Archive for May, 2011


LEGAL NOTE 0067: INTERPRETATION  OF AN INSTRUMENT.

 SOURCE: BANK OF COMMERCE VS. GOODMAN  FIELDER INTERNATIONAL PHILIPPINES, INC. (G.R. NO. 191561, 7 MARCH 2011, CARPIO MORALES, J.) SUBJECT: INTERPRETATION OF AN INSTRUMENT. (BRIEF TITLE: BANK OF COMMERCE VS. GOODMAN).

  

CASE DIGEST:

 KERAJ MARKETING REQUESTED FOR A CERTIFICATION FROM BANK OF COMMERCE THAT IT IS ARRANGING FOR A CREDIT LINE. IT INTENDS TO SUBMIT SUCH CERTIFICATION TO GOODMAN FIELDER AS A REQUIREMENT FOR A DISTRIBUTORSHIP AGREEMENT. THE CREDIT LINE WILL ANSWER FOR LIABILITIES OF KERAJ. BANK OF COMMERCE ISSUED A CERTIFICATION THAT KERAJ MARKETING HAS ARRANGED FOR A CREDIT LINE. WHEN KERAJ DEFAULTED, GOODMAN FIELDER FILED COLLECTION CASE AGAINST BANK OF COMMERCE. RTC AND CA RULED AGAINST BANK OF COMMERCE: THAT IT IS LIABLE IN VIEW OF ITS CERTIFICATION.

 IS BANK OF COMMERCE LIABLE?

 NO. IN INTERPRETING THE CERTIFICATION THAT KERAJ MARKETING HAS ARRANGED FOR A CREDIT LINE,  THE CIRCUMSTANCES WHEN IT WAS ISSUED MUST BE CONSIDERED. KERAJ’S LETTER-REQUEST OF AUGUST 21, 2000 FOR A CONDITIONAL CERTIFICATION FROM ARAGON WAS GRANTED TWO DAYS LATER WHENARAGON ISSUED THE LETTER-CERTIFICATION ADDRESSED TO RESPONDENT.   WITHIN THAT PERIOD, IT COULD NOT HAVE BEEN POSSIBLE FOR PETITIONER TO EVEN PROCESS  THE APPLICATION, GIVEN THAT AMARNANI HAD NOT EVEN COMPLIED WITH THE REQUIREMENTS AS HE, HIMSELF, INDICATED IN HIS LETTER-REQUEST TO ARAGON TO “PLEASE TELL [HIM] THE REQUIREMENTS FOR THE CREDIT LINE SO [HE] C[OULD] APPLY.”

 ALSO, GOODMAN FIELDER SHOULD HAVE VERIFIED THE ISSUANCE OF SUCH CREDIT LINE. THE DISTRIBUTORSHIP AGREEMENT BETWEEN RESPONDENT AND KERAJ WAS FORGED ON OCTOBER 2, 2000 OR 39 DAYS AFTER THE ISSUANCE OF THE LETTER-CERTIFICATION, LONG ENOUGH FOR RESPONDENT TO VERIFY IF INDEED A BANK GUARANTY WAS, TO ITS IMPRESSION, GRANTED.  

 

 WHAT IS THE RULE ON INTERPRETATION OF AN INSTRUMENT?

 THE CIRCUMSTANCES UNDER WHICH IT WAS MADE MUST BE CONSIDERED.

           The resolution of the case hinges on what Aragon’s statement in the letters sent to respondent that “… we are pleased to inform you that said Corporation has arranged for a credit line ” conveys.

 Section 13, Rule 130, Rules of Court  on interpretation of an instrument provides:

 SEC. 13. Interpretation according to circumstances – For the proper construction of an instrument, the circumstances under which it was made, including the situation of the subject thereof and of the parties to it, may be shown so that the judge may be placed in the position of those whose language he is to interpret.   (underscoring supplied)

          A consideration of the circumstances under which Aragon’s letter-certifications were issued is thus in order.

