therein but also against the members of their family, their relatives or privies who derive their right of possession from the defendants (Ariem vs. Delos Angeles, 49 SCRA 343). A further clarification of the dispositive portion is apparently needed to exclude from the effect of the judgment in the ejectment case only the petitioners who do not derive their right of possession from any of the defendants in the ejectment suit. Fernando, C.J., Teehankee, Melencio-Herrera, Plana, Makasiar and De Castro, JJ., concurs. Footnotes * According to respondent corporation, some of the adverse claimants or protestants were not landless farmers but were well-educated persons belonging to the middle class. Thus, Elpidio Okay was an elementary school principal. Vicente Rehoy was a landowner and barrio captain. Patricio de Leon was a cashier and later assistant branch manager of the Philippine National Baank. Ernesto Pañares was a high school teacher and later a college professor. Francisco Mateo was a former college dean (p. 105, Rollo). According to the 44 petitioners, they are tillers of the soil (p. 126, Rollo).

AYOG VS CUSI

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-27059

February 14, 1928

BUENAVENTURA BALBOA, plaintiff-appellant, vs. CECILIO L. FARRALES, defendant-appellant. Ernesto Zaragoza for plaintiff-appellant. Alejo Labrador for defendant-appellant. JOHNSON, J.: The material facts in this case, as disclosed by the record, may be briefly stated as follows. (1) Sometime in the year 1913, the plaintiff Buenaventura Balboa filled with the Bureau of Lands an application for homestead, No. 10619, under the provisions of Act No. 926, covering a tract of land situated in the barrio of Culis, municipality of Hermosa, Province of Bataan, containing 14 hectares, 49 ares and 77 centares. (2) Five years thereafter, or in 1918, Balboa submitted proof, showing his residence upon, and cultivation of said land, as well as his compliance with all of the other requirements of section 3 of said Act No. 926, which final proof was approved by the Director of Lands on February 15, 1918 (Exhibit 3). On July 1, 1919, said Act No. 926 was repealed by Act No. 2874. (3) On September 10, 1920, or over a year after Act No. 2874 had gone into effect, the homestead patent for said land, otherwise known as certificate of title No. 91 (Exhibit A) was issued n favor of Buenventura Balboa by the Governor-General of the Philippine Islands. (4) On August 11, 1924, said Buenaventura Balboa, for and in consideration of the sum of P950, sold said land to the defendant Cecilio L. Farrales (Exhibit 2); and on October 16, 1924, the latter secured in his name transfer certificate of title No. 650 of said land (Exhibit B). On March 6, 1926, the plaintiff commenced the present action for the purpose of having said sale declared null and void on the ground of lack of consent on his part and fraud on the part of the defendant, and on the

further ground that said sale was contrary to, and in violation of the provisions of section 116 of Act No. 2874. After a careful consideration of the evidence adduced during the trial of the cause the Honorable Leopoldo Rovira, judge, arrived at the conclusion that the deed of sale in question (Exhibit 2) had been duly executed by the plaintiff. He held, however, that said deed was null and void, in view of the fact that it was executed before the lapse of five years from the date of the issuance of the certificate of title in favor of Buenventura Balboa, in violation of the prohibition contained in section 116 of Act No. 2874. The pertinent parts of the decision read as follows: Como cuestion basica, se discute en el presente asunto la validez del documento Exhibit 2, o sea el traspaso hecho por el demandante al demandado referente al terreno en cuestion. El demandante sostiene que, bajo el articulo 116 de la Ley 2874, el traspaso el nulo por cuanto tuvo lugar el 11 de agosto de 1924, esto es sin haber transcurrido todavia los cinco anos siguientas a la fecha en que fue expedidol el certificado de titulo No. 91 que lo fue el 10 de septiembre de 1920; el demandado, por el contrario, sostiene, como punto de discusion legal, que el documento de traspaso exhibit 2 no cae bajo las disposiciones de la Ley No. 2874, sino dentro de las disposiciones de la Ley No. 926 y que bajo esta Ley no existia tal limitacion de venta dentro de los cinco años siguientes a la fecha de la expedicion del titulo de homestead, y que habiendo sido la solicitud de homestead aprobada 15 de febrero de 1918, aun contado los cinco anos siguientes, resultaria que desde el 15 de febrero de 1918 hasta el 11 de agosto de 1924 han transcurrido mas de cinco años. xxx

xxx

xxx

De lo expuesto, el Juzgado Ilega a la conclusion de que el Exhibit 2 es nulo e ineficaz, por cuanto que la venta fue otorgada fuera de lo prescrito en el articulo 116 de la Ley No. 2874, que procede declarar nulo dicho documento Exhibit 21, y, consiguintemente, el certificado de transferencia de titulo 650. In accordance with the foregoing conclusion the trial judge rendered a judgment in favor of the plaintiff and against the defendant, ordering the latter to return to the plaintiff the land in question, and the plaintiff to return to the defendant the price received for said land, aggregating P652.69, with interest at the rate of 12 per cent. From the judgment both parties appealed.

