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Finals: Property Cases

Lykah Honra
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[G.R. No. 149295. September 23, 2003]
PHILIPPINE NATIONAL BANK, petitioner, vs. GENEROSO DE JESUS, represented by his
Attorney-in-Fact, CHRISTIAN DE JESUS, respondent.
D E C I S I O N
VITUG, J .:
Petitioner Philippine National Bank disputes the decision handed down by the Court of Appeals
promulgated on 23 March 2001 in CA-G.R. CV No. 56001, entitled “Generoso De Jesus,
represented by his Attorney-in-Fact, Christian De Jesus, versus Philippine National Bank.” The
assailed decision has affirmed the judgment rendered by the Regional Trial Court, Branch 44, of
Mamburao, Occidental Mindoro, declaring respondent Generoso de Jesus as being the true and
lawful owner of the 124-square-meter portion of the land covered by Transfer Certificate of Title
(TCT) No. T-17197 and ordering petitioner bank to vacate the premises, to deliver possession
thereof to respondent, and to remove the improvement thereon.
It would appear that on 10 June 1995, respondent filed a complaint against petitioner before the
Regional Trial Court of Occidental Mindoro for recovery of ownership and possession, with
damages, over the questioned property. In his complaint, respondent stated that he had acquired
a parcel of land situated in Mamburao, Occidental Mindoro, with an area of 1,144 square meters
covered by TCT No. T-17197, and that on 26 March 1993, he had caused a verification survey of
the property and discovered that the northern portion of the lot was being encroached upon by a
building of petitioner to the extent of 124 square meters. Despite two letters of demand sent by
respondent, petitioner failed and refused to vacate the area.
Petitioner, in its answer, asserted that when it acquired the lot and the building sometime in 1981
from then Mayor Bienvenido Ignacio, the encroachment already was in existence and to remedy
the situation, Mayor Ignacio offered to sell the area in question (which then also belonged to
Ignacio) to petitioner at P100.00 per square meter which offer the latter claimed to have
accepted. The sale, however, did not materialize when, without the knowledge and consent of
petitioner, Mayor Ignacio later mortgaged the lot to the Development Bank of the Philippines.
The trial court decided the case in favor of respondent declaring him to be the rightful owner of
the disputed 124-square-meter portion of the lot and ordering petitioner to surrender possession
of the property to respondent and to cause, at its expense, the removal of any improvement
thereon.
The Court of Appeals, on appeal, sustained the trial court but it ordered to be deleted the award
to respondent of attorney‟s fees, as well as moral and exemplary damages, and litigation
expenses.
Petitioner went to this Court, via a petition for review, after the appellate court had denied the
bank‟s motion for reconsideration, here now contending that -
“1. THE COURT OF APPEALS GRAVELY ERRED IN LAW IN ADJUDGING PNB A BUILDER IN
BAD FAITH OVER THE ENCROACHED PROPERTY IN QUESTION;
“2. THE COURT OF APPEALS GRAVELY ERRED IN LAW IN NOT APPLYING IN FAVOR OF PNB
THE PROVISION OF ARTICLE 448 OF THE CIVIL CODE AND THE RULING IN TECNOGAS
PHILIPPINES MANUFACTURING CORP. VS. COURT OF APPEALS, G.R. No. 108894, February 10,
1997, 268 SCRA 7.”
[if !supportFootnotes][1][endif]

The Regional Trial Court and the Court of Appeals have both rejected the idea that petitioner can
be considered a builder in good faith. In the context that such term is used in particular reference
to Article 448, et seq., 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.
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.”
“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.”
A builder in good faith can, under the foregoing provisions, 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.
[if !supportFootnotes][2][endif]
Even as the option lies with the landowner, the grant to him,
nevertheless, is preclusive. He much choose one. He cannot, for instance, compel the owner of
the building to instead remove it from the land.
[if !supportFootnotes][3][endif]
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.
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.
[if !supportFootnotes][4][endif]
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.
[if !supportFootnotes][5][endif]
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.
[if !supportFootnotes][6][endif]

Given the findings of both the trial court and the appellate court, it should be evident enough that
petitioner would fall much too short from its claim of good faith. Evidently, petitioner was quite
aware, and indeed advised, prior to its acquisition of the land and building from Ignacio that a part
of the building sold to it stood on the land not covered by the land conveyed to it.
Equally significant is the fact that the building, constructed on the land by Ignacio, has in actuality
been part of the property transferred to petitioner. Article 448, of the Civil Code refers to a piece
of land whose ownership is claimed by two or more parties, one of whom has built some works
(or sown or planted something) and not to a case where the owner of the land is the builder,
sower, or planter who then later loses ownership of the land by sale or otherwise for,
elsewise stated, “where the true owner himself is the builder of works on his own land, the
issue of good faith or bad faith is entirely irrelevant.”
[if !supportFootnotes][7][endif]