Amarnani’s letter-request of August 21, 2000 for a conditional certification from Aragon was granted two days later whenAragon issued the letter-certification addressed to respondent.   Within that period, it could not have been possible for petitioner to even process  the application, given that Amarnani had not even complied with the requirements as he, himself, indicated in his letter-request to Aragon to “please tell [him] the requirements for the credit line so [he] c[ould] apply.”
          The Distributorship Agreement between respondent and Keraj was forged on October 2, 2000 or 39 days after the issuance of the letter-certification, long enough for respondent to verify if indeed a bank guaranty was, to its impression, granted.  

By respondent’s finance manager Leonora Armi Salvador’s testimony, upon receipt of the two letter-certifications,[11] she concluded that they were bank guarantees considering their similarity with other bank guarantees in favor of respondent by other distributors; and she made  inquiries with petitioner only after Keraj defaulted in the payment of its obligation to respondent.[12]

In light of the foregoing circumstances, petitioner could not have conveyed that it was issuing a bank guaranty in favor of Amarnani.   

          Respondent’s reliance on Aragon’s use of a “check writer,” a machine used to input a numerical or written value impression in the “payment amount field” of a check that is very difficult to alter, on the left side of each letter- certification, was misplaced, what prevails being the wordings of the letter-certifications.[13]  


*               Designated member per Special Order No. 940 dated February 7, 2011 in lieu of Associate Justice Arturo D. Brion.

[1]               Records, Vol. 3, TSN taken on March 3, 2004, p. 553.

[2]               Rollo, p. 74.

[3]               Id. at  75.

[4]               Id. at 78.

[5]               Id. at 79.

[6]               Id. at 80.

[7]               Id. at 121.

[8]               Id. at 120.

[9]               Penned by Associate Justice Jose L. Sabio, Jr., with the concurrence of Associate Justices Vicente S.E. Veloso and Ricardo R. Rosario, id. at 43-62.

[10]             Id. at 54.

[11]             Records, Vol. 3, TSN of March 3, 2004, pp. 583-584.

[12]             Id. at 644.

[13]             http://en.wikipedia.org/wiki/Checkwriter citing http://www.google.com/search?q=history+of+paymaster+ribbon+writer&hl=en&tbs=tl:1&tbo=u&ei=e1JkS665K46H8QaOstyaAw&sa=X&oi=timeline_result&ct=title&resnum=11&ved=0CDEQ5wIwCg (visited February 24, 2011).

CASE NO. 2011-0113: BANK OF COMMERCE VS. GOODMAN  FIELDER INTERNATIONAL PHILIPPINES, INC. (G.R. NO. 191561, 7 MARCH 2011, CARPIO MORALES, J.) SUBJECT: INTERPRETATION OF AN INSTRUMENT. (BRIEF TITLE: BANK OF COMMERCE VS. GOODMAN).

 

THIRD DIVISION

 

 

BANK OF COMMERCE,

                             Petitioner,

 

 

G.R. No. 191561

 

 

 

– versus –

 

 

Present:

 

CARPIO MORALES, Chairperson, J.,

BERSAMIN,

 

 

GOODMAN  FIELDER INTERNATIONAL PHILIPPINES, INC.

ABAD,*

VILLARAMA, JR., and

SERENO, JJ.

Promulgated:

                               Respondent.

 

 

March 7, 2011

x————————————————————————————–x

 

 

 

D E C I S I O N

 

 

CARPIO MORALES, J.

          Goodman Fielder International Philippines, Inc. (respondent), a corporation duly registered and existing under the laws of the Republic of the Philippines, is engaged in marketing of fats and oil shortening.[1]

          Keraj Marketing Company (Keraj), represented by its purported owner Sunil K. Amarnani (Amarnani), sought a distributorship agreement from respondent.  As a pre-requisite to respondent’s consent, a credit line/bank guaranty in the amount of P500,000.00 was required from Keraj.  Amarnani thus applied for a credit line/bank guaranty with the Bacolod branch of Bank of Commerce (petitioner).

          Pending submission of the required documents for processing and approval of the credit line, Amarnani, by letter of August 21, 2000,[2] requested the issuance of a conditional certification from petitioner’s branch manager Eli Aragon (Aragon) in this wise:

            Earlier I mentioned that one of my big suppliers is Goodman Fielder International where I get my baking supplies.

