G.R. No.

178906 February 18, 2009

ELVIRA T. ARANGOTE, petitioner,

vs.
SPS. MARTIN MAGLUNOB and LOURDES S. MAGLUNOB, and ROMEO SALIDO, Respondents.

DECISION

CHICO-NAZARIO, J.:

Before this Court is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of Civil
Procedure seeking to reverse and set aside the Decision1 dated 27 October 2006 and Resolution2 dated 29
June 2007 of the Court of Appeals in CA-G.R. SP No. 64970. In its assailed Decision, the appellate court
affirmed the Decision3 dated 12 September 2000 of the Regional Trial Court (RTC), 6th Judicial Region,
Branch 1, Kalibo, Aklan, in Civil Case No. 5511, which reversed the Decision4 dated 6 April 1998 of the 7th
Municipal Circuit Trial Court (MCTC) of Ibajay-Nabas, Ibajay, Aklan, in Civil Case No. 156; and declared5 the
herein respondent-Spouses Martin and Lourdes Maglunob (Spouses Maglunob) and respondent Romeo
Salido (Romeo) as the lawful owners and possessors of Lot 12897 with an area of 982 square meters, more
or less, located in Maloco, Ibajay, Aklan (subject property). In its assailed Resolution, the appellate court
denied herein petitioner Elvira T. Arangote’s Motion for Reconsideration.

Elvira T. Arangote, herein petitioner married to Ray Mars E. Arangote, is the registered owner of the
subject property, as evidenced by Original Certificate of Title (OCT) No. CLOA-1748.6 Respondents Martin
(Martin II) and Romeo are first cousins and the grandnephews of Esperanza Maglunob-Dailisan
(Esperanza), from whom petitioner acquired the subject property.

The Petition stems from a Complaint7 filed by petitioner and her husband against the respondents for
Quieting of Title, Declaration of Ownership and Possession, Damages with Preliminary Injunction, and
Issuance of Temporary Restraining Order before the MCTC, docketed as Civil Case No. 156.

The Complaint alleged that Esperanza inherited the subject property from her uncle Victorino Sorrosa by
virtue of a notarized Partition Agreement8 dated 29 April 1985, executed by the latter’s heirs. Thereafter,
Esperanza declared the subject property in her name for real property tax purposes, as evidenced by Tax
Declaration No. 16218 (1985).9

The Complaint further stated that on 24 June 1985, Esperanza executed a Last Will and Testament10
bequeathing the subject property to petitioner and her husband, but it was never probated. On 9 June
1986, Esperanza executed another document, an Affidavit,11 in which she renounced, relinquished,
waived and quitclaimed all her rights, share, interest and participation whatsoever in the subject property
in favor of petitioner and her husband. On the basis thereof, Tax Declaration No. 16218 in the name of
Esperanza was cancelled and Tax Declaration No. 1666612 (1987) was issued in the name of the petitioner
and her husband.

In 1989, petitioner and her husband constructed a house on the subject property. On 26 March 1993, OCT
No. CLOA-1748 was issued by the Secretary of the Department of Agrarian Reform (DAR) in the name of
petitioner, married to Ray Mars E. Arangote. However, respondents, together with some hired persons,
entered the subject property on 3 June 1994 and built a hollow block wall behind and in front of
petitioner’s house, which effectively blocked the entrance to its main door.

As a consequence thereof, petitioner and her husband were compelled to institute Civil Case No. 156.
In their Answer with Counterclaim in Civil Case No. 156, respondents averred that they co-owned the
subject property with Esperanza. Esperanza and her siblings, Tomas and Inocencia, inherited the subject
property, in equal shares, from their father Martin Maglunob (Martin I). When Tomas and Inocencia
passed away, their shares passed on by inheritance to respondents Martin II and Romeo, respectively.
Hence, the subject property was co-owned by Esperanza, respondent Martin II (together with his wife
Lourdes), and respondent Romeo, each holding a one-third pro-indiviso share therein. Thus, Esperanza
could not validly waive her rights and interest over the entire subject property in favor of the petitioner.

Respondents also asserted in their Counterclaim that petitioner and her husband, by means of fraud,
undue influence and deceit were able to make Esperanza, who was already old and illiterate, affix her
thumbmark to the Affidavit dated 9 June 1986, wherein she renounced all her rights and interest over the
subject property in favor of petitioner and her husband. Respondents thus prayed that the OCT issued in
petitioner’s name be declared null and void insofar as their two-thirds shares are concerned.

After trial, the MCTC rendered its Decision dated 6 April 1998 in Civil Case No. 156, declaring petitioner and
her husband as the true and lawful owners of the subject property. The decretal portion of the MCTC
Decision reads:

WHEREFORE, judgment is hereby rendered:

A. Declaring the [herein petitioner and her husband] the true, lawful and exclusive owners and entitled to
the possession of the [subject property] described and referred to under paragraph 2 of the [C]omplaint
and covered by Tax Declaration No. 16666 in the names of the [petitioner and her husband];

B. Ordering the [herein respondents] and anyone hired by, acting or working for them, to cease and desist
from asserting or claiming any right or interest in, or exercising any act of ownership or possession over the
[subject property];

C. Ordering the [respondents] to pay the [petitioner and her husband] the amount of ₱10,000.00 as
attorney’s fee. With cost against the [respondents].13

The respondents appealed the aforesaid MCTC Decision to the RTC. Their appeal was docketed as Civil
Case No. 5511.

Respondents argued in their appeal that the MCTC erred in not dismissing the Complaint filed by the
petitioner and her husband for failure to identify the subject property therein. Respondents further faulted
the MCTC for not declaring Esperanza’s Affidavit dated 9 June 1986 -- relinquishing all her rights and
interest over the subject property in favor of petitioner and her husband -- as null and void insofar as
respondents’ two-thirds share in the subject property is concerned.

On 12 September 2000, the RTC rendered its Decision reversing the MCTC Decision dated 6 April 1998. The
RTC adjudged respondents, as well as the other heirs of Martin Maglunob, as the lawful owners and
possessors of the entire subject property. The RTC decreed:

WHEREFORE, judgment is hereby rendered as follows:

1) The appealed [D]ecision is REVERSED;

2) [Herein respondents] and the other heirs of Martin Maglunob are declared the lawful owners and
possessors of the whole [subject property] as described in Paragraph 2 of the [C]omplaint, as against the
[herein petitioner and her husband].
3) [Petitioner and her husband] are ordered to immediately turn over possession of the [subject property]
to the [respondents] and the other heirs of Martin Maglunob; and

4) [Petitioner and her husband] are ordered to pay [respondents] attorney’s fees of ₱5,000.00, other
litigation expenses of ₱5,000.00, moral damages of ₱10,000.00 and exemplary damages of P5,000.00.14

Petitioner and her husband filed before the RTC, on 26 September 2000, a Motion for New Trial or
Reconsideration15 on the ground of newly discovered evidence consisting of a Deed of Acceptance16
dated 23 September 2000, and notice17 of the same, which were both made by the petitioner, for herself
and in behalf of her husband,18 during the lifetime of Esperanza. In the RTC Order19 dated 2 May 2001,
however, the RTC denied the aforesaid Motion for New Trial or Reconsideration.

The petitioner and her husband then filed a Petition for Review, under Rule 42 of the 1997 Revised Rules of
Civil Procedure, before the Court of Appeals, where the Petition was docketed as CA-G.R. SP No. 64970.

