Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-30389 December 27, 1972

PEDRO LEE HONG HOK, SIMEON LEE HONG HOK, ROSITA LEE HONG HOK and LEONCIO LEE
HONG HOK, petitioners,
vs.
ANIANO DAVID, THE HON. SECRETARY OF AGRICULTURE AND NATURAL RESOURCES, THE
DIRECTOR OF LANDS and COURT OF APPEALS, respondents.

FERNANDO, J.:p

Petitioners 1 in this appeal by certiorari would have us reverse a decision of respondent Court of Appeals
affirming a lower court judgment dismissing their complaint to have the Torrens Title 2 of respondent Aniano
David declared null and void. What makes the task for petitioners quite difficult is that their factual support
for their pretension to ownership of such disputed lot through accretion was rejected by respondent Court of
Appeals. Without such underpinning, they must perforce rely on a legal theory, which, to put it mildly, is
distinguished by unorthodoxy and is therefore far from persuasive. A grant by the government through the
appropriate public officials 3 exercising the competence duly vested in them by law is not to be set at naught
on the premise, unexpressed but implied, that land not otherwise passing into private ownership may not be
disposed of by the state. Such an assumption is at war with settled principles of constitutional law. It cannot
receive our assent. We affirm.

The decision of respondent Court of Appeals following that of the lower court makes clear that there is no
legal justification for nullifying the right of respondent Aniano David to the disputed lot arising from the
grant made in his favor by respondent officials. As noted in the decision under review, he "acquired lawful
title thereby pursuant to his miscellaneous sales application in accordance with which an order of award and
for issuance of a sales patent was made by the Director of Lands on June 18, 1958, covering Lot 2892
containing an area of 226 square meters, which is a portion of Lot 2863 of the Naga Cadastre. On the basis of
the order of award of the Director of Lands the Undersecretary of Agriculture and Natural Resources issued
on August 26, 1959, Miscellaneous Sales Patent No. V-1209 pursuant to which OCT No. 510 was issued by the
Register of Deeds of Naga City to defendant-appellee Aniano David on October 21, 1959. According to the
Stipulation of Facts, since the filing of the sales application of Aniano David and during all the proceedings in
connection with said application, up to the actual issuance of the sales patent in his favor, the plaintiffs-
appellants did not put up any opposition or adverse claim thereto. This is fatal to them because 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.... Under Section 38 of Act 496 any question concerning the validity of the
certificate of title based on fraud should be raised within one year from the date of the issuance of the patent.
Thereafter the certificate of title based thereon becomes indefeasible.... In this case the land in question is not
a private property as the Director of Lands and the Secretary of Agriculture and Natural Resources have
always sustained the public character thereof for having been formed by reclamation.... The only remedy
therefore, available to the appellants is an action for reconveyance on the ground of fraud. In this case we do
not see any fraud committed by defendant-appellant Aniano David in applying for the purchase of the land
involved through his Miscellaneous Sales Application No. MSA-V-26747, entered in the records of the Bureau
of Lands [Miscellaneous Sales] Entry No. V-9033, because everything was done in the open. The notices
regarding the auction sale of the land were published, the actual sale and award thereof to Aniano David
were not clandestine but open and public official acts of an officer of the Government. The application was
merely a renewal of his deceased wife's application, and the said deceased occupied the land since 1938." 4

On such finding of facts, the attempt of petitioners to elicit a different conclusion is likely to be attended with
frustration. The first error assigned predicated an accretion having taken place, notwithstanding its rejection
by respondent Court of Appeals, would seek to disregard what was accepted by respondent Court as to how
the disputed lot came into being, namely by reclamation. It does not therefore call for any further
consideration. Neither of the other two errors imputed to respondent Court, as to its holding that
authoritative doctrines preclude a party other than the government to dispute the validity of a grant and the
recognition of the indefeasible character of a public land patent after one year, is possessed of merit.
Consequently, as set forth at the outset, there is no justification for reversal.

1. More specifically, the shaft of criticism was let loose by petitioner aimed at this legal proposition set forth
in the exhaustive opinion of then Justice Salvador Esguerra of the Court of Appeals, now a member of this
Court: "There is, furthermore, a fatal defect of parties to this action. Only the Government, represented by
the Director of Lands, or the Secretary of Agriculture and Natural Resources, can bring an action to cancel a
void certificate of title issued pursuant to a void patent (Lucas vs. Durian, 102 Phil. 1157; Director of Lands
vs. Heirs of Ciriaco Carlo, G.R. No. L-12485, July 31, 1959). This was not done by said officers but by private
parties like the plaintiffs, who cannot claim that the patent and title issued for the land involved are void since
they are not the registered owners thereof nor had they been declared as owners in the cadastral proceedings
of Naga Cadastre after claiming it as their private property. The cases cited by appellants are not in point as
they refer to private registered lands or public lands over which vested rights have been acquired but
notwithstanding such fact the Land Department subsequently granted patents to public land applicants." 5
Petitioner ought to have known better. The above excerpt is invulnerable to attack. It is a restatement of a
principle that dates back to Maninang v. Consolacion, 6 a 1908 decision. As was there categorically stated:
"The fact that the grant was made by the government is undisputed. Whether the grant was in conformity
with the law or not is a question which the government may raise, but until it is raised by the government and
set aside, the defendant can not question it. The legality of the grant is a question between the grantee and the
government." 7 The above citation was repeated ipsissimis verbis in Salazar v. Court of Appeals. 8 Bereft as
petitioners were of the right of ownership in accordance with the findings of the Court of Appeals, they
cannot, in the language of Reyes v. Rodriguez, 9 "question the [title] legally issued." 10 The second assignment
of error is thus disposed of.

2. As there are overtones indicative of skepticism, if not of outright rejection, of the well-known distinction in
public law between the government authority possessed by the state which is appropriately embraced in the
concept of sovereignty, and its capacity to own or acquire property, it is not inappropriate to pursue the
matter further. The former comes under the heading of imperium and the latter of dominium. The use of this
term is appropriate with reference to lands held by the state in its proprietary character. In such capacity, it
may provide for the exploitation and use of lands and other natural resources, including their disposition,
except as limited by the Constitution. Dean Pound did speak of the confusion that existed during the medieval
era between such two concepts, but did note the existence of res publicae as a corollary to dominium." 11 As far
as the Philippines was concerned, there was a recognition by Justice Holmes in Cariño v. Insular Government,
12
a case of Philippine origin, that "Spain in its earlier decrees embodied the universal feudal theory that all
lands were held from the Crown...." 13 That was a manifestation of the concept of jura regalia, 14 which was
adopted by the present Constitution, ownership however being vested in the state as such rather than the
head thereof. What was stated by Holmes served to confirm a much more extensive discussion of the matter
in the leading case of Valenton v. Murciano, 15 decided in 1904. One of the royal decrees cited was
incorporated in the Recopilacion de Leyes de las Indias 16 in these words: "We having acquired full
sovereignty over the Indies and all lands, territories, and possessions not heretofore ceded away by our royal
predecessors, or by us, or in our name, still pertaining to the royal crown and patrimony, it is our will that all
lands which are held without proper and true deeds of grant be restored to us according as they belong to us,
in order that after reserving before all what to us or to our viceroys audiences, and governors may seem
necessary for public squares, ways, pastures, and commons in those places which are peopled, taking into
consideration not only their present condition, but also their future and their probable increase, and after
distributing to the natives what may be necessary for tillage and pasturage, confirming them in what they
now have and giving them more if necessary, all the rest of said lands may remain free and unencumbered for
us to dispose of as we may wish." 17

It could therefore be affirmed in Montano v. Insular Government" 18 that "as to the unappropriated public
lands constituting the public domain the sole power of legislation is vested in Congress, ..." 19 They continue to
possess that character until severed therefrom by state grant. 20 Where, as in this case, it was found by the
Court of Appeals that the disputed lot was the result of reclamation, its being correctly categorized as public
land is undeniable. 21 What was held in Heirs of Datu Pendatun v. Director of Lands 22 finds application. Thus:
"There being no evidence whatever that the property in question was ever acquired by the applicants or their
ancestors either by composition title from the Spanish Government or by possessory information title or by
any other means for the acquisition of public lands, the property must be held to be public domain." 23 For it
is well-settled "that no public land can be acquired by private persons without any grant, express or implied,
from the government." 24 It is indispensable then that there be a showing of a title from the state or any other
mode of acquisition recognized by law. 25 The most recent restatement of the doctrine, found in an opinion of
Justice J.B.L. Reyes, follows: 26 "The applicant, having failed to establish his right or title over the northern
portion of Lot No. 463 involved in the present controversy, and there being no showing that the same has
been acquired by any private person from the Government, either by purchase or by grant, the property is
and remains part of the public domain." 27 To repeat, the second assignment of error is devoid of merit.

3. The last error assigned would take issue with this portion of the opinion of Justice Esguerra: "According to
the Stipulation of Facts, since the filing of the sales application of Aniano David and during all the
proceedings in connection with said application, up to the actual issuance of the sales patent in his favor, the
plaintiffs-appellants did not put up any opposition or adverse claim thereto. This is fatal to them because
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 ... Under Section 38 of Act 496 any question concerning the validity of the
certificate of title based on fraud should be raised within one year from the date of the issuance of the patent.
Thereafter the certificate of title based thereon becomes indefeasible ..." 28 Petitioners cannot reconcile
themselves to the view that respondent David's title is impressed with the quality of indefeasibility. In thus
manifesting such an attitude, they railed to accord deference to controlling precedents. As far back as 1919, in
Aquino v. Director of
Lands, 29 Justice Malcolm, speaking for the Court, stated: "The proceedings under the Land Registration
Law and under the provisions of Chapter VI of the Public Land Law are the same in that both are against the
whole world, both take the nature of judicial proceedings, and for both the decree of registration issued is
conclusive and final." 30 Such a view has been followed since then. 31 The latest case in point is Cabacug v. Lao.
32
There is this revealing excerpt appearing in that decision: "It is said, and with reason, that a holder of a
land acquired under a free patent is more favorably situated than that of an owner of registered property.
Not only does a free patent have a force and effect of a Torrens Title, but in addition the person to whom it is
granted has likewise in his favor the right to repurchase within a period of five years." 33 It is quite apparent,
therefore, that petitioners' stand is legally indefensible.

WHEREFORE, the decision of respondent Court of Appeals of January 31, 1969 and its resolution of March
14, 1969 are affirmed. With costs against petitioners-appellants.

Concepcion, C.J., Makalintal, Zaldivar, Castro, Teehankee Barredo, Makasiar, Antonio and Esguerra, JJ.,
concur.

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION
G.R. No. 57667 May 28, 1990

SAN MIGUEL CORPORATION, petitioner,

vs.
COURT OF APPEALS and DIRECTOR OF LANDS, respondents.

Ciriaco Lopez, Jr. & Associates for petitioner.

FERNAN, C.J.:

In this petition for review on certiorari, San Miguel Corporation seeks the reversal of the decision of the
Court of Appeals 1 denying its application for registration of a parcel of land in view of its failure to show
entitlement thereto.

On December 23, 1975, petitioner San Miguel Corporation (SMC for brevity) purchased from Silverio Perez
Lot 684, a 14,531 square-meter parcel of land located in Sta. Anastacia, Sto. Tomas, Batangas, in
consideration of the sum of P133,084.80. 2 On February 21,1977, claiming ownership in fee simple of the land,
SMC filed before the then Court of First Instance, now Regional Trial Court of Batangas an application for
its registration under the Land Registration Act.

The Solicitor General, appearing for the Republic of the Philippines, opposed the application for registration
contending that SMC's claim of ownership in fee simple on the basis of a Spanish title or grant could no
longer be availed of by the applicant as the six-month period from February 16, 1976 prescribed by
Presidential Decree No. 892 had elapsed; that the parcel of land in question is part of the public domain, and
that SMC, being a private corporation, is disqualified under Section 11, Article XIV of the Constitution from
holding alienable lands of the public domain. The Solicitor General thereafter authorized the Provincial
Fiscal of Batangas to appear in said case, subject to his supervision and control.

At the initial and only hearing held on October 12, 197 7, the Court, upon motion of SMC and there being no
opposition to the application except that of the Republic of the Philippines, issued an order of general default.
SMC was allowed to mark documentary evidence to establish jurisdictional facts and to present additional
evidence before the Clerk of Court who was appointed Commissioner for that purpose.

On December 12, 1977, the lower court, presided by Judge Eduardo C. Abaya, rendered a decision granting
the application for registration and adjudicating the property in favor of SMC.

The Solicitor General appealed to the Court of Appeals. In its decision of March 23, 1981, said court reversed
the decision of the lower court and declared the parcel of land involved as public land. Hence, the instant
petition with SMC submitting the following alleged "grave errors" of the Court of Appeals for this Court's
resolution: (1) the Court of Appeals' failure to hold that "prescription is a mode of acquiring title or
ownership of land and that the title thus acquired is registrable"; (2) the Court of Appeals' disregard of
SMC's evidence "not on the basis of controverting evidence but on the basis of unfounded suppositions and
conjectures," and (3) the Court of Appeals' reversal of the factual findings of the trial court which had the
opportunity of observing the demeanor and sincerity of the witnesses. 3

We need not dwell lengthily on the third "error" assigned by petitioner. Suffice it to state that while trial
courts may have the opportunity to observe the demeanor of witnesses, their factual findings may nonetheless
be reversed by the Court of Appeals, the appellate court vested by law to resolve both legal and factual issues,
if, by the evidence on record, it appears that the trial court involved erred. What is of primary concern to us
in this case is the issue of whether or not the evidence presented by the petitioner is sufficient to warrant a
ruling that SMC and/or its predecessor-in-interest has a registrable right over Lot 684.
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. 4 Such open, continuous,
exclusive and notorious occupation of the disputed properties for more than 30 years must, however, be
conclusively established. 6 This quantum of proof is necessary to avoid the erroneous validation of actually
fictitious claims of possession over the property in dispute.

In this case, petitioner's claim that its predecessor-in-interest had open, exclusive and undisputed possession
of Lot 684 for more than thirty years is anchored on certain documentary and testimonial evidence. Its
documentary evidence consist of tax declaration No. 923 wherein it appears that in 1974, Silverio Perez
declared as his own for taxation purposes, a certain riceland with an area of 1.5657 hectares located in Sta.
Anastacia, Sto. Tomas, Batangas, 6 and a certification of the Office of the Treasurer of Sto. Tomas to the
effect that in 1977, Silverio Perez paid realty taxes for the land subject of tax declaration no. 923. 7

Tax declarations and receipts are not conclusive evidence of ownership or right of possession over a piece of
land. 8 They are merely indicia of a claim of ownership. 9 Tax declarations only become strong evidence of
ownership of land acquired by prescription, a mode of acquisition of ownership relied upon by petitioner in
this case, when accompanied by proof of actual possession. 10

Such proof of actual possession was sought to be provided by the testimony of vendor Silverio Perez that he
had been in possession of the property since 1933 until he sold it to SMC in 1975; that the property was given
to him by his parents when he got married; that no document evidenced that transfer; that it had been in the
possession of his parents since 1925; that he had declared the property in his name for taxation purposes; that
he had paid taxes therefor, and that he was in peaceful, continuous and exclusive possession of the property
until its sale to SMC. 11

Petitioner did not present other witnesses to corroborate Perez' testimony. Its other witness, Antonio M. de
las Alas, Jr., a lawyer of the petitioner, simply testified that he handled the negotiations for the purchase of
the property; that SMC was authorized to own and acquire property as shown by its articles of incorporation
and by-laws; that since its acquisition in 1975, the property had been used as a hatchery farm of SMC; that
SMC's possession in the concept of an owner had been continuous, adverse and against the whole world, and
that the land was declared for taxation purposes still in the name of Silverio Perez . 12

We hold that there is paucity of evidence of actual, notorious and exclusive possession of the property on the
part of vendor Silverio Perez so as to attach to it the character of an express grant from the govemment. 13
Indeed, as correctly held by the Court of Appeals, Silverio Perez's testimony, being uncorroborated, is simply
self-serving and hence, undeserving of any weight.

WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED. Costs against the petitioner.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 85322 April 30, 1991

ALFREDO M. ALMEDA, LEONARDO M. ALMEDA and ERNESTO M. ALMEDA, petitioners,
vs.
HON. COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES, representative represented by
THE DIRECTOR OF LANDS, respondents.

Leonardo M. Almeda for petitioners.

GRIÑO-AQUINO, J.:p

This petition for review assails the Court of Appeals' decision dated May 9, 1988 in CA-G.R. No. 09309-
CV reversing the judgment dated January 6, 1986 of the Regional Trial Court in LRC Case No. N-10771
entitled, "Alfredo M. Almeda, Leonardo M. Almeda and Ernesto M. Almeda, Applicants versus Republic of
the Philippines, represented by the Director of Lands, Oppositor."

The case involves a parcel of land with an area of 1,208 square meters located in Barrio Pampangin
Pateros, Rizal, and described in Survey Plan Psu-128539. It was originally owned and possessed by
Emiliano Almeda, father of the petitioners, by virtue of an "Escritura de Particion Extrajudicial" (Exh. G)
executed on June 15, 1935, between him and his brother Adriano wherein they attested the fact that the
land in question was inherited from their parents, Vedasto Almeda and Josefa C. Concepcion, who had
inherited the same from their own parents (great-grandparents of herein petitioners).

After Emiliano's death on May 1, 1948 at the age of 67, his wife, Ana Menguito and their children received
the produce of the land and rented out to third persons portions of the property where Emiliano had three
houses built. Upon Ana's death on April 3, 1950, her children with Emiliano inherited the property and the
lessees moved out. On June 9, 1980, the brothers Alfredo, Leonardo and Ernesto executed an
extrajudicial partition adjudicating the land to themselves (Exh. J).

On September 12, 1984, the Almeda brothers applied for the registration of the land in the Regional Trial
Court of Pasig, Branch CLVI, where the case was docketed as LRC Case No. N-10771, LRC Record No.
N-58761 entitled, "Alfredo M. Almeda, Leonardo M. Almeda and Ernesto M. Almeda, Applicants." Their
application was set for hearing on December 20, 1984. The notice of hearing dated October 10, 1984 was
duly published in the Official Gazette and posted by the deputy sheriff.

On the date of the hearing, no one appeared to oppose the application except the Director of Lands,
through the Solicitor General, who had earlier filed a formal opposition. An order of general default was
issued against the whole world, except the aforementioned oppositor, and the case was set for hearing.

The report of the Bureau of Lands stated that the land is not included in any military area or naval
reservation nor is it covered by any land patent or public land application. The Land Registration
Commission Report also stated that Plan Psu-128539, when plotted in the Municipal Index map, does not
overlap with any previously plotted titled properties under Act 496 as amended by PD 1525, and that the
survey books do not show that the subject lot had been applied for except in this case.

The Director of Lands, through the Office of the Solicitor General, presented Corazon Calamno senior
forester of the Bureau of Forest Development, who stated that she prepared the inspection report on
November 26, 1984; that the land fags within the alienable and disposable land under Project No. 29 of
Pateros, Metro Manila, as per BFD Map LC 2623, certified and declared as such on January 23, 1968.

The Court found that the applicants' possession of the parcel of land sought to be registered, together
with that of their predecessors-in-interest, has been public, peaceful, continuous, adverse to the whole
world and in the concept of an owner for a period of more than thirty (30) years, and, that the land is not
located within any forest reservation nor mortgaged or encumbered in favor of any person or lending
institution.

In a decision dated January 18, 1986, the trial court affirmed the order of general default and confirmed
the title of the applicants to the parcel of land covered by the plan, Psu-128539, and ordered its
registration in the names of Alfredo, Leonardo and Ernesto Almeda pro-indiviso (pp. 42-45, Rollo).

From that decision, the Republic of the Philippines, represented by the Solicitor General, appealed to the
Court of Appeals in CA-G.R. CV No. 09309, alleging that the applicants-appellees have not met the
statutory requirements on possession under Section 48(b) of CA 141, mainly because the land applied for
was inalienable forest land before its release as alienable and disposable land on January 3, 1968. The
applicants' possession thereof prior to January 3, 1968 was invalid for purposes of a grant under Section
48(b) of the Public Land Act.

The Court of Appeals, in a decision dated May 9, 1988, reversed the lower court and denied the
application for registration. It held that private respondents had not qualified for a grant under Section
48(b) of Commonwealth Act 141 which requires public, peaceful, continuous, adverse possession by the
applicants in the concept of an owner, for a period of at least 30 years. They have to their credit only
seventeen (17) years possession and occupation of the land, counted from January 23, 1968, when it
was declared alienable and disposable, up to September 12, 1984, when their application for registration
was filed.

After their motion for reconsideration was denied by the Court of Appeals, the applicants filed this petition
for review under Rule 45 of the Rules of Court.

Petitioners allege that the Court of Appeals erred:

1. in not holding that the land, classification made by the Director of Forestry (Bureau of Forest
Development) could not affect the vested rights of the applicants and their predecessors-in-interest who
had continuously occupied and profited from the land since 1918 or very much earlier, as in this case; and

2. in denying the motion for reconsideration despite the ruling in "The Director of Lands vs. The
Honorable Court of Appeals and Iglesia ni Cristo," 158 SCRA 568 promulgated on March 14, 1988, which
allowed registration even when the land applied for was within the proposed alienable or disposable block
of a proposed LC project.

There is no merit in the petition.

The Court of Appeals correctly ruled that the private respondents had not qualified for a grant under
Section 48(b) of the Public Land Act because their possession of the land while it was still inalienable
forest land, or before it was declared alienable and disposable land of the public domain on January 13,
1968, could not ripen into private ownership, and should be excluded from the computation of the 30-year
open and continuous possession in concept of owner required under Section 48(b) of Com. Act 141. It
accords with our ruling in Director of Lands vs. Court of Appeals, Ibarra Bishar et al., 178 SCRA 708, that:

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 Amunategai vs. Director of
Forestry, 126 SCRA 69; Director of Lands vs. Court of Appeals, 129 SCRA 689; Director
of Lands vs. Court of Appeals, 133 SCRA 701; Republic vs. Court of Appeals, 148 SCRA
480; Vallarta vs. Intermediate Appellate Court, 151 SCRA 679).
 Thus, possession of forest lands, however long, cannot ripen into private ownership
(Vamo vs. Government, 41 Phil. 161 [1920]; Adorable vs. Director of Forestry, 107 Phil.
401 [1960]). A parcel of forest land is within the exclusive jurisdiction of the Bureau of
Forestry and beyond the power and jurisdiction of the cadastral court to register under
the Torrens System (Republic vs. Court of Appeals, 89 SCRA 648; Republic vs. Vera,
120 SCRA 210 [19831; Director of Lands vs. Court of Appeals, 129 SCRA 689 [1984]).

The petitioners have erroneously cited our decisions in Director of Forestry vs. Villareal, 170 SCRA 598
and Republic vs. Court of Appeals, Miguel Marcelo, et al., 168 SCRA 77, in support of their position in this
case. In those cases, the applicants' possession of the land antedated its classification as forest land. We
held that such lands could not be retroactively legislated or classified as forest lands because it would
violate previously acquired property lights protected by the due process clause of the Constitution.

The situation of the land in this case is the reverse of the Villareal and Marcelo cases. The land here was
already forest land when occupied by the petitioners but it was later released on January 23, 1968 from
its forest classification. In other words, the petitioners here occupied forest land before it was released as
alienable and disposable, while the applicants in the Villareal and Marcelo cases possessed parcels of
land long before they were reserved as forest land. The subsequent reservation did not prejudice their
vested rights therein.

Petitioner's recourse to the decision of this Court in Director of Lands vs. Court of appeals and Iglesia Ni
Cristo, 158 SCRA 568, is inappropriate. That case did not involve forest land, but agricultural land of the
public domain within the proposed alienable or disposable block.

WHEREFORE, the petition for review is denied for lack of merit. Costs against the petitioners.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-48066 January 31, 1989

THE DIRECTOR OF LANDS, petitioner-appellee,

vs.
KALAHI INVESTMENTS, INC., claimant-appellant.

The Solicitor General for petitioner-appellee.

Martin N. Roque for claimant-appellant

MEDIALDEA, J.:

This is an appeal from the decision of the Court of First Instance (now Regional Trial Court) of Pampanga,
1
denying the application of Kalahi Investments, Inc. (Kalahi, for short) for registration of Lot No. 1851-B of
the Floridablanca Cadastre, certified to this Court by the Court of Appeals on January 11, 1978 on the
following legal questions:
 Do mining claims, acquired, registered, perfected acted, and patentable under the Old
Mining Law, mature to private ownership which would entitle the claimant-applicant to the
ownership thereof?

Which agency has the authority to examine, process and find out whether or not the
requirements of the Act of Congress of 1902 have been complied with, by the applicant
— the courts or the Bureau of Mines?

In its decision, the Court of Appeals found the following facts to be established by the evidence:

On December 12, 1963, Kalahi Investment, Inc. moved for an advanced hearing of Lot
No. 1851-B, Floridablanca Cadastre. Evidence was presented and Kalahi's title was to be
registered under the provisions of Act 496. (p. 355, Record on Appeal)

xxx xxx xxx

It was later on disclosed that Lot No. 1851 was a vast land of mountain ranges containing
an area of no less than 886,021,588 square meters. Kalahi's present claim, otherwise
known as Lot No. 1851-B is graphically shown in the Plan, Annex A of the Report of the
Commissioner shaded in orange color, which Report was made during the pendency of
this case for trial. The alleged claim of 123 mineral claims are inside this portion. The
very plan of the Commissioner labelled this portion as Project No. 11, Forest Reserve,
Proc. No. 82, dated August 8, 1966, under Republic Act No. 3092, labelled "timber land"
also designated as Lot 2 in said Commissioner's Report.

In the land classification, province of Pampanga and province of Zambales, dated May
26, 1960, known as Exhibit 4, Director of Forestry, these lands were also considered part
of the Project No. 11, Timber Land. (pp. 356-357, Record on Appeal)

xxx xxx xxx

The Bureau of Forestry's opposition is based on the ground that these lands are part of
the vast public forest, known as TIMBER LAND of Project No. 11, Exhibit 4, Director of
Forestry. Until now these lands are not released by the proper authorities as alienable
agricultural lands; instead on August 9, 1966, the President of the Philippines issued
Proclamation No. 82, declaring these lands as part of the Mt. Dorst Forest Reserve.
Other reservations are also existing in these areas for the so-called minorities, the
Negritos. (p. 359, Record on Appeal).

xxx xxx xxx

Kalahi abandoned its former claim over the entire area of Lot No. 1851-B, covering an
area of 886,021,588 square meters (Psd-2387-D). It limited its present claim to 1,730
hectares, known as Lot No. 1 of Plan Sgs-3690, a portion of Lot 2210, Floridablanca
Cadastre, formerly a part of Lot No. 1851-B. It is in this Lot No. 1 of Plan Sgs-3690, with
an area of 1284 -2340 hectares, and in lot No. 2, with an area of 446.0870 hectares,
giving a total of 1,720 hectares where the alleged 123 lode mining claims are said to be
existing and where the alleged 500,000 coffee plants were planted. (p. 360, Record on
Appeal)

Kalahi presented evidence to support perfected mining rights over the 123 mineral claims, viz., that it had
located in 1934 and prior thereto 123 mineral claims in Floridablanca mountains; made annual
assessment work thereto; made declaration of location and paid annual assessment work from 1965-
1966; constructed roads traversing the mountains and hills, and planted 500,000 coffee trees. These
were, however, not considered by the court a quo as basis sufficient in law and in fact for the registration
of title under act 496.

Kalahi thus contends that these mineral lands are now segregated from the government lands and its
mining claims thereon, deemed property rights, based on the following opinion of the Secretary of Justice
No. 52, Series of 1956, dated August 31, 1956, viz:

xxx xxx xxx

The legal effect of a valid location of a mining claim is not only to segregate the area from
the public domain, but to grant to the locator the beneficial ownership of the claim and the
right to a patent therefore upon compliance with the terms and conditions prescribed by
law. Where there is a valid location of the mining claim, the area becomes segregated
from the public domain and becomes the property of the locator.' (St. Louis Mining &
Milling Co. vs. Montana Mining Co., 171 U.S. 650,855,43 Law Ed., 320,323.) When a
location of a mining claim is perfected it has the effect of a grant by the United States of
the right of present and exclusive possession with the right to the exclusive enjoyment of
all the surface ground as well as of all the minerals within the lines of the claim, except as
limited by the extralateral rights of adjoining locators; and this is the locator's right before
as well as after the issuance of the patent.' (Emphasis supplied) (p. 376, Record on
Appeals)

and the decision of the Court of Appeals in the case of San Mauricio Mining Co., Inc. vs. Dantoy, et. al.
(C.A. No. 22274-R, dated March 23, 1963, 60 O.G. No. 3, p. 367):

MINING LAW; MINING CLAIM; Right perfected under Act of Congress of 1902 is
exclusive against whole world-Under the Act of Congress of 1902, otherwise known as
the Philippine Bill, a right or rights acquired by a holder of unpatented but valid and
existing claim located and registered under its provisions becomes the property of the
locator. The moment the locator discovered some valuable mineral deposits on the land
located and proved that such location was in accordance with the rules and regulations,
the land located becomes mineral land and is segregated from the public domain. The
right of the locator to enjoy the surface ground and the minerals within the limits of his
claim becomes exclusive as against the whole world, limited only by the extralateral
rights of adjoining locators. He is not required to purchase the claim or secure a patent
and as long as he could comply with the mining laws, his possessory rights of ownership
is as good as though secured by patent (Wilbur v. U.S. rel. Krusnic, 230 U.S. 306, 74
Law Ed. 455; Salakot Mining Co. vs. Rodriguez, 67 Phil. 97). (Emphasis supplied) (cited
in the Record on Appeal, p. 372)

Likewise, it claims registration of title based on its actual, open, public, peaceful,
continuous, adverse possession in the concept of an owner for more than 30 years, or
confirmation of imperfect title under Sec. 48(b) CA141, as amended by RA No. 1942.

In its decision dated September 17, 1980 the court a quo denied the claim for
registration, ruling that a) the 123 mineral lode claims are governed by the mining laws;
hence, under the jurisdiction of the Bureau of Mines which is the proper agency to
enforce the claims and to adjudicate the rights of claimants, which in fact, Kalahi
recognized when it filed an application for lease with said Bureau, and b) that the claim
for confirmation of imperfect title can not be sustained, based on the evidence and the
Public Land Law provisions:
 xxx xxx xxx

... The lands in the public domain are classified under three main categories: Mineral,
Forest and Agricultural Lands. It is only on agricultural lands in the public domain that title
could be issued either under administrative proceedings by application in the Bureau of
Lands or under compulsory proceedings under Cadastral Act or ordinary proceedings
under Act 496. The Public Law never governs private lands (Susi vs. Razon, 41 Phil.
420). These lands are never private lands either.

The Public Land Law (Commonwealth Act 141) is not applicable to forest lands nor to
mineral lands. These lands are covered by separate laws. The confirmation of imperfect
title under the Public Land Law can not be made the basis for registration of titles over
forest (Vano vs. Government of the P.I., 41 Phil. 161) and/or mineral lands (Li Seng Giap
y Cia vs. Director, 55 Phil. 963). (p. 368, Record on Appeal)

Kalahi's motion for reconsideration, filed on October 15, 1970, was denied on November
15, 1970.

On appeal, Kalahi invoked anew its vested rights over the mining claims, having been
perfected and registered under the Act of Congress of 1902, and its consequent
ownership, exclusive even as against the government.

It assigned as errors the following:

The lower court erred in not considering the basis for the registration of the land in
question sufficient in law and in fact.

II

The lower court erred in declaring that the doctrine of the Supreme Court and the opinion
of the Secretary of Justice never contemplate of a procedure that will entitle the claimants
to the registration of the land in question.

III

The lower court erred in denying the claim for registration of the claimant's title over the
land in question at least a portion thereof covered by the mining claims and their gaps.'
(pp. 5- 6, CA decision)

On the other hand, the Director of Lands contended:

As regards the first, it is admitted by Kalahi that the land in question is a mining property
consisting of mining claims located and registered under the provisions of the Act of the
U.S. Congress of July 1, 1902 (Cf. Kalahi's Petition for Admission of Attached Answer
and for Advanced Hearing,' pp. 2-9, Record on Appeal). Such being the case, said Act
requires Kalahi as holder of the mining claims to do no other act except to proceed with
the acquisition of mining patents in the Bureau of Mines, which is the proper agency in
the Administrative Branch of the government entrusted by law (C.A. 137, the Mining Law)
to determine the qualifications of said claimant, and to examine, process and find out
whether or not the requirements of the Act of Congress of 1902 are complied with. Said
 Act does not contemplate a situation where titles covering mining claims should be
secured from the Judicial Branch of the government thru the process of land registration
or cadastral proceedings. In other words, the Act of the U.S. Congress prescribes an
explicit and definite procedure by which mining patents are to be secured administratively
after which when registered under Section 122 of the Land Registration Act, said mining
patents are transcribed into original certificates of title. (pp. 6-7, Appellee's Brief, p. 115,
Rollo)

The Court of Appeals has thus certified the following questions for our resolution:

a) Are mining claims acquired, registered, perfected, and patentable under the Old
Mining Law matured to private ownership that would entitle the claimant-appellant to the
ownership thereof.? (Appellants' Brief, p. 13)

b) Who has authority to examine, process, and find out whether or not the requirements
of the Act of Congress of 1902 have been complied by the applicant-the court or the
Bureau of Mines? (Appellants' (sic) should be Appellee's Brief, p. 7)

In the recent case of Santa Rosa Mining Co., Inc. vs. Hon. Minister of Natural
Resources Jose J. Leido, Jr. and Director of Mines Juanito C Fernandez. (G.R. No. L-
49109, dated Dec. 1, 1987), this Court ruled that while it is recognized that the right of a
locator of a mining claim is a property right, "this right is not absolute. It is merely a
possessory right ... , more so where petitioner's claims are still unpatented ... ,"
(Emphasis supplied), viz:

xxx xxx xxx

'Mere location does not mean absolute ownership over the affected land or the located
claim. It merely segregates the located land or area from the public domain by barring
other would be locators from locating the same and appropriating for themselves the
minerals found therein. To rule otherwise would imply that location is all that is needed to
acquire and maintain rights over a located mining claim. This, we cannot approve or
sanction because it is contrary to the intention of the lawmaker that the locator should
faithfully and consistently comply with the requirements for annual work and
improvements in the located mining claims. (Emphasis supplied)

The aforecited ruling modifies the San Mauricio doctrine cited by petitioner, in that while
a perfected location of a mining claim has the effect of segregating said land from the
body of public domain, the area covered does not thereby become the private property
of the locator. There must be evidence of full, faithful compliance with the requirements
of law.

Noteworthy in this regard is the concurring opinion of Justice Jose P. Laurel in the case
of Gold Creek Mining Corp. vs. E. Rodriguez and Q. Abadilla (66 Phil. 259), upholding
the property rights of a valid location of a mining claim, viz:

But while I regard the recognition and protection of the right here invoked inevitable, I feel
constrained to withhold my assent to the invocation of the case of McDaniel vs. Apacible
and Cuisia [1922], 42 Phil. 749), insofar as citation thereof may imply unqualified
acceptance of or adherence to the broad rule that where there is a valid and perfected
location of a mining claim, the area covered is not only thereby segregated from the body
 of the public domain but becomes the private property of the locator. My opinion is that
while the locator, under the circumstances, secures the beneficial ownership or the
dominium utile the government retains the bare ownership or the dominium directum until
the locator's claim ripens into full ownership upon full compliance with all the
requirements of the law for the issuance of a patent.

The dissenting opinion of Justice Pedro Concepcion in the Gold Creek Mining Corp.
case, insofar as pertinent, is worthy of mention:

Location should only be understood as segregating the land located from the public
domain in the sense that it is no longer open to location or susceptible of appropriation by
another, while the locator has not lost his right to or abandoned the mining claim. To give
a broader meaning and a greater effect to the location of a mining claim is to contend —
against the express provisions of Sections 36, 37 and 39 of the Act of Congress of July 1,
1902, as amended by Section 9 of another Act of Congress of February 6, 1905, — that
location is all that is necessary to acquire absolute ownership over a located mining
claim. This is not the law. From the location of a claim to the issuance of the patent for or
title to the land, is a far cry. Location, without more, confers only the right of possession.
thus Section 36 of the Act of Congress of February 6, 1905 refers to the manner of
recording, and amount of work necessary to hold possession of a mining claim. Section
39 of the same Act also speaks of the right of possession of the claim, and the right to the
issuance of a patent only arises after the execution of certain works and acts prescribed
by law, such as labor or description and Identification of the land by means of plat and
field notes (Sec. 37); the notice of publication of the application for a patent by the
locator, etc., etc., (Sec. 37). . . . (pp. 273-274, Rollo)

. . . I gather from the majority opinion that, as long as the location of the mining claim was
perfected before the inauguration of the new Government of the Philippines on November
15, 1935, the other conditions may be complied with even after said date in order that the
locator may acquire a right to the patent. I dissent on this fundamental point from the
majority opinion. I maintain that in prohibiting the alienation of natural resources, save
any existing right, the Constitution does not refer to the right of location or to the inherent
right of possession, or to any inchoate or contingent right which are only a means to bring
about another right; it refers only to the right to obtain a patent. And inasmuch as this
right cannot be acquired until after compliance with all the conditions prescribed by law, it
is evident that the prescribed conditions should be complied with before the inauguration
of the Commonwealth. (Emphasis supplied) (p. 274, Rollo)

It is not clear if claimant Kalahi has fully complied with the requirements of the Act of
Congress of 1902. This is a factual issue which is not within the scope of our
jurisdiction. Nonetheless, even assuming claimant to be a holder of a subsisting and
valid patentable mining claim, we hold that it can no longer proceed with the acquisition
of a mining patent in view of P.D. No. 1214, issued on October 14, 1977, directing
"holders of subsisting and valid patentable mining claims, lode or placer, located under
the provisions of the Act of Congress of July 1, 1902, as amended, to file a mining lease
application ... within one year from the approval of the Decree and upon the filing
thereof, holders of said claims shall be considered to have waived their rights to the
issuance of mining patents therefor: Provided, however, That the non-filing of the
application for mining lease by the holders thereby within the period herein prescribed
shall cause the forfeiture of all his rights to the claim.'
The constitutionality of P.D. No. 1214 was upheld in the case of Santa Rosa Mining Co.,
supra, as a "valid exercise of the sovereign power of the state as owners over lands of
the public domain of which petitioner's mining claims still form a part, and over the
patrimony of the nation, of which mineral deposits are a valuable asset."

The records show that claimant has already filed a mining lease application (p. 357,
Record on Appeal). Its mining claims, therefore, are deemed covered by P.D. 1214, and
the Bureau of Mines may, accordingly process the same as a lease application, in
accordance with P.D. 463, pursuant to Sec. 2 of P.D. No. 1214. It is understood of
course that prior to the approval of the lease application, the applicant must show that it
has fully and faithfully complied with the requirements of the Philippine Bill of 1902, in
effect upholding the dissenting opinion of Justice Concepcion in the Gold Creek Mining
case, supra.

As to whether or not the Bureau of Mines is likewise qualified to rule on whether there
has been full and faithful compliance with the requirements of the Philippine Bill of 1902
as amended, We rule that the Bureau of Mines is so empowered as a corollary function
in the processing of mining lease applications.

Accordingly, the decision of the CFI of Pampanga, (now Regional Trial Court) is hereby
AFFIRMED, with the MODIFICATION in that Kalahi's mining claims may be processed
as a mining lease application by the Bureau of Mines.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-49109 December 1, 1987

SANTA ROSA MINING COMPANY, INC., petitioner,

vs.
HON. MINISTER OF NATURAL RESOURCES JOSE J. LEIDO, JR. AND DIRECTOR OF MINES
JUANITO C. FERNANDEZ, respondents.

PADILLA, J.:

This is a special civil action for certiorari and prohibition with prayer for a writ of preliminary injunction, to
declare Presidential Decree No. 1214 unconstitutional and to enjoin respondent public officials from
enforcing it. On 19 October 1978, the Court required the respondents to comment on the petition and
issued a temporary restraining order continuing until otherwise ordered by the Court.

Petitioner Santa Rosa Mining Company, Inc. (petitioner, for short) is a mining corporation duly organized
and existing under the laws of the Philippines. It alleges that it is the holder of fifty (50) valid mining claims
situated in Jose Panganiban, Camarines Norte, acquired under the provisions of the Act of the U.S.
Congress dated 1 July 1902 (Philippine Bill of 1902, for short).

On 14 October 1977, Presidential Decree No. 1214 was issued, requiring holders of subsisting and valid
patentable mining claims located under the provisions of the Philippine Bill of 1902 to file a mining lease
application within one (1) year from the approval of the Decree. Petitioner accordingly filed a mining lease
application, but "under protest," on 13 October 1978, with a reservation annotated on the back of its
application that it is not waiving its rights over its mining claims until the validity of Presidential Decree No.
1214 shall have been passed upon by this Court. 1

On 10 October 1978, or three (3) days before filing the disputed mining lease application, petitioner filed
this special civil action for certiorari and prohibition, alleging that it has no other plain, speedy and
adequate remedy in the ordinary course of law to protect its rights (except by said petition). Petitioner
assails Presidential Decree No. 1214 as unconstitutional in that it amounts to a deprivation of property
without due process of law.

Petitioner avers that its fifty (50) mining claims had already been declared as its own private and
exclusive property in final judgments rendered by the Court of First Instance of Camarines Norte (CFI, for
short) in land registration proceedings initiated by third persons, such as, a September 1951 land title
application by a certain Gervacio Liwanag, where the Director of Mines opposed the grant of said
application because herein petitioner, according to him (Director of Mines), had already located and
perfected its mining claims over the area applied for. Petitioner also cites LRC Case No. 240, filed 11 July
1960, by one Antonio Astudillo and decided in 1974 against said applicant, in which, petitioner's mining
claims were described as vested property outside the jurisdiction of the Director of Mines. 2

In answer, the respondents allege that petitioner has no standing to file the instant petition as it failed to
fully exhaust administrative remedies. They cite the pendency of petitioner's appeal, with the Office of the
President, of the ruling of the respondent Secretary of Natural Resources issued on 2 April 1977 in DNR
Case No. 4140, which upheld the decision of the Director of Mines finding that forty four (44) out of
petitioner's fifty (50) mining claims were void for lack of valid "tie points" as required under the Philippine
Bill of 1902, and that all the mining claims had already been abandoned and cancelled, for petitioner's
non-compliance with the legal requirements of the same Phil. Bill of 1902 and Executive Order No. 141. 3

We agree with respondents' contention that it is premature for the Court to now make a finding on the
matter of whether petitioner had abandoned its mining claims. Until petitioner's appeal shall have been
decided by the Office of the President, where it is pending, petitioner's attempt to seek judicial recognition
of the continuing validity of its mining claims, cannot be entertained by the Court. As stated by the Court,
through Mr. Justice Sabino Padilla in Ham v. Bachrach Motor Co., Inc. 4 applying the principle of
exhaustion of administrative remedies: "By its own act of appealing from the decision of the Director of
Lands and the Secretary of Agriculture and Natural Resources to the President of the Philippines, and
without waiting for the latter's decision, the defendant cannot complain if the courts do not take action be
fore the President has decided its appeal." 5

The decisions of the Court of First Instance of Camarines Norte in applications for land registration filed
by third persons covering the area over which petitioner had located and registered its mining claims, as
cited by petitioner, are inapplicable. Said decisions merely denied the applications of such third persons
for land registration over areas already covered by petitioner's mining claims, for failure to show titles that
were registrable under the Torrens system; that was all. While the CFI made a statement in one case
declaring that the petitioner's mining claims are its vested property and even patentable at that time, there
is nothing in said CFI decision that squarely passed upon the question of whether petitioner had valid,
patentable (but still unpatented) mining claims which it had continued to maintain, in compliance with the
requirements of applicable laws. This question, which involves a finding of facts, is precisely the issue
before the Office of the President in the petitioner's appeal from the decision of the Secretary of Natural
Resources in DNR Case No. 4140 holding that petitioner's mining claims are considered abandoned
cancelled for failure of petitioner to comply with the requirements of the Philippine Bill of 1902 and
Executive Order No. 141. In short, the decisions of the Court of First Instance of Camarines Norte, relied
upon by petitioner, do not foreclose a proceeding, such as DNR Case No. 4140, to determine whether
petitioner's unpatented mining claims have remained valid and subsisting.

Respondents further contend that, even assuming arguendo that petitioner's mining claims were valid at
the outset, if they are deemed abandoned and cancelled due to non-compliance with the legal
requirements for maintaining a perfected mining claim, under the provisions of the Philippine Bill of 1902,
6
petitioner has no valid and subsisting claim which could be lost through the implementation of
Presidential Decree No. 1214, thus giving it no standing to question the Decree.

Petitioner, on the other hand, would rebut respondents' argument by declaring that it already had a vested
right over its mining claims even before Presidential Decree No. 1214, following the rulings in McDaniel v.
Apacible 7 and Gold Creek Mining Corp. v. Rodriguez. 8

The Court is not impressed that this is so.

The cases cited by petitioner, true enough, recognize the right of a locator of a mining claim as a property
right. This right, however, is not absolute. It is merely a possessory right, more so, in this case, where
petitioner's claims are still unpatented. They can be lost through abandonment or forfeiture or they may
be revoked for valid legal grounds. The statement in McDaniel v. Apacible that "There is no pretense in
the present case that the petitioner has not complied with all the requirements of the law in making the
location of the mineral claims in question, or that the claims in question were ever abandoned or forfeited
by him," 9 confirms that a valid mining claim may still be lost through abandonment or forfeiture.

The petitioner can not successfully plead the ruling in Gold Creek Mining Corp. v. Rodriguez, supra. In
that case, what was in issue was Gold Creek's right to a patent over its mining claim, after compliance
with all legal requirements for a patent. In the present case, no application for patent is in issue, although
as a holder of patentable mining claims petitioner could have applied for one during all these years but
inexplicably did not do so. In Gold Creek, no finding of abandonment was ever made against the mining
claimant as to deprive it of the initial privilege given by virtue of its location; on the other hand, such a
finding has been made in petitioner's case (although the finding among others is on appeal with the
President).

We now come to the question of whether or not Presidential Decree No. 1214 is constitutional. Even
assuming arguendo that petitioner was not bound to exhaust administrative remedies on the question of
whether or not its mining claims are still subsisting (not abandoned or cancelled before challenging the
constitutionality of said Decree, we hold that Presidential Decree No. 1214 is not unconstitutional. 10 It is
a valid exercise of the sovereign power of the State, as owner, over lands of the public domain, of which
petitioner's mining claims still form a part, and over the patrimony of the nation, of which mineral deposits
are a valuable asset. It may be underscored, in this connection, that the Decree does not cover all mining
claims located under the Phil. Bill of 1902, but only those claims over which their locators had failed to
obtain a patent. And even then, such locators may still avail of the renewable twenty-five year (25) lease
prescribed by Pres. Decree No. 463, the Mineral Development Resources Decree of 1974.

Mere location does not mean absolute ownership over the affected land or the mining claim. It merely
segregates the located land or area from the public domain by barring other would-be locators from
locating the same and appropriating for themselves the minerals found therein. To rule otherwise would
imply that location is all that is needed to acquire and maintain rights over a located mining claim. This,
we cannot approve or sanction because it is contrary to the intention of the lawmaker that the locator
should faithfully and consistently comply with the requirements for annual work and improvements in the
located mining claim.

Presidential Decree No. 1214 is in accord with Sec. 8, Art. XIV of the 1973 Constitution which states:
 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 twenty-five 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.

The same constitutional mandate is found in Sec. 2, Art. XII of the 1987 Constitution,
which declares:

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. ...

WHEREFORE, premises considered, the petition is hereby DISMISSED. The temporary

restraining order issued by the Court on 19 October 1978 is LIFTED and SET ASIDE.
Costs against the petitioner.

SO ORDERED.

Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,
Feliciano, Gancayco, Bidin, Sarmiento and Cortes, JJ., concur.

Footnotes
1 Rollo, at 313.

2 Rollo, at 106. A portion of the CFI decision in LRC No. 240 reads:

"Since it is abundantly clear that the 59 mining claims of the Sta. Rosa Mining Co. have all been located and registered
under the law obtaining prior to the effectivity of the Constitution of 1935. Sta Rosa's claim under these mining claims
are, in the language of the Supreme Court, vested property and is outside the jurisdiction of Director of Mines. As such
vested property, they can be sold, transferred, and even passed by descent. A patent may now even be issued
covering these 59 claims.

3 Executive Order No. 141, "Declaring Unpatented Mining Claims Which Were Located More Than Thirty Years Ago
and Which Have Not Met the Annual Assessment Requirement As Abandoned and their Declarations of Location
Cancelled." Published in 64 O.G. No. 35, at 8811, 26 August 1968.

4 109 Phil. 949 (1960).

5 Id at 957.

6 Philippine Bill of 1902, Sec. 36: " ... On each claim located after the passage of this Act and until a patent has been
named therefor, not less than one hundred dollars' worth of labor shall be performed, or improvements made during
each year: PROVIDED, That upon such failure to comply with these conditions the claim or mine upon which failure
 occurred shall be opened to relocation in the same manner as if no location of the same has ever been made,
provided, that the assigned locators their heirs, assigns, or legal representatives have not resumed work upon the
claim after failure and before such location.

7 42 Phil. 749 (1922).

8 66 Phil. 259 (1938).

9 Id. at 754 (Emphasis supplied).

10 The relevant provisions of this Decree are as follows:

SEC. 1. Holders of subsisting and valid patentable mining claims, lode or placer, located under the provisions of the Act
of Congress of July 1, 1902, as amended, shall file a mining lease application therefor with the Mines Regional Director
upon approval of this Decree, and upon the filing thereof, holders of the said claims shall be considered to have waived
their rights to the issuance of mining patents therefor: Provided, however, That the non- filing of the application for
mining lease by the holders thereof within the period herein prescribed shall cause the forfeiture of all his rights to the
claim.

SEC. 2. No mines temporary permit shall be required of a holder of a patentable mining claim, lode or placer, in the
extraction and disposal of minerals taken therefrom prior to the filing of the mining lease application therefor: Provided
That upon the filing of the said application, the provisions of Presidential Decree No. 463 shall apply: Provided further,
That patent applications already published shall be exempted from the publication requirements of Presidential Decree
No. 463.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 73246 March 2, 1993

DIRECTOR OF LANDS AND DIRECTOR OF FOREST DEVELOPMENT, petitioners,

vs.
INTERMEDIATE APPELLATE COURT AND J. ANTONIO ARANETA, respondents.

The Solicitor General for petitioners.

Jimenez, Leynes & Associates for private respondent.

NOCON, J.:

For review before Us is the decision of the Court of Appeals in the land registration case entitled J.
Antonio Araneta v. The Director of Lands and Director of Forest Development, AC-G.R. CV. No. 00636, 1
affirming the lower court's approval of the application for registration of a parcel of land in favor of
applicant therein, J. Antonio Araneta.

Evidence show that the land involved is actually an island known as Tambac Island in Lingayen Gulf.
Situated in the Municipality of Bani, Pangasinan, the area consists of 187,288 square meters, more or
less. The initial application for registration was filed for Pacific Farms, Inc. under the provisions of the
Land Registration Act, Act No. 496, as amended.
The Republic of the Philippines, thru the Director of Lands opposed the application alleging that the
applicant, Pacific Farms, Inc. does not possess a fee simple title to the land nor did its predecessors
possess the land for at least thirty (30) years immediately preceding the filing of application. The
opposition likewise specifically alleged that the applicant is a private corporation disqualified under the
(1973) new Philippine Constitution from acquiring alienable lands of the public domain citing Section 11,
Article 14. 2

The Director of Forest Development also entered its opposition alleging that the land is within the
unclassified public land and, hence, inalienable. Other private parties also filed their oppositions, but were
subsequently withdrawn.

In an amended application, Pacific Farms, Inc. filed a manifestation-motion to change the applicant from
Pacific Farms, Inc. to J. Antonio Araneta. Despite the supposed amendment, there was no republication.

Evidence presented by the applicant include the testimony of Placido Orlando, fishery guard of Pacific
Farms, Inc., who said he has known the disputed land since he attained the age of reason for some forty
(40) years now; that when he first came to know the property it was then owned by and in the possession
of Paulino Castelo, Juan Ambrosio and Julio Castelo, and later on the whole island was bought by Atty.
Vicente Castelo who in turn sold it to J. Antonio Araneta.

Deposition by oral examination of Araneta was also presented, together with documents of sale, tax
declarations and receipts, and survey of property. Applicant, however, failed to present the tracing cloth
plan and instead submitted to the court certified copies thereof.

While this case is pending here in Court, respondent filed an Omnibus Motion for Substitution of private
respondent. 3 Apparently, Antonio Araneta had assigned his rights to and interest in Tambac Island to
Amancio R. Garcia 4 who in turn assigned his rights and interest in the same property to Johnny A.
Khonghun whose nationality was not alleged in the pleadings.

On October 4, 1979, the trial court rendered a decision adjudicating the subject property to J. Antonio
Araneta. On appeal to the then Intermediate Appellate Court, the decision of the lower court was affirmed
on December 12, 1985.

Petitioners raised the following errors:

I. The lower court erred in adjudicating the lands subject of registration to applicant-
appellee despite his failure to present the original tracing cloth plan the submission of
which is a statutory requirement of mandatory character.

II. The lower court erred in not denying registration in favor of J. Antonio Araneta since
the amendment of the application was simply an attempt to avoid the application of the
constitutional provision disqualifying a private corporation — the Pacific Farms, Inc. in
this case — from acquiring lands of public domain.

III. The lower court erred in not declaring the land known as the "Tambac Island" not
subject of registration it being an island formed on the seas.

IV. The lower court erred in adjudicating the land to the applicant under the provisions of
Presidential Decree No. 1529, otherwise known as the Property Registration Decree,
despite absence of any specific invocation of this law in the original and amended
application.
 V. The lower court erred in not granting the government's motion for reconsideration at
least to enable it to present proof of the status of the land as within the unclassified public
forest, and hence beyond the court's jurisdiction to adjudicate as private property.

VI. The lower court erred in not declaring that the applicant has failed to overthrow the
presumption that the land is a portion of the public domain belonging to the Republic of
the Philippines.

From the foregoing it appears that the more important issues are: 1) whether the presentation of the
tracing cloth plan is necessary; and 2) whether the land known as "Tambac Island" can be subject to
registration.

By mere consideration of the first assignment of error, We can right away glean the merit of the petition.

Respondent claims that the tracing cloth plan is with the files of the Land Registration Commission, and
the only evidence that can be presented to that fact is the request for the issuance of a certified copy
thereof and the certified copy issued pursuant to the request. 5 Respondent further argues that failure of
the petitioners to object to the presentation of the certified copy of the tracing cloth plan was the basis of
the trial court's denial of petitioner's motion for reconsideration.

In a very recent decision of this Court, entitled The Director of Lands v. The Honorable Intermediate
Appellate Court and Lino Anit, 6 We have ruled that the submission of the tracing cloth plan is a
mandatory requirement for registration. Reiterating Our ruling in Director of Lands v. Reyes, 7 We
asserted that failure to submit in evidence the original tracing cloth plan is fatal it being a statutory
requirement of mandatory character.

It is of no import that petitioner failed to object to the presentation of the certified copy of the said plan.
What is required is the original tracing cloth plan of the land applied for and objection to such requirement
cannot be waived either expressly or impliedly. 8 This case is no different from the case of Director of
Lands v. Reyes, supra wherein We said that if the original tracing cloth plan was indeed with the Land
Registration Commission, there is no reason why the applicant cannot easily retrieve the same and
submit it in evidence, it being an essential requirement for registration.

As to the second assignment of error, We are inclined to agree with petitioners that the amendment of the
application from the name of Pacific Farms Inc., as applicant, to the name of J. Antonio Araneta Inc., was
a mere attempt to evade disqualification. Our Constitution, whether the 1973 9 or
1987, 10 prohibits private corporations or associations from holding alienable lands of the public domain
except by lease. Apparently realizing such prohibition, respondent amended its application to conform
with the mandates of the law.

However, We cannot go along with petitioners' position that the absence of republication of an amended
application for registration is a jurisdictional flaw. We should distinguish. Amendments to the application
may be due to change in parties or substantial change in the boundaries or increase in the area of the
land applied for.

In the former case, neither the Land Registration Act, as amended, nor Presidential Decree No. 1529,
otherwise known as the Property Registration Decree, requires republication and registration may be
allowed by the court at any stage of the proceeding upon just and reasonable terms. 11 On the other hand,
republication is required if the amendment is due to substantial change in the boundaries or increase in
the area of the land applied for.

As to the fourth assignment of error. We do not see any relevant dispute in the lower court's application of
Presidential Decree No. 1529, instead of Act No. 496, in adjudicating the land to the then applicant,
assuming that the land involved is registrable. Both laws are existing and can stand together. P.D. 1529
was enacted to codify the various laws relative to registration of property, in order to facilitate effective
implementation of said laws. 12

The third, fifth and sixth assignment of errors are likewise meritorious and shall be discussed forthwith
together.

Respondent asserts that contrary to the allegation of petitioners, the reports of the District Land Officer of
Dagupan City, Land Inspector Perfecto Daroy and Supervising Land Examiner Teodoro P. Nieva show
that the subject property is an unclassified public land, not forest land. This claim is rather misleading.
The report of Supervising Land Examiner Nieva specifically states that the "land is within the unclassified
forest land" under the administrative jurisdiction of the then Bureau of Forest Development. 13 This was
based on the reports of Land Inspector Daroy and District Land Officer Feliciano Liggayu.

Lands of the public domain are classified under three main categories, namely: Mineral, Forest and
Disposable or Alienable Lands. 14 Under the Commonwealth Constitution, only agricultural lands were
allowed to be alienated. Their disposition was provided for under Commonwealth Act No. 141 (Secs. 6-7),
which states 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. Mineral and Timber or forest lands are not subject to private ownership unless they are first
reclassified as agricultural lands and so released for alienation. 15 In the absence of such classification,
the land remains as unclassified land until released therefrom and rendered open to disposition. Courts
have no authority to do so. 16

This is in consonance with the Regalian doctrine that all lands of the public domain belong to the State,
and that the State is the source of any asserted right to ownership in land and charged with the
conservation of such patrimony. Under the Regalian Doctrine, all lands not otherwise appearing to be
clearly within private ownership are presumed to belong to the State. Hence, a positive act of the
government is needed to declassify a forest land into alienable or disposable land for agricultural or other
purposes. 17

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 that the land subject of the application is alienable or disposable. 18

Unless the applicant succeeds in showing by convincing evidence that the property involved was acquired
by him or his ancestors either by composition title from the Spanish Government or by possessory
information title, or any other means for the proper acquisition of public lands, the property must be held
to be part of the public domain. The applicant must present evidence and persuasive proof to substantiate
his claim. 19

In this particular case, respondent presented proof that as early as 1921, the subject property has been
declared for tax purposes with receipts attached, in the names of respondent's predecessors-in-interest.
Nevertheless, in that span of time there had been no attempt to register the same either under Act 496 or
under the Spanish Mortgage Law. It is also rather intriguing that Vicente Castelo who acquired almost
90% of the property from Alejo Ambrosia, et al. on June 18, 1958 and from Julio Castelo on June 19,
1958 immediately sold the same to applicant J. Antonio Araneta on 3 July 1958.

According to the report of Land Investigator Daroy, the land was declared for taxation purposes in the
name of Vicente Castelo only in 1958 and the purported old tax declarations are not on file with the
Provincial Assessor's Office.

In any case tax declarations and receipts are not conclusive evidence of ownership or of the right to
possess land when not supported by evidence. 20 The fact that the disputed property may have been
declared for taxation purposes in the names of the applicants or of their predecessors-in-interest way
back in 1921 does not necessarily prove ownership. They are merely indicia of a claim of ownership. 21
Respondent's contention that the BFD, LC Map No. 681, certified on August 8, 1927 which was the basis
of the report and recommendation of the Land Examiner, is too antiquated; that it cannot be conclusively
relied upon and was not even presented in evidence, is not well taken. As We have said in the case of
Director of Lands v. CA: 22

And the fact that BF Map LC No. 673 dated March 1, 1927 showing subject property to
be within unclassified region was not presented in evidence will not operate against the
State considering the stipulation between the parties and under the well-settled rule that
the State cannot be estopped by the omission, mistake or error of its officials or agents, if
omission there was, in fact.

Respondent even admitted that Tambac Island is still an unclassified public land as of 1927 and remains
to be unclassified.

Since the subject property is still unclassified, whatever possession

the applicant may have had and however long, cannot ripen into private ownership. 23 The conversion of
subject property does not automatically render the property as alienable and disposable.

In effect what the courts a quo have done is to release the subject property from the unclassified
category, which is beyond their competence and jurisdiction. We reiterate that the classification of public
lands is an exclusive prerogative of the Executive Department of the Government and not of the Courts.
In the absence of such classification, the land remains unclassified until released therefrom and rendered
open to disposition. 24

In fairness to respondent, the petitioners should seriously consider the matter of the reclassification of the
land in question. The attempt of people to have disposable lands they have been tilling for generations
titled in their name should not only be viewed with understanding attitude, but as a matter of policy
encouraged. 25

WHEREFORE, the petition is hereby GRANTED and the decisions of the courts a quo are REVERSED.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-32266 February 27, 1989

THE DIRECTOR OF FORESTRY, petitioner

vs.
RUPERTO A. VILLAREAL, respondent.

The Solicitor General for petitioner.

Quasha, Asperilla, Ancheta, Valmonte, Pena & Marcos for respondents.

CRUZ, J.:
The basic question before the Court is the legal classification of mangrove swamps, or manglares, as
they are commonly known. If they are part of our public forest lands, they are not alienable under the
Constitution. If they are considered public agricultural lands, they may be acquired under private
ownership. The private respondent's claim to the land in question must be judged by these criteria.

The said land consists of 178,113 square meters of mangrove swamps located in the municipality of
Sapian, Capiz. Ruperto Villareal applied for its registration on January 25, 1949, alleging that he and his
predecessors-in-interest had been in possession of the land for more than forty years. He was opposed
by several persons, including the petitioner on behalf of the Republic of the Philippines. After trial, the
application was approved by the Court of First Instance. of Capiz. 1 The decision was affirmed by the
Court of Appeals. 2 The Director of Forestry then came to this Court in a petition for review on certiorari
claiming that the land in dispute was forestal in nature and not subject to private appropriation. He asks
that the registration be reversed.

It should be stressed at the outset that both the petitioner and the private respondent agree that the land
is mangrove land. There is no dispute as to this. The bone of contention between the parties is the legal
nature of mangrove swamps or manglares. The petitioner claims, it is forestal and therefore not
disposable and the private respondent insists it is alienable as agricultural land. The issue before us is
legal, not factual.

For a proper background of this case, we have to go back to the Philippine Bill of 1902, one of the earlier
American organic acts in the country. By this law, lands of the public domain in the Philippine Islands
were classified into three grand divisions, to wit, agricultural, mineral and timber or forest lands. This
classification was maintained in the Constitution of the Commonwealth, promulgated in 1935, until it was
superseded by the Constitution of 1973. That new charter expanded the classification of public lands to
include industrial or commercial, residential, resettlement, and grazing lands and even permitted the
legislature to provide for other categories. 3 This provision has been reproduced, but with substantial
modifications, in the present Constitution. 4

Under the Commonwealth Constitution, which was the charter in force when this case arose, only
agricultural lands were allowed to be alienated. 5 Their disposition was provided for under C.A. No. 141.
Mineral and timber or forest lands were not subject to private ownership unless they were first reclassified
as agricultural lands and so released for alienation.

In the leading case of Montano v. Insular Government, 6 promulgated in 1909, mangrove swamps or
manglares were defined by the Court as:

... mud flats, alternately washed and exposed by the tide, in which grows various kindred
plants which will not live except when watered by the sea, extending their roots deep into
the mud and casting their seeds, which also germinate there. These constitute the
mangrove flats of the tropics, which exist naturally, but which are also, to some extent
cultivated by man for the sake of the combustible wood of the mangrove and like trees as
well as for the useful nipa palm propagated thereon. Although these flats are literally tidal
lands, yet we are of the opinion that they cannot be so regarded in the sense in which
that term is used in the cases cited or in general American jurisprudence. The waters
flowing over them are not available for purpose of navigation, and they may be disposed
of without impairment of the public interest in what remains.

xxx

Under this uncertain and somewhat unsatisfactory condition of the law, the custom had
grown of converting manglares and nipa lands into fisheries which became a common
feature of settlement along the coast and at the same time of the change of sovereignty
 constituted one of the most productive industries of the Islands, the abrogation of which
would destroy vested interests and prove a public disaster.

Mangrove swamps were thus considered agricultural lands and so susceptible of private ownership.

Subsequently, the Philippine Legislature categorically declared, despite the above-cited case, that
mangrove swamps form part of the public forests of this country. This it did in the Administrative Code of
1917, which became effective on October 1 of that year, thus:

Section 1820. Words and phrase defined. - For the purpose of this chapter 'public forest'
includes, except as otherwise specially indicated, all unreserved public land, including
nipa and mangrove swamps, and all forest reserves of whatever character.

It is noteworthy, though, that notwithstanding this definition, the Court maintained the doctrine in the
Montano case when two years later it held in the case of Jocson v. Director of Forestry: 7

...the words timber land are always translated in the Spanish translation of that Act (Act of
Congress) as terrenos forestales. We think there is an error in this translation and that a
better translation would be 'terrenos madereros.' Lumber land in English means land with
trees growing on it. The mangler plant would never be called a tree in English but a bush,
and land which has only bushes, shrubs or aquatic plants growing on it cannot be called
'timber land.

xxx xxx xxx

The fact that there are a few trees growing in a manglare or nipa swamps does not
change the general character of the land from manglare to timber land.

More to the point, addressing itself directly to above-quoted Section 1820, the Court
declared:

'In the case of Mapa vs. Insular Government (10 Phil. Rep., 175), this Court said that the
phrase agricultural lands as used in Act No. 926 means those public lands acquired from
Spain which are not timber or mineral lands.

Whatever may have been the meaning of the term 'forestry' under the Spanish law, the
Act of Congress of July 1st 1902, classifies the public lands in the Philippine Islands as
timber, mineral or agricultural lands, and all public lands that are not timber or mineral
lands are necessarily agricultural public lands, whether they are used as nipa swamps,
manglares, fisheries or ordinary farm lands.

The definition of forestry as including manglares found in the Administrative Code of 1917
cannot affect rights which vested prior to its enactment.

These lands being neither timber nor mineral lands, the trial court should have
considered them agricultural lands. If they are agricultural lands, then the rights of
appellants are fully established by Act No. 926.

The doctrine was reiterated still later in Garchitorena Vda. de Centenera v. Obias, 8 promulgated on
March 4, 1933, more than fifteen years after the effectivity of the Administrative Code of 1917. Justice
Ostrand declared for a unanimous Court:
 The opposition rests mainly upon the proposition that the land covered by the application
there are mangrove lands as shown in his opponent's Exh. 1, but we think this opposition
of the Director of Forestry is untenable, inasmuch as it has been definitely decided that
mangrove lands are not forest lands in the sense in which this phrase is used in the Act
of Congress.

No elaboration was made on this conclusion which was merely based on the cases of Montano and
Jocson. And in 1977, the above ruling was reaffirmed in Tongson v. Director of Forestry, 9 with Justice
Fernando declaring that the mangrove lands in litis were agricultural in nature. The decision even quoted
with approval the statement of the trial court that:

... Mangrove swamps where only trees of mangrove species grow, where the trees are
small and sparse, fit only for firewood purposes and the trees growing are not of
commercial value as lumber do not convert the land into public land. Such lands are not
forest in character. They do not form part of the public domain.

Only last year, in Republic v. De Porkan, 10 the Court, citing Krivenko v. Register of Deeds, 11 reiterated
the ruling in the Mapa case that "all public lands that are not timber or mineral lands are necessarily
agricultural public lands, whether they are used as nipa swamps, manglares, fisheries or ordinary farm
lands.

But the problem is not all that simple. As it happens, there is also a line of decisions holding the contrary
view.

In Yngson v. Secretary of Agriculture and Natural Resources, 12 promulgated in 1983, the Court ruled
"that the Bureau of Fisheries has no jurisdiction to dispose of swamp lands or mangrove lands forming
part of the public domain while such lands are still classified as forest lands.

Four months later, in Heirs of Amunategui v. Director of Forestry, 13 the Court was more positive when it
held, again through Justice Gutierrez:

The Heirs of Jose Amunategui maintain that Lot No. 885 cannot be classified as forest
land because it is not thickly forested but is a 'mangrove swamps.' Although conceding
that 'mangrove swamp' is included in the classification of forest land in accordance with
Section 1820 of the Revised Administrative Code, the petitioners argue that no big trees
classified in Section 1821 of the said Code as first, second and third groups are found on
the land in question. Furthermore, they contend that Lot 885, even if it is a mangrove
swamp, is still subject to land registration proceedings because the property had been in
actual possession of private persons for many years, and therefore, said land was
already 'private land' better adapted and more valuable for agricultural than for forest
purposes and not required by the public interests to be kept under forest classification.

The petition is without merit.

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. 'Forested 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 classsified 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
titles do not apply.'

The view was maintained in Vallarta v. Intermediate Appellate Court, 14 where this Court agreed with the
Solicitor General's submission that the land in dispute, which he described as "swamp mangrove or
forestal land," were not private properties and so not registerable. This case was decided only twelve
days after the De Porkan case.

Faced with these apparent contradictions, the Court feels there is a need for a categorical pronouncement
that should resolve once and for all the question of whether mangrove swamps are agricultural lands or
forest lands.

The determination of this question is a function initially belonging to the legislature, which has the
authority to implement the constitutional provision classifying the lands of the public domain (and is now
even permitted to provide for more categories of public lands). The legislature having made such
implementation, the executive officials may then, in the discharge of their own role, administer our public
lands pursuant to their constitutional duty " to ensure that the laws be faithfully executed' and in
accordance with the policy prescribed. For their part, the courts will step into the picture if the rules laid
down by the legislature are challenged or, assuming they are valid, it is claimed that they are not being
correctly observed by the executive. Thus do the three departments, coordinating with each other, pursue
and achieve the objectives of the Constitution in the conservation and utilization of our natural resources.

In C.A. No. 141, the National Assembly delegated to the President of the Philippines the function of
making periodic classifications of public lands, thus:

Sec. 6. The President, 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) Lumber, and

(c) Mineral lands,

and may at any time and in a like manner transfer such lands from one class to another,
for the purposes of their administration and disposition.

Sec. 7. For the purposes of the administration and disposition of alienable or disposable
lands, the President, 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.

With particular regard to alienable public lands, Section 9 of the same law provides:

For the purpose of their administration and disposition, the lands of the public domain
alienable or open to disposition shall be classified, according to the use or purposes to
which such lands are destined, as follows:

(a) Agricultural;

(b) Residential, commercial, industrial, or for similar productive purposes;

 (c) Educational, charitable, or other similar purposes; and

(d) Reservations for townsites and for public and quasi-public uses.

The President, upon recommendation by the Secretary of Agriculture and Natural

Resources, shall from time to time make the classifications provided for in this section,
and may, at any time and in a similar manner, transfer lands from one class to another.

As for timber or forest lands, the Revised Administrative Code states as follows:

Sec. 1826. Regulation setting apart forest reserves- Revocation of same. - Upon there
commendation of the Director of Forestry, with the approval of the Department Head, the
President of the Philippines may set apart forest reserves from the public lands and he
shall by proclamation declare the establishment of such reserves and the boundaries
thereof, and thereafter such forest reserves shall not be entered, sold, or otherwise
disposed of, but shall remain as such for forest uses, and shall be administered in the
same manner as public forest.

The President of the Philippines may in like manner by proclamation alter or modify the
boundaries of any forest reserve from time to time, or revoke any such proclamation, and
upon such revocation such forest reserve shall be and become part of the public lands as
though such proclamation had never been made.

Sec. 1827. Assignment of forest land for agricultural purposes. - Lands in public forest,
not including forest reserves, upon the certification of the Director of Forestry that said
lands are better adapted and more valuable for agricultural than for forest purposes and
not required by the public interests to be kept under forest, shall be declared by the
Department Head to be agricultural lands.

With these principles in mind, we reach the following conclusion:

Mangrove swamps or manglares should be understood as comprised within the public forests of the
Philippines as defined in the aforecited Section 1820 of the Administrative Code of 1917. The legislature
having so determined, we have no authority to ignore or modify its decision, and in effect veto it, in the
exercise of our own discretion. The statutory definition remains unchanged to date and, no less
noteworthy, is accepted and invoked by the executive department. More importantly, the said provision
has not been challenged as arbitrary or unrealistic or unconstitutional assuming the requisite conditions,
to justify our judicial intervention and scrutiny. The law is thus presumed valid and so must be respected.
We repeat our statement in the Amunategui case that the classification of mangrove swamps as forest
lands is descriptive of its legal nature or status and does not have to be descriptive of what the land
actually looks like. That determination having been made and no cogent argument having been raised to
annul it, we have no duty as judges but to apply it. And so we shall.

Our previous description of the term in question as pertaining to our agricultural lands should be
understood as covering only those lands over which ownership had already vested before the
Administrative Code of 1917 became effective. Such lands could not be retroactively legislated as forest
lands because this would be violative of a duly acquired property right protected by the due process
clause. So we ruled again only two months ago in Republic of the Philippines vs. Court of Appeals, 15
where the possession of the land in dispute commenced as early as 1909, before it was much later
classified as timberland.

It follows from all this that the land under contention being admittedly a part of the mangrove swamps of
Sapian, and for which a minor forest license had in fact been issued by the Bureau of Forestry from 1920
to 1950, it must be considered forest land. It could therefore not be the subject of the adverse possession
and consequent ownership claimed by the private respondent in support of his application for registration.
To be so, it had first to be released as forest land and reclassified as agricultural land pursuant to the
certification the Director of Forestry may issue under Section 1827 of the Revised Administrative Code.

The private respondent invokes the survey plan of the mangrove swamps approved by the Director of
Lands, 16 to prove that the land is registerable. It should be plain, however, that the mere existence of
such a plan would not have the effect of converting the mangrove swamps, as forest land, into agricultural
land. Such approval is ineffectual because it is clearly in officious. The Director of Lands was not
authorized to act in the premises. Under the aforecited law, it is the Director of Forestry who has the
authority to determine whether forest land is more valuable for agricultural rather than forestry uses, as a
basis for its declaration as agricultural land and release for private ownership.

Thus we held in the Yngson case:

It is elementary in the law governing the disposition of lands of the public domain that
until timber or forest lands are released as disposable and alienable neither the Bureau of
Lands nor the Bureau of Fisheries has authority to lease, grant, sell or otherwise dispose
of these lands for homesteads, sales patents, leases for grazing or other purposes,
fishpond leases and other modes of utilization.

The Bureau of Fisheries has no jurisdiction to administer and dispose of swamp lands or
mangrove lands forming part of the public domain while such lands are still classified as
forest land or timber land and not released for fishery or other purposes.

The same rule was echoed in the Vallarta case, thus:

It is elementary in the law governing natural resources that forest land cannot be owned
by private persons. It is not registerable. The adverse possession which can be the basis
of a grant of title in confirmation of imperfect title cases cannot commence until after the
forest land has been declared alienable and disposable. Possession of forest land, no
matter bow long cannot convert it into private property.'

We find in fact that even if the land in dispute were agricultural in nature, the proof the private respondent
offers of prescriptive possession thereof is remarkably meager and of dubious persuasiveness. The
record contains no convincing evidence of the existence of the informacion posesoria allegedly obtained
by the original transferor of the property, let alone the fact that the conditions for acquiring title thereunder
have been satisfied. Nowhere has it been shown that the informacion posesoria has been inscribed or
registered in the registry of property and that the land has been under the actual and adverse possession
of the private respondent for twenty years as required by the Spanish Mortgage Law. 17 These matters are
not presumed but must be established with definite proof, which is lacking in this case.

Significantly, the tax declarations made by the private respondent were practically the only basis used by
the appellate court in sustaining his claim of possession over the land in question. Tax declarations are, of
course, not sufficient to prove possession and much less vest ownership in favor of the declarant, as we
have held in countless cases. 18

We hold, in sum, that the private respondent has not established his right to the registration of the subject
land in his name. Accordingly, the petition must be granted.

It is reiterated for emphasis that, conformably to the legislative definition embodied in Section 1820 of the
Revised Administrative Code of 1917, which remains unamended up to now, mangrove swamps or
manglares form part of the public forests of the Philippines. As such, they are not alienable under the
Constitution and may not be the subject of private ownership until and unless they are first released as
forest land and classified as alienable agricultural land.

WHEREFORE, the decision of the Court of Appeals is SET ASIDE and the application for registration of
title of private respondent is DISMISSED, with cost against him. This decision is immediately executory.

SO ORDERED.

Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Cortes,
Griño-Aquino, Medialdea and Regalado, JJ., concur.

Fernan, C.J., took no part.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-46729 November 19, 1982

LAUSAN AYOG, BENITO AYOG, DAMASO AYOG, JULIO AYOG, SEGUNDA AYOG, VICENTE
ABAQUETA, BERNARDINO ADORMEO, VIDAL ALBANO, FELICIANO ARIAS, ANTONIO BALDOS,
MAXIMO BALDOS, ROMERO BINGZON, EMILIO CADAYDAY, FRUCTUOSO CHUA, SR.,
HERACLEO CHUA, GUILLERMO DAGOY, ABDON DEIMOS, NICASIO DE LEON, JULIANA VDA. DE
DIANNA, DEMOCRITO DEVERO, ALFREDO DIVINAGRACIA, ESTEBAN DIVINAGRACIA,
LEODEGARDIO DIVINAGRACIA, NELLO DIVINAGRACIA, MERQUIADES EMBERADOR, JESUS
EMPERADO, PORFERIO ENOC, SOFRONIO ENOC, RAFAEL GAETOS, NICOLAS GARLET,
TRINIDAD GARLET, FORTUNATA GEONZON, NICOLADA NAQUILA, TORIBIO NAQUILA, EFREN
OKAY, ELPIDIO OKAY, SR., DIEGO ONGRIA, ERNESTO PANARES, VICENTE PATULOT, IGNACIA
RIBAO, JUANO RICO, JESUS ROSALITA, ARMANDO TANTE and ANSELMO VALMORES,
petitioners,
vs.
JUDGE VICENTE N. CUSI, JR., Court of First Instance of Davao, Branch I, PROVINCIAL SHERIFF
OF DAVAO, and BINAN DEVELOPMENT CO., INC., respondents. MINISTER OF NATURAL
RESOURCES and DIRECTOR OF LANDS, intervenors.

AQUINO, J.:

This case is about the application of section 11, Article XIV of the 1973 Constitution (disqualifying a
private corporation from purchasing public lands) to a 1953 sales award made by the Bureau of Lands, for
which a sales patent and Torrens title were issued in 1975, and to the 1964 decision of the trial court,
ejecting some of the petitioners from the land purchased, which decision was affirmed in 1975 by the
Court of Appeals. That legal question arises under the following facts:

On January 21, 1953, the Director of Lands, after a bidding, awarded to Biñan Development Co., Inc. on
the basis of its 1951 Sales Application No. V-6834 Cadastral Lot No. 281 located at Barrio Tamugan,
Guianga (Baguio District), Davao City with an area of about two hundred fifty hectares. Some occupants
of the lot protested against the sale. The Director of Lands in his decision of August 30, 1957 dismissed
the protests and ordered the occupants to vacate the lot and remove their improvements. No appeal was
made from that decision.

The Director found that the protestants (defendants in the 1961 ejectment suit, some of whom are now
petitioners herein) entered the land only after it was awarded to the corporation and, therefore, they could
not be regarded as bona fide occupants thereof. The Director characterized them as squatters. He found
that some claimants were fictitious persons (p. 30, Rollo of L-43505, Okay vs. CA). He issued a writ of
execution but the protestants defied the writ and refused to vacate the land (p. 28, Rollo of L-43505, Okay
vs. CA). **

Because the alleged occupants refused to vacate the land, the corporation filed against them on February
27, 1961 in the Court of First Instance of Davao, Civil Case No. 3711, an ejectment suit (accion
publiciana). The forty defendants were Identified as follows:

1. Vicente Abaqueta 21. Eniego Garlic

2. Candido Abella 22. Nicolas Garlic

3. Julio Ayog 23. Rufo Garlic

4. Arcadio Ayong 24. Alfonso Ibales

5. Generoso Bangonan 25. Julian Locacia

6. Lomayong Cabao 26. Filomeno Labantaban

7. Jose Catibring 27. Arcadio Lumantas

8. Teodolfo Chua 28. Santos Militante

9. Guillermo Dagoy 29. Toribio Naquila

10. Anastacia Vda. de Didal 30. Elpidio Okay

11. Alfredo Divinagracia 31. Guillermo Omac

12. Silverio Divinagracia 32. Emilio Padayday

13. Galina Edsa 33. Marcosa Vda. de Rejoy

14. Jesus Emperado 34. Lorenzo Rutsa

15. Porfirio Enoc 35. Ramon Samsa

16. Benito Ente 36. Rebecca Samsa

17. German Flores 37. Alfeao Sante

18. Ciriaco Fuentes 38. Meliton Sante

19. Pulong Gabao 39. Amil Sidaani

20. Constancio Garlic 40. Cosme Villegas

That ejectment suit delayed the issuance of the patent. The trial court found that the protests of twenty of
the abovenamed defendants were among those that were dismissed by the Director of Lands in his 1957
decision already mentioned.

On July 18, 1961 the purchase price of ten thousand pesos was fully paid by Binan Development Co., Inc.
On November 10, 1961, an official of the Bureau of Lands submitted a final investigation report wherein it
was stated that the corporation had complied with the cultivation and other requirements under the Public
Land Law and had paid the purchase price of the land (p. 248, Rollo).