The principal question raised in this appeal is whether the validity of the sale of the land in question should be determined under the provisions of Act No. 926 or under those of Act No. 2874. In other words, which of the two Acts — 926 and 2874 — shall be applied in determining whether the sale in question is valid or not? The land in question was acquired by Buenventura Balboa as homestead under the provisions and pursuant to the requirements of Act No. 926. He filed his application and complied with all of the requisites to the acquisition of said homestead, in conformity with the provisions of said Act No. 926. In 1918 and prior to the repeal of said Act he submitted his final proof, showing his residence upon, and cultivation of the land, as well as his compliance with all of the other requirements of the law, and said final proof was approved by the Director of Lands on February 15, 1918. In other words, Buenaventura Balboa, had shown, to the satisfaction of the Government, that he had performed all of the acts required of an applicant for homestead, and, under the provisions of section 3 of Act no. 926, he became entitled to a homestead patent or certificate of title to the land covered by his application. Section 3 of Act No. 926 provides, inter alia, that upon the filing of final proof by the applicant and the approval thereof by the Director of Lands, "he (the applicant) shall be entitled to a patent" or certificate of title. Therefore, on February 15, 1918, after Buenaventura Balboa had submitted his final proof and after the same had been approved by the Government, and while Act No. 926 was still in force, he became the owner of the land and "entitled to a patent." At least on that date his right to the land, as owner, ripened into a vested right. It was no longer expectant as depending on the continuance of existing circumstances, or contingent as depending on some events or the performance of some conditions. Rights are vested when the right to enjoyment, present or prospective, has become the property of some particular person or persons as a present interest. (12 C. J., sec. 485, p. 955.) Vested right "is some right or interest in property which has become fixed and established and is no longer open to doubt or controversy." (Downs vs. Blount, 170 Fed. Rep., 15, 20.) The fact the homestead patent or certificate of title No. 91 was issued on September 10, 1920, after the repeal of Act No. 926, and under the provisions of section 116 of the repealing Act No. 2874, cannot prejudice the vested right acquired by Buenventura Balboa under the provisions of the former Act. The issuance of the certificate of title was a mere ministerial act, and the certificate, an outward symbol of his vested right

to the land, of which he was virtually recognized as owner by the Government on February 15, 1918. In the case of United States vs. Freyberg (32 Fed. Rep., 195), where the right of a homesteader was involved, it was held that where the right to a patent for land has become vested in a purchaser the Government holds the legal title in trust for the purchaser until the patent is issued. Again in the case of Stark vs. Starr (6 Wallace [U. S.], 402), the Supreme Court of the United States held that where the right to a patent is once vested, it is treated by the Government, when dealing with public lands, as equivalent to a patent issued. A party who was has complied with all the terms and conditions which entitle him to a patent for a particular tract of public land acquires a vested interest therein, and is to be regarded as the equitable owner thereof. (Wirth vs. Branson, 98 U. S. 118.) Where the right to a patent has once become vested in a purchaser of public lands, it is equivalent so far as the Government is concerned, to a patent actually issued. The execution and delivery of the patent after the right to it has become complete are the mere ministerial acts of the officers charged with that duty. (Simmons vs. Wagner 101 U. S., 260.) The moment the plaintiff had received a certificate from the Government and had done all that was necessary under the law to secure his patent, his right had become vested before the patent was issued. His right had already vested prior to the issuance of the patent, and his rights to the land cannot be affected by a subsequent law or by a subsequent grant by the Government to any other person. (Herron vs. Dater, 120 U. S., 464.) The delay in the issuance of the patent cannot affect the vested right of the homesteader. (Murphy vs. Packer, 152 U. S., 398; Belk vs. Meagher, 104 U. S., 279; Sullivan vs. Iron Silver Mining Co., 143 U. S., 431; McDaniel vs. Apacible and Cuisia, 42 Phil., 749.) A perfected valid appropriation of public land operates as a withdraw of the tract from the body of the public domain and, so long as such appropriation remains valid and subsisting the land covered thereby is deemed private property. A perfected homestead, under the law, is property in the highest sense, which may be sold and conveyed and will pass by descent. It has the effect of a grant of the right to present and exclusive possession of said land. A valid and subsisting perfected homestead, made and kept up in accordance with the provisions of the statute, has the effect of a grant of the present and exclusive possession of the land. Even without a patent, a perfected homestead is a property