In fine, petitioner is not in a valid position to invoke the provisions of Article 448 of the Civil
Code. The Court commiserates with petitioner in its present predicament; upon the other hand,
respondent, too, is entitled to his rights under the law, particularly after having long been deprived
of the enjoyment of his property. Nevertheless, the Court expresses hope that the parties will still
be able to come up with an arrangement that can be mutually suitable and acceptable to them.
WHEREFORE, the decision of the Court of Appeals in CA-G.R. CV No. 56001 is
AFFIRMED. No costs.
SO ORDERED.
Finals: Property Cases
Lykah Honra
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G.R. No. 168747 October 19, 2007
VICTORIA REGNER, Petitioner,
vs.
CYNTHIA R. LOGARTA, TERESA R. TORMIS and CEBU COUNTRY CLUB, Inc.,
Respondents.
D E C I S I O N
CHICO-NAZARIO, J .:

This Petition for Review on Certiorari seeks to reverse the Decision
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dated 6 May 2005 of the
Court of Appeals in CA-G.R. CV No. 71028 entitled, "Victoria Regner v. Cynthia Logarta, Teresa
R. Tormis and Cebu Country Club, Inc.," which affirmed the Order dated 9 November 2000 of the
Regional Trial Court (RTC) of Cebu, granting herein respondents‟ motion to dismiss Civil Case
No. CEB 23927. The Order dated 9 November 2000 of the RTC dismissed herein petitioner‟s
complaint for declaration of nullity of a deed of donation, for failure to serve summons on Cynthia
Logarta, an indispensable party therein.

Civil Case No. CEB. 23927 arose from the following factual antecedents:

Luis Regner (Luis) had three daughters with his first wife, Anicita C. Regner, namely, Cynthia
Logarta (Cynthia) and Teresa Tormis (Teresa), the respondents herein, and Melinda Regner-
Borja (Melinda).

Herein petitioner Victoria Regner (Victoria) is the second wife of Luis.
During the lifetime of Luis, he acquired several properties, among which is a share at Cebu
Country Club Inc., evidenced by Proprietary Ownership Certificate No. 0272. On 15 May 1998,
Luis executed a Deed
2
of Donation in favor of respondents Cynthia and Teresa covering
Proprietary Ownership Certificate No. 0272 of the Cebu Country Club, Inc.
Luis passed away on 11 February 1999.

On 15 June 1999, Victoria filed a Complaint
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for Declaration of Nullity of the Deed of Donation
with Prayer for Issuance of a Writ of Preliminary Injunction and Temporary Restraining Order
against Cynthia and Teresa with the RTC, docketed as Civil Case No. CEB. 23927. Victoria
alleged in her complaint that: on 17 March 1997, Luis made a written declaration wherein he
stated that due to his illness and forgetfulness, he would not sign any document without the
knowledge of his lawyer, Atty. Francis Zosa; on 15 May 1998, when Luis was already very ill and
no longer of sound and disposing mind, Cynthia and Teresa , conspiring and confederating with
each other, fraudulently made or caused to be fraudulently made a Deed of Donation whereby
they made it appear that Luis donated to them Proprietary Ownership Certificate No. 0272; since
Luis no longer had the ability to write or affix his signature, Melinda, acting under the influence of
her sisters, Cynthia and Teresa, fraudulently manipulated the hand of Luis so that he could affix
his thumbmark on the assailed Deed of Donation; on 8 February 1998, or three days before the
death of Luis, and when he was already in comatose condition at the Cebu Doctors‟ Hospital,
Melinda, Teresa, and Cynthia caused the preparation of an affidavit to the effect that Luis
affirmed the Deed of Donation he allegedly executed earlier by lifting his hand to affix his
thumbmark on the said affidavit.

Sheriff Melchor A. Solon served the summonses on Cynthia and Teresa at the Borja Family Clinic
in Tagbilaran City wherein Melinda worked as a doctor, but Melinda refused to receive the
summonses for her sisters and informed the sheriff that their lawyer, Atty. Francis Zosa, would be
the one to receive the same.

