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CLASSIFICATION OF LANDS

[G.R. No. 133250. November 11, 2003.]

FRANCISCO
I. CHAVEZ, petitioner, vs. PUBLIC ESTATES AUTHORITY and
AMARI COASTAL BAY DEVELOPMENT
CORPORATION, respondents.

Romulo, Mabanta, Buenaventura, Sayoc & Delos Angeles for Central Bay
Reclamation, etc.
Zaldy V. Trespeses for intervenor Prime Orion Phil. Inc.
The Solicitor General for public respondent.
Sugay Law Office for movants R.S. Atienza, et al.
Abello, Concepcion, Regala and Cruz for movants Foreign Investors
Italian-Thai Dev't & Centasia, etc.

SYNOPSIS

The Supreme Court denied with finality respondents' motions for reconsideration
seeking to legitimize a government contract that conveyed to Amari Coastal Bay
Development Corporation without public bidding 157.84 hectares of
reclaimed public lands along Roxas Boulevard in Metro Manila, ruling that any
sale of submerged or foreshore lands is void being contrary to the Constitution.
Submerged lands, like the waters (sea or bay) above them, are property of
the public dominion, absolutely inalienable and outside the commerce of man
under Sec. 2, Art. XII of the 1987 Constitution.
The ruling of the Court in the Ponce cases cannot serve as an authority for a
private corporation like Amari to acquire submerged lands or reclaimed
submerged lands within Manila Bay under an amended joint venture. In said
Ponce cases, the Cebu City ordinance merely granted Essel, Inc. an "irrevocable
option" to purchase foreshore lands after the reclamation. The option to purchase
referred to reclaimed lands, and not to foreshore lands which are inalienable.
Reclaimed lands are no longer foreshore or submerged lands, and thus may
qualify as alienable agricultural lands of the public domain provided the
requirements of public land laws are met.
In the instant case, public respondent Public Estates Authority (PEA) immediately
transferred its rights and ownership over the subject area, 78% of which is still
submerged, to the joint venture which is 70% owned by Amari. These still
submerged lands are inalienable and outside the commerce of man. The
Supreme Court also ruled that under theGovernment Auditing Code, government
land should not be sold without public bidding; and that under the present
Constitution, a private corporation like Amari is prohibited from acquiring
alienable lands of the public domain.

SYLLABUS

1. CONSTITUTIONAL LAW; REGALIAN DOCTRINE; SUBMERGED LANDS


ARE PROPERTY OF THE STATE AND ARE INALIENABLE. — Submerged
lands are owned by the State and are inalienable. [Pursuant to] Article XII of
the 1987 Constitution. . . Submerged lands, like the waters (sea or bay) above
them, are part of the State's inalienable natural resources. Submerged lands are
property of public dominion, absolutely inalienable and outside' the commerce of
man. This is also true with respect to foreshore lands. Any sale of submerged or
foreshore lands is void being contrary to the Constitution.
2. ID.; ID.; ID.; RECLAIMED LANDS ARE NO LONGER FORESHORE OR
SUBMERGED LANDS AND THUS MAY QUALIFY AS ALIENABLE
AGRICULTURAL LANDS; COURT RULING INPONCE CASES NOT
APPLICABLE TO CASE AT BAR. — This is why [in the Ponce Cases], the Cebu
City ordinance merely granted Essel, Inc. an "irrevocable option" to purchase the
foreshore lands after the reclamation and did not actually sell to Essel, Inc. the
still to be reclaimed foreshore lands. Clearly, in the Ponce Cases the option to
purchase referred to reclaimed lands, and not to foreshore lands which are
inalienable. Reclaimed lands are no longer foreshore or submerged lands, and
thus may qualify as alienable agricultural lands of the public domain provided the
requirements of public land laws are met. In the instant case, the bulk of the
lands subject of the Amended JVA are stillsubmerged lands even to this very
day, and therefore inalienable and outside the commerce of man. Of the 750
hectares subject of the Amended JVA, 592.15 hectares or 78% of the total area
are still submerged, permanently under the waters of Manila Bay. Under the
Amended JVA, the PEA conveyed to Amari the submerged lands even before
their actual reclamation, although the documentation of the deed of transfer and
issuance of the certificates of title would be made only after actual reclamation.
3. ID.; ID.; P.D. NO. 1445, OTHERWISE KNOWN AS THE GOVERNMENT
AUDITING CODE; REQUIREMENT OF PUBLIC BIDDING IN THE SALE OF
GOVERNMENT LANDS; VIOLATED IN CASE AT BAR. — With the subsequent
enactment of the Government Auditing Code (Presidential Decree No. 1445)
on 11 June 1978, any sale of government land must be made only
through public bidding. Thus, such an "irrevocable option" to purchase
government land would now be void being contrary to the requirement
of public bidding expressly required in Section 79 of PD No. 1445. This
requirement of public bidding is reiterated in Section 379 of the 1991 Local
Government Code. Obviously, the ingenious reclamation scheme adopted in the
Cebu City ordinance can no longer be followed in view of the requirement
of public bidding in the sale of government lands. In the instant case, the
Amended JVA is a negotiated contract which clearly contravenes Section 79
of PD No. 1445.
4. ID.; ID.; PRIVATE CORPORATIONS ARE BARRED FROM ACQUIRING
ALIENABLE LANDS OF THE PUBLIC DOMAIN; CASE AT BAR. — Finally, the
Ponce Cases were decided under the 1935 Constitution which allowed private
corporations to acquire alienable lands of the public domain. However, the 1973
Constitution prohibited private corporations from acquiring alienable lands of
the public domain, and the 1987 Constitution reiterated this prohibition.
Obviously, the Ponce Cases cannot serve as authority for a private corporation to
acquire alienable public lands, much less submerged lands, since under
the present Constitution a private corporation like Amari is barred from acquiring
alienable lands of the public domain.
VITUG, J., Separate Opinion:
1. CONSTITUTIONAL LAW; REGALIAN DOCTRINE; RECLAIMED LANDS; A
PRIVATE CORPORATION IS DISQUALIFIED TO ACQUIRE RECLAIMED
LANDS UNDER ARTICLE XII, SECTION 3 OF THE 1987 CONSTITUTION. — I
still maintain that the conclusion reached by the Court in its main decision is
correct, and while the reclaimed land for the submerged areas of Manila Bay
could perhaps be aptly classed as being "agricultural lands," respondent AMARI
Coastal Bay Development Corporation, being a private corporation, is
nevertheless disqualified under Article XII, Section 3, of the 1987
Constitution from directly acquiring, .except by way of lease, land of
the public domain. Relative to the pronouncements in Case No. 1-21870, entitled
"Manuel 0. Ponce, et al. v. Hon. Amador Gomez, et al.," and Case No. L-22669,
entitled "Manuel 0. Ponce, et al. v. City of Cebu, et al.," where this Court held to
be valid the assailed reclamation contracts, granting to a corporate entity the
option to buy a portion of reclaimed lands, suffice it to say that the foregoing
cases were decided on 03 February 1965 and 24 June 1966, respectively, when
the 1935 Constitution was still in effect. Unlike the 1987 Charter, the 1935
Constitution did not contain any proscription against corporations holding
alienable lands of the public domain.
2. ID.; ID.; ID.; RIGHTS OF PERSONS NOT DISQUALIFIED TO HOLD
ALIENABLE LANDS OF THE PUBLIC DOMAIN WHO MAY HAVE
PREVIOUSLY ACQUIRED RECLAIMED LANDS SHOULD BE RESPECTED. —
Just the same, I should like to make a statement on what could be a grave
concern on the part of individuals, who, not being personally disqualified to hold
alienable lands of the public domain, may have been able to acquire in good
faith, reclaimed portions of the subject property from respondent AMARI Coastal
Bay Development Corporation. I believe that such contracts must be duly
respected and upheld in line with analogous and applicable jurisprudence, as
well as equitable considerations, in cases involving the conveyance to
disqualified aliens of real property that, subsequently, are acquired by nationals
qualified to own such property. In instances where the successor-in-interest is
itself a corporate entity, the constitutional proscription would stand, but if the
corporation has introduced structures or permanent improvements thereon, such
structures or improvements, when so viewed as having been made in good faith,
could well be governed by the Civil Code effectively entitling the builder to pay to
the State a reasonable rent for the use of the land or to be reimbursed the value
of the structures, or improvements.
QUISUMBING, J., Separate Opinion:
1. CONSTITUTIONAL LAW; REGALIAN DOCTRINE; COURT RULING ON
STATE OWNERSHIP AND INALIENABILITY OF SUBMERGED LAND SHOULD
BE PROSPECTIVE IN NATURE; ADEQUATE REGARD SHOULD BE GIVEN
TO RECLAIMED LAND CONVEYED ALREADY TO PRIVATE PARTIES. — Two
points, in my view, require painstaking elucidation and clarification: (I) How
should the parcels of land now above water — regardless of actual size in
hectares — but conveyed already to private entities by PEA and/or its partner in
the joint venture, Amari Coastal Bay Development Corporation, be treated as a
consequence of the Court's decision? (2) May the Court at this time outlaw the
long standing practice of the executive department to pay the private individual or
corporate reclaimer/developer by means of using a proportionate share in the
reclaimed land itself? If so, shouldn't the Court's action be prospective in nature,
with adequate regard to rights and expectations of the private parties? I find the
cited cases in Justice Bellosillo's separate opinion, L-21870 Ponce v. Hon. A.
Gomez (Res. Of Feb.'3, 1965) and L-22661(Res. of June 24, 1966) acceptable
and instructive for the resolution of the instant controversy before us. That the
submerged lands, under the sea or below baywater, should belong to the
National Government need not be debatable. Nor would the proposition that their
ownership should pass to the municipal corporation when the city had
successfully conducted the reclamation project, through private initiative and
financial assistance, be a conceptual barrier to uphold probable rights of the
initiator and the financier that made the projects not only feasible but indeed
successful. This much at this time I would concede: state ownership of
submerged land. But after reclamation, I could not concede total nullity of private
efforts and resources spent pursuant to prior law and executive policy. Nor would
I neglect to appreciate Justice Vitug's reference to De Castro v. Tan, 129 SCRA
85, for an equitable approach to what appears now a constitutional conundrum.
2. ID.; ID.; RECLAIMED LANDS; BUILD, OPERATE AND TRANSFER
LAW, R.A. 6957 AS AMENDED, THE CHARTER OF PEA (P.D. NO. 1084)
AND P.D. NO. 1085 ARE OF MORE PERTINENCE TO RECLAMATION
PROJECTS THAN THE GENERAL AUDITING CODE (P.D. NO. 1445) WHICH
REQUIRES BIDDING OF CORPORATE PROJECTS. — Subject to further
reflection, it does not appear to me pertinent to apply Sec. 79 on disposal or sale
of unserviceable property, contained in P.D. No. 1445, the General Auditing
Code, or Sec. 379 of the Local Government Code. The requirement of bidding in
regard to corporate projects of PEA is obviously distinguishable, if not outright
distinct, from disposal of surplus/junk property. The reclamation projects like
those contemplated in the PEA-AMARI joint venture call for a
greater public appreciation of equitable investment regimes by policy-makers and
private entrepreneurs alike as they impact hugely on the economic development
concerns of the nation. Thus, we are of the view that of more pertinence in this
regard are the BOT (Build, Operate, and Transfer) Law, R.A. 6957 as amended
and the Charter of PEA (P.D. No. 1084) and P.D. No. 1085 concerning reclaimed
lands along Manila Bay.
SANDOVAL-GUTIERREZ, J., Dissenting Opinion:
1. CONSTITUTIONAL LAW; REGALIAN DOCTRINE; PROHIBITION ON THE
ACQUISITION OF RECLAIMED LANDS BY PRIVATE CORPORATIONS
SHOULD NOT BE ABSOLUTE AS TO DEFEAT THE GOALS OF THE
CONSTITUTION. — While I joined in the initial grant of the petition, I realized,
however, that the tenor of our interpretation of the Constitutional prohibition on
the acquisition of reclaimed lands by private corporations is so absolute and
circumscribed as to defeat the basic objectives of its provisions on "The National
Economy and Patrimony." The Constitution is a flexible and dynamic document.
It must be interpreted to meet its objectives under the complex necessities of the
changing times. Provisions intended to promote social and economic goals are
capable of varying interpretations. My view happens to differ from that of the
majority. I am confident, however, that the demands of the nation's economy and
the needs of the majority of our people will bring the majority Decision and this
Dissenting Opinion to a common understanding. Always, the goals of the
Constitution must be upheld, not defeated nor diminished. Infrastructure building
is a function of the government and ideally should be financed exclusively
by public funds. However, present circumstances show that this cannot be done.
Thus, private corporations are encouraged to invest in income generating
national construction ventures. Investments on, the scale of reclamation projects
entail huge amounts of money. It is a reality that only private corporations can
raise such amounts. In the process, they assist this. country in its economic
development. Consequently, our government should not take arbitrary action
against these corporate developers. .. Why should corporations part with their
money if there is no assurance of payment, such as a share in the land reclaimed
or to be reclaimed? It would be most unfair and a violation of procedural and
substantive rights to encourage investors, both Filipino and foreign, to form
corporations, build infrastructures, spend money and efforts only to be told that
the invitation to invest is unconstitutional or illegal with absolutely no indication of
how they could be compensated for their work.
2. ID.; ID.; ID.; LAND RECLAIMED FROM MANILA BAY ARE GOVERNED
BY PD 1084 AND PD 1085 WHICH ARE SPECIAL LAWS THEREON; CASE AT
BAR. — In our Decision sought to be reconsidered, we held that the following
laws, among others, are applicable to the particular reclamation project involved
in this case: the Spanish Law of Waters of 1866, the Civil Code of 1889, Act No.
1654 enacted by the Philippine Commission in 1907, Act No. 2874
(the Public Land Act of 1919); and Commonwealth Act No. 141 of the Philippine
National Assembly, also known as the Public Land Act of 1936.
Certain dictums are emphasized. Reclaimed lands of the government may be
leased but not sold to private corporations and private individuals. The
government retains title to lands it reclaims. Only lands which have been officially
delimited or classified as alienable shall be declared open to disposition or
concession. Applying these laws and the Constitution, we then concluded that
the submerged areas of Manila Bay are inalienable natural resources of
thepublic domain, outside the commerce of man. They have to be classified by
law as alienable or disposable agricultural lands of the public domain and have to
be declared open to disposition. However, there can be no classification and
declaration of their alienable or disposable nature until after PEA has reclaimed
these submerged areas. Even after the submerged areas have been reclaimed
from the sea and classified as alienable or disposable, private corporations such
as respondent AMARI, are disqualified from acquiring the reclaimed land in view
of Section 3, Article XII of the Constitution. . . I dissent from the foregoing
conclusions which are based on general laws mainly of ancient vintage.
Reclaimed lands, especially those under the Manila-Cavite Coastal Road and
Reclamation Project (MCCRRP), are governed by PD 1084 and PD
1085 enacted in 1976 and 1977, respectively, or more than half a century after
the enactment of the Public Lands Acts of 1919 and 1936.
3. STATUTORY CONSTRUCTION; RULE WHERE TWO OR MORE LAWS
GOVERN THE SAME SUBJECT; CASE AT BAR. — It is a fundamental rule that
if two or more laws govern the same subject, every effort to reconcile and
harmonize them must be taken. Interpretare et concordare legibus est optimus
interpretandi. Statutes must be so construed and harmonized with other statutes
as to form a uniform system of jurisprudence: However, if several laws cannot be
harmonized, the earlier statute must yield to the later enactment. The later law is
the latest expression of the legislative will. Therefore, it is PD 1084 and PD
1085 which apply to the issues in this case.
TINGA, J., Dissenting Opinion:
1. CONSTITUTIONAL LAW; REGALIAN DOCTRINE; RECLAIMED LAND DOES
NOT FALL UNDER THE CATEGORY OF NATURAL RESOURCES WHICH
UNDER THE CONSTITUTION ARE INALIENABLE; STATUTORY LAW
DETERMINES THE STATUS OF RECLAIMED LAND. — Reclaimed land does
not fall under the category of natural resources which under the Constitution are
inalienable. This is so because its development from the seabed entails human
intervention. It is unlike land per se, which having become such on account of the
forces of nature, is considered a natural a resource. That being the case, it is
statutory law which determines the status of reclaimed land. In other words, the
matter of categorization of reclaimed land is a legislative function.
2. ID.; ID.; ID.; ID.; LAND RECLAIMED PURSUANT TO SPECIAL LAWS BY A
PRIVATE INDIVIDUAL OR ENTITY IS CLASSIFIED AS PRIVATE PROPERTY;
CASE AT BAR. — Whenever land reclamation authorized by law is undertaken
by a private individual or entity, the reclaimed lands which the developer secures
by way of payment is classified as private property. There is no need for another
special law declaring the lands alienable as the reclamation law itself provides
the legal basis that renders them alienable, unless of course there is a contrary
provision in the law. The laws ordaining that reclaimed lands become lands of
the public domain are the exception rather than the rule. The PublicLand Acts
(Act No. 2874 and Commonwealth Act No. 141) typify the few laws which provide
that reclaimed lands are not alienable. But the categorization applies only to
lands reclaimed by the National Government. It does not cover lands reclaimed
by private individuals or entities, including local government units authorized by
law. In other words,Commonwealth Act No. 141, being a general law, is not
applicable to lands reclaimed pursuant to special laws, such as the reclaimed
land subject of this case.

RESOLUTION

CARPIO, J :p

This Court is asked to legitimize a government contract that conveyed to a


private entity 157.84 hectares of reclaimed public lands along Roxas Boulevard
in Metro Manila at thenegotiated price of P1,200 per square meter. However,
published reports place the market price of land near that area at that time at a
high of P90,000 per square meter. 1 The difference in price is a
staggering P140.16 billion, equivalent to the budget of the entire Judiciary
for seventeen years and more than three times the Marcos Swiss deposits
that this Court forfeited in favor of the government.
Many worry to death that the private investors will lose their investments, at most
not more than one-half billion pesos in legitimate expenses, 2 if this Court voids
the contract.No one seems to worry about the more than tens of billion pesos
that the hapless Filipino people will lose if the contract is allowed to stand. There
are those who question these figures, but the questions arise only because the
private entity somehow managed to inveigle the government to sell the reclaimed
lands without public bidding in patent violation of the Government Auditing Code.
Fortunately for the Filipino people, two Senate Committees, the Senate Blue
Ribbon Committee and the Committee on Accountability of Public Officers,
conducted extensivepublic hearings to determine the actual market value of
the public lands sold to the private entity. The Senate Committees established
the clear, indisputable and unalterable fact that the sale of the public lands is
grossly and unconscionably undervalued based on official documents submitted
by the proper government agencies during the Senate investigation. We quote
the joint report of these two Senate Committees, Senate Committee Report No.
560, as approved by the Senate in plenary session on 27 September 1997: 3
The Consideration for the Property
PEA, under the JVA, obligated itself to convey title and possession over
the Property, consisting of approximately One Million Five Hundred
Seventy Eight Thousand Four Hundred Forty One (1,578,441) Square
Meters for a total consideration of One Billion Eight Hundred Ninety Four
Million One Hundred Twenty Nine Thousand Two Hundred
(P1,894,129,200.00) Pesos, or a price of One Thousand Two Hundred
(P1,200.00) Pesos per square meter.

According to the zonal valuation of the Bureau of Internal Revenue, the


value of the Property is Seven Thousand Eight Hundred Pesos
(P7,800.00) per square meter. The Municipal Assessor of Parañaque,
Metro Manila, where the Property is located, pegs the market value of
the Property at Six Thousand Pesos (P6,000.00) per square meter.
Based on these alone, the price at which PEA agreed to convey the
property is a pittance. And PEA cannot claim ignorance of these
valuations, at least not those of the Municipal Assessors' office, since it
has been trying to convince the Office of the Municipal Assessor of
Parañaque to reduce the valuation of various reclaimed properties
thereat in order for PEA to save on accrued real property taxes.
PEA's justification for the purchase price are various appraisal reports,
particularly the following:
(1) An appraisal by Vic T. Salinas Realty and Consultancy
Services concluding that the Property is worth P500.00 per
square meter for the smallest island and P750.00 per
square meter for the two other islands, or a total of
P1,170,000.00 as of 22 February 1995;
(2) An appraisal by Valencia Appraisal Corporation concluding
that the Property is worth P850 per square meter for Island
I, P800 per square meter for Island II and P600 per square
meter for the smallest island, or a total of P1,289,732,000,
also as of 22 February 1995; and
(3) An Appraisal by Asian Appraisal Company, Inc. (AACI), stating
that the Property is worth approximately P1,000 per square
meter for Island I, P950 per square meter for Island II and
P600 per square meter for Island III, or a total of
P1,518,805,000 as of 27 February 1995.
The credibility of the foregoing appraisals, however, are [sic] greatly
impaired by a subsequent appraisal report of AACI stating that the
property is worth P4,500.00 per square meter as of 26 March 1996.
Such discrepancies in the appraised value as appearing in two different
reports by the same appraisal company submitted within a span of one
year render all such appraisal reports unworthy of even the slightest
consideration. Furthermore, the appraisal report submitted by the
Commission on Audit estimates the value of the Property to be
approximately P33,673,000,000.00, or P21,333.07 per square meter.
There were also other offers made for the property from other parties
which indicate that the Property has been undervalued by PEA. For
instance, on 06 March 1995, Mr. Young D. See, President of Saeil
Heavy Industries Co., Ltd., (South Korea), offered to buy the property at
P1,400.00 and expressed its willingness to issue a stand-by letter of
credit worth $10 million. PEA did not consider this offer and instead
finalized the JVA with AMARI. Other offers were made on various dates
by Aspac Management and Development Group Inc. (for P1,600 per
square meter), Universal Dragon Corporation (for P1,600 per square
meter), Cleene Far East Manila Incorporated and Hyosan Prime
Construction Co. Ltd. which had prepared an Irrevocable Clean Letter of
Credit for P100,000,000.
In addition, AMARI agreed to pay huge commissions and bonuses to
various persons, amounting to P1,596,863,050.00 (P1,754,707,150.00 if
the bonus is included), as will be discussed fully below, which indicate
that AMARI itself believed the market value to be much higher than the
agreed purchase price. If such commissions are added to the purchase
price, AMARI's acquisition cost for the Property will add-up to
P3,490,992,250.00 (excluding the bonus). If AMARI was willing to pay
such amount for the Property, why was PEA willing to sell for only
P1,894,129,200.00, making the Government stand to lose approximately
P1,596,863,050.00?
xxx xxx xxx
Even if we simply assume that the market value of the Property is half of
the market value fixed by the Municipal Assessors Office of Parañaque
for lands along Roxas Boulevard, or P3,000.00 per square meter, the
Government now stands to lose approximately P2,841,193,800.00. But
an even better assumption would be that the value of the Property is
P4,500.00 per square meter, as per the AACI appraisal report dated 26
March 1996, since this is the valuation used to justify the issuance of P4
billion worth of shares of stock of Centennial City Inc. (CCI) in exchange
for 4,800,000 AMARI shares with a total par value of only
P480,000,000.00. With such valuation, the Government's loss will
amount to P5,208,855,300.00.
Clearly, the purchase price agreed to by PEA is way below the actual
value of the Property, thereby subjecting the Government to grave injury
and enabling AMARI to enjoy tremendous benefit and advantage.
(Emphasis supplied)
The Senate Committee Report No. 560 attached the following official documents
from the Bureau of Internal Revenue, the Municipal Assessor of Parañaque,
Metro Manila, and the Commission on Audit:
1. Annex "M," Certified True Copy of BIR Zonal Valuations as certified by
Antonio F. Montemayor, Revenue District Officer. This official
document fixed the market value of the 157.84 hectares at P7,800
per square meter.
2. Annex "N," Certification of Soledad S. Medina-Cue, Municipal
Assessor, Parañaque, dated 10 December 1996. This official
document fixed the market value at P6,000 per square meter.
3. Exhibit "I-Engr. Santiago," the Appraisal Report of the Commission on
Audit. This official document fixed the market value at P21,333.07
per square meter.
Whether based on the official appraisal of the BIR, the Municipal Assessor or the
Commission on Audit, the P1,200 per square meter purchase price, or a total of
P1.894 billion for the 157.84 hectares of government lands, is grossly and
unconscionably undervalued. The authoritative appraisal, of course, is that of the
Commission on Audit which valued the 157.84 hectares at P21,333.07 per
square meter or a total of P33.673 billion. Thus, based on the official appraisal of
the Commission on Audit, the independent constitutional body that safeguards
government assets, the actual loss to the Filipino people is a shocking P31.779
billion.
This gargantuan monetary anomaly, aptly earning the epithet "Grandmother of All
Scams," 4 is not the major defect of this government contract. The major flaw is
not even theP1.754 billion in commissions the Senate Committees discovered
the private entity paid to various persons to secure the contract, 5 described in
Senate Report No. 560 as follows:
A Letter-Agreement dated 09 June 1995 signed by Messrs. Premchai
Karnasuta and Emmanuel Sy for and in behalf of AMARI, on the one
hand, and stockholders of AMARI namely, Mr. Chin San Cordova (a.k.a.
Benito Co) and Mr. Chua Hun Siong (a.k.a. Frank Chua), on the other,
sets forth various payments AMARI paid or agreed to pay the aforesaid
stockholders by way of fees for "professional efforts and services in
successfully negotiating and securing for AMARI the Joint Venture
Agreement", as follows:
Form of Payment Paid/Payable On Amount

Manager's Checks 28 April 1995 P400,000,000.00


Manager's Checks Upon signing of letter 262,500,000.00
10 Post Dated Checks (PDCs) 60 days from date of letter 127,000,000.00
24 PDCs 31 Aug. '95 to 31 Jan. '98 150,000,000.00
48 PDCs Monthly, over a 12-month
pd. from date of letter 357,363,050.00
Cash bonus When sale of land begins not exceeding
157,844,100.00
Developed land from Project Upon completion of each Costing
phase 300,000,000.00

TOTAL P1,754,707,150.00
==============
Mr. Luis Benitez of SGV, the external auditors of AMARI, testified that
said Letter-Agreement was approved by the AMARI Board. 6 (Emphasis
supplied)
The private entity that purchased the reclaimed lands for P1.894 billion expressly
admitted before the Senate Committees that it spent P1.754 billion in
commissions to pay various individuals for "professional efforts and services in
successfully negotiating and securing" the contract. By any legal or moral
yardstick, the P1.754 billion in commissions obviously constitutes bribe money.
Nonetheless, there are those who insist that the billions in investments of the
private entity deserve protection by this Court. Should this Court establish a new
doctrine by elevating grease money to the status of legitimate investments
deserving of protection by the law? Should this Court reward the patently illegal
and grossly unethical business practice of the private entity in securing the
contract? Should we allow those with hands dripping with dirty money equitable
relief from this Court?
Despite these revolting anomalies unearthed by the Senate Committees, the fatal
flaw of this contract is that it glaringly violates provisions of the
Constitution expressly prohibiting the alienation of lands of the public domain.
Thus, we now come to the resolution of the second Motions for
Reconsideration 7 filed by public respondent Public Estates Authority ("PEA") and
private respondent Amari Coastal Bay Development Corporation ("Amari"). As
correctly pointed out by petitioner Francisco I. Chavez in his Consolidated
Comment, 8 the second Motions for Reconsideration raise no new issues.
However, the Supplement to "Separate Opinion, Concurring and Dissenting" of
Justice Josue N. Bellosillo brings to the Court's attention the Resolutions of this
Court on 3 February 1965 and 24 June 1966 in L-21870 entitled "Manuel
O. Ponce, et al. v. Hon. Amador Gomez, et al." and No. L-22669 entitled "Manuel
O. Ponce, et al. v. The City of Cebu, et al." ("Ponce Cases"). In effect, the
Supplement to the Dissenting Opinion claims that these two Resolutions serve
as authority that a single private corporation like Amari may acquire hundreds of
hectares of submerged lands, as well as reclaimed submerged lands, within
Manila Bay under the Amended Joint Venture Agreement ("Amended JVA").
We find the cited Ponce Cases inapplicable to the instant case.
First, as Justice Bellosillo himself states in his supplement to his dissent, the
Ponce Cases admit that "submerged lands still belong to the National
Government." 9 The correct formulation, however, is that submerged lands are
owned by the State and are inalienable. Section 2, Article XII of the 1987
Constitution provides:

All lands of the public domain, waters, minerals, coal, petroleum, and
other mineral oils, all forces of potential energy, fisheries, forests or
timber, wildlife, flora and fauna, and other natural resources are owned
by the State. With the exception of agricultural lands, all other natural
resources shall not be alienated. . . . (Emphasis supplied)
Submerged lands, like the waters (sea or bay) above them, are part of the State's
inalienable natural resources. Submerged lands are property of public dominion,
absolutely inalienable and outside the commerce of man. 10 This is also true with
respect to foreshore lands. Any sale of submerged or foreshore lands is void
being contrary to the Constitution. 11
This is why the Cebu City ordinance merely granted Essel, Inc. an "irrevocable
option" to purchase the foreshore lands after the reclamation and did not actually
sell to Essel, Inc. the still to be reclaimed foreshore lands. Clearly, in the Ponce
Cases the option to purchase referred to reclaimed lands, and not to foreshore
lands which are inalienable. Reclaimed lands are no longer foreshore or
submerged lands, and thus may qualify as alienable agricultural lands of
the public domain provided the requirements of public land laws are met.
In the instant case, the bulk of the lands subject of the Amended JVA are
still submerged lands even to this very day, and therefore inalienable and outside
the commerce of man. Of the 750 hectares subject of the Amended JVA, 592.15
hectares or 78% of the total area are still submerged, permanently under the
waters of Manila Bay. Under the Amended JVA, the PEA conveyed to Amari the
submerged lands even before their actual reclamation, although the
documentation of the deed of transfer and issuance of the certificates of title
would be made only after actual reclamation.
The Amended JVA states that the PEA "hereby contributes to the Joint Venture
its rights and privileges to perform Rawland Reclamation and Horizontal
Development as well asown the Reclamation Area." 12 The Amended JVA further
states that "the sharing of the Joint Venture Proceeds shall be based on the ratio
of thirty percent (30%) for PEA and seventy percent (70%) for AMARI." 13 The
Amended JVA also provides that the PEA "hereby designates AMARI to perform
PEA's rights and privileges to reclaim, own and develop the Reclamation
Area." 14 In short, under the Amended JVA the PEA contributed its rights,
privileges and ownership over the Reclamation Area to the Joint Venture which is
70% owned by Amari. Moreover, the PEA delegated to Amari the right and
privilege to reclaim the submerged lands.
The Amended JVA mandates that the PEA had "the duty to execute without
delay the necessary deed of transfer or conveyance of the title pertaining to
AMARI's Land share based on the Land Allocation Plan." 15 The Amended JVA
also provides that "PEA, when requested in writing by AMARI, shall then cause
the issuance and delivery of the proper certificates of title covering AMARI's Land
Share in the name of AMARI, . . ." 16
In the Ponce Cases, the City of Cebu retained ownership of the reclaimed
foreshore lands and Essel, Inc. only had an "irrevocable option" to purchase
portions of the foreshore lands once actually reclaimed. In sharp contrast, in the
instant case ownership of the reclamation area, including the submerged lands,
was immediately transferred to the joint venture. Amari immediately acquired the
absolute right to own 70% percent of the reclamation area, with the deeds of
transfer to be documented and the certificates of title to be issued upon actual
reclamation. Amari's right to own the submerged lands is immediately effective
upon the approval of the Amended JVA and not merely an option to be exercised
in the future if and when the reclamation is actually realized. The submerged
lands, being inalienable and outside the commerce of man, could not be the
subject of the commercial transactions specified in the Amended JVA.
Second, in the Ponce Cases the Cebu City ordinance granted Essel, Inc. an
"irrevocable option" to purchase from Cebu City not more than 70% of the
reclaimed lands. The ownership of the reclaimed lands remained with Cebu City
until Essel, Inc. exercised its option to purchase. With the subsequent enactment
of the Government Auditing Code(Presidential Decree No. 1445) on 11 June
1978, any sale of government land must be made only
through public bidding. Thus, such an "irrevocable option" to purchase
government land would now be void being contrary to the requirement
of public bidding expressly required in Section 79 17 of PD No. 1445. This
requirement of public bidding is reiterated in Section 379 18 of the 1991 Local
Government Code. 19 Obviously, the ingenious reclamation scheme adopted in
the Cebu City ordinance can no longer be followed in view of the requirement
of public bidding in the sale of government lands. In the instant case, the
Amended JVA is a negotiated contract which clearly contravenes Section 79
ofPD No. 1445.
Third, Republic Act No. 1899 authorized municipalities and chartered cities to
reclaim foreshore lands. The two Resolutions in the Ponce Cases upheld the
Cebu City ordinance only with respect to foreshore areas, and nullified the same
with respect to submerged areas. Thus, the 27 June 1965 Resolution made the
injunction of the trial court against the City of Cebu "permanent insofar . . . as the
area outside or beyond the foreshore land proper is concerned."
As we held in the 1998 case of Republic Real Estate Corporation v. Court of
Appeals, 20 citing the Ponce Cases, RA No. 1899 applies only to foreshore lands,
not to submergedlands. In his concurring opinion in Republic Real Estate
Corporation, Justice Reynato S. Puno stated that under Commonwealth Act No.
141, "foreshore and lands under water were not to be alienated and sold to
private parties," and that such lands "remained property of the State." Justice
Puno emphasized that "Commonwealth Act No. 141 has remained in effect at
present." The instant case involves principally submerged lands within Manila
Bay. On this score, the Ponce Cases, which were decided based on RA No.
1899, are not applicable to the instant case.
Fourth, the Ponce Cases involve the authority of the City of Cebu to reclaim
foreshore areas pursuant to a general law, RA No. 1899. The City of Cebu is
a public corporation and is qualified, under the 1935, 1973, and 1987
Constitutions, to hold alienable or even inalienable lands of the public domain.
There is no dispute that a public corporation is not covered by the constitutional
ban on acquisition of alienable public lands. Both the 9 July 2002 Decision and
the 6 May 2003 Resolution of this Court in the instant case expressly recognize
this.
Cebu City is an end user government agency, just like the Bases Conversion and
Development Authority or the Department of Foreign Affairs. 21 Thus, Congress
may by law transfer public lands to the City of Cebu to be used for municipal
purposes, which may be public or patrimonial. Lands thus acquired by the City of
Cebu for a public purpose may not be sold to private parties. However, lands so
acquired by the City of Cebu for a patrimonial purpose may be sold to private
parties, including private corporations.
However, in the instant case the PEA is not an end user agency with respect to
the reclaimed lands under the Amended JVA. As we explained in the 6
May 2003 Resolution:
PEA is the central implementing agency tasked to undertake reclamation
projects nationwide. PEA took the place of the Department of
Environment and Natural Resources ("DENR" for brevity) as the
government agency charged with leasing or selling all reclaimed lands of
the public domain. In the hands of PEA, which took over the leasing and
selling functions of DENR, reclaimed foreshore (or submerged lands)
lands are public lands in the same manner that these same lands would
have been public lands in the hands of DENR. (Emphasis supplied)
Our 9 July 2002 Decision explained the rationale for treating the PEA in the same
manner as the DENR with respect to reclaimed foreshore or submerged lands in
this wise:
To allow vast areas of reclaimed lands of the public domain to be
transferred to PEA as private lands will sanction a gross violation of the
constitutional ban on private corporations from acquiring any kind of
alienable land of the public domain. PEA will simply turn around, as PEA
has now done under the Amended JVA, and transfer several hundreds
of hectares of these reclaimed and still to be reclaimed lands to a single
private corporation in only one transaction. This scheme will effectively
nullify the constitutional ban in Section 3, Article XII of the 1987
Constitution which was intended to diffuse equitably the ownership of
alienable lands of the public domain among Filipinos, now numbering
over 80 million strong. (Emphasis supplied)
Finally, the Ponce Cases were decided under the 1935 Constitution which
allowed private corporations to acquire alienable lands of
the public domain. However, the 1973 Constitution prohibited private
corporations from acquiring alienable lands of the public domain, and the 1987
Constitution reiterated this prohibition. Obviously, the Ponce Cases cannot serve
as authority for a private corporation to acquire alienable public lands, much less
submerged lands, since under the present Constitution a private corporation like
Amari is barred from acquiring alienable lands of the public domain.
Clearly, the facts in the Ponce Cases are different from the facts in the instant
case. Moreover, the governing constitutional and statutory provisions have
changed since the Ponce Cases were disposed of in 1965 and 1966 through
minute Resolutions of a divided (6 to 5) Court.
This Resolution does not prejudice any innocent third party purchaser of the
reclaimed lands covered by the Amended JVA. Neither the PEA nor Amari has
sold any portion of the reclaimed lands to third parties. Title to the reclaimed
lands remains with the PEA. As we stated in our 9 July 2002 Decision:

In the instant case, the only patent and certificates of title issued are
those in the name of PEA, a wholly government owned corporation
performing public as well as proprietary functions. No patent or
certificate of title has been issued to any private party. No one is asking
the Director of Lands to cancel PEA's patent or certificates of title. In
fact, the thrust of the instant petition is that PEA's certificates of title
should remain with PEA, and the land covered by these certificates,
being alienable lands of the public domain, should not be sold to a
private corporation.
As we held in our 9 July 2002 Decision, the Amended JVA "violates glaringly
Sections 2 and 3, Article XII of the 1987 Constitution." In our 6
May 2003 Resolution, we DENIED with FINALITY respondents' Motions for
Reconsideration. Litigations must end some time. It is now time to write finis to
this "Grandmother of All Scams."
WHEREFORE, the second Motions for Reconsideration filed
by Public Estates Authority and Amari Coastal Bay Development Corporation are
DENIED for being prohibited pleadings. In any event, these Motions for
Reconsideration have no merit. No further pleadings shall be allowed from any of
the parties.
SO ORDERED.
Davide, Jr ., C .J ., Panganiban, Austria-Martinez, Carpio Morales and Callejo,
Sr., concur.
Bellosillo, J ., I vote to grant reconsideration.
Puno, J ., I maintain my previous qualified opinion.
Quisumbing, J ., I vote to allow reconsideration.
Ynares-Santiago, J ., I maintain my previous dissent.
Sandoval-Gutierrez and Corona, JJ ., we maintain our dissent.
Azcuna, J ., took no part.
(Chavez v. Public Estates Authority, G.R. No. 133250 (Resolution), [November
|||

11, 2003], 461 PHIL 57-104)


[G.R. No. 133250. July 9, 2002]

FRANCISCO I. CHAVEZ, petitioner, vs. PUBLIC ESTATES AUTHORITY


and AMARI COASTAL BAY DEVELOPMENT
CORPORATION, respondents.

DECISION
CARPIO, J.:

This is an original Petition for Mandamus with prayer for a writ of preliminary
injunction and a temporary restraining order. The petition seeks to compel the Public
Estates Authority (PEA for brevity) to disclose all facts on PEAs then on-going
renegotiations with Amari Coastal Bay and Development Corporation (AMARI for
brevity) to reclaim portions of Manila Bay. The petition further seeks to enjoin PEA from
signing a new agreement with AMARI involving such reclamation.