right in the fullest sense, unaffected by the fact that the paramount title to the land is in the Government. Such land may be conveyed or inherited. In the United States and in each and every State of the Union vested rights are safeguarded by the 4th Amendment to the Federal Constitution, which provides that no State "shall deprive any person of life, liberty or property without due process of law." The state has no power to divest or to impair vested rights, whether such an attempt to do so be made by legislative enactment, by municipal ordinance, or by a change in the constitution of the estate. This result follows from prohibitions contained in the constitution or particularly all the states. Before the adoption of the fourteenth amendment there was no prohibition in the Constitution of the United States which would prevent the states from passing laws divesting vested rights, unless these laws also impaired the obligation of contact, or were ex post facto laws; but vested property rights are now protected against state action by the provision of the fourteenth amendment that no state "shall deprive any person of life, liberty or property without due process of law." (12 C. J., sec. 486, pp. 956, 957.)

certificate of title upon which rests the decision of the court a quo, cannot be invoked to annul the sale in question. Said prohibition, if applied in the present case, would impair and diminish the vested rights acquired under Act No. 926, contrary to the uniform doctrine followed in the United States, and in violation of the express provisions of section 3 of the Jones Law. The right, title and interest of the appellant having become vested under the provisions of Act No. 926, his rights cannot be affected by any law passed subsequent thereto. The provisions of Act No. 2874 cannot be invoked for the purpose of defeating the vested right acquired by the appellant before its adoption. For all of the foregoing reasons, the judgment appealed from should be and is hereby reversed, and it is hereby ordered and decreed that the defendant be absolved from all liability under the complaint, with costs against the plaintiff-appellant. So ordered. Malcolm, Villamor, Ostrand and Villa-Real, JJ., concur.

Section 3, paragragh 1, of the Jones Law provides: "That no law shall be enacted in said Islands which shall deprive any person of life, liberty, or property without due process of law, etc." Thus, in this jurisdiction, vested rights are also protected from impairment by express constitutional provision. Therefore, the right vested in Buenaventura Balboa by Act No. 926 cannot be divested, impaired or restricted by section 116 of Act No. 2874. Said right should be governed entirely and exclusively by the provisions of Act No. 926, which it was acquired. Now, the vested right of Buenaventura Balboa to his homestead land necessarily carries with it the right to alienate and dispose of the same. The only prohibition contained in Act No. 926 against alienation of homestead acquired under said law, appears in section 4 thereof, which reads as follows: "No lands acquired under the provisions of this chapter shall in any event become liable to the satisfaction of any debt contracted prior to the issuance of a patent therefor." It follows, therefore that the sale of the land in question by the plaintiff Buenventura Balboa to the defendant Cecilio L. Farrales does not infringe said prohibition, and consequently said sale is valid and binding, and should be given full force and effect. Section 116 of Act No. 2874, which prohibits the sale of homestead land during the period of five years subsequent to the issuance of the patent or

Separate Opinions STREET, J., concurring: I concur and wish to point out the difference between the present case and that of Beach vs. Pacific Commercial Co. and Sheriff of Nueva Ecija (49 Phil., 365), which turned upon the interpretation of the same provisions of law as those that are decisive of the present case, namely, section 4 of Act No. 926 and section 116 of Act No. 2874. The difference is that in the Beach case an attempt was made to seize the property under process of law to satisfy an obligation created within five years after the issuance of a patent; and we held that, under section 116 of Act No. 2874, the property was attempt. In the case before us the owner of the land, in the exercise of his power as such, had voluntarily alienated the property; and the court now holds that the act of alienation was effective notwithstanding the immunity conferred by section 116 of Act No. 2874. Though the distinction thus involved may appear to be somewhat refined, I believe it to be sound, and I have no hesitation in giving my adherence to the present decision, especially in view of the fact hat soon after Act No. 2874 was passed the Attorney-General ruled that a voluntary alienation of a homestead, under the conditions involved in this case, would be valid. A ruling contrary to that now made by us would have

