G.R. No.

L-17587

September 12, 1967

PHILIPPINE BANKING CORPORATION, representing the estate of JUSTINA SANTOS Y CANON FAUSTINO, deceased, Plaintiff-Appellant, vs. LUI SHE in her own behalf and as administratrix of the intestate estate of Wong Heng, deceased, Defendant-Appellant.

CASTRO, J.: chanrobles virtual law library Justina Santos y Canon Faustino and her sister Lorenzo were the owners in common of a piece of land in Manila. This parcel, with an area of 2,582.30 square meters, is located on Rizal Avenue and opens into Florentino Torres street at the back and Katubusan street on one side. In it are two residential houses with entrance on Florentino Torres street and the Hen Wah Restaurant with entrance on Rizal Avenue. The sisters lived in one of the houses, while Wong Heng, a Chinese, lived with his family in the restaurant. Wong had been a long-time lessee of a portion of the property, paying a monthly rental of P2,620.chanroblesvirtualawlibrary chanrobles virtual law library On September 22, 1957 Justina Santos became the owner of the entire property as her sister died with no other heir. Then already well advanced in years, being at the time 90 years old, blind, crippled and an invalid, she was left with no other relative to live with. Her only companions in the house were her 17 dogs and 8 maids. Her otherwise dreary existence was brightened now and then by the visits of Wong's four children who had become the joy of her life. Wong himself was the trusted man to whom she delivered various amounts for safekeeping, including rentals from her property at the corner of Ongpin and Salazar streets and the rentals which Wong himself paid as lessee of a part of the Rizal Avenue property. Wong also took care of the payment; in her behalf, of taxes, lawyers' fees, funeral expenses, masses, salaries of maids and security guard, and her household expenses.chanroblesvirtualawlibrary chanrobles virtual law library "In grateful acknowledgment of the personal services of the lessee to her," Justina Santos executed on November 15, 1957 a contract of lease (Plff Exh. 3) in favor of Wong, covering the portion then already leased to him and another portion fronting Florentino Torres street. The lease was for 50 years, although the lessee was given the right to withdraw at any time from the agreement; the monthly rental was P3,120. The contract covered an area of 1,124 square meters. Ten days later (November 25), the contract was amended (Plff Exh. 4) so as to make it cover the entire property, including the portion on which the house of Justina Santos stood, at an additional monthly rental of P360. For his part Wong undertook to pay, out of the rental due from him, an amount not exceeding P1,000 a month for the food of her dogs and the salaries of her maids.chanroblesvirtualawlibrary chanrobles virtual law library On December 21 she executed another contract (Plff Exh. 7) giving Wong the option to buy the leased premises for P120,000, payable within ten years at a monthly installment of P1,000. The option, written in Tagalog, imposed on him the obligation to pay for the food of the dogs and the salaries of the maids in her household, the charge not to exceed P1,800 a month. The option was conditioned on his obtaining Philippine citizenship, a petition for which was then pending in the Court of First Instance of Rizal. It appears, however, that this application for naturalization was withdrawn when it was discovered that he was not a resident of Rizal. On October 28, 1958 she filed a petition to adopt him and his children on the erroneous belief that adoption would confer on them Philippine citizenship. The error was discovered and the proceedings were abandoned.chanroblesvirtualawlibrary chanrobles virtual law library On November 18, 1958 she executed two other contracts, one (Plff Exh. 5) extending the term of the lease to 99 years, and another (Plff Exh. 6) fixing the term of the option of 50 years. Both contracts are written in Tagalog.chanroblesvirtualawlibrary chanrobles virtual law library In two wills executed on August 24 and 29, 1959 (Def Exhs. 285 & 279), she bade her legatees to respect the contracts she had entered into with Wong, but in a codicil (Plff Exh. 17) of a later date (November 4, 1959) she appears to have a change of heart. Claiming that the various contracts were made by her because of machinations and inducements practiced by him, she now directed her executor to secure the annulment of the contracts.chanroblesvirtualawlibrary chanrobles virtual law library On November 18 the present action was filed in the Court of First Instance of Manila. The complaint alleged that the contracts were obtained by Wong "through fraud, misrepresentation, inequitable conduct, undue influence and abuse of confidence and trust of and (by) taking advantage of the helplessness of the plaintiff and were made to circumvent the constitutional provision prohibiting aliens from acquiring lands in the Philippines and also of the Philippine Naturalization Laws." The court was asked to direct the Register of Deeds of Manila to cancel the registration of the contracts and to order Wong to pay Justina Santos the additional rent of P3,120 a month from November 15, 1957 on the allegation that the reasonable rental of the leased premises was P6,240 a month.chanroblesvirtualawlibrary chanrobles virtual law library In his answer, Wong admitted that he enjoyed her trust and confidence as proof of which he volunteered the information that, in addition to the sum of P3,000 which he said she had delivered to him for safekeeping, another sum of P22,000 had been deposited in

a joint account which he had with one of her maids. But he denied having taken advantage of her trust in order to secure the execution of the contracts in question. As counterclaim he sought the recovery of P9,210.49 which he said she owed him for advances.chanroblesvirtualawlibrary chanrobles virtual law library Wong's admission of the receipt of P22,000 and P3,000 was the cue for the filing of an amended complaint. Thus on June 9, 1960, aside from the nullity of the contracts, the collection of various amounts allegedly delivered on different occasions was sought. These amounts and the dates of their delivery are P33,724.27 (Nov. 4, 1957); P7,344.42 (Dec. 1, 1957); P10,000 (Dec. 6, 1957); P22,000 and P3,000 (as admitted in his answer). An accounting of the rentals from the Ongpin and Rizal Avenue properties was also demanded.chanroblesvirtualawlibrary chanrobles virtual law library In the meantime as a result of a petition for guardianship filed in the Juvenile and Domestic Relations Court, the Security Bank & Trust Co. was appointed guardian of the properties of Justina Santos, while Ephraim G. Gochangco was appointed guardian of her person.chanroblesvirtualawlibrary chanrobles virtual law library In his answer, Wong insisted that the various contracts were freely and voluntarily entered into by the parties. He likewise disclaimed knowledge of the sum of P33,724.27, admitted receipt of P7,344.42 and P10,000, but contended that these amounts had been spent in accordance with the instructions of Justina Santos; he expressed readiness to comply with any order that the court might make with respect to the sums of P22,000 in the bank and P3,000 in his possession.chanroblesvirtualawlibrary chanrobles virtual law library The case was heard, after which the lower court rendered judgment as follows: [A]ll the documents mentioned in the first cause of action, with the exception of the first which is the lease contract of 15 November 1957, are declared null and void; Wong Heng is condemned to pay unto plaintiff thru guardian of her property the sum of P55,554.25 with legal interest from the date of the filing of the amended complaint; he is also ordered to pay the sum of P3,120.00 for every month of his occupation as lessee under the document of lease herein sustained, from 15 November 1959, and the moneys he has consigned since then shall be imputed to that; costs against Wong Heng. From this judgment both parties appealed directly to this Court. After the case was submitted for decision, both parties died, Wong Heng on October 21, 1962 and Justina Santos on December 28, 1964. Wong was substituted by his wife, Lui She, the other defendant in this case, while Justina Santos was substituted by the Philippine Banking Corporation.chanroblesvirtualawlibrary chanrobles virtual law library Justina Santos maintained - now reiterated by the Philippine Banking Corporation - that the lease contract (Plff Exh. 3) should have been annulled along with the four other contracts (Plff Exhs. 4-7) because it lacks mutuality; because it included a portion which, at the time, was in custodia legis; because the contract was obtained in violation of the fiduciary relations of the parties; because her consent was obtained through undue influence, fraud and misrepresentation; and because the lease contract, like the rest of the contracts, is absolutely simulated.chanroblesvirtualawlibrary chanrobles virtual law library Paragraph 5 of the lease contract states that "The lessee may at any time withdraw from this agreement." It is claimed that this stipulation offends article 1308 of the Civil Code which provides that "the contract must bind both contracting parties; its validity or compliance cannot be left to the will of one of them." chanrobles virtual law library We have had occasion to delineate the scope and application of article 1308 in the early case of Taylor v. Uy Tieng Piao.1 We said in that case: Article 1256 [now art. 1308] of the Civil Code in our opinion creates no impediment to the insertion in a contract for personal service of a resolutory condition permitting the cancellation of the contract by one of the parties. Such a stipulation, as can be readily seen, does not make either the validity or the fulfillment of the contract dependent upon the will of the party to whom is conceded the privilege of cancellation; for where the contracting parties have agreed that such option shall exist, the exercise of the option is as much in the fulfillment of the contract as any other act which may have been the subject of agreement. Indeed, the cancellation of a contract in accordance with conditions agreed upon beforehand is fulfillment.2 And so it was held in Melencio v. Dy Tiao Lay 3 that a "provision in a lease contract that the lessee, at any time before he erected any building on the land, might rescind the lease, can hardly be regarded as a violation of article 1256 [now art. 1308] of the Civil Code."chanrobles virtual law library The case of Singson Encarnacion v. Baldomar 4 cannot be cited in support of the claim of want of mutuality, because of a difference in factual setting. In that case, the lessees argued that they could occupy the premises as long as they paid the rent. This is of course untenable, for as this Court said, "If this defense were to be allowed, so long as defendants elected to continue the lease by continuing the payment of the rentals, the owner would never be able to discontinue it; conversely, although the owner should desire the lease to continue the lessees could effectively thwart his purpose if they should prefer to terminate the contract by the simple

expedient of stopping payment of the rentals." Here, in contrast, the right of the lessee to continue the lease or to terminate it is so circumscribed by the term of the contract that it cannot be said that the continuance of the lease depends upon his will. At any rate, even if no term had been fixed in the agreement, this case would at most justify the fixing of a period 5 but not the annulment of the contract.chanroblesvirtualawlibrary chanrobles virtual law library Nor is there merit in the claim that as the portion of the property formerly owned by the sister of Justina Santos was still in the process of settlement in the probate court at the time it was leased, the lease is invalid as to such portion. Justina Santos became the owner of the entire property upon the death of her sister Lorenzo on September 22, 1957 by force of article 777 of the Civil Code. Hence, when she leased the property on November 15, she did so already as owner thereof. As this Court explained in upholding the sale made by an heir of a property under judicial administration: That the land could not ordinarily be levied upon while in custodia legis does not mean that one of the heirs may not sell the right, interest or participation which he has or might have in the lands under administration. The ordinary execution of property in custodia legis is prohibited in order to avoid interference with the possession by the court. But the sale made by an heir of his share in an inheritance, subject to the result of the pending administration, in no wise stands in the way of such administration. 6 It is next contended that the lease contract was obtained by Wong in violation of his fiduciary relationship with Justina Santos, contrary to article 1646, in relation to article 1941 of the Civil Code, which disqualifies "agents (from leasing) the property whose administration or sale may have been entrusted to them." But Wong was never an agent of Justina Santos. The relationship of the parties, although admittedly close and confidential, did not amount to an agency so as to bring the case within the prohibition of the law.chanroblesvirtualawlibrary chanrobles virtual law library Just the same, it is argued that Wong so completely dominated her life and affairs that the contracts express not her will but only his. Counsel for Justina Santos cites the testimony of Atty. Tomas S. Yumol who said that he prepared the lease contract on the basis of data given to him by Wong and that she told him that "whatever Mr. Wong wants must be followed."7 chanrobles virtual law library The testimony of Atty. Yumol cannot be read out of context in order to warrant a finding that Wong practically dictated the terms of the contract. What this witness said was: Q Did you explain carefully to your client, Doa Justina, the contents of this document before she signed it? chanrobles virtual law library A I explained to her each and every one of these conditions and I also told her these conditions were quite onerous for her, I don't really know if I have expressed my opinion, but I told her that we would rather not execute any contract anymore, but to hold it as it was before, on a verbal month to month contract of lease.chanroblesvirtualawlibrary chanrobles virtual law library Q But, she did not follow your advice, and she went with the contract just the same? chanrobles virtual law library A She agreed first . . .chanroblesvirtualawlibrary chanrobles virtual law library Q Agreed what? chanrobles virtual law library A Agreed with my objectives that it is really onerous and that I was really right, but after that, I was called again by her and she told me to follow the wishes of Mr. Wong Heng. xxx xxx xxx

Q So, as far as consent is concerned, you were satisfied that this document was perfectly proper? xxx xxx xxx

A Your Honor, if I have to express my personal opinion, I would say she is not, because, as I said before, she told me "Whatever Mr. Wong wants must be followed."8 Wong might indeed have supplied the data which Atty. Yumol embodied in the lease contract, but to say this is not to detract from the binding force of the contract. For the contract was fully explained to Justina Santos by her own lawyer. One incident, related by the same witness, makes clear that she voluntarily consented to the lease contract. This witness said that the original term fixed for the lease was 99 years but that as he doubted the validity of a lease to an alien for that length of time, he tried to persuade her to enter instead into a lease on a month-to-month basis. She was, however, firm and unyielding. Instead of heeding the advice of the lawyer, she ordered him, "Just follow Mr. Wong Heng."9 Recounting the incident, Atty. Yumol declared on cross examination:

Considering her age, ninety (90) years old at the time and her condition, she is a wealthy woman, it is just natural when she said "This is what I want and this will be done." In particular reference to this contract of lease, when I said "This is not proper," she said "You just go ahead, you prepare that, I am the owner, and if there is any illegality, I am the only one that can question the illegality."10 Atty. Yumol further testified that she signed the lease contract in the presence of her close friend, Hermenegilda Lao, and her maid, Natividad Luna, who was constantly by her side.11 Any of them could have testified on the undue influence that Wong supposedly wielded over Justina Santos, but neither of them was presented as a witness. The truth is that even after giving his client time to think the matter over, the lawyer could not make her change her mind. This persuaded the lower court to uphold the validity of the lease contract against the claim that it was procured through undue influence.chanroblesvirtualawlibrary chanrobles virtual law library Indeed, the charge of undue influence in this case rests on a mere inference12 drawn from the fact that Justina Santos could not read (as she was blind) and did not understand the English language in which the contract is written, but that inference has been overcome by her own evidence.chanroblesvirtualawlibrary chanrobles virtual law library Nor is there merit in the claim that her consent to the lease contract, as well as to the rest of the contracts in question, was given out of a mistaken sense of gratitude to Wong who, she was made to believe, had saved her and her sister from a fire that destroyed their house during the liberation of Manila. For while a witness claimed that the sisters were saved by other persons (the brothers Edilberto and Mariano Sta. Ana)13 it was Justina Santos herself who, according to her own witness, Benjamin C. Alonzo, said "very emphatically" that she and her sister would have perished in the fire had it not been for Wong. 14 Hence the recital in the deed of conditional option (Plff Exh. 7) that "[I]tong si Wong Heng ang siyang nagligtas sa aming dalawang magkapatid sa halos ay tiyak na kamatayan", and the equally emphatic avowal of gratitude in the lease contract (Plff Exh. 3).chanroblesvirtualawlibrary chanrobles virtual law library As it was with the lease contract (Plff Exh. 3), so it was with the rest of the contracts (Plff Exhs. 4-7) - the consent of Justina Santos was given freely and voluntarily. As Atty. Alonzo, testifying for her, said: [I]n nearly all documents, it was either Mr. Wong Heng or Judge Torres and/or both. When we had conferences, they used to tell me what the documents should contain. But, as I said, I would always ask the old woman about them and invariably the old woman used to tell me: "That's okay. It's all right."15 But the lower court set aside all the contracts, with the exception of the lease contract of November 15, 1957, on the ground that they are contrary to the expressed wish of Justina Santos and that their considerations are fictitious. Wong stated in his deposition that he did not pay P360 a month for the additional premises leased to him, because she did not want him to, but the trial court did not believe him. Neither did it believe his statement that he paid P1,000 as consideration for each of the contracts (namely, the option to buy the leased premises, the extension of the lease to 99 years, and the fixing of the term of the option at 50 years), but that the amount was returned to him by her for safekeeping. Instead, the court relied on the testimony of Atty. Alonzo in reaching the conclusion that the contracts are void for want of consideration.chanroblesvirtualawlibrary chanrobles virtual law library Atty. Alonzo declared that he saw no money paid at the time of the execution of the documents, but his negative testimony does not rule out the possibility that the considerations were paid at some other time as the contracts in fact recite. What is more, the consideration need not pass from one party to the other at the time a contract is executed because the promise of one is the consideration for the other.16 chanrobles virtual law library With respect to the lower court's finding that in all probability Justina Santos could not have intended to part with her property while she was alive nor even to lease it in its entirety as her house was built on it, suffice it to quote the testimony of her own witness and lawyer who prepared the contracts (Plff Exhs. 4-7) in question, Atty. Alonzo: The ambition of the old woman, before her death, according to her revelation to me, was to see to it that these properties be enjoyed, even to own them, by Wong Heng because Doa Justina told me that she did not have any relatives, near or far, and she considered Wong Heng as a son and his children her grandchildren; especially her consolation in life was when she would hear the children reciting prayers in Tagalog.17 chanrobles virtual law library She was very emphatic in the care of the seventeen (17) dogs and of the maids who helped her much, and she told me to see to it that no one could disturb Wong Heng from those properties. That is why we thought of the ninety-nine (99) years lease; we thought of adoption, believing that thru adoption Wong Heng might acquire Filipino citizenship; being the adopted child of a Filipino citizen.18 This is not to say, however, that the contracts (Plff Exhs. 3-7) are valid. For the testimony just quoted, while dispelling doubt as to the intention of Justina Santos, at the same time gives the clue to what we view as a scheme to circumvent the Constitutional

prohibition against the transfer of lands to aliens. "The illicit purpose then becomes the illegal causa"19 rendering the contracts void.chanroblesvirtualawlibrary chanrobles virtual law library Taken singly, the contracts show nothing that is necessarily illegal, but considered collectively, they reveal an insidious pattern to subvert by indirection what the Constitution directly prohibits. To be sure, a lease to an alien for a reasonable period is valid. So is an option giving an alien the right to buy real property on condition that he is granted Philippine citizenship. As this Court said in Krivenko v. Register of Deeds:20 [A]liens are not completely excluded by the Constitution from the use of lands for residential purposes. Since their residence in the Philippines is temporary, they may be granted temporary rights such as a lease contract which is not forbidden by the Constitution. Should they desire to remain here forever and share our fortunes and misfortunes, Filipino citizenship is not impossible to acquire. But if an alien is given not only a lease of, but also an option to buy, a piece of land, by virtue of which the Filipino owner cannot sell or otherwise dispose of his property,21 this to last for 50 years, then it becomes clear that the arrangement is a virtual transfer of ownership whereby the owner divests himself in stages not only of the right to enjoy the land ( jus possidendi, jus utendi, jus fruendi andjus abutendi) but also of the right to dispose of it ( jus disponendi) - rights the sum total of which make up ownership. It is just as if today the possession is transferred, tomorrow, the use, the next day, the disposition, and so on, until ultimately all the rights of which ownership is made up are consolidated in an alien. And yet this is just exactly what the parties in this case did within the space of one year, with the result that Justina Santos' ownership of her property was reduced to a hollow concept. If this can be done, then the Constitutional ban against alien landholding in the Philippines, as announced in Krivenko v. Register of Deeds,22 is indeed in grave peril.chanroblesvirtualawlibrary chanrobles virtual law library It does not follow from what has been said, however, that because the parties are in pari delicto they will be left where they are, without relief. For one thing, the original parties who were guilty of a violation of the fundamental charter have died and have since been substituted by their administrators to whom it would be unjust to impute their guilt.23 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 illegalper se but is merely prohibited, and the prohibition by law is designed for the protection of the plaintiff, he may, if public policy is thereby enhanced, recover what he has paid or delivered." The Constitutional provision 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"24 is an expression of public policy to conserve lands for the Filipinos. As this Court said in Krivenko: It is well to note at this juncture that in the present case we have no choice. We are construing the Constitution as it is and not as we may desire it to be. Perhaps the effect of our construction is to preclude aliens admitted freely into the Philippines from owning sites where they may build their homes. But if this is the solemn mandate of the Constitution, we will not attempt to compromise it even in the name of amity or equity . . . .chanroblesvirtualawlibrary chanrobles virtual law library For all the foregoing, we hold that under the Constitution aliens may not acquire private or public agricultural lands, including residential lands, and, accordingly, judgment is affirmed, without costs.25 That policy would be defeated and its continued violation sanctioned if, instead of setting the contracts aside and ordering the restoration of the land to the estate of the deceased Justina Santos, this Court should apply the general rule of pari delicto. To the extent that our ruling in this case conflicts with that laid down in Rellosa v. Gaw Chee Hun 26 and subsequent similar cases, the latter must be considered as pro tanto qualified.chanroblesvirtualawlibrary chanrobles virtual law library The claim for increased rentals and attorney's fees, made in behalf of Justina Santos, must be denied for lack of merit.chanroblesvirtualawlibrary chanrobles virtual law library And what of the various amounts which Wong received in trust from her? It appears that he kept two classes of accounts, one pertaining to amount which she entrusted to him from time to time, and another pertaining to rentals from the Ongpin property and from the Rizal Avenue property, which he himself was leasing.chanroblesvirtualawlibrary chanrobles virtual law library With respect to the first account, the evidence shows that he received P33,724.27 on November 8, 1957 (Plff Exh. 16); P7,354.42 on December 1, 1957 (Plff Exh. 13); P10,000 on December 6, 1957 (Plff Exh. 14) ; and P18,928.50 on August 26, 1959 (Def. Exh. 246), or a total of P70,007.19. He claims, however, that he settled his accounts and that the last amount of P18,928.50 was in fact payment to him of what in the liquidation was found to be due to him.chanroblesvirtualawlibrary chanrobles virtual law library He made disbursements from this account to discharge Justina Santos' obligations for taxes, attorneys' fees, funeral services and security guard services, but the checks (Def Exhs. 247-278) drawn by him for this purpose amount to only P38,442.84.27 Besides, if he had really settled his accounts with her on August 26, 1959, we cannot understand why he still had P22,000 in the bank and P3,000 in his possession, or a total of P25,000. In his answer, he offered to pay this amount if the court so directed him. On these two

grounds, therefore, his claim of liquidation and settlement of accounts must be rejected.chanroblesvirtualawlibrary chanrobles virtual law library After subtracting P38,442.84 (expenditures) from P70,007.19 (receipts), there is a difference of P31,564 which, added to the amount of P25,000, leaves a balance of P56,564.3528 in favor of Justina Santos.chanroblesvirtualawlibrary chanrobles virtual law library As to the second account, the evidence shows that the monthly income from the Ongpin property until its sale in Rizal Avenue July, 1959 was P1,000, and that from the Rizal Avenue property, of which Wong was the lessee, was P3,120. Against this account the household expenses and disbursements for the care of the 17 dogs and the salaries of the 8 maids of Justina Santos were charged. This account is contained in a notebook (Def. Exh. 6) which shows a balance of P9,210.49 in favor of Wong. But it is claimed that the rental from both the Ongpin and Rizal Avenue properties was more than enough to pay for her monthly expenses and that, as a matter of fact, there should be a balance in her favor. The lower court did not allow either party to recover against the other. Said the court: [T]he documents bear the earmarks of genuineness; the trouble is that they were made only by Francisco Wong and Antonia Matias, nick-named Toning, - which was the way she signed the loose sheets, and there is no clear proof that Doa Justina had authorized these two to act for her in such liquidation; on the contrary if the result of that was a deficit as alleged and sought to be there shown, of P9,210.49, that was not what Doa Justina apparently understood for as the Court understands her statement to the Honorable Judge of the Juvenile Court . . . the reason why she preferred to stay in her home was because there she did not incur in any debts . . . this being the case, . . . the Court will not adjudicate in favor of Wong Heng on his counterclaim; on the other hand, while it is claimed that the expenses were much less than the rentals and there in fact should be a superavit, . . . this Court must concede that daily expenses are not easy to compute, for this reason, the Court faced with the choice of the two alternatives will choose the middle course which after all is permitted by the rules of proof, Sec. 69, Rule 123 for in the ordinary course of things, a person will live within his income so that the conclusion of the Court will be that there is neither deficit nor superavit and will let the matter rest here. Both parties on appeal reiterate their respective claims but we agree with the lower court that both claims should be denied. Aside from the reasons given by the court, we think that the claim of Justina Santos totalling P37,235, as rentals due to her after deducting various expenses, should be rejected as the evidence is none too clear about the amounts spent by Wong for food29 masses30 and salaries of her maids.31 His claim for P9,210.49 must likewise be rejected as his averment of liquidation is belied by his own admission that even as late as 1960 he still had P22,000 in the bank and P3,000 in his possession.chanroblesvirtualawlibrary chanrobles virtual law library ACCORDINGLY, the contracts in question (Plff Exhs. 3-7) are annulled and set aside; the land subject-matter of the contracts is ordered returned to the estate of Justina Santos as represented by the Philippine Banking Corporation; Wong Heng (as substituted by the defendant-appellant Lui She) is ordered to pay the Philippine Banking Corporation the sum of P56,564.35, with legal interest from the date of the filing of the amended complaint; and the amounts consigned in court by Wong Heng shall be applied to the payment of rental from November 15, 1959 until the premises shall have been vacated by his heirs. Costs against the defendant-appellant. Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez and Angeles, JJ., concur.

