BALBIN V.

REGISTER OF DEEDS
11FEB
L 20611 | May 8, 1969 | J. Makalintal
Where several co-owners duplicate of certificates of titles are issued, a voluntary instrument cannot be
registered without surrendering all the copies to the Register of Deeds so that every copy of thereof would
contain identical entries of the transactions affecting the land covered.
FACTS:
Petitioners Aurelio and Francis Balbin presented to the Ilocos Sur register of deeds a duplicate copy of the
registered owners certificate of title and a deed of donation inter-vivos, requesting that the latter be
annotated on the title. The registered owner Cornelio Balbin appears to have donated inter-vivos 2/3
portion of the land. The register of deeds denied the requested annotation for being legally defective or
otherwise not sufficient in law. It appears that previously annotated in the memorandum of encumbrances
on the OCT are three separate sales earlier executed by Cornelio Balbin in favor of Florentino Gabayan,
Roberto Bravo and Juana Gabayan, who each received their co-owners duplicate CTs. Mainly because
these 3 co-owners copies of CTs had not been presented by petitioners, the register of deeds refused to
make the requested annotation. Petitioners referred the matter to the Commissioner of Land Registration,
who upheld the action of the Register of Deeds in a resolution.
ISSUE:
W/N the refusal of the Register of Deeds to make the annotation is proper
HELD:
YES. There being several copies of the same title in existence, their integrity may be affected if an
encumbrance, or an outright conveyance, is annotated on one copy and not on the others. If different
copies were permitted to carry different annotations, the whole system of Torrens registration would cease
to be available.
Since the property subject of donation is also presumed conjugal, that is, property of donor Cornelio and
his deceased wife Nemesia Mina, there should first be a liquidation of the partnership before the surviving
spouse may make such a conveyance. Assuming the conjugal nature of the property, the donation bears
on its face an infirmity which justified the denial of registration, namely, the fact that 2/3 portion of the
property which Cornelio donated was more than his share, not to say more than what remained of such
share after he had sold portions of the same land to 3 other parties.
Pending the resolution of a separate case, wherein Cornelios civil status, character of land and validity of
conveyances are in issue, the registration may await the outcome of said case and parties may protect
their rights by filing the proper notices of lis pendens.

YAP vs DENR
REYES, R.T., J.:
AT stake in these consolidated cases is the right of the present occupants of Boracay Island to secure titles
over their occupied lands.
There are two consolidated petitions. The first is G.R. No. 167707, a petition for review on certiorari of the
Decision[1] of the Court of Appeals (CA) affirming that[2] of the Regional Trial Court (RTC) in Kalibo, Aklan,
which granted the petition for declaratory relief filed by respondents-claimants Mayor Jose Yap, et al. and
ordered the survey of Boracay for titling purposes. The second is G.R. No. 173775, a petition for
prohibition, mandamus, and nullification of Proclamation No. 1064 [3] issued by President Gloria MacapagalArroyo classifying Boracay into reserved forest and agricultural land.
The Antecedents
G.R. No. 167707
Boracay Island in the Municipality of Malay, Aklan, with its powdery white sand beaches and warm
crystalline waters, is reputedly a premier Philippine tourist destination. The island is also home to 12,003
inhabitants[4] who live in the bone-shaped islands three barangays.[5]
On April 14, 1976, the Department of Environment and Natural Resources (DENR) approved the National
Reservation Survey of Boracay
Island,[6] which identified several lots as being occupied or claimed by named persons. [7]
On November 10, 1978, then President Ferdinand Marcos issued Proclamation
No. 1801[8] declaring Boracay Island, among other islands, caves and peninsulas in the Philippines,
as tourist zones and marine reserves under the administration of the Philippine Tourism Authority
(PTA). President Marcos later approved the issuance of PTA Circular 3-82[9] dated September 3, 1982, to
implement Proclamation No. 1801.
Claiming that Proclamation No. 1801 and PTA Circular No 3-82 precluded them from filing an application for
judicial confirmation of imperfect title or survey of land for titling purposes, respondents-claimants
Mayor Jose S. Yap, Jr., Libertad Talapian, Mila Y. Sumndad, and Aniceto Yap filed a petition for declaratory
relief with the RTC in Kalibo, Aklan.
In their petition, respondents-claimants alleged that Proclamation No. 1801 and PTA Circular No. 3-82
raised doubts on their right to secure titles over their occupied lands. They declared that they themselves,
or through their predecessors-in-interest, had been in open, continuous, exclusive, and notorious
possession and occupation in Boracay since June 12, 1945, or earlier since time immemorial. They
declared their lands for tax purposes and paid realty taxes on them. [10]
Respondents-claimants posited that Proclamation No. 1801 and its implementing Circular did not place
Boracay beyond the commerce of man. Since the Island was classified as a tourist zone, it was susceptible
of private ownership. Under Section 48(b) of Commonwealth Act (CA) No. 141, otherwise known as the
Public Land Act, they had the right to have the lots registered in their names through judicial confirmation
of imperfect titles.
The Republic, through the Office of the Solicitor General (OSG), opposed the petition for declaratory
relief. The OSG countered that Boracay Island was an unclassified land of the public domain. It formed
part of the mass of lands classified as public forest, which was not available for disposition pursuant to
Section 3(a) of Presidential Decree (PD) No. 705 or the Revised Forestry Code, [11] as amended.
The OSG maintained that respondents-claimants reliance on PD No. 1801 and PTA Circular No. 3-82 was
misplaced. Their right to judicial confirmation of title was governed by CA No. 141 and PD No.
705. Since Boracay Island had not been classified as alienable and disposable, whatever possession they
had cannot ripen into ownership.

During pre-trial, respondents-claimants and the OSG stipulated on the following facts: (1) respondentsclaimants were presently in possession of parcels of land in Boracay Island; (2) these parcels of land were
planted with coconut trees and other natural growing trees; (3) the coconut trees had heights of more or
less twenty (20) meters and were planted more or less fifty (50) years ago; and (4) respondents-claimants
declared the land they were occupying for tax purposes.[12]
The parties also agreed that the principal issue for resolution was purely legal: whether Proclamation No.
1801 posed any legal hindrance or impediment to the titling of the lands in Boracay. They decided to
forego with the trial and to submit the case for resolution upon submission of their respective memoranda.
[13]

The RTC took judicial notice[14] that certain parcels of land in Boracay Island, more particularly Lots 1 and
30, Plan PSU-5344, were covered by Original Certificate of Title No. 19502 (RO 2222) in the name of the
Heirs of Ciriaco S. Tirol.These lots were involved in Civil Case Nos. 5222 and 5262 filed before
the RTC of Kalibo, Aklan.[15] The titles were issued on
August 7, 1933.[16]
RTC and CA Dispositions
On July 14, 1999, the RTC rendered a decision in favor of respondents-claimants, with a fallo reading:
WHEREFORE, in view of the foregoing, the Court declares that Proclamation No. 1801 and PTA Circular No.
3-82 pose no legal obstacle to the petitioners and those similarly situated to acquire title to their lands in
Boracay, in accordance with the applicable laws and in the manner prescribed therein; and to have their
lands surveyed and approved by respondent Regional Technical Director of Lands as the approved survey
does not in itself constitute a title to the land.
SO ORDERED.[17]
The RTC upheld respondents-claimants right to have their occupied lands titled in their name. It ruled that
neither Proclamation No. 1801 nor PTA Circular No. 3-82 mentioned that lands in Boracay were inalienable
or could not be the subject of disposition. [18] The Circular itself recognized private ownership of lands.
[19]
The trial court cited Sections 87[20] and 53[21] of the Public Land Act as basis for acknowledging private
ownership of lands in Boracay and that only those forested areas in public lands were declared as part of
the forest reserve.[22]
The OSG moved for reconsideration but its motion was denied.[23] The Republic then appealed to the CA.
On December 9, 2004, the appellate court affirmed in toto the RTC decision, disposing as follows:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DENYING the appeal
filed in this case and AFFIRMING the decision of the lower court. [24]

The CA held that respondents-claimants could not be prejudiced by a declaration that the lands they
occupied since time immemorial were part of a forest reserve.
Again, the OSG sought reconsideration but it was similarly denied.[25] Hence, the present petition under
Rule 45.
G.R. No. 173775
On May 22, 2006, during the pendency of G.R. No. 167707, President Gloria Macapagal-Arroyo issued
Proclamation No. 1064[26] classifying Boracay Island into four hundred (400) hectares of reserved forest
land (protection purposes) and six hundred twenty-eight and 96/100 (628.96) hectares of agricultural land
(alienable and disposable). The Proclamation likewise provided for a fifteen-meter buffer zone on each side

of the centerline of roads and trails, reserved for right-of-way and which shall form part of the area
reserved for forest land protection purposes.
On August 10, 2006, petitioners-claimants Dr. Orlando Sacay,[27] Wilfredo Gelito,[28] and other
landowners[29] in Boracay filed with this Court an original petition for prohibition, mandamus, and
nullification of Proclamation No. 1064.[30]They allege that the Proclamation infringed on their prior vested
rights over portions of Boracay. They have been in continued possession of their respective lots in Boracay
since time immemorial. They have also invested billions of pesos in developing their lands and building
internationally renowned first class resorts on their lots.[31]

Petitioners-claimants contended that there is no need for a proclamation reclassifying Boracay into
agricultural land. Being classified as neither mineral nor timber land, the island is deemed agricultural
pursuant to the Philippine Bill of 1902 and Act No. 926, known as the first Public Land Act.[32] Thus, their
possession in the concept of owner for the required period entitled them to judicial confirmation of
imperfect title.
Opposing the petition, the OSG argued that petitioners-claimants do not have a vested right over their
occupied portions in the island. Boracay is an unclassified public forest land pursuant to Section 3(a) of PD
No. 705. Being public forest, the claimed portions of the island are inalienable and cannot be the subject of
judicial confirmation of imperfect title. It is only the executive department, not the courts, which has
authority to reclassify lands of the public domain into alienable and disposable lands. There is a need for a
positive government act in order to release the lots for disposition.
On November 21, 2006, this Court ordered the consolidation of the two petitions as they principally involve
the same issues on the land classification of Boracay Island.[33]
Issues
G.R. No. 167707
The OSG raises the lone issue of whether Proclamation No. 1801 and PTA Circular No. 3-82 pose any legal
obstacle for respondents, and all those similarly situated, to acquire title to their occupied lands
in Boracay Island.[34]
G.R. No. 173775
Petitioners-claimants hoist five (5) issues, namely:
I.
AT THE TIME OF THE ESTABLISHED POSSESSION OF PETITIONERS IN CONCEPT OF OWNER OVER THEIR
RESPECTIVE AREAS IN BORACAY, SINCE TIME IMMEMORIAL OR AT THE LATEST SINCE 30 YRS. PRIOR TO THE
FILING OF THE PETITION FOR DECLARATORY RELIEF ON NOV. 19, 1997, WERE THE AREAS OCCUPIED BY
THEM PUBLIC AGRICULTURAL LANDS AS DEFINED BY LAWS THEN ON JUDICIAL CONFIRMATION OF
IMPERFECT TITLES OR PUBLIC FOREST AS DEFINED BY SEC. 3a, PD 705?
II.
HAVE PETITIONERS OCCUPANTS ACQUIRED PRIOR VESTED RIGHT OF PRIVATE OWNERSHIP OVER THEIR
OCCUPIED PORTIONS OF BORACAY LAND, DESPITE THE FACT THAT THEY HAVE NOT APPLIED YET FOR
JUDICIAL CONFIRMATION OF IMPERFECT TITLE?
III.
IS THE EXECUTIVE DECLARATION OF THEIR AREAS AS ALIENABLE AND DISPOSABLE UNDER SEC 6, CA 141
[AN] INDISPENSABLE PRE-REQUISITE FOR PETITIONERS TO OBTAIN TITLE UNDER THE TORRENS SYSTEM?
IV.
IS THE ISSUANCE OF PROCLAMATION 1064 ON MAY 22, 2006, VIOLATIVE OF THE PRIOR VESTED RIGHTS TO
PRIVATE OWNERSHIP OF PETITIONERS OVER THEIR LANDS IN BORACAY, PROTECTED BY THE DUE PROCESS