            They are requiring from me a certification issued by my bank that I am arranging for a credit line with my bank to be used if I cannot pay them. Please tell me the requirements for the credit line so I can apply. All I need is a conditional certification that I am arranging for a credit line from our bank. I will prepare the necessary documents you mentioned to me in your letter.

            I can offer you a property here in Bacolod as collateral for said credit line application.

            Please advi[s]e.  (emphasis, italics and underscoring supplied)

          Replying to Amarnani’s request, Aragon sent respondent a letter of August 23, 2000[3] reading:

Gentlemen:

            At the request of our client, KERAJ MARKETING COMPANY with postal address at Door No. 2 Goldenfields Commercial Complex, Singcang, Bacolod City, we are pleased to inform you that said Corporation has arranged for a credit line in the amount of FIVE HUNDRED THOUSAND PESOS ONLY (P500,000.00), subject to the compliance by said client of the policies, terms and conditions imposed by the bank on said credit line. The said credit line will be used exclusively for settling any obligations of our client, KERAJ MARKETING COMPANY (sic), against your company.

            This certification is issued at the request of the client for whatever legal purpose it may serve them best. (emphasis and underscoring supplied)

          On October 2, 2000, respondent and Keraj entered into a Distributorship Agreement.

          Aragon subsequently issued a similar letter (dated October 18, 2000[4]) in favor of Bacolod RK Distributors and Co., (Bacolod RK), an entity also allegedly owned by Amarnani, attesting to the arrangement by Keraj for a credit line in the amount ofP2,000,000.00, to be utilized for the settlement of Keraj’s accounts with respondent.

          Both letters of Aragon contain a “check write” on the left side indicating the amount applied for as credit line.  Keraj and Bacolod RK did not pursue their application for a credit line, however, despite follow-up advice from petitioner.

          A year later, respondent informed petitioner, by letter of October 24, 2001,[5] its intent to claim against the bank guaranty issued to settle Keraj and Bacolod RK’s unpaid accounts.  By another letter dated November 20, 2001,[6] respondent advised petitioner its intent to collect the amount of P1,817,691.30 representing Keraj and Bacolod RK’s unpaid obligations.

          Negotiations for the settlement of Keraj and Bacolod RK’s obligations having failed, respondent filed a complaint for collection of sum of money against Keraj, Amarnani, Bacolod RK, and petitioner and its manager Aragon before the Regional Trial Court (RTC) of Pasig.

          In defense, petitioner and Aragon claimed that the letters merely certified that Keraj and Bacolod RK applied for the issuance of a bank guaranty, but no actual bank guaranty was approved, both companies having failed to present the required documents for processing the application.

          Bacolod RK, on the other hand, denied any involvement in the transaction between Keraj and respondent.

          Only petitioner presented evidence.

          By Decision of July 20, 2007, Branch 268 of the Pasig RTC absolved Bacolod RK from liability, but faulted Keraj, Amarnani,Aragon and petitioner, disposing as follows:

WHEREFORE, foregoing premises considered, judgment is hereby rendered in favor of the plaintiff [respondent herein] and against defendants SUNIL AMARNANI, KERAJ MARKETING CO., ELI ARAGON and BANK OF COMMERCE, ordering the latter, jointly and severally, to pay the former the following sums:

1.      Php1,700,250.66 as actual damages plus interest at the legal rate from the date of extrajudicial demand and satisfaction of judgment;

2.      The sum equivalent to 25% of the total amount due as and by way of attorney’s fees, and;

3.      The cost of suits.

SO ORDERED.[7] (capitalization in the original)

In holding petitioner jointly and severally liable with Amarnani, Keraj and Aragon, the trial court held:

From the evidence adduced by the plaintiff [Goodman], defendant bank is estopped from denying its liability relative to the subject bank guarantees. Defendant Bank of Commerce failed to sufficiently prove the foregoing defenses. Plaintiff relied on the apparent authority of its branch manager in issuing the subject documents. Defendant Bank is bound by the acts of its branch manager. The Supreme Court ruled: “What transpires in the corporate board room is entirely an internal matter. Hence, petitioner may not impute negligence on the part of respondent’s representative in failing to find out the scope of authority of petitioner’s Branch Manager. Indeed, the public has the right to rely on the trustworthiness of bank managers and their acts. Obviously, confidence in the banking system, which necessarily includes reliance on bank managers, is vital in the economic life of our society.” (BPI Family Savings Bank, Inc. versus First Metro Investment Corporation, G.R. No. 132390, May 21, 2004).[8]   (italics in the original; emphasis supplied)

