Director of Lands v. Intermediate Appellate Court
REITERATIONFacts
The Antecedents: Acme Plywood & Veneer Co., Inc. (Acme) purchased five parcels of land from Mariano and Acer Infiel, members of the Dumagat tribe, who claimed ancestral possession dating back to time immemorial. The sale occurred on October 29, 1962. Procedural History: Acme filed a petition for confirmation of title under Section 48 of Commonwealth Act No. 141 (The Public Land Act) with the Court of First Instance of Isabela. The trial court found that Acme was a duly organized corporation, capable of acquiring real property, that the lands were ancestrally acquired by the Infiels, who possessed them since time immemorial, and that Acme's possession, tacking that of the Infiels, was continuous, adverse, and public since 1962. The court also found the lands to be private pursuant to R.A. 3872, that Acme had introduced substantial improvements, and that the government recognized Acme's ownership by donating a portion for a townsite. The Court of First Instance ordered the registration of the lands in favor of Acme. The Intermediate Appellate Court affirmed this decision. The Petition: The Director of Lands appealed by certiorari, arguing that the 1973 Constitution, not the 1935 Constitution, was applicable since the registration proceedings were commenced in 1981. He contended that Section 11 of Article XIV of the 1973 Constitution prohibits private corporations from holding alienable lands of the public domain, except by lease, and that Acme, as a corporation, was therefore disqualified.
Issue(s)
Whether the 1973 Constitution's prohibition on private corporations holding alienable lands of the public domain applies to registration proceedings commenced in 1981, given the land was acquired in 1962 under the 1935 Constitution; and whether the character of the land at the time of registration proceedings is the crucial factor. Whether the lands in question were already private property by operation of law at the time of their acquisition by Acme in 1962, thereby rendering the constitutional prohibition inapplicable; and whether Acme's acquisition was valid under the 1935 Constitution, considering the absence of a prohibition against corporations acquiring interests in public land with imperfect titles.
Ruling
The Supreme Court affirmed the decision of the Intermediate Appellate Court, ordering the registration of the lands in favor of Acme Plywood & Veneer Co., Inc. The Court held that the lands were already private property by operation of law at the time of their acquisition by Acme in 1962, and thus the constitutional prohibition under the 1973 Constitution was not applicable.
Ratio Decidendi
On the applicability of the 1973 Constitution and the character of the land: The Court held that the crucial factor is the character of the land at the time of the institution of the registration proceedings. If the lands were already private, the constitutional prohibition against corporations holding public lands would not apply. The Court reaffirmed the doctrine established in Carino, Susi, and subsequent cases, which holds that open, continuous, exclusive, and notorious possession of alienable public land for the statutory period (30 years under the Public Land Act) converts such land into private property ipso jure, without the need for judicial confirmation. Therefore, by October 29, 1962, when Acme acquired the lands from the Infiels, the lands were already considered private property due to the immemorial possession of the Infiels and their predecessors. The subsequent enactment of the 1973 Constitution could not impair this vested right. The Court explicitly stated that the constitutional prohibition has no retroactive application to sales applications where a vested right had already been acquired before the 1973 Constitution took effect. On the lands being private property and the validity of Acme's acquisition: The Court found that the lands were already private property by operation of law at the time of acquisition, thus segregating them from the public domain. The Court emphasized that vested rights are protected by the due process clause and cannot be abrogated by a new constitution. The Court also noted that even if the land were still technically considered "public" land until title confirmation, Acme's acquisition in 1962 was valid under the 1935 Constitution, which had no prohibition against corporations acquiring interests in public land with imperfect titles, provided the 1,024-hectare limit was not exceeded. The accidental circumstance of the confirmation proceedings being filed under the 1973 Constitution could not defeat the vested right acquired earlier. The Court explicitly reconsidered and set aside the majority ruling in Manila Electric Company vs. Castro-Bartolome (Meralco) which held a contrary view on the applicability of the constitutional prohibition in similar circumstances. The Court found that the Meralco ruling decided no constitutional question and was essentially obiter regarding the constitutional prohibition. The Court concluded that the lands were private property when acquired by Acme, and Acme had a registrable title, as there was no prohibition against a corporation owning private land. The objection that Acme, as a juridical person, was disqualified from applying for confirmation under Section 48(b) of the Public Land Act was deemed technical and not substantial, as the substantive right to the land had already vested.
Main Doctrine
Alienable public land held by a possessor, personally or through 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, and the subsequent enactment of a constitution prohibiting corporations from owning such lands does not impair this vested right.