Republic

of
the
Philippines
SUPREME
COURT
Manila
EN BANC
G.R. No. 6295
September 1,
1911
THE UNITED STATES, plaintiffappellee,
vs.
IGNACIO
CARLOS, defendantappellant.
A.
D.
Gibbs
for
appellant.
Acting Attorney-General Harvey for
appellee.P
PER CURIAM:
The information filed in this case is as
follows:
The undersigned accuses Ignacio Carlos
of the crime of theft, committed as
follows:
That on, during, and between the 13th
day of February, 1909, and the 3d day of
March, 1910, in the city of Manila,
Philippine Islands, the said Ignacio
Carlos, with intent of gain and without
violence or intimidation against the
person or force against the thing, did
then and there, willfully, unlawfully, and
feloniously, take, steal , and carry away
two thousand two hundred and seventythree (2,273) kilowatts of electric
current, of the value of nine hundred
and nine (909) pesos and twenty (20)
cents Philippine currency, the property
of the Manila Electric Railroad and
Light Company, a corporation doing
business in the Philippine Islands,
without the consent of the owner
thereof; to the damage and prejudice of
the said Manila Electric Railroad and
Light Company in the said sum of nine
hundred and nine (909) pesos and
twenty (20) cents Philippine currency,
equal to and equivalent of 4,546 pesetas
Philippine currency. All contrary to law.
(Sgd.)
L.
M.
SOUTWORTH,
Prosecuting Attorney.

Subscribed and sworn to before me this

4th day of March, 1910, in the city of
Manila, Philippine Islands, by L. M.
Southworth, prosecuting attorney for
the city of Manila.
(Sgd.) CHARLES S. LOBINGIER,
Judge, First Instance.
A
preliminary
investigation
has
heretofore been conducted in this case,
under my direction, having examined
the witness under oath, in accordance
with the provisions of section 39 of Act
No. 183 of the Philippine Commission,
as amended by section 2 of Act No. 612
of the Philippine Commission.
(Sgd)
L.
M.
SOUTHWORTH,
Prosecuting Attorney.
Subscribed and sworn to before me this
4th day of March, 1910, in the city of
Manila, Philippine Islands, by L. M.
Southworth, prosecuting attorney for
the city of Manila.
(Sgd.)
CHARLES
LOBINGIER,
Judge, First Instance.
A warrant for the arrest of the defendant
was issued by the Honorable J. C.
Jenkins on the 4th of March and placed
in the hands of the sheriff. The sheriff's
return shows that the defendant gave
bond for his appearance. On the 14th of
the same month counsel for the
defendant demurrer to the complaint on
the following grounds:
1 That the court has no jurisdiction over
the person of the accused nor of the
offense charged because the accused has
not been accorded a preliminary
investigation or examination as required
by law and no court, magistrate, or other
competent authority has determined
from a sworn complaint or evidence
adduced that there is probable cause to
believe that a crime has been
committed, or that this defendant has
committed any crime.
2 That the facts charged do not
constitute a public offense.

The demurrer was overruled on the

same day and the defendant having
refused to plead, a plea of not guilty was
entered by direction of the court for him
and the trial proceeded.
After due consideration of all the proofs
presented and the arguments of counsel
the trial court found the defendant
guilty of the crime charged and
sentenced him to one year eight months
and
twenty-one
days' presidio
correccional, to indemnify the offended
party, The Manila Electric Railroad and
Light Company, in the sum of P865.26,
to
the
corresponding
subsidiary
imprisonment in case of insolvency and
to the payment of the costs. From this
judgment the defendant appealed and
makes the following assignments of
error:
I.
The court erred in overruling the
objection of the accused to the
jurisdiction of the court, because he was
not given a preliminary investigation as
required by law, and in overruling his
demurrer for the same reason.
II.
The court erred in declaring the accused
to be guilty, in view of the evidence
submitted.
III.
The court erred in declaring that
electrical energy may be stolen.
IV.
The court erred in not declaring that the
plaintiff consented to the taking of the
current.
V.
The court erred in finding the accused
guilty of more than one offense.
VI.
The court erred in condemning the
accused to pay P865.26 to the electric
company as damages.
Exactly the same question as that raised
in the first assignment of error, was after

a through examination and due

consideration, decided adversely to
appellant's contention in the case of U.
S. vs. Grant and Kennedy (18 Phil. Rep.,
122). No sufficient reason is presented
why we should not follow the doctrine
enunciated in that case.
The question raised in the second
assignment of error is purely one fact.
Upon this point the trial court said:
For considerably more than a year
previous to the filing of this complaint
the accused had been a consumer of
electricity furnished by the Manila
Electric Railroad and Light Company for
a building containing the residence of
the accused and three other residences,
and which was equipped, according to
the defendant's testimony, with thirty
electric lights. On March 15, 1909, the
representatives
of
the
company,
believing that more light was being used
than their meter showed, installed an
additional meter (Exhibit A) on a pole
outside of defendant's house, and both it
and the meter (Exhibit B) which had
been previously installed in the house
were read on said date. Exhibit A read
218 kilowatt hours; Exhibit B, 745
kilowatt hours. On March 3, 1910 each
was read again, Exhibit A showing 2,718
kilowatt hours and Exhibit B, 968. It is
undisputed that the current which
supplied the house passed through both
meters and the city electrician testifies
that each meter was tested on the date of
the last reading and was "in good
condition." The result of this registration
therefore is that while the outsider
meter
(Exhibit
A)
showed
a
consumption in defendant's building of
2,500 kilowatt hours of electricity, this
inside meter (Exhibit B) showed but 223
kilowatt hours. In other words the actual
consumption, according to the outside
meter, was more than ten times as great
as that registered by the one inside.

Obviously this difference could not be

due to normal causes, for while the
electrician called by the defense
(Lanusa) testifies to the possibility of a
difference between two such meters, he
places the extreme limit of such
difference between them 5 per cent.
Here, as we have seen, the difference is
more than 900 per cent. Besides,
according to the defendant's electrician,
the outside meter should normally run
faster, while according to the test made
in this case the inside meter (Exhibit B)
ran the faster. The city electrician also
testifies that the electric current could
have been deflected from the inside
meter by placing thereon a device
known as a "jumper" connecting the two
outside wires, and there is other
testimony that there were marks on the
insulation of the meter Exhibit B which
showed the use of such a device. There is
a further evidence that the consumption
of 223 kilowatt hours, registered by the
inside meter would not be a reasonable
amount for the number of lights
installed in defendant's building during
the period in question, and the accused
fails to explain why he should have had
thirty lights installed if he needed but
four or five.
On the strength of this showing a search
warrant was issued for the examination
of defendant's premises and was duly
served by a police officer (Hartpence).
He was accompanied at the time by
three employees of the Manila Electric
Railroad and Light Company, and he
found there the accused, his wife and
son, and perhaps one or two others.
There is a sharp conflict between the
several spectators on some points but on
one there is no dispute. All agree that
the "jumper" (Exhibit C) was found in a
drawer of a small cabinet in the room of
defendant's house where the meter was
installed and not more than 20 feet

therefrom. In the absence of a

satisfactory explanation this constituted
possession on defendant's part, and
such possession, under the Code of Civil
Procedure, section 334 (10), raises the
presumption that the accused was the
owner of a device whose only use was to
deflect the current from the meter.
Is there any other "satisfactory
explanation" of the "jumper's" presence?
The only one sought to be offered is the
statement by the son of the accused, a
boy of twelve years, that he saw the
"jumper" placed there by the witness
Porter, an employee of the Light
Company. The boy is the only witness
who so testifies and Porter himself
squarely denies it. We can not agree
with counsel for the defense that the
boy's interest in the outcome of this case
is less than that of the witness for the
prosecution. It seems to us that his
natural desire to shield his father would
far outweight any interest such an
employee like Porter would have and
which, at most, would be merely
pecuniary.
There is, however, one witness whom so
far as appears, has no interest in the
matter whatsoever. This is officer
Hartpence, who executed the search
warrant. He testifies that after
inspecting other articles and places in
the building as he and the other
spectators, including the accused,
approached the cabinet in which the
"jumper" was found, the officer's
attention was called to the defendant's
appearance and the former noticed that
the latter was becoming nervous. Where
the only two witnesses who are
supposed to know anything of the
matter thus contradict each other this
item of testimony by the officer is of
more than ordinary significance; for if,
as the accused claims, the "jumper" was
placed in the cabinet for the first time by

Porter there would be no occasion for

any change of demeanor on the part of
the accused. We do not think that the
officer's declination to wait until
defendant should secure a notary public
shows bias. The presence of such an
official was neither required nor
authorized by law and the very efficacy
of a search depends upon its swiftness.
We must also agree with the prosecuting
attorney
that
the
attending
circumstances do not strengthen the
story told by the boy; that the latter
would have been likely to call out at the
time he saw the "jumper" being placed
in the drawer, or at least directed his
father's attention to it immediately
instead of waiting, as he says, until the
latter was called by the officer. Finally,
to accept the boy's story we must believe
that this company or its representatives
deliberately conspired not merely to lure
the defendant into the commission of a
crime but to fasten upon him a crime
which he did not commit and thus
convict an innocent man by perjured
evidence. This is a much more serious
charge than that contained in the
complaint and should be supported by
very strong corroborating circumstances
which we do not find here. We are,
accordingly, unable to consider as
satisfactory defendant's explanation of
the "jumper's" presence.
The only alternative is the conclusion
that the "jumper" was placed there by
the accused or by some one acting for
him and that it was the instrument by
which the current was deflected from
the matter Exhibit B and the Light
Company deprived of its lawful
compensation.
After a careful examination of the entire
record we are satisfied beyond
peradventure of a doubt that the proofs
presented fully support the facts as set
forth in the foregoing finding.

Counsel for the appellant insists that the

only corporeal property can be the
subject of the crime of larceny, and in
the support of this proposition cites
several authorities for the purpose of
showing that the only subjects of larceny
are
tangible,
movable,
chattels,
something which could be taken in
possession and carried away, and which
had some, although trifling, intrinsic
value, and also to show that electricity is
an unknown force and can not be a
subject of larceny.
In the U. S. vs. Genato (15 Phi. Rep.,
170) the defendant, the owner of the
store situated at No. 154 Escolta,
Manila, was using a contrivance known
as a "jumper" on the electric meter
installed by the Manila Electric Railroad
and the Light Company. As a result of
the use of this "jumper" the meter,
instead of making one revolution in
every four seconds, registered one in
seventy-seven seconds, thereby reducing
the current approximately 95 per cent.
Genato was charged in the municipal
court with a violation of a certain
ordinance of the city of Manila, and was
sentenced to pay a fine of P200. He
appealed to the Court of First Instance,
was again tried and sentenced to pay the
same fine. An appeal was taken from the
judgment of the Court of First Instance
to the Supreme Court on the ground that
the ordinance in question was null and
void. It is true that the only question
directly presented was of the validity of
the city ordinance. The court, after
holding that said ordinance was valid,
said:
Even without them (ordinances), the
right of ownership of electric current is
secured by articles 517 and 518 of the
Penal Code; the application of these
articles in case of subtraction of gas, a
fluid used for lighting, and in some
respects resembling electricity, is

confirmed by the rule laid down in the

decisions of the supreme court of Spain
January 20, 1887, and April 1, 1897,
construing and enforcing the provisions
of articles 530 and 531 of the penal code
of that country, articles identical with
articles 517 and 518 of the code in force
in these Islands.
Article 517 of the Penal Code above
referred to reads as follows:
The following are guilty of larceny:
(1) Those who with intent of gain and
without violence or intimidation against
the person, or force against things, shall
take another's personal property without
the owner's consent.
And article 518 fixes the penalty for
larceny in proportion to the value of the
personal property stolen.
It is true that electricity is no longer, as
formerly, regarded by electricians as a
fluid, but its manifestation and effects,
like those of gas, may be seen and felt.
The true test of what is a proper subject
of larceny seems to be not whether the
subject is corporeal, but whether it is
capable of appropriation by another
than the owner.
It is well-settled that illuminating gas
may be the subject of larceny, even in
the absence of a statute so providing.
(Decisions of supreme court of Spain,
January 20, 1887, and April 1,
1897, supra;
also
(England)
Queen vs. Firth, L. R. 1 C. C., 172, 11 Cox
C. C., 234; Queen vs. White, 3 C. & K.,
363, 6 Cox C. C., 213; Woods vs. People,
222 III., 293, 7 L. R. A., 520;
Commonwealth vs. Shaw,
4
Allen
(Mass), 308; State vs. Wellman, 34
Minn., 221, N. W. Rep., 385, and 25
Cyc., p. 12, note 10.)
In the case of Commonwealth vs. Shaw,
supra, the court, speaking through Chief
Justice Bigelow, said:
There is nothing in the nature of gas
used for illuminating purposes which

renders it incapable of being feloniously

taken and carried away. It is a valuable
article of merchandise, bought and sold
like other personal property, susceptible
of being severed from a mass or larger
quantity, and of being transported from
place to place. In the present case it
appears that it was the property of the
Boston Gas Light Company; that it was
in their possession by being confined in
conduits and tubes which belonged to
them, and that the defendant severed a
portion of that which was in the pipes of
the company by taking it into her house
and there consuming it. All this being
proved to have been done by her secretly
and with intent to deprive the company
of their property and to appropriate it to
her own use, clearly constitutes the
crime of larceny.
Electricity, the same as gas, is a valuable
article of merchandise, bought and sold
like other personal property and is
capable of appropriation by another. So
no error was committed by the trial
court in holding that electricity is a
subject of larceny.
It is urged in support of the fourth
assignment of error that if it be true that
the appellant did appropriate to his own
use the electricity as charged he can not
be held guilty of larceny for any part of
the electricity thus appropriated, after
the first month, for the reason that the
complaining party, the Manila Electric
Road and Light Company, knew of this
misappropriation
and
consented
thereto.
The outside meter was installed on
March 15, 1909, and read 218 kilowatt
hours. On the same day the inside meter
was read and showed 745 kilowatt
hours. Both meters were again read on
March 3, 1910, and the outside one
showed 2,718 kilowatt hours while the
one on the inside only showed 968, the
difference in consumption during this

time being 2,277 kilowatt hours. The

taking of this current continued over a
period of one year, less twelve days.
Assuming that the company read both
meters at the end of each month; that it
knew
the
defendant
was
misappropriating the current to that
extent; and that t continued to furnish
the current, thereby giving the
defendant an opportunity to continue
the misppropriation, still, we think, that
the defendant is criminally responsible
for the taking of the whole amount,
2,277 kilowatt hours. The company had
a contract with the defendant to furnish
him with current for lighting purposes.
It could not stop the misappropriation
without cutting off the current entirely.
It could not reduce the current so as to
just furnish sufficient for the lighting of
two, three, or five lights, as claimed by
the defendant that he used during the
most of this time, but the current must
always be sufficiently strong to furnish
current for the thirty lights, at any time
the defendant desired to use them.
There is no pretense that the accused
was solicited by the company or any one
else to commit the acts charged. At most
there was a mere passive submission on
the part of the company that the current
should be taken and no indication that it
wished it to be taken, and no knowledge
by the defendant that the company
wished him to take the current, and no
mutual understanding between the
company and the defendant, and no
measures of inducement of any kind
were employed by the company for the
purpose of leading the defendant into
temptation, and no preconcert whatever
between him and company. The original
design to misappropriate this current
was formed by the defendant absolutely
independent of any acts on the part of
the company or its agents. It is true, no
doubt, as a general proposition, that

larceny is not committed when the

property is taken with the consent of its
owner. It may be difficult in some
instances to determine whether certain
acts constitute, in law, such "consent."
But under the facts in the case at bar it is
not difficult to reach a conclusion that
the acts performed by the plaintiff
company did not constitute a consent on
its part the defendant take its property.
We have been unable to find a well
considered case holding contrary
opinion under similar facts, but, there
are numerous cases holding that such
acts do not constitute such consent as
would relieve the taker of criminal
responsibility. The fourth assignment of
error is, therefore, not well founded.
It is also contended that since the
"jumper" was not used continuously, the
defendant committed not a single
offense but a series of offenses. It is, no
doubt, true that the defendant did not
allow the "jumper" to remain in place
continuously for any number of days as
the company inspected monthly the
inside meter. So the "jumper" was put
on and taken off at least monthly, if not
daily, in order to avoid detection, and
while the "jumper" was off the
defendant was not misappropriating the
current. The complaint alleged that the
defendant did on, during, and between
the 13th day of February, 1909, and the
3d of March, 1910. willfully, unlawfully,
and feloniously take, steal, and carry
away 2,277 kilowatts of electric current
of the value of P909. No demurrer was
presented against this complaint on the
ground that more than one crime was
charged. The Government had no
opportunity to amend or correct this
error, if error at all. In the case of U.
S. vs. Macaspac (12 Phil. Rep., 26), the
defendant received from one Joquina
Punu the sum of P31.50, with the
request to deliver it to Marcelina Dy-

Oco. The defendant called upon

Marcelina, but instead of delivering the
said amount she asked Marcelina for
P30 in the name of Joaquina who had in
no way authorized her to do so.
Marcelina gave her P30, believing that
Joaquina had sent for it. Counsel for the
defendant insisted that the complaint
charged his client with two different
crimes ofestafa in violation of section 11
of General Orders, No. 58. In disposing
of this question this court said:
The said defect constitutes one of the
dilatory pleas indicated by section 21,
and the accused ought to have raised the
point before the trial began. Had this
been done, the complaint might have
been amended in time, because it is
merely a defect of form easily
remedied. . . . Inasmuch as in the first
instance the accused did not make the
corresponding dilatory plea to the
irregularity of the complaint, it must be
understood that has waived such
objection, and is not now entitled to
raise for the first time any question in
reference thereto when submitting to
this court her assignment of errors.
Apart from the fact that the defense does
not pretend that any of the essential
rights of the accused have been injured,
the allegation of the defect above
alluded to, which in any case would only
affect form of the complaint, can not
justify a reversal of the judgment
appealed from, according to the
provisions of section 10 of General
Orders, No. 58.
In the case at bar it is not pointed out
wherein any of the essential rights of the
defendant have been prejudiced by
reason of the fact that the complaint
covered the entire period. If twelve
distinct and separate complaints had
been filed against the defendant, one for
each month, the sum total of the
penalties imposed might have been very

much greater than that imposed by the

court in this case. The covering of the
entire period by one charge has been
beneficial, if anything, and not
prejudicial to the rights of the
defendant. The prosecuting attorney
elected to cover the entire period with
one charge and the accused having been
convicted for this offense, he can not
again be prosecuted for the stealing of
the current at any time within that
period. Then, again, we are of the
opinion that the charge was properly
laid. The electricity was stolen from the
same person, in the same manner, and
in the same place. It was substantially
one continuous act, although the
"jumper" might have been removed and
replaced daily or monthly. The
defendant was moved by one impulse to
appropriate to his own use the current,
and the means adopted by him for the
taking of the current were in the
execution of a general fraudulent plan.
A person stole gas for the use of a
manufactory by means of pipe, which
drew off the gas from the main without
allowing it to pass through the meter.
The gas from this pipe was burnt every
day, and turned off at night. The pipe
was never closed at this junction with
the main, and consequently always
remained full of gas. It was held, that if
the pipe always remained full, there was,
in fact, a continuous taking of the gas
and not a series of separate talkings. It
was held also that even if the pipe had
not been kept full, the taking would have
been continuous, as it was substantially
all one transaction. (Regina vs. Firth, L.
R., 1 C. C., 172; 11 Cox C. C., 234. Cited
on p. 758 of Wharton's Criminal Law,
vol. 1, 10th ed.)
The value of the electricity taken by the
defendant was found by the trial court to
be P865.26. This finding is fully in
accordance with the evidence presented.

So no error was committed in

sentencing the defendant to indemnify
the company in this amount, or to suffer
the
corresponding
subsidiary
imprisonment in case of insolvency.
The judgment being strictly in
accordance with the law and the merits
of the case, same is hereby affirmed,
with costs against the appellant.
Arellano, C.J., Torres, Mapa and
Carson, JJ.
G.R. No. 155076
February
27, 2006
LUIS
MARCOS
P.
LAUREL, Petitioner,
vs.
HON.
ZEUS
C.
ABROGAR,
Presiding Judge of the Regional
Trial Court, Makati City, Branch
150,
PEOPLE
OF
THE
PHILIPPINES&
PHILIPPINE
LONG DISTANCE TELEPHONE
COMPANY, Respondents.
DECISION
CALLEJO, SR., J.:
Before us is a Petition for Review on
Certiorari of the Decision1 of the Court
of Appeals (CA) in CA-G.R. SP No.
68841 affirming the Order issued by
Judge Zeus C. Abrogar, Regional Trial
Court (RTC), Makati City, Branch 150,
which denied the "Motion to Quash
(With Motion to Defer Arraignment)" in
Criminal Case No. 99-2425 for theft.
Philippine Long Distance Telephone
Company (PLDT) is the holder of a
legislative franchise to render local and
international
telecommunication
services under Republic Act No.
7082.2 Under said law, PLDT is
authorized
to
establish,
operate,
manage, lease, maintain and purchase
telecommunication systems, including
transmitting, receiving and switching
stations, for both domestic and
international calls. For this purpose, it
has installed an estimated 1.7 million

telephone lines nationwide. PLDT also

offers other services as authorized by
Certificates of Public Convenience and
Necessity (CPCN) duly issued by the
National
Telecommunications
Commission (NTC), and operates and
maintains an International Gateway
Facility (IGF). The PLDT network is
thus principally composed of the Public
Switch Telephone Network (PSTN),
telephone
handsets
and/or
telecommunications equipment used by
its subscribers, the wires and cables
linking said telephone handsets and/or
telecommunications
equipment,
antenna,
the
IGF,
and
other
telecommunications equipment which
provide interconnections.3 1avvphil.net
PLDT alleges that one of the alternative
calling patterns that constitute network
fraud and violate its network integrity is
that which is known as International
Simple Resale (ISR). ISR is a method of
routing and completing international
long distance calls using International
Private Leased Lines (IPL), cables,
antenna or air wave or frequency, which
connect directly to the local or domestic
exchange facilities of the terminating
country (the country where the call is
destined). The IPL is linked to switching
equipment which is connected to a
PLDT telephone line/number. In the
process, the calls bypass the IGF found
at the terminating country, or in some
instances, even those from the
originating country.4
One such alternative calling service is
that offered by Baynet Co., Ltd. (Baynet)
which sells "Bay Super Orient Card"
phone cards to people who call their
friends and relatives in the Philippines.
With said card, one is entitled to a 27minute call to the Philippines for about
37.03 per minute. After dialing the ISR
access number indicated in the phone
card, the ISR operator requests the

subscriber to give the PIN number also

indicated in the phone card. Once the
callers identity (as purchaser of the
phone card) is confirmed, the ISR
operator will then provide a Philippine
local line to the requesting caller via the
IPL. According to PLDT, calls made
through the IPL never pass the toll
center of IGF operators in the
Philippines. Using the local line, the
Baynet card user is able to place a call to
any point in the Philippines, provided
the local line is National Direct Dial
(NDD) capable.5
PLDT asserts that Baynet conducts its
ISR activities by utilizing an IPL to
course its incoming international long
distance calls from Japan. The IPL is
linked to switching equipment, which is
then connected to PLDT telephone
lines/numbers and equipment, with
Baynet as subscriber. Through the use of
the telephone lines and other auxiliary
equipment, Baynet is able to connect an
international long distance call from
Japan to any part of the Philippines, and
make it appear as a call originating from
Metro Manila. Consequently, the
operator of an ISR is able to evade
payment of access, termination or
bypass charges and accounting rates, as
well as compliance with the regulatory
requirements of the NTC. Thus, the ISR
operator
offers
international
telecommunication services at a lower
rate, to the damage and prejudice of
legitimate operators like PLDT.6
PLDT pointed out that Baynet utilized
the following equipment for its ISR
activities: lines, cables, and antennas or
equipment or device capable of
transmitting air waves or frequency,
such as an IPL and telephone lines and
equipment;
computers
or
any
equipment or device capable of
accepting information applying the
prescribed process of the information

and supplying the result of this process;

modems or any equipment or device
that enables a data terminal equipment
such as computers to communicate with
other data terminal equipment via a
telephone line; multiplexers or any
equipment or device that enables two or
more signals from different sources to
pass through a common cable or
transmission line; switching equipment,
or equipment or device capable of
connecting
telephone
lines;
and
software, diskettes, tapes or equipment
or device used for recording and storing
information.7
PLDT also discovered that Baynet
subscribed to a total of 123 PLDT
telephone lines/numbers.8 Based on the
Traffic Study conducted on the volume
of calls passing through Baynets ISR
network which bypass the IGF toll
center, PLDT incurred an estimated
monthly
loss
of
P10,185,325.96.9 Records
at
the
Securities and Exchange Commission
(SEC) also revealed that Baynet was not
authorized to provide international or
domestic long distance telephone service
in the country. The following are its
officers: Yuji Hijioka, a Japanese
national (chairman of the board of
directors); Gina C. Mukaida, a Filipina
(board member and president); Luis
Marcos P. Laurel, a Filipino (board
member and corporate secretary); Ricky
Chan Pe, a Filipino (board member and
treasurer); and Yasushi Ueshima, also a
Japanese national (board member).
Upon complaint of PLDT against Baynet
for network fraud, and on the strength
of two search warrants10 issued by the
RTC of Makati, Branch 147, National
Bureau of Investigation (NBI) agents
searched its office at the 7th Floor, SJG
Building, Kalayaan Avenue, Makati City
on November 8, 1999. Atsushi
Matsuura, Nobuyoshi Miyake, Edourd

D. Lacson and Rolando J. Villegas were

arrested by NBI agents while in the act
of manning the operations of Baynet.
Seized in the premises during the search
were numerous equipment and devices
used in its ISR activities, such as
multiplexers,
modems,
computer
monitors, CPUs, antenna, assorted
computer
peripheral
cords
and
microprocessors, cables/wires, assorted
PLDT statement of accounts, parabolic
antennae and voltage regulators.
State Prosecutor Ofelia L. Calo
conducted an inquest investigation and
issued a Resolution11 on January 28,
2000, finding probable cause for theft
under Article 308 of the Revised Penal
Code and Presidential Decree No.
40112 against the respondents therein,
including Laurel.
On February 8, 2000, State Prosecutor
Calo filed an Information with the RTC
of Makati City charging Matsuura,
Miyake, Lacson and Villegas with theft
under Article 308 of the Revised Penal
Code. After conducting the requisite
preliminary investigation, the State
Prosecutor
filed
an
Amended
Information impleading Laurel (a
partner in the law firm of Ingles, Laurel,
Salinas, and, until November 19, 1999, a
member of the board of directors and
corporate secretary of Baynet), and the
other members of the board of directors
of said corporation, namely, Yuji
Hijioka, Yasushi Ueshima, Mukaida,
Lacson and Villegas, as accused for theft
under Article 308 of the Revised Penal
Code. The inculpatory portion of the
Amended Information reads:
On or about September 10-19, 1999, or
prior thereto, in Makati City, and within
the jurisdiction of this Honorable Court,
the
accused,
conspiring
and
confederating together and all of them
mutually helping and aiding one
another, with intent to gain and without

the knowledge and consent of the

Philippine Long Distance Telephone
(PLDT), did then and there willfully,
unlawfully and feloniously take, steal
and use the international long distance
calls belonging to PLDT by conducting
International Simple Resale (ISR),
which is a method of routing and
completing international long distance
calls using lines, cables, antennae,
and/or air wave frequency which
connect directly to the local or domestic
exchange facilities of the country where
the call is destined, effectively stealing
this business from PLDT while using its
facilities in the estimated amount of
P20,370,651.92 to the damage and
prejudice of PLDT, in the said amount.
CONTRARY TO LAW.13
Accused Laurel filed a "Motion to Quash
(with Motion to Defer Arraignment)" on
the ground that the factual allegations in
the Amended Information do not
constitute the felony of theft under
Article 308 of the Revised Penal Code.
He averred that the Revised Penal Code,
or any other special penal law for that
matter, does not
prohibit
ISR
operations. He claimed that telephone
calls with the use of PLDT telephone
lines, whether domestic or international,
belong to the persons making the call,
not to PLDT. He argued that the caller
merely uses the facilities of PLDT, and
what the latter owns are the
telecommunication infrastructures or
facilities through which the call is made.
He also asserted that PLDT is
compensated for the callers use of its
facilities by way of rental; for an
outgoing overseas call, PLDT charges
the caller per minute, based on the
duration of the call. Thus, no personal
property was stolen from PLDT.
According to Laurel, the P20,370,651.92
stated in the Information, if anything,
represents the rental for the use of PLDT

facilities, and not the value of anything

owned by it. Finally, he averred that the
allegations in the Amended Information
are already subsumed under the
Information for violation of Presidential
Decree (P.D.) No. 401 filed and pending
in the Metropolitan Trial Court of
Makati City, docketed as Criminal Case
No. 276766.
The prosecution, through private
complainant PLDT, opposed the
motion,14 contending that the movant
unlawfully took personal property
belonging to it, as follows: 1) intangible
telephone services that are being offered
by PLDT and other telecommunication
companies, i.e., the connection and
interconnection to their telephone
lines/facilities; 2) the use of those
facilities over a period of time; and 3)
the revenues derived in connection with
the rendition of such services and the
use of such facilities.15
The prosecution asserted that the use of
PLDTs
intangible
telephone
services/facilities allows electronic voice
signals to pass through the same, and
ultimately to the called partys number.
It averred that such service/facility is
akin to electricity which, although an
intangible property, may, nevertheless,
be appropriated and be the subject of
theft. Such service over a period of time
for a consideration is the business that
PLDT provides to its customers, which
enables the latter to send various
messages to installed recipients. The
service rendered by PLDT is akin to
merchandise which has specific value,
and therefore, capable of appropriation
by another, as in this case, through the
ISR operations conducted by the movant
and his co-accused.
The prosecution further alleged that
"international business calls and
revenues constitute personal property
envisaged in Article 308 of the Revised

Penal Code." Moreover, the intangible

telephone services/facilities belong to
PLDT and not to the movant and the
other accused, because they have no
telephone services and facilities of their
own duly authorized by the NTC; thus,
the taking by the movant and his coaccused of PLDT services was with
intent to gain and without the latters
consent.
The prosecution pointed out that the
accused, as well as the movant, were
paid in exchange for their illegal
appropriation and use of PLDTs
telephone services and facilities; on the
other hand, the accused did not pay a
single centavo for their illegal ISR
operations. Thus, the acts of the accused
were akin to the use of a "jumper" by a
consumer to deflect the current from the
house electric meter, thereby enabling
one to steal electricity. The prosecution
emphasized that its position is fortified
by the Resolutions of the Department of
Justice in PLDT v. Tiongson, et al. (I.S.
No. 97-0925) and in PAOCTF-PLDT v.
Elton John Tuason, et al. (I.S. No. 2000370) which were issued on August 14,
2000 finding probable cause for theft
against the respondents therein.
On September 14, 2001, the RTC issued
an Order16 denying the Motion to Quash
the Amended Information. The court
declared that, although there is no law
that expressly prohibits the use of ISR,
the facts alleged in the Amended
Information "will show how the alleged
crime was committed by conducting
ISR," to the damage and prejudice of
PLDT.
Laurel
filed
a
Motion
for
Reconsideration17 of the Order, alleging
that international long distance calls are
not personal property, and are not
capable of appropriation. He maintained
that business or revenue is not
considered personal property, and that

the prosecution failed to adduce proof of

its existence and the subsequent loss of
personal property belonging to another.
Citing the ruling of the Court in United
States v. De Guzman,18Laurel averred
that the case is not one with telephone
calls which originate with a particular
caller and terminates with the called
party. He insisted that telephone calls
are
considered
privileged
communications under the Constitution
and cannot be considered as "the
property of PLDT." He further argued
that there is no kinship between
telephone calls and electricity or gas, as
the latter are forms of energy which are
generated and consumable, and may be
considered as personal property because
of such characteristic. On the other
hand, the movant argued, the telephone
business is not a form of energy but is an
activity.
In its Order19 dated December 11, 2001,
the RTC denied the movants Motion for
Reconsideration. This time, it ruled that
what was stolen from PLDT was its
"business" because, as alleged in the
Amended Information, the international
long distance calls made through the
facilities of PLDT formed part of its
business. The RTC noted that the
movant was charged with stealing the
business of PLDT. To support its ruling,
it cited Strochecker v. Ramirez,20 where
the Court ruled that interest in business
is personal property capable of
appropriation. It further declared that,
through their ISR operations, the
movant and his co-accused deprived
PLDT of fees for international long
distance calls, and that the ISR used by
the movant and his co-accused was no
different from the "jumper" used for
stealing electricity.
Laurel then filed a Petition for Certiorari
with the CA, assailing the Order of the
RTC. He alleged that the respondent

judge gravely abused his discretion in

denying his Motion to Quash the
Amended Information.21 As gleaned
from the material averments of the
amended information, he was charged
with stealing the international long
distance calls belonging to PLDT, not its
business. Moreover, the RTC failed to
distinguish between the business of
PLDT
(providing
services
for
international long distance calls) and the
revenues derived therefrom. He opined
that a "business" or its revenues cannot
be considered as personal property
under Article 308 of the Revised Penal
Code, since a "business" is "(1) a
commercial or mercantile activity
customarily engaged in as a means of
livelihood and typically involving some
independence of judgment and power of
decision; (2) a commercial or industrial
enterprise;
and
(3)
refers
to
transactions, dealings or intercourse of
any nature." On the other hand, the
term "revenue" is defined as "the income
that comes back from an investment (as
in real or personal property); the annual
or periodical rents, profits, interests, or
issues of any species of real or personal
property."22
Laurel further posited that an electric
companys business is the production
and distribution of electricity; a gas
companys business is the production
and/or distribution of gas (as fuel);
while a water companys business is the
production and distribution of potable
water. He argued that the "business" in
all these cases is the commercial activity,
while the goods and merchandise are the
products of such activity. Thus, in
prosecutions for theft of certain forms of
energy, it is the electricity or gas which
is alleged to be stolen and not the
"business" of providing electricity or gas.
However, since a telephone company
does not produce any energy, goods or

merchandise and merely renders a

service or, in the words of PLDT, "the
connection and interconnection to their
telephone lines/facilities," such service
cannot be the subject of theft as defined
in Article 308 of the Revised Penal
Code.23
He further declared that to categorize
"business" as personal property under
Article 308 of the Revised Penal Code
would lead to absurd consequences; in
prosecutions for theft of gas, electricity
or water, it would then be permissible to
allege in the Information that it is the
gas business, the electric business or the
water business which has been stolen,
and no longer the merchandise
produced by such enterprise.24
Laurel further cited the Resolution of
the Secretary of Justice in Piltel v.
Mendoza,25 where it was ruled that the
Revised Penal Code, legislated as it was
before present technological advances
were even conceived, is not adequate to
address the novel means of "stealing"
airwaves or airtime. In said resolution, it
was noted that the inadequacy
prompted the filing of Senate Bill 2379
(sic)
entitled
"The
AntiTelecommunications Fraud of 1997" to
deter cloning of cellular phones and
other forms of communications fraud.
The said bill "aims to protect in number
(ESN) (sic) or Capcode, mobile
identification number (MIN), electronicinternational mobile equipment identity
(EMEI/IMEI), or subscriber identity
module" and "any attempt to duplicate
the data on another cellular phone
without the consent of a public
telecommunications entity would be
punishable by law."26 Thus, Laurel
concluded, "there is no crime if there is
no law punishing the crime."
On August 30, 2002, the CA rendered
judgment dismissing the petition.27 The
appellate court ruled that a petition for

certiorari under Rule 65 of the Rules of

Court was not the proper remedy of the
petitioner. On the merits of the petition,
it held that while business is generally
an activity
which is abstract and intangible in form,
it is nevertheless considered "property"
under Article 308 of the Revised Penal
Code. The CA opined that PLDTs
business of providing international calls
is personal property which may be the
object of theft, and cited United States v.
Carlos28 to support such conclusion. The
tribunal also cited Strochecker v.
Ramirez,29 where this Court ruled that
one-half interest in a days business is
personal property under Section 2 of Act
No. 3952, otherwise known as the Bulk
Sales Law. The appellate court held that
the operations of the ISR are not
subsumed in the charge for violation of
P.D. No. 401.
Laurel, now the petitioner, assails the
decision of the CA, contending that THE COURT OF APPEALS ERRED IN
RULING THAT THE PERSONAL
PROPERTY ALLEGEDLY STOLEN PER
THE INFORMATION IS NOT THE
"INTERNATIONAL LONG DISTANCE
CALLS" BUT THE "BUSINESS OF
PLDT."
THE COURT OF APPEALS ERRED IN
RULING
THAT
THE
TERM
"BUSINESS" IS PERSONAL PROPERTY
WITHIN THE MEANING OF ART. 308
OF THE REVISED PENAL CODE.30
Petitioner avers that the petition for a
writ of certiorari may be filed to nullify
an interlocutory order of the trial court
which was issued with grave abuse of
discretion amounting to excess or lack of
jurisdiction. In support of his petition
before the Court, he reiterates the
arguments in his pleadings filed before
the CA. He further claims that while the
right to carry on a business or an
interest or participation in business is

considered property under the New Civil

Code, the term "business," however, is
not. He asserts that the Philippine
Legislature, which approved the Revised
Penal Code way back in January 1, 1932,
could not have contemplated to include
international long distance calls and
"business" as personal property under
Article 308 thereof.
In its comment on the petition, the
Office of the Solicitor General (OSG)
maintains that the amended information
clearly states all the essential elements
of the crime of theft. Petitioners
interpretation as to whether an
"international long distance call" is
personal property under the law is
inconsequential, as a reading of the
amended information readily reveals
that specific acts and circumstances
were alleged charging Baynet, through
its officers, including petitioner, of
feloniously taking, stealing and illegally
using international long distance calls
belonging to respondent PLDT by
conducting ISR operations, thus,
"routing and completing international
long distance calls using lines, cables,
antenna and/or airwave frequency
which connect directly to the local or
domestic exchange facilities of the
country where the call is destined." The
OSG maintains that the international
long distance calls alleged in the
amended
information
should
be
construed to mean "business" of PLDT,
which, while abstract and intangible in
form, is personal property susceptible of
appropriation.31 The OSG avers that
what was stolen by petitioner and his coaccused is the business of PLDT
providing international long distance
calls which, though intangible, is
personal property of the PLDT.32
For its part, respondent PLDT asserts
that personal property under Article 308
of the Revised Penal Code comprehends

intangible property such as electricity

and gas which are valuable articles for
merchandise, brought and sold like
other personal property, and are capable
of appropriation. It insists that the
business of international calls and
revenues constitute personal property
because the same are valuable articles of
merchandise. The respondent reiterates
that international calls involve (a) the
intangible telephone services that are
being offered by it, that is, the
connection and interconnection to the
telephone network, lines or facilities; (b)
the use of its telephone network, lines or
facilities over a period of time; and (c)
the income derived in connection
therewith.33
PLDT further posits that business
revenues or the income derived in
connection with the rendition of such
services and the use of its telephone
network, lines or facilities are personal
properties under Article 308 of the
Revised Penal Code; so is the use of said
telephone services/telephone network,
lines or facilities which allow electronic
voice signals to pass through the same
and ultimately to the called partys
number. It is akin to electricity which,
though intangible property, may
nevertheless be appropriated and can be
the object of theft. The use of
respondent PLDTs telephone network,
lines, or facilities over a period of time
for consideration is the business that it
provides to its customers, which enables
the latter to send various messages to
intended recipients. Such use over a
period of time is akin to merchandise
which has value and, therefore, can be
appropriated by another. According to
respondent PLDT, this is what actually
happened when petitioner Laurel and
the other accused below conducted
illegal ISR operations.34
The petition is meritorious.

The issues for resolution are as follows:

(a) whether or not the petition for
certiorari is the proper remedy of the
petitioner in the Court of Appeals; (b)
whether or not international telephone
calls using Bay Super Orient Cards
through the telecommunication services
provided by PLDT for such calls, or, in
short, PLDTs business of providing said
telecommunication services, are proper
subjects of theft under Article 308 of the
Revised Penal Code; and (c) whether or
not the trial court committed grave
abuse of discretion amounting to excess
or lack of jurisdiction in denying the
motion of the petitioner to quash the
amended information.
On the issue of whether or not the
petition for certiorari instituted by the
petitioner in the CA is proper, the
general rule is that a petition for
certiorari under Rule 65 of the Rules of
Court, as amended, to nullify an order
denying a motion to quash the
Information is inappropriate because
the aggrieved party has a remedy of
appeal in the ordinary course of law.
Appeal and certiorari are mutually
exclusive of each other. The remedy of
the aggrieved party is to continue with
the case in due course and, when an
unfavorable judgment is rendered, assail
the order and the decision on appeal.
However, if the trial court issues the
order denying the motion to quash the
Amended Information with grave abuse
of discretion amounting to excess or lack
of jurisdiction, or if such order is
patently erroneous, or null and void for
being contrary to the Constitution, and
the remedy of appeal would not afford
adequate and expeditious relief, the
accused may resort to the extraordinary
remedy of certiorari.35 A special civil
action for certiorari is also available
where there are special circumstances
clearly demonstrating the inadequacy of

an appeal. As this Court held in Bristol

Myers Squibb (Phils.), Inc. v. Viloria:36
Nonetheless, the settled rule is that a
writ of certiorari may be granted in
cases where, despite availability of
appeal after trial, there is at least a
prima facie showing on the face of the
petition and its annexes that: (a) the
trial court issued the order with grave
abuse of discretion amounting to lack of
or in excess of jurisdiction; (b) appeal
would not prove to be a speedy and
adequate remedy; (c) where the order is
a patent nullity; (d) the decision in the
present case will arrest future
litigations;
and
(e)
for certain
considerations such as public welfare
and public policy.37
In his petition for certiorari in the CA,
petitioner averred that the trial court
committed grave abuse of its discretion
amounting to excess or lack of
jurisdiction when it denied his motion to
quash the Amended Information despite
his claim that the material allegations in
the Amended Information do not charge
theft under Article 308 of the Revised
Penal Code, or any offense for that
matter. By so doing, the trial court
deprived him of his constitutional right
to be informed of the nature of the
charge against him. He further averred
that the order of the trial court is
contrary to the constitution and is, thus,
null and void. He insists that he should
not be compelled to undergo the rigors
and tribulations of a protracted trial and
incur expenses to defend himself against
a non-existent charge.
Petitioner is correct.
An information or complaint must state
explicitly and directly every act or
omission constituting an offense38 and
must allege facts establishing conduct
that
a
penal
statute
makes
criminal;39 and describes the property
which is the subject of theft to advise the

accused with reasonable certainty of the

accusation he is called upon to meet at
the trial and to enable him to rely on the
judgment thereunder of a subsequent
prosecution for the same offense. 40 It
must show, on its face, that if the alleged
facts are true, an offense has been
committed. The rule is rooted on the
constitutional right of the accused to be
informed of the nature of the crime or
cause of the accusation against him. He
cannot be convicted of an offense even if
proven unless it is alleged or necessarily
included in the Information filed against
him.
As a general prerequisite, a motion to
quash on the ground that the
Information does not constitute the
offense charged, or any offense for that
matter, should be resolved on the basis
of said allegations whose truth and
veracity
are
hypothetically
committed;41 and on additional facts
admitted or not denied by the
prosecution.42 If the facts alleged in the
Information do not constitute an
offense, the complaint or information
should be quashed by the court.43
We have reviewed the Amended
Information and find that, as mentioned
by the petitioner, it does not contain
material allegations charging the
petitioner of theft of personal property
under Article 308 of the Revised Penal
Code. It, thus, behooved the trial court
to quash the Amended Information. The
Order of the trial court denying the
motion of the petitioner to quash the
Amended Information is a patent
nullity.
On the second issue, we find and so hold
that the international telephone calls
placed by Bay Super Orient Card
holders, the telecommunication services
provided by PLDT and its business of
providing said services are not personal
properties under Article 308 of the

Revised Penal Code. The construction by

the respondents of Article 308 of the
said Code to include, within its coverage,
the aforesaid international telephone
calls, telecommunication services and
business is contrary to the letter and
intent of the law.
The rule is that, penal laws are to be
construed strictly. Such rule is founded
on the tenderness of the law for the
rights of individuals and on the plain
principle that the power of punishment
is vested in Congress, not in the judicial
department. It is Congress, not the
Court, which is to define a crime, and
ordain its punishment.44 Due respect for
the prerogative of Congress in defining
crimes/felonies constrains the Court to
refrain from a broad interpretation of
penal
laws
where
a
"narrow
interpretation" is appropriate. The Court
must take heed to language, legislative
history and purpose, in order to strictly
determine the wrath and breath of the
conduct the law forbids.45 However,
when the congressional purpose is
unclear, the court must apply the rule of
lenity, that is, ambiguity concerning the
ambit of criminal statutes should be
resolved in favor of lenity.46
Penal statutes may not be enlarged by
implication or intent beyond the fair
meaning of the language used; and may
not be held to include offenses other
than those which are clearly described,
notwithstanding that the Court may
think that Congress should have made
them more comprehensive.47 Words and
phrases in a statute are to be construed
according to their common meaning and
accepted usage.
As Chief Justice John Marshall declared,
"it would be dangerous, indeed, to carry
the principle that a case which is within
the reason or
mischief of a statute is within its
provision, so far as to punish a crime not

enumerated in the statute because it is

of equal atrocity, or of kindred character
with
those
which
are
enumerated.48 When
interpreting
a
criminal statute that does not explicitly
reach the conduct in question, the Court
should not base an expansive reading on
inferences from subjective and variable
understanding.49
Article 308 of the Revised Penal Code
defines theft as follows:
Art. 308. Who are liable for theft. Theft
is committed by any person who, with
intent to gain but without violence,
against or intimidation of persons nor
force upon things, shall take personal
property of another without the latters
consent.
The provision was taken from Article
530 of the Spanish Penal Code which
reads:
1. Los que con nimo de lucrarse, y sin
violencia o intimidacin en las personas
ni fuerza en las cosas, toman las cosas
muebles ajenas sin la voluntad de su
dueo.50
For one to be guilty of theft, the accused
must have an intent to steal (animus
furandi) personal property, meaning the
intent to deprive another of his
ownership/lawful possession of personal
property which intent is apart from and
concurrently with the general criminal
intent which is an essential element of a
felony of dolo (dolus malus).
An information or complaint for simple
theft must allege the following elements:
(a) the taking of personal property; (b)
the said property belongs to another; (c)
the taking be done with intent to gain;
and (d) the taking be accomplished
without the use of violence or
intimidation of person/s or force upon
things.51
One is apt to conclude that "personal
property" standing alone, covers both
tangible and intangible properties and

are subject of theft under the Revised

Penal Code. But the words "Personal
property" under the Revised Penal Code
must be considered in tandem with the
word "take" in the law. The statutory
definition of "taking" and movable
property indicates that, clearly, not all
personal properties may be the proper
subjects of theft. The general rule is that,
only movable properties which have
physical or material existence and
susceptible of occupation by another are
proper objects of theft.52 As explained by
Cuelo Callon: "Cosa juridicamente es
toda sustancia corporal, material,
susceptible de ser aprehendida que
tenga un valor cualquiera."53
According to Cuello Callon, in the
context of the Penal Code, only those
movable properties which can be taken
and carried from the place they are
found are proper subjects of theft.
Intangible properties such as rights and
ideas are not subject of theft because the
same cannot be "taken" from the place it
is found and is occupied or
appropriated.
Solamente las cosas muebles y
corporales pueden ser objeto de hurto.
La sustraccin de cosas inmuebles y la
cosas incorporales (v. gr., los derechos,
las ideas) no puede integrar este delito,
pues no es posible asirlas, tomarlas,
para conseguir su apropiacin. El
Codigo emplea la expresin "cosas
mueble" en el sentido de cosa que es
susceptible de ser llevada del lugar
donde se encuentra, como dinero, joyas,
ropas, etctera, asi que su concepto no
coincide por completo con el formulado
por el Codigo civil (arts. 335 y 336).54
Thus, movable properties under Article
308 of the Revised Penal Code should be
distinguished from the rights or
interests to which they relate. A naked
right existing merely in contemplation
of law, although it may be very valuable

to the person who is entitled to exercise

it, is not the subject of theft or
larceny.55 Such rights or interests are
intangible and cannot be "taken" by
another. Thus, right to produce oil, good
will or an interest in business, or the
right to engage in business, credit or
franchise are properties. So is the credit
line represented by a credit card.
However, they are not proper subjects of
theft or larceny because they are without
form or substance, the mere "breath" of
the Congress. On the other hand, goods,
wares and merchandise of businessmen
and credit cards issued to them are
movable properties with physical and
material existence and may be taken by
another; hence, proper subjects of theft.
There is "taking" of personal property,
and theft is consummated when the
offender unlawfully acquires possession
of personal property even if for a short
time; or if such property is under the
dominion and control of the thief. The
taker, at some particular amount, must
have obtained complete and absolute
possession and control of the property
adverse to the rights of the owner or the
lawful possessor thereof.56 It is not
necessary that the property be actually
carried away out of the physical
possession of the lawful possessor or
that he should have made his escape
with it.57 Neither asportation nor actual
manual possession of property is
required. Constructive possession of the
thief of the property is enough.58
The essence of the element is the taking
of a thing out of the possession of the
owner without his privity and consent
and without animus revertendi.59
Taking may be by the offenders own
hands, by his use of innocent persons
without any felonious intent, as well as
any mechanical device, such as an access
device or card, or any agency, animate
or inanimate, with intent to gain. Intent

to gain includes the unlawful taking of

personal property for the purpose of
deriving utility, satisfaction, enjoyment
and pleasure.60
We agree with the contention of the
respondents that intangible properties
such as electrical energy and gas are
proper subjects of theft. The reason for
this is that, as explained by this Court in
United States v. Carlos61 and United
States v. Tambunting,62 based on
decisions of the Supreme Court of Spain
and of the courts in England and the
United States of America, gas or
electricity are capable of appropriation
by another other than the owner. Gas
and electrical energy may be taken,
carried away and appropriated. In
People v. Menagas,63 the Illinois State
Supreme Court declared that electricity,
like gas, may be seen and felt.
Electricity, the same as gas, is a valuable
article of merchandise, bought and sold
like other personal property and is
capable of appropriation by another. It
is a valuable article of merchandise,
bought and sold like other personal
property, susceptible of being severed
from a mass or larger quantity and of
being transported from place to place.
Electrical energy may, likewise, be taken
and carried away. It is a valuable
commodity, bought and sold like other
personal property. It may be transported
from place to place. There is nothing in
the nature of gas used for illuminating
purposes which renders it incapable of
being feloniously taken and carried
away.
In People ex rel Brush Electric
Illuminating Co. v. Wemple,64 the Court
of Appeals of New York held that electric
energy is manufactured and sold in
determinate quantities at a fixed price,
precisely as are coal, kerosene oil, and
gas. It may be conveyed to the premises
of the consumer, stored in cells of

different capacity known as an

accumulator; or it may be sent through a
wire, just as gas or oil may be
transported either in a close tank or
forced through a pipe. Having reached
the premises of the consumer, it may be
used in any way he may desire, being,
like illuminating gas, capable of being
transformed either into heat, light, or
power, at the option of the purchaser. In
Woods v. People,65 the Supreme Court of
Illinois declared that there is nothing in
the nature of gas used for illuminating
purposes which renders it incapable of
being feloniously taken and carried
away. It is a valuable article of
merchandise, bought and sold like other
personal property, susceptible of being
severed from a mass or larger quantity
and of being transported from place to
place.
Gas and electrical energy should not be
equated with business or services
provided by business entrepreneurs to
the public. Business does not have an
exact definition. Business is referred as
that which occupies the time, attention
and labor of men for the purpose of
livelihood or profit. It embraces
everything that which a person can be
employed.66 Business may also mean
employment, occupation or profession.
Business is also defined as a commercial
activity
for
gain
benefit
or
advantage.67 Business, like services in
business, although are properties, are
not proper subjects of theft under the
Revised Penal Code because the same
cannot be "taken" or "occupied." If it
were otherwise, as claimed by the
respondents, there would be no juridical
difference between the taking of the
business of a person or the services
provided by him for gain, vis--vis, the
taking of goods, wares or merchandise,
or
equipment
comprising
his
business.68 If it was its intention to

include "business" as personal property

under Article 308 of the Revised Penal
Code, the Philippine Legislature should
have spoken in language that is clear
and definite: that business is personal
property under Article 308 of the
Revised Penal Code.69
We agree with the contention of the
petitioner that, as gleaned from the
material averments of the Amended
Information, he is charged of "stealing
the international long distance calls
belonging to PLDT" and the use thereof,
through the ISR. Contrary to the claims
of the OSG and respondent PLDT, the
petitioner is not charged of stealing
P20,370,651.95 from said respondent.
Said amount of P20,370,651.95 alleged
in the Amended Information is the
aggregate
amount
of
access,
transmission or termination charges
which the PLDT expected from the
international long distance calls of the
callers with the use of Baynet Super
Orient Cards sold by Baynet Co. Ltd.
In defining theft, under Article 308 of
the Revised Penal Code, as the taking of
personal property without the consent of
the owner thereof, the Philippine
legislature could not have contemplated
the human voice which is converted into
electronic impulses or electrical current
which are transmitted to the party called
through the PSTN of respondent PLDT
and the ISR of Baynet Card Ltd. within
its coverage. When the Revised Penal
Code was approved, on December 8,
1930, international telephone calls and
the transmission and routing of
electronic voice signals or impulses
emanating from said calls, through the
PSTN, IPL and ISR, were still nonexistent. Case law is that, where a
legislative history fails to evidence
congressional awareness of the scope of
the statute claimed by the respondents,
a narrow interpretation of the law is

more consistent with the usual approach

to the construction of the statute. Penal
responsibility cannot be extended
beyond the fair scope of the statutory
mandate.70
Respondent PLDT does not acquire
possession, much less, ownership of the
voices of the telephone callers or of the
electronic voice signals or current
emanating from said calls. The human
voice and the electronic voice signals or
current caused thereby are intangible
and not susceptible of possession,
occupation or appropriation by the
respondent PLDT or even the petitioner,
for that matter. PLDT merely transmits
the electronic voice signals through its
facilities and equipment. Baynet Card
Ltd., through its operator, merely
intercepts, reroutes the calls and passes
them to its toll center. Indeed, the
parties called receive the telephone calls
from Japan.
In this modern age of technology,
telecommunications
systems
have
become so tightly merged with computer
systems that it is difficult to know where
one starts and the other finishes. The
telephone set is highly computerized
and allows computers to communicate
across
long
distances.71 The
instrumentality at issue in this case is
not merely a telephone but a telephone
inexplicably linked to a computerized
communications system with the use of
Baynet Cards sold by the Baynet Card
Ltd. The corporation uses computers,
modems and software, among others,
for its ISR.72
The conduct complained of by
respondent PLDT is reminiscent of
"phreaking" (a slang term for the action
of making a telephone system to do
something that it normally should not
allow by "making the phone company
bend over and grab its ankles"). A
"phreaker" is one who engages in the act

of manipulating phones and illegally

markets telephone services.73 Unless the
phone company replaces all its
hardware,
phreaking
would
be
impossible to stop. The phone
companies in North America were
impelled to replace all their hardware
and adopted full digital switching
system known as the Common Channel
Inter Office Signaling. Phreaking
occurred only during the 1960s and
1970s, decades after the Revised Penal
Code took effect.
The petitioner is not charged, under the
Amended Information, for theft of
telecommunication
or
telephone
services offered by PLDT. Even if he is,
the term "personal property" under
Article 308 of the Revised Penal Code
cannot be interpreted beyond its seams
so as to include "telecommunication or
telephone services" or computer services
for that matter. The word "service" has a
variety of meanings dependent upon the
context, or the sense in which it is used;
and, in some instances, it may include a
sale. For instance, the sale of food by
restaurants is usually referred to as
"service," although an actual sale is
involved.74 It may also mean the duty or
labor to be rendered by one person to
another; performance of labor for the
benefit of another.75 In the case of PLDT,
it is to render local and international
telecommunications services and such
other services as authorized by the
CPCA issued by the NTC. Even at
common law, neither time nor services
may be taken and occupied or
appropriated.76A service is generally not
considered property and a theft of
service would not, therefore, constitute
theft since there can be no caption or
asportation.77 Neither
is
the
unauthorized use of the equipment and
facilities of PLDT by the petitioner theft

under the aforequoted provision of the

Revised Penal Code.78
If it was the intent of the Philippine
Legislature, in 1930, to include services
to be the subject of theft, it should have
incorporated the same in Article 308 of
the Revised Penal Code. The Legislature
did not. In fact, the Revised Penal Code
does not even contain a definition of
services.
If taking of telecommunication services
or the business of a person, is to be
proscribed, it must be by special
statute79 or an amendment of the
Revised Penal Code. Several states in the
United States, such as New York, New
Jersey, California and Virginia, realized
that their criminal statutes did not
contain any provisions penalizing the
theft of services and passed laws
defining and penalizing theft of
telephone and computer services. The
Pennsylvania Criminal Statute now
penalizes theft of services, thus:
(a) Acquisition of services. -(1) A person is guilty of theft if he
intentionally obtains services for himself
or for another which he knows are
available only for compensation, by
deception or threat, by altering or
tampering with the public utility meter
or measuring device by which such
services are delivered or by causing or
permitting such altering or tampering,
by making or maintaining any
unauthorized
connection,
whether
physically, electrically or inductively, to
a distribution or transmission line, by
attaching or maintaining the attachment
of any unauthorized device to any cable,
wire or other component of an electric,
telephone or cable television system or
to a television receiving set connected to
a cable television system, by making or
maintaining
any
unauthorized
modification or alteration to any device
installed by a cable television system, or

by false token or other trick or artifice to

avoid payment for the service.
In the State of Illinois in the United
States of America, theft of labor or
services or use of property is penalized:
(a) A person commits theft when he
obtains the temporary use of property,
labor or services of another which are
available only for hire, by means of
threat or deception or knowing that such
use is without the consent of the person
providing the property, labor or services.
In 1980, the drafters of the Model Penal
Code in the United States of America
arrived at the conclusion that labor and
services, including professional services,
have not been included within the
traditional scope of the term "property"
in ordinary theft statutes. Hence, they
decided to incorporate in the Code
Section 223.7, which defines and
penalizes theft of services, thus:
(1) A person is guilty of theft if he
purposely obtains services which he
knows
are
available
only
for
compensation, by deception or threat, or
by false token or other means to avoid
payment for the service. "Services"
include labor, professional service,
transportation, telephone or other
public service, accommodation in hotels,
restaurants or elsewhere, admission to
exhibitions, use of vehicles or other
movable property. Where compensation
for
service
is
ordinarily
paid
immediately upon the rendering of such
service, as in the case of hotels and
restaurants, refusal to pay or absconding
without payment or offer to pay gives
rise to a presumption that the service
was obtained by deception as to
intention to pay; (2) A person commits
theft if, having control over the
disposition of services of others, to
which he is not entitled, he knowingly
diverts such services to his own benefit

or to the benefit of another not entitled

thereto.
Interestingly, after the State Supreme
Court of Virginia promulgated its
decision
in
Lund
v.
Commonwealth,80declaring that neither
time nor services may be taken and
carried away and are not proper subjects
of larceny, the General Assembly of
Virginia enacted Code No. 18-2-98
which reads:
Computer time or services or data
processing services or information or
data stored in connection therewith is
hereby defined to be property which
may be the subject of larceny under
18.2-95 or 18.2-96, or embezzlement
under 18.2-111, or false pretenses
under 18.2-178.
In the State of Alabama, Section 13A-810(a)(1) of the Penal Code of Alabama of
1975 penalizes theft of services:
"A person commits the crime of theft of
services if: (a) He intentionally obtains
services known by him to be available
only for compensation by deception,
threat, false token or other means to
avoid payment for the services "
In the Philippines, Congress has not
amended the Revised Penal Code to
include theft of services or theft of
business as felonies. Instead, it
approved a law, Republic Act No. 8484,
otherwise known as the Access Devices
Regulation Act of 1998, on February 11,
1998. Under the law, an access device
means any card, plate, code, account
number, electronic serial number,
personal identification number and
other
telecommunication
services,
equipment
or
instrumentalitiesidentifier or other means of account
access that can be used to obtain money,
goods, services or any other thing of
value or to initiate a transfer of funds
other than a transfer originated solely by
paper instrument. Among the prohibited

acts enumerated in Section 9 of the law

are the acts of obtaining money or
anything of value through the use of an
access device, with intent to defraud or
intent to gain and fleeing thereafter; and
of effecting transactions with one or
more access devices issued to another
person or persons to receive payment or
any other thing of value. Under Section
11 of the law, conspiracy to commit
access devices fraud is a crime.
However, the petitioner is not charged
of violation of R.A. 8484.
Significantly, a prosecution under the
law shall be without prejudice to any
liability for violation of any provisions of
the Revised Penal Code inclusive of theft
under Rule 308 of the Revised Penal
Code and estafa under Article 315 of the
Revised Penal Code. Thus, if an
individual steals a credit card and uses
the same to obtain services, he is liable
of the following: theft of the credit card
under Article 308 of the Revised Penal
Code; violation of Republic Act No.
8484; and estafa under Article 315(2)(a)
of the Revised Penal Code with the
service provider as the private
complainant. The petitioner is not
charged of estafa before the RTC in the
Amended Information.
Section 33 of Republic Act No. 8792,
Electronic Commerce Act of 2000
provides:
Sec. 33. Penalties. The following Acts
shall be penalized by fine and/or
imprisonment, as follows:
a) Hacking or cracking which refers to
unauthorized access into or interference
in a computer system/server or
information
and
communication
system; or any access in order to
corrupt, alter, steal, or destroy using a
computer or other similar information
and communication devices, without the
knowledge and consent of the owner of
the computer or information and

communications system, including the

introduction of computer viruses and
the like, resulting on the corruption,
destruction, alteration, theft or loss of
electronic data messages or electronic
documents shall be punished by a
minimum fine of One hundred thousand
pesos (P100,000.00) and a maximum
commensurate to the damage incurred
and a mandatory imprisonment of six
(6) months to three (3) years.
IN LIGHT OF ALL THE FOREGOING,
the petition is GRANTED. The assailed
Orders of the Regional Trial Court and
the Decision of the Court of Appeals are
REVERSED and SET ASIDE. The
Regional Trial Court is directed to issue
an order granting the motion of the
petitioner to quash the Amended
Information.
SO ORDERED.
G.R. No. 18520
September 26,
1922
INVOLUNTARY INSOLVENCY OF
PAUL
STROCHECKER, appellee,
vs.
ILDEFONSO RAMIREZ, creditor and
appellant.
WILLIAM EDMONDS, assignee.
Lim
&
Lim
for
appellant.
Ross & Lawrence and Antonio T.
Carrascoso, jr., for the Fidelity &
Surety Co.
ROMUALDEZ, J.:
The question at issue in this appeal is,
which of the two mortgages here in
question must be given preference? Is it
the one in favor of the Fidelity & Surety
Co., or that in favor of Ildefonso
Ramirez. The first was declared by the
trial court to be entitled to preference.
In the lower court there were three
mortgagees each of whom claimed
preference. They were the two above
mentioned and Concepcion Ayala. The
latter's claim was rejected by the trial

court, and from that ruling she did not

appeal.
There is no question as to the priority in
time of the mortgage in favor of the
Fidelity & Surety Co. which was
executed on March 10, 1919, and
registered in due time in the registry of
property, that in favor of the appellant
being dated September 22, 1919, and
registered also in the registry.
The appellant claims preference on
these grounds: (a) That the first
mortgage above-mentioned is not valid
because the property which is the
subject-matter thereof is not capable of
being mortgaged, and the description of
said property is not sufficient; and (b)
that the amount due the appellant is a
purchase price, citing article 1922 of the
Civil Code in support thereof, and that
his mortgage is but a modification of the
security given by the debtor on February
15, 1919, that is, prior to the mortgage
executed in favor of the Fidelity & Surety
Co.
As to the first ground, the thing that was
mortgaged to this corporation is
described in the document as follows:
. . . his half interest in the drug business
known
as Antigua
Botica
Ramirez (owned by Srta. Dolores del
Rosario and the mortgagor herein
referred to as the partnership), located
at Calle Real Nos. 123 and 125, District
of Intramuros, Manila, Philippine
Islands.
With regard to the nature of the
property thus mortgaged, which is onehalf interest in the business above
described, such interest is a personal
property capable of appropriation and
not included in the enumeration of real
properties in article 335 of the Civil
Code, and may be the subject of
mortgage. All personal property may be
mortgaged. (Sec. 2, Act No. 1508.)

The description contained in the

document is sufficient. The law (sec. 7,
Act No. 1508) requires only a
description of the following nature:
The description of the mortgaged
property shall be such as to enable the
parties to the mortgage, or any other
person, after reasonable inquiry and
investigation, to identify the same.
Turning to the second error assigned,
numbers 1, 2, and 3 of article 1922 of the
Civil Code invoked by the appellant are
not applicable. Neither he, as debtor,
nor the debtor himself, is in possession
of the property mortgaged, which is, and
since the registration of the mortgage
has been, legally in possession of the
Fidelity & Surety Co. (Sec. 4, Act No.
1508; Meyers vs. Thein, 15 Phil., 303.)
In no way can the mortgage executed in
favor of the appellant on September 22,
1919, be given effect as of February 15,
1919, the date of the sale of the drug
store in question. On the 15th of
February of that year, there was a
stipulation about a persons security, but
not a mortgage upon any property, and
much less upon the property in
question.
Moreover, the appellant cannot deny the
preferential character of the mortgage in
favor of the Fidelity & Surety Co.
because in the very document executed
in his favor it was stated that his
mortgage
was
a second mortgage,
subordinate to the one made in favor of
the Fidelity & Surety Co.
The judgment appealed from is affirmed
with costs against the appellant. So
ordered.
Araullo,
C.J.,
Street,
Malcolm,
Avancea, Villamor, Ostrand and
Johns, JJ., concur.
SECOND DIVISION
G.R. No. 179408, March 05, 2014
PHILIPPINE LONG DISTANCE
TELEPHONE

COMPANY, Petitioner, v. ABIGAIL

R.
RAZON
ALVAREZ
AND
VERNON R. RAZON, Respondents.
DECISION
BRION, J.:
Before the Court is a petition for review
on certiorari1 assailing
the
decision2 dated August 11, 2006 and the
resolution3 dated August 22, 2007 of the
Court of Appeals (CA) in CAG.R. SP
No. 89213 on the validity of the four
search warrants issued by the Regional
Trial Court (RTC) of Pasay City, Branch
115.
The CA rulings (i) quashed the first two
search warrants, similarly docketed as
Search Warrant No. 03063, issued for
violation of Article 308, in relation to
Article 309, of the Revised Penal Code
(RPC), and (ii) declared void paragraphs
7, 8 and 9 of the other two search
warrants, also similarly docketed as
Search Warrant No. 03064, issued for
violation of Presidential Decree (PD)
No. 401.4
FACTUAL ANTECEDENTS
Philippine Long Distance Telephone
Company (PLDT) is the grantee of a
legislative franchise5 which authorizes it
to carry on the business of providing
basic and enhanced telecommunications
services in and between areas in the
Philippines and between the Philippines
and other countries and territories, 6and,
accordingly, to establish, operate,
manage, lease, maintain and purchase
telecommunications system for both
domestic
and
international
calls.7 Pursuant to its franchise, PLDT
offers to the public wide range of
services duly authorized by the National
Telecommunications
Commission
(NTC).
PLDTs network is principally composed

of the Public Switch Telephone Network,

telephone
handsets
and/or
telecommunications equipment used by
its subscribers, the wires and cables
linking
these
handsets
and/or
equipment, antennae, transmission
facilities, the international gateway
facility
(IGF)
and
other
telecommunications
equipment
providing
interconnections.8 To
safeguard the integrity of its network,
PLDT regularly conducts investigations
on various prepaid cards marketed and
sold abroad to determine alternative
calling patterns (ACP) and network
fraud that are being perpetrated against
it.
To prevent or stop network fraud,
PLDTs
ACP
Detection
Division
(ACPDD) regularly visits foreign
countries to conduct market research on
various prepaid phone cards offered
abroad that allow their users to make
overseas calls to PLDT subscribers in the
Philippines
at
a
cheaper
rate.
The ACPDD bought The Number
One prepaid card a card principally
marketed to Filipinos residing in the
United Kingdom for calls to the
Philippines to make test calls using
two telephone lines: the dialing
phone an IDDcapable9 telephone
line which makes the call and through
which the access number and the PIN
number printed at the back of the card
are
entered;
and the
receiving
phone a caller identification (caller
id) unitequipped telephone line which
would receive the call and reflect the
incoming callers telephone number.
During a test call placed at the PLDT
ACPDD office, the receiving phone
reflected a PLDT telephone number (2
8243285) as the calling number

used, as if the call was originating from

a local telephone in Metro Manila. Upon
verification with the PLDTs Integrated
Customer Management (billing) System,
the ACPDD learned that the subscriber
of the reflected telephone number is
Abigail R. Razon Alvarez, with address
at 17 Dominic Savio St., Savio
Compound, Barangay Don Bosco,
Paraaque City. It further learned that
several lines are installed at this address
with Abigail and Vernon R. Razon
(respondents), among others, as
subscribers.10
To validate its findings, the ACPDD
conducted the same test calls on
November 5, 2003 at the premises of the
NTC in Quezon City (and in the presence
of an NTC representative11) using the
same prepaid card (validation test). The
receiving phone at the NTC premises
reflected the telephone numbers
registered in the name of Abigail as the
calling
number from
the
United
Kingdom.12
Similar
test
calls
subsequently
conducted
using
the
prepaid
cards Unity Card and IDT Supercalling
Card revealed the same results. The
calleridequipped receiving phone
reflected telephone numbers13 that are in
the names of Experto Enterprises and
Experto Phils, as subscribers, with a
common address at No. 38 Indonesia
St., Better Living Subdivision, Barangay
Don Bosco, Paraaque City. It turned
out that the actual occupant of these
premises is also Abigail. Subsequently, a
validation test was also conducted,
yielding several telephone numbers
registered in the name of Experto
Phils./Experto Enterprises as the calling
numbers supposedly from the United
Kingdom.14

According to PLDT, had an ordinary and

legitimate call been made, the screen of
the calleridequipped receiving phone
would not reflect a local number or any
number at all. In the cards they tested,
however, once the caller enters the
access
and
pin
numbers,
the
respondents would route the call via the
internet to a local telephone number (in
this case, a PLDT telephone number)
which would connect the call to the
receiving phone. Since calls through the
internet never pass the toll center of the
PLDTs IGF, users of these prepaid cards
can place a call to any point in the
Philippines (provided the local line is
NDDcapable)
without
the
call
appearing as coming from abroad.15

were routed to the said adjacent room

passing through the house ceiling.

On November 6, 2003 and November

19, 2003, Mr. Lawrence Narciso of the
PLDTs Quality Control Division,
together with the operatives of the
Philippine National Police (PNP),
conducted an ocular inspection at 17
Dominic Savio St., Savio Compound and
at No. 38 Indonesia St., Better Living
Subdivision both in Barangay Don
Bosco, Paranaque City and discovered
that PLDT telephone lines were
connected to several pieces of
equipment.16 Mr. Narciso narrated the
results of the inspection, thus
10. During [the] ocular inspection [at 17
Dominic Savio St., Savio Compound],
Ms. Abigail Razon Alvarez allowed us to
gain entry and check the telephone
installations within their premises. First,
we checked the location of the telephone
protectors that are commonly installed
at a concrete wall boundary inside the
compound. Some of these protectors are
covered with a fabricated wooden
cabinet. Other protectors are installed
beside the said wooden cabinet, xxx. The
inside
wiring
installations
from
telephone protectors to connecting block

f.

11. xxx. Upon entering the socalled

adjacent room, we immediately noticed
that the PLDT telephone lines were
connected to the equipment situated at
multilayered rack. The equipment
room contains the following:
a.
6
Quintum
router;
b.

13

c.

Com
Cisco

router;

800

router;

d. 1 Nokia Modem for PLDT DSL;

e.

g.

Meridian
5
1

Subscribers

Personal
Computer

Unit[;]

Computers[;]
Printer[;

and]

h. 1 Flatbed Scanner[.]
12. We also noticed that these routers
are connected to the Meridians
subscriber unit ("SU ) that has an
outdoor antenna installed on the top of
the roof. Meridians SU and outdoor
antenna are service components used to
connect with wireless broadband
internet access service of Meridian
Telekoms.
xxxx
18. During the site inspection [at No. 38
Indonesia
St.,
Better
Living
Subdivision], we noticed that the
protector of each telephone line/number
xxx were enclosed in a fabricated
wooden cabinet with safety padlock.
Said wooden cabinet was situated on the
concrete wall inside the compound near
the garage entrance gate. The telephone
inside the wiring installations from the
protector to the connecting blocks were

placed in a plastic electrical conduit

routed to the adjacent room at the
second floor.17
On
December
3,
2003,
Police
Superintendent Gilbert C. Cruz filed a
consolidated application for a search
warrant18 before Judge Francisco G.
Mendiola of the RTC, for the crimes of
theft and violation of PD No. 401.
According to PLDT, the respondents are
engaged in a form of network fraud
known as International Simple Resale
(ISR) which amounts to theft under the
RPC.
ISR is a method of routing and
completing international long distance
calls using lines, cables, antennae
and/or wave frequencies which are
connected directly to the domestic
exchange facilities of the country where
the call is destined (terminating
country); and, in the process, bypassing
the IGF at the terminating country. 19
Judge Mendiola found probable cause
for the issuance of the search warrants
applied for. Accordingly, four search
warrants20 were issued for violations of
Article 308, in relation to Article 309, of
the RPC (SW A1 and SW A2) and of
PD No. 401, as amended (SW B1 and
SW B2) for the ISR activities being
conducted at 17 Dominic Savio St., Savio
Compound and at No. 38 Indonesia St.,
Better Living Subdivision, both in
Barangay Don Bosco, Paranaque City.
The four search warrants enumerated
the objects to be searched and seized as
follows:
1. MERIDIAN SUBSCRIBERS UNIT
AND PLDT DSL LINES and/or CABLES
AND ANTENNAS and/or similar
equipment or device capable of
transmitting air waves or frequency,
such as a Meridian Subscribers Unit,
Broadband DSL and telephone lines;

2. PERSONAL COMPUTERS or any

similar equipment or device capable of
accepting information applying the
prescribed process of the information
and supplying the result of this process;
3. NOKIA MODEM or any similar
equipment or device that enables data
terminal equipment such as computers
to communicate with other data
terminal equipment via a telephone line;
4. QUINTUM Equipment or any similar
equipment capable of receiving digital
signals from the internet and converting
those
signals
to
voice;
5. QUINTUM, 3COM AND CISCO
Routers or any similar equipment
capable of switching packets of data to
their assigned destination or addresses;
6. LINKS DSL SWITCH or any similar
equipment capable of switching data;
7. COMPUTER PRINTERS AND
SCANNERS or any similar equipment or
device used for copying and/or printing
data
and/or
information;
8. SOFTWARE, DISKETTES, TAPES or
any similar equipment or device used for
recording or storing information; and
9. Manuals, phone cards, access codes,
billing statements, receipts, contracts,
checks, orders, communications and
documents, lease and/or subscription
agreements
or
contracts,
communications
and
documents
relating to securing and using telephone
lines and/or equipment[.]21
On the same date, the PNP searched the
premises indicated in the warrants. On
December 10, 2003, a return was made
with a complete inventory of the items

seized.22 On January 14, 2004, the PLDT

and the PNP filed with the Department
of Justice a joint complaintaffidavit for
theft and for violation of PD No. 401
against
the
respondents.23
On February 18, 2004, the respondents
filed with the RTC a motion to
quash24 the search warrants essentially
on the following grounds: first, the RTC
had no authority to issue search
warrants which were enforced in
Paraaque
City; second,
the
enumeration of the items to be searched
and
seized
lacked
particularity;
and third, there was no probable cause
for
the
crime
of
theft.
On March 12, 2004, PLDT opposed the
respondents'
motion.25
In a July 6, 2004 order,26 the RTC
denied the respondents' motion to
quash. Having been rebuffed27in their
motion
for
reconsideration,28 the
respondents
filed
a
petition
for certiorari with the CA. 29
RULING OF THE CA
On August 11, 2006, the CA rendered
the assailed decision and resolution,
granting the respondents' petition
for certiorari. The CA quashed SW A
l and SW A2 (for theft) on the ground
that they were issued for nonexistent
crimes. 30 According to the CA, inherent
in the determination of probable cause
for the issuance of search warrant is the
accompanying determination that an
offense has been committed. Relying on
this Courts decision in Laurel v. Judge
Abrogar,31 the CA ruled that the
respondents could not have possibly
committed the crime of theft because
PLDTs
business
of
providing
telecommunication services and these
services themselves are not personal

properties contemplated under Article

308
of
the
RPC.
With respect to SW Bl and SW B
2 (for violation of PD No. 401), the CA
upheld paragraphs one to six of the
enumeration of items subject of the
search. The CA held that the stock
phrase or similar equipment or device
found in paragraphs one to six of the
search warrants did not make it suffer
from generality since each paragraphs
enumeration of items was sufficiently
qualified by the citation of the specific
objects to be seized and by its functions
which are inherently connected with the
crime
allegedly
committed.
The CA, however, nullified the ensuing
paragraphs, 7, 8 and 9, for lack of
particularity and ordered the return of
the items seized under these provisions.
While the same stock phrase appears in
paragraphs 7 and 8, the properties
described therein i.e., printer and
scanner, software, diskette and tapes
include even those for the respondents'
personal use, making the description of
the things to be seized too general in
nature.
With the denial of its motion for
reconsideration,32 PLDT went to this
Court via this Rule 45 petition.
THE PETITIONER'S ARGUMENTS
PLDT faults the CA for relying
on Laurel on
three
grounds: first,
Laurel cannot be cited yet as an
authority under the principle of stare
decisis because Laurel is not yet final
and executory; in fact, it is the subject of
a pending motion for reconsideration
filed by PLDT itself; second, even
assuming that Laurel is already final,
the facts in Laurel vary from the present
case. Laurel involves the quashalof an

information on the ground that the

information does not charge any
offense; hence, the determination of the
existence of the elements of the crime of
theft is indispensable in resolving the
motion to quash. In contrast, the
present case involves the quashal of a
search warrant. Third, accordingly, in
resolving the motion, the issuing court
only has to be convinced that there is
probable cause to hold that: (i) the items
to be seized are connected to a criminal
activity; and (ii) these items are found in
the place to be searched. Since the
matter of quashing a search warrant
may be rooted on matters extrinsic of
the search warrant, 33 the issuing court
does not need to look into the elements
of the crime allegedly committed in the
same manner that the CA did in Laurel.
PLDT adds that a finding of grave abuse
of discretion in the issuance of search
warrant may be justified only when
there is disregard of the requirements
for the issuance of a search
warrant[.] 34In the present case, the CA
did not find (and could not have found)
any grave abuse of discretion on the part
of the RTC because at the time the RTC
issued
the
search
warrants
in
2003, Laurel had
not
yet
been
promulgated.
In defending the validity of the nullified
provisions of SW Bl and SW B2,
PLDT argues that PD No. 401 also
punishes unauthorized installation of
telephone connections. Since the
enumerated items are connected to the
computers that are illegally connected to
PLDT telephone lines, then these items
bear a direct relation to the offense of
violation of PD No. 401, justifying their
seizure.
The enumeration in paragraph 8 is

likewise a proper subject of seizure

because they are the fruits of the offense
as they contain information on PLDTs
business profit and other information
relating to the commission of violation
of PD No. 401. Similarly, paragraph 9
specifies the fruits and evidence of
violation of PD No. 401 since it supports
PLDTs claim that the respondents have
made a business out of their illegal
connections to PLDT lines.
THE
RESPONDENTS'
ARGUMENTS
The
respondents
counter
that
while Laurel may not yet be final, at
least it has a persuasive effect as the
current jurisprudence on the matter.
Even
without Laurel,
the
CAs
nullification of SW Al and SW A2 can
withstand scrutiny because of the
novelty of the issue presented before it.
The nullification of paragraphs 7, 8 and
9 of SW Bl and SW B2 must be
upheld not only on the ground of
broadness but for lack of any relation
whatsoever with PD No. 401 which
punishes the theft of electricity.
OUR RULING
We partially

grant the

petition.

Laurel and its reversal by the

Court En
Banc
Before proceeding with the case, a
review of Laurel is in order as it involves
substantially similar facts as in the
present
case.
Baynet Co., Ltd. (Baynet) sells prepaid
cards, Bay Super Orient Card, that
allow their users to place a call to the
Philippines from Japan. PLDT asserted
that Baynet is engaged in ISR activities
by using an international private leased
line (IPL) to course Baynets incoming

international long distance calls. The

IPL is linked to a switching equipment,
which is then connected to PLDT
telephone
lines/numbers
and
equipment, with Baynet as subscriber.
To establish its case, PLDT obtained a
search warrant. On the strength of the
items seized during the search of
Baynets premises, the prosecutor found
probable cause for theft against Luis
Marcos Laurel (Laurel) and other
Baynet
officials.
Accordingly,
an
information was filed, alleging that the
Baynet officials take, steal and use the
international
long
distance
calls
belonging to PLDT by [ISR activities]
xxx effectively stealing this business
from PLDT while using its facilities in
the estimated amount of P20,370,651.92
to the damage and prejudice of
PLDT[.] 35
Laurel moved to quash the information
on the bold assertion that ISR activities
do not constitute a crime under
Philippine law. Laurel argued that an
ISR activity cannot entail taking of
personal
property
because
the
international long distance telephone
calls using PLDT telephone lines belong
to the caller himself; the amount stated
in the information, if at all, represents
the rentals due PLDT for the callers
usage of its facilities. Laurel argued that
the business of providing international
long distance calls, i.e., PLDTs service,
and the revenue derived therefrom are
not personal property that can be
appropriated.
Laurel went to the Court after failing to
secure the desired relief from the trial
and appellate courts,36raising the core
issue of whether PLDTs business of
providing telecommunication services
for international long distance calls is a

proper subject of theft under Article 308

of the RPC. The Courts First Division
granted Laurels petition and ordered
the quashal of the information.
Taking off from the basic rule that penal
laws are construed strictly against the
State, the Court ruled that international
long distance calls and the business of
providing
telecommunication
or
telephone services by PLDT are not
personal properties that can be the
subject of theft.
One is apt to conclude that personal
property standing alone, covers both
tangible and intangible properties and
are subject of theft under the Revised
Penal Code. But the words Personal
property under the Revised Penal Code
must be considered in tandem with the
word take in the law. The statutory
definition of taking and movable
property indicates that, clearly, not all
personal properties may be the proper
subjects of theft. The general rule is that,
only movable properties which have
physical or material existence and
susceptible of occupation by another are
proper
objects
of
theft,
xxx.
xxxx
xxx. Business, like services in business,
although are properties, are not proper
subjects of theft under the Revised Penal
Code because the same cannot be
taken or occupied. If it were
otherwise, xxx there would be no
juridical difference between the taking
of the business of a person or the
services provided by him for gain, vis
avis, the taking of goods, wares or
merchandise, or equipment comprising
his business. If it was its intention to
include business as personal property
under Article 308 of the Revised Penal
Code, the Philippine Legislature should

have spoken in language that is clear

and definite: that business is personal
property under Article 308 of the
Revised
Penal
Code.
xxxx
The petitioner is not charged, under the
Amended Information, for theft of
telecommunication
or
telephone
services offered by PLDT. Even if he
is, the term personal property under
Article 308 of the Revised Penal Code
cannot be interpreted beyond its seams
so as to include telecommunication or
telephone services or computer services
for that matter. xxx. Even at common
law, neither time nor services may be
taken and occupied or appropriated. A
service is generally not considered
property and a theft of service would
not, therefore, constitute theft since
there can be no caption or asportation.
Neither is the unauthorized use of the
equipment and facilities of PLDT by
[Laurel] theft under [Article 308].
If it was the intent of the Philippine
Legislature, in 1930, to include services
to be the subject of theft, it should have
incorporated the same in Article 308 of
the Revised Penal Code. The Legislature
did not. In fact, the Revised Penal Code
does not even contain a definition of
services.37
PLDT38 moved for reconsideration and
referral of the case to the Court En Banc.
The Courts First Division granted the
referral.
On January 13, 2009 (or while the
present petition was pending in court),
the Court En Bancunanimously granted
PLDTs
motion
for
reconsideration.39 The Court ruled that
even prior to the passage of the RPC,
jurisprudence is settled that any

personal
property,
tangible
or
intangible, corporeal or incorporeal,
capable of appropriation can be the
object of theft. 40 This jurisprudence, in
turn, applied the prevailing legal
meaning of the term personal property
under the old Civil Code as anything
susceptible of appropriation and not
included in the foregoing chapter (not
real property). 41 PLDTs telephone
service or its business of providing this
was appropriable personal property and
was, in fact, the subject of appropriation
in an ISR operation, facilitated by means
of the unlawful use of PLDTs facilities.
In
this
regard,
the
Amended
Information inaccurately describes the
offense by making it appear that what
[Laurel] took were the international long
distance telephone calls, rather than
respondent
PLDTs
business.
xxxx
Indeed, while it may be conceded that
international long distance calls, the
matter alleged to be stolen xxx, take the
form of electrical energy, it cannot be
said that such international long
distance calls were personal properties
belonging to PLDT since the latter could
not have acquired ownership over such
calls. PLDT merely encodes, augments,
enhances, decodes and transmits said
calls using its complex communications
infrastructure and facilities. PLDT not
being the owner of said telephone calls,
then it could not validly claim that such
telephone calls were taken without its
consent. It is the use of these
communications facilities without the
consent of PLDT that constitutes the
crime of theft, which is the unlawful
taking of the telephone services and
business.
Therefore, the business of providing

telecommunication and the telephone

service are personal property under
Article 308 of the Revised Penal Code,
and the act of engaging in ISR is an act
of subtraction penalized under said
article.42
The Court En Bancs reversal of
its Laurel Division ruling during the
pendency of this petition significantly
impacts on how the Court should resolve
the
present
case
for
two
reasons:chanRoblesvirtualLawlibrary
First,
the Laurel
En
Banc ruling
categorically equated an ISR activity to
theft under the RPC. In so doing,
whatever alleged factual variance there
may be between Laurel and the present
case cannot render Laurel inapplicable.
Second, and more importantly, in a Rule
45 petition, the Court basically
determines whether the CA was legally
correct in determining whether the RTC
committed grave abuse of discretion.
Under this premise, the CA ordinarily
gauges the grave abuse of discretion at
the time the RTC rendered its assailed
resolution. In quashing SW Al and SW
A2, note that the CA relied on
the Laurel Division ruling at the time
when it was still subject of a pending
motion for reconsideration. The CA, in
fact, did not expressly impute grave
abuse of discretion on the RTC when the
RTC issued the search warrants and
later
refused
to
quash
these.
Understandably, the CA could not have
really found the presence of grave abuse
of
discretion
for
there
was
no Laurel ruling to speak of at the time
the RTC issued the search warrants.
These peculiar facts require us to more
carefully analyze our prism of review
under
Rule
45.

Requisites for the issuance of

search warrant; probable cause
requires the probable existence of
an
offense
Section 2, Article III of the 1987
Constitution guarantees the right of
persons to be free from unreasonable
searches and seizures.
Section 2. The right of the people to be
secure in their persons, houses, papers,
and effects against unreasonable
searches and seizures of whatever
nature and for any purpose shall be
inviolable, and no search warrant or
warrant of arrest shall issue except
upon
probable
cause to
be
determined personally by the judge after
examination under oath or affirmation
of the complainant and the witnesses he
may
produce,
and
particularly
describing the place to be searched and
the persons or things to be seized.
The purposes of the constitutional
provision against unlawful searches and
seizures are to: (i) prevent the officers of
the law from violating private security in
person and property and illegally
invading the sanctity of the home; and
(ii)
give
remedy
against
such
usurpations
when
attempted
or
committed.43
The constitutional requirement for the
issuance of a search warrant is
reiterated under Sections 4 and 5, Rule
126 of the Revised Rules of Criminal
Procedure. These sections lay down the
following requirements for the issuance
of a search warrant: (1) the existence of
probable cause; (2) the probable cause
must be determined personally by the
judge; (3) the judge must examine, in
writing and under oath or affirmation,
the complainant and the witnesses he or
she may produce; (4) the applicant and
the witnesses testify on the facts

personally known to them; and (5) the

warrant specifically describes the place
to be searched and the things to be
seized.44 Should any of these requisites
be absent, the party aggrieved by the
issuance and enforcement of the search
warrant may file a motion to quash the
search warrant with the issuing court or
with the court where the action is
subsequently
instituted.45
A search warrant proceeding is a special
criminal and judicial process akin to a
writ of discovery. It is designed by the
Rules of Criminal Procedure to respond
only to an incident in the main case, if
one has already been instituted, or in
anticipation thereof. Since it is at most
incidental to the main criminal case, an
order granting or denying a motion to
quash a search warrant may be
questioned
only via a
petition
for certiorari under
Rule
65.46
When confronted with this petition, the
higher court must necessarily determine
the validity of the lower courts action
from the prism of whether it was tainted
with grave abuse of discretion. By grave
abuse of discretion, jurisprudence refers
to the capricious and whimsical exercise
of judgment equivalent to lack of
jurisdiction, or to the exercise of power
in an arbitrary or despotic manner by
reason of passion or personal hostility or
in a manner so patent and gross as to
amount to an invasion of positive duty
or to the virtual refusal to perform the
duty enjoined or to act at all in
contemplation
of
the
law.47
In
a certiorari proceeding,
the
determination translates to an inquiry
on whether the requirements and
limitations
provided
under
the
Constitution and the Rules of Court
were properly complied with, from the

issuance of the warrant up to its

implementation. In view of the
constitutional objective of preventing
stealthy encroachment upon or the
gradual depreciation of the rights
secured by the Constitution, strict
compliance with the constitutional and
procedural requirements is required. A
judge who issues a search warrant
without
complying
with
these
requirements commits grave abuse of
discretion.48
One of the constitutional requirements
for the validity of a search warrant is
that it must be issued based on probable
cause which, under the Rules, must
be in connection with one specific
offense. In search warrant proceedings,
probable cause is defined as such facts
and circumstances that would lead a
reasonably discreet and prudent man to
believe that an offense has been
committed and that the objects sought
in connection with the offense are in the
place sought to be searched.49
In the determination of probable cause,
the court must necessarily determine
whether an offense exists to justify the
issuance or quashal of the search
warrant50 because
the
personal
properties that may be subject of the
search warrant are very much
intertwined with the one specific
offense requirement of probable
cause.51 Contrary to PLDTs claim, the
only way to determine whether a
warrant should issue in connection with
one specific offense is to juxtapose the
facts and circumstances presented by
the applicant with the elements of the
offense that are alleged to support the
search
warrant.
Reviewing the RTCs denial of the
motion to quash SWAl and SW

A2

probable

a. From the prism of Rule 65

Columbia could easily be cited in favor

of PLDT to sustain the RTCs refusal to
quash the search warrant. Indeed, in
quashing SW Al and SW A2, the CA
never
intimated
that
the
RTC
disregarded any of the requisites for the
issuance of a search warrant as these
requirements were interpreted and
observed
under
the then
prevailing jurisprudence. The CA
could not have done so because precisely
the issue of whether telephone services
or the business of providing these
services could be the subject of theft
under the RPC had not yet reached the
Court when the search warrants were
applied
for
and
issued.

The facts of the present case easily call

to mind the case of Columbia Pictures,
Inc.
v.
CA52 involving
copyright
infringement. In that case, the CA
likewise voided the search warrant
issued by the trial court by applying a
doctrine that added a new requirement
(i.e., the production of the master tape
for comparison with the allegedly pirate
copies) in determining the existence of
probable cause for the issuance of search
warrant in copyright infringement cases.
The doctrine referred to was laid down
in 20th Century Fox Film Corporation v.
Court of Appeals. 20th Century Fox,
however, was promulgated more than
eight months after the search warrants
were issued by the RTC. In reversing the
CA,
the
Court
ruled:chanRoblesvirtualLawlibrary
Mindful as we are of the ramifications of
the doctrine of stare decisis and the
rudiments of fair play, it is our
considered view that the 20th Century
Fox ruling cannot be retroactively
applied to the instant case to justify the
quashal of Search Warrant No. 87053.
[The] petitioners' consistent position
that the order of the lower court[,] xxx
[which denied the respondents'] motion
to lift the order of search warrant^] was
properly issued, [because there was]
satisfactory compliance with the then
prevailing standards under the law for
determination of probable cause, is
indeed well taken. The lower court could
not possibly have expected more
evidence from petitioners in their
application for a search warrant other
than what the law and jurisprudence,
then existing and judicially accepted,
required with respect to the finding of

cause.53

However,
what
distinguishes Columbia from
the
present
case
is
the
focus
of Columbias legal
rationale. Columbias focus was not on
whether the facts and circumstances
would reasonably lead to the conclusion
that an offense has been or is being
committed and that the objects sought
in connection with the offense were in
the place to be searched the primary
points of focus of the present
case. Columbias focus was on whether
the evidence presented at
the
time the search warrant was
applied
for
was
sufficient to
establish the facts and circumstances
required for establishing probable cause
to
issue
a
search
warrant.
Nonetheless, Columbia serves as a neat
guide for the CA to decide the
respondents' certioraripetition.
In Columbia, the Court applied the
principle of nonretroactivity of its
ruling
in 20th Century
Fox, whose
finality was not an issue, in reversing a

CA ruling. The Courts attitude in that

case should have been adopted by the
CA in the present case a fortiori since
the ruling that the CA relied upon was
not yet final at the time the CA resolved
to quash the search warrants.
b. Supervening events justifying a
broader review under Rule 65
Ordinarily, the CAs determination
under Rule 65 is limited to whether the
RTC gravely abused its discretion in
granting or denying the motion to
quash based on facts then existing.
Nonetheless, the Court recognizes that
supervening facts may transpire after
the issuance and implementation of the
search warrant that may provide
justification for the quashal of the search
warrant via a petition forcertiorari.
For one, if the offense for which the
warrant is issued is subsequently
decriminalized during the pendency of
the petition for certiorari, then the
warrant may be quashed.54 For another,
a subsequent ruling from the Court that
a similar set of facts and circumstances
does not constitute an offense, as alleged
in the search warrant application, may
be used as a ground to quash a
warrant.55In
both
instances,
the
underlying reason for quashing the
search warrant is the absence of
probable cause which can only possibly
exist when the combination of facts and
circumstances points to the possible
commission of an offense that may be
evidenced by the personal properties
sought to be seized. To the CA, the
second instance mentioned justified the
quashal of the search warrants.
We would have readily agreed with the
CA if the Laurel Division ruling had not
been subsequently reversed. As things

turned out, however, the Court granted

PLDTs motion for reconsideration of
the Court First Divisions ruling
in Laurel and ruled that the act of
engaging in ISR is xxx penalized under
xxx article [308 of the RPC]. 56 As the
RTC itself found, PLDT successfully
established in its application for a search
warrant a probable cause for theft by
evidence that Laurels ISR activities
deprived PLDT of its telephone services
and of its business of providing these
services
without
its
consent.
b1.

the

stare

decisis

aspect

With the Court En Bancs reversal of the

earlier Laurel ruling, then the CAs
quashal of these warrants would have no
leg to stand on. This is the dire
consequence of failing to appreciate the
full import of the doctrine of stare
decisis
that
the
CA
ignored.
Under Article 8 of the Civil Code, the
decisions of this Court form part of the
countrys legal system. While these
decisions are not laws pursuant to the
doctrine of separation of powers, they
evidence the laws' meaning, breadth,
and scope and, therefore, have the same
binding
force
as
the
laws
themselves.57 Hence,
the
Courts
interpretation of a statute forms part of
the law as of the date it was originally
passed because the Courts construction
merely establishes the contemporaneous
legislative intent that the interpreted law
carries
into
effect.58
Article 8 of the Civil Code embodies the
basic principle of stare decisis et non
quieta movere (to adhere to precedents
and not to unsettle established matters)
that enjoins adherence to judicial
precedents embodied in the decision of
the Supreme Court. That decision

becomes a judicial precedent to be

followed in subsequent cases by all
courts in the land. The doctrine of stare
decisis, in turn, is based on the principle
that once a question of law has been
examined and decided, it should be
deemed settled and closed to further
argument.59 The
doctrine
of
(horizontal) stare decisisis one of policy,
grounded on the necessity of securing
certainty and stability of judicial
decisions.60
In the field of adjudication, a case
cannot yet acquire the status of a
decided
case
that
is
deemedsettled and closed to further
argument if the Courts decision is still
the
subject
of
a
motion
for
reconsideration seasonably filed by the
moving party. Under the Rules of Court,
a party is expressly allowed to file a
motion for reconsideration of the
Courts decision within 15 days from
notice.61 Since the doctrine of stare
decisis is founded on the necessity of
securing certainty and stability in law,
then these attributes will spring only
once the Courts ruling has lapsed to
finality in accordance with law. In Ting
v. VelezTing,62 we ruled that:
The principle of stare decisis enjoins
adherence by lower courts to doctrinal
rules established by this Court in
its final decisions. It is based on the
principle that once a question of law has
been examined and decided, it should be
deemed settled and closed to further
argument.
In
applying Laurel despite
PLDTs
statement that the case is still subject of
a
pending
motion
for
63
reconsideration, the CA legally erred in
refusing to reconsider its ruling that
largely relied on a nonfmal ruling of
the Court. While the CAs dutiful desire
to apply the latest pronouncement of the

Court in Laurel is expected, it should

have acted with caution, instead of
excitement, on being informed by PLDT
of
its
pending
motion
for
reconsideration; it should have then
followed the principle of stare decisis.
The appellate courts application of an
exceptional circumstance when it may
order the quashal of the search warrant
on grounds not existing at the time the
warrant was issued or implemented
must still rest on prudential grounds if
only to maintain the limitation of the
scope of the remedy of certiorari as a
writ to correct errors of jurisdiction and
not
mere
errors
of
judgment.
Still, the respondents attempt to justify
the CAs action by arguing that the CA
would still rule in the way it did 64 even
without Laurel. As PLDT correctly
pointed out, there is simply nothing in
the CAs decision that would support its
quashal of the search warrant
independently of Laurel. We must bear
in mind that the CAs quashal of SW Al
and SW A2 operated under the
strictures of a certioraripetition, where
the presence of grave abuse of discretion
is necessary for the corrective writ to
issue since the appellate court exercises
its supervisory jurisdiction in this case.
We simply cannot secondguess what
the CAs action could have been.
Lastly, the CAs reliance on Savage v.
Judge Taypin65 can neither sustain the
quashal of SW Al and SW A2.
In Savage,
the
Court
granted
the certiorari petition and quashed the
search warrant because the alleged
crime (unfair competition involving
design patents) that supported the
search warrant had already been
repealed, and the act complained of, if at
all, gave rise only to civil liability (for
patent infringement). Having been

decriminalized, probable cause for the

crime alleged could not possibly exist.
In the present case, the issue is whether
the commission of an ISR activity, in the
manner that PLDTs evidence shows,
sufficiently establishes probable cause
for the
issuance
of
search
warrantsfor the crime of theft. Unlike
in Savage, the Court in Laurel was not
confronted
with
the
issue
of
decriminalization (which is a legislative
prerogative)
but
whether
the
commission of an ISR activity meets the
elements of the offense of theft for
purposes of quashing an information.
Since the Court, in Laurel, ultimately
ruled then an ISR activity justifies the
elements of theft that must necessarily
be alleged in the information a fortiori,
the RTCs determination should be
sustained
on certiorari.
The requirement of particularity
in
SWB1
and
SWB2
On the issue of particularity in SW Bl
and SW B2, we note that the
respondents have not appealed to us the
CA ruling that sustained paragraphs 1 to
6 of the search warrants. Hence, we
shall limit our discussion to the question
of whether the CA correctly ruled that
the RTC gravely abused its discretion
insofar as it refused to quash paragraphs
7 to 9 of SW Bl and SWB2.
Aside from the requirement of probable
cause, the Constitution also requires
that
the
search
warrant
must
particularly describe the place to be
searched and the things to be seized.
This requirement of particularity in the
description, especially of the things to be
seized, is meant to enable the law
enforcers to readily identify the
properties to be seized and, thus,

prevent the seizure of the wrong items.

It seeks to leave the law enforcers with
no discretion at all regarding these
articles and to give life to the
constitutional
provision
against
unreasonable searches and seizures.66 In
other words, the requisite sufficient
particularity is aimed at preventing the
law enforcer from exercising unlimited
discretion as to what things are to be
taken under the warrant and ensure that
only those connected with the offense
for which the warrant was issued shall
be
seized.67
The requirement of specificity, however,
does not require technical accuracy in
the description of the property to be
seized. Specificity is satisfied if the
personal properties' description is as far
as the circumstances will ordinarily
allow it to be so described. The nature of
the description should vary according to
whether the identity of the property or
its
character
is
a
matter
of
concern.68 One of the tests to determine
the particularity in the description of
objects to be seized under a search
warrant is when the things described
are limited to those which bear direct
relation to the offense for which the
warrant
is
being
issued.69
Additionally, the Rules require that a
search warrant should be issued in
connection with one specific offense to
prevent the issuance of a scattershot
warrant.70 The
onespecificoffense
requirement
reinforces
the
constitutional requirement that a search
warrant should issue only on the basis of
probable cause.71 Since the primary
objective of applying for a search
warrant is to obtain evidence to be used
in a subsequent prosecution for an
offense for which the search warrant was
applied, a judge issuing a particular

warrant must satisfy himself that the

evidence presented by the applicant
establishes the facts and circumstances
relating to this specific offense for which
the
warrant
is
sought
and
issued.72 Accordingly, in a subsequent
challenge against the validity of the
warrant, the applicant cannot be allowed
to maintain its validity based on facts
and circumstances that may be related
to other search warrants but are
extrinsic to the warrant in question.

fine ranging from two thousand to six

thousand pesos, or both.73
Paragraphs 7 to 8 of SW Bl and SW B
2 read as follows:
7. COMPUTER PRINTERS AND
SCANNERS or any similar equipment or
device used for copying and/or printing
data
and/or
information;

Under the Rules, the following personal

property may be subject of search
warrant: (i) the subject of the offense;
(ii) fruits of the offense; or (iii) those
used or intended to be used as the
means of committing an offense. In the
present case, we sustain the CAs ruling
nullifying paragraphs 7, 8 and 9 of SW
Bl and SW B2 for failing the test of
particularity. More specifically, these
provisions do not show how the
enumerated items could have possibly
been connected with the crime for which
the warrant was issued, i.e., P.D. No.
401. For clarity, PD No. 401 punishes:
Section 1. Any person who installs any
water, electrical, telephone or piped
gasconnection without previous
authority from xxx the Philippine
Long
Distance
Telephone
Company, xxx, tampers and/or uses
tampered water, electrical or gas meters,
jumpers or other devices whereby water,
electricity or piped gas is stolen; steals
or pilfers water, electric or piped gas
meters, or water, electric and/or
telephone wires, or piped gas pipes or
conduits; knowingly possesses stolen or
pilfered water, electrical or gas meters as
well as stolen or pilfered water, electrical
and/or telephone wires, or piped gas
pipes and conduits, shall, upon
conviction, be punished with prision
correccional in its minimum period or a

9. Manuals, phone cards, access codes,

billing statements, receipts, contracts,
checks, orders, communications and
documents, lease and/or subscription
agreements
or
contracts,
communications
and
documents
relating to securing and using telephone
lines and/or equipment[.]74
According to PLDT, the items in
paragraph 7 have a direct relation to
violation of PD No. 401 because the
items are connected to computers that,
in turn, are linked to the unauthorized
connections to PLDT telephone lines.
With regard to the software, diskette
and tapes in paragraph 8, and the items
in paragraph 9, PLDT argues that these
items are fruits of the offense and that
the information it contains constitutes
the business profit of PLDT. According
to PLDT, it corroborates the fact that the
respondents have made a business out
of their illegal connections to its
telephone
lines.

8. SOFTWARE, DISKETTES, TAPES or

any similar equipment or device used for
recording or storing information; and

We disagree with PLDT. The fact that

the printers and scanners are or may be
connected
to
the
other
illegal
connections to the PLDT telephone lines
does not make them the subject of the
offense or fruits of the offense, much
less could they become a means of
committing
an
offense.

It is clear from PLDTs submission that

it confuses the crime for which SW Bl
and SW B2 were issued with the
crime for which SW Al and SWA
2 were issued: SW Bl and SW B2
were issued for violation of PD No. 401,
to be enforced in two different places as
identified in the warrants. The crime for
which these search warrants were issued
does not pertain to the crime of theft
where matters of personal property and
the taking thereof with intent to gain
become significant but to PD No. 401.
These items could not be the subject of a
violation of PD No. 401 since PLDT itself
does not claim that these items
themselves comprise the unauthorized
installations. For emphasis, what PD
No. 401 punishes is the unauthorized
installation of telephone connection
without the previous consent of PLDT.
In the present case, PLDT has not shown
that connecting printers, scanners,
diskettes or tapes to a computer, even if
connected to a PLDT telephone line,
would or should require its prior
authorization.
Neither could these items be a means of
committing a violation of PD No. 401
since these copying, printing and
storage devices in no way aided the
respondents in making the unauthorized
connections. While these items may be
accessory to the computers and other
equipment linked to telephone lines, PD
No. 401 does not cover this kind of items
within the scope of the prohibition. To
allow the seizure of items under the
PLDTs interpretation would, as the CA
correctly observed, allow the seizure
under the warrant of properties for
personal use of the respondents.
If PLDT seeks the seizure of these items
to prove that these installations contain

the respondents' financial gain and the

corresponding business loss to PLDT,
then that purpose is served by SW Al
and SW A2 since this is what PLDT
essentially complained of in charging
the respondents with theft. However,
the same reasoning does not justify its
seizure under a warrant for violation of
PD No. 401 since these items are not
directly connected to the PLDT
telephone lines and PLDT has not even
claimed that the installation of these
items requires prior authorization from
it.
WHEREFORE, premises considered,
the
petition
is PARTIALLY
GRANTED. The decision and the
resolution of the Court of Appeals in
CAG.R.
SP
No.
89213
are
hereby MODIFIED in that SW Al and
SW A2 are hereby declared valid and
constitutional.
SO ORDERED.
G.R. No. 195670
December
3, 2012
WILLEM
BEUMER, Petitioner,
vs.
AVELINA AMORES, Respondent.
DECISION
PERLAS-BERNABE, J.:
Before the Court is a Petition for Review
on Certiorari1 under Rule 45 of the Rules
of CoLlli assailing the October 8, 2009
Decision2 and
January
24,
2011
Resolution3 of the court of Appeals (CA)
in CA-G.R. CV No. 01940, which
affirmed the February 28, 2007
Decision4 of the Regional Trial Court
(RTC) of Negros Oriental, Branch 34 in
Civil Case No. I 2884. The foregoing
rulings
dissolved
the
conjugal
partnership of gains of Willem Beumer
(petitioner) and Avelina Amores
(respondent) and distributed the

properties forming part of the said

property regime.
The Factual Antecedents
Petitioner, a Dutch National, and
respondent, a Filipina, married in
March 29, 1980. After several years, the
RTC of Negros Oriental, Branch 32,
declared the nullity of their marriage in
the Decision5 dated November 10, 2000
on the basis of the formers
psychological
incapacity
as
contemplated in Article 36 of the Family
Code.
Consequently, petitioner filed a Petition
for
Dissolution
of
Conjugal
6
Partnership dated December 14, 2000
praying for the distribution of the
following described properties claimed
to have been acquired during the
subsistence of their marriage, to wit:
By Purchase:
a. Lot 1, Block 3 of the consolidated
survey of Lots 2144 & 2147 of the
Dumaguete Cadastre, covered by
Transfer Certificate of Title (TCT) No.
22846, containing an area of 252 square
meters (sq.m.), including a residential
house constructed thereon.
b. Lot 2142 of the Dumaguete Cadastre,
covered by TCT No. 21974, containing
an area of 806 sq.m., including a
residential house constructed thereon.
c. Lot 5845 of the Dumaguete Cadastre,
covered by TCT No. 21306, containing
an area of 756 sq.m.
d. Lot 4, Block 4 of the consolidated
survey of Lots 2144 & 2147 of the
Dumaguete Cadastre, covered by TCT
No. 21307, containing an area of 45
sq.m.
By way of inheritance:
e. 1/7 of Lot 2055-A of the Dumaguete
Cadastre, covered by TCT No. 23567,
containing an area of 2,635 sq.m. (the
area that appertains to the conjugal
partnership is 376.45 sq.m.).

f. 1/15 of Lot 2055-I of the Dumaguete

Cadastre, covered by TCT No. 23575,
containing an area of 360 sq.m. (the
area that appertains to the conjugal
partnership is 24 sq.m.).7
In defense,8 respondent averred that,
with the exception of their two (2)
residential houses on Lots 1 and 2142,
she and petitioner did not acquire any
conjugal
properties
during
their
marriage, the truth being that she used
her own personal money to purchase
Lots 1, 2142, 5845 and 4 out of her
personal funds and Lots 2055-A and
2055-I by way of inheritance.9 She
submitted a joint affidavit executed by
her and petitioner attesting to the fact
that she purchased Lot 2142 and the
improvements thereon using her own
money.10 Accordingly,
respondent
sought the dismissal of the petition for
dissolution as well as payment for
attorneys fees and litigation expenses.11
During trial, petitioner testified that
while Lots 1, 2142, 5845 and 4 were
registered in the name of respondent,
these properties were acquired with the
money he received from the Dutch
government
as
his
disability
benefit12since respondent did not have
sufficient income to pay for their
acquisition. He also claimed that the
joint affidavit they submitted before the
Register of Deeds of Dumaguete City
was contrary to Article 89 of the Family
Code, hence, invalid.13
For her part, respondent maintained
that the money used for the purchase of
the lots came exclusively from her
personal funds, in particular, her
earnings from selling jewelry as well as
products from Avon, Triumph and
Tupperware.14 She further asserted that
after she filed for annulment of their
marriage in 1996, petitioner transferred
to their second house and brought along
with him certain personal properties,

consisting of drills, a welding machine,

grinders, clamps, etc. She alleged that
these tools and equipment have a total
cost of P500,000.00.15
The RTC Ruling
On February 28, 2007, the RTC of
Negros Oriental, Branch 34 rendered its
Decision, dissolving the parties conjugal
partnership, awarding all the parcels of
land to respondent as her paraphernal
properties; the tools and equipment in
favor of petitioner as his exclusive
properties; the two (2) houses standing
on Lots 1 and 2142 as co-owned by the
parties, the dispositive of which reads:
WHEREFORE, judgment is hereby
rendered granting the dissolution of the
conjugal partnership of gains between
petitioner
Willem
Beumer
and
respondent Avelina Amores considering
the fact that their marriage was
previously annulled by Branch 32 of this
Court. The parcels of land covered by
Transfer Certificate of Titles Nos.
22846, 21974, 21306, 21307, 23567 and
23575 are hereby declared paraphernal
properties of respondent Avelina
Amores due to the fact that while these
real properties were acquired by
onerous title during their marital union,
Willem Beumer, being a foreigner, is not
allowed by law to acquire any private
land in the Philippines, except through
inheritance.
The personal properties, i.e., tools and
equipment mentioned in the complaint
which were brought out by Willem from
the conjugal dwelling are hereby
declared to be exclusively owned by the
petitioner.
The two houses standing on the lots
covered by Transfer Certificate of Title
Nos. 21974 and 22846 are hereby
declared to be co-owned by the
petitioner and the respondent since
these were acquired during their marital
union and since there is no prohibition

on foreigners from owning buildings

and residential units. Petitioner and
respondent are, thereby, directed to
subject this court for approval their
project of partition on the two houses
aforementioned.
The
Court
finds
no
sufficient
justification to award the counterclaim
of respondent for attorneys fees
considering the well settled doctrine that
there should be no premium on the right
to litigate. The prayer for moral damages
are likewise denied for lack of merit.
No pronouncement as to costs.
SO ORDERED.16
It ruled that, regardless of the source of
funds for the acquisition of Lots 1, 2142,
5845 and 4, petitioner could not have
acquired any right whatsoever over
these properties as petitioner still
attempted
to
acquire
them
notwithstanding his knowledge of the
constitutional
prohibition
against
foreign
ownership
of
private
lands.17 This was made evident by the
sworn statements petitioner executed
purporting to show that the subject
parcels of land were purchased from the
exclusive funds of his wife, the herein
respondent.18 Petitioners
plea
for
reimbursement for the amount he had
paid to purchase the foregoing
properties on the basis of equity was
likewise denied for not having come to
court with clean hands.
The CA Ruling
Petitioner elevated the matter to the CA,
contesting only the RTCs award of Lots
1, 2142, 5845 and 4 in favor of
respondent. He insisted that the money
used to purchase the foregoing
properties came from his own capital
funds and that they were registered in
the name of his former wife only
because of the constitutional prohibition
against foreign ownership. Thus, he
prayed for reimbursement of one-half

(1/2) of the value of what he had paid in

the purchase of the said properties,
waiving the other half in favor of his
estranged ex-wife.19
On October 8, 2009, the CA
promulgated a Decision20 affirming in
toto the judgment rendered by the RTC
of Negros Oriental, Branch 34. The CA
stressed the fact that petitioner was
"well-aware of the constitutional
prohibition for aliens to acquire lands in
the Philippines."21 Hence, he cannot
invoke equity to support his claim for
reimbursement.
Consequently, petitioner filed the
instant Petition for Review on Certiorari
assailing the CA Decision due to the
following error:
UNDER THE FACTS ESTABLISHED,
THE COURT ERRED IN NOT
SUSTAINING THE PETITIONERS
ATTEMPT
AT
SUBSEQUENTLY
ASSERTING OR CLAIMING A RIGHT
OF HALF OR WHOLE OF THE
PURCHASE PRICE USED IN THE
PURCHASE
OF
THE
REAL
PROPERTIES SUBJECT OF THIS
CASE.22 (Emphasis supplied)
The Ruling of the Court
The petition lacks merit.
The issue to be resolved is not of first
impression. In In Re: Petition For
Separation
of
Property-Elena
Buenaventura
Muller
v.
Helmut
Muller23 the Court had already denied a
claim for reimbursement of the value of
purchased parcels of Philippine land
instituted by a foreigner Helmut Muller,
against his former Filipina spouse, Elena
Buenaventura Muller. It held that
Helmut
Muller
cannot
seek
reimbursement on the ground of equity
where it is clear that he willingly and
knowingly bought the property despite
the
prohibition
against
foreign
ownership
of
Philippine
land24 enshrined under Section 7, Article

XII of the 1987 Philippine Constitution

which reads:
Section 7. Save in cases of hereditary
succession, no private lands shall be
transferred or conveyed except to
individuals,
corporations,
or
associations qualified to acquire or hold
lands of the public domain.
Undeniably, petitioner openly admitted
that he "is well aware of the above-cited
constitutional prohibition"25 and even
asseverated that, because of such
prohibition,
he
and
respondent
registered the subject properties in the
latters name.26 Clearly, petitioners
actuations showed his palpable intent to
skirt the constitutional prohibition. On
the basis of such admission, the Court
finds no reason why it should not apply
the Muller ruling and accordingly, deny
petitioners claim for reimbursement.
As also explained in Muller, the timehonored principle is that he who seeks
equity must do equity, and he who
comes into equity must come with clean
hands. Conversely stated, he who has
done inequity shall not be accorded
equity. Thus, a litigant may be denied
relief by a court of equity on the ground
that his conduct has been inequitable,
unfair and dishonest, or fraudulent, or
deceitful.27
In this case, petitioners statements
regarding the real source of the funds
used to purchase the subject parcels of
land dilute the veracity of his claims:
While admitting to have previously
executed
a
joint
affidavit
that
respondents personal funds were used
to purchase Lot 1,28 he likewise claimed
that his personal disability funds were
used to acquire the same. Evidently,
these
inconsistencies
show
his
untruthfulness. Thus, as petitioner has
come before the Court with unclean
hands, he is now precluded from seeking
any equitable refuge.

In any event, the Court cannot, even on

the
grounds
of
equity,
grant
reimbursement to petitioner given that
he acquired no right whatsoever over the
subject properties by virtue of its
unconstitutional purchase. It is wellestablished that equity as a rule will
follow the law and will not permit that to
be done indirectly which, because of
public
policy,
cannot
be
done
directly.29 Surely, a contract that violates
the Constitution and the law is null and
void, vests no rights, creates no
obligations and produces no legal effect
at all.30 Corollary thereto, under Article
1412 of the Civil Code,31 petitioner
cannot have the subject properties
deeded to him or allow him to recover
the money he had spent for the purchase
thereof. The law will not aid either party
to an illegal contract or agreement; it
leaves the parties where it finds
them.32 Indeed, one cannot salvage any
rights
from
an
unconstitutional
transaction knowingly entered into.
Neither can the Court grant petitioners
claim for reimbursement on the basis of
unjust enrichment.33 As held in Frenzel
v. Catito, a case also involving a
foreigner
seeking
monetary
reimbursement for money spent on
purchase of Philippine land, the
provision on unjust enrichment does not
apply if the action is proscribed by the
Constitution, to wit:
Futile, too, is petitioner's reliance on
Article 22 of the New Civil Code which
reads:
Art. 22. Every person who through an
act of performance by another, or any
other means, acquires or comes into
possession of something at the expense
of the latter without just or legal ground,
shall return the same to him.1wphi1
The provision is expressed in the
maxim: "MEMO CUM ALTERIUS
DETER DETREMENTO PROTEST" (No

person should unjustly enrich himself at

the expense of another). An action for
recovery of what has been paid without
just cause has been designated as an
accion in rem verso. This provision does
not apply if, as in this case, the action is
proscribed by the Constitution or by the
application of the pari delicto doctrine.
It may be unfair and unjust to bar the
petitioner from filing an accion in rem
verso over the subject properties, or
from recovering the money he paid for
the said properties, but, as Lord
Mansfield stated in the early case of
Holman v. Johnson: "The objection that
a contract is immoral or illegal as
between the plaintiff and the defendant,
sounds at all times very ill in the mouth
of the defendant. It is not for his sake,
however, that the objection is ever
allowed; but it is founded in general
principles of policy, which the defendant
has the advantage of, contrary to the real
justice, as between him and the
plaintiff."34 (Citations omitted)
Nor would the denial of his claim
amount to an injustice based on his
foreign citizenship.35 Precisely, it is the
Constitution itself which demarcates the
rights of citizens and non-citizens in
owning Philippine land. To be sure, the
constitutional ban against foreigners
applies only to ownership of Philippine
land and not to the improvements built
thereon, such as the two (2) houses
standing on Lots 1 and 2142 which were
properly declared to be co-owned by the
parties subject to partition. Needless to
state, the purpose of the prohibition is to
conserve the national patrimony36 and it
is this policy which the Court is dutybound to protect.
WHEREFORE, the petition is DENIED.
Accordingly, the assailed October 8,
2009 Decision and January 24, 2011
Resolution of the Court of Appeals in
CA-G.R. CV No. 01940 are AFFIRMED.

SO ORDERED.
G.R. No. 184079
April 17,
2013
SPS. ARMANDO SILVERIO, SR.
AND
REMEDIOS
SILVERIO, Petitioners,
vs.
SPS. RICARDO AND EVELYN
MARCELO, Respondents.
x-----------------------x
G.R. No. 184490
SPS. EVELYN AND RICARDO
MARCELO, Petitioners,
vs.
SPS. ARMANDO SILVERIO, SR.
AND
REMEDIOS
SILVERIO, Respondents.
DECISION
VILLARAMA, JR., J.:
Before the Court are twin petitions for
review on certiorari under Rule 45 of the
1997 Rules of Civil Procedure, as
amended.
The petition1 in G.R. No. 184079 was
filed by petitioners spouses Armando
Silverio, Sr. and Remedios Silverio to
assail the Decision2 dated March 18,
2008 and Resolution3 dated August 12,
2008 of the Court of Appeals (CA) in
CA-G.R. SP No. 98105. The CA had
affirmed the Decision4 dated November
7, 2006 of the Regional Trial Court
(RTC) of Paraaque City, Branch 258, in
Civil Case No. 06-0099, which in turn,
affirmed the Decision5dated September
6, 2005 of the Metropolitan Trial Court
(MeTC), Branch 78 in Civil Case No.
2004-271. The Paraaque MeTC,
Branch 78, had ordered petitioners to
demolish the improvements they have
introduced in Lot No. 3976, Paraaque
Cad. 299 (Lot 3976), to peacefully
surrender possession of the same to
respondents spouses Ricardo and
Evelyn Marcelo and to pay P1,000 per
month from May 20, 2004 until they
have done so. The court a quo likewise

directed
petitioners
to
pay
respondents P20,000 as attorneys fees
plus P3,000 per appearance of the
latters counsel and costs.
Meanwhile, the petition6 in G.R. No.
184490 was filed by petitioners spouses
Evelyn and Ricardo Marcelo to contest
the Decision7 dated March 27, 2008 and
Resolution8 dated September 1, 2008 of
the CA in CA-G.R. SP No. 98713. The CA
had reversed and set aside the
Decision9 dated December 29, 2006 of
the RTC of Paraaque City, Branch 257,
in Civil Case
No. 06-0237, which in turn, affirmed in
toto the Decision10 dated April 25, 2006
of the MeTC of Paraaque City, Branch
77, in Civil Case No. 2004-269. The
Paraaque MeTC, Branch 77, had
ordered respondents Armando Silverio,
Sr. and Remedios Silverio to vacate the
Marcelo Compound in Lot 3976 and to
surrender
possession
thereof
to
petitioners. The court a quo likewise
directed
respondents
to
pay
petitioners P1,000 per month from May
20, 2004 until they have completely
moved out of said property, P10,000 as
attorneys fees and costs.
The factual antecedents of these
consolidated petitions are culled from
the records.
G.R. No. 184079
On July 12, 2004, respondents spouses
Ricardo and Evelyn Marcelo filed a
Complaint11 for
unlawful
detainer
against petitioners spouses Armando
Silverio, Sr., and his mother, Remedios
Silverio. The case was docketed as Civil
Case No. 2004-271 before the MeTC of
Paraaque City, Branch 78.
Respondents represented themselves as
the lawful owners and possessors of Lot
3976, a residential land with an area of
5,004 square meters located in Marcelo
Compound,
Philip
St.
Ext.,
Multinational Village, Paraaque City.

They claimed ownership over said lot by

virtue of a Decision 12 dated December
12, 1996 of the Department of
Environment and Natural Resources
(DENR) in DENR-NCR Case No. 95-253
and Tax Declaration No. E-008-19942.13
Respondents alleged that sometime in
May 1987, petitioners sought permission
to construct a house within Lot 3976.
Respondents agreed on the condition
that petitioners will vacate the moment
they need the land. Subsequently,
respondents made an oral demand on
petitioners to leave the house and return
possession of the lot within 15 days from
notice. In a Letter14 dated May 18, 2004,
respondents reiterated their demand for
petitioners to demolish the house,
vacate the 120-square-meter lot on
which the house stands and to
pay P1,000 as rent until they have done
so.
As respondents demands remained
unheeded, they filed a complaint for
unlawful detainer against petitioners
before
Barangay
Moonwalk
in
Paraaque City. The case was docketed
as Barangay Case No. 05/04-051. On
July 24, 2004, Atty. Wendell E. Coronel,
Lupon/Pangkat Secretary of Barangay
Moonwalk issued a Certification to File
Action15 in said case upon the reasons
"Failed or refused to accept/obey
summons to appear for hearing" and
"Settlement has been repudiated."
In their Answer,16 petitioners sought the
dismissal of the complaint on the
ground that respondents had filed a
similar case against them before the
MeTC of Paraaque City, Branch 77,
docketed as Civil Case No. 2004-269.
The latter case is the subject of the
petition in G.R. No. 184490.
On September 6, 2005, the MeTC of
Paraaque City, Branch 78, rendered
judgment in favor of respondents
Marcelo. The court a quo ruled out

forum shopping upon finding that the

house subject of the present case is
different from that in Civil Case No.
2004-269. The structure involved in the
latter case was "originally occupied by
petitioners relative and later taken over
by them"17 while the house subject of the
present case was constructed by
petitioners themselves. The MeTC held
that petitioners failed to refute the
character of their possession as merely
tolerated by respondents and they
became deforciants upon the latters
demand for them to vacate the subject
premises. The court ordered petitioners
to pay respondents P1,000 as reasonable
compensation for the use and
occupation of the premises, attorneys
fees
of P20,000
and P3,000
per
appearance of counsel for respondents.
On appeal, the Paraaque RTC, Branch
258, affirmed the ruling of the MeTC. In
a Decision dated November 7, 2006, the
RTC sustained respondents right to
bring action to evict petitioners from the
contested property. It found petitioners
claim of ownership unsubstantiated and
their defense of forum shopping without
merit since the properties involved in
Civil Case Nos. 2004-269 and 2004-271
are different from each other.
Petitioners moved for reconsideration
but their motion was denied in an
Order18 dated
February
5,
2007.
Thereafter, petitioners filed a Petition
for Review19 under Rule 42 of the Rules
with the CA.
In the assailed Decision dated March 18,
2008, the appellate court affirmed in
toto the RTC judgment. It found no
basis to dismiss respondents complaint
based on either forum shopping or
splitting a cause of action. The CA
disregarded petitioners argument that
the subject property is public land in
view of their admission in their

Answer20 that respondents are the

owners and possessors thereof.
Petitioners
filed
a
Motion
for
Reconsideration21 which the CA denied
in a Resolution22 dated August 12, 2008.
G.R. No. 184490
On July 12, 2004, petitioners spouses
Ricardo and Evelyn Marcelo filed a
Complaint23 for
unlawful
detainer
against respondents Armando Silverio,
Sr., and Remedios Silverio. The case was
docketed as Civil Case No. 2004-269
before the MeTC of Paraaque City,
Branch 77.
Petitioners Complaint bore essentially
the same allegations as their Complaint
in Civil Case No. 2004-271 save for two
allegations: (1) respondents requested
petitioners permission to construct a
house in Lot 3976 in May 1986; and (2)
respondents "improved the house and
even operated a sari-sari store"24 in
Marcelo Compound.
In their Answer25 dated August 3, 2004,
respondents belied petitioners claim of
exclusive ownership and possession of
the subject property. According to
respondents, the land in dispute was
first occupied by Graciano Marcelo
along with his sons Armando Marcelo,
petitioner Ricardo Marcelo and Florante
Marcelo. Respondents anchor their right
of possession on Florante Marcelo, in
his capacity as an ostensible co-owner of
the contested property. Florante
Marcelo is the husband of Marilou
Silverio, the daughter of respondents
spouses Silverio.
Subsequently, petitioners submitted an
Amended Complaint26 dated August 14,
2004, in which they clarified that it was
the spouses Florante Marcelo and
Marilou
Silverio,
and
not
the
respondents, who sought their consent
to build a house and live in Marcelo
Compound. Petitioners recounted that it
was after Florante Marcelo and Marilou

Silverio separated in 1998 and

abandoned said house that respondents
asked for permission to stay therein.
Petitioners
agreed
upon
an
understanding that respondents shall
"dismantle said house the moment
petitioners
need
the
premises."27 However,
respondents
refused to move out and surrender
possession of the subject property upon
demand.
In a Demand Letter28 dated May 18,
2004, petitioners insisted on their
demand for respondents to demolish the
house they built, vacate the 80-squaremeter lot on which it stands, to
surrender peaceful possession of the
same and to pay P1,000 as rent until
they have done so.
As respondents ignored petitioners
demands, the latter brought a complaint
for
unlawful
detainer
against
respondents before Barangay Moonwalk
in Paraaque City. The case was
docketed as Barangay Case No. 05/04070. On July 24, 2004, Atty. Wendell E.
Coronel, Lupon/Pangkat Secretary of
Barangay
Moonwalk
issued
a
29
Certification to File Action in said case
upon the reasons "Failed or refused to
accept/obey summons to appear for
hearing" and "Settlement has been
repudiated."
In an Answer30 dated September 8,
2004, respondents assailed the DENR
Decision dated December 12, 1996 for
supposedly awarding ownership of the
subject
property
to
petitioners.
According to respondents, Graciano
Marcelo,
Sr.,
petitioner
Ricardo
Marcelos father, was a tenant of Fabian
Lumbos before the latter sold his land to
Mike Velarde. Subsequently, Velarde
fenced the subject property, which
respondents insist is not part of the
parcels that Lumbos sold to Velarde.
Upon the belief that Lot 3976 is still

government property, the sons of

Graciano Marcelo, Sr., including
petitioner Ricardo Marcelo and Florante
Marcelo, divided the land among
themselves and occupied the same. On
the tract allotted to Florante, he took in
respondent Remedios Silverio to live
with him and his wife, Marilou.
Respondents averred that it was in 1997
when the Marcelos conceived the idea of
applying for a sales patent over Lot 3976
with the DENR. The Marcelo siblings
appointed petitioner Ricardo Marcelo to
file the Miscellaneous Sales Application
(MSA) in their behalf, sharing the
expenses among themselves. However,
it was not until later that the Marcelo
siblings learned that Ricardo had filed
the application in his name alone.
Respondents revealed that Ricardo had
sold several portions of Lot 3976 even
before he could apply for a sales patent
thereon.
On February 3, 2005, respondents filed
a Supplemental Answer31 in which they
charged
petitioners
with
forum
shopping for filing another ejectment
case against them, docketed as Civil
Case No. 2004-271 before Branch 78 of
the Paraaque MeTC.
In a Decision dated April 25, 2006, the
MeTC of Paraaque City, Branch 77,
ruled for petitioners Marcelo. The court
a quo ordered respondents to vacate the
subject property, to surrender peaceful
possession thereof to petitioners, to give
reasonable rent from May 20, 2004
until they have moved out and to pay
attorneys fees and costs.
On the basis of the Decision dated
December 12, 1996 of the DENR, the
MeTC declared petitioners the owners of
the subject property, with concomitant
right to possess it. The court found no
evidence to support respondents
possessory claim and considered their
occupation of the subject land as merely

tolerated by petitioners. The court a quo

discounted forum shopping upon
finding that the house concerned in Civil
Case No. 2004-271 was built by
petitioners whereas the house in this
case was only taken over by them.
In a Decision dated December 29, 2006,
the Paraaque RTC, Branch 257,
affirmed in toto the MeTC ruling. The
RTC declared petitioners as the lawful
possessors of the subject property by
virtue of Tax Declaration No. E-00819942 in the name of petitioner Ricardo
Marcelo.1wphi1 It
explained
that
Florante
Marcelos
affinity
with
petitioner Ricardo, alone, did not
automatically make him a co-owner of
the contested property.
Dissatisfied, respondents elevated the
case to the CA through a Petition 32 for
review under Rule 42.
In the assailed Decision dated March 27,
2008, the CA reversed and set aside the
RTC judgment. It brushed aside the
alleged procedural infirmities that
attended the filing of respondents
petition for being trivial and insufficient
to warrant its dismissal. The appellate
court found petitioners guilty of forum
shopping and splitting of a cause of
action. It observed that the two cases for
unlawful detainer filed by petitioners are
based on a single claim of ownership
over Lot 3976 which embraces the
subject properties. The CA explains that
an adjudication in either suit that
petitioners are entitled to the possession
of Lot No. 3976 would necessarily mean
res judicata in the other case. The
appellate court noted that the demand
letter in both cases was served on
respondents on the same day.
Issues/Assignment of Errors
On September 29, 2008, spouses
Armando Silverio, Sr. and Remedios
Silverio filed a petition for review on
certiorari which was docketed as G.R.