It was only more than thirteen years later or on August 14, 1975 when Sales Patent No. 5681 was issued
to the corporation for that lot with a reduced area of 175.3 hectares. The patent was registered. Original
Certificate of Title No. P-5176 was issued to the patentee.

The Director of Lands in his memorandum dated June 29, 1974 for the Secretary of Natural Resources,
recommending approval of the sales patent, pointed out that the purchaser corporation had complied with
the said requirements long before the effectivity of the Constitution, that the land in question was free
from claims and conflicts and that the issuance of the patent was in conformity with the guidelines
prescribed in Opinion No. 64, series of 1973, of Secretary of Justice Vicente Abad Santos and was an
exception to the prohibition in section 11, Article XIV of the Constitution (p. 258, Rollo).

Secretary of Natural Resources Jose J. Leido, Jr., in approving the patent on August 14, 1975, noted that
the applicant had acquired a nested right to its issuance (p. 259, Rollo).

Before that patent was issued, there was a trial in the ejectment suit. Fifteen defendants (out of forty),
namely, Julio Ayog, Guillermo Bagoy, Generoso Bangonan, Jose Catibring, Porfirio Enoc, Jose
Emperado, Arcadio Lomanto, Toribio Naquila, Elpidio Okay, Alfeo Sante, Meliton Sante, Ramon Samsa,
Rebecca Samsa, Arcadio Sarumines and Felix Tahantahan, testified that they entered the disputed land
long before 1951 and that they planted it to coconuts, coffee, jackfruit and other fruit trees. (p. 28, Record
on Appeal).

The trial court did not give credence to their testimonies. It believed the report of an official of the Bureau
of Lands that in 1953 the land was free from private claims and conflicts and it gave much weight to the
decision of the Director of Lands dismissing the protests of the defendants against the sales award (p. 30,
Record on Appeal).

Furthermore, the trial court during its ocular inspection of the land on November 8, 1964 found that the
plantings on the land could not be more than ten years old, meaning that they were not existing in 1953
when the sales award was made. Hence, the trial court ordered the defendants to vacate the land and to
restore the possession thereof to tile company. The Court of Appeals affirmed that judgment on
December 5, 1975 in its decision in Binan Development Co., Inc. vs, Sante, CA-G.R. No. 37142- R. The
review of the decision was denied by this Court on May 17, 1976 in Elpidio Okay vs. Court of Appeals, L-
43505.

After the record was remanded to the trial court, the corporation filed a motion for execution. The
defendants, some of whom are now petitioners herein, opposed the motion. They contended that the
adoption of the Constitution, which took effect on January 17, 1973, was a supervening fact which
rendered it legally impossible to execute the lower court's judgment. They invoked the constitutional
prohibition, already mentioned, that "no private corporation or association may hold alienable lands of the
public domain except by lease not to exceed one thousand hectares in area."

The lower court suspended action on the motion for execution because of the manifestation of the
defendants that they would file a petition for prohibition in this Court. On August 24, 1977, the instant
prohibition action was filed. Some of the petitioners were not defendants in the ejectment case.
We hold that the said constitutional prohibition has no retroactive application to the sales application of
Biñan 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. lt 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. Petitioners' prohibition action is barred by the doctrine
of vested rights in constitutional law.

"A right is vested when the right to enjoyment has become the property of some particular person or
persons as a present interest" (16 C.J.S. 1173). It is "the privilege to enjoy property legally vested, to
enforce contracts, and enjoy the rights of property conferred by the existing law" (12 C.J. 955, Note 46,
No. 6) or "some right or interest in property which has become fixed and established and is no longer
open to doubt or controversy" (Downs vs. Blount 170 Fed. 15, 20, cited in Balboa vs. Farrales, 51 Phil.
498, 502).

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).

It has been observed that, generally, the term "vested right" expresses the concept of present fixed
interest, which in right reason and natural justice should be protected against arbitrary State action, or an
innately just and imperative right which an enlightened free society, sensitive to inherent and irrefragable
individual rights, cannot deny (16 C.J.S. 1174, Note 71, No. 5, citing Pennsylvania Greyhound Lines, Inc.
vs. Rosenthal, 192 Atl. 2nd 587).

Secretary of Justice Abad Santos in his 1973 opinion ruled that where the applicant, before the
Constitution took effect, had fully complied with all his obligations under the Public Land Act in order to
entitle him to a sales patent, there would seem to be no legal or equitable justification for refusing to issue
or release the sales patent (p. 254, Rollo).

In Opinion No. 140, series of 1974, he held that as soon as the applicant had fulfilled the construction or
cultivation requirements and has fully paid the purchase price, he should be deemed to have acquired by
purchase the particular tract of land and to him the area limitation in the new Constitution would not apply.

In Opinion No. 185, series of 1976, Secretary Abad Santos held that where the cultivation requirements
were fulfilled before the new Constitution took effect but the full payment of the price was completed after
January 17, 1973, the applicant was, nevertheless, entitled to a sales patent (p. 256, Rollo).

Such a contemporaneous construction of the constitutional prohibition by a high executive official carries
great weight and should be accorded much respect. It is a correct interpretation of section 11 of Article
XIV.

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 that land is
protected by law. It cannot be deprived of that right without due process (Director of Lands vs. CA, 123
Phil. 919).
As we cannot review the factual findings of the trial court and the Court of Appeals, we cannot entertain
petitioners' contention that many of them by themselves and through their predecessors-in-interest have
possessed portions of land even before the war. They should have filed homestead or free patent
applications.

Our jurisdiction is limited to the resolution of the legal issue as to whether the 1973 Constitution is an
obstacle to the implementation of the trial court's 1964 final and executory judgment ejecting the
petitioners. On that issue, we have no choice but to sustain its enforceability.

Nevertheless, in the interest of social justice, to avoid agrarian unrest and to dispel the notion that the law
grinds the faces of the poor, the administrative authorities should find ways and means of accommodating
some of the petitioners if they are landless and are really tillers of the soil who in the words of President
Magsaysay deserve a little more food in their stomachs, a little more shelter over their heads and a little
more clothing on their backs. The State should endeavor to help the poor who find it difficult to make both
ends meet and who suffer privations in the universal struggle for existence.

A tiller of the soil is entitled to enjoy basic human rights, particularly freedom from want. The common
man should be assisted in possessing and cultivating a piece of land for his sustenance, to give him
social security and to enable him to achieve a dignified existence and become an independent, self-reliant
and responsible citizen in our democratic society.

To guarantee him that right is to discourage him from becoming a subversive or from rebelling against a
social order where, as the architect of the French Revolution observed, the rich are choking with the
superfluities of life but the famished multitude lack the barest necessities.

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 owned social unrest.

Petitioners' counsel claims that Biñan Development Co., Inc. seeks to execute the judgment in Civil Case
No. 3711, the ejectment suit from which this prohibition case arose, against some of the petitioners who
were not defendants in that suit (p. 126, Rollo).

Those petitioners are not successors-in-interest of the defendants in the ejectment suit. Nor do they
derive their right of possession from the said defendants. Those petitioners occupy portions of the
disputed land distinct and separate from the portions occupied by the said defendants.

We hold that judgment cannot be enforced against the said petitioners who were not defendants in that
litigation or who were not summoned and heard in that case. Generally, "it is an axiom of the law that no
man shall be affected by proceedings to which he is a stranger" (Ed. A. Keller & Co. vs Ellerman &
Bucknall Steamship Co., 38 Phil. 514, 520).

To enforce the judgment against those who were not parties to the case and who occupy portions of the
disputed land distinct and separate from the portions occupied by the defendants in the ejectment suit,
would be violative of due process of law, the law which, according to Daniel Webster in his argument in
the Dartmouth College case, is the law of the land, a law which hears before it condemns, which
proceeds upon inquiry and renders judgment only after trial. "The meaning is, that every citizen shall hold
his life, liberty, property, and immunities, under the protection of the general rules which govern society."
(Cited in Lopez vs. Director of Lands, 47 Phil. 23, 32. See Gatchalian vs. Arlegui, L-35615 and Tang Tee
vs. Arlegui, L-41360, February 17, 1977, 75 SCRA 234 and Berses vs. Villanueva, 25 Phil. 473.)

Contempt incident.-During the pendency of this case, or at about four o'clock in the morning of December
12, 1978, Ciriaco Tebayan, Domingo Nevasca, Rogelio Duterte and Sofronio Etac, employees of the
Crown Fruits and Cannery Corporation, plowed or bulldozed with their tractors a portion of the disputed
land which was occupied by Melquiades Emberador, one of the petitioners herein. The disputed land was
leased by Biñan Development Co., Inc. to the canning corporation.

The four tractor drivers destroyed the improvements thereon worth about five thousand pesos consisting
of coffee, coconut and banana plants. Emberador was in the hospital at the time the alleged destruction of
the improvements occurred. However, it should be noted that Emberador was not expressly named as a
defendant in the ejectment suit. Apparently, he is not included in the trial court's decision although he was
joined as a co-petitioner in this prohibition case.

The petitioners in their motion of January 11, 1979 asked that the four tractor drivers and Honesto Garcia,
the manager of Biñan Development Co., Inc., be declared in contempt of court for having disregarded the
restraining order issued by this Court on August 29, 1977, enjoining specifically Judge Vicente N. Cusi
and the provincial sheriff from enforcing the decision in the ejectment suit, Civil Case No. 3711 (pp. 46-47,
138- 141, Rollo).

Garcia and the four drivers answered the motion. The incident was assigned for hearing to Judge Antonio
M. Martinez of the Court of First Instance of Davao. Judge Martinez found that the plowing was made at
the instance of Garcia who told the barrio captain, petitioner Lausan Ayog, a Bagobo, that he (Garcia)
could not wait anymore for the termination of this case.

The record shows that on April 30, 1979 or four months after the said incident, Emberador, in
consideration of P3,500, as the value of the improvements on his land, executed a quitclaim in favor of
the Crown Fruits and Cannery Corporation (Exh. 1, 2 and 3).

We hold that no contempt was committed. The temporary restraining order was not directed to Biñan
Development Co., Inc. its officers, agents or privies. Emberador was not named specifically in the trial
court's judgment as one of the occupants to be ejected.

For the redress of whatever wrong or delict was committed against Emberador by reason of the
destruction of his improvements, his remedy is not in a contempt proceeding but in some appropriate civil
and criminal actions against the destroyer of the improvements.

In resume, we find that there is no merit in the instant prohibition action. The constitutional prohibition
relied upon by the petitioners as a ground to stop the execution of the judgment in the ejectment suit has
no retroactive application to that case and does not divest the trial court of jurisdiction to enforce that
judgment.

WHEREFORE, the petition is dismissed for lack of merit but with the clarification that the said judgment
cannot be enforced against those petitioners herein who were not defendants in the ejectment case, Civil
Case No. 3711, and over whom the lower court did not acquire jurisdiction. The contempt proceeding is
also dismissed. No costs.

SO ORDERED.

Concepcion, Jr., Guerrero, Abad Santos, Relova and Gutierrez, Jr., JJ., concur.

Escolin, J., took no part.

 
Separate Opinions

VASQUEZ, J., concurring:

I concur with the very ably written main opinion. However, I wish to erase any possible erroneous
impression that may be derived from the dispositive portion insofar as it declares that the judgment in the
ejectment cage may not be enforced against the petitioners who were not defendants in Civil Case No.
3711 and over whom the lower court did not acquire jurisdiction.

The judgment in any case is binding and enforceable not only against the parties thereto but also against
"their successors in interest by title subsequent to the commencement of the action" (Sec. 49[b], Rule 39,
Rules of Court). We have previously held that the judgment in an ejectment case may be enforced not
only against the defendants therein but also against the members of their family, their relatives or privies
who derive their right of possession from the defendants (Ariem vs. Delos Angeles, 49 SCRA 343). A
further clarification of the dispositive portion is apparently needed to exclude from the effect of the
judgment in the ejectment case only the petitioners who do not derive their right of possession from any of
the defendants in the ejectment suit.

Fernando, C.J., Teehankee, Melencio-Herrera, Plana, Makasiar and De Castro, JJ., concurs.

Separate Opinions

VASQUEZ, J., concurring:

I concur with the very ably written main opinion. However, I wish to erase any possible erroneous
impression that may be derived from the dispositive portion insofar as it declares that the judgment in the
ejectment cage may not be enforced against the petitioners who were not defendants in Civil Case No.
3711 and over whom the lower court did not acquire jurisdiction.

The judgment in any case is binding and enforceable not only against the parties thereto but also against
"their successors in interest by title subsequent to the commencement of the action" (Sec. 49[b], Rule 39,
Rules of Court). We have previously held that the judgment in an ejectment case may be enforced not
only against the defendants therein but also against the members of their family, their relatives or privies
who derive their right of possession from the defendants (Ariem vs. Delos Angeles, 49 SCRA 343). A
further clarification of the dispositive portion is apparently needed to exclude from the effect of the
judgment in the ejectment case only the petitioners who do not derive their right of possession from any of
the defendants in the ejectment suit.

* According to respondent corporation, some of the adverse claimants or protestants were not landless farmers but
were well-educated persons belonging to the middle class. Thus, Elpidio Okay was an elementary school principal.
Vicente Rehoy was a landowner and barrio captain. Patricio de Leon was a cashier and later assistant branch manager
of the Philippine National Baank. Ernesto Pañares was a high school teacher and later a college professor. Francisco
Mateo was a former college dean (p. 105, Rollo).

According to the 44 petitioners, they are tillers of the soil (p. 126, Rollo).
The Lawphil Project - Arellano Law Foundation

EN BANC

[G.R. No. 110249.  August 21, 1997]

ALFREDO TANO, BALDOMERO TANO, DANILO TANO, ROMUALDO TANO, TEOCENES MIDELLO,
ANGEL DE MESA, EULOGIO TREMOCHA, FELIPE ONGONION, JR., ANDRES LINIJAN, ROBERT LIM,
VIRGINIA LIM, FELIMON DE MESA, GENEROSO ARAGON, TEODORICO ANDRE, ROMULO DEL
ROSARIO, CHOLITO ANDRE, ERICK MONTANO, ANDRES OLIVA, VITTORIO SALVADOR, LEOPOLDO
ARAGON, RAFAEL RIBA, ALEJANDRO LEONILA, JOSE DAMACINTO, RAMIRO MANAEG, RUBEN
MARGATE, ROBERTO REYES, DANILO PANGARUTAN, NOE GOLPAN,ESTANISLAO ROMERO,
NICANOR DOMINGO, ROLDAN TABANG, PANGANIBAN, ADRIANO TABANG, FREDDIE SACAMAY,
MIGUEL TRIMOCHA, PACENCIO LABABIT, PABLO H. OMPAD, CELESTINO A. ABANO, ALLAN
ALMODAL, BILLY D. BARTOLAY, ALBINO D. LIQUE, MELCHOR J. LAYSON, MELANI AMANTE,
CLARO E. YATOC, MERGELDO B. BALDEO, EDGAR M. ALMASET A., JOSELITO MANAEG, LIBERATO
ANDRADA, JR., ROBERTO BERRY, RONALD VILLANUEVA, EDUARDO VALMORIA, WILDREDO
MENDOZA, NAPOLEON BABANGA, ROBERTO TADEPA, RUBEN ASINGUA, SILVERIO GABO, JERRY
ROMERO, DAVID PANGAGARUTAN, DANIEL PANGGARUTAN, ROMEO AGAWIN, FERNANDO EQUIZ,
DITO LEQUIZ, RONILO ODERABLE, BENEDICTO TORRES, ROSITO A. VALDEZ, CRESENCIO A.
SAYANG, NICOMEDES S. ACOSTA, ERENEO A. SEGARINO, JR., WILDREDO A. RAUTO, DIOSDADO A.
ACOSTA, BONIFACIO G. SISMO, TACIO ALUBA, DANIEL B. BATERZAL, ELISEO YBAÑEZ, DIOSDADO
E. HANCHIC, EDDIE ESCALICAS, ELEAZAR B.  BATERZAL,  DOMINADOR  HALICHIC, ROOSEVELT
RISMO-AN, ROBERT C. MERCADER, TIRSO ARESGADO, DANIEL CHAVEZ, DANILO CHAVEZ,
VICTOR VILLAROEL, ERNESTO C. YABANEZ, ARMANDO T. SANTILLAN, RUDY S. SANTILLAN,
JODJEN ILUSTRISIMO, NESTOR SALANGRON, ALBERTO SALANGRON, ROGER L. ROXAS,
FRANCISCO T. ANTICANO, PASTOR SALANGRON, BIENVENIDO SANTILLAN, GILBUENA LADDY,
FIDEL BENJAMIN JOVELITO BELGANO, HONEY PARIOL, ANTONIO SALANGRON, NICASIO
SALANGRON, & AIRLINE SHIPPERS ASSOCIATION OF PALAWAN, petitioners, vs. GOV. SALVADOR P.
SOCRATES, MEMBERS OF SANGGUNIAN PANLALAWIGAN OF PALAWAN, namely, VICE-GOVERNOR
JOEL T. REYES, JOSE D.  ZABALA, ROSALINO R. ACOSTA, JOSELITO A. CADLAON, ANDRES R.
BAACO, NELSON P. PENEYRA, CIPRIANO C. BARROMA, CLARO E. ORDINARIO, ERNESTO A.
LLACUN, RODOLFO C. FLORDELIZA, GILBERT S. BAACO, WINSTON G. ARZAGA, NAPOLEON F.
ORDONEZ and GIL P. ACOSTA, CITY MAYOR EDWARD HAGEDORN, MEMBERS OF SANGGUNIANG
PANLUNGSOD NG PUERTO PRINCESA, ALL MEMBERS OF BANTAY DAGAT, MEMBERS OF
PHILIPPINE NATIONAL POLICE OF PALAWAN, PROVINCIAL AND CITY PROSECUTORS OF
PALAWAN and PUERTO PRINCESA CITY, and ALL JUDGES OF PALAWAN, REGIONAL, MUNICIPAL
AND METROPOLITAN, respondents.

DECISION

DAVIDE, JR., J.:

Petitioners caption their petition as one for “Certiorari, Injunction With Preliminary Mandatory Injunction,with
Prayer for Temporary Restraining Order” and pray that this Court: (1) declare as unconstitutional: (a) Ordinance No.
15-92, dated 15 December 1992, of the Sangguniang Panlungsod of Puerto Princesa; (b) Office Order No. 23,
Series of 1993, dated 22 January 1993, issued by Acting City Mayor Amado L. Lucero of Puerto Princesa City; and
(c) Resolution No. 33, Ordinance No. 2, Series of 1993, dated 19 February 1993, of the Sangguniang Panlalawigan
of Palawan; (2) enjoin the enforcement thereof; and (3) restrain respondents Provincial and City Prosecutors of
Palawan and Puerto Princesa City and Judges of Regional Trial Courts, Metropolitan Trial Courts and Municipal
Circuit Trial Courts in Palawan from assuming jurisdiction over and hearing cases concerning the violation of the
Ordinances and of the Office Order.
More appropriately, the petition is, and shall be treated as, a special civil action for certiorari and prohibition.

The following is petitioners’ summary of the factual antecedents giving rise to the petition:

1.       On December 15, 1992, the Sangguniang Panlungsod ng Puerto Princesa City enacted Ordinance No. 15-92
which took effect on January 1, 1993 entitled: “AN ORDINANCE BANNING THE SHIPMENT OF ALL LIVE
FISH AND LOBSTER OUTSIDE PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1, 1998
AND PROVIDING EXEMPTIONS, PENALTIES AND FOR OTHER PURPOSES THEREOF”, the full text of
which reads as follows:

“Section 1.  Title of the Ordinance. - This Ordinance is entitled: AN ORDINANCE BANNING THE SHIPMENT
OF ALL LIVE FISH AND LOBSTER OUTSIDE PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO
JANUARY 1, 1998 AND PROVIDING EXEMPTIONS, PENALTIES AND FOR OTHER PURPOSES
THEREOF.

Section 2.  Purpose, Scope and Coverage. - To effectively free our City Sea Waters from Cyanide and other
Obnoxious substance, and shall cover all persons and/or entities operating within and outside the City of Puerto
Princesa who is are [sic] directly or indirectly in the business or shipment of live fish and lobster outside the City.

Section 3.  Definition of terms. - For purpose of this Ordinance the following are hereby defined:

A.  SEA BASS - A kind of fish under the family of Centropomidae, better known as APAHAP;

B.  CATFISH - A kind of fish under the family of Plotosidae, better known as HITO-HITO;

C.  MUDFISH - A kind of fish under the family of Orphicaphalisae better known as DALAG

D.  ALL LIVE FISH -  All alive, breathing not necessarily moving of all specie[s] use for food and for aquarium
purposes.

E.  LIVE LOBSTER - Several relatively, large marine crustaceans of the genus Homarus that are alive and breathing
not necessarily moving.

Section 4.  It shall be unlawful [for] any person or any business enterprise or company to ship out from Puerto
Princesa City to any point of destination either via aircraft or seacraft of any live fish and lobster except SEA BASS,
CATFISH, MUDFISH, AND MILKFISH FRIES.

Section 5.  Penalty Clause.  - Any person/s and or business entity violating this Ordinance shall be penalized with a
fine of not more than P5,000.00 or imprisonment of not more than twelve (12) months, cancellation of their permit
to do business in the City of Puerto Princesa or all of the herein stated penalties, upon the discretion of the court.

Section 6.  If the owner and/or operator of the establishment found vilating the provisions of this ordinance is a
corporation or a partnership, the penalty prescribed in Section 5 hereof shall be imposed upon its president and/or
General Manager or Managing Partner and/or Manager, as the case maybe [sic].

Section 7.  Any existing ordinance or any provision of any ordinance inconsistent to [sic] this ordinance is deemed
repealed.

Section 8.  This Ordinance shall take effect on January 1, 1993.

SO ORDAINED.”
xxx

2.       To implement said city ordinance, then Acting City Mayor Amado L. Lucero issued Office Order No. 23,
Series of 1993 dated January 22, 1993 which reads as follows:

“In the interest of public service and for purposes of City Ordinance No. PD426-14-74, otherwise known as ‘AN
ORDINANCE REQUIRING ANY PERSON ENGAGED OR INTENDING TO ENGAGE IN ANY BUSINESS,
TRADE, OCCUPATION, CALLING OR PROFESSION OR HAVING IN HIS POSSESSION ANY OF THE
ARTICLES FOR WHICH A PERMIT IS REQUIRED TO BE HAD, TO OBTAIN FIRST A MAYOR’S PERMIT”
and “City Ordinance No. 15-92, AN ORDINANCE BANNING THE SHIPMENT OF ALL LIVE FISH AND
LOBSTER OUTSIDE PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1, 1998, you are
hereby authorized and directed to check or conduct necessary inspections on cargoes containing live fish and lobster
being shipped out from the Puerto Princesa Airport, Puerto Princesa Wharf or at any port within the jurisdiction of 
the City to any point of destinations [sic] either via aircraft or seacraft.

The purpose of the inspection is to ascertain whether the shipper possessed the required Mayor’s Permit issued by
this Office and the shipment is covered by invoice or clearance issued by the local office of the Bureau of Fisheries
and Aquatic Resources and as to compliance with all other existing rules and regulations on the matter.

Any cargo containing live fish and lobster without the required documents as stated herein must be held for proper
disposition.

In the pursuit of this Order, you are hereby authorized to coordinate with the PAL Manager, the PPA Manager, the
local PNP Station and other offices concerned for the needed support and cooperation.  Further, that the usual
courtesy and diplomacy must be observed at all times in the conduct of the inspection.

Please be guided accordingly.”

xxx

3.       On February 19, 1993, the Sangguniang Panlalawigan, Provincial Government of Palawan enacted Resolution
No. 33 entitled: “A RESOLUTION PROHIBITING THE CATCHING, GATHERING, POSSESSING, BUYING,
SELLING AND SHIPMENT OF LIVE MARINE CORAL DWELLING AQUATIC ORGANISMS, TO WIT:
FAMILY: SCARIDAE (MAMENG), EPINE PHELUS FASCIATUS (SUNO).  CROMILEPTES ALTIVELIS
(PANTHER OR SENORITA), LOBSTER BELOW 200 GRAMS AND SPAWNING, TRADACNA GIGAS
(TAKLOBO), PINCTADA MARGARITEFERA (MOTHER PEARL, OYSTERS, GIANT CLAMS AND OTHER
SPECIES), PENAEUS MONODON (TIGER PRAWN-BREEDER SIZE OR MOTHER), EPINEPHELUS
SUILLUS (LOBA OR GREEN GROUPER) AND FAMILY: BALISTIDAE (TROPICAL AQUARIUM FISHES)
FOR A PERIOD FIVE (5) YEARS IN AND COMING FROM PALAWAN WATERS”, the full text of which reads
as follows:

“WHEREAS, scientific and factual researches [sic] and studies disclose that only five (5) percent of the corals of our
province remain to be in excellent condition as [a] habitat of marine coral dwelling aquatic organisms;

WHEREAS, it cannot be gainsaid that the destruction and devastation of the corals of our province were principally
due to illegal fishing activities like dynamite fishing, sodium cyanide fishing, use of other obnoxious substances and
other related activities;

WHEREAS, there is an imperative and urgent need to protect and preserve the existence of the remaining excellent
corals and allow the devastated ones to reinvigorate and regenerate themselves into vitality within the span of five
(5) years;
WHEREAS, Sec. 468, Par. 1, Sub-Par. VI of the [sic] R.A. 7160 otherwise known as the Local Government Code of
1991 empowers the Sangguniang Panlalawigan to protect the environment and impose appropriate penalties [upon]
acts which endanger the environment such as dynamite fishing and other forms of destructive fishing, among others.

NOW, THEREFORE, on motion by Kagawad Nelson P. Peneyra and upon unanimous decision of all the members
present;

Be it resolved as it is hereby resolved, to approve Resolution No. 33, Series of 1993 of the Sangguniang
Panlalawigan and to enact Ordinance No. 2 for the purpose, to wit:

ORDINANCE NO. 2
Series of 1993

BE IT ORDAINED BY THE SANGGUNIANG PANLALAWIGAN IN SESSION ASSEMBLED:

Section 1.  TITLE - This Ordinance shall be known as an “Ordinance Prohibiting the catching, gathering,
possessing, buying, selling and shipment of live marine coral dwelling aquatic organisms, to wit: 1.  Family:
Scaridae (Mameng), 2. Epinephelus Fasciatus (Suno), 3. Cromileptes altivelis (Panther or Senorita), lobster below
200 grams and spawning), 4.  Tridacna Gigas (Taklobo), 5. Pinctada Margaretefera (Mother Pearl, Oysters, Giant
Clams and other species), 6. Penaeus Monodon (Tiger Prawn-breeder size or mother), 7. Epinephelus Suillus (Loba
or Green Grouper) and 8. Family: Balistidae (Topical Aquarium Fishes) for a period of five (5) years in and coming
from Palawan Waters.

Section II.  PRELIMINARY CONSIDERATIONS

1.  Sec. 2-A (Rep. Act 7160).  It is hereby declared, the policy of the state that the territorial and political
subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest
development as self reliant communities and make them more effective partners in the attainment of national goals. 
Toward this end, the State shall provide for [a] more responsive and accountable local government structure
instituted through a system of decentralization whereby local government units shall be given more powers,
authority, responsibilities and resources.

2.  Sec. 5-A (R.A. 7160).  Any provision on a power of [a] local Government Unit shall be liberaly interpreted in its
favor, and in case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower
government units.  “Any fair and reasonable doubts as to the existence of the power shall be interpreted in favor of
the Local Government Unit concerned.”

3.  Sec. 5-C (R.A. 7160).  The general welfare provisions in this Code shall be liberally interpreted to give more
powers to local government units in accelerating economic development and upgrading the quality of life for the
people in the community.

4.  Sec. 16 (R.A. 7160).  General Welfare. - Every local government unit shall exercise the powers expressly
granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient
and effective governance; and those which are essential to the promotion of the general welfare.

Section III.  DECLARATION OF POLICY. - It is hereby declared to be the policy of the Province of Palawan to
protect and conserve the marine resources of Palawan not only for the greatest good of the majority of the present
generation but with [the] proper perspective and consideration of [sic] their prosperity, and to attain this end, the
Sangguniang Panlalawigan henceforth declares that is [sic] shall be unlawful for any person or any business entity to
engage in catching, gathering, possessing, buying, selling and shipment of live marine coral dwelling aquatic
organisms as enumerated in Section 1 hereof in and coming out of Palawan Waters for a period of five (5) years;
Section IV.  PENALTY CLAUSE. - Any person and/or business entity violating this Ordinance shall be penalized
with a fine of not more than Five Thousand Pesos (P5,000.00), Philippine Currency, and/or imprisonment of six (6)
months to twelve (12) months and confiscation and forfeiture of paraphernalias [sic] and equipment in favor of the
government at the discretion of the Court;

Section V.  SEPARABILITY CLAUSE. - If for any reason, a Section or provision of this Ordinance shall be held as
unconditional [sic] or invalid, it shall not affect the other provisions hereof.

Section VI.  REPEALING CLAUSE. - Any existing Ordinance or a provision of any ordinance inconsistent
herewith is deemed modified, amended or repealed.

Section VII.  EFFECTIVITY. - This Ordinance shall take effect ten (10) days after its publication.

SO ORDAINED.”

xxx

4.       The respondents implemented the said ordinances, Annexes “A” and “C” hereof thereby depriving all the
fishermen of the whole province of Palawan and the City of Puerto Princesa of their only means of livelihood and
the petitioners Airline Shippers Association of Palawan and other marine merchants from performing their lawful
occupation and trade;

5.       Petitioners Alfredo Tano, Baldomero Tano, Teocenes Midello, Angel de Mesa, Eulogio Tremocha, and Felipe
Ongonion, Jr. were even charged criminally under criminal case no. 93-05-C in the 1st Municipal Circuit Trial Court
of Cuyo-Agutaya-Magsaysay, an original carbon copy of the criminal complaint dated April 12, 1993 is hereto
attached as Annex “D”; while xerox copies are attached as Annex “D” to the copies of the petition;

6.       Petitioners Robert Lim and Virginia Lim, on the other hand, were charged by the respondent PNP with the
respondent City Prosecutor of Puerto Princesa City, a xerox copy of the complaint is hereto attached as Annex “E”;

Without seeking redress from the concerned local government units, prosecutor’s office and courts, petitioners
directly invoked our original jurisdiction by filing this petition on 4 June 1993. In sum, petitioners contend that:

First, the Ordinances deprived them of due process of law, their livelihood, and unduly restricted them from the
practice of their trade, in violation of Section 2, Article XII and Sections 2 and 7 of Article XIII of the 1987
Constitution.

Second, Office Order No. 23 contained no regulation nor condition under which the Mayor’s permit could be
granted or denied; in other words, the Mayor had the absolute authority to determine whether or not to issue permit.

Third, as Ordinance No. 2 of the Province of Palawan “altogether prohibited the catching, gathering, possession,
buying, selling and shipping of live marine coral dwelling organisms, without any distinction whether it was caught
or gathered through lawful fishing method,” the Ordinance took away the right of petitioners-fishermen to earn their
livelihood in lawful ways; and insofar as petitioners-members of Airline Shippers Association are concerned, they
were unduly prevented from pursuing their vocation and entering “into contracts which are proper, necessary, and
essential to carry out their business endeavors to a successful conclusion.”

Finally, as Ordinance No. 2 of the Sangguniang Panlalawigan is null and void, the criminal cases based thereon
against petitioners Tano and the others have to be dismissed.

In the Resolution of 15 June 1993 we required respondents to comment on the petition, and furnished the Office of
the Solicitor General with a copy thereof.
In their comment filed on 13 August 1993, public respondents Governor Socrates and Members of the Sangguniang
Panlalawigan of Palawan defended the validity of Ordinance No.2, Series of 1993, as a valid exercise of the
Provincial Government’s power under the general welfare clause (Section 16 of the Local Government Code of
1991 [hereafter, LGC]), and its specific power to protect the environment and impose appropriate penalties for acts
which endanger the environment, such as dynamite fishing and other forms of destructive fishing under Section 447
(a) (1) (vi), Section 458 (a) (1) (vi), and Section 468 (a) (1) (vi), of the LGC. They claimed that in the exercise of
such powers, the Province of Palawan had “the right and responsibilty… to insure that the remaining coral reefs,
where fish dwells [sic], within its territory remain healthy for the future generation.” The Ordinance, they further
asserted, covered only live marine coral dwelling aquatic organisms which were enumerated in the ordinance and
excluded other kinds of live marine aquatic organisms  not dwelling in coral reefs; besides the prohibition was for
only five (5) years to protect and preserve the pristine coral and allow those damaged to regenerate.

Aforementioned respondents likewise maintained that there was no violation of due process and equal protection
clauses of the Constitution. As to the former, public hearings were conducted before the enactment of the Ordinance
which, undoubtedly, had a lawful purpose and employed reasonable means; while as to the latter, a substantial
distinction existed “between a fisherman who catches live fish with the intention of selling it live, and a fisherman
who catches live fish with no intention at all of selling it live,” i.e., “the former uses sodium cyanide while the latter
does not.” Further, the Ordinance applied equally to all those belonging to one class.

On 25 October 1993 petitioners filed an Urgent Plea for the Immediate Issuance of a Temporary Restraining Order
claiming that despite the pendency of this case, Branch 50 of the Regional Trial Court of Palawan was bent on
proceeding with Criminal Case No. 11223 against petitioners Danilo Tano, Alfredo Tano, Eulogio Tremocha,
Romualdo Tano, Baldomero Tano, Andres Lemihan and Angel de Mesa for violation of Ordinance No. 2 of the
Sangguniang Panlalawigan of Palawan.  Acting on said plea, we issued on 11 November 1993 a temporary
restraining order directing Judge Angel Miclat of said court to cease and desist from proceeding with the
arraignment and pre-trial of Criminal Case No. 11223.

On 12 July 1994, we excused the Office of the Solicitor General from filing a comment, considering that as claimed
by said office in its Manifestation of 28 June 1994, respondents were already represented by counsel.

The rest of the respondents did not file any comment on the petition.

In the resolution of 15 September 1994, we resolved to consider the comment on the petition as the Answer, gave
due course to the petition and required the parties to submit their respective memoranda.

On 22 April 1997 we ordered impleaded as party respondents the Department of Agriculture and the Bureau of
Fisheries and Aquatic Resources and required the Office of the Solicitor General to comment on their behalf. But in
light of the latter’s motion of 9 July 1997 for an extension of time to file the comment which would only result in
further delay, we dispensed with said comment.

After due deliberation on the pleadings filed, we resolved to dismiss this petition for want of merit, on 22 July 1997,
and assigned it to the ponente for the writing of the opinion of the Court.

There are actually two sets of petitioners in this case.  The first is composed of Alfredo Tano, Baldomero Tano,
Danilo Tano, Romualdo Tano, Teocenes Midello, Angel de Mesa, Eulogio Tremocha, Felipe Ongonion, Jr., Andres
Linijan, and Felimon de Mesa, who were criminally charged with violating Sangguniang Panlalawigan Resolution
No. 33 and Ordinance No. 2, Series of 1993, of the Province of Palawan, in Criminal Case No. 93-05-C of the 1st
Municipal Circuit Trial Court (MCTC) of Palawan; and Robert Lim and Virginia Lim who were charged with
violating City Ordinance No. 15-92 of Puerto Princesa City and Ordinance No. 2, Series of 1993, of the Province of
Palawan before the Office of the City Prosecutor of Puerto Princesa. All of them, with the exception of Teocenes
Midello, Felipe Ongonion, Jr., Felimon de Mesa, Robert Lim and Virginia Lim, are likewise the accused in Criminal
Case No. 11223 for the violation of Ordinance No. 2 of the Sangguniang Panlalawigan of Palawan, pending before
Branch 50 of the Regional Trial Court of Palawan.

The second set of petitioners is composed of the rest of the petitioners numbering seventy-seven (77), all of whom,
except the Airline Shippers Association of Palawan -- an alleged private association of several marine merchants --
are natural persons who claim to be fishermen.

The primary interest of the first set of petitioners is, of course, to prevent the prosecution, trial and determination of
the criminal cases until the constitutionality or legality of the Ordinances they allegedly violated shall have been
resolved. The second set of petitioners merely claim that they being fishermen or marine merchants, they would be
adversely affected by the ordinances.

As to the first set of petitioners, this special civil for certiorari must fail on the ground of prematurity amounting to a
lack of cause of action. There is no showing that the said petitioners, as the accused in the criminal cases, have filed
motions to quash the informations therein and that the same were denied.  The ground available for such motions is
that the facts charged therein do not constitute an offense because the ordinances in question are unconstitutional. It
cannot then be said that the lower courts acted without or in excess of jurisdiction or with grave abuse of discretion
to justify recourse to the extraordinary remedy of certiorari or prohibition.  It must further be stressed that even if
the petitioners did file motions to quash, the denial thereof would not forthwith give rise to a cause of action under
Rule 65 of the Rules of Court.  The general rule is that where a motion to quash is denied, the remedy therefrom is
not certiorari, but for the party aggrieved thereby to go to trial without prejudice to reiterating special defenses
involved in said motion, and if, after trial on the merits of adverse decision is rendered, to appeal therefrom in the
manner authorized by law. And , even where in an exceptional circumstance such denial may be the subject of a
special civil action for certiorari, a motion for reconsideration must have to be filed to allow the court concerned an
opportunity to correct its errors, unless such motion may be dispensed with because of existing exceptional
circumstances. Finally, even if a motion for reconsideration has been filed and denied, the remedy under Rule 65 is
still unavailable absent any showing of the grounds provided for in Section 1 thereof. For obvious reasons, the
petition at bar does not, and could not have , alleged any of such grounds.

As to the second set of petitioners, the instant petition is obviously one for DECLARATORY RELIEF, i.e., for a
declaration that the Ordinances in question are a “nullity ... for being unconstitutional.” As such, their petition must
likewise fail, as this Court is not possessed of original jurisdiction over petitions for declaratory relief even if only
questions of law are involved, it being settled that the Court merely exercises appellate jurisdiction over such
petitions.

II

Even granting arguendo that the first set of petitioners have a cause of action ripe for the extraordinary writ of
certiorari, there is here a clear disregard of the hierarchy of courts, and no special and important reason or
exceptional or compelling circumstance has been adduced why direct recourse to us should be allowed. While we
have concurrent jurisdiction with Regional Trial courts and with the Court of Appeals to issue writs of certiorari,
prohibition, mandamus, quo warranto, habeas corpus and injunction, such concurrence gives petitioners no
unrestricted freedom of choice of court forum, so we held in People v. Cuaresma:

This concurrence of jurisdiction is not… to be taken as according to parties seeking any of the writs an absolute
unrestrained freedom of choice of the court to which application therefor will be directed. There is after all hierarchy
of courts. That hierarchy is determinative of the venue of appeals, and should also serve as a general determinant of
the appropriate forum for petitions for the extraordinary writs.  A becoming regard for that judicial hierarchy most
certainly indicates that petitions for the issuance of extraordinary writs against first level (“inferior”) courts should
be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of
the Supreme Court’s original jurisdiction to issue these writs should be allowed only when there are special and
important reasons therefor, clearly and specifically set out in the petition. This is established policy. It is a policy
necessary to prevent inordinate demands upon the Court’s time and attention which are better devoted to those
matters within its exclusive jurisdiction, and to prevent further over-crowding of the Court’s docket….
The Court feels the need to reaffirm that policy at this time, and to enjoin strict adherence thereto in the light of what
it perceives to be a growing tendency on the part of litigants and lawyers to have their applications for the so-called
extraordinary writs, and sometimes even their appeals, passed upon and adjudicated directly and immediately by the
highest tribunal of the land….

In Santiago v. Vasquez, this Court forcefully expressed that the propensity of litigants and lawyers to disregard the
hierarchy of courts must be put to a halt, not only because of the imposition upon the precious time of this Court, but
also because of the inevitable and resultant delay, intended or otherwise, in the adjudication of the case which often
has to be remanded or referred to the lower court, the proper forum under the rules of procedure, or as better
equipped to resolve the issues since this Court is not a trier of facts. We reiterated “the judicial policy that this Court
will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts or where
exceptional and compelling circumstances justify availment of a remedy within and calling for the exercise of [its]
primary jurisdiction.”

III

Notwithstanding the foregoing procedural obstacles against the first set of petitioners, we opt to resolve this case on
its merits considering that the lifetime of the challenged Ordinances is about to end. Ordinance No. 15-92 of the City
of Puerto Princesa is effective only up to 1 January 1998, while Ordinance No. 2 of the Province of Palawan,
enacted on 19 February 1993, is effective for only five (5) years. Besides, these Ordinances were undoubtedly
enacted in the exercise of powers under the new LGC relative to the protection and preservation of the environment
and are thus novel and of paramount importance. No further delay then may be allowed in the resolution of the
issues raised.

It is of course settled that laws (including ordinances enacted by local government units) enjoy the presumption of
constitutionality. To overthrow this presumption, there must be a clear and unequivocal breach of the Constitution,
not merely a doubtful or argumentative contradiction. In short, the conflict with the Constitution must be shown
beyond reasonable doubt. Where doubt exists, even if well founded, there can be no finding of unconstitutionality.
To doubt is to sustain.

After a scrunity of the challenged  Ordinances and the provisions  of the Constitution petitioners claim to have been
violated, we find petitioners’ contentions baseless and so hold that the former do not suffer from any infirmity, both
under the Constitution and applicable laws.

Petitioners specifically point to Section 2, Article XII and Sections 2 and 7, Article XIII of the Constitution as
having been transgressed by the Ordinances.

The pertinent portion of Section 2 of Article XII reads:

SEC. 2.              x  x  x

The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea, and exclusive economic
zone, and reserve its use and enjoyment exclusively to Filipino citizens.

The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as
cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes, bays, and lagoons.

Sections 2 and 7 of Article XIII provide:

Sec. 2.  The promotion of social justice shall include the commitment to create economic opportunities based on
freedom of initiative and self-reliance.

xxx
SEC. 7.   The State shall protect the rights of subsistence fishermen, especially of local communities, to the
preferential use of the communal marine and fishing resources, both inland and offshore.  It shall provide support to
such fishermen through appropriate technology and research, adequate financial, production, and marketing
assistance, and other services.  The State shall also protect, develop, and conserve such resources.  The protection
shall extend to offshore fishing grounds of subsistence fishermen against foreign intrusion.  Fishworkers shall
receive a just share from their labor in the utilization of marine and fishing resources.

There is absolutely no showing that any of the petitioners qualifies as a subsistence or marginal fisherman.  In their
petition, petitioner Airline Shippers Association of Palawan is described as “a private association composed of
Marine Merchants”; petitioners Robert Lim and Virginia Lim, as “merchants;” while the rest of the petitioners claim
to be “fishermen,” without any qualification, however, as to their status.

Since the Constitution does not specifically provide a definition of the terms “subsistence” or “marginal” fishermen,
they should be construed in their general and ordinary sense.  A marginal fisherman is an individual engaged in
fishing whose margin of return or reward in his harvest of fish as measured by existing price levels is barely
sufficient to yield a profit or cover the cost of gathering the fish, while a subsistence fisherman is one whose catch
yields but the irreducible minimum for his livelihood. Section 131(p) of the LGC (R.A. No. 7160) defines a
marginal farmer or fisherman as “an  individual engaged in subsistence farming or fishing which shall be limited to
the sale, barter or exchange of agricultural or marine products produced by himself and his immediate family.” It
bears repeating that nothing in the record supports a finding that any petitioner falls within these definitions.

Besides, Section 2 of Article XII aims primarily not to bestow any right to subsistence fishermen, but to lay stress on
the duty of the State to protect the nation’s marine wealth.  What the provision merely recognizes is that the State
may allow, by law, cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes,
bays, and lagoons. Our survey of the statute books reveals that the only provision of law which speaks of the
preferential right of marginal fishermen is Section 149 of the LGC of 1991 which pertinently provides:

SEC. 149.  Fishery Rentals, Fees and Charges.   --   x x x

(b)   The sangguniang bayan may:

(1)     Grant fishery privileges to erect fish corrals, oyster, mussels or other aquatic beds or bangus fry areas, within a
definite zone of the municipal waters, as determined by it: Provided, however, That duly registered organizations
and cooperatives of marginal fishermen shall have preferential right to such fishery privileges ....

In a Joint Administrative Order No. 3, dated 25 April 1996, the Secretary of the Department of Agriculture and the
Secretary of the Department of Interior and Local Government prescribed the guidelines on the preferential
treatment of small fisherfolk relative to the fishery right mentioned in Section 149.  This case, however, does not
involve such fishery right.

Anent Section 7 of Article XIII, it speaks not only of the use of communal marine and fishing resources, but of their
protection, development, and conservation.  As hereafter shown, the ordinances in question are meant precisely to
protect and conserve our marine resources to the end that their enjoyment by the people may be guaranteed not only
for the present generation, but also for the generations to come.

The so-called “preferential right” of subsistence or marginal fishermen to the use of marine resources is not at all
absolute.  In accordance with the Regalian Doctrine, marine resources belong to the State, and, pursuant to the first
paragraph of Section 2, Article XII of the Constitution, their “exploration, development and utilization ... shall be
under the full control and supervision of the State.”  Moreover, their mandated protection, development, and
conservation as necessarily recognized by the framers of the Constitution, imply certain restrictions on whatever
right of enjoyment there may be in favor of anyone.  Thus, as to the curtailment of the preferential treatment of
marginal fisherman, the following exchange between Commissioner Francisco Rodrigo and Commissioner Jose F.S.
Bengzon, Jr., took place at the plenary session of the Constitutional Commission:
MR. RODRIGO:

Let us discuss the implementation of this because I would not raise the hopes of our people, and
afterwards fail in the implementation.  How will this be implemented?  Will there be a licensing or giving
of permits so that government officials will know that one is really a marginal fisherman?  Or if
policeman say that a person is not a marginal fisherman, he can show his permit, to prove that indeed he
is one.

MR. BENGZON:

Certainly, there will be some mode of licensing insofar as this is concerned and this particular question
could be tackled when we discuss the Article on Local Governments -- whether we will leave to the local
governments or to Congress on how these things will be implemented.  But certainly, I think our
Congressmen and our local officials will not be bereft of ideas on how to implement this mandate.

x  x  x

MR. RODRIGO:

So, once one is licensed as a marginal fisherman, he can go anywhere in the Philippines and fish in any
fishing grounds.

MR. BENGZON:

Subject to whatever rules and regulations and local laws that may be passed, may be existing or will be
passed. (underscoring supplied for emphasis).

What must likewise be borne in mind is the state policy enshrined in the Constitution regarding the duty of the State
to protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and
harmony of nature. On this score, in Oposa v. Factoran, this Court declared:

While the right to balanced and healthful ecology is to be found under the Declaration of Principles the State
Policies and not under the Bill of Rights, it does not follow that it is less important than any of the civil and political
rights enumerated in the latter. Such a right belongs to a different category of rights altogether for it concerns
nothing less than self-preservation and self-perpetuation - aptly and fittingly stressed by the petitioners - the
advancement of which may even be said to predate all governments and constitutions. As a matter of fact, these
basic rights need not even be written in the Constitution for they are assumed to exist from the inception of
humankind. If they are now explicitly mentioned in the fundamental charter, it is because of the well-founded fear of
its framers that unless the rights to a balanced and healthful ecology and to health are mandated as state policies by
the Constitution itself, thereby highlighting their continuing importance and imposing upon the state a solemn
obligation to preserve the first and protect and advance the second , the day would not be too far when all else would
be lost not only for the present generation, but also for those to come - generations which stand to inherit nothing but
parched earth incapable of sustaining life.

The right to a balanced and healthful ecology carries with it a correlative duty to refrain from impairing the
environment ...

The LGC provisions invoked by private respondents merely seek to give flesh and blood to the right of the people to
a balanced and healthful ecology. In fact, the General Welfare Clause, expressly mentions this right:

SEC. 16. General Welfare.-- Every local government unit shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective
governance, and those which are essential to the promotion of the general welfare. Within their respective territorial
jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment
of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support
the development of appropriate and self-reliant scientific and technological capabilities, improve public morals,
enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and
order, and preserve the comfort and convenience of their inhabitants. (underscoring supplied).

Moreover, Section 5(c) of the LGC explicitly mandates that the general welfare provisions of the LGC “shall be
liberally interpreted to give more powers to the local government units in accelerating economic development and
upgrading the quality of life for the people of the community.”

The LGC vests municipalities with the power to grant fishery privileges in municipal waters and to impose rentals,
fees or charges therefor; to penalize, by appropriate ordinances, the use of explosives, noxious or poisonous
substances, electricity, muro-ami, and other deleterious methods of fishing; and to prosecute any violation of the
provisions of applicable fishery laws. Further, the sangguniang bayan, the sangguniang panlungsod and the
sangguniang panlalawigan are directed to enact ordinances for the general welfare of the municipality and its
inhabitants, which shall include, inter alia, ordinances that “[p]rotect the environment and impose appropriate
penalties for acts which endanger the environment such as dynamite fishing and other forms of destructive fishing ...
and such other activities which result in pollution, acceleration of eutrophication of rivers and lakes or of ecological
imbalance.”

Finally, the centerpiece of LGC is the system of decentralization as expressly mandated by the Constitution.
Indispensable thereto is devolution and the LGC expressly provides that “[a]ny provision on a power of a local
government unit shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall be
resolved in favor of devolution of powers and of the lower local government unit. Any fair and reasonable doubt as
to the existence of the power shall be interpreted in favor of the local government unit concerned,” Devolution refers
to the act by which the National Government confers power and authority upon the various local government units
to perform specific functions and responsibilities.

One of the devolved powers enumerated in the section of the LGC on devolution is the enforcement of fishery laws
in municipal waters including the conservation of mangroves. This necessarily includes enactment of ordinances to
effectively carry out such fishery laws within the municipal waters.

The term “municipal waters,” in turn, include not only streams, lakes, and tidal waters within the municipality, not
being the subject of private ownership and not comprised within the national parks, public forest, timber lands,
forest reserves, or fishery reserves, but also marine waters included between two lines drawn perpendicularly to the
general coastline from points where the boundary lines of the municipality or city touch the sea at low tide and a
third line parallel with the general coastline and fifteen kilometers from it. Under P.D. No. 704, the marine waters
included in municipal waters is limited to three nautical miles from the general coastline using the above
perpendicular lines and a third parallel line.

These “fishery laws” which local government units may enforce under Section 17(b), (2), (i) in municipal waters
include: (1) P.D. No. 704; (2) P.D. No. 1015 which, inter alia, authorizes the establishment of a “closed season” in
any Philippine water if necessary for conservation or ecological purposes; (3) P.D. No. 1219 which provides for the
exploration, exploitation, utilization, and conservation of coral resources; (4) R.A. No. 5474, as amended by B.P.
Blg. 58, which makes it unlawful for any person, association, or corporation to catch or cause to be caught, sell,
offer to sell, purchase, or have in possession any of the fish specie called gobiidae or “ipon” during closed season;
and (5) R.A. No. 6451 which prohibits and punishes electrofishing, as well as various issuances of the BFAR.

To those specifically devolved insofar as the control and regulation of fishing in municipal waters and the protection
of its marine environment are concerned, must be added the following:

1.  Issuance of permits to construct fish cages within municipal waters;

2.  Issuance of permits to gather aquarium fishes within municipal waters;
3.  Issuance of permits to gather kapis shells within municipal waters;
 4.  Issuance of permits to gather/culture shelled mollusks within municipal waters;
5.  Issuance of licenses to establish seaweed farms within municipal waters;
6.  Issuance of licenses to establish culture pearls within municipal waters;
7.  Issuance of auxiliary invoice to transport fish and fishery products; and
8.  Establishment of “closed season” in municipal waters.

These functions are covered in the Memorandum of Agreement of 5 April 1994 between the Department of
Agriculture and the Department of Interior and Local Government.

In light then of the principles of decentralization and devolution enshrined in the LGC and the powers granted to
local government units under Section 16 (the General Welfare Clause), and under Sections 149, 447 (a) (1) (vi), 458
(a) (1) (vi) and 468 (a) (1) (vi), which unquestionably involve the exercise of police power, the validity of the
questioned Ordinances cannot be doubted.

Parenthetically, we wish to add that these Ordinances find full support under R.A. No. 7611, otherwise known as the
Strategic Environmental Plan (SEP) for Palawan Act, approved on 19 July 1992.  This statute adopts a
“comprehensive framework for the sustainable development of Palawan compatible with protecting and enhancing
the natural resources and endangered environment of the province,” which “shall serve to guide the local
government of Palawan and the government agencies concerned in the formulation and implementation of plans,
programs and projects affecting said province.”

At this time then, it would be appropriate to determine the relation between the assailed Ordinances and the
aforesaid powers of the Sangguniang Panlungsod of the City of Puerto Princesa and the Sangguniang Panlalawigan
of the Province of Palawan to protect the environment.  To begin, we ascertain the purpose of the Ordinances as set
forth in the statement of purposes or declaration of policies quoted earlier.

It is clear to the Court that both Ordinances have two principal objectives or purposes: (1) to establish a “closed
season” for the species of fish or aquatic animals covered therein for a period of five years, and (2) to protect the
corals of the marine waters of the City of Puerto Princesa and the Province of Palawan from further destruction due
to illegal fishing activities.

The accomplishment of the first objective is well within the devolved power to enforce fishery laws in municipal
waters, such as P.D. No. 1015, which allows the establishment of “closed seasons.” The devolution of such power
has been expressly confirmed in the Memorandum of Agreement of 5 April 1994 between the Department of
Agriculture and the Department of Interior and Local Government.

The realization of the second objective falls within both the general welfare clause of the LGC and the express
mandate thereunder to cities and provinces to protect the environment and impose appropriate penalties for acts
which endanger the environment.

The destruction of the coral reefs results in serious, if not irreparable, ecological imbalance, for coral reefs are
among the nature’s life-support systems. They collect, retain, and recycle nutrients for adjacent nearshore areas such
as mangroves, seagrass beds, and reef flats;  provide food for marine plants and animals; and serve as a protective
shelter for aquatic organisms. It is said that “[e]cologically, “the reefs are to the oceans what forests are to
continents: they are shelter and breeding grounds for fish and plant species that will disappear without them.”

The prohibition against catching live fish stems, in part, from the modern phenomenon of  live-fish trade which
entails the catching of so-called exotic tropical species of fish not only for aquarium use in the West, but also for
“the market for live banquet fish [which] is virtually insatiable in ever more affluent Asia. These exotic species are
coral-dwellers, and fishermen catch them by “diving in shallow water with corraline habitats and squirting sodium
cyanide poison at passing fish directly or onto coral crevices; once affected the fish are immobilized [merely
stunned] and then scooped by hand.” The diver then surfaces and dumps his catch into a submerged net attached to
the skiff .  Twenty minutes later, the fish can swim normally.  Back on shore, they are placed in holding pens, and
within a few weeks, they expel the cyanide from their system and are ready to be hauled.  Then they are placed in
saltwater tanks or packaged in plastic bags filled with seawater for shipment by air freight to major markets for live
food fish. While the fish are meant to survive, the opposite holds true for their former home as “[a]fter the fisherman
squirts the cyanide, the first thing to perish is the reef algae, on which fish feed.  Days later, the living coral starts to
expire.  Soon the reef loses its function as habitat for the fish, which eat both the algae and invertebrates that cling to
the coral.  The reef becomes an underwater graveyard, its skeletal remains brittle, bleached of all color and
vulnerable to erosion from the pounding of the waves.” It has been found that cyanide fishing kills most hard and
soft corals within three months of repeated application.

The nexus then between the activities barred by Ordinance No. 15-92 of the City of Puerto Princesa and the
prohibited  acts provided in Ordinance No. 2, Series of 1993 of the Province of Palawan, on one hand, and the use of
sodium cyanide, on the other, is painfully obvious. In sum, the public purpose and reasonableness of the Ordinances
may not then be controverted.

As to Office Order No. 23, Series of 1993, issued by Acting City Mayor Amado L. Lucero of the City of Puerto
Princesa, we find nothing therein violative of any constitutional or statutory provision. The Order refers to the
implementation of the challenged ordinance and is not the Mayor’s Permit.

The dissenting opinion of Mr. Justice Josue N. Bellosillo relies upon the lack of authority on the part of the
Sangguniang Panlungsod of Puerto Princesa to enact Ordinance No. 15, Series of 1992, on the theory that the
subject thereof is within the jurisdiction and responsibility of the Bureau of Fisheries and Aquatic Resources
(BFAR) under P.D. No. 704, otherwise known as the Fisheries Decree of 1975; and that, in any event, the Ordinance
is unenforceable for lack of approval by the Secretary of the Department of Natural Resources (DNR), likewise in
accordance with P.D. No. 704.

The majority is unable to accommodate this view. The jurisdiction and responsibility of the BFAR under P. D. no.
704, over the management, conservation, development, protection, utilization and disposition of all fishery and
aquatic resources of the country is not all-encompassing. First, Section 4 thereof excludes from such jurisdiction and
responsibility municipal waters, which shall be under the municipal or city government concerned, except insofar as
fishpens and seaweed culture in municipal in municipal centers are concerned. This section provides, however, that
all municipal or city ordinances and resolutions affecting fishing and fisheries and any disposition thereunder shall
be submitted to the Secretary of the Department of Natural Resources for appropriate action and shall have full force
and effect only upon his approval.

Second, it must at once be pointed out that the BFAR is no longer under the Department of Natural Resources (now
Department of Environment and Natural Resources). Executive Order No. 967 of 30 June 1984 transferred the
BFAR from the control and supervision of the Minister (formerly Secretary) of Natural Resources to the Ministry of
Agriculture and Food (MAF) and converted it into a mere staff agency thereof, integrating its functions with the
regional offices of the MAF.

In Executive Order No. 116 of 30 January 1987, which reorganized the MAF, the BFAR was retained as an attached
agency of the MAF. And under the Administrative Code of 1987, the BFAR is placed under the Title concerning the
Department of Agriculture.

Therefore, it is incorrect to say that the challenged Ordinance of the City of Puerto Princesa is invalid or
unenforceable because it was not approved by the Secretary of the DENR. If at all, the approval that should be
sought would be that of the Secretary of the Department of Agriculture (not DENR) of municipal ordinances
affecting fishing and fisheries in municipal waters has been dispensed with in view of the following reasons:

(1)             Section 534 (Repealing Clause) of the LGC expressly repeals or amends Section 16 and 29 of P.D. No.
704 insofar that they are inconsistent with the provisions of the LGC.

(2)             As discussed earlier, under the general welfare clause of the LGC, local government units have the
power, inter alia, to enact ordinances to enhance the right of the people to a balanced ecology.  It likewise
specifically vests municipalities with the power to grant fishery privileges in municipal waters, and impose rentals,
fees or charges therefor; to penalize, by appropriate ordinances, the use of explosives, noxious or poisonous
substances, electricity, muro-ami, and other deleterious methods of fishing; and to prosecute other methods of
fishing; and to prosecute any violation of the provisions of applicable fishing laws. Finally, it imposes upon the
sangguniang bayan, the sangguniang panlungsod, and the sangguniang panlalawigan the duty to enact ordinances
to “[p]rotect the environment and impose appropriate penalties for acts which endanger the environment such as
dynamite fishing and other forms of destructive fishing… and such other activities which result in pollution,
acceleration of eutrophication of rivers and lakes or of ecological imbalance.”

In closing, we commend the Sangguniang Panlungsod of the City of Puerto Princesa and Sangguniang
Panlalawigan of the Province of Palawan for exercising the requisite political will to enact urgently needed
legislation to protect and enhance the marine environment, thereby sharing in the herculean task of arresting the tide
of ecological destruction. We hope that other local government units shall now be roused from their lethargy and
adopt a more vigilant stand in the battle against the decimation of our legacy to future generations. At this time, the
repercussions of any further delay in their response may prove disastrous, if not, irreversible.

WHEREFORE, the instant petition is DISMISSED for lack of merit and the temporary restraining order issued on
11 November 1993 is LIFTED.

No pronouncement as to costs.

SO ORDERED.

Narvasa, C.J., Padilla, Vitug, Panganiban, and Torres, Jr., JJ., concur.

Romero, Melo, Puno, and Francisco, JJ., joined the ponencias of Justices Davide and Mendoza.

Bellosillo, J., see dissenting opinion.

Kapunan and Hermosisima, Jr., JJ., join Justice Bellosillo in his dissenting opinion.

Mendoza, see concurring opinion.

Regalado, J., on official leave.

None, however, exists in Puerto Princesa City.

Petitioners filed their Memorandum on 24 October 1994.  Respondents City Mayor Hagedorn and Members of the
Sangguniang Panlungsod of the City of Puerto Princesa filed their Memorandum on 25 January 1995, while
respondents Governor Socrates and Members of the Sangguniang Panlalawigan of Palawan filed their Memorandum
on 31 January 1995.

Annex “D” of Petition, Rollo, 35.

Annex “E” of Petition; id, 36.

Annex “A” to “A-5” inclusive of Urgent Plea for the Immediate Issuance of Temporary Restraining Order, Rollo, 86
et seq.

VICENTE J. FRANCISCO, THE REVISED RULES OF COURT IN THE PHILIPPINES, CRIMINAL PROCEDURE, 582 (2nd
ed. 1969), citing U.S. v. Pompeya, 31 Phil. 245 [1915].
Acharon v. Purisima, 13 SCRA 309, 311 [1965]; Cruz v. Court of Appeals, 194 SCRA 145, 152-153 [1991]; Yap v.
Intermediate Appellate Court, 220 SCRA 245, 253 [1993]; People v. Bans, supra note 7.

Liberty Insurance Corporation v. Court of Appeals, 222 SCRA 37 [1993]; Lasco v. United Nations Revolving Fund
for Natural Resources Exploration, 241 SCRA 681, 684 [1995].

See Mendoza v. Court of Appeals, 201 SCRA 343 [1991]; People v. Bans, supra note 7.

Rollo, 25.

Macasiano v. National Housing Authority, 224 SCRA 236, 243 [1993], citing Remotigue v. Osmeña, 21 SCRA 837
[1967]; Rural Bank of Olongapo v. Commissioner of Land Registration, 102 SCRA 794 [1981]; and Allied
Broadcasting Center v. Republic of the Philippines, 190 SCRA 782 [1990].

Philnabank Employees Association v. Hon. Estanislao, 227 SCRA 804, 811 [1993].

172 SCRA 415, 423-424 [1989], reiterated in Manalo v. Gloria, 236 SCRA 130, 138-139 [1994].

217 SCRA 633, 652 [1993].

La Union Electric Cooperative Inc. v. Yaranon, 179 SCRA 828, 836 [1989]; Francisco v. Permskul, 173 SCRA 324,
333 [1989].

See Peralta v. Commission on Elections, 82 SCRA 30, 55 [1978].

Paredes v. Executive Secretary, 128 SCRA 6, 11 [1984], citing Yu Cong Eng v. Trinidad, 47 Phil. 385 [1925]. See
also Aris(Phil.) Inc. v. NLRC, 200 SCRA 246, 255-256 [1991].

Although the intent of the framers was to have the terms refer to those “who lived a hand-to-mouth existence.,”
JOAQUIN G. BERNAS, THE INTENT OF THE 1986 CONSITUTION WRITERS 964 (1995).

Webster's Third New International Dictionary 1381 [1993].

Webster’s, supra., 2279.

III Record of the Constitutional Commission, 50.

Section 16, Article II.

224 SCRA 792, 804-805 [1993].

Section 149.

Section 447 [a] [1] [vi]; Section 458 [a] [1] [vi]; Section 468 [a] [1] [vi].

Section 2(a).

Section 3, Article X.

Section 5(a).
Section 17 (e).

Section 17 [b] [2] [I].

Section 131 [r], LGC.

Sec. 4, R.A. No. 7611.

Section 458 [a] [1] [vi]; Section 468 [a] [1] [vi].

Section 3[3], R.A. No. 7611.

Jay Batongbacal, The Coastal Environment  and the Small-Scale Fisherfolk: Advocacy for Community-Based
Coastal Zone Management, 66 Philippine Law Journal [December 1991].

Anthony Spaeth, Reef Killers, TIME Magazine, 3 June 1996, 49,50.

Anthony Spaeth, Reef Killers, TIME Magazine, 3 June 1996, 49,50.

Batongbacal, 168.

Spaeth, 51.

Id.

Batongbacal, 168.

Said section  reads:

SEC. 4. Jurisdiction of the Bureau.--- The Bureau shall have jurisdiction and responsibility in the management,
conservation, development, protection, utilization and disposition of all fishery and aquatic resources of the country
except municipal waters which shall be under the municipal or city government concerned: Provided, That fishpens
and seaweed culture in municipal centers shall be under the jurisdiction of the Bureau: Provided, further That all
municipal or city ordinances and resolutions affecting fishing and fisheries and any disposition thereunder shall be
submitted to the Secretary for appropriate action and shall have full force and effect only upon his approval. The
Bureau shall also have authority to regulate and supervise the production, capture and gathering of fish and
fishery/aquatic products.

The Bureau shall prepare and implement, upon approval of the Fishery Industry Development Council, a Fishery
Industry Development Program.

Executive Order No. 292.

Section 20, Chapter 4, Title IV, Book IV.

These sections read as follows:

SEC. 16. License, lease, and permit.--- No person shall exploit, occupy, produce, culture, capture or gather fish, or
fry or fingerling of any species of fish or fishery/aquatic products, or engage in any fishery activity in Philippine or
municipal waters without a license, lease or permit: Provided, That when due to destruction wrought upon
fishponds, fishpens or fish nurseries, by typhoon, floods and other fortuitous events, or due to speculation,
monopolistic and other pernicious practices which tend to create an artificial shortage of fry and/or fingerling, the
supply  of fish and fishery/aquatic products can reasonably be expected to fall below the usual demand therefor and
the price thereof, to increase, the Secretary, upon recommendation of the Director, is hereby authorized to fix a fair
and reasonable price for fry and fingerling of any species of fish, and in so doing and when necessary , fix different
price levels for various areas or regions taking into account such variable factors as availability, accessibility to
transportation facilities, packing and crating, and to regulate the movement, shipment and transporting of such fry
and fingerling: Provided, Further, That the price so fixed shall guarantee the gatherers of fry a just and equitable
return for their labor: Provided, Finally, That any administrative order issued by the Secretary to implement the
foregoing shall take effect immediately, the provisions of Section 7 hereof to the contrary notwithstanding.

             xxx

C. MUNICIPAL FISHERIES

SEC. 29. Grant of fishery priviliges.--- A municipal or city council, conformably with an ordinance duly approved
by the Secretary pursuant to Section 4 hereof may:

a.    grant to the highest qualified bidder the exclusive privilege of constructing and operating fish corrals, oyster
culture beds, or of gathering of “bangus” fry, or the fry of other species, in municipal waters for a period not
exceeding five (5) years: Provided, That in the zoning and classification of municipal waters for purposes of
awarding, through public bidding , areas for the construction or operation of fish corrals, oyster culture bed, or the
gathering of fry, the municipal or city council shall set aside not more than one-fifth (1/5) of the area, earmarked for
the gathering of fry, as may be designated by the Bureau, as government “bangus” fry reservation: Provided,
Further, That no fish corral shall be constructed within two hundred (200) meters of another fish corral in marine
fisheries, or one hundred (100) meters in freshwater fisheries, unless they belong to the same licensee, but in no case
shall the distance be less than sixty (60) meters, except in waters less than two (2) meters deep at low tide, or unless
previously approved by the Secretary;

b.          authorize the issuance to qualified persons of license for the operation of fishing boats three (3) gross tons or
less, or for the privilege of fishing in municipal waters with nets, traps or other fishing gear: Provided, That it shall
be beyond the power of the municipal or city council to impose a license for the privilege of gathering marine
mollusca or the shells thereof, for pearling boats and pearl divers, or for prospecting, collecting or gathering
spongers or other aquatic products, or for the culture of fishery/aquatic products: Provided, Further, That a licensee
under this paragraph shall not operate within two hundred (200) meters of any fish corral licensed by the
municipality except when the licensee is the owner or operator of the fish corral but in no case within sixty (60)
meters of said corral. The municipal or city council shall furnish the Bureau, for statistical purposes, on forms which
shall be furnished by the Bureau, such information and data on fishery matters as are reflected in such forms.

Section 149.

Section 447 [a] [1] [vi]; Section 458 [a] [1] [vi]; Section 468 [a] [1] [vi].

EN BANC

[G.R. No. 135385.  December 6, 2000]

ISAGANI CRUZ and CESAR EUROPA, petitioners, vs. SECRETARY OF ENVIRONMENT AND
NATURAL RESOURCES, SECRETARY OF BUDGET AND MANAGEMENT and CHAIRMAN and
COMMISSIONERS OF THE NATIONAL COMMISSION ON INDIGENOUS PEOPLES, respondents.

HON. JUAN M .FLAVIER, HON. PONCIANO BENNAGEN, BAYANI ASCARRAGA, EDTAMI

MANSAYANGAN, BASILIO WANDAG, EVELYN DUNUAN, YAOM TUGAS, ALFREMO CARPIANO,
LIBERATO A. GABIN, MATERNIDAD M. COLAS, NARCISA M. DALUPINES, BAI KIRAM-CONNIE
SATURNO, BAE MLOMO-BEATRIZ T. ABASALA, DATU BALITUNGTUNG-ANTONIO D. LUMANDONG,
DATU MANTUMUKAW TEOFISTO SABASALES, DATU EDUAARDO BANDA, DATU JOEL UNAD,
DATU RAMON BAYAAN, TIMUAY JOSE ANOY, TIMUAY MACARIO D. SALACAO, TIMUAY EDWIN B.
ENDING, DATU SAHAMPONG MALANAW VI, DATU BEN PENDAO CABIGON, BAI NANAPNAY-LIZA
SAWAY, BAY INAY DAYA-MELINDA S. REYMUNDO, BAI TINANGHAGA HELINITA T. PANGAN, DATU
MAKAPUKAW ADOLINO L. SAWAY, DATU MAUDAYAW-CRISPEN SAWAY, VICKY MAKAY,
LOURDES D. AMOS, GILBERT P. HOGGANG, TERESA GASPAR, MANUEL S. ONALAN, MIA GRACE
L. GIRON, ROSEMARIE G. PE, BENITO CARINO, JOSEPH JUDE CARANTES, LYNETTE CARANTES-
VIVAL, LANGLEY SEGUNDO, SATUR S. BUGNAY, CARLING DOMULOT, ANDRES MENDIOGRIN,
LEOPOLDO ABUGAN, VIRGILIO CAYETANO, CONCHITA G. DESCAGA, LEVY ESTEVES, ODETTE
G. ESTEVEZ, RODOLFO C. AGUILAR, MAURO VALONES, PEPE H. ATONG, OFELIA T. DAVI,
PERFECTO B. GUINOSAO, WALTER N. TIMOL, MANUEL T. SELEN, OSCAR DALUNHAY, RICO O.
SULATAN, RAFFY MALINDA, ALFREDO ABILLANOS, JESSIE ANDILAB, MIRLANDO H.
MANGKULINTAS, SAMIE SATURNO, ROMEO A. LINDAHAY, ROEL S. MANSANG-CAGAN, PAQUITO
S. LIESES, FILIPE G. SAWAY, HERMINIA S. SAWAY, JULIUS S. SAWAY, LEONARDA SAWAY,
JIMMY UGYUB, SALVADOR TIONGSON, VENANCIO APANG, MADION MALID, SUKIM MALID,
NENENG MALID, MANGKATADONG AUGUSTO DIANO, JOSEPHINE M. ALBESO, MORENO MALID,
MARIO MANGCAL, FELAY DIAMILING, SALOME P. SARZA, FELIPE P. BAGON, SAMMY
SALNUNGAN, ANTONIO D. EMBA, NORMA MAPANSAGONOS, ROMEO SALIGA, SR., JERSON P.
GERADA, RENATO T. BAGON, JR., SARING MASALONG, SOLEDAD M. GERARDA, ELIZABETH L.
MENDI, MORANTE S. TIWAN, DANILO M. MALUDAO, MINORS MARICEL MALID, represented by her
father CORNELIO MALID, MARCELINO M. LADRA, represented by her father MONICO D. LADRA,
JENNYLYN MALID, represented by her father TONY MALID, ARIEL M. EVANGELISTA, represented by
her mother LINAY BALBUENA, EDWARD M. EMUY, SR., SUSAN BOLANIO, OND, PULA BATO
B’LAAN TRIBAL FARMER’S ASSOCIATION, INTER-PEOPLE’S EXCHANGE, INC. and GREEN
FORUM-WESTERN VISAYAS, intervenors.

COMMISSION ON HUMAN RIGHTS, intervenor.

IKALAHAN INDIGENOUS PEOPLE and HARIBON FOUNDATION FOR THE CONSERVATION OF

NATURAL RESOURCES, INC., intervenor.

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. 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-in-Intervention.  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 State’s 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.”
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.

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.

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.”

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 President’s power of control over executive
departments under Section 17, Article VII of the Constitution.

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 State’s constitutional mandate to control and
supervise the exploration, development, utilization and conservation of Philippine natural resources.”
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 large-scale 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.

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 133047           August 17, 1999

HEIRS OF LORENZO YAP, namely SALLY SUN YAP, MARGARET YAP-UY and MANUEL YAP,
petitioners,
vs.
THE HONORABLE COURT OF APPEALS, RAMON YAP and BENJAMIN YAP, respondents.

VITUG, J.:

What in essence petitioners seek is the enforcement of an alleged trust agreement between Lorenzo Yap, now
deceased, and his brothers Ramon and Benjamin, herein co-respondents, covering a piece of land and its
improvement. The case and factual settings found by the Court of Appeals do not appear to deviate significantly
from that priority made by the trial court.1âwphi1.nêt

Sometime in February 1966, Ramon Yap purchased a parcel of land situated at 123 (formerly 75) Batanes Street,
Galas, Quezon City, covered by Transfer Certificate of Title No. 82001/T-414, from the spouses Carlos and Josefina
Nery. The lot was thereupon registered in the name of Ramon Yap under Transfer Certificate of Title No. 102132;
forthwith, he also declared the property in his name for tax purposes and paid the real estate taxes due thereon from
1966 to 1992. In 1967, Ramon Yap constructed a two-storey 3-door apartment building for the use of the Yap
family. One-fifth (1/5) of the cost of the construction was defrayed by Ramon Yap while the rest was shouldered by
Chua Mia, the mother of Lorenzo, Benjamin and Ramon. Upon its completion, the improvement was declared for
real estate tax purposes in the name of Lorenzo Yap in deference to the wishes of the old woman.

Lorenzo Yap died on 11 July 1970. A few months later, his heirs (herein petitioners) left their family dwelling in
Lucena City to reside permanently in Manila. Ramon Yap allowed petitioners to use one unit of the apartment
building.

On 18 March 1992, Ramon Yap sold the land and his share of the 3-door apartment to his brother, his herein co-
respondent Benjamin Yap, for the sum of P337,500.00 pursuant to a Deed of Sale, recorded on even date in the
Memorandum of Encumbrances of the title to said property. Transfer Certificate of Title No. 73002 was in due time
issued in the name of Benjamin Yap.

The controversy started when herein petitioners, by a letter of 08 June 1992, advised respondents of the former's
claim of ownership over the property and demanded that respondents execute the proper deed necessary to transfer
the title to them. At about the same time, petitioners filed a case for ejectment against one of the bonafide tenants of
the property.

On 29 July 1992, respondents filed an action with the Regional Trial Court ("RTC") of Quezon City, docketed Civil
Case No. Q-92-12899, for quieting of title against petitioners. In their answer, petitioners averred that sometime in
1966 the spouses Carlos and Josefina Nery offered to sell the disputed parcel of land to their predecessor-in-interest,
Lorenzo Yap, for the sum of P15,000.00. Since Lorenzo and his wife Sally Yap were at that time Chinese citizens,
Lorenzo requested his brother Ramon to allow the use of the latter's name in the purchase, registration, and
declaration for tax purposes of the subject lot to which Ramon Yap consented. It was agreed that the property would
remain registered in the name of Ramon Yap until such time as Lorenzo would have acquired Philippine citizenship
but that, should Lorenzo predecease, the lot would then be transferred to Lorenzo's heirs upon the latter's
naturalization. Petitioners contended that it was Lorenzo who had caused the construction of the 3-door apartment
on the property, merely entrusting the money therefor to Ramon Yap. The death of Lorenzo in 1970 prompted
petitioners to move in and occupy the apartment and the lot, without any objection from Ramon and Benjamin,
although the latter were allowed to stay in the premises since they had no other place to live in. In 1991, petitioners
acquired Philippine citizenship and, forthwith, they requested Ramon Yap to have the title to the lot transferred to
their names but to their chagrin they discovered that Ramon had sold the lot to his co-respondent Benjamin.

Assessing the evidence before it, the trial court found for the respondents and adjudged Benjamin Yap to be the true
and lawful owner of the disputed property.

On appeal, the Court of Appeals affirmed the decision of the trial court and debunked the claim of petitioners that
Ramon Yap was merely so used as a dummy by Lorenzo Yap. Giving full weight and credit to the Deed of Sale
executed by the Nery spouses in favor of Ramon Yap, the appellate court stressed that to overcome the presumption
of regularity in the execution of a public document, the evidence to the contrary should be clear and convincing even
as it was equally incumbent upon petitioners to show that the subsequent sale of the property to Benjamin had only
been simulated and fictitious. The appellate court, however, deleted the award of attorney's fees in favor of
respondents for, in its view, it was not adequately shown that petitioners had acted in bad faith in pursuing their
case.

Petitioners are now before this Court seeking a reversal of the decision of the Court of Appeals and contending that
—

THE RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT HOLDS THAT
DEFENDANTS-APPELLANTS FATHER, LORENZO YAP, BEING CHINESE CAN NOT ENTER INTO A
TRUST AGREEMENT AND THE EXISTENCE OF A TRUST AGREEMENT CAN NOT BE PROVEN BEING
CHINESE.
 II

THE RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT HOLDS THAT
THE FAILURE TO SHOW WRITTEN TRUST AGREEMENT RENDERS THE ALLEGED AGREEMENT
UNENFORCEABLE BY NOT CONSIDERING THE SAME AS ONE UNDER IMPLIED TRUST.

III

THE RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT HOLDS THAT
PAROL EVIDENCE AND/OR STATUTE OF FRAUDS APPLIED IN THE CASE AT BAR.

IV

THE RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT HOLDS THAT
APPELLANTS HAVE TO REFUTE THE DEED OF SALE EXECUTED BY THE NERY SPOUSES IN FAVOR
OF RAMON YAP BY CLEAR AND CONVINCING EVIDENCE NOTWITHSTANDING ADMISSION OF THE
SAID DEED OF SALE.

THE RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT DID NOT
CONSIDER THAT IN TRUST THE TITLE IS IN THE NAME OF THE TRUSTEE AND NOT IN THE NAME
OF THE NAKED OWNER.

VI

THE RESPONDENT COURT OF APPEALS ERRED WHEN IT HOLDS THAT RAMON YAP CAN NOT BE A
DUMMY OF LORENZO YAP BEING ALIEN AND DISQUALIFIED TO OWN REAL PROPERTY.

VII

THE RESPONDENT COURT OF APPEALS ERRED IN NOT DECLARING THE TITLE IN THE NAME OF
RAMON YAP VOID BEING ACQUIRED AS DUMMY.

VIII

THE RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT RULED THAT
BENJAMIN YAP HAS POSSESSION OF APARTMENT UNIT 123 LIKEWISE OWNERSHIP PERSONAL
PROPERTIES THEREIN ON THE BASIS OF THE INVENTORY OF THE SHERIFF OF THE COURT A QUO
BY WAY OF A SUBSEQUENT MANDATORY INJUNCTION WHICH WAS DENIED.1

The Court finds no merit in the appeal.

To begin with, a brief discussion on the trust relation between two parties could be helpful. A trust may either be
express or implied.2 Express trusts are those which are created by the direct and positive acts of the parties, by some
writing or deed, or will, or by words evincing an intention to create a trust.3 Implied trusts are those which, without
being express, are deducible from the nature of the transaction as matters of intent or, independently of the particular
intention of the parties, as being superinduced on the transaction by operation of law basically by reason of equity. 4
These species of implied trust are ordinarily subdivided into resulting and constructive trusts. 5 A resulting trust is
one that arises by implication of law and presumed always to have been contemplated by the parties, the intention as
to which can be found in the nature of their transaction although not expressed in a deed or instrument of
conveyance.6 Resulting trusts are based on the equitable doctrine that it is the more valuable consideration that the
legal title that determines the equitable interest in property.7 Upon the other hand, a constructive trust is a trust not
created by any word or phrase, either expressly or impliedly, evincing a direct intention to create a trust, but one that
arises in order to satisfy the demands of justice. It does not come about by agreement or intention but in main by
operation of law8 construed against one who, by fraud, duress or abuse of confidence, obtains or holds the legal right
to property which he ought not, in equity and good conscience, to hold.9

One basic distinction between an implied trust and an express trust is that while the former may be established by
parol evidence, the latter cannot. Even then, in order to establish an implied trust in real property by parol evidence,
the proof should be as fully convincing as if the acts giving rise to the trust obligation are proven by an authentic
document.10 An implied trust, in fine, cannot be established upon vague and inconclusive proof. 11

Unfortunately for petitioners, the issues they submit in the case at bar boil down to the appreciation of the evidence
presented. The Court of Appeals, sustaining the court a quo, has found the evidence submitted by petitioners to be
utterly wanting,12 consisting mainly of the self-serving testimony of Sally Yap. She herself admitted that the
business establishment of her husband Lorenzo was razed by fire in 1964 that would somehow place to doubt the
claim that he indeed had the means to purchase the subject land about two years later from the Nery spouses. Upon
the other hand, Ramon Yap was by then an accountant with apparent means to buy the property himself. At all
events, findings of fact by the Court of Appeals, particularly when consistent with those made by the trial court,
should deserve utmost regard when not devoid of evidentiary support. No cogent reason had been shown by
petitioners for the Court to now hold otherwise.