CLAUSE OF THE CONSTITUTION OR IS PROCLAMATION 1064 CONTRARY TO SEC. 8, CA 141, OR SEC. 4(a)
OF RA 6657.
V.
CAN RESPONDENTS BE COMPELLED BY MANDAMUS TO ALLOW THE SURVEY AND TO APPROVE THE SURVEY
PLANS FOR PURPOSES OF THE APPLICATION FOR TITLING OF THE LANDS OF PETITIONERS IN BORACAY?
[35]
(Underscoring supplied)
In capsule, the main issue is whether private claimants (respondents-claimants in G.R. No. 167707 and
petitioners-claimants in G.R. No. 173775) have a right to secure titles over their occupied portions in
Boracay. The twin petitions pertain to their right, if any, to judicial confirmation of imperfect title under CA
No. 141, as amended. They do not involve their right to secure title under other pertinent laws.
Our Ruling
Regalian Doctrine and power of the executive
to reclassify lands of the public domain
Private claimants rely on three (3) laws and executive acts in their bid for judicial confirmation of imperfect
title, namely: (a) Philippine Bill of 1902[36] in relation to Act No. 926, later amended and/or superseded by
Act No. 2874 and CA No. 141;[37] (b) Proclamation No. 1801[38] issued by then President Marcos; and (c)
Proclamation No. 1064[39] issued by President Gloria Macapagal-Arroyo. We shall proceed to determine their
rights to apply for judicial confirmation of imperfect title under these laws and executive acts.
But first, a peek at the Regalian principle and the power of the executive to reclassify lands of the public
domain.
The 1935 Constitution classified lands of the public domain into agricultural, forest or timber. [40] Meanwhile,
the 1973 Constitution provided the following divisions: agricultural, industrial or commercial, residential,
resettlement, mineral, timber or forest and grazing lands, and such other classes as may be provided by
law,[41] giving the government great leeway for classification.[42] Then the 1987 Constitution reverted to the
1935 Constitution classification with one addition: national parks. [43] Of these, only agricultural lands may
be alienated.[44] Prior to Proclamation No. 1064 of May 22, 2006, Boracay Island had never been expressly
and administratively classified under any of these grand divisions. Boracay was an unclassified land of the
public domain.
The Regalian Doctrine dictates that all lands of the public domain belong to the State, that the State is the
source of any asserted right to ownership of land and charged with the conservation of such patrimony.
[45]
The doctrine has been consistently adopted under the 1935, 1973, and 1987 Constitutions. [46]
All lands not otherwise appearing to be clearly within private ownership are presumed to belong to the
State.[47] Thus, all lands that have not been acquired from the government, either by purchase or by grant,
belong to the State as part of the inalienable public domain. [48] Necessarily, it is up to the State to
determine if lands of the public domain will be disposed of for private ownership. The government, as the
agent of the state, is possessed of the plenary power as the persona in law to determine who shall be the
favored recipients of public lands, as well as under what terms they may be granted such privilege, not
excluding the placing of obstacles in the way of their exercise of what otherwise would be ordinary acts of
ownership.[49]
Our present land law traces its roots to the Regalian Doctrine. Upon the Spanish conquest of
the Philippines, ownership of all lands, territories and possessions in the Philippines passed to the Spanish
Crown.[50] The Regalian doctrine was first introduced in the Philippines through the Laws of the Indies and
the Royal Cedulas, which laid the foundation that all lands that were not acquired from the Government,
either by purchase or by grant, belong to the public domain. [51]
The Laws of the Indies was followed by the Ley Hipotecaria or the Mortgage Law of 1893. The Spanish
Mortgage Law provided for the systematic registration of titles and deeds as well as possessory claims. [52]

The Royal Decree of 1894 or the Maura Law[53] partly amended the Spanish Mortgage Law and the Laws of
the Indies. It established possessory information as the method of legalizing possession of vacant Crown
land, under certain conditions which were set forth in said decree. [54] Under Section 393 of the Maura Law,
an informacion posesoria or possessory information title,[55] when duly inscribed in the Registry of Property,
is converted into a title of ownership only after the lapse of twenty (20) years of uninterrupted possession
which must be actual, public, and adverse,[56] from the date of its inscription.[57] However, possessory
information title had to be perfected one year after the promulgation of the Maura Law, or until April 17,
1895. Otherwise, the lands would revert to the State.[58]
In sum, private ownership of land under the Spanish regime could only be founded on royal concessions
which took various forms, namely: (1) titulo real or royal grant; (2) concesion especial or special
grant; (3) composicion con el estado or adjustment title; (4) titulo de compra or title by purchase; and
(5) informacion posesoria or possessory information title.[59]
The first law governing the disposition of public lands in the Philippines under American rule was
embodied in the Philippine Bill of 1902.[60] By this law, lands of the public domain in the Philippine Islands
were classified into three (3) grand divisions, to wit: agricultural, mineral, and timber or forest lands. [61] The
act provided for, among others, the disposal of mineral lands by means of absolute grant (freehold system)
and by lease (leasehold system).[62] It also provided the definition by exclusion of agricultural public lands.
[63]
Interpreting the meaning of agricultural lands under the Philippine Bill of 1902, the Court declared
in Mapa v. Insular Government:[64]

x x x In other words, that the phrase agricultural land as used in Act No. 926 means those public lands
acquired from Spain which are not timber or mineral lands. x x x[65] (Emphasis Ours)
On February 1, 1903, the Philippine Legislature passed Act No. 496, otherwise known as the Land
Registration Act. The act established a system of registration by which recorded title becomes absolute,
indefeasible, and imprescriptible. This is known as the Torrens system.[66]
Concurrently, on October 7, 1903, the Philippine Commission passed Act No. 926, which was the first
Public Land Act. The Act introduced the homestead system and made provisions for judicial and
administrative confirmation of imperfect titles and for the sale or lease of public lands. It permitted
corporations regardless of the nationality of persons owning the controlling stock to lease or purchase
lands of the public domain.[67] Under the Act, open, continuous, exclusive, and notorious possession and
occupation of agricultural lands for the next ten (10) years preceding July 26, 1904 was sufficient for
judicial confirmation of imperfect title.[68]
On November 29, 1919, Act No. 926 was superseded by Act No. 2874, otherwise known as the second
Public Land Act. This new, more comprehensive law limited the exploitation of agricultural lands to Filipinos
and Americans and citizens of other countries which gave Filipinos the same privileges. For judicial
confirmation of title, possession and occupation en concepto dueo since time immemorial, or since July 26,
1894, was required.[69]
After the passage of the 1935 Constitution, CA No. 141 amended Act No. 2874 on December 1, 1936. To
this day, CA No. 141, as amended, remains as the existing general law governing the classification and
disposition of lands of the public domain other than timber and mineral lands, [70] and privately owned lands
which reverted to the State.[71]
Section 48(b) of CA No. 141 retained the requirement under Act No. 2874 of possession and occupation of
lands of the public domain since time immemorial or since July 26, 1894. However, this provision was
superseded by Republic Act (RA) No. 1942,[72] which provided for a simple thirty-year prescriptive period for
judicial confirmation of imperfect title. The provision was last amended by PD No. 1073,[73] which now
provides for possession and occupation of the land applied for sinceJune 12, 1945, or earlier.[74]

The issuance of PD No. 892[75] on February 16, 1976 discontinued the use of Spanish titles as evidence in
land registration proceedings.[76] Under the decree, all holders of Spanish titles or grants should apply for
registration of their lands under Act No. 496 within six (6) months from the effectivity of the decree
on February 16, 1976. Thereafter, the recording of all unregistered lands[77] shall be governed by Section
194 of the Revised Administrative Code, as amended by Act No. 3344.
On June 11, 1978, Act No. 496 was amended and updated by PD No. 1529, known as the Property
Registration Decree. It was enacted to codify the various laws relative to registration of property. [78] It
governs registration of lands under theTorrens system as well as unregistered lands, including chattel
mortgages.[79]
A positive act declaring land as alienable and disposable is required. In keeping with the
presumption of State ownership, the Court has time and again emphasized that there must be a positive
act of the government, such as an official proclamation,[80] declassifying inalienable public land into
disposable land for agricultural or other purposes.[81] In fact, Section 8 of CA No. 141 limits alienable or
disposable lands only to those lands which have been officially delimited and classified. [82]
The burden of proof in overcoming the presumption of State ownership of the lands of the public domain is
on the person applying for registration (or claiming ownership), who must prove that the land subject of
the application is alienable or disposable.[83] To overcome this presumption, incontrovertible evidence must
be established that the land subject of the application (or claim) is alienable or disposable. [84] There must
still be a positive act declaring land of the public domain as alienable and disposable. To prove that the
land subject of an application for registration is alienable, the applicant must establish the existence of a
positive act of the government such as a presidential proclamation or an executive order; an
administrative action; investigation reports of Bureau of Lands investigators; and a legislative act or a
statute.[85] The applicant may also secure a certification from the government that the land claimed to
have been possessed for the required number of years is alienable and disposable. [86]
In the case at bar, no such proclamation, executive order, administrative action, report, statute, or
certification was presented to the Court. The records are bereft of evidence showing that, prior to 2006,
the portions of Boracay occupied by private claimants were subject of a government proclamation that the
land is alienable and disposable. Absent such well-nigh incontrovertible evidence, the Court cannot accept
the submission that lands occupied by private claimants were already open to disposition before
2006. Matters of land classification or reclassification cannot be assumed. They call for proof.[87]
Ankron and De Aldecoa did not make the whole of Boracay Island, or portions of it, agricultural
lands. Private claimants posit that Boracay was already an agricultural land pursuant to the old
cases Ankron v. Government of the PhilippineIslands (1919)[88] and De Aldecoa v. The Insular Government
(1909).[89] These cases were decided under the provisions of the Philippine Bill of 1902 and Act No.
926. There is a statement in these old cases that in the absence of evidence to the contrary, that in each
case the lands are agricultural lands until the contrary is shown. [90]
Private claimants reliance on Ankron and De Aldecoa is misplaced. These cases did not have the effect of
converting the whole of Boracay Island or portions of it into agricultural lands. It should be stressed that
the Philippine Bill of 1902 and Act No. 926 merely provided the manner through which land registration
courts would classify lands of the public domain. Whether the land would be classified as timber, mineral,
or agricultural depended on proof presented in each case.
Ankron and De Aldecoa were decided at a time when the President of the Philippines had no power to
classify lands of the public domain into mineral, timber, and agricultural. At that time, the courts were free
to make corresponding classifications in justiciable cases, or were vested with implicit power to do so,
depending upon the preponderance of the evidence.[91] This was the Courts ruling in Heirs of the Late
Spouses Pedro S. Palanca and Soterranea Rafols Vda. De Palanca v. Republic,[92] in which it stated, through
Justice Adolfo Azcuna, viz.:

x x x Petitioners furthermore insist that a particular land need not be formally released by an act of the
Executive before it can be deemed open to private ownership, citing the cases of Ramos v. Director of
Lands and Ankron v. Government of the Philippine Islands.
xxxx
Petitioners reliance upon Ramos v. Director of Lands and Ankron v. Government is misplaced. These cases
were decided under the Philippine Bill of 1902 and the first Public Land Act No. 926 enacted by the
Philippine Commission on October 7, 1926, under which there was no legal provision vesting in the Chief
Executive or President of the Philippines the power to classify lands of the public domain into mineral,
timber and agricultural so that the courts then were free to make corresponding classifications in
justiciable cases, or were vested with implicit power to do so, depending upon the preponderance of the
evidence.[93]
To aid the courts in resolving land registration cases under Act No. 926, it was then necessary to devise a
presumption on land classification. Thus evolved the dictum in Ankron that the courts have a right to
presume, in the absence of evidence to the contrary, that in each case the lands are agricultural lands
until the contrary is shown.[94]