          The Court of Appeals, by the assailed Decision of June 17, 2009,[9] opined that Aragon’s letters clearly showed approval by petitioner of the application for a credit line:

 

The word “guaranty” is not strictly required to appear in the said document to be able to say that it is as such. If the words of the contract appear to be contrary to the evident intention of the parties, the latter shall prevail over the former. In the case at bench, it was clearly shown that the intention of the document was to guarantee the obligations that would be incurred by [herein petitioner’s] clients, defendants Keraj and Becolod (sic) RK. Such intention was expressed in the last phrase of the first paragraph and its limitations were specifically limited to Php500,000.00 and 2,000,000.00 respectively. There is nothing more left to doubt the intention of the parties included in the said bank guaranty.[10]  (underscoring supplied)

The appellate court accordingly affirmed the trial court’s decision, with modification by deleting the award of attorney’s fees.

          Petitioner’s motion for reconsideration having been denied by Resolution of March 8, 2010, it filed the present petition for review, faulting the appellate court as follows:

I.

 

            THE COURT OF APPEALS ERRONEOUSLY INTERPRETED THE NOTICE/CERTIFICATION ISSUED BY DEFENDANT ARAGON AS A BANK GUARANTEE AND NOT MERELY AS A LETTER-CERTIFICATION OF A PENDING CREDIT LINE APPLICATION;

II.

 

            THE DOCTRINE OF APPARENT AUTHORITY DOES NOT APPLY IN THIS CASE;

III.

 

            DEFENDANT BANCOMMERCE IS NOT ESTOPPED FROM DENYING LIABILITY ON THE PURPORTED BANK GUARANTEES. (underscoring supplied)

          The resolution of the case hinges on what Aragon’s statement in the letters sent to respondent that “… we are pleased to inform you that said Corporation has arranged for a credit line ” conveys.

Section 13, Rule 130, Rules of Court  on interpretation of an instrument provides:

SEC. 13. Interpretation according to circumstances – For the proper construction of an instrument, the circumstances under which it was made, including the situation of the subject thereof and of the parties to it, may be shown so that the judge may be placed in the position of those whose language he is to interpret.   (underscoring supplied)

          A consideration of the circumstances under which Aragon’s letter-certifications were issued is thus in order.

Amarnani’s letter-request of August 21, 2000 for a conditional certification from Aragon was granted two days later whenAragon issued the letter-certification addressed to respondent.   Within that period, it could not have been possible for petitioner to even process  the application, given that Amarnani had not even complied with the requirements as he, himself, indicated in his letter-request to Aragon to “please tell [him] the requirements for the credit line so [he] c[ould] apply.”
          The Distributorship Agreement between respondent and Keraj was forged on October 2, 2000 or 39 days after the issuance of the letter-certification, long enough for respondent to verify if indeed a bank guaranty was, to its impression, granted.  

By respondent’s finance manager Leonora Armi Salvador’s testimony, upon receipt of the two letter-certifications,[11] she concluded that they were bank guarantees considering their similarity with other bank guarantees in favor of respondent by other distributors; and she made  inquiries with petitioner only after Keraj defaulted in the payment of its obligation to respondent.[12]

In light of the foregoing circumstances, petitioner could not have conveyed that it was issuing a bank guaranty in favor of Amarnani.   

          Respondent’s reliance on Aragon’s use of a “check writer,” a machine used to input a numerical or written value impression in the “payment amount field” of a check that is very difficult to alter, on the left side of each letter- certification, was misplaced, what prevails being the wordings of the letter-certifications.[13]  

          WHEREFORE, the challenged Court of Appeals Decision of June 17, 2009 is REVERSED and SET ASIDE. The complaint of respondent, Goodman Fielder International Philippines, Inc. is, with respect to petitioner, Bank of Commerce,DISMISSED.