IN RE: PETITION FOR SEPARATION OF PROPERTY ELENA BUENAVENTURA MULLER, Petitioner, - versus -

G.R. No. 149615

Present: Panganiban, C.J. (Chairperson), Ynares-Santiago, Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ.

HELMUT MULLER, Respondent.

Promulgated: August 29, 2006

x ---------------------------------------------------------------------------------------- x

DECISION YNARES-SANTIAGO, J.:

This petition for review on certiorari[1] assails the February 26, 2001 Decision[2] of the Court of Appeals in CA-G.R. CV No. 59321 affirming with modification the August 12, 1996 Decision [3] of the Regional Trial Court of Quezon City, Branch 86 in Civil Case No. Q-94-21862, which terminated the regime of absolute community of property between petitioner and respondent, as well as the Resolution[4] dated August 13, 2001 denying the motion for reconsideration.

The facts are as follows:

Petitioner Elena Buenaventura Muller and respondent Helmut Muller were married in Hamburg, Germany on September 22, 1989. The couple resided in Germany at a house owned by respondents parents but decided to move and reside permanently in the Philippines in 1992. By this time, respondent had inherited the house in Germany from his parents which he sold and used the proceeds for the purchase of a parcel of land in Antipolo, Rizal at the cost of P528,000.00 and the construction of a house amounting to P2,300,000.00. The Antipolo property was registered in the name of petitioner under Transfer Certificate of Title No. 219438 [5] of the Register of Deeds of Marikina, Metro Manila.

Due to incompatibilities and respondents alleged womanizing, drinking, and maltreatment, the spouses eventually separated. On September 26, 1994, respondent filed a petition[6] for separation of properties before the Regional Trial Court of Quezon City.

On August 12, 1996, the trial court rendered a decision which terminated the regime of absolute community of property between the petitioner and respondent. It also decreed the separation of properties between them and ordered the equal partition of personal properties located within the country, excluding those acquired by gratuitous title during the marriage. With regard to the Antipolo property, the court held that it was acquired using paraphernal funds of the respondent. However, it ruled that respondent cannot recover his funds because the property was purchased in violation of Section 7, Article XII of the Constitution. Thus However, pursuant to Article 92 of the Family Code, properties acquired by gratuitous title by either spouse during the marriage shall be excluded from the community property. The real property, therefore, inherited by petitioner in Germany is excluded from the absolute community of property of the herein spouses. Necessarily, the proceeds of the sale of said real property as well as the personal properties purchased thereby, belong exclusively to the petitioner. However, the part of that inheritance used by the petitioner for acquiring the house and lot in this country cannot be recovered by the petitioner, its acquisition being a violation of Section 7, Article XII of the Constitution which provides that 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. The law will leave the parties in the situation where they are in without prejudice to a voluntary partition by the parties of the said real property. x x x xxxx

As regards the property covered by Transfer Certificate of Title No. 219438 of the Registry of Deeds of Marikina, Metro Manila, situated in Antipolo, Rizal and the improvements thereon, the Court shall not make any pronouncement on constitutional grounds.[7]

Respondent appealed to the Court of Appeals which rendered the assailed decision modifying the trial courts Decision. It held that respondent merely prayed for reimbursement for the purchase of the Antipolo property, and not acquisition or transfer of ownership to him. It also considered petitioners ownership over the property in trust for the respondent. As regards the house, the Court of Appeals ruled that there is nothing in the Constitution which prohibits respondent from acquiring the same. The dispositive portion of the assailed decision reads: WHEREFORE, in view of the foregoing, the Decision of the lower court dated August 12, 1996 is hereby MODIFIED. Respondent Elena Buenaventura Muller is hereby ordered to REIMBURSE the petitioner the amount of P528,000.00 for the acquisition of the land and the amount of P2,300,000.00 for the construction of the house situated in Atnipolo, Rizal, deducting therefrom the amount respondent spent for the preservation, maintenance and development of the aforesaid real property including the depreciation cost of the house or in the alternative to SELL the house and lot in the event respondent does not have the means to reimburse the petitioner out of her own money and from the proceeds thereof, reimburse the petitioner of the cost of the land and the house deducting the expenses for its maintenance and preservation spent by the respondent. Should there be profit, the same shall be divided in proportion to the equity each has over the property. The case is REMANDED to the lower court for reception of evidence as to the amount claimed by the respondents for the preservation and maintenance of the property. SO ORDERED.[8]

Hence, the instant petition for review raising the following issues: I THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE RESPONDENT HEREIN IS ENTITLED TO REIMBURSEMENT OF THE AMOUNT USED TO PURCHASE THE LAND AS WELL AS THE COSTS FOR THE CONSTRUCTION OF THE HOUSE, FOR IN SO RULING, IT INDIRECTLY ALLOWED AN ACT DONE WHICH OTHERWISE COULD NOT BE DIRECTLY x x x DONE, WITHOUT DOING VIOLENCE TO THE CONSTITUTIONAL PROSCRIPTION THAT AN ALIEN IS PROHIBITED FROM ACQUIRING OWNERSHIP OF REAL PROPERTIES LOCATED IN THE PHILIPPINES. II THE COURT OF APPEALS GRAVELY ERRED IN SUSTAINING RESPONDENTS CAUSE OF ACTION WHICH IS ACTUALLY A DESPERATE ATTEMPT TO OBTAIN OWNERSHIP OVER THE LOT IN QUESTION, CLOTHED UNDER THE GUISE OF CLAIMING REIMBURSEMENT.

Petitioner contends that respondent, being an alien, is disqualified to own private lands in the Philippines; that respondent was aware of the constitutional prohibition but circumvented the same; and that respondents purpose for filing an action for separation of property is to obtain exclusive possession, control and disposition of the Antipolo property.

Respondent claims that he is not praying for transfer of ownership of the Antipolo property but merely reimbursement; that the funds paid by him for the said property were in consideration of his marriage to petitioner; that the funds were given to petitioner in trust; and that equity demands that respondent should be reimbursed of his personal funds.

The issue for resolution is whether respondent is entitled to reimbursement of the funds used for the acquisition of the Antipolo property.

The petition has merit.

Section 7, Article XII of the 1987 Constitution states: 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.

Aliens, whether individuals or corporations, are disqualified from acquiring lands of the public domain. Hence, they are also disqualified from acquiring private lands.[9] The primary purpose of the constitutional provision is the conservation of the national patrimony. In the case of Krivenko v. Register of Deeds,[10] the Court held: Under section 1 of Article XIII of the Constitution, natural resources, with the exception of public agricultural land, shall not be alienated, and with respect to public agricultural lands, their alienation is limited to Filipino citizens. But this constitutional purpose conserving agricultural resources in the hands of Filipino citizens may easily be defeated by the Filipino citizens themselves who may alienate their agricultural lands in favor of aliens. It is partly to prevent this result that section 5 is included in Article XIII, and it reads as follows: Sec. 5. Save in cases of hereditary succession, no private agricultural land will be transferred or assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippines. This constitutional provision closes the only remaining avenue through which agricultural resources may leak into aliens hands. It would certainly be futile to prohibit the alienation of public agricultural lands to aliens if, after all, they may be freely so alienated upon their becoming private agricultural lands in the hands of Filipino citizens. x x x xxxx If the term private agricultural lands is to be construed as not including residential lots or lands not strictly agricultural, the result would be that aliens may freely acquire and possess not only residential lots and houses for themselves but entire subdivisions, and whole towns and cities, and that they may validly buy and hold in their names lands of any area for building homes, factories, industrial plants, fisheries, hatcheries, schools, health and vacation resorts, markets, golf courses, playgrounds, airfields, and a host of other uses and purposes that are not, in appellants words, strictly agricultural. (Solicitor Generals Brief, p. 6.) That this is obnoxious to the conservative spirit of the Constitution is beyond question.

Respondent was aware of the constitutional prohibition and expressly admitted his knowledge thereof to this Court. [11] He declared that he had the Antipolo property titled in the name of petitioner because of the said prohibition. [12] His attempt at subsequently asserting or claiming a right on the said property cannot be sustained.

The Court of Appeals erred in holding that an implied trust was created and resulted by operation of law in view of petitioners marriage to respondent. Save for the exception provided in cases of hereditary succession, respondents disqualification from owning lands in the Philippines is absolute. Not even an ownership in trust is allowed. Besides, where the purchase is made in violation of an existing statute and in evasion of its express provision, no trust can result in favor of the party who is guilty of the fraud.[13] To hold otherwise would allow circumvention of the constitutional prohibition.

Invoking the principle that a court is not only a court of law but also a court of equity, is likewise misplaced. It has been held that equity as a rule will follow the law and will not permit that to be done indirectly which, because of public policy, cannot be done directly.[14] He who seeks equity must do equity, and he who comes into equity must come with clean hands. The latter is a frequently stated maxim which is also expressed in the principle that he who has done inequity shall not have equity. It signifies that a litigant may be denied relief by a court of equity on the ground that his conduct has been inequitable, unfair and dishonest, or fraudulent, or deceitful as to the controversy in issue.[15]

Thus, in the instant case, respondent cannot seek reimbursement on the ground of equity where it is clear that he willingly and knowingly bought the property despite the constitutional prohibition.

Further, the distinction made between transfer of ownership as opposed to recovery of funds is a futile exercise on respondents part. To allow reimbursement would in effect permit respondent to enjoy the fruits of a property which he is not allowed to own. Thus, it is likewise proscribed by law. As expressly held in Cheesman v. Intermediate Appellate Court:[16] 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. 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. 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 to militate, on high

10

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. (Emphasis added)

WHEREFORE, in view of the foregoing, the instant petition is GRANTED. The Decision dated February 26, 2001 of the Court of Appeals in CA-G.R. CV No. 59321 ordering petitioner Elena Buenaventura Muller to reimburse respondent Helmut Muller the amount of P528,000 for the acquisition of the land and the amount of P2,300,000 for the construction of the house in Antipolo City, and the Resolution dated August 13, 2001 denying reconsideration thereof, are REVERSED and SET ASIDE. The August 12, 1996 Decision of the Regional Trial Court of Quezon City, Branch 86 in Civil Case No. Q-94-21862 terminating the regime of absolute community between the petitioner and respondent, decreeing a separation of property between them and ordering the partition of the personal properties located in the Philippines equally, is REINSTATED.

SO ORDERED.

PHILIP MATTHEWS, Petitioner,

G.R. No. 164584

Present:

YNARES-SANTIAGO, J., Chairperson, - versus CHICO-NAZARIO, VELASCO, JR. NACHURA, and PERALTA, JJ.

BENJAMIN A. TAYLOR and JOSELYN C. TAYLOR, Respondents.

Promulgated:

June 22, 2009

x------------------------------------------------------------------------------------x

DECISION

11

NACHURA, J.:

Assailed in this petition for review on certiorari are the Court of Appeals (CA) December 19, 2003 Decision[1] and July 14, 2004 Resolution[2] in CA-G.R. CV No. 59573. The assailed decision affirmed and upheld the June 30, 1997 Decision[3] of the Regional Trial Court (RTC), Branch 8, Kalibo, Aklan in Civil Case No. 4632 forDeclaration of Nullity of Agreement of Lease with Damages.

On June 30, 1988, respondent Benjamin A. Taylor (Benjamin), a British subject, married Joselyn C. Taylor (Joselyn), a 17-year old Filipina.[4] On June 9, 1989, while their marriage was subsisting, Joselyn bought from Diosa M. Martin a 1,294 square-meter lot (Boracay property) situated at Manoc-Manoc, Boracay Island, Malay, Aklan, for and in consideration of P129,000.00.[5] The sale was allegedly financed by Benjamin.[6] Joselyn and Benjamin, also using the latters funds, constructed improvements thereon and eventually converted the property to a vacation and tourist resort known as the Admiral Ben Bow Inn. [7] All required permits and licenses for the operation of the resort were obtained in the name of Ginna Celestino, Joselyns sister. [8]

However, Benjamin and Joselyn had a falling out, and Joselyn ran away with Kim Philippsen. On June 8, 1992, Joselyn executed a Special Power of Attorney (SPA) in favor of Benjamin, authorizing the latter to maintain, sell, lease, and sub-lease and otherwise enter into contract with third parties with respect to their Boracay property.[9]

On July 20, 1992, Joselyn as lessor and petitioner Philip Matthews as lessee, entered into an Agreement of Lease[10] (Agreement) involving the Boracay property for a period of 25 years, with an annual rental of P12,000.00. The agreement was signed by the parties and executed before a Notary Public. Petitioner thereafter took possession of the property and renamed the resort as Music Garden Resort.

Claiming that the Agreement was null and void since it was entered into by Joselyn without his (Benjamins) consent, Benjamin instituted an action for Declaration of Nullity of Agreement of Lease with Damages [11] against Joselyn and the petitioner. Benjamin

12

claimed that his funds were used in the acquisition and improvement of the Boracay property, and coupled with the fact that he was Joselyns husband, any transaction involving said property required his consent.

No Answer was filed, hence, the RTC declared Joselyn and the petitioner in defeault. On March 14, 1994, the RTC rendered judgment by default declaring the Agreement null and void.[12] The decision was, however, set aside by the CA in CA-G.R. SP No. 34054.[13] The CA also ordered the RTC to allow the petitioner to file his Answer, and to conduct further proceedings.

In his Answer,[14] petitioner claimed good faith in transacting with Joselyn. Since Joselyn appeared to be the owner of the Boracay property, he found it unnecessary to obtain the consent of Benjamin. Moreover, as appearing in the Agreement, Benjamin signed as a witness to the contract, indicating his knowledge of the transaction and, impliedly, his conformity to the agreement entered into by his wife. Benjamin was, therefore, estopped from questioning the validity of the Agreement.

There being no amicable settlement during the pre-trial, trial on the merits ensued.

On June 30, 1997, the RTC disposed of the case in this manner:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendants as follows:

1.

The Agreement of Lease dated July 20, 1992 consisting of eight (8) pages (Exhibits T, T-1, T2, T-3, T-4, T-5, T-6 and T-7) entered into by and between Joselyn C. Taylor and Philip Matthews before Notary Public Lenito T. Serrano under Doc. No. 390, Page 79, Book I, Series of 1992 is hereby declared NULL and VOID;

2.

Defendants are hereby ordered, jointly and severally, to pay plaintiff the sum of SIXTEEN THOUSAND (P16,000.00) PESOS as damages representing unrealized income for the residential building and cottages computed monthly from July 1992 up to the time the property in question is restored to plaintiff; and

13

3.

Defendants are hereby ordered, jointly and severally, to pay plaintiff the sum of TWENTY THOUSAND (P20,000.00) PESOS, Philippine Currency, for attorneys fees and other incidental expenses.

SO ORDERED.[15]

The RTC considered the Boracay property as community property of Benjamin and Joselyn; thus, the consent of the spouses was necessary to validate any contract involving the property. Benjamins right over the Boracay property was bolstered by the courts findings that the property was purchased and improved through funds provided by Benjamin. Although the Agreement was evidenced by a public document, the trial court refused to consider the alleged participation of Benjamin in the questioned transaction primarily because his signature appeared only on the last page of the document and not on every page thereof.

On appeal to the CA, petitioner still failed to obtain a favorable decision. In its December 19, 2003 Decision,[16] the CA affirmed the conclusions made by the RTC. The appellate court was of the view that if, indeed, Benjamin was a willing participant in the questioned transaction, the parties to the Agreement should have used the phrase with my consent instead of signed in the presence of. The CA noted that Joselyn already prepared an SPA in favor of Benjamin involving the Boracay property; it was therefore unnecessary for Joselyn to participate in the execution of the Agreement. Taken together, these circumstances yielded the inevitable conclusion that the contract was null and void having been entered into by Joselyn without the consent of Benjamin.

Aggrieved, petitioner now comes before this Court in this petition for review on certiorari based on the following grounds:

4.1. THE MARITAL CONSENT OF RESPONDENT BENJAMIN TAYLOR IS NOT REQUIRED IN THE AGREEMENT OF LEASE DATED 20 JULY 1992. GRANTINGARGUENDO THAT HIS CONSENT IS REQUIRED, BENJAMIN TAYLOR IS DEEMED TO HAVE GIVEN HIS CONSENT WHEN HE AFFIXED HIS SIGNATURE IN THE AGREEMENT OF LEASE AS WITNESS IN THE LIGHT OF THE RULING OF THE SUPREME COURT IN THE CASE OF SPOUSES PELAYO VS. MELKI PEREZ, G.R. NO. 141323, JUNE 8, 2005.

4.2. THE PARCEL OF LAND SUBJECT OF THE AGREEMENT OF LEASE IS THE EXCLUSIVE PROPERTY OF JOCELYN C. TAYLOR, A FILIPINO CITIZEN, IN THE LIGHT OF CHEESMAN VS. IAC, G.R. NO. 74833, JANUARY 21, 1991.

4.3. THE COURTS A QUO ERRONEOUSLY APPLIED ARTICLE 96 OF THE FAMILY CODE OF THE PHILIPPINES WHICH IS A PROVISION REFERRING TO THE ABSOLUTE COMMUNITY OF PROPERTY. THE PROPERTY REGIME GOVERNING THE PROPERTY RELATIONS OF BENJAMIN TAYLOR

14

AND JOSELYN TAYLOR IS THE CONJUGAL PARTNERSHIP OF GAINS BECAUSE THEY WERE MARRIED ON 30 JUNE 1988 WHICH IS PRIOR TO THE EFFECTIVITY OF THE FAMILY CODE. ARTICLE 96 OF THE FAMILY CODE OF THE PHILIPPINES FINDS NO APPLICATION IN THIS CASE.

4.4. THE HONORABLE COURT OF APPEALS IGNORED THE PRESUMPTION OF REGULARITY IN THE EXECUTION OF NOTARIAL DOCUMENTS.

4.5. THE HONORABLE COURT OF APPEALS FAILED TO PASS UPON THE COUNTERCLAIM OF PETITIONER DESPITE THE FACT THAT IT WAS NOT CONTESTED AND DESPITE THE PRESENTATION OF EVIDENCE ESTABLISHING SAID CLAIM.[17]

The petition is impressed with merit.

In fine, we are called upon to determine the validity of an Agreement of Lease of a parcel of land entered into by a Filipino wife without the consent of her British husband. In addressing the matter before us, we are confronted not only with civil law or conflicts of law issues, but more importantly, with a constitutional question.

It is undisputed that Joselyn acquired the Boracay property in 1989. Said acquisition was evidenced by a Deed of Sale with Joselyn as the vendee. The property was also declared for taxation purposes under her name. When Joselyn leased the property to petitioner, Benjamin sought the nullification of the contract on two grounds: first, that he was the actual owner of the property since he provided the funds used in purchasing the same; and second, that Joselyn could not enter into a valid contract involving the subject property without his consent.

The trial and appellate courts both focused on the property relations of petitioner and respondent in light of the Civil Code and Family Code provisions. They, however, failed to observe the applicable constitutional principles, which, in fact, are the more decisive.

Section 7, Article XII of the 1987 Constitution states:[18] Section 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain.

15

Aliens, whether individuals or corporations, have been disqualified from acquiring lands of the public domain. Hence, by virtue of the aforecited constitutional provision, they are also disqualified from acquiring private lands. [19] The primary purpose of this constitutional provision is the conservation of the national patrimony.[20] Our fundamental law cannot be any clearer. The right to acquire lands of the public domain is reserved only to Filipino citizens or corporations at least sixty percent of the capital of which is owned by Filipinos.[21]

In Krivenko v. Register of Deeds,[22] cited in Muller v. Muller,[23] we had the occasion to explain the constitutional prohibition:

Under Section 1 of Article XIII of the Constitution, natural resources, with the exception of public agricultural land, shall not be alienated, and with respect to public agricultural lands, their alienation is limited to Filipino citizens. But this constitutional purpose conserving agricultural resources in the hands of Filipino citizens may easily be defeated by the Filipino citizens themselves who may alienate their agricultural lands in favor of aliens. It is partly to prevent this result that Section 5 is included in Article XIII, and it reads as follows:

Section 5. Save in cases of hereditary succession, no private agricultural land will be transferred or assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippines. This constitutional provision closes the only remaining avenue through which agricultural resources may leak into aliens hands. It would certainly be futile to prohibit the alienation of public agricultural lands to aliens if, after all, they may be freely so alienated upon their becoming private agricultural lands in the hands of Filipino citizens. x x x

xxxx

If the term private agricultural lands is to be construed as not including residential lots or lands not strictly agricultural, the result would be that aliens may freely acquire and possess not only residential lots and houses for themselves but entire subdivisions, and whole towns and cities, and that they may validly buy and hold in their names lands of any area for building homes, factories, industrial plants, fisheries, hatcheries, schools, health and vacation resorts, markets, golf courses, playgrounds, airfields, and a host of other uses and purposes that are not, in appellants words, strictly agricultural. (Solicitor Generals Brief, p. 6) That this is obnoxious to the conservative spirit of the Constitution is beyond question. [24]

The rule is clear and inflexible: aliens are absolutely not allowed to acquire public or private lands in the Philippines, save only in constitutionally recognized exceptions.[25]There is no rule more settled than this constitutional prohibition, as more and more aliens

16

attempt to circumvent the provision by trying to own lands through another. In a long line of cases, we have settled issues that directly or indirectly involve the above constitutional provision. We had cases where aliens wanted that a particular property be declared as part of their fathers estate;[26] that they be reimbursed the funds used in purchasing a property titled in the name of another; [27] that an implied trust be declared in their (aliens) favor;[28] and that a contract of sale be nullified for their lack of consent.[29]

In Ting Ho, Jr. v. Teng Gui,[30] Felix Ting Ho, a Chinese citizen, acquired a parcel of land, together with the improvements thereon. Upon his death, his heirs (the petitioners therein) claimed the properties as part of the estate of their deceased father, and sought the partition of said properties among themselves. We, however, excluded the land and improvements thereon from the estate of Felix Ting Ho, precisely because he never became the owner thereof in light of the above-mentioned constitutional prohibition.