But We cannot unduly expand the presumption in Ankron and De Aldecoa to an argument that all lands of
the public domain had been automatically reclassified as disposable and alienable agricultural lands. By no
stretch of imagination did the presumption convert all lands of the public domain into agricultural lands.
If We accept the position of private claimants, the Philippine Bill of 1902 and Act No. 926 would have
automatically made all lands in the Philippines, except those already classified as timber or mineral land,
alienable and disposable lands. That would take these lands out of State ownership and worse, would be
utterly inconsistent with and totally repugnant to the long-entrenched Regalian doctrine.
The presumption in Ankron and De Aldecoa attaches only to land registration cases brought under the
provisions of Act No. 926, or more specifically those cases dealing with judicial and administrative
confirmation of imperfect titles. The presumption applies to an applicant for judicial or administrative
conformation of imperfect title under Act No. 926. It certainly cannot apply to landowners, such as private
claimants or their predecessors-in-interest, who failed to avail themselves of the benefits of Act No. 926. As
to them, their land remained unclassified and, by virtue of the Regalian doctrine, continued to be owned by
the State.
In any case, the assumption in Ankron and De Aldecoa was not absolute. Land classification was, in the
end, dependent on proof. If there was proof that the land was better suited for non-agricultural uses, the
courts could adjudge it as a mineral or timber land despite the presumption. In Ankron, this Court stated:
In the case of Jocson vs. Director of Forestry (supra), the Attorney-General admitted in effect that whether
the particular land in question belongs to one class or another is a question of fact. The mere fact that a
tract of land has trees upon it or has mineral within it is not of itself sufficient to declare that one is forestry
land and the other, mineral land. There must be some proof of the extent and present or future value of
the forestry and of the minerals. While, as we have just said, many definitions have been given for
agriculture, forestry, and mineral lands, and that in each case it is a question of fact, we think it is safe to
say that in order to be forestry or mineral land the proof must show that it is more valuable for the forestry
or the mineral which it contains than it is for agricultural purposes. (Sec. 7, Act No. 1148.) It is not
sufficient to show that there exists some trees upon the land or that it bears some mineral. Land may be
classified as forestry or mineral today, and, by reason of the exhaustion of the timber or mineral, be
classified as agricultural land tomorrow. And vice-versa, by reason of the rapid growth of timber or the
discovery of valuable minerals, lands classified as agricultural today may be differently classified
tomorrow. Each case must be decided upon the proof in that particular case, having regard for
its present or future value for one or the other purposes. We believe, however, considering the fact
that it is a matter of public knowledge that a majority of the lands in the Philippine Islands are agricultural

lands that the courts have a right to presume, in the absence of evidence to the contrary, that in each
case the lands are agricultural lands until the contrary is shown. Whatever the land involved in a
particular land registration case is forestry or mineral land must, therefore, be a matter of
proof. Its superior value for one purpose or the other is a question of fact to be settled by the
proof in each particular case. The fact that the land is a manglar [mangrove swamp] is not sufficient for
the courts to decide whether it is agricultural, forestry, or mineral land. It may perchance belong to one or
the other of said classes of land. The Government, in the first instance, under the provisions of Act No.
1148, may, by reservation, decide for itself what portions of public land shall be considered forestry land,
unless private interests have intervened before such reservation is made. In the latter case, whether the
land is agricultural, forestry, or mineral, is a question of proof. Until private interests have intervened, the
Government, by virtue of the terms of said Act (No. 1148), may decide for itself what portions of the public
domain shall be set aside and reserved as forestry or mineral land. (Ramos vs. Director of Lands, 39 Phil.
175; Jocson vs. Director of Forestry, supra)[95] (Emphasis ours)
Since 1919, courts were no longer free to determine the classification of lands from the facts of each case,
except those that have already became private lands.[96] Act No. 2874, promulgated in 1919 and
reproduced in Section 6 of CA No. 141, gave the Executive Department, through the President,
the exclusive prerogative to classify or reclassify public lands into alienable or disposable, mineral or
forest.96-a Since then, courts no longer had the authority, whether express or implied, to determine the
classification of lands of the public domain. [97]
Here, private claimants, unlike the Heirs of Ciriaco Tirol who were issued their title in 1933, [98] did not
present a justiciable case for determination by the land registration court of the propertys land
classification. Simply put, there was no opportunity for the courts then to resolve if the land the Boracay
occupants are now claiming were agricultural lands. When Act No. 926 was supplanted by Act No. 2874 in
1919, without an application for judicial confirmation having been filed by private claimants or their
predecessors-in-interest, the courts were no longer authorized to determine the propertys land
classification. Hence, private claimants cannot bank on Act No. 926.
We note that the RTC decision[99] in G.R. No. 167707 mentioned Krivenko v. Register of Deeds of Manila,
[100]
which was decided in 1947 when CA No. 141, vesting the Executive with the sole power to classify
lands of the public domain was already in effect. Krivenko cited the old cases Mapa v. Insular Government,
[101]
De Aldecoa v. The Insular Government,[102] and Ankron v. Government of the Philippine Islands.[103]
Krivenko, however, is not controlling here because it involved a totally different issue. The pertinent issue
in Krivenko was whether residential lots were included in the general classification of agricultural lands;
and if so, whether an alien could acquire a residential lot. This Court ruled that as an alien, Krivenko was
prohibited by the 1935 Constitution[104] from acquiring agricultural land, which included residential
lots. Here, the issue is whether unclassified lands of the public domain are automatically deemed
agricultural.

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

Act No. 926, the first Public Land Act, was passed in pursuance of the provisions of the Philippine Bill of
1902. The law governed the disposition of lands of the public domain. It prescribed rules and regulations
for the homesteading, selling and leasing of portions of the public domain of the Philippine Islands, and
prescribed the terms and conditions to enable persons to perfect their titles to public lands in the Islands.
It also provided for the issuance of patents to certain native settlers upon public lands, for the
establishment of town sites and sale of lots therein, for the completion of imperfect titles, and for the
cancellation or confirmation of Spanish concessions and grants in the Islands. In short, the Public Land Act
operated on the assumption that title to public lands in the Philippine Islands remained in the government;
and that the governments title to public land sprung from the Treaty of Paris and other subsequent
treaties between Spain and the United States. The term public land referred to all lands of the public
domain whose title still remained in the government and are thrown open to private appropriation and
settlement, and excluded the patrimonial property of the government and the friar lands.
Thus, it is plain error for petitioners to argue that under the Philippine Bill of 1902
and Public Land Act No. 926, mere possession by private individuals of lands creates the legal
presumption that the lands are alienable and disposable.[108] (Emphasis Ours)
Except for lands already covered by existing titles, Boracay was an unclassified land of the
public domain prior to Proclamation No. 1064. Such unclassified lands are considered public
forest under PD No. 705. The DENR[109] and the National Mapping and Resource Information
Authority[110] certify that Boracay Island is an unclassified land of the public domain.
PD No. 705 issued by President Marcos categorized all unclassified lands of the public domain as public
forest. Section 3(a) of PD No. 705 defines a public forest as a mass of lands of the public domain which has
not been the subject of the present system of classification for the determination of which lands are
needed for forest purpose and which are not. Applying PD No. 705, all unclassified lands, including those
in Boracay Island, are ipso facto considered public forests. PD No. 705, however, respects titles already
existing prior to its effectivity.
The Court notes that the classification of Boracay as a forest land under PD No. 705 may seem to be out of
touch with the present realities in the island. Boracay, no doubt, has been partly stripped of its forest cover
to pave the way for commercial developments. As a premier tourist destination for local and foreign
tourists, Boracay appears more of a commercial island resort, rather than a forest land.
Nevertheless, that the occupants of Boracay have built multi-million peso beach resorts on the island;
[111]
that the island has already been stripped of its forest cover; or that the implementation of Proclamation
No. 1064 will destroy the islands tourism industry, do not negate its character as public forest.
Forests, in the context of both the Public Land Act and the Constitution [112] classifying lands of the public
domain into agricultural, forest or timber, mineral lands, and national parks, do not necessarily refer to
large tracts of wooded land or expanses covered by dense growths of trees and underbrushes. [113] The
discussion in Heirs of Amunategui v. Director of Forestry[114] is particularly instructive:
A forested area classified as forest land of the public domain does not lose such classification simply
because loggers or settlers may have stripped it of its forest cover. Parcels of land classified as forest land
may actually be covered with grass or planted to crops bykaingin cultivators or other farmers. Forest lands
do not have to be on mountains or in out of the way places. Swampy areas covered by mangrove trees,
nipa palms, and other trees growing in brackish or sea water may also be classified as forest land. The
classification is descriptive of its legal nature or status and does not have to be descriptive of
what the land actually looks like. Unless and until the land classified as forest is released in an official
proclamation to that effect so that it may form part of the disposable agricultural lands of the public
domain, the rules on confirmation of imperfect title do not apply. [115] (Emphasis supplied)
There is a big difference between forest as defined in a dictionary and forest or timber land as a
classification of lands of the public domain as appearing in our statutes. One is descriptive of what appears
on the land while the other is a legal status, a classification for legal purposes. [116] At any rate, the Court is
tasked to determine the legal status of Boracay Island, and not look into its physical layout. Hence, even if

its forest cover has been replaced by beach resorts, restaurants and other commercial establishments, it
has not been automatically converted from public forest to alienable agricultural land.
Private claimants cannot rely on Proclamation No. 1801 as basis for judicial confirmation of
imperfect title. The proclamation did not convert Boracay into an agricultural land. However,
private claimants argue that Proclamation No. 1801 issued by then President Marcos in 1978 entitles them
to judicial confirmation of imperfect title. The Proclamation classified Boracay, among other islands, as a
tourist zone. Private claimants assert that, as a tourist spot, the island is susceptible of private ownership.
Proclamation No. 1801 or PTA Circular No. 3-82 did not convert the whole of Boracay into an agricultural
land. There is nothing in the law or the Circular which made Boracay Island an agricultural land. The
reference in Circular No. 3-82 to private lands [117] and areas declared as alienable and disposable[118] does
not by itself classify the entire island as agricultural. Notably, Circular No. 3-82 makes reference not only to
private lands and areas but also to public forested lands. Rule VIII, Section 3 provides:
No trees in forested private lands may be cut without prior authority from the PTA. All forested areas
in public lands are declared forest reserves. (Emphasis supplied)
Clearly, the reference in the Circular to both private and public lands merely recognizes that the island can
be classified by the Executive department pursuant to its powers under CA No. 141. In fact, Section 5 of
the Circular recognizes the then Bureau of Forest Developments authority to declare areas in the island as
alienable and disposable when it provides:
Subsistence farming, in areas declared as alienable and disposable by the Bureau of Forest Development.
Therefore, Proclamation No. 1801 cannot be deemed the positive act needed to classify Boracay Island as
alienable and disposable land. If President Marcos intended to classify the island as alienable and
disposable or forest, or both, he would have identified the specific limits of each, as President Arroyo did in
Proclamation No. 1064. This was not done in Proclamation No. 1801.
The Whereas clauses of Proclamation No. 1801 also explain the rationale behind the declaration of Boracay
Island, together with other islands, caves and peninsulas in the Philippines, as a tourist zone and marine
reserve to be administered by thePTA to ensure the concentrated efforts of the public and private sectors
in the development of the areas tourism potential with due regard for ecological balance in the marine
environment. Simply put, the proclamation is aimed at administering the islands for tourism and
ecological purposes. It does not address the areas alienability.[119]
More importantly, Proclamation No. 1801 covers not only Boracay Island, but sixty-four (64) other islands,
coves, and peninsulas in the Philippines, such as Fortune and Verde Islands in Batangas, Port Galera in
Oriental Mindoro, Panglao and Balicasag Islands in Bohol, Coron Island, Puerto Princesa and surrounding
areas in Palawan, Camiguin Island in Cagayan de Oro, and Misamis Oriental, to name a few. If the
designation of Boracay Island as tourist zone makes it alienable and disposable by virtue of Proclamation
No. 1801, all the other areas mentioned would likewise be declared wide open for private disposition. That
could not have been, and is clearly beyond, the intent of the proclamation.
It was Proclamation No. 1064 of 2006 which positively declared part of Boracay as alienable
and opened the same to private ownership. Sections 6 and 7 of CA No. 141[120] provide that it is only
the President, upon the recommendation of the proper department head, who has the authority to classify
the lands of the public domain into alienable or disposable, timber and mineral lands. [121]
In issuing Proclamation No. 1064, President Gloria Macapagal-Arroyo merely exercised the authority
granted to her to classify lands of the public domain, presumably subject to existing vested
rights. Classification of public lands is the exclusive prerogative of the Executive Department, through the
Office of the President. Courts have no authority to do so.[122] Absent such classification, the land remains
unclassified until released and rendered open to disposition. [123]

Proclamation No. 1064 classifies Boracay into 400 hectares of reserved forest land and 628.96 hectares of
agricultural land. The Proclamation likewise provides for a 15-meter buffer zone on each side of the center
line of roads and trails, which are reserved for right of way and which shall form part of the area reserved
for forest land protection purposes.
Contrary to private claimants argument, there was nothing invalid or irregular, much less unconstitutional,
about the classification of Boracay Island made by the President through Proclamation No. 1064. It was
within her authority to make such classification, subject to existing vested rights.
Proclamation No. 1064 does not violate the Comprehensive Agrarian Reform Law. Private
claimants further assert that Proclamation No. 1064 violates the provision of the Comprehensive Agrarian
Reform Law (CARL) or RA No. 6657 barring conversion of public forests into agricultural lands. They claim
that since Boracay is a public forest under PD No. 705, President Arroyo can no longer convert it into an
agricultural land without running afoul of Section 4(a) of RA No. 6657, thus:
SEC. 4. Scope. The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of tenurial
arrangement and commodity produced, all public and private agricultural lands as provided in
Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain suitable for
agriculture.
More specifically, the following lands are covered by the Comprehensive Agrarian Reform Program:
(a) All alienable and disposable lands of the public domain devoted to or suitable for
agriculture. No reclassification of forest or mineral lands to agricultural lands shall be undertaken after
the approval of this Act until Congress, taking into account ecological, developmental and equity
considerations, shall have determined by law, the specific limits of the public domain.
That Boracay Island was classified as a public forest under PD No. 705 did not bar the Executive from later
converting it into agricultural land. Boracay Island still remained an unclassified land of the public domain
despite PD No. 705.
In Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols v. Republic,[124] the Court stated that
unclassified lands are public forests.