Upon her arrival in the Philippines, on 1 June 2000, Teresa was personally served the summons
at Room 304, Regency Crest Condominium, Banilad, Cebu City. She filed her Answer
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with
counterclaim with the RTC on 6 June 2000.

Subsequently, on 12 September 2002, Teresa filed a motion to dismiss Civil Case No. CEB
23927 because of petitioner‟s failure to prosecute her action for an unreasonable length of time.
Petitioner opposed
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the motion and filed her own motion to set the case for pre-trial, to which
Teresa filed her rejoinder on the ground that their sister, Cynthia, an indispensable party, had not
yet been served a summons. Thus, Teresa prayed for the dismissal of petitioner‟s complaint, as
the case would not proceed without Cynthia‟s presence.

On 9 November 2000, the RTC issued an Order
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granting respondent Teresa‟s motion to dismiss,
pertinent portions of which read:

Considering that the donees in the Deed of Donation are Cynthia R. Logarta and Teresa R.
Tormis, they are therefore an (sic) indispensable party (sic). In the case of Quisumbing vs. Court
of Appeals, 189 SCRA 325, indispensable parties are those with such an interest in the
controversy that a final decree would necessarily affect their rights so that the court could not
proceed without their presence

Wherefore, in view of the foregoing, the instant case is hereby dismissed without prejudice.
A motion for reconsideration was filed by petitioner, but the same was denied in an Order dated
14 February 2001.

Aggrieved, petitioner appealed to the Court of Appeals. On 6 May 2005, the Court of Appeals
rendered a Decision denying the appeal and affirming in toto the order of dismissal of the
complaint by the RTC and the denial of the motion for reconsideration thereof. The Court of
Appeals ratiocinated that petitioner‟s failure to move for an extraterritorial service of summons
constitutes failure to prosecute for an unreasonable length of time, thus:

[T]he plaintiff-appellant [Victoria Regner] should have moved for the extraterritorial service of
summons for both defendants-appellees Teresa R. Tormis and Cynthia R. Logarta as they were
not residing and were not found in the Philippines when plaintiff-appellant [Victoria Regner] filed
this case below. Although defendant-appellant Teresa Tormis was personally served with
summons on June 1, 2000 when she came to the Philippines but the same was only effected
after a long wait or after the lapse of almost one year from the date the complaint was filed on
June 15, 1999. To allow this practice would be to make the continuation of like proceedings
before the courts dependent on when the defendants would be personally served with summons
by the time they would come to the Philippines, which would only unnecessarily delay the
proceedings and clog the court dockets as well. The afore-cited rule was precisely crafted to meet
situations similar to the present case to avoid unnecessary delays.

It has to be emphasized that it is incumbent upon the plaintiff [Victoria Regner] to move with leave
of court for the extraterritorial service of summons. Taking into account the considerable time that
had elapsed from the filing of the complaint on June 15, 1999 until defendant-appellee Teresa R.
Tormis, through counsel, filed a motion to dismiss on September 12, 2000, or approximately
fifteen (15) months, without any act on the part of plaintiff-appellant [Victoria Regner] to move for
extraterritorial service of summons upon the person of defendant-appellee Cynthia Logarta
renders plaintiff-appellant‟s [Victoria Regner] complaint dismissible for failure to prosecute her
action for unreasonable length of time under Section 3, Rule 17, Revised Rules of Court, x x x.
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Hence, this appeal via petition
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for review on certiorari filed by petitioner raising the following
assignment of errors:

THE COURT OF APPEALS ERRED IN HOLDING THAT THE DELAY IN SERVING SUMMONS
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ON ONE OF THE DEFENDANTS CONSTITUTES A FAILURE TO PROSECUTE
NOTWITHSTANDING THAT THE REST OF THE CO-DEFENDANTS WERE DULY SERVED
WITH SUMMONSES

THE COURT OF APPEALS ERRED IN NOT CONSIDERING THAT THE ANSWER FILED BY
ONE INDIVIDUAL DEFENDANT REDOUNDS TO THE BENEFIT OF THE OTHER DEFENDANT
WHO HAS NOT BEEN SERVED WITH SUMMONS, THE NATURE OF ACTION BEING
ADMITTEDLY COMMON AMONG ALL DEFENDANTS.
9

From the foregoing, this Court identifies the issues to be resolved in this petition as: (1) Whether
a co-donee is an indispensable party in an action to declare the nullity of the deed of donation,
and (2) whether delay in the service of summons upon one of the defendants constitutes failure to
prosecute that would warrant dismissal of the complaint.