In Muller v. Muller,[31] petitioner Elena Buenaventura Muller and respondent Helmut Muller were married in Germany. During the subsistence of their marriage, respondent purchased a parcel of land in Antipolo City and constructed a house thereon. The Antipolo property was registered in the name of the petitioner. They eventually separated, prompting the respondent to file a petition for separation of property. Specifically, respondent prayed for reimbursement of the funds he paid for the acquisition of said property. In deciding the case in favor of the petitioner, the Court held that respondent was aware that as an alien, he was prohibited from owning a parcel of land situated in the Philippines. He had, in fact, declared that when the spouses acquired the Antipolo property, he had it titled in the name of the petitioner because of said prohibition. Hence, we denied his attempt at subsequently asserting a right to the said property in the form of a claim for reimbursement. Neither did the Court declare that an implied trust was created by operation of law in view of petitioners marriage to respondent. We said that to rule otherwise would permit circumvention of the constitutional prohibition.

In Frenzel v. Catito,[32] petitioner, an Australian citizen, was married to Teresita Santos; while respondent, a Filipina, was married to Klaus Muller. Petitioner and respondent met and later cohabited in a common-law relationship, during which petitioner acquired real properties; and since he was disqualified from owning lands in thePhilippines, respondents name appeared as the vendee in the deeds of sale. When their relationship turned sour, petitioner filed an action for the recovery of the real properties registered in the name of respondent, claiming that he was the real owner. Again, as in the other cases, the Court refused to declare petitioner as the owner mainly because of the constitutional prohibition. The Court added that being a party to an illegal contract, he could not come to court and ask to have his illegal objective carried out. One who loses his money or property by knowingly engaging in an illegal contract may not maintain an action for his losses.

17

Finally, in Cheesman v. Intermediate Appellate Court,[33] petitioner (an American citizen) and Criselda Cheesman acquired a parcel of land that was later registered in the latters name. Criselda subsequently sold the land to a third person without the knowledge of the petitioner. The petitioner then sought the nullification of the sale as he did not give his consent thereto. The Court held that assuming that it was his (petitioners) 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; thus, the sale as to him was null and void.

In light of the foregoing jurisprudence, we find and so hold that Benjamin has no right to nullify the Agreement of Lease between Joselyn and petitioner. Benjamin, being an alien, is absolutely prohibited from acquiring private and public lands in the Philippines. Considering that Joselyn appeared to be the designated vendee in the Deed of Sale of said property, she acquired sole ownership thereto. This is true even if we sustain Benjamins claim that he provided the funds for such acquisition. By entering into such contract knowing that it was illegal, no implied trust was created in his favor; no reimbursement for his expenses can be allowed; and no declaration can be made that the subject property was part of the conjugal/community property of the spouses. In any event, he had and has no capacity or personality to question the subsequent lease of the Boracay property by his wife on the theory that in so doing, he was merely exercising the prerogative of a husband in respect of conjugal property. To sustain such a theory would countenance indirect controversion of the constitutional prohibition. If the property were to be declared conjugal, this would accord the alien husband a substantial interest and right over the 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.[34]

In fine, the Agreement of Lease entered into between Joselyn and petitioner cannot be nullified on the grounds advanced by Benjamin. Thus, we uphold its validity.

With the foregoing disquisition, we find it unnecessary to address the other issues raised by the petitioner.

18

WHEREFORE, premises considered, the December 19, 2003 Decision and July 14, 2004 Resolution of the Court of Appeals in CA-G.R. CV No. 59573, areREVERSED and SET ASIDE and a new one is entered DISMISSING the complaint against petitioner Philip Matthews.

G.R. No. 159589 : December 23, 2008 REPUBLIC OF THE PHILIPPINES, Petitioner, v. HEIRS OF JUAN FABIO, namely: DOMINGA C. FABIO, SOCORRO D. FABIO, LYDIA D. FABIO, ROLANDO D. FABIO, NORMA D. FABIO, NORMA L. FABIO, ANGELITA FABIO, ROSALIE FABIO, DANILO FABIO, RENATO FABIO, LEVITA FABIO, IRENE FABIO, TERESITA MOLERA, ROSEMARIE C. PAKAY, LIGAYA C. MASANGKAY, ALFREDO F. CASTILLO, MELINDA F. CASTILLO, MERCEDITA F. CASTILLO, ESTELA DE JESUS AQUINO, FELECITO FABIO, and ALEXANDER FABIO, represented herein by ANGELITA F. ESTEIBAR as their Attorney-inFact,Respondent. DECISION CARPIO, J.: The Case Before the Court is a petition for review on certiorari 1 assailing the Decision2 dated 29 August 2003 of the Court of Appeals in CAG.R. CV No. 66522, which affirmed the judgment of the Regional Trial Court of Naic, Cavite, Branch 15, in LRC Case No. NC-96-782 granting respondents' application for registration of title to Lot No. 233 (Lot), Cad-617-D, Ternate Cadastre. The Facts On 21 November 1996, respondents, who are the heirs of Juan Fabio, represented by Angelita F. Esteibar (Esteibar) as their Attorney-in-Fact, filed with the Regional Trial Court of Naic, Cavite, Branch 15, an application for registration of title 3 to the Lot with an approximate area of 1,096,866 square meters or 109.6 hectares. The Lot is situated in Barangay Sapang, Ternate, Cavite. The respondents sought the registration of title under the provisions of Act No. 496 or the Land Registration Act, as amended by Presidential Decree No. 1529 (PD 1529).4 cra In the application, respondents alleged that they are the owners of the Lot, including all the improvements, having acquired the same through a bona fide claim of ownership. They declared that they and their predecessors-in-interest were in open, continuous, exclusive and notorious possession of the Lot in the concept of an owner for more than 100 years.5 chanroblesvirtuallawlibary Together with the application for registration, respondents submitted the following documents: 1. Certificate of Death proving the fact of death of Juan Fabio;6 cra 2. Special Power of Attorney showing that the heirs authorized Esteibar to file the application;7 cra 3. Order dated 25 November 1994 of Sydicious F. Panoy, Regional Technical Director, Regional Office No. IV-A, Department of Environment and Natural Resources (DENR), giving authority to survey the Lot, which survey was numbered SWO-042121-003369D;8 cra 4. Surveyor's Certificate and Transmittal of Survey Returns signed by Geodetic Engineer Susipatro Mancha proving that the Lot was surveyed;9 cra 5. Sepia copies of the survey plan establishing that the land area is more or less 109 hectares and that the Lot was already surveyed and the boundaries determined;10 cra 6. Letter of Authority dated 30 June 1997 authorizing Engineer Roberto C. Pangyarihan (Pangyarihan) to represent the Land Management Sector, DENR-Region IV, and to testify on plan SWO-042121-003369-D covering the Lot;11 cra 7. Technical Description signed by Pangyarihan proving the boundaries of the Lot as surveyed;12 cra

19

8. Letter dated 22 April 1991 of Arnaldo Conlu (Conlu), Land Management Inspector, DENR-Region IV establishing that the Lot is alienable and disposable;13 cra 9. First Indorsement dated 22 April 1991 of Rufo F. Lorenzo, Community Environment and Natural Resources Officer, forwarding to the Regional Technical Director, Land Management Division, through the Chief, Surveys Division, DENR-Region IV the investigation report of Land Management Inspector, Conlu;14 cra 10. Certifications dated 4 July 1995 and 23 November 1995 of Conrado C. Lindo, Municipal Mayor, and Flordeliza C. Soberano, Municipal Assessor of Ternate, Cavite, respectively, establishing that Juan Fabio was the declared owner of the Lot under Tax Declaration No. 1385 having an area of 200 hectares and situated in Calumpang and Caybangat, Zapang, Ternate, Cavite; 15 cra 11. Tax Declarations corresponding to different years showing that the Lot has been declared under the name of Juan Fabio for tax purposes: Tax Declaration No. 428 for the year 1947, Tax Declaration No. 302 for the year 1961; Tax Declaration No. 227 for the year 1969, Tax Declaration No. 210 for the year 1974, Tax Declaration No. 173 for the year 1980, Tax Declaration No. 1543 for the year 1985, and Tax Declaration No. 1385 for the year 1994;16 and 12. Certifications of the Assistant Municipal Treasurer of Ternate, Cavite stating that the real estate taxes for the years 1994 to 1997 were paid.17 After the presentation of exhibits establishing the jurisdictional facts, the trial prosecutor assigned to the case interposed no objection. Thus, the trial court ordered a general default against the public except the government. On 1 July 1997, respondents presented their evidence consisting of documentary exhibits and the testimonies of witnesses Esteibar, Pangyarihan, Dominga Fabio Lozano, Mariano Huerto, and Raymundo Pakay. Esteibar, the duly appointed representative of the heirs of Juan Fabio, testified that her grandfather, Juan, died in 1959 when she was only 13 years old. She attested that she was born on the Lot and knows that her grandfather owned, possessed and occupied the Lot until his death. Esteibar claimed that they and their predecessors-in-interest have possessed and occupied the Lot openly, publicly, continuously, peacefully, without interruption in the concept of an owner and adverse to the public since time immemorial up to the present or for more than 100 years. They had paid real estate taxes; planted trees, vegetables, rice, and banana plants; and raised animals on the Lot. Further, she stated that the Lot is neither mortgaged nor encumbered and that no other person other than her and her co-heirs are in possession of the Lot. The next witness, Pangyarihan of the Land Management Sector, DENR-Region IV, testified that he had been connected with DENRRegion IV since 1956. He was formerly the Chief of the Survey Division of DENR-Region IV from 1991 until his designation as Special Assistant to the Regional Director in 1995. Pangyarihan affirmed that the Lot is 1,096,866 square meters or 109.6 hectares and that he recommended the approval of the survey plan, SWO-042121-003369-D, which includes the Lot, on the basis of submission of certain requirements like tax declarations, report of investigation by the land investigator and survey returns prepared by the geodetic engineer. He verified that the survey plan and the technical descriptions matched with each other and stated that there is no overlap or encroachment on other surrounding claims on adjacent or adjoining lots. Further, he confirmed that there is a notation at the left hand footnote of the approved survey plan which reads "this survey falls within the Calumpang Point Naval Reservation and disposition hereof shall be subject to the final delimitation thereof as per Proc. No. 1582-A dated September 6, 1976." Dominga Fabio Lozano, the only living and youngest child of Juan Fabio and who was then 63 years of age, testified that she was born in 1934 in Calumpang, Ternate, Cavite. She alleged that she was born and has lived on the Lot, owned by her father Juan Fabio, who in turn inherited the land from his father Ignacio Fabio. She narrated that her father was born in 1887 and died in 1959 at the age of 72 as evidenced by his death certificate. She stated further that no one has ever questioned their ownership or disturbed their peaceful possession and occupation of the Lot. As a result, their possession of the Lot covers more than 100 years of continuous, uninterrupted, public, open and peaceful possession. Mariano Huerto, a helper of the late Juan Fabio, testified that since 1935, when he was only 12 years old, he had helped cultivate the Lot until he left the place in 1955. He stated that at the time he served as helper, Juan Fabio and his family were the ones who possessed and occupied the Lot. He helped plant vegetables, banana plants, papaya trees and upland rice and was familiar with the boundaries of the Lot. Raymundo Pakay, 70 years of age at the time and a resident of Ternate, Cavite, testified that he knew Juan Fabio as the owner of the Lot, which has an area of 200 hectares, more or less. He stated that Juan built a house there and could not recall of anyone else who claimed ownership of the Lot. On 7 August 1997, the Assistant City Prosecutor of Tagaytay City filed his Manifestation and Comment dated 28 July 1997:

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COMES NOW the government, through the undersigned Assistant City Prosecutor of Tagaytay City, assisting the Office of the Provincial Prosecutor of the Province of Cavite, by way of comment to petitioner's formal offer of evidence dated July 3, 1997 hereby manifest that the government interposes no objection to Exhibit 'A' up to 'PP' together with its sub markings, the same being material and relevant to the instant petition. The government further manifests that considering the fact that it has no controverting evidence in its possession to refute the material allegations of the herein petitioner, the government is submitting the instant case for the immediate resolution of this Honorable Court on the basis of the evidence adduced by the petitioner and the cross examination propounded by the Trial Prosecutor.18 On 29 September 1997, the trial court rendered a Decision ordering the registration of the Lot in the name of Juan Fabio. The dispositive portion states: WHEREFORE, PREMISES CONSIDERED, finding the application for registration and grant of title under Act 496, as amended by Presidential Decree No. 1529 to be meritorious and fully substantiated by evidence sufficient and requisite under the law, this Court, confirming its previous Order of general default as against the general public, hereby decrees and adjudges and hereby orders the registration of the parcel of land as hereinabove described, identified, and bounded and now the subject matter of the present application for registration of title in the above-entitled case, in favor of, and in the name of JUAN FABIO, of Barangay Sapang, Municipality of Ternate, Province of Cavite. FURTHER, upon the finality of this DECISION, the Administrator, Land Registration Authority, is hereby ordered to issue the corresponding decree of registration and the Original Certificate of Title in favor of, and in the name of JUAN FABIO, of Barangay Sapang, Municipality of Ternate, Province of Cavite, over the parcel of land described, identified and bounded as hereinabovementioned and subject matter of this Decision which decreed and adjudged the registration of its title in his name. SO ORDERED.19 The Republic of the Philippines (petitioner), through the Office of the Solicitor General, filed an appeal with the Court of Appeals. Petitioner claimed that the trial court erred in ruling that respondents have acquired a vested right over the Lot which falls within the Calumpang Point Naval Reservation. Petitioner asserted that the trial court disregarded the testimony of Pangyarihan who recommended the approval of the survey plan with the following notation: This survey falls within the Calumpang Point Naval Reservation and disposition hereof shall be subject to the final delimitation thereof as per Proc. No. 1582-A dated September 6, 1976. x x x In essence, petitioner argued that the trial court's grant of registration is contrary to the provisions of Section 88 of Commonwealth Act No. 14120 and Proclamation No. 1582-A.21 The Ruling of the Court of Appeals On 29 August 2003, the Court of Appeals affirmed the ruling of the trial court.22 The appellate court ruled that the mode of appeal filed by petitioner was wrong. Since the lone question involved was one of law, petitioner should have filed a petition for review with this Court under Rule 45 of the 1997 Rules of Civil Procedure instead of filing an appeal under Rule 41. Nevertheless, the appellate court looked into the merits of the case and sustained the findings of the trial court: On the merits of the case, it may be true that the General Order 56 of the United States War Department dated 25 March 1904 reserved the subject property as a military reservation, however, President Ferdinand Marcos issued Proclamation 307 on 20 November 1967 which provides x x x. In other words, Presidential Proclamation 307 provides for an exception - those properties subject to private rights or those on which private individuals can prove ownership by any mode acceptable under our laws and Torrens system. Proclamation 1582-A issued by President Marcos on 6 September 1976 again provided the following x x x. Without doubt, this complements and recognizes the rights acquired by private individuals under Proclamation 307, over the portion of the properties reserved under General Order 56 of the United States War Department dated 25 March 1904. Considering that the annotation appearing in the survey plan merely provides that the controversial portion shall be subject to final delimitation as per Proclamation 1582-A, the same is consistent with the provisions of Proclamation 307. For wrong remedy and for lack of merit, the Court holds and so rules that the trial court erred not in granting petitioners' application for registration of title.

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WHEREFORE, premises considered, the appeal is DISMISSED and the challenged 29 September 1997 Decision of the court a quo is hereby AFFIRMED in toto. No costs. SO ORDERED.23 Hence, the instant petition. The Issues The issues for our resolution are (1) whether petitioner correctly appealed the ruling of the trial court to the Court of Appeals, and (2) whether the respondents have acquired a right over the Lot. The Court's Ruling The petition has merit. First Issue: Mode of Appeal Petitioner contends that the jurisdiction of the Court of Appeals over the appeal is determined on the basis of the averments in the notice of appeal. Since the appeal involves questions of fact and law, petitioner correctly appealed the ruling of the trial court to the Court of Appeals and not directly to this Court. Respondents, on the other hand, maintain that the remedy resorted to by petitioner before the Court of Appeals was not correct. Respondents contend that the issues actually raised in the appellant's brief determine the appropriate mode of appeal, not the averments in the notice of appeal. Since the appellate court found that petitioner only raised questions of law, the appeal is dismissible under the Rules. Section 2, Rule 41 of the 1997 Rules of Civil Procedure, as amended, which governs appeals from judgments and final orders of the Regional Trial Court to the Court of Appeals, provides:cra:nad Section 2. Modes of appeal. (a) Ordinary appeal. The appeal to the Court of Appeals in cases decided by the Regional Trial Court in the exercise of its original jurisdiction shall be taken by filing a notice of appeal with the court which rendered the judgment or final order appealed from and serving a copy thereof upon the adverse party. No record on appeal shall be required except in special proceedings and other cases of multiple or separate appeals where the law or these Rules so require. In such cases, the record on appeal shall be filed and served in like manner. (b) Petition for review. The appeal to the Court of Appeals in cases decided by the Regional Trial Court in the exercise of its appellate jurisdiction shall be by petition for review in accordance with Rule 42. (c) Appeal by certiorari. In all cases where only questions of law are raised or involved, the appeal shall be to the Supreme Court by petition for review on certiorari in accordance with Rule 45. (Emphasis supplied) A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For questions to be one of law, the same must not involve an examination of the probative value of the evidence presented by the litigants. The resolution of the issue must rest solely on what the law provides on the given set of circumstances.24 cra In its appellant's brief filed with the Court of Appeals, petitioner interposed a lone assignment of error:cra:nad The trial court erred in ruling that appellees have acquired a vested right over the subject property despite the fact that it falls within the Calumpang Point Naval Reservation.25 cra Clearly, the issue stated by petitioner provides no confusion with regard to the truth or falsity of the given facts pertaining to the Lot and its location as established during the trial. It had been duly established that the Lot falls within the Calumpang Point Naval Reservation as shown in the survey conducted and attested to by the DENR. Here, the only issue involved is the interpretation of a relevant order and proclamations denominating the Lot as part of a military reservation subject to the limitation that private rights should be respected. Undoubtedly, this is a pure question of law.

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Thus, petitioner's appeal under Rule 41 having been improperly brought before the Court of Appeals, it should have been dismissed by the appellate court pursuant to Section 2, Rule 50 of the 1997 Rules of Civil Procedure, as amended, which provides: Sec. 2. Dismissal of improper appeal to the Court of Appeals. An appeal under Rule 41 taken from the Regional Trial Court to the Court of Appeals raising only questions of law shall be dismissed, issues purely of law not being reviewable by the said court. x x x (Emphasis supplied) Nonetheless, the appellate court in resolving that petitioner's appeal constituted a wrong remedy, looked into the merits of the case and found that the laws involved recognize the rights of Respondents. As such, equity considerations require that we take a similar course of action in order to put a rest to this case. Second Issue: Validity of Respondents' Title Petitioner asserts that both the trial and appellate courts failed to recognize the import of the notation in the survey plan stating that the Lot falls within the Calumpang Point Naval Reservation. At the time the application for registration of title was filed, the Lot was no longer open to private ownership as it had been classified as a military reservation for public service. Thus, respondents are not entitled to have the Lot registered under the Torrens system. Respondents, on the other hand, maintain that they have acquired a vested right over the Lot. The Presidential Proclamations, which declared the Lot part of a naval reservation, provided for an exception that private rights shall be respected, taking the portion covered by private rights out of the reservation. Thus, respondents claim they are entitled to have the Lot registered under their names. The three proclamations cited reserving the Calumpang Point Naval Reservation for the exclusive use of the military are the following: (1) U.S. War Department Order No. 56 issued on 25 March 1904, (2) Proclamation No. 30726 issued on 20 November 1967, and (3) Proclamation No. 1582-A issued on 6 September 1976. Such proclamations state: U.S. War Department General Order No. 5627 cra U.S. War Department General Order No. 56 Washington, March 25, 1904. For the knowledge and governance of all interested parties, the following is hereby announced:cra:nad The President of the United States, by the Order dated March 14, 1904, which provides that the reservations made by Executive Order of April 11, 1902 (General Order No. 38, Army Headquarters, Office of the Adjutant General, April 17, 1902), at the entrance of Manila Bay, Luzon, Philippine Islands, are arranged in such a way that will include only these lands as later described, whose lands were reserved by the Order of March 14, 1904 for military purposes, by virtue of Article 12 of the Act of Congress approved on July 1, 1902, entitled "Act providing for the Temporary Administration of Civil Affairs of the Government of the Philippine Islands and for Other Purposes" (32 Stat. L., 691); namely:cra:nad 1. In the northern side of the entrance to Manila Bay, in the province of Bataan, Luzon (Mariveles Reservation), all public lands within the limits that are described as follows:cra:nad "Starting from the mouth of the Mariveles River in the eastern border and from here straight North to a distance of 5,280 feet; from this point straight to the East to intercept a line, in a straight direction to the South from a stone monument marked U.S. (Station 4); from there straight from the North until the aforementioned Station 4; from here straight to the East to a distance of 6,600 feet until a stone monument marked U.S. (Station 5); from here straight South to a distance of 6,600 feet until a stone monument marked U.S. (Station 6); from here straight to the East to a distance of 8,910 feet until a stone monument marked U.S. (Station 7); from here straight to the South to a distance of 7,730 feet until a stone monument marked U.S. (Station 8), situated at the northwest corner of the second creek to the east of Lasisi Point, 30 feet North of the high-tide mark; from there in the same direction until the high-tide mark; from here towards the East following the shoreline up to the starting point." 2. In the southern side of the Manila Bay entrance, in the province of Cavite, Luzon (Calumpan Point Reservation), all public lands within the limits that are described as follows:cra:nad "Starting from a stone monument marked U.S. (Station 1) situated in the cliff on the Eastern side of Asubig Point, 20 feet above the high-tide mark and about 50 feet from the edge of the cliff and continuing from there to the South 28 10' West, a distance of up to 22,000 feet until a stone monument marked U.S. (Station 2); from here to North 54 10' West at a distance of 5,146 feet until a stone monument marked U.S. (Station 3); from here towards South 85 35 ' 30 "West, at a distance of 2,455 feet until a stone monument marked U.S. (Station 4), situated on the beach near the Northeast corner of Limbones Bay, about 50 feet from the high-tide mark and following in the same direction until the high-tide mark; from here towards North

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and East following the shoreline until North 28 10 ' East from the starting point and from there encompassing more or less 5,200 acres. The markers are exact." 3. The islands of Corregidor, Pulo Caballo, La Monja, El Fraile, and Carabao, and all other islands and detached rocks lying between Mariveles Reservation on the north side of the entrance to Manila Bay and Calumpan Point Reservation on the south side of said entrance. 4. The jurisdiction of the military authorities in the case of reservations in the northern and southern beaches of the entrance to Manila Bay and all the islands referred to in paragraph 3, are extended from the high-tide marker towards the sea until a distance of 1,000 yards. By Order of the Secretary of War:cra:nad GEORGE L. GILLESPIE, General Commander, Chief of Internal General Staff, Official copy. W.P. HALL, Internal Adjutant General. (Emphasis supplied) Proclamation No. 307 x x x do hereby withdraw from sale or settlement and reserve for military purposes under the administration of the Chief of Staff, Armed Forces of the Philippines, subject to private rights, if any there be, a certain parcel of land of the public domain situated in the municipality of Ternate, province of Cavite, Island of Luzon, more particularly described as follows: Proposed Naval Reservation Calumpang Point A parcel of land (the proposed Calumpang Point Naval Reservation), situated in the municipality of Ternate, province of Cavite. Bounded on the NW., N. and E., by Manila Bay; on the SE. and S., by municipality of Ternate; and on the W., by Manila Bay. Beginning at a point marked "1" on the attached Sketch Plan traced from Coastal Hydrography of Limbones Island. thence N. 54 deg. 30' E., 750.00 m. to point 2; thence N. 89 deg. 15'E., 1780.00 m. to point 3; thence N. 15 deg. 10' E., 6860.00 m. to point 4; thence N. 12 deg. 40' W., 930.00 m. to point 5; thence S. 77 deg. 20' W., 2336.00 m. to point 6; thence S. 49 deg. 30' W., 4450.00 m. to point 7; thence S. 12 deg. 40' E., 2875.00 m. to point 8; thence S. 30 deg. 30' E., 2075.00 m. to the point of beginning; containing an approximate area of twenty eight million nine hundred seventy three thousand one hundred twelve (28, 973,112) square meters. NOTE: All data are approximate and subject to change based on future surveys." Proclamation No. 1582-A WHEREAS, Proclamation No. 307 dated November 20, 1967 and U.S. War Department Order No. 56 dated March 25, 1904 reserved for military purposes, and withdrew from sale or settlement, a parcel of land of the public domain situated in the Municipality of Ternate, Province of Cavite, more particularly described as follows: x x x WHEREAS, the Philippine Navy and the Philippine Marines now need that portion of this area reserved under Proclamation No. 307, particularly, Cayladme Cove, Caynipa Cove, Calumpang Cove and Sinalam Cove, for their use as official station, not only to guard