The Facts

On November 20, 1973, the government, through the Commissioner of Public


Highways, signed a contract with the Construction and Development Corporation of the
Philippines (CDCP for brevity) to reclaim certain foreshore and offshore areas of Manila
Bay. The contract also included the construction of Phases I and II of the Manila-Cavite
Coastal Road. CDCP obligated itself to carry out all the works in consideration of fifty
percent of the total reclaimed land.
On February 4, 1977, then President Ferdinand E. Marcos issued Presidential
Decree No. 1084 creating PEA. PD No. 1084 tasked PEA to reclaim land, including
foreshore and submerged areas, and to develop, improve, acquire, x x x lease and sell
any and all kinds of lands.[1] On the same date, then President Marcos issued
Presidential Decree No. 1085 transferring to PEA the lands reclaimed in the foreshore
and offshore of the Manila Bay[2] under the Manila-Cavite Coastal Road and
Reclamation Project (MCCRRP).
On December 29, 1981, then President Marcos issued a memorandum directing
PEA to amend its contract with CDCP, so that [A]ll future works in MCCRRP x x x shall
be funded and owned by PEA. Accordingly, PEA and CDCP executed a Memorandum
of Agreement dated December 29, 1981, which stated:

(i) CDCP shall undertake all reclamation, construction, and such other works
in the MCCRRP as may be agreed upon by the parties, to be paid according
to progress of works on a unit price/lump sum basis for items of work to be
agreed upon, subject to price escalation, retention and other terms and
conditions provided for in Presidential Decree No. 1594. All the financing
required for such works shall be provided by PEA.

xxx

(iii) x x x CDCP shall give up all its development rights and hereby agrees to
cede and transfer in favor of PEA, all of the rights, title, interest and
participation of CDCP in and to all the areas of land reclaimed by CDCP in the
MCCRRP as of December 30, 1981 which have not yet been sold, transferred
or otherwise disposed of by CDCP as of said date, which areas consist of
approximately Ninety-Nine Thousand Four Hundred Seventy Three (99,473)
square meters in the Financial Center Area covered by land pledge No. 5 and
approximately Three Million Three Hundred Eighty Two Thousand Eight
Hundred Eighty Eight (3,382,888) square meters of reclaimed areas at varying
elevations above Mean Low Water Level located outside the Financial Center
Area and the First Neighborhood Unit. [3]

On January 19, 1988, then President Corazon C. Aquino issued Special Patent No.
3517, granting and transferring to PEA the parcels of land so reclaimed under the
Manila-Cavite Coastal Road and Reclamation Project (MCCRRP) containing a total
area of one million nine hundred fifteen thousand eight hundred ninety four (1,915,894)
square meters. Subsequently, on April 9, 1988, the Register of Deeds of the
Municipality of Paraaque issued Transfer Certificates of Title Nos. 7309, 7311, and
7312, in the name of PEA, covering the three reclaimed islands known as the Freedom
Islands located at the southern portion of the Manila-Cavite Coastal Road, Paraaque
City. The Freedom Islands have a total land area of One Million Five Hundred Seventy
Eight Thousand Four Hundred and Forty One (1,578,441) square meters or 157.841
hectares.
On April 25, 1995, PEA entered into a Joint Venture Agreement (JVA for brevity)
with AMARI, a private corporation, to develop the Freedom Islands. The JVA also
required the reclamation of an additional 250 hectares of submerged areas surrounding
these islands to complete the configuration in the Master Development Plan of the
Southern Reclamation Project-MCCRRP. PEA and AMARI entered into the JVA through
negotiation without public bidding.[4] On April 28, 1995, the Board of Directors of PEA, in
its Resolution No. 1245, confirmed the JVA. [5] On June 8, 1995, then President Fidel V.
Ramos, through then Executive Secretary Ruben Torres, approved the JVA. [6]
On November 29, 1996, then Senate President Ernesto Maceda delivered a
privilege speech in the Senate and denounced the JVA as the grandmother of all
scams. As a result, the Senate Committee on Government Corporations and Public
Enterprises, and the Committee on Accountability of Public Officers and Investigations,
conducted a joint investigation. The Senate Committees reported the results of their
investigation in Senate Committee Report No. 560 dated September 16, 1997. [7] Among
the conclusions of their report are: (1) the reclaimed lands PEA seeks to transfer to
AMARI under the JVA are lands of the public domain which the government has not
classified as alienable lands and therefore PEA cannot alienate these lands; (2) the
certificates of title covering the Freedom Islands are thus void, and (3) the JVA itself is
illegal.
On December 5, 1997, then President Fidel V. Ramos issued Presidential
Administrative Order No. 365 creating a Legal Task Force to conduct a study on the
legality of the JVA in view of Senate Committee Report No. 560. The members of the
Legal Task Force were the Secretary of Justice,[8] the Chief Presidential Legal
Counsel,[9] and the Government Corporate Counsel.[10] The Legal Task Force upheld the
legality of the JVA, contrary to the conclusions reached by the Senate Committees. [11]
On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published reports
that there were on-going renegotiations between PEA and AMARI under an order
issued by then President Fidel V. Ramos. According to these reports, PEA Director
Nestor Kalaw, PEA Chairman Arsenio Yulo and retired Navy Officer Sergio Cruz
composed the negotiating panel of PEA.
On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for
Prohibition with Application for the Issuance of a Temporary Restraining Order and
Preliminary Injunction docketed as G.R. No. 132994 seeking to nullify the JVA. The
Court dismissed the petition for unwarranted disregard of judicial hierarchy, without
prejudice to the refiling of the case before the proper court.[12]
On April 27, 1998, petitioner Frank I. Chavez (Petitioner for brevity) as a taxpayer,
filed the instant Petition for Mandamus with Prayer for the Issuance of a Writ of
Preliminary Injunction and Temporary Restraining Order. Petitioner contends the
government stands to lose billions of pesos in the sale by PEA of the reclaimed lands to
AMARI. Petitioner prays that PEA publicly disclose the terms of any renegotiation of the
JVA, invoking Section 28, Article II, and Section 7, Article III, of the 1987 Constitution on
the right of the people to information on matters of public concern. Petitioner assails the
sale to AMARI of lands of the public domain as a blatant violation of Section 3, Article
XII of the 1987 Constitution prohibiting the sale of alienable lands of the public domain
to private corporations. Finally, petitioner asserts that he seeks to enjoin the loss of
billions of pesos in properties of the State that are of public dominion.
After several motions for extension of time,[13] PEA and AMARI filed their Comments
on October 19, 1998 and June 25, 1998, respectively. Meanwhile, on December 28,
1998, petitioner filed an Omnibus Motion: (a) to require PEA to submit the terms of the
renegotiated PEA-AMARI contract; (b) for issuance of a temporary restraining order;
and (c) to set the case for hearing on oral argument. Petitioner filed a Reiterative Motion
for Issuance of a TRO dated May 26, 1999, which the Court denied in a Resolution
dated June 22, 1999.
In a Resolution dated March 23, 1999, the Court gave due course to the petition
and required the parties to file their respective memoranda.
On March 30, 1999, PEA and AMARI signed the Amended Joint Venture
Agreement (Amended JVA, for brevity). On May 28, 1999, the Office of the President
under the administration of then President Joseph E. Estrada approved the Amended
JVA.
Due to the approval of the Amended JVA by the Office of the President, petitioner
now prays that on constitutional and statutory grounds the renegotiated contract be
declared null and void.[14]

The Issues

The issues raised by petitioner, PEA[15] and AMARI[16] are as follows:


I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE
MOOT AND ACADEMIC BECAUSE OF SUBSEQUENT EVENTS;
II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE THE
PRINCIPLE GOVERNING THE HIERARCHY OF COURTS;
III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF
ADMINISTRATIVE REMEDIES;
IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT;
V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES
OFFICIAL INFORMATION ON ON-GOING NEGOTIATIONS BEFORE A FINAL
AGREEMENT;
VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE
AGREEMENT FOR THE TRANSFER TO AMARI OF CERTAIN LANDS,
RECLAIMED AND STILL TO BE RECLAIMED, VIOLATE THE 1987
CONSTITUTION; AND
VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE
OF WHETHER THE AMENDED JOINT VENTURE AGREEMENT IS GROSSLY
DISADVANTAGEOUS TO THE GOVERNMENT.

The Courts Ruling

First issue: whether the principal reliefs prayed for in the petition are moot and
academic because of subsequent events.

The petition prays that PEA publicly disclose the terms and conditions of the on-
going negotiations for a new agreement. The petition also prays that the Court enjoin
PEA from privately entering into, perfecting and/or executing any new agreement with
AMARI.
PEA and AMARI claim the petition is now moot and academic because AMARI
furnished petitioner on June 21, 1999 a copy of the signed Amended JVA containing the
terms and conditions agreed upon in the renegotiations. Thus, PEA has satisfied
petitioners prayer for a public disclosure of the renegotiations. Likewise, petitioners
prayer to enjoin the signing of the Amended JVA is now moot because PEA and AMARI
have already signed the Amended JVA on March 30, 1999. Moreover, the Office of the
President has approved the Amended JVA on May 28, 1999.
Petitioner counters that PEA and AMARI cannot avoid the constitutional issue by
simply fast-tracking the signing and approval of the Amended JVA before the Court
could act on the issue. Presidential approval does not resolve the constitutional issue or
remove it from the ambit of judicial review.
We rule that the signing of the Amended JVA by PEA and AMARI and its approval
by the President cannot operate to moot the petition and divest the Court of its
jurisdiction. PEA and AMARI have still to implement the Amended JVA. The prayer to
enjoin the signing of the Amended JVA on constitutional grounds necessarily includes
preventing its implementation if in the meantime PEA and AMARI have signed one in
violation of the Constitution. Petitioners principal basis in assailing the renegotiation of
the JVA is its violation of Section 3, Article XII of the Constitution, which prohibits the
government from alienating lands of the public domain to private corporations. If the
Amended JVA indeed violates the Constitution, it is the duty of the Court to enjoin its
implementation, and if already implemented, to annul the effects of such
unconstitutional contract.
The Amended JVA is not an ordinary commercial contract but one which seeks
to transfer title and ownership to 367.5 hectares of reclaimed lands and
submerged areas of Manila Bay to a single private corporation. It now becomes
more compelling for the Court to resolve the issue to insure the government itself does
not violate a provision of the Constitution intended to safeguard the national
patrimony. Supervening events, whether intended or accidental, cannot prevent the
Court from rendering a decision if there is a grave violation of the Constitution. In the
instant case, if the Amended JVA runs counter to the Constitution, the Court can still
prevent the transfer of title and ownership of alienable lands of the public domain in the
name of AMARI. Even in cases where supervening events had made the cases moot,
the Court did not hesitate to resolve the legal or constitutional issues raised to formulate
controlling principles to guide the bench, bar, and the public.[17]
Also, the instant petition is a case of first impression. All previous decisions of the
Court involving Section 3, Article XII of the 1987 Constitution, or its counterpart
provision in the 1973 Constitution,[18] covered agricultural lands sold to private
corporations which acquired the lands from private parties. The transferors of the
private corporations claimed or could claim the right to judicial confirmation of their
imperfect titles[19] under Title II of Commonwealth Act. 141 (CA No. 141 for brevity). In
the instant case, AMARI seeks to acquire from PEA, a public corporation,
reclaimed lands and submerged areas for non-agricultural purposes
by purchase under PD No. 1084 (charter of PEA) and Title III of CA No. 141. Certain
undertakings by AMARI under the Amended JVA constitute the consideration for the
purchase. Neither AMARI nor PEA can claim judicial confirmation of their titles because
the lands covered by the Amended JVA are newly reclaimed or still to be
reclaimed. Judicial confirmation of imperfect title requires open, continuous, exclusive
and notorious occupation of agricultural lands of the public domain for at least thirty
years since June 12, 1945 or earlier. Besides, the deadline for filing applications for
judicial confirmation of imperfect title expired on December 31, 1987. [20]
Lastly, there is a need to resolve immediately the constitutional issue raised in this
petition because of the possible transfer at any time by PEA to AMARI of title and
ownership to portions of the reclaimed lands. Under the Amended JVA, PEA is
obligated to transfer to AMARI the latters seventy percent proportionate share in the
reclaimed areas as the reclamation progresses. The Amended JVA even allows AMARI
to mortgage at any time the entire reclaimed area to raise financing for the reclamation
project.[21]

Second issue: whether the petition merits dismissal for failing to observe the
principle governing the hierarchy of courts.

PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief
directly from the Court. The principle of hierarchy of courts applies generally to cases
involving factual questions. As it is not a trier of facts, the Court cannot entertain cases
involving factual issues. The instant case, however, raises constitutional issues of
transcendental importance to the public.[22] The Court can resolve this case without
determining any factual issue related to the case. Also, the instant case is a petition
for mandamus which falls under the originaljurisdiction of the Court under Section 5,
Article VIII of the Constitution. We resolve to exercise primary jurisdiction over the
instant case.

Third issue: whether the petition merits dismissal for non-exhaustion of


administrative remedies.

PEA faults petitioner for seeking judicial intervention in compelling PEA to disclose
publicly certain information without first asking PEA the needed information. PEA claims
petitioners direct resort to the Court violates the principle of exhaustion of administrative
remedies. It also violates the rule that mandamus may issue only if there is no other
plain, speedy and adequate remedy in the ordinary course of law.
PEA distinguishes the instant case from Taada v. Tuvera[23] where the Court granted
the petition for mandamus even if the petitioners there did not initially demand from the
Office of the President the publication of the presidential decrees. PEA points out that
in Taada, the Executive Department had an affirmative statutory duty under Article 2
of the Civil Code[24] and Section 1 of Commonwealth Act No. 638[25] to publish the
presidential decrees. There was, therefore, no need for the petitioners in Taada to make
an initial demand from the Office of the President. In the instant case, PEA claims it has
no affirmative statutory duty to disclose publicly information about its renegotiation of
the JVA. Thus, PEA asserts that the Court must apply the principle of exhaustion of
administrative remedies to the instant case in view of the failure of petitioner here to
demand initially from PEA the needed information.
The original JVA sought to dispose to AMARI public lands held by PEA, a
government corporation. Under Section 79 of the Government Auditing Code,[26]2 the
disposition of government lands to private parties requires public bidding. PEA was
under a positive legal duty to disclose to the public the terms and conditions for
the sale of its lands. The law obligated PEA to make this public disclosure even
without demand from petitioner or from anyone. PEA failed to make this public
disclosure because the original JVA, like the Amended JVA, was the result of
a negotiated contract, not of a public bidding. Considering that PEA had an affirmative
statutory duty to make the public disclosure, and was even in breach of this legal duty,
petitioner had the right to seek direct judicial intervention.
Moreover, and this alone is determinative of this issue, the principle of exhaustion of
administrative remedies does not apply when the issue involved is a purely legal or
constitutional question.[27] The principal issue in the instant case is the capacity of AMARI
to acquire lands held by PEA in view of the constitutional ban prohibiting the alienation
of lands of the public domain to private corporations. We rule that the principle of
exhaustion of administrative remedies does not apply in the instant case.

Fourth issue: whether petitioner has locus standi to bring this suit

PEA argues that petitioner has no standing to institute mandamus proceedings to


enforce his constitutional right to information without a showing that PEA refused to
perform an affirmative duty imposed on PEA by the Constitution. PEA also claims that
petitioner has not shown that he will suffer any concrete injury because of the signing or
implementation of the Amended JVA. Thus, there is no actual controversy requiring the
exercise of the power of judicial review.
The petitioner has standing to bring this taxpayers suit because the petition seeks to
compel PEA to comply with its constitutional duties. There are two constitutional issues
involved here. First is the right of citizens to information on matters of public
concern. Second is the application of a constitutional provision intended to insure the
equitable distribution of alienable lands of the public domain among Filipino
citizens. The thrust of the first issue is to compel PEA to disclose publicly information on
the sale of government lands worth billions of pesos, information which the Constitution
and statutory law mandate PEA to disclose. The thrust of the second issue is to prevent
PEA from alienating hundreds of hectares of alienable lands of the public domain in
violation of the Constitution, compelling PEA to comply with a constitutional duty to the
nation.
Moreover, the petition raises matters of transcendental importance to the
public. In Chavez v. PCGG,[28] the Court upheld the right of a citizen to bring a taxpayers
suit on matters of transcendental importance to the public, thus -

Besides, petitioner emphasizes, the matter of recovering the ill-gotten wealth


of the Marcoses is an issue of transcendental importance to the public. He
asserts that ordinary taxpayers have a right to initiate and prosecute actions
questioning the validity of acts or orders of government agencies or
instrumentalities, if the issues raised are of paramount public interest, and if
they immediately affect the social, economic and moral well being of the
people.

Moreover, the mere fact that he is a citizen satisfies the requirement of


personal interest, when the proceeding involves the assertion of a public right,
such as in this case. He invokes several decisions of this Court which have
set aside the procedural matter of locus standi, when the subject of the case
involved public interest.

xxx

In Taada v. Tuvera, the Court asserted that when the issue concerns a public
right and the object of mandamus is to obtain the enforcement of a public
duty, the people are regarded as the real parties in interest; and because it is
sufficient that petitioner is a citizen and as such is interested in the execution
of the laws, he need not show that he has any legal or special interest in the
result of the action. In the aforesaid case, the petitioners sought to enforce
their right to be informed on matters of public concern, a right then recognized
in Section 6, Article IV of the 1973 Constitution, in connection with the rule
that laws in order to be valid and enforceable must be published in the Official
Gazette or otherwise effectively promulgated. In ruling for the petitioners' legal
standing, the Court declared that the right they sought to be enforced is a
public right recognized by no less than the fundamental law of the land.

Legaspi v. Civil Service Commission, while reiterating Taada, further declared


that when a mandamus proceeding involves the assertion of a public right, the
requirement of personal interest is satisfied by the mere fact that petitioner is
a citizen and, therefore, part of the general 'public' which possesses the right.

Further, in Albano v. Reyes, we said that while expenditure of public funds


may not have been involved under the questioned contract for the
development, management and operation of the Manila International
Container Terminal, public interest [was] definitely involved considering the
important role [of the subject contract] . . . in the economic development of the
country and the magnitude of the financial consideration involved. We
concluded that, as a consequence, the disclosure provision in the Constitution
would constitute sufficient authority for upholding the petitioner's standing.

Similarly, the instant petition is anchored on the right of the people to


information and access to official records, documents and papers a right
guaranteed under Section 7, Article III of the 1987 Constitution. Petitioner, a
former solicitor general, is a Filipino citizen. Because of the satisfaction of the
two basic requisites laid down by decisional law to sustain petitioner's legal
standing, i.e. (1) the enforcement of a public right (2) espoused by a Filipino
citizen, we rule that the petition at bar should be allowed.

We rule that since the instant petition, brought by a citizen, involves the
enforcement of constitutional rights - to information and to the equitable diffusion of
natural resources - matters of transcendental public importance, the petitioner has the
requisite locus standi.

Fifth issue: whether the constitutional right to information includes official


information on on-going negotiations before a final agreement.

Section 7, Article III of the Constitution explains the peoples right to information on
matters of public concern in this manner:

Sec. 7. The right of the people to information on matters of public concern


shall be recognized. Access to official records, and to documents, and
papers pertaining to official acts, transactions, or decisions, as well as to
government research data used as basis for policy development, shall be
afforded the citizen, subject to such limitations as may be provided by
law. (Emphasis supplied)

The State policy of full transparency in all transactions involving public interest
reinforces the peoples right to information on matters of public concern. This State
policy is expressed in Section 28, Article II of the Constitution, thus:

Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts
and implements a policy of full public disclosure of all its transactions
involving public interest. (Emphasis supplied)

These twin provisions of the Constitution seek to promote transparency in policy-


making and in the operations of the government, as well as provide the people sufficient
information to exercise effectively other constitutional rights. These twin provisions are
essential to the exercise of freedom of expression. If the government does not disclose
its official acts, transactions and decisions to citizens, whatever citizens say, even if
expressed without any restraint, will be speculative and amount to nothing. These twin
provisions are also essential to hold public officials at all times x x x accountable to the
people,[29] for unless citizens have the proper information, they cannot hold public
officials accountable for anything. Armed with the right information, citizens can
participate in public discussions leading to the formulation of government policies and
their effective implementation. An informed citizenry is essential to the existence and
proper functioning of any democracy. As explained by the Court in Valmonte v.
Belmonte, Jr.[30]

An essential element of these freedoms is to keep open a continuing dialogue


or process of communication between the government and the people. It is in
the interest of the State that the channels for free political discussion be
maintained to the end that the government may perceive and be responsive to
the peoples will. Yet, this open dialogue can be effective only to the extent
that the citizenry is informed and thus able to formulate its will
intelligently. Only when the participants in the discussion are aware of the
issues and have access to information relating thereto can such bear fruit.

PEA asserts, citing Chavez v. PCGG,[31] that in cases of on-going negotiations the
right to information is limited to definite propositions of the government. PEA maintains
the right does not include access to intra-agency or inter-agency recommendations or
communications during the stage when common assertions are still in the process of
being formulated or are in the exploratory stage.
Also, AMARI contends that petitioner cannot invoke the right at the pre-decisional
stage or before the closing of the transaction. To support its contention, AMARI cites the
following discussion in the 1986 Constitutional Commission:

Mr. Suarez. And when we say transactions which should be distinguished


from contracts, agreements, or treaties or whatever, does the Gentleman refer
to the steps leading to the consummation of the contract, or does he refer to
the contract itself?

Mr. Ople: The transactions used here, I suppose is generic and


therefore, it can cover both steps leading to a contract and already a
consummated contract, Mr. Presiding Officer.

Mr. Suarez: This contemplates inclusion of negotiations leading to the


consummation of the transaction.

Mr. Ople: Yes, subject only to reasonable safeguards on the national


interest.

Mr. Suarez: Thank you. (Emphasis supplied)


[32]

AMARI argues there must first be a consummated contract before petitioner can invoke
the right. Requiring government officials to reveal their deliberations at the pre-
decisional stage will degrade the quality of decision-making in government
agencies. Government officials will hesitate to express their real sentiments during
deliberations if there is immediate public dissemination of their discussions, putting
them under all kinds of pressure before they decide.
We must first distinguish between information the law on public bidding requires
PEA to disclose publicly, and information the constitutional right to information requires
PEA to release to the public. Before the consummation of the contract, PEA must, on its
own and without demand from anyone, disclose to the public matters relating to the
disposition of its property.These include the size, location, technical description and
nature of the property being disposed of, the terms and conditions of the disposition, the
parties qualified to bid, the minimum price and similar information. PEA must prepare all
these data and disclose them to the public at the start of the disposition process, long
before the consummation of the contract, because the Government Auditing Code
requires public bidding. If PEA fails to make this disclosure, any citizen can demand
from PEA this information at any time during the bidding process.
Information, however, on on-going evaluation or review of bids or proposals being
undertaken by the bidding or review committee is not immediately accessible under the
right to information. While the evaluation or review is still on-going, there are no official
acts, transactions, or decisions on the bids or proposals. However, once the committee
makes its official recommendation, there arises a definite proposition on the part of
the government. From this moment, the publics right to information attaches, and any
citizen can access all the non-proprietary information leading to such definite
proposition. In Chavez v. PCGG,[33] the Court ruled as follows:

Considering the intent of the framers of the Constitution, we believe that it is


incumbent upon the PCGG and its officers, as well as other government
representatives, to disclose sufficient public information on any proposed
settlement they have decided to take up with the ostensible owners and
holders of ill-gotten wealth. Such information, though, must pertain to definite
propositions of the government, not necessarily to intra-agency or inter-
agency recommendations or communications during the stage when common
assertions are still in the process of being formulated or are in the exploratory
stage. There is need, of course, to observe the same restrictions on
disclosure of information in general, as discussed earlier such as on matters
involving national security, diplomatic or foreign relations, intelligence and
other classified information. (Emphasis supplied)

Contrary to AMARIs contention, the commissioners of the 1986 Constitutional


Commission understood that the right to information contemplates inclusion of
negotiations leading to the consummation of the transaction. Certainly, a
consummated contract is not a requirement for the exercise of the right to
information. Otherwise, the people can never exercise the right if no contract is
consummated, and if one is consummated, it may be too late for the public to expose its
defects.
Requiring a consummated contract will keep the public in the dark until the contract,
which may be grossly disadvantageous to the government or even illegal, becomes
a fait accompli.This negates the State policy of full transparency on matters of public
concern, a situation which the framers of the Constitution could not have intended. Such
a requirement will prevent the citizenry from participating in the public discussion of
any proposed contract, effectively truncating a basic right enshrined in the Bill of
Rights. We can allow neither an emasculation of a constitutional right, nor a retreat by
the State of its avowed policy of full disclosure of all its transactions involving public
interest.
The right covers three categories of information which are matters of public
concern, namely: (1) official records; (2) documents and papers pertaining to official
acts, transactions and decisions; and (3) government research data used in formulating
policies. The first category refers to any document that is part of the public records in
the custody of government agencies or officials. The second category refers to
documents and papers recording, evidencing, establishing, confirming, supporting,
justifying or explaining official acts, transactions or decisions of government agencies or
officials. The third category refers to research data, whether raw, collated or processed,
owned by the government and used in formulating government policies.
The information that petitioner may access on the renegotiation of the JVA includes
evaluation reports, recommendations, legal and expert opinions, minutes of meetings,
terms of reference and other documents attached to such reports or minutes, all relating
to the JVA. However, the right to information does not compel PEA to prepare lists,
abstracts, summaries and the like relating to the renegotiation of the JVA.[34] The right
only affords access to records, documents and papers, which means the opportunity to
inspect and copy them. One who exercises the right must copy the records, documents
and papers at his expense. The exercise of the right is also subject to reasonable
regulations to protect the integrity of the public records and to minimize disruption to
government operations, like rules specifying when and how to conduct the inspection
and copying.[35]
The right to information, however, does not extend to matters recognized as
privileged information under the separation of powers.[36] The right does not also apply to
information on military and diplomatic secrets, information affecting national security,
and information on investigations of crimes by law enforcement agencies before the
prosecution of the accused, which courts have long recognized as confidential. [37] The
right may also be subject to other limitations that Congress may impose by law.
There is no claim by PEA that the information demanded by petitioner is privileged
information rooted in the separation of powers. The information does not cover
Presidential conversations, correspondences, or discussions during closed-door
Cabinet meetings which, like internal deliberations of the Supreme Court and other
collegiate courts, or executive sessions of either house of Congress, [38] are recognized
as confidential. This kind of information cannot be pried open by a co-equal branch of
government. A frank exchange of exploratory ideas and assessments, free from the
glare of publicity and pressure by interested parties, is essential to protect the
independence of decision-making of those tasked to exercise Presidential, Legislative
and Judicial power.[39] This is not the situation in the instant case.
We rule, therefore, that the constitutional right to information includes official
information on on-going negotiations before a final contract. The information,
however, must constitute definite propositions by the government and should not cover
recognized exceptions like privileged information, military and diplomatic secrets and
similar matters affecting national security and public order. [40] Congress has also
prescribed other limitations on the right to information in several legislations.[41]

Sixth issue: whether stipulations in the Amended JVA for the transfer to AMARI
of lands, reclaimed or to be reclaimed, violate the Constitution.

The Regalian Doctrine


The ownership of lands reclaimed from foreshore and submerged areas is rooted in
the Regalian doctrine which holds that the State owns all lands and waters of the public
domain.Upon the Spanish conquest of the Philippines, ownership of all lands, territories
and possessions in the Philippines passed to the Spanish Crown.[42] The King, as the
sovereign ruler and representative of the people, acquired and owned all lands and
territories in the Philippines except those he disposed of by grant or sale to private
individuals.
The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting,
however, the State, in lieu of the King, as the owner of all lands and waters of the public
domain.The Regalian doctrine is the foundation of the time-honored principle of land
ownership that all lands that were not acquired from the Government, either by
purchase or by grant, belong to the public domain.[43] Article 339 of the Civil Code of
1889, which is now Article 420 of the Civil Code of 1950, incorporated the Regalian
doctrine.
Ownership and Disposition of Reclaimed Lands
The Spanish Law of Waters of 1866 was the first statutory law governing the
ownership and disposition of reclaimed lands in the Philippines. On May 18, 1907, the
Philippine Commission enacted Act No. 1654 which provided for the lease, but not the
sale, of reclaimed lands of the government to corporations and individuals. Later,
on November 29, 1919, the Philippine Legislature approved Act No. 2874, the Public
Land Act, which authorized the lease, but not the sale, of reclaimed lands of the
government to corporations and individuals. On November 7, 1936, the National
Assembly passed Commonwealth Act No. 141, also known as the Public Land Act,
which authorized the lease, but not the sale, of reclaimed lands of the government
to corporations and individuals. CA No. 141 continues to this day as the general law
governing the classification and disposition of lands of the public domain.
The Spanish Law of Waters of 1866 and the Civil Code of 1889
Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all
waters within the maritime zone of the Spanish territory belonged to the public domain
for public use.[44] The Spanish Law of Waters of 1866 allowed the reclamation of the sea
under Article 5, which provided as follows:

Article 5. Lands reclaimed from the sea in consequence of works constructed


by the State, or by the provinces, pueblos or private persons, with proper
permission, shall become the property of the party constructing such works,
unless otherwise provided by the terms of the grant of authority.

Under the Spanish Law of Waters, land reclaimed from the sea belonged to the party
undertaking the reclamation, provided the government issued the necessary permit and
did not reserve ownership of the reclaimed land to the State.
Article 339 of the Civil Code of 1889 defined property of public dominion as follows:

Art. 339. Property of public dominion is

1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, riverbanks, shores, roadsteads, and that of a similar
character;
2. That belonging exclusively to the State which, without being of general public use, is
employed in some public service, or in the development of the national wealth, such
as walls, fortresses, and other works for the defense of the territory, and mines, until
granted to private individuals.
Property devoted to public use referred to property open for use by the public. In
contrast, property devoted to public service referred to property used for some specific
public service and open only to those authorized to use the property.
Property of public dominion referred not only to property devoted to public use, but
also to property not so used but employed to develop the national wealth. This class
of property constituted property of public dominion although employed for some
economic or commercial activity to increase the national wealth.
Article 341 of the Civil Code of 1889 governed the re-classification of property of
public dominion into private property, to wit:

Art. 341. Property of public dominion, when no longer devoted to public use or
to the defense of the territory, shall become a part of the private property of
the State.

This provision, however, was not self-executing. The legislature, or the executive
department pursuant to law, must declare the property no longer needed for public use
or territorial defense before the government could lease or alienate the property to
private parties.[45]
Act No. 1654 of the Philippine Commission
On May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated
the lease of reclaimed and foreshore lands. The salient provisions of this law were as
follows:

Section 1. The control and disposition of the foreshore as defined in


existing law, and the title to all Government or public lands made or
reclaimed by the Government by dredging or filling or otherwise
throughout the Philippine Islands, shall be retained by the
Government without prejudice to vested rights and without prejudice to rights
conceded to the City of Manila in the Luneta Extension.

Section 2. (a) The Secretary of the Interior shall cause all Government or
public lands made or reclaimed by the Government by dredging or filling or
otherwise to be divided into lots or blocks, with the necessary streets and
alleyways located thereon, and shall cause plats and plans of such surveys to
be prepared and filed with the Bureau of Lands.

(b) Upon completion of such plats and plans the Governor-General shall
give notice to the public that such parts of the lands so made or
reclaimed as are not needed for public purposes will be leased for
commercial and business purposes, x x x.

xxx

(e) The leases above provided for shall be disposed of to the highest
and best bidder therefore, subject to such regulations and safeguards as the
Governor-General may by executive order prescribe. (Emphasis supplied)

Act No. 1654 mandated that the government should retain title to all lands
reclaimed by the government. The Act also vested in the government control and
disposition of foreshore lands. Private parties could lease lands reclaimed by the
government only if these lands were no longer needed for public purpose. Act No. 1654
mandated public bidding in the lease of government reclaimed lands. Act No. 1654
made government reclaimed lands sui generis in that unlike other public lands which
the government could sell to private parties, these reclaimed lands were available only
for lease to private parties.
Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of
1866. Act No. 1654 did not prohibit private parties from reclaiming parts of the sea
under Section 5 of the Spanish Law of Waters. Lands reclaimed from the sea by private
parties with government permission remained private lands.
Act No. 2874 of the Philippine Legislature
On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public
Land Act.[46] The salient provisions of Act No. 2874, on reclaimed lands, were as follows:

Sec. 6. The Governor-General, upon the recommendation of the


Secretary of Agriculture and Natural Resources, shall from time to time
classify the lands of the public domain into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands, x x x.

Sec. 7. For the purposes of the government and disposition of alienable or


disposable public lands, the Governor-General, upon recommendation by
the Secretary of Agriculture and Natural Resources, shall from time to
time declare what lands are open to disposition or concession under
this Act.

Sec. 8. Only those lands shall be declared open to disposition or


concession which have been officially delimited or classified x x x.
xxx

Sec. 55. Any tract of land of the public domain which, being neither timber nor
mineral land, shall be classified as suitable for residential purposes or for
commercial, industrial, or other productive purposes other than
agricultural purposes, and shall be open to disposition or concession, shall
be disposed of under the provisions of this chapter, and not otherwise.

Sec. 56. The lands disposable under this title shall be classified as
follows:
(a) Lands reclaimed by the Government by dredging, filling, or
other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the
shores or banks of navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
x x x.

Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-
six shall be disposed of to private parties by lease only and not
otherwise, as soon as the Governor-General, upon recommendation by
the Secretary of Agriculture and Natural Resources, shall declare that
the same are not necessary for the public service and are open to
disposition under this chapter. The lands included in class (d) may be
disposed of by sale or lease under the provisions of this Act. (Emphasis
supplied)

Section 6 of Act No. 2874 authorized the Governor-General to classify lands of the
public domain into x x x alienable or disposable[47] lands. Section 7 of the Act empowered
the Governor-General to declare what lands are open to disposition or concession.
Section 8 of the Act limited alienable or disposable lands only to those lands which have
been officially delimited and classified.
Section 56 of Act No. 2874 stated that lands disposable under this title [48] shall be
classified as government reclaimed, foreshore and marshy lands, as well as other
lands. All these lands, however, must be suitable for residential, commercial, industrial
or other productive non-agricultural purposes. These provisions vested upon the
Governor-General the power to classify inalienable lands of the public domain into
disposable lands of the public domain. These provisions also empowered the Governor-
General to classify further such disposable lands of the public domain into government
reclaimed, foreshore or marshy lands of the public domain, as well as other non-
agricultural lands.
Section 58 of Act No. 2874 categorically mandated that disposable lands of the
public domain classified as government reclaimed, foreshore and marshy lands shall
be disposed of to private parties by lease only and not otherwise. The Governor-
General, before allowing the lease of these lands to private parties, must formally
declare that the lands were not necessary for the public service. Act No. 2874 reiterated
the State policy to lease and not to sell government reclaimed, foreshore and marshy
lands of the public domain, a policy first enunciated in 1907 in Act No.
1654. Government reclaimed, foreshore and marshy lands remained sui generis, as
the only alienable or disposable lands of the public domain that the government could
not sell to private parties.
The rationale behind this State policy is obvious. Government reclaimed, foreshore
and marshy public lands for non-agricultural purposes retain their inherent potential as
areas for public service. This is the reason the government prohibited the sale, and only
allowed the lease, of these lands to private parties. The State always reserved these
lands for some future public service.
Act No. 2874 did not authorize the reclassification of government reclaimed,
foreshore and marshy lands into other non-agricultural lands under Section 56
(d). Lands falling under Section 56 (d) were the only lands for non-agricultural purposes
the government could sell to private parties. Thus, under Act No. 2874, the government
could not sell government reclaimed, foreshore and marshy lands to private
parties, unless the legislature passed a law allowing their sale.[49]
Act No. 2874 did not prohibit private parties from reclaiming parts of the sea
pursuant to Section 5 of the Spanish Law of Waters of 1866. Lands reclaimed from the
sea by private parties with government permission remained private lands.
Dispositions under the 1935 Constitution
On May 14, 1935, the 1935 Constitution took effect upon its ratification by the
Filipino people. The 1935 Constitution, in adopting the Regalian doctrine, declared in
Section 1, Article XIII, that

Section 1. All agricultural, timber, and mineral lands of the public domain,
waters, minerals, coal, petroleum, and other mineral oils, all forces of potential
energy and other natural resources of the Philippines belong to the State, and
their disposition, exploitation, development, or utilization shall be limited to
citizens of the Philippines or to corporations or associations at least sixty per
centum of the capital of which is owned by such citizens, subject to any
existing right, grant, lease, or concession at the time of the inauguration of the
Government established under this Constitution. Natural resources, with the
exception of public agricultural land, shall not be alienated, and no
license, concession, or lease for the exploitation, development, or utilization of
any of the natural resources shall be granted for a period exceeding twenty-
five years, renewable for another twenty-five years, except as to water rights
for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases beneficial use may be the
measure and limit of the grant. (Emphasis supplied)

The 1935 Constitution barred the alienation of all natural resources except public
agricultural lands, which were the only natural resources the State could alienate. Thus,
foreshore lands, considered part of the States natural resources, became inalienable by
constitutional fiat, available only for lease for 25 years, renewable for another 25
years. The government could alienate foreshore lands only after these lands were
reclaimed and classified as alienable agricultural lands of the public
domain. Government reclaimed and marshy lands of the public domain, being neither
timber nor mineral lands, fell under the classification of public agricultural
lands.[50] However, government reclaimed and marshy lands, although subject to
classification as disposable public agricultural lands, could only be leased and not sold
to private parties because of Act No. 2874.
The prohibition on private parties from acquiring ownership of government
reclaimed and marshy lands of the public domain was only a statutory prohibition and
the legislature could therefore remove such prohibition. The 1935 Constitution did not
prohibit individuals and corporations from acquiring government reclaimed and marshy
lands of the public domain that were classified as agricultural lands under existing public
land laws. Section 2, Article XIII of the 1935 Constitution provided as follows:

Section 2. No private corporation or association may acquire, lease, or


hold public agricultural lands in excess of one thousand and twenty four
hectares, nor may any individual acquire such lands by purchase in
excess of one hundred and forty hectares, or by lease in excess of one
thousand and twenty-four hectares, or by homestead in excess of twenty-four
hectares. Lands adapted to grazing, not exceeding two thousand hectares,
may be leased to an individual, private corporation, or association. (Emphasis
supplied)

Still, after the effectivity of the 1935 Constitution, the legislature did not repeal Section
58 of Act No. 2874 to open for sale to private parties government reclaimed and marshy
lands of the public domain. On the contrary, the legislature continued the long
established State policy of retaining for the government title and ownership of
government reclaimed and marshy lands of the public domain.
Commonwealth Act No. 141 of the Philippine National Assembly
On November 7, 1936, the National Assembly approved Commonwealth Act No.
141, also known as the Public Land Act, which compiled the then existing laws on lands
of the public domain. CA No. 141, as amended, remains to this day the existing
general law governing the classification and disposition of lands of the public domain
other than timber and mineral lands.[51]
Section 6 of CA No. 141 empowers the President to classify lands of the public
domain into alienable or disposable[52] lands of the public domain, which prior to such
classification are inalienable and outside the commerce of man. Section 7 of CA No.
141 authorizes the President to declare what lands are open to disposition or
concession. Section 8 of CA No. 141 states that the government can declare open for
disposition or concession only lands that are officially delimited and classified. Sections
6, 7 and 8 of CA No. 141 read as follows:

Sec. 6. The President, upon the recommendation of the Secretary of


Agriculture and Commerce, shall from time to time classify the lands of
the public domain into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands,
and may at any time and in like manner transfer such lands from one class to
another, for the purpose of their administration and disposition.
[53]

Sec. 7. For the purposes of the administration and disposition of alienable or


disposable public lands, the President, upon recommendation by the
Secretary of Agriculture and Commerce, shall from time to time declare
what lands are open to disposition or concession under this Act.