A Court must acquire jurisdiction over the persons of indispensable parties before it can validly
pronounce judgments personal to the parties. Courts acquire jurisdiction over a party plaintiff
upon the filing of the complaint. On the other hand, jurisdiction over the person of a party
defendant is assured upon the service of summons in the manner required by law or otherwise by
his voluntary appearance. As a rule, if a defendant has not been summoned, the court acquires
no jurisdiction over his person, and a personal judgment rendered against such defendant is null
and void.
10
A decision that is null and void for want of jurisdiction on the part of the trial court is
not a decision in the contemplation of law and, hence, it can never become final and executory.
11

Rule 3, Section 7 of the Rules of Court, defines indispensable parties as parties-in-interest
without whom there can be no final determination of an action. As such, they must be joined
either as plaintiffs or as defendants. The general rule with reference to the making of parties in a
civil action requires, of course, the joinder of all necessary parties where possible, and the joinder
of all indispensable parties under any and all conditions, their presence being a sine qua non for
the exercise of judicial power.
12
It is precisely "when an indispensable party is not before the court
[that] the action should be dismissed."
13
The absence of an indispensable party renders all
subsequent actions of the court null and void for want of authority to act, not only as to the absent
parties but even as to those present.
14

As we ruled in Alberto v. Mananghala
15
:

In an action for recovery of property against a person who purchased it from another who in turn
acquired it from others by the same means or by donation or otherwise, the predecessors of
defendants are indispensable parties if the transfers, if not voided, may bind plaintiff. (Garcia vs.
Reyes, 17 Phil. 127.) In the latter case, this Court held:

In order to bring this suit duly to a close, it is imperative to determine the only question raised in
connection with the pending appeal, to wit, whether all the persons who intervened in the matter
of the transfers and donation herein referred to, are or are not necessary parties to this suit, since
it is asked in the complaint that the said transfers and donation be declared null and void – an
indispensable declaration for the purpose, in a proper case, of concluding the plaintiff to be the
sole owner of the house in dispute.

If such a declaration of annulment can directly affect the persons who made and who were
concerned in the said transfers, nothing could be more proper and just than to hear them in the
litigation, as parties interested in maintaining the validity of those transactions, and therefore,
whatever be the nature of the judgment rendered, Francisco Reyes, Dolores Carvajal, Alfredo
Chicote, Vicente Miranda, and Rafael Sierra, besides the said minors, must be included in the
case as defendants." (Garcia vs. Reyes, 17 Phil., 130-131.)

It takes no great degree of legal sophistication to realize that Cynthia and Teresa are
indispensable parties to Civil Case No. CEB 23927. Cynthia and Teresa allegedly derived their
rights to the subject property by way of donation from their father Luis. The central thrust of the
petitioner‟s complaint in Civil Case No. CEB 23927 was that Luis could not have donated
Proprietary Ownership Certificate No. 0272 to his daughters Cynthia and Teresa, as Luis was
already very ill and no longer of sound and disposing mind at the time of donation on 15 May
1997. Accordingly, the prayer in petitioner‟s complaint was for the trial court to declare null and
void the Deed of Donation and to restrain the Cebu Country Club, Inc. from transferring title and
ownership of Proprietary Ownership Certificate No. 0272 to Cynthia and Teresa.

Thus, based on the Deed of Donation, Teresa and Cynthia are co-owners of Proprietary
Membership Certificate No. 0272 of Cebu Country Club, Inc. The country club membership
certificate is undivided and it is impossible to pinpoint which specific portion of the property
belongs to either Teresa or Cynthia. Indeed, both Teresa and Cynthia are indispensable parties in
Civil Case No. CEB 23927.

An indispensable party has been defined as follows:

An indispensable party is a party who has such an interest in the controversy or subject matter
that a final adjudication cannot be made, in his absence, without injuring or affecting that interest,
a party who has not only an interest in the subject matter of the controversy, but also has an
interest of such nature that a final decree cannot be made without affecting his interest or leaving
the controversy in such a condition that its final determination may be wholly inconsistent with
equity and good conscience. It has also been considered that an indispensable party is a person
in whose absence there cannot be a determination between the parties already before the court
which is effective, complete, or equitable. Further, an indispensable party is one who must be
included in an action before it may properly go forward.