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and protect the mouth of Manila Bay and the shorelines of the Province of Cavite, Batangas and Bataan, but also to maintain peace and order in the Corregidor area, which is now one of the leading tourist attractions in the country; x x x x x x containing an approximate area of EIGHT MILLION EIGHTY NINE THOUSAND NINE HUNDRED NINETY (8,089,990) SQUARE METERS, more or less. The portion that remains after the segregation which are occupied shall be released to bona fide occupants pursuant to existing laws/policies regarding the disposition of lands of the public domain and the unoccupied portions shall be considered as alienable or disposable lands. (Emphasis supplied) The proclamations established that as early as 1904 a certain parcel of land was placed under the exclusive use of the government for military purposes by the then colonial American government. In 1904, the U.S. War Department segregated the area, including the Lot, for military purposes through General Order No. 56. Subsequently, after the Philippines regained its independence in 1946, the American government transferred all control and sovereignty to the Philippine government, including all the lands appropriated for a public purpose. Twenty years later, two other presidential proclamations followed, both issued by former President Ferdinand E. Marcos, restating that the same property is a naval reservation for the use of the Republic. There is no question that the Lot is situated within a military reservation. The only issue to be resolved is whether the respondents are entitled to have the Lot registered under the Torrens systems based on the limitation clause cited in the proclamations: (1)"subject to private rights, if any there be" in Proclamation No. 307, and (2) "the portion that remains after the segregation which are occupied shall be released to bona fide occupants pursuant to existing laws/policies regarding the disposition of lands of the public domain and the unoccupied portions shall be considered as alienable or disposable lands" in Proclamation No. 1582-A. This proviso means that persons claiming rights over the reserved land are not precluded from proving their claims. In effect, the State gives respect and recognizes the rights of private persons who may have acquired any vested interest to the Lot before the issuance of the General Order or proclamations. Commonwealth Act No. 141 (CA 141), also known as the Public Land Act, remains to this day the existing general law governing the classification and disposition of lands of the public domain, other than timber and mineral lands.28 Under the Regalian doctrine embodied in our Constitution, land that has not been acquired from the government, either by purchase, grant or any other mode recognized by law, belongs to the State as part of the public domain.29 No public land can be acquired by private persons through any other means, and it is indispensable that the person claiming title to public land should show that his title was acquired through purchase or grant from the State, or through any other mode of acquisition recognized by law.30 chanroblesvirtuallawlibary Section 48(b) of CA 141, as amended by Presidential Decree No. 1073 (PD 1073),31 provides: Sec. 48. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such land 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:cra:nad 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 of ownership, since June 12, 1945, or earlier, 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.32 Similarly, Section 14 of PD 1529 or the Property Registration Decree, governing original registration through registration proceedings, provides: SECTION 14. Who may apply. - The following persons may file in the proper Court of First Instance an application for registration of title to land, whether personally or through their duly authorized representatives:cra:nad (1) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier. xxx

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To put it simply, Section 14(1) of PD 1529 states that there are three requisites for the filing of an application for registration of title: (1) that the property in question is alienable and disposable land of the public domain; (2) that the applicants by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation; and (3) that such possession is under a bona fide claim of ownership since 12 June 1945 or earlier. To prove that the Lot is alienable and disposable land of the public domain, respondents presented in evidence a letter33 dated 22 April 1991 of Conlu, a Land Management Inspector of the DENR-Region IV. The relevant portion of the letter states: In examination [of] the above-noted subject, please be [informed] that I have examined the land x x x and the following findings [were] ascertained; That the land covers a portion of 3 (three) barangays, namely: Calumpang, Cabangat and Zapang, all within the municipality of Ternate, Cavite; That the land is within alienable and disposable zone under Project No. 22-B, L.C. Map No. 3091; That the land was declared for taxation purposes since 1945, the latest of which is Tax Declaration No. 1543 with a market value ofP1,250,000.00 in favor of Juan Fabio x x x (Emphasis supplied) This letter-certification is insufficient. Conlu is merely a land investigator of the DENR. It is not enough that he alone should certify that the Lot is within the alienable and disposable zone. Under Section 6 of the Public Land Act, the prerogative of classifying or reclassifying lands of the public domain belongs to the President.34 The President, through a presidential proclamation or executive order, can classify or reclassify a land to be included or excluded from the public domain. The DENR Secretary is the only other public official empowered by law to approve a land classification and declare such land as alienable and disposable.35 cra From the records, this letter was the only evidence presented by respondents to prove that the Lot is alienable and disposable. In fact, not even the Community Environment and Natural Resources Office (CENRO) certified as correct the investigation report of the Land Management Inspector. The most that the CENRO officer did was to indorse the report to the Regional Technical Director of the DENR.36 In Republic v. T.A.N. Properties, Inc.,37 we ruled that it is not enough for the Provincial Environment and Natural Resources Office (PENRO) or CENRO to certify that a land is alienable and disposable. The applicant for land registration must prove that the DENR Secretary had approved the land classification and released the land of the public domain as alienable and disposable, and that the land subject of the application for registration falls within the approved area per verification through survey by the PENRO or CENRO. In addition, the applicant must present a copy of the original classification of the land into alienable and disposable, as declared by the DENR Secretary, or as proclaimed by the President. Such copy of the DENR Secretary's declaration or the President's proclamation must be certified as a true copy by the legal custodian of such official record. These facts must be established to prove that the land is alienable and disposable. Respondents have failed to present any of these documents. No document was presented to show that the DENR Secretary or the President has classified the Lot as alienable and disposable. No CENRO or PENRO certification was presented that the Lot, per verification through survey, falls within the alienable and disposable zone. The 22 April 1991 letter of Land Management Inspector Conlu is not proof that the DENR Secretary or the President has classified the Lot as alienable and disposable, or that the Lot falls within the alienable and disposable zone. The mere issuance of the letter does not prove the facts stated in such letter.38 chanroblesvirtuallawlibary Further, the burden is on respondents to prove that the Lot ceased to have the status of a military reservation or other inalienable land of the public domain. No proof was ever submitted by respondents that the Calumpang Point Naval Reservation, or the Lot, ceased as a military reservation. Even if its ownership and control had been transferred by the Americans to the Philippine government, the Calumpang Point Naval Reservation remained as an official military reservation. Thus, being a military reservation at the time, the Calumpang Point Naval Reservation, to which the Lot is a part of, can not be subject to occupation, entry or settlement. 39 This is clear from Sections 83 and 88 of CA 141, which provide: SECTION 83. Upon the recommendation of the Secretary of Agriculture and Commerce, the President may designate by proclamation any tract or tracts of land of the public domain as reservations for the use of the Commonwealth of the Philippines or of any of its branches, or of the inhabitants thereof, in accordance with regulations prescribed for this purpose, or for quasi-public uses or purposes when the public interest requires it, including reservations for highways, rights of way for railroads, hydraulic power sites, irrigation systems, communal pastures or leguas comunales, public parks, public quarries, public fishponds, working-men's village and other improvements for the public benefit. SECTION 88. The tract or tracts of land reserved under the provisions of section eighty-three shall be non-alienable andshall not be subject to occupation, entry, sale, lease, or other disposition until again declared alienable under the provision of this Act or by proclamation of the President. (Emphasis supplied)

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Well-entrenched is the rule that unless a land is reclassified and declared alienable and disposable, occupation in the concept of an owner, no matter how long, cannot ripen into ownership and be registered as a title.40 Consequently, respondents could not have occupied the Lot in the concept of an owner in 1947 and subsequent years when respondents declared the Lot for taxation purposes, or even earlier when respondents' predecessors-in-interest possessed the Lot, because the Lot was considered inalienable from the time of its declaration as a military reservation in 1904. Therefore, respondents failed to prove, by clear and convincing evidence, that the Lot is alienable and disposable. Public lands not shown to have been classified as alienable and disposable land remain part of the inalienable public domain.41 In view of the lack of sufficient evidence showing that the Lot was already classified as alienable and disposable, the Lot applied for by respondents is inalienable land of the public domain, not subject to registration under Section 14(1) of PD 1529 and Section 48(b) of CA 141, as amended by PD 1073. Hence, there is no need to discuss the other requisites dealing with respondents' occupation and possession of the Lot in the concept of an owner. While it is an acknowledged policy of the State to promote the distribution of alienable public lands to spur economic growth and in line with the ideal of social justice, the law imposes stringent safeguards upon the grant of such resources lest they fall into the wrong hands to the prejudice of the national patrimony.42 We must not, therefore, relax the stringent safeguards relative to the registration of imperfect titles.43 cra In Republic v. Estonilo,44 we ruled that persons claiming the protection of "private rights" in order to exclude their lands from military reservations must show by clear and convincing evidence that the properties in question have been acquired by a legal method of acquiring public lands. Here, respondents failed to do so, and are thus not entitled to have the Lot registered in their names. Clearly, both the trial and appellate courts gravely erred in granting respondents' application for registration of title. WHEREFORE, we GRANT the petition. We SET ASIDE the 29 August 2003 Decision of the Court of Appeals in CA-G.R. CV No. 66522. We DISMISS respondents' application for registration and issuance of title to Lot No. 233, Cad-617-D, Ternate Cadastre in LRC Case No. NC-96-782 filed with the Regional Trial Court of Naic, Cavite, Branch 15. SO ORDERED. G.R. No. L-68533 May 23, 1986 DIRECTOR OF LANDS and DIRECTOR OF FOREST DEVELOPMENT, Petitioners, vs. MARIANO FUNTILAR, MAGDALENA FUNTILAR, HEIRS OF FELIPE ROCETE and INTERMEDIATE APPELLATE COURT (Third Civil Cases Division), Respondents.

GUTIERREZ, JR., J.: chanrobles virtual law library This is a petition to review the decision of the respondent court which affirmed the adjudication by the land registration court of a parcel of land in Mulanay, Quezon in favor of the private respondents.chanroblesvirtualawlibrary chanrobles virtual law library In 1972, Mariano Funtilar, Magdalena Funtilar, and the Heirs of Felipe Rocete applied for the registration of a parcel of land described in PSU-215779, with an area of 226,773 square meters.chanroblesvirtualawlibrary chanrobles virtual law library Unrebutted testimonial evidence established that the land was part of the property originally belonging to one Candida Fernandez whose ownership and possession began sometime during her lifetime and extended until 1936 when she died. (Tsn., August 6, 1976, Testimony of Florencio Marquez, Exhibit "U"). The present applicants are the grandchildren of Candida Fernandez. In 1936, after the death of Candida Fernandez, her real property was declared in the name of the "Heirs of Candida Fernandez under Tax Declaration No. 9622, with an area of thirty (30) hectares.chanroblesvirtualawlibrary chanrobles virtual law library Subsequently, sometime in 1940 or 1941, the parcel of land was forfeited in favor of the government for failure to pay real estate taxes. However, the same was redeemed in 1942 by Vitaliano Aguirre, one of the three children of Candida Fernandez, who was then the administrator of the property. A final deed of sale (Exhibit "N") was executed by the Provincial Treasurer of Tayabas in 1944 in favor of Vitaliano Aguirre. It had been agreed among the heirs that the property would first be held by Vitaliano in trust for the others until such time that partition among them was effected. The evidence shows Vitaliano's public and continuous possession.chanroblesvirtualawlibrary chanrobles virtual law library The heirs of Candida Fernandez later partitioned the property among themselves. The particular lot now disputed in this petition was adjudicated in favor of the applicants-respondents. Shortly after the partition, in 1948, the new owners declared their share for taxation purposes. Tax Declaration 91 for that year indicated the land as 12 hectares. This declaration was followed by another one, Tax Declaration No. 2021, in 1958.chanroblesvirtualawlibrary chanrobles virtual law library

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In 1965, the private respondents caused a survey of their property to be made. The property was found to actually contain an area of 22.6773 hectares. This corrected area was reflected in subsequent tax declarations. The last one submitted in evidence is dated 1974.chanroblesvirtualawlibrary chanrobles virtual law library An ocular inspection conducted by the trial court found more than one hundred (100) coconut trees with ages over thirty (30) years old, out of a total of more or less one thousand four hundred (1,400) coconut trees on the land.chanroblesvirtualawlibrary chanrobles virtual law library The Director of Lands and Director of Forest Development filed an opposition alleging that neither applicants nor their predecessor-ininterest possessed sufficient title to the land, not having acquired the same under any of the recognized Spanish titles under the Royal Decree of February 13, 1894; that neither applicants, nor their predecessors have been in open, continuous, exclusive and notorious possession and occupation of the land for at least thirty (30) years immediately preceding the filing of the application; and that the land is a portion of the public domain belonging to the Republic of the Philippines.chanroblesvirtualawlibrary chanrobles virtual law library Donaciano Pumarada, with three others also filed an opposition alleging that they have registrable title on account of their possession since time immemorial.chanroblesvirtualawlibrary chanrobles virtual law library Rafael M. Morales filed a separate opposition, alleging that there was no actual survey of the land applied for; and that he is entitled to registration on account of his occupation and that of his predecessor.chanroblesvirtualawlibrary chanrobles virtual law library The spouses Dominador Lacson and Esperanza Lacson likewise filed their opposition with respect to "the portion of land embraced by points 22 to 24 to 25 to 26 to 27 and by a straight line drawn between point 27 to point 23 of Plan Psu-215779" in answer to which the applicants-respondents agreed to relinquish or quitclaim whatever right, title, and interest they might have over the above specified portion in favor of oppositors Lacson. In view thereof, the oppositor spouses withdrew their opposition in the land registration case.chanroblesvirtualawlibrarychanrobles virtual law library On November 26, 1982, the trial court rendered its decision adjudicating the land to applicants as follows: WHEREFORE, and in view of the foregoing, the applicants, namely MARIANO FUNTILAR, MAGDALENA FUNTILAR and the HEIRS OF FELIPE ROCETE are hereby declared owners proindiviso of the parcel of land described according to Plan Psu-215779, with an area of 22.6773 square meters, subject to the claim of oppositors Dominador Lacson and Esperanza Lacson as per agreement with the applicants and when the decision becomes final and executory, let a final decree be issued for the issuance of title as provided by Act 496.chanroblesvirtualawlibrary chanrobles virtual law library The Government alone, represented by the Director of Lands and Director of Forest Development, filed its appeal with the respondent Intermediate Appellate Court. The decision now under review dated August 24, 1984 states: chanrobles virtual law library xxx xxx xxx chanrobles virtual law library According to the government oppositors, the land in question was certified as alienable and disposable only on September 3, 1953, They, therefore, conclude that herein applicants could not have been in possession of said land for more than 30 years. There is no evidence presented by the government, however, that said land in question was part of the forest zone. For that matter, during the hearing, the Director of Forestry and the Director of Lands manifested in writing that they have no evidence in support of their opposition. They have not presented plans or sketches to show that the land in question is part of the communal forest.chanroblesvirtualawlibrary chanrobles virtual law library Under the foregoing circumstances, We do not find any merit in the appeal of the Government. It has been ruled on this issue that the Director of Forestry has the burden of proving that a piece of land belongs to the forest zone (Ramos vs. Director of Lands, 39 Phil. 175; de Villa vs. Director of Lands, CA-G.R. No. 5847-R, June 13, 1952).chanroblesvirtualawlibrary chanrobles virtual law library ... It has been ruled that the inclusion of portions of said lands within the reservations declared by the Director of Forestry in 1928 cannot affect the vested rights of applicants and her predecessors who have been continuously occupying and profiting from the land since time immemorial (Ankron vs. Government of the Phil., 40 Phil. 15; Llana vs. Director of Forestry, CA-G.R. No. 4887-R, Sept. 23, 1950). Applicants have established by preponderance of evidence that they and their predecessors-in-interest have been in open, continuous, adverse and public possession of the land in question for over 30 years introducing improvements thereon.chanroblesvirtualawlibrarychanrobles virtual law library As we have stated in previous decisions, the registration of public lands for private titles after satisfying the requirements of open, adverse and public possession will be more beneficial to the country as it will promote development of Idle lands.chanroblesvirtualawlibrary chanrobles virtual law library

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WHEREFORE, finding no reversible error thereof, decision appealed from is hereby AFFIRMED. Hence, this petition chanrobles virtual law library The petitioners contend that in affirming the decision of the lower court, the Intermediate Appellate Court committed the following errors: I chanrobles virtual law library 1. IN NOT FINDING THAT THE IdENTITY OF THE LAND SOUGHT TO BE REGISTERED HAS NOT BEEN ESTABLISHED.chanroblesvirtualawlibrary chanrobles virtual law library 2. IN NOT HOLDING THAT APPLICANTS. RESPONDENTS HAVE NOT MET THE REQUIREMENTS OF POSSESSION FOR AT LEAST THIRTY (30) YEARS IMMEDIATELY PRECEDING THE FILING OF THEIR APPLICATION IN 1972 AS TO ENTITLE THEM TO REGISTRATION.chanroblesvirtualawlibrary chanrobles virtual law library 3. IN NOT DECLARING APPLICANTS RESPONDENTS ARE NOT ENTITLED TO REGISTRATION.chanroblesvirtualawlibrary chanrobles virtual law library 4. IN NOT FINDING THAT APPLICANTS RESPONDENTS HAVE FAILED TO OVERTHROW THE PRESUMPTION THAT THE LAND IS PUBLIC LAND The petitioners have come to us for a review on questions of fact property within the province of the trial courts to resolve. (Santos vs.Aranzanso 116 SCRA 1). This case furnishes occasion for us to reiterate the general principle that only legal questions, not factual issues, Should be raised in the Supreme Court (Magpantay vs. Court of Appeals, 116 SCRA 236) and that findings of fact of the Intermediate Appellate Court should not be disturbed absent any showing of grave error or abuse of discretion. Since the factual findings of the respondent court are fully substantiated by evidence on record ( Regalano vs. Northwest Finance Corporation, 117 SCRA 45), we decide not to disturb them.chanroblesvirtualawlibrary chanrobles virtual law library The first issue raised refers to identity.chanroblesvirtualawlibrary chanrobles virtual law library Petitioners allege that the identity of the land sought to be registered has not been established. We sustain the contrary finding. Survey Plan Psu-215779 of the property, showing its boundaries and total area, clearly Identifies and delineates the extent of the land. The petitioners cite the insufficiency of such a survey to identify the land. The petitioners overlook the fact that no survey would at all be possible where the Identity of the land is not first properly established. More importantly, without such Identification, no opposition, even its own, to the application for registration could be interposed. Encroachment on or adverse possession of property could not be justly claimed.chanroblesvirtualawlibrary chanrobles virtual law library The petitioners cite differences in the description of the land boundaries, as well as in the land area stated in the tax declarations submitted in evidence by applicants-respondents. They allege that these do not refer to one and the same property.chanroblesvirtualawlibrary chanrobles virtual law library A careful examination of the record shows a misinterpretation of the evidence as to the Identification of the land. Tax Declaration Nos. 91 and 2021 in 1948 describe a twelve-hectare property bounded as follows: "N-Mocboc Brook; E-Campacat Mt. ; S-Emilio Aguirre; W-Mocboc Brook and Briccio Morales. Tax Declaration Nos. 3757 and 2662 in 1964 and 1974 speak of a 22.6773-hectare land bounded" N-Mariano Funtilar, et al.; "E-Heirs of Donaciano Pumarada; S-Emilio Aguirre; W-Emilio Aguirre and Bagopaye Creek." However, the applicants-respondents have satisfactorily explained the discrepancy. Tax Declaration Nos. 91 and 2021 followed in tax payments from 1948 to 1958 and beyond were made prior to the survey of the property in 1965. Tax Declaration Nos. 3757 and 2662 were made subsequent thereto and, hence, account for the difference in area stated. Such differences are not uncommon as early tax declarations are, more often than not, based on approximation or estimation rather than on computation. More so, if the land as in this case was merely inherited from a predecessor and was still held in common. Differences in boundaries described in required municipal forms may also occur with changes in boundary owners, changes of names of certain places, a certain natural boundary being known by more than one name or by plain error. Neither was it uncommon then to designate the nearest, most visible natural landmarks such as mountains, creeks, rivers, etc. to describe the location or situation of the boundaries of properties in the absence of knowledge of technical methods of measuring or determining boundaries with accuracy, especially where as in this case, the same were made merely by humble farm people. Certain discrepancies, if logically explained later, do not make doubtful, the Identification of the property as made, understood and accepted by the parties to the case.chanroblesvirtualawlibrary chanrobles virtual law library It is respondents' contention that the land in question was originally owned by Candida Fernandez; forfeited in favor of the government for non-payment of taxes; subsequently repurchased by Vitaliano Aguirre in a tax delinquency sale and finally adjudicated in favor of applicants in 1948. Petitioners, however, allege that the relationship of the land sold at auction with the land subject of registration has

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not been established, since the final deed of sale in favor of Aguirre and the survey plan Psu-215779 refer to two different parcels of land.chanroblesvirtualawlibrary chanrobles virtual law library The difference in boundary descriptions has already been explained. Anent the disparity in land area, it must be noted that the property mentioned in the final deed of sale issued by the provincial treasurer at the delinquency auction sale was the property originally owned by Candida Fernandez. The parcel of land sought to be registered and Identified by Survey Plan Psu-215779 is a part of that property. The surveyed land resulted from the partition of Candida's property among her heirs. Adjudicated in favor of herein respondents was 22.6773 hectares thereof, the rest having gone to Emilio Aguirre, a son of Candida whose property bounds the parcel of land in dispute on the south. Such fact is revealed by the testimony of Mariano Funtilar on direct examination, to wit: xxx xxx xxx Q. Your counsel has presented a certain Exhibit 1, which is a certification from the Municipal Treasurer of Mulanay. It clearly states that a certain parcel of land is declared in the name of the heirs of Candida Fernandez, the administrator of which is Petronila Aguirre which clearly shows that the tax declaration was only made in the name of the heirs Candida Fernandez, but in her name, is that right? chanrobles virtual law library A. Yes, sir.chanroblesvirtualawlibrary chanrobles virtual law library xxx xxx xxx chanrobles virtual law library Q. Do we understand also that you are trying to register only the portion that you personally, your brother and sister are occupying? chanrobles virtual law library A. Yes, sir and we are applying for that.chanroblesvirtualawlibrary chanrobles virtual law library Q. In other words, it is clear that this land supposedly originally owned by Candida Fernandez is a bigger portion, is that correct, a bigger parcel? chanrobles virtual law library A. Yes, sir.chanroblesvirtualawlibrary chanrobles virtual law library Q. And only a portion of the land is allotted to your brothers and sisters? chanrobles virtual law library A. Yes, sir.chanroblesvirtualawlibrary chanrobles virtual law library (Tsn-March 13, 1975, Land Reg. Case No. 192-G, p. 7) chanrobles virtual law library xxx xxx xxx chanrobles virtual law library And on cross-examination chanrobles virtual law library ATTY. LAUREL: chanrobles virtual law library Q. Would you like to enlighten this Court that you and your brother and sister who are children of Antonia Resales received this property, this entire property were the only ones who received this entire property? chanrobles virtual law library A. That was the property pointed to uses our own, sir.chanroblesvirtualawlibrary chanrobles virtual law library Q. I am asking you whether this entire property was given- was inherited by the children of Antonia Rosales only? chanrobles virtual law library A. That is a big parcel but it is only a portion which was given to us which we are causing for registration, sir.chanroblesvirtualawlibrary chanrobles virtual law library xxx xxx xxx chanrobles virtual law library (Tsn-March 4, 1976, Land Reg. No. 192-G, p. 7) chanrobles virtual law library ATTY. LAUREL: chanrobles virtual law library