While it is true that the land classification map does not categorically state that the islands
are public forests, the fact that they were unclassified lands leads to the same result. In the
absence of the classification as mineral or timber land, the land remains unclassified land until released
and rendered open to disposition.[125] (Emphasis supplied)
Moreover, the prohibition under the CARL applies only to a reclassification of land. If the land had never
been previously classified, as in the case of Boracay, there can be no prohibited reclassification under the
agrarian law. We agree with the opinion of the Department of Justice[126] on this point:
Indeed, the key word to the correct application of the prohibition in Section 4(a) is the word
reclassification. Where there has been no previous classification of public forest [referring, we repeat, to
the mass of the public domain which has not been the subject of the present system of classification for
purposes of determining which are needed for forest purposes and which are not] into permanent forest or
forest reserves or some other forest uses under the Revised Forestry Code, there can be no reclassification
of forest lands to speak of within the meaning of Section 4(a).
Thus, obviously, the prohibition in Section 4(a) of the CARL against the reclassification of forest lands to
agricultural lands without a prior law delimiting the limits of the public domain, does not, and cannot, apply
to those lands of the public domain, denominated as public forest under the Revised Forestry Code, which
have not been previously determined, or classified, as needed for forest purposes in accordance with the
provisions of the Revised Forestry Code.[127]

Private claimants are not entitled to apply for judicial confirmation of imperfect title under CA
No. 141. Neither do they have vested rights over the occupied lands under the said law. There
are two requisites for judicial confirmation of imperfect or incomplete title under CA No. 141, namely: (1)
open, continuous, exclusive, and notorious possession and occupation of the subject land by himself or
through his predecessors-in-interest under a bona fide claim of ownership since time immemorial or
from June 12, 1945; and (2) the classification of the land as alienable and disposable land of the public
domain.[128]
As discussed, the Philippine Bill of 1902, Act No. 926, and Proclamation No. 1801 did not convert portions
of Boracay Island into an agricultural land. The island remained an unclassified land of the public domain
and, applying the Regalian doctrine, is considered State property.
Private claimants bid for judicial confirmation of imperfect title, relying on the Philippine Bill of 1902, Act
No. 926, and Proclamation No. 1801, must fail because of the absence of the second element of alienable
and disposable land. Their entitlement to a government grant under our present Public Land Act
presupposes that the land possessed and applied for is already alienable and disposable. This is clear from
the wording of the law itself.[129] Where the land is not alienable and disposable, possession of the land, no
matter how long, cannot confer ownership or possessory rights.[130]
Neither may private claimants apply for judicial confirmation of imperfect title under Proclamation No.
1064, with respect to those lands which were classified as agricultural lands. Private claimants failed to
prove the first element of open, continuous, exclusive, and notorious possession of their lands in Boracay
since June 12, 1945.
We cannot sustain the CA and RTC conclusion in the petition for declaratory relief that private claimants
complied with the requisite period of possession.
The tax declarations in the name of private claimants are insufficient to prove the first element of
possession. We note that the earliest of the tax declarations in the name of private claimants were issued
in 1993. Being of recent dates, the tax declarations are not sufficient to convince this Court that the period
of possession and occupation commenced on June 12, 1945.
Private claimants insist that they have a vested right in Boracay, having been in possession of the island
for a long time. They have invested millions of pesos in developing the island into a tourist spot. They say
their continued possession and investments give them a vested right which cannot be unilaterally
rescinded by Proclamation No. 1064.
The continued possession and considerable investment of private claimants do not automatically give
them a vested right in Boracay. Nor do these give them a right to apply for a title to the land they are
presently occupying. This Court is constitutionally bound to decide cases based on the evidence presented
and the laws applicable. As the law and jurisprudence stand, private claimants are ineligible to apply for a
judicial confirmation of title over their occupied portions in Boracay even with their continued possession
and considerable investment in the island.
One Last Note
The Court is aware that millions of pesos have been invested for the development of Boracay Island,
making it a by-word in the local and international tourism industry. The Court also notes that for a number
of years, thousands of people have called the island their home. While the Court commiserates with
private claimants plight, We are bound to apply the law strictly and judiciously. This is the law and it should
prevail. Ito ang batas at ito ang dapat umiral.
All is not lost, however, for private claimants. While they may not be eligible to apply for judicial
confirmation of imperfect title under Section 48(b) of CA No. 141, as amended, this does not denote their
automatic ouster from the residential, commercial, and other areas they possess now classified as
agricultural. Neither will this mean the loss of their substantial investments on their occupied alienable
lands. Lack of title does not necessarily mean lack of right to possess.
For one thing, those with lawful possession may claim good faith as builders of improvements. They can
take steps to preserve or protect their possession. For another, they may look into other modes of applying
for original registration of title, such as by homestead[131] or sales patent,[132] subject to the conditions
imposed by law.

More realistically, Congress may enact a law to entitle private claimants to acquire title to their occupied
lots or to exempt them from certain requirements under the present land laws. There is one such
bill[133] now pending in the House of Representatives. Whether that bill or a similar bill will become a law is
for Congress to decide.
In issuing Proclamation No. 1064, the government has taken the step necessary to open up the island to
private ownership. This gesture may not be sufficient to appease some sectors which view the
classification of the island partially into a forest reserve as absurd. That the island is no longer overrun by
trees, however, does not becloud the vision to protect its remaining forest cover and to strike a healthy
balance between progress and ecology. Ecological conservation is as important as economic progress.
To be sure, forest lands are fundamental to our nations survival. Their promotion and protection are not
just fancy rhetoric for politicians and activists. These are needs that become more urgent as destruction of
our environment gets prevalent and difficult to control. As aptly observed by Justice Conrado Sanchez in
1968 in Director of Forestry v. Munoz:[134]
The view this Court takes of the cases at bar is but in adherence to public policy that should be followed
with respect to forest lands. Many have written much, and many more have spoken, and quite often, about
the pressing need for forest preservation, conservation, protection, development and reforestation. Not
without justification. For, forests constitute a vital segment of any country's natural resources. It is of
common knowledge by now that absence of the necessary green cover on our lands produces a number of
adverse or ill effects of serious proportions. Without the trees, watersheds dry up; rivers and lakes which
they supply are emptied of their contents. The fish disappear. Denuded areas become dust bowls. As
waterfalls cease to function, so will hydroelectric plants. With the rains, the fertile topsoil is washed away;
geological erosion results. With erosion come the dreaded floods that wreak havoc and destruction to
property crops, livestock, houses, and highways not to mention precious human lives. Indeed, the
foregoing observations should be written down in a lumbermans decalogue. [135]
WHEREFORE, judgment is rendered as follows:
1. The petition for certiorari in G.R. No. 167707 is GRANTED and the Court of Appeals Decision in CA-G.R.
CV No. 71118 REVERSED AND SET ASIDE.
2. The petition for certiorari in G.R. No. 173775 is DISMISSED for lack of merit.
FACTS:
This petition is for a review on certiorari of the decision of the Court of Appeals (CA) affirming that of the
Regional Trial Court (RTC) in Kalibo Aklan, which granted the petition for declaratory relief filed by
respondents-claimants Mayor Jose Yap et al, and ordered the survey of Boracay for titling purposes.
On Nov. 10, 1978, President Marcos issued Proclamation No. 1801 declaring Boracay Island as a tourist
zone and marine reserve. Claiming that Proc. No. 1801 precluded them from filing an application for a
judicial confirmation of imperfect title or survey of land for titling purposes, respondents-claimants filed a
petition for declaratory relief with the RTC in Kalibo, Aklan.
The Republic, through the Office of the Solicitor General (OSG) opposed the petition countering that
Boracay Island was an unclassified land of the public domain. It formed part of the mass of lands classified
as public forest, which was not available for disposition pursuant to section 3(a) of PD No. 705 or the
Revised Forestry Code.
ISSUE:
Whether unclassified lands of the public domain are automatically deemed agricultural land, therefore
making these lands alienable.
HELD:
No. To prove that the land subject of an application for registration is alienable, the applicant must
establish the existence of a positive act of the government such as a presidential proclamation or an
executive order, an administrative action, investigative reports of the Bureau of Lands investigators, and a
legislative act or statute.
A positive act declaring land as alienable and disposable is required. In keeping with the presumption of
state ownership, the Court has time and again emphasized that there must be a positive act of the

government, such as an official proclamation, declassifying inalienable public land into disposable land for
agricultural or other purposes.
The Regalian Doctrine dictates that all lands of the public domain belong to the State, that the State is the
source of any asserted right to ownership of land and charged with the conservation of such patrimony.
All lands not otherwise appearing to be clearly within private ownership are presumed to belong to the
State. Thus, all lands that have not been acquired from the government, either by purchase or by grant,
belong to the State as part of the inalienable public domain.