A person is not an indispensable party, however, if his interest in the controversy or subject
matter is separable from the interest of the other parties, so that it will not necessarily be directly
or injuriously affected by a decree which does complete justice between them. Also, a person is
not an indispensable party if his presence would merely permit complete relief between him and
those already parties to the action, or if he has no interest in the subject matter of the action. It is
not a sufficient reason to declare a person to be an indispensable party that his presence will
avoid multiple litigation.
16

In Servicewide Specialists, Incorporated v. Court of Appeals,
17
this Court held that no final
determination of a case could be made if an indispensable party is not legally present therein:
An indispensable party is one whose interest will be affected by the court‟s action in the litigation,
and without whom no final determination of the case can be had. The party‟s interest in the
subject matter of the suit and in the relief sought are so inextricably intertwined with the other
parties that his legal presence as a party to the proceeding is an absolute necessity. In his
absence there cannot be a resolution of the dispute of the parties before the court which is
effective, complete, or equitable.

The rationale for treating all the co-owners of a property as indispensable parties in a suit
involving the co-owned property is explained in Arcelona v. Court of Appeals
18
:

As held by the Supreme Court, were the courts to permit an action in ejectment to be maintained
by a person having merely an undivided interest in any given tract of land, a judgment in favor of
the defendants would not be conclusive as against the other co-owners not parties to the suit,
and thus the defendant in possession of the property might be harassed by as many succeeding
actions of ejectment, as there might be co-owners of the title asserted against him. The purpose
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Lykah Honra
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of this provision was to prevent multiplicity of suits by requiring the person asserting a right
against the defendant to include with him, either as co-plaintiffs or as co-defendants, all persons
standing in the same position, so that the whole matter in dispute may be determined once and
for all in one litigation.

Applying the foregoing definitions and principles to the present case, this Court finds that any
decision in Civil Case No. CEB 23927 cannot bind Cynthia, and the Court cannot nullify the
donation of the property she now co-owns with Teresa, even if limited only to the portion
belonging to Teresa, to whom summons was properly served, since ownership of the property is
still pro indiviso. Obviously, Cynthia is an indispensable party in Civil Case No. CEB 23927
without whom the lower court is barred from making a final adjudication as to the validity of the
entire donation. Without the presence of indispensable parties to a suit or proceeding, a judgment
therein cannot attain finality.
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Being an indispensable party in Civil Case No. CEB 23927, the trial court must also acquire
jurisdiction over Cynthia‟s person through the proper service of summons.

Based on the foregoing disquisitions, the issue of whether the answer filed by Teresa should
benefit Cynthia who was not served summons need not be discussed.

As to determine whether Cynthia was properly served a summons, it will be helpful to determine
first the nature of the action filed against Cynthia and Teresa by petitioner Victoria, whether it is
an action in personam, in rem or quasi in rem. This is because the rules on service of summons
embodied in Rule 14 apply according to whether an action is one or the other of these actions.
In a personal action, the plaintiff seeks the recovery of personal property, the enforcement of a
contract or the recovery of damages.
20
In contrast, in a real action, the plaintiff seeks the recovery
of real property; or, as indicated in Section 2(a), Rule 4 of the then Rules of Court, a real action is
an action affecting title to real property or for the recovery of possession, or for partition or
condemnation of, or foreclosure of mortgage on, real property. An action in personam is an action
against a person on the basis of his personal liability, while an action in rem is an action against
the thing itself, instead of against the person.
21

In an action in personam, personal service of summons or, if this is not possible and he cannot be
personally served, substituted service, as provided in Section 7, Rule 14 of the Rules of Court,
22

is essential for the acquisition by the court of jurisdiction over the person of a defendant who does
not voluntarily submit himself to the authority of the court.
23
If defendant cannot be served a
summons because he is temporarily abroad, but is otherwise a Philippine resident, service of
summons may, by leave of court, be made by publication.
24
Otherwise stated, a resident
defendant in an action in personam, who cannot be personally served a summons, may be
summoned either by means of substituted service in accordance with Section 7, Rule 14 of the
Rules of Court, or by publication as provided in Sections 15 and 16 of the same Rule.
In all of these cases, it should be noted, defendant must be a resident of the Philippines;
otherwise an action in personam cannot be brought because jurisdiction over his person is
essential to make a binding decision.