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Q. When you said portions were adjudicated to the heirs in order to avoid conflict in the repurchase do I get from you Mr. Funtilar, that the property repurchased that this property you are claiming in your application is only a portion of the property repurchased from the Government? chanrobles virtual law library A. Yes, sir.chanroblesvirtualawlibrary chanrobles virtual law library (Tsn-April 27, 1976, Land Reg. Case No. 1921-G, p. 18) The petitioners contend that the private respondents have failed to establish possession for at least thirty years to entitle them to confirmation of imperfect title and registration under the law. The petitioners also fault the respondents reliance on the 1944 tax delinquency sale, forgetting that possession must still be proved.chanroblesvirtualawlibrary chanrobles virtual law library We are satisfied from the evidence that long before her death in 1936, Candida Fernandez already possessed the disputed property. This possession must be tacked to the possession of her heirs, through administrator Vitaliano Aguirre, and later to the possession of the private respondents themselves, who are Candida's grandchildren.chanroblesvirtualawlibrary chanrobles virtual law library The fact of possession is bolstered by the forfeiture in 1940 of the land in favor of the government. It would be rather absurd under the circumstances of this case to rule that the government would order the forfeiture of property for non-payment of real estate taxes if the property is forest land. It is also reasonable to rule that the heirs of Candida Fernandez redeemed the property because they wanted to keep the land of the deceased in the possession of their family, thus continuing prior possession. From 1936 and earlier up to 1972 is more than the required period. As a matter of fact, the applicants' witnesses testified to their personal knowledge of more than 50 years possession.chanroblesvirtualawlibrary chanrobles virtual law library More important is the petitioners' allegation that the property sought to be registered was unclassified public forest until September 15, 1953 when L C Project No. 16-0, L C Map No. 1634 declared it alienable and disposable.chanroblesvirtualawlibrary chanrobles virtual law library It was rather sweeping for the appellate court to rule that after an applicant files his application for registration, the burden shifts totally to the government to prove that the land forms part of the unclassified forest zone. The ruling in Heirs of Amunategui vs. Director of Forestry (126 SCRA 69) governs applications for confirmation of imperfect title. The applicant shoulders the burden of overcoming the presumption that the land sought to be registered forms part of the public domain.chanroblesvirtualawlibrary chanrobles virtual law library The private respondents tried their best to present the necessary evidence. A certification issued by then District Forester Fernando Roy on September 27, 1972 reads: x x x x x x x x x chanrobles virtual law library ... said parcel of land falls within the Alienable and Disposable LC Project No. 16-D, LCMap No. 1634 certified" (not classified) "on September 15, 1953, by the Director of Forestry. In view thereof, this office interposes no objection in behalf of the Director of Forestry for the registration and/or confirmation of title on the property mentioned therein without prejudice to such action, the Director of Lands and other government entities may deem proper to take on the premises. to which, the then District Land Officer of the Bureau of Lands, Land District No. IV-2 in Lucena City, in a communication dated March 16, 1973 responded: 1. the parcel of land subject of this registration was originally claimed by Emilio Aguirre and A. Fernandez and the herein applicants have acquired the rights and interest therein thru predecessors-in-interest; and chanrobles virtual law library 2. that said parcel of land has not been disposed of, reserved, leased, applied for or granted as homestead or otherwise be alienated by the government.chanroblesvirtualawlibrary chanrobles virtual law library In view of the above findings, and basing from the report of the investigation submitted thereon by a representative of this office, and considering that this Agency has no evidence to support the opposition of the Government, it is further informed that this office interposes no opposition in the confirmation of the rights to and interest on the parcel of land particularly described under Plan Psu215779 in favor of the herein applicants. The Regalian doctrine which forms the basis of our land laws and, in fact, all laws governing natural resources is a revered and long standing principle. It must, however, be applied together with the constitutional provisions on social justice and land reform and must be interpreted in a way as to avoid manifest unfairness and injustice.chanroblesvirtualawlibrary chanrobles virtual law library

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Every application for a concession of public land has to be viewed in the light of its peculiar circumstances. A strict application of the Heirs of Amunategui us. Director of Forestry (supra) ruling is warranted whenever a portion of the public domain is in danger of ruthless exploitation, fraudulent titling, or other questionable practices. But when an application appears to enhance the very reasons behind the enactment of Act 496, as amended, or the Land Registration Act, and Commonwealth Act 141, as amended, or the Public Land Act, then their provisions should not be made to stand in the way of their own implementation.chanroblesvirtualawlibrary chanrobles virtual law library The land sought to be registered was declared alienable and disposable 33 years ago. It is not forest land. It has been possessed and cultivated by the applicants and their predecessors for at least three generations. The attempts of humble people to have disposable lands they have been tilling for generations titled in their names should not only be viewed with an understanding attitude but should, as a matter of policy, be encouraged. We see no strong reason to reverse the findings of the trial court and the appellate court.chanroblesvirtualawlibrary chanrobles virtual law library WHEREFORE, the petition is hereby DISMISSED for lack of merit. The decision of the respondent appellate court is AFFIRMED.chanroblesvirtualawlibrary chanrobles virtual law library SO ORDERED. Feria (Chairman), Fernan, Alampay and Paras, JJ., concur. G. R. No. 133250 : May 6, 2003] FRANCISCO I. CHAVEZ, Petitioner, v. PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY DEVELOPMENT CORPORATION, Respondents. RESOLUTION CARPIO, J.: For resolution of the Court are the following motions: (1) Motion to Inhibit and for Re-Deliberation filed by respondent Amari Coastal Bay Development Corporation (Amari for brevity) on September 13, 2002; (2) Motion to Set Case for Hearing on Oral Argument filed by Amari on August 20, 2002; (3) Motion for Reconsideration and Supplement to Motion for Reconsideration filed by Amari on July 26, 2002 and August 20, 2002, respectively; (4) Motion for Reconsideration and Supplement to Motion for Reconsideration filed by respondent Public Estates Authority (PEA for brevity) on July 26, 2002 and August 8, 2002, respectively; and (5) Motion for Reconsideration and/or Clarification filed by the Office of the Solicitor General on July 25, 2002. Petitioner Francisco I. Chavez filed on November 13, 2002 his Consolidated Opposition to the main and supplemental motions for reconsideration. To recall, the Courts decision of July 9, 2002 (Decision for brevity) on the instant case states in its summary: We can now summarize our conclusions as follows: 1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by certificates of title in the name of PEA, arealienable lands of the public domain. PEA may lease these lands to private corporations but may not sell or transfer ownership of these lands to private corporations. PEA may only sell these lands to Philippine citizens, subject to the ownership limitations in the 1987 Constitution and existing laws. 2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of the public domain until classified as alienable or disposable lands open to disposition and declared no longer needed for public service. The government can make such classification and declaration only after PEA has reclaimed these submerged areas. Only then can these lands qualify as agricultural lands of the public domain, which are the only natural resources the government can alienate. In their present state, the 592.15 hectares of submerged areas are inalienable and outside the commerce of man. 3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34 hectares of the Freedom Islands, such transfer is void for being contrary to Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain. 4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares of still submerged areas of Manila Bay, such transfer is void for being contrary to Section 2, Article XII of the 1987 Constitution which prohibits the alienation of natural resources other than agricultural lands of the public domain. PEA may reclaim these submerged areas. Thereafter, the government can classify the reclaimed lands as alienable or disposable, and further declare them no longer needed for public service. Still, the

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transfer of such reclaimed alienable lands of the public domain to AMARI will be void in view of Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain. Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution. Under Article 1409 of the Civil Code, contracts whose object or purpose is contrary to law, or whose object is outside the commerce of men, are inexistent and void from the beginning. The Court must perform its duty to defend and uphold the Constitution, and therefore declares the Amended JVA null and void ab initio. Amari seeks the inhibition of Justice Antonio T. Carpio, ponente of the Decision, on the ground that Justice Carpio, before his appointment to the Court, wrote in his Manila Times column of July 1, 1997, I have always maintained that the law requires the public bidding of reclamation projects. Justice Carpio, then a private law practitioner, also stated in the same column, The Amari-PEA reclamation contract is legally flawed because it was not bid out by the PEA. Amari claims that because of these statements Justice Carpio should inhibit himself on the grounds of bias and prejudgment and that the instant case should be re-deliberated after being assigned to a newponente. The motion to inhibit Justice Carpio must be denied for three reasons. First, the motion to inhibit came after Justice Carpio had already rendered his opinion on the merits of the case. The rule is that a motion to inhibit must be denied if filed after a member of the Court had already given an opinion on the merits of the case,[1 the rationale being that a litigant cannot be permitted to speculate upon the action of the Court xxx (only to) raise an objection of this sort after a decision has been rendered. Second, as can be readily gleaned from the summary of the Decision quoted above, the absence of public bidding is not one of the ratio decidendi of the Decision which is anchored on violation of specific provisions of the Constitution. The absence of public bidding was not raised as an issue by the parties. The absence of public bidding was mentioned in the Decision only to complete the discussion on the law affecting reclamation contracts for the guidance of public officials. At any rate, the Office of the Solicitor General in its Motion for Reconsideration concedes that the absence of public bidding in the disposition of the Freedom Islands rendered the Amended JVA null and void.[2 Third, judges and justices are not disqualified from participating in a case just because they have written legal articles on the law involved in the case. As stated by the Court in Republic v. Cocofed,[3] The mere fact that, as a former columnist, Justice Carpio has written on the coconut levy will not disqualify him, in the same manner that jurists will not be disqualified just because they may have given their opinions as textbook writers on the question involved in a case. Besides, the subject and title of the column in question was The CCP reclamation project and the column referred to the Amari-PEA contract only in passing in one sentence. Amaris motion to set the case for oral argument must also be denied since the pleadings of the parties have discussed exhaustively the issues involved in the case. The motions for reconsideration reiterate mainly the arguments already discussed in the Decision. We shall consider in this Resolution only the new arguments raised by respondents. In its Supplement to Motion for Reconsideration, Amari argues that the Decision should be made to apply prospectively, not retroactively to cover the Amended JVA. Amari argues that the existence of a statute or executive order prior to its being adjudged void is an operative fact to which legal consequences are attached, citing De Agbayani v. PNB,[4 thus: x x x. It does not admit of doubt that prior to the declaration of nullity such challenged legislative or executive act must have been in force and had to be complied with. This is so as until after the judiciary, in an appropriate case, declares its invalidity, it is entitled to obedience and respect. Parties may have acted under it and may have changed their positions. What could be more fitting than that in a subsequent litigation regard be had to what has been done while such legislative or executive act was in operation and presumed to be valid in all respects. It is now accepted as a doctrine that prior to its being nullified, its existence as a fact must be reckoned with. This is merely to reflect awareness that precisely because the judiciary is the governmental organ which has the final say on whether or not a legislative or executive measure is valid, a period of time may have elapsed before it can exercise the power of judicial review that may lead to a declaration of nullity. It would be to deprive the law of its quality of fairness and justice then, if there be no recognition of what had transpired prior to such adjudication. In the language of an American Supreme Court decision: "The actual existence of a statute, prior to such a determination [of unconstitutionality], is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects, - with respect to particular relations, individual and corporate, and particular conduct, private and official." This language has been quoted with approval in a resolution in Araneta v. Hill and the decision in Manila Motor Co., Inc. v. Flores. x x x. xxx

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x x x That before the decision they were not constitutionally infirm was admitted expressly. There is all the more reason then to yield assent to the now prevailing principle that the existence of a statute or executive order prior to its being adjudged void is an operative fact to which legal consequences are attached. Amari now claims that assuming arguendo that Presidential Decree Nos. 1084 and 1085, and Executive Order Nos. 525 and 654 are inconsistent with the 1987 Constitution, the limitation imposed by the Decision on these decrees and executive orders should only be applied prospectively from the finality of the Decision. Amari likewise asserts that a new doctrine of the Court cannot operate retroactively if it impairs vested rights. Amari maintains that the new doctrine embodied in the Decision cannot apply retroactively on those who relied on the old doctrine in good faith, citing Spouses Benzonan v. Court of Appeals,[5 thus: At that time, the prevailing jurisprudence interpreting section 119 of R.A. 141 as amended was that enunciated in Monge and Tupas cited above. The petitioners Benzonan and respondent Pe and the DBP are bound by these decisions for pursuant to Article 8 of the Civil Code "judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system of the Philippines." But while our decisions form part of the law of the land, they are also subject to Article 4 of the Civil Code which provides that "laws shall have no retroactive effect unless the contrary is provided." This is expressed in the familiar legal maxim lex prospicit, non respicit, the law looks forward not backward. The rationale against retroactivity is easy to perceive. The retroactive application of a law usually divests rights that have already become vested or impairs the obligations of contract and hence, is unconstitutional (Francisco v. Certeza, 3 SCRA 565 [1961]). The same consideration underlies our rulings giving only prospective effect to decisions enunciating new doctrines. Thus, we emphasized in People v. Jabinal, 55 SCRA 607 [1974] "x x x when a doctrine of this Court is overruled and a different view is adopted, the new doctrine should be applied prospectively and should not apply to parties who had relied on the old doctrine and acted on the faith thereof. There may be special cases where weighty considerations of equity and social justice will warrant a retroactive application of doctrine to temper the harshness of statutory law as it applies to poor farmers or their widows and orphans. In the present petitions, however, we find no such equitable considerations. Not only did the private respondent apply for free agricultural land when he did not need it and he had no intentions of applying it to the noble purposes behind the law, he would now repurchase for only P327,995.00, the property purchased by the petitioners in good faith for P1,650,000.00 in 1979 and which, because of improvements and the appreciating value of land must be worth more than that amount now. The buyers in good faith from DBP had a right to rely on our rulings in Monge and Tupas when they purchased the property from DBP in 1979 or thirteen (13) years ago. Under the rulings in these two cases, the period to repurchase the disputed lot given to respondent Pe expired on June 18, 1982. He failed to exercise his right. His lost right cannot be revived by relying on the 1988 case of Belisario. The right of petitioners over the subject lot had already become vested as of that time and cannot be impaired by the retroactive application of theBelisario ruling. Amaris reliance on De Agbayani and Spouses Benzonan is misplaced. These cases would apply if the prevailing law or doctrine at the time of the signing of the Amended JVA was that a private corporation could acquire alienable lands of the public domain, and the Decision annulled the law or reversed this doctrine. Obviously, this is not the case here. Under the 1935 Constitution, private corporations were allowed to acquire alienable lands of the public domain. But since the effectivity of the 1973 Constitution, private corporations were banned from holding, except by lease, alienable lands of the public domain. The 1987 Constitution continued this constitutional prohibition. The prevailing law before, during and after the signing of the Amended JVA is that private corporations cannot hold, except by lease, alienable lands of the public domain. The Decision has not annulled or in any way changed the law on this matter. The Decision, whether made retroactive or not, does not change the law since the Decision merely reiterates the law that prevailed since the effectivity of the 1973 Constitution. Thus, De Agbayani, which refers to a law that is invalidated by a decision of the Court, has no application to the instant case. Likewise, Spouses Benzonan is inapplicable because it refers to a doctrine of the Court that is overruled by a subsequent decision which adopts a new doctrine. In the instant case, there is no previous doctrine that is overruled by the Decision. Since the case of Manila Electric Company v. Judge Castro-Bartolome,[6 decided on June 29, 1982, the Court has applied consistently the constitutional provision that private corporations cannot hold, except by lease, alienable lands of the public domain. The Court reiterated this in numerous cases, and the only dispute in the application of this constitutional provision is whether the land in question had already become private property before the effectivity of the 1973 Constitution.[7 If the land was already private land before the 1973 Constitution because the corporation had possessed it openly, continuously, exclusively and adversely for at least thirty years since June 12, 1945 or earlier, then the corporation could apply for judicial confirmation of its imperfect title. But if the land remained public land upon the effectivity of the 1973 Constitution, then the corporation could never hold, except by lease, such public land. Indisputably, the Decision does not overrule any previous doctrine of the Court.

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The prevailing doctrine before, during and after the signing of the Amended JVA is that private corporations cannot hold, except by lease, alienable lands of the public domain. This is one of the two main reasons why the Decision annulled the Amended JVA. The other main reason is that submerged areas of Manila Bay, being part of the sea, are inalienable and beyond the commerce of man, a doctrine that has remained immutable since the Spanish Law on Waters of 1886. Clearly, the Decision merely reiterates, and does not overrule, any existing judicial doctrine. Even on the characterization of foreshore lands reclaimed by the government, the Decision does not overrule existing law or doctrine. Since the adoption of the Regalian doctrine in this jurisdiction, the sea and its foreshore areas have always been part of the public domain. And since the enactment of Act No. 1654 on May 18, 1907 until the effectivity of the 1973 Constitution, statutory law never allowed foreshore lands reclaimed by the government to be sold to private corporations. The 1973 and 1987 Constitution enshrined and expanded the ban to include any alienable land of the public domain. There are, of course, decisions of the Court which, while recognizing a violation of the law or Constitution, hold that the sale or transfer of the land may no longer be invalidated because of weighty considerations of equity and social justice.[8 The invalidation of the sale or transfer may also be superfluous if the purpose of the statutory or constitutional ban has been achieved. But none of these cases apply to Amari. Thus, the Court has ruled consistently that where a Filipino citizen sells land to an alien who later sells the land to a Filipino, the invalidity of the first transfer is corrected by the subsequent sale to a citizen.[9 Similarly, where the alien who buys the land subsequently acquires Philippine citizenship, the sale is validated since the purpose of the constitutional ban to limit land ownership to Filipinos has been achieved.[10 In short, the law disregards the constitutional disqualification of the buyer to hold land if the land is subsequently transferred to a qualified party, or the buyer himself becomes a qualified party. In the instant case, however, Amari has not transferred the Freedom Islands, or any portion of it, to any qualified party. In fact, Amari admits that title to the Freedom Islands still remains with PEA.[11 The Court has also ruled consistently that a sale or transfer of the land may no longer be questioned under the principle of res judicata,provided the requisites for res judicata are present.[12 Under this principle, the courts and the parties are bound by a prior final decision, otherwise there will be no end to litigation. As the Court declared in Toledo-Banaga v. Court of Appeals,[13] once a judgement has become final and executory, it can no longer be disturbed no matter how erroneous it may be. In the instant case, there is no prior final decision adjudicating the Freedom Islands to Amari. There are, moreover, special circumstances that disqualify Amari from invoking equity principles. Amari cannot claim good faith because even before Amari signed the Amended JVA on March 30, 1999, petitioner had already filed the instant case on April 27, 1998 questioning precisely the qualification of Amari to acquire the Freedom Islands. Even before the filing of this petition, two Senate Committees[14 had already approved on September 16, 1997 Senate Committee Report No. 560. This Report concluded, after a wellpublicized investigation into PEAs sale of the Freedom Islands to Amari, that the Freedom Islands are inalienable lands of the public domain. Thus, Amari signed the Amended JVA knowing and assuming all the attendant risks, including the annulment of the Amended JVA. Amari has also not paid to PEA the full reimbursement cost incurred by PEA in reclaiming the Freedom Islands. Amari states that it has paid PEA only P300,000,000.00[15 out of the P1,894,129,200.00 total reimbursement cost agreed upon in the Amended JVA. Moreover, Amari does not claim to have even initiated the reclamation of the 592.15 hectares of submerged areas covered in the Amended JVA, or to have started to construct any permanent infrastructure on the Freedom Islands. In short, Amari does not claim to have introduced any physical improvement or development on the reclamation project that is the subject of the Amended JVA. And yet Amari claims that it had already spent a whopping P9,876,108,638.00 as its total development cost as of June 30, 2002.[16 Amari does not explain how it spent the rest of the P9,876,108,638.00 total project cost after paying PEA P300,000,000.00. Certainly, Amari cannot claim to be an innocent purchaser in good faith and for value. In its Supplement to Motion for Reconsideration, PEA claims that it is similarly situated as the Bases Conversion Development Authority (BCDA) which under R.A. No. 7227 is tasked to sell portions of the Metro Manila military camps and other military reservations. PEAs comparison is incorrect. The Decision states as follows: As the central implementing agency tasked to undertake reclamation projects nationwide, with authority to sell reclaimed lands, PEA took the place of DENR as the government agency charged with leasing or selling reclaimed lands of the public domain. The reclaimed lands being leased or sold by PEA are not private lands, in the same manner that DENR, when it disposes of other alienable lands, does not dispose of private lands but alienable lands of the public domain. Only when qualified private parties acquire these lands will the lands become private lands. In the hands of the government agency tasked and authorized to dispose of alienable or disposable lands of the public domain, these lands are still public, not private lands. PEA is the central implementing agency tasked to undertake reclamation projects nationwide. PEA took the place of Department of Environment and Natural Resources (DENR for brevity) as the government agency charged with leasing or selling all reclaimed lands of the public domain. In the hands of PEA, which took over the leasing and selling functions of DENR, reclaimed foreshore

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lands are public lands in the same manner that these same lands would have been public lands in the hands of DENR. BCDA is an entirely different government entity. BCDA is authorized by law to sell specific government lands that have long been declared by presidential proclamations as military reservations for use by the different services of the armed forces under the Department of National Defense. BCDAs mandate is specific and limited in area, while PEAs mandate is general and national. BCDA holds government lands that have been granted to end-user government entities the military services of the armed forces. In contrast, under Executive Order No. 525, PEA holds the reclaimed public lands, not as an end-user entity, but as the government agency primarily responsible for integrating, directing, and coordinating all reclamation projects for and on behalf of the National Government. In Laurel v. Garcia,[17] cited in the Decision, the Court ruled that land devoted to public use by the Department of Foreign Affairs, when no longer needed for public use, may be declared patrimonial property for sale to private parties provided there is a law authorizing such act. Well-settled is the doctrine that public land granted to an end-user government agency for a specific public use may subsequently be withdrawn by Congress from public use and declared patrimonial property to be sold to private parties. R.A. No. 7227 creating the BCDA is a law that declares specific military reservations no longer needed for defense or military purposes and reclassifies such lands as patrimonial property for sale to private parties. Government owned lands, as long they are patrimonial property, can be sold to private parties, whether Filipino citizens or qualified private corporations. Thus, the so-called Friar Lands acquired by the government under Act No. 1120 are patrimonial property[18 which even private corporations can acquire by purchase. Likewise, reclaimed alienable lands of the public domain if sold or transferred to a public or municipal corporation for a monetary consideration become patrimonial property in the hands of the public or municipal corporation. Once converted to patrimonial property, the land may be sold by the public or municipal corporation to private parties, whether Filipino citizens or qualified private corporations. We reiterate what we stated in the Decision is the rationale for treating PEA in the same manner as DENR with respect to reclaimed foreshore lands, thus: To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will sanction a gross violation of the constitutional ban on private corporations from acquiring any kind of alienable land of the public domain. PEA will simply turn around, as PEA has now done under the Amended JVA, and transfer several hundreds of hectares of these reclaimed and still to be reclaimed lands to a single private corporation in only one transaction. This scheme will effectively nullify the constitutional ban in Section 3, Article XII of the 1987 Constitution which was intended to diffuse equitably the ownership of alienable lands of the public domain among Filipinos, now numbering over 80 million strong. This scheme, if allowed, can even be applied to alienable agricultural lands of the public domain since PEA can acquire x x x any and all kinds of lands. This will open the floodgates to corporations and even individuals acquiring hundreds, if not thousands, of hectares of alienable lands of the public domain under the guise that in the hands of PEA these lands are private lands. This will result in corporations amassing huge landholdings never before seen in this country - creating the very evil that the constitutional ban was designed to prevent. This will completely reverse the clear direction of constitutional development in this country. The 1935 Constitution allowed private corporations to acquire not more than 1,024 hectares of public lands. The 1973 Constitution prohibited private corporations from acquiring any kind of public land, and the 1987 Constitution has unequivocally reiterated this prohibition. Finally, the Office of the Solicitor General and PEA argue that the cost of reclaiming deeply submerged areas is enormous and it would be difficult for PEA to accomplish such project without the participation of private corporations.[19 The Decision does not bar private corporations from participating in reclamation projects and being paid for their services in reclaiming lands. What the Decision prohibits, following the explicit constitutional mandate, is for private corporations to acquire reclaimed lands of the public domain. There is no prohibition on the directors, officers and stockholders of private corporations, if they are Filipino citizens, from acquiring at public auction reclaimed alienable lands of the public domain. They can acquire not more than 12 hectares per individual, and the land thus acquired becomes private land. Despite the nullity of the Amended JVA, Amari is not precluded from recovering from PEA in the proper proceedings, on a quantum meruit basis, whatever Amari may have incurred in implementing the Amended JVA prior to its declaration of nullity. WHEREFORE, finding the Motions for Reconsideration to be without merit, the same are hereby DENIED with FINALITY. The Motion to Inhibit and for Re-Deliberation and the Motion to Set Case for Hearing on Oral Argument are likewise DENIED. SO ORDERED. G.R. No. 92013 July 25, 1990 SALVADOR H. LAUREL, Petitioner, vs. RAMON GARCIA, as head of the Asset Privatization Trust, RAUL MANGLAPUS, as Secretary of Foreign Affairs, and CATALINO MACARAIG, as Executive Secretary, Respondents. G.R. No. 92047 July 25, 1990

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DIONISIO S. OJEDA, Petitioner, vs. EXECUTIVE SECRETARY MACARAIG, JR., ASSETS PRIVATIZATION TRUST CHAIRMAN RAMON T. GARCIA, AMBASSADOR RAMON DEL ROSARIO, et al., as members of the PRINCIPAL AND BIDDING COMMITTEES ON THE UTILIZATION/DISPOSITION PETITION OF PHILIPPINE GOVERNMENT PROPERTIES IN JAPAN, Respondents.

