San Miguel Corporation vs. Court of Appeals

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. However, such possession must be conclusively established, and tax declarations and receipts, being merely indicia of a claim of ownership, only become strong evidence of ownership acquired by prescription when accompanied by proof of actual possession.

San Miguel Corporation, a private corporation, purchased Lot 684, a 14,531 square-meter parcel of land located in Sta. Anastacia, Sto. Tomas, Batangas, from Silverio Perez on December 23, 1975, for P133,084.80. The land was part of the public domain, and the application for registration was opposed by the Republic of the Philippines on grounds including the disqualification of private corporations from holding alienable lands of the public domain under Section 11, Article XIV of the Constitution, and the expiration of the six-month period prescribed by Presidential Decree No. 892 for claiming ownership based on Spanish title or grant.

On December 23, 1975, San Miguel Corporation (SMC) purchased from Silverio Perez Lot 684, a 14,531 square-meter parcel of land located in Sta. Anastacia, Sto. Tomas, Batangas, for P133,084.80. On February 21, 1977, claiming ownership in fee simple of the land, SMC filed before the then Court of First Instance, now Regional Trial Court of Batangas, an application for its registration under the Land Registration Act.

The Solicitor General, appearing for the Republic of the Philippines, opposed the application, contending that SMC's claim of ownership in fee simple on the basis of a Spanish title or grant could no longer be availed of because the six-month period from February 16, 1976 prescribed by Presidential Decree No. 892 had elapsed; that the parcel of land in question is part of the public domain; and that SMC, being a private corporation, is disqualified under Section 11, Article XIV of the Constitution from holding alienable lands of the public domain. The Solicitor General thereafter authorized the Provincial Fiscal of Batangas to appear in the case, subject to his supervision and control.

At the initial and only hearing held on October 12, 1977, the court, upon motion of SMC and there being no opposition except that of the Republic, issued an order of general default. SMC was allowed to mark documentary evidence to establish jurisdictional facts and to present additional evidence before the Clerk of Court who was appointed Commissioner for that purpose. On December 12, 1977, the lower court rendered a decision granting the application for registration and adjudicating the property in favor of SMC.

SMC's documentary evidence consisted of tax declaration No. 923, showing that in 1974, Silverio Perez declared as his own for taxation purposes a certain riceland with an area of 1.5657 hectares located in Sta. Anastacia, Sto. Tomas, Batangas, and a certification of the Office of the Treasurer of Sto. Tomas that in 1977, Silverio Perez paid realty taxes for the land subject of tax declaration No. 923. SMC's testimonial evidence consisted of the testimony of vendor Silverio Perez, who claimed he had been in possession of the property since 1933 until he sold it to SMC in 1975; that the property was given to him by his parents when he got married; that no document evidenced that transfer; that it had been in the possession of his parents since 1925; that he had declared the property in his name for taxation purposes; that he had paid taxes therefor; and that he was in peaceful, continuous, and exclusive possession of the property until its sale to SMC. SMC did not present other witnesses to corroborate Perez's testimony. Its other witness, Antonio M. de las Alas, Jr., a lawyer of the petitioner, simply testified that he handled the negotiations for the purchase of the property; that SMC was authorized to own and acquire property as shown by its articles of incorporation and by-laws; that since its acquisition in 1975, the property had been used as a hatchery farm of SMC; that SMC's possession in the concept of an owner had been continuous, adverse, and against the whole world; and that the land was declared for taxation purposes still in the name of Silverio Perez.

The Solicitor General appealed to the Court of Appeals, which reversed the decision of the lower court and declared the parcel of land involved as public land. The Court of Appeals found that Silverio Perez's testimony, being uncorroborated, was simply self-serving and undeserving of any weight.

• Prescription as Mode of Acquisition: Petitioner argued that the Court of Appeals failed to hold that prescription is a mode of acquiring title or ownership of land and that the title thus acquired is registrable.
• Disregard of Evidence: Petitioner argued that the Court of Appeals disregarded its evidence not on the basis of controverting evidence but on the basis of unfounded suppositions and conjectures.
• Reversal of Factual Findings: Petitioner argued that the Court of Appeals erred in reversing the factual findings of the trial court, which had the opportunity of observing the demeanor and sincerity of the witnesses.