On the other hand, if the action is in rem or quasi in rem, jurisdiction over the person of the
defendant is not essential for giving the court jurisdiction so long as the court acquires jurisdiction
over the res. If the defendant is a nonresident and he is not found in the country, summons may
be served extraterritorially in accordance with Section 15, Rule 14 of the Rules of Court, which
provides:

Section 15. Extraterritorial service. - When the defendant does not reside and is not found in the
Philippines, and the action affects the personal status of the plaintiff or relates to, or the subject of
which is, property within the Philippines, in which the defendant has or claims a lien or interest,
actual or contingent, or in which the relief demanded consists, wholly or in part, in excluding the
defendant from any interest therein, or the property of the defendant has been attached within the
Philippines, service may, by leave of court, be effected out of the Philippines by personal service
as under Section 6; or by publication in a newspaper of general circulation in such places and for
such time as the court may order, in which case a copy of the summons and order of the court
shall be sent by registered mail to the last known address of the defendant, or in any other
manner the court may deem sufficient. Any order granting such leave shall specify a reasonable
time, which shall not be less than sixty (60) days after notice, within which the defendant must
answer.

As stated above, there are only four instances wherein a defendant who is a non-resident and is
not found in the country may be served a summons by extraterritorial service, to wit: (1) when the
action affects the personal status of the plaintiff; (2) when the action relates to, or the subject of
which is property within the Philippines, on which the defendant claims a lien or an interest, actual
or contingent; (3) when the relief demanded in such action consists, wholly or in part, in excluding
the defendant from any interest in property located in the Philippines; and (4) when the defendant
non-resident‟s property has been attached within the Philippines. In these instances, service of
summons may be effected by (a) personal service out of the country, with leave of court; (b)
publication, also with leave of court; or (c) any other manner the court may deem sufficient.
25

In such cases, what gives the court jurisdiction in an action in rem or quasi in rem is that it has
jurisdiction over the res, i.e., the personal status of the plaintiff who is domiciled in the Philippines
or the property litigated or attached. Service of summons in the manner provided in Section 15,
Rule 14 of the Rules of Court is not for the purpose of vesting the court with jurisdiction, but for
complying with the requirements of fair play or due process, so that the defendant will be
informed of the pendency of the action against him; and the possibility that property in the
Philippines belonging to him, or in which he has an interest, might be subjected to a judgment in
favor of the plaintiff and he can thereby take steps to protect his interest if he is so minded.
26

In petitioner‟s Complaint in Civil Case No. CEB No. 23427, she alleged that Cynthia is residing at
462 West Vine No. 201, Glendale, California, 912041, U.S.A.; while Teresa is residing at 2408
South Hacienda Boulevard, Hacienda Heights, California, but they usually visit here in the
Philippines and can be served summonses and other processes at the Borja Family Clinic, Bohol.
Pertinent portions of the Complaint read:

2. Defendant Cynthia R. Logarta is a Filipino, of legal age, married to Ramon Logarta, resident
(sic) 463 West Vine No.201, Glendale, California, 912041, USA. She however usually visits in the
Philippines and can be served with summons and other processes of this Honorable Court at
Borja Family Clinic, Tagbilaran, Bohol;

3. Defendant Teresa R. Tormis is likewise a Filipino, of legal age, married to Antonio Tormis, and
a resident of 2408 South Hacienda Heights, California, 19745, U.S.A. She however usually visits
in the Philippines and can be served with summons and other processes of this Honorable Court
at Borja Family Clinic, Tagbilaran, Bohol.
27

Petitioner prayed for a declaration of nullity of the deed of donation, to restrain Cebu Country
Club, Inc. from transferring title and ownership of Proprietary Ownership Certificate No. 0272 to
Cynthia and Teresa, and for moral and exemplary damages. Civil Case No. CEB 23927 is
evidently an action against Cynthia and Teresa on the basis of their personal liability for the
alleged fraudulent transfer of the subject Country Club membership from Luis to their name. In
this sense, petitioner questions the participation and shares of Cynthia and Teresa in the
transferred Country Club membership. Moreover, the membership certificate from the Cebu
Country Club, Inc. is a personal property. Thus, the action instituted by petitioner before the RTC
is in personam.

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Being an action in personam, the general rule requires the personal service of summons on
Cynthia within the Philippines, but this is not possible in the present case because Cynthia is a
non-resident and is not found within the Philippines.

As Cynthia is a nonresident who is not found in the Philippines, service of summons on her must
be in accordance with Section 15, Rule 14 of the Rules of Court. Such service, to be effective
outside the Philippines, must be made either (1) by personal service; (2) by publication in a
newspaper of general circulation in such places and for such time as the court may order, in
which case a copy of the summons and order of the court should be sent by registered mail to the
last known address of the defendant; or (3) in any other manner which the court may deem
sufficient. The third mode, like the first two, must be made outside the Philippines, such as
through the Philippine Embassy in the foreign country where Cynthia resides.