GUTIERREZ, JR., J.: These are two petitions for prohibition seeking to enjoin respondents, their representatives and agents from proceeding with the bidding for the sale of the 3,179 square meters of land at 306 Roppongi, 5-Chome Minato-ku Tokyo, Japan scheduled on February 21, 1990. We granted the prayer for a temporary restraining order effective February 20, 1990. One of the petitioners (in G.R. No. 92047) likewise prayes for a writ of mandamus to compel the respondents to fully disclose to the public the basis of their decision to push through with the sale of the Roppongi property inspire of strong public opposition and to explain the proceedings which effectively prevent the participation of Filipino citizens and entities in the bidding process.chanroblesvirtualawlibrary chanrobles virtual law library The oral arguments in G.R. No. 92013, Laurel v. Garcia, et al. were heard by the Court on March 13, 1990. After G.R. No. 92047,Ojeda v. Secretary Macaraig, et al. was filed, the respondents were required to file a comment by the Court's resolution dated February 22, 1990. The two petitions were consolidated on March 27, 1990 when the memoranda of the parties in the Laurel case were deliberated upon.chanroblesvirtualawlibrary chanrobles virtual law library The Court could not act on these cases immediately because the respondents filed a motion for an extension of thirty (30) days to file comment in G.R. No. 92047, followed by a second motion for an extension of another thirty (30) days which we granted on May 8, 1990, a third motion for extension of time granted on May 24, 1990 and a fourth motion for extension of time which we granted on June 5, 1990 but calling the attention of the respondents to the length of time the petitions have been pending. After the comment was filed, the petitioner in G.R. No. 92047 asked for thirty (30) days to file a reply. We noted his motion and resolved to decide the two (2) cases.chanroblesvirtualawlibrary chanrobles virtual law library I chanrobles virtual law library The subject property in this case is one of the four (4) properties in Japan acquired by the Philippine government under the Reparations Agreement entered into with Japan on May 9, 1956, the other lots being: chanrobles virtual law library (1) The Nampeidai Property at 11-24 Nampeidai-machi, Shibuya-ku, Tokyo which has an area of approximately 2,489.96 square meters, and is at present the site of the Philippine Embassy Chancery; chanrobles virtual law library (2) The Kobe Commercial Property at 63 Naniwa-cho, Kobe, with an area of around 764.72 square meters and categorized as a commercial lot now being used as a warehouse and parking lot for the consulate staff; and chanrobles virtual law library (3) The Kobe Residential Property at 1-980-2 Obanoyama-cho, Shinohara, Nada-ku, Kobe, a residential lot which is now vacant.chanroblesvirtualawlibrary chanrobles virtual law library The properties and the capital goods and services procured from the Japanese government for national development projects are part of the indemnification to the Filipino people for their losses in life and property and their suffering during World War II.chanroblesvirtualawlibrary chanrobles virtual law library The Reparations Agreement provides that reparations valued at $550 million would be payable in twenty (20) years in accordance with annual schedules of procurements to be fixed by the Philippine and Japanese governments (Article 2, Reparations Agreement). Rep. Act No. 1789, the Reparations Law, prescribes the national policy on procurement and utilization of reparations and development loans. The procurements are divided into those for use by the government sector and those for private parties in projects as the then National Economic Council shall determine. Those intended for the private sector shall be made available by sale to Filipino citizens or to one hundred (100%) percent Filipino-owned entities in national development projects.chanroblesvirtualawlibrary chanrobles virtual law library The Roppongi property was acquired from the Japanese government under the Second Year Schedule and listed under the heading "Government Sector", through Reparations Contract No. 300 dated June 27, 1958. The Roppongi property consists of the land and building "for the Chancery of the Philippine Embassy" (Annex M-D to Memorandum for Petitioner, p. 503). As intended, it became the site of the Philippine Embassy until the latter was transferred to Nampeidai on July 22, 1976 when the Roppongi building needed major repairs. Due to the failure of our government to provide necessary funds, the Roppongi property has remained undeveloped since that time.chanroblesvirtualawlibrary chanrobles virtual law library

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A proposal was presented to President Corazon C. Aquino by former Philippine Ambassador to Japan, Carlos J. Valdez, to make the property the subject of a lease agreement with a Japanese firm - Kajima Corporation - which shall construct two (2) buildings in Roppongi and one (1) building in Nampeidai and renovate the present Philippine Chancery in Nampeidai. The consideration of the construction would be the lease to the foreign corporation of one (1) of the buildings to be constructed in Roppongi and the two (2) buildings in Nampeidai. The other building in Roppongi shall then be used as the Philippine Embassy Chancery. At the end of the lease period, all the three leased buildings shall be occupied and used by the Philippine government. No change of ownership or title shall occur. (See Annex "B" to Reply to Comment) The Philippine government retains the title all throughout the lease period and thereafter. However, the government has not acted favorably on this proposal which is pending approval and ratification between the parties. Instead, on August 11, 1986, President Aquino created a committee to study the disposition/utilization of Philippine government properties in Tokyo and Kobe, Japan through Administrative Order No. 3, followed by Administrative Orders Numbered 3-A, B, C and D.chanroblesvirtualawlibrary chanrobles virtual law library On July 25, 1987, the President issued Executive Order No. 296 entitling non-Filipino citizens or entities to avail of separations' capital goods and services in the event of sale, lease or disposition. The four properties in Japan including the Roppongi were specifically mentioned in the first "Whereas" clause.chanroblesvirtualawlibrary chanrobles virtual law library Amidst opposition by various sectors, the Executive branch of the government has been pushing, with great vigor, its decision to sell the reparations properties starting with the Roppongi lot. The property has twice been set for bidding at a minimum floor price of $225 million. The first bidding was a failure since only one bidder qualified. The second one, after postponements, has not yet materialized. The last scheduled bidding on February 21, 1990 was restrained by his Court. Later, the rules on bidding were changed such that the $225 million floor price became merely a suggested floor price.chanroblesvirtualawlibrary chanrobles virtual law library The Court finds that each of the herein petitions raises distinct issues. The petitioner in G.R. No. 92013 objects to the alienation of the Roppongi property to anyone while the petitioner in G.R. No. 92047 adds as a principal objection the alleged unjustified bias of the Philippine government in favor of selling the property to non-Filipino citizens and entities. These petitions have been consolidated and are resolved at the same time for the objective is the same - to stop the sale of the Roppongi property.chanroblesvirtualawlibrary chanrobles virtual law library The petitioner in G.R. No. 92013 raises the following issues: chanrobles virtual law library (1) Can the Roppongi property and others of its kind be alienated by the Philippine Government?; and chanrobles virtual law library (2) Does the Chief Executive, her officers and agents, have the authority and jurisdiction, to sell the Roppongi property? chanrobles virtual law library Petitioner Dionisio Ojeda in G.R. No. 92047, apart from questioning the authority of the government to alienate the Roppongi property assails the constitutionality of Executive Order No. 296 in making the property available for sale to non-Filipino citizens and entities. He also questions the bidding procedures of the Committee on the Utilization or Disposition of Philippine Government Properties in Japan for being discriminatory against Filipino citizens and Filipino-owned entities by denying them the right to be informed about the bidding requirements.chanroblesvirtualawlibrary chanrobles virtual law library II chanrobles virtual law library In G.R. No. 92013, petitioner Laurel asserts that the Roppongi property and the related lots were acquired as part of the reparations from the Japanese government for diplomatic and consular use by the Philippine government. Vice-President Laurel states that the Roppongi property is classified as one of public dominion, and not of private ownership under Article 420 of the Civil Code (See infra).chanroblesvirtualawlibrary chanrobles virtual law library The petitioner submits that the Roppongi property comes under "property intended for public service" in paragraph 2 of the above provision. He states that being one of public dominion, no ownership by any one can attach to it, not even by the State. The Roppongi and related properties were acquired for "sites for chancery, diplomatic, and consular quarters, buildings and other improvements" (Second Year Reparations Schedule). The petitioner states that they continue to be intended for a necessary service. They are held by the State in anticipation of an opportune use. (Citing 3 Manresa 65-66). Hence, it cannot be appropriated, is outside the commerce of man, or to put it in more simple terms, it cannot be alienated nor be the subject matter of contracts (Citing Municipality of Cavite v. Rojas, 30 Phil. 20 [1915]). Noting the non-use of the Roppongi property at the moment, the petitioner avers that the same remains property of public dominion so long as the government has not used it for other purposes nor adopted any measure constituting a removal of its original purpose or use.chanroblesvirtualawlibrary chanrobles virtual law library

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The respondents, for their part, refute the petitioner's contention by saying that the subject property is not governed by our Civil Code but by the laws of Japan where the property is located. They rely upon the rule of lex situs which is used in determining the applicable law regarding the acquisition, transfer and devolution of the title to a property. They also invoke Opinion No. 21, Series of 1988, dated January 27, 1988 of the Secretary of Justice which used the lex situs in explaining the inapplicability of Philippine law regarding a property situated in Japan.chanroblesvirtualawlibrary chanrobles virtual law library The respondents add that even assuming for the sake of argument that the Civil Code is applicable, the Roppongi property has ceased to become property of public dominion. It has become patrimonial property because it has not been used for public service or for diplomatic purposes for over thirteen (13) years now (Citing Article 422, Civil Code) and because the intention by the Executive Department and the Congress to convert it to private use has been manifested by overt acts, such as, among others: (1) the transfer of the Philippine Embassy to Nampeidai (2) the issuance of administrative orders for the possibility of alienating the four government properties in Japan; (3) the issuance of Executive Order No. 296; (4) the enactment by the Congress of Rep. Act No. 6657 [the Comprehensive Agrarian Reform Law] on June 10, 1988 which contains a provision stating that funds may be taken from the sale of Philippine properties in foreign countries; (5) the holding of the public bidding of the Roppongi property but which failed; (6) the deferment by the Senate in Resolution No. 55 of the bidding to a future date; thus an acknowledgment by the Senate of the government's intention to remove the Roppongi property from the public service purpose; and (7) the resolution of this Court dismissing the petition in Ojeda v. Bidding Committee, et al., G.R. No. 87478 which sought to enjoin the second bidding of the Roppongi property scheduled on March 30, 1989.chanroblesvirtualawlibrary chanrobles virtual law library III chanrobles virtual law library In G.R. No. 94047, petitioner Ojeda once more asks this Court to rule on the constitutionality of Executive Order No. 296. He had earlier filed a petition in G.R. No. 87478 which the Court dismissed on August 1, 1989. He now avers that the executive order contravenes the constitutional mandate to conserve and develop the national patrimony stated in the Preamble of the 1987 Constitution. It also allegedly violates: chanrobles virtual law library (1) The reservation of the ownership and acquisition of alienable lands of the public domain to Filipino citizens. (Sections 2 and 3, Article XII, Constitution; Sections 22 and 23 of Commonwealth Act 141).chanroblesvirtualawlibrary chanrobles virtual law library (2) The preference for Filipino citizens in the grant of rights, privileges and concessions covering the national economy and patrimony (Section 10, Article VI, Constitution); chanrobles virtual law library (3) The protection given to Filipino enterprises against unfair competition and trade practices; chanrobles virtual law library (4) The guarantee of the right of the people to information on all matters of public concern (Section 7, Article III, Constitution); chanrobles virtual law library (5) The prohibition against the sale to non-Filipino citizens or entities not wholly owned by Filipino citizens of capital goods received by the Philippines under the Reparations Act (Sections 2 and 12 of Rep. Act No. 1789); and chanrobles virtual law library (6) The declaration of the state policy of full public disclosure of all transactions involving public interest (Section 28, Article III, Constitution).chanroblesvirtualawlibrary chanrobles virtual law library Petitioner Ojeda warns that the use of public funds in the execution of an unconstitutional executive order is a misapplication of public funds He states that since the details of the bidding for the Roppongi property were never publicly disclosed until February 15, 1990 (or a few days before the scheduled bidding), the bidding guidelines are available only in Tokyo, and the accomplishment of requirements and the selection of qualified bidders should be done in Tokyo, interested Filipino citizens or entities owned by them did not have the chance to comply with Purchase Offer Requirements on the Roppongi. Worse, the Roppongi shall be sold for a minimum price of $225 million from which price capital gains tax under Japanese law of about 50 to 70% of the floor price would still be deducted.chanroblesvirtualawlibrary chanrobles virtual law library IV chanrobles virtual law library The petitioners and respondents in both cases do not dispute the fact that the Roppongi site and the three related properties were through reparations agreements, that these were assigned to the government sector and that the Roppongi property itself was specifically designated under the Reparations Agreement to house the Philippine Embassy.chanroblesvirtualawlibrary chanrobles virtual law library

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The nature of the Roppongi lot as property for public service is expressly spelled out. It is dictated by the terms of the Reparations Agreement and the corresponding contract of procurement which bind both the Philippine government and the Japanese government.chanroblesvirtualawlibrary chanrobles virtual law library There can be no doubt that it is of public dominion unless it is convincingly shown that the property has become patrimonial. This, the respondents have failed to do.chanroblesvirtualawlibrary chanrobles virtual law library As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot be alienated. Its ownership is a special collective ownership for general use and enjoyment, an application to the satisfaction of collective needs, and resides in the social group. The purpose is not to serve the State as a juridical person, but the citizens; it is intended for the common and public welfare and cannot be the object of appropration. (Taken from 3 Manresa, 66-69; cited in Tolentino, Commentaries on the Civil Code of the Philippines, 1963 Edition, Vol. II, p. 26).chanroblesvirtualawlibrary chanrobles virtual law library The applicable provisions of the Civil Code are: ART. 419. Property is either of public dominion or of private ownership.chanroblesvirtualawlibrary chanrobles virtual law library ART. 420. The following things are property of public dominion chanrobles virtual law library (1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks shores roadsteads, and others of similar character; chanrobles virtual law library (2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth.chanroblesvirtualawlibrary chanrobles virtual law library ART. 421. All other property of the State, which is not of the character stated in the preceding article, is patrimonial property. The Roppongi property is correctly classified under paragraph 2 of Article 420 of the Civil Code as property belonging to the State and intended for some public service.chanroblesvirtualawlibrary chanrobles virtual law library Has the intention of the government regarding the use of the property been changed because the lot has been Idle for some years? Has it become patrimonial? chanrobles virtual law library The fact that the Roppongi site has not been used for a long time for actual Embassy service does not automatically convert it to patrimonial property. Any such conversion happens only if the property is withdrawn from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]). A property continues to be part of the public domain, not available for private appropriation or ownership until there is a formal declaration on the part of the government to withdraw it from being such (Ignacio v. Director of Lands, 108 Phil. 335 [1960]).chanroblesvirtualawlibrary chanrobles virtual law library The respondents enumerate various pronouncements by concerned public officials insinuating a change of intention. We emphasize, however, that an abandonment of the intention to use the Roppongi property for public service and to make it patrimonial property under Article 422 of the Civil Code must be definite Abandonment cannot be inferred from the non-use alone specially if the non-use was attributable not to the government's own deliberate and indubitable will but to a lack of financial support to repair and improve the property (See Heirs of Felino Santiago v. Lazaro, 166 SCRA 368 [1988]). Abandonment must be a certain and positive act based on correct legal premises.chanroblesvirtualawlibrary chanrobles virtual law library A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not relinquishment of the Roppongi property's original purpose. Even the failure by the government to repair the building in Roppongi is not abandonment since as earlier stated, there simply was a shortage of government funds. The recent Administrative Orders authorizing a study of the status and conditions of government properties in Japan were merely directives for investigation but did not in any way signify a clear intention to dispose of the properties.chanroblesvirtualawlibrary chanrobles virtual law library Executive Order No. 296, though its title declares an "authority to sell", does not have a provision in its text expressly authorizing the sale of the four properties procured from Japan for the government sector. The executive order does not declare that the properties lost their public character. It merely intends to make the properties available to foreigners and not to Filipinos alone in case of a sale, lease or other disposition. It merely eliminates the restriction under Rep. Act No. 1789 that reparations goods may be sold only to Filipino citizens and one hundred (100%) percent Filipino-owned entities. The text of Executive Order No. 296 provides:

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Section 1. The provisions of Republic Act No. 1789, as amended, and of other laws to the contrary notwithstanding, the above-mentioned properties can be made available for sale, lease or any other manner of disposition to non-Filipino citizens or to entities owned by non-Filipino citizens. Executive Order No. 296 is based on the wrong premise or assumption that the Roppongi and the three other properties were earlier converted into alienable real properties. As earlier stated, Rep. Act No. 1789 differentiates the procurements for the government sector and the private sector (Sections 2 and 12, Rep. Act No. 1789). Only the private sector properties can be sold to end-users who must be Filipinos or entities owned by Filipinos. It is this nationality provision which was amended by Executive Order No. 296.chanroblesvirtualawlibrary chanrobles virtual law library Section 63 (c) of Rep. Act No. 6657 (the CARP Law) which provides as one of the sources of funds for its implementation, the proceeds of the disposition of the properties of the Government in foreign countries, did not withdraw the Roppongi property from being classified as one of public dominion when it mentions Philippine properties abroad. Section 63 (c) refers to properties which are alienable and not to those reserved for public use or service. Rep Act No. 6657, therefore, does not authorize the Executive Department to sell the Roppongi property. It merely enumerates possible sources of future funding to augment (as and when needed) the Agrarian Reform Fund created under Executive Order No. 299. Obviously any property outside of the commerce of man cannot be tapped as a source of funds.chanroblesvirtualawlibrary chanrobles virtual law library The respondents try to get around the public dominion character of the Roppongi property by insisting that Japanese law and not our Civil Code should apply.chanroblesvirtualawlibrary chanrobles virtual law library It is exceedingly strange why our top government officials, of all people, should be the ones to insist that in the sale of extremely valuable government property, Japanese law and not Philippine law should prevail. The Japanese law - its coverage and effects, when enacted, and exceptions to its provision - is not presented to the Court It is simply asserted that the lex loci rei sitae or Japanese law should apply without stating what that law provides. It is a ed on faith that Japanese law would allow the sale.chanroblesvirtualawlibrary chanrobles virtual law library We see no reason why a conflict of law rule should apply when no conflict of law situation exists. A conflict of law situation arises only when: (1) There is a dispute over the title or ownership of an immovable, such that the capacity to take and transfer immovables, the formalities of conveyance, the essential validity and effect of the transfer, or the interpretation and effect of a conveyance, are to be determined (See Salonga, Private International Law, 1981 ed., pp. 377-383); and (2) A foreign law on land ownership and its conveyance is asserted to conflict with a domestic law on the same matters. Hence, the need to determine which law should apply.chanroblesvirtualawlibrary chanrobles virtual law library In the instant case, none of the above elements exists.chanroblesvirtualawlibrary chanrobles virtual law library The issues are not concerned with validity of ownership or title. There is no question that the property belongs to the Philippines. The issue is the authority of the respondent officials to validly dispose of property belonging to the State. And the validity of the procedures adopted to effect its sale. This is governed by Philippine Law. The rule of lex situs does not apply.chanroblesvirtualawlibrary chanrobles virtual law library The assertion that the opinion of the Secretary of Justice sheds light on the relevance of the lex situs rule is misplaced. The opinion does not tackle the alienability of the real properties procured through reparations nor the existence in what body of the authority to sell them. In discussing who are capable of acquiring the lots, the Secretary merely explains that it is the foreign law which should determine who can acquire the properties so that the constitutional limitation on acquisition of lands of the public domain to Filipino citizens and entities wholly owned by Filipinos is inapplicable. We see no point in belaboring whether or not this opinion is correct. Why should we discuss who can acquire the Roppongi lot when there is no showing that it can be sold? chanrobles virtual law library The subsequent approval on October 4, 1988 by President Aquino of the recommendation by the investigating committee to sell the Roppongi property was premature or, at the very least, conditioned on a valid change in the public character of the Roppongi property. Moreover, the approval does not have the force and effect of law since the President already lost her legislative powers. The Congress had already convened for more than a year.chanroblesvirtualawlibrary chanrobles virtual law library Assuming for the sake of argument, however, that the Roppongi property is no longer of public dominion, there is another obstacle to its sale by the respondents. There is no law authorizing its conveyance. Section 79 (f) of the Revised Administrative Code of 1917 provides