Sec. 8. Only those lands shall be declared open to disposition or


concession which have been officially delimited and classified and, when
practicable, surveyed, and which have not been reserved for public or
quasi-public uses, nor appropriated by the Government, nor in any manner
become private property, nor those on which a private right authorized and
recognized by this Act or any other valid law may be claimed, or which, having
been reserved or appropriated, have ceased to be so. x x x.

Thus, before the government could alienate or dispose of lands of the public domain,
the President must first officially classify these lands as alienable or disposable, and
then declare them open to disposition or concession. There must be no law reserving
these lands for public or quasi-public uses.
The salient provisions of CA No. 141, on government reclaimed, foreshore and
marshy lands of the public domain, are as follows:

Sec. 58. Any tract of land of the public domain which, being neither
timber nor mineral land, is intended to be used for residential purposes
or for commercial, industrial, or other productive purposes other than
agricultural, and is open to disposition or concession, shall be disposed
of under the provisions of this chapter and not otherwise.

Sec. 59. The lands disposable under this title shall be classified as
follows:
(a) Lands reclaimed by the Government by dredging, filling, or
other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the
shores or banks of navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.

Sec. 60. Any tract of land comprised under this title may be leased or sold, as
the case may be, to any person, corporation, or association authorized to
purchase or lease public lands for agricultural purposes. x x x.

Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-
nine shall be disposed of to private parties by lease only and not
otherwise, as soon as the President, upon recommendation by the
Secretary of Agriculture, shall declare that the same are not necessary for
the public service and are open to disposition under this chapter. The lands
included in class (d) may be disposed of by sale or lease under the
provisions of this Act. (Emphasis supplied)

Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution,
Section 58 of Act No. 2874 prohibiting the sale of government reclaimed, foreshore and
marshy disposable lands of the public domain. All these lands are intended for
residential, commercial, industrial or other non-agricultural purposes. As before, Section
61 allowed only the lease of such lands to private parties. The government could sell to
private parties only lands falling under Section 59 (d) of CA No. 141, or those lands for
non-agricultural purposes not classified as government reclaimed, foreshore and
marshy disposable lands of the public domain. Foreshore lands, however, became
inalienable under the 1935 Constitution which only allowed the lease of these lands to
qualified private parties.
Section 58 of CA No. 141 expressly states that disposable lands of the public
domain intended for residential, commercial, industrial or other productive purposes
other than agricultural shall be disposed of under the provisions of this chapter and
not otherwise. Under Section 10 of CA No. 141, the term disposition includes lease of
the land. Any disposition of government reclaimed, foreshore and marshy disposable
lands for non-agricultural purposes must comply with Chapter IX, Title III of CA No.
141,[54] unless a subsequent law amended or repealed these provisions.
In his concurring opinion in the landmark case of Republic Real Estate
Corporation v. Court of Appeals,[55] Justice Reynato S. Puno summarized succinctly
the law on this matter, as follows:

Foreshore lands are lands of public dominion intended for public use. So too
are lands reclaimed by the government by dredging, filling, or other
means. Act 1654 mandated that the control and disposition of the foreshore
and lands under water remained in the national government. Said law allowed
only the leasing of reclaimed land. The Public Land Acts of 1919 and 1936
also declared that the foreshore and lands reclaimed by the government were
to be disposed of to private parties by lease only and not otherwise. Before
leasing, however, the Governor-General, upon recommendation of the
Secretary of Agriculture and Natural Resources, had first to determine that the
land reclaimed was not necessary for the public service. This requisite must
have been met before the land could be disposed of. But even then, the
foreshore and lands under water were not to be alienated and sold to
private parties. The disposition of the reclaimed land was only by
lease. The land remained property of the State. (Emphasis supplied)

As observed by Justice Puno in his concurring opinion, Commonwealth Act No. 141 has
remained in effect at present.
The State policy prohibiting the sale to private parties of government reclaimed,
foreshore and marshy alienable lands of the public domain, first implemented in 1907
was thus reaffirmed in CA No. 141 after the 1935 Constitution took effect. The
prohibition on the sale of foreshore lands, however, became a constitutional edict under
the 1935 Constitution. Foreshore lands became inalienable as natural resources of the
State, unless reclaimed by the government and classified as agricultural lands of the
public domain, in which case they would fall under the classification of government
reclaimed lands.
After the effectivity of the 1935 Constitution, government reclaimed and marshy
disposable lands of the public domain continued to be only leased and not sold to
private parties.[56]These lands remained sui generis, as the only alienable or disposable
lands of the public domain the government could not sell to private parties.
Since then and until now, the only way the government can sell to private parties
government reclaimed and marshy disposable lands of the public domain is for the
legislature to pass a law authorizing such sale. CA No. 141 does not authorize the
President to reclassify government reclaimed and marshy lands into other non-
agricultural lands under Section 59 (d). Lands classified under Section 59 (d) are the
only alienable or disposable lands for non-agricultural purposes that the government
could sell to private parties.
Moreover, Section 60 of CA No. 141 expressly requires congressional authority
before lands under Section 59 that the government previously transferred to
government units or entities could be sold to private parties. Section 60 of CA No. 141
declares that

Sec. 60. x x x The area so leased or sold shall be such as shall, in the
judgment of the Secretary of Agriculture and Natural Resources, be
reasonably necessary for the purposes for which such sale or lease is
requested, and shall not exceed one hundred and forty-four hectares:
Provided, however, That this limitation shall not apply to grants, donations, or
transfers made to a province, municipality or branch or subdivision of the
Government for the purposes deemed by said entities conducive to the public
interest; but the land so granted, donated, or transferred to a province,
municipality or branch or subdivision of the Government shall not be
alienated, encumbered, or otherwise disposed of in a manner affecting
its title, except when authorized by Congress: x x x. (Emphasis supplied)

The congressional authority required in Section 60 of CA No. 141 mirrors the legislative
authority required in Section 56 of Act No. 2874.
One reason for the congressional authority is that Section 60 of CA No. 141
exempted government units and entities from the maximum area of public lands that
could be acquired from the State. These government units and entities should not just
turn around and sell these lands to private parties in violation of constitutional or
statutory limitations. Otherwise, the transfer of lands for non-agricultural purposes to
government units and entities could be used to circumvent constitutional limitations on
ownership of alienable or disposable lands of the public domain. In the same manner,
such transfers could also be used to evade the statutory prohibition in CA No. 141 on
the sale of government reclaimed and marshy lands of the public domain to private
parties. Section 60 of CA No. 141 constitutes by operation of law a lien on these lands. [57]
In case of sale or lease of disposable lands of the public domain falling under
Section 59 of CA No. 141, Sections 63 and 67 require a public bidding. Sections 63
and 67 of CA No. 141 provide as follows:
Sec. 63. Whenever it is decided that lands covered by this chapter are not
needed for public purposes, the Director of Lands shall ask the Secretary of
Agriculture and Commerce (now the Secretary of Natural Resources) for
authority to dispose of the same. Upon receipt of such authority, the Director
of Lands shall give notice by public advertisement in the same manner as in
the case of leases or sales of agricultural public land, x x x.

Sec. 67. The lease or sale shall be made by oral bidding; and
adjudication shall be made to the highest bidder. x x x. (Emphasis
supplied)

Thus, CA No. 141 mandates the Government to put to public auction all leases or sales
of alienable or disposable lands of the public domain.[58]
Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal Section 5
of the Spanish Law of Waters of 1866. Private parties could still reclaim portions of the
sea with government permission. However, the reclaimed land could become private
land only if classified as alienable agricultural land of the public domain open to
disposition under CA No. 141. The 1935 Constitution prohibited the alienation of all
natural resources except public agricultural lands.
The Civil Code of 1950
The Civil Code of 1950 readopted substantially the definition of property of public
dominion found in the Civil Code of 1889. Articles 420 and 422 of the Civil Code of 1950
state that

Art. 420. The following things are property of public dominion:


(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads, and others of similar
character;
(2) Those which belong to the State, without being for public use, and are intended for
some public service or for the development of the national wealth.

x x x.

Art. 422. Property of public dominion, when no longer intended for public use
or for public service, shall form part of the patrimonial property of the State.

Again, the government must formally declare that the property of public dominion is
no longer needed for public use or public service, before the same could be classified
as patrimonial property of the State.[59] In the case of government reclaimed and marshy
lands of the public domain, the declaration of their being disposable, as well as the
manner of their disposition, is governed by the applicable provisions of CA No. 141.
Like the Civil Code of 1889, the Civil Code of 1950 included as property of public
dominion those properties of the State which, without being for public use, are intended
for public service or the development of the national wealth. Thus, government
reclaimed and marshy lands of the State, even if not employed for public use or public
service, if developed to enhance the national wealth, are classified as property of public
dominion.

Dispositions under the 1973 Constitution

The 1973 Constitution, which took effect on January 17, 1973, likewise adopted the
Regalian doctrine. Section 8, Article XIV of the 1973 Constitution stated that

Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and
other mineral oils, all forces of potential energy, fisheries, wildlife, and other
natural resources of the Philippines belong to the State. With the exception
of agricultural, industrial or commercial, residential, and resettlement
lands of the public domain, natural resources shall not be alienated, and
no license, concession, or lease for the exploration, development, exploitation,
or utilization of any of the natural resources shall be granted for a period
exceeding twenty-five years, renewable for not more than twenty-five years,
except as to water rights for irrigation, water supply, fisheries, or industrial
uses other than the development of water power, in which cases, beneficial
use may be the measure and the limit of the grant. (Emphasis supplied)

The 1973 Constitution prohibited the alienation of all natural resources with the
exception of agricultural, industrial or commercial, residential, and resettlement lands of
the public domain. In contrast, the 1935 Constitution barred the alienation of all natural
resources except public agricultural lands. However, the term public agricultural lands in
the 1935 Constitution encompassed industrial, commercial, residential and resettlement
lands of the public domain.[60] If the land of public domain were neither timber nor mineral
land, it would fall under the classification of agricultural land of the public domain. Both
the 1935 and 1973 Constitutions, therefore, prohibited the alienation of all natural
resources except agricultural lands of the public domain.
The 1973 Constitution, however, limited the alienation of lands of the public domain
to individuals who were citizens of the Philippines. Private corporations, even if wholly
owned by Philippine citizens, were no longer allowed to acquire alienable lands of the
public domain unlike in the 1935 Constitution. Section 11, Article XIV of the 1973
Constitution declared that

Sec. 11. The Batasang Pambansa, taking into account conservation,


ecological, and development requirements of the natural resources, shall
determine by law the size of land of the public domain which may be
developed, held or acquired by, or leased to, any qualified individual,
corporation, or association, and the conditions therefor. No private
corporation or association may hold alienable lands of the public
domain except by lease not to exceed one thousand hectares in area nor
may any citizen hold such lands by lease in excess of five hundred hectares
or acquire by purchase, homestead or grant, in excess of twenty-four
hectares. No private corporation or association may hold by lease,
concession, license or permit, timber or forest lands and other timber or forest
resources in excess of one hundred thousand hectares. However, such area
may be increased by the Batasang Pambansa upon recommendation of the
National Economic and Development Authority. (Emphasis supplied)

Thus, under the 1973 Constitution, private corporations could hold alienable lands
of the public domain only through lease. Only individuals could now acquire alienable
lands of the public domain, and private corporations became absolutely barred from
acquiring any kind of alienable land of the public domain. The constitutional ban
extended to all kinds of alienable lands of the public domain, while the statutory ban
under CA No. 141 applied only to government reclaimed, foreshore and marshy
alienable lands of the public domain.

PD No. 1084 Creating the Public Estates Authority

On February 4, 1977, then President Ferdinand Marcos issued Presidential Decree


No. 1084 creating PEA, a wholly government owned and controlled corporation with a
special charter. Sections 4 and 8 of PD No. 1084, vests PEA with the following
purposes and powers:

Sec. 4. Purpose. The Authority is hereby created for the following purposes:
(a) To reclaim land, including foreshore and submerged areas, by
dredging, filling or other means, or to acquire reclaimed land;
(b) To develop, improve, acquire, administer, deal in, subdivide,
dispose, lease and sell any and all kinds of lands, buildings, estates
and other forms of real property, owned, managed, controlled and/or
operated by the government;
(c) To provide for, operate or administer such service as may be necessary for
the efficient, economical and beneficial utilization of the above properties.

Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying
out the purposes for which it is created, have the following powers and
functions:
(a)To prescribe its by-laws.
xxx
(i) To hold lands of the public domain in excess of the area
permitted to private corporations by statute.
(j) To reclaim lands and to construct work across, or otherwise, any
stream, watercourse, canal, ditch, flume x x x.
xxx
(o) To perform such acts and exercise such functions as may be necessary
for the attainment of the purposes and objectives herein specified. (Emphasis
supplied)

PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the
public domain. Foreshore areas are those covered and uncovered by the ebb and flow
of the tide.[61] Submerged areas are those permanently under water regardless of the
ebb and flow of the tide.[62] Foreshore and submerged areas indisputably belong to the
public domain[63] and are inalienable unless reclaimed, classified as alienable lands open
to disposition, and further declared no longer needed for public service.
The ban in the 1973 Constitution on private corporations from acquiring alienable
lands of the public domain did not apply to PEA since it was then, and until today, a fully
owned government corporation. The constitutional ban applied then, as it still applies
now, only to private corporations and associations. PD No. 1084 expressly empowers
PEA to hold lands of the public domain even in excess of the area permitted to
private corporations by statute. Thus, PEA can hold title to private lands, as well as
title to lands of the public domain.
In order for PEA to sell its reclaimed foreshore and submerged alienable lands of
the public domain, there must be legislative authority empowering PEA to sell these
lands. This legislative authority is necessary in view of Section 60 of CA No.141, which
states

Sec. 60. x x x; but the land so granted, donated or transferred to a province,


municipality, or branch or subdivision of the Government shall not be
alienated, encumbered or otherwise disposed of in a manner affecting its
title, except when authorized by Congress; x x x. (Emphasis supplied)

Without such legislative authority, PEA could not sell but only lease its reclaimed
foreshore and submerged alienable lands of the public domain. Nevertheless, any
legislative authority granted to PEA to sell its reclaimed alienable lands of the public
domain would be subject to the constitutional ban on private corporations from acquiring
alienable lands of the public domain. Hence, such legislative authority could only benefit
private individuals.

Dispositions under the 1987 Constitution

The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted
the Regalian doctrine. The 1987 Constitution declares that all natural resources
are owned by the State, and except for alienable agricultural lands of the public
domain, natural resources cannot be alienated. Sections 2 and 3, Article XII of the 1987
Constitution state that

Section 2. All lands of the public domain, waters, minerals, coal, petroleum
and other mineral oils, all forces of potential energy, fisheries, forests or
timber, wildlife, flora and fauna, and other natural resources are owned by
the State. With the exception of agricultural lands, all other natural
resources shall not be alienated. The exploration, development, and
utilization of natural resources shall be under the full control and supervision
of the State. x x x.

Section 3. Lands of the public domain are classified into agricultural, forest or
timber, mineral lands, and national parks. Agricultural lands of the public
domain may be further classified by law according to the uses which they may
be devoted. Alienable lands of the public domain shall be limited to
agricultural lands. Private corporations or associations may not hold
such alienable lands of the public domain except by lease, for a period
not exceeding twenty-five years, renewable for not more than twenty-five
years, and not to exceed one thousand hectares in area. Citizens of the
Philippines may lease not more than five hundred hectares, or acquire not
more than twelve hectares thereof by purchase, homestead, or grant.

Taking into account the requirements of conservation, ecology, and


development, and subject to the requirements of agrarian reform, the
Congress shall determine, by law, the size of lands of the public domain which
may be acquired, developed, held, or leased and the conditions
therefor. (Emphasis supplied)

The 1987 Constitution continues the State policy in the 1973 Constitution banning
private corporations from acquiring any kind of alienable land of the public
domain. Like the 1973 Constitution, the 1987 Constitution allows private corporations to
hold alienable lands of the public domain only through lease. As in the 1935 and 1973
Constitutions, the general law governing the lease to private corporations of reclaimed,
foreshore and marshy alienable lands of the public domain is still CA No. 141.

The Rationale behind the Constitutional Ban

The rationale behind the constitutional ban on corporations from acquiring, except
through lease, alienable lands of the public domain is not well understood. During the
deliberations of the 1986 Constitutional Commission, the commissioners probed the
rationale behind this ban, thus:
FR. BERNAS: Mr. Vice-President, my questions have reference to page 3,
line 5 which says:

`No private corporation or association may hold alienable lands of the


public domain except by lease, not to exceed one thousand hectares
in area.

If we recall, this provision did not exist under the 1935 Constitution, but this
was introduced in the 1973 Constitution. In effect, it prohibits private
corporations from acquiring alienable public lands. But it has not been very
clear in jurisprudence what the reason for this is. In some of the cases
decided in 1982 and 1983, it was indicated that the purpose of this is to
prevent large landholdings. Is that the intent of this provision?

MR. VILLEGAS: I think that is the spirit of the provision.

FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were
instances where the Iglesia ni Cristo was not allowed to acquire a mere 313-
square meter land where a chapel stood because the Supreme Court said it
would be in violation of this. (Emphasis supplied)

In Ayog v. Cusi,[64] the Court explained the rationale behind this constitutional ban in
this way:

Indeed, one purpose of the constitutional prohibition against purchases of


public agricultural lands by private corporations is to equitably diffuse land
ownership or to encourage owner-cultivatorship and the economic family-size
farm and to prevent a recurrence of cases like the instant case. Huge
landholdings by corporations or private persons had spawned social unrest.

However, if the constitutional intent is to prevent huge landholdings, the Constitution


could have simply limited the size of alienable lands of the public domain that
corporations could acquire. The Constitution could have followed the limitations on
individuals, who could acquire not more than 24 hectares of alienable lands of the public
domain under the 1973 Constitution, and not more than 12 hectares under the 1987
Constitution.
If the constitutional intent is to encourage economic family-size farms, placing the
land in the name of a corporation would be more effective in preventing the break-up of
farmlands. If the farmland is registered in the name of a corporation, upon the death of
the owner, his heirs would inherit shares in the corporation instead of subdivided
parcels of the farmland. This would prevent the continuing break-up of farmlands into
smaller and smaller plots from one generation to the next.
In actual practice, the constitutional ban strengthens the constitutional limitation on
individuals from acquiring more than the allowed area of alienable lands of the public
domain.Without the constitutional ban, individuals who already acquired the maximum
area of alienable lands of the public domain could easily set up corporations to acquire
more alienable public lands. An individual could own as many corporations as his
means would allow him. An individual could even hide his ownership of a corporation by
putting his nominees as stockholders of the corporation. The corporation is a convenient
vehicle to circumvent the constitutional limitation on acquisition by individuals of
alienable lands of the public domain.
The constitutional intent, under the 1973 and 1987 Constitutions, is to transfer
ownership of only a limited area of alienable land of the public domain to a qualified
individual. This constitutional intent is safeguarded by the provision prohibiting
corporations from acquiring alienable lands of the public domain, since the vehicle to
circumvent the constitutional intent is removed. The available alienable public lands are
gradually decreasing in the face of an ever-growing population. The most effective way
to insure faithful adherence to this constitutional intent is to grant or sell alienable lands
of the public domain only to individuals. This, it would seem, is the practical benefit
arising from the constitutional ban.

The Amended Joint Venture Agreement

The subject matter of the Amended JVA, as stated in its second Whereas clause,
consists of three properties, namely:
1. [T]hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo
Boulevard in Paranaque and Las Pinas, Metro Manila, with a combined titled area of
1,578,441 square meters;
2. [A]nother area of 2,421,559 square meters contiguous to the three islands; and
3. [A]t AMARIs option as approved by PEA, an additional 350 hectares more or less to
regularize the configuration of the reclaimed area.[65]
PEA confirms that the Amended JVA involves the development of the Freedom Islands
and further reclamation of about 250 hectares x x x, plus an option granted to AMARI to
subsequently reclaim another 350 hectares x x x.[66]
In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84
hectares of the 750-hectare reclamation project have been reclaimed, and the rest
of the 592.15 hectares are still submerged areas forming part of Manila Bay.
Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00
for PEAs actual cost in partially reclaiming the Freedom Islands. AMARI will also
complete, at its own expense, the reclamation of the Freedom Islands. AMARI will
further shoulder all the reclamation costs of all the other areas, totaling 592.15 hectares,
still to be reclaimed. AMARI and PEA will share, in the proportion of 70 percent and 30
percent, respectively, the total net usable area which is defined in the Amended JVA as
the total reclaimed area less 30 percent earmarked for common areas. Title to AMARIs
share in the net usable area, totaling 367.5 hectares, will be issued in the name of
AMARI. Section 5.2 (c) of the Amended JVA provides that

x x x, PEA shall have the duty to execute without delay the necessary deed of
transfer or conveyance of the title pertaining to AMARIs Land share based on
the Land Allocation Plan. PEA, when requested in writing by AMARI, shall
then cause the issuance and delivery of the proper certificates of title
covering AMARIs Land Share in the name of AMARI, x x x; provided, that if
more than seventy percent (70%) of the titled area at any given time pertains
to AMARI, PEA shall deliver to AMARI only seventy percent (70%) of the titles
pertaining to AMARI, until such time when a corresponding proportionate area
of additional land pertaining to PEA has been titled. (Emphasis supplied)

Indisputably, under the Amended JVA AMARI will acquire and own a maximum of
367.5 hectares of reclaimed land which will be titled in its name.
To implement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI
joint venture PEAs statutory authority, rights and privileges to reclaim foreshore and
submerged areas in Manila Bay. Section 3.2.a of the Amended JVA states that

PEA hereby contributes to the joint venture its rights and privileges to perform
Rawland Reclamation and Horizontal Development as well as own the
Reclamation Area, thereby granting the Joint Venture the full and exclusive
right, authority and privilege to undertake the Project in accordance with the
Master Development Plan.

The Amended JVA is the product of a renegotiation of the original JVA dated April 25,
1995 and its supplemental agreement dated August 9, 1995.

The Threshold Issue

The threshold issue is whether AMARI, a private corporation, can acquire and own
under the Amended JVA 367.5 hectares of reclaimed foreshore and submerged areas
in Manila Bay in view of Sections 2 and 3, Article XII of the 1987 Constitution which
state that:

Section 2. All lands of the public domain, waters, minerals, coal, petroleum,
and other mineral oils, all forces of potential energy, fisheries, forests or
timber, wildlife, flora and fauna, and other natural resources are owned by the
State. With the exception of agricultural lands, all other natural
resources shall not be alienated. x x x.
xxx
Section 3. x x x Alienable lands of the public domain shall be limited to
agricultural lands. Private corporations or associations may not hold such
alienable lands of the public domain except by lease, x x x.(Emphasis
supplied)

Classification of Reclaimed Foreshore and Submerged Areas

PEA readily concedes that lands reclaimed from foreshore or submerged areas of
Manila Bay are alienable or disposable lands of the public domain. In its
Memorandum,[67] PEA admits that

Under the Public Land Act (CA 141, as amended), reclaimed lands are
classified as alienable and disposable lands of the public domain:

Sec. 59. The lands disposable under this title shall be classified as follows:

(a) Lands reclaimed by the government by dredging, filling, or


other means;
x x x. (Emphasis supplied)
Likewise, the Legal Task Force[68] constituted under Presidential Administrative
Order No. 365 admitted in its Report and Recommendation to then President Fidel V.
Ramos, [R]eclaimed lands are classified as alienable and disposable lands of the
public domain.[69] The Legal Task Force concluded that

D. Conclusion

Reclaimed lands are lands of the public domain. However, by statutory


authority, the rights of ownership and disposition over reclaimed lands have
been transferred to PEA, by virtue of which PEA, as owner, may validly
convey the same to any qualified person without violating the Constitution or
any statute.

The constitutional provision prohibiting private corporations from holding


public land, except by lease (Sec. 3, Art. XVII, 1987 Constitution), does not
[70]

apply to reclaimed lands whose ownership has passed on to PEA by statutory


grant.

Under Section 2, Article XII of the 1987 Constitution, the foreshore and submerged
areas of Manila Bay are part of the lands of the public domain, waters x x x and other
natural resources and consequently owned by the State. As such, foreshore and
submerged areas shall not be alienated, unless they are classified as agricultural lands
of the public domain. The mere reclamation of these areas by PEA does not convert
these inalienable natural resources of the State into alienable or disposable lands of the
public domain. There must be a law or presidential proclamation officially classifying
these reclaimed lands as alienable or disposable and open to disposition or
concession. Moreover, these reclaimed lands cannot be classified as alienable or
disposable if the law has reserved them for some public or quasi-public use.[71]
Section 8 of CA No. 141 provides that only those lands shall be declared open to
disposition or concession which have been officially delimited and classified.[72] The
President has the authority to classify inalienable lands of the public domain into
alienable or disposable lands of the public domain, pursuant to Section 6 of CA No.
141. In Laurel vs. Garcia,[73] the Executive Department attempted to sell the Roppongi
property in Tokyo, Japan, which was acquired by the Philippine Government for use as
the Chancery of the Philippine Embassy.Although the Chancery had transferred to
another location thirteen years earlier, the Court still ruled that, under Article 422 [74] of the
Civil Code, a property of public dominion retains such character until formally
declared otherwise. The Court ruled that

The fact that the Roppongi site has not been used for a long time for actual
Embassy service does not automatically convert it to patrimonial property. Any
such conversion happens only if the property is withdrawn from public use
(Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]. A
property continues to be part of the public domain, not available for
private appropriation or ownership until there is a formal declaration on
the part of the government to withdraw it from being such (Ignacio v.
Director of Lands, 108 Phil. 335 [1960]. (Emphasis supplied)

PD No. 1085, issued on February 4, 1977, authorized the issuance of special land
patents for lands reclaimed by PEA from the foreshore or submerged areas of Manila
Bay. On January 19, 1988 then President Corazon C. Aquino issued Special Patent No.
3517 in the name of PEA for the 157.84 hectares comprising the partially reclaimed
Freedom Islands.Subsequently, on April 9, 1999 the Register of Deeds of the
Municipality of Paranaque issued TCT Nos. 7309, 7311 and 7312 in the name of PEA
pursuant to Section 103 of PD No. 1529 authorizing the issuance of certificates of title
corresponding to land patents. To this day, these certificates of title are still in the name
of PEA.
PD No. 1085, coupled with President Aquinos actual issuance of a special patent
covering the Freedom Islands, is equivalent to an official proclamation classifying the
Freedom Islands as alienable or disposable lands of the public domain. PD No. 1085
and President Aquinos issuance of a land patent also constitute a declaration that the
Freedom Islands are no longer needed for public service. The Freedom Islands are
thus alienable or disposable lands of the public domain, open to disposition or
concession to qualified parties.
At the time then President Aquino issued Special Patent No. 3517, PEA had already
reclaimed the Freedom Islands although subsequently there were partial erosions on
some areas. The government had also completed the necessary surveys on these
islands. Thus, the Freedom Islands were no longer part of Manila Bay but part of the
land mass. Section 3, Article XII of the 1987 Constitution classifies lands of the public
domain into agricultural, forest or timber, mineral lands, and national parks. Being
neither timber, mineral, nor national park lands, the reclaimed Freedom Islands
necessarily fall under the classification of agricultural lands of the public domain. Under
the 1987 Constitution, agricultural lands of the public domain are the only natural
resources that the State may alienate to qualified private parties. All other natural
resources, such as the seas or bays, are waters x x x owned by the State forming part
of the public domain, and are inalienable pursuant to Section 2, Article XII of the 1987
Constitution.
AMARI claims that the Freedom Islands are private lands because CDCP, then a
private corporation, reclaimed the islands under a contract dated November 20, 1973
with the Commissioner of Public Highways. AMARI, citing Article 5 of the Spanish Law
of Waters of 1866, argues that if the ownership of reclaimed lands may be given to the
party constructing the works, then it cannot be said that reclaimed lands are lands of the
public domain which the State may not alienate. [75] Article 5 of the Spanish Law of
Waters reads as follows:

Article 5. Lands reclaimed from the sea in consequence of works constructed


by the State, or by the provinces, pueblos or private persons, with proper
permission, shall become the property of the party constructing such
works, unless otherwise provided by the terms of the grant of authority.
(Emphasis supplied)

Under Article 5 of the Spanish Law of Waters of 1866, private parties could reclaim
from the sea only with proper permission from the State. Private parties could own the
reclaimed land only if not otherwise provided by the terms of the grant of authority. This
clearly meant that no one could reclaim from the sea without permission from the State
because the sea is property of public dominion. It also meant that the State could grant
or withhold ownership of the reclaimed land because any reclaimed land, like the sea
from which it emerged, belonged to the State. Thus, a private person reclaiming from
the sea without permission from the State could not acquire ownership of the reclaimed
land which would remain property of public dominion like the sea it replaced. [76] Article 5
of the Spanish Law of Waters of 1866 adopted the time-honored principle of land
ownership that all lands that were not acquired from the government, either by purchase
or by grant, belong to the public domain.[77]
Article 5 of the Spanish Law of Waters must be read together with laws
subsequently enacted on the disposition of public lands. In particular, CA No. 141
requires that lands of the public domain must first be classified as alienable or
disposable before the government can alienate them. These lands must not be reserved
for public or quasi-public purposes.[78]Moreover, the contract between CDCP and the
government was executed after the effectivity of the 1973 Constitution which barred
private corporations from acquiring any kind of alienable land of the public domain. This
contract could not have converted the Freedom Islands into private lands of a private
corporation.
Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws
authorizing the reclamation of areas under water and revested solely in the National
Government the power to reclaim lands. Section 1 of PD No. 3-A declared that

The provisions of any law to the contrary notwithstanding, the


reclamation of areas under water, whether foreshore or inland, shall
be limited to the National Government or any person authorized by it
under a proper contract. (Emphasis supplied)

x x x.

PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because
reclamation of areas under water could now be undertaken only by the National
Government or by a person contracted by the National Government. Private parties may
reclaim from the sea only under a contract with the National Government, and no longer
by grant or permission as provided in Section 5 of the Spanish Law of Waters of 1866.
Executive Order No. 525, issued on February 14, 1979, designated PEA as the
National Governments implementing arm to undertake all reclamation projects of the
government, which shall be undertaken by the PEA or through a proper contract
executed by it with any person or entity. Under such contract, a private party
receives compensation for reclamation services rendered to PEA. Payment to the
contractor may be in cash, or in kind consisting of portions of the reclaimed land,
subject to the constitutional ban on private corporations from acquiring alienable lands
of the public domain. The reclaimed land can be used as payment in kind only if the
reclaimed land is first classified as alienable or disposable land open to disposition, and
then declared no longer needed for public service.
The Amended JVA covers not only the Freedom Islands, but also an additional
592.15 hectares which are still submerged and forming part of Manila Bay. There is no
legislative or Presidential act classifying these submerged areas as alienable or
disposable lands of the public domain open to disposition. These submerged
areas are not covered by any patent or certificate of title. There can be no dispute that
these submerged areas form part of the public domain, and in their present state
are inalienable and outside the commerce of man. Until reclaimed from the sea,
these submerged areas are, under the Constitution, waters x x x owned by the State,
forming part of the public domain and consequently inalienable.Only when actually
reclaimed from the sea can these submerged areas be classified as public agricultural
lands, which under the Constitution are the only natural resources that the State may
alienate. Once reclaimed and transformed into public agricultural lands, the government
may then officially classify these lands as alienable or disposable lands open to
disposition.Thereafter, the government may declare these lands no longer needed for
public service. Only then can these reclaimed lands be considered alienable or
disposable lands of the public domain and within the commerce of man.
The classification of PEAs reclaimed foreshore and submerged lands into alienable
or disposable lands open to disposition is necessary because PEA is tasked under its
charter to undertake public services that require the use of lands of the public
domain. Under Section 5 of PD No. 1084, the functions of PEA include the following:
[T]o own or operate railroads, tramways and other kinds of land transportation, x x x;
[T]o construct, maintain and operate such systems of sanitary sewers as may be
necessary; [T]o construct, maintain and operate such storm drains as may be
necessary. PEA is empowered to issue rules and regulations as may be necessary for
the proper use by private parties of any or all of the highways, roads, utilities,
buildings and/or any of its properties and to impose or collect fees or tolls for their
use. Thus, part of the reclaimed foreshore and submerged lands held by the PEA would
actually be needed for public use or service since many of the functions imposed on
PEA by its charter constitute essential public services.
Moreover, Section 1 of Executive Order No. 525 provides that PEA shall be
primarily responsible for integrating, directing, and coordinating all reclamation projects
for and on behalf of the National Government. The same section also states that [A]ll
reclamation projects shall be approved by the President upon recommendation of the
PEA, and shall be undertaken by the PEA or through a proper contract executed by it
with any person or entity; x x x. Thus, under EO No. 525, in relation to PD No. 3-A and
PD No.1084, PEA became the primary implementing agency of the National
Government to reclaim foreshore and submerged lands of the public domain. EO No.
525 recognized PEA as the government entity to undertake the reclamation of lands
and ensure their maximum utilization in promoting public welfare and
interests.[79] Since large portions of these reclaimed lands would obviously be needed
for public service, there must be a formal declaration segregating reclaimed lands no
longer needed for public service from those still needed for public service.
Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA shall belong
to or be owned by the PEA, could not automatically operate to classify inalienable lands
into alienable or disposable lands of the public domain. Otherwise, reclaimed foreshore
and submerged lands of the public domain would automatically become alienable once
reclaimed by PEA, whether or not classified as alienable or disposable.
The Revised Administrative Code of 1987, a later law than either PD No. 1084 or
EO No. 525, vests in the Department of Environment and Natural Resources (DENR for
brevity) the following powers and functions:

Sec. 4. Powers and Functions. The Department shall:


(1) x x x
xxx

(4) Exercise supervision and control over forest lands, alienable and
disposable public lands, mineral resources and, in the process of exercising
such control, impose appropriate taxes, fees, charges, rentals and any such
form of levy and collect such revenues for the exploration, development,
utilization or gathering of such resources;
xxx
(14) Promulgate rules, regulations and guidelines on the issuance of
licenses, permits, concessions, lease agreements and such other
privileges concerning the development, exploration and utilization of the
countrys marine, freshwater, and brackish water and over all aquatic
resources of the country and shall continue to oversee, supervise and
police our natural resources; cancel or cause to cancel such privileges
upon failure, non-compliance or violations of any regulation, order, and for all
other causes which are in furtherance of the conservation of natural resources
and supportive of the national interest;

(15) Exercise exclusive jurisdiction on the management and disposition


of all lands of the public domain and serve as the sole agency
responsible for classification, sub-classification, surveying and titling of
lands in consultation with appropriate agencies. (Emphasis supplied)
[80]

As manager, conservator and overseer of the natural resources of the State, DENR
exercises supervision and control over alienable and disposable public lands. DENR
also exercises exclusive jurisdiction on the management and disposition of all lands of
the public domain. Thus, DENR decides whether areas under water, like foreshore or
submerged areas of Manila Bay, should be reclaimed or not. This means that PEA
needs authorization from DENR before PEA can undertake reclamation projects in
Manila Bay, or in any part of the country.
DENR also exercises exclusive jurisdiction over the disposition of all lands of the
public domain. Hence, DENR decides whether reclaimed lands of PEA should be
classified as alienable under Sections 6[81] and 7[82] of CA No. 141. Once DENR decides
that the reclaimed lands should be so classified, it then recommends to the President
the issuance of a proclamation classifying the lands as alienable or disposable lands of
the public domain open to disposition. We note that then DENR Secretary Fulgencio S.
Factoran, Jr. countersigned Special Patent No. 3517 in compliance with the Revised
Administrative Code and Sections 6 and 7 of CA No. 141.
In short, DENR is vested with the power to authorize the reclamation of areas under
water, while PEA is vested with the power to undertake the physical reclamation of
areas under water, whether directly or through private contractors. DENR is also
empowered to classify lands of the public domain into alienable or disposable lands
subject to the approval of the President. On the other hand, PEA is tasked to develop,
sell or lease the reclaimed alienable lands of the public domain.
Clearly, the mere physical act of reclamation by PEA of foreshore or submerged
areas does not make the reclaimed lands alienable or disposable lands of the public
domain, much less patrimonial lands of PEA. Likewise, the mere transfer by the
National Government of lands of the public domain to PEA does not make the lands
alienable or disposable lands of the public domain, much less patrimonial lands of PEA.
Absent two official acts a classification that these lands are alienable or disposable
and open to disposition and a declaration that these lands are not needed for public
service, lands reclaimed by PEA remain inalienable lands of the public domain. Only
such an official classification and formal declaration can convert reclaimed lands into
alienable or disposable lands of the public domain, open to disposition under the
Constitution, Title I and Title III[83] of CA No. 141 and other applicable laws.[84]

PEAs Authority to Sell Reclaimed Lands

PEA, like the Legal Task Force, argues that as alienable or disposable lands of the
public domain, the reclaimed lands shall be disposed of in accordance with CA No. 141,
the Public Land Act. PEA, citing Section 60 of CA No. 141, admits that reclaimed lands
transferred to a branch or subdivision of the government shall not be alienated,
encumbered, or otherwise disposed of in a manner affecting its title, except when
authorized by Congress: x x x.[85] (Emphasis by PEA)
In Laurel vs. Garcia,[86] the Court cited Section 48 of the Revised Administrative
Code of 1987, which states that

Sec. 48. Official Authorized to Convey Real Property. Whenever real property
of the Government is authorized by law to be conveyed, the deed of
conveyance shall be executed in behalf of the government by the following: x
x x.

Thus, the Court concluded that a law is needed to convey any real property belonging to
the Government. The Court declared that -

It is not for the President to convey real property of the government on his or
her own sole will. Any such conveyance must be authorized and
approved by a law enacted by the Congress. It requires executive and
legislative concurrence. (Emphasis supplied)

PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority
allowing PEA to sell its reclaimed lands. PD No. 1085, issued on February 4, 1977,
provides that

The land reclaimed in the foreshore and offshore area of Manila


Bay pursuant to the contract for the reclamation and construction of the
Manila-Cavite Coastal Road Project between the Republic of the Philippines
and the Construction and Development Corporation of the Philippines dated
November 20, 1973 and/or any other contract or reclamation covering the
same area is hereby transferred, conveyed and assigned to the
ownership and administration of the Public Estates Authority established
pursuant to PD No. 1084; Provided, however, That the rights and interests of
the Construction and Development Corporation of the Philippines pursuant to
the aforesaid contract shall be recognized and respected.

Henceforth, the Public Estates Authority shall exercise the rights and assume
the obligations of the Republic of the Philippines (Department of Public
Highways) arising from, or incident to, the aforesaid contract between the
Republic of the Philippines and the Construction and Development
Corporation of the Philippines.

In consideration of the foregoing transfer and assignment, the Public Estates


Authority shall issue in favor of the Republic of the Philippines the
corresponding shares of stock in said entity with an issued value of said
shares of stock (which) shall be deemed fully paid and non-assessable.