No. 184079. Said petition, which seeks

to reverse and set aside the Decision
dated March 18, 2008 and Resolution
dated August 12, 2008 of the CA in CAG.R. SP No. 98105, assigns a lone error:
THE COURT OF APPEALS, WITH ALL
DUE RESPECT, SERIOUSLY ERRED
AND
GRAVELY
ABUSED
ITS
DISCRETION IN DISMISSING THE
APPEAL
INTERPOSED
BY
PETITIONERS IN THE ABOVEENTITLED
CASE
ON
TECHNICALITIES AND HAS DECIDED
A QUESTION OF SUBSTANCE, NOT
THERETOFORE DETERMINED BY
THE SUPREME COURT, AND/OR HAS
DECIDED IT IN A WAY PROBABLY
NOT IN ACCORD WITH LAW OR
WITH THE APPLICABLE DECISIONS
OF THE HONORABLE SUPREME
COURT.33
A few days later, on October 2, 2008,
spouses Evelyn and Ricardo Marcelo
filed a Petition for Review on Certiorari
which was docketed as G.R. No. 184490.
Said petition, in turn, contests the
Decision dated March 27, 2008 and the
Resolution dated September 1, 2008 of
the CA in CA-G.R. SP No. 98713.
Condensed, the issues presented by
petitioners are as follows: (1) Whether
the filing of separate complaints for
unlawful detainer against the same
lessees who refuse to vacate, on demand,
two different houses constitutes forum
shopping and splitting of a cause of
action; (2) Whether the CA erred in
dismissing Civil Case No. 2004-269; and
(3) Whether the instant petition was
filed seasonably.
Essentially, the questions that must be
addressed in the consolidated petitions
before us are common: (1) Are the
spouses Ricardo and Evelyn Marcelo
guilty of forum shopping? and (2) Who
between the spouses Marcelo and the

Silverios have better right to the physical

possession of Lot 3976?
The Parties Arguments
Armando Silverio, Sr. and Remedios
Silverio allege mainly that spouses
Ricardo and Evelyn Marcelo engaged in
forum shopping and split a common
cause of action when they filed separate
complaints for unlawful detainer based
on a single claim of ownership over Lot
No. 3976. The Silverios maintain that
the spouses Marcelo are simply
applicants for the issuance of a sales
patent over Lot No. 3976 and are
actually occupying only 50 square
meters of the 5,020-square-meter
property. In support thereof, the
Silverios invoke the Decision34 dated
July 11, 2007 of the DENR which
annulled and canceled the MSA filed by
the spouses Marcelo over Lot No. 3976.
Ultimately, the Silverios insist that the
subject property remains a public land.
In their consolidated Memorandum35 for
G.R. Nos. 184079 and 184490, spouses
Ricardo and Evelyn Marcelo denied the
allegations of forum shopping and
splitting a single cause of action. They
assert the following distinctions between
the houses involved in Civil Case Nos.
2004-269 and 2004-271: (1) the house
in Civil Case No. 2004-271 was built by
the Silverios in May 1987 while the
house subject of Civil Case No. 2004269 was constructed by Florante
Marcelo and Marilou Silverio in May
1986; and (2) the house in Civil Case No.
2004-271 has been occupied by the
Silverios from the beginning while they
merely took over the house referred to in
Civil Case No. 2004-269 and put up a
sari-sari store therein. The spouses
Marcelo contend that while they claim
ownership of Lot No. 3976 as a whole,
the portions thereof on which the two
houses stand are distinct -- one has an
area of 80 square meters while the other

measures 120 square meters. In view of

this, the spouses Marcelo believe that
the refusal by the Silverios to vacate said
houses violated at least two rights and
gave rise to separate causes of action.
The Court's Ruling
Unlawful detainer is an action to recover
possession of real property from one
who illegally withholds possession after
the expiration or termination of his right
to hold possession under any contract,
express or implied. The possession of
the defendant in unlawful detainer is
originally legal but became illegal due to
the expiration or termination of the
right to possess.36 In an unlawful
detainer case, the sole issue for
resolution is physical or material
possession of the property involved,
independent of any claim of ownership
by any of the parties. Where the issue of
ownership is raised by any of the parties,
the courts may pass upon the same in
order to determine who has the right to
possess the property. The adjudication
is, however, merely provisional and
would not bar or prejudice an action
between the same parties involving title
to the property.37
Here, the spouses Ricardo and Evelyn
Marcelo brought separate complaints for
unlawful detainer against Armando
Silverio, Sr. and Remedios Silverio
based on their refusal to vacate two
houses inside the Marcelo Compound.
In both Civil Case Nos. 2004-269 38 and
2004-271, the spouses Marcelo anchor
their right of possession over the subject
properties on Tax Declaration No. E008-19942 and on the Decision dated
December 12, 1996 of the DENR in
DENR-NCR Case No. 95-253. The
DENR gave due course to the MSA filed
by the spouses Marcelo over Lot 3976,
where the Marcelo Compound is
situated.

For their part, the Silverios seek the

dismissal of both complaints on the
grounds of forum shopping and splitting
a single cause of action.
Forum shopping is a deplorable practice
of litigants consisting of resort to two
different fora for the purpose of
obtaining the same relief, to increase the
chances of obtaining a favorable
judgment.39 The grave evil sought to be
avoided by the rule against forum
shopping is the rendition by two
competent tribunals of two separate and
contradictory decisions.40
In Chua v. Metropolitan Bank & Trust
Company,41 the Court enumerated the
ways by which forum shopping may be
committed:
Forum shopping can be committed in
three ways: (1) filing multiple cases
based on the same cause of action and
with the same prayer, the previous case
not having been resolved yet (where the
ground for dismissal is litis pendentia);
(2) filing multiple cases based on the
same cause of action and the same
prayer, the previous case having been
finally resolved (where the ground for
dismissal is res judicata); and (3) filing
multiple cases based on the same cause
of action, but with different prayers
(splitting of causes of action, where the
ground for dismissal is also either litis
pendentia or res judicata).42
Common to these types of forum
shopping is the identity of the cause of
action in the different cases filed. Cause
of action is defined as "the act or
omission by which a party violates the
right of another."43
In this case, the spouses Marcelo filed
two cases for unlawful detainer against
Armando Silverio, Sr. and Remedios
Silverio on July 12, 2004. In Civil Case
No. 2004-269, the cause of action is the
alleged
unlawful
withholding
of
possession by the Silverios of the house

which Florante Marcelo and Marilou

Silverio constructed in Lot 3976. On the
other hand, the cause of action in Civil
Case No. 2004-271 for unlawful detainer
is the supposed unlawful withholding of
possession by the Silverios of the house
which they, themselves, built in Lot
3976. While the main relief sought in
Civil Case No. 2004-269 appears to be
different from that in Civil Case No.
2004-271, the right on which both
claims are hinged is the same the
purported ownership by the spouses
Marcelo of Lot 3976. Indeed, paragraph
3 of the spouses Marcelos Complaint in
both cases similarly read:
3. Plaintiffs are the lawful owners and
possessors of a residential lot containing
an area of 5,004 sq. m. known as Lot
3976 Paraaque Cad. 299 by virtue of a
final and executory decision of the Land
Management
Bureau
(DENR)
promulgated on Dec. 12, 1996 and Tax
Dec. No. E-008083-77 issued in their
name by the City Assessor of Paraaque
City. Certified true copy of Tax Dec. No.
E-008-19942 is hereto attached as
"Annex "A". 44
Basically, the cause of action in both
cases is the unlawful withholding by the
Silverios of Lot 3976.
We find no merit in the contention of
the spouses Marcelo that Civil Case Nos.
2004-269 and 2004-271 present distinct
causes of action since they pertain to
separate portions of the Marcelo
Compound. The analogy drawn by the
spouses Marcelo between the ejectment
of a tenant leasing several units of a
condominium project and the unlawful
detainer cases they brought against the
Silverios is misplaced. In the former,
there exists a lessor-lessee relationship
between the owner of the condominium
and the tenant, respectively. Hence, the
rights and duties of the condominium
owner and the tenant are defined by the

terms of the contract. In contrast, the

parties in this case present adverse
possessory claims over those portions of
Lot 3976 in which the houses concerned
are situated.
In particular, the spouses Marcelo assert
better right of possession based on their
alleged right as "lawful owners and
possessors of a residential lot containing
an area of 5,004 sq. m. known as Lot
3976 Paraaque Cad. 299 by virtue of a
final and executory decision of the Land
Management
Bureau
(DENR)
promulgated on Dec. 12, 1996 and Tax
Dec. No. E-008-083-77 issued in their
name by the City Assessor of
Paraaque."45 For
their
part,
the
Silverios claim better right of possession
on account of their actual occupation of
the subject properties. In either case, a
finding that the spouses Marcelo have
better right to possess the subject
property could only be premised on
their lawful possession of the entire Lot
No. 3976, Paraaque Cad. 299. It
follows, therefore, that
a final
adjudication in favor of the spouses
Marcelo in one case would constitute res
judicata in the other.
In Agustin v. Delos Santos,46 the Court
cited three tests to verify whether there
is identity of causes of action for
purposes of applying the principle of res
judicata. The first test is the "absence of
inconsistency test" where it is
determined whether the judgment
sought will be inconsistent with the
prior judgment. If no inconsistency is
shown, the prior judgment shall not
constitute a bar to subsequent
actions.47 The more common approach
in ascertaining identity of causes of
action is the "same evidence test,"
whereby the following question serves as
a sufficient criterion: "would the same
evidence support and establish both the
present and former causes of action?" If

the answer is in the affirmative, then the

prior judgment is a bar to the
subsequent action; conversely, it is
not.48 Aside from the "absence of
inconsistency test" and "same evidence
test," we have also ruled that a previous
judgment operates as a bar to a
subsequent one when it had touched on
a matter already decided, or if the
parties are in effect "litigating for the
same thing."49
The "absence of inconsistency test" finds
no application in this case since it
presupposes that a final judgment has
been rendered in the first case. By
applying the "same evidence test,"
however, it becomes apparent that the
proof necessary to obtain affirmative
relief in Civil Case No. 2004-269 is the
same as that in Civil Case No. 2004-271.
Since the spouses Marcelo are claiming
sole ownership of Lot 3976 in their
MSA, the evidence needed to establish
better right of possession over the house
constructed by Florante Marcelo and
Marilou Silverio, and the one built by
the Silverios is the same, regardless of
the fact that they were built on separate
portions of said lot. We have ruled time
and again that "a party cannot, by
varying the form of action, or adopting a
different method of presenting his case,
escape the operation of the principle
that one and the same cause of action
shall not be twice litigated."50
Evidently, the spouses Marcelo engaged
in forum shopping by filing separate
cases for unlawful detainer based on a
single claim of ownership over Lot 3976.
Said act is likewise tantamount to
splitting a cause of action which, in this
case, is a cause for dismissal on the
ground of litis pendentia. On this score
alone, the petition for review on
certiorari filed by the spouses Marcelo in
G.R. Nos. 184490 must fail, alongside
their averments in G.R. No. 184079.

In any case, even if we confront the issue

as to who between the spouses Marcelo
and the Silverios have better right of
possession over the subject properties,
the former would still not prevail.
As earlier stated, the DENR-NCR had
canceled the MSA filed by the spouses
Marcelo in its Decision51 dated July 11,
2007. The Department found that the
spouses Marcelo failed to satisfy the
requirements for the acquisition of Lot
3976 under the Public Land Act. The
DENR-NCR clarified that the Decision
dated December 12, 1996 gave due
course to the application, not only of the
spouses Marcelo, but also those of other
applicants. It gave weight to the findings
in the ocular inspection that the spouses
Marcelo are actually occupying only 50
square meters of Lot 3976 while the
remaining portions are inhabited by 111
families. The DENR-NCR adds that the
spouses Marcelo cannot claim the entire
Lot No. 3976 since Republic Act No.
73052 limits the area of land that may be
applied for to 1,000 square meters.53 In
conclusion, the DENR-NCR held that
Lot 3976 remains a public land and its
dwellers may apply for the purchase of
those portions that they are actually
occupying.
Factual considerations relating to lands
of the public domain properly rest
within the administrative competence of
the Director of Lands and the DENR.
Findings of administrative agencies,
which have acquired expertise because
of their jurisdiction, are confined to
specific matters and are accorded
respect, if not finality, by the courts.
Even if they are not binding to civil
courts exercising jurisdiction over
ejectment cases, such factual findings
deserve great consideration and are
accorded much weight.54
Nonetheless, the declaration by the
DENR-NCR that Lot 3976 is still part of

the public domain does not mean that

neither of the parties is entitled to the
possession of the subject properties. In
Pajuyo v. Court of Appeals,55 we
reiterated the policy behind the
summary action of forcible entry and
unlawful detainer, thus:
It must be stated that the purpose of an
action of forcible entry and detainer is
that, regardless of the actual condition
of the title to the property, the party in
peaceable quiet possession shall not be
turned out by strong hand, violence or
terror. In affording this remedy of
restitution the object of the statute is to
prevent breaches of the peace and
criminal disorder which would ensue
from the withdrawal of the remedy, and
the reasonable hope such withdrawal
would create that some advantage must
accrue to those persons who, believing
themselves entitled to the possession of
property, resort to force to gain
possession rather than to some
appropriate action in the courts to assert
their claims. This is the philosophy at
the foundation of all these actions of
forcible entry and detainer which are
designed to compel the party out of
possession to respect and resort to the
law alone to obtain what he claims is
his.56
The parties in Pajuyo were informal
settlers on the public land which was the
subject of said case. We ruled that since
the government, which has title or better
right over the property was not
impleaded in the case, the Court cannot,
on its own, evict the parties. We
recognized better right of possession in
favor of the petitioner therein who
began occupying the disputed property
ahead of the respondents in said case.
A case with parallel factual milieu is
Modesto v. Urbina.57 Like the spouses
Marcelo, the respondents in said case
relied on a MSA and tax declarations to

substantiate their claim of possession

over the contested land therein. In
ruling for the petitioners in said case,
the Court stressed that the mere
declaration of land for taxation purposes
does not constitute possession thereof
nor is it proof of ownership in the
absence of the claimants actual
possession.58 We explained that unless a
public land is shown to have been
reclassified as alienable or actually
alienated by the State to a private
person, that piece of land remains part
of the public domain, and its occupation,
in the concept of owner, no matter how
long, cannot confer ownership or
possessory rights.59 This finds support in
Section 88 of the Public Land Act, which
provides:
Section 88. The tract or tracts of land
reserved under the provisions of section
eighty-three shall be non-alienable and
shall not be subject to occupation, entry,
sale, lease, or other disposition until
again declared alienable under the
provisions of this Act or by proclamation
of the President.
In a Certification60 dated June 8, 2006,
Samson G. de Leon, the Regional
Technical Director for Lands of the
DENR-NCR stated that:
This is to certify that Lot 3976 Cad 299,
Paraaque Cadastre situated at San
Dionisio, Paraaque, Metro Manila,
containing an area of 5,027.00 square
meters has been verified based on
available records of this Office to be
under Project No. 25, classified as
Alienable or Disposable Public Land,
certified as such on 3 January 1968 per
BFD L.C. Map No. 2323.
xxxx
This is to further certify that as per
Certification dated 15 December 2005
issued by Records Officer II Anita B.
Ibardolasa which is hereto attached, no

land patent has been issued over the

same or any portion thereof.
x x x x. (Emphasis supplied.)
It is undisputed by the spouses Marcelo
that the Silverios presently occupy those
portions of Lot 3976 which are the
subjects of the consolidated petitions
before us. In particular, the Silverios tie
their possession of the parcel at issue in
G.R. No. 184490 to Florante Marcelo
who appropriated a portion of Lot 3976
for himself, and with his wife,
constructed a house thereon in 1986. As
regards the portion of Lot 3976 subject
of G.R. No. 184079, the Silverios have
established their dwelling thereon in
1987 - long after Lot 3976 was classified
as alienable and disposable public land
on January 3, 1968.
Meanwhile, the spouses Marcelo insist
on their better right to possess the
contested parcels as holders of Tax
Declaration No. E-008-19942 in the
name of Ricardo Marcelo. Said tax
declaration, which covers Lot 3976, was
issued for the year 2005 and canceled
Tax Declaration No. E-008-18821, also
under the name of Ricardo Marcelo.
Other than said tax declaration,
however, we found nothing in the
records of these cases to show that the
spouses Marcelo have been consistently
paying taxes on Lot 3976. We note that
Tax Declaration No. E-008-19942 was
issued fairly recently, and by itself, is
inadequate to convince the Court that
the spouses Marcelo have been in open,
continuous and exclusive possession of
the subject portions of Lot 3976, by
themselves or through a successor-ininterest, since January 3, 1968. More
importantly, it is ingrained in our
jurisprudence that the mere declaration
of a land for taxation purposes does not
constitute possession thereof nor is it
proof of ownership in the absence of the
claimant's actual possession.61

Considering that the Silverios are in

actual possession of the subject portions
of Lot 3976, they are entitled to remain
on the property until a person who has a
title or a better right lawfully ejects
them. The ruling in this case, however,
does not preclude the Silverios and the
spouses Marcelo from introducing
evidence and presenting arguments
before the proper administrative agency
to establish any right to which they may
be entitled under the law.62
WHEREFORE, the Court RESOLVES:
(1) To GRANT the petition in G.R. No.
184079. The Decision dated March 18,
2008 and Resolution dated August 12,
2008 of the Court of Appeals in CA-G.R.
SP No. 98105 are REVERSED and SET
ASIDE;
(2) To DENY the petition in G.R. No.
184490. Consequently, the Decision
dated March 27, 2008 and Resolution
dated September 1, 2008 of the Court of
Appeals in CA-G.R SP No. 98713 are
AFFIRMED; and
(3) To DISMISS the complaints for
unlawful detainer filed by the spouses
Ricardo and Evelyn Marcelo against
Armando Silverio, Sr. and Remedios
Silverio for lack of merit.
No pronouncement as to costs.
SO ORDERED.
G.R. No. L-61311 September 2l,
1987
FELICIDAD
VILLANUEVA,
FERNANDO CAISIP, ANTONIO
LIANG,
FELINA
MIRANDA,
RICARDO PUNO, FLORENCIO
LAXA,
and
RENE
OCAMPO, petitioners,
vs.
HON. MARIANO CASTAEDA,
JR., Presiding Judge of the Court
of First Instance of Pampanga,
Branch
III,
VICENTE
A.
MACALINO,
Officer-in-Charge,

Office of the Mayor, San Fernando,

Pampanga, respondents.
CRUZ, J.:
There is in the vicinity of the public
market of San Fernando, Pampanga,
along Mercado Street, a strip of land
measuring 12 by 77 meters on which
stands a conglomeration of vendors
stalls together forming what is
commonly known as a talipapa. This is
the subject of the herein petition. The
petitioners claim they have a right to
remain in and conduct business in this
area by virtue of a previous
authorization granted to them by the
municipal government. The respondents
deny this and justify the demolition of
their stalls as illegal constructions on
public property. At the petitioners'
behest, we have issued a temporary
restraining order to preserve the status
quobetween the parties pending our
decision. 1 Now we shall rule on the
merits.
This dispute goes back to November 7,
1961, when the municipal council of San
Fernando adopted Resolution No. 218
authorizing some 24 members of the
Fernandino United Merchants and
Traders Association to construct
permanent stags and sell in the abovementioned place. 2 The action was
protested on November 10, 1961, in Civil
Case No. 2040, where the Court of First
Instance of Pampanga, Branch 2, issued
a writ of preliminary injunction that
prevented
the
defendants
from
constructing the said stalls until final
resolution of the controversy. 3 On
January 18, 1964, while this case was
pending, the municipal council of San
Fernando adopted Resolution G.R. No.
29, which declared the subject area as
"the parking place and as the public
plaza of the municipality, 4 thereby
impliedly revoking Resolution No. 218,

series of 1961. Four years later, on

November 2, 1968, Judge Andres C.
Aguilar decided the aforesaid case and
held that the land occupied by the
petitioners, being public in nature, was
beyond the commerce of man and
therefore could not be the subject of
private
occupancy. 5 The
writ
of
preliminary injunction was made
permanent. 6
The decision was apparently not
enforced, for the petitioners were not
evicted from the place; in fact, according
to then they and the 128 other persons
were in 1971 assigned specific areas or
space allotments therein for which they
paid daily fees to the municipal
government. 7 The problem appears to
have festered for some more years under
a presumably uneasy truce among the
protagonists, none of whom made any
move, for some reason that does not
appear in the record. Then, on January
12, 1982, the Association of Concerned
Citizens and Consumers of San
Fernando filed a petition for the
immediate
implementation
of
Resolution No. 29, to restore the subject
property "to its original and customary
use as a public plaza. 8
Acting thereon after an investigation
conducted
by
the
municipal
attorney, 9 respondent
Vicente
A.
Macalino, as officer-in-charge of the
office of the mayor of San Fernando,
issued on June 14, 1982, a resolution
requiring the municipal treasurer and
the municipal engineer to demolish the
stalls in the subject place beginning July
1, 1982. 10 The reaction of the
petitioners was to file a petition for
prohibition with the Court of First
Instance of Pampanga, docketed as Civil
Case No. 6470, on June 26, 1982. The
respondent judge denied the petition on
July 19, 1982, 11 and the motion for
reconsideration
on
August
5,

1982, 12 prompting the petitioners to

come to this Court on certiorari to
challenge his decision. 13
As required, respondent Macalino filed
his comment 14 on the petition, and the
petitioners
countered
with
their
reply. 15 In compliance with our
resolution of February 2, 1983, the
petitioners
submitted
their
memorandum 16 and
respondent
Macalino, for his part, asked that his
comment
be
considered
his
memorandum. 17 On July 28, 1986, the
new officer-in-charge of the office of the
mayor of San Fernando, Paterno S.
Guevarra, was impleaded in lieu of
Virgilio Sanchez, who had himself
earlier replaced the original respondent
Macalino. 18
After considering the issues and the
arguments raised by the parties in their
respective pleadings, we rule for the
respondents. The petition must be
dismissed.
There is no question that the place
occupied by the petitioners and from
which they are sought to be evicted is a
public plaza, as found by the trial court
in Civil Case No. 2040. This finding was
made after consideration of the
antecedent
facts
as
especially
established by the testimony of former
San Fernando Mayor Rodolfo Hizon,
who later became governor of
Pampanga, that the National Planning
Commission had reserved the area for a
public plaza as early as 1951. This
intention was reiterated in 1964 through
the adoption of Resolution No. 29. 19
It does not appear that the decision in
this case was appealed or has been
reversed. In Civil Case G.R. No. 6740,
which is the subject of this petition, the
respondent judge saw no reason to
disturb the finding in Civil Case No.
2040 and indeed used it as a basis for

his own decision sustaining the

questioned order. 20
The basic contention of the petitioners is
that the disputed area is under lease to
them by virtue of contracts they had
entered into with the municipal
government, first in 1961 insofar as the
original occupants were concerned, and
later with them and the other petitioners
by virtue of the space allocations made
in their favor in 1971 for which they saw
they are paying daily fees. 21 The
municipal government has denied
making such agreements. In any case,
they argue, since the fees were collected
daily, the leases, assuming their validity,
could be terminated at will, or any day,
as the claimed rentals indicated that the
period of the leases was from day to
day. 22
The parties belabor this argument
needlessly.
A public plaza is beyond the commerce
of man and so cannot be the subject of
lease or any other contractual
undertaking. This is elementary. Indeed,
this point was settled as early as
in Municipality
of
Cavite
vs.
23
Rojas, decided in 1915, where the
Court declared as null and void the lease
of a public plaza of the said municipality
in favor of a private person.
Justice Torres said in that case:
According to article 344 of the Civil
Code: "Property for public use in
provinces and in towns comprises the
provincial and town roads, the squares,
streets, fountains, and public waters, the
promenades, and public works of
general service supported by said towns
or provinces.
The said Plaza Soledad being a
promenade for public use, the municipal
council of Cavite could not in 1907
withdraw or exclude from public use a
portion thereof in order to lease it for
the sole benefit of the defendant Hilaria

Rojas. In leasing a portion of said plaza

or public place to the defendant for
private use the plaintiff municipality
exceeded its authority in the exercise of
its powers by executing a contract over a
thing of which it could not dispose, nor
is it empowered so to do.
The Civil Code, article 1271, prescribes
that everything which is not outside the
commerce of man may be the object of a
contract, and plazas and streets are
outside of this commerce, as was
decided by the supreme court of Spain
in its decision of February 12, 1895,
which says: "communal things that
cannot be sold because they are by their
very nature outside of commerce are
those for public use, such as the plazas,
streets, common lands, rivers, fountains,
etc."
Therefore, it must be concluded that the
contract, Exhibit C, whereby the
municipality of Cavite leased to Hilaria
Rojas a portion of the Plaza Soledad is
null and void and of no force or effect,
because it is contrary to the law and the
thing leased cannot be the object of a
was held that the City of contract.
In Muyot vs. de la Fuente, 24 it was held
that the City of Manila could not lease a
portion of a public sidewalk on Plaza
Sta. Cruz, being likewise beyond the
commerce of man.
Echoing Rojas, the decision said:
Appellants claim that they had obtained
permit from the present of the City of
Manila, to connect booths Nos. 1 and 2,
along the premises in question, and for
the use of spaces where the booths were
constructed, they had paid and
continued paying the corresponding
rentals. Granting this claim to be true,
one should not entertain any doubt that
such permit was not legal, because the
City of Manila does not have any power
or authority at all to lease a portion of a
public sidewalk. The sidewalk in

question, forming part of the public

plaza of Sta. Cruz, could not be a proper
subject matter of the contract, as it was
not within the commerce of man (Article
1347, new Civil Code, and article 1271,
old Civil Code). Any contract entered
into by the City of Manila in connection
with the sidewalk, is ipso facto null
and ultra vires. (Municipality of Cavite
vs. Roxas, et a1, 30 Phil. 603.) The
sidewalk in question was intended for
and was used by the public, in going
from one place to another. "The streets
and public places of the city shall be kept
free and clear for the use of the public,
and the sidewalks and crossings for the
pedestrians, and the same shall only be
used or occupied for other purpose as
provided by ordinance or regulation; ..."
(Sec. 1119, Revised Ordinances of the
City of Manila.) The booths in question
served as fruit stands for their owners
and often, if not always, blocked the fire
passage of pedestrians who had to take
the plaza itself which used to be clogged
with vehicular traffic.
Exactly in point is Espiritu vs.
Municipal
Council
of
25
Pozorrubio, where the Supreme Court
declared:
There is absolutely no question that the
town plaza cannot be used for the
construction of market stalls, specially
of residences, and that such structures
constitute a nuisance subject to
abatement according to law. Town
plazas are properties of public
dominion, to be devoted to public use
and to be made available to the public in
general They are outside the common of
man and cannot be disposed of or even
leased by the municipality to private
parties.
Applying this well-settled doctrine, we
rule that the petitioners had no right in
the first place to occupy the disputed
premises and cannot insist in remaining

there now on the strength of their

alleged lease contracts. They should
have realized and accepted this earlier,
considering that even before Civil Case
No.
2040
was
decided,
the
municipalcouncil of San Fernando had
already adopted Resolution No. 29,
series of 1964, declaring the area as the
parking place and public plaza of the
municipality.
It is the decision in Civil Case No. 2040
and the said resolution of the municipal
council
of
San
Fernando
that
respondent Macalino was seeking to
enforce when he ordered the demolition
of the stags constructed in the disputed
area. As officer-in-charge of the office of
the mayor, he had the duty to clear the
area and restore it to its intended use as
a parking place and public plaza of the
municipality
of
San
Fernando,
conformably to the aforementioned
orders from the court and the council. It
is, therefore, not correct to say that he
had acted without authority or taken the
law into his hands in issuing his order.
Neither can it be said that he acted
whimsically in exercising his authority
for it has been established that he
directed the demolition of the stalls only
after, upon his instructions, the
municipal attorney had conducted an
investigation, to look into the complaint
filed by the Association of Concerned
Citizens and Consumers of San
Fernando. 26 There is evidence that the
petitioners were notified of this
hearing, 27which they chose to disregard.
Photographs
of
the
disputed
area, 28 which does look congested and
ugly, show that the complaint was valid
and that the area really needed to be
cleared, as recommended by the
municipal attorney.
The Court observes that even without
such investigation and recommendation,
the respondent mayor was justified in

ordering the area cleared on the strength

alone of its status as a public plaza as
declared by the judicial and legislative
authorities. In calling first for the
investigation (which the petitioner saw
fit to boycott), he was just scrupulously
paying deference to the requirements of
due process, to remove an taint of
arbitrariness in the action he was caged
upon to take.
Since the occupation of the place in
question in 1961 by the original 24
stallholders (whose number later
ballooned to almost 200), it has
deteriorated increasingly to the great
prejudice of the community in general.
The proliferation of stags therein, most
of them makeshift and of flammable
materials, has converted it into a
veritable fire trap, which, added to the
fact that it obstructs access to and from
the public market itself, has seriously
endangered public safety. The filthy
condition of the talipapa, where fish
and other wet items are sold, has
aggravated health and sanitation
problems, besides pervading the place
with a foul odor that has spread into the
surrounding areas. The entire place is
unsightly,
to
the
dismay
and
embarrassment of the inhabitants, who
want it converted into a showcase of the
town of which they can all be proud. The
vendors in the talipapa have also spilled
into the street and obstruct the flow of
traffic,
thereby
impairing
the
convenience
of
motorists
and
pedestrians
alike.
The
regular
stallholders in the public market, who
pay
substantial
rentals
to
the
municipality, are deprived of a sizable
volume of business from prospective
customers who are intercepted by
the talipapa vendors before they can
reach the market proper. On top of all
these, the people are denied the proper
use of the place as a public plaza, where

they may spend their leisure in a relaxed

and even beautiful environment and
civic and other communal activities of
the town can be held.
The problems caused by the usurpation
of the place by the petitioners are
covered by the police power as delegated
to the municipality under the general
welfare clause. 29 This authorizes the
municipal council "to enact such
ordinances and make such regulations,
not repugnant to law, as may be
necessary to carry into effect and
discharge the powers and duties
conferred upon it by law and such as
shall seem necessary and proper to
provide for the health and safety,
promote the prosperity, improve the
morals, peace, good order, comfort, and
convenience of the municipality and the
inhabitants thereof, and for the
protection of property therein." This
authority was validly exercised in this
casethrough the adoption of Resolution
No. 29, series of 1964, by the municipal
council of San Fernando.
Even assuming a valid lease of the
property in dispute, the resolution could
have
effectively
terminated
the
agreement for it is settled that the police
power cannot be surrendered or
bargained away through the medium of
a contract. 30 In fact, every contract
affecting the public interest suffers a
congenital infirmity in that it contains
an implied reservation of the police
power as a postulate of the existing legal
order. 31 This power can be activated at
any time to change the provisions of the
contract, or even abrogate it entirely, for
the promotion or protection of the
general welfare. Such an act will not
militate against the impairment clause,
which is subject to and limited by the
paramount police power.32
We hold that the respondent judge did
not commit grave abuse of discretion in

denying the petition for prohibition. On

the contrary, he acted correctly in
sustaining the right and responsibility of
the mayor to evict the petitioners from
the disputed area and clear it of an the
structures illegally constructed therein.
The Court feels that it would have been
far more amiable if the petitioners
themselves, recognizing their own civic
duty, had at the outset desisted from
their original stance and withdrawn in
good grace from the disputed area to
permit its peaceful restoration as a
public plaza and parking place for the
benefit of the whole municipality. They
owned this little sacrifice to the
community in general which has
suffered all these many years because of
their intransigence. Regrettably, they
have refused to recognize that in the
truly democratic society, the interests of
the few should yield to those of the
greater number in deference to the
principles that the welfare of the people
is the supreme law and overriding
purpose. We do not see any altruism
here. The traditional ties of sharing are
absent here. What we find, sad to say, is
a cynical disdaining of the spirit of
"bayanihan," a selfish rejection of the
cordial virtues of "pakikisama " and
"pagbibigayan" which are the hallmarks
of our people.
WHEREFORE,
the
petition
is
DISMISSED. The decision dated July 19,
1982, and the order-dated August 5,
1982, are AFFIRMED. The temporary
restraining order dated August 9, 1982,
is LIFTED. This decision is immediately
executory. Costs against the petitioners.
SO ORDERED.
Teehankee, C.J., Narvasa and Paras,
JJ., concur.
G.R. No. 92013 July 25, 1990
SALVADOR H. LAUREL, petitioner,
vs.
RAMON GARCIA, as head of the

Asset Privatization Trust, RAUL

MANGLAPUS, as Secretary of
Foreign Affairs, and CATALINO
MACARAIG,
as
Executive
Secretary, respondents.
G.R. No. 92047 July 25, 1990
DIONISIO S. OJEDA, petitioner,
vs.
EXECUTIVE
SECRETARY
MACARAIG,
JR.,
ASSETS
PRIVATIZATION
TRUST
CHAIRMAN RAMON T. GARCIA,
AMBASSADOR
RAMON
DEL
ROSARIO, et al., as members of
the PRINCIPAL AND BIDDING
COMMITTEES
ON
THE
UTILIZATION/DISPOSITION
PETITION
OF
PHILIPPINE
GOVERNMENT PROPERTIES IN
JAPAN, respondents.
Arturo M. Tolentino for petitioner
in 92013.
GUTIERREZ, JR., J.:
These are two petitions for prohibition
seeking to enjoin respondents, their
representatives
and
agents
from
proceeding with the bidding for the sale
of the 3,179 square meters of land at 306
Roppongi, 5-Chome Minato-ku Tokyo,
Japan scheduled on February 21, 1990.
We granted the prayer for a temporary
restraining order effective February 20,
1990. One of the petitioners (in G.R. No.
92047) likewise prayes for a writ of
mandamus to compel the respondents to
fully disclose to the public the basis of
their decision to push through with the
sale of the Roppongi property inspire of
strong public opposition and to explain
the proceedings which effectively
prevent the participation of Filipino
citizens and entities in the bidding
process.
The oral arguments in G.R. No.
92013, Laurel v. Garcia, et al. were
heard by the Court on March 13, 1990.

After G.R. No. 92047, Ojeda v.

Secretary Macaraig, et al. was filed, the
respondents were required to file a
comment by the Court's resolution dated
February 22, 1990. The two petitions
were consolidated on March 27, 1990
when the memoranda of the parties in
the Laurel case were deliberated upon.
The Court could not act on these cases
immediately because the respondents
filed a motion for an extension of thirty
(30) days to file comment in G.R. No.
92047, followed by a second motion for
an extension of another thirty (30) days
which we granted on May 8, 1990, a
third motion for extension of time
granted on May 24, 1990 and a fourth
motion for extension of time which we
granted on June 5, 1990 but calling the
attention of the respondents to the
length of time the petitions have been
pending. After the comment was filed,
the petitioner in G.R. No. 92047 asked
for thirty (30) days to file a reply. We
noted his motion and resolved to decide
the two (2) cases.
I
The subject property in this case is one
of the four (4) properties in Japan
acquired by the Philippine government
under the Reparations Agreement
entered into with Japan on May 9, 1956,
the other lots being:
(1) The Nampeidai Property at 11-24
Nampeidai-machi, Shibuya-ku, Tokyo
which has an area of approximately
2,489.96 square meters, and is at
present the site of the Philippine
Embassy Chancery;
(2) The Kobe Commercial Property at 63
Naniwa-cho, Kobe, with an area of
around 764.72 square meters and
categorized as a commercial lot now
being used as a warehouse and parking
lot for the consulate staff; and
(3) The Kobe Residential Property at 1980-2 Obanoyama-cho, Shinohara,

Nada-ku, Kobe, a residential lot which is

now vacant.
The properties and the capital goods and
services procured from the Japanese
government for national development
projects are part of the indemnification
to the Filipino people for their losses in
life and property and their suffering
during World War II.
The Reparations Agreement provides
that reparations valued at $550 million
would be payable in twenty (20) years in
accordance with annual schedules of
procurements to be fixed by the
Philippine and Japanese governments
(Article 2, Reparations Agreement).
Rep. Act No. 1789, the Reparations Law,
prescribes the national policy on
procurement
and
utilization
of
reparations and development loans. The
procurements are divided into those for
use by the government sector and those
for private parties in projects as the
then National Economic Council shall
determine. Those intended for the
private sector shall be made available by
sale to Filipino citizens or to one
hundred (100%) percent Filipino-owned
entities in national development
projects.
The Roppongi property was acquired
from the Japanese government under
the Second Year Schedule and listed
under the heading "Government Sector",
through Reparations Contract No. 300
dated June 27, 1958. The Roppongi
property consists of the land and
building "for the Chancery of the
Philippine Embassy" (Annex M-D to
Memorandum for Petitioner, p. 503). As
intended, it became the site of the
Philippine Embassy until the latter was
transferred to Nampeidai on July 22,
1976 when the Roppongi building
needed major repairs. Due to the failure
of our government to provide necessary

funds, the Roppongi property has

remained undeveloped since that time.
A proposal was presented to President
Corazon C. Aquino by former Philippine
Ambassador to Japan, Carlos J. Valdez,
to make the property the subject of a
lease agreement with a Japanese firm Kajima Corporation which shall
construct two (2) buildings in Roppongi
and one (1) building in Nampeidai and
renovate
the
present
Philippine
Chancery
in
Nampeidai.
The
consideration of the construction would
be the lease to the foreign corporation of
one (1) of the buildings to be constructed
in Roppongi and the two (2) buildings in
Nampeidai. The other building in
Roppongi shall then be used as the
Philippine Embassy Chancery. At the
end of the lease period, all the three
leased buildings shall be occupied and
used by the Philippine government. No
change of ownership or title shall occur.
(See Annex "B" to Reply to Comment)
The Philippine government retains the
title all throughout the lease period and
thereafter. However, the government
has not acted favorably on this proposal
which is pending approval and
ratification between the parties. Instead,
on August 11, 1986, President Aquino
created a committee to study the
disposition/utilization of Philippine
government properties in Tokyo and
Kobe, Japan through Administrative
Order No. 3, followed by Administrative
Orders Numbered 3-A, B, C and D.
On July 25, 1987, the President issued
Executive Order No. 296 entitling nonFilipino citizens or entities to avail of
separations' capital goods and services
in the event of sale, lease or disposition.
The four properties in Japan including
the
Roppongi
were
specifically
mentioned in the first "Whereas" clause.
Amidst opposition by various sectors,
the Executive branch of the government

has been pushing, with great vigor, its

decision to sell the reparations
properties starting with the Roppongi
lot. The property has twice been set for
bidding at a minimum floor price of
$225 million. The first bidding was a
failure since only one bidder qualified.
The second one, after postponements,
has not yet materialized. The last
scheduled bidding on February 21, 1990
was restrained by his Court. Later, the
rules on bidding were changed such that
the $225 million floor price became
merely a suggested floor price.
The Court finds that each of the herein
petitions raises distinct issues. The
petitioner in G.R. No. 92013 objects to
the alienation of the Roppongi property
to anyone while the petitioner in G.R.
No. 92047 adds as a principal objection
the alleged unjustified bias of the
Philippine government in favor of
selling the property to non-Filipino
citizens and entities. These petitions
have been consolidated and are resolved
at the same time for the objective is the
same - to stop the sale of the Roppongi
property.
The petitioner in G.R. No. 92013 raises
the following issues:
(1) Can the Roppongi property and
others of its kind be alienated by the
Philippine Government?; and
(2) Does the Chief Executive, her officers
and agents, have the authority and
jurisdiction, to sell the Roppongi
property?
Petitioner Dionisio Ojeda in G.R. No.
92047, apart from questioning the
authority of the government to alienate
the Roppongi property assails the
constitutionality of Executive Order No.
296 in making the property available for
sale to non-Filipino citizens and entities.
He also questions the bidding
procedures of the Committee on the
Utilization or Disposition of Philippine

Government Properties in Japan for

being discriminatory against Filipino
citizens and Filipino-owned entities by
denying them the right to be informed
about the bidding requirements.
II
In G.R. No. 92013, petitioner Laurel
asserts that the Roppongi property and
the related lots were acquired as part of
the reparations from the Japanese
government for diplomatic and consular
use by the Philippine government. VicePresident Laurel states that the
Roppongi property is classified as one of
public dominion, and not of private
ownership under Article 420 of the Civil
Code (See infra).
The petitioner submits that the
Roppongi property comes under
"property intended for public service" in
paragraph 2 of the above provision. He
states that being one of public dominion,
no ownership by any one can attach to
it, not even by the State. The Roppongi
and related properties were acquired for
"sites for chancery, diplomatic, and
consular quarters, buildings and other
improvements"
(Second
Year
Reparations Schedule). The petitioner
states that they continue to be intended
for a necessary service. They are held by
the State in anticipation of an opportune
use. (Citing 3 Manresa 65-66). Hence, it
cannot be appropriated, is outside the
commerce of man, or to put it in more
simple terms, it cannot be alienated nor
be the subject matter of contracts (Citing
Municipality of Cavite v. Rojas, 30 Phil.
20 [1915]). Noting the non-use of the
Roppongi property at the moment, the
petitioner avers that the same remains
property of public dominion so long as
the government has not used it for other
purposes nor adopted any measure
constituting a removal of its original
purpose or use.

The respondents, for their part, refute

the petitioner's contention by saying
that the subject property is not governed
by our Civil Code but by the laws of
Japan where the property is located.
They rely upon the rule of lex
situs which is used in determining the
applicable law regarding the acquisition,
transfer and devolution of the title to a
property. They also invoke Opinion No.
21, Series of 1988, dated January 27,
1988 of the Secretary of Justice which
used the lex situs in explaining the
inapplicability
of
Philippine
law
regarding a property situated in Japan.
The respondents add that even
assuming for the sake of argument that
the Civil Code is applicable, the
Roppongi property has ceased to
become property of public dominion. It
has become patrimonial property
because it has not been used for public
service or for diplomatic purposes for
over thirteen (13) years now (Citing
Article 422, Civil Code) and because
the intention by
the
Executive
Department and the Congress to
convert it to private use has been
manifested by overt acts, such as, among
others: (1) the transfer of the Philippine
Embassy to Nampeidai (2) the issuance
of administrative orders for the
possibility of alienating the four
government properties in Japan; (3) the
issuance of Executive Order No. 296; (4)
the enactment by the Congress of Rep.
Act No. 6657 [the Comprehensive
Agrarian Reform Law] on June 10, 1988
which contains a provision stating that
funds may be taken from the sale of
Philippine
properties
in
foreign
countries; (5) the holding of the public
bidding of the Roppongi property but
which failed; (6) the deferment by the
Senate in Resolution No. 55 of the
bidding to a future date; thus an
acknowledgment by the Senate of the

government's intention to remove the

Roppongi property from the public
service purpose; and (7) the resolution
of this Court dismissing the petition
in Ojeda v. Bidding Committee, et al.,
G.R. No. 87478 which sought to enjoin
the second bidding of the Roppongi
property scheduled on March 30, 1989.
III
In G.R. No. 94047, petitioner Ojeda
once more asks this Court to rule on the
constitutionality of Executive Order No.
296. He had earlier filed a petition in
G.R. No. 87478 which the Court
dismissed on August 1, 1989. He now
avers that the executive order
contravenes the constitutional mandate
to conserve and develop the national
patrimony stated in the Preamble of the
1987 Constitution. It also allegedly
violates:
(1) The reservation of the ownership and
acquisition of alienable lands of the
public domain to Filipino citizens.
(Sections 2 and 3, Article XII,
Constitution; Sections 22 and 23 of
Commonwealth Act 141).itc-asl
(2) The preference for Filipino citizens
in the grant of rights, privileges and
concessions covering the national
economy and patrimony (Section 10,
Article VI, Constitution);
(3) The protection given to Filipino
enterprises against unfair competition
and trade practices;
(4) The guarantee of the right of the
people to information on all matters of
public concern (Section 7, Article III,
Constitution);
(5) The prohibition against the sale to
non-Filipino citizens or entities not
wholly owned by Filipino citizens of
capital goods received by the Philippines
under the Reparations Act (Sections 2
and 12 of Rep. Act No. 1789); and
(6) The declaration of the state policy of
full public disclosure of all transactions

involving public interest (Section 28,

Article III, Constitution).
Petitioner Ojeda warns that the use of
public funds in the execution of an
unconstitutional executive order is a
misapplication of public funds He states
that since the details of the bidding for
the Roppongi property were never
publicly disclosed until February 15,
1990 (or a few days before the scheduled
bidding), the bidding guidelines are
available only in Tokyo, and the
accomplishment of requirements and
the selection of qualified bidders should
be done in Tokyo, interested Filipino
citizens or entities owned by them did
not have the chance to comply with
Purchase Offer Requirements on the
Roppongi. Worse, the Roppongi shall be
sold for a minimum price of $225
million from which price capital gains
tax under Japanese law of about 50 to
70% of the floor price would still be
deducted.
IV
The petitioners and respondents in both
cases do not dispute the fact that the
Roppongi site and the three related
properties were through reparations
agreements, that these were assigned to
the government sector and that the
Roppongi property itself was specifically
designated under the Reparations
Agreement to house the Philippine
Embassy.
The nature of the Roppongi lot as
property for public service is expressly
spelled out. It is dictated by the terms of
the Reparations Agreement and the
corresponding contract of procurement
which bind both the Philippine
government
and
the
Japanese
government.
There can be no doubt that it is of public
dominion unless it is convincingly
shown that the property has become

patrimonial. This, the respondents have

failed to do.
As property of public dominion, the
Roppongi lot is outside the commerce of
man. It cannot be alienated. Its
ownership is a special collective
ownership for general use and
enjoyment, an application to the
satisfaction of collective needs, and
resides in the social group. The purpose
is not to serve the State as a juridical
person, but the citizens; it is intended
for the common and public welfare and
cannot be the object of appropration.
(Taken from 3 Manresa, 66-69; cited in
Tolentino, Commentaries on the Civil
Code of the Philippines, 1963 Edition,
Vol. II, p. 26).
The applicable provisions of the Civil
Code are:
ART. 419. Property is either of public
dominion or of private ownership.
ART. 420. The following things are
property of public dominion
(1) Those intended for public use, such
as roads, canals, rivers, torrents, ports
and bridges constructed by the State,
banks shores roadsteads, and others of
similar character;
(2) Those which belong to the State,
without being for public use, and are
intended for some public service or for
the development of the national wealth.
ART. 421. All other property of the State,
which is not of the character stated in
the preceding article, is patrimonial
property.
The Roppongi property is correctly
classified under paragraph 2 of Article
420 of the Civil Code as property
belonging to the State and intended for
some public service.
Has the intention of the government
regarding the use of the property been
changed because the lot has been Idle
for some years? Has it become
patrimonial?

The fact that the Roppongi site has not

been used for a long time for actual
Embassy service does not automatically
convert it to patrimonial property. Any
such conversion happens only if the
property is withdrawn from public use
(Cebu Oxygen and Acetylene Co. v.
Bercilles, 66 SCRA 481 [1975]). A
property continues to be part of the
public domain, not available for private
appropriation or ownership until there
is a formal declaration on the part of the
government to withdraw it from being
such (Ignacio v. Director of Lands, 108
Phil. 335 [1960]).
The respondents enumerate various
pronouncements by concerned public
officials insinuating a change of
intention. We emphasize, however, that
an abandonment of the intention to use
the Roppongi property for public service
and to make it patrimonial property
under Article 422 of the Civil Code must
be definite Abandonment cannot be
inferred from the non-use alone
specially if the non-use was attributable
not to the government's own deliberate
and indubitable will but to a lack of
financial support to repair and improve
the property (See Heirs of Felino
Santiago v. Lazaro, 166 SCRA 368
[1988]). Abandonment must be a certain
and positive act based on correct legal
premises.
A mere transfer of the Philippine
Embassy to Nampeidai in 1976 is not
relinquishment
of
the
Roppongi
property's original purpose. Even the
failure by the government to repair the
building
in
Roppongi
is
not
abandonment since as earlier stated,
there simply was a shortage of
government
funds.
The
recent
Administrative Orders authorizing a
study of the status and conditions of
government properties in Japan were
merely directives for investigation but

did not in any way signify a clear

intention to dispose of the properties.
Executive Order No. 296, though its title
declares an "authority to sell", does not
have a provision in its text expressly
authorizing the sale of the four
properties procured from Japan for the
government sector. The executive order
does not declare that the properties lost
their public character. It merely intends
to make the properties available to
foreigners and not to Filipinos alone in
case of a sale, lease or other disposition.
It merely eliminates the restriction
under Rep. Act No. 1789 that
reparations goods may be sold only to
Filipino citizens and one hundred
(100%) percent Filipino-owned entities.
The text of Executive Order No. 296
provides:
Section 1. The provisions of Republic Act
No. 1789, as amended, and of other laws
to the contrary notwithstanding, the
above-mentioned properties can be
made available for sale, lease or any
other manner of disposition to nonFilipino citizens or to entities owned by
non-Filipino citizens.
Executive Order No. 296 is based on the
wrong premise or assumption that the
Roppongi and the three other properties
were earlier converted into alienable
real properties. As earlier stated, Rep.
Act No. 1789 differentiates the
procurements for the government sector
and the private sector (Sections 2 and
12, Rep. Act No. 1789). Only the private
sector properties can be sold to endusers who must be Filipinos or entities
owned by Filipinos. It is this nationality
provision which was amended by
Executive Order No. 296.
Section 63 (c) of Rep. Act No. 6657 (the
CARP Law) which provides as one of the
sources of funds for its implementation,
the proceeds of the disposition of the
properties of the Government in foreign

countries, did not withdraw the

Roppongi property from being classified
as one of public dominion when it
mentions Philippine properties abroad.
Section 63 (c) refers to properties which
are alienable and not to those reserved
for public use or service. Rep Act No.
6657, therefore, does not authorize the
Executive Department to sell the
Roppongi
property.
It
merely
enumerates possible sources of future
funding to augment (as and when
needed) the Agrarian Reform Fund
created under Executive Order No. 299.
Obviously any property outside of the
commerce of man cannot be tapped as a
source of funds.
The respondents try to get around the
public dominion character of the
Roppongi property by insisting that
Japanese law and not our Civil Code
should apply.
It is exceedingly strange why our top
government officials, of all people,
should be the ones to insist that in the
sale of extremely valuable government
property, Japanese law and not
Philippine law should prevail. The
Japanese law - its coverage and effects,
when enacted, and exceptions to its
provision is not presented to the
Court It is simply asserted that the lex
loci rei sitae or Japanese law should
apply without stating what that law
provides. It is a ed on faith that
Japanese law would allow the sale.
We see no reason why a conflict of law
rule should apply when no conflict of
law situation exists. A conflict of law
situation arises only when: (1) There is a
dispute over the title or ownership of an
immovable, such that the capacity to
take and transfer immovables, the
formalities of conveyance, the essential
validity and effect of the transfer, or the
interpretation
and
effect
of
a
conveyance, are to be determined (See

Salonga, Private International Law,

1981 ed., pp. 377-383); and (2) A foreign
law on land ownership and its
conveyance is asserted to conflict with a
domestic law on the same matters.
Hence, the need to determine which law
should apply.
In the instant case, none of the above
elements exists.
The issues are not concerned with
validity of ownership or title. There is no
question that the property belongs to the
Philippines. The issue is the authority of
the respondent officials to validly
dispose of property belonging to the
State. And the validity of the procedures
adopted to effect its sale. This is
governed by Philippine Law. The rule
of lex situs does not apply.
The assertion that the opinion of the
Secretary of Justice sheds light on the
relevance of the lex situsrule is
misplaced. The opinion does not tackle
the alienability of the real properties
procured through reparations nor the
existence in what body of the authority
to sell them. In discussing who are
capableof acquiring the lots, the
Secretary merely explains that it is the
foreign
law
which
should
determine who
can
acquire
the
properties so that the constitutional
limitation on acquisition of lands of the
public domain to Filipino citizens and
entities wholly owned by Filipinos is
inapplicable. We see no point in
belaboring whether or not this opinion
is correct. Why should we discuss who
can acquire the Roppongi lot when there
is no showing that it can be sold?
The subsequent approval on October 4,
1988 by President Aquino of the
recommendation by the investigating
committee to sell the Roppongi property
was premature or, at the very least,
conditioned on a valid change in the
public character of the Roppongi

property. Moreover, the approval does

not have the force and effect of law since
the President already lost her legislative
powers. The Congress had already
convened for more than a year.
Assuming for the sake of argument,
however, that the Roppongi property is
no longer of public dominion, there is
another obstacle to its sale by the
respondents.
There is no law authorizing its
conveyance.
Section 79 (f) of the Revised
Administrative Code of 1917 provides
Section 79 (f ) Conveyances and
contracts to which the Government is a
party. In cases in which the
Government of the Republic of the
Philippines is a party to any deed or
other instrument conveying the title to
real estate or to any other property the
value of which is in excess of one
hundred thousand pesos, the respective
Department Secretary shall prepare the
necessary papers which, together with
the proper recommendations, shall be
submitted to the Congress of the
Philippines for approval by the
same. Such deed, instrument, or
contract shall be executed and signed by
the President of the Philippines on
behalf of the Government of the
Philippines unless the Government of
the Philippines unless the authority
therefor be expressly vested by law in
another officer. (Emphasis supplied)
The requirement has been retained in
Section 48, Book I of the Administrative
Code of 1987 (Executive Order No. 292).
SEC. 48. Official Authorized to Convey
Real Property. Whenever real
property
of
the
Government
is authorized by law to be conveyed, the
deed of conveyance shall be executed in
behalf of the government by the
following:

(1) For property belonging to and titled

in the name of the Republic of the
Philippines, by the President, unless the
authority therefor is expressly vested by
law in another officer.
(2) For property belonging to the
Republic of the Philippines but titled in
the name of any political subdivision or
of
any
corporate
agency
or
instrumentality, by the executive head of
the
agency
or
instrumentality.
(Emphasis supplied)
It is not for the President to convey
valuable
real
property
of
the
government on his or her own sole will.
Any such conveyance must be
authorized and approved by a law
enacted by the Congress. It requires
executive and legislative concurrence.
Resolution No. 55 of the Senate dated
June 8, 1989, asking for the deferment
of the sale of the Roppongi property
does not withdraw the property from
public domain much less authorize its
sale. It is a mere resolution; it is not a
formal declaration abandoning the
public character of the Roppongi
property. In fact, the Senate Committee
on Foreign Relations is conducting
hearings on Senate Resolution No. 734
which
raises
serious
policy
considerations and calls for a factfinding
investigation
of
the
circumstances behind the decision to
sell
the
Philippine
government
properties in Japan.
The resolution of this Court in Ojeda v.
Bidding Committee, et al., supra, did
not pass upon the constitutionality of
Executive Order No. 296. Contrary to
respondents' assertion, we did not
uphold the authority of the President to
sell the Roppongi property. The Court
stated that the constitutionality of the
executive order was not the real issue
and that resolving the constitutional
question was "neither necessary nor

finally determinative of the case." The

Court noted that "[W]hat petitioner
ultimately questions is the use of the
proceeds of the disposition of the
Roppongi property." In emphasizing
that "the decision of the Executive to
dispose of the Roppongi property to
finance the CARP ... cannot be
questioned" in view of Section 63 (c) of
Rep. Act No. 6657, the Court did not
acknowledge the fact that the property
became alienable nor did it indicate that
the President was authorized to dispose
of the Roppongi property. The
resolution should be read to mean that
in case the Roppongi property is reclassified to be patrimonial and
alienable by authority of law, the
proceeds of a sale may be used for
national economic development projects
including the CARP.
Moreover, the sale in 1989 did not
materialize. The petitions before us
question the proposed 1990 sale of the
Roppongi property. We are resolving the
issues raised in these petitions, not the
issues raised in 1989.
Having declared a need for a law or
formal declaration to withdraw the
Roppongi property from public domain
to make it alienable and a need for
legislative authority to allow the sale of
the property, we see no compelling
reason to tackle the constitutional issues
raised by petitioner Ojeda.
The Court does not ordinarily pass upon
constitutional questions unless these
questions are properly raised in
appropriate cases and their resolution is
necessary for the determination of the
case (People v. Vera, 65 Phil. 56 [1937]).
The Court will not pass upon a
constitutional
question
although
properly presented by the record if the
case can be disposed of on some other
ground such as the application of a
statute or general law (Siler v. Louisville

and Nashville R. Co., 213 U.S. 175,

[1909], Railroad Commission v. Pullman
Co., 312 U.S. 496 [1941]).
The petitioner in G.R. No. 92013 states
why the Roppongi property should not
be sold:
The Roppongi property is not just like
any piece of property. It was given to the
Filipino people in reparation for the
lives and blood of Filipinos who died
and suffered during the Japanese
military occupation, for the suffering of
widows and orphans who lost their
loved ones and kindred, for the homes
and other properties lost by countless
Filipinos during the war. The Tokyo
properties are a monument to the
bravery and sacrifice of the Filipino
people in the face of an invader; like the
monuments of Rizal, Quezon, and other
Filipino heroes, we do not expect
economic or financial benefits from
them. But who would think of selling
these monuments? Filipino honor and
national dignity dictate that we keep our
properties in Japan as memorials to the
countless Filipinos who died and
suffered. Even if we should become
paupers we should not think of selling
them. For it would be as if we sold the
lives and blood and tears of our
countrymen. (Rollo- G.R. No. 92013,
p.147)
The petitioner in G.R. No. 92047 also
states:
Roppongi is no ordinary property. It is
one ceded by the Japanese government
in atonement for its past belligerence for
the valiant sacrifice of life and limb and
for deaths, physical dislocation and
economic devastation the whole Filipino
people endured in World War II.
It is for what it stands for, and for what
it could never bring back to life, that its
significance today remains undimmed,
inspire of the lapse of 45 years since the
war ended, inspire of the passage of 32

years since the property passed on to the

Philippine government.
Roppongi is a reminder that cannot
should not be dissipated ... (Rollo92047, p. 9)
It is indeed true that the Roppongi
property is valuable not so much
because of the inflated prices fetched by
real property in Tokyo but more so
because of its symbolic value to all
Filipinos veterans and civilians alike.
Whether or not the Roppongi and
related properties will eventually be sold
is a policy determination where both the
President and Congress must concur.
Considering the properties' importance
and value, the laws on conversion and
disposition of property of public
dominion must be faithfully followed.
WHEREFORE, IN VIEW OF THE
FOREGOING,
the
petitions
are
GRANTED. A writ of prohibition is
issued enjoining the respondents from
proceeding with the sale of the
Roppongi property in Tokyo, Japan. The
February
20,
1990
Temporary
Restraining
Order
is
made
PERMANENT.
SO ORDERED.
Melencio-Herrera, Paras, Bidin, GrioAquino and Regalado, JJ., concur.

Separate Opinions
CRUZ, J., concurring:
I concur completely with the excellent
ponencia of Mr. Justice Gutierrez and
will add the following observations only
for emphasis.
It is clear that the respondents have
failed to show the President's legal
authority to sell the Roppongi property.
When asked to do so at the hearing on
these petitions, the Solicitor General was
at best ambiguous, although I must add
in fairness that this was not his fault.

The fact is that there is -no such

authority. Legal expertise alone cannot
conjure that statutory permission out of
thin air.
Exec. Order No. 296, which reads like so
much legislative, double talk, does not
contain such authority. Neither does
Rep. Act No. 6657, which simply allows
the proceeds of the sale of our properties
abroad to be used for the comprehensive
agrarian reform program. Senate Res.
No. 55 was a mere request for the
deferment of the scheduled sale of tile
Roppongi property, possibly to stop the
transaction altogether; and ill any case it
is not a law. The sale of the said property
may be authorized only by Congress
through a duly enacted statute, and
there is no such law.
Once again, we have affirmed the
principle that ours is a government of
laws and not of men, where every public
official, from the lowest to the highest,
can act only by virtue of a valid
authorization. I am happy to note that in
the several cases where this Court has
ruled against her, the President of the
Philippines has submitted to this
principle with becoming grace.
PADILLA, J., concurring:
I concur in the decision penned by Mr.
Justice Gutierrez, Jr., I only wish to
make a few observations which could
help in further clarifying the issues.
Under our tripartite system of
government
ordained
by
the
Constitution, it is Congress that lays
down or determines policies. The
President executes such policies. The
policies determined by Congress are
embodied in legislative enactments that
have to be approved by the President to
become law. The President, of course,
recommends to Congress the approval
of policies but, in the final analysis, it is

Congress that is the policy - determining

branch of government.
The judiciary interprets the laws and, in
appropriate cases, determines whether
the laws enacted by Congress and
approved by the President, and
presidential acts implementing such
laws, are in accordance with the
Constitution.
The Roppongi property was acquired by
the Philippine government pursuant to
the reparations agreement between the
Philippine and Japanese governments.
Under such agreement, this property
was acquired by the Philippine
government for a specific purpose,
namely, to serve as the site of the
Philippine Embassy in Tokyo, Japan.
Consequently, Roppongi is a property of
public dominion and intended for public
service, squarely falling within that class
of property under Art. 420 of the Civil
Code, which provides:
Art. 420. The following things are
property of public dominion :
(1) ...
(2) Those which belong to the State,
without being for public use, and are
intended for some public service or for
the development of the national wealth.
(339a)
Public dominion property intended for
public service cannot be alienated unless
the property is first transformed into
private property of the state otherwise
known as patrimonial property of the
state. 1 The transformation of public
dominion property to state patrimonial
property involves, to my mind, a policy
decision. It is a policy decision because
the treatment of the property varies
according
to
its
classification.
Consequently, it is Congress which can
decide and declare the conversion of
Roppongi from a public dominion
property to a state patrimonial property.

Congress has made no such decision or

declaration.
Moreover, the sale of public property
(once converted from public dominion
to state patrimonial property) must be
approved by Congress, for this again is a
matter of policy (i.e. to keep or dispose
of the property). Sec. 48, Book 1 of the
Administrative Code of 1987 provides:
SEC. 48. Official Authorized to Convey
Real Property. Whenever real
property of the Government is
authorized by law to be conveyed, the
deed of conveyance shall be executed in
behalf of the government by the
following:
(1) For property belonging to and titled
in the name of the Republic of the
Philippines, by the President, unless the
authority therefor is expressly vested by
law in another officer.
(2) For property belonging to the
Republic of the Philippines but titled in
the name of any political subdivision or
of
any
corporate
agency
or
instrumentality, by the executive head of
the
agency
or
instrumentality.
(Emphasis supplied)
But the record is bare of any
congressional decision or approval to
sell Roppongi. The record is likewise
bare of any congressional authority
extended to the President to sell
Roppongi thru public bidding or
otherwise.
It is therefore, clear that the President
cannot sell or order the sale of Roppongi
thru public bidding or otherwise without
a prior congressional approval, first,
converting Roppongi from a public
dominion
property
to
a
state
patrimonial property, and, second,
authorizing the President to sell the
same.
ACCORDINGLY, my vote is to GRANT
the petition and to make PERMANENT

the temporary restraining order earlier

issued by this Court.
SARMIENTO, J., concurring:
The central question, as I see it, is
whether or not the so-called "Roppongi
property' has lost its nature as property
of public dominion, and hence, has
become patrimonial property of the
State. I understand that the parties are
agreed that it was property intended for
"public
service"
within
the
contemplation of paragraph (2), of
Article 430, of the Civil Code, and
accordingly, land of State dominion, and
beyond human commerce. The lone
issue is, in the light of supervening
developments, that is non-user thereof
by the National Government (for
diplomatic purposes) for the last
thirteen years; the issuance of Executive
Order No. 296 making it available for
sale to any interested buyer; the
promulgation of Republic Act No. 6657,
the Comprehensive Agrarian Reform
Law, making available for the program's
financing, State assets sold; the approval
by the President of the recommendation
of the investigating committee formed to
study the property's utilization; and the
issuance of Resolution No. 55 of the
Philippine Senate requesting for the
deferment of its disposition it,
"Roppongi", is still property of the
public dominion, and if it is not, how it
lost that character.
When land of the public dominion
ceases to be one, or when the change
takes place, is a question our courts have
debated early. In a 1906 decision, 1 it
was held that property of the public
dominion, a public plaza in this
instance, becomes patrimonial upon use
thereof for purposes other than a plaza.
In a later case, 2 this ruling was
reiterated. Likewise, it has been held
that land, originally private property,

has become of public dominion upon its

donation to the town and its conversion
and use as a public plaza. 3 It is notable
that under these three cases, the
character of the property, and any
change occurring therein, depends on
the actual use to which it is dedicated. 4
Much later, however, the Court held that
"until a formal declaration on the part of
the Government, through the executive
department or the Legislative, to the
effect that the land . . . is no longer
needed for [public] service- for public
use or for special industries, [it]
continue[s] to be part of the public
[dominion], not available for private
expropriation or ownership." 5 So also, it
was ruled that a political subdivision
(the City of Cebu in this case) alone may
declare (under its charter) a city road
abandoned and thereafter, to dispose of
it. 6
In holding that there is "a need for a law
or formal declaration to withdraw the
Roppongi property from public domain
to make it alienable and a land for
legislative authority to allow the sale of
the property" 7the majority lays stress to
the fact that: (1) An affirmative act
executive or legislative is necessary to
reclassify property of the public
dominion, and (2) a legislative decree is
required to make it alienable. It also
clears the uncertainties brought about
by earlier interpretations that the nature
of
property-whether
public
or
patrimonial is predicated on the manner
it is actually used, or not used, and in
the same breath, repudiates the
Government's
position
that
the
continuous non-use of "Roppongi",
among other arguments, for "diplomatic
purposes", has turned it into State
patrimonial property.
I feel that this view corresponds to
existing pronouncements of this Court,
among other things, that: (1) Property is

presumed to be State property in the

absence of any showing to the
contrary; 8 (2) With respect to forest
lands, the same continue to be lands of
the public dominion unless and until
reclassified by the Executive Branch of
the Government; 9 and (3) All natural
resources, under the Constitution, and
subject to exceptional cases, belong to
the State. 10
I am elated that the Court has banished
previous uncertainties.
FELICIANO, J., dissenting
With regret, I find myself unable to
share the conclusions reached by Mr.
Justice Hugo E. Gutierrez, Jr.
For purposes of this separate opinion, I
assume that the piece of land located in
306 Roppongi, 5-Chome, Minato-ku
Tokyo, Japan (hereinafter referred to as
the "Roppongi property") may be
characterized as property of public
dominion, within the meaning of Article
420 (2) of the Civil Code:
[Property] which belong[s] to the State,
without being for public use, and are
intended for some public service -.
It might not be amiss however, to note
that the appropriateness of trying to
bring within the confines of the simple
threefold classification found in Article
420 of the Civil Code ("property for
public use property "intended for some
public service" and property intended
"for the development of the national
wealth") all property owned by the
Republic of the Philippines whether
found within the territorial boundaries
of the Republic or located within the
territory of another sovereign State,
is not self-evident. The first item of the
classification
property
intended
for public use can scarcely be properly
applied to property belonging to the
Republic but found within the territory
of another State. The third item of the

classification property intended for the

development of the national wealth is
illustrated, in Article 339 of the Spanish
Civil Code of 1889, by mines or mineral
properties. Again, mineral lands owned
by a sovereign State are rarely, if ever,
found within the territorial base of
another sovereign State. The task of
examining in detail the applicability of
the classification set out in Article 420 of
our Civil Code to property that the
Philippines happens to own outside its
own boundaries must, however, be left
to academicians.
For present purposes, too, I agree that
there is no question of conflict of laws
that is, at the present time, before this
Court. The issues before us relate
essentially to authority to sell the
Roppongi property so far as Philippine
law is concerned.
The majority opinion raises two (2)
issues: (a) whether or not the Roppongi
property has been converted into
patrimonial property or property of the
private domain of the State; and (b)
assuming an affirmative answer to (a),
whether or not there is legal authority to
dispose of the Roppongi property.
I
Addressing the first issue of conversion
of property of public dominion intended
for some public service, into property of
the private domain of the Republic, it
should be noted that the Civil Code does
not address the question of who has
authority to effect such conversion.
Neither does the Civil Code set out or
refer
to
any procedure for
such
conversion.
Our case law, however, contains some
fairly explicit pronouncements on this
point, as Justice Sarmiento has pointed
out in his concurring opinion.
In Ignacio v. Director of Lands (108
Phils. 335 [1960]), petitioner Ignacio
argued that if the land in question

formed part of the public domain, the

trial court should have declared the
same no longer necessary for public use
or public purposes and which would,
therefore, have become disposable and
available for private ownership. Mr.
Justice Montemayor, speaking for the
Court, said:
Article 4 of the Law of Waters of 1866
provides that when a portion of the
shore is no longer washed by the waters
of the sea and is not necessary for
purposes of public utility, or for the
establishment of special industries, or
for coast-guard service, the government
shall declare it to be the property of the
owners of the estates adjacent thereto
and as an increment thereof. We believe
that only the executive and possibly the
legislative departments have the
authority and the power to make the
declaration that any land so gained by
the sea, is not necessary for purposes of
public utility, or for the establishment of
special industries, or for coast-guard
service. If no such declaration has been
made by said departments, the lot in
question forms part of the public
domain. (Natividad v. Director of
Lands, supra.)
The reason for this pronouncement,
according to this Tribunal in the case of
Vicente Joven y Monteverde v. Director
of Lands, 93 Phil., 134 (cited in Velayo's
Digest, Vol. 1, p. 52).
... is undoubtedly that the courts are
neither primarily called upon, nor
indeed in a position to determine
whether any public land are to be used
for the purposes specified in Article 4 of
the Law of Waters. Consequently, until
a formal declaration on the part of the
Government, through the executive
department or the Legislature, to the
effect that the land in question is no
longer needed for coast-guard service,
for public use or for special industries,

they continue to be part of the public

domain not available for private
appropriation or ownership.(108 Phil.
at 338-339; emphasis supplied)
Thus,
under
Ignacio,
either
the Executive Department or the
Legislative Department may convert
property of the State of public dominion
into patrimonial property of the State.
No particular formula or procedure of
conversion is specified either in statute
law or in case law. Article 422 of the
Civil Code simply states that: "Property
of public dominion, when no longer
intended for public use or for public
service, shall form part of the
patrimonial property of the State". I
respectfully submit, therefore, that the
only requirement which is legitimately
imposable is that the intent to convert
must be reasonably clear from a
consideration of the acts or acts of the
Executive Department or of the
Legislative Department which are said
to have effected such conversion.
The same legal situation exists in respect
of conversion of property of public
dominion belonging to municipal
corporations, i.e., local governmental
units, into patrimonial property of such
entities. In CebuOxygen Acetylene v.
Bercilles (66 SCRA 481 [1975]), the City
Council of Cebu by resolution declared a
certain portion of an existing street as an
abandoned road, "the same not being
included in the city development plan".
Subsequently, by another resolution, the
City Council of Cebu authorized the
acting City Mayor to sell the land
through public bidding. Although there
was no formal and explicit declaration
of conversion of property for public use
into patrimonial property, the Supreme
Court said:
xxx xxx xxx
(2) Since that portion of the city street
subject of petitioner's application for

registration of title was withdrawn

from public use, it follows that such
withdrawn
portion
becomes
patrimonial property which can be the
object of an ordinary contract.
Article 422 of the Civil Code expressly
provides that "Property of public
dominion, when no longer intended for
public use of for public service, shall
form part of the patrimonial property of
the State."
Besides, the Revised Charter of the City
of Cebu heretofore quoted, in very clear
and unequivocal terms, states that
"Property thus withdrawn from public
servitude may be used or conveyed for
any purpose for which other real
property belonging to the City may be
lawfully used or conveyed."
Accordingly, the withdrawal of the
property in question from public use
and its subsequent sale to the petitioner
is valid. Hence, the petitioner has a
registrable title over the lot in question.
(66 SCRA at 484-; emphasis supplied)
Thus, again as pointed out by
Sarmiento J., in his separate opinion, in
the case of property owned by municipal
corporations simple non-use or the
actual dedication of public property to
some use other than "public use" or
some "public service", was sufficient
legally to convert such property into
patrimonial property (Municipality of
Oas v. Roa, 7 Phil. 20 [1906]Municipality
of
Hinunganan
v.
Director of Lands 24 Phil. 124 [1913];
Province of Zamboanga del Norte v.
City of Zamboanga, 22 SCRA 1334
(1968).
I would also add that such was the case
not only in respect of' property of
municipal corporations but also in
respect of property of the State itself.
Manresa in commenting on Article 341
of the 1889 Spanish Civil Code which

has been carried over verbatim into our

Civil Code by Article 422 thereof, wrote:
La dificultad mayor en todo esto estriba,
naturalmente, en fijar el momento en
que los bienes de dominio publico dejan
de serlo. Si la Administracion o la
autoridad
competente
legislative
realizan qun acto en virtud del cual cesa
el destino o uso publico de los bienes de
que se trata naturalmente la dificultad
queda desde el primer momento
resuelta. Hay un punto de partida cierto
para iniciar las relaciones juridicas a que
pudiera haber lugar Pero puede ocurrir
que no haya taldeclaracion expresa,
legislativa or administrativa, y, sin
embargo, cesar de hecho el destino
publico de los bienes; ahora bien, en
este caso, y para los efectos juridicos que
resultan de entrar la cosa en el comercio
de los hombres,' se entedera que se ha
verificado la conversion de los bienes
patrimoniales?
El citado tratadista Ricci opina, respecto
del antiguo Codigo italiano, por la
afirmativa, y por nuestra parte creemos
que tal debe ser la soluciion. El destino
de las cosas no depende tanto de una
declaracion expresa como del uso
publico de las mismas, y cuanda el uso
publico
cese
con
respecto
de
determinados bienes, cesa tambien su
situacion en el dominio publico. Si una
fortaleza en ruina se abandona y no se
repara, si un trozo de la via publica se
abandona tambien por constituir otro
nuevo an mejores condiciones....ambos
bienes cesan de estar Codigo, y leyes
especiales
mas
o
memos
administrativas.
(3
Manresa,
Comentarios al Codigo Civil Espanol, p.
128 [7a ed.; 1952) (Emphasis supplied)
The majority opinion says that none of
the executive acts pointed to by the
Government purported, expressly or
definitely, to convert the Roppongi
property into patrimonial property of

the Republic. Assuming that to be the

case, it is respectfully submitted
that cumulative effect of the executive
acts here involved was to convert
property originally intended for and
devoted
to
public
service
into
patrimonial property of the State, that
is, property susceptible of disposition to
and appropration by private persons.
These executive acts, in their totality if
not each individual act, make crystal
clear the intent of the Executive
Department to effect such conversion.
These executive acts include:
(a) Administrative Order No. 3 dated 11
August
1985,
which
created
a
Committee
to
study
the
disposition/utilization
of
the
Government's property in Japan, The
Committee was composed of officials of
the
Executive
Department:
the
Executive Secretary; the Philippine
Ambassador
to
Japan;
and
representatives of the Department of
Foreign
Affairs
and
the
Asset
Privatization Trust. On 19 September
1988, the Committee recommended to
the President the sale of one of the lots
(the lot specifically in Roppongi)
through public bidding. On 4 October
1988, the President approved the
recommendation of the Committee.
On 14 December 1988, the Philippine
Government
by
diplomatic
note
informed the Japanese Ministry of
Foreign Affairs of the Republic's
intention to dispose of the property in
Roppongi. The Japanese Government
through its Ministry of Foreign Affairs
replied that it interposed no objection to
such disposition by the Republic.
Subsequently, the President and the
Committee informed the leaders of the
House of Representatives and of the
Senate of the Philippines of the
proposed disposition of the Roppongi
property.

(b) Executive Order No. 296, which was

issued by the President on 25 July 1987.
Assuming that the majority opinion is
right in saying that Executive Order No.
296 is insufficient to authorize the
sale of the Roppongi property, it is here
submitted with respect that Executive
Order No. 296 is more than sufficient to
indicate an intention to convert the
property previously devoted to public
service into patrimonial property that is
capable of being sold or otherwise
disposed of
(c) Non-use of the Roppongi lot for
fourteen (14) years for diplomatic or for
any other public purposes. Assuming
(but only arguendo) that non-use does
not, by itself, automatically convert the
property into patrimonial property. I
respectfully urge that prolonged nonuse, conjoined with the other factors
here listed, was legally effective to
convert the lot in Roppongi into
patrimonial property of the State.
Actually, as already pointed out, case
law involving property of municipal
corporations is to the effect that simple
non-use or the actual dedication of
public property to some use other than
public use or public service, was
sufficient to convert such property into
patrimonial property of the local
governmental entity concerned. Also as
pointed out above, Manresa reached the
same conclusion
in
respect
of
conversion of property of the public
domain of the State into property of the
private domain of the State.
The majority opinion states that
"abandonment cannot be inferred from
the non-use alone especially if the nonuse was attributable not to the
Government's own deliberate and
indubitable will but to lack of financial
support to repair and improve the
property" (Majority Opinion, p. 13).
With respect, it may be stressed that

there is no abandonment involved here,

certainly no abandonment of property or
of property rights. What is involved is
the charge of the classification of the
property from property of the public
domain into property of the private
domain of the State. Moreover, if for
fourteen (14) years, the Government did
not see fit to appropriate whatever funds
were necessary to maintain the property
in Roppongi in a condition suitable for
diplomatic representation purposes,
such circumstance may, with equal logic,
be construed as a manifestation of the
crystalizing intent to change the
character of the property.
(d) On 30 March 1989, a public bidding
was in fact held by the Executive
Department for the sale of the lot in
Roppongi. The circumstance that this
bidding was not successful certainly
does not argue against an intent to
convert the property involved into
property that is disposable by bidding.
The above set of events and
circumstances makes no sense at all if it
does not, as a whole, show at least the
intent on the part of the Executive
Department (with the knowledge of the
Legislative Department) to convert the
property involved into patrimonial
property that is susceptible of being
sold.
II
Having reached an affirmative answer in
respect of the first issue, it is necessary
to address the second issue of whether
or not there exists legal authority for the
sale or disposition of the Roppongi
property.
The majority opinion refers to Section
79(f) of the Revised Administrative Code
of 1917 which reads as follows:
SEC. 79 (f). Conveyances and contracts
to which the Government is a party.
In cases in which the Government of the
Republic of the Philippines is a party to

any deed or other instrument conveying

the title to real estate or to any other
property the value of which is in excess
of one hundred thousand pesos, the
respective Department Secretary shall
prepare the necessary papers which,
together
with
the
proper
recommendations, shall be submitted to
the Congress of the Philippines for
approval by the same. Such deed,
instrument, or contract shall be
executed and signed by the President of
the Philippines on behalf of the
Government of the Philippines unless
the authority therefor be expressly
vested by law in another officer.
(Emphasis supplied)
The majority opinion then goes on to
state that: "[T]he requirement has been
retained in Section 4, Book I of the
Administrative Code of 1987 (Executive
Order No. 292)" which reads:
SEC. 48. Official Authorized to Convey
Real Property. Whenever real
property
of
the
Government
is authorized by law to be conveyed, the
deed of conveyance shall be executed in
behalf of the government by the
following:
(1) For property belonging to and titled
in the name of the Republic of the
Philippines, by the President, unless the
authority therefor is expressly vested by
law in another officer.
(2) For property belonging to the
Republic of the Philippines but titled in
the name of any political subdivision or
of
any
corporate
agency
or
instrumentality, by the executive head of
the
agency
or
instrumentality.
(Emphasis supplied)
Two points need to be made in this
connection. Firstly, the requirement of
obtaining
specific
approval of
Congress when the price of the real
property being disposed of is in excess
of One Hundred Thousand Pesos

(P100,000.00) under
the
Revised
Administrative Code of 1917, has
been deleted from Section 48 of the
1987 Administrative Code. What Section
48 of the present Administrative Code
refers to isauthorization by law for the
conveyance. Section 48 does not purport
to be itself a source of legal authority for
conveyance of real property of the
Government. For Section 48 merely
specifies the official authorized to
execute and sign on behalf of the
Government the deed of conveyance in
case of such a conveyance.
Secondly, examination of our statute
books shows that authorization by law
for disposition of real property of the
private domain of the Government, has
been granted by Congress both in the
form of (a) a general, standing
authorization
for
disposition
of
patrimonial
property
of
the
Government; and (b) specific legislation
authorizing the disposition of particular
pieces of the Government's patrimonial
property.
Standing legislative authority for the
disposition of land of the private domain
of the Philippines is provided by Act No.
3038, entitled "An Act Authorizing the
Secretary of Agriculture and Natural
Resources to Sell or Lease Land of the
Private Domain of the Government of
the Philippine Islands (now Republic of
the Philippines)", enacted on 9 March
1922. The full text of this statute is as
follows:
Be it enacted by the Senate and House of
Representatives of the Philippines in
Legislature assembled and by the
authority of the same:
SECTION 1. The Secretary of Agriculture
and Natural Resources (now Secretary
of the Environment and Natural
Resources) is hereby authorized to sell
or lease land of the private domain of
the Government of the Philippine

Islands, or any part thereof, to such

persons, corporations or associations as
are, under the provisions of Act
Numbered Twenty-eight hundred and
seventy-four, (now Commonwealth Act
No. 141, as amended) known as the
Public Land Act, entitled to apply for the
purchase or lease or agricultural public
land.
SECTION 2. The sale of the land
referred
to in
the
preceding
section shall, if such land is agricultural,
be made in the manner and subject to
the limitations prescribed in chapters
five and six, respectively, of said Public
Land Act, and if it be classified
differently, in conformity with the
provisions of chapter nine of said Act:
Provided, however, That the land
necessary for the public service shall be
exempt from the provisions of this Act.
SECTION 3. This Act shall take effect on
its approval.
Approved, March 9, 1922. (Emphasis
supplied)
Lest it be assumed that Act No. 3038
refers only to agricultural lands of the
private domain of the State, it must be
noted that Chapter 9 of the old Public
Land Act (Act No. 2874) is now Chapter
9 of the present Public Land Act
(Commonwealth Act No. 141, as
amended) and that both statutes refer
to: "any tract of land of the public
domain which being neither timber nor
mineral land, is intended to be used
forresidential
purposes or
for commercial
or
industrial
purposes other
than
agricultural"
(Emphasis supplied).itc-asl In other
words, the statute covers the sale or
lease or residential, commercial or
industrial land of the private domain of
the State.
Implementing regulations have been
issued for the carrying out of the
provisions of Act No. 3038. On 21

December 1954, the then Secretary of

Agriculture and Natural Resources
promulgated Lands
Administrative
Orders Nos. 7-6 and 7-7 which were
entitled, respectively: "Supplementary
Regulations Governing the Sale of
the Lands of the Private Domain of the
Republic of the Philippines"; and
"Supplementary Regulations Governing
the Lease of Lands of Private Domain of
the Republic of the Philippines" (text in
51 O.G. 28-29 [1955]).
It is perhaps well to add that Act No.
3038, although now sixty-eight (68)
years old, is still in effect and has not
been repealed. 1
Specific legislative authorization for
disposition of particular patrimonial
properties of the State is illustrated by
certain earlier statutes. The first of these
was Act No. 1120, enacted on 26 April
1904, which provided for the disposition
of the friar lands, purchased by the
Government from the Roman Catholic
Church, to bona fide settlers and
occupants thereof or to other persons.
In Jacinto v. Director of Lands(49 Phil.
853 [1926]), these friar lands were held
to be private and patrimonial properties
of the State. Act No. 2360, enacted on
-28 February 1914, authorized the sale of
the San Lazaro Estate located in the
City of Manila, which had also been
purchased by the Government from the
Roman Catholic Church. In January
1916, Act No. 2555 amended Act No.
2360 by including therein all lands and
buildings owned by the Hospital and the
Foundation of San Lazaro theretofor
leased by private persons, and which
were also acquired by the Philippine
Government.
After the enactment in 1922 of Act No.
3038, there appears, to my knowledge,
to be only one statute authorizing the
President to dispose of a specific piece of
property. This statute is Republic Act

No. 905, enacted on 20 June 1953,

which authorized the
President to sell an Identified parcel of
land of the private domain of the
National Government to the National
Press Club of the Philippines, and to
other recognized national associations of
professionals with academic standing,
for the nominal price of P1.00. It
appears relevant to note that Republic
Act No. 905 was not an outright
disposition in perpetuity of the property
involved- it provided for reversion of the
property to the National Government in
case the National Press Club stopped
using it for its headquarters. What
Republic Act No. 905 authorized was
really a donation, and not a sale.
The basic submission here made is that
Act No. 3038 provides standing
legislative authorization for disposition
of the Roppongi property which, in my
view, has been converted into
patrimonial property of the Republic. 2
To some, the submission that Act No.
3038 applies not only to lands of the
private domain of the State located in
the Philippines but also to patrimonial
property found outside the Philippines,
may appear strange or unusual. I
respectfully submit that such position is
not any more unusual or strange than
the assumption that Article 420 of the
Civil Code applies not only to property
of the Republic located within
Philippine territory but also to property
found outside the boundaries of the
Republic.
It remains to note that under the wellsettled doctrine that heads of Executive
Departments are alter egosof the
President (Villena v. Secretary of the
Interior, 67 Phil. 451 [1939]), and in
view of the constitutional power of
control exercised by the President over
department heads (Article VII, Section
17,1987 Constitution), the President

herself may carry out the function or

duty that is specifically lodged in the
Secretary of the Department of
Environment and Natural Resources
(Araneta v. Gatmaitan 101 Phil. 328
[1957]). At the very least, the President
retains the power to approve or
disapprove the exercise of that function
or duty when done by the Secretary of
Environment and Natural Resources.
It is hardly necessary to add that the
foregoing analyses and submissions
relate only to the austere question of
existence of legal power or authority.
They have nothing to do with much
debated questions of wisdom or
propriety or relative desirability either of
the proposed disposition itself or of the
proposed utilization of the anticipated
proceeds of the property involved. These
latter types of considerations He within
the sphere of responsibility of the
political departments of government the
Executive
and
the
Legislative
authorities.
For all the foregoing, I vote to dismiss
the Petitions for Prohibition in both G.R.
Nos. 92013 and 92047.
Fernan, C.J., Narvasa, Gancayco,
Cortes and Medialdea, JJ., concurring.
G.R. No. L40474 August 29, 1975
CEBU OXYGEN & ACETYLENE
CO.,
INC., petitioner,
vs.
HON. PASCUAL A. BERCILLES
Presiding Judge, Branch XV, 14th
Judicial District, and JOSE L.
ESPELETA, Assistant Provincial
Fiscal,
Province
of
Cebu,
representing
the
Solicitor
General's Office and the Bureau of
Lands, respondents.
Jose Antonio R Conde for petitioner.
Office of the Acting Solicitor General
Hugo E. Gutierrez, Jr., Assistant
Solicitor General Octavio R. Ramirez

and Trial Attorney David R. Hilario for

respondents. .
CONCEPCION, Jr., J.:
This is a petition for the review of the
order of the Court of First Instance of
Cebu dismissing petitioner's application
for registration of title over a parcel of
land situated in the City of Cebu.
The parcel of land sought to be
registered was only a portion of M.
Borces Street, Mabolo, Cebu City. On
September 23, 1968, the City Council of
Cebu, through Resolution No. 2193,
approved on October 3, 1968, declared
the terminal portion of M. Borces Street,
Mabolo, Cebu City, as an abandoned
road, the same not being included in the
City Development Plan. 1 Subsequently,
on December 19, 1968, the City Council
of Cebu passed Resolution No. 2755,
authorizing the Acting City Mayor to sell
the
land
through
a
public
bidding. 2 Pursuant thereto, the lot was
awarded to the herein petitioner being
the highest bidder and on March 3,
1969, the City of Cebu, through the
Acting City Mayor, executed a deed of
absolute sale to the herein petitioner for
a total consideration of P10,800.00. 3 By
virtue of the aforesaid deed of absolute
sale, the petitioner filed an application
with the Court of First instance of Cebu
to have its title to the land registered. 4
On June 26, 1974, the Assistant
Provincial Fiscal of Cebu filed a motion
to dismiss the application on the ground
that the property sought to be registered
being a public road intended for public
use is considered part of the public
domain and therefore outside the
commerce of man. Consequently, it
cannot be subject to registration by any
private individual. 5
After hearing the parties, on October 11,
1974 the trial court issued an order
dismissing the petitioner's application

for registration of title. 6 Hence, the

instant petition for review.
For the resolution of this case, the
petitioner poses the following questions:
(1) Does the City Charter of Cebu City
(Republic Act No. 3857) under Section
31, paragraph 34, give the City of Cebu
the valid right to declare a road as
abandoned? and
(2) Does the declaration of the road, as
abandoned, make it the patrimonial
property of the City of Cebu which may
be the object of a common contract?
(1) The pertinent portions of the Revised
Charter of Cebu City provides:
Section 31. Legislative Powers. Any
provision of law and executive order to
the contrary notwithstanding, the City
Council shall have the following
legislative powers:
xxx xxx xxx
(34) ...; to close any city road, street or
alley, boulevard, avenue, park or square.
Property thus withdrawn from public
servitude may be used or conveyed for
any purpose for which other real
property belonging to the City may be
lawfully used or conveyed.
From the foregoing, it is undoubtedly
clear that the City of Cebu is empowered
to close a city road or street. In the case
of Favis vs. City of Baguio, 7 where the
power of the city Council of Baguio City
to close city streets and to vacate or
withdraw the same from public use was
similarly assailed, this court said:
5. So it is, that appellant may not
challenge the city council's act of
withdrawing a strip of Lapu-Lapu Street
at its dead end from public use and
converting the remainder thereof into an
alley. These are acts well within the
ambit of the power to close a city street.
The city council, it would seem to us, is
the authority competent to determine
whether or not a certain property is still
necessary for public use.

Such power to vacate a street or alley is

discretionary. And the discretion will
not ordinarily be controlled or interfered
with by the courts, absent a plain case of
abuse or fraud or collusion. Faithfulness
to the public trust will be presumed. So
the fact that some private interests may
be served incidentally will not invalidate
the vacation ordinance.
(2) Since that portion of the city street
subject of petitioner's application for
registration of title was withdrawn from
public use, it follows that such
withdrawn portion becomes patrimonial
property which can be the object of an
ordinary contract.
Article 422 of the Civil Code expressly
provides that "Property of public
dominion, when no longer intended for
public use or for public service, shall
form part of the patrimonial property of
the State."
Besides, the Revised Charter of the City
of Cebu heretofore quoted, in very clear
and unequivocal terms, states that:
"Property thus withdrawn from public
servitude may be used or conveyed for
any purpose for which other real
property belonging to the City may be
lawfully used or conveyed."
Accordingly, the withdrawal of the
property in question from public use
and its subsequent sale to the petitioner
is valid. Hence, the petitioner has a
registerable title over the lot in question.
WHEREFORE, the order dated October
11, 1974, rendered by the respondent
court in Land Reg. Case No. N-948, LRC
Rec. No. N-44531 is hereby set aside,
and the respondent court is hereby
ordered to proceed with the hearing of
the
petitioner's
application
for
registration of title.
SO ORDERED.
Makalintal, C.J, Fernando, Barredo
and Aquino, JJ., concur.
G.R. No. L-68117 October 17, 1988

HEIRS OF FELINO T. SANTIAGO,

represented
by
LADISLA
SANTIAGO, petitioners,
vs.
HONORABLE
MANUEL
M.
LAZARO, Presidential Assistant
for Legal Affairs and DELIA O.
PAYOT,respondents.
FERNAN, C.J.:
We annul and set aside the decision
dated April 6, 1984 of the Office of the
President through then Presidential
Assistant for Legal Affairs Manuel M.
Lazaro in O.P. Case No. 2442 entitled
"Delia O. Payot, Appellant, versus Heir
of Felino T. Santiago, represented by
Ladisla Santiago, Appellees."
The antecedents are as follows:
On February 28,1976, the late Felino T.
Santiago, a member of the Malacaang
Homeowners Association, Inc. (MHAI)
filed an application with the Bureau of
Lands for the purchase of a parcel of
friar land with an area of 255 square
meters particularly described as Lot No.
7, Block 70, Psd-04-000011 of the Tala
Friar Lands Estate in Makatipo,
Caloocan City. In the Information Sheet
he submitted, applicant Santiago stated
that he had actually been occupying the
land being applied for since February of
1973 and that he had introduced
improvements thereon consisting of a
small hut, fence, clearings and seasonal
crops.
An investigation was conducted by
Lands Investigator Buensuceso I. Guido,
who, finding the allegations contained in
the Information Sheet to be true,
recommended that the aforesaid lot be
sold at private sale in favor of Felino T.
Santiago. Endorsed by the Assistant
Director of Lands, said recommendation
was approved by the Minister of Natural
Resources. Whereupon, Sales Contract
No. 77-760 dated March 17, 1977 was

entered into by the Director of Lands

and Felino Santiago, 1 who paid the
purchase price in full on the same date
as evidenced by O.R. No. 5777291.
However, barely a year from the
execution of the Sales Contract, MHAI
cancelled Santiago's application over the
land in question and allocated the same
to private respondent Delia O. Payot The
latter's parents then took possession of
the land and built a small house thereon
without the knowledge and consent of
Santiago or any member of his family.
Feeling aggrieved, Santiago inquired
from the Office of the Minister of
Natural Resources whether his Sales
Contract or his application covering the
land in dispute had been cancelled. The
representative of the Ministry replied in
the negative, with the additional
explanation that only the Director of
Lands has the power to cancel the
award.
On April 13, 1981, Deed No. V-15278 was
issued by the Director of Lands in favor
of Felino T. Santiago 2 and on April 22,
1981, the Register of Deeds of Caloocan
City prepared Transfer Certificate of
Title No. C-43080 covering the disputed
land in the name of Felino T. Santiago. 3
As a result of such issuance, private
respondent Delia O. Payot filed a protest
with the Bureau of Lands seeking the
recall of the award to Santiago, whose
application and allocation had allegedly
been cancelled by the MHAI and
transferred to her, thereby entitling her
to the award of the disputed lot.
On January 13, 1983, the Director of
Lands rendered a decision finding the
protest of private respondent to be
without merit. Said protest was
"disregarded and dismissed, and
...dropped from the records." Sales
Contract No. 77-760 4 issued to Felino T.
Santiago was declared valid and in full
force and effect. 5

The appeal interposed by private

respondent to the Minister of Natural
Resources proved unavailing 6 but on
further appeal to the Office of the
President, private respondent was
granted the relief sought, thus:
PREMISES
CONSIDERED,
Sales
Contract No. 77-760 and Deed No. V-1
5278, both executed in favor of the late
Felino T. Santiago, are hereby cancelled
for being void. Lot No. 7, Block 70 of the
Pangarap Village shall be sold without
auction to Delia 0. Payot, the actual
occupant thereof, in accordance. with
the pertinent laws and regulations
governing the disposition of said lot. The
decisions of the Ministry of Natural
Resources and the Director of Lands,
dated June 18, 1983, and January 13,
1983, respectively, are accordingly SET
ASIDE. 7
This unexpected turn of events left the
heirs of Felino T. Santiago who died
during the proceedings below, in a
quandary. Ladisla Santiago, his widow,
filed thru counsel a motion for
reconsideration which was subsequently
denied by the Office of the President.
Hence, the instant petition, petitioners
Heirs of Felino T. Santiago, represented
by Ladisla Santiago, attributing to public
respondent Presidential Assistant for
Legal Affairs grave abuse of discretion
amounting to lack of jurisdiction in
reversing the decisions of the Director of
Lands and Minister of Natural
Resources, respectively.
Basis of public respondent's reversal of
the respective decisions of the Director
of Lands and Minister of Natural
Resources is his conclusion that private
respondent
was
the
actual bona
fide occupant of the lot in dispute and
therefore the applicant entitled thereto.
Considering the evidence extant on the
records, we find this conclusion so
constrained and contrived as to render

public respondent's exercise of his

judgment capricious, whimsical and
arbitrary, amounting to grave abuse of
discretion. His action calls for the
corrective writ of certiorari.
Felino
Santiago's
application
to
purchase the lot in question was
approved after verification thru an
ocular inspection by Lands Investigator
Buensuceso I. Guido, of the veracity of
Santiago's allegations that he had been
occupying said lot since 1973 and had
introduced
certain
improvements
thereon. The Sales Contract was
accordingly executed and the purchase
price forthwith paid in full.
For alleged failure of Santiago to occupy
the lot in question and to introduce
improvements thereon within sixty (60)
days from the date of the award, the
MHAI
unilaterally
cancelled
his
application and instead allocated the
controverted lot to private respondent.
But as admitted by public respondent
himself,
... the administration and disposition of
friar land estates are lodged with the
Director of Lands, subject to the
supervision and control of the Minister
of Natural Resources [Act No. 1120, as
amended; Sections 79(c) and 84,
Revised Administrative Code], and,
therefore, it was not within the
competence of the MHAI to cancel the
application over the disputed lot filed by
Felino Santiago. 8(emphasis supplied)
Furthermore, it was found by the
Director of Lands that the cancellation
by MHAI of the award in Santiago's
favor was made without earnest efforts
to ascertain why the allocated failed to
satisfy the requirements laid down by
the Association, despite the proviso
voiced out by a Mr. Agbulos an
association officer, during the meeting
on April 27, 1975 that "the allocated
must first be contacted to find (out) the

reason why he has abandoned the lot

allocated to him." 9
From these established facts, there can
be no doubt that the cancellation of the
award in Santiago's favor is null and
void, not only for lack of competence
and authority on the part of the MHAI,
but particularly for being violative of the
applicant's constitutional right to due
process.
It was at this stage that private
respondent entered into the picture. But
while herself the allocated the actual
occupants of the lot were her parents,
who in a record two weeks' time were
able
to
construct
a
house
thereon. 10Private respondent, it was
admitted, was a resident of 107 Mother
Ignacia, St., Diliman, Quezon City 11 and
went to the lot in question only for
visits. 12 In fact, during the proceedings
below, it was private respondent's father
who appeared with counsel, not private
respondent. 13
In the light of these admitted facts and
despite his own assertion that
"appellant's (private respondent's) entry
into the lot was without authority or
permit from the Director of Lands
" 14 we
cannot
see
how
public
respondent could logically arrive at the
conclusion that private respondent was
the actual bona fide occupant of the lot
in dispute.
Upon the other hand, despite failure of
Felino T. Santiago to have continuous
physical possession of the lot, the
conclusion that he was in legal
contemplation, the actual bona fide
occupant of the same, without any
intention of abandoning it, is easily
reached. It was disclosed that the failure
of Felino Santiago to continue his
possession over the lot in question was
with
good
justification,
"mainly
attributable to his poverty, aggravated
by his recurring illness which later

resulted
to
(sic)
his
death." 15 Furthermore, emphasis should
be laid on the fact that despite his
recurring illness, Santiago took the
necessary steps to protect his interest
over the lot in controversy: he lost no
time in verifying the validity of the
cancellation of the award by the
MHAI 16 and filed charges in court
against Felicisimo Dayot, father of the
private respondent and actual occupant
of the lot. 17
Thus, the Minister of Natural Resources
correctly ruled that:
... There was no abandonment on the
part of the appellee (Santiago), for
abandonment is not considered as such
even if possession is intermittent and
not continuous, if such is due to
circumstances not imputable to the
possessor. Mere non-use does not
necessarily constitute abandonment. It
cannot be inferred from non-use alone.
The temporary absence of the appellee
from the lot should not be taken against
the tenability of his claim because such
is mainly attributable to his poverty,
aggravated by his recurring illness which
later resulted to his death ... . 18
Even assuming arguendo that private
respondent was not aware of the flaws in
her title, her possession of the lot, and
by proxy, at that, could not rise above
the prior possession of Felino T.
Santiago, who, during such possession
was able to comply with the
requirements set by law for the purchase
of the lot. Thus, at the time of entry of
private respondent into said lot, the sale
in favor of Felino T. Santiago had
already been consummated thru the
execution of the Sales Contract. Only the
issuance of the Deed of Conveyance and
the Transfer Certificate of Title which
had then become ministerial on the part
of the Director of Lands, remained to
perfect his title thereto.

Indeed, Felino Santiago's entitlement to

the controverted lot is made indubitable
by the fact that the cancellation of the
award in his favor by the MHAI,
notwithstanding, the Director of Lands
issued a Deed of Conveyance to him.
This proves that the Director of Lands
was convinced that Santiago had
complied with the requirements for the
sale of the land; and rightly so, for the
determination of whether improvements
were made by Felino Santiago is to be
made by the Director of Lands, and not
by the MHAI. To allow the latter to do so
would result in an abdication of one of
the functions of the Bureau of Lands.
And this we cannot allow. POTESTAS
DELEGATA NON DELEGARE POTEST.
A power once delegated cannot be
redelegated.
WHEREFORE, the assailed decision of
public respondent dated April 6, 1984 is
hereby ANNULLED and SET ASIDE.
The decision of the Minister of Natural
Resources dated June 28, 1983 is
REINSTATED. Costs against private
respondent.
SO ORDERED.
Gutierrez, Jr., Feliciano, Bidin and
Cortes, JJ., concur.
G.R. No. 179987
September
3, 2013
HEIRS OF MARIO MALABANAN,
(Represented
by
Sally
A.
Malabanan), Petitioners,
vs.
REPUBLIC
OF
THE
PHILIPPINES, Respondent.
RESOLUTION
BERSAMIN, J.:
For our consideration and resolution are
the motions for reconsideration of the
parties who both assail the decision
promulgated on April 29, 2009,
whereby we upheld the ruling of the
Court of Appeals (CA) denying the
application of the petitioners for the

registration of a parcel of land situated

in Barangay Tibig, Silang, Cavite on the
ground that they had not established by
sufficient evidence their right to the
registration in accordance with either
Section 14(1) or Section 14(2) of
Presidential Decree No. 1529 (Property
Registration Decree).
Antecedents
The property subject of the application
for registration is a parcel of land
situated in Barangay Tibig, Silang
Cavite, more particularly identified as
Lot 9864-A, Cad-452-D, with an area of
71,324-square meters. On February 20,
1998, applicant Mario Malabanan, who
had purchased the property from
Eduardo Velazco, filed an application for
land registration covering the property
in the Regional Trial Court (RTC) in
Tagaytay City, Cavite, claiming that the
property formed part of the alienable
and disposable land of the public
domain, and that he and his
predecessors-in-interest had been in
open, continuous, uninterrupted, public
and adverse possession and occupation
of the land for more than 30 years,
thereby entitling him to the judicial
confirmation of his title.1
To prove that the property was an
alienable and disposable land of the
public domain, Malabanan presented
during trial a certification dated June 11,
2001 issued by the Community
Environment and Natural Resources
Office (CENRO) of the Department of
Environment and Natural Resources
(DENR), which reads:
This is to certify that the parcel of land
designated as Lot No. 9864 Cad 452-D,
Silang Cadastre as surveyed for Mr.
Virgilio Velasco located at Barangay
Tibig, Silang, Cavite containing an area
of 249,734 sq. meters as shown and
described on the Plan Ap-04-00952 is
verified to be within the Alienable or

Disposable land per Land Classification

Map No. 3013 established under Project
No. 20-A and approved as such under
FAO 4-1656 on March 15, 1982.2
After trial, on December 3, 2002, the
RTC rendered judgment granting
Malabanans application for land
registration, disposing thusly:
WHEREFORE, this Court hereby
approves
this
application
for
registration and thus places under the
operation of Act 141, Act 496 and/or
P.D. 1529, otherwise known as Property
Registration Law, the lands described in
Plan Csd-04-0173123-D, Lot 9864-A
and containing an area of Seventy One
Thousand Three Hundred Twenty Four
(71,324) Square Meters, as supported by
its technical description now forming
part of the record of this case, in
addition to other proofs adduced in the
name of MARIO MALABANAN, who is
of legal age, Filipino, widower, and with
residence at Munting Ilog, Silang,
Cavite.
Once this Decision becomes final and
executory, the corresponding decree of
registration shall forthwith issue.
SO ORDERED.3
The Office of the Solicitor General
(OSG) appealed the judgment to the CA,
arguing that Malabanan had failed to
prove that the property belonged to the
alienable and disposable land of the
public domain, and that the RTC erred
in finding that he had been in possession
of the property in the manner and for
the length of time required by law for
confirmation of imperfect title.
On February 23, 2007, the CA
promulgated its decision reversing the
RTC and dismissing the application for
registration of Malabanan. Citing the
ruling in Republic v. Herbieto
(Herbieto),4 the CA declared that under
Section
14(1)
of
the
Property
Registration Decree, any period of

possession prior to the classification of

the land as alienable and disposable was
inconsequential and should be excluded
from the computation of the period of
possession. Noting that the CENRODENR certification stated that the
property had been declared alienable
and disposable only on March 15, 1982,
Velazcos possession prior to March 15,
1982 could not be tacked for purposes of
computing Malabanans period of
possession.
Due to Malabanans intervening demise
during the appeal in the CA, his heirs
elevated the CAs decision of February
23, 2007 to this Court through a petition
for review on certiorari.
The petitioners assert that the ruling in
Republic v. Court of Appeals and
Corazon Naguit5 (Naguit) remains the
controlling doctrine especially if the
property involved is agricultural land. In
this regard, Naguit ruled that any
possession of agricultural land prior to
its declaration as alienable and
disposable could be counted in the
reckoning of the period of possession to
perfect title under the Public Land Act
(Commonwealth Act No. 141) and the
Property Registration Decree. They
point out that the ruling in Herbieto, to
the effect that the declaration of the land
subject
of
the
application
for
registration as alienable and disposable
should also date back to June 12, 1945 or
earlier, was a mere obiter dictum
considering that the land registration
proceedings therein were in fact found
and declared void ab initio for lack of
publication of the notice of initial
hearing.
The petitioners also rely on the ruling in
Republic v. T.A.N. Properties, Inc.6 to
support their argument that the
property had been ipso jure converted
into private property by reason of the
open,
continuous,
exclusive
and

notorious
possession
by
their
predecessors-in-interest of an alienable
land of the public domain for more than
30 years. According to them, what was
essential was that the property had been
"converted" into private property
through prescription at the time of the
application without regard to whether
the property sought to be registered was
previously classified as agricultural land
of the public domain.
As earlier stated, we denied the petition
for review on certiorari because
Malabanan failed to establish by
sufficient evidence possession and
occupation of the property on his part
and on the part of his predecessors-in
interest since June 12, 1945, or earlier.
Petitioners Motion for Reconsideration
In their motion for reconsideration, the
petitioners submit that the mere
classification of the land as alienable or
disposable should be deemed sufficient
to convert it into patrimonial property of
the State. Relying on the rulings in
Spouses De Ocampo v. Arlos,7 Menguito
v. Republic8 and Republic v. T.A.N.
Properties, Inc.,9 they argue that the
reclassification of the land as alienable
or disposable opened it to acquisitive
prescription under the Civil Code; that
Malabanan had purchased the property
from Eduardo Velazco believing in good
faith that Velazco and his predecessorsin-interest had been the real owners of
the land with the right to validly
transmit title and ownership thereof;
that consequently, the ten-year period
prescribed by Article 1134 of the Civil
Code, in relation to Section 14(2) of the
Property Registration Decree, applied in
their favor; and that when Malabanan
filed the application for registration on
February 20, 1998, he had already been
in possession of the land for almost 16
years reckoned from 1982, the time

when the land was declared alienable

and disposable by the State.
The Republics Motion for Partial
Reconsideration
The Republic seeks the partial
reconsideration in order to obtain a
clarification with reference to the
application of the rulings in Naguit and
Herbieto.
Chiefly citing the dissents, the Republic
contends that the decision has enlarged,
by implication, the interpretation of
Section
14(1)
of
the
Property
Registration Decree through judicial
legislation. It reiterates its view that an
applicant is entitled to registration only
when the land subject of the application
had been declared alienable and
disposable since June 12, 1945 or earlier.
Ruling
We
deny
the
motions
for
reconsideration.
In reviewing the assailed decision, we
consider to be imperative to discuss the
different classifications of land in
relation to the existing applicable land
registration laws of the Philippines.
Classifications of land according to
ownership
Land,
which
is
an
immovable
property,10 may be classified as either of
public
dominion
or
of
private
ownership.11Land is considered of public
dominion if it either: (a) is intended for
public use; or (b) belongs to the State,
without being for public use, and is
intended for some public service or for
the development of the national
wealth.12 Land belonging to the State
that is not of such character, or although
of such character but no longer intended
for public use or for public service forms
part of the patrimonial property of the
State.13 Land that is other than part of
the patrimonial property of the State,
provinces, cities and municipalities is of

private ownership if it belongs to a

private individual.
Pursuant to the Regalian Doctrine (Jura
Regalia), a legal concept first introduced
into the country from the West by Spain
through the Laws of the Indies and the
Royal Cedulas,14 all lands of the public
domain belong to the State.15 This means
that the State is the source of any
asserted right to ownership of land, and
is charged with the conservation of such
patrimony.16
All lands not appearing to be clearly
under private ownership are presumed
to belong to the State. Also, public lands
remain part of the inalienable land of
the public domain unless the State is
shown to have reclassified or alienated
them to private persons.17
Classifications
of
public
lands
according to alienability
Whether or not land of the public
domain is alienable and disposable
primarily rests on the classification of
public
lands
made
under
the
Constitution.
Under
the
1935
Constitution,18 lands of the public
domain were classified into three,
namely, agricultural, timber and
mineral.19 Section 10, Article XIV of the
1973 Constitution classified lands of the
public domain into seven, specifically,
agricultural, industrial or commercial,
residential,
resettlement,
mineral,
timber or forest, and grazing land, with
the reservation that the law might
provide other classifications. The 1987
Constitution adopted the classification
under the 1935 Constitution into
agricultural, forest or timber, and
mineral,
but
added
national
parks.20 Agricultural lands may be
further classified by law according to the
uses to which they may be devoted. 21 The
identification of lands according to their
legal classification is done exclusively by

and through a positive act of the

Executive Department.22
Based on the foregoing, the Constitution
places a limit on the type of public land
that may be alienated. Under Section 2,
Article XII of the 1987 Constitution, only
agricultural lands of the public domain
may be alienated; all other natural
resources may not be.
Alienable and disposable lands of the
State fall into two categories, to wit: (a)
patrimonial lands of the State, or those
classified as lands of private ownership
under Article 425 of the Civil
Code,23 without limitation; and (b) lands
of the public domain, or the public lands
as provided by the Constitution, but
with the limitation that the lands must
only be agricultural. Consequently,
lands classified as forest or timber,
mineral, or national parks are not
susceptible of alienation or disposition
unless they are reclassified as
agricultural.24 A positive act of the
Government is necessary to enable such
reclassification,25 and
the
exclusive
prerogative to classify public lands
under existing laws is vested in the
Executive Department, not in the
courts.26 If, however, public land will be
classified as neither agricultural, forest
or timber, mineral or national park, or
when public land is no longer intended
for public service or for the development
of the national wealth, thereby
effectively removing the land from the
ambit of public dominion, a declaration
of such conversion must be made in the
form of a law duly enacted by Congress
or by a Presidential proclamation in
cases where the President is duly
authorized by law to that effect. 27 Thus,
until
the
Executive
Department
exercises its prerogative to classify or
reclassify lands, or until Congress or the
President declares that the State no
longer intends the land to be used for

public service or for the development of

national wealth, the Regalian Doctrine is
applicable.
Disposition of alienable public lands
Section 11 of the Public Land Act (CA
No. 141) provides the manner by which
alienable and disposable lands of the
public domain, i.e., agricultural lands,
can be disposed of, to wit:
Section 11. Public lands suitable for
agricultural purposes can be disposed of
only as follows, and not otherwise:
(1) For homestead settlement;
(2) By sale;
(3) By lease; and
(4) By confirmation of imperfect or
incomplete titles;
(a) By judicial legalization; or
(b) By administrative legalization (free
patent).
The core of the controversy herein lies in
the proper interpretation of Section
11(4), in relation to Section 48(b) of the
Public Land Act, which expressly
requires possession by a Filipino citizen
of the land since June 12, 1945, or
earlier, viz:
Section 48. The following-described
citizens of the Philippines, occupying
lands of the public domain or claiming
to own any such lands or an interest
therein, but whose titles have not been
perfected or completed, may apply to
the Court of First Instance of the
province where the land is located for
confirmation of their claims and the
issuance of a certificate of title
thereafter, under the Land Registration
Act, to wit:
xxxx
(b) 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 acquisition of ownership, since June

12, 1945, or earlier, immediately

preceding the filing of the applications
for confirmation of title, except when
prevented by war or force majeure.
These shall be conclusively presumed to
have performed all the conditions
essential to a Government grant and
shall be entitled to a certificate of title
under the provisions of this chapter.
(Bold emphasis supplied)
Note that Section 48(b) of the Public
Land Act used the words "lands of the
public domain" or "alienable and
disposable lands of the public domain"
to clearly signify that lands otherwise
classified, i.e., mineral, forest or timber,
or national parks, and lands of
patrimonial or private ownership, are
outside the coverage of the Public Land
Act. What the law does not include, it
excludes. The use of the descriptive
phrase "alienable and disposable"
further limits the coverage of Section
48(b) to only the agricultural lands of
the public domain as set forth in Article
XII, Section 2 of the 1987 Constitution.
Bearing in mind such limitations under
the Public Land Act, the applicant must
satisfy the following requirements in
order for his application to come under
Section
14(1)
of
the
Property
Registration Decree,28 to wit:
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; and

5. The property subject of the

application must be an agricultural land
of the public domain.
Taking into consideration that the
Executive Department is vested with the
authority to classify lands of the public
domain, Section 48(b) of the Public
Land Act, in relation to Section 14(1) of
the Property Registration Decree,
presupposes that the land subject of the
application for registration must have
been already classified as agricultural
land of the public domain in order for
the provision to apply. Thus, absent
proof that the land is already classified
as agricultural land of the public
domain, the Regalian Doctrine applies,
and overcomes the presumption that the
land is alienable and disposable as laid
down in Section 48(b) of the Public
Land Act. However, emphasis is placed
on
the
requirement
that
the
classification required by Section 48(b)
of the Public Land Act is classification or
reclassification of a public land as
agricultural.
The
dissent
stresses
that
the
classification or reclassification of the
land as alienable and disposable
agricultural land should likewise have
been made on June 12, 1945 or earlier,
because any possession of the land prior
to such classification or reclassification
produced no legal effects. It observes
that the fixed date of June 12, 1945
could not be minimized or glossed over
by mere judicial interpretation or by
judicial social policy concerns, and
insisted that the full legislative intent be
respected.
We find, however, that the choice of
June 12, 1945 as the reckoning point of
the requisite possession and occupation
was the sole prerogative of Congress, the
determination of which should best be
left to the wisdom of the lawmakers.
Except that said date qualified the

period of possession and occupation, no

other legislative intent appears to be
associated with the fixing of the date of
June 12, 1945. Accordingly, the Court
should interpret only the plain and
literal meaning of the law as written by
the legislators.
Moreover, an examination of Section
48(b) of the Public Land Act indicates
that
Congress
prescribed
no
requirement that the land subject of the
registration should have been classified
as agricultural since June 12, 1945, or
earlier. As such, the applicants
imperfect or incomplete title is derived
only from possession and occupation
since June 12, 1945, or earlier. This
means that the character of the property
subject of the application as alienable
and disposable agricultural land of the
public domain determines its eligibility
for land registration, not the ownership
or title over it.
Alienable public land held by a
possessor, either personally or through
his predecessors-in-interest, openly,
continuously and exclusively during the
prescribed statutory period is converted
to private property by the mere lapse or
completion of the period.29 In fact, by
virtue of this doctrine, corporations may
now acquire lands of the public domain
for as long as the lands were already
converted to private ownership, by
operation of law, as a result of satisfying
the requisite period of possession
prescribed by the Public Land Act. 30 It is
for this reason that the property subject
of the application of Malabanan need
not be classified as alienable and
disposable agricultural land of the
public domain for the entire duration of
the requisite period of possession.
To be clear, then, the requirement that
the land should have been classified as
alienable and disposable agricultural
land at the time of the application for

registration is necessary only to dispute

the presumption that the land is
inalienable.
The declaration that land is alienable
and disposable also serves to determine
the point at which prescription may run
against the State. The imperfect or
incomplete title being confirmed under
Section 48(b) of the Public Land Act is
title that is acquired by reason of the
applicants possession and occupation of
the alienable and disposable agricultural
land of the public domain. Where all the
necessary requirements for a grant by
the Government are complied with
through
actual
physical,
open,
continuous, exclusive and public
possession of an alienable and
disposable land of the public domain,
the possessor is deemed to have
acquired by operation of law not only a
right to a grant, but a grant by the
Government, because it is not necessary
that a certificate of title be issued in
order that such a grant be sanctioned by
the courts.31
If one follows the dissent, the clear
objective of the Public Land Act to
adjudicate
and
quiet
titles
to
unregistered lands in favor of qualified
Filipino citizens by reason of their
occupation and cultivation thereof for
the number of years prescribed by
law32 will be defeated. Indeed, we should
always bear in mind that such objective
still prevails, as a fairly recent legislative
development bears out, when Congress
enacted legislation (Republic Act No.
10023)33 in order to liberalize stringent
requirements and procedures in the
adjudication of alienable public land to
qualified
applicants,
particularly
residential lands, subject to area
limitations.34
On the other hand, if a public land is
classified as no longer intended for
public use or for the development of

national wealth by declaration of

Congress or the President, thereby
converting such land into patrimonial or
private land of the State, the applicable
provision concerning disposition and
registration is no longer Section 48(b) of
the Public Land Act but the Civil Code,
in conjunction with Section 14(2) of the
Property Registration Decree.35 As such,
prescription can now run against the
State.
To sum up, we now observe the
following rules relative to the disposition
of public land or lands of the public
domain, namely:
(1) As a general rule and pursuant to the
Regalian Doctrine, all lands of the public
domain belong to the State and are
inalienable. Lands that are not clearly
under private ownership are also
presumed to belong to the State and,
therefore, may not be alienated or
disposed;
(2) The following are excepted from the
general rule, to wit:
(a) Agricultural lands of the public
domain are rendered alienable and
disposable through any of the exclusive
modes enumerated under Section 11 of
the Public Land Act. If the mode is
judicial confirmation of imperfect title
under Section 48(b) of the Public Land
Act, the agricultural land subject of the
application needs only to be classified as
alienable and disposable as of the time
of the application, provided the
applicants possession and occupation of
the land dated back to June 12, 1945, or
earlier.
Thereby,
a
conclusive
presumption that the applicant has
performed all the conditions essential to
a government grant arises,36 and the
applicant becomes the owner of the land
by virtue of an imperfect or incomplete
title. By legal fiction, the land has
already ceased to be part of the public

domain and has become private

property.37
(b) Lands of the public domain
subsequently classified or declared as no
longer intended for public use or for the
development of national wealth are
removed from the sphere of public
dominion and are considered converted
into patrimonial lands or lands of
private ownership that may be alienated
or disposed through any of the modes of
acquiring ownership under the Civil
Code. If the mode of acquisition is
prescription, whether ordinary or
extraordinary, proof that the land has
been already converted to private
ownership prior to the requisite
acquisitive prescriptive period is a
condition sine qua non in observance of
the law (Article 1113, Civil Code) that
property of the State not patrimonial in
character shall not be the object of
prescription.
To reiterate, then, the petitioners failed
to present sufficient evidence to
establish
that
they
and
their
predecessors-in-interest had been in
possession of the land since June 12,
1945. Without satisfying the requisite
character and period of possession possession and occupation that is open,
continuous, exclusive, and notorious
since June 12, 1945, or earlier - the land
cannot be considered ipso jure
converted to private property even upon
the subsequent declaration of it as
alienable and disposable. Prescription
never began to run against the State,
such that the land has remained
ineligible for registration under Section
14(1) of the Property Registration
Decree. Likewise, the land continues to
be ineligible for land registration under
Section
14(2)
of
the
Property
Registration Decree unless Congress
enacts a law or the President issues a
proclamation declaring the land as no

longer intended for public service or for

the development of the national
wealth.1wphi1
WHEREFORE, the Court DENIES the
petitioners' Motion for Reconsideration
and the respondent's Partial Motion for
Reconsideration for their lack of merit.
SO ORDERED.
SECRETARY OF DENR vs. MAYOR
JOSE YAP et. Al.
DECISION

REYES, R.T., J.:

AT stake in these consolidated cases is

the right of the present occupants
of Boracay Island to secure titles over
their occupied lands.
There
are
two
consolidated
petitions. The first is G.R. No. 167707, a
petition for review on certiorari of the
Decision[1] of the Court of Appeals (CA)
affirming that[2] of the Regional Trial
Court (RTC) in Kalibo, Aklan, which
granted the petition for declaratory
relief filed by respondents-claimants
Mayor Jose Yap, et al. and ordered the
survey
of
Boracay
for
titling
purposes. The second is G.R. No.
173775, a petition for prohibition,
mandamus,
and
nullification
of
Proclamation No. 1064[3] issued by
President Gloria Macapagal-Arroyo
classifying Boracay into reserved forest
and agricultural land.
The Antecedents
G.R. No. 167707
Boracay Island in
the Municipality of Malay, Aklan, with
its powdery white sand beaches and
warm crystalline waters, is reputedly a
premier
Philippine
tourist

destination. The island is also home to

12,003 inhabitants[4] who live in the
bone-shaped islands three barangays.[5]
On April 14, 1976, the Department of
Environment
and
Natural
Resources (DENR)
approved the National
Reservation Survey of Boracay
Island,[6] which identified several lots as
being occupied or claimed by named
persons.[7]
On November 10, 1978, then President
Ferdinand Marcos issued Proclamation
No. 1801[8] declaring Boracay Island,
among other islands, caves and
peninsulas in the Philippines, as tourist
zones and marine reserves under
the administration of the Philippine
Tourism Authority (PTA). President
Marcos later approved the issuance
of PTA Circular
382[9] dated September 3, 1982, to
implement Proclamation No. 1801.
Claiming that Proclamation No. 1801
and PTA Circular No 3-82 precluded
them from filing an application for
judicial confirmation of imperfect title
or survey of land for titling purposes,
respondents
claimants Mayor Jose S. Yap,
Jr., Libertad
Talapian,
Mila
Y.
Sumndad, and Aniceto Yap filed a
petition for declaratory relief with
the RTC in Kalibo, Aklan.
In their petition, respondents-claimants
alleged that Proclamation No. 1801
and PTA Circular No. 3-82 raised doubts
on their right to secure titles over their
occupied lands. They declared that they
themselves,
or
through
their
predecessors-in-interest, had been in
open, continuous, exclusive, and
notorious possession and occupation in
Boracay since June 12, 1945, or earlier
since time immemorial. They declared

their lands for tax purposes and paid

realty taxes on them.[10]
Respondents-claimants posited that
Proclamation No. 1801 and its
implementing Circular did not place
Boracay beyond the commerce of
man. Since the Islandwas classified as a
tourist zone, it was susceptible of private
ownership. Under Section 48(b) of
Commonwealth Act (CA) No. 141,
otherwise known as the Public Land Act,
they had the right to have the lots
registered in their names through
judicial confirmation of imperfect titles.

twenty (20) meters and were planted

more or less fifty (50) years ago; and (4)
respondents-claimants declared the land
they were occupying for tax purposes.[12]

The Republic, through the Office of the

Solicitor General (OSG), opposed the
petition
for
declaratory
relief. The OSG countered
that Boracay Island was
anunclassified land of the public
domain. It formed part of the mass of
lands classified as public forest, which
was not available for disposition
pursuant to Section 3(a) of Presidential
Decree (PD) No. 705 or the Revised
Forestry Code,[11] as amended.

The RTC took judicial notice[14] that

certain parcels of land in Boracay Island,
more particularly Lots 1 and 30,
Plan PSU-5344, were covered by
Original Certificate of Title No. 19502
(RO 2222) in the name of the Heirs of
Ciriaco S. Tirol. These lots were involved
in Civil Case Nos. 5222 and 5262 filed
before
the RTCof Kalibo, Aklan.
[15]
The titles were issued on
August 7, 1933.[16]

The parties also agreed that the

principal issue for resolution was purely
legal: whether Proclamation No. 1801
posed
any
legal
hindrance
or
impediment to the titling of the lands in
Boracay. They decided to forego with the
trial and to submit the case for
resolution upon submission of their
respective memoranda.[13]

RTC and CA Dispositions

The OSG maintained that respondentsclaimants reliance on PD No. 1801
and PTA Circular
No.
3-82
was
misplaced. Their right to judicial
confirmation of title was governed by CA
No.
141
and
PD
No.
705. Since Boracay Island had not been
classified as alienable and disposable,
whatever possession they had cannot
ripen into ownership.
During pre-trial, respondents-claimants
and the OSG stipulated on the following
facts: (1) respondents-claimants were
presently in possession of parcels of land
in Boracay Island; (2) these parcels of
land were planted with coconut trees
and other natural growing trees; (3) the
coconut trees had heights of more or less

On July 14, 1999, the RTC rendered a

decision in favor of respondentsclaimants, with a fallo reading:
WHEREFORE, in view of the foregoing,
the Court declares that Proclamation
No. 1801 and PTA Circular No. 3-82
pose no legal obstacle to the petitioners
and those similarly situated to acquire
title to their lands in Boracay, in
accordance with the applicable laws and
in the manner prescribed therein; and to
have their lands surveyed and approved
by respondent Regional Technical
Director of Lands as the approved
survey does not in itself constitute a title
to the land.

SO ORDERED.[17]
The RTC upheld respondents-claimants
right to have their occupied lands titled
in their name. It ruled that neither
Proclamation No. 1801 nor PTA Circular
No. 3-82 mentioned that lands in
Boracay were inalienable or could not be
the subject of disposition.[18] The
Circular itself recognized private
ownership of lands.[19]The trial court
cited Sections 87[20] and 53[21] of the
Public Land Act as basis for
acknowledging private ownership of
lands in Boracay and that only those
forested areas in public lands were
declared as part of the forest reserve.[22]
The OSG moved for reconsideration but
its motion was denied.[23] The Republic
then appealed to the CA.
On December 9, 2004, the appellate
court affirmed in toto the RTC decision,
disposing as follows:
WHEREFORE, in view of the foregoing
premises, judgment is hereby rendered
by us DENYING the appeal filed in this
case and AFFIRMING the decision of
the lower court.[24]

The CA held that respondents-claimants

could not be prejudiced by a declaration
that the lands they occupied since time
immemorial were part of a forest
reserve.
Again, the OSG sought reconsideration
but it was similarly denied.[25] Hence, the
present petition under Rule 45.
G.R. No. 173775
On May 22, 2006, during the pendency
of G.R. No. 167707, President Gloria
Macapagal-Arroyo issued Proclamation

No. 1064[26] classifying Boracay Island

into four hundred (400) hectares of
reserved
forest
land
(protection
purposes) and six hundred twenty-eight
and 96/100 (628.96) hectares of
agricultural
land
(alienable
and
disposable). The Proclamation likewise
provided for a fifteen-meter buffer zone
on each side of the centerline of roads
and trails, reserved for right-of-way and
which shall form part of the area
reserved for forest land protection
purposes.
On August 10, 2006, petitionersclaimants
Dr.
Orlando
Sacay,
[27]
Wilfredo
Gelito,[28] and
other
landowners[29] in Boracay filed with this
Court
an
original
petition
for
prohibition,
mandamus,
and
nullification of Proclamation No. 1064.
[30]
They allege that the Proclamation
infringed on their prior vested rights
over portions of Boracay. They have
been in continued possession of their
respective lots in Boracay since time
immemorial. They have also invested
billions of pesos in developing their
lands and building internationally
renowned first class resorts on their lots.
[31]

Petitioners-claimants contended that

there is no need for a proclamation
reclassifying Boracay into agricultural
land. Being classified as neither mineral
nor
timber
land,
the
island
is deemed agricultural pursuant to the
Philippine Bill of 1902 and Act No.
926, known as the first Public Land Act.
[32]
Thus, their possession in the concept
of owner for the required period entitled
them to judicial confirmation of
imperfect title.

Opposing the petition, the OSG argued

that petitioners-claimants do not have a
vested right over their occupied portions
in the island. Boracay is an unclassified
public forest land pursuant to Section
3(a) of PD No. 705. Being public forest,
the claimed portions of the island are
inalienable and cannot be the subject of
judicial confirmation of imperfect
title. It is only the executive department,
not the courts, which has authority to
reclassify lands of the public domain
into
alienable
and
disposable
lands. There is a need for a positive
government act in order to release the
lots for disposition.
On November 21, 2006, this Court
ordered the consolidation of the two
petitions as they principally involve the
same issues on the land classification
ofBoracay Island.[33]
Issues
G.R. No. 167707
The OSG raises the lone issue of whether
Proclamation No. 1801 and PTA Circular
No. 3-82 pose any legal obstacle for
respondents, and all those similarly
situated, to acquire title to their
occupied lands in Boracay Island.[34]

G.R. No. 173775

Petitioners-claimants
issues, namely:
I.
AT THE TIME
POSSESSION
CONCEPT OF
RESPECTIVE
SINCE TIME

hoist

five

(5)

OF THE ESTABLISHED
OF PETITIONERS IN
OWNER OVER THEIR
AREAS IN BORACAY,
IMMEMORIAL OR AT

THE LATEST SINCE 30 YRS. PRIOR

TO THE FILING OF THE PETITION
FOR DECLARATORY RELIEF ON NOV.
19,
1997, WERE
THE
AREAS
OCCUPIED
BY
THEM
PUBLIC
AGRICULTURAL LANDS AS DEFINED
BY LAWS THEN ON
JUDICIAL
CONFIRMATION OF IMPERFECT
TITLES OR PUBLIC FOREST AS
DEFINED BY SEC. 3a, PD 705?
II.
HAVE PETITIONERS OCCUPANTS
ACQUIRED PRIOR VESTED RIGHT OF
PRIVATE OWNERSHIP OVER THEIR
OCCUPIED
PORTIONS
OF BORACAY LAND,
DESPITE
THE FACT THAT THEY HAVE NOT
APPLIED
YET
FOR
JUDICIAL
CONFIRMATION OF IMPERFECT
TITLE?

CAN RESPONDENTS BE COMPELLED

BY MANDAMUS TO ALLOW THE
SURVEY AND TO
APPROVE
THE
SURVEY PLANS FOR PURPOSES OF
THE APPLICATION FOR TITLING OF
THE LANDS OF PETITIONERS IN
BORACAY?[35] (Underscoring supplied)
In capsule, the main issue is whether
private
claimants
(respondentsclaimants in G.R. No. 167707 and
petitioners-claimants
in G.R.
No.
173775) have a right to secure titles over
their occupied portions in Boracay. The
twin petitions pertain to their right, if
any, to judicial confirmation of
imperfect title under CA No. 141, as
amended. They do not involve their
right to secure title under other
pertinent laws.
Our Ruling

III.
IS THE EXECUTIVE DECLARATION
OF
THEIR
AREAS
AS
ALIENABLE AND DISPOSABLE UNDE
R SEC 6,
CA
141
[AN]
INDISPENSABLE PRE-REQUISITE
FOR PETITIONERS TO OBTAIN
TITLE UNDER
THE TORRENS SYSTEM?
IV.
IS THE
ISSUANCE
OF PROCLAMATION 1064 ON MAY 22,
2006, VIOLATIVE OF THE PRIOR
VESTED
RIGHTS
TO
PRIVATE
OWNERSHIP OF PETITIONERSOVER
THEIR
LANDS
IN
BORACAY,
PROTECTED BY THE DUE PROCESS
CLAUSE OF THE CONSTITUTION OR
IS PROCLAMATION 1064 CONTRARY
TO SEC. 8, CA 141, OR SEC. 4(a) OF RA
6657.
V.

Regalian Doctrine and power of

the executive
to reclassify lands of the public
domain
Private claimants rely on three (3) laws
and executive acts in their bid for
judicial confirmation of imperfect title,
namely: (a) Philippine Bill of 1902 [36] in
relation to Act No. 926, later amended
and/or superseded by Act No. 2874 and
CA No. 141;[37] (b) Proclamation No.
1801[38] issued
by
then
President
Marcos; and (c) Proclamation No.
1064[39] issued by President Gloria
Macapagal-Arroyo. We shall proceed to
determine their rights to apply for
judicial confirmation of imperfect title
under these laws and executive acts.
But first, a peek at the Regalian principle
and the power of the executive to
reclassify lands of the public domain.