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Section 79 (f ) Conveyances and contracts to which the Government is a party. - In cases in which the Government of the Republic of the Philippines is a party to any deed or other instrument conveying the title to real estate or to any other property the value of which is in excess of one hundred thousand pesos, the respective Department Secretary shall prepare the necessary papers which, together with the proper recommendations, shall be submitted to the Congress of the Philippines for approval by the same. Such deed, instrument, or contract shall be executed and signed by the President of the Philippines on behalf of the Government of the Philippines unless the Government of the Philippines unless the authority therefor be expressly vested by law in another officer. (Emphasis supplied) The requirement has been retained in Section 48, Book I of the Administrative Code of 1987 (Executive Order No. 292). SEC. 48. Official Authorized to Convey Real Property. - Whenever real property of the Government isauthorized by law to be conveyed, the deed of conveyance shall be executed in behalf of the government by the following: chanrobles virtual law library (1) For property belonging to and titled in the name of the Republic of the Philippines, by the President, unless the authority therefor is expressly vested by law in another officer.chanroblesvirtualawlibrary chanrobles virtual law library (2) For property belonging to the Republic of the Philippines but titled in the name of any political subdivision or of any corporate agency or instrumentality, by the executive head of the agency or instrumentality. (Emphasis supplied) It is not for the President to convey valuable real property of the government on his or her own sole will. Any such conveyance must be authorized and approved by a law enacted by the Congress. It requires executive and legislative concurrence.chanroblesvirtualawlibrary chanrobles virtual law library Resolution No. 55 of the Senate dated June 8, 1989, asking for the deferment of the sale of the Roppongi property does not withdraw the property from public domain much less authorize its sale. It is a mere resolution; it is not a formal declaration abandoning the public character of the Roppongi property. In fact, the Senate Committee on Foreign Relations is conducting hearings on Senate Resolution No. 734 which raises serious policy considerations and calls for a fact-finding investigation of the circumstances behind the decision to sell the Philippine government properties in Japan.chanroblesvirtualawlibrary chanrobles virtual law library The resolution of this Court in Ojeda v. Bidding Committee, et al., supra, did not pass upon the constitutionality of Executive Order No. 296. Contrary to respondents' assertion, we did not uphold the authority of the President to sell the Roppongi property. The Court stated that the constitutionality of the executive order was not the real issue and that resolving the constitutional question was "neither necessary nor finally determinative of the case." The Court noted that "[W]hat petitioner ultimately questions is the use of the proceeds of the disposition of the Roppongi property." In emphasizing that "the decision of the Executive to dispose of the Roppongi property to finance the CARP ... cannot be questioned" in view of Section 63 (c) of Rep. Act No. 6657, the Court did not acknowledge the fact that the property became alienable nor did it indicate that the President was authorized to dispose of the Roppongi property. The resolution should be read to mean that in case the Roppongi property is re-classified to be patrimonial and alienable by authority of law, the proceeds of a sale may be used for national economic development projects including the CARP.chanroblesvirtualawlibrary chanrobles virtual law library Moreover, the sale in 1989 did not materialize. The petitions before us question the proposed 1990 sale of the Roppongi property. We are resolving the issues raised in these petitions, not the issues raised in 1989.chanroblesvirtualawlibrary chanrobles virtual law library Having declared a need for a law or formal declaration to withdraw the Roppongi property from public domain to make it alienable and a need for legislative authority to allow the sale of the property, we see no compelling reason to tackle the constitutional issues raised by petitioner Ojeda.chanroblesvirtualawlibrary chanrobles virtual law library The Court does not ordinarily pass upon constitutional questions unless these questions are properly raised in appropriate cases and their resolution is necessary for the determination of the case (People v. Vera, 65 Phil. 56 [1937]). The Court will not pass upon a constitutional question although properly presented by the record if the case can be disposed of on some other ground such as the application of a statute or general law (Siler v. Louisville and Nashville R. Co., 213 U.S. 175, [1909], Railroad Commission v. Pullman Co., 312 U.S. 496 [1941]).chanroblesvirtualawlibrary chanrobles virtual law library The petitioner in G.R. No. 92013 states why the Roppongi property should not be sold: The Roppongi property is not just like any piece of property. It was given to the Filipino people in reparation for the lives and blood of Filipinos who died and suffered during the Japanese military occupation, for the suffering of widows and orphans who lost their loved ones and kindred, for the homes and other properties lost by countless Filipinos during the war. The

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Tokyo properties are a monument to the bravery and sacrifice of the Filipino people in the face of an invader; like the monuments of Rizal, Quezon, and other Filipino heroes, we do not expect economic or financial benefits from them. But who would think of selling these monuments? Filipino honor and national dignity dictate that we keep our properties in Japan as memorials to the countless Filipinos who died and suffered. Even if we should become paupers we should not think of selling them. For it would be as if we sold the lives and blood and tears of our countrymen. (Rollo- G.R. No. 92013, p.147) The petitioner in G.R. No. 92047 also states: Roppongi is no ordinary property. It is one ceded by the Japanese government in atonement for its past belligerence for the valiant sacrifice of life and limb and for deaths, physical dislocation and economic devastation the whole Filipino people endured in World War II.chanroblesvirtualawlibrary chanrobles virtual law library It is for what it stands for, and for what it could never bring back to life, that its significance today remains undimmed, inspire of the lapse of 45 years since the war ended, inspire of the passage of 32 years since the property passed on to the Philippine government.chanroblesvirtualawlibrary chanrobles virtual law library Roppongi is a reminder that cannot - should not - be dissipated ... (Rollo-92047, p. 9) It is indeed true that the Roppongi property is valuable not so much because of the inflated prices fetched by real property in Tokyo but more so because of its symbolic value to all Filipinos - veterans and civilians alike. Whether or not the Roppongi and related properties will eventually be sold is a policy determination where both the President and Congress must concur. Considering the properties' importance and value, the laws on conversion and disposition of property of public dominion must be faithfully followed.chanroblesvirtualawlibrary chanrobles virtual law library WHEREFORE, IN VIEW OF THE FOREGOING, the petitions are GRANTED. A writ of prohibition is issued enjoining the respondents from proceeding with the sale of the Roppongi property in Tokyo, Japan. The February 20, 1990 Temporary Restraining Order is made PERMANENT.chanroblesvirtualawlibrary chanrobles virtual law library SO ORDERED. G.R. No. 179987 : April 29, 2009 HEIRS OF MARIO MALABANAN, Petitioner, v. REPUBLIC OF THE PHILIPPINES, Respondent. DECISION TINGA, J.: One main reason why the informal sector has not become formal is that from Indonesia to Brazil, 90 percent of the informal lands are not titled and registered. This is a generalized phenomenon in the so-called Third World. And it has many consequences. xxx The question is: How is it that so many governments, from Suharto's in Indonesia to Fujimori's in Peru, have wanted to title these people and have not been able to do so effectively? One reason is that none of the state systems in Asia or Latin America can gather proof of informal titles. In Peru, the informals have means of proving property ownership to each other which are not the same means developed by the Spanish legal system. The informals have their own papers, their own forms of agreements, and their own systems of registration, all of which are very clearly stated in the maps which they use for their own informal business transactions. If you take a walk through the countryside, from Indonesia to Peru, and you walk by field after field--in each field a different dog is going to bark at you. Even dogs know what private property is all about. The only one who does not know it is the government. The issue is that there exists a "common law" and an "informal law" which the Latin American formal legal system does not know how to recognize. - Hernando De Soto1 cra This decision inevitably affects all untitled lands currently in possession of persons and entities other than the Philippine government. The petition, while unremarkable as to the facts, was accepted by the Court en banc in order to provide definitive clarity to the applicability and scope of original registration proceedings under Sections 14(1) and 14(2) of the Property Registration Decree. In doing so, the Court confronts not only the relevant provisions of the Public Land Act and the Civil Code, but also the reality on the

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ground. The countrywide phenomenon of untitled lands, as well as the problem of informal settlement it has spawned, has unfortunately been treated with benign neglect. Yet our current laws are hemmed in by their own circumscriptions in addressing the phenomenon. Still, the duty on our part is primarily to decide cases before us in accord with the Constitution and the legal principles that have developed our public land law, though our social obligations dissuade us from casting a blind eye on the endemic problems. I. On 20 February 1998, Mario Malabanan filed an application for land registration covering a parcel of land identified as Lot 9864-A, Cad-452-D, Silang Cadastre,2 situated in Barangay Tibig, Silang Cavite, and consisting of 71,324 square meters. Malabanan claimed that he had purchased the property from Eduardo Velazco,3 and that he and his predecessors-in-interest had been in open, notorious, and continuous adverse and peaceful possession of the land for more than thirty (30) years. The application was raffled to the Regional Trial Court of (RTC) Cavite-Tagaytay City, Branch 18. The Office of the Solicitor General (OSG) duly designated the Assistant Provincial Prosecutor of Cavite, Jose Velazco, Jr., to appear on behalf of the State. 4 Apart from presenting documentary evidence, Malabanan himself and his witness, Aristedes Velazco, testified at the hearing. Velazco testified that the property was originally belonged to a twenty-two hectare property owned by his great-grandfather, Lino Velazco. Lino had four sons- Benedicto, Gregorio, Eduardo and Esteban-the fourth being Aristedes's grandfather. Upon Lino's death, his four sons inherited the property and divided it among themselves. But by 1966, Esteban's wife, Magdalena, had become the administrator of all the properties inherited by the Velazco sons from their father, Lino. After the death of Esteban and Magdalena, their son Virgilio succeeded them in administering the properties, including Lot 9864-A, which originally belonged to his uncle, Eduardo Velazco. It was this property that was sold by Eduardo Velazco to Malabanan.5cra Assistant Provincial Prosecutor Jose Velazco, Jr. did not cross-examine Aristedes Velazco. He further manifested that he "also [knew] the property and I affirm the truth of the testimony given by Mr. Velazco."6 The Republic of the Philippines likewise did not present any evidence to controvert the application. Among the evidence presented by Malabanan during trial was a Certification dated 11 June 2001, issued by the Community Environment & Natural Resources Office, Department of Environment and Natural Resources (CENRO-DENR), which stated that the subject property was "verified to be within the Alienable or Disposable land per Land Classification Map No. 3013 established under Project No. 20-A and approved as such under FAO 4-1656 on March 15, 1982."7 cra On 3 December 2002, the RTC rendered judgment in favor of Malabanan, the dispositive portion of which reads:cra:nad WHEREFORE, this Court hereby approves this application for registration and thus places under the operation of Act 141, Act 496 and/or P.D. 1529, otherwise known as Property Registration Law, the lands described in Plan Csd-04-0173123-D, Lot 9864-A and containing an area of Seventy One Thousand Three Hundred Twenty Four (71,324) Square Meters, as supported by its technical description now forming part of the record of this case, in addition to other proofs adduced in the name of MARIO MALABANAN, who is of legal age, Filipino, widower, and with residence at Munting Ilog, Silang, Cavite. Once this Decision becomes final and executory, the corresponding decree of registration shall forthwith issue. SO ORDERED. The Republic interposed an appeal to the Court of Appeals, arguing that Malabanan had failed to prove that the property belonged to the alienable and disposable land of the public domain, and that the RTC had erred in finding that he had been in possession of the property in the manner and for the length of time required by law for confirmation of imperfect title. On 23 February 2007, the Court of Appeals rendered a Decision8 reversing the RTC and dismissing the application of Malabanan. The appellate court held that under Section 14(1) of the Property Registration Decree any period of possession prior to the classification of the lots as alienable and disposable was inconsequential and should be excluded from the computation of the period of possession. Thus, the appellate court noted that since the CENRO-DENR certification had verified that the property was declared alienable and disposable only on 15 March 1982, the Velazcos' possession prior to that date could not be factored in the computation of the period of possession. This interpretation of the Court of Appeals of Section 14(1) of the Property Registration Decree was based on the Court's ruling in Republic v. Herbieto.9 cra Malabanan died while the case was pending with the Court of Appeals;10 hence, it was his heirs who appealed the decision of the appellate court. Petitioners, before this Court, rely on our ruling in Republic v. Naguit,11 which was handed down just four months prior to Herbieto. Petitioners suggest that the discussion in Herbieto cited by the Court of Appeals is actually obiter dictum since the Metropolitan Trial Court therein which had directed the registration of the property had no jurisdiction in the first place since the requisite notice of hearing was published only after the hearing had already begun. Naguit, petitioners argue, remains the controlling doctrine, especially when the property in question is agricultural land. Therefore, with respect to agricultural lands, any possession

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prior to the declaration of the alienable property as disposable may be counted in reckoning the period of possession to perfect title under the Public Land Act and the Property Registration Decree. The petition was referred to the Court en banc,12 and on 11 November 2008, the case was heard on oral arguments. The Court formulated the principal issues for the oral arguments, to wit: 1. In order that an alienable and disposable land of the public domain may be registered under Section 14(1) of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, should the land be classified as alienable and disposable as of June 12, 1945 or is it sufficient that such classification occur at any time prior to the filing of the applicant for registration provided that it is established that the applicant has been in open, continuous, exclusive and notorious possession of the land under a bona fide claim of ownership since June 12, 1945 or earlier?cralaw 2. For purposes of Section 14(2) of the Property Registration Decree may a parcel of land classified as alienable and disposable be deemed private land and therefore susceptible to acquisition by prescription in accordance with the Civil Code?cralaw 3. May a parcel of land established as agricultural in character either because of its use or because its slope is below that of forest lands be registrable under Section 14(2) of the Property Registration Decree in relation to the provisions of the Civil Code on acquisitive prescription?cralaw 4. Are petitioners entitled to the registration of the subject land in their names under Section 14(1) or Section 14(2) of the Property Registration Decree or both?13 Based on these issues, the parties formulated their respective positions. With respect to Section 14(1), petitioners reiterate that the analysis of the Court in Naguit is the correct interpretation of the provision. The seemingly contradictory pronouncement in Herbieto, it is submitted, should be considered obiter dictum, since the land registration proceedings therein was void ab initio due to lack of publication of the notice of initial hearing. Petitioners further point out that in Republic v. Bibonia,14 promulgated in June of 2007, the Court applied Naguit and adopted the same observation that the preferred interpretation by the OSG of Section 14(1) was patently absurd. For its part, the OSG remains insistent that for Section 14(1) to apply, the land should have been classified as alienable and disposable as of 12 June 1945. Apart from Herbieto, the OSG also cites the subsequent rulings in Buenaventura v. Republic,15 Fieldman Agricultural Trading v. Republic16 and Republic v. Imperial Credit Corporation,17 as well as the earlier case of Director of Lands v. Court of Appeals.18cra With respect to Section 14(2), petitioners submit that open, continuous, exclusive and notorious possession of an alienable land of the public domain for more than 30 years ipso jure converts the land into private property, thus placing it under the coverage of Section 14(2). According to them, it would not matter whether the land sought to be registered was previously classified as agricultural land of the public domain so long as, at the time of the application, the property had already been "converted" into private property through prescription. To bolster their argument, petitioners cite extensively from our 2008 ruling in Republic v. T.A.N. Properties.19 cra The arguments submitted by the OSG with respect to Section 14(2) are more extensive. The OSG notes that under Article 1113 of the Civil Code, the acquisitive prescription of properties of the State refers to "patrimonial property," while Section 14(2) speaks of "private lands." It observes that the Court has yet to decide a case that presented Section 14(2) as a ground for application for registration, and that the 30-year possession period refers to the period of possession under Section 48(b) of the Public Land Act, and not the concept of prescription under the Civil Code. The OSG further submits that, assuming that the 30-year prescriptive period can run against public lands, said period should be reckoned from the time the public land was declared alienable and disposable. Both sides likewise offer special arguments with respect to the particular factual circumstances surrounding the subject property and the ownership thereof. II. First, we discuss Section 14(1) of the Property Registration Decree. For a full understanding of the provision, reference has to be made to the Public Land Act. A. Commonwealth Act No. 141, also known as the Public Land Act, has, since its enactment, governed the classification and disposition of lands of the public domain. The President is authorized, from time to time, to classify the lands of the public domain into alienable and disposable, timber, or mineral lands.20 Alienable and disposable lands of the public domain are further classified according to their uses into (a) agricultural; (b) residential, commercial, industrial, or for similar productive purposes; (c) educational, charitable, or other similar purposes; or (d) reservations for town sites and for public and quasi-public uses.21 cra

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May a private person validly seek the registration in his/her name of alienable and disposable lands of the public domain? Section 11 of the Public Land Act acknowledges that public lands suitable for agricultural purposes may be disposed of "by confirmation of imperfect or incomplete titles" through "judicial legalization."22 Section 48(b) of the Public Land Act, as amended by P.D. No. 1073, supplies the details and unmistakably grants that right, subject to the requisites stated therein:cra:nad Sec. 48. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such land 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 (b) Those who by themselves or through their predecessors in interest have been in open, continuous, exclusive, and notorious possession and occupation of alienable and disposable lands of the public domain, under a bona fide claim of acquisition of ownership, since June 12, 1945, or earlier, immediately preceding the filing of the 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. Section 48(b) of Com. Act No. 141 received its present wording in 1977 when the law was amended by P.D. No. 1073. Two significant amendments were introduced by P.D. No. 1073. First, the term "agricultural lands" was changed to "alienable and disposable lands of the public domain." The OSG submits that this amendment restricted the scope of the lands that may be registered.23 This is not actually the case. Under Section 9 of the Public Land Act, "agricultural lands" are a mere subset of "lands of the public domain alienable or open to disposition." Evidently, alienable and disposable lands of the public domain are a larger class than only "agricultural lands." Second, the length of the requisite possession was changed from possession for "thirty (30) years immediately preceding the filing of the application" to possession "since June 12, 1945 or earlier." The Court in Naguit explained:cra:nad When the Public Land Act was first promulgated in 1936, the period of possession deemed necessary to vest the right to register their title to agricultural lands of the public domain commenced from July 26, 1894. However, this period was amended by R.A. No. 1942, which provided that the bona fide claim of ownership must have been for at least thirty (30) years. Then in 1977, Section 48(b) of the Public Land Act was again amended, this time by P.D. No. 1073, which pegged the reckoning date at June 12, 1945. xxx It bears further observation that Section 48(b) of Com. Act No, 141 is virtually the same as Section 14(1) of the Property Registration Decree. Said Decree codified the various laws relative to the registration of property, including lands of the public domain. It is Section 14(1) that operationalizes the registration of such lands of the public domain. The provision reads:cra:nad SECTION 14. Who may apply.- The following persons may file in the proper Court of First Instance an application for registration of title to land, whether personally or through their duly authorized representatives:cra:nad (1) those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier. Notwithstanding the passage of the Property Registration Decree and the inclusion of Section 14(1) therein, the Public Land Act has remained in effect. Both laws commonly refer to persons or their predecessors-in-interest who "have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier." That circumstance may have led to the impression that one or the other is a redundancy, or that Section 48(b) of the Public Land Act has somehow been repealed or mooted. That is not the case. The opening clauses of Section 48 of the Public Land Act and Section 14 of the Property Registration Decree warrant comparison:cra:nad Sec. 48 [of the Public Land Act]. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such land 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

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Sec. 14 [of the Property Registration Decree]. Who may apply.- The following persons may file in the proper Court of First Instance an application for registration of title to land, whether personally or through their duly authorized representatives: xxx It is clear that Section 48 of the Public Land Act is more descriptive of the nature of the right enjoyed by the possessor than Section 14 of the Property Registration Decree, which seems to presume the pre-existence of the right, rather than establishing the right itself for the first time. It is proper to assert that it is the Public Land Act, as amended by P.D. No. 1073 effective 25 January 1977, that has primarily established the right of a Filipino citizen who has been "in open, continuous, exclusive, and notorious possession and occupation of alienable and disposable lands of the public domain, under a bona fide claim of acquisition of ownership, since June 12, 1945" to perfect or complete his title by applying with the proper court for the confirmation of his ownership claim and the issuance of the corresponding certificate of title. Section 48 can be viewed in conjunction with the afore-quoted Section 11 of the Public Land Act, which provides that public lands suitable for agricultural purposes may be disposed of by confirmation of imperfect or incomplete titles, and given the notion that both provisions declare that it is indeed the Public Land Act that primarily establishes the substantive ownership of the possessor who has been in possession of the property since 12 June 1945. In turn, Section 14(a) of the Property Registration Decree recognizes the substantive right granted under Section 48(b) of the Public Land Act, as well provides the corresponding original registration procedure for the judicial confirmation of an imperfect or incomplete title. There is another limitation to the right granted under Section 48(b). Section 47 of the Public Land Act limits the period within which one may exercise the right to seek registration under Section 48. The provision has been amended several times, most recently by Rep. Act No. 9176 in 2002. It currently reads thus:cra:nad Section 47. The persons specified in the next following section are hereby granted time, not to extend beyond December 31, 2020 within which to avail of the benefits of this Chapter: Provided, That this period shall apply only where the area applied for does not exceed twelve (12) hectares: Provided, further, That the several periods of time designated by the President in accordance with Section Forty-Five of this Act shall apply also to the lands comprised in the provisions of this Chapter, but this Section shall not be construed as prohibiting any said persons from acting under this Chapter at any time prior to the period fixed by the President.24 cra Accordingly under the current state of the law, the substantive right granted under Section 48(b) may be availed of only until 31 December 2020. B. Despite the clear text of Section 48(b) of the Public Land Act, as amended and Section 14(a) of the Property Registration Decree, the OSG has adopted the position that for one to acquire the right to seek registration of an alienable and disposable land of the public domain, it is not enough that the applicant and his/her predecessors-in-interest be in possession under a bona fide claim of ownership since 12 June 1945; the alienable and disposable character of the property must have been declared also as of 12 June 1945. Following the OSG's approach, all lands certified as alienable and disposable after 12 June 1945 cannot be registered either under Section 14(1) of the Property Registration Decree or Section 48(b) of the Public Land Act as amended. The absurdity of such an implication was discussed in Naguit. Petitioner suggests an interpretation that the alienable and disposable character of the land should have already been established since June 12, 1945 or earlier. This is not borne out by the plain meaning of Section 14(1). "Since June 12, 1945," as used in the provision, qualifies its antecedent phrase "under a bonafide claim of ownership." Generally speaking, qualifying words restrict or modify only the words or phrases to which they are immediately associated, and not those distantly or remotely located. 25 Ad proximum antecedents fiat relation nisi impediatur sentencia. Besides, we are mindful of the absurdity that would result if we adopt petitioner's position. Absent a legislative amendment, the rule would be, adopting the OSG's view, that all lands of the public domain which were not declared alienable or disposable before June 12, 1945 would not be susceptible to original registration, no matter the length of unchallenged possession by the occupant. Such interpretation renders paragraph (1) of Section 14 virtually inoperative and even precludes the government from giving it effect even as it decides to reclassify public agricultural lands as alienable and disposable. The unreasonableness of the situation would even be aggravated considering that before June 12, 1945, the Philippines was not yet even considered an independent state. Accordingly, the Court in Naguit explained:cra:nad [T]he more reasonable interpretation of Section 14(1) is that it merely requires the property sought to be registered as already alienable and disposable at the time the application for registration of title is filed. If the State, at the time the application is made, has not yet deemed it proper to release the property for alienation or disposition, the presumption is that the government is still reserving the right to utilize the property; hence, the need to preserve its ownership in the State irrespective of the length of adverse possession