          SO ORDERED.

 

 

 

CONCHITA CARPIO MORALES

                                                                    Associate Justice

                                                                       Chairperson

 

 

 WE CONCUR:

 

 

 

 

 

 

LUCAS P. BERSAMIN

Associate Justice

 

ROBERTO A. ABAD

Associate Justice

 

 

 

 

 

MARTIN S. VILLARAMA, JR.

Associate Justice

 

 

 

 

MARIA LOURDES P. A. SERENO

Associate Justice

 

 

 

 

 

 

 

ATTESTATION

 

 

          I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

 

                                  CONCHITA CARPIO MORALES

                                      Associate Justice

                                   Chairperson

 

 

 

 

 

 

 

 

 

 

 

 

 

CERTIFICATION

 

 

          Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

                                                     RENATO C. CORONA

                                                                Chief Justice


*               Designated member per Special Order No. 940 dated February 7, 2011 in lieu of Associate Justice Arturo D. Brion.

[1]               Records, Vol. 3, TSN taken on March 3, 2004, p. 553.

[2]               Rollo, p. 74.

[3]               Id. at  75.

[4]               Id. at 78.

[5]               Id. at 79.

[6]               Id. at 80.

[7]               Id. at 121.

[8]               Id. at 120.

[9]               Penned by Associate Justice Jose L. Sabio, Jr., with the concurrence of Associate Justices Vicente S.E. Veloso and Ricardo R. Rosario, id. at 43-62.

[10]             Id. at 54.

[11]             Records, Vol. 3, TSN of March 3, 2004, pp. 583-584.

[12]             Id. at 644.

[13]             http://en.wikipedia.org/wiki/Checkwriter citing http://www.google.com/search?q=history+of+paymaster+ribbon+writer&hl=en&tbs=tl:1&tbo=u&ei=e1JkS665K46H8QaOstyaAw&sa=X&oi=timeline_result&ct=title&resnum=11&ved=0CDEQ5wIwCg (visited February 24, 2011).

LEGAL NOTE 0066: REQUIREMENTS FOR LAND TITLING (JUDICIAL CONFIRMATION OF IMPERFECT TITLE) UNDER PD 1525.

SOURCE: REPUBLIC OF THE PHILIPPINES VS. TEODORO P. RIZALVO, JR. (G.R. NO. 172011, 7 MARCH 2011, VILLARAMA, JR., J.)  SUBJECT: LAND REGISTRATION; JUDICIAL CONFIRMATION OF IMPERFECT TITLE; PD 1525. (BRIEF TITLE: REPUBLIC VS. RIZALDO)

  

CASE DIGEST:

FACTS:

On December 7, 2000, respondent Teodoro P. Rizalvo, Jr. filed before the MTC of Bauang, La Union, acting as a land registration court, an application for the registration[3] of a parcel of land referred to in Survey Plan Psu-200706,[4] located in Bauang, La Union and containing an area of 8,957 square meters. Respondent alleged that he is the owner in fee simple of the subject parcel of land, that he obtained title over the land by virtue of a Deed of Transfer[5] dated December 31, 1962, and that he is currently in possession of the land.  In support of his claim, he presented, among others, Tax Declaration No. 22206[6] for the year 1994 in his name, and Proof of Payment[7] of real property taxes beginning in 1952 up to the time of filing of the application. 

 

ISSUE:  

       Should his application be granted?

 

RULING:

No because Petitioner failed to prove that he and his predecessor have  been in possession of the land since 12 June 1945. Neither can be qualify under the 30-year prescription period rule since the land was declared alienable less than 30 years from the date of his application.

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WHAT MUST AN APPLICANT FOR REGISTRATION OF TITLE ESTABLISH?