Not to be dismissed, furthermore, is the long standing and broad doctrine of clean hands that will not allow the
creation or the use of a juridical relation, a trust whether express or implied included, to perpetrate fraud or tolerate
bad faith nor to subvert, directly or indirectly, the law. The trust agreement between Ramon and Lorenzo, if indeed
extant, would have been in contravention of, in fact the fundamental law. Then Section 5, Article XIII, of the 1935
Constitution has provided that —

Save in cases of hereditary succession, no private agricultural land shall be transferred or assigned except to
individuals, corporations, or associations, qualified to acquire or hold lands of the public domain in the
Philippines.

The mandate has also been adopted in Section 14, Article XIV, of the 1973 Constitution and now reiterated under
Section 7, Article XII, of the 1987 Constitution. A trust or a provision in the terms of a trust would be invalid if the
enforcement of the trust or provision is against the law even though its performance does not involve the
commission of a criminal or tortuous act. It likewise must follow that what the parties are not allowed to do
expressly is one that they also may not do impliedly as, for instance, in the guise of a resulting trust. 13

The foregoing disquisition renders unnecessary the resolution of the incidental issues raised in the petition.

WHEREFORE, the instant petition is DENIED, and the decision of the respondent Court of Appeals of 08 January
1998 in C.A.-G.R. CV No. 46838 is AFFIRMED. Costs against petitioners.

SO ORDERED.

Melo, Panganiban and Purisima, JJ., concur.1âwphi1.nêt

Gonzaga-Reyes, J., no part. Member of the Court of Appeals Division that rendered the decision.

Footnotes
 1
Rollo, pp. 25-27.

2
See Article 1441, New Civil Code.

3
Rizal Surety and Insurance Company vs. Court of Appeals, 261 SCRA 69; O'Laco vs. Co Cho Chit, 220
SCRA 656; citing Ramos vs. Ramos, 61 SCRA 284.

4
Salao vs. Salao, 70 SCRA 65; 89 C.J.S. 724.

5
89 C.J.S. 722.

6
Ramos vs. Ramos, supra, citing 89 C.J.S. 725.

7
O'Laco vs. Co Cho Chit, supra.

8
89 C.J.S. 726-727.

9
O'Laco vs. Co Cho Chit, supra, citing 76 Am. Jur. 2d 446.

10
Santa Juana vs. Del Rosario, 50 Phil. 110; O'Laco vs. Co Cho Chit, supra.

11
Suarez vs. Tirambulo, 59 Phil. 303.

12
Calculated to render applicable Article 1448 of the Civil Code to the effect that there "is an implied trust
when property is sold, and the legal estate is granted to one party but the price is paid by another for the
purpose of having the beneficial interest of the property. The former is the trustee, while the latter is the
beneficiary."

13
Ramos vs. Court of Appeals, 232 SCRA 348.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 128195           October 3, 2001

ELIZABETH LEE and PACITA YU LEE, HON. JUDGE JOSE D. ALOVERA,* Presiding Judge, Regional
Trial Court, Branch 17, Roxas City, THE REGISTER OF DEEDS OF ROXAS CITY, petitioners,
vs.
REPUBLIC OF THE PHILIPPINES, represented by THE DIRECTOR OF LANDS AND THE
ADMINISTRATOR, LAND REGISTRATION AUTHORITY and THE HON. COURT OF APPEALS,*
respondents.

PARDO, J.:

The case under consideration is a petition for review on certiorari of the decision1 of the court of appeals nullifying
that of the Regional Trial Court, Roxas City, in Reconstitution case No. R-1928,2 pertaining to lot 398, Capiz
Cadastre, covered by Original Certificate of Title No. 3389.
Sometime in March 1936, Carmen, Francisco, Jr., Ramon, Lourdes, Mercedes, Concepcion, Mariano, Jose, Loreto,
Manuel, Rizal, and Jimmy, alll surnamed Dinglasan sold to Lee Liong, A Chinese citizen, a parcel of land with an
approximate area of 1,631 square meters, designed as lot 398 and covered by Original Certificate of Title No. 3389,
situated at the corner of Roxas Avenue and Pavia Street, Roxas City.3

However, in 1948, the former owners filed with the Court of First Instance, Capiz an action against the heirs of Lee
Liong for annulment of sale and recovery of land.4 The plaintiffs assailed the validity of the sale because of the
constitutional prohibition against aliens acquiring ownership of private agriculture land, including residential,
commercial or industrial land. Rebuffed in the trial court and the Court of Appeals, plaintiffs appealed to the
Supreme Court. On June 27, 1956, the Supreme Court ruled thus:

"granting the sale to be null and void and can not give title to the vendee, it does not necessarily follow
therefrom that title remained in the vendor, who had also violated the constitutional prohibition, or that he
(vendor) has the right to recover the title of which he has divested himself by his in ignoring the
prohibition. In such contingency another principle of law sets in to bar the equally guilty vendor from
recovering the title which he had voluntarily conveyed for a consideration, that of pari delicto."5

On July 1, 1968, the same former owners Rafael A. Dinglasan, together with Francisco, Carmen, Ramon, Lourdes,
Mercedes, Concepcion, Mariano, Jose, Loreto, Rizal, Jimmy, and Jesse Dinglasan filed with the Court of First
Instance, Capiz an action for recovery of the same parcel of land.6 Citing the case of the Philippines Banking
Corporation v. Lui She,7 they submitted that the sale to Lee Liong was null and void for being violative of the
Constitution. On September 23, 1968, the heirs of Lee Liong filed with the trial court a motion to dismiss the case
on the ground of res judicata.8 On October 10, 1968, and November 9, 1968, the trial court denied the motion.9 The
heirs of Lee Liong elevated the case to the Supreme Court by petition for certiorari. On April 22, 1977, the Supreme
Court annulled the orders of the trial court and directed it to dismiss the case, holding that the suit was barred by res
judicata.10

On September 7, 1993, Elizabeth Manuel-Lee and Pacita Yu Lee filed with the regional Trial Court, Roxas City a
petition for reconstitution of title of Lot No. 398 of the Capiz Cadastre, formerly covered by Original Certificate of
title No. 3389 of the register of Deeds of Roxas City.11 Petitioners alleged that they were the windows of the
deceased Lee Bing Hoo and Lee Bun Ting , who were the heirs of Lee Liong, The owner of the lot. Lee Liong died
intestate in February 1944. On June 30, 1947, Lee Liong's widow, Ang Chia, and his two sons, Lee Bun Ting and
Lee Bing Ho, executed an extra judicial settlement of the state of Lee Liong, adjudicating to themselves the subject
parcel of land.12 Petitioner Elizabeth Lee acquired her share in lot No. 398 through an extra-judicial settlement and
donation executed in her favor by her deceased husband Lee Bong Hoo. Petitioner Pacita Yu Lee acquired her share
in the same lot by succession from her deceased husband Lee Bun Ting, as evidenced by a deed of extra-judicial
settlement.13

Previously, on December 9, 1948, the Register of Deeds, Capiz Salvador Villaluz, issued a certification that a
transfer certificate of title over the property was issued in the name of Lee Liong.14 However, the records of the
Register of Deeds, Roxas City were burned during the war. Thus, as heretofore stated, on September 7, 1968,
petitioners filed a petition for reconstitution of title.1âwphi1.nêt

On June 10, 1994, the Regional Trial Court, Roxas City, Branch 17, ordered the reconstitution of the lost or
destroyed certificate of title in the name of Lee Liong on the basis of an approved plan and technical description. 15
The dispositive portion of the trial Court's decision reads thus:

"WHEREFORE, in reiteration the Register of Deeds for the City of Roxas is ordered to reconstitute the lost
or destroyed certificate of title in the name Lee Liong, deceased, of Roxas City, with all the conditions
stated in paragraph 2 of this decision. This decision shall become final after the lapse of thirty (30) days
from receipt by the Register of Deeds and by the Commissioner of LRA of a notice of such judgement
without any appeal having been filed by any of such officials.

"SO ORDERED.
 "Given at Roxas City, Philippines,

"June 10, 1994.

"JOSE O. ALOVERA
"Judge"16

On August 18, 1994, the Clerk of Court, Regional Trial Court, Roxas City, Branch 17 issued an Entry of
Judgement.17

On January 25, 1995, the Solicitor General filed with the Court of Appeals a petition for annulment of judgement in
Reconstitution Case No. 1928, alleging that the Regional Trial Court, Roxas City had no jurisdiction over the case. 18
The Solicitor General contended that the petitioners were not the proper parties in the reconstitution of title, since
their predecessor-in-interest Lee Liong did not acquire title to the lot because he was a Chinese citizen and was
constitutionally not qualified to own the subject land.

On April 30, 1996, the Court of Appeals promulgated its decision declaring the judgement of reconstitution void. 19

On May 24, 1996, Elizabeth Manuel-Lee and Pacita Yu Lee filed with the Court of Appeals a motion for
reconsideration of the decision. 20 On February 18, 19976, the Court of appeals denied the motion.21

Hence this petition.22

Petitioners submitted that the Solicitor General was estopped from seeking annulment of the judgement of
reconstitution after failing to object during the reconstitution proceedings before the trial court, despite due notice.
Petitioners alleged that the Solicitor General merely acted on the request of private and politically powerful
individuals who wished to capitalize on the prime location of the subject land.

Petitioners emphasized that the ownership of the land had been settled in two previous cases of the Supreme Court,
where the Court ruled in favor of their predecessor-in-interest, Lee Liong. Petitioners also pointed out that they
acquired ownership of the land through actual possession of the lot and their consistent payment of taxes over the
land for more than sixty years.

On the other hand, the Solicitor General submitted that the decision in the reconstitution case was void; otherwise, it
would amount to circumventing the constitutional proscription against aliens acquiring ownership of private or
public agricultural lands.

We grant the petition.

The reconstitution of a certificate of title denotes restoration in the original form and condition of a lost or destroyed
instrument attesting the title of a person to a piece of land23. The purpose of the reconstruction of title is to have,
after observing the procedures prescribed by law, the title reproduced in exactly the same way it has been when the
loss or destruction occurred.24

In this case, petitioners sought a reconstitution of title in the name of Lee Liong, alleging that the transfer of
certificate of title issued to him was lost or destroyed during World War II. All the documents recorded and issued
by the Register of Deed, Capiz, which include the transfer certificate of title issued in the name of Lee Liong, were
all destroyed during the war. The fact that the original of the transfer certificate of title was not in the files of the
Office of the Register of Deeds did not imply that a transfer certificate of title had not been issued. 25 In the trial court
proceeding, petitioners presented evidence proving the sale of the land from the Dinglasans to Lee Liong and the
latter's subsequent possessions of the of the property in the concept of owner. Thus, the trial court after examining
all the evidence before it, ordered the reconstruction of title in the name of Lee Liong.
However, there is a question as to whether Lee Liong as the qualification to own land in the Philippines.

The sale of the land in question was consummated sometime in March 1936, during the effectivity of the 1935
Constitution. Under the 1935 Constitution,26 aliens could not acquire private agricultural lands, save in cases of
hereditary succession.27 Thus, Lee Liong, a chinese citizen, was disqualified to acquire the land in question.28

The fact that the Court did not annul the sale of the land to an alien did not validate the transaction, for it was still
contrary to the constitutional proscription against aliens acquiring lands of the public or private domain. However,
the proper party to assail the illegality of the transaction was not the parties to the transaction. 29 "In sales of real
estate to aliens incapable of holding title thereto by virtue of the provisions of the Constitution both the vendor and
the vendee are deemed to have committed the constitutional violation and being thus in pari delicto the courts will
not afford protection to either party."30 The proper party to assail the sale is the Solicitor General. This was what was
done in this case when the Solicitor General initiated an action for annulment of judgment of reconstitution of title.
While it took the Republic more than sixty years to assert itself, it is not barred from initiating such action.
Prescription never against the State.31

Although ownership of the land cannot revert to the original sellers, because of the doctrine of pari delicto, the
Solicitor General may initiate an action for reversion or escheat of the land to the State, subject to other defenses, as
hereafter set forth.32

In this case, subsequent circumstances militate against escheat proceedings because the land is now in the hands of
Filipinos. The original vendee, Lee Liong, has since died and the land has been inherited by his heirs and
subsequently their heirs, petitioners herein. Petitioners are Filipino citizens, a fact the Solicitor General does not
dispute.

The constitutional proscription on alien ownership of lands of the public or private domain was intended to protect
lands from falling in the hands of non-Filipinos. In this case, however, there would be no more public policy
violated since the land is in the hands of Filipinos qualified to acquire and own such land. "If land is invalidly
transferred to an alien who subsequently becomes a citizen or transfers it to a citizen, the flaw in the original
transaction is considered cured and the title of the transferee is rendered valid.33 Thus, the subsequent transfer of the
property to qualified Filipinos may no longer be impugned on the basis of the invalidity of the initial transfer. 34 The
objective of the constitutional provision to keep our lands in Filipino hands has been achieved.

Incidentally, it must be mentioned that reconstitution of the original certificate of title must be based on an owner's
duplicate, secondary evidence thereof, or other valid sources of the title be reconstituted. 35 In this case, reconstitution
was based on the plan and technical description approved by the Land Registration Authority.36 This renders the
order of reconstitution void for lack of factual support.37 A judgment with absolute nothing to support it is void.38

As earlier mentioned, a reconstitution of the title is the reissuance of a new certificate of title lost or destroyed in its
original form and condition.39 It does not pass upon the ownership of the land covered by the lost or destroyed title.40
Any change in the ownership of the property must be the subject of a separate suit.41 Thus, although petitioners are
in possession of the land, a separate proceedings is necessary to thresh out the issue of ownership of the land.

WHEREFORE, the Court REVERSES and SETS ASIDE the decision of the Court of Appeals in CA-G. R. SP
No. 36274. In lieu thereof, the Court sets aside the order of reconstitution of title in Reconstitution Case No. R-1928,
Regional Trial Court, Roxas City, and dismisses the petition, without prejudice.1âwphi1.nêt

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION
G.R. No. L-33048 April 16, 1982

EPIFANIA SARSOSA VDA. DE BARSOBIA and PACITA W. VALLAR, petitioners,

vs.
VICTORIANO T. CUENCO, respondent.

MELENCIO-HERRERA, J.:

Sought to be reviewed herein is the judgment dated August 18, 1970, of the Court of Appeals, 1 rendered
in CA-G.R. No. 41318-R, entitled "Victoriano T. Cuenco, Plaintiff-appellant, vs. Epifania Sarsosa Vda. de
Barsobia and Pacita W. Vallar, Defendants- appellees, " declaring Victoriano T. Cuenco (now the
respondent) as the absolute owner of the coconut land in question.

The lot in controversy is a one-half portion (on the northern side) of two adjoining parcels of coconut land
located at Barrio Mancapagao, Sagay, Camiguin, Misamis Oriental (now Camiguin province), with an
area of 29,150 square meters, more or less. 2

The entire land was owned previously by a certain Leocadia Balisado, who had sold it to the spouses
Patricio Barsobia (now deceased) and Epifania Sarsosa, one of the petitioners herein. They are Filipino
citizens.

On September 5, 1936, Epifania Sarsosa then a widow, sold the land in controversy to a Chinese, Ong
King Po, for the sum of P1,050.00 (Exhibit "B"). Ong King Po took actual possession and enjoyed the
fruits thereof.

On August 5, 1961, Ong King Po sold the litigated property to Victoriano T. Cuenco (respondent herein),
a naturalized Filipino, for the sum of P5,000.00 (Exhibit "A"). Respondent immediately took actual
possession and harvested the fruits therefrom.

On March 6, 1962, Epifania "usurped" the controverted property, and on July 26, 1962, Epifania (through
her only daughter and child, Emeteria Barsobia), sold a one-half (1/2) portion of the land in question to
Pacita W. Vallar, the other petitioner herein (Exhibit "2"). Epifania claimed that it was not her intention to
sell the land to Ong King Po and that she signed the document of sale merely to evidence her
indebtedness to the latter in the amount of P1,050.00. Epifania has been in possession ever since except
for the portion sold to the other petitioner Pacita.

On September 19, 1962, respondent filed a Forcible Entry case against Epifania before the Municipal
Court of Sagay, Camiguin. The case was dismissed for lack of jurisdiction since, as the laws then stood,
the question of possession could not be properly determined without first settling that of ownership.

On December 27, 1966, respondent instituted before the Court of First Instance of Misamis Oriental a
Complaint for recovery of possession and ownership of the litigated land, against Epifania and Pacita
Vallar (hereinafter referred to simply as petitioners).

In their Answer below, petitioners insisted that they were the owners and possessors of the litigated land;
that its sale to Ong King Po, a Chinese, was inexistent and/or void ab initio; and that the deed of sale
between them was only an evidence of Epifania's indebtedness to Ong King Po.

The trial Court rendered judgment:

1. Dismissing the complaint with costs against plaintiff (respondent herein).

 2. Declaring the two Deeds of Sale, Exhibits A and B, respectively, inexistent and void
from the beginning; and

3. Declaring defendant Pacita W. Vallar as the lawful owner and possessor of the portion
of land she bought from Emeteria Barsobia (pp. 57, 67, Record.) 3

On appeal, the Court of Appeals reversed the aforementioned Decision and decreed
instead that respondent was the owner of the litigated property, thus:

xxx xxx xxx

In view of all the foregoing considerations, the judgment appealed from is hereby
reversed. In lieu thereof, we render judgment:

(a) Declaring the plaintiff-appellant Victoriano T. Cuenco the absolute owner of the land in
question, with the right of possession thereof;

(b) Ordering the defendants-appellees to restore the possession of said land to the
plaintiff;

(c) Dismissing the defendants' counterclaim;

(d) Condemning the defendants to pay to the plaintiff the sum of

P10,000.00 representing the latter's share from the sale of copra which he failed to
receive since March, 1962 when he was deprived of his possession over the land, and
which defendants illegally appropriated it to their own use and benefit, plus legal interest
from the filing of the complaint until fully paid; plus P2,000.00 representing expenses and
attorney's fees;

(e) Sentencing the defendants to pay the costs.

SO ORDERED. 4

Following the denial of their Motion for Reconsideration, petitioners filed the instant Petition for Review on
certiorari with this Court on January 21, 1971. Petitioners claim that the Court of Appeals erred:

I. ... when it reversed the judgment of the trial court declaring petitioner Pacita W. Vallar
as the lawful possessor and owner of the portion of land she purchased from Emeteria
Barsobia, not a party to this case, there being no evidence against her.

II ... when it included petitioner Pacita W. Vallar to pay P10,000.00, with legal interest
from the filing of the complaint, representing respondent's share in the harvest and to pay
the costs, there being no evidence against her.

III. ... when it condemned petitioners to pay P2,000.00 representing expenses and
attorney's fees, there being no factual, legal and equitable justification.

IV. ... in not applying the rule on pari delicto to the facts of the case or the doctrine
enunciated ... in the case of Philippine Banking Corporation vs. Lui She, L-17587,
September 12, 1967, to ... Petitioner Epifania Sarsosa Vda. de Barsobia.
 V. ... in denying, for lack of sufficient merits, petitioners' motion for rehearing or
reconsideration of its decision. 5

As the facts stand, a parcel of coconut land was sold by its Filipino owner, petitioner Epifania, to a
Chinese, Ong King Po, and by the latter to a naturalized Filipino, respondent herein. In the meantime, the
Filipino owner had unilaterally repudiated the sale she had made to the Chinese and had resold the
property to another Filipino. The basic issue is: Who is the rightful owner of the property?

There should be no question that the sale of the land in question in 1936 by Epifania to Ong King Po was
inexistent and void from the beginning (Art. 1409 [7], Civil Code) 6 because it was a contract executed
against the mandatory provision of the 1935 Constitution, which is an expression of public policy to
conserve lands for the Filipinos. Said provision reads:

Save in cases of hereditary succession, no private agricultural land shall be transferred or

assigned except to individuals, corporations, or associations, qualified to acquire or hold
lands of the public domain. 7

Had this been a suit between Epifania and Ong King Po, she could have been declared entitled to the
litigated land on the basis, as claimed, of the ruling in Philippine Banking Corporation vs. Lui She, 8
reading:

... For another thing, and this is not only cogent but also important. Article 1416 of the
Civil Code provides as an exception to the rule on pari delicto that when the agreement is
not illegal per se but is merely prohibited, and the prohibition by the law is designed for
the protection of the plaintiff, he may, if public policy is thereby enhanced, recover what
he has sold or delivered. ...

But the factual set-up has changed. The litigated property is now in the hands of a naturalized Filipino. It
is no longer owned by a disqualified vendee. Respondent, as a naturalized citizen, was constitutionally
qualified to own the subject property. There would be no more public policy to be served in allowing
petitioner Epifania to recover the land as it is already in the hands of a qualified person. Applying by
analogy the ruling of this Court in Vasquez vs. Giap and Li Seng Giap & Sons: 9

... if the ban on aliens from acquiring not only agricultural but also urban lands, as
construed by this Court in the Krivenko case, is to preserve the nation's lands for future
generations of Filipinos, that aim or purpose would not be thwarted but achieved by
making lawful the acquisition of real estate by aliens who became Filipino citizens by
naturalization.

While, strictly speaking, Ong King Po, private respondent's vendor, had no rights of ownership to transmit,
it is likewise inescapable that petitioner Epifania had slept on her rights for 26 years from 1936 to 1962.
By her long inaction or inexcusable neglect, she should be held barred from asserting her claim to the
litigated property (Sotto vs. Teves, 86 SCRA 157 [1978]).

Laches has been defined as the failure or neglect, for an unreasonable and unexplained
length of time, to do that which by exercising due diligence could or should have been
done earlier; it is negligence or omission to assert a right within a reasonable time,
warranting a presumption that the party entitled to assert it either has abandoned it or
declined to assert it. (Tijam, et al. vs. Sibonghanoy, et al., No. L-21450, April 15, 1968, 23
SCRA 29, 35). (cited in Sotto vs. Teves, 86 SCRA 154 [1978]).

Respondent, therefore, must be declared to be the rightful owner of the property.

The award of actual damages in respondent's favor of P10,000.00, as well as of attorney's fees and
expenses of litigation of P2,000.00, is justified. Respondent was deprived of the possession of his land
and the enjoyment of its fruits from March, 1962. The Court of Appeals fixed respondent's share of the
sale of copra at P10,000.00 for eight years at four (4) harvests a year. The accuracy of this finding has
not been disputed.

However, we find merit in the assigned error that petitioner, Pacita Vallar, should not be held also liable
for actual damages to respondent. In the absence of contrary proof, she, too, must be considered as a
vendee in good faith of petitioner Epifania.

The award of attorney's fees and litigation expenses in the sum of P2,000.00 in respondent's favor is in
order considering that both petitioners compelled respondent to litigate for the protection of his interests.
Moreover, the amount is reasonable. 10

WHEREFORE, except for that portion holding petitioner, Pacita W. Vallar, also liable for damages of
P10,000.00, the appealed judgment is hereby affirmed.

Costs against petitioners.

SO ORDERED.

Teehankee (Chairman), Makasiar, Fernandez, Guerrero and Plana,

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-31956 April 30, 1984

FILOMENA GERONA DE CASTRO, petitioner,

vs.
JOAQUIN TENG QUEEN TAN, TAN TENG BIO, DOLORES TAN, ROSARIO TAN HUA ING, and TO O.
HIAP, respondents.

Pascual G. Mier for petitioner.

Eddie Tamondong for respondent Joaquin Teng Queen Tan.

Carlos Buenviaje for respondent Tan Teng Bio.

Arnulfo L. Perete for respondent Ong Shi (To O. Hiap).

PLANA, J.:ñé+.£ªwph!1

Review on certiorari of the order of the former Court of First Instance of Sorsogon dismissing petitioner's
action for annulment of contract with damages.
In 1938, petitioner Filomena Gerona de Castro sold a 1,258 sq. m. residential lot in Bulan, Sorsogon to
Tan Tai, a Chinese. In 1956, Tan Tai died leaving herein respondents — his widow, To O. Hiap, and
children Joaquin Teng Queen Tan, Tan Teng Bio, Dolores Tan and Rosario Tan Hua Ing.

Before the death of Tan Tai or on August 11, 1956, one of his sons, Joaquin, became a naturalized
Filipino. Six years after Tan Tai's death, or on November 18, 1962, his heirs executed an extra-judicial
settlement of estate with sale, whereby the disputed lot in its entirety was alloted to Joaquin.

On July 15, 1968, petitioner commenced suit against the heirs of Tan Tai for annulment of the sale for
alleged violation of the 1935 Constitution prohibiting the sale of land to aliens.

Except for respondent Tan Teng Bio who filed an answer to the complaint, respondents moved to dismiss
the complaint on the grounds of (a) lack of cause of action, the plaintiff being in pari delicto with the
vendee, and the land being already owned by a Philippine citizen; (b) laches; and (c) acquisitive
prescription.

Over the opposition of petitioner, the court a quo dismissed the complaint, sustaining the first two grounds
invoked by the movants. It is this order of dismissal that is now the subject of this review.

The assailed order must be sustained.

Independently of the doctrine of pari delicto, the petitioner cannot have the sale annulled and recover the
lot she herself has sold. While the vendee was an alien at the time of the sale, the land has since become
the property, of respondent Joaquin Teng, a naturalized Philippine citizen, who is constitutionally qualified
to own land.têñ.£îhqwâ£

... The litigated property is now in the hands of a naturalized Filipino. It is no longer
owned by a disqualified vendee. Respondent, as a naturalized citizen, was
constitutionally qualified to own the subject property. There would be no more public
policy to be served in allowing petitioner Epifania to recover the land as it is already in the
hands of a qualified person. Applying by analogy the ruling of this Court in Vasquez vs.
Giap and Li Seng Giap & Sons:têñ.£îhqwâ£

... if the ban on aliens from acquiring not only agricultural but also urban
lands, as construed by this Court in the Krivenko case, is to preserve the
nation's lands for future generations of Filipinos, that aim or purpose
would not be thwarted but achieved by making lawful the acquisition of
real estate by aliens who became Filipino citizens by naturalization.
(Sarsosa Vda. de Barsobia vs. Cuenco, 113 SCRA 547, at 553.)

Laches also militates against petitioner's cause. She sold the disputed lot in 1938. She instituted the
action to annul the sale only on July 15, 1968. What the Court said in the cited Sarsosa case applies with
equal force to the petitioner.têñ.£îhqwâ£

... it is likewise inescapable that petitioner Epifania had slept on her rights for 26 years
from 1936 to 1962. By her long inaction of inexcusable neglect, she should be held
barred from asserting her claim to the litigated property (Sotto vs. Teves, 86 SCRA 157
[1978]).têñ.£îhqwâ£

Laches has been defined as the failure or neglect, for an unreasonable

and unexplained length of time, to do that which by exercising due
diligence could or should have been done earlier; it is negligence or
omission to assert a right within a reasonable time, warranting a
 presumption that the party entitled to assert it either has abandoned it or
declined to assert it. (Tijam, et al. vs. Sibonghanoy, et al., No. L-21450,
April 15, 1968, 23 SCRA 29, 35). (cited in Sotto vs. Teves, 86 SCRA 154
[1978]).

Respondent, therefore, must be declared to be the rightful owner of the property. (p.
553.)

WHEREFORE, the appealed order is affirmed. Costs against petitioner.

SO ORDERED.1äwphï1.ñët

Teehankee (Chairman), Melencio-Herrera, Relova, Gutierrez, Jr. and De la Fuente, JJ., concur. Republic
of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 108998 August 24, 1994

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
THE COURT OF APPEALS AND SPOUSES MARIO B. LAPIÑA AND FLOR DE VEGA, respondents.

Byron V. Belarmino and Juan B. Belarmino for private respondents.

BIDIN, J.:

Can a foreign national apply for registration of title over a parcel of land which he acquired by purchase
while still a citizen of the Philippines, from a vendor who has complied with the requirements for
registration under the Public Land Act (CA 141)?

The Republic would have us rule on the negative and asks this Court to nullify the decision of the
appellate court which affirmed the judgment of the court a quo in granting the application of respondent
spouses for registration over the lots in question.

On June 17, 1978, respondent spouses bought Lots 347 and 348, Cad. s38-D, as their residence with a
total area of 91.77 sq. m. situated in San Pablo City, from one Cristeta Dazo Belen (Rollo, p. 41). At the
time of the purchase, respondent spouses where then natural-born Filipino citizens.

On February 5, 1987, the spouses filed an application for registration of title of the two (2) parcels of land
before the Regional Trial Court of San Pablo City, Branch XXXI. This time, however, they were no longer
Filipino citizens and have opted to embrace Canadian citizenship through naturalization.

An opposition was filed by the Republic and after the parties have presented their respective evidence,
the court a quo rendered a decision confirming private respondents' title to the lots in question, the
dispositive portion of which reads as follows:
 WHEREFORE, in view of the foregoing, this Court hereby approves the said application
and confirms the title and possession of herein applicants over Lots 347 and 348, Ap-04-
003755 in the names of spouses Mario B. Lapiña and Flor de Vega, all of legal age,
Filipino citizens by birth but now Canadian citizens by naturalization and residing at 14 A.
Mabini Street, San Pablo City and/or 201-1170-124 Street, Edmonton, Alberta T5M-OK9,
Canada.

Once this Decision becomes final, let the corresponding decree of registration be issued.
In the certificate of title to be issued, there shall be annotated an easement of .265
meters road right-of-way.

SO ORDERED. (Rollo, p. 25)

On appeal, respondent court affirmed the decision of the trial court based on the
following ratiocination:

In the present case, it is undisputed that both applicants were still Filipino citizens when
they bought the land in controversy from its former owner. For this reason, the prohibition
against the acquisition of private lands by aliens could not apply. In justice and equity,
they are the rightful owners of the subject realty considering also that they had paid for it
quite a large sum of money. Their purpose in initiating the instant action is merely to
confirm their title over the land, for, as has been passed upon, they had been the owners
of the same since 1978. It ought to be pointed out that registration is not a mode of
acquiring ownership. The Torrens System was not established as a means for the
acquisition of title to private land. It is intended merely to confirm and register the title
which one may already have (Municipality of Victorias vs. Court of Appeals, G.R. No. L-
31189, March 31, 1987). With particular reference to the main issue at bar, the High
Court has ruled that title and ownership over lands within the meaning and for the
purposes of the constitutional prohibition dates back to the time of their purchase, not
later. The fact that the applicants-appellees are not Filipino citizens now cannot be taken
against them for they were not disqualified from acquiring the land in question (Bollozos
vs. Yu Tieng Su, G.R. No. L-29442, November 11, 1987). (Rollo, pp. 27-28)

Expectedly, respondent court's disposition did not merit petitioner's approval, hence this present recourse,
which was belatedly filed.

Ordinarily, this petition would have been denied outright for having been filed out of time had it not been
for the constitutional issue presented therein.

At the outset, petitioner submits that private respondents have not acquired proprietary rights over the
subject properties before they acquired Canadian citizenship through naturalization to justify the
registration thereof in their favor. It maintains that even privately owned unregistered lands are presumed
to be public lands under the principle that lands of whatever classification belong to the State under the
Regalian doctrine. Thus, before the issuance of the certificate of title, the occupant is not in the jurisdical
sense the true owner of the land since it still pertains to the State. Petitioner further argued that it is only
when the court adjudicates the land to the applicant for confirmation of title would the land become
privately owned land, for in the same proceeding, the court may declare it public land, depending on the
evidence.

As found by the trial court:

The evidence thus presented established that applicants, by themselves and their
predecessors-in-interest, had been in open, public, peaceful, continuous, exclusive and
 notorious possession and occupation of the two adjacent parcels of land applied for
registration of title under a bona-fide claim of ownership long before June 12, 1945. Such
being the case, it is conclusively presumed that all the conditions essential to the
confirmation of their title over the two adjacent parcels of land are sought to be registered
have been complied with thereby entitling them to the issuance of the corresponding
certificate of title pursuant to the provisions of Presidential Decree No. 1529, otherwise
known as the Property Registration Decree. (Rollo, p. 26)

Respondent court echoed the court a quo's observation, thus:

The land sought to be registered has been declared to be within the alienable and
disposable zone established by the Bureau of Forest Development (Exhibit "P"). The
investigation conducted by the Bureau of Lands, Natural Resources District (IV-2) reveals
that the disputed realty had been occupied by the applicants "whose house of strong
materials stands thereon"; that it had been declared for taxation purposes in the name of
applicants-spouses since 1979; that they acquired the same by means of a public
instrument entitled "Kasulatan ng Bilihang Tuluyan" duly executed by the vendor, Cristeta
Dazo Belen, on June 17, 1978 (Exhibits "I" and "J"); and that applicants and their
predecessors in interest had been in possession of the land for more than 30 years prior
to the filing of the application for registration. But what is of great significance in the
instant case is the circumstance that at the time the applicants purchased the subject lot
in 1978, both of them were Filipino citizens such that when they filed their application for
registration in 1987, ownership over the land in dispute had already passed to them.
(Rollo, p., 27)

The Republic disagrees with the appellate court's concept of possession and argues:

17. The Court of Appeals found that the land was declared for taxation purposes in the
name of respondent spouses only since 1979. However, tax declarations or reality tax
payments of property are not conclusive evidence of ownership. (citing cases)

18. Then again, the appellate court found that "applicants (respondents) and their
predecessors-in-interest had been in possession of the land for more than 30 years prior
to the filing of the application for registration." This is not, however, the same as saying
that respondents have been in possession "since June 12, 1945." (PD No. 1073,
amending Sec. 48 [b], CA NO. 141; sec. also Sec. 14, PD No. 1529). So there is a void in
respondents' possession. They fall short of the required possession since June 12, 1945
or prior thereto. And, even if they needed only to prove thirty (30) years possession prior
to the filing of their application (on February 5, 1987), they would still be short of the
required possession if the starting point is 1979 when, according to the Court of Appeals,
the land was declared for taxation purposes in their name. (Rollo, pp. 14-15)

The argument is myopic, to say the least. Following the logic of 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. This is
not, however, what the law provides.

As petitioner itself argues, Section 48 of the Public Land Act (CA 141) reads:

Sec. 48. The following-described citizens of the Philippines, occupying lands of the public
domain or claiming interest therein, but whose titles have not been perfected or
completed, may apply to the Court of First Instance (now Regional Trial Court) 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 wars 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)

As amended by PD 1073:

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 or ownership,
since June 12, 1945.

It must be noted that with respect to possession and occupation of the alienable and disposable lands of
the public domain, the law employs the terms "by themselves", "the applicant himself or through his
predecessor-in-interest". Thus, it matters not whether the vendee/applicant has been in possession of the
subject property for only a day so long as the period and/or legal requirements for confirmation of title has
been complied with by his predecessor-in-interest, the said period is tacked to his possession. In the case
at bar, respondents' predecessors-in-interest have been in open, continuous, exclusive and notorious
possession of the disputed land not only since June 12, 1945, but even as early as 1937. Petitioner does
not deny this except that respondent spouses, in its perception, were in possession of the land sought to
be registered only in 1978 and therefore short of the required length of time. As aforesaid, the disputed
parcels of land were acquired by private respondents through their predecessors-in-interest, who, in turn,
have been in open and continued possession thereof since 1937. Private respondents stepped into the
shoes of their predecessors-in-interest and by virtue thereof, acquired all the legal rights necessary to
confirm what could otherwise be deemed as an imperfect title.

At this juncture, petitioner's reliance in Republic v. Villanueva (114 SCRA 875 [1982]) deserves scant
consideration. There, it was held that before the issuance of the certificate of title, the occupant is not in
the juridical sense the true owner of the land since it still pertains to the State.

Suffice it to state that the ruling in Republic v. Villanueva (supra), has already been abandoned in the
1986 case of Director of Lands v. Intermediate Appellate Court (146 SCRA 509; and reiterated in Director
of Lands v. Iglesia ni Cristo, 200 SCRA 606 [1991]) where the Court, through then Associate Justice, now
Chief Justice Narvasa, declared that:

(The weight of authority is) 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. . . .

Herico in particular, appears to be squarely affirmative:

 . . . 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-in-
interest, 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.

Nothing can more clearly demonstrate the logical inevitability of considering possession
of public land which is of the character and duration prescribed by the statute as the
equivalent of an express grant from the State than the dictum of the statute itself (Section
48 [b]) 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 claims 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
Cariño, ". . .(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. (Emphasis supplied)

Subsequent cases have hewed to the above pronouncement such that open, continuous and exclusive
possession for at least 30 years of alienable public land ipso jure converts the same to private property
(Director of Lands v. IAC, 214 SCRA 604 [1992]; Pineda v. CA, 183 SCRA 602 [1990]). This means that
occupation and cultivation for more than 30 years by an applicant and his predecessors-in-interest, vest
title on such applicant so as to segregate the land from the mass of public and (National Power
Corporation v. CA, 218 SCRA 41 [1993]).

The Public Land Act requires that the applicant must prove that (a) the land is alienable public land and
(b) his possession, in the concept above stated, must be either since time immemorial or for the period
prescribed in the Public Land Act (Director of Lands v. Buyco, 216 SCRA 78 [1992]). When the conditions
set by law are complied with, the possessor of the land, by operation of law, acquires a right to a grant, a
government grant, without the necessity of a certificate of title being issued (National Power Corporation
v. CA, supra). As such, the land ceases to be a part of the public domain and goes beyond the authority
of the Director of Lands to dispose of.

In other words, the Torrens system was not established as a means for the acquisition of title to private
land (Municipality of Victorias v. CA, 149 SCRA 32 [1987]). It merely confirms, but does not confer
ownership. As could be gleaned from the evidence adduced, private respondents were able to establish
the nature of possession of their predecessors-in-interest. Evidence was offered to prove that their
predecessors-in-interest had paid taxes on the subject land and introduced improvements thereon
(Exhibits "F" to "F9"). A certified true copy of the affidavit executed by Cristeta Dazo and her sister
Simplicia was also formally offered to prove that the subject parcels of land were inherited by vendor
Cristeta Dazo from her father Pedro Dazo with the conformity of her only sister Simplicia (Exhibit "G").
Likewise, a report from the Bureau of Lands was presented in evidence together with a letter from the
Bureau of Forest Development, to prove that the questioned lots were part of the alienable and
disposable zone of the government and that no forestry interest was affected (CA GR No. 28953,
Records, p. 33).

In the main, petitioner seeks to defeat respondents' application for registration of title on the ground of
foreign nationality. Accordingly, the ruling in Director of Lands v. Buyco (supra) supports petitioner's
thesis.

We disagree.

In Buyco, the applicants therein were likewise foreign nationals but were natural-born Filipino citizens at
the time of their supposed acquisition of the property. But this is where the similarity ends. The applicants
in Buyco sought to register a large tract of land under the provisions of the Land Registration Act, and in
the alternative, under the provisions of the Public Land Act. The land registration court decided in favor of
the applicants and was affirmed by the appellate court on appeal. The Director of Lands brought the
matter before us on review and we reversed.

This Court, speaking through Justice Davide, Jr., stated:

As could be gleaned from the evidence adduced, the private respondents do not rely on
fee simple ownership based on a Spanish grant or possessory information title under
Section 19 of the Land Registration Act; the private respondents did not present any
proof that they or their predecessors-in-interest derived title from an old Spanish grant
such as (a) the "titulo real" or royal grant (b) the "concession especial" or especial grant;
(c) the "composicion con el estado" title or adjustment title; (d) the "titulo de compra" or
title by purchase; and (e) the "informacion posesoria" or possessory information title,
which could become a "titulo gratuito" or a gratuitous title (Director of Forestry v. Muñoz,
23 SCRA 1183 [1968]). The primary basis of their claim is possession, by themselves
and their predecessors-in-interest, since time immemorial.

If indeed private respondents and their predecessors have been in possession since time
immemorial, the rulings of both courts could be upheld for, as this Court stated in Oh Cho
v. Director of Lands (75 Phil. 890 [1946]):

. . . All lands that were not acquired from the Government, either by
purchase or by grant, belong to the public domain. An exception to the
rule would be any land that should have been in the possession of an
occupant and of his predecessors in interest since time immemorial, for
such possession would justify the presumption that the land had never
been part of the public domain or that if had been a private property even
before the Spanish conquest (Cariño v. Insular Government, 41 Phil 935
[1909]; 212 U.S. 449; 53 Law. Ed., 594) The applicant does not come
under the exception, for the earliest possession of the lot by his first
predecessor in interest began in 1880.

. . . 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. (Director of Lands v. Intermediate
Appellate Court, supra)

It is obvious from the foregoing rule that the applicant must prove that (a) the land is
alienable public land and (b) his possession, in the concept above stated, must be either
since time immemorial, as ruled in both Cariño and Susi, or for the period prescribed in
the Public Land Act. As to the latter, this Court, in Gutierrez Hermanos v. Court of
Appeals (178 SCRA 37 [1989]), adopted the rule enunciated by the Court of Appeals, per
then Associate Justice Hugo R. Gutierrez, Jr., . . ., that an applicant for registration under
Section 48 of the Public Land Act must secure a certification from the Government that
the lands which he claims to have possessed as owner for more than thirty (30) years are
alienable and disposable. It is the burden of the applicant to prove its positive averments.

In the instant case, private respondents offered no evidence at all to prove that the
property subject of the application is an alienable and disposable land. On the contrary,
the entire property . . . was pasture land (and therefore inalienable under the then 1973
Constitution).

. . . (P)rivate respondents' evidence miserably failed to establish their imperfect title to the
property in question. Their allegation of possession since time immemorial, . . ., is
patently baseless. . . . When referring to possession, specifically "immemorial
possession," it means possession of which no man living has seen the beginning, and the
existence of which he has learned from his elders (Susi v. Razon, supra). Such
possession was never present in the case of private respondents. . . .

. . ., there does not even exist a reasonable basis for the finding that the private
respondents and their predecessors-in-interest possessed the land for more than eighty
(80) years, . . .

xxx xxx xxx

To this Court's mind, private respondents failed to prove that (their predecessor-in-
interest) had possessed the property allegedly covered by Tax Declaration No. 15853
and made the subject of both his last will and testament and the project of partition of his
estate among his heirs — in such manner as to remove the same from the public domain
under the Cariño and Susi doctrines. Thus, (when the predecessor-in-interest) died on 31
May 1937, he transmitted no right whatsoever, with respect to the said property, to his
heirs. This being the case, his possession cannot be tacked to that of the private
respondents for the latter's benefit pursuant to Section 48(b) of the Public Land Act, the
alternative ground relied upon in their application . . .

xxx xxx xxx

Considering that the private respondents became American citizens before such filing, it
goes without saying that they had acquired no vested right, consisting of an imperfect
title, over the property before they lost their Philippine citizenship. (Emphasis supplied)

Clearly, the application in Buyco were denied registration of title not merely because they were American
citizens at the time of their application therefor. Respondents therein failed to prove possession of their
predecessor-in-interest since time immemorial or possession in such a manner that the property has been
segregated from public domain; such that at the time of their application, as American citizens, they have
acquired no vested rights over the parcel of land.
In the case at bar, private respondents were undoubtedly natural-born Filipino citizens at the time of the
acquisition of the properties and by virtue thereof, acquired vested rights thereon, tacking in the process,
the possession in the concept of owner and the prescribed period of time held by their predecessors-in-
interest under the Public Land Act. In addition, private respondents have constructed a house of strong
materials on the contested property, now occupied by respondent Lapiñas mother.

But what should not be missed in the disposition of this case is the fact that the Constitution itself allows
private respondents to register the contested parcels of land in their favor. Sections 7 and 8 of Article XII
of the Constitution contain the following pertinent provisions, to wit:

Sec. 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.

Sec. 8. Notwithstanding the provisions of Section 7 of this Article, a natural-born citizen

of the Philippines who has lost his Philippine citizenship may be a transferee of private
lands, subject to limitations provided by law. (Emphasis supplied)

Section 8, Article XII of the 1987 Constitution above quoted is similar to Section 15, Article XIV of the then
1973 Constitution which reads:

Sec. 15. Notwithstanding the provisions of Section 14 of this Article, a natural-born citizen
of the Philippines who has lost his citizenship may be a transferee of private land, for use
by him as his residence, as the Batasang Pambansa may provide.

Pursuant thereto, Batas Pambansa Blg. 185 was passed into law, the relevant provision
of which provides:

Sec. 2. Any natural-born citizen of the Philippines who has lost his Philippine citizenship
and who has the legal capacity to enter into a contract under Philippine laws may be a
transferee of a private land up to a maximum area of one thousand square meters, in the
case of urban land, or one hectare in the case of rural land, to be used by him as his
residence. In the case of married couples, one of them may avail of the privilege herein
granted; Provided, That if both shall avail of the same, the total area acquired shall not
exceed the maximum herein fixed.

In case the transferee already owns urban or rural lands for residential purposes, he shall
still be entitled to be a transferee of an additional urban or rural lands for residential
purposes which, when added to those already owned by him, shall not exceed the
maximum areas herein authorized.

From the adoption of the 1987 Constitution up to the present, no other law has been passed by the
legislature on the same subject. Thus, what governs the disposition of private lands in favor of a natural-
born Filipino citizen who has lost his Philippine citizenship remains to be BP 185.

Even if private respondents were already Canadian citizens at the time they applied for registration of the
properties in question, said properties as discussed above were already private lands; consequently,
there could be no legal impediment for the registration thereof by respondents in view of what the
Constitution ordains. The parcels of land sought to be registered no longer form part of the public domain.
They are already private in character since private respondents' predecessors-in-interest have been in
open, continuous and exclusive possession and occupation thereof under claim of ownership prior to
June 12, 1945 or since 1937. The law provides that a natural-born citizen of the Philippines who has lost
his Philippine citizenship may be a transferee of a private land up to a maximum area of 1,000 sq.m., if
urban, or one (1) hectare in case of rural land, to be used by him as his residence (BP 185).

It is undisputed that private respondents, as vendees of a private land, were natural-born citizens of the
Philippines. For the purpose of transfer and/or acquisition of a parcel of residential land, it is not
significant whether private respondents are no longer Filipino citizens at the time they purchased or
registered the parcels of land in question. What is important is that private respondents were formerly
natural-born citizens of the Philippines, and as transferees of a private land, they could apply for
registration in accordance with the mandate of Section 8, Article XII of the Constitution. Considering that
private respondents were able to prove the requisite period and character of possession of their
predecessors-in-interest over the subject lots, their application for registration of title must perforce be
approved.

The dissenting opinion, however, states that the requirements in BP 185, must also be complied with by
private respondents. Specifically, it refers to Section 6, which provides:

Sec. 6. In addition to the requirements provided for in other laws for the registration of
titles to lands, no private land shall be transferred under this Act, unless the transferee
shall submit to the register of deeds of the province or city where the property is located a
sworn statement showing the date and place of his birth; the names and addresses of his
parents, of his spouse and children, if any; the area, the location and the mode of
acquisition of his landholdings in the Philippines, if any; his intention to reside
permanently in the Philippines; the date he lost his Philippine citizenship and the country
of which he is presently a citizen; and such other information as may be required under
Section 8 of this Act.

The Court is of the view that the requirements in Sec. 6 of BP 185 do not apply in the instant case since
said requirements are primarily directed to the register of deeds before whom compliance therewith is to
be submitted. Nowhere in the provision is it stated, much less implied, that the requirements must likewise
be submitted before the land registration court prior to the approval of an application for registration of
title. An application for registration of title before a land registration court should not be confused with the
issuance of a certificate of title by the register of deeds. It is only when the judgment of the land
registration court approving the application for registration has become final that a decree of registration is
issued. And that is the time when the requirements of Sec. 6, BP 185, before the register of deeds should
be complied with by the applicants. This decree of registration is the one that is submitted to the office of
the register of deeds for issuance of the certificate of title in favor of the applicant. Prior to the issuance of
the decree of registration, the register of deeds has no participation in the approval of the application for
registration of title as the decree of registration is yet to be issued.

WHEREFORE, the petition is DISMISSED and the decision appealed from is hereby AFFIRMED.

SO ORDERED.

Narvasa, C.J., Cruz, Feliciano, Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Quiason,
Puno, Vitug, Kapunan, and Mendoza, JJ.,concur.

Separate Opinions
  

CRUZ, J., dissenting:

With all due respect, I have to dissent.

The ponencia begins by posing the issue thus:

Can a foreign national apply for registration of title over a parcel of land which he
acquired by purchase while still a citizen of the Philippines, from a vendor who has
complied with the requirements for registration under the Public Land Act (CA 141)?

There is no question that the property is private land and thus subject to registration by qualified persons.
It was really needless to elaborate on Buyco, which is clearly inapplicable here. We can agree that the
ruling case is Director of Lands v. Intermediate Appellate Court, which is not challenged in this petition.

But I think the ponencia misses the point. The finding that the respondent spouses were natural-born
Filpinos at the time they acquired the land does not settle the question posed.

The important point is that the respondent spouses are no longer citizens of the Philippines but
naturalized Canadians. It does not follow that because they were citizens of the Philippines when they
acquired the land, they can register it in their names now even if they are no longer Filipinos.

Section 7 of Article XII of the Constitution is irrelevant because it is not disputed that the respondent
spouses were qualified to acquire the land in question when it was transferred to them.

Section 8 of the same article is not applicable either because it speaks of a transfer of private land to a
former natural-born citizen of the Philippines after he became a foreigner.

Thus it states:

Sec. 8. Notwithstanding the provisions of Section 7 of this Article, a natural-born citizen of

the Philippines who has lost his Philippine citizenship may be a transferee of private
lands, subject to limitations provided by law.

Even if it be assumed that the provision is applicable, it does not appear that the private respondents
have observed "the limitations provided by law."

The ponencia finds that all the requisites for the registration of the land in the private respondents' name
have been complied with. I do not believe so for there is no showing that B.P. 185 has also been
enforced.

The view has been expressed that we should confine ourselves to the requirements for registration under
the Public Land Act. I respectfully submit that the requirements in B.P. 185 have been read into the Act
and should also be applied.

Strict compliance is necessary because of the special privilege granted to former Filipinos who have
become foreigners by their own choice. If we can be so strict with our own citizens, I see no reason why
we should be less so with those who have renounced our country.

Feliciano, J.: concurring

I agree with the great bulk of the majority opinion written by Mr. Justice Bidin and the result reached
therein.

This separate statement is concerned only with the last two (2) paragraphs, just before the dispositive
portion, of the majority opinion. In my view, it should be stressed that B.P. Blg. 185 which took effect on
16 March 1982, does not purport to cover the set of facts before the Court in this case: i.e., the
respondent spouses became transferees (on 17 June 1978) of the land here involved while they were
natural-born Philippine citizens who happened sometime later to have been naturalized as citizens of
another country. B.P. Blg. 185, as far as I can determine, addresses itself only to a situation of persons
who were already foreign nationals at the time they became transferees of private land in the Philippines,
but who were previously natural-born Philippine citizens. It is difficult, therefore, to see how B.P. Blg. 185
can become applicable to the present situation even at the subsequent time when the respondent
spouses would come before the Register of Deeds. B.P. Blg. 185, especially Section 6 thereof, imposes
certain requirements, including a specific limitation on the quantity of land (not more than 1,000 square
meters) which may be acquired thereunder, an amount limitation which must not be exceeded both by the
land of which such foreign national becomes transferee and by such land taken together with other land
previously acquired by such foreign national. (2nd paragraph, Section 2, B.P. Blg. 185)

B.P. Blg. 185 would, of course, apply to subsequent purchases of land by the respondent spouses, that
is, purchases made after they were naturalized as Canadian nationals.

#
Separate Opinions

CRUZ, J., dissenting:

With all due respect, I have to dissent.

The ponencia begins by posing the issue thus:

Can a foreign national apply for registration of title over a parcel of land which he
acquired by purchase while still a citizen of the Philippines, from a vendor who has
complied with the requirements for registration under the Public Land Act (CA 141)?

There is no question that the property is private land and thus subject to registration by qualified persons.
It was really needless to elaborate on Buyco, which is clearly inapplicable here. We can agree that the
ruling case is Director of Lands v. Intermediate Appellate Court, which is not challenged in this petition.

But I think the ponencia misses the point. The finding that the respondent spouses were natural-born
Filpinos at the time they acquired the land does not settle the question posed.

The important point is that the respondent spouses are no longer citizens of the Philippines but
naturalized Canadians. It does not follow that because they were citizens of the Philippines when they
acquired the land, they can register it in their names now even if they are no longer Filipinos.

Section 7 of Article XII of the Constitution is irrelevant because it is not disputed that the respondent
spouses were qualified to acquire the land in question when it was transferred to them.

Section 8 of the same article is not applicable either because it speaks of a transfer of private land to a
former natural-born citizen of the Philippines after he became a foreigner.

Thus it states:
 Sec. 8. Notwithstanding the provisions of Section 7 of this Article, a natural-born citizen of
the Philippines who has lost his Philippine citizenship may be a transferee of private
lands, subject to limitations provided by law.

Even if it be assumed that the provision is applicable, it does not appear that the private respondents
have observed "the limitations provided by law."

The ponencia finds that all the requisites for the registration of the land in the private respondents' name
have been complied with. I do not believe so for there is no showing that B.P. 185 has also been
enforced.

The view has been expressed that we should confine ourselves to the requirements for registration under
the Public Land Act. I respectfully submit that the requirements in B.P. 185 have been read into the Act
and should also be applied.

Strict compliance is necessary because of the special privilege granted to former Filipinos who have
become foreigners by their own choice. If we can be so strict with our own citizens, I see no reason why
we should be less so with those who have renounced our country.

Feliciano, J.: concurring

I agree with the great bulk of the majority opinion written by Mr. Justice Bidin and the result reached
therein.

This separate statement is concerned only with the last two (2) paragraphs, just before the dispositive
portion, of the majority opinion. In my view, it should be stressed that B.P. Blg. 185 which took effect on
16 March 1982, does not purport to cover the set of facts before the Court in this case: i.e., the
respondent spouses became transferees (on 17 June 1978) of the land here involved while they were
natural-born Philippine citizens who happened sometime later to have been naturalized as citizens of
another country. B.P. Blg. 185, as far as I can determine, addresses itself only to a situation of persons
who were already foreign nationals at the time they became transferees of private land in the Philippines,
but who were previously natural-born Philippine citizens. It is difficult, therefore, to see how B.P. Blg. 185
can become applicable to the present situation even at the subsequent time when the respondent
spouses would come before the Register of Deeds. B.P. Blg. 185, especially Section 6 thereof, imposes
certain requirements, including a specific limitation on the quantity of land (not more than 1,000 square
meters) which may be acquired thereunder, an amount limitation which must not be exceeded both by the
land of which such foreign national becomes transferee and by such land taken together with other land
previously acquired by such foreign national. (2nd paragraph, Section 2, B.P. Blg. 185)

B.P. Blg. 185 would, of course, apply to subsequent purchases of land by the respondent spouses, that
is, purchases made after they were naturalized as Canadian nationals.

Manila Prince Hotel v. GSIS

GR 122156, 3 February 1997
En banc, Bellosillo (p): 6 concur, others dissent

Facts: The Government Service Insurance System (GSIS), pursuant to the privatization program of the Philippine
Government under Proclamation 50 dated 8 December 1986, decided to sell through public bidding 30% to 51% of
the issued and outstanding shares of the Manila Hotel (MHC). In a close bidding held on 18 September 1995 only
two bidders participated: Manila Prince Hotel Corporation, a Filipino corporation, which offered to buy 51% of the
MHC or 15,300,000 shares at P41.58 per share, and Renong Berhad, a Malaysian firm, with ITT-Sheraton as its
hotel operator, which bid for the same number of shares at P44.00 per share, or P2.42 more than the bid of
petitioner. Pending the declaration of Renong Berhard as the winning bidder/strategic partner and the execution of
the necessary contracts, the Manila Prince Hotel matched the bid price of P44.00 per share tendered by Renong
Berhad in a letter to GSIS dated 28 September 1995. Manila Prince Hotel sent a manager’s check to the GSIS in a
subsequent letter, but which GSIS refused to accept. On 17 October 1995, perhaps apprehensive that GSIS has
disregarded the tender of the matching bid and that the sale of 51% of the MHC may be hastened by GSIS and
consummated with Renong Berhad, Manila Prince Hotel came to the Court on prohibition and mandamus.

Issue(s):

 Whether the provisions of the Constitution, particularly Article XII Section 10, are self-executing.
 Whether the 51% share is part of the national patrimony.

Held: A provision which lays down a general principle, such as those found in Article II of the 1987 Constitution, is
usually not self-executing. But a provision which is complete in itself and becomes operative without the aid of
supplementary or enabling legislation, or that which supplies sufficient rule by means of which the right it grants
may be enjoyed or protected, is self-executing. Thus a constitutional provision is self-executing if the nature and
extent of the right conferred and the liability imposed are fixed by the constitution itself, so that they can be
determined by an examination and construction of its terms, and there is no language indicating that the subject is
referred to the legislature for action. In self-executing constitutional provisions, the legislature may still enact
legislation to facilitate the exercise of powers directly granted by the constitution, further the operation of such a
provision, prescribe a practice to be used for its enforcement, provide a convenient remedy for the protection of the
rights secured or the determination thereof, or place reasonable safeguards around the exercise of the right. The mere
fact that legislation may supplement and add to or prescribe a penalty for the violation of a self-executing
constitutional provision does not render such a provision ineffective in the absence of such legislation. The omission
from a constitution of any express provision for a remedy for enforcing a right or liability is not necessarily an
indication that it was not intended to be self-executing. The rule is that a self-executing provision of the constitution
does not necessarily exhaust legislative power on the subject, but any legislation must be in harmony with the
constitution, further the exercise of constitutional right and make it more available. Subsequent legislation however
does not necessarily mean that the subject constitutional provision is not, by itself, fully enforceable. As against
constitutions of the past, modern constitutions have been generally drafted upon a different principle and have often
become in effect extensive codes of laws intended to operate directly upon the people in a manner similar to that of
statutory enactments, and the function of constitutional conventions has evolved into one more like that of a
legislative body. Hence, unless it is expressly provided that a legislative act is necessary to enforce a constitutional
mandate, the presumption now is that all provisions of the constitution are self-executing. If the constitutional
provisions are treated as requiring legislation instead of self-executing, the legislature would have the power to
ignore and practically nullify the mandate of the fundamental law. In fine, Section 10, second paragraph, Art. XII of
the 1987 Constitution is a mandatory, positive command which is complete in itself and which needs no further
guidelines or implementing laws or rules for its enforcement. From its very words the provision does not require any
legislation to put it in operation.

In its plain and ordinary meaning, the term patrimony pertains to heritage. When the Constitution speaks of national
patrimony, it refers not only to the natural resources of the Philippines, as the Constitution could have very well used
the term natural resources, but also to the cultural heritage of the Filipinos. It also refers to Filipino’s intelligence in
arts, sciences and letters. In the present case, Manila Hotel has become a landmark, a living testimonial of Philippine
heritage. While it was restrictively an American hotel when it first opened in 1912, a concourse for the elite, it has
since then become the venue of various significant events which have shaped Philippine history. In the granting of
economic rights, privileges, and concessions, especially on matters involving national patrimony, when a choice has
to be made between a “qualified foreigner” and a “qualified Filipino,” the latter shall be chosen over the former.

The Supreme Court directed the GSIS, the Manila Hotel Corporation, the Committee on Privatization and the Office
of the Government Corporate Counsel to cease and desist from selling 51% of the Share of the MHC to Renong
Berhad, and to accept the matching bid of Manila Prince Hotel at P44 per shere and thereafter execute the necessary
agreements and document to effect the sale, to issue the necessary clearances and to do such other acts and deeds as
may be necessary for the purpose.

 
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 122156 February 3, 1997

MANILA PRINCE HOTEL petitioner,

vs.
GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION, COMMITTEE ON
PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE COUNSEL, respondents.

BELLOSILLO, J.:

The FiIipino First Policy enshrined in the 1987 Constitution, i.e., in the grant of rights, privileges, and
concessions covering the national economy and patrimony, the State shall give preference to qualified
Filipinos, 1 is in oked by petitioner in its bid to acquire 51% of the shares of the Manila Hotel Corporation
(MHC) which owns the historic Manila Hotel. Opposing, respondents maintain that the provision is not
self-executing but requires an implementing legislation for its enforcement. Corollarily, they ask whether
the 51% shares form part of the national economy and patrimony covered by the protective mantle of the
Constitution.

The controversy arose when respondent Government Service Insurance System (GSIS), pursuant to the
privatization program of the Philippine Government under Proclamation No. 50 dated 8 December 1986,
decided to sell through public bidding 30% to 51% of the issued and outstanding shares of respondent
MHC. The winning bidder, or the eventual "strategic partner," is to provide management expertise and/or
an international marketing/reservation system, and financial support to strengthen the profitability and
performance of the Manila Hotel. 2 In a close bidding held on 18 September 1995 only two (2) bidders
participated: petitioner Manila Prince Hotel Corporation, a Filipino corporation, which offered to buy 51%
of the MHC or 15,300,000 shares at P41.58 per share, and Renong Berhad, a Malaysian firm, with ITT-
Sheraton as its hotel operator, which bid for the same number of shares at P44.00 per share, or P2.42
more than the bid of petitioner.

Pertinent provisions of the bidding rules prepared by respondent GSIS state —

I. EXECUTION OF THE NECESSARY CONTRACTS WITH GSIS/MHC

—

1. The Highest Bidder must comply with the conditions set forth below by October 23,
1995 (reset to November 3, 1995) or the Highest Bidder will lose the right to purchase the
Block of Shares and GSIS will instead offer the Block of Shares to the other Qualified
Bidders:

a. The Highest Bidder must negotiate and execute with the GSIS/MHC
the Management Contract, International Marketing/Reservation System
 Contract or other type of contract specified by the Highest Bidder in its
strategic plan for the Manila Hotel. . . .

b. The Highest Bidder must execute the Stock Purchase and Sale
Agreement with GSIS . . . .

K. DECLARATION OF THE WINNING BIDDER/STRATEGIC PARTNER

—

The Highest Bidder will be declared the Winning Bidder/Strategic Partner after the
following conditions are met:

a. Execution of the necessary contracts with GSIS/MHC not later than

October 23, 1995 (reset to November 3, 1995); and

b. Requisite approvals from the GSIS/MHC and COP (Committee on

Privatization)/OGCC (Office of the Government Corporate Counsel) are
obtained. 3

Pending the declaration of Renong Berhad as the winning bidder/strategic partner and the execution of
the necessary contracts, petitioner in a letter to respondent GSIS dated 28 September 1995 matched the
bid price of P44.00 per share tendered by Renong Berhad. 4 In a subsequent letter dated 10 October
1995 petitioner sent a manager's check issued by Philtrust Bank for Thirty-three Million Pesos
(P33.000.000.00) as Bid Security to match the bid of the Malaysian Group, Messrs. Renong Berhad . . . 5
which respondent GSIS refused to accept.

On 17 October 1995, perhaps apprehensive that respondent GSIS has disregarded the tender of the
matching bid and that the sale of 51% of the MHC may be hastened by respondent GSIS and
consummated with Renong Berhad, petitioner came to this Court on prohibition and mandamus. On 18
October 1995 the Court issued a temporary restraining order enjoining respondents from perfecting and
consummating the sale to the Malaysian firm.

On 10 September 1996 the instant case was accepted by the Court En Banc after it was referred to it by
the First Division. The case was then set for oral arguments with former Chief Justice Enrique M.
Fernando and Fr. Joaquin G. Bernas, S.J., as amici curiae.

In the main, petitioner invokes Sec. 10, second par., Art. XII, of the 1987 Constitution and submits that the
Manila Hotel has been identified with the Filipino nation and has practically become a historical
monument which reflects the vibrancy of Philippine heritage and culture. It is a proud legacy of an earlier
generation of Filipinos who believed in the nobility and sacredness of independence and its power and
capacity to release the full potential of the Filipino people. To all intents and purposes, it has become a
part of the national patrimony. 6 Petitioner also argues that since 51% of the shares of the MHC carries
with it the ownership of the business of the hotel which is owned by respondent GSIS, a government-
owned and controlled corporation, the hotel business of respondent GSIS being a part of the tourism
industry is unquestionably a part of the national economy. Thus, any transaction involving 51% of the
shares of stock of the MHC is clearly covered by the term national economy, to which Sec. 10, second
par., Art. XII, 1987 Constitution, applies. 7

It is also the thesis of petitioner that since Manila Hotel is part of the national patrimony and its business
also unquestionably part of the national economy petitioner should be preferred after it has matched the
bid offer of the Malaysian firm. For the bidding rules mandate that if for any reason, the Highest Bidder
cannot be awarded the Block of Shares, GSIS may offer this to the other Qualified Bidders that have
validly submitted bids provided that these Qualified Bidders are willing to match the highest bid in terms
of price per share. 8
Respondents except. They maintain that: First, Sec. 10, second par., Art. XII, of the 1987 Constitution is
merely a statement of principle and policy since it is not a self-executing provision and requires
implementing legislation(s) . . . Thus, for the said provision to Operate, there must be existing laws "to lay
down conditions under which business may be done." 9

Second, granting that this provision is self-executing, Manila Hotel does not fall under the term national
patrimony which only refers to 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 all
marine wealth in its territorial sea, and exclusive marine zone as cited in the first and second paragraphs
of Sec. 2, Art. XII, 1987 Constitution. According to respondents, while petitioner speaks of the guests who
have slept in the hotel and the events that have transpired therein which make the hotel historic, these
alone do not make the hotel fall under the patrimony of the nation. What is more, the mandate of the
Constitution is addressed to the State, not to respondent GSIS which possesses a personality of its own
separate and distinct from the Philippines as a State.

Third, granting that the Manila Hotel forms part of the national patrimony, the constitutional provision
invoked is still inapplicable since what is being sold is only 51% of the outstanding shares of the
corporation, not the hotel building nor the land upon which the building stands. Certainly, 51% of the
equity of the MHC cannot be considered part of the national patrimony. Moreover, if the disposition of the
shares of the MHC is really contrary to the Constitution, petitioner should have questioned it right from the
beginning and not after it had lost in the bidding.

Fourth, the reliance by petitioner on par. V., subpar. J. 1., of the bidding rules which provides that if for
any reason, the Highest Bidder cannot be awarded the Block of Shares, GSIS may offer this to the other
Qualified Bidders that have validly submitted bids provided that these Qualified Bidders are willing to
match the highest bid in terms of price per share, is misplaced. Respondents postulate that the privilege
of submitting a matching bid has not yet arisen since it only takes place if for any reason, the Highest
Bidder cannot be awarded the Block of Shares. Thus the submission by petitioner of a matching bid is
premature since Renong Berhad could still very well be awarded the block of shares and the condition
giving rise to the exercise of the privilege to submit a matching bid had not yet taken place.

Finally, the prayer for prohibition grounded on grave abuse of discretion should fail since respondent
GSIS did not exercise its discretion in a capricious, whimsical manner, and if ever it did abuse its
discretion it was not so patent and gross as to amount to an evasion of a positive duty or a virtual refusal
to perform a duty enjoined by law. Similarly, the petition for mandamus should fail as petitioner has no
clear legal right to what it demands and respondents do not have an imperative duty to perform the act
required of them by petitioner.

We now resolve. A constitution is a system of fundamental laws for the governance and administration of
a nation. It is supreme, imperious, absolute and unalterable except by the authority from which it
emanates. It has been defined as the fundamental and paramount law of the nation. 10 It prescribes the
permanent framework of a system of government, assigns to the different departments their respective
powers and duties, and establishes certain fixed principles on which government is founded. The
fundamental conception in other words is that it is a supreme law to which all other laws must conform
and in accordance with which all private rights must be determined and all public authority administered.
11
Under the doctrine of constitutional supremacy, if a law or contract violates any norm of the constitution
that law or contract whether promulgated by the legislative or by the executive branch or entered into by
private persons for private purposes is null and void and without any force and effect. Thus, since the
Constitution is the fundamental, paramount and supreme law of the nation, it is deemed written in every
statute and contract.

Admittedly, some constitutions are merely declarations of policies and principles. Their provisions
command the legislature to enact laws and carry out the purposes of the framers who merely establish an
outline of government providing for the different departments of the governmental machinery and securing
certain fundamental and inalienable rights of citizens. 12 A provision which lays down a general principle,
such as those found in Art. II of the 1987 Constitution, is usually not self-executing. But a provision which
is complete in itself and becomes operative without the aid of supplementary or enabling legislation, or
that which supplies sufficient rule by means of which the right it grants may be enjoyed or protected, is
self-executing. Thus a constitutional provision is self-executing if the nature and extent of the right
conferred and the liability imposed are fixed by the constitution itself, so that they can be determined by
an examination and construction of its terms, and there is no language indicating that the subject is
referred to the legislature for action. 13

As against constitutions of the past, modern constitutions have been generally drafted upon a different
principle and have often become in effect extensive codes of laws intended to operate directly upon the
people in a manner similar to that of statutory enactments, and the function of constitutional conventions
has evolved into one more like that of a legislative body. Hence, unless it is expressly provided that a
legislative act is necessary to enforce a constitutional mandate, the presumption now is that all provisions
of the constitution are self-executing If the constitutional provisions are treated as requiring legislation
instead of self-executing, the legislature would have the power to ignore and practically nullify the
mandate of the fundamental law. 14 This can be cataclysmic. That is why the prevailing view is, as it has
always been, that —

. . . in case of doubt, the Constitution should be considered self-executing rather than

non-self-executing . . . . Unless the contrary is clearly intended, the provisions of the
Constitution should be considered self-executing, as a contrary rule would give the
legislature discretion to determine when, or whether, they shall be effective. These
provisions would be subordinated to the will of the lawmaking body, which could make
them entirely meaningless by simply refusing to pass the needed implementing statute. 15

Respondents argue that Sec. 10, second par., Art. XII, of the 1987 Constitution is clearly not self-
executing, as they quote from discussions on the floor of the 1986 Constitutional Commission —

MR. RODRIGO. Madam President, I am asking this question as the

Chairman of the Committee on Style. If the wording of "PREFERENCE"
is given to QUALIFIED FILIPINOS," can it be understood as a preference
to qualified Filipinos vis-a-vis Filipinos who are not qualified. So, why do
we not make it clear? To qualified Filipinos as against aliens?

THE PRESIDENT. What is the question of Commissioner Rodrigo? Is it

to remove the word "QUALIFIED?".

MR. RODRIGO. No, no, but say definitely "TO QUALIFIED FILIPINOS"
as against whom? As against aliens or over aliens?

MR. NOLLEDO. Madam President, I think that is understood. We use the

word "QUALIFIED" because the existing laws or prospective laws will
always lay down conditions under which business may be done. For
example, qualifications on the setting up of other financial structures, et
cetera (emphasis supplied by respondents)

MR. RODRIGO. It is just a matter of style.

MR. NOLLEDO Yes, 16

Quite apparently, Sec. 10, second par., of Art XII is couched in such a way as not to make it appear that it
is non-self-executing but simply for purposes of style. But, certainly, the legislature is not precluded from
enacting other further laws to enforce the constitutional provision so long as the contemplated statute
squares with the Constitution. Minor details may be left to the legislature without impairing the self-
executing nature of constitutional provisions.

In self-executing constitutional provisions, the legislature may still enact legislation to facilitate the
exercise of powers directly granted by the constitution, further the operation of such a provision, prescribe
a practice to be used for its enforcement, provide a convenient remedy for the protection of the rights
secured or the determination thereof, or place reasonable safeguards around the exercise of the right.
The mere fact that legislation may supplement and add to or prescribe a penalty for the violation of a self-
executing constitutional provision does not render such a provision ineffective in the absence of such
legislation. The omission from a constitution of any express provision for a remedy for enforcing a right or
liability is not necessarily an indication that it was not intended to be self-executing. The rule is that a self-
executing provision of the constitution does not necessarily exhaust legislative power on the subject, but
any legislation must be in harmony with the constitution, further the exercise of constitutional right and
make it more available. 17 Subsequent legislation however does not necessarily mean that the subject
constitutional provision is not, by itself, fully enforceable.

Respondents also argue that the non-self-executing nature of Sec. 10, second par., of Art. XII is implied
from the tenor of the first and third paragraphs of the same section which undoubtedly are not self-
executing. 18 The argument is flawed. If the first and third paragraphs are not self-executing because
Congress is still to enact measures to encourage the formation and operation of enterprises fully owned
by Filipinos, as in the first paragraph, and the State still needs legislation to regulate and exercise
authority over foreign investments within its national jurisdiction, as in the third paragraph, then a fortiori,
by the same logic, the second paragraph can only be self-executing as it does not by its language require
any legislation in order to give preference to qualified Filipinos in the grant of rights, privileges and
concessions covering the national economy and patrimony. A constitutional provision may be self-
executing in one part and non-self-executing in another. 19

Even the cases cited by respondents holding that certain constitutional provisions are merely statements
of principles and policies, which are basically not self-executing and only placed in the Constitution as
moral incentives to legislation, not as judicially enforceable rights — are simply not in point. Basco v.
Philippine Amusements and Gaming Corporation 20 speaks of constitutional provisions on personal
dignity, 21 the sanctity of family life, 22 the vital role of the youth in nation-building 23 the promotion of social
justice, 24 and the values of education. 25 Tolentino v. Secretary of Finance 26 refers to the constitutional
provisions on social justice and human rights 27 and on education. 28 Lastly, Kilosbayan, Inc. v. Morato 29
cites provisions on the promotion of general welfare, 30 the sanctity of family life, 31 the vital role of the
youth in nation-building 32 and the promotion of total human liberation and development. 33 A reading of
these provisions indeed clearly shows that they are not judicially enforceable constitutional rights but
merely guidelines for legislation. The very terms of the provisions manifest that they are only principles
upon which the legislations must be based. Res ipsa loquitur.

On the other hand, Sec. 10, second par., Art. XII of the of the 1987 Constitution is a mandatory, positive
command which is complete in itself and which needs no further guidelines or implementing laws or rules
for its enforcement. From its very words the provision does not require any legislation to put it in
operation. It is per se judicially enforceable When our Constitution mandates that [i]n the grant of rights,
privileges, and concessions covering national economy and patrimony, the State shall give preference to
qualified Filipinos, it means just that — qualified Filipinos shall be preferred. And when our Constitution
declares that a right exists in certain specified circumstances an action may be maintained to enforce
such right notwithstanding the absence of any legislation on the subject; consequently, if there is no
statute especially enacted to enforce such constitutional right, such right enforces itself by its own
inherent potency and puissance, and from which all legislations must take their bearings. Where there is a
right there is a remedy. Ubi jus ibi remedium.

As regards our national patrimony, a member of the 1986 Constitutional Commission 34 explains —
 The patrimony of the Nation that should be conserved and developed refers not only to
out rich natural resources but also to the cultural heritage of out race. It also refers to our
intelligence in arts, sciences and letters. Therefore, we should develop not only our lands,
forests, mines and other natural resources but also the mental ability or faculty of our
people.

We agree. In its plain and ordinary meaning, the term patrimony pertains to heritage. 35 When the
Constitution speaks of national patrimony, it refers not only to the natural resources of the Philippines, as
the Constitution could have very well used the term natural resources, but also to the cultural heritage of
the Filipinos.

Manila Hotel has become a landmark — a living testimonial of Philippine heritage. While it was
restrictively an American hotel when it first opened in 1912, it immediately evolved to be truly Filipino,
Formerly a concourse for the elite, it has since then become the venue of various significant events which
have shaped Philippine history. It was called the Cultural Center of the 1930's. It was the site of the
festivities during the inauguration of the Philippine Commonwealth. Dubbed as the Official Guest House
of the Philippine Government. it plays host to dignitaries and official visitors who are accorded the
traditional Philippine hospitality. 36

The history of the hotel has been chronicled in the book The Manila Hotel: The Heart and Memory of a
City. 37 During World War II the hotel was converted by the Japanese Military Administration into a military
headquarters. When the American forces returned to recapture Manila the hotel was selected by the
Japanese together with Intramuros as the two (2) places fro their final stand. Thereafter, in the 1950's and
1960's, the hotel became the center of political activities, playing host to almost every political convention.
In 1970 the hotel reopened after a renovation and reaped numerous international recognitions, an
acknowledgment of the Filipino talent and ingenuity. In 1986 the hotel was the site of a failed coup d' etat
where an aspirant for vice-president was "proclaimed" President of the Philippine Republic.

For more than eight (8) decades Manila Hotel has bore mute witness to the triumphs and failures, loves
and frustrations of the Filipinos; its existence is impressed with public interest; its own historicity
associated with our struggle for sovereignty, independence and nationhood. Verily, Manila Hotel has
become part of our national economy and patrimony. For sure, 51% of the equity of the MHC comes
within the purview of the constitutional shelter for it comprises the majority and controlling stock, so that
anyone who acquires or owns the 51% will have actual control and management of the hotel. In this
instance, 51% of the MHC cannot be disassociated from the hotel and the land on which the hotel edifice
stands. Consequently, we cannot sustain respondents' claim that the Filipino First Policy provision is not
applicable since what is being sold is only 51% of the outstanding shares of the corporation, not the Hotel
building nor the land upon which the building stands. 38

The argument is pure sophistry. The term qualified Filipinos as used in Our Constitution also includes
corporations at least 60% of which is owned by Filipinos. This is very clear from the proceedings of the
1986 Constitutional Commission

THE PRESIDENT. Commissioner Davide is recognized.

MR. DAVIDE. I would like to introduce an amendment to the Nolledo

amendment. And the amendment would consist in substituting the words
"QUALIFIED FILIPINOS" with the following: "CITIZENS OF THE
PHILIPPINES OR CORPORATIONS OR ASSOCIATIONS WHOSE
CAPITAL OR CONTROLLING STOCK IS WHOLLY OWNED BY SUCH
CITIZENS.

xxx xxx xxx

 MR. MONSOD. Madam President, apparently the proponent is
agreeable, but we have to raise a question. Suppose it is a corporation
that is 80-percent Filipino, do we not give it preference?

MR. DAVIDE. The Nolledo amendment would refer to an individual

Filipino. What about a corporation wholly owned by Filipino citizens?

MR. MONSOD. At least 60 percent, Madam President.

MR. DAVIDE. Is that the intention?

MR. MONSOD. Yes, because, in fact, we would be limiting it if we say

that the preference should only be 100-percent Filipino.

MR: DAVIDE. I want to get that meaning clear because "QUALIFIED

FILIPINOS" may refer only to individuals and not to juridical personalities
or entities.

MR. MONSOD. We agree, Madam President. 39

xxx xxx xxx

MR. RODRIGO. Before we vote, may I request that the amendment be

read again.

MR. NOLLEDO. The amendment will read: "IN THE GRANT OF

RIGHTS, PRIVILEGES AND CONCESSIONS COVERING THE
NATIONAL ECONOMY AND PATRIMONY, THE STATE SHALL GIVE
PREFERENCE TO QUALIFIED FILIPINOS." And the word "Filipinos"
here, as intended by the proponents, will include not only individual
Filipinos but also Filipino-controlled entities or entities fully-controlled by
Filipinos. 40

The phrase preference to qualified Filipinos was explained thus —

MR. FOZ. Madam President, I would like to request Commissioner

Nolledo to please restate his amendment so that I can ask a question.

MR. NOLLEDO. "IN THE GRANT OF RIGHTS, PRIVILEGES AND

CONCESSIONS COVERING THE NATIONAL ECONOMY AND
PATRIMONY, THE STATE SHALL GIVE PREFERENCE TO
QUALIFIED FILIPINOS."

MR FOZ. In connection with that amendment, if a foreign enterprise is

qualified and a Filipino enterprise is also qualified, will the Filipino
enterprise still be given a preference?

MR. NOLLEDO. Obviously.

MR. FOZ. If the foreigner is more qualified in some aspects than the
Filipino enterprise, will the Filipino still be preferred?
 MR. NOLLEDO. The answer is "yes."

MR. FOZ. Thank you, 41

Expounding further on the Filipino First Policy provision Commissioner Nolledo

continues —

MR. NOLLEDO. Yes, Madam President. Instead of "MUST," it will be "SHALL — THE
STATE SHALL GlVE PREFERENCE TO QUALIFIED FILIPINOS. This embodies the so-
called "Filipino First" policy. That means that Filipinos should be given preference in the
grant of concessions, privileges and rights covering the national patrimony. 42

The exchange of views in the sessions of the Constitutional Commission regarding the
subject provision was still further clarified by Commissioner Nolledo 43 —

Paragraph 2 of Section 10 explicitly mandates the "Pro-Filipino" bias in all economic

concerns. It is better known as the FILIPINO FIRST Policy . . . This provision was never
found in previous Constitutions . . . .

The term "qualified Filipinos" simply means that preference shall be given to those
citizens who can make a viable contribution to the common good, because of credible
competence and efficiency. It certainly does NOT mandate the pampering and
preferential treatment to Filipino citizens or organizations that are incompetent or
inefficient, since such an indiscriminate preference would be counter productive and
inimical to the common good.

In the granting of economic rights, privileges, and concessions, when a choice has to be
made between a "qualified foreigner" end a "qualified Filipino," the latter shall be chosen
over the former."