In their Petition before the appellate court, petitioner and her husband raised the following errors
committed by the RTC in its 12 September 2000 Decision:

I. It erred in reversing the [D]ecision of the [MCTC];

II. It erred in declaring the [herein respondents] and the other heirs of Martin Maglunob as the lawful
owners and possessors of the whole [subject property];

III. It erred in declaring [OCT] No. CLOA-1748 in the name of [herein petitioner] Elvie T. Arangote as null
and void;

IV. It erred in denying [petitioner and her husband’s] [M]otion for [N]ew [T]rial or [R]econsideration dated
[26 September 2000; and

V. It erred in not declaring the [petitioner and her husband] as possessors in good faith.20

On 27 October 2006, the Court of Appeals rendered a Decision denying the Petition for Review of
petitioner and her husband and affirming the RTC Decision dated 12 September 2000. Petitioner and her
husband’s subsequent Motion for Reconsideration was similarly denied by the Court of Appeals in its
Resolution dated 29 June 2007.

Hence, petitioner21 now comes before this Court raising in her Petition the following issues:

I. Whether the [RTC] acted with grave abuse of discretion amounting to lack or excess of jurisdiction when
it declared the [petitioner and her husband’s title to the subject property] null and void;

II. Whether the [RTC] acted with grave abuse of discretion amounting to lack of jurisdiction when it
declared the Affidavit of Quitclaim null and void; and

III. Whether the [RTC] and the Honorable Court of Appeals acted with grave abuse of discretion amounting
to lack or excess of jurisdiction when it rejected petitioner’s claim as possessors (sic) in good faith, hence,
entitled to the rights provided in [Article] 448 and [Article] 546 of the Civil Code.22

Petitioner contends that the aforesaid OCT No. CLOA-1748 was issued in her name on 26 March 1993 and
was registered in the Registry of Deeds of Aklan on 20 April 1993. From 20 April 1993 until the institution
of Civil Case No. 156 on 10 June 1994 before the MCTC, more than one year had already elapsed.
Considering that a Torrens title can only be attacked within one year after the date of the issuance of the
decree of registration on the ground of fraud and that such attack must be through a direct proceeding, it
was an error on the part of the RTC and the Court of Appeals to declare OCT No. CLOA-1748 null and void.

Petitioner additionally posits that both the RTC and the Court of Appeals committed a mistake in declaring
null and void the Affidavit dated 9 June 1986 executed by Esperanza, waiving all her rights and interest
over the subject property in favor of petitioner and her husband. Esperanza’s Affidavit is a valid and
binding proof of the transfer of ownership of the subject property in petitioner’s name, as it was also
coupled with actual delivery of possession of the subject property to petitioner and her husband. The
Affidavit is also proof of good faith on the part of petitioner and her husband.

Finally, petitioner argues that, assuming for the sake of argument, that Esperanza’s Affidavit is null and
void, petitioner and her husband had no knowledge of any flaw in Esperanza’s title when the latter
relinquished her rights to and interest in the subject property in their favor. Hence, petitioner and her
husband can be considered as possessors in good faith and entitled to the rights provided under Articles
448 and 546 of the Civil Code.

This present Petition is devoid of merit.

It is a hornbook doctrine that the findings of fact of the trial court are entitled to great weight on appeal
and should not be disturbed except for strong and valid reasons, because the trial court is in a better
position to examine the demeanor of the witnesses while testifying. It is not a function of this Court to
analyze and weigh evidence by the parties all over again. This Court’s jurisdiction is, in principle, limited to
reviewing errors of law that might have been committed by the Court of Appeals.23 This rule, however, is
subject to several exceptions,24 one of which is present in this case, i.e., when the factual findings of the
Court of Appeals and the trial court are contradictory.

In this case, the findings of fact of the MCTC as regards the origin of the subject property are in conflict
with the findings of fact of both the RTC and the Court of Appeals. Hence, this Court will have to examine
the records to determine first the true origin of the subject property and to settle whether the
respondents have the right over the same for being co-heirs and co-owners, together with their grand
aunt, Esperanza, before this Court can resolve the issues raised by the petitioner in her Petition.

After a careful scrutiny of the records, this Court affirms the findings of both the RTC and the Court of
Appeals as regards the origin of the subject property and the fact that respondents, with their grand aunt
Esperanza, were co-heirs and co-owners of the subject property.

The records disclosed that the subject property was part of a parcel of land25 situated in Maloco, Ibajay,
Aklan, consisting of 7,176 square meters and commonly owned in equal shares by the siblings Pantaleon
Maglunob (Pantaleon) and Placida Maglunob-Sorrosa (Placida). Upon the death of Pantaleon and Placida,
their surviving and legal heirs executed a Deed of Extrajudicial Settlement and Partition of Estate in July
1981,26 however, the Deed was not notarized. Considering that Pantaleon died without issue, his one-half
share in the parcel of land he co-owned with Placida passed on to his four siblings (or their respective
heirs, if already deceased), namely: Placida, Luis, Martin I, and Victoria, in equal shares.

According to the aforementioned Deed of Extrajudicial Settlement and Partition of Estate, the surviving
and legal heirs of Pantaleon and Placida agreed to have the parcel of land commonly owned by the siblings
declared for real property tax purposes in the name of Victorino Sorrosa (Victorino), Placida’s husband.
Thus, Tax Declarations No. 5988 (1942),27 No. 6200 (1945)28 and No. 7233 (1953)29 were all issued in the
name of Victorino.
Since Martin I already passed away when the Deed of Extrajudicial Settlement and Partition of Estate was
executed, his heirs30 were represented therein by Esperanza. By virtue of the said Deed, Martin I received
as inheritance a portion of the parcel of land measuring 897 square meters.

After the death of Victorino, his heirs31 executed another Partition Agreement on 29 April 1985, which
was notarized on the same date. The Partition Agreement mentioned four parcels of land. The subject
property, consisting of a portion of the consolidated parcels 1, 2, and 3, and measuring around 982 square
meters, was allocated to Esperanza. In comparison, the property given to Esperanza under the Partition
Agreement is bigger than the one originally allocated to her earlier under the Deed of Extrajudicial
Settlement and Partition of Estate dated July 1981, which had an area of only 897 square meters. It may be
reasonably assumed, however, that the subject property, measuring 982 square meters, allocated to
Esperanza under the Partition Agreement dated 29 April 1985, is already inclusive of the smaller parcel of
897 square meters assigned to her under the Deed of Extrajudicial Settlement and Partition of Estate dated
July 1981. As explained by the RTC in its 12 September 2000 Decision:

The [subject property] which is claimed by the [herein petitioner and her husband] and that which is
claimed by the [herein respondents] are one and the same, the difference in area and technical description
being due to the repartition and re-allocation of the parcel of land originally co-owned by Pantaleon
Maglunob and his sister Placida Maglunob and subsequently declared in the name of [Victorino] under Tax
Declaration No. 5988 of 1949.32

It is clear from the records that the subject property was not Esperanza’s exclusive share, but also that of
the other heirs of her father, Martin I. Esperanza expressly affixed her thumbmark to the Deed of
Extrajudicial Settlement of July 1981 not only for herself, but also on behalf of the other heirs of Martin I.
Though in the Partition Agreement dated 29 April 1985 Esperanza affixed her thumbmark without stating
that she was doing so not only for herself, but also on behalf of the other heirs of Martin I, this does not
mean that Esperanza was already the exclusive owner thereof. The evidence shows that the subject
property is the share of the heirs of Martin I. This is clear from the sketch33 attached to the Partition
Agreement dated 29 April 1985, which reveals the proportionate areas given to the heirs of the two
siblings, Pantaleon and Placida, who were the original owners of the whole parcel of land34 from which
the subject property was taken.

Further, it bears emphasis that the Partition Agreement was executed by and among the son, grandsons,
granddaughters and cousins of Victorino. Esperanza was neither the granddaughter nor the cousin of
Victorino, as she was only Victorino’s grandniece. The cousin of Victorino is Martin I, Esperanza’s father. In
effect, therefore, the subject property allotted to Esperanza in the Partition Agreement was not her
exclusive share, as she holds the same for and on behalf of the other heirs of Martin I, who was already
deceased at the time the Partition Agreement was made.