• Expiration of Prescriptive Period: The Solicitor General contended that SMC's claim of ownership in fee simple on the basis of a Spanish title or grant could no longer be availed of because the six-month period from February 16, 1976 prescribed by Presidential Decree No. 892 had elapsed.
• Public Domain Character of the Land: The Solicitor General contended that the parcel of land in question is part of the public domain.
• Disqualification of Private Corporation: The Solicitor General contended that SMC, being a private corporation, is disqualified under Section 11, Article XIV of the Constitution from holding alienable lands of the public domain.

• Sufficiency of Evidence of Possession: Whether the evidence presented by the petitioner is sufficient to warrant a ruling that SMC and/or its predecessor-in-interest has a registrable right over Lot 684.
• Prescription as Mode of Acquisition: Whether the Court of Appeals erred in failing to hold that prescription is a mode of acquiring title or ownership of land and that the title thus acquired is registrable.
• Reversal of Factual Findings: Whether the Court of Appeals erred in reversing the factual findings of the trial court.

• Sufficiency of Evidence of Possession: No. The evidence presented was insufficient to establish a registrable right over Lot 684, as there was paucity of evidence of actual, notorious, and exclusive possession on the part of vendor Silverio Perez so as to attach to it the character of an express grant from the government.
• Prescription as Mode of Acquisition: No. While prescription is a mode of acquiring title to land, the requisite open, continuous, exclusive, and notorious possession must be conclusively established, which the petitioner failed to do.
• Reversal of Factual Findings: No. While trial courts have the opportunity to observe the demeanor of witnesses, their factual findings may nonetheless be reversed by the Court of Appeals if, by the evidence on record, it appears that the trial court erred.

• Sufficiency of Evidence of Possession: The Court held 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. Such open, continuous, exclusive, and notorious occupation of the disputed properties for more than 30 years must, however, be conclusively established. This quantum of proof is necessary to avoid the erroneous validation of actually fictitious claims of possession over the property in dispute. In this case, petitioner's claim that its predecessor-in-interest had open, exclusive, and undisputed possession of Lot 684 for more than thirty years was anchored on certain documentary and testimonial evidence. The documentary evidence consisted of tax declaration No. 923 and a certification of the Office of the Treasurer of Sto. Tomas. The Court held that tax declarations and receipts are not conclusive evidence of ownership or right of possession over a piece of land; they are merely indicia of a claim of ownership. Tax declarations only become strong evidence of ownership of land acquired by prescription when accompanied by proof of actual possession. Such proof of actual possession was sought to be provided by the testimony of vendor Silverio Perez, but petitioner did not present other witnesses to corroborate Perez's testimony. The Court held that there was paucity of evidence of actual, notorious, and exclusive possession of the property on the part of vendor Silverio Perez so as to attach to it the character of an express grant from the government. As correctly held by the Court of Appeals, Silverio Perez's testimony, being uncorroborated, is simply self-serving and hence, undeserving of any weight.

• Prescription as Mode of Acquisition: The Court acknowledged that prescription is a mode of acquiring title or ownership of land and that the title thus acquired is registrable. However, the Court emphasized that the possession must be conclusively established. The petitioner's reliance on tax declarations and receipts, without more, was insufficient to prove the requisite possession for prescription to operate.

• Reversal of Factual Findings: The Court stated that while trial courts may have the opportunity to observe the demeanor of witnesses, their factual findings may nonetheless be reversed by the Court of Appeals, the appellate court vested by law to resolve both legal and factual issues, if, by the evidence on record, it appears that the trial court involved erred. The Court found no reason to disturb the Court of Appeals' reversal of the trial court's factual findings, given the insufficiency of the evidence presented by the petitioner.

• Prescription as a Mode of Acquiring Public Land — 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. The Court applied this doctrine but found that the petitioner failed to conclusively establish the requisite possession, as the evidence presented was insufficient.

• Conclusive Proof Requirement — Open, continuous, exclusive, and notorious occupation of disputed properties for more than 30 years must be conclusively established. This quantum of proof is necessary to avoid the erroneous validation of actually fictitious claims of possession over the property in dispute. The Court applied this doctrine in finding that the petitioner's evidence was insufficient to establish a registrable right.