the been acquired in good faith by purchasers relying upon the interpretation thus placed upon the law by the Attorney-General. In the opinion in Beach vs. Pacific Commercial Co. and Sheriff of Nueva Ecija, supra, we used the following language in calling attention to the difference between the situation then before and the court and that presented in the case now before us: The error underlying the contention of the appellee possibly has its origin in a failure to distinguish between two entirely different ideas expressed in section 116 of Act No. 2874. The first has reference to the power of the homesteader to encumber or alienate to the homestead by his voluntary act, while the second has reference to the subjection of the property to the satisfaction of debts against the will of the homesteader. There might possibly be something in the contention of the appellee that the homesteader's right became vested when he submitted his final proof if the case were one where he had attempted to alienate the property by voluntary exercise of the power of an owner; but we are not called upon to pass upon this point. We are here concerned exclusively with power of the creditor to seize the property of the owner against his will. That the property cannot be so taken follows in our opinion necessarily from the language of section 116. Our present decision recognizes the validity of this distinction suggested in the paragraph above quoted, and it with thus be seen that there is no inconsistency between the decision now made and the conclusion reached in the case cited.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-14722

May 25, 1960

IGNACIO MESINA, plaintiff-appellant, vs. EULALIA PINEDA VDA. DE SONZA, ET AL., defendants. EULALIA PINEDA VDA. DE SONZA, defendant-appellee. Agustin C. Bagasao for appellant. Luis Manalang and Associates for appellee. BAUTISTA ANGELO, J.: Plaintiff brought this action before the Court of First Instance of Nueva Ecija praying that Original Certificate of Title No. P-1137 of the Register of Deeds of Nueva Ecija be ordered cancelled and that the registration case pending before the same court covering the property described therein be given due course and that defendants be ordered to pay plaintiff P1,000.00 as attorney's fees and costs. Defendants filed a motion to dismiss on the ground that plaintiff's action is already barred by the statute of limitations. The reasons advanced are: the complaint was filed on March 25, 1958. The decree of registration or issuance of patent over the property was issued "sometime on September 12, 1953 or thereabout", while the transfer certificate of title covering the same was issued on September 16, 1953. The present action which calls for the cancellation of said decree and title has, therefore, been filed after the elapse of more than four years, which cannot be done, because the title has already become indefeasible and incontrovertible. The court sustained this motion and dismissed the complaint. Hence the present appeal. Plaintiff claims that he is the owner in fee simple of Lot No. 3259, with improvements thereon, situated in San Antonio, Nueva Ecija; that he has been in actual possession thereof since 1914, publicly, openly, peacefully and against the whole world and up to the present time he is the only one who benefits from the produce thereof; that said lot is at present the subject of registration proceedings pending in the same court known as Registration Case No. N-372, L.R.C. Cad. Record No. N-12238; that sometime in September 12, 1953, the Director of Lands, without exercising due care, and in spite of his knowledge that defendants had not complied with the knowledge that defendants had not complied with the

requirements of Commonwealth Act No. 141, issued a homestead patent in their favor as a consequence of which a certificate of title was issued in their name by the register of deeds; that said title was procured by defendants through frauds, deception and misrepresentation since they knew that the lot belonged to the plaintiff; and that the Director of Lands has no authority nor jurisdiction to issue a patent covering said land because it is a private property of plaintiff. For these reasons, plaintiff prays that said decree and title be cancelled. Republic Act No. 1942, which took effect on June 22, 1957 (amending Section 48-b of Commonwealth Act 141), provides: (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 preceeding 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. In the case of Susi vs. Razon, et al., 48 Phil., 424, it was observed that where all the necessary requirements for a grant by the Government are complied with through actual physical possession openly, continuously, and publicly, with a right to a certificate of title to said land under the provisions of Chapter VIII of Act No. 2874, amending Act No. 926 (carried over as Chapter VIII of Commonwealth Act No. 141), the possessor is deemed to have already acquired by operation of law not only a right to a grant, but a grant of the Government, for it is not necessary that a certificate of title be issued in order that said grant may be sanctioned by the court — an application therefor being sufficient under the provisions of Section 47 of Act No. 2874 (reproduced as Section 50, Commonwealth Act No. 141). Thus, the following is what this Court said on the matter: It clearly appears from the evidence that Valentin Susi has been in possession of the land in question openly, continuously, adversely and publicly, personally and through his predecessors, since the year 1880, that is, for about forty-five years. ... When on August 15, 1914, Angela Razon applied for the purchase of said land, Valentin Susi had already been in possession thereof personally and through his predecessors for thirty-forty years. And if it is taken into account that Nemesio Pinlac had already made said land a fish pond when he sold it on December 13, 1880, it can hardly be estimated when he began to possess and occupy it, the period of time being so long that it is beyond the reach of memory. ... In favor of Valentin Susi, there is, moreover the presumption juris et