Lastly, the word qualified is also determinable. Petitioner was so considered by

respondent GSIS and selected as one of the qualified bidders. It was pre-qualified by
respondent GSIS in accordance with its own guidelines so that the sole inference here
is that petitioner has been found to be possessed of proven management expertise in
the hotel industry, or it has significant equity ownership in another hotel company, or it
has an overall management and marketing proficiency to successfully operate the
Manila Hotel. 44

The penchant to try to whittle away the mandate of the Constitution by arguing that the
subject provision is not self-executory and requires implementing legislation is quite
disturbing. The attempt to violate a clear constitutional provision — by the government
itself — is only too distressing. To adopt such a line of reasoning is to renounce the duty
to ensure faithfulness to the Constitution. For, even some of the provisions of the
Constitution which evidently need implementing legislation have juridical life of their own
and can be the source of a judicial remedy. We cannot simply afford the government a
defense that arises out of the failure to enact further enabling, implementing or guiding
legislation. In fine, the discourse of Fr. Joaquin G. Bernas, S.J., on constitutional
government is apt —
 The executive department has a constitutional duty to implement laws, including the
Constitution, even before Congress acts — provided that there are discoverable legal
standards for executive action. When the executive acts, it must be guided by its own
understanding of the constitutional command and of applicable laws. The responsibility
for reading and understanding the Constitution and the laws is not the sole prerogative of
Congress. If it were, the executive would have to ask Congress, or perhaps the Court, for
an interpretation every time the executive is confronted by a constitutional command.
That is not how constitutional government operates. 45

Respondents further argue that the constitutional provision is addressed to the State,
not to respondent GSIS which by itself possesses a separate and distinct personality.
This argument again is at best specious. It is undisputed that the sale of 51% of the
MHC could only be carried out with the prior approval of the State acting through
respondent Committee on Privatization. As correctly pointed out by Fr. Joaquin G.
Bernas, S.J., this fact alone makes the sale of the assets of respondents GSIS and
MHC a "state action." In constitutional jurisprudence, the acts of persons distinct from
the government are considered "state action" covered by the Constitution (1) when the
activity it engages in is a "public function;" (2) when the government is so significantly
involved with the private actor as to make the government responsible for his action;
and, (3) when the government has approved or authorized the action. It is evident that
the act of respondent GSIS in selling 51% of its share in respondent MHC comes under
the second and third categories of "state action." Without doubt therefore the
transaction. although entered into by respondent GSIS, is in fact a transaction of the
State and therefore subject to the constitutional command. 46

When the Constitution addresses the State it refers not only to the people but also to
the government as elements of the State. After all, government is composed of three (3)
divisions of power — legislative, executive and judicial. Accordingly, a constitutional
mandate directed to the State is correspondingly directed to the three(3) branches of
government. It is undeniable that in this case the subject constitutional injunction is
addressed among others to the Executive Department and respondent GSIS, a
government instrumentality deriving its authority from the State.

It should be stressed that while the Malaysian firm offered the higher bid it is not yet the
winning bidder. The bidding rules expressly provide that the highest bidder shall only be
declared the winning bidder after it has negotiated and executed the necessary
contracts, and secured the requisite approvals. Since the "Filipino First Policy provision
of the Constitution bestows preference on qualified Filipinos the mere tending of the
highest bid is not an assurance that the highest bidder will be declared the winning
bidder. Resultantly, respondents are not bound to make the award yet, nor are they
under obligation to enter into one with the highest bidder. For in choosing the awardee
respondents are mandated to abide by the dictates of the 1987 Constitution the
provisions of which are presumed to be known to all the bidders and other interested
parties.

Adhering to the doctrine of constitutional supremacy, the subject constitutional provision

is, as it should be, impliedly written in the bidding rules issued by respondent GSIS, lest
the bidding rules be nullified for being violative of the Constitution. It is a basic principle
in constitutional law that all laws and contracts must conform with the fundamental law
of the land. Those which violate the Constitution lose their reason for being.

Paragraph V. J. 1 of the bidding rules provides that [if] for any reason the Highest
Bidder cannot be awarded the Block of Shares, GSIS may offer this to other Qualified
Bidders that have validly submitted bids provided that these Qualified Bidders are
willing to match the highest bid in terms of price per
share. 47 Certainly, the constitutional mandate itself is reason enough not to award the
block of shares immediately to the foreign bidder notwithstanding its submission of a
higher, or even the highest, bid. In fact, we cannot conceive of a stronger reason than
the constitutional injunction itself.

In the instant case, where a foreign firm submits the highest bid in a public bidding
concerning the grant of rights, privileges and concessions covering the national
economy and patrimony, thereby exceeding the bid of a Filipino, there is no question
that the Filipino will have to be allowed to match the bid of the foreign entity. And if the
Filipino matches the bid of a foreign firm the award should go to the Filipino. It must be
so if we are to give life and meaning to the Filipino First Policy provision of the 1987
Constitution. For, while this may neither be expressly stated nor contemplated in the
bidding rules, the constitutional fiat is, omnipresent to be simply disregarded. To ignore
it would be to sanction a perilous skirting of the basic law.

This Court does not discount the apprehension that this policy may discourage foreign
investors. But the Constitution and laws of the Philippines are understood to be always
open to public scrutiny. These are given factors which investors must consider when
venturing into business in a foreign jurisdiction. Any person therefore desiring to do
business in the Philippines or with any of its agencies or instrumentalities is presumed
to know his rights and obligations under the Constitution and the laws of the forum.

The argument of respondents that petitioner is now estopped from questioning the sale
to Renong Berhad since petitioner was well aware from the beginning that a foreigner
could participate in the bidding is meritless. Undoubtedly, Filipinos and foreigners alike
were invited to the bidding. But foreigners may be awarded the sale only if no Filipino
qualifies, or if the qualified Filipino fails to match the highest bid tendered by the foreign
entity. In the case before us, while petitioner was already preferred at the inception of
the bidding because of the constitutional mandate, petitioner had not yet matched the
bid offered by Renong Berhad. Thus it did not have the right or personality then to
compel respondent GSIS to accept its earlier bid. Rightly, only after it had matched the
bid of the foreign firm and the apparent disregard by respondent GSIS of petitioner's
matching bid did the latter have a cause of action.

Besides, there is no time frame for invoking the constitutional safeguard unless perhaps
the award has been finally made. To insist on selling the Manila Hotel to foreigners
when there is a Filipino group willing to match the bid of the foreign group is to insist
that government be treated as any other ordinary market player, and bound by its
mistakes or gross errors of judgment, regardless of the consequences to the Filipino
people. The miscomprehension of the Constitution is regrettable. Thus we would rather
remedy the indiscretion while there is still an opportunity to do so than let the
government develop the habit of forgetting that the Constitution lays down the basic
conditions and parameters for its actions.

Since petitioner has already matched the bid price tendered by Renong Berhad
pursuant to the bidding rules, respondent GSIS is left with no alternative but to award to
petitioner the block of shares of MHC and to execute the necessary agreements and
documents to effect the sale in accordance not only with the bidding guidelines and
procedures but with the Constitution as well. The refusal of respondent GSIS to execute
the corresponding documents with petitioner as provided in the bidding rules after the
latter has matched the bid of the Malaysian firm clearly constitutes grave abuse of
discretion.

The Filipino First Policy is a product of Philippine nationalism. It is embodied in the 1987
Constitution not merely to be used as a guideline for future legislation but primarily to be
enforced; so must it be enforced. This Court as the ultimate guardian of the Constitution
will never shun, under any reasonable circumstance, the duty of upholding the majesty
of the Constitution which it is tasked to defend. It is worth emphasizing that it is not the
intention of this Court to impede and diminish, much less undermine, the influx of
foreign investments. Far from it, the Court encourages and welcomes more business
opportunities but avowedly sanctions the preference for Filipinos whenever such
preference is ordained by the Constitution. The position of the Court on this matter
could have not been more appropriately articulated by Chief Justice Narvasa —

As scrupulously as it has tried to observe that it is not its function to substitute its
judgment for that of the legislature or the executive about the wisdom and feasibility of
legislation economic in nature, the Supreme Court has not been spared criticism for
decisions perceived as obstacles to economic progress and development . . . in
connection with a temporary injunction issued by the Court's First Division against the
sale of the Manila Hotel to a Malaysian Firm and its partner, certain statements were
published in a major daily to the effect that injunction "again demonstrates that the
Philippine legal system can be a major obstacle to doing business here.

Let it be stated for the record once again that while it is no business of the Court to
intervene in contracts of the kind referred to or set itself up as the judge of whether they
are viable or attainable, it is its bounden duty to make sure that they do not violate the
Constitution or the laws, or are not adopted or implemented with grave abuse of
discretion amounting to lack or excess of jurisdiction. It will never shirk that duty, no
matter how buffeted by winds of unfair and ill-informed criticism. 48

Privatization of a business asset for purposes of enhancing its business viability and
preventing further losses, regardless of the character of the asset, should not take
precedence over non-material values. A commercial, nay even a budgetary, objective
should not be pursued at the expense of national pride and dignity. For the Constitution
enshrines higher and nobler non-material values. Indeed, the Court will always defer to
the Constitution in the proper governance of a free society; after all, there is nothing so
sacrosanct in any economic policy as to draw itself beyond judicial review when the
Constitution is involved. 49
Nationalism is inherent, in the very concept of the Philippines being a democratic and
republican state, with sovereignty residing in the Filipino people and from whom all
government authority emanates. In nationalism, the happiness and welfare of the
people must be the goal. The nation-state can have no higher purpose. Any
interpretation of any constitutional provision must adhere to such basic concept.
Protection of foreign investments, while laudible, is merely a policy. It cannot override
the demands of nationalism. 50

The Manila Hotel or, for that matter, 51% of the MHC, is not just any commodity to be
sold to the highest bidder solely for the sake of privatization. We are not talking about
an ordinary piece of property in a commercial district. We are talking about a historic
relic that has hosted many of the most important events in the short history of the
Philippines as a nation. We are talking about a hotel where heads of states would prefer
to be housed as a strong manifestation of their desire to cloak the dignity of the highest
state function to their official visits to the Philippines. Thus the Manila Hotel has played
and continues to play a significant role as an authentic repository of twentieth century
Philippine history and culture. In this sense, it has become truly a reflection of the
Filipino soul — a place with a history of grandeur; a most historical setting that has
played a part in the shaping of a country. 51

This Court cannot extract rhyme nor reason from the determined efforts of respondents
to sell the historical landmark — this Grand Old Dame of hotels in Asia — to a total
stranger. For, indeed, the conveyance of this epic exponent of the Filipino psyche to
alien hands cannot be less than mephistophelian for it is, in whatever manner viewed, a
veritable alienation of a nation's soul for some pieces of foreign silver. And so we ask:
What advantage, which cannot be equally drawn from a qualified Filipino, can be gained
by the Filipinos Manila Hotel — and all that it stands for — is sold to a non-Filipino?
How much of national pride will vanish if the nation's cultural heritage is entrusted to a
foreign entity? On the other hand, how much dignity will be preserved and realized if the
national patrimony is safekept in the hands of a qualified, zealous and well-meaning
Filipino? This is the plain and simple meaning of the Filipino First Policy provision of the
Philippine Constitution. And this Court, heeding the clarion call of the Constitution and
accepting the duty of being the elderly watchman of the nation, will continue to respect
and protect the sanctity of the Constitution.

WHEREFORE, respondents GOVERNMENT SERVICE INSURANCE SYSTEM,

MANILA HOTEL CORPORATION, COMMITTEE ON PRIVATIZATION and OFFICE OF
THE GOVERNMENT CORPORATE COUNSEL are directed to CEASE and DESIST
from selling 51% of the shares of the Manila Hotel Corporation to RENONG BERHAD,
and to ACCEPT the matching bid of petitioner MANILA PRINCE HOTEL
CORPORATION to purchase the subject 51% of the shares of the Manila Hotel
Corporation at P44.00 per share and thereafter to execute the necessary clearances
and to do such other acts and deeds as may be necessary for purpose.

SO ORDERED.
Regalado, Davide, Jr., Romero, Kapunan, Francisco and Hermosisima, Jr., JJ., concur.

Separate Opinions

PADILLA, J., concurring:

I concur with the ponencia of Mr. Justice Bellosillo. At the same time, I would like to
expound a bit more on the concept of national patrimony as including within its scope
and meaning institutions such as the Manila Hotel.

It is argued by petitioner that the Manila Hotel comes under "national patrimony" over
which qualified Filipinos have the preference, in ownership and operation. The
Constitutional provision on point states:

xxx xxx xxx

In the grant of rights, privileges, and concessions covering the national economy and
patrimony, the State shall Give preference to qualified Filipinos. 1

Petitioner's argument, I believe, is well taken. Under the 1987 Constitution, "national
patrimony" consists of the natural resources provided by Almighty God (Preamble) in
our territory (Article I) consisting of land, sea, and air. 2 study of the 1935 Constitution,
where the concept of "national patrimony" originated, would show that its framers
decided to adopt the even more comprehensive expression "Patrimony of the Nation" in
the belief that the phrase encircles a concept embracing not only their natural resources
of the country but practically everything that belongs to the Filipino people, the tangible
and the material as well as the intangible and the spiritual assets and possessions of
the people. It is to be noted that the framers did not stop with conservation. They knew
that conservation alone does not spell progress; and that this may be achieved only
through development as a correlative factor to assure to the people not only the
exclusive ownership, but also the exclusive benefits of their national patrimony). 3

Moreover, the concept of national patrimony has been viewed as referring not only to
our rich natural resources but also to the cultural heritage of our
race. 4

There is no doubt in my mind that the Manila Hotel is very much a part of our national
patrimony and, as such, deserves constitutional protection as to who shall own it and
benefit from its operation. This institution has played an important role in our nation's
history, having been the venue of many a historical event, and serving as it did, and as
it does, as the Philippine Guest House for visiting foreign heads of state, dignitaries,
celebrities, and others. 5

It is therefore our duty to protect and preserve it for future generations of Filipinos. As
President Manuel L. Quezon once said, we must exploit the natural resources of our
country, but we should do so with. an eye to the welfare of the future generations. In
other words, the leaders of today are the trustees of the patrimony of our race. To
preserve our national patrimony and reserve it for Filipinos was the intent of the
distinguished gentlemen who first framed our Constitution. Thus, in debating the need
for nationalization of our lands and natural resources, one expounded that we should
"put more teeth into our laws, and; not make the nationalization of our lands and natural
resources a subject of ordinary legislation but of constitutional enactment" 6 To quote
further: "Let not our children be mere tenants and trespassers in their own country. Let
us preserve and bequeath to them what is rightfully theirs, free from all foreign liens and
encumbrances". 7

Now, a word on preference. In my view "preference to qualified Filipinos", to be

meaningful, must refer not only to things that are peripheral, collateral, or tangential. It
must touch and affect the very "heart of the existing order." In the field of public bidding
in the acquisition of things that pertain to the national patrimony, preference to qualified
Filipinos must allow a qualified Filipino to match or equal the higher bid of a non-Filipino;
the preference shall not operate only when the bids of the qualified Filipino and the non-
Filipino are equal in which case, the award should undisputedly be made to the qualified
Filipino. The Constitutional preference should give the qualified Filipino an opportunity
to match or equal the higher bid of the non-Filipino bidder if the preference of the
qualified Filipino bidder is to be significant at all.

It is true that in this present age of globalization of attitude towards foreign investments
in our country, stress is on the elimination of barriers to foreign trade and investment in
the country. While government agencies, including the courts should re-condition their
thinking to such a trend, and make it easy and even attractive for foreign investors to
come to our shores, yet we should not preclude ourselves from reserving to us Filipinos
certain areas where our national identity, culture and heritage are involved. In the hotel
industry, for instance, foreign investors have established themselves creditably, such as
in the Shangri-La, the Nikko, the Peninsula, and Mandarin Hotels. This should not stop
us from retaining 51% of the capital stock of the Manila Hotel Corporation in the hands
of Filipinos. This would be in keeping with the intent of the Filipino people to preserve
our national patrimony, including our historical and cultural heritage in the hands of
Filipinos.

VITUG, J., concurring:

I agree with Mr. Justice Josue N. Bellosillo on his clear-cut statements, shared by Mr.
Justice Reynato S. Puno in a well written separate (dissenting) opinion, that:
First, the provision in our fundamental law which provides that "(I)n the grant of rights,
privileges, and concessions covering the national economy and patrimony, the State
shall give preference to qualified Filipinos" 1 is self-executory. The provision verily does
not need, although it can obviously be amplified or regulated by, an enabling law or a
set of rules.

Second, the term "patrimony" does not merely refer to the country's natural resources
but also to its cultural heritage. A "historical landmark," to use the words of Mr. Justice
Justo P. Torres, Jr., Manila Hotel has now indeed become part of Philippine heritage.

Third, the act of the Government Service Insurance System ("GSIS"), a government
entity which derives its authority from the State, in selling 51% of its share in MHC
should be considered an act of the State subject to the Constitutional mandate.

On the pivotal issue of the degree of "preference to qualified Filipinos," I find it

somewhat difficult to take the same path traversed by the forceful reasoning of Justice
Puno. In the particular case before us, the only meaningful preference, it seems, would
really be to allow the qualified Filipino to match the foreign bid for, as a particular matter,
I cannot see any bid that literally calls for millions of dollars to be at par (to the last cent)
with another. The magnitude of the magnitude of the bids is such that it becomes hardly
possible for the competing bids to stand exactly "equal" which alone, under the
dissenting view, could trigger the right of preference.

It is most unfortunate that Renong Berhad has not been spared this great
disappointment, a letdown that it did not deserve, by a simple and timely advise of the
proper rules of bidding along with the peculiar constitutional implications of the
proposed transaction. It is also regrettable that the Court at time is seen, to instead, be
the refuge for bureaucratic inadequate which create the perception that it even takes on
non-justiciable controversies.

All told, I am constrained to vote for granting the petition.

MENDOZA, J., concurring in the judgment:

I take the view that in the context of the present controversy the only way to enforce the
constitutional mandate that "[i]n the grant of rights, privileges and concessions covering
the national patrimony the State shall give preference to qualified Filipinos" 1 is to allow
petitioner Philippine corporation to equal the bid of the Malaysian firm Renong Berhad
for the purchase of the controlling shares of stocks in the Manila Hotel Corporation.
Indeed, it is the only way a qualified Filipino of Philippine corporation can be given
preference in the enjoyment of a right, privilege or concession given by the State, by
favoring it over a foreign national corporation.

Under the rules on public bidding of the Government Service and Insurance System, if
petitioner and the Malaysian firm had offered the same price per share, "priority [would
be given] to the bidder seeking the larger ownership interest in MHC," 2 so that petitioner
bid for more shares, it would be preferred to the Malaysian corporation for that reason
and not because it is a Philippine corporation. Consequently, it is only in cases like the
present one, where an alien corporation is the highest bidder, that preferential treatment
of the Philippine corporation is mandated not by declaring it winner but by allowing it "to
match the highest bid in terms of price per share" before it is awarded the shares of
stocks. 3 That, to me, is what "preference to qualified Filipinos" means in the context of
this case — by favoring Filipinos whenever they are at a disadvantage vis-a-vis
foreigners.

This was the meaning given in Co Chiong v. Cuaderno 4 to a 1947 statute giving
"preference to Filipino citizens in the lease of public market stalls." 5 This Court upheld
the cancellation of existing leases covering market stalls occupied by persons who were
not Filipinos and the award thereafter of the stalls to qualified Filipino vendors as
ordered by the Department of Finance. Similarly, in Vda. de Salgado v. De la Fuente, 6
this Court sustained the validity of a municipal ordinance passed pursuant to the statute
(R.A. No. 37), terminating existing leases of public market stalls and granting preference
to Filipino citizens in the issuance of new licenses for the occupancy of the stalls. In
Chua Lao v. Raymundo, 7 the preference granted under the statute was held to apply to
cases in which Filipino vendors sought the same stalls occupied by alien vendors in the
public markets even if there were available other stalls as good as those occupied by
aliens. "The law, apparently, is applicable whenever there is a conflict of interest
between Filipino applicants and aliens for lease of stalls in public markets, in which
situation the right to preference immediately arises." 8

Our legislation on the matter thus antedated by a quarter of a century efforts began only
in the 1970s in America to realize the promise of equality, through affirmative action and
reverse discrimination programs designed to remedy past discrimination against colored
people in such areas as employment, contracting and licensing. 9 Indeed, in vital areas
of our national economy, there are situations in which the only way to place Filipinos in
control of the national economy as contemplated in the Constitution 10 is to give them
preferential treatment where they can at least stand on equal footing with aliens.

There need be no fear that thus preferring Filipinos would either invite foreign retaliation
or deprive the country of the benefit of foreign capital or know-how. We are dealing here
not with common trades of common means of livelihood which are open to aliens in our
midst, 11 but with the sale of government property, which is like the grant of government
largess of benefits and concessions covering the national economy" and therefore no
one should begrudge us if we give preferential treatment to our citizens. That at any rate
is the command of the Constitution. For the Manila Hotel is a business owned by the
Government. It is being privatized. Privatization should result in the relinquishment of
the business in favor of private individuals and groups who are Filipino citizens, not in
favor of aliens.

Nor should there be any doubt that by awarding the shares of stocks to petitioner we
would be trading competence and capability for nationalism. Both petitioner and the
Malaysian firm are qualified, having hurdled the prequalification process. 12 It is only the
result of the public bidding that is sought to be modified by enabling petitioner to up its
bid to equal the highest bid.

Nor, finally, is there any basis for the suggestion that to allow a Filipino bidder to match
the highest bid of an alien could encourage speculation, since all that a Filipino entity
would then do would be not to make a bid or make only a token one and, after it is
known that a foreign bidder has submitted the highest bid, make an offer matching that
of the foreign firm. This is not possible under the rules on public bidding of the GSIS.
Under these rules there is a minimum bid required (P36.87 per share for a range of 9 to
15 million shares). 13 Bids below the minimum will not be considered. On the other hand,
if the Filipino entity, after passing the prequalification process, does not submit a bid, he
will not be allowed to match the highest bid of the foreign firm because this is a privilege
allowed only to those who have "validly submitted bids." 14 The suggestion is, to say the
least, fanciful and has no basis in fact.

For the foregoing reasons, I vote to grant the petition.

TORRES, JR., J., separate opinion:

Constancy in law is not an attribute of a judicious mind. I say this as we are not
confronted in the case at bar with legal and constitutional issues — and yet I am driven
so to speak on the side of history. The reason perhaps is due to the belief that in the
words of Justice Oliver Wendell Holmes, Jr., a "page of history is worth a volume of
logic."

I will, however, attempt to share my thoughts on whether the Manila Hotel has a
historical and cultural aspect within the meaning of the constitution and thus, forming
part of the "patrimony of the nation".

Section 10, Article XII of the 1987 Constitution provides:

xxx xxx xxx

In the grant of rights, privileges, and concessions covering the national economy and
patrimony, the State shall give preference to qualified Filipinos.

The State shall regulate and exercise authority over foreign investments within its
national goals and priorities.

The foregoing provisions should be read in conjunction with Article II of the same
Constitution pertaining to "Declaration of Principles and State Policies" which ordain —

The State shall develop a self-reliant and independent national economy effectively by
Filipinos. (Sec. 19).

Interestingly, the matter of giving preference to "qualified Filipinos" was one of the
highlights in the 1987 Constitution Commission proceedings thus:
 xxx xxx xxx

MR. NOLLEDO. The Amendment will read: "IN THE

GRANT OF RIGHTS, PRIVILEGES AND
CONCESSIONS COVERING THE NATIONAL
ECONOMY AND PATRIMONY, THE STATE SHALL
GIVE PREFERENCE TO QUALIFIED FILIPINOS". And
the word "Filipinos" here, as intended by the proponents,
will include not only individual Filipinos but also Filipino-
Controlled entities fully controlled by Filipinos (Vol. III,
Records of the Constitutional Commission, p. 608).

MR. MONSOD. We also wanted to add, as

Commissioner Villegas said, this committee and this
body already approved what is known as the Filipino
First policy which was suggested by Commissioner de
Castro. So that it is now in our Constitution (Vol. IV,
Records of the Constitutional Commission, p. 225).

Commissioner Jose Nolledo explaining the provision adverted to above, said:

MR. NOLLEDO. In the grant of rights, privileges and

concessions covering the national economy and
patrimony, the State shall give preference to qualified
Filipinos.

MR. FOZ. In connection with that amendment, if a

foreign enterprise is qualified and the Filipinos enterprise
is also qualified, will the Filipino enterprise still be given
a preference?

MR. NOLLEDO. Obviously.

MR. FOZ. If the foreigner is more qualified in some

aspects than the Filipino enterprise, will the Filipino still
be preferred:?

MR. NOLLEDO. The answer is "yes". (Vol. III, p. 616,

Records of the Constitutional Commission).

The nationalistic provisions of the 1987 Constitution reflect the history and spirit of the
Malolos Constitution of 1898, the 1935 Constitution and the 1973 Constitutions. That we
have no reneged on this nationalist policy is articulated in one of the earliest case, this
Court said —

The nationalistic tendency is manifested in various provisions of the Constitution. . . . It

cannot therefore be said that a law imbued with the same purpose and spirit underlying
many of the provisions of the Constitution is unreasonable, invalid or unconstitutional
(Ichong, et al. vs. Hernandez, et al., 101 Phil. 1155).

I subscribe to the view that history, culture, heritage, and traditions are not legislated
and is the product of events, customs, usages and practices. It is actually a product of
growth and acceptance by the collective mores of a race. It is the spirit and soul of a
people.

The Manila Hotel is part of our history, culture and heritage. Every inch of the Manila
Hotel is witness to historic events (too numerous to mention) which shaped our history
for almost 84 years.

As I intimated earlier, it is not my position in this opinion, to examine the single

instances of the legal largese which have given rise to this controversy. As I believe that
has been exhaustively discussed in the ponencia. Suffice it to say at this point that the
history of the Manila Hotel should not be placed in the auction block of a purely
business transaction, where profits subverts the cherished historical values of our
people.

As a historical landmark in this "Pearl of the Orient Seas", it has its enviable tradition
which, in the words of the philosopher Salvador de Madarriaga tradition is "more of a
river than a stone, it keeps flowing, and one must view the flowing , and one must view
the flow of both directions. If you look towards the hill from which the river flows, you
see tradition in the form of forceful currents that push the river or people towards the
future, and if you look the other way, you progress."

Indeed, tradition and progress are the same, for progress depends on the kind of
tradition. Let us not jettison the tradition of the Manila Hotel and thereby repeat our
colonial history.

I grant, of course the men of the law can see the same subject in different lights.

I remember, however, a Spanish proverb which says — "He is always right who
suspects that he makes mistakes". On this note, I say that if I have to make a mistake, I
would rather err upholding the belief that the Filipino be first under his Constitution and
in his own land.

I vote GRANT the petition.

PUNO, J., dissenting:

This is a. petition for prohibition and mandamus filed by the Manila Prince Hotel
Corporation, a domestic corporation, to stop the Government Service Insurance System
(GSIS) from selling the controlling shares of the Manila Hotel Corporation to a foreign
corporation. Allegedly, the sale violates the second paragraph of section 10, Article XII
of the Constitution.

Respondent GSIS is a government-owned and controlled corporation. It is the sole

owner of the Manila Hotel which it operates through its subsidiary, the Manila Hotel
Corporation. Manila Hotel was included in the privatization program of the government.
In 1995, GSIS proposed to sell to interested buyers 30% to 51% of its shares, ranging
from 9,000,000 to 15,300,000 shares, in the Manila Hotel Corporation. After the
absence of bids at the first public bidding, the block of shares offered for sale was
increased from a maximum of 30% to 51%. Also, the winning bidder, or the eventual
"strategic partner" of the GSIS was required to "provide management expertise and/or
an international marketing/reservation system, and financial support to strengthen the
profitability and performance of the Manila Hotel" 1 The proposal was approved by
respondent Committee on Privatization.

In July 1995, a conference was held where prequalification documents and the bidding
rules were furnished interested parties. Petitioner Manila Prince Hotel, a domestic
corporation, and Renong Berhad, Malaysian firm with ITT Sheraton as operator,
prequalified. 2

The bidding rules and procedures entitled "Guidelines and Procedures: Second
Prequalification and Public Bidding of the MHC Privatization" provide:

I INTRODUCTION AND HIGHLIGHTS

DETERMINING THE WINNING BIDDER/STRATEGIC PARTNER

The party that accomplishes the steps set forth below will be declared the Winning
Bidder/Strategic Partner and will be awarded the Block of Shares:

First — Pass the prequalification process;

Second — Submit the highest bid on a price per share basis for the Block of Shares;

Third — Negotiate and execute the necessary contracts with GSIS/MHC not later than
October 23, 1995;

xxx xxx xxx

IV GUIDELINES FOR PREQUALIFICATION

A. PARTIES WHO MAP APPLY FOR PREQUALIFICATION

The Winning Bidder/Strategic Partner will be expected to provide

management expertise and/or an international marketing reservation
system, and financial support to strengthen the profitability and
performance of The Manila Hotel. In this context, the GSIS is inviting to
the prequalification process any local and/or foreign corporation,
consortium/joint venture or juridical entity with at least one of the
following qualifications:

a. Proven management .expertise in the hotel industry;

or
 b. Significant equity ownership (i.e. board
representation) in another hotel company; or

c. Overall management and marketing expertise to

successfully operate the Manila Hotel.

Parties interested in bidding for MHC should be able to provide access to

the requisite management expertise and/or international
marketing/reservation system for The Manila Hotel.

xxx xxx xxx

D. PREQUALIFICATION DOCUMENTS

xxx xxx xxx

E. APPLICATION PROCEDURE

1. DOCUMENTS AVAILABLE AT THE REGISTRATION OFFICE

The prequalification documents can be secured at the Registration Office

between 9:00 AM to 4:00 PM during working days within the period
specified in Section III. Each set of documents consists of the following:

a. Guidelines and Procedures: Second Prequalification

and Public Bidding of the MHC Privatization

b. Confidential Information Memorandum: The Manila

Hotel Corporation

c. Letter of Invitation. to the Prequalification and Bidding

Conference

xxx xxx xxx

4. PREQUALIFICATION AND BIDDING CONFERENCE

A prequalification and bidding conference will be held at The Manila

Hotel on the date specified in Section III to allow the Applicant to seek
clarifications and further information regarding the guidelines and
procedures. Only those who purchased the prequalification documents
will be allowed in this conference. Attendance to this conference is
strongly advised, although the Applicant will not be penalized if it does
not attend.

5. SUBMISSION OF PREQUALIFICATION DOCUMENTS

The applicant should submit 5 sets of the prequalification documents (1

original set plus 4 copies) at the Registration Office between 9:00 AM to
4:00 PM during working days within the period specified in Section III.

F. PREQUALIFICATION PROCESS
 1. The Applicant will be evaluated by the PBAC with the
assistance of the TEC based on the Information
Package and other information available to the PBAC.

2. If the Applicant is a Consortium/Joint Venture, the

evaluation will consider the overall qualifications of the
group, taking into account the contribution of each
member to the venture.

3. The decision of the PBAC with respect to the results

of the PBAC evaluation will be final.

4. The Applicant shall be evaluated according to the

criteria set forth below:

a. Business management expertise,

track record, and experience

b. Financial capability.

c. Feasibility and acceptability of the

proposed strategic plan for the Manila
Hotel

5. The PBAC will shortlist such number of Applicants as it may deem

appropriate.

6. The parties that prequalified in the first MHC public bidding — ITT
Sheraton, Marriot International Inc., Renaissance Hotels International
Inc., consortium of RCBC Capital/Ritz Carlton — may participate in the
Public Bidding without having to undergo the prequalification process
again.

G. SHORTLIST OF QUALIFIED BIDDERS

1. A notice of prequalification results containing the shortlist of Qualified

Bidders will be posted at the Registration Office at the date specified in
Section III.

2. In the case of a Consortium/Joint Venture, the withdrawal by member

whose qualification was a material consideration for being included in the
shortlist is ground for disqualification of the Applicant.

V. GUIDELINES FOR THE PUBLIC BIDDING

A. PARTIES WHO MAY PARTICIPATE IN THE PUBLIC BIDDING

All parties in the shortlist of Qualified Bidders will be eligible to participate

in the Public Bidding.

B. BLOCK OF SHARES
A range of Nine Million (9,000,000) to Fifteen Million Three Hundred
Thousand (15,300,000) shares of stock representing Thirty Percent to
Fifty-One Percent (30%-51%) of the issued and outstanding shares of
MHC, will be offered in the Public Bidding by the GSIS. The Qualified
Bidders will have the Option of determining the number of shares within
the range to bid for. The range is intended to attract bidders with different
preferences and objectives for the operation and management of The
Manila Hotel.

C. MINIMUM BID REQUIRED ON A PRICE PER SHARE BASIS

1. Bids will be evaluated on a price per share basis. The minimum bid
required on a price per share basis for the Block of Shares is Thirty-Six
Pesos and Sixty-Seven Centavos (P36.67).

2. Bids should be in the Philippine currency payable to the GSIS.

3. Bids submitted with an equivalent price per share below the minimum
required will not considered.

D. TRANSFER COSTS

xxx xxx xxx

E. OFFICIAL BID FORM

1. Bids must be contained in the prescribed Official Bid Form, a copy of

which is attached as Annex IV. The Official Bid Form must be properly
accomplished in all details; improper accomplishment may be a sufficient
basis for disqualification.

2. During the Public Bidding, the Qualified Bidder will submit the Official
Bid Form, which will indicate the offered purchase price, in a sealed
envelope marked "OFFICIAL BID."

F. SUPPORTING DOCUMENTS

During the Public Bidding, the following documents should be submitted

along with the bid in a separate envelop marked "SUPPORTING
DOCUMENTS":

1. WRITTEN AUTHORITY TO BID (UNDER OATH).

If the Qualified Bidder is a corporation, the representative of the Qualified

Bidder should submit a Board resolution which adequately authorizes
such representative to bid for and in behalf of the corporation with full
authority to perform such acts necessary or requisite to bind the Qualified
Bidder.

If the Qualified Bidder is a Consortium/Joint Venture, each member of

the Consortium/Joint venture should submit a Board resolution
authorizing one of its members and such member's representative to
 make the bid on behalf of the group with full authority to perform such
acts necessary or requisite to bind the Qualified Bidder.

2. BID SECURITY

a. The Qualified Bidder should deposit Thirty-Three Million Pesos

(P33,000,00), in Philippine currency as Bid Security in the form of:

i. Manager's check or unconditional demand draft

payable to the "Government Service Insurance System"
and issued by a reputable banking institution duly
licensed to do business in the Philippines and
acceptable to GSIS; or

ii. Standby-by letter of credit issued by a reputable

banking institution acceptable to the GSIS.

b. The GSIS will reject a bid if:

i. The bid does not have Bid Security; or

ii. The Bid Security accompanying the bid is for less than
the required amount.

c. If the Bid Security is in the form of a manager's check or unconditional

demand draft, the interest earned on the Bid Security will be for the
account of GSIS.

d. If the Qualified Bidder becomes the winning Bidder/Strategic Partner,

the Bid Security will be applied as the downpayment on the Qualified
Bidder's offered purchase price.

e. The Bid Security of the Qualified Bidder will be returned immediately

after the Public Bidding if the Qualified Bidder is not declared the Highest
Bidder.

f. The Bid Security will be returned by October 23, 1995 if the Highest
Bidder is unable to negotiate and execute with GSIS/MHC the
Management Contract, International Marketing/Reservation System
Contract or other types of contract specified by the Highest Bidder in its
strategic plan for The Manila Hotel.

g. The Bid Security of the Highest Bidder will be forfeited in favor of GSIS
if the Highest Bidder, after negotiating and executing the Management
Contract, International Marketing/Reservation System Contract specified
by the Highest Bidder or other types of contract in its strategic plan for
The Manila Hotel, fails or refuses to:

i. Execute the Stock Purchase and Sale Agreement with

GSIS not later than October 23, 1995; or

ii. Pay the full amount of the offered purchase price not
later than October 23, 1995; or
 iii. Consummate the sale of the Block of Shares for any
other reason.

G. SUBMISSION OF BIDS

1. The Public Bidding will be held on September 7, 1995 at the following

location:

New GSIS Headquarters Building

Financial Center, Reclamation Area
Roxas Boulevard, Pasay City, Metro Manila.

2. The Secretariat of the PBAC will be stationed at the Public Bidding to

accept any and all bids and supporting requirements. Representatives
from the Commission on Audit and COP will be invited to witness the
proceedings.

3. The Qualified Bidder should submit its bid using the Official Bid Form.
The accomplished Official Bid Form should be submitted in a sealed
envelope marked "OFFICIAL BID."

4. The Qualified Bidder should submit the following documents in

another sealed envelope marked "SUPPORTING BID DOCUMENTS"

a. Written Authority Bid

b. Bid Security

5. The two sealed envelopes marked "OFFICIAL BID" and

"SUPPORTING BID DOCUMENTS" must be submitted simultaneously
to the Secretariat between 9:00 AM and 2:00 PM, Philippine Standard
Time, on the date of the Public Bidding. No bid shall be accepted after
the closing time. Opened or tampered bids shall not be accepted.

6. The Secretariat will log and record the actual time of submission of the
two sealed envelopes. The actual time of submission will also be
indicated by the Secretariat on the face of the two envelopes.

7. After Step No. 6, the two sealed envelopes will be dropped in the
corresponding bid boxes provided for the purpose. These boxes will be in
full view of the invited public.

H. OPENING AND READING OF BIDS

1. After the closing time of 2:00 PM on the date of the Public Bidding, the
PBAC will open all sealed envelopes marked "SUPPORTING BID
DOCUMENTS" for screening, evaluation and acceptance. Those who
submitted incomplete/insufficient documents or document/s which is/are
not substantially in the form required by PBAC will be disqualified. The
envelope containing their Official Bid Form will be immediately returned
to the disqualified bidders.
2. The sealed envelopes marked "OFFICIAL BID" will be opened at 3:00
PM. The name of the bidder and the amount of its bid price will be read
publicly as the envelopes are opened.

3. Immediately following the reading of the bids, the PBAC will formally
announce the highest bid and the Highest Bidder.

4. The highest bid will be, determined on a price per share basis. In the
event of a tie wherein two or more bids have the same equivalent price
per share, priority will be given to the bidder seeking the larger ownership
interest in MHC.

5. The Public Bidding will be declared a failed bidding in case:

a. No single bid is submitted within the prescribed

period; or

b. There is only one (1) bid that is submitted and

acceptable to the PBAC.

I. EXECUTION OF THE NECESSARY CONTRACTS WITH GSIS/MHC

1. The Highest Bidder must comply with the conditions set forth below by
October 23, 1995 or the Highest Bidder will lose the right to purchase the
Block of Shares and GSIS will instead offer the Block of Shares to the
other Qualified Bidders:

a. The Highest Bidder must negotiate and execute with

GSIS/MHC the Management Contract, International
Marketing Reservation System Contract or other type of
contract specified by the Highest Bidder in its strategic
plan for The Manila Hotel. If the Highest Bidder is
intending to provide only financial support to The Manila
Hotel, a separate institution may enter into the
aforementioned contract/s with GSIS/MHC.

b. The Highest Bidder must execute the Stock Purchase

and Sale Agreement with GSIS, a copy of which will be
distributed to each of the Qualified Bidder after the
prequalification process is completed.

2. In the event that the Highest Bidder chooses a Management Contract

for The Manila Hotel, the maximum levels for the management fee
structure that GSIS/MHC are prepared to accept in the Management
Contract are as follows:

a. Basic management fee: Maximum of 2.5% of gross

revenues.(1)

b. Incentive fee: Maximum of 8.0% of gross operating

profit(1) after deducting undistributed overhead
expenses and the basic management fee.
 c. Fixed component of the international
marketing/reservation system fee: Maximum of 2.0% of
gross room revenues.(1) The Applicant should indicate
in its Information Package if it is wishes to charge this
fee.

Note (1): As defined in the uniform system of account for hotels.

The GSIS/MHC have indicated above the acceptable parameters for the
hotel management fees to facilitate the negotiations with the Highest
Bidder for the Management Contract after the Public Bidding.

A Qualified Bidder envisioning a Management Contract for The Manila

Hotel should determine whether or not the management fee structure
above is acceptable before submitting their prequalification documents to
GSIS.

J. BLOCK SALE TO THE OTHER QUALIFIED BIDDERS

1. If for any reason, the Highest Bidder cannot be awarded the Block of
Shares, GSIS may offer this to the other Qualified Bidders that have
validly submitted bids provided that these Qualified are willing to match
the highest bid in terms of price per share.

2. The order of priority among the interested Qualified Bidders will be in

accordance wit the equivalent price per share of their respective bids in
their public Bidding, i.e., first and second priority will be given to the
Qualified Bidders that submitted the second and third highest bids on the
price per share basis, respectively, and so on.

K. DECLARATION OF THE WINNING BIDDER/STRATEGIC PARTNER

The Highest Bidder will be declared the Winning Bidder/Strategic Partner

after the following conditions are met:

a. Execution of the necessary contract with GSIS/MHC

not later than October 23, 1995; and

b. Requisite approvals from the GSIS/MHC and

COP/OGCC are obtained.

I. FULL PAYMENT FOR THE BLOCK OF SHARES

1. Upon execution of the necessary contracts with GSIS/MHC, the

Winning Bidder/Strategic Partner must fully pay, not later than October
23, 1995, the offered purchase price for the Block of Shares after
deducting the Bid Security applied as downpayment.

2. All payments should be made in the form of a Manager's Check or

unconditional Demand Draft, payable to the "Government Service
Insurance System," issued by a reputable banking institution licensed to
do business in the Philippines and acceptable to GSIS.
 M. GENERAL CONDITIONS

1. The GSIS unconditionally reserves the right to reject any or all

applications, waive any formality therein, or accept such application as
maybe considered most advantageous to the GSIS. The GSIS similarly
reserves the right to require the submission of any additional information
from the Applicant as the PBAC may deem necessary.

2. The GSIS further reserves the right to call off the Public Bidding prior
to acceptance of the bids and call for a new public bidding under
amended rules, and without any liability whatsoever to any or all the
Qualified Bidders, except the obligation to return the Bid Security.

3. The GSIS reserves the right to reset the date of the

prequalification/bidding conference, the deadline for the submission of
the prequalification documents, the date of the Public Bidding or other
pertinent activities at least three (3) calendar days prior to the respective
deadlines/target dates.

4. The GSIS sells only whatever rights, interest and participation it has
on the Block of Shares.

5. All documents and materials submitted by the Qualified Bidders,

except the Bid Security, may be returned upon request.

6. The decision of the PBAC/GSIS on the results of the Public Bidding is

final. The Qualified Bidders, by participating in the Public Bidding, are
deemed to have agreed to accept and abide by these results.

7. The GSIS will be held free and harmless form any liability, suit or
allegation arising out of the Public Bidding by the Qualified Bidders who
have participated in the Public Bidding. 3

The second public bidding was held on September 18, 1995. Petitioner bidded P41.00
per share for 15,300,000 shares and Renong Berhad bidded P44.00 per share also for
15,300,000 shares. The GSIS declared Renong Berhad the highest bidder and
immediately returned petitioner's bid security.

On September 28, 1995, ten days after the bidding, petitioner wrote to GSIS offering to
match the bid price of Renong Berhad. It requested that the award be made to itself
citing the second paragraph of Section 10, Article XII of the Constitution. It sent a
manager's check for thirty-three million pesos (P33,000,000.00) as bid security.

Respondent GSIS, then in the process of negotiating with Renong Berhad the terms
and conditions of the contract and technical agreements in the operation of the hotel,
refused to entertain petitioner's request.

Hence, petitioner filed the present petition. We issued a temporary restraining order on
October 18, 1995.
Petitioner anchors its plea on the second paragraph of Article XII, Section 10 of the
Constitution 4 on the "National Economy and Patrimony" which provides:

xxx xxx xxx

In the grant of rights, privileges, and concessions covering the national economy and
patrimony, the State shall give preference to qualified Filipinos.

xxx xxx xxx

The vital issues can be summed up as follows:

(1) Whether section 10, paragraph 2 of Article XII of the Constitution is a self-executing
provision and does not need implementing legislation to carry it into effect;

(2) Assuming section 10 paragraph 2 of Article XII is self-executing whether the

controlling shares of the Manila Hotel Corporation form part of our patrimony as a nation;

(3) Whether GSIS is included in the term "State," hence, mandated to implement section
10, paragraph 2 of Article XII of the Constitution;

(4) Assuming GSIS is part of the State, whether it failed to give preference to petitioner, a
qualified Filipino corporation, over and above Renong Berhad, a foreign corporation, in
the sale of the controlling shares of the Manila Hotel Corporation;

(5) Whether petitioner is estopped from questioning the sale of the shares to Renong
Berhad, a foreign corporation.

Anent the first issue, it is now familiar learning that a Constitution provides the guiding
policies and principles upon which is built the substantial foundation and general
framework of the law and government. 5 As a rule, its provisions are deemed self-
executing and can be enforced without further legislative action. 6 Some of its provisions,
however, can be implemented only through appropriate laws enacted by the
Legislature, hence not self-executing.

To determine whether a particular provision of a Constitution is self-executing is a hard

row to hoe. The key lies on the intent of the framers of the fundamental law oftentimes
submerged in its language. A searching inquiry should be made to find out if the
provision is intended as a present enactment, complete in itself as a definitive law, or if
it needs future legislation for completion and enforcement. 7 The inquiry demands a
micro-analysis of the text and the context of the provision in question. 8

Courts as a rule consider the provisions of the Constitution as self-executing, 9 rather

than as requiring future legislation for their enforcement. 10 The reason is not difficult to
discern. For if they are not treated as self-executing, the mandate of the fundamental
law ratified by the sovereign people can be easily ignored and nullified by Congress. 11
Suffused with wisdom of the ages is the unyielding rule that legislative actions may give
breath to constitutional rights but congressional in action should not suffocate them. 12
Thus, we have treated as self-executing the provisions in the Bill of Rights on arrests,
searches and seizures, 13 the rights of a person under custodial investigation, 14 the
rights of an accused, 15 and the privilege against self-incrimination, 16 It is recognize a
that legislation is unnecessary to enable courts to effectuate constitutional provisions
guaranteeing the fundamental rights of life, liberty and the protection of property. 17 The
same treatment is accorded to constitutional provisions forbidding the taking or
damaging of property for public use without just compensation. 18

Contrariwise, case law lays down the rule that a constitutional provision is not self-
executing where it merely announces a policy and its language empowers the
Legislature to prescribe the means by which the policy shall be carried into effect. 19
Accordingly, we have held that the provisions in Article II of our Constitution entitled
"Declaration of Principles and State Policies" should generally be construed as mere
statements of principles of the State. 20 We have also ruled that some provisions of
Article XIII on "Social Justice and Human Rights," 21 and Article XIV on "Education
Science and Technology, Arts, Culture end Sports" 22 cannot be the basis of judicially
enforceable rights. Their enforcement is addressed to the discretion of Congress though
they provide the framework for legislation 23 to effectuate their policy content. 24

Guided by this map of settled jurisprudence, we now consider whether Section 10,
Article XII of the 1987 Constitution is self-executing or not. It reads:

Sec. 10. The Congress shall, upon recommendation of the economic and planning
agency, when the national interest dictates, reserve to citizens of the Philippines or to
corporations or associations at least sixty per centum of whose capital is owned by such
citizens, or such higher percentage as Congress may prescribe, certain areas of
investments. The Congress shall enact measures that will encourage the formation and
operation of enterprises whose capital is wholly owned by Filipinos.

In the grant of rights, privileges, and concessions covering the national economy and
patrimony, the State shall give preference to qualified Filipinos.

The State shall regulate and exercise authority over foreign investments within its
national jurisdiction and in accordance with its national goals and priorities.

The first paragraph directs Congress to reserve certain areas of investments in

the country 25 to Filipino citizens or to corporations sixty per
cent 26 of whose capital stock is owned by Filipinos. It further commands
Congress to enact laws that will encourage the formation and operation of one
hundred percent Filipino-owned enterprises. In checkered contrast, the second
paragraph orders the entire State to give preference to qualified Filipinos in the
grant of rights and privileges covering the national economy and patrimony. The
third paragraph also directs the State to regulate foreign investments in line with
our national goals and well-set priorities.

The first paragraph of Section 10 is not self-executing. By its express text, there
is a categorical command for Congress to enact laws restricting foreign
ownership in certain areas of investments in the country and to encourage the
 formation and operation of wholly-owned Filipino enterprises. The right granted
by the provision is clearly still in esse. Congress has to breathe life to the right by
means of legislation. Parenthetically, this paragraph was plucked from section 3,
Article XIV of the 1973 Constitution. 27 The provision in the 1973 Constitution
affirmed our ruling in the landmark case of Lao Ichong v. Hernandez, 28 where we
upheld the discretionary authority of Congress to Filipinize certain areas of
investments. 29 By reenacting the 1973 provision, the first paragraph of section 10
affirmed the power of Congress to nationalize certain areas of investments in
favor of Filipinos.

The second and third paragraphs of Section 10 are different. They are directed to the
State and not to Congress alone which is but one of the three great branches of our
government. Their coverage is also broader for they cover "the national economy and
patrimony" and "foreign investments within [the] national jurisdiction" and not merely
"certain areas of investments." Beyond debate, they cannot be read as granting
Congress the exclusive power to implement by law the policy of giving preference to
qualified Filipinos in the conferral of rights and privileges covering our national economy
and patrimony. Their language does not suggest that any of the State agency or
instrumentality has the privilege to hedge or to refuse its implementation for any reason
whatsoever. Their duty to implement is unconditional and it is now. The second and the
third paragraphs of Section 10, Article XII are thus self-executing.

This submission is strengthened by Article II of the Constitution entitled "Declaration of

Principles and State Policies." Its Section 19 provides that "[T]he State shall develop a
self-reliant and independent national economy effectively controlled by Filipinos." It
engrafts the all-important Filipino First policy in our fundamental law and by the use of
the mandatory word "shall," directs its enforcement by the whole State without any
pause or a half- pause in time.

The second issue is whether the sale of a majority of the stocks of the Manila Hotel
Corporation involves the disposition of part of our national patrimony. The records of the
Constitutional Commission show that the Commissioners entertained the same view as
to its meaning. According to Commissioner Nolledo, "patrimony" refers not only to our
rich natural resources but also to the cultural heritage of our race. 30 By this yardstick,
the sale of Manila Hotel falls within the coverage of the constitutional provision giving
preferential treatment to qualified Filipinos in the grant of rights involving our national
patrimony. The unique value of the Manila Hotel to our history and culture cannot be
viewed with a myopic eye. The value of the hotel goes beyond pesos and centavos. As
chronicled by Beth Day Romulo, 31 the hotel first opened on July 4, 1912 as a first-class
hotel built by the American Insular Government for Americans living in, or passing
through, Manila while traveling to the Orient. Indigenous materials and Filipino
craftsmanship were utilized in its construction, For sometime, it was exclusively used by
American and Caucasian travelers and served as the "official guesthouse" of the
American Insular Government for visiting foreign dignitaries. Filipinos began coming to
the Hotel as guests during the Commonwealth period. When the Japanese occupied
Manila, it served as military headquarters and lodging for the highest-ranking officers
from Tokyo. It was at the Hotel and the Intramuros that the Japanese made their last
stand during the Liberation of Manila. After the war, the Hotel again served foreign
guests and Filipinos alike. Presidents and kings, premiers and potentates, as well as
glamorous international film and sports celebrities were housed in the Hotel. It was also
the situs of international conventions and conferences. In the local scene, it was the
venue of historic meetings, parties and conventions of political parties. The Hotel has
reaped and continues reaping numerous recognitions and awards from international
hotel and travel award-giving bodies, a fitting acknowledgment of Filipino talent and
ingenuity. These are judicially cognizable facts which cannot be bent by a biased mind.

The Hotel may not, as yet, have been declared a national cultural treasure pursuant to
Republic Act No. 4846 but that does not exclude it from our national patrimony.
Republic Act No. 4846, "The Cultural Properties Preservation and Protection Act,"
merely provides a procedure whereby a particular cultural property may be classified a
"national cultural treasure" or an "important cultural property. 32 Approved on June 18,
1966 and amended by P.D. 374 in 1974, the law is limited in its reach and cannot be
read as the exclusive law implementing section 10, Article XII of the 1987 Constitution.
To be sure, the law does not equate cultural treasure and cultural property as
synonymous to the phrase "patrimony of the nation."

The third issue is whether the constitutional command to the State includes the
respondent GSIS. A look at its charter will reveal that GSIS is a government-owned and
controlled corporation that administers funds that come from the monthly contributions
of government employees and the government. 33 The funds are held in trust for a
distinct purpose which cannot be disposed of indifferently. 34 They are to be used to
finance the retirement, disability and life insurance benefits of the employees and the
administrative and operational expenses of the GSIS, 35 Excess funds, however, are
allowed to be invested in business and other ventures for the benefit of the employees.
36
It is thus contended that the GSIS investment in the Manila Hotel Corporation is a
simple business venture, hence, an act beyond the contemplation of section 10,
paragraph 2 of Article XII of the Constitution.

The submission is unimpressive. The GSIS is not a pure private corporation. It is

essentially a public corporation created by Congress and granted an original charter to
serve a public purpose. It is subject to the jurisdictions of the Civil Service Commission
37
and the Commission on Audit. 38 As state-owned and controlled corporation, it is skin-
bound to adhere to the policies spelled out in the general welfare of the people. One of
these policies is the Filipino First policy which the people elevated as a constitutional
command.

The fourth issue demands that we look at the content of phrase "qualified Filipinos" and
their "preferential right." The Constitution desisted from defining their contents. This is
as it ought to be for a Constitution only lays down flexible policies and principles which
can bent to meet today's manifest needs and tomorrow's unmanifested demands. Only
a constitution strung with elasticity can grow as a living constitution.
Thus, during the deliberations in the Constitutional Commission, Commissioner Nolledo
to define the phrase brushed aside a suggestion to define the phrase "qualified
Filipinos." He explained that present and prospective "laws" will take care of the
problem of its interpretation, viz:

xxx xxx xxx

THE PRESIDENT. What is the suggestion of

Commissioner Rodrigo? Is it to remove the word
"QUALIFIED?"

MR. RODRIGO. No, no, but say definitely "TO

QUALIFIED FILIPINOS" as against whom? As against
aliens over aliens?

MR. NOLLEDO. Madam President, I think that is

understood. We use the word "QUALIFIED" because the
existing laws or the prospective laws will always lay
down conditions under which business map be done, for
example, qualifications on capital, qualifications on the
setting up of other financial structures, et cetera.

MR. RODRIGO. It is just a matter of style.

MR. NOLLEDO Yes.

MR. RODRIGO. If we say, "PREFERENCE TO

QUALIFIED FILIPINOS," it can be understood as giving
preference to qualified Filipinos as against Filipinos who
are not qualified.

MR. NOLLEDO. Madam President, that was the

intention of the proponents. The committee has
accepted the amendment.

xxx xxx xxx

As previously discussed, the constitutional command to enforce the Filipino First

policy is addressed to the State and not to Congress alone. Hence, the word
"laws" should not be understood as limited to legislations but all state actions
which include applicable rules and regulations adopted by agencies and
instrumentalities of the State in the exercise of their rule-making power. In the
case at bar, the bidding rules and regulations set forth the standards to measure
the qualifications of bidders Filipinos and foreigners alike. It is not seriously
disputed that petitioner qualified to bid as did Renong Berhad. 39

Thus, we come to the critical issue of the degree of preference which GSIS should have
accorded petitioner, a qualified Filipino, over Renong Berhad, a foreigner, in the
purchase of the controlling shares of the Manila Hotel. Petitioner claims that after losing
the bid, this right of preference gives it a second chance to match the highest bid of
Renong Berhad.

With due respect, I cannot sustain petitioner's submission. I prescind from the premise
that the second paragraph of section 10, Article XII of the Constitution is pro-Pilipino but
not anti-alien. It is pro-Filipino for it gives preference to Filipinos. It is not, however, anti-
alien per se for it does not absolutely bar aliens in the grant of rights, privileges and
concessions covering the national economy and patrimony. Indeed, in the absence of
qualified Filipinos, the State is not prohibited from granting these rights, privileges and
concessions to foreigners if the act will promote the weal of the nation.

In implementing the policy articulated in section 10, Article XII of the Constitution, the
stellar task of our State policy-makers is to maintain a creative tension between two
desiderata — first, the need to develop our economy and patrimony with the help of
foreigners if necessary, and, second, the need to keep our economy controlled by
Filipinos. Rightfully, the framers of the Constitution did not define the degree of the right
of preference to be given to qualified Filipinos. They knew that for the right to serve the
general welfare, it must have a malleable content that can be adjusted by our policy-
makers to meet the changing needs of our people. In fine, the right of preference of
qualified Filipinos is to be determined by degree as time dictates and circumstances
warrant. The lesser the need for alien assistance, the greater the degree of the right of
preference can be given to Filipinos and vice verse.

Again, it should be stressed that the right and the duty to determine the degree of this
privilege at any given time is addressed to the entire State. While under our
constitutional scheme, the right primarily belongs to Congress as the lawmaking
department of our government, other branches of government, and all their agencies
and instrumentalities, share the power to enforce this state policy. Within the limits of
their authority, they can act or promulgate rules and regulations defining the degree of
this right of preference in cases where they have to make grants involving the national
economy and judicial duty. On the other hand, our duty is to strike down acts of the
state that violate the policy.

To date, Congress has not enacted a law defining the degree of the preferential right.
Consequently, we must turn to the rules and regulations of on respondents Committee
Privatization and GSIS to determine the degree of preference that petitioner is entitled
to as a qualified Filipino in the subject sale. A tearless look at the rules and regulations
will show that they are silent on the degree of preferential right to be accorded qualified
Filipino bidder. Despite their silence, however, they cannot be read to mean that they do
not grant any degree of preference to petitioner for paragraph 2, section 10, Article XII
of the Constitution is deemed part of said rules and regulations. Pursuant to legal
hermeneutics which demand that we interpret rules to save them from
unconstitutionality, I submit that the right of preference of petitioner arises only if it tied
the bid of Benong Berhad. In that instance, all things stand equal, and bidder, as a
qualified Pilipino bidder, should be preferred.
It is with deep regret that I cannot subscribe to the view that petitioner has a right to
match the bid of Renong Berhad. Petitioner's submission must be supported by the
rules but even if we examine the rules inside-out .thousand times, they can not justify
the claimed right. Under the rules, the right to match the highest bid arises only "if for
any reason, the highest bidder cannot be awarded block of shares . . ." No reason has
arisen that will prevent the award to Renong Berhad. It qualified as bidder. It complied
with the procedure of bidding. It tendered the highest bid. It was declared as the highest
bidder by the GSIS and the rules say this decision is final. It deserves the award as a
matter of right for the rules clearly did not give to the petitioner as a qualified Filipino
privilege to match the higher bid of a foreigner. What the rules did not grant, petitioner
cannot demand. Our symphaties may be with petitioner but the court has no power to
extend the latitude and longtitude of the right of preference as defined by the rules. The
parameters of the right of preference depend on galaxy of facts and factors whose
determination belongs to the province of the policy-making branches and agencies of
the State. We are duty-bound to respect that determination even if we differ with the
wisdom of their judgment. The right they grant may be little but we must uphold the
grant for as long as the right of preference is not denied. It is only when a State action
amounts to a denial of the right that the Court can come in and strike down the denial as
unconstitutional.

Finally, I submit that petitioner is estopped from assailing the winning bid of Renong
Berhad. Petitioner was aware of the rules and regulations of the bidding. It knew that
the rules and regulations do not provide that a qualified Filipino bidder can match the
winning bid submitting an inferior bid. It knew that the bid was open to foreigners and
that foreigners qualified even during the first bidding. Petitioner cannot be allowed to
repudiate the rules which it agreed to respect. It cannot be allowed to obey the rules
when it wins and disregard them when it loses. If sustained, petitioners' stance will
wreak havoc on he essence of bidding. Our laws, rules and regulations require highest
bidding to raise as much funds as possible for the government to maximize its capacity
to deliver essential services to our people. This is a duty that must be discharged by
Filipinos and foreigners participating in a bidding contest and the rules are carefully
written to attain this objective. Among others, bidders are prequalified to insure their
financial capability. The bidding is secret and the bids are sealed to prevent collusion
among the parties. This objective will be undermined if we grant petitioner that privilege
to know the winning bid and a chance to match it. For plainly, a second chance to bid
will encourage a bidder not to strive to give the highest bid in the first bidding.

We support the Filipino First policy without any reservation. The visionary nationalist
Don Claro M. Recto has warned us that the greatest tragedy that can befall a Filipino is
to be an alien in his own land. The Constitution has embodied Recto's counsel as a
state policy. But while the Filipino First policy requires that we incline to a Filipino, it
does not demand that we wrong an alien. Our policy makers can write laws and rules
giving favored treatment to the Filipino but we are not free to be unfair to a foreigner
after writing the laws and the rules. After the laws are written, they must be obeyed as
written, by Filipinos and foreigners alike. The equal protection clause of the Constitution
protects all against unfairness. We can be pro-Filipino without unfairness to foreigner.
I vote to dismiss the petition.

Narvasa, C.J., and Melo, J., concur.

PANGANIBAN, J., dissenting:

I regret I cannot join the majority. To the incisive Dissenting Opinion of Mr. Justice
Reynato S. Puno, may I just add

1. The majority contends the Constitution should be interpreted to mean that, after a
bidding process is concluded, the losing Filipino bidder should be given the right to
equal the highest foreign bid, and thus to win. However, the Constitution [Sec. 10 (2),
Art. XII] simply states that "in the grant of rights . . . covering the national economy and
patrimony, the State shall give preference to qualified Filipinos." The majority concedes
that there is no law defining the extent or degree of such preference. Specifically, no
statute empowers a losing Filipino bidder to increase his bid and equal that of the
winning foreigner. In the absence of such empowering law, the majority's strained
interpretation, I respectfully submit constitutes unadulterated judicial legislation, which
makes bidding a ridiculous sham where no Filipino can lose and where no foreigner can
win. Only in the Philippines!.

2. Aside from being prohibited by the Constitution, such judicial is short-sighted and,
viewed properly, gravely prejudicial to long-term Filipino interest. It encourages other
countries — in the guise of reverse comity or worse, unabashed retaliation — to
discriminate against us in their own jurisdictions by authorizing their own nationals to
similarly equal and defeat the higher bids of Filipino enterprises solely, while on the
other hand, allowing similar bids of other foreigners to remain unchallenged by their
nationals. The majority's thesis will thus marginalize Filipinos as pariahs in the global
marketplace with absolute no chance of winning any bidding outside our country. Even
authoritarian regimes and hermit kingdoms have long ago found out unfairness, greed
and isolation are self-defeating and in the long-term, self-destructing.

The moral lesson here is simple: Do not do unto other what you dont want other to do
unto you.

3. In the absence of a law specifying the degree or extent of the "Filipino First" policy of
the Constitution, the constitutional preference for the "qualified Filipinos" may be
allowed only where all the bids are equal. In this manner, we put the Filipino ahead
without self-destructing him and without being unfair to the foreigner.

In short, the Constitution mandates a victory for the qualified Filipino only when the
scores are tied. But not when the ballgame is over and the foreigner clearly posted the
highest score.
 

Separate Opinions

PADILLA, J., concurring:

I concur with the ponencia of Mr. Justice Bellosillo. At the same time, I would like to
expound a bit more on the concept of national patrimony as including within its scope
and meaning institutions such as the Manila Hotel.

It is argued by petitioner that the Manila Hotel comes under "national patrimony" over
which qualified Filipinos have the preference, in ownership and operation. The
Constitutional provision on point states:

xxx xxx xxx

In the grant of rights, privileges, and concessions covering the national economy and
patrimony, the State shall Give preference to qualified Filipinos. 1

Petitioner's argument, I believe, is well taken. Under the 1987 Constitution, "national
patrimony" consists of the natural resources provided by Almighty God (Preamble) in
our territory (Article I) consisting of land, sea, and air. 2 study of the 1935 Constitution,
where the concept of "national patrimony" originated, would show that its framers
decided to adopt the even more comprehensive expression "Patrimony of the Nation" in
the belief that the phrase encircles a concept embracing not only their natural resources
of the country but practically everything that belongs to the Filipino people, the tangible
and the material as well as the intangible and the spiritual assets and possessions of
the people. It is to be noted that the framers did not stop with conservation. They knew
that conservation alone does not spell progress; and that this may be achieved only
through development as a correlative factor to assure to the people not only the
exclusive ownership, but also the exclusive benefits of their national patrimony). 3

Moreover, the concept of national patrimony has been viewed as referring not only to
our rich natural resources but also to the cultural heritage of our
race. 4

There is no doubt in my mind that the Manila Hotel is very much a part of our national
patrimony and, as such, deserves constitutional protection as to who shall own it and
benefit from its operation. This institution has played an important role in our nation's
history, having been the venue of many a historical event, and serving as it did, and as
it does, as the Philippine Guest House for visiting foreign heads of state, dignitaries,
celebrities, and others. 5

It is therefore our duty to protect and preserve it for future generations of Filipinos. As
President Manuel L. Quezon once said, we must exploit the natural resources of our
country, but we should do so with. an eye to the welfare of the future generations. In
other words, the leaders of today are the trustees of the patrimony of our race. To
preserve our national patrimony and reserve it for Filipinos was the intent of the
distinguished gentlemen who first framed our Constitution. Thus, in debating the need
for nationalization of our lands and natural resources, one expounded that we should
"put more teeth into our laws, and; not make the nationalization of our lands and natural
resources a subject of ordinary legislation but of constitutional enactment" 6 To quote
further: "Let not our children be mere tenants and trespassers in their own country. Let
us preserve and bequeath to them what is rightfully theirs, free from all foreign liens and
encumbrances". 7

Now, a word on preference. In my view "preference to qualified Filipinos", to be

meaningful, must refer not only to things that are peripheral, collateral, or tangential. It
must touch and affect the very "heart of the existing order." In the field of public bidding
in the acquisition of things that pertain to the national patrimony, preference to qualified
Filipinos must allow a qualified Filipino to match or equal the higher bid of a non-Filipino;
the preference shall not operate only when the bids of the qualified Filipino and the non-
Filipino are equal in which case, the award should undisputedly be made to the qualified
Filipino. The Constitutional preference should give the qualified Filipino an opportunity
to match or equal the higher bid of the non-Filipino bidder if the preference of the
qualified Filipino bidder is to be significant at all.

It is true that in this present age of globalization of attitude towards foreign investments
in our country, stress is on the elimination of barriers to foreign trade and investment in
the country. While government agencies, including the courts should re-condition their
thinking to such a trend, and make it easy and even attractive for foreign investors to
come to our shores, yet we should not preclude ourselves from reserving to us Filipinos
certain areas where our national identity, culture and heritage are involved. In the hotel
industry, for instance, foreign investors have established themselves creditably, such as
in the Shangri-La, the Nikko, the Peninsula, and Mandarin Hotels. This should not stop
us from retaining 51% of the capital stock of the Manila Hotel Corporation in the hands
of Filipinos. This would be in keeping with the intent of the Filipino people to preserve
our national patrimony, including our historical and cultural heritage in the hands of
Filipinos.

VITUG, J., concurring:

I agree with Mr. Justice Josue N. Bellosillo on his clear-cut statements, shared by Mr.
Justice Reynato S. Puno in a well written separate (dissenting) opinion, that:

First, the provision in our fundamental law which provides that "(I)n the grant of rights,
privileges, and concessions covering the national economy and patrimony, the State
shall give preference to qualified Filipinos" 1 is self-executory. The provision verily does
not need, although it can obviously be amplified or regulated by, an enabling law or a
set of rules.
Second, the term "patrimony" does not merely refer to the country's natural resources
but also to its cultural heritage. A "historical landmark," to use the words of Mr. Justice
Justo P. Torres, Jr., Manila Hotel has now indeed become part of Philippine heritage.

Third, the act of the Government Service Insurance System ("GSIS"), a government
entity which derives its authority from the State, in selling 51% of its share in MHC
should be considered an act of the State subject to the Constitutional mandate.

On the pivotal issue of the degree of "preference to qualified Filipinos," I find it

somewhat difficult to take the same path traversed by the forceful reasoning of Justice
Puno. In the particular case before us, the only meaningful preference, it seems, would
really be to allow the qualified Filipino to match the foreign bid for, as a particular matter,
I cannot see any bid that literally calls for millions of dollars to be at par (to the last cent)
with another. The magnitude of the magnitude of the bids is such that it becomes hardly
possible for the competing bids to stand exactly "equal" which alone, under the
dissenting view, could trigger the right of preference.

It is most unfortunate that Renong Berhad has not been spared this great
disappointment, a letdown that it did not deserve, by a simple and timely advise of the
proper rules of bidding along with the peculiar constitutional implications of the
proposed transaction. It is also regrettable that the Court at time is seen, to instead, be
the refuge for bureaucratic inadequate which create the perception that it even takes on
non-justiciable controversies.

All told, I am constrained to vote for granting the petition.

MENDOZA, J., concurring in the judgment:

I take the view that in the context of the present controversy the only way to enforce the
constitutional mandate that "[i]n the grant of rights, privileges and concessions covering
the national patrimony the State shall give preference to qualified Filipinos" 1 is to allow
petitioner Philippine corporation to equal the bid of the Malaysian firm Renong Berhad
for the purchase of the controlling shares of stocks in the Manila Hotel Corporation.
Indeed, it is the only way a qualified Filipino of Philippine corporation can be given
preference in the enjoyment of a right, privilege or concession given by the State, by
favoring it over a foreign national corporation.

Under the rules on public bidding of the Government Service and Insurance System, if
petitioner and the Malaysian firm had offered the same price per share, "priority [would
be given] to the bidder seeking the larger ownership interest in MHC," 2 so that petitioner
bid for more shares, it would be preferred to the Malaysian corporation for that reason
and not because it is a Philippine corporation. Consequently, it is only in cases like the
present one, where an alien corporation is the highest bidder, that preferential treatment
of the Philippine corporation is mandated not by declaring it winner but by allowing it "to
match the highest bid in terms of price per share" before it is awarded the shares of
stocks. 3 That, to me, is what "preference to qualified Filipinos" means in the context of
this case — by favoring Filipinos whenever they are at a disadvantage vis-a-vis
foreigners.

This was the meaning given in Co Chiong v. Cuaderno 4 to a 1947 statute giving
"preference to Filipino citizens in the lease of public market stalls." 5 This Court upheld
the cancellation of existing leases covering market stalls occupied by persons who were
not Filipinos and the award thereafter of the stalls to qualified Filipino vendors as
ordered by the Department of Finance. Similarly, in Vda. de Salgado v. De la Fuente, 6
this Court sustained the validity of a municipal ordinance passed pursuant to the statute
(R.A. No. 37), terminating existing leases of public market stalls and granting preference
to Filipino citizens in the issuance of new licenses for the occupancy of the stalls. In
Chua Lao v. Raymundo, 7 the preference granted under the statute was held to apply to
cases in which Filipino vendors sought the same stalls occupied by alien vendors in the
public markets even if there were available other stalls as good as those occupied by
aliens. "The law, apparently, is applicable whenever there is a conflict of interest
between Filipino applicants and aliens for lease of stalls in public markets, in which
situation the right to preference immediately arises." 8

Our legislation on the matter thus antedated by a quarter of a century efforts began only
in the 1970s in America to realize the promise of equality, through affirmative action and
reverse discrimination programs designed to remedy past discrimination against colored
people in such areas as employment, contracting and licensing. 9 Indeed, in vital areas
of our national economy, there are situations in which the only way to place Filipinos in
control of the national economy as contemplated in the Constitution 10 is to give them
preferential treatment where they can at least stand on equal footing with aliens.

There need be no fear that thus preferring Filipinos would either invite foreign retaliation
or deprive the country of the benefit of foreign capital or know-how. We are dealing here
not with common trades of common means of livelihood which are open to aliens in our
midst, 11 but with the sale of government property, which is like the grant of government
largess of benefits and concessions covering the national economy" and therefore no
one should begrudge us if we give preferential treatment to our citizens. That at any rate
is the command of the Constitution. For the Manila Hotel is a business owned by the
Government. It is being privatized. Privatization should result in the relinquishment of
the business in favor of private individuals and groups who are Filipino citizens, not in
favor of aliens.

Nor should there be any doubt that by awarding the shares of stocks to petitioner we
would be trading competence and capability for nationalism. Both petitioner and the
Malaysian firm are qualified, having hurdled the prequalification process. 12 It is only the
result of the public bidding that is sought to be modified by enabling petitioner to up its
bid to equal the highest bid.

Nor, finally, is there any basis for the suggestion that to allow a Filipino bidder to match
the highest bid of an alien could encourage speculation, since all that a Filipino entity
would then do would be not to make a bid or make only a token one and, after it is
known that a foreign bidder has submitted the highest bid, make an offer matching that
of the foreign firm. This is not possible under the rules on public bidding of the GSIS.
Under these rules there is a minimum bid required (P36.87 per share for a range of 9 to
15 million shares). 13 Bids below the minimum will not be considered. On the other hand,
if the Filipino entity, after passing the prequalification process, does not submit a bid, he
will not be allowed to match the highest bid of the foreign firm because this is a privilege
allowed only to those who have "validly submitted bids." 14 The suggestion is, to say the
least, fanciful and has no basis in fact.

For the foregoing reasons, I vote to grant the petition.

TORRES, JR., J., separate opinion:

Constancy in law is not an attribute of a judicious mind. I say this as we are not
confronted in the case at bar with legal and constitutional issues — and yet I am driven
so to speak on the side of history. The reason perhaps is due to the belief that in the
words of Justice Oliver Wendell Holmes, Jr., a "page of history is worth a volume of
logic."

I will, however, attempt to share my thoughts on whether the Manila Hotel has a
historical and cultural aspect within the meaning of the constitution and thus, forming
part of the "patrimony of the nation".

Section 10, Article XII of the 1987 Constitution provides:

xxx xxx xxx

In the grant of rights, privileges, and concessions covering the national economy and
patrimony, the State shall give preference to qualified Filipinos.

The State shall regulate and exercise authority over foreign investments within its
national goals and priorities.

The foregoing provisions should be read in conjunction with Article II of the same
Constitution pertaining to "Declaration of Principles and State Policies" which ordain —

The State shall develop a self-reliant and independent national economy effectively by
Filipinos. (Sec. 19).

Interestingly, the matter of giving preference to "qualified Filipinos" was one of the
highlights in the 1987 Constitution Commission proceedings thus:

xxx xxx xxx

MR. NOLLEDO. The Amendment will read: "IN THE

GRANT OF RIGHTS, PRIVILEGES AND
CONCESSIONS COVERING THE NATIONAL
ECONOMY AND PATRIMONY, THE STATE SHALL
 GIVE PREFERENCE TO QUALIFIED FILIPINOS". And
the word "Filipinos" here, as intended by the proponents,
will include not only individual Filipinos but also Filipino-
Controlled entities fully controlled by Filipinos (Vol. III,
Records of the Constitutional Commission, p. 608).

MR. MONSOD. We also wanted to add, as

Commissioner Villegas said, this committee and this
body already approved what is known as the Filipino
First policy which was suggested by Commissioner de
Castro. So that it is now in our Constitution (Vol. IV,
Records of the Constitutional Commission, p. 225).

Commissioner Jose Nolledo explaining the provision adverted to above, said:

MR. NOLLEDO. In the grant of rights, privileges and

concessions covering the national economy and
patrimony, the State shall give preference to qualified
Filipinos.

MR. FOZ. In connection with that amendment, if a

foreign enterprise is qualified and the Filipinos enterprise
is also qualified, will the Filipino enterprise still be given
a preference?

MR. NOLLEDO. Obviously.

MR. FOZ. If the foreigner is more qualified in some

aspects than the Filipino enterprise, will the Filipino still
be preferred:?

MR. NOLLEDO. The answer is "yes". (Vol. III, p. 616,

Records of the Constitutional Commission).

The nationalistic provisions of the 1987 Constitution reflect the history and spirit of the
Malolos Constitution of 1898, the 1935 Constitution and the 1973 Constitutions. That we
have no reneged on this nationalist policy is articulated in one of the earliest case, this
Court said —

The nationalistic tendency is manifested in various provisions of the Constitution. . . . It

cannot therefore be said that a law imbued with the same purpose and spirit underlying
many of the provisions of the Constitution is unreasonable, invalid or unconstitutional
(Ichong, et al. vs. Hernandez, et al., 101 Phil. 1155).

I subscribe to the view that history, culture, heritage, and traditions are not legislated
and is the product of events, customs, usages and practices. It is actually a product of
growth and acceptance by the collective mores of a race. It is the spirit and soul of a
people.
The Manila Hotel is part of our history, culture and heritage. Every inch of the Manila
Hotel is witness to historic events (too numerous to mention) which shaped our history
for almost 84 years.

As I intimated earlier, it is not my position in this opinion, to examine the single

instances of the legal largese which have given rise to this controversy. As I believe that
has been exhaustively discussed in the ponencia. Suffice it to say at this point that the
history of the Manila Hotel should not be placed in the auction block of a purely
business transaction, where profits subverts the cherished historical values of our
people.

As a historical landmark in this "Pearl of the Orient Seas", it has its enviable tradition
which, in the words of the philosopher Salvador de Madarriaga tradition is "more of a
river than a stone, it keeps flowing, and one must view the flowing , and one must view
the flow of both directions. If you look towards the hill from which the river flows, you
see tradition in the form of forceful currents that push the river or people towards the
future, and if you look the other way, you progress."

Indeed, tradition and progress are the same, for progress depends on the kind of
tradition. Let us not jettison the tradition of the Manila Hotel and thereby repeat our
colonial history.

I grant, of course the men of the law can see the same subject in different lights.

I remember, however, a Spanish proverb which says — "He is always right who
suspects that he makes mistakes". On this note, I say that if I have to make a mistake, I
would rather err upholding the belief that the Filipino be first under his Constitution and
in his own land.

I vote GRANT the petition.

PUNO, J., dissenting:

This is a. petition for prohibition and mandamus filed by the Manila Prince Hotel
Corporation, a domestic corporation, to stop the Government Service Insurance System
(GSIS) from selling the controlling shares of the Manila Hotel Corporation to a foreign
corporation. Allegedly, the sale violates the second paragraph of section 10, Article XII
of the Constitution.

Respondent GSIS is a government-owned and controlled corporation. It is the sole

owner of the Manila Hotel which it operates through its subsidiary, the Manila Hotel
Corporation. Manila Hotel was included in the privatization program of the government.
In 1995, GSIS proposed to sell to interested buyers 30% to 51% of its shares, ranging
from 9,000,000 to 15,300,000 shares, in the Manila Hotel Corporation. After the
absence of bids at the first public bidding, the block of shares offered for sale was
increased from a maximum of 30% to 51%. Also, the winning bidder, or the eventual
"strategic partner" of the GSIS was required to "provide management expertise and/or
an international marketing/reservation system, and financial support to strengthen the
profitability and performance of the Manila Hotel" 1 The proposal was approved by
respondent Committee on Privatization.

In July 1995, a conference was held where prequalification documents and the bidding
rules were furnished interested parties. Petitioner Manila Prince Hotel, a domestic
corporation, and Renong Berhad, Malaysian firm with ITT Sheraton as operator,
prequalified. 2

The bidding rules and procedures entitled "Guidelines and Procedures: Second
Prequalification and Public Bidding of the MHC Privatization" provide:

I INTRODUCTION AND HIGHLIGHTS

DETERMINING THE WINNING BIDDER/STRATEGIC PARTNER

The party that accomplishes the steps set forth below will be declared the Winning
Bidder/Strategic Partner and will be awarded the Block of Shares:

First — Pass the prequalification process;

Second — Submit the highest bid on a price per share basis for the Block of Shares;

Third — Negotiate and execute the necessary contracts with GSIS/MHC not later than
October 23, 1995;

xxx xxx xxx

IV GUIDELINES FOR PREQUALIFICATION

A. PARTIES WHO MAP APPLY FOR PREQUALIFICATION

The Winning Bidder/Strategic Partner will be expected to provide

management expertise and/or an international marketing reservation
system, and financial support to strengthen the profitability and
performance of The Manila Hotel. In this context, the GSIS is inviting to
the prequalification process any local and/or foreign corporation,
consortium/joint venture or juridical entity with at least one of the
following qualifications:

a. Proven management .expertise in the hotel industry;

or

b. Significant equity ownership (i.e. board

representation) in another hotel company; or
 c. Overall management and marketing expertise to
successfully operate the Manila Hotel.

Parties interested in bidding for MHC should be able to provide access to

the requisite management expertise and/or international
marketing/reservation system for The Manila Hotel.

xxx xxx xxx

D. PREQUALIFICATION DOCUMENTS

xxx xxx xxx

E. APPLICATION PROCEDURE

1. DOCUMENTS AVAILABLE AT THE REGISTRATION OFFICE

The prequalification documents can be secured at the Registration Office

between 9:00 AM to 4:00 PM during working days within the period
specified in Section III. Each set of documents consists of the following:

a. Guidelines and Procedures: Second Prequalification

and Public Bidding of the MHC Privatization

b. Confidential Information Memorandum: The Manila

Hotel Corporation

c. Letter of Invitation. to the Prequalification and Bidding

Conference

xxx xxx xxx

4. PREQUALIFICATION AND BIDDING CONFERENCE

A prequalification and bidding conference will be held at The Manila

Hotel on the date specified in Section III to allow the Applicant to seek
clarifications and further information regarding the guidelines and
procedures. Only those who purchased the prequalification documents
will be allowed in this conference. Attendance to this conference is
strongly advised, although the Applicant will not be penalized if it does
not attend.

5. SUBMISSION OF PREQUALIFICATION DOCUMENTS

The applicant should submit 5 sets of the prequalification documents (1

original set plus 4 copies) at the Registration Office between 9:00 AM to
4:00 PM during working days within the period specified in Section III.

F. PREQUALIFICATION PROCESS
 1. The Applicant will be evaluated by the PBAC with the
assistance of the TEC based on the Information
Package and other information available to the PBAC.

2. If the Applicant is a Consortium/Joint Venture, the

evaluation will consider the overall qualifications of the
group, taking into account the contribution of each
member to the venture.

3. The decision of the PBAC with respect to the results

of the PBAC evaluation will be final.

4. The Applicant shall be evaluated according to the

criteria set forth below:

a. Business management expertise,

track record, and experience

b. Financial capability.

c. Feasibility and acceptability of the

proposed strategic plan for the Manila
Hotel

5. The PBAC will shortlist such number of Applicants as it may deem

appropriate.