To further bolster the truth that the subject property was not exclusively owned by Esperanza, the
Affidavit she executed in favor of petitioner and her husband on 6 June 1985 was worded as follows:

That I hereby renounce, relinquish, waive and quitclaim all my rights, share, interest and participation
whatsoever in the [subject property] unto the said Sps. Ray Mars Arangote and Elvira T. Arangote, their
heirs, successors, and assigns including the improvement found thereon;35

Logically, if Esperanza fully owned the subject property, she would have simply waived her rights to and
interest in the subject property, without mentioning her "share" and "participation" in the same. By
including such words in her Affidavit, Esperanza was aware of and was limiting her waiver, renunciation,
and quitclaim to her one-third share and participation in the subject property.
Going to the issues raised by the petitioner in this Petition, this Court will resolve the same concurrently as
they are interrelated.

In this case, the petitioner derived her title to the subject property from the notarized Affidavit executed
by Esperanza, wherein the latter relinquished her rights, share, interest and participation over the same in
favor of the petitioner and her husband.

A careful perusal of the said Affidavit reveals that it is not what it purports to be. Esperanza’s Affidavit is, in
fact, a Donation. Esperanza’s real intent in executing the said Affidavit was to donate her share in the
subject property to petitioner and her husband.

As no onerous undertaking is required of petitioner and her husband under the said Affidavit, the donation
is regarded as a pure donation of an interest in a real property covered by Article 749 of the Civil Code.36
Article 749 of the Civil Code provides:

Art. 749. In order that the donation of an immovable may be valid, it must be made in a public document,
specifying therein the property donated and the value of the charges which the donee must satisfy.

The acceptance may be made in the same deed of donation or in a separate public document, but it shall
not take effect unless it is done during the lifetime of the donor.

If the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic
form, and this step shall be noted in both instruments.

From the aforesaid provision, there are three requisites for the validity of a simple donation of a real
property, to wit: (1) it must be made in a public instrument; (2) it must be accepted, which acceptance may
be made either in the same Deed of Donation or in a separate public instrument; and (3) if the acceptance
is made in a separate instrument, the donor must be notified in an authentic form, and the same must be
noted in both instruments.

This Court agrees with the RTC and the Court of Appeals that the Affidavit executed by Esperanza
relinquishing her rights, share, interest and participation over the subject property in favor of the
petitioner and her husband suffered from legal infirmities, as it failed to comply with the aforesaid
requisites of the law.

In Sumipat v. Banga,37 this Court declared that title to immovable property does not pass from the donor
to the donee by virtue of a Deed of Donation until and unless it has been accepted in a public instrument
and the donor duly notified thereof. The acceptance may be made in the very same instrument of
donation. If the acceptance does not appear in the same document, it must be made in another. Where
the Deed of Donation fails to show the acceptance, or where the formal notice of the acceptance, made in
a separate instrument, is either not given to the donor or else not noted in the Deed of Donation and in
the separate acceptance, the donation is null and void.38

In the present case, the said Affidavit, which is tantamount to a Deed of Donation, met the first requisite,
as it was notarized; thus, it became a public instrument. Nevertheless, it failed to meet the aforesaid
second and third requisites. The acceptance of the said donation was not made by the petitioner and her
husband either in the same Affidavit or in a separate public instrument. As there was no acceptance made
of the said donation, there was also no notice of the said acceptance given to the donor, Esperanza.
Therefore, the Affidavit executed by Esperanza in favor of petitioner and her husband is null and void.

The subsequent notarized Deed of Acceptance39 dated 23 September 2000, as well as the notice40 of such
acceptance, executed by the petitioner did not cure the defect. Moreover, it was only made by the
petitioner several years after the Complaint was filed in court, or when the RTC had already rendered its
Decision dated 12 September 2000, although it was still during Esperanza’s lifetime. Evidently, its
execution was a mere afterthought, a belated attempt to cure what was a defective donation.

It is true that the acceptance of a donation may be made at any time during the lifetime of the donor. And
granting arguendo that such acceptance may still be admitted in evidence on appeal, there is still need for
proof that a formal notice of such acceptance was received by the donor and noted in both the Deed of
Donation and the separate instrument embodying the acceptance.41 At the very least, this last legal
requisite of annotation in both instruments of donation and acceptance was not fulfilled by the petitioner.
Neither the Affidavit nor the Deed of Acceptance bears the fact that Esperanza received notice of the
acceptance of the donation by petitioner. For this reason, even Esperanza’s one-third share in the subject
property cannot be adjudicated to the petitioner.

With the foregoing, this Court holds that the RTC and the Court of Appeals did not err in declaring null and
void Esperanza’s Affidavit.

The next issue to be resolved then is whether the RTC, as well as the Court of Appeals, erred in declaring
OCT No. CLOA-1748 in the name of petitioner and her husband null and void.

Again, this Court answers the said issue in the negative.

Section 48 of Presidential decree No. 1529 states:

SEC. 48. Certificate not subject to collateral attack. - A certificate of title shall not be subject to collateral
attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law.

Such proscription has long been enshrined in Philippine jurisprudence. The judicial action required to
challenge the validity of title is a direct attack, not a collateral attack.42

The attack is considered direct when the object of an action is to annul or set aside such proceeding, or
enjoin its enforcement. Conversely, an attack is indirect or collateral when, in an action to obtain a
different relief, an attack on the proceeding is nevertheless made as an incident thereof. Such action to
attack a certificate of title may be an original action or a counterclaim, in which a certificate of title is
assailed as void.43

A counterclaim is considered a new suit in which the defendant is the plaintiff and the plaintiff in the
complaint becomes the defendant. It stands on the same footing as, and is to be tested by the same rules
as if it were, an independent action.44

In their Answer to the Complaint for Quieting of Title filed by the petitioner and her husband before the
MCTC, respondents included therein a Counterclaim wherein they repleaded all the material allegations in
their affirmative defenses, the most essential of which was their claim that petitioner and her husband --
by means of fraud, undue influence and deceit -- were able to make their grand aunt, Esperanza, who was
already old and illiterate, affix her thumbmark to the Affidavit, wherein she renounced, waived, and
quitclaimed all her rights and interest over the subject property in favor of petitioner and her husband. In
addition, respondents maintained in their Answer that as petitioner and her husband were not tenants
either of Esperanza or of the respondents, the DAR could not have validly issued in favor of petitioner and
her husband OCT No. CLOA-1748. Thus, the respondents prayed, in their counterclaim in Civil Case No. 156
before the MCTC, that OCT No. CLOA-1748 issued in the name of petitioner, married to Ray Mars E.
Arangote, be declared null and void, insofar as their two-thirds shares in the subject property are
concerned.
It is clear, thus, that respondents’ Answer with Counterclaim was a direct attack on petitioner’s certificate
of title. Furthermore, since all the essential facts of the case for the determination of the validity of the
title are now before this Court, to require respondents to institute a separate cancellation proceeding
would be pointlessly circuitous and against the best interest of justice.

Esperanza’s Affidavit, which was the sole basis of petitioner’s claim to the subject property, has been
declared null and void. Moreover, petitioner and her husband were not tenants of the subject property. In
fact, petitioner herself admitted in her Complaint filed before the MCTC that her husband is out of the
country, rendering it impossible for him to work on the subject property as a tenant. Instead of cultivating
the subject property, petitioner and her husband possessed the same by constructing a house thereon.
Thus, it is highly suspicious how the petitioner was able to secure from the DAR a Certificate of Land
Ownership Award (CLOA) over the subject property. The DAR awards such certificates to the grantees only
if they fulfill the requirements of Republic Act No. 6657, otherwise known as the Comprehensive Agrarian
Reform Program (CARP).45 Hence, the RTC and the Court of Appeals did not err in declaring null and void
OCT No. CLOA-1748 in the name of the petitioner, married to Ray Mars E. Arangote.