NELSIE B. CAETE, RONA ANAS, MILAGROSA APUAN, ERLINDA AQUINO, GODOFREDO AQUINO, CORITA BARREDO,
TESSIE BARREDO, JESUS BATRINA, ALBERTO BUENAVENTURA, BONIFACIO BUENAVENTURA, EUSEBIO CAPIRAL, MARIO
CAPIRAL, LOLITA CAPIRAL, ELENA CAPIRAL, LETICIA CAPIRAL, RENATO CAPIRAL, ELY CABANGON, ERWIN CATALUNA,
JESSIE CONRADO, JOEL CONRADO, NARCISIO CONRADO, RICARDO CALAMPIANO, ALUMNIO CORSANES, NILO COLATOY,
MARJETO DAYAN, HENRY DIAZ, SALVACION ESMANDE, REYNALDO FUENTEBELLA, GERRY GEQUILLANA, DELSIE GARCIA,
NERISSA GONZALES, VISITACION JUNSAY, ESTELA JOVEN, JOSE LANZUELA, MARLON MALANGAYON, RENATO MARCELO,
ANITA MARZONIA, MARCELINO MONTALBO, AMADO MULI, JR., LEONITA MULI, EDUARDO OLVIDO, ALMARIO PACON,
ASUNCION PACON, SALVACION PAGAYUNAN, ESTER PANTALEON, SHERLITA RABE, ANITA REYES, MEDELYN RIOS,
BERTITO RIVAS, ENGRACIA RIVERA, GERALYN RIVERA, ARMANDO RIVERA, MA. MERCY SHERVA, ALEXANDER SANGALAN,
ERNESTO SANTIAGO, JOY SANTIAGO, ELENA TALION, JOE RANDY TRESVALLES, ELIAS VALENZUELA, GERRY VALENZUELA,
LILIBETH VALENZUELA, JOSEPHINE VICTORINO, JOJO VICTORINO, MAXIMINO VICTORINO, NOEL VICTORINO, REYNANTE
VICTORINO, ROBERTO VICTORINO and JOVITO VILLAREAL, represented by NELSIE B. CAETE, petitioners,
vs.
GENUINO ICE COMPANY, INC., respondent.
DECISION
YNARES-SANTIAGO, J.:

This petition for review on certiorari seeks to set aside the Decision1 of the Court of Appeals dated January
9, 2002 in CA-G.R. SP No. 64337 entitled "Genuino Ice Company, Inc. vs. Hon. Victorino P. Evangelista,
Nelsie B. Caete, et al.," and its Resolution2 dated June 26, 2002, dismissing petitioners "Second Amended
Complaint" in Civil Case No. Q-99-36483 filed in Branch 223 of the Regional Trial Court of Quezon City.
Records show that on January 11, 1999, petitioners filed a complaint for cancellation of title to property
covered by Transfer Certificate of Title (TCT) Nos. N-140441; 3 14399;4 RT-94384 (292245);5 RT-94794
(292246);6 and 292247.7 Petitioners alleged that said titles are spurious, fictitious and were issued "under
mysterious circumstances," considering that the holders thereof including their predecessors-in-interest
were never in actual, adverse and physical possession of the property, rendering them ineligible to acquire
title to the said property under the Friar Lands Act. 8 Petitioners also sought to nullify Original Certificate of
Title (OCT) No. 614 from which the foregoing titles sought to be cancelled originated or were derived.
Respondent Genuino Ice Co., Inc. filed a motion to dismiss 9 on the ground that the complaint states no
cause of action because petitioners are not real parties-in-interest; that no relief may be granted as a
matter of law; and that petitioners failed to exhaust administrative remedies, but it was denied by the trial
court. Respondent moved for reconsideration but the same was denied.
On November 4, 1999, petitioners filed a "Second Amended Complaint" 10 which sought to annul, in
addition to the titles already alleged in the original complaint, TCT Nos. 274095 and 274096; 11 274097 and
274098;12 and 274099.13
The Second Amended Complaint alleged the following causes of action, as well as the remedy sought to be
obtained, thus:
4. That plaintiffs (petitioners) and their predecessors-in-interest are among those who have been in actual,
adverse, peaceful and continuous possession in concept of owners of unregistered parcels of land situated
at Sitio Mabilog, Barangay Culiat, Quezon City, Metro Manila, which parcels of land are more particularly
described as follows:
(1) "A parcel of unregistered land known as Lot 668, situated at Barangay Culiat, Quezon City x x x."
(2) "A parcel of unregistered land known as Lot 669, situated at Barangay Culiat, Quezon City x x x."

5. That the above-described real property is a portion of a friar land known as "Piedad Estate," which
property is intended for distribution among the bona fide occupants thereof pursuant to the Friar Lands
Act.
6. That transfer certificates of title allegedly having originated or derived from Original Certificate of Title
No. 614 were issued by the Register of Deeds of Quezon City, which transfer certificates of title are in truth
and in fact fictitious, spurious and null and void, for the following reasons: (a) that no record of any agency
of the government shows as to how and in what manner was OCT 614 issued; (b) that no record of any
proceedings whatsoever, whether judicial or administrative, can support defendants claim that the abovedescribed property originated from OCT 614; and (c) that the transfer certificates of title over the abovedescribed property were issued under mysterious circumstances for the above-named defendants and
their so-called predecessors-in-interest never had any actual, adverse, physical possession of the said
property, thus, not allowed to acquire title over the property in litigation pursuant to the Friar Lands Act.
7. That defendants are holders of transfer certificates of title of the above-described property, which
transfer certificates of title are null and void, for reasons specifically mentioned in Paragraph 6 hereof x x
x;
8. That the acts in acquiring and keeping the said transfer certificates of title in violation of the Friar Lands
Act and other existing laws are prejudicial to plaintiffs rights over the above-described property.
9. That equity demands that defendants transfer certificates of title as specified in Paragraph 7 hereof be
declared fictitious, spurious and null and void ab initio.
PRAYER
WHEREFORE, premises considered, it is most respectfully prayed of this Honorable Court that judgment be
rendered in favor of plaintiffs and against defendants:
(1) Declaring as null and void ab initio OCT 614 and all transfer certificates of title derived therefrom;
(2) Declaring as null and void defendants transfer certificates of title over the property in litigation;
(3) Ordering defendant Register of Deeds of Quezon City to cancel defendants transfer certificates of title
and all transfer certificates of title derived therefrom;
(4) Declaring the plaintiffs as bona fide occupants of the property in litigation pursuant to the provisions of
the Friar Lands Act and other existing laws.14
Respondent moved to dismiss the Second Amended Complaint on the following grounds:
a) The complaint states no cause of action because: (1) on the allegations alone, plaintiffs (petitioners) are
not real parties in interest who may bring suit to cancel defendants (including respondent) titles; (2) based
on the allegations and prayer of the complaint, no relief, as a matter of law, may be granted;
b) Prescription has set in;
c) There are earlier similar complaints (Civil Case Nos. Q-95-22834 and Q-95-23111) filed by a different set
of plaintiffs against a different set of defendants but which involve the same subject matter, cause of
action and allegations of the plaintiffs, with respect to the cancellation of OCT 614 and succeeding titles
derived from it. Said complaints have since been dismissed by Branch 93 of the Regional Trial Court of
Quezon City, the dismissal of which is the subject of a pending certiorari proceeding in the appellate
court.15
On January 3, 2001,16 the trial court denied respondents motion to dismiss the Second Amended
Complaint. Its motion for reconsideration was likewise denied hence respondent filed a petition for
certiorari with the Court of Appeals.
The appellate court granted respondents petition for certiorari and dismissed petitioners Second
Amended Complaint for failure to state a cause of action. Hence, the instant petition raising the following
issues:
A. THAT THE COURT OF APPEALS ERRED IN DECLARING THAT THE COMPLAINT FILED BY THE PETITIONERS
WITH THE REGIONAL TRIAL COURT OF QUEZON CITY IN CIVIL CASE NO. Q-99-36483 DOES NOT STATE A
VALID CAUSE OF ACTION;
B. THAT THE COURT OF APPEALS ERRED IN DECLARING THAT THE PETITIONERS ARE NOT REAL PARTIES IN
INTEREST;
C. THAT THE COURT OF APPEALS ERRED IN APPLYING THE DOCTRINE OF "EXHAUSTION OF ADMINISTRATIVE
REMEDIES"; and,
D. THAT THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION AND DENIED PETITIONERS
RIGHT TO DUE PROCESS WHEN IT DISMISSED THEIR COMPLAINT.17
We deny the petition.
The subject lots are part of the Piedad Estate, Quezon City, a Friar Land acquired on December 23, 1903 by
the Philippine Government from the Philippine Sugar Estates Development Company, Ltd., La Sociedad

Agricola de Ultramar, the British-Manila Estate Company, Ltd., and the Recoleto Order of the Philippine
Islands, as indicated in Public Act No. 1120 (Friar Lands Act) enacted on April 26, 1904. 18
After the Piedad Estate was registered in OCT No. 614 in the name of the Philippine Government in 1910
under the provisions of Act 496, the area was subdivided originally into 874 lots. As a result of subsequent
surveys executed in the course of disposition, the number of lots increased to 1,305. Disposition of these
lots was made by the Bureau of Lands thru sales, under the Friar Lands Act, as early as 1910 and records
show that even before the Second World War, all lots in the Piedad Estate have been disposed of. 19 The
Piedad Estate has long been segregated from the mass of the public domain and has become private land
duly registered under the Torrens system following the procedure for the confirmation of private lands
prescribed in Act 496. Thus the lands inside the Piedad Estate are no longer lands of the public domain. 20
One who acquires land under the Friar Lands Act, as well as his successors-in-interest, may not claim
successional rights to purchase by reason of occupation from time immemorial, as this contravenes the
historical fact that friar lands were bought by the Government of the Philippine Islands, pursuant to an Act
of Congress of the United States, approved on July 1, 1902, not from individual persons but from certain
companies, a society and a religious order. Under the Friar Lands Act, only "actual settlers and occupants
at the time said lands are acquired by the Government" were given preference to lease, purchase, or
acquire their holdings, in disregard of the settlement and occupation of persons before the government
acquired the lands. 21
The basic rules of proper pleading and procedure require that every pleading shall contain in a methodical
and logical form, a plain, concise and direct statement of the ultimate facts on which the party pleading
relies for his claim or defense, as the case may be, omitting the statement of mere evidentiary facts. 22 And
in all averments of fraud or mistake, the circumstances constituting fraud or mistake must be stated with
particularity.23
It is axiomatic that the averments of the complaint determine the nature of the action, and consequently,
the jurisdiction of the courts. This is because the complaint must contain a concise statement of the
ultimate facts constituting the plaintiff's cause of action and must specify the relief sought. No rule is
better established than that which requires the complaint to contain a statement of all the facts
constituting the plaintiff's cause of action. Additionally, Section 5, Rule 8 of the Rules of Court provides that
in all averments of fraud or mistake, the circumstances constituting fraud or mistake must be stated with
particularity. In the case at bar, while there are allegations of fraud in the above quoted complaints, the
same are not particular enough to bring the controversy within the SEC's jurisdiction. The said allegations
are not statements of ultimate facts but are mere conclusions of law.
A pleading should state the ultimate facts essential to the rights of action or defense asserted, as
distinguished from mere conclusions of fact, or conclusions of law. General allegations that a contract is
valid or legal, or is just, fair and reasonable, are mere conclusions of law. Likewise, allegations that a
contract is void, voidable, invalid, illegal, ultra vires, or against public policy, without stating facts showing
its invalidity, are mere conclusions of law.24
"Ultimate facts" means the essential facts constituting the plaintiff's cause of action, or such facts as are
so essential that they cannot be stricken out without leaving the statement of the cause of action
inadequate.25"Cause of action" has been defined as an act or omission of one party in violation of the legal
right or rights of the other;26 and its essential elements are: 1) a right in favor of the plaintiff by whatever
means and under whatever law it arises or is created; 2) an obligation on the part of the named defendant
to respect or not to violate such right; and 3) an act or omission on the part of the named defendant
violative of the right of the plaintiff or constituting a breach of the obligation of defendant to the plaintiff
for which the latter may maintain an action for recovery of damages. If these elements are not extant, the
complaint becomes vulnerable to a motion to dismiss on the ground of failure to state a cause of
action.27 In the resolution of a motion to dismiss based on failure to state a cause of action, only the facts
alleged in the complaint as well as its annexes must be considered. 28 The test in such case is whether a
court can render a valid judgment on the complaint based upon the facts alleged and pursuant to the
prayer therein.29
Corollarily, the question of whether or not a complaint states a cause of action against a defendant or the
action is premature is one of law. The trial court can consider all the pleadings filed, including annexes,
motions and the evidence on record. However in so doing, the trial court does not rule on the truth or
falsity of such documents. It merely includes such documents in the hypothetical admission. Any review of
a finding of lack of cause of action based on these documents would not involve a calibration of the
probative value of such pieces of evidence but would only limit itself to the inquiry of whether the law was