UNDER SECTION 14 (1), APPLICANTS FOR REGISTRATION OF TITLE MUST SUFFICIENTLY ESTABLISH:

FIRST, THAT THE SUBJECT LAND FORMS PART OF THE DISPOSABLE AND ALIENABLE LANDS OF THE PUBLIC DOMAIN;

 SECOND, THAT THE APPLICANT AND HIS PREDECESSORS-IN-INTEREST HAVE BEEN IN OPEN, CONTINUOUS, EXCLUSIVE AND NOTORIOUS POSSESSION AND OCCUPATION OF THE SAME;

AND THIRD, THAT IT IS UNDER A BONA FIDE CLAIM OF OWNERSHIP SINCE JUNE 12, 1945, OR EARLIER. 

Existing law and jurisprudence provides that an applicant for judicial confirmation of imperfect title must prove compliance with Section 14 of Presidential Decree (P.D.) No. 1529[18] or the Property Registration Decree.  The pertinent portions of Section 14 provide:

            SEC. 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 of private lands by prescription under the provisions of existing laws.

x x x x

Under Section 14 (1), applicants for registration of title must sufficiently establish first, that the subject land forms part of the disposable and alienable lands of the public domain; second, that the applicant and his predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of the same; and third, that it is under a bona fide claim of ownership since June 12, 1945, or earlier.

XXXXXXXXXXXXXXXXXXXXXXX

HOW DO YOU PROVE THAT THE SUBJECT LAND FORMS PART OF THE DISPOSABLE AND ALIENABLE LAND?

BY PRESENTING A CERTIFICATION AND REPORT FROM THE DENR-CENRO STATING THAT   THE LAND IS ALIENABLE AND DISPOSABLE.

The first requirement was satisfied in this case.  The certification and report[19] dated July 17, 2001 submitted by Special Investigator I Dionisio L. Picar of the CENRO of San Fernando City, La Union, states that the entire land area in question is within the alienable and disposable zone, certified as such since January 21, 1987.

In Limcoma Multi-Purpose Cooperative v. Republic,[20] we have ruled that a certification and report from the DENR-CENRO enjoys the presumption of regularity and is sufficient proof to show the classification of the land described therein. We held:

In the recent case of Buenaventura v. Republic,[21] we ruled that said Certification is sufficient to establish the true nature or character of the subject property as public and alienable land. We similarly ruled in Republic v. Court of Appeals[22] and intoned therein that the certification enjoys a presumption of regularity in the absence of contradictory evidence.

Both the DENR-CENRO Certification and Report constitute a positive government act, an administrative action, validly classifying the land in question. As adverted to by the petitioner, the classification or re-classification of public lands into alienable or disposable, mineral, or forest lands is now a prerogative of the Executive Department of the government. Clearly, the petitioner has overcome the burden of proving the alienability of the subject lot.

XXXXXXXXXXXXXXXXXXXXXXXXX

HOW DO YOU PROVE THAT YOU AND YOUR PREDECESSOR WERE IN OPEN, CONTINUOUS, EXCLUSIVE AND NOTORIOUS POSSESSION AND OCCUPATION OF THE LAND IN QUESTION?

BY TAX DECLARATIONS AND TAX RECEIPTS. FOR NO ONE IN HIS RIGHT MIND WOULD BE PAYING TAXES FOR A PROPERTY THAT IS NOT IN HIS ACTUAL OR CONSTRUCTIVE POSSESSION.[28]

XXXXXXXXXXXXXXXXXXXXXXX

SINCE WHEN SHOULD YOU AND YOUR PREDECESSOR POSSESS THE PROPERTY?

SINCE 12 JUNE 1945 OR EARLIER UNDER SECTION 14 (PAR. 1) OF PD 1525.

Respondent has likewise met the second requirement as to ownership and possession.  The MTC and the CA both agreed that respondent has presented sufficient testimonial and documentary evidence to show that he and his predecessors-in-interest were in open, continuous, exclusive and notorious possession and occupation of the land in question. Said findings are binding upon this Court absent any showing that the lower courts committed glaring mistakes or that the assailed judgment is based on a misapprehension of facts.  In Buenaventura v. Pascual,[23] we reiterated,

Time and again, this Court has stressed that its jurisdiction in a petition for review on certiorari under Rule 45 of the Rules of Court is limited to reviewing only errors of law, not of fact, unless the findings of fact complained of are devoid of support by the evidence on record, or the assailed judgment is based on the misapprehension of facts.  The trial court, having heard the witnesses and observed their demeanor and manner of testifying, is in a better position to decide the question of their credibility. Hence, the findings of the trial court must be accorded the highest respect, even finality, by this Court.  x x x.

