G.R. No. L-60078 October 3, 1987
Republic of the Philippines, petitioner, vs. Court of Appeals and Circulo Bantayano Foundation, Inc., respondents.

FACTS

Circulo Bantayano Foundation, Inc., a domestic corporation, filed an application for registration of a 108,711-square-meter parcel of land in Cebu. It claimed ownership through purchase from the heirs of Pedro Escario, Sr., who had inherited the land. The applicant and its predecessors-in-interest allegedly possessed the land openly, continuously, and in the concept of owners for over 40 years. The Republic of the Philippines opposed, arguing the corporation was disqualified under the 1973 Constitution from owning lands of the public domain and that the land remained part of the public domain.
The trial court granted the application, finding the applicant’s possession and that of its predecessors to be peaceful, open, continuous, and in the concept of owner for over thirty years, supported by tax declarations and payments. The Republic appealed, but the Court of Appeals affirmed the trial court’s decision. The Republic then elevated the case to the Supreme Court.

ISSUE

Whether a private domestic corporation is qualified to register title to land acquired from predecessors-in-interest whose possession allegedly converted the land from public to private domain prior to the corporation’s acquisition.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The legal logic centers on the nature of the land at the time of corporate acquisition. While the 1973 and 1987 Constitutions prohibit private corporations from acquiring alienable lands of the public domain, this prohibition does not apply if the land is no longer public land but has become private property.
The Court upheld the factual findings of the lower courts that the applicant’s predecessors-in-interest, the Escarios, had possessed the land exclusively, continuously, and adversely for more than thirty years, spanning at least three generations. This long period of possession in the concept of owner had the legal effect of converting the land from public domain to private ownership by operation of law (ipso jure) even before the applicant corporation purchased it in 1974. Consequently, at the time of the 1974 sale, the land was already private land. The constitutional restrictions on corporate ownership apply only to lands of the public domain, not to private lands. Therefore, the corporation validly acquired and was entitled to register title to the already privatized land. The Court cited the precedent in Director of Lands vs. Intermediate Appellate Court, which reversed earlier rulings that had imposed stricter corporate disqualifications.