Considering that Esperanza died without any compulsory heirs and that the supposed donation of her one-
third share in the subject property per her Affidavit dated 9 June 1985 was already declared null and void,
Esperanza’s one-third share in the subject property passed on to her legal heirs, the respondents.

As petitioner’s last-ditch effort, she claims that she is a possessor in good faith and, thus, entitled to the
rights provided for under Articles 448 and 546 of the Civil Code.

This claim is untenable.

The Civil Code describes a possessor in good faith as follows:

Art. 526. He is deemed a possessor in good faith who is not aware that there exists in his title or mode of
acquisition any flaw which invalidates it.

He is deemed a possessor in bad faith who possesses in any case contrary to the foregoing.

Mistake upon a doubtful or difficult question of law may be the basis of good faith.

Art. 1127. The good faith of the possessor consists in the reasonable belief that the person from whom he
received the thing was the owner thereof, and could transmit his ownership.

Possession in good faith ceases from the moment defects in the title are made known to the possessor by
extraneous evidence or by a suit for recovery of the property by the true owner. Every possessor in good
faith becomes a possessor in bad faith from the moment he becomes aware that what he believed to be
true is not so.46

In the present case, when respondents came to know that an OCT over the subject property was issued
and registered in petitioner’s name on 26 March 1993, respondents brought a Complaint on 7 August 1993
before the Lupon of Barangay Maloco, Ibajay, Aklan, challenging the title of petitioner to the subject
property on the basis that said property constitutes the inheritance of respondent, together with their
grandaunt Esperanza, so Esperanza had no authority to relinquish the entire subject property to petitioner.
From that moment, the good faith of the petitioner had ceased.

Petitioner cannot be entitled to the rights under Articles 448 and 546 of the Civil Code, because the rights
mentioned therein are applicable only to builders in good faith and not to possessors in good faith.
Moreover, the petitioner cannot be considered a builder in good faith of the house on the subject
property. In the context that such term is used in particular reference to Article 448 of the Civil Code, a
builder in good faith is one who, not being the owner of the land, builds on that land, believing himself to
be its owner and unaware of any defect in his title or mode of acquisition.47

The various provisions of the Civil Code, pertinent to the subject, read:

Article 448. The owner of the land on which anything has been built, sown, or planted in good faith, shall
have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity
provided for in Articles 546 and 548, or to oblige the one who built or planted to pay the price of the land,
and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the
land if its value is considerably more than that of the building or trees. In such a case, he shall pay
reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper
indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall
fix the terms thereof.1avvphi1

Article 449. He who builds, plants, or sows in bad faith on the land of another, loses what is built, planted
or sown without right to indemnity.

Article 450. The owner of the land on which anything has been built, planted or sown in bad faith may
demand the demolition of the work, or that the planting or sowing be removed, in order to replace things
in their former condition at the expense of the person who built, planted or sowed; or he may compel the
builder or planter to pay the price of the land, and the sower the proper rent.

Under the foregoing provisions, the builder in good faith can compel the landowner to make a choice
between appropriating the building by paying the proper indemnity or obliging the builder to pay the price
of the land. The choice belongs to the owner of the land, a rule that accords with the principle of accession,
i.e., that the accessory follows the principal and not the other way around. Even as the option lies with the
landowner, the grant to him, nevertheless, is preclusive. He must choose one. He cannot, for instance,
compel the owner of the building to instead remove it from the land. In order, however, that the builder
can invoke that accruing benefit and enjoy his corresponding right to demand that a choice be made by the
landowner, he should be able to prove good faith on his part.48

Good faith, here understood, is an intangible and abstract quality with no technical meaning or statutory
definition, and it encompasses, among other things, an honest belief, the absence of malice and the
absence of design to defraud or to seek an unconscionable advantage. An individual’s personal good faith
is a concept of his own mind and, therefore, may not conclusively be determined by his protestations
alone. It implies honesty of intention, and freedom from knowledge of circumstances which ought to put
the holder upon inquiry. The essence of good faith lies in an honest belief in the validity of one’s right,
ignorance of a superior claim, and absence of intention to overreach another. Applied to possession, one is
considered in good faith if he is not aware that there exists in his title or mode of acquisition any flaw
which invalidates it.49

In this case, the subject property waived and quitclaimed by Esperanza to the petitioner and her husband
in the Affidavit was only covered by a tax declaration in the name of Esperanza. Petitioner did not even
bother to look into the origin of the subject property and to probe into the right of Esperanza to relinquish
the same. Thus, when petitioner and her husband built a house thereon in 1989 they cannot be considered
to have acted in good faith as they were fully aware that when Esperanza executed an Affidavit
relinquishing in their favor the subject property the only proof of Esperanza’s ownership over the same
was a mere tax declaration. This fact or circumstance alone was enough to put the petitioner and her
husband under inquiry. Settled is the rule that a tax declaration does not prove ownership. It is merely an
indicium of a claim of ownership. Payment of taxes is not proof of ownership; it is, at best, an indicium of
possession in the concept of ownership. Neither tax receipts nor a declaration of ownership for taxation
purposes is evidence of ownership or of a right to possess realty when not supported by other effective
proofs.50

With the foregoing, the petitioner is not entitled to the rights under Article 448 and 546 as the petitioner is
not a builder and possessor in good faith.

WHEREFORE, premises considered, the instant Petition is hereby DENIED. The Decision and Resolution of
the Court of Appeals in CA-G.R. SP No. 64970, dated 27 October 2006 and 29 June 2007, respectively,
affirming the RTC Decision dated 12 September 2000 in Civil Case No. 5511 and declaring the respondents
the lawful owners and possessors of the subject property are hereby AFFIRMED. No costs.

SO ORDERED.
G.R. No. 179987 September 3, 2013

HEIRS OF MARIO MALABANAN, (Represented by Sally A. Malabanan), Petitioners,

vs.
REPUBLIC OF THE PHILIPPINES, Respondent.

RESOLUTION

BERSAMIN, J.:

For our consideration and resolution are the motions for reconsideration of the parties who both assail the
decision promulgated on April 29, 2009, whereby we upheld the ruling of the Court of Appeals (CA)
denying the application of the petitioners for the registration of a parcel of land situated in Barangay Tibig,
Silang, Cavite on the ground that they had not established by sufficient evidence their right to the
registration in accordance with either Section 14(1) or Section 14(2) of Presidential Decree No. 1529
(Property Registration Decree).

Antecedents

The property subject of the application for registration is a parcel of land situated in Barangay Tibig, Silang
Cavite, more particularly identified as Lot 9864-A, Cad-452-D, with an area of 71,324-square meters. On
February 20, 1998, applicant Mario Malabanan, who had purchased the property from Eduardo Velazco,
filed an application for land registration covering the property in the Regional Trial Court (RTC) in Tagaytay
City, Cavite, claiming that the property formed part of the alienable and disposable land of the public
domain, and that he and his predecessors-in-interest had been in open, continuous, uninterrupted, public
and adverse possession and occupation of the land for more than 30 years, thereby entitling him to the
judicial confirmation of his title.1

To prove that the property was an alienable and disposable land of the public domain, Malabanan
presented during trial a certification dated June 11, 2001 issued by the Community Environment and
Natural Resources Office (CENRO) of the Department of Environment and Natural Resources (DENR), which
reads:

This is to certify that the parcel of land designated as Lot No. 9864 Cad 452-D, Silang Cadastre as surveyed
for Mr. Virgilio Velasco located at Barangay Tibig, Silang, Cavite containing an area of 249,734 sq. meters as
shown and described on the Plan Ap-04-00952 is verified to be within the Alienable or Disposable land per
Land Classification Map No. 3013 established under Project No. 20-A and approved as such under FAO 4-
1656 on March 15, 1982.2

After trial, on December 3, 2002, the RTC rendered judgment granting Malabanan’s application for land
registration, disposing thusly:

WHEREFORE, this Court hereby approves this application for registration and thus places under the
operation of Act 141, Act 496 and/or P.D. 1529, otherwise known as Property Registration Law, the lands
described in Plan Csd-04-0173123-D, Lot 9864-A and containing an area of Seventy One Thousand Three
Hundred Twenty Four (71,324) Square Meters, as supported by its technical description now forming part
of the record of this case, in addition to other proofs adduced in the name of MARIO MALABANAN, who is
of legal age, Filipino, widower, and with residence at Munting Ilog, Silang, Cavite.