The Secretary of Public Highways and the General Manager of the Public
Estates Authority shall execute such contracts or agreements, including
appropriate agreements with the Construction and Development Corporation
of the Philippines, as may be necessary to implement the above.

Special land patent/patents shall be issued by the Secretary of Natural


Resources in favor of the Public Estates Authority without prejudice to
the subsequent transfer to the contractor or his assignees of such
portion or portions of the land reclaimed or to be reclaimed as provided
for in the above-mentioned contract. On the basis of such patents, the
Land Registration Commission shall issue the corresponding certificate
of title. (Emphasis supplied)

On the other hand, Section 3 of EO No. 525, issued on February 14, 1979, provides
that -

Sec. 3. All lands reclaimed by PEA shall belong to or be owned by the


PEA which shall be responsible for its administration, development, utilization
or disposition in accordance with the provisions of Presidential Decree No.
1084. Any and all income that the PEA may derive from the sale, lease or use
of reclaimed lands shall be used in accordance with the provisions of
Presidential Decree No. 1084.

There is no express authority under either PD No. 1085 or EO No. 525 for PEA to
sell its reclaimed lands. PD No. 1085 merely transferred ownership and administration
of lands reclaimed from Manila Bay to PEA, while EO No. 525 declared that lands
reclaimed by PEA shall belong to or be owned by PEA. EO No. 525 expressly states
that PEA should dispose of its reclaimed lands in accordance with the provisions of
Presidential Decree No. 1084, the charter of PEA.
PEAs charter, however, expressly tasks PEA to develop, improve, acquire,
administer, deal in, subdivide, dispose, lease and sell any and all kinds of lands x x x
owned, managed, controlled and/or operated by the government. [87] (Emphasis
supplied) There is, therefore, legislative authority granted to PEA to sell its lands,
whether patrimonial or alienable lands of the public domain. PEA may sell to
private parties its patrimonial properties in accordance with the PEA charter free from
constitutional limitations. The constitutional ban on private corporations from acquiring
alienable lands of the public domain does not apply to the sale of PEAs patrimonial
lands.
PEA may also sell its alienable or disposable lands of the public domain to
private individuals since, with the legislative authority, there is no longer any statutory
prohibition against such sales and the constitutional ban does not apply to
individuals. PEA, however, cannot sell any of its alienable or disposable lands of the
public domain to private corporations since Section 3, Article XII of the 1987
Constitution expressly prohibits such sales. The legislative authority benefits only
individuals. Private corporations remain barred from acquiring any kind of alienable land
of the public domain, including government reclaimed lands.
The provision in PD No. 1085 stating that portions of the reclaimed lands could be
transferred by PEA to the contractor or his assignees (Emphasis supplied) would not
apply to private corporations but only to individuals because of the constitutional
ban. Otherwise, the provisions of PD No. 1085 would violate both the 1973 and 1987
Constitutions.

The requirement of public auction in the sale of reclaimed lands

Assuming the reclaimed lands of PEA are classified as alienable or disposable


lands open to disposition, and further declared no longer needed for public service, PEA
would have to conduct a public bidding in selling or leasing these lands. PEA must
observe the provisions of Sections 63 and 67 of CA No. 141 requiring public auction, in
the absence of a law exempting PEA from holding a public auction. [88] Special Patent No.
3517 expressly states that the patent is issued by authority of the Constitution and PD
No. 1084, supplemented by Commonwealth Act No. 141, as amended. This is an
acknowledgment that the provisions of CA No. 141 apply to the disposition of reclaimed
alienable lands of the public domain unless otherwise provided by law. Executive Order
No. 654,[89] which authorizes PEA to determine the kind and manner of payment for the
transfer of its assets and properties, does not exempt PEA from the requirement of
public auction. EO No. 654 merely authorizes PEA to decide the mode of payment,
whether in kind and in installment, but does not authorize PEA to dispense with public
auction.
Moreover, under Section 79 of PD No. 1445, otherwise known as the Government
Auditing Code, the government is required to sell valuable government property through
public bidding. Section 79 of PD No. 1445 mandates that
Section 79. When government property has become unserviceable for any
cause, or is no longer needed, it shall, upon application of the officer
accountable therefor, be inspected by the head of the agency or his duly
authorized representative in the presence of the auditor concerned and, if
found to be valueless or unsaleable, it may be destroyed in their presence. If
found to be valuable, it may be sold at public auction to the highest
bidder under the supervision of the proper committee on award or similar
body in the presence of the auditor concerned or other authorized
representative of the Commission, after advertising by printed notice in the
Official Gazette, or for not less than three consecutive days in any
newspaper of general circulation, or where the value of the property does
not warrant the expense of publication, by notices posted for a like period in at
least three public places in the locality where the property is to be sold. In the
event that the public auction fails, the property may be sold at a private
sale at such price as may be fixed by the same committee or body
concerned and approved by the Commission.

It is only when the public auction fails that a negotiated sale is allowed, in which case
the Commission on Audit must approve the selling price. [90] The Commission on Audit
implements Section 79 of the Government Auditing Code through Circular No. 89-
296[91] dated January 27, 1989. This circular emphasizes that government assets must
be disposed of only through public auction, and a negotiated sale can be resorted to
only in case of failure of public auction.
At the public auction sale, only Philippine citizens are qualified to bid for PEAs
reclaimed foreshore and submerged alienable lands of the public domain. Private
corporations are barred from bidding at the auction sale of any kind of alienable land of
the public domain.
PEA originally scheduled a public bidding for the Freedom Islands on December 10,
1991. PEA imposed a condition that the winning bidder should reclaim another 250
hectares of submerged areas to regularize the shape of the Freedom Islands, under a
60-40 sharing of the additional reclaimed areas in favor of the winning bidder.[92] No one,
however, submitted a bid. On December 23, 1994, the Government Corporate Counsel
advised PEA it could sell the Freedom Islands through negotiation, without need of
another public bidding, because of the failure of the public bidding on December 10,
1991.[93]
However, the original JVA dated April 25, 1995 covered not only the Freedom
Islands and the additional 250 hectares still to be reclaimed, it also granted an option to
AMARI to reclaim another 350 hectares. The original JVA, a negotiated contract,
enlarged the reclamation area to 750 hectares.[94] The failure of public bidding on
December 10, 1991, involving only 407.84 hectares, [95] is not a valid justification for a
negotiated sale of 750 hectares, almost double the area publicly auctioned. Besides, the
failure of public bidding happened on December 10, 1991, more than three years before
the signing of the original JVA on April 25, 1995. The economic situation in the country
had greatly improved during the intervening period.

Reclamation under the BOT Law and the Local Government Code

The constitutional prohibition in Section 3, Article XII of the 1987 Constitution is


absolute and clear: Private corporations or associations may not hold such alienable
lands of the public domain except by lease, x x x. Even Republic Act No. 6957 (BOT
Law, for brevity), cited by PEA and AMARI as legislative authority to sell reclaimed
lands to private parties, recognizes the constitutional ban. Section 6 of RA No. 6957
states

Sec. 6. Repayment Scheme. - For the financing, construction, operation and


maintenance of any infrastructure projects undertaken through the build-
operate-and-transfer arrangement or any of its variations pursuant to the
provisions of this Act, the project proponent x x x may likewise be repaid in the
form of a share in the revenue of the project or other non-monetary payments,
such as, but not limited to, the grant of a portion or percentage of the
reclaimed land, subject to the constitutional requirements with respect to
the ownership of the land: x x x. (Emphasis supplied)

A private corporation, even one that undertakes the physical reclamation of a


government BOT project, cannot acquire reclaimed alienable lands of the public domain
in view of the constitutional ban.
Section 302 of the Local Government Code, also mentioned by PEA and AMARI,
authorizes local governments in land reclamation projects to pay the contractor or
developer in kind consisting of a percentage of the reclaimed land, to wit:

Section 302. Financing, Construction, Maintenance, Operation, and


Management of Infrastructure Projects by the Private Sector. x x x
xxx
In case of land reclamation or construction of industrial estates, the repayment
plan may consist of the grant of a portion or percentage of the reclaimed land
or the industrial estate constructed.

Although Section 302 of the Local Government Code does not contain a proviso similar
to that of the BOT Law, the constitutional restrictions on land ownership automatically
apply even though not expressly mentioned in the Local Government Code.
Thus, under either the BOT Law or the Local Government Code, the contractor or
developer, if a corporate entity, can only be paid with leaseholds on portions of the
reclaimed land. If the contractor or developer is an individual, portions of the reclaimed
land, not exceeding 12 hectares[96] of non-agricultural lands, may be conveyed to him in
ownership in view of the legislative authority allowing such conveyance. This is the only
way these provisions of the BOT Law and the Local Government Code can avoid a
direct collision with Section 3, Article XII of the 1987 Constitution.

Registration of lands of the public domain

Finally, PEA theorizes that the act of conveying the ownership of the reclaimed
lands to public respondent PEA transformed such lands of the public domain to private
lands. This theory is echoed by AMARI which maintains that the issuance of the special
patent leading to the eventual issuance of title takes the subject land away from the land
of public domain and converts the property into patrimonial or private property. In short,
PEA and AMARI contend that with the issuance of Special Patent No. 3517 and the
corresponding certificates of titles, the 157.84 hectares comprising the Freedom Islands
have become private lands of PEA. In support of their theory, PEA and AMARI cite the
following rulings of the Court:
1. Sumail v. Judge of CFI of Cotabato,[97] where the Court held
Once the patent was granted and the corresponding certificate of title was issued,
the land ceased to be part of the public domain and became private property over
which the Director of Lands has neither control nor jurisdiction.
2. Lee Hong Hok v. David,[98] where the Court declared -
After the registration and issuance of the certificate and duplicate certificate of title
based on a public land patent, the land covered thereby automatically comes under
the operation of Republic Act 496 subject to all the safeguards provided therein.
3. Heirs of Gregorio Tengco v. Heirs of Jose Aliwalas,[99] where the Court ruled -
While the Director of Lands has the power to review homestead patents, he may do
so only so long as the land remains part of the public domain and continues to be
under his exclusive control; but once the patent is registered and a certificate of title
is issued, the land ceases to be part of the public domain and becomes private
property over which the Director of Lands has neither control nor jurisdiction.
4. Manalo v. Intermediate Appellate Court,[100] where the Court held
When the lots in dispute were certified as disposable on May 19, 1971, and free
patents were issued covering the same in favor of the private respondents, the said
lots ceased to be part of the public domain and, therefore, the Director of Lands lost
jurisdiction over the same.
5.Republic v. Court of Appeals,[101] where the Court stated
Proclamation No. 350, dated October 9, 1956, of President Magsaysay legally
effected a land grant to the Mindanao Medical Center, Bureau of Medical Services,
Department of Health, of the whole lot, validly sufficient for initial registration under
the Land Registration Act. Such land grant is constitutive of a fee simple title or
absolute title in favor of petitioner Mindanao Medical Center. Thus, Section 122 of
the Act, which governs the registration of grants or patents involving public lands,
provides that Whenever public lands in the Philippine Islands belonging to the
Government of the United States or to the Government of the Philippines are
alienated, granted or conveyed to persons or to public or private corporations, the
same shall be brought forthwith under the operation of this Act (Land Registration
Act, Act 496) and shall become registered lands.
The first four cases cited involve petitions to cancel the land patents and the
corresponding certificates of titles issued to private parties. These four cases
uniformly hold that the Director of Lands has no jurisdiction over private lands or that
upon issuance of the certificate of title the land automatically comes under the Torrens
System. The fifth case cited involves the registration under the Torrens System of a
12.8-hectare public land granted by the National Government to Mindanao Medical
Center, a government unit under the Department of Health. The National Government
transferred the 12.8-hectare public land to serve as the site for the hospital buildings
and other facilities of Mindanao Medical Center, which performed a public service. The
Court affirmed the registration of the 12.8-hectare public land in the name of Mindanao
Medical Center under Section 122 of Act No. 496. This fifth case is an example of a
public land being registered under Act No. 496 without the land losing its character as a
property of public dominion.
In the instant case, the only patent and certificates of title issued are those in the
name of PEA, a wholly government owned corporation performing public as well as
proprietary functions. No patent or certificate of title has been issued to any private
party. No one is asking the Director of Lands to cancel PEAs patent or certificates of
title. In fact, the thrust of the instant petition is that PEAs certificates of title should
remain with PEA, and the land covered by these certificates, being alienable lands of
the public domain, should not be sold to a private corporation.
Registration of land under Act No. 496 or PD No. 1529 does not vest in the
registrant private or public ownership of the land. Registration is not a mode of acquiring
ownership but is merely evidence of ownership previously conferred by any of the
recognized modes of acquiring ownership. Registration does not give the registrant a
better right than what the registrant had prior to the registration. [102] The registration of
lands of the public domain under the Torrens system, by itself, cannot convert public
lands into private lands.[103]
Jurisprudence holding that upon the grant of the patent or issuance of the certificate
of title the alienable land of the public domain automatically becomes private land
cannot apply to government units and entities like PEA. The transfer of the Freedom
Islands to PEA was made subject to the provisions of CA No. 141 as expressly stated in
Special Patent No. 3517 issued by then President Aquino, to wit:

NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the


Philippines and in conformity with the provisions of Presidential Decree No.
1084, supplemented by Commonwealth Act No. 141, as amended, there
are hereby granted and conveyed unto the Public Estates Authority the
aforesaid tracts of land containing a total area of one million nine hundred
fifteen thousand eight hundred ninety four (1,915,894) square meters; the
technical description of which are hereto attached and made an integral part
hereof. (Emphasis supplied)

Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters not
covered by PD No. 1084. Section 60 of CA No. 141 prohibits, except when authorized
by Congress, the sale of alienable lands of the public domain that are transferred to
government units or entities. Section 60 of CA No. 141 constitutes, under Section 44 of
PD No. 1529, a statutory lien affecting title of the registered land even if not annotated
on the certificate of title.[104] Alienable lands of the public domain held by government
entities under Section 60 of CA No. 141 remain public lands because they cannot be
alienated or encumbered unless Congress passes a law authorizing their
disposition. Congress, however, cannot authorize the sale to private corporations of
reclaimed alienable lands of the public domain because of the constitutional ban. Only
individuals can benefit from such law.
The grant of legislative authority to sell public lands in accordance with Section 60
of CA No. 141 does not automatically convert alienable lands of the public domain into
private or patrimonial lands. The alienable lands of the public domain must be
transferred to qualified private parties, or to government entities not tasked to dispose of
public lands, before these lands can become private or patrimonial lands. Otherwise,
the constitutional ban will become illusory if Congress can declare lands of the public
domain as private or patrimonial lands in the hands of a government agency tasked to
dispose of public lands. This will allow private corporations to acquire directly from
government agencies limitless areas of lands which, prior to such law, are concededly
public lands.
Under EO No. 525, PEA became the central implementing agency of the National
Government to reclaim foreshore and submerged areas of the public domain. Thus, EO
No. 525 declares that

EXECUTIVE ORDER NO. 525

Designating the Public Estates Authority as the Agency Primarily Responsible


for all Reclamation Projects

Whereas, there are several reclamation projects which are ongoing or being
proposed to be undertaken in various parts of the country which need to be
evaluated for consistency with national programs;

Whereas, there is a need to give further institutional support to the


Governments declared policy to provide for a coordinated, economical and
efficient reclamation of lands;

Whereas, Presidential Decree No. 3-A requires that all reclamation of areas
shall be limited to the National Government or any person authorized by it
under proper contract;
Whereas, a central authority is needed to act on behalf of the National
Government which shall ensure a coordinated and integrated approach
in the reclamation of lands;

Whereas, Presidential Decree No. 1084 creates the Public Estates


Authority as a government corporation to undertake reclamation of
lands and ensure their maximum utilization in promoting public welfare
and interests; and

Whereas, Presidential Decree No. 1416 provides the President with


continuing authority to reorganize the national government including the
transfer, abolition, or merger of functions and offices.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the


Philippines, by virtue of the powers vested in me by the Constitution and
pursuant to Presidential Decree No. 1416, do hereby order and direct the
following:

Section 1. The Public Estates Authority (PEA) shall be primarily


responsible for integrating, directing, and coordinating all reclamation
projects for and on behalf of the National Government. All reclamation
projects shall be approved by the President upon recommendation of the
PEA, and shall be undertaken by the PEA or through a proper contract
executed by it with any person or entity; Provided, that, reclamation projects of
any national government agency or entity authorized under its charter shall be
undertaken in consultation with the PEA upon approval of the President.

xxx.

As the central implementing agency tasked to undertake reclamation projects


nationwide, with authority to sell reclaimed lands, PEA took the place of DENR as the
government agency charged with leasing or selling reclaimed lands of the public
domain. The reclaimed lands being leased or sold by PEA are not private lands, in the
same manner that DENR, when it disposes of other alienable lands, does not dispose of
private lands but alienable lands of the public domain. Only when qualified private
parties acquire these lands will the lands become private lands. In the hands of the
government agency tasked and authorized to dispose of alienable of disposable
lands of the public domain, these lands are still public, not private lands.
Furthermore, PEAs charter expressly states that PEA shall hold lands of the
public domain as well as any and all kinds of lands. PEA can hold both lands of the
public domain and private lands. Thus, the mere fact that alienable lands of the public
domain like the Freedom Islands are transferred to PEA and issued land patents or
certificates of title in PEAs name does not automatically make such lands private.
To allow vast areas of reclaimed lands of the public domain to be transferred to
PEA as private lands will sanction a gross violation of the constitutional ban on private
corporations from acquiring any kind of alienable land of the public domain. PEA will
simply turn around, as PEA has now done under the Amended JVA, and transfer
several hundreds of hectares of these reclaimed and still to be reclaimed lands to a
single private corporation in only one transaction. This scheme will effectively nullify the
constitutional ban in Section 3, Article XII of the 1987 Constitution which was intended
to diffuse equitably the ownership of alienable lands of the public domain among
Filipinos, now numbering over 80 million strong.
This scheme, if allowed, can even be applied to alienable agricultural lands of the
public domain since PEA can acquire x x x any and all kinds of lands. This will open the
floodgates to corporations and even individuals acquiring hundreds of hectares of
alienable lands of the public domain under the guise that in the hands of PEA these
lands are private lands. This will result in corporations amassing huge landholdings
never before seen in this country - creating the very evil that the constitutional ban was
designed to prevent. This will completely reverse the clear direction of constitutional
development in this country. The 1935 Constitution allowed private corporations to
acquire not more than 1,024 hectares of public lands.[105] The 1973 Constitution
prohibited private corporations from acquiring any kind of public land, and the 1987
Constitution has unequivocally reiterated this prohibition.
The contention of PEA and AMARI that public lands, once registered under Act No.
496 or PD No. 1529, automatically become private lands is contrary to existing
laws. Several laws authorize lands of the public domain to be registered under the
Torrens System or Act No. 496, now PD No. 1529, without losing their character as
public lands. Section 122 of Act No. 496, and Section 103 of PD No. 1529, respectively,
provide as follows:

Act No. 496

Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x
x Government of the Philippine Islands are alienated, granted, or conveyed to
persons or the public or private corporations, the same shall be brought
forthwith under the operation of this Act and shall become registered lands.

PD No. 1529

Sec. 103. Certificate of Title to Patents. Whenever public land is by the


Government alienated, granted or conveyed to any person, the same shall be
brought forthwith under the operation of this Decree. (Emphasis supplied)

Based on its legislative history, the phrase conveyed to any person in Section 103 of PD
No. 1529 includes conveyances of public lands to public corporations.
Alienable lands of the public domain granted, donated, or transferred to a province,
municipality, or branch or subdivision of the Government, as provided in Section 60 of
CA No. 141, may be registered under the Torrens System pursuant to Section 103 of
PD No. 1529. Such registration, however, is expressly subject to the condition in
Section 60 of CA No. 141 that the land shall not be alienated, encumbered or otherwise
disposed of in a manner affecting its title, except when authorized by
Congress. This provision refers to government reclaimed, foreshore and marshy lands
of the public domain that have been titled but still cannot be alienated or encumbered
unless expressly authorized by Congress. The need for legislative authority prevents
the registered land of the public domain from becoming private land that can be
disposed of to qualified private parties.
The Revised Administrative Code of 1987 also recognizes that lands of the public
domain may be registered under the Torrens System. Section 48, Chapter 12, Book I of
the Code states

Sec. 48. Official Authorized to Convey Real Property. Whenever real property
of the Government is authorized by law to be conveyed, the deed of
conveyance shall be executed in behalf of the government by the following:
(1) x x x
(2) For property belonging to the Republic of the Philippines, but titled in
the name of any political subdivision or of any corporate agency or
instrumentality, by the executive head of the agency or
instrumentality. (Emphasis supplied)

Thus, private property purchased by the National Government for expansion of a public
wharf may be titled in the name of a government corporation regulating port operations
in the country. Private property purchased by the National Government for expansion of
an airport may also be titled in the name of the government agency tasked to administer
the airport.Private property donated to a municipality for use as a town plaza or public
school site may likewise be titled in the name of the municipality. [106] All these properties
become properties of the public domain, and if already registered under Act No. 496 or
PD No. 1529, remain registered land. There is no requirement or provision in any
existing law for the de-registration of land from the Torrens System.
Private lands taken by the Government for public use under its power of eminent
domain become unquestionably part of the public domain. Nevertheless, Section 85 of
PD No. 1529 authorizes the Register of Deeds to issue in the name of the National
Government new certificates of title covering such expropriated lands. Section 85 of PD
No. 1529 states

Sec. 85. Land taken by eminent domain. Whenever any registered land, or
interest therein, is expropriated or taken by eminent domain, the National
Government, province, city or municipality, or any other agency or
instrumentality exercising such right shall file for registration in the proper
Registry a certified copy of the judgment which shall state definitely by an
adequate description, the particular property or interest expropriated, the
number of the certificate of title, and the nature of the public use. A
memorandum of the right or interest taken shall be made on each certificate of
title by the Register of Deeds, and where the fee simple is taken, a new
certificate shall be issued in favor of the National Government, province,
city, municipality, or any other agency or instrumentality exercising such
right for the land so taken. The legal expenses incident to the memorandum of
registration or issuance of a new certificate of title shall be for the account of
the authority taking the land or interest therein. (Emphasis supplied)

Consequently, lands registered under Act No. 496 or PD No. 1529 are not exclusively
private or patrimonial lands. Lands of the public domain may also be registered
pursuant to existing laws.
AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the
Freedom Islands or of the lands to be reclaimed from submerged areas of Manila
Bay. In the words of AMARI, the Amended JVA is not a sale but a joint venture with a
stipulation for reimbursement of the original cost incurred by PEA for the earlier
reclamation and construction works performed by the CDCP under its 1973 contract
with the Republic. Whether the Amended JVA is a sale or a joint venture, the fact
remains that the Amended JVA requires PEA to cause the issuance and delivery of the
certificates of title conveying AMARIs Land Share in the name of AMARI. [107]
This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which
provides that private corporations shall not hold such alienable lands of the public
domain except by lease. The transfer of title and ownership to AMARI clearly means
that AMARI will hold the reclaimed lands other than by lease. The transfer of title and
ownership is a disposition of the reclaimed lands, a transaction considered a sale or
alienation under CA No. 141,[108] the Government Auditing Code,[109] and Section 3, Article
XII of the 1987 Constitution.
The Regalian doctrine is deeply implanted in our legal system. Foreshore and
submerged areas form part of the public domain and are inalienable. Lands reclaimed
from foreshore and submerged areas also form part of the public domain and are also
inalienable, unless converted pursuant to law into alienable or disposable lands of the
public domain. Historically, lands reclaimed by the government are sui generis, not
available for sale to private parties unlike other alienable public lands. Reclaimed lands
retain their inherent potential as areas for public use or public service. Alienable lands of
the public domain, increasingly becoming scarce natural resources, are to be distributed
equitably among our ever-growing population. To insure such equitable distribution, the
1973 and 1987 Constitutions have barred private corporations from acquiring any kind
of alienable land of the public domain. Those who attempt to dispose of inalienable
natural resources of the State, or seek to circumvent the constitutional ban on alienation
of lands of the public domain to private corporations, do so at their own risk.
We can now summarize our conclusions as follows:
1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now
covered by certificates of title in the name of PEA, are alienable lands of the
public domain. PEA may lease these lands to private corporations but may not sell
or transfer ownership of these lands to private corporations. PEA may only sell
these lands to Philippine citizens, subject to the ownership limitations in the 1987
Constitution and existing laws.
2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural
resources of the public domain until classified as alienable or disposable lands open
to disposition and declared no longer needed for public service. The government
can make such classification and declaration only after PEA has reclaimed these
submerged areas. Only then can these lands qualify as agricultural lands of the
public domain, which are the only natural resources the government can alienate. In
their present state, the 592.15 hectares of submerged areas are inalienable and
outside the commerce of man.
3. Since the Amended JVA seeks to transfer to AMARI, a private corporation,
ownership of 77.34 hectares[110] of the Freedom Islands, such transfer is void for
being contrary to Section 3, Article XII of the 1987 Constitution which prohibits
private corporations from acquiring any kind of alienable land of the public domain.
4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156
hectares[111] of still submerged areas of Manila Bay, such transfer is void for being
contrary to Section 2, Article XII of the 1987 Constitution which prohibits the
alienation of natural resources other than agricultural lands of the public
domain. PEA may reclaim these submerged areas. Thereafter, the government can
classify the reclaimed lands as alienable or disposable, and further declare them no
longer needed for public service. Still, the transfer of such reclaimed alienable lands
of the public domain to AMARI will be void in view of Section 3, Article XII of the
1987 Constitution which prohibits private corporations from acquiring any kind of
alienable land of the public domain.
Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987
Constitution. Under Article 1409[112] of the Civil Code, contracts whose object or purpose
is contrary to law, or whose object is outside the commerce of men, are inexistent and
void from the beginning. The Court must perform its duty to defend and uphold the
Constitution, and therefore declares the Amended JVA null and void ab initio.

Seventh issue: whether the Court is the proper forum to raise the issue of
whether the Amended JVA is grossly disadvantageous to the government.

Considering that the Amended JVA is null and void ab initio, there is no necessity to
rule on this last issue. Besides, the Court is not a trier of facts, and this last issue
involves a determination of factual matters.
WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari
Coastal Bay Development Corporation are PERMANENTLY ENJOINED from
implementing the Amended Joint Venture Agreement which is hereby declared NULL
and VOID ab initio.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Vitug, Kapunan, Mendoza, Panganiban,
Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Austria-Martinez, and Corona,
JJ., concur.
[G.R. No. L-630. November 15, 1947.]

ALEXANDER A. KRIVENKO, petitioner-appellant, vs.


THE REGISTER OF DEEDS, CITY OF MANILA, respondent-
appellee.

Gibbs, Gibbs, Chuidian & Quasha for petitioner-appellant.


First Assistant Solicitor General Reyes and Solicitor Carreon for
respondent-appellee.
Marcelino Lontok appeared as amicus curiæ.

SYLLABUS

1. CONSTITUTIONAL LAW; JUDICIAL POLICY; CONSTITUTIONAL


QUESTION SHOULD BE AVOIDED IF POSSIBLE. — The rule that a court
should not pass upon a constitutional question if its decision may be made to
rest upon other grounds, does not mean that to avoid a constitutional
question, the court may decline to decide the case upon the merits. In the
instant case, the only issue is a constitutional question which is unavoidable if
the case is to be decided upon the merits. And the court cannot avoid
rendering its decision simply because it has to avoid the constitutional
question. It cannot, for instance, grant appellant's motion withdrawing his
appeal only because the constitutional issue should be avoided. Whether that
motion should be, or should not be, granted, is a question involving different
considerations.
2. ID.; APPEAL; WITHDRAWAL OF APPEAL DISCRETIONARY UPON
THE COURT AFTER BRIEFS ARE PRESENTED. — Withdrawal of appeal
after briefs are presented, may or may not be granted in the discretion of the
court, according to the rules. In the instant case, withdrawal was denied
because under the circumstances, particularly the circular of the
Department of Justice issued while this case was pending before this Court
and ordering all registers of deeds to accept for registration all
transfers ofresidential lots to aliens, together with the circumstance that
probably a similar question may never come up again before this Court, the
effect of the withdrawal would be offensive to the opinion reached by a
majority of the members of the Court after long and exhaustive deliberations
on the constitutional question. To allow the withdrawal under such
circumstances is equivalent to tolerating an offense to the constitution,
offense which may be permanent.
3. CLASSIFICATION OF LANDS OF THE PUBLIC DOMAIN UNDER
THE CONSTITUTION. — When section 1, Article XIII, of the Constitution, with
reference to lands of the public domain, makes mention of only agricultural,
timber and mineral lands, it undoubtedly means that all lands of the public
domain are classified into said three groups, namely, agricultural, timber and
mineral. And this classification finds corroboration in the circumstance that at
the time of the adoption of the Constitution, that was the basic classification
existing in the public laws and judicial decision in the Philippines, and the term
"public agricultural lands" under said classification has always been construed
as referring to those lands that were neither timber nor mineral, and as
including residential lands. It may safely be presumed, therefore, that what the
members of the Constitutional Convention had in mind when they drafted the
Constitution was this well-known classification and its technical meaning then
prevailing.
There seems to be no question among members of this Court that the
phrase "public agricultural lands" appearing in section 1 of Article XIII of the
Constitution includes residential lands. And this is in conformity with a
legislative interpretation given after the adoption of the Constitution. Well
known is the rule that "where the Legislature has revised a statute after a
Constitution has been adopted, such a revision is to be regarded as a
legislative construction that the statute so revised conforms to the
Constitution." Soon after the Constitution was adopted, the National Assembly
revised the Public Land Law and passed Commonwealth Act No. 141, and
sections 58, 59 and 60 thereof permit the sale of residential lots to Filipino
citizens or to associations or corporations controlled by such citizens, which is
equivalent to a solemn declaration that residential lots are considered as
agricultural lands, for, under the Constitution, only agricultural lands may be
alienated.
Furthermore, prior to the Constitution, under section 24 of Public Land
Act No. 2874, aliens could acquire public agricultural lands used for industrial
or residential purposes, but after the Constitution and under section
23 of Commonwealth Act No. 141, the right of aliens to acquire such
kind of lands is completely stricken out, undoubtedly in pursuance of the
constitutional limitation. And, again, prior to the Constitution, under section
57 of Public Land Act No. 2874, land of the public domain suitable for
residence or industrial purposes could be sold or leased to aliens, but after
the Constitution and under section 60 of Commonwealth Act No. 141, such
land may only be leased, but not sold, to aliens, and the lease granted shall
only be valid while the land is used for the purposes referred to. The
exclusion of sale in the new Act is undoubtedly in pursuance of the
constitutional limitation, and this again is another legislative construction that
the term "public agricultural land" includes land for residence purposes.
The legislative interpretation is also in harmony with the interpretation
given by the Executive Department of the Government. Way back in 1939,
Secretary of Justice Jose Abad Santos rendered an opinion holding that
under the Constitution, the phrase "public agricultural lands" includes
residential lands.
4. PRIVATE AGRICULTURAL LANDS UNDER THE CONSTITUTION.
— Under section 2 of Article XIII of the Constitution, "natural resources, with
the exception of public agricultural land, shall not be alienated," and with
respect to public agricultural lands, their alienation is limited to Filipino
citizens. But this constitutional purpose ofconserving agricultural resources in
the hands of Filipino citizens may easily be defeated by the Filipino citizens
themselves who may transfer their agricultural lands in favorof aliens. It is
partly to prevent this result that section 5 is included in Article XIII, which
reads: "Save in cases of hereditary succession, no private agricultural land
shall be transferred or assigned except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain the
Philippines." This constitutional provision closes the only remaining avenue
through which agricultural resources may leak into aliens' hands. It would
certainly be futile to prohibit the alienation of public agricultural lands to aliens
if, after all, they may be freely so alienated upon their becoming private
agricultural lands in the hands of Filipino citizens. Undoubtedly, as above
indicated, section 5 is intended to insure the policy of nationalization
contained in section 1. both sections must, therefore, be read together for
they have the same purpose and the same subject matter. It must be noticed
that the persons against whom the prohibition is directed in section 5 are the
very same persons who under section 1 are disqualified to acquire or hold
lands of the public domain in the Philippines. And the subject matter of both
sections is the same, namely, the non-transferability of agricultural land to
aliens. Since "agricultural land" under section 1 includes residential lots, the
same technical meaning should be attached to "agricultural land" under
section 5. It is a rule of statutory construction that a word or phrase repeated
in a statute will bear the same meaning throughout the statute, unless a
different intention appears. The only difference between "agricultural land"
under section 1 and "agricultural land" under section 5, is that the former is
public and the latter, private. But such difference refers to ownership and not
to the class of land. The lands are the same in both sections, and, for the
conservation of the national patrimony, what is important is the nature or
class ofthe property regardless of whether it is owned by the State or by its
citizens.
If, as conceded by all the members of this Court, residential lands of the
public domain should be considered as agricultural lands to be protected as
part of the national patrimony, there can be no reason why residential
lands of private ownership should not deserve the same consideration and
protection. There is absolutely no difference in nature, character, value or
importance to the nation between a residential land of the public domain and
a residential land of private ownership, and, therefore, both should equally be
considered as agricultural lands to be protected as part of the national
patrimony. Specially is this so where, as indicated above, the prohibition as to
the alienationof public residential lots may become superfluous if the same
prohibition is not equally applied to private residential lots. Indeed, the
prohibition as to private residential lands will eventually become more
important, for time will come when, in view of the constant disposition of public
lands in favor private individuals, almost all, if not all, the residential
lands of the public domain shall have become private residential lands.
The constitutional intent is made more patent and is strongly
implemented by an Act of the National Assembly passed soon after the
Constitution was approved. We are referring again to Commonwealth Act No.
141. Prior to the Constitution, there were in the Public Land Act No. 2874
provisions contained in section 120 and 121 thereof which granted to aliens
the right to acquire private agricultural lands only by way of reciprocity. Then
came the Constitution, and Commonwealth Act No. 141 was passed
containing sections 122 and 123 which strike out completely the
right of reciprocity granted to aliens. This, undoubtedly, is to conform to the
absolute policy contained in section 5 ofArticle XIII of the Constitution, which,
in prohibiting the alienation of private agricultural lands to aliens, grants
them no right of reciprocity.
5. EFFECT UPON THE SPIRIT OF THE CONSTITUTION OF NOT
CONSIDERING RESIDENTIAL LANDS AS AGRICULTURAL LANDS. — If
the term "private agricultural lands" is to be construed as not including
residential lots or lands not strictly agricultural, the result would be that aliens
may freely acquire and possess not only residential lots and houses for
themselves but entire subdivisions, and whole towns and cities, and that they
may validly buy and hold in their names lands of any area for building homes,
factories, industrial plants, fisheries, hatcheries, schools, health and vacation
resorts, markets, golf courses, playgrounds, airfields, and a host of other uses
and purposes that are not, in appellant's words, strictly agricultural. That this
is obnoxious to the conservative spirit of the Constitution is beyond question.

