The Court holds that the correct interpretation for Section 14 (1) is Naguit, not

Herbierto, the latter being only an orbiter dicta to a case where the MTC did not acquire
jurisdiction to settle the original registration. Thus:

1. The requirement of bona fide ownership since June 12, 1945 is satisfied when at
the time of the application, the land is already classified as alienable and
disposable. Ad proximum antecedents fiat relation nisi impediatur
sentencia.
2. A contrary ruling with result to absurdity rendering the presumption of the right
nugatory and the provision inoperative, aggravated by the fact that at the time the
Philippine is still not an independent state.
3. The correct interpretation then is that 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. If the
reverse is true, then there is already an intention on the part of the State to
abdicate its exclusive prerogative over the property.

The Court rules that the interpretation for Sec 14 (2) requires a mix of interpretation of
Art. 1113, Art. 1137, and Art. 420-422 of the New Civil Code.

1. It is well settled, per Art. 1113, that only objects within the commerce of men and
the patrimonial property of the State can be subject to acquisitive or extraordinary
acquisitive prescription.
2. It is also clear that in Arts. 420-422, the property of public dominion when no
longer in use, is converted into patrimonial property, if and only if, as held in
Ignacio vs. Director of Lands or Laurel vs. Garcia, there is a positive act of the
executive or legislative declaring lands to be such.
3. Hence, combining both rulings, it is clear that only when there is a positive act,
regardless if the land was classified as alienable and disposable, that the land
sought to be registered, can be acquired through prescription.

Applying to the case at bar:

1. Sec. 14 (1) is unsatisfied as the earliest tax declarations presented was 1948. No
other substantive evidence was presented.
2. Sec. 14 (2) is also unsatisfied as the subject property was declared as alienable
or disposable in 1982, there is no competent evidence that is no longer intended
for public use service or for the development of the national evidence,
conformably with Article 422 of the Civil Code. The classification of the subject
property as alienable and disposable land of the public domain does not change
its status as property of the public dominion under Article 420(2) of the Civil
Code. Thus, it is insusceptible to acquisition by prescription.
Issue: Who is entitled to the land and the products thereof?

Ruling: The patents when registered in the corresponding Register of Deeds are indispensible. We
regard these as veritable Torrens Title subject to no encumbrance except those stated therein, plus
those specified by the statutes, and lease is not one of them. In addition, when the lease was renewed
in 1949, the portion in question was no longer public land subject to the disposition of the Director of
Lands because it had already been granted to Margarita Juanson and had become private property. In
Sec 122 of the Land Registration Law, the documents mentioned wherein lands are “alienated, granted,
or conveyed” are documents transferring ownership, not documents of lease transferring ownership.
The Torrens Title of Dagdag must prevail.