Once this Decision becomes final and executory, the corresponding decree of registration shall forthwith
issue.
SO ORDERED.3

The Office of the Solicitor General (OSG) appealed the judgment to the CA, arguing that Malabanan had
failed to prove that the property belonged to the alienable and disposable land of the public domain, and
that the RTC erred in finding that he had been in possession of the property in the manner and for the
length of time required by law for confirmation of imperfect title.

On February 23, 2007, the CA promulgated its decision reversing the RTC and dismissing the application for
registration of Malabanan. Citing the ruling in Republic v. Herbieto (Herbieto),4 the CA declared that under
Section 14(1) of the Property Registration Decree, any period of possession prior to the classification of the
land as alienable and disposable was inconsequential and should be excluded from the computation of the
period of possession. Noting that the CENRO-DENR certification stated that the property had been
declared alienable and disposable only on March 15, 1982, Velazco’s possession prior to March 15, 1982
could not be tacked for purposes of computing Malabanan’s period of possession.

Due to Malabanan’s intervening demise during the appeal in the CA, his heirs elevated the CA’s decision of
February 23, 2007 to this Court through a petition for review on certiorari.

The petitioners assert that the ruling in Republic v. Court of Appeals and Corazon Naguit5 (Naguit) remains
the controlling doctrine especially if the property involved is agricultural land. In this regard, Naguit ruled
that any possession of agricultural land prior to its declaration as alienable and disposable could be
counted in the reckoning of the period of possession to perfect title under the Public Land Act
(Commonwealth Act No. 141) and the Property Registration Decree. They point out that the ruling in
Herbieto, to the effect that the declaration of the land subject of the application for registration as
alienable and disposable should also date back to June 12, 1945 or earlier, was a mere obiter dictum
considering that the land registration proceedings therein were in fact found and declared void ab initio for
lack of publication of the notice of initial hearing.

The petitioners also rely on the ruling in Republic v. T.A.N. Properties, Inc.6 to support their argument that
the property had been ipso jure converted into private property by reason of the open, continuous,
exclusive and notorious possession by their predecessors-in-interest of an alienable land of the public
domain for more than 30 years. According to them, what was essential was that the property had been
"converted" into private property through prescription at the time of the application without regard to
whether the property sought to be registered was previously classified as agricultural land of the public
domain.

As earlier stated, we denied the petition for review on certiorari because Malabanan failed to establish by
sufficient evidence possession and occupation of the property on his part and on the part of his
predecessors-in interest since June 12, 1945, or earlier.

Petitioners’ Motion for Reconsideration

In their motion for reconsideration, the petitioners submit that the mere classification of the land as
alienable or disposable should be deemed sufficient to convert it into patrimonial property of the State.
Relying on the rulings in Spouses De Ocampo v. Arlos,7 Menguito v. Republic8 and Republic v. T.A.N.
Properties, Inc.,9 they argue that the reclassification of the land as alienable or disposable opened it to
acquisitive prescription under the Civil Code; that Malabanan had purchased the property from Eduardo
Velazco believing in good faith that Velazco and his predecessors-in-interest had been the real owners of
the land with the right to validly transmit title and ownership thereof; that consequently, the ten-year
period prescribed by Article 1134 of the Civil Code, in relation to Section 14(2) of the Property Registration
Decree, applied in their favor; and that when Malabanan filed the application for registration on February
20, 1998, he had already been in possession of the land for almost 16 years reckoned from 1982, the time
when the land was declared alienable and disposable by the State.

The Republic’s Motion for Partial Reconsideration

The Republic seeks the partial reconsideration in order to obtain a clarification with reference to the
application of the rulings in Naguit and Herbieto.

Chiefly citing the dissents, the Republic contends that the decision has enlarged, by implication, the
interpretation of Section 14(1) of the Property Registration Decree through judicial legislation. It reiterates
its view that an applicant is entitled to registration only when the land subject of the application had been
declared alienable and disposable since June 12, 1945 or earlier.

Ruling

We deny the motions for reconsideration.

In reviewing the assailed decision, we consider to be imperative to discuss the different classifications of
land in relation to the existing applicable land registration laws of the Philippines.

Classifications of land according to ownership

Land, which is an immovable property,10 may be classified as either of public dominion or of private
ownership.11 Land is considered of public dominion if it either: (a) is intended for public use; or (b) belongs
to the State, without being for public use, and is intended for some public service or for the development
of the national wealth.12 Land belonging to the State that is not of such character, or although of such
character but no longer intended for public use or for public service forms part of the patrimonial property
of the State.13 Land that is other than part of the patrimonial property of the State, provinces, cities and
municipalities is of private ownership if it belongs to a private individual.

Pursuant to the Regalian Doctrine (Jura Regalia), a legal concept first introduced into the country from the
West by Spain through the Laws of the Indies and the Royal Cedulas,14 all lands of the public domain
belong to the State.15 This means that the State is the source of any asserted right to ownership of land,
and is charged with the conservation of such patrimony.16

All lands not appearing to be clearly under private ownership are presumed to belong to the State. Also,
public lands remain part of the inalienable land of the public domain unless the State is shown to have
reclassified or alienated them to private persons.17

Classifications of public lands

according to alienability
Whether or not land of the public domain is alienable and disposable primarily rests on the classification of
public lands made under the Constitution. Under the 1935 Constitution,18 lands of the public domain were
classified into three, namely, agricultural, timber and mineral.19 Section 10, Article XIV of the 1973
Constitution classified lands of the public domain into seven, specifically, agricultural, industrial or
commercial, residential, resettlement, mineral, timber or forest, and grazing land, with the reservation that
the law might provide other classifications. The 1987 Constitution adopted the classification under the
1935 Constitution into agricultural, forest or timber, and mineral, but added national parks.20 Agricultural
lands may be further classified by law according to the uses to which they may be devoted.21 The
identification of lands according to their legal classification is done exclusively by and through a positive act
of the Executive Department.22
Based on the foregoing, the Constitution places a limit on the type of public land that may be alienated.
Under Section 2, Article XII of the 1987 Constitution, only agricultural lands of the public domain may be
alienated; all other natural resources may not be.

Alienable and disposable lands of the State fall into two categories, to wit: (a) patrimonial lands of the
State, or those classified as lands of private ownership under Article 425 of the Civil Code,23 without
limitation; and (b) lands of the public domain, or the public lands as provided by the Constitution, but with
the limitation that the lands must only be agricultural. Consequently, lands classified as forest or timber,
mineral, or national parks are not susceptible of alienation or disposition unless they are reclassified as
agricultural.24 A positive act of the Government is necessary to enable such reclassification,25 and the
exclusive prerogative to classify public lands under existing laws is vested in the Executive Department, not
in the courts.26 If, however, public land will be classified as neither agricultural, forest or timber, mineral
or national park, or when public land is no longer intended for public service or for the development of the
national wealth, thereby effectively removing the land from the ambit of public dominion, a declaration of
such conversion must be made in the form of a law duly enacted by Congress or by a Presidential
proclamation in cases where the President is duly authorized by law to that effect.27 Thus, until the
Executive Department exercises its prerogative to classify or reclassify lands, or until Congress or the
President declares that the State no longer intends the land to be used for public service or for the
development of national wealth, the Regalian Doctrine is applicable.