Since in the case at bar, the service of summons upon Cynthia was not done by any of the
authorized modes, the trial court was correct in dismissing petitioner‟s complaint.

Section 3, Rule 17 of the 1997 Rules of Civil Procedure, states –

SEC. 3. Dismissal due to fault of plaintiff. – If, for no justifiable cause, the plaintiff fails to appear
on the date of the presentation of his evidence in chief on the complaint, or to prosecute his
action for an unreasonable length of time, or to comply with these Rules or any order of the court,
the complaint may be dismissed upon motion of the defendant or upon the court's own motion,
without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a
separate action. This dismissal shall have the effect of an adjudication upon the merits, unless
otherwise declared by the court.

As can be gleaned from the rule, there are three instances when the complaint may be dismissed
due to the plaintiff's fault: (1) if he fails to appear during a scheduled trial, especially on the date
for the presentation of his evidence in chief; (2) if he fails to prosecute his action for an
unreasonable length of time; and (3) if he fails to comply with the rules or any order of the court.
28

Considering the circumstances of the case, it can be concluded that the petitioner failed to
prosecute the case for an unreasonable length of time. There is failure to prosecute when the
plaintiff, being present, is not ready or is unwilling to proceed with the scheduled trial or when
postponements in the past were due to the plaintiff's own making, intended to be dilatory or
caused substantial prejudice on the part of the defendant.
29

While a court can dismiss a case on the ground of failure to prosecute, the true test for the
exercise of such power is whether, under the prevailing circumstances, the plaintiff is culpable for
want of due diligence in failing to proceed with reasonable promptitude.
30
As to what constitutes
an "unreasonable length of time," within the purview of the above-quoted provision, the Court has
ruled that it "depends upon the circumstances of each particular case," and that "the sound
discretion of the court" in the determination of said question "will not be disturbed, in the absence
of patent abuse"; and that "the burden of showing abuse of judicial discretion is upon the
appellant since every presumption is in favor of the correctness of the court's action."
31
Likewise,
the concept of promptness is a relative term and must not unnecessarily be an inflexible one. It
connotes an action without hesitation and loss of time. As to what constitutes the term is
addressed to the consideration of the trial court, bearing in mind that while actions must be
disposed of with dispatch, the essential ingredient is the administration of justice and not mere
speed.
32

It is well to quote the doctrine laid in Padua v. Ericta,
33
as accentuated in the subsequent case
Marahay v. Melicor
34
:

Courts should not brook undue delays in the ventilation and determination of causes. It should be
their constant effort to assure that litigations are prosecuted and resolved with dispatch.
Postponements of trials and hearings should not be allowed except on meritorious grounds; and
the grant or refusal thereof rests entirely in the sound discretion of the Judge. It goes without
saying, however, that discretion must be reasonably and wisely exercised, in the light of the
attendant circumstances. Some reasonable deferment of the proceedings may be allowed or
tolerated to the end that cases may be adjudged only after full and free presentation of evidence
by all the parties, especially where the deferment would cause no substantial prejudice to any
part. The desideratum of a speedy disposition of cases should not, if at all possible, result in the
precipitate loss of a party‟s right to present evidence and either in plaintiff's being non-suited or
the defendant's being pronounced liable under an ex parte judgment.

"[T]rial courts have x x x the duty to dispose of controversies after trial on the merits whenever
possible. It is deemed an abuse of discretion for them, on their own motion, „to enter a dismissal
which is not warranted by the circumstances of the case‟ (Municipality of Dingras v. Bonoan, 85
Phil. 458-59 [1950]). While it is true that the dismissal of an action on grounds specified under
Section 3, Rule 17 of the Revised Rules of Court is addressed to their discretion (Flores v. Phil.
Alien Property Administrator, 107 Phil. 778 [1960]; Montelibano v. Benares, 103 Phil. 110 [1958];
Adorable v. Bonifacio, 105 Phil. 1269 [1959]; Inter-Island Gas Service, Inc. v. De la Gerna, L-
17631, October 19, 1966, 18 SCRA 390), such discretion must be exercised soundly with a view
to the circumstances surrounding each particular case (Vernus-Sanciangco v. Sanciangco, L-
12619, April 28, 1962, 4 SCRA 1209). If facts obtain that serve as mitigating circumstances for
the delay, the same should be considered and dismissal denied or set aside (Rudd v. Rogerson,
15 ALR 2d 672; Cervi v. Greenwood, 147 Colo. 190, 362 P.2d 1050 [1961]), especially where the
suit appears to be meritorious and the plaintiff was not culpably negligent and no injury results to
defendant (27 C.J.S. 235-36; 15 ALR 3rd 680)." (Abinales vs. Court of First Instance of
Zamboanga City, Br. I, 70 SCRA 590, 595).