de jure established paragraph (b) of section 45 of Act No. 2874, amending Act No. 926, that all the necessary requirements for a grant by the Government were complied with, for he has been in actual and physical possession, personally and through his predecessors, of an agricultural land of the public domain openly, continuously, exclusively and publicly since July 26, 1894, with a right to a certificate of title to said land under the provisions of Chapter VIII of said Act. So that when Angela Razon applied for the grant in her favor, Valentin Susi had already acquired, by operation of law, not only a right to grant, but a grant of the Government, for it is not necessary that certificate of title should be issued in order that said grant may be sanctioned by the courts, an application therefor is sufficient, under the provisions of section 47 of Act No. 2874. If by a legal fiction, Valentin Susi had acquired the land in question by a grant of the State, it had already ceased to be of the public domain and had become private property, at least by presumption, of Valentin Susi, beyond the control, of the Director of Lands. Consequently, in selling the land in question to Angela Razon, the Director of Lands disposed of a land over which he had no longer any title or control, and the sale thus made was void and of no effect, and Angela Razon did not thereby acquire any right. (Emphasis supplied) Such is the situation in which the plaintiff claims to be in his complaint. He alleges that he is the owner in fee simple of the lot in question, with the improvements thereon, situated in San Antonio, Nueva Ecija, and that he has been in actual possession thereof since 1914, publicly, openly, peacefully and against the whole world, and that up to the present time he is the only one who benefits from the produce thereof. He further claims that said lot is present the subject of a registration proceeding pending in the same court, known as Registration Case No. N-372, L.R.C. Cad. Record No. N-12238. If by legal fiction, as stated in the Susi case, plaintiff is deemed to have acquired the lot by a grant of the State, it follows that the same had ceased to be part of the public domain and had become private property and, therefore, is beyond the control of the Director of Lands. Consequently, the homestead patent and the original certificate of title covering said lot issued by the Director of Lands in favor of the defendants can be said to be null and void, for having been issued through fraud, deceit and misrepresentation. Considering that this case was dismissed by the trial court merely on a motion to dismiss on the ground that plaintiff's action is already barred by the statute of limitations, which apparently is predicated on the theory that a decree of registration can no longer be impugned on the ground of fraud one year after the issuance and entry of the decree,1 which theory does not apply here because the property involved is allegedly private in nature and has ceased to be part of the public domain, we are of the opinion that the trial court erred in dismissing the case outright without

giving plaintiff a chance to prove his claim. It would have been more proper for the court to deny the motion on the ground that its object does not appear to be indubitable, rather than to have dismissed it, as was done by the trial court. Wherefore, the order appealed from is set aside. The case is remanded to the trial court for further proceedings. No costs.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-19535

July 10, 1967

HEIRS OF PELAGIO ZARA; PIO, CLEMENTE, SERAFIA, PORFIRIO and ESTEBAN, all surnamed MINDANAO; MARIA and GLICERIA, both surnamed SEDARIA; DULCE CORDERO, VICTORIA DE LOS REYES and JOSE GARCIA, applicants-appellants, vs. DIRECTOR OF LANDS, DIRECTOR OF FORESTRY, Government oppositor-appellees. VICENTE V. DE VILLA, JR., and VICENTE S. DE VILLA, SR., private oppositors-appellees. Jose L. Matias and H. A. Jambora for applicants-appellants. Francisco Villanueva, Jr. and Gregorio L. Oquitania for private oppositorsappellees. Manuel Reyes Castro for oppositor-appellee Director of Forestry. MAKALINTAL, J.: Appeal from an order of the Court of First Instance of Batangas (Lipa City) dismissing appellants' "application for registration of the parcel of land consisting of 107 hectares, more or less, situated in the barrio of Sampiro, Municipality of San Juan, Province of Batangas, and designated in amended plan PSU-103696 as Lot A." The proceedings in the court a quo are not disputed. On August 4, 1960 appellants filed an application for registration of the land above described pursuant to the provisions of Act 496. They alleged that the land had been inherited by them from their grandfather, Pelagio Zara, who in turn acquired the same under a Spanish grant known as "Composicion de Terrenos Realengos" issued in 1888. Alternatively, should the provisions of the Land Registration Act be not applicable, applicants invoke the benefits of the provisions of Chapter VIII, Section 48, subsection (b) of C.A. 141 as amended, on the ground that they and their predecessor-in-interest had been in continuous and adverse possession of the land in concept of owner for more than 30 years immediately preceding the application.