The 1935 Constitution classified lands of

the public domain into agricultural,
forest or timber.[40] Meanwhile, the 1973
Constitution provided the following
divisions: agricultural, industrial or
commercial, residential, resettlement,
mineral, timber or forest and grazing
lands, and such other classes as may be
provided
by
law,[41] giving
the
government
great
leeway
for
classification.[42] Then
the
1987
Constitution reverted to the 1935
Constitution classification with one
addition:
national
parks.[43] Of
these, only agricultural lands may be
alienated.[44] Prior to Proclamation No.
1064
of May
22,
2006, Boracay Island had never been
expressly and administratively classified
under
any
of
these
grand
divisions. Boracay was an unclassified
land of the public domain.
The Regalian Doctrine dictates that all
lands of the public domain belong to the
State, that the State is the source of any
asserted right to ownership of land and
charged with the conservation of such
patrimony.[45] The doctrine has been
consistently adopted under the 1935,
1973, and 1987 Constitutions.[46]
All lands not otherwise appearing to be
clearly within private ownership are
presumed to belong to the State.
[47]
Thus, all lands that have not been
acquired from the government, either by
purchase or by grant, belong to the State
as part of the inalienable public domain.
[48]
Necessarily, it is up to the State to
determine if lands of the public domain
will be disposed of for private
ownership. The government, as the
agent of the state, is possessed of the
plenary power as the persona in law to
determine who shall be the favored
recipients of public lands, as well as

under what terms they may be granted

such privilege, not excluding the placing
of obstacles in the way of their exercise
of what otherwise would be ordinary
acts of ownership.[49]
Our present land law traces its roots to
the Regalian Doctrine. Upon the
Spanish conquest of the Philippines,
ownership of all lands, territories and
possessions in the Philippines passed to
the Spanish Crown.[50] The Regalian
doctrine was first introduced in
the Philippines through the Laws of the
Indies and the Royal Cedulas, which
laid the foundation that all lands that
were
not
acquired
from
the
Government, either by purchase or by
grant, belong to the public domain.[51]
The Laws of the Indies was followed by
the Ley Hipotecaria or the Mortgage
Law of 1893. The Spanish Mortgage
Law provided for the systematic
registration of titles and deeds as well as
possessory claims.[52]
The Royal Decree of 1894 or the Maura
Law[53] partly amended the Spanish
Mortgage Law and the Laws of the
Indies. It
established
possessory
information as the method of legalizing
possession of vacant Crown land, under
certain conditions which were set forth
in said decree.[54] Under Section 393 of
the
Maura
Law,
an informacion
posesoria or possessory information
title,[55] when duly inscribed in the
Registry of Property, is converted into a
title of ownership only after the lapse of
twenty (20) years of uninterrupted
possession which must be actual, public,
and adverse,[56] from the date of its
inscription.[57] However,
possessory
information title had to be perfected one
year after the promulgation of the
Maura
Law,
or
until April
17,

1895. Otherwise, the lands would revert

to the State.[58]
In sum, private ownership of land under
the Spanish regime could only be
founded on royal concessions which
took various forms, namely: (1) titulo
real or royal grant; (2) concesion
especial or
special
grant; (3) composicion con el estado or
adjustment title; (4) titulo de compra or
title by purchase; and (5) informacion
posesoria or possessory information
title.[59]
The first law governing the disposition
of public lands in the Philippines under
American rule was embodied in the
Philippine Bill of 1902.[60] By this law,
lands of the public domain in the
Philippine Islands were classified into
three (3) grand divisions, to wit:
agricultural, mineral, and timber or
forest lands.[61] The act provided for,
among others, the disposal of mineral
lands by means of absolute grant
(freehold system) and by lease
(leasehold system).[62] It also provided
the
definition
by
exclusion
of
agricultural public lands.[63] Interpreting
the meaning of agricultural lands under
the Philippine Bill of 1902, the Court
declared
in Mapa
v.
Insular
Government:[64]

x x x In other words, that the

phrase agricultural land as used in
Act No. 926 means those public lands
acquired from Spain which are not
timber or mineral lands. x x
x[65] (Emphasis Ours)
On February 1, 1903, the Philippine
Legislature
passed
Act
No. 496,
otherwise
known
as
the
Land
Registration Act. The act established a

system of registration by which recorded

title becomes absolute, indefeasible, and
imprescriptible. This is known as
the Torrens system.[66]
Concurrently, on October 7, 1903, the
Philippine Commission passed Act
No. 926, which was the first Public
Land Act. The Act introduced the
homestead system and made provisions
for
judicial
and
administrative
confirmation of imperfect titles and for
the sale or lease of public lands. It
permitted corporations regardless of the
nationality of persons owning the
controlling stock to lease or purchase
lands of the public domain.[67] Under the
Act, open, continuous, exclusive, and
notorious possession and occupation of
agricultural lands for the next ten (10)
years preceding July 26, 1904 was
sufficient for judicial confirmation of
imperfect title.[68]
On November 29, 1919, Act No. 926
was superseded by Act No. 2874,
otherwise known as the second Public
Land
Act.
This
new,
more
comprehensive
law
limited
the
exploitation of agricultural lands to
Filipinos and Americans and citizens of
other countries which gave Filipinos the
same
privileges. For
judicial
confirmation of title, possession and
occupation en concepto dueo since time
immemorial, or since July 26, 1894, was
required.[69]
After the passage of the 1935
Constitution, CA No. 141 amended Act
No. 2874 on December 1, 1936. To
this
day,
CA
No.
141,
as
amended, remains as
the
existing
general law governing the classification
and disposition of lands of the public
domain other than timber and mineral

lands,[70] and privately owned

which reverted to the State.[71]

lands

Section 48(b) of CA No. 141 retained the

requirement under Act No. 2874 of
possession and occupation of lands of
the
public
domain
since
time
immemorial
or
since July
26,
1894. However, this provision was
superseded by Republic Act (RA) No.
1942,[72] which provided for a simple
thirty-year prescriptive period for
judicial confirmation of imperfect
title. The provision was last amended
by PD No. 1073,[73] which now provides
for possession and occupation of the
land applied for since June 12, 1945,
or earlier.[74]
The
issuance
of
PD
No. 892[75] on February
16,
1976 discontinued the use of Spanish
titles as evidence in land registration
proceedings.[76] Under the decree, all
holders of Spanish titles or grants
should apply for registration of their
lands under Act No. 496 within six (6)
months from the effectivity of the decree
onFebruary 16, 1976. Thereafter, the
recording
of
all unregistered
lands[77] shall be governed by Section
194 of the Revised Administrative Code,
as amended by Act No. 3344.
On June 11, 1978, Act No. 496 was
amended and updated by PD No. 1529,
known as the Property Registration
Decree. It was enacted to codify the
various laws relative to registration of
property.[78] It governs registration of
lands under the Torrens system as well
as unregistered lands, including chattel
mortgages.[79]
A positive act declaring land as
alienable
and
disposable
is
required. In
keeping
with
the

presumption of State ownership, the

Court has time and again emphasized
that there must be a positive act of
the government, such as an official
proclamation,[80] declassifying
inalienable public land into disposable
land for agricultural or other purposes.
[81]
In fact, Section 8 of CA No. 141 limits
alienable or disposable lands only to
those lands which have been officially
delimited and classified.[82]
The burden of proof in overcoming the
presumption of State ownership of the
lands of the public domain is on the
person applying for registration (or
claiming ownership), who must prove
that the land subject of the application is
alienable or disposable.[83] To overcome
this
presumption,
incontrovertible
evidence must be established that the
land subject of the application (or claim)
is alienable or disposable.[84] There must
still be a positive act declaring land of
the public domain as alienable and
disposable. To prove that the land
subject of an application for registration
is alienable, the applicant must establish
the existence of a positive act of the
government such as a presidential
proclamation or an executive order; an
administrative action; investigation
reports
of
Bureau
of
Lands
investigators; and a legislative act or a
statute.[85] The applicant may also secure
a certification from the government that
the land claimed to have been possessed
for the required number of years is
alienable and disposable.[86]
In the case at bar, no such proclamation,
executive order, administrative action,
report, statute, or certification was
presented to the Court. The records are
bereft of evidence showing that, prior to
2006, the portions of Boracay occupied
by private claimants were subject of a

government proclamation that the land

is alienable and disposable. Absent such
well-nigh incontrovertible evidence, the
Court cannot accept the submission that
lands occupied by private claimants
were already open to disposition before
2006. Matters of land classification or
reclassification
cannot
be
assumed. They call for proof.[87]
Ankron and De Aldecoa did not
make the whole of Boracay
Island,
or
portions
of
it,
agricultural lands. Private claimants
posit that Boracay was already an
agricultural land pursuant to the old
cases Ankron v. Government of the
Philippine Islands (1919)[88] and De
Aldecoa v. The Insular Government
(1909).[89] These cases were decided
under the provisions of the Philippine
Bill of 1902 and Act No. 926. There is a
statement in these old cases that in the
absence of evidence to the contrary, that
in each case the lands are agricultural
lands until the contrary is shown.[90]
Private
claimants
reliance
on Ankron and De
Aldecoa is
misplaced. These cases did not have the
effect of converting the whole
of Boracay Island or portions of it into
agricultural lands. It should be stressed
that the Philippine Bill of 1902 and Act
No. 926 merely provided the manner
through which land registration courts
would classify lands of the public
domain. Whether the land would be
classified as timber, mineral, or
agricultural
depended
on
proof
presented in each case.
Ankron and De Aldecoa were decided at
a time when the President of the
Philippines had no power to classify
lands of the public domain into mineral,
timber, and agricultural. At that time,

the courts were free to make

corresponding
classifications
in
justiciable cases, or were vested with
implicit power to do so, depending upon
the preponderance of the evidence.
[91]
This was the Courts ruling in Heirs of
the Late Spouses Pedro S. Palanca and
Soterranea Rafols Vda. De Palanca v.
Republic,[92] in which it stated, through
Justice Adolfo Azcuna, viz.:
x x x Petitioners furthermore insist that
a particular land need not be formally
released by an act of the Executive
before it can be deemed open to private
ownership, citing the cases of Ramos v.
Director of Lands and Ankron v.
Government of the Philippine Islands.
xxxx
Petitioners reliance upon Ramos v.
Director of Lands and Ankron v.
Government is misplaced. These cases
were decided under the Philippine Bill of
1902 and the first Public Land Act No.
926 enacted by the Philippine
Commission on October 7, 1926, under
which there was no legal provision
vesting in the Chief Executive or
President of the Philippines the power to
classify lands of the public domain into
mineral, timber and agricultural so that
the courts then were free to make
corresponding
classifications
in
justiciable cases, or were vested with
implicit power to do so, depending upon
the preponderance of the evidence.[93]
To aid the courts in resolving land
registration cases under Act No. 926, it
was then necessary to devise a
presumption on land classification. Thus
evolved the dictum in Ankron that the
courts have a right to presume, in the
absence of evidence to the contrary, that

in each case the lands are agricultural

lands until the contrary is shown.[94]

But We cannot unduly expand the

presumption
in Ankron and De
Aldecoa to an argument that all lands of
the
public
domain
had
been
automatically reclassified as disposable
and alienable agricultural lands. By no
stretch of imagination did the
presumption convert all lands of the
public domain into agricultural lands.
If We accept the position of private
claimants, the Philippine Bill of 1902
and Act No. 926 would have
automatically made all lands in
the Philippines, except those already
classified as timber or mineral land,
alienable and disposable lands. That
would take these lands out of State
ownership and worse, would be utterly
inconsistent with and totally repugnant
to
the
long-entrenched
Regalian
doctrine.
The presumption in Ankron and De
Aldecoa attaches
only
to
land
registration cases brought under the
provisions of Act No. 926, or more
specifically those cases dealing with
judicial and administrative confirmation
of imperfect titles. The presumption
applies to an applicant for judicial or
administrative
conformation
of
imperfect title under Act No. 926. It
certainly cannot apply to landowners,
such as private claimants or their
predecessors-in-interest, who failed to
avail themselves of the benefits of Act
No. 926. As to them, their land
remained unclassified and, by virtue of
the Regalian doctrine, continued to be
owned by the State.

In
any
case,
the
assumption
in Ankron and De
Aldecoa was
not
absolute. Land classification was, in the
end, dependent on proof. If there was
proof that the land was better suited for
non-agricultural uses, the courts
could adjudge it as a mineral or timber
land
despite
the
presumption. In Ankron, this Court
stated:
In the case of Jocson vs. Director of
Forestry (supra), the Attorney-General
admitted in effect that whether the
particular land in question belongs to
one class or another is a question of
fact. The mere fact that a tract of land
has trees upon it or has mineral within it
is not of itself sufficient to declare that
one is forestry land and the other,
mineral land.There must be some proof
of the extent and present or future value
of
the
forestry
and
of
the
minerals. While, as we have just
said, many definitions have been given
for agriculture, forestry, and mineral
lands, and that in each case it is a
question of fact, we think it is safe to say
that in order to be forestry or mineral
land the proof must show that it is more
valuable for the forestry or the mineral
which it contains than it is for
agricultural purposes. (Sec. 7, Act No.
1148.) It is not sufficient to show that
there exists some trees upon the land or
that it bears some mineral. Land may be
classified as forestry or mineral today,
and, by reason of the exhaustion of the
timber or mineral, be classified as
agricultural land tomorrow. And viceversa, by reason of the rapid growth of
timber or the discovery of valuable
minerals, lands classified as agricultural
today may be differently classified
tomorrow. Each
case
must
be
decided upon the proof in that
particular case, having regard for

its present or future value for one

or the other purposes. We believe,
however, considering the fact that it is a
matter of public knowledge that a
majority of the lands in the Philippine
Islands are agricultural lands that the
courts have a right to presume, in the
absence of evidence to the contrary, that
in each case the lands are agricultural
lands
until
the
contrary
is
shown. Whatever the land involved
in a particular land registration
case is forestry or mineral land
must, therefore, be a matter of
proof. Its superior value for one
purpose or the other is a question
of fact to be settled by the proof in
each particular case. The fact that
the land is a manglar [mangrove
swamp] is not sufficient for the courts to
decide whether it is agricultural,
forestry, or mineral land. It may
perchance belong to one or the other of
said classes of land. The Government, in
the first instance, under the provisions
of Act No. 1148, may, by reservation,
decide for itself what portions of public
land shall be considered forestry land,
unless private interests have intervened
before such reservation is made. In the
latter case, whether the land is
agricultural, forestry, or mineral, is a
question of proof. Until private interests
have intervened, the Government, by
virtue of the terms of said Act (No.
1148), may decide for itself what
portions of the public domain shall be
set aside and reserved as forestry or
mineral land. (Ramos vs. Director of
Lands, 39 Phil. 175; Jocson vs. Director
of Forestry,supra)[95] (Emphasis ours)

and reproduced in Section 6 of CA No.

141, gave the Executive Department,
through
the
President,
the exclusive prerogative to classify or
reclassify public lands into alienable or
disposable, mineral or forest.96-a Since
then, courts no longer had the authority,
whether express or implied, to
determine the classification of lands of
the public domain.[97]

Since 1919, courts were no longer free

to determine the classification of lands
from the facts of each case, except those
that have already became private lands.
[96]
Act No. 2874, promulgated in 1919

[103]

Here, private claimants, unlike the Heirs

of Ciriaco Tirol who were issued their
title in 1933,[98] did not present a
justiciable case for determination by the
land registration court of the propertys
land classification. Simply put, there
was no opportunity for the courts then
to resolve if the land the Boracay
occupants are now claiming were
agricultural lands. When Act No. 926
was supplanted by Act No. 2874 in 1919,
without an application for judicial
confirmation having been filed by
private claimants or their predecessorsin-interest, the courts were no longer
authorized to determine the propertys
land
classification. Hence,
private
claimants cannot bank on Act No. 926.
We note that the RTC decision[99] in G.R.
No. 167707 mentioned Krivenko v.
Register of Deeds of Manila,[100] which
was decided in 1947 when CA No. 141,
vesting the Executive with the sole
power to classify lands of the public
domain
was
already
in
effect. Krivenko cited
the
old
cases Mapa v. Insular Government,
[101]
De Aldecoa v. The Insular
Government,[102] and Ankron
v.
Government of the Philippine Islands.

Krivenko, however, is not controlling

here because it involved a totally
different issue. The pertinent issue

in Krivenko was whether residential lots

were
included
in
the
general
classification of agricultural lands; and if
so, whether an alien could acquire a
residential lot. This Court ruled that as
an alien, Krivenko was prohibited by the
1935 Constitution[104] from acquiring
agricultural land, which included
residential lots. Here, the issue is
whether unclassified lands of the public
domain are automatically deemed
agricultural.

Notably, the definition of agricultural

public
lands
mentioned
in Krivenko relied on the old cases
decided prior to the enactment of Act
No. 2874, includingAnkron and De
Aldecoa.[105] As We have already stated,
those cases cannot apply here, since they
were decided when the Executive did
not have the authority to classify lands
as agricultural, timber, or mineral.
Private
claimants
continued
possession under Act No. 926 does
not create a presumption that the
land is alienable. Private claimants
also contend that their continued
possession
of
portions
of Boracay Island for
the
requisite
period of ten (10) years under Act No.
926[106] ipso facto converted the island
into private ownership. Hence, they may
apply for a title in their name.
A similar argument was squarely
rejected by the Court in Collado v. Court
of
Appeals.[107] Collado, citing
the
separate opinion of now Chief Justice
Reynato S. Puno in Cruz v. Secretary of
Environment and Natural Resources,107a
ruled:
Act No. 926, the first Public Land Act,
was passed in pursuance of the

provisions of the Philippine Bill of 1902.

The law governed the disposition of
lands of the public domain. It prescribed
rules
and
regulations
for
the
homesteading, selling and leasing of
portions of the public domain of the
Philippine Islands, and prescribed the
terms and conditions to enable persons
to perfect their titles to public lands in
the Islands. It also provided for the
issuance of patents to certain native
settlers upon public lands, for the
establishment of town sites and sale of
lots therein, for the completion of
imperfect titles, and for the cancellation
or confirmation of Spanish concessions
and grants in the Islands. In short, the
Public Land Act operated on the
assumption that title to public lands in
the Philippine Islands remained in the
government; and that the governments
title to public land sprung from the
Treaty of Paris and other subsequent
treaties between Spain and the United
States. The term public land referred to
all lands of the public domain whose
title still remained in the government
and are thrown open to private
appropriation and settlement, and
excluded the patrimonial property of the
government and the friar lands.
Thus, it
is
plain
error
for
petitioners to argue that under the
Philippine
Bill
of
1902
and Public Land Act No. 926, mere
possession by private individuals
of
lands
creates
the
legal
presumption that the lands are
alienable
and
disposable.
[108]
(Emphasis Ours)
Except for lands already covered
by existing titles, Boracay was an
unclassified land of the public
domain prior to Proclamation No.
1064. Such unclassified lands are

considered public forest under PD

No.
705. The
DENR[109] and
the
National Mapping and Resource
Information
Authority[110] certify
thatBoracay Island is an unclassified
land of the public domain.
PD No. 705 issued by President Marcos
categorized all unclassified lands of the
public domain as public forest. Section
3(a) of PD No. 705 defines a public
forest as a mass of lands of the public
domain which has not been the subject
of the present system of classification
for the determination of which lands are
needed for forest purpose and which are
not. Applying
PD
No.
705,
all
unclassified lands, including those
in Boracay Island,
are ipso
facto considered public forests. PD No.
705, however, respects titles already
existing prior to its effectivity.
The Court notes that the classification of
Boracay as a forest land under PD No.
705 may seem to be out of touch with
the
present
realities
in
the
island.Boracay, no doubt, has been
partly stripped of its forest cover to pave
the
way
for
commercial
developments. As a premier tourist
destination for local and foreign
tourists, Boracay appears more of a
commercial island resort, rather than a
forest land.
Nevertheless, that the occupants of
Boracay have built multi-million peso
beach resorts on the island; [111] that the
island has already been stripped of its
forest cover; or that the implementation
of Proclamation No. 1064 will destroy
the
islands
tourism
industry,
do not negate its character as public
forest.

Forests, in the context of both the Public

Land
Act
and
the
[112]
Constitution
classifying lands of the
public domain into agricultural, forest
or timber, mineral lands, and national
parks, do not necessarily refer to large
tracts of wooded land or expanses
covered by dense growths of trees and
underbrushes.[113] The
discussion
in Heirs of Amunategui v. Director of
Forestry[114] is particularly instructive:
A forested area classified as forest land
of the public domain does not lose such
classification simply because loggers or
settlers may have stripped it of its forest
cover.Parcels of land classified as forest
land may actually be covered with grass
or
planted
to
crops
by kaingin cultivators
or
other
farmers. Forest lands do not have to be
on mountains or in out of the way
places. Swampy areas covered by
mangrove trees, nipa palms, and other
trees growing in brackish or sea water
may also be classified as forest
land. The
classification
is
descriptive of its legal nature or
status and does not have to be
descriptive of what the land
actually looks like. Unless and until
the land classified as forest is released in
an official proclamation to that effect so
that it may form part of the disposable
agricultural lands of the public domain,
the rules on confirmation of imperfect
title
do
not
apply.[115] (Emphasis
supplied)
There is a big difference between forest
as defined in a dictionary and forest or
timber land as a classification of lands of
the public domain as appearing in our
statutes. One is descriptive of what
appears on the land while the other is a
legal status, a classification for legal
purposes.[116] At any rate, the Court is

tasked to determine the legal status

of Boracay Island, and not look into its
physical layout. Hence, even if its forest
cover has been replaced by beach
resorts,
restaurants
and
other
commercial establishments, it has not
been automatically converted from
public forest to alienable agricultural
land.
Private claimants cannot rely on
Proclamation No. 1801 as basis
for judicial confirmation of
imperfect title. The proclamation
did not convert Boracay into an
agricultural land. However, private
claimants argue that Proclamation No.
1801 issued by then President Marcos in
1978
entitles
them
to
judicial
confirmation of imperfect title. The
Proclamation classified Boracay, among
other islands, as a tourist zone. Private
claimants assert that, as a tourist spot,
the island is susceptible of private
ownership.
Proclamation No. 1801 or PTA Circular
No. 3-82 did not convert the whole of
Boracay into an agricultural land. There
is nothing in the law or the Circular
which
made Boracay Island an
agricultural land. The reference in
Circular No. 3-82 to private lands[117] and
areas declared as alienable and
disposable[118] does not by itself classify
the
entire
island
as
agricultural. Notably, Circular No. 3-82
makes reference not only to private
lands and areas but also to public
forested lands. Rule VIII, Section 3
provides:
No trees in forested private lands may
be cut without prior authority from
the PTA. All forested areas in public
lands
are
declared
forest
reserves. (Emphasis supplied)

Clearly, the reference in the Circular to

both private and public lands merely
recognizes that the island can be
classified by the Executive department
pursuant to its powers under CA No.
141. In fact, Section 5 of the Circular
recognizes the then Bureau of Forest
Developments authority to declare areas
in the island as alienable and disposable
when it provides:
Subsistence farming, in areas declared
as alienable and disposable by the
Bureau of Forest Development.
Therefore, Proclamation No. 1801
cannot be deemed the positive act
needed to classify Boracay Island as
alienable and disposable land. If
President Marcos intended to classify
the island as alienable and disposable or
forest, or both, he would have identified
the specific limits of each, as President
Arroyo did in Proclamation No.
1064. This was not done in Proclamation
No. 1801.
The Whereas clauses of Proclamation
No. 1801 also explain the rationale
behind the declaration of Boracay
Island, together with other islands,
caves and peninsulas in the Philippines,
as a tourist zone and marine reserve to
be administered by the PTA to ensure
the concentrated efforts of the public
and private sectors in the development
of the areas tourism potential with due
regard for ecological balance in the
marine environment. Simply put, the
proclamation is aimed at administering
the
islands
for tourism
and
ecological purposes. It does not
address the areas alienability.[119]
More importantly, Proclamation No.
1801 covers not only Boracay Island, but

sixty-four (64) other islands, coves, and

peninsulas in the Philippines, such as
Fortune and Verde Islands in Batangas,
Port Galera in Oriental Mindoro,
Panglao and Balicasag Islands in Bohol,
Coron Island, Puerto Princesa and
surrounding areas in Palawan, Camiguin
Island in Cagayan de Oro, and Misamis
Oriental, to name a few. If the
designation of Boracay Island as tourist
zone makes it alienable and disposable
by virtue of Proclamation No. 1801, all
the other areas mentioned would
likewise be declared wide open for
private disposition. That could not have
been, and is clearly beyond, the intent of
the proclamation.
It was Proclamation No. 1064 of
2006 which positively declared
part of Boracay as alienable and
opened the same to private
ownership. Sections 6 and 7 of CA No.
141[120] provide that it is only the
President, upon the recommendation of
the proper department head, who has
the authority to classify the lands of the
public domain into alienable or
disposable, timber and mineral lands.[121]
In issuing Proclamation No. 1064,
President Gloria Macapagal-Arroyo
merely exercised the authority granted
to her to classify lands of the public
domain, presumably subject to existing
vested rights. Classification of public
lands is the exclusive prerogative of the
Executive Department, through the
Office of the President. Courts have no
authority to do so.[122] Absent such
classification,
the
land
remains
unclassified until released and rendered
open to disposition.[123]
Proclamation No. 1064 classifies
Boracay into 400 hectares of reserved
forest land and 628.96 hectares of

agricultural land. The Proclamation

likewise provides for a 15-meter buffer
zone on each side of the center line of
roads and trails, which are reserved for
right of way and which shall form part of
the area reserved for forest land
protection purposes.
Contrary to private claimants argument,
there was nothing invalid or irregular,
much less unconstitutional, about the
classification of Boracay Island made by
the President through Proclamation No.
1064. It was within her authority to
make such classification, subject to
existing vested rights.
Proclamation No. 1064 does not
violate
the
Comprehensive
Agrarian
Reform
Law. Private
claimants
further
assert
that
Proclamation No. 1064 violates the
provision
of
the
Comprehensive
Agrarian Reform Law (CARL) or RA No.
6657 barring conversion of public
forests into agricultural lands. They
claim that since Boracay is a public
forest under PD No. 705, President
Arroyo can no longer convert it into an
agricultural land without running afoul
of Section 4(a) of RA No. 6657, thus:
SEC.
4. Scope. The
Comprehensive
Agrarian Reform Law of 1988 shall
cover,
regardless
of
tenurial
arrangement and commodity produced,
all public and private agricultural lands
as provided in Proclamation No. 131 and
Executive Order No. 229, including
other lands of the public domain
suitable for agriculture.
More specifically, the following lands
are covered by the Comprehensive
Agrarian Reform Program:
(a) All alienable and disposable lands of
the public domain devoted to or suitable

for agriculture. No reclassification of

forest or mineral lands to agricultural
lands shall be undertaken after the
approval of this Act until Congress,
taking
into
account
ecological,
developmental
and
equity
considerations, shall have determined
by law, the specific limits of the public
domain.
That Boracay Island was classified as a
public forest under PD No. 705 did not
bar the Executive from later converting
it
into
agricultural
land. Boracay Islandstill remained an
unclassified land of the public domain
despite PD No. 705.
In Heirs of the Late Spouses Pedro S.
Palanca and Soterranea Rafols v.
Republic,[124] the Court stated that
unclassified lands are public forests.

While it is true that the land

classification
map
does
not
categorically state that the islands
are public forests, the fact that
they were unclassified lands leads
to the same result. In the absence of
the classification as mineral or timber
land, the land remains unclassified land
until released and rendered open to
disposition.[125] (Emphasis supplied)
Moreover, the prohibition under the
CARL applies only to a reclassification
of land. If the land had never been
previously classified, as in the case of
Boracay, there can be no prohibited
reclassification under the agrarian
law. We agree with the opinion of the
Department of Justice[126] on this point:
Indeed, the key word to the correct
application of the prohibition in Section
4(a) is the word reclassification. Where

there
has
been
no
previous
classification of public forest [referring,
we repeat, to the mass of the public
domain which has not been the subject
of the present system of classification
for purposes of determining which are
needed for forest purposes and which
are not] into permanent forest or forest
reserves or some other forest uses
under the Revised Forestry Code, there
can be no reclassification of forest
lands to speak of within the meaning of
Section 4(a).
Thus, obviously, the prohibition in
Section 4(a) of the CARL against the
reclassification of forest lands to
agricultural lands without a prior law
delimiting the limits of the public
domain, does not, and cannot, apply to
those lands of the public domain,
denominated as public forest under the
Revised Forestry Code, which have not
been
previously
determined,
or
classified, as needed for forest purposes
in accordance with the provisions of the
Revised Forestry Code.[127]
Private claimants are not entitled
to apply for judicial confirmation
of imperfect title under CA No.
141. Neither do they have vested
rights over the occupied lands
under the said law. There are two
requisites for judicial confirmation of
imperfect or incomplete title under CA
No. 141, namely: (1) open, continuous,
exclusive, and notorious possession and
occupation of the subject land by
himself or through his predecessors-ininterest under a bona fide claim of
ownership since time immemorial or
from June 12, 1945; and (2) the
classification of the land as alienable
and disposable land of the public
domain.[128]

As discussed, the Philippine Bill of 1902,

Act No. 926, and Proclamation No. 1801
did
not
convert
portions
of Boracay Island into an agricultural
land. The
island
remained
an
unclassified land of the public domain
and, applying the Regalian doctrine, is
considered State property.
Private claimants bid for judicial
confirmation of imperfect title, relying
on the Philippine Bill of 1902, Act No.
926, and Proclamation No. 1801, must
fail because of the absence of the second
element of alienable and disposable
land. Their entitlement to a government
grant under our present Public Land Act
presupposes that the land possessed and
applied for is already alienable and
disposable. This is clear from the
wording of the law itself.[129] Where the
land is not alienable and disposable,
possession of the land, no matter how
long, cannot confer ownership or
possessory rights.[130]
Neither may private claimants apply for
judicial confirmation of imperfect title
under Proclamation No. 1064, with
respect to those lands which were
classified as agricultural lands. Private
claimants failed to prove the first
element of open, continuous, exclusive,
and notorious possession of their lands
in Boracay since June 12, 1945.
We
cannot
sustain
the
CA
and RTC conclusion in the petition for
declaratory relief that private claimants
complied with the requisite period of
possession.
The tax declarations in the name
private claimants are insufficient
prove
the
first
element
possession. We note that the earliest
the tax declarations in the name

of
to
of
of
of

private claimants were issued in

1993. Being of recent dates, the tax
declarations are not sufficient to
convince this Court that the period of
possession and occupation commenced
on June 12, 1945.
Private claimants insist that they have a
vested right in Boracay, having been in
possession of the island for a long
time. They have invested millions of
pesos in developing the island into a
tourist spot. They say their continued
possession and investments give them a
vested right which cannot be unilaterally
rescinded by Proclamation No. 1064.
The
continued
possession
and
considerable investment of private
claimants do not automatically give
them a vested right in Boracay. Nor do
these give them a right to apply for a
title to the land they are presently
occupying. This Court is constitutionally
bound to decide cases based on the
evidence presented and the laws
applicable. As the law and jurisprudence
stand, private claimants are ineligible to
apply for a judicial confirmation of title
over their occupied portions in Boracay
even with their continued possession
and considerable investment in the
island.
One Last Note
The Court is aware that millions of pesos
have been invested for the development
of Boracay Island, making it a by-word
in the local and international tourism
industry. The Court also notes that for a
number of years, thousands of people
have called the island their home. While
the Court commiserates with private
claimants plight, We are bound to apply
the law strictly and judiciously. This is

the law and it should prevail. Ito ang

batas at ito ang dapat umiral.
All is not lost, however, for private
claimants. While they may not be
eligible
to apply
for
judicial
confirmation of imperfect title under
Section 48(b) of CA No. 141, as
amended, this does not denote their
automatic ouster from the residential,
commercial, and other areas they
possess
now
classified
as
agricultural. Neither will this mean the
loss of their substantial investments on
their occupied alienable lands. Lack of
title does not necessarily mean lack of
right to possess.
For one thing, those with lawful
possession may claim good faith as
builders of improvements. They can take
steps to preserve or protect their
possession. For another, they may look
into other modes of applying for original
registration of title, such as by
homestead[131] or sales patent,[132] subject
to the conditions imposed by law.
More realistically, Congress may enact a
law to entitle private claimants to
acquire title to their occupied lots or to
exempt them from certain requirements
under the present land laws. There is
one such bill[133] now pending in the
House of Representatives. Whether that
bill or a similar bill will become a law is
for Congress to decide.
In issuing Proclamation No. 1064, the
government has taken the step
necessary to open up the island to
private ownership. This gesture may not
be sufficient to appease some sectors
which view the classification of the
island partially into a forest reserve as
absurd. That the island is no longer
overrun by trees, however, does not

becloud the vision to protect its

remaining forest cover and to strike a
healthy balance between progress and
ecology. Ecological conservation is as
important as economic progress.
To be sure, forest lands are fundamental
to our nations survival. Their promotion
and protection are not just fancy
rhetoric
for
politicians
and
activists. These are needs that become
more urgent as destruction of our
environment gets prevalent and difficult
to control. As aptly observed by Justice
Conrado Sanchez in 1968 inDirector of
Forestry v. Munoz:[134]
The view this Court takes of the cases at
bar is but in adherence to public policy
that should be followed with respect to
forest lands. Many have written much,
and many more have spoken, and quite
often, about the pressing need for forest
preservation, conservation, protection,
development and reforestation. Not
without
justification. For,
forests
constitute a vital segment of any
country's natural resources. It is of
common knowledge by now that
absence of the necessary green cover on
our lands produces a number of adverse
or
ill
effects
of
serious
proportions. Without
the
trees,
watersheds dry up; rivers and lakes
which they supply are emptied of their
contents. The fish disappear. Denuded
areas become dust bowls. As waterfalls
cease to function, so will hydroelectric
plants. With the rains, the fertile topsoil
is washed away; geological erosion
results. With erosion come the dreaded
floods that wreak havoc and destruction
to property crops, livestock, houses, and
highways not to mention precious
human lives. Indeed, the foregoing
observations should be written down in
a lumbermans decalogue.[135]

WHEREFORE, judgment is rendered

as follows:
1. The petition for certiorari in G.R. No.
167707 is GRANTED and the Court of
Appeals Decision in CA-G.R. CV No.
71118 REVERSED AND SET ASIDE.
2. The petition for certiorari in G.R. No.
173775 is DISMISSED for lack of
merit.
SO ORDERED.
G.R. No. 192896
July 24,
2013
DREAM
VILLAGE
NEIGHBORHOOD ASSOCIATION,
INC.,
represented
by
its
Incumbent
President,
GREG
SERIEGO, Petitioner,
vs.
BASES
DEVELOPMENT
AUTHORITY, Respondent.
DECISION
REYES, J.:
Before us on Petition for Review1 under
Rule 45 of the Rules of Court is the
Decision2 dated September 10, 2009 and
Resolution3 dated July 13, 2010 of the
Court of Appeals (CA) in CA-G.R. SP No.
85228 nullifying and setting aside for
lack of jurisdiction the Resolution4 dated
April 28, 2004 of the Commission on
the Settlement of Land Problems
(COSLAP) in COS LAP Case No. 99-500.
The fallo of the assailed COS LAP
Resolution reads, as follows:
WHEREFORE, premises considered,
judgment is hereby rendered as follows:
1. Declaring the subject property,
covering an area of 78,466 square
meters, now being occupied by the
members of the Dream Village
Neighborhood Association, Inc. to be

outside of Swo-00-0001302 BCDA

property.
2. In accordance with the tenets of social
justice, members of said association are
advised to apply for sales patent on their
respective occupied lots with the Land
Management
Bureau,
DENR-NCR,
pursuant to R.A. Nos. 274 and 730.
3. Directing the Land Management
Bureau-DENR-NCR to process the sales
patent application of complainants
pursuant to existing laws and regulation.
4. The peaceful possession of actual
occupants be respected by the
respondents.
SO ORDERED.5
Antecedent Facts
Petitioner Dream Village Neighborhood
Association, Inc. (Dream Village) claims
to represent more than 2,000 families
who have been occupying a 78,466square meter lot in Western Bicutan,
Taguig City since 1985 "in the concept of
owners continuously, exclusively and
notoriously."6 The lot used to be part of
the
Hacienda
de
Maricaban
(Maricaban), owned by Dolores Casal y
Ochoa and registered under a Torrens
title,7 Original Certificate of Title (OCT)
No. 291, issued on October 17, 1906 by
the
Registry
of
Deeds
of
Rizal.8 Maricaban
covered
several
parcels of land with a total area of over
2,544 hectares spread out over Makati,
Pasig, Taguig, Pasay, and Paraaque.9
Following the purchase of Maricaban by
the government of the United States of
America (USA) early in the American
colonial period, to be converted into the
military reservation known as Fort
William Mckinley, Transfer Certificate
of Title (TCT) No. 192 was issued in the
name of the USA to cancel OCT No.
291.10 The
US
government
later
transferred 30 has. of Maricaban to the
Manila Railroad Company, for which

TCT No. 192 was cancelled by TCT Nos.

1218 and 1219, the first in the name of
the Manila Railroad Company for 30
has., and the second in the name of the
USA for the rest of the Maricaban
property.11
On January 29, 1914, TCT No. 1219 was
cancelled and replaced by TCT No. 1688,
and later that year, on September 15,
1914, TCT No. 1688 was cancelled and
replaced by TCT No. 2288, both times in
the name of the USA.12 On December 6,
1956, the USA formally ceded Fort
William Mckinley to the Republic of the
Philippines
(Republic),
and
on
September 11, 1958, TCT No. 2288 was
cancelled and replaced by TCT No.
61524, this time in the name of the
Republic.13 On July 12, 1957, President
Carlos P. Garcia issued Proclamation
No. 423 withdrawing from sale or
settlement the tracts of land within Fort
William Mckinley, now renamed Fort
Bonifacio, and reserving them for
military purposes.14
On January 7, 1986, President
Ferdinand
E.
Marcos
issued
Proclamation No. 2476 declaring certain
portions of Fort Bonifacio alienable and
disposable15 in the manner provided
under Republic Act (R.A.) Nos. 274 and
730, in relation to the Public Land
Act,16 thus allowing the sale to the
settlers of home lots in Upper Bicutan,
Lower Bicutan, Signal Village, and
Western Bicutan.17
On October 16, 1987, President Corazon
C. Aquino issued Proclamation No. 172
amending Proclamation No. 2476 by
limiting to Lots 1 and 2 of the survey
Swo-13-000298 the areas in Western
Bicutan open for disposition.18
On March 13, 1992, R.A. No. 7227 was
passed19 creating the Bases Conversion
and Development Authority (BCDA) to
oversee and accelerate the conversion of
Clark and Subic military reservations

and their extension camps (John Hay

Station, Wallace Air Station, ODonnell
Transmitter Station, San Miguel Naval
Communications Station and Capas
Relay Station) to productive civilian
uses. Section 820 of the said law provides
that the capital of the BCDA will be
provided from sales proceeds or
transfers of lots in nine (9) military
camps in Metro Manila, including 723
has. of Fort Bonifacio. The law, thus,
expressly authorized the President of the
Philippines "to sell the above lands, in
whole or in part, which are hereby
declared alienable and disposable
pursuant to the provisions of existing
laws and regulations governing sales of
government properties,"21 specifically to
raise capital for the BCDA. Titles to the
camps were transferred to the BCDA for
this purpose,22 and TCT No. 61524 was
cancelled on January 3, 1995 by TCT
Nos. 23888, 23887, 23886, 22460,
23889, 23890, and 23891, now in the
name of the BCDA.23
Excepted from disposition by the BCDA
are: a) approximately 148.80 has.
reserved for the National Capital Region
(NCR) Security Brigade, Philippine
Army officers housing area, and
Philippine National Police jails and
support services (presently known as
Camp Bagong Diwa); b) approximately
99.91 has. in Villamor Air Base for the
Presidential Airlift Wing, one squadron
of helicopters for the NCR and
respective security units; c) twenty one
(21) areas segregated by various
presidential proclamations; and d) a
proposed 30.15 has. as relocation site for
families to be affected by the
construction of Circumferential Road 5
and Radial Road 4, provided that the
boundaries and technical description of
these exempt areas shall be determined
by an actual ground survey.24

Now charging the BCDA of wrongfully

asserting title to Dream Village and
unlawfully subjecting its members to
summary demolition, resulting in unrest
and tensions among the residents, 25 on
November 22, 1999, the latter filed a
letter-complaint with the COSLAP to
seek its assistance in the verification
survey of the subject 78,466-sq m
property, which they claimed is within
Lot 1 of Swo-13-000298 and thus is
covered by Proclamation No. 172. They
claim that they have been occupying the
area for thirty (30) years "in the concept
of owners continuously, exclusively and
notoriously for several years," and have
built their houses of sturdy materials
thereon and introduced paved roads,
drainage and recreational and religious
facilities. Dream Village, thus, asserts
that the lot is not among those
transferred to the BCDA under R.A. No.
7227, and therefore patent applications
by the occupants should be processed by
the Land Management Bureau (LMB).
On August 15, 2000, Dream Village
formalized its complaint by filing an
Amended Petition26 in the COSLAP.
Among the reliefs it sought were:
d. DECLARING the subject property as
alienable and disposable by virtue of
applicable laws;
e. Declaring the portion of Lot 1 of
subdivision
Plan
SWO-13-000298,
situated in the barrio of Western
Bicutan, Taguig, Metro Manila, which is
presently being occupied by herein
petitioner as within the coverage of
Proclamation Nos. 2476 and 172 and
outside the claim of AFP-RSBS
INDUSTRIAL PARK COMPLEX and/or
BASES CONVESION DEVELOPMENT
AUTHORITY.
f. ORDERING the Land Management
Bureau to process the application of the
ASSOCIATION members for the
purchase of their respective lots under

the provisions of Acts Nos. 274 and 730.

(Underscoring supplied)
Respondent BCDA in its Answer28 dated
November 23, 2000 questioned the
jurisdiction of the COSLAP to hear
Dream Villages complaint, while
asserting its title to the subject property
pursuant to R.A. No. 7227. It argued
that under Executive Order (E.O.) No.
561 which created the COSLAP, its task
is merely to coordinate the various
government offices and agencies
involved in the settlement of land
problems or disputes, adding that BCDA
does not fall in the enumeration in
Section 3 of E.O. No. 561, it being
neither a pastureland-lease holder, a
timber concessionaire, or a government
reservation grantee, but the holder of
patrimonial government property which
cannot be the subject of a petition for
classification, release or subdivision by
the occupants of Dream Village.
In its Resolution29 dated April 28, 2004,
the COSLAP narrated that it called a
mediation conference on March 22,
2001, during which the parties agreed to
have a relocation/verification survey
conducted of the subject lot. On April 4,
2001, the COSLAP wrote to the
Department of Environment and
Natural Resources (DENR)-Community
Environment and Natural Resources
Office-NCR requesting the survey, which
would also include Swo-00-0001302,
covering the adjacent AFP-RSBS
Industrial
Park
established
by
Proclamation No. 1218 on May 8, 1998
as
well
as
the
abandoned
Circumferential Road 5 (C-5 Road).30
On April 1, 2004, the COSLAP received
the final report of the verification survey
and a blueprint copy of the survey plan
from Atty. Rizaldy Barcelo, Regional
Technical Director for Lands of DENR.
Specifically, Item No. 3 of the DENR
report states:

3. Lot-1, Swo-000298 is inside

Proclamation 172. Dream Village
Neighborhood Association, Inc. is
outside Lot-1, Swo-13-000298 and
inside Lot-10, 11 & Portion of Lot 13,
Swo-00-0001302 with an actual area of
78,466 square meters. Likewise, the area
actually is outside Swo-00-0001302 of
BCDA.31 (Emphasis
ours
and
underscoring supplied)
COSLAP Ruling
On the basis of the DENRs verification
survey report, the COSLAP resolved that
Dream Village lies outside of BCDA, and
particularly,
outside
of
Swo-000001302, and thus directed the LMB of
the DENR to process the applications of
Dream Villages members for sales
patent, noting that in view of the length
of time that they "have been openly,
continuously and notoriously occupying
the subject property in the concept of an
owner, x x x they are qualified to apply
for sales patent on their respective
occupied lots pursuant to R.A. Nos. 274
and 730 in relation to the provisions of
the Public Land Act."32
On the question of its jurisdiction over
the complaint, the COSLAP cited the
likelihood that the summary eviction by
the BCDA of more than 2,000 families
in Dream Village could stir up serious
social unrest, and maintained that
Section 3(2) of E.O. No. 561 authorizes it
to "assume jurisdiction and resolve land
problems or disputes which are critical
and explosive in nature considering, for
instance, the large number of parties
involved, the presence or emergence of
social tension or unrest, or other similar
critical situations requiring immediate
action," even as Section 3(2)(d) of E.O.
No. 561 also allows it to take cognizance
of "petitions for classification, release
and/or subdivision of lands of the public
domain," exactly the ultimate relief
sought by Dream Village. Rationalizing

that it was created precisely to provide a

more effective mechanism for the
expeditious settlement of land problems
"in general," the COSLAP invoked as its
authority the 1990 case of Baaga v.
COSLAP,33 where this Court said:
It is true that Executive Order No. 561
provides that the COSLAP may take
cognizance of cases which are "critical
and explosive in nature considering, for
instance, the large number of parties
involved, the presence or emergence of
social tension or unrest, or other similar
critical situations requiring immediate
action." However, the use of the word
"may" does not mean that the COSLAPs
jurisdiction is merely confined to the
above mentioned cases. The provisions
of the said Executive Order are clear that
the COSLAP was created as a means of
providing a more effective mechanism
for the expeditious settlement of land
problems in general, which are
frequently the source of conflicts among
settlers, landowners and cultural
minorities. Besides, the COSLAP merely
took over from the abolished PACLAP
whose
functions,
including
its
jurisdiction, power and authority to act
on, decide and resolve land disputes
(Sec. 2, P.D. No. 832) were all assumed
by it. The said Executive Order No. 561
containing said provision, being enacted
only on September 21, 1979, cannot
affect the exercise of jurisdiction of the
PACLAP Provincial Committee of
Koronadal on September 20, 1978.
Neither can it affect the decision of the
COSLAP which merely affirmed said
exercise of jurisdiction.34
In its Motion for Reconsideration35 filed
on May 20, 2004, the BCDA questioned
the validity of the survey results since it
was
conducted
without
its
representatives present, at the same
time denying that it received a
notification of the DENR verification

survey.36 It maintained that there is no

basis for the COSLAPs finding that the
members of Dream Village were in open,
continuous, and adverse possession in
the concept of owner, because not only
is the property not among those
declared alienable and disposable, but it
is a titled patrimonial property of the
State.37
In the Order38 dated June 17, 2004, the
COSLAP denied BCDAs Motion for
Reconsideration, insisting that it had
due notice of the verification survey,
while also noting that although the
BCDA wanted to postpone the
verification survey due to its tight
schedule, it actually stalled the survey
when it failed to suggest an alternative
survey date to ensure its presence.
CA Ruling
On Petition for Review 39 to the CA, the
BCDA argued that the dispute is outside
the jurisdiction of the COSLAP because
of the lands history of private
ownership and because it is registered
under an indefeasible Torrens title40;
that Proclamation No. 172 covers only
Lots 1 and 2 of Swo-13-000298 in
Western Bicutan, whereas Dream
Village occupies Lots 10, 11 and part of
13 of Swo-00-0001302, which also
belongs to the BCDA 41; that the
COSLAP resolution is based on an
erroneous DENR report stating that
Dream Village is outside of BCDA,
because Lots 10, 11, and portion of Lot
13 of Swo-00-0001302 are within the
DA42; that the COSLAP was not justified
in ignoring BCDAs request to postpone
the survey to the succeeding year
because
the
presence
of
its
representatives in such an important
verification survey was indispensable for
the impartiality of the survey aimed at
resolving a highly volatile situation 43;
that the COSLAP is a mere coordinating
administrative agency with limited

jurisdiction44; and, that the present case

is not among those enumerated in
Section 3 of E.O. No. 56145.
The COSLAP, on the other hand,
maintained that Section 3(2)(e) of E.O.
No. 561 provides that it may assume
jurisdiction and resolve land problems
or disputes in "other similar land
problems of grave urgency and
magnitude,"46 and the present case is
one such problem.
The CA in its Decision 47 dated
September 10, 2009 ruled that the
COSLAP has no jurisdiction over the
complaint because the question of
whether Dream Village is within the
areas declared as available for
disposition in Proclamation No. 172 is
beyond its competence to determine,
even as the land in dispute has been
under a private title since 1906, and
presently its title is held by a
government agency, the BCDA, in
contrast to the case of Baaga relied
upon by Dream Village, where the
disputed land was part of the public
domain and the disputants were
applicants for sales patent thereto.
Dream
Villages
motion
for
reconsideration was denied in the
appellate courts Order48 of July 13,
2010.
Petition for Review in the Supreme
Court
On petition for review on certiorari to
this Court, Dream Village interposes the
following issues:
A
IN ANNULLING THE RESOLUTION
OF COSLAP IN COSLAP CASE NO. 99500, THE HONORABLE CA DECIDED
THE CASE IN A MANNER NOT
CONSISTENT WITH LAW AND
APPLICABLE DECISIONS OF THIS
HONORABLE COURT;
B

THE HONORABLE CA ERRED IN

RULING THAT COSLAP HAD NO
JURISDICTION
OVER
THE
CONTROVERSY
BETWEEN
THE
PARTIES HEREIN.49
The Courts Ruling
We find no merit in the petition.
The BCDA holds title to Fort Bonifacio.
That the BCDA has title to Fort
Bonifacio has long been decided with
finality. In Samahan ng Masang Pilipino
sa Makati, Inc. v. BCDA,50 it was
categorically ruled as follows:
First, it is unequivocal that the
Philippine Government, and now the
BCDA, has title and ownership over Fort
Bonifacio. The case of Acting Registrars
of Land Titles and Deeds of Pasay City,
Pasig and Makati is final and conclusive
on the ownership of the then Hacienda
de Maricaban estate by the Republic of
the Philippines. Clearly, the issue on the
ownership of the subject lands in Fort
Bonifacio is laid to rest. Other than their
view that the USA is still the owner of
the subject lots, petitioner has not put
forward any claim of ownership or
interest in them.51
The facts in Samahan ng Masang
Pilipino sa Makati are essentially not
much different from the controversy
below. There, 20,000 families were
long-time residents occupying 98 has. of
Fort Bonifacio in Makati City, who
vainly sought to avert their eviction and
the demolition of their houses by the
BCDA upon a claim that the land was
owned by the USA under TCT No. 2288.
The Supreme Court found that TCT No.
2288 had in fact been cancelled by TCT
No. 61524 in the name of the Republic,
which title was in turn cancelled on
January 3, 1995 by TCT Nos. 23888,
23887, 23886, 22460, 23889, 23890,
and 23891, all in the name of the BCDA.
The Court ruled that the BCDAs
aforesaid titles over Fort Bonifacio are

valid, indefeasible and beyond question,

since TCT No. 61524 was cancelled in
favor of BCDA pursuant to an explicit
authority under R.A. No. 7227, the legal
basis for BCDAs takeover and
management of the subject lots.52
Dream
Village
sits
on
the
abandoned C-5 Road, which lies
outside
the
area
declared
in
Proclamation Nos. 2476 and 172 as
alienable and disposable.
Pursuant to Proclamation No. 2476, the
following surveys were conducted by the
Bureau of Lands to delimit the
boundaries of the areas excluded from
the coverage of Proclamation No. 423:
Barangay Survey Plan Date Approved
1. Lower Bicutan SWO-13-000253
October 21, 1986
2. Signal Village SWO-13-000258 May
13, 1986
3. Upper Bicutan SWO-13-000258 May
13, 1986
4. Western Bicutan SWO-13-000298
January 15, 198753
However, the survey plan for Western
Bicutan, Swo-13-000298, shows that
Lots 3, 4, 5 and 6 thereof are inside the
area segregated for the Libingan ng mga
Bayani under Proclamation No. 208,
which then leaves only Lots 1 and 2 of
Swo-13-000298
as
available
for
disposition. For this reason, it was
necessary to amend Proclamation No.
2476. Thus, in Proclamation No. 172
only Lots 1 and 2 of Swo-13-000298 are
declared alienable and disposable.54
The DENR verification survey report
states that Dream Village is not situated
in Lot 1 of Swo-13-000298 but actually
occupies Lots 10, 11 and part of 13 of
Swo-00-0001302: "x x x Dream Village
is outside Lot1, SWO-13-000298 and
inside Lot 10, 11 & portion of Lot 13,
SWO-00-0001302 with an actual area of
78466 square meters. The area is
actually is [sic] outside SWO-00-

0001302 of BCDA."55 Inexplicably and

gratuitously, the DENR also states that
the area is outside of BCDA, completely
oblivious that the BCDA holds title over
the entire Fort Bonifacio, even as the
BCDA asserts that Lots 10, 11 and 13 of
SWO-00-0001302 are part of the
abandoned right-of-way of C-5 Road.
This area is described as lying north of
Lot 1 of Swo-13-000298 and of Lots 3, 4,
5 and 6 of Swo-13-000298 (Western
Bicutan) inside the Libingan ng mga
Bayani, and the boundary line of Lot 1
mentioned as C-5 Road is really the
proposed alignment of C-5 Road, which
was abandoned when, as constructed, it
was made to traverse northward into the
Libingan ng mga Bayani. Dream Village
has not disputed this assertion.
The mere fact that the original plan for
C-5 Road to cross Swo-00-0001302 was
abandoned by deviating it northward to
traverse the southern part of Libingan
ng mga Bayani does not signify
abandonment by the government of the
bypassed lots, nor that these lots would
then become alienable and disposable.
They remain under the title of the
BCDA, even as it is significant that
under Section 8(d) of R.A. No. 7227, a
relocation site of 30.5 has. was to be
reserved for families affected by the
construction of C-5 Road. It is nowhere
claimed that Lots 10, 11 and 13 of Swo00-0001302 are part of the said
relocation site. These lots border C-5
Road in the south,56making them
commercially valuable to BCDA, a
farther argument against a claim that
the government has abandoned them to
Dream Village.
While property of the State or any
of its subdivisions patrimonial in
character may be the object of
prescription, those "intended for
some public service or for the
development
of
the
national

wealth" are considered property of

public dominion and therefore not
susceptible
to
acquisition
by
prescription.
Article 1113 of the Civil Code provides
that "property of the State or any of its
subdivisions
not
patrimonial
in
character shall not be the object of
prescription." Articles 420 and 421
identify what is property of public
dominion and what is patrimonial
property:
Art. 420. The following things are
property of public dominion:
(1) Those intended for public use, such
as roads, canals, rivers, torrents, ports
and bridges constructed by the State,
banks, shores, roadsteads, and others of
similar character;
(2) Those which belong to the State,
without being for public use, and are
intended for some public service or for
the development of the national wealth.
Art. 421. All other property of the State,
which is not of the character stated in
the preceding article, is patrimonial
property.
One question laid before us is whether
the area occupied by Dream Village is
susceptible
of
acquisition
by
prescription. In Heirs of Mario
Malabanan v. Republic,57 it was pointed
out that from the moment R.A. No. 7227
was enacted, the subject military lands
in Metro Manila
became alienable and disposable.
However, it was also clarified that the
said lands did not thereby become
patrimonial, since the BCDA law makes
the express reservation that they are to
be sold in order to raise funds for the
conversion of the former American
bases in Clark and Subic. The Court
noted that the purpose of the law can be
tied to either "public service" or "the
development of national wealth" under
Article 420(2) of the Civil Code, such

that the lands remain property of the

public dominion, albeit their status is
now alienable and disposable. The Court
then explained that it is only upon their
sale to a private person or entity as
authorized by the BCDA law that they
become private property and cease to be
property of the public dominion:58
For as long as the property belongs to
the State, although already classified as
alienable or disposable, it remains
property of the public dominion if when
it is "intended for some public service or
for the development of the national
wealth."59
Thus, under Article 422 of the Civil
Code, public domain lands become
patrimonial property only if there is a
declaration that these are alienable or
disposable, together with an express
government manifestation that the
property is already patrimonial or no
longer retained for public service or the
development of national wealth. Only
when the property has become
patrimonial can the prescriptive period
for the acquisition of property of the
public dominion begin to run. Also
under Section 14(2) of Presidential
Decree (P.D.) No. 1529, it is provided
that before acquisitive prescription can
commence, the property sought to be
registered must not only be classified as
alienable and disposable, it must also be
expressly declared by the State that it is
no longer intended for public service or
the development of the national wealth,
or that the property has been converted
into patrimonial. Absent such an express
declaration by the State, the land
remains to be property of public
dominion.60
Since the issuance of Proclamation No.
423 in 1957, vast portions of the former
Maricaban have been legally disposed to
settlers, besides those segregated for
public or government use. Proclamation

No. 1217 (1973) established the

Maharlika Village in Bicutan, Taguig to
serve the needs of resident Muslims of
Metro Manila; Proclamation No. 2476
(1986), as amended by Proclamation No.
172 (1987), declared more than 400 has.
of Maricaban in Upper and Lower
Bicutan, Signal Village, and Western
Bicutan as alienable and disposable;
Proclamation No. 518 (1990) formally
exempted from Proclamation No. 423
the Barangays of Cembo, South Cembo,
West Rembo, East Rembo, Comembo,
Pembo and Pitogo, comprising 314 has.,
and declared them open for disposition.
The
above
proclamations
notwithstanding, Fort Bonifacio remains
property of public dominion of the State,
because although declared alienable and
disposable, it is reserved for some public
service or for the development of the
national wealth, in this case, for the
conversion of military reservations in
the country to productive civilian
uses.61 Needless to say, the acquisitive
prescription asserted by Dream Village
has not even begun to run.
Ownership of a land registered
under a Torrens title cannot be lost
by
prescription
or
adverse
possession.
Dream Village has been unable to
dispute BCDAs claim that Lots 10, 11
and part of 13 of Swo-00-0001302 are
the abandoned right-of-way of C-5
Road, which is within the vast titled
territory of Fort Bonifacio. We have
already established that these lots have
not been declared alienable and
disposable under Proclamation Nos.
2476 or 172.
Moreover, it is a settled rule that lands
under a Torrens title cannot be acquired
by
prescription
or
adverse
possession.62 Section 47 of P.D. No.
1529, the Property Registration Decree,
expressly provides that no title to

registered land in derogation of the title

of the registered owner shall be acquired
by prescription or adverse possession.
And, although the registered landowner
may still lose his right to recover the
possession of his registered property by
reason of laches,63 nowhere has Dream
Village alleged or proved laches, which
has been defined as such neglect or
omission to assert a right, taken in
conjunction with lapse of time and other
circumstances causing prejudice to an
adverse party, as will operate as a bar in
equity. Put any way, it is a delay in the
assertion of a right which works
disadvantage to another because of the
inequity founded on some change in the
condition or relations of the property or
parties. It is based on public policy
which, for the peace of society, ordains
that relief will be denied to a stale
demand which otherwise could be a
valid claim.64
The subject property having been
expressly reserved for a specific
public
purpose,
the
COSLAP
cannot exercise jurisdiction over the
complaint of the Dream Village
settlers.
BCDA has repeatedly asserted that the
COSLAP has no jurisdiction to hear
Dream Villages complaint. Concurring,
the CA has ruled that questions as to the
physical identity of Dream Village and
whether it lies in Lots 10, 11 and 13 of
Swo-00-0001302,
or
whether
Proclamation No. 172 has released the
disputed area for disposition are issues
which are "manifestly beyond the scope
of the COSLAPs jurisdiction vis--vis
Paragraph 2, Section 3 of E.O. No.
561,"65 rendering its Resolution a patent
nullity and its pronouncements void.
Thus, the CA said, under Section 3 of
E.O. No. 561, the COSLAPs duty would
have been to refer the conflict to another
tribunal or agency of government in

view of the serious ramifications of the

disputed claims:
In fine, it is apparent that the COSLAP
acted outside its jurisdiction in taking
cognizance of the case. It would have
been more prudent if the COSLAP has
[sic] just referred the controversy to the
proper forum in order to fully thresh out
the ramifications of the dispute at bar.
As it is, the impugned Resolution is a
patent nullity since the tribunal which
rendered it lacks jurisdiction. Thus, the
pronouncements contained therein are
void. "We have consistently ruled that a
judgment for want of jurisdiction is no
judgment at all. It cannot be the source
of any right or the creator of any
obligation. All acts performed pursuant
to it and all claims emanating from it
have no legal effect."66 (Citation omitted)
We add that Fort Bonifacio has been
reserved for a declared specific public
purpose under R.A. No. 7227, which
unfortunately for Dream Village does
not encompass the present demands of
its members. Indeed, this purpose was
the very reason why title to Fort
Bonifacio has been transferred to the
BCDA, and it is this very purpose which
takes the dispute out of the direct
jurisdiction of the COSLAP. A review of
the history of the COSLAP will readily
clarify that its jurisdiction is limited to
disputes over public lands not reserved
or declared for a public use or purpose.
On July 31, 1970, President Marcos
issued E.O. No. 251 creating the
Presidential Action Committee on Land
Problems (PACLAP) to expedite and
coordinate the investigation and
resolution of all kinds of land disputes
between settlers, streamline and shorten
administrative procedures, adopt bold
and decisive measures to solve land
problems,
or
recommend
other
solutions.67 E.O. No. 305, issued on
March 19, 1971, reconstituted the

PACLAP and gave it exclusive

jurisdiction over all cases involving
public lands and other lands of the
public domain,68 as well as adjudicatory
powers phrased in broad terms: "To
investigate, coordinate, and resolve
expeditiously land disputes, streamline
administrative proceedings, and, in
general, to adopt bold and decisive
measures to solve problems involving
public lands and lands of the public
domain."69
On November 27, 1975, P.D. No. 832
reorganized the PACLAP and enlarged
its functions and duties. Section 2
thereof even granted it quasi judicial
functions, to wit:
Sec. 2. Functions and duties of the
PACLAP. The PACLAP shall have the
following functions and duties:
1. Direct and coordinate the activities,
particularly the investigation work, of
the various government agencies and
agencies involved in land problems or
disputes, and streamline administrative
procedures to relieve small settlers and
landholders and members of cultural
minorities of the expense and timeconsuming delay attendant to the
solution of such problems or disputes;
2. Refer for immediate action any land
problem or dispute brought to the
attention of the PACLAP, to any
member agency having jurisdiction
thereof: Provided, That when the
Executive Committee decides to act on a
case, its resolution, order or decision
thereon shall have the force and effect of
a regular administrative resolution,
order or decision, and shall be binding
upon the parties therein involved and
upon the member agency having
jurisdiction thereof;
xxxx
4. Evolve and implement a system of
procedure for the speedy investigation
and resolution of land disputes or

problems at provincial level, if possible.

(Underscoring supplied)
On September 21, 1979, E.O. No. 561
abolished the PACLAP and created the
COSLAP to be a more effective
administrative body to provide a
mechanism
for
the
expeditious
settlement of land problems among
small settlers, landowners and members
of the cultural minorities to avoid social
unrest.70 Paragraph 2, Section 3 of E.O
No. 561 now specifically enumerates the
instances when the COSLAP can
exercise its adjudicatory functions:
Sec. 3. Powers and Functions. The
Commission shall have the following
powers and functions:
1. Coordinate the activities, particularly
the investigation work, of the various
government offices and agencies
involved in the settlement of land
problems or disputes, and streamline
administrative procedures to relieve
small settlers and landholders and
members of cultural minorities of the
expense and time consuming delay
attendant to the solution of such
problems or disputes;
2. Refer and follow-up for immediate
action by the agency having appropriate
jurisdiction any land problem or dispute
referred to the Commission: Provided,
That the Commission may, in the
following cases, assume jurisdiction and
resolve land problems or disputes which
are critical and explosive in nature
considering, for instance, the large
number of the parties involved, the
presence or emergence of social tension
or unrest, or other similar critical
situations requiring immediate action:
(a) Between occupants/squatters and
pasture lease agreement holders or
timber concessionaires;
(b) Between occupants/squatters and
government reservation grantees;

(c) Between occupants/squatters and

public land claimants or applicants;
(d) Petitions for classification, release
and/or subdivision of lands of the public
domain; and
(e) Other similar land problems of grave
urgency and magnitude.
xxxx
Citing the constant threat of summary
eviction and demolition by the BCDA
and the seriousness and urgency of the
reliefs sought in its Amended Petition,
Dream Village insists that the COSLAP
was justified in assuming jurisdiction of
COSLAP Case No. 99-500. But in
Longino v. Atty. General,71 it was held
that as an administrative agency,
COSLAPs jurisdiction is limited to cases
specifically mentioned in its enabling
statute, E.O. No. 561. The Supreme
Court said:
Administrative agencies, like the
COSLAP, are tribunals of limited
jurisdiction and, as such, could wield
only such as are specifically granted to
them by the enabling statutes. x x x.
xxxx
Under the law, E.O. No. 561, the
COSLAP has two options in acting on a
land dispute or problem lodged before
it, namely, (a) refer the matter to the
agency having appropriate jurisdiction
for settlement/resolution; or (b) assume
jurisdiction if the matter is one of those
enumerated in paragraph 2(a) to (e) of
the law, if such case is critical and
explosive in nature, taking into account
the large number of the parties involved,
the presence or emergence of social
tension or unrest, or other similar
critical situations requiring immediate
action. In resolving whether to assume
jurisdiction over a case or to refer the
same
to
the
particular
agency
concerned, the COSLAP has to consider
the nature or classification of the land
involved, the parties to the case, the

nature of the questions raised, and the

need for immediate and urgent action
thereon to prevent injuries to persons
and damage or destruction to property.
The law does not vest jurisdiction on the
COSLAP over any land dispute or
problem.72(Citation omitted)
The
Longino
ruling
has
been
consistently
cited
in
subsequent
COSLAP cases, among them Davao New
Town
Development
Corp.
v.
COSLAP,73 Barranco v. COSLAP,74 NHA
v.
COSLAP,75 Cayabyab
v.
de
Aquino,76 Ga,
Jr.
v.
Tubungan,77 Machado v. Gatdula,78 and
Vda. de Herrera v. Bernardo.79
Thus, in Machado, it was held that the
COSLAP cannot invoke Section 3(2)(e)
of E.O. No. 561 to assume jurisdiction
over "other similar land problems of
grave urgency," since the statutory
construction principle of ejusdem
generis prescribes that where general
words follow an enumeration of persons
or things, by words of a particular and
specific meaning, such general words
are not to be construed in their widest
extent but are to be held as applying
only to persons or things of the same
kind
as
those
specifically
mentioned.80 Following
this
rule,
COSLAPs jurisdiction is limited to
disputes involving lands in which the
government has a proprietary or
regulatory interest,81 or public lands
covered with a specific license from the
government such as a pasture lease
agreements, a timber concessions, or a
reservation
grants,82 and
where
moreover, the dispute is between
occupants/squatters and pasture lease
agreement
holders
or
timber
concessionaires;
between
occupants/squatters and government
reservation grantees; and between
occupants/squatters and public land
claimants or applicants.

In Longino, the parties competed to

lease a property of the Philippine
National Railways. The high court
rejected COSLAPs jurisdiction, noting
that the disputed lot is not public land,
and neither party was a squatter, patent
lease agreement holder, government
reservation
grantee,
public
land
claimant or occupant, or a member of
any cultural minority, nor was the
dispute critical and explosive in nature
so as to generate social tension or
unrest, or a critical situation which
required immediate action.83
In Davao New Town Development
Corp., it was held that the COSLAP has
no concurrent jurisdiction with the
Department of Agrarian Reform (DAR)
in respect of disputes concerning the
implementation of agrarian reform laws,
since "the grant of exclusive and primary
jurisdiction over agrarian reform
matters on the DAR implies that no
other court, tribunal, or agency is
authorized to resolve disputes properly
cognizable by the DAR."84 Thus, instead
of hearing and resolving the case,
COSLAP should have simply referred
private respondents complaint to the
DAR or DARAB. According to the Court:
The abovementioned proviso Section (3)
(2) of E.O. No. 561, which vests COSLAP
the power to resolve land disputes, does
not confer upon COSLAP blanket
authority to assume every matter
referred to it. Its jurisdiction is confined
only to disputes over lands in which the
government
has
proprietary
or
regulatory interest. Moreover, the land
dispute in Baaga involved parties with
conflicting free patent applications
which was within the authority of
PACLAP to resolve, unlike that of the
instant case which is exclusively
cognizable by the DAR.85
In Barranco, COSLAP issued a writ to
demolish structures encroaching into

private property.1wphi1 The Supreme

court ruled that COSLAP may resolve
only land disputes "involving public
lands or lands of the public domain or
those covered with a specific license
from the government such as a pasture
lease agreement, a timber concession, or
a reservation grant."86
In NHA, it was held that COSLAP has no
jurisdiction over a boundary dispute
between two local government units,
that its decision is an utter nullity
correctible by certiorari, that it can
never become final and any writ of
execution based on it is void, and all acts
performed pursuant to it and all claims
emanating from it have no legal effect.87
In Cayabyab, it was held that "the
jurisdiction of COSLAP does not extend
to disputes involving the ownership of
private lands, or those already covered
by a certificate of title, as these fall
exactly within the jurisdiction of the
courts
and
other
administrative
agencies."88
In Ga, Jr., it was reiterated that the
COSLAP has no jurisdiction over
controversies relating to ownership and
possession of private lands, and thus,
the failure of respondents to properly
appeal from the COSLAP decision before
the appropriate court was held not fatal
to the petition for certiorari that they
eventually filed with the CA. The latter
remedy remained available despite the
lapse of the period to appeal from the
void COSLAP decision.89
In Machado, the high court ruled that
COSLAP has no jurisdiction in disputes
over private lands between private
parties, reiterating the essential rules
contained in Section 3 of E.O. No. 561
governing the exercise by COSLAP of its
jurisdiction, to wit:
Under these terms, the COSLAP has two
different rules in acting on a land
dispute or problem lodged before it, e.g.,

COSLAP can assume jurisdiction only if

the matter is one of those enumerated in
paragraph 2(a) to (e) of the law.
Otherwise, it should refer the case to the
agency having appropriate jurisdiction
for settlement or resolution. In resolving
whether to assume jurisdiction over a
case or to refer it to the particular
agency
concerned,
the
COSLAP
considers: (a) the nature or classification
of the land involved; (b) the parties to
the case; (c) the nature of the questions
raised; and (d) the need for immediate
and urgent action thereon to prevent
injury to persons and damage or
destruction to property. The terms of the
law clearly do not vest on the COSLAP
the general power to assume jurisdiction
over any land dispute or problem. Thus,
under EO 561, the instances when the
COSLAP may resolve land disputes are
limited only to those involving public
lands or those covered by a specific
license from the government, such as
pasture lease agreements, timber
concessions,
or
reservation
grants.90 (Citations omitted)
In Vda. de Herrera, the COSLAP
assumed jurisdiction over a complaint
for "interference, disturbance, unlawful
claim, harassment and trespassing" over
a private parcel of land. The CA ruled
that the parties were estopped to
question COSLAPs jurisdiction since
they participated actively in the
proceedings. The Supreme Court, noting
from the complaint that the case actually
involved a claim of title and possession
of private land, ruled that the RTC or the
MTC has jurisdiction since the dispute
did not fall under Section 3, paragraph 2
(a) to (e) of E.O. No. 561, was not critical
and explosive in nature, did not involve
a large number of parties, nor was there
social tension or unrest present or
emergent.91

In the case at bar, COSLAP has invoked

Baaga to assert its jurisdiction. There,
Guillermo Baaga had filed a free patent
application with the Bureau of Lands
over a public land with an area of 30
has. Gregorio Daproza (Daproza) also
filed a patent application for the same
property. The opposing claims and
protests of the claimants remained
unresolved by the Bureau of Lands, and
neither did it conduct an investigation.
Daproza wrote to the COSLAP, which
then opted to exercise jurisdiction over
the controversy. The high court
sustained COSLAP, declaring that its
jurisdiction is not confined to the cases
mentioned in paragraph 2(a) to (e) of
E.O. No. 561, but includes land
problems in general, which are
frequently the source of conflicts among
settlers, landowners and cultural
minorities.
But as the Court has since clarified in
Longino and in the other cases
aforecited, the land dispute in Baaga
was between private individuals who
were free patent applicants over
unregistered public lands. In contrast,
the present petition involves land titled
to and managed by a government agency
which has been expressly reserved by
law for a specific public purpose other
than for settlement. Thus, as we have
advised in Longino, the law does not
vest jurisdiction on the COSLAP over
any land dispute or problem, but it has
to consider the nature or classification of
the land involved, the parties to the case,
the nature of the questions raised, and
the need for immediate and urgent
action thereon to prevent injuries to
persons and damage or destruction to
property.
WHEREFORE, premises considered, the
petition is DENIED.
SO ORDERED.

G.R. No. 175177

October 24,
2012
REPUBLIC
OF
THE
PHILIPPINES, Petitioner,
vs.
GLORIA JARALVE substituted by
ALAN
JESS
JARALVE
DOCUMENTO, JR., EDGARDO
JARALVE, SERAFIN UY, JR.,
SHELLA UY, NIMFA LAGNADA,
PANTALEON SAY A-ANG, STARG
LAD
INTERNATIONAL
AND
DEVELOPMENT CORPORATION,
ANNIE
TAN,
TEOTIMO
CABARRUBIAS,
JESSICA
DACLAN, MA. EMMA RAMAS,
DANILO
DEEN,
and
ERIC
ANTHONY DEEN. Respondents.
DECISION
LEONARDO-DE CASTRO, J.:
This is a Petition for Review on
Certiorari1 assailing the June 28, 2006
Decision2 and
October
27,
2006
Resolution3 of the Court of Appeals in
CA-G.R. CV No. 78633, which affirmed
the November 15, 2002 Decision4of the
Regional Trial Court (RTC), Branch 20,
Cebu City, in Land Registration Case No.
1421-N/LRA Rec. No. N-67272.
On
October
22,
1996,
Gloria
Jaralve,5 Edgardo Jaralve, Serafin Uy,
Jr., Shella Uy, Nimfa Lagnada,
Pantaleon
Saya-Ang,
Starglad
International
and
Development
Corporation, Annie Tan, Teotimo
Cabarrubias, Jessica Daclan, and Ma.
Emma Ramas filed an Application 6 with
Branch 20 of the RTC of Cebu City, for
the registration in their names of Lot
Sgs-07-000307
(subject
property),
under Presidential Decree No. 1529. On
November 29, 1996 and November 7,
1997, they filed their Amended 7 and
Second
Amended8 Applications,
respectively, to conform to the
procedural requirements of the law, as
per Order9 of the RTC, and to join

Danilo Deen and Eric Anthony Deen as

applicants10 (for brevity, we will refer to
all the foregoing applicants as
respondents). This was docketed as LRC
Case No. 1421-N/LRA Rec. No. N-67272.
In their original and amended
applications, respondents declared that
they were the co-owners in fee simple of
the subject property, a parcel of land
with an area of 731,380 square meters,
belonging to Cadastral Lot 18590, and
situated in Barangay Quiot, City of Cebu,
and all the improvements thereon. They
alleged that they occupied the subject
property and to the best of their
knowledge, there was no mortgage or
encumbrance affecting it, and no one
was in possession thereof.11 Respondents
further averred that the subject property
was not covered by any certificate of title
or any pending case before the RTC of
Cebu City.12 Respondents also identified
the names and complete postal
addresses of the owners of the adjoining
lots.13
The respondents claimed that they had
acquired ownership over the subject
property by way of purchase from
predecessors-in-interest who had been
in continuous, open, adverse, public,
uninterrupted, exclusive, and notorious
possession thereof for more than thirty
(30) years, or from June 12, 1945.14
In support of their application,
respondents submitted the following:
1. Sepia Plan;15
2. Blue Print Copy of Survey Plan;16
3. Technical Description of SGS-07000307;17
4. Geodetic Engineers Certificate (of the
survey of the subject property);18
5.
Certificate
of
Community
Environment and Natural Resources
Office (CENRO) dated March 20, 1996,
signed by CENR and Provincial
Environmental and Natural Resources
(PENR) Officers (CENRO Certificate)

that the subject property is within the

alienable and disposable portion of Lot
18590;19
6. Deeds of Sale;20
7. Tax Clearances;21 and
8. Department of Environment and
Natural Resources (DENR), Region 7
Certification that subject property is not
covered by any subsisting land
application.22
The respondents application was
opposed by the following parties:
1. Gertrudes N. Tabanas-Singson,
Lourdes N. Tabanas, Francisco N.
Tabanas, Vicente N. Tabanas, Heirs of
Enrique N. Tabanas, Heirs of Mercedes
N. Tabanas-Raganas, and Heirs of
Primitiva N. Tabanas-Nadera, who
claimed that they owned portions of the
subject property, containing an area of
406,810 square meters, as described and
bounded under Tax Declaration No.
97GR-11-075-00581, issued in the name
of their father Agaton Tabanas; and that
they and their predecessors-in-interest
had been in peaceful, open, continuous,
exclusive, and notorious possession and
occupation of their alleged property
since time immemorial. They prayed
that the respondents application be
dismissed with respect to the portion
they were claiming, and that their title
be confirmed (Opposition was filed on
March 3, 1997).23
2. Petitioner Republic of the Philippines,
represented by the Director of Lands,
who argued that: a) neither the
respondents nor their predecessors-ininterest had been in open, continuous,
exclusive, and notorious possession and
occupation of the subject property since
June 12, 1945 or prior thereto; b) that
the muniments of title and/or the tax
declarations and tax payment receipts
submitted in evidence appeared to be of
recent vintage and did not constitute
competent and sufficient proof of a bona

fide acquisition of the subject property;

c) that the period for an application
based on a Spanish title or grant had
already lapsed; and d) that the subject
property was part of the public domain,
which belonged to the State and not
subject
to
private
appropriation
(Opposition was filed on March 4,
1997).24
3. The Aznar Brothers Realty Co. and
Aznar Enterprises, Inc., that opposed
the application insofar as it might affect
the fifteen-hectare portion they claimed
and owned (Opposition was filed on
March 7, 1997).25
4. Ponciano Tabanas Ybiernas, for
himself and for the other heirs of
Esteban Tabanas and Ciriaca Gabuya,
who alleged that he, his co-owners, and
their predecessors-in-interest, had been
occupying portions of the subject
property in the concept of owners,
exclusively, openly, continuously, and
peacefully for many years. He prayed
that the respondents application for
registration be denied with respect to
the portions he and his co-owners
claimed (Opposition was filed on March
10, 1997).26
5. Rufina and Julia Ragasajo, who
contended
that
the
respondents
application was without legal basis as
the respondents were not the true
owners of the subject property, which
also encroached on their own land
(Opposition was filed on March 10,
1997).27
6. The National Power Corporation
(NPC), that opposed the respondents
application with respect to a six-hectare
portion of the subject property. NPC
alleged that it was in the process of
finalizing with DENR its permit/grant to
occupy as a substation office, six
hectares of the subject property, which
was a public forest land in Antuanga
Hills, Quiot, Pardo, Cebu City. NPC

added that the grant of respondents

application would cause the government
great prejudice (Opposition was filed on
March 11, 1997).28
7. Amelia and Delia Dionaldo, who
opposed the respondents application on
the ground that they had interests in the
subject property (Opposition was filed
on March 11, 1997).29
8. Jeremias L. Dolino, in his official
capacity as Regional Executive Director
of the DENR, Region VII, Banilad,
Mandaue City, who averred that the
subject property fell within Timberland
Block 3-C and was within the Cebu City
Reforestation project, formerly known
as
the
Osmea
Reforestation
Project.30 Dolino said that there was an
implied admission on the part of the
respondents of this assertion as their
predecessors-in-interest had previously
filed a Petition for Reclassification of
Land31 of the subject property before the
DENR. Dolino added that the CENRO
Certificate relied on by the respondents
was
discovered
to
have
been
inadvertently and erroneously issued as
it was based on a mistaken projection
(Opposition was filed on April 10,
1997).32 The CENRO Certificate was
subsequently recalled, cancelled, and
revoked by the Regional Executive
Director of DENR via a Memorandum
dated March 12, 1998.33
During the trial, respondents presented
the testimony of the following witnesses
in support of their application:
Estanislao Nacorda, Leoncio Llamedo,
Rodolfo Amancia, Melecio Joboneita,
Regino Gabuya, Constancio Llamedo,
Teotimo Cabarrubias, Andres Alfanta,
Efren Binolirao, Sergio Paran, Gloria
Jaralve, Ma. Emma Ramas, Shella Uy
Coca, Danilo Deen, and Edgardo
Jaralve.34
The foregoing witnesses testified on how
the
respondents
acquired
their

respective portions of the subject

property and how they and their
predecessors-in-interest had been in
actual, open, continuous, exclusive,
peaceful, and notorious possession and
occupation of the subject property in the
concept of owners since before the war
and for more than 30 years.35
The respondents also presented Forester
III Anastacio Cabalejo, a duly licensed
and registered forester connected with
the CENRO, and Geodetic Engineer
Celso P. Mayol, the CENRO-DENR Chief
of Survey Unit to testify that upon the
request of Carmelina Cuizon, one of the
predecessors-in-interest
of
the
respondents, they, with other members
of the Land Evaluation Party of the
Bureau
of
Forestry,
using
Administrative Order No. 4-642 and the
Bureau of Forestry Land Classification
Map No. 2124 as references, conducted
an actual survey of Cadastral Lot 18590
on November 4, 1995, and found that
the subject property was within its
alienable
and
disposable
portion.36 Engineer
Mayol
further
testified that in connection with the
foregoing survey, he had prepared a
plan,37 which was the subject of the
CENRO Certificate made at its dorsal
side.
Forestry Administrative Order No. 4642 dated July 31, 1957 declared certain
portions of the public domain situated in
Cebu City under Project No. 3-C as
alienable and disposable lands. The
Bureau of Forestry Land Classification
Map No. 212438 contains the bearings
and distances of the areas in Cebu City
declared as alienable and disposable
lands.39
Finding
the
testimonial
and
documentary
evidence
of
the
respondents sufficient to show that they
had acquired ownership over the subject
property, the RTC ruled in their favor in

its Decision dated November 15, 2002.

The dispositive portion reads:
WHEREFORE, from all the foregoing
undisputed facts supported by oral and
documentary evidence, the Court finds
and so holds that the applicants have a
registerable title to the parcel of land
herein applied for original registration
of title, and thereby confirming the same
and ordering its registration under CA
141, as amended by Presidential Decree
No. 1529 over the land, denominated as
SGS-07-000307, in accordance with the
respective technical descriptions of
herein applicants.
Once this decision becomes final, let the
decree and original certificate of title be
issued in the names of the applicants as
follows:
Names
(addresses deleted)

1. GLORIA JARALVE
2.
EDGARDO
JARALVE
3. SERAFIN UY, JR.
4. SHELLA UY
5.NIMFA LAGNADA
6.
PANTALEON
SAYA-ANG
7. ATTY. DANILO
DEEN
AND
ZENAIDA DEEN
8. ERIC ANTHONY
DEEN
9.
MA.
RAMAS

EMMA

10.
STARGLAD 82,0
INTERNATIONAL
square mete
AND
DEVELOPMENT
CORPORATION
11. ANNIE TAN

10,0
square mete

12.
TEOTIMO
5,0
CABARRUBIAS
square mete
13.
MA.
RAMAS
14.
DACLAN

EMMA 68,5
square mete
JESSICA

10,000
square
meters.40

The RTC held that according to

jurisprudence and under Section 48(b)
of Commonwealth Act No. 141 or the
Extent
of
Public
Land Act, as amended by
Interest
Republic Act No. 194241 and Republic
in Lot Sgs-07Act No. 3872,42 "alienable public land
000307
held by a possessor personally or
through his predecessors-in-interest,
74,940
openly, continuously, and exclusively for
square meters;
the prescribed period of 30 years x x x is
44,700
converted to private property by mere
square meters;
lapse or completion of said period ipso
jure, and without need of judicial or
61,210
other sanction, ceases to be public land
square meters;
and becomes private property."43
62,632
The RTC also granted Starglad
square meters;
International
and
Development
Corporations
application
despite the
26,972
constitutional
prohibition
on
acquisition
square meters;
of public lands of private corporations or
44,700
associations, explaining that such
square meters;
prohibition does not apply when the
corporations
predecessors-in 106,903
interesthad satisfied the requirements in
square meters;
acquiring ownership over public lands
before such land was transferred to the
110,660
corporation.44
square meters;
The RTC stated that the private
oppositors were not able to present any
23,060
convincing evidence and/or approved
square meters;

survey plan that clearly identified the

portions of the subject property they
were claiming.45 Likewise, the RTC held
that the DENR Region VII failed to
controvert the fact that the subject
property was within the alienable and
disposable portion of the public domain.
The RTC added that its witnesses did
not even conduct an actual relocation or
verification survey of the subject
property to determine its relative
position to the timberland area. Thus,
the RTC stated, the DENR Region VIIs
conclusion with respect to the subject
propertys position was inaccurate and
unreliable.46 In giving more credit to
respondents evidence, particularly the
CENRO Certificate, the RTC explained:
As against the approved plan of [the
subject property] which has been
thoroughly verified under the Land
Classification Map No. 2124 (Exhibit JNAMRIA) and which merely conformed
to the actual verification/relocation
surveys (Exhibits K, K-1) of the Land
Evaluation Party of CENRO and
PENRO, specifically conducted by
CENRO Chief of Survey Unit Engr. Celso
Mayol and the Chief of the Land
Evaluation Party Anastacio Cabalejo and
Forester Justicio Nahid (Exhibits L, L1), the relocation survey and map
prepared by Engineer Icoy are simply
undeserving of any weight. DENR-7
Regional Executive Director Jeremias
Dolino and Director Estanislao Galano
of the Regional Management Services of
DENR-7, themselves, admitted that the
task of determining whether a parcel of
land is within the alienable and
disposable area of the public domain
falls within the Land Evaluation Party of
the Forest Management Services of
CENRO and PENRO of the DENR. In
this case, the CENRO/PENRO Land
Evaluation Party headed by Forester
Anastacio Cabalejo, together with the

Chief of the Survey Unit of CENRO,

Engr. Celso Mayol, actually conducted a
segregation survey of Cadastral Lot
18590 on November 4, 1995 to
determine the alienable and disposable
portion of Cadastral Lot 18590 and on
the ground that they located three (3)
Forest Reserve (FR) monuments
marked as FR 67, FR 69 and FR 70.
Thus, after the said verification survey, a
survey plan was prepared by Engr. Celso
Mayol and at the back portion thereof,
he certified to the following, x x x.
xxxx
The [CENRO Certificate], having been
issued by the proper government
officers tasked with the duty of certifying
as to land classifications in the region,
the same should be given weight and
believed, especially so that the results of
the actual ground survey of
November 4, 1996 were re-verified and
re-checked upon the order of PENRO
Isabelo Montejo.47
The CENRO Certificate relied on by the
respondents and given much weight by
the RTC reads as follows:
Republic
of
the
Philippines
Department of Environment and
Natural
Resources
COMMUNITY ENVIRONMENT AND
NATURAL
RESOURCES
OFFICE
Cebu City
CENRO, Cebu City/Lands Verification
CARMELINA CUIZON, et al. (Cebu
City) March 20, 1996
CERTIFICATION
TO WHOM IT MAY CONCERN:
This is to certify that per projection and
verification conducted by Forester
Anastacio C. Cabalejo, a tract of land lot
No. 18590, Cebu Cadastre 12 Extension,
situated at Quiot, Pardo, Cebu City. As
shown and described in the Plan at the
back hereof, as surveyed by Geodetic
Engineer Celso P. Mayol for Carmelina

Cuizon, et al. The same was found as

here-under indicated:
Lot A containing an area of SEVEN
HUNDRED
THIRTY-SEVEN
THOUSAND THREE HUNDRED FIVE
(737, 305) square meters, more or less,
is within the Alienable and Disposable,
block-1, land classification project 3-C,
per Map 2124 of Cebu City. Certified
under Forestry Administrative Order
No. 4-642 dated July 31, 1957.
Lot B containing an area of TWO
HUNDRED SIX THOUSAND FIVE
HUNDRED FIFTY[-]TWO (206,552)
square meters, more or less, is within
the
Timberland
block-C,
land
classification project 3-C, per Map 2124
of Cebu City. Certified under Forestry
Administrative Order No. 4-642 dated
July 31, 1957.
This certification is issued upon the
request of the interested party for the
purpose of ascertaining the land
classification status only and does not
entitle him/her preferential priority
rights of possession until determined by
competent authorities.
[signed]
ILUMINADO
C.
Community
Environment
Natural Resources Officer

LUCAS
and

SWORNSTATEMENT
I, Anastacio C. Cabalejo, forest officer,
after having been duly sworn to under
oath according to the law do hereby
depose and say that I personally
projected and verified the area and the
result is the basis of the aforementioned
certification.
[signed]
ANASTACIO
C.
CABALEJO
FORESTER III
SUBSCRIBED AND SWORN to before
me
this
12[th]
day
of
April 1996, at Cebu City, Philippines.

[signed]
ILUMINADO
C.
LUCAS
Community
Environment
and
Natural Resources Officer48
Aggrieved, the petitioner and three of
the private oppositors appealed the
decision of the RTC to the Court of
Appeals in CA-G.R. CV No. 78633,
positing the following assignment of
errors:
1. Raised by private oppositors
Gertrudes N. Tabanas-Singson, Lourdes
N. Tabanas, Francisco N. Tabanas, and
Vicente N. Tabanas (Heirs of Agaton
Tabanas):
I.
THE LOWER COURT ERRED IN
HOLDING THAT APPLICANTS HAVE
A REGISTERABLE TITLE TO THE
PARCEL OF LAND HEREIN APPLIED
FOR ORIGINAL REGISTRATION OF
TITLE AND CONFIRMING THE SAME
AND ORDERING ITS REGISTRATION
UNDER CA 141, AS AMENDED BY P.D.
1529
OVER
THE
LAND
DENOMINATED AS SGS-07-000307,
IN
ACCORDANCE
WITH
THE
RESPECTIVE
TECHNICAL
DESCRIPTIONS.
II.
THE LOWER COURT ERRED IN
ORDERING
THAT
ONCE
THE
DECISION BECOMES FINAL, THE
DECREE
AND
ORIGINAL
CERTIFICATE OF TITLE BE ISSUED
IN THE NAME OF THE APPLICANTS x
x x.49
2. Raised by petitioner Republic of the
Philippines:
THE COURT A QUO ERRED IN
GRANTING
RESPONDENTSAPPLICATION
FOR
REGISTRATION DESPITE THE FACT
THAT THE AREA COVERED BY THE
APPLICATION IS CLASSIFIED AS
TIMBERLAND AND THEREFORE
UNALIENABLE.50

3. Raised by private oppositors Heirs of

Ponciano Ybiernas:
Error No. 1 That the trial court erred
in disposing all the area of Lot 18590 to
the [respondents], but none to the
oppositors-applicants, contrary to the
Magsaysay Credo: THAT THOSE WHO
HAVE LESS IN LIFE SHOULD HAVE
MORE IN LAW;
Error No. 2 That under Art. 24 of the
Civil Code, judges are enjoined by law to
protect the underdog, which provides as
follows:
"Art. 24. In all contractual, property or
other relations, when one of the parties
is at a disadvantage on account of his
moral
dependence,
ignorance,
indigence, mental weakness, tender age
or other handicap, the courts must be
vigilant for his protection."
Error No. 3 That none of the
respondents have complied with the
requirement as alluded to in Error No. 1,
which is the procurement of a permit
from the government agency in charge
of issuance of such permit, to occupy a
public land, duly endorsed by the DENR
official, but PONCIANO YBIERNAS has
duly complied with all the requirements,
plus possession of more than 30 years of
the land applied for by him, and yet
PONCIANO YBIERNAS, the poorest
among all the oppositors-applicants,
was not given a single square meter by
the trial court. Hence this shows that
money talks.51
4. Raised by private oppositors Aznar
Enterprises, Inc. and Aznar Brothers
Realty Co.:
I.
THE HONORABLE LOWER COURT
HAS ERRED IN HOLDING THAT
RESPONDENTS HAVE REGISTRABLE
TITLE OVER THE SUBJECT PARCEL
OF LAND DESCRIBED AS LOT SGS07-000307, PORTION OF LOT 18590
AND ORDERING ITS REGISTRATION

IN THE NAMES OF THE APPLICANTS

UNDER COMMONWEALTH ACT NO.
141 AS AMENDED BY PRESIDENTIAL
DECREE NO. 1529.
II.
THE LOWER COURT HAS GRAVELY
ERRED
IN
INCLUDING
THE
PORTIONS OF 41.2092 HECTARES OF
THE LOT WHICH BELONGS TO THE
APPELLANTS AZNAR ENTERPRISES,
INC. AND AZNAR BROTHERS REALTY
CO.,
IN
ITS
DECISION
AND
ORDERING ITS REGISTRATION IN
THE NAMES OF THE RESPONDENTS.
III.
THE LOWER COURT HAS GRAVELY
ERRED IN DENYING THE MOTION
FILED BY [THE] AZNARS DATED
MARCH 31, 1998, TO ALLOW THEM
TO RELOCATE THE PORTION THEY
CLAIMED OUT OF THE AREA
APPLIED
FOR
BY
THE
RESPONDENTS.52
Finding for the respondents, the Court
of Appeals affirmed the RTC in its
Decision dated June 28, 2006.
The Court of Appeals stated that the
private oppositors failed to prove that
the parcels of land they were claiming
were identical to the respective portions
of the subject property the respondents
sought to register.53
As for the petitioners appeal, the Court
of Appeals agreed with the RTCs
findings that the petitioner failed to
controvert the fact that the subject
property was within the alienable and
disposable portion of the public domain.
It added that it was a great blunder that
petitioners own witness, for his failure
to conduct an actual relocation or
verification survey, could not even
categorically identify the relative
position of the subject property to the
timberland area.54
Undaunted, the Heirs of Agaton
Tabanas,55 Aznar Enterprises, Inc. and

Aznar Brothers Realty Co.,56 and the

petitioner57 each moved to have the
Court of Appeals reconsider its Decision.
The Court of Appeals, however, denied
these motions on October 27, 2006 for
lack of merit.58
The same oppositors filed their separate
Petitions for Review on Certiorari before
this Court, to wit:
1. Private oppositors Aznar Enterprises,
Inc. and Aznar Brothers Realty Co.s
Petition for Review on Certiorari was
docketed as G.R. No. 175568 and was
denied by this Court in its February 26,
2007 Resolution59 for the following
reasons:
a. as the petition was filed beyond the
extended period pursuant to Section
5[a], Rule 56;
b. for failure to accompany the petition
with a clearly legible duplicate original,
or a certified true copy of the assailed
resolution in violation of Sections 4[d]
and 5, Rule 45 in relation to Section
5[d], Rule 56; and
c.
for
insufficient
or
defective
verification, the same being based "on
knowledge and belief" in violation of
Section 4, Rule 7, as amended by
Administrative Matter No. 00-2-10-SC.
In any event, the petition failed to
sufficiently show that the appellate court
committed any reversible error in the
challenged decision and resolution as to
warrant the exercise by this Court of its
discretionary appellate jurisdiction and
the issues raised therein are factual in
nature.
This Court likewise denied with finality
the Motion for Reconsideration60 of
Aznar Enterprises, Inc. and Aznar
Brothers
Realty
Co.
in
a
61
Resolution dated July 2, 2007.
2. Private oppositors Heirs of Agaton
Tabanass Petition for Review on
Certiorari62 was docketed as G.R. No.
175397 and in a Resolution63 dated

March 14, 2007, was denied by this

Court "for the Heirs failure to
sufficiently show that the Court of
Appeals committed any reversible error
in the challenged decision and
resolution as to warrant the exercise of
this Courts discretionary appellate
jurisdiction," and for raising issues,
which were factual in nature.
This Court similarly denied with finality
the Heirs of Agaton Tabanass Motion
for Reconsideration64 in a Resolution
dated June 18, 2007.65
On October 1, 2007, this Court denied
for lack of merit the Heirs of Agaton
Tabanass motion to file a second
motion for reconsideration, and added
that no further pleadings would be
entertained.66
The
Petition
for
Review
on
Certiorari67 now before us is the one
filed by the petitioner Republic of the
Philippines, which presented the
following ground:
THE COURT OF APPEALS ERRED ON
A QUESTION OF LAW WHEN IT
AFFIRMED THE JUDGMENT OF THE
TRIAL COURT THAT THE SUBJECT
LOTS
ARE
ALIENABLE
LAND
DESPITE THE CLEAR EVIDENCE TO
THE CONTRARY.68
The petitioner avers that the Court of
Appeals ignored the long-standing rule
that in land registration proceedings, the
applicants have the burden of
overcoming the presumption that the
land sought to be registered is
inalienable land of the public domain
when it affirmed the RTCs decision to
grant the respondents application for
original registration over the subject
property despite their failure to prove
that it was alienable and disposable.69
The petitioner argues that the CENRO
Certificate the respondents relied on was
erroneously issued; thus, it did not
afford them any vested right. The

petitioner adds: "at any rate, being the

government department charged with
the duty to conduct survey and
classification of lands, the DENRs recall
of the certification that the subject
property is alienable and disposable
should have been accorded respect."70
The
respondents,
in
their
Comment,71 contend that the findings of
the RTC, as affirmed by the Court of
Appeals, that the subject property falls
within the alienable and disposable
portion of the public domain, is duly
supported by substantial evidence.
Moreover, they asseverate, that the issue
posed by the petitioner is a factual issue,
which had been thoroughly discussed
and resolved by the lower courts.
Issue
The crux of the controversy in the case
at bar boils down to whether the grant of
respondents application for registration
of title to the subject property was
proper under the law and jurisprudence.
This Courts Ruling
This Court finds the petition to be
meritorious.
Procedural Issue: Nature of Issue
At the outset, this Court would like to
address respondents concern that the
petition involves an issue purely factual
in nature; thus, it cannot be subject of a
petition for review under Rule 45.
This Court, in New Rural Bank of
Guimba (N.E.), Inc. v. Abad,72 reiterated
the distinction between a question of
law and a question of fact, viz:
We reiterate the distinction between a
question of law and a question of fact. A
question of law exists when the doubt or
controversy concerns the correct
application of law or jurisprudence to a
certain set of facts; or when the issue
does not call for an examination of the
probative value of the evidence
presented, the truth or falsehood of facts
being admitted. A question of fact exists

when the doubt or difference arises as to

the truth or falsehood of facts or when
the query invites calibration of the whole
evidence
considering
mainly
the
credibility of the witnesses, the existence
and relevancy of specific surrounding
circumstances, as well as their relation
to each other and to the whole, and the
probability of the situation. (Citation
omitted.)
The petitioner herein is not calling for
an examination of the probative value or
truthfulness
of
the
evidence
presented.73 What it wants to know is
whether the lower courts correctly
applied the law and jurisprudence when
they
granted
the
respondents
application for registration of title to the
subject property.
Main Issue: Nature and Character of
Subject Property
Going to the merits of the case, this
Court agrees with the petitioner that the
respondents failed to prove in
accordance with law that the subject
property is within the alienable and
disposable portion of the public domain.
The Public Land Act or Commonwealth
Act No. 141, until this day, is the existing
general law governing the classification
and disposition of lands of the public
domain, except for timber and mineral
lands. "Under the Regalian doctrine
embodied in our Constitution, land that
has not been acquired from the
government, either by purchase, grant,
or any other mode recognized by law,
belongs to the State as part of the public
domain."74Thus, it is indispensable for a
person claiming title to a public land to
show that his title was acquired through
such means.75
Section 48(b) of Commonwealth Act No.
141, as amended by Presidential Decree
No. 1073,76 provides:
Sec. 48. The following described citizens
of the Philippines, occupying lands of

the public domain or claiming to own

any such lands or an interest therein,
but whose titles have not been perfected
or completed, may apply to the Court of
First Instance of the province where the
land is located for confirmation of their
claims and the issuance of a certificate
of title therefor, under the Land
Registration Act, to wit:
xxxx
(b) Those who by themselves or through
their predecessors in interest have been
in the open, continuous, exclusive, and
notorious possession and occupation of
alienable and disposable lands of the
public domain, under a bona fide claim
of acquisition or ownership, since June
12, 1945, except when prevented by war
or force majeure. These shall be
conclusively
presumed
to
have
performed all the conditions essential to
a Government grant and shall be
entitled to a certificate of title under the
provisions of this chapter.
Section 14(1) of Presidential Decree No.
1529 or the Property Registration
Decree, likewise provides:
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.
Based on the foregoing parameters,
applicants for registration under Section
14(1) of Presidential Decree No. 1529
must sufficiently establish the following:

1. that the subject land forms part of the

disposable and alienable lands of the
public domain;
2. that the applicant and his
predecessors-in-interest have been in
open,
continuous,
exclusive
and
notorious possession and occupation of
the same; and
3. that it is under a bona fide claim of
ownership since June 12, 1945, or
earlier.77
Land classification or reclassification
cannot be assumed. It must be
proved.78 To prove that the subject
property is alienable and disposable
land of the public domain, respondents
presented the CENRO Certificate dated
March 20, 1996 signed by CENR Officer
Iluminado C. Lucas and PENR Officer
Isabelo R. Montejo, and verified by
Forester Anastacio C. Cabalejo.
However, this Court, in Republic v.
T.A.N. Properties, Inc.,79 ruled that a
CENRO or PENRO Certification is not
enough to certify that a land is alienable
and disposable:
Further, it is not enough for the PENRO
or CENRO to certify that a land is
alienable and disposable. The applicant
for land registration must prove that the
DENR Secretary had approved the land
classification and released the land of
the public domain as alienable and
disposable, and that the land subject of
the application for registration falls
within
the
approved
area
per
verification through survey by the
PENRO or CENRO. In addition, the
applicant for land registration must
present a copy of the original
classification approved by the DENR
Secretary and certified as a true copy by
the legal custodian of the official
records. These facts must be established
to prove that the land is alienable and
disposable. Respondent failed to do so
because the certifications presented by

respondent do not, by themselves, prove

that the land is alienable and disposable.
(Emphasis ours.)
Although the survey and certification
were done in accordance with Forestry
Administrative Order No. 4-642, issued
by the then Secretary of Agriculture and
Natural Resources declaring certain
portions of the public domain situated in
Cebu City as alienable and disposable,
an actual copy of such classification,
certified as true by the legal custodian of
the official records, was not presented in
evidence. This was a crucial mistake.
What
was
presented
was
the
80
certification of Nicomedes R. Armilla,
the Land Evaluation Party Coordinator,
that the Cebu CENRO had on file a
certified photocopy of the administrative
order. In fact, one of the private
oppositors objected to its submission in
evidence for violating the best evidence
rule.81
Moreover, DENR Administrative Order
(DAO) No. 20 dated May 30,
1988,82 delineated the functions and
authorities of the offices within the
DENR. Under Section G(1) of the above
DAO, CENROs issue certificates of land
classification status for areas below 50
hectares. For those falling above 50
hectares, the issuance of such
certificates is within the function of the
PENROs, as per Section F(1) of the same
DAO. This delineation, with regard to
the offices authorized to issue
certificates of land classification status,
was retained in DAO No. 38 83dated April
19, 1990.84
In the case at bar, the subject property
has an area of 731,380 square meters or
73.138 hectares.1wphi1 Clearly, under
DAO No. 38, series of 1990, the subject
property is beyond the authority of the
CENRO to certify as alienable and
disposable.85

It is undisputed that while PENR Officer

Montejos signature appears on the
CENRO Certificate, it was under the
CENRO that the survey of the subject
property was conducted. The certificate
was likewise issued under the CENRO,
and not the PENRO. The respondents
admit and even emphasize that it was
the CENRO that was involved in the
conduct of the survey and issuance of
the certification with respect to the land
classification status of the subject
property.
In Republic v. Medida,86 this Court said:
This Court x x x holds that the
alienability and disposability of land are
not among the matters that can be
established by mere admissions, or even
the agreement of parties. The law and
jurisprudence
provide
stringent
requirements to prove such fact. Our
Constitution, no less, embodies the
Regalian doctrine that all lands of the
public domain belong to the State, which
is the source of any asserted right to
ownership of land. The courts are then
empowered, as we are duty-bound, to
ensure that such ownership of the State
is duly protected by the proper
observance by parties of the rules and
requirements on land registration.
Unfortunately, respondents were not
able to discharge the burden of
overcoming the presumption that the
land they sought to be registered forms
part of the public domain.
WHEREFORE, the petition is hereby
GRANTED. The June 28, 2006 Decision
and October 27, 2006 Resolution of the
Court of Appeals in CA-G.R. CV No.
78633, are REVERSED and SET ASIDE.
The respondents application for
registration and issuance of title to Lot
SGS-07-000307,
Cebu
Cad.
12
Extension, Barangay Quiot, Cebu City,
in Land Registration Case No. 1421N/LRA Rec. No. N-67272 filed with the

Regional Trial Court of Cebu City,

Branch 20 is accordingly DISMISSED.
SO ORDERED.
VALIAO et al vs. REPUBLIC
DECISION
PERALTA, J.:
Before this Court is a petition for review
on certiorari under Rule 45 of the Rules
of Court seeking to set aside the
Decision[1] and Resolution[2] of the Court
of Appeals (CA) in CA-G.R. CV No.
54811, which reversed the Decision [3] of
the Regional Trial Court (RTC) of
Kabankalan, Negros Occidental, Branch
61, in Land Registration Case No. 03,
granting petitioners' application for
registration of title over a parcel of land
located in Ilog, Negros Occidental.
The factual milieu of this case is as
follows:
On
August
11,
1987,
petitioners[4] Pacifico,
Lodovico,
Ricardo, Bienvenido, all surnamed
Valiao, and Nemesio Grandea filed with
the RTC of Kabankalan, Negros
Occidental
an
application
for
registration of a parcel of land with an
area of 504,535 square meters, more or
less, situated in Barrio Galicia,
Municipality of Ilog, Negros Occidental.
On June 20, 1988, private oppositors
Macario Zafra and Manuel Yusay filed
their Motion to Dismiss the application
on the following grounds: (1) the land
applied for has not been declared
alienable and disposable; (2) res
judicata has set in to bar the application
for registration; and (3) the application
has no factual or legal basis.
On August 24, 1988, the Republic of the
Philippines (Republic), through the
Office of the Solicitor General (OSG),
opposed the application for registration

on the following grounds, among others:

that neither the applicants nor
their predecessors-in-interest had been
in open, continuous, exclusive and
notorious possession and occupation of
the land in question since June 12, 1945
or prior thereto; that the muniment/s of
title and/or the tax declaration/s and tax
payments/receipts of applicants, if any,
attached to or alleged in the application,
do/es not constitute competent and
sufficient
evidence
of
a bona
fide acquisition of the land applied for or
of their open, continuous, exclusive and
notorious possession and occupation in
the concept of owner, since June 12,
1945 or prior thereto; that the parcel of
land applied for is a portion of public
domain belonging to the Republic,
which is not subject to private
appropriation; and that the present
action is barred by a previous final
judgment in a cadastral case prosecuted
between the same parties and involving
the same parcel of land.
On July 3, 1989, the RTC denied private
oppositors' Motion to Dismiss. Trial
thereafter ensued.
In support of their application for
registration, petitioners alleged that they
acquired the subject property in 1947,
upon the death of their uncle Basilio
Millarez (Basilio), who purchased the
land from a certain Fermin Payogao,
pursuant to a Deed of Sale [5] dated May
19, 1916 entirely handwritten in Spanish
language. Basilio possessed the land in
question from May 19, 1916 until his
death in 1947. Basilio's possession was
open, continuous, peaceful, adverse,
notorious, uninterrupted and in the
concept of an owner. Upon Basilio's
death, the applicants as co-heirs
possessed the said land until 1966, when
oppositor Zafra unlawfully and violently

dispossessed them of their property,

which compelled them to file complaints
of Grave Coercion and Qualified Theft
against Zafra. In support of their claim
of possession over the subject property,
petitioners submitted in evidence Tax
Declaration No. 9562[6] dated September
29, 1976 under the names of the heirs of
Basilio Millarez.
The RTC, in its Decision dated
December 15, 1995, granted petitioners'
application for registration of the
subject property, the dispositive portion
of which states:
WHEREFORE, in view of the foregoing,
this Court hereby orders and decrees
registration of Lot No. 2372 subject of
the present proceedings and the
registration of title thereto, in favor of
the applicants, who are declared the true
and lawful owners of said Lot No. 2372,
except applicant Lodovico Valiao, who
sold his right to Macario Zafra.
Upon the finality of this decision, let the
corresponding decree of registration and
Certificate of Title be issued in the name
of the applicants, Heirs of Basilio
Millarez, namely: Pacifico Valiao,
Ricardo Valiao, Bienvenido Valiao and
Nemesio Grandea, subject to the rights
of private oppositors, Macario Zafra and
Manuel Yusay over said lot whose
fishpond permits are declared VALID
and will expire on December 31, 2003.

the public domain is an exclusive

prerogative of the executive department
of the government and in the absence of
such classification, the lands remain as
unclassified until it is released
therefrom and rendered open to
disposition. Further, there exists a prior
cadastral case involving the same parties
herein and the same Lot No. 2372,
which ruled that Lot No. 2372 belongs to
the Republic. The CA held that such
judgment constitutes res judicata that
bars a subsequent action for land
registration. It also ruled that the
subject property is part of the
inalienable land of the public domain
and petitioners failed to prove that they
and their predecessors-in-interest had
been in open, continuous, exclusive and
notorious possession of the land in
question since June 12, 1945 or earlier.
The dispositive portion of the decision
reads:
WHEREFORE, premises considered, the
instant
appeal
is
GRANTED.
Accordingly, We REVERSE the Decision
dated December 15, 1995 of the Regional
Trial Court, DENY the application for
registration of title filed by petitionersappellees, DECLARE as moot and
academic any and all claims of private
oppositors-appellants over Lot No.
2372, and DECLARE the subject parcel
of land to be inalienable and
indisposable land belonging to the
public domain.

No costs.
SO ORDERED.[8]
SO ORDERED.
Aggrieved by the Decision, the private
oppositors and the Republic, through
Assistant Prosecutor Josue A. Gatin,
filed an appeal with the CA, which
reversed the trial court's findings in its
Decision dated June 23, 2005. The CA
ruled that the classification of lands of
[7]

Petitioners
filed
a
motion
for
reconsideration, which was denied by
the CA in a Resolution dated November
17, 2005. Hence, the present petition
with the following issues:
I

WHETHER OR NOT LOT NO. 2372 OF

THE ILOG CADASTRE IS ALIENABLE
AND DISPOSABLE LAND OF THE
PUBLIC DOMAIN.
II
WHETHER OR NOT THE CLAIM OF
PRESCRIPTION BY THE APPLICANT
WILL LIE ON LOT NO. 2372.
III
WHETHER OR NOT THE DECISION
OF THE COURT OF APPEALS IN CAD.
CASE NO. 23, ENTITLED LODOVICO
VALIAO, ET, AL., VS. MACARIO
ZAFRA, ET, AL., AC G.R. NO. CV68873,
CONSTITUTES RES
JUDICATA AS
FAR
AS
THIS
APPLICATION FOR REGISTRATION IS
CONCERNED.
IV
WHETHER OR NOT THE ALLEGED
POSSESSION OF THE APPLICANTS
THROUGH THEIR PREDECESSORSIN-INTEREST IS SUFFICIENT TO
SUSTAIN
THEIR
CLAIM
FOR
PRESCRIPTION.[9]
Petitioners claim that Lot No. 2372 is an
alienable and disposable portion of the
public domain. The possession of
applicants' predecessors-in interest
since 1916 until 1966 had been open,
continuous and uninterrupted; thus,
converting the said land into a private
land. The subject lot had already become
private in character in view of the length
of time the applicants and their
predecessors-in-interest had possessed
the subject lot, which entitles them to
the confirmation of their title.
Petitioners further claim that prior
dismissal in a cadastral proceeding does
not
constitute res
judicata in
a
subsequent application for registration
of a parcel of land.

In its Comment, the OSG submits that

the issues to be resolved in the present
petition, i.e., whether Lot No. 2372 is
alienable and disposable land of the
public domain and whether petitioners
have the right to have the said property
registered in their name through
prescription of time are questions of
fact, which were already passed upon by
the CA and no longer reviewable by the
Court, since findings of fact of the CA,
when supported by sufficient evidence,
are conclusive and binding on the
parties. The OSG further claims that
petitioners failed to prove that the
subject lot is part of the alienable and
disposable portion of the public domain
and that petitioners' application for land
registration is already barred by a prior
decision in a cadastral case. Lastly, the
OSG asserts that petitioners did not
present sufficient evidence to prove that
their possession over the subject lot
applied for had been open, peaceful,
exclusive, continuous and adverse.
Anent the propriety of filing a petition
for review under Rule 45 of the Rules of
Court, the principle is well-established
that this Court is not a trier of facts and
that only questions of law may be
raised. The resolution of factual issues
is the function of the lower courts whose
findings on these matters are received
with respect and are, as a rule, binding
on this Court. This rule, however, is
subject to certain exceptions. One of
these is when the findings of the
appellate court are contrary to those of
the trial court.[10] Due to the divergence
of the findings of the CA and the RTC,
the Court will now re-examine the facts
and evidence adduced before the lower
courts.
Section 14 (1) of Presidential Decree No.
(PD) 1529, otherwise known as
the Property
Registration
Decree provides:

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 dulyauthorized 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.
From the foregoing, petitioners need to
prove that: (1) the land forms part of the
alienable and disposable land of the
public domain; and (2) they, by
themselves
or
through
their
predecessors-in-interest, have been in
open, continuous, exclusive, and
notorious possession and occupation of
the subject land under a bona fide claim
of ownership from June 12, 1945 or
earlier.[11] These the petitioners must
prove by no less than clear, positive and
convincing evidence.[12]
Under the Regalian doctrine, which is
embodied in our Constitution, all lands
of the public domain belong to the State,
which is the source of any asserted right
to any ownership of land. All lands not
appearing to be clearly within private
ownership are presumed to belong to
the State. Accordingly, public lands not
shown to have been reclassified or
released as alienable agricultural land or
alienated to a private person by the State
remain part of the inalienable public
domain.[13] Unless public land is shown
to have been reclassified as alienable or
disposable to a private person by the
State, it remains part of the inalienable
public domain. Property of the public
domain is beyond the commerce of man

and not susceptible of private

appropriation
and
acquisitive
prescription. Occupation thereof in the
concept of owner no matter how long
cannot ripen into ownership and be
registered as a title.[14] The burden of
proof in overcoming the presumption of
State ownership of the lands of the
public domain is on the person applying
for registration (or claiming ownership),
who must prove that the land subject of
the application
is alienable
or disposable.
To
overcome
this
presumption, incontrovertible evidence
must be established that the land subject
of the application (or claim) is alienable
or disposable.[15]
There must be a positive act
declaring land of the public domain as
alienable and disposable. To prove that
the land subject of an application for
registration is alienable, the applicant
must establish the existence of a positive
act of the government, such as a
presidential
proclamation
or
an
executive order; an administrative
action; investigation reports of Bureau
of Lands investigators; and a legislative
act or a statute. The applicant may also
secure a certification from the
government that the land claimed to
have been possessed for the required
number of years is alienable and
disposable.[16]
No such evidence was offered by the
petitioners to show that the land in
question has been classified as alienable
and disposable land of the public
domain. In
the
absence
of
incontrovertible evidence to prove that
the subject property is already classified
as alienable and disposable, we must
consider the same as still inalienable
public domain.[17] Verily, the rules on the
confirmation of imperfect title do not
apply unless and until the land subject
thereof is released in an official

proclamation to that effect so that it may

form part of the disposable agricultural
lands of the public domain.
With respect to the existence of a prior
cadastral case, it appears that on July 11,
1966, the petitioners filed in Cadastral
Case No. 23 of the then CFI of Negros
Occidental a petition to reopen the
proceedings relative to three lots, one of
which is Lot No. 2372. The lower court,
in its Order[18] dated October 20, 1980,
held that Lot No. 2372 belongs to the
Republic. It found that after the subject
lot was declared public land, it was
found to be inside the communal
forest. On appeal, the CA, in its
Decision[19] dated August 7, 1984, found
no reversible error and affirmed the
decision of the cadastral court.
Thereafter, a petition elevating the case
to this Court was dismissed for lack of
merit.[20] In the present case, the CA, in
its Decision dated June 23, 2005, ruled
that such judgment constitutes res
judicata that will bar a subsequent
action for land registration on the same
land.
In Director of Lands v. Court of
Appeals,[21] the Court held that a judicial
declaration that a parcel of land is
public, does not preclude even the same
applicant from subsequently seeking a
judicial confirmation of his title to the
same land, provided he thereafter
complies with the provisions of Section
48[22] of Commonwealth Act No. 141, as
amended, and as long as said public
lands remain alienable and disposable.
In the case at bar, not only did the
petitioners fail to prove that the subject
land is part of the alienable and
disposable portion of the public domain,
they failed to demonstrate that they by
themselves
or
through
their
predecessors-in-interest have possessed
and occupied the subject land since June

12, 1945 or earlier as mandated by the

law.
It is settled that the applicant
must present
proof
of specific acts
of ownership to substantiate the claim
and cannot just offer general statements
which
are mereconclusions
of law
than factual evidence
of possession.
[23]
Actual possession consists in the
manifestation of acts of dominion over it
of such a nature as a party would
actually exercise over his own property.
[24]

The testimonies of Nemesio and Pacifico

as to their own and their predecessorsin-interest's possession and ownership
over the subject lot fail to convince
Us.Petitioners claim that Basilio was in
possession of the land way back in 1916.
Yet no tax declaration covering the
subject property, during the period
Basilio allegedly occupied the subject
property, i.e., 1916
to
1947,
was
presented in evidence. Other than the
bare allegations of Nemesio and Pacifico
that Basilio allegedly introduced
improvements on the subject property,
there is nothing in the records which
would substantiate petitioners' claim
that Basilio was in possession of Lot No.
2372 since June 12, 1945 or earlier, the
period of possession required by
law. Hence, petitioners' assertion that
Basilio possessed the property in
question from 1916 to 1947 is, at best,
conjectural and self-serving.
As regards petitioners' possession of the
land in question from 1947 to 1966,
petitioners could only support the same
with a tax declaration dated September
29, 1976.At best, petitioners can only
prove possession since said date. What
is
required
is
open,
exclusive,
continuous and notorious possession by
petitioners and their predecessors-ininterest, under a bona fide claim of
ownership, since June 12, 1945 or

earlier.[25] Petitioners failed to explain

why, despite their claim that their
predecessors-in-interest have possessed
the subject properties in the concept of
an owner even before June 12, 1945, it
was only in 1976 that they started to
declare the same for purposes of
taxation. Moreover, tax declarations and
receipts are not conclusive evidence
of ownership or of the right to possess
land when not supported by any other
evidence. The disputed property may
have been declared for taxation
purposes in the names of the applicants
for registration, or of their predecessorsin-interest, but it does not necessarily
prove ownership.
They
are
merely indicia of a claim of ownership.
[26]

Evidently, since the petitioners failed to

prove that (1) the subject property was
classified as part of the disposable and
alienable land of the public domain; and
(2) they and their predecessors-ininterest had been in open, continuous,
exclusive, and notorious possession and
occupation thereof under a bona
fide claim of ownership since June 12,
1945 or earlier, their application for
confirmation and registration of the
subject property under PD 1529 should
be denied.
WHEREFORE, the Decision
and
Resolution of the Court of Appeals in
CA-G.R. CV No. 54811, which reversed
the Decision of the Regional Trial Court
of Kabankalan, Negros Occidental,
Branch 61, in Land Registration Case
No. 03, is AFFIRMED. The application
for registration of title filed by the
petitioners Pacifico Valiao, Lodovico
Valiao, Ricardo Valiao, Bienvenido
Valiao, and Nemesio Grandea, over Lot
No. 2372, with a total area of 504,535
square meters, more or less, situated in

Barrio Galicia, Municipality of Ilog,

Negros Occidental, is DENIED.
SO ORDERED.
G.R. No. 182913
November
20, 2013
REPUBLIC
OF
THE
PHILIPPINES, Petitioner,
vs.
ANTONIO, FELIZA, NEMESIO,
ALBERTO, FELICIDAD, RICARDO,
MILAGROS AND CIPRIANO, ALL
SURNAMED BACAS; EMILIANA
CHABON, SATURNINO ABDON,
ESTELA,
CHABON,
LACSASA
DEMON,
PDERITA
CHABON,
FORTUNATA
EMBALSADO,
MINDA J. CASTILLO, PABLO
CASTILLO, ARTURO P. LEGASPI,
and
JESSIE
I.
LEGASPI, Respondents.
DECISION
MENDOZA, J.:
This petition for review on certiorari
under Rule 45 of the Rules of Court
seeks to review, reverse and set aside the
November 12, 2007 Decision1 and the
May 15, 2008 Resolution2 of the Court of
Appeals (CA) in CA-G.R. CV No. 64142,
upholding the decision of the Regional
Trial Court, Branch 17, Cagayan de Oro
City (RTC) , which dismissed the
consolidated cases of Civil Case No.
3494, entitled Republic of the
Philippines v. Antonio, et al. and Civil
Case No. 5918, entitled Republic of the
Philippines v. Emiliana Chabon , et al.
Said civil cases were filed by the
Republic of the Philippines (Republic)
for the cancellation and annulment of
Original Certificate of Title (OCT) No. 0358 and OCT No. O-669, covering
certain parcels of land occupied and
utilized as part of the Camp Evangelista
Military Reservation, Misamis Oriental,

presently the home of the 4th Infantry

Division of the Philippine Army.
The Antecedents:
In 1938, Commonwealth President
Manuel Luis Quezon (Pres. Quezon)
issued Presidential Proclamation No.
265, which took effect on March 31,
1938, reserving for the use of the
Philippine Army three (3) parcels of the
public domain situated in the barrios of
Bulua and Carmen, then Municipality of
Cagayan, Misamis Oriental. The parcels
of land were withdrawn from sale or
settlement and reserved for military
purposes, "subject to private rights, if
any there be."
Land Registration Case No. N-275
[Antonio, Feliza, Nemesio, Roberto, and
Felicidad, all surnamed Bacas, and the
Heirs of Jesus Bacas, Applicants (The
Bacases)]
The Bacases filed their Application for
Registration3 on November 12, 1964
covering a parcel of land, together with
all the improvements found thereon,
located in Patag, Cagayan de Oro City,
more
particularly
described
and
bounded as follows:
A parcel of land, Lot No. 4354 of the
Cadastral Survey of Cagayan, L.R.C.
Record No. 1612, situated at Barrio
Carmen, Municipality of Cagayan,
Province of Misamis Oriental. Bounded
on the SE., along lines 1-2-3-4, by Lot
4357; and alongline 4-5, by Lot 3862; on
the S., along line 5-6, by Lot 3892; on
the W. and NW., along lines 6-7-8, by
Lot 4318; on the NE., along line 8-9, by
Lot 4319, along line 9-10, by Lot 4353
and long line 10-11, by Lot 4359; and on
the SE., along line 11-1, by Lot 4356, all
of Cagayan Cadastre; containing an area
of THREE HUNDRED FIFTY FOUR
THOUSAND
THREE
HUNDRED
SEVENTY SEVEN (354,377) square
meters, more or less, under Tax

Declaration No. 35436 and assessed

at P3,540.00.4
They alleged ownership in fee simple of
the property and indicated in their
application the names and addresses of
the adjoining owners, as well as a
statement that the Philippine Army
(Fourth Military Area) recently occupied
a portion of the land by their mere
tolerance.5
The Director of the Bureau of Lands,
thru its Special Counsel, Benito S. Urcia
(Urcia) , registered its written
Opposition6 against the application.
Later, Urcia, assisted by the District
Land Officer of Cagayan de Oro City,
thru the Third Assistant Provincial
Fiscal of Misamis Oriental, Pedro R.
Luspo (Luspo) , filed an Amended
Opposition.7
On April 10, 1968, based on the evidence
presented by the Bacases, the Land
Registration Court (LRC) rendered a
decision8 holding that the applicants had
conclusively established their ownership
in fee simple over the subject land and
that their possession, including that of
their predecessor-in-interest, had been
open, adverse, peaceful, uninterrupted,
and in concept of owners for more than
forty (40) years.
No appeal was interposed by the
Republic from the decision of the LRC.
Thus, the decision became final and
executory, resulting in the issuance of a
decree and the corresponding certificate
of title over the subject property.
Land Registration Case No. N-521
[Emiliana Chabon, Estela Chabon and
Pedrita Chabon, Applicants (The
Chabons)]
The Chabons filed their Application for
Registration9 on May 8, 1974 covering a
parcel of land located in CarmenDistrict, Cagayan de Oro City, known as
Lot 4357, Cagayan Cadastre, bounded
and described as:

A parcel of land (Lot 4357, Cagayan

Cadastre, plan Ap-12445), situated in
the District of Carmen, City of Cagayan
de Oro. Bounded on the NE. by property
of Potenciano Abrogan vs. Republic of
the Philippines (Public Land); on the SE.
by properties of Geronimo Wabe and
Teofilo Batifona or Batipura; on the SW.
by property of Teofilo Batifona or
Batipura; and on the NW. by property of
Felipe Bacao or Bacas vs. Republic of the
Philippines (Public Land). Point "1" is N.
10 deg. 39W., 379.88 M. from B.L.L.M.
14, Cagayan Cadastre. Area SIXTY NINE
THOUSAND SIX HUNDRED THIRTY
TWO (69,632) SQUARE METERS, more
or less.10
They alleged ownership in fee simple
over the property and indicated therein
the names and addresses of the
adjoining owners, but no mention was
made with respect to the occupation, if
any, by the Philippine Army. The
Chabons likewise alleged that, to the
best of their knowledge, no mortgage or
encumbrance of any kind affecting said
land with the exception of 18,957 square
meters sold to Minda J. Castillo and
1,000 square meters sold and conveyed
to Atty. Arturo R. Legaspi.11
On February 18, 1976, there being no
opposition made, even from the
government, hearing on the application
ensued. The LRC then rendered a
decision12 holding
that
Chabons
evidence established their ownership in
fee simple over the subject property and
that their possession, including that of
their predecessor-in-interest, had been
actual, open, public, peaceful, adverse,
continuous, and in concept of owners for
more than thirty (30) years.
The decision then became final and
executory. Thus, an order13 for the
issuance of a decree and the
corresponding certificate of title was
issued.

The present cases

As a consequence of the LRC decisions
in both applications for registration, the
Republic filed a complaint for
annulment of titles against the Bacases
and the Chabons before the RTC. More
specifically, on September 7, 1970 or one
(1) year and ten (10) months from the
issuance of OCT No. 0-358, a civil case
for annulment, cancellation of original
certificate of title, reconveyance of lot or
damages was filed by the Republic
against the Bacases, which was docketed
as Civil Case No. 3494. On the other
hand, on April 21, 1978 or two (2) years
and seven (7) months after issuance of
OCT No. 0-669, the Republic filed a civil
case for annulment of title and reversion
against the Chabons, docketed as Civil
Case No. 5918.
Civil Case No. 3494 against the Bacases
The Republic claimed in its petition for
annulment before the RTC14 that the
certificate of title issued in favor of the
Bacases was null and void because they
fraudulently omitted to name the
military camp as the actual occupant in
their application for registration.
Specifically, the Republic, through the
Fourth Military Area, was the actual
occupant of Lot No. 4354 and also the
owner and possessor of the adjoining
Lots Nos. 431815 and 4357. Further, the
Bacases failed to likewise state that Lot
No. 4354 was part of Camp Evangelista.
These omissions constituted fraud
which vitiated the decree and certificate
of title issued.
Also, the Republic averred that the
subject land had long been reserved in
1938 for military purposes at the time it
was applied for and, so, it was no longer
disposable and subject to registration.16
Civil Case No. 5918 against the Chabons
In this case, the Republic claimed that it
was the absolute owner and possessor of
Lot No. 4357. The said lot, together with

Lots 431817 and 4354, formed part of the

military reservation known as Camp
Evangelista in Cagayan de Oro City,
which was set aside and reserved under
Presidential Proclamation No. 265
issued by President Quezon on March
31, 1938.18
In its petition for annulment before the
RTC,19 the Republic alleged that OCT
No. 0-669 issued in favor of the
Chabons and all transfer certificates of
titles, if any, proceeding therefrom, were
null and void for having been vitiated by
fraud and/or lack of jurisdiction. 20 The
Chabons concealed that the fact that Lot
4357 was part of Camp Evangelista and
that the Republic, through the Armed
Forces of the Philippines, was its actual
occupant and possessor.21 Further, Lot
4357 was a military reservation,
established as such as early as March 31,
1938 and, thus, could not be the subject
of
registration
or
private
appropriation.22 As
a
military
reservation, it was beyond the
commerce of man and the registration
court did not have any jurisdiction to
adjudicate the same as private
property.23
Decision of the Regional Trial Court
As the facts and issues in both cases
were substantially the same and
identical, and the pieces of evidence
adduced were applicable to both, the
cases were consolidated and jointly
tried. Thereafter, a joint decision
dismissing the two complaints of the
Republic was rendered.
In dismissing the complaints, the RTC
explained that the stated fact of
occupancy by Camp Evangelista over
certain portions of the subject lands in
the applications for registration by the
respondents
was
a
substantial
compliance with the requirements of the
law.24 It would have been absurd to state
Camp Evangelista as an adjoining owner

when it was alleged that it was an

occupant of the land.25 Thus, the RTC
ruled that the respondents did not
commit fraud in filing their applications
for registration.
Moreover, the RTC was of the view that
the Republic was then given all the
opportunity to be heard as it filed its
opposition to the applications, appeared
and participated in the proceedings. It
was, thus, estopped from contesting the
proceedings.
The RTC further reasoned out that
assuming arguendo that respondents
were guilty of fraud, the Republic lost its
right to a relief for its failure to file a
petition for review on the ground of
fraud within one (1) year after the date
of
entry
of
the
decree
of
registration.26 Consequently, it would
now be barred by prior judgment to
contest the findings of the LRC.27
Finally, the RTC agreed with the
respondents that the subject parcels of
land were exempted from the operation
and
effect
of
the
Presidential
Proclamation No. 265 pursuant to a
proviso therein that the same would not
apply to lands with existing "private
rights." The presidential proclamation
did not, and should not, apply to the
respondents because they did not apply
to acquire the parcels of land in question
from the government, but simply for
confirmation and affirmation of their
rights to the properties so that the titles
over them could be issued in their
favor.28 What
the
proclamation
prohibited was the sale or disposal of the
parcels of land involved to private
persons as a means of acquiring
ownership of the same, through the
modes provided by law for the
acquisition of disposable public lands.29
The Republic filed its Notice of Appeal
before the RTC on July 5, 1991. On the
other hand, the Bacases and the

Chabons filed an Ex-Parte Motion for

the Issuance of the Writ of Execution
and Possession on July 16, 1991. An
amended motion was filed on July 31,
1991. The RTC then issued the
Order,30 dated February 24, 1992,
disapproving the Republics appeal for
failure to perfect it as it failed to notify
the Bacases and granting the writ of
execution.
Action of the Court of Appeals and the
Court regarding the Republics Appeal
The Republic filed a Notice of Appeal on
April 1, 1992 from the February 24, 1992
of the RTC. The same was denied in the
RTC Order,31 dated April 23, 1992. The
Republic moved for its reconsideration
but the RTC was still denied it on July 8,
1992.32
Not satisfied, the Republic filed a
petition before the CA, docketed as CAG.R. SP No. 28647, entitled Republic vs.
Hon. Cesar M. Ybaez,33 questioning the
February 24, 1992 Order of the RTC
denying its appeal in Civil Case No.
3494. The CA sustained the government
and, accordingly, annulled the said RTC
order.
The respondents appealed to the Court,
which later found no commission of a
reversible error on the part of the CA.
Accordingly, the Court dismissed the
appeal as well as the subsequent
motions for reconsideration. An entry of
judgment was then issued on February
16, 1995.34
Ruling of the Court of Appeals
The appeal allowed, the CA docketed the
case as CA G.R. CV No. 64142.
On November 12, 2007, the CA affirmed
the ruling of the RTC. It explained that
once a decree of registration was issued
under the Torrens system and the
reglementary period had passed within
which the decree may be questioned, the
title was perfected and could not be
collaterally questioned later on.35 Even

assuming that an action for the

nullification of the original certificate of
title may still be instituted, the review of
a decree of registration under Section 38
of Act No. 496 [Section 32 of
Presidential Decree (P.D.) No. 1529]
would only prosper upon proof that the
registration was procured through
actual fraud,36 which proceeded from an
intentional
deception
perpetrated
through the misrepresentation or the
concealment of a material fact.37 The CA
stressed that "[t]he fraud must be actual
and extrinsic, not merely constructive or
intrinsic; the evidence thereof must be
clear, convincing and more than merely
preponderant, because the proceedings
which are assailed as having been
fraudulent are judicial proceedings
which by law, are presumed to have
been fair and regular."38
Citing the rule that "[t]he fraud is
extrinsic if it is employed to deprive
parties of their day in court and, thus,
prevent them from asserting their right
to the property registered in the name of
the applicant,"39 the CA found that there
was none. The CA agreed with the RTC
that there was substantial compliance
with the requirement of the law. The
allegation of the respondent that Camp
Evangelista occupied portions of their
property negated the complaint that
they committed misrepresentation or
concealment amounting to fraud.40
As regards the issue of exemption from
the proclamation, the CA deemed that a
discussion was unnecessary because the
LRC already resolved it. The CA stressed
that the proceeding was one in rem,
thereby binding everyone to the legal
effects of the same and that a decree of
registration that had become final
should be deemed conclusive not only
on the questions actually contested and
determined, but also upon all matters

that might be litigated or decided in the

land registration proceeding.41
Not in conformity, the Republic filed a
motion for reconsideration which was
denied on May 15, 2008 for lack of
merit.
Hence, this petition.
GROUNDS
RELIED
UPON
WARRANTING REVIEW OF THE
PETITION
1.
THE
COURT
OF
APPEALS
COMMITTED SERIOUS ERROR IN
HOLDING
THAT
THE
LAND
REGISTRATION
COURT
HAD
JURISDICTION
OVER
THE
APPLICATION FOR REGISTRATION
FILED BY RESPONDENTS DESPITE
THE LATTERS FAILURE TO COMPLY
WITH
THE
MANDATORY
REQUIREMENT OF INDICATING ALL
THE ADJOINING OWNERS OF THE
PARCELS OF LAND SUBJECT OF THE
APPLICATION.
2. THE COURT OF APPEALS
COMMITTED SERIOUS ERROR IN
HOLDING
THAT
RESPONDENTS
HAVE A REGISTRABLE RIGHT OVER
THE SUBJECT PARCELS OF LAND
WHICH ARE WITHIN THE CAMP
EVANGELISTA
MILITARY
RESERVATION.
3. IN G.R. NO. 157306 ENTITLED
"REPUBLIC OF THE PHILIPPINES VS.
ANATALIA ACTUB TIU ESTONILO, ET
AL.," WHICH INVOLVES PRIVATE
INDIVIDUALS CLAIMING RIGHTS
OVER PORTIONS OF THE CAMP
EVANGELISTA
MILITARY
RESERVATION, THIS HONORABLE
COURT
HELD
THAT
THESE
INDIVIDUALS COULD NOT HAVE
VALIDLY
OCCUPIED
THEIR
CLAIMED LOTS BECAUSE THE SAME
WERE CONSIDERED INALIENABLE
FROM THE TIME OF THEIR
RESERVATION IN 1938. HERE, THE
CERTIFICATES OF TITLE BEING

SUSTAINED BY THE COURT OF

APPEALS WERE ISSUED PURSUANT
TO THE DECISIONS OF THE LAND
REGISTRATION
COURT
IN
APPLICATIONS FOR REGISTRATION
FILED IN 1964 AND 1974. VERILY,
THE COURT OF APPEALS, IN
ISSUING THE HEREIN ASSAILED
DECISION DATED NOVEMBER 15,
2007 AND RESOLUTION DATED MAY
15, 2008, HAS DECIDED THAT
INSTANT CONTROVERSY IN A
MANNER THAT IS CONTRARY TO
LAW AND JURISPRUDENCE.42
Position of the Republic
In advocacy of its position, the Republic
principally argues that (1) the CA erred
in holding that the LRC acquired
jurisdiction over the applications for
registration of the reserved public lands
filed by the respondents; and (2) the
respondents do not have a registrable
right over the subject parcels of land
which are within the Camp Evangelista
Military Reservation.
With respect to the first argument, the
Republic cites Section 15 of P.D. No.
1529, which requires that applicants for
land registration must disclose the
names of the occupants of the land and
the names and addresses of the owners
of the adjoining properties. The
respondents did not comply with that
requirement which was mandatory and
jurisdictional.
Citing
Pinza
v.
Aldovino,43 it asserts that the LRC had
no jurisdiction to take cognizance of the
case.
Moreover,
such
omission
constituted
fraud
or
willful
misrepresentation. The respondents
cannot invoke the indefeasibility of the
titles issued since a "grant tainted with
fraud
and
secured
through
misrepresentation is null and void and
of no effect whatsoever."44
On the second argument, the Republic
points
out
that
Presidential

Proclamation No. 265 reserved for the

use of the Philippine Army certain
parcels of land which included Lot No.
4354 and Lot No. 4357. Both lots were,
however, allowed to be registered. Lot
No. 4354 was registered as OCT No. 00358 and Lot No. 4357 as OCT No. O669.
The Republic asserts that being part of
the military reservation, these lots are
inalienable and cannot be the subject of
private ownership. Being so, the
respondents do not have registrable
rights over them. Their possession of the
land, however long, could not ripen into
ownership, and they have not shown
proof that they were entitled to the land
before the proclamation or that the said
lots were segregated and withdrawn as
part thereof.
Position of the Respondents
The Bacases
The Bacases anchor their opposition to
the postures of the Republic on three
principal arguments:
First, there was no extrinsic fraud
committed by the Bacases in their
failure to indicate Camp Evangelista as
an adjoining lot owner as their
application for registration substantially
complied with the legal requirements.
More importantly, the Republic was not
prejudiced and deprived of its day in
court.
Second, the LRC had jurisdiction to
adjudicate whether the Bacases had
"private rights" over Lot No. 4354 in
accordance with, and therefore exempt
from the coverage of, Presidential
Proclamation No. 265, as well as to
determine whether such private rights
constituted registrable title under the
land registration law.
Third, the issue of the registrability of
the title of the Bacases over Lot No.
4354 is res judicata and cannot now be

subject to a re-litigation or reopening in

the annulment proceedings.45
Regarding the first ground, the Bacases
stress that there was no extrinsic fraud
because their application substantially
complied with the requirements when
they indicated that Camp Evangelista
was an occupant by mere tolerance of
Lot No. 4354. Also, the Republic filed its
opposition
to
the
respondents
application and actively participated in
the land registration proceedings by
presenting evidence, through the
Director of Lands, who was represented
by the Solicitor General. The Republic,
therefore, was not deprived of its day in
court or prevented from presenting its
case. Its insistence that the noncompliance with the requirements of
Section 15 of P.D. No. 1529 is an
argument that is at once both empty and
dangerous.46
On jurisdiction, the Bacases assert that
even in the case of Republic v.
Estonilo,47 it
was
recognized
in
Presidential Proclamation No. 265 that
the reservation was subject to private
rights. In other words, the LRC had
authority to hear and adjudicate their
application for registration of title over
Lot No. 4354 if they would be able to
prove that their private rights under the
presidential proclamation constituted
registrable title over the said lot. They
claim that there is completely no basis
for the Republic to argue that the LRC
had no jurisdiction to hear and
adjudicate
their
application
for
registration of their title to Lot No. 4354
just because the proclamation withdrew
the subject land from sale and
settlement and reserved the same for
military purposes. They cited the RTC
statement that "the parcels of land they
applied for in those registration
proceedings and for which certificates of
title were issued in their favor are

precisely exempted from the operation

and effect
of
said presidential
proclamation when the very same
proclamation in itself made a proviso
that the same will not apply to lands
with existing private rights therein."48
The Bacases claim that the issue of
registrability is no longer an issue as
what is only to be resolved is the
question on whether there was extrinsic
or collateral fraud during the land
registration proceedings. There would
be no end to litigation on the
registrability of their title if questions of
facts or law, such as, whether or not Lot
No. 4354 was alienable and disposable
land of the public domain prior to its
withdrawal from sale and settlement
and reservation for military purposes
under Presidential Proclamation No.
265; whether or not their predecessorsin-interest had prior possession of the
lot long before the issuance of the
proclamation or the establishment of
Camp Evangelista in the late 1930s;
whether or not such possession was held
in the concept of an owner to constitute
recognizable "private rights" under the
presidential proclamation; and whether
or not such private rights constitute
registrable title to the lot in accordance
with the land registration law, which
had all been settled and duly
adjudicated by the LRC in favor of the
Bacases, would be re-examined under
this annulment case.49
The issue of registrability of the Bacases
title had long been settled by the LRC
and is
res judicata between the Republic and
the respondents. The findings of the
LRC became final when the Republic did
not appeal its decision within the period
to appeal or file a petition to reopen or
review the decree of registration within
one year from entry thereof.50

To question the findings of the court

regarding the registrability of then title
over the land would be an attempt to
reopen issues already barred by res
judicata. As correctly held by the RTC, it
is estopped and barred by prior
judgment to contest the findings of the
LRC.51
The Chabons
In traversing the position of the
Republic, the Chabons insist that the CA
was correct when it stated that there was
substantial
compliance52 with
the
requirements of the P.D. No. 1529
because they expressly stated in their
application that Camp Evangelista was
occupying a portion of it. It is contrary
to reason or common sense to state that
Camp Evangelista is an adjoining owner
when it is occupying a portion thereof.
And as to the decision, it was a
consequence of a proceeding in rem and,
therefore, the decree of registration is
binding and conclusive against all
persons including the Republic who did
not appeal the same. It is now barred
forever to question the validity of the
title issued. Besides, res judicata has set
in because there is identity of parties,
subject matter and cause of action.53
The Chabons also assailed the
proclamation because when it was
issued, they were already the private
owners of the subject parcels of land and
entitled to protection under the
Constitution. The taking of their
property in the guise of a presidential
proclamation is not only oppressive and
arbitrary but downright confiscatory.54
The Issues
The ultimate issues to be resolved are: 1)
whether or not the decisions of the LRC
over the subject lands can still be
questioned; and 2) whether or not the
applications for registration of the
subject parcels of land should be
allowed.