6. The parties that prequalified in the first MHC public bidding — ITT
Sheraton, Marriot International Inc., Renaissance Hotels International
Inc., consortium of RCBC Capital/Ritz Carlton — may participate in the
Public Bidding without having to undergo the prequalification process
again.

G. SHORTLIST OF QUALIFIED BIDDERS

1. A notice of prequalification results containing the shortlist of Qualified

Bidders will be posted at the Registration Office at the date specified in
Section III.

2. In the case of a Consortium/Joint Venture, the withdrawal by member

whose qualification was a material consideration for being included in the
shortlist is ground for disqualification of the Applicant.

V. GUIDELINES FOR THE PUBLIC BIDDING

A. PARTIES WHO MAY PARTICIPATE IN THE PUBLIC BIDDING

All parties in the shortlist of Qualified Bidders will be eligible to participate

in the Public Bidding.

B. BLOCK OF SHARES
A range of Nine Million (9,000,000) to Fifteen Million Three Hundred
Thousand (15,300,000) shares of stock representing Thirty Percent to
Fifty-One Percent (30%-51%) of the issued and outstanding shares of
MHC, will be offered in the Public Bidding by the GSIS. The Qualified
Bidders will have the Option of determining the number of shares within
the range to bid for. The range is intended to attract bidders with different
preferences and objectives for the operation and management of The
Manila Hotel.

C. MINIMUM BID REQUIRED ON A PRICE PER SHARE BASIS

1. Bids will be evaluated on a price per share basis. The minimum bid
required on a price per share basis for the Block of Shares is Thirty-Six
Pesos and Sixty-Seven Centavos (P36.67).

2. Bids should be in the Philippine currency payable to the GSIS.

3. Bids submitted with an equivalent price per share below the minimum
required will not considered.

D. TRANSFER COSTS

xxx xxx xxx

E. OFFICIAL BID FORM

1. Bids must be contained in the prescribed Official Bid Form, a copy of

which is attached as Annex IV. The Official Bid Form must be properly
accomplished in all details; improper accomplishment may be a sufficient
basis for disqualification.

2. During the Public Bidding, the Qualified Bidder will submit the Official
Bid Form, which will indicate the offered purchase price, in a sealed
envelope marked "OFFICIAL BID."

F. SUPPORTING DOCUMENTS

During the Public Bidding, the following documents should be submitted

along with the bid in a separate envelop marked "SUPPORTING
DOCUMENTS":

1. WRITTEN AUTHORITY TO BID (UNDER OATH).

If the Qualified Bidder is a corporation, the representative of the Qualified

Bidder should submit a Board resolution which adequately authorizes
such representative to bid for and in behalf of the corporation with full
authority to perform such acts necessary or requisite to bind the Qualified
Bidder.

If the Qualified Bidder is a Consortium/Joint Venture, each member of

the Consortium/Joint venture should submit a Board resolution
authorizing one of its members and such member's representative to
 make the bid on behalf of the group with full authority to perform such
acts necessary or requisite to bind the Qualified Bidder.

2. BID SECURITY

a. The Qualified Bidder should deposit Thirty-Three Million Pesos

(P33,000,00), in Philippine currency as Bid Security in the form of:

i. Manager's check or unconditional demand draft

payable to the "Government Service Insurance System"
and issued by a reputable banking institution duly
licensed to do business in the Philippines and
acceptable to GSIS; or

ii. Standby-by letter of credit issued by a reputable

banking institution acceptable to the GSIS.

b. The GSIS will reject a bid if:

i. The bid does not have Bid Security; or

ii. The Bid Security accompanying the bid is for less than
the required amount.

c. If the Bid Security is in the form of a manager's check or unconditional

demand draft, the interest earned on the Bid Security will be for the
account of GSIS.

d. If the Qualified Bidder becomes the winning Bidder/Strategic Partner,

the Bid Security will be applied as the downpayment on the Qualified
Bidder's offered purchase price.

e. The Bid Security of the Qualified Bidder will be returned immediately

after the Public Bidding if the Qualified Bidder is not declared the Highest
Bidder.

f. The Bid Security will be returned by October 23, 1995 if the Highest
Bidder is unable to negotiate and execute with GSIS/MHC the
Management Contract, International Marketing/Reservation System
Contract or other types of contract specified by the Highest Bidder in its
strategic plan for The Manila Hotel.

g. The Bid Security of the Highest Bidder will be forfeited in favor of GSIS
if the Highest Bidder, after negotiating and executing the Management
Contract, International Marketing/Reservation System Contract specified
by the Highest Bidder or other types of contract in its strategic plan for
The Manila Hotel, fails or refuses to:

i. Execute the Stock Purchase and Sale Agreement with

GSIS not later than October 23, 1995; or

ii. Pay the full amount of the offered purchase price not
later than October 23, 1995; or
 iii. Consummate the sale of the Block of Shares for any
other reason.

G. SUBMISSION OF BIDS

1. The Public Bidding will be held on September 7, 1995 at the following

location:

New GSIS Headquarters Building

Financial Center, Reclamation Area
Roxas Boulevard, Pasay City, Metro Manila.

2. The Secretariat of the PBAC will be stationed at the Public Bidding to

accept any and all bids and supporting requirements. Representatives
from the Commission on Audit and COP will be invited to witness the
proceedings.

3. The Qualified Bidder should submit its bid using the Official Bid Form.
The accomplished Official Bid Form should be submitted in a sealed
envelope marked "OFFICIAL BID."

4. The Qualified Bidder should submit the following documents in

another sealed envelope marked "SUPPORTING BID DOCUMENTS"

a. Written Authority Bid

b. Bid Security

5. The two sealed envelopes marked "OFFICIAL BID" and

"SUPPORTING BID DOCUMENTS" must be submitted simultaneously
to the Secretariat between 9:00 AM and 2:00 PM, Philippine Standard
Time, on the date of the Public Bidding. No bid shall be accepted after
the closing time. Opened or tampered bids shall not be accepted.

6. The Secretariat will log and record the actual time of submission of the
two sealed envelopes. The actual time of submission will also be
indicated by the Secretariat on the face of the two envelopes.

7. After Step No. 6, the two sealed envelopes will be dropped in the
corresponding bid boxes provided for the purpose. These boxes will be in
full view of the invited public.

H. OPENING AND READING OF BIDS

1. After the closing time of 2:00 PM on the date of the Public Bidding, the
PBAC will open all sealed envelopes marked "SUPPORTING BID
DOCUMENTS" for screening, evaluation and acceptance. Those who
submitted incomplete/insufficient documents or document/s which is/are
not substantially in the form required by PBAC will be disqualified. The
envelope containing their Official Bid Form will be immediately returned
to the disqualified bidders.
2. The sealed envelopes marked "OFFICIAL BID" will be opened at 3:00
PM. The name of the bidder and the amount of its bid price will be read
publicly as the envelopes are opened.

3. Immediately following the reading of the bids, the PBAC will formally
announce the highest bid and the Highest Bidder.

4. The highest bid will be, determined on a price per share basis. In the
event of a tie wherein two or more bids have the same equivalent price
per share, priority will be given to the bidder seeking the larger ownership
interest in MHC.

5. The Public Bidding will be declared a failed bidding in case:

a. No single bid is submitted within the prescribed

period; or

b. There is only one (1) bid that is submitted and

acceptable to the PBAC.

I. EXECUTION OF THE NECESSARY CONTRACTS WITH GSIS/MHC

1. The Highest Bidder must comply with the conditions set forth below by
October 23, 1995 or the Highest Bidder will lose the right to purchase the
Block of Shares and GSIS will instead offer the Block of Shares to the
other Qualified Bidders:

a. The Highest Bidder must negotiate and execute with

GSIS/MHC the Management Contract, International
Marketing Reservation System Contract or other type of
contract specified by the Highest Bidder in its strategic
plan for The Manila Hotel. If the Highest Bidder is
intending to provide only financial support to The Manila
Hotel, a separate institution may enter into the
aforementioned contract/s with GSIS/MHC.

b. The Highest Bidder must execute the Stock Purchase

and Sale Agreement with GSIS, a copy of which will be
distributed to each of the Qualified Bidder after the
prequalification process is completed.

2. In the event that the Highest Bidder chooses a Management Contract

for The Manila Hotel, the maximum levels for the management fee
structure that GSIS/MHC are prepared to accept in the Management
Contract are as follows:

a. Basic management fee: Maximum of 2.5% of gross

revenues.(1)

b. Incentive fee: Maximum of 8.0% of gross operating

profit(1) after deducting undistributed overhead
expenses and the basic management fee.
 c. Fixed component of the international
marketing/reservation system fee: Maximum of 2.0% of
gross room revenues.(1) The Applicant should indicate
in its Information Package if it is wishes to charge this
fee.

Note (1): As defined in the uniform system of account for hotels.

The GSIS/MHC have indicated above the acceptable parameters for the
hotel management fees to facilitate the negotiations with the Highest
Bidder for the Management Contract after the Public Bidding.

A Qualified Bidder envisioning a Management Contract for The Manila

Hotel should determine whether or not the management fee structure
above is acceptable before submitting their prequalification documents to
GSIS.

J. BLOCK SALE TO THE OTHER QUALIFIED BIDDERS

1. If for any reason, the Highest Bidder cannot be awarded the Block of
Shares, GSIS may offer this to the other Qualified Bidders that have
validly submitted bids provided that these Qualified are willing to match
the highest bid in terms of price per share.

2. The order of priority among the interested Qualified Bidders will be in

accordance wit the equivalent price per share of their respective bids in
their public Bidding, i.e., first and second priority will be given to the
Qualified Bidders that submitted the second and third highest bids on the
price per share basis, respectively, and so on.

K. DECLARATION OF THE WINNING BIDDER/STRATEGIC PARTNER

The Highest Bidder will be declared the Winning Bidder/Strategic Partner

after the following conditions are met:

a. Execution of the necessary contract with GSIS/MHC

not later than October 23, 1995; and

b. Requisite approvals from the GSIS/MHC and

COP/OGCC are obtained.

I. FULL PAYMENT FOR THE BLOCK OF SHARES

1. Upon execution of the necessary contracts with GSIS/MHC, the

Winning Bidder/Strategic Partner must fully pay, not later than October
23, 1995, the offered purchase price for the Block of Shares after
deducting the Bid Security applied as downpayment.

2. All payments should be made in the form of a Manager's Check or

unconditional Demand Draft, payable to the "Government Service
Insurance System," issued by a reputable banking institution licensed to
do business in the Philippines and acceptable to GSIS.
 M. GENERAL CONDITIONS

1. The GSIS unconditionally reserves the right to reject any or all

applications, waive any formality therein, or accept such application as
maybe considered most advantageous to the GSIS. The GSIS similarly
reserves the right to require the submission of any additional information
from the Applicant as the PBAC may deem necessary.

2. The GSIS further reserves the right to call off the Public Bidding prior
to acceptance of the bids and call for a new public bidding under
amended rules, and without any liability whatsoever to any or all the
Qualified Bidders, except the obligation to return the Bid Security.

3. The GSIS reserves the right to reset the date of the

prequalification/bidding conference, the deadline for the submission of
the prequalification documents, the date of the Public Bidding or other
pertinent activities at least three (3) calendar days prior to the respective
deadlines/target dates.

4. The GSIS sells only whatever rights, interest and participation it has
on the Block of Shares.

5. All documents and materials submitted by the Qualified Bidders,

except the Bid Security, may be returned upon request.

6. The decision of the PBAC/GSIS on the results of the Public Bidding is

final. The Qualified Bidders, by participating in the Public Bidding, are
deemed to have agreed to accept and abide by these results.

7. The GSIS will be held free and harmless form any liability, suit or
allegation arising out of the Public Bidding by the Qualified Bidders who
have participated in the Public Bidding. 3

The second public bidding was held on September 18, 1995. Petitioner bidded P41.00
per share for 15,300,000 shares and Renong Berhad bidded P44.00 per share also for
15,300,000 shares. The GSIS declared Renong Berhad the highest bidder and
immediately returned petitioner's bid security.

On September 28, 1995, ten days after the bidding, petitioner wrote to GSIS offering to
match the bid price of Renong Berhad. It requested that the award be made to itself
citing the second paragraph of Section 10, Article XII of the Constitution. It sent a
manager's check for thirty-three million pesos (P33,000,000.00) as bid security.

Respondent GSIS, then in the process of negotiating with Renong Berhad the terms
and conditions of the contract and technical agreements in the operation of the hotel,
refused to entertain petitioner's request.

Hence, petitioner filed the present petition. We issued a temporary restraining order on
October 18, 1995.
Petitioner anchors its plea on the second paragraph of Article XII, Section 10 of the
Constitution 4 on the "National Economy and Patrimony" which provides:

xxx xxx xxx

In the grant of rights, privileges, and concessions covering the national economy and
patrimony, the State shall give preference to qualified Filipinos.

xxx xxx xxx

The vital issues can be summed up as follows:

(1) Whether section 10, paragraph 2 of Article XII of the Constitution is a self-executing
provision and does not need implementing legislation to carry it into effect;

(2) Assuming section 10 paragraph 2 of Article XII is self-executing whether the

controlling shares of the Manila Hotel Corporation form part of our patrimony as a nation;

(3) Whether GSIS is included in the term "State," hence, mandated to implement section
10, paragraph 2 of Article XII of the Constitution;

(4) Assuming GSIS is part of the State, whether it failed to give preference to petitioner, a
qualified Filipino corporation, over and above Renong Berhad, a foreign corporation, in
the sale of the controlling shares of the Manila Hotel Corporation;

(5) Whether petitioner is estopped from questioning the sale of the shares to Renong
Berhad, a foreign corporation.

Anent the first issue, it is now familiar learning that a Constitution provides the guiding
policies and principles upon which is built the substantial foundation and general
framework of the law and government. 5 As a rule, its provisions are deemed self-
executing and can be enforced without further legislative action. 6 Some of its provisions,
however, can be implemented only through appropriate laws enacted by the
Legislature, hence not self-executing.

To determine whether a particular provision of a Constitution is self-executing is a hard

row to hoe. The key lies on the intent of the framers of the fundamental law oftentimes
submerged in its language. A searching inquiry should be made to find out if the
provision is intended as a present enactment, complete in itself as a definitive law, or if
it needs future legislation for completion and enforcement. 7 The inquiry demands a
micro-analysis of the text and the context of the provision in question. 8

Courts as a rule consider the provisions of the Constitution as self-executing, 9 rather

than as requiring future legislation for their enforcement. 10 The reason is not difficult to
discern. For if they are not treated as self-executing, the mandate of the fundamental
law ratified by the sovereign people can be easily ignored and nullified by Congress. 11
Suffused with wisdom of the ages is the unyielding rule that legislative actions may give
breath to constitutional rights but congressional in action should not suffocate them. 12
Thus, we have treated as self-executing the provisions in the Bill of Rights on arrests,
searches and seizures, 13 the rights of a person under custodial investigation, 14 the
rights of an accused, 15 and the privilege against self-incrimination, 16 It is recognize a
that legislation is unnecessary to enable courts to effectuate constitutional provisions
guaranteeing the fundamental rights of life, liberty and the protection of property. 17 The
same treatment is accorded to constitutional provisions forbidding the taking or
damaging of property for public use without just compensation. 18

Contrariwise, case law lays down the rule that a constitutional provision is not self-
executing where it merely announces a policy and its language empowers the
Legislature to prescribe the means by which the policy shall be carried into effect. 19
Accordingly, we have held that the provisions in Article II of our Constitution entitled
"Declaration of Principles and State Policies" should generally be construed as mere
statements of principles of the State. 20 We have also ruled that some provisions of
Article XIII on "Social Justice and Human Rights," 21 and Article XIV on "Education
Science and Technology, Arts, Culture end Sports" 22 cannot be the basis of judicially
enforceable rights. Their enforcement is addressed to the discretion of Congress though
they provide the framework for legislation 23 to effectuate their policy content. 24

Guided by this map of settled jurisprudence, we now consider whether Section 10,
Article XII of the 1987 Constitution is self-executing or not. It reads:

Sec. 10. The Congress shall, upon recommendation of the economic and planning
agency, when the national interest dictates, reserve to citizens of the Philippines or to
corporations or associations at least sixty per centum of whose capital is owned by such
citizens, or such higher percentage as Congress may prescribe, certain areas of
investments. The Congress shall enact measures that will encourage the formation and
operation of enterprises whose capital is wholly owned by Filipinos.

In the grant of rights, privileges, and concessions covering the national economy and
patrimony, the State shall give preference to qualified Filipinos.

The State shall regulate and exercise authority over foreign investments within its
national jurisdiction and in accordance with its national goals and priorities.

The first paragraph directs Congress to reserve certain areas of investments in

the country 25 to Filipino citizens or to corporations sixty per
cent 26 of whose capital stock is owned by Filipinos. It further commands
Congress to enact laws that will encourage the formation and operation of one
hundred percent Filipino-owned enterprises. In checkered contrast, the second
paragraph orders the entire State to give preference to qualified Filipinos in the
grant of rights and privileges covering the national economy and patrimony. The
third paragraph also directs the State to regulate foreign investments in line with
our national goals and well-set priorities.

The first paragraph of Section 10 is not self-executing. By its express text, there
is a categorical command for Congress to enact laws restricting foreign
ownership in certain areas of investments in the country and to encourage the
 formation and operation of wholly-owned Filipino enterprises. The right granted
by the provision is clearly still in esse. Congress has to breathe life to the right by
means of legislation. Parenthetically, this paragraph was plucked from section 3,
Article XIV of the 1973 Constitution. 27 The provision in the 1973 Constitution
affirmed our ruling in the landmark case of Lao Ichong v. Hernandez, 28 where we
upheld the discretionary authority of Congress to Filipinize certain areas of
investments. 29 By reenacting the 1973 provision, the first paragraph of section 10
affirmed the power of Congress to nationalize certain areas of investments in
favor of Filipinos.

The second and third paragraphs of Section 10 are different. They are directed to the
State and not to Congress alone which is but one of the three great branches of our
government. Their coverage is also broader for they cover "the national economy and
patrimony" and "foreign investments within [the] national jurisdiction" and not merely
"certain areas of investments." Beyond debate, they cannot be read as granting
Congress the exclusive power to implement by law the policy of giving preference to
qualified Filipinos in the conferral of rights and privileges covering our national economy
and patrimony. Their language does not suggest that any of the State agency or
instrumentality has the privilege to hedge or to refuse its implementation for any reason
whatsoever. Their duty to implement is unconditional and it is now. The second and the
third paragraphs of Section 10, Article XII are thus self-executing.

This submission is strengthened by Article II of the Constitution entitled "Declaration of

Principles and State Policies." Its Section 19 provides that "[T]he State shall develop a
self-reliant and independent national economy effectively controlled by Filipinos." It
engrafts the all-important Filipino First policy in our fundamental law and by the use of
the mandatory word "shall," directs its enforcement by the whole State without any
pause or a half- pause in time.

The second issue is whether the sale of a majority of the stocks of the Manila Hotel
Corporation involves the disposition of part of our national patrimony. The records of the
Constitutional Commission show that the Commissioners entertained the same view as
to its meaning. According to Commissioner Nolledo, "patrimony" refers not only to our
rich natural resources but also to the cultural heritage of our race. 30 By this yardstick,
the sale of Manila Hotel falls within the coverage of the constitutional provision giving
preferential treatment to qualified Filipinos in the grant of rights involving our national
patrimony. The unique value of the Manila Hotel to our history and culture cannot be
viewed with a myopic eye. The value of the hotel goes beyond pesos and centavos. As
chronicled by Beth Day Romulo, 31 the hotel first opened on July 4, 1912 as a first-class
hotel built by the American Insular Government for Americans living in, or passing
through, Manila while traveling to the Orient. Indigenous materials and Filipino
craftsmanship were utilized in its construction, For sometime, it was exclusively used by
American and Caucasian travelers and served as the "official guesthouse" of the
American Insular Government for visiting foreign dignitaries. Filipinos began coming to
the Hotel as guests during the Commonwealth period. When the Japanese occupied
Manila, it served as military headquarters and lodging for the highest-ranking officers
from Tokyo. It was at the Hotel and the Intramuros that the Japanese made their last
stand during the Liberation of Manila. After the war, the Hotel again served foreign
guests and Filipinos alike. Presidents and kings, premiers and potentates, as well as
glamorous international film and sports celebrities were housed in the Hotel. It was also
the situs of international conventions and conferences. In the local scene, it was the
venue of historic meetings, parties and conventions of political parties. The Hotel has
reaped and continues reaping numerous recognitions and awards from international
hotel and travel award-giving bodies, a fitting acknowledgment of Filipino talent and
ingenuity. These are judicially cognizable facts which cannot be bent by a biased mind.

The Hotel may not, as yet, have been declared a national cultural treasure pursuant to
Republic Act No. 4846 but that does not exclude it from our national patrimony.
Republic Act No. 4846, "The Cultural Properties Preservation and Protection Act,"
merely provides a procedure whereby a particular cultural property may be classified a
"national cultural treasure" or an "important cultural property. 32 Approved on June 18,
1966 and amended by P.D. 374 in 1974, the law is limited in its reach and cannot be
read as the exclusive law implementing section 10, Article XII of the 1987 Constitution.
To be sure, the law does not equate cultural treasure and cultural property as
synonymous to the phrase "patrimony of the nation."

The third issue is whether the constitutional command to the State includes the
respondent GSIS. A look at its charter will reveal that GSIS is a government-owned and
controlled corporation that administers funds that come from the monthly contributions
of government employees and the government. 33 The funds are held in trust for a
distinct purpose which cannot be disposed of indifferently. 34 They are to be used to
finance the retirement, disability and life insurance benefits of the employees and the
administrative and operational expenses of the GSIS, 35 Excess funds, however, are
allowed to be invested in business and other ventures for the benefit of the employees.
36
It is thus contended that the GSIS investment in the Manila Hotel Corporation is a
simple business venture, hence, an act beyond the contemplation of section 10,
paragraph 2 of Article XII of the Constitution.

The submission is unimpressive. The GSIS is not a pure private corporation. It is

essentially a public corporation created by Congress and granted an original charter to
serve a public purpose. It is subject to the jurisdictions of the Civil Service Commission
37
and the Commission on Audit. 38 As state-owned and controlled corporation, it is skin-
bound to adhere to the policies spelled out in the general welfare of the people. One of
these policies is the Filipino First policy which the people elevated as a constitutional
command.

The fourth issue demands that we look at the content of phrase "qualified Filipinos" and
their "preferential right." The Constitution desisted from defining their contents. This is
as it ought to be for a Constitution only lays down flexible policies and principles which
can bent to meet today's manifest needs and tomorrow's unmanifested demands. Only
a constitution strung with elasticity can grow as a living constitution.
Thus, during the deliberations in the Constitutional Commission, Commissioner Nolledo
to define the phrase brushed aside a suggestion to define the phrase "qualified
Filipinos." He explained that present and prospective "laws" will take care of the
problem of its interpretation, viz:

xxx xxx xxx

THE PRESIDENT. What is the suggestion of

Commissioner Rodrigo? Is it to remove the word
"QUALIFIED?"

MR. RODRIGO. No, no, but say definitely "TO

QUALIFIED FILIPINOS" as against whom? As against
aliens over aliens?

MR. NOLLEDO. Madam President, I think that is

understood. We use the word "QUALIFIED" because the
existing laws or the prospective laws will always lay
down conditions under which business map be done, for
example, qualifications on capital, qualifications on the
setting up of other financial structures, et cetera.

MR. RODRIGO. It is just a matter of style.

MR. NOLLEDO Yes.

MR. RODRIGO. If we say, "PREFERENCE TO

QUALIFIED FILIPINOS," it can be understood as giving
preference to qualified Filipinos as against Filipinos who
are not qualified.

MR. NOLLEDO. Madam President, that was the

intention of the proponents. The committee has
accepted the amendment.

xxx xxx xxx

As previously discussed, the constitutional command to enforce the Filipino First

policy is addressed to the State and not to Congress alone. Hence, the word
"laws" should not be understood as limited to legislations but all state actions
which include applicable rules and regulations adopted by agencies and
instrumentalities of the State in the exercise of their rule-making power. In the
case at bar, the bidding rules and regulations set forth the standards to measure
the qualifications of bidders Filipinos and foreigners alike. It is not seriously
disputed that petitioner qualified to bid as did Renong Berhad. 39

Thus, we come to the critical issue of the degree of preference which GSIS should have
accorded petitioner, a qualified Filipino, over Renong Berhad, a foreigner, in the
purchase of the controlling shares of the Manila Hotel. Petitioner claims that after losing
the bid, this right of preference gives it a second chance to match the highest bid of
Renong Berhad.

With due respect, I cannot sustain petitioner's submission. I prescind from the premise
that the second paragraph of section 10, Article XII of the Constitution is pro-Pilipino but
not anti-alien. It is pro-Filipino for it gives preference to Filipinos. It is not, however, anti-
alien per se for it does not absolutely bar aliens in the grant of rights, privileges and
concessions covering the national economy and patrimony. Indeed, in the absence of
qualified Filipinos, the State is not prohibited from granting these rights, privileges and
concessions to foreigners if the act will promote the weal of the nation.

In implementing the policy articulated in section 10, Article XII of the Constitution, the
stellar task of our State policy-makers is to maintain a creative tension between two
desiderata — first, the need to develop our economy and patrimony with the help of
foreigners if necessary, and, second, the need to keep our economy controlled by
Filipinos. Rightfully, the framers of the Constitution did not define the degree of the right
of preference to be given to qualified Filipinos. They knew that for the right to serve the
general welfare, it must have a malleable content that can be adjusted by our policy-
makers to meet the changing needs of our people. In fine, the right of preference of
qualified Filipinos is to be determined by degree as time dictates and circumstances
warrant. The lesser the need for alien assistance, the greater the degree of the right of
preference can be given to Filipinos and vice verse.

Again, it should be stressed that the right and the duty to determine the degree of this
privilege at any given time is addressed to the entire State. While under our
constitutional scheme, the right primarily belongs to Congress as the lawmaking
department of our government, other branches of government, and all their agencies
and instrumentalities, share the power to enforce this state policy. Within the limits of
their authority, they can act or promulgate rules and regulations defining the degree of
this right of preference in cases where they have to make grants involving the national
economy and judicial duty. On the other hand, our duty is to strike down acts of the
state that violate the policy.

To date, Congress has not enacted a law defining the degree of the preferential right.
Consequently, we must turn to the rules and regulations of on respondents Committee
Privatization and GSIS to determine the degree of preference that petitioner is entitled
to as a qualified Filipino in the subject sale. A tearless look at the rules and regulations
will show that they are silent on the degree of preferential right to be accorded qualified
Filipino bidder. Despite their silence, however, they cannot be read to mean that they do
not grant any degree of preference to petitioner for paragraph 2, section 10, Article XII
of the Constitution is deemed part of said rules and regulations. Pursuant to legal
hermeneutics which demand that we interpret rules to save them from
unconstitutionality, I submit that the right of preference of petitioner arises only if it tied
the bid of Benong Berhad. In that instance, all things stand equal, and bidder, as a
qualified Pilipino bidder, should be preferred.
It is with deep regret that I cannot subscribe to the view that petitioner has a right to
match the bid of Renong Berhad. Petitioner's submission must be supported by the
rules but even if we examine the rules inside-out .thousand times, they can not justify
the claimed right. Under the rules, the right to match the highest bid arises only "if for
any reason, the highest bidder cannot be awarded block of shares . . ." No reason has
arisen that will prevent the award to Renong Berhad. It qualified as bidder. It complied
with the procedure of bidding. It tendered the highest bid. It was declared as the highest
bidder by the GSIS and the rules say this decision is final. It deserves the award as a
matter of right for the rules clearly did not give to the petitioner as a qualified Filipino
privilege to match the higher bid of a foreigner. What the rules did not grant, petitioner
cannot demand. Our symphaties may be with petitioner but the court has no power to
extend the latitude and longtitude of the right of preference as defined by the rules. The
parameters of the right of preference depend on galaxy of facts and factors whose
determination belongs to the province of the policy-making branches and agencies of
the State. We are duty-bound to respect that determination even if we differ with the
wisdom of their judgment. The right they grant may be little but we must uphold the
grant for as long as the right of preference is not denied. It is only when a State action
amounts to a denial of the right that the Court can come in and strike down the denial as
unconstitutional.

Finally, I submit that petitioner is estopped from assailing the winning bid of Renong
Berhad. Petitioner was aware of the rules and regulations of the bidding. It knew that
the rules and regulations do not provide that a qualified Filipino bidder can match the
winning bid submitting an inferior bid. It knew that the bid was open to foreigners and
that foreigners qualified even during the first bidding. Petitioner cannot be allowed to
repudiate the rules which it agreed to respect. It cannot be allowed to obey the rules
when it wins and disregard them when it loses. If sustained, petitioners' stance will
wreak havoc on he essence of bidding. Our laws, rules and regulations require highest
bidding to raise as much funds as possible for the government to maximize its capacity
to deliver essential services to our people. This is a duty that must be discharged by
Filipinos and foreigners participating in a bidding contest and the rules are carefully
written to attain this objective. Among others, bidders are prequalified to insure their
financial capability. The bidding is secret and the bids are sealed to prevent collusion
among the parties. This objective will be undermined if we grant petitioner that privilege
to know the winning bid and a chance to match it. For plainly, a second chance to bid
will encourage a bidder not to strive to give the highest bid in the first bidding.

We support the Filipino First policy without any reservation. The visionary nationalist
Don Claro M. Recto has warned us that the greatest tragedy that can befall a Filipino is
to be an alien in his own land. The Constitution has embodied Recto's counsel as a
state policy. But while the Filipino First policy requires that we incline to a Filipino, it
does not demand that we wrong an alien. Our policy makers can write laws and rules
giving favored treatment to the Filipino but we are not free to be unfair to a foreigner
after writing the laws and the rules. After the laws are written, they must be obeyed as
written, by Filipinos and foreigners alike. The equal protection clause of the Constitution
protects all against unfairness. We can be pro-Filipino without unfairness to foreigner.
I vote to dismiss the petition.

Narvasa, C.J., and Melo, J., concur.

PANGANIBAN, J., dissenting:

I regret I cannot join the majority. To the incisive Dissenting Opinion of Mr. Justice
Reynato S. Puno, may I just add

1. The majority contends the Constitution should be interpreted to mean that, after a
bidding process is concluded, the losing Filipino bidder should be given the right to
equal the highest foreign bid, and thus to win. However, the Constitution [Sec. 10 (2),
Art. XII] simply states that "in the grant of rights . . . covering the national economy and
patrimony, the State shall give preference to qualified Filipinos." The majority concedes
that there is no law defining the extent or degree of such preference. Specifically, no
statute empowers a losing Filipino bidder to increase his bid and equal that of the
winning foreigner. In the absence of such empowering law, the majority's strained
interpretation, I respectfully submit constitutes unadulterated judicial legislation, which
makes bidding a ridiculous sham where no Filipino can lose and where no foreigner can
win. Only in the Philippines!.

2. Aside from being prohibited by the Constitution, such judicial is short-sighted and,
viewed properly, gravely prejudicial to long-term Filipino interest. It encourages other
countries — in the guise of reverse comity or worse, unabashed retaliation — to
discriminate against us in their own jurisdictions by authorizing their own nationals to
similarly equal and defeat the higher bids of Filipino enterprises solely, while on the
other hand, allowing similar bids of other foreigners to remain unchallenged by their
nationals. The majority's thesis will thus marginalize Filipinos as pariahs in the global
marketplace with absolute no chance of winning any bidding outside our country. Even
authoritarian regimes and hermit kingdoms have long ago found out unfairness, greed
and isolation are self-defeating and in the long-term, self-destructing.

The moral lesson here is simple: Do not do unto other what you dont want other to do
unto you.

3. In the absence of a law specifying the degree or extent of the "Filipino First" policy of
the Constitution, the constitutional preference for the "qualified Filipinos" may be
allowed only where all the bids are equal. In this manner, we put the Filipino ahead
without self-destructing him and without being unfair to the foreigner.
In short, the Constitution mandates a victory for the qualified Filipino only when the
scores are tied. But not when the ballgame is over and the foreigner clearly posted the
highest score.

Footnotes

1 See Sec. 10, par. 2, Art. XII, 1987 Constitution

2 Par I. Introduction and Highlights; Guidelines and Procedures: Second

Prequailifications and Public Bidding of the MHC Privatization; Annex "A," Consolidated
Reply to Comments of Respondents; Rollo, p. 142.

3 Par. V. Guidelines for the Public Bidding, id., pp. 153-154.

4 Annex "A," Petition for Prohibition and Mandamus with Temporary Restraining Order;
Rollo, pp. 13-14.

5 Annex "B," Petition for Prohibition and Mandamus with Temporary Restraining Order;
id., p. 15.

6 Petition for Prohibition and Mandamus with Temporary Restraining Order, pp. 5-6; id.,
pp. 6-7.

7 Consolidated Reply to Comments of Respondents, p. 17; id., p. 133.

8 Par. V.J. 1, Guidelines for Public Bidding, Guidelines and Procedures: second
Prequalifications and Public Bidding of the MHC Privatization, Annex "A," Consolidated
Reply to Comments of Respondents; id., p. 154.

9 Respondents' Joint Comment with Urgent Motion to Lift Temporary Restraining Order,
p. 9; Rollo, p. 44.

10 Marbury v. Madison, 5, U.S. 138 (1803).

11 Am Jur. 606.

12 16 Am Jur. 2d 281.

13 Id., p. 282.

14 See Note 12.

15 Cruz, Isagani A., Constitutional Law, 1993 ed., pp. 8-10.

16 Record of the Constitutional Commission, Vol. 3, 22 August 1986, p. 608.

17 16 Am Jur 2d 283-284.

18 Sec. 10, first par., reads: The Congress shall, upon recommendation of the economic
and planning agency, when the national interest dictates, reserve to citizens of the
Philippines or to corporations or associations at least sixty per centum of whose capital is
owned by such citizens, or such higher percentage as Congress may prescribe, certain
areas of investments. The Congress shall enact measures that will encourage the
formation and operation of enterprises whose capital is wholly owned by Filipinos.

Sec. 10, third par., reads: The State shall regulate and exercise authority over foreign
investments within its national jurisdiction and in accordance with its national goals and
priorities.

19 State ex rel. Miller v. O'Malley, 342 Mo. 641, 117 SW2d 319.

20 G.R. No. 91649, 14 May 1991, 197 SCRA 52.

21 Sec. 11, Art. II (Declaration of Principles and State Policies), provides that [t]he State
values the dignity of every human person and guarantees full respect for human rights.

22 Sec. 12, Art. II, provides that [t]he State recognizes the sanctity of family life and shall
protect and strengthen the family as a basic autonomous social institution. It shall equally
protect the life of the mother and the life of the unborn from conception. The natural and
primary right and duty of parents in the rearing of the youth for civic efficiency and the
development of moral character shall receive the support of the government.

23 Sec. 13, Art. II, provides that [t]he State recognizes the vital role of the youth in nation-
building and shall promote and protect their physical, moral, spiritual, intellectual, and
social well-being. It shall inculcate in the youth patriotism and nationalism, and encourage
their involvement in public and civic affairs.

24 Sec. 1, Art. XIII (Social Justice and Human Rights), provides that [t]he Congress shall
give highest priority to the enactment of measures that protect and enhance the right of
all the people to human dignity, reduce social, economic and political inequalities, and
remove cultural inequities by equitably diffusing wealth and political power for the
common good.

To this end, the State shall regulate the acquisition, ownership, use, and disposition of
property and its increments.

Sec. 2, Art. XIII, provides that [t]he promotion of social justice shall include the
commitment to create economic opportunities based on freedom of initiative and self-
reliance.

25 Sec. 2, Art. XIV (Education, Science and Technology, Arts, Culture, and Sports),
provides that [t]he State shall:

(1) Establish, maintain, and support a complete, adequate, and integrated system of
education relevant to the needs of the people and society;

(2) Establish and maintain a system of free public education in the elementary and high
school levels. Without limiting the natural right of parents to rear their children,
elementary education is compulsory for all children of school age;

(3) Establish and maintain a system of scholarship grants, student loan programs,
subsidies, and other incentives which shall be available to deserving students in both
public and private schools, especially to the underprivileged.
(4) Encourage non-formal, informal, and indegenous learning, independent, and out-of-
school study programs particularly those that respond to community needs; and

(5) Provide adult citizens, the disabled, and out-of-school youth with training in civics,
vocational efficiency, and other skills.

26 G.R. 115455, 25 August 1994, 235 SCRA 630.

27 See Note 25.

28 Sec. 1 Art. XIV, provides that [t]he State shall protect and promote the right of all
citizens to quality education at all levels of education and shall take appropriate steps to
make such education accessible to all.

29 G.R. No. 118910, 17 July 1995.

30 Sec. 5 Art. II (Declaration of Principles and State Policies), provides that [t]he
maintenance of peace and order, the protection of life, liberty, and property, and the
promotion of the general welfare are essential for the enjoyment by all the people of the
blessings of democracy.

31 See Note 23.

32 See Note 24.

33 Sec. 17, Art II, provides that [t]he State shall give priority to education, science and
technology, arts, culture, and sports to foster patriotism and nationalism, accelerate
social progress, and promote total human liberation and development.

34 Nolledo, Jose N., The New Constitution of the Philippines Annotated, 1990 ed., p. 72.

35 Webster's Third New International Dictionary, 1986 ed., p. 1656.

36 The guest list of the Manila Hotel includes Gen. Douglas MacArthur, the Duke of
Windsor, President Richard Nixon of U.S.A., Emperor Akihito of Japan, President Dwight
Eisenhower of U.S.A, President Nguyen Van Thieu of Vietnam, President Park Chung
Hee of Korea, Prime Minister Richard Holt of Australia, Prime Minister Keith Holyoake of
New Zealand, President Lyndon Johnson of U.S.A., President Jose Lopez Portillo of
Mexico, Princess Margaret of England, Prime Minister Malcolm Fraser of Australia, Prime
Minister Yasuhiro Nakasone of Japan, Prime Minister Pierre Elliot Trudeau of Canada,
President Raul Alfonsin of Argentina, President Felipe Gonzalez of Spain, Prime Minister
Noboru Takeshita of Japan, Prime Minister Hussain Muhammad Ershad of Bangladesh,
Prime Minister Bob Hawke of Australia, Prime Minister Yasuhiro Nakasone of Japan,
Premier Li Peng of China, Sultan Hassanal Bolkiah of Brunei, President Ramaswani
Venkataraman of India, Prime Minister Go Chok Tong of Singapore, Prime Minister
Enrique Silva Cimma of Chile, Princess Chulaborn and Mahacharri Sirindhorn of
Thailand, Prime Minister Tomiichi Murayama of Japan, Sultan Azlan Shah and Raja
Permaisuri Agong of Malaysia, President Kim President Young Sam of Korea, Princess
Infanta Elena of Spain, President William Clinton of U.S.A., Prime Minister Mahathir
Mohamad of Malaysia, King Juan Carlos I and Queen Sofia of Spain, President Carlos
Saul Menem of Argentina, Prime Ministers Chatichai Choonvan and Prem Tinsulanonda
of Thailand, Prime Minister Benazir Bhutto of Pakistan, President Vaclav Havel of Czech
Republic, Gen. Norman Schwarzcopf of U.S.A, President Ernesto Perez Balladares of
Panama, Prime Minister Adolfas Slezevicius of Lithuania, President Akbar Hashemi
Rafsanjani of Iran, President Frei Ruiz Tagle of Chile, President Le Duc Anh of Vietnam,
and Prime Minister Julius Chan of Papua New Guinea, see Memorandum for Petitioner,
pp. 16-19.

37 Authored by Beth Day Romulo.

38 See Note 9, pp. 15-16; Rollo, pp. 50-51.

39 Record of the Constitutional Commission. Vol. 3, 22 August 1986. p. 607.

40 Id., p. 612.

41 Id., p. 616.

42 Id., p. 606.

43 Nolledo, J.N., The New Constitution of the Philippines Annotated, 1990 ed., pp. 930-
931.

44 Bidders were required to have at least one of the these qualifications to be able to
participate in the bidding process; see Note 2.

45 Memorandum of Fr. Joaquin G. Bernas, S.J., p. 6.

46 Id., pp. 3-4.

47 See Note 8.

48 Keynote Address at the ASEAN Regional Symposium of Enforcement of Industrial

Property Rights held 23 October 1995 at New World Hotel, Makati City.

49 Speech of Senior Associate Justice Teodoro R. Padilla at the Induction of Officers and
Directors of the PHILCONSA for 1996 held 16 January 1996 at the Sky-Top, Hotel
Intercontinental, Makati City.

50 Memorandum of Authorities submitted by former Chief Justice Enrique M. Fernando,

p. 5.

51 8 March 1996 issue of Philippine Daily Inquirer, p. B13.

PADILLA, J., concurring:

1 Article XII, Section 10, par. 2, 1987 Constitution.

2 Padilla, The 1987 Constitution of the Republic of the Philippines, Volume III, p. 89.

3 Sinco, Philippine Political Law, 11th ed, p. 112.

4 Nolledo, The New Constitution of the Philippines, Announced, 1990 ed., p. 72.
5 Memorandum for Petitioner, p. 1.

6 Laurel, Proceedings of the Philippine Constitutional Convention (1934-1935), p. 507.

7 Id., p. 562.

VITUG, J., concurring:

1 Second par. Section 10, Art. XII, 1987 Constitution.

MENDOZA, J., concurring:

1 Art. XII, §10, second paragraph.

2 GUIDELINES AND PROCEDURES: SECOND PREQUALIFICATION AND PUBLIC

BIDDING OF THE MHC PRIVATIZATION (hereafter referred to as GUIDELINES), Part.
V, par. H(4)..

3 Id.

4 83 Phil. 242 (1949).

5 R.A. No. 37, §1.

6 87 Phil. 343 (1950).

7 104 Phil. 302 (1958).

8 Id, at 309.

9 For an excellent analysis of American cases on reverse discrimination in these areas,

see GERALD GUNTHER, CONSTITUTIONAL LAW 780-819 (1991).

10 Art. II, §19: "The State shall develop a self-reliant and independent national economy
effectively controlled by Filipinos." (Emphasis added)

11 See Villegas v. Hiu Chiung Tsai Pao Ho, 86 SCRA 270 (1978) (invalidating an
ordinance imposing a flat fee of P500 on aliens for the privilege of earning a livelihood).

12 Petitioner passed the criteria set forth in the GUIDELINES, Part IV, par. F(4), of the
GSIS, relating to the following:

a. Business management expertise, tract record, and experience

b. Financial capability

c. Feasibility and acceptability of the proposed strategic plan for the

Manila Hotel.

13 GUIDELINES, Part V, par. (1)(3), in relation to Part. I.

14 Id., Part V, par. V (1).

PUNO, J., dissenting:

1 Introduction and Highlights, Guidelines and Procedures: Second Prequalification and

Public Bidding of the MHC Privatization, Annex "A" to Petitioner's Consolidated Reply to
Comments of Respondents, Rollo, p. 142.

2 The four bidders who previously prequalified for the first bidding, namely, ITT Sheraton,
Marriot International, Inc., Renaissance Hotel International, Inc., and the consortium of
RCBC and the Ritz Carlton, were deemed prequalified for the second bidding.

3 Annex "A" to the Consolidated Reply to Comments of Respondents, Rollo, pp. 140-155.

4 Former Chief Justice Enrique Fernando and Commissioner Joaquin Bernas were
invited by the Court as amicus curiae to shed light on its meaning.

5 Lopez v. de los Reyes, 55 Phil. 170, 190 [1930].

6 16 Am Jur 2d, Constitutional Law, Sec. 139 p. 510 [1979 ed. ]; 6 R.C.L. Sec. 52 p. 57
[1915]; see also Willis v. St. Paul Sanitation Co. 48 Minn. 140, 50 N.W. 1110, 31 A.J.R.
626, 16 L.R.A. 281 [1892]; State ex rel. Schneider v. Kennedy, 587 P. 2d 844, 225 Kan
[1978].

7 Willis v. St. Paul Sanitation, supra, at 1110-1111; see also Cooley, A Treatise on
Constitutional Limitations 167, vol. 1 [1927].

8 16 C.J.S., Constitutional Law, Sec. 48, p. 100.

9 Cooley, supra, at 171; 6 R.C.L. Sec. 53, pp. 57-58; Brice v. McDow, 116 S.C. 324, 108
S.E. 84, 87 [1921]; see also Gonzales, Philippine Constitutional Law p. 26 [1969].

10 16 C.J.S., Constitutional Law, Sec. 48, p. 101.

11 Way v. Barney, 116 Minn. 285, 133 N.W. 801, 804 38 L.R.A. (N.S.) 648, Ann. Cas.
1913 A, 719 [1911]; Brice v. McDow, supra, at 87; Morgan v. Board of Supervisors, 67
Ariz. 133, 192 P. 2d 236, 241 [1948]; Gonzales, supra..

12 Ninth Decennial Digest Part I, Constitutional Law, (Key No. 28), p. 1638.

13 Article III, Section 2; see Webb v. de Leon, 247 SCRA 652 [1995]; People v. Saycon,
236 SCRA 325 (1994]; Allado v. Diokno, 232 SCRA 192 (1994]; Burgos v. Chief of Staff,
133 SCRA 800 [1984]; Yee Sue Kuy v. Almeda, 70 Phil. 141 [1940]; Pasion Vda. de
Garcia v. Locsin, 65 Phil. 689 [1938]; and a host of other cases.

14 Article III, Section 12, pars. 1 to 3; People v. Alicando, 251 SCRA 293 [1995]; People
v. Bandula 232 SCRA 566 [1994]; People v. Nito 228 SCRA 442 [1993]; People v. Duero,
104 SCRA 379 [1981]; People v. Galit, 135 SCRA 465 [1985]; and a host of other cases.

15 Article III, Section 14; People v. Digno, 250 SCRA 237 [1995]; People v. Godoy, 250
SCRA 676 [1995]; People v. Colcol 219 SCRA [1993]; Borja v. Mendoza, 77 SCRA 422
[1977]; People v. Dramayo, 42 SCRA 59 [1971]; and a host of other cases.
16 Galman v. Pamaran, 138 SCRA 274 [1985]; Chavez v. Court of Appeals 24 SCRA
663 [1968]; People v. Otadura, 86 Phil. 244 [1950]; Bermudez v. Castillo, 64 Phil, 485
[1937]; and a host of other cases.

17 Harley v. Schuylkill County, 476 F. Supp, 191, 195-196 [1979]; Erdman v. Mitchell,
207 Pa. St. 79, 56 Atl. 327, 99 A.S.R. 783 63 L.R.A. 534 [1903]; see Ninth Decennial
Digest Part I, Constitutional Law, (Key No. 28), pp. 1638-1639.

18 City of Chicago v. George F. Harding Collection, 217 N.E. 2d 381, 383, 70 Ill. App. 2d
254 [1966]; People v. Buellton Dev. Co., 136 P. 2d 793, 796, 58 Cal. App. 2d 178 [1943];
Bordy v. State, 7 N.W. 2d 632, 635, 142 Neb. 714 [1943]; Cohen v. City of Chicago, 36
N.E. 2d 220, 224, 377 Ill 221 [1941].

19 16 Am Jur 2d, Constitutional Law, Sec. 143, p. 514; 16 C.J.S. Constitutional Law, Sec.
48, p. 100; 6 R.C.L. Sec. 54, p. 59; see also State ex rel. Noe v. Knop La. App. 190 So.
135, 142 [1939]; State ex rel. Walker v. Board of Comm'rs. for Educational Lands and
Funds, 3 N.W. 2d 196, 200, 141 Neb. 172 [1942]; Maddox v. Hunt, 83 P. 2d 553, 556, 83
Okl. 465 [1938].

20 Article II, Sections 11, 12 and 13 (Basco v. Phil. Amusements and Gaming
Corporation, 197 SCRA 52, 68 [1991]); Sections 5, 12, 13 and 17 (Kilosbayan, Inc. v.
Morato, 246 SCRA 540, 564 [1995]).

21 Article XIII, Section 13 (Basco, supra).

22 Article XIV, Section 2 (Basco, supra).

23 Kilosbayan v. Morato, supra, at 564.

24 Basco v. Phil. Amusements and Gaming Corporation, supra, at 68.

25 Congress had previously passed the Retail Trade Act (R.A. 1180); the Private
Security Agency Act (R.A. 5487; the law on engaging in the rice and corn industry (R.A.
3018, P.D. 194), etc.

26 Or such higher percentage as Congress may prescribe.

27 Article XIV, section 3 of the 1973 Constitution reads:

"Sec. 3. The Batasang Pambansa shall, upon recommendation of the National Economic
and Development Authority, reserve to citizens of the Philippines or to corporations or
associations wholly owned by such citizens, certain traditional areas of investments when
the national interest so dictates,"

28 101 Phil. 1155 [1957].

29 See Bernas, The Constitution of the Republic of the Philippines 450, vol. II [1988]. The
Lao Ichong case upheld the Filipinization of the retail trade and implied that particular
areas of business may be Filipinized without doing violence to the equal protection clause
of the Constitution.

30 Nolledo The New Constitution of the Philippines, Annotated, 1990 ed., p. 72. The word
"patrimony" first appeared in the preamble of the 1935 Constitution and was understood
to cover everything that belongs to the Filipino people, the tangible and the material as
well as the intangible and the spiritual assets and possessions of the nation (Sinco,
Philippine Political Law, Principles and Concepts [1962 ed.], p. 112; Speech of Delegate
of Conrado Benitez defending the draft preamble of the 1935 Constitution in Laurel,
Proceedings of the Constitutional Convention, vol. III, p. 325 [1966]).

31 Commissioned by the Manila Hotel Corporation for the Diamond Jubilee celebration of
the Hotel in 1987; see The Manila Hotel: The Heart and Memory of a City.any

32 Section 7 of R.A. 4846 provides:

Sec. 7. In the designation of a particular cultural property as a .national cultural treasure,"

the following procedure shall be observed:

(a) Before the actual designation, the owner, if the property is privately owned, shall be
notified at least fifteen days prior to the intended designation, and he shall be invited to
attend the deliberation and given a chance to be heard. Failure on the part of the owner
to attend the deliberation shall not bar the panel to render its decision. Decision shall be
given by the panel within a week after its deliberation. In the event that the owner desires
to seek reconsideration of the designation made by the panel, he may do so within thirty
days from the date that the decision has been rendered. If no request for reconsideration
is filed after this period, the designation is then considered final and executory. Any
request for reconsideration filed within thirty days and subsequently again denied by the
panel, may be further appealed to another panel chairmanned by the Secretary of
Education with two experts as members appointed by the Secretary of Education. Their
decision shall final and binding.

(b) Within each kind or class of objects, only the rare and unique objects may be
designated as "National Cultural Treasures." The remainder, if any shall be treated as
cultural property.

xxx xxx xxx

33 P.D. 1146, Sec, 5; P.D, 1146, known as "The Revised Government Service Insurance
Act of 1977" amended Commonwealth Act No. 186, the "Government Service Insurance
Act" of 1936.

34 Beronilla v. Government Service Insurance System, 36 SCRA 44, 53 [1970]; Social

Security System Employees Association v. Soriano, 7 SCRA 1016, 1023 [1963].

35 Id., secs. 28 and 29.

36 Id., Sec. 30.

37 Constitution, Article IX (B), section 2 (1).

38 Constitution, Article IX (D), section 2 (1).

39 It is meet to note that our laws do not debar foreigners from engaging in the hotel
business. Republic Act No. 7042, entitled the "Foreign Investments Act of 1991" was
enacted by Congress to "attract, promote and welcome . . . foreign investments . . . in
activities which significantly contribute to national industrialization and socio-economic
development to the extent that foreign investment is allowed by the Constitution and
 relevant laws." The law contains a list, called the Negative List specifying areas of
economic activity where foreign participation is limited or prohibited. Areas of economic
activity not included in the Negative List are open to foreign participation up to one
hundred per cent (Sees. 6 and 7). Foreigners now own and run a great number of our
five-star hotels.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC
 

G.R. No. 101083 July 30, 1993

JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all surnamed OPOSA,
minors, and represented by their parents ANTONIO and RIZALINA OPOSA,
ROBERTA NICOLE SADIUA, minor, represented by her parents CALVIN and
ROBERTA SADIUA, CARLO, AMANDA SALUD and PATRISHA, all surnamed
FLORES, minors and represented by their parents ENRICO and NIDA FLORES,
GIANINA DITA R. FORTUN, minor, represented by her parents SIGRID and
DOLORES FORTUN, GEORGE II and MA. CONCEPCION, all surnamed MISA,
minors and represented by their parents GEORGE and MYRA MISA, BENJAMIN
ALAN V. PESIGAN, minor, represented by his parents ANTONIO and ALICE
PESIGAN, JOVIE MARIE ALFARO, minor, represented by her parents JOSE and
MARIA VIOLETA ALFARO, MARIA CONCEPCION T. CASTRO, minor, represented
by her parents FREDENIL and JANE CASTRO, JOHANNA DESAMPARADO,
minor, represented by her parents JOSE and ANGELA DESAMPRADO, CARLO
JOAQUIN T. NARVASA, minor, represented by his parents GREGORIO II and
CRISTINE CHARITY NARVASA, MA. MARGARITA, JESUS IGNACIO, MA. ANGELA
and MARIE GABRIELLE, all surnamed SAENZ, minors, represented by their
parents ROBERTO and AURORA SAENZ, KRISTINE, MARY ELLEN, MAY, GOLDA
MARTHE and DAVID IAN, all surnamed KING, minors, represented by their
parents MARIO and HAYDEE KING, DAVID, FRANCISCO and THERESE
VICTORIA, all surnamed ENDRIGA, minors, represented by their parents
BALTAZAR and TERESITA ENDRIGA, JOSE MA. and REGINA MA., all surnamed
ABAYA, minors, represented by their parents ANTONIO and MARICA ABAYA,
MARILIN, MARIO, JR. and MARIETTE, all surnamed CARDAMA, minors,
represented by their parents MARIO and LINA CARDAMA, CLARISSA, ANN
MARIE, NAGEL, and IMEE LYN, all surnamed OPOSA, minors and represented by
their parents RICARDO and MARISSA OPOSA, PHILIP JOSEPH, STEPHEN JOHN
and ISAIAH JAMES, all surnamed QUIPIT, minors, represented by their parents
JOSE MAX and VILMI QUIPIT, BUGHAW CIELO, CRISANTO, ANNA, DANIEL and
FRANCISCO, all surnamed BIBAL, minors, represented by their parents
FRANCISCO, JR. and MILAGROS BIBAL, and THE PHILIPPINE ECOLOGICAL
NETWORK, INC., petitioners,
vs.
THE HONORABLE FULGENCIO S. FACTORAN, JR., in his capacity as the
Secretary of the Department of Environment and Natural Resources, and THE
HONORABLE ERIBERTO U. ROSARIO, Presiding Judge of the RTC, Makati,
Branch 66, respondents.

Oposa Law Office for petitioners.

The Solicitor General for respondents.

DAVIDE, JR., J.:

In a broader sense, this petition bears upon the right of Filipinos to a balanced and
healthful ecology which the petitioners dramatically associate with the twin concepts of
"inter-generational responsibility" and "inter-generational justice." Specifically, it touches
on the issue of whether the said petitioners have a cause of action to "prevent the
misappropriation or impairment" of Philippine rainforests and "arrest the unabated
hemorrhage of the country's vital life support systems and continued rape of Mother
Earth."

The controversy has its genesis in Civil Case No. 90-77 which was filed before Branch
66 (Makati, Metro Manila) of the Regional Trial Court (RTC), National Capital Judicial
Region. The principal plaintiffs therein, now the principal petitioners, are all minors duly
represented and joined by their respective parents. Impleaded as an additional plaintiff
is the Philippine Ecological Network, Inc. (PENI), a domestic, non-stock and non-profit
corporation organized for the purpose of, inter alia, engaging in concerted action geared
for the protection of our environment and natural resources. The original defendant was
the Honorable Fulgencio S. Factoran, Jr., then Secretary of the Department of
Environment and Natural Resources (DENR). His substitution in this petition by the new
Secretary, the Honorable Angel C. Alcala, was subsequently ordered upon proper
motion by the petitioners. 1 The complaint 2 was instituted as a taxpayers' class suit 3 and
alleges that the plaintiffs "are all citizens of the Republic of the Philippines, taxpayers,
and entitled to the full benefit, use and enjoyment of the natural resource treasure that is
the country's virgin tropical forests." The same was filed for themselves and others who
are equally concerned about the preservation of said resource but are "so numerous
that it is impracticable to bring them all before the Court." The minors further asseverate
that they "represent their generation as well as generations yet unborn." 4 Consequently,
it is prayed for that judgment be rendered:

. . . ordering defendant, his agents, representatives and other persons acting in his behalf
to —

(1) Cancel all existing timber license agreements in the country;

(2) Cease and desist from receiving, accepting, processing, renewing or approving new
timber license agreements.
and granting the plaintiffs ". . . such other reliefs just and equitable under the premises."
5

The complaint starts off with the general averments that the Philippine archipelago of
7,100 islands has a land area of thirty million (30,000,000) hectares and is endowed
with rich, lush and verdant rainforests in which varied, rare and unique species of flora
and fauna may be found; these rainforests contain a genetic, biological and chemical
pool which is irreplaceable; they are also the habitat of indigenous Philippine cultures
which have existed, endured and flourished since time immemorial; scientific evidence
reveals that in order to maintain a balanced and healthful ecology, the country's land
area should be utilized on the basis of a ratio of fifty-four per cent (54%) for forest cover
and forty-six per cent (46%) for agricultural, residential, industrial, commercial and other
uses; the distortion and disturbance of this balance as a consequence of deforestation
have resulted in a host of environmental tragedies, such as (a) water shortages
resulting from drying up of the water table, otherwise known as the "aquifer," as well as
of rivers, brooks and streams, (b) salinization of the water table as a result of the
intrusion therein of salt water, incontrovertible examples of which may be found in the
island of Cebu and the Municipality of Bacoor, Cavite, (c) massive erosion and the
consequential loss of soil fertility and agricultural productivity, with the volume of soil
eroded estimated at one billion (1,000,000,000) cubic meters per annum —
approximately the size of the entire island of Catanduanes, (d) the endangering and
extinction of the country's unique, rare and varied flora and fauna, (e) the disturbance
and dislocation of cultural communities, including the disappearance of the Filipino's
indigenous cultures, (f) the siltation of rivers and seabeds and consequential destruction
of corals and other aquatic life leading to a critical reduction in marine resource
productivity, (g) recurrent spells of drought as is presently experienced by the entire
country, (h) increasing velocity of typhoon winds which result from the absence of
windbreakers, (i) the floodings of lowlands and agricultural plains arising from the
absence of the absorbent mechanism of forests, (j) the siltation and shortening of the
lifespan of multi-billion peso dams constructed and operated for the purpose of
supplying water for domestic uses, irrigation and the generation of electric power, and
(k) the reduction of the earth's capacity to process carbon dioxide gases which has led
to perplexing and catastrophic climatic changes such as the phenomenon of global
warming, otherwise known as the "greenhouse effect."

Plaintiffs further assert that the adverse and detrimental consequences of continued and
deforestation are so capable of unquestionable demonstration that the same may be
submitted as a matter of judicial notice. This notwithstanding, they expressed their
intention to present expert witnesses as well as documentary, photographic and film
evidence in the course of the trial.

As their cause of action, they specifically allege that:

CAUSE OF ACTION

7. Plaintiffs replead by reference the foregoing allegations.

8. Twenty-five (25) years ago, the Philippines had some sixteen (16) million hectares of
rainforests constituting roughly 53% of the country's land mass.

9. Satellite images taken in 1987 reveal that there remained no more than 1.2 million
hectares of said rainforests or four per cent (4.0%) of the country's land area.

10. More recent surveys reveal that a mere 850,000 hectares of virgin old-growth
rainforests are left, barely 2.8% of the entire land mass of the Philippine archipelago and
about 3.0 million hectares of immature and uneconomical secondary growth forests.

11. Public records reveal that the defendant's, predecessors have granted timber license
agreements ('TLA's') to various corporations to cut the aggregate area of 3.89 million
hectares for commercial logging purposes.

A copy of the TLA holders and the corresponding areas covered is hereto attached as
Annex "A".

12. At the present rate of deforestation, i.e. about 200,000 hectares per annum or 25
hectares per hour — nighttime, Saturdays, Sundays and holidays included — the
Philippines will be bereft of forest resources after the end of this ensuing decade, if not
earlier.

13. The adverse effects, disastrous consequences, serious injury and irreparable
damage of this continued trend of deforestation to the plaintiff minor's generation and to
generations yet unborn are evident and incontrovertible. As a matter of fact, the
environmental damages enumerated in paragraph 6 hereof are already being felt,
experienced and suffered by the generation of plaintiff adults.

14. The continued allowance by defendant of TLA holders to cut and deforest the
remaining forest stands will work great damage and irreparable injury to plaintiffs —
especially plaintiff minors and their successors — who may never see, use, benefit from
and enjoy this rare and unique natural resource treasure.

This act of defendant constitutes a misappropriation and/or impairment of the natural

resource property he holds in trust for the benefit of plaintiff minors and succeeding
generations.

15. Plaintiffs have a clear and constitutional right to a balanced and healthful ecology and
are entitled to protection by the State in its capacity as the parens patriae.

16. Plaintiff have exhausted all administrative remedies with the defendant's office. On
March 2, 1990, plaintiffs served upon defendant a final demand to cancel all logging
permits in the country.

A copy of the plaintiffs' letter dated March 1, 1990 is hereto attached as Annex "B".

17. Defendant, however, fails and refuses to cancel the existing TLA's to the continuing
serious damage and extreme prejudice of plaintiffs.

18. The continued failure and refusal by defendant to cancel the TLA's is an act violative
of the rights of plaintiffs, especially plaintiff minors who may be left with a country that is
desertified (sic), bare, barren and devoid of the wonderful flora, fauna and indigenous
cultures which the Philippines had been abundantly blessed with.
 19. Defendant's refusal to cancel the aforementioned TLA's is manifestly contrary to the
public policy enunciated in the Philippine Environmental Policy which, in pertinent part,
states that it is the policy of the State —

(a) to create, develop, maintain and improve conditions under which man and nature can
thrive in productive and enjoyable harmony with each other;

(b) to fulfill the social, economic and other requirements of present and future generations
of Filipinos and;

(c) to ensure the attainment of an environmental quality that is conductive to a life of

dignity and well-being. (P.D. 1151, 6 June 1977)

20. Furthermore, defendant's continued refusal to cancel the aforementioned TLA's is

contradictory to the Constitutional policy of the State to —

a. effect "a more equitable distribution of opportunities, income and wealth" and "make
full and efficient use of natural resources (sic)." (Section 1, Article XII of the Constitution);

b. "protect the nation's marine wealth." (Section 2, ibid);

c. "conserve and promote the nation's cultural heritage and resources (sic)" (Section 14,
Article XIV, id.);

d. "protect and advance the right of the people to a balanced and healthful ecology in
accord with the rhythm and harmony of nature." (Section 16, Article II, id.)

21. Finally, defendant's act is contrary to the highest law of humankind — the natural law
— and violative of plaintiffs' right to self-preservation and perpetuation.

22. There is no other plain, speedy and adequate remedy in law other than the instant
action to arrest the unabated hemorrhage of the country's vital life support systems and
continued rape of Mother Earth. 6

On 22 June 1990, the original defendant, Secretary Factoran, Jr., filed a Motion to
Dismiss the complaint based on two (2) grounds, namely: (1) the plaintiffs have no
cause of action against him and (2) the issue raised by the plaintiffs is a political
question which properly pertains to the legislative or executive branches of
Government. In their 12 July 1990 Opposition to the Motion, the petitioners maintain
that (1) the complaint shows a clear and unmistakable cause of action, (2) the motion is
dilatory and (3) the action presents a justiciable question as it involves the defendant's
abuse of discretion.

On 18 July 1991, respondent Judge issued an order granting the aforementioned

motion to dismiss. 7 In the said order, not only was the defendant's claim — that the
complaint states no cause of action against him and that it raises a political question —
sustained, the respondent Judge further ruled that the granting of the relief prayed for
would result in the impairment of contracts which is prohibited by the fundamental law of
the land.
Plaintiffs thus filed the instant special civil action for certiorari under Rule 65 of the
Revised Rules of Court and ask this Court to rescind and set aside the dismissal order
on the ground that the respondent Judge gravely abused his discretion in dismissing the
action. Again, the parents of the plaintiffs-minors not only represent their children, but
have also joined the latter in this case. 8

On 14 May 1992, We resolved to give due course to the petition and required the
parties to submit their respective Memoranda after the Office of the Solicitor General
(OSG) filed a Comment in behalf of the respondents and the petitioners filed a reply
thereto.

Petitioners contend that the complaint clearly and unmistakably states a cause of action
as it contains sufficient allegations concerning their right to a sound environment based
on Articles 19, 20 and 21 of the Civil Code (Human Relations), Section 4 of Executive
Order (E.O.) No. 192 creating the DENR, Section 3 of Presidential Decree (P.D.) No.
1151 (Philippine Environmental Policy), Section 16, Article II of the 1987 Constitution
recognizing the right of the people to a balanced and healthful ecology, the concept of
generational genocide in Criminal Law and the concept of man's inalienable right to self-
preservation and self-perpetuation embodied in natural law. Petitioners likewise rely on
the respondent's correlative obligation per Section 4 of E.O. No. 192, to safeguard the
people's right to a healthful environment.

It is further claimed that the issue of the respondent Secretary's alleged grave abuse of
discretion in granting Timber License Agreements (TLAs) to cover more areas for
logging than what is available involves a judicial question.

Anent the invocation by the respondent Judge of the Constitution's non-impairment

clause, petitioners maintain that the same does not apply in this case because TLAs are
not contracts. They likewise submit that even if TLAs may be considered protected by
the said clause, it is well settled that they may still be revoked by the State when the
public interest so requires.

On the other hand, the respondents aver that the petitioners failed to allege in their
complaint a specific legal right violated by the respondent Secretary for which any relief
is provided by law. They see nothing in the complaint but vague and nebulous
allegations concerning an "environmental right" which supposedly entitles the
petitioners to the "protection by the state in its capacity as parens patriae." Such
allegations, according to them, do not reveal a valid cause of action. They then reiterate
the theory that the question of whether logging should be permitted in the country is a
political question which should be properly addressed to the executive or legislative
branches of Government. They therefore assert that the petitioners' resources is not to
file an action to court, but to lobby before Congress for the passage of a bill that would
ban logging totally.

As to the matter of the cancellation of the TLAs, respondents submit that the same
cannot be done by the State without due process of law. Once issued, a TLA remains
effective for a certain period of time — usually for twenty-five (25) years. During its
effectivity, the same can neither be revised nor cancelled unless the holder has been
found, after due notice and hearing, to have violated the terms of the agreement or
other forestry laws and regulations. Petitioners' proposition to have all the TLAs
indiscriminately cancelled without the requisite hearing would be violative of the
requirements of due process.

Before going any further, We must first focus on some procedural matters. Petitioners
instituted Civil Case No. 90-777 as a class suit. The original defendant and the present
respondents did not take issue with this matter. Nevertheless, We hereby rule that the
said civil case is indeed a class suit. The subject matter of the complaint is of common
and general interest not just to several, but to all citizens of the Philippines.
Consequently, since the parties are so numerous, it, becomes impracticable, if not
totally impossible, to bring all of them before the court. We likewise declare that the
plaintiffs therein are numerous and representative enough to ensure the full protection
of all concerned interests. Hence, all the requisites for the filing of a valid class suit
under Section 12, Rule 3 of the Revised Rules of Court are present both in the said civil
case and in the instant petition, the latter being but an incident to the former.

This case, however, has a special and novel element. Petitioners minors assert that
they represent their generation as well as generations yet unborn. We find no difficulty
in ruling that they can, for themselves, for others of their generation and for the
succeeding generations, file a class suit. Their personality to sue in behalf of the
succeeding generations can only be based on the concept of intergenerational
responsibility insofar as the right to a balanced and healthful ecology is concerned.
Such a right, as hereinafter expounded, considers
the "rhythm and harmony of nature." Nature means the created world in its entirety. 9
Such rhythm and harmony indispensably include, inter alia, the judicious disposition,
utilization, management, renewal and conservation of the country's forest, mineral, land,
waters, fisheries, wildlife, off-shore areas and other natural resources to the end that
their exploration, development and utilization be equitably accessible to the present as
well as future generations. 10 Needless to say, every generation has a responsibility to
the next to preserve that rhythm and harmony for the full enjoyment of a balanced and
healthful ecology. Put a little differently, the minors' assertion of their right to a sound
environment constitutes, at the same time, the performance of their obligation to ensure
the protection of that right for the generations to come.

The locus standi of the petitioners having thus been addressed, We shall now proceed
to the merits of the petition.

After a careful perusal of the complaint in question and a meticulous consideration and
evaluation of the issues raised and arguments adduced by the parties, We do not
hesitate to find for the petitioners and rule against the respondent Judge's challenged
order for having been issued with grave abuse of discretion amounting to lack of
jurisdiction. The pertinent portions of the said order reads as follows:

xxx xxx xxx

 After a careful and circumspect evaluation of the Complaint, the Court cannot help but
agree with the defendant. For although we believe that plaintiffs have but the noblest of
all intentions, it (sic) fell short of alleging, with sufficient definiteness, a specific legal right
they are seeking to enforce and protect, or a specific legal wrong they are seeking to
prevent and redress (Sec. 1, Rule 2, RRC). Furthermore, the Court notes that the
Complaint is replete with vague assumptions and vague conclusions based on unverified
data. In fine, plaintiffs fail to state a cause of action in its Complaint against the herein
defendant.

Furthermore, the Court firmly believes that the matter before it, being impressed with
political color and involving a matter of public policy, may not be taken cognizance of by
this Court without doing violence to the sacred principle of "Separation of Powers" of the
three (3) co-equal branches of the Government.

The Court is likewise of the impression that it cannot, no matter how we stretch our
jurisdiction, grant the reliefs prayed for by the plaintiffs, i.e., to cancel all existing timber
license agreements in the country and to cease and desist from receiving, accepting,
processing, renewing or approving new timber license agreements. For to do otherwise
would amount to "impairment of contracts" abhored (sic) by the fundamental law. 11

We do not agree with the trial court's conclusions that the plaintiffs failed to allege with
sufficient definiteness a specific legal right involved or a specific legal wrong committed,
and that the complaint is replete with vague assumptions and conclusions based on
unverified data. A reading of the complaint itself belies these conclusions.

The complaint focuses on one specific fundamental legal right — the right to a balanced
and healthful ecology which, for the first time in our nation's constitutional history, is
solemnly incorporated in the fundamental law. Section 16, Article II of the 1987
Constitution explicitly provides:

Sec. 16. The State shall protect and advance the right of the people to a balanced and
healthful ecology in accord with the rhythm and harmony of nature.

This right unites with the right to health which is provided for in the preceding section of
the same article:

Sec. 15. The State shall protect and promote the right to health of the people and instill
health consciousness among them.

While the right to a balanced and healthful ecology is to be found under the Declaration
of Principles and State Policies and not under the Bill of Rights, it does not follow that it
is less important than any of the civil and political rights enumerated in the latter. Such a
right belongs to a different category of rights altogether for it concerns nothing less than
self-preservation and self-perpetuation — aptly and fittingly stressed by the petitioners
— the advancement of which may even be said to predate all governments and
constitutions. As a matter of fact, these basic rights need not even be written in the
Constitution for they are assumed to exist from the inception of humankind. If they are
now explicitly mentioned in the fundamental charter, it is because of the well-founded
fear of its framers that unless the rights to a balanced and healthful ecology and to
health are mandated as state policies by the Constitution itself, thereby highlighting their
continuing importance and imposing upon the state a solemn obligation to preserve the
first and protect and advance the second, the day would not be too far when all else
would be lost not only for the present generation, but also for those to come —
generations which stand to inherit nothing but parched earth incapable of sustaining life.

The right to a balanced and healthful ecology carries with it the correlative duty to
refrain from impairing the environment. During the debates on this right in one of the
plenary sessions of the 1986 Constitutional Commission, the following exchange
transpired between Commissioner Wilfrido Villacorta and Commissioner Adolfo Azcuna
who sponsored the section in question:

MR. VILLACORTA:

Does this section mandate the State to provide sanctions against all
forms of pollution — air, water and noise pollution?

MR. AZCUNA:

Yes, Madam President. The right to healthful (sic) environment

necessarily carries with it the correlative duty of not impairing the same
and, therefore, sanctions may be provided for impairment of
environmental balance. 12

The said right implies, among many other things, the judicious management and
conservation of the country's forests.

Without such forests, the ecological or environmental balance would be

irreversiby disrupted.

Conformably with the enunciated right to a balanced and healthful ecology and the right
to health, as well as the other related provisions of the Constitution concerning the
conservation, development and utilization of the country's natural resources, 13 then
President Corazon C. Aquino promulgated on 10 June 1987 E.O. No. 192, 14 Section 4
of which expressly mandates that the Department of Environment and Natural
Resources "shall be the primary government agency responsible for the conservation,
management, development and proper use of the country's 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." Section 3 thereof makes the following
statement of policy:

Sec. 3. Declaration of Policy. — It is hereby declared the policy of the State to ensure the
sustainable use, development, management, renewal, and conservation of the country's
forest, mineral, land, off-shore areas and other natural resources, including the protection
and enhancement of the quality of the environment, and equitable access of the different
segments of the population to the development and the use of the country's natural
resources, not only for the present generation but for future generations as well. It is also
 the policy of the state to recognize and apply a true value system including social and
environmental cost implications relative to their utilization, development and conservation
of our natural resources.

This policy declaration is substantially re-stated it Title XIV, Book IV of the

Administrative Code of 1987, 15 specifically in Section 1 thereof which reads:

Sec. 1. Declaration of Policy. — (1) The State shall ensure, for the benefit of the Filipino
people, the full exploration and development as well as the judicious disposition,
utilization, management, renewal and conservation of the country's forest, mineral, land,
waters, fisheries, wildlife, off-shore areas and other natural resources, consistent with the
necessity of maintaining a sound ecological balance and protecting and enhancing the
quality of the environment and the objective of making the exploration, development and
utilization of such natural resources equitably accessible to the different segments of the
present as well as future generations.

(2) The State shall likewise recognize and apply a true value system that takes into
account social and environmental cost implications relative to the utilization, development
and conservation of our natural resources.

The above provision stresses "the necessity of maintaining a sound ecological balance
and protecting and enhancing the quality of the environment." Section 2 of the same
Title, on the other hand, specifically speaks of the mandate of the DENR; however, it
makes particular reference to the fact of the agency's being subject to law and higher
authority. Said section provides:

Sec. 2. Mandate. — (1) The Department of Environment and Natural Resources shall be
primarily responsible for the implementation of the foregoing policy.

(2) It shall, subject to law and higher authority, be in charge of carrying out the State's
constitutional mandate to control and supervise the exploration, development, utilization,
and conservation of the country's natural resources.

Both E.O. NO. 192 and the Administrative Code of 1987 have set the objectives which
will serve as the bases for policy formulation, and have defined the powers and
functions of the DENR.

It may, however, be recalled that even before the ratification of the 1987 Constitution,
specific statutes already paid special attention to the "environmental right" of the
present and future generations. On 6 June 1977, P.D. No. 1151 (Philippine
Environmental Policy) and P.D. No. 1152 (Philippine Environment Code) were issued.
The former "declared a continuing policy of the State (a) to create, develop, maintain
and improve conditions under which man and nature can thrive in productive and
enjoyable harmony with each other, (b) to fulfill the social, economic and other
requirements of present and future generations of Filipinos, and (c) to insure the
attainment of an environmental quality that is conducive to a life of dignity and well-
being." 16 As its goal, it speaks of the "responsibilities of each generation as trustee and
guardian of the environment for succeeding generations." 17 The latter statute, on the
other hand, gave flesh to the said policy.
Thus, the right of the petitioners (and all those they represent) to a balanced and
healthful ecology is as clear as the DENR's duty — under its mandate and by virtue of
its powers and functions under E.O. No. 192 and the Administrative Code of 1987 — to
protect and advance the said right.

A denial or violation of that right by the other who has the corelative duty or obligation to
respect or protect the same gives rise to a cause of action. Petitioners maintain that the
granting of the TLAs, which they claim was done with grave abuse of discretion, violated
their right to a balanced and healthful ecology; hence, the full protection thereof requires
that no further TLAs should be renewed or granted.

A cause of action is defined as:

. . . an act or omission of one party in violation of the legal right or rights of the other; and
its essential elements are legal right of the plaintiff, correlative obligation of the
defendant, and act or omission of the defendant in violation of said legal right. 18

It is settled in this jurisdiction that in a motion to dismiss based on the ground that the
complaint fails to state a cause of action, 19 the question submitted to the court for
resolution involves the sufficiency of the facts alleged in the complaint itself. No other
matter should be considered; furthermore, the truth of falsity of the said allegations is
beside the point for the truth thereof is deemed hypothetically admitted. The only issue
to be resolved in such a case is: admitting such alleged facts to be true, may the court
render a valid judgment in accordance with the prayer in the complaint? 20 In Militante
vs. Edrosolano, 21 this Court laid down the rule that the judiciary should "exercise the
utmost care and circumspection in passing upon a motion to dismiss on the ground of
the absence thereof [cause of action] lest, by its failure to manifest a correct
appreciation of the facts alleged and deemed hypothetically admitted, what the law
grants or recognizes is effectively nullified. If that happens, there is a blot on the legal
order. The law itself stands in disrepute."

After careful examination of the petitioners' complaint, We find the statements under the
introductory affirmative allegations, as well as the specific averments under the sub-
heading CAUSE OF ACTION, to be adequate enough to show, prima facie, the claimed
violation of their rights. On the basis thereof, they may thus be granted, wholly or partly,
the reliefs prayed for. It bears stressing, however, that insofar as the cancellation of the
TLAs is concerned, there is the need to implead, as party defendants, the grantees
thereof for they are indispensable parties.

The foregoing considered, Civil Case No. 90-777 be said to raise a political question.
Policy formulation or determination by the executive or legislative branches of
Government is not squarely put in issue. What is principally involved is the enforcement
of a right vis-a-vis policies already formulated and expressed in legislation. It must,
nonetheless, be emphasized that the political question doctrine is no longer, the
insurmountable obstacle to the exercise of judicial power or the impenetrable shield that
protects executive and legislative actions from judicial inquiry or review. The second
paragraph of section 1, Article VIII of the Constitution states that:
 Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine whether
or not there has been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the Government.

Commenting on this provision in his book, Philippine Political Law, 22 Mr. Justice Isagani
A. Cruz, a distinguished member of this Court, says:

The first part of the authority represents the traditional concept of judicial power, involving
the settlement of conflicting rights as conferred as law. The second part of the authority
represents a broadening of judicial power to enable the courts of justice to review what
was before forbidden territory, to wit, the discretion of the political departments of the
government.

As worded, the new provision vests in the judiciary, and particularly the Supreme Court,
the power to rule upon even the wisdom of the decisions of the executive and the
legislature and to declare their acts invalid for lack or excess of jurisdiction because
tainted with grave abuse of discretion. The catch, of course, is the meaning of "grave
abuse of discretion," which is a very elastic phrase that can expand or contract according
to the disposition of the judiciary.

In Daza vs. Singson, 23 Mr. Justice Cruz, now speaking for this Court, noted:

In the case now before us, the jurisdictional objection becomes even less tenable and
decisive. The reason is that, even if we were to assume that the issue presented before
us was political in nature, we would still not be precluded from revolving it under the
expanded jurisdiction conferred upon us that now covers, in proper cases, even the
political question. Article VII, Section 1, of the Constitution clearly provides: . . .

The last ground invoked by the trial court in dismissing the complaint is the non-
impairment of contracts clause found in the Constitution. The court a quo declared that:

The Court is likewise of the impression that it cannot, no matter how we stretch our
jurisdiction, grant the reliefs prayed for by the plaintiffs, i.e., to cancel all existing timber
license agreements in the country and to cease and desist from receiving, accepting,
processing, renewing or approving new timber license agreements. For to do otherwise
would amount to "impairment of contracts" abhored (sic) by the fundamental law. 24

We are not persuaded at all; on the contrary, We are amazed, if not shocked, by such a
sweeping pronouncement. In the first place, the respondent Secretary did not, for
obvious reasons, even invoke in his motion to dismiss the non-impairment clause. If he
had done so, he would have acted with utmost infidelity to the Government by providing
undue and unwarranted benefits and advantages to the timber license holders because
he would have forever bound the Government to strictly respect the said licenses
according to their terms and conditions regardless of changes in policy and the
demands of public interest and welfare. He was aware that as correctly pointed out by
the petitioners, into every timber license must be read Section 20 of the Forestry
Reform Code (P.D. No. 705) which provides:
 . . . Provided, That when the national interest so requires, the President may amend,
modify, replace or rescind any contract, concession, permit, licenses or any other form of
privilege granted herein . . .

Needless to say, all licenses may thus be revoked or rescinded by executive

action. It is not a contract, property or a property right protested by the due
process clause of the Constitution. In Tan vs. Director of Forestry, 25 this Court
held:

. . . 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
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 property or a property right, nor does it create a
vested right; nor is it taxation (37 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).

We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy
Executive Secretary: 26

. . . 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. L-24548, 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. 27

cannot be invoked.

In the second place, even if it is to be assumed that the same are contracts, the instant
case does not involve a law or even an executive issuance declaring the cancellation or
modification of existing timber licenses. Hence, the non-impairment clause cannot as
yet be invoked. Nevertheless, granting further that a law has actually been passed
mandating cancellations or modifications, the same cannot still be stigmatized as a
violation of the non-impairment clause. This is because by its very nature and purpose,
such as law could have only been passed in the exercise of the police power of the
state for the purpose of advancing the right of the people to a balanced and healthful
ecology, promoting their health and enhancing the general welfare. In Abe vs. Foster
Wheeler
Corp. 28 this Court stated:

The freedom of contract, under our system of government, is not meant to be absolute.
The same is understood to be subject to reasonable legislative regulation aimed at the
promotion of public health, moral, safety and welfare. In other words, the constitutional
guaranty of non-impairment of obligations of contract is limited by the exercise of the
police power of the State, in the interest of public health, safety, moral and general
welfare.

