Fernandez Hermanos vs. Director of Lands

A possessory information title recorded under the Mortgage Law is insufficient, by itself, to support an application for land registration under Section 19(3) of Act No. 496; the applicant must either be the owner of the land (through conversion of the possessory title into a record of ownership pursuant to Article 393 of the Mortgage Law), or be in actual possession of the land, and the land must not be forest land of the public domain.

In June 1895, Antonio Herrero de Calatayud purchased a tract of about 2,300 hectares known as Hacienda Villa Ernesta, situated in Ayala, Zamboanga. He took possession in 1896 and, in December 1898, filed an application under the Mortgage Law to register his possession. The registration of possession was recorded on 3 January 1899. Calatayud cleared between 40 and 50 hectares but abandoned the entire hacienda by early 1905. In 1909, he conveyed the property to Manuel Pardo y Ferrer; upon Pardo y Ferrer’s death, it passed to the firm “Pardo, Robles and Brothers,” which sold it to the applicant partnership, Fernandez Hermanos, on 7 January 1918. The applicant attempted to take possession by buying improvements from existing occupants, but found only about 300 hectares along the coast under cultivation by homesteaders and lease applicants; the remaining area of over 2,300 hectares consisted of virgin forest with substantial commercial timber.

• The Hacienda and the Possessory Information: Antonio Herrero de Calatayud purchased Hacienda Villa Ernesta, a tract of about 2,300 hectares in Ayala, Zamboanga, in June 1895. He took possession in 1896. Under the provisions of the Mortgage Law, he filed an application to register his possession; the registration of possession was recorded on 3 January 1899.
• Abandonment and Conveyances: Calatayud sent an agent to the land in late 1903, who cleared 40 to 50 hectares, but Calatayud abandoned the entire hacienda by early 1905. In 1909, Calatayud conveyed the property to Manuel Pardo y Ferrer in payment of a debt. Upon Pardo y Ferrer’s death, the hacienda passed to the firm “Pardo, Robles and Brothers,” which sold it to the applicant, Fernandez Hermanos, by deed dated 7 January 1918.
• Attempted Reoccupation and Condition of the Land: In 1918, the applicant sent an agent to buy improvements from the existing occupants. Only about 300 hectares along the shore of the Sulu Sea were under cultivation, held by persons in possession under lease and homestead applications. The rest—over 2,300 hectares—was virgin forest containing at least 213.42 cubic meters of commercial timber per hectare, showing no signs of prior cultivation.
• Oppositions: The Director of Lands opposed on the ground that the land was public domain and listed numerous lease and homestead applicants occupying portions. The Director of Forestry argued the land was forest land. Emilio A. Bucoy claimed a 24-hectare homestead within the area, having paid fees and made improvements. The Municipality of Zamboanga sought exclusion of roads that provided the only outlet from the barrios of Labuan and Lawigan to the provincial road.
• Stipulation: The parties agreed to submit the case on the findings of fact of the trial court; the appellant did not file a motion for a new trial.

• Sufficiency of the Possessory Information Title under Act No. 496: Petitioner argued that the possessory information title recorded in 1899 satisfied the requirement of Section 19(3) of Act No. 496, as amended, which allows registration by a person claiming to “own or hold” land under a possessory information title acquired under the Mortgage Law.
• Right to Judicial Confirmation of Imperfect Title: Petitioner alternatively invoked paragraph (b) of Section 45 of Act No. 2874 (formerly paragraph 6 of Section 54 of Act No. 926), maintaining that it was entitled to judicial confirmation of an imperfect title on the ground that its predecessors had been in open, continuous, exclusive, and notorious possession of agricultural land under a bona fide claim of ownership since 26 July 1894.

• Lack of Ownership or Possession: The Director of Lands contended that the applicant and its predecessors had no right to claim ownership because the land was public domain; the registered possessory information conferred no title of ownership, and various private persons occupied portions under lease and homestead applications.
• Forest Land Character: The Director of Forestry maintained that the land was forest land belonging to the Government and that the applicant held no valid grant from either the Spanish or Philippine Governments.
• Pre-existing Private Right: Respondent Emilio A. Bucoy asserted a homestead claim over 24 hectares within the area, having paid required fees and spent ₱390 on improvements, and prayed that the application be denied as to his portion.
• Public Road Reservation: The Municipality of Zamboanga argued that roads traversing the land constituted the only outlet from the barrios of Labuan and Lawigan to the provincial road and should be excluded from the application.

• Sufficiency of the Possessory Information Title under Act No. 496: Whether a possessory information title recorded under the Mortgage Law, without conversion into a record of ownership, could sustain an application for registration of title under Section 19(3) of Act No. 496.
• Compliance with Judicial Confirmation Statute: Whether the applicant established open, continuous, exclusive, and notorious possession under a claim of ownership since 26 July 1894, as required by paragraph (b) of Section 45 of Act No. 2874.
• Character of the Land as Public Forest: Whether the land, being predominantly virgin forest with commercial timber, could be the subject of private registration.