However, the third requirement, that respondent and his predecessors-in-interest be in open, continuous, exclusive and notorious possession and occupation of the subject property since June 12, 1945 or earlier, has not been satisfied.  Respondent only managed to present oral and documentary evidence of his and his mother’s ownership and possession of the land since 1958 through a photocopy of the Deed of Absolute Sale[24] dated July 8, 1958 between Eufrecina Navarro and Bibiana P. Rizalvo.  He presented Tax Declaration No. 11078[25] for the year 1948 in the name of Eufrecina Navarro and real property tax receipts beginning in 1952.[26]  In Llanes v. Republic,[27] the Court held that tax declarations are good indicia of possession in the concept of an owner, for no one in his right mind would be paying taxes for a property that is not in his actual or constructive possession.[28] However, even assuming that the 1948 Tax Declaration in the name of Eufrecina Navarro and the tax payment receipts could be taken in this case as proof of a claim of ownership, still, respondent lacks proof of occupation and possession beginning June 12, 1945 or earlier.  What is categorically required by law is open, continuous, exclusive, and notorious possession and occupation under a bona fide claim of ownership since June 12, 1945 or earlier.[29]

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

CAN  POSSESSION BE LATER THAN THE PERIOD SINCE 12 JUNE 1945 OR EARLIER?

YES, UNDER SECTION 14, PAR. 2 OF PD 1525.  OCCUPATION MUST BE AT LEAST 30 YEARS AT THE TIME OF APPLICATION PURSUANT TO THE PRESCRIPTION PROVISION UNDER THE CIVIL CODE. BUT THERE ARE TWO REQUIREMENTS:  (1) THE 3O  YEAR PERIOD MUST BEGIN FROM THE TIME THE LAND IS DECLARED ALIENABLE; AND (2) THERE MUST BE A DECLARATION BY THE DENR THAT THE SUBJECT LAND IS NO LONGER INTENDED FOR PUBLIC SERVICE OR THE DEVELOPMENT OF THE NATIONAL WEALTH.

But given the fact that respondent and his predecessors-in-interest had been in possession of the subject land since 1948, is respondent nonetheless entitled to registration of title under Section 14 (2) of P.D. No. 1529?  To this question we likewise answer in the negative.

An applicant may be allowed to register land by means of prescription under existing laws. The laws on prescription are found in the Civil Code and jurisprudence. It is well settled that prescription is one of the modes of acquiring ownership and 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 years.[30]

On this basis, respondent would have been eligible for application for registration because his claim of ownership and possession over the subject property even exceeds thirty (30) years.  However, it is jurisprudentially clear that the thirty (30)-year period of prescription for purposes of acquiring ownership and registration of public land under Section 14 (2) of P.D. No. 1529 only begins from the moment the State expressly declares that the public dominion property is no longer intended for public service or the development of the national wealth or that the property has been converted into patrimonial.[31]  In Heirs of Mario Malabanan v. Republic, the Court ruled,

Accordingly, there must be an express declaration by the State that the public dominion property is no longer intended for public service or the development of the national wealth or that the property has been converted into patrimonial. Without such express declaration, the property, even if classified as alienable or disposable, remains property of the public dominion, pursuant to Article 420(2)[32], and thus incapable of acquisition by prescription. It is only when such alienable and disposable lands are expressly declared by the State to be no longer intended for public service or for the development of the national wealth that the period of acquisitive prescription can begin to run. Such declaration shall be in the form of a law duly enacted by Congress or a Presidential Proclamation in cases where the President is duly authorized by law.[33]

In the case at bar, respondent merely presented a certification and report from the DENR-CENRO dated July 17, 2001 certifying that the land in question entirely falls within the alienable and disposable zone since January 21, 1987; that it has not been earmarked for public use; and that it does not encroach any area devoted to general public use.[34]  Unfortunately, such certification and report is not enough in order to commence the thirty (30)-year prescriptive period under Section 14 (2). There is no evidence in this case indicating any express declaration by the state that the subject land is no longer intended for public service or the development of the national wealth. Thus, there appears no basis for the application of the thirty (30)-year prescriptive period in this case.