The reason for this is emphatically set forth in Nebia vs. New York, 29 quoted in
Philippine American Life Insurance Co. vs. Auditor General, 30 to wit:

Under our form of government the use of property and the making of contracts are
normally matters of private and not of public concern. The general rule is that both shall
be free of governmental interference. But neither property rights nor contract rights are
absolute; for government cannot exist if the citizen may at will use his property to the
detriment of his fellows, or exercise his freedom of contract to work them harm. Equally
fundamental with the private right is that of the public to regulate it in the common
interest.

In short, the non-impairment clause must yield to the police power of the state. 31

Finally, it is difficult to imagine, as the trial court did, how the non-impairment clause
could apply with respect to the prayer to enjoin the respondent Secretary from receiving,
accepting, processing, renewing or approving new timber licenses for, save in cases of
renewal, no contract would have as of yet existed in the other instances. Moreover, with
respect to renewal, the holder is not entitled to it as a matter of right.

WHEREFORE, being impressed with merit, the instant Petition is hereby GRANTED,
and the challenged Order of respondent Judge of 18 July 1991 dismissing Civil Case
No. 90-777 is hereby set aside. The petitioners may therefore amend their complaint to
implead as defendants the holders or grantees of the questioned timber license
agreements.

No pronouncement as to costs.

SO ORDERED.

Cruz, Padilla, Bidin, Griño-Aquino, Regalado, Romero, Nocon, Bellosillo, Melo and
Quiason, JJ., concur.

Narvasa, C.J., Puno and Vitug, JJ., took no part.

 
 

Separate Opinions

FELICIANO, J., concurring

I join in the result reached by my distinguished brother in the Court, Davide, Jr., J., in
this case which, to my mind, is one of the most important cases decided by this Court in
the last few years. The seminal principles laid down in this decision are likely to
influence profoundly the direction and course of the protection and management of the
environment, which of course embraces the utilization of all the natural resources in the
territorial base of our polity. I have therefore sought to clarify, basically to myself, what
the Court appears to be saying.

The Court explicitly states that petitioners have the locus standi necessary to sustain
the bringing and, maintenance of this suit (Decision, pp. 11-12). Locus standi is not a
function of petitioners' claim that their suit is properly regarded as a class suit. I
understand locus standi to refer to the legal interest which a plaintiff must have in the
subject matter of the suit. Because of the very broadness of the concept of "class" here
involved — membership in this "class" appears to embrace everyone living in the
country whether now or in the
future — it appears to me that everyone who may be expected to benefit from the
course of action petitioners seek to require public respondents to take, is vested with
the necessary locus standi. The Court may be seen therefore to be recognizing a
beneficiaries' right of action in the field of environmental protection, as against both the
public administrative agency directly concerned and the private persons or entities
operating in the field or sector of activity involved. Whether such beneficiaries' right of
action may be found under any and all circumstances, or whether some failure to act, in
the first instance, on the part of the governmental agency concerned must be shown
("prior exhaustion of administrative remedies"), is not discussed in the decision and
presumably is left for future determination in an appropriate case.

The Court has also declared that the complaint has alleged and focused upon "one
specific fundamental legal right — the right to a balanced and healthful ecology"
(Decision, p. 14). There is no question that "the right to a balanced and healthful
ecology" is "fundamental" and that, accordingly, it has been "constitutionalized." But
although it is fundamental in character, I suggest, with very great respect, that it cannot
be characterized as "specific," without doing excessive violence to language. It is in fact
very difficult to fashion language more comprehensive in scope and generalized in
character than a right to "a balanced and healthful ecology." The list of particular claims
which can be subsumed under this rubic appears to be entirely open-ended: prevention
and control of emission of toxic fumes and smoke from factories and motor vehicles; of
discharge of oil, chemical effluents, garbage and raw sewage into rivers, inland and
coastal waters by vessels, oil rigs, factories, mines and whole communities; of dumping
of organic and inorganic wastes on open land, streets and thoroughfares; failure to
rehabilitate land after strip-mining or open-pit mining; kaingin or slash-and-burn farming;
destruction of fisheries, coral reefs and other living sea resources through the use of
dynamite or cyanide and other chemicals; contamination of ground water resources;
loss of certain species of fauna and flora; and so on. The other statements pointed out
by the Court: Section 3, Executive Order No. 192 dated 10 June 1987; Section 1, Title
XIV, Book IV of the 1987 Administrative Code; and P.D. No. 1151, dated 6 June 1977
— all appear to be formulations of policy, as general and abstract as the constitutional
statements of basic policy in Article II, Section 16 ("the right — to a balanced and
healthful ecology") and 15 ("the right to health").

P.D. No. 1152, also dated 6 June 1977, entitled "The Philippine Environment Code," is,
upon the other hand, a compendious collection of more "specific environment
management policies" and "environment quality standards" (fourth "Whereas" clause,
Preamble) relating to an extremely wide range of topics:

(a) air quality management;

(b) water quality management;

(c) land use management;

(d) natural resources management and conservation embracing:

(i) fisheries and aquatic resources;

(ii) wild life;

(iii) forestry and soil conservation;

(iv) flood control and natural calamities;

(v) energy development;

(vi) conservation and utilization of surface and ground water

(vii) mineral resources

Two (2) points are worth making in this connection. Firstly, neither petitioners nor the
Court has identified the particular provision or provisions (if any) of the Philippine
Environment Code which give rise to a specific legal right which petitioners are seeking
to enforce. Secondly, the Philippine Environment Code identifies with notable care the
particular government agency charged with the formulation and implementation of
guidelines and programs dealing with each of the headings and sub-headings
mentioned above. The Philippine Environment Code does not, in other words, appear to
contemplate action on the part of private persons who are beneficiaries of
implementation of that Code.
As a matter of logic, by finding petitioners' cause of action as anchored on a legal right
comprised in the constitutional statements above noted, the Court is in effect saying that
Section 15 (and Section 16) of Article II of the Constitution are self-executing and
judicially enforceable even in their present form. The implications of this doctrine will
have to be explored in future cases; those implications are too large and far-reaching in
nature even to be hinted at here.

My suggestion is simply that petitioners must, before the trial court, show a more
specific legal right — a right cast in language of a significantly lower order of generality
than Article II (15) of the Constitution — that is or may be violated by the actions, or
failures to act, imputed to the public respondent by petitioners so that the trial court can
validly render judgment granting all or part of the relief prayed for. To my mind, the
Court should be understood as simply saying that such a more specific legal right or
rights may well exist in our corpus of law, considering the general policy principles found
in the Constitution and the existence of the Philippine Environment Code, and that the
trial court should have given petitioners an effective opportunity so to demonstrate,
instead of aborting the proceedings on a motion to dismiss.

It seems to me important that the legal right which is an essential component of a cause
of action be a specific, operable legal right, rather than a constitutional or statutory
policy, for at least two (2) reasons. One is that unless the legal right claimed to have
been violated or disregarded is given specification in operational terms, defendants may
well be unable to defend themselves intelligently and effectively; in other words, there
are due process dimensions to this matter.

The second is a broader-gauge consideration — where a specific violation of law or

applicable regulation is not alleged or proved, petitioners can be expected to fall back
on the expanded conception of judicial power in the second paragraph of Section 1 of
Article VIII of the Constitution which reads:

Section 1. . . .

Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine whether
or not there has been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the Government. (Emphasis
supplied)

When substantive standards as general as "the right to a balanced and healthy

ecology" and "the right to health" are combined with remedial standards as broad
ranging as "a grave abuse of discretion amounting to lack or excess of
jurisdiction," the result will be, it is respectfully submitted, to propel courts into the
uncharted ocean of social and economic policy making. At least in respect of the
vast area of environmental protection and management, our courts have no claim
to special technical competence and experience and professional qualification.
Where no specific, operable norms and standards are shown to exist, then the
policy making departments — the legislative and executive departments — must
 be given a real and effective opportunity to fashion and promulgate those norms
and standards, and to implement them before the courts should intervene.

My learned brother Davide, Jr., J., rightly insists that the timber companies, whose
concession agreements or TLA's petitioners demand public respondents should cancel,
must be impleaded in the proceedings below. It might be asked that, if petitioners'
entitlement to the relief demanded is not dependent upon proof of breach by the timber
companies of one or more of the specific terms and conditions of their concession
agreements (and this, petitioners implicitly assume), what will those companies litigate
about? The answer I suggest is that they may seek to dispute the existence of the
specific legal right petitioners should allege, as well as the reality of the claimed factual
nexus between petitioners' specific legal rights and the claimed wrongful acts or failures
to act of public respondent administrative agency. They may also controvert the
appropriateness of the remedy or remedies demanded by petitioners, under all the
circumstances which exist.

I vote to grant the Petition for Certiorari because the protection of the environment,
including the forest cover of our territory, is of extreme importance for the country. The
doctrines set out in the Court's decision issued today should, however, be subjected to
closer examination.

# Separate Opinions

FELICIANO, J., concurring

I join in the result reached by my distinguished brother in the Court, Davide, Jr., J., in
this case which, to my mind, is one of the most important cases decided by this Court in
the last few years. The seminal principles laid down in this decision are likely to
influence profoundly the direction and course of the protection and management of the
environment, which of course embraces the utilization of all the natural resources in the
territorial base of our polity. I have therefore sought to clarify, basically to myself, what
the Court appears to be saying.

The Court explicitly states that petitioners have the locus standi necessary to sustain
the bringing and, maintenance of this suit (Decision, pp. 11-12). Locus standi is not a
function of petitioners' claim that their suit is properly regarded as a class suit. I
understand locus standi to refer to the legal interest which a plaintiff must have in the
subject matter of the suit. Because of the very broadness of the concept of "class" here
involved — membership in this "class" appears to embrace everyone living in the
country whether now or in the
future — it appears to me that everyone who may be expected to benefit from the
course of action petitioners seek to require public respondents to take, is vested with
the necessary locus standi. The Court may be seen therefore to be recognizing a
beneficiaries' right of action in the field of environmental protection, as against both the
public administrative agency directly concerned and the private persons or entities
operating in the field or sector of activity involved. Whether such beneficiaries' right of
action may be found under any and all circumstances, or whether some failure to act, in
the first instance, on the part of the governmental agency concerned must be shown
("prior exhaustion of administrative remedies"), is not discussed in the decision and
presumably is left for future determination in an appropriate case.

The Court has also declared that the complaint has alleged and focused upon "one
specific fundamental legal right — the right to a balanced and healthful ecology"
(Decision, p. 14). There is no question that "the right to a balanced and healthful
ecology" is "fundamental" and that, accordingly, it has been "constitutionalized." But
although it is fundamental in character, I suggest, with very great respect, that it cannot
be characterized as "specific," without doing excessive violence to language. It is in fact
very difficult to fashion language more comprehensive in scope and generalized in
character than a right to "a balanced and healthful ecology." The list of particular claims
which can be subsumed under this rubic appears to be entirely open-ended: prevention
and control of emission of toxic fumes and smoke from factories and motor vehicles; of
discharge of oil, chemical effluents, garbage and raw sewage into rivers, inland and
coastal waters by vessels, oil rigs, factories, mines and whole communities; of dumping
of organic and inorganic wastes on open land, streets and thoroughfares; failure to
rehabilitate land after strip-mining or open-pit mining; kaingin or slash-and-burn farming;
destruction of fisheries, coral reefs and other living sea resources through the use of
dynamite or cyanide and other chemicals; contamination of ground water resources;
loss of certain species of fauna and flora; and so on. The other statements pointed out
by the Court: Section 3, Executive Order No. 192 dated 10 June 1987; Section 1, Title
XIV, Book IV of the 1987 Administrative Code; and P.D. No. 1151, dated 6 June 1977
— all appear to be formulations of policy, as general and abstract as the constitutional
statements of basic policy in Article II, Section 16 ("the right — to a balanced and
healthful ecology") and 15 ("the right to health").

P.D. No. 1152, also dated 6 June 1977, entitled "The Philippine Environment Code," is,
upon the other hand, a compendious collection of more "specific environment
management policies" and "environment quality standards" (fourth "Whereas" clause,
Preamble) relating to an extremely wide range of topics:

(a) air quality management;

(b) water quality management;

(c) land use management;

(d) natural resources management and conservation embracing:

(i) fisheries and aquatic resources;

 (ii) wild life;

(iii) forestry and soil conservation;

(iv) flood control and natural calamities;

(v) energy development;

(vi) conservation and utilization of surface and ground water

(vii) mineral resources

Two (2) points are worth making in this connection. Firstly, neither petitioners nor the
Court has identified the particular provision or provisions (if any) of the Philippine
Environment Code which give rise to a specific legal right which petitioners are seeking
to enforce. Secondly, the Philippine Environment Code identifies with notable care the
particular government agency charged with the formulation and implementation of
guidelines and programs dealing with each of the headings and sub-headings
mentioned above. The Philippine Environment Code does not, in other words, appear to
contemplate action on the part of private persons who are beneficiaries of
implementation of that Code.

As a matter of logic, by finding petitioners' cause of action as anchored on a legal right

comprised in the constitutional statements above noted, the Court is in effect saying that
Section 15 (and Section 16) of Article II of the Constitution are self-executing and
judicially enforceable even in their present form. The implications of this doctrine will
have to be explored in future cases; those implications are too large and far-reaching in
nature even to be hinted at here.

My suggestion is simply that petitioners must, before the trial court, show a more
specific legal right — a right cast in language of a significantly lower order of generality
than Article II (15) of the Constitution — that is or may be violated by the actions, or
failures to act, imputed to the public respondent by petitioners so that the trial court can
validly render judgment granting all or part of the relief prayed for. To my mind, the
Court should be understood as simply saying that such a more specific legal right or
rights may well exist in our corpus of law, considering the general policy principles found
in the Constitution and the existence of the Philippine Environment Code, and that the
trial court should have given petitioners an effective opportunity so to demonstrate,
instead of aborting the proceedings on a motion to dismiss.

It seems to me important that the legal right which is an essential component of a cause
of action be a specific, operable legal right, rather than a constitutional or statutory
policy, for at least two (2) reasons. One is that unless the legal right claimed to have
been violated or disregarded is given specification in operational terms, defendants may
well be unable to defend themselves intelligently and effectively; in other words, there
are due process dimensions to this matter.
The second is a broader-gauge consideration — where a specific violation of law or
applicable regulation is not alleged or proved, petitioners can be expected to fall back
on the expanded conception of judicial power in the second paragraph of Section 1 of
Article VIII of the Constitution which reads:

Section 1. . . .

Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine whether
or not there has been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the Government. (Emphasis
supplied)

When substantive standards as general as "the right to a balanced and healthy

ecology" and "the right to health" are combined with remedial standards as broad
ranging as "a grave abuse of discretion amounting to lack or excess of
jurisdiction," the result will be, it is respectfully submitted, to propel courts into the
uncharted ocean of social and economic policy making. At least in respect of the
vast area of environmental protection and management, our courts have no claim
to special technical competence and experience and professional qualification.
Where no specific, operable norms and standards are shown to exist, then the
policy making departments — the legislative and executive departments — must
be given a real and effective opportunity to fashion and promulgate those norms
and standards, and to implement them before the courts should intervene.

My learned brother Davide, Jr., J., rightly insists that the timber companies, whose
concession agreements or TLA's petitioners demand public respondents should cancel,
must be impleaded in the proceedings below. It might be asked that, if petitioners'
entitlement to the relief demanded is not dependent upon proof of breach by the timber
companies of one or more of the specific terms and conditions of their concession
agreements (and this, petitioners implicitly assume), what will those companies litigate
about? The answer I suggest is that they may seek to dispute the existence of the
specific legal right petitioners should allege, as well as the reality of the claimed factual
nexus between petitioners' specific legal rights and the claimed wrongful acts or failures
to act of public respondent administrative agency. They may also controvert the
appropriateness of the remedy or remedies demanded by petitioners, under all the
circumstances which exist.

I vote to grant the Petition for Certiorari because the protection of the environment,
including the forest cover of our territory, is of extreme importance for the country. The
doctrines set out in the Court's decision issued today should, however, be subjected to
closer examination.

# Footnotes

1 Rollo, 164; 186.

2 Id., 62-65, exclusive of annexes.

3 Under Section 12, Rule 3, Revised Rules of Court.

4 Rollo, 67.

5 Id., 74.

6 Rollo, 70-73.

7 Annex "B" of Petitions; Id., 43-44.

8 Paragraph 7, Petition, 6; Rollo, 20.

9 Webster's Third New International Dictionary, unabridged, 1986, 1508.

10 Title XIV (Environment and Natural Resources), Book IV of the Administrative Code of
1987, E.O. No. 292.

11 Annex "B" of Petition; Rollo, 43-44.

12 Record of the Constitutional Commission, vol. 4, 913.

13 For instance, the Preamble and Article XII on the National Economy and Patrimony.

14 The Reorganization Act of the Department of Environment and Natural Resources.

15 E.O. No. 292.

16 Section 1.

17 Section 2.

18 Ma-ao Sugar Central Co. vs. Barrios, 79 Phil. 666 [1947]; Community Investment and
Finance Corp. vs. Garcia, 88 Phil. 215 [1951]; Remitere vs. Vda. de Yulo, 16 SCRA 251
[1966]; Caseñas vs. Rosales, 19 SCRA 462 [1967]; Virata vs. Sandiganbayan, 202
SCRA 680 [1991]; Madrona vs. Rosal, 204 SCRA 1 [1991].

19 Section 1(q), Rule 16, Revised Rules of Court.

20 Adamos vs. J.M. Tuason and Co., Inc. 25 SCRA 529 [1968]; Virata vs. Sandiganbayn,
supra; Madrona vs. Rosal, supra.

21 39 SCRA 473, 479 [1971].

22 1991 ed., 226-227.

23 180 SCRA 496, 501-502 [1989]. See also, Coseteng vs. Mitra, 187 SCRA 377 [1990];
Gonzales vs. Macaraig, 191 SCRA 452 [1990]; Llamas vs. Orbos, 202 SCRA 844 [1991];
Bengzon vs. Senate Blue Ribbon Committee, 203 SCRA 767 [1991].

24 Rollo, 44.
 25 125 SCRA 302, 325 [1983].

26 190 SCRA 673, 684 [1990].

27 Article III, 1987 Constitution.

28 110 Phil. 198, 203 [1960]; footnotes omitted.

29 291 U.S. 502, 523, 78 L. ed. 940, 947-949.

30 22 SCRA 135, 146-147 [1968].

31 Ongsiako vs. Gamboa, 86 Phil. 50 [1950]; Abe vs. Foster Wheeler Corp. supra.; Phil.
American Life Insurance Co. vs. Auditor General, supra.; Alalayan vs. NPC, 24 SCRA
172[1968]; Victoriano vs. Elizalde Rope Workers' Union, 59 SCRA 54 [1974]; Kabiling vs.
National Housing Authority, 156 SCRA 623 [1987].

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 79538 October 18, 1990

FELIPE YSMAEL, JR. & CO., INC., petitioner,

vs.
THE DEPUTY EXECUTIVE SECRETARY, THE SECRETARY OF ENVIRONMENT
AND NATURAL RESOURCES, THE DIRECTOR OF THE BUREAU OF FOREST
DEVELOPMENT and TWIN PEAKS DEVELOPMENT AND REALTY CORPORATION,
respondents.

Tañada, Vivo & Tan for petitioner.

Antonio E. Escober and Jurado Law Office for respondent Twin Peaks Development
Corporation.

COURTS, J.:

Soon after the change of government in February 1986, petitioner sent a letter dated
March 17, 1986 to the Office of the President, and another letter dated April 2, 1986 to
Minister Ernesto Maceda of the Ministry of Natural Resources [MNR], seeking: (1) the
reinstatement of its timber license agreement which was cancelled in August 1983
during the Marcos administration; (2) the revocation of TLA No. 356 which was issued
to Twin Peaks Development and Realty Corporation without public bidding and in
violation of forestry laws, rules and regulations; and, (3) the issuance of an order
allowing petitioner to take possession of all logs found in the concession area [Annexes
"6" and "7" of the Petition; Rollo, pp. 54-63].

Petitioner made the following allegations:

(a) That on October 12, 1965, it entered into a timber license agreement designated as
TLA No. 87 with the Department of Agriculture and Natural Resources, represented by
then Secretary Jose Feliciano, wherein it was issued an exclusive license to cut, collect
and remove timber except prohibited species within a specified portion of public forest
land with an area of 54,920 hectares located in the municipality of Maddela, province of
Nueva Vizcaya * from October 12, 1965 until June 30, 1990;

(b) That on August 18, 1983, the Director of the Bureau of Forest Development
[hereinafter referred to as "Bureau"], Director Edmundo Cortes, issued a memorandum
order stopping all logging operations in Nueva Vizcaya and Quirino provinces, and
cancelling the logging concession of petitioner and nine other forest concessionaires,
pursuant to presidential instructions and a memorandum order of the Minister of Natural
Resources Teodoro Pena [Annex "5" of the Petition; Rollo, p. 49];

(c) that on August 25, 1983, petitioner received a telegram from the Bureau, the
contents of which were as follows:

PURSUANT TO THE INSTRUCTIONS OF THE PRESIDENT YOU ARE REQUESTED

TO STOP ALL LOGGING OPERATIONS TO CONSERVE REMAINING FORESTS
PLEASE CONDUCT THE ORDERLY PULL-OUT OF LOGGING MACHINERIES AND
EQUIPMENT AND COORDINATE WITH THE RESPECTIVE DISTRICT FORESTERS
FOR THE INVENTORY OF LOGS CUT PRIOR TO THIS ORDER THE SUBMISSION
OF A COMPLIANCE REPORT WITHIN THIRTY DAYS SHALL BE APPRECIATED —
[Annex "4" of the Petition; Rollo, p. 48];

(d) That after the cancellation of its timber license agreement, it immediately sent a
letter addressed to then President Ferdinand Marcos which sought reconsideration of
the Bureau's directive, citing in support thereof its contributions to alleging that it was
not given the forest conservation and opportunity to be heard prior to the cancellation of
its logging 531, but no operations (Annex "6" of the Petition; Rollo, pp. 50 favorable
action was taken on this letter;

(e) That barely one year thereafter, approximately one-half or 26,000 hectares of the
area formerly covered by TLA No. 87 was re-awarded to Twin Peaks Development and
Reality Corporation under TLA No. 356 which was set to expire on July 31, 2009, while
the other half was allowed to be logged by Filipinas Loggers, Inc. without the benefit of
a formal award or license; and,

(f) That the latter entities were controlled or owned by relatives or cronies of deposed
President Ferdinand Marcos. Acting on petitioner's letter, the MNR through then
Minister Ernesto Maceda issued an order dated July 22, 1986 denying petitioner's
request. The Ministry ruled that a timber license was not a contract within the due
process clause of the Constitution, but only a privilege which could be withdrawn
whenever public interest or welfare so demands, and that petitioner was not
discriminated against in view of the fact that it was among ten concessionaires whose
licenses were revoked in 1983. Moreover, emphasis was made of the total ban of
logging operations in the provinces of Nueva Ecija, Nueva Vizcaya, Quirino and Ifugao
imposed on April 2, 1986, thus:

xxx xxx xxx

It should be recalled that [petitioner's] earlier request for reinstatement has been denied
in view of the total ban of all logging operations in the provinces of Nueva Ecija, Nueva
Vizcaya, Quirino and Ifugao which was imposed for reasons of conservation and national
security.

The Ministry imposed the ban because it realizes the great responsibility it bear [sic] in
respect to forest t considers itself the trustee thereof. This being the case, it has to
ensure the availability of forest resources not only for the present, but also for the future
generations of Filipinos.

On the other hand, the activities of the insurgents in these parts of the country are well
documented. Their financial demands on logging concessionaires are well known. The
government, therefore, is well within its right to deprive its enemy of sources of funds in
order to preserve itself, its established institutions and the liberty and democratic way of
life of its people.

xxx xxx xxx

[Annex "9" of the Petition, pp. 2-4; Rollo, pp. 65-67.]

Petitioner moved for reconsideration of the aforestated order reiterating, among others.
its request that TLA No. 356 issued to private respondent be declared null and void. The
MNR however denied this motion in an order dated September 15, 1986. stating in part:

xxx xxx xxx

Regarding [petitioner's] request that the award of a 26,000 hectare portion of TLA No. 87
to Twin Peaks Realty Development Corporation under TLA No. 356 be declared null and
void, suffice it to say that the Ministry is now in the process of reviewing all contracts,
permits or other form of privileges for the exploration, development, exploitation, or
utilization of natural resources entered into, granted, issued or acquired before the
issuance of Proclamation No. 3, otherwise known as the Freedom Constitution for the
purpose of amending, modifying or revoking them when the national interest so requires.

xxx xxx xxx

The Ministry, through the Bureau of Forest Development, has jurisdiction and authority
over all forest lands. On the basis of this authority, the Ministry issued the order banning
all logging operations/activities in Quirino province, among others, where movant's former
concession area is located. Therefore, the issuance of an order disallowing any person or
entity from removing cut or uncut logs from the portion of TLA No. 87, now under TLA No.
356, would constitute an unnecessary or superfluous act on the part of the Ministry.

xxx xxx xxx

 [Annex "11" of the Petition, pp. 3-4; Rollo, pp. 77-78.]

On November 26, 1986, petitioner's supplemental motion for reconsideration was

likewise denied. Meanwhile, per MNR Administrative Order No. 54, series of 1986,
issued on November 26, 1986, the logging ban in the province of Quirino was lifted.

Petitioner subsequently appealed from the orders of the MNR to the Office of the
President. In a resolution dated July 6, 1987, the Office of the President, acting through
then Deputy Executive Secretary Catalino Macaraig, denied petitioner's appeal for lack
of merit. The Office of the President ruled that the appeal of petitioner was prematurely
filed, the matter not having been terminated in the MNR. Petitioner's motion for
reconsideration was denied on August 14, 1987.

Hence, petitioner filed directly with this Court a petition for certiorari, with prayer for the
issuance of a restraining order or writ of preliminary injunction, on August 27, 1987. On
October 13, 1987, it filed a supplement to its petition for certiorari. Thereafter, public and
private respondents submitted their respective comments, and petitioner filed its
consolidated reply thereto. In a resolution dated May 22, 1989, the Court resolved to
give due course to the petition.

After a careful study of the circumstances in the case at bar, the Court finds several
factors which militate against the issuance of a writ of certiorari in favor of petitioner.

1. Firstly, the refusal of public respondents herein to reverse final and executory
administrative orders does not constitute grave abuse of discretion amounting to lack or
excess of jurisdiction.

It is an established doctrine in this jurisdiction that the decisions and orders of

administrative agencies have upon their finality, the force and binding effect of a final
judgment within the purview of the doctrine of res judicata. These decisions and orders
are as conclusive upon the rights of the affected parties as though the same had been
rendered by a court of general jurisdiction. The rule of res judicata thus forbids the
reopening of a matter once determined by competent authority acting within their
exclusive jurisdiction [See Brillantes v. Castro, 99 Phil. 497 (1956); Ipekdjian
Merchandising Co., Inc. v. Court of Tax Appeals, G.R. No. L-15430, September 30,
1963, 9 SCRA 72; San Luis v. Court of Appeals, G.R. No. 80160, June 26, 1989].

In the case at bar, petitioner's letters to the Office of the President and the MNR [now
the Department of Environment and Natural Resources (DENR) dated March 17, 1986
and April 2, 1986, respectively, sought the reconsideration of a memorandum order
issued by the Bureau of Forest Development which cancelled its timber license
agreement in 1983, as well as the revocation of TLA No. 356 subsequently issued by
the Bureau to private respondents in 1984.

But as gleaned from the record, petitioner did not avail of its remedies under the law, i.e.
Section 8 of Pres. Dec. No. 705 as amended, for attacking the validity of these
administrative actions until after 1986. By the time petitioner sent its letter dated April 2,
1986 to the newly appointed Minister of the MNR requesting reconsideration of the
above Bureau actions, these were already settled matters as far as petitioner was
concerned [See Rueda v. Court of Agrarian Relations, 106 Phil. 300 (1959); Danan v.
Aspillera G.R. No. L-17305, November 28, 1962, 6 SCRA 609; Ocampo v. Arboleda
G.R. No. L-48190, August 31, 1987, 153 SCRA 374].

No particular significance can be attached to petitioner's letter dated September 19,

1983 which petitioner claimed to have sent to then President Marcos [Annex "6" of
Petition, Rollo, pp. 50-53], seeking the reconsideration of the 1983 order issued by
Director Cortes of the Bureau. It must be pointed out that the averments in this letter are
entirely different from the charges of fraud against officials under the previous regime
made by petitioner in its letters to public respondents herein. In the letter to then
President Marcos, petitioner simply contested its inclusion in the list of concessionaires,
whose licenses were cancelled, by defending its record of selective logging and
reforestation practices in the subject concession area. Yet, no other administrative steps
appear to have been taken by petitioner until 1986, despite the fact that the alleged
fraudulent scheme became apparent in 1984 as evidenced by the awarding of the
subject timber concession area to other entities in that year.

2. Moreover, petitioner is precluded from availing of the benefits of a writ of certiorari in

the present case because he failed to file his petition within a reasonable period.

The principal issue ostensibly presented for resolution in the instant petition is whether
or not public respondents herein acted with grave abuse of discretion amounting to lack
or excess of jurisdiction in refusing to overturn administrative orders issued by their
predecessors in the past regime. Yet, what the petition ultimately seeks is the
nullification of the Bureau orders cancelling TLA No. 87 and granting TLA No. 356 to
private respondent, which were issued way back in 1983 and 1984, respectively.

Once again, the fact that petitioner failed to seasonably take judicial recourse to have
the earlier administrative actions reviewed by the courts through a petition for certiorari
is prejudicial to its cause. For although no specific time frame is fixed for the institution
of a special civil action for certiorari under Rule 65 of the Revised Rules of Court, the
same must nevertheless be done within a "reasonable time". The yardstick to measure
the timeliness of a petition for certiorari is the "reasonableness of the length of time that
had expired from the commission of the acts complained of up to the institution of the
proceeding to annul the same" [Toledo v. Pardo, G.R. No. 56761, November 19, 1982,
118 SCRA 566, 571]. And failure to file the petition for certiorari within a reasonable
period of time renders the petitioner susceptible to the adverse legal consequences of
laches [Municipality of Carcar v. Court of First Instance of Cebu, G.R. No. L-31628,
December 27, 1982, 119 SCRA 392).

Laches is defined as the failure or neglect for an unreasonable and unexplained length
of time to do that which by exercising due diligence, could or should have been done
earlier, or to assert a right within a reasonable time, warranting a presumption that the
party entitled thereto has either abandoned it or declined to assert it [Tijam v.
Sibonghanoy, G.R. No. L-21450, April 15, 1968, 23 SCRA 29; Seno v. Mangubat, G.R.
No. L-44339, December 2, 1987, 156 SCRA 113]. The rule is that unreasonable delay
on the part of a plaintiff in seeking to enforce an alleged right may, depending upon the
circumstances, be destructive of the right itself. Verily, the laws aid those who are
vigilant, not those who sleep upon their rights (Vigilantibus et non dormientibus jura
subveniunt) [See Buenaventura v. David, 37 Phil. 435 (1918)].

In the case at bar, petitioner waited for at least three years before it finally filed a petition
for certiorari with the Court attacking the validity of the assailed Bureau actions in 1983
and 1984. Considering that petitioner, throughout the period of its inaction, was not
deprived of the opportunity to seek relief from the courts which were normally operating
at the time, its delay constitutes unreasonable and inexcusable neglect, tantamount to
laches. Accordingly, the writ of certiorari requiring the reversal of these orders will not
lie.

3. Finally, there is a more significant factor which bars the issuance of a writ of certiorari
in favor of petitioner and against public respondents herein. It is precisely this for which
prevents the Court from departing from the general application of the rules enunciated
above.

A cursory reading of the assailed orders issued by public respondent Minister Maceda
of the MNR which were ed by the Office of the President, will disclose public policy
consideration which effectively forestall judicial interference in the case at bar,

Public respondents herein, upon whose shoulders rests the task of implementing the
policy to develop and conserve the country's natural resources, have indicated an
ongoing department evaluation of all timber license agreements entered into, and
permits or licenses issued, under the previous dispensation. In fact, both the executive
and legislative departments of the incumbent administration are presently taking stock
of its environmental policies with regard to the utilization of timber lands and developing
an agenda for future programs for their conservation and rehabilitation.

The ongoing administrative reassessment is apparently in response to the renewed and

growing global concern over the despoliation of forest lands and the utter disregard of
their crucial role in sustaining a balanced ecological system. The legitimacy of such
concern can hardly be disputed, most especially in this country. The Court takes judicial
notice of the profligate waste of the country's forest resources which has not only
resulted in the irreversible loss of flora and fauna peculiar to the region, but has
produced even more disastrous and lasting economic and social effects. The delicate
balance of nature having been upset, a vicious cycle of floods and droughts has been
triggered and the supply of food and energy resources required by the people seriously
depleted.

While there is a desire to harness natural resources to amass profit and to meet the
country's immediate financial requirements, the more essential need to ensure future
generations of Filipinos of their survival in a viable environment demands effective and
circumspect action from the government to check further denudation of whatever
remains of the forest lands. Nothing less is expected of the government, in view of the
clear constitutional command to maintain a balanced and healthful ecology. Section 16
of Article II of the 1987 Constitution provides:

SEC. 16. The State shall protect and promote the right of the people to a balanced and
healthful ecology in accord with the rhythm and harmony of nature.

Thus, while the administration grapples with the complex and multifarious problems
caused by unbridled exploitation of these resources, the judiciary will stand clear. A long
line of cases establish the basic rule that the courts will not interfere in matters which
are addressed to the sound discretion of government agencies entrusted with the
regulation of activities coming under the special technical knowledge and training of
such agencies [See Espinosa v. Makalintal, 79 Phil. 134 (1947); Coloso v. Board of
Accountancy, 92 Phil. 938 (1953); Pajo v. Ago, 108 Phil. 905 (1960); Suarez v. Reyes,
G.R. No. L-19828, February 28, 1963, 7 SCRA 461; Ganitano v. Secretary of
Agriculture and Natural Resources, G. R. No. L-21167, March 31, 1966, 16 SCRA 543;
Villegas v. Auditor General, G.R. No. L-21352, November 29, 1966, 18 SCRA 877;
Manuel v. Villena, G.R. No. L-28218, February 27, 1971, 37 SCRA 745; Lacuesta v.
Herrera, G.R. No. L-33646, January 28, 1975, 62 SCRA 115; Lianga Bay Logging Co.,
Inc. v. Enage, G.R. No. L-30637, July 16, 1987, 152 SCRA 80]. More so where, as in
the present case, the interests of a private logging company are pitted against that of
the public at large on the pressing public policy issue of forest conservation. For this
Court recognizes the wide latitude of discretion possessed by the government in
determining the appropriate actions to be taken to preserve and manage natural
resources, and the proper parties who should enjoy the privilege of utilizing these
resources [Director of Forestry v. Munoz, G.R. No. L-24796, June 28, 1968, 23 SCRA
1183; Lim, Sr. v. The Secretary of Agriculture and Natural Resources, G.R. No. L-
26990, August 31, 1970, 34 SCRA 751]. 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. L-24548, October 27, 1983, 125
SCRA 302].

In fine, the legal precepts highlighted in the foregoing discussion more than suffice to
justify the Court's refusal to interfere in the DENR evaluation of timber licenses and
permits issued under the previous regime, or to pre-empt the adoption of appropriate
corrective measures by the department.
Nevertheless, the Court cannot help but express its concern regarding alleged
irregularities in the issuance of timber license agreements to a number of logging
concessionaires.

The grant of licenses or permits to exploit the country's timber resources, if done in
contravention of the procedure outlined in the law, or as a result of fraud and undue
influence exerted on department officials, is indicative of an arbitrary and whimsical
exercise of the State's power to regulate the use and exploitation of forest resources.
The alleged practice of bestowing "special favors" to preferred individuals, regardless of
merit, would be an abuse of this power. And this Court will not be a party to a flagrant
mockery of the avowed public policy of conservation enshrined in the 1987 Constitution.
Therefore, should the appropriate case be brought showing a clear grave abuse of
discretion on the part of officials in the DENR and related bureaus with respect to the
implementation of this public policy, the Court win not hesitate to step in and wield its
authority, when invoked, in the exercise of judicial powers under the Constitution
[Section 1, Article VIII].

However, petitioner having failed to make out a case showing grave abuse of discretion
on the part of public respondents herein, the Court finds no basis to issue a writ of
certiorari and to grant any of the affirmative reliefs sought.

WHEREFORE, the present petition is DISMISSED.

SO ORDERED.

Fernan, C.J., Gutierrez Jr. and Bidin, JJ., concur.

SECOND DIVISION

[G.R. No. 111107.  January 10, 1997]

LEONARDO A. PAAT, in his capacity as Officer-in-Charge (OIC), Regional Executive Director

(RED), Region 2 and JOVITO LAYUGAN, JR., in his capacity as Community Environment and
Natural Resources Officer (CENRO), both of the Department of Environment and Natural
Resources (DENR), petitioners, vs. COURT OF APPEALS, HON. RICARDO A. BACULI in
his capacity as Presiding Judge of Branch 2, Regional Trial Court at Tuguegarao, Cagayan, and
SPOUSES BIENVENIDO and VICTORIA DE GUZMAN, respondents.

DECISION

TORRES, JR., J.:

Without violating the principle of exhaustion of administrative remedies, may an action for
replevin prosper to recover a movable property which is the subject matter of an administrative
forfeiture proceeding in the Department of Environment and Natural Resources pursuant to
Section 68-A of P. D. 705, as amended, entitled The Revised Forestry Code of the Philippines?
Are the Secretary of DENR and his representatives empowered to confiscate and forfeit
conveyances used in transporting illegal forest products in favor of the government?

These are two fundamental questions presented before us for our resolution.

The controversy on hand had its incipiency on May 19, 1989 when the truck of private
respondent Victoria de Guzman while on its way to Bulacan from San Jose, Baggao, Cagayan,
was seized by the Department of Environment and Natural Resources (DENR, for brevity)
personnel in Aritao, Nueva Vizcaya because the driver could not produce the required documents
for the forest products found concealed in the truck.  Petitioner Jovito Layugan, the Community
Environment and Natural Resources Officer (CENRO) in Aritao, Cagayan, issued on May 23,
1989 an order of confiscation of the truck and gave the owner thereof fifteen (15) days within
which to submit an explanation why the truck should not be forfeited.  Private respondents,
however, failed to submit the required explanation.  On June 22, 1989, Regional Executive
Director Rogelio Baggayan of DENR sustained  petitioner Layugan’s action of confiscation and 
ordered the  forfeiture of the truck invoking  Section 68-A of Presidential Decree No. 705 as
amended by Executive Order No. 277.  Private respondents filed a letter of reconsideration dated
June 28, 1989 of the June 22, 1989 order of Executive Director Baggayan, which was, however,
denied in a subsequent order of July 12, 1989. Subsequently, the case was brought by the
petitioners to the Secretary of DENR pursuant to private respondents’ statement in their letter
dated June 28, 1989 that in case their letter for reconsideration would be denied then “this letter
should be considered as an appeal to the Secretary.” Pending resolution however of the appeal, a
suit for replevin, docketed as Civil Case 4031, was filed by the private respondents against
petitioner Layugan and Executive Director Baggayan with the Regional Trial Court, Branch 2 of
Cagayan, which issued a writ ordering the return of the truck to private respondents. Petitioner
Layugan and Executive Director Baggayan filed a motion to dismiss with the trial court
contending, inter alia, that private respondents had no cause of action for their failure to exhaust
administrative remedies. The trial court denied the motion to dismiss in an order dated December
28, 1989. Their motion for reconsideration having been likewise denied, a petition for certiorari
was filed by the petitioners with the respondent Court of Appeals which sustained the trial
court’s order ruling that the question involved is purely a legal question. Hence, this present
petition, with prayer for temporary restraining order and/or preliminary injunction, seeking to
reverse the decision of the respondent Court of Appeals was filed by the petitioners on
September 9, 1993.  By virtue of the Resolution dated September 27, 1993, the prayer for the
issuance of temporary restraining order of petitioners was granted by this Court.

Invoking the doctrine of exhaustion of administrative remedies, petitioners aver that the trial
court could not legally entertain the suit for replevin because the truck was under administrative
seizure proceedings pursuant to Section 68-A of P.D. 705, as amended by E.O. 277. Private
respondents, on the other hand, would seek to avoid the operation of this principle asserting that
the instant case falls within the exception of the doctrine upon the justification that (1) due
process was violated because they were not given the chance to be heard, and (2) the seizure and
forfeiture was unlawful on the grounds:  (a) that the Secretary of DENR and his representatives
have no authority to confiscate and forfeit conveyances utilized in transporting illegal forest
products, and (b) that the truck as admitted by petitioners was not used in the commission of the
crime.
Upon a thorough and delicate scrutiny of the records and relevant jurisprudence on the matter,
we are of the opinion that the plea of petitioners for reversal is in order.

This Court in a long line of cases has consistently held that before a party is allowed to seek the
intervention of the court, it is a pre-condition that he should have availed of all the means of
administrative processes afforded him.  Hence, if a remedy within the administrative machinery
can still be resorted to by giving the administrative officer concerned every opportunity to decide
on a matter that comes within his jurisdiction then such remedy should be exhausted first before
court’s judicial power can be sought. The premature invocation of court’s intervention is fatal to
one’s cause of action. Accordingly, absent any finding of waiver or estoppel the case is
susceptible of dismissal for lack of cause of action. This doctrine of exhaustion of administrative
remedies was not without its practical and legal reasons, for one thing, availment of
administrative remedy entails lesser expenses and provides for a speedier disposition of
controversies.  It is no less true to state that the courts of justice for reasons of comity and
convenience will shy away from a dispute until the system of administrative redress has been
completed and complied with so as to give the administrative agency concerned every
opportunity to correct its error and to dispose of the case.  However, we are not amiss to reiterate
that the principle of exhaustion of administrative remedies as tested by a battery of cases is not
an ironclad rule. This doctrine  is a relative one and its flexibility is called upon by the 
peculiarity and uniqueness of the factual and circumstantial settings of a case.  Hence, it is
disregarded (1) when there is a violation of due process, (2) when the issue involved is purely a
legal question, (3) when the administrative action is patently illegal amounting to lack or excess
of jurisdiction, (4) when there is estoppel on the part of the administrative agency concerned, (5)
when there is irreparable injury, (6) when the respondent is a department secretary whose acts as
an alter ego of the President bears the implied and assumed approval of the latter, (7) when to
require exhaustion of administrative remedies would be unreasonable, (8) when it would amount
to a nullification of a claim, (9) when the subject matter is a private land in land case
proceedings, (10) when the rule does not provide a plain, speedy and adequate remedy, and (11)
when there are circumstances indicating the urgency of judicial intervention.

In the case at bar, there is no question  that the controversy was pending before the Secretary of
DENR when it was forwarded to him following the denial by the petitioners of the motion for
reconsideration of private respondents through the order of July 12, 1989.  In their letter of
reconsideration dated June 28, 1989, private respondents clearly recognize the presence of an
administrative forum to which they seek to avail, as they did avail, in the resolution of their
case.  The letter, reads, thus:

“xxx

If this motion for reconsideration does not merit your favorable action, then this letter should be
considered as an appeal to the Secretary.”

It was easy to perceive then that the private respondents looked up to the Secretary for the review
and disposition  of their case.  By appealing to him, they acknowledged the existence of an
adequate and plain remedy still available and open to them in the ordinary course of the law.
Thus, they cannot now, without violating the principle of exhaustion of administrative remedies,
seek court’s intervention by filing an action for replevin for the grant of their relief during the
pendency of an administrative proceedings.

Moreover, it is important to point out that the enforcement of forestry laws, rules and regulations
and the protection, development and management of forest lands fall within the primary and
special responsibilities of the Department of Environment and Natural Resources. By the very
nature of its function, the DENR should be given a free hand unperturbed by judicial intrusion to
determine a controversy which is well within its jurisdiction.  The assumption by the trial court,
therefore, of the replevin suit filed by private respondents constitutes an unjustified
encroachment  into the domain of the administrative agency’s prerogative. The doctrine of
primary jurisdiction does not warrant a court to arrogate unto itself the authority to resolve a
controversy the jurisdiction over which is initially lodged with an administrative body of special
competence. In Felipe Ismael, Jr. and Co. vs. Deputy Executive Secretary, which was reiterated
in the recent case of Concerned Officials of MWSS vs. Vasquez, this Court held:

“Thus, while the administration grapples with the complex and multifarious problems caused by
unbriddled exploitation of these resources, the judiciary will stand clear. A long line of cases
establish the basic rule that the courts will not interfere in matters which are addressed to the
sound discretion of government agencies entrusted with the regulation of activities coming under
the special technical knowledge and training of such agencies.”

To  sustain the claim of private respondents would in effect bring the instant controversy beyond
the pale of the principle of exhaustion of administrative remedies and fall within the ambit of
excepted cases heretofore stated.  However, considering the circumstances prevailing in this
case,  we can not but rule out these assertions of private respondents to be without merit.  First,
they argued that there was violation of due process because they did not receive the May 23,
1989 order of confiscation of petitioner Layugan. This contention has no leg to stand on. Due
process does not necessarily mean or require a hearing, but simply an opportunity or right to be
heard. One may be heard , not solely by verbal presentation but also, and perhaps many times
more creditably and practicable than oral argument, through pleadings. In administrative
proceedings moreover, technical rules of procedure and evidence are not strictly applied;
administrative process cannot be fully equated with due process in its strict judicial sense.
Indeed, deprivation of due process cannot be successfully invoked where a party was given the
chance to be heard on his motion for reconsideration, as in the instant case, when private
respondents were undisputedly given the opportunity to present their side when they filed a letter
of reconsideration dated June 28, 1989 which was, however, denied in an order of July 12, 1989
of Executive Director Baggayan. In Navarro III vs. Damasco, we ruled that :

“The essence of due process is simply an opportunity to be heard, or as applied to administrative

proceedings, an opportunity to explain one’s side or an opportunity to seek a reconsideration of
the action or ruling complained of. A formal or trial type hearing is not at all times and in all
instances essential. The requirements are satisfied when the parties are afforded fair and
reasonable opportunity to explain their side of the controversy at hand. What is frowned upon is
the absolute lack of notice or hearing.”
Second, private respondents imputed the patent illegality of seizure and forfeiture of the truck 
because the administrative officers of the DENR allegedly have no power to perform these acts
under the law. They insisted that only the court is authorized to confiscate and forfeit
conveyances used in transporting illegal forest products as can be gleaned from the second
paragraph of Section 68 of P.D. 705, as amended by E.O. 277. The pertinent provision reads as
follows:

“SECTION 68. xxx

xxx

The court shall further order the confiscation in favor of the government of the timber or any
forest products cut, gathered, collected, removed, or possessed, as well as the machinery,
equipments, implements and tools illegaly [sic] used in the area where the timber or forest
products are found.” (Underline ours)

A reading, however, of the law persuades us not to go along with private respondents’ thinking
not only because the aforequoted provision apparently does not mention nor include
“conveyances” that can be the subject of confiscation by the courts, but to a large extent, due to
the fact that private respondents’ interpretation of the subject provision unduly restricts the clear
intention of the  law and inevitably reduces the other provision of Section  68-A , which is
quoted herein below:

“SECTION 68-A. Administrative Authority of the Department or His Duly Authorized

Representative To Order Confiscation. In all cases of violation of this Code or other forest laws,
rules and regulations, the Department Head or his duly authorized representative, may order the
confiscation of any forest products illegally cut, gathered, removed, or possessed or abandoned,
and all conveyances used either by land, water or air in the commission of the offense and to
dispose of the same in accordance with pertinent laws, regulations and policies on the matter.”
(Underline ours)

It is, thus, clear from the foregoing provision that the Secretary and his duly authorized
representatives are given the authority to confiscate and forfeit any  conveyances utilized in
violating the Code or other forest laws, rules and regulations. The phrase “to dispose of the
same” is broad enough to cover  the act of forfeiting   conveyances in favor of the government.
The only limitation is that it should be made “in accordance with pertinent laws, regulations or
policies on the matter.”  In the construction of statutes, it must be read in such a way as to give
effect to the purpose projected in the statute. Statutes should be construed in the light of the
object to be achieved and the evil or mischief to be suppressed, and they should be given such
construction as will advance the object, suppress the mischief, and secure the benefits intended.
In this wise, the observation of the Solicitor General is significant, thus:

“But precisely because of the need to make forestry laws ‘more responsive to present situations
and realities’ and in view of the ‘urgency to conserve the remaining resources of the country,’
that the government opted to add Section 68-A. This amendatory provision is an administrative
remedy totally separate and distinct from criminal proceedings. More than anything else, it is
intended to supplant the inadequacies that characterize enforcement of forestry laws through
criminal actions. The preamble of EO 277-the law that added Section 68-A to PD 705-is most
revealing:

‘WHEREAS, there is an urgency to conserve the remaining forest resources of the country for
the benefit and welfare of the present and future generations of Filipinos;

WHEREAS, our forest resources may be effectively conserved and protected through the
vigilant enforcement and implementation of our forestry laws, rules and regulations;

WHEREAS, the implementation of our forestry laws suffers from technical difficulties, due to
certain inadequacies in the penal provisions of the Revised Forestry Code of the Philippines; and

WHEREAS, to overcome this difficulties, there is a need to penalize certain acts more
responsive to present situations and realities;’

It is interesting to note that Section 68-A is a new provision authorizing the DENR to confiscate,
not only ‘conveyances,’ but forest products as well. On the other hand, confiscation of forest
products by the ‘court’ in a criminal action has long been provided for in Section 68. If as private
respondents insist, the power on confiscation cannot be exercised except only through the court
under Section 68, then Section 68-A would have no purpose at all. Simply put, Section 68-A
would not have provided any solution to the problem perceived in EO 277, supra.”

Private respondents, likewise, contend that the seizure was illegal because the petitioners
themselves admitted in the Order dated July 12, 1989 of Executive Director Baggayan  that the
truck of private respondents was not used in the commission of the crime. This order, a copy of
which was given to and received by the counsel of private respondents, reads in part , viz. :

“xxx while it is true that the truck of your client was not used by her in the commission of the
crime, we uphold your claim that the truck owner is not liable for the crime and in no case could
a criminal case be filed against her as provided under Article 309 and 310 of the Revised Penal
Code. xxx”

We observed that private respondents misread the content of the aforestated order and obviously
misinterpreted the intention of petitioners. What is  contemplated by the petitioners when they
stated that the truck "was not used in the commission of the crime" is that it was not used in the
commission of the crime of theft, hence, in no case can a criminal action be filed against the
owner thereof for violation of Article 309 and 310 of the Revised Penal Code. Petitioners did not
eliminate the possibility that the truck was being used in the commission of another crime, that
is, the breach of Section 68 of P.D.705 as amended by E.O. 277.  In the same order of July 12,
1989, petitioners pointed out:

“xxx However, under Section 68 of P.D.705 as amended and further amended by Executive
Order No.277 specifically provides for the confiscation of the conveyance used in the transport
of forest products not covered by the required legal documents. She may not have been involved
in the cutting and gathering of the product in question but the fact that she accepted the goods for
a fee or fare the same is therefor liable. xxx”

Private respondents, however, contended that there is no crime defined and punishable under
Section 68 other than qualified theft, so that, when petitioners admitted in the July 12, 1989 order
that private respondents could not be charged for theft as provided for under Articles 309 and
310 of the Revised Penal Code, then necessarily private respondents could not have committed
an act constituting a crime under Section 68.  We disagree.  For clarity, the provision of Section
68 of P.D. 705 before its amendment by E.O. 277 and the provision of Section 1 of E.O. No.277
amending the aforementioned Section 68 are reproduced herein, thus:

“SECTION 68. Cutting, gathering and/or collecting timber or other products without license. -
Any person who shall cut , gather , collect , or remove timber or other forest products from any
forest land, or timber from alienable and disposable public lands, or from private lands, without
any authority under a license agreement, lease, license or permit, shall be guilty of qualified theft
as defined and punished under Articles 309 and 310 of the Revised Penal Code xxx.”
(Underscoring ours; Section 68, P.D.705 before its amendment by   E.O.277 )

“SECTION 1. Section 68 of Presidential Decree No.705, as amended, is hereby amended to read

as follows:

‘Section 68. Cutting, gathering and/or collecting timber or other forest products without license.
-Any person who shall cut, gather, collect, remove timber or other forest products from any
forest land, or timber from alienable or disposable public land, or from private land, without any
authority, or possess timber or other forest products without the legal documents as required
under existing forest laws and regulations, shall be punished with the penalties imposed under
Articles 309 and 310 of the Revised Penal Code xxx."  (Underscoring ours; Section 1, E.O No.
277 amending Section 68, P.D. 705 as amended)

With the introduction of Executive Order No. 277 amending Section 68 of P.D. 705, the act of
cutting, gathering, collecting, removing, or possessing forest products without authority
constitutes a distinct offense independent now from the crime of theft under Articles 309 and 310
of the Revised Penal Code, but the penalty to be imposed is that provided for under Article 309
and 310 of the Revised Penal Code. This is  clear from the language of Executive Order No. 277
when it eliminated the phrase “ shall be guilty of qualified theft as defined and punished under
Articles 309 and 310 of the Revised Penal Code ” and inserted the words “ shall be punished
with the penalties imposed under Article 309 and 310 of the Revised Penal Code ”. When the
statute is clear and explicit, there is hardly  room for any extended court ratiocination or
rationalization of the law.

From the foregoing disquisition, it is clear that a suit for replevin can not be sustained against the
petitioners for the subject truck taken and retained by them for administrative forfeiture
proceedings in pursuant to Section 68-A of the P. D. 705, as amended. Dismissal of the replevin
suit for lack of cause of action in view of the private respondents’ failure to exhaust
administrative remedies should have been the proper course of action by the lower court instead
of assuming jurisdiction over the case and consequently issuing the writ ordering the return of
the truck. Exhaustion of the remedies in the administrative forum, being a condition precedent
prior to one’s recourse to the courts and more importantly, being an element of private
respondents’ right of action, is too significant to be waylaid by the lower court.

It is worth stressing at this point, that a suit for replevin is founded solely on the claim that the
defendant wrongfully withholds the property sought to be recovered. It lies to recover possession
of personal chattels that are unlawfully detained. “To detain” is defined as to mean “to hold or
keep in custody,” and it has been held that there is tortuous taking whenever there is an unlawful
meddling with the property,  or an exercise or claim of dominion over it, without any pretense of
authority or right; this, without manual seizing of the property is sufficient. Under the Rules of
Court, it is indispensable in replevin proceedings, that the plaintiff must show by his own
affidavit that he is entitled to the possession of property, that the property is wrongfully detained
by the defendant, alleging the cause of detention, that the same has not been taken for tax
assessment, or seized under execution, or attachment, or if so seized, that it is exempt from such
seizure, and the actual value of the property. Private respondents miserably failed to convince
this Court that a wrongful detention of the subject truck obtains in the instant case.  It should be
noted that the truck was seized by the petitioners because it was transporting forest products with
out the required permit of the DENR in manifest contravention of Section 68 of  P.D. 705 as
amended by E.O 277.  Section 68-A of P.D. 705, as amended, unquestionably warrants the
confiscation as well as the disposition by the Secretary of DENR or his duly authorized
representatives of the conveyances used in violating the provision of forestry laws. Evidently, the
continued possession or detention of the truck by the petitioners for administrative forfeiture
proceeding is legally permissible, hence , no wrongful detention exists in the case at bar.

Moreover, the suit for replevin is never intended as a procedural tool to question the orders of
confiscation and forfeiture issued by the DENR in pursuance to the authority given under
P.D.705, as amended. Section 8 of the said law is explicit that actions taken by the Director of
the Bureau of Forest Development concerning the enforcement of the provisions of the said law
are subject to  review by the Secretary of DENR and that courts may not review the decisions of
the Secretary except through a special civil action for certiorari or prohibition. It reads :

SECTION  8 .  REVIEW -  All actions and decisions of the Director are subject to review, motu
propio or upon appeal of any person aggrieved thereby, by the Department Head whose decision
shall be final and executory after the lapse of thirty (30) days from the receipt of the aggrieved
party of said decision, unless appealed to the President in accordance with Executive Order No.
19, Series of 1966. The Decision of the Department Head may not be reviewed by the courts
except through a special civil action for certiorari or prohibition.

WHEREFORE, the Petition is GRANTED; the Decision of the respondent Court of Appeals
dated October 16, 1991 and its Resolution dated July 14, 1992 are hereby SET ASIDE AND
REVERSED; the Restraining Order promulgated on September 27, 1993 is hereby made
permanent; and the Secretary of DENR is directed to resolve the controversy with utmost
dispatch.

SO ORDERED.
Regalado, (Chairman), Romero, Puno, and Mendoza, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC
 

G.R. No. 104988 June 18, 1996

MUSTANG LUMBER, INC., petitioner,

vs.
HON. COURT OF APPEALS, HON. FULGENCIO S. FACTORAN, JR., Secretary,
Department of Environment and Natural Resources (DENR), and ATTY. VINCENT
A. ROBLES, Chief, Special Actions and Investigations Division, DENR,
respondents.

G.R. No. 106424 June 18, 1996

PEOPLE OF THE PHILIPPINES, petitioner,

vs.
HON. TERESITA DIZON-CAPULONG, in her capacity as the Presiding Judge,
Regional Trial Court, National Capital Judicial Region, Branch 172, Valenzuela,
Metro Manila, and RI CHUY PO, respondents.

G.R. No. 123784 June 18, 1996

MUSTANG LUMBER, INC., petitioner,

vs.
HON. COURT OF APPEALS, ATTY. VINCENT A. ROBLES, Chief, Special Actions
and Investigation Division, Department of Environment and Natural Resources
(DENR), ATTY. NESTOR V. GAPUSAN, TIRSO P. PARIAN, JR., and FELIPE H.
CALLORINA, JR., respondents.

DAVIDE, JR., J.:p

The first and third case, G.R. No. 104988 and G.R. No. 123784, were originally
assigned to the Second and Third Divisions of the Court, respectively. They were
subsequently consolidated with the second, a case of the Court en banc.

Petitioner, a domestic corporation with principal office at Nos. 1350-1352 Juan Luna
Street, Tondo, Manila, and with a Lumberyard at Fortune Street, Fortune Village, Paseo
de Blas, Valenzuela, Metro Manila, was duly registered as a lumber dealer with the
Bureau of Forest Development (BFD) under Certificate of Registration No. NRD-4-
092590-0469. Its permit as such was to expire on 25 September 1990.

Respondent Secretary Fulgencio S. Factoran, Jr., and respondent Atty. Vincent A.

Robles were, during all the time material to these cases, the Secretary of the
Department of Environment and Natural Resources (DENR) and the Chief of the
Special Actions and Investigation Division (SAID) of the DENR, respectively.

The material operative facts are as follows:

On 1 April 1990, acting on an information that a huge stockpile of narra flitches, shorts,
and slabs were seen inside the lumberyard of the petitioner in Valenzuela, Metro
Manila, the SAID organized a team of foresters and policemen and sent it to conduct
surveillance at the said lumberyard. In the course thereof, the team members saw
coming out from the lumberyard the petitioner's truck, with Plate No. CCK-322, loaded
with lauan and almaciga lumber of assorted sizes and dimensions. Since the driver
could not produce the required invoices and transport documents, the team seized the
truck together with its cargo and impounded them at the DENR compound at Visayas
Avenue, Quezon City. 1 The team was not able to gain entry into the premises because
of the refusal of the owner. 2

On 3 April 1990, the team was able to secure a search warrant from Executive Judge
Adriano R. Osorio of the Regional Trial Court (RTC) of Valenzuela, Metro Manila. By
virtue thereof, the team seized on that date from the petitioner's lumberyard four
truckloads of narra shorts, trimmings, and slabs; a negligible number of narra lumber;
and approximately 200,000 board feet of lumber and shorts of various species including
almaciga and supa. 3

On 4 April 1990, the team returned to the premises of the petitioner's lumberyard in
Valenzuela and placed under administrative seizure the remaining stockpile of
almaciga, supa, and lauan lumber with a total volume of 311,000 board feet because
the petitioner failed to produce upon demand the corresponding certificate of lumber
origin, auxiliary invoices, tally sheets, and delivery receipts from the source of the
invoices covering the lumber to prove the legitimacy of their source and origin. 4

Parenthetically, it may be stated that under an administrative seizure the owner retains
the physical possession of the seized articles. Only an inventory of the articles is taken
and signed by the owner or his representative. The owner is prohibited from disposing
them until further orders. 5

On 10 April 1990, counsel for the petitioner sent a letter to Robles requesting an
extension of fifteen days from 14 April 1990 to produce the required documents
covering the seized articles because some of them, particularly the certificate of lumber
origin, were allegedly in the Province of Quirino Robles denied the motion on the ground
that the documents being required from the petitioner must accompany the lumber or
forest products placed under seizure. 6
On 11 April 1990, Robles submitted his memorandum-report recommending to
Secretary Factoran the following:

1. Suspension and subsequent cancellation of the lumber Dealer's Permit of Mustang

Lumber, Inc. for operating an unregistered lumberyard and resaw mill and possession of
Almaciga Lumber (a banned specie) without the required documents;

2. Confiscation of the lumber seized at the Mustang Lumberyard including the truck with
Plate No. CCK-322 and the lumber loaded herein [sic] now at the DENR compound in the
event its owner fails to submit documents showing legitimacy of the source of said lumber
within ten days from date of seizure;

3. Filing of criminal charges against Mr. Ri Chuy Po, owner of Mustang Lumber Inc. and
Mr. Ruiz, or if the circumstances warrant for illegal possession of narra and almaciga
lumber and shorts if and when recommendation no. 2 pushes through;

4. Confiscation of Trucks with Plate No. CCS-639 and CDV. 458 as well as the lumber
loaded therein for transport lumber using "recycled" documents. 7

On 23 April 1990, Secretary Factoran issued an order suspending immediately the

petitioner's lumber-dealer's permit No. NRD-4-092590-0469 and directing the petitioner
to explain in writing within fifteen days why its lumber-dealer's permit should not be
cancelled.

On the same date, counsel for the petitioner sent another letter to Robles informing the
latter that the petitioner had already secured the required documents and was ready to
submit them. None, however, was submitted. 8

On 3 May 1990, Secretary Factoran issued another order wherein, after reciting the
events which took place on 1 April and 3 April 1990, he ordered "CONFISCATED in
favor of the government to be disposed of in accordance with law" the approximately
311,000 board feet of lauan, supa, and almaciga lumber, shorts, and sticks found inside
the petitioner's lumberyard. 9

On 11 July 1990, the petitioner filed with the RTC of Manila a petition for certiorari and
prohibition with a prayer for a restraining order or preliminary injunction against
Secretary Fulgencio S. Factoran, Jr., and Atty. Vincent A. Robles. The case
(hereinafter, the FIRST CIVIL CASE) was docketed as Civil Case No. 90-53648 and
assigned to Branch 35 of the said court. The petitioner questioned therein (a) the
seizure on 1 April 1990, without any search and seizure order issued by a judge, of its
truck with Plate No. CCK-322 and its cargo of assorted lumber consisting of apitong,
tanguile, and lauan of different sizes and dimensions with a total value of P38,000.00;
and (b) the orders of Secretary Factoran of 23 April 1990 for lack of prior notice and
hearing and of 3 May 1990 for violation of Section 2, Article III of the Constitution.

On 17 September 1990, in response to reports that violations of P.D. No. 705 (The
Revised Forestry Code of the Philippines), as amended, were committed and acting
upon instruction of Robles and under Special Order No. 897, series of 1990, a team of
DENR agents went to the business premises of the petitioner located at No. 1352 Juan
Luna Street, Tondo, Manila. The team caught the petitioner operating as a lumber
dealer although its lumber-dealer's permit had already been suspended or 23 April
1990. Since the gate of the petitioner's lumberyard was open, the team went inside and
saw an owner-type jeep with a trailer loaded with lumber. Upon investigation, the team
was informed that the lumber loaded on the trailer was to be delivered to the petitioner's
customer. It also came upon the sales invoice covering the transaction. The members of
the team then introduced themselves to the caretaker, one Ms. Chua, who turned out to
be the wife of the petitioner's president and general manager, Mr. Ri Chuy Po, who was
then out of town. The team's photographer was able to take photographs of the
stockpiles of lumber including newly cut ones, fresh dust around sawing or cutting
machineries and equipment, and the transport vehicles loaded with lumber. The team
thereupon effected a constructive seizure of approximately 20,000 board feet of lauan
lumber in assorted sizes stockpiled in the premises by issuing a receipt
therefor. 10

As a consequence of this 17 September 1990 incident, the petitioner filed with the RTC
of Manila a petition for certiorari and prohibition. The case (hereinafter, the SECOND
CIVIL CASE) was docketed as Civil Case No. 90-54610 and assigned to Branch 24 of
the said court.

In the meantime, Robles filed with the Department of Justice (DOJ) a complaint against
the petitioner's president and general manager, Ri Chuy Po, for violation of Section 68
of P.D. No. 705, as amended by E.O. No. 277. After appropriate preliminary
investigation, the investigating prosecutor, Claro Arellano, handed down a resolution 11
whose dispositive portion reads:

WHEREFORE, premises considered, it is hereby recommended that an information be

filed against respondent Ri Chuy Po for illegal possession of approximately 200,000 bd.
ft. of lumber consisting of almaciga and supa and for illegal shipment of almaciga and
lauan in violation of Sec. 68 of PD 705 as amended by E.O. 277, series of 1987.

It is further recommended that the 30,000 bd. ft. of narra shorts, trimmings and slabs
covered by legal documents be released to the rightful owner, Malupa. 12

This resolution was approved by Undersecretary of Justice Silvestre H. Bello III, who
served as Chairman of the Task Force on Illegal Logging." 13

On the basis of that resolution, an information was filed on 5 June 1991 by the DOJ with
Branch 172 of the RTC of Valenzuela, charging Ri Chuy Po with the violation of Section
58 of P.D. No. 705, as amended, which was docketed as Criminal Case No. 324-V-91
(hereinafter, the CRIMINAL CASE). The accusatory portion of the information reads as
follows:

That on or about the 3rd day of April 1990, or prior to or subsequent thereto, within the
premises and vicinity of Mustang Lumber, Inc. in Fortune Village, Valenzuela, Metro
Manila, and within the jurisdiction of this Honorable Court, the above-named accused, did
then and there wilfully, feloniously and unlawfully have in his possession truckloads of
 almaciga and lauan and approximately 200,000 bd. ft. of lumber and shorts of various
species including almaciga and supa, without the legal documents as required under
existing forest laws and
regulations. 14

On 7 June 1991, Branch 35 of the RTC of Manila rendered its decision 15 in the FIRST
CIVIL CASE, the dispositive portion of which reads:

WHEREFORE, judgment in this case is rendered as follows:

1. The Order of Respondent Secretary of the DENR, the Honorable Fulgencio S.

Factoran, Jr., dated 3 May 1990 ordering the confiscation in favor of the Government the
approximately 311,000 board feet of Lauan, supa, end almaciga Lumber, shorts and
sticks, found inside and seized from the Lumberyard of the petitioner at Fortune Drive,
Fortune Village, Paseo de Blas, Valenzuela, Metro Manila, on April 4, 1990 (Exhibit 10),
is hereby set aside and vacated, and instead the respondents are required to report and
bring to the Hon. Adriano Osorio, Executive Judge, Regional Trial Court, NCR,
Valenzuela, Metro Manila, the said 311,000 board feet of Lauan, supa and almaciga
Lumber, shorts and sticks, to be dealt with as directed by Law;

2. The respondents are required to initiate and prosecute the appropriate action before
the proper court regarding the Lauan and almaciga lumber of assorted sizes and
dimensions Loaded in petitioner's truck bearing Plate No. CCK-322 which were seized on
April 1, 1990;

3. The Writ of Preliminary Injunction issued by the Court on August 2, 1990 shall be
rendered functus oficio upon compliance by the respondents with paragraphs 1 and 2 of
this judgment;.

4. Action on the prayer of the petitioner that the Lauan, supa and almaciga lumber, shorts
and sticks mentioned above in paragraphs 1 and 2 of this judgment be returned to said
petitioner is withheld in this case until after the proper court has taken cognizance and
determined how those Lumber, shorts and sticks should be disposed of; and

5. The petitioner is ordered to pay the costs.

SO ORDERED.

In resolving the said case, the trial court held that the warrantless search and seizure on
1 April 1990 of the petitioner's truck, which was moving out from the petitioner's
lumberyard in Valenzuela, Metro Manila, loaded with large volumes of lumber without
covering document showing the legitimacy of its source or origin did not offend the
constitutional mandate that search and seizure must be supported by a valid warrant.
The situation fell under one of the settled and accepted exceptions where warrantless
search and seizure is justified, viz., a search of a moving vehicle. 16 As to the seizure of
a large volume of almaciga, supa, and lauan lumber and shorts effected on 4 April
1990, the trial court ruled that the said seizure was a continuation of that made the
previous day and was still pursuant to or by virtue of the search warrant issued by
Executive Judge Osorio whose validity the petitioner did not even question. 17 And,
although the search warrant did not specifically mention almaciga, supa, and lauan
lumber and shorts, their seizure was valid because it is settled that the executing officer
is not required to ignore contrabands observed during the conduct of the
search. 18

The trial court, however, set aside Secretary Factoran's order of 3 May 1990 ordering
the confiscation of the seized articles in favor of the Government for the reason that
since the articles were seized pursuant to the search warrant issued by Executive
Judge Osorio they should have been returned to him in compliance with the directive in
the warrant.

As to the propriety of the 23 April 1990 order of Secretary Factoran, the trial court ruled
that the same had been rendered moot and academic by the expiration of the
petitioner's lumber dealer's permit on 25 September 1990, a fact the petitioner admitted
in its memorandum.

The petitioner forthwith appealed from the decision in the FIRST CIVIL CASE to the
Court of Appeals, which docketed the appeal as CA-G.R. SP No. 25510.

On 7 July 1991, accused Ri Chuy Po filed in the CRIMINAL CASE a Motion to Quash
and/or to Suspend Proceedings based on the following grounds: (a) the information
does not charge an offense, for possession of lumber, as opposed to timber, is not
penalized in Section 68 of P.D. No. 705, as amended, and even granting arguendo that
lumber falls within the purview of the said section, the same may not be used in
evidence against him for they were taken by virtue of an illegal seizure; and (b) Civil
Case No. 90-53648 of Branch 35 of the RTC of Manila, the FIRST CIVIL CASE, then
pending before the Court of Appeals, which involves the legality of the seizure, raises a
prejudicial question. 19

The prosecution opposed the motion alleging that lumber is included in Section 68 of
P.D. No. 705, as amended, and possession thereof without the required legal
documents is penalized therein. It referred to Section 3.2 of DENR Administrative Order
No. 19, series of 1989, for the definitions of timber and lumber, and then argued that
exclusion of lumber from Section 68 would defeat the very purpose of the law, i.e., to
minimize, if not halt, illegal logging that has resulted in the rapid denudation of our forest
resources. 20

In her order of 16 August 1991 in the CRIMINAL CASE, 21 respondent Judge Teresita
Dizon-Capulong granted the motion to quash and dismissed the case on the ground
that "possession of lumber without the legal documents required by forest laws and
regulations is not a crime. 22

Its motion for reconsideration having been denied in the order of 18 October 1991, 23 the
People filed a petition for certiorari with this Court in G.R. No. 106424, wherein it
contends that the respondent Judge acted with grave abuse of discretion in granting the
motion to quash and in dismissing the case.
On 29 November 1991, the Court of Appeals rendered a decision 24 in CA-G.R. SP No.
25510 dismissing for lack of merit the petitioner's appeal from the decision in the FIRST
CIVIL CASE and affirming the trial court's rulings on the issues raised. As to the claim
that the truck was not carrying contraband articles since there is no law punishing the
possession of lumber, and that lumber is not timber whose possession without the
required legal documents is unlawful under P.D. No. 705, as amended, the Court of
Appeals held:

This undue emphasis on lumber or the commercial nature of the forest product involved
has always been foisted by those who claim to be engaged in the legitimate business of
lumber dealership. But what is important to consider is that when appellant was required
to present the valid documents showing its acquisition and lawful possession of the
lumber in question, it failed to present any despite the period of extension granted to it. 25

The petitioner's motion to reconsider the said decision was denied by the Court of
Appeals in its resolution of 3 March 1992. 26 Hence, the petitioner came to this Court by
way of a petition for review on certiorari in G.R. No. 104988, which was filed on 2 May
1992. 27

On 24 September 1992, Branch 24 of the RTC of Manila handed down a decision in the
SECOND CIVIL CASE dismissing the petition for certiorari and prohibition because (a)
the petitioner did not exhaust administrative remedies; (b) when the seizure was made
on 17 September 1990 the petitioner could not lawfully sell lumber, as its license was
still under suspension; (c) the seizure was valid under Section 68-A of P.D. No. 705, as
amended; and (d) the seizure was justified as a warrantless search and seizure under
Section 80 of P.D. No. 705, as amended.

The petitioner appealed from the decision to the Court of Appeals, which docketed the
appeal as CA-G.R. SP No. 33778.

In its decision 28 of 31 July 1995, the Court of Appeals dismissed the petitioner's appeal
in CA-G.R. SP No. 33778 for lack of merit and sustained the grounds relied upon by the
trial court in dismissing the SECOND CIVIL CASE. Relying on the definition of "lumber"
by Webster, viz., "timber or logs, especially after being prepared for the market," and by
the Random House Dictionary of the English Language, viz., "wood, esp. when suitable
or adapted for various building purposes," the respondent Court held that since wood is
included in the definition of forest product in Section 3(q) of P.D. No. 705, as amended,
lumber is necessarily included in Section 68 under the term forest product.

The Court of Appeals further emphasized that a forest officer or employee can seize the
forest product involved in a violation of Section 68 of P.D. No. 705 pursuant to Section
80 thereof, as amended by P.D. No. 1775, which provides in part as follows:

Sec. 80. Arrest, Institution of Criminal Actions. -- A forest officer or employee of the
Bureau or any personnel of the Philippine Constabulary/Integrated National Police shall
arrest even without warrant any person who has committed or is committing in his
presence any of the offenses defined in this chapter. He shall also seize and confiscate,
in favor of the Government, the tools and equipment used in committing the offense, or
 the forest products cut, gathered or taken by the offender in the process of committing
the offense.

Among the offenses punished in the chapter referred to in said Section 80 are the
cutting, gathering, collection, or removal of timber or other forest products or possession
of timber or other forest products without the required legal documents.

Its motion to reconsider the decision having been denied by the Court of Appeals in the
resolution of 6 February 1996, the petitioner filed with this Court on 27 February 1996 a
petition for review on certiorari in G.R. No. 123784.

We shall now resolve these three cases starting with G.R. No. 106424 with which the
other two were consolidated.

G.R. No. 106424

The petitioner had moved to quash the information in Criminal Case No. 324-V-91 on
the ground that it does not charge an offense. Respondent Judge Dizon-Capulong
granted the motion reasoning that the subject matter of the information in the CRIMINAL
CASE is LUMBER, which is neither "timber" nor "other forest product" under Section 68
of P.D. No. 705, as amended, and hence, possession thereof without the required legal
documents is not prohibited and penalized under the said section.

Under paragraph (a), Section 3, Rule 117 of the Rules of Court, an information may be
quashed on the ground that the facts alleged therein do not constitute an offense. It has
been said that "the test for the correctness of this ground is the sufficiency of the
averments in the information, that is, whether the facts alleged, if hypothetically
admitted, constitute the elements of the
offense, 29 and matters aliunde will not be considered." Anent the sufficiency of the
information, Section 6, Rule 110 of the Rules of Court requires, inter alia, that the
information state the acts or omissions complained of as constituting the offense.

Respondent Ri Chuy Po is charged with the violation of Section 68 of P.D. No. 705, as
amended by E.O. No. 277, which provides:

Sec. 68. Cutting, Gathering and/or collecting Timber, or Other Forest Products Without
License. -- Any person who shall cut, gather, collect, remove timber or other forest
products from any forest land, or timber from alienable or disposable public land, or from
private land, without any authority, or possess timber or other forest products without the
legal documents as required under existing forest laws and regulations, shall be punished
with the penalties imposed under Articles 309 and 310 of the Revised Penal Code:
Provided, That in the case of partnerships, associations, or corporations, the officers who
ordered the cutting, gathering, collection or possession shall be liable, and if such officers
are aliens, they shall, in addition to the penalty, be deported without further proceedings
on the part of the Commission on Immigration and Deportation.

The Court shall further order the confiscation in favor of the government of the timber or
any forest products cut, gathered, collected, removed, or possessed, as well as the
 machinery, equipment, implements and tools illegally used in the area where the timber
or forest products are found.

Punished then in this section are (1) the cutting, gathering, collection, or removal
of timber or other forest products from the places therein mentioned without any
authority; and (b) possession of timber forest products without the legal
documents as required under existing forest laws and regulations.

Indeed, the word lumber does not appear in Section 68. But conceding ex gratia that
this omission amounts to an exclusion of lumber from the section's coverage, do the
facts averred in the information in the CRIMINAL CASE validly charge a violation of the
said section?

A cursory reading of the information readily leads us to an infallible conclusion that

lumber is not solely its subject matter. It is evident therefrom that what are alleged to be
in the possession of the private respondent, without the required legal documents, are
truckloads of

(1) almaciga and lauan; and

(2) approximately 200,000 bd. ft. of lumber and shorts of various species
including almaciga and supa.

The "almaciga and lauan" specifically mentioned in no. (1) are not described as
"lumber." They cannot refer to the "lumber" in no. (2) because they are separated
by the words "approximately 200,000 bd. ft." with the conjunction "and," and not
with the preposition "of." They must then be raw forest products or, more
specifically, timbers under Section 3(q) of P.D. No. 705, as amended, which
reads:

Sec. 3. Definitions. --

xxx xxx xxx

(q) Forest product means timber, firewood, bark, tree top, resin, gum,
wood, oil, honey, beeswax, nipa, rattan, or other forest plant, the
associated water, fish game, scenic, historical, recreational and
geological resources in forest lands.

It follows then that lumber is only one of the items covered by the information. The
public and the private respondents obviously miscomprehended the averments in the
information. Accordingly, even if lumber is not included in Section 68, the other items
therein as noted above fall within the ambit of the said section, and as to them, the
information validly charges an offense.

Our respected brother, Mr. Justice Jose C. Vitug, suggests in his dissenting opinion that
this Court go beyond the four corners of the information for enlightenment as to whether
the information exclusively refers to lumber. With the aid of the pleadings and the
annexes thereto, he arrives at the conclusion that "only lumber has been envisioned in
the indictment."

The majority is unable to subscribe to his view. First, his proposition violates the rule
that only the facts alleged in the information vis-a-vis the law violated must be
considered in determining whether an information charges an offense.

Second, the pleadings and annexes he resorted to are insufficient to justify his
conclusion. On the contrary, the Joint Affidavit of Melencio Jalova, Jr., and Araman
Belleng, which is one of the annexes he referred to, 30 cannot lead one to infer that what
the team seized was all lumber. Paragraph 8 thereof expressly states:

8. That when inside the compound, the team found approximately four
(4) truckloads of narra shorts, trimmings and slabs and a negligible
amount of narra lumber, and approximately 200,000 bd. ft. of lumber and
shorts of various species including almaciga and supa which are
classified as prohibited wood species. (emphasis supplied)

In the same vein, the dispositive portion of the resolution 31 of the investigating
prosecutor, which served as the basis for the filing of the information, does not
limit itself to lumber; thus:

WHEREFORE, premises considered, it is hereby recommended that an information be

filed against respondent Ri Chuy Po for illegal possession of 200,000 bd. ft. of lumber
consisting of almaciga and supa and for illegal shipment of almaciga and lauan in
violation of Sec. 63 of PD 705 as amended by E.O. 277, series of 1987. (emphasis
supplied)

The foregoing disquisitions should not, in any manner, be construed as an affirmance of

the respondent Judge's conclusion that lumber is excluded from the coverage of
Section 68 of P.D. No. 705, as amended, and thus possession thereof without the
required legal documents is not a crime. On the contrary, this Court rules that such
possession is penalized in the said section because lumber is included in the term
timber.

The Revised Forestry Code contains no definition of either timber or lumber. While the
former is included in forest products as defined in paragraph (q) of Section 3, the latter
is found in paragraph (aa) of the same section in the definition of "Processing plant,"
which reads:

(aa) Processing plant is any mechanical set-up, machine or combination

of machine used for the processing of logs and other forest raw materials
into lumber, veneer, plywood, wallbond, blockboard, paper board, pulp,
paper or other finished wood products.

This simply means that lumber is a processed log or processed forest raw
material. Clearly, the Code uses the term lumber in its ordinary or common
usage. In the 1993 copyright edition of Webster's Third New International
 Dictionary, lumber is defined, inter alia, as "timber or logs after being prepared for
the market." 32 Simply put, lumber is a processed log or timber.

It is settled that in the absence of legislative intent to the contrary, words and phrases
used in a statute should be given their plain, ordinary, and common usage meaning. 33
And insofar as possession of timber without the required legal documents is concerned,
Section 68 of P.D. No. 705, as amended, makes no distinction between raw or
processed timber. Neither should we. Ubi lex non distinguere debemus.

Indisputably, respondent Judge Teresita Dizon-Capulong of Branch 172 of the RTC of

Valenzuela, Metro Manila, committed grave abuse of discretion in granting the motion to
quash the information in the CRIMINAL CASE and in dismissing the said case.