Disposition of alienable public lands

Section 11 of the Public Land Act (CA No. 141) provides the manner by which alienable and disposable
lands of the public domain, i.e., agricultural lands, can be disposed of, to wit:

Section 11. Public lands suitable for agricultural purposes can be disposed of only as follows, and not
otherwise:

(1) For homestead settlement;

(2) By sale;

(3) By lease; and

(4) By confirmation of imperfect or incomplete titles;

(a) By judicial legalization; or

(b) By administrative legalization (free patent).

The core of the controversy herein lies in the proper interpretation of Section 11(4), in relation to Section
48(b) of the Public Land Act, which expressly requires possession by a Filipino citizen of the land since June
12, 1945, or earlier, viz:

Section 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 thereafter, under the Land Registration
Act, to wit:

xxxx
(b) Those who by themselves or through their predecessors-in-interest have been in open, continuous,
exclusive, and notorious possession and occupation of alienable and disposable lands of the public domain,
under a bona fide claim of acquisition of ownership, since June 12, 1945, or earlier, immediately preceding
the filing of the applications 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. (Bold emphasis
supplied)

Note that Section 48(b) of the Public Land Act used the words "lands of the public domain" or "alienable
and disposable lands of the public domain" to clearly signify that lands otherwise classified, i.e., mineral,
forest or timber, or national parks, and lands of patrimonial or private ownership, are outside the coverage
of the Public Land Act. What the law does not include, it excludes. The use of the descriptive phrase
"alienable and disposable" further limits the coverage of Section 48(b) to only the agricultural lands of the
public domain as set forth in Article XII, Section 2 of the 1987 Constitution. Bearing in mind such limitations
under the Public Land Act, the applicant must satisfy the following requirements in order for his
application to come under Section 14(1) of the Property Registration Decree,28 to wit:

1. The applicant, by himself or through his predecessor-in-interest, has been in possession and occupation
of the property subject of the application;

2. The possession and occupation must be open, continuous, exclusive, and notorious;

3. The possession and occupation must be under a bona fide claim of acquisition of ownership;

4. The possession and occupation must have taken place since June 12, 1945, or earlier; and

5. The property subject of the application must be an agricultural land of the public domain.

Taking into consideration that the Executive Department is vested with the authority to classify lands of
the public domain, Section 48(b) of the Public Land Act, in relation to Section 14(1) of the Property
Registration Decree, presupposes that the land subject of the application for registration must have been
already classified as agricultural land of the public domain in order for the provision to apply. Thus, absent
proof that the land is already classified as agricultural land of the public domain, the Regalian Doctrine
applies, and overcomes the presumption that the land is alienable and disposable as laid down in Section
48(b) of the Public Land Act. However, emphasis is placed on the requirement that the classification
required by Section 48(b) of the Public Land Act is classification or reclassification of a public land as
agricultural.

The dissent stresses that the classification or reclassification of the land as alienable and disposable
agricultural land should likewise have been made on June 12, 1945 or earlier, because any possession of
the land prior to such classification or reclassification produced no legal effects. It observes that the fixed
date of June 12, 1945 could not be minimized or glossed over by mere judicial interpretation or by judicial
social policy concerns, and insisted that the full legislative intent be respected.

We find, however, that the choice of June 12, 1945 as the reckoning point of the requisite possession and
occupation was the sole prerogative of Congress, the determination of which should best be left to the
wisdom of the lawmakers. Except that said date qualified the period of possession and occupation, no
other legislative intent appears to be associated with the fixing of the date of June 12, 1945. Accordingly,
the Court should interpret only the plain and literal meaning of the law as written by the legislators.

Moreover, an examination of Section 48(b) of the Public Land Act indicates that Congress prescribed no
requirement that the land subject of the registration should have been classified as agricultural since June
12, 1945, or earlier. As such, the applicant’s imperfect or incomplete title is derived only from possession
and occupation since June 12, 1945, or earlier. This means that the character of the property subject of the
application as alienable and disposable agricultural land of the public domain determines its eligibility for
land registration, not the ownership or title over it.

Alienable public land held by a possessor, either personally or through his predecessors-in-interest, openly,
continuously and exclusively during the prescribed statutory period is converted to private property by the
mere lapse or completion of the period.29 In fact, by virtue of this doctrine, corporations may now acquire
lands of the public domain for as long as the lands were already converted to private ownership, by
operation of law, as a result of satisfying the requisite period of possession prescribed by the Public Land
Act.30 It is for this reason that the property subject of the application of Malabanan need not be classified
as alienable and disposable agricultural land of the public domain for the entire duration of the requisite
period of possession.

To be clear, then, the requirement that the land should have been classified as alienable and disposable
agricultural land at the time of the application for registration is necessary only to dispute the presumption
that the land is inalienable.

The declaration that land is alienable and disposable also serves to determine the point at which
prescription may run against the State. The imperfect or incomplete title being confirmed under Section
48(b) of the Public Land Act is title that is acquired by reason of the applicant’s possession and occupation
of the alienable and disposable agricultural land of the public domain. Where all the necessary
requirements for a grant by the Government are complied with through actual physical, open, continuous,
exclusive and public possession of an alienable and disposable land of the public domain, the possessor is
deemed to have acquired by operation of law not only a right to a grant, but a grant by the Government,
because it is not necessary that a certificate of title be issued in order that such a grant be sanctioned by
the courts.31

If one follows the dissent, the clear objective of the Public Land Act to adjudicate and quiet titles to
unregistered lands in favor of qualified Filipino citizens by reason of their occupation and cultivation
thereof for the number of years prescribed by law32 will be defeated. Indeed, we should always bear in
mind that such objective still prevails, as a fairly recent legislative development bears out, when Congress
enacted legislation (Republic Act No. 10023)33 in order to liberalize stringent requirements and
procedures in the adjudication of alienable public land to qualified applicants, particularly residential lands,
subject to area limitations.34

On the other hand, if a public land is classified as no longer intended for public use or for the development
of national wealth by declaration of Congress or the President, thereby converting such land into
patrimonial or private land of the State, the applicable provision concerning disposition and registration is
no longer Section 48(b) of the Public Land Act but the Civil Code, in conjunction with Section 14(2) of the
Property Registration Decree.35 As such, prescription can now run against the State.

To sum up, we now observe the following rules relative to the disposition of public land or lands of the
public domain, namely:

(1) As a general rule and pursuant to the Regalian Doctrine, all lands of the public domain belong to the
State and are inalienable. Lands that are not clearly under private ownership are also presumed to belong
to the State and, therefore, may not be alienated or disposed;

(2) The following are excepted from the general rule, to wit:
(a) Agricultural lands of the public domain are rendered alienable and disposable through any of the
exclusive modes enumerated under Section 11 of the Public Land Act. If the mode is judicial confirmation
of imperfect title under Section 48(b) of the Public Land Act, the agricultural land subject of the application
needs only to be classified as alienable and disposable as of the time of the application, provided the
applicant’s possession and occupation of the land dated back to June 12, 1945, or earlier. Thereby, a
conclusive presumption that the applicant has performed all the conditions essential to a government
grant arises,36 and the applicant becomes the owner of the land by virtue of an imperfect or incomplete
title. By legal fiction, the land has already ceased to be part of the public domain and has become private
property.37

(b) Lands of the public domain subsequently classified or declared as no longer intended for public use or
for the development of national wealth are removed from the sphere of public dominion and are
considered converted into patrimonial lands or lands of private ownership that may be alienated or
disposed through any of the modes of acquiring ownership under the Civil Code. If the mode of acquisition
is prescription, whether ordinary or extraordinary, proof that the land has been already converted to
private ownership prior to the requisite acquisitive prescriptive period is a condition sine qua non in
observance of the law (Article 1113, Civil Code) that property of the State not patrimonial in character shall
not be the object of prescription.