The Courts Ruling

The Republic can question even final
and executory judgment when there was
fraud.
The governing rule in the application for
registration of lands at that time was
Section 21 of Act 49655 which provided
for the form and content of an
application for registration, and it reads:
Section 21. The application shall be in
writing, signed and sworn to by
applicant, or by some person duly
authorized in his behalf. x x x It shall
also state the name in full and the
address of the applicant, and also the
names and addresses of all adjoining
owners and occupants, if known; and, if
not known, it shall state what search has
been made to find them. x x x
The reason behind the law was
explained in the case of Fewkes vs.
Vasquez,56 where it was written:
Under Section 21 of the Land
Registration Act an application for
registration of land is required to
contain, among others, a description of
the land subject of the proceeding, the
name, status and address of the
applicant, as well as the names and
addresses of all occupants of the land
and of all adjoining owners, if known, or
if unknown, of the steps taken to locate
them. When the application is set by the
court for initial hearing, it is then that
notice (of the hearing), addressed to all
persons appearing to have an interest in
the lot being registered and the
adjoining owners, and indicating the
location, boundaries and technical
description of the land being registered,
shall be published in the Official Gazette
for two consecutive times. It is this
publication of the notice of hearing that
is considered one of the essential bases
of the jurisdiction of the court in land
registration cases, for the proceedings
being in rem, it is only when there is

constructive seizure of the land, effected

by the publication and notice, that
jurisdiction over the res is vested on the
court. Furthermore, it is such notice and
publication of the hearing that would
enable all persons concerned, who may
have any rights or interests in the
property, to come forward and show to
the court why the application for
registration thereof is not to be granted.
Here, the Chabons did not make any
mention of the ownership or occupancy
by the Philippine Army. They also did
not indicate any efforts or searches they
had exerted in determining other
occupants of the land. Such omission
constituted fraud and deprived the
Republic of its day in court. Not being
notified, the Republic was not able to file
its opposition to the application and,
naturally, it was not able to file an
appeal either.
The Republic can also question a final
and executory judgment when the LRC
had no jurisdiction over the land in
question
With respect to the Bacases, although
the lower courts might have been correct
in ruling that there was substantial
compliance with the requirements of law
when
they
alleged
that
Camp
Evangelista was an occupant, the
Republic is not precluded and estopped
from questioning the validity of the title.
The success of the annulment of title
does not solely depend on the existence
of actual and extrinsic fraud, but also on
the fact that a judgment decreeing
registration is null and void. In Collado
v. Court of Appeals and the
Republic,57 the Court declared that any
title to an inalienable public land is void
ab initio. Any procedural infirmities
attending the filing of the petition for
annulment of judgment are immaterial
since
the
LRC
never
acquired
jurisdiction over the property. All

proceedings of the LRC involving the

property are null and void and, hence,
did not create any legal effect. A
judgment by a court without jurisdiction
can never attain finality.58 In Collado,
the Court made the following citation:
The Land Registration Court has no
jurisdiction
over
non-registrable
properties, such as public navigable
rivers which are parts of the public
domain, and cannot validly adjudge the
registration of title in favor of private
applicant. Hence, the judgment of the
Court of First Instance of Pampanga as
regards the Lot No. 2 of certificate of
Title No. 15856 in the name of
petitioners may be attacked at any time,
either directly or collaterally, by the
State which is not bound by any
prescriptive period provided for by the
Statute of Limitations.59
Prescription or estoppel cannot lie
against the government
In denying the petition of the Republic,
the CA reasoned out that 1) once a
decree of registration is issued under the
Torrens system and the reglementary
period has passed within which the
decree may be questioned, the title is
perfected and cannot be collaterally
questioned later on;60 2) there was no
commission of extrinsic fraud because
the Bacases allegation of Camp
Evangelistas
occupancy
of
their
property negated the argument that they
committed
misrepresentation
or
concealment amounting to fraud;61 and
3) the Republic did not appeal the
decision and because the proceeding
was one in rem, it was bound to the legal
effects of the decision.
Granting that the persons representing
the government was negligent, the
doctrine of estoppel cannot be taken
against the Republic. It is a well-settled
rule that the Republic or its government
is not estopped by mistake or error on

the part of its officials or agents. In

Republic v. Court of Appeals,62 it was
written:
In any case, even granting that the said
official was negligent, the doctrine of
estoppel cannot operate against the
State . "It is a well-settled rule in our
jurisdiction that the Republic or its
government is usually not estopped by
mistake or error on the part of its
officials or agents (Manila Lodge No. 761
vs. CA, 73 SCRA 166, 186; Republic vs.
Marcos, 52 SCRA 238, 244; Luciano vs.
Estrella, 34 SCRA 769).
Consequently, the State may still seek
the cancellation of the title issued to
Perpetuo Alpuerto and his successorsinterest pursuant to Section 101 of the
Public Land Act. Such title has not
become indefeasible, for prescription
cannot be invoked against the State
(Republic vs. Animas, supra).
The subject lands, being part of a
military reservation, are inalienable and
cannot be the subjects of land
registration proceedings
The application of the Bacases and the
Chabons were filed on November 12,
1964 and May 8, 1974, respectively.
Accordingly, the law governing the
applications was Commonwealth Act
(C.A.) No. 141,63 as amended by RA
1942,64 particularly Sec. 48(b) which
provided that:
Those who by themselves or through
their predecessors in interest have been
in open, continuous, exclusive and
notorious possession and occupation of
agricultural lands of the public domain,
under a bona fide claim of acquisition of
ownership, for at least thirty years
immediately preceding the filing of the
application for confirmation of title
except when prevented by war or force
majeure. These shall be conclusively
presumed to have performed all the
conditions essential to a Government

grant and shall be entitled to a

certificate of title under the provisions of
this chapter.
As can be gleaned therefrom, the
necessary requirements for the grant of
an application for land registration are
the following:
1. The applicant must, by himself or
through his predecessors-in-interest,
have been in possession and occupation
of the subject land;
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 ownership
for at least thirty years immediately
preceding the filing of the application;
and
4. The subject land must be an
agricultural land of the public domain.
As earlier stated, in 1938, President
Quezon
issued
Presidential
Proclamation No. 265, which took effect
on March 31, 1938, reserving for the use
of the Philippine Army parcels of the
public domain situated in the barrios of
Bulua and Carmen, then Municipality of
Cagayan, Misamis Oriental. The subject
parcels of land were withdrawn from
sale or settlement or reserved for
military purposes, "subject to private
rights, if any there be."65
Such power of the President to segregate
lands was provided for in Section 64(e)
of the old Revised Administrative Code
and C.A. No. 141 or the Public Land Act.
Later, the power of the President was
restated in Section 14, Chapter 4, Book
III of the 1987 Administrative Code.
When a property is officially declared a
military
reservation,
it
becomes
inalienable and outside the commerce of
man.66 It may not be the subject of a
contract
or
of
a
compromise
agreement.67 A property continues to be
part of the public domain, not available

for private appropriation or ownership,

until there is a formal declaration on the
part of the government to withdraw it
from being such.68 In the case of
Republic v. Court of Appeals and De
Jesus,69 it was even stated that
Lands covered by reservation are not
subject to entry, and no lawful
settlement
on
them
can
be
acquired.1wphi1 The claims 0f persons
who have settled on, occupied, and
improved a parcel of public land which
is later included in a reservation are
considered worthy of protection and are
usually respected, but where the
President, as authorized by law, issues a
proclamation reserving certain lands
and warning all persons to depart
therefrom, this terminates any rights
previously acquired in such lands by a
person who was settled thereon in order
to obtain a preferential right of
purchase. And patents for lands which
have been previously granted, reserved
from sale, or appropriate, are void.
Regarding the subject lots, there was a
reservation respecting "private rights."
In Republic v. Estonilo,70 where the
Court earlier declared that Lot No. 4318
was part of the Camp Evangelista
Military Reservation and, therefore, not
registrable, it noted the proviso in
Presidential Proclamation No. 265
requiring the reservation to be subject to
private rights as meaning that persons
claiming rights over the reserved land
were not precluded from proving their
claims. Stated differently, the said
proviso did not preclude the LRC from
determining whether or not the
respondents indeed had registrable
rights over the property.
As there has been no showing that the
subject parcels of land had been
segregated
from
the
military
reservation, the respondents had to
prove that the subject properties were

alienable and disposable land of the

public domain prior to its withdrawal
from
sale
and
settlement
and
reservation for military purposes under
Presidential Proclamation No. 265. The
question is of primordial importance
because it is determinative if the land
can in fact be subject to acquisitive
prescription and, thus, registrable under
the Torrens system. Without first
determining the nature and character of
the land, all the other requirements such
as the length and nature of possession
and occupation over such land do not
come into play. The required length of
possession does not operate when the
land is part of the public domain.
In this case, however, the respondents
miserably failed to prove that, before the
proclamation, the subject lands were
already private lands. They merely relied
on such "recognition" of possible private
rights. In their application, they alleged
that
at
the
time
of
their
application,71 they had been in open,
continuous, exclusive, and notorious
possession of the subject parcels of land
for at least thirty (30) years and became
its owners by prescription. There was,
however, no allegation or showing that
the government had earlier declared it
open for sale or settlement, or that it
was already pronounced as inalienable
and disposable.
It is well-settled that land of the public
domain is not ipso facto converted into a
patrimonial or private property by the
mere possession and occupation by an
individual over a long period of time. In
the case of Diaz v. Republic,72it was
written:
But even assuming that the land in
question was alienable land before it was
established as a military reservation,
there was nevertheless still a dearth of
evidence with respect to its occupation

by petitioner and her predecessors-ininterest for more than 30 years. x x x.

x x x.
A mere casual cultivation of portions of
the land by the claimant, and the raising
thereon of cattle, do not constitute
possession under claim of ownership. In
that sense, possession is not exclusive
and notorious as to give rise to a
presumptive grant from the State. While
grazing livestock over land is of course
to be considered with other acts of
dominion to show possession, the mere
occupancy of land by grazing livestock
upon it, without substantial enclosures,
or other permanent improvements, is
not sufficient to support a claim of title
thru acquisitive prescription. The
possession of public land, however long
the period may have extended, never
confers title thereto upon the possessor
because the statute of limitations with
regard to public land does not operate
against the State unless the occupant
can prove possession and occupation of
the same under claim of ownership for
the required number of years to
constitute a grant from the State.
[Emphases supplied]
In the recent case of Heirs of Mario
Malabanan vs. Republic of the
Philippines,73 the Court emphasized that
fundamental is the rule that lands of the
public
domain,
unless
declared
otherwise by virtue of a statute or law,
are inalienable and can never be
acquired by prescription. No amount of
time of possession or occupation can
ripen into ownership over lands of the
public domain. All lands of the public
domain presumably belong to the State
and are inalienable. Lands that are not
clearly under private ownership are also
presumed to belong to the State and,
therefore, may not be alienated or
disposed.74

Another
recent
case,
Diaz
v.
Republic,75 also held that possession
even for more than 30 years cannot
ripen into ownership.76 Possession is of
no moment if applicants fail to
sufficiently and satisfactorily show that
the subject lands over which an
application was applied for was indeed
an alienable and disposable agricultural
land of the public domain. It would not
matter even if they declared it for tax
purposes. In Republic v. Heirs of Juan
Fabio,77the rule was reiterated. Thus:
Well-entrenched is the rule that unless a
land is reclassified and declared
alienable and disposable, occupation in
the concept of an owner, no matter how
long, cannot ripen into ownership and
be registered as a title. Consequently,
respondents could not have occupied the
Lot in the concept of an owner in 1947
and subsequent years when respondents
declared the Lot for taxation purposes,
or even earlier when respondents'
predecessors-in-interest possessed the
Lot, because the Lot was considered
inalienable from the time of its
declaration as a military reservation in
1904. Therefore, respondents failed to
prove, by clear and convincing evidence,
that the Lot is alienable and disposable.
Public lands not shown to have been
classified as alienable and disposable
land remain part of the inalienable
public domain. In view of the lack of
sufficient evidence showing that the Lot
was already classified as alienable and
disposable, the Lot applied for by
respondents is inalienable land of the
public
domain,
not
subject
to
registration under Section 14(1) of PD
1529 and Section 48(b) of CA 141, as
amended by PD 1073. Hence, there is no
need to discuss the other requisites
dealing with respondents' occupation
and possession of the Lot in the concept
of an owner.

While it is an acknowledged policy of the

State to promote the distribution of
alienable public lands to spur economic
growth and in line with the ideal of
social justice, the law imposes stringent
safeguards upon the grant of such
resources lest they fall into the wrong
hands to the prejudice of the national
patrimony. We must not, therefore,
relax the stringent safeguards relative to
the registration of imperfect titles.
[Emphases Supplied]
In Estonilo,78 where the Court ruled that
persons claiming the protection of
"private rights" in order to exclude their
lands from military reservations must
show by clear and convincing evidence
that the properties in question had been
acquired by a legal method of acquiring
public lands, the respondents therein
failed to clearly prove that the lands over
which they lay a claim were alienable
and disposable so that the same
belonged and continued to belong to the
State and could not be subject to the
commerce of man or registration.
Specifically, the Court wrote:
Land that has not been acquired from
the government, either by purchase or
by grant, belongs to the State as part of
the public domain. For this reason,
imperfect titles to agricultural lands are
subjected to rigorous scrutiny before
judicial confirmation is granted. In the
same manner, persons claiming the
protection of "private rights" in order to
exclude their lands from military
reservations must show by clear and
convincing evidence that the pieces of
property in question have been acquired
by a legal method of acquiring public
lands.
In
granting
respondents
judicial
confirmation of their imperfect title, the
trial and the appellate courts gave much
weight to the tax declarations presented
by the former. However, while the tax

declarations were issued under the

names of respondents predecessors-ininterest, the earliest one presented was
issued only in 1954.19 The Director,
Lands Management Bureau v. CA20 held
thus:
"x x x. Tax receipts and tax declarations
are not incontrovertible evidence of
ownership.1wphi1 They
are
mere
indicia of [a] claim of ownership. In
Director of Lands vs. Santiago:
x x x [I]f it is true that the original
owner
and
possessor,
Generosa
Santiago, had been in possession since
1925, why were the subject lands
declared for taxation purposes for the
first time only in 1968, and in the names
of Garcia and Obdin? For although tax
receipts and declarations of ownership
for
taxation
purposes
are
not
incontrovertible evidence of ownership,
they constitute at least proof that the
holder had a claim of title over the
property."
In addition, the lower courts credited
the alleged prior possession by Calixto
and Rosendo Bacas, from whom
respondents
predecessors
had
purportedly bought the property. This
alleged prior possession, though, was
totally devoid of any supporting
evidence on record. Respondents
evidence
hardly
supported
the
conclusion that their predecessors-ininterest had been in possession of the
land since "time immemorial."
Moreover, as correctly observed by the
Office of the Solicitor General, the
evidence on record merely established
the transfer of the property from Calixto
Bacas to Nazaria Bombeo . The evidence
did not show the nature and the period
of the alleged possession by Calixto and
Rosendo Bacas. It is important that
applicants for judicial confirmation of
imperfect titles must present specific
acts of ownership to substantiate their

claims; they cannot simply offer general

statements that are mere conclusions of
law rather than factual evidence of
possession.
It must be stressed that respondents, as
applicants, have the burden of proving
that they have an imperfect title to Lot
4318. Even the absence of opposition
from the government does not relieve
them of this burden. Thus, it was
erroneous for the trial and the appellate
courts to hold that the failure of the
government to dislodge respondents,
judicially or extrajudicially, from the
subject land since 1954 already
amounted to a title. [Emphases
supplied]
The ruling reiterated the long standing
rule in the case of Director Lands
Management Bureau v. Court of
Appeals,79
x x x. The petitioner is not necessarily
entitled to have the land registered
under the Torrens system simply
because no one appears to oppose his
title and to oppose the registration of his
land. He must show, even though there
is no opposition to the satisfaction of the
court, that he is the absolute owner, in
fee simple. Courts are not justified in
registering property under the Torrens
system, simply because there is no
opposition offered. Courts may, even in
the absence of any opposition, deny the
registration of the land under the
Torrens system, upon the ground that
the facts presented did not show that the
petitioner is the owner, in fee simple, of
the land which he is attempting to have
registered.
The Court is not unmindful of the
principle of immutability of judgments
that nothing is more settled in law than
that once a judgment attains finality it
thereby becomes immutable and
unalterable.80 Such principle, however,
must yield to the basic rule that a

decision which is null and void for want

of jurisdiction of the trial court is not a
decision m contemplation of law and
can never become final and executory.81
Had the LRC given primary importance
on the status of the land and not merely
relied on the testimonial evidence of the
respondents without other proof of the
alienability of the land, the litigation
would have already been ended and
finally settled in accordance with law
and jurisprudence a long time ago.
WHEREFORE,
the
petition
is
GRANTED. The November 12, 2007
Decision and the May 15, 2008
Resolution of the Court of Appeals in
CAG.R. CV No. 64142 are hereby
REVERSED and SET ASIDE. Judgment
is rendered declaring the proceedings in
the Land Registration Court as NULL
and VOID for lack of jurisdiction.
Accordingly, Original Certificate of Title
Nos. 0-358 and 0-669 issued by the
Registry of Deeds of Cagayan de Oro
City are CANCELLED. Lot No. 4354 and
Lot No. 4357 are ordered reverted to the
public domain.
SO ORDERED.
G.R. No. 170740
May 25,
2007
JULITA
P.
TAN, Petitioner,
vs.
THE
REPUBLIC
OF
THE
PHILIPPINES, Represented by the
PUBLIC
ESTATES
AUTHORITY, Respondent.
DECISION
SANDOVAL-GUTIERREZ, J.:
For our resolution is the Petition for
Review
on Certiorari assailing
the
Decision1 of the Court of Appeals
(Thirteenth Division, Special Division of
Five) dated July 6, 2005 in CA-G.R. SP
No. 84667.
The undisputed facts of the case are:

Julita P. Tan, petitioner herein, is the

registered owner of a parcel of land
consisting of 7,161 square meters located
at the southern bank of the Zapote River
in Sitio Wawa, Pulang Lupa, Las Pias
City. Her ownership is evidenced by
Transfer Certificate of Title (TCT) No.
78188 of the Registry of Deeds, same
city. She acquired this property from the
San Antonio Development Corporation
(SADC) as shown by a document
denominated "Irrevocable and Exclusive
Special Power of Attorney" dated April
6, 2001, whereby she assumed SADCs
"obligation of paying all imposable taxes
due said land." In consideration of such
assumption and "for value" she "stepped
into the shoes" of SADC "free to exercise
such rights and prerogatives as owner of
the subject property, including the right
to collect and demand payment for the
sale and/or use of the subject land or
any portion thereof, by and from any
person or entity."
The Public Estates Authority (PEA) is a
government-owned
and
controlled
corporation, organized and existing
pursuant to Presidential Decree (P.D.)
No. 1084 representing in this case the
Republic of the Philippines, herein
respondent. Among the properties PEA
manages is the Manila-Cavite Coastal
Road (Coastal Road), also known as the
R-1 Expressway.
Prior to the transfer of the property to
petitioner by SADC, or on March 29,
1985, PEA wrote SADC requesting
permission to enter the latters property,
then covered by TCT No. 439101, for the
purpose of constructing thereon the
southern abutment of the Zapote Bridge
at the Coastal Road. PEA also proposed
to SADC to start their negotiation for its
acquisition of the latters property.
On April 11, 1985, SADC replied
authorizing PEA to enter the property,
subject to the condition that the latter

should
pay
a
monthly
rental
of P10,000.00. PEA then directed its
contractor, the Philippine National
Construction Corporation, to enter the
property and begin the necessary
engineering works on the Coastal Road.
In a letter dated May 28, 1985, PEA
requested SADC either to donate or sell
the property to the government.
On October 22, 1985, SADC replied by
offering to sell the property to PEA.
SADCs asking price wasP1,288,980.00
plus P400,000.00 as compensation for
the house and other improvements
thereon that were destroyed during the
construction of the Coastal Road.
On January 7, 1987, PEA informed
SADC it has no plan to buy the whole
lot, but only the 1,131 square meter
portion above sea level. PEA then asked
SADC to submit proofs of ownership
and costs of the improvements which
were demolished.
Negotiations then ensued between the
parties. However, for the past twenty
(20) years, they failed to reach an
agreement.
On October 2, 2000, SADC asked PEA
to pay compensation equivalent to the
current zonal value plus interest of ten
percent (10%) per annum and a monthly
rental of P10,000.00, also with the same
interest. These sums, according to
SADC, could be considered just
compensation for the governments use
of the property since 1985 until
September 2000 and thereafter.
The following month, PEA inquired
from the Bureau of Internal Revenue
(BIR) District 53, Alabang, Muntinlupa
City the zonal value of the SADC
property. It submitted to the BIR the
appraisal reports prepared by two (2)
independent licensed appraisers.
On April 6, 2001, petitioner Julita
Tan acquired the property from
SADC.1a\^/phi1.net

On July 12, 2001, the BIR sent a letter to

PEA stating that the zonal value of the
property is P2,900.00 per square meter,
with the caveat that the said assessment
is subject to review and approval by
higher tax authorities.
On October 9, 2001, the BIR informed
PEA that the current zonal value of
the property is P20,000.00 per square
meter.
In the meantime, the construction of the
Coastal Road was completed. PEA
entered into a Joint Venture Agreement
with the Toll Regulatory Board and the
UEM-MARA Philippine Corporation for
the toll operation of the Coastal Road, as
shown by the Certificate of the Secretary
of the Toll Regulatory Board dated May
13, 2003.2
PEA has been collecting toll fees from
the road users in the average amount
of P1,039,404.85 per day, as shown by a
document denominated "Traffic Count
of the Year 2002.3 Despite its collection
of huge toll fees, PEA continuously
refuses
to
pay
petitioner
any
compensation.
On October 22, 2001, petitioner, in her
desperation, wrote PEA expressing her
willingness to be compensated through a
land swapping arrangement. She
proposed that PEAs Fishermans Wharf
be given to her in exchange for her
property.
On August 6, 2002, the PEA Board
approved the exchange of a portion of
petitioners lot consisting of 4,719
square meters for PEAs Lot 12 with an
area of 2,360 square meters. The parties
entered into a Memorandum of
Agreement wherein PEA agreed to
execute a Deed of Exchange by way of
compensation for petitioners property
affected by the Coastal Road.
However, on June 18, 2003, PEA
withdrew from the land swapping
agreement.1a\^/phi1.net Instead,
on

September 22, 2003, it filed with the

Regional Trial Court (RTC), Branch 202,
Las Pias City a complaint for
expropriation, docketed as Civil Case
No. 03-0220. PEA alleged therein,
among others, that its liability for just
compensation is based on the zonal
value of the land at the time of the
taking in 1985. Thus, it is liable for
only P852,993.51 for the 4,719 square
meter portion. In her answer, petitioner
claimed that PEA should pay for the
whole area consisting of 7,161 square
meters at P20,000.00 per square meter,
the zonal value set by the BIR pursuant
to Republic Act No. 8974.4 She then
prayed
that
she
be
paid P143,200,000.00 plus interest of
twelve percent (12%) per annum, aside
from the P10,000.00 monthly rental
with 12% interest per annum for the
occupancy and use of the property since
April 1985 up to the present.
On October 20, 2003, petitioner filed
with the RTC a motion to order PEA to
immediately pay her just compensation
based on the zonal valuation of the BIR.
This was opposed by PEA.
On December 16, 2003, the trial court
issued the following Order5:
WHEREFORE, finding merit to the
"Motion To Order the Plaintiff to
Immediately Pay Defendant Her
Expropriated Property," dated October
20, 2003, the same is hereby
GRANTED.
Accordingly,
plaintiff,
through PEA, is hereby ordered to
immediately pay defendant the sum
of P94,380,000.00 (ninety-four million,
three hundred eighty thousand pesos)
representing the just compensation for
the 4,719 square meters of defendants
property covered by TCT No. 78188 of
the Registry of Deeds of Las Pias based
on P20,000.00 per square meter zonal
valuation of the Bureau of Internal
Revenue.

SO ORDERED.
PEA timely filed a motion for
reconsideration but it was denied by the
trial court in its Order6 dated April 14,
2004.
PEA then elevated the matter to the
Court of Appeals by way of a petition
for certiorari, prohibition,
and
mandamus.
On July 6, 2005, the Court of Appeals
rendered its Decision, the dispositive
portion of which reads:
WHEREFORE, the instant petition for
certiorari and prohibition is hereby
GRANTED while that of mandamus is
hereby DENIED (sic). Accordingly, the
assailed Orders, dated December 16,
2003 and April 14, 2004, are hereby
REVERSED and SET ASIDE. Public
respondent is hereby ordered to DESIST
from enforcing the assailed Orders.
SO ORDERED.
Petitioner
filed
a
motion
for
reconsideration. In a Resolution dated
December 12, 2005, the Court of
Appeals denied the same.
Hence, the present petition anchored on
these twin issues: Whether the Court of
Appeals erred in sustaining PEAs
petition for certiorari and prohibition
and in dismissing that for mandamus;
and in holding that the just
compensation for petitioners property
should be based on the BIR zonal
valuation in 1985 when petitioner
entered
the
subject
property.1awphi1.nt
The first issue involves the nature of the
two Orders of the trial court dated
December 16, 2003 and April 14, 2004.
The Order of December 16, 2003
directed PEA to pay petitioner just
compensation
in
the
sum
ofP94,380,000.00. The Order of April
14, 2004 denied PEAs motion for
reconsideration. Are these orders final
or interlocutory?

Sec. 1, Rule 41 of the 1997 Rules of Civil

Procedure, as amended, partly provides:
SEC. 1. Subject of appeal. An appeal
may be taken from a judgment or final
order that completely disposes of the
case, or of a particular matter therein
when declared by these Rules to be
appealable.
No appeal may be taken from:
xxx
(c) an interlocutory order.
xxx
A final order is one that disposes of the
subject matter in its entirety or
terminates a particular proceeding or
action, leaving nothing else to be done
but to enforce by execution what has
been determined by the court, while an
interlocutory order is one which does
not dispose of the case completely but
leaves something to be decided upon.7
Under Rule 67 of the same Rules, there
are two (2) stages in a condemnation
proceeding:8
(1) Determination of the authority of the
plaintiff to exercise the power of
eminent domain and the propriety of its
exercise in the context of the facts
involved in the suit. It ends with an
order, if not of dismissal of the action,
with condemnation declaring that the
plaintiff has a lawful right to take the
property sought to be condemned for
the public use or purpose described in
the complaint, upon payment of just
compensation.
An
order
of
expropriation is final.9 An order of
dismissal, if this be ordained, would be a
final one, as it finally disposes of the
action and leaves nothing more to be
done by the court on the merits. 10 The
order of expropriation would also be a
final one for after its issuance, no
objection to the right of condemnation
shall be heard. The order of
expropriation may be appealed by any

party aggrieved thereby by filing a

record on appeal.11
(2) Determination by the court of the
just compensation for the property
sought to be taken with the assistance of
not
more
than
three
(3)
commissioners. The order fixing the
just compensation on the basis of
the evidence before the court and
findings
of
the
commissioners would likewise be a
final one, as it would leave nothing
more to be done by the court regarding
this issue. A second and separate appeal
may be taken from this order fixing the
just compensation.
The trial courts Orders in Civil
Case No. 03-0220 required PEA to
pay
petitioner P94,380,000.00
representing
the
just
compensation for her 4,719 square
meter lot based on the BIR zonal
valuation
ofP20,000.00
per
square meter. Clearly, the Orders are
final, hence, appealable. However,
instead of appealing from the said
Orders within the reglementary period,
PEA resorted to certiorari, prohibition
and mandamus. It is basic that the
remedy of certiorari is not a substitute
for a lost appeal, as in this case.
On the second issue, Section 9, Article
III of the Constitution specifically
mandates that "Private property shall
not be taken for public use without just
compensation."
In City of Manila v. Estrada,12 we held
that
"compensation"
means
"an
equivalent for the value of land
(property) taken." The use of the word
"just" is "to convey the idea that the
equivalent to be rendered for the
property taken shall be real, substantial,
full, ample." Thus, Estrada defined just
compensation as "a fair and full
equivalent for the loss sustained." This
definition has been reiterated in Manila

Railroad
Co.
v.
Velasquez[13] and Province of Tayabas
v. Perez.14 Then in Manila Railroad Co.
v. Caligsahan,15 we held that "to be
exactly just, the compensation should be
estimated at the time of the taking."
Subsequently, in Republic v. Vda. de
Castellvi,16 we
ruled
that just
compensation is determined as of
the date of the taking of the
property or the filing of the
complaint, whichever came first.
The Court of Appeals, in its challenged
Decision, held that PEAs taking of
petitioners property occurred in 1985.
Even if PEA requested permission to
enter the subject property and petitioner
granted such request on condition that
PEA should pay a monthly rental
of P10,000.00, "it does not change the
fact that there was taking of the
property for public use." Consequently,
the compensation should be computed
on the basis of the zonal value of the
property at that time (1985) which
was P2,900.00 per square meter per
letter dated July 12, 2001 of the BIR to
PEA.
The Court of Appeals is wrong. PEAs
entry into the property with the
permission of SADC, its previous owner,
was not for the purpose of expropriating
the property. Records show and as
stressed by Mr. Justice Renato C.
Dacudao of the Court of Appeals in his
Dissenting Opinion, SADC allowed PEA
to enter the land on condition that it
should
pay
a
monthly
rental
of P10,000.00. Thereafter, PEA, in a
letter dated May 28, 1985, requested
SADC to donate or sell the land to the
government. On October 22, 1985,
SADC responded, offering to sell the
land
to
PEA
for P1,288,980.00,
plus P400,000.00 representing the
value of the improvements destroyed by
PEA when it entered the property.

However, since 1985 up to the present,

no agreement has been reached between
PEA and SADC or herein petitioner who
acquired the property from the latter.
While PEA has been earning huge toll
fees, it has refused to pay petitioner any
compensation for the use of her
property in violation of her right as an
owner.
The above circumstances clearly show
that when PEA entered petitioners land
in 1985, it was not for the purpose of
expropriating it. We stress that after its
entry, PEA wrote SADC requesting to
donate or sell the land to the
government. Indeed, there was no
intention on the part of PEA to
expropriate the subject property. Why
did it ask permission from SADC to
enter the property? Thereafter, why did
it request SADC to donate or sell the
land to the government? It could have
simply exercised its power of eminent
domain.
Section 2, Rule 67 (on Expropriation) of
the same Rules provides, among others,
that upon the filing of the complaint or
at any time thereafter and after due
notice to the defendant, the plaintiff
shall have the right to take or enter upon
the possession of the real property
involved if he deposits with the
authorized government depositary an
amount equivalent to the assessed value
of the property. It bears reiterating that
in Republic v. Vda. de Castellvi,17 we
ruled that just compensation is
determined as of the date of the taking
of the property or the filing of the
complaint, whichever came first.
We have made it clear that there was no
taking of the property in 1985 by PEA
for purposes of expropriation. As shown
by the records, PEA filed with the RTC
its petition for expropriation on
September 22, 2003. The trial court,
therefore, was correct in ordering

respondent, through PEA, upon the

filing of its complaint for expropriation,
to pay petitioner just compensation on
the basis of the BIR zonal valuation of
the subject property at P20,000.00 per
square meter.
In sum, we rule that the Court of
Appeals erred (1) in not dismissing
PEAs petition for certiorari, prohibition
and mandamus; and (2) in ruling that
PEAs taking of the property occurred in
1985 and that the compensation should
be based on the BIR zonal valuation in
that year.
WHEREFORE, the assailed Decision
of the Court of Appeals dated July 6,
2005, in CA-G.R. SP No. 84667
isREVERSED. The Decision of the
RTC, Branch 202, Las Pias City
is AFFIRMED.
SO ORDERED.
REPUBLIC
177790)

vs.

VEGA

(GR

No.

DECISION
SERENO, J.:
This is a Rule 45 Petition filed by the
Republic of the Philippines (petitioner
Republic), through the Office of the
Solicitor General (OSG), questioning the
Decision of the Court of Appeals,
[1]
which affirmed a lower courts grant of
an application for original registration of
title covering a parcel of land located in
Los Baos, Laguna.
The facts of the case as culled from the
records of the trial court and the
appellate court are straightforward and
without much contention from the
parties.
On 26 May 1995, respondents Carlos R.
Vega, Marcos R. Vega, Rogelio R. Vega,
Lubin R. Vega and Heirs of Gloria R.
Vega namely, Francisco L. Yap, Ma.
Winona Y. Rodriguez, Ma. Wendelyn V.
Yap and Francisco V. Yap, Jr.

(respondents Vegas) filed an application

for registration of title. The application
covered a parcel of land, identified as
Lot No. 6191, Cadastre 450 of Los Baos,
Laguna, with a total area of six thousand
nine hundred two (6,902) square meters
(the subject land). The case was
docketed as Land Registration Case No.
103-95-C and raffled to the Regional
Trial Court of Calamba, Laguna, Branch
92.
Respondents Vegas alleged that they
inherited the subject land from their
mother, Maria Revilleza Vda. de Vega,
who in turn inherited it from her father,
Lorenzo Revilleza. Their mothers
siblings (two brothers and a sister) died
intestate, all without leaving any
offspring.
On 21 June 1995, petitioner Republic
filed an opposition to respondents Vegas
application for registration on the
ground, inter alia, that the subject land
or portions thereof were lands of the
public domain and, as such, not subject
to private appropriation.
During the trial court hearing on the
application for registration, respondents
Vegas presented several exhibits in
compliance with the jurisdictional
requirements, as well as witnesses to
prove respondents Vegas ownership,
occupation and possession of the land
subject of the registration. Significant
was the testimony of Mr. Rodolfo
Gonzales, a Special Investigator of the
Community Environment and Natural
Resources Office (CENRO) of Los Baos,
Laguna, under the Department of
Environment and Natural Resources
(DENR). He attested to having
conducted an inspection of the subject
land[2] and identified the corresponding
Report dated 13 January 1997, which he
had submitted to the Regional Executive
Director, Region IV. The report stated

that the area subject of the investigation

was entirely within the alienable and
disposable zone, and that there was no
public land application filed for the
same land by the applicant or by any
other person.[3]
During
the
trial,
respondentsintervenors Romea G. Buhay-Ocampo,
Francisco G. Buhay, Arceli G. BuhayRodriguez, Orlando G. Buhay, Soledad
G. Buhay-Vasquez, Loida G. BuhaySenadosa, Florendo G. Buhay, Oscar G.
Buhay, Erlyn Buhay-Ginorga, Evelyn
Buhay-Grantea and Emilie Buhay-Dallas
(respondents-intervenors
Buhays)
entered their appearance and moved to
intervene
in
respondents
Vegas
application
for
registration.
[4]
Respondents-intervenors
Buhays
claimed a portion of the subject land
consisting of eight hundred twenty-six
(826) square meters, purportedly sold
by respondents Vegas mother (Maria
Revilleza Vda. de Vega) to the formers
predecessors-in-interest - the sisters
Gabriela Gilvero and Isabel Gilverio - by
virtue of a Bilihan ng Isang Bahagi ng
Lupang Katihan dated 14 January 1951.
[5]
They likewise formally offered in
evidence Subdivision Plan Csd-04024336-D, which indicated the portion
of the subject land, which they claimed
was sold to their predecessors-ininterest.[6]
In a Decision dated 18 November 2003,
the trial court granted respondents
Vegas application and directed the Land
Registration Authority (LRA) to issue
the corresponding decree of registration
in the name of respondents Vegas and
respondents-intervenors
Buhays
predecessors, in proportion to their
claims over the subject land.
Petitioner Republic appealed the
Decision of the trial court, arguing that
respondents Vegas failed to prove that
the subject land was alienable and

disposable, since the testimony of Mr.

Gonzales did not contain the date when
the land was declared as such.
Unpersuaded by petitioner Republics
arguments, the Court of Appeals
affirmed in toto the earlier Decision of
the trial court. Aggrieved by the ruling,
petitioner filed the instant Rule 45
Petition with this Court.
Respondents Vegas, who are joined by
respondents-intervenors
Buhays
(collectively,
respondents),
raise
procedural issues concerning the filing
of the instant Petition, which the Court
shall resolve first. Briefly, respondents
found, in the instant
Petition,
procedural deficiencies that ought to
warrant its outright dismissal. These
deficiencies are as follows: (a) petitioner
Republic failed to include the pertinent
portions of the record that would
support its arguments under Rule 45,
Section 4 (d) of the Rules of Court,
specifically the Appellees Brief of
respondents Vegas in the appellate
proceedings; and (b) it raised questions
of fact, which are beyond the purview of
a Rule 45 Petition.[7]
The Court is not persuaded by
respondents arguments concerning the
purported defects of the Petition.
First, petitioner Republics failure to
attach a copy of respondents Vegas
Appellees Brief to the instant Petition
is not a fatal mistake, which merits the
immediate dismissal of a Rule 45
Petition. The requirement that a petition
for review on certiorari should be
accompanied by such material portions
of the record as would support the
petition is left to the discretion of the
party filing the petition. [8] Except for the
duplicate original or certified true copy
of the judgment sought to be appealed
from,[9] there are no other records from
the court a quo that must perforce be

attached before the Court can take

cognizance of a Rule 45 petition.
Respondents cannot fault petitioner
Republic for excluding pleadings,
documents or records in the lower court,
which to their mind would assist this
Court in deciding whether the Decision
appealed from is sound. Petitioner
Republic is left to its own estimation of
the case in deciding which records
would support its Petition and should
thus be attached thereto. In any event,
respondents are not prevented from
attaching to their pleadings pertinent
portions of the records that they deem
necessary for the Courts evaluation of
the case, as was done by respondents
Vegas in this case when they attached
their Appellees Brief to their Comment.
In the end, it is the Court, in finally
resolving the merits of the suit that will
ultimately decide whether the material
portions of the records attached are
sufficient to support the Petition.
Second, the Petition raises a question of
law, and not a question of fact.
Petitioner Republic simply takes issue
against the conclusions made by the trial
and the appellate courts regarding the
nature and character of the subject
parcel of land, based on the evidence
presented. When petitioner asks for a
review of the decisions made by a lower
court based on the evidence presented,
without delving into their probative
value but simply on their sufficiency to
support the legal conclusions made,
then a question of law is raised.
In New Rural Bank of Guimba (N.E.)
Inc. v. Fermina S. Abad and Rafael
Susan,[10] the Court reiterated the
distinction between a question of law
and a question of fact in this wise:
We reiterate the distinction between a
question of law and a question of fact. A
question of law exists when the doubt or

controversy concerns the correct

application of law or jurisprudence to a
certain set of facts; or when the issue
does not call for an examination of
the probative value of the evidence
presented, the truth or falsehood
of the facts being admitted. A
question of fact exists when a doubt or
difference arises as to the truth or
falsehood of facts or when the query
invites calibration of the whole
evidence considering mainly the
credibility of the witnesses, the
existence and relevancy of specific
surrounding circumstances, as
well as their relation to each other
and to the whole, and the
probability
of
the
situation.
(Emphasis supplied)
Petitioner Republic is not calling for an
examination of the probative value or
truthfulness of the evidence presented,
specifically the testimony of Mr.
Gonzales. It, however, questions
whether the evidence on record is
sufficient to support the lower courts
conclusion that the subject land is
alienable and disposable. Otherwise
stated,
considering
the
evidence
presented by respondents Vegas in the
proceedings below, were the trial and
the appellate courts justified under the
law and jurisprudence in their findings
on the nature and character of the
subject land? Undoubtedly, this is a pure
question of law, which calls for a
resolution of what is the correct and
applicable law to a given set of facts.
Going now to the substantial merits,
petitioner Republic places before the
Court the question of whether, based on
the evidence on record, respondents
Vegas have sufficiently established that
the subject land is alienable and
disposable. Was it erroneous for the
Court of Appeals to have affirmed the

trial courts grant of registration applied

for by respondents Vegas over the
subject land? We find no reversible error
on the part of either the trial court or the
Court of Appeals.
Presidential Decree No. 1529, otherwise
known as the Property Registration
Decree, provides for the instances when
a person may file for an application for
registration of title over a parcel of land:
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:
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. x x x.

Thus, pursuant to the afore-quoted

provision of law, applicants for
registration of title must prove the
following: (1) that the subject land
forms part of the disposable and
alienable lands of the public
domain; and (2) that they have been in
open,
continuous,
exclusive
and
notorious possession and occupation of
the land under a bona fide claim of
ownership since 12 June 1945 or earlier.
[11]
Section 14 (1) of the law requires that
the property sought to be registered is
already alienable and disposable at the
time the application for registration is
filed.[12]
Raising no issue with respect to
respondents Vegas open, continuous,

exclusive and notorious possession of

the subject land in the present Petition,
the Court will limit its focus on the first
requisite: specifically, whether it has
sufficiently been demonstrated that the
subject land is alienable and disposable.
Unless a land is reclassified and
declared alienable and disposable,
occupation of the same in the concept of
an owner - no matter how long -cannot
ripen into ownership and result in a
title; public lands not shown to have
been classified as alienable and
disposable lands remain part of the
inalienable domain and cannot confer
ownership or possessory rights.[13]
Matters of land classification or
reclassification cannot be assumed; they
call for proof.[14] To prove that the land
subject of an application for registration
is alienable, an applicant must
conclusively establish the existence of a
positive act of the government, such as
any of the following: a presidential
proclamation or an executive order;
other
administrative
actions;
investigation reports of the Bureau of
Lands investigator; or a legislative act or
statute.[15] The applicant may also secure
a certification from the government that
the lands applied for are alienable and
disposable.[16]
Previously, a certification from the
DENR that a lot was alienable and
disposable was sufficient to establish the
true nature and character of the
property and enjoyed the presumption
of regularity in the absence of
contradictory evidence.[17]
However,
in Republic
v.
T.A.N.
Properties, Inc.,[18] the Supreme Court
overturned the grant by the lower courts
of an original application for registration
over a parcel of land in Batangas and
ruled that a CENRO certification
is not enough to certify that a land is
alienable and disposable:

Further, it is not enough for the

PENRO or CENRO to certify that a
land
is
alienable
and
disposable. The applicant for land
registration must prove that the DENR
Secretary had approved the land
classification and released the land of
the public domain as alienable and
disposable, and that the land subject of
the application for registration falls
within
the
approved
area
per
verification through survey by the
PENRO or CENRO. In addition, the
applicant for land registration
must present a copy of the original
classification approved by the
DENR Secretary and certified as a
true copy by the legal custodian of
the official records. These facts
must be established to prove that
the
land
is
alienable
and
disposable. Respondent failed to do so
because the certifications presented by
respondent do not, by themselves, prove
that the land is alienable and disposable.
(Emphasis supplied)
Thus, as it now stands, aside from a
CENRO certification, an application for
original registration of title over a parcel
of land must be accompanied by a copy
of the original classification approved by
the DENR Secretary and certified as a
true copy by the legal custodian of the
official records in order to establish that
the land indeed is alienable and
disposable.[19]
To comply with the first requisite for an
application for original registration of
title under the Property Registration
Decree, respondents Vegas should have
submitted a CENRO certification and a
certified true copy of the original
classification by the DENR Secretary
that the land is alienable and disposable,
together
with
their
application.

However, as pointed out by the Court of

Appeals, respondents Vegas failed to
submit a CENRO certification -- much
less an original classification by the
DENR Secretary -- to prove that the land
is classified as alienable and disposable
land of the public domain.[20] If the
stringent rule imposed in Republic v.
T.A.N. Properties, Inc., is to be followed,
the absence of these twin certifications
justifies a denial of an application for
registration. Significantly, however, the
Courts pronouncement in Republic v.
T.A.N. Properties, Inc., was issued after
the decisions of the trial court [21] and the
appellate court[22] in this case.
Recently, however, in Republic v.
Serrano,[23] the Court affirmed the
findings of the trial and the appellate
courts that the parcel of land subject of
registration
was
alienable
and
disposable. The Court held that a DENR
Regional
Technical
Directors
certification, which is annotated on the
subdivision plan submitted in evidence,
constitutes substantial
compliance with
the
legal
requirement:
While Cayetano failed to submit any
certification which would formally attest
to the alienable and disposable character
of
the
land
applied
for, the
Certification by DENR Regional
Technical
Director
Celso
V.
Loriega, Jr., as annotated on the
subdivision plan submitted in
evidence by Paulita, constitutes
substantial compliance with the
legal requirement. It clearly
indicates that Lot 249 had been
verified as belonging to the
alienable and disposable area as
early as July 18, 1925.
The DENR certification enjoys the
presumption of regularity absent any
evidence to the contrary. It bears

noting that no opposition was filed

or
registered
by
the
Land
Registration Authority or the
DENR to contest respondents'
applications on the ground that
their respective shares of the lot
are inalienable. There being no
substantive rights which stand to be
prejudiced,
the
benefit
of
the
Certification may thus be equitably
extended in favor of respondents.
(Emphasis supplied)
Indeed, the best proofs in registration
proceedings that a land is alienable and
disposable are a certification from the
CENRO or Provincial Environment and
Natural Resources Office (PENRO) and
a certified true copy of the DENRs
original classification of the land. The
Court, however, has nonetheless
recognized and affirmed applications for
land registration on other substantial
and convincing evidence duly presented
without any opposition from the LRA or
the DENR on the ground of substantial
compliance.
Applying these precedents, the Court
finds that despite the absence of a
certification by the CENRO and a
certified true copy of the original
classification by the DENR Secretary,
there has been substantial compliance
with the requirement to show that the
subject land is indeed alienable and
disposable based on the evidence on
record.
First, respondents Vegas were able to
present Mr. Gonzales of the CENRO
who testified that the subject land is
alienable and disposable, and who
identified his written report on his
inspection of the subject land.
In the Report,[24] Mr. Gonzales attested
under oath that (1) the area is entirely
within
the
alienable
and
disposable zone as classified under

Project No. 15, L.C. Map No. 582,

certified on 31 December 1925;
[25]
(2) the land has never been forfeited
in favor of the government for nonpayment of taxes; (3) the land is not
within
a
previously
patented/decreed/titled property;[26] (4)
there are no public land application/s
filed by the applicant for the same land;
[27]
and
(5)
the
land
is
residential/commercial.[28] That
Mr.
Gonzales appeared and testified before
an open court only added to the
reliability of the Report, which classified
the subject land as alienable and
disposable public land. The Court
affirms the Court of Appeals conclusion
that Mr. Gonzales testimony and written
report
under
oath
constituted
substantial evidence to support their
claim as to the nature of the subject
land.
Second, Subdivision Plan Csd-0402433-6, formally offered as evidence by
respondents-intervenors
Buhays,
[29]
expressly indicates that the land is
alienable and disposable. Similar
to Republic v. Serrano, Mr. Samson G.
de Leon, the officer-in-charge of the
Office of the Assistant Regional
Executive Director for Operations of the
DENR, approved the said subdivision
plan, which was annotated with the
following proviso: [T]his survey is
inside alienable and disposable
area as per Project No. 15, L.C.
Map No. 582, certified on Dec. 31,
1925. Notably, Mr. De Leons annotation
pertaining to the identification of the
land as alienable and disposable
coincides with the investigation report
of Mr. Gonzales.
Finally, upon being informed of
respondents Vegas application for
original registration, the LRA never
raised the issue that the land subject of
registration was not alienable and

disposable. In the Supplementary

Report submitted during the trial court
proceedings,[30] the
LRA
did
not
interpose any objection to the
application on the basis of the nature of
the land. It simply noted that the subject
subdivision plan (Psu-51460) had also
been applied for in Case No. 1469,
GLRO Record No. 32505, but that there
was no decree of registration issued
therefor. Thus, the LRA recommended
that should the instant case be given due
course, the application in Case No. 1469,
GLRO Record No. 32505 with respect to
plan Psu-51460 be dismissed. In
addition, not only did the government
fail to cross-examine Mr. Gonzales, it
likewise chose not to present any
countervailing evidence to support its
opposition. In contrast to the other cases
brought
before
this
Court,[31] no
opposition was raised by any interested
government body, aside from the pro
forma opposition filed by the OSG.
The onus in proving that the land is
alienable and disposable still remains
with the applicant in an original
registration
proceeding;
and
the
government, in opposing the purported
nature of the land, need not adduce
evidence to prove otherwise.[32] In this
case though, there was no effective
opposition,
except
the pro
forma opposition of the OSG, to
contradict the applicants claim as to the
character of the public land as alienable
and disposable. The absence of any
effective
opposition
from
the
government,
when
coupled
with
respondents other pieces of evidence on
record persuades this Court to rule in
favor of respondents.
In the instant Petition, petitioner
Republic also assails the failure of Mr.
Gonzales to testify as to when the land
was declared as alienable and
disposable. Indeed, his testimony in

open court is bereft of any detail as to

when the land was classified as alienable
and disposable public land, as well as
the date when he conducted the
investigation. However, these matters
could have been dealt with extensively
during
cross-examination,
which
petitioner Republic waived because of
its repeated absences and failure to
present counter evidence.[33] In any
event, the Report, as well as the
Subdivision Plan, readily reveals that the
subject land was certified as alienable
and disposable as early as 31 December
1925 and was even classified as
residential and commercial in nature.
Thus, the Court finds that the evidence
presented by respondents Vegas,
coupled with the absence of any
countervailing evidence by petitioner
Republic, substantially establishes that
the land applied for is alienable and
disposable and is the subject of original
registration proceedings under the
Property Registration Decree. There was
no reversible error on the part of either
the trial court or the appellate court in
granting the registration.
Respondents-intervenors Buhays title to
that portion of the subject land is
likewise affirmed, considering that the
joint claim of respondents-intervenors
Buhays over the land draws its life from
the same title of respondents Vegas, who
in turn failed to effectively oppose the
claimed sale of that portion of the land
to the formers predecessors-in-interest.
It must be emphasized that the present
ruling on substantial compliance
applies pro hac vice. It does not in any
way detract from our rulings in Republic
v. T.A.N. Properties, Inc., and similar
cases which impose a strict requirement
to prove that the public land is alienable
and disposable, especially in this case
when the Decisions of the lower court
and the Court of Appeals were rendered

prior to these rulings.[34] To establish

that the land subject of the application is
alienable and disposable public land, the
general rule remains: all applications for
original registration under the Property
Registration
Decree
must
include both (1) a CENRO or PENRO
certification and (2) a certified true
copy of the original classification made
by the DENR Secretary.
As an exception, however, the courts - in
their sound discretion and based solely
on the evidence presented on record may approve the application, pro hac
vice, on the ground of substantial
compliance showing that there has been
a positive act of government to show the
nature and character of the land and an
absence of effective opposition from the
government. This exception shall only
apply
to
applications
for
registration currently pending before
the trial court prior to this Decision and
shall be inapplicable to all future
applications.
WHEREFORE, premises considered,
the instant Petition is DENIED. The
Court of Appeals Decision dated 30
April 2007 and the trial courts Decision
dated
18
November
2003
are
hereby AFFIRMED.
SO ORDERED.
G.R. No. 166865
March 2,
2007
ANGELITA F. BUENAVENTURA
and
PRECIOSA
F.
BUENAVENTURA, Petitioners,
vs.
REPUBLIC
OF
THE
PHILIPPINES, Respondent.
DECISION
CHICO-NAZARIO, J.:
The case before this Court is a Petition
for Review on Certiorari under Rule 45
of the 1997 Revised Rules of Civil
Procedure seeking to annul and set aside

the Decision1 and Resolution2 of the

Court of Appeals in CA-G.R. CV No.
72925
entitled,
Angelita
F.
Buenaventura
and
Preciosa
F.
Buenaventura vs. Republic of the
Philippines, dated 23 August 2004 and
25 January 2005, respectively, which
granted the appeal filed by the Republic
of the Philippines (Republic) and
declared the parcel of land subject
matter of this Petition as public land,
thus, reversing the Order3 of the
Regional Trial Court (RTC) of
Paraaque City dated 29 October 2001,
which recognized and confirmed the
rights of herein petitioners Angelita F.
Buenaventura (Angelita) and Preciosa F.
Buenaventura (Preciosa), over the
subject property, and issued a decree of
registration of the same in their favor.
The antecedent facts of the case are as
follows:
Petitioners Angelita and Preciosa are the
applicants for registration of title over
the subject property. They are the heirs
of spouses Amado Buenaventura and
Irene Flores (spouses Buenaventura)
from whom they acquired the subject
property.
The facts reveal that the subject
property was acquired by the spouses
Buenaventura from the Heirs of Lazaro
de Leon, namely: Aurelio de Leon and
his sister Rodencia Sta. Agueda even
before World War II. However, it was
only on 30 January 1948 that the
corresponding Deed of Sale4 was
executed in favor of the spouses
Buenaventura. After the execution of the
said Deed of Sale, the spouses
Buenaventura transferred the tax
declaration in their name. Consequently,
Tax Declaration (T.D.) No. 5492
covering the subject property in the
names of Aurelio and Rodencia was
cancelled and T.D. No. 61035 was issued
in the name of spouses Buenaventura.

In 1978, the spouses Buenaventura

transferred, by way of Deed of Sale, 6 the
subject property, together with the
adjacent property, which they previously
acquired from Mariano Pascual, to their
children, among whom are herein
petitioners. As a result thereof, a new tax
declaration
(T.D.
No.
A-00405698)7 was issued in the name of the
spouses Buenaventuras children.
Petitioners then filed an Application for
Registration of Title on 5 June 2000
before the RTC of Paraaque City of the
subject property, more particularly
described as Cadastral Lot No. 5001-B,
Csd-007604-000176-D,
Paraaque
Cadastre, located in San Dionisio,
Paraaque City, with an area of 3,520.92
square meters, more or less. Petitioners
alleged
that
"they
and
their
predecessors-in-interest acquired title to
the said parcel of land thru inheritance,
transfer, and possession as owners of
the same since time immemorial and/or
within the period provided for by law."8
As the trial court found the application
to be sufficient in form and substance, it
thereby set the case for hearing, and
directed the service and publication of
the notice thereof pursuant to Section
239 of the Property Registration Decree
(Presidential Decree No. 1529).
On 27 September 2001, when the case
was called for hearing, no interested
party appeared before the trial court
other
than
the
petitioners.
Consequently, petitioners proceeded to
present several documents in order to
establish
compliance
with
the
jurisdictional requirements. The same
were marked and offered in evidence
before the court a quo.
No formal opposition had been filed and
no oppositor appeared in any of the
previously set hearings of the case;
hence, petitioners counsel moved for
the declaration of general default except

for the Republic. The same was granted

by the court a quo. The case was then
referred to a commissioner, who directly
received petitioners evidence in chief.
Petitioners presented five witnesses,
namely: Aniceta C. Capiral, Engr.
Teofilo R. La Guardia, Atty. Reginald L.
Hernandez, Ricardo H. Lopez, and
herein petitioner Angelita, in order to
establish the fact that petitioners and
their predecessors have acquired vested
right over the subject property by their
open,
continuous,
and
exclusive
possession under a bona fide claim of
ownership for over 50 years completely
unmolested by any adverse claim,
meaning, their possession of the subject
property was in the manner and for the
period required by law; likewise, to
prove the alienable and disposable
character of the subject property.
Other than the respective testimonies of
the above-named witnesses, they also
presented
and
identified
several
documents10 offered in evidence, which
tend to establish further the following:
(1) petitioners fee simple title over the
subject property; (2) the nature of the
possession and occupation of the
property; (3) its classification as part of
the alienable and disposable zone of the
government; and (4) the improvements
introduced thereon and the taxes paid
on the subject property. Said documents
were duly admitted by the trial court.
On 29 October 2001, based on the pieces
of evidence presented by petitioners, the
court a quo issued an Order granting the
application for registration of title of the
subject property, the decretal portion of
which reads as follows:
WHEREFORE, finding the application
of registration of title to the subject
parcel of land, known as Lot 5001-B Cad
299, Paraaque Cadastre, and more
particularly described in approved
Survey Plan Csd 007604-000176 is

hereby
confirmed
and
ordered
registered in the names of [petitioners]
Preciosa, Angelita, [and in the names of
their other siblings] Crisostomo, and
Alfredo, all surnamed Buenaventura,
free from all liens and encumbrances.
ONCE THIS DECISION has become
final, let another one issue directing the
Land Registration Authority to issue the
corresponding decree.
Let copies of this [D]ecision be
furnished to the adjoining owners, Land
Registration
Authority,
Land
Management Bureau, Office of the
Solicitor General, Sec. of Public Works
and Highways, Department of Agrarian
Reform,
the
Director,
Forest
Management
Bureau,
Chairman
Metropolitan
Manila
Development
Authority, DENR [Department of
Environment and Natural Resources],
South CENRO, Land Management
Sector, City Mayor of Paraaque and
Registry of Deeds, Paraaque City.11
Feeling
aggrieved
with
the
aforementioned Order of the trial court,
the Republic appealed to the Court of
Appeals. According to the Republic,
petitioners failed to prove continuous,
open,
exclusive
and
notorious
possession by their predecessors-ininterest and by themselves; hence, the
trial court erred in granting petitioners
application for registration of the
subject property. The Republic prayed
for the reversal of the Order of the trial
court and for the dismissal of the
application for registration filed by
petitioners.
On 23 August 2004, the Court of
Appeals rendered a Decision in favor of
the Republic, thus, overturning the
Order of the court a quo. The dispositive
portion of the Decision reads as:
WHEREFORE, the appeal is GRANTED
and the Decision of the Regional Trial
Court, Branch 274, Paraaque City

dated October 29, 2001 is REVERSED

and SET ASIDE and the parcel of land
subject matter of the application is
declared public land.12
Petitioners
filed
a
Motion
for
Reconsideration of the aforesaid
Decision on 20 September 2004. In a
Resolution dated 25 January 2005
rendered by the appellate court, said
Motion
for
Reconsideration
was
forthwith denied for lack of merit.
Hence, this Petition.
Petitioners raise the following issues for
the resolution of this Court:
I. Whether or not the Court of Appeals
erred in nullifying the Decision of the
trial court confirming petitioners title
over the subject property for not being
allegedly supported by substantial
evidence as required by law.
II. Whether or not the Court of Appeals
gravely erred in declaring the subject
property as pubic land and ignoring
petitioners evidence of over 50 year
possession in the concept of an owner
and completely unmolested by any
adverse claim.
In the Memorandum13 of the petitioners,
they allege that the appellate court
committed grave error when it nullified
the trial courts Order dated 29 October
2001, which confirmed their title to the
subject property. Petitioners claim that
contrary to the findings of the Court of
Appeals that the above-mentioned
Order was not supported by evidence,
the records of the case clearly speak of
the existence, not absence, of sufficient
evidence to sustain the findings of the
court a quo that petitioners have
established possession of the subject
property in the manner and for the
period required by law, that is by open,
continuous, exclusive, and notorious
possession in the concept of an owner
since 12 June 1945 or earlier, to warrant

the registration of their title to the

subject property.
Petitioners likewise argue that the
appellate court gravely erred when it
declared as public land the subject
property despite the fact that they were
able to prove by clear and convincing
evidence that their possession of the
subject property was indeed in the
manner and within the period required
by law. Having been in possession of the
subject property for more than 30 years,
they have already acquired vested right
or title over the subject property by
operation of law based on the period
provided for under the prevailing land
registration and property laws; hence,
the Decision of the Court of Appeals is
inconsistent with the facts and the law.
The Petition is meritorious.
In resolving the issues involved in the
present case, there is a need for this
Court to re-examine the facts of the case
for the proper determination of the
issues raised herein.
As a rule, in the exercise of the Supreme
Courts power of review, the Court is not
a trier of facts and does not normally
undertake the re-examination of the
evidence presented by the contending
parties during the trial of the case
considering that the findings of fact of
the Court of Appeals are conclusive and
binding on the Court.14However, the rule
is not without exceptions. There are
several recognized exceptions15 in which
factual issues may be resolved by this
Court and two of these exceptions find
application in this present case, to wit:
(1) when the findings of the appellate
court are contrary to those of the trial
court; and (2) when the findings of fact
of the appellate court are premised on
the supposed absence of evidence but
contradicted by the evidence on record.

The issues presented by petitioners will

be discussed concurrently, since they are
interrelated.
In the assailed Decision of the Court of
Appeals, it ruled that petitioners failed
to show possession and occupation of
the subject property under a bona fide
claim of ownership since 12 June 1945
or earlier as provided for in Section 14(1)
of the Property Registration Decree. It
further said that the testimonial
evidence presented by petitioners was
not sufficient to prove petitioners
possession in the manner and within the
period required by the aforesaid law
because petitioners witnesses merely
testified on their familiarity with the
subject property.
Section 14 of the Property Registration
Decree speaks of who may apply for
registration of land. The said provision
of law refers to an original registration
through
ordinary
registration
proceedings.16 It specifically provides:
SEC. 14. Who may apply. The
following persons may file in the proper
Court of First Instance [now Regional
Trial Court] 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.
From the aforesaid provisions of the
Property Registration Decree, we can
deduce that there are three requisites for
the filing of an application for
registration of title under the first

category, to wit: (1) that the property in

question is alienable and disposable
land of the public domain; (2) that the
applicants by themselves or through
their predecessors-in-interest have been
in open, continuous, exclusive and
notorious possession and occupation;
and (3) that such possession is under a
bona fide claim of ownership since 12
June 1945 or earlier.17 The second
classification relates to the acquisition of
private lands by prescription.
In the case at bar, the Republic argues,
through the Office of the Solicitor
General, that petitioners own evidence
tends to show that the subject property
is not alienable and disposable because
it was a salt bed and a fishpond and
under Section 2, Article XII of the
Constitution, except for agricultural
lands, all other natural resources shall
not be alienated. Likewise, under the
Regalian Doctrine, all lands not
otherwise appearing to be clearly within
private ownership are presumed to
belong to the State.
It is true that under the Regalian
Doctrine all lands of the public domain
belong to the State and all lands not
otherwise appearing to be clearly within
private ownership are presumed to
belong to the State.18 However, such
presumption is not conclusive. It can be
rebutted by the applicants presentation
of incontrovertible evidence showing
that the land subject of the application
for registration is alienable and
disposable.19
After a thorough examination of the
records of this case, this Court found out
that petitioners offered in evidence a
certification20 from the Department of
Environment and Natural Resources,
National Capital Region dated 29
October 2001, to prove that the subject
property was alienable and disposable
land of the public domain. The said

certification contains the following

statements:
This is to certify that the parcel of land
as shown and described on the reverse
side of this plan- Lot 5001-B, Cad-299,
Paraaque Cadastre situated at San
Dionisio, Paraaque City, Metro Manila
containing an area of 3,520.92 square
meters as prepared by Geodetic
Engineer Mariano V. Flotildes for
Amado Buenaventura, et al., was
verified to be within the Alienable and
Disposable Land per L.C. Map 2623,
Project No. 25 of Paraaque per
Forestry Administrative Order No. 41141 dated January 3, 1968.21 (Emphasis
supplied.)
To our minds, the said certification is
sufficient to establish the true nature or
character of the subject property. The
certification enjoys a presumption of
regularity
in
the
absence
of
contradictory evidence.22 As it is, the
said certification remains uncontested
and even the Republic itself did not
present any evidence to refute the
contents of the said certification.
Therefore, the alienable and disposable
character of the questioned parcel of
land has been clearly established by the
evidence of the petitioners, by 3 January
1968, at the latest.
Now, going to the requisites of open,
continuous, exclusive and notorious
possession and occupation under a bona
fide claim of ownership since 12 June
1945 or earlier, Republic alleges that no
sufficient evidence was adduced by
petitioners to show that they and their
predecessors-in-interest have been in
exclusive possession of the subject
property since 12 June 1945 or earlier in
the concept of an owner, to which the
Court of Appeals agreed. The Court of
Appeals in its decision said that:
Although they were able to show
possession by their parents, their

predecessors-in-interest, since 1948,

they failed to prove the fact of
possession since [12 June 1945] before
the filing of the application.23
Emphasis should be given to the fact
that the Court of Appeals, in its
Decision, did not question petitioners
possession of the subject property since
1948. Verily, it even stated in the said
Decision that petitioners possession
may be reckoned from 1948, the year of
the execution of the Deed of Sale. The
only reason posited by the appellate
court in denying the Order of the trial
court which granted the application for
registration of title of the petitioners was
the fact that petitioners evidence was
not sufficient to prove that their
possession of the subject property was
since 12 June 1945 or earlier.
We agree with the findings of the Court
of Appeals that the evidence presented
by petitioners was not enough to prove
that their possession of the subject
property started since 12 June 1945 or
earlier because the evidence established
that the questioned parcel of land was
acquired by petitioners parents only on
30 January 1948, the date of the
execution of the Deed of Absolute Sale
by its previous owners. They can neither
tack their possession to that of the
previous owners because they failed to
present any evidence of possession by
those
prior
owners.
Moreover,
petitioners possession of the subject
property could only ripen into
ownership on 3 January 1968, when the
same became alienable and disposable.
"Any period of possession prior to the
date when the [s]ubject [property was]
classified as alienable and disposable is
inconsequential and should be excluded
from the computation of the period of
possession; such possession can never
ripen into ownership and unless the
land had been classified as alienable and

disposable, the rules on confirmation of

imperfect title shall not apply thereto."24
Be that as it may, this will not be an
insurmountable bar to the petitioners to
have the title to the subject property
registered in their names.
In the case of Republic v. Court of
Appeals,25 this Court closely examined
the land registration laws governing
land registration proceedings in the
Philippines. In the aforesaid case, the
Court
made
the
following
pronouncements:
When the Public Land Act was first
promulgated in 1936, the period of
possession deemed necessary to vest the
right to register their title to agricultural
lands of the public domain commenced
from July 26, 1894. However, this
period was amended by R.A. [Republic
Act] No. 1942, which provided that the
bona fide claim of ownership must have
been for at least thirty (30) years. Then
in 1977, Section 48(b) of the Public Land
Act was again amended, this time by
P.D. No. 1073, which pegged the
reckoning date at June 12, 1945. This
new starting point is concordant with
Section
14(1)
of
the
Property
Registration Decree.
Indeed, there are no material differences
between Section 14(1) of the Property
Registration Decree and Section 48(b) of
the Public Land Act, as amended. True,
the Public Land Act does refer to
"agricultural lands of the public
domain,"
while
the
Property
Registration Decree uses the term
"alienable and disposable lands of the
public domain." It must be noted though
that the Constitution declares that
"alienable lands of the public domain
shall be limited to agricultural lands."
Clearly the subject lands under Section
48(b) of the Public Land Act and Section
14(1) of the Property Registration
Decree are of the same type.

Did the enactment of the Property

Registration Decree and the amendatory
P.D. No. 1073 preclude the application
for registration of alienable lands of the
public domain, possession over which
commenced only after June 12, 1945? It
did not, considering Section 14(2) of the
Property Registration Decree, which
governs and authorizes the application
of "those who have acquired ownership
of private lands by prescription under
the
provisions
of
existing
laws."26 (Emphasis supplied.)
It becomes crystal clear from the
aforesaid ruling of the Court that even if
the possession of alienable lands of the
public domain commenced only after 12
June 1945, application for registration of
the said property is still possible by
virtue of Section 14(2) of the Property
Registration Decree which speaks of
prescription.
Under the Civil Code, prescription is one
of
the
modes
of
acquiring
ownership.27 Article 1106 of the Civil
Code provides:
By prescription, one acquires ownership
and other real rights through the lapse
of time in the manner and under the
conditions laid down by law.
Also in Article 1113 of the Civil Code, it is
provided that:
All things which are within the
commerce of men are susceptible of
prescription, unless otherwise provided.
Property of the State or any of its
subdivision not patrimonial in character
shall not be the object of prescription.
Likewise, Article 1137 of the Civil Code
states that:
Ownership and other real rights over
immovables also prescribe through
uninterrupted
adverse
possession
thereof for thirty years, without need of
title or of good faith. (Emphasis
supplied.)

It is well-settled that properties

classified as alienable and disposable
land may be converted into private
property by reason of open, continuous
and exclusive possession of at least 30
years.28 Such property now falls within
the contemplation of "private lands"
under Section 14(2), over which title by
prescription can be acquired. Hence,
because of Section 14(2) of Presidential
Decree No. 1529, those who are in
possession of alienable and disposable
land, and whose possession has been
characterized as open, continuous and
exclusive for 30 years or more, may have
the right to register their title to such
land despite the fact that their
possession of the land commenced only
after 12 June 1945.29
The aforesaid jurisprudential rule truly
demonstrates that, in the present case,
while petitioners possession over the
subject property can be reckoned only
on 3 January 1968, the date when
according to evidence, the subject
property
became
alienable
and
disposable, they can still have the
subject property registered in their
names by virtue of Section 14(2) of the
Property Registration Decree.
The records, indeed, reveal that
petitioners were in possession of the
subject property for more than 30 years,
32 years to be exact, reckoned from the
year 1968, when the subject property
was finally declared alienable and
disposable by the DENR to the time they
filed an application for registration of
title over the subject property on 5 June
2000. Petitioners possession of the
subject property since 1968 has been
characterized as open, continuous,
exclusive and notorious possession and
occupation in the concept of an owner.
Petitioners presented as evidence their
tax declarations covering the years from
1948 until the third quarter of 2001.

They also offered in evidence a

certification30 from the Office of the
Treasurer of the City of Paraaque to
prove that realty taxes over the subject
property had been duly paid by
petitioners. As a rule, tax declarations or
realty tax payments 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 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 ones 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
ones bona fide claim of acquisition of
ownership.31
In the same breath, it cannot be gainsaid
that petitioners have been in actual
possession of the subject property since
1968, at the latest. According to the
testimony of their witnesses, parts of the
subject property are planted with
bananas and some vegetables, and a
bamboo grove. The other parts of the
subject property were used as a
fishpond, as well as devoted to salt
making until 1990.32 However, when the
property was no longer suitable for
agricultural purposes, for fishpond, and
for salt making because of its conversion
to non-agricultural purposes consistent
with the zonal development of the area,
the petitioners backfilled the subject
property with gravel and sand, for which
they paid their farm helpers just
compensation. Thereafter, they enclosed
the property with perimeter fence,

installed guards and a caretaker to

prevent potential squatters from
penetrating
the
area.33When
tax
declarations and receipts are coupled
with actual possession, they constitute
evidence of great weight and can be the
basis of a claim of ownership through
prescription.34
Conspicuously,
the
petitioners
witnesses are one in pointing out that
petitioners and their predecessors-ininterest are the sole claimants of the
subject property.
It bears stressing that the pieces of
evidence submitted by petitioners are
incontrovertible. No one, not even the
Republic, presented any evidence to
contradict the claims of the petitioners
that they are in possession of the subject
property and their possession of the
same is open, continuous and exclusive
in the concept of an owner for over 30
years. Verily, even the appellate court
mentioned in its Decision that
petitioners were able to show possession
of the subject property as early as 1948,
the only basis for its Decision reversing
the Order of the trial court being the
insufficiency of the evidence presented
by petitioners to establish their
possession
of
the
subject
property prior to 12 June 1945.
IN ALL, petitioners were able to prove
sufficiently that they have been in
possession of the subject property for
more than 30 years, which possession is
characterized as open, continuous,
exclusive, and notorious, in the concept
of an owner. By this, the subject
alienable and disposable public land had
been effectively converted into private
property over which petitioners have
acquired
ownership
through
prescription to which they are entitled to
have
title
through
registration
proceedings. Petitioners right to have
their title to the subject property

registered cannot be defeated simply

because the possession of petitioners
commenced on a date later than 12 June
1945, for the law and supplementing
jurisprudence
amply,
justly
and
rightfully provides the necessary remedy
to what would otherwise result in an
unjust and unwarranted situation. It
would be the height of injustice if
petitioners registration of title over the
said property will de denied solely on
that ground.
WHEREFORE, premises considered, the
instant Petition is hereby GRANTED.
The Decision and Resolution of the
Court of Appeals dated 23 August 2004
and 25 January 2005, respectively, are
hereby REVERSED and SET ASIDE.
The Order of the trial court dated 29
October 2001 which granted petitioners
application for registration of the
subject property and directing the
issuance of a decree of registration in
petitioners favor once the judgment has
become final and executory is hereby
REINSTATED. No costs.
SO ORDERED.
SECOND DIVISION
G.R. No. 173423, March 05, 2014
SPS. ANTONIO FORTUNA AND
ERLINDA
FORTUNA, Petitioners, v. REPUBLIC
OF
THE
PHILIPPINES, Respondents.
DECISION
BRION, J.:
Before the Court is a petition for review
on certiorari1 filed by the petitioners,
spouses Antonio and Erlinda Fortuna,
assailing the decision dated May 16,
20052 and the resolution dated June 27,
20063of the Court of Appeals (CA) in
CA-G.R. CV No. 71143. The CA reversed
and set aside the decision dated May 7,
20014 of the Regional Trial Court (RTC)
of San Fernando, La Union, Branch 66,

in Land Registration Case (LRC) No.

2372.
THE BACKGROUND FACTS
In December 1994, the spouses Fortuna
filed
an application
for
registration of a 2,597-square meter
land identified as Lot No. 4457,
situated in Bo. Canaoay, San Fernando,
La Union. The application was filed with
the RTC and docketed as LRC No.
2372.
The spouses Fortuna stated that Lot No.
4457 was originally owned by Pastora
Vendiola, upon whose death was
succeeded by her children, Clemente
and Emeteria Nones. Through an
affidavit of adjudication dated August 3,
1972, Emeteria renounced all her
interest in Lot No. 4457 in favor of
Clemente. Clemente later sold the lot in
favor of Rodolfo Cuenca on May 23,
1975. Rodolfo sold the same lot to the
spouses Fortuna through a deed of
absolute sale dated May 4, 1984.
The spouses Fortuna claimed that they,
through
themselves
and
their
predecessors-in-interest, have been in
quiet, peaceful, adverse and
uninterrupted possession of Lot
No. 4457 for more than 50 years,
and submitted as evidence the lots
survey plan, technical description, and
certificate
of
assessment.
Although the respondent, Republic of
the Philippines (Republic), opposed the
application,5 it did not present any
evidence in support of its opposition.
Since no private opposition to the
registration was filed, the RTC issued an
order of general default on November 11,
1996 against the whole world, except the
Republic.6crallawlibrary

In its Decision dated May 7,

2001,7 the
RTC
granted
the
application for registration in
favor of the spouses Fortuna. The
RTC declared that [the spouses
Fortuna] have established [their]
possession, including that of their
predecessors-in-interest of the land
sought to be registered, has been open,
continuous, peaceful, adverse against
the whole world and in the concept of an
ownersince 1948, or for a period of
over fifty (50) years.8crallawlibrary
The Republic appealed the RTC decision
with the CA, arguing that the spouses
Fortuna did not present an official
proclamation from the government that
the lot has been classified as alienable
and disposable agricultural land. It also
claimed that the spouses Fortunas
evidence - Tax Declaration No.
8366 - showed that possession over the
lot dates back only to 1948, thus, failing
to meet the June 12, 1945 cut-off period
provided under Section 14(1) of
Presidential Decree (PD) No. 1529 or
the Property
Registration
Decree (PRD).
In its decision dated May 16,
2005,9the CA reversed and set
aside the RTC decision. Although it
found that the spouses Fortuna were
able to establish the alienable and
disposable nature of the land,10 they
failed to show that they complied with
the length of possession that the law
requires, i.e., since June 12, 1945. It
agreed with the Republics argument
that Tax Declaration No. 8366 only
showed that the spouses Fortunas
predecessor-in-interest, Pastora, proved
that she had been in possession of the
land
only
since
1948.
The CA denied the spouses Fortunas

motion for reconsideration of its

decision in its resolution dated June 27,
2006.11crallawlibrary
THE PARTIES ARGUMENTS
Through the present petition, the
spouses Fortuna seek a review of the CA
rulings.
They contend that the applicable law is
Section 48(b) of Commonwealth Act No.
141 or the Public Land Act (PLA), as
amended by Republic Act (RA) No.
1942. RA No. 1942 amended the
PLA by requiring 30 years of open,
continuous, exclusive, and notorious
possession to acquire imperfect title
over an agricultural land of the public
domain. This
30-year
period,
however, was removed by PD No.
1073 and instead required that the
possession should be since June
12, 1945. The amendment introduced
by PD No. 1073 was carried in Section
14(1)
of
the PRD.12crallawlibrary
The spouses Fortuna point out that PD
No. 1073 was issued on January
25, 1977 and published on May 9,
1977; and the PRD was issued on June
11, 1978 and published on January 2,
1979. On the basis of the Courts ruling
in Taada, et al. v. Hon. Tuvera, etc., et
al.,13 they allege that PD No. 1073 and
the PRD should be deemed effective
only on May 24, 1977 and January 17,
1979, respectively. By these dates, they
claim to have already satisfied the 30year requirement under the RA No. 1942
amendment
because
Pastoras
possession dates back, at the latest, to
1947.
They allege that although Tax
Declaration No. 8366 was made in 1948,
this does not contradict that fact that
Pastora possessed Lot No. 4457 before

1948.
The
failure
to
present
documentary
evidence
proving
possession earlier than 1948 was
explained by Filma Salazar, Records
Officer of the Provincial Assessors
Office, who testified that the records
were lost beyond recovery due to the
outbreak
of
World
War
II.
Notwithstanding
the
absence
of
documents executed earlier than 1948,
the spouses Fortuna contend that
evidence exists indicating that Pastora
possessed
the
lot
even
before
1948. First, Tax Declaration No. 8366
does not contain a statement that it is a
new
tax declaration. Second, the
annotation found at the back of Tax
Declaration No. 8366 states that this
declaration
cancels
Tax
Nos.
10543[.]14Since Tax Declaration No.
8366 was issued in 1948, the cancelled
Tax Declaration No. 10543 was issued,
at the latest, in 1947, indicating that
there was already an owner and
possessor of the lot before 1948. Third,
they rely on the testimony of one
Macaria Flores in LRC No. 2373. LRC
No. 2373 was also commenced by the
spouses Fortuna to register Lot Nos.
4462, 27066, and 27098,15which
were also originally owned by Pastora
and are adjacent to the subject Lot No.
4457. Macaria testified that she was
born in 1926 and resided in a place a few
meters from the three lots. She stated
that she regularly passed by these lots
on her way to school since 1938. She
knew the property was owned by
Pastora because the latters family had
constructed a house and planted fruitbearing trees thereon; they also cleaned
the area. On the basis of Macarias
testimony and the other evidence
presented in LRC No. 2373, the RTC
granted
the
spouses
Fortunas
application for registration of Lot Nos.

4462, 27066, and 27098 in its decision

of January 3, 2005.16 The RTCs decision
has lapsed into finality unappealed.
The spouses Fortuna claim that
Macarias testimony in LRC No. 2373
should be considered to prove Pastoras
possession prior to 1948. Although LRC
No. 2373 is a separate registration
proceeding, it pertained to lots adjacent
to the subject property, Lot No. 4457,
and belonged to the same predecessorin-interest. Explaining their failure to
present Macaria in the proceedings
before the RTC in LRC No. 2372, the
spouses Fortuna said it was only after
the reception of evidence x x x that
[they] were able to trace and establish
the identity and competency of
Macaria[.]17crallawlibrary
Commenting on the spouses Fortunas
petition, the Republic relied mostly on
the CAs ruling which denied the
registration of title and prayed for the
dismissal of the petition.
THE COURTS RULING
We deny the petition for failure of the
spouses Fortuna to sufficiently prove
their compliance with the requisites for
the acquisition of title to alienable lands
of
the
public
domain.
The nature of Lot No. 4457 as
alienable
and
disposable public land has not
been
sufficiently
established
The Constitution declares that all lands
of the public domain are owned by the
State.18 Of the four classes of public
land, i.e., agricultural lands, forest or
timber lands, mineral lands, and
national parks, only agricultural lands
may be alienated.19 Public land that has

not been classified as alienable

agricultural land remains part of the
inalienable public domain. Thus, it is
essential for any applicant for
registration of title to land derived
through a public grant to establish
foremost
the
alienable
and
disposable nature of the land. The
PLA provisions on the grant and
disposition of alienable public lands,
specifically, Sections 11 and 48(b), will
find application only from the time that
a public land has been classified as
agricultural and declared as alienable
and
disposable.
Under Section 6 of the PLA, 20 the
classification and the reclassification of
public lands are the prerogative of the
Executive Department. The President,
through a presidential proclamation or
executive order, can classify or reclassify
a land to be included or excluded from
the public domain. The Department of
Environment and Natural Resources
(DENR)
Secretary
is
likewise
empowered by law to approve a land
classification and declare such land as
alienable and disposable.21 Accordingly,
jurisprudence has required that an
applicant for registration of title
acquired through a public land grant
must present incontrovertible evidence
that the land subject of the application is
alienable or disposable by establishing
the existence of a positive act of the
government, such as a presidential
proclamation or an executive order; an
administrative action; investigation
reports
of
Bureau
of
Lands
investigators; and a legislative act or a
statute.
In this case, the CA declared that the
alienable nature of the land was
established by the notation in the

survey
plan,22 which
states:chanRoblesVirtualawlibrary
This survey is inside alienable and
disposable area as per Project No. 13
L.C. Map No. 1395 certified August 7,
1940. It is outside any civil or military
reservation.23
It also relied on the Certification
dated July 19, 1999 from the DENR
Community Environment and Natural
Resources Office (CENRO) that there
is, per record, neither any public land
application filed nor title previously
issued
for
the
subject
24
parcel[.] However,
we
find
that neither
of
the
above
documents is evidence of a
positive act from the government
reclassifying the lot as alienable
and disposable agricultural land
of
the
public
domain.
Mere notations appearing in
survey plans are inadequate proof
of
the
covered
properties
alienable
and
disposable
character.25 These notations, at the
very least, only establish that the land
subject
of
the
application
for
registration falls within the approved
alienable and disposable area per
verification through survey by the
proper
government
office. The
applicant, however, must also
present a copy of the original
classification of the land into
alienable and disposable land, as
declared by the DENR Secretary or
as
proclaimed
by
the
President.26 In Republic v. Heirs of
Juan Fabio,27 the Court ruled that
[t]he applicant for land registration
must prove that the DENR Secretary
had approved the land classification
and released the land of the public
domain
as
alienable
and

disposable, and that the land subject of

the application for registration falls
within
the
approved
area
per
verification through survey by the
PENRO28 or CENRO. In addition, the
applicant must present a copy of the
original classification of the land
into alienable and disposable, as
declared by the DENR Secretary,
or as proclaimed by the President.
The survey plan and the DENR-CENRO
certification are not proof that the
President or the DENR Secretary has
reclassified and released the public land
as alienable and disposable. The offices
that prepared these documents are not
the official repositories or legal
custodian of the issuances of the
President or the DENR Secretary
declaring the public land as alienable
and
disposable.29crallawlibrary
For failure to present incontrovertible
evidence that Lot No. 4457 has been
reclassified as alienable and disposable
land of the public domain though a
positive
act
of
the
Executive
Department, the spouses Fortunas
claim of title through a public land grant
under the PLA should be denied.
In
judicial
confirmation
of
imperfect
or incomplete title, the period of
possession
should commence, at the latest, as
of
May
9,
1947
Although the above finding that the
spouses Fortuna failed to establish the
alienable and disposable character of
Lot No. 4457 serves as sufficient ground
to deny the petition and terminate the
case, we deem it proper to continue to
address the other important legal issues

raised

in

the

petition.

As mentioned, the PLA is the law that

governs the grant and disposition of
alienable agricultural lands. Under
Section 11 of the PLA, alienable lands of
the public domain may be disposed of,
among
others,
by judicial
confirmation of imperfect or
incomplete title. This mode of
acquisition of title is governed by
Section 48(b) of the PLA, the original
version of
which
states:chanRoblesVirtualawlibrary
Sec. 48. The following-described citizens
of the Philippines, occupying lands of
the public domain or claiming to own
any such lands or an interest therein,
but whose titles have not been perfected
or completed, may apply to the Court of
First Instance of the province where the
land is located for confirmation of their
claims and the issuance of a certificate
of title therefor, under the Land
Registration
Act,
to
wit:chanRoblesVirtualawlibrary
x

(b) Those who by themselves or through

their predecessors-in- interest have been
in open, continuous, exclusive, and
notorious possession and occupation of
agricultural lands of the public domain,
under a bona fide claim of acquisition or
ownership, except as against the
Government, since
July
twentysixth, eighteen hundred and
ninety-four, except when prevented by
war or force majeure. These shall be
conclusively
presumed
to
have
performed all the conditions essential to
a government grant and shall be entitled
to a certificate of title under the
provisions of this chapter. [emphasis
supplied]

On June 22, 1957, the cut-off date of

July 26, 1894 was replaced by a 30-year
period of possession under RA No. 1942.
Section 48(b) of the PLA, as amended by
RA
No.
1942,
read:chanRoblesVirtualawlibrary
(b) Those who by themselves or through
their predecessors in interest have been
in open, continuous, exclusive and
notorious possession and occupation of
agricultural lands of the public domain,
under a bona fide claim of acquisition of
ownership, for
at
least
thirty
years immediately preceding the filing
of the application for confirmation of
title, except when prevented by war or
force
majeure.
[emphasis
and
underscore ours]
On January 25, 1977, PD No. 1073
replaced the 30-year period of
possession by requiring possession since
June 12, 1945. Section 4 of PD No. 1073
reads:chanRoblesVirtualawlibrary
SEC. 4. The provisions of Section 48(b)
and Section 48(c), Chapter VIII of the
Public Land Act are hereby amended in
the sense that these provisions shall
apply only to alienable and disposable
lands of the public domain which have
been in open, continuous, exclusive and
notorious possession and occupation by
the applicant himself or thru his
predecessor-in-interest, under a bona
fide
claim
of
acquisition
of
ownership,since June 12, 1945.
[emphasis supplied]
Under the PD No. 1073 amendment,
possession of at least 32 years - from
1945 up to its enactment in 1977 - is
required. This effectively impairs the
vested rights of applicants who had
complied with the 30-year possession
required under the RA No. 1942
amendment, but whose possession

commenced only after the cut-off date of

June 12, 1945 was established by the PD
No. 1073 amendment. To remedy this,
the Court ruled in Abejaron v.
Nabasa30 that Filipino citizens who by
themselves or their predecessors-ininterest have been, prior to the
effectivity of P.D. 1073 on January
25, 1977, in open, continuous, exclusive
and
notorious
possession
and
occupation of agricultural lands of the
public domain, under a bona fide claim
of acquisition of ownership, for at least
30 years, or at least since January
24, 1947 may apply for judicial
confirmation of their imperfect or
incomplete title under Sec. 48(b) of the
[PLA]. January 24, 1947 was
considered as the cut-off date as
this was exactly 30 years counted
backward from January 25, 1977 the effectivity date of PD No. 1073.
It appears, however, that January 25,
1977 was the date PD No. 1073
was enacted; based
on
the
certification from the National Printing
Office,31PD
No.
1073
was published in Vol. 73, No. 19 of
the Official Gazette, months later
than its enactment or on May 9, 1977.
This uncontroverted fact materially
affects the cut-off date for applications
for judicial confirmation of incomplete
title under Section 48(b) of the PLA.
Although Section 6 of PD No. 1073
states that [the] Decree shall take effect
upon its promulgation, the Court has
declared in Taada, et al. v. Hon.
Tuvera, etc., et al.32 that the publication
of laws is an indispensable requirement
for its effectivity. [A]ll statutes,
including those of local application and
private laws, shall be published as a
condition for their effectivity, which
shall begin fifteen days after publication

unless a different effectivity date is fixed

by
the
legislature.33 Accordingly,
Section 6 of PD No. 1073 should be
understood to mean that the decree took
effect only upon its publication, or on
May 9, 1977. This, therefore, moves the
cut-off date for applications for
judicial confirmation of imperfect
or incomplete title under Section
48(b) of the PLA to May 8, 1947.In
other words, applicants must prove
that they have been in open,
continuous,
exclusive
and
notorious
possession
and
occupation of agricultural lands
of the public domain, under a
bona fide claim of acquisition of
ownership, for at least 30 years,
or at least since May 8, 1947.
The spouses Fortuna were unable
to
prove
that they possessed Lot No. 4457
since
May
8,
1947
Even if the Court assumes that Lot No.
4457 is an alienable and disposable
agricultural land of the public domain,
the spouses Fortunas application for
registration of title would still not
prosper for failure to sufficiently prove
that they possessed the land since May
8,
1947.
The spouses Fortunas allegation that:
(1) the absence of a notation that Tax
Declaration No. 8366 was a new tax
declaration and (2) the notation stating
that Tax Declaration No. 8366 cancels
the earlier Tax Declaration No. 10543
both indicate that Pastora possessed the
land prior to 1948 or, at the earliest, in
1947. We also observe that Tax
Declaration No. 8366 contains a sworn
statement of the owner that was
subscribed on October 23, 1947.34 While

these circumstances may indeed

indicate possession as of 1947, none
proves that it commenced as of the cutoff date of May 8, 1947. Even if the tax
declaration indicates possession since
1947, it does not show the nature of
Pastoras possession. Notably, Section
48(b)
of
the
PLA
speaks
of
possession and occupation. Since these
words are separated by the conjunction
and, the clear intention of the law is not
to make one synonymous with the other.
Possession is broader than occupation
because
it
includes
constructive
possession. When, therefore, the law
adds the word occupation, it seeks to
delimit the all encompassing effect of
constructive possession. Taken together
with the words open, continuous,
exclusive
and
notorious,
the
word occupation serves to highlight the
fact that for an applicant to qualify, his
possession must not be a mere
fiction.35 Nothing in Tax Declaration
No. 8366 shows that Pastora exercised
acts of possession and occupation such
as cultivation of or fencing off the land.
Indeed, the lot was described as
cogonal.36crallawlibrary
The spouses Fortuna seeks to remedy
the defects of Tax Declaration No. 8366
by relying on Macarias testimony in a
separate land registration proceeding,
LRC No. 2373. Macaria alleged that she
passed by Pastoras lots on her way to
school, and she saw Pastoras family
construct a house, plant fruit-bearing
trees, and clean the area. However, the
Court is not convinced that Macarias
testimony constituted as the well-nigh
incontrovertible evidence required in
cases
of
this
nature.
The records disclose that the spouses
Fortuna acquired adjoining parcels of
land, all of which are claimed to have

previously belonged to Pastora. These

parcels of land were covered by three
separate applications for registration, to
wit:chanRoblesVirtualawlibrary
a. LRC No. N-1278, involving Lot
Nos. 1 and 2, with a total area of
2,961 sq. m., commenced by
Emeteria;
b. LRC No. 2373, involving Lot
Nos. 4462, 27066, and 27098,
with a total area of 4,006 sq. m.,
commenced by the spouses
Fortuna; and
c. LRC No. 2372 (the subject case),
involving Lot No. 4457, with a
total area of 2,597 sq. m.
As these cases involved different but
adjoining lots that belonged to the same
predecessor-in-interest, the spouses
Fortuna alleged that the final rulings in
LRC Nos. N-1278 and 2373,37 upholding
Pastoras ownership, be taken into
account in resolving the present case.
Notably, the total land area of the
adjoining lots that are claimed to have
previously belonged to Pastora is 9,564
sq. m. This is too big an area for the
Court to consider that Pastoras claimed
acts of possession and occupation (as
testified to by Macaria) encompassed
the entirety of the lots. Given the size of
the lots, it is unlikely that Macaria (age
21 in 1947) could competently assess
and declare that its entirety belonged to
Pastora because she saw acts of
possession and occupation in what must
have been but a limited area. As
mentioned, Tax Declaration No. 8366
described Lot No. 4457 as cogonal,
thus, Macaria could not have also been
referring to Lot No. 4457 when she said
that Pastora planted fruit-bearing trees
on
her
properties.
The lower courts final rulings in LRC

Nos. N-1278 and 2373, upholding

Pastoras possession, do not tie this
Courts hands into ruling in favor of the
spouses Fortuna. Much to our dismay,
the rulings in LRC Nos. N-1278 and
2373 do not even show that the lots have
been officially reclassified as alienable
lands of the public domain or that the
nature and duration of Pastoras
occupation met the requirements of the
PLA, thus, failing to convince us to
either disregard the rules of evidence or
consider their merits. In this regard, we
reiterate our directive in Santiago v. De
los Santos:38crallawlibrary
Both under the 1935 and the present
Constitutions, the conservation no less
than the utilization of the natural
resources is ordained. There would be
a failure to abide by its command
if the judiciary does not scrutinize
with care applications to private
ownership of real estate. To be
granted, they must be grounded in
well-nigh
incontrovertible
evidence. Where, as in this case, no
such proof would be forthcoming, there
is no justification for viewing such claim
with favor. It is a basic assumption of
our polity that lands of whatever
classification belong to the state. Unless
alienated in accordance with law, it
retains its rights over the same
as dominus.
WHEREFORE,
the
petition
is DENIED. The decision dated May 16,
2005 and the resolution dated June 27,
2006 of the Court of Appeals in CA-G.R.
CV No. 71143 are AFFIRMED insofar
as these dismissed the spouses Antonio
and Erlinda Fortunas application of
registration of title on the basis of the
grounds discussed above. Costs against
the
spouses
Fortuna.
SO

ORDERED.

Carpio,
(Chairperson),
Del
Castillo,
Perez,
and PerlasBernabe, JJ., concur.
FIRST DIVISION
G.R. No. 200454, October 22, 2014
HOLY
TRINITY
REALTY
&
DEVELOPMENT
CORPORATION, Petitioner, v. VICT
ORIO DELA CRUZ, LORENZO
MANALAYSAY,
RICARDO
MARCELO, JR. AND LEONCIO DE
GUZMAN, Respondents.
DECISION
BERSAMIN, J.:
Land on which no agricultural activity is
being conducted is not subject to the
coverage of either Presidential Decree
No. 27 or Republic Act No. 6657
(Comprehensive
Agrarian
Reform
Law).
The Case
The petitioner appeals the decision
promulgated on July 27, 2011, 1 whereby
the Court of Appeals (CA) reversed the
decision issued by the Office of the
President (OP) on March 1, 2010, 2 and
reinstated the order of the OIC-Regional
Director of the Department of Agrarian
Reform in Regional Office III rendered
on August 18, 2006.3
Antecedents
Subject of the controversy is a parcel of
land located in Brgy. Dakila, Malolos,
Bulacan (Dakila property) registered in
the name of Freddie Santiago under
Transfer Certificate of Title (TCT) No. T103698 of the Registry of Deeds of
Bulacan with an area of 212,500 square
meters. The Dakila property used to be
tenanted by Susana Surio, Cipriano
Surio, Alfonso Espiritu, Agustin Surio,
Aurelio
Surio,
Pacifico
Eugenio,
Godofredo Alcoriza, Lorenza Angeles,

Ramon Manalad, Toribio Hernandez,

Emerciana
Montealegre,
Pedro
Manalad, Celerino Ramos and Cecilia L.
Martin,4 but in August 1991, these
tenants
freely
and
voluntarily
relinquished their tenancy rights in
favor of Santiago through their
respective sinumpaang
pahayag5 in
exchange for some financial assistance
and individual homelots titled and
distributed in their names, as follows:6
TCT
No.
T-73006
T-73007
T-73008
T-73009
T-73010
T-73011
T-73012
T-73013
T-73014

T-73015
T-73016
T-73017
T-73018
T-73019
T-73020
T-73021

Name
of Area
Tenant/Successor (sq. m.)
Susana Surio
186
Cipriano Surio
150
Alfonso Espiritu
300
Agustin Surio
300
Aurelio Surio
264
Pacifico Eugenio
300
Godofredo Alcoriza 300
Lorenza Angeles
300
Ramon Manalad
300
Toribio
M.
300
Hernandez
Emerciana
300
Montealegre
Pedro Manalad
300
Celerino Ramos
300
Cecilia L. Martin
300
Pablo dela Cruz
300
Aurelio dela Cruz
300
Julita Leoncio
300
Anicia L. de Guzman
Ramon Centeno
300
Miguel Centeno
300
TOTAL
4,500

On September 17, 1992, the petitioner

purchased the remaining 208,050
square meters of the Dakila property
from Santiago,7 and later caused the
transfer of the title to its name as well as
subdivided the Dakila property into six

lots,8 to
wit:chanRoblesvirtualLawlibrary
TCT No.
81618
81619
81620
81621
73022
73023
TOTAL

Area (sq. m.)

50,000
50,000
50,000
54,810
2,401
839
208,050

The petitioner then developed the

property by dumping filling materials on
the topsoil, and by erecting a perimeter
fence and steel gate. It established its
field
office
on
the
property. 9
On March 4, 1998, the Sanggunian
Bayan ng Malolos passed Municipal
Resolution No. 16-98 reclassifying four
of the six subdivided lots belonging to
the
petitioner,
to
wit:chanRoblesvirtualLawlibrary
MUNICIPAL RESOLUTION NO. 16-98
A RESOLUTION RE-CLASSIFYING AS
RESIDENTIAL LOTS THE FOUR (4)
PARCELS OF LAND SEPARATELY
COVERED BY TCT NO. 81618, TCT NO.
81619, TCT NO.81620 AND TCT NO.
81621 CONTAINING AN AREA OF
50,000 SQ MTS, 50,000 SQ. MTS,
50,000 SQ M (sic) AND 54,810 SQ M
(sic) RESPECTIVELY ALL LOCATED
AT DAKILA, MALOLOS, BULACAN
REGISTERED IN THE NAME OF THE
HOLY
TRINITY
REALTY
AND
DEVELOPMENT
CORPORATION
WHEREAS, Ms. Jennifer M. Romero,
Auditor Representative of Holy Trinity
Realty and Development Corporation in
[her] letter to the Sangguniang Bayan
made a request for re-classification of
four parcel(s) of land registered in the

name of Holy Trinity and Development

Corporation under TCT NO. 81618, TCT
NO. 81619, TCT NO.81620 AND TCT
NO. 81621 with an area of 50,000 sq.
m., 50,000 sq. m., 50,000 sq. m. AND
54,810 sq. m. respectively all located at
Dakila,
Malolos,
Bulacan.
WHEREAS, after an ocular inspection of
the
subject
lots
and
matured
deliberation, the Sangguniang Bayan
found merit in the request for the
following reasons, thus:
1.
The
Properties
are
untenanted;cralawlawlibrary
2. That they are not fitted (sic) for
agricultural use for lack of sufficient
irrigation;cralawlawlibrary
3. There are improvements already
introduce[d] on the property by its
owner like construction of subdivision
roads;cralawlawlibrary
4. Lack of oppositor to the intend[ed]
subdivision project on the properties by
its
owner;cralawlawlibrary
5. That they are more suitable for
residential use considering their location
vi[s]--vi[s] with (sic) the residential lots
in the area.
NOW THEREFORE, on motion of Hon.
Romeo L. Maclang as seconded by all
Sangguniang Bayan members present,
RESOLVED, as is hereby resolved to reclassify into residential properties four
(4) parcels of land separately covered by
TCT NO. 81618, TCT NO. 81619, TCT
NO.81620 AND TCT NO. 81621 of the
Registry of Deeds of Bulacan, containing
an area of 50,000 sq. m. respectively,
registered in ownership of Holy Trinity
and Development Corporation located

and adjacent to one another in Barangay

Dakila of this Municipality pursuant to
the power vested to this Sangguniang
[sic] by the Local Government Code of
the
Philippines.
RESOLVED further that the owner
and/or developer of the said property
shall provide adequate [illegible] to
protect the adjacent lots and its owners
from any inconvenience and prejudice
caused by the development of the above
mentioned
property.
APPROVED.10
Consequently, the Municipal Planning
and Development Office (MPDO) of
Malolos, Bulacan issued a Certificate of
Eligibility for Conversion (Certificate of
Zoning Conformance),11 as well as a
Preliminary Approval and Locational
Clearance in favor of the petitioner for
its residential subdivision project on the
Dakila
property.12
On August 23, 1999, the petitioner
purchased from Santiago another parcel
of land with an area of 25,611 located in
Barangay Sumapang Matanda, Malolos,
Bulacan (Sumapang Matanda property)
and covered by TCT No. T-103697 of the
Registry of Deeds of Bulacan. 13
In April 2006, a certain Silvino Manalad
and the alleged heirs of Felix Surio
wrote to the Provincial Agrarian Reform
Officer (PARO) of Bulacan to request an
investigation of the sale of the Dakila
property.14 This was followed by the
letter request of Sumapang Matanda
Barangay Agrarian Reform Council
(BARC) Chairman
Numeriano L.
Enriquez to place the Dakila property
within the coverage of Operation Land
Transfer (OLT) pursuant to Presidential
Decree No. 27, which was docketed as A-

0302-0608-06, A.R. Case No. LSD032406.15

Several days later, the DAR Provincial
Office of Bulacan filed a petition to
annul the sale of the Dakila property
with the Provincial Agrarian Reform
Adjudicator (PARAD) of Bulacan,
docketed as DARAB Case No. R-03-02287306.
Ruling of the DAR Regional Office
On August 18, 2006, the OIC-Regional
Director in San Fernando, Pampanga
issued an order granting the letter
request of BARC Chairman Enriquez in
A-0302-0608-06, A.R. Case No. LSD032406,16viz:chanRoblesvirtualLawlibr
ary
WHEREFORE, in the light of the
foregoing premises and for the reason
indicated therein, this Office resolves to
give due course to this instant request.
Accordingly, the MARO and PARO
concerned are hereby DIRECTED to
place within the ambit of PD 27/RA
6657 the following titles TCT Nos. T81618, T-81619, T-81620, T-81621, T81622 and T-73023, all situated at
Sumapang Matanda, Malolos City,
Bulacan, registered in the name of Holy
Trinity
Realty
and
Development
Corporation for distribution to qualified
farmer
beneficiary
(sic).
Finally, the DAR reserves the right to
cancel or withdraw this Order in case of
misrepresentation of facts material to its
issuance and for violation of pertinent
agrarian laws including applicable
implementing guidelines or rules and
regulations.
SO ORDERED.17
The OIC-Regional Director opined that
the sale of the Dakila property was a

prohibited
transaction
under
Presidential Decree No. 27, Section 6 of
Republic Act No. 665718 and DAR
Administrative Order No. 1, Series of
1989; and that the petitioner was
disqualified from acquiring land under
Republic Act No. 6657 because it was a
corporation.19
Aggrieved, the petitioner assailed the
order
through
its
Motion
to
Withdraw/Quash/Set Aside,20 citing lack
of jurisdiction and denial of due process.
It argued that the letter request was in
the nature of a collateral attack on its
title.
Pending resolution of the Motion to
Withdraw/Quash/Set
Aside,
the
Register of Deeds issued emancipation
patents (EPs) pursuant to the order of
the
OIC-Regional
Director.
The
petitioners titles were canceled and EPs
were issued to the respondents as
follows:21
TCT No.

Emancip
Are
ation
Beneficiar a
Patent y/ies
(sq
No.
m)
00783329 Victorio
50,0
dela Cruz
00
00783330 Lorenzo
50,0
Manalaysay 00
00783331 Ricardo
50,0
Marcelo, Jr. 00
00783332 Leoncio de 54,8
Guzman
10

T-2007EP22
T-2008EP23
T-2009EP24
T-2010EP25crala
wred
T-2011- 00783334 Gonzalo
EP26
Caspe
T-2012- 00783333
EP27

2,40
1
839

Almost two months after the EPs were

issued, the OIC-Regional Director

denied the petitioners motion

reconsideration.28
Ruling of the DAR Secretary

for

The petitioner appealed to the DAR

Secretary, submitting that: (1) the letter
request for coverage under Presidential
Decree No. 27 and the subsequent filing
of the petition for annulment of sale in
the DARAB constituted forum shopping;
and (2) the EPs were prematurely
issued.
On November 22, 2007, DAR Secretary
Nasser C. Pangandaman issued an order
denying the appeal,29 and holding that
forum shopping was not committed
because the causes of action in the letter
request and the action for cancellation
of the deed of sale before the DARAB
were distinct and separate; that the EPs
were regularly issued; and that the
resolution of the DARAB would not in
any manner affect the validity of the
EPs.
Ruling on the petitioners motion for
reconsideration, the DAR Secretary said
that the Dakila property was not exempt
from the coverage of Presidential Decree
No. 27 and Republic Act No. 6657
because Municipal Resolution No. 16-98
did not change or reclassify but merely
re-zoned the Dakila property.30
Ruling of the Office of the
President
On March 1, 2010, the Office of the
President (OP) reversed the ruling of
DAR Secretary Pangandaman upon its
finding that the Dakila property had
ceased to be suitable for agriculture, and
had been reclassified as residential land
pursuant to Municipal Resolution No.
16-98, thus:31
We find merit in the appeal.

Under Section 3 (c) of RA 6657,

agricultural lands refer to lands devoted
to agriculture as conferred in the said
law and not classified as industrial land.
Agricultural lands are only those lands
which are arable or suitable lands that
do not include commercial, industrial
and
residential
lands.
In this case, the subject landholdings are
not agricultural lands but rather
residential lands. The lands are located
in a residential area. Likewise, there are
agricultural activities within or near the
area. Even today, the areas in question
continued (sic) to be developed as a
residential community, albeit at a snails
pace. This can be readily gleaned from
the fact that both the City Assessor of
Malolos and the Provincial Assessor of
Bulacan have considered these lands as
residential for taxation purposes.
Based on the foregoing, it is clear that
appellants landholding cannot in any
language be considered as agricultural
lands. These lots were intended for
residential use. They ceased to be
agricultural lands upon approval of
Municipal Resolution No. 16-98. The
authority of the municipality (now City)
of Malolos to issue zoning classification
is an exercise of its police power, not the
power of eminent domain. Section 20,
Chapter 2, Title I of RA 7160 specifically
empowers municipal and/or city
councils to adopt zoning and subdivision
ordinances or regulations within its
territorial
jurisdiction.
A
zoning
ordinance/resolution
prescribes,
defines, and apportions a given political
subdivision into specific land uses as
present and future projection of needs.
The power of the local government to
convert or reclassify agricultural lands
to non-agricultural lands is not subject
to the approval of the Department of

Agrarian

Reform.

It bears stressing that in his Decision

dated April 30, 2002, as affirmed by the
Department
of
Agrarian
Reform
Adjudication Board (DARAB) in its
Resolution dated March 17, 2006,
Bulacan Provincial Adjudicator Toribio
Ilao, Jr., declared that the properties
were not tenanted and/or agricultural
and that the alleged farmers-occupants
are mere squatters thereto. These
decision and resolution were not
appealed by the farmers-occupants and,
as such, it became final and executory.
By declaring, in its assailed Order of
November 22, 2007, that the properties
subject of the suit, were agricultural
lands, the DAR Secretary thereby
reversed the said DARAB rulings, issued
more than a year before, and nullified
Resolution No. 16-98 of the Municipal
Council of Malolos, approved nine (9)
years earlier, on March 4, 1998. Thus,
the DAR Secretary acted with grave
abuse of discretion amounting to excess
or
lack
of
jurisdiction.
IN VIEW OF THE FOREGOING, the
appeal
is
hereby GRANTED.
Accordingly, the November 22, 2007
Order and February 22, 2008
Resolution of the Department of
Agrarian
Reform
are
hereby REVERSED and SET ASIDE.
SO ORDERED.32
The respondents moved to reconsider,
but the OP denied their motion for
reconsideration. Hence, they appealed
to the CA by petition for review.33
Ruling of the CA
In
the
now
assailed
decision
promulgated on July 27, 2011,34 the CA
reversed and set aside the decision of

the OP. It declared that prior to the

effectivity of Republic Act No. 6657 on
June 15, 1988 and even after the passage
of Municipal Resolution No. 16-98 on
March 4, 1998, the Dakila property was
an agricultural land; that there was no
valid reclassification because Section 20
of Republic Act No. 7160 (The Local
Government Code) and Memorandum
Circular No. 54 required an ordinance,
not a resolution; and that findings of the
DAR on the Dakila property being an
agricultural
land
should
be
respected,35 subject to the clarification to
the effect that its determination was
only limited to the issue of whether the
Dakila property was an agricultural land
covered by Republic Act No. 6657.
The petitioner sought reconsideration
but its motion for that purpose was
denied.36
Hence, this appeal by petition for review
on certiorari.
Issues
The petitioner presents the following
issues
for
our
consideration:chanRoblesvirtualLawlibr
ary
I
WHETHER
OR
NOT
THE
HONORABLE COURT OF APPEALS
ERRONEOUSLY OMITTED TO RULE
UPON, ALBEIT WITHOUT CITING
ANY VALID REASONS, THE VARIOUS
INTERRELATED ISSUES PROFFERED
IN
PETITIONERS
COMMENT
RELATIVE TO DARS INCLUSION OF
THE SUBJECT DAKILA PROPERTY
UNDER THE COVERAGE OF THE
AGRARIAN REFORM LAW, TO WIT:
A.) RESPONDENT-GRANTEES OF
EMANCIPATION PATENTS FROM
DAR
ARE
NOT
LEGITIMATE

TENANTS
OF
THE
DAKILA
PROPERTY; B.) THE SALE AND
TRANSFER OF TITLES IN THE NAME
OF
PETITIONER
HAVE
NOT
HERETOFORE BEEN NULLIFIED
EITHER BY THE DARAB CENTRAL
OFFICE OR THE REGULAR COURTS;
C.) THE BONAFIDE TENANTS OF THE
DAKILA PROPERTY HAVE VALIDLY
SURRENDERED THEIR TENANCY
RIGHTS IN FAVOR OF PETITIONERS
PREDECESSOR-IN-INTEREST;
D.)
THE DAKILA PROPERTY WAS NO
LONGER TENANTED AND, FURTHER,
WAS NO LONGER SUITABLE TO
AGRICULTURE, AT THE TIME OF ITS
COVERAGE
UNDER
AGRARIAN
REFORM, ITS ACTUAL USE BEING
ALREADY RESIDENTIAL
II
WHETHER
OR
NOT
THE
HONORABLE COURT OF APPEALS
LIKEWISE ERRED IN FAILING TO
RULE ON THE ILLEGALITY OF THE
MANNER BY WHICH THE DAR
CAUSED THE SUMMARY COVERAGE
OF THE DAKILA PROPERTY UNDER
THE CARP, ITS EXTRA-JUDICIAL
CANCELLATION OF PETITIONERS
TITLES WITHOUT DUE PROCESS OF
LAW,
AND
ITS
PREMATURE
ISSUANCE
OF
EMANCIPATION
PATENTS
IN
FAVOR
OF
RESPONDENTS
III
WHETHER
OR
NOT
THE
HONORABLE COURT OF APPEALS
ERRONEOUSLY
APPLIED
THE
PROVISIONS OF RA 6657 IN
RESOLVING
THE
SUBJECT
PETITION, EVEN THOUGH THE DAR
PLACED THE SUBJECT DAKILA
PROPERTY UNDER THE COVERAGE
OF PRESIDENTIAL DECREE NO. 27
IV.

WHETHER
OR
NOT
HEREIN
RESPONDENTS
PETITION
FOR
REVIEW A QUO OUGHT TO HAVE
BEEN DISMISSED OUTRIGHT BY THE
HONORABLE COURT OF APPEALS
FOR FAILURE TO COMPLY WITH
SECTION 4, RULE 7 OF THE 1997
REVISED
RULES
OF
CIVIL
PROCEDURE.37
The petitioner argues that the CA
ignored issues vital to the complete
determination of the parties respective
rights over the Dakila property.
Firstly, the CA should have ruled on the
propriety of issuing the EPs. In view of
the pending petition before the DARAB,
the DAR should have withheld the
issuance of the EPs. Even granting that a
final decision had already been rendered
by the DARAB, the issuance of the EPs
remained premature inasmuch as the
DAR had not yet commenced any court
proceedings for the cancellation of the
petitioners title. Accordingly, the
petitioners title remained indefeasible
and could not be disturbed by the
collateral orders by the OIC-Regional
Director and the DAR Secretary.

from each other; on one hand,

Presidential Decree No. 27 required the
beneficiary to be a tenant-farmer of an
agricultural land devoted to rice or corn,
while on the other Republic Act No.
6657 was relatively broader and covered
all public and private agricultural lands
regardless of the tenurial arrangement
and
the
commodity
produced.
Lastly, the CA should have dismissed the
respondents petition for review due to
its defective certification, pointing to the
verification having been executed by the
respondents despite the letter request
having been signed by BARC Chairman
Enriquez; and assailing the verification
for containing the statement that the
allegations therein were based on their
knowledge and belief instead of their
personal knowledge and authentic
records as required by the Rules of
Court.

Secondly, the petitioner was deprived of

due process because the requirements of
notice and the conduct of a public
hearing and a field investigation were
not strictly complied with by the DAR
pursuant to Republic Act No. 6657 and
DAR Administrative Order No. 12,
Series
of
1998.

The respondents countered that: (1) the

CA correctly set aside the issue of
whether or not they were qualified
beneficiaries, because that was not the
issue raised in the letter request; (2) the
CA could not have ruled on the validity
of the sale of the Dakila property in light
of the pending action in the DARAB; (3)
it was within the jurisdiction of the DAR
to determine whether or not the
respondents
were
qualified
beneficiaries; (4) the waivers by the
tenants were illegal; and (5) the issuance
of the EPs was a necessary consequence
of placing the Dakila property under the
coverage of Presidential Decree No. 27.

Thirdly, the CA erred in placing the

Dakila property under the coverage of
Republic Act No. 6657 when the order of
the OIC-Regional Director applied the
provisions of Presidential Decree No. 27.
The two laws should be differentiated

In view of the foregoing, the Court needs

to
consider
and
resolve
the
following:chanRoblesvirtualLawlibrary
1. Did the CA gravely err in
limiting its decision to the issue
of whether or not the Dakila

property was subject to the

coverage of Republic Act No.
6657?
2. Was the Dakila property
agricultural land within the
coverage of Republic Act No.
6657 or Presidential Decree No.
27?
3. Was the issuance of the EPs
pursuant to the August 16, 2006
order of the DAR Regional
Office proper?
Ruling
We reverse the CA, and reinstate the
decision of the OP.
I.
Procedural Issue
We first resolve the issue of the
supposedly
defective
verification.
The verification of a petition is intended
to secure an assurance that the
allegations contained in the petition
have been made in good faith, are true
and
correct
and
not
merely
38
speculative. This requirement affects
the form of the pleading, and its noncompliance will not render the pleading
defective. It is a formal, not a
jurisdictional requisite.39 The courts may
order the correction of the pleading if
the verification is lacking, and may even
act on an unverified pleading if doing so
will serve the ends of justice.40
Under the foregoing, the CA rightly
allowed the petition for review of the
respondents despite the statement that
the allegations therein were based on
their knowledge and belief. We
underscore that the defect was even
lifted upon the voluntary submission by
the respondents themselves of their
corrected verification in order to comply

with

the Rules

of

Court.

We cannot also subscribe to the

argument that the respondents were not
appropriate parties to sign the
verification. They were, considering that
when the DAR issued the EPs, they
became the real parties in interest in the
proceedings, giving them the requisite
personality to sign the verification.
Moreover, there is no question that the
party himself need not sign the
verification, for it was enough that the
partys representative, lawyer, or any
person who personally knew the truth
of the facts alleged in the pleadings
could sign the verification. 41 In any
event, the respondents, as the identified
beneficiaries, had legal standing and
interest to intervene to protect their
rights or interests under Republic Act
No. 6657. This is clear from Section 19
of Republic Act No. 9700,42 which
amended Republic Act No. 6657 by
adding
Section
50-A,
to
wit:chanRoblesvirtualLawlibrary
Section 19. Section 50 of Republic Act
No. 6657, as amended, is hereby further
amended by adding Section 50-A to read
as follows:
Section 50-A. Exclusive Jurisdiction on
Agrarian
Dispute.

x
x
x
In cases where regular courts or quasijudicial
bodies
have
competent
jurisdiction,
agrarian
reform
beneficiaries or identified beneficiaries
and/or their associations shall have legal
standing and interest to intervene
concerning their individual or collective
rights and/or interests under the CARP.
xxxx
II.
Courts can pass upon matters

related to the issues raised by the

parties
As a general rule, appellate courts are
precluded from discussing and delving
into issues that are not raised by the
parties. The pertinent rule is Section 8,
Rule 51 of the Rules of Court, to
wit:chanRoblesvirtualLawlibrary
Section 8. Questions that may be
decided. No error which does not
affect the jurisdiction over the subject
matter or the validity of the judgment
appealed from or the proceedings
therein will be considered unless stated
in the assignment of errors, or closely
related to or dependent on an assigned
error and properly argued in the brief,
save as the court may pass upon plain
errors and clerical errors.
In Philippine
National
Bank
v.
Rabat,43 the Court explained how this
rule
operates,
thus:chanRoblesvirtualLawlibrary
In his book, Mr. Justice Florenz D.
Regalado commented on this section,
thus:chanRoblesvirtualLawlibrary
1. Sec. 8, which is an amendment of the
former Sec. 7 of this Rule, now includes
some substantial changes in the rules on
assignment of errors. The basic
procedural rule is that only errors
claimed and assigned by a party will be
considered by the court, except errors
affecting its jurisdiction over the subject
matter. To this exception has now
been added errors affecting the
validity of the judgment appealed
from or the proceedings therein.
Also, even if the error complained
of by a party is not expressly stated
in his assignment of errors but the
same is closely related to or
dependent on an assigned error

and properly argued in his brief,

such error may now be considered
by the court. These changes are of
jurisprudential
origin.
2. The procedure in the Supreme Court
being generally the same as that in the
Court of Appeals, unless otherwise
indicated (see Secs. 2 and 4, Rule 56), it
has been held that the latter is clothed
with ample authority to review matters,
even if they are not assigned as errors on
appeal, if it finds that
their
consideration is necessary in arriving at
a just decision of the case. Also, an
unassigned error closely related to an
error properly assigned (PCIB vs. CA, et
al., L-34931, Mar. 18, 1988), or upon
which the determination of the question
raised by error properly assigned is
dependent, will be considered by the
appellate court notwithstanding the
failure to assign it as error (Ortigas, Jr.
vs. Lufthansa German Airlines, L-28773,
June 30, 1975; Soco vs. Militante, et al.,
G.R. No. 58961, June 28, 1983).
It may also be observed that under Sec.
8 of this Rule, the appellate court is
authorized to consider a plain error,
although it was not specifically assigned
by the appellant (Dilag vs. Heirs of
Resurreccion, 76 Phil. 649), otherwise it
would be sacrificing substance for
technicalities.44 (Emphasis supplied)
Conformably with the foregoing, the CA
is vested with sufficient authority and
discretion to review matters, not
assigned as errors on appeal, if it finds
that consideration thereof is necessary
in arriving at a complete and just
resolution of the case or to serve the
interests of justice or to avoid
dispensing piecemeal justice.45 In fact,
the CA is possessed with inherent
authority to review unassigned errors

that are closely related to an error

properly raised, or upon which the
determination of the error properly
assigned is dependent, or where it finds
that consideration thereof is necessary
in arriving at a just decision of the
case.46
It cannot be gainsaid that the validity of
the EPs was closely intertwined with the
issue of whether the Dakila property was
covered by the agrarian reform laws.
When the CA declared that the Dakila
property came within the coverage of
Republic Act No. 6657, the CA barely
scraped the surface and left more
questions unresolved rather than
writing finis on the matter. To recall,
this case originated from the letter of
BARC Chairman Enriquez requesting
that the Dakila property be placed under
the OLT pursuant to Presidential Decree
No. 27. But, as the petitioner correctly
argues, the two laws, although similarly
seeking to alleviate the plight of landless
farmers or farmworkers from the
bondage of tilling the soil, are distinct
from each other. Republic Act No. 6657
is broader in scope than Presidential
Decree No. 27, for the former applies to
all agricultural lands in which
agricultural activities are conducted,
while the latter requires that the covered
agricultural land be tenanted and
primarily devoted to rice or corn
cultivation.
In Sigre v. Court of Appeals,47 the Court
also stated:chanRoblesvirtualLawlibrary
[T]he Court need not belabor the fact
that R.A. 6657 or the CARP Law
operates distinctly from P.D. 27. R.A.
6657 covers all public and private
agricultural land including other lands
of the public domain suitable for
agriculture
as
provided
for
in
Proclamation No. 131 and Executive

Order No. 229; while, P.D. 27 covers rice

and corn lands. On this score, E.O. 229,
which provides for the mechanism of the
Comprehensive
Agrarian
Reform
Program,
specifically
states:
(P)residential Decree No. 27, as
amended, shall continue to operate with
respect to rice and corn lands, covered
thereunder. x x x It cannot be gainsaid,
therefore, that R.A. 6657 did not repeal
or supersede, in any way, P.D. 27. And
whatever provisions of P.D. 27 that are
not inconsistent with R.A. 6657 shall be
suppletory to the latter, and all rights
acquired by the tenant-farmer under
P.D. 27 are retained even with the
passage of R.A. 6657.48
In addition, the tenurial instruments
issued to agrarian reform beneficiaries
differ under these laws. Ownership of
the beneficiary under Presidential
Decree No. 27 is evidenced by an EP
while a certificate of land ownership
award (CLOA) is issued under Republic
Act No. 6657. For this reason, the CA
could not have simply set aside the issue
of whether the EPs issued to the
respondents were validly made by the
DAR considering its declaration that the
Dakila property was subject to Republic
Act No. 6657.
III.
The Dakila property was not an
agricultural
land
within the coverage of R.A. No.
6657 or P.D. No. 27
The CA declared that the Dakila
property as an agricultural land; and
that there was no valid reclassification
under Municipal Resolution No. 16-98
because the law required an ordinance,
not
a
resolution.
We

agree

in

part

with

the

CA.

Under Republic Act No. 7160, local

government units, such as the
Municipality of Malolos, Bulacan, are
vested with the power to reclassify
lands. However, Section 20, Chapter II,
Title I of Republic Act No. 7160
ordains:chanRoblesvirtualLawlibrary
Section 20. Reclassification of Lands.
(a) A city or municipality may, through
an ordinance passed by the
sanggunian
after
conducting
public hearings for the purpose,
authorize
the
reclassification
of
agricultural lands and provide for the
manner
of
their
utilization
or
disposition in the following cases: (1)
when the land ceases to be economically
feasible and sound for agricultural
purposes as determined by the
Department of Agriculture or (2) where
the land shall have substantially greater
economic
value
for
residential,
commercial, or industrial purposes, as
determined
by
the
sanggunian
concerned: x x x. (Emphasis supplied)
Clearly, an ordinance is required in
order to reclassify agricultural lands,
and such may only be passed after the
conduct
of
public
hearings.
The petitioner claims the reclassification
on the basis of Municipal Resolution No.
16-98. Given the foregoing clarifications,
however, the resolution was ineffectual
for that purpose. A resolution was a
mere declaration of the sentiment or
opinion of the lawmaking body on a
specific matter that was temporary in
nature, and differed from an ordinance
in that the latter was a law by itself and
possessed a general and permanent
character.49 We also note that the
petitioner did not show if the requisite
public hearings were conducted at all. In
the absence of any valid and complete
reclassification, therefore, the Dakila

property remained under the category of

an
agricultural
land.
Nonetheless, the Dakila property was
not an agricultural land subject to the
coverage of Republic Act No. 6657 or
Presidential
Decree
No.
27.
Verily, the basic condition for land to be
placed under the coverage of Republic
Act No. 6657 is that it must either be
primarily devoted to or be suitable for
agriculture.50 Perforce, land that is not
devoted to agricultural activity is outside
the coverage of Republic Act No.
6657.51 An agricultural land, according
to Republic Act No. 6657, is one that
is devoted to agricultural activity and
not classified as mineral, forest,
residential, commercial or industrial
land.52Agricultural activity includes the
cultivation of the soil, planting of crops,
growing of fruit trees, raising livestock,
poultry or fish, including the harvesting
of such farm products; and other farm
activities and practices performed by a
farmer in conjunction with such farming
operations done by persons whether
natural
or
juridical.53
Consequently, before land may be
placed under the coverage of Republic
Act No. 6657, two requisites must be
met, namely: (1) that the land must be
devoted to agricultural activity; and (2)
that the land must not be classified as
mineral, forest, residential, commercial
or industrial land. Considering that the
Dakila property has not been classified
as
mineral,
forest,
residential,
commercial or industrial, the second
requisite is satisfied. For the first
requisite to be met, however, there must
be a showing that agricultural activity is
undertaken
on
the
property.
It is not difficult to see why Republic Act

No. 6657 requires agricultural activity in

order to classify land as agricultural. The
spirit of agrarian reform laws is not to
distribute lands per se, but to enable the
landless to own land for cultivation. This
is why the basic qualification laid down
for the intended beneficiary is to show
the willingness, aptitude and ability to
cultivate and make the land as
productive
as
possible.54 This
requirement conforms with the policy
direction set in the 1987 Constitution to
the effect that agrarian reform laws shall
be founded on the right of the landless
farmers and farmworkers to own,
directly or collectively, the lands they
till.55 In Luz Farms v. Secretary of the
Department of Agrarian Reform,56 we
even said that the framers of the
Constitution limited agricultural lands
to the arable and suitable agricultural
lands.
Here, no evidence was submitted to
show that any agricultural activity like
cultivation of the land, planting of crops,
growing of fruit trees, raising of
livestock, or poultry or fish, including
the harvesting of such farm products,
and other farm activities and practices
were being performed on the Dakila
property in order to subject it to the
coverage of Republic Act No. 6657. We
take particular note that the previous
tenants had themselves declared that
they were voluntarily surrendering their
tenancy rights because the land was not
conducive to farming by reason of its
elevation, among others.57 Also notable
is the second Whereas Clause of
Municipal Resolution No. 16-98, which
mentioned that the Dakila property was
not fit for agricultural use due to lack of
sufficient irrigation and that it was more
suitable
for
residential
use,
thus:chanRoblesvirtualLawlibrary

WHEREAS, after an ocular inspection of

the
subject
lots
and
matured
deliberation, the Sangguniang Bayan
found merit in the request for the
following reasons, thus:
1.
The
properties
are
untenanted;cralawlawlibrary
2. That they are not fitted [sic] for
agricultural use for lack of
sufficient
irrigation;
3. There are improvements already
introduce[d] on the property by its
owner like construction of subdivision
roads;cralawlawlibrary
4. Lack of oppositor to the intend[ed]
subdivision project on the properties by
its
owner;cralawlawlibrary
5. That they are more suitable for
residential use considering their location
viz-a-viz (sic) with (sic) the residential
lots in the area.58(Emphasis supplied)
The terse statement by the OIC-Regional
Director that the Dakila property would
still be subject to Republic Act No. 6657
should Presidential Decree No. 27 be
inapplicable59 did
not
meet
the
requirements under Republic Act No.
6657. Section 7 of Republic Act No. 6657
identified rice and corn lands subject to
Presidential Decree No. 27 for priority
distribution in the first phase and
implementation of the CARP. Insofar as
the interplay of these two laws was
concerned, the Court has said that
during the effectivity of the Republic Act
No. 6657 and in the event of incomplete
acquisition under Presidential Decree
No. 27, the former should apply, with
the provisions of the latter and
Executive Order No. 22860 having only
suppletory
effect.61

Even if we supplemented the provisions

of Presidential Decree No. 27, the
outcome is still the same, because the
Dakila property was still not within the
scope of the law. For land to be covered
under Presidential Decree No. 27, it
must be devoted to rice or corn crops,
and there must be a system of sharecrop or lease-tenancy obtaining therein.
If either requisite is absent, the land
must be excluded. Hence, exemption
from coverage followed when the land
was not devoted to rice or corn even if it
was tenanted; or the land was
untenanted even though it was devoted
to rice or corn.62Based on these
conditions, the DAR Regional Office
erred in subjecting the Dakila property
under
the
OLT.
The first requirement, that the land be
devoted to rice or corn cultivation, was
not sufficiently established. In this
regard, the OIC-Regional Director
inaccurately based his holding on the
report submitted by the Legal Services
Division that
[P]ortion of the property embraced
under TCT No. 103697 with an area
of 2.5611 hectares more or less, was
placed under PD [No.] 27 and
subsequently an approved survey plan
(Psd-03-020270) has been prepared
which was then the basis of the issuance
of titles in favor of Felix Surio and
Silvino Manalad under EP Nos.
345262 and 342561. On the other
hand, the land subject of this
controversy was, likewise, subdivided
and now covered by an approved plan
ASP No. Psd-031410-066532.63
What can be gathered from the report of
the Legal Services Division was that the
land owned by the petitioner and
covered by Presidential Decree No. 27
was the Sumapang Matanda property

under TCT No. 103697. As to the Dakila

property, we can only infer from the
report that it was merely subdivided.
The report did not mention whatsoever
the agricultural activities performed in
the Dakila property. Nor was there a
finding that the Dakila property was
devoted to either rice or corn cultivation
as to justify its coverage under
Presidential Decree No. 27. Such a
finding was necessary, for the Court has
observed in Solmayor v. Arroyo:64
Although this Court will not disregard
the evidence presented by petitioners
that the land is devoted to rice and corn
crops in 1993, when the ocular
inspection by the DAR personnel was
conducted, it must be noted that around
the time of the passage of Presidential
Decree No. 27 up to 1978, when the
subject property was placed under the
coverage of Operation Land Transfer,
the available evidence issued and
certified by the different government
agencies, closer in time to the
mentioned time frame will show that
respondents property has, indeed, been
classified as within the residential and
commercial zones of Davao City. It
cannot escape the notice of this Court
that more than a decade before the
issuance of the said ocular investigation
report stating that the land is devoted to
agricultural production, government
agencies equipped with the technical
expertise to determine the proper
classification of the subject land have
already determined that the land is part
of the residential and commercial zones
of Davao City making it suitable for
other urban use. Therefore, it is only
reasonable to conclude, based on the
certification of various executive
agencies issued when this controversy
arose, that at the time of the passage of
Presidential Decree No. 27, respondents
property was not agricultural.65

For land to come within the coverage of

the OLT, indeed, there must be a
showing that it is devoted to the
cultivation of rice or corn, and there
must be a system of share-crop or lease
tenancy obtaining on October 21, 1972,
the time when Presidential Decree No.
27 took effect.66 Unfortunately, no such
evidence was presented, nor was there
any field investigation conducted to
verify whether or not the landholding
was primarily devoted to the cultivation
of rice or corn. Accordingly, the Dakila
property should be excluded from the
OLT.
The DAR Secretary affirmed the validity
of the EPs in favor of the respondents
only pursuant to the Order of the
Regional Director.67 We note, however,
that the evidence to establish in the
proceedings below that they or their
predecessors had been tenants of the
petitioners predecessor-in-interest to
make them the rightful beneficiaries of
the Dakila property was severely
wanting. For tenancy to exist, there
must be proof that: (1) the parties are
the landholder and the tenant; (2) the
subject is agricultural land; (3) there is
consent; (4) the purpose is agricultural
production;
(5)
there
is
consideration;68 and (6) there is a
sharing of the harvests. All these
requisites are necessary to create a
tenancy relationship, and the absence of
one or more of them will not make the
alleged tenant a de facto tenant.69 Unless
a person has established his status as
a de jure tenant, he is not entitled to
security of tenure; nor is he covered by
the land reform program of the
Government under the existing tenancy
laws.70 Here, the consent to establish a
tenant-landlord
relationship
was
manifestly absent. In view of the

petitioners repeated denial of the

tenancy, the respondents ought then to
establish the tenancy relationship, but
did not do so. Tenancy could not be
presumed, but must be established by
evidence; its mere allegation is neither
evidence nor equivalent to proof of its
existence.71
There was also no showing that the
respondents were engaged in any
agricultural activities, or agreed with
Santiago or the petitioner on the sharing
of harvests. The OIC-Regional Director
obviously disregarded the affidavit of
Barangay Captain Felino M. Teodoro of
Dakila, Malolos, Bulacan stating that the
respondents were never the actual
farmers on the Dakila property.72
IV.
The petitioner was deprived of due
process
The petitioner posits that it was denied
due process by the failure of the OICRegional Director to see to the
compliance
with
the
procedures
outlined by Republic Act No. 6657 and
Presidential Decree No. 27. It claims
that the OIC-Regional Director resorted
to
procedural
shortcuts
and
irregularities73 in issuing the EPs to the
respondents.
We agree with the petitioners position.
In Reyes v. Barrios,74 we identified the
procedural requirements that must be
followed prior to the issuance of an EP,
viz:chanRoblesvirtualLawlibrary
The Primer on Agrarian Reform
enumerates the steps in transferring the
land to the tenant-tiller, thus:
a. First step: the identification of
tenants, landowners, and the land
covered
by
OLT.

b. Second step: land survey and

sketching of the actual cultivation of the
tenant to determine parcel size,
boundaries,
and
possible
land
use;cralawlawlibrary
c. Third step: the issuance of the
Certificate of Land Transfer (CLT). To
ensure accuracy and safeguard against
falsification, these certificates are
processed at the National Computer
Center
(NCC)
at
Camp
Aguinaldo;cralawlawlibrary
d. Fourth step: valuation of the land
covered
for
amortization
computation;cralawlawlibrary
e. Fifth step: amortization payments of
tenant-tillers over fifteen (15) year
period;
and
f. Sixth step: the issuance of the
Emancipation Patent.
Thus, there are several steps to be
undertaken before an Emancipation
Patent can be issued. x x x.
x

Furthermore,
there
are
several
supporting documents which a tenantfarmer must submit before he can
receive the Emancipation Patent, such
as:
a.
Application
for
issuance
of
Emancipation Patent;cralawlawlibrary
b. Applicant's (owner's)
Certificate
of
Land

copy of
Transfer.

c. Certification of the landowner and the

Land Bank of the Philippines that the
applicant has tendered full payment of
the parcel of land as described in the
application and as actually tilled by
him;cralawlawlibrary

d. Certification by the President of the

Samahang Nayon or by the head of
farmers' cooperative duly confirmed by
the municipal district officer (MDO) of
the Ministry of Local Government and
Community Development (MLGCD)
that the applicant is a full-fledged
member of a duly registered farmers'
cooperative or a certification to these
effect;cralawlawlibrary
e. Copy of the technical (graphical)
description of the land parcel applied for
prepared by the Bureau of Land
Sketching Team (BLST) and approved
by the regional director of the Bureau of
Lands;cralawlawlibrary
f. Clearance from the MAR field team
(MARFT) or the MAR District Office
(MARDO) legal officer or trial attorney;
or in their absence, a clearance by the
MARFT leader to the effect that the land
parcel applied for is not subject of
adverse claim, duly confirmed by the
legal officer or trial attorney of the MAR
Regional Office or, in their absence, by
the regional director;cralawlawlibrary
g. Xerox copy of Official Receipts or
certification by the municipal treasurer
showing that the applicant has fully paid
or has effected up-to-date payment of
the realty taxes due on the land parcel
applied
for;
and
h. Certification by the MARFT leader
whether applicant has acquired farm
machineries from the MAR and/or from
other government agencies.
Majority of these supporting documents
are lacking in this case. Hence, it was
improper for the DARAB to order the
issuance of the Emancipation Patent in
favor of respondent without the required
supporting documents and without

following the requisite procedure before

an Emancipation Patent may be validly
issued.75
Furthermore, Section 16 of Republic Act
No. 6657 outlines the procedure in
acquiring private lands subject to its
coverage, viz:chanRoblesvirtualLawlibra
ry
Section 16. Procedure for Acquisition of
Private Lands. - For purposes of
acquisition of private lands, the
following
procedures
shall
be
followed:chanRoblesvirtualLawlibrary
(a) After having identified the land, the
landowners and the beneficiaries, the
DAR shall send its notice to acquire the
land to the owners thereof, by personal
delivery or registered mail, and post the
same in a conspicuous place in the
municipal building and barangay hall of
the place where the property is located.
Said notice shall contain the offer of the
DAR to pay a corresponding value in
accordance with the valuation set forth
in Sections 17, 18 and other pertinent
provisions
hereof.
(b) Within thirty (30) days from the date
of receipt of written notice by personal
delivery or registered mail, the
landowners, his administrator or
representative shall inform the DAR of
his acceptance or rejection of the
former.
(c) If the landowner accepts the offer of
the DAR, the Land Bank of the
Philippines shall pay the landowner the
purchase price of the land within thirty
(30) days after he executes and delivers
a deed of transfer in favor of the
Government
and
surrenders
the
Certificate of Title and other muniments
of
title.