properly applied given the facts and these supporting documents. Therefore, what would inevitably arise
from such a review are pure questions of law, and not questions of fact.
The trial court must likewise apply relevant statutes and jurisprudence in determining whether the
allegations in a complaint establish a cause of action. While it focuses on the complaint, a court clearly
cannot disregard decisions material to the proper appreciation of the questions before it. In resolving a
motion to dismiss, every court must take cognizance of decisions this Court has rendered because they are
proper subjects of mandatory judicial notice. The said decisions, more importantly, form part of the legal
system, and failure of any court to apply them shall constitute an abdication of its duty to resolve a dispute
in accordance with law, and shall be a ground for administrative action against an inferior court
magistrate.30
Considering the foregoing, it is not difficult to see the need for particularity and incipient substantiation in
the petitioners Second Amended Complaint.
First, their initial claim that OCT 614 of which all the other subject titles are derivatives is null and void,
has been proven wrong. As has been held in Pinlac and other cases, OCT 614 did legally exist and was
previously issued in the name of the Philippine Government in 1910 under the provisions of Act 496.
Second, the Ad Hoc Committee of the then Ministry of Natural Resources, which was specifically tasked to
investigate the historical background of the Piedad Estate, found that as early as the period prior to the
Second World War, all lots in the Piedad Estate had already been disposed of.
Third, the Piedad Estate has been placed under the Torrens system of land registration, which means that
all lots therein are titled.
Fourth, as held in the Balicudiong case, one who acquires land under the Friar Lands Act, as well as his
successors-in-interest, may not claim successional rights to purchase by reason of occupation from time
immemorial, which means that petitioners claimed actual, adverse, peaceful and continuous possession of
the subject property is really of no moment unless it is shown that their predecessors-in-interest were
actual settlers and occupants at the time said lands were acquired by the Government, and whose rights
were not disregarded even though they were in occupation of the same before the government acquired
the land; yet, no period of time in relation to adverse possession is alleged.
Petitioners Second Amended Complaint betrays no more than an incomplete narration of facts
unsupported by documentary or other exhibits; the allegations therein partake of conclusions of law
unsupported by a particular averment of circumstances that will show why or how such inferences or
conclusions were arrived at. It is replete with sweeping generalizations and inferences derived from facts
that are not found therein. While there are allegations of fraud upon the claim that the subject titles were
fictitious, spurious and obtained under "mysterious circumstances," the same are not specific to bring the
controversy within the trial courts jurisdiction. There is no explanation or narration of facts as would show
why said titles are claimed to be fictitious or spurious, contrary to the requirement of the Rules that the
circumstances constituting fraud must be stated with particularity; otherwise, the allegation of fraud would
simply be an unfounded conclusion of law. In the absence of specific averments, the complaint is defective,
for it presents no basis upon which the court should act, or for the defendant to meet it with an intelligent
answer.
As to the second issue raised, petitioners claim that they are bona fide occupants of the subject property
within the contemplation of the Friar Lands Act, having allegedly been in actual, adverse, peaceful and
continuous possession of the property, although it is not stated for how long and since when. In their
second amended complaint, they seek judgment
(4) Declaring the plaintiffs as bona fide occupants of the property in litigation pursuant to the provisions
of the Friar Lands Act and other existing laws. (Emphasis supplied)
They do not pray to be declared owners of the subject property despite their alleged adverse possession
but only to be adjudged as the "bona fide occupants" thereof. In other words, petitioners concede the
States ownership of the property.
Being so, petitioners may not be considered the real parties in interest for the purpose of maintaining the
suit for cancellation of the subject titles. The Court of Appeals is correct in declaring that only the State,
through the Solicitor General, may institute such suit. Jurisprudence on the matter has been settled and
the issue need not be belabored. Thus
The Court also holds that private respondents are not the proper parties to initiate the present suit. The
complaint, praying as it did for the cancellation of the transfer certificates of title of petitioners on the
ground that they were derived from a "spurious" OCT No. 4216, assailed in effect the validity of said title.
While private respondents did not pray for the reversion of the land to the government, we agree with the
petitioners that the prayer in the complaint will have the same result of reverting the land to the

government under the Regalian doctrine. Gabila vs. Barriga ruled that only the government is entitled to
this relief. The Court in that case held:
"The present motion to dismiss is actually predicated on Section 1(g), Rule 16 of the Revised Rules of
Court, i.e., failure of the complaint to state a cause of action, for it alleges in paragraph 12 thereof that the
plaintiff admits that he has no right to demand the cancellation or amendment of the defendants title,
because, even if the said title were canceled or amended, the ownership of the land embraced therein, or
of the portion thereof affected by the amendment, would revert to the public domain. In his amended
complaint the plaintiff makes no pretense at all that any part of the land covered by the defendants title
was privately owned by him or by his predecessors-in-interest.Indeed, it is admitted therein that the said
land was at all times a part of the public domain until December 18, 1964, when the government issued a
title thereon in favor of defendant. Thus, if there is any person or entity to relief, it can only be the
government.
In the case at bar, the plaintiffs own averments negate the existence of such right, for it would appear
therefrom that whatever right might have been violated by the defendant belonged to the government,
not to the plaintiff. Plaintiff-appellant argues that although his complaint is captioned as one for
cancellation of title, he has nevertheless stated therein several causes of action based on his alleged rights
of possession and ownership over the improvements, on defendant-appellees alleged fraudulent
acquisition of the land, and on the damages allegedly incurred by him (plaintiff-appellant) in relation to the
improvements. These matters are merely ancillary to the central issue of whether or not defendantappellees title should be canceled or amended, and they may not be leaned upon in an effort to make out
a cause of action in relation to the said focal issue. Indeed, the principal relief prayed for in the amended
complaint is the cancellation or amendment of defendant-appellees title." 31
Under Rule 3, Section 2 of the Rules of Court, a real party in interest is the party who stands to be
benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. "Interest"
within the meaning of the rule means material interest, an interest in issue and to be affected by the
decree, as distinguished from mere interest in the question involved, or a mere incidental interest. The
interest of the party must also be personal and not one based on a desire to vindicate the constitutional
right of some third and unrelated party. Real interest, on the other hand, means a present substantial
interest, as distinguished from a mere expectancy or a future, contingent, subordinate, or consequential
interest.32
If petitioners are to be believed, they would possess a mere inchoate interest in the properties covered by
the subject titles, a mere expectancy conditioned upon the fact that if the questioned titles are cancelled
and the property is reverted to the State, they would probably or possibly be given preferential treatment
as qualified buyers or lessees of the property under the Friar Lands Act. But this certainly is not the
"interest" required by law that grants them license or the personality to prosecute their case. Only to the
State does the privilege belong.
On the issue of exhaustion of administrative remedies, suffice it to state that since petitioners do not
possess the necessary interest to prosecute the case for cancellation of title in the courts, neither do they
have the right to pursue administrative remedies outside thereof. They are not the owners; nor are they
qualified applicants therefor. It has not been shown by their complaint that they have previously taken
steps to avail of the benefits under the Friar Lands Act, since all they seek, should the questioned titles be
nullified, is to be declared bona fideoccupants of the property covered by the questioned titles. Neither is
there any indication that they possess the qualifications necessary to enable them to avail of the
preference granted under the Act.
Finally, there is no merit in petitioners contention that respondent belatedly filed the petition for certiorari
with the Court of Appeals, and that the appellate court gravely abused its discretion when it entertained
and resolved the same.
The Order of the trial court dated January 3, 2001 denying respondents motion to dismiss the Second
Amended Complaint was received by the respondent on January 16, 2001. Respondent filed a motion for
reconsideration on January 18, 2001 which was denied on February 28, 2001. Respondent received the
order denying its motion for reconsideration on March 27, 2001. On the same day, it filed a Notice to File
Petition for Certiorari. On April 2, 2001, the petition for certiorari was filed with the Court of Appeals.
Clearly, the same was timely filed hence, the appellate court correctly entertained the same.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated January 9, 2002 in CAG.R. SP No. 64337 dismissing petitioners "Second Amended Complaint" in Civil Case No. Q-99-36483 and
the Resolution dated June 26, 2002 denying the motion for reconsideration, are AFFIRMED.
SO ORDERED.

LAND BANK OF THE G.R. No. 150824

PHILIPPINES,
Petitioner, Present:
YNARES-SANTIAGO, J.,
Chairperson,
- versus - AUSTRIA-MARTINEZ,
CORONA,*
NACHURA, and
REYES, JJ.
REPUBLIC OF THE
PHILIPPINES, represented Promulgated:
by the Director of Lands,
Respondent. February 4, 2008
REYES, R.T., J.:
FOREST lands are outside the commerce of man and unsusceptible of private appropriation in any form. [1]
It is well settled that a certificate of title is void when it covers property of public domain classified as
forest, timber or mineral lands. Any title issued covering non-disposable lots even in the hands of an
alleged innocent purchaser for value shall be cancelled.[2] The rule must stand no matter how harsh it may
seem. Dura lex sed lex.[3] Ang batas ay maaaring mahigpit subalit ito ang mananaig.
Before Us is a petition for review on certiorari under Rule 45 filed by petitioner Land Bank of the Philippines
(LBP) appealing the: (1) Decision[4] of the Court of Appeals (CA), dated August 23, 2001, in CA-G.R. CV No.
64121 entitledRepublic of the Philippines, represented by the Director of Lands v. Angelito Bugayong, et
al.; and (2) Resolution[5] of the same Court, dated November 12, 2001, denying LBPs motion for
reconsideration.
The CA affirmed the Decision[6] of the Regional Trial Court (RTC), dated July 9, 1996, declaring null and void
Original Certificate of Title (OCT) No. P-2823, as well as other titles originating from it, on the ground that
at the time it was issued, the land covered was still within the forest zone. [7]
The Facts
OCT No. P-2823 was issued on September 26, 1969 in favor of one Angelito C. Bugayong. Said mother title
emanated from Sales Patent No. 4576 issued in Bugayongs name on September 22, 1969.[8] It covered a
parcel of land located in Bocana, Kabacan, Davao City, with an area of 41,276 square meters. It was
originally identified and surveyed as Lot No. 4159 under Plan SI-(VIII-1), 328-D. Marshy and under water
during high tide, it used to be a portion of a dry river bed near the mouth of Davao River.[9]
The land was initially subdivided into four lots, viz.: Lot Nos. 4159-A, 4159-B, 4159-C and 4159-D under
Subdivision Plan (LRC) Psd-139511 approved by the Commissioner of Land Registration on April 23, 1971.
[10]
Consequently, OCT No. P-2823 was cancelled and new Transfer Certificates of Title (TCTs) replaced it, all
in the name of Bugayong.
Bugayong sold all of the four lots to different persons. Lot No. 4159-A, which was then under TCT No. T32769, was sold to spouses Lourdes and Candido Du. Accordingly, said TCT was cancelled and replaced
by TCT No. T-42166 in the name of spouses Du.[11]
Afterwards, the spouses Du further caused the subdivision of the land covered by their TCT No. T-42166
into two (2) lots. They sold one of said lots to spouses Felix and Guadalupe Dayola, who were
issued TCT No. T-45586. The other remaining lot, registered under TCT No. T-45587, was retained by and
registered in the names of spouses Du.[12]
Subsequently, Du spouses TCT No. T-45587 was cancelled and was replaced by TCT No. T-57348 registered
in the name of Lourdes Farms, Inc. subject of this case.[13] Lourdes Farms, Inc. mortgaged this property to
petitioner LBP on April 14, 1980.[14]