• Evidentiary Weight of Tax Declarations — Tax declarations and receipts are not conclusive evidence of ownership or right of possession over a piece of land; they are merely indicia of a claim of ownership. Tax declarations only become strong evidence of ownership of land acquired by prescription when accompanied by proof of actual possession. The Court applied this doctrine in holding that the petitioner's documentary evidence, consisting of tax declaration No. 923 and a certification of tax payment, was insufficient to establish ownership through prescription.

• Self-Serving Testimony — Uncorroborated testimony of a witness who is an interested party is self-serving and undeserving of any weight. The Court applied this doctrine in affirming the Court of Appeals' finding that Silverio Perez's testimony, being uncorroborated, was simply self-serving.

• "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." — This passage states the canonical formulation of the doctrine of prescription as a mode of acquiring title to public land, which is central to the Court's analysis.

• "Such open, continuous, exclusive and notorious occupation of the disputed properties for more than 30 years must, however, be conclusively established." — This passage establishes the quantum of proof required for prescription to operate, emphasizing the need for conclusive evidence to avoid validating fictitious claims of possession.

• "Tax declarations and receipts are not conclusive evidence of ownership or right of possession over a piece of land. They are merely indicia of a claim of ownership." — This passage defines the evidentiary weight of tax declarations and receipts, which was the critical deficiency in the petitioner's case.

• "Tax declarations only become strong evidence of ownership of land acquired by prescription, a mode of acquisition of ownership relied upon by petitioner in this case, when accompanied by proof of actual possession." — This passage articulates the rule that tax declarations alone are insufficient to prove ownership through prescription, requiring proof of actual possession as a complement.

• Director of Lands vs. Bengzon, G.R. No. 54045, July 28, 1987, 152 SCRA 369 — Cited as controlling precedent for the doctrine that open, exclusive, and undisputed possession of alienable public land for the period prescribed by law creates the legal fiction that the land ceases to be public land and becomes private property.

• Director of Lands vs. Manila Electric Co., G.R. No. 57461, September 11, 1987, 153 SCRA 686 — Cited as controlling precedent for the same doctrine of prescription as a mode of acquiring title to public land.

• Director of Lands vs. Intermediate Appellate Court and Acme Plywood and Veneer Co., Inc., G.R. No. 73002, December 29, 1986, 146 SCRA 509 — Cited as controlling precedent for the doctrine of prescription as a mode of acquiring title to public land.

• Municipality of Santiago, Isabela vs. Court of Appeals, L-49903, February 21, 1983, 120 SCRA 434, 745 — Cited for the proposition that open, continuous, exclusive, and notorious occupation of disputed properties for more than 30 years must be conclusively established.

• Ferrer-Lopez vs. Court of Appeals, G.R. No. 50420, May 29, 1987, 150 SCRA 393 — Cited for the rule that tax declarations and receipts are not conclusive evidence of ownership or right of possession over a piece of land.

• Director of Lands vs. Court of Appeals, G.R. No. 50340, December 26, 1984, 133 SCRA 701 — Cited for the same rule that tax declarations and receipts are not conclusive evidence of ownership.

• Municipality of Antipolo vs. Zapanta, G.R. No. 65334, December 26, 1984, 133 SCRA 820 — Cited for the proposition that tax declarations and receipts are merely indicia of a claim of ownership.

• Bautista vs. Court of Appeals, L-43105, August 31, 1984, 131 SCRA 532 — Cited for the rule that tax declarations only become strong evidence of ownership of land acquired by prescription when accompanied by proof of actual possession.

• Republic vs. De Porkan, G.R. No. 66866, June 18, 1987, 151 SCRA — Cited in support of the finding that there was paucity of evidence of actual, notorious, and exclusive possession so as to attach to the property the character of an express grant from the government.

• Section 11, Article XIV, 1973 Constitution — The constitutional provision disqualifying private corporations from holding alienable lands of the public domain. The Solicitor General invoked this provision in opposing SMC's application for registration, although the Court's decision ultimately rested on the insufficiency of evidence of possession rather than on this disqualification.

• Presidential Decree No. 892 — The decree prescribing a six-month period from February 16, 1976 for claiming ownership of land on the basis of a Spanish title or grant. The Solicitor General invoked this decree in opposing SMC's application, contending that the period had elapsed.

• Land Registration Act — The statute under which SMC filed its application for registration of Lot 684 before the Court of First Instance of Batangas.

Gutierrez, Jr., Feliciano, Bidin, and Cortes, JJ., concurred in the decision.