(d) In case of rejection or failure to

reply, the DAR shall conduct summary
administrative proceedings to determine
the compensation for the land by
requiring the landowner, the LBP and
other interested parties to submit
evidence as to the just compensation for
the land, within fifteen (15) days from
the receipt of notice. After the expiration
of the above period, the matter is
deemed submitted for decision. The
DAR shall decide the case within thirty
(30) days after it is submitted for
decision.
(e) Upon receipt by the landowner of the
corresponding payment or in case of
rejection or no response from the
landowner, upon the deposit with an
accessible bank designated by the DAR
of the compensation in cash or in LBP
bonds in accordance with this Act, the
DAR shall take immediate possession of
the land and shall request the proper
Register of Deeds to issue a Transfer
Certificate of Title (TCT) in the name of
the Republic of the Philippines. The
DAR shall thereafter proceed with the
redistribution of the land to the
qualified
beneficiaries.
(f) Any party who disagrees with the
decision may bring the matter to the
court of proper jurisdiction for final
determination of just compensation.
Under Republic Act No. No. 6657 and
DAR A.O. No. 12, Series of 1989, two
notices should be sent to the landowner
the first, the notice of coverage; and
the other, the notice of acquisition.
The Court cannot consider and declare
the proceedings conducted by the OICRegional Director as a substantial
compliance
with
the
notice
requirements. Compliance with such

requirements, being necessary to render

the implementation of the CARP valid,
was mandatory. As the Court observed
inRoxas & Co., Inc. v. Court of
Appeals:76
For a valid implementation of the CAR
Program, two notices are required:
(1) theNotice of Coverage and
letter
of
invitation to
a
preliminary conference sent to the
landowner, the representatives of
the
BARC,
LBP,
farmer
beneficiaries and other interested
parties pursuant to DAR A.O. No.
12, Series of 1989; and (2)the
Notice of Acquisition sent to the
landowner under Section 16 of the
CARL.
The importance of the first notice,
i.e., the Notice of Coverage and the
letter
of
invitation
to
the
conference, and its actual conduct
cannot be understated. They are
steps designed to comply with the
requirements of administrative
due process. The implementation
of the CARL is an exercise of the
States police power and the power
of eminent domain. To the extent
that the CARL prescribes retention
limits to the landowners, there is
an exercise of police power for the
regulation of private property in
accordance with the Constitution.
But where, to carry out such
regulation,
the
owners
are
deprived of lands they own in
excess of the maximum area
allowed, there is also a taking
under the power of eminent
domain. The taking contemplated
is not a mere limitation of the use
of the land. What is required is the
surrender of the title to and
physical possession of the said
excess and all beneficial rights

accruing to the owner in favor of

the farmer beneficiary. The Bill of
Rights provides that "[n]o person
shall be deprived of life, liberty or
property without due process of
law." The CARL was not intended
to take away property without due
process of law. The exercise of the
power of eminent domain requires
that due process be observed in
the taking of private property.
x

Clearly then, the notice requirements

under the CARL are not confined to the
Notice of Acquisition set forth in Section
16 of the law. They also include the
Notice of Coverage first laid down in
DAR A. O. No. 12, Series of 1989 and
subsequently amended in DAR A. O. No.
9, Series of 1990 and DAR A. O. No. 1,
Series of 1993. This Notice of Coverage
does not merely notify the landowner
that his property shall be placed under
CARP and that he is entitled to exercise
his retention right; it also notifies him,
pursuant to DAR A. O. No. 9, Series of
1990, that a public hearing shall be
conducted where he and representatives
of the concerned sectors of society may
attend to discuss the results of the field
investigation, the land valuation and
other pertinent matters. Under DAR A.
O. No. 1, Series of 1993, the Notice of
Coverage also informs the landowner
that a field investigation of his
landholding shall be conducted where
he and the other representatives may be
present.77 (Emphasis supplied)
The procedures provided by Section 16
of Republic Act No. 6657 and its
relevant DAR administrative issuances
are to ensure the compliance with the
due process requirements of the law.
The result of their non-compliance is to

deprive
the
landowner
of
its
constitutional right to due process.
The Court has carefully explained
in Roxas & Co., Inc. v. Court of
Appeals that the taking under the CARL
is an exercise of police power as well as
of eminent domain. The taking of the
landholding by the State effectively
results in the surrender by the
landowner of its title and physical
possession to the beneficiaries. Hence,
compensation should be given to the
landowner prior to the taking. This is
the clear-cut directive of Section 16(e) of
Republic Act No. 6657 which mandates
the DAR to take immediate possession
of the land only after full payment and
to thereafter request the Register of
Deeds to transfer title in the name of the
Republic of the Philippines, and later on
to
the
intended
beneficiaries.
However, there was no evidence of
payment prior to the cancellation of the
petitioners TCTs submitted here. The
requirement of prior payment was found
in Republic Act No. 6657 and
Presidential Decree No. 27, under which
full payment by the intended beneficiary
was a condition prior to the award of an
EP. We have explicitly pronounced
in Corua
v.
Cinamin78 that
the
emancipation of tenants does not come
free. The transfer of lands under
Presidential Decree No. 27 remained
subject to the terms and conditions
provided in said law. In Paris v.
Alfeche,79 we
said:chanRoblesvirtualLawlibrary
x x x. Section 2 of PD 266 states:
After the tenant-farmer shall have fully
complied with the requirements for a
grant of title under Presidential Decree
No. 27, an Emancipation Patent and/or
Grant shall be issued by the Department
of Agrarian Reform on the basis of a

duly

approved

survey

plan.

On the other hand, paragraphs 8 and 9

of
PD
27
reads
as
follows:chanRoblesvirtualLawlibrary
For the purpose of determining the cost
of the land to be transferred to the
tenant-farmer pursuant to this Decree,
the value of the land shall be equivalent
to two and one-half (2 ) times the
average harvest of three normal crop
years immediately preceding the
promulgation
of
this
Decree;cralawlawlibrary
The total cost of the land, including
interest at the rate of six (6) per centum
per annum, shall be paid by the tenant
in fifteen (15) years of fifteen (15) equal
annual amortizations[.]
Although, under the law, tenant
farmers are already deemed
owners of the land they till, they
are still required to pay the cost of
the land, including interest, within
fifteen years before the title is
transferred to them.80 (Emphasis
supplied)
The unquestioned non-compliance with
the procedures set by Republic Act No.
6657 and its relevant rules and
regulations further denied to the
petitioner the exercise of its right of
retention.81 In doing so, the OICRegional Director disregarded this
constitutionally guaranteed right. We
cannot understate the value of the right
of retention as the means to mitigate the
effects of compulsory land acquisition by
balancing the rights of the landowner
and the tenant and by implementing the
doctrine that social justice is not meant
to perpetrate an injustice against the
landowner.82

We also consider the manner by which

the Dakila property was apportioned to
the respondents highly suspect. It
appears from the face of the EPs that the
individual lots were allocated based on
how the landholding was subdivided by
the petitioner. Moreover, all the
respondents
were
awarded
lots
exceeding three hectares in violation of
Section 23 of Republic Act No. 6657,
which provides that [n]o qualified
beneficiary may own more than three
(3) hectares of agricultural land.
In fine, the order of the OIC-Regional
Director was patently null and void. The
denial of due process to the petitioner
sufficed to cast the impress of nullity on
the official act thereby taken. A decision
rendered without due process is void ab
initio and may be attacked directly or
collaterally.83 All the resulting acts were
also null and void. Consequently, the
EPs awarded to the respondents should
be
nullified.
WHEREFORE,
the
Court GRANTS the petition for review
on certiorari; REVERSES and SETS
ASIDEthe decision promulgated on
July 27, 2011 by the Court of
Appeals; REINSTATES the
assailed
decision of the Office of the President
issued on March 1, 2010; DIRECTS the
cancellation of Emancipation Patents
No. 00783329, No. 00783330, No.
0078331, No. 0078332, No. 0078333,
and No. 0078334 issued to the
respondents
for
being NULL and VOID;
and ORDERS the respondents to pay
the
costs
of
suit.
SO

ORDERED.

Sereno, C.J., Leonardo-De Castro,

Perez, and Perlas-Bernabe, JJ., concur.
YU CHANG VS. REPUBLIC (GR
No. 171726)
DECISION
VILLARAMA, JR. J.:
This
petition
for
review
on certiorari under Rule 45 of the 1997
Rules of Civil Procedure, as amended,
assails the Decision[1] dated August 26,
2005 and the Resolution[2] dated
February 13, 2006 of the Court of
Appeals (CA) in CA-G.R. CV No.
67430. The CA reversed and set aside
the April 28, 2000 Decision [3] of the
Regional Trial Court of Pili, Camarines
Sur, Branch 31, in LRC No. P-115, LRA
Rec. No. N-68012, which granted
petitioners application for registration of
title over two parcels of land,
denominated as Lots 2199 and 2200 of
Cad. 291, Pili Cadastre.
The antecedent facts, as culled from the
records, are as follows:
On March 22, 1949, petitioners father,
L. Yu Chang[4] and the Municipality of
Pili, Camarines Sur, through its then
Mayor, Justo Casuncad, executed an
Agreement
to
Exchange
Real
Property[5] wherein the former assigned
and transferred to the Municipality of
Pili his 400-square-meter residential lot
in Barrio San Roque, Pili, Camarines
Sur, in exchange for a 400-square-meter
piece of land located in San Juan,
Pili. Thereafter, L. Yu Chang and his
family took possession of the property
thus obtained and erected a residential
house and a gasoline station thereon. He
also declared the property in his name
under Tax Declaration No. 01794[6]and
01795[7] and paid the real property taxes
thereon as evidenced by twenty-eight
(28) official receipts from February 21,

1951 up to March 10, 1976. When L. Yu

Chang died on September 30, 1976, his
wife, Donata Sta. Ana and his seven
children inherited the property and
succeeded in the possession of the
property.
On March 1, 1978, a Deed of Transfer
and Renunciation[8] of their rights over
the property was executed by L. Yu
Chang's five children, Rafaela, Catalina,
Flaviana, Esperanza, and Antonio, in
favor of herein petitioners. After the
transfer, petitioners had the subject
property surveyed and subdivided into
two lots, Lot 2199[9] and Lot 2200[10] of
Plan
SWO-05-000888,
Pili
Cadastre. Petitioners also declared the
lots in their names for taxation purposes
as shown in Tax Declaration No.
02633[11] and paid the real property
taxes thereon.
On February 21, 1997, petitioner
Soledad Yu Chang, for herself and in
representation of her brother and copetitioner, Vicente Yu Chang, filed a
petition[12] for registration of title over
the
aforementioned
lots
under
the Property Registration Decree. In
their petition, they declared that they
are the co-owners of the subject lots;
that they and their predecessors-ininterest have been in actual, physical,
material, exclusive, open, occupation
and possession of the above described
parcels of land for more than 100
years[13]; and that allegedly, they have
continuously, peacefully, and adversely
possessed the property in the concept of
owners. Hence, they are entitled to
confirmation of ownership and issuance
and registration of title in their names.
In support of their application,
petitioners submitted the following
documents, to wit:
1. Agreement
Property;

to

Exchange

Real

2. Deed of Transfer and Renunciation;

3. Approved Plan of Lot 2199 and Lot
2200, Cad. 291, Pili Cadastre;
4. Approved Technical Description of
Lot 2199;
5. Approved Technical Description of
Lot 2200;
6. Field Appraisal and Assessment
Sheet (FAAS) A.R.P. No. 026-044 for
Lot 2199 Cad. 291; and
7. Field Appraisal and Assessment
Sheet (FAAS) A.R.P. No. 026-043 for
Lot 2200 Cad. 291 Pili Cadastre.
The Republic, through the Office of the
Solicitor General (OSG), filed an
Opposition[14] to
the
application,
alleging, inter alia, that: (1) neither the
applicants nor their predecessors-ininterest have been in open, continuous,
exclusive and notorious possession of
the land since June 12, 1945 or prior
thereto; (2) the muniments of title, tax
declarations and tax receipts do not
constitute competent and sufficient
evidence of a bona fide acquisition of the
land; and (3) that the parcels of land
applied for are portions of the public
domain and are not subject to private
appropriation.
No
other
parties
filed
their
opposition. Thus, on December 14, 1998,
an Order of General Default[15] was
issued by the trial court.
After hearing, the trial court rendered a
Decision
granting
petitioners'
application. The fallo of the trial courts
decision reads:
WHEREFORE, in view of the foregoing,
decision is hereby rendered as follows:
1. Confirming the imperfect title of the
herein applicants Vicente Yu Chang and
Soledad Yu Chang over the two (2)
parcels of land described in paragraph
two (2) page 2 of the Petition,
particularly Lot 2199, Plans S0-05-

000888, Cad. 291, Pili Cadastre and Lot

2200, Plan SWO-05-000888, Cad. 291,
Pili Cadastre; both Filipino citizens,
residents of #14 Joaquin St., Corinthian
Garden, Quezon City and San Juan, Pili,
Camarines Sur respectively;
2. Ordering the dismissal of the
application in the Cadastral proceeding
with respect to Lots 2199 and 2200,
Cad. 291, Pili Cadastre under CAD Case
No. N-9;
3. After finality of this decision, let the
corresponding decree of registration be
issued by the Administrator, Land
Registration Authority to the herein
applicants above-mentioned.
SO ORDERED.[16]
The Republic appealed the decision to
the CA on the ground that the court a
quo erred in granting petitioners
application for registration of Lots 2199
and 2200 despite their failure to show
compliance with the requirements of the
law. In addition, the Republic asserted
that the land was classified as public
forest land; hence, it could not be
subject to appropriation and alienation.
As aforesaid, the CA reversed the trial
court's decision on August 26, 2005, and
dismissed petitioners application for
land registration. The CA considered the
petition to be governed by Section 48(b)
of Commonwealth Act (C.A.) No. 141 or
the Public Land Act, as amended, and
held that petitioners were not able to
present incontrovertible evidence that
the parcels of land sought to be
registered are alienable and disposable.
[17]
The CA relied on the testimony of
Lamberto Orcena, Land Management
Officer III of CENRO, Iriga City, who
testified that prior to October 30, 1986,
the entire area encompassing the right
side of the Naga-Legaspi Highway,
including the subject properties, was
classified as forest land. According to
the CA, even if the area within which the

subject properties are located is now

being used for residential and
commercial purposes, such fact will not
convert the subject parcels of land into
agricultural land.[18] The CA stressed
that there must be a positive act from
the government declassifying the land as
forest land before it could be deemed
alienable or disposable land for
agricultural or other purposes.[19]
Additionally, the CA noted that the lands
sought to be registered were declared
disposable public land only on October
30, 1986. Thus, it was only from that
time that the period of open, continuous
and notorious possession commenced to
toll against the State.
Aggrieved, petitioners are now before
this Court via the present appeal, raising
the sole issue of whether the appellate
court erred in dismissing their
application for registration of title on the
ground that they failed to prove
compliance with the requirements of
Section 48(b) of the Public Land Act, as
amended.
Petitioners insist that the subject
properties could no longer be considered
and classified as forest land since there
are buildings, residential houses and
even government structures existing and
standing on the land.[20] In their
Memorandum,[21] petitioners point out
that the original owner and possessor of
the subject land was the Municipal
Government of Pili which was
established in 1930. The land was
originally part of the municipal ground
adjacent to the Municipal Building
located at the right side of the NagaLegaspi National Highway.[22] From
1949, when L. Yu Chang acquired the
property through barter and up to the
filing of petitioners application in 1997,
petitioners and their predecessors-ininterest had been in actual physical and
material possession of the land in the

concept of an owner, notorious and

known to the public and adverse to the
whole world.
The Republic, through the OSG, for its
part, maintains that petitioners failed to
prove their open, continuous, exclusive
and notorious possession of the subject
lots for the period of time required by
law. The OSG also submits that the
subject lands were declared as alienable
and disposable only on October 30,
1986.
We deny the petition for lack of merit.
Section 48(b) of the Public Land Act, as
amended by P.D. 1073, under which
petitioners application was filed,
provides:
SEC. 48. The following described
citizens of the Philippines, occupying
lands of the public domain or claiming
to own any such lands or an interest
therein, but whose titles have not been
perfected or completed, may apply to
the Regional Trial Court of the province
or city where the land is located for
confirmation of their claims and the
issuance of a certificate of title therefor,
under the Property Registration Decree,
to wit:
xxxx
(b) Those who by themselves or through
their predecessors[-]in[-]interest have
been in the open, continuous, exclusive,
and
notorious
possession
and
occupation of alienable and disposable
agricultural lands of the public domain,
under a bona fide claim of acquisition or
ownership, since June 12, 1945, except
when prevented by war or force
majeure. These shall be conclusively
presumed to have performed all the
conditions essential to a Government
grant and shall be entitled to a
certificate of title under the provisions of
this chapter.

x x x x[23]
Under this provision, in order that
petitioners application for registration of
title may be granted, they must first
establish the following: (1) that the
subject land forms part of the disposable
and alienable lands of the public domain
and (2) that they have been in open,
continuous, exclusive and notorious
possession and occupation of the same
under a bona fide claim of ownership,
since June 12, 1945, or earlier.
[24]
Applicants must overcome the
presumption that the land they are
applying for is part of the public domain
and that they have an interest therein
sufficient to warrant registration in their
names arising from an imperfect title.[25]
In the instant case, petitioners did not
adduce any evidence to the effect that
the lots subject of their application are
alienable and disposable land of the
public domain. Instead, petitioners
contend that the subject properties
could no longer be considered and
classified as forest land since there are
building structures, residential houses
and even government buildings existing
and standing on the area. This, however,
is hardly the proof required under the
law. As clarified by this Court in Heirs of
Jose Amunategui v. Director of
Forestry,[26] a forested area classified as
forest land of the public domain does
not lose such classification simply
because loggers or settlers may have
stripped it of its forest cover. Parcels of
land classified as forest land may
actually be covered with grass or planted
with crops by kaingin cultivators or
other farmers. Forest lands do not have
to be on mountains or in out-of-the-way
places. The classification of land is
descriptive of its legal nature or status
and does not have to be descriptive of
what the land actually looks like.
[27]
Unless and until the land classified

as forest land is released in an official

proclamation to that effect so that it may
form part of the disposable agricultural
lands of the public domain, the rules on
confirmation of imperfect title do not
apply.[28] As aptly held by the appellate
court:
[T]he fact that the area within which the
subject parcels of land are located is
being used for residential and
commercial purposes does not serve to
convert the subject parcels of land into
agricultural land. It is fundamental that
before any land may be declassified from
the forest group and converted into
alienable or disposable land for
agricultural or other purposes, there
must be a positive act from the
government. A person cannot enter into
forest land and by the simple act of
cultivating a portion of that land, earn
credits
towards
an
eventual
confirmation of imperfect title. The
Government must first declare the forest
land to be alienable and disposable
agricultural land before the year of
entry, cultivation and exclusive and
adverse possession can be counted for
purposes of an imperfect title.[29]
Moreover, during the hearing of
petitioners' application, the Republic
presented a Report[30] of Rene Gomez,
Land Investigator/Inspector, CENRO
No. V-2-3, which disclosed that the lots
applied for by the petitioners were
classified as alienable and disposable
under Project No. 9-E, L.C. Map No.
3393 and released and certified as such
only
on
October
30,
1986. A Compliance[31] dated
January
19, 1999 submitted by OIC-CENR
Officer Joaquin Ed A. Guerrero to the
trial court also stated that Lots. 2199
and 2200 of Cad. 291 were verified to be
within Alienable and Disposable area
under Project No. 9-E, L.C. Map No.
3393, as certified on October 30, 1986

by
the
then
Bureau
of
Forestry. Evidently,
therefore, the
subject lots were declared alienable and
disposable only on October 30,
1986. Prior to that period, the same
could not be the subject of confirmation
of imperfect title. Petitioners possession
of the subject forest land prior to the
date when it was classified as alienable
and disposable is inconsequential and
should
be
excluded
from
the
computation of the period of possession.
[32]
To reiterate, it is well settled that
possession of forest land, prior to its
classification as alienable and disposable
land, is ineffective since such possession
may not be considered as possession in
the concept of owner.[33]The adverse
possession which can be the basis of a
grant of title in confirmation of
imperfect title cases cannot commence
until after forest land has been declared
and alienable.[34]
Much as this Court wants to conform to
the States policy of encouraging and
promoting the distribution of alienable
public lands to spur economic growth
and remain true to the ideal of social
justice, our hands are tied by the laws
stringent safeguards against registering
imperfect titles.[35] Here, petitioners
failed
to
present
well-nigh
incontrovertible evidence necessary to
prove
their
compliance
of
the
requirements under Section 48(b) of
C.A. No. 141. Hence, the Court of
Appeals did not err in dismissing their
application for confirmation and
registration of title.
WHEREFORE,
the
petition
is
hereby DENIED. The Decision dated
August 26, 2005 and the Resolution
dated February 13, 2006 of the Court of
Appeals in CA-G.R. CV No. 67430 are
hereby AFFIRMED.
With costs against the petitioners.
SO ORDERED.

G.R. No. 133250

July 9, 2002
FRANCISCO I. CHAVEZ, petitioner,
vs.
PUBLIC ESTATES AUTHORITY
and
AMARI
COASTAL
BAY
DEVELOPMENT
CORPORATION, respondents.
CARPIO, J.:
This is an original Petition for
Mandamus with prayer for a writ of
preliminary injunction and a temporary
restraining order. The petition seeks to
compel the Public Estates Authority
("PEA" for brevity) to disclose all facts
on PEA's then on-going renegotiations
with
Amari
Coastal
Bay
and
Development Corporation ("AMARI" for
brevity) to reclaim portions of Manila
Bay. The petition further seeks to enjoin
PEA from signing a new agreement with
AMARI involving such reclamation.
The Facts
On November 20, 1973, the government,
through the Commissioner of Public
Highways, signed a contract with the
Construction
and
Development
Corporation of the Philippines ("CDCP"
for brevity) to reclaim certain foreshore
and offshore areas of Manila Bay. The
contract also included the construction
of Phases I and II of the Manila-Cavite
Coastal Road. CDCP obligated itself to
carry out all the works in consideration
of fifty percent of the total reclaimed
land.
On February 4, 1977, then President
Ferdinand E. Marcos issued Presidential
Decree No. 1084 creating PEA. PD No.
1084 tasked PEA "to reclaim land,
including foreshore and submerged
areas," and "to develop, improve,
acquire, x x x lease and sell any and all
kinds of lands."1 On the same date, then
President Marcos issued Presidential
Decree No. 1085 transferring to PEA the
"lands reclaimed in the foreshore and

offshore of the Manila Bay"2 under the

Manila-Cavite
Coastal
Road
and
Reclamation Project (MCCRRP).
On December 29, 1981, then President
Marcos issued a memorandum directing
PEA to amend its contract with CDCP,
so that "[A]ll future works in MCCRRP x
x x shall be funded and owned by PEA."
Accordingly, PEA and CDCP executed a
Memorandum of Agreement dated
December 29, 1981, which stated:
"(i)
CDCP
shall
undertake
all
reclamation, construction, and such
other works in the MCCRRP as may be
agreed upon by the parties, to be paid
according to progress of works on a unit
price/lump sum basis for items of work
to be agreed upon, subject to price
escalation, retention and other terms
and conditions provided for in
Presidential Decree No. 1594. All the
financing required for such works shall
be provided by PEA.
xxx
(iii) x x x CDCP shall give up all its
development rights and hereby agrees to
cede and transfer in favor of PEA, all of
the
rights,
title,
interest
and
participation of CDCP in and to all the
areas of land reclaimed by CDCP in the
MCCRRP as of December 30, 1981
which have not yet been sold,
transferred or otherwise disposed of by
CDCP as of said date, which areas
consist of approximately Ninety-Nine
Thousand Four Hundred Seventy Three
(99,473) square meters in the Financial
Center Area covered by land pledge No.
5 and approximately Three Million
Three Hundred Eighty Two Thousand
Eight Hundred Eighty Eight (3,382,888)
square meters of reclaimed areas at
varying elevations above Mean Low
Water Level located outside the
Financial Center Area and the First
Neighborhood Unit."3

On January 19, 1988, then President

Corazon C. Aquino issued Special Patent
No. 3517, granting and transferring to
PEA "the parcels of land so reclaimed
under the Manila-Cavite Coastal Road
and Reclamation Project (MCCRRP)
containing a total area of one million
nine hundred fifteen thousand eight
hundred ninety four (1,915,894) square
meters." Subsequently, on April 9, 1988,
the Register of Deeds of the
Municipality of Paraaque issued
Transfer Certificates of Title Nos. 7309,
7311, and 7312, in the name of PEA,
covering the three reclaimed islands
known as the "Freedom Islands" located
at the southern portion of the ManilaCavite Coastal Road, Paraaque City.
The Freedom Islands have a total land
area of One Million Five Hundred
Seventy Eight Thousand Four Hundred
and Forty One (1,578,441) square meters
or 157.841 hectares.
On April 25, 1995, PEA entered into a
Joint Venture Agreement ("JVA" for
brevity) with AMARI, a private
corporation, to develop the Freedom
Islands. The JVA also required the
reclamation of an additional 250
hectares
of
submerged
areas
surrounding these islands to complete
the configuration in the Master
Development Plan of the Southern
Reclamation Project-MCCRRP. PEA and
AMARI entered into the JVA through
negotiation without public bidding.4 On
April 28, 1995, the Board of Directors of
PEA, in its Resolution No. 1245,
confirmed the JVA.5On June 8, 1995,
then President Fidel V. Ramos, through
then Executive Secretary Ruben Torres,
approved the JVA.6
On November 29, 1996, then Senate
President Ernesto Maceda delivered a
privilege speech in the Senate and
denounced the JVA as the "grandmother
of all scams." As a result, the Senate

Committee
on
Government
Corporations and Public Enterprises,
and the Committee on Accountability of
Public Officers and Investigations,
conducted a joint investigation. The
Senate Committees reported the results
of their investigation in Senate
Committee Report No. 560 dated
September 16, 1997.7 Among the
conclusions of their report are: (1) the
reclaimed lands PEA seeks to transfer to
AMARI under the JVA are lands of the
public domain which the government
has not classified as alienable lands and
therefore PEA cannot alienate these
lands; (2) the certificates of title
covering the Freedom Islands are thus
void, and (3) the JVA itself is illegal.
On December 5, 1997, then President
Fidel V. Ramos issued Presidential
Administrative Order No. 365 creating a
Legal Task Force to conduct a study on
the legality of the JVA in view of Senate
Committee Report No. 560. The
members of the Legal Task Force were
the Secretary of Justice,8 the Chief
Presidential Legal Counsel,9 and the
Government Corporate Counsel.10 The
Legal Task Force upheld the legality of
the JVA, contrary to the conclusions
reached by the Senate Committees.11
On April 4 and 5, 1998, the Philippine
Daily
Inquirer and Today published
reports that there were on-going
renegotiations between PEA and AMARI
under an order issued by then President
Fidel V. Ramos. According to these
reports, PEA Director Nestor Kalaw,
PEA Chairman Arsenio Yulo and retired
Navy Officer Sergio Cruz composed the
negotiating panel of PEA.
On April 13, 1998, Antonio M. Zulueta
filed before the Court a Petition for
Prohibition with Application for the
Issuance of a Temporary Restraining
Order
and
Preliminary
Injunction docketed as G.R. No. 132994

seeking to nullify the JVA. The Court

dismissed the petition "for unwarranted
disregard of judicial hierarchy, without
prejudice to the refiling of the case
before the proper court."12
On April 27, 1998, petitioner Frank I.
Chavez ("Petitioner" for brevity) as a
taxpayer, filed the instant Petition for
Mandamus with Prayer for the
Issuance of a Writ of Preliminary
Injunction and Temporary Restraining
Order.
Petitioner
contends
the
government stands to lose billions of
pesos in the sale by PEA of the
reclaimed lands to AMARI. Petitioner
prays that PEA publicly disclose the
terms of any renegotiation of the JVA,
invoking Section 28, Article II, and
Section 7, Article III, of the 1987
Constitution on the right of the people to
information on matters of public
concern. Petitioner assails the sale to
AMARI of lands of the public domain as
a blatant violation of Section 3, Article
XII of the 1987 Constitution prohibiting
the sale of alienable lands of the public
domain to private corporations. Finally,
petitioner asserts that he seeks to enjoin
the loss of billions of pesos in properties
of the State that are of public dominion.
After several motions for extension of
time,13 PEA and AMARI filed their
Comments on October 19, 1998 and
June 25, 1998, respectively. Meanwhile,
on December 28, 1998, petitioner filed
an Omnibus Motion: (a) to require PEA
to submit the terms of the renegotiated
PEA-AMARI contract; (b) for issuance
of a temporary restraining order; and (c)
to set the case for hearing on oral
argument. Petitioner filed a Reiterative
Motion for Issuance of a TRO dated May
26, 1999, which the Court denied in a
Resolution dated June 22, 1999.
In a Resolution dated March 23, 1999,
the Court gave due course to the petition

and required the parties to file their

respective memoranda.
On March 30, 1999, PEA and AMARI
signed the Amended Joint Venture
Agreement ("Amended JVA," for
brevity). On May 28, 1999, the Office of
the President under the administration
of then President Joseph E. Estrada
approved the Amended JVA.
Due to the approval of the Amended
JVA by the Office of the President,
petitioner
now
prays
that
on
"constitutional and statutory grounds
the renegotiated contract be declared
null and void."14
The Issues
The issues raised by petitioner,
PEA15 and AMARI16 are as follows:
I.
WHETHER
THE
PRINCIPAL
RELIEFS PRAYED FOR IN THE
PETITION
ARE
MOOT
AND
ACADEMIC
BECAUSE
OF
SUBSEQUENT EVENTS;
II. WHETHER THE PETITION MERITS
DISMISSAL
FOR
FAILING
TO
OBSERVE
THE
PRINCIPLE
GOVERNING THE HIERARCHY OF
COURTS;
III. WHETHER THE PETITION
MERITS DISMISSAL FOR NONEXHAUSTION OF ADMINISTRATIVE
REMEDIES;
IV.
WHETHER
PETITIONER
HAS LOCUS STANDI TO BRING THIS
SUIT;
V. WHETHER THE CONSTITUTIONAL
RIGHT TO INFORMATION INCLUDES
OFFICIAL INFORMATION ON ONGOING NEGOTIATIONS BEFORE A
FINAL AGREEMENT;
VI. WHETHER THE STIPULATIONS
IN THE AMENDED JOINT VENTURE
AGREEMENT FOR THE TRANSFER
TO AMARI OF CERTAIN LANDS,
RECLAIMED AND STILL TO BE
RECLAIMED, VIOLATE THE 1987
CONSTITUTION; AND

VII. WHETHER THE COURT IS THE

PROPER FORUM FOR RAISING THE
ISSUE OF WHETHER THE AMENDED
JOINT VENTURE AGREEMENT IS
GROSSLY DISADVANTAGEOUS TO
THE GOVERNMENT.
The Court's Ruling
First issue: whether the principal
reliefs prayed for in the petition
are moot and academic because of
subsequent events.
The petition prays that PEA publicly
disclose the "terms and conditions of the
on-going negotiations for a new
agreement." The petition also prays that
the Court enjoin PEA from "privately
entering
into,
perfecting
and/or
executing any new agreement with
AMARI."
PEA and AMARI claim the petition is
now moot and academic because
AMARI furnished petitioner on June 21,
1999 a copy of the signed Amended JVA
containing the terms and conditions
agreed upon in the renegotiations. Thus,
PEA has satisfied petitioner's prayer for
a public disclosure of the renegotiations.
Likewise, petitioner's prayer to enjoin
the signing of the Amended JVA is now
moot because PEA and AMARI have
already signed the Amended JVA on
March 30, 1999. Moreover, the Office of
the President has approved the
Amended JVA on May 28, 1999.
Petitioner counters that PEA and
AMARI cannot avoid the constitutional
issue by simply fast-tracking the signing
and approval of the Amended JVA
before the Court could act on the issue.
Presidential approval does not resolve
the constitutional issue or remove it
from the ambit of judicial review.
We rule that the signing of the Amended
JVA by PEA and AMARI and its
approval by the President cannot
operate to moot the petition and divest
the Court of its jurisdiction. PEA and

AMARI have still to implement the

Amended JVA. The prayer to enjoin the
signing of the Amended JVA on
constitutional
grounds
necessarily
includes preventing its implementation
if in the meantime PEA and AMARI
have signed one in violation of the
Constitution. Petitioner's principal basis
in assailing the renegotiation of the JVA
is its violation of Section 3, Article XII of
the Constitution, which prohibits the
government from alienating lands of the
public domain to private corporations. If
the Amended JVA indeed violates the
Constitution, it is the duty of the Court
to enjoin its implementation, and if
already implemented, to annul the
effects of such unconstitutional contract.
The Amended JVA is not an ordinary
commercial contract but one which
seeks
to transfer
title
and
ownership to 367.5 hectares of
reclaimed lands and submerged
areas of Manila Bay to a single
private corporation. It now becomes
more compelling for the Court to resolve
the issue to insure the government itself
does not violate a provision of the
Constitution intended to safeguard the
national patrimony. Supervening events,
whether intended or accidental, cannot
prevent the Court from rendering a
decision if there is a grave violation of
the Constitution. In the instant case, if
the Amended JVA runs counter to the
Constitution, the Court can still prevent
the transfer of title and ownership of
alienable lands of the public domain in
the name of AMARI. Even in cases
where supervening events had made the
cases moot, the Court did not hesitate to
resolve the legal or constitutional issues
raised
to
formulate
controlling
principles to guide the bench, bar, and
the public.17
Also, the instant petition is a case of first
impression. All previous decisions of the

Court involving Section 3, Article XII of

the 1987 Constitution, or its counterpart
provision
in
the
1973
Constitution,18 covered agricultural
landssold to private corporations which
acquired the lands from private parties.
The
transferors
of
the
private
corporations claimed or could claim the
right to judicial confirmation of
their imperfect titles19 under Title
II of Commonwealth Act. 141 ("CA No.
141" for brevity). In the instant case,
AMARI seeks to acquire from PEA, a
public corporation, reclaimed lands and
submerged
areas
for nonagricultural purposes
by purchase under PD No. 1084
(charter of PEA) and Title III of CA No.
141. Certain undertakings by AMARI
under the Amended JVA constitute the
consideration for the purchase. Neither
AMARI nor PEA can claim judicial
confirmation of their titles because the
lands covered by the Amended JVA are
newly reclaimed or still to be reclaimed.
Judicial confirmation of imperfect title
requires open, continuous, exclusive and
notorious occupation of agricultural
lands of the public domain for at least
thirty years since June 12, 1945 or
earlier. Besides, the deadline for filing
applications for judicial confirmation of
imperfect title expired on December 31,
1987.20
Lastly, there is a need to resolve
immediately the constitutional issue
raised in this petition because of the
possible transfer at any time by PEA to
AMARI of title and ownership to
portions of the reclaimed lands. Under
the Amended JVA, PEA is obligated to
transfer to AMARI the latter's seventy
percent proportionate share in the
reclaimed areas as the reclamation
progresses. The Amended JVA even
allows AMARI to mortgage at any time

the entire reclaimed area to raise

financing for the reclamation project.21
Second issue: whether the petition
merits dismissal for failing to
observe the principle governing
the hierarchy of courts.
PEA and AMARI claim petitioner
ignored the judicial hierarchy by seeking
relief directly from the Court. The
principle of hierarchy of courts applies
generally to cases involving factual
questions. As it is not a trier of facts, the
Court cannot entertain cases involving
factual issues. The instant case,
however, raises constitutional issues of
transcendental importance to the
public.22 The Court can resolve this case
without determining any factual issue
related to the case. Also, the instant case
is a petition for mandamus which falls
under the original jurisdiction of the
Court under Section 5, Article VIII of the
Constitution. We resolve to exercise
primary jurisdiction over the instant
case.
Third issue: whether the petition
merits
dismissal
for
nonexhaustion
of
administrative
remedies.
PEA faults petitioner for seeking judicial
intervention in compelling PEA to
disclose publicly certain information
without first asking PEA the needed
information. PEA claims petitioner's
direct resort to the Court violates the
principle of exhaustion of administrative
remedies. It also violates the rule that
mandamus may issue only if there is no
other plain, speedy and adequate
remedy in the ordinary course of law.
PEA distinguishes the instant case from
Taada v. Tuvera23 where the Court
granted the petition for mandamus even
if the petitioners there did not initially
demand from the Office of the President
the publication of the presidential
decrees. PEA points out that in Taada,

the
Executive
Department
had
an affirmative statutory duty under
Article 2 of the Civil Code24 and Section 1
of Commonwealth Act No. 638 25 to
publish the presidential decrees. There
was, therefore, no need for the
petitioners in Taada to make an initial
demand from the Office of the
President. In the instant case, PEA
claims it has no affirmative statutory
duty to disclose publicly information
about its renegotiation of the JVA. Thus,
PEA asserts that the Court must apply
the
principle
of
exhaustion
of
administrative remedies to the instant
case in view of the failure of petitioner
here to demand initially from PEA the
needed information.
The original JVA sought to dispose to
AMARI public lands held by PEA, a
government corporation. Under Section
79 of the Government Auditing
Code,26 the disposition of government
lands to private parties requires public
bidding. PEA was under a positive
legal duty to disclose to the public
the terms and conditions for the
sale of its lands. The law obligated
PEA to make this public disclosure even
without demand from petitioner or from
anyone. PEA failed to make this public
disclosure because the original JVA, like
the Amended JVA, was the result of
a negotiated contract, not of a public
bidding. Considering that PEA had an
affirmative statutory duty to make the
public disclosure, and was even in
breach of this legal duty, petitioner had
the right to seek direct judicial
intervention.
Moreover,
and
this
alone
is
determinative of this issue, the principle
of
exhaustion
of
administrative
remedies does not apply when the issue
involved is a purely legal or
constitutional question.27 The principal
issue in the instant case is the capacity

of AMARI to acquire lands held by PEA

in view of the constitutional ban
prohibiting the alienation of lands of the
public domain to private corporations.
We rule that the principle of exhaustion
of administrative remedies does not
apply in the instant case.
Fourth issue: whether petitioner
has locus standi to bring this suit
PEA argues that petitioner has no
standing
to
institute mandamus proceedings
to
enforce his constitutional right to
information without a showing that PEA
refused to perform an affirmative duty
imposed on PEA by the Constitution.
PEA also claims that petitioner has not
shown that he will suffer any concrete
injury because of the signing or
implementation of the Amended JVA.
Thus, there is no actual controversy
requiring the exercise of the power of
judicial review.
The petitioner has standing to bring this
taxpayer's suit because the petition
seeks to compel PEA to comply with its
constitutional duties. There are two
constitutional issues involved here. First
is the right of citizens to information on
matters of public concern. Second is the
application of a constitutional provision
intended to insure the equitable
distribution of alienable lands of the
public domain among Filipino citizens.
The thrust of the first issue is to compel
PEA to disclose publicly information on
the sale of government lands worth
billions of pesos, information which the
Constitution and statutory law mandate
PEA to disclose. The thrust of the second
issue is to prevent PEA from alienating
hundreds of hectares of alienable lands
of the public domain in violation of the
Constitution, compelling PEA to comply
with a constitutional duty to the nation.
Moreover, the petition raises matters of
transcendental importance to the public.

In Chavez v. PCGG,28 the Court

upheld the right of a citizen to bring a
taxpayer's
suit
on
matters
of
transcendental importance to the public,
thus "Besides, petitioner emphasizes, the
matter of recovering the ill-gotten
wealth of the Marcoses is an issue of
'transcendental importance to the
public.' He asserts that ordinary
taxpayers have a right to initiate and
prosecute actions questioning the
validity of acts or orders of government
agencies or instrumentalities, if the
issues raised are of 'paramount public
interest,' and if they 'immediately affect
the social, economic and moral well
being of the people.'
Moreover, the mere fact that he is a
citizen satisfies the requirement of
personal interest, when the proceeding
involves the assertion of a public right,
such as in this case. He invokes several
decisions of this Court which have set
aside the procedural matter of locus
standi, when the subject of the case
involved public interest.
xxx
In Taada v. Tuvera, the Court asserted
that when the issue concerns a public
right and the object of mandamus is to
obtain the enforcement of a public duty,
the people are regarded as the real
parties in interest; and because it is
sufficient that petitioner is a citizen and
as such is interested in the execution of
the laws, he need not show that he has
any legal or special interest in the result
of the action. In the aforesaid case, the
petitioners sought to enforce their right
to be informed on matters of public
concern, a right then recognized in
Section 6, Article IV of the 1973
Constitution, in connection with the rule
that laws in order to be valid and
enforceable must be published in the
Official Gazette or otherwise effectively

promulgated. In ruling for the

petitioners' legal standing, the Court
declared that the right they sought to be
enforced 'is a public right recognized by
no less than the fundamental law of the
land.'
Legaspi v. Civil Service Commission,
while reiterating Taada, further
declared that 'when a mandamus
proceeding involves the assertion of a
public right, the requirement of personal
interest is satisfied by the mere fact that
petitioner is a citizen and, therefore,
part of the general 'public' which
possesses the right.'
Further, in Albano v. Reyes, we said that
while expenditure of public funds may
not have been involved under the
questioned
contract
for
the
development,
management
and
operation of the Manila International
Container Terminal, 'public interest
[was] definitely involved considering the
important
role [of
the subject
contract] . . . in the economic
development of the country and the
magnitude of the financial consideration
involved.' We concluded that, as a
consequence, the disclosure provision in
the Constitution would constitute
sufficient authority for upholding the
petitioner's standing.
Similarly, the instant petition is
anchored on the right of the people to
information and access to official
records, documents and papers a
right guaranteed under Section 7, Article
III of the 1987 Constitution. Petitioner, a
former solicitor general, is a Filipino
citizen. Because of the satisfaction of the
two basic requisites laid down by
decisional law to sustain petitioner's
legal standing, i.e. (1) the enforcement of
a public right (2) espoused by a Filipino
citizen, we rule that the petition at bar
should be allowed."

We rule that since the instant petition,

brought by a citizen, involves the
enforcement of constitutional rights - to
information and to the equitable
diffusion of natural resources - matters
of transcendental public importance, the
petitioner has the requisite locus standi.
Fifth
issue:
whether
the
constitutional
right
to
information
includes
official
information
on
on-going
negotiations
before
a
final
agreement.
Section 7, Article III of the Constitution
explains
the
people's
right
to
information on matters of public
concern in this manner:
"Sec. 7. The right of the people to
information on matters of public
concern shall be recognized. Access to
official
records,
and
to
documents,
and
papers
pertaining
to
official
acts,
transactions, or decisions, as well
as to government research data used as
basis for policy development, shall be
afforded the citizen, subject to such
limitations as may be provided by law."
(Emphasis supplied)
The State policy of full transparency in
all transactions involving public interest
reinforces the people's right to
information on matters of public
concern. This State policy is expressed
in Section 28, Article II of the
Constitution, thus:
"Sec. 28. Subject to reasonable
conditions prescribed by law, the State
adopts and implements a policy of full
public disclosure of all its
transactions
involving
public
interest." (Emphasis supplied)
These
twin
provisions
of
the
Constitution
seek
to
promote
transparency in policy-making and in
the operations of the government, as
well as provide the people sufficient

information to exercise effectively other

constitutional rights. These twin
provisions are essential to the exercise of
freedom
of
expression.
If
the
government does not disclose its official
acts, transactions and decisions to
citizens, whatever citizens say, even if
expressed without any restraint, will be
speculative and amount to nothing.
These twin provisions are also essential
to hold public officials "at all times x x x
accountable to the people,"29 for unless
citizens have the proper information,
they cannot hold public officials
accountable for anything. Armed with
the right information, citizens can
participate in public discussions leading
to the formulation of government
policies
and
their
effective
implementation. An informed citizenry
is essential to the existence and proper
functioning of any democracy. As
explained by the Court in Valmonte v.
Belmonte, Jr.30
"An essential element of these freedoms
is to keep open a continuing dialogue or
process of communication between the
government and the people. It is in the
interest of the State that the channels for
free political discussion be maintained
to the end that the government may
perceive and be responsive to the
people's will. Yet, this open dialogue can
be effective only to the extent that the
citizenry is informed and thus able to
formulate its will intelligently. Only
when the participants in the discussion
are aware of the issues and have access
to information relating thereto can such
bear fruit."
PEA
asserts,
citing Chavez
v.
PCGG,31 that in cases of on-going
negotiations the right to information is
limited to "definite propositions of the
government." PEA maintains the right
does not include access to "intra-agency
or inter-agency recommendations or

communications during the stage when

common assertions are still in the
process of being formulated or are in the
'exploratory stage'."
Also, AMARI contends that petitioner
cannot invoke the right at the predecisional stage or before the closing of
the transaction. To support its
contention, AMARI cites the following
discussion in the 1986 Constitutional
Commission:
"Mr. Suarez. And when we say
'transactions'
which
should
be
distinguished
from
contracts,
agreements, or treaties or whatever,
does the Gentleman refer to the steps
leading to the consummation of the
contract, or does he refer to the contract
itself?
Mr. Ople: The 'transactions' used
here, I suppose is generic and
therefore, it can cover both steps
leading to a contract and already
a consummated contract, Mr.
Presiding Officer.
Mr. Suarez: This contemplates
inclusion of negotiations leading
to the consummation of the
transaction.
Mr. Ople: Yes, subject only to
reasonable safeguards on the
national interest.
Mr. Suarez: Thank you."32 (Emphasis
supplied)
AMARI argues there must first be a
consummated contract before petitioner
can invoke the right. Requiring
government officials to reveal their
deliberations at the pre-decisional stage
will degrade the quality of decisionmaking in government agencies.
Government officials will hesitate to
express their real sentiments during
deliberations if there is immediate
public
dissemination
of
their
discussions, putting them under all
kinds of pressure before they decide.

We must first distinguish between

information the law on public bidding
requires PEA to disclose publicly, and
information the constitutional right to
information requires PEA to release to
the public. Before the consummation of
the contract, PEA must, on its own and
without demand from anyone, disclose
to the public matters relating to the
disposition of its property. These include
the size, location, technical description
and nature of the property being
disposed of, the terms and conditions of
the disposition, the parties qualified to
bid, the minimum price and similar
information. PEA must prepare all these
data and disclose them to the public at
the start of the disposition process, long
before the consummation of the
contract, because the Government
Auditing
Code
requires public
bidding. If PEA fails to make this
disclosure, any citizen can demand from
PEA this information at any time during
the bidding process.
Information, however, on on-going
evaluation or review of bids or
proposals being undertaken by the
bidding or review committee is not
immediately accessible under the right
to information. While the evaluation or
review is still on-going, there are no
"official acts, transactions, or decisions"
on the bids or proposals. However, once
the committee makes its official
recommendation,
there
arises
a "definite proposition" on the part
of the government. From this moment,
the public's right to information
attaches, and any citizen can access all
the non-proprietary information leading
to such definite proposition. In Chavez
v. PCGG,33 the Court ruled as follows:
"Considering the intent of the framers of
the Constitution, we believe that it is
incumbent upon the PCGG and its
officers, as well as other government

representatives, to disclose sufficient

public information on any proposed
settlement they have decided to take up
with the ostensible owners and holders
of ill-gotten wealth. Such information,
though, must pertain to definite
propositions of the government,
not necessarily to intra-agency or interagency
recommendations
or
communications during the stage when
common assertions are still in the
process of being formulated or are in the
"exploratory" stage. There is need, of
course, to observe the same restrictions
on disclosure of information in general,
as discussed earlier such as on matters
involving national security, diplomatic
or foreign relations, intelligence and
other classified information." (Emphasis
supplied)
Contrary to AMARI's contention, the
commissioners
of
the
1986
Constitutional Commission understood
that
the
right
to
information "contemplates
inclusion of negotiations leading
to the consummation of the
transaction." Certainly,
a
consummated contract is not a
requirement for the exercise of the right
to information. Otherwise, the people
can never exercise the right if no
contract is consummated, and if one is
consummated, it may be too late for the
public to expose its defects.1wphi1.nt
Requiring a consummated contract will
keep the public in the dark until the
contract, which may be grossly
disadvantageous to the government or
even illegal, becomes a fait accompli.
This negates the State policy of full
transparency on matters of public
concern, a situation which the framers
of the Constitution could not have
intended. Such a requirement will
prevent the citizenry from participating
in
the
public
discussion
of

any proposedcontract,
effectively
truncating a basic right enshrined in the
Bill of Rights. We can allow neither an
emasculation of a constitutional right,
nor a retreat by the State of its avowed
"policy of full disclosure of all its
transactions involving public interest."
The right covers three categories of
information which are "matters of public
concern," namely: (1) official records;
(2) documents and papers pertaining to
official acts, transactions and decisions;
and (3) government research data used
in formulating policies. The first
category refers to any document that is
part of the public records in the custody
of government agencies or officials. The
second category refers to documents and
papers
recording,
evidencing,
establishing, confirming, supporting,
justifying or explaining official acts,
transactions or decisions of government
agencies or officials. The third category
refers to research data, whether raw,
collated or processed, owned by the
government and used in formulating
government policies.
The information that petitioner may
access on the renegotiation of the JVA
includes
evaluation
reports,
recommendations, legal and expert
opinions, minutes of meetings, terms of
reference and other documents attached
to such reports or minutes, all relating
to the JVA. However, the right to
information does not compel PEA to
prepare lists, abstracts, summaries and
the like relating to the renegotiation of
the JVA.34 The right only affords access
to records, documents and papers,
which means the opportunity to inspect
and copy them. One who exercises the
right must copy the records, documents
and papers at his expense. The exercise
of the right is also subject to reasonable
regulations to protect the integrity of the
public records and to minimize

disruption to government operations,

like rules specifying when and how to
conduct the inspection and copying.35
The right to information, however, does
not extend to matters recognized as
privileged information under the
separation of powers.36 The right does
not also apply to information on military
and diplomatic secrets, information
affecting
national
security,
and
information on investigations of crimes
by law enforcement agencies before the
prosecution of the accused, which courts
have
long
recognized
as
confidential.37 The right may also be
subject to other limitations that
Congress may impose by law.
There is no claim by PEA that the
information demanded by petitioner is
privileged information rooted in the
separation of powers. The information
does
not
cover
Presidential
conversations, correspondences, or
discussions during closed-door Cabinet
meetings
which,
like
internal
deliberations of the Supreme Court and
other collegiate courts, or executive
sessions
of
either
house
of
38
Congress, are
recognized
as
confidential. This kind of information
cannot be pried open by a co-equal
branch of government. A frank exchange
of exploratory ideas and assessments,
free from the glare of publicity and
pressure by interested parties, is
essential to protect the independence of
decision-making of those tasked to
exercise Presidential, Legislative and
Judicial power.39This is not the situation
in the instant case.
We
rule,
therefore,
that
the
constitutional right to information
includes official information on ongoing negotiations before a final
contract. The information, however,
must constitute definite propositions by
the government and should not cover

recognized exceptions like privileged

information, military and diplomatic
secrets and similar matters affecting
national
security
and
public
order.40 Congress has also prescribed
other limitations on the right to
information in several legislations.41
Sixth issue: whether stipulations
in the Amended JVA for the
transfer to AMARI of lands,
reclaimed or to be reclaimed,
violate the Constitution.
The Regalian Doctrine
The ownership of lands reclaimed from
foreshore and submerged areas is rooted
in the Regalian doctrine which holds
that the State owns all lands and waters
of the public domain. Upon the Spanish
conquest of the Philippines, ownership
of all "lands, territories and possessions"
in the Philippines passed to the Spanish
Crown.42The King, as the sovereign ruler
and representative of the people,
acquired and owned all lands and
territories in the Philippines except
those he disposed of by grant or sale to
private individuals.
The 1935, 1973 and 1987 Constitutions
adopted
the
Regalian
doctrine
substituting, however, the State, in lieu
of the King, as the owner of all lands and
waters of the public domain. The
Regalian doctrine is the foundation of
the time-honored principle of land
ownership that "all lands that were not
acquired from the Government, either
by purchase or by grant, belong to the
public domain."43 Article 339 of the Civil
Code of 1889, which is now Article 420
of the Civil Code of 1950, incorporated
the Regalian doctrine.
Ownership and Disposition of
Reclaimed Lands
The Spanish Law of Waters of 1866 was
the first statutory law governing the
ownership and disposition of reclaimed
lands in the Philippines. On May 18,

1907, the Philippine Commission

enacted
Act
No.
1654
which
provided for the lease, but not the
sale, of reclaimed lands of the
government to corporations and
individuals. Later, on November 29,
1919,
the
Philippine
Legislature
approved Act No. 2874, the Public Land
Act, which authorized the lease, but
not the sale, of reclaimed lands of
the government to corporations
and individuals. On November 7,
1936, the National Assembly passed
Commonwealth Act No. 141, also known
as
the
Public
Land
Act,
which authorized the lease, but not
the sale, of reclaimed lands of the
government to corporations and
individuals. CA No. 141 continues to
this day as the general law governing the
classification and disposition of lands of
the public domain.
The Spanish Law of Waters of
1866 and the Civil Code of 1889
Under the Spanish Law of Waters of
1866, the shores, bays, coves, inlets and
all waters within the maritime zone of
the Spanish territory belonged to the
public domain for public use.44 The
Spanish Law of Waters of 1866 allowed
the reclamation of the sea under Article
5, which provided as follows:
"Article 5. Lands reclaimed from the sea
in consequence of works constructed by
the State, or by the provinces, pueblos or
private persons, with proper permission,
shall become the property of the party
constructing
such
works,
unless
otherwise provided by the terms of the
grant of authority."
Under the Spanish Law of Waters, land
reclaimed from the sea belonged to the
party undertaking the reclamation,
provided the government issued the
necessary permit and did not reserve
ownership of the reclaimed land to the
State.

Article 339 of the Civil Code of 1889

defined property of public dominion as
follows:
"Art. 339. Property of public dominion is

1. That devoted to public use, such as

roads, canals, rivers, torrents, ports and
bridges constructed by the State,
riverbanks, shores, roadsteads, and that
of a similar character;
2. That belonging exclusively to the
State which, without being of general
public use, is employed in some public
service, or in the development of the
national wealth, such as walls,
fortresses, and other works for the
defense of the territory, and mines, until
granted to private individuals."
Property devoted to public use referred
to property open for use by the public.
In contrast, property devoted to public
service referred to property used for
some specific public service and open
only to those authorized to use the
property.
Property of public dominion referred
not only to property devoted to public
use, but also to property not so used but
employed to develop the national
wealth. This class of property
constituted property of public dominion
although employed for some economic
or commercial activity to increase the
national wealth.
Article 341 of the Civil Code of 1889
governed
the
re-classification
of
property of public dominion into private
property, to wit:
"Art. 341. Property of public dominion,
when no longer devoted to public use or
to the defense of the territory, shall
become a part of the private property of
the State."
This provision, however, was not selfexecuting. The legislature, or the
executive department pursuant to law,
must declare the property no longer

needed for public use or territorial

defense before the government could
lease or alienate the property to private
parties.45
Act No. 1654 of the Philippine
Commission
On May 8, 1907, the Philippine
Commission enacted Act No. 1654 which
regulated the lease of reclaimed and
foreshore lands. The salient provisions
of this law were as follows:
"Section
1.
The control
and
disposition of the foreshore as
defined in existing law, and the title to
all Government or public lands
made or reclaimed by the
Government by dredging or
filling or otherwise throughout the
Philippine Islands, shall be retained
by
the
Government without
prejudice to vested rights and without
prejudice to rights conceded to the City
of Manila in the Luneta Extension.
Section 2. (a) The Secretary of the
Interior shall cause all Government or
public lands made or reclaimed by the
Government by dredging or filling or
otherwise to be divided into lots or
blocks, with the necessary streets and
alleyways located thereon, and shall
cause plats and plans of such surveys to
be prepared and filed with the Bureau of
Lands.
(b) Upon completion of such plats and
plans the Governor-General shall
give notice to the public that such
parts of the lands so made or
reclaimed as are not needed for
public purposes will be leased for
commercial
and
business
purposes, x x x.
xxx
(e) The leases above provided for
shall be disposed of to the highest
and best bidder therefore, subject to
such regulations and safeguards as the

Governor-General may by executive

order prescribe." (Emphasis supplied)
Act
No.
1654
mandated
that
the government should retain title
to all lands reclaimed by the
government. The Act also vested in
the government control and disposition
of foreshore lands. Private parties could
lease lands reclaimed by the government
only if these lands were no longer
needed for public purpose. Act No. 1654
mandated public bidding in the lease
of government reclaimed lands. Act No.
1654 made government reclaimed
lands sui generis in that unlike other
public lands which the government
could sell to private parties, these
reclaimed lands were available only for
lease to private parties.
Act No. 1654, however, did not repeal
Section 5 of the Spanish Law of Waters
of 1866. Act No. 1654 did not prohibit
private parties from reclaiming parts of
the sea under Section 5 of the Spanish
Law of Waters. Lands reclaimed from
the sea by private parties with
government
permission
remained
private lands.
Act No. 2874 of the Philippine
Legislature
On November 29, 1919, the Philippine
Legislature enacted Act No. 2874, the
Public Land Act.46 The salient provisions
of Act No. 2874, on reclaimed lands,
were as follows:
"Sec. 6. The Governor-General,
upon the recommendation of the
Secretary of Agriculture and
Natural Resources, shall from
time to time classify the lands of
the public domain into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands, x x x.
Sec. 7. For the purposes of the
government and disposition of alienable
or
disposable
public
lands, the

Governor-General,
upon
recommendation by the Secretary
of
Agriculture
and
Natural
Resources, shall from time to time
declare what lands are open to
disposition or concession under
this Act."
Sec. 8. Only those lands shall be
declared open to disposition or
concession which have been
officially delimited or classified x x
x.
xxx
Sec. 55. Any tract of land of the public
domain which, being neither timber nor
mineral land, shall be classified
as suitable
for
residential
purposes or for commercial,
industrial, or other productive
purposes other than agricultural
purposes, and shall be open to
disposition or concession, shall be
disposed of under the provisions of this
chapter, and not otherwise.
Sec. 56. The lands disposable under
this title shall be classified as
follows:
(a) Lands reclaimed by the
Government by dredging, filling,
or other means;
(b) Foreshore;
(c) Marshy lands or lands covered
with water bordering upon the shores or
banks of navigable lakes or rivers;
(d) Lands not included in any of the
foregoing classes.
x x x.
Sec. 58. The lands comprised in
classes (a), (b), and (c) of section
fifty-six shall be disposed of to
private parties by lease only and
not otherwise, as soon as the
Governor-General,
upon
recommendation by the Secretary
of
Agriculture
and
Natural
Resources, shall declare that the
same are not necessary for the

public service and are open to

disposition under this chapter. The
lands included in class (d) may be
disposed of by sale or lease under
the provisions of this Act."
(Emphasis supplied)
Section 6 of Act No. 2874 authorized the
Governor-General to "classify lands of
the public domain into x x x alienable or
disposable"47 lands. Section 7 of the Act
empowered the Governor-General to
"declare what lands are open to
disposition or concession." Section 8 of
the Act limited alienable or disposable
lands only to those lands which have
been "officially delimited and classified."
Section 56 of Act No. 2874 stated that
lands "disposable under this title48 shall
be classified" as government reclaimed,
foreshore and marshy lands, as well as
other lands. All these lands, however,
must be suitable for residential,
commercial,
industrial
or
other
productive non-agricultural purpose
s. These provisions vested upon the
Governor-General the power to classify
inalienable lands of the public domain
into disposable lands of the public
domain.
These
provisions
also
empowered the Governor-General to
classify further such disposable lands of
the public domain into government
reclaimed, foreshore or marshy lands of
the public domain, as well as other nonagricultural lands.
Section 58 of Act No. 2874 categorically
mandated that disposable lands of the
public domain classified as government
reclaimed, foreshore and marshy
lands "shall be disposed of to
private parties by lease only and
not
otherwise." The
GovernorGeneral, before allowing the lease of
these lands to private parties, must
formally declare that the lands were "not
necessary for the public service." Act No.
2874 reiterated the State policy to lease

and not to sell government reclaimed,

foreshore and marshy lands of the
public domain, a policy first enunciated
in 1907 in Act No. 1654. Government
reclaimed, foreshore and marshy lands
remained sui generis, as the only
alienable or disposable lands of the
public domain that the government
could not sell to private parties.
The rationale behind this State policy is
obvious.
Government
reclaimed,
foreshore and marshy public lands for
non-agricultural purposes retain their
inherent potential as areas for public
service. This is the reason the
government prohibited the sale, and
only allowed the lease, of these lands to
private parties. The State always
reserved these lands for some future
public service.
Act No. 2874 did not authorize the
reclassification
of
government
reclaimed, foreshore and marshy lands
into other non-agricultural lands under
Section 56 (d). Lands falling under
Section 56 (d) were the only lands for
non-agricultural
purposes
the
government could sell to private parties.
Thus, under Act No. 2874, the
government could not sell government
reclaimed, foreshore and marshy lands
to private parties, unless the
legislature passed a law allowing
their sale.49
Act No. 2874 did not prohibit private
parties from reclaiming parts of the sea
pursuant to Section 5 of the Spanish
Law of Waters of 1866. Lands reclaimed
from the sea by private parties with
government
permission
remained
private lands.
Dispositions under the 1935
Constitution
On May 14, 1935, the 1935 Constitution
took effect upon its ratification by the
Filipino people. The 1935 Constitution,

in adopting the Regalian doctrine,

declared in Section 1, Article XIII, that
"Section 1. All agricultural, timber, and
mineral lands of the public domain,
waters, minerals, coal, petroleum, and
other mineral oils, all forces of potential
energy and other natural resources of
the Philippines belong to the State, and
their
disposition,
exploitation,
development, or utilization shall be
limited to citizens of the Philippines or
to corporations or associations at least
sixty per centum of the capital of which
is owned by such citizens, subject to any
existing right, grant, lease, or concession
at the time of the inauguration of the
Government established under this
Constitution. Natural
resources,
with the exception of public
agricultural land, shall not be
alienated, and no license, concession,
or
lease
for
the
exploitation,
development, or utilization of any of the
natural resources shall be granted for a
period exceeding twenty-five years,
renewable for another twenty-five years,
except as to water rights for irrigation,
water supply, fisheries, or industrial
uses other than the development of
water power, in which cases beneficial
use may be the measure and limit of the
grant." (Emphasis supplied)
The 1935 Constitution barred the
alienation of all natural resources except
public agricultural lands, which were the
only natural resources the State could
alienate.
Thus,
foreshore
lands,
considered part of the State's natural
resources, became inalienable by
constitutional fiat, available only for
lease for 25 years, renewable for another
25 years. The government could alienate
foreshore lands only after these lands
were reclaimed and classified as
alienable agricultural lands of the public
domain. Government reclaimed and
marshy lands of the public domain,

being neither timber nor mineral lands,

fell under the classification of public
agricultural
lands.50 However,
government reclaimed and marshy
lands, although subject to classification
as disposable public agricultural lands,
could only be leased and not sold to
private parties because of Act No. 2874.
The prohibition on private parties from
acquiring ownership of government
reclaimed and marshy lands of the
public domain was only a statutory
prohibition and the legislature could
therefore remove such prohibition. The
1935 Constitution did not prohibit
individuals and corporations from
acquiring government reclaimed and
marshy lands of the public domain that
were classified as agricultural lands
under existing public land laws. Section
2, Article XIII of the 1935 Constitution
provided as follows:
"Section 2. No private corporation
or association may acquire, lease,
or hold public agricultural lands
in excess of one thousand and
twenty four hectares, nor may
any individual acquire such lands
by purchase in excess of one
hundred and forty hectares, or by
lease in excess of one thousand
and twenty-four hectares, or by
homestead in excess of twenty-four
hectares. Lands adapted to grazing, not
exceeding two thousand hectares, may
be leased to an individual, private
corporation, or association." (Emphasis
supplied)
Still, after the effectivity of the 1935
Constitution, the legislature did not
repeal Section 58 of Act No. 2874 to
open for sale to private parties
government reclaimed and marshy
lands of the public domain. On the
contrary, the legislature continued the
long established State policy of retaining
for the government title and ownership

of government reclaimed and marshy

lands of the public domain.
Commonwealth Act No. 141 of the
Philippine National Assembly
On November 7, 1936, the National
Assembly approved Commonwealth Act
No. 141, also known as the Public Land
Act, which compiled the then existing
laws on lands of the public domain. CA
No. 141, as amended, remains to this day
the existing general law governing
the classification and disposition of
lands of the public domain other than
timber and mineral lands.51
Section 6 of CA No. 141 empowers the
President to classify lands of the public
domain
into
"alienable
or
disposable"52 lands of the public domain,
which prior to such classification are
inalienable and outside the commerce of
man. Section 7 of CA No. 141 authorizes
the President to "declare what lands are
open to disposition or concession."
Section 8 of CA No. 141 states that the
government can declare open for
disposition or concession only lands that
are "officially delimited and classified."
Sections 6, 7 and 8 of CA No. 141 read as
follows:
"Sec. 6. The President, upon the
recommendation of the Secretary
of Agriculture and Commerce,
shall from time to time classify
the lands of the public domain
into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands,
and may at any time and in like manner
transfer such lands from one class to
another,53 for the purpose of their
administration and disposition.
Sec. 7. For the purposes of the
administration and disposition of
alienable or disposable public lands, the
President, upon recommendation
by the Secretary of Agriculture

and Commerce, shall from time to

time declare what lands are open
to disposition or concession under
this Act.
Sec. 8. Only those lands shall be
declared open to disposition or
concession which have been
officially
delimited
and
classified and,
when
practicable,
surveyed, and which have not been
reserved for public or quasipublic uses, nor appropriated by the
Government, nor in any manner become
private property, nor those on which a
private right authorized and recognized
by this Act or any other valid law may be
claimed, or which, having been reserved
or appropriated, have ceased to be so. x
x x."
Thus, before the government could
alienate or dispose of lands of the public
domain, the President must first
officially classify these lands as alienable
or disposable, and then declare them
open to disposition or concession. There
must be no law reserving these lands for
public or quasi-public uses.
The salient provisions of CA No. 141, on
government reclaimed, foreshore and
marshy lands of the public domain, are
as follows:
"Sec. 58. Any tract of land of the
public domain which, being
neither timber nor mineral land,
is intended to be used for
residential
purposes
or
for
commercial, industrial, or other
productive purposes other than
agricultural, and is open to
disposition or concession, shall be
disposed of under the provisions
of this chapter and not otherwise.
Sec. 59. The lands disposable under
this title shall be classified as
follows:

(a) Lands reclaimed by the

Government by dredging, filling,
or other means;
(b) Foreshore;
(c) Marshy lands or lands covered
with water bordering upon the shores or
banks of navigable lakes or rivers;
(d) Lands not included in any of the
foregoing classes.
Sec. 60. Any tract of land comprised
under this title may be leased or sold, as
the case may be, to any person,
corporation, or association authorized to
purchase or lease public lands for
agricultural purposes. x x x.
Sec. 61. The lands comprised in
classes (a), (b), and (c) of section
fifty-nine shall be disposed of to
private parties by lease only and
not otherwise, as soon as the
President, upon recommendation by
the Secretary of Agriculture, shall
declare that the same are not
necessary
for
the
public
service and are open to disposition
under
this
chapter. The
lands
included in class (d) may be
disposed of by sale or lease under
the provisions of this Act."
(Emphasis supplied)
Section 61 of CA No. 141 readopted, after
the effectivity of the 1935 Constitution,
Section 58 of Act No. 2874 prohibiting
the sale of government reclaimed,
foreshore and marshy disposable lands
of the public domain. All these lands are
intended for residential, commercial,
industrial or other non-agricultural
purposes. As before, Section 61 allowed
only the lease of such lands to private
parties. The government could sell to
private parties only lands falling under
Section 59 (d) of CA No. 141, or those
lands for non-agricultural purposes not
classified as government reclaimed,
foreshore and marshy disposable lands
of the public domain. Foreshore lands,

however, became inalienable under the

1935 Constitution which only allowed
the lease of these lands to qualified
private parties.
Section 58 of CA No. 141 expressly states
that disposable lands of the public
domain intended for residential,
commercial,
industrial
or
other
productive
purposes
other
than
agricultural "shall be disposed of
under the provisions of this
chapter and not otherwise." Under
Section 10 of CA No. 141, the term
"disposition" includes lease of the land.
Any
disposition
of
government
reclaimed, foreshore and marshy
disposable lands for non-agricultural
purposes must comply with Chapter IX,
Title III of CA No. 141, 54 unless a
subsequent law amended or repealed
these provisions.
In his concurring opinion in the
landmark case of Republic Real
Estate Corporation v. Court of
Appeals,55Justice Reynato S. Puno
summarized succinctly the law on this
matter, as follows:
"Foreshore lands are lands of public
dominion intended for public use. So too
are lands reclaimed by the government
by dredging, filling, or other means. Act
1654 mandated that the control and
disposition of the foreshore and lands
under water remained in the national
government. Said law allowed only the
'leasing' of reclaimed land. The Public
Land Acts of 1919 and 1936 also
declared that the foreshore and lands
reclaimed by the government were to be
"disposed of to private parties by lease
only and not otherwise." Before leasing,
however, the Governor-General, upon
recommendation of the Secretary of
Agriculture and Natural Resources, had
first to determine that the land
reclaimed was not necessary for the
public service. This requisite must have

been met before the land could be

disposed of. But even then, the
foreshore and lands under water
were not to be alienated and sold
to private parties. The disposition
of the reclaimed land was only by
lease.
The
land
remained
property of the State." (Emphasis
supplied)
As observed by Justice Puno in his
concurring opinion, "Commonwealth
Act No. 141 has remained in effect at
present."
The State policy prohibiting the sale to
private parties of government reclaimed,
foreshore and marshy alienable lands of
the public domain, first implemented in
1907 was thus reaffirmed in CA No. 141
after the 1935 Constitution took effect.
The prohibition on the sale of foreshore
lands, however, became a constitutional
edict under the 1935 Constitution.
Foreshore lands became inalienable as
natural resources of the State, unless
reclaimed by the government and
classified as agricultural lands of the
public domain, in which case they would
fall under the classification of
government reclaimed lands.
After the effectivity of the 1935
Constitution, government reclaimed and
marshy disposable lands of the public
domain continued to be only leased and
not sold to private parties.56 These lands
remained sui generis, as the only
alienable or disposable lands of the
public domain the government could not
sell to private parties.
Since then and until now, the only way
the government can sell to private
parties government reclaimed and
marshy disposable lands of the public
domain is for the legislature to pass a
law authorizing such sale. CA No. 141
does not authorize the President to
reclassify government reclaimed and
marshy
lands
into
other
non-

agricultural lands under Section 59 (d).

Lands classified under Section 59 (d) are
the only alienable or disposable lands
for non-agricultural purposes that the
government could sell to private parties.
Moreover, Section 60 of CA No.
141 expressly requires congressional
authority before lands under Section 59
that
the
government
previously
transferred to government units or
entities could be sold to private parties.
Section 60 of CA No. 141 declares that
"Sec. 60. x x x The area so leased or sold
shall be such as shall, in the judgment of
the Secretary of Agriculture and Natural
Resources, be reasonably necessary for
the purposes for which such sale or lease
is requested, and shall not exceed one
hundred and forty-four hectares:
Provided, however, That this limitation
shall not apply to grants, donations, or
transfers
made
to
a
province,
municipality or branch or subdivision of
the Government for the purposes
deemed by said entities conducive to the
public interest;but the land so
granted, donated, or transferred
to a province, municipality or
branch or subdivision of the
Government
shall
not
be
alienated,
encumbered,
or
otherwise disposed of in a
manner affecting its title, except
when authorized by Congress: x x
x." (Emphasis supplied)
The congressional authority required in
Section 60 of CA No. 141 mirrors the
legislative authority required in Section
56 of Act No. 2874.
One reason for the congressional
authority is that Section 60 of CA No.
141 exempted government units and
entities from the maximum area of
public lands that could be acquired from
the State. These government units and
entities should not just turn around and
sell these lands to private parties in

violation of constitutional or statutory

limitations. Otherwise, the transfer of
lands for non-agricultural purposes to
government units and entities could be
used to circumvent constitutional
limitations on ownership of alienable or
disposable lands of the public domain.
In the same manner, such transfers
could also be used to evade the statutory
prohibition in CA No. 141 on the sale of
government reclaimed and marshy
lands of the public domain to private
parties. Section 60 of CA No. 141
constitutes by operation of law a lien on
these lands.57
In case of sale or lease of disposable
lands of the public domain falling under
Section 59 of CA No. 141, Sections 63
and 67 require a public bidding.
Sections 63 and 67 of CA No. 141
provide as follows:
"Sec. 63. Whenever it is decided that
lands covered by this chapter are not
needed for public purposes, the Director
of Lands shall ask the Secretary of
Agriculture and Commerce (now the
Secretary of Natural Resources) for
authority to dispose of the same. Upon
receipt of such authority, the Director of
Lands shall give notice by public
advertisement in the same manner as in
the case of leases or sales of agricultural
public land, x x x.
Sec. 67. The lease or sale shall be
made by oral bidding; and
adjudication shall be made to the
highest bidder. x x x." (Emphasis
supplied)
Thus, CA No. 141 mandates the
Government to put to public auction all
leases or sales of alienable or disposable
lands of the public domain.58
Like Act No. 1654 and Act No. 2874
before it, CA No. 141 did not repeal
Section 5 of the Spanish Law of Waters
of 1866. Private parties could still
reclaim portions of the sea with

government
permission.
However,
thereclaimed land could become
private land only if classified as
alienable agricultural land of the
public domain open to disposition
under CA No. 141. The 1935 Constitution
prohibited the alienation of all natural
resources except public agricultural
lands.
The Civil Code of 1950
The Civil Code of 1950 readopted
substantially the definition of property
of public dominion found in the Civil
Code of 1889. Articles 420 and 422 of
the Civil Code of 1950 state that
"Art. 420. The following things are
property of public dominion:
(1) Those intended for public use, such
as roads, canals, rivers, torrents, ports
and bridges constructed by the State,
banks, shores, roadsteads, and others of
similar character;
(2) Those which belong to the State,
without being for public use, and are
intended for some public service or for
the development of the national wealth.
x x x.
Art. 422. Property of public dominion,
when no longer intended for public use
or for public service, shall form part of
the patrimonial property of the State."
Again, the government must formally
declare that the property of public
dominion is no longer needed for public
use or public service, before the same
could be classified as patrimonial
property of the State.59 In the case of
government reclaimed and marshy
lands of the public domain, the
declaration of their being disposable, as
well as the manner of their disposition,
is governed by the applicable provisions
of CA No. 141.
Like the Civil Code of 1889, the Civil
Code of 1950 included as property of
public dominion those properties of the
State which, without being for public

use, are intended for public service or

the "development of the national
wealth." Thus, government reclaimed
and marshy lands of the State, even if
not employed for public use or public
service, if developed to enhance the
national wealth, are classified as
property of public dominion.
Dispositions under the 1973
Constitution
The 1973 Constitution, which took effect
on January 17, 1973, likewise adopted
the Regalian doctrine. Section 8, Article
XIV of the 1973 Constitution stated that

"Sec. 8. All lands of the public domain,

waters, minerals, coal, petroleum and
other mineral oils, all forces of potential
energy, fisheries, wildlife, and other
natural resources of the Philippines
belong to the State. With the
exception
of
agricultural,
industrial
or
commercial,
residential,
and
resettlement
lands of the public domain,
natural resources shall not be
alienated, and no license, concession,
or
lease
for
the
exploration,
development, exploitation, or utilization
of any of the natural resources shall be
granted for a period exceeding twentyfive years, renewable for not more than
twenty-five years, except as to water
rights for irrigation, water supply,
fisheries, or industrial uses other than
the development of water power, in
which cases, beneficial use may be the
measure and the limit of the grant."
(Emphasis supplied)
The 1973 Constitution prohibited the
alienation of all natural resources with
the exception of "agricultural, industrial
or
commercial,
residential,
and
resettlement lands of the public
domain." In contrast, the 1935
Constitution barred the alienation of all
natural
resources
except
"public

agricultural lands." However, the term

"public agricultural lands" in the 1935
Constitution encompassed industrial,
commercial,
residential
and
resettlement lands of the public
domain.60 If the land of public domain
were neither timber nor mineral land, it
would fall under the classification of
agricultural land of the public
domain. Both the 1935 and 1973
Constitutions,
therefore,
prohibited the alienation of all
natural
resources
except
agricultural lands of the public
domain.
The 1973 Constitution, however, limited
the alienation of lands of the public
domain to individuals who were citizens
of the Philippines. Private corporations,
even if wholly owned by Philippine
citizens, were no longer allowed to
acquire alienable lands of the public
domain unlike in the 1935 Constitution.
Section 11, Article XIV of the 1973
Constitution declared that
"Sec. 11. The Batasang Pambansa, taking
into account conservation, ecological,
and development requirements of the
natural resources, shall determine by
law the size of land of the public domain
which may be developed, held or
acquired by, or leased to, any qualified
individual, corporation, or association,
and
the
conditions
therefor. No
private
corporation
or
association may hold alienable
lands of the public domain except
by lease not to exceed one thousand
hectares in area nor may any citizen
hold such lands by lease in excess of five
hundred hectares or acquire by
purchase, homestead or grant, in excess
of twenty-four hectares. No private
corporation or association may hold by
lease, concession, license or permit,
timber or forest lands and other timber
or forest resources in excess of one

hundred thousand hectares. However,

such area may be increased by the
Batasang
Pambansa
upon
recommendation of the National
Economic and Development Authority."
(Emphasis supplied)
Thus, under the 1973 Constitution,
private
corporations
could
hold
alienable lands of the public domain
only through lease. Only individuals
could now acquire alienable lands of the
public
domain,
and private
corporations became absolutely
barred from acquiring any kind
of alienable land of the public
domain. The constitutional ban
extended to all kinds of alienable lands
of the public domain, while the statutory
ban under CA No. 141 applied only to
government reclaimed, foreshore and
marshy alienable lands of the public
domain.
PD No. 1084 Creating the Public
Estates Authority
On February 4, 1977, then President
Ferdinand Marcos issued Presidential
Decree No. 1084 creating PEA, a wholly
government owned and controlled
corporation with a special charter.
Sections 4 and 8 of PD No. 1084, vests
PEA with the following purposes and
powers:
"Sec. 4. Purpose. The Authority is
hereby created for the following
purposes:
(a) To reclaim land, including
foreshore and submerged areas,
by dredging, filling or other
means, or to acquire reclaimed
land;
(b) To develop, improve, acquire,
administer,
deal
in,
subdivide,
dispose, lease and sell any and all
kinds of lands, buildings, estates and
other forms of real property, owned,
managed, controlled and/or operated by
the government;

(c) To provide for, operate or administer

such service as may be necessary for the
efficient, economical and beneficial
utilization of the above properties.
Sec. 5. Powers and functions of the
Authority. The Authority shall, in
carrying out the purposes for which it is
created, have the following powers and
functions:
(a)To prescribe its by-laws.
xxx
(i) To hold lands of the public
domain in excess of the area permitted
to private corporations by statute.
(j) To reclaim lands and to construct
work across, or otherwise, any stream,
watercourse, canal, ditch, flume x x x.
xxx
(o) To perform such acts and exercise
such functions as may be necessary for
the attainment of the purposes and
objectives herein specified." (Emphasis
supplied)
PD No. 1084 authorizes PEA to reclaim
both foreshore and submerged areas of
the public domain. Foreshore areas are
those covered and uncovered by the ebb
and flow of the tide.61 Submerged areas
are those permanently under water
regardless of the ebb and flow of the
tide.62 Foreshore and submerged areas
indisputably belong to the public
domain63 and are inalienable unless
reclaimed, classified as alienable lands
open to disposition, and further
declared no longer needed for public
service.
The ban in the 1973 Constitution on
private corporations from acquiring
alienable lands of the public domain did
not apply to PEA since it was then, and
until today, a fully owned government
corporation. The constitutional ban
applied then, as it still applies now, only
to
"private
corporations
and
associations." PD No. 1084 expressly
empowers PEA "to hold lands of the

public domain" even "in excess of the

area permitted to private corporations
by statute." Thus, PEA can hold title
to private lands, as well as title to
lands of the public domain.
In order for PEA to sell its reclaimed
foreshore and submerged alienable
lands of the public domain, there must
be legislative authority empowering PEA
to sell these lands. This legislative
authority is necessary in view of Section
60 of CA No.141, which states
"Sec. 60. x x x; but the land so granted,
donated or transferred to a province,
municipality, or branch or subdivision of
the Government shall not be alienated,
encumbered or otherwise disposed of in
a manner affecting its title, except
when authorized by Congress; x x
x." (Emphasis supplied)
Without such legislative authority, PEA
could not sell but only lease its
reclaimed foreshore and submerged
alienable lands of the public domain.
Nevertheless, any legislative authority
granted to PEA to sell its reclaimed
alienable lands of the public domain
would be subject to the constitutional
ban on private corporations from
acquiring alienable lands of the public
domain.
Hence,
such
legislative
authority could only benefit private
individuals.
Dispositions under the 1987
Constitution
The 1987 Constitution, like the 1935 and
1973 Constitutions before it, has
adopted the Regalian doctrine. The 1987
Constitution declares that all natural
resources are "owned by the State,"
and except for alienable agricultural
lands of the public domain, natural
resources cannot be alienated. Sections
2 and 3, Article XII of the 1987
Constitution state that
"Section 2. All lands of the public
domain,
waters,
minerals,
coal,

petroleum and other mineral oils, all

forces of potential energy, fisheries,
forests or timber, wildlife, flora and
fauna, and other natural resources
are owned by the State. With the
exception of agricultural lands,
all other natural resources shall
not be alienated. The exploration,
development, and utilization of natural
resources shall be under the full control
and supervision of the State. x x x.
Section 3. Lands of the public domain
are classified into agricultural, forest or
timber, mineral lands, and national
parks. Agricultural lands of the public
domain may be further classified by law
according to the uses which they may be
devoted. Alienable lands of the
public domain shall be limited to
agricultural
lands.
Private
corporations or associations may
not hold such alienable lands of
the public domain except by lease,
for a period not exceeding twentyfive years, renewable for not
more than twenty-five years, and
not to exceed one thousand
hectares in area. Citizens of the
Philippines may lease not more than five
hundred hectares, or acquire not more
than twelve hectares thereof by
purchase, homestead, or grant.
Taking into account the requirements of
conservation, ecology, and development,
and subject to the requirements of
agrarian reform, the Congress shall
determine, by law, the size of lands of
the public domain which may be
acquired, developed, held, or leased and
the conditions therefor." (Emphasis
supplied)
The 1987 Constitution continues the
State policy in the 1973 Constitution
banning
private
corporations
fromacquiring
any
kind
of
alienable land of the public
domain. Like the 1973 Constitution,

the 1987 Constitution allows private

corporations to hold alienable lands of
the public domain only through
lease. As in the 1935 and 1973
Constitutions, the general law governing
the lease to private corporations of
reclaimed, foreshore and marshy
alienable lands of the public domain is
still CA No. 141.
The
Rationale
behind
the
Constitutional Ban
The rationale behind the constitutional
ban on corporations from acquiring,
except through lease, alienable lands of
the public domain is not well
understood. During the deliberations of
the 1986 Constitutional Commission,
the commissioners probed the rationale
behind this ban, thus:
"FR. BERNAS: Mr. Vice-President, my
questions have reference to page 3, line
5 which says:
`No private corporation or association
may hold alienable lands of the public
domain except by lease, not to exceed
one thousand hectares in area.'
If we recall, this provision did not exist
under the 1935 Constitution, but this
was introduced in the 1973 Constitution.
In
effect,
it
prohibits
private
corporations from acquiring alienable
public lands. But it has not been
very clear in jurisprudence what
the reason for this is. In some of the
cases decided in 1982 and 1983, it was
indicated that the purpose of this
is to prevent large landholdings. Is
that the intent of this provision?
MR. VILLEGAS: I think that is the spirit
of the provision.
FR. BERNAS: In existing decisions
involving the Iglesia ni Cristo, there
were instances where the Iglesia ni
Cristo was not allowed to acquire a mere
313-square meter land where a chapel
stood because the Supreme Court said it

would be in violation of this." (Emphasis

supplied)
In Ayog v. Cusi,64 the Court explained
the rationale behind this constitutional
ban in this way:
"Indeed,
one
purpose
of
the
constitutional
prohibition
against
purchases of public agricultural lands by
private corporations is to equitably
diffuse land ownership or to encourage
'owner-cultivatorship and the economic
family-size farm' and to prevent a
recurrence of cases like the instant case.
Huge landholdings by corporations or
private persons had spawned social
unrest."
However, if the constitutional intent is
to prevent huge landholdings, the
Constitution could have simply limited
the size of alienable lands of the public
domain that corporations could acquire.
The Constitution could have followed
the limitations on individuals, who
could acquire not more than 24 hectares
of alienable lands of the public domain
under the 1973 Constitution, and not
more than 12 hectares under the 1987
Constitution.
If the constitutional intent is to
encourage economic family-size farms,
placing the land in the name of a
corporation would be more effective in
preventing the break-up of farmlands. If
the farmland is registered in the name of
a corporation, upon the death of the
owner, his heirs would inherit shares in
the corporation instead of subdivided
parcels of the farmland. This would
prevent the continuing break-up of
farmlands into smaller and smaller plots
from one generation to the next.
In actual practice, the constitutional ban
strengthens the constitutional limitation
on individuals from acquiring more than
the allowed area of alienable lands of the
public
domain.
Without
the
constitutional ban, individuals who

already acquired the maximum area of

alienable lands of the public domain
could easily set up corporations to
acquire more alienable public lands. An
individual could own as many
corporations as his means would allow
him. An individual could even hide his
ownership of a corporation by putting
his nominees as stockholders of the
corporation. The corporation is a
convenient vehicle to circumvent the
constitutional limitation on acquisition
by individuals of alienable lands of the
public domain.
The constitutional intent, under the
1973 and 1987 Constitutions, is to
transfer ownership of only a limited area
of alienable land of the public domain to
a
qualified
individual.
This
constitutional intent is safeguarded by
the provision prohibiting corporations
from acquiring alienable lands of the
public domain, since the vehicle to
circumvent the constitutional intent is
removed. The available alienable public
lands are gradually decreasing in the
face of an ever-growing population. The
most effective way to insure faithful
adherence to this constitutional intent is
to grant or sell alienable lands of the
public domain only to individuals. This,
it would seem, is the practical benefit
arising from the constitutional ban.
The Amended Joint Venture
Agreement
The subject matter of the Amended JVA,
as stated in its second Whereas clause,
consists of three properties, namely:
1. "[T]hree partially reclaimed and
substantially eroded islands along
Emilio
Aguinaldo
Boulevard
in
Paranaque and Las Pinas, Metro Manila,
with a combined titled area of 1,578,441
square meters;"
2. "[A]nother area of 2,421,559 square
meters contiguous to the three islands;"
and

3. "[A]t AMARI's option as approved by

PEA, an additional 350 hectares more or
less to regularize the configuration of
the reclaimed area."65
PEA confirms that the Amended JVA
involves "the development of the
Freedom
Islands
and
further
reclamation of about 250 hectares x x x,"
plus an option "granted to AMARI to
subsequently reclaim another 350
hectares x x x."66
In short, the Amended JVA covers a
reclamation area of 750 hectares. Only
157.84 hectares of the 750-hectare
reclamation project have been
reclaimed, and the rest of the
592.15
hectares
are
still
submerged areas forming part of
Manila Bay.
Under the Amended JVA, AMARI will
reimburse
PEA
the
sum
of
P1,894,129,200.00 for PEA's "actual
cost" in partially reclaiming the
Freedom Islands. AMARI will also
complete, at its own expense, the
reclamation of the Freedom Islands.
AMARI will further shoulder all the
reclamation costs of all the other areas,
totaling 592.15 hectares, still to be
reclaimed. AMARI and PEA will share,
in the proportion of 70 percent and 30
percent, respectively, the total net
usable area which is defined in the
Amended JVA as the total reclaimed
area less 30 percent earmarked for
common areas. Title to AMARI's share
in the net usable area, totaling 367.5
hectares, will be issued in the name of
AMARI. Section 5.2 (c) of the Amended
JVA provides that
"x x x, PEA shall have the duty to
execute without delay the necessary
deed of transfer or conveyance of the
title pertaining to AMARI's Land share
based
on
the
Land
Allocation
Plan. PEA, when requested in
writing by AMARI, shall then

cause the issuance and delivery of

the proper certificates of title
covering AMARI's Land Share in
the name of AMARI, x x x; provided,
that if more than seventy percent (70%)
of the titled area at any given time
pertains to AMARI, PEA shall deliver to
AMARI only seventy percent (70%) of
the titles pertaining to AMARI, until
such time when a corresponding
proportionate area of additional land
pertaining to PEA has been titled."
(Emphasis supplied)
Indisputably, under the Amended
JVA AMARI will acquire and own
a maximum of 367.5 hectares of
reclaimed land which will be
titled in its name.
To implement the Amended JVA, PEA
delegated to the unincorporated PEAAMARI joint venture PEA's statutory
authority, rights and privileges to
reclaim foreshore and submerged areas
in Manila Bay. Section 3.2.a of the
Amended JVA states that
"PEA hereby contributes to the joint
venture its rights and privileges to
perform Rawland Reclamation and
Horizontal Development as well as own
the Reclamation Area, thereby granting
the Joint Venture the full and exclusive
right, authority and privilege to
undertake the Project in accordance
with the Master Development Plan."
The Amended JVA is the product of a
renegotiation of the original JVA dated
April 25, 1995 and its supplemental
agreement dated August 9, 1995.
The Threshold Issue
The threshold issue is whether AMARI,
a private corporation, can acquire and
own under the Amended JVA 367.5
hectares of reclaimed foreshore and
submerged areas in Manila Bay in view
of Sections 2 and 3, Article XII of the
1987 Constitution which state that:

"Section 2. All lands of the public

domain,
waters,
minerals,
coal,
petroleum, and other mineral oils, all
forces of potential energy, fisheries,
forests or timber, wildlife, flora and
fauna, and other natural resources are
owned by the State. With the
exception of agricultural lands,
all other natural resources shall
not be alienated. x x x.
xxx
Section 3. x x x Alienable lands of the
public domain shall be limited to
agricultural
lands. Private
corporations or associations may
not hold such alienable lands of
the public domain except by lease,
x x x."(Emphasis supplied)
Classification
of
Reclaimed
Foreshore and Submerged Areas
PEA readily concedes that lands
reclaimed from foreshore or submerged
areas of Manila Bay are alienable or
disposable lands of the public domain.
In its Memorandum,67 PEA admits that

"Under the Public Land Act (CA 141, as

amended), reclaimed
lands
are
classified
as
alienable
and
disposable lands of the public
domain:
'Sec. 59. The lands disposable under this
title shall be classified as follows:
(a) Lands reclaimed by the government
by dredging, filling, or other means;
x x x.'" (Emphasis supplied)
Likewise,
the
Legal
Task
Force68 constituted under Presidential
Administrative Order No. 365 admitted
in its Report and Recommendation to
then
President
Fidel
V.
Ramos, "[R]eclaimed lands are
classified
as
alienable
and
disposable lands of the public
domain."69 The Legal Task Force
concluded that
"D. Conclusion

Reclaimed lands are lands of the public

domain.
However,
by
statutory
authority, the rights of ownership and
disposition over reclaimed lands have
been transferred to PEA, by virtue of
which PEA, as owner, may validly
convey the same to any qualified person
without violating the Constitution or any
statute.
The constitutional provision prohibiting
private corporations from holding public
land, except by lease (Sec. 3, Art.
XVII,70 1987 Constitution), does not
apply to reclaimed lands whose
ownership has passed on to PEA by
statutory grant."
Under Section 2, Article XII of the 1987
Constitution,
the
foreshore
and
submerged areas of Manila Bay are part
of the "lands of the public domain,
waters x x x and other natural resources"
and consequently "owned by the State."
As such, foreshore and submerged areas
"shall not be alienated," unless they are
classified as "agricultural lands" of the
public domain. The mere reclamation of
these areas by PEA does not convert
these inalienable natural resources of
the State into alienable or disposable
lands of the public domain. There must
be a law or presidential proclamation
officially classifying these reclaimed
lands as alienable or disposable and
open to disposition or concession.
Moreover, these reclaimed lands cannot
be classified as alienable or disposable if
the law has reserved them for some
public or quasi-public use.71
Section 8 of CA No. 141 provides that
"only those lands shall be declared open
to disposition or concession which have
been officially
delimited
and
72
classified." The President has the
authority to classify inalienable lands of
the public domain into alienable or
disposable lands of the public domain,
pursuant to Section 6 of CA No. 141. In

Laurel vs. Garcia,73 the Executive

Department attempted to sell the
Roppongi property in Tokyo, Japan,
which was acquired by the Philippine
Government for use as the Chancery of
the Philippine Embassy. Although the
Chancery had transferred to another
location thirteen years earlier, the Court
still ruled that, under Article 42274of the
Civil Code, a property of public
dominion retains such character until
formally declared otherwise. The Court
ruled that
"The fact that the Roppongi site has not
been used for a long time for actual
Embassy service does not automatically
convert it to patrimonial property. Any
such conversion happens only if the
property is withdrawn from public use
(Cebu Oxygen and Acetylene Co. v.
Bercilles, 66 SCRA 481 [1975]. A
property continues to be part of
the public domain, not available
for private appropriation or
ownership 'until there is a formal
declaration on the part of the
government to withdraw it from
being such'(Ignacio v. Director of
Lands, 108 Phil. 335 [1960]." (Emphasis
supplied)
PD No. 1085, issued on February 4,
1977, authorized the issuance of special
land patents for lands reclaimed by PEA
from the foreshore or submerged areas
of Manila Bay. On January 19, 1988 then
President Corazon C. Aquino issued
Special Patent No. 3517 in the name of
PEA for the 157.84 hectares comprising
the partially reclaimed Freedom Islands.
Subsequently, on April 9, 1999 the
Register of Deeds of the Municipality of
Paranaque issued TCT Nos. 7309, 7311
and 7312 in the name of PEA pursuant
to Section 103 of PD No. 1529
authorizing the issuance of certificates
of title corresponding to land patents. To

this day, these certificates of title are still

in the name of PEA.
PD No. 1085, coupled with President
Aquino's actual issuance of a special
patent covering the Freedom Islands, is
equivalent to an official proclamation
classifying the Freedom Islands as
alienable or disposable lands of the
public domain. PD No. 1085 and
President Aquino's issuance of a land
patent also constitute a declaration that
the Freedom Islands are no longer
needed
for
public
service. The
Freedom
Islands
are
thus
alienable or disposable lands of
the public domain, open to
disposition or concession to
qualified parties.
At the time then President Aquino
issued Special Patent No. 3517, PEA had
already reclaimed the Freedom Islands
although subsequently there were
partial erosions on some areas. The
government had also completed the
necessary surveys on these islands.
Thus, the Freedom Islands were no
longer part of Manila Bay but part of the
land mass. Section 3, Article XII of the
1987 Constitution classifies lands of the
public domain into "agricultural, forest
or timber, mineral lands, and national
parks." Being neither timber, mineral,
nor national park lands, the reclaimed
Freedom Islands necessarily fall under
the classification of agricultural lands of
the public domain. Under the 1987
Constitution, agricultural lands of the
public domain are the only natural
resources that the State may alienate to
qualified private parties. All other
natural resources, such as the seas or
bays, are "waters x x x owned by the
State" forming part of the public
domain, and are inalienable pursuant to
Section 2, Article XII of the 1987
Constitution.

AMARI claims that the Freedom Islands

are private lands because CDCP, then a
private corporation, reclaimed the
islands under a contract dated
November
20,
1973
with
the
Commissioner of Public Highways.
AMARI, citing Article 5 of the Spanish
Law of Waters of 1866, argues that "if
the ownership of reclaimed lands may
be given to the party constructing the
works, then it cannot be said that
reclaimed lands are lands of the public
domain which the State may not
alienate."75 Article 5 of the Spanish Law
of Waters reads as follows:
"Article 5. Lands reclaimed from the sea
in consequence of works constructed by
the State, or by the provinces, pueblos or
private
persons, with
proper
permission, shall become the property
of the party constructing such
works, unless otherwise provided
by the terms of the grant of
authority." (Emphasis supplied)
Under Article 5 of the Spanish Law of
Waters of 1866, private parties could
reclaim from the sea only with "proper
permission" from the State. Private
parties could own the reclaimed land
only if not "otherwise provided by the
terms of the grant of authority." This
clearly meant that no one could reclaim
from the sea without permission from
the State because the sea is property of
public dominion. It also meant that the
State could grant or withhold ownership
of the reclaimed land because any
reclaimed land, like the sea from which
it emerged, belonged to the State. Thus,
a private person reclaiming from the sea
without permission from the State could
not acquire ownership of the reclaimed
land which would remain property of
public dominion like the sea it
replaced.76 Article 5 of the Spanish Law
of Waters of 1866 adopted the timehonored principle of land ownership

that "all lands that were not acquired

from the government, either by
purchase or by grant, belong to the
public domain."77
Article 5 of the Spanish Law of Waters
must be read together with laws
subsequently enacted on the disposition
of public lands. In particular, CA No. 141
requires that lands of the public domain
must first be classified as alienable or
disposable before the government can
alienate them. These lands must not be
reserved for public or quasi-public
purposes.78 Moreover,
the
contract
between CDCP and the government was
executed after the effectivity of the 1973
Constitution which barred private
corporations from acquiring any kind of
alienable land of the public domain. This
contract could not have converted the
Freedom Islands into private lands of a
private corporation.
Presidential Decree No. 3-A, issued on
January 11, 1973, revoked all laws
authorizing the reclamation of areas
under water and revested solely in the
National Government the power to
reclaim lands. Section 1 of PD No. 3-A
declared that
"The provisions of any law to the
contrary notwithstanding, the
reclamation of areas under water,
whether foreshore or inland, shall
be limited
to
the
National
Government
or
any
person
authorized by it under a proper
contract. (Emphasis supplied)
x x x."
PD No. 3-A repealed Section 5 of the
Spanish Law of Waters of 1866 because
reclamation of areas under water could
now be undertaken only by the National
Government or by a person contracted
by the National Government. Private
parties may reclaim from the sea only
under a contract with the National
Government, and no longer by grant or

permission as provided in Section 5 of

the Spanish Law of Waters of 1866.
Executive Order No. 525, issued on
February 14, 1979, designated PEA as
the
National
Government's
implementing arm to undertake "all
reclamation
projects
of
the
government,"
which
"shall
be
undertaken by the PEA or
through
a
proper
contract
executed by it with any person or
entity." Under such contract, a private
party
receives
compensation
for
reclamation services rendered to PEA.
Payment to the contractor may be in
cash, or in kind consisting of portions of
the reclaimed land, subject to the
constitutional
ban
on
private
corporations from acquiring alienable
lands of the public domain. The
reclaimed land can be used as payment
in kind only if the reclaimed land is first
classified as alienable or disposable land
open to disposition, and then declared
no longer needed for public service.
The Amended JVA covers not only the
Freedom Islands, but also an additional
592.15 hectares which are still
submerged and forming part of Manila
Bay. There is no legislative or
Presidential act classifying these
submerged areas as alienable or
disposable lands of the public
domain open to disposition. These
submerged areas are not covered by any
patent or certificate of title. There can be
no dispute that these submerged areas
form part of the public domain, and in
their present state are inalienable
and outside the commerce of man.
Until reclaimed from the sea, these
submerged areas are, under the
Constitution, "waters x x x owned by the
State," forming part of the public
domain and consequently inalienable.
Only when actually reclaimed from the
sea can these submerged areas be

classified as public agricultural lands,

which under the Constitution are the
only natural resources that the State
may alienate. Once reclaimed and
transformed into public agricultural
lands, the government may then
officially classify these lands as alienable
or disposable lands open to disposition.
Thereafter, the government may declare
these lands no longer needed for public
service. Only then can these reclaimed
lands be considered alienable or
disposable lands of the public domain
and within the commerce of man.
The classification of PEA's reclaimed
foreshore and submerged lands into
alienable or disposable lands open to
disposition is necessary because PEA is
tasked under its charter to undertake
public services that require the use of
lands of the public domain. Under
Section 5 of PD No. 1084, the functions
of PEA include the following: "[T]o own
or operate railroads, tramways and
other kinds of land transportation, x x x;
[T]o construct, maintain and operate
such systems of sanitary sewers as may
be necessary; [T]o construct, maintain
and operate such storm drains as may
be necessary." PEA is empowered to
issue "rules and regulations as may be
necessary for the proper use by private
parties of any or all of the
highways,
roads,
utilities,
buildings and/or any of its
properties and to impose or collect
fees or tolls for their use." Thus, part of
the reclaimed foreshore and submerged
lands held by the PEA would actually be
needed for public use or service since
many of the functions imposed on PEA
by its charter constitute essential public
services.
Moreover, Section 1 of Executive Order
No. 525 provides that PEA "shall be
primarily responsible for integrating,
directing,
and
coordinating
all

reclamation projects for and on behalf of

the National Government." The same
section
also
states
that
"[A]ll
reclamation projects shall be approved
by the President upon recommendation
of the PEA, and shall be undertaken by
the PEA or through a proper contract
executed by it with any person or entity;
x x x." Thus, under EO No. 525, in
relation to PD No. 3-A and PD No.1084,
PEA became the primary implementing
agency of the National Government to
reclaim foreshore and submerged lands
of the public domain. EO No. 525
recognized PEA as the government
entity "to undertake the reclamation of
lands and ensure their maximum
utilization
in promoting
public
welfare and interests."79 Since large
portions of these reclaimed lands would
obviously be needed for public service,
there must be a formal declaration
segregating reclaimed lands no longer
needed for public service from those still
needed for public service.1wphi1.nt
Section 3 of EO No. 525, by declaring
that all lands reclaimed by PEA "shall
belong to or be owned by the PEA,"
could not automatically operate to
classify inalienable lands into alienable
or disposable lands of the public
domain. Otherwise, reclaimed foreshore
and submerged lands of the public
domain would automatically become
alienable once reclaimed by PEA,
whether or not classified as alienable or
disposable.
The Revised Administrative Code of
1987, a later law than either PD No.
1084 or EO No. 525, vests in the
Department of Environment and
Natural Resources ("DENR" for brevity)
the following powers and functions:
"Sec. 4. Powers and Functions. The
Department shall:
(1) x x x
xxx

(4) Exercise
supervision
and
control over forest lands, alienable
and disposable public lands,
mineral resources and, in the process of
exercising
such
control,
impose
appropriate taxes, fees, charges, rentals
and any such form of levy and collect
such revenues for the exploration,
development, utilization or gathering of
such resources;
xxx
(14) Promulgate rules, regulations
and guidelines on the issuance of
licenses, permits, concessions,
lease agreements and such other
privileges
concerning
the
development, exploration and
utilization
of
the
country's
marine, freshwater, and brackish
water and over all aquatic
resources of the country and shall
continue to oversee, supervise
and police our natural resources;
cancel or cause to cancel such privileges
upon failure, non-compliance or
violations of any regulation, order, and
for all other causes which are in
furtherance of the conservation of
natural resources and supportive of the
national interest;
(15) Exercise exclusive jurisdiction
on
the
management
and
disposition of all lands of the
public domain and serve as the
sole agency responsible for
classification,
sub-classification,
surveying and titling of lands in
consultation
with
appropriate
agencies."80 (Emphasis supplied)
As manager, conservator and overseer of
the natural resources of the State, DENR
exercises "supervision and control over
alienable and disposable public lands."
DENR
also
exercises
"exclusive
jurisdiction on the management and
disposition of all lands of the public
domain." Thus, DENR decides whether

areas under water, like foreshore or

submerged areas of Manila Bay, should
be reclaimed or not. This means that
PEA needs authorization from DENR
before PEA can undertake reclamation
projects in Manila Bay, or in any part of
the country.
DENR
also
exercises
exclusive
jurisdiction over the disposition of all
lands of the public domain. Hence,
DENR decides whether reclaimed lands
of PEA should be classified as alienable
under Sections 681 and 782 of CA No. 141.
Once DENR decides that the reclaimed
lands should be so classified, it then
recommends to the President the
issuance of a proclamation classifying
the lands as alienable or disposable
lands of the public domain open to
disposition. We note that then DENR
Secretary Fulgencio S. Factoran, Jr.
countersigned Special Patent No. 3517 in
compliance
with
the
Revised
Administrative Code and Sections 6 and
7 of CA No. 141.
In short, DENR is vested with the power
to authorize the reclamation of areas
under water, while PEA is vested with
the power to undertake the physical
reclamation of areas under water,
whether directly or through private
contractors. DENR is also empowered to
classify lands of the public domain into
alienable or disposable lands subject to
the approval of the President. On the
other hand, PEA is tasked to develop,
sell or lease the reclaimed alienable
lands of the public domain.
Clearly, the mere physical act of
reclamation by PEA of foreshore or
submerged areas does not make the
reclaimed lands alienable or disposable
lands of the public domain, much less
patrimonial lands of PEA. Likewise, the
mere transfer by the National
Government of lands of the public
domain to PEA does not make the lands

alienable or disposable lands of the

public domain, much less patrimonial
lands of PEA.
Absent two official acts a classification
that these lands are alienable or
disposable and open to disposition and a
declaration that these lands are not
needed for public service, lands
reclaimed by PEA remain inalienable
lands of the public domain. Only such an
official
classification
and
formal
declaration can convert reclaimed lands
into alienable or disposable lands of the
public domain, open to disposition
under the Constitution, Title I and Title
III83of CA No. 141 and other applicable
laws.84
PEA's Authority to Sell Reclaimed
Lands
PEA, like the Legal Task Force, argues
that as alienable or disposable lands of
the public domain, the reclaimed lands
shall be disposed of in accordance with
CA No. 141, the Public Land Act. PEA,
citing Section 60 of CA No. 141, admits
that reclaimed lands transferred to a
branch or subdivision of the government
"shall not be alienated, encumbered, or
otherwise disposed of in a manner
affecting
its
title, except
when
authorized by Congress: x x
x."85 (Emphasis by PEA)
In Laurel vs. Garcia,86 the Court cited
Section 48 of the Revised Administrative
Code of 1987, which states that
"Sec. 48. Official Authorized to Convey
Real Property. Whenever real property
of the Government is authorized by
law to be conveyed, the deed of
conveyance shall be executed in behalf
of the government by the following: x x
x."
Thus, the Court concluded that a law is
needed to convey any real property
belonging to the Government. The Court
declared that -

"It is not for the President to convey real

property of the government on his or her
own sole will. Any such conveyance
must be authorized and approved
by a law enacted by the Congress.
It requires executive and legislative
concurrence." (Emphasis supplied)
PEA contends that PD No. 1085 and EO
No. 525 constitute the legislative
authority allowing PEA to sell its
reclaimed lands. PD No. 1085, issued on
February 4, 1977, provides that
"The land reclaimed in the
foreshore and offshore area of
Manila Bay pursuant to the contract
for the reclamation and construction of
the Manila-Cavite Coastal Road Project
between the Republic of the Philippines
and the Construction and Development
Corporation of the Philippines dated
November 20, 1973 and/or any other
contract or reclamation covering the
same area is hereby transferred,
conveyed and assigned to the
ownership and administration of
the
Public
Estates
Authority established pursuant to PD
No. 1084; Provided, however, That the
rights and interests of the Construction
and Development Corporation of the
Philippines pursuant to the aforesaid
contract shall be recognized and
respected.
Henceforth, the Public Estates Authority
shall exercise the rights and assume the
obligations of the Republic of the
Philippines (Department of Public
Highways) arising from, or incident to,
the aforesaid contract between the
Republic of the Philippines and the
Construction
and
Development
Corporation of the Philippines.
In consideration of the foregoing
transfer and assignment, the Public
Estates Authority shall issue in favor of
the Republic of the Philippines the
corresponding shares of stock in said

entity with an issued value of said shares

of stock (which) shall be deemed fully
paid and non-assessable.
The Secretary of Public Highways and
the General Manager of the Public
Estates Authority shall execute such
contracts or agreements, including
appropriate agreements with the
Construction
and
Development
Corporation of the Philippines, as may
be necessary to implement the above.
Special land patent/patents shall
be issued by the Secretary of
Natural Resources in favor of the
Public Estates Authority without
prejudice to the subsequent
transfer to the contractor or his
assignees of such portion or
portions of the land reclaimed or
to be reclaimed as provided for in
the above-mentioned contract. On
the basis of such patents, the
Land Registration Commission
shall issue the corresponding
certificate of title." (Emphasis
supplied)
On the other hand, Section 3 of EO No.
525, issued on February 14, 1979,
provides that "Sec. 3. All lands reclaimed by PEA
shall belong to or be owned by the
PEA which shall be responsible for its
administration, development, utilization
or disposition in accordance with the
provisions of Presidential Decree No.
1084. Any and all income that the PEA
may derive from the sale, lease or use of
reclaimed lands shall be used in
accordance with the provisions of
Presidential Decree No. 1084."
There is no express authority under
either PD No. 1085 or EO No. 525 for
PEA to sell its reclaimed lands. PD No.
1085 merely transferred "ownership and
administration" of lands reclaimed from
Manila Bay to PEA, while EO No. 525
declared that lands reclaimed by PEA

"shall belong to or be owned by PEA."

EO No. 525 expressly states that PEA
should dispose of its reclaimed lands "in
accordance with the provisions of
Presidential Decree No. 1084," the
charter of PEA.
PEA's charter, however, expressly tasks
PEA "to develop, improve, acquire,
administer, deal in, subdivide, dispose,
lease and sell any and all kinds of
lands x x x owned, managed, controlled
and/or
operated
by
the
government."87 (Emphasis
supplied) There
is,
therefore,
legislative authority granted to
PEA to sell its lands, whether
patrimonial or alienable lands of
the public domain. PEA may sell to
private
parties
itspatrimonial
properties in accordance with the PEA
charter
free
from
constitutional
limitations. The constitutional ban on
private corporations from acquiring
alienable lands of the public domain
does not apply to the sale of PEA's
patrimonial lands.
PEA may also sell its alienable or
disposable lands of the public
domain to private individuals since,
with the legislative authority, there is no
longer any statutory prohibition against
such sales and the constitutional ban
does not apply to individuals. PEA,
however, cannot sell any of its alienable
or disposable lands of the public domain
to private corporations since Section 3,
Article XII of the 1987 Constitution
expressly prohibits such sales. The
legislative authority benefits only
individuals. Private corporations remain
barred from acquiring any kind of
alienable land of the public domain,
including government reclaimed lands.
The provision in PD No. 1085 stating
that portions of the reclaimed lands
could be transferred by PEA to the
"contractor or his assignees" (Emphasis

supplied) would not apply to private

corporations but only to individuals
because of the constitutional ban.
Otherwise, the provisions of PD No.
1085 would violate both the 1973 and
1987 Constitutions.
The requirement of public auction
in the sale of reclaimed lands
Assuming the reclaimed lands of PEA
are classified as alienable or disposable
lands open to disposition, and further
declared no longer needed for public
service, PEA would have to conduct a
public bidding in selling or leasing these
lands. PEA must observe the provisions
of Sections 63 and 67 of CA No. 141
requiring public auction, in the absence
of a law exempting PEA from holding a
public auction.88 Special Patent No. 3517
expressly states that the patent is issued
by authority of the Constitution and PD
No.
1084,
"supplemented
by
Commonwealth Act No. 141, as
amended." This is an acknowledgment
that the provisions of CA No. 141 apply
to the disposition of reclaimed alienable
lands of the public domain unless
otherwise provided by law. Executive
Order No. 654,89 which authorizes PEA
"to determine the kind and manner of
payment for the transfer" of its assets
and properties, does not exempt PEA
from the requirement of public auction.
EO No. 654 merely authorizes PEA to
decide the mode of payment, whether in
kind and in installment, but does not
authorize PEA to dispense with public
auction.
Moreover, under Section 79 of PD No.
1445, otherwise known as the
Government
Auditing
Code,
the
government is required to sell valuable
government property through public
bidding. Section 79 of PD No. 1445
mandates that
"Section
79. When
government
property has become unserviceable for

any cause, or is no longer needed, it

shall, upon application of the officer
accountable therefor, be inspected by
the head of the agency or his duly
authorized
representative
in
the
presence of the auditor concerned and,
if found to be valueless or unsaleable, it
may be destroyed in their presence. If
found to be valuable, it may be
sold at public auction to the
highest bidder under the supervision
of the proper committee on award or
similar body in the presence of the
auditor concerned or other authorized
representative
of
the
Commission, after advertising by
printed notice in the Official
Gazette, or for not less than three
consecutive
days
in
any
newspaper of general circulation,
or where the value of the property does
not warrant the expense of publication,
by notices posted for a like period in at
least three public places in the locality
where the property is to be sold. In the
event that the public auction fails,
the property may be sold at a
private sale at such price as may
be fixed by the same committee or
body concerned and approved by
the Commission."
It is only when the public auction fails
that a negotiated sale is allowed, in
which case the Commission on Audit
must approve the selling price. 90 The
Commission on Audit implements
Section 79 of the Government Auditing
Code through Circular No. 8929691 dated January 27, 1989. This
circular emphasizes that government
assets must be disposed of only through
public auction, and a negotiated sale can
be resorted to only in case of "failure of
public auction."
At the public auction sale, only
Philippine citizens are qualified to bid
for PEA's reclaimed foreshore and

submerged alienable lands of the public

domain. Private corporations are barred
from bidding at the auction sale of any
kind of alienable land of the public
domain.
PEA originally scheduled a public
bidding for the Freedom Islands on
December 10, 1991. PEA imposed a
condition that the winning bidder
should reclaim another 250 hectares of
submerged areas to regularize the shape
of the Freedom Islands, under a 60-40
sharing of the additional reclaimed
areas in favor of the winning
bidder.92 No one, however, submitted a
bid. On December 23, 1994, the
Government Corporate Counsel advised
PEA it could sell the Freedom Islands
through negotiation, without need of
another public bidding, because of the
failure of the public bidding on
December 10, 1991.93
However, the original JVA dated April
25, 1995 covered not only the Freedom
Islands and the additional 250 hectares
still to be reclaimed, it also granted an
option to AMARI to reclaim another 350
hectares. The original JVA, a negotiated
contract, enlarged the reclamation area
to 750 hectares.94 The failure of public
bidding on December 10, 1991, involving
only 407.84 hectares,95 is not a valid
justification for a negotiated sale of 750
hectares, almost double the area
publicly auctioned. Besides, the failure
of public bidding happened on
December 10, 1991, more than three
years before the signing of the original
JVA on April 25, 1995. The economic
situation in the country had greatly
improved during the intervening period.
Reclamation under the BOT Law
and the Local Government Code
The constitutional prohibition in Section
3, Article XII of the 1987 Constitution is
absolute and clear: "Private corporations
or associations may not hold such

alienable lands of the public domain

except by lease, x x x." Even Republic
Act No. 6957 ("BOT Law," for brevity),
cited by PEA and AMARI as legislative
authority to sell reclaimed lands to
private
parties,
recognizes
the
constitutional ban. Section 6 of RA No.
6957 states
"Sec. 6. Repayment Scheme. - For the
financing, construction, operation and
maintenance of any infrastructure
projects undertaken through the buildoperate-and-transfer arrangement or
any of its variations pursuant to the
provisions of this Act, the project
proponent x x x may likewise be repaid
in the form of a share in the revenue of
the project or other non-monetary
payments, such as, but not limited to,
the grant of a portion or percentage of
the reclaimed land, subject to the
constitutional requirements with
respect to the ownership of the
land: x x x." (Emphasis supplied)
A private corporation, even one that
undertakes the physical reclamation of a
government BOT project, cannot acquire
reclaimed alienable lands of the public
domain in view of the constitutional
ban.
Section 302 of the Local Government
Code, also mentioned by PEA and
AMARI, authorizes local governments in
land reclamation projects to pay the
contractor or developer in kind
consisting of a percentage of the
reclaimed land, to wit:
"Section 302. Financing, Construction,
Maintenance,
Operation,
and
Management of Infrastructure Projects
by the Private Sector. x x x
xxx
In case of land reclamation or
construction of industrial estates, the
repayment plan may consist of the grant
of a portion or percentage of the

reclaimed land or the industrial estate

constructed."
Although Section 302 of the Local
Government Code does not contain a
proviso similar to that of the BOT Law,
the constitutional restrictions on land
ownership automatically apply even
though not expressly mentioned in the
Local Government Code.
Thus, under either the BOT Law or the
Local Government Code, the contractor
or developer, if a corporate entity, can
only be paid with leaseholds on portions
of the reclaimed land. If the contractor
or developer is an individual, portions of
the reclaimed land, not exceeding 12
hectares96 of non-agricultural lands, may
be conveyed to him in ownership in view
of the legislative authority allowing such
conveyance. This is the only way these
provisions of the BOT Law and the Local
Government Code can avoid a direct
collision with Section 3, Article XII of
the 1987 Constitution.
Registration of lands of the public
domain
Finally, PEA theorizes that the "act of
conveying the ownership of the
reclaimed lands to public respondent
PEA transformed such lands of the
public domain to private lands." This
theory is echoed by AMARI which
maintains that the "issuance of the
special patent leading to the eventual
issuance of title takes the subject land
away from the land of public domain
and converts the property into
patrimonial or private property." In
short, PEA and AMARI contend that
with the issuance of Special Patent No.
3517 and the corresponding certificates
of titles, the 157.84 hectares comprising
the Freedom Islands have become
private lands of PEA. In support of their
theory, PEA and AMARI cite the
following rulings of the Court:

1. Sumail v. Judge of CFI of

Cotabato,97 where the Court held
"Once the patent was granted and the
corresponding certificate of title was
issued, the land ceased to be part of the
public domain and became private
property over which the Director of
Lands has neither control nor
jurisdiction."
2. Lee Hong Hok v. David,98 where the
Court declared "After the registration and issuance of
the certificate and duplicate certificate
of title based on a public land patent, the
land covered thereby automatically
comes under the operation of Republic
Act 496 subject to all the safeguards
provided therein."3. Heirs of Gregorio
Tengco
v.
Heirs
of
Jose
Aliwalas,99 where the Court ruled "While the Director of Lands has the
power to review homestead patents, he
may do so only so long as the land
remains part of the public domain and
continues to be under his exclusive
control; but once the patent is registered
and a certificate of title is issued, the
land ceases to be part of the public
domain and becomes private property
over which the Director of Lands has
neither control nor jurisdiction."
4. Manalo v. Intermediate Appellate
Court,100 where the Court held
"When the lots in dispute were certified
as disposable on May 19, 1971, and free
patents were issued covering the same in
favor of the private respondents, the
said lots ceased to be part of the public
domain and, therefore, the Director of
Lands lost jurisdiction over the same."
5.Republic v. Court of Appeals,101 where
the Court stated
"Proclamation No. 350, dated October 9,
1956, of President Magsaysay legally
effected a land grant to the Mindanao
Medical Center, Bureau of Medical
Services, Department of Health, of the

whole lot, validly sufficient for initial

registration under the Land Registration
Act. Such land grant is constitutive of a
'fee simple' title or absolute title in favor
of petitioner Mindanao Medical Center.
Thus, Section 122 of the Act, which
governs the registration of grants or
patents involving public lands, provides
that 'Whenever public lands in the
Philippine Islands belonging to the
Government of the United States or to
the Government of the Philippines are
alienated, granted or conveyed to
persons or to public or private
corporations, the same shall be brought
forthwith under the operation of this Act
(Land Registration Act, Act 496) and
shall become registered lands.'"
The first four cases cited involve
petitions to cancel the land patents and
the corresponding certificates
of
titlesissued to private parties. These
four cases uniformly hold that the
Director of Lands has no jurisdiction
over private lands or that upon issuance
of the certificate of title the land
automatically comes under the Torrens
System. The fifth case cited involves the
registration under the Torrens System of
a 12.8-hectare public land granted by
the National Government to Mindanao
Medical Center, a government unit
under the Department of Health. The
National Government transferred the
12.8-hectare public land to serve as the
site for the hospital buildings and other
facilities of Mindanao Medical Center,
which performed a public service. The
Court affirmed the registration of the
12.8-hectare public land in the name of
Mindanao Medical Center under Section
122 of Act No. 496. This fifth case is an
example of a public land being
registered under Act No. 496 without
the land losing its character as a
property of public dominion.