The validity of OCT No. P-2823, as well as its derivative TCTs, remained undisturbed until some residents of
the land it covered, particularly those along Bolton Diversion Road, filed a formal petition before the
Bureau of Lands on July 15, 1981.[15]
Investigation and ocular inspection were conducted by the Bureau of Lands to check the legitimacy of OCT
No. P-2823. They found out that: (1) at the time Sales Patent No. 4576 was issued to Bugayong, the land it
covered was still within the forest zone, classified under Project No. 1, LC-47 dated August 6, 1923; it was
released as alienable and disposable land only on March 25, 1981, pursuant to BFD Administrative Order
No. 4-1585 and to the provisions of Section 13, Presidential Decree (P.D.) No. 705; [16] (2) the land was
marshy and covered by sea water during high tide; and (3) Bugayong was never in actual possession of
the land.[17]
In view of the foregoing findings, the Bureau of Lands resolved that the sales patent in favor of Bugayong
was improperly and illegally issued and that the Director of Lands had no jurisdiction to dispose of the
subject land.[18]
Upon recommendation of the Bureau of Lands, the Republic of the Philippines represented by the Director
of Lands, through the Office of the Solicitor General (OSG), instituted a complaint [19] before the RTC in
Davao, Branch 15, for the cancellation of title/patent and reversion of the land covered by OCT No. P-2823
into the mass of public domain. The complaint, as amended,[20] was filed against Bugayong and other
present owners and mortgagees of the land, such as Lourdes Farms, Inc. and the latters mortgagee,
petitioner LBP.
In its answer with cross-claim,[21] LBP claimed that it is a mortgagee in good faith and for value. It prayed
that should TCT No. T-57348 of Lourdes Farms, Inc. be annulled by the court, Lourdes Farms, Inc. should be
ordered to pay its outstanding obligations to LBP or to provide a new collateral security. [22]
RTC Judgment
Eventually, the RTC rendered its judgment[23] on July 9, 1996 determining that:
x x x The mistakes and the flaws in the granting of the title were made by the Bureau of Lands personnel
more particularly the Director of Lands who is the Officer charged with the following the provisions of the
Public Land Law. x x x.
It is clear that the mother Title, OCTP-2823 in the name of defendant Bugayong was issued at a time when
the area was not yet released by the Bureau of Forestry to the Bureau of Lands.
The area covered by OCT No. P. 2823 was not yet declared by the Bureau of Lands alienable and
disposable when the said OCT was issued. The subdivision of the lot covered by OCT P-2823 into 4 lots
covered by TCT Nos. T-32768, 32769, 32756 and 32771 did not cure the defect. x x x.[24]
The RTC explained that titles issued to private parties by the Bureau of Lands are void ab initio if the land
covered by it is a forest land.[25] It went further by stating that if the mother title is void, all titles arising
from the mother title are also void.[26] It thus ruled in favor of the Republic with a fallo reading:
IN VIEW WHEREOF, judgment is hereby rendered declaring Original Certificate of Title No. P-2823 issued in
the name of defendant Angelito Bugayong null and void. The following Transfer Certificate of Titles which
were originally part of the lot covered by O.C.T. No. P-2823 are likewise declared void:
1.A. TCT No. 57348 in the name of defendant Lourdes Farms mortgaged to defendant Land Bank.
B. TCT No. 84749 in the name of defendants Johnny and Catherine Du mortgaged to defendant
Development Bank of the Philippines.
C. TCT No. 37386 in the name of defendants spouses Pahamotang mortgaged to defendant Lourdes Du
mortgaged with defendant Allied Bank.

E. TCT Nos. 68154 and 32768 in the names of defendants/spouses Maglana Santamaria.
2. All private defendants shall give to the Davao City Register of Deeds their titles, who shall cancel the
Transfer Certificate of Titles mentioned in paragraph number one.
3. Lot No. 4159, Plan SI (VIII-1) 328-D covered by O.C.T. P-2823 is hereby REVERTED to the mass of public
domain.
SO ORDERED.[27] (Underscoring supplied)
Disagreeing with the RTC judgment, LBP appealed to the CA on October 31, 1996. It asserted in its
appellants brief[28] that it validly acquired mortgage interest or lien over the subject property because it
was an innocent mortgagee for value and in good faith. [29] It also emphasized that it is a government
financial institution.
CA Disposition
In a Decision[30] dated August 23, 2001, the CA ruled against the appellants,[31] disposing thus:
WHEREFORE, premises considered, the present appeals are hereby DISMISSED and the Decision of the trial
court in Civil Case No. 17516 is hereby AFFIRMED.[32]
The CA confirmed that the evidence for the plaintiff clearly established that the land covered by OCT No. P2823 issued pursuant to a sales patent granted to defendant Angelito C. Bugayong was still within the
forestal zone at the time of the grant of the said patent. [33] It explained:
Forest lands or forest reserves, are incapable of private appropriation and possession thereof, however
long, cannot convert them into private properties. This is premised on the Regalian Doctrine enshrined not
only in the 1935 and 1973 Constitutions but also in the 1987Constitution. Our Supreme Court has upheld
this rule consistently even in earlier cases. It has also been held that whatever possession of the
land prior to the date of release of forested land as alienable and disposable cannot be credited to the 30year requirement (now, since June 12, 1945) under Section 48(b) of the Public Land Act. It is only from that
date that the period of occupancy for purposes of confirmation of imperfect or incomplete title may be
counted. Since the subject land was declared as alienable and disposable only on March 25, 1981,
appellants and their predecessors-in-interest could not claim any vested right thereon prior to its release
from public forest zone.
The inclusion of forest land in a title, whether title be issued during the Spanish regime or under
the Torrens system, nullifies the title. It is, of course, a well-recognized principle that the Director of Lands
(now Land Management Bureau) is bereft of any jurisdiction over public forest or any lands not capable of
registration. It is the Bureau of Forestry that has jurisdiction and authority over the demarcation,
protection, management, reproduction, occupancy and use of all public forests and forest reservations and
over the granting of licenses for the taking of products therefrom. And where the land applied for is part of
the public forest, the land registration court acquires no jurisdiction over the land, which is not yet
alienable and disposable.
Thus, notwithstanding the issuance of a sales patent over the subject parcel of land, the State may still
take action to have the same land reverted to the mass of public domain and the certificate of title
covering said forest land declared null and void for having been improperly and illegally issued. Titles
issued over non-alienable public lands have been held as void ab initio. The defense of indefeasibility of
title issued pursuant to such patent does not lie against the State. Public land fraudulently included in
patents or certificates of title may be recovered or reverted to the State in accordance with Section 101 of
the Public Land Act. In such cases, prescription does not lie against the State. Likewise, the government is
not estopped by such fraudulent or wrongful issuance of a patent over public forest land inasmuch as the
principle of estoppel does not operate against the Government for the acts of its agents. x x x.[34] (Citations
omitted)

With respect to LBPs contention[35] that it was a mortgagee in good faith and for value, the CA declared,
citing Republic v. Reyes[36] that: mortgagees of non-disposable lands where titles thereto were erroneously
issued acquire no protection under the land registration law. Appellants-mortgagees proper recourse
therefore is to pursue their claims against their respective mortgagors and debtors. [37]
When LBPs motion for reconsideration was denied, it resorted to the petition at bar.
Issues
LBP seeks the reversal of the CA disposition on the following grounds
A.
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE PETITIONER LAND BANK OF
THE PHILIPPINES MORTGAGE RIGHT AND INTEREST AS AN INNOCENT PURCHASER (MORTGAGEE) FOR
VALUE AND IN GOOD FAITH OVER THESUBJECT LAND COVERED BY TCT NO. T-57348 IS
VALID AND SUBSISTING IN ACCORDANCE WITH THE LAW AND EXISTING JURISPRUDENCE IN OUR COUNTRY.
B.
THE COURT OF APPEALS ERRED IN NOT FINDING PETITIONER LAND BANK OF THE PHILIPPINES MORTGAGE
RIGHT AND INTEREST OVER THE SUBJECT LAND AS VALID AND SUBSISTING UNDER THE CONSTITUTIONAL
GUARANTEE OF NON-IMPAIRMENT OF OBLIGATION OF CONTRACTS.
C.
THE COURT OF APPEALS ERRED IN NOT AWARDING TO PETITIONER LAND BANK OF THE PHILIPPINES THE
RELIEF PRAYED FOR UNDER ITS CROSS-CLAIM AGAINST CO-DEFENDANT LOURDES FARMS, INC., THAT IS,
ORDERING SAID CO-DEFENDANT LOURDES FARMS, INC. TO PAY ITS OUTSTANDING OBLIGATION TO
THE LAND BANK COVERED BY THE SUPPOSED NULL AND VOID TCT NO. T-57348, OR TO PROVIDE A
SUBSTITUTE COLLATERAL IN LIEU OF SAID TCT NO. T-57348.[38] (Underscoring supplied)
Our Ruling
LBP has no valid and subsisting mortgagees interest over the land covered by TCT No. T57348.
It has been established and admitted by LBP that: (1) the subject land mortgaged to it by Lourdes Farms,
Inc. is covered by TCT No. T-57348; and (2) the said TCT is derived from OCT No. P-2823 issued to
Bugayong.[39]
It was further ascertained by the courts below that at the time OCT No. P-2823 was issued to Bugayong
on September 26, 1969, the land it covered was still within the forest zone. It was declared as alienable
and disposable only on March 25, 1981.[40]
Despite these established facts, LBP argues that its alleged interest as mortgagee of the subject land
covered by TCT No. T-57348 must be respected. It avers that TCT No. T-57348 is a Torrens title which has
no written indications of defect or vice affecting the ownership of Lourdes Farms, Inc. Hence, it posits that
it was not and could not have been required to explore or go beyond what the title indicates or to search
for defects not indicated in it.
LBP cites cases where the Court ruled that a party is not required to explore further than what the Torrens
title upon its face indicates in quest of any hidden defect of an inchoate right that may subsequently
defeat his right to it; and that a bank is not required before accepting a mortgage to make an investigation
of the title of the property being given as security. LBP submits that its right as a mortgagee is binding
against the whole world and may not be disregarded. [41]

It further argues that review or reopening of registration is proscribed, as the title has become
incontrovertible pursuant to Section 32 of P.D. No. 1529; and that its mortgage rights and interest over the
subject land is protected by the constitutional guarantee of non-impairment of contracts. [42]
The contention that LBP has an interest over the subject land as a mortgagee has no merit. The
mortgagor, Lourdes Farms, Inc. from which LBP supposedly obtained its alleged interest has never been

the owner of the mortgaged land. Acquisition of the subject land by Lourdes Farms, Inc. is legally
impossible as the land was released as alienable and disposable only on March 25, 1981. Even at present,
no one could have possessed the same under a claim of ownership for the period of thirty (30) years
required under Section 48(b) of Commonwealth Act No. 141, as amended. [43] Hence, LBP acquired no rights
over the land.
Under Article 2085 of the Civil Code, it is essential that the mortgagor be the absolute owner of the thing
mortgaged, to wit:
ARTICLE 2085. The following requisites are essential to the contracts of pledge and mortgage:
(1) That they be constituted to secure the fulfillment of a principal obligation;
(2) That the pledgor or mortgagor be the absolute owner of the thing pledged or mortgaged;
(3) That the persons constituting the pledge or mortgage have the free disposal of their property, and in
the absence thereof, that they be legally authorized for the purpose. (Emphasis ours)
Since Lourdes Farms, Inc. is not the owner of the land, it does not have the capacity to mortgage it to
LBP. In De la Cruz v. Court of Appeals,[44] the Court declared:
While it is true that the mortgagees, having entered into a contract with petitioner as mortgagor, are
estopped from questioning the latters ownership of the mortgaged property and his concomitant capacity
to alienate or encumber the same, it must be considered that, in the first place, petitioner did not possess
such capacity to encumber the land at the time for the stark reason that it had been classified as a forest
land and remained a part of the patrimonial property of the State. Assuming, without admitting, that the
mortgagees cannot subsequently question the fact of ownership of petitioner after having dealt with him in
that capacity, still, petitioner was never vested with the proprietary power to encumber the property. In
fact, even if the mortgagees continued to acknowledge petitioner as the owner of the disputed land, in the
eyes of the law, the latter can never be presumed to be owner.
As correctly pointed out by the OSG, mortgagees of non-disposable lands, titles to which were erroneously
issued, acquire no protection under the Land Registration Law. [45]
Even assuming that LBP was able to obtain its own TCT over the property by means of its mortgage
contract with Lourdes Farms, Inc., the title must also be cancelled as it was derived from OCT No. P-2823
which was not validly issued to Bugayong. Forest lands cannot be owned by private persons. It is not
registerable whether the title is a Spanish title or a Torrens title.[46] It is well settled that a certificate of title
is void when it covers property of public domain classified as forest or timber or mineral land. Any title
issued covering non-disposable lots even in the hands of an alleged innocent purchaser for value shall be
cancelled.[47]
Moreover, the Court has already addressed the same issue in its Resolution of November 14, 2001 on the
petition filed by the Philippine National Bank (PNB) in G. R. No. 149568 entitled Philippine National Bank v.
Republic of the Philippinesrepresented by the Director of Lands,
which also appealed the subject CA decision. PNB, like LBP, is also a mortgagee of another
derivative TCT of the same OCT No. 2823. Said resolution reads:
On September 22, 1969, Angelito C. Bugayong was issued a sales patent covering a 41,276 square meter
parcel of land in Bocana, Barrio Kabacan, Davao City by the Bureau of Lands. On the basis of the sales
patent, the Register of Deeds of Davao City issued OCT No. P-2823 to Bugayong. Bugayong later
subdivided the land into four lots, one of which (Lot No. 4159-B covered by TCT No. T-32770) was sold by
him to the spouses Reynaldo Rogacion and Corazon Pahamotang. After obtaining TCT No. T-37786 in their
names, the spouses mortgaged the lot to the Philippine National Bank (PNB). As they defaulted in the
payment of their loan, the PNB foreclosed the property and purchased it at the foreclosure sale as the
highest bidder. Eventually, the PNB consolidated its title. Sometime in 1981, upon the petition of the
residents of the land, the Bureau of Lands conducted an investigation into the sales patent issued in favor
of Angelito C. Bugayong and found the sales patent to have been illegally issued because (1) the land was
released as alienable and disposable only on March 25, 1981; previous to that, the land was within the