DECISION

MORAN, C.J : p
Alexander A. Krivenko, alien, bought a residential lot from
the Magdalena Estate, Inc., in December of 1941, the registration of which
was interrupted by the war. In May, 1945, he sought to accomplish said
registration but was denied by the register of deeds of Manila on the ground
that, being an alien, he cannot acquire land in this jurisdiction. Krivenko then
brought the case to the fourth branch of the Court of First Instance of Manila
by means of a consulta, and that court rendered judgment sustaining the
refusal of the register of deeds, from which Krivenko appealed to this Court.
There is no dispute as to these facts. The real point in issue is whether
or not an alien under our Constitution may acquire residential land.
It is said that the decision of the case on the merits is unnecessary,
there being a motion to withdraw the appeal which should have been granted
outright, and reference is made to the ruling laid down by this Court in another
case to the effect that a court should not pass upon a constitutional question if
its judgment may be made to rest upon other grounds. There is, we believe, a
confusion of ideas in this reasoning. It cannot be denied that the constitutional
question is unavoidable if we choose to decide this case upon the merits. Our
judgment cannot to be made to rest upon other grounds if we have to render
any judgment at all. And we cannot avoid our judgment simply because we
have to avoid a constitutional question. We cannot, for instance, grant the
motion withdrawing the appeal only because we wish to evade the
constitutional issue. Whether the motion should be, or should not be, granted,
is a question involving different considerations not to be stated.
According to Rule 52, section 4, of the Rules of Court, it is discretionary
upon this Court to grant a withdrawal of appeal after the briefs have been
presented. At the time the motion for withdrawal was filed in this case, not
only had the briefs been presented, but the case had already been voted and
the majority decision was being prepared. The motion for withdrawal
stated no reason whatsoever, and the Solicitor General was agreeable to it.
While the motion was pending in this Court, came the new circular ofthe
Department of Justice, instructing all register of deeds to accept for
registration all transfers of residential lots to aliens. The herein respondent-
appellee was naturally oneof the registers of deeds to obey the new circular,
as against his own stand in this case which had been maintained by the trial
court and firmly defended in this Court by the Solicitor General. If we grant the
withdrawal, the result would be that petitioner-appellant Alexander
A. Krivenko wins his case, not by a decision of this Court, but by the decision
or circular of the Department of Justice, issued while this case was pending
before this Court. Whether or not this is the reason why appellant seeks the
withdrawal ofhis appeal and why the Solicitor General readily agrees to that
withdrawal, is now immaterial. What is material and indeed very important, is
whether or not we should allow interference with the regular and complete
exercise by this Court of its constitutional functions, and whether or not after
having held long deliberations and after having reached a clear and positive
conviction as to what the constitutional mandate is, we may still allow our
conviction to be silenced, and the constitutional mandate to be ignored or
misconceived, with all the harmful consequences that might be brought upon
the national patrimony. For it is but natural that the new circular be taken full
advantage ofby many, with the circumstance that perhaps the constitutional
question may never come up again before this court, because both vendors
and the vendees will have nointerest but to uphold the validity of their
transactions, and very unlikely will the register of deeds venture to disobey the
orders of their superior. Thus, the possibility for this court to voice its
conviction in a future case may be remote, with the result that our
indifference of today might signify a permanent offense to the Constitution.
All these circumstances were thoroughly considered and weighed by
this Court for a number of days and the legal result of the last vote was a
denial of the motion withdrawing the appeal. We are thus confronted, at this
state of the proceedings, with our duty to decide the case upon the merits,
and by so doing, the constitutional question becomes unavoidable. We shall
then proceed to decide that question.
Article XIII, section 1, of the Constitution is as follows:
"Article XIII. — Conservation and utilization of natural resources.
"SECTION 1. All agricultural, timber, and mineral lands of the
public domain, waters, minerals, coal, petroleum, and other mineral oils,
all forces of potential energy, and other natural resources of the
Philippine belong to the State, and their disposition, exploitation,
development, or utilization shall be limited to citizens of the Philippines,
or to corporations or associations at least sixty per centum of the
capital of which is owned by such citizens, subject to any existing right,
grant, lease, or concession at the time of the inauguration of the
Government established under this Constitution. Natural resources, with
the exception of public agricultural land, shall not be alienated,
and no license, concession, or lease for the exploitation, development,
or utilization of any of the natural resources shall be granted for a period
exceeding twenty-five years, renewable for another twenty-five years,
except as to water rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water 'power' in which
cases beneficial use may be the measure and the limit of the grant."
The scope of this constitutional provision, according to its heading and
its language, embraces all lands of any kind of the public domain, its purpose
being to establish a permanent and fundamental policy for the conservation
and utilization of all natural resources of the Nation. When, therefore, this
provision, with reference to lands of the public domain are classified into said
three groups, namely, agricultural, timber and mineral. And this classification
finds corroboration in the circumstance that at the time ofthe adoption of the
Constitution, that was the basic classification existing in the public laws and
judicial decisions in the Philippines, and the term "public agricultural lands"
under said classification had then acquired a technical meaning that was well-
known to the members of the Constitutional Convention who were mostly
members of the legal profession.
As early as 1908, in the case of Mapa vs. Insular Government (10 Phil.,
175, 182), this Court said that the phrase "agricultural public lands" as defined
in the Act ofCongress of July 1, 1902, which phrase is also to be found in
several sections of the Public Land Act (No. 926), means "those public lands
acquired from Spain which are neither mineral nor timber lands." This
definition has been followed in a long line of decisions of this Court.
(See Montano vs. Insular Government, 12 Phil., 572; Santiago vs. Insular
Government, 12 Phil., 593; Ibañez de Aldecoa vs. Insular Government, 13
Phil., 159; Ramos vs. Director of Lands, 39 Phil., 175; Jocson vs.
Government of the Philippines, 40 Phil., 10.) And with respect to residential
lands, it has been held that since they are neither mineral nor timber
lands, of necessity they must be classified as agricultural. In Ibañez de
Aldecoa vs. Insular Government (13 Phil., 159, 163), this Court said:
"Hence, any parcel of land or building lot is
susceptible of cultivation, and may be converted into a field, and planted
with all kinds of vegetation; for this reason, where land is not mining or
forestall in its nature, it must necessarily be included within the
classification of agricultural land, not because it is actually used for the
purposes ofagriculture, but because it was originally agricultural and may
again become so under other circumstances; besides, the
Act of Congress contains only three classifications, and
makes no special provision with respect to building lots or urban lands
that have ceased to be agricultural land."
In other words, the Court ruled that in determining whether a
parcel of land is agricultural, the test is not only whether it is actually
agricultural, but also its susceptibility to cultivation for agricultural purposes.
But whatever the test might be, the fact remains that at the time the
Constitution was adopted, lands of the public domain were classified in our
laws and jurisprudence into agricultural, mineral, and timber, and that the term
"public agricultural lands" was construed as referring to those lands that were
not timber or mineral, and as including residential lands. It may safely be
presumed, therefore, that what the members of the Constitutional Convention
had in mind when they drafted the Constitution was this well-known
classification and its technical meaning then prevailing.
"Certain expressions which appear in Constitutions, . . . are
obviously technical; and where such words have been in use prior to the
adoption of a Constitution, it is presumed that its framers and the people
who ratified it have used such expressions in accordance with their
technical meaning." (11 Am. Jur., sec. 66, p. 683.) Also Calder vs. Bull, 3
Dall. [U. S.], 386; 1 Law. ed., 648; Bronson vs. Syverson, 88 Wash., 264;
152 P., 1039.)
"It is a fundamental rule that, in construing constitutions, terms
employed therein shall be given the meaning which had been put upon
them, and which they possessed, at the time of the framing and
adoption of the instrument. If a word has acquired a fixed, technical
meaning in legal and constitutional history, it will be presumed to have
been employed in that sense in a written Constitution." (McKinney vs.
Barker, 180 Ky., 526; 203 S. W., 303; L. R. A., 1918E, 581.)
"Where words have been long used in a technical sense and
have been judicially construed to have a certain meaning, and have
been adopted by the legislature as having a certain meaning prior to a
particular statute in which they are used, the rule of construction requires
that the words used in such statute should be construed according to the
sense in which they have been so previously used, although the sense
may vary from the strict literal meaning of the words." (II Sutherland,
Statutory Construction, p. 758.)
Therefore, the phrase "public agricultural lands" appearing in section
1 of Article XIII of the Constitution must be construed as including residential
lands, and this is in conformity with a legislative interpretation given after the
adoption of the Constitution. Well known is the rule that "where the Legislature
has revised a statute after a Constitution has been adopted, such a revision is
to be regarded as a legislative construction that the statute so revised
conforms to the Constitution." (59 C. J., 1102.) Soon after the Constitution
was adopted, the National Assembly revised the Public Land Law and
passed Commonwealth Act No. 141, and sections 58, 59 and 60 thereof
permit the sale of residential lots to Filipino citizens or to associations or
corporations controlled by such citizens, which is equivalent to a solemn
declaration that residential lots are considered as agricultural lands, for, under
the Constitution, only agricultural lands may be alienated.
It is true that in section 9 of said Commonwealth Act No. 141, "alienable
or disposable public lands" which are the same "public agricultural lands"
under the Constitution, are classified into agricultural, residential, commercial,
industrial and for other purposes. This simply means that the term "public
agricultural lands" has both a broad and a particular meaning. Under its broad
or general meaning, as used in the Constitution, it embraces all lands that are
neither timber nor mineral. This broad meaning is particularized in section
9 of Commonwealth Act No. 141 which classifies "public agricultural lands" for
purposes of alienation or disposition, into lands that are strictly agricultural or
actually devoted to cultivation for agricultural purposes; lands that are
residential; commercial; industrial; or lands for other purposes. The fact that
these lands are made alienable or disposable under Commonwealth Act No.
141, in favor of Filipino citizens, is a conclusive indication of their character as
public agricultural lands under said statute and under the Constitution.
It must be observed, in this connection, that prior to the Constitution,
under section 24 of Public Land Act No. 2874, aliens could acquire public
agricultural lands used for industrial or residential purposes, but after the
Constitution and under section 23 of Commonwealth Act No. 141, the
right of aliens to acquire such kind of lands is completely stricken out,
undoubtedly in pursuance of the constitutional limitation. And, again, prior to
the Constitution, under section 57 of Public Land Act No. 2874, land ofthe
public domain suitable for residence or industrial purposes could be sold or
leased to aliens, but after the Constitution and under section
60 of Commonwealth Act No. 141, such land may only be leased, but not
sold, to aliens, and the lease granted shall only be valid while the land is used
for the purposes referred to. The exclusion of sale in the new Act is
undoubtedly in pursuance of the constitutional limitation, and this again is
another legislative construction that the term "public agricultural land" includes
land for residence purposes.
Such legislative interpretation is also in harmony with the interpretation
given by the Executive Department of the Government. Way back in 1939,
Secretary of Justice Jose Abad Santos, in answer to a query as to "whether or
not the phrase 'public agricultural lands' in section 1 of Article XII (now
XIII) of the Constitution may be interpreted to include residential, commercial,
and industrial lands for purposes of their disposition," rendered the following
short, sharp and crystal-clear opinion:
"Section 1, Article XII (now XIII) of the Constitution classifies
lands of the public domain in the Philippines into agricultural, timber and
mineral. This is the basic classification adopted since the
enactment of the Act of Congress of July 1, 1902, known as the
Philippine Bill. At the time of the adoption of the Constitution of the
Philippines, the term 'agricultural public lands' and, therefore, acquired a
technical meaning in our public laws. The Supreme Court of the
Philippines in the leading case of Mapa vs. Insular Government, 10 Phil.,
175, held that the phrase 'agricultural public lands' means those public
lands acquired from Spain which are neither timber nor mineral lands.
This definition has been followed by our Supreme Court in many
subsequent cases. . . ."
"Residential, commercial, or industrial lots forming part of the
public domain must have to be included in one or more of these classes.
Clearly, they are neither timber nor mineral, of necessity, therefore, they
must be classified as agricultural.
"Viewed from another angle, it has been held that in determining
whether lands are agricultural or not, the character of the land is the test
(Odell vs. Durant, 62 N. W., 524; Lorch vs. Missoula Brick & Tile Co.,
123 p. 25). In other words, it is the susceptibility of the land to cultivation
for agricultural purposes by ordinary farming methods which determines
whether it is agricultural or not (State vs. Stewart, 190 p. 129).
"Furthermore, as said by the Director of Lands, no reason is seen
why a piece of land, which may be sold to a person if he is to devote it to
agricultural, cannot be sold to him if he intends to use it as a site for his
home."
This opinion is important not alone because it comes from a
Secretary of Justice who later became the Chief Justice of this Court, but also
because it was rendered by a member of the cabinet of the late President
Quezon who actively participated in the drafting of the constitutional provision
under consideration. (2 Aruego, Framing of the Philippine Constitution, p.
598.) And the opinion of the Quezon administration was reiterated by the
Secretary of Justice under the Osmeña administration, and it was firmly
maintained in this Court by the Solicitor General of both administrations.
It is thus clear that the three great departments of the Government —
judicial, legislative and executive — have always maintained that lands of the
public domain are classified into agricultural, mineral and timber, and that
agricultural lands include residential lots.
Under section 1 of Article XIII of the Constitution, "natural resources,
with the exception of public agricultural land, shall not be alienated," and with
respect to public agricultural lands, their alienation is limited to Filipino
citizens. But this constitutional purpose conserving agricultural resources in
the hands of Filipino citizens may easily be defeated by the Filipino citizens
themselves who may alienate their agricultural lands in favor of aliens. It is
partly to prevent this result that section 5 is included in Article XIII, and it
reads as follows:
"Sec. 5. Save in cases of hereditary succession, no private
agricultural land will be transferred or assigned except to individuals,
corporations, or associations qualified to acquire or hold lands of the
public domain in the Philippines."
This constitutional provision closes the only remaining avenue through which
agricultural resources may leak into aliens' hands. It would certainly be futile
to prohibit the alienation of public agricultural lands to aliens if, after all, they
may be freely so alienated upon their becoming private agricultural lands in
the hands of Filipino citizens. Undoubtedly, as above indicated, section 5 is
intended to insure the policy of nationalization contained in section 1. Both
sections must, therefore, be read together for they have the same purpose
and the same subject matter. It must be noticed that the persons against
whom the prohibition is directed in section 5 are the very same persons who
under section 1 are disqualified "to acquire or hold lands of the public domain
in the Philippines." And the subject matter of both sections is the same,
namely, the non transferability of "agricultural land" to aliens. Since
"agricultural land" under section 1 includes residential lots, the same technical
meaning should be attached to "agricultural land" under section 5. It is a
rule of statutory construction that "a word or phrase repeated in a statute will
bear the same meaning throughout the statute, unless a different intention
appears." (II Sutherland, Statutory Construction, p. 758.) The only difference
between "agricultural land" under section 1, and "agricultural land" under
section 5, is that the former is public and the latter private. But such difference
refers to ownership and not to the class of land. The lands are the same in
both sections, and, for the conservation of the national patrimony, what is
important is the nature or class of the property regardless of whether it is
owned by the State or by its citizens.
Reference is made to an opinion rendered on September 19, 1941, by
the Hon. Teofilo Sison, then Secretary of Justice, to the effect that residential
lands of the public domain may be considered as agricultural lands, whereas
residential lands of private ownership cannot be so considered. No reason
whatsoever is given in the opinion for such a distinction, and no valid reason
can be adduced for such a discriminatory view, particularly having in mind that
the purpose of the constitutional provision is the conservation of the national
patrimony, and private residential lands are as much an integral part of the
national patrimony as the residential lands of the public domain. Specially is
this so where, as indicated above, the prohibition as to the alienable of public
residential lots would become superfluous if the same prohibition is not
equally applied to private residential lots. Indeed, the prohibition as to private
residential lands will eventually become more important, for time will come
when, in view of the constant disposition of public lands in favor of private
individuals, almost all, if not all, the residential lands of the public domain shall
have become private residential lands.
It is maintained that in the first draft of section 5, the words
"no land of private ownership" were used and later changed into
"no agricultural land of private ownership," and lastly into "no private
agricultural land" and from these changes it is argued that the word
"agricultural" introduced in the second and final drafts was intended to limit
the meaning of the word "land" to land actually used for agricultural purposes.
The implication is not accurate. The wording of the first draft was amended
for no other purpose than to clarify concepts and avoid uncertainties. The
words "no land" of the first draft, unqualified by the word "agricultural," may be
mistaken to include timber and mineral lands, and since under section 1, this
kind of lands can never be private, the prohibition to transfer the same would
be superfluous. Upon the other hand, section 5 had to be drafted in harmony
with section 1 to which it is supplementary, as above indicated. Inasmuch as
under section 1, timber and mineral lands can never be private, and the only
lands that may become private are agricultural lands, the words
"no land of private ownership" of the first draft can have no other meaning
than "private agricultural land." And thus the change in the final draft is merely
one of words in order to make its subject matter more specific with a view to
avoiding the possible confusion of ideas that could have arisen from the first
draft.
If the term "private agricultural lands" is to be construed as not including
residential lots or lands not strictly agricultural, the result would be that "aliens
may freely acquire and possess not only residential lots and houses for
themselves but entire subdivisions, and whole towns and cities," and that
"they may validly buy and hold in their names lands of any area for building
homes, factories, industrial plants, fisheries, hatcheries, schools, health and
vacation resorts, markets, golf courses, playgrounds, airfields, and a
host of other uses and purposes that are not, in appellant's words, strictly
agricultural." (Solicitor General's Brief, p. 6.) That this is obnoxious to the
conservative spirit of the Constitution is beyond question.
One of the fundamental principles underlying the provision of Article
XIII of the Constitution and which was embodied in the report of the
Committee on Nationalization and Preservation of Lands and other Natural
Resources of the Constitutional Convention, is "that lands, minerals, forests,
and other natural resources constitute the exclusive heritage of the Filipino
nation. They should, therefore, be preserved for those under the sovereign
authority of that nation and for their posterity." (2 Aruego, Framing of the
Filipino Constitution, p. 595.) Delegate Ledesma, Chairman of the Committee
on Agricultural Development of the Constitutional Convention, in a speech
delivered in connection with the national policy on agricultural lands, said:
"The exclusion of aliens from the privilege of acquiring public agricultural
lands and of owning real estate is a necessary part of the Public Land
Laws of the Philippines for the Filipinos." (Italics ours.) And, of the same tenor
was the speech of Delegate Montilla who said: "With the complete
nationalization of our lands and natural resources it is to be understood that
our God-given birthright should be one hundred per cent in Filipino hands . . .
Lands and natural resources are immovables and as such can be compared
to the vital organs of a person's body, the lack of possession of which may
cause instant death or the shortening of life. . . . If we do not completely
nationalize these two of our most important belongings, I am afraid that the
time will come when we shall be sorry for the time we were born. Our
independence will be just a mockery, for what kind of independence are we
going to have if a part of our country is not in our hands but in
those offoreigners?" (Italics ours.) Professor Aruego says that since the
opening days of the Constitutional Convention one of its fixed and dominating
objectives was the conservation and nationalization of the natural
resources of the country. (2 Aruego, Framing of the Philippine Constitution, p.
592.) This is ratified by the members of the Constitutional Convention who are
now members of this Court, namely, Mr. Justice Perfecto, Mr. Justice Briones,
and Mr. Justice Hontiveros. And, indeed, if under Article XIV, section 8, of the
Constitution, an alien may not even operate a small jitney for hire, it is
certainly not hard to understand that neither is he allowed to own a
piece of land.
This constitutional intent is made more patent and is strongly
implemented by an act of the National Assembly passed soon after the
Constitution was approved. We are referring again to Commonwealth Act No.
141. Prior to the Constitution, there were in the Public Land Act No. 2874
sections 120 and 121 which granted aliens the right to acquire private lands
only by way of reciprocity. Said section reads as follows:
"SEC. 120. No land originally acquired in any manner under the
provisions of this Act, nor any permanent improvement on such land,
shall be encumbered, alienated, or transferred, except to persons,
corporations, associations, or partnerships who may acquire lands of the
public domain under this Act; to corporations organized in the Philippine
Islands authorized therefor by their charters, and, upon express
authorization by the Philippine Legislature, to citizens of countries the
laws of which grant to citizensof the Philippine Islands the same right to
acquire, hold, lease, encumber, dispose of, or alienate land, or
permanent improvements thereon, or any interest therein, as to their
own citizens, only in the manner and to the extent specified in such laws,
and while the same are in force, but not thereafter.
"SEC. 121. No land originally acquired in any manner under the
provisions of the former Public Land Act or of any other Act, ordinance,
royal order, royal decree, or any other provision of law formerly in force
in the Philippine Islands with regard to public lands, terrenos baldios y
realengos, or lands of any other denomination that were actually or
presumptively of the public domain, or by royal grant or in any other
form, nor any permanent improvement on such land, shall be
encumbered, alienated, or conveyed, except to persons, corporations, or
associations who may acquire land of the public domain under this Act;
to corporate bodies organized in the Philippine Islands whose charters
may authorize them to do so, and, upon express authorization by the
Philippine Legislature, to citizens of the countries the laws of which grant
to citizens of the Philippine Islands the same right to acquire, hold, lease,
encumber, dispose of, or alienate land or permanent improvements
thereon or any interest therein, as to their own citizens, and only in the
manner and to the extent specified in such laws, and while the same are
in force, but not thereafter: Provided, however, That this prohibition shall
not be applicable to the conveyance or acquisition by
reason of hereditary succession duly acknowledged and legalized by
competent courts, nor to lands and improvements acquired or held for
industrial or residence purposes, while used for such
purposes: Provided, further, That in the event of the ownership of the
lands and improvements mentioned in this section and in the last
preceding section being transferred by judicial decree to persons,
corporations or associations not legally capacitated to acquire the same
under the provisions of this Act, such persons, corporations, or
associations shall be obliged to alienate said lands or improvements to
others so capacitated within the precise period offive years, under the
penalty of such property reverting to the Government in the contrary
case." (Public Land Act, No, 2874.)
It is to be observed that the phase "no land" used in these section refers
to all private lands, whether strictly agricultural, residential or otherwise, there
being practicallyno private land which had not been acquired by any of the
means provided in said two sections. Therefore, the prohibition contained in
these two provisions was, in effect, that no private land could be transferred to
aliens except "upon express authorization by the Philippine Legislature, to
citizens of the Philippine Islands the same right to acquire, hold, lease,
encumber, dispose of, or alienate land." In other words, aliens were granted
the right to acquire private land merely by way of reciprocity. Then came the
Constitution and Commonwealth Act No. 141 was passed, section 122 and
123 of which read as follows:
"SEC. 122. No land originally acquired in any manner under the
provisions of this Act, nor any permanent improvement on such land,
shall be encumbered, alienated, or transferred, except to persons,
corporations, associations, or partnerships who may acquire lands of the
public domain under this Act or to corporations organized in the
Philippines authorized therefor by their charters.
"SEC. 123. No land originally acquired in any manner under the
provisions of any previous Act, ordinance, royal order, royal decree, or
any other provision of law formerly in force in the Philippines with regard
to public lands, terrenos baldios y realengos, or lands of any other
denomination that were actually or presumptively of the public domain,
or by royal grant or in any other form, nor any permanent improvement
on such land, shall be encumbered, alienated, or conveyed, except to
persons, corporations or associations who may acquire land of the public
domain under this Act or to corporate bodies organized in the Philippines
whose charters authorize them to do so: Provided, however, That this
prohibition shall not be applicable to the conveyance or acquisition by
reason of hereditary succession duly acknowledged and legalized by
competent courts:Provided, further, That in the event of the
ownership of the lands and improvements mentioned in this section and
in the last preceding section being transferred by judicial decree to
persons, corporations or associations not legally capacitated to acquire
the same under the provisions of this Act, such persons, corporations, or
associations shall be obliged to alienate said lands or improvements to
others so capacitated within the precise period of five years; otherwise,
such property shall revert to the Government."
These two sections are almost literally the same as sections
120 and 121 of Act No. 2874, the only difference being that in the
new provisions, the right to reciprocity granted to aliens is
completely stricken out. This, undoubtedly, is to conform to the
absolute policy contained in section 5 of Article XIII of the
Constitution which, in prohibiting the alienation of private
agricultural lands to aliens, grants them no right of reciprocity. This
legislative construction carries exceptional weight, for prominent
members of the National Assembly who approved the new Act had
been members of the Constitutional Convention.
It is said that the lot in question does not come within the
purview of sections 122 and 123 of Commonwealth Act No. 141, there
being no proof that the same had been acquired by one of the means
provided in said provisions. We are not, however, deciding the instant case
under the provisions of the Public Land Act, which have to refer to lands that
had been formerly of the public domain, otherwise their constitutionality may
be doubtful. We are deciding the instant case under section 5 of Article
XIII of the Constitution which is more comprehensive and more absolute in the
sense that it prohibits the transfer to aliens of any private agricultural land
including residential land whatever its origin might have been.
And, finally, on June 14, 1947, the Congress approved Republic
Act No. 133 which allows mortgage of "private real property" of any kind in
favor of aliens but with a qualification consisting of expressly prohibiting aliens
to bid or take part in any sale of such real property as a consequence of the
mortgage. This prohibition makes nodistinction between private lands that are
strictly agricultural and private lands that are residential or commercial. The
prohibition embraces the sale of private lands of any kind in favor of aliens,
which is again a clear implementation and a legislative interpretation of the
constitutional prohibition. Had the Congress been of opinion that private
residential lands may be sold to aliens under the Constitution, no legislative
measure would have been found necessary to authorize mortgage which
would have been deemed also permissible under the Constitution. But clearly
it was the opinion of the Congress that such sale is forbidden by the
Constitution and it was such opinion that prompted the legislative measure
intended to clarify that mortgage is not within the constitutional prohibition.
It is well to note at this juncture that in the present case we
have no choice. We are construing the Constitution as it is and not as we may
desire it to be. Perhaps the effect of our construction is to preclude aliens,
admitted freely into the Philippines from owning sites where they may build
their homes. But if this is the solemn mandate ofthe Constitution, we will not
attempt to compromise it even in the name of amity or equity. We are
satisfied, however, that aliens are not completely excluded by the Constitution
from the use of lands for residential purposes. Since their residence in the
Philippines is temporary, they may be granted temporary rights such as a
lease contract which is not forbidden by the Constitution. Should they desire
to remain here forever and share our fortunes and misfortunes, Filipino
citizenship is not impossible to acquire.
For all the foregoing, we hold that under the Constitution aliens may not
acquire private or public agricultural lands, including residential lands, and,
accordingly, judgment is affirmed, without costs.
Feria, Pablo, Perfecto, Hilado and Briones, JJ., concur.
(Krivenko v. Register of Deeds, G.R. No. L-630, [November 15, 1947], 79 PHIL
|||

461-568)
[G.R. No. 95608. January 21, 1997]

SPOUSES IGNACIO PALOMO and TRINIDAD PASCUAL, and CARMEN


PALOMO VDA. DE BUENAVENTURA, petitioners, vs. THE
HONORABLE COURT OF APPEALS, THE REPUBLIC OF THE
PHILIPPINES, FAUSTINO J. PERFECTO, RAFFY SANTILLAN,
BOY ARIADO, LORENZO BROCALES, SALVADOR DOE, and
other DOES, respondents.

DECISION
ROMERO, J.:

The issue in the case at bar pertains to ownership of 15 parcels of land in Tiwi,
Albay which form part of the "Tiwi Hot Spring National Park." The facts of the case are
as follows.
On June 13, 1913, then Governor General of the Philippine Islands, William
Cameron Forbes issued Executive Order No. 40 which reserved for provincial park
purposes some 440,530 square meters of land situated in Barrio Naga, Municipality of
Tiwi, Province of Albay pursuant to the provisions of Act 648 of the Philippine
Commission.[1]
Subsequently, the then Court of First Instance of Albay, 15th Judicial District, United
States of America, ordered the registration of 15 parcels of land covered by Executive
Order No. 40 in the name of Diego Palomo on December 9, 1916; [2] December 28,
1916;[3] and January 17, 1917.[4] Diego Palomo donated these parcels of land consisting
of 74,872 square meters which were allegedly covered by Original Certificates of Title
Nos. 513, 169, 176 and 173[5] to his heirs, herein petitioners, Ignacio and Carmen
Palomo two months before his death in April 1937.[6]
Claiming that the aforesaid original certificates of title were lost during the Japanese
occupation, Ignacio Palomo filed a petition for reconstitution with the Court of First
Instance of Albay on May 30, 1950.[7] The Register of Deeds of Albay issued Transfer
Certificates of Title Nos. 3911, 3912, 3913 and 3914 sometime in October 1953. [8]
On July 10, 1954 President Ramon Magsaysay issued Proclamation No. 47
converting the area embraced by Executive Order No. 40 into the "Tiwi Hot Spring
National Park," under the control, management, protection and administration of the
defunct Commission of Parks and Wildlife, now a division of the Bureau of Forest
Development. The area was never released as alienable and disposable portion of the
public domain and, therefore, is neither susceptible to disposition under the provisions
of the Public Land Law (CA 141) nor registrable under the Land Registration Act (Act
No. 496).
The Palomos, however, continued in possession of the property, paid real estate
taxes thereon[9] and introduced improvements by planting rice, bananas, pandan and
coconuts. On April 8, 1971, petitioner Carmen vda. de Buenaventura and spouses
Ignacio Palomo and Trinidad Pascual mortgaged the parcels of land covered by TCT
3911, 3912, 3913 and 3914 to guarantee a loan of P200,000 from the Bank of the
Philippine Islands.
In May 7, 1974 petitioner Carmen vda. de Buenaventura and spouses Ignacio
Palomo and Trinidad Pascual filed Civil Case No. T-143 before the then Court of First
Instance of Albay for Injunction with damages against private respondents Faustino J.
Perfecto, Raffy Santillan, Boy Ariado, Lorenzo Brocales, Salvador Doe and other Does
who are all employees of the Bureau of Forest Development who entered the land
covered by TCT No. 3913 and/or TCT 3914 and cut down bamboos thereat, totally
leveling no less than 4 groves worth not less than P2,000.00.
On October 11, 1974, the Republic of the Philippines filed Civil Case No. T-176 for
annulment and cancellation of Certificates of Title involving the 15 parcels of land
registered in the name of the petitioners and subject of Civil Case T-143. Impleaded
with the petitioners as defendants were the Bank of the Philippine Islands, Legazpi
Branch and the Register of Deeds of Albay.
The case against the Bank of Philippine Islands was dismissed because the loan
of P200,000 with the Bank was already paid and the mortgage in its favor cancelled.
A joint trial of Civil Case T-143 and T-176 was conducted upon agreement of the
parties and on July 31, 1986, the trial court rendered the following decision:

"WHEREFORE, premises considered, judgment is hereby rendered:

IN CIVIL CASE No. T-143, in favor of the defendants and against the plaintiffs,
dismissing the complaint for injunction and damages, as it is hereby DISMISSED.

Costs against the plaintiffs.

In CIVIL CASE No. T-176, in favor of the plaintiffs and against the defendants:

(1) Declaring null and void and no force and effect the Order dated September 14,
1953, as well as the Original Certificate of Titles Nos. 153, 169, 173 and 176 and
[10]

Transfer Certificates of Titles Nos. 3911, T-3912, T-3913, and T-3914, all of the
Register of Deeds of Albay and all transactions based on said titles.

(2) Forfeiting in favor of the plaintiff Government any and all improvements on the
lands in question that are found therein and introduced by the defendants;

(3) Declaring Lot Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 and 12, Plan II-9299 and Lots 1,
21, 3 and 4 of Plan II-9205 as part of the Tiwi Hot Spring National Park;
[11]
(4) and Finally, the Register of Deeds of Albay is hereby ordered to cancel the alleged
Original Certificates of Titles Nos. 513, 169, 173 and 176, Transfer Certificates of
Title Nos. T-3911, T-3912, T-3913 and T-3914.

Costs against the defendants.

So Ordered." [12]

The court a quo in ruling for the Republic found no sufficient proof that the Palomos
have established property rights over the parcels of land in question before the Treaty of
Paris which ended the Spanish-American War at the end of the century. The court
further stated that assuming that the decrees of the Court of First Instance of Albay
were really issued, the Palomos obtained no right at all over the Properties because
these were issued only when Executive Order No. 40 was already in force. At this point,
we take note that although the Geodetic Engineer of the Bureau of Lands appointed as
one of the Commissioners in the relocation survey of the properties stated in his
reamended report that of the 3,384 square meters covered by Lot 2, Plan II-9205, only
1,976 square meters fall within the reservation area,[13] the RTC ordered TCT 3913
covering the entire Lot 21 (sic) Plan II-9205 cancelled.
The petitioners appealed to the Court of Appeals which affirmed in toto the findings
of the lower Court; hence this petition raising the following issues:

1. The respondent Court of Appeals committed grave abuse of discretion in affirming


in toto the decision of the lower court.

2. The declaration of nullity of the original certificates of title and subsequent transfer
certificates of titles of the petitioners over the properties in question is contrary to law
and jurisprudence on the matter.

3. The forfeiture of all improvements introduced by the petitioners in the premises in


favor of the government is against our existing law and jurisprudence.

The issues raised essentially boil down to whether or not the alleged original
certificate of titles issued pursuant to the order of the Court of First Instance in 1916-
1917 and the subsequent TCTs issued in 1953 pursuant to the petition for reconstitution
are valid.
Petitioners contend that the Treaty of Paris which ended the Spanish-American War
at the end of the 19th century recognized the property rights of Spanish and Filipino
citizens and the American government had no inherent power to confiscate properties of
private citizens and declare them part of any kind of government reservation. They
allege that their predecessors in interest have been in open, adverse and continuous
possession of the subject lands for 20-50 years prior to their registration in 1916-1917.
Hence, the reservation of the lands for provincial purposes in 1913 by then Governor-
general Forbes was tantamount to deprivation of private property without due process of
law.
In support of their claim, the petitioners presented copies of a number of decisions
of the Court of First Instance of Albay, 15th Judicial District of the United States of
America which state that the predecessors in interest of the petitioners' father Diego
Palomo, were in continuous, open and adverse possession of the lands from 20 to 50
years at the time of their registration in 1916.
We are not convinced.
The Philippines passed to the Spanish Crown by discovery and conquest in the
16th century. Before the Treaty of Paris in April 11, 1899, our lands, whether
agricultural, mineral or forest were under the exclusive patrimony and dominion of the
Spanish Crown. Hence, private ownership of land could only be acquired through royal
concessions which were documented in various forms, such as (1) Titulo Real or Royal
Grant," (2) Concession Especial or Special Grant, (3) Titulo de Compra or Title by
Purchase and (4) Informacion Posesoria or Possessory Information title obtained under
the Spanish Mortgage Law or under the Royal Decree of January 26, 1889.
Unfortunately, no proof was presented that the petitioners' predecessors in interest
derived title from an old Spanish grant. Petitioners placed much reliance upon the
declarations in Expediente No. 5, G.L.R.O. Record Decision No. 9820, dated January
17, 1917; Expediente No. 6, G.L.R.O. Record No. 9821, dated December 28, 1916;
Expediente No. 7, G.L.R.O. Record No. 9822, dated December 9, 1916; Expediente No.
8, G.L.R.O. Record No. 9823, dated December 28, 1916 and Expediente No. 10,
G.L.R.O. Record No. 9868, dated December 9, 1916 of the Court of First Instance of
Albay, 15th Judicial District of the United States of America presided by Judge Isidro
Paredes that their predecessors in interest were in open, adverse and continuous
possession of the subject lands for 20-50 years.[14] The aforesaid "decisions" of the Court
of First Instance, however, were not signed by the judge but were merely certified
copies of notification to Diego Palomo bearing the signature of the clerk of court.
Moreover, despite claims by the petitioners that their predecessors in interest were
in open , adverse and continuous possession of the lands for 20 to 50 years prior to
their registration in 1916-1917, the lands were surveyed only in December 1913, the
very same year they were acquired by Diego Palomo. Curiously, in February 1913 or 10
months before the lands were surveyed for Diego Palomo, the government had already
surveyed the area in preparation for its reservation for provincial park purposes. If the
petitioners' predecessors in interest were indeed in possession of the lands for a
number of years prior to their registration in 1916-1917, they would have undoubtedly
known about the inclusion of these properties in the reservation in 1913. It certainly is a
trifle late at this point to argue that the government had no right to include these
properties in the reservation when the question should have been raised 83 years ago.
As regards the petitioners' contention that inasmuch as they obtained the titles
without government opposition, the government is now estopped from questioning the
validity of the certificates of title which were granted. As correctly pointed out by the
respondent Court of Appeals, the principle of estoppel does not operate against the
Government for the act of its agents. [15]
Assuming that the decrees of the Court of First Instance were really issued, the
lands are still not capable of appropriation. The adverse possession which may be the
basis of a grant of title in confirmation of imperfect title cases applies only to alienable
lands of the public domain.
There is no question that the lands in the case at bar were not alienable lands of the
public domain. As testified by the District Forester, records in the Bureau of Forestry
show that the subject lands were never declared as alienable and disposable and
subject to private alienation prior to 1913 up to the present. [16] Moreover, as part of the
reservation for provincial park purposes, they form part of the forest zone.
It is elementary in the law governing natural resources that forest land cannot be
owned by private persons. It is not registrable and possession thereof, no matter how
lengthy, cannot convert it into private property,[17] unless such lands are reclassified and
considered disposable and alienable.
Neither do the tax receipts which were presented in evidence prove ownership of
the parcels of land inasmuch as the weight of authority is that tax declarations are not
conclusive proof of ownership in land registration cases.[18]
Having disposed of the issue of ownership, we now come to the matter regarding
the forfeiture of improvements introduced on the subject lands. It bears emphasis that
Executive Order No. 40 was already in force at the time the lands in question were
surveyed for Diego Palomo. Petitioners also apparently knew that the subject lands
were covered under the reservation when they filed a petition for reconstitution of the
lost original certificates of title inasmuch as the blueprint of Survey Work Order Number
21781 of Plan II-9299 approved by the Chief of the Land Registration Office Enrique
Altavas in 1953 as a true and correct copy of the Original Plan No. II-9299 filed in the
Bureau of Lands dated September 11, 1948[19] contains the following note, "in conflict
with provincial reservation."[20] In any case, petitioners are presumed to know the law and
the failure of the government to oppose the registration of the lands in question is no
justification for the petitioners to plead good faith in introducing improvements on the
lots.
Finally, since 1,976 square meters of the 3,384 square meters covered by TCT
3913 fall within the reservation, TCT 3913 should be annulled only with respect to the
aforesaid area. Inasmuch as the bamboo groves leveled in TCT 3913 and subject of
Civil Case T-143,[21] were within the perimeter of the national park,[22] no pronouncement
as to damages is in order.
WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED with the
modification that TCT 3913 be annulled with respect to the 1,976 square meter area
falling within the reservation zone.
SO ORDERED.
Regalado, (Chairman), Puno, Mendoza, and Torres, Jr., JJ., concur.
[G.R. No. 163766. June 22, 2006.]

REPUBLIC OF THE
PHILIPPINES, petitioner, vs. CANDY MAKER, INC., as
represented by its President, ONG YEE SEE, * respondent.