In the instant case, the only patent and

certificates of title issued are those in the
name of PEA, a wholly government
owned corporation performing public as
well as proprietary functions. No patent
or certificate of title has been issued to
any private party. No one is asking the
Director of Lands to cancel PEA's patent
or certificates of title. In fact, the thrust
of the instant petition is that PEA's
certificates of title should remain with
PEA, and the land covered by these
certificates, being alienable lands of the
public domain, should not be sold to a
private corporation.
Registration of land under Act No. 496
or PD No. 1529 does not vest in the
registrant private or public ownership of
the land. Registration is not a mode of
acquiring ownership but is merely
evidence of ownership previously
conferred by any of the recognized
modes
of
acquiring
ownership.
Registration does not give the registrant
a better right than what the registrant
had prior to the registration.102 The
registration of lands of the public
domain under the Torrens system, by
itself, cannot convert public lands into
private lands.103
Jurisprudence holding that upon the
grant of the patent or issuance of the
certificate of title the alienable land of
the public domain automatically
becomes private land cannot apply to
government units and entities like PEA.
The transfer of the Freedom Islands to
PEA was made subject to the provisions
of CA No. 141 as expressly stated in
Special Patent No. 3517 issued by then
President Aquino, to wit:
"NOW, THEREFORE, KNOW YE, that
by authority of the Constitution of the
Philippines and in conformity with the
provisions of Presidential Decree No.
1084,
supplemented
by
Commonwealth Act No. 141, as

amended, there are hereby granted

and conveyed unto the Public Estates
Authority the aforesaid tracts of land
containing a total area of one million
nine hundred fifteen thousand eight
hundred ninety four (1,915,894) square
meters; the technical description of
which are hereto attached and made an
integral
part
hereof."
(Emphasis
supplied)
Thus, the provisions of CA No. 141 apply
to the Freedom Islands on matters not
covered by PD No. 1084. Section 60 of
CA No. 141 prohibits, "except when
authorized by Congress," the sale of
alienable lands of the public domain that
are transferred to government units or
entities. Section 60 of CA No. 141
constitutes, under Section 44 of PD No.
1529, a "statutory lien affecting title" of
the registered land even if not annotated
on the certificate of title.104 Alienable
lands of the public domain held by
government entities under Section 60 of
CA No. 141 remain public lands because
they cannot be alienated or encumbered
unless
Congress
passes
a
law
authorizing their disposition. Congress,
however, cannot authorize the sale to
private corporations of reclaimed
alienable lands of the public domain
because of the constitutional ban. Only
individuals can benefit from such law.
The grant of legislative authority to sell
public lands in accordance with Section
60 of CA No. 141 does not automatically
convert alienable lands of the public
domain into private or patrimonial
lands. The alienable lands of the public
domain must be transferred to qualified
private parties, or to government
entities not tasked to dispose of public
lands, before these lands can become
private or patrimonial lands. Otherwise,
the constitutional ban will become
illusory if Congress can declare lands of
the public domain as private or

patrimonial lands in the hands of a

government agency tasked to dispose of
public lands. This will allow private
corporations to acquire directly from
government agencies limitless areas of
lands which, prior to such law, are
concededly public lands.
Under EO No. 525, PEA became
the central
implementing
agency of the National Government to
reclaim foreshore and submerged areas
of the public domain. Thus, EO No. 525
declares that
"EXECUTIVE ORDER NO. 525
Designating the Public Estates Authority
as the Agency Primarily Responsible for
all Reclamation Projects
Whereas, there are several reclamation
projects which are ongoing or being
proposed to be undertaken in various
parts of the country which need to be
evaluated for consistency with national
programs;
Whereas, there is a need to give further
institutional
support
to
the
Government's declared policy to provide
for a coordinated, economical and
efficient reclamation of lands;
Whereas, Presidential Decree No. 3-A
requires that all reclamation of areas
shall be limited to the National
Government or any person authorized
by it under proper contract;
Whereas, a central authority is
needed to act on behalf of the
National Government which shall
ensure
a
coordinated
and
integrated
approach
in
the
reclamation of lands;
Whereas, Presidential Decree No.
1084 creates the Public Estates
Authority
as
a
government
corporation
to
undertake
reclamation of lands and ensure
their maximum utilization in
promoting public welfare and
interests; and

Whereas, Presidential Decree No. 1416

provides the President with continuing
authority to reorganize the national
government including the transfer,
abolition, or merger of functions and
offices.
NOW, THEREFORE, I, FERDINAND E.
MARCOS, President of the Philippines,
by virtue of the powers vested in me by
the Constitution and pursuant to
Presidential Decree No. 1416, do hereby
order and direct the following:
Section
1. The
Public
Estates
Authority
(PEA)
shall
be
primarily
responsible
for
integrating,
directing,
and
coordinating
all
reclamation
projects for and on behalf of the
National
Government.
All
reclamation projects shall be approved
by the President upon recommendation
of the PEA, and shall be undertaken by
the PEA or through a proper contract
executed by it with any person or entity;
Provided, that, reclamation projects of
any national government agency or
entity authorized under its charter shall
be undertaken in consultation with the
PEA upon approval of the President.
x x x ."
As the central implementing agency
tasked to undertake reclamation
projects nationwide, with authority to
sell reclaimed lands, PEA took the place
of DENR as the government agency
charged with leasing or selling reclaimed
lands of the public domain. The
reclaimed lands being leased or sold by
PEA are not private lands, in the same
manner that DENR, when it disposes of
other alienable lands, does not dispose
of private lands but alienable lands of
the public domain. Only when qualified
private parties acquire these lands will
the lands become private lands. In the
hands of the government agency
tasked and authorized to dispose

of alienable of disposable lands of

the public domain, these lands are
still public, not private lands.
Furthermore, PEA's charter expressly
states that PEA "shall hold lands of
the public domain" as well as "any
and all kinds of lands." PEA can hold
both lands of the public domain and
private lands. Thus, the mere fact that
alienable lands of the public domain like
the Freedom Islands are transferred to
PEA and issued land patents or
certificates of title in PEA's name does
not automatically make such lands
private.
To allow vast areas of reclaimed lands of
the public domain to be transferred to
PEA as private lands will sanction a
gross violation of the constitutional ban
on private corporations from acquiring
any kind of alienable land of the public
domain. PEA will simply turn
around, as PEA has now done
under the Amended JVA, and
transfer several hundreds of hectares of
these reclaimed and still to be reclaimed
lands to a single private corporation in
only one transaction. This scheme will
effectively nullify the constitutional ban
in Section 3, Article XII of the 1987
Constitution which was intended to
diffuse equitably the ownership of
alienable lands of the public domain
among Filipinos, now numbering over
80 million strong.
This scheme, if allowed, can even be
applied to alienable agricultural lands of
the public domain since PEA can
"acquire x x x any and all kinds of
lands." This will open the floodgates to
corporations and even individuals
acquiring hundreds of hectares of
alienable lands of the public domain
under the guise that in the hands of PEA
these lands are private lands. This will
result in corporations amassing huge
landholdings never before seen in this

country - creating the very evil that the

constitutional ban was designed to
prevent. This will completely reverse the
clear
direction
of
constitutional
development in this country. The 1935
Constitution
allowed
private
corporations to acquire not more than
1,024 hectares of public lands. 105 The
1973 Constitution prohibited private
corporations from acquiring any kind of
public land, and the 1987 Constitution
has unequivocally reiterated this
prohibition.
The contention of PEA and AMARI that
public lands, once registered under Act
No. 496 or PD No. 1529, automatically
become private lands is contrary to
existing laws. Several laws authorize
lands of the public domain to be
registered under the Torrens System or
Act No. 496, now PD No. 1529, without
losing their character as public lands.
Section 122 of Act No. 496, and Section
103 of PD No. 1529, respectively,
provide as follows:
Act No. 496
"Sec. 122. Whenever public lands in the
Philippine Islands belonging to the x x x
Government of the Philippine Islands
are alienated, granted, or conveyed to
persons or the public or private
corporations, the same shall be
brought forthwith under the operation
of this Act and shall become registered
lands."
PD No. 1529
"Sec. 103. Certificate of Title to Patents.
Whenever public land is by the
Government alienated, granted or
conveyed to any person, the same
shall be brought forthwith under the
operation of this Decree." (Emphasis
supplied)
Based on its legislative history, the
phrase "conveyed to any person" in
Section 103 of PD No. 1529 includes

conveyances of public lands to public

corporations.
Alienable lands of the public domain
"granted, donated, or transferred to a
province, municipality, or branch or
subdivision of the Government," as
provided in Section 60 of CA No. 141,
may be registered under the Torrens
System pursuant to Section 103 of PD
No. 1529. Such registration, however, is
expressly subject to the condition in
Section 60 of CA No. 141 that the land
"shall not be alienated, encumbered or
otherwise disposed of in a manner
affecting its title, except when
authorized by Congress." This
provision
refers
to
government
reclaimed, foreshore and marshy lands
of the public domain that have been
titled but still cannot be alienated or
encumbered unless expressly authorized
by Congress. The need for legislative
authority prevents the registered land of
the public domain from becoming
private land that can be disposed of to
qualified private parties.
The Revised Administrative Code of
1987 also recognizes that lands of the
public domain may be registered under
the Torrens System. Section 48, Chapter
12, Book I of the Code states
"Sec. 48. Official Authorized to Convey
Real Property. Whenever real property
of the Government is authorized by law
to be conveyed, the deed of conveyance
shall be executed in behalf of the
government by the following:
(1) x x x
(2) For property belonging to the
Republic of the Philippines, but
titled in the name of any political
subdivision or of any corporate
agency or instrumentality, by the
executive head of the agency or
instrumentality." (Emphasis supplied)
Thus, private property purchased by the
National Government for expansion of a

public wharf may be titled in the name

of a government corporation regulating
port operations in the country. Private
property purchased by the National
Government for expansion of an airport
may also be titled in the name of the
government agency tasked to administer
the airport. Private property donated to
a municipality for use as a town plaza or
public school site may likewise be titled
in the name of the municipality.106 All
these properties become properties of
the public domain, and if already
registered under Act No. 496 or PD No.
1529, remain registered land. There is
no requirement or provision in any
existing law for the de-registration of
land from the Torrens System.
Private lands taken by the Government
for public use under its power of
eminent domain become unquestionably
part of the public domain. Nevertheless,
Section 85 of PD No. 1529 authorizes the
Register of Deeds to issue in the name of
the
National
Government
new
certificates of title covering such
expropriated lands. Section 85 of PD No.
1529 states
"Sec. 85. Land taken by eminent
domain. Whenever any registered land,
or interest therein, is expropriated or
taken by eminent domain, the National
Government,
province,
city
or
municipality, or any other agency or
instrumentality exercising such right
shall file for registration in the proper
Registry a certified copy of the judgment
which shall state definitely by an
adequate description, the particular
property or interest expropriated, the
number of the certificate of title, and the
nature
of
the
public
use.
A
memorandum of the right or interest
taken shall be made on each certificate
of title by the Register of Deeds, and
where the fee simple is taken, a new
certificate shall be issued in favor

of the National Government,

province, city, municipality, or any
other
agency
or
instrumentality
exercising such right for the land so
taken. The legal expenses incident to the
memorandum
of
registration
or
issuance of a new certificate of title shall
be for the account of the authority
taking the land or interest therein."
(Emphasis supplied)
Consequently, lands registered under
Act No. 496 or PD No. 1529 are not
exclusively private or patrimonial lands.
Lands of the public domain may also be
registered pursuant to existing laws.
AMARI makes a parting shot that the
Amended JVA is not a sale to AMARI of
the Freedom Islands or of the lands to
be reclaimed from submerged areas of
Manila Bay. In the words of AMARI, the
Amended JVA "is not a sale but a joint
venture
with
a
stipulation
for
reimbursement of the original cost
incurred by PEA for the earlier
reclamation and construction works
performed by the CDCP under its 1973
contract with the Republic." Whether
the Amended JVA is a sale or a joint
venture, the fact remains that the
Amended JVA requires PEA to "cause
the issuance and delivery of the
certificates of title conveying AMARI's
Land Share in the name of AMARI."107
This stipulation still contravenes Section
3, Article XII of the 1987 Constitution
which provides that private corporations
"shall not hold such alienable lands of
the public domain except by lease." The
transfer of title and ownership to
AMARI clearly means that AMARI will
"hold" the reclaimed lands other than by
lease. The transfer of title and
ownership is a "disposition" of the
reclaimed
lands,
a
transaction
considered a sale or alienation under CA
No. 141,108 the Government Auditing

Code,109 and Section 3, Article XII of the

1987 Constitution.
The Regalian doctrine is deeply
implanted in our legal system.
Foreshore and submerged areas form
part of the public domain and are
inalienable. Lands reclaimed from
foreshore and submerged areas also
form part of the public domain and are
also inalienable, unless converted
pursuant to law into alienable or
disposable lands of the public domain.
Historically, lands reclaimed by the
government are sui generis, not
available for sale to private parties
unlike other alienable public lands.
Reclaimed lands retain their inherent
potential as areas for public use or
public service. Alienable lands of the
public domain, increasingly becoming
scarce natural resources, are to be
distributed equitably among our evergrowing population. To insure such
equitable distribution, the 1973 and
1987 Constitutions have barred private
corporations from acquiring any kind of
alienable land of the public domain.
Those who attempt to dispose of
inalienable natural resources of the
State, or seek to circumvent the
constitutional ban on alienation of lands
of the public domain to private
corporations, do so at their own risk.
We can now summarize our conclusions
as follows:
1. The 157.84 hectares of reclaimed
lands comprising the Freedom Islands,
now covered by certificates of title in the
name of PEA, are alienable lands of
the public domain. PEA may lease
these lands to private corporations but
may not sell or transfer ownership of
these lands to private corporations. PEA
may only sell these lands to Philippine
citizens, subject to the ownership
limitations in the 1987 Constitution and
existing laws.

2. The 592.15 hectares of submerged

areas of Manila Bay remain inalienable
natural resources of the public domain
until classified as alienable or disposable
lands open to disposition and declared
no longer needed for public service. The
government
can
make
such
classification and declaration only after
PEA has reclaimed these submerged
areas. Only then can these lands qualify
as agricultural lands of the public
domain, which are the only natural
resources the government can alienate.
In their present state, the 592.15
hectares of submerged areas are
inalienable
and outside
the
commerce of man.
3. Since the Amended JVA seeks to
transfer
to
AMARI,
a
private
corporation,
ownership
of
77.34
hectares110 of the Freedom Islands, such
transfer is void for being contrary to
Section 3, Article XII of the 1987
Constitution which prohibits private
corporations from acquiring any kind of
alienable land of the public domain.
4. Since the Amended JVA also seeks to
transfer to AMARI ownership of 290.156
hectares111 of still submerged areas of
Manila Bay, such transfer is void for
being contrary to Section 2, Article XII
of the 1987 Constitution which prohibits
the alienation of natural resources other
than agricultural lands of the public
domain. PEA may reclaim these
submerged areas. Thereafter, the
government can classify the reclaimed
lands as alienable or disposable, and
further declare them no longer needed
for public service. Still, the transfer of
such reclaimed alienable lands of the
public domain to AMARI will be void in
view of Section 3, Article XII of the 1987
Constitution which prohibits private
corporations from acquiring any kind of
alienable land of the public domain.

Clearly, the Amended JVA violates

glaringly Sections 2 and 3, Article XII of
the 1987 Constitution. Under Article
1409112 of the Civil Code, contracts
whose "object or purpose is contrary to
law," or whose "object is outside the
commerce of men," are "inexistent and
void from the beginning." The Court
must perform its duty to defend and
uphold the Constitution, and therefore
declares the Amended JVA null and
void ab initio.
Seventh issue: whether the Court
is the proper forum to raise the
issue of whether the Amended
JVA is grossly disadvantageous to
the government.
Considering that the Amended JVA is
null and void ab initio, there is no
necessity to rule on this last issue.
Besides, the Court is not a trier of facts,
and this last issue involves a
determination of factual matters.
WHEREFORE,
the
petition
is GRANTED. The Public Estates
Authority and Amari Coastal Bay
Development
Corporation
are PERMANENTLY
ENJOINED from implementing the
Amended Joint Venture Agreement
which
is
hereby
declared NULL and VOID ab initio.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Vitug,
Kapunan,
Mendoza,
Panganiban,
Quisumbing,
Ynares-Santiago,
Sandoval-Gutierrez, Austria-Martinez,
and Corona, JJ., concur.
G.R. No. 73002 December 29, 1986
THE
DIRECTOR
OF
LANDS, petitioner,
vs.
INTERMEDIATE
APPELLATE
COURT and ACME PLYWOOD &
VENEER
CO.
INC.,
ETC., respondents.

D. Nacion Law Office for private

respondent.
NARVASA, J.:
The Director of Lands has brought this
appeal by certiorari from a judgment of
the Intermediate Appellate Court
affirming a decision of the Court of First
Instance of Isabela, which ordered
registration in favor of Acme Plywood &
Veneer Co., Inc. of five parcels of land
measuring 481, 390 square meters,
more or less, acquired by it from
Mariano and Acer Infiel, members of the
Dumagat tribe.
The registration proceedings were for
confirmation of title under Section 48 of
Commonwealth Act No. 141 (The Public
Land Act). as amended: and the
appealed judgment sums up the findings
of the trial court in said proceedings in
this wise:
1. That Acme Plywood & Veneer Co. Inc.,
represented by Mr. Rodolfo Nazario is a
corporation
duly
organized
in
accordance with the laws of the Republic
of the Philippines and registered with
the
Securities
and
Exchange
Commission on December 23, 1959;
2. That Acme Plywood & Veneer Co.
Inc., represented by Mr. Rodolfo
Nazario can acquire real properties
pursuant to the provisions of the Articles
of Incorporation particularly on the
provision of its secondary purposes
(paragraph (9), Exhibit 'M-l');
3. That the land subject of the Land
Registration proceeding was ancestrally
acquired by Acme Plywood & Veneer
Co., Inc., on October 29, 1962, from
Mariano Infiel and Acer Infiel, both
members of the Dumagat tribe and as
such are cultural minorities;
4. That the constitution of the Republic
of the Philippines of 1935 is applicable
as the sale took place on October 29,
1962;

5. That the possession of the Infiels over

the land relinquished or sold to Acme
Plywood & Veneer Co., Inc., dates back
before the Philippines was discovered by
Magellan as the ancestors of the Infiels
have possessed and occupied the land
from generation to generation until the
same came into the possession of
Mariano Infiel and Acer Infiel;
6. That the possession of the applicant
Acme Plywood & Veneer Co., Inc., is
continuous, adverse and public from
1962 to the present and tacking the
possession of the Infiels who were
granted from whom the applicant
bought said land on October 29, 1962,
hence the possession is already
considered from time immemorial.
7. That the land sought to be registered
is a private land pursuant to the
provisions of Republic Act No. 3872
granting
absolute
ownership
to
members of the non-Christian Tribes on
land occupied by them or their ancestral
lands, whether with the alienable or
disposable public land or within the
public domain;
8. That applicant Acme Plywood &
Veneer Co. Inc., has introduced more
than
Forty-Five
Million
(P45,000,000.00) Pesos worth of
improvements, said improvements were
seen by the Court during its ocular
investigation of the land sought to be
registered on September 18, 1982;
9. That the ownership and possession of
the land sought to be registered by the
applicant was duly recognized by the
government when the Municipal
Officials of Maconacon, Isabela, have
negotiated for the donation of the
townsite from Acme Plywood & Veneer
Co., Inc., and this negotiation came to
reality when the Board of Directors of
the Acme Plywood & Veneer Co., Inc.,
had donated a part of the land bought by
the Company from the Infiels for the

townsite of Maconacon Isabela (Exh.

'N') on November 15, 1979, and which
donation was accepted by the Municipal
Government of Maconacon, Isabela
(Exh. 'N-l'), during their special session
on November 22, 1979.
The Director of Lands takes no issue
with any of these findings except as to
the applicability of the 1935 Constitution
to the matter at hand. Concerning this,
he asserts that, the registration
proceedings have been commenced only
on July 17, 1981, or long after the 1973
Constitution had gone into effect, the
latter is the correctly applicable law; and
since section 11 of its Article XIV
prohibits private corporations or
associations from holding alienable
lands of the public domain, except by
lease not to exceed 1,000 hectares (a
prohibition not found in the 1935
Constitution which was in force in 1962
when Acme purchased the lands in
question from the Infiels), it was
reversible error to decree registration in
favor of Acme Section 48, paragraphs
(b) and (c), of Commonwealth Act No.
141, as amended, reads:
SEC. 48. The following described
citizens of the Philippines, occupying
lands of the public domain or claiming
to own any such lands or an interest
therein, but whose titles have not been
perfected or completed, may apply to
the Court of First Instance of the
province where the land is located for
confirmation of their claims, and the
issuance of a certificate of title therefor,
under the Land Registration Act, to wit:
xxx xxx xxx
(b) Those who by themselves or through
their predecessors-in-interest have been
in open, continuous, exclusive and
notorious possession and occupation of
agricultural lands of the public domain,
under a bona fide claim of acquisition or
ownership, for at least thirty years

immediately preceding the filing of the

application for confirmation of title
except when prevented by war or force
majeure. These shall be conclusively
presumed to have performed all the
conditions essential to a Government
grant and shall be entitled to a
certificate of title under the provisions of
this chapter.
(c) Members of the National Cultural
minorities who by themselves or
through their predecessors-in-interest
have been in open. continuous, exclusive
and
notorious
possession
and
occupation of lands of the public domain
suitable
to
agriculture,
whether
disposable or not, under a bona fide
claim of ownership for at least 30 years
shall be entitled to the rights granted in
subsection (b) hereof.
The Petition for Review does not
dispute-indeed, in view of the quoted
findings of the trial court which were
cited and affirmed by the Intermediate
Appellate Court, it can no longer
controvert before this Court-the fact that
Mariano and Acer Infiel, from whom
Acme purchased the lands in question
on October 29, 1962, are members of the
national cultural minorities who had, by
themselves
and
through
their
progenitors, possessed and occupied
those lands since time immemorial, or
for more than the required 30-year
period and were, by reason thereof,
entitled to exercise the right granted in
Section 48 of the Public Land Act to
have their title judicially confirmed. Nor
is there any pretension that Acme, as the
successor-in-interest of the Infiels, is
disqualified to acquire and register
ownership of said lands under any
provisions of the 1973 Constitution
other than Section 11 of its Article XIV
already referred to.
Given the foregoing, the question before
this Court is whether or not the title that

the Infiels had transferred to Acme in

1962 could be confirmed in favor of the
latter in proceedings instituted by it in
1981 when the 1973 Constitution was
already in effect, having in mind the
prohibition therein against private
corporations holding lands of the public
domain except in lease not exceeding
1,000 hectares.
The
question
turns
upon
a
determination of the character of the
lands at the time of institution of the
registration proceedings in 1981. If they
were then still part of the public domain,
it must be answered in the negative. If,
on the other hand, they were then
already private lands, the constitutional
prohibition against their acquisition by
private corporations or associations
obviously does not apply.
In this regard, attention has been invited
to Manila Electric Company vs. CastroBartolome, et al, 1 where a similar set of
facts prevailed. In that case, Manila
Electric
Company,
a
domestic
corporation more than 60% of the
capital stock of which is Filipino-owned,
had purchased in 1947 two lots in Tanay,
Rizal from the Piguing spouses. The lots
had been possessed by the vendors and,
before them, by their predecessor-ininterest, Olimpia Ramos, since prior to
the outbreak of the Pacific War in 1941.
On December 1, 1976, Meralco applied
to the Court of First Instance of Rizal,
Makati Branch, for confirmation of title
to said lots. The court, assuming that the
lots were public land, dismissed the
application on the ground that Meralco,
a juridical person, was not qualified to
apply for registration under Section
48(b) of the Public Land Act which
allows only Filipino citizens or natural
persons
to
apply
for
judicial
confirmation of imperfect titles to public
land. Meralco appealed, and a majority

of this Court upheld the dismissal. It

was held that:
..., the said land is still public land. It
would cease to be public land only upon
the issuance of the certificate of title to
any Filipino citizen claiming it under
section 48(b). Because it is still public
land and the Meralco, as a juridical
person, is disqualified to apply for its
registration under section 48(b),
Meralco's application cannot be given
due course or has to be dismissed.
Finally, it may be observed that the
constitutional prohibition makes no
distinction between (on the one hand)
alienable agricultural public lands as to
which no occupant has an imperfect title
and (on the other hand) alienable lands
of the public domain as to which an
occupant has on imperfect title subject
to judicial confirmation.
Since section 11 of Article XIV does not
distinguish, we should not make any
distinction
or
qualification.
The
prohibition applies to alienable public
lands as to which a Torrens title may be
secured under section 48(b). The
proceeding
under
section
48(b)
'presupposes that the land is public'
(Mindanao vs. Director of Lands, L19535, July 30, 1967, 20 SCRA 641,
644).
The present Chief Justice entered a
vigorous dissent, tracing the line of
cases
beginning
with Carino in
1909 2thru Susi in
1925 3 down
4
to Herico in 1980, which developed,
affirmed and reaffirmed the doctrine
that open, exclusive and undisputed
possession of alienable public land for
the period prescribed by law creates the
legal fiction whereby the land, upon
completion of the requisite period ipso
jure and without the need of judicial or
other sanction, ceases to be public land
and becomes private property. That said
dissent expressed what is the better

and, indeed, the correct, view-becomes

evident from a consideration of some of
the principal rulings cited therein,
The main theme was given birth, so to
speak,
in Carino involving
the
Decree/Regulations of June 25, 1880 for
adjustment of royal lands wrongfully
occupied by private individuals in the
Philippine Islands. It was ruled that:
It is true that the language of articles 4
and 5 5 attributes title to those 'who may
prove' possession for the necessary time
and we do not overlook the argument
that this means may prove in
registration proceedings. It may be that
an English conveyancer would have
recommended an application under the
foregoing decree, but certainly it was not
calculated to convey to the mind of an
Igorot chief the notion that ancient
family possessions were in danger, if he
had read every word of it. The words
'may prove' (acrediten) as well or better,
in view of the other provisions, might be
taken to mean when called upon to do so
in any litigation. There are indications
that registration was expected from all
but none sufficient to show that, for
want of it, ownership actually gained
would be lost. The effect of the proof,
wherever made, was not to confer title,
but simply to establish it, as already
conferred by the decree, if not by earlier
law. ...
That ruling assumed a more doctrinal
character because expressed in more
categorical language, in Susi:
.... In favor of Valentin Susi, there is,
moreover, the presumption juris et de
jure established in paragraph (b) of
section 45 of Act No. 2874, amending
Act No. 926, that all the necessary
requirements for a grant by the
Government were complied with, for he
has been in actual and physical
possession, personally and through his
predecessors, of an agricultural land of

the public domain openly, continuously,

exclusively and publicly since July 26,
1984, with a right to a certificate of title
to said land under the provisions of
Chapter VIII of said Act. So that when
Angela Razon applied for the grant in
her favor, Valentin Susi had already
acquired, by operation of law not only
a right to a grant, but a grant of the
Government, for it is not necessary that
a certificate of title should be issued in
order that said grant may be
sanctioned
by
the
courts,
an
application therefore is sufficient, under
the provisions of section 47 of Act No.
2874. If by a legal fiction, Valentin Susi
had acquired the land in question by a
grant of the State, it had already ceased
to be of the public domain and had
become private property, at least by
presumption, of Valentin Susi, beyond
the control of the Director of Lands.
Consequently, in selling the land in
question of Angela Razon, the Director
of Lands disposed of a land over which
he had no longer any title or control, and
the sale thus made was void and of no
effect, and Angela Razon did not thereby
acquire any right. 6
Succeeding cases, of which only some
need be mentioned, likeof Lacaste vs.
Director of Lands, 7 Mesina vs. Vda. de
Sonza, 8 Manarpac
vs.
Cabanatuan, 9 Miguel vs. Court of
Appeals 10 and Herico vs. Dar, supra, by
invoking and affirming the Susi doctrine
have firmly rooted it in jurisprudence.
Herico, in particular, appears to be
squarely affirmative: 11
.... Secondly, under the provisions of
Republic Act No. 1942, which the
respondent Court held to be inapplicable
to the petitioner's case, with the latter's
proven occupation and cultivation for
more than 30 years since 1914, by
himself and by his predecessors-ininterest, title over the land has vested

on petitioner so as to segregate the land

from
the
mass
of
public
land. Thereafter, it is no longer
disposable under the Public Land Act as
by free patent. ....
xxx xxx xxx
As interpreted in several cases, when the
conditions as specified in the foregoing
provision are complied with, the
possessor
is
deemed
to
have
acquired, by operation of law, a right to
a grant, a government grant, without the
necessity of a certificate of title being
issued. The land, therefore, ceases to be
of the public domain and beyond the
authority of the Director of Lands to
dispose
of. The
application
for
confirmation is mere formality, the lack
of which does not affect the legal
sufficiency of the title as would be
evidenced by the patent and the
Torrens title to be issued upon the
strength of said patent. 12
Nothing can more clearly demonstrate
the logical inevitability of considering
possession of public land which is of the
character and duration prescribed by
statute as the equivalent of an express
grant from the State than the dictum of
the statute itself 13 that the possessor(s)
"... shall be conclusively presumed to
have performed all the conditions
essential to a Government grant and
shall be entitled to a certificate of title ....
" No proof being admissible to overcome
a conclusive presumption, confirmation
proceedings would, in truth be little
more than a formality, at the most
limited to ascertaining whether the
possession claimed is of the required
character and length of time; and
registration thereunder would not
confer title, but simply recognize a title
already vested. The proceedings would
not originally convert the land from
public to private land, but only confirm
such a conversion already affected by

operation of law from the moment the

required period of possession became
complete. As was so well put
in Carino, "... (T)here are indications
that registration was expected from all,
but none sufficient to show that, for
want of it, ownership actually gained
would be lost. The effect of the proof,
wherever made, was not to confer title,
but simply to establish it, as already
conferred by the decree, if not by earlier
law."
If it is accepted-as it must be-that the
land was already private land to which
the Infiels had a legally sufficient and
transferable title on October 29, 1962
when Acme acquired it from said
owners, it must also be conceded that
Acme had a perfect right to make such
acquisition, there being nothing in the
1935 Constitution then in force (or, for
that matter, in the 1973 Constitution
which came into effect later) prohibiting
corporations from acquiring and owning
private lands.
Even on the proposition that the land
remained technically "public" land,
despite immemorial possession of the
Infiels and their ancestors, until title in
their favor was actually confirmed in
appropriate proceedings under the
Public Land Act, there can be no serious
question of Acmes right to acquire the
land at the time it did, there also being
nothing in the 1935 Constitution that
might be construed to prohibit
corporations from purchasing or
acquiring interests in public land to
which the vendor had already acquired
that type of so-called "incomplete" or
"imperfect" title. The only limitation
then extant was that corporations could
not acquire, hold or lease public
agricultural lands in excess of 1,024
hectares.
The
purely
accidental
circumstance
that
confirmation
proceedings were brought under the

aegis of the 1973 Constitution which

forbids corporations from owning lands
of the public domain cannot defeat a
right already vested before that law
came into effect, or invalidate
transactions then perfectly valid and
proper. This Court has already held, in
analogous circumstances, that the
Constitution cannot impair vested
rights.
We hold that the said constitutional
prohibition 14 has
no
retroactive
application to the sales application of
Binan Development Co., Inc. because it
had already acquired a vested right to
the land applied for at the time the 1973
Constitution took effect.
That vested right has to be respected. It
could not be abrogated by the new
Constitution. Section 2, Article XIII of
the 1935 Constitution allows private
corporations
to
purchase
public
agricultural lands not exceeding one
thousand and twenty-four hectares.
Petitioner' prohibition action is barred
by the doctrine of vested rights in
constitutional law.
xxx xxx xxx
The due process clause prohibits the
annihilation of vested rights. 'A state
may not impair vested rights by
legislative enactment, by the enactment
or by the subsequent repeal of a
municipal ordinance, or by a change in
the constitution of the State, except in a
legitimate exercise of the police
power'(16 C.J.S. 1177-78).
xxx xxx xxx
In the instant case, it is incontestable
that prior to the effectivity of the 1973
Constitution the right of the corporation
to purchase the land in question had
become fixed and established and was
no longer open to doubt or controversy.
Its compliance with the requirements of
the Public Land Law for the issuance of
a patent had the effect of segregating the

said land from the public domain. The

corporation's right to obtain a patent for
the land is protected by law. It cannot be
deprived of that right without due
process (Director of Lands vs. CA, 123
Phil. 919).<re||an1w> 15
The
fact,
therefore,
that
the
confirmation
proceedings
were
instituted by Acme in its own name
must be regarded as simply another
accidental circumstance, productive of a
defect hardly more than procedural and
in nowise affecting the substance and
merits of the right of ownership sought
to be confirmed in said proceedings,
there being no doubt of Acme's
entitlement to the land. As it is
unquestionable that in the light of the
undisputed facts, the Infiels, under
either the 1935 or the 1973 Constitution,
could have had title in themselves
confirmed and registered, only a rigid
subservience to the letter of the law
would deny the same benefit to their
lawful successor-in-interest by valid
conveyance
which
violates
no
constitutional mandate.
The Court, in the light of the foregoing,
is of the view, and so holds, that the
majority ruling in Meralco must be
reconsidered and no longer deemed to
be binding precedent. The correct rule,
as enunciated in the line of cases already
referred to, is that alienable public land
held by a possessor, personally or
through his predecessors-in-interest,
openly, continuously and exclusively for
the prescribed statutory period (30
years under The Public Land Act, as
amended) is converted to private
property by the mere lapse or
completion of said period, ipso jure.
Following that rule and on the basis of
the undisputed facts, the land subject of
this appeal was already private property
at the time it was acquired from the
Infiels by Acme. Acme thereby acquired

a registrable title, there being at the time

no prohibition against said corporation's
holding or owning private land. The
objection that, as a juridical person,
Acme is not qualified to apply for
judicial confirmation of title under
section 48(b) of the Public Land Act is
technical, rather than substantial and,
again, finds its answer in the dissent
in Meralco:
6. To uphold respondent judge's denial
of Meralco's application on the
technicality that the Public Land Act
allows only citizens of the Philippines
who are natural persons to apply for
confirmation of their title would be
impractical and would just give rise to
multiplicity of court actions. Assuming
that there was a technical error not
having filed the application for
registration in the name of the Piguing
spouses as the original owners and
vendors, still it is conceded that there is
no prohibition against their sale of the
land to the applicant Meralco and
neither is there any prohibition against
the application being refiled with
retroactive effect in the name of the
original owners and vendors (as such
natural persons) with the end result of
their application being granted, because
of their indisputable acquisition of
ownership by operation of law and the
conclusive
presumption
therein
provided in their favor. It should not be
necessary to go through all the rituals at
the great cost of refiling of all such
applications in their names and adding
to the overcrowded court dockets when
the Court can after all these years
dispose of it here and now. (See
Francisco vs. City of Davao)
The ends of justice would best be served,
therefore,
by
considering
the
applications
for
confirmation
as
amended to conform to the evidence, i.e.
as filed in the names of the original

persons who as natural persons are duly

qualified
to
apply
for
formal
confirmation of the title that they had
acquired by conclusive presumption and
mandate of the Public Land Act and who
thereafter duly sold to the herein
corporations (both admittedly Filipino
corporations duly qualified to hold and
own private lands) and granting the
applications for confirmation of title to
the private lands so acquired and sold or
exchanged.
There is also nothing to prevent Acme
from reconveying the lands to the Infiels
and the latter from themselves applying
for confirmation of title and, after
issuance of the certificate/s of title in
their names, deeding the lands back to
Acme. But this would be merely
indulging in empty charades, whereas
the same result is more efficaciously and
speedily obtained, with no prejudice to
anyone, by a liberal application of the
rule on amendment to conform to the
evidence suggested in the dissent
in Meralco.
While this opinion seemingly reverses
an earlier ruling of comparatively recent
vintage, in a real sense, it breaks no
precedent, but only reaffirms and reestablished, as it were, doctrines the
soundness of which has passed the test
of searching examination and inquiry in
many past cases. Indeed, it is worth
noting that the majority opinion, as well
as the concurring opinions of Chief
Justice Fernando and Justice Abad
Santos, in Meralco rested chiefly on the
proposition that the petitioner therein, a
juridical person, was disqualified from
applying for confirmation of an
imperfect title to public land under
Section 48(b) of the Public Land Act.
Reference to the 1973 Constitution and
its Article XIV, Section 11, was only
tangential limited to a brief paragraph in
the main opinion, and may, in that

context,
be
considered
as
essentially obiter. Meralco, in short,
decided no constitutional question.
WHEREFORE, there being no reversible
error in the appealed judgment of the
Intermediate Appellate Court, the same
is hereby affirmed, without costs in this
instance.
SO ORDERED.
Feria, Yap, Fernan, Alampay, Cruz,
Paras and Feliciano, JJ., concur.
G.R. No. 171514
July 18,
2012
REPUBLIC
OF
THE
PHILIPPINES, Petitioner,
vs.
DOMINGO ESPINOSA, Respondent.
DECISION
REYES, J.:
This is a petition for review on certiorari
from the Decision1 dated November 11,
2004 and Resolution2 dated February
13, 2006 of the Court of Appeals in CAG.R. CV No. 72456.
On March 3, 1999, respondent Domingo
Espinosa (Espinosa) tiled with the
Municipal Trial Court (MTC) of
Consolacion, Cebu an application3 for
land registration covering a parcel of
land with an area of 5,525 square meters
and situated in Barangay Cabangahan,
Consolacion, Cebu. In support of his
application, which was docketed as LRC
Case No. N-81, Espinosa alleged that:
(a) the property, which is more
particularly known as Lot No. 8499 of
Cad. 545-D (New), is alienable and
disposable; (b) he purchased the
property from his mother, Isabel
Espinosa (Isabel), on July 4, 1970 and
the latters other heirs had waived their
rights thereto; and (c) he and his
predecessor-in-interest had been in
possession of the property in the
concept of an owner for more than thirty
(30) years.

Espinosa submitted the blueprint of

Advanced Survey Plan 07-0008934 to
prove the identity of the land. As proof
that the property is alienable and
disposable, he marked as evidence the
annotation on the advance survey plan
made by Cynthia L. Ibaez, Chief of the
Map Projection Section, stating that
"CONFORMED
PER
L.C.
MAP
NOTATION L.C. Map No. 2545 Project
No. 28 certified on June 25, 1963,
verified to be within Alienable &
Disposable
Area".5 Espinosa
also
presented two (2) tax declarations for
the years 1965 and 1974 in Isabels name
Tax Declaration Nos. 013516 and
06137 to prove that she had been in
possession of the property since 1965.
To support his claim that he had been
religiously paying the taxes due on the
property,
Espinosa
presented
a
Certification6 dated December 1, 1998
issued by the Office of the Treasurer of
Consolacion, Cebu and three (3) tax
declarations for the years 1978, 1980
and 1985 Tax Declaration Nos. 14010,
17681 and 010717.8
Petitioner
opposed
Espinosas
application, claiming that: (a) Section
48(b) of Commonwealth Act No. 141
otherwise known as the "Public Land
Act" (PLA) had not been complied with
as Espinosas predecessor-in-interest
possessed the property only after June
12, 1945; and (b) the tax declarations do
not prove that his possession and that of
his predecessor-in-interest are in the
character and for the length of time
required by law.
On August 18, 2000, the MTC rendered
a
Judgment9 granting
Espinosas
petition for registration, the dispositive
portion of which states:
WHEREFORE, and in view of all the
foregoing, judgment is hereby rendered
ordering for the registration and the
confirmation of title of Espinosa over

Lot No. 8499, Cad 545-D (New),

situated at Barangay Cabangahan,
Consolacion,
Cebu,
Philippines,
containing an area of 5,525 square
meters and that upon the finality of this
decision, let a corresponding decree of
registration be issued in favor of the
herein applicant in accordance with
Section 39, P.D. 1529.
SO ORDERED.10
According to the MTC, Espinosa was
able to prove that the property is
alienable and disposable and that he
complied with the requirements of
Section 14(1) of Presidential Decree
(P.D.) No. 1529. Specifically:
After a careful consideration of the
evidence presented in the above-entitled
case, the Court is convinced, and so
holds, that Espinosa was able to
establish his ownership and possession
over the subject lot which is within the
area considered by the Department of
Environment and Natural Resources
(DENR) as alienable and disposable
land of the public domain.
The Court is likewise convinced that the
applicant and that of predecessor-ininterest have been in open, actual,
public, continuous, adverse and under
claim of title thereto within the time
prescribed by law (Sec. 14, sub-par. 1,
P.D. 1529) and/or in accordance with
the Land Registration Act.11
Petitioner appealed to the CA and
pointed Espinosas failure to prove that
his possession and that of his
predecessor-in-interest were for the
period required by law. As shown by Tax
Declaration
No.
013516,
Isabels
possession commenced only in 1965 and
not on June 12, 1945 or earlier as
required by Section 48(b) of the PLA.
On the other hand, Espinosa came into
possession of the property only in 1970
following the sale that transpired
between him and his mother and the

earliest tax declaration in his name was

for the year 1978. According to
petitioner, that Espinosa and his
predecessor-in-interest were supposedly
in possession for more than thirty (30)
years is inconsequential absent proof
that such possession began on June 12,
1945 or earlier.12
Petitioner also claimed that Espinosas
failure to present the original tracing
cloth of the survey plan or a sepia copy
thereof is fatal to his application. Citing
Del Rosario v. Republic of the
Philippines13 and Director of Lands v.
Judge Reyes,14 petitioner argued that the
submission of the original tracing cloth
is mandatory in establishing the identity
of the land subject of the application.15
Further, petitioner claimed that the
annotation on the advance survey plan
is not the evidence admissible to prove
that the subject land is alienable and
disposable.16
By way of the assailed decision, the CA
dismissed petitioners appeal and
affirmed the MTC Decision dated
August 18, 2000. The CA ruled that
possession for at least thirty (30) years,
despite the fact that it commenced after
June 12, 1945, sufficed to convert the
property to private. Thus:
The contention of petitioner is not
meritorious on the following grounds:
a) The record of the case will show that
Espinosa has successfully established
valid title over the subject land and that
he and his predecessor-in-interest have
been in continuous, adverse, public and
undisturbed possession of said land in
the concept of an owner for more than
30 years before the filing of the
application. Established jurisprudence
has consistently pronounced that "open,
continuous and exclusive possession for
at least 30 years of alienable public land
ipso jure converts the same into private
property (Director of Lands vs.

Intermediate Appellate Court, 214 SCRA

604). This means that occupation and
cultivation for more than 30 years by
applicant and his predecessor-ininterest vests title on such applicant so
as to segregate the land from the mass of
public
land
(National
Power
Corporation vs. Court of Appeals, 218
SCRA 41); and
b) It is true that the requirement of
possession since June 12, 1945 is the
latest amendment of Section 48(b) of
the Public Land Act (C.A. No. 141), but a
strict implementation of the law would
in certain cases result in inequity and
unfairness to Espinosa. As wisely stated
by the Supreme Court in the case of
Republic vs. Court of Appeals, 235 SCRA
567:
"Following the logic of the petitioner,
any transferee is thus foreclosed to apply
for registration of title over a parcel of
land notwithstanding the fact that the
transferor, or his predecessor-in-interest
has been in open, notorious and
exclusive possession thereof for thirty
(30) years or more."17
The CA also ruled that registration can
be based on other documentary
evidence, not necessarily the original
tracing cloth plan, as the identity and
location of the property can be
established
by
other
competent
evidence.
Again, the aforesaid contention of [the
petitioner] is without merit. While the
best evidence to identify a piece of land
for registration purposes may be the
original tracing cloth plan from the Land
Registration Commission, the court may
sufficiently order the issuance of a
decree of registration on the basis of the
blue print copies and other evidence
(Republic of the Philippines vs.
Intermediate Appellate Court, G.R. No.
L-70594, October 10, 1986). The said
case provides further:

"The fact that the lower court finds the

evidence of the applicant sufficient to
justify the registration and confirmation
of her titles and did not find it necessary
to avail of the original tracing cloth plan
from the Land Registration Commission
for purposes of comparison, should not
militate against the rights of the
applicant. Such is especially true in this
case where no clear, strong, convincing
and more preponderant proof has been
shown by the oppositor to overcome the
correctness of said plans which were
found both by the lower court and the
Court of Appeals as conclusive proofs of
the description and identities of the
parcels of land contained therein."
There is no dispute that, in case of Del
Rosario vs. Republic, supra the
Supreme Court pronounced that the
submission in evidence of the original
tracing cloth plan, duly approved by the
Bureau of Lands, in cases for application
of original registration of land is a
mandatory requirement, and that failure
to comply with such requirement is fatal
to ones application for registration.
However, such pronouncement need not
be taken as an iron clad rule nor to be
applied strictly in all cases without due
regard to the rationale behind the
submission of the tracing cloth plan.
x x x:
xxxx
As long as the identity of and location of
the lot can be established by other
competent evidence like a duly approved
blueprint copy of the advance survey
plan of Lot 8499 and technical
description of Lot 8499, containing and
identifying the boundaries, actual area
and location of the lot, the presentation
of the original tracing cloth plan may be
excused.18
Moreover, the CA ruled that Espinosa
had duly proven that the property is
alienable and disposable:

Espinosa has established that Lot 8499

is alienable and disposable. In the duly
approved Advance Survey Plan As-070000893 (sic) duly approved by the
Land Management Services, DENR,
Region
7,
Cebu
City,
it
is
certified/verified that the subject lot is
inside the alienable and disposable area
of the disposable and alienable land of
the public domain.19
Petitioner moved for reconsideration
but this was denied by the CA in its
Resolution20 dated February 13, 2006.
Petitioners Case
Petitioner entreats this Court to reverse
and set aside the CAs assailed decision
and attributes the following errors: (a)
Espinosa failed to prove by competent
evidence that the subject property is
alienable
and
disposable;
(b)
jurisprudence dictates that a survey plan
identifies the property in preparation for
a judicial proceeding but does not
convert the property into alienable,
much less, private; (c) under Section 17
of P.D. No. 1529, the submission of the
original tracing cloth plan is mandatory
to determine the exact metes and
bounds of the property; and (d) a
blueprint copy of the survey plan may be
admitted as evidence of the identity and
location of the property only if it bears
the approval of the Director of Lands.
Issues
The resolution of the primordial
question of whether Espinosa has
acquired an imperfect title over the
subject property that is worthy of
confirmation and registration is hinged
on the determination of the following
issues:
a. whether the blueprint of the advanced
survey plan substantially complies with
Section 17 of P.D. No. 1529; and
b. whether the notation on the blueprint
copy of the plan made by the geodetic
engineer who conducted the survey

sufficed to prove that the land applied

for is alienable and disposable.
Our Ruling
The lower courts were unanimous in
holding that Espinosas application is
anchored on Section 14(1) of P.D. No.
1529 in relation to Section 48(b) of the
PLA and the grant thereof is warranted
in view of evidence supposedly showing
his compliance with the requirements
thereof.
This Court is of a different view.
Based on Espinosas allegations and his
supporting documents, it is patent that
his claim of an imperfect title over the
property in question is based on Section
14(2) and not Section 14(1) of P.D. No.
1529 in relation to Section 48(b) of the
PLA. Espinosa did not allege that his
possession and that of his predecessorin-interest commenced on June 12, 1945
or earlier as prescribed under the two
(2) latter provisions. On the contrary,
Espinosa repeatedly alleged that he
acquired title thru his possession and
that of his predecessor-in-interest,
Isabel, of the subject property for thirty
(30) years, or through prescription.
Therefore, the rule that should have
been applied is Section 14(2) of P.D. No.
1529, which states:
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:
xxxx
(2) Those who have acquired ownership
of private lands by prescription under
the provision of existing laws.
Obviously, the confusion that attended
the lower courts disposition of this case
stemmed from their failure to apprise
themselves of the changes that Section
48(b) of the PLA underwent over the

years. Section 48(b) of the PLA

originally states:
Sec. 48. The following described citizens
of the Philippines, occupying lands of
the public domain or claiming to own
any such lands or an interest therein,
but whose titles have not been perfected
or completed, may apply to the Court of
First Instance of the province where the
land is located for confirmation of their
claims and the issuance of a certificate
of title therefor, under the Land
Registration Act, to wit:
xxxx
(b) Those who by themselves or through
their predecessors-in-interest have been
in the open, continuous, exclusive and
notorious possession and occupation of
agricultural lands of the public domain,
under a bona fide claim of acquisition or
ownership, except as against the
Government, since July twenty-sixth,
eighteen hundred and ninety-four,
except when prevented by war or force
majeure. These shall be conclusively
presumed to have performed all the
conditions essential to a Government
grant and shall be entitled to a
certificate of title under the provisions of
this chapter.
Thus, the required possession and
occupation for judicial confirmation of
imperfect title was since July 26, 1894 or
earlier.
On June 22, 1957, Republic Act (R.A.)
No. 1942 amended Section 48(b) of the
PLA by providing a thirty (30)-year
prescriptive
period
for
judicial
confirmation of imperfect title. Thus:
(b) Those who by themselves or through
their predecessors-in-interest have been
in the open, continuous, exclusive and
notorious possession and occupation of
agricultural lands of the public domain,
under a bona fide claim of acquisition or
ownership, for at least thirty years
immediately preceding the filing of the

application for confirmation of title

except when prevented by war or force
majeure. These shall be conclusively
presumed to have performed all the
conditions essential to a Government
grant and shall be entitled to a
certificate of title under the provisions of
this chapter.
On January 25, 1977, P.D. No. 1073 was
issued, changing the requirement for
possession and occupation for a period
of thirty (30) years to possession and
occupation since June 12, 1945 or
earlier. Section 4 of P.D. No. 1073 states:
Sec. 4. The provisions of Section 48(b)
and Section 48(c), Chapter VIII of the
Public Land Act are hereby amended in
the sense that these provisions shall
apply only to alienable and disposable
lands of the public domain which have
been in open, continuous, exclusive and
notorious possession and occupation by
the applicant himself or thru his
predecessor-in-interest, under a bona
fide claim of acquisition of ownership,
since June 12, 1945.
On June 11, 1978, P.D. No. 1529 was
enacted. Notably, the requirement for
possession and occupation since June
12, 1945 or earlier was adopted under
Section 14(1) thereof.
P.D. No. 1073, in effect, repealed R.A.
No. 1942 such that applications under
Section 48(b) of the PLA filed after the
promulgation of P.D. No. 1073 should
allege and prove possession and
occupation that dated back to June 12,
1945 or earlier. However, vested rights
may have been acquired under Section
48(b) prior to its amendment by P.D.
No. 1073. That is, should petitions for
registration filed by those who had
already been in possession of alienable
and disposable lands of the public
domain for thirty (30) years at the time
P.D. No. 1073 was promulgated be
denied
because
their
possession

commenced after June 12, 1945? In

Abejaron
v.
Nabasa,21 this
Court
resolved this legal predicament as
follows:
However, as petitioner Abejarons 30year period of possession and
occupation required by the Public Land
Act, as amended by R.A. 1942 ran from
1945 to 1975, prior to the effectivity of
P.D. No. 1073 in 1977, the requirement
of said P.D. that occupation and
possession should have started on June
12, 1945 or earlier, does not apply to
him. As the Susi doctrine holds that the
grant of title by virtue of Sec. 48(b) takes
place by operation of law, then upon
Abejarons
satisfaction
of
the
requirements of this law, he would have
already gained title over the disputed
land in 1975. This follows the doctrine
laid down in Director of Lands v.
Intermediate Appellate Court, et al., that
the law cannot impair vested rights such
as a land grant. More clearly stated,
"Filipino citizens who by themselves or
their
predecessors-in-interest
have
been, prior to the effectivity of P.D. 1073
on January 25, 1977, in open,
continuous, exclusive and notorious
possession
and
occupation
of
agricultural lands of the public domain,
under a bona fide claim of acquisition of
ownership, for at least 30 years, or at
least since January 24, 1947" may apply
for judicial confirmation of their
imperfect or incomplete title under Sec.
48(b) of the Public Land Act. 22 (Citations
omitted)
Consequently, for one to invoke Section
48(b) and claim an imperfect title over
an alienable and disposable land of the
public domain on the basis of a thirty
(30)-year possession and occupation, it
must be demonstrated that such
possession and occupation commenced
on January 24, 1947 and the thirty (30)-

year period was completed prior to the

effectivity of P.D. No. 1073.
There is nothing in Section 48(b) that
would suggest that it provides for two
(2) modes of acquisition. It is not the
case that there is an option between
possession and occupation for thirty
(30) years and possession and
occupation since June 12, 1945 or
earlier. It is neither contemplated under
Section 48(b) that if possession and
occupation of an alienable and
disposable public land started after June
12, 1945, it is still possible to acquire an
imperfect title if such possession and
occupation spanned for thirty (30) years
at the time of the filing of the
application.
In this case, the lower courts concluded
that Espinosa complied with the
requirements of Section 48(b) of the
PLA in relation to Section 14(1) of P.D.
No. 1529 based on supposed evidence
that he and his predecessor-in-interest
had been in possession of the property
for at least thirty (30) years prior to the
time he filed his application. However,
there is nothing on record showing that
as of January 25, 1977 or prior to the
effectivity of P.D. No. 1073, he or Isabel
had already acquired title by means of
possession and occupation of the
property for thirty (30) years. On the
contrary, the earliest tax declaration in
Isabels name was for the year 1965
indicating that as of January 25, 1977,
only twelve (12) years had lapsed from
the time she first came supposedly into
possession.
The CAs reliance on Director of Lands v.
Intermediate
Appellate
Court23 is
misplaced
considering
that
the
application therein was filed on October
20, 1975 or before the effectivity of P.D.
No. 1073. The same can be said with
respect to National Power Corporation
v. Court of Appeals.24 The petition for

registration therein was filed on August

21, 1968 and at that time, the prevailing
rule was that provided under Section
48(b) as amended by R.A. No. 1942.
In Republic v. Court of Appeals,25 the
applicants
therein
entered
into
possession of the property on June 17,
1978 and filed their application on
February 5, 1987. Nonetheless, there is
evidence that the individuals from
whom the applicant purchased the
property, or their predecessors-ininterest, had been in possession since
1937. Thus, during the effectivity of
Section 48(b) as amended by R.A. No.
1942, or while the prevailing rule was
possession and occupation for thirty
(30) years, or prior to the issuance of
P.D. No. 1073, the thirty (30)-year
prescriptive
period
was
already
completed.
Thus, assuming that it is Section 48(b)
of the PLA in relation to Section 14(1) of
P.D. No. 1529 that should apply in this
case, as the lower courts held, it was
incumbent upon Espinosa to prove,
among other things, that Isabels
possession of the property dated back at
least to June 12, 1945. That in view of
the established fact that Isabels alleged
possession and occupation started much
later, the lower courts should have
dismissed
Espinosas
application
outright.
In sum, the CA, as well as the MTC,
erred in not applying the present text of
Section 48(b) of the PLA. That there
were instances wherein applications
were granted on the basis of possession
and occupation for thirty (30) years was
for the sole reason discussed above.
Regrettably, such reason does not obtain
in this case.
Being clear that it is Section 14(2) of
P.D. No. 1529 that should apply, it
follows that the subject property being
supposedly alienable and disposable will

not
suffice.
As
Section
14(2)
categorically provides, only private
properties may be acquired thru
prescription and under Articles 420 and
421 of the Civil Code, only those
properties, which are not for public use,
public service or intended for the
development of national wealth, are
considered private. In Heirs of Mario
Malabanan v. Republic,26 this Court held
that there must be an official declaration
to that effect before the property may be
rendered susceptible to prescription:
Nonetheless, Article 422 of the Civil
Code states that "property of public
dominion, when no longer intended for
public use or for public service, shall
form part of the patrimonial property of
the State." It is this provision that
controls how public dominion property
may be converted into patrimonial
property susceptible to acquisition by
prescription. After all, Article 420(2)
makes clear that those property "which
belong to the State, without being for
public use, and are intended for some
public service or for the development of
the national wealth" are public
dominion property. For as long as the
property belongs to the State, although
already classified as alienable or
disposable, it remains property of the
public dominion if when it is "intended
for some public service or for the
development of the national wealth."
(Emphasis supplied)
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), 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.27
Thus, granting that Isabel and, later,
Espinosa possessed and occupied the
property for an aggregate period of
thirty (30) years, this does not operate
to divest the State of its ownership. The
property, albeit allegedly alienable and
disposable, is not patrimonial. As the
property is not held by the State in its
private capacity, acquisition of title
thereto necessitates observance of the
provisions of Section 48(b) of the PLA in
relation to Section 14(1) of P.D. No. 1529
or possession and occupation since June
12, 1945. For prescription to run against
the State, there must be proof that there
was an official declaration that the
subject property is no longer earmarked
for public service or the development of
national wealth. Moreover, such official
declaration should have been issued at
least ten (10) or thirty (30) years, as the
case may be, prior to the filing of the
application for registration. The period
of possession and occupation prior to
the conversion of the property to private
or patrimonial shall not be considered in
determining
completion
of
the
prescriptive period. Indeed, while a
piece of land is still reserved for public
service or the development of national
wealth, even if the same is alienable and
disposable, possession and occupation
no matter how lengthy will not ripen to
ownership or give rise to any title that
would defeat that of the States if such

did not commence on June 12, 1945 or

earlier.
At any rate, as petitioner correctly
pointed out, the notation on the survey
plan does not constitute incontrovertible
evidence that would overcome the
presumption that the property belongs
to the inalienable public domain.
All lands of the public domain belong to
the State, which is the source of any
asserted right to any ownership of land.
All lands not appearing to be clearly
within private ownership are presumed
to belong to the State. Accordingly,
public lands not shown to have been
reclassified or released as alienable
agricultural land, or alienated to a
private person by the State, remain part
of the inalienable public domain. The
burden of proof in overcoming the
presumption of State ownership of the
lands of the public domain is on the
person applying for registration (or
claiming ownership), who must prove
that the land subject of the application is
alienable or disposable. To overcome
this
presumption,
incontrovertible
evidence must be established that the
land subject of the application (or claim)
is alienable or disposable.28
In Republic v. Sarmiento,29 this Court
reiterated the earlier ruling in Menguito
v. Republic30 that the notation made by a
surveyor-geodetic engineer that the
property surveyed is alienable and
disposable
is
not
the
positive
government act that would remove the
property from the inalienable domain.
Neither it is the evidence accepted as
sufficient to controvert the presumption
that the property is inalienable:
To discharge the onus, respondent relies
on the blue print copy of the conversion
and subdivision plan approved by the
DENR Center which bears the notation
of the surveyor-geodetic engineer that
"this survey is inside the alienable and

disposable area, Project No. 27-B. L.C.

Map No. 2623, certified on January 3,
1968 by the Bureau of Forestry."
Menguito v. Republic teaches, however,
that reliance on such a notation to prove
that the lot is alienable is insufficient
and does not constitute incontrovertible
evidence to overcome the presumption
that it remains part of the inalienable
public domain.
"To prove that the land in question
formed part of the alienable and
disposable lands of the public domain,
petitioners relied on the printed words
which read: "This survey plan is inside
Alienable and Disposable Land Area,
Project No. 27-B as per L.C. Map No.
2623, certified by the Bureau of Forestry
on January 3, 1968," appearing on
Exhibit "E" (Survey Plan No. Swo-13000227).
This proof is not sufficient. Section 2,
Article XII of the 1987 Constitution,
provides: "All lands of the public
domain,
waters,
minerals,
coal,
petroleum, and other mineral oils, all
forces of potential energy, fisheries,
forests or timber, wildlife, flora and
fauna, and other natural resources are
owned by the State. . . ."
For the original registration of title, the
applicant (petitioners in this case) must
overcome the presumption that the land
sought to be registered forms part of the
public domain. Unless public land is
shown to have been reclassified or
alienated to a private person by the
State, it remains part of the inalienable
public domain. Indeed, "occupation
thereof in the concept of owner, no
matter how long, cannot ripen into
ownership and be registered as a title."
To
overcome
such
presumption,
incontrovertible evidence must be
shown by the applicant. Absent such
evidence, the land sought to be
registered remains inalienable.

In the present case, petitioners cite a

surveyor geodetic engineers notation in
Exhibit "E" indicating that the survey
was inside alienable and disposable
land. Such notation does not constitute a
positive
government
act
validly
changing the classification of the land in
question.
Verily, a mere surveyor has no authority
to reclassify lands of the public domain.
By relying solely on the said surveyors
assertion,
petitioners
have
not
sufficiently proven that the land in
question
has
been
declared
alienable."31 (Citations
omitted
and
underscoring supplied)
Therefore, even if Espinosas application
may not be dismissed due to his failure
to present the original tracing cloth of
the survey plan, there are numerous
grounds for its denial. The blueprint
copy of the advanced survey plan may be
admitted as evidence of the identity and
location of the subject property if: (a) it
was duly executed by a licensed geodetic
engineer; (b) it proceeded officially from
the Land Management Services (LMS)
of the DENR; and (c) it is accompanied
by a technical description of the
property which is certified as correct by
the geodetic surveyor who conducted the
survey and the LMS of the DENR. As
ruled in Republic v. Guinto-Aldana,32the
identity of the land, its boundaries and
location can be established by other
competent evidence apart from the
original tracing cloth such as a duly
executed blueprint of the survey plan
and technical description:
Yet if the reason for requiring an
applicant to adduce in evidence the
original tracing cloth plan is merely to
provide a convenient and necessary
means to afford certainty as to the exact
identity of the property applied for
registration and to ensure that the same
does not overlap with the boundaries of

the adjoining lots, there stands to be no

reason why a registration application
must be denied for failure to present the
original tracing cloth plan, especially
where it is accompanied by pieces of
evidencesuch as a duly executed
blueprint of the survey plan and a duly
executed technical description of the
propertywhich
may
likewise
substantially and with as much certainty
prove the limits and extent of the
property sought to be registered.33
However, while such blueprint copy of
the survey plan may be offered as
evidence of the identity, location and the
boundaries of the property applied for,
the notation therein may not be
admitted as evidence of alienability and
disposability. In Republic v. Heirs of
Juan Fabio,34 this Court enumerated the
documents that are deemed relevant and
sufficient to prove that the property is
already outside the inalienable public
domain as follows:
In Republic v. T.A.N. Properties, Inc.,
we ruled that it is not enough for the
Provincial Environment and Natural
Resources Office (PENRO) or CENRO to
certify that a land is alienable and
disposable. The applicant for land
registration must prove that the DENR
Secretary had approved the land
classification and released the land of
the public domain as alienable and
disposable, and that the land subject of
the application for registration falls
within
the
approved
area
per
verification through survey by the
PENRO or CENRO. In addition, the
applicant must present a copy of the
original classification of the land into
alienable and disposable, as declared by
the DENR Secretary, or as proclaimed
by the President. Such copy of the
DENR Secretarys declaration or the
Presidents proclamation must be
certified as a true copy by the legal

custodian
of
such
official
record.1wphi1 These facts must be
established to prove that the land is
alienable and disposable.35 (Citation
omitted)
Based on the foregoing, it appears that
Espinosa cannot avail the benefits of
either Section 14(1) of P.O. No. 1529 in
relation to Section 48(b) of the PLA or
Section 14(2) of P.O. No. 1529. Applying
Section 14(1) of P.O. No. 1529 and
Section 48(b) of the PLA, albeit
improper, Espinosa failed to prove that:
(a) Isabel's possession of the property
dated back to June 12, 1945 or earlier;
and (b) the property is alienable and
disposable. On the other hand, applying
Section 14(2) of P.O. No. 1529, Espinosa
failed to prove that the property is
patrimonial. As to whether Espinosa was
able to prove that his possession and
occupation and that of Isabel were of the
character prescribed by law, the
resolution of this issue has been
rendered unnecessary by the foregoing
considerations.
WHEREFORE, premises considered, the
petition is GIVEN DUE COURSE and
GRANTED.
The
Decision
dated
November 11, 2004 and Resolution
dated February 13, 2006 of the Court of
Appeals in CA-G.R. CV No. 72456 are
REVERSED and SET ASIDE and
Domingo Espinosa's application for
registration of title over Lot No. 8499 of
Cad. 545-D (New) located at Barangay
Cabangahan, Consolacion, Cebu is
hereby DENIED for lack of merit. No
pronouncement as to costs.
SO ORDERED.
G.R. No. 129682
March 21, 2002
NESTOR PAGKATIPUNAN and
ROSALINA
MAAGASPAGKATIPUNAN, petitioners,
vs.
THE COURT OF APPEALS and

REPUBLIC
OF
THE
PHILIPPINES, respondents.
YNARES-SANTIAGO, J.:
This is a petition for review of the
decision1 of the Court of Appeals
nullifying the decision of the Court of
First
Instance
of
Gumaca,
Quezon2 which confirmed petitioners
title over the lots subject of the instant
petition. Petitioners further seek to
annul and set aside the resolutions3 of
the Court of Appeals denying their
urgent motion to recall the judgment
entered4 in the land registration case.
The antecedent facts are as follows:
Sometime
in
November
1960,
petitioners
predecessors-in-interest,
spouses Getulio Pagkatipunan and
Lucrecia Esquires, filed with the Court
of First Instance of Gumaca, Quezon an
application for judicial confirmation and
registration of their title to Lots 1 and 2
of Plan Psu-174406 and Lots 1 and 2 of
Plan Psu-112066, all located in San
Narciso, Quezon.5
On May 4, 1961, the Court of First
Instance entered an order of default
against the whole world, except spouses
Felicisimo
Almace
and
Teodulo
Medenilla who were given ten (10) days
to file their written opposition as
regards Lot No. 2 of Plan Psu-174406.
Upon
motion
of
petitioners
predecessors, Lot No. 2 of Plan Psu174406 was removed from the coverage
of the application. The remaining parcel
of land covered by Lot No. 1 has an area
of 3,804.261 square meters.
On June 15, 1967, the Court of First
Instance promulgated a decision
confirming petitioners title to the
property. On October 23, 1967, OCT No.
O-12665 was issued in the name of
petitioners.1wphi1.nt
Almost eighteen (18) years later, or on
September 12, 1985, the Republic of the
Philippines filed with the Intermediate

Appellate Court an action to declare the

proceedings in LRC Case No. 91-G, LRC
Record No. N-19930 before the Court of
First Instance of Gumaca, Quezon null
and void, and to cancel Original
Certificate of Title No. 0-12665 and titles
derived therefrom as null and void, to
direct the register of deeds to annul said
certificates of title, and to confirm the
subject land as part of the public
domain.6
The Republic claimed that at the time of
filing of the land registration case and of
rendition of the decision on June 15,
1967, the subject land was classified as
timberland under LC Project No. 15-B of
San Narciso, Quezon, as shown in BF
Map No. LC-1180; hence inalienable and
not subject to registration. Moreover,
petitioners title thereto can not be
confirmed for lack of showing of
possession and occupation of the land in
the manner and for the length of time
required
by
Section
48(b),
Commonwealth Act No. 141, as
amended. Neither did petitioners have
any fee simple title which may be
registered under Act No. 496, as
amended. Consequently, the Court of
First Instance did not acquire
jurisdiction over the res and any
proceedings had therein were null and
void.7
On the other hand, petitioners raised the
special defenses of indefeasibility of title
and res judicata. They argued that due
to the lapse of a considerable length of
time, the judgment of the Court of First
Instance of Quezon in the land
registration case has become final and
conclusive
against
the
Republic.
Moreover, the action for reversion of the
land to the public domain is barred by
prior judgment.8
In a decision promulgated on June 27,
1986, the Intermediate Appellate Court
held that the land in question was

forestral land; hence not registrable.

There was no evidence on record to
show that the land was actually and
officially delimited and classified as
alienable or disposable land of the
public domain. Therefore, the Court of
First Instance did not acquire
jurisdiction to take cognizance of the
application for registration and to
decide the same. Consequently, the
action to declare null and void the June
15, 1967 decision for lack of jurisdiction
did not prescribe. The dispositive
portion of the appellate courts decision
reads:
WHEREFORE, judgment is rendered in
favor of petitioner and against
respondents, and as prayed for:
(a) The Decision dated June 15, 1967 in
LRC Case No. 91-G, LRC Record No. N19930 is hereby declared null and void,
and accordingly set aside;
(b) Original Certificate of Title No. O12665, and Transfer Certificates of Title
Nos. T-84439, T-93857 and T-117618
deriving therefrom, as well as any other
derivative titles, are declared null and
void;
(c) The respondent Register of Deeds for
Quezon Province is ordered to cancel
said titles; and
(d) The parcels of land covered thereby
are ordered reverted to the State.
Without pronouncement as to costs."9
On July 16, 1986, petitioners moved for
the reconsideration of the afore-cited
decision10 reiterating that the land in
question was agricultural because it was
possessed and cultivated as such long
before its classification as timberland by
the Bureau of Forestry in 1955.
Petitioners and their predecessors-ininterest have been in open, continuous,
exclusive, notorious possession and
occupation of said land for agricultural
and cattle raising purposes as far back as
the Spanish regime. Following the

doctrine in Oracoy v. Director of

Lands,11 private interest had intervened
and petitioners acquired vested rights
which can no longer be impaired by the
subsequent classification of the land as
timberland by the Director of Forestry.
On August 20, 1986, the appellate court
denied the motion for reconsideration
for lack of merit.12 On December 12,
1986, the decision of June 27, 1986
attained finality and judgment was
entered in the book of entries of
judgments.13
On April 2, 1987, petitioners filed an
urgent motion to set aside entry of
judgment on the ground that Atty. Cirilo
E. Doronila, petitioners counsel of
record, was not furnished a copy of the
resolution denying the motion for
reconsideration.14 In the absence of such
notice, the decision of the appellate
court did not become final and
executory.
On October 22, 1987, the Court of
Appeals set aside and lifted the entry of
judgment in CA-G. R. SP No. 07115 and
directed the clerk of court to furnish
petitioners counsel a copy of the August
20, 1986 resolution.15
For petitioners inaction despite service
of the August 20, 1986 resolution, the
June 27, 1986 decision became final and
executory. On March 2, 1988, entry of
judgment was again made in the land
registration case.
On September 4, 1995, Atty. Doronila
withdrew his appearance as counsel for
petitioners.16
On April 1, 1996, petitioners, through
their new counsel, Atty. George I.
Howard, filed with the Court of Appeals
an urgent motion to recall the entry of
judgment,17 which was denied by the
appellate court on December 16, 1996.18
The motion for reconsideration was
likewise denied on the ground that it
raised arguments already discussed and

resolved in the urgent motion to recall

entry of judgment.19
Hence, the instant petition for review.20
Petitioners claim that their title to the
land became incontrovertible and
indefeasible one (1) year after issuance
of the decree of registration. Hence, the
Republics cause of action was barred by
prescription
and res
judicata,
proceedings having been initiated only
after about 18 years from the time the
decree of registration was made.
Contrary to the appellate courts
findings, the land is agricultural and the
inclusion and classification thereof by
the Bureau of Forestry in 1955 as
timberland can not impair the vested
rights
acquired
by
petitioners
predecessors-in-interest who have been
in open, continuous, adverse and public
possession of the land in question since
time immemorial and for more than
thirty (30) years prior to the filing of the
application for registration in 1960.
Hence, the Court of Appeals committed
grave error when it denied their motion
to set aside entry of judgment in the
land registration case.
The petition lacks merit.
Unless public land is shown to have
been reclassified or alienated to a
private person by the State, it remains
part of the inalienable public domain.
Occupation thereof in the concept of
owner, no matter how long, cannot ripen
into ownership and be registered as a
title.21
Evidence extant on record showed that
at the time of filing of the application for
land registration and issuance of the
certificate of title over the disputed land
in the name of petitioners, the same was
timberland and formed part of the
public domain, as per certification
issued by the Bureau of Forest
Development on April 1, 1985, thus:
TO WHOM IT MAY CONCERN:

This is to certify that the tract of land

situated in Vigo Cantidang, San Narciso,
Quezon, containing an area of 3,804.261
square meters as described in Transfer
Certificate of Title No. T-117618 x x x
registered in the name of Spouses
Nestor E. Pagkatipunan and Rosalina
Magas is verified to be within the
Timberland Block -B, Project No. 15-B of
San Narciso, Quezon, certified and
declared as such on August 25, 1955 per
BFD Map LC-1880. The land is,
therefore, within the administrative
jurisdiction and control of the Bureau of
Forest Development, and not subject to
disposition under the Public Land Law.
[Sgd.]ARMANDO
CRUZ
Supervising Cartographer22
This fact was even admitted by
petitioners during the proceedings
before the court a quo on March 10,
1986, when they confirmed that the land
has been classified as forming part of
forest land, albeit only on August 25,
1955.23 Since no imperfect title can be
confirmed over lands not yet classified
as disposable or alienable, the title
issued to herein petitioners is
considered void ab initio.24
Under the Regalian doctrine, all lands of
the public domain belong to the State,
and the State is the source of any
asserted right to ownership in land and
charged with the conservation of such
patrimony. This same doctrine also
states that all lands not otherwise
appearing to be clearly within private
ownership are presumed to belong to
the
State.25 To
overcome
such
presumption, incontrovertible evidence
must be shown by the applicant that the
land subject of the application is
alienable or disposable.26
In the case at bar, there was no evidence
showing that the land has been
reclassified as disposable or alienable.
Before any land may be declassified

from the forest group and converted into

alienable or disposable land for
agricultural or other purposes, there
must be a positive act from the
government. Even rules on the
confirmation of imperfect titles do not
apply unless and until the land classified
as forest land is released in an official
proclamation to that effect so that it may
form part of the disposable agricultural
lands
of
the
public
domain.27Declassification of forest land
is an express and positive act of
Government.28 It cannot be presumed.
Neither should it be ignored nor deemed
waived.29 It calls for proof.30
The court a quo found registrable title in
favor of petitioners based on the
Republics failure to show that the land
is more valuable as forest land than for
agricultural purposes, a finding which is
based on a wrong concept of what is
forest land.
There is a big difference between
"forest" as defined in the dictionary and
"forest or timber land" as a classification
of land of the public domain in the
Constitution. One is descriptive of what
appears on the land while the other is a
legal status, a classification for legal
purposes. The "forest land" started out
as a "forest" or vast tracts of wooded
land with dense growths of trees and
underbrush. However, the cutting down
of trees and the disappearance of virgin
forest do not automatically convert the
land of the public domain from forest or
timber land to alienable agricultural
land.31
The classification of forest land, or any
land for that matter, is descriptive of its
legal nature or status, and does not have
to be descriptive of what the land
actually looks like.32 A person cannot
enter into forest land and by the simple
act of cultivating a portion of that land,
earn credits towards an eventual

confirmation of imperfect title. The

Government must first declare the forest
land to be alienable and disposable
agricultural land before the year of
entry, cultivation, and exclusive and
adverse possession can be counted for
purposes of an imperfect title.33
As ruled in the case of Heirs of Jose
Amunategui v. Director of Forestry:34
A forested area classified as forest land
of the public domain does not lose such
classification simply because loggers or
settlers may have stripped it of its forest
cover. Parcels of land classified as forest
land may actually be covered with grass
or planted to crops by kaingin
cultivators or other farmers. "Forest
lands" do not have to be on mountains
or in out of the way places. Swampy
areas covered by mangrove trees, nipa
palms, and other trees growing in
brackish or sea water may also be
classified
as
forest
land.
The
classification is descriptive of its legal
nature or status and does not have to be
descriptive of what the land actually
looks like. Unless and until the land
classified as "forest" is released in an
official proclamation to that effect so
that it may form part of the disposable
agricultural lands of the public domain,
the rules on confirmation of imperfect
title do not apply.
Moreover, the original text of Section 48
(b), Chapter VIII of the Public Land Act,
which took effect on December 1, 1936,
expressly provided that only agricultural
land of the public domain are subject to
acquisitive prescription, to wit:
Section 48. x x x
(a) x x x
(b) Those who by themselves or through
their predecessors-in-interest have been
in open, continuous, exclusive, and
notorious possession and occupation
of agricultural lands of the public
domain, under abona fide claim of

acquisition of ownership, except as

against the Government, since July
twenty-six, eighteen hundred and
ninety-four, except when prevented by
war or force majeure. These shall be
conclusively
presumed
to
have
performed all the conditions essential to
a Government grant and shall be
entitled to a certificate of title under the
provisions of this Chapter. (Emphasis
supplied)
Thus, it is clear that the applicant must
prove not only his open, continuous,
exclusive and notorious possession and
occupation of the land either since time
immemorial or for the period prescribed
therein, but most importantly, he must
prove that the land is alienable public
land.35 In the case at bar, petitioners
failed to do so.
Petitioners contention that the Republic
is now barred from questioning the
validity of the certificate of title issued to
them considering that it took the
government almost eighteen (18) years
to assail the same is erroneous. It is a
basic precept that prescription does not
run against the State.36 The lengthy
occupation of the disputed land by
petitioners cannot be counted in their
favor, as it remained part of the
patrimonial property of the State, which
property, as stated earlier, is inalienable
and indisposable.37
In light of the foregoing, the Court of
Appeals did not err when it set aside the
June 15, 1967 decision of the courta
quo and ordered that the subject lot be
reverted back to the public domain.
Since the land in question is
unregistrable, the land registration court
did not acquire jurisdiction over the
same. Any proceedings had or judgment
rendered therein is void and is not
entitled to the respect accorded to a
valid judgment.

Consequently, the Court of Appeals

rightfully denied petitioners motion to
set aside the judgment rendered on
December 12, 1986, in the land
registration case.1wphi1.nt
WHEREFORE, in view of the
foregoing, the decision of the Court of
Appeals dated June 27, 1986 in AC-G.R.
SP No. 07115, is hereby AFFIRMED in
toto.
Without pronouncement as to costs.
SO ORDERED.
[G.R. No. 135385. December 6,
2000]
CRUZ vs. SEC OF ENR
RESOLUTION
PER CURIAM:
Petitioners Isagani Cruz and Cesar
Europa brought this suit for prohibition
and mandamus as citizens and
taxpayers, assailing the constitutionality
of certain provisions of Republic Act No.
8371 (R.A. 8371), otherwise known as
the Indigenous Peoples Rights Act of
1997 (IPRA), and its Implementing
Rules and Regulations (Implementing
Rules).
In its resolution of September 29, 1998,
the Court required respondents to
comment.[1] In compliance, respondents
Chairperson and Commissioners of the
National Commission on Indigenous
Peoples (NCIP), the government agency
created under the IPRA to implement its
provisions, filed on October 13, 1998
their Comment to the Petition, in which
they defend the constitutionality of the
IPRA and pray that the petition be
dismissed for lack of merit.
On October 19, 1998, respondents
Secretary of the Department of
Environment and Natural Resources
(DENR)
and
Secretary
of
the
Department of Budget and Management
(DBM) filed through the Solicitor
General a consolidated Comment. The

Solicitor General is of the view that the

IPRA is partly unconstitutional on the
ground that it grants ownership over
natural resources to indigenous peoples
and prays that the petition be granted in
part.
On November 10, 1998, a group of
intervenors, composed of Sen. Juan
Flavier, one of the authors of the IPRA,
Mr. Ponciano Bennagen, a member of
the 1986 Constitutional Commission,
and the leaders and members of 112
groups of indigenous peoples (Flavier,
et. al), filed their Motion for Leave to
Intervene. They join the NCIP in
defending the constitutionality of IPRA
and praying for the dismissal of the
petition.
On March 22, 1999, the Commission on
Human Rights (CHR) likewise filed a
Motion to Intervene and/or to Appear as
Amicus Curiae. The CHR asserts that
IPRA is an expression of the principle of
parens patriae and that the State has the
responsibility to protect and guarantee
the rights of those who are at a serious
disadvantage
like
indigenous
peoples. For this reason it prays that the
petition be dismissed.
On March 23, 1999, another group,
composed of the Ikalahan Indigenous
People and the Haribon Foundation for
the Conservation of Natural Resources,
Inc. (Haribon, et al.), filed a motion to
Intervene with attached Comment-inIntervention. They agree with the NCIP
and Flavier, et al. that IPRA is consistent
with the Constitution and pray that the
petition for prohibition and mandamus
be dismissed.
The motions for intervention of the
aforesaid groups and organizations were
granted.
Oral arguments were heard on April 13,
1999. Thereafter, the parties and
intervenors filed their respective
memoranda in which they reiterate the

arguments adduced in their earlier

pleadings and during the hearing.
Petitioners assail the constitutionality of
the following provisions of the IPRA and
its Implementing Rules on the ground
that they amount to an unlawful
deprivation of the States ownership over
lands of the public domain as well as
minerals and other natural resources
therein, in violation of the regalian
doctrine embodied in Section 2, Article
XII of the Constitution:
(1) Section 3(a) which defines the extent
and coverage of ancestral domains, and
Section 3(b) which, in turn, defines
ancestral lands;
(2) Section 5, in relation to section 3(a),
which provides that ancestral domains
including inalienable public lands,
bodies of water, mineral and other
resources found within ancestral
domains are private but community
property of the indigenous peoples;
(3) Section 6 in relation to section 3(a)
and 3(b) which defines the composition
of ancestral domains and ancestral
lands;
(4) Section 7 which recognizes and
enumerates the rights of the indigenous
peoples over the ancestral domains;
(5) Section 8 which recognizes and
enumerates the rights of the indigenous
peoples over the ancestral lands;
(6) Section 57 which provides for
priority rights of the indigenous peoples
in
the
harvesting,
extraction,
development or exploration of minerals
and other natural resources within the
areas claimed to be their ancestral
domains, and the right to enter into
agreements with nonindigenous peoples
for the development and utilization of
natural resources therein for a period
not exceeding 25 years, renewable for
not more than 25 years; and
(7) Section 58 which gives the
indigenous peoples the responsibility to

maintain, develop, protect and conserve

the ancestral domains and portions
thereof which are found to be necessary
for critical watersheds, mangroves,
wildlife
sanctuaries,
wilderness,
protected areas, forest cover or
reforestation.[2]
Petitioners also content that, by
providing for an all-encompassing
definition of ancestral domains and
ancestral lands which might even
include private lands found within said
areas, Sections 3(a) and 3(b) violate the
rights of private landowners.[3]
In addition, petitioners question the
provisions of the IPRA defining the
powers and jurisdiction of the NCIP and
making customary law applicable to the
settlement
of
disputes
involving
ancestral domains and ancestral lands
on the ground that these provisions
violate the due process clause of the
Constitution.[4]
These provisions are:
(1) sections 51 to 53 and 59 which detail
the process of delineation and
recognition of ancestral domains and
which vest on the NCIP the sole
authority to delineate ancestral domains
and ancestral lands;
(2) Section 52[i] which provides that
upon certification by the NCIP that a
particular area is an ancestral domain
and upon notification to the following
officials, namely, the Secretary of
Environment and Natural Resources,
Secretary of Interior and Local
Governments, Secretary of Justice and
Commissioner
of
the
National
Development
Corporation,
the
jurisdiction of said officials over said
area terminates;
(3) Section 63 which provides the
customary law, traditions and practices
of indigenous peoples shall be applied
first with respect to property rights,
claims
of
ownership,
hereditary

succession and settlement of land

disputes, and that any doubt or
ambiguity in the interpretation thereof
shall be resolved in favor of the
indigenous peoples;
(4) Section 65 which states that
customary laws and practices shall be
used to resolve disputes involving
indigenous peoples; and
(5) Section 66 which vests on the NCIP
the jurisdiction over all claims and
disputes involving rights of the
indigenous peoples.[5]
Finally, petitioners assail the validity of
Rule VII, Part II, Section 1 of the NCIP
Administrative Order No. 1, series of
1998, which provides that the
administrative relationship of the NCIP
to the Office of the President is
characterized
as
a
lateral
but
autonomous relationship for purposes of
policy and program coordination. They
contend that said Rule infringes upon
the Presidents power of control over
executive departments under Section 17,
Article VII of the Constitution.[6]
Petitioners pray for the following:
(1) A declaration that Sections 3, 5, 6, 7,
8, 52[I], 57, 58, 59, 63, 65 and 66 and
other related provisions of R.A. 8371 are
unconstitutional and invalid;
(2) The issuance of a writ of prohibition
directing
the
Chairperson
and
Commissioners of the NCIP to cease and
desist from implementing the assailed
provisions of R.A. 8371 and its
Implementing Rules;
(3) The issuance of a writ of prohibition
directing
the
Secretary
of
the
Department of Environment and
Natural Resources to cease and desist
from implementing Department of
Environment and Natural Resources
Circular No. 2, series of 1998;
(4) The issuance of a writ of prohibition
directing the Secretary of Budget and
Management to cease and desist from

disbursing public funds for the

implementation
of
the
assailed
provisions of R.A. 8371; and
(5) The issuance of a writ of mandamus
commanding
the
Secretary
of
Environment and Natural Resources to
comply with his duty of carrying out the
States constitutional mandate to control
and
supervise
the
exploration,
development,
utilization
and
conservation of Philippine natural
resources.[7]
After due deliberation on the petition,
the members of the Court voted as
follows:
Seven (7) voted to dismiss the
petition. Justice Kapunan filed an
opinion, which the Chief Justice and
Justices Bellosillo, Quisumbing, and
Santiago join, sustaining the validity of
the challenged provisions of R.A.
8371. Justice Puno also filed a separate
opinion sustaining all challenged
provisions of the law with the exception
of Section 1, Part II, Rule III of NCIP
Administrative Order No. 1, series of
1998, the Rules and Regulations
Implementing the IPRA, and Section 57
of the IPRA which he contends should
be interpreted as dealing with the largescale exploitation of natural resources
and should be read in conjunction with
Section 2, Article XII of the 1987
Constitution. On the other hand, Justice
Mendoza voted to dismiss the petition
solely on the ground that it does not
raise a justiciable controversy and
petitioners do not have standing to
question the constitutionality of R.A.
8371.
Seven (7) other members of the Court
voted to grant the petition. Justice
Panganiban filed a separate opinion
expressing the view that Sections 3 (a)
(b), 5, 6, 7 (a)(b), 8, and related
provisions
of
R.A.
8371
are
unconstitutional. He reserves judgment

on the constitutionality of Sections 58,

59, 65, and 66 of the law, which he
believes must await the filing of specific
cases by those whose rights may have
been violated by the IPRA. Justice Vitug
also filed a separate opinion expressing
the view that Sections 3(a), 7, and 57 of
R.A. 8371 are unconstitutional. Justices
Melo, Pardo, Buena, Gonzaga-Reyes,
and De Leon join in the separate
opinions of Justices Panganiban and
Vitug.
As the votes were equally divided (7 to 7)
and the necessary majority was not
obtained, the case was redeliberated
upon. However, after redeliberation, the
voting remained the same. Accordingly,
pursuant to Rule 56, Section 7 of the
Rules of Civil Procedure, the petition is
DISMISSED.
Attached hereto and made integral parts
thereof are the separate opinions of
Justices
Puno,
Vitug,
Kapunan,
Mendoza, and Panganiban.
SO ORDERED.
G.R. No. 162243
December
3, 2009
HON.
HEHERSON
ALVAREZ
substituted by HON. ELISEA G.
GOZUN, in her capacity as
Secretary of the Department of
Environment
and
Natural
Resources, Petitioner,
vs.
PICOP
RESOURCES,
INC., Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 164516
PICOP
RESOURCES,
INC., Petitioner,
vs.
HON.
HEHERSON
ALVAREZ
substituted by HON. ELISEA G.
GOZUN, in her capacity as
Secretary of the Department of
Environment
and
Natural
Resources Respondent.

x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 171875
THE HON. ANGELO T. REYES
(formerly Hon. Elisea G. Gozun),
in his capacity as Secretary of the
Department of Environment and
Natural
Resources
(DENR), Petitioner,
vs.
PAPER INDUSTRIES CORP. OF
THE
PHILIPPINES
(PICOP), Respondent.
RESOLUTION
CHICO-NAZARIO, J.:
The cause of action of PICOP Resources,
Inc. (PICOP) in its Petition for
Mandamus with the trial court is clear:
the government is bound by contract, a
1969 Document signed by then
President Ferdinand Marcos, to enter
into an Integrated Forest Management
Agreement (IFMA) with PICOP. Since
the remedy of mandamus lies only to
compel an officer to perform a
ministerial duty, and since the 1969
Document itself has a proviso requiring
compliance with the laws and the
Constitution, the issues in this Motion
for Reconsideration are the following:
(1) firstly, is the 1969 Document a
contract enforceable under the NonImpairment Clause of the Constitution,
so as to make the signing of the IFMA a
ministerial duty? (2) secondly, did
PICOP comply with all the legal and
constitutional requirements for the
issuance of an IFMA?
To recall, PICOP filed with the
Department of Environment and
Natural
Resources
(DENR)
an
application to have its Timber License
Agreement (TLA) No. 43 converted into
an IFMA. In the middle of the
processing of PICOPs application,
however, PICOP refused to attend
further meetings with the DENR.
Instead, on 2 September 2002, PICOP

filed before the Regional Trial Court

(RTC) of Quezon City a Petition for
Mandamus1 against
then
DENR
Secretary Heherson T. Alvarez. PICOP
seeks the issuance of a privileged writ of
mandamus to compel the DENR
Secretary to sign, execute and deliver an
IFMA to PICOP, as well as to
[I]ssue
the
corresponding
IFMA
assignment number on the area covered
by the IFMA, formerly TLA No. 43, as
amended; b) to issue the necessary
permit allowing petitioner to act and
harvest timber from the said area of TLA
No. 43, sufficient to meet the raw
material requirements of petitioners
pulp and paper mills in accordance with
the warranty and agreement of July 29,
1969 between the government and
PICOPs predecessor-in-interest; and c)
to honor and respect the Government
Warranties and contractual obligations
to PICOP strictly in accordance with the
warranty and agreement dated July 29,
[1969] between the government and
PICOPs predecessor-in-interest. x x x.2
On 11 October 2002, the RTC rendered a
Decision granting PICOPs Petition for
Mandamus, thus:
WHEREFORE, premises considered, the
Petition for Mandamus is hereby
GRANTED.
The Respondent DENR Secretary Hon.
Heherson Alvarez is hereby ordered:
1. to sign, execute and deliver the IFMA
contract and/or documents to PICOP
and issue the corresponding IFMA
assignment number on the area covered
by the IFMA, formerly TLA No. 43, as
amended;
2. to issue the necessary permit allowing
petitioner to act and harvest timber
from the said area of TLA No. 43,
sufficient to meet the raw material
requirements of petitioners pulp and
paper mills in accordance with the
warranty and agreement of July 29,

1969 between the government and

PICOPs predecessor-in-interest; and
3. to honor and respect the Government
Warranties and contractual obligations
to PICOP strictly in accordance with the
warranty and agreement dated July 29,
1999 (sic) between the government and
PICOPs
predecessor-in-interest
(Exhibits "H", "H-1" to "H-5",
particularly the following:
a) the area coverage of TLA No. 43,
which forms part and parcel of the
government warranties;
b) PICOP tenure over the said area of
TLA No. 43 and exclusive right to cut,
collect and remove sawtimber and
pulpwood for the period ending on April
26, 1977; and said period to be
renewable for [an]other 25 years subject
to compliance with constitutional and
statutory requirements as well as with
existing policy on timber concessions;
and
c) The peaceful and adequate enjoyment
by PICOP of the area as described and
specified in the aforesaid amended
Timber License Agreement No. 43.
The Respondent Secretary Alvarez is
likewise ordered to pay petitioner the
sum of P10 million a month beginning
May 2002 until the conversion of TLA
No. 43, as amended, to IFMA is formally
effected and the harvesting from the
said area is granted.3
On 25 October 2002, the DENR
Secretary
filed
a
Motion
for
Reconsideration.4 In a 10 February 2003
Order, the RTC denied the DENR
Secretarys Motion for Reconsideration
and granted PICOPs Motion for the
Issuance of Writ of Mandamus and/or
Writ of Mandatory Injunction.5 The fallo
of the 11 October 2002 Decision was
practically copied in the 10 February
2003 Order, although there was no
mention of the damages imposed
against
then
DENR
Secretary

Alvarez.6 The DENR Secretary filed a

Notice of Appeal7 from the 11 October
2002 Decision and the 10 February
2003 Order.
On 19 February 2004, the Seventh
Division of the Court of Appeals
affirmed8 the Decision of the RTC, to
wit:
WHEREFORE, the appealed Decision is
hereby AFFIRMED with modification
that the order directing then DENR
Secretary Alvarez "to pay petitionerappellee the sum of P10 million a month
beginning May, 2002 until the
conversion to IFMA of TLA No. 43, as
amended, is formally effected and the
harvesting from the said area is granted"
is hereby deleted. 9
Challenging the deletion of the damages
awarded to it, PICOP filed a Motion for
Partial
Reconsideration10 of
this
Decision, which was denied by the Court
of Appeals in a 20 July 2004
Resolution.11
The DENR Secretary and PICOP filed
with this Court separate Petitions for
Review of the 19 February 2004 Court of
Appeals Decision. These Petitions were
docketed as G.R. No. 162243 and No.
164516, respectively. These cases were
consolidated with G.R. No. 171875,
which relates to the lifting of a Writ of
Preliminary Injunction enjoining the
execution pending appeal of the
foregoing Decision.
On 29 November 2006, this Court
rendered the assailed Decision on the
Consolidated Petitions:
WHEREFORE, the Petition in G.R. No.
162243 is GRANTED. The Decision of
the Court of Appeals insofar as it
affirmed the RTC Decision granting the
Petition for Mandamus filed by Paper
Industries Corp. of the Philippines
(PICOP) is hereby REVERSED and SET
ASIDE. The Petition in G.R. No. 164516
seeking the reversal of the same

Decision insofar as it nullified the award

of damages in favor of PICOP is
DENIED for lack of merit. The Petition
in G.R. No. 171875, assailing the lifting
of
the
Preliminary
Mandatory
Injunction in favor of the Secretary of
Environment and Natural Resources is
DISMISSED on the ground of
mootness.12
On 18 January 2006, PICOP filed the
instant Motion for Reconsideration,
based on the following grounds:
I.
THE HONORABLE COURT ERRED IN
HOLDING THAT THE CONTRACT
WITH PRESIDENTIAL WARRANTY
SIGNED BY THE PRESIDENT OF THE
REPUBLIC ON 29 JUNE 1969 ISSUED
TO PICOP IS A MERE PERMIT OR
LICENSE AND IS NOT A CONTRACT,
PROPERTY OR PROPERTY RIGHT
PROTECTED BY THE DUE PROCESS
CLAUSE OF THE CONSTITUTION
II.
THE EVALUATION OF PICOPS
MANAGEMENT OF THE TLA 43
NATURAL
FOREST
CLEARLY
SHOWED
SATISFACTORY
PERFORMANCE FOR KEEPING THE
NATURAL
FOREST
GENERALLY
INTACT AFTER 50 YEARS OF FOREST
OPERATIONS. THIS COMPLETES THE
REQUIREMENT FOR AUTOMATIC
CONVERSION UNDER SECTION 9 OF
DAO 99-53.
III.
WITH
DUE
RESPECT,
THE
HONORABLE COURT, IN REVERSING
THE FINDINGS OF FACTS OF THE
TRIAL COURT AND THE COURT OF
APPEALS, MISAPPRECIATED THE
EVIDENCE,
TESTIMONIAL
AND
DOCUMENTARY, WHEN IT RULED
THAT:
i.
PICOP FAILED TO SUBMIT A FIVEYEAR FOREST PROTECTION PLAN

AND
A
SEVEN-YEAR
REFORESTATION PLAN FOR THE
YEARS UNDER REVIEW.
ii.
PICOP FAILED TO COMPLY WITH
THE
PAYMENT
OF
FOREST
CHARGES.
iii.
PICOP DID NOT COMPLY WITH THE
REQUIREMENT
FOR
A
CERTIFICATION FROM THE NCIP
THAT THE AREA OF TLA 43 DOES
NOT
OVERLAP
WITH
ANY
ANCESTRAL DOMAIN.
iv.
PICOP FAILED TO HAVE PRIOR
CONSULTATION
WITH
AND
APPROVAL FROM THE SANGUNIAN
CONCERNED, AS REQUIRED BY
SECTION 27 OF THE REPUBLIC ACT
NO. 7160, OTHERWISE KNOWN AS
THE LOCAL GOVERNMENT CODE OF
1991.
v.
PCIOP FAILED TO SECURE SOCIAL
ACCEPTABILITY
UNDER
PRESIDENTIAL DECREE NO. 1586.
IV
THE MOTIVATION OF ALVAREZ IN
RECALLING THE CLEARANCE FOR
AUTOMATIC
CONVERSION
HE
ISSUED ON 25 OCTOBER 2001 WAS
NOT DUE TO ANY SHORTCOMING
FROM PICOP BUT DUE TO HIS
DETERMINATION
TO
EXCLUDE
28,125
HECTARES
FROM
THE
CONVERSION AND OTHER THINGS.
On 15 December 2008, on Motion by
PICOP, the Third Division of this Court
resolved to refer the consolidated cases
at bar to the Court en banc. On 16
December 2008, this Court sitting en
banc resolved to accept the said cases
and set them for oral arguments. Oral
arguments were conducted on 10
February 2009.

PICOPs Cause of Action: Matters

PICOP Should Have Proven to Be
Entitled to a Writ of Mandamus
In seeking a writ of mandamus to
compel the issuance of an IFMA in its
favor, PICOP relied on a 29 July 1969
Document, the so-called Presidential
Warranty approved by then President
Ferdinand E. Marcos in favor of PICOPs
predecessor-in-interest,
Bislig
Bay
Lumber Company, Inc. (BBLCI).
PICOPs cause of action is summarized
in paragraphs 1.6 and 4.19 of its Petition
for Mandamus:
1.6 Respondent Secretary impaired the
obligation of contract under the said
Warranty and Agreement of 29 July
1969 by refusing to respect the tenure;
and its renewal for another twenty five
(25) years, of PICOP over the area
covered by the said Agreement which
consists of permanent forest lands with
an aggregate area of 121,587 hectares
and alienable and disposable lands with
an aggregate area of approximately
21,580 hectares, and petitioners
exclusive right to cut, collect and remove
sawtimber and pulpwood therein and
the peaceful and adequate enjoyment of
the said area as described and specified
in
petitioners
Timber
License
Agreement (TLA) No. 43 guaranteed by
the Government, under the Warranty
and Agreement of 29 July 1969.13
4.19 Respondent is in violation of the
Constitution and has impaired the
obligation of contract by his refusal to
respect: a) the tenurial rights of PICOP
over the forest area covered by TLA No.
43, as amended and its renewal for
another twenty five (25) years; b) the
exclusive right of PICOP to cut, collect
and remove sawtimber and pulpwood
therein; and c) PICOPs peaceful and
adequate enjoyment of the said area
which the government guaranteed under

the Warranty and Agreement of 29 July

1969.14
The grounds submitted by PICOP in its
Petition for Mandamus are as follows:
I
Respondent secretary has unlawfully
refused and/or neglected to sign and
execute the IFMA contract of PICOP
even as the latter has complied with all
the legal requirements for the automatic
conversion of TLA No. 43, as amended,
into an IFMA.
II
Respondent Secretary acted with grave
abuse of discretion and/or in excess of
jurisdiction in refusing to sign and
execute
PICOPs
IFMA contract,
notwithstanding that PICOP had
complied with all the requirements for
Automatic Conversion under DAO 9953, as in fact Automatic Conversion was
already cleared in October, 2001, and
was a completed process.
III
Respondent Secretary has impaired the
obligation of contract under a valid and
binding warranty and agreement of 29
July 1969 between the government and
PICOPs predecessor-in-interest, by
refusing to respect: a) the tenure of
PICOP, and its renewal for another
twenty five (25) years, over the TLA
No.43 area covered by said agreement;
b) the exclusive right to cut, collect and
remove sawtimber and pulpwood
timber; and c) the peaceful and
adequate enjoyment of the said area.
IV
As a result of respondent Secretarys
unlawful refusal and/or neglect to sign
and deliver the IFMA contract, and
violation of the constitutional rights of
PICOP against non-impairment of the
obligation of contract (Sec. 10, Art. III,
1997 [sic] Constitution), PICOP suffered
grave and irreparable damages.15

Petitions for Mandamus are governed by

Rule 65 of the Rules of Court, Section 3
of which provides:
SEC. 3. Petition for mandamus.
When any tribunal, corporation, board,
officer or person unlawfully neglects the
performance of an act which the law
specifically enjoins as a duty resulting
from an office, trust, or station, or
unlawfully excludes another from the
use and enjoyment of a right or office to
which such other is entitled, and there is
no other plain, speedy and adequate
remedy in the ordinary course of law,
the person aggrieved thereby may file a
verified petition in the proper court,
alleging the facts with certainty and
praying that judgment be rendered
commanding
the
respondent,
immediately or at some other time to be
specified by the court, to do the act
required to be done to protect the rights
of the petitioner, and to pay the
damages sustained by the petitioner by
reason of the wrongful acts of the
respondent. (Emphasis supplied.)
PICOP is thus asking this Court to
conclude that the DENR Secretary is
specifically enjoined by law to issue an
IFMA in its favor. An IFMA, as defined
by DENR Administrative Order (DAO)
No. 99-53,16 is [A] production-sharing contract entered
into by and between the DENR and a
qualified applicant wherein the DENR
grants to the latter the exclusive right to
develop, manage, protect and utilize a
specified area of forestland and forest
resource therein for a period of 25 years
and may be renewed for another 25-year
period, consistent with the principle of
sustainable
development
and
in
accordance with an approved CDMP,
and under which both parties share in
its produce.17
PICOP stresses the word "automatic" in
Section 9 of this DAO No. 99-53:

Sec. 9. Qualifications of Applicants.

The applicants for IFMA shall be:
(a) A Filipino citizen of legal age; or,
(b)
Partnership,
cooperative
or
corporation whether public or private,
duly registered under Philippine laws.
However, in the case of application for
conversion of TLA into IFMA, an
automatic conversion after proper
evaluation shall be allowed, provided the
TLA holder shall have signified such
intention prior to the expiry of the TLA,
PROVIDED further, that the TLA holder
has showed satisfactory performance
and have complied in the terms of
condition of the TLA and pertinent rules
and regulations. (Emphasis supplied.)18
This administrative regulation provision
allowing automatic conversion after
proper evaluation can hardly qualify as a
law, much less a law specifically
enjoining the execution of a contract. To
enjoin is "to order or direct with
urgency; to instruct with authority; to
command."19 "Enjoin is a mandatory
word, in legal parlance, always; in
common parlance, usually."20 The word
"allow," on the other hand, is not
equivalent to the word "must," and is in
no sense a command.21
As an extraordinary writ, the remedy of
mandamus lies only to compel an officer
to perform a ministerial duty, not a
discretionary one; mandamus will not
issue to control the exercise of discretion
of a public officer where the law imposes
upon him the duty to exercise his
judgment in reference to any manner in
which he is required to act, because it is
his judgment that is to be exercised and
not that of the court.22
The execution of agreements, in itself,
involves the exercise of discretion.
Agreements are products of negotiations
and mutual concessions, necessitating
evaluation of their provisions on the
part of both parties. In the case of the

IFMA, the evaluation on the part of the

government is specifically mandated in
the afore-quoted Section 3 of DAO No.
99-53. This evaluation necessarily
involves the exercise of discretion and
judgment on the part of the DENR
Secretary, who is tasked not only to
negotiate the sharing of the profit
arising from the IFMA, but also to
evaluate the compliance with the
requirements on the part of the
applicant.
Furthermore, as shall be discussed later,
the period of an IFMA that was merely
automatically converted from a TLA in
accordance with Section 9, paragraph 2
of DAO No. 99-53 would only be for the
remaining period of the TLA. Since the
TLA of PICOP expired on 26 April 2002,
the IFMA that could have been granted
to PICOP via the automatic conversion
provision in DAO No. 99-53 would have
expired on the same date, 26 April 2002,
and the PICOPs Petition for Mandamus
would have become moot.
This is where the 1969 Document, the
purported Presidential Warranty, comes
into play. When PICOPs application
was brought to a standstill upon the
evaluation that PICOP had yet to comply
with the requirements for such
conversion, PICOP refused to attend
further meetings with the DENR and
instead filed a Petition for Mandamus,
insisting that the DENR Secretary had
impaired the obligation of contract by
his refusal to respect: a) the tenurial
rights of PICOP over the forest area
covered by TLA No. 43, as amended, and
its renewal for another twenty-five (25)
years; b) the exclusive right of PICOP to
cut, collect and remove sawtimber and
pulpwood therein; and c) PICOPs
peaceful and adequate enjoyment of the
said area which the government
guaranteed under the Warranty and
Agreement of 29 July 1969. 23

PICOP is, thus, insisting that the

government is obligated by contract to
issue an IFMA in its favor because of the
1969 Document.
A contract, being the law between the
parties, can indeed, with respect to the
State when it is a party to such contract,
qualify as a law specifically enjoining the
performance of an act. Hence, it is
possible that a writ of mandamus may
be issued to PICOP, but only if it
proves both of the following:
1) That the 1969 Document is a contract
recognized under the non-impairment
clause; and
2) That the 1969 Document specifically
enjoins the government to issue the
IFMA.
If PICOP fails to prove any of these two
matters, the grant of a privileged writ of
mandamus is not warranted. This was
why we pronounced in the assailed
Decision that the overriding controversy
involved in the Petition was one of
law.24 If PICOP fails to prove any of
these two matters, more significantly its
assertion that the 1969 Document is a
contract, PICOP fails to prove its cause
of action.25 Not even the satisfactory
compliance
with
all
legal
and
administrative requirements for an
IFMA would save PICOPs Petition for
Mandamus.
The reverse, however, is not true. The
1969 Document expressly states that the
warranty as to the tenure of PICOP is
"subject
to
compliance
with
constitutional
and
statutory
requirements as well as with existing
policy on timber concessions." Thus, if
PICOP proves the two above-mentioned
matters, it still has to prove compliance
with statutory and administrative
requirements for the conversion of its
TLA into an IFMA.
Exhaustion of Administrative Remedies

PICOP uses the same argument that

the government is bound by contract to
issue the IFMA in its refusal to
exhaust all administrative remedies by
not appealing the alleged illegal nonissuance of the IFMA to the Office of the
President. PICOP claimed in its Petition
for Mandamus with the trial court that:
1.10 This petition falls as an exception to
the exhaustion of administrative
remedies. The acts of respondent DENR
Secretary complained of in this petition
are patently illegal; in derogation of the
constitutional rights of petitioner
against
non-impairment
of
the
obligation
of
contracts;
without
jurisdiction, or in excess of jurisdiction
or so capriciously as to constitute an
abuse of discretion amounting to excess
or lack of jurisdiction; and moreover,
the failure or refusal of a high
government
official
such
as
a
Department head from whom relief is
brought to act on the matter was
considered equivalent to exhaustion of
administrative remedies (Sanoy v.
Tantuico, 50 SCRA 455 [1973]), and
there are compelling and urgent reasons
for judicial intervention (Bagatsing v.
Ramirez, 74 SCRA 306 [1976]).
Thus, if there has been no impairment of
the obligation of contracts in the DENR
Secretarys non-issuance of the IFMA,
the proper remedy of PICOP in claiming
that it has complied with all statutory
and administrative requirements for the
issuance of the IFMA should have been
with the Office of the President. This
makes the issue of the enforceability of
the 1969 Document as a contract even
more significant.
The Nature and Effects of the Purported
29 July 1969 Presidential Warranty
Base Metals Case
PICOP challenges our ruling that the
1969 Document is not a contract. Before
we review this finding, however, it must

be pointed out that one week after the

assailed Decision, another division of
this Court promulgated a Decision
concerning the very same 1969
Document. Thus, in PICOP Resources,
Inc. v. Base Metals Mineral Resources
Corporation,26 five other Justices who
were still unaware of this Divisions
Decision,27 came up with the same
conclusion as regards the same issue of
whether former President Marcoss
Presidential Warranty is a contract:
Finally, we do not subscribe to PICOPs
argument that the Presidential Warranty
dated September 25, 1968 is a contract
protected by the non-impairment clause
of the 1987 Constitution.
An examination of the Presidential
Warranty at once reveals that it simply
reassures PICOP of the governments
commitment to uphold the terms and
conditions of its timber license and
guarantees PICOPs peaceful and
adequate possession and enjoyment of
the areas which are the basic sources of
raw materials for its wood processing
complex. The warranty covers only the
right to cut, collect, and remove timber
in its concession area, and does not
extend to the utilization of other
resources, such as mineral resources,
occurring within the concession.
The Presidential Warranty cannot be
considered a contract distinct from
PTLA No. 47 and FMA No. 35. We agree
with the OSGs position that it is merely
a collateral undertaking which cannot
amplify PICOPs rights under its timber
license. Our definitive ruling in Oposa v.
Factoran that a timber license is not a
contract within the purview of the nonimpairment clause is edifying. We
declared:
Needless to say, all licenses may thus be
revoked or rescinded by executive
action. It is not a contract, property or a
property right protected by the due

process clause of the Constitution. In

Tan vs. Director of Forestry, this Court
held:
"x x x A timber license is an instrument
by which the State regulates the
utilization and disposition of forest
resources to the end that public welfare
is promoted. A timber license is not a
contract within the purview of the due
process clause; it is only a license or a
privilege, which can be validly
withdrawn whenever dictated by public
interest or public welfare as in this case.
A license is merely a permit or privilege
to do what otherwise would be unlawful,
and is not a contract between the
authority, federal, state, or municipal,
granting it and the person to whom it is
granted; neither is it a property or a
property right, nor does it create a
vested right; nor is it taxation' (C.J.
168). Thus, this Court held that the
granting of license does not create
irrevocable rights, neither is it property
or property rights (People vs. Ong Tin,
54 O.G. 7576). x x x"
We reiterated this pronouncement in
Felipe Ysmael, Jr. & Co., Inc. vs. Deputy
Executive Secretary:
"x x x Timber licenses, permits and
license agreements are the principal
instruments by which the State regulates
the utilization and disposition of forest
resources to the end that public welfare
is promoted. And it can hardly be
gainsaid that they merely evidence a
privilege granted by the State to
qualified entities, and do not vest in the
latter a permanent or irrevocable right
to the particular concession area and the
forest products therein. They may be
validly amended, modified, replaced or
rescinded by the Chief Executive when
national interests so require. Thus, they
are not deemed contracts within the
purview of the due process of law clause
[See Sections 3(ee) and 20 of Pres.

Decree No. 705, as amended. Also, Tan

v. Director of Forestry, G.R. No. L24548, October 27, 1983, 125 SCRA
302]."
Since timber licenses are not contracts,
the non-impairment clause, which
reads:
"SEC. 10. No law impairing the
obligation of contracts shall be passed."
cannot be invoked.
The Presidential Warranty cannot, in
any manner, be construed as a
contractual undertaking assuring PICOP
of exclusive possession and enjoyment
of its concession areas. Such an
interpretation would result in the
complete abdication by the State in
favor of PICOP of the sovereign power to
control and supervise the exploration,
development and utilization of the
natural resources in the area.28
The Motion for Reconsideration was
denied with finality on 14 February
2007.
A
Second
Motion
for
Reconsideration filed by PICOP was
denied on 23 May 2007.
PICOP insists that the pronouncement
in Base Metals is a mere obiter dictum,
which would not bind this Court in
resolving
this
Motion
for
Reconsideration. In the oral arguments,
however, upon questioning from the
ponente himself of Base Metals, it was
agreed that the issue of whether the
1969 Document is a contract was
necessary in the resolution of Base
Metals:
JUSTICE TINGA:
And do you confirm that one of the very
issues raised by PICOP in that case
[PICOP Resources Inc. v. Base Metal
Mineral
Resources
Corporation]
revolves around its claim that a
Presidential Warranty is protected by
the non-impairment c[l]ause of the
Constitution.
ATTY. AGABIN:

Yes, I believe that statement was made

by the Court, your Honor.
JUSTICE TINGA:
Yes. And that claim on the part of PICOP
necessarily implies that the Presidential
Warranty according to PICOP is a
contract protected by the nonimpairment clause.
ATTY. AGABIN:
Yes, Your Honor.
JUSTICE TINGA:
Essentially, the PICOP raised the issue
of whether the Presidential Warranty is
a contract or not.
ATTY. AGABIN:
Yes, Your Honor.
JUSTICE TINGA:
And therefore any ruling on the part of
the Court on that issue could not be an
obiter dictum.
ATTY. AGABIN:
Your Honor, actually we believe that the
basic issue in that case was whether or
not Base Metals could conduct mining
activities underneath the forest reserve
allotted to PICOP and the Honorable
Court ruled that the Mining Act of 1995
as well as the Department Order of
DENR does not disallow mining activity
under a forest reserve.
JUSTICE TINGA:
But it was PICOP itself which raised the
claim that a Presidential Warranty is a
contract. And therefore be, should be
protected on the under the nonimpairment clause of the Constitution.
ATTY. AGABIN:
Yes, Your Honor. Except that
JUSTICE TINGA:
So, how can you say now that the Court
merely uttered, declared, laid down an
obiter dictum in saying that the
Presidential Warranty is not a contract,
and it is not being a contract, it is not
prohibited by the non-impairment
clause.
ATTY. AGABIN:

This Honorable Court could have just

ruled, held that the mining law allows
mining activities under a forest reserve
without deciding on that issue that was
raised by PICOP, your Honor, and
therefore we believe.
JUSTICE TINGA:
It could have been better if PICOP has
not raised that issue and had not
claimed that the Presidential Warranty
is not a contract.
ATTY. AGABIN:
Well, that is correct, your Honor except
that the Court could have just avoided
that question. Because
JUSTICE TINGA:
Why[?]
ATTY. AGABIN:
It already settled the issue, the basic
issue.
JUSTICE TINGA:
Yes, because the Court in saying that
merely reiterated a number of rulings to
the effect that the Presidential
Warranty, a Timber License for that
matter is not a contract protected by the
non-impairment laws.
ATTY. AGABIN:
Well, it is our submission, your Honor,
that it is obiter because, that issue even
a phrase by PICOP was not really fully
argued by the parties for the Honorable
Court and it seems from my reading at
least it was just an aside given by the
Honorable Court to decide on that issue
raised by PICOP but it was not necessary
to the decision of the court.
JUSTICE TINGA:
It was not necessary[?]
ATTY. AGABIN:
To the decision of the Court.
JUSTICE TINGA:
It was.
ATTY. AGABIN:
It was not necessary.
JUSTICE TINGA:
It was.

ATTY. AGABIN:
Yes.
JUSTICE TINGA:
And PICOP devoted quite a number of
pages in [its] memorandum to that issue
and so did the Court [in its Decision].
ATTY. AGABIN:
Anyway, your Honor, we beg the Court
to revisit, not to29
Interpretation of the 1969 Document
That Would Be in Harmony with the
Constitution
To remove any doubts as to the contents
of the 1969 Document, the purported
Presidential Warranty, below is a
complete text thereof:
Republic
of
the
Philippines
Department of Agriculture and Natural
Resources
OFFICE
OF
THE
SECRETARY
Diliman, Quezon City
D-53, Licenses (T.L.A. No. 43)
Bislig
Bay
Lumber
Co.,
Inc.
(Bislig, Surigao)
July 29, 1969
Bislig
Bay
Lumber
Co.,
Inc.
[unreadable
word]
Bldg.
Makati, Rizal
S i r s:
This has reference to the request of the
Board of Investments through its
Chairman in a letter dated July 16, 1969
for a warranty on the boundaries of your
concession area under Timber License
Agreement No. 43, as amended.
We are made to understand that your
company is committed to support the
first large scale integrated wood
processing complex hereinafter called:
"The Project") and that such support will
be provided not only in the form of the
supply of pulpwood and other wood
materials from your concession but also
by making available funds generated out
of your own operations, to supplement
PICOPs operational sources of funds
and other financial arrangements made

by him. In order that your company may

provide such support effectively, it is
understood that you will call upon your
stockholders to take such steps as may
be necessary to effect a unification of
managerial, technical, economic and
manpower resources between your
company and PICOP.
It is in the public interest to promote
industries that will enhance the proper
conservation of our forest resources as
well as insure the maximum utilization
thereof to the benefit of the national
economy. The administration feels that
the PICOP project is one such industry
which should enjoy priority over the
usual logging operations hitherto
practiced by ordinary timber licensees:
For this reason, we are pleased to
consider favorably the request.
We confirm that your Timber License
Agreement No. 43, as amended (copy of
which is attached as Annex "A" hereof
which shall form part and parcel of this
warranty) definitely establishes the
boundary lines of your concession area
which consists of permanent forest
lands with an aggregate area of 121,587
hectares and alienable or disposable
lands with an aggregate area of
approximately 21,580 hectares.
We further confirm that your tenure
over the area and exclusive right to cut,
collect and remove sawtimber and
pulpwood shall be for the period ending
on April 26, 1977; said period to be
renewable for other 25 years subject to
compliance with constitutional and
statutory requirements as well as with
existing policy on timber concessions.
The peaceful and adequate enjoyment
by you of your area as described and
specified in your aforesaid amended
Timber License Agreement No. 43 is
hereby
warranted
provided
that
pertinent laws, regulations and the

terms and conditions of your license

agreement are observed.
Very truly yours,
(Sgd.)
FERNANDO
LOPEZ
Secretary
of
Agriculture
and Natural Resources
Encl.:
RECOMMENDED BY:
(Sgd.)
JOSE
VIADO
Acting Director of Forestry
APPROVED:
(Sgd.) FERDINAND E. MARCOS
President of the Philippines
ACCEPTED:
BISLIG BAY LBR. CO., INC.
By:
(Sgd.)
JOSE
E.
SORIANO
President
PICOP interprets this document in the
following manner:
6.1 It is clear that the thrust of the
government warranty is to establish a
particular area defined by boundary
lines of TLA No. 43 for the PICOP
Project. In consideration for PICOPs
commitment to pursue and establish the
project
requiring
huge
investment/funding from stockholders
and
lending
institutions,
the
government provided a warranty that
ensures the continued and exclusive
right of PICOP to source its raw
materials needs from the forest and
renewable trees within the areas
established.
6.2 As a long-term support, the warranty
covers the initial twenty five (25) year
period and is renewable for periods of
twenty five (25) years provided the
project continues to exist
and
operate. Very notably, the wording of
the Presidential Warranty connotes that
for as long as the holder complies with
all the legal requirements, the term of
the warranty is not limited to fifty (50)
years but other twenty five (25) years.

6.3 Note must be made that the

government warranted that PICOPs
tenure over the area and exclusive right
to cut, collect and remove saw timber
and pulpwood shall be for the period
ending on 26 April 1977 and said period
to be renewable for other 25 years
subject
to
"compliance
with
constitutional
and
statutory
requirements as well as existing policy
on timber requirements". It is clear that
the renewal for other 25 years, not
necessarily for another 25 years is
guaranteed. This explains why on 07
October 1977, TLA No. 43, as amended,
was automatically renewed for another
period of twenty five (25) years to expire
on 26 April 2002.30
PICOPs interpretation of the 1969
Document cannot be sustained. PICOPs
claim that the term of the warranty is
not limited to fifty years, but that it
extends to other fifty years, perpetually,
violates Section 2, Article XII of the
Constitution which provides:
Section 2. All lands of the public
domain,
waters,
minerals,
coal,
petroleum, and other mineral oils, all
forces
of
potential
energy,
fisheries, forests or timber, wildlife, flora
and
fauna, and
other
natural
resources are owned by the State. With
the exception of agricultural lands, all
other natural resources shall not be
alienated.
The
exploration,
development, and utilization of natural
resources shall be under the full control
and supervision of the State. The State
may directly undertake such activities,
or it may enter into co-production, joint
venture,
or
production-sharing
agreements with Filipino citizens, or
corporations or associations at least
sixty per centum of whose capital is
owned
by
such
citizens.
Such
agreements may be for a period not
exceeding twenty-five years, renewable

for not more than twenty-five years, and

under such terms and conditions as may
be provided by law.In cases of water
rights for irrigation, water supply
fisheries, or industrial uses other than
the development of water power,
beneficial use may be the measure and
limit of the grant.
Mr.
Justice
Dante
O.
Tingas
interpretation of the 1969 Document is
much more in accord with the laws and
the Constitution. What one cannot do
directly, he cannot do indirectly. Forest
lands cannot be alienated in favor of
private entities. Granting to private
entities, via a contract, a permanent,
irrevocable, and exclusive possession of
and right over forest lands is
tantamount to granting ownership
thereof. PICOP, it should be noted,
claims nothing less than having
exclusive, continuous and uninterrupted
possession
of
its
concession
areas,31 where all other entrants are
illegal,32 and where so-called "illegal
settlers
and
squatters"
are
apprehended.33
IFMAs
are
production-sharing
agreements concerning the development
and utilization of natural resources. As
such, these agreements "may be for a
period not exceeding twenty-five years,
renewable for not more than twenty-five
years, and under such terms and
conditions as may be provided by law."
Any superior "contract" requiring the
State to issue TLAs and IFMAs
whenever
they
expire
clearly
circumvents Section 2, Article XII of the
Constitution, which provides for the
only permissible schemes wherein the
full control and supervision of the State
are not derogated: co-production, joint
venture,
or
production-sharing
agreements within the time limit of
twenty-five years, renewable for another
twenty-five years.

On its face, the 1969 Document was

meant to expire on 26 April 2002, upon
the expiration of the expected extension
of the original TLA period ending on 26
April 1977:
We further confirm that your tenure
over the area and exclusive right to cut,
collect and remove sawtimber and
pulpwood shall be for the period ending
on April 26, 1977; said period to be
renewable for other 25 years subject to
compliance with constitutional and
statutory requirements as well as with
existing
policy
on
timber
concessions.1avvphi1
Any interpretation extending the
application of the 1969 Document
beyond 26 April 2002 and any
concession that may be granted to
PICOP beyond the said date would
violate the Constitution, and no amount
of legal hermeneutics can change that.
Attempts of PICOP to explain its way
out of this Constitutional provision only
led to absurdities, as exemplified in the
following excerpt from the oral
arguments:
JUSTICE CARPIO:
The maximum trend of agreement to
develop and utilize natural resources
like forest products is 25 years plus
another 25 years or a total of 50 years
correct?
ATTY. AGABIN
Yes, Your Honor.
JUSTICE CARPIO:
That is true for the 1987, 1973, 1935
Constitution, correct?
ATTY. AGABIN:
Yes, Your Honor.
JUSTICE CARPIO:
The TLA here, TLA 43, expired, the first
25 years expired in 1977, correct?
ATTY. AGABIN:
Yes, Your Honor.
JUSTICE CARPIO:

And it was renewed for another 25 years

until 2002, the 50th year?
ATTY. AGABIN:
Yes, Your Honor.
JUSTICE CARPIO:
Now, could PICOP before the end of the
50th year lets say in 2001, one year
before the expiration, could it have
asked for an extension of another 25
years of its TLA agreement[?]
ATTY. AGABIN:
I believe so, Your Honor.
JUSTICE CARPIO:
But the Constitution says, maximum of
fifty years. How could you ask for
another 25 years of its TLA.
ATTY. AGABIN:
Well, your Honor, we believe on a
question like this, this Honorable Court
should balance the interest.
JUSTICE CARPIO:
The Constitution is very clear, you have
only a maximum of 50 years, 25 plus
another 25. PICOP could never have
applied for an extension, for a third 25year term whether under the 1935
Constitution, the 1973 Constitution and
the 1987 Constitution, correct?
ATTY. AGABIN:
Your Honor, except that we are invoking
the warranty, the terms of the
warranty.
JUSTICE CARPIO:
Can the warranty prevail over the
Constitution?
ATTY. AGABIN:
Well, it is a vested right, your Honor.
JUSTICE CARPIO:
Yes, but whatever it is, can it prevail
over the Constitution?
ATTY. AGABIN:
The Constitution itself provides that
vested rights should be .
JUSTICE CARPIO:
If it is not in violation of specific
provision of the Constitution. The
Constitution says, 25 years plus another

25 years, thats the end of it. You mean

to say that a President of the Philippines
can give somebody 1,000 years license?
ATTY. AGABIN:
Well, that is not our position, Your
Honor. Because our position is that .
JUSTICE CARPIO:
My question is, what is the maximum
term, you said 50 years. So, my next
question is, can PICOP apply for an
extension of another 25 years after
2002, the 50th year?
ATTY. AGABIN:
Yes, based on the contract of warranty,
Your Honor, because the contract of
warranty.
JUSTICE CARPIO:
But in the PICOP license it is very clear,
it says here, provision 28, it says the
license agreement is for a total of 50
years. I mean it is very simple, the
President or even Congress cannot pass
a law extending the license, whatever
kind of license to utilize natural
resources for more than fifty year[s]. I
mean even the law cannot do that. It
cannot prevail over the Constitution. Is
that correct, Counsel?
ATTY. AGABIN:
It is correct, Your Honor, except that in
this case, what is actually our
application is that the law provides for
the conversion of existing TLA into
IFMA.
JUSTICE CARPIO:
So, they file the petition for conversion
before the end of the 50th year for
IFMA.
ATTY. AGABIN:
Yes, Your Honor.
JUSTICE CARPIO:
But IFMA is the same, it is based on
Section 2, Article 12 of the Constitution,
develop and utilize natural resources
because as you said when the new
constitution took effect we did away
with the old licensing regime, we have

now co-production, a production

sharing,
joint
venture,
direct
undertaking but still the same
developing and utilizing the natural
resources, still comes from section 2,
Art. 12 of the Constitution. It is still a
license but different format now.
ATTY. AGABIN:
It is correct, Your Honor, except that the
regimes of joint venture, co-production
and production sharing are what is
referred to in the constitution, Your
Honor, and still covered
JUSTICE CARPIO:
Yes, but it is covered by same 25 year[s],
you mean to say people now can
circumvent the 50 year maximum term
by calling their TLA as IFMA and after
fifty years calling it ISMA, after another
50 years call it MAMA.
ATTY. AGABIN:
Yes, Your Honor. Because
JUSTICE CARPIO:
It can be done.
ATTY. AGABIN:
That is provided for by the department
itself.34
PICOP is, in effect, arguing that the
DENR issued DAO No. 99-53 in order to
provide a way to circumvent the
provisions of the Constitution limiting
agreements for the utilization of natural
resources to a maximum period of fifty
years. Official duties are, however,
disputably considered to be regularly
performed,35 and good faith is always
presumed.
DAO No. 99-53 was issued to change the
means by which the government enters
into an agreement with private entities
for the utilization of forest products.
DAO No. 99-53 is a late response to the
change in the constitutional provisions
on natural resources from the 1973
Constitution, which allowed the granting
of licenses to private entities, 36 to the
present Constitution, which provides for

co-production,
joint
venture,
or
production-sharing agreements as the
permissible schemes wherein private
entities may participate in the utilization
of forest products. Since the granting of
timber licenses ceased to be a
permissible scheme for the participation
of private entities under the present
Constitution, their operations should
have ceased upon the issuance of DAO
No. 99-53, the rule regulating the
schemes under the present Constitution.
This would be iniquitous to those with
existing TLAs that would not have
expired yet as of the issuance of DAO
No. 99-53, especially those with new
TLAs that were originally set to expire
after 10 or even 20 or more years. The
DENR thus inserted a provision in DAO
No. 99-53 allowing these TLA holders to
finish the period of their TLAs, but this
time as IFMAs, without the rigors of
going through a new application, which
they have probably just gone through a
few years ago.
Such an interpretation would not only
make DAO No. 99-53 consistent with
the provisions of the Constitution, but
would
also
prevent
possible
discrimination against new IFMA
applicants:
ASSOCIATE JUSTICE DE CASTRO:
I ask this question because of your
interpretation that the period of the
IFMA, if your TLA is converted into
IFMA, would cover a new a fresh period
of twenty-five years renewable by
another period of twenty-five years.
DEAN AGABIN:
Yes, Your Honor.
ASSOCIATE JUSTICE DE CASTRO:
Dont you think that will, in effect, be
invidious discrimination with respect to
other applicants if you are granted a
fresh period of twenty-five years
extendible to another twenty-five years?
DEAN AGABIN:

I dont think it would be, Your Honor,

considering that the IFMA is different
regime from the TLA. And not only that,
there are considerations of public health
and ecology which should come into
play in this case, and which we had
explained in our opening statement and,
therefore
the
provision
of
the
Constitution on the twenty-five limits
for renewal of co-production, joint
venture
and
production
sharing
agreements, should be balanced with
other values stated in the Constitution,
like the value of balanced ecology, which
should be in harmony with the rhythm
of nature, or the policy of forest
preservation in Article XII, Section 14 of
the Constitution. These are all important
policy considerations which should be
balanced against the term limits in
Article II of the Constitution.
ASSOCIATE JUSTICE DE CASTRO:
The provision of this Administrative
Order regarding automatic conversion
may be reasonable, if, I want to know if
you agree with me, if we limit this
automatic conversion to the remaining
period of the TLA, because in that case
there will be a valid ground to make a
distinction between those with existing
TLA and those who are applying for the
first time for IFMA?
DEAN AGABIN:
Well, Your Honor, we beg to disagree,
because as I said TLAs are completely
different from IFMA. The TLA has no
production sharing or co-production
agreement or condition. All that the
licensee has to do is, to pay forest
charges, taxes and other impositions
from the local and national government.
On the other hand, the IFMAs contained
terms and conditions which are
completely different, and that they
either impose co-production, production
sharing or joint venture terms. So its a

completely different regime, Your

Honor.
ASSOCIATE JUSTICE DE CASTRO:
Precisely, that is the reason why there
should be an evaluation of what you
mentioned earlier of the development
plan.
DEAN AGABIN:
Yes, Your Honor.
ASSOCIATE JUSTICE DE CASTRO:
So it will be reasonable to convert a TLA
into an IFMA without considering the
development plan submitted by other
applicants or the development plan itself
of one seeking conversion into IFMA if it
will only be limited to the period, the
original period of the TLA. But once you
go beyond the period of the TLA, then
you will be, the DENR is I think should
evaluate the different proposals of the
applicants if we are thinking of a fresh
period of twenty-five years, and which is
renewable under the Constitution by
another twenty-five years. So the
development plan will be important in
this case, the submission of the
development plan of the different
applicants must be considered. So I
dont understand why you mentioned
earlier that the development plan will
later on be a subject matter of
negotiation between the IFMA grantee
and the government. So it seems that it
will be too late in the day to discuss that
if you have already converted the TLA
into IFMA or if the government has
already granted the IFMA, and then it
will later on study the development plan,
whether it is viable or not, or it is
sustainable or not, and whether the
development plan of the different
applicants are, are, which of the
development plan of the different
applicants
is
better
or
more
advantageous to the government.37
PICOP insists that the alleged
Presidential Warranty, having been

signed on 29 July 1969, could not have

possibly considered the limitations yet
to be imposed by future issuances, such
as the 1987 Constitution. However,
Section 3, Article XVIII of said
Constitution, provides:
Section 3. All existing laws, decrees,
executive orders, proclamations, letters
of instructions, and other executive
issuances not inconsistent with this
Constitution shall remain operative until
amended, repealed, or revoked.
In the recent case Sabio v. Gordon, 38 we
ruled that "(t)he clear import of this
provision is that all existing laws,
executive orders, proclamations, letters
of instructions and other executive
issuances inconsistent or repugnant to
the Constitution are repealed."
When a provision is susceptible of two
interpretations, "the one that will render
them operative and effective and
harmonious with other provisions of
law"39 should be adopted. As the
interpretations in the assailed Decision
and in Mr. Justice Tingas ponencia are
the ones that would not make the
subject
Presidential
Warranty
unconstitutional, these are what we shall
adopt.
Purpose of the 1969 Document:
Assurance That the Boundaries of Its
Concession Area Would Not Be Altered
Despite the Provision in the TLA that
the DENR Secretary Can Amend Said
Boundaries
In the assailed Decision, we ruled that
the 1969 Document cannot be
considered a contract that would bind
the government regardless of changes in
policy and the demands of public
interest and social welfare. PICOP
claims this conclusion "did not take into
consideration that PICOP already had a
valid and current TLA before the
contract with warranty was signed in
1969."40 PICOP goes on: "The TLA is a

license that equips any TLA holder in

the country for harvesting of timber. A
TLA is signed by the Secretary of the
DANR now DENR. The Court ignored
the significance of the need for another
contract with the Secretary of the DANR
but this time with the approval of the
President of the Republic."41 PICOP then
asks us: "If PICOP/BBLCI was only an
ordinary TLA holder, why will it go
through the extra step of securing
another contract just to harvest timber
when the same can be served by the TLA
signed only by the Secretary and not
requiring the approval of the President
of the Republic(?)"42
The answer to this query is found in TLA
No. 43 itself wherein, immediately after
the boundary lines of TLA No. 43 were
established, the following conditions
were given:
This license is granted to the said party
of the second part upon the following
express conditions:
I. That authority is granted hereunder to
the party of the second part43 to cut,
collect or remove firewood or other
minor forest products from the area
embraced in this license agreement
except as hereinafter provided.
II. That the party of the first part 44 may
amend or alter the description of the
boundaries of the area covered by this
license agreement to conform with
official surveys and that the decision of
the party of the first part as to the exact
location of the said boundaries shall be
final.
III. That if the party of the first part
deems it necessary to establish on the
ground the boundary lines of the area
granted under this license agreement,
the party of the second part shall furnish
to the party of the first part or its
representatives as many laborers as it
needs and all the expenses to be
incurred on the work including the

wages of such laborers shall be paid by

the party of the second part.45
Thus, BBLCI needed an assurance that
the boundaries of its concession area, as
established in TLA No. 43, as amended,
would not be altered despite this
provision. Hence, BBLCI endeavored to
obtain the 1969 Document, which
provides:
We confirm that your Timber License
Agreement No. 43, as amended (copy of
which is attached as Annex "A" hereof
which shall form part and parcel of this
warranty) definitely establishes the
boundary lines of your concession area
which consists of permanent forest
lands with an aggregate area of 121,587
hectares and alienable or disposable
lands with an aggregate area of
approximately 21,580 hectares.
We further confirm that your tenure
over the area and exclusive right to cut,
collect and remove sawtimber and
pulpwood shall be for the period ending
on April 26, 1977; said period to be
renewable for other 25 years subject to
compliance with constitutional and
statutory requirements as well as with
existing policy on timber concessions.
The peaceful and adequate enjoyment
by you of your area as described and
specified in your aforesaid amended
Timber License Agreement No. 43 is
hereby
warranted
provided
that
pertinent laws, regulations and the
terms and conditions of your license
agreement are observed.46
In Koa v. Court of Appeals,47 we ruled
that a warranty is a collateral
undertaking and is merely part of a
contract. As a collateral undertaking, it
follows the principal wherever it goes.
When this was pointed out by the
Solicitor General, PICOP changed its
designation of the 1969 Document from
"Presidential Warranty" or "government
warranty" in all its pleadings prior to our

Decision, to "contract with warranty" in

its Motion for Reconsideration. This,
however, is belied by the statements in
the 29 July 1969 Document, which
refers to itself as "this warranty."
Re: Allegation That There Were Mutual
Contract Considerations
Had the 29 July 1969 Document been
intended as a contract, it could have
easily said so. More importantly, it could
have clearly defined the mutual
considerations of the parties thereto. It
could have also easily provided for the
sanctions for the breach of the mutual
considerations specified therein. PICOP
had vigorously argued that the 1969
Document was a contract because of
these mutual considerations, apparently
referring to the following paragraph of
the 1969 Document:
We are made to understand that your
company is committed to support the
first large scale integrated wood
processing complex hereinafter called:
"The Project") and that such support will
be provided not only in the form of the
supply of pulpwood and other wood
materials from your concession but also
by making available funds generated out
of your own operations, to supplement
PICOPs operational surces (sic) of
funds and other financial arrangements
made by him. In order that your
company may provide such support
effectively, it is understood that you will
call upon your stockholders to take such
steps as may be necessary to effect a
unification of managerial, technical,
economic and manpower resources
between
your
company
and
PICOP.1avvphi1
This provision hardly evinces a contract
consideration (which, in PICOPs
interpretation, is in exchange for the
exclusive and perpetual tenure over
121,587 hectares of forest land and
21,580 hectares of alienable and

disposable lands). As elucidated by

PICOP itself in bringing up the
Investment Incentives Act which we
shall discuss later, and as shown by the
tenor of the 1969 Document, the latter
document was more of a conferment of
an incentive for BBLCIs investment
rather than a contract creating mutual
obligations on the part of the
government, on one hand, and BBLCI,
on the other. There was no stipulation
providing for sanctions for breach if
BBLCIs being "committed to support
the first large scale integrated wood
processing
complex"
remains
a
commitment. Neither did the 1969
Document give BBLCI a period within
which to pursue this commitment.
According to Article 1350 of the Civil
Code, "(i)n onerous contracts the cause
is understood to be, for each contracting
party, the prestation or promise of a
thing or service by the other." 48 Private
investments for ones businesses, while
indeed eventually beneficial to the
country and deserving to be given
incentives, are still principally and
predominantly for the benefit of the
investors. Thus, the "mutual" contract
considerations by both parties to this
alleged contract would be both for the
benefit of one of the parties thereto,
BBLCI, which is not obligated by the
1969 Document to surrender a share in
its proceeds any more than it is already
required by its TLA and by the tax laws.
PICOPs argument that its investments
can be considered as contract
consideration derogates the rule that "a
license or a permit is not a contract
between the sovereignty and the licensee
or permittee, and is not a property in the
constitutional sense, as to which the
constitutional proscription against the
impairment of contracts may extend."
All licensees obviously put up
investments, whether they are as small

as a tricycle unit or as big as those put

up by multi-billion-peso corporations.
To construe these investments as
contract considerations would be to
abandon the foregoing rule, which
would mean that the State would be
bound to all licensees, and lose its power
to revoke or amend these licenses when
public interest so dictates.
The power to issue licenses springs from
the States police power, known as "the
most essential, insistent and least
limitable of powers, extending as it does
to
all
the
great
public
needs."49 Businesses affecting the public
interest, such as the operation of public
utilities and those involving the
exploitation of natural resources, are
mandated by law to acquire licenses.
This is so in order that the State can
regulate their operations and thereby
protect the public interest. Thus, while
these licenses come in the form of
"agreements," e.g., "Timber License
Agreements," they cannot be considered
contracts under the non-impairment
clause.50
PICOP found this argument "lame,"
arguing, thus:
43. It is respectfully submitted that the
aforesaid
pronouncement
in
the
Decision
is
an
egregious
and
monumental error.
44. The Decision could not dismiss as
"preposterous" the mutual covenants in
the Presidential Warranty which calls
for a huge investment of Php500 million
at that time in 1969 out of which
Php268,440,000 raised from domestic
foreign lending institution to establish
the first large scale integrated wood
processing complex in the Philippines.
45. The Decision puts up a lame
explanation that "all licensees put up
investments in pursuing their business"
46. Now there are about a hundred
timber
licenses
issued
by
the

Government thru the DENR, but these

are ordinary timber licenses which
involve the mere cutting of timber in the
concession area, and nothing else.
Records in the DENR shows that no
timber licensee has put up an integrated
large wood processing complex in the
Philippines except PICOP.51
PICOP thus argues on the basis of
quantity, and wants us to distinguish
between the investment of the tricycle
driver and that of the multi-billion
corporation. However, not even billions
of pesos in investment can change the
fact that natural resources and,
therefore, public interest are involved in
PICOPs
venture,
consequently
necessitating the full control and
supervision by the State as mandated by
the Constitution. Not even billions of
pesos in investment can buy forest
lands, which is practically what PICOP is
asking for by interpreting the 1969
Document as a contract giving it
perpetual and exclusive possession over
such lands. Among all TLA holders in
the Philippines, PICOP has, by far, the
largest concession area at 143,167
hectares, a land area more than the size
of two Metro Manilas.52 How can it not
expect to also have the largest
investment?
Investment Incentives Act
PICOP then claims that the contractual
nature of the 1969 Document was
brought about by its issuance in
accordance with and pursuant to the
Investment Incentives Act. According to
PICOP:
The conclusion in the Decision that to
construe PICOPs investments as a
consideration in a contract would be to
stealthily render ineffective the principle
that a license is not a contract between
the sovereignty and the licensee is so
flawed since the contract with the
warranty dated 29 July 1969 was issued

by the Government in accordance with

and pursuant to Republic Act No. 5186,
otherwise known as "The Investment
Incentives Act."53
PICOP then proceeds to cite Sections 2
and 4(d) and (e) of said act:
Section 2. Declaration of Policy To
accelerate the sound development of the
national economy in consonance with
the principles and objectives of
economic nationalism, and in pursuance
of a planned, economically feasible and
practicable dispersal of industries,
under conditions which will encourage
competition and discharge monopolies,
it is hereby declared to be the policy of
the state to encourage Filipino and
foreign investments, as hereinafter set
out, in projects to develop agricultural,
mining and manufacturing industries
which increase national income most at
the least cost, increase exports, bring
about greater economic stability,
provide
more
opportunities
for
employment, raise the standards of
living of the people, and provide for an
equitable distribution of wealth. It is
further declared to be the policy of the
state to welcome and encourage foreign
capital to establish pioneer enterprises
that are capital intensive and would
utilize a substantial amount of domestic
raw materials, in joint venture with
substantial Filipino capital, whenever
available.
Section 4. Basic Rights and Guarantees.
All investors and enterprises are
entitled to the basic rights and
guarantees provided in the constitution.
Among other rights recognized by the
Government of the Philippines are the
following:
xxxx
d) Freedom from Expropriation. There
shall be no expropriation by the
government of the property represented
by investments or of the property of

enterprises except for public use or in

the interest of national welfare and
defense and upon payment of just
compensation. x x x.
e) Requisition of Investment. There
shall be no requisition of the property
represented by the investment or of the
property of enterprises, except in the
event of war or national emergency and
only for the duration thereof. Just
compensation shall be determined and
paid either at the time of requisition or
immediately after cessation of the state
of war or national emergency. Payments
received as compensation for the
requisitioned property may be remitted
in the currency in which the investment
was originally made and at the exchange
rate prevailing at the time of remittance,
subject to the provisions of Section
seventy-four of republic Act Numbered
Two hundred sixty-five.
Section 2 speaks of the policy of the
State to encourage Filipino and foreign
investments. It does not speak of how
this policy can be implemented.
Implementation of this policy is tackled
in Sections 5 to 12 of the same
law,54which PICOP failed to mention,
and for a good reason. None of the 24
incentives enumerated therein relates
to, or even remotely suggests that,
PICOPs proposition that the 1969
Document is a contract.
PICOP could indeed argue that the
enumeration is not exclusive. Certainly,
granting incentives to investors, whether
included in the enumeration or not,
would be an implementation of this
policy. However, it is presumed that
whatever incentives may be given to
investors should be within the bounds of
the laws and the Constitution. The
declaration of policy in Section 2 cannot,
by any stretch of the imagination, be
read to provide an exception to either
the laws or, heaven forbid, the

Constitution. Exceptions are never

presumed and should be convincingly
proven. Section 2 of the Investment
Incentives Act cannot be read as
exempting
investors
from
the
Constitutional provisions (1) prohibiting
private ownership of forest lands; (2)
providing for the complete control and
supervision by the State of exploitation
activities; or (3) limiting exploitation
agreements to twenty-five years,
renewable for another twenty-five years.
Section 4(d) and (e), on the other hand,
is a recognition of rights already
guaranteed under the Constitution.
Freedom from expropriation is granted
under Section 9 of Article III55 of the
Constitution, while the provision on
requisition is a negative restatement of
Section 6, Article XII.56
Refusal to grant perpetual and exclusive
possession to PICOP of its concession
area would not result in the
expropriation or requisition of PICOPs
property, as these forest lands belong to
the State, and not to PICOP. This is not
changed by PICOPs allegation that:
Since it takes 35 years before the
company can go back and harvest their
residuals in a logged-over area, it must
be assured of tenure in order to provide
an inducement for the company to
manage and preserve the residuals
during their growth period. This is a
commitment of resources over a span of
35 years for each plot for each cycle. No
company
will
undertake
the
responsibility
and
cost
involved
in policing, preserving and managing
residual forest areas until it were sure
that it had firm title to the timber.57
The requirement for logging companies
to preserve and maintain forest areas,
including the reforestation thereof, is
one of the prices a logging company
must pay for the exploitation thereof.
Forest lands are meant to be enjoyed by

countless
future
generations
of
Filipinos, and not just by one logging
company.
The
requirements
of
reforestation and preservation of the
concession areas are meant to protect
them, the future generations, and not
PICOP. Reforestation and preservation
of the concession areas are not required
of logging companies so that they would
have something to cut again, but so that
the forest would remain intact after their
operations. That PICOP would not
accept the responsibility to preserve its
concession area if it is not assured of
tenure thereto does not speak well of its
corporate policies.
Conclusion
In sum, PICOP was not able to prove
either of the two things it needed to
prove to be entitled to a Writ of
Mandamus against the DENR Secretary.
The 1969 Document is not a contract
recognized under the non-impairment
clause and, even if we assume for the
sake of argument that it is, it did not
enjoin the government to issue an IFMA
in 2002 either. These are the essential
elements in PICOPs cause of action, and
the failure to prove the same warrants a
dismissal of PICOPs Petition for
Mandamus, as not even PICOPs
compliance with all the administrative
and statutory requirements can save its
Petition now.
Whether PICOP Has Complied with the
Statutory
and
Administrative
Requirements for the Conversion of the
TLA to an IFMA
In the assailed Decision, our ruling was
based on two distinct grounds, each one
being sufficient in itself for us to rule
that PICOP was not entitled to a Writ of
Mandamus: (1) the 1969 Document, on
which PICOP hinges its right to compel
the issuance of an IFMA, is not a
contract; and (2) PICOP has not
complied with all administrative and

statutory requirements for the issuance

of an IFMA.
When a court bases its decision on two
or more grounds, each is as
authoritative as the other and neither is
obiter dictum.58 Thus, both grounds on
which we based our ruling in the
assailed Decision would become judicial
dictum, and would affect the rights and
interests of the parties to this case
unless corrected in this Resolution on
PICOPs Motion for Reconsideration.
Therefore, although PICOP would not be
entitled to a Writ of Mandamus even if
the second issue is resolved in its favor,
we should nonetheless resolve the same
and determine whether PICOP has
indeed complied with all administrative
and statutory requirements for the
issuance of an IFMA.
While the first issue (on the nature of
the 1969 Document) is entirely legal,
this second issue (on PICOPs
compliance with administrative and
statutory requirements for the issuance
of an IFMA) has both legal and factual
sub-issues. Legal sub-issues include
whether PICOP is legally required to (1)
consult with and acquire an approval
from the Sanggunian concerned under
Sections 26 and 27 of the Local
Government Code; and (2) acquire a
Certification
from
the
National
Commission on Indigenous Peoples
(NCIP) that the concession area does
not overlap with any ancestral domain.
Factual sub-issues include whether, at
the time it filed its Petition for
Mandamus, PICOP had submitted the
required Five-Year Forest Protection
Plan and Seven-Year Reforestation Plan
and whether PICOP had paid all forest
charges.
For the factual sub-issues, PICOP
invokes the doctrine that factual
findings of the trial court, especially
when upheld by the Court of Appeals,

deserve
great
weight.
However,
deserving of even greater weight are the
factual findings of administrative
agencies that have the expertise in the
area of concern. The contentious facts in
this case relate to the licensing,
regulation and management of forest
resources, the determination of which
belongs exclusively to the DENR:
SECTION
4.
Mandate.