Oppositions were filed by the Director of Lands, the Director of Forestry and by Vicente V. de Villa, Jr. The latter's opposition recites: x x x that the parcel of land sought to be registered by the applicants consisting of 107 hectares, more or less, was included in the area of the parcel of land applied for registration by Vicente S. de Villa, Sr. in Civil Case No. 26, L.R. Case No. 601 in this Court, which was decided by this same Court through the then incumbent Judge, the Honorable Juan P. Enriquez, on September 30, 1949; that the parcel sought to be registered by the applicants was declared public land in said decision; that they (the oppositors Vicente V. de Villa, Jr. and Vicente S. de Villa, Sr.) have an interest over the land in question because for a period more than sixty (60) years, the de Villas have been in possession, and which possession, according to them, was open continuous, notorious and under the claim of ownership; that the proceeding being in rem, the failure of the applicants to appear at the case No. 26, L.R. Case No. 601 to prove their imperfect and incomplete title over the property, barred them from raising the same issue in another case; and that as far as the decision in Civil Case No. 26, L.R. Case No. 601 which was affirmed in the appellate court in CAG.R. No. 5847-R is concerned, there is already "res-adjudicata" — in other words, the cause of action of the applicant is now barred by prior judgment; and that this Court has no more jurisdiction over the subject matter, the decision of the Court in said case having transferred to the Director of Lands. On November 15, 1960 the De Villas (De Villa, Sr. was subsequently included as oppositor) filed a motion to dismiss, invoking the same grounds alleged in its opposition, but principally the fact that the land applied for had already been declared public land by the judgment in the former registration case. The trial court, over the objection of the applicants, granted the motion to dismiss by order dated January 27, 1961, holding, inter alia, that "once a parcel of land is declared or adjudged public land by the court having jurisdiction x x x it cannot be the subject anymore of another land registration proceeding x x x (that) it is only the Director of Lands who can dispose of the same by sale, by lease, by free patent or by homestead." In the present appeal from the order of dismissal neither the Director of Lands nor the Director of Forestry filed a brief as appellee. The decisive issue posed by applicants-appellants is whether the 1949 judgment in the previous case, denying the application of Vicente S. de Villa, Sr., and declaring the 107 hectares in question to be public land, precludes a subsequent application by an alleged possessor for judicial confirmation of title on the basis of continuous possession for at least thirty years,

pursuant to Section 48, subsection (b) of the Public Land Law, C.A. 141, as amended. This provision reads as follows: The following-described citizens of the Philippines, occupying lands of the public domain or claiming to own any such lands or an interest therein, but whose titles have not been perfected or completed, may apply to the Court of First Instance of the province where the land is located for confirmation of their claims and the issuance of a certificate of title therefor, under the Land Registration Act, to wit: xxx

xxx

xxx

(b) Those who by themselves or through their predecessors in interest have been in open, continuous, exclusive and notorious possession and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition 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.1äwphï1.ñët The right to file an application under the foregoing provision has been extended by Republic Act No. 2061 to December 31, 1968. It should be noted that appellants' application is in the alternative: for registration of their title of ownership under Act 496 or for judicial confirmation of their "imperfect" title or claim based on adverse and continuous possession for at least thirty years. It may be that although they were not actual parties in that previous case the judgment therein is a bar to their claim as owners under the first alternative, since the proceeding was in rem, of which they and their predecessor had constructive notice by publication. Even so this is a defense that properly pertains to the Government, in view of the fact that the judgment declared the land in question to be public land. In any case, appellants' imperfect possessory title was not disturbed or foreclosed by such declaration, for precisely the proceeding contemplated in the aforecited provision of Commonwealth Act 141 presupposes that the land is public. The basis of the decree of judicial confirmation authorized therein is not that the land is already privately owned and hence no longer part of the public domain, but rather that by reason of the claimant's possession for thirty years he is conclusively presumed to have performed all the conditions essential to a Government grant.

On the question of whether or not the private oppositors-appellees have the necessary personality to file an opposition, we find in their favor, considering that they also claim to be in possession of the land, and have furthermore applied for its purchase from the Bureau of Lands.1äwphï1.ñët Wherefore, the order appealed from is set aside and the case is remanded to the Court a quo for trial and judgment on the merits, with costs against the private oppositors-appellees.