G.R. No. 104988

We find this petition to be without merit. The petitioner has miserably failed to show that
the Court of Appeals committed any reversible error in its assailed decision of 29
November 1991.

It was duly established that on 1 April 1990, the petitioner's truck with Plate No. CCK-
322 was coming out from the petitioner's lumberyard loaded with lauan and almaciga
lumber of different sizes and dimensions which were not accompanied with the required
invoices and transport documents. The seizure of such truck and its cargo was a valid
exercise of the power vested upon a forest officer or employee by Section 80 of P.D.
No. 705, as amended by P.D. No. 1775. Then, too, as correctly held by the trial court
and the Court of Appeals in the FIRST CIVIL CASE, the search was conducted on a
moving vehicle. Such a search could be lawfully conducted without a search warrant.

Search of a moving vehicle is one of the five doctrinally accepted exceptions to the
constitutional mandate 34 that no search or seizure shall be made except by virtue of a
warrant issued by a judge after personally determining the existence of probable cause.
The other exceptions are (3) search as an incident to a lawful arrest, (2) seizure of
evidence in plain view, (3) customs searches, and (4) consented warrantless search. 35

We also affirm the rulings of both the trial court and the Court of Appeals that the search
on 4 April 1990 was a continuation of the search on 3 April 1990 done under and by
virtue of the search warrant issued on 3 April 1990 by Executive Judge Osorio. Under
Section 9, Rule 126 of the Rules of Court, a search warrant has a lifetime of ten days.
Hence, it could be served at any time within the said period, and if its object or purpose
cannot be accomplished in one day, the same may be continued the following day or
days until completed. Thus, when the search under a warrant on one day was
interrupted, it may be continued under the same warrant the following day, provided it is
still within the ten-day period. 36

As to the final plea of the petitioner that the search was illegal because possession of
lumber without the required legal documents is not illegal under Section 68 of P.D. No.
705, as amended, since lumber is neither specified therein nor included in the term
forest product, the same hardly merits further discussion in view of our ruling in G.R.
No. 106424.

G.R. No. 123784

The allegations and arguments set forth in the petition in this case palpally fail to shaw
prima facie that a reversible error has been committed by the Court of Appeals in its
challenged decision of 31 July 1995 and resolution of 6 February 1996 in CA-G.R. SP
No. 33778. We must, forthwith, deny it for utter want of merit. There is no need to
require the respondents to comment on the petition.

The Court of Appeals correctly dismissed the petitioner's appeal from the judgment of
the trial court in the SECOND CIVIL CASE. The petitioner never disputed the fact that
its lumber-dealer's license or permit had been suspended by Secretary Factoran on 23
April 1990. The suspension was never lifted, and since the license had only a lifetime of
up to 25 September 1990, the petitioner has absolutely no right to possess, sell, or
otherwise dispose of lumber. Accordingly, Secretary Factoran or his authorized
representative had the authority to seize the Lumber pursuant to Section 68-A of P.D.
No. 705, as amended, which provides as follows:

Sec. 68-A Administrative Authority of the Department Head or his Duly Authorized
Representative to Order Confiscation. -- In all cases of violations of this Code or other
forest laws, rules and regulations, the Department Head or his duly authorized
representative may order the confiscation of any forest products illegally cut, gathered,
removed, or possessed or abandoned. . . .

The petitioner's insistence that possession or sale of lumber is not penalized must also
fail view of our disquisition and ruling on the same issue in G.R. No. 106424. Besides,
the issue is totally irrelevant in the SECOND CIVIL CASE which involves administrative
seizure as a consequence of the violation of the suspension of the petitioner's license
as lumber dealer.

All told then, G.R. No. 104988 and G.R. No. 123784 are nothing more than rituals to
cover up blatant violations of the Revised Forestry Code of the Philippines (P.D. No.
705), as amended. They are presumably trifling attempts to block the serious efforts of
the DENR to enforce the decree, efforts which deserve the commendation of the public
in light of the urgent need to take firm and decisive action against despoilers of our
forests whose continuous destruction only ensures to the generations to come, if not the
present, an inheritance of parched earth incapable of sustaining life. The Government
must not tire in its vigilance to protect the environment by prosecuting without fear or
favor any person who dares to violate our laws for the utilization and protection of our
forests.

WHEREFORE, judgment is hereby rendered

 1. (a) GRANTING the petition in G.R. No. 106424; (b) SETTING ASIDE
and ANNULLING, for having been rendered with grave abuse of
discretion, the challenged orders of 16 August 1991 and 18 October 1991
of respondent Judge Teresita Dizon-Capulong, Branch 172, Regional Trial
Court of Valenzuela, Metro Manila, in Criminal Case No. 324-V-91,
entitled "People of the Philippines vs. Ri Chuy Po"; (c) REINSTATING the
information in the said criminal case; and (d) DIRECTING the respondent
Judge or her successor to hear and decide the case with purposeful
dispatch; and

2. DENYING the petitions in G.R. No. 104988 and in G. R. No. 123784 for
utter failure of the petitioner to show that the respondent Court of Appeals
committed any reversible error in the challenged decisions of 29
November 1991 in CA-G.R. SP No. 25510 in the FIRST CIVIL CASE and
of 31 July 1995 in CA-G.R. SP No. 33778 on the SECOND CIVIL CASE.

Costs against the petitioner in each of these three cases.

SO ORDERED.

Narvasa, C.J., Padilla, Regalado, Romero, Bellosillo, Melo, Puno, Kapunan, Mendoza,
Francisco, Hermosisima, Jr., Panganiban and Torres, Jr., JJ., concur.

Separate Opinions
 

VITUG, J., dissenting:

The prosecution seeks, in its petition for review on certiorari in G.R. No. 106424, the
annulment of the 16th August 1991 Order of respondent Judge granting the motion of
private respondent Ri Chuy Po to quash the information that has charged him with the
Violation of Section 68 of Presidential Decree ("PD") No. 705 (otherwise known as the
Forestry Reform Code, as amended by Executive Order ["EO"] No. 277 1) and the 18th
October 1991 Order denying petitioner's motion for reconsideration.

The information of 04 June 1991, containing the alleged inculpatory facts against private
respondent, reads:
 The undersigned State Prosecutor hereby accuses RI CHUY PO of the crime of violation
of Section 68, Presidential Decree No. 705, as amended by Executive Order No. 277,
Series of 1987, committed as follows:

"That on or about the 3rd day of April 1990, or prior to or subsequent

thereto, within the premises and vicinity of Mustang Lumber, Inc. in
Fortune Drive, Fortune Village, Valenzuela, Metro Manila, and within the
jurisdiction of this Honorable Court, the above-named accused, did then
and there wilfully, feloniously and unlawfully, have in his possession
truckloads of almaciga and lauan and approximately 200,000 bd. ft. of
lumber and shorts of various species including almaciga and supa,
without the legal documents as required under existing forest laws and
regulations.

"CONTRARY TO LAW." 2

Private respondent, on 10 July 1991, moved for the quashal of the information on the
ground that the facts comprising the charge did not amount to a criminal offense, or in
the alternative, to suspend the proceedings on the ground of a prejudicial question,
private respondent having formally challenged the legality of the seizure of the lumber in
question in a civil case before the Regional Trial Court ("RTC") of Manila, Branch 35,
and now pending with the Court of Appeals.

On 16 August 1991, the trial court promulgated its now questioned order granting the
motion of private respondent to quash the information. It ruled that, unlike the
possession of "timber or other forest products" (without supporting legal documents),
the mere possession of "lumber" had not itself been declared a criminal offense under
Section 68 of PD 705. Petitioner moved for a reconsideration insisting that lumber
should be held to come within the purview of "timber" defined by Section 2.26 (b) of
DENR Administrative Order No. 50, Series of 1986. The motion for reconsideration was
denied; hence, the petition for review on certiorari filed by the prosecution before this
Court.

Private respondent maintains (1) that PD 705 distinguishes "timber" and "other forest
products," on the one hand, from "lumber" and "other finished wood products," on the
other, and that the possession of lumber of any specie, size or dimension, whether it be
lauan, tanguile, apitong, almaciga, supa, or narra, is not under that law declared a
criminal offense; (2) that DENR Administrative Order No. 74, Series of 1987, totally
bans the cutting, handling and disposition of almaciga trees but that possession of
almaciga lumber is not considered illegal; (3) that while under DENR Administrative
Order No. 78, Series of 1987, the cutting or gathering of narra and other premium
hardwood species (supa included) is prohibited, it does not, however, make possession
of premium hardwood lumber (narra and supa included) punishable by mere inference;
and (4) that Bureau of Forest Development Circular No. 10, Series of 1983, clarified by
DENR Memorandum No. 12, Series of 1988, requires a certificate of lumber origin
("CLO") only on lumber shipped outside the province, city or the greater Manila area to
another province or city or, in lieu of a CLO, an invoice to accompany a lumber
shipment from legitimate sources if the origin and destination points are both within the
greater Manila area or within the same province or city, and not, like in the instant case,
where the lumber is not removed from the lumber yard.

Petitioner counters (1) that the almaciga, supa and lauan lumber products found in the
compound of Mustang Lumber, Inc., are included in Section 68, PD 705, as amended
by EO No. 277, the possession of which without requisite legal documents is penalized
under Section 3.2 of DENR Administrative Order No. 19, Series of 1989, dated 17
March 1989, that defines "lumber" to be a --

. . . solid wood not further manufactured other than sawing, resawing, kiln-drying and
passing lengthwise through a standard planing machine, including boules or unedged
lumber;

and "timber," under Section 1.11 of DENR Administrative Order No. 80, Series of
1987, dated 28 December 1987, to be --

. . . any piece of wood having an average diameter of at least 15 centimeters and at 1.5
meters long, except all mangrove species which in all cases, shall be considered as
timber regardless of size;

which may either be --

a) Squared timber (or) timber squared with an ax or other similar

mechanical hard tools in the forest and which from the size of the piece
and the character of the wood is obviously unfit for use in that form (Sec.
1.10 DENR Administrative Order No. 80, Series of 1987, dated
December 28, 1987); or

b) Manufactured timber (or) timber other than round and squared timber
shall include logs longitudinally sawn into pieces, even if only to facilitate
transporting or hauling, as well as all sawn products, all timber hewn or
otherwise worked to approximate its finished form, such as house posts,
ship keels, mine props, ties, trolly poles, bancas, troughs, bowls, cart
wheels, table tops and other similar articles (Sec. 2.26, DENR
Administrative Order No. 50, Series of 1986, dated November 11, 1986)
--

(2) that to exclude "lumber" under Section 68 of PD 705 would be to defeat the
purpose of the law, i.e., to stop or minimize illegal logging that has resulted in the
rapid denudation of forest resources; (3) that the claim of private respondent that
a CLO is required only upon the transportation or shipment of lumber, and not
when lumber is merely stored in a compound, contravenes the provisions of
Section 68 of PD 705; (4) that the failure to show any CLO or other legal
document required by administrative issuances raises the presumption that the
lumber has been shipped or received from illegal sources; and, (5) that the
decision of the RTC in Civil Case No. 90-53648 sustaining the legality of the
seizure has rendered moot any possible prejudicial issue to the instant case.
The real and kernel issue then brought up by the parties in G.R. No. 106424, as well as
in the two consolidated cases (G.R. No. 104988 and G.R. No. 123784), is whether or
not the term "timber or other forest products" the possession of which without the
required legal documents would be a criminal offense under Section 68 of PD 705 also
covers "lumber".

Prefatorily, I might point out that the information, charging private respondent with the
possession without required legal documents of ". . . truckloads of almaciga and lauan
and approximately 200,000 bd. ft. of lumber and shorts of various species including
almaciga and supa, . . ." has failed to specify whether the "almaciga" and "lauan" there
mentioned refer to "timber" or "lumber" or both. A perusal of the pleadings and annexes
before the Court, however, would indicate that only lumber has been envisioned in the
indictment. For instance --

(a) The pertinent portions of the joint affidavit of Melencio Jalova, Jr., and Araman
Belleng, 3 subscribed and sworn to before State Prosecutor Claro Arellano, upon which
basis the latter recommended the filing of the information, read, as follows:

"That during the weekend, (April 1 and 2, 1990) the security detail from
our agency continued to monitor the activities inside the compound and
in fact apprehended and later on brought to the DENR compound a six-
wheeler truck loaded with almaciga and lauan lumber after the truck
driver failed to produce any documents covering the shipment;

xxx xxx xxx

"That we are executing this affidavit in order to lodge a criminal complaint

against Mr. Ri Chuy Po, owner of Mustang Lumber for violation of
Section 68, P.D. 705, as amended by Executive Order 277, having in its
possession prohibited wood and wood products without the required
documents." 4 (Emphasis supplied)

(b) The resolution, dated 14 May 1991, issued by Investigating Prosecutor Arellano,
approved by Undersecretary of Justice Silvestre Bello III, confirmed that --

" . . . On April 1 and 2 1990, the security detail continued to monitor the
activities inside the compound and in fact apprehended a six-wheeler
truck coming from the compound of Mustang loaded with almaciga and
lauan lumber without the necessary legal documents covering the
shipment." 5

(c) The 23rd April 1990 Order of then DENR Secretary Fulgencio Factoran, suspending
the Certificate of Registration No. NRD-4-092590-0469 of Mustang Lumber, Inc., was
issued because of, among other things, the latter's possession of almaciga lumber
without the required documents. 6

(d) The subsequent 03rd May 1990 Order, likewise issued by Secretary Factoran,
authorized the confiscation of approximately 311,000 board feet of lauan, supa and
almaciga lumber, shorts and sticks of various sizes and dimensions owned by Mustang
Lumber, Inc. 7
 (e) The complaint filed on 27 July 1990 by Vincent A. Robles, Chief, PIC/SAID, DENR,
before the Department of Justice, Manila, against private respondent was for possession
of lauan and almaciga lumber without required legal documents, 8 in violation of P.D. 705,
as amended by EO 277.

(f) The prosecution, in its opposition to private respondent's motion to quash, sought to
argue that the possession of "almaciga, supa and lauan lumber found in the compound of
Mustang Lumber, Inc., 9 was covered by the penal provisions of P.D. 705, as amended,
pursuant to Section 32 of DENR Administrative Order No. 19, Series of 1989.

Indeed, the instant petition itself questions the quashal order of the court a quo solely on
the thesis that "lumber" should be held to be among the items that are banned under
Section 68 of PD 705.

While generally factual matters outside of the information should not weigh in resolving
a motion to quash following the standing rule that the allegations of the information must
alone be considered and should not be challenged, there should, however, be no
serious objections to taking into account additional and clarificatory facts which,
although not made out in the information, are admitted, conceded, or not denied by the
parties. As early as the case of People vs. Navarro, 10 reiterated in People vs. Dela
Rosa, 11 the Court has had occasion to explain --

. . . It would seem to be pure technicality to hold that in the consideration of the motion
the parties and the judge were precluded from considering facts which the fiscal admitted
to be true, simply because they were not described in the complaint. Of course, it may be
added that upon similar motions the court and the fiscal are not required to go beyond the
averments of the information, nor is the latter to be inveigled into a premature and risky
revelation of his evidence. But we see no reason to prohibit the fiscal from making, in all
candor, admissions of undeniable facts, because the principle can never be sufficiently
reiterated that such official's role is to see that justice is done: not that all accused are
convicted, but that the guilty are justly punished. Less reason can there be to prohibit the
court from considering those admissions, and deciding accordingly, in the interest of a
speedy administration of justice.

And now on the main substantive issue.

Section 68 of PD 705, as amended by EO No. 277, reads:

Sec. 68. Cutting, Gathering and/or Collecting Timber or Other Forest Products Without
License. -- Any person who shall cut, gather, collect, remove timber or other forest
products from any forest land, or timber from alienable or disposable public land, or from
private land, without any authority, or possess timber or other forest products without the
legal documents as required under existing forest laws and regulations, shall be punished
with the penalties imposed under Articles 309 and 310 of the Revised Penal Code:
Provided, That in the case of partnerships, associations, or corporations, the officers who
ordered the cutting, gathering, collection or possession shall be liable, and if such officers
are aliens, they shall, in addition to the penalty, be deported without further proceedings
on the part of the Commission on Immigration and Deportation.

The Court shall further order the confiscation in favor of the government of the timber or
any forest products cut, gathered, collected, removed, or possessed, as well as the
 machinery, equipment, implements and tools illegally used in the area where the timber
or forest products are found.

I agree with the court a quo that the coverage of Section 68, PD 705, as so amended, is
explicit, and it is confined to "timber and other forest products." Section 3(q) of the
decree defines "forest product" to mean --

(q) . . . timber, pulpwood, firewood, bark, tree top, resin, gum, wood, oil, honey, beeswax,
nipa, rattan, or other forest growth such as grass, shrub, and flowering plant, the
associated water, fish, game, scenic, historical, recreational and geologic resources in
forest lands (emphasis supplied);

and distinguishes it, in correlation with Section 3(aa) of the law, from that which
has undergone processing. In defining a "processing plant," this section of the
decree holds it to refer to --

. . . any mechanical set-up, machine or combination of machine used for the processing
of logs and other forest raw materials into lumber veneer, plywood, wallboard, block-
board, paper board, pulp, paper or other finished wood products (emphasis supplied).

In fine, timber is so classified, under Section 3(q) of the law, as a forest product,
while lumber has been categorized, under Section 3(aa), among the various
finished wood products.

The various DENR issuances, cited by the Solicitor General, to wit:

(1) Section 1.11 of the DENR Order No. 80, dated 28 December 1987, Series of 1987,
which defines "timber" to be --

. . . any piece of wood having an average diameter of at least 15 centimeters and at 1.5
meters long, except all mangrove species which in all cases, shall be considered as
timber regardless of size; 12

(2) Section 3.2 of DENR Administrative Order No. 19, dated 17 March 1989, Series of
1989, stating that "lumber" includes --

. . . solid wood not further manufactured other than sawing, resawing, kiln-drying and
passing lengthwise through a standard planing machine, including boules or unedged
lumber;" and

(3) DENR Memorandum Order No. 36, Series of 1988, dated 06 May 1988, to the effect
that the term "forest products" shall include "lumber --

cannot, in my view, go beyond the clear language of the basic law.

While great weight is ordinarily accorded to an interpretation or construction of a statute

by the government agency called upon to implement the enactment, 13 the rule would
only be good, however, to the extent that such interpretation or construction is
congruous with the governing statute. 14 Administrative issuances can aptly carry the law
into effect 15 but it would be legal absurdity to allow such issuances to also have the
effect, particularly those which are penal in nature, of extending the scope of the law or
its plain
mandate. 16

Accordingly, and with respect, I vote to deny the petition in G.R. No. 106424, to grant
the petition in G.R. No. 104988 and to require comment on the petition in G.R. No.
123784. I must hasten to add, nevertheless, that I do appreciate the well-meant
rationale of DENR Memorandum Order No. 36, Series of 1988, for, indeed, the need for
preserving whatever remains of the country's forest reserves can never now be fully
emphasized. Until properly addressed and checked, the continued denudation of forest
resources, already known to be the cause of no few disasters, as well as of untold loss
of lives and property, could well be on end the expected order of the day. I, therefore,
join ail those who call for the passage of remedial legislation before the problem truly
becomes irreversible.

Separate Opinions

VITUG, J., dissenting:

The prosecution seeks, in its petition for review on certiorari in G.R. No. 106424, the
annulment of the 16th August 1991 Order of respondent Judge granting the motion of
private respondent Ri Chuy Po to quash the information that has charged him with the
Violation of Section 68 of Presidential Decree ("PD") No. 705 (otherwise known as the
Forestry Reform Code, as amended by Executive Order ["EO"] No. 277 1) and the 18th
October 1991 Order denying petitioner's motion for reconsideration.

The information of 04 June 1991, containing the alleged inculpatory facts against private
respondent, reads:

The undersigned State Prosecutor hereby accuses RI CHUY PO of the crime of violation
of Section 68, Presidential Decree No. 705, as amended by Executive Order No. 277,
Series of 1987, committed as follows:

"That on or about the 3rd day of April 1990, or prior to or subsequent

thereto, within the premises and vicinity of Mustang Lumber, Inc. in
Fortune Drive, Fortune Village, Valenzuela, Metro Manila, and within the
jurisdiction of this Honorable Court, the above-named accused, did then
and there wilfully, feloniously and unlawfully, have in his possession
truckloads of almaciga and lauan and approximately 200,000 bd. ft. of
lumber and shorts of various species including almaciga and supa,
without the legal documents as required under existing forest laws and
regulations.

"CONTRARY TO LAW." 2
Private respondent, on 10 July 1991, moved for the quashal of the information on the
ground that the facts comprising the charge did not amount to a criminal offense, or in
the alternative, to suspend the proceedings on the ground of a prejudicial question,
private respondent having formally challenged the legality of the seizure of the lumber in
question in a civil case before the Regional Trial Court ("RTC") of Manila, Branch 35,
and now pending with the Court of Appeals.

On 16 August 1991, the trial court promulgated its now questioned order granting the
motion of private respondent to quash the information. It ruled that, unlike the
possession of "timber or other forest products" (without supporting legal documents),
the mere possession of "lumber" had not itself been declared a criminal offense under
Section 68 of PD 705. Petitioner moved for a reconsideration insisting that lumber
should be held to come within the purview of "timber" defined by Section 2.26 (b) of
DENR Administrative Order No. 50, Series of 1986. The motion for reconsideration was
denied; hence, the petition for review on certiorari filed by the prosecution before this
Court.

Private respondent maintains (1) that PD 705 distinguishes "timber" and "other forest
products," on the one hand, from "lumber" and "other finished wood products," on the
other, and that the possession of lumber of any specie, size or dimension, whether it be
lauan, tanguile, apitong, almaciga, supa, or narra, is not under that law declared a
criminal offense; (2) that DENR Administrative Order No. 74, Series of 1987, totally
bans the cutting, handling and disposition of almaciga trees but that possession of
almaciga lumber is not considered illegal; (3) that while under DENR Administrative
Order No. 78, Series of 1987, the cutting or gathering of narra and other premium
hardwood species (supa included) is prohibited, it does not, however, make possession
of premium hardwood lumber (narra and supa included) punishable by mere inference;
and (4) that Bureau of Forest Development Circular No. 10, Series of 1983, clarified by
DENR Memorandum No. 12, Series of 1988, requires a certificate of lumber origin
("CLO") only on lumber shipped outside the province, city or the greater Manila area to
another province or city or, in lieu of a CLO, an invoice to accompany a lumber
shipment from legitimate sources if the origin and destination points are both within the
greater Manila area or within the same province or city, and not, like in the instant case,
where the lumber is not removed from the lumber yard.

Petitioner counters (1) that the almaciga, supa and lauan lumber products found in the
compound of Mustang Lumber, Inc., are included in Section 68, PD 705, as amended
by EO No. 277, the possession of which without requisite legal documents is penalized
under Section 3.2 of DENR Administrative Order No. 19, Series of 1989, dated 17
March 1989, that defines "lumber" to be a --

. . . solid wood not further manufactured other than sawing, resawing, kiln-drying and
passing lengthwise through a standard planing machine, including boules or unedged
lumber;

and "timber," under Section 1.11 of DENR Administrative Order No. 80, Series of
1987, dated 28 December 1987, to be --
 . . . any piece of wood having an average diameter of at least 15 centimeters and at 1.5
meters long, except all mangrove species which in all cases, shall be considered as
timber regardless of size;

which may either be --

a) Squared timber (or) timber squared with an ax or other similar

mechanical hard tools in the forest and which from the size of the piece
and the character of the wood is obviously unfit for use in that form (Sec.
1.10 DENR Administrative Order No. 80, Series of 1987, dated
December 28, 1987); or

b) Manufactured timber (or) timber other than round and squared timber
shall include logs longitudinally sawn into pieces, even if only to facilitate
transporting or hauling, as well as all sawn products, all timber hewn or
otherwise worked to approximate its finished form, such as house posts,
ship keels, mine props, ties, trolly poles, bancas, troughs, bowls, cart
wheels, table tops and other similar articles (Sec. 2.26, DENR
Administrative Order No. 50, Series of 1986, dated November 11, 1986)
--

(2) that to exclude "lumber" under Section 68 of PD 705 would be to defeat the
purpose of the law, i.e., to stop or minimize illegal logging that has resulted in the
rapid denudation of forest resources; (3) that the claim of private respondent that
a CLO is required only upon the transportation or shipment of lumber, and not
when lumber is merely stored in a compound, contravenes the provisions of
Section 68 of PD 705; (4) that the failure to show any CLO or other legal
document required by administrative issuances raises the presumption that the
lumber has been shipped or received from illegal sources; and, (5) that the
decision of the RTC in Civil Case No. 90-53648 sustaining the legality of the
seizure has rendered moot any possible prejudicial issue to the instant case.

The real and kernel issue then brought up by the parties in G.R. No. 106424, as well as
in the two consolidated cases (G.R. No. 104988 and G.R. No. 123784), is whether or
not the term "timber or other forest products" the possession of which without the
required legal documents would be a criminal offense under Section 68 of PD 705 also
covers "lumber".

Prefatorily, I might point out that the information, charging private respondent with the
possession without required legal documents of ". . . truckloads of almaciga and lauan
and approximately 200,000 bd. ft. of lumber and shorts of various species including
almaciga and supa, . . ." has failed to specify whether the "almaciga" and "lauan" there
mentioned refer to "timber" or "lumber" or both. A perusal of the pleadings and annexes
before the Court, however, would indicate that only lumber has been envisioned in the
indictment. For instance --

(a) The pertinent portions of the joint affidavit of Melencio Jalova, Jr., and Araman
Belleng, 3 subscribed and sworn to before State Prosecutor Claro Arellano, upon which
basis the latter recommended the filing of the information, read, as follows:
 "That during the weekend, (April 1 and 2, 1990) the security detail from
our agency continued to monitor the activities inside the compound and
in fact apprehended and later on brought to the DENR compound a six-
wheeler truck loaded with almaciga and lauan lumber after the truck
driver failed to produce any documents covering the shipment;

xxx xxx xxx

"That we are executing this affidavit in order to lodge a criminal complaint

against Mr. Ri Chuy Po, owner of Mustang Lumber for violation of
Section 68, P.D. 705, as amended by Executive Order 277, having in its
possession prohibited wood and wood products without the required
documents." 4 (Emphasis supplied)

(b) The resolution, dated 14 May 1991, issued by Investigating Prosecutor Arellano,
approved by Undersecretary of Justice Silvestre Bello III, confirmed that --

" . . . On April 1 and 2 1990, the security detail continued to monitor the
activities inside the compound and in fact apprehended a six-wheeler
truck coming from the compound of Mustang loaded with almaciga and
lauan lumber without the necessary legal documents covering the
shipment." 5

(c) The 23rd April 1990 Order of then DENR Secretary Fulgencio Factoran, suspending
the Certificate of Registration No. NRD-4-092590-0469 of Mustang Lumber, Inc., was
issued because of, among other things, the latter's possession of almaciga lumber
without the required documents. 6

(d) The subsequent 03rd May 1990 Order, likewise issued by Secretary Factoran,
authorized the confiscation of approximately 311,000 board feet of lauan, supa and
almaciga lumber, shorts and sticks of various sizes and dimensions owned by Mustang
Lumber, Inc. 7

(e) The complaint filed on 27 July 1990 by Vincent A. Robles, Chief, PIC/SAID, DENR,
before the Department of Justice, Manila, against private respondent was for possession
of lauan and almaciga lumber without required legal documents, 8 in violation of P.D. 705,
as amended by EO 277.

(f) The prosecution, in its opposition to private respondent's motion to quash, sought to
argue that the possession of "almaciga, supa and lauan lumber found in the compound of
Mustang Lumber, Inc., 9 was covered by the penal provisions of P.D. 705, as amended,
pursuant to Section 32 of DENR Administrative Order No. 19, Series of 1989.

Indeed, the instant petition itself questions the quashal order of the court a quo solely on
the thesis that "lumber" should be held to be among the items that are banned under
Section 68 of PD 705.

While generally factual matters outside of the information should not weigh in resolving
a motion to quash following the standing rule that the allegations of the information must
alone be considered and should not be challenged, there should, however, be no
serious objections to taking into account additional and clarificatory facts which,
although not made out in the information, are admitted, conceded, or not denied by the
parties. As early as the case of People vs. Navarro, 10 reiterated in People vs. Dela
Rosa, 11 the Court has had occasion to explain --

. . . It would seem to be pure technicality to hold that in the consideration of the motion
the parties and the judge were precluded from considering facts which the fiscal admitted
to be true, simply because they were not described in the complaint. Of course, it may be
added that upon similar motions the court and the fiscal are not required to go beyond the
averments of the information, nor is the latter to be inveigled into a premature and risky
revelation of his evidence. But we see no reason to prohibit the fiscal from making, in all
candor, admissions of undeniable facts, because the principle can never be sufficiently
reiterated that such official's role is to see that justice is done: not that all accused are
convicted, but that the guilty are justly punished. Less reason can there be to prohibit the
court from considering those admissions, and deciding accordingly, in the interest of a
speedy administration of justice.

And now on the main substantive issue.

Section 68 of PD 705, as amended by EO No. 277, reads:

Sec. 68. Cutting, Gathering and/or Collecting Timber or Other Forest Products Without
License. -- Any person who shall cut, gather, collect, remove timber or other forest
products from any forest land, or timber from alienable or disposable public land, or from
private land, without any authority, or possess timber or other forest products without the
legal documents as required under existing forest laws and regulations, shall be punished
with the penalties imposed under Articles 309 and 310 of the Revised Penal Code:
Provided, That in the case of partnerships, associations, or corporations, the officers who
ordered the cutting, gathering, collection or possession shall be liable, and if such officers
are aliens, they shall, in addition to the penalty, be deported without further proceedings
on the part of the Commission on Immigration and Deportation.

The Court shall further order the confiscation in favor of the government of the timber or
any forest products cut, gathered, collected, removed, or possessed, as well as the
machinery, equipment, implements and tools illegally used in the area where the timber
or forest products are found.

I agree with the court a quo that the coverage of Section 68, PD 705, as so amended, is
explicit, and it is confined to "timber and other forest products." Section 3(q) of the
decree defines "forest product" to mean --

(q) . . . timber, pulpwood, firewood, bark, tree top, resin, gum, wood, oil, honey, beeswax,
nipa, rattan, or other forest growth such as grass, shrub, and flowering plant, the
associated water, fish, game, scenic, historical, recreational and geologic resources in
forest lands (emphasis supplied);

and distinguishes it, in correlation with Section 3(aa) of the law, from that which
has undergone processing. In defining a "processing plant," this section of the
decree holds it to refer to --

. . . any mechanical set-up, machine or combination of machine used for the processing
of logs and other forest raw materials into lumber veneer, plywood, wallboard, block-
board, paper board, pulp, paper or other finished wood products (emphasis supplied).
 In fine, timber is so classified, under Section 3(q) of the law, as a forest product,
while lumber has been categorized, under Section 3(aa), among the various
finished wood products.

The various DENR issuances, cited by the Solicitor General, to wit:

(1) Section 1.11 of the DENR Order No. 80, dated 28 December 1987, Series of 1987,
which defines "timber" to be --

. . . any piece of wood having an average diameter of at least 15 centimeters and at 1.5
meters long, except all mangrove species which in all cases, shall be considered as
timber regardless of size; 12

(2) Section 3.2 of DENR Administrative Order No. 19, dated 17 March 1989, Series of
1989, stating that "lumber" includes --

. . . solid wood not further manufactured other than sawing, resawing, kiln-drying and
passing lengthwise through a standard planing machine, including boules or unedged
lumber;" and

(3) DENR Memorandum Order No. 36, Series of 1988, dated 06 May 1988, to the effect
that the term "forest products" shall include "lumber --

cannot, in my view, go beyond the clear language of the basic law.

While great weight is ordinarily accorded to an interpretation or construction of a statute

by the government agency called upon to implement the enactment, 13 the rule would
only be good, however, to the extent that such interpretation or construction is
congruous with the governing statute. 14 Administrative issuances can aptly carry the law
into effect 15 but it would be legal absurdity to allow such issuances to also have the
effect, particularly those which are penal in nature, of extending the scope of the law or
its plain
mandate. 16

Accordingly, and with respect, I vote to deny the petition in G.R. No. 106424, to grant
the petition in G.R. No. 104988 and to require comment on the petition in G.R. No.
123784. I must hasten to add, nevertheless, that I do appreciate the well-meant
rationale of DENR Memorandum Order No. 36, Series of 1988, for, indeed, the need for
preserving whatever remains of the country's forest reserves can never now be fully
emphasized. Until properly addressed and checked, the continued denudation of forest
resources, already known to be the cause of no few disasters, as well as of untold loss
of lives and property, could well be on end the expected order of the day. I, therefore,
join ail those who call for the passage of remedial legislation before the problem truly
becomes irreversible.

Footnotes
1 Rollo, G.R. 10493, 37-38.

2. Id., 40.

3 Rollo, G.R. No. 106424, 6.

4 Id., G.R. No. 104988, 38.

5 Id.

6 Id., 39.

7 Rollo, G.R. No. 104988, 39.

8 Id., 40.

9 Rollo, G.R. No. 10498 , 40-41.

10 Rollo, G.R. No. 12378, 26-27.

11 Id., G.R. No. 106424, 50-55 (Annex "I" of Petition).

12 Rollo, G.R. No. 106424, 54.

13 Id., 14.

14 Id., 32.

15 Id., G.R. No. 104988, 62. Per Judge Ramon P. Makasiar.

16 Citing People vs. Lo Ho Wing, 193 SCRA 122 [1991].

17 Citing Johnson vs. State, 146 Miss. 593.

18 Citing VARON, Searches, Seizures and Immunities, vol. I, 2 ed., 563-565, 568-570, which
gave the example that a search warrant authorizing the search for and seizure of a gun includes
the seizure of live shells found within the premises to be searched although not specifically
mentioned in the warrant; in other words, a departure from the command of the search warrant
describing what property may be seized thereunder is justified where there is a direct relation of
the additional articles seized to the primary purpose of the search.

19 Rollo, G.R. No. 10642, 33-35.

20 Id., 35.

21 Rollo, G.R. No. 106424, 32-39 (Annex "A" of Petition).

22 Id., 39.

23 Id., 40 (Annex "B" of Petition).

24 Id., G.R. No. 104988, 36. Per Chua, S., J., with Kapunan, S., and Victor, L., JJ., concurring.

25 Id., 43.

26 Rollo, G.R. No. 104988, 45.

27 Id., 10.

28 Id., G.R. No. 123784, 26, Per Carpio-Morales, C.,J., with Garcia, C., and Callejo, R., JJ.,
concurring.

29 FLORENZ D. REGALADO, Remedial Law Compendium, vol. 2, Seventh Revised ed. [1995],
392, citing People vs. Supnad, 7 SCRA 603 [1963]. See also VICENTE J. FRANCISCO, The
Revised Rules of Court (Criminal Procedure), 2nd ed. [1969] 579; MANUEL V. MORAN,
Comments of the Rules of Court, vol. 4 [1980], 222.

30 Rollo, G.R. No. 10642, 41-42 (Annex "C" of Petition).

31 Id., 50-55 (Annex "I" of Petition).

32 Page 1345.

33 RUBEN E. AGPALO, Statutory Construction, Second ed. [1990], 131.

34 Section 2, Article III of the Constitution, which reads:

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 shell 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 piece to be searched and the
persons or things to be seized.

35 People vs. Fernando, 239 SCRA 174 [1994]. In his book on Remedial Law, vol. 4 (Criminal
Procedure), 1992 ed.. 669, retired Justice Oscar M. Herrera of the Court of Appeals mentions a
sixth exception, viz., searched based on probable cause under extraordinary circumstances,
citing People vs. Posadas, 188 SCRA 288 [1990]; Valmonte vs. De Villa, 178 SCRA 211 [1989];
People vs. Maspil, 188 SCRA 751 [1990]; People vs. Sucro, 195 SCRA 388 [1991]; People vs.
Malmtedt, 198 SCRA 401 [1991].

36 FLORENZ D. REGALADO, Remedial Law Compendium, vol. 2, Seventh Revised Ed. [1995],
526, citing Uy Kheytin vs. Villareal 42 Phil. 886 [1920].

VITUG, J., separate opinion:

1 "AMENDING SECTION 68 OF PRESIDENTIAL DECREE (PD) NO. 705, AS AMENDED,

OTHERWISE KNOWN AS THE REVISED FORESTRY CODE OF THE PHILIPPINES, FOR THE
PURPOSE OF PENALIZING POSSESSION OF TIMBER OR OTHER FOREST PRODUCTS
WITHOUT THE LEGAL DOCUMENTS REQUIRED BY EXISTING FOREST LAWS,
AUTHORIZING THE CONFISCATION OF ILLEGALLY CUT, GATHERED, REMOVED AND
POSSESSED FOREST PRODUCTS, AND GRANTING REWARDS TO INFORMERS OF
VIOLATIONS OF FORESTRY LAWS, RULES AND REGULATIONS.
 2 Rollo, pp. 15-16.

3 Forester by profession and currently employed with the Personnel Investigation Committee,
Special Action and Investigation Division, Department of Environment and Natural Resources.
(Rollo, p. 41).

4 Rollo, pp. 41-42.

5 Rollo, p. 50.

6 Rollo, pp. 43-44.

7 Rollo, p. 45.

8 "I have the honor to file a complaint against Mr. Ri Chuy Po, the owner of Mustang Lumber,
Inc., with address at 1350-1352 Juan Luna St., Tondo, Manila for violation of the provisions of
P.D. 705 as amended by Executive Order 277 for having in his possession lauan and almaciga
lumber without the required documents." (Rollo, p.47.)

9 Rollo, p. 17.

10 75 Phil. 516, 518-519.

11 98 SCRA 190.

12 Rollo, p. 18.

13 See Enrique vs. Court of Appeals, 229 SCRA 180.

14 See Nestle Phils., Inc. vs. Court of Appeals, 203 SCRA 504.

15 See Manuel vs. General Auditing Office, 42 SCRA 660; Teoxon vs. Members of the Board of
Administrators, PVA, 33 SCRA 585.

16 See Manuel vs. General Auditing Office, supra.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

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. Castro-
Bartolome, 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-in-interest, 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, L-19535, 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 2 thru Susi in 1925 3 down to Herico in 1980, 4 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-in-interest, 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).<äre||anº•1àw> 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 re-established, 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.

Separate Opinions

GUTIERREZ, JR., J., concurring:

I reiterate my concurrence in Meralco v. Castro-Bartolome, and, therefore, dissent here.

TEEHANKEE, C.J., concurring:

I am honored by my brethren's judgment at bar that my dissenting opinion in the June,

1982 Meralco and Iglesia ni Cristo cases, 1 which is herein upheld, "expressed what is
the better. . . . and indeed the correct view." My dissent was anchored on the landmark
1909 case of Carino 2 through the 1925 case of Susi 3 and the long line of cases cited
therein to the latest 1980 case of Herico 4 that "it is established doctrine....... that an
open, continuous, adverse and public possession of a land of the public domain for the
period provided in the Public Land Act provision in force at the time (from July 26, 1894
in Susi under the old law [this period was reduced to 'at least thirty years immediately
preceding the filing of the application for confirmation of title' by amendment of
Commonwealth Act No. 141, equivalent to the period of acquisitive prescription 5 ]) by a
private individual personally and through his predecessors confers an effective title on
said possessor, whereby the land ceases to be land of the public domain and becomes
private property." I hereby reproduce the same by reference for brevity's sake. But since
we are reverting to the old above-cited established doctrine and precedents and
discarding the Meralco and Iglesia ni Cristo cases which departed therefrom in the
recent past, I feel constrained to write this concurrence in amplification of my views and
ratio decidendi.

Under the express text and mandate of the cited Act, such possessors "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. "

The Court thus held in Susi that under the presumption juris et de jure established in the
Act, the rightful possessor of the public land for the statutory period "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 certificate of title should be issued an order that said grant may be
sanctioned by the courts, an application therefore is sufficient . . . . 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 [and beyond
his authority to sell to any other person]. " 6

The root of the doctrine goes back to the pronouncement of Justice Oliver Wendell
Holmes for the U.S. Supreme Court in the 1909 case of Carino (the Igorot chief who
would have been deprived of ancestral family lands by the dismissal of his application
for registration) which reversed the dismissal of the registration court (as affirmed by the
Supreme Court) and adopted the liberal view that under the decree and regulations of
June 25, 1880, "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,
whenever made, was not to confer title, but simply to establish it, as already conferred
by the decree, if not by earlier law."

The Court's decision at bar now expressly overturns the Meralco and related cases
subsequent thereto which failed to adhere to the aforecited established doctrine dating
back to 1909 and was consistently applied up to June 29, 1982 (when the Meralco
decision was promulgated). We reaffirm the established doctrine that such acquisitive
prescription of alienable public lands takes place ipso jure or by operation of law without
the necessity of a prior issuance of a certificate of title. The land ipso jure ceases to be
of the public domain and becomes private property, which may be lawfully sold to and
acquired by qualified corporations such as respondent corporation. (As stressed in
Herico supra, "the application for confirmation is a mere formality, the lack of which
does not affect the legal sufficiency of the title.")

Such ipso jure conversion into private property of public lands publicly held under a
bona fide claim of acquisition or ownership is the public policy of the Act and is so
expressly stated therein. By virtue of such conversion into private property, qualified
corporations may lawfully acquire them and there is no "alteration or defeating" of the
1973 Constitution's prohibition against corporations holding or acquiring title to lands of
the public domain, as claimed in the dissenting opinion, for the simple reason that no
public lands are involved.

It should be noted that respondent corporation purchased the land from the Infiels on
October 16, 1962 under the aegis of the 1935 Constitution which contained no
prohibition against corporations holding public lands (except a limit of 1,024 hectares)
unlike the later 1973 Constitution which imposed an absolute prohibition. Even on the
erroneous assumption that the land remained public land despite the Infiels' open
possession thereof as owners from time immemorial, respondent corporation's lawful
purchase from them of the land in 1962 and P 45million investments redounding
presumably to the welfare and progress of the community, particularly the municipality
of Maconacon, Isabela to which it donated part of the land for the townsite created a
vested right which could not be impaired by the prohibition adopted eleven years later.
But as sufficiently stressed, the land of the Infiels had been ipso jure converted into
private land and they had a legally sufficient and transferable title conferred by the
conclusive presumption of the Public Land Act (which needed only to be established in
confirmation of title proceedings for formalization and issuance of the certificate of title)
which they lawfully and validly transferred to respondent corporation.

In fact, the many amendments to the Act extending the period for the filing of such
applications for judicial confirmation of imperfect and incomplete titles to alienable and
disposable public lands expressly reiterate that it has always been the "policy of the
State to hasten the settlement, adjudication and quieting of titles to [such] unregistered
lands," i.e. to recognize that such lands publicly and notoriously occupied and cultivated
under bona fide claim of acquisition or ownership have ipso jure been converted into
private property and grant the possessors the opportunity to establish and record such
fact. Thus, the deadline for the filing of such application which would have originally
expired first on December 31, 1938 was successively extended to December 31, 1941,
then extended to December 31, 1957, then to December 31, 1968, further extended to
December 31, 1976 and lastly extended to December 31, 1987. 7

The cited Act's provision that only natural persons may apply thereunder for
confirmation of title is in effect a technicality of procedure and not of substance. My
submittal in Meralco, mutatis mutandis, is properly applicable: "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." 8 Indeed,
then Chief Justice Enrique M. Fernando likewise dissented along the same line from the
majority ruling therein and held: "I dissent insofar as the opinion of the Court would
characterize such jurisdictional defect that the applicant was Meralco, a juridical person
rather than the natural persons-transferors, under the particular circumstances of this
case, as an insurmountable obstacle to the relief sought. I would apply by analogy,
although the facts could be distinguished, the approach followed by us in Francisco v.
City of Davao, where the legal question raised, instead of being deferred and possibly
taken up in another case, was resolved. By legal fiction and in the exercise of our
equitable jurisdiction, I feel that the realistic solution would be to decide the matter as if
the application under Section 48(b) were filed by the Piguing spouses, who I assume
suffer from no such disability." 9 Justice Vicente Abad Santos, now retired, while
concurring in the procedural result, likewise, in effect dissented from the therein majority
ruling on the question of substance, and stated his opinion that "the lots which are
sought to be registered have ceased to be lands of the public domain at the time they
were acquired by the petitioner corporation. They are already private lands because of
acquisitive prescription by the predecessors of the petitioner and all that is needed is
the confirmation of the title. Accordingly, the constitutional provision that no private
corporation or association may hold alienable lands of the public domain is inapplicable.
" 10

To my mind, the reason why the Act limits the filing of such applications to natural
citizens who may prove their undisputed and open possession of public lands for the
required statutory thirty-year period, tacking on their predecessors'-in-interest
possession is that only natural persons, to the exclusion of juridical persons such as
corporations, can actually, physically and in reality possess public lands for the required
statutory 30-year period. That juridical persons or corporations cannot do so is obvious.
But when the natural persons have fulfilled the required statutory period of possession,
the Act confers on them a legally sufficient and transferable title. It is preferable to follow
the letter of the law that they file the applications for confirmation of their title, although
they have lawfully transferred their title to the land. But such procedural failure cannot
and should not defeat the substance of the law, as stressed in the above-cited opinions,
that the lands are already private lands because of acquisitive prescription by the
corporation's predecessors and the realistic solution would be to consider the
application for confirmation as filed by the natural persons-transferors, and in
accordance with the evidence, confirm their title to the private lands so converted by
operation of law and lawfully transferred by them to the corporation. The law, after all,
recognizes the validity of the transfer and sale of the private land to the corporation. It
should not be necessary to go in a round-about way and have the corporation reassign
its rights to the private land to natural persons-(as I understand), was done after the
decision in the Meralco and Iglesia ni Cristo cases) just for the purpose of complying on
paper with the technicality of having natural persons file the application for confirmation
of title to the private land.

MELENCIO-HERRERA, J., dissenting:

Section 48 of the Public Land Act, in part, 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:

(a) ...

(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. These shall be conclusively presumed to have performed are the
conditions essential to a Government grant and shall be entitled to a certificate of
title under the provisions of this chapter.

(c) ...

Article XIV, Section 11, of the 1973 Constitution, in part, provides:

SEC. 11. .... 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 ....

It has to be conceded that, literally, statutory law and constitutional provision prevent a
corporation from directly applying to the Courts for the issuance of Original Certificates
of Title to lands of the public domain (Manila Electric Company vs. Castro-Bartolome,
114 SCRA 799; Republic vs. Villanueva, 114 SCRA 875; Republic vs. Court of Appeals,
119 SCRA 449; Iglesia ni Cristo vs. Hon. Judge, CFI of Nueva Ecija, Br. 1). It is my
opinion that the literalism should be adhered to in this case.

The reasoning of the majority can be restated in simple terms as follows:

(a) The INFIELS can successfully file an application for a certificate of title over the land
involved in the case.

(b) After the INFIELS secure a certificate of title, they can sell the land to ACME.

(c) As ACME can eventually own the certificate of title, it should be allowed to directly
apply to the Courts for the Certificate of Title, thus avoiding the circuituous "literal"
requirement that the INFIELS should first apply to the courts for the titles, and
afterwards transfer the title to ACME.

The majority opinion, in effect, adopted the following excerpt from a dissent in Manila
Electric Company vs. Castro-Bartolome (114 SCRA 799, 823 [1982]).

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
in 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." (Paragraphing supplied)

The effect is that the majority opinion now nullifies the statutory provision that only
citizens (natural persons) can apply for certificates of title under Section 48(b) of the
Public Land Act, as well as the constitutional provision (Article XIV, Section 11) which
prohibits corporations from acquiring title to lands of the public domain. That
interpretation or construction adopted by the majority cannot be justified. "A construction
adopted should not be such as to nullify, destroy or defeat the intention of the
legislature" (New York State Dept. of Social Services v. Dublino [UST 37 L. Ed 2d 688,
93 S Ct 2507; United States v. Alpers 338 US 680, 94 L Ed 457, 70 S Ct 352; cited in
73 Am Jur. 2nd., p. 351).

It has also been said that:

In the construction of statutes, the courts start with the assumption that the
legislature intended to enact an effective law, and the legislature is not to be
presumed to have done a vain thing in the enactment of a statute. Hence, it is a
general principle that the courts should, if reasonably possible to do so interpret
the statute, or the provision being construed, so as to give it efficient operation
and effect as a whole. An interpretation should, if possible, be avoided, under
which the statute or provision being construed is defeated, or as otherwise
expressed, nullified, destroyed, emasculated, repealed, explained away, or
rendered insignificant, meaningless, inoperative, or nugatory. If a statute is fairly
susceptible of two constructions, one of which will give effect to the act, while the
other will defeat it, the former construction is preferred. One part of a statute may
not be construed so as to render another part nugatory or of no effect. Moreover,
notwithstanding the general rule against the enlargement of extension of a
statute by construction, the meaning of a statute may be extended beyond the
precise words used in the law, and words or phrases may be altered or supplied,
where this is necessary to prevent a law from becoming a nullity. Wherever the
provision of a statute is general everything which is necessary to make such
provision effectual is supplied by implication. (Pliakos vs. Illinois Liquor Control
Com. 11 III 2d 456, 143 NE2d 47; cited in 73 AM Jur. 2d pp. 422-423)

The statutory provision and the constitutional prohibition express a public policy. The
proper course for the Court to take is to promote in the fullest manner the policy thus
laid down and to avoid a construction which would alter or defeat that policy.
In fine, I confirm my adherence to the ruling of this Court in Meralco vs. Hon. Castro-
Bartolome, 114 SCRA 799 [1982] and related cases.

Separate Opinions

GUTIERREZ, JR., J., concurring:

I reiterate my concurrence in Meralco v. Castro-Bartolome, and, therefore, dissent here.

TEEHANKEE, C.J., concurring:

I am honored by my brethren's judgment at bar that my dissenting opinion in the June,

1982 Meralco and Iglesia ni Cristo cases, 1 which is herein upheld, "expressed what is
the better. . . . and indeed the correct view." My dissent was anchored on the landmark
1909 case of Carino 2 through the 1925 case of Susi 3 and the long line of cases cited
therein to the latest 1980 case of Herico 4 that "it is established doctrine....... that an
open, continuous, adverse and public possession of a land of the public domain for the
period provided in the Public Land Act provision in force at the time (from July 26, 1894
in Susi under the old law [this period was reduced to 'at least thirty years immediately
preceding the filing of the application for confirmation of title' by amendment of
Commonwealth Act No. 141, equivalent to the period of acquisitive prescription 5 ]) by a
private individual personally and through his predecessors confers an effective title on
said possessor, whereby the land ceases to be land of the public domain and becomes
private property." I hereby reproduce the same by reference for brevity's sake. But since
we are reverting to the old above-cited established doctrine and precedents and
discarding the Meralco and Iglesia ni Cristo cases which departed therefrom in the
recent past, I feel constrained to write this concurrence in amplification of my views and
ratio decidendi.

Under the express text and mandate of the cited Act, such possessors "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. "

The Court thus held in Susi that under the presumption juris et de jure established in the
Act, the rightful possessor of the public land for the statutory period "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 certificate of title should be issued an order that said grant may be
sanctioned by the courts, an application therefore is sufficient . . . . 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 [and beyond
his authority to sell to any other person]. " 6

The root of the doctrine goes back to the pronouncement of Justice Oliver Wendell
Holmes for the U.S. Supreme Court in the 1909 case of Carino (the Igorot chief who
would have been deprived of ancestral family lands by the dismissal of his application
for registration) which reversed the dismissal of the registration court (as affirmed by the
Supreme Court) and adopted the liberal view that under the decree and regulations of
June 25, 1880, "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,
whenever made, was not to confer title, but simply to establish it, as already conferred
by the decree, if not by earlier law."

The Court's decision at bar now expressly overturns the Meralco and related cases
subsequent thereto which failed to adhere to the aforecited established doctrine dating
back to 1909 and was consistently applied up to June 29, 1982 (when the Meralco
decision was promulgated).<äre||anº•1àw> We reaffirm the established doctrine that
such acquisitive prescription of alienable public lands takes place ipso jure or by
operation of law without the necessity of a prior issuance of a certificate of title. The land
ipso jure ceases to be of the public domain and becomes private property, which may
be lawfully sold to and acquired by qualified corporations such as respondent
corporation. (As stressed in Herico supra, "the application for confirmation is a mere
formality, the lack of which does not affect the legal sufficiency of the title.")

Such ipso jure conversion into private property of public lands publicly held under a
bona fide claim of acquisition or ownership is the public policy of the Act and is so
expressly stated therein. By virtue of such conversion into private property, qualified
corporations may lawfully acquire them and there is no "alteration or defeating" of the
1973 Constitution's prohibition against corporations holding or acquiring title to lands of
the public domain, as claimed in the dissenting opinion, for the simple reason that no
public lands are involved.

It should be noted that respondent corporation purchased the land from the Infiels on
October 16, 1962 under the aegis of the 1935 Constitution which contained no
prohibition against corporations holding public lands (except a limit of 1,024 hectares)
unlike the later 1973 Constitution which imposed an absolute prohibition. Even on the
erroneous assumption that the land remained public land despite the Infiels' open
possession thereof as owners from time immemorial, respondent corporation's lawful
purchase from them of the land in 1962 and P 45million investments redounding
presumably to the welfare and progress of the community, particularly the municipality
of Maconacon, Isabela to which it donated part of the land for the townsite created a
vested right which could not be impaired by the prohibition adopted eleven years later.
But as sufficiently stressed, the land of the Infiels had been ipso jure converted into
private land and they had a legally sufficient and transferable title conferred by the
conclusive presumption of the Public Land Act (which needed only to be established in
confirmation of title proceedings for formalization and issuance of the certificate of title)
which they lawfully and validly transferred to respondent corporation.

In fact, the many amendments to the Act extending the period for the filing of such
applications for judicial confirmation of imperfect and incomplete titles to alienable and
disposable public lands expressly reiterate that it has always been the "policy of the
State to hasten the settlement, adjudication and quieting of titles to [such] unregistered
lands," i.e. to recognize that such lands publicly and notoriously occupied and cultivated
under bona fide claim of acquisition or ownership have ipso jure been converted into
private property and grant the possessors the opportunity to establish and record such
fact. Thus, the deadline for the filing of such application which would have originally
expired first on December 31, 1938 was successively extended to December 31, 1941,
then extended to December 31, 1957, then to December 31, 1968, further extended to
December 31, 1976 and lastly extended to December 31, 1987. 7

The cited Act's provision that only natural persons may apply thereunder for
confirmation of title is in effect a technicality of procedure and not of substance. My
submittal in Meralco, mutatis mutandis, is properly applicable: "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." 8 Indeed,
then Chief Justice Enrique M. Fernando likewise dissented along the same line from the
majority ruling therein and held: "I dissent insofar as the opinion of the Court would
characterize such jurisdictional defect that the applicant was Meralco, a juridical person
rather than the natural persons-transferors, under the particular circumstances of this
case, as an insurmountable obstacle to the relief sought. I would apply by analogy,
although the facts could be distinguished, the approach followed by us in Francisco v.
City of Davao, where the legal question raised, instead of being deferred and possibly
taken up in another case, was resolved. By legal fiction and in the exercise of our
equitable jurisdiction, I feel that the realistic solution would be to decide the matter as if
the application under Section 48(b) were filed by the Piguing spouses, who I assume
suffer from no such disability." 9 Justice Vicente Abad Santos, now retired, while
concurring in the procedural result, likewise, in effect dissented from the therein majority
ruling on the question of substance, and stated his opinion that "the lots which are
sought to be registered have ceased to be lands of the public domain at the time they
were acquired by the petitioner corporation. They are already private lands because of
acquisitive prescription by the predecessors of the petitioner and all that is needed is
the confirmation of the title. Accordingly, the constitutional provision that no private
corporation or association may hold alienable lands of the public domain is inapplicable.
" 10
To my mind, the reason why the Act limits the filing of such applications to natural
citizens who may prove their undisputed and open possession of public lands for the
required statutory thirty-year period, tacking on their predecessors'-in-interest
possession is that only natural persons, to the exclusion of juridical persons such as
corporations, can actually, physically and in reality possess public lands for the required
statutory 30-year period. That juridical persons or corporations cannot do so is obvious.
But when the natural persons have fulfilled the required statutory period of possession,
the Act confers on them a legally sufficient and transferable title. It is preferable to follow
the letter of the law that they file the applications for confirmation of their title, although
they have lawfully transferred their title to the land. But such procedural failure cannot
and should not defeat the substance of the law, as stressed in the above-cited opinions,
that the lands are already private lands because of acquisitive prescription by the
corporation's predecessors and the realistic solution would be to consider the
application for confirmation as filed by the natural persons-transferors, and in
accordance with the evidence, confirm their title to the private lands so converted by
operation of law and lawfully transferred by them to the corporation. The law, after all,
recognizes the validity of the transfer and sale of the private land to the corporation. It
should not be necessary to go in a round-about way and have the corporation reassign
its rights to the private land to natural persons-(as I understand), was done after the
decision in the Meralco and Iglesia ni Cristo cases) just for the purpose of complying on
paper with the technicality of having natural persons file the application for confirmation
of title to the private land.

MELENCIO-HERRERA, J., dissenting:

Section 48 of the Public Land Act, in part, 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:

(a) ...

(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. These shall be conclusively presumed to have performed are the
conditions essential to a Government grant and shall be entitled to a certificate of
title under the provisions of this chapter.
 (c) ...

Article XIV, Section 11, of the 1973 Constitution, in part, provides:

SEC. 11. .... 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 ....

It has to be conceded that, literally, statutory law and constitutional provision prevent a
corporation from directly applying to the Courts for the issuance of Original Certificates
of Title to lands of the public domain (Manila Electric Company vs. Castro-Bartolome,
114 SCRA 799; Republic vs. Villanueva, 114 SCRA 875; Republic vs. Court of Appeals,
119 SCRA 449; Iglesia ni Cristo vs. Hon. Judge, CFI of Nueva Ecija, Br. 1). It is my
opinion that the literalism should be adhered to in this case.

The reasoning of the majority can be restated in simple terms as follows:

(a) The INFIELS can successfully file an application for a certificate of title over the land
involved in the case.

(b) After the INFIELS secure a certificate of title, they can sell the land to ACME.

(c) As ACME can eventually own the certificate of title, it should be allowed to directly
apply to the Courts for the Certificate of Title, thus avoiding the circuituous "literal"
requirement that the INFIELS should first apply to the courts for the titles, and
afterwards transfer the title to ACME.

The majority opinion, in effect, adopted the following excerpt from a dissent in Manila
Electric Company vs. Castro-Bartolome (114 SCRA 799, 823 [1982]).

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
in 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." (Emphasis supplied)

The effect is that the majority opinion now nullifies the statutory provision that only
citizens (natural persons) can apply for certificates of title under Section 48(b) of the
Public Land Act, as well as the constitutional provision (Article XIV, Section 11) which
prohibits corporations from acquiring title to lands of the public domain. That
interpretation or construction adopted by the majority cannot be justified. "A construction
adopted should not be such as to nullify, destroy or defeat the intention of the
legislature" (New York State Dept. of Social Services v. Dublino [UST 37 L. Ed 2d 688,
93 S Ct 2507; United States v. Alpers 338 US 680, 94 L Ed 457, 70 S Ct 352; cited in
73 Am Jur. 2nd., p. 351).

It has also been said that:

In the construction of statutes, the courts start with the assumption that the
legislature intended to enact an effective law, and the legislature is not to be
presumed to have done a vain thing in the enactment of a statute. Hence, it is a
general principle that the courts should, if reasonably possible to do so interpret
the statute, or the provision being construed, so as to give it efficient operation
and effect as a whole. An interpretation should, if possible, be avoided, under
which the statute or provision being construed is defeated, or as otherwise
expressed, nullified, destroyed, emasculated, repealed, explained away, or
rendered insignificant, meaningless, inoperative, or nugatory. If a statute is fairly
susceptible of two constructions, one of which will give effect to the act, while the
other will defeat it, the former construction is preferred. One part of a statute may
not be construed so as to render another part nugatory or of no effect. Moreover,
notwithstanding the general rule against the enlargement of extension of a
statute by construction, the meaning of a statute may be extended beyond the
precise words used in the law, and words or phrases may be altered or supplied,
where this is necessary to prevent a law from becoming a nullity. Wherever the
provision of a statute is general everything which is necessary to make such
provision effectual is supplied by implication. (Pliakos vs. Illinois Liquor Control
Com. 11 III 2d 456, 143 NE2d 47; cited in 73 AM Jur. 2d pp. 422-423)

The statutory provision and the constitutional prohibition express a public policy. The
proper course for the Court to take is to promote in the fullest manner the policy thus
laid down and to avoid a construction which would alter or defeat that policy.

In fine, I confirm my adherence to the ruling of this Court in Meralco vs. Hon. Castro-
Bartolome, 114 SCRA 799 [1982] and related cases.

THIRD DIVISION

G.R. No. 75042 November 29, 1988

REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
INTERMEDIATE APPELLATE COURT, ROMAN CATHOLIC BISHOP OF LUCENA,
represented by Msgr. Jose T. Sanchez, and REGIONAL TRIAL COURT, BRANCH
LIII, LUCENA CITY, respondents.

The Solicitor General for petitioner.

Gilbert D. Camaligan for private respondent.

BIDIN, J.:

This is an appeal from the 1) decision * of the FIRST CIVIL CASES DIVISION of the
then Intermediate Appellate Court dated May 13, 1986, in AC G.R. No. 01410 entitled
the ROMAN CATHOLIC BISHOP OF Lucena, represented by Msgr. Jose T. Sanchez,
applicant-appellee vs. Republic of the Philippines, et al., Oppositors-appellants,
affirming the decision ** of the then Court of FIRST INSTANCE of Quezon, 9th Judicial
District, Branch 1, dated November 4, 1980 in Land Registration Case No. N-1106
entitled the ROMAN CATHOLIC BISHOP of Lucena, represented by Msgr. Jose T.
Sanchez, applicant vs. the Director of Lands and the Director, Bureau of Forest
Development, oppositors, ordering the registration of title to the parcel of land
designated, as lots 1, 2 and 3 of plan PSD-65686 and its technical descriptions, and the
parcel of land described in plan PSU-112592 and its technical description, together with
whatever improvements existing thereon, in the name of the ROMAN CATHOLIC
BISHOP of Lucena and 2) its resolution Dated June 19,1986, denying appellant's
"Motion for Reconsideration for lack of merit."

The factual background of the case as found by the Intermediate Appellate Court are as
follows:

On February 2, 1979, the ROMAN CATHOLIC BISHOP of Lucena, represented by Msgr.

Jose T. Sanchez, filed an application for confirmation of title to four (4) parcels of land.
Three of said parcels, denominated as Lots 1, 2 and 3, respectively, of plan PSU-65686
are situated in Barrio Masin, Municipality of Candelaria, Quezon Province. The fourth
parcels under plan PSU-112592 is located in Barrio Bucal (Taguan), same municipality
and province. As basis for the application, the applicant claimed title to the various
properties through either purchase or donation dating as far back as 1928.

The legal requirements of publication and posting were duly complied with, as was the
service of copies of notice of initial hearing on the proper government officials.

In behalf of the Director of Lands and the Director of the Bureau of Forest Development,
the Solicitor General filed an Opposition on April 20, 1979, alleging therein among others,
that the applicant did not have an imperfect title or title in fee simple to the parcel of land
being applied for.
At the initial hearing held on November 13, 1979, only the Provincial Fiscal in
representation of the Solicitor General appeared to interpose personal objection to the
application. Hence, an Order of General Default against the whole world was issued by
the Court a quo except for the Director of Lands and the Director of the Bureau of Forest
Development.

The preliminaries dispensed with, the applicant then introduced its proofs in support of
the petition, summed up by the lower court as follows:

With respect to Lots 1, 2, and 3, plan PSU-65686.

Lots 1, 2 and 3 of plan PSU-65686 respectively containing an area of

18,977, 6,910 and 16,221 square meters, are adjoining lots & are
situated in the Barrio of Masin, Municipality of Candelaria, Province of
Quezon (formerly Tayabas) (Exhibits F, F-1, F-2 and F-3). Said lots were
surveyed for the Roman Catholic Church on November 3, 1928 (Exhibit
P-5) and the survey plan approved on October 20, 1929 (Exhibit F-6).

Lot 1 was acquired by the Roman Catholic Church thru Rev. Father
Raymundo Esquenet by purchase from the spouses Atanacio Yranso
and Maria Coronado on October 20, 1928 (Exhibits G, G-1), portion of
Lot 2 also by purchase thru Rev. Father Raymundo Esquenet from the
spouses Benito Maramot and Venancia Descaller on May 22, 1969
(Exhibits M, N-1), while the remaining portion of Lot 2 and Lot 3 were
already owned and possessed by the Roman Catholic Church even prior
to the survey of the said three lots in 1928.

Records of burial of the Roman Catholic Church of Candelaria, Quezon

showed that even as early as November 1918, Lot 3 has already been
utilized by the Roman Catholic Church as its cemetery in Candelaria,
Quezon (Exhibit N, N-1 to N-5).<äre||anº•1àw>

These three lots presently constituted the Roman Catholic Church

cemetery in Candelaria, Quezon.

Lots 1, 2 and 3 are declared for taxation purposes in the name of the
Roman Catholic Church under Tax Declaration Nos. 22-19-02-079, 22-
19-02-077 and 22-19-02-082 as 'cemetery site' (Exhibit S, V and T).

With respect to the parcel of land described in plan PSU-112592:

This parcel of land situated in the barrio of Bucal (Taguan), Municipality

of Candelaria, Province of Quezon (formerly Tayabas) and more
particularly described in plan PSU-1 12592 and its technical description
with an area of 3,221 square meters (Exhibit 1) was formerly owned and
possessed by the spouses Paulo G. Macasaet, and Gabriela V. de
Macasaet. Said spouses, on February 26, 1941, donated this lot to the
Roman Catholic Church represented by Reverend Father Raymundo
Esquenet (Exhibit J, J-1 to J-4). It was surveyed for the Roman Catholic
Church on Aug. 16, 1940 as church site and the corresponding survey
plan approved on Jan. 15, 1941 (Exhibits I-1, I-2, 1-3).

Previously erected on this Lot was an old chapel which was demolished
and new chapel now stands in its place on the same site.
 For his part, the Fiscal in a Manifestation dated July 22, 1980, said 'the State will not
adduce evidence in support of its opposition and will submit the instant case for decision.'

Evaluating the applicant's submitted proofs, the court a quo concluded, on the basis of
acquisitive prescription at the very least, that the former had adequately shown title to the
parcels of land being claimed.

Since the acquisition of these four (4) lots by the applicant, it has been in
continuous possession and enjoyment thereof, and such possession,
together with its predecessors-in interest, covering a period of more than
52 years (at least from the date of the survey in 1928) with respect to lots
1 and 2, about 62 years with respect to lot 3, all of plan PSU- 65686; and
more than 39 years with respect to the fourth parcel described in plan
PSU-112592 (at least from the date of the survey in 1940) have been
open, public, continuous, peaceful, adverse against the whole world, and
in the concept of owner.

Accordingly, the court ordered the registration of the four parcels together with the
improvements thereon "in the name of the ROMAN CATHOLIC BISHOP OF LUCENA,
INC., a religious corporation sole duly registered and existing under the laws of the
Republic of the Philippines."

Against this decision, the Solicitor General filed a Motion for reconsideration on the
following grounds:

1. Article XIV, Section 11 of the New Constitution(1973) disqualifies a private corporation

from acquiring alienable lands for the public domain.

2. In the case at bar the application was filed after the effectivity on the New Constitution
on January 17, 1973.

which was denied by the lower court for lack of merit.

Still insisting of the alleged unconstitutionality of the registration (a point which,

incidentally, the appellant never raised in the lower court prior to its Motion for
Reconsideration), the Republic elevated this appeal. (Rollo, pp. 25-28)

On May 13, 1986, the first Civil Cases Division of the Intermediate Appellate Court
rendered its Decision the dispositive part of which reads:

WHEREFORE, finding the judgment a quo to be supported by law and the evidence on
record, the same is hereby AFFIRMED. No pronouncement as to costs.

SO ORDERED. (Rollo p. 30)

A reconsideration of the aforequoted Decision was sought by Appellant Republic of the

Philippines, but for lack of merit, its motion for reconsideration was denied on June 19,
1986, by Resolution of the First Civil Case Division, Intermediate Appellate Court which
resolution reads in full:
 Considering appellant Republic of the Philippines "Motion for reconsideration" filed on
June 4, 1986; the Court RESOLVED to DENY the Motion for Reconsideration for lack of
merit, grounds raised therein having all been considered in the decision. (Rollo, p. 31)

Hence, this petition.

The following are the assigned errors raised by the petitioner in its petition:

1. The decision and the resolution in question are contrary to law and decisions of this
honorable Court in Meralco vs. Castro-Bartolome and Republic, 114 SCRA 799 (prom.
June 29,1982); Republic vs. Judge Villanueva and Iglesia ni Cristo, 114 SCRA 875, June
29, 1982); and Republic vs. Judge Gonong and Iglesia ni Cristo, 118 SCRA 729-733
(November 25,1982); Director of Lands vs. Hermanos y Hermanas, Inc. 141 SCRA 21-25
(Jan. 7,1986).

2. The lands applied for registration were the subject of a previous registration case
where a decree of registration was already issued.

3. Respondent corporation failed to establish the indentity of the lands applied for. (Rollo,
pp. 14-15)

The issue raised in this case involves the question of whether the Roman Catholic
Bishop of Lucena, as a corporation sole is qualified to apply for confirmation of its title to
the four (4) parcels of land subject of this case.

Corollary thereto is the question of whether or not a corporation sole should be treated
as an ordinary private corporation, for purpose of the application of Art. XIV, Sec. 11 of
the 1973 Constitution.

Article XIV, Sec. 11 of the 1973 Constitution, in part provides:

Sec. 11. .... 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....

Sec. 48 of the Public Land Act, in part, 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:

(a) ...

(b) Those who by themselves or through their predecessor-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.

(c) ...

In its Motion for Reconsideration, petitioner contends that the Roman Catholic Bishop of
Lucena (private respondent herein) which is admittedly a corporation sole is disqualified
to own and register its title over the parcels of land involved herein. (Rollo, p. 41)

In its petition it likewise argued that being a juridical entity, private respondent cannot
avail of the benefits of Sec. 48(b) of the public land law which applies to FILIPINO
citizens or NATURAL persons. On the other hand, private respondent in its
MEMORANDUM espoused the contrary view.

There is no merit in this petition.

The parties herein do not dispute that since the acquisition of the four (4) lots by the
applicant, it has been in continuous possession and enjoyment thereof, and such
possession, together with its predecessors-in-interest, covering a period of more than
52 years (at least from the date of survey in 1928) with respect to lots 1 and 2, about 62
years with respect to lot 3, all of plan PSU-65686; and more than 39 years with respect
to the fourth parcel described in plan PSU-11 2592 (at least from the date of the survey
in 1940) have been open, public, continuous, peaceful, adverse against the whole
world, and in the concept of owner.

Being disputed before this Court is the matter of the applicability of Art. XIV Sec. 11 of
the 1973 Constitution to the case at bar.

Petitioner argues that considering such constitutional prohibition, private respondent is

disqualified to own and register its title to the lots in question. Further, it argues that
since the application for registration was filed only on February 2, 1979, long after the
1973 Constitution took effect on January 17, 1973, the application for registration and
confirmation of title is ineffectual because at the time it was filed, private corporation had
been declared ineligible to acquire alienable lands of the public domain pursuant to Art.
XIV, Sec. 11 of the said constitution. (Rollo, p. 41)

The questioned posed before this Court has been settled in the case of DIRECTOR OF
LANDS vs. Intermediate Appellate Court (146 SCRA 509 [1986]) which reversed the
ruling first enunciated in the 1982 case of Manila Electric Co. vs. CASTRO
BARTOLOME, (114 SCRA 789 [1982]) imposing the constitutional ban on public land
acquisition by private corporations which ruling was declared emphatically as res
judicata on January 7, 1986 in Director of Lands vs. Hermanos y Hermanas de Sta.
Cruz de Mayo, Inc., (141 SCRA 21 [1986]).<äre||anº•1àw> In said case, (Director of
Lands v. IAC, supra), this Court stated that a determination of the character of the lands
at the time of institution of the registration proceedings must be made. If they were then
still part of the public domain, it must be answered in the negative.
If, on the other hand, they were already private lands, the constitutional prohibition
against their acquisition by private corporation or association obviously does not apply.
In affirming the Decision of the Intermediate Appellate Court in said case, this Court
adopted the vigorous dissent of the then Justice, later Chief Justice Claudio Teehankee,
tracing the line of cases beginning with CARINO, 1 in 1909, thru SUSI, 2 in 1925, down
to HERICO, 3 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. (DIRECTOR OF LANDS vs. IAC, supra, p. 518).

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 dictim of the statute itself; 4 that
the possessor "... 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 admissable 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 effected by operation of law from the moment
the required period of possession became complete. As was so well put in Carino, "...
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. (DIRECTOR OF LANDS vs. IAC, supra, p. 520).

The open, continuous and exclusive possession of the four lots by private respondent
can clearly be gleaned from the following facts on record: Lot 1 and portion of Lot 2 was
acquired by purchase in 1928 and 1929, respectively. The remaining portion of lots 2
and 3 was already owned and possessed by private respondent even prior to the survey
of said lots in 1928. In fact, records of burial of the Roman Catholic Church of
Candelaria, Quezon showed that as early as 1919, Lot 3 has already been utilized by
the Roman Catholic Church as its cemetery. That at present, said three lots are utilized
as the Roman Catholic Church of Candelaria, Quezon. That said lots are declared for
taxation purposes in the name of the Roman Catholic Church. The fourth parcel of land
was acquired by donation in 1941 and same lot is utilized as church site.

It must be emphasized that the Court is not here saying that a corporation sole should
be treated like an ordinary private corporation.

In Roman Catholic Apostolic Administration of Davao, Inc. vs. Land Registration

Commission, et al. (L-8451, December 20,1957,102 Phil. 596). We articulated:

In solving the problem thus submitted to our consideration, We can say the following: A
corporation sole is a special form of corporation usually associated with the clergy.
 Conceived and introduced into the common law by sheer necessity, this legal creation
which was referred to as "that unhappy freak of English Law" was designed to facilitate
the exercise of the functions of ownership carried on by the clerics for and on behalf of
the church which was regarded as the property owner (See 1 Bouvier's Law Dictionary, p.
682-683).

A corporation sole consists of one person only, and his successors (who will always be
one at a time), in some particular station, who are incorporated by law in order to give
them some legal capacities and advantages, particulary that of perpetuity, which in their
natural persons they could not have had. In this sense, the King is a sole corporation; so
is a bishop, or deans distinct from their several chapters (Reid vs. Barry, 93 fla. 849, 112
So. 846).

Pertinent to this case is the provision of Sec. 113 Batas Pambansa Blg. 68 which reads
as follows:

Sec. 113. Acquisition and alienation of property. — Any corporation sole may purchase
and hold real estate and personal property for its church, charitable, benevolent or
educational purposes, and may receive bequests or gifts for such purposes. Such
corporation may mortgage or sell real property held by it upon obtaining an order for that
purpose from the Court of First Instance of the province where the property is situated;
but before the order is issued, proof must be made to the satisfaction of the Court that
notice of the application for leave to mortgage or sell has been given by publication or
otherwise in such manner and for such time as said court may have directed, and that it
is to the interest of the corporation that leave to mortgage or sell should be granted. The
application for leave to mortgage or sell must be made by petition, duly verified by the
chief archbishop, bishop, priest, minister, rabbi or presiding elder acting as corporation
sole, and may be opposed by any member of the religious denomination, sect or church
represented by the corporation sole: Provided, That in cases where the rules, regulations
and discipline of the religious denomination, sect or church religious society or order
concerned represented by such corporation sole regulate the method of acquiring,
holding, selling and mortgaging real estate and personal property, such rules, regulations
and discipline shall control and the intervention of the courts shall not be necessary.

There is no doubt that a corporation sole by the nature of its Incorporation is vested with
the right to purchase and hold real estate and personal property. It need not therefore
be treated as an ordinary private corporation because whether or not it be so treated as
such, the Constitutional provision involved will, nevertheless, be not applicable.

In the light of the facts obtaining in this case and the ruling of this Court in Director of
Lands vs. IAC, (supra, 513), the lands subject of this petition were already private
property at the time the application for confirmation of title was filed in 1979. There is
therefore no cogent reason to disturb the findings of the appellate court.

WHEREFORE, the petition is dismissed for lack of merit and the appealed decision and
Resolution of the Intermediate Appellate Court is hereby AFFIRMED

Republic of the Philippines

SUPREME COURT
Manila
 FIRST DIVISION
 

G.R. No. 74833 January 21, 1991

THOMAS C. CHEESMAN, petitioner,

vs.
INTERMEDIATE APPELLATE COURT and ESTELITA PADILLA, respondents.

Estanislao L. Cesa, Jr. for petitioner.

Benjamin I. Fernandez for private respondent.

NARVASA, J.:p

This appeal concerns the attempt by an American citizen (petitioner Thomas

Cheesman) to annul — for lack of consent on his part — the sale by his Filipino wife
(Criselda) of a residential lot and building to Estelita Padilla, also a Filipino.

Thomas Cheesman and Criselda P. Cheesman were married on December 4, 1970 but
have been separated since February 15,1981. 1

On June 4, 1974, a "Deed of Sale and Transfer of Possessory Rights" was executed by
Armando Altares conveying a parcel of unregistered land and the house thereon (at No.
7 Neptune Street, Gordon Heights, Olongapo City) in favor of "Criselda P. Cheesman,
of legal age, Filipino citizen, married to Thomas Cheesman, and residing at Lot No. 1,
Blk. 8, Filtration Road, Sta. Rita, Olongapo City . . ." 2 Thomas Cheesman, although
aware of the deed, did not object to the transfer being made only to his wife. 3

Thereafter—and again with the knowledge of Thomas Cheesman and also without any
protest by him—tax declarations for the property purchased were issued in the name
only of Criselda Cheesman and Criselda assumed exclusive management and
administration of said property, leasing it to tenants. 4 On July 1, 1981, Criselda
Cheesman sold the property to Estelita M. Padilla, without the knowledge or consent of
Thomas Cheesman. 5 The deed described Criselda as being" . . . of legal age, married
to an American citizen,. . ." 6

Thirty days later, or on July 31, 1981, Thomas Cheesman brought suit in the Court of
First Instance at Olongapo City against his wife, Criselda, and Estelita Padilla, praying
for the annulment of the sale on the ground that the transaction had been executed
without his knowledge and consent. 7 An answer was filed in the names of both
defendants, alleging that (1) the property sold was paraphernal, having been purchased
by Criselda with funds exclusively belonging to her ("her own separate money"); (2)
Thomas Cheesman, being an American, was disqualified to have any interest or right of
ownership in the land; and (3) Estelita Padilla was a buyer in good faith. 8

During the pre-trial conference, the parties agreed upon certain facts which were
subsequently set out in a pre-trial Order dated October 22, 1981, 9 as follows:

1. Both parties recognize the existence of the Deed of Sale over the residential house
located at No. 7 Granada St., Gordon Heights, Olongapo City, which was acquired from
Armando Altares on June 4, 1974 and sold by defendant Criselda Cheesman to Estelita
Padilla on July 12, 1981; and

2. That the transaction regarding the transfer of their property took place during the
existence of their marriage as the couple were married on December 4, 1970 and the
questioned property was acquired sometime on June 4,1974.

The action resulted in a judgment dated June 24, 1982, 10 declaring void ab initio the
sale executed by Criselda Cheesman in favor of Estelita M. Padilla, and ordering the
delivery of the property to Thomas Cheesman as administrator of the conjugal
partnership property, and the payment to him of P5,000.00 as attorney's fees and
expenses of litigation. 11

The judgment was however set aside as regards Estelita Padilla on a petition for relief
filed by the latter, grounded on "fraud, mistake and/or excusable negligence" which had
seriously impaired her right to present her case adequately. 12 "After the petition for relief
from judgment was given due course," according to petitioner, "a new judge presided
over the case." 13

Estelita Padilla filed a supplemental pleading on December 20, 1982 as her own answer
to the complaint, and a motion for summary judgment on May 17, 1983. Although there
was initial opposition by Thomas Cheesman to the motion, the parties ultimately agreed
on the rendition by the court of a summary judgment after entering into a stipulation of
facts, at the hearing of the motion on June 21, 1983, the stipulation being of the
following tenor: 14

(1) that the property in question was bought during the existence of the marriage between
the plaintiff and the defendant Criselda P. Cheesman;

(2) that the property bought during the marriage was registered in the name of Criselda
Cheesman and that the Deed of Sale and Transfer of Possessory Rights executed by the
former owner-vendor Armando Altares in favor of Criselda Cheesman made no mention
of the plaintiff;

(3) that the property, subject of the proceedings, was sold by defendant Criselda
Cheesman in favor of the other defendant Estelita M. Padilla, without the written consent
of the plaintiff.

Obviously upon the theory that no genuine issue existed any longer and there was
hence no need of a trial, the parties having in fact submitted, as also stipulated, their
respective memoranda each praying for a favorable verdict, the Trial Court 15 rendered a
"Summary Judgment" dated August 3, 1982 declaring "the sale executed by . . .
Criselda Cheesman in favor of . . . Estelita Padilla to be valid," dismissing Thomas
Cheesman's complaint and ordering him "to immediately turn over the possession of the
house and lot subject of . . . (the) case to . . . Estelita Padilla . . ." 16

The Trial Court found that —

1) the evidence on record satisfactorily overcame the disputable presumption in Article

160 of the Civil Code—that all property of the marriage belongs to the conjugal
partnership "unless it be proved that it pertains exclusively to the husband or to the
wife"—and that the immovable in question was in truth Criselda's paraphernal property;

2) that moreover, said legal presumption in Article 160 could not apply "inasmuch as the
husband-plaintiff is an American citizen and therefore disqualified under the Constitution
to acquire and own real properties; and

3) that the exercise by Criselda of exclusive acts of dominion with the knowledge of her
husband "had led . . . Estelita Padilla to believe that the properties were the exclusive
properties of Criselda Cheesman and on the faith of such a belief she bought the
properties from her and for value," and therefore, Thomas Cheesman was, under Article
1473 of the Civil Code, estopped to impugn the transfer to Estelita Padilla.