"It is true that the allowance or denial of petitions for postponement and the setting aside of
orders previously issued, rest principally upon the sound discretion of the judge to whom they are
addressed, but always predicated on the consideration that more than the mere convenience of
the courts or of the parties of the case, the ends of justice and fairness would be served thereby
(Camara Vda. de Zubiri v. Zubiri, et al., L-16745, December 17, 1966). When no substantial rights
are affected and the intention to delay is not manifest, the corresponding motion to transfer the
hearing having been filed accordingly, it is sound judicial discretion to allow them (Rexwell Corp.
v. Canlas, L-16746, December 30, 1961)." x x x.

This Court recalls that the complaint herein was filed on 15 June 1999. The summonses for
Cynthia and Teresa were served on their sister Melinda at the Borja Family Clinic in Tagbilaran
City, but the latter refused to receive the same. It was only on 1 June 2000 that summons was
served on Teresa at Room 304, Regency Crest Condominium, Banilad, Cebu City, when she was
in the Philippines for a visit. However, the summons for Cynthia was never served upon
her.1âwphi1

Although Section 1, Rule 14 of the Rules, imposes upon the clerk of court the duty to serve
summons, this does not relieve the petitioner of her own duty as the plaintiff in a civil case to
prosecute the case diligently. If the clerk had been negligent, it was petitioner‟s duty to call the
court‟s attention to that fact. It must be noted that it was not even petitioner who called the court‟s
attention that summons had not been served on Cynthia, but Teresa. This despite the fact that
petitioner was aware, as early as 15 June 1999, when she filed her complaint, that the
summonses could not be served on Teresa and Cynthia, as she admitted therein that Teresa and
Cynthia were residing abroad. Petitioner as plaintiff should have asked that Cynthia and Teresa
be summoned by publication at the earliest possible time. She cannot idly sit by and wait till this is
done. She cannot afterwards wash her hands and say that the delay was not her fault. She
Finals: Property Cases
Lykah Honra
11

cannot simply "fold [her] hands" and say that it is the duty of the clerk of court to have the
summonses served on Cynthia and Teresa for the prompt disposition of her case. If there were
no means of summoning any of the defendants, petitioner should have so informed the court
within a reasonable period of time, so that the case could be disposed of one way or another and
the administration of justice would not suffer delay. The non-performance of that duty by
petitioner as plaintiff is an express ground for dismissing an action. For, indeed, this duty imposed
upon her was precisely to spur on the slothful.

For failure to diligently pursue the complaint, petitioner trifled with the right of the respondents to
speedy trial. It also sorely tried the patience of the court and wasted its precious time and
attention. To allow petitioner to wait until such time that summonses were served on respondents
would frustrate the protection against unreasonable delay in the prosecution of cases and violate
the constitutional mandate of speedy dispensation of justice which would in time erode the
people‟s confidence in the judiciary. We take a dim view of petitioner‟s complacent attitude. Ex
nihilo nihil fit.
35

Likewise, petitioner‟s counsel inexplicably failed to diligently pursue the service of summonses on
respondents. These were acts of negligence, laxity and truancy which the court could have very
easily avoided or timely remedied. Petitioner and her counsel could not avail themselves of this
Court‟s sympathy, considering their apparent complacency, if not delinquency, in the conduct of
their litigation.

Considering the foregoing, we sustain the dismissal by the trial court of the petitioner‟s complaint
for failure to prosecute for a period of more than one year (from the time of filing thereof on 15
June 1997 until Teresa‟s filing of a motion to dismiss).

WHEREFORE, premises considered, the instant petition is DENIED for lack of merit and the
assailed Decision dated 6 May 2005 of the Court of Appeals in CA-G.R. CV No. 71028 is hereby
AFFIRMED. Costs against petitioner.

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.

R E S O L U T I O N
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
Finals: Property Cases
Lykah Honra
13

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 Naguit
5

(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. Republic
8
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
Finals: Property Cases
Lykah Honra
15

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:
x x x x

(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
Finals: Property Cases
Lykah Honra
17

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 law
32
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.