DECISION

CALLEJO, SR., J : p

At bar is a Petition for Review under Rule 45 of the Rules of Court seeking to set
aside the May 21, 2004 Decision 1 of the Court of Appeals (CA) in CA-G.R.
CV No. 73287, which affirmed in toto the October 12, 2001 Decision 2 of the
Municipal Trial Court (MTC) of Taytay, Rizal in Land Registration Case No. 99-
0031 declaring respondent the owner of the parcels of land designated as Lots
3138-A and 3138-B in Plan CSD. 04-018302, Cainta-Taytay Cadastre.
Sometime in 1998, Candy Maker, Inc. decided to purchase Lot No. 3138 Cad.
688 of the Cainta-Taytay Cadastre, a parcel of land located below the
reglementary lake elevation of 12.50 meters, about 900 meters away from the
Laguna de Bay, and bounded on the southwest by the Manggahan Floodway,
and on the southeast by a legal easement.
On April 1, 1998, Geodetic Engineer Potenciano H. Fernandez, prepared and
signed a Subdivision Plan of the property for Apolonio Cruz. The property was
subdivided into two lots: Lot No. 3138-A with an area of 10,971 square meters,
and Lot No. 3138-B with an area of 239 square meters. 3 The technical description of
Lot No. 3138 was also prepared by Fernandez, and was approved by the Regional Technical Director of the
Bureau of Lands on April 14, 1998. 4

On April 29, 1999, Antonio, Eladia, and Felisa, all surnamed Cruz, executed a
Deed of Absolute Sale in favor of Candy Maker, Inc. 5 The buyer declared
Lot No. 3138 for taxation purposes in 1999 under Tax Declaration Nos. 004-
18929, 004-18930 and 004-18931. 6
On June 16, 1999, Candy Maker, Inc., as applicant, filed an application with the
MTC of Taytay, Rizal, for the registration of its alleged title over Lot No. 3138-A
and Lot No. 3138-B under Presidential Decree (P.D.) No. 1529.
Acting thereon, the MTC issued an Order 7 on June 18, 1999 directing the
applicant to cause the publication of the notice of initial hearing and for the
Deputy Sheriff to post the same. The Administrator of the Land Registration
Authority (LRA) and the Directors of the Land Management Bureau (LMB) and
Forest Management Bureau (FMB) were also instructed to submit their
respective reports on the status of the parcels of land before the initial hearing
scheduled on October 29, 1999. cHDaEI

The Community Environment and Natural Resources Officer (CENRO) of


Antipolo City filed on August 18, 1999 his Report 8 declaring that "[t]he land falls
within the Alienable and Disposable Zone, under Land Classification Project No.
5-A, per L.C. Map No. 639 certified released on March 11, 1927" and that the
property is the subject of CENRO Case No. 520(97) entitled Perpetua San
Jose v. Almario Cruz. On the other hand, the LRA, in its September 21, 1999
Report, 9 recommended the exclusion of Lot No. 3138-B on the ground that it is a
legal easement and intended for public use, hence, inalienable and indisposable.
On September 30, 1999, the Laguna Lake Development Authority (LLDA)
approved Resolution No. 113, Series of 1993, providing that untitled shoreland
areas may be leased subject to conditions enumerated therein.
The applicant filed its Amended Application 10 on December 15, 1999 for the
confirmation of its alleged title on Lot No. 3138, alleging therein that:
1. . . . the applicant is the President of CANDYMAKER[,] INC. and
registered owner of a parcel of land located at Panghulo Brgy. San Juan,
Taytay, Rizal with an area of TEN THOUSAND NINE HUNDRED
SEVENTY ONE (10,971) square meters and as fully described and
bounded under Lot 3138-A plan CSD-04-018302[,] copy of which and
the corresponding technical descriptions are hereto attached to form
parts hereof;
xxx xxx xxx
8. That for Lot 3138-A the applicant hereby prays for the benefit granted
under the Land Registration Act and/or under the benefits provided for
by P.D. No. 1529, as applicant and their predecessors-in-interest have
been in open, public, continuous, and peaceful occupation and
possession of the said land since time immemorial in [the] concept of
true owners and [adverse] to the whole world; . . . 11
On March 27, 2000, the MTC issued an Order 12 admitting the Amended
Application and resetting the initial hearing to June 23, 2000. However, upon the
requests of the LRA for the timely publication of the Notice of Initial Hearing in
the Official Gazette, 13 the court moved the hearing date to September 22,
2000, 14 then on January 26, 2001 15 and until finally, to June 15, 2001. 16
On July 20, 2001, the Republic of the Philippines, the LLDA filed its
Opposition 17 to the Amended Application in which it alleged that the lot subject
of the application for registration may not be alienated and disposed since it is
considered part of the Laguna Lake bed, a public land within its jurisdiction
pursuant to Republic Act (R.A.) No. 4850, as amended. According to the LLDA,
the projection of Lot No. 3138-A, Cad-688-D Csd-04-018302 in its topographic
map based on the Memorandum 18 of Engineer Christopher Pedrezuela of the
Engineering and Construction Division of the LLDA indicated that it is "located
below the reglementary lake elevation of 12.50 meters referred to datum 10.00
meters below mean lower water" and under Section 41(11) of R.A. No. 4850, the
property is a public land which forms part of the bed of the Laguna Lake.
This Memorandum was appended to the application.
At the hearing conducted on August 31, 2001, the applicant marked in evidence
the complementary copies of the Official Gazette and the People's Tonight as
Exhibits "E-1" and "F-1," respectively. 19
Except as to the LLDA and the Office of the Solicitor General (OSG), which was
represented by the duly deputized provincial prosecutor, 20 the court, upon
motion of the applicant, issued an Order of general default. 21
The applicant presented as witnesses its Treasurer, Fernando Co Siy, and
Antonio Cruz, one of the vendees.
Cruz testified that his grandparents owned the property, 22 and after their demise, his
he and his father
parents, the spouses Apolonio Cruz and Aquilina Atanacio Cruz, inherited the lot; 23
had cultivated the property since 1937, planting palay during the rainy season
and vegetables during the dry season; his father paid the realty taxes on the
property, 24 and he (Cruz) continued paying the taxes after his father's
death. 25 Cruz insisted that he was the rightful claimant and owner of the
property.
Sometime in the 1980s, Apolonio Cruz executed an extrajudicial deed of partition
in which the property was adjudicated to Antonio Cruz and his sisters, Felisa and
Eladia, to the exclusion of their five (5) other siblings who were given other
properties as their shares. 26 He did not know why his ancestors failed to have
the property titled under the Torrens system of registration. 27 He left the
Philippines and stayed in Saudi Arabia from 1973 to 1983. 28 Aside from this, he
hired the services of an "upahan" to cultivate the property. 29The property is
about 3 kilometers from the Laguna de Bay, and is usually flooded when it
rains. 30
Fernando Co Siy testified that the applicant acquired Lot No. 3138 from siblings
Antonio, Eladia and Felisa, 31 who had possessed it since 1945; 32 that after
paying the real estate taxes due thereon, 33 it caused the survey of the lot; 34 that
possession thereof has been peaceful 35 and none of the former owners claims
any right against it; 36 neither the applicant nor its predecessors-in-interest
received information from any government agency that the lot is a public
land; 37 the subject lot is 3 kms. away from Laguna de Bay, 38above its elevation
and that of the nearby road; 39 the property is habitable 40 and was utilized as a
riceland at the time it was sold by the former owners; 41 and that he was aware
that a legal easement is affecting the lot and is willing to annotate it in the land
title. 42
On cross-examination by the LLDA counsel, Siy admitted that his knowledge as
to the distance of the lot with respect to the Laguna de Bay came from
"somebody residing in Taytay" and also from an adjacent owner of the lot; 43 that
the lot is submerged in water since there is no land fill yet; 44 and
that no improvements had been introduced to the property. 45
The LLDA moved for a joint ocular inspection of the parcels of land in order to
determine its exact elevation. 46 On September 14, 2001, a Survey Team of the
Engineering and Construction Division of the LLDA, composed of Ramon D.
Magalonga, Virgilio M. Polanco, and Renato Q. Medenilla, conducted an actual
ground survey of the property. The team used a total station and digital survey
instrument to measure the elevation of the ground in reference to the elevation of
the lake water. A representative of the applicant witnessed the survey. The team
found that the lot is below the prescribed elevation of 12.50 m. and thus part of
the bed of the lake; as such, it could not be titled to the applicant. The team also
reported that the property is adjacent to the highway from the Manggahan
Floodway to Angono, Rizal. The LLDA moved that the application be withdrawn,
appending thereto a copy of the Survey Report. 47
The LLDA did not offer any testimonial and documentary evidence and agreed to
submit the case for decision based on its Opposition. CAIHTE

On October 12, 2001, the MTC rendered a Decision granting the application for
registration over the lots. The dispositive portion of the decision reads:

WHEREFORE, premises considered[,] the court hereby rendered


judgment confirming title of the applicants over the real property
denominated as Lot 3138-A Csd-04-018302 of Cad-688-D Cainta-Taytay
Cadastre; Lot 3138-B Csd-04-018302 of Cad 688-D Cainta-Taytay
Cadastre. 48
On appeal to the CA, the petitioner contended that the MTC did not acquire
jurisdiction over the application for registration since the actual copies of the
Official Gazette (O.G.) where the notice of hearing was published were not
adduced in evidence; the applicant likewise failed to establish exclusive
ownership over the subject property in the manner prescribed by law. The
petitioner argued further that the requirements of Section 23, par. 1 of P.D. No.
1529, 49 as amended, are mandatory and jurisdictional, and that failure to
observe such requirements has a fatal effect on the whole proceedings.
Citing Republic of the Philippines v. Court of Appeals 50 and Register of Deeds of
Malabon v. RTC, Malabon, MM, Br. 170, 51 the Republic averred that a mere
certificate of publication is inadequate proof of the jurisdictional fact of publication
because the actual copies of the O.G. must be presented at the initial hearing of
the case. Moreover, witnesses were not presented to prove specific acts to show
that the applicant and his predecessors-in-interest have been in exclusive, open,
continuous, and adverse possession of the subject lots in the concept of the
owner since June 12, 1945 or earlier, in accordance with Sec. 14, par. 1
of P.D. No. 1529. 52 It noted that the testimonies of the applicant's witnesses are
more of conclusions of law rather than factual evidence of ownership. Other than
thegeneral statement that they planted rice and vegetables on the subject lots,
their possession could properly be characterized as mere casual cultivation since
they failed to account for its exclusive utilization since 1945 or earlier. After
stressing that tax declarations are not conclusive proof of ownership, it concluded
that the subject lots rightfully belong to the State under the Regalian doctrine. 53
The applicant averred in its Appellee's Brief 54 that it had marked in evidence the
actual copy of the O.G. where the notice of initial hearing was published; in fact,
the MTC Decision stated that the copy of the O.G. containing the notice was
referred to as Exhibit "E-1." Moreover, Sec. 14, par. 1 of P.D. 1529 is
inapplicable since it speaks of possession and occupation of alienable and
disposable lands of the public domain. Instead, par. 4 of the same
section 55 should govern because the subject parcels of land are lands of private
ownership, having being acquired through purchase from its predecessors-in-
interest, who, in turn, inherited the same from their parents. It pointed out that
there wereno adverse claims of interest or right by other private persons and
even government agencies like the Province of Rizal. Lastly, while tax
declarations and tax receipts do not constitute evidence of ownership, they are
nonetheless prima facie evidence of possession.
On May 21, 2004, the appellate court rendered judgment which dismissed the
appeal and affirmed in toto the Decision of the MTC, 56 holding that the copy of
the O.G., where the notice was published, was marked as Exhibit "E-1" during
the initial hearing. On the issue of ownership over the subject lots, the CA upheld
the applicant's claim that the parcels of land were alienable and not part of the
public domain, and that it had adduced preponderant evidence to prove that its
predecessors had been tilling the land since 1937, during which palay and
vegetables were planted. In fact, before the lots were purchased, the applicant
verified their ownership with the assessor's office, and thereafter caused the
property to be surveyed; after the lots were acquired in 1999 and a survey was
caused by the applicant, no adverse claims were filed by third persons. Further,
the CA ruled that tax declarations or tax receipts are good indicia of possession
in the concept of the owner, which constitute at least positive and strong
indication that the taxpayer concerned has made a claim either to the title or to
the possession of the property.
The Republic, now petitioner, filed the instant Petition for Review on the following
issues:
A.
WHETHER THE LAND IN QUESTION MAYBE THE SUBJECT OF
REGISTRATION.
B.
WHETHER THE COURT A QUO ACQUIRED JURISDICTION OVER
THE RES CONSIDERING ITS INALIENABLE CHARACTER. DSAEIT

C.
WHETHER THE COURT OF APPEALS ERRED IN AFFIRMING THE
TRIAL COURT'S FINDING THAT RESPONDENT COMPLIED WITH
THE LEGAL REQUIREMENTS ON POSSESSION AS MANDATED BY
SECTION 14 OF P.D. NO. 1529. 57
Petitioner asserts that the Engineer's Survey Report 58 and the Laguna de Bay
Shoreland Survey 59 both show that Lot No. 3138-A is located below the
reglementary lake elevation, hence, forms part of the Laguna Lake bed. It insists
that the property belongs to the public domain as classified under Article 502 of
the Civil Code. 60 Citing the ruling of this Court in Bernardo v.
Tiamson, 61 petitioner avers that the subject lot is incapable of private
appropriation since it is a public land owned by the State under the Regalian
doctrine. On this premise, petitioner avers that the MTC did not acquire
jurisdiction over the subject matter, and as a consequence, its decision is null
and void.
Petitioner maintains that respondent failed to present incontrovertible evidence to
warrant the registration of the property in its name as owner. The testimonies of
the two witnesses only proved that the possession of the land may be
characterized as mere casual cultivation; they failed to prove that its
predecessors occupied the land openly, continuously, exclusively, notoriously
and adversely in the concept of owner since June 12, 1945 or earlier.
On the other hand, respondent argues that the Engineer's Survey Report and the
Laguna de Bay Shoreland Survey have no probative value because they were
neither offered nor admitted in evidence by the MTC. It points out that petitioner
failed to invoke these reports in the appellate court. It was only when the petition
was filed with this Court that the respondent learned of its existence. Petitioner's
reliance on the reports/survey is merely an afterthought. The case of Bernardo v.
Tiamson is irrelevant because the factual issues are different from those of this
case.
On April 28, 2005, respondent filed a Manifestation 62 with this Court, appending
thereto the report 63 conducted by the survey team of the LLDA Engineering and
Construction Division on April 12, 2005. It stated that the 10,971 sq m property
subject of the case is below the 12.5 elevation, and that the profile distance of
the property from the actual lake waters is about 900 m. to 1 km.
The issues in this case are the following: (1) whether the MTC had jurisdiction
over the amended application; (2) whether the property subject of the amended
application is alienable and disposable property of the State, and, if so, (3)
whether respondent adduced the requisite quantum of evidence to prove its
ownership over the property under Section 14 of P.D. 1529.
The petition is meritorious.
On the first issue, we find and so rule that the MTC acquired jurisdiction over
respondent's application for registration since a copy of the O.G. containing the
notice of hearing was marked and adduced in evidence as Exhibit "E-1." The
representative of the OSG was present during the hearing and interposed his
objection thereto.
On the second and third issues, we find and so rule that the property subject of
this application was alienable and disposable public agricultural land until July
18, 1966. However, respondent failed to prove that it possesses registerable title
over the property.
Section 48(b) of Commonwealth Act No. 141, as amended by R.A. No. 1942,
reads:
Section 48. The following described citizens of the Philippines,
occupying lands of the public domain or claiming to own any such lands
or an interest therein, but whose titles have not been perfected or
completed, nay apply to the Court of First Instance of the province where
the land is located for confirmation of their claims and the issuance of a
certificate of title therefor, under the Land Registration Act, to wit:
(b) Those who by themselves or through their predecessors in-
interest have been in open, continuous, exclusive, and notorious
possession and occupation of agricultural lands of the public
domain, under a bona fide claim of acquisition of ownership, for at
least thirty years immediately preceding the filing of the
application for confirmation of title except when prevented by war
or force majeure. These shall be conclusively presumed to have
performed all the conditions essential to a Government grant and
shall be entitled to a certificate of title under the provisions of this
chapter. EATCcI

This provision was further amended by P.D. No. 1073 by substituting the
phrase "for at least thirty years" with "since June 12, 1945;" thus:
Sec. 4. The provisions of Section 48(b) and Section 48(c), Chapter VIII,
of the Public Land Act are hereby amended in the sense that these
provisions shall apply only to alienable and disposable lands of the
public domain which have been in open, continuous, exclusive and
notorious possession, and occupation by the applicant himself or
through his predecessor-in-interest, under a bona fide claim of
acquisition of ownership, since June 12, 1945.
Section 14(1) of P.D. No. 1529, otherwise known as the Property Registration
Decree, provides:
SEC. 14. Who may apply. — The following persons may file in the
proper Court of First Instance [now Regional Trial Court] an application
for registration of title to land, whether personally or through their duly
authorized representatives:
(1) Those who by themselves or through their predecessors-in-
interest have been in open, continuous, exclusive and notorious
possession and occupation of alienable and disposable lands of
the public domain under a bona fide claim of
ownership since June 12, 1945, or earlier (emphasis supplied).

Applicants for confirmation of imperfect title must, therefore, prove the following:
(a) that the land forms part of the disposable and alienable agricultural lands of
the public domain; and (b) that they have been in open, continuous, exclusive,
and notorious possession and occupation of the same under a bona fide claim of
ownership either since time immemorial or since June 12, 1945. 64
Under the Regalian doctrine, all lands not otherwise appearing to be clearly
within private ownership are presumed to belong to the State. The presumption is
that lands of whatever classification belong to the State. 65 Unless public land is
shown to have been reclassified as alienable or disposable to a private person by
the State, it remains part of the inalienable public domain. Property of the public
domain is beyond the commerce of man and not susceptible of private
appropriation and acquisitive prescription. Occupation thereof in the concept of
owner no matter how long cannot ripen into ownership and be registered as a
title. 66 The statute of limitations with regard to public agricultural lands does not
operate against the State unless the occupant proves possession and occupation
of the same after a claim of ownership for the required number of years to
constitute a grant from the State. 67
No public land can be acquired by private persons without any grant from the
government, whether express or implied. It is indispensable that there be a
showing of a title from the State. 68 The rationale for the period "since time
immemorial or since June 12, 1945" lies in the presumption that the land applied
for pertains to the State, and that the occupants or possessor claim an interest
thereon only by virtue of their imperfect title as continuous, open and notorious
possession.
A possessor of real property may acquire ownership thereof through acquisitive
prescription. In Alba Vda. de Raz v. Court of Appeals, 69 the Court declared that:
. . . [W]hile Art. 1134 of the Civil Code provides that '(o)wnership and
other real rights over immovable property are acquired by ordinary
prescription through possession of ten years,' this provision of law must
be read in conjunction with Art. 1117 of the same Code. This article
states that '. . . (o)rdinary acquisitive prescription of things requires
possession in good faith and with just title for the time fixed by
law.' Hence, a prescriptive title to real estate is not acquired by mere
possession thereof under claim of ownership for a period of ten years
unless such possession was acquired con justo titulo y buena fe (with
color of title and good faith). The good faith of the possessor consists in
the reasonable belief that the person from whom he received the thing
was the owner thereof, and could transmit his ownership. For purposes
of prescription, there is just title when the adverse claimant came into
possession of the property through one of the recognized modes of
acquisition of ownership or other real rights but the grantor was not the
owner or could not transmit any right. 70
To prove that the land subject of an application for registration is alienable, an
applicant must conclusively establish the existence of a positive act of the
government such as a presidential proclamation or an executive order, or
administrative action, investigation reports of the Bureau of Lands investigator or
a legislative act or statute. 71 Until then, the rules on confirmation of imperfect title
do not apply. A certification of the Community Environment and Natural
Resources Officer in the Department of Environment and Natural Resources
stating that the land subject of an application is found to be within the alienable
and disposable site per a land classification project map is sufficient evidence to
show the real character of the land subject of the application. 72
The applicant is burdened to offer proof of specific acts of ownership to
substantiate the claim over the land. 73 Actual possession consists in the
manifestation of acts of dominion over it of such a nature as a party would
actually exercise over his own property. 74 A mere casual cultivation of portions
of the land by the claimant does not constitute sufficient basis for a claim of
ownership; such possession is not exclusive and notorious as to give rise to a
presumptive grant from the State. 75
In this case, the evidence on record shows that the property is alienable
agricultural land. Romeo Cadano of the Community Environment and Natural
Resources Office, Antipolo Rizal, certified that the property "falls within the
Alienable and Disposable zone, under Land Classification Project No. 5-A, per
L.C. Map No. 639 certified released on March 11, 1927." 76 However,
under R.A. No. 4850 which was approved on July 18, 1966, lands located at and
below the maximum lake level of elevation of the Laguna de Bay are public
lands which form part of the bed of said lake. Such lands denominated as
lakeshore areas are linear strips of open space designed to separate
incompatible element or uses, or to control pollution/nuisance, and for identifying
and defining development areas or zone. Such areas of the lake with an
approximate total area of 14,000 hectares form a strip of the lakebed along its
shores alternately submerged or exposed by the annual rising and lowering of
the lake water. They have environmental ecological significance and actual
potential economic benefits. HEaCcD

Under Section 1 of the law, the national policy of the State is to promote and
accelerate the development and balanced growth of the Laguna Lake area and
the surrounding provinces, cities and towns within the context of the national and
regional plans and policies for social and economic development and to carry out
the development of the Laguna Lake region with due regard and adequate
provisions for environmental management and control, preservation of the quality
of human life and ecological systems, and the prevention of undue ecological
disturbances, deterioration and pollution.
The rapid expansion of Metropolitan Manila, the suburbs and the lakeshore town
of Laguna de Bay, combined with current and prospective uses of the lake for
municipal-industrial water supply, irrigation, fisheries, and the like, created deep
concern on the part of the Government and the general public over the
environmental impact of such development, on the water quality and ecology of
the lake and its related river systems. The inflow of polluted water from the Pasig
River, industrial, domestic and agricultural wastes from developed areas around
the lake and the increasing urbanization have induced the deterioration of the
lake, and that water quality studies have shown that the lake will deteriorate
further if steps are not taken to check the same. The floods in the Metropolitan
Manila area and the lakeshore towns are also influenced by the hydraulic system
of the Laguna de Bay, and any scheme of controlling the floods will necessarily
involve the lake and its river systems.
This prompted then President Ferdinand E. Marcos to issue on October 17,
1978 P.D. 813 amending Rep. Act No. 4850. Under Section 6 of the law, the
LLDA is empowered to issue such rules and regulations as may be necessary to
effectively carry out the policies and programs therein provided including the
policies and projects of the LLDA, subject to the approval of the National
Economic Development Authority.
In 1996, the Board of Directors of LLDA approved Resolution No. 113, series of
1996 relating to the Environmental Uses Fee Systems and Approval of the Work
and Financial Plan for its operationalization in the Laguna de Bay Basin. Section
5 of the Resolution provides that the LLDA as a matter of policy is to maintain all
shoreland areas lying below elevation 12.50 meters as buffer zone in
consonance with the LLDA policies, plans programs for the improvement of the
water quality and pollution and conservation of the water resources of the
Laguna de Bay.
As gleaned from the Survey Report of Magalonga, Polanco and Medenilla of the
LLDA based on the ocular inspection dated September 14, 2001 as well as the
Memorandum of Engineer Christopher Pedrezuela, the property is located below
the reglementary level of 12.50 m.; hence, part of the bed of the Laguna de Bay,
and, as such, is public land. Although the Report and Memorandum were not
offered as evidence in the MTC, the respondent admitted in its Manifestation in
this Court that the property is situated below the 12.50 elevation based on the
survey of Magalonga, Polanco and Medenilla, the same survey team who
conducted an ocular inspection of the property on April 12, 2005, which thus
confirmed the September 14, 2001 survey report. This is a judicial admission in
the course of judicial proceedings which is binding on it. 77
Under R.A. No. 4850 and the issuances of LLDA, registerable rights acquired by
occupants before the effectivity of the law are recognized. However, the
respondent failed to adduce proof that its predecessors-in-interest had acquired
registerable title over the property before July 18, 1966:
First. Cruz failed to prove how his parents acquired ownership of the property,
and even failed to mention the names of his grandparents. He likewise failed to
present his father's death certificate to support his claim that the latter died in
1980. There is likewise no evidence when his mother died. cITCAa

Second. Cruz also failed to adduce in evidence the extrajudicial partition


allegedly executed by his parents in 1980 where the property was supposedly
deeded to him and his sisters, Felisa and Eladia, to the exclusion of their five
siblings.
Third. Cruz claimed that he and his parents cultivated the property and
planted palay and vegetables, and that they had been paying the realty taxes
over the property before his parents died. However, no tax declarations under the
names of the spouses Apolonio Cruz and/or Eladia Cruz and his siblings were
presented, or realty tax receipts evidencing payment of such taxes. Indeed, while
tax receipts and tax payment receipts themselves do not convincingly prove title
to the land, 78 these are good indicia of possession in the concept of an owner,
for no one in his right mind would pay taxes for a property that is not in his actual
or, at least, constructive possession. 79 While tax receipts and declarations are
not incontrovertible evidence of ownership, they constitute, at the least, proof that
the holder has a claim of title over the property, particularly when accompanied
by proof of actual possession of property. 80 The voluntary declaration of a piece
of property for taxation purposes not only manifests one's sincere and honest
desire to obtain title to the property, but also announces an adverse claim against
the State and all other interested parties with an intention to contribute needed
revenues to the government. Such an act strengthens one's bona fide claim of
acquisition of ownership. 81

Fourth. When he testified on October 5, 2001, Antonio Cruz declared that he was
"74 years old." 82 He must have been born in 1927, and was thus merely 10
years old in 1937. It is incredible that, at that age, he was already cultivating the
property with his father. Moreover, no evidence was presented to prove how
many cavans of palay were planted on the property, as well as the extent of such
cultivation, in order to support the claim of possession with a bona fide claim of
ownership.
Fifth. Cruz testified that he hired a worker "upahan" to help him cultivate the
property. He, however, failed to state the name of the worker or to even present
him as witness for the respondent.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The decision of
the Court of Appeals in CA-G.R. CV No. 73278 is SET ASIDE. The Municipal
Trial Court of Taytay, Rizal is DIRECTED to dismiss the application for
registration of respondent Candymaker, Inc. in Land Registration Case No. 99-
0031. No costs.
SO ORDERED.
Panganiban, C.J., Ynares-Santiago, Austria-Martinez and Chico-Nazario,
JJ., concur.
(Republic v. Candy Maker, Inc., G.R. No. 163766, [June 22, 2006], 525 PHIL
|||

358-381)
[G.R. No. 120066. September 9, 1999.]

OCTABELA ALBA VDA. DE RAZ, SPOUSES MANUEL and


SUSANA BRAULIO, RODOLFO, LOURDES and BEATRIZ all
surnamed ALBA, petitioners, vs. COURT OFAPPEALS and
JOSE LACHICA, respondents.

Ramon N. Casanova and Florentino & Esmaquel Law Office for petitioners.
Virgilio S. Patricio and Ariel B. Gepty for private respondent.

SYNOPSIS

Private respondent Jose Lachica filed an application for title to land on April 28,
1958 with the claim that the land applied for was purchased by him and his wife,
Adela Raz from one Eulalio Raz. Petitioners filed an opposition to the application
for title contending that they have been in peaceful, continuous and open
possession, under claim of ownership,of the substantial portion of the land
applied for titling. On the basis of the testimonial and documentary evidence
presented by the applicant and the oppositors, the court a quo rendered
judgment declaring the parcel of land described in Plan Psu-161277 and the
improvements thereon be brought under the operation of the Property
Registration Decree and the title thereto be registered in the name of Jose
Lachica. The opposition filed by petitioners was dismissed for lack of merit.
Dissatisfied, petitioners interposed an appeal, but the Court of Appeals affirmed
the decision of the trial court. Hence, this appeal. The primordial issue to be
resolved is whether or not the private respondent/applicant is entitled to the
confirmation of his ownership in fee simple for the 4,845 square meter
parcel of land he applied for.
HSTCcD

The Court found the petition meritorious. The Court ruled that both the trial and
appellate courts erred in awarding the questioned land totally to private
respondent. A circumspect scrutiny of the evidence extant on record revealed
that with the exception of 620 square meters, there had been no satisfactory
showing of how private respondent/applicant acquired the remainder of the
subject land. Particularly, respondent did not produce the alleged
deeds of conveyance evidencing the purported transfers made by Eulalio Raz
and Eufrocino Alba in his favor. Instead he relied on secondary evidence to prove
the existence thereof which was sustained by both the trial and the appellate
courts. Such reliance on secondary evidence vis-a-vis the peculiar facts
prevailing in this case rest on infirm legal bases much more so in the fact of the
overwhelming documentary evidence of petitioners arrayed against it. Moreover,
there were glaring variances in the identities and technical descriptions of the
land applied for by private respondent/applicant and the land purportedly
purchased from Eufrocino Alba. Furthermore both trial and appellate courts
placed undue reliance on Tax Declaration No. 14181 considering that there
was no satisfactory explanation on how the area of land covered by said Tax
Declaration geometrically ballooned from a modest 620 square meter lot to a
huge parcel measuring 4,845 square meters. In sum, the Court had reservation
on the propriety of adjudicating to petitioners the contested portions of the
subject land, in viewof their failure to present the technical descriptions of these
areas. Furthermore, there was no sufficient evidence showing that petitioners
have been in open, adverse, exclusive, peaceful and continuous possession
thereof, in the concept of owner, considering that the testimony of petitioner
Octabela Alba vda. De Raz was stricken off the record. The decision of the
trial court was modified.

SYLLABUS

1.CIVIL LAW; LAND TITLES; AN APPLICANT FOR REGISTRATION OF LAND,


IF HE RELIES ON A DOCUMENT EVIDENCING HIS TITLE THERETO, MUST
PROVE NOT ONLY THE GENUINENESS OF HIS TITLE BUT THE
IDENTITY OF THE LAND THEREIN REFERRED TO; CASE AT BAR. — Other
than the foregoing transactions involving the subject land which are borne out by
the documentary evidence on record, private respondent/applicant did not
produce the alleged deeds of conveyances evidencing the purported transfers
made by Eulalio Raz and Eufrocino Alba in his favor. Instead he relied chiefly on
secondary evidence to prove the existence thereof which was sustained by both
the trial and the appellate courts. Such reliance on secondary evidence vis-a-
vis the peculiar facts prevailing in this case rests on infirm legal bases much
more so in the face of the overwhelming documentary evidence of petitioners
arrayed against it because — ". . . [a] contract of sale of realty cannot be proven
by means of witnesses, but must necessarily be evidenced by a written
instrument, duly subscribed by the party charged, or by his agent, or by
secondary evidence of their contents. No other evidence, therefore, can be
received except the documentary evidence referred to, in so far as regards such
contracts, and these are valueless as evidence unless they are drawn up in
writing in the manner aforesaid." "An applicant for registration of land, if he relies
on a document evidencing his title thereto, must prove not only the
genuiness of his title but the identity of the land therein referred to. The document
in such a case is either a basis of his claim for registration or not at all. If, as in
this case, he only claims a portion of what is included in his title, he must clearly
prove that the property sought to be registered is included in that title."
2.ID.; ID.; PUBLIC LAND ACT; PUBLIC LANDS; CLASSIFICATION THEREOF.
— Public lands are broadly classified into 1.] Alienable or disposable lands; and,
2.] Inalienable or non-disposable public lands. Non-disposable public lands or
those not susceptible of private appropriation include a.] Timber lands; and b.]
Mineral lands. For purposes ofadministration and disposition, the lands of the
public domain classified as 'disposable' or 'alienable' are further sub-classified
into a.] Agricultural; b.] Residential, commercial, industrial or for similar
productive purposes; c.] Educational, charitable or other similar purposes, and d.]
Reservations for town sites and for public and quasi-public purposes. From the
foregoing classifications, public agricultural land may be defined as those
alienable portions of the public domain which are neither timber nor mineral
lands. Thus the term includes residential, commercial and industrial lands for the
reason that these lands are neither timber nor mineral lands.
3.ID.; PROPERTY; TAX DECLARATION BY ITSELF; IS NOT CONCLUSIVE
EVIDENCE OF OWNERSHIP; CASE AT BAR. — A tax declaration, by itself, is
not conclusive evidence ofownership. Tax declarations for a
certain number of years, although constituting proof of claim of title to land, is not
incontrovertible evidence of ownership unless they are supported by other
effective proof. It was, thus, held in one case that where realty taxes covering
thirty-one (31) years were paid only a few months prior to the filing of an
application, such payment does not constitute sufficient proof that the applicant
had a bona fide claim of ownership prior to the filing of the application. Still in
another case, the claim that the application had been in continuous and
uninterrupted possession of the disputed land was not given credence because it
was negated by the fact that he declared the land for taxation purposes in
October 1959 when he filed his application for registration although he could
have done so in 1937 when he allegedly purchased the land. A belated
declaration is, furthermore, indicative that the applicant had no real
claim of ownership over the subject land prior to the declaration and where there
are serious discrepancies in the tax declarations as in this case, registration must
be denied. If at all, the foregoing facts only serves to underscore private
respondent/applicant's crafty attempt to cloak with judicial color his underhanded
scheme to seize the adjoining parcels of land and to enrich himself at the
expense of its rightful owners. HDTSIE

4.ID.; ID.; NO STATUTE, DECREE, ORDINANCE, RULE, REGULATION OR


POLICY SHALL BE GIVEN RETROSPECTIVE EFFECT UNLESS EXPLICITLY
STATED SO; CASE AT BAR. — The law in force at the time an action accrues is
what governs the proceeding consistent with the fundamental dictum that laws
shall have no retroactive effect, unless the contrary is proved. Basic is the rule
that no statute, decree, ordinance, rule, regulation or policy shall be given
retrospective effect unless explicitly stated so. Along the same vein, a court's
jurisdiction depends on the law existing at the time an action is filed and a law
continues to be in force with regard to all rights which accrued prior to the
amendment thereof.
5.ID.; PRESCRIPTION; PRESCRIPTIVE TITLE TO REAL ESTATE IS NOT
ACQUIRED BY MERE POSSESSION THEREOF UNDER
CLAIM OF OWNERSHIP FOR A PERIOD OF TEN YEARS UNLESS SUCH
POSSESSION WAS ACQUIRED WITH COLOR OF TITLE AND GOOD FAITH;
CASE AT BAR. — Even assuming ex gratia argumenti that prescription can be
applied in the manner invoked by the trial court and the appellate court, it must
be pointed out that — ". . . [W]hile Art. 1134 of the Civil Code provides that
'(o)wnership and other real rights over immovable property are acquired by
ordinary prescription through possession of ten years,' this provision of law must
be read in conjunction with Art. 1117 of the same Code. This article states that '. .
. (o)rdinary acquisitive prescription of things requires possession in good faith
and with just title for the time fixed by law.' Hence, a prescriptive title to real
estate is not acquired by mere possession thereof under claim of ownership for a
period of ten years unless such possession was acquired con justo titulo y buena
fe(with color of title and good faith). The good faith of the possessor consists in
the reasonable belief that the person from whom he received the thing was the
owner thereof, and could transmit his ownership. For purposes of prescription,
there is just title when the adverse claimant came into possession of the property
through one of the recognized modes of acquisition of ownership or other rights
but the grantor was not the owner or could not transmit any right."

6.ID.; PROPERTY; NO MAN CAN BE ALLOWED TO FOUND A CLAIM UPON


HIS OWN WRONGDOING; CASE AT BAR. — It can not be said that private
respondent's possession wascon justo titulo y buena fe. On the contrary, private
respondent/appellant's act of appropriating for himself the entire area of 4,845
square meters to the exclusion of petitioners who have been occupying
portions of the disputed land constituted acts of deprivation of the latter's rights
which is tantamount to bad faith. Indeed this Court has ruled that the — ". . .
(c)oncealment and misrepresentation in the application that no other persons had
any claim or interest in the said land, constitute specific allegations of extrinsic
fraud supported by competent proof. Failure and intentional omission of the
applicants to disclose the fact of actual physical possession by another person
constitutes an allegation ofactual fraud. Likewise, it is fraud to knowingly omit or
conceal a fact, upon which benefit is obtained to the prejudice of a third person."
Suffice it to state in this regard that to allow private respondent/applicant to
benefit from his own wrong would run counter to the maxim ex dolo malo non
oritur actio — no man can be allowed to found a claim upon his own wrongdoing.
DECISION

YNARES-SANTIAGO, J : p

Before us is an appeal by certiorari from a decision rendered by


the Court of Appeals dated August 18, 1992 affirming in toto the decision of the
Regional Trial Court of Kalibo, Aklan, Branch I, in Land Registration Case No. K-
101, LRC Record No. K. 15104, the dispositive portion of which reads as
follows:LibLex

"WHEREFORE, judgment is hereby rendered as follows:


1.The parcel of land described in Plan Psu-161277 and the
improvements thereon situated in the Poblacion of the
Municipality of Banga, Province of Aklan, Philippines, with an
area of 4,845 square meters is brought under the
operation of the property registration decree (PD No. 1529) and the title
thereto is registered and confirmed in the name ofapplicant Jose
Lachica, married to Adela Raz of Kalibo, Aklan, Philippines;
2.A ten (10) meter road width along the national road mentioned in the
application be segregated for future road widening program upon
payment of just compensation to be annotated at the back of the title;
3.For lack of merit, the opposition filed by the spouses Manuel and
Susana Braulio, Octabela Alba Vda. De Raz, Rodolfo Alba,
Lourdes Alba and Beatriz Alba are hereby DISMISSED.
SO ORDERED." 1
The factual antecedents of the case as summed by the trial court and adopted by
the Court of Appeals are as follows: dctai

"Applicant Jose Lachica filed this application for title to land on April 28,
1958 with the claim that the land applied for was purchased by him and
his wife, Adela Raz from, from one Eulalio Raz. The documents attached
to the application are: technical description, surveyor's certificate,
certification by the chief deputy assessor of Aklan and the blue
printof Psu-161277.
The initial hearing was scheduled for October 31, 1958 and the
certificate of publication in the Official Gazette was issued on September
23, 1958. The certification of posting ofthe notice of initial hearing was
issued on October 13, 1958.
The land applied for is residential, situated in the Poblacion of Banga,
Aklan, with an area of 4,845 square meters, bounded on the northeast
by the property of the Municipalityof Banga (Sketch, Exh. "F").
The initial hearing was held on October 31, 1958. An
order of general default was issued but those who presented their
opposition, namely, Octabela Alba Vda. De Raz, Manuel and Susana
Braulio, Jose Rago, representing Apolonia Rebeco, the
Director of Lands and the Municipality of Banga represented by the
Provincial Fiscal, were given thirty (30) days to file their written
opposition.
Manuel C. Braulio and Susana P. Braulio filed their opposition on
October 31, 1958. They opposed the registration of the southeastern
portion of the 240 square meters of the land applied for alleging that they
are the owners in fee simple and possessors of said portion and all the
improvements thereon for not less than 70 years together with their
predecessor-in-interest deriving their title by purchase from the original
owners. They prayed for the Court to declare them the true and absolute
owners of the disputed portionof the same in their names. cdphil

On October 31, 1958, Octabela Vda. de Raz filed her opposition.