The
Department shall be the primary
government agency responsible for the
conservation,
management,
development and proper use of the
countrys environment and natural
resources, specifically forest and grazing
lands, mineral resources, including
those in reservation and watershed
areas, and lands of the public domain, as
well as the licensing and regulation of all
natural resources as may be provided for
by law in order to ensure equitable
sharing of the benefits derived
therefrom for the welfare of the present
and future generations of Filipinos.59
When parties file a Petition for
Certiorari
against
judgments
of
administrative agencies tasked with
overseeing the implementation of laws,
the findings of such administrative
agencies are entitled to great weight. In
the case at bar, PICOP could not have
filed a Petition for Certiorari, as the
DENR Secretary had not yet even
determined whether PICOP should be
issued an IFMA. As previously
mentioned, when PICOPs application
was brought to a standstill upon the
evaluation that PICOP had yet to comply
with the requirements for the issuance
of an IFMA, PICOP refused to attend
further meetings with the DENR and
instead filed a Petition for Mandamus
against the latter. By jumping the gun,
PICOP did not diminish the weight of
the
DENR
Secretarys
initial
determination.

Forest Protection and Reforestation

Plans
The Performance Evaluation Team
tasked to appraise PICOPs performance
on its TLA No. 43 found that PICOP had
not submitted its Five-Year Forest
Protection Plan and its Seven-Year
Reforestation Plan.60
In its Motion for Reconsideration,
PICOP asserts that, in its Letter of
Intent dated 28 August 2000 and
marked as Exhibit L in the trial court,
there was a reference to a Ten-Year
Sustainable Forest Management Plan
(SFMP), in which a Five-Year Forest
Protection Plan and a Seven-Year
Reforestation Plan were allegedly
incorporated. PICOP submitted a
machine copy of a certified photocopy of
pages 50-67 and 104-110 of this SFMP in
its Motion for Reconsideration. PICOP
claims that the existence of this SFMP
was repeatedly asserted during the
IFMA application process.61
Upon examination of the portions of the
SFMP submitted to us, we cannot help
but notice that PICOPs concept of forest
protection is the security of the area
against "illegal" entrants and settlers.
There is no mention of the protection of
the wildlife therein, as the focus of the
discussion of the silvicultural treatments
and the SFMP itself is on the protection
and generation of future timber
harvests. We are particularly disturbed
by the portions stating that trees of
undesirable quality shall be removed.
However, when we required the DENR
Secretary to comment on PICOPs
Motion for Reconsideration, the DENR
Secretary did not dispute the existence
of this SFMP, or question PICOPs
assertion that a Ten-Year Forest
Protection Plan and a Ten-Year
Reforestation
Plan
are
already
incorporated therein. Hence, since the
agency tasked to determine compliance

with IFMA administrative requirements

chose to remain silent in the face of
allegations of compliance, we are
constrained
to
withdraw
our
pronouncement in the assailed Decision
that PICOP had not submitted a FiveYear Forest Protection Plan and a
Seven-Year Reforestation Plan for its
TLA No. 43. As previously mentioned,
the
licensing,
regulation
and
management of forest resources are the
primary responsibilities of the DENR.62
The compliance discussed above is, of
course, only for the purpose of
determining
PICOPs
satisfactory
performance as a TLA holder, and
covers a period within the subsistence of
PICOPs
TLA
No.
43.
This
determination,
therefore,
cannot
prohibit the DENR from requiring
PICOP, in the future, to submit proper
forest protection and reforestation plans
covering the period of the proposed
IFMA.
Forest Charges
In determining that PICOP did not have
unpaid forest charges, the Court of
Appeals relied on the assumption that if
it were true that PICOP had unpaid
forest charges, it should not have been
issued an approved Integrated Annual
Operation Plan (IAOP) for the year
2001-2002
by
Secretary
Alvarez
himself.63
In the assailed Decision, we held that
the Court of Appeals had been selective
in its evaluation of the IAOP, as it
disregarded the part thereof that shows
that the IAOP was approved subject to
several conditions, not the least of which
was the submission of proof of the
updated payment of forest charges from
April 2001 to June 2001.64 We also held
that even if we considered for the sake of
argument that the IAOP should not have
been issued if PICOP had existing
forestry accounts, the issuance of the

IAOP could not be considered proof that

PICOP had paid the same. Firstly, the
best evidence of payment is the receipt
thereof. PICOP has not presented any
evidence that such receipts were lost or
destroyed or could not be produced in
court.65 Secondly,
the
government
cannot be estopped by the acts of its
officers. If PICOP has been issued an
IAOP in violation of the law, allegedly
because it may not be issued if PICOP
had existing forestry accounts, the
government cannot be estopped from
collecting such amounts and providing
the necessary sanctions therefor,
including the withholding of the IFMA
until such amounts are paid.
We therefore found that, as opposed to
the Court of Appeals findings, which
were based merely on estoppel of
government officers, the positive and
categorical evidence presented by the
DENR Secretary was more convincing
with respect to the issue of payment of
forestry charges:
1. Forest Management Bureau (FMB)
Senior Forest Management Specialist
(SFMS) Ignacio M. Evangelista testified
that PICOP had failed to pay its regular
forest charges covering the period from
22 September 2001 to 26 April 2002 in
the
total
amount
of P15,056,054.0566 PICOP
also
allegedly paid late most of its forest
charges from 1996 onwards, by reason
of which, PICOP is liable for a surcharge
of 25% per annum on the tax due and
interest of 20% per annum which now
amounts to P150,169,485.02.67Likewise,
PICOP allegedly had overdue and
unpaid silvicultural fees in the amount
of P2,366,901.00 as of 30 August
2002.68 Summing up the testimony,
therefore, it was alleged that PICOP had
unpaid and overdue forest charges in the
sum of P167,592,440.90 as of 10 August
2002.69

2. Collection letters were sent to PICOP,

but no official receipts are extant in the
DENR record in Bislig City evidencing
payment of the overdue amount stated
in the said collection letters.70 There
were no official receipts for the period
covering 22 September 2001 to 26 April
2002.
We also considered these pieces of
evidence more convincing than the other
ones presented by PICOP:
1. PICOP presented the certification of
Community Environment and Natural
Resources Office (CENRO) Officer
Philip A. Calunsag, which refers only to
PICOPs alleged payment of regular
forest charges covering the period from
14 September 2001 to 15 May
2002.71 We noted that it does not
mention similar payment of the
penalties, surcharges and interests that
PICOP incurred in paying late several
forest charges, which fact was not
rebutted by PICOP.
2. The 27 May 2002 Certification by
CENRO Calunsag specified only the
period covering 14 September 2001 to 15
May 2002 and the amount of
P53,603,719.85 paid by PICOP without
indicating the corresponding volume
and date of production of the logs. This
is in contrast to the findings of SFMS
Evangelista, which cover the period
from CY 1996 to 30 August 2002 and
includes penalties, interests, and
surcharges for late payment pursuant to
DAO 80, series of 1987.
3. The 21 August 2002 PICOP-requested
certification issued by Bill Collector
Amelia D. Arayan, and attested to by
CENRO Calunsag himself, shows that
PICOP paid only regular forest charges
for its log production covering 1 July
2001 to 21 September 2001. However,
there were log productions after 21
September 2001, the regular forest
charges for which have not been paid,

amounting
to P15,056,054.05.72The
same certification shows delayed
payment of forest charges, thereby
corroborating the testimony of SFMS
Evangelista and substantiating the
imposition of penalties and surcharges.
In its Motion for Reconsideration,
PICOP claims that SFMS Evangelista is
assigned to an office that has nothing to
do with the collection of forest charges,
and that he based his testimony on the
Memoranda of Forest Management
Specialist II (FMS II) Teofila Orlanes
and DENR, Bislig City Bill Collector
Amelia D. Arayan, neither of whom was
presented to testify on his or her
Memorandum. PICOP also submitted an
Addendum
to
Motion
for
Reconsideration, wherein it appended
certified true copies of CENRO
Summaries with attached Official
Receipts tending to show that PICOP
had paid a total of P81,184,747.70 in
forest charges for 10 January 2001 to 20
December 2002, including the period
during which SFMS Evangelista claims
PICOP did not pay forest charges (22
September 2001 to 26 April 2002).
Before proceeding any further, it is
necessary for us to point out that, as
with our ruling on the forest protection
and
reforestation
plans,
this
determination of compliance with the
payment of forest charges is exclusively
for the purpose of determining PICOPs
satisfactory performance on its TLA No.
43. This cannot bind either party in a
possible collection case that may ensue.
An evaluation of the DENR Secretarys
position on this matter shows a heavy
reliance on the testimony of SFMS
Evangelista, making it imperative for us
to strictly scrutinize the same with
respect to its contents and admissibility.
PICOP claims that SFMS Evangelistas
office has nothing to do with the
collection of forest charges. According to

PICOP, the entity having administrative

jurisdiction over it is CENRO, Bislig City
by virtue of DENR Administrative Order
No. 96-36, dated 20 November 1996,
which states:
1. In order for the DENR to be able to
exercise closer and more effective
supervision, management and control
over the forest resources within the
areas covered by TLA No. 43, PTLA No.
47 and IFMA No. 35 of the PICOP
Resources, Inc., (PRI) and, at the same
time, provide greater facility in the
delivery of DENR services to various
publics, the aforesaid forest holdings of
PRI are hereby placed under the
exclusive jurisdiction of DENR Region
No. XIII with the CENR Office at Bislig,
Surigao del Sur, as directly responsible
thereto. x x x.
We disagree. Evangelista is an SFMS
assigned at the Natural Forest
Management Division of the FMB,
DENR. In Evangelistas aforementioned
affidavit submitted as part of his direct
examination, Evangelista enumerated
his duties and functions as SFMS:
1. As SFMS, I have the following duties
and functions:
a) To evaluate and act on cases
pertaining to forest management
referred to in the Natural forest
Management Division;
b) To monitor, verify and validate forest
management and related activities by
timber licences as to their compliance to
approved plans and programs;
c) To conduct investigation and
verification of compliance by timber
licenses/permittees to existing DENR
rules and regulations;
d) To gather field data and information
to be used in the formulation of forest
policies and regulations; and
e) To perform other duties and
responsibilities as may be directed by
superiors.73

PICOP also alleges that the testimony of

SFMS Evangelista was based on the
aforementioned Memoranda of Orlanes
and Arayan and that, since neither
Orlanes nor Arayan was presented as a
witness, SFMS Evangelistas testimony
should be deemed hearsay. SFMS
Evangelistas
1
October
2002
Affidavit,74 which was offered as part of
his testimony, provides:
2. Sometime in September, 2001 the
DENR Secretary was furnished a copy of
forest Management Specialist II (FMS
II) Teofila L. Orlanes Memorandum
dated September 24, 2001 concerning
unopaid forest charges of PICOP.
Attached to the said Memorandum was
a Memorandum dated September 19,
2001 of Amelia D. Arayan, Bill collector
of the DENR R13-14, Bislig City. Copies
of the said Memoranda are attached as
Annexes 1 and 2, respectively.
3. The said Memoranda were referred to
the FMB Director for appropriate action.
4. Thus, on August 5, 2002, I was
directed by the FMB Director to proceed
to Region 13 to gather forestry-related
data and validate the report contained in
the Memoranda of Ms. Orlanes and
Arayan.
5. On August 6, 2002, I proceeded to
DENR Region 13 in Bislig City. A copy of
my Travel Order is attached as Annex 3.
6. Upon my arrival at CENRO, Bislig,
surigao del Sur, I coordinated with
CENRO Officer Philip A. Calunsag and
requested him to make available to me
the records regarding the forest
products assessments of PICOP.
7. After I was provided with the
requested records, I evaluated and
collected the data.
8. After the evaluation, I found that the
unpaid forest charges adverted to in the
Memoranda of Mr. Orlanes and Arayan
covering the period from May 8, 2001 to
July 7, 2001 had already been paid but

late. I further found out that PICOP had

not paid its forest charges covering the
period from September 22, 2001 to April
26, 2002 in the total amount
of P15,056,054.05.
9. I also discovered that from 1996 up to
august 30, 2002, PICOP paid late some
of its forest charges in 1996 and
consistently failed to pay late its forest
charges from 1997 up to the present
time.
10. Under Section 7.4 of DAO No. 80
Series of 197\87 and Paragraph (4a),
Section 10 of BIR revenue Regulations
No. 2-81 dated November 18, 1980,
PICOP is mandated to pay a surcharge
of 25% per annum of the tax due and
interest of 20% per annum for late
payment of forest charges.
11. The overdue unpaid forest charges of
PICOP as shown in the attached
tabulation marked as Annex 4 hereof
is P150,169,485.02. Likewise, PICOP
has overdue and unpaid silvicultural
fees in the amount ofP2,366,901.00
from 1996 to the present.
12. In all, PICOP has an outstanding and
overdue
total
obligation
of P167,592,440.90 as of August 30,
2002 based on the attached tabulation
which is marked as Annex 5 hereof.75
Clearly, SFMS Evangelista had not relied
on the Memoranda of Orlanes and
Arayan. On the contrary, he traveled to
Surigao del Sur in order to verify the
contents of these Memoranda. SFMS
Evangelista, in fact, revised the findings
therein, as he discovered that certain
forest charges adverted to as unpaid had
already been paid.
This does not mean, however, that
SFMS Evangelistas testimony was not
hearsay. A witness may testify only on
facts of which he has personal
knowledge; that is, those derived from
his perception, except in certain
circumstances
allowed
by
the

Rules.76 Otherwise, such testimony is

considered
hearsay
and,
hence,
77
inadmissible in evidence.
SFMS Evangelista, while not relying on
the Memoranda of Orlanes and Arayan,
nevertheless relied on records, the
preparation of which he did not
participate in.78 These records and the
persons who prepared them were not
presented in court, either. As such,
SFMS Evangelistas testimony, insofar
as he relied on these records, was on
matters not derived from his own
perception, and was, therefore, hearsay.
Section 44, Rule 130 of the Rules of
Court, which speaks of entries in official
records as an exception to the hearsay
rule, cannot excuse the testimony of
SFMS Evangelista. Section 44 provides:
SEC. 44. Entries in official records.
Entries in official records made in the
performance of his duty by a public
officer of the Philippines, or by a person
in the performance of a duty specially
enjoined by law, are prima facie
evidence of the facts therein stated.
In Africa v. Caltex,79 we enumerated the
following requisites for the admission of
entries in official records as an exception
to the hearsay rule: (1) the entries were
made by a public officer or a private
person in the performance of a duty; (2)
the performance of the duty is especially
enjoined by law; (3) the public officer or
the private person had sufficient
knowledge of the facts stated by him,
which must have been acquired by him
personally
or
through
official
information.
The presentation of the records
themselves would, therefore, have been
admissible as an exception to the
hearsay rule even if the public officer/s
who prepared them was/were not
presented in court, provided the above
requisites could be adequately proven.
In the case at bar, however, neither the

records nor the persons who prepared

them were presented in court. Thus, the
above requisites cannot be sufficiently
proven. Also, since SFMS Evangelista
merely testified based on what those
records contained, his testimony was
hearsay evidence twice removed, which
was one step too many to be covered by
the official-records exception to the
hearsay rule.
SFMS Evangelistas testimony of
nonpayment of forest charges was,
furthermore, based on his failure to find
official receipts corresponding to billings
sent to PICOP. As stated above, PICOP
attached official receipts in its
Addendum
to
Motion
for
Reconsideration to this Court. While
this course of action is normally
irregular in judicial proceedings, we
merely stated in the assailed Decision
that "the DENR Secretary has
adequately proven that PICOP has, at
this time, failed to comply with
administrative
and
statutory
requirements for the conversion of TLA
No. 43 into an IFMA," 80 and that "this
disposition confers another chance to
comply
with
the
foregoing
requirements."81
In view of the foregoing, we withdraw
our pronouncement that PICOP has
unpaid forestry charges, at least for the
purpose of determining compliance with
the IFMA requirements.
NCIP Certification
The Court of Appeals held that PICOP
need not comply with Section 59 of
Republic Act No. 8371, which requires
prior certification from the NCIP that
the areas affected do not overlap with
any ancestral domain before any IFMA
can be entered into by the government.
According to the Court of Appeals,
Section 59 should be interpreted to refer
to ancestral domains that have been
duly established as such by the

continuous possession and occupation

of the area concerned by indigenous
peoples since time immemorial up to the
present. The Court of Appeals held that
PICOP had acquired property rights
over TLA No. 43 areas, being in
exclusive, continuous and uninterrupted
possession and occupation of these
areas since 1952 up to the present.
In the assailed Decision, we reversed the
findings of the Court of Appeals. Firstly,
the Court of Appeals ruling defies the
settled
jurisprudence
we
have
mentioned earlier, that a TLA is neither
a property nor a property right, and that
it does not create a vested right.82
Secondly, the Court of Appeals resort to
statutory construction is misplaced, as
Section 59 of Republic Act No. 8379 is
clear and unambiguous:
SEC. 59. Certification Precondition.
All
departments
and
other
governmental agencies shall henceforth
be strictly enjoined from issuing,
renewing or granting any concession,
license or lease, or entering into any
production-sharing agreement, without
prior certification from the NCIP that
the area affected does not overlap with
any ancestral domain. Such certification
shall only be issued after a field-based
investigation is conducted by the
Ancestral Domains Office of the area
concerned:
Provided,
That
no
certification shall be issued by the NCIP
without the free and prior informed and
written consent of the ICCs/IPs
concerned: Provided, further, That no
department, government agency or
government-owned
or
controlled
corporation may issue new concession,
license, lease, or production sharing
agreement while there is a pending
application for a CADT: Provided,
finally, That the ICCs/IPs shall have the
right to stop or suspend, in accordance
with this Act, any project that has not

satisfied the requirement of this

consultation process.
PICOP had tried to put a cloud of
ambiguity over Section 59 of Republic
Act No. 8371 by invoking the definition
of Ancestral Domains in Section 3(a)
thereof, wherein the possesssion by
Indigenous
Cultural
Communities/Indigenous
Peoples
(ICCs/IPs) must have been continuous
to the present. However, we noted the
exception found in the very same
sentence invoked by PICOP:
a) Ancestral domains Subject to
Section 56 hereof, refers to all areas
generally
belonging
to
ICCs/IPs
comprising lands, inland waters, coastal
areas,
and
natural
resources
therein, held under a claim of
ownership, occupied or possessed by
ICCs/IPs, by themselves or through
their
ancestors,
communally
or
individually since time immemorial,
continuously to the present except when
interrupted by war, force majeure or
displacement by force, deceit, stealth
or as a consequence of government
projects or any other voluntary dealings
entered into by government and private
individuals/corporations, and which are
necessary to ensure their economic,
social and cultural welfare. It shall
include ancestral lands, forests, pasture,
residential, agricultural, and other lands
individually owned whether alienable
and disposable or otherwise, hunting
grounds, burial grounds, worship areas,
bodies of water, mineral and other
natural resources, and lands which may
no longer be exclusively occupied by
ICCs/IPs but from which they
traditionally had access to for their
subsistence and traditional activities,
particularly the home ranges of
ICCs/IPs who are still nomadic and/or
shifting cultivators;

Ancestral domains, therefore, remain as

such even when possession or
occupation of these areas has been
interrupted by causes provided under
the law, such as voluntary dealings
entered into by the government and
private
individuals/corporations.
Consequently, the issuance of TLA No.
43 in 1952 did not cause the ICCs/IPs to
lose their possession or occupation over
the area covered by TLA No. 43.
Thirdly, we held that it was manifestly
absurd to claim that the subject lands
must first be proven to be part of
ancestral domains before a certification
that the lands are not part of ancestral
domains can be required, and invoked
the separate opinion of now Chief
Justice Reynato Puno in Cruz v.
Secretary of DENR83:
As its subtitle suggests, [Section 59 of
R.A. No. 8371] requires as a
precondition for the issuance of any
concession, license or agreement over
natural resources, that a certification be
issued by the NCIP that the area subject
of the agreement does not lie within any
ancestral domain. The provision does
not vest the NCIP with power over the
other agencies of the State as to
determine whether to grant or deny any
concession or license or agreement. It
merely gives the NCIP the authority to
ensure that the ICCs/IPs have been
informed of the agreement and that
their consent thereto has been obtained.
Note that the certification applies to
agreements over natural resources that
do not necessarily lie within the
ancestral domains. For those that are
found within the said domains, Sections
7(b) and 57 of the IPRA apply.
PICOP rejects the entire disposition of
this Court on the matter, relying on the
following theory:
84. It is quite clear that Section 59 of
R.A. 8371 does not apply to the

automatic conversion of TLA 43 to

IFMA.
First, the automatic conversion of TLA
43 to an IFMA is not a new project. It is
a mere continuation of the harvesting
process in an area that PICOP had been
managing, conserving and reforesting
for the last 50 years since 1952. Hence
any pending application for a CADT
within the area, cannot affect much less
hold back the automatic conversion.
That the government now wishes to
change the tenurial system to an IFMA
could not change the PICOP project, in
existence and operating for the last 30
(sic) years, into a new one.84
PICOPs position is anything but clear.
What is clearly provided for in Section
59 is that it covers "issuing, renewing or
granting (of) any concession, license or
lease, or entering into any production
sharing agreement." PICOP is implying
that, when the government changed the
tenurial system to an IFMA, PICOPs
existing TLA would just be upgraded or
modified, but would be the very same
agreement, hence, dodging the inclusion
in the word "renewing." However,
PICOP is conveniently leaving out the
fact that its TLA expired in 2002. If
PICOP really intends to pursue the
argument that the conversion of the TLA
into an IFMA would not create a new
agreement, but would only be a
modification of the old one, then it
should be willing to concede that the
IFMA expired as well in 2002. An
automatic modification would not alter
the terms and conditions of the TLA
except when they are inconsistent with
the terms and conditions of an IFMA.
Consequently,
PICOPs
concession
period under the renewed TLA No. 43,
which is from the year 1977 to 2002,
would remain the same.
PICOP cannot rely on a theory of the
case whenever such theory is beneficial

to it, but refute the same whenever the

theory is damaging to it. In the same
way, PICOP cannot claim that the
alleged
Presidential
Warranty
is
"renewable for other 25 years" and later
on claim that what it is asking for is not
a renewal. Extensions of agreements
must necessarily be included in the term
renewal. Otherwise, the inclusion of
"renewing" in Section 59 would be
rendered inoperative.
PICOP further claims:
85. Verily, in interpreting the term "held
under claim of ownership," the Supreme
Court could not have meant to include
claims that had just been filed and not
yet recognized under the provisions of
DENR Administrative Order No. 2
Series of 1993, nor to any other
community / ancestral domain program
prior to R.A. 8371.
xxxx
87. One can not imagine the terrible
damage and chaos to the country, its
economy, its people and its future if a
mere claim filed for the issuance of a
CADC or CADT will already provide
those who filed the application, the
authority or right to stop the renewal or
issuance of any concession, license or
lease
or
any
production-sharing
agreement. The same interpretation will
give such applicants through a mere
application the right to stop or suspend
any project that they can cite for not
satisfying the requirements of the
consultation process of R.A. 8371. If
such interpretation gets enshrined in the
statures of the land, the unscrupulous
and the extortionists can put any
ongoing or future project or activity to a
stop in any part of the country citing
their right from having filed an
application for issuance of a CADC or
CADT claim and the legal doctrine
established by the Supreme Court in this
PICOP case.85

We are not sure whether PICOPs

counsels are deliberately trying to
mislead us, or are just plainly ignorant
of basic precepts of law. The term
"claim" in the phrase "claim of
ownership" is not a document of any
sort. It is an attitude towards something.
The phrase "claim of ownership" means
"the possession of a piece of property
with the intention of claiming it in
hostility to the true owner."86 It is also
defined as "a partys manifest intention
to take over land, regardless of title or
right."87 Other than in Republic Act No.
8371, the phrase "claim of ownership" is
thoroughly discussed in issues relating
to acquisitive prescription in Civil Law.
Before PICOPs counsels could attribute
to us an assertion that a mere attitude or
intention would stop the renewal or
issuance of any concession, license or
lease
or
any
production-sharing
agreement, we should stress beforehand
that this attitude or intention must be
clearly shown by overt acts and, as
required by Section 3(a), should have
been
in
existence
"since
time
immemorial, continuously to the
present except when interrupted by war,
force majeure or displacement by force,
deceit, stealth or as a consequence of
government projects or any other
voluntary dealings entered into by
government
and
private
individuals/corporations."
Another argument of PICOP involves
the claim itself that there was no
overlapping:
Second, there could be no overlapping
with any Ancestral Domain as proven by
the evidence presented and testimonies
rendered during the hearings in the
Regional Trial Court. x x x.
x x x x.
88. The DENR issued a total of 73
CADCs as of December 11, 1996. The
DENR
Undersecretary
for
Field

Operations had recommended another

11 applications for issuance of CADCs.
None of the CADCs overlap the TLA 43
area.
89. However former DENR Secretary
Alvarez, in a memorandum dated 13
September, 2002 addressed to PGMA,
insisted that PICOP had to comply with
the requirement to secure a Free and
Prior Informed Concent because CADC
095 was issued covering 17,112 hectares
of TLA 43.
90. This CADC 095 is a fake CADC and
was not validly released by the DENR.
While the Legal Department of the
DENR was still in the process of
receiving the filings for applicants and
the oppositors to the CADC application,
PICOP came across filed copies of a
CADC 095 with the PENRO of Davao
Oriental as part of their application for a
Community Based Forest Management
Agreement (CBFMA). Further research
came across the same group filing copies
of the alleged CADC 095 with the Mines
and Geosciences Bureau in Davao City
for a mining agreement application. The
two applications had two different
versions of the CADCs second page. One
had Mr. Romeo T. Acosta signing as the
Social reform Agenda Technical Action
Officer, while the other had him signing
as the Head, Community-Based Forest
Management Office. One had the word
"Eight" crossed out and "Seven" written
to make it appear that the CADC was
issued on September 25, 1997, the other
made it appear that there were no
alterations and the date was supposed to
be originally 25 September 1997.
What is required in Section 59 of
Republic Act No. 8379 is a Certification
from the NCIP that there was no
overlapping with any Ancestral Domain.
PICOP cannot claim that the DENR
gravely abused its discretion for
requiring this Certification, on the

ground that there was no overlapping.

We reiterate that it is manifestly absurd
to claim that the subject lands must first
be proven to be part of ancestral
domains before a certification that they
are not can be required. As discussed in
the assailed Decision, PICOP did not
even seek any certification from the
NCIP that the area covered by TLA No.
43, subject of its IFMA conversion, did
not overlap with any ancestral domain.88
Sanggunian Consultation and Approval
While PICOP did not seek any
certification from the NCIP that the
formers concession area did not overlap
with any ancestral domain, PICOP
initially sought to comply with the
requirement under Sections 26 and 27
of the Local Government Code to
procure
prior
approval
of
the
Sanggunians concerned. However, only
one of the many provinces affected
approved the issuance of an IFMA to
PICOP. Undaunted, PICOP nevertheless
submitted to the DENR the purported
resolution89 of the Province of Surigao
del Sur indorsing the approval of
PICOPs
application
for
IFMA
conversion, apparently hoping either
that the disapproval of the other
provinces would go unnoticed, or that
the Surigao del Sur approval would be
treated as sufficient compliance.
Surprisingly, the disapproval by the
other provinces did go unnoticed before
the RTC and the Court of Appeals,
despite the repeated assertions thereof
by the Solicitor General. When we
pointed out in the assailed Decision that
the approval must be by all the
Sanggunians concerned and not by only
one of them, PICOP changed its theory
of the case in its Motion for
Reconsideration, this time claiming that
they are not required at all to procure
Sanggunian approval.

Sections 2(c), 26 and 27 of the Local

Government Code provide:
SEC. 2. x x x.
xxxx
(c) It is likewise the policy of the State to
require all national agencies and offices
to conduct periodic consultations with
appropriate local government units,
nongovernmental
and
peoples
organizations, and other concerned
sectors of the community before any
project or program is implemented in
their respective jurisdictions.
SEC. 26. Duty of National Government
Agencies in the Maintenance of
Ecological Balance. It shall be the duty
of every national agency or governmentowned or controlled corporation
authorizing or involved in the planning
and implementation of any project or
program that may cause pollution,
climatic change, depletion of nonrenewable resources, loss of crop land,
rangeland, or forest cover, and
extinction of animal or plant species, to
consult with the local government units,
nongovernmental organizations, and
other sectors concerned and explain the
goals and objectives of the project or
program, its impact upon the people and
the
community
in
terms
of
environmental or ecological balance,
and the measures that will be
undertaken to prevent or minimize the
adverse effects thereof.
SEC. 27. Prior Consultations Required.
No project or program shall be
implemented by government authorities
unless the consultations mentioned in
Sections 2(c) and 26 hereof are
complied with, and prior approval of the
sanggunian concerned is obtained:
Provided, That occupants in areas where
such projects are to be implemented
shall not be evicted unless appropriate
relocation sites have been provided, in

accordance with the provisions of the

Constitution.
As stated in the assailed Decision, the
common evidence of the DENR
Secretary and PICOP, namely, the 31
July 2001 Memorandum of Regional
Executive Director (RED) Elias D.
Seraspi, Jr., enumerated the local
government units and other groups
which had expressed their opposition to
PICOPs
application
for
IFMA
conversion:
7. During the conduct of the
performance evaluation of TLA No. 43
issues complaints against PRI were
submitted thru Resolutions and letters.
It is important that these are included in
this report for assessment of what are
their worth, viz:
xxxx
7.2 Joint Resolution (unnumbered),
dated March 19, 2001 of the Barangay
Council and Barangay Tribal Council of
Simulao, Boston, Davao Oriental
(ANNEX F) opposing the conversion of
TLA No. 43 into IFMA over the 17,112
hectares allegedly covered with CADC
No. 095.
7.3 Resolution Nos. 10, s-2001 and 05,
s-2001 (ANNEXES G & H) of the
Bunawan Tribal Council of Elders
(BBMTCE) strongly demanding none
renewal of PICOP TLA. They claim to be
the rightful owner of the area it being
their alleged ancestral land.
7.4 Resolution No. 4, S-2001 of Sitio
Linao, San Jose, Bislig City (ANNEX I)
requesting not to renew TLA 43 over the
900 hectares occupied by them.
7.5 Resolution No. 22, S-2001 (ANNEX
J) of the Sanguniang Bayan, Lingig,
Surigao del Sur not to grant the
conversion of TLA 43 citing the plight of
former employees of PRI who were
forced to enter and farm portion of TLA
No. 43, after they were laid off.

7.6 SP Resolution No. 2001-113 and

CDC Resolution Nos. 09-2001 of the
Sanguniang Panglungsod of Bislig City
(ANNEXES K & L) requesting to exclude
the area of TLA No. 43 for watershed
purposes.
7.7 Resolution No. 2001-164, dated June
01, 2001 (ANNEX M) Sanguniang
Panglungsod of Bislig City opposing the
conversion of TLA 43 to IFMA for the
reason that IFMA do not give revenue
benefits to the City.90
PICOP had claimed that it complied
with the Local Government Code
requirement of obtaining prior approval
of the Sanggunian concerned by
submitting a purported resolution91 of
the Province of Surigao del Sur
indorsing the approval of PICOPs
application for IFMA conversion. We
ruled that this cannot be deemed
sufficient compliance with the foregoing
provision. Surigao del Sur is not the only
province affected by the area covered by
the proposed IFMA. As even the Court
of Appeals found, PICOPs TLA No. 43
traverses the length and breadth not
only of Surigao del Sur but also of
Agusan del Sur, Compostela Valley and
Davao Oriental.92
On Motion for Reconsideration, PICOP
now argues that the requirement under
Sections 26 and 27 does not apply to it:
97. PICOP is not a national agency.
Neither is PICOP government owned or
controlled. Thus Section 26 does not
apply to PICOP.
98. It is very clear that Section 27 refers
to projects or programs to be
implemented by government authorities
or government-owned and controlled
corporations. PICOPs project or the
automatic conversion is a purely private
endevour. First the PICOP project has
been implemented since 1969. Second,
the project was being implemented by

private
investors
and
financial
institutions.
99.
The
primary
government
participation is to warrant and ensure
that the PICOP project shall have
peaceful tenure in the permanent forest
allocated to provide raw materials for
the project. To rule now that a project
whose foundations were commenced as
early as 1969 shall now be subjected to a
1991 law is to apply the law
retrospectively in violation of Article 4 of
the Civil Code that laws shall not be
applied retroactively.
100. In addition, under DAO 30, Series
of 1992, TLA and IFMA operations were
not among those devolved function from
the National Government / DENR to the
local government unit. Under its Section
03, the devolved function cover only:
a) Community Based forestry projects.
b) Communal forests of less than 5000
hectares
c) Small watershed areas which are
sources of local water supply.93
We have to remind PICOP again of the
contents of Section 2, Article XII of the
Constitution:
Section 2. All lands of the public
domain,
waters,
minerals,
coal,
petroleum, and other mineral oils, all
forces of potential energy, fisheries,
forests or timber, wildlife, flora and
fauna, and other natural resources are
owned by the State. With the exception
of agricultural lands, all other natural
resources shall not be alienated. The
exploration,
development,
and
utilization of natural resources shall be
under the full control and supervision of
the State. The State may directly
undertake such activities, or it may enter
into co-production, joint venture, or
production-sharing agreements with
Filipino citizens, or corporations or
associations at least sixty per centum of
whose capital is owned by such

citizens. Such agreements may be for a

period not exceeding twenty-five years,
renewable for not more than twenty-five
years, and under such terms and
conditions as may be provided by law. In
cases of water rights for irrigation, water
supply, fisheries, or industrial uses other
than the development of water power,
beneficial use may be the measure and
limit of the grant.
All projects relating to the exploration,
development and utilization of natural
resources are projects of the State. While
the State may enter into co-production,
joint venture, or production-sharing
agreements with Filipino citizens, or
corporations or associations at least
sixty per centum of whose capital is
owned by these citizens, such as PICOP,
the projects nevertheless remain as State
projects and can never be purely private
endeavors.
Also, despite entering into coproduction,
joint
venture,
or
production-sharing agreements, the
State remains in full control and
supervision over such projects. PICOP,
thus,
cannot
limit
government
participation in the project to being
merely its bouncer, whose primary
participation is only to "warrant and
ensure that the PICOP project shall have
peaceful tenure in the permanent forest
allocated to provide raw materials for
the project."
PICOP is indeed neither a national
agency nor a government-owned or
controlled corporation. The DENR,
however, is a national agency and is the
national agency prohibited by Section 27
from issuing an IFMA without the prior
approval of the Sanggunian concerned.
As previously discussed, PICOPs
Petition for Mandamus can only be
granted if the DENR Secretary is
required by law to issue an IFMA. We,
however, see here the exact opposite:

the DENR Secretary was actually

prohibited by law from issuing an IFMA,
as there had been no prior approval by
all the other Sanggunians concerned.
As regards PICOPs assertion that the
application to them of a 1991 law is in
violation of the prohibition against the
non-retroactivity provision in Article 4
of the Civil Code, we have to remind
PICOP that it is applying for an IFMA
with a term of 2002 to 2027. Section 2,
Article XII of the Constitution allows
exploitation agreements to last only "for
a period not exceeding twenty-five years,
renewable for not more than twenty-five
years." PICOP, thus, cannot legally claim
that the projects term started in 1952
and extends all the way to the present.
Finally, the devolution of the project to
local government units is not required
before Sections 26 and 27 would be
applicable. Neither Section 26 nor 27
mentions
such
a
requirement.
Moreover, it is not only the letter, but
more importantly the spirit of Sections
26 and 27, that shows that the
devolution of the project is not required.
The approval of the Sanggunian
concerned is required by law, not
because the local government has
control over such project, but because
the local government has the duty to
protect its constituents and their stake
in the implementation of the project.
Again, Section 26 states that it applies to
projects that "may cause pollution,
climatic change, depletion of nonrenewable resources, loss of crop land,
rangeland, or forest cover, and
extinction of animal or plant species."
The local government should thus
represent the communities in such area,
the very people who will be affected by
flooding, landslides or even climatic
change if the project is not properly
regulated, and who likewise have a stake
in the resources in the area, and deserve

to be adequately compensated when

these resources are exploited.
Indeed, it would be absurd to claim that
the project must first be devolved to the
local
government
before
the
requirement of the national government
seeking approval from the local
government can be applied. If a project
has been devolved to the local
government, the local government itself
would be implementing the project. That
the local government would need its
own approval before implementing its
own project is patently silly.
EPILOGUE AND DISPOSITION
PICOPc cause of action consists in the
allegation that the DENR Secretary, in
not issuing an IFMA, violated its
constitutional right against nonimpairment of contracts. We have ruled,
however, that the 1969 Document is not
a contract recognized under the nonimpairment clause, much less a contract
specifically
enjoining
the
DENR
Secretary to issue the IFMA. The
conclusion that the 1969 Document is
not a contract recognized under the nonimpairment clause has even been
disposed of in another case decided by
another division of this Court, PICOP
Resources, Inc. v. Base Metals Mineral
Resources Corporation,94 the Decision in
which case has become final and
executory.
PICOPs
Petition
for
Mandamus should, therefore, fail.
Furthermore, even if we assume for the
sake of argument that the 1969
Document is a contract recognized
under the non-impairment clause, and
even if we assume for the sake of
argument that the same is a contract
specifically
enjoining
the
DENR
Secretary to issue an IFMA, PICOPs
Petition for Mandamus must still fail.
The 1969 Document expressly states
that the warranty as to the tenure of
PICOP is "subject to compliance with

constitutional
and
statutory
requirements as well as with existing
policy on timber concessions." Thus, if
PICOP proves the two above-mentioned
matters, it still has to prove compliance
with statutory and administrative
requirements for the conversion of its
TLA into an IFMA.
While we have withdrawn our
pronouncements
in
the
assailed
Decision that (1) PICOP had not
submitted the required forest protection
and reforestation plans, and that (2)
PICOP had unpaid forestry charges, thus
effectively ruling in favor of PICOP on
all factual issues in this case, PICOP still
insists that the requirements of an NCIP
certification
and
Sanggunian
consultation and approval do not apply
to it. To affirm PICOPs position on
these matters would entail nothing less
than rewriting the Indigenous Peoples
Rights Act and the Local Government
Code, an act simply beyond our
jurisdiction.
WHEREFORE,
the
Motion
for
Reconsideration of PICOP Resources,
Inc. is DENIED.
SO ORDERED.
THIRD DIVISION
G.R. No. 191109
July 18,
2012
REPUBLIC OF THE PHILIPPINES,
represented by the PHILIPPINE
RECLAMATION
AUTHORITY
(PRA),Petitioner,
vs.
CITY OF PARANAQUE, Respondent.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari
under Rule 45 of the 1997 Rules of Civil
Procedure, on pure questions of law,
assailing the January 8, 2010 Order 1 of
the Regional Trial Court, Branch 195,
Parafiaque City (RTC), which ruled that

petitioner
Philippine
Reclamation
Authority (PRA) is a government-owned
and controlled corporation (GOCC), a
taxable entity, and, therefore, . not
exempt from payment of real property
taxes. The pertinent portion of the said
order reads:
In view of the finding of this court that
petitioner is not exempt from payment
of real property taxes, respondent
Paraaque City Treasurer Liberato M.
Carabeo did not act xxx without or in
excess of jurisdiction, or with grave
abuse of discretion amounting to lack or
in excess of jurisdiction in issuing the
warrants of levy on the subject
properties.
WHEREFORE, the instant petition is
dismissed. The Motion for Leave to File
and Admit Attached Supplemental
Petition is denied and the supplemental
petition attached thereto is not
admitted.
The Public Estates Authority (PEA) is a
government corporation created by
virtue of Presidential Decree (P.D.) No.
1084 (Creating the Public Estates
Authority, Defining its Powers and
Functions, Providing Funds Therefor
and For Other Purposes) which took
effect on February 4,
1977 to provide a coordinated,
economical and efficient reclamation of
lands, and the administration and
operation of lands belonging to,
managed and/or operated by, the
government with the object of
maximizing
their
utilization
and
hastening their development consistent
with public interest.
On February 14, 1979, by virtue of
Executive Order (E.O.) No. 525 issued
by then President Ferdinand Marcos,
PEA was designated as the agency
primarily responsible for integrating,
directing
and
coordinating
all

reclamation projects for and on behalf of

the National Government.
On October 26, 2004, then President
Gloria Macapagal-Arroyo issued E.O.
No. 380 transforming PEA into PRA,
which shall perform all the powers and
functions of the PEA relating to
reclamation activities.
By virtue of its mandate, PRA reclaimed
several portions of the foreshore and
offshore areas of Manila Bay, including
those located in Paraaque City, and
was issued Original Certificates of Title
(OCT Nos. 180, 202, 206, 207, 289, 557,
and 559) and Transfer Certificates of
Title (TCT Nos. 104628, 7312, 7309,
7311, 9685, and 9686) over the
reclaimed lands.
On February 19, 2003, then Paraaque
City Treasurer Liberato M. Carabeo
(Carabeo) issued Warrants of Levy on
PRAs reclaimed properties (Central
Business Park and Barangay San
Dionisio) located in Paraaque City
based on the assessment for delinquent
real property taxes made by then
Paraaque City Assessor Soledad
Medina Cue for tax years 2001 and
2002.
On March 26, 2003, PRA filed a petition
for prohibition with prayer for
temporary restraining order (TRO)
and/or writ of preliminary injunction
against Carabeo before the RTC.
On April 3, 2003, after due hearing, the
RTC issued an order denying PRAs
petition for the issuance of a temporary
restraining order.
On April 4, 2003, PRA sent a letter to
Carabeo requesting the latter not to
proceed with the public auction of the
subject reclaimed properties on April 7,
2003. In response, Carabeo sent a letter
stating that the public auction could not
be deferred because the RTC had
already denied PRAs TRO application.

On April 25, 2003, the RTC denied

PRAs prayer for the issuance of a writ of
preliminary injunction for being moot
and academic considering that the
auction sale of the subject properties on
April 7, 2003 had already been
consummated.
On August 3, 2009, after an exchange of
several pleadings and the failure of both
parties to arrive at a compromise
agreement, PRA filed a Motion for Leave
to
File
and
Admit
Attached
Supplemental Petition which sought to
declare as null and void the assessment
for real property taxes, the levy based on
the said assessment, the public auction
sale conducted on April 7, 2003, and the
Certificates of Sale issued pursuant to
the auction sale.
On January 8, 2010, the RTC rendered
its decision dismissing PRAs petition.
In ruling that PRA was not exempt from
payment of real property taxes, the RTC
reasoned out that it was a GOCC under
Section 3 of P.D. No. 1084. It was
organized as a stock corporation because
it had an authorized capital stock
divided into no par value shares. In fact,
PRA admitted its corporate personality
and that said properties were registered
in its name as shown by the certificates
of title. Therefore, as a GOCC, local tax
exemption is withdrawn by virtue of
Section 193 of Republic Act (R.A.) No.
7160 Local Government Code (LGC)
which was the prevailing law in 2001
and 2002 with respect to real property
taxation. The RTC also ruled that the tax
exemption claimed by PRA under E.O.
No. 654 had already been expressly
repealed by R.A. No. 7160 and that PRA
failed to comply with the procedural
requirements in Section 206 thereof.
Not in conformity, PRA filed this
petition for certiorari assailing the
January 8, 2010 RTC Order based on
the following GROUNDS

I
THE TRIAL COURT GRAVELY ERRED
IN FINDING THAT PETITIONER IS
LIABLE TO PAY REAL PROPERTY TAX
ON THE SUBJECT RECLAIMED
LANDS CONSIDERING
THAT
PETITIONER
IS
AN
INCORPORATED INSTRUMENTALITY
OF THE NATIONAL GOVERNMENT
AND IS, THEREFORE, EXEMPT FROM
PAYMENT OF REAL PROPERTY TAX
UNDER SECTIONS 234(A) AND 133(O)
OF REPUBLIC ACT 7160 OR THE
LOCAL GOVERNMENT CODE VIS-VIS
MANILA
INTERNATIONAL
AIRPORT AUTHORITY V. COURT OF
APPEALS.
II
THE TRIAL COURT GRAVELY ERRED
IN FAILING TO CONSIDER THAT
RECLAIMED LANDS ARE PART OF
THE PUBLIC DOMAIN AND, HENCE,
EXEMPT FROM REAL PROPERTY
TAX.
PRA asserts that it is not a GOCC under
Section 2(13) of the Introductory
Provisions of the Administrative Code.
Neither is it a GOCC under Section 16,
Article XII of the 1987 Constitution
because it is not required to meet the
test of economic viability. Instead, PRA
is a government instrumentality vested
with corporate powers and performing
an essential public service pursuant to
Section 2(10) of the Introductory
Provisions of the Administrative Code.
Although it has a capital stock divided
into shares, it is not authorized to
distribute dividends and allotment of
surplus and profits to its stockholders.
Therefore, it may not be classified as a
stock corporation because it lacks the
second requisite of a stock corporation
which is the distribution of dividends
and allotment of surplus and profits to
the stockholders.

It insists that it may not be classified as

a non-stock corporation because it has
no members and it is not organized for
charitable,
religious,
educational,
professional,
cultural,
recreational,
fraternal, literary, scientific, social, civil
service, or similar purposes, like trade,
industry, agriculture and like chambers
as provided in Section 88 of the
Corporation Code.
Moreover, PRA points out that it was
not created to compete in the market
place as there was no competing
reclamation company operated by the
private sector. Also, while PRA is vested
with corporate powers under P.D. No.
1084, such circumstance does not make
it a corporation but merely an
incorporated instrumentality and that
the mere fact that an incorporated
instrumentality
of
the
National
Government holds title to real property
does not make said instrumentality a
GOCC. Section 48, Chapter 12, Book I of
the Administrative Code of 1987
recognizes a scenario where a piece of
land owned by the Republic is titled in
the name of a department, agency or
instrumentality.
Thus, PRA insists that, as an
incorporated instrumentality of the
National Government, it is exempt from
payment of real property tax except
when the beneficial use of the real
property is granted to a taxable person.
PRA claims that based on Section 133(o)
of the LGC, local governments cannot
tax the national government which
delegate to local governments the power
to tax.
It explains that reclaimed lands are part
of the public domain, owned by the
State, thus, exempt from the payment of
real estate taxes. Reclaimed lands retain
their inherent potential as areas for
public use or public service. While the
subject reclaimed lands are still in its

hands, these lands remain public lands

and form part of the public domain.
Hence, the assessment of real property
taxes made on said lands, as well as the
levy thereon, and the public sale thereof
on April 7, 2003, including the issuance
of the certificates of sale in favor of the
respondent Paraaque City, are invalid
and of no force and effect.
On the other hand, the City of
Paraaque (respondent) argues that
PRA since its creation consistently
represented itself to be a GOCC. PRAs
very own charter (P.D. No. 1084)
declared it to be a GOCC and that it has
entered into several thousands of
contracts where it represented itself to
be a GOCC. In fact, PRA admitted in its
original and amended petitions and pretrial brief filed with the RTC of
Paraaque City that it was a GOCC.
Respondent further argues that PRA is a
stock corporation with an authorized
capital stock divided into 3 million no
par value shares, out of which 2 million
shares have been subscribed and fully
paid up. Section 193 of the LGC of 1991
has withdrawn tax exemption privileges
granted to or presently enjoyed by all
persons, whether natural or juridical,
including GOCCs.
Hence, since PRA is a GOCC, it is not
exempt from the payment of real
property tax.
THE COURTS RULING
The Court finds merit in the petition.
Section 2(13) of the Introductory
Provisions of the Administrative Code of
1987 defines a GOCC as follows:
SEC. 2. General Terms Defined. x x x x
(13) Government-owned or controlled
corporation refers to any agency
organized as a stock or non-stock
corporation, vested with functions
relating to public needs whether
governmental or proprietary in nature,
and owned by the Government directly

or through its instrumentalities either

wholly, or, where applicable as in the
case of stock corporations, to the extent
of at least fifty-one
(51) percent of its capital stock: x x x.
On the other hand, Section 2(10) of the
Introductory
Provisions
of
the
Administrative
Code
defines
a
government
"instrumentality"
as
follows:
SEC. 2. General Terms Defined. x x x
x
(10) Instrumentality refers to any
agency of the National Government, not
integrated within the department
framework,
vested
with
special
functions or jurisdiction by law,
endowed with some if not all corporate
powers, administering special funds,
and enjoying operational autonomy,
usually through a charter. x x x
From the above definitions, it is clear
that a GOCC must be "organized as a
stock or non-stock corporation" while an
instrumentality is vested by law with
corporate powers. Likewise, when the
law
makes
a
government
instrumentality
operationally
autonomous,
the
instrumentality
remains
part
of
the
National
Government machinery although not
integrated
with
the
department
framework.
When the law vests in a government
instrumentality corporate powers, the
instrumentality does not necessarily
become a corporation. Unless the
government instrumentality is organized
as a stock or non-stock corporation, it
remains a government instrumentality
exercising not only governmental but
also corporate powers.
Many government instrumentalities are
vested with corporate powers but they
do not become stock or non-stock
corporations, which is a necessary
condition before an agency or

instrumentality is deemed a GOCC.

Examples are the Mactan International
Airport Authority, the Philippine Ports
Authority, the University of the
Philippines, and Bangko Sentral ng
Pilipinas.
All
these
government
instrumentalities exercise corporate
powers but they are not organized as
stock or non-stock corporations as
required by Section 2(13) of the
Introductory
Provisions
of
the
Administrative Code. These government
instrumentalities are sometimes loosely
called government corporate entities.
They are not, however, GOCCs in the
strict sense as understood under the
Administrative Code, which is the
governing law defining the legal
relationship and status of government
entities.2
Correlatively, Section 3 of the
Corporation Code defines a stock
corporation as one whose "capital stock
is divided into shares and x x x
authorized to distribute to the holders of
such shares dividends x x x." Section 87
thereof defines a non-stock corporation
as "one where no part of its income is
distributable as dividends to its
members, trustees or officers." Further,
Section 88 provides that non-stock
corporations
are
"organized
for
charitable,
religious,
educational,
professional,
cultural,
recreational,
fraternal, literary, scientific, social, civil
service, or similar purposes, like trade,
industry,
agriculture
and
like
chambers."
Two requisites must concur before one
may be classified as a stock corporation,
namely: (1) that it has capital stock
divided into shares; and (2) that it is
authorized to distribute dividends and
allotments of surplus and profits to its
stockholders. If only one requisite is
present, it cannot be properly classified
as a stock corporation. As for non-stock

corporations, they must have members

and must not distribute any part of their
income to said members.3
In the case at bench, PRA is not a GOCC
because it is neither a stock nor a nonstock corporation. It cannot be
considered as a stock corporation
because although it has a capital stock
divided into no par value shares as
provided in Section 74 of P.D. No. 1084,
it is not authorized to distribute
dividends, surplus allotments or profits
to stockholders. There is no provision
whatsoever in P.D. No. 1084 or in any of
the subsequent executive issuances
pertaining to PRA, particularly, E.O. No.
525,5 E.O. No. 6546 and EO No. 7987 that
authorizes PRA to distribute dividends,
surplus allotments or profits to its
stockholders.
PRA cannot be considered a non-stock
corporation either because it does not
have members. A non-stock corporation
must have members.8 Moreover, it was
not organized for any of the purposes
mentioned in Section 88 of the
Corporation Code. Specifically, it was
created to manage all government
reclamation projects.
Furthermore, there is another reason
why the PRA cannot be classified as a
GOCC. Section 16, Article XII of the
1987 Constitution provides as follows:
Section 16. The Congress shall not,
except by general law, provide for the
formation, organization, or regulation of
private
corporations.
Governmentowned or controlled corporations may
be created or established by special
charters in the interest of the common
good and subject to the test of economic
viability.
The fundamental provision above
authorizes Congress to create GOCCs
through special charters on two
conditions: 1) the GOCC must be
established for the common good; and

2) the GOCC must meet the test of

economic viability. In this case, PRA
may have passed the first condition of
common good but failed the second one
- economic viability. Undoubtedly, the
purpose behind the creation of PRA was
not for economic or commercial
activities. Neither was it created to
compete in the market place considering
that there were no other competing
reclamation companies being operated
by the private sector. As mentioned
earlier, PRA was created essentially to
perform a public service considering
that it was primarily responsible for a
coordinated, economical and efficient
reclamation,
administration
and
operation of lands belonging to the
government with the object of
maximizing
their
utilization
and
hastening their development consistent
with the public interest. Sections 2 and 4
of P.D. No. 1084 reads, as follows:
Section 2. Declaration of policy. It is the
declared policy of the State to provide
for a coordinated, economical and
efficient reclamation of lands, and the
administration and operation of lands
belonging to, managed and/or operated
by the government, with the object of
maximizing
their
utilization
and
hastening their development consistent
with the public interest.
Section 4. Purposes. The Authority is
hereby created for the following
purposes:
(a) To reclaim land, including foreshore
and submerged areas, by dredging,
filling or other means, or to acquire
reclaimed land;
(b) To develop, improve, acquire,
administer, deal in, subdivide, dispose,
lease and sell any and all kinds of lands,
buildings, estates and other forms of
real
property,
owned,
managed,
controlled and/or operated by the
government.

(c) To provide for, operate or administer

such services as may be necessary for
the efficient, economical and beneficial
utilization of the above properties.
The twin requirement of common good
and economic viability was lengthily
discussed in the case of Manila
International Airport Authority v. Court
of Appeals,9 the pertinent portion of
which reads:
Third, the government-owned or
controlled corporations created through
special charters are those that meet the
two conditions prescribed in Section 16,
Article XII of the Constitution.
The first condition is that the
government-owned
or
controlled
corporation must be established for the
common good. The second condition is
that
the
government-owned
or
controlled corporation must meet the
test of economic viability. Section 16,
Article XII of the 1987 Constitution
provides:
SEC. 16. The Congress shall not, except
by general law, provide for the
formation, organization, or regulation of
private
corporations.
Governmentowned or controlled corporations may
be created or established by special
charters in the interest of the common
good and subject to the test of economic
viability.
The Constitution expressly authorizes
the legislature to create "governmentowned or controlled corporations"
through special charters only if these
entities are required to meet the twin
conditions of common good and
economic viability. In other words,
Congress has no power to create
government-owned
or
controlled
corporations with special charters unless
they are made to comply with the two
conditions of common good and
economic viability. The test of economic
viability applies only to government-

owned or controlled corporations that

perform economic or commercial
activities and need to compete in the
market
place.
Being
essentially
economic vehicles of the State for the
common good meaning for economic
development
purposes

these
government-owned
or
controlled
corporations with special charters are
usually organized as stock corporations
just like ordinary private corporations.
In
contrast,
government
instrumentalities vested with corporate
powers and performing governmental or
public functions need not meet the test
of
economic
viability.
These
instrumentalities perform essential
public services for the common good,
services that every modern State must
provide
its
citizens.
These
instrumentalities
need
not
be
economically
viable
since
the
government may even subsidize their
entire
operations.
These
instrumentalities
are
not
the
"government-owned
or
controlled
corporations" referred to in Section 16,
Article XII of the 1987 Constitution.
Thus, the Constitution imposes no
limitation when the legislature creates
government instrumentalities vested
with corporate powers but performing
essential governmental or public
functions.
Congress
has
plenary
authority
to
create
government
instrumentalities vested with corporate
powers provided these instrumentalities
perform essential government functions
or public services. However, when the
legislature creates through special
charters corporations that perform
economic or commercial activities, such
entities known as "governmentowned or controlled corporations"
must meet the test of economic viability
because they compete in the market
place.

This is the situation of the Land Bank of

the Philippines and the Development
Bank of the Philippines and similar
government-owned
or
controlled
corporations,
which
derive
their
incometo meet operating expenses
solely from commercial transactions in
competition with the private sector. The
intent of the Constitution is to prevent
the creation of government-owned or
controlled corporations that cannot
survive on their own in the market place
and thus merely drain the public coffers.
Commissioner Blas F. Ople, proponent
of the test of economic viability,
explained
to
the
Constitutional
Commission the purpose of this test, as
follows:
MR. OPLE: Madam President, the
reason for this concern is really that
when the government creates a
corporation, there is a sense in which
this corporation becomes exempt from
the test of economic performance. We
know what happened in the past. If a
government corporation loses, then it
makes its claim upon the taxpayers'
money through new equity infusions
from the government and what is always
invoked is the common good. That is the
reason why this year, out of a budget of
P115 billion for the entire government,
about P28 billion of this will go into
equity infusions to support a few
government financial institutions. And
this is all taxpayers' money which could
have been relocated to agrarian reform,
to social services like health and
education, to augment the salaries of
grossly underpaid public employees.
And yet this is all going down the drain.
Therefore, when we insert the phrase
"ECONOMIC VIABILITY" together with
the "common good," this becomes a
restraint on future enthusiasts for state
capitalism to excuse themselves from
the responsibility of meeting the market

test so that they become viable. And so,

Madam President, I reiterate, for the
committee's consideration and I am glad
that I am joined in this proposal by
Commissioner Foz, the insertion of the
standard of "ECONOMIC VIABILITY
OR THE ECONOMIC TEST," together
with the common good.1wphi1
Father Joaquin G. Bernas, a leading
member
of
the
Constitutional
Commission, explains in his textbook
The 1987 Constitution of the Republic of
the Philippines: A Commentary:
The second sentence was added by the
1986 Constitutional Commission. The
significant addition, however, is the
phrase "in the interest of the common
good and subject to the test of economic
viability." The addition includes the
ideas that they must show capacity to
function efficiently in business and that
they should not go into activities which
the private sector can do better.
Moreover, economic viability is more
than financial viability but also includes
capability to make profit and generate
benefits not quantifiable in financial
terms.
Clearly, the test of economic viability
does not apply to government entities
vested with corporate powers and
performing essential public services.
The State is obligated to render essential
public services regardless of the
economic viability of providing such
service. The non-economic viability of
rendering such essential public service
does not excuse the State from
withholding such essential services from
the public.
However,
government-owned
or
controlled corporations with special
charters, organized essentially for
economic or commercial objectives,
must meet the test of economic viability.
These are the government-owned or
controlled corporations that are usually

organized under their special charters as

stock corporations, like the Land Bank
of the Philippines and the Development
Bank of the Philippines. These are the
government-owned
or
controlled
corporations, along with governmentowned or controlled corporations
organized under the Corporation Code,
that fall under the definition of
"government-owned
or
controlled
corporations" in Section 2(10) of the
Administrative
Code.
[Emphases
supplied]
This Court is convinced that PRA is not
a GOCC either under Section 2(3) of the
Introductory
Provisions
of
the
Administrative Code or under Section
16, Article XII of the 1987 Constitution.
The facts, the evidence on record and
jurisprudence on the issue support the
position that PRA was not organized
either as a stock or a non-stock
corporation. Neither was it created by
Congress to operate commercially and
compete in the private market. Instead,
PRA is a government instrumentality
vested with corporate powers and
performing an essential public service
pursuant to Section 2(10) of the
Introductory
Provisions
of
the
Administrative
Code.
Being
an
incorporated
government
instrumentality, it is exempt from
payment of real property tax.
Clearly, respondent has no valid or legal
basis in taxing the subject reclaimed
lands managed by PRA. On the other
hand, Section 234(a) of the LGC, in
relation to its Section 133(o), exempts
PRA from paying realty taxes and
protects it from the taxing powers of
local government units.
Sections 234(a) and 133(o) of the LGC
provide, as follows:
SEC. 234. Exemptions from Real
Property Tax The following are

exempted from payment of the real

property tax:
(a) Real property owned by the Republic
of the Philippines or any of its political
subdivisions except when the beneficial
use thereof has been granted, for
consideration or otherwise, to a taxable
person.
xxxx
SEC. 133. Common Limitations on the
Taxing Powers of Local Government
Units. Unless otherwise provided
herein, the exercise of the taxing powers
of provinces, cities, municipalities, and
barangays shall not extend to the levy of
the following:
xxxx
(o) Taxes, fees or charges of any kinds
on the National Government, its
agencies and instrumentalities, and local
government units. [Emphasis supplied]
It is clear from Section 234 that real
property owned by the Republic of the
Philippines (the Republic) is exempt
from real property tax unless the
beneficial use thereof has been granted
to a taxable person. In this case, there is
no proof that PRA granted the beneficial
use of the subject reclaimed lands to a
taxable entity. There is no showing on
record either that PRA leased the subject
reclaimed properties to a private taxable
entity.
This exemption should be read in
relation to Section 133(o) of the same
Code, which prohibits local governments
from imposing "taxes, fees or charges of
any kind on the National Government,
its agencies and instrumentalities x x x."
The Administrative Code allows real
property owned by the Republic to be
titled in the name of agencies or
instrumentalities of the national
government. Such real properties
remain owned by the Republic and
continue to be exempt from real estate
tax.

Indeed, the Republic grants the

beneficial use of its real property to an
agency or instrumentality of the national
government. This happens when the
title of the real property is transferred to
an agency or instrumentality even as the
Republic remains the owner of the real
property. Such arrangement does not
result in the loss of the tax exemption,
unless "the beneficial use thereof has
been granted, for consideration or
otherwise, to a taxable person."10
The rationale behind Section 133(o) has
also been explained in the case of the
Manila
International
Airport
11
Authority, to wit:
Section 133(o) recognizes the basic
principle that local governments cannot
tax the national government, which
historically merely delegated to local
governments the power to tax. While the
1987 Constitution now includes taxation
as one of the powers of local
governments, local governments may
only exercise such power "subject to
such guidelines and limitations as the
Congress may provide."
When local governments invoke the
power to tax on national government
instrumentalities,
such
power
is
construed
strictly
against
local
governments. The rule is that a tax is
never presumed and there must be clear
language in the law imposing the tax.
Any doubt whether a person, article or
activity is taxable is resolved against
taxation. This rule applies with greater
force when local governments seek to
tax
national
government
instrumentalities.
Another rule is that a tax exemption is
strictly construed against the taxpayer
claiming the exemption. However, when
Congress grants an exemption to a
national government instrumentality
from local taxation, such exemption is
construed liberally in favor of the

national government instrumentality. As

this Court declared in Maceda v.
Macaraig, Jr.:
The reason for the rule does not apply in
the case of exemptions running to the
benefit of the government itself or its
agencies. In such case the practical
effect of an exemption is merely to
reduce the amount of money that has to
be handled by government in the course
of its operations. For these reasons,
provisions granting exemptions to
government agencies may be construed
liberally, in favor of non tax-liability of
such agencies.
There is, moreover, no point in national
and local governments taxing each
other, unless a sound and compelling
policy requires such transfer of public
funds from one government pocket to
another.
There is also no reason for local
governments to tax national government
instrumentalities for rendering essential
public services to inhabitants of local
governments. The only exception is
when the legislature clearly intended to
tax government instrumentalities for the
delivery of essential public services for
sound
and
compelling
policy
considerations. There must be express
language in the law empowering local
governments to tax national government
instrumentalities. Any doubt whether
such power exists is resolved against
local governments.
Thus, Section 133 of the Local
Government Code states that "unless
otherwise provided" in the Code, local
governments cannot tax national
government instrumentalities. As this
Court held in Basco v. Philippine
Amusements and Gaming Corporation:
The states have no power by taxation or
otherwise, to retard, impede, burden or
in any manner control the operation of
constitutional laws enacted by Congress

to carry into execution the powers

vested in the federal government. (MC
Culloch v. Maryland, 4 Wheat 316, 4 L
Ed. 579)
This doctrine emanates from the
"supremacy"
of
the
National
Government over local governments.
"Justice Holmes, speaking for the
Supreme Court, made reference to the
entire absence of power on the part of
the States to touch, in that way
(taxation) at least, the instrumentalities
of the United States (Johnson v.
Maryland, 254 US 51) and it can be
agreed that no state or political
subdivision can regulate a federal
instrumentality in such a way as to
prevent it from consummating its
federal responsibilities, or even to
seriously
burden
it
in
the
accomplishment of them." (Antieau,
Modern Constitutional Law, Vol. 2, p.
140, emphasis supplied)
Otherwise, mere creatures of the State
can defeat National policies thru
extermination of what local authorities
may perceive to be undesirable activities
or enterprise using the power to tax as
"a tool for regulation." (U.S. v. Sanchez,
340 US 42)
The power to tax which was called by
Justice Marshall as the "power to
destroy" (McCulloch v. Maryland, supra)
cannot be allowed to defeat an
instrumentality or creation of the very
entity which has the inherent power to
wield it. [Emphases supplied]
The Court agrees with PRA that the
subject reclaimed lands are still part of
the public domain, owned by the State
and, therefore, exempt from payment of
real estate taxes.
Section 2, Article XII of the 1987
Constitution reads in part, as follows:
Section 2. All lands of the public
domain,
waters,
minerals,
coal,
petroleum, and other mineral oils, all

forces of potential energy, fisheries,

forests or timber, wildlife, flora and
fauna, and other natural resources are
owned by the State. With the exception
of agricultural lands, all other natural
resources shall not be alienated. The
exploration,
development,
and
utilization of natural resources shall be
under the full control and supervision of
the State. The State may directly
undertake such activities, or it may enter
into co-production, joint venture, or
production-sharing agreements with
Filipino citizens, or corporations or
associations at least 60 per centum of
whose capital is owned by such citizens.
Such agreements may be for a period
not
exceeding
twenty-five
years,
renewable for not more than twenty-five
years, and under such terms and
conditions as may provided by law. In
cases of water rights for irrigation, water
supply, fisheries, or industrial uses other
than the development of waterpower,
beneficial use may be the measure and
limit of the grant.
Similarly, Article 420 of the Civil Code
enumerates properties belonging to the
State:
Art. 420. The following things are
property of public dominion:
(1) Those intended for public use, such
as roads, canals, rivers, torrents, ports
and bridges constructed by the State,
banks, shores, roadsteads, and others of
similar character;
(2) Those which belong to the State,
without being for public use, and are
intended for some public service or for
the development of the national wealth.
[Emphases supplied]
Here, the subject lands are reclaimed
lands, specifically portions of the
foreshore and offshore areas of Manila
Bay. As such, these lands remain public
lands and form part of the public
domain. In the case of Chavez v. Public

Estates Authority and AMARI Coastal

Development Corporation,12 the Court
held that foreshore and submerged
areas irrefutably belonged to the public
domain and were inalienable unless
reclaimed, classified as alienable lands
open to disposition and further declared
no longer needed for public service. The
fact that alienable lands of the public
domain were transferred to the PEA
(now PRA) and issued land patents or
certificates of title in PEAs name did not
automatically make such lands private.
This Court also held therein that
reclaimed lands retained their inherent
potential as areas for public use or
public service.
As the central implementing agency
tasked to undertake reclamation
projects nationwide, with authority to
sell reclaimed lands, PEA took the place
of DENR as the government agency
charged with leasing or selling reclaimed
lands of the public domain. The
reclaimed lands being leased or sold by
PEA are not private lands, in the same
manner that DENR, when it disposes of
other alienable lands, does not dispose
of private lands but alienable lands of
the public domain. Only when qualified
private parties acquire these lands will
the lands become private lands. In the
hands of the government agency tasked
and authorized to dispose of alienable of
disposable lands of the public domain,
these lands are still public, not private
lands.
Furthermore, PEA's charter expressly
states that PEA "shall hold lands of the
public domain" as well as "any and all
kinds of lands." PEA can hold both lands
of the public domain and private lands.
Thus, the mere fact that alienable lands
of the public domain like the Freedom
Islands are transferred to PEA and
issued land patents or certificates of title

in PEA's name does not automatically

make such lands private.13
Likewise, it is worthy to mention Section
14, Chapter 4, Title I, Book III of the
Administrative Code of 1987, thus:
SEC 14. Power to Reserve Lands of the
Public and Private Dominion of the
Government.(1)The President shall have the power to
reserve for settlement or public use, and
for specific public purposes, any of the
lands of the public domain, the use of
which is not otherwise directed by law.
The reserved land shall thereafter
remain subject to the specific public
purpose indicated until otherwise
provided by law or proclamation.
Reclaimed lands such as the subject
lands in issue are reserved lands for
public use. They are properties of public
dominion. The ownership of such lands
remains with the State unless they are
withdrawn by law or presidential
proclamation from public use.
Under Section 2, Article XII of the 1987
Constitution,
the
foreshore
and
submerged areas of Manila Bay are part
of the "lands of the public domain,
waters x x x and other natural resources"
and consequently "owned by the State."
As such, foreshore and submerged areas
"shall not be alienated," unless they are
classified as "agricultural lands" of the
public domain. The mere reclamation of
these areas by PEA does not convert
these inalienable natural resources of
the State into alienable or disposable
lands of the public domain. There must
be a law or presidential proclamation
officially classifying these reclaimed
lands as alienable or disposable and
open to disposition or concession.
Moreover, these reclaimed lands cannot
be classified as alienable or disposable if
the law has reserved them for some
public or quasi-public use.

As the Court has repeatedly ruled,

properties of public dominion are not
subject to execution or foreclosure
sale.14 Thus, the assessment, levy and
foreclosure made on the subject
reclaimed lands by respondent, as well
as the issuances of certificates of title in
favor of respondent, are without basis.
WHEREFORE,
the
petition
is
GRANTED. The January 8, 2010 Order
of the Regional Trial Court, Branch 195,
Paraaque City, is REVERSED and SET
ASIDE. All reclaimed properties owned
by the Philippine Reclamation Authority
are hereby declared EXEMPT from real
estate taxes. All real estate tax
assessments, including the final notices
of real estate tax delinquencies, issued
by the City of Paraaque on the subject
reclaimed properties; the assailed
auction sale, dated April 7, 2003; and
the Certificates of Sale subsequently
issued by the Paraaque City Treasurer
in favor of the City of Paraaque, are all
declared VOID.
SO ORDERED.
G.R. No. 202651
August 28,
2013
LUCENA B. RALLOS, PETITIONER,
vs.
CITY OF CEBU, HONORABLE
MICHAEL RAMA, HONORABLE
JOY
AUGUSTUS
YOUNG,
HONORABLE SISINIO ANDALES,
HONORABLE
RODRIGO
ABELLANOSA,
HONORABLE
ALVIN ARCILLA, HONORABLE
RAUL ALCOSEBA, HONORABLE
MA.
NIDA
CABRERA,
HONORABLE
ROBERTO
CABARRUBIAS,
HONORABLE
ALVIN
DIZON,
HONORABLE
RONALD CUENCO, HONORABLE
LEA JAPSON, HONORABLE JOSE
DALUZ
III,
HONORABLE
EDGARDO
LABELLA,

HONORABLE
MARGARITA
OSMEA,
HONORABLE
AUGUSTUS
PE,
HONORABLE
RICHARD
OSMEA,
HONORABLE
NOEL
WENCESLAO,
HONORABLE
EDUARDO
RAMA,
JR.,
HONORABLE MICHAEL RALOTA,
HONORABLE
JOHN
PHILIP
ECHAVEZ-PO, ATTY. JOSEPH
BERNALDEZ,
ATTY.
JUNE
MARATAS,
ATTY.
JERONE
CASTILLO, ATTY. MARY ANN
SUSON, ATTY. LESLIE ANN
REYES, ATTY. CARLO VINCENT
GIMENA,
ATTY.
FERDINAND
CAETE,
ATTY.
ISMAEL
GARAYGAY III, ATTY. LECEL
LLAMEDO AND ATTY. MARIE
VELLE ABELLA, RESPONDENTS.
RESOLUTION
REYES, J.:
One of the Heirs of Reverend Father
Vicente Rallos (Heirs of Fr. Rallos),
Lucena B. Rallos1 (Lucena), is now
before
this
Court
with
a
petition2 praying for the citation for
indirect contempt of the City of Cebu,
Mayor Michael Rama (Mayor Rama),
the presiding officer and members of the
Sangguniang Panlungsod, and lawyers
from the Office of the City Attorney
(respondents). The instant petition is
anchored on Lucena's allegation that the
respondents impede the execution of
final and executory judgments rendered
by this Court in G.R. Nos. 179662 3and
1941114. G.R. Nos. 179662 and 194111
were among a string of suits which
originated from a Complaint for
Forfeiture of Improvements or Payment
of Fair Market Value with Moral and
Exemplary Damages5 filed in 1997 by the
Heirs of Fr. Rallos before the Regional
Trial Court (RTC) of Cebu City, Branch
9, against the City of Cebu relative to
two parcels of land6 with a total area of

4,654 square meters located in Barangay

Sambag I which were expropriated in
1963 for road construction purposes.
Antecedent Facts
At the root of the controversy are Lots
485-D and 485-E of the Banilad Estate,
Sambag I, Cebu City, which were
expropriated to be used as a public road
in 1963. The Heirs of Fr. Rallos alleged
that the City of Cebu occupied the lots in
bad faith sans the authority of the
former's predecessors-in-interest, who
were the registered owners of the
subject parcels of land.
On June 11, 1997, the Heirs of Fr. Rallos
filed before the RTC a Complaint for
Forfeiture of Improvements or Payment
of Fair Market Value with Moral and
Exemplary Damages against the City of
Cebu.
In its Answer filed on October 6, 1997,
the City of Cebu contended that the
subject parcels of land are road lots and
are not residential in character. They
have been withdrawn from the
commerce of men and were occupied by
the City of Cebu without expropriation
proceedings pursuant to Ordinance No.
416 which was enacted in 1963 or more
than 35 years before the Heirs of Fr.
Rallos instituted their complaint.
On January 14, 2000, the RTC rendered
a Decision,7 which found the City of
Cebu liable to pay the Heirs of Fr. Rallos
just compensation in the amount still to
be determined by a board of three
commissioners, one each to be
designated by the contending parties
and the court.
To assail the Decision rendered on
January 14, 2000, the City of Cebu filed
a Motion for Reconsideration, which
was however denied by the RTC on
February 5, 2001.8
The members of the Board of
Commissioners thereafter submitted
their respective appraisal reports. On

July 24, 2001, the RTC rendered a

Decision,9 the dispositive portion of
which, in part, reads:
WHEREFORE, the [RTC] hereby
renders judgment, ordering [the City of
Cebu] to pay [the Heirs of Fr. Rallos] as
just compensation for Lots 485-D and
485-E the amount of Php34,905,000.00
plus interest at 12% per annum to start
40 days from [the] date of this decision
and to continue until the whole amount
shall have been fully paid. [The City of
Cebu] is further ordered to pay [the
Heirs of Fr. Rallos] the following
amounts:
1. Php50,000.00 as reimbursement for
attorney's fees;
2. Php50,000.00 as reimbursement for
litigation expenses.10
The contending parties both moved for
the reconsideration of the Decision
rendered on July 24, 2001. The City of
Cebu argued that the reckoning period
for
the
computation
of
just
compensation should be at least not
later than 1963 when the said lots were
initially occupied. On the other hand,
the Heirs of Fr. Rallos insisted that the
amount of just compensation payable by
the City of Cebu should be increased
from Php 7,500.00 to Php 12,500.00
per sq m, the latter being the fair market
value of the subject lots. They also
prayed for the award of damages in the
amount of Php 16,186,520.00, which
was allegedly the value of the loss of
usage of the properties involved from
1963 to 1997 as computed by Atty. Fidel
Kwan, the commissioner appointed by
the RTC.
On March 21, 2002, the RTC issued a
Consolidated
Order11 denying
the
Motion for Reconsideration filed by the
City of Cebu, but modifying the Decision
rendered on July 24, 2001. Through the
said order, the RTC increased the
amount of just compensation payable to

the Heirs of Fr. Rallos from Php

7,500.00 to Php 9,500.00 per sq m.
The City of Cebu filed with the RTC a
Notice of Appeal, which was opposed by
the Heirs of Fr. Rallos.
In the Decision12 rendered on May 29,
2007, which resolved the appeal 13 filed
by the City of Cebu, the CA opined that
the RTC erred in holding that the
reckoning point for the determination of
the amount of just compensation should
be from 1997, the time the complaint for
just compensation was filed by the Heirs
of Fr. Rallos. Notwithstanding the
foregoing, the CA still dismissed on
procedural grounds the appeal filed by
the City of Cebu. The CA pointed out
that pursuant to Sections 214 and
9,15 Rule 41 and Section 1,16 Rule 50 of
the Rules of Court, a record on appeal
and not a notice of appeal should have
been filed before it by the City of Cebu to
assail the RTC's Decisions rendered on
January 14, 2000 and July 24, 2001 and
the Orders issued on February 5, 2001
and March 21, 2002.
The City of Cebu filed before this Court a
Petition for Review on Certiorari17 to
assail the Decision rendered by the CA
on May 29, 2007. This Court denied the
same
through
a
Minute
Resolution18 issued on December 5,
2007. The said Minute Resolution was
recorded in the Book of Entries of
Judgments on April 21, 2008.19
The Heirs of Fr. Rallos thereafter filed
before the RTC a Motion for Execution
relative to the Decision rendered on July
24, 2001. They claimed that in 2001, the
City of Cebu paid them Php
34,905,000.00, but there remained a
balance of Php 46,546,920.00 left to be
paid, computed as of September 2,
2008. On its part, the City of Cebu
admitted still owing the Heirs of Fr.
Rallos but only in the amount of Php
16,893,162.08.20

On December 4, 2008, the RTC issued a

writ of execution in favor of the Heirs of
Fr. Rallos, which in part, reads:
NOW, THEREFORE, you are hereby
commanded to serve a copy hereof to
judgment obligor City of Cebu and
demand for the immediate payment of
Php 44,213,000.00, less the partial
payment of Php 34,905,000.00 plus
interest at 12% per annum to start 40
days from date of the July 24, 2001
Decision and to continue until the whole
amount has been fully paid; Php
50,000.00 as attorney's fees; and Php
50,000.00 as litigation expenses. x x x.21
Sheriff Antonio Bellones (Sheriff
Bellones) then served upon the City of
Cebu a demand letter, dated December
4, 2008, and which was amended on
January 26, 2009, indicating that:
DEMAND is hereby made for the
judgment obligor City of Cebu x x x to
facilitate the prompt payment of the
following: (a) just compensation of Lots
485-D and 485-E in the amount of Php
44,213,000.00 plus interest of 12% per
annum starting 40 days from the July
24, 2001 Decision and to continue until
the whole amount has been duly paid
less
partial
payment
of
Php
34,905,000.00 x x x.22
The City of Cebu sought the reiteration
of the directives stated in the Writ of
Execution issued on December 4, 2008
and the setting aside of the amended
demand letter served upon it by Sheriff
Bellones.
On March 16, 2009, the RTC issued an
Order23 denying the City of Cebu's
motion for the reiteration of the writ of
execution. The RTC, however, set aside
the demand letter served upon the City
of Cebu by Sheriff Bellones and
interpreted the directives of the writ of
execution issued on December 4, 2008
as:

[T]he
entire
amount
of
Php
44,213,000.00 shall be subjected to a
12% interest per annum to start 40 days
from the date the decision on July 24,
2001 [was rendered] until the amount of
Php 34,905,000.00 was partially paid
by the City of Cebu. After the payment
by the City of Cebu of a partial amount,
the balance shall again be subjected to
12% interest until the same shall have
been fully paid.24
The Heirs of Fr. Rallos assailed the
abovementioned order on the ground
that it effectively modified the final and
executory Decision rendered on July 24,
2001. They likewise sought the
application of Article 221225 of the New
Civil Code and jurisprudence so as to
entitle them to legal interest on the
interest due to them pursuant to the
Decision rendered on July 24, 2001. In
the Order issued on May 20, 2009, the
RTC did not favorably consider the
preceding claims.
A
Petition
for
Certiorari
and
Mandamus26 was then filed by the Heirs
of Fr. Rallos before the CA to challenge
the Orders issued by the RTC on March
16, 2009 and May 20, 2009. The CA
granted the petition after finding that
the two assailed orders effectively
modified the final and executory
disposition made by the RTC on March
21, 2002. The CA likewise ruled that the
case calls for the application of Article
2212 of the New Civil Code, hence, it
directed the City of Cebu to pay interest
at the rate of 12% per annum upon the
interest due, to be computed from the
date of the filing of the complaint until
full satisfaction of the obligation. The CA
stated:
Note that the final and executory
consolidated decision of July 24, 2001
as modified by the final and executory
order of March 21, 2002, clearly
directed herein respondent Cebu City to

pay interest at the rate of 12% per

annum based on the amount of
[Php]9,500.00 per square meter
starting 40 days from the date of the
decision and to continue until the entire
amount shall have been fully paid. Yet,
the assailed orders x x x, now directed
that the 12% interest per annum be paid
on the declining balance contrary to the
directive in the final and executory
judgment x x x.
xxxx
x x x [The Heirs of Fr. Rallos] are
without a doubt entitled to 12% interest
per annum on the interest due from
finality until its satisfaction x x x. The
same is proper even if not expressly
stated in the final and executory
judgment x x x.27
The City of Cebu assailed the Decision in
CA-G.R. SP No. 04418 by way of a
Petition for Review on Certiorari28filed
before this Court. The same was denied
through a Minute Resolution29 issued on
December 6, 2010. The said resolution
was recorded in this Court's Book of
Entries of Judgments on June 16, 2011.30
The Heirs of Fr. Rallos then moved for
execution relative to Civil Case No. CEB20388. The RTC granted the motion
through
the
Order31 issued
on
September 23, 2011.
The City of Cebu thereafter filed the
following: (1) Urgent Omnibus Motions
to Quash the Writ of Execution, and to
Set Aside the Notice of Garnishment; (2)
Supplemental Urgent Omnibus Motions
to Quash the Writ of Execution, and to
Set Aside the Notice of Garnishment; (3)
Motion for Issuance of Status Quo Order
Pending Resolution of [the City of
Cebu's] Urgent Omnibus Motions to
Quash the Writ of Execution and to Set
Aside the Notice of Garnishment;32 and
(4) Motion to Strike out or Expunge
Urgent
Omnibus
Motion
and
Supplemental Urgent Omnibus Motion

with Manifestation and Reservation. The

RTC denied the four motions in the
Order33 issued on October 26, 2011. The
RTC's Order34 issued on January 26,
2012 likewise did not favorably consider
the motion for reconsideration filed by
the City of Cebu. The RTC emphasized
that the Convenio35 already existed way
back in 1940, hence, it cannot be
considered as a supervening event which
transpired after the judgment in Civil
Case No. CEB-20388 had become final
and executory. The City of Cebu no
longer filed any motion or action to
assail the RTC Orders issued on October
26, 2011 and January 26, 2012.
Meanwhile, in response to Mayor
Rama's query, the Commission on
Audit's (COA) Regional Director Delfin
P. Aguilar wrote the former a
letter36 dated October 27, 2011 opining
that:
Under Administrative Circular No. 10200037 issued by the Supreme Court, it
was clearly stated that the prosecution,
enforcement or satisfaction of state
liability must be pursued in accordance
with the rules and procedures laid down
in Presidential Decree No. 1445,
otherwise known as the Government
Auditing Code of the Philippines,
wherein it is provided that all money
claims against the government must
first be filed with the [COA]. x x x.
Clearly, based on the aforementioned
Supreme Court issuance and in the line
with the rulings of the Supreme Court in
various cases against garnishment of
public funds or property to satisfy
money
judgment
against
the
government, we are of the view that the
issuance of the writ of execution for the
satisfaction of the money judgment
against the City of Cebu may be
considered beyond the powers of the
court.

On the other hand, Section 1, Rule VIII procedures prescribed in Presidential

of the 2009 Revised Rules of Procedure Decree (P.D.) No. 1445, this Court's
of the COA provides that a money Administrative
Circular
(Admin.
judgment is considered as a money Circular) No. 10-2000 and Rule VIII of
claim which is within the original the COA's Revised Rules of ProcedureG.R. No. 202651
August 1, 2012
jurisdiction of the Commission Proper were not yet complied with, hence,
(CP) of the COA and which shall be filed public funds cannot be released Issue and the Contending Parties'
directly with the Commission Secretary notwithstanding the rendition of the Claims
x x x.38
decisions and issuance of the orders by Lucena anchors the instant petition on
On February 27, 2012, the RTC issued the RTC relative to Civil Case No. CEB- the sole issue of whether or not the City
of Cebu, Mayor Rama, the presiding
another Order39 directing under pain of 20388.
contempt the Cebu branches of On April 13, 2012, the CA, through a officer and members of the Sangguniang
Philippine Veterans Bank and Postal Resolution,42 granted the City of Cebu's Panlungsod and the lawyers from the
Savings Bank to release to the concerned application for the issuance of a Office of the City Attorney committed
RTC sheriff certifications indicating the temporary restraining order (TRO) several acts of indirect contempt all
correct account names and numbers relative to CA-G.R. SP No. 06676. geared towards preventing the execution
maintained by the City of Cebu in the Subsequently, a writ of preliminary of final and executory judgments
said banks. The Order also directed the injunction was likewise issued through rendered by this Court in G.R. Nos.
179662 and 194111.
Sangguniang Panlungsod to enact an the Resolution43 dated June 26, 2012.
appropriation ordinance relative to the Lucena then filed the following petitions Lucena enumerates the allegedly
money judgment. Upon presentment of for indirect contempt, all of which in contumacious acts of the respondents as
the filing: (a) with the CA of a Petition
the ordinance, the above-mentioned relation with Civil Case No. CEB-20388:
for Annulment of Final Decision/s and
banks were expected to release the
Docket Number
Date Filed
Order/s48 again on the basis of the
amounts stated therein to satisfy the
Convenio, which was already presented
judgment rendered in favor of the HeirsSCA No. CEB-38121
October 3, 2011
and considered in the proceedings
of Fr. Rallos. The City of Cebu filed a
before the RTC, and despite the finality
Motion for Reconsideration40 against the
of the decisions and orders rendered or
Order dated February 27, 2012.
issued relative to Civil Case No. CEBEven
before
the
Motion
for
20388;
and
(b)
of
several
Reconsideration to the Order datedSCA No. CEB-38196
October 25, 2011
49
motions
before
the
RTC
in
Civil
Case
February 27, 2012 can be resolved by the
No.
CEB-20388
for
the
purpose
of
RTC, the City of Cebu filed before the CA
preventing
or
delaying
the
execution
of
a Petition for Annulment of Final
decisions and orders which had already
Decision/s and Order/s with prayer for
41
attained finality.
the issuance of injunctive reliefs. The
The respondents, on the other hand,
November 4, 2011
City of Cebu claimed that the act of theSCA No. CEB-3812
seek the dismissal of the instant action
Heirs of Fr. Rallos of suppressing the
contending that: (a) the rules on litis
existence of the Convenio amounted to
pendentia and forum shopping bar this
extrinsic fraud which would justify the
December 6, 2011
Court from giving due course to
annulment of the RTC's decisions andSCA No. CEB-38292
Lucena's petition since there are five
orders relative to Civil Case No. CEBother contempt proceedings filed
20388. In praying for the issuance of
involving the same issues and parties;
injunctive reliefs, the City of Cebu
G.R. No. 202515
July 19, 2012
(b) the injunctive writs granted to the
stressed that it had already paid the
City of Cebu by the CA in CA-G-R. SP
Heirs of Fr. Rallos Php 56,196,369.42
No. 06676 relative to the execution of
for a 4,654 sq m property or at a price of
the decisions and orders in Civil Case
Php 12,074.85 per sq m. Further, the

No. CEB-20388 rendered the instant

action as moot and academic; (c) the
legal remedies they availed of were all
pursued to protect public funds; (d) the
RTC sheriff, in attempting to execute the
decisions and orders in Civil Case No.
CEB-20388, miserably failed to comply
with the requirements provided for by
law, to wit, Section 305(a)50 of the Local
Government Code, this Court's Admin.
Circular No. 10-2000,51 P.D. No. 1445
and Rule VIII of COA's Revised Rules of
Procedure; (e) in Parel v. Heirs of
Simeon Prudencio,52 this Court declared
that a writ of execution may be assailed
when it varies the judgment, where
there has been a change in the situation
of parties making execution unjust or
inequitable, or when the judgment debt
has been paid or satisfied; (f) it would
unduly overburden the City of Cebu to
pay Php 133,469,962.55 for the subject
lots the huge portions of which are now
occupied by settlers and establishments
claiming to be owners, practically
leaving a very small and insignificant
area for use; (g) in the case of City of
Caloocan v. Hon. Allarde,53 this Court
ruled that government funds maintained
in any official depository may not be
garnished in the absence of a
corresponding appropriation as required
by law; and (h) the Sangguniang
Panlungsod cannot be compelled to pass
an appropriations ordinance to satisfy
the claims of the Heirs of Fr. Rallos for
to do otherwise would be to intrude into
the exercise of a discretionary authority
to decide a political question.
This Court's Disquisition
The instant petition lacks merit.
Lucena engaged in forum shopping.
"Forum shopping is the act of litigants
who repetitively avail themselves of
multiple judicial remedies in different
fora, simultaneously or successively, all
substantially founded on the same

transactions and the same essential facts

and
circumstances;
and
raising
substantially similar issues either
pending in or already resolved adversely
by some other court; or for the purpose
of increasing their chances of obtaining
a favorable decision, if not in one court,
then in another."54
"Forum shopping exists when the
elements of litis pendentia are present
or where a final judgment in one case
will amount to res judicata in another.
Litis pendentia requires the concurrence
of the following requisites: (1) identity of
parties, or at least such parties as those
representing the same interests in both
actions; (2) identity of rights asserted
and reliefs prayed for, the reliefs being
founded on the same facts; and (3)
identity with respect to the two
preceding particulars in the two cases,
such that any judgment that may be
rendered in the pending case, regardless
of which party is successful, would
amount to res judicata in the other
case."55
In the Verification and Non-Forum
Shopping Certification56 attached to the
instant petition and executed by Lucena,
she admitted that there are five other
pending actions for indirect contempt
which she filed relative to Civil Case No.
CEB-20388. She, however, claims that
the issues in the other five petitions are
different from that raised before this
Court now.
Lucena's claim cannot be sustained.
A comparison of the instant petition
with SCA No. CEB-3829257 filed before
the RTC of Cebu City, Branch 14 follows:
Instan
t
Petitio
n
Nature

SCA
No.
CEB38292

Petition Petition

of
Action

for
Indirec
t
Contem
pt
of
Court

Petition Lucena
er
B.
Rallos

for
Indirect
Contem
pt

Lucina
B.
Rallos

Respon
dents

City of
Cebu
Mayor
Michael
Rama
City
Council
ors
Joy
August
us
Young
Sisinio
Andale
s
Rodrig
o
Abellan
osa
Alvin
Arcilla
Raul
Alcoseb
a
Ma.
Nida
Cabrera
Robert
o
Cabarr
ubias
Alvin
Dizon
Ronald
Cuenco
Lea
Japson
Jose
Daluz
III
Edgard
o
Labella
Margar
ita
Osmen

City of
Cebu
Mayor
Michael
Rama
City
Council
ors
Joy
August
us
Young
Sisinio
Andales
Rodrigo
Abellan
osa
Alvin
Arcilla
Raul
Alcoseb
a
Ma.
Nida
Cabrera
Roberto
Cabarru
bias
Alvin
Dizon
Ronald
Cuenco
Lea
Japson
Jose
Daluz
III
Edgard
o
Labella
Margari
ta
Osmena
August
us
Pe
Richard

a
August
us Pe
Richard
Osmen
a
Noel
Wences
lao
Eduard
o
Rama,
Jr.
Michael
Ralota
John
Philip
Echave
z-Po
City
Attorne
y
Atty.
Joseph
Bernald
ez
Atty.
Jun
Marata
s
Atty.
Jerone
Castillo
Atty.
Mary
Ann
Suson
Atty.
Leslie
Ann
Reyes
Atty.
Carlo
Vincent
Gimena
Atty.

Osmena
Noel
Wences
lao
Eduard
o Rama,
Jr.
Michael
Ralota
John
Philip
Echavez
-Po

Ferdina
nd
Canete
Atty.
Ismael
Garayg
ay III
Atty.
Lecel
Llamed
o
Atty.
Marie
Velle
Abella

pt
in
relation
to their
noncomplia
nce
with
the
directiv
es
contain
ed
in
the
disposit
ive
portion
of the
Consoli
dated
Order
issued
on
March
21,
2002
by the
RTC in
Civil
Case
No.
CEB20388.5

they
perform
the said
act
of
complyi
ng
or
causing
the
complia
nce
with the
specific
directiv
es
contain
ed
in
the
disposit
ive
portion
of the
final
and
executo
ry
Consoli
dated
Order
dated
March
21,
2002.59

Prayer

Prayer
Respon
dents
be
declare
d guilty
of
indirect
contem

Respon
dents,
except
the City
of Cebu,
be
impriso
ned
until

In Arevalo,60 this Court enumerated the

three requisites of litis pendentia. There
is a confluence of these requisites
relative to the instant petition and SCA
No. CEB-38292.
Litis pendentia does not require the
exact identity of parties involved in the
actions. Although the lawyers from the
Office of the City Attorney are parties
herein but are not made respondents in
SCA No. CEB-38292, they do not in any
way represent any interest distinct or
separate from that of the City of Cebu

and the public officers involved. Further,

the instant petition superficially makes
reference to the Minute Resolutions
rendered by this Court in G.R. Nos.
179662 and 194111 which Lucena claims
had lapsed into finality and should thus
be executed. However, stripped of the
unnecessary details, the reliefs saliently
sought in both the instant petition and
SCA No. CEB-38292 are founded on the
same set of facts, to wit, the alleged non
compliance by the respondents with the
directives contained in the dispositive
portion of the Consolidated Order issued
by the RTC on March 21, 2002 relative
to Civil Case No. CEB-20388. Finally,
citation for indirect contempt in either
the instant petition or SCA No. CEB38292 would amount to res judicata in
the other considering the identities of
the parties and issues involved.
Since the elements of litis pendentia
concur in the instant petition and SCA
No. CEB-38292, this Court so holds
Lucena guilty of forum shopping.
"[T]he grave evil sought to be avoided by
the rule against forum shopping is the
rendition by two competent tribunals of
two
separate
and
contradictory
decisions. To avoid any confusion, this
Court adheres strictly to the rules
against forum shopping, and any
violation of these rules results in the
dismissal of a case."61
Further, "once there is a finding of
forum shopping, the penalty is summary
dismissal not only of the petition
pending before this Court, but also of
the other case that is pending in a lower
court. This is so because twin dismissal
is a punitive measure to those who trifle
with the orderly administration of
justice."62
Even if in the higher interest of justice,
this Court were to be exceptionally
liberal and gloss over Lucena's act of

forum shopping, the instant petition

would still be susceptible to dismissal.
While this Court does not intend to
downplay the rights accruing to the
owners of properties expropriated by the
government, it bears stressing that the
exercise and enforcement of those rights
are subject to compliance with the
requirements provided for by law to
protect public funds.
Lucena avers that the respondents
willfully and maliciously defy the
execution of final and executory
decisions and orders rendered or issued
relative to Civil Case No. CEB-20388.
Such averment is untenable.
The respondents allege and Lucena does
not refute, that the City of Cebu had
already paid the Heirs of Fr. Rallos Php
56,196,369.42 for a 4,654 sq m property
or at a price of Php 12,074.85 per sq m.
The controversy remains and the parties
resort to all legal maneuverings because
the Heirs of Fr. Rallos obdurately insist
that they are still entitled to collect from
the City of Cebu a balance of Php
133,469,962.55.
The Heirs of Fr. Rallos are bent on
collecting the amount allegedly still
unpaid by the City of Cebu in
accordance with the computations
stated in the decisions and orders in
Civil Case No. CEB-20388. However,
the Heirs of Fr. Rallos are impervious to
the requisites laid down by law in
enforcing their claims. The requisites
are two-fold as discussed below.
An appropriation ordinance should be
passed prior to the disbursement of
public funds.
"Even though the rule as to immunity of
a state from suit is relaxed, the power of
the courts ends when the judgment is
rendered. Although the liability of the
state has been judicially ascertained, the
state is at liberty to determine for itself
whether to pay the judgment or not, and

execution cannot issue on a judgment

against the state. Such statutes do not
authorize a seizure of state property to
satisfy judgments recovered, and only
convey an implication that the
legislature will recognize such judgment
as final and make provision for the
satisfaction thereof."63
Section 4(1) of P.D. No. 1445 and
Section 305(a) of the Local Government
Code both categorically state that no
money shall be paid out of any public
treasury or depository except in
pursuance of an appropriation law or
other specific statutory authority. Based
on considerations of public policy,
government funds and properties may
not be seized under writs of execution or
garnishment to satisfy judgments
rendered
by
the
courts
and
disbursements of public funds must be
covered
by
the
corresponding
appropriation as required by law.64
In the case at bar, no appropriation
ordinance had yet been passed relative
to the claims of the Heirs of Fr. Rallos.
Such being the case, the respondents, as
public officers, are acting within lawful
bounds in refusing the execution of the
decisions and orders in Civil Case No.
CEB-20388.
Despite the rendition of a final and
executory judgment validating a money
claim
against
an
agency
or
instrumentality of the Government, its
filing with the COA is a sine qua non
condition before payment can be
effected.
Section 26 of P.D. No. 1445 states that
the COA has jurisdiction to examine,
audit and settle all debts and claims of
any sort due from or owing to the
Government or any of its subdivisions,
agencies and instrumentalities. Under
Section 5(b), Rule II of COA's Revised
Rules of Procedure, local government
units are expressly included as among

the
entities
within
the
COA's
jurisdiction. Section 2,65 Rule VIII lays
down the procedure in filing money
claims against the Government. Section
4, Rule X provides that any case brought
to the COA shall be decided within 60
days from the date it is submitted for
decision or resolution. Section 1, Rule
XII allows the aggrieved party to file a
petition for certiorari before this Court
to assail any decision, order or
resolution of the COA within 30 days
from receipt of a copy thereof.
This Court, in the case of University of
the Philippines v. Dizon,66 thus held that
despite the existence of a final and
executory judgment validating the claim
against an agency or instrumentality of
the Government, the settlement of the
said claim is still subject to the primary
jurisdiction of the COA. Ineluctably, the
claimant has to first seek the COA's
approval of the monetary claim.67
Without compliance by Lucena and the
Heirs of Fr. Rallos with the provisions of
P.D. No. 1445 and the COA's Revised
Rules of Procedure, their lamentations
that the respondents are unjustly
refusing the execution of the decisions
and orders in Civil Case No. CEB-20388
do not hold any water.
IN VIEW OF THE FOREGOING, the
instant petition is DISMISSED. Further,
on account of Lucena Rallos' act of
forum shopping, the Regional Trial
Court of Cebu City, Branch 14, is
likewise directed to dismiss her petition
for contempt, docketed as SCA No. CEB38292, which she filed against the
respondents.
SO ORDERED.
G.R. No. 134971
March 25,
2004
HERMINIO
TAYAG, petitioner,
vs.
AMANCIA LACSON, ROSENDO

LACSON,
ANTONIO
LACSON,
JUAN
LACSON,
TEODISIA
LACSON-ESPINOSA
and
THE
COURT OF APPEALS, respondents.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on
certiorari of the Decision1 and the
Resolution2 of respondent Court of
Appeals in CA-G.R. SP No. 44883.
The Case for the Petitioner
Respondents Angelica Tiotuyco Vda. de
Lacson,3 and her children Amancia,
Antonio, Juan, and Teodosia, all
surnamed Lacson, were the registered
owners of three parcels of land located
in Mabalacat, Pampanga, covered by
Transfer Certificates of Title (TCT) Nos.
35922-R, 35923-R, and 35925-R,
registered in the Register of Deeds of
San
Fernando,
Pampanga.
The
properties,
which
were
tenanted
agricultural lands,4 were administered
by Renato Espinosa for the owner.
On March 17, 1996, a group of original
farmers/tillers, namely, Julio Tiamson,
Renato Gozun, Rosita Hernandez,
Bienvenido Tongol, Alfonso Flores,
Norma Quiambao, Rosita Tolentino,
Jose Sosa, Francisco Tolentino, Sr.,
Emiliano Laxamana, Ruben Torres,
Meliton Allanigue, Dominga Laxamana,
Felicencia de Leon, Emiliano Ramos,
and another group, namely, Felino G.
Tolentino, Rica Gozun, Perla Gozun,
Benigno Tolentino, Rodolfo Quiambao,
Roman Laxamana, Eddie San Luis,
Ricardo
Hernandez,
Nicenciana
Miranda, Jose Gozun, Alfredo Sosa, Jose
Tiamson, Augusto Tolentino, Sixto
Hernandez, Alex Quiambao, Isidro
Tolentino, Ceferino de Leon, Alberto
Hernandez, Orlando Flores, and Aurelio
Flores,5 individually executed in favor of
the petitioner separate Deeds of
Assignment6 in which the assignees
assigned to the petitioner their

respective rights as tenants/tillers of the

landholdings possessed and tilled by
them for and in consideration of P50.00
per square meter. The said amount was
made payable "when the legal
impediments to the sale of the property
to the petitioner no longer existed." The
petitioner was also granted the exclusive
right to buy the property if and when the
respondents, with the concurrence of
the defendants-tenants, agreed to sell
the property. In the interim, the
petitioner gave varied sums of money to
the tenants as partial payments, and the
latter issued receipts for the said
amounts.
On July 24, 1996, the petitioner called a
meeting of the defendants-tenants to
work out the implementation of the
terms
of
their
separate
agreements.7 However, on August 8,
1996, the defendants-tenants, through
Joven Mariano, wrote the petitioner
stating that they were not attending the
meeting and instead gave notice of their
collective decision to sell all their rights
and interests, as tenants/lessees, over
the
landholding
to
the
8
respondents. Explaining their reasons
for their collective decision, they wrote
as follows:
Kami ay nagtiwala sa inyo, naging tapat
at nanindigan sa lahat ng ating
napagkasunduan, hindi tumanggap ng
ibang buyer o ahente, pero sinira ninyo
ang aming pagtitiwala sa pamamagitan
ng demanda ninyo at pagbibigay ng
problema sa amin na hindi naman
nagbenta ng lupa.
Kaya kami ay nagpulong at nagpasya na
ibenta na lang ang aming karapatan o
ang aming lupang sinasaka sa
landowner o sa mga pamilyang Lacson,
dahil ayaw naming magkaroon ng
problema.
Kaya kung ang sasabihin ninyong itoy
katangahan, lalo sigurong magiging

katangahan kung ibebenta pa namin sa

inyo ang aming lupang sinasaka, kaya
pasensya na lang Mister Tayag. Dahil
sinira ninyo ang aming pagtitiwala at
katapatan.9
On August 19, 1996, the petitioner filed
a complaint with the Regional Trial
Court of San Fernando, Pampanga,
Branch 44, against the defendantstenants, as well as the respondents, for
the court to fix a period within which to
pay the agreed purchase price of P50.00
per square meter to the defendants, as
provided for in the Deeds of
Assignment. The petitioner also prayed
for a writ of preliminary injunction
against the defendants and the
respondents therein.10 The case was
docketed as Civil Case No. 10910.
In his complaint, the petitioner alleged,
inter alia, the following:
4. That defendants Julio Tiamson,
Renato Gozun, Rosita Hernandez,
Bienvenido Tongol, Alfonso Flores,
Norma Quiambao, Rosita Tolentino,
Jose Sosa, Francisco Tolentino, Sr.,
Emiliano Laxamana, Ruben Torres,
Meliton Allanigue, Dominga Laxamana,
Felicencia de Leon, Emiliano Ramos are
original farmers or direct tillers of
landholdings over parcels of lands
covered by Transfer Certificate of Title
Nos. 35922-R, 35923-R and 35925-R
which are registered in the names of
defendants LACSONS; while defendants
Felino G. Tolentino, Rica Gozun, Perla
Gozun, Benigno Tolentino, Rodolfo
Quiambao, Roman Laxamana, Eddie
San Luis, Alfredo Gozun, Jose Tiamson,
Augusto Tolentino, Sixto Hernandez,
Alex Quiambao, Isidro Tolentino,
Ceferino de Leon, Alberto Hernandez,
and Aurelio Flores are sub-tenants over
the same parcel of land.
5. That on March 17, 1996 the
defendants TIAMSON, et al., entered
into Deeds of Assignment with the

plaintiff by which the defendants

assigned all their rights and interests on
their landholdings to the plaintiff and
that on the same date (March 17, 1996),
the defendants received from the
plaintiff partial payments in the
amounts corresponding to their names.
Subsequent
payments
were
also
received:
1st
PAY
MEN
T
1.Juli
o
P
Tiams 20,0
on - - 00
----

2nd
PAY
MEN
T

CH
EC
TOTAL
K
NO.

P
231
10,62
281
1.54

2.
P
96,00
Renat 10,00 0
o
0
Gozu
n--- - [son
of
Felix
Gozu
n
(dece
ased)]
3.
Rosita
P
14,37
Herna
5,000 4.24
ndez --4.
P
14,46
Bienv 10,00 5.90
enido 0
Tongo
l - - [Son
of
Abun

P
30,621.5
4
106,000.
00

dio
Tongo
l
(dece
ased)]
5.
Alfons
P
o
26,64 231
30,00
Flores
8.40 271
0
----6.
Norm
a
Quia
mbao
----

P
41,50
10,00
1.10
0

7.
Rosita P
22,12
Tolent 10,00
6.08
ino - - 0
---

231
279

231
284

8.
Jose
P
14,86 231
Sosa - 10,00
1.31
291
----- 0
---

231
274

231
285

P
19,374.2
4
24,46
5.90

9.
Franci
P
sco
24,23 231
10,00
Tolent
7.62
283
0
ino,
Sr.
10.
Emili
ano
Laxa
mana
-11.
Rube
n
Torre

56,64
8.40

51,501
.10

32,12
6.08

24,86
1.31

34,23
7.62

s - - - - [Son
of
Maria
no
Torre
s
(dece
ased)]
12.
Melit P
12,94
on
10,00
4.77
Allani 0
gue

231
269

P
22,94
4.77

13.
Domi
nga
Laxa
mana

P
22,26 231
5,000 9.02 275

27,26
9.02

14.
Felice
ncia
de
Leon

10,00
-----0

15.
Emili
ano
Ramo
s

5,000

----------

18,86 231 23,86

9.60 280 9.60

16.
Felino
10,00
G.
-----0
Tolent
ino

----------

----------

17.
Rica
Gozu
n

5,000 ------

----------

P
P
----- P
10,00 33,58 43,58
0
7.31
7.31

18.
Perla
Gozu
n

10,00
-----0

----------

P
10,00 -----0

19.
Benig
10,00
no
-----0
Tolent
ino

----------

20.
Rodol
10,00
fo
-----0
Quia
mbao

----------

21.
Roma
10,00
n
-----0
Laxa
mana

----------

22.
Eddie
San
Luis

10,00
-----0

----------

23.
Ricar
10,00
do
-----0
Herna
ndez

----------

24.
Nicen
10,00
ciana
-----0
Miran
da

----------

25.
Jose
Gozu
n

10,00
-----0

26.
Alfred 5,000 -----o Sosa
27.
Jose
10,00
-----Tiams 0
on
28.
5,000 -----Augus

----------

to
Tolent
ino
29.
Sixto 10,00
-----Herna 0
ndez

----------

30.
Alex
Quia
mbao

10,00
-----0

----------

31.
Isidro 10,00
-----Tolent 0
ino

----------

32.
Ceferi
-----no de
Leon

231
270

11,37
8.70

------

33.
Albert
10,00
o
-----0
Herna
ndez

----------

34.
Orlan 10,00
-----do
0
Florez

----------

35.
Aureli 10,00
-----o
0
Flores

----------

6. That on July 24, 1996, the plaintiff

wrote the defendants TIAMSON, et al.,
---------- inviting them for a meeting regarding
the negotiations/implementations of the
terms of their Deeds of Assignment;
7. That on August 8, 1996, the
---------- defendants TIAMSON, et al., through
Joven Mariano, replied that they are no
longer willing to pursue with the
----- ------ negotiations, and instead they gave
notice to the plaintiff that they will sell

all their rights and interests to the

registered
owners
(defendants
LACSONS).
A copy of the letter is hereto attached as
Annex "A" etc.;
8. That the defendants TIAMSON, et.
al., have no right to deal with the
defendants LACSON or with any third
persons while their contracts with the
plaintiff are subsisting; defendants
LACSONS are inducing or have induced
the defendants TIAMSON, et. al., to
violate their contracts with the plaintiff;
9. That by reason of the malicious acts of
all the defendants, plaintiff suffered
moral damages in the forms of mental
anguish, mental torture and serious
anxiety which in the sum of
P500,000.00 for which defendants
should be held liable jointly and
severally.11
In support of his plea for injunctive
relief, the petitioner, as plaintiff, also
alleged the following in his complaint:
11. That to maintain the status quo, the
defendants TIAMSON, et al., should be
restrained
from
rescinding
their
contracts with the plaintiff, and the
defendants LACSONS should also be
restrained from accepting any offer of
sale or alienation with the defendants
TIAMSON, et al., in whatever form, the
latters rights and interests in the
properties mentioned in paragraph 4
hereof; further, the LACSONS should be
restrained from encumbering/alienating
the subject properties covered by TCT
No. 35922-R, 35923-R and TCT No.
35925-R, Registry of Deeds of San
Fernando, Pampanga;
12. That the defendants TIAMSON, et
al., threaten to rescind their contracts
with the plaintiff and are also bent on
selling/alienating their rights and
interests over the subject properties to
their co-defendants (LACSONS) or any
other persons to the damage and

prejudice of the plaintiff who already

invested much money, efforts and time
in the said transactions;
13. That the plaintiff is entitled to the
reliefs being demanded in the
complaint;
14. That to prevent irreparable damages
and prejudice to the plaintiff, as the
latter has no speedy and adequate
remedy under the ordinary course of
law, it is essential that a Writ of
Preliminary Injunction be issued
enjoining and restraining the defendants
TIAMSON, et al., from rescinding their
contracts with the plaintiff and from
selling/alienating their properties to the
LACSONS or other persons;
15. That the plaintiff is willing and able
to put up a reasonable bond to answer
for the damages which the defendants
would suffer should the injunction
prayed for and granted be found without
basis.12
The petitioner prayed, that after the
proceedings, judgment be rendered as
follows:
1. Pending the hearing, a Writ of
Preliminary Injunction be issued
prohibiting, enjoining and restraining
defendants Julio Tiamson, Renato
Gozun, Rosita Hernandez, Bienvenido
Tongol,
Alfonso
Flores,
Norma
Quiambao, Rosita Tolentino, Jose Sosa,
Francisco Tolentino Sr., Emiliano
Laxamana, Ruben Torres, Meliton
Allanigue,
Dominga
Laxamana,
Felicencia de Leon, Emiliano Ramos,
Felino G. Tolentino, Rica Gozun, Perla
Gozun, Benigno Tolentino, Rodolfo
Quiambao, Roman Laxamana, Eddie
San
Luis,
Ricardo
Hernandez,
Nicenciana Miranda, Jose Gozun,
Alfredo Sosa, Jose Tiamson, Augusto
Tolentino, Ceferino de Leon, Alberto
Hernandez, Orlando Flores, and Aurelio
Flores from rescinding their contracts
with the plaintiff and from alienating

their rights and interest over the

aforementioned properties in favor of
defendants LACSONS or any other third
persons; and prohibiting the defendants
LACSONS from encumbering/alienating
TCT Nos. 35922-R, 35923-R and 35925R of the Registry of Deeds of San
Fernando, Pampanga.
2. And pending the hearing of the Prayer
for a Writ of Preliminary Injunction, it is
prayed that a restraining order be issued
restraining
the
aforementioned
defendants (TIAMSON, et al.) from
rescinding their contracts with the
plaintiff and from alienating the subject
properties to the defendants LACSONS
or any third persons; further, restraining
and enjoining the defendants LACSONS
from
encumbering/selling
the
properties covered by TCT Nos. 35922R, 35923-R, and 35925-R of the Registry
of Deeds of San Fernando, Pampanga.
3. Fixing the period within which
plaintiff shall pay the balance of the
purchase price to the defendants
TIAMSON, et al., after the lapse of legal
impediment, if any.
4. Making the Writ of Preliminary
Injunction permanent;
5. Ordering the defendants to pay the
plaintiff the sum of P500,000.00 as
moral damages;
6. Ordering the defendants to pay the
plaintiff attorneys fees in the sum of
P100,000.00 plus litigation expenses of
P50,000.00;
Plaintiff prays for such other relief as
may be just and equitable under the
premises.13
In their answer to the complaint, the
respondents as defendants asserted that
(a) the defendant Angelica Vda. de
Lacson had died on April 24, 1993; (b)
twelve of the defendants were
tenants/lessees of respondents, but the
tenancy status of the rest of the
defendants was uncertain; (c) they never

induced the defendants Tiamson to

violate their contracts with the
petitioner; and, (d) being merely
tenants-tillers, the defendants-tenants
had no right to enter into any
transactions involving their properties
without their knowledge and consent.
They also averred that the transfers or
assignments of leasehold rights made by
the defendants-tenants to the petitioner
is contrary to Presidential Decree (P.D.)
No. 27 and Republic Act No. 6657, the
Comprehensive
Agrarian
Reform
Program (CARP).14 The respondents
interposed counterclaims for damages
against the petitioner as plaintiff.
The defendants-tenants Tiamson, et al.,
alleged
in
their
answer
with
counterclaim for damages, that the
money each of them received from the
petitioner were in the form of loans, and
that they were deceived into signing the
deeds of assignment:
a) That all the foregoing allegations in
the Answer are hereby repleaded and
incorporated in so far as they are
material and relevant herein;
b) That the defendants Tiamson, et al.,
in so far as the Deeds of Assignment are
concern[ed] never knew that what they
did sign is a Deed of Assignment. What
they knew was that they were made to
sign a document that will serve as a
receipt for the loan granted [to] them by
the plaintiff;
c) That the Deeds of Assignment were
signed through the employment of
fraud, deceit and false pretenses of
plaintiff and made the defendants
believe that what they sign[ed] was a
mere receipt for amounts received by
way of loans;
d) That the documents signed in blank
were filled up and completed after the
defendants Tiamson, et al., signed the
documents and their completion and
accomplishment was done in the

absence of said defendants and, worst of

all, defendants were not provided a copy
thereof;
e) That as completed, the Deeds of
Assignment
reflected
that
the
defendants Tiamson, et al., did assign all
their rights and interests in the
properties or landholdings they were
tilling in favor of the plaintiff. That if
this is so, assuming arguendo that the
documents were voluntarily executed,
the defendants Tiamson, et al., do not
have any right to transfer their interest
in the landholdings they are tilling as
they have no right whatsoever in the
landholdings, the landholdings belong
to their co-defendants, Lacson, et al.,
and therefore, the contract is null and
void;
f) That while it is admitted that the
defendants Tiamson, et al., received
sums of money from plaintiffs, the same
were received as approved loans granted
by plaintiff to the defendants Tiamson,
et al., and not as part consideration of
the alleged Deeds of Assignment; and by
way of:15
At the hearing of the petitioners plea for
a writ of preliminary injunction, the
respondents counsel failed to appear. In
support of his plea for a writ of
preliminary injunction, the petitioner
adduced in evidence the Deeds of
Assignment,16 the receipts17 issued by the
defendants-tenants for the amounts they
received from him; and the letter 18 the
petitioner received from the defendantstenants. The petitioner then rested his
case.
The respondents, thereafter, filed a
Comment/Motion to dismiss/deny the
petitioners plea for injunctive relief on
the following grounds: (a) the Deeds of
Assignment executed by the defendantstenants were contrary to public policy
and P.D. No. 27 and Rep. Act No. 6657;
(b) the petitioner failed to prove that the

respondents induced the defendantstenants to renege on their obligations

under the "Deeds of Assignment;" (c)
not being privy to the said deeds, the
respondents are not bound by the said
deeds; and, (d) the respondents had the
absolute right to sell and dispose of their
property and to encumber the same and
cannot be enjoined from doing so by the
trial court.
The petitioner opposed the motion,
contending that it was premature for the
trial court to resolve his plea for
injunctive relief, before the respondents
and the defendants-tenants adduced
evidence in opposition thereto, to afford
the petitioner a chance to adduce
rebuttal evidence and prove his
entitlement to a writ of preliminary
injunction. The respondents replied that
it was the burden of the petitioner to
establish the requisites of a writ of
preliminary injunction without any
evidence on their part, and that they
were not bound to adduce any evidence
in opposition to the petitioners plea for
a writ of preliminary injunction.
On February 13, 1997, the court issued
an Order19 denying the motion of the
respondents for being premature. It
directed the hearing to proceed for the
respondents to adduce their evidence.
The court ruled that the petitioner, on
the basis of the material allegations of
the complaint, was entitled to injunctive
relief. It also held that before the court
could resolve the petitioners plea for
injunctive relief, there was need for a
hearing to enable the respondents and
the defendants-tenants to adduce
evidence to controvert that of the
petitioner. The respondents filed a
motion for reconsideration, which the
court denied in its Order dated April 16,
1997. The trial court ruled that on the
face of the averments of the complaint,
the pleadings of the parties and the

evidence adduced by the petitioner, the

latter was entitled to injunctive relief
unless the respondents and the
defendants-tenants
adduced
controverting evidence.
The respondents, the petitioners
therein, filed a petition for certiorari in
the Court of Appeals for the nullification
of the February 13, 1997 and April 16,
1997 Orders of the trial court. The case
was docketed as CA-G.R. SP No. 44883.
The petitioners therein prayed in their
petition that:
1. An order be issued declaring the
orders of respondent court dated
February 13, 1997 and April 16, 1997 as
null and void;
2. An order be issued directing the
respondent court to issue an order
denying the application of respondent
Herminio Tayag for the issuance of a
Writ of Preliminary Injunction and/or
restraining order.
3. In the meantime, a Writ of
Preliminary Injunction be issued against
the respondent court, prohibiting it
from issuing its own writ of injunction
against Petitioners, and thereafter
making said injunction to be issued by
this Court permanent.
Such other orders as may be deemed
just & equitable under the premises also
prayed for.20
The respondents asserted that the Deeds
of Assignment executed by the assignees
in favor of the petitioner were contrary
to paragraph 13 of P.D. No. 27 and the
second paragraph of Section 70 of Rep.
Act No. 6657, and, as such, could not be
enforced by the petitioner for being null
and void. The respondents also claimed
that the enforcement of the deeds of
assignment was subject to a supervening
condition:
3. That this exclusive and absolute right
given to the assignee shall be exercised
only when no legal impediments exist to

the lot to effect the smooth transfer of

lawful ownership of the lot/property in
the name of the ASSIGNEE.21
The respondents argued that until such
condition took place, the petitioner
would not acquire any right to enforce
the
deeds
by
injunctive
relief.
Furthermore, the petitioners plea in his
complaint before the trial court, to fix a
period within which to pay the balance
of the amounts due to the tenants under
said deeds after the "lapse" of any legal
impediment, assumed that the deeds
were valid, when, in fact and in law, they
were not. According to the respondents,
they were not parties to the deeds of
assignment; hence, they were not bound
by the said deeds. The issuance of a writ
of preliminary injunction would restrict
and impede the exercise of their right to
dispose of their property, as provided for
in Article 428 of the New Civil Code.
They asserted that the petitioner had no
cause of action against them and the
defendants-tenants.
On April 17, 1998, the Court of Appeals
rendered its decision against the
petitioner, annulling and setting aside
the assailed orders of the trial court; and
permanently enjoining the said trial
court from proceeding with Civil Case
No. 10901. The decretal portion of the
decision reads as follows:
However, even if private respondent is
denied of the injunctive relief he
demands in the lower court still he could
avail of other course of action in order to
protect his interest such as the
institution of a simple civil case of
collection of money against TIAMSON,
et al.
For all the foregoing considerations, the
orders dated 13 February 1997 and 16
April 1997 are hereby NULLIFIED and
ordered SET ASIDE for having been
issued with grave abuse of discretion
amounting to lack or excess of

jurisdiction.
Accordingly,
public
respondent is permanently enjoined
from proceeding with the case
designated as Civil Case No. 10901.22
The CA ruled that the respondents could
not be enjoined from alienating or even
encumbering their property, especially
so since they were not privies to the
deeds of assignment executed by the
defendants-tenants. The defendantstenants were not yet owners of the
portions of the landholdings respectively
tilled by them; as such, they had nothing
to assign to the petitioner. Finally, the
CA ruled that the deeds of assignment
executed by the defendants-tenants
were contrary to P.D. No. 27 and Rep.
Act No. 6657.
On August 4, 1998, the CA issued a
Resolution denying the petitioners
motion for reconsideration.23
Hence, the petitioner filed his petition
for review on certiorari before this
Court, contending as follows:
I
A MERE ALLEGATION IN THE
ANSWER OF THE TENANTS COULD
NOT BE USED AS EVIDENCE OR
BASIS FOR ANY CONCLUSION, AS
THIS ALLEGATION, IS STILL THE
SUBJECT OF TRIAL IN THE LOWER
COURT (RTC).24
II
THE COURT OF APPEALS CANNOT
ENJOIN THE HEARING OF A
PETITION
FOR
PRELIMINARY
INJUNCTION AT A TIME WHEN THE
LOWER COURT (RTC) IS STILL
RECEIVING EVIDENCE PRECISELY
TO DETERMINE WHETHER OR NOT
THE
WRIT
OF
PRELIMINARY
INJUNCTION BEING PRAYED FOR BY
TAYAG SHOULD BE GRANTED OR
NOT.25
III
THE COURT OF APPEALS CANNOT
USE "FACTS" NOT IN EVIDENCE, TO

SUPPORT ITS CONCLUSION THAT

THE TENANTS ARE NOT YET
"AWARDEES
OF
THE
LAND
REFORM.26
IV
THE COURT OF APPEALS CANNOT
CAUSE THE PERMANENT STOPPAGE
OF THE ENTIRE PROCEEDINGS
BELOW INCLUDING THE TRIAL ON
THE
MERITS
OF
THE
CASE
CONSIDERING THAT THE ISSUE
INVOLVED ONLY THE PROPRIETY
OF MAINTAINING THE STATUS
QUO.27
V
THE COURT OF APPEALS CANNOT
INCLUDE IN ITS DECISION THE
CASE OF THE OTHER 35 TENANTS
WHO DO NOT QUESTION THE
JURISDICTION OF THE LOWER
COURT (RTC) OVER THE CASE AND
WHO
ARE
IN
FACT
STILL
PRESENTING THEIR EVIDENCE TO
OPPOSE THE INJUNCTION PRAYED
FOR, AND TO PROVE AT THE SAME
TIME THE COUNTER-CLAIMS THEY
FILED AGAINST THE PETITIONER.28
VI
THE LOWER COURT (RTC) HAS
JURISDICTION OVER THE CASE
FILED BY TAYAG FOR "FIXING OF
PERIOD" UNDER ART. 1197 OF THE
NEW CIVIL CODE AND FOR
"DAMAGES" AGAINST THE LACSONS
UNDER ART. 1314 OF THE SAME
CODE. THIS CASE CANNOT BE
SUPPRESSED
OR
RENDERED
NUGATORY UNCEREMONIOUSLY.29
The petitioner faults the Court of
Appeals for permanently enjoining the
trial court from proceeding with Civil
Case No. 10910. He opines that the same
was too drastic, tantamount to a
dismissal of the case. He argues that at
that stage, it was premature for the
appellate court to determine the merits
of the case since no evidentiary hearing

thereon was conducted by the trial

court. This, the Court of Appeals cannot
do, since neither party moved for the
dismissal of Civil Case No. 10910. The
petitioner points out that the Court of
Appeals, in making its findings, went
beyond the issue raised by the private
respondents, namely, whether or not the
trial court committed a grave abuse of
discretion amounting to excess or lack of
jurisdiction when it denied the
respondents
motion
for
the
denial/dismissal of the petitioners plea
for a writ of preliminary injunction. He,
likewise, points out that the appellate
court erroneously presumed that the
leaseholders were not DAR awardees
and that the deeds of assignment were
contrary to law. He contends that
leasehold tenants are not prohibited
from conveying or waiving their
leasehold rights in his favor. He insists
that there is nothing illegal with his
contracts with the leaseholders, since
the same shall be effected only when
there are no more "legal impediments."
At bottom, the petitioner contends that,
at that stage, it was premature for the
appellate court to determine the merits
of his case since no evidentiary hearing
on the merits of his complaint had yet
been conducted by the trial court.
The
Comment/Motion
of
the
Respondents
to
Dismiss/Deny
Petitioners
Plea
for
a
Writ
of
Preliminary
Injunction
Was Not Premature.
Contrary to the ruling of the trial court,
the motion of the respondents to
dismiss/deny the petitioners plea for a
writ of preliminary injunction after the
petitioner had adduced his evidence,
testimonial and documentary, and had
rested his case on the incident, was
proper and timely. It bears stressing that
the petitioner had the burden to prove
his right to a writ of preliminary

injunction. He may rely solely on the

material allegations of his complaint or
adduce evidence in support thereof. The
petitioner adduced his evidence to
support his plea for a writ of preliminary
injunction against the respondents and
the defendants-tenants and rested his
case on the said incident. The
respondents then had three options: (a)
file a motion to deny/dismiss the motion
on the ground that the petitioner failed
to discharge his burden to prove the
factual and legal basis for his plea for a
writ of preliminary injunction and, if the
trial court denies his motion, for them to
adduce evidence in opposition to the
petitioners plea; (b) forgo their motion
and
adduce
testimonial
and/or
documentary evidence in opposition to
the petitioners plea for a writ of
preliminary injunction; or, (c) waive
their right to adduce evidence and
submit the incident for consideration on
the basis of the pleadings of the parties
and the evidence of the petitioner. The
respondents opted not to adduce any
evidence, and instead filed a motion to
deny or dismiss the petitioners plea for
a writ of preliminary injunction against
them, on their claim that the petitioner
failed to prove his entitlement thereto.
The trial court cannot compel the
respondents to adduce evidence in
opposition to the petitioners plea if the
respondents opt to waive their right to
adduce such evidence. Thus, the trial
court should have resolved the
respondents motion even without the
latters opposition and the presentation
of evidence thereon.
The
RTC
Committed
a
Grave
Abuse
of
Discretion
Amounting
to Excess or Lack of Jurisdiction
in Issuing its February 13, 1997
and April 16, 1997 Orders
In its February 13, 1997 Order, the trial
court ruled that the petitioner was

entitled to a writ of preliminary

injunction against the respondents on
the basis of the material averments of
the complaint. In its April 16, 1997
Order, the trial court denied the
respondents motion for reconsideration
of the previous order, on its finding that
the petitioner was entitled to a writ of
preliminary injunction based on the
material allegations of his complaint, the
evidence on record, the pleadings of the
parties, as well as the applicable laws:
For the record, the Court denied the
LACSONS COMMENT/MOTION on the
basis of the facts culled from the
evidence presented, the pleadings and
the law applicable unswayed by the
partisan or personal interests, public
opinion or fear of criticism (Canon 3,
Rule 3.02, Code of Judicial Ethics).30
Section 3, Rule 58 of the Rules of Court,
as amended, enumerates the grounds
for the issuance of a writ of preliminary
injunction, thus:
(a) That the applicant is entitled to the
relief demanded, and the whole or part
of such relief consists in restraining the
commission or continuance of the act or
acts complained of, or in requiring the
performance of an act or acts, either for
a limited period or perpetually;
(b) That the commission, continuance or
non-performance of the act or acts
complained of during the litigation
would probably work injustice to the
applicant; or
(c) That a party, court, agency or a
person is doing, threatening, or is
attempting to do, or is procuring or
suffering to be done, some act or acts
probably in violation of the rights of the
applicant respecting the subject of the
action or proceeding, and tending to
render the judgment ineffectual.
A preliminary injunction is an
extraordinary event calculated to
preserve or maintain the status quo of

things ante litem and is generally availed

of to prevent actual or threatened acts,
until the merits of the case can be heard.
Injunction is accepted as the strong arm
of
equity
or
a
transcendent
remedy.31 While generally the grant of a
writ of preliminary injunction rests on
the sound discretion of the trial court
taking cognizance of the case, extreme
caution must be observed in the exercise
of such discretion.32 Indeed, in Olalia v.
Hizon,33 we held:
It has been consistently held that there
is no power the exercise of which is
more delicate, which requires greater
caution,
deliberation
and
sound
discretion, or more dangerous in a
doubtful case, than the issuance of an
injunction. It is the strong arm of equity
that should never be extended unless to
cases of great injury, where courts of law
cannot
afford
an
adequate
or
commensurate remedy in damages.
Every court should remember that an
injunction is a limitation upon the
freedom of action of the defendant and
should not be granted lightly or
precipitately. It should be granted only
when the court is fully satisfied that the
law permits it and the emergency
demands it.34
The very foundation of the jurisdiction
to issue writ of injunction rests in the
existence of a cause of action and in the
probability of irreparable injury,
inadequacy of pecuniary compensation
and the prevention of the multiplicity of
suits. Where facts are not shown to
bring the case within these conditions,
the relief of injunction should be
refused.35
For the court to issue a writ of
preliminary injunction, the petitioner
was burdened to establish the following:
(1) a right in esse or a clear and
unmistakable right to be protected; (2) a
violation of that right; (3) that there is

an urgent and permanent act and urgent

necessity for the writ to prevent serious
damage.36 Thus, in the absence of a clear
legal right, the issuance of the injunctive
writ constitutes a grave abuse of
discretion. Where the complainants
right is doubtful or disputed, injunction
is not proper. Injunction is a
preservative remedy aimed at protecting
substantial rights and interests. It is not
designed to protect contingent or future
rights. The possibility of irreparable
damage without proof of adequate
existing rights is not a ground for
injunction.37
We have reviewed the pleadings of the
parties and found that, as contended by
the respondents, the petitioner failed to
establish the essential requisites for the
issuance of a writ of preliminary
injunction. Hence, the trial court
committed a grave abuse of its
discretion amounting to excess or lack of
jurisdiction in denying the respondents
comment/motion as well as their
motion for reconsideration.
First. The trial court cannot enjoin the
respondents, at the instance of the
petitioner, from selling, disposing of and
encumbering their property. As the
registered owners of the property, the
respondents have the right to enjoy and
dispose of their property without any
other limitations than those established
by law, in accordance with Article 428 of
the Civil Code. The right to dispose of
the property is the power of the owner to
sell, encumber, transfer, and even
destroy the property. Ownership also
includes the right to recover the
possession of the property from any
other person to whom the owner has not
transmitted such property, by the
appropriate action for restitution, with
the fruits, and for indemnification for
damages.38 The right of ownership of the
respondents is not, of course, absolute.