To reiterate, then, the petitioners failed to present sufficient evidence to establish that they and their
predecessors-in-interest had been in possession of the land since June 12, 1945. Without satisfying the
requisite character and period of possession - possession and occupation that is open, continuous,
exclusive, and notorious since June 12, 1945, or earlier - the land cannot be considered ipso jure converted
to private property even upon the subsequent declaration of it as alienable and disposable. Prescription
never began to run against the State, such that the land has remained ineligible for registration under
Section 14(1) of the Property Registration Decree. Likewise, the land continues to be ineligible for land
registration under Section 14(2) of the Property Registration Decree unless Congress enacts a law or the
President issues a proclamation declaring the land as no longer intended for public service or for the
development of the national wealth.1âwphi1

WHEREFORE, the Court DENIES the petitioners' Motion for Reconsideration and the respondent's Partial
Motion for Reconsideration for their lack of merit.

SO ORDERED.
G.R. No. 144057 January 17, 2005

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
THE HONORABLE COURT OF APPEALS and CORAZON NAGUIT, respondents.

DECISION

TINGA, J.:

This is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure, seeking to
review the Decision1 of the Sixth Division of the Court of Appeals dated July 12, 2000 in CA-G.R. SP No.
51921. The appellate court affirmed the decisions of both the Regional Trial Court (RTC),2 Branch 8, of
Kalibo, Aklan dated February 26, 1999, and the 7th Municipal Circuit Trial Court (MCTC)3 of Ibajay-Nabas,
Aklan dated February 18, 1998, which granted the application for registration of a parcel of land of Corazon
Naguit (Naguit), the respondent herein.

The facts are as follows:

On January 5, 1993, Naguit, a Filipino citizen, of legal age and married to Manolito S. Naguit, filed with the
MCTC of Ibajay-Nabas, Aklan, a petition for registration of title of a parcel of land situated in Brgy. Union,
Nabas, Aklan. The parcel of land is designated as Lot No. 10049, Cad. 758-D, Nabas Cadastre, AP – 060414-
014779, and contains an area of 31,374 square meters. The application seeks judicial confirmation of
respondent’s imperfect title over the aforesaid land.

On February 20, 1995, the court held initial hearing on the application. The public prosecutor, appearing
for the government, and Jose Angeles, representing the heirs of Rustico Angeles, opposed the petition. On
a later date, however, the heirs of Rustico Angeles filed a formal opposition to the petition. Also on
February 20, 1995, the court issued an order of general default against the whole world except as to the
heirs of Rustico Angeles and the government.

The evidence on record reveals that the subject parcel of land was originally declared for taxation purposes
in the name of Ramon Urbano (Urbano) in 1945 under Tax Declaration No. 3888 until 1991.4 On July 9,
1992, Urbano executed a Deed of Quitclaim in favor of the heirs of Honorato Maming (Maming), wherein
he renounced all his rights to the subject property and confirmed the sale made by his father to Maming
sometime in 1955 or 1956.5 Subsequently, the heirs of Maming executed a deed of absolute sale in favor
of respondent Naguit who thereupon started occupying the same. She constituted Manuel Blanco, Jr. as
her attorney-in-fact and administrator. The administrator introduced improvements, planted trees, such as
mahogany, coconut and gemelina trees in addition to existing coconut trees which were then 50 to 60
years old, and paid the corresponding taxes due on the subject land. At present, there are parcels of land
surrounding the subject land which have been issued titles by virtue of judicial decrees. Naguit and her
predecessors-in-interest have occupied the land openly and in the concept of owner without any objection
from any private person or even the government until she filed her application for registration.

After the presentation of evidence for Naguit, the public prosecutor manifested that the government did
not intend to present any evidence while oppositor Jose Angeles, as representative of the heirs of Rustico
Angeles, failed to appear during the trial despite notice. On September 27, 1997, the MCTC rendered a
decision ordering that the subject parcel be brought under the operation of the Property Registration
Decree or Presidential Decree (P.D.) No. 1529 and that the title thereto registered and confirmed in the
name of Naguit.6
The Republic of the Philippines (Republic), thru the Office of the Solicitor General (OSG), filed a motion for
reconsideration. The OSG stressed that the land applied for was declared alienable and disposable only on
October 15, 1980, per the certification from Regional Executive Director Raoul T. Geollegue of the
Department of Environment and Natural Resources, Region VI.7 However, the court denied the motion for
reconsideration in an order dated February 18, 1998.81awphi1.nét

Thereafter, the Republic appealed the decision and the order of the MCTC to the RTC, Kalibo, Aklan,
Branch 8. On February 26, 1999, the RTC rendered its decision, dismissing the appeal.9

Undaunted, the Republic elevated the case to the Court of Appeals via Rule 42 of the 1997 Rules of Civil
Procedure. On July 12, 2000, the appellate court rendered a decision dismissing the petition filed by the
Republic and affirmed in toto the assailed decision of the RTC.

Hence, the present petition for review raising a pure question of law was filed by the Republic on
September 4, 2000.10

The OSG assails the decision of the Court of Appeals contending that the appellate court gravely erred in
holding that there is no need for the government’s prior release of the subject lot from the public domain
before it can be considered alienable or disposable within the meaning of P.D. No. 1529, and that Naguit
had been in possession of Lot No. 10049 in the concept of owner for the required period.11

Hence, the central question for resolution is whether is necessary under Section 14(1) of the Property
Registration Decree that the subject land be first classified as alienable and disposable before the
applicant’s possession under a bona fide claim of ownership could even start.

The OSG invokes our holding in Director of Lands v. Intermediate Appellate Court12 in arguing that the
property which is in open, continuous and exclusive possession must first be alienable. Since the subject
land was declared alienable only on October 15, 1980, Naguit could not have maintained a bona fide claim
of ownership since June 12, 1945, as required by Section 14 of the Property Registration Decree, since
prior to 1980, the land was not alienable or disposable, the OSG argues.

Section 14 of the Property Registration Decree, governing original registration proceedings, bears close
examination. It expressly provides:

SECTION 14. Who may apply.— The following persons may file in the proper Court of First Instance an
application for registration of title to land, whether personally or through their duly authorized
representatives:

(1) those who by themselves or through their predecessors-in-interest have been in open, continuous,
exclusive and notorious possession and occupation of alienable and disposable lands of the public domain
under a bona fide claim of ownership since June 12, 1945, or earlier.

(2) Those who have acquired ownership over private lands by prescription under the provisions of existing
laws.

....

There are three obvious requisites for the filing of an application for registration of title under Section
14(1) – that the property in question is alienable and disposable land of the public domain; that the
applicants by themselves or through their predecessors-in-interest have been in open, continuous,
exclusive and notorious possession and occupation, and; that such possession is under a bona fide claim of
ownership since June 12, 1945 or earlier.
Petitioner suggests an interpretation that the alienable and disposable character of the land should have
already been established since June 12, 1945 or earlier. This is not borne out by the plain meaning of
Section 14(1). "Since June 12, 1945," as used in the provision, qualifies its antecedent phrase "under a
bonafide claim of ownership." Generally speaking, qualifying words restrict or modify only the words or
phrases to which they are immediately associated, and not those distantly or remotely located.13 Ad
proximum antecedents fiat relation nisi impediatur sentencia.