Indeed, even assuming arguendo that the DENR-CENRO certification and report is enough to signify that the land is no longer intended for public service or the development of the national wealth, respondent is still not entitled to registration because the land was certified as alienable and disposable in 1987, while the application for registration was filed on December 7, 2000, a mere thirteen (13) years after and far short of the required thirty (30) years under existing laws on prescription.

Although we would want to adhere to the State’s policy of encouraging and promoting the distribution of alienable public lands to spur economic growth and remain true to the ideal of social justice[35] we are constrained by the clear and simple requisites of the law to disallow respondent’s application for registration.


*       Designated additional member per Special Order No. 940 dated February 7, 2011.

[1]       Rollo, pp. 99-109.  Dated March 14, 2006. Penned by Associate Justice Vicente Q. Roxas, with Associate Justices Godardo A. Jacinto and Juan Q. Enriquez, Jr., concurring.

[2]       Records, pp. 183-189. Dated November 29, 2001. Penned by Judge Romeo V. Perez.

[3]       Id. at 1-3.

[4]       Id. at 4.

[5]       Id. at 72-73.

[6]       Id. at 76.

[7]       Id. at 91-173.

[8]       Supra note 5.

[9]       Id. at 175-176.  The date appearing on the Deed is July 8, 1952 but was referred to as July 8, 1958 in the TSN and other parts of the records.

[10]     Id. at 181-182.

[11]     Supra note 2.

[12]     Id. at 189.

[13]     CA rollo, pp. 20-32.

[14]     Supra note 1.

[15]     Id. at 81.

[16]     Id. at 81, 87-89.

[17]     Id. at 180-181.

[18]     AMENDING AND CODIFYING THE LAWS RELATIVE TO REGISTRATION OF PROPERTY AND FOR OTHER PURPOSES, which took effect on June 11, 1978.

[19]     Supra note 10.

[20]     G.R. No. 167652, July 10, 2007, 527 SCRA 233, 243-244, citing Republic v. Carrasco, G.R. No. 143491, December 6, 2006, 510 SCRA 150; Bureau of Forestry v. Court of Appeals, No. L-37995, August 31, 1987, 153 SCRA 351, 357 and Republic v. Court of Appeals, 440 Phil. 697 (2002).

[21]     G.R. No. 166865, March 2, 2007, 517 SCRA 271, 284-285.

[22]     Supra note 20, at 711.

[23]     G.R. No. 168819, November 27, 2008, 572 SCRA 143, 157.

[24]     Records, pp. 175-176.

[25]     Id. at 90.

[26]     Id. at 91.

[27]     G.R. No. 177947, November 27, 2008, 572 SCRA 258.

[28]     Id. at 270-271, citing Consolidated Rural Bank (Cagayan Valley), Inc. v. Court of Appeals, G.R. No. 132161, January 17, 2005, 448 SCRA 347, 369.

[29]     Republic v. Enciso, G.R. No. 160145, November 11, 2005, 474 SCRA 700, 712.

[30]     Heirs of Mario Malabanan v. Republic, G.R. No. 179987, April 29, 2009, 587 SCRA 172, 197, citing Art. 1113, CIVIL CODE; Director of Lands v. Intermediate Appellate Court, G.R. No. 65663, October 16, 1992, 214 SCRA 604, 611; Republic v. Court of Appeals, G.R. No. 108998, August 24, 1994, 235 SCRA 567, 576; Group Commander, Intelligence and Security Group, Philippine Army v. Dr. Malvar, 438 Phil. 252, 275 (2002).

[31]     Heirs of Mario Malabanan v. Republic, id. at 203.

[32]     Article 420, CIVIL CODE.

[33]     Supra note 31.

[34]     Records, pp. 181-182.

[35]     Republic v. Bibonia, G.R. No. 157466, June 21, 2007, 525 SCRA 268, 277, citing Menguito v. Republic, G.R. No. 134308, December 14, 2000, 348 SCRA 128, 141.