Thomas Cheesman appealed to the Intermediate Appellate Court. There he assailed

the Trial Court acts (1) of granting Estelita Padilla's petition for relief, and its resolution
of matters not subject of said petition; (2) of declaring valid the sale to Estelita Padilla
despite the lack of consent thereto by him, and the presumption of the conjugal
character of the property in question pursuant to Article 160 of the Civil Code; (3) of
disregarding the judgment of June 24, 1982 which, not having been set aside as against
Criselda Cheesman, continued to be binding on her; and (4) of making findings of fact
not supported by evidence. All of these contentions were found to be without merit by
the Appellate Tribunal which, on January 7, 1986, promulgated a decision (erroneously
denominated, "Report") 17 affirming the "Summary Judgment complained of," "having
found no reversible error" therein.

Once more, Thomas Cheesman availed of the remedy of appeal, this time to this Court.
Here, he argues that it was reversible error for the Intermediate Appellate Court —

1) to find that the presumption that the property in question is conjugal in accordance
with Article 160 had been satisfactorily overcome by Estelita Padilla; 18

2) to rule that Estelita Padilla was a purchaser of said property in good faith, it
appearing:

a) that the deed by which the property was conveyed to Criselda

Cheesman described her as "married to Thomas C. Cheesman," as well
as the deed by which the property was later conveyed to Estelita Padilla
by Criselda Cheesman also described her as "married to an American
 citizen," and both said descriptions had thus "placed Estelita on
knowledge of the conjugal nature of the property;" and

b) that furthermore, Estelita had admitted to stating in the deed by which

she acquired the property a price much lower than that actually paid "in
order to avoid payment of more obligation to the government;" 19

3) to decline to declare that the evidence did not warrant the grant of Estelita Padilla's
petition for relief on the ground of "fraud, mistake and/or excusable negligence;" 20

4) to hold that Thomas Cheesman had waived his objection to Estelita's petition for
relief by failing to appeal from the order granting the same;

5) to accord to Estelita Padilla a relief other than that she had specifically prayed for in
her petition for relief, ie., "the restoration of the purchase price which Estelita allegedly
paid to Criselda;" 21 and

6) to fail to declare that Thomas Cheesman's citizenship is not a bar to his action to
recover the lot and house for the conjugal partnership. 22

Such conclusions as that (1) fraud, mistake or excusable negligence existed in the
premises justifying relief to Estelita Padilla under Rule 38 of the Rules of Court, or (2)
that Criselda Cheesman had used money she had brought into her marriage to Thomas
Cheesman to purchase the lot and house in question, or (3) that Estelita Padilla
believed in good faith that Criselda Cheesman was the exclusive owner of the property
that she (Estelita) intended to and did in fact buy—derived from the evidence adduced
by the parties, the facts set out in the pleadings or otherwise appearing on record—are
conclusions or findings of fact. As distinguished from a question of law—which exists
"when the doubt or difference arises as to what the law is on a certain state of facts" —
"there is a question of fact when the doubt or difference arises as to the truth or the
falsehood of alleged facts;" 23 or when the "query necessarily invites calibration of the
whole evidence considering mainly the credibility of witnesses, existence and relevancy
of specific surrounding circumstances, their relation; to each other and to the whole and
the probabilities of the situation." 24

Now, it is axiomatic that only questions of law, distinctly set forth, may be raised in a
petition for the review on certiorari of a decision of the Court of Appeals presented to
this Court. 25 As everyone knows or ought to know, the appellate jurisdiction of this Court
is limited to reviewing errors of law, accepting as conclusive the factual findings of the
lower court upon its own assessment of the evidence. 26 The creation of the Court of
Appeals was precisely intended to take away from the Supreme Court the work of
examining the evidence, and confine its task to the determination of questions which do
not call for the reading and study of transcripts containing the testimony of witnesses. 27
The rule of conclusiveness of the factual findings or conclusions of the Court of Appeals
is, to be sure, subject to certain exceptions, 28 none of which however obtains in the
case at bar.
It is noteworthy that both the Trial Court and the Intermediate Appellate Court reached
the same conclusions on the three (3) factual matters above set forth, after assessment
of the evidence and determination of the probative value thereof. Both Courts found that
the facts on record adequately proved fraud, mistake or excusable negligence by which
Estelita Padilla's rights had been substantially impaired; that the funds used by Criselda
Cheesman was money she had earned and saved prior to her marriage to Thomas
Cheesman, and that Estelita Padilla did believe in good faith that Criselda Cheesman
was the sole owner of the property in question. Consequently, these determinations of
fact will not be here disturbed, this Court having been cited to no reason for doing so.

These considerations dispose of the first three (3) points that petitioner Cheesman
seeks to make in his appeal. They also make unnecessary an extended discussion of
the other issues raised by him. As to them, it should suffice to restate certain
fundamental propositions.

An order of a Court of First Instance (now Regional Trial Court) granting a petition for
relief under Rule 38 is interlocutory and is not appealable. Hence, the failure of the party
who opposed the petition to appeal from said order, or his participation in the
proceedings subsequently had, cannot be construed as a waiver of his objection to the
petition for relief so as to preclude his raising the same question on appeal from the
judgment on the merits of the main case. Such a party need not repeat his objections to
the petition for relief, or perform any act thereafter (e.g., take formal exception) in order
to preserve his right to question the same eventually, on appeal, it being sufficient for
this purpose that he has made of record "the action which he desires the court to take or
his objection to the action of the court and his grounds therefor." 29

Again, the prayer in a petition for relief from judgment under Rule 38 is not necessarily
the same prayer in the petitioner's complaint, answer or other basic pleading. This
should be obvious. Equally obvious is that once a petition for relief is granted and the
judgment subject thereof set aside, and further proceedings are thereafter had, the
Court in its judgment on the merits may properly grant the relief sought in the
petitioner's basic pleadings, although different from that stated in his petition for relief.

Finally, the fundamental law prohibits the sale to aliens of residential land. Section 14,
Article XIV of the 1973 Constitution ordains that, "Save in cases of hereditary
succession, no private land shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold lands of the public domain." 30
Petitioner Thomas Cheesman was, of course, charged with knowledge of this
prohibition. Thus, assuming that it was his intention that the lot in question be
purchased by him and his wife, he acquired no right whatever over the property by
virtue of that purchase; and in attempting to acquire a right or interest in land,
vicariously and clandestinely, he knowingly violated the Constitution; the sale as to him
was null and void. 31 In any event, he had and has no capacity or personality to question
the subsequent sale of the same property by his wife on the theory that in so doing he is
merely exercising the prerogative of a husband in respect of conjugal property. To
sustain such a theory would permit indirect controversion of the constitutional
prohibition. If the property were to be declared conjugal, this would accord to the alien
husband a not insubstantial interest and right over land, as he would then have a
decisive vote as to its transfer or disposition. This is a right that the Constitution does
not permit him to have.

As already observed, the finding that his wife had used her own money to purchase the
property cannot, and will not, at this stage of the proceedings be reviewed and
overturned. But even if it were a fact that said wife had used conjugal funds to make the
acquisition, the considerations just set out militate, on high constitutional grounds,
against his recovering and holding the property so acquired or any part thereof. And
whether in such an event, he may recover from his wife any share of the money used
for the purchase or charge her with unauthorized disposition or expenditure of conjugal
funds is not now inquired into; that would be, in the premises, a purely academic
exercise. An equally decisive consideration is that Estelita Padilla is a purchaser in good
faith, both the Trial Court and the Appellate Court having found that Cheesman's own
conduct had led her to believe the property to be exclusive property of the latter's wife,
freely disposable by her without his consent or intervention. An innocent buyer for value,
she is entitled to the protection of the law in her purchase, particularly as against
Cheesman, who would assert rights to the property denied him by both letter and spirit
of the Constitution itself.

WHEREFORE, the appealed decision is AFFIRMED, with costs against petitioner.

SO ORDERED.

Cruz, Gancayco, Griño-Aquino and Medialdea, JJ., concur

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-48321             August 31, 1946

OH CHO, applicant-appellee,
vs.
THE DIRECTOR OF LANDS, oppositor-appellant.

Office of the Solicitor General Roman Ozaeta and Assistant Solicitor General Rafael Amparo
for appellant.
Vicente Constantino for appellee.
Ferrier, Gomez and Sotelo and J. T. Chuidian as amici curiae.

PADILLA, J.:
This is an appeal from a judgment decreeing the registration of a residential lot located in the
municipality of Guinayangan, Province of Tayabas in the name of the applicant.

The opposition of the Director of Lands is based on the applicant's lack of title to the lot, and on
his disqualification, as alien, from acquiring lands of the public domain.

The applicant, who is an alien, and his predecessors in interest have been in open, continuous,
exclusive and notorious possession of the lot from 1880 to filing of the application for
registration on January 17, 1940.

The Solicitor General reiterates the second objection of the opponent and adds that the lower
court, committed an error in not declaring null and void the sale of the lot to the applicant.

The applicant invokes the Land Registration Act (Act No. 496), or should it not be applicable to
the case, then he would apply for the benefits of the Public Land Act (C.A. No. 141).

The applicant failed to show that he has title to the lot that may be confirmed under the Land
Registration Act. He failed to show that he or any of his predecessors in interest had acquired the
lot from the Government, either by purchase or by grant, under the laws, orders and decrease
promulgated by the Spanish Government in the Philippines, or by possessory information under
the Mortgaged Law (section 19, Act 496). All lands that were not acquired from the
Government, either by purchase or by grant below to the public domain. An exception to the rule
would be any land that should have been in the possession of an occupant and of his
predecessors in interest since time immemorial, for such possession would justify the
presumption that the land had never been part of the public domain or that it had been a private
property even before the Spanish conquest. (Cariño vs. Insular Government, 212 U.S., 449; 53
Law. Ed., 594.) The applicant does not come under the exception, for the earliest possession of
the lot by his first predecessors in interest begun in 1880.

As the applicant failed to show title to the lot, the next question is whether he is entitled to decree
or registration of the lot, because he is alien disqualified from acquiring lands of the public
domain (sections 48, 49, C.A. No. 141).

As the applicant failed to show the title to the lot, and has invoked the provisions of the Public
Land Act, it seems unnecessary to make pronouncement in this case on the nature or
classifications of the sought to be registered.

It may be argued that under the provisions of the Public Land Act the applicant immediate
predecessor in interest would have been entitled to a decree of registration of the lot had they
applied for its registration; and that he having purchased or acquired it, the right of his immediate
predecessor in interest to a decree of registration must be deemed also to have been acquired by
him. The benefits provided in the Public Land Act for applicant's immediate predecessors in
interest should comply with the condition precedent for the grant of such benefits. The condition
precedent is to apply for the registration of the land of which they had been in possession at least
since July 26, 1894. This the applicant's immediate predecessors in interest failed to do. They did
not have any vested right in the lot amounting to the title which was transmissible to the
applicant. The only right, if it may thus be called, is their possession of the lot which, tacked to
that of their predecessors in interest, may be availed of by a qualified person to apply for its
registration but not by a person as the applicant who is disqualified.

It is urged that the sale of the lot to the applicant should have been declared null and void. In a
suit between vendor and vendee for the annulment of the sale, such pronouncement would be
necessary, if the court were of the opinion that it is void. It is not necessary in this case where the
vendors do not even object to the application filed by the vendee.

Accordingly, judgment is reversed and the application for registration dismissed, without costs.

Moran, C.J., Feria, Pablo, Hilado and Bengzon, JJ., concur.

Separate Opinions

PERFECTO, J., concurring:

Oh Cho, a citizen of the Republic of China, purchased in 1938 from Antonio, Luis and Rafael
Lagdameo a parcel of land located in the residential district of Guinayangan, Tayabas, which has
been in the continuous, public, and adverse possession of their predecessors in interest as far
back as 1880. on June 17, 1940, Oh Cho applied for the registration of said parcel of land. The
Director of Lands opposed the application because, among other grounds, the Constitution
prohibits aliens from acquiring public or private agricultural lands.

One of the witnesses for the applicant, on cross-examination, expressly admitted that the land in
question is susceptible of cultivation and may be converted into an orchard or garden. Rodolfo
Tiquia, inspector of the Bureau of Lands, testifying as a witness for the government, stated that
the land, notwithstanding the use to which it is actually devoted, is agricultural land in
accordance with an opinion rendered in 1939 by the Secretary of Justice. The pertinent part of
said opinion, penned by Secretary Jose Abad Santos, later Chief Justice of the Supreme Court, is
as follows:

1. Whether or not the "public agricultural land" in section 1, Article XII, of the
Constitution may be interpreted to include residential, commercial or industrial lots for
purposes of their disposition.

1. Section 1, Article XII of the Constitution classifies lands of the public domain in the
Philippines into agricultural, timber and mineral. This is the basic classification adopted
since the enactment of the Act of Congress of July 1, 1902, known as the Philippine Bill.
At the time of the adoption of the Constitution of the Philippines, the term "agricultural
public lands" had, therefor, acquired a technical meaning in our public laws. The
Supreme Court of the Philippines in the leading case of Mapa vs. Insular Government, 10
Phil., 175, held that the phrase "agricultural public lands" means those public lands
acquired from Spain which are neither timber nor mineral lands. This definition has been
 followed by our Supreme Court in many subsequent cases. (Montano vs. Ins. Gov't 12
Phil., 572, 574; Santiago vs. Ins. Gov't., 12, Phil., 593; Ibañes de Aldecoa vs. Ins. Gov't.,
13 Phil., 159; Ins. Gov't., vs. Aldecoa & Co., 19 Phil., 505, 516 Mercado vs. Collector of
Internal Revenue, 32 Phil., 271, 276; Molina 175, 181; Jocson vs. Director of Forestry, 39
Phil., 560, 564; and Ankron vs. Government of the Philippines, 40 Phil., 10, 14.)

Residential, commercial or industrial lots forming part of the public domain must have to
be included in one or more of these classes. Clearly, they are neither timber nor mineral,
of necessity, therefore, they must be classified as agricultural.

Viewed from the another angle, it has been held that in determining whether lands are
agricultural or not, the character of the lands is the test (Odell vs. Durant 62 N. W., 524;
Lerch vs. Missoula Brick & Tile Co., 123 p., 25). In other words, it is the susceptibility of
the land to cultivation for agricultural or not (State vs. Stewart, 190, p.,129).

Judge Pedro Magsalin, of the Court First Instance of Tayabas, rendered a decision on August 15,
1940, overruling the opposition without must explanation and decreeing the registration prayed
for the applicant. The Director of Lands appealed from the decision, and the Solicitor General
appearing for appellant, maintains that the applicant, not being a citizen of the Philippines, is
disqualified to buy or acquire the parcel of land in question and that the purchase made in
question and that the purchase made in 1938 is null and void.

This is the question squarely reversing to us for decision. The majority, although reversing the
lower court's decision and dismissing the application with we agree, abstained from the declaring
null and void the purchase made by Oh Cho in 1938 as prayed for the appellant. We deem it
necessary to state our opinion on the important question raised, it must be squarely decided.

The Solicitor General argued in his brief as follows:

I. The lower court erred decreeing the registration of the lot in question in favor of the
applicant who, according to his own voluntary admission, is a citizen of the Chinese
Republic.

(a) The phrase "agricultural land" as used in the Act of the Congress of July 1, 1902, in
the Public Land Act includes residential lots.

In this jurisdiction lands of public domain suitable for residential purposes are considered
agricultural lands under the Public Land Law. The phrase "agricultural public lands" has
well settled judicial definition. It was used for the first time in the Act of Congress of July
1, 1902, known as the Philippine Bill. Its means those public lands acquired form Spain
which are neither mineral nor timber lands (Mapa vs. Insular Government, 12 Phil., 572;
Ibañes de Aldecoa vs. Insular Government 13 Phil., 159; Ramos vs. Director of Lands, 39
Phil., 175; Jocson vs. Director of Forestry, 39 Phil., 560; Ankron vs. Government of the
Philippine Islands, 40 Phil., 10). In the case of Mapa vs. Insular Government, supra, the
Supreme Court, in defining the meaning and scope of that phrase from the context of the
sections 13 and 15 of that Act, said:
The phrase "agricultural public lands" as defined by the Act of Congress of July 1, 1902,
which phrase is also to be found in several sections of the Public Land Act (No. 926)
means those public lands acquired from Spain which are neither mineral timber lands.

xxx     xxx     xxx

"We hold that there is to be found in the act of Congress a definition of the phrase
"agricultural public lands," and after careful consideration of the question we are
satisfied that only definition which exists in said Act is the definition adopted by
the court below. Section 13 say that the Government shall "make and rules and
regulations for the lease, sale, or other dispositions of public lands other than
timber or mineral lands," To our minds that is only definition that can be said to
be given agricultural lands. In other words, that the phrase "agricultural lands"
as used in Act No. 926 means those public lands acquired from Spain which are
not timber or mineral lands. . . ." Mapa vs. Insular Government, 10 Phil., 175,
178, 182, emphasis added.)

"This phrase "agricultural public lands" was subsequently used in Act No. 926, which is
the first public land law of the Philippines. As therein used, the phrase was expressly
given by the Philippine Commission the same meaning intended for it by Congress as
interpreted in the case of Mapa vs. Insular Government, supra. This is a self-evident from
a reading of section 1, 10, 32, and 64 (subsection 6 of Act No. 926). Whenever the phrase
"agricultural public lands" is used in any of said sections, it is invariably by the
qualification "as defined by said Act of Congress of July first, nineteen hundred and
two."

"More specially, in the case of Ibañez de Aldecoa vs. Insular Government, supra, the
Supreme Court held that a residential or building lot, forming part of the public domain,
is agricultural land, irrespective of the fact that it is not actually used for purposes of
agriculture for the simple reason that it is susceptible of cultivation and may be converted
into a rural estate, and because when a land is not mineral or forestal in its nature it must
necessarily be included within the classification of a agricultural land. Because of the
special applicability of the doctrine laid down in said case, we quote at some length from
the decision therein rendered:

"The question set up in these proceedings by virtue of the appeal interposed by counsel
for Juan Ibañez de Aldecoa, is whether or not a parcel of land that is susceptible of being
cultivated, and ceasing to be agricultural land, was converted into a building lot, is
subject to the legal provisions in force regarding Government public lands which may be
alienated in favor of private individuals or corporations. . . .

xxx     xxx     xxx

"Hence, any parcel of land or building lot is susceptible of cultivation, and may
converted into a field, and planted with all kinds of vegetation ; for this reason,
where land is not mining or forestal in its nature, it must necessarily be included
 within the classification of agriculture land, not because it is actually used for the
purposes of agriculture, but because it was originally agricultural and may again
become so under other circumstances; besides the Act of Congress (of July 1,
1902) contains only three classifications, and makes no special provision with
respect to building lots or urban land that have ceased to be agricultural land. . . .

xxx     xxx     xxx

"From the language of the foregoing provisions of the law, it is deduced that, with
the exception of those comprised within the mineral and timber zone, all lands
owned by State or by the sovereign nation are public in character, and per se
alienable and, provided they are not destine to the use of public in general or
reserved by the Government in accordance with law, they may be acquired by any
private or juridical person; and considering their origin and primitive state and
the general uses to which they are accorded, they are called agricultural lands,
urbans lands and building lots being included in this classification for the
purpose of distinguishing rural and urban estates from mineral and timber lands;
the transformation they may have undergone is no obstacle to such classification
as the possessors thereof may again convert them into rural estates." (Ibañez de
Aldecoa vs. Insular Government 13 Phil., 161, 163 164, 165, 166; emphasis
added.).

(b) Under the Constitution and Commonwealth Act No. 141 (Public Land
Act), the phrase (Public Land Act), the phrase "public agricultural land"
includes lands of the public domain suitable for residential purposes.

"Section 1, Article XII of the Constitution, reads as follows:

"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 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 . . ." (Emphasis added.).

"Under the above-quote provision, the disposition exploitation, development or

utilization of the natural resources, including agricultural lands of the public domain is
limited to citizens of the Philippines or to the corporations or associations therein
mentioned. It also clearly appears from said provision that natural resources, with the
exception of public agricultural land, are not subject to alienation.

"On November 7, 1936, or more than one year after the adoption of the Constitution,
Commonwealth Act No. 141, known as the Public Land Act, was approved. Under this
Act the lands of the public have been classified into three divisions: (a) alienable or
disposable, (b) timber, and (c) mineral lands. The lands designated alienable or
disposable correspond to lands designated in the Constitution as public agricultural lands,
because under section 1, Article XII, public agricultural lands are the only natural
resources of the country which are the only natural resources of the country which are
subject to alienation or deposition.

"Section 9 of Commonwealth Act No. 141 provide that the alienable or disposable public
lands shall be classified, according to use or purposes to which they are destined, into a
agricultural, residential, commercial, industrial, etc., lands. At first blush it would seem
that under this classification residential land is different from agricultural land. The
difference however, is more apparent than real. 'Public agricultural land ' as that phrase is
used in the Constitution means alienable lands of the public domain and therefore this
phrase is equivalent to the lands classified by the Commonwealth Act No. 141 as
alienable or disposable. The classification provided in section 9 is only for purposes
administration and disposition, according to the purposes to which said lands are
especially adopted. But notwithstanding this of all said lands are essentially agricultural
public lands because only agricultural public lands are subject to alienation or disposition
under section 1, Article XII of the Constitution. A contrary view would necessarily create
a conflict between Commonwealth Act No. 141 and section 1 of Article XII of the
Constitution, and such conflict should be avoided , if possible, and said Act construed in
the light of the fundamental provisions of the Constitution and in entire harmony
therewith.

"Another universal principles applied in considering constitutional question is,

that an Act will be so construed, if possible, as to avoid conflict with the
Constitution, although such a construction may not be the most obvious or natural
one. "The Court may resort to an implication to sustain a statute, but not to
destroy it." But the courts cannot go beyond the province of legitimate
construction, in order to save a statute; and where the meaning is plain, words
cannot to be read into it or out of it for that purpose." ( 1 Sutherland, Statutory
Construction, pp. 135, 136.)

"In view of the fact that more than one than one year after the adoption of the
Constitution the National Assembly revised the Public Land Law and passed
Commonwealth Act No. 141, which a compilation of the laws relative to the lands of the
public domain and the amendments thereto, form to the Constitution.

"Where the legislature has revised a statute after a Constitution has been
adopted, such a revision is to be regarded as a legislative construction that the
statute so revised conforms to the Constitution." (59 C.J., 1102; emphasis added.)

"By the way of illustration, let us supposed that a piece or tract of public land has been
classified pursuant to section 9 of Commonwealth Act No. 141 as residential land. If, by
reason of this classification, it is maintained that said land has ceased to be agricultural
public land, it will no longer be subject to alienation or disposition by reason of the
constitutional provision that only agricultural lands are alienable; and yet such residential
lot is alienable under section 58, 59, and 60 of Commonwealth Act No. 141 to citizens of
the Philippines or to corporations or associations mentioned in section 1, Article XII of
the Constitution. Therefore, the classification of public agricultural lands into various
subdivisions is only for purposes of administration, alienation or disposition, but it does
not destroy the inherent nature of all such lands as a public agricultural lands.

"(c) Judicial interpretation of doubtful clause or phrase use in the law, controlling.

"The judicial interpretation given to the phrase "public agricultural land" is a sufficient
authority for giving the same interpretation to the phrase as used in subsequent
legislation, and this is especially so in view of the length of time during which this
interpretation has been maintained by the courts. On this point Sutherland has the
following to say:

"When a judicial interpretation has once been put upon a clause, expressed in a
vague manner by the legislature, and difficult to be understood, that ought of itself
to be sufficient authority for adopting the same construction. Buller J., said: "We
find solemn determination of these doubtful expressions in the statute, and as that
now put another construction has since prevailed, there is no reason why we
should now put another construction of the act on account of any suppose change
of convenience." This rule of construction will hold good even if the court be
opinion that the practical erroneous; so that if the matter were res integra the
court would adopt a different construction. Lord Cairns said: "I think that with
regard to statutes ... it is desirable not so much that the principle of the decision
should be capable at all times of justification, as that the law should be settled,
and should, when once settled, be maintained without any danger of vacillation or
uncertainty. "Judicial usage and practice will have weight, and when continued
for a long time will be sustained though carried beyond the pair purport of the
statute."(II Lewis' Sutherland Statutory Construction, pp. 892, 893.) .

"An important consideration affecting the weight of contemporary judicial

construction is the length of time it has continued. It is adopted, and derives great
force from being adopted, soon after the enactment of the law. It may be, and is
presumed, that the legislative sense of its policy, and of its true scope and
meaning, permeates the judiciary and controls its exposition. Having received at
that time a construction which is for the time settled, accepted, and thereafter
followed or acted upon, it has the sanction of the of the authority appointed to
expound the law, just and correct conclusions, when reached, they are, moreover,
within the strongest reasons on which founded the maxim of stare decisis. Such a
construction is public given, and the subsequent silence of the legislature is strong
evidence of acquiescence, though not conclusive. . . . (II Lewis Sutherland
Statutory Construction, pp. 894, 895.)

"Furthermore, when the phrase "public agricultural land" was used in section 1 of Article
XII of the Constitution, it is presumed that it was so used with the same judicial meaning
therefor given to it and therefor the meaning of the phrase, as used in the Constitution,
includes residential lands and another lands of the public domain, but excludes mineral
and timber lands.

"Adoption of provisions previously construed — ad. Previous construction by

Courts. — Where a statute that has been construed by the courts of the last resort
has been reenacted in same, or substantially the same, terms, the legislature is
presumed to have been familiar with its construction, and to have adopted it is
part of the law, unless a contrary intent clearly appears, or a different construction
is expressly provided for; and the same rule applies in the construction of a statute
enacted after a similar or cognate statute has been judicially construed. So where
words or phrases employed in a new statute have been construed by the court to
have been used in a particular sense in a previous statute on the same subject, or
one analogous to it, they are presumed, in the a absence of clearly expressed
intent to the contrary, to be used in the same sense in the statute as in the previous
statute." (59 C.J., 1061-1063.).

"Legislative adoption of judicial construction. — In the adoption of the code, the

legislature is presumed to have known the judicial construction which have been
placed on the former statutes; and therefore the reenactment in the code or general
revision of provisions substantially the same as those contained in the former
statutes is a legislative adoption of their known judicial constructions, unless a
contrary intent is clearly manifest. So the fact that the revisers eliminated
statutory language after it had been judicially construed shows that they had such
construction in view." (59 C. J., 1102.)

"II. The lower court erred in not declaring null and void the sale of said land to the
appellant (appellee).

"Granting that the land in question has ceased to be a part of the lands of the public
domain by reason of the long continuous,, public adverse possession of the applicant's
predecessors in interest, and that the latter had performed all the conditions essential to a
Government grant and were entitled to a certificate of title under section 48, subsection
(b), of Commonwealth Act No. 141, still the sale of said land of December 8, 1938, to the
applicant as evidenced by Exhibits B and C, was null and void for being contrary to
section 5, Article XII of the Constitution, which reads as follows:

"Save in cases of hereditary succession, no private agricultural land shall be

transferred or assigned except to individuals, corporations, or associations
qualified to acquire or hold lands of the public domain of the Philippines."

"The applicant, being a Chinese citizen, is disqualified to acquire or hold lands of the
public domain (section 1, Article XII of the Constitution; section 12, 22, 23, 33, 44, 48,
Commonwealth Act No. 141 ), and consequently also disqualified to buy and acquire
private agriculture land.
 "In view of the well settled judicial meaning of the phrase public agricultural land,' as
hereinbefore demonstrated, the phrase 'private agricultural land,' as used in the above
quoted provision, can only mean land of private ownership, whether agricultural,
residential, commercial or industrial. And this necessarily so, because the phrase
'agricultural land used in the Constitution and in the Public Land Law must be given the
same uniform meaning to wit, any land of the public domain or any land of private
ownership, which is neither mineral or forestal.

"A word or phrase repeated in a statute will bear the same meaning throughout the
statute, unless a different intention appears. ... Where words have being long used
in a technical sense and have been judicially construed to have a certain meaning,
and have been adopted by the legislature as having a certain meaning prior to a
particular statute in which they are used, the rule of construction requires that the
words used in such statute should be construed according to the sense may vary
from the strict literal meaning of the words." (II Sutherland, Statutory
Construction., p. 758.) .

"This interpretation is in harmony with the nationalistic policy, spirit and purpose of our
Constitution and laws, to wit, `to conserve and develop the patrimony of the nation,' as
solemnly enunciated in the preamble to the Constitution.

"A narrow and literal interpretation of the phrase 'private agriculture land' would impair
and defeat the nationalistic aim and general policy of our laws and would allow a gradual,
steady, and unlimited accumulation in alien hands of a substantial portion of our
patrimonial estates, to the detriment of our national solidarity, stability, and
independence. Nothing could prevent the acquisition of a great portion or the whole of a
city by subjects of a foreign power. And yet a city or urban area is more strategical than a
farm or rural land.

"The mere literal construction of section in a statute ought not to prevail if it is

opposed to the intention of the legislature apparent by the statute; and if the words
are sufficiently flexible to admit of some other construction it is to be adopted to
effectuate that intention. The intent prevails over the letter, and the letter will, if
possible be so read as to conform to the spirit of the act. While the intention of the
legislature must be ascertained from the words used to express it, the manifest
reason and the obvious purpose of the law should not be sacrificed to a liberal
interpretation of such words." (II Sutherland, Stat. Construction, pp. 721, 722.)

"We conclude, therefore, that the residential lot which the applicant seeks to register in
his name falls within the meaning of private agricultural land as this phrase is used in our
Constitution and, consequently, is not subject to acquisition by foreigners except by
hereditary succession."

The argument hold water. It expresses a correct interpretation of the Constitution and the real
intent of the Constitutional Convention.
One of our fellow members therein, Delegate Montilla, said:

The constitutional precepts that I believe will ultimately lead us to our desired goal are;
(1) the complete nationalization of our lands and natural resources; (2) the nationalization
of our commerce and industry compatible with good international practices. With the
complete nationalization of our lands and natural resources it is to be understood that our
God-given birthright should be one hundred per cent in Filipino hands. ... Lands and
natural resources are immovable and as such can be compared to the vital organs of a
person's body, the lack of possession of which may cause instant death or the shortening
of life. If we do not completely nationalize these two of our most important belongings, I
am afraid that the time will come when we shall be sorry for the time we were born. Our
independence will be just a mockery, for what kind of independence are we going to have
if a part of our country is not in our hands but in those of foreigner? (2 Aruego, The
Framing of the Philippine Constitution, p. 592.).

From the same book of Delegate Aruego, we quote:

The nationalization of the natural resources of the country was intended (1) to insure their
conservation for Filipino posterity; (2) to serve as an instrument of national defense,
helping prevent the extension into the country of foreign control through peaceful
economic penetration; and (3) to prevent making the Philippines a source of international
conflict with the consequent danger to its internal security and independence.

xxx     xxx     xxx

. . . In the preface to its report, the committee on nationalization and preservation of lands
and other natural resources said;

"International complications have often resulted from the existence of alien ownership of
land and natural resources in a weak country. Because of this danger, it is best that aliens
should be restricted in the acquisition of land and other natural resources. An example is
afforded by the case of Texas. This state was originally province of Mexico. In order to
secure its rapid settlements and development, the Mexican government offered free land
to settlers in Texas. Americans responded more rapidly than the Mexicans, and soon they
organized a revolt against Mexican rule, and then secured annexation to the United
States. A new increase of alien landholding in Mexico has brought about the desire a
prevent a repetition of the Texas affair. Accordingly the Mexican constitution of 1917
contains serious limitation on the right of aliens to hold lands and mines in Mexico. The
Filipinos should profit from this example."

xxx     xxx     xxx

It was primarily for these reasons that the Convention approved readily the proposed
principle of prohibiting aliens to acquire, exploit, develop, or utilize 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.
 For the same reasons the Convention approved equally readily the proposed principle of
prohibiting the transfer of assignment to aliens of private agricultural land, save in the
case of hereditary succession. (2 Aruego, Framing of the Philippine Constitution, pp. 604,
605, 606.).

All the foregoing show why we, having been a member of the Constitutional Convention, agree
with Solicitor General's position and concur in the result in this case, although we would go as
far as the outright pronouncement that the purchase made by appelle is null and void.

BRIONES, M., con quien estan conformes PARAS y TUASON, MM., disidente:

El solicitante en este expediente pide el registro del solar de que se trata como terreno de
propiedad privada, y tan solo con caracter supletorio invoca las disposiciones del capitulo 8.º de
la Ley No. 2874 sobre terrenos publicos (Pieza de Excepciones, pag. 3.)

Por su parte el Director de Terrenos se opone a la solicitud en virtud de tres fundamentos, a

saber: (1) porque ni el solicitante ni sus predecesores en interes pueden demonstrar titulo
suficiente sobre dicha parcela de terreno, no habiendose adquirido la misma ni por titulo de
composicion con el Estado bajo la soberania de España, ni por titulo de informacion posesoria
bajo el Real Decreto de 13 de Febrero de 1894; (2) porque el citado solar es una porcion de los
terrenos de dominio publico pertenecientes al Commonwealth de Filipinas; (3) porque siendo el
solicitante un ciudadano chino, no esta capacitado bajo las disposiciones de la Constitucion de
Filipinas para adquirir terrenos de caracter publico o privado (idem, pags. 5 y 6).

Tanto el solicitante como el Director de Terrenos practicaron sus pruebas ante un arbitro
nombrado por el Juzgado de Primera Instancia de Tayabas. Con vista de tales pruebas, el Juez
Magsalin, del referido Juzgado, dicto sentencia a favor del solicitante, de la cual transcribimos
las siguientes porciones pertinentes:

La representacion del opositor Director de Terrenos trata de probar por medio del
testimonio del Inspector del Buro de Terrenos que, el terreno objeto de la solicitud es
parte del dominio publico y ademas el solicitante es ciudadano chino, pero dicho testigo
afirmo que el terreno objeto de la presente solicitud es un solar situado dentro de la
poblacion del municipio de Guinayanga, Tayabas, y en el mismo existe una casa de
materiales fuertes y careciendo de merito esta oposicion debe desestimarse la misma.

Por tanto, previa desestimacion de la oposicion del Director de Terrenos, se adjudica con
sus mejoras la parcela de terreno objeto de la presente solicitud descrito en el plano Psu-
109117, a favor del solicitante Oh Cho, ciudadano chino, mayor de edad, casado con Yee
Shi, y residente en el municipio de Guinayanga, Tayabas, Islas Filipinas. (Decision, pag.
8, Record on Appeal.)

De lo transcrito se infiere de una manera forzosa lo siguiente: (a) que el tribunal inferior
desestimo de plano la oposicion del Director de Terrenos fundada en el supuesto de que el solar
cuestionado es parte del dominio publico; (b) que el mismo tribunal rechazo el otro fundamento
de la oposicion, esto es, que siendo el solicitante ciudadano chino esta incapacitado bajo nuestra
Constitucion para adquirir terreno, ya publico, ya privado, aunque sea un solar de caracter
urbano; (c) que, segun el fallo del Juez a quo, no siendo publico el terreno cuestionado, es
necesariamente terreno privado.

El Director de Terrenos, no estando conforme con la sentencia, apelo de ella para ante el
Tribunal de Apelacion y hace en su alegato dos señalamientos de error, ninguno de los cuales
pone en tela de juicio la calidad de privado del terreno cuestionado. El apelante no plantea
ninguna cuestion de hecho; plantea solo una cuestion de derecho. Por eso que en la
reconstitucion de este expediente — el original se quemo durante la guerra — no ha habido
necesidad de incluir las notas taquigraficas ni las pruebas documentales, y de hecho hemos
considerado y decidido este asunto sin dichas notas y pruebas. El abogado Constantino, del
apelado, en la audiencia para la reconstitucion de los autos, hizo esta manifestacion; "In view
also of the fact that the questions involved here are only questions of law, this representation
waives the right to present the evidence presented in the trial court . . . ." Por su parte, el
Procurador General, al explanar el caso en representacion del apelante Director de Terrenos,
principia su alegato con la siguiente declaracion:

This appeal is a test case. There are now several cases of exactly the same nature pending
in the trial courts.

Whether or not an alien can acquire a residential lot and register it in his name is the only
question raised in this appeal from a decision of the Court of First Instance of Tayabas
which sustained the affirmance and decreed the registration of the said property in favor
of the applicant who, by his own voluntary admission, is a citizen of the Chinese
Republic. This question is raised in connection with the constitutional provision that no
private agricultural land shall be transferred or assigned to foreigners except in cases of
hereditary succession. (Pags. 1, 2, alegato del apelante.)

Habiendose apelado de la sentencia para ante el Tribunal de Apelacion ¿por que se elevo este
asunto al Tribunal Supremo, ante el cual ya estaba pendiente aun antes de la guerra, y sin
resolverse durante la ocupacion japonesa? La razon no consta especificamente en autos, pero
como no se trata de una alzada del Tribunal de Apelacaion a la Corte Suprema, la unica
explicacion que cabe es que aquel, la percatarse de que en la apelacion no se planteaba mas que
una cuestion de derecho, ordeno, como era de rigor, el traslado del asunto a esta Corte por ser de
su jurisdiccion y competencia.

Hemos estimado necesario sentar las anteriores premisas porque las mismas sirven de base a la
argumentacion que a seguida vamos a desenvolver para fundamentar esta disidencia.

I. De lo expuesto resulta evidente que el Director de Terrenos se ha opuesto al registro solicitado,

entre otros fundamentos, porque el terreno es publico; que el tribunal inferior ha desestimado
este fundamento por "carecer de merito," fallando que el terreno es privado; que el Director de
Terrenos, en su apelacion ante nosotros, no cuestiona esta conclusion del Juez a quo, sino que
dando por admitido que el terreno es de propiedad privada, arguye, sin embargo, que bajo la
seccion 5, Articulo XII de la Constitucion de Filipinas el solicitante, por ser extranjero, no puede
adquirir terreno agricula privado, estando incluido en este concepto un solar urbano como el de
que se trata en este expediente. Planteado el asunto en tales terminos ¿puede esta Corte
considerar y resolver un punto no contendido entre las partes — un punto que esta firme y
definitivamente resuelto y no es objeto de apelacion? Dicho de otra manera: ¿puede esta Corte,
como hace la mayoria en su opinion, revocar una conclusion del tribunal-inferior que no esta
discutida en el alegato del apelante? ¿Podemos, en buena ley procesal, declarar publico el terreno
en cuestion por nuestra propia iniciativa, cuando el mismo Procurador General, que representa al
Estado, admite en su alegato el caracter privado del solar, y solo suscita una cuestion, de
derecho, a saber: que bajo nuestra Constitucion ningun acto traslativo de dominio a favor de un
extranjero es valido, asi se trata de predio urbano, porque la frase "terreno agricola privado" qe
se contiene en la Constitucion abarca no solo las fincas rusticas sino tambien las urbanas? Y,
sobre todo, ¿podemos, en equidad y justicia, considerar y revisar un punto que no solo no esta
discutido por las partes, pues lo dan por admitido y establecido, sino que es de derecho y de
hecho al propio tiempo? ¿Que base tenemos para hacerlo cuando no tenemos delante las pruebas
tanto testificales como documentales? Nuestra contestacion es, en absoluto, negativo.

La competencia de esta Corte para revisar las sentencias de los tribunales inferiores, de las cuales
se ha interpuesto apelacion, se basa en el principio de que dicha competencia, en su ejercicio,
tiene que limitarse a las cuestiones controvertidas, y esto se determina mediante el señalamiento
de errores que el apelante hace en su alegato. El articulo 19 del antiguo reglamento de los
procedimientos en este Tribunal Supremo decia en su primer parrafo lo siguiente:

Anexo al alegato del apelante y en pliego separado, se acompañara una relacion de los
errores de derecho que han de discutirse. La especificacion de cada uno de estos errores
se hara por parrafos separados, con toda claridad, de una manera concisa, y sin incurrir en
repeticiones, y seran numerados por orden correlativo.

El articulo 20 del mismo reglamento preceptuaba:

Ningun error de derecho fuera del relativo a competencia sobre la materia de un litigio,
sera tomado en consideracion como no se halle puntualizado en la relacion de los errores
y presentado como uno de los fundamentos en el alegato.

Interpretando estas disposiciones reglamentarias, la Corte hizo en el asunto de Santiago contra

Felix (24 Jur. Fil., 391), los siguientes pronunciamientos doctrinales:

1. APELACION; EFECTO DE DEJAR DE PRESENTAR RELACION DE ERRORES;

REGLA FIRMEMENTE ESTABLECIDA. — Es regla establecida por la jurisprudencia
de los Tribunales de estas Islas, en virtud de repetidas y uniformes sentencias de esta
Corte, la de que si en una apelacione el recurrente dejare de hacer señalamiento de los
errores en que haya incurrido el Tribunal inferior, y se limitare a discutir cuestiones de
hecho en general, no es posible que este Tribunal pueda considerar ni revisar la
resolucion adversa a la parte apelante, por el motivo de haberse dictado contra la ley y el
peso de las pruebas, sino que es necesario que se señale y se especifique el error o errores
que determinaron la decision apelada que el apelante califica de ilegal e injusta.
 2. Id.; Id.; Regla Igual a la Adoptada por los Tribunales de los Estados Unidos. — Igual
doctrina legal se halla en observancia en los Tribunales de los Estados Unidos de
America del Norte, toda vez que una manifestacion general de que el Juzgado erro en
dictar sentencia a favor de una de las partes, no es suficiente como base para que la Corte
pueda revisar la sentencia apelada, pues que a no ser que la apreciacion hecha por un Juez
de los hechos alegados y probados en juicio sea manifestamente contraria al resultado y
peso de las pruebas, el Tribunal de alzada suela aceptar el juicio y criterio del Juez sobre
las cuestiones de hecho, y no procede revocar sin motivo fundado la sentencia apelada.
(Enriquez contra Enriquez, 8 Jur. Fil., 574; Capellania de Tambobong contra Antonio, 8
Jur. Fil., 693; Paterno contra la Ciudad de Manila, 17 Jur. Fil., 26)" (Santiago contra
Felix, 24 Jur. Fil., 391.)

Esta doctrina se reitero posteriormente en los siguientes asuntos: Tan Me Nio contra
Administrador de Aduanas, 34 Jur. Fil., 995, 996; Hernaez contra Montelibano, 34 Jur. Fil.,
1011.

La regla 53, seccion 6, del actual reglamento de los tribunales, dispone lo siguiente:

SEC. 5. Questions that may be decided. — No error which does not affect the jurisdiction
over the subject matter will be considered unless stated in the assignment of errors and
properly argued in the brief, save as the court, at its option, may notice plain errors not
specified, and also clerical errors.

No se dira que la cuestion de si el terreno cuestionado es publico o privado, considerada y

resuelta por la mayoria en su decision sin previo señalamiento de error ni apropiada
argumentacion en el alegato del Procurador General, esta comprendida entre las salvedades de
que habla la regla arriba transcrita porque ni afecta a la jurisdiccion sobre la materia del litigio, ni
es un "plain error," o "clerical error."

Se notara que en el antiguo reglamento no habia eso de "plain errors not specified" (errores
patentes o manifiestos no especificados en el alegato). Pero ¿cabe invocar esta reserva en el caso
que nos ocupa Indudablemente que no, por las siguientes razones: (a) los autos no demuestran
que el Juez a quo cometio un error patente y manifiesto al declarar en su sentencia que el terreno
no es publico sino privado; no tenemos mas remedio que aceptar en su faz la conclusion del Juez
sentenciador sobre este respecto por la sencilla razon de que no tenemos ante nosotros las
pruebas ni testificales ni documentales, y, por tanto, no hay base para revisar, mucho menos para
revocar dicha conclusion, habiendose interpretado esta reserva en el sentido de que solo se puede
tomar "conocimiento judicial del error palpable con vista de los autos y procedimientos"; (b) aun
admitiendo por un momento, a los efectos de la argumentacion, que Su Señoria el Juez padecio
error palpable al sentar dicha conclusion, como quiera que el Procurador General no suscita la
cuestion en su alegato debe entenderse que ha renunciado a su derecho de hacerlo, optando por
fundamentar su caso en otros motivos y razones; por tanto, no estamos facultados para
considerar motu proprio el supuesto error, pues evidentemente no se trata de un descuido u
oversight del representante del Estado, sino de una renuncia deliberada, y la jurisprudencia sobre
el particular nos dice que "el proposito subyacente, fundamental de la reserva en la regla es el de
prevenir el extravio de la justicia en virtud de un descuido." He aqui algunas autoridades
pertinentes:

Purpose of exception as to plain errors. — The proviso in the rule requiring assignments
of error, permitting the court, at its option, to notice a plain error not assigned, "was and
in intended, in the interest of justice, to reserve to the appellate court the right, resting in
public duty, to take cognizance of palpable error on the face of the record and
proceedings, especially such as clearly demonstrate that the suitor has no cause of
action." Santaella vs. Otto F. Lange Co. (155 Fed., 719, 724; 84 C. C. A., 145).

The rules does not intend that we are to sift the record and deal with questions which are
of small importance, but only to notice errors which are obvious upon inspection and of a
controlling character. The underlying purpose of this reservation in the rule is to prevent
the miscarriage of justice from oversight. Mast vs. Superior Drill Co. (154 Fed., 45, 51;
83 C. C. A. 157).

II. Hasta aqui hemos desarrollado nuestra argumentacion bajo el supuesto de que la calidad de
privado del terreno litigioso no es controversia justiciable en esta instancia por no estar suscitada
la cuestion en el alegato del Procurador General ni ser materia de disputa entre las partes en la
apelacion pendiente ante nosotros; por lo que, consiguientemente, no estamos facultados para
revisar, mucho menos revocar motu proprio la conclusion del tribunal a quo sobre el particular.
Ahora vamos a laborar bajo otro supuesto — el de que el Procurador General haya hecho el
correspondiente señalamiento de error y la cuestion este, por tanto, propiamente planteada ante
esta Corte Suprema para los efectos de la revision. La pregunta naturalmente en orden es la
siguiente: ¿cometio error el Juez a quo al declarar y conceptuar como privado el terreno en
cuestion, o es, por el contrario, acertada su conclusion a este respecto? Somos de opinion que el
Juez no cometio error, que el terreno de que se trata reune las condiciones juridicas necesarias
para calificarlo como privado y diferenciarlo de una propiedad de dominio publico, y que, por
tanto, el solicitante tiene sobre la propiedad un titulo confirmable bajo las disposiciones de la
Ley de Registro de Terrenos No. 496.

Afirmase en la decision de la mayoria que el solicitante no ha podido demostrar que el o

cualquiera de sus causantes en derecho adquirio el lote del Estado mediante compra o concesion
bajo las leyes, ordenanzas y decretos promulgados por el Gobierno Español en Filipinas, o en
virtud de los tramites relativos a informacion posesoria bajo la ley hipotecaria en tiempo de
España. De esto la mayoria saca la conclusion de que el terreno cuestionado no es privado
porque, segun su criterio, "todos los terrenos que no fueron adquiridos del Gobierno (Gobierno
Español, se quiere decir), ya mediante compra, ya por concesion, pertenecen al dominio
publico"; y citando como autoridad el asunto clasico de Cariño contra el Gobierno Insular la
ponencia no admite mas excepcion a la regla que el caso en que un terreno ha estado en la
posesion del ocupante y de sus predecesores en interes desde tiempo inmemorial, pues semejante
posesion justificaria la presuncion de que el terreno nunca habia sido parte del dominio publico,
o que habia sido propiedad privada aun antes de la conquista española."

Lo que, en primer lugar, no parece correcto es la seguridad con que en la ponencia se afirma que
el terreno no se adquirio bajo la soberania española en virtud de cualquiera de los modos
conocidos en la legislacion de entonces, pues como no tenemos delante las pruebas, no hay
naturalmente manera de comprobar la certeza de la proposicion. Si se tiene en cuenta que el
Director deTerrenos se opuso a la solicitud de registro por el fundamento de que el terreno es de
dominio publico, y que el tribunal inferior desestimo este fundamento, la presuncion es que la
calidad de privado del terreno se probo satisfactoriamente, presuncion que queda robustecida si
se considera que el Procurador General, al sostener la apelacion del Gobierno, no discute ni
cuestiona en su alegato la conclusion de que el referido terreno es de propiedad particular.

Por otro lado, la mayoria parece dar un caracter demasiado absoluto y rigido a la proposicion de
que "todos los terrenos que no fueron adquiridos del Gobierno (en tiempo de España), mediante
compra o por concesion, pertenecen al dominio publico." Interpretando estrictamente la ley, esta
Corte Suprema denego el registro solicitado en el celebre asunto de Cariño contra el Gobierno
Insular que cita la mayoria en su opinion, por eso mismo que se acentua en la ponencia — por el
fundamento de que Cariño no pudo demostrar titulo de compra, concesion o informacion
posesoria expedido por el Gobierno en tiempo de España, siendo por consiguiente el terreno
parte del dominio publico. Pero al elevarse el asunto en grado de apelacion a la Corte Suprema
de los Estados Unidos, la misma revoco la sentencia de esta Corte, declarando el terreno como
propiedad privada y decretando su registro a nombre del solicitante. En la luminosa ponencia del
Magistrado Holmes se sientan conclusiones que proclama el espiritu liberal de aquel gran jurista
y reafirman con vigor democratico los derechos de propiedad de los nativos de estas Islas sobre
sus predios en contra del concepto y teoria feudales de que la Corona de España era la dueña
absoluta hasta del ultimo palmo de tierra y de que ningun habitante podia ser dueño de nada, a
menos que tuviese en sus manos un titulo o papel expedido por aquel Gobierno. He aqui lo que
dice el Magistrado Holmes:

We come, then, to the question on which the case was decided below — namely, whether
the plaintiff owns the land. The position of government, shortly stated, is that Spain
assumed, asserted, and had title to all the land in the Philippines except so far it saw fit to
permit private titles to be acquired; that there was no prescripcion against the Crown, and
that, if there was, a decree of June 25, 1880, required registration within a limited time to
make the title good; that the plaintiff's land was not registered, and therefore became, if it
was not always, public land; that the United States succeeded to the title of Spain, and so
that the plaintiff has no rights that the Philippine Government is bound to respect.

If we suppose for the moment that the government's contention is so far correct that the
Crown of Spain in form asserted a title to this land at the date of the treaty of Paris, to
which the United States succeeded, it is not to be assumed without argument that the
plaintiff's case is at an end. It is true that Spain, in its earlier decrees,"embodied the
universal feudal theory that all lands were held from the Crown, and perhaps the general
attitude of conquering nations toward people not recognized as entitled to the treatment
accorded to those in the same zone of civilization with themselves. It is true, also that, in
legal theory, sovereignty is absolute, and that, as against foreign nations, the United
States may assert, as Spain asserted, absolute power. But it does not follow that, as
against the inhabitants of the Philippines, the United States asserts that Spain had such
power. When theory is left on one side, sovereignty is a question of strength, and may
vary in degree. How far a new sovereign shall insist upon the theoretical relation of the
 subjects to the head in the past, and how far it shall recognize actual facts, are matters for
it to decide. (U. S. Supreme Court Reports, Vol. 212, p. 596.)

Mas adelante se dice lo siguiente en la citada sentencia de la Corte Suprema Federal:

It is true that, by section 14, the Government of the Philippines is empowered to enact
rules and prescribe terms for perfecting titles to public lands were some, but not all,
spanish conditions has been fulfilled, and to issue patents to natives for not more than 16
hectares of public lands actually occupied by the native or his ancestors before August
13, 1898. But this section perhaps might be satisfied if confined to cases where the
occupation was of land admitted to be public land, and had not continued for such a
length of time and under such circumstances as to give rise to the understanding that the
occupants were owners at that date. We hesitate to suppose that it was intended to
declare every native who had not a paper title a trespasser, and to set the claims of all
the wilder tribes afloat.

xxx     xxx     xxx

If the applicant's case is to be tried by the law of Spain, we do not discover such clear
proof that it was bas by that law as to satisfy us that he does not own the land. To begin
with, the older decrees and laws cited by the counsel for the plaintiff in error seem to
indicate pretty clearly that the natives were recognized as owning some lands,
irrespective of any royal grant. In other words, Spain did not assume to convert all the
native inhabitants of the Philippines into trespassers or even into tenants at will. For
instance, Book 4, title 12, Law 14 of the Recopilacion de Leyes de las Indias, cited for a
contrary conclusion in Valenton vs. Murciano (3 Phil., 537), while it commands viceroys
and others, when it seems proper, to call for the exhibition of grants, directs them to
confirm those who hold by good grants or justa prescripcion. It is true that it begins by
the characteristic assertion of feudal overlordship and the origin of all titles in the King or
his predecessors. That was theory and discourse. The fact was that titles were admitted to
exist that owed nothing to the powers of Spain beyond this recognition in their books.

Prescription is mentioned again in the royal cedula of October 15, 1754, cited in (3 Phil.,
546): "Where such possessors shall not be able to produce title deeds, it shall be
sufficient if they shall show that ancient possession, as a valid title by prescription." It
may be that this means possession from before 1700; but, at all events, the principle is
admitted. As prescription, even against Crown lands, was recognized by the laws of
Spain, we see no sufficient reason for hesitating to admit that it was recognized in the
Philippines in regard to lands over which Spain had only a paper sovereignty.

It is true that the language of articles 4 and 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, as not to confer title, but
simply to establish it, as already conferred by the decree, if not by earlier law. The royal
decree of February 13, 1894, declaring forfeited titles that were capable of adjustment
under the decree of 1880, for which adjustment had not been sought, should not be
construed as a confiscation, but as the withdrawal of a privilege. As a matter of fact, the
applicant never was disturbed. This same decree is quoted by the court of land
registration for another recognition of the common-law prescription of thirty years as still
running against alienable Crown land.

xxx     xxx     xxx

. . . Upon a consideration of the whole case we are of opinion that law and justice require
that the applicant should be granted what he seeks, and should not be deprived of what,
by the practice and belief of those among whom he lived, was his property, through a
refined interpretation of an almost forgotten law of Spain. (U. S. Supreme Court Reports,
Vol. 212, pp. 597-599.)

Resulta evidente de la jurisprudencia sentada en el citado asunto de Cariño contra el Gobierno

Insular que cualquiera que fuese la teoria acerca del superdominio feudal que la Corona de
España asumia sobre todos los terrenos en Filipinas, en la practica y en la realidad se reconocia
que el mero lapso de tiempo en la posesion (20 o 30 años, segun el caso) podia establecer y de
hecho establecia derechos privados de propiedad por justa prescripcion, y el titulo presuntivo asi
adquirido era para todos los efectos equivalente a una concesion expresa o un titulo escrito
expedido por el Gobierno. Pero de todas maneras — parafraseando lo dicho por el Magistrado
Holmes — aun suponiendo que España tenia semejante soberania o superdominio feudal sobre
todas las tierras en este archipielago, y que contra otras naciones los Estados Unidos, al suceder a
España, afirmaria dicha suberania, de ello no se sigue que contra los habitantes de Filipinas el
Gobierno americano (ahora la Republica filipina) tomaria la posicion de que España tenia tal
poder absoluto. Historicamente se sabe que el cambio de soberania tuvo el efecto de liquidar
muchas instituciones y leyes españolas que vinieron a ser obsoletas, arcaicas en el nuevo estado
de cosas, e incompatibles con el espiritu del nuevo regimen. No habia ninguna razon para que
este cambio no produjese tambien sus saludables efectos en las normas juridicas del regimen de
la propiedad sobre la tierra. Parafraseando otra vez al Magistrado Holmes, y aplicando la
doctrina al presente caso, no hay razon por que, medinate "una refinada interpretacion de una
casi olvidada ley de España," se considere como terreno publico lo que evidentemente, bajo
todos los conceptos y normas, es un terreno privado.

La jurisprudencia sentada en el asunto de Cariño contra el Gobierno Insular ha venido a

establecer la norma, la autoridad basica en los asuntos de registro ante nuestros tribunales. Al
socaire de su sentido y tendencia genuinamente liberal se han registrado bajo el sistema Torrens
infinidad de terrenos privados. En casos mucho menos meritorios que el que nos ocupa se ha
reconocido por nuestros tribunales el caracter o condicion de propiedad privada de los terrenos
sobre que versaban las solicitudes, aplicandose no las habilitadoras y supletorias clausulas de las
leyes sobre terrenos publicos — primeramente la Ley No. 926, despues la No. 2874, y
finalmente la No. 141 del Commonwealth — sino las disposiciones mas estrictas de la Ley No.
496 sobre registro de terrenos privados, bajo el sistema Torrens. No existe motivo para que esa
tendencia liberal y progresiva sufra una desviacion en el presente caso.

Pero aun bajo la legislacion española interpretada estrictamente, creemos que el terreno en
cuestion es tan privado como el terreno en el asunto de Cariño, si no mas. Segun la sentencia del
inferior — el unido dato para este examen, pues ya se ha dicho repetidas veces que no tenemos
delante las pruebas — "el terreno objeto de la presente solicitud era primitivamente de Capitana
Gina y que esta estuvo en posesion desde el año 1880, despues paso a ser de Francisco
Reformado hasta el año 1885, mas tarde o sea en 1886 fue de Claro Lagdameo, a la muerte de
este le sucedio en la posesion su viuda Fortunata Olega de Lagdameo, esta en 1929 lo vendio a
sus tres hijos Antonio, Luis y Rafael appellidados Lagdameo, segun los Exhibitos F y G, y estos
ultimos a su vez lo vendieron en 1938 al solicitante Oh Cho, segun los Exhibitos B 1-y C-1." " ...
Este terreno es un solar residencial dentro de la poblacion del municipio de Guinayangan,
Tayabas, y en el mismo existe una casa de materiales fuertes que ocupa casi todo el terreno ..."
(Pieza de Excepciones, pag. 8).

Como se ve, por lo menos desde 1880 habia un conocido propietario y poseedor del terreno — la
Capitana Gina. Ahora bien, coincide que el 25 de Junio de aquel año que precisamente cuando se
expidio el Decreto "para el ajuste y adjudicacion de los terrenos realengos ocupados
indebidamente por individuos particulares en las Islas Filipinas." Si bien es cierto que el objeto
del Decreto o ley era el ordenar que se cumpliesen y practicasen los procedimientos de ajuste y
registro descritos en el mismo, y en tal sentido el requirir que cada cual obtuviese un documento
de titulo o, en su defecto, perder su propiedad. Tambien es cierto que en el Decreto se
expresaban ciertas salvedades que paracian denotar que estos tramites formanes no eran de
rigurosa aplicacion a todo el mundo. Una de dicha salvedades, por ejemplo, proveia (articulo 5)
que, para todos los efectos legales, "todos aquellos que han estado en posesion por ciento periodo
de tiempo serian considerados como dueños — para terreno cultivado, 20 20 años sin
interrupcion, es suficiente, y para terreno no cultivado, 30 años." Y el articulo 6 dispone que "las
partes interesadas no incluidas en los dos articulos anteriores (los articulos que reconocen la
prescripcion de 20 y 30 años) podran legalizar su posesion, y consiguientemente adquirir pleno
dominio sobre dichos terrenos, mediante procedimientos de ajuste y adjudicacion tramitados de
la siguiente manera." Esta ultima disposicion parece indicar, por sus terminos, que no es
aplicable a aquellos que ya han sido declarados dueños en virtud del simple transcurso de cierto
lapso de tiempo (Vease Cariño contra Gobierno Insular, supra, 598).

No consta en la sentencia del inferior que Capitana Gina se haya acogido a las disposiciones del
referido Decreto de 25 de Junio de 1880, obteniendo un documento de titulo para legalizar su
posesion, pero tampoco consta positivamente lo contrario, pues no tenemos ante nosotros las
pruebas. Pero aun suponiendo que no se hayan cumplido los tramites formales prescritos en el
Decreto, de ello no se sigue que el terreno no era ya privado entonces, pues la presuncion es que
no hubo menester de semejante formalidad porque la Capitana Gina o sus causantes en derecho
ya habian sido declarados dueños del predio por el mero transcurso de un lapso de tiempo, a
tenor de las salvedades de que se ha hecho mencion. Esta presuncion es tanto mas logica cuanto
que el articulo 8 del Decreto proveia para el caso de partes que no solicitaban dentro del plazo de
un año el ajuste y adjudicacion de terrenos de cuya posesion disfrutaban indebidamente, y
conminaba que el Tesoro "reasumira el dominio del Estado sobre los terrenos" y vendera en
subasta la parte que no se reserva para si; y no solo no consta en autos que la posesion de
Capitata Gina o de sus causahabientes en derecho se haya considerado jamas como ilegal o que
el Estao y sus agentes hayan adoptado y practicado contra ellos las diligencias y procedimientos
de que trata el cittado articulo 8 del Decreto, sino que, por el contrario, consta en la sentencia que
desde Capitana Gina en 1880 hubo sucesivas transmisiones de derechos primeramente a
Francisco Reformado en 1885 y despues a Claro Lagdameo en 1886, y a la muerte de este ultimo
a su viuda Fortunata Olega de Lagdameo, de quien pase el titulo en virtud de compraventa a sus
hijos Antonio, Luis y Rafael apellidados Lagdameo, y la ultima transaccion sobre el solar tuvo
lugar en fecha bastante reciente, en 1938, cuando los ultimamente nombrados lo vendieron a Oh
Cho el solicitante en el presente expediente de registro. De todo lo cual se deduce que el solar en
cuestion fue considerado siempre como propiedad privada — por lomenos alli donde la memoria
alcanza — desde 1880 hasta que fenecio la soberania americana en Filipinas, y que ni el Estado
ni sus agentes se entrometieron jamas en el hecho de su posesion exclusiva, continua y publica a
titulo de dueño por diferentes personas no solo bajo el Decreto de 25 de Junio de 1880 tantas
veces mencionado, sino aun bajo el Decreto de 13 de Febrero de 1894 (informacion posesoria)
que fue practicamente el ultimo decreto expedido en las postrimerias de la soberania española en
relacion con el ajuste y adjudicacion de terrenos realengos o publicos. Y no se diga que ello
habria sido por inadvertencia de las autoridades, particularmente del Fisco, porque tratandose de
un solar situado en la misma poblacion de Guinayangan, uno de los pueblos mas antiguos de la
provincia de Tayabas, es indudable que si no reuniera las condiciones y requisitos para ser
conceptuado como propiedad privada y la posesion de sus ocupantes sucesivos fuese indebida e
ilegal, ya los agentes del Fisco y Tesoro lo hubiesen prestamente confiscado a tenor del articulo
8 ya citado del Decreto de 25 de Junio de 1880 (Vease Cariño contra Gobierno Insular, ut supra
598.) El que nada de esto haya acontecido es la mejor prueba de que en tiempo de España los
diferentes y sucesivos ocupantes de este solar ya tenian titulo dominical perfecto, y es
sencillamente absurdo, ridiculo que ahora, al cabo de 66 años, se declare publico el terreno; y
todo ¿por que y para que — para rendir sometimiento, repitiendo de nuevo la sutil ironia del
Magistrado Homles, a la "refinada interpretacion de una casi olvidada ley de Espana." Y resulta
mas la futilidad de este tardio tributo a un anacronismo, a una momia juridica de un pasado cada
vez mas remoto, si se considera que cuando el Magistrado Homes pronuncio su sentencia a todas
luces libera y progresiva (23 de Enero de 1909) estabamos tan solo a escasamente 10 años desde
la caida de la soberania española en Filipinas mientras que ahora que se intenta una radical
desviacion del surco trazado por la solida reja de dicha sentencia estamos ya casi a medio siglo
de distancia, con pleno dominio republicano sobre el territorio nacional. Esto no debiera
preocuparnos si no fuese porque esta decision de ahora puede ser interpretada como una
abrogacion de tantos precedentes moldeados en la turquesa de la doctrina holmesiana, y al propio
tiempo como la demarcacion del punto de partida de una nueva ruta en nuestra jurisprudencia
sobre registro de terrenos.

Sin embargo, en la opinion de la mayoria se dice que el solicitante no puede alegar con exito que
su lote es terreno privado porque la posesion de su primer predecessor (Capitana Gina) comenzo
solo en 1880, mientras que en el asunto de Cariño contra El gobierno Insular, es exige como
requisito la posesion desde tiempo inmemorial, posesion que, segun la mayoria. "justificaria la
presuncion de que el terreno nunca habia sido parte del dominio publico, o que habia sido
propiedad privada aun antes de la conquista española." No parece sino que se quiere señalar una
fecha, un año, como norma para determinar la inmemorialidad del comienzo posesorio. Pero
¿que fecha, que año seria este? ¿1870, '60, '50? ¿No seria suficiente v. gr. 1875, '65, o '55? En el
asunto de Cariño la fecha conocida y recordada de la posesion inicial podia fijarse alrededor de
la mitad del siglo pasado, o sea 1849, pues segun las pruebas, Cariño y sus antecesores habian
poseido el terreno algo mas de 50 años hasta el tratado de Paris — Abril 11, 1899. En el presente
caso, desde Capitana Gina hasta que el solicitante presento su solicitud de registro el 17 de
Enero, 1940, habian transcurrido 60 años; de suerte que en cuanto al tiempo de la posesion
ambos casos son identicos. Con una ventaja a favor del presente caso, a saber: mientras en el
asunto de Cariño las tierras objeto de la solicitud eran pasto, en gran parte, y solo cultivadas unas
cuantas porciones, en el que nos ocupa el lote es urbano, sino en uno de los pueblos mas antiguos
de Filipinas, con una casa de materiales fuertes enclavada en el. Es innegabl que la posesion de
un solar urbano es mas concreta, mas terminante y mas adversa a todo el mundo, sin excluir el
Estado.

Pero aun limitandonos a la posesion bajo la soberania española para los efectos de la calificacion
del terreno como propiedad privada, todavia se puede sosener que el presente caso es tan bueno
si no mejor que el de Cariño. En el asunto de Cariño el punto de partida conocido es alrededor de
1849; en el nuestro, 1880, en que comenzo la posesion de Capitana Gina, segun la sentencia
apelada. Pero esto no quiere decir que antes de Capitana Gina el solar no fuese ya finca urbana,
habida por algun otro como propiedad particular. Hay que tener en cuenta que se trata de un solar
ubicado en la poblacion de Guinayangan, uno de los mas antiguos en Tayabas. No tenemos
delante la fecha exacta de la fundacion de dicho pueblo, y no tenemos tiempo ahora para hacer
investigacion historica. Pero afortunadamente hemos logrado salvar de la devastacion causada
por la reciente guerra una parte sustancial de nuestra biblioteca privada, y uno de los libros
salvados es el celebrado Diccionario Geografico, Estadistico e Historico de las Islas Filipinas
publicado en Madrid por Fr. Manuel Buzeta y Fr. Felipe Bravo en 1950, segun el pie de
imprenta, de dos volumenes. En el 2.º tomo, pp. 70 y 71, se da una descripcion del pueblo de
Guinayanga, con buena copia de datos historicos, geograficos, sociales y economicos. Comienza
la descripcion de esta manera: "Pueblo con cura y gobernadorcillo, en la Isla de Luzon, provincia
de Tayabas, dioc, de Nueva caceres"; . . "tiene como unas 1,500 casas, en general de sencilla
construccion, distinguiendose como de mejor fabrica la casa parroquial y la llamada tribunal de
justicia, donde esta la carcel. ." Considerando que podemos tomas conocimiento judicial de que
en tiempo de España el municipio y la parroquia eran la culminacion de un lento y largo proceso
de civilizacion y cristianizacion, podemos, por tanto, presumir que mucho antes de 1850 — 50,
70 o 100 años — el pueblo de Guinayangan ya era una unidad geografiva, civil y espiritual, en
toda regla, y con caracteres definitivos de viabilidad urbana. Tambien cabe perfectamente
presumir que sus habitantes poseian sus respectivos solares a titulo de dueños, al igual que lo que
ocurria en otros municipios debidamente organizados. No cabe presumir que el Estado les
permitiera ocupar indebidamente sus solares, sin que tomase contra ellos la accion de que habla
el articulo 8 del referido Decreto de 25 de Junio de 1880; y ya hemos visto que no consta en
autos que el solar en cuestion haya sido jamas confiscado por los agentes del Fisco o Tesoro, o
declarada ilegal la posesion sobre el mismo, a tenor de lo ordenado en el mencionado Decreto.
Asi que desde cualquier angulo que se vea el presente asunto, cae perfectamente bajo las normas
de posesion inmemorial establecidas en el asunto de Cariño.
III. Demostrado ya que el terreno en cuestion es privado, resulta forzosa la conclusion de que el
solicitante tiene derecho a que se confirme su titulo bajo las disposiciones de la Ley de Registro
de Terrenos No. 496, de acuerdo con el sistema Torrens. Es doctrina firmemente establecida en
esta jurisdiccion que un extranjero tiene perfecto derecho a que se registre a su nombre un
terreno privado, bajo el sistema Torrens, y que las disposiciones de la ley de terrenos publicos
son inaplicables a terrenos privados (veanse Agari contra Gobierno de las Islas Filipinas, 42 Jur.
Fil., 150; Tan Yungquip contra Director de Terrenos, 42 Jur. Fil., 134; Central Capiz contra
Ramirez, 40 Jur. Fil., 926). En el primer asunto citado el solicitante era un japones llamado
Ichisuke Agari y la solicitud se estimo por tratarse de un terreno privado, adquirido en tiempo de
España mediant composicion con el estado. En el segundo asunto el solicitante era un chino y se
estimo la solicitud por la misma razon, habiendose probado una posesion conocida y recordada
de 30 a 40 años con anteriorida a la presentacion de la solicitud, es decir, un tiempo mas corto
que el del presente caso. Lo propio sucedio en el tercer asunto citado, siendo españoles los
dueños de la finca. Confirmese, por tanto, la sentencia apelada.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-27952 February 15, 1982

TESTATE ESTATE OF JOSE EUGENIO RAMIREZ, MARIA LUISA PALACIOS,

Administratrix, petitioner-appellee,
vs.
MARCELLE D. VDA. DE RAMIREZ, ET AL., oppositors, JORGE and ROBERTO
RAMIREZ, legatees, oppositors- appellants.

ABAD SANTOS, J.:

The main issue in this appeal is the manner of partitioning the testate estate of Jose
Eugenio Ramirez among the principal beneficiaries, namely: his widow Marcelle
Demoron de Ramirez; his two grandnephews Roberto and Jorge Ramirez; and his
companion Wanda de Wrobleski.

The task is not trouble-free because the widow Marcelle is a French who lives in Paris,
while the companion Wanda is an Austrian who lives in Spain. Moreover, the testator
provided for substitutions.

Jose Eugenio Ramirez, a Filipino national, died in Spain on December 11, 1964, with
only his widow as compulsory heir. His will was admitted to probate by the Court of First
Instance of Manila, Branch X, on July 27, 1965. Maria Luisa Palacios was appointed
administratrix of the estate. In due time she submitted an inventory of the estate as
follows:

INVENTARIO

Una sexta parte (1/6) proindiviso de un te

rreno, con sus mejoras y edificaciones, situadoen

la Escolta, Manila............................................................. P500,000.00

Una sexta parte (1/6) proindiviso de dos

parcelas de terreno situadas en Antipolo, Rizal................... 658.34

Cuatrocientos noventa y uno (491) acciones

de la 'Central Azucarera de la Carlota a P17.00

por accion ................................................................................8,347.00

Diez mil ochocientos seize (10,806) acciones

de la 'Central Luzon Milling Co.', disuelta y en

liquidacion a P0.15 por accion ..............................................1,620.90

Cuenta de Ahorros en el Philippine Trust

Co.............................................................................................. 2,350.73

TOTAL.............................................................. P512,976.97

MENOS:

Deuda al Banco de las Islas Filipinas, garan-

tizada con prenda de las acciones de La Carlota ......... P 5,000,00

VALOR LIQUIDO........................................... P507,976.97

The testamentary dispositions are as follows:

A.—En nuda propiedad, a D. Roberto y D. Jorge Ramirez, ambas menores de edad,

residentes en Manila, I.F., calle 'Alright, No. 1818, Malate, hijos de su sobrino D. Jose
Ma. Ramirez, con sustitucion vulgar a favor de sus respectivos descendientes, y, en su
defecto, con sustitucion vulgar reciprocal entre ambos.

El precedente legado en nuda propiedad de la participacion indivisa de la finca Santa

Cruz Building, lo ordena el testador a favor de los legatarios nombrados, en atencion a
 que dicha propiedad fue creacion del querido padre del otorgante y por ser aquellos
continuadores del apellido Ramirez,

B.—Y en usufructo a saber: —

a. En cuanto a una tercera parte, a favor de la esposa del testador, Da. Marcelle
Ramirez, domiciliada en IE PECO, calle del General Gallieni No. 33, Seine Francia, con
sustitucion vulgar u fideicomisaria a favor de Da. Wanda de Wrobleski, de Palma de
Mallorca, Son Rapina Avenida de los Reyes 13,

b.—Y en cuanto a las dos terceras partes restantes, a favor de la nombrada Da. Wanda
de Nrobleski con sustitucion vulgar v fideicomisaria a saber:—

En cuanto a la mitad de dichas dos terceras partes, a favor de D. Juan Pablo Jankowski,
de Son Rapina Palma de Mallorca; y encuanto a la mitad restante, a favor de su sobrino,
D. Horace V. Ramirez, San Luis Building, Florida St. Ermita, Manila, I.F.

A pesar de las sustituciones fideiconiisarias precedentemente ordinadas, las

usufiructuarias nombradas conjuntamente con los nudo propietarios, podran en cualquier
memento vender a tercero los bienes objeto delegado, sin intervencion alguna de los
titulares fideicomisaarios.

On June 23, 1966, the administratrix submitted a project of partition as follows: the
property of the deceased is to be divided into two parts. One part shall go to the widow
'en pleno dominio" in satisfaction of her legitime; the other part or "free portion" shall go
to Jorge and Roberto Ramirez "en nuda propriedad." Furthermore, one third (1/3) of the
free portion is charged with the widow's usufruct and the remaining two-thirds (2/3) with
a usufruct in favor of Wanda.

Jorge and Roberto opposed the project of partition on the grounds: (a) that the
provisions for vulgar substitution in favor of Wanda de Wrobleski with respect to the
widow's usufruct and in favor of Juan Pablo Jankowski and Horacio V. Ramirez, with
respect to Wanda's usufruct are invalid because the first heirs Marcelle and Wanda)
survived the testator; (b) that the provisions for fideicommissary substitutions are also
invalid because the first heirs are not related to the second heirs or substitutes within
the first degree, as provided in Article 863 of the Civil Code; (c) that the grant of a
usufruct over real property in the Philippines in favor of Wanda Wrobleski, who is an
alien, violates Section 5, Article III of the Philippine Constitution; and that (d) the
proposed partition of the testator's interest in the Santa Cruz (Escolta) Building between
the widow Marcelle and the appellants, violates the testator's express win to give this
property to them Nonetheless, the lower court approved the project of partition in its
order dated May 3, 1967. It is this order which Jorge and Roberto have appealed to this
Court.

1. The widow's legitime.

The appellant's do not question the legality of giving Marcelle one-half of the estate in
full ownership. They admit that the testator's dispositions impaired his widow's legitime.
Indeed, under Art. 900 of the Civil Code "If the only survivor is the widow or widower,
she or he shall be entitled to one-half of the hereditary estate." And since Marcelle alone
survived the deceased, she is entitled to one-half of his estate over which he could
impose no burden, encumbrance, condition or substitution of any kind whatsoever. (Art.
904, par. 2, Civil Code.)

It is the one-third usufruct over the free portion which the appellants question and
justifiably so. It appears that the court a quo approved the usufruct in favor of Marcelle
because the testament provides for a usufruct in her favor of one-third of the estate. The
court a quo erred for Marcelle who is entitled to one-half of the estate "en pleno
dominio" as her legitime and which is more than what she is given under the will is not
entitled to have any additional share in the estate. To give Marcelle more than her
legitime will run counter to the testator's intention for as stated above his dispositions
even impaired her legitime and tended to favor Wanda.

2. The substitutions.

It may be useful to recall that "Substitution is the appoint- judgment of another heir so
that he may enter into the inheritance in default of the heir originally instituted." (Art.
857, Civil Code. And that there are several kinds of substitutions, namely: simple or
common, brief or compendious, reciprocal, and fideicommissary (Art. 858, Civil Code.)
According to Tolentino, "Although the Code enumerates four classes, there are really
only two principal classes of substitutions: the simple and the fideicommissary. The
others are merely variations of these two." (111 Civil Code, p. 185 [1973].)

The simple or vulgar is that provided in Art. 859 of the Civil Code which reads:

ART. 859. The testator may designate one or more persons to substitute the heir or heirs
instituted in case such heir or heirs should die before him, or should not wish, or should
be incapacitated to accept the inheritance.

A simple substitution, without a statement of the cases to which it refers, shall comprise
the three mentioned in the preceding paragraph, unless the testator has otherwise
provided.

The fideicommissary substitution is described in the Civil Code as follows:

ART. 863. A fideicommissary substitution by virtue of which the fiduciary or first heir
instituted is entrusted with the obligation to preserve and to transmit to a second heir the
whole or part of inheritance, shall be valid and shall take effect, provided such
substitution does not go beyond one degree from the heir originally instituted, and
provided further that the fiduciary or first heir and the second heir are living at time of the
death of the testator.

It will be noted that the testator provided for a vulgar substitution in respect of the
legacies of Roberto and Jorge Ramirez, the appellants, thus: con sustitucion vulgar a
favor de sus respectivos descendientes, y, en su defecto, con substitution vulgar
reciprocal entre ambos.
The appellants do not question the legality of the substitution so provided. The
appellants question the sustitucion vulgar y fideicomisaria a favor de Da. Wanda de
Wrobleski" in connection with the one-third usufruct over the estate given to the widow
Marcelle However, this question has become moot because as We have ruled above,
the widow is not entitled to any usufruct.

The appellants also question the sustitucion vulgar y fideicomisaria in connection with
Wanda's usufruct over two thirds of the estate in favor of Juan Pablo Jankowski and
Horace v. Ramirez.

They allege that the substitution in its vulgar aspect as void because Wanda survived
the testator or stated differently because she did not predecease the testator. But dying
before the testator is not the only case for vulgar substitution for it also includes refusal
or incapacity to accept the inheritance as provided in Art. 859 of the Civil Code, supra.
Hence, the vulgar substitution is valid.

As regards the substitution in its fideicommissary aspect, the appellants are correct in
their claim that it is void for the following reasons:

(a) The substitutes (Juan Pablo Jankowski and Horace V. Ramirez) are not related to
Wanda, the heir originally instituted. Art. 863 of the Civil Code validates a
fideicommissary substitution "provided such substitution does not go beyond one
degree from the heir originally instituted."

What is meant by "one degree" from the first heir is explained by Tolentino as follows:

Scaevola Maura, and Traviesas construe "degree" as designation, substitution, or

transmission. The Supreme Court of Spain has decidedly adopted this construction. From
this point of view, there can be only one tranmission or substitution, and the substitute
need not be related to the first heir. Manresa, Morell and Sanchez Roman, however,
construe the word "degree" as generation, and the present Code has obviously followed
this interpretation. by providing that the substitution shall not go beyond one degree "from
the heir originally instituted." The Code thus clearly indicates that the second heir must be
related to and be one generation from the first heir.

From this, it follows that the fideicommissary can only be either a child or a parent of the
first heir. These are the only relatives who are one generation or degree from the
fiduciary (Op. cit., pp. 193-194.)

(b) There is no absolute duty imposed on Wanda to transmit the usufruct to the
substitutes as required by Arts. 865 and 867 of the Civil Code. In fact, the appellee
admits "that the testator contradicts the establishment of a fideicommissary substitution
when he permits the properties subject of the usufruct to be sold upon mutual
agreement of the usufructuaries and the naked owners." (Brief, p. 26.)

3. The usufruct of Wanda.

The appellants claim that the usufruct over real properties of the estate in favor of
Wanda is void because it violates the constitutional prohibition against the acquisition of
lands by aliens.

The 1935 Constitution which is controlling provides as follows:

SEC. 5. Save in cases of hereditary succession, no private agricultural land shall be

transferred or assigned except to individuals, corporations, or associations qualified to
acquire or hold lands of the public domain in the Philippines. (Art. XIII.)

The court a quo upheld the validity of the usufruct given to Wanda on the ground that
the Constitution covers not only succession by operation of law but also testamentary
succession. We are of the opinion that the Constitutional provision which enables aliens
to acquire private lands does not extend to testamentary succession for otherwise the
prohibition will be for naught and meaningless. Any alien would be able to circumvent
the prohibition by paying money to a Philippine landowner in exchange for a devise of a
piece of land.

This opinion notwithstanding, We uphold the usufruct in favor of Wanda because a

usufruct, albeit a real right, does not vest title to the land in the usufructuary and it is the
vesting of title to land in favor of aliens which is proscribed by the Constitution.

IN VIEW OF THE FOREGOING, the estate of Jose Eugenio Ramirez is hereby ordered
distributed as follows:

One-half (1/2) thereof to his widow as her legitime;

One-half (1/2) thereof which is the free portion to Roberto and Jorge Ramirez in naked
ownership and the usufruct to Wanda de Wrobleski with a simple substitution in favor of
Juan Pablo Jankowski and Horace V. Ramirez.

The distribution herein ordered supersedes that of the court a quo. No special
pronouncement as to costs.

SO ORDERED.