• Sufficiency of the Possessory Information Title under Act No. 496: The possessory information title was insufficient. Section 19(3) of Act No. 496 requires that the applicant either be the owner of the land or be in actual possession thereof—the words “own” and “hold” being disjunctive essential conditions. The applicant did not claim to be the owner in fee simple; the registration of possession had never been converted into an inscription of ownership as required by Article 393 of the Mortgage Law. Moreover, the applicant was not in possession of the land at the time of application, having found it occupied by homesteaders along the narrow coastal strip and the remainder vacant and forested. The possessory information alone, without proof of actual, public, and adverse possession under claim of title for the period required by law, is ineffective as a mode of acquiring title under Act No. 496, following Heirs of Luno v. Marquez and Government of the Philippine Islands v. Heirs of Abella.
• Compliance with Judicial Confirmation Statute: The applicant could not avail of paragraph (b) of Section 45 of Act No. 2874 because it failed to prove open, continuous, exclusive, and notorious possession under a claim of ownership since July 26, 1894. The land had been abandoned since 1905, and neither the applicant nor its predecessors were in possession when the application was filed.
• Character of the Land as Public Forest: The evidence showed that the bulk of the claimed area was virgin forest land containing at least 213.42 cubic meters of commercial timber per hectare and bore no signs of cultivation. Such forest land is part of the public domain and has not passed to private ownership; it cannot be acquired through a possessory information title.

• Possessory Information Title as Basis for Registration under Act No. 496 — A possessory information title recorded under the Mortgage Law is not, by itself, sufficient to support an application for registration under Section 19(3) of Act No. 496. The applicant must additionally establish either (a) that the registration of possession has been converted into a record of ownership in accordance with Article 393 of the Mortgage Law, or (b) that the applicant is currently in actual, open, and adverse possession under a claim of ownership. The possessory information alone, without such proof, is ineffective as a mode of acquiring title. This was applied by requiring proof of either ownership or possession, both absent here.
• Conversion of Possessory Registration to Ownership under Article 393 of the Mortgage Law — The conversion of a registration of possession into a registration of ownership under Article 393 of the Mortgage Law requires the following conditions: (1) the applicant has been in open possession of the land; (2) an application for conversion is filed after the expiration of twenty years from the date of the possessory registration; (3) the application is announced by publication in the official bulletin; (4) the court orders the conversion; and (5) the registrar makes the appropriate entry. None of these steps had been taken; hence the possessory information never matured into a title of ownership.
• Forest Land as Inalienable Public Domain — Lands that are virgin forest and contain commercial timber are forest lands forming part of the public domain. They cannot be the subject of private registration through a possessory information title or judicial confirmation of imperfect title, as they have not been released or classified as alienable and disposable agricultural land.

• “The possessory information alone, without proof of actual, public and adverse possession of the land under claim of title for a sufficient time in accordance with law, is ineffective as a mode of acquiring title under Act No. 496.” (Quoting Heirs of Luno v. Marquez, 48 Phil. 855.)
• “It is certain that these lands were unoccupied when the homesteaders made their advent in 1913, and they appear to have been vacant for an indefinite period prior to that epoch.” (Quoting Government of the Philippine Islands v. Heirs of Abella, 49 Phil. 374.)
• “Lastly, it cannot be claimed that the registration of possession has been legally converted into a registration of ownership because the appellant has not complied with the requirements of article 393 of the Mortgage Law, to wit, that the applicant has been in open possession of the land; that an application to this effect be filed after the expiration of twenty years from the date of such registration; that such conversion be announced by means of a proclamation in the proper official bulletin; that the court order the conversion of the registration of possession into a record of ownership; and that the register make the proper record thereof in the registry.”

• Heirs of Luno v. Marquez, 48 Phil. 855 — Followed; established that a possessory information alone, without proof of actual possession, is insufficient to support a registration application under Act No. 496.
• Government of the Philippine Islands v. Heirs of Abella, 49 Phil. 374 — Followed; held that lack of continuous possession and uncultivated state of land defeats a claim based on a possessory information title, and that the land remained public.
• Roman Catholic Bishop of Nueva Segovia v. Municipality of Bantay, 28 Phil. 347 — Cited as authority for the requisites of converting a registration of possession into a record of ownership under Article 393 of the Mortgage Law.
• Querol and Flores v. Querol, 48 Phil. 90 — Cited similarly for the requirements of Article 393 conversion.

• Section 19(3) of Act No. 496, as amended by Section 1 of Act No. 2164 — Allows an application for registration of title by a person claiming to “own or hold” land under a possessory information title acquired under the Mortgage Law. The provision was applied to require either ownership or actual possession; the applicant satisfied neither.
• Paragraph (b) of Section 45 of Act No. 2874 (formerly paragraph 6 of Section 54 of Act No. 926) — Provides for judicial confirmation of imperfect title based on open, continuous, exclusive, and notorious possession of agricultural land under a bona fide claim of ownership since July 26, 1894. The applicant failed to prove the required possession.
• Article 393 of the Mortgage Law — Prescribes the procedure for converting a registration of possession into a record of ownership, including twenty-year open possession, application, publication, court order, and registry entry. Non-compliance precluded a claim of ownership.

Johnson, Street, Malcolm, Villamor, Ostrand, Romualdez, and Villa-Real, JJ., concurred.