It is limited by those set forth by law,

such as the agrarian reform laws. Under
Article 1306 of the New Civil Code, the
respondents may enter into contracts
covering their property with another
under such terms and conditions as they
may deem beneficial provided they are
not contrary to law, morals, good
conduct, public order or public policy.
The respondents cannot be enjoined
from selling or encumbering their
property simply and merely because
they had executed Deeds of Assignment
in favor of the petitioner, obliging
themselves to assign and transfer their
rights or interests as agricultural
farmers/laborers/sub-tenants over the
landholding, and granting the petitioner
the exclusive right to buy the property
subject to the occurrence of certain
conditions. The respondents were not
parties to the said deeds. There is no
evidence that the respondents agreed,
expressly or impliedly, to the said deeds
or to the terms and conditions set forth
therein. Indeed, they assailed the
validity of the said deeds on their claim
that the same were contrary to the letter
and spirit of P.D. No. 27 and Rep. Act
No. 6657. The petitioner even admitted
when he testified that he did not know
any of the respondents, and that he had
not met any of them before he filed his
complaint in the RTC. He did not even
know that one of those whom he had
impleaded as defendant, Angelica Vda.
de Lacson, was already dead.
Q: But you have not met any of these
Lacsons?
A: Not yet, sir.
Q: Do you know that two (2) of the
defendants are residents of the United
States?
A: I do not know, sir.
Q: You do not know also that Angela
Tiotuvie (sic) Vda. de Lacson had
already been dead?

A: I am aware of that, sir.39

We are one with the Court of Appeals in
its ruling that:
We cannot see our way clear on how or
why injunction should lie against
petitioners. As owners of the lands being
tilled by TIAMSON, et al., petitioners,
under the law, have the right to enjoy
and dispose of the same. Thus, they have
the right to possess the lands, as well as
the right to encumber or alienate them.
This principle of law notwithstanding,
private respondent in the lower court
sought to restrain the petitioners from
encumbering and/or alienating the
properties covered by TCT No. 35922-R,
35923-R and TCT No. 35925-R of the
Registry of Deeds of San Fernando,
Pampanga. This cannot be allowed to
prosper since it would constitute a
limitation or restriction, not otherwise
established by law on their right of
ownership, more so considering that
petitioners were not even privy to the
alleged transaction between private
respondent and TIAMSON, et al.40
Second. A reading the averments of the
complaint will show that the petitioner
clearly has no cause of action against the
respondents for the principal relief
prayed for therein, for the trial court to
fix a period within which to pay to each
of the defendants-tenants the balance of
the P50.00 per square meter, the
consideration under the Deeds of
Assignment executed by the defendantstenants. The respondents are not parties
or privies to the deeds of assignment.
The matter of the period for the
petitioner to pay the balance of the said
amount to each of the defendantstenants is an issue between them, the
parties to the deed.
Third. On the face of the complaint, the
action of the petitioner against the
respondents and the defendants-tenants
has no legal basis. Under the Deeds of

Assignment, the obligation of the

petitioner to pay to each of the
defendants-tenants the balance of the
purchase price was conditioned on the
occurrence of the following events: (a)
the respondents agree to sell their
property to the petitioner; (b) the legal
impediments to the sale of the
landholding to the petitioner no longer
exist; and, (c) the petitioner decides to
buy the property. When he testified, the
petitioner admitted that the legal
impediments referred to in the deeds
were (a) the respondents refusal to sell
their property; and, (b) the lack of
approval of the Department of Agrarian
Reform:
Q : There is no specific agreement prior
to the execution of those documents as
when they will pay?
A : We agreed to that, that I will pay
them when there are no legal
impediment, sir.
Q : Many of the documents are
unlattered (sic) and you want to convey
to this Honorable Court that prior to the
execution of these documents you have
those tentative agreement for instance
that the amount or the cost of the price
is to be paid when there are no legal
impediment, you are using the word
"legal impediment," do you know the
meaning of that?
A : When there are (sic) no more legal
impediment exist, sir.
Q : Did you make how (sic) to the effect
that the meaning of that phrase that you
used the unlettered defendants?
A : We have agreed to that, sir.
ATTY. OCAMPO:
May I ask, Your Honor, that the witness
please answer my question not to
answer in the way he wanted it.
COURT:
Just answer the question, Mr. Tayag.
WITNESS:
Yes, Your Honor.

ATTY. OCAMPO:
Q : Did you explain to them?
A : Yes, sir.
Q : What did you tell them?
A : I explain[ed] to them, sir, that the
legal impediment then especially if the
Lacsons will not agree to sell their
shares to me or to us it would be hard to
(sic) me to pay them in full. And those
covered by DAR. I explain[ed] to them
and it was clearly stated in the title that
there is [a] prohibited period of time
before you can sell the property. I
explained every detail to them.41
It is only upon the occurrence of the
foregoing conditions that the petitioner
would be obliged to pay to the
defendants-tenants the balance of the
P50.00 per square meter under the
deeds of assignment. Thus:
2. That in case the ASSIGNOR and
LANDOWNER will mutually agree to
sell the said lot to the ASSIGNEE, who is
given an exclusive and absolute right to
buy the lot, the ASSIGNOR shall receive
the sum of FIFTY PESOS (P50.00) per
square meter as consideration of the
total area actually tilled and possessed
by the ASSIGNOR, less whatever
amount received by the ASSIGNOR
including commissions, taxes and all
allowable deductions relative to the sale
of the subject properties.
3. That this exclusive and absolute right
given to the ASSIGNEE shall be
exercised
only
when
no
legal
impediments exist to the lot to effect the
smooth transfer of lawful ownership of
the lot/property in the name of the
ASSIGNEE;
4. That the ASSIGNOR will remain in
peaceful possession over the said
property
and
shall
enjoy
the
fruits/earnings and/or harvest of the
said lot until such time that full payment
of the agreed purchase price had been
made by the ASSIGNEE.42

There is no showing in the petitioners

complaint that the respondents had
agreed to sell their property, and that
the legal impediments to the agreement
no longer existed. The petitioner and the
defendants-tenants had yet to submit
the Deeds of Assignment to the
Department of Agrarian Reform which,
in turn, had to act on and approve or
disapprove the same. In fact, as alleged
by the petitioner in his complaint, he
was yet to meet with the defendantstenants to discuss the implementation of
the deeds of assignment. Unless and
until the Department of Agrarian
Reform approved the said deeds, if at
all, the petitioner had no right to enforce
the same in a court of law by asking the
trial court to fix a period within which to
pay the balance of the purchase price
and praying for injunctive relief.
We do not agree with the contention of
the petitioner that the deeds of
assignment executed by the defendantstenants
are
perfected
option
contracts.43 An option is a contract by
which the owner of the property agrees
with another person that he shall have
the right to buy his property at a fixed
price within a certain time. It is a
condition offered or contract by which
the owner stipulates with another that
the latter shall have the right to buy the
property at a fixed price within a certain
time, or under, or in compliance with
certain terms and conditions, or which
gives to the owner of the property the
right to sell or demand a sale. It imposes
no binding obligation on the person
holding the option, aside from the
consideration for the offer. Until
accepted, it is not, properly speaking,
treated as a contract.44 The second party
gets in praesenti, not lands, not an
agreement that he shall have the lands,
but the right to call for and receive lands
if he elects.45 An option contract is a

separate and distinct contract from

which the parties may enter into upon
the conjunction of the option.46
In this case, the defendants-tenantssubtenants, under the deeds of
assignment, granted to the petitioner
not only an option but the exclusive
right to buy the landholding. But the
grantors were merely the defendantstenants, and not the respondents, the
registered owners of the property. Not
being the registered owners of the
property, the defendants-tenants could
not legally grant to the petitioner the
option, much less the "exclusive right" to
buy the property. As the Latin saying
goes, "NEMO DAT QUOD NON
HABET."
Fourth. The petitioner impleaded the
respondents as parties-defendants solely
on his allegation that the latter induced
or are inducing the defendants-tenants
to violate the deeds of assignment,
contrary to the provisions of Article 1314
of the New Civil Code which reads:
Art. 1314. Any third person who induces
another to violate his contract shall be
liable for damages to the other
contracting party.
In So Ping Bun v. Court of Appeals, 47 we
held that for the said law to apply, the
pleader is burdened to prove the
following: (1) the existence of a valid
contract; (2) knowledge by the third
person of the existence of the contract;
and (3) interference by the third person
in the contractual relation without legal
justification.
Where there was no malice in the
interference of a contract, and the
impulse behind ones conduct lies in a
proper business interest rather than in
wrongful motives, a party cannot be a
malicious interferer. Where the alleged
interferer is financially interested, and
such interest motivates his conduct, it

cannot be said that he is an officious or

malicious intermeddler.48
In fine, one who is not a party to a
contract and who interferes thereon is
not necessarily an officious or malicious
intermeddler. The only evidence
adduced by the petitioner to prove his
claim is the letter from the defendantstenants informing him that they had
decided to sell their rights and interests
over the landholding to the respondents,
instead of honoring their obligation
under the deeds of assignment because,
according to them, the petitioner
harassed those tenants who did not want
to execute deeds of assignment in his
favor, and because the said defendantstenants did not want to have any
problem with the respondents who
could cause their eviction for executing
with the petitioner the deeds of
assignment as the said deeds are in
violation of P.D. No. 27 and Rep. Act No.
6657.49 The defendants-tenants did not
allege therein that the respondents
induced them to breach their contracts
with the petitioner. The petitioner
himself admitted when he testified that
his claim that the respondents induced
the defendants-assignees to violate
contracts with him was based merely on
what "he heard," thus:
Q: Going to your last statement that the
Lacsons induces (sic) the defendants,
did you see that the Lacsons were
inducing the defendants?
A: I heard and sometime in [the] first
week of August, sir, they went in the
barrio (sic). As a matter of fact, that is
the reason why they sent me letter that
they will sell it to the Lacsons.
Q: Incidentally, do you knew (sic) these
Lacsons individually?
A: No, sir, it was only Mr. Espinosa who
I knew (sic) personally, the alleged
negotiator and has the authority to sell
the property.50

Even if the respondents received an

offer from the defendants-tenants to
assign and transfer their rights and
interests on the landholding, the
respondents cannot be enjoined from
entertaining the said offer, or even
negotiating with the defendants-tenants.
The respondents could not even be
expected to warn the defendants-tenants
for executing the said deeds in violation
of P.D. No. 27 and Rep. Act No. 6657.
Under Section 22 of the latter law,
beneficiaries under P.D. No. 27 who
have culpably sold, disposed of, or
abandoned their land, are disqualified
from becoming beneficiaries.
From the pleadings of the petitioner, it
is quite evident that his purpose in
having the defendants-tenants execute
the Deeds of Assignment in his favor
was to acquire the landholding without
any tenants thereon, in the event that
the respondents agreed to sell the
property to him. The petitioner knew
that under Section 11 of Rep. Act No.
3844, if the respondents agreed to sell
the property, the defendants-tenants
shall have preferential right to buy the
same under reasonable terms and
conditions:
SECTION 11. Lessees Right of Preemption. In case the agricultural
lessor desires to sell the landholding, the
agricultural lessee shall have the
preferential right to buy the same under
reasonable terms and conditions:
Provided, That the entire landholding
offered for sale must be pre-empted by
the Land Authority if the landowner so
desires, unless the majority of the
lessees object to such acquisition:
Provided, further, That where there are
two or more agricultural lessees, each
shall be entitled to said preferential right
only to the extent of the area actually
cultivated by him. 51

Under Section 12 of the law, if the

property was sold to a third person
without the knowledge of the tenants
thereon, the latter shall have the right to
redeem the same at a reasonable price
and consideration. By assigning their
rights and interests on the landholding
under the deeds of assignment in favor
of the petitioner, the defendants-tenants
thereby waived, in favor of the
petitioner, who is not a beneficiary
under Section 22 of Rep. Act No. 6657,
their
rights
of
preemption
or
redemption under Rep. Act No. 3844.
The defendants-tenants would then have
to vacate the property in favor of the
petitioner upon full payment of the
purchase price. Instead of acquiring
ownership of the portions of the
landholding respectively tilled by them,
the defendants-tenants would again
become landless for a measly sum of
P50.00 per square meter. The
petitioners scheme is subversive, not
only of public policy, but also of the
letter and spirit of the agrarian laws.
That the scheme of the petitioner had
yet to take effect in the future or ten
years hence is not a justification. The
respondents may well argue that the
agrarian laws had been violated by the
defendants-tenants and the petitioner
by the mere execution of the deeds of
assignment. In fact, the petitioner has
implemented the deeds by paying the
defendants-tenants amounts of money
and even sought their immediate
implementation by setting a meeting
with the defendants-tenants. In fine, the
petitioner would not wait for ten years
to evict the defendants-tenants. For him,
time is of the essence.
The
Appellate
Court
Erred
In
Permanently
Enjoining
The
Regional
Trial
Court
From
Continuing
with
the
Proceedings in Civil Case No. 10910.

We agree with the petitioners

contention that the appellate court erred
when it permanently enjoined the RTC
from continuing with the proceedings in
Civil Case No. 10910. The only issue
before the appellate court was whether
or not the trial court committed a grave
abuse of discretion amounting to excess
or lack of jurisdiction in denying the
respondents motion to deny or dismiss
the petitioners plea for a writ of
preliminary injunction. Not one of the
parties prayed to permanently enjoin
the trial court from further proceeding
with Civil Case No. 10910 or to dismiss
the complaint. It bears stressing that the
petitioner may still amend his
complaint, and the respondents and the
defendants-tenants may file motions to
dismiss the complaint. By permanently
enjoining
the
trial
court
from
proceeding with Civil Case No. 10910,
the appellate court acted arbitrarily and
effectively dismissed the complaint
motu
proprio,
including
the
counterclaims of the respondents and
that of the defendants-tenants. The
defendants-tenants were even deprived
of their right to prove their special and
affirmative defenses.
IN LIGHT OF ALL THE FOREGOING,
the petition is PARTIALLY GRANTED.
The Decision of the Court of Appeals
nullifying the February 13, 1996 and
April 16, 1997 Orders of the RTC is
AFFIRMED. The writ of injunction
issued by the Court of Appeals
permanently enjoining the RTC from
further proceeding with Civil Case No.
10910 is hereby LIFTED and SET
ASIDE. The Regional Trial Court of
Mabalacat, Pampanga, Branch 44, is
ORDERED to continue with the
proceedings in Civil Case No. 10910 as
provided for by the Rules of Court, as
amended.
SO ORDERED.

Puno,
(Chairman),
Quisumbing,
Austria-Martinez,
and
Tinga,
JJ., concur.
[G.R. No. 149570. March 12, 2004]
HEIRS OF ROSENDO SEVILLA
FLORENCIO, as represented by
ESTRELLITA FLORENCIO-CRUZ
and
RODRIGO
R.
FLORENCIO, petitioners,
vs.
HEIRS OF TERESA SEVILLA DE
LEON
as
represented
by
VALERIANA
MORENTE, respondents.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review of the
Joint Decision[1] of the Court of Appeals
in CA-G.R. SP Nos. 59698-99 which
affirmed the June 5, 2000 Decisions [2] of
the Regional Trial Court of Malolos,
Bulacan, Branch 20 in Civil Cases No.
1018-M-99 and 1019-M-99, and the
resolution of the appellate court denying
the
petitioners
motion
for
reconsideration.
The Antecedents
Teresa Sevilla de Leon, owned a
residential lot with an area of 828
square meters located in San Miguel,
Bulacan. The said lot was covered by
Transfer Certificate of Title (TCT) No. T44349.[3] In the 1960s, De Leon allowed
the spouses Rosendo and Consuelo
Florencio to construct a house on the
said property and stay therein without
any rentals therefor.
On September 26, 1966, De Leon, with
the consent of her husband Luis, leased
the aforesaid parcel of land for P5 per
month to Bienvenido Santos for as long
as the lessor (Teresa de Leon) had an
outstanding loan with the Second
Quezon City Development Bank of
Quezon City but not to exceed the period
of fifteen (15) years.[4] De Leonassigned
her leasehold right in favor of the

Second Quezon City Development

Bank. The lease and De Leons leasehold
right were annotated at the back of TCT
No. T-44349 as Entry Nos. 152248 and
152249,[5] respectively.
Thereafter,
Bienvenido Santos constructed a house
thereon.
In November 1978, De Leon, then
already a widow, died intestate. In
deference to her wishes, her heirs
allowed Rosendo Florencio to continue
staying in the property. In March 1995,
Florencio died intestate, but his heirs,
the respondents, remained in the
property. On April 26, 1995, the heirs of
De Leon, through counsel, sent a letter
to the heirs of Florencio, demanding
that they vacate the property within
ninety (90) days from receipt thereof.
[6]
The latter refused and failed to vacate
the property.
The heirs of De Leon, through Valeriana
L. Morente, thereafter filed a complaint
for ejectment against the heirs of
Florencio before the Municipal Trial
Court of San Miguel, Bulacan, docketed
as Civil Case No. 2061. Therein, the
plaintiffs alleged that they were the proindiviso owners of the 828 square-meter
lot covered by TCT No. T-44349, which
they inherited from their mother.
During her lifetime, their mother
allowed Florencio and his family to
occupy the property without any
compensation, subject to the condition
that they shall vacate the same upon
demand; such arrangement went on
even after their mothers demise. They
further averred that sometime in 1995,
they demanded that the heirs of
Florencio vacate the property, but that
the latter refused to do so.[7]
The plaintiff thence prayed:
WHEREFORE, premises considered, it
is most respectfully prayed that after
due hearing, judgment be rendered
ordering defendants to:

1. Vacate the premises which they are

presently occupying;
2. Pay
plaintiff
the
amount
of
P100,000.00 as and by way of attorneys
fees;
3. Pay plaintiff P100,000.00 as moral
damages;
4. Pay
plaintiff
P100,000.00
as
exemplary damages.
5. Pay plaintiff P10,000.00 per month
from April 26, 1995 up to and until
defendants vacate the premises.
Plaintiff prays for other reliefs just and
equitable under the circumstances.[8]
In their answer to the complaint, the
heirs of Florencio alleged that the
plaintiffs had no cause of action against
them, as Teresa de Leon had executed a
Deed of Donation on October 1,
1976 over the said parcel of land in favor
of
their
predecessor,
Rosendo
Florencio. The latter accepted the
donation, as shown by his signature
above his typewritten name on page one
of the deed. The execution of the deed
was witnessed by Patria L. Manotoc and
Valeriana L. Morente. Atty. Tirso L.
Manguiat, a notary public in the City of
Manila, notarized the deed on said date
and entered it in his notarial record as
Doc. No. 1724, page 71, Book IV, series
of 1976.[9]
The heirs of Florencio further averred
that since then, their predecessor and
his family possessed the aforesaid
property as owners. After De Leons
death, Florencio and his children, in
coordination with Jose de Leon, the
administrator of the aforesaid property,
arranged for the registration of the land
subject of the donation in the name of
Rosendo Florencio, which was, however,
superseded by the untimely demise of
Jose de Leon in 1991. Thus, the property
remained in the name of Teresa Sevilla
de Leon, even after Florencios death in
March of 1995.[10]

On February 1, 1996, the heirs of

De Leon, represented by Valeriana L.
Morente, also filed a complaint for
ejectment
against the heirs of
Bienvenido Santos before the MTC of
San Miguel, Bulacan, docketed as Civil
Case No. 2062.[11] They prayed, thus:
WHEREFORE, premises considered, it
is most respectfully prayed that after
due hearing, judgment be rendered
ordering defendants to:
1. Vacate the premises which they are
presently occupying;
2. Pay
plaintiff
the
amount
of
P100,000.00 as and by way of attorneys
fees;
3. Pay plaintiff P100,000.00 as moral
damages;
4. Pay
plaintiff
P100,000.00
as
exemplary damages;
5. Pay plaintiff P10,000.00 per month
from April 26, 1995 up to and until
defendants vacate the premises.
Plaintiff prays for other reliefs just and
equitable under the circumstances.[12]
In their answer to the complaint, the
heirs of Bienvenido Santos, through
counsel, alleged that the plaintiffs had
no cause of action against them, and
that they did not occupy the property by
mere tolerance but on the basis of a
contract
of
lease
executed
by
De Leon on September
26,
1966.
Furthermore,
De Leon donated
the
property
to
Rosendo
Florencio
on October 1, 1976, and the latter, after
the expiration of the contract of lease,
allowed and permitted them to continue
and remain in possession of the
property
without
any
compensation. According to the heirs of
Bienvenido Santos, only Florencios heirs
had the right to cause their eviction from
the property by reason of the deed of
donation executed in favor of the latter.
The trial of the two cases was
consolidated.

The parties agreed to litigate the

following issues:
After the preliminary conference, parties
submitted their respective position
papers.
Plaintiffs raised and argued on the
following issues:
a). Defendants possession
of
the
premises was merely on the tolerance of
the late Teresa de Leon.
b). The alleged Deed of Donation does
not exist, is patently a falsified
document and can never be the source
of any right whatsoever.
Defendants, on the other hand, raised
and argued on the following issues:
a). Defendants do not have only a
better right of possession over the
questioned parcel of land and they do
not have only the absolute and lawful
possession of the same but they have the
absolute and lawful ownership of the
same not only against the plaintiffs but
against the whole world.
b). Defendants are entitled to their
counterclaim.[13]
On motion of the plaintiffs in both cases,
the court issued an Order directing the
heirs of Florencio to produce the
original of the Deed of Donation
purportedly executed by Teresa de
Leon. However, they failed to comply
with the order of the court and
submitted a mere photocopy of the
same.[14]
The plaintiffs adduced in evidence the
following: (1) TCT No. T-44349 in the
name of Teresa Sevilla;[15] (2) demand
letters sent by the plaintiffs counsel to
the defendants demanding that the
latter vacate the subject premises; [16] (3)
affidavit-complaint
of
Valeriana
Morente filed in the Office of the
Provincial Prosecutor of Bulacan
docketed as I.S. No. 96-1513 for
falsification, perjury and applicable
crimes against Rodrigo Florencio and

Atty. Tirso Manguiat, dated May 8,

1996;[17] (4) affidavit-complaint executed
by Ramon de Leon Manotoc dated May
8, 1996;[18] (5) copies of Teresa de Leons
passport issued on April 28, 1975
containing specimens of her signature;
[19]
(6) copy of Patria Manotocs passport
issued on September 16, 1997 with her
specimen signature therein;[20] (7) copy
of Valeriana Morentes passports issued
on the following dates: (a) February 20,
1967;[21] (b) April 28, 1975;[22] (c) October
4, 1984;[23] and (d) August 22, 1994,
[24]
with
specimens of her
signature
appearing therein covering a span of
thirty years; (8) copy of the Certificate of
Death
of
Patria
Manotoc;[25] (9)
Certification dated April 23, 1996 issued
by Teresita R. Ignacio, Chief, Archives
Division of the Records Management
and Archives Division of Manila[26] to the
effect that nothing in the notarial
register of Atty. Tirso L. Manguiat show
that he notarized a deed of donation
dated October 1, 1976 in favor of
Rosendo
Florencio;
(10)
copy
of Sinumpaang Salaysay dated July 19,
1996 executed by one Rodolfo
Apolinario;[27] and, (11) copies of the
official receipts of the real estate taxes
paid.[28]
For their part, the heirs of Florencio
adduced in evidence a photocopy of the
Deed of Donation dated October 1,
1976 purportedly
executed
by
De Leon in favor of Rosendo Florencio.
[29]

The heirs of Bienvenido Santos

submitted in evidence as Exhibits 1 and
1-H
the
Contract
of
Lease
dated September
6,
1966 between
Teresa Sevilla and Bienvenido R. Santos.
[30]

On December 3, 1996, the MTC

rendered a decision in Civil Cases Nos.
2061 and 2062 dismissing the
complaints for lack of jurisdiction upon

the finding that the issue of possession

cannot be determined without resolving,
in a full blown trial, the issue of
ownership.[31]
The heirs of De Leon appealed the
decisions of the MTC to the RTC of
Bulacan, Branch 83, which rendered
judgment reversing the decision of the
court a quo. It held that the MTC had
jurisdiction over the cases; as such, the
trial court should proceed and render
judgment therefor.
In the course of the proceedings, the
defendants adduced in evidence a copy
of the Deed of Donation as certified by
the RTC of Bulacan on May 29, 1996.[32]
On August 27, 1999, the MTC rendered
an Amended Decision in Civil Case No.
2061 in favor of the defendants and
against the plaintiffs. The dispositive
portion of the decision reads:
WHEREFORE, the court finds the
defendants as having a better right of
possession over the subject parcel of
land as against the plaintiffs and hereby
orders this case DISMISSED.
For lack of evidence to prove bad faith
on the part of the plaintiffs in the filing
of this case, and in line with the policy
not to put premium on the right to
litigate, the counterclaim of the
defendants
is,
likewise,
ordered
DISMISSED.
With no pronouncements as to costs.
SO ORDERED.[33]
The decision was appealed to the RTC of
Bulacan. On June 5, 2000, the RTC
rendered judgment reversing the
decision of the MTC and rendered a new
judgment in favor of the plaintiffs, as
follows:
WHEREFORE, premises considered, the
Decision
dated August
27,
1999,
rendered by the Municipal Trial Court of
San Miguel, Bulacan, in Civil Case No.
2061, is hereby set aside and a newone is
hereby rendered, as follows:

a) Ordering the heirs of Rosendo

Florencio and all those claiming any
rights under them to vacate the subject
premises, particularly that parcel of land
covered by Transfer Certificate of Title
(TCT) No. T-44349, situated in San
Jose, San Miguel, Bulacan;
b) Ordering the Heirs of Rosendo
Florencio to pay the heirs of Teresa
Sevilla the amount of P2,000.00 per
month as reasonable monthly rental on
the premises, to commence on April
1995 until the premises is vacated by
them; and
c) Ordering the heirs of Rosendo
Florencio to pay the heirs of Teresa
Sevilla the amount of P10,000.00, as
attorneys fees and expenses of litigation.
SO ORDERED.[34]
The RTC ruled that the deed of donation
was insufficient to support the claim of
the heirs of Florencio that they were the
owners of the property and were, thus,
entitled to its possession.
The defendants, now the petitioners,
filed a petition for review with the Court
of Appeals of the decision of the
RTC. On May 28, 2001, the Court of
Appeals rendered judgment dismissing
the petition and affirming the RTC
decision. The CA adopted the findings of
the RTC and its disquisitions on why the
deed of donation was not a credible
piece of evidence to support the
petitioners claim over the property;
hence, did not transfer title over the
property in favor of the petitioners.
First. The deed of donation (Exh. 1),
which purports to have been executed in
1976, is not annotated on the title to the
property which remains registered in the
name of Teresa Sevilla under TCT No. T44349 (Exh. A and A-1). There is no
showing whatsoever that the same or a
copy thereof was submitted to the Office
of the Register of Deeds.

Second. As
earlier
pointed
out,
throughout the years, the real estate
taxes on the property continued to be
paid in the name of Teresa Sevilla by the
caretaker Rodolfo Apolinario and
nobody else.There is no showing that the
defendants had previously laid any
claim of title or ownership over the
property and attempted to pay the taxes
thereon.
Third. Although it purports to have been
notarized in the City of Manila by one
Atty. Tirso L. Manguiat, there is no
indication of its existence in the notarial
record of Atty. Manguiat, as per
Certification dated April 23, 1996 (Exh.
L) of the Manila Records Management
and Archives Office. One can only
wonder why from the place of execution
in San Miguel, Bulacan on October 1,
1976, its notarization on the same date
had to be in the City of Manila.
Fourth. The Court has noted, as anyone
can easily do, that the signature
purported to be that of Teresa de Leon
appearing in the deed of donation (Exh.
1-B), is dissimilar to her customary
signatures affixed to her passports
(Exhs. E and E-1). The same is true with
those of Patria Manotoc and Valeriana
L. Morente appearing in the same deed
of donation (Exhs. 1-D and 1-E), with
those of their customary signatures
appearing in their respective passports
(Exhs. F and F-1; G, G-1 and G-2; H, H-1
and H-2; I and I-1 and J and J-1).
And Fifth. There is no explanation given
why since 1976, when the deed of
donation was supposedly executed, up
to the present, the defendants did not
register the same to secure a new title in
their names. In fact, there is no showing
that efforts toward that end were ever
executed.
As it is, the Court holds that the deed of
donation in question is not a credible
piece of evidence to support the

defendants claim of acquisition of title

and ownership over the subject property
and therefore insufficient to justify their
continuing possession and occupancy
thereof. Thus, as against defendants
claim which is unregistered, the
plaintiffs right over the property as the
legal heirs and successors-in-interest of
the registered owner must prevail.[35]
The Present Petition
The petitioners now contend in this case
that the Court of Appeals and the RTC
erred in rendering judgment for the
respondents, thus:
1. In finding no reversible error
committed by the Regional Trial Court
as an appellate court and affirming its
decision.
2. In concluding that the evidence
presented reveals serious doubts as to
the veracity and authenticity of the
notarized deed of donation, contrary to
the findings of the trial court that there
is a legal presumption of regularity in
the execution thereof.
3. In holding that private respondents
are entitled to possess the subject
property notwithstanding petitioners
claim to the contrary and despite the
latters continuous, open and adverse
possession for more than forty years.[36]
The petitioners aver that donation is one
of the modes of acquiring ownership.
Their claim for possession is precisely
based on the deed of donation executed
by Teresa Sevilla de Leon on October 1,
1976 in favor of their father, Rosendo
Florencio. The aforesaid deed was duly
notarized, and by virtue of its
notarization, such deed became a public
document. Furthermore, according to
the petitioners, an examination of the
deed reveals that it had conformed to all
the essential requisites of donation, as
required by the provisions of the New
Civil Code; hence, its validity must be
presumed.[37] From the time of the

donation up to the present, the

petitioners assert that they possessed
the property openly, publicly and
against the whole world.
As regards the alleged forgery of the
signatures of the donor and the
witnesses, the petitioners assert that
absent any clear, positive and
convincing evidence that the same were
forged, the presumption is that they are
genuine. The mere variance in the
signatures of the donor and the
witnesses cannot be considered as
conclusive proof of the forgery. They
aver that the Certification dated April
23, 1996 of the Manila Records
Management and Archives Office stating
that no such notarized deed existed in
the notarial records of Atty. Manguiat
cannot be conclusive evidence that no
donation ever existed. According to the
petitioners, such certification was
merely preponderant and, therefore, not
enough to overthrow the presumption of
regularity in the notarization as well as
the genuineness of the document.
The petitioners posit that their failure to
register the deed of donation did not
affect its validity, it not being a requisite
of a valid donation. They allege that
their effort to register the same during
the lifetime of Jose de Leon, the
administrator of the property, did not
materialize because of the latters
untimely death in 1991. The petitioners
conclude
that
because
of
the
respondents failure to destroy the
validity of the deed of donation, their
right over the property should prevail;
the petitioners right accrued onOctober
1, 1976, while that of the respondents
accrued only in November of 1978.
In their comment, the respondents,
through counsel, argue that the deed of
donation executed by De Leon dated
October 1, 1976 in favor of Rosendo
Florencio is not a credible piece of

evidence. The deed is insufficient to

justify the petitioners stay in the
premises because the original copy was
never presented to them or to the court.
Furthermore, while the photocopy of the
deed of donation states that it was
notarized by a certain Tirso Manguiat, a
notary public for the City of Manila,
under Doc. 1724, Page No. 71, Book No.
IV, Series of 1976, the presumption of
regularity in the notarization of the deed
was destroyed by the certification from
the Records Management and Archives
Office of Manila that no such deed
exists. The respondents further assert
that the signatures appearing on the said
deed, i.e., that of Teresa Sevilla de Leon,
Patria Manotoc and Valeriana Morente,
were all forgeries.
According to the respondents, the
following facts bolster the incredibility
of the deed of donation: (a) the deed of
donation was executed in 1976 but was
not registered; (b) the TCT is still
registered in the name of Teresa Sevilla
de Leon; (c) the owners duplicate copy
of the TCT should have been transmitted
to the donees; and, (d) the real estate
taxes were continuously paid in the
name of Teresa Sevilla de Leon. Thus,
the respondents, as her heirs, are the
legal owners of the property.
The Ruling of the Court
The threshold issue in this case is
whether or not the petitioners, as heirs
of Rosendo Florencio, who appears to be
the donee under the unregistered Deed
of Donation,have a better right to the
physical or material possession of the
property over the respondents, the heirs
of Teresa de Leon, the registered owner
of the property.
The petition has no merit.
Prefatorily, in ejectment cases, the issue
is the physical or material possession
(possession de
facto)
and
any
pronouncement made by the trial court

on the question of ownership is

provisional in nature.[38] A judgment
rendered in ejectment cases shall not
bar an action between the same parties
respecting title to the land and shall not
be conclusive as to the facts found
therein in a case between the same
parties upon a different cause of action
involving possession of the same
property.[39]
We agree with the petitioners that under
the New Civil Code, donation is one of
the modes of acquiring ownership.
[40]
Among the attributes of ownership is
the right to possess the property.[41]
The essential elements of donation are
as follows: (a) the essential reduction of
the patrimony of the donor; (b) the
increase in the patrimony of the donee;
and (c) the intent to do an act of
liberality or animus donandi. When
applied to a donation of an immovable
property, the law further requires that
the donation be made in a public
document and that the acceptance
thereof be made in the same deed or in a
separate public instrument; in cases
where the acceptance is made in a
separate instrument, it is mandated that
the donor be notified thereof in an
authentic form, to be noted in both
instruments.[42]
As a mode of acquiring ownership,
donation results in an effective transfer
of title over the property from the donor
to the donee, and is perfected from the
moment the donor is made aware of the
acceptance by the donee, provided that
the donee is not disqualified or
prohibited by law from accepting the
donation.[43] Once the donation is
accepted, it is generally considered
irrevocable, and the donee becomes the
absolute owner of the property, except
on account of officiousness, failure by
the donee to comply with the charge
imposed in the donation, or ingratitude.

The acceptance, to be valid, must be

made during the lifetime of both the
donor and the donee. It must be made in
the same deed or in a separate public
document, and the donees acceptance
must come to the knowledge of the
donor.[45]
In order that the donation of an
immovable property may be valid, it
must be made in a public document.
[46]
Registration of the deed in the Office
of the Register of Deeds or in the
Assessors Office is not necessary for it to
be
considered
valid
and
official. Registration does not vest title;
it is merely evidence of such title over a
particular
parcel
of
land.[47] The
necessity of registration comes into play
only when the rights of third persons are
affected.[48] Furthermore, the heirs are
bound by the deed of contracts executed
by their predecessors-in-interest.[49]
On the other hand, the fundamental
principle is that a certificate of title
serves as evidence of an indefeasible and
incontrovertible title to the property in
favor of the person whose name appears
therein as the registered owner.[50] The
registered owner has the right to
possess, enjoy and dispose of the
property without any limitations other
than those imposed by law.
In this case, the deed of donation, on its
face, appears to bear all the essential
requisites of a valid donation inter
vivos. With Teresa de Leon as the donor
and Rosendo Florencio as the donee, the
deed of donation appears to have been
notarized by Notary Public Tirso
Manguiat. On this premise, Florencio,
and after his death, his heirs, acquired
ownership over the property although
Certificate of Title No. T-44349 under
the name of Teresa de Leon had not yet
been cancelled.
However, as pointed out by the RTC and
the Court of Appeals, there are cogent
[44]

facts and circumstances of substance

which engender veritable doubts as to
whether the petitioners have a better
right of possession over the property
other than the respondents, the lawful
heirs of the deceased registered owner of
the property, Teresa de Leon, based on
the Deed of Donation.
First. Teresa de Leon purportedly
executed the Deed of Donation
on October 1, 1976 in favor of Rosendo
S. Florencio. If she, indeed, donated the
property, she would surely have turned
over the owners duplicate of TCT No. T44349 to Florencio, to facilitate the
issuance of a new title over the property
in his favor. There was an imperative
need for the deed to be registered in the
Office of the Register of Deeds, and the
title to the property to be thereafter
issued in the name of the donee,
Florencio. Before then, Florencio and
his family had been residing in the
property solely at the sufferance of
Teresa de Leon and her husband. Their
possession of the property and their
continued
stay
therein
was
precarious. They could be driven out
from the property at any time by
De Leon if she disowned the deed or,
after her death, by her heirs. It behooved
Florencio to have the said deed filed and
duly registered[51] with the Office of the
Register of Deeds without delay and,
thereafter, to secure a new title under
his name. This would have resulted in
the cancellation of TCT No. T-44349
under the name of Teresa de Leon, and
thereby averted any disturbance of
Florencios possession of the property,
and after his death, that of his heirs.
At the very least, Florencio should have
caused the annotation of the deed
immediately after October 1, 1976 or
shortly thereafter, at the dorsal portion
of TCT No. T-44349. Such annotation
would have been binding on the

respondents, as De Leons successors-ininterest,

as
well
as
to
third
persons. However, Florencio failed to do
so. Even as DeLeon died intestate in
1978, Florencio failed to secure title over
the property in his name before he
himself died intestate in 1995. If, as the
petitioners claimed, Florencio acquired
ownership over the property under the
deed, it is incredible that he would fail to
register the deed and secure title over
the property under his name for almost
twenty years. All these years, Florencio,
and thereafter, his heirs, remained
passive and failed to act upon the deed
of donation to protect their right. This,
the Court finds difficult to understand.
The claim that Florencio and his heirs
sought the registration of the deed and
the transfer of the title to and under
Florencios name from 1978 to 1991, in
coordination with Jose de Leon is
incredible. There is no evidence on
record that the deed of donation was
ever filed with and registered in the
Office of the Register of Deeds at any
time during the period from 1978 to
1991. The petitioners claim that the
registration of the deed was delayed and
later aborted by the demise of Jose de
Leon
is
not
substantiated
by
evidence. Moreover, there is no reason
why Florencio, or after his death, the
petitioners, could not have had the deed
registered even after Jose de Leons
death.
Second. Florencio failed to inform the
heirs of De Leon that the latter, before
her death, had executed a deed of
donation on October 1, 1976 over the
property in his favor.It was only in 1996,
or eighteen years after the death of
De Leon when the respondents sued the
petitioners for ejectment that the latter
claimed, for the first time, that De Leon
had executed a deed of donation over

the property in favor of their

predecessor, Florencio.
Third. In the meantime, the respondents
consistently paid the realty taxes for the
property from 1978 up to 1996,
completely oblivious to the existence of
the deed of donation. On the other hand,
Florencio, and, after his death, the
petitioners, never paid a single centavo
for the realty taxes due on the property,
even as they continued staying in the
property without paying a single centavo
therefor. The petitioners should have
declared the property under their names
and paid the realty taxes therefor, if they
truly believed that they were its owners.
They failed to do so. The fact of
Florencios inaction and that of the
petitioners weakened the latters claim
that they acquired ownership over the
property under the deed of donation.
Fourth. The petitioners never adduced
in evidence the owners duplicate of TCT
No. T-44349 under the name of
De Leon. Their possession of the owners
duplicate of the title would have fortified
their claim that indeed, De Leon had
intended to convey the property by
donation to Florencio. Furthermore, the
petitioners did not explain why they
failed to adduce in evidence the said
owners duplicate of the title. The only
conclusion is that the said owners
duplicate copy was not turned over to
Florencio contemporaneously with or
after the execution of the deed of
donation; hence, their failure to secure
title over the property.[52]
Fifth. The respondents adduced in
evidence the affidavit-complaint of
Valeriana Morente dated May 8, 1996,
one of the witnesses to the deed, for
falsification
and
perjury
against
Florencio
and
Atty.
Tirso
Manguiat. They also adduced the
Certification dated April 23, 1996 issued
by Teresita R. Ignacio, Chief, Archives

Division of the Records Management

and Archives Division of Manila, to the
effect that nothing in the notarial
register of Atty. Tirso L. Manguiat, a
notary public of Manila, showed that the
latter notarized a Deed of Donation
executed by De Leon and Florencio in
San Miguel, Bulacan dated October 1,
1976. However, the petitioners failed to
adduce in evidence Atty. Manguiats
counter-affidavit to the said complaint,
or, at the very least, a separate affidavit
explaining the facts and circumstances
surrounding the notarization of the deed
of donation.
Sixth. A reading of the deed will show
that at the bottom of page one thereof,
Florencio was to subscribe and swear to
the truth of his acceptance of the
donation before Municipal Mayor
Marcelo G. Aure of San Miguel,
Bulacan. However, the mayor did not
affix his signature above his typewritten
name, thus:
SUBSCRIBED AND SWORN to before
me this 1st day of October, 1976, the
DONOR having exhibited her Res. Cert.
No. A-3723337 issued at Quezon
City on January 10, 1976.
MARCELO G. AURE
Municipal Mayor[53]
It appears that a second page was added,
with the name of Atty. Manguiat
typewritten therein as notary public,
obviously, with the use of a different
typewriter.
In sum then, we agree with the RTC and
the Court of Appeals that the deed of
donation relied upon by the petitioners
is unreliable as evidence on which to
anchor a finding that the latter have a
better right over the property than the
respondents, who, admittedly, are the
heirs of Teresa de Leon, the registered
owner of the property under TCT No. T44349 of the Registry of Deeds of
Bulacan.

IN
LIGHT
OF
ALL
THE
FOREGOING, the petition is DENIED.
The Decisions of the Regional Trial
Court of Malolos, Bulacan, Branch 20, in
Civil Cases Nos. 1018-M-99 and 1019-M99, and the Court of Appeals in CA-G.R.
SP No. 59698-99, are AFFIRMED.
SO ORDERED.
SECOND DIVISION
MARGARITA F. CASTRO,
Petitioner,

- versus -

NAPOLEON A. MONSOD,
Respondent.
x-----------------------------------------------------------------------------------x

DECISION

Pias City, and covered by Transfer

Certificate of Title (TCT) No. T-36071,
with an area of one hundred thirty (130)
square meters (sq.m.). Respondent, on
the other hand, is the owner of the
property adjoining the lot of petitioner,
located
on Lyra
Street, Moonwalk Village, Phase 2, Las
Pias City. There is a concrete fence,
more or less two (2) meters high,
dividing Manuela Homesfrom Moonwal
k Village.[3]
On February 29, 2000, respondent
caused the annotation of an adverse
claim against sixty-five (65) sq.m. of the
property of petitioner covered by TCT
No. T-36071. The adverse claim was
filed without any claim of ownership
over the property. Respondent was
merely asserting the existing legal
easement of lateral and subjacent
support at the rear portion of his estate
to prevent the property from collapsing,
since his property is located at an
elevated plateau of fifteen (15) feet,
more or less, above the level of
petitioners property.[4] Respondent also
filed a complaint for malicious mischief
and malicious destruction before the
office of the barangaychairman.[5]

NACHURA, J.:

Before the Court is a petition for review

on certiorari under Rule 45 of the Rules
of Court, assailing the Decision[1] dated
May
25,
2007
and
the
Resolution[2] dated July 14, 2008 of the
Court of Appeals (CA) in CA-G.R. CV
No. 83973.
The antecedents of the case are as
follows:
Petitioner is the registered owner of a
parcel of land located on Garnet
Street, Manuela Homes, Pamplona, Las

In defiance, petitioner filed a complaint

for damages with temporary restraining
order/writ of preliminary injunction
before the Regional Trial Court (RTC) of
Las Pias City. Petitioner also prayed that
the Register of Deeds of Las Pias City be
ordered to cancel the annotation of the
adverse claim on TCT No. T-36071.[6]
Prior to the filing of the case before the
RTC, there were deposits of soil and
rocks about two (2) meters away from
the front door of the house of
petitioner. As such, petitioner was not
able to park her vehicle at the dead-end
portion
of Garnet
Street.
When

petitioner noticed a leak that caused the

front portion of her house to be slippery,
she hired construction workers to see
where the leak was coming from. The
workers had already started digging
when police officers sent by respondent
came and stopped the workers from
finishing their job.[7]
Petitioner averred that when she bought
the property from Manuela Homes in
1994, there was no annotation or
existence of any easement over the
property. Respondent neither asked
permission nor talked to her with regard
to the use of 65 sq.m. of her property as
easement. Upon learning of the adverse
claim,
she
felt
disturbed
and
experienced sleepless nights for fear that
she would not be able to sell her
property. Petitioner admitted that TCT
No. 36071 does not cover the open space
at the dead-end portion of Garnet Street.
[8]

For his part, respondent claimed that he

and his family had been residing
in Moonwalk Village since June 1984.
Adjacent to his property is the land of
petitioner inManuela Homes. When he
bought the property in 1983, the land
elevation
of Moonwalk Village was
almost
on
the
same
level
as Manuela Homes. However, sometime
in 1985 and 1986, Pilar Development
Corporation,
the
developer
of Manuela Homes,
bulldozed,
excavated, and transferred portions of
the elevated land to the lower portions
of Manuela Homes.
Thus, Manuela Homes became
lower
than Moonwalk Village.[9]
Before the said excavation, respondent
personally complained to Pilar
Development Corporation and was
assured that, as provided by the
National
Building
Code,
an

embankment will be retained at the

boundary of Manuela Homes and
Moonwalk Village, which is more or less
fifteen (15) feet higher than Manuela
Homes.[10]
Manuela Homes retained
the
embankment consisting of soil and
rocks. Respondent had the open space
riprapped with stones as reinforcement
against any potential soil erosion,
earthquake, and possible digging by any
person.
Respondent asserted that the affidavit of
adverse claim was for the annotation of
the lateral and subjacent easement of his
property over the property of petitioner,
in view of the latters manifest
determination
to
remove
the
embankment left by the developer
of Manuela Homes.
On October 11, 2004, the RTC rendered
a decision,[11] the dispositive portion of
which reads:
WHEREFORE, premises considered,
this court hereby renders judgment: (1)
ordering
the
cancellation
of
[respondents] adverse claim at the back
of Transfer Certificate of Title No. T36071 at the expense of [respondent]
Napoleon Monsod; (2) ordering the said
[respondent] to pay the herein
[petitioner]
the
amount
of
Php50,000.00 as moral damages; and
(3) dismissing [petitioners] claim for
actual damages, attorneys fees, litigation
costs and costs of suit and [respondents]
compulsory counterclaim for lack of
merit.
SO ORDERED.[12]
The trial court ratiocinated that the
adverse claim of respondent was nonregistrable considering that the basis of
his claim was an easement and not an

interest adverse to the registered owner,

and neither did he contest the title of
petitioner. Furthermore, the adverse
claim of respondent failed to comply
with the requisites provided under
Section 70 of Presidential Decree No.
1529.[13]
On appeal, the CA reversed the decision
of the trial court in a Decision [14] dated
May 25, 2007, the fallo of which reads:

residential house and lot of respondent

of its natural support and cause it to
collapse. Respondent only asked that
petitioner respect the legal easement
already existing thereon.[16]
On June 15, 2007, petitioner filed a
motion for reconsideration. However,
the CA denied the same in a
Resolution[17] dated July 14, 2008.
Hence, this petition.

WHEREFORE, premises considered, the

instant appeal is GRANTED. The
Decision of the Regional Trial Court,
Branch 198, Las Pias City dated October
11, 2004 isREVERSED and SET ASIDE.
The Court hereby orders the retention of
the annotation at the back of Transfer
Certificate of Title No. T-36071, not as
an adverse claim, but a recognition of
the existence of a legal easement of
subjacent
and
lateral
support
constituted on the lengthwise or
horizontal land support/embankment
area of sixty-five (65) square meters,
more or less, of the property of
[petitioner] Margarita Castro. The writ
of preliminary injunction issued by this
Court on April 18, 2006 is hereby made
permanent. [Petitioners] claim for
damages is likewise DISMISSED.
SO ORDERED.

The issue in this case is whether the

easement of lateral and subjacent
support exists on the subject adjacent
properties and, if it does, whether the
same may be annotated at the back of
the title of the servient estate.
Article 437 of the Civil Code provides
that the owner of a parcel of land is the
owner of its surface and of everything
under it, and he can construct thereon
any works, or make any plantations and
excavations which he may deem proper.
However, such right of the owner is not
absolute and is subject to the following
limitations: (1)servitudes or easements,
[18]
(2) special
laws,[19] (3) ordinances,
[20]
(4) reasonable requirements of aerial
navigation,[21] and (5) rights of third
persons.[22]

6. That said registered owner has

attempted to destroy and/or remove
portions of the existing lateral/subjacent
land and cement supports adjoining the
said two properties. In fact, a portion of
the
easement
was
already
destroyed/removed, to the continuing
prejudice of herein adverse claimant,
and that a formal complaint against said
registered owner was filed by the herein
adverse claimant before the Office of the
Barangay Chairman of Talon V, Las Pias
City and the same proved futile.[23]
Respondents assertion that he has an
adverse claim over the 65 sq.m. property
of petitioner is misplaced since he does
not have a claim over the ownership of
the land. The annotation of an adverse
claim over registered land under Section
70
of
Presidential
Decree
1529[24] requires a claim on the title of
the disputed land. Annotation is done to
apprise third persons that there is a
controversy over the ownership of the
land and to preserve and protect the
right of the adverse claimant during the
pendency of the controversy. It is a
notice to third persons that any
transaction regarding the disputed land
is subject to the outcome of the dispute.
[25]

[15]

The CA ruled that while respondents

adverse claim could not be sanctioned
because it did not fall under the
requisites for registering an adverse
claim, the same might be duly annotated
in the title as recognition of the
existence of a legal easement of
subjacent and lateral support. The
purpose of the annotation was to
prevent
petitioner
from
making
injurious excavations on the subject
embankment as to deprive the

Respondent filed before the RTC an

affidavit of adverse claim, the pertinent
portions of which read:
5. That our adverse claim consists of
rights of legal or compulsory easement
of lateral and subjacent support (under
the Civil Code) over a portion of the
above-described property of owner
Margarita F. Castro, that is, covering the
lengthwise
or
horizontal
land
support/embankment area of sixty-five
(65) square meters, more or less.

In reality, what respondent is claiming is

a judicial recognition of the existence of
the easement of subjacent and lateral
support over the 65 sq. m. portion of
petitioners property covering the land
support/embankment area. His reason
for the annotation is only to prevent
petitioner
from
removing
the
embankment or from digging on the
property for fear of soil erosion that
might weaken the foundation of the rear
portion of his property which is adjacent
to the property of petitioner.

An easement or servitude is an
encumbrance
imposed
upon
an
immovable for the benefit of another
immovable belonging to a different
owner.[26] There are two kinds of
easements according to source. An
easement is established either by law or
by will of the owners.[27] The courts
cannot impose or constitute any
servitude where none existed. They can
only declare its existence if in reality it
exists by law or by the will of the owners.
There are therefore no judicial
easements.[28]
Article 684 of the Civil Code provides
that no proprietor shall make such
excavations upon his land as to deprive
any adjacent land or building of
sufficient lateral or subjacent support.
An owner, by virtue of his surface right,
may make excavations on his land, but
his right is subject to the limitation that
he shall not deprive any adjacent land or
building of sufficient lateral or subjacent
support.
Between
two
adjacent
landowners, each has an absolute
property right to have his land laterally
supported by the soil of his neighbor,
and if either, in excavating on his own
premises, he so disturbs the lateral
support of his neighbors land as to cause
it, or, in its natural state, by the pressure
of its own weight, to fall away or slide
from its position, the one so excavating
is liable.[29]
In the instant case, an easement of
subjacent and lateral support exists in
favor of respondent. It was established
that the properties of petitioner and
respondent adjoin each other. The
residential house and lot of respondent
is located on an elevated plateau of
fifteen (15) feet above the level of
petitioners property. The embankment
and the riprapped stones have been in

existence even before petitioner became

the owner of the property. It was proven
that petitioner has been making
excavations and diggings on the subject
embankment and, unless restrained, the
continued
excavation
of
the
embankment could cause the foundation
of the rear portion of the house of
respondent to collapse, resulting in the
destruction of a huge part of the family
dwelling.[30]

SO ORDERED.
THIRD DIVISION

THE ESTATE OF PEDRO C.

GONZALES and HEIRS OF PEDRO
C. GONZALES,
Petitioners,

- versus We sustain the CA in declaring that a

permanent injunction on the part of
petitioner from making injurious
excavations is necessary in order to
protect the interest of respondent.
However, an annotation of the existence
of the subjacent and lateral support is no
longer necessary. It exists whether or
not it is annotated or registered in the
registry of property. A judicial
recognition of the same already binds
the property and the owner of the same,
including her successors-in-interest.
Otherwise, every adjoining landowner
would come to court or have the
easement of subjacent and lateral
support registered in order for it to be
recognized and respected.
WHEREFORE, in view of the foregoing,
the Decision dated May 25, 2007 and
the Resolution dated July 14, 2008 of
the Court of Appeals in CA-G.R. CV No.
83973 are hereby AFFIRMED WITH
MODIFICATION that the annotation at
the back of Transfer Certificate of Title
No. T-36071, recognizing the existence
of the legal easement of subjacent and
lateral support constituted on the
lengthwise
or
horizontal
land
support/embankment area of sixty-five
(65) square meters, more or less, of the
property of petitioner Margarita F.
Castro, is hereby ordered removed.

THE HEIRS OF MARCOS PEREZ,

Respondents.

x----------------------------------------------------------------------------------------x
DECISION

PERALTA, J.:
This resolves the instant Petition for
Review on Certiorari under Rule 45 of
the Rules of Court praying for the
nullification of the Decision [1] of the
Court of Appeals (CA) dated April 25,
2005 in CA-G.R. CV No. 60998 and its
Resolution[2] dated September 14, 2005.
The challenged Decision of the CA
reversed and set aside the judgment of
the Regional Trial Court (RTC) of
Marikina City, Branch 272 in Civil Case
No. 94-57-MK while its assailed
Resolution denied petitioners' motion
for reconsideration.
The antecedent facts are as follows:

The former Municipality of Marikina in

the Province of Rizal (now City of
Marikina, Metro Manila) used to own a
parcel of land located in Barrio
Concepcion of the said municipality
covered by Original Certificate of Title
(OCT) No. 629[3] of the Register of Deeds
of Rizal. The said property was
subdivided into three (3) lots, namely,
lots A, B and C, per subdivision plan
(LRC) Psd-4571.[4]
On January 14, 1966, the Municipal
Council of Marikina passed Resolution
No. 9, series of 1966 which authorized
the sale through public bidding of
Municipal Lots A and C.
On April 25, 1966, a public bidding was
conducted wherein Pedro Gonzales was
the highest bidder. Two days thereafter,
or on April 27, 1966, the Municipal
Council of Marikina issued Resolution
No. 75 accepting the bid of Pedro.
Thereafter, a deed of sale was executed
in favor of the latter which was later
forwarded to the Provincial Governor of
Rizal for his approval. The Governor,
however, did not act upon the said deed.
Sometime in September 1966, Pedro
sold to Marcos Perez a portion of Lot C,
denominated as Lot C-3, which contains
an area of 375 square meters. The
contract of sale was embodied in a Deed
of Sale[5] which, however, was not
notarized. To segregate the subject
property from the remaining portions
of Lot C, Marcos had the same surveyed
wherein a technical description of the
subject lot was prepared by a surveyor.[6]
Subsequently, Pedro and Marcos died.
On February 7, 1992, the Municipality of
Marikina, through its then Mayor

Rodolfo Valentino, executed a Deed of

Absolute Transfer of Real Property over
Lots A and C in favor of the Estate of
Pedro C. Gonzales.[7] On June 25, 1992,
Transfer Certificate of Title (TCT) No.
223361, covering Lot C, was issued in
the name of the said estate.[8]

3. DISMISSING
counterclaim.

Subsequently,
herein
petitioners
executed an extra-judicial partition
wherein Lot C was subdivided into three
lots. As a result of the subdivision, new
titles were issued wherein the 370square-meter portion of Lot C-3 is now
denominated as Lot C-1 and is covered
by TCT No. 244447[9] and the remaining
5 square meters of the subject lot (Lot C3) now forms a portion of another lot
denominated as Lot C-2 and is now
covered by TCT No. 244448.[10]

The RTC ruled that since the Deed of

Sale executed between Pedro and
Marcos was not notarized, the same is
considered void and of no effect. In
addition, the trial court also held that
Pedro became the owner of the subject
lot only on February 7, 1992; as such, he
could not have lawfully transferred
ownership thereof to Marcos in 1966.

On October 1, 1992, herein respondents

sent a demand letter to one of herein
petitioners asking for the reconveyance
of the subject property.[11] However,
petitioners refused to reconvey the said
lot. As a consequence, respondents filed
an action for Annulment and/or
Rescission of Deed of Absolute Transfer
of Real Property x x x and for
Reconveyance with Damages.[12]
On February 2, 1998, the RTC rendered
its Decision with the following
dispositive portion:
WHEREFORE, foregoing premises,
judgment is hereby rendered as follows:
1. DISMISSING the complaint subject
of the case in caption for lack of merit;
2. DECLARING VALID both Transfer
Certificates of Title Nos. 244447 and
244448 issued by the Register of Deeds
of Marikina;

the

defendants'

No pronouncement as to costs.
SO ORDERED.[13]

Herein respondents appealed the RTC

Decision to the CA contending that the
RTC erred in relying only on Articles
1356 and 1358 of the Civil Code. Instead,
respondents assert that the RTC should
also have applied the provisions of
Articles 1357, 1403 (2), 1405 and 1406 of
the same Code.
On April 25, 2005, the CA rendered its
presently assailed Decision disposing as
follows:
WHEREFORE, premises considered,
the
instant
Appeal
is
hereby GRANTED and the assailed
Decision dated February 2, 1998
is REVERSED and SET ASIDE. TCT
No. 244447 and partially, TCT No.
244448, with respect to five (5) square
meters, are declared NULL and VOID
and defendants-appellees are ordered to
reconvey in favor of the plaintiffsappellants the subject property covered
by said Transfer Certificates of Title (five
square meters only with respect to TCT
No. 244448). The trial court's dismissal
of defendants-appellees' counterclaim is,
however, AFFIRMED.

HAVE TRANSFERRED OWNERSHIP.

SO ORDERED.[14]
The CA held that a sale of real property,
though not consigned in a public
instrument, is nevertheless valid and
binding among the parties and that the
form required in Article 1358 of the Civil
Code is not essential to the validity or
enforceability of the transactions but
only for convenience.
Petitioners
filed
a
motion
for
reconsideration, but the same was
denied by the CA in its Resolution of
September 14, 2005 on the ground that
the said motion was filed out of time.
Hence, the present petition with the
following assignment of errors:
WITH DUE RESPECT TO THE
HONORABLE COURT OF APPEALS,
ITS FINDINGS OF FACT RUN
COUNTER TO THOSE OF THE TRIAL
COURT, THUS, IT HAS DECIDED THE
CASE IN A WAY NOT IN ACCORD
WITH LAW AND JURISPRUDENCE.
WITH DUE RESPECT, THE ALLEGED
DEED OF SALE IS SUSPECT AND
RIDDEN
WITH
INCONSISTENCIES. IN FACT, THE
LOWER COURT HELD THAT THE
DEED OF SALE FAILED TO MEET
THE SOLEMNITY REQUIREMENTS
PROVIDED UNDER THE LAW FOR
ITS VALIDITY.
WITH DUE RESPECT, THE COURT OF
APPEALS ERRED IN DISREGARDING
THE FINDINGS OF FACT AND THE
APPLICATION OF LAW BY THE
REGIONAL TRIAL COURT THAT
UNDER THE PURPORTED DEED OF
SALE THE VENDOR COULD NOT

[15]

In their first and last assigned errors,

petitioners contend that Marcos, who is
respondents'
predecessor-in-interest,
could not have legally bought the
disputed parcel of land from petitioners'
predecessor-in-interest,
Pedro,
in
September 1966 because, during that
time, Pedro had not yet acquired
ownership of the subject lot. Petitioners'
assertion is based on the premise that as
of February 29, 1968, the Deed of Sale
between Pedro and the Municipality of
Marikina was still subject to approval by
the Provincial Governor of Rizal, as
required under Section 2196 of the
Revised
Administrative
Code.
Considering that on the supposed date
of sale in favor of Marcos, the requisite
approval of the Provincial Governor was
not yet secured, petitioners conclude
that Pedro could not be considered as
the owner of the subject property and, as
such, he did not yet possess the right to
transfer ownership thereof and, thus,
could not have lawfully sold the same to
Marcos.
The Court does not agree.
Section
2196
of
the
Administrative Code provides:

Revised

SECTION 2196. Execution of deeds.

When the government of a municipality
is a party to a deed or an instrument
which conveys real property or any
interest therein or which creates a lien
upon the same, such deed or instrument
shall be executed on behalf of the
municipal government by the mayor,
upon resolution of the council, with the
approval of the governor.
In Municipality of Camiling v. Lopez,
[16]
the Court found occasion to expound

on the nature and effect of the provincial

governor's power to approve contracts
entered into by a municipal government
as provided for under Section 2196 of
the Revised Administrative Code. The
Court held, thus:
x x x The approval by the provincial
governor of contracts entered into and
executed by a municipal council, as
required in [S]ection 2196 of the Revised
Administrative Code, is part of the
system of supervision that the provincial
government
exercises
over
the
municipal governments. It is not a
prohibition against municipal councils
entering into contracts regarding
municipal
properties
subject
of
municipal administration or control. It
does not deny the power, right or
capacity of municipal councils to enter
into such contracts; such power or
capacity is recognized. Only the exercise
thereof is subject to supervision by
approval or disapproval, i.e., contracts
entered in pursuance of the power
would ordinarily be approved if entered
into in good faith and for the best
interests of the municipality; they would
be denied approval if found illegal or
unfavorable to public or municipal
interest.The
absence
of
the
approval, therefore, does not per
se make the contracts null and
void.[17]
This pronouncement was later reiterated
in Pechueco
Sons
Company
v.
Provincial Board of Antique,[18] where
the Court ruled more emphatically that:
In other words, as regards the municipal
transactions specified in Section 2196 of
the Revised Administrative Code, the
Provincial Governor has two courses of
action to take either to approve or
disapprove the same. And since

absence of such approval does not

necessarily render the contract
entered into by the municipality
null and void, the transaction
remains voidable until such time
when by subsequent unfavorable
action of the governor, for reasons
of public interest, the contract is
thereby invalidated.[19]
It is clear from the above-quoted
pronouncements of the Court that,
pending approval or disapproval by the
Provincial Governor of a contract
entered into by a municipality which
falls under the provisions of Section
2196 of the Revised Administrative
Code, such contract is considered
voidable. In the instant case, there is no
showing that the contract of sale entered
into between Pedro and the Municipality
of Marikina was ever acted upon by the
Provincial Governor. Hence, consistent
with the rulings enunciated above, the
subject contract should be considered
voidable.
Voidable or
annullable
contracts, before they are set aside, are
existent, valid, and binding, and are
effective and obligatory between the
parties.[20]
In the present case, since the contract
was never annulled or set aside, it had
the effect of transferring ownership of
the subject property to Pedro. Having
lawfully acquired ownership of Lots A
and C, Pedro, in turn, had the full
capacity to transfer ownership of these
parcels
of
land
or
parts
thereof, including the subject property
which comprises a portion of Lot C.
It is wrong for petitioners to argue that
it was only on June 25, 1992, when TCT
No. 223361 covering Lot C was issued in
the name of the estate of Pedro, that he
became the owner thereof.

Article 1496 of the Civil Code provides:

The ownership of the thing sold is
acquired by the vendee from the
moment it is delivered to him in any of
the ways specified in Articles 1497 to
1501, or in any other manner signifying
an agreement that the possession is
transferred from the vendor to the
vendee.
In conjunction with the above-stated
provision, Article 1497 of the Civil Code
states that:
The thing sold shall be understood as
delivered when it is placed in the control
and possession of the vendee.

subject property as early as 1966 when

the same was delivered to him by the
Municipality of Marikina, and the
execution of the Deed of Absolute
Transfer of Real Property as well as the
consequent issuance of TCT No. 223316
are simply a confirmation of such
ownership.
It may not be amiss to point out at this
juncture that the Deed of Absolute
Transfer of Real Property executed by
the Mayor of Marikina was no longer
subject to approval by the Provincial
Governor of Rizal because Marikina
already became part of Metro Manila on
November 7, 1975.[22] On December 8,
1996, Marikina became a chartered city.
[23]

In the present case, there is no dispute

that Pedro took control and possession
of the said lot immediately after his bid
was accepted by the Municipal
Government of Marikina. In fact, herein
petitioners, in their Answer with
Compulsory Counterclaim admit that
both Pedro and Marcos, together with
their respective heirs, were already
occupying the subject property even
before the same was sold to Pedro and
that, after buying the same, Pedro
allowed Marcos and his family to stay
thereon.[21] This only shows that upon
perfection of the contract of sale
between the Municipality of Marikina
and Pedro, the latter acquired
ownership of the subject property by
means of delivery of the same to him.
Hence, the issuance of TCT No. 223361,
as well as the execution of the Deed of
Absolute Transfer of Real Property on
February 7, 1992 by the Municipal
Mayor of Marikina, could not be
considered as the operative acts which
transferred ownership of Lot C to Pedro.
Pedro already acquired ownership of the

In their second assignment of error,

petitioners question the authenticity and
due execution of the Deed of Sale
executed by Pedro in favor of Marcos.
Petitioners also argue that even
assuming that Pedro actually executed
the subject Deed of Sale, the same is not
valid because it was not notarized as
required under the provisions ofArticles
1403 and 1358 of the Civil Code.
The Court is not persuaded.
The RTC, in its abbreviated discussion
of the questions raised before it, did not
touch on the issue of whether the Deed
of Sale between Pedro and Marcos is
authentic and duly executed. However,
the CA, in its presently assailed
Decision, adequately discussed this issue
and ruled as follows:
x x x In the present case, We are
convinced that plaintiffs-appellants
[herein respondents] have substantially
proven that Pedro, indeed, sold the
subject
property
to
Marcos

forP9,378.75. The fact that no receipt

was presented to prove actual payment
of consideration, in itself, the absence of
receipts, or any proof of consideration,
would not be conclusive since
consideration is always presumed.
Likewise, the categorical statement in
the trial court of Manuel P. Bernardo,
one of the witnesses in the Deed of Sale,
that he himself saw Pedro sign such
Deed lends credence. This was
corroborated by another witness,
Guillermo
Flores.
Although
the
defendants-appellees
[herein
petitioners]
are
assailing
the
genuineness of the signatures of their
parents on the said Deed, they presented
no evidence of the genuine signatures of
their parents as would give this Court a
chance to scrutinize and compare it with
the assailed signatures. Bare allegations,
unsubstantiated by evidence, are not
equivalent to proof under our Rules.[24]

In the instant petition, petitioners would

have
us
review
the
factual
determinations of the CA. However,
settled is the rule that the Court is not a
trier of facts and only questions of law
are the proper subject of a petition for
review on certiorari in this Court.
[25]
While there are exceptions to this
rule,[26] the Court finds that the instant
case does not fall under any of
them. Hence, the Court sees no reason
to disturb the findings of the CA, which
are supported by evidence on record.
On the question of whether the subject
Deed of Sale is invalid on the ground
that it does not appear in a public
document, Article 1358 of the same
Code enumerates the acts and contracts
that should be embodied in a public
document, to wit:

Art. 1358. The following must appear in

a public document:
(1) Acts and contracts which
have for their object the creation,
transmission,
modification
or
extinguishment of real rights over
immovable property; sales of real
property or of an interest therein
are governed by Articles 1403, No.
2 and 1405;

memorandum thereof, be in
writing, and subscribed by the
party charged, or by his agent;
evidence, therefore, of the agreement
cannot be received without the writing,
or a secondary evidence of its contents:

(2) The
cession,
repudiation
or
renunciation of hereditary rights or of
those of the conjugal partnership of
gains;

xxxx

(3) The power to administer property,

or any other power which has for its
object an act appearing or which should
appear in a public document, or should
prejudice a third person; and
(4) The cession of actions or rights
proceeding from an act appearing in a
public document.
All other contracts where the amount
involved exceeds five hundred pesos
must appear in writing, even a private
one. But sales of goods, chattels or
things in action are governed by Articles
1403, No. 2 and 1405.
On the other hand, pertinent portions of
Article 1403 of the Civil Code provide as
follows:
Art. 1403. The following contracts are
unenforceable, unless they are ratified:
xxxx
(2) Those that do not comply with the
Statute of Frauds as set forth in this
number. In the following cases an
agreement hereafter made shall be
unenforceable by action, unless
the same, or some note or

(a)
An agreement that by its terms is
not to be performed within a year from
the making thereof;

(e) An agreement for the leasing for a

longer period than one year, or for the
sale of real property or of an
interest therein; x x x[27]

Under Article 1403(2), the sale of real

property should be in writing and
subscribed by the party charged for it to
be enforceable.[28] In the case before the
Court, the Deed of Sale between Pedro
and Marcos is in writing and subscribed
by Pedro and his wife Francisca; hence,
it is enforceable under the Statute of
Frauds.
However, not having been subscribed
and sworn to before a notary public, the
Deed of Sale is not a public document
and, therefore, does not comply with
Article 1358 of the Civil Code.

instrument or formal writing, is,

nevertheless, valid and binding among
the parties, for the time-honored rule is
that even a verbal contract of sale of real
estate produces legal effects between the
parties.[30] Stated differently, although a
conveyance of land is not made in a
public document, it does not affect the
validity of such conveyance. Article 1358
does not require the accomplishment of
the acts or contracts in a public
instrument in order to validate the act or
contract but only to insure its efficacy.
[31]
Thus, based on the foregoing, the
Court finds that the CA did not err in
ruling that the contract of sale between
Pedro and Marcos is valid and binding.
WHEREFORE, the instant petition
is DENIED. The assailed Decision and
Resolution of the Court of Appeals in
CA-G.R.
CV
No.
60998
are AFFIRMED.
SO ORDERED.
FIRST DIVISION

HEIRS
OF
BIENVENI
ARACELI TANYAG, namely: ARTURO
T. JOCSON AND ZENAIDA T. VELOSO
Petitioners,

- versus Nonetheless, it is a settled rule that the

failure to observe the proper form
prescribed by Article 1358 does not
render the acts or contracts enumerated
therein invalid. It has been uniformly
held that the form required under the
said Article is not essential to the
validity or enforceability of the
transaction, but merely for convenience.
[29]
The Court agrees with the CA in
holding that a sale of real property,
though not consigned in a public

SALOME E. GABRIEL, NESTOR R.

GABRIEL-ARNEDO married to ART
NORA
GABRIEL-CALINGO
m
CALINGO,
PILAR
M.
MENDIO
GABRIEL-NATIVIDAD
marriedto
NATIVIDAD, and ERLINDA VELASQ
HERMINIO VELASQUEZ,
Respondents.

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
VILLARAMA, JR., J.:
This is a petition for review under Rule
45 which
seeks
to
reverse
the
Decision[1] dated August 18, 2006 and
Resolution[2] dated December 8, 2006 of
the Court of Appeals (CA) in CA-G.R. CV
No. 81224. The CA affirmed the
Decision[3] dated November 19, 2003 of
the Regional Trial Court of Pasig City,
Branch 267 in Civil Case No. 67846
dismissing petitioners complaint for
declaration of nullity of Original
Certificate of Title (OCT) No. 1035,
reconveyance and damages, as well as
respondents counterclaims for damages
and attorneys fees.
Subject of controversy are two adjacent
parcels of land located at Ruhale,
Barangay Calzada, Municipality of
Taguig (now part of Pasig City, Metro
Manila). The first parcel (Lot 1) with an
area of 686 square meters was originally
declared in the name of Jose Gabriel
under Tax Declaration (TD) Nos. 1603
and 6425 issued for the years 1949 and
1966, while the second parcel (Lot 2)
consisting of 147 square meters was
originally declared in the name of
Agueda Dinguinbayan under TD Nos.
6418 and 9676 issued for the years 1966
and 1967.[4] For several years, these
lands lined with bamboo plants
remained undeveloped and uninhabited.
Petitioners claimed that Lot 1 was
owned by Benita Gabriel, sister of Jose
Gabriel, as part of her inheritance as
declared by her in a 1944 notarized
instrument (Affidavit of Sale) whereby
she sold the said property to spouses
Gabriel Sulit and Cornelia Sanga. Said
document states:

DAPAT MALAMAN NG LAHAT NG

MAKABABASA
Na, akong Benita Gabriel, balo sa
nasirang Calixto Lontoc, Filipina may
karapatang gulang naninirahan sa
nayon ng Palingon, Tagig, Rizal, x x x sa
pamamaguitan nitoy
ISINASAYSAY KO AT PINAGTITIBAY
1.) Na, sarili ko at tunay na pagaari ang
isang lagay na lupang kawayanan na
sapagkat itoy kabahagui ko sa aking
kapatid na [J]ose Gabriel, na itoy mana
ko sa aking nasirang ama Mateo
Gabriel sa kami lamang dalawa ng aking
kapatid na binabanguit ko na Jose
Gabriel
siyang
mga
anak
at
tagapagmana ng aming amang nasirang
Mateo Gabriel, maliban sa amin ay wala
nang iba, kayat kami ay naghati sa mga
ari-arian na na iwan sa amin ng
nasirang ama namin na Mateo Gabriel,
na ang lupang kawayanang itoy may
nakatanim na walong (8) punong
kawayan at na sa pook na kung
pamagatan ay Ruhale nayon ng Calzada,
Tagig, Rizal, at na sa loob ng mga
kahanganan at sukat na sumusunod[:]
Na, ang kahangan sa Hilagaan Sapang
Ruhale at Vicente Bunye, sa Amihanan
Felipe Pagkalinawan, sa Timugan Juan
Flores, at sa Habagatan Apolonio Ocol
may sukat na 6 areas at 85 centiareas
may
halagan
amillarada
na
P80.00) Pesos alinsunod sa Tax Blg.
20037, sa pangalan ng aking kapatid na
Jose Gabriel. Na, ang lupang itoy hindi
natatala sa bisa ng batas Blg. 496 ni sa
susog gayon din sa Hipotecaria
Espaola itoy may mga mojon bato ang
mga panulok at walang bakod.
2.) Na,
alang-alang
sa
halagang
SIYAMNAPO AT ANIM (P96.00) na
Pisong salaping guinagamit dito sa
Filipinas na bago dumating ang mga
sandaling itoy tinaggap ko at ibinayad sa
akin ng boong kasiyahang loob ko ng
magasawang GABRIEL SULIT AT

CORNELIA SANGA, mga Filipinos may

mga
karapatang
gulang
mga
naninirahan sa nayon ng Calzada, Tagig,
Rizal, ngayon ay inilipat ko at ipinagbili
ng bilihang tuluyan (Venta real soluta)
ang isinasaysay kong lupang kawayanan
sa itaas nito ng nasabi halagang
SIYAMNAPO AT ANIM (P96.00) na
Piso at sa nabanguit na magasawang
GABRIEL SULIT AT CORNELIA
SANGA, gayon din sa lahat ng mga
tagapagmana nila, ngayong mga arao na
ito ay ang may hawak at namamahala ng
lupang itoy ang mga nakabili sa akin na
magasawang GABRIEL SULIT AT
CORNELIA SANGA.
3.) Na, ang kasulatang itoy ng bilihan ay
nais na itala sa bisa ng batas Blg. 3344.
NA SA KATUNAYAN NG LAHAT NG
ITOY ako ay lumagda sa kasulatang ito
dito sa Tagig, Rizal, ngayong ika - 28 ng
Junio 1944.
(Nilagdaan) BENITA GABRIEL[5]
Lot 1 allegedly came into the possession
of Benita Gabriels own daughter,
Florencia Gabriel Sulit, when her fatherin-law Gabriel Sulit gave it to her as part
of inheritance of his son, Eliseo Sulit
who was Florencias husband. Florencia
Sulit sold the same lot to Bienvenido S.
Tanyag, father of petitioners, as
evidenced by a notarized deed of sale
dated October 14, 1964.[6] Petitioners
then took possession of the property,
paid the real estate taxes due on the land
and declared the same for tax purposes,
as shown by TD No. 11445 issued in
1969 in the name of Bienvenidos wife,
Araceli C. Tanyag; TD No. 11445
cancelled TD No. 6425 in the name of
Jose Gabriel. TD Nos. 3380 and 00486
also in the name of Araceli Tanyag were
issued in the years 1974 and 1979.[7]
As to Lot 2, petitioners averred that it
was sold by Agueda Dinguinbayan to
Araceli Tanyag under Deed of Sale
executed
on
October
22,

1968. Thereupon,
petitioners
took
possession of said property and declared
the same for tax purposes as shown by
TD Nos. 11361, 3395, 120-014-00482,
120-00-014-20-002-000, C-014-00180
and D-014-00182 issued for the years
1969, 1974, 1979, 1985, 1991 and 1994.
[8]
Petitioners
claimed
to
have
continuously, publicly, notoriously and
adversely occupied both Lots 1 and 2
through
their
caretaker
Juana
Quinones[9]; they fenced the premises
and introduced improvements on the
land.[10]
Sometime in 1979, Jose Gabriel, father
of respondents, secured TD No. 120014-01013 in his name over Lot 1
indicating therein an increased area of
1,763
square
meters. Said
tax
declaration supposedly cancelled TD No.
6425 over Lot 1 and contained the
following inscription[11]:
Note: Portions of this Property is Also
Declared
in the name of Araceli C. Tanyag under
T.D.#120-014-00858 686 sq. m.
Also inscribed on TD No. 120-01400858[12] (1979) in the name of Araceli
Tanyag covering Lot 1 are the following:
This property is also covered by T.D.
#120-014-01013
in the name of Jose P. Gabriel
1-8-80
which notation was carried into the
1985, 1990 and 1991 tax declarations, all
in the name of Araceli Tanyag.
On March 20, 2000, petitioners
instituted Civil Case No. 67846 alleging
that respondents never occupied the
whole 686 square meters of Lot 1 and
fraudulently caused the inclusion of Lot
2 in TD No. 120-014-01013 such that Lot
1 consisting of 686 square meters
originally declared in the name of Jose
Gabriel was increased to 1,763 square
meters. They contended that the
issuance of OCT No. 1035 on October

28, 1998 over the subject land in the

name of respondents heirs of Jose
Gabriel was null and void from the
beginning.[13]
On the other hand, respondents asserted
that petitioners have no cause of action
against them for they have not
established their ownership over the
subject property covered by a Torrens
title in respondents name. They further
argued that OCT No. 1035 had become
unassailable one year after its issuance
and petitioners failed to establish that it
was irregularly or unlawfully procured.
[14]

Respondents evidence showed that the

subject land was among those properties
included in the Extrajudicial Settlement
of Estate of Jose P. Gabriel [15]executed
on October 5, 1988, covered by TD No.
B-014-00643 (1985) in the name of Jose
Gabriel. Respondents
declared
the
property in their name but the tax
declarations (1989, 1991 and 1994)
carried the notation that portions
thereof (686 sq. ms.) are also declared in
the name of Araceli Tanyag. On October
28, 1998, OCT No. 1035 [16] was issued to
respondents by the Register of Deeds of
Pasig, Metro Manila under Decree No.
N-219177 pursuant to the Decision dated
September 20, 1996 of the Land
Registration Court in LRC Case No. N11260, covering Lot 1836 MCadm-590D, Taguig Cadastral Mapping, Plan Ap04-002253, with an area of 1,560 square
meters.
On the other hand, respondents TD Nos.
D-014-00839 and D-014-01923 issued
in 1993 and 1999 respectively, showed
that respondents sold 468 square meters
of Lot 1 to Jayson Sta. Barbara. [17] The
segregation of said 468 square meters
pertaining to Jayson Sta. Barbara was
reflected in the approved survey plan of
Lot 1836 prepared by respondents
surveyor on March 18, 2000.[18]

At the trial, petitioners presented their

witness Arturo Tanyag, son of
Bienvenido Tanyag and Araceli Tanyag
who died on March 30, 1968 and
October 30, 1993, respectively. He
testified that according to Florencia
Sulit, Benita Gabriel-Lontoc and her
family were the ones in possession of
Lot 1 since 1944; Benita Gabriel had
executed an Affidavit of Sale declaring
said property as her inheritance and
conveying the same to spouses Gabriel
and Cornelia Sulit. He affirmed that they
had been in possession of Lot 1 from the
time Bienvenido Tanyag bought the land
from Florencia Sulit in 1964. Based on
the boundaries indicated in the tax
declaration, they fenced the property,
installed Juana Quinones as their
caretaker who also attended to the
piggery, put up an artesian well and
planted some trees.From 1964 up to
1978, nobody disturbed them in their
possession or claimed ownership of the
land; four years after acquiring Lot 1,
they also purchased the adjacent
property (Lot 2) to expand their
piggery. Lot 2 was also separately
declared for tax purposes after their
mother purchased it from Agueda
Dinguinbayan. He
had
personally
witnessed the execution of the 1968
deed of sale including its notarization,
and was also present during the physical
turn over of Lot 2 by the seller. In fact,
he was one of the instrumental
witnesses to the deed of sale and
identified his signature therein. He
further described the place as
inaccessible at that time as there were
no roads yet and they had to traverse
muddy tracks to reach their property.[19]
Arturo further testified that the first
time they met Jose Gabriel was when
the latter borrowed from their mother
all the documents pertaining to their
property.Jose Gabriel came looking for a

piece of property which he claims as his

but he had no documents to prove it and
so they showed him their documents
pertaining to the subject property; out of
the goodness of her mothers heart, she
lent those documents to her brother
Jose Gabriel. During the cadastral
survey conducted in 1976, they had both
lots surveyed in preparation for their
consolidation
under
one
tax
declaration. However, they did not
succeed in registering the consolidated
lots as they discovered that there was
another tax declaration covering the
same properties and these were applied
for titling under the name of Jose
Gabriel sometime in 1978 or 1980,
which was after the time said Jose
Gabriel borrowed the documents from
their mother. No notice of the hearings
for application of title filed by Jose
Gabriel was received by them. They
never abandoned the property and their
caretaker never left the place except to
report to the police when she was being
harassed by the respondents. He also
recalled that respondents had filed a
complaint against them before the
barangay but since no agreement was
reached after several meetings, they
filed the present case.[20]
The next witness for petitioners was
Juana Quinones, their caretaker who
testified that she had been staying on
petitioners property since 1964 or for 35
years already. She had built a nipa hut
and artesian well, raised piggery and
poultry and planted some root crops and
vegetables on the land. At first there was
only one parcel but later the petitioners
bought an additional lot; Arturo Tanyag
gave her money which she used for the
fencing of the property. During all the
time she occupied the property there
was nobody else claiming it and she also
had not received any notice for
petitioners concerning the property, nor

the conduct of survey on the land. On

cross-examination, she admitted that
she was living alone and had no Voters
ID or any document evidencing that she
had been a resident there since
1964. Although she was living alone, she
asks for help from other persons in
tending her piggery.[21]
Angelita Sulit-delos Santos, cousin of
petitioners and also of respondents,
testified that she came to know the
subject property because according to
her paternal grandfather Gabriel Sta.
Ana Sulit, her maternal grandmother
Benita Gabriel-Lontoc mortgaged the
property to him. It was Benita Gabriel
Lontoc who took care of her, her siblings
and cousins; they lived with her until
her death. She identified the signature of
Benita Gabriel in the 1944 Affidavit of
Sale in favor of Gabriel Sulit.Lot 1
consisting of 600 square meters was
vacant property at that time but her
family was in possession thereof when it
was sold to Gabriel Sulit; it was her
father Eliseo Sulit and uncle Hilario
Sulit, who were incharge of their
property. On cross-examination, she
was asked details regarding the
supposed mortgage of Lot 1 to Gabriel
Sulit but she admitted she does not
know anything as she was still very
young then.[22]
Respondents first witness was Roberto
Gabriel Arnedo, son of Luz GabrielArnedo. He testified that when he was
about 5 or 6 years old (1953 or 1954), his
grandfather Jose Gabriel used to bring
him along to visit the subject property
consisting of 1,763 square meters based
on the tax declaration and OCT. They
had
picnics
and
celebrate
his
grandfathers birthday there. He recalled
accompanying his grandfather in
overseeing
the
planting
of gumamela which served as the
perimeter fence. Jose Gabriel had not

mentioned anything about the claim of

petitioners over the same land; Jose
Gabriel
handed
the
documents
pertaining to the land to his eldest aunt
and hence it now belongs to them.[23] On
cross-examination, he claimed that
during those years he had visited the
land together with his grandfather, he
did not see Florencia Sulit and her
family.[24]
Virginia Villanueva, daughter of Salome
Gabriel, testified that they acquired the
subject property from their grandfather
Jose Gabriel who had a tax declaration
in his name. Her mother furnished them
with documents such as tax declarations
and the extrajudicial settlement of the
estate of Jose Gabriel; they also have an
approved survey plan prepared for
Salome Gabriel. She does not know the
petitioners in this case.[25] On crossexamination, she said that the subject
property was inherited by Jose Gabriel
from his father Mateo Gabriel; Jose
Gabriel was the sole owner of the land
while Benita Gabriel has separate
properties in Palingon and Langkokak.
[26]
Though they are not actually
occupying the property, they visit the
place and she does not know anybody
occupying it, except for the portion (486
square meters) which petitioners sold to
Sta. Barbara. A nine-door apartment
was built on the said portion without
their permission. She had talked to both
Sta. Barbara and with Arturo Tanyag
they had meetings before the barangay;
however, petitioners filed the present
case in court. She insisted that there is
nobody residing in the subject property;
there is still the remaining 901 square
meters which is owned by their
mother. She admitted there were plants
on the land but she does not know who
actually planted them; it was her
grandfather who built a wooden fence
and gumamela in the 1960s. As to the

hearings on the application for title, she

had not attended the same; she does not
know whether the petitioners were
notified of the said hearings. She also
caused the preparation of the survey
plan for Salome Gabriel. On the
increased area of the property indicated
in the later tax declarations, she
admitted the discrepancy but said there
were barangay roads being built at the
time.[27]
Esmeraldo Ramos, Municipal Assessor
of Taguig, testified that he was formerly
a Land Appraiser in the Office of the
Municipal Assessor of Taguig and in the
course of his duties had certified one of
the tax declarations in the name of
respondents (TD No. EL-014-10585). He
identified and verified said document
and the other tax declarations submitted
in court by the respondents. He
admitted that on January 10, 1980, they
made the entry on TD No. 6425 in the
name of Jose Gabriel that the same was
cancelled by TD No. 120-014-01013 also
in the name of Jose Gabriel who
presented a supposed deed of sale in
favor of Araceli Tanyag which caused the
earlier cancellation of TD No. 6425 in
his name. However, upon investigation
they found out that the seller Florencia
Sulit was not the owner because the
declared owner was Jose Gabriel; even
the deed of sale recognized that the
property was declared in the name of
Jose Gabriel. They also discovered from
the cadastral survey and tax mapping of
Taguig that the property is in the name
of Jose Gabriel both in the Bureau of
Lands
and
Municipal
Assessors
Office. As far as he knows, it was Jose
Gabriel who owned the subject property
which he usually visited; he recalled that
around the late 70s and 80s, he ordered
the fencing of barbed wire and bamboo
stalks on the land which is just 3 lots
away from his own property. As to the

discrepancy in the area of the property

as originally declared by Jose Gabriel, he
explained that the boundaries in the
original tax declaration do not change
but after the land is surveyed, the
boundaries naturally would be different
because the previous owner may have
sold his property or the present owner
inherits the property from his
parents. He admitted that the tax
declaration is just for tax purposes and
not necessarily proof of ownership or
possession of the property it covers.[28]
Respondents last witness was Antonio
Argel who testified that he had resided
for 52 years on a land near the subject
property and as far as he knows it was
Jose Gabriel who owns it and planted
thereon. On
cross-examination,
he
admitted that Jose Gabriel was not in
physical possession of the property. He
just assumed that the present occupants
of the property were allowed by Jose
Gabriel to stay therein because he is the
owner. There is an apartment and three
small houses existing on the property,
and about five families are living
there. He confirmed that there is a
piggery being maintained by a certain
Juana who had been residing there
maybe for fifteen years already.[29]
In rebuttal, petitioners presented two
witnesses who are owners of properties
adjoining
that
of
the
subject
land. Rodante Domingo testified that it
was only now did he learn that the
property of Arturo Tanyag is already
titled in the name of respondents. He
was not aware of the titling proceeding
because he never received any notice as
adjoining owner. His own property is
already titled in his name and he even
asked Arturo Tanyag to act as a witness
in his application for titling.[30] On the
other hand, Dado Dollado testified that
he acquired his property in 1979. He
likewise affirmed that he did not receive

any notice of the proceedings for

application
for
titling
filed
by
respondents and it was only now that he
learned from Arturo Tanyag that the
subject property was already titled in the
names of respondents.[31]
The last rebuttal witness for petitioners
was Dominador Dinguinbayan Ergueza,
son of Agueda Dinguinbayan. He
testified that the subject property was
formerly owned by his mother and the
present owner is Araceli Tanyag who
bought the same from his mother in
1968. He described the boundaries of
the property in relation to the adjoining
owners at that time; presently, the left
portion is already a street (Rujale St.)
going towards the sea. He admitted that
his wife, Livina Ergueza was an
instrumental witness in the 1968 deed of
sale in favor of Araceli Tanyag.[32]
In its decision, the trial court dismissed
the complaint as well as the
counterclaim, holding that petitioners
failed to establish ownership of the
subject property and finding the
respondents to be the declared owners
and legal possessors. It likewise ruled
that petitioners were unable to prove by
preponderance
of
evidence
that
respondents acquired title over the
property through fraud and deceit.
Petitioners appealed to the CA which
affirmed the trial courts ruling. The CA
found that apart from the Affidavit
executed by Benita Gabriel in 1944
claiming that she inherited Lot 1 from
their father, Mateo Gabriel, there is no
evidence that she, not Jose Gabriel, was
the true owner thereof. It noted that just
four years after Benita Gabriels sale of
the subject property to the Sulit spouses,
Jose Gabriel declared the same under
his name for tax purposes, paying the
corresponding taxes. The appellate court
stressed that petitioners allegation of
bad faith was not proven.

Petitioners motion for reconsideration

was likewise denied by the CA. Hence,
this petition.
Petitioners assail the CA in not finding
that the respondents obtained OCT No.
1035 in their names fraudulently and in
bad faith. They also claim to have
acquired ownership of the subject lots
by virtue of acquisitive prescription.
The issues presented are: (1) whether
respondents committed fraud and bad
faith in registering the subject lots in
their name; and (2) whether petitioners
acquired
the
property
through
acquisitive prescription.
Registration of a piece of land under the
Torrens System does not create or vest
title, because it is not a mode of
acquiring ownership. A certificate of title
is merely an evidence of ownership or
title over the particular property
described
therein.[33] Thus,
notwithstanding the indefeasibility of
the Torrens title, the registered owner
may still be compelled to reconvey the
registered property to its true
owners. The rationale for the rule is that
reconveyance does not set aside or resubject to review the findings of fact of
the Bureau of Lands. In an action for
reconveyance, the decree of registration
is respected as incontrovertible. What is
sought instead is the transfer of the
property or its title which has been
wrongfully or erroneously registered in
another persons name, to its rightful or
legal owner, or to the one with a better
right.[34]
An action for annulment of title or
reconveyance based on fraud is
imprescriptible where the plaintiff is in
possession of the property subject of the
acts.[35]The totality of the evidence on
record established that it was petitioners
who are in actual possession of the
subject property; respondents merely
insinuated at occasional visits to the

land. However, for an action for

reconveyance based on fraud to prosper,
this Court has held that the party
seeking reconveyance must prove by
clear and convincing evidence his title to
the property and the fact of fraud.[36]
The CA correctly observed that the only
evidence of Benita Gabriels supposed
title was the 1944 Affidavit of Sale
whereby Benita Gabriel claimed sole
ownership of Lot 1 as her inheritance
from their father, Mateo Gabriel. The
property until 1949 was still declared in
the name Jose Gabriel despite the 1944
sale executed by Benita Gabriel in favor
of spouses Gabriel and Cornelia Sulit. As
to the alleged fraud perpetrated by Jose
Gabriel and respondents in securing
OCT No. 1035 in their name, this was
clearly not proven as Arturo Tanyag
testified merely that Jose Gabriel
borrowed their documents pertaining to
the property. No document or testimony
was presented to show that Jose Gabriel
employed
deceit
or
committed
fraudulent acts in the proceedings for
titling of the property.
However, the CA did not address the
issue of acquisitive prescription raised
by the petitioners. In their Complaint
before the lower court, petitioners
alleged
15. Defendants never occupied the whole
area of the lot covered by Tax
Declaration No. 1603 (686 sq. m.)
neither were they able to set foot on the
property covered by Tax Declaration No.
6542 [sic] for the reason that those lots
had been in actual, open continuous,
adverse and notorious possession of the
plaintiffs against the whole world for
more than thirty years which is
equivalent to title.
x x x x[37]
Such character and length of possession
of a party over a parcel of land subject of
controversy is a factual issue. Settled is

the rule that questions of fact are not

reviewable in petitions for review
on certiorari under Rule 45 of the Rules
of Court, as only questions of law shall
be raised in such petitions. While this
Court is not a trier of facts, if the
inference drawn by the appellate court
from the facts is manifestly mistaken, it
may, in the interest of justice, review the
evidence in order to arrive at the correct
factual conclusions based on the record.
[38]

In this case, the CA was mistaken in

concluding that petitioners have not
acquired any right over the subject
property simply because they failed to
establish Benita Gabriels title over said
property. The appellate court ignored
petitioners evidence of possession that
complies with the legal requirements of
acquiring ownership by prescription.
Acquisitive prescription is a mode of
acquiring ownership by a possessor
through the requisite lapse of time. In
order to ripen into ownership,
possession must be in the concept of an
owner,
public,
peaceful
and
uninterrupted.[39] Possession is open
when it is patent, visible, apparent,
notorious and not clandestine.[40] It is
continuous
when
uninterrupted,
unbroken and not intermittent or
occasional; exclusive when the adverse
possessor can show exclusive dominion
over the land and an appropriation of it
to his own use and benefit; and
notorious when it is so conspicuous that
it is generally known and talked of by
the public or the people in the
neighborhood. The party who asserts
ownership by adverse possession must
prove the presence of the essential
elements of acquisitive prescription.[41]
On the matter of prescription, the Civil
Code provides:

Art. 1117. Acquisitive prescription of

dominion and other real rights may be
ordinary or extraordinary.
Ordinary
acquisitive
prescription
requires possession of things in good
faith and with just title for the time fixed
by law.
Art. 1134. Ownership and other real
rights over immovable property are
acquired by ordinary prescription
through possession of ten years.
Art. 1137. Ownership and other real
rights over immovables also prescribe
through
uninterrupted
adverse
possession thereof for thirty years,
without need of title or of good
faith. (Emphasis supplied.)
Petitioners adverse possession is
reckoned from 1969 with the issuance of
TD No. 1145 in the name of Araceli
Tanyag, which tax declaration cancelled
TD No.6425 in the name of Jose Gabriel.
[42]
It is settled that tax receipts and
declarations are prima facie proofs of
ownership or possession of the property
for which such taxes have been paid.
Coupled with proof of actual possession
of the property, they may become the
basis of a claim for ownership.
[43]
Petitioners caretaker,
Juana
Quinones, has since lived in a nipa hut,
planted vegetables and tended a piggery
on the land. Aside from paying taxes due
on the property, petitioners also
exercised other acts of ownership such
as selling the 468-square meter portion
to Sta. Barbara who had constructed
thereon a nine-door apartment building.
It was only in 1979 that respondents
began to assert a claim over the property
by securing a tax declaration in the
name of Jose Gabriel albeit over a bigger
area than that originally declared. In
1998, they finally obtained an original
certificate of title covering the entire
1,763 square meters which included Lot
1. Did these acts of respondents

effectively interrupt the possession of

petitioners for purposes of prescription?
We answer in the negative.
In
the
case
of Heirs
of
Marcelina Azardon-Crisologo
v.
Raon[44] this Court citing Article 1123 of
the Civil Code[45] held that civil
interruption takes place with the service
of judicial summons to the possessor
and not by filing of a mere Notice of
Adverse Claim. Thus:
Article 1123 of the Civil Code is
categorical. Civil
interruption
is
produced by judicial summons to
the possessor. Moreover, even with
the presence of judicial summons,
Article 1124 sets limitations as to when
such summons shall not be deemed to
have been issued and shall not give rise
to interruption, to wit: 1) if it should be
void for lack of legal solemnities; 2) if
the plaintiff should desist from the
complaint or should allow the
proceedings to lapse; or 3) if the
possessor should be absolved from the
complaint.
Both Article 1123 and Article 1124 of the
Civil Code underscore the judicial
character of civil interruption. For civil
interruption to take place, the
possessor must have received
judicial summons. None appears in
the case at bar. The Notice of Adverse
Claim which was filed by petitioners in
1977 is nothing more than a notice of
claim which did not effectively interrupt
respondents possession. Such a notice
could
not
have
produced
civil
interruption. We agree in the conclusion
of the RTC, which was affirmed by the
Court of Appeals, that the execution of
the Notice of Adverse Claim in 1977 did
not toll or interrupt the running of the
prescriptive period because there
remains, as yet, a necessity for a judicial
determination
of
its
judicial
validity. What existed was merely a

notice. There was no compliance with

Article 1123 of the Civil Code. What is
striking is that no action was, in fact,
filed
by
petitioners
against
respondents. As a consequence, no
judicial summons was received by
respondents. As aptly held by the
Court of Appeals in its affirmance of the
RTCs ruling, the Notice of Adverse
Claim cannot take the place of judicial
summons which produces the civil
interruption provided for under the law.
In the instant case, petitioners were not
able to interrupt respondents adverse
possession since 1962. The period of
acquisitive prescription from 1962
continued to run in respondents
favor despite the Notice of Adverse
Claim. (Emphasis supplied.)
From 1969 until the filing of this
complaint by the petitioners in March
2000, the latter have been in
continuous,
public
and
adverse
possession of the subject land
for 31 years. Having
possessed
the
property for the period and in the
character required by law as sufficient
for
extraordinary
acquisitive
prescription, petitioners have indeed
acquired ownership over the subject
property. Such right cannot be defeated
by respondents acts of declaring again
the property for tax purposes in 1979
and obtaining a Torrens certificate of
title in their name in 1998.
This notwithstanding, we uphold
petitioners right as owner only with
respect to Lot 1 consisting of 686 square
meters. Petitioners failed to substantiate
their claim over Lot 2 by virtue of a deed
of sale from the original declared owner,
Agueda
Dinguinbayan. Respondents
asserted that the 147 square meters
covered by the tax declarations of
Dinguinbayan
being
claimed
by
petitioners is not the same lot included
in OCT No. 1035.

Under Article 434 of the Civil Code, to

successfully maintain an action to
recover the ownership of a real property,
the person who claims a better right to it
must prove two (2) things: first, the
identity of the land claimed; and second,
his title thereto. In regard to the first
requisite,
in
an accion
reinvindicatoria, the person who claims
that he has a better right to the property
must first fix the identity of the land he
is claiming by describing the location,
area and boundaries thereof.[46] In this
case, petitioners failed to identify Lot 2
by providing evidence of the metes and
bounds thereof, so that the same may be
compared with the technical description
contained in OCT No. 1035, which
would have shown whether Lot 2
consisting of 147 square meters was
erroneously included in respondents
title. The
testimony
of
Agueda
Dinguinbayans son would not suffice
because said witness merely stated the
boundary owners as indicated in the
1966 and 1967 tax declarations of his
mother.On his part, Arturo Tayag
claimed that he had the lots surveyed in
the 1970s in preparation for the
consolidation
of
the
two
parcels. However, no such plan was
presented in court.
WHEREFORE, the
petition
is PARTLY
GRANTED. The
Decision dated August 18, 2006 of the
Court of Appeals in CA-G.R. CV No.
81224 isMODIFIED in that petitioners
heirs of Bienvenido and Araceli Tanyag
are hereby declared the owners of 686
square meters previously declared under
Tax Declaration Nos. 11445, 120-01400486, 120-014-0085, B-014-00501, E014-01446, C-014-00893 and D-01400839 all in the name of Araceli Tanyag,
which lot is presently covered by OCT
No. 1035 issued by the Register of Deeds
of Pasig, Metro Manila in the name of

respondents Salome Gabriel, Nestor R.

Gabriel, Luz Gabriel-Arnedo, Nora
Gabriel-Calingo, Pilar Gabriel-Mendiola,
Minerva Gabriel-Natividad and Erlinda
Gabriel-Velasquez. Respondents
are
ORDERED to RECONVEY the said 686square meter portion to the petitioners.
No pronouncement as to costs.
SO ORDERED.
FIRST DIVISION

HEIRS
OF
BIENVENI
ARACELI TANYAG, namely: ARTURO
T. JOCSON AND ZENAIDA T. VELOSO
Petitioners,

- versus -

SALOME E. GABRIEL, NESTOR R.

GABRIEL-ARNEDO married to ART
NORA
GABRIEL-CALINGO
m
CALINGO,
PILAR
M.
MENDIO
GABRIEL-NATIVIDAD
marriedto
NATIVIDAD, and ERLINDA VELASQ
HERMINIO VELASQUEZ,
Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
VILLARAMA, JR., J.:
This is a petition for review under Rule
45 which
seeks
to
reverse
the
Decision[1] dated August 18, 2006 and
Resolution[2] dated December 8, 2006 of
the Court of Appeals (CA) in CA-G.R. CV
No. 81224. The CA affirmed the
Decision[3] dated November 19, 2003 of
the Regional Trial Court of Pasig City,
Branch 267 in Civil Case No. 67846

dismissing petitioners complaint for

declaration of nullity of Original
Certificate of Title (OCT) No. 1035,
reconveyance and damages, as well as
respondents counterclaims for damages
and attorneys fees.
Subject of controversy are two adjacent
parcels of land located at Ruhale,
Barangay Calzada, Municipality of
Taguig (now part of Pasig City, Metro
Manila). The first parcel (Lot 1) with an
area of 686 square meters was originally
declared in the name of Jose Gabriel
under Tax Declaration (TD) Nos. 1603
and 6425 issued for the years 1949 and
1966, while the second parcel (Lot 2)
consisting of 147 square meters was
originally declared in the name of
Agueda Dinguinbayan under TD Nos.
6418 and 9676 issued for the years 1966
and 1967.[4] For several years, these
lands lined with bamboo plants
remained undeveloped and uninhabited.
Petitioners claimed that Lot 1 was
owned by Benita Gabriel, sister of Jose
Gabriel, as part of her inheritance as
declared by her in a 1944 notarized
instrument (Affidavit of Sale) whereby
she sold the said property to spouses
Gabriel Sulit and Cornelia Sanga. Said
document states:
DAPAT MALAMAN NG LAHAT NG
MAKABABASA
Na, akong Benita Gabriel, balo sa
nasirang Calixto Lontoc, Filipina may
karapatang gulang naninirahan sa
nayon ng Palingon, Tagig, Rizal, x x x sa
pamamaguitan nitoy
ISINASAYSAY KO AT PINAGTITIBAY
1.) Na, sarili ko at tunay na pagaari ang
isang lagay na lupang kawayanan na
sapagkat itoy kabahagui ko sa aking
kapatid na [J]ose Gabriel, na itoy mana
ko sa aking nasirang ama Mateo
Gabriel sa kami lamang dalawa ng aking
kapatid na binabanguit ko na Jose
Gabriel
siyang
mga
anak
at

tagapagmana ng aming amang nasirang

Mateo Gabriel, maliban sa amin ay wala
nang iba, kayat kami ay naghati sa mga
ari-arian na na iwan sa amin ng
nasirang ama namin na Mateo Gabriel,
na ang lupang kawayanang itoy may
nakatanim na walong (8) punong
kawayan at na sa pook na kung
pamagatan ay Ruhale nayon ng Calzada,
Tagig, Rizal, at na sa loob ng mga
kahanganan at sukat na sumusunod[:]
Na, ang kahangan sa Hilagaan Sapang
Ruhale at Vicente Bunye, sa Amihanan
Felipe Pagkalinawan, sa Timugan Juan
Flores, at sa Habagatan Apolonio Ocol
may sukat na 6 areas at 85 centiareas
may
halagan
amillarada
na
P80.00) Pesos alinsunod sa Tax Blg.
20037, sa pangalan ng aking kapatid na
Jose Gabriel. Na, ang lupang itoy hindi
natatala sa bisa ng batas Blg. 496 ni sa
susog gayon din sa Hipotecaria
Espaola itoy may mga mojon bato ang
mga panulok at walang bakod.
2.) Na,
alang-alang
sa
halagang
SIYAMNAPO AT ANIM (P96.00) na
Pisong salaping guinagamit dito sa
Filipinas na bago dumating ang mga
sandaling itoy tinaggap ko at ibinayad sa
akin ng boong kasiyahang loob ko ng
magasawang GABRIEL SULIT AT
CORNELIA SANGA, mga Filipinos may
mga
karapatang
gulang
mga
naninirahan sa nayon ng Calzada, Tagig,
Rizal, ngayon ay inilipat ko at ipinagbili
ng bilihang tuluyan (Venta real soluta)
ang isinasaysay kong lupang kawayanan
sa itaas nito ng nasabi halagang
SIYAMNAPO AT ANIM (P96.00) na
Piso at sa nabanguit na magasawang
GABRIEL SULIT AT CORNELIA
SANGA, gayon din sa lahat ng mga
tagapagmana nila, ngayong mga arao na
ito ay ang may hawak at namamahala ng
lupang itoy ang mga nakabili sa akin na
magasawang GABRIEL SULIT AT
CORNELIA SANGA.

3.) Na, ang kasulatang itoy ng bilihan ay

nais na itala sa bisa ng batas Blg. 3344.
NA SA KATUNAYAN NG LAHAT NG
ITOY ako ay lumagda sa kasulatang ito
dito sa Tagig, Rizal, ngayong ika - 28 ng
Junio 1944.
(Nilagdaan) BENITA GABRIEL[5]
Lot 1 allegedly came into the possession
of Benita Gabriels own daughter,
Florencia Gabriel Sulit, when her fatherin-law Gabriel Sulit gave it to her as part
of inheritance of his son, Eliseo Sulit
who was Florencias husband. Florencia
Sulit sold the same lot to Bienvenido S.
Tanyag, father of petitioners, as
evidenced by a notarized deed of sale
dated October 14, 1964.[6] Petitioners
then took possession of the property,
paid the real estate taxes due on the land
and declared the same for tax purposes,
as shown by TD No. 11445 issued in
1969 in the name of Bienvenidos wife,
Araceli C. Tanyag; TD No. 11445
cancelled TD No. 6425 in the name of
Jose Gabriel. TD Nos. 3380 and 00486
also in the name of Araceli Tanyag were
issued in the years 1974 and 1979.[7]
As to Lot 2, petitioners averred that it
was sold by Agueda Dinguinbayan to
Araceli Tanyag under Deed of Sale
executed
on
October
22,
1968. Thereupon,
petitioners
took
possession of said property and declared
the same for tax purposes as shown by
TD Nos. 11361, 3395, 120-014-00482,
120-00-014-20-002-000, C-014-00180
and D-014-00182 issued for the years
1969, 1974, 1979, 1985, 1991 and 1994.
[8]
Petitioners
claimed
to
have
continuously, publicly, notoriously and
adversely occupied both Lots 1 and 2
through
their
caretaker
Juana
[9]
Quinones ; they fenced the premises
and introduced improvements on the
land.[10]
Sometime in 1979, Jose Gabriel, father
of respondents, secured TD No. 120-

014-01013 in his name over Lot 1

indicating therein an increased area of
1,763
square
meters. Said
tax
declaration supposedly cancelled TD No.
6425 over Lot 1 and contained the
following inscription[11]:
Note: Portions of this Property is Also
Declared
in the name of Araceli C. Tanyag under
T.D.#120-014-00858 686 sq. m.
Also inscribed on TD No. 120-01400858[12] (1979) in the name of Araceli
Tanyag covering Lot 1 are the following:
This property is also covered by T.D.
#120-014-01013
in the name of Jose P. Gabriel
1-8-80
which notation was carried into the
1985, 1990 and 1991 tax declarations, all
in the name of Araceli Tanyag.
On March 20, 2000, petitioners
instituted Civil Case No. 67846 alleging
that respondents never occupied the
whole 686 square meters of Lot 1 and
fraudulently caused the inclusion of Lot
2 in TD No. 120-014-01013 such that Lot
1 consisting of 686 square meters
originally declared in the name of Jose
Gabriel was increased to 1,763 square
meters. They contended that the
issuance of OCT No. 1035 on October
28, 1998 over the subject land in the
name of respondents heirs of Jose
Gabriel was null and void from the
beginning.[13]
On the other hand, respondents asserted
that petitioners have no cause of action
against them for they have not
established their ownership over the
subject property covered by a Torrens
title in respondents name. They further
argued that OCT No. 1035 had become
unassailable one year after its issuance
and petitioners failed to establish that it
was irregularly or unlawfully procured.
[14]

Respondents evidence showed that the

subject land was among those properties
included in the Extrajudicial Settlement
of Estate of Jose P. Gabriel [15]executed
on October 5, 1988, covered by TD No.
B-014-00643 (1985) in the name of Jose
Gabriel. Respondents
declared
the
property in their name but the tax
declarations (1989, 1991 and 1994)
carried the notation that portions
thereof (686 sq. ms.) are also declared in
the name of Araceli Tanyag. On October
28, 1998, OCT No. 1035 [16] was issued to
respondents by the Register of Deeds of
Pasig, Metro Manila under Decree No.
N-219177 pursuant to the Decision dated
September 20, 1996 of the Land
Registration Court in LRC Case No. N11260, covering Lot 1836 MCadm-590D, Taguig Cadastral Mapping, Plan Ap04-002253, with an area of 1,560 square
meters.
On the other hand, respondents TD Nos.
D-014-00839 and D-014-01923 issued
in 1993 and 1999 respectively, showed
that respondents sold 468 square meters
of Lot 1 to Jayson Sta. Barbara. [17] The
segregation of said 468 square meters
pertaining to Jayson Sta. Barbara was
reflected in the approved survey plan of
Lot 1836 prepared by respondents
surveyor on March 18, 2000.[18]
At the trial, petitioners presented their
witness Arturo Tanyag, son of
Bienvenido Tanyag and Araceli Tanyag
who died on March 30, 1968 and
October 30, 1993, respectively. He
testified that according to Florencia
Sulit, Benita Gabriel-Lontoc and her
family were the ones in possession of
Lot 1 since 1944; Benita Gabriel had
executed an Affidavit of Sale declaring
said property as her inheritance and
conveying the same to spouses Gabriel
and Cornelia Sulit. He affirmed that they
had been in possession of Lot 1 from the
time Bienvenido Tanyag bought the land

from Florencia Sulit in 1964. Based on

the boundaries indicated in the tax
declaration, they fenced the property,
installed Juana Quinones as their
caretaker who also attended to the
piggery, put up an artesian well and
planted some trees.From 1964 up to
1978, nobody disturbed them in their
possession or claimed ownership of the
land; four years after acquiring Lot 1,
they also purchased the adjacent
property (Lot 2) to expand their
piggery. Lot 2 was also separately
declared for tax purposes after their
mother purchased it from Agueda
Dinguinbayan. He
had
personally
witnessed the execution of the 1968
deed of sale including its notarization,
and was also present during the physical
turn over of Lot 2 by the seller. In fact,
he was one of the instrumental
witnesses to the deed of sale and
identified his signature therein. He
further described the place as
inaccessible at that time as there were
no roads yet and they had to traverse
muddy tracks to reach their property.[19]
Arturo further testified that the first
time they met Jose Gabriel was when
the latter borrowed from their mother
all the documents pertaining to their
property.Jose Gabriel came looking for a
piece of property which he claims as his
but he had no documents to prove it and
so they showed him their documents
pertaining to the subject property; out of
the goodness of her mothers heart, she
lent those documents to her brother
Jose Gabriel. During the cadastral
survey conducted in 1976, they had both
lots surveyed in preparation for their
consolidation
under
one
tax
declaration. However, they did not
succeed in registering the consolidated
lots as they discovered that there was
another tax declaration covering the
same properties and these were applied

for titling under the name of Jose

Gabriel sometime in 1978 or 1980,
which was after the time said Jose
Gabriel borrowed the documents from
their mother. No notice of the hearings
for application of title filed by Jose
Gabriel was received by them. They
never abandoned the property and their
caretaker never left the place except to
report to the police when she was being
harassed by the respondents. He also
recalled that respondents had filed a
complaint against them before the
barangay but since no agreement was
reached after several meetings, they
filed the present case.[20]
The next witness for petitioners was
Juana Quinones, their caretaker who
testified that she had been staying on
petitioners property since 1964 or for 35
years already. She had built a nipa hut
and artesian well, raised piggery and
poultry and planted some root crops and
vegetables on the land. At first there was
only one parcel but later the petitioners
bought an additional lot; Arturo Tanyag
gave her money which she used for the
fencing of the property. During all the
time she occupied the property there
was nobody else claiming it and she also
had not received any notice for
petitioners concerning the property, nor
the conduct of survey on the land. On
cross-examination, she admitted that
she was living alone and had no Voters
ID or any document evidencing that she
had been a resident there since
1964. Although she was living alone, she
asks for help from other persons in
tending her piggery.[21]
Angelita Sulit-delos Santos, cousin of
petitioners and also of respondents,
testified that she came to know the
subject property because according to
her paternal grandfather Gabriel Sta.
Ana Sulit, her maternal grandmother
Benita Gabriel-Lontoc mortgaged the

property to him. It was Benita Gabriel

Lontoc who took care of her, her siblings
and cousins; they lived with her until
her death. She identified the signature of
Benita Gabriel in the 1944 Affidavit of
Sale in favor of Gabriel Sulit.Lot 1
consisting of 600 square meters was
vacant property at that time but her
family was in possession thereof when it
was sold to Gabriel Sulit; it was her
father Eliseo Sulit and uncle Hilario
Sulit, who were incharge of their
property. On cross-examination, she
was asked details regarding the
supposed mortgage of Lot 1 to Gabriel
Sulit but she admitted she does not
know anything as she was still very
young then.[22]
Respondents first witness was Roberto
Gabriel Arnedo, son of Luz GabrielArnedo. He testified that when he was
about 5 or 6 years old (1953 or 1954), his
grandfather Jose Gabriel used to bring
him along to visit the subject property
consisting of 1,763 square meters based
on the tax declaration and OCT. They
had
picnics
and
celebrate
his
grandfathers birthday there. He recalled
accompanying his grandfather in
overseeing
the
planting
of gumamela which served as the
perimeter fence. Jose Gabriel had not
mentioned anything about the claim of
petitioners over the same land; Jose
Gabriel
handed
the
documents
pertaining to the land to his eldest aunt
and hence it now belongs to them.[23] On
cross-examination, he claimed that
during those years he had visited the
land together with his grandfather, he
did not see Florencia Sulit and her
family.[24]
Virginia Villanueva, daughter of Salome
Gabriel, testified that they acquired the
subject property from their grandfather
Jose Gabriel who had a tax declaration
in his name. Her mother furnished them

with documents such as tax declarations

and the extrajudicial settlement of the
estate of Jose Gabriel; they also have an
approved survey plan prepared for
Salome Gabriel. She does not know the
petitioners in this case.[25] On crossexamination, she said that the subject
property was inherited by Jose Gabriel
from his father Mateo Gabriel; Jose
Gabriel was the sole owner of the land
while Benita Gabriel has separate
properties in Palingon and Langkokak.
[26]
Though they are not actually
occupying the property, they visit the
place and she does not know anybody
occupying it, except for the portion (486
square meters) which petitioners sold to
Sta. Barbara. A nine-door apartment
was built on the said portion without
their permission. She had talked to both
Sta. Barbara and with Arturo Tanyag
they had meetings before the barangay;
however, petitioners filed the present
case in court. She insisted that there is
nobody residing in the subject property;
there is still the remaining 901 square
meters which is owned by their
mother. She admitted there were plants
on the land but she does not know who
actually planted them; it was her
grandfather who built a wooden fence
and gumamela in the 1960s. As to the
hearings on the application for title, she
had not attended the same; she does not
know whether the petitioners were
notified of the said hearings. She also
caused the preparation of the survey
plan for Salome Gabriel. On the
increased area of the property indicated
in the later tax declarations, she
admitted the discrepancy but said there
were barangay roads being built at the
time.[27]
Esmeraldo Ramos, Municipal Assessor
of Taguig, testified that he was formerly
a Land Appraiser in the Office of the
Municipal Assessor of Taguig and in the

course of his duties had certified one of

the tax declarations in the name of
respondents (TD No. EL-014-10585). He
identified and verified said document
and the other tax declarations submitted
in court by the respondents. He
admitted that on January 10, 1980, they
made the entry on TD No. 6425 in the
name of Jose Gabriel that the same was
cancelled by TD No. 120-014-01013 also
in the name of Jose Gabriel who
presented a supposed deed of sale in
favor of Araceli Tanyag which caused the
earlier cancellation of TD No. 6425 in
his name. However, upon investigation
they found out that the seller Florencia
Sulit was not the owner because the
declared owner was Jose Gabriel; even
the deed of sale recognized that the
property was declared in the name of
Jose Gabriel. They also discovered from
the cadastral survey and tax mapping of
Taguig that the property is in the name
of Jose Gabriel both in the Bureau of
Lands
and
Municipal
Assessors
Office. As far as he knows, it was Jose
Gabriel who owned the subject property
which he usually visited; he recalled that
around the late 70s and 80s, he ordered
the fencing of barbed wire and bamboo
stalks on the land which is just 3 lots
away from his own property. As to the
discrepancy in the area of the property
as originally declared by Jose Gabriel, he
explained that the boundaries in the
original tax declaration do not change
but after the land is surveyed, the
boundaries naturally would be different
because the previous owner may have
sold his property or the present owner
inherits the property from his
parents. He admitted that the tax
declaration is just for tax purposes and
not necessarily proof of ownership or
possession of the property it covers.[28]
Respondents last witness was Antonio
Argel who testified that he had resided

for 52 years on a land near the subject

property and as far as he knows it was
Jose Gabriel who owns it and planted
thereon. On
cross-examination,
he
admitted that Jose Gabriel was not in
physical possession of the property. He
just assumed that the present occupants
of the property were allowed by Jose
Gabriel to stay therein because he is the
owner. There is an apartment and three
small houses existing on the property,
and about five families are living
there. He confirmed that there is a
piggery being maintained by a certain
Juana who had been residing there
maybe for fifteen years already.[29]
In rebuttal, petitioners presented two
witnesses who are owners of properties
adjoining
that
of
the
subject
land. Rodante Domingo testified that it
was only now did he learn that the
property of Arturo Tanyag is already
titled in the name of respondents. He
was not aware of the titling proceeding
because he never received any notice as
adjoining owner. His own property is
already titled in his name and he even
asked Arturo Tanyag to act as a witness
in his application for titling.[30] On the
other hand, Dado Dollado testified that
he acquired his property in 1979. He
likewise affirmed that he did not receive
any notice of the proceedings for
application
for
titling
filed
by
respondents and it was only now that he
learned from Arturo Tanyag that the
subject property was already titled in the
names of respondents.[31]
The last rebuttal witness for petitioners
was Dominador Dinguinbayan Ergueza,
son of Agueda Dinguinbayan. He
testified that the subject property was
formerly owned by his mother and the
present owner is Araceli Tanyag who
bought the same from his mother in
1968. He described the boundaries of
the property in relation to the adjoining

owners at that time; presently, the left

portion is already a street (Rujale St.)
going towards the sea. He admitted that
his wife, Livina Ergueza was an
instrumental witness in the 1968 deed of
sale in favor of Araceli Tanyag.[32]
In its decision, the trial court dismissed
the complaint as well as the
counterclaim, holding that petitioners
failed to establish ownership of the
subject property and finding the
respondents to be the declared owners
and legal possessors. It likewise ruled
that petitioners were unable to prove by
preponderance
of
evidence
that
respondents acquired title over the
property through fraud and deceit.
Petitioners appealed to the CA which
affirmed the trial courts ruling. The CA
found that apart from the Affidavit
executed by Benita Gabriel in 1944
claiming that she inherited Lot 1 from
their father, Mateo Gabriel, there is no
evidence that she, not Jose Gabriel, was
the true owner thereof. It noted that just
four years after Benita Gabriels sale of
the subject property to the Sulit spouses,
Jose Gabriel declared the same under
his name for tax purposes, paying the
corresponding taxes. The appellate court
stressed that petitioners allegation of
bad faith was not proven.
Petitioners motion for reconsideration
was likewise denied by the CA. Hence,
this petition.
Petitioners assail the CA in not finding
that the respondents obtained OCT No.
1035 in their names fraudulently and in
bad faith. They also claim to have
acquired ownership of the subject lots
by virtue of acquisitive prescription.
The issues presented are: (1) whether
respondents committed fraud and bad
faith in registering the subject lots in
their name; and (2) whether petitioners
acquired
the
property
through
acquisitive prescription.

Registration of a piece of land under the

Torrens System does not create or vest
title, because it is not a mode of
acquiring ownership. A certificate of title
is merely an evidence of ownership or
title over the particular property
described
therein.[33] Thus,
notwithstanding the indefeasibility of
the Torrens title, the registered owner
may still be compelled to reconvey the
registered property to its true
owners. The rationale for the rule is that
reconveyance does not set aside or resubject to review the findings of fact of
the Bureau of Lands. In an action for
reconveyance, the decree of registration
is respected as incontrovertible. What is
sought instead is the transfer of the
property or its title which has been
wrongfully or erroneously registered in
another persons name, to its rightful or
legal owner, or to the one with a better
right.[34]
An action for annulment of title or
reconveyance based on fraud is
imprescriptible where the plaintiff is in
possession of the property subject of the
acts.[35]The totality of the evidence on
record established that it was petitioners
who are in actual possession of the
subject property; respondents merely
insinuated at occasional visits to the
land. However, for an action for
reconveyance based on fraud to prosper,
this Court has held that the party
seeking reconveyance must prove by
clear and convincing evidence his title to
the property and the fact of fraud.[36]
The CA correctly observed that the only
evidence of Benita Gabriels supposed
title was the 1944 Affidavit of Sale
whereby Benita Gabriel claimed sole
ownership of Lot 1 as her inheritance
from their father, Mateo Gabriel. The
property until 1949 was still declared in
the name Jose Gabriel despite the 1944
sale executed by Benita Gabriel in favor

of spouses Gabriel and Cornelia Sulit. As

to the alleged fraud perpetrated by Jose
Gabriel and respondents in securing
OCT No. 1035 in their name, this was
clearly not proven as Arturo Tanyag
testified merely that Jose Gabriel
borrowed their documents pertaining to
the property. No document or testimony
was presented to show that Jose Gabriel
employed
deceit
or
committed
fraudulent acts in the proceedings for
titling of the property.
However, the CA did not address the
issue of acquisitive prescription raised
by the petitioners. In their Complaint
before the lower court, petitioners
alleged
15. Defendants never occupied the whole
area of the lot covered by Tax
Declaration No. 1603 (686 sq. m.)
neither were they able to set foot on the
property covered by Tax Declaration No.
6542 [sic] for the reason that those lots
had been in actual, open continuous,
adverse and notorious possession of the
plaintiffs against the whole world for
more than thirty years which is
equivalent to title.
x x x x[37]
Such character and length of possession
of a party over a parcel of land subject of
controversy is a factual issue. Settled is
the rule that questions of fact are not
reviewable in petitions for review
on certiorari under Rule 45 of the Rules
of Court, as only questions of law shall
be raised in such petitions. While this
Court is not a trier of facts, if the
inference drawn by the appellate court
from the facts is manifestly mistaken, it
may, in the interest of justice, review the
evidence in order to arrive at the correct
factual conclusions based on the record.
[38]

In this case, the CA was mistaken in

concluding that petitioners have not
acquired any right over the subject

property simply because they failed to

establish Benita Gabriels title over said
property. The appellate court ignored
petitioners evidence of possession that
complies with the legal requirements of
acquiring ownership by prescription.
Acquisitive prescription is a mode of
acquiring ownership by a possessor
through the requisite lapse of time. In
order to ripen into ownership,
possession must be in the concept of an
owner,
public,
peaceful
and
uninterrupted.[39] Possession is open
when it is patent, visible, apparent,
notorious and not clandestine.[40] It is
continuous
when
uninterrupted,
unbroken and not intermittent or
occasional; exclusive when the adverse
possessor can show exclusive dominion
over the land and an appropriation of it
to his own use and benefit; and
notorious when it is so conspicuous that
it is generally known and talked of by
the public or the people in the
neighborhood. The party who asserts
ownership by adverse possession must
prove the presence of the essential
elements of acquisitive prescription.[41]
On the matter of prescription, the Civil
Code provides:
Art. 1117. Acquisitive prescription of
dominion and other real rights may be
ordinary or extraordinary.
Ordinary
acquisitive
prescription
requires possession of things in good
faith and with just title for the time fixed
by law.
Art. 1134. Ownership and other real
rights over immovable property are
acquired by ordinary prescription
through possession of ten years.
Art. 1137. Ownership and other real
rights over immovables also prescribe
through
uninterrupted
adverse
possession thereof for thirty years,
without need of title or of good
faith. (Emphasis supplied.)

Petitioners adverse possession is

reckoned from 1969 with the issuance of
TD No. 1145 in the name of Araceli
Tanyag, which tax declaration cancelled
TD No.6425 in the name of Jose Gabriel.
[42]
It is settled that tax receipts and
declarations are prima facie proofs of
ownership or possession of the property
for which such taxes have been paid.
Coupled with proof of actual possession
of the property, they may become the
basis of a claim for ownership.
[43]
Petitioners caretaker,
Juana
Quinones, has since lived in a nipa hut,
planted vegetables and tended a piggery
on the land. Aside from paying taxes due
on the property, petitioners also
exercised other acts of ownership such
as selling the 468-square meter portion
to Sta. Barbara who had constructed
thereon a nine-door apartment building.
It was only in 1979 that respondents
began to assert a claim over the property
by securing a tax declaration in the
name of Jose Gabriel albeit over a bigger
area than that originally declared. In
1998, they finally obtained an original
certificate of title covering the entire
1,763 square meters which included Lot
1. Did these acts of respondents
effectively interrupt the possession of
petitioners for purposes of prescription?
We answer in the negative.
In
the
case
of Heirs
of
Marcelina Azardon-Crisologo
v.
Raon[44] this Court citing Article 1123 of
the Civil Code[45] held that civil
interruption takes place with the service
of judicial summons to the possessor
and not by filing of a mere Notice of
Adverse Claim. Thus:
Article 1123 of the Civil Code is
categorical. Civil
interruption
is
produced by judicial summons to
the possessor. Moreover, even with
the presence of judicial summons,
Article 1124 sets limitations as to when

such summons shall not be deemed to

have been issued and shall not give rise
to interruption, to wit: 1) if it should be
void for lack of legal solemnities; 2) if
the plaintiff should desist from the
complaint or should allow the
proceedings to lapse; or 3) if the
possessor should be absolved from the
complaint.
Both Article 1123 and Article 1124 of the
Civil Code underscore the judicial
character of civil interruption. For civil
interruption to take place, the
possessor must have received
judicial summons. None appears in
the case at bar. The Notice of Adverse
Claim which was filed by petitioners in
1977 is nothing more than a notice of
claim which did not effectively interrupt
respondents possession. Such a notice
could
not
have
produced
civil
interruption. We agree in the conclusion
of the RTC, which was affirmed by the
Court of Appeals, that the execution of
the Notice of Adverse Claim in 1977 did
not toll or interrupt the running of the
prescriptive period because there
remains, as yet, a necessity for a judicial
determination
of
its
judicial
validity. What existed was merely a
notice. There was no compliance with
Article 1123 of the Civil Code. What is
striking is that no action was, in fact,
filed
by
petitioners
against
respondents. As a consequence, no
judicial summons was received by
respondents. As aptly held by the
Court of Appeals in its affirmance of the

RTCs ruling, the Notice of Adverse

Claim cannot take the place of judicial
summons which produces the civil
interruption provided for under the law.
In the instant case, petitioners were not
able to interrupt respondents adverse
possession since 1962. The period of
acquisitive prescription from 1962
continued to run in respondents
favor despite the Notice of Adverse
Claim. (Emphasis supplied.)
From 1969 until the filing of this
complaint by the petitioners in March
2000, the latter have been in
continuous,
public
and
adverse
possession of the subject land
for 31 years. Having
possessed
the
property for the period and in the
character required by law as sufficient
for
extraordinary
acquisitive
prescription, petitioners have indeed
acquired ownership over the subject
property. Such right cannot be defeated
by respondents acts of declaring again
the property for tax purposes in 1979
and obtaining a Torrens certificate of
title in their name in 1998.
This notwithstanding, we uphold
petitioners right as owner only with
respect to Lot 1 consisting of 686 square
meters. Petitioners failed to substantiate
their claim over Lot 2 by virtue of a deed
of sale from the original declared owner,
Agueda
Dinguinbayan. Respondents
asserted that the 147 square meters
covered by the tax declarations of
Dinguinbayan
being
claimed
by

petitioners is not the same lot included

in OCT No. 1035.
Under Article 434 of the Civil Code, to
successfully maintain an action to
recover the ownership of a real property,
the person who claims a better right to it
must prove two (2) things: first, the
identity of the land claimed; and second,
his title thereto. In regard to the first
requisite,
in
an accion
reinvindicatoria, the person who claims
that he has a better right to the property
must first fix the identity of the land he
is claiming by describing the location,
area and boundaries thereof.[46] In this
case, petitioners failed to identify Lot 2
by providing evidence of the metes and
bounds thereof, so that the same may be
compared with the technical description
contained in OCT No. 1035, which
would have shown whether Lot 2
consisting of 147 square meters was
erroneously included in respondents
title. The
testimony
of
Agueda
Dinguinbayans son would not suffice
because said witness merely stated the
boundary owners as indicated in the
1966 and 1967 tax declarations of his
mother.On his part, Arturo Tayag
claimed that he had the lots surveyed in
the 1970s in preparation for the
consolidation
of
the
two
parcels. However, no such plan was
presented in court.
WHEREFORE, the
petition
is PARTLY
GRANTED. The
Decision dated August 18, 2006 of the
Court of Appeals in CA-G.R. CV No.

81224 isMODIFIED in that petitioners

heirs of Bienvenido and Araceli Tanyag
are hereby declared the owners of 686
square meters previously declared under
Tax Declaration Nos. 11445, 120-01400486, 120-014-0085, B-014-00501, E014-01446, C-014-00893 and D-01400839 all in the name of Araceli Tanyag,
which lot is presently covered by OCT
No. 1035 issued by the Register of Deeds
of Pasig, Metro Manila in the name of
respondents Salome Gabriel, Nestor R.
Gabriel, Luz Gabriel-Arnedo, Nora
Gabriel-Calingo, Pilar Gabriel-Mendiola,
Minerva Gabriel-Natividad and Erlinda
Gabriel-Velasquez. Respondents
are
ORDERED to RECONVEY the said 686square meter portion to the petitioners.
No pronouncement as to costs.
SO ORDERED.