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even if in good faith. However, if the property has already been classified as alienable and disposable, as it is in this case, then there is already an intention on the part of the State to abdicate its exclusive prerogative over the property. The Court declares that the correct interpretation of Section 14(1) is that which was adopted in Naguit. The contrary pronouncement in Herbieto, as pointed out in Naguit, absurdly limits the application of the provision to the point of virtual inutility since it would only cover lands actually declared alienable and disposable prior to 12 June 1945, even if the current possessor is able to establish open, continuous, exclusive and notorious possession under a bona fide claim of ownership long before that date. Moreover, the Naguit interpretation allows more possessors under a bona fide claim of ownership to avail of judicial confirmation of their imperfect titles than what would be feasible under Herbieto. This balancing fact is significant, especially considering our forthcoming discussion on the scope and reach of Section 14(2) of the Property Registration Decree. Petitioners make the salient observation that the contradictory passages from Herbieto are obiter dicta since the land registration proceedings therein is void ab initio in the first place due to lack of the requisite publication of the notice of initial hearing. There is no need to explicitly overturn Herbieto, as it suffices that the Court's acknowledgment that the particular line of argument used therein concerning Section 14(1) is indeed obiter. It may be noted that in the subsequent case of Buenaventura,26 the Court, citing Herbieto, again stated that "[a]ny period of possession prior to the date when the [s]ubject [property was] classified as alienable and disposable is inconsequential and should be excluded from the computation of the period of possession." That statement, in the context of Section 14(1), is certainly erroneous. Nonetheless, the passage as cited in Buenaventura should again be considered as obiter. The application therein was ultimately granted, citing Section 14(2). The evidence submitted by petitioners therein did not establish any mode of possession on their part prior to 1948, thereby precluding the application of Section 14(1). It is not even apparent from the decision whether petitioners therein had claimed entitlement to original registration following Section 14(1), their position being that they had been in exclusive possession under a bona fide claim of ownership for over fifty (50) years, but not before 12 June 1945. Thus, neither Herbieto nor its principal discipular ruling Buenaventura has any precedental value with respect to Section 14(1). On the other hand, the ratio of Naguit is embedded in Section 14(1), since it precisely involved situation wherein the applicant had been in exclusive possession under a bona fide claim of ownership prior to 12 June 1945. The Court's interpretation of Section 14(1) therein was decisive to the resolution of the case. Any doubt as to which between Naguit or Herbieto provides the final word of the Court on Section 14(1) is now settled in favor of Naguit. We noted in Naguit that it should be distinguished from Bracewell v. Court of Appeals27 since in the latter, the application for registration had been filed before the land was declared alienable or disposable. The dissent though pronounces Bracewell as the better rule between the two. Yet two years after Bracewell, its ponente, the esteemed Justice Consuelo Ynares-Santiago, penned the ruling in Republic v. Ceniza,28 which involved a claim of possession that extended back to 1927 over a public domain land that was declared alienable and disposable only in 1980. Ceniza cited Bracewell, quoted extensively from it, and following the mindset of the dissent, the attempt at registration in Ceniza should have failed. Not so. To prove that the land subject of an application for registration is alienable, an applicant must establish the existence of a positive act of the government such as a presidential proclamation or an executive order; an administrative action; investigation reports of Bureau of Lands investigators; and a legislative act or a statute. In this case, private respondents presented a certification dated November 25, 1994, issued by Eduardo M. Inting, the Community Environment and Natural Resources Officer in the Department of Environment and Natural Resources Office in Cebu City, stating that the lots involved were "found to be within the alienable and disposable (sic) Block-I, Land Classification Project No. 32-A, per map 2962 4-I555 dated December 9, 1980." This is sufficient evidence to show the real character of the land subject of private respondents' application. Further, the certification enjoys a presumption of regularity in the absence of contradictory evidence, which is true in this case. Worth noting also was the observation of the Court of Appeals stating that:cra:nad [n]o opposition was filed by the Bureaus of Lands and Forestry to contest the application of appellees on the ground that the property still forms part of the public domain. Nor is there any showing that the lots in question are forestal land.... Thus, while the Court of Appeals erred in ruling that mere possession of public land for the period required by law would entitle its occupant to a confirmation of imperfect title, it did not err in ruling in favor of private respondents as far as the first requirement in Section 48(b) of the Public Land Act is concerned, for they were able to overcome the burden of proving the alienability of the land subject of their application. As correctly found by the Court of Appeals, private respondents were able to prove their open, continuous, exclusive and notorious possession of the subject land even before the year 1927. As a rule, we are bound by the factual findings of the Court of Appeals. Although there are exceptions, petitioner did not show that this is one of them.29 cra

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Why did the Court in Ceniza, through the same eminent member who authored Bracewell, sanction the registration under Section 48(b) of public domain lands declared alienable or disposable thirty-five (35) years and 180 days after 12 June 1945? The telling difference is that in Ceniza, the application for registration was filed nearly six (6) years after the land had been declared alienable or disposable, while in Bracewell, the application was filed nine (9) years before the land was declared alienable or disposable. That crucial difference was also stressed in Naguit to contradistinguish it from Bracewell, a difference which the dissent seeks to belittle. III. We next ascertain the correct framework of analysis with respect to Section 14(2). The provision reads:cra:nad SECTION 14. Who may apply. - The following persons may file in the proper Court of First Instance an application for registration of title to land, whether personally or through their duly authorized representatives: xxx (2) Those who have acquired ownership over private lands by prescription under the provisions of existing laws. The Court in Naguit offered the following discussion concerning Section 14(2), which we did even then recognize, and still do, to be an obiter dictum, but we nonetheless refer to it as material for further discussion, thus:cra:nad Did the enactment of the Property Registration Decree and the amendatory P.D. No. 1073 preclude the application for registration of alienable lands of the public domain, possession over which commenced only after June 12, 1945? It did not, considering Section 14(2) of the Property Registration Decree, which governs and authorizes the application of "those who have acquired ownership of private lands by prescription under the provisions of existing laws." Prescription is one of the modes of acquiring ownership under the Civil Code.[30 ] There is a consistent jurisprudential rule that properties classified as alienable public land may be converted into private property by reason of open, continuous and exclusive possession of at least thirty (30) years.[31 ] With such conversion, such property may now fall within the contemplation of "private lands" under Section 14(2), and thus susceptible to registration by those who have acquired ownership through prescription. Thus, even if possession of the alienable public land commenced on a date later than June 12, 1945, and such possession being been open, continuous and exclusive, then the possessor may have the right to register the land by virtue of Section 14(2) of the Property Registration Decree. Naguit did not involve the application of Section 14(2), unlike in this case where petitioners have based their registration bid primarily on that provision, and where the evidence definitively establishes their claim of possession only as far back as 1948. It is in this case that we can properly appreciate the nuances of the provision. A. The obiter in Naguit cited the Civil Code provisions on prescription as the possible basis for application for original registration under Section 14(2). Specifically, it is Article 1113 which provides legal foundation for the application. It reads:cra:nad All things which are within the commerce of men are susceptible of prescription, unless otherwise provided. Property of the State or any of its subdivisions not patrimonial in character shall not be the object of prescription. It is clear under the Civil Code that where lands of the public domain are patrimonial in character, they are susceptible to acquisitive prescription. On the other hand, among the public domain lands that are not susceptible to acquisitive prescription are timber lands and mineral lands. The Constitution itself proscribes private ownership of timber or mineral lands. There are in fact several provisions in the Civil Code concerning the acquisition of real property through prescription. Ownership of real property may be acquired by ordinary prescription of ten (10) years,32 or through extraordinary prescription of thirty (30) years.33 Ordinary acquisitive prescription requires possession in good faith,34 as well as just title.35 cra When Section 14(2) of the Property Registration Decree explicitly provides that persons "who have acquired ownership over private lands by prescription under the provisions of existing laws," it unmistakably refers to the Civil Code as a valid basis for the registration of lands. The Civil Code is the only existing law that specifically allows the acquisition by prescription of private lands, including patrimonial property belonging to the State. Thus, the critical question that needs affirmation is whether Section 14(2) does encompass original registration proceedings over patrimonial property of the State, which a private person has acquired through prescription.

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The Naguit obiter had adverted to a frequently reiterated jurisprudence holding that properties classified as alienable public land may be converted into private property by reason of open, continuous and exclusive possession of at least thirty (30) years. 36 Yet if we ascertain the source of the "thirty-year" period, additional complexities relating to Section 14(2) and to how exactly it operates would emerge. For there are in fact two distinct origins of the thirty (30)-year rule. The first source is Rep. Act No. 1942, enacted in 1957, which amended Section 48(b) of the Public Land Act by granting the right to seek original registration of alienable public lands through possession in the concept of an owner for at least thirty years. 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: xxxxxxxxx (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 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)37 cra This provision was repealed in 1977 with the enactment of P.D. 1073, which made the date 12 June 1945 the reckoning point for the first time. Nonetheless, applications for registration filed prior to 1977 could have invoked the 30-year rule introduced by Rep. Act No. 1942. The second source is Section 14(2) of P.D. 1529 itself, at least by implication, as it applies the rules on prescription under the Civil Code, particularly Article 1113 in relation to Article 1137. Note that there are two kinds of prescription under the Civil Code-ordinary acquisitive prescription and extraordinary acquisitive prescription, which, under Article 1137, is completed "through uninterrupted adverse possession. for thirty years, without need of title or of good faith." Obviously, the first source of the thirty (30)-year period rule, Rep. Act No. 1942, became unavailable after 1977. At present, the only legal basis for the thirty (30)-year period is the law on prescription under the Civil Code, as mandated under Section 14(2). However, there is a material difference between how the thirty (30)-year rule operated under Rep. Act No. 1942 and how it did under the Civil Code. Section 48(b) of the Public Land Act, as amended by Rep. Act No. 1942, did not refer to or call into application the Civil Code provisions on prescription. It merely set forth a requisite thirty-year possession period immediately preceding the application for confirmation of title, without any qualification as to whether the property should be declared alienable at the beginning of, and continue as such, throughout the entire thirty-(30) years. There is neither statutory nor jurisprudential basis to assert Rep. Act No. 1942 had mandated such a requirement,38 similar to our earlier finding with respect to the present language of Section 48(b), which now sets 12 June 1945 as the point of reference. Then, with the repeal of Rep. Act No. 1942, the thirty-year possession period as basis for original registration became Section 14(2) of the Property Registration Decree, which entitled those "who have acquired ownership over private lands by prescription under the provisions of existing laws" to apply for original registration. Again, the thirty-year period is derived from the rule on extraordinary prescription under Article 1137 of the Civil Code. At the same time, Section 14(2) puts into operation the entire regime of prescription under the Civil Code, a fact which does not hold true with respect to Section 14(1). B. Unlike Section 14(1), Section 14(2) explicitly refers to the principles on prescription under existing laws. Accordingly, we are impelled to apply the civil law concept of prescription, as set forth in the Civil Code, in our interpretation of Section 14(2). There is no similar demand on our part in the case of Section 14(1). The critical qualification under Article 1113 of the Civil Code is thus: "[p]roperty of the State or any of its subdivisions not patrimonial in character shall not be the object of prescription." The identification what consists of patrimonial property is provided by Articles 420 and 421, which we quote in full:cra:nad Art. 420. The following things are property of public dominion:

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(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character; (2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth. Art. 421. All other property of the State, which is not of the character stated in the preceding article, is patrimonial property It is clear that property of public dominion, which generally includes property belonging to the State, cannot be the object of prescription or, indeed, be subject of the commerce of man.39 Lands of the public domain, whether declared alienable and disposable or not, are property of public dominion and thus insusceptible to acquisition by prescription. Let us now explore the effects under the Civil Code of a declaration by the President or any duly authorized government officer of alienability and disposability of lands of the public domain. Would such lands so declared alienable and disposable be converted, under the Civil Code, from property of the public dominion into patrimonial property? After all, by connotative definition, alienable and disposable lands may be the object of the commerce of man; Article 1113 provides that all things within the commerce of man are susceptible to prescription; and the same provision further provides that patrimonial property of the State may be acquired by prescription. Nonetheless, Article 422 of the Civil Code states that "[p]roperty of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State." It is this provision that controls how public dominion property may be converted into patrimonial property susceptible to acquisition by prescription. After all, Article 420 (2) makes clear that those property "which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth" are public dominion property. For as long as the property belongs to the State, although already classified as alienable or disposable, it remains property of the public dominion if when it is "intended for some public service or for the development of the national wealth". Accordingly, there must be an express declaration by the State that the public dominion property is no longer intended for public service or the development of the national wealth or that the property has been converted into patrimonial. Without such express declaration, the property, even if classified as alienable or disposable, remains property of the public dominion, pursuant to Article 420(2), and thus incapable of acquisition by prescription. It is only when such alienable and disposable lands are expressly declared by the State to be no longer intended for public service or for the development of the national wealth that the period of acquisitive prescription can begin to run. Such declaration shall be in the form of a law duly enacted by Congress or a Presidential Proclamation in cases where the President is duly authorized by law. It is comprehensible with ease that this reading of Section 14(2) of the Property Registration Decree limits its scope and reach and thus affects the registrability even of lands already declared alienable and disposable to the detriment of the bona fide possessors or occupants claiming title to the lands. Yet this interpretation is in accord with the Regalian doctrine and its concomitant assumption that all lands owned by the State, although declared alienable or disposable, remain as such and ought to be used only by the Government. Recourse does not lie with this Court in the matter. The duty of the Court is to apply the Constitution and the laws in accordance with their language and intent. The remedy is to change the law, which is the province of the legislative branch. Congress can very well be entreated to amend Section 14(2) of the Property Registration Decree and pertinent provisions of the Civil Code to liberalize the requirements for judicial confirmation of imperfect or incomplete titles. The operation of the foregoing interpretation can be illustrated by an actual example. Republic Act No. 7227, entitled "An Act Accelerating The Conversion Of Military Reservations Into Other Productive Uses, etc.," is more commonly known as the BCDA law. Section 2 of the law authorizes the sale of certain military reservations and portions of military camps in Metro Manila, including Fort Bonifacio and Villamor Air Base. For purposes of effecting the sale of the military camps, the law mandates the President to transfer such military lands to the Bases Conversion Development Authority (BCDA)40 which in turn is authorized to own, hold and/or administer them.41 The President is authorized to sell portions of the military camps, in whole or in part. 42Accordingly, the BCDA law itself declares that the military lands subject thereof are "alienable and disposable pursuant to the provisions of existing laws and regulations governing sales of government properties."43 cra From the moment the BCDA law was enacted the subject military lands have become alienable and disposable. However, said lands did not become patrimonial, as the BCDA law itself expressly makes the reservation that these lands are to be sold in order to raise funds for the conversion of the former American bases at Clark and Subic.44 Such purpose can be tied to either "public service" or "the development of national wealth" under Article 420(2). Thus, at that time, the lands remained property of the public dominion under Article 420(2), notwithstanding their status as alienable and disposable. It is upon their sale as authorized under the BCDA law to a private person or entity that such lands become private property and cease to be property of the public dominion.

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C. Should public domain lands become patrimonial because they are declared as such in a duly enacted law or duly promulgated proclamation that they are no longer intended for public service or for the development of the national wealth, would the period of possession prior to the conversion of such public dominion into patrimonial be reckoned in counting the prescriptive period in favor of the possessors? We rule in the negative. The limitation imposed by Article 1113 dissuades us from ruling that the period of possession before the public domain land becomes patrimonial may be counted for the purpose of completing the prescriptive period. Possession of public dominion property before it becomes patrimonial cannot be the object of prescription according to the Civil Code. As the application for registration under Section 14(2) falls wholly within the framework of prescription under the Civil Code, there is no way that possession during the time that the land was still classified as public dominion property can be counted to meet the requisites of acquisitive prescription and justify registration. Are we being inconsistent in applying divergent rules for Section 14(1) and Section 14(2)? There is no inconsistency. Section 14(1) mandates registration on the basis of possession, while Section 14(2) entitles registration on the basis of prescription.Registration under Section 14(1) is extended under the aegis of the Property Registration Decree and the Public Land Actwhile registration under Section 14(2) is made available both by the Property Registration Decree and the Civil Code. In the same manner, we can distinguish between the thirty-year period under Section 48(b) of the Public Land Act, as amended by Rep. Act No. 1472, and the thirty-year period available through Section 14(2) of the Property Registration Decree in relation to Article 1137 of the Civil Code. The period under the former speaks of a thirty-year period of possession, while the period under the latter concerns a thirty-year period of extraordinary prescription. Registration under Section 48(b) of the Public Land Act as amended by Rep. Act No. 1472 is based on thirty years of possession alone without regard to the Civil Code, while the registration under Section 14(2) of the Property Registration Decree is founded on extraordinary prescription under the Civil Code. It may be asked why the principles of prescription under the Civil Code should not apply as well to Section 14(1). Notwithstanding the vaunted status of the Civil Code, it ultimately is just one of numerous statutes, neither superior nor inferior to other statutes such as the Property Registration Decree. The legislative branch is not bound to adhere to the framework set forth by the Civil Code when it enacts subsequent legislation. Section 14(2) manifests a clear intent to interrelate the registration allowed under that provision with the Civil Code, but no such intent exists with respect to Section 14(1). IV. One of the keys to understanding the framework we set forth today is seeing how our land registration procedures correlate with our law on prescription, which, under the Civil Code, is one of the modes for acquiring ownership over property. The Civil Code makes it clear that patrimonial property of the State may be acquired by private persons through prescription. This is brought about by Article 1113, which states that "[a]ll things which are within the commerce of man are susceptible to prescription," and that [p]roperty of the State or any of its subdivisions not patrimonial in character shall not be the object of prescription." There are two modes of prescription through which immovables may be acquired under the Civil Code. The first is ordinary acquisitive prescription, which, under Article 1117, requires possession in good faith and with just title; and, under Article 1134, is completed through possession of ten (10) years. There is nothing in the Civil Code that bars a person from acquiring patrimonial property of the State through ordinary acquisitive prescription, nor is there any apparent reason to impose such a rule. At the same time, there are indispensable requisites-good faith and just title. The ascertainment of good faith involves the application of Articles 526, 527, and 528, as well as Article 1127 of the Civil Code,45 provisions that more or less speak for themselves. On the other hand, the concept of just title requires some clarification. Under Article 1129, there is just title for the purposes of prescription "when the adverse claimant came into possession of the property through one of the modes recognized by law for the acquisition of ownership or other real rights, but the grantor was not the owner or could not transmit any right." Dr. Tolentino explains:cra:nad Just title is an act which has for its purpose the transmission of ownership, and which would have actually transferred ownership if the grantor had been the owner. This vice or defect is the one cured by prescription. Examples: sale with delivery, exchange, donation, succession, and dacion in payment.46 cra The OSG submits that the requirement of just title necessarily precludes the applicability of ordinary acquisitive prescription to patrimonial property. The major premise for the argument is that "the State, as the owner and grantor, could not transmit ownership to the possessor before the completion of the required period of possession."47 It is evident that the OSG erred when it assumed that the grantor referred to in Article 1129 is the State. The grantor is the one from whom the person invoking ordinary acquisitive prescription

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derived the title, whether by sale, exchange, donation, succession or any other mode of the acquisition of ownership or other real rights. Earlier, we made it clear that, whether under ordinary prescription or extraordinary prescription, the period of possession preceding the classification of public dominion lands as patrimonial cannot be counted for the purpose of computing prescription. But after the property has been become patrimonial, the period of prescription begins to run in favor of the possessor. Once the requisite period has been completed, two legal events ensue: (1) the patrimonial property is ipso jure converted into private land; and (2) the person in possession for the periods prescribed under the Civil Code acquires ownership of the property by operation of the Civil Code. It is evident that once the possessor automatically becomes the owner of the converted patrimonial property, the ideal next step is the registration of the property under the Torrens system. It should be remembered that registration of property is not a mode of acquisition of ownership, but merely a mode of confirmation of ownership.48 cra Looking back at the registration regime prior to the adoption of the Property Registration Decree in 1977, it is apparent that the registration system then did not fully accommodate the acquisition of ownership of patrimonial property under the Civil Code. What the system accommodated was the confirmation of imperfect title brought about by the completion of a period of possession ordained under the Public Land Act (either 30 years following Rep. Act No. 1942, or since 12 June 1945 following P.D. No. 1073). The Land Registration Act49 was noticeably silent on the requisites for alienable public lands acquired through ordinary prescription under the Civil Code, though it arguably did not preclude such registration.50 Still, the gap was lamentable, considering that the Civil Code, by itself, establishes ownership over the patrimonial property of persons who have completed the prescriptive periods ordained therein. The gap was finally closed with the adoption of the Property Registration Decree in 1977, with Section 14(2) thereof expressly authorizing original registration in favor of persons who have acquired ownership over private lands by prescription under the provisions of existing laws, that is, the Civil Code as of now. V. We synthesize the doctrines laid down in this case, as follows: (1) In connection with Section 14(1) of the Property Registration Decree, Section 48(b) of the Public Land Act recognizes and confirms that "those who by themselves or through their predecessors in interest have been in open, continuous, exclusive, and notorious possession and occupation of alienable and disposable lands of the public domain, under a bona fide claim of acquisition of ownership, since June 12, 1945" have acquired ownership of, and registrable title to, such lands based on the length and quality of their possession. (a) Since Section 48(b) merely requires possession since 12 June 1945 and does not require that the lands should have been alienable and disposable during the entire period of possession, the possessor is entitled to secure judicial confirmation of his title thereto as soon as it is declared alienable and disposable, subject to the timeframe imposed by Section 47 of the Public Land Act.51 cra (b) The right to register granted under Section 48(b) of the Public Land Act is further confirmed by Section 14(1) of the Property Registration Decree. (2) In complying with Section 14(2) of the Property Registration Decree, consider that under the Civil Code, prescription is recognized as a mode of acquiring ownership of patrimonial property. However, public domain lands become only patrimonial property not only with a declaration that these are alienable or disposable. There must also be an express government manifestation that the property is already patrimonial or no longer retained for public service or the development of national wealth, under Article 422 of the Civil Code. And only when the property has become patrimonial can the prescriptive period for the acquisition of property of the public dominion begin to run. (a) Patrimonial property is private property of the government. The person acquires ownership of patrimonial property by prescription under the Civil Code is entitled to secure registration thereof under Section 14(2) of the Property Registration Decree. (b) There are two kinds of prescription by which patrimonial property may be acquired, one ordinary and other extraordinary. Under ordinary acquisitive prescription, a person acquires ownership of a patrimonial property through possession for at least ten (10) years, in good faith and with just title. Under extraordinary acquisitive prescription, a person's uninterrupted adverse possession of patrimonial property for at least thirty (30) years, regardless of good faith or just title, ripens into ownership. B. We now apply the above-stated doctrines to the case at bar.

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It is clear that the evidence of petitioners is insufficient to establish that Malabanan has acquired ownership over the subject property under Section 48(b) of the Public Land Act. There is no substantive evidence to establish that Malabanan or petitioners as his predecessors-in-interest have been in possession of the property since 12 June 1945 or earlier. The earliest that petitioners can date back their possession, according to their own evidence-the Tax Declarations they presented in particular-is to the year 1948. Thus, they cannot avail themselves of registration under Section 14(1) of the Property Registration Decree. Neither can petitioners properly invoke Section 14(2) as basis for registration. While the subject property was declared as alienable or disposable in 1982, there is no competent evidence that is no longer intended for public use service or for the development of the national evidence, conformably with Article 422 of the Civil Code. The classification of the subject property as alienable and disposable land of the public domain does not change its status as property of the public dominion under Article 420(2) of the Civil Code. Thus, it is insusceptible to acquisition by prescription. VI. A final word. The Court is comfortable with the correctness of the legal doctrines established in this decision. Nonetheless, discomfiture over the implications of today's ruling cannot be discounted. For, every untitled property that is occupied in the country will be affected by this ruling. The social implications cannot be dismissed lightly, and the Court would be abdicating its social responsibility to the Filipino people if we simply levied the law without comment. The informal settlement of public lands, whether declared alienable or not, is a phenomenon tied to long-standing habit and cultural acquiescence, and is common among the so-called "Third World" countries. This paradigm powerfully evokes the disconnect between a legal system and the reality on the ground. The law so far has been unable to bridge that gap. Alternative means of acquisition of these public domain lands, such as through homestead or free patent, have proven unattractive due to limitations imposed on the grantee in the encumbrance or alienation of said properties. 52 Judicial confirmation of imperfect title has emerged as the most viable, if not the most attractive means to regularize the informal settlement of alienable or disposable lands of the public domain, yet even that system, as revealed in this decision, has considerable limits. There are millions upon millions of Filipinos who have individually or exclusively held residential lands on which they have lived and raised their families. Many more have tilled and made productive idle lands of the State with their hands. They have been regarded for generation by their families and their communities as common law owners. There is much to be said about the virtues of according them legitimate states. Yet such virtues are not for the Court to translate into positive law, as the law itself considered such lands as property of the public dominion. It could only be up to Congress to set forth a new phase of land reform to sensibly regularize and formalize the settlement of such lands which in legal theory are lands of the public domain before the problem becomes insoluble. This could be accomplished, to cite two examples, by liberalizing the standards for judicial confirmation of imperfect title, or amending the Civil Code itself to ease the requisites for the conversion of public dominion property into patrimonial. One's sense of security over land rights infuses into every aspect of well-being not only of that individual, but also to the person's family. Once that sense of security is deprived, life and livelihood are put on stasis. It is for the political branches to bring welcome closure to the long pestering problem. WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals dated 23 February 2007 and Resolution dated 2 October 2007 are AFFIRMED. No pronouncement as to costs. SO ORDERED.

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