Primary Holding

The Supreme Court held that the land acquired by Acme Plywood from the Infiels in 1962 was already private land by operation of law due to the Infiels' immemorial possession, and thus Acme Plywood, as a successor-in-interest, had a registrable title despite being a corporation and despite the 1973 Constitution’s restrictions, because the right vested prior to the 1973 Constitution.

Background

Acme Plywood & Veneer Co., Inc. sought to register five parcels of land acquired from Mariano and Acer Infiel, members of the Dumagat tribe, through land registration proceedings under Section 48 of the Public Land Act. The Director of Lands opposed the registration, arguing that because the proceedings started after the 1973 Constitution came into effect, the corporation was disqualified from owning public land according to the new constitution.

Facts

• 1. Acme Plywood & Veneer Co., Inc. is a duly organized corporation registered with SEC in 1959.
• 2. Acme Plywood purchased five parcels of land on October 29, 1962, from Mariano and Acer Infiel, members of the Dumagat tribe.
• 3. The Infiels and their ancestors had possessed and occupied the land since time immemorial.
• 4. Acme Plywood has been in continuous, adverse, and public possession since 1962.
• 5. Acme Plywood introduced significant improvements worth P45,000,000.00.
• 6. The Municipal Officials of Maconacon, Isabela recognized Acme Plywood's ownership and negotiated for a townsite donation from the company.
• 7. Registration proceedings were initiated by Acme Plywood on July 17, 1981.

Arguments of the Petitioners

• 1. The 1973 Constitution, which prohibits corporations from holding alienable public lands except by lease, should apply because the registration proceedings commenced in 1981, after its effectivity.
• 2. Section 11 of Article XIV of the 1973 Constitution is the applicable law, superseding the 1935 Constitution which was in force when Acme Plywood acquired the land in 1962.
• 3. Granting registration to Acme Plywood would be erroneous under the 1973 Constitution.

Arguments of the Respondents

• 1. The land was already private land at the time of acquisition in 1962 due to the Infiels' immemorial possession and operation of law under the Public Land Act.
• 2. The 1935 Constitution, which was in effect in 1962, did not prohibit corporations from acquiring private lands, nor did it absolutely prohibit corporations from acquiring public agricultural lands (allowing acquisition up to 1,024 hectares).
• 3. The right to acquire and register the land vested in Acme Plywood in 1962, prior to the 1973 Constitution, and cannot be impaired retroactively.
• 4. Applying the 1973 Constitution would violate the doctrine of vested rights.

Issues

• 1. Whether the 1973 Constitution, specifically Article XIV, Section 11, prohibiting corporate ownership of alienable public lands, applies to Acme Plywood's application for land registration initiated in 1981, for land acquired in 1962.
• 2. Whether the land acquired by Acme Plywood was still public land at the commencement of registration proceedings in 1981, or had already become private land by operation of law due to immemorial possession by the Infiels.
• 3. Whether Acme Plywood, as a corporation, is qualified to apply for judicial confirmation of title under Section 48(b) of the Public Land Act, which seemingly refers to “citizens of the Philippines”.

Ruling

• 1. The Supreme Court ruled in favor of Acme Plywood.
• 2. The Court held that the land was already private land at the time Acme Plywood acquired it in 1962 because of the Infiels' immemorial possession, which under established jurisprudence and the Public Land Act, converted the land to private property ipso jure.
• 3. The Court emphasized that possession for the statutory period operates as a grant from the government, and the land ceases to be public land even before formal confirmation.
• 4. The prohibition in the 1973 Constitution against corporate land ownership of public domain cannot retroactively divest rights already vested under the prior constitution and existing laws.
• 5. The technicality of Acme Plywood, as a corporation, applying for registration is secondary to the substantive right already acquired. The Court favored a liberal interpretation of the procedural rules to serve the ends of justice, consistent with the spirit of the Public Land Act to confirm and quiet titles.
• 6. The Meralco ruling was reconsidered and deemed not binding precedent.

Doctrines

• 1. Doctrine of Vested Rights: Rights that have become fixed and established are protected and cannot be impaired by subsequent legislation or constitutional changes. In this case, Acme Plywood's right to the land vested under the 1935 Constitution and prior to the 1973 Constitution.
• 2. Ipso Jure Conversion of Public Land to Private Land: Open, continuous, exclusive, and notorious possession of alienable public land for the statutory period (30 years under the Public Land Act) by individuals or their predecessors-in-interest automatically converts the land into private property by operation of law, without the need for a certificate of title.
• 3. Conclusive Presumption of Government Grant: Possession under the conditions set forth in Section 48(b) of the Public Land Act creates a conclusive presumption that all conditions for a government grant have been fulfilled.

Key Excerpts

• 1. "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."
• 2. "That Vested right has to be respected. It could not be abrogated by the new Constitution..."
• 3. "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..."

Precedents Cited

• 1. Carino v. Insular Government: Established the principle that long-term possession of land, even without formal title, could create a right of ownership against the government, predating formal registration processes. Used to support the idea that ownership can arise from possession, not just formal grants.
• 2. Susi v. Razon: Affirmed the doctrine that open, continuous, and exclusive possession for the prescribed period creates a presumption juris et de jure of a government grant, and the land becomes private property by operation of law. Used to reinforce the ipso jure conversion doctrine.
• 3. Herico v. Dar: Reaffirmed the Susi doctrine and emphasized that application for confirmation is a mere formality, and title vests by operation of law upon completion of the required possession period. Used to show consistent application of the doctrine.
• 4. Manila Electric Company vs. Castro-Bartolome (Meralco): This case was expressly reconsidered and overruled. The Court reversed its previous majority ruling in Meralco, which had denied registration to a corporation, thus weakening its precedent value in similar cases.
• 5. Ayog vs. Cusi, Jr.: Cited to support the principle against retroactive application of the constitutional prohibition to vested rights.

Statutory and Constitutional Provisions

• 1. Section 48 of Commonwealth Act No. 141 (The Public Land Act): The primary statutory basis for confirmation of imperfect titles, particularly paragraph (b) concerning thirty-year possession and paragraph (c) concerning national cultural minorities.
• 2. Article XIV, Section 11 of the 1973 Constitution: The provision prohibiting private corporations from holding alienable lands of the public domain except by lease. This was central to the Director of Lands' argument but was ultimately held inapplicable retroactively to vested rights.
• 3. Section 2, Article XIII of the 1935 Constitution: Mentioned in the context of vested rights, as it allowed corporations to purchase public agricultural land up to a certain limit, contrasting with the 1973 Constitution's stricter prohibition.