Kawayan Hills Corporation vs. CA

 

 G.R. No. 203090, September 05, 2018
Leonen, J

    Kawayan Hills is a domestic corporation dealing with real estate. It is in possession of a 1,461-square-meter parcel of land located in Paoay, Ilocos Norte. All other lots surrounding Lot No. 2512 have been titled in Kawayan Hills' name. Kawayan Hills, filed an application for confirmation and registration of Lot No. 2512's title in its name before the Municipal Circuit Trial Court of Paoay-Currimao.

    The Republic of the Philippines, filed its Opposition to the application. It asserted that Kawayan Hills failed to comply with the requirements of Section 14(1)[16] of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, for judicial confirmation of imperfect title.

    The Municipal Circuit Trial Court ruled in favor of Kawayan Hills, confirmed its title over Lot No. 2512, and ordered Lot No. 2512's registration in Kawayan Hills' name.

    The CA reversed, on the grounds that tax declarations are not conclusive evidence of ownership. The Supreme Court reversed.

Question: Who may apply for land registration of title to land under Presidential Decree No. 1529?

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

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

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

(3) Those who have acquired ownership of private lands or abandoned river beds by right of accession or accretion under the existing laws.

(4) Those who have acquired ownership of land in any other manner provided for by law.

Where the land is owned in common, all the co-owners shall file the application jointly.

Where the land has been sold under pacto de retro, the vendor a retro may file an application for the original registration of the land, provided, however, that should the period for redemption expire during the pendency of the registration proceedings and ownership to the property consolidated in the vendee a retro, the latter shall be substituted for the applicant and may continue the proceedings.

A trustee on behalf of his principal may apply for original registration of any land held in trust by him, unless prohibited by the instrument creating the trust.”

Question: Distinguish Section 14(1) and Section 14(2) of Presidential Decree No. 1529.

In Republic v. Gielczyk, the Court summarized and affirmed the differences between Section 14 (1) and Section 14 (2) of Presidential Decree No. 1529 as discussed in Heirs of Malabanan:

In Heirs of Mario Malabanan v. Republic, the Court further clarified the difference between Section 14(1) and Section 14(2) of P.D. No. 1529. The former refers to registration of title on the basis of possession, while the latter entitles the applicant to the registration of his property on the basis of prescription. Registration under the first mode is extended under the aegis of the P.O. No. 1529 and the Public Land Act (PLA) while under the second mode is made available both by P.D. No. 1529 and the Civil Code. Moreover, under Section 48(b) of the PLA, as amended by Republic Act No. 1472, the 30-year period is in relation to possession without regard to the Civil Code, while under Section 14(2) of P.D. No. 1529, the 30-year period involves extraordinary prescription under the Civil Code, particularly Article 1113 in relation to Article 1137.

Question: What are the requisites for registration or judicial confirmation of incomplete or imperfect title under Section 14 (1) of Presidential Decree No. 1529?

1. object of the application;

2. possession. This possession must be (i) open, continuous, exclusive, and notorious; (ii) under a bona fide claim of acquisition of ownership; and (iii) has taken place since June 12, 1945, or earlier.

In jurisprudence, there is also a more nuanced reckoning of requisites for registration under Section 14(1). The applicant must satisfy the following requirements in order for his application to come under Section14 (1) of the Property Registration Decree:

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;

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

Question: Are  tax declarations or realty tax payments of property conclusive evidence of ownership?

Although tax declarations or realty tax payment of property are not conclusive evidence of ownership, nevertheless, they are good indicia of possession in the concept of owner for no one in his right mind would be paying taxes for a property that is not in his actual or at least constructive possession. They constitute at least proof that the holder has a claim of title over the property. The voluntary declaration of a piece of property for taxation purposes manifests not only one's sincere and honest desire to obtain title to the property and announces his adverse claim against the State and all other interested parties, but also the intention to contribute needed revenues to the Government. Such an act strengthens one's bona fide claim of acquisition of ownership.

Republic v. Spouses Noval  went a step further. It did not only favorably consider tax declarations as "good indicia of possession in the concept of an owner, and as constituting strong evidence of title." It also considered the applicants' and their predecessors-in-interest consistent payment of real property taxes as militating against the Republic's claim that the land subject of the application was not alienable and disposable agricultural land of the public domain.

Question: Was the CA correct in concluding that title over Lot No. 2512 cannot be confirmed and registered in petitioner’s favor?

No.

CA was in serious error in granting the Republic's appeal and in concluding that title over Lot No. 2512 cannot be confirmed and registered in petitioner's favor. It failed to acknowledge the prolonged duration of consistent and uninterrupted payment of real property taxes; the absence of any adverse claim, save the Republic's opposition; and the confirmation and tillage since 1942. Its haphazard reliance on the notion that real property tax declarations are not conclusive evidence of ownership demonstrates its failure to go about its duty of resolving the case with care and precision. It indicates grave abuse of discretion.

The payment of real property taxes since as far back as 1931 by Kawayan Hills' predecessor-in interest, Andres, should not be dismissed so easily. To the contrary, coupled with evidence of continuous possession, it is a strong indicator of possession in the concept of owner.