Jose Rago filed his opposition on November 29, 1958 as the duly
constituted attorney-in-fact of Apolonia Rebeco although no special
power of attorney was attached. He opposed the registration of the
northeastern portion of the land applied for, with an area of 43.83 square
meters. He alleged that his principal is the owner by right of succession
and is in the possession of said portion with all its improvements for
more than 80 years together with his predecessor-in-interest,
continuously, peacefully and openly under claim of ownership. He
prayed that his principal be declared the true and absolute owner of the
disputed portion of 43.83 square meters.
On March 22, 1966, the Court issued an Order allowing the applicant to
hire another surveyor to segregate the non-controversial portion of the
land applied for and to notify the oppositors and their counsels.
On January 12, 1970, a motion to lift the order of general default and to
admit the attached opposition of Rodolfo Alba, Lourdes Alba and
Beatriz Alba, as well as a motion to admit the attached amended
petition of Octabela Vda. de Raz were filed. The Court in its order dated
March 21, 1970 admitted said opposition and set aside the
order of default.
In their opposition, Rodolfo Alba, Lourdes Alba, represented by their
attorney-in-fact, Octabela Alba Vda. de Raz, alleged that they are the co-
owners of a portion of the land applied for with an area of 2,262 square
meters bounded on the north by Januario Masigon, Nicolas Realtor,
Agustina Rebeldia and Apolonia Rebeco, on the south by Eulalio Raz
and on the west by the public market of Banga. They claimed to have
inherited the above-mentioned portion from their late father, Eufrosino
M. Alba, who purchased the same from Dionisia Regado in 1918.
Hence, they have been in possession continuously, openly and
peacefully under claim of ownership of the above-mentioned portion for
not less 70 years. They prayed that the disputed portion of 2,262 square
meters be registered as their pro-indiviso property.
In her amended opposition, Octabela Alba Vda. de Raz opposed the
registration of the southeastern portion of the land applied for with an
area of 331.44 square meters. She claimed to have been in peaceful,
continuous and open possession together with her deceased husband,
Eulalio Raz, under claim of ownership of the above-mentioned portion
for not less than 70 years, by purchase from its owners. She likewise
opposed the registration of the western portion of the land applied for,
with an area of 676 square meters, having purchased the same from its
original owners on (sic) her predecessor-in-interest has been open,
peaceful and continuous under claim of ownership for a period of not
less than 70 years. She prayed that the portion of 331.44 square meters
be registered in her name and that of the heirs of Eulalio Raz, pro
indiviso., and the other portion of 676 square meters be registered solely
in her name. cdasia

On February 25, 1970, the applicant Dr. Jose Lachica filed his
consolidated opposition and reply to the motion to lift order of default
stating that there is no reason to do so under the Rules of Court, and
that the opposition of Rodolfo Alba, Lourdes Alba and Beatriz Alba, as
well as the amended opposition of Octabela Alba Vda. de Raz are
without merit in law and in fact.
On March 21, 1970, the motion to lift the order of general default was
granted and the opposition of Rodolfo Alba, Lourdes Alba and
Beatriz Alba, as well as the opposition ofOctabela Alba Vda. de Raz
were all admitted.
In the hearing of March 3, 1972, applicant offered for admission exhibits
'A' to 'I' and the testimonies of Pedro Ruiz (April 20, 1971), Jose Rago
(Oct. 23, 1970) and Dr. Jose Lachica (July 16, 1971; Feb. 10, 1972).
The Court admitted the same.
On March 13, 1974, the Court issued an order appointing Engr. Angeles
Relor to act as Commissioner and delimit the portions claimed by the
three sets of oppositors and submit an amended approved plan together
with the technical description for each portion.
The Commissioner's report and sketch was submitted on December 4,
1974. The applicant filed his opposition to the Commissioner's report on
December 12, 1974. The Court in its order of December 13, 1974
required the Commissioner to submit an amended report and amended
sketch.llcd
The Commissioner's corrected report and sketch was submitted on
February 24, 1975 which the Court approved on February 25, 1975 there
being no objection from the parties.
On March 15, 1977, the Court issued an order whereby the
testimony of oppositor Octabela Alba Vda. de Raz was stricken off the
record for her failure to appear in the scheduled hearing on March 15,
1977.
Again, in its order dated May 27, 1977 the
testimony of Octabela Alba Vda. de Raz was stricken off record because
the latter was bedridden and can not possibly appear for cross-
examination.
Oppositor Octabela Alba Vda. de Raz substituted by her heirs filed a
formal offer of exhibits on August 24, 1988. Applicant filed his comments
thereto on August 29, 1988. TheCourt admitted said exhibits and the
testimony of their witness on March 1, 1989.
In this application for title to land filed by applicant Jose Lachica, four
oppositions were filed by the following:
1.Jose Rago, in representation of Apolonia Rebeco;
2.Manuel C. Braulio and Susana Braulio;
3.Rodolfo, Lourdes and Beatriz, all surnamed Alba, represented by
Octabela Alba Vda. de Raz; and
4.Octabela Alba Vda. de Raz.
In the hearing of October 23, 1970, counsel for oppositor Jose Rago
manifested that he would file a motion for withdrawal of opposition and
Jose Rago himself declared his conformity (Tsn, Oct. 23, 1970, p. 5).
Although no formal motion to withdraw was actually filed, oppositor Rago
has not presented evidence on his behalf; hence, his opposition must be
disregarded. LLpr

As regards oppositor Manuel C. Braulio and Susana Braulio, a


deed of sale supposedly executed by Susana Braulio and
Octabela Alba Vda. de Raz in 1956 was identified by Felimon Raz, a
witness for the oppositors (Tsn, Sept. 29, 1977, pp. 3 to 4). However,
said deed cannot be found in the records. Even so, the Braulios have not
presented evidence to show that by the time this application was filed,
they and their predecessors-in-interest have been in actual, open, public,
peaceful and continuous possession of the land claimed, in
concept of owner, for at least 10 years sufficient to acquire title thereto
(Arts. 1117, 1118, 1134, Civil Code of the Philippines). As such, the
opposition of Manuel C. Braulio and Susana Braulio must be
dismissed." 2
On the basis of the testimonial and documentary evidence presented by the
applicant and the oppositor Raz, the court a quo rendered judgment in
favor of the applicant as stated at the outset. In dismissing the claim of the
remaining oppositors Rodolfo, Lourdes and Beatriz, all surnamed Alba,
represented by Octabela Alba Vda. de Raz and OctabelaAlba Vda. de Raz
herself, the trial court in sum noted that said oppositors have never offered any
explanation as to the non-payment of realty taxes for the disputed portions ofthe
subject property from 1941 to 1958 while the respondent/applicant continuously
paid taxes under Tax Declaration No. 14181 covering said property from 1945-
1958 when the case was filed per certification issued by the Municipal
Treasurer's Office of Banga. 3 In rendering judgment in
favor of respondent/applicant, the trial court stressed that while it is true that tax
receipts and declarations of ownership for tax purposes are not incontrovertible
evidence of ownership, they become strong evidence of ownership acquired by
prescription when accompanied by proof of actual possession.
Dissatisfied, petitioners interposed an appeal to the Court of Appeals which
affirmed the decision of the trial court.
Unfazed, petitioners now come to this Court arguing that —
1.The Civil law provisions on prescription are inapplicable.
2.The applicable law is Section 48[a] of the Public Land Law or Act 141,
as amended. LLjur

3.Private respondent has not acquired ownership in fee simple, much


less has he met the conditions for judicial
confirmation of imperfect title under Section 48[a] of Act 141, as
amended, except perhaps for a 620 square meter portion of the
land applied for because:
3.1.There is absolutely no proof of the alleged sales made by Raz
and Alba.
3.2.There is absolutely no reliable proof of the alleged theft of the
deeds of sale.
3.3.The identity of the land has not been established.
3.4.The Court of Appeals misapplied the basic rules governing the
introduction of secondary evidence.
3.5.The applicant/respondent's Tax Declaration No. 14181 is a
'doctored' tax declaration.
3.6.Applicant/respondent's tax declarations have no probative
value.
3.7.Applicant/respondent has not satisfied the required
quantum of evidence in land registration cases.
3.8.Petitioners-oppositors have proven their right over the subject
property.
In rendering judgment in favor of private respondent,
the Court of Appeals reasoned, inter alia, as follows:
"On the basis of the testimonial and documentary evidence presented by
the applicant, the trial court did not err in confirming that the applicant is
the absolute owner in fee simple of the property subject of the
application for registration entitling him to register the same in his name
under the operation of PD 1529.
It is of no moment that the applicant failed to produce the
originals of those other deeds/documents of conveyances, for he was
able to present sufficient substantial secondary evidence, in accordance
with the requirements of Section 4, Rule 130 of the Revised
Rules of Court, now Section 5, same Rule of the Revised Rules on
Evidence, and the doctrines in point. cdrep

Thus, Government vs. Martinez, 44 Phil. 817, explained that when the
original writing is not available for one reason or another which is the
best or primary evidence, to prove its contents is the testimony of some
one who has read or known about it. Republic vs. Court of Appeals, 73
SCRA 148, laid out the foundation before secondary evidence is
introduced, that the due execution, delivery and reason for non-
production of the original writing must first be
produced. Raylago vs. Jarabe, 22 SCRA 1247, ruled that it is not
necessary to prove the loss of the original document beyond all
possibility of mistake. A reasonable probability of its loss is sufficient and
this may be shown by a bonafide (sic) and diligent search, fruitlessly
made, for it in places where it is likely to be found. After proving the due
execution and delivery of the document, together with the fact that the
same has been lost or destroyed, its contents may be proved, among
others, by the recollection of witnesses. And Beall vs. Dearing, 7 ala.
126; and Bogardasvs. Trinity Church, 4 Sandf. Ch. (Nn.y.) 639,
are of the view that that where the lost documents are more than thirty
(30) years old and would thus prove themselves if produced, secondary
evidenceof their contents is admissible without proof of their execution.
In the case at bar, petitioner acquired the property in 1940-1941. He
presented the Deed (Exh. G) executed by the vendor Faustino Martirez.
While he failed to present the other deeds of sale covering the other
portions of the property, he has sufficiently established that they were
notarized documents and were taken by his mother-in-law sometime in
1956. He reported the loss to the authorities and even filed a
case of theft. He further exerted efforts and made a diligent
search of those documents from the notary public but in vain. He
presented the clerk of the Municipal Treasurer's Office of Banga, who
testified having seen those deeds as they were presented to him by the
applicant and which were used as basis for the preparation and
issuance of Tax Declaration No. 14181 in the name of the tax declarant.
Tax Declaration No. 14181 (Exh. H) was presented in Court, proving that
the land was declared for tax purposes in the name of the applicant and
his wife. The applicant has been paying the realty tax covering the
property since 1945 and beyond 1958, when the application for
registration was filed in court, per certification of the Municipal
Treasurer of Banga (Exh. 1).
In resume, We find and so hold as did the trial court that Dr. Jose
Lachica is the absolute owner in fee simple of the land described in his
application for its original registration in his name. The land contains an
area of 4,845 square meters, more or less, situated in Banga, Aklan, and
"Bounded on the NE., along line 1-2, by property of Apolonia
Rimate; on the SE., along line 2-3, by National road; on the SW.,
along line 3-4, by property of the Mpl. Government of Banga
(Public Market); and on the NW., along line 4-1, by property of the
Municipal Government of Banga (Public Market). Beginning at a
point marked 1 on plan, being N. 45 deg. 02' E., 423.38 m. from
B.L.L.M. 1, Mp. of Banga, Aklan;
thence, S. 33 deg. 46' E., 87.66 m. to point "2"
thence, S. 56 deg. 42' W., 63.81 m. to point "3"
thence, N. 37 deg. 22' W., 59.26 m. to point "4"
thence, N. 33 deg. 42' E., 73.08 m. to the point of
beginning, . . . All points referred to are indicated on the plan and
are marked on the ground by P.L.S. Cyl. Conc. Mons. Bearings
true date of the survey, January 25, 1957, and that of the
approval, October 3, 1957." cdphil

The applicant has been in public, open, continuous and adverse


possession of the property since 1940-41 up to the present to the
exclusion of all, and thereby also acquired the property by acquisitive
prescription, in accordance with Sections 40 and 43 of Act 190,
otherwise known as the "Code of Civil Procedure", having been in actual
and adverse possession under claim of ownership for over ten (10)
years, and thus in whatever way his occupancy might have commenced
or continued under a claim of title exclusive of any other right and
adverse to all other claimants, resulted in the acquisition of title to the
land by acquisitive prescription (Vda. de Delima vs. Tio, 32 SCRA 516).
Indeed, to borrow the apt words of the ponente in the Delima case, such
proof of ownership of, and the adverse, continuous possession of the
applicant since 1940, strongly ". . . militate against any judicial
cognizance of a matter that could have been withheld in its ken," hence,
whatever right oppositors may have had over the property or any portion
thereof was thereby also lost through extinctive prescription in
favor of the applicant who had been in actual, open, adverse and
continuous possession of the land applied for in the concept of owner for
over 10 years when the application for registration was filed in court." 4
It is a fundamental and settled rule that findings of fact by the trial court and
the Court of Appeals are final, binding or conclusive on the parties and upon
this Court, 5 which will not be reviewed 6 or disturbed on appeal unless these
findings are not supported by evidence 7 or unless strong and cogent reasons
dictate otherwise. 8
More explicitly, the findings of fact of the Court of Appeals, which are as
a general rule deemed conclusive, may be reviewed by this Court in the following
instances:llcd

1.]When the factual findings of the Court of Appeals and the


trial court are contradictory; 9
2.]When the conclusion is a finding grounded entirely on speculation,
surmises and conjectures; 10
3.]When the inference made by the Court of Appeals from its
findings of fact is manifestly mistaken, absurd 11 or impossible;
4.]Where there is a grave abuse of discretion in the
appreciation of facts; 12
5.]When the appellate court in making its findings went beyond the
issues of the case, and such findings are contrary to the
submission of both appellant and appellee; cda

6.]When the judgment of the Court of Appeals is premised on a


misapprehension of facts; 13
7.]When the Court of Appeals manifestly overlooked certain relevant
facts not disputed by the parties which, if properly considered,
would justify a different conclusion; 14
8.]When the findings of fact are themselves conflicting;
9.]When the findings of fact are conclusions without citation of specific
evidence on which they are based; and
10.]When the findings of fact of the Court of Appeals are premised on
the absence of evidence but such findings are contradicted by the
evidence on record. 15
The primordial issue to be resolved is whether or not the private
respondent/applicant is entitled to the confirmation of his ownership in fee simple
for the 4,845 square meter parcel of land he applied for.
In sum, both the trial court and the Court of Appeals adjudicated and confirmed
private respondent/applicant's title to the land on the basis of the findings that: 1.]
the private respondent/applicant purchased the land from Faustino Martirez; 2.]
the subject land is covered by Tax Declaration No. 14181; 3.] the private
respondent/applicant has paid the realty taxes on the land from 1945 up to the
filing of his application in 1958; 4.] the private respondent/applicant has been in
actual, open and continuous possession of the subject land in the
concept of owner since 1945, and 5.] the private respondent/applicant has
acquired the land by prescription. cdphil

As stated earlier, a review of the findings of fact of the Court of Appeals is not a
function that this Court normally undertakes 16 unless the appellate court's
findings are palpably unsupported by the evidence on record or unless the
judgment itself is based on a misapprehension of facts. 17 A thorough
review of the record convinces this Court that thegeneral rule with regard to the
conclusiveness of the trial court's and appellate tribunal's factual findings should
not be applied because there are material circumstances which, when properly
considered, would have altered the result of the case.
First, a circumspect scrutiny of the evidence extant on record reveals that with
the exception of 620 square meters, there has been no satisfactory
showing of how private respondent/applicant acquired the remainder of the
subject land.
As can be gathered from the discussion of the appellate court, as well as the
arguments proffered by private respondent, he acquired the land in question from
three (3) sources, namely: a.] A Deed of Sale dated August 13, 1941 allegedly
executed by Faustino Martirez covering 840 square meters; b.] 300 square
meters allegedly purchased from private respondent's father-in-law Eulalio Raz,
and c.] 3,725 square meters private respondent allegedly bought in 1940 from
Eufrocino Alba.
The sale involving the first parcel of land covering 840 square meters, was not
questioned by petitioners as its technical description delineated in the Escritura
De Venta Absolutadated August 13, 1941, 18 to wit:
"Un terreno solar residencia antes palayero regado, actuado en el casco
central del municipio de Banga, Capiz. Sin ninguna mejora, de una
extension superficial de ochocientos cuarenta metros cuadrados (840
mts. cds.) 6 sean cuarenta metros de frente por otros veinte y
unmetrode fondo, cuyos linderos por el Norte con propiedad de
Eufrosino Alba y con Eulalio Raz; por Este con Eulalio Raz y con la
carretera provincial de Kalibo a Banga; por Sur con la misma carretera
provincial y con terreno del municipio para mercado; y por al Oeste con
al terreno del mercado municipal de Banga y con propiedad de
Eufrosino Alba y al terreno tienes sus mojones de cemento en todos sus
cuatro cantos de linderia y sin otro limite visible de linderia mas que
dichos mojones y esta amillarado a mi nombre en una sola hoja
declaratoria de propiedad Tax No. 12374 en la Oficina del Tasador
Provincial de Capiz, cuyo valor amilarado actual es veinte pesos
(P20.00) . . ."
leaves no room for doubt as to its identity, total area of 840 square meters as
well as its dimensions of 40 meters in front and 21 meters at the base. How
this parcel was further reduced to 620 square meters is explained by the fact
that the Municipal Government of Banga appropriated 220 square meters
thereof for the Banga Public Market Road. prcd

What, however, is seriously contested are the alleged purchases of the other two
parcels from Eulalio Raz measuring 300 square meters and from
Eufrocino Alba measuring 3,725 square meters owing to the questionable
circumstances surrounding their acquisition.
The records disclose that the subject land was originally owned by Dionisia
Regado under Tax Declaration No. 802. 19 The records further reveal that
Dionisia Regado sold: [1.]1,850 square meters of the land to the
Municipality of Banga evidenced by a Spanish document denominated as a
deed of sale dated April 29, 1914; 20 [2.] 1,320 square meters to Eulalio Raz
evidenced by a document entitled Escritura de Venta Absoluta dated September
6, 1918, 21 and [3.] 2,938 square meters to Eufrocino Alba evidenced by a
deed ofconveyance dated September 6, 1918 written in Spanish. 22
Faustino Martirez acquired a portion of 840 square meters from Eulalio Raz on
January 15, 1933. 23 Raz retained 480 square meters, however, he and his wife
Octabela Albaconveyed a 240 square meter portion thereof to Susana Braulio on
November 5, 1956. 24 Subsequently on May 29, 1969, the
heirs of Eufrocino Alba sold a 676 square meter portion of the parcel purchased
by Eufrocino to Octabela Alba Vda. de Raz. 25 The deed of conveyance was duly
registered with the Registry of Deeds of Aklan pursuant to Act No. 334 on June
17, 1969 26 and is covered by Tax Declaration No. 332 in the name of Eulalio
Raz, her husband. 27
Other than the foregoing transactions involving the subject land which are borne
out by the documentary evidence on record, private respondent/applicant did not
produce the alleged deeds of conveyances evidencing the purported transfers
made by Eulalio Raz and Eufrocino Alba in his favor. Instead he relied chiefly on
secondary evidence to prove the existence thereof which was sustained by both
the trial and the appellate courts. Such reliance on secondary evidence vis-Ã -
vis the peculiar facts prevailing in this case rests on infirm legal bases much
more so in the face of the overwhelming documentary evidence of petitioners
arrayed against it because —
". . . [a] contract of sale of realty cannot be proven by
means of witnesses, but must necessarily be evidenced by a written
instrument, duly subscribed by the party charged, or by his agent, or by
secondary evidence of their contents. No other evidence, therefore, can
be received except the documentary evidence referred to, in so far as
regards such contracts, and these are valueless as evidence unless they
are drawn up in writing in the manner aforesaid." 28 cdrep

"An applicant for registration of land, if he relies on a document


evidencing his title thereto, must prove not only the genuineness of his
title but the identity of the land therein referred to. The document in such
a case is either a basis of his claim for registration or not at all. If, as in
this case, he only claims a portion of what is included in his title, he must
clearly prove that the property sought to be registered is included in that
title." 29
Second, there are glaring variances in the identities and technical
descriptions of the land applied for by private respondent/applicant and the land
he purportedly purchased from Eufrocino Alba.
Private respondent/applicant alleged that he purchased the remainder of the
subject land measuring 3,725 square meters from Eufrocino Alba sometime in
1940 averring that this parcel is listed as Item No. 5 of his Exhibit "I" which is
denominated as an "Inventory And Appraisal Of The Properties Of The Spouses
Adela Raz De Lachica (Deceased) and Dr. Jose Lachica." Item No. 5 30 of the
said inventory described the parcel of land mentioned therein as follows:
"5.Una parcela de terreno cocal secano, amillarado en nombre de
Eufrocino Alba bajo el Tax No. 12792 por valor de P390.00, situado en
el municipio de Banga, Capiz, que linda el Norte con Lorenzo Retiro, y
Silverio Relis; al Este con la carretera provincial Banga-Libacao; al sur
con Bienvenido M. Alba y al Oeste con Cirilo rala y Adela Raz; con una
extension aproximada de una (1) hectarea (20) areas y (35) centiareas
poco mas o menos. (Note: Said property was purchased by the spouses
Jose Lachica and Adela Raz Lachica from Eufrocino M. Alba in the
amount of P500.00 as evidenced by a Escritura de
Compraventa executed on November 25, 1940, at Himamaylan, Negros
Occidental and notarized by Atty. Conrado Gensiano, as Reg. Not. 122,
Pag. 67, Libro VIII, Serie 1940).
On the other hand, the land applied for is described technically per Psu 161277
as —
"A parcel of land (as shown on Plan Psu-161277), situated in Poblacion,
Municipality of Banga, Province of Aklan. Bounded on the NE., along
line 1-2, by property of Apolonia Rimate; on the SE., along line 2-3, by
National Road; on the SW., along line 3-4, by property of the Mpl.
Government of Banga (Public Market); and on the NW., along line 4-1,
by property of the Municipal Government of Banga (Public Market).
Beginning at a point marked "1" on plan, being N. 45 deg. 02' E., 423.38
m. from B.L.L.M. 1, Mp. of Banga, Aklan; prcd

thence S. 33 deg. 46' E. 87.66 m. to point "2"


thence S. 56 deg. 42" W., 63.81 m. to point "3"
thence N. 37 deg. 22' W., 59.26 m. to point "4"
thence N. 33 deg. 42' E., 73.08 m. to the point of
beginning, containing an area of FOUR THOUSAND EIGHT HUNDRED
AND FORTY FIVE (4,845) SQUARE METERS. All points referred to are
indicated on the plan and are marked on the ground by P.L.S. Cyl. Conc.
Mons. Bearings true date of survey, January 25, 1957, and that of the
approval, October 3, 1957." 31

It will be readily noted vis-Ã -vis the foregoing that: a.] the land applied for is
covered by Tax Declaration No. 14181 while the parcel allegedly purchased from
Eufrocino Alba is covered by Tax Declaration No. 15792; b.] the land applied for
is palayero whereas the land allegedly acquired from Eufrocino Alba is cocal
secano. Palay is unhusked rice, 32 thus, the term palayero refers to land devoted
to the planting of rice; cocal, on the other hand, means coconut tree
plantation 33 while secano denotes unwatered land or a dry sand bank; 34 c.] the
land applied for has an area of 4,845 square meters whereas the land
supposedly sold by Eufrocino Alba measures 12,035 square meters; d.] the land
applied for is bounded on the NE by the Banga Public Market, on the SE by
Apolonia Rimate, on the SW by the Banga-Kalibo National Road; and on the NW
by the Banga Public Market whereas the land allegedly obtained from
Eufrocino Alba is bounded on the N by Ernesto Retino and Silverio Relis, on the
E by the Banga-Libacao Carretera Provincial, on the S by Bienvenido Alba and
on the W by Cirilo Rala and Adela Raz. It needs be stressed in this regard that a
person who claims that he has better right to real property must prove not only
his ownership of the same but also must satisfactorily prove the identity
thereof. 35
Third, both trial and appellate courts placed undue reliance on Tax
Declaration No. 14181 considering that there is no satisfactory
explanation of how the area of land covered by Tax Declaration No. 14181
geometrically ballooned from a modest 620 square meter lot to a huge parcel
measuring 4,845 square meters.
As pointed out by petitioners, Tax Declaration No. 14181 was preceded by 1954
Tax Declaration No. 13578 in the name of private respondent/applicant and his
spouse which shows that the land declared therein for taxation purposes covers
an area of 620 square meters. Tax Declaration No. 13578 was preceded by 1953
Tax Declaration No. 13040 in the name of Adela Raz, private respondent's wife.
The land declared for taxation purposes therein also has an area of 620 square
meters. Tax Declaration No. 134040 was preceded by 1947 Tax Declaration No.
6528 in the name of private respondent's wife, Adela Raz. The land declared
therein for taxation purposes likewise measures 620 square meters. LLpr

It appears that the quantum leap from 620 square meters in 1947 to 4,845
square meters in 1956 came about on account of an affidavit dated November
17, 1956 wherein private respondent/applicant requested 36 the Municipal
Assessor of Banga to issue a revised tax declaration covering 4,845 square
meters on the bare claim that "the area has been decreased" to only 620 square
meters. The timing of the revision and its proximity to the date of filing of the
application can not but engender serious doubts on the application more so
considering that prior thereto realty tax payments covering the period 1945 to
1956 covered an area measuring 620 square meters and private
respondent/applicant is banking on said payments to claim possession and
ownership over the same period for an infinitely larger area of 4,845 square
meters.
A tax declaration, by itself, is not conclusive evidence of ownership. 37 Tax
declarations for a certain number of years, although constituting
proof of claim of title to land, 38 is not incontrovertible evidence of ownership
unless they are supported by other effective proof. 39 It was, thus, held in one
case 40 that where realty taxes covering thirty-one (31) years were paid only a
few months prior to the filing of an application, such payment does not constitute
sufficient proof that the applicant had a bona fide claim of ownership prior to the
filing of the application. Still in another case, 41 the claim that the applicant had
been in continuous and uninterrupted possession of the disputed land was not
given credence because it was negated by the fact that he declared the land for
taxation purposes in October 1959 when he filed his application for registration
although he could have done so in 1937 when he allegedly purchased the land.
A belated declaration is, furthermore, indicative that the applicant had no real
claim of ownership over the subject land prior to the declaration 42 and where
there are serious discrepancies in the tax declarations as in this case,
registration must be denied. 43 If at all, the foregoing facts only serves to
underscore private respondent/applicant's crafty attempt to cloak with judicial
color his underhanded scheme to seize the adjoining parcels of land and to
enrich himself at the expense of its rightful owners.
Fourth, the lower court's reliance on prescription is not well-taken given the
peculiar facts prevailing in this case.
The law in force at the time an action accrues is what governs the proceeding
consistent with the fundamental dictum that laws shall have no retroactive effect,
unless the contrary is proved. 44 Basic is the rule that no statute, decree,
ordinance, rule, regulation or policy shall be given retrospective effect unless
explicitly stated so. 45 Along the same vein, a court's jurisdiction depends on the
law existing at the time an action is filed 46 and a law continues to be in force with
regard to all rights which accrued prior to the amendment thereof. 47
In this case, the controlling statute when the private respondent/applicant filed his
application for registration on April 28, 1958 is Section 48 of Commonwealth Act
141, as amended by RA Nos. 1942 and 6236, 48 which states that: dctai

"SECTION 48.The following-described citizens of the Philippines,


occupying lands of the public domain or claiming to own any such lands
or an interest therein, but whose titles have not been perfected or
completed, may apply to the Court of First Instance of the province
where the land is located for confirmation of their claims and the
issuance of a certificate of title therefor, under the Land Registration Act,
to wit:
(a)Those who prior to the transfer of sovereignty from Spain to the
United States have applied for the purchase, composition or other
form of grant of lands of the public domain under the laws and royal
decrees then in force and have instituted and prosecuted the
proceedings in connection therewith, but have with or without default
upon their part, or for any other cause, not received title therefor, if such
applicants or grantees and their heirs have occupied and cultivated said
lands continuously since the filing of their applications. 49
(b)Those who by themselves or through their predecessors in interest
have been in open, continuous, exclusive and notorious possession and
occupation of agricultural lands ofthe public domain under a bona
fide claim of ownership, for at least thirty years immediately preceding
the filing of the application for confirmation of title except when
prevented by war or force majeure. These shall be conclusively
presumed to have performed all the conditions essential to a
Government grant and shall be entitled to a certificate of title under the
provisions of this chapter. 50
(c)Members of the national cultural minorities who by themselves or
through their predecessors-in-interest have been in open, continuous,
exclusive and notorious possession and occupation of lands of the public
domain suitable to agriculture, whether disposable or not, under a bona
fide claim of ownership for at least 30 years shall be entitled to the rights
granted in subsection (b) hereof. 51
A circumspect scrutiny of the assailed Decision readily shows that in affirming the
ruling of the trial court, the Court of Appeals relied on the provisions of Section
19 of Act 496 52in relation to the Civil Code's provisions on prescription on the
assumption that the subject land is private land. Therein lies the flaw in the
appellate court's postulate. The application for registration of private respondent
is for the judicial confirmation of an imperfect title considering that the land is
presumed under the Regalian Doctrine to be partof the public domain. dctai

Public lands are broadly classified into 1.] Alienable or disposable lands; and, 2.]
Inalienable or non-disposable public lands. Non-disposable public lands or those
not susceptibleof private appropriation include a.] Timber lands; and, b.] Mineral
lands. 53 For purposes of administration and disposition, the lands of the public
domain classified as disposable' or 'alienable' are further sub-classified into a.]
Agricultural; b.] Residential, commercial, industrial or for similar productive
purposes; c.] Educational, charitable or other similar purposes; and d.]
Reservations for town sites and for public and quasi-public purposes. 54
From the foregoing classifications, public agricultural land may be defined as
those alienable portions of the public domain which are neither timber nor
mineral lands. Thus the term includes residential, commercial and industrial
lands for the reason that these lands are neither timber nor mineral lands. 55
On the other hand, Section 19 of Act No. 496, as amended, permits the
registration of private lands claimed to be owned by the applicant in fee simple
which refer to:
1.]Lands acquired by various types of titles from the government during
the Spanish Regime by way of grants by the Spanish crown namely the:
a.] Titulo real or royal grant; b.]Concession especial or special grant;
c.] Composicion con el estado title or adjustment title; d.] Titulo de
compra or title by purchase and; e.] Informacion posesoria or
possessory information title, which could become a Titulo gratuito or a
gratuitous title; 56
2.]Lands that are claimed to be owned by accession, i.e. accretion,
avulsion, formation of islands, abandoned river beds, as provided for in
Articles 457, 461 and 464 of the Civil Code; and

3.]Lands which have been acquired in any other manner provided by


law.cdll

Suffice it to state that the land sought to be registered by private respondent


hardly falls under any of the latter classifications of land referred to by Act No.
496, as amended. Given the foregoing facts, prescription in the manner invoked
by both courts can not be pleaded to bolster private respondent/applicant's claim
because —
". . . [N]o public land can be acquired by private persons without any
grant, express or implied from the government; it is indispensable that
there be a showing of title from the state . . . 57
xxx xxx xxx
Indeed, the possession of public agricultural land, however, long the
period may have extended, never confers title thereto upon the
possessor. 58 The reason, to reiterate our ruling, is because the
statute of limitations with regard to public agricultural land does not
operate against the State, unless the occupant can prove possession
and occupation ofthe same under claim of ownership for the
required number of years to constitute a grant from the State." 59
Fifth, even assuming ex gratia argumenti that prescription can be applied in the
manner invoked by the trial court and the appellate court, it must be pointed out
that —
". . . [W]hile Art. 1134 of the Civil Code provides that '(o)wnership and
other real rights over immovable property are acquired by ordinary
prescription through possession of ten years,' this provision of law must
be read in conjunction with Art. 1117 of the same Code. This article
states that '. . . (o)rdinary acquisitive prescription of things requires
possession in good faith and with just title for the time fixed by
law.' Hence, a prescriptive title to real estate is not acquired by mere
possession thereof under claim of ownership for a period of ten years
unless such possession was acquired con justo titulo y buena fe (with
color of title and good faith). 60 The good faith of the possessor consists
in the reasonable belief that the person from whom he received the thing
was the owner thereof, and could transmit his ownership. 61 For
purposes of prescription, there is just title when the adverse claimant
came into possession of the property through one of the recognized
modes of acquisition of ownership or other real rights but the grantor
was not the owner or could not transmit any right." 62cdasia

It can not be said that private respondent's possession was con justo titulo y
buena fe. On the contrary, private respondent/applicant's act of appropriating for
himself the entire area of 4,845 square meters to the exclusion of petitioners who
have been occupying portions of the disputed land constituted
acts of deprivation of the latter's rights which is tantamount to bad faith. Indeed
this Court has ruled that the —
". . . [c]oncealment and misrepresentation in the application that no other
persons had any claim or interest in the said land, constitute specific
allegations of extrinsic fraud supported by competent proof. Failure and
intentional omission of the applicants to disclose the fact of actual
physical possession by another person constitutes an allegation ofactual
fraud. 63 Likewise, it is fraud to knowingly omit or conceal a fact, upon
which benefit is obtained to the prejudice of a third person." 64
Suffice it to state in this regard that to allow private respondent/applicant to
benefit from his own wrong would run counter to the maxim ex dolo malo non
oritur actio — noman can be allowed to found a claim upon his own
wrongdoing. 65
It need not be overemphasized that extraordinary acquisitive prescription can not
similarly vest ownership over the property upon private respondent/applicant
because Article 1137 of the Civil Code states in no uncertain terms that —
"ARTICLE 1137.Ownership and other real rights over immovables also
prescribe through uninterrupted adverse possession thereof for thirty
years, without need of good faith."
prcd

Needless to state, private respondent/applicant's possession of thirteen (13)


years falls way below the thirty-year requirement mandated by Article 1137.
Sixth, petitioners/oppositors have, in stark contrast to the secondary
proof of private respondent, adduced overwhelming evidence to prove their
ownership of the portions they claim in the subject land. The evidence on record
clearly points to the fact that private respondent/applicant's right, if at all, is
confined to only 620 square meters or what has been left of the 840 square
meters he purchased from Faustino Martirez after 220 square meters thereof
were appropriated by the Municipality of Banga for the Public Market Road. 66
The records further bear out that the original owner of the whole area was one
Dionisia Regado who executed three (3) deeds of sale covering certain
portions of the disputed lands, namely: 1.] the Deed of Sale dated April 29, 1914
covering 1,850 square meters executed in favor of the
Municipality of Banga; 67 2.] the Deed of Sale dated July 10, 1915 covering 1,320
square meters executed in favor of Eulalio Raz; 68 and, 3.] the Deed of Sale
dated September 6, 1918 covering the balance with an area of 2,938 square
meters in favor of Eufrocino Alba. 69
Faustino Martirez acquired only an 840 square meter portion of the land by
purchase from Eulalio Raz on January 15, 1933 as confirmed in paragraph
2 of the Escritura De Venta Absoluta executed by him on August 13,
1941. 70 After selling 840 square meters to Faustino Martirez, Eulalio Raz
retained 480 square meters but on November 5, 1956 Eulalio Raz and his wife
Octabela Alba conveyed 240 square meters to Susana Braulio 71 leaving a
balance of 240 square meters which remained undisposed. cdasia
On May 29, 1969, Virginia Alba, Inocentes Alba and Estrella Alba, children of the
deceased Eufrocino Alba, sold a 676 square meter portion of the 2,938 square
meter lot purchased by their father from Dionisia Regado to petitioner/oppositor
Octabela Alba Vda. De Raz. 72 This Deed was duly registered with
the Registry of Deeds of Aklan in accordance with Act No. 3344 on June 17,
1969. 73 The land is covered by Tax Declaration No. 332 in the
name of Octabela Alba Vda. De Raz's husband. 74
Petitioner/oppositor Octabela Alba Vda. De Raz's ownership of the remaining
240 square meter portion which she and her husband Eulalio Raz bought from
Dionisia Regado 75and the 676 square meter portion which they bought from the
heirs of Eufrocino Alba 76 is fully substantiated by documentary
proof. 77 Rodolfo Alba, Lourdes Alba and BeatrizAlba's ownership of a portion
measuring 1,335 square meters 78 and another portion measuring 2,262 square
meters 79 is likewise backed by documentary evidence. Susana Braulio's
ownership of a 240 square meter portion 80 which she acquired from
Octabela Alba Vda. De Raz on November 11, 1956 81 is also documented, her
predecessor-in-interest having acquired the same from Dionisia Regado on
September 6, 1918. 82
The foregoing only serves to underscore the paucity of the proof of private
respondent/applicant to support his claim of ownership over the entire 4,845
square meter area. He has not adduced evidence to show how and when he was
able to acquire, with the exception of 840 square meters further reduced to 620
square meters on account of 220 square meters appropriated for the market
road, the bigger area of 3,755 square meters from anybody let alone the
ancestral owner, Dionisia Regado.
His claim is anchored mainly on Revised Tax Declaration No. 14181 which he
was able to procure from the Municipal Assessor of Banga in 1956 on the
basis of a self-serving affidavit which proffered the lame excuse that there was
error in the statement of the area of the land which he claimed to be 4,845
square meters instead of 620 square meters — which was the area reflected in
earlier tax declarations namely, 1954 Tax Declaration No. 13578; 1953 Tax
Declaration No. 13043; and 1947 Tax Declaration No. 6528.
Be that as it may, the Court has reservations on the propriety of adjudicating to
petitioners the contested portions of the subject land, in view of their failure to
present the technical descriptions of these areas. Furthermore, there
is no sufficient evidence showing that petitioners have been in open, adverse,
exclusive, peaceful and continuous possession thereof in the concept of owner,
considering that the testimony of Octabela Alba vda. De Raz was stricken off the
record.cdasia
WHEREFORE, based on foregoing premises, the Decision of the Regional
Trial Court of Kalibo, Aklan, Branch 1 dated August 18, 1992 in Land Registration
Case No. K-101, LRC Record No. K-15104 is hereby MODIFIED as follows:
1.]The 620 square meter portion on which private respondent Jose N. Lachica's
house is situated, clearly delineating its metes and bounds, is hereby ORDERED
segregated from the parcel of land described in Psu-161277 situated in
the Poblacion of the Municipality of Banga, Province of Aklan, Philippines with an
area of 4,484 square meters, to be registered and confirmed in the
name of private respondent;
2.]A ten (10) meter road width along the National road mentioned in the
application be segregated for future road widening programs upon the
payment of just compensation to be annotated at the back of the title.
3.]Insofar as the ownership of the remainder of the subject land is concerned, the
case is hereby REMANDED to the court of origin for the reception of further
evidence for the petitioners to establish the other requisites for the
confirmation of title and registration in their names of the areas they respectively
claim.dctai

SO ORDERED.
(Vda. de Raz v. Court of Appeals, G.R. No. 120066, [September 9, 1999], 372
|||

PHIL 710-742)
[G.R. No. 130906. February 11, 1999.]

REPUBLIC OF THE PHILIPPINES represented by the


DIRECTOR, LANDS MANAGEMENT BUREAU, petitioner, vs.
FELIX S. IMPERIAL JR., FELIZA S. IMPERIAL, ELIAS
S. IMPERIAL, MIRIAM S. IMPERIAL, LOLITA ALCAZAR,
SALVADOR ALCAZAR, EANCRA CORPORATION, and the
REGISTER OF DEEDS of LEGASPI CITY,respondents.

The Solicitor General for petitioner.


Jose A. Verches and Romeo B. Gonzaga for respondents.

SYNOPSIS

On September 12, 1917, the late Elias Imperial was issued Original Certificate of
Title (OCT) 408 (500) pursuant to Decree No. 55173 of then Court of First
Instance of Albay. OCTNo. 55173 was subdivided and further subdivided
resulting in the issuance of several titles, which are now the subjects of herein
petition in the name of private respondents. Petitioner Republic of the Philippines
filed a case with the trial court to judicially declare the Transfer Certificates of
Title (TCT) issued to herein private respondents null and void on the ground that
the subject land is foreshore land. Within the time for pleading, private
respondents EANCRA Corporation, Lolita Alcazar and Salvador Alcazar filed
their answer with cross-claim, while the rest, namely, Felix S. Imperial, Feliza
S. Imperial, Elias S. Imperial and Miriam S. Imperial filed a motion to dismiss.
They contended that the adjudication by the cadastral court is binding against the
whole world including the Republic since the cadastral proceedings are in
rem and the government itself through the Director of Lands instituted the
proceedings and was a direct and active participant therein. Petitioner, through
the Office of the Solicitor General, filed an objection to the motion to dismiss.
After hearing the motion to dismiss, the trial court dismissed the complaint on the
ground that the judgment rendered by the cadastral court in G.R. Cad. Rec.No.
88 and the Court's resolution in the petition to quiet title, G.R. 85770, both
decreed that the parcel of land covered by OCT No. 408 (500) was not foreshore.
Petitioner appealed to the Court of Appeals. The appellate court denied
petitioner's motion for reconsideration for lack of merit and for failure to file the
appellant's brief within the extended period granted to petitioner. Hence, the
present petition. Petitioner Republic assailed the dismissal of its appeal on purely
technical grounds. Petitioner also alleged that it has raised meritorious grounds
which, if not allowed to be laid down before the proper Court, will result to the
prejudice of, and irreparable injury to, public interest, as the Government would
lose its opportunity to recover what it believes to be non-registerable lands of the
public domain. aDHCEA

The Supreme Court granted the petition. The Court ruled that the question of
what constitutes good and sufficient cause that will merit suspension of the rules
is discretionary upon the court. It has the power to relax or suspend the rules or
to except a case from their operation when compelling reasons so warrants or
when the purpose of justice requires it. In the case at bar, the need to determine
once and for all whether the lands subject of petitioner's reversion efforts are
foreshore lands constitutes good and sufficient cause for relaxing the procedural
rules and granting the third and fourth motions for extensions to file appellant's
brief. Petitioner Republic's appeal presented an exceptional circumstance
impressed with public interest which in the Court's discretion must be given due
course.