Besides, we are mindful of the absurdity that would result if we adopt petitioner’s position. Absent a
legislative amendment, the rule would be, adopting the OSG’s view, that all lands of the public domain
which were not declared alienable or disposable before June 12, 1945 would not be susceptible to original
registration, no matter the length of unchallenged possession by the occupant. Such interpretation renders
paragraph (1) of Section 14 virtually inoperative and even precludes the government from giving it effect
even as it decides to reclassify public agricultural lands as alienable and disposable. The unreasonableness
of the situation would even be aggravated considering that before June 12, 1945, the Philippines was not
yet even considered an independent state.

Instead, the more reasonable interpretation of Section 14(1) is that it merely requires the property sought
to be registered as already alienable and disposable at the time the application for registration of title is
filed. If the State, at the time the application is made, has not yet deemed it proper to release the property
for alienation or disposition, the presumption is that the government is still reserving the right to utilize the
property; hence, the need to preserve its ownership in the State irrespective of the length of adverse
possession even if in good faith. However, if the property has already been classified as alienable and
disposable, as it is in this case, then there is already an intention on the part of the State to abdicate its
exclusive prerogative over the property.

This reading aligns conformably with our holding in Republic v. Court of Appeals .14 Therein, the Court
noted that "to prove that the land subject of an application for registration is alienable, an applicant must
establish the existence of a positive act of the government such as a presidential proclamation or an
executive order; an administrative action; investigation reports of Bureau of Lands investigators; and a
legislative act or a statute."15 In that case, the subject land had been certified by the DENR as alienable
and disposable in 1980, thus the Court concluded that the alienable status of the land, compounded by the
established fact that therein respondents had occupied the land even before 1927, sufficed to allow the
application for registration of the said property. In the case at bar, even the petitioner admits that the
subject property was released and certified as within alienable and disposable zone in 1980 by the
DENR.16

This case is distinguishable from Bracewell v. Court of Appeals,17 wherein the Court noted that while the
claimant had been in possession since 1908, it was only in 1972 that the lands in question were classified
as alienable and disposable. Thus, the bid at registration therein did not succeed. In Bracewell, the
claimant had filed his application in 1963, or nine (9) years before the property was declared alienable and
disposable.1awphi1.nét Thus, in this case, where the application was made years after the property had
been certified as alienable and disposable, the Bracewell ruling does not apply.

A different rule obtains for forest lands,18 such as those which form part of a reservation for provincial
park purposes19 the possession of which cannot ripen into ownership.20 It is elementary in the law
governing natural resources that forest land cannot be owned by private persons. As held in Palomo v.
Court of Appeals,21 forest land is not registrable and possession thereof, no matter how lengthy, cannot
convert it into private property, unless such lands are reclassified and considered disposable and
alienable.22 In the case at bar, the property in question was undisputedly classified as disposable and
alienable; hence, the ruling in Palomo is inapplicable, as correctly held by the Court of Appeals.23
It must be noted that the present case was decided by the lower courts on the basis of Section 14(1) of the
Property Registration Decree, which pertains to original registration through ordinary registration
proceedings. The right to file the application for registration derives from a bona fide claim of ownership
going back to June 12, 1945 or earlier, by reason of the claimant’s open, continuous, exclusive and
notorious possession of alienable and disposable lands of the public domain.

A similar right is given under Section 48(b) of the Public Land Act, which reads:

Sec. 48. The following described citizens of the Philippines, occupying lands of the public domain or
claiming to own any such land or an interest therein, but those 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.

When the Public Land Act was first promulgated in 1936, the period of possession deemed necessary to
vest the right to register their title to agricultural lands of the public domain commenced from July 26,
1894. However, this period was amended by R.A. No. 1942, which provided that the bona fide claim of
ownership must have been for at least thirty (30) years. Then in 1977, Section 48(b) of the Public Land Act
was again amended, this time by P.D. No. 1073, which pegged the reckoning date at June 12, 1945. This
new starting point is concordant with Section 14(1) of the Property Registration Decree.

Indeed, there are no material differences between Section 14(1) of the Property Registration Decree and
Section 48(b) of the Public Land Act, as amended. True, the Public Land Act does refer to "agricultural lands
of the public domain," while the Property Registration Decree uses the term "alienable and disposable
lands of the public domain." It must be noted though that the Constitution declares that "alienable lands of
the public domain shall be limited to agricultural lands."24 Clearly, the subject lands under Section 48(b) of
the Public Land Act and Section 14(1) of the Property Registration Decree are of the same type.

Did the enactment of the Property Registration Decree and the amendatory P.D. No. 1073 preclude the
application for registration of alienable lands of the public domain, possession over which commenced
only after June 12, 1945? It did not, considering Section 14(2) of the Property Registration Decree, which
governs and authorizes the application of "those who have acquired ownership of private lands by
prescription under the provisions of existing laws."

Prescription is one of the modes of acquiring ownership under the Civil Code.25 There is a consistent
jurisprudential rule that properties classified as alienable public land may be converted into private
property by reason of open, continuous and exclusive possession of at least thirty (30) years.26 With such
conversion, such property may now fall within the contemplation of "private lands" under Section 14(2),
and thus susceptible to registration by those who have acquired ownership through prescription. Thus,
even if possession of the alienable public land commenced on a date later than June 12, 1945, and such
possession being been open, continuous and exclusive, then the possessor may have the right to register
the land by virtue of Section 14(2) of the Property Registration Decree.
The land in question was found to be cocal in nature, it having been planted with coconut trees now over
fifty years old.27 The inherent nature of the land but confirms its certification in 1980 as alienable, hence
agricultural. There is no impediment to the application of Section 14(1) of the Property Registration
Decree, as correctly accomplished by the lower courts.l^vvphi1.net

The OSG posits that the Court of Appeals erred in holding that Naguit had been in possession in the
concept of owner for the required period. The argument begs the question. It is again hinged on the
assertion—shown earlier to be unfounded—that there could have been no bona fide claim of ownership
prior to 1980, when the subject land was declared alienable or disposable.

We find no reason to disturb the conclusion of both the RTC and the Court of Appeals that Naguit had the
right to apply for registration owing to the continuous possession by her and her predecessors-in-interest
of the land since 1945. The basis of such conclusion is primarily factual, and the Court generally respects
the factual findings made by lower courts. Notably, possession since 1945 was established through proof of
the existence of 50 to 60-year old trees at the time Naguit purchased the property as well as tax
declarations executed by Urbano in 1945. Although tax declarations and realty tax payment of property are
not conclusive evidence of ownership, nevertheless, they are good indicia of the possession in the concept
of owner for no one in his right mind would be paying taxes for a property that is not in his actual or at
least constructive possession. They constitute at least proof that the holder has a claim of title over the
property. The voluntary declaration of a piece of property for taxation purposes manifests not only one’s
sincere and honest desire to obtain title to the property and announces his adverse claim against the State
and all other interested parties, but also the intention to contribute needed revenues to the Government.
Such an act strengthens one’s bona fide claim of acquisition of ownership.28

Considering that the possession of the subject parcel of land by the respondent can be traced back to that
of her predecessors-in-interest which commenced since 1945 or for almost fifty (50) years, it is indeed
beyond any cloud of doubt that she has acquired title thereto which may be properly brought under the
operation of the Torrens system. That she has been in possession of the land in the concept of an owner,
open, continuous, peaceful and without any opposition from any private person and the government itself
makes her right thereto undoubtedly settled and deserving of protection under the law.

WHEREFORE, foregoing premises considered, the assailed Decision of the Court of Appeals dated July 12,
2000 is hereby AFFIRMED. No costs.

SO ORDERED.