G.R. No. L-25914. March 21, 1972. PALAWAN AGRICULTURAL AND INDUSTRIAL CO., INC., applicant-appellant, vs. DIRECTOR OF LANDS, oppositor-appellee.
FACTS:

Palawan Agricultural and Industrial Co., Inc. (appellant) filed an application for judicial confirmation of title over a 414-hectare parcel of land in Aborlan, Palawan, on February 14, 1961. It anchored its claim on Section 48(b) of Commonwealth Act No. 141, as amended, asserting that it and its predecessor-in-interest had been in open, continuous, exclusive, and notorious possession under a bona fide claim of ownership since 1912. The Director of Lands opposed the application, contending the land was public domain and subject to appellant’s own Sales Application No. 4782, filed on April 9, 1920. The opposition highlighted that the land was never awarded to appellant because it refused to pay the government’s appraised value in 1950, and its possession was merely that of a sales applicant, not an owner.
The Court of First Instance of Palawan dismissed the application. It found that appellant had consistently treated the land as public domain by filing a sales application, requesting reductions in area, participating in surveys, and protesting realty tax assessments on the basis of its pending application. The tax declarations for the property also bore annotations referencing “Purchase Application” or the sales application number. The lower court concluded appellant’s possession was in the character of a prospective purchaser from the government, not adverse to it.

ISSUE

Whether the appellant’s possession, undertaken while its sales application with the Bureau of Lands was pending, constitutes the “bona fide claim of acquisition of ownership” adverse to the government required under Section 48(b) of Commonwealth Act No. 141, as amended by Republic Act No. 1942, for judicial confirmation of imperfect title.

RULING

The Supreme Court affirmed the dismissal, ruling that appellant’s possession was not of the requisite character for confirmation of title under the law. The Court explained the legal logic clearly: possession under a pending sales application is incompatible with a bona fide claim of ownership adverse to the State. By filing a sales application, appellant acknowledged the government’s title and submitted itself to the administrative process of purchasing the land. Its subsequent acts—cooperating with surveys, responding to appraisal notices, and seeking postponements of auction—were consistent with the status of an applicant seeking to buy, not an owner asserting a right already acquired. This possession is held for the government, not against it.
The Court emphasized that the amendment by Republic Act No. 1942, which removed the phrase “except as against the Government” from the old law, strengthened the requirement that the claim of ownership must be adverse to all, including the government. To rule otherwise would permit a sales applicant to use the judicial confirmation process to circumvent the administrative sale, potentially defrauding the government by obtaining title without payment. The appellant’s remedy was to pursue its sales application, not to convert it into an application for confirmation after decades. Its possession, though long, was legally insufficient as it was not under a claim of ownership adverse to the State from its inception.