Natividad vs. Court of Appeals

Land that has been openly, continuously, exclusively, and notoriously possessed as owner for the period prescribed by law ceases to be alienable land of the public domain and becomes private property by operation of law. A private corporation may therefore acquire such land without violating the constitutional prohibition, as the prohibition applies only to lands of the public domain.

On January 18, 1982, Tomas Claudio Memorial College, Inc. (TCMC), a private corporation, filed an application for original registration of title over six parcels of land in Morong, Rizal. The Director of Lands opposed the application, arguing, among other grounds, that TCMC was disqualified from holding alienable lands of the public domain under the 1973 Constitution. During the proceedings, TCMC sold the parcels to individual petitioners Oscar Natividad, Eugenio Pascual, and Bartolome Ramos, and the trial court granted TCMC's motion to be substituted by these vendees as applicants. The trial court subsequently granted the application. The Director of Lands appealed to the Court of Appeals, which reversed the trial court, leading to the present petition.

• Nature of the Action: This was an original application for registration of title over six parcels of land filed by TCMC, a private corporation.
• The Opposition: The Director of Lands opposed the application, primarily on the ground that TCMC, as a private corporation, was constitutionally prohibited from acquiring alienable lands of the public domain.
• Substitution of Applicant: After filing the application, TCMC sold the lands to the individual petitioners. The trial court granted TCMC's motion to be substituted by the petitioners as the applicants.
• Evidence of Possession: At trial, the petitioners presented testimonial and documentary evidence (tax declarations, receipts, deeds of sale) to show that their predecessors-in-interest had possessed the lands openly, continuously, exclusively, and notoriously for over thirty years prior to the sales to TCMC.
• Trial Court Decision: The RTC granted the application, finding the petitioners had registerable titles.
• Appellate Court Reversal: The Court of Appeals reversed, finding the substitution was a circumvention of the constitutional prohibition and that the evidence of possession was insufficient.
• Core Factual Finding: The Supreme Court, based on the evidence, determined that the lands had already become private property through acquisitive prescription by the predecessors-in-interest before TCMC purchased them.

• Constitutional Prohibition Inapplicable: Petitioners argued that the lands were already private property when TCMC bought them, having been converted through decades of possession by their predecessors. Therefore, the constitutional prohibition against corporations holding alienable public land did not apply.
• Substantial Compliance: Petitioners maintained that the substitution of the corporate applicant with individual vendees was a valid procedural step, not a circumvention of the law, as the right to confirm title had already vested in the predecessors.

• Circumvention of Prohibition: The Director of Lands argued that the sale from TCMC to the individual petitioners and the subsequent substitution were sham transactions designed to circumvent the clear constitutional prohibition against private corporations acquiring alienable public land.
• Insufficient Proof of Possession: The Director contended that the petitioners failed to present adequate and substantial proof of open, continuous, exclusive, and notorious possession in the concept of owner since June 12, 1945, or prior thereto, as required by law for confirmation of title.

• Constitutional Prohibition: Whether the registration of the lands in the petitioners' names violated the constitutional prohibition against private corporations holding alienable lands of the public domain.
• Sufficiency of Evidence: Whether the petitioners sufficiently proved that they and their predecessors-in-interest had been in open, continuous, exclusive, and notorious possession of the lands under a bona fide claim of ownership for the period required by law.

• Constitutional Prohibition: The prohibition did not apply because the lands had already been converted to private property through acquisitive prescription prior to their acquisition by TCMC. The confirmation proceedings merely recognized a title already vested, not originally converting public land to private.
• Sufficiency of Evidence: The evidence presented—tax declarations, tax payments, deeds of sale, and testimonies of long-time residents—sufficiently established the required possession by the predecessors-in-interest for over thirty years, thereby satisfying the legal requisite for confirmation of an imperfect title.

• Ipso Jure Conversion of Public Land to Private Property — Open, exclusive, and undisputed possession of alienable public land for the period prescribed by law (30 years under the Public Land Act) creates a legal fiction whereby the land, upon completion of the requisite period, ipso jure and without need of judicial or other sanction, ceases to be public land and becomes private property. Confirmation proceedings do not confer title but merely recognize a title already vested.

• "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 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 ...'" — This passage underscores the conclusive presumption of ownership arising from the prescribed period of possession, making confirmation proceedings largely a formality.
• "Since the petitioners could have had their respective titles confirmed prior to the sale to TCMC, it was not necessary for the corporation to take the circuitous route of assigning to natural persons its rights to the lots for the purpose of complying, on paper, with the technicality of having natural persons file the applications for confirmation of title to the private lands." — This rejects the argument that the substitution was a circumvention, affirming the substantive right over procedural form.

• Director of Lands vs. Intermediate Appellate Court and Acme Plywood & Veneer Co., Inc., 146 SCRA 509 — Controlling precedent applied. The Court reiterated the doctrine from this case that long-term possession of public land converts it to private property by operation of law, and a corporation may acquire such private land without violating the Constitution.
• Susi vs. Razon, 48 Phil. 424 — Cited for the principle that open, continuous, adverse, and public possession of public land from time immemorial confers an effective title, making the land private property.

• Section 48(b), Commonwealth Act No. 141 (Public Land Act) — Provides that citizens who have been in open, continuous, exclusive, and notorious possession and occupation of agricultural lands of the public domain under a bona fide claim of ownership for at least thirty years may apply for confirmation of title and are conclusively presumed to have performed all conditions essential to a government grant.
• Article XIV, Section 11, 1973 Constitution — States that no private corporation or association may hold alienable lands of the public domain except by lease. The Court ruled this prohibition was inapplicable as the lands in question were already private property.

• Andres R. Narvasa (Chairman)
• Isagani A. Cruz
• Edgardo L. Medialdea