forest zone; (2) the land is covered by sea water during high tide; and (3) the patentee, Angelito C.
Bugayong, had never been in actual possession of the land.
Based on this investigation, the government instituted the present suit in 1987 for cancellation of
title/patent and reversion of the parcel of land against Angelito C. Bugayong, the Rogacion spouses, and
the PNB, among others.
On July 6, 1996, the trial court rendered a decision declaring OCT No. P-2823 and all titles derived
therefrom null and void and ordering reversion of the subject property to the mass of the public
domain. On appeal, the Court of Appeals affirmed the trial courts decision.Hence, this petition.
First. Petitioner contends that it had a right to rely on TCT No. T-37786 showing the mortgagors Reynaldo
Rogacion and Corazon Pahamotangs ownership of the property.
The contention is without merit. It is well settled that a certificate of title is void when it covers property of
public domain classified as forest or timber or mineral lands. Any title issued covering non-disposable lots
even in the hands of an alleged innocent purchaser for value shall be cancelled (Republic v. Reyes, 155
SCRA 313 (1987)).
(Republic v. Court of Appeals, 148 SCRA 480 (1987)). In this case, petitioner does not dispute that its
predecessor-in-interest, Angelito C. Bugayong, had the subject property registered in his name when it was
forest land. Indeed, even if the subject property had been eventually segregated from the forest zone,
neither petitioner nor its predecessors-ininterest could have possessed the same under claim of ownership for the requisite period of thirty (30)
years because it was released as alienable and disposable only on March 25, 1981.
Second. Petitioners contention that respondents action for reversion is barred by prescription for having
been filed nearly two decades after the issuance of Bugayongs sales patent is likewise without
merit. Prescription does not lie against the State for reversion of property which is part of the public forest
or of a forest reservation registered in favor of any party. Public land registered under the Land Registration
Act may be recovered by the State at any time (Republic v. Court of Appeals, 258 SCRA 223 (1996)).[48]
Contrary to the argument of LBP, since the title is void, it could not have become incontrovertible. Even
prescription may not be used as a defense against the Republic. On this aspect, the Court in Reyes v.
Court of Appeals,[49] citing Republic v. Court of Appeals,[50] held:
Petitioners contention that the government is now estopped from questioning the validity of OCT No. 727
issued to them, considering that it took the government 45 years to assail the same, is erroneous. We have
ruled in a host of cases that prescription does not run against the government. In point is the case
of Republic v. Court of Appeals, wherein we declared:
And in so far as the timeliness of the action of the Government is concerned, it is basic that prescription
does not run against the State x x x. The case law has also been:
When the government is the real party in interest, and is proceeding mainly to assert its own rights and
recover its own property, there can be no defense on the ground of laches or limitation x x x.
Public land fraudulently included in patents or certificates of title may be recovered or reverted to the
State in accordance with Section 101 of the Public Land Act. Prescription does not lie against the State in
such cases for the Statute of Limitations does not run against the State. The right of reversion or
reconveyance to the State is not barred by prescription. (Emphasis ours)
There is no impairment of contract but a valid exercise of police power of the State.
The constitutional guarantee of non-impairment of contracts may not likewise be used by LBP to validate
its interest over the land as mortgagee. The States restraint upon the right to have an interest or
ownership over forest lands does not violate the constitutional guarantee of non-impairment of
contracts. Said restraint is a valid exercise of the police power of the State. As explained by the Court
in Director of Forestry v. Muoz:[51]
The view this Court takes of the cases at bar is but in adherence to public policy that should be followed
with respect to forest lands. Many have written much, and many more have spoken, and quite often, about
the pressing need for forest preservation, conservation, protection, development and reforestation. Not
without justification. For, forests constitute a vital segment of any country's natural resources. It is of

common knowledge by now that absence of the necessary green cover on our lands produces a number of
adverse or ill effects of serious proportions. Without the trees, watersheds dry up; rivers and lakes which
they supply are emptied of their contents. The fish disappear. Denuded areas become dust bowls. As
waterfalls cease to function, so will hydroelectric plants. With the rains, the fertile topsoil is washed away;
geological erosion results. With erosion come the dreaded floods that wreak havoc and destruction to
property crops, livestock, houses and highways not to mention precious human lives. Indeed, the foregoing
observations should be written down in a lumbermans decalogue.
Because of the importance of forests to the nation, the States police power has been wielded to regulate
the use and occupancy of forest and forest reserves.
To be sure, the validity of the exercise of police power in the name of the general welfare cannot be
seriously attacked. Our government had definite instructions from the Constitutions preamble to promote
the general welfare. Jurisprudence has time and again upheld the police power over individual rights,
because of the general welfare. Five decades ago, Mr. Justice Malcolm made it clear that the right of the
individual is necessarily subject to reasonable restraint by general law for the common good and that the
liberty of the citizen may be restrained in the interest of public health, or of the public order and safety, or
otherwise within the proper scope of the police power. Mr. Justice Laurel, about twenty years later, affirmed
the precept when he declared that the state in order to promote the general welfare may interfere with
personal liberty, with property, and with business and occupations and that [p]ersons and property may be
subjected to all kinds of restraints and burdens, in order to secure the general comfort, health, and
prosperity of the state. Recently, we quoted from leading American case, which pronounced that neither
property rights nor contract rights are absolute; for government cannot exist if the citizen may at will use
his property to the detriment of his fellows, or exercise his freedom of contract to work them harm, and
that, therefore, [e]qually fundamental with the private right is that of the public to regulate it in the
common interest. (Emphasis ours and citations omitted)
In Edu v. Ericta,[52] the Court defined police power as the authority of the state to enact legislation that may
interfere with personal liberty or property in order to promote the general welfare. It is the power to
prescribe regulations to promote the health, morals, peace, education, good order or safety, and general
welfare of the people. It is that inherent and plenary power of the State which enables it to prohibit all
things hurtful to the comfort, safety and welfare of society. [53] It extends to all the great public needs and is
described as the most pervasive, the least limitable and the most demanding of the three inherent powers
of the State, far outpacing taxation and eminent domain.[54] It is a ubiquitous and often unwelcome
intrusion. Even so, as long as the activity or the property has some relevance to the public welfare, its
regulation under the police power is not only proper but necessary. [55]
Preservation of our forest lands could entail intrusion upon contractual rights as in this case but it is
justified by the Latin maxims Salus populi est suprema lex and Sic utere tuo ut alienum non laedas, which
call for the subordination of individual interests to the benefit of the greater number. [56]
While We sympathize with petitioner, We nonetheless cannot, in this instance, yield to compassion and
equity. The rule must stand no matter how harsh it may seem.[57]
We cannot resolve the cross-claim for lack of factual basis. The cross-claim must be remanded
to the RTC for further proceedings.
LBP filed a cross-claim against Lourdes Farms, Inc. before the RTC.[58] The cross-claim is for the payment of
cross-defendant Lourdes Farms, Inc.s alleged obligation to LBP or its submission of a substitute collateral
security in lieu of the property covered by TCT No. T-57348.
However, the records do not show that Lourdes Farms, Inc. was required by the RTC to file an answer to the
cross-claim. Likewise, Lourdes Farms, Inc. was not notified of the proceedings before the CA. It was not also
made a party to this petition.
LPB now contends that the CA erred in not granting its cross-claim against Lourdes Farms, Inc. We are thus
confronted with the question: Should We now order Lourdes Farms, Inc. to comply with the demand of
LBP?
We rule in the negative. It may be true that Lourdes Farms, Inc. still has an obligation to LBP but We cannot
make a ruling regarding the same for lack of factual basis. There is no evidence-taking on the cross-

claim. No evidence was adduced before theRTC or the CA regarding it. No factual finding or ruling was
made by the RTC or the CA about it.
It bears stressing that in a petition for review on certiorari, the scope of this Court's judicial review of
decisions of the CA is generally confined only to errors of law. Questions of fact are not entertained.[59]
Moreover, the failure to make a ruling on the cross-claim by the RTC was not assigned as an error in LBPs
appellants brief[60] before the CA. Hence, the CA cannot be faulted for not making a ruling on it.
As held in De Liano v. Court of Appeals,[61] appellant has to specify in what aspect of the law or the facts
the trial court erred. The conclusion, therefore, is that appellant must carefully formulate his assignment of
errors. Its importance cannot be underestimated, as Section 8, Rule 51 of the Rules of Court will attest:
Questions that may be decided. No error which does not affect the jurisdiction over the subject matter or
the validity of the judgment appealed from or the proceedings therein will be considered unless stated in
the assignment of errors, or closely related to or dependent on an assigned error and properly argued in
the brief, save as the court may pass upon plain errors and clerical errors.
Apparently, the cross-claim was taken for granted not only by the RTC but also by LBP. The cross-claim was
not included as a subject or issue in the pre-trial order and instead of asking that the same be heard, LBP
filed a motion[62] to submit the main case for resolution. The main case was thus resolved by
the RTC without touching on the merits of the cross-claim.
On the other hand, while the CA did not make a categorical ruling on LBPs cross-claim, it pointed out that:
(1) as found by the RTC, there is a mortgage contract between LBP and Lourdes Farms, Inc., with LBP as
mortgagee and Lourdes Farms, Inc. as mortgagor; and (2) LBPs proper recourse is to pursue its claim
against Lourdes Farms, Inc.[63]
The CA thus impliedly ruled that LBPs cross-claim should not be included in this case. Instead of making a
ruling on the same, it recommended that LBP pursue its claim against Lourdes Farms, Inc.
All told, although the relationship between LBP and Lourdes Farms, Inc. as mortgagee and mortgagor was
established, the cross-claim of LBP against Lourdes Farms, Inc. was left unresolved.
The Court is not in a position to resolve the cross-claim based on the records. In order for the cross-claim to
be equitably decided, the Court, not being a trier of facts, is constrained to remand the case to the RTC for
further proceedings. Remand of the case for further proceedings is proper due to absence of a definitive
factual determination regarding the cross-claim. [64]
WHEREFORE, the appealed Decision of the Court of Appeals is hereby AFFIRMED with
the MODIFICATION that the cross-claim of petitioner Land Bank of the Philippines against Lourdes Farms,
Inc. is REMANDED to the Regional Trial Court, Branch 15, Davao City, for further proceedings.

LAND BANK OF THE PHILIPPINES, petitioner, vs. REPUBLIC OF THE PHILIPPINES,represented by

the Director of Lands, respondent.
This is a petition for review on certiorari under Rule 45 filed by petitioner Land Bank of the
Philippines(LBP)
Facts:
Angelito C. Bugayong was able to illegaly acquire a title over a forest land located in Bocana,Kabacan,
Davao City on September 26, 1969 which during that time was still not declared 1) alienableand
disposable 2) the land was marshy and covered by sea water during high tide; and (3) Bugayongwas never
in actual possession of the land.Subsequently, Bugayong subdivided the land and sold it to different
persons/entity and one of them isLourdes Farm,Inc., who in turned mortgaged to the said Petitioner, Land
Bank of the Philippines.It was find out later on that the titles issued to private parties by the Bureau of
Lands are void ab initioas forest land is part of a public domain and therefore, should be reverted to
PUBLIC DOMAIN and theoriginal title No. O.C.T. P-2823 and its subsequent titles be declared null and void.
Issue:
Whether or not the CA erred in declaring the OCT P-2823 and its subsequent titles void abinitio.
Held:
FOREST lands are outside the commerce of man and unsusceptible of private appropriation inany
form. WHEREFORE, the appealed Decision of the Court of Appeals is hereby AFFIRMED with
theMODIFICATION that the cross-claim of petitioner Land Bank of the Philippines against Lourdes Farms,Inc.
is REMANDED to the RTC for further proceedings.