SYLLABUS

1. REMEDIAL LAW; CIVIL PROCEDURE; APPEALS; THE NEED TO


DETERMINE ONCE AND FOR ALL WHETHER THE LANDS SUBJECT OF
PETITIONER'S REVERSION EFFORTS ARE FORESHORE LANDS
CONSTITUTE GOOD AND SUFFICIENT CAUSE FOR RELAXING
PROCEDURAL RULES AND GRANTING THE THIRD AND FOURTH MOTIONS
FOR EXTENSION TO FILE APPELLANT'S BRIEF; CASE AT BAR; AN
EXCEPTIONAL CIRCUMSTANCE IMPRESSED WITH PUBLIC INTEREST. —
The rules of court governing practice and procedure were formulated in order to
promote just, speedy, and inexpensive disposition of every action or proceeding
without sacrificing substantial justice and equity considerations. The filing of
appellant's brief in appeals is not a jurisdictional requirement. Nevertheless, an
appeal may be dismissed by the Court of Appeals on its own motion or on that of
the appellee upon failure of the appellant to serve and file the required number of
copies of the brief within the time provided. If the appeal brief cannot be filed on
time, extension of time may be allowed provided (1) there is good and sufficient
cause, and (2) the motion for extension is filed before the expiration of the time
sought to be extended. The court's liberality on extensions notwithstanding,
lawyers should never presume that their motions for extension would be granted
as a matter of course or for the length of time sought; their concession lies in the
sound discretion of the Court exercised in accordance with the attendant
circumstances. What constitutes good and sufficient cause that will merit
suspension of the rules is discretionary upon the court. The court has the power
to relax or suspend the rules or to except a case from their operation when
compelling reasons so warrant or when the purpose of justice requires it. Among
the reasons which the court allowed in suspending application of the rules on
filing an appeal brief were the following: (1) the cause for the delay was not
entirely attributable to the fault or negligence of the party favored by the
suspension of the rules; (2) there was no objection from the State, and the brief
was filed within the period requested; (3) no material injury was suffered by the
appellee by reason of the delay in filing the brief; (4) the fake lawyer failed to file
the brief; (5) appellant was represented by counsel de oficio; (6) petitioner's
original counsel died; and (7) the preparation of the consolidated brief involved a
comparative study of many exhibits. At the core of the controversy is whether the
parcels of land in question are foreshore lands. Foreshore land is a part of the
alienable land of the public domain and may be disposed of only by lease and
not otherwise. It was defined as "that part (of the land) which is between high and
low water and left dry by the flux and reflux of the tides." It is also known as "a
strip of land that lies between the high and low water marks and is alternatively
wet and dry according to the flow of the tide." The classification of public lands is
a function of the executive branch of government, specifically the director of
lands (now the director of the Lands Management Bureau). The decision of the
director of lands when approved by the Secretary of the Department of
Environment and Natural Resources (DENR) as to questions of fact is conclusive
upon the court. The principle behind this ruling is that the subject has been
exhaustively weighed and discussed and must therefore be given credit. This
doctrine finds no application, however, when the decision of the director of lands
is revoked by, or in conflict with that of, the DENR Secretary. There is allegedly a
conflict between the findings of the Director of Lands and the DENR, Region V, in
the present case. Respondents contend that the Director of Lands found Jose
Baritua's land covered by TCT No. 18655, which stemmed from OCT 408 (500),
to be "definitely outside of the foreshore area." Petitioner, on the other hand,
claims that subsequent investigation of the DENR, Region V, Legazpi City,
disclosed that the land covered by OCT No. 408 (500) from whence the titles
were derived "has the features of a foreshore land." The contradictory views of
the Director of Lands and the DENR, Region V, Legazpi City, on the true nature
of the land, which contradiction was neither discussed nor resolved by the RTC,
cannot be the premise of any conclusive classification of the land involved. The
need, therefore, to determine once and for all whether the lands subject of
petitioner's reversion efforts are foreshore lands constitutes good and sufficient
cause for relaxing procedural rules and granting the third and fourth motions for
extension to file appellant's brief. Petitioner's appeal presents an exceptional
circumstance impressed with public interest and must then be given due
course. acCTIS

DECISION

DAVIDE, JR., C.J : p


In this petition for review on certiorari, petitioner seeks to reverse and set aside
the (1) Resolution 1 of 30 July 1997 of the Court of Appeals in CA-G.R. CV No. 53972 granting
petitioner until 11 August 1997 within which to file its appellant's brief, and the (2) Resolution 2 of 29
of Branch I,
September 1997 dismissing petitioner's appeal. The appeal was taken from the Order 3
Regional Trial Court of Legaspi City in Civil CaseNo. 9176, which petitioner
instituted to cancel the title to some lots issued to private respondents for the
reversion thereof to the mass of the public domain.
The facts of the case, as found by the trial court, are as follows:
On September 12, 1917, the late Elias Imperial was issued Original
Certificate of Title (OCT) 408 (500) pursuant to Decree No. 55173 of the
then Court of First Instance of Albay, covering a parcel of land identified
as Lot No. 1113 of the Cadastral Survey of Legazpi, G.L. Cad. Rec. No.
88, containing an area of fifty eight thousand and twenty six square
meters (58,026), more or less, situated in Legazpi City.
Original Certificate of Title No. 408 (500) was subdivided and further
subdivided resulting in the issuance of several titles, which are now the
subject of this case, in the name of the following defendants:
TCT NO. LOT NO. AREA (sq.m.) REGISTERED OWNER
1. 978 1113-M-3 5,853 Elias S. Imperial

2. 31054 1113-M-4-A 1,200 Felix S. Imperial


3. 31055 1113-M-4-B 4,653 Felix S. Imperial

4. 35508 1113-M-2-A 1,335 EANCRA CORPORATION

5. 35509 1113-M-2-B 4,518 Feliza S. Imperial

6. 35213 1113-M-1-A 1,500 Lolita Alcazar and


Salvador Alcazar

7. 35214 1113-M-1-B 4,353 Miriam S. Imperial


The plaintiff seeks to judicially declare the transfer certificate of titles
described in the preceding paragraphs null and void; to order the said
defendants to surrender the owner's duplicate of their aforesaid titles to
the Register of Deeds of Legazpi City and directing [sic] the latter to
cancel them as well as the originals thereof and to declare the reversion
of the lots covered by the aforesaid titles to the mass of the public
domain.
In support of its stand, the plaintiff contends among others that on letter
request addressed to the Honorable Solicitor General dated March 20,
1994, residents of Purok No. 1and Bgy. 24, Legazpi City, represented by
Antonio F. Aguilar, requested that Original Certificate of Title No. 408
(500) in the name of Elias Imperial be cancelled and the land covered
thereby reverted back to the State on the ground that the land subject
thereof is a foreshore land. Subsequent investigation conducted by the
Department of Environment and Natural Resources (DENR), Region V,
Legazpi City, upon the request of the Office of the
Solicitor General (OSG) disclosed that OCT No. 408 (500), from whence
the transfer certificate of titles of the defendants were derived is null and
void, and was, thus, acquired to the prejudice of the State, considering
that:
a. the parcel of land covered by OCT No. 408 (500) has the
features of a foreshore land;
b. natural ground plants such as mangroves and nipas thrive on
certain portions of the land in question;
c. some portions of the same land are permanently submerged in
seawater even at low tide;
d. some portions of the same land are not anymore inundated by
seawater due to the considerable amount of improvements
built thereon and the placing of boulders and other land-
filling materials by the actual residents therein.
The plaintiff alleged that consequently on the basis of said findings, the
Director, Lands Management Bureau recommended to the Director,
Lands Services, DENR, the cancellation of OCT No. 406 [sic] (500) as
well as its derivative titles through appropriate proceedings.
The plaintiff contended that since the land in question is a foreshore
land, the same cannot be registered under the Land Registration
Act (Act No. 496, now P.D. No. 1529) in the name of private persons
since it is non-alienable and belongs to the public domain, administered
and managed by the State for the benefit of the general public.
The plaintiff further contended that under Public Land Act No. 141, as
amended, such land shall be disposed of to private parties by lease only
and not otherwise as soon as the President upon recommendation of the
Secretary of Agriculture and Natural Resources, now DENR, shall
declare that the same are not necessary for public services and are
open to disposition.
Within the time for pleading, defendants EANCRA Corporation, Lolita
Alcazar and Salvador Alcazar filed their answer with cross-claim, while
the rest of the defendants, namely, Felix S. Imperial, Jr., Feliza
S. Imperial, Elias S. Imperial and Miriam S. Imperial filed a motion to
dismiss.
The aforesaid motion to dismiss was anchored on the following grounds:
(a) the lands covered by the defendants' transfer certificate of titles
which were derived from OCT No. 408 (500) was already the subject of
the cadastral proceedings in 1917 and which has been implemented by
the issuance of OCT No. 408 (500) under the Torrens system.
The adjudication by the cadastral court is binding against the whole
world including the plaintiff since cadastral proceedings are in rem and
the government itself through the Director of Lands instituted the
proceedings and is a direct and active participant. OCT No. 408 (500)
issued under the Torrens system has long become incontrovertible after
the lapse of one year from the entry of decree of registration; (b)
OCT No. 408 (500) was judicially reconstituted in 1953 in accordance
with Republic Act [No.] 26 in the then Court of First Instance of Albay, by
Jose R. Imperial Samson in Court Case No. RT-305, entitled, The
Director of Lands vs. Jose R. Imperial Samson. The proceedings in the
judicial reconstitution in said case No. RT-305 is one in rem and has
long become final and gave rise to res judicata and therefore
can no longer legally be assailed; (c) the findings of the Director of
Lands dated February 22, 1983 [sic] from which no appeal was taken in
said administrative investigation that Lot No. 1113, Cad. 27 and a portion
of it covered by LotNo. 1113-M-5 in the name of Jose Baritua cannot be
considered as part of the shore or foreshore of Albay Gulf. This finding of
the Director of Lands has become final and thus constitute res judicata,
and finally moving defendants contended that several interrelated cases
have been decided related to OCT No. 408 (500), specifically Civil
Cases Nos. 6556, 6885, 6999 and 7104, all of the Regional Trial Court,
Legazpi City which have been brought by several squatters [sic] family
against Jose Baritua attacking the latter's title over Lot No. 1113-M-5
which was derived from OCT No. 408 (500) which cases were all
decided in favor of Jose Baritua, hence, the decisions rendered therein
have become final and executory and constitute res judicata.
The plaintiff through the Office of the Solicitor General filed an objection
to the motion to dismiss based on the following grounds: (1) the
purported decision issued by the Court of First Instance of Albay in G.R.
Cad. Rec. No. 88 supposedly resulting in the issuance of OCT No. 408
(500) pursuant to Decree No. 55173 does not constitute res judicata to
the present case; (2) the incontestable and indisputable character of a
Torrens certificate of title does not apply when the land thus covered,
like foreshore land, is not capable of registration; (3) a certificate of title
judicially reconstituted from a void certificate of title is, likewise, void; (4)
administrative investigation conducted by the Director of Lands is not a
bar to the filing of reversion suits; and (5) the filing of the motion to
dismiss carries with it the admission of the truth of all material facts of
the complaint. 4
After hearing the motion to dismiss, or on 9 August 1996, the trial court
dismissed the complaint on the ground that the judgment rendered by the
cadastral court in G.R. Cad. Rec. No. 88 and our resolution in the petition to quiet
title, G.R. No. 85770, both decreed that the parcel of land covered by OCT No.
408 (500) was not foreshore. The 1917 cadastral proceeding was binding upon
the government, which had initiated the same and had been an active and direct
participant thereon. Likewise, the 1982 petition to cancel OCT No. 408 (500) filed
by the claimants of Lot No. 1113, Cad-47, and resolved by the Director of Lands
in his 22 February 1984 letter 5 to the effect that "Original Certificate of Title No.
408 (500) 2113 in the name of Elias Imperial and its derivative title[s] were legally
issued" was res judicata to the instant case. Petitioner's contention that the
judicially reconstituted certificate of title was void since the land covered by
OCT No. 408 (500) was foreshore land was a mere assumption contrary to
existing physical facts. The court further considered as forum shopping
petitioner's attempt to seek a favorable opinion after it was declared in related
cases questioning the title of a certain Jose Baritua, which was also derived from
OCT No. 408(500), that the land in question was foreshore.
On 28 October 1996, petitioner filed a notice of appeal.
On 18 April 1997, the Court of Appeals required petitioner to file its appellant's
brief within forty-five (45) days from receipt of the notice. Petitioner received said
notice ten (10) days later, or on 28 April 1997.
Due to the alleged heavy workload of the solicitor assigned to the case, petitioner
moved for an extension of thirty (30) days from 12 June 1997, or until 12 July
1997, within which to file the appellant's brief. The Court of Appeals granted
petitioner's motion for extension in a resolution dated 26 June 1997.
On the same ground of continuing heavy pressure of work, petitioner filed, on 12
July 1997, its second motion for extension of thirty (30) days or until 11 August
1997 within which to file the appellant's brief.
On 11 August 1997, petitioner asked for a third extension of thirty (30) days, or
until 10 September 1997, within which to file appellant's brief citing the same
ground of heavy pressure of work.
Meanwhile, on 30 July 1997, the Court of Appeals issued a resolution, the full
text of which reads:
The Office of the Solicitor General is GRANTED a LAST EXTENSION of
thirty (30) days from July 12, 1997, or until August 11, 1997, within which
to file the oppositor-appellant's brief. Failure to file said brief within the
said period will mean dismissal of the appeal. 6
On 12 August 1997, petitioner received a copy of the aforesaid resolution.
On 26 August 1997, petitioner moved to reconsider the 30 July 1997 resolution
and, despite the appellate court's warning, reiterated its third motion for extension
of another thirty (30) days to file the appellant's brief.
On 10 September 1997, petitioner filed a manifestation and motion requesting
another extension of five (5) days, or until 15 September 1997, within which to
file appellant's brief, reasoning that the brief, although finalized, was yet to be
signed by the Solicitor General.
On 15 September 1997, petitioner filed the required appellant's brief.
On 29 September 1997, the Court of Appeals denied petitioner's motion for
reconsideration for lack of merit and sustained its Resolution of 30 July 1997
dismissing the case for failure to file the appellant's brief within the extended
period.
Hence, petitioner filed this petition assailing the dismissal of its appeal on purely
technical grounds. It alleges that it "has raised meritorious grounds in support of
its appeal which, if not allowed to be laid down before the proper Court, will result
to the prejudice of, and irreparable injury to, public interest, as the Government
would lose its opportunity to recover what it believes to be non-registrable lands
of the public domain." Minor lapses in adherence to procedural rules should be
condoned in order not to frustrate the ends of justice. Thus, petitioner begs the
court's indulgence, enumerating the cases that had occupied its time and
attention which prevented the filing of the required brief within the extended
periods granted by the Court of Appeals.

Petitioner maintains that our resolution of 8 May 1989 in G.R. No. 85770 entitled
"Spouses Espiritu v. Baritua" does not constitute res judicata to the instant case
because there isno identity of parties, causes of action, and subject matter
between the two cases. The Supreme Court case was instituted by Spouses
Jose and Maura Espiritu and others against Jose Baritua, while the instant case
was filed by no less than the Republic of the Philippines against herein
respondents. The former arose from a proceeding to quiet title, while the latter is
an action for reversion.
Anent the "unappealed letter-decision" of the Director of Lands, petitioner
contends that the same was a "reversible mistake" which did not bar the filing of
a reversion suit, as the government is never estopped by the mistakes of its
officials or agents.
Petitioner also argues that the 1953 reconstitution case only involved the
restoration of the title which was supposed to have been lost or destroyed. The
issue as to the nature of the land covered by OCT No. 408 (500) was never
delved into by the court. Petitioner insists that the parcels of land in question are
foreshore lands, and hence, inalienable and incapable of registration.
Consequently, the certificates of title covering said lands are void ab initio.
As regards the trial court's finding of forum shopping, petitioner asserts that the
same is without basis. It is the first time that petitioner instituted an action against
herein respondents concerning the lands in question.
On the other hand, respondents maintain that the dismissal of the appeal for
failure to file brief on time was not an abuse of discretion on the part of the Court
of Appeals. Petitioner failed to present special circumstances or good reasons to
justify its motions for extension. Moreover, that the parcels of land involved are
foreshore was confirmed in the 1917 cadastral and 1953 reconstitution
proceedings. This finding attained finality through our resolution in the action for
quieting of title (G.R. No. 85770), and was further affirmed through the
administrative investigation conducted by the Director of Lands. Thus, the instant
case is now barred by res judicata.
We have long observed that the Office of the Solicitor General (OSG) regularly
presents motions for extension of time to file pleadings, taking for granted the
court's leniency in granting the same. Instead of contributing to the swift
administration of justice as an instrumentality of the State, the OSG contributes
to needless delays in litigation. Despite the numerous cases that need the OSG's
time and attention, equal importance should be allotted to each and every case.
Deadlines must be respected and court warnings not taken lightly.
However, after a thorough reexamination of this case, we are of the view that the
challenged resolutions should be reconsidered.
The rules of court governing practice and procedure were formulated in order to
promote just, speedy, and inexpensive disposition of every action or proceeding
without sacrificing substantial justice and equity considerations. 7
The filing of appellant's brief in appeals is not a jurisdictional
requirement. Nevertheless, an appeal may be dismissed by the Court of Appeals
on its own motion or on that of the appellee upon failure of the appellant to serve
and file the required number of copies of the brief within the time provided. 8
If the appeal brief cannot be filed on time, extension of time may be allowed
provided (1) there is good and sufficient cause, and (2) the motion for extension
is filed before the expiration of the time sought to be extended. 9 The court's
liberality on extensions notwithstanding, lawyers should never presume that their
motions for extension would be granted as a matter of course or for the length of
time sought; their concession lies in the sound discretion of the Court exercised
in accordance with the attendant circumstances. 10
What constitutes good and sufficient cause that will merit suspension of the rules
is discretionary upon the court. The court has the power to relax or suspend the
rules or to except a case from their operation when compelling reasons so
warrant or when the purpose of justice requires it. 11 Among the reasons which the court
allowed in suspending application of the rules on filing an appeal brief were the following: (1) the cause for
the delay was not entirely attributable to the fault or negligence of the party favored by the suspension of the
rules; 12(2) there was no objection from the State, 13 and the brief was filed within
the period requested; (3) no material injury was suffered by the appellee by
reason of the delay in filing the brief; 14 (4) the fake lawyer failed to file the
brief; 15 (5) appellant was represented by counsel de oficio; 16 (6) petitioner's
original counsel died; 17 and (7) the preparation of the consolidated brief involved
a comparative study of many exhibits. 18
At the core of the controversy is whether the parcels of land in question are
foreshore lands. Foreshore land is a part of the alienable land of the public
domain and may be disposed of only by lease and not otherwise. It was defined
as "that part (of the land) which is between high and low water and left dry by the
flux and reflux of the tides." 19 It is also known as "a strip of land that lies between
the high and low water marks and is alternatively wet and dry according to the
flow of the tide." 20
The classification of public lands is a function of the executive branch of
government, specifically the director of lands (now the director of the Lands
Management Bureau). The decision of the director of lands when approved by
the Secretary of the Department of Environment and Natural Resources
(DENR) 21 as to questions of fact is conclusive upon the court. The principle
behind this ruling is that the subject has been exhaustively weighed and
discussed and must therefore be given credit. This doctrine finds no application,
however, when the decision of the director of lands is revoked by, or in conflict
with that of, the DENR Secretary. 22
There is allegedly a conflict between the findings of the Director of Lands and the
DENR, Region V, in the present case. Respondents contend that the Director of
Lands found Jose Baritua's land covered by TCT No. 18655, which stemmed
from OCT 408(500), to be "definitely outside of the foreshore area." 23 Petitioner,
on the other hand, claims that subsequent investigation of the DENR, Region V,
Legazpi City, disclosed that the land covered by OCT No. 408 (500) from whence
the titles were derived "has the features of a foreshore land." 24 The contradictory
views of the Director of Lands and the DENR, Region V, Legazpi City, on the true
nature of the land, which contradiction was neither discussed nor resolved by the
RTC, cannot be the premise of any conclusive classification of the land involved.
The need, therefore, to determine once and for all whether the lands subject of
petitioner's reversion efforts are foreshore lands constitutes good and sufficient
cause for relaxing procedural rules and granting the third and fourth motions for
extension to file appellant's brief. Petitioner's appeal presents an exceptional
circumstance impressed with public interest and must then be given due course.
WHEREFORE, the instant petition is hereby GRANTED; the Resolutions of 30
July 1997 and 29 September 1997 of the Court of Appeals are SET ASIDE;
petitioner's appeal is reinstated; and the instant case is REMANDED to the Court
of Appeals for further proceedings.
ORDERED.
Melo, Kapunan and Pardo, JJ., concur.
(Republic v. Imperial, Jr., G.R. No. 130906, [February 11, 1999], 362 PHIL 466-
|||

479)
[G.R. No. 83609. October 26, 1989.]

DIRECTOR OF LANDS, petitioner, vs. COURT OF APPEALS,


IBARRA BISNAR and AMELIA BISNAR, respondents.

Ibarra L. Bisnar for himself and for and in behalf of co-private respondent
Amelia Bisnar.

SYLLABUS

1. LAND REGISTRATION: ALIENABLE OR DISPOSABLE PUBLIC LANDS;


CLASSIFICATION OR RECLASSIFICATION THEREOF AS
PREROGATIVE OF THE EXECUTIVE DEPARTMENT. — In the
case of Bureau of Forestry vs. Court of Appeals, 153 SCRA 351, we ruled: "As
provided for under Section 6 of Commonwealth Act 141, which was lifted from
Act 2874, the classification or reclassification of public lands into alienable or
disposable, mineral or forest lands is now a prerogative of the Executive
Department of the government and not the courts. With these rules, there should
be no more room for doubt that it is not the court which determines the
classification of lands of the public domain into agricultural, forest or mineral but
the Executive Branch of the government, through the Office of the President.
2. ID.; POSITIVE ACT OF THE GOVERNMENT NEEDED TO DECLASSIFY
LAND INTO ALIENABLE LAND FOR AGRICULTURAL OR OTHER
PURPOSES. — It bears emphasizing that a positive act of the government is
needed to declassify land which is classified as forest and to convert it into
alienable or disposable land for agricultural or other purposes (Republic vs.
Animas, 56 SCRA 499). 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 (Amunategui vs. Director of Forestry, 126 SCRA
69; Director of Lands vs. Court ofAppeals, 129 SCRA
689; Director of Lands vs. Court of Appeals, 133 SCRA 701;
Republic vs. Court of Appeals, 148 SCRA 480; Vallarta vs. Intermediate
Appellate Court, 151 SCRA 679).
3. ID.; POSSESSION HOWEVER LONG OF FOREST LANDS CANNOT RIPEN
INTO PRIVATE OWNERSHIP. — Possession of forest lands, however long,
cannot ripen into private ownership (Vano vs. Government, 41 Phil. 161 [1920];
Adorable vs. Director of Forestry, 107 Phil. 401 [1960]).
4. ID.; FOREST LAND; BEYOND JURISDICTION OF THE
CADASTRAL COURT TO REGISTER UNDER THE TORRENS SYSTEM. — A
parcel of forest land is within the exclusive jurisdiction of the Bureau of Forestry
and beyond the power and jurisdiction of the cadastral court to register under the
Torrens System (Republic vs. Court of Appeals, 89 SCRA 648; Republic vs.
Vera, 120 SCRA 210 [1983]; Director of Lands vs. Court of Appeals, 129 SCRA
689 [1984]).
5. ID.; SECTION 48 (b) OF C.A. NO. 141; APPLICABLE EXCLUSIVELY TO
PUBLIC AGRICULTURAL LAND. — Section 48 (b) of Commonwealth Act No.
141, as amended, applies exclusively to public agricultural land. Forest lands or
areas covered with forests are excluded.
6. ID.; ID.; APPLICANT TASKED WITH THE BURDEN OF PROOF THAT HE
MEETS THE LEGAL REQUIREMENTS. — "In confirmation of imperfect title
cases, the applicant shoulders the burden of proving that he meets the
requirements of Section 48, Commonwealth Act No. 141, as amended
by Republic Act 1942. He must overcome the presumption that the land he is
applying for is part of the public domain but that he has an interest therein
sufficient to warrant registration in his name because of an imperfect title such as
those derived from old Spanish grants or that he has had continuous, open and
notorious possession and occupation of agricultural lands of the public domain
under a bona fide claim of acquisition of ownership for at least thirty (30) years
preceding the filing of his application."
(Heirs of Amunategui vs. Director of Forestry, 126 SCRA 69.)

DECISION

GRIÑO-AQUINO, J : p

Petitioner Director of Lands, through the Solicitor General, seeks a review of the
decision dated May 27, 1988, of the Court of Appeals in CA-G.R. CV No. 66426,
entitled "IbarraBisnar, et al. vs. Director of Lands," affirming in toto the
decision of the Court of First Instance of Capiz, granting the private respondents'
application for confirmation and registration of their title to two (2) parcels of land
in LRC Cad. Rec. 1256. cdll

In their joint application for registration of title to two (2) parcels of land filed on
July 20, 1976, the applicants Ibarra and Amelia Bisnar claimed to be the owners
in fee simple ofLots 866 and 870 of the Pilar Cadastre Plan AP-06-000869,
respectively containing an area of 28 hectares (284,424 sq.m.) and 34 hectares
(345,385 sq.m.) situated in barrio Gen. Hizon, Municipality of President Roxas,
Province of Capiz (p. 14, Rollo). The applicants alleged that they inherited those
parcels of land (p. 41, Rollo) and they had been paying the taxes thereon (p. 40,
Rollo).
On December 16, 1976, the Director of Lands and the Director of the
Bureau of Forest Development, opposed the application on the grounds that:
"1. Neither the applicants nor their predecessors-in-interest possess
sufficient title to acquire ownership in fee simple of the land or lots
applied for, the same not having been acquired by any of the various
types of title issued by the Spanish Government, such as, (1) 'titulo real'
or royal grant, (2) the 'concession especial' or special grant, (3) the
'composicion con el estado titulo' or adjustment title, (4) the 'titulo de
compra' or title by purchase, and (5) the 'informacion possessoria' or
possessory information under the Royal Decree of 13 February 1894, or
any other recognized mode of acquisition of title over realty under
pertinent applicable laws.
"2. Neither the applicants nor their predecessors-in-interest have been in
open, continuous, exclusive and notorious possession and
occupation of the land in question for at least thirty (30) years
immediately preceding the filing of the application.
"3. The properties in question are a portion of the public domain
belonging to the Republic of the Philippines, not subject to private
appropriation, (pp 17-19, Record on Appeal)." (pp. 14-15, Rollo.)
On February 24, 1977, the applicants filed an amended application, which was
approved on March 14, 1977, and included the following allegation:
"Should the Land Registration Act invoked be not applicable to the case,
they hereby apply for the benefits of Chapter 8, Commonwealth Act 141,
as amended, as they and their predecessors-in-interest have been in
possession of the land as owners for more than fifty (50) years." (p. 16,
Rollo.)
After hearing, the trial court ordered the registration of the title of the lots in the
names of the applicants, herein private respondents. It found that applicants and
their predecessors-in-interest have been in open, public, continuous, peaceful
and adverse possession of the subject parcels of land under bona
fide claims of ownership for more than eighty (80) years (not only 30) prior to the
filing of the application for registration, introduced improvements on the lands by
planting coconuts, bamboos and other plants, and converted a part of the land
into productive fishponds (p. 68, Rollo).
On appeal, the Appellate Court affirmed the trial court's decision. It held that the
classification of the lots as timberland by the Director of Forestry cannot prevail in
the absence of proof that the said lots are indeed more valuable as forest land
than as agricultural land, citing as authority the case of Ankron vs.
Government of the Philippine Islands (40 Phil. 10). In this petition, the
government alleges that:
1. the classification or reclassification of public lands into alienable or
disposable agricultural land, mineral land or forest land is a
prerogative of the Executive Department ofthe government and
not of the courts;
2. that possession of forest lands, no matter how long, cannot ripen into
private ownership; and
3. that an applicant for registration of title has the burden of proving that
he meets the requirements of Section 48 of Com. Act No. 141, as
amended. (p. 19, Rollo.)
The principal issue in this appeal is whether the lots in question may be
registered under Section 48 (b) of CA 141, as amended.
The petition is impressed with merit.
In the case of Bureau of Forestry vs. Court of Appeals, 153 SCRA 351, we ruled:
"As provided for under Section 6 of Commonwealth Act 141, which was
lifted from Act 2874, the classification or
reclassification of public lands into alienable or disposable, mineral or
forest lands is now a prerogative of the Executive Department of the
government and not the courts. With these rules, there should
be no more room for doubt that it is not the court which determines the
classification of lands of the public domain into agricultural, forest or
mineral but the Executive Branch of the government, through the
Office of the President. Hence, it was grave error and/or
abuse of discretion for respondent court to ignore the uncontroverted
facts that (1) the disputed area is within a timberland block, and (2) as
certified to by the then Director of Forestry, the area is needed for forest
purposes." (pp. 21-22, Rollo.)
It bears emphasizing that a positive act of the government is needed to
declassify land which is classified as forest and to convert it into alienable or
disposable land for agricultural or other purposes (Republic vs. Animas, 56
SCRA 499). 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 (Amunategui vs. Director of Forestry, 126 SCRA
69;Director of Lands vs. Court of Appeals, 129 SCRA
689; Director of Lands vs. Court of Appeals, 133 SCRA 701;
Republic vs. Court of Appeals, 148 SCRA 480; Vallarta vs. Intermediate
Appellate Court, 151 SCRA 679).
Thus, possession of forest lands, however long, cannot ripen into private
ownership (Vano vs. Government, 41 Phil. 161 [1920];
Adorable vs. Director of Forestry, 107 Phil. 401 [1960]). A parcel of forest land is
within the exclusive jurisdiction of the Bureau of Forestry and beyond the power
and jurisdiction of the cadastral court to register under the Torrens System
(Republic vs. Court of Appeals, 89 SCRA 648; Republic vs. Vera, 120 SCRA 210
[1983]; Director of Lands vs. Court of Appeals, 129 SCRA 689 [1984]). Cdpr

Section 48 (b) of Commonwealth Act No. 141, as amended, applies exclusively


to public agricultural land. Forest lands or areas covered with forests are
excluded (p. 26, Rollo). We reiterate our ruling in Amunategiu that:
"In confirmation of imperfect title cases, the applicant shoulders the
burden of proving that he meets the requirements of Section
48, Commonwealth Act No. 141, as amended by Republic Act 1942. He
must overcome the presumption that the land he is applying for is
part of the public domain but that he has an interest therein sufficient to
warrant registration in his name because of an imperfect title such as
those derived from old Spanish grants or that he has had continuous,
open and notorious possession and
occupation of agricultural lands of the public domain under a bona fide
claim of acquisition of ownership for at least thirty (30) years preceding
the filing of his application." (Heirsof Amunategui vs. Director of Forestry,
126 SCRA 69.)
WHEREFORE, the appealed decision is reversed and set aside. The application
for registration in LRC Cad. Rec. 1256 of the former Court of First Instance, is
hereby dismissed without costs.
SO ORDERED.
Narvasa, Cruz, Gancayco and Medialdea, JJ ., concur.

(Director of Lands v. Court of Appeals, G.R. No. 83609, [October 26, 1989],
|||

258-A PHIL 492-497)


ISABELO MONTANO Y MARCIAL, petitioner-appellee, vs.
THE INSULAR GOVERNMENT, ET AL., respondents.—
THE INSULAR GOVERNMENT, appellant.

Attorney-General Araneta, for appellant.


F. Buencamino, for appellee.

SYLLABUS

1. PUBLIC LANDS. — In Acts of the Congress of the United States the


term "public lands" is uniformly used to describe so much of the national
domain under the legislative power of the Congress as has not been
subjected to private right or devoted to public use.
2. TIDEWATER LANDS. — Lands under the ebb and flow of the tide
being reserved for public uses of navigation and fishery and subject to
Congressional regulation, pursuant to its power over commerce, are not
understood as included in the term "public lands" when used in general laws
authorizing private appropriation thereof as homesteads or otherwise.
3. SWAMPS AND MARSHES. — Swamps and marshes not available
for the purpose of navigation or public uses may be subjected to private
appropriation although covered by the tides.
4, "MANGLARES." — Of this character are the manglar or mangrove
swamps of the Philippine Islands in which grow aquatic trees cultivated and in
common use for domestic or commercial purposes. Such manglares when
converted by man into fisheries and used as such for the statutory period are
the subject of private ownership under the Act of Congress of July 1, 1902,
and Act No, 926 of the Philippine Commission.
The status of such lands at the time of the change of sovereignty was
not authoritatively determined under the Spanish law and they are open to the
benefit of these statutes.
This is so even if the words "public lands" used in the Act of Congress
be not given their otherwise uniform meaning but be interpreted as referring to
such lands as defined in the Spanish law theretofore prevailing in the
Philippine Islands.
The case of Mapa vs. The Insular Government (10 Phil, Rep., 176),
considered and commented upon and the Spanish Law of Waters of 1868 and
Congressional legislation on the same subject reviewed.
DECISION

TRACEY, J : p

Isabelo Montano presented a petition to the Court of Land Registration


for the inscription of a piece of land in the barrio of Libis, municipality of
Caloocan, used as a fishery, having a superficial area of 10,805 square
meters, and bounded as set out in the petition; its value according to the last
assessment being $505.05, United States currency.
This petition was opposed by the Solicitor-General in behalf of the
Director of Lands, and by the entity known as Obras Pias de la Sagrada Mitra,
the former on the ground that the land in question belonged to
the Government of the United States, and the latter, that it was the absolute
owner of all the dry land along the eastern boundary of the said fishery.
The Court of Land Registration in its decision of December 1, 1906,
dismissed the said oppositions without costs, and decreed, after
a general entry by default, the adjudication and registration of the property
described in the petition, in favor of Isabelo Montano y Marcial.
From this decision only counsel for the Director of Public Lands
appealed to this court. It is a kindred case to Cirilo Mapa vs.
The Insular Government, decided by this court on February 19,1908, reported
in 10 Phil. Rep., 175.
As some discussion has arisen as to the scope of that decision, it
appears opportune to reaffirm the principle there laid down. The issue was,
whether lands used as a fishery, for the growth of nipa, and as salt deposits,
inland some distance from the sea, and asserted, though not clearly proved to
be overflowed at high tide, could be registered as private property on the
strength of ten years' occupation, under paragraph 6 of section 54 of Act No.
926 of the Philippine Commission. The point decided was that such land
within the meaning of the Act of Congress of July 1, 1902, was agricultural?
the reasoning leading up to that conclusion being that Congress having
divided all the public lands of the Islands into three classes it must be included
in one of the three, and being clearly neither forest nor mineral, it must of
necessity fall into the division of agricultural land. In the concurring opinion, in
order to avoid misapprehension on the part of those not familiar with United
States land legislation and a misunderstanding of the reach of the doctrine, it
was pointed out that under the decisions of the Supreme Court of the United
States the phrase "public lands" is held to be equivalent to "public domain,"
and does not by any means include all lands of Government ownership, but
only so much of said lands as are thrown open to. private appropriation and
settlement by homestead and other like general laws. Accordingly,
"government land" and "public land" are not synonymous terms; the first
includes-not only the second, but also other lands of the Government already
reserved or devoted to public use or subject to private right. In other words,
the Government owns real estate which is part of the "public lands" and other
real estate which is not a part thereof.
This meaning attached to the phrase "public lands" by Congress in its
land legislation is settled by usage and adjudication beyond a doubt, and
without variation. It is therefore doing the utmost violence to all rules of
construction to contend that in this law, dealing with the same subject-matter
in connection with these Islands, a different meaning had, without indication or
motive, been imported into the words. They can not have one meaning in
every other statute and a different and conflicting meaning in this statute.
Where property in general is referred to therein, other and apt phrases are
used in order to include it; for instance, section 12 provides "that all
the property and, rights which may have been acquired in the Philippine
Islands by the United States . . . are hereby placed under the control of
the Government of the said Islands." Therefore, there is much real property
belonging to the Government which is not affected by statutes for the
settlement, prescription or sale of public lands. Examples in point are
properties occupied by public buildings or devoted to municipal or other
governmental uses.
Among the authorities cited in the Mapa case are two, Shively vs.
Bowlby (152 U. S., 1), and Mann vs. Tacoma Land Co. ( 153 U. S., 273), in
which it was held that generalpublic land laws did not apply to land over
which. the tide ebbs and flows. Mr. Justice Gray, in Shively vs. Bowlby, which
is in itself an epitome of the American Law of Waters, speaking of tide lands,
said:
"But Congress has never undertaken by general laws to dispose
of such lands. . . .
"The Congress of the United States, in disposing of the public
lands, has constantly acted upon the theory that those lands, whether in
the interior, or on the coast, above high-water mark, may be taken up by
actual occupants, in order to encourage the settlement of the country,
but that the navigable waters and the soils under them, whether within or
above the ebb and flow of the tide, shall be and remain public highways;
and, being chiefly valuable for the public purposes of commerce,
navigation, and fishery, and for the improvements necessary to secure
and promote those purposes, shall not be granted away during the
period of territorial government." (Pp. 48 and 49.)
The conclusions of the court are in part stated as follows:
"Lands under tide waters are incapable of cultivation or
improvement in the manner of lands above high-water mark. They are of
great value to the public for the purposes of commerce, navigation, and
fishery. Their improvement by individuals, when permitted, is incidental
or subordinate to the public use and right. Therefore the title and the
control of them are vested in the sovereign for the benefit of the whole
people . . ..
"Upon the acquisition of a territory by the United States, whether
by cession from one of the States, or by treaty with a foreign country, or
by discovery and settlement, the same title and dominion passed to the
United States, for the benefit of the whole people, and in trust for the
several States to be ultimately created out of the territory . . .
"The United States, while they hold the country as a territory,
having all the powers both of national and municipal government, may
grant, for appropriate purposes, titles or rights in the soil below high-
water mark of tide waters. But they have never done so
by general laws." (Pp. 57 and 58.)
In Mann vs. Tacoma Land Co., it was said by Mr. Justice Brewer (p.
284):
"It is settled that the general legislation of Congress in respect to
public lands does not extend to tide lands . . .. It provided that the scrip
might be located on the unoccupied and unappropriated public lands, but
the term 'public lands' does not include tide lands. As said in Newhall vs.
Sanger (92 U. S., 761, 763. ) 'The words "public lands" are habitually
used in our legislation to describe such as are subject to sale or other
disposal under general laws.' "
In Illinois Central R. R. Company vs. Illinois (146 U. S., 387) Mr. Justice
Field, delivering the opinion of the court, said:
"That the State holds the title to the lands under the navigable
waters of Lake Michigan within its limits, in the same manner that the
State hold title to soils under tide water, by the common law, we have
already shown, and that title necessarily carries with it control over the
waters above them whenever the lands are subjected to use. But it is a
title different in character from that which the State holds in lands
intended for sale. It is different from the title which the United States hold
in the public lands which are open to preemption and sale. It is a title
held in trust for the people of the State that they may enjoy the
navigation of the waters, carry on commerce over them, and have liberty
of fishing therein freed from the obstruction or interference of private
parties. The interest of the people in the navigation of the waters and in
commerce over them may be improved in many instances by the
erection of wharves, docks, and piers therein, for which purpose the
State may grant parcels of the submerged lands; and, so long as their
disposition is made for such purposes, no valid objections can be made
to the grants . . .. The control of the State for the purposes of the trust
can never be lost, except as to such parcels as are used in promoting
the interests of the public therein, or can be disposed of without any
substantial impairment of the public interest in the lands and waters
remaining . . .. The State can no more abdicate its trust over property in
which the whole people are interested, like navigable waters and soils
under them, so as to leave them entirely under the use and control of
private parties, except in the instance of parcels mentioned for the
improvement of the navigation and use of the waters, or when parcels
can be disposed of without impairment of the public interest in what
remains, than it can abdicate its police powers in the administration
of government and the preservation of the peace . . .. So with trusts
connected with public property, or property of a special character, like
lands under navigable waters, they can not be placed entirely beyond
the direction and control of the State.

"The ownership of the navigable waters of the harbor and of the


lands under them is a subject of public concern to the whole people of
the State. The trust with which they are held, therefore, is governmental
and can not be alienated, except in those instances mentioned of
parcels used in the improvement of the interest thus held, or when
parcels can be disposed of without detriment to the public interest in the
lands and waters remaining. . . . ."( Pp. 452-455.)
Mr. Justice Field quotes from an opinion by Mr. Justice Bradley,
delivered in a case in the Circuit Court, speaking of lands under water, as
follows (p. 457):
"Being subject to this trust, they were publici juris; in other words,
they were held for the use of the people at large. It is true that to utilize
the fisheries, especially those of shellfish, it was necessary to parcel
them out to particular operators, and employ the rent or consideration for
the benefit of the whole people; but this did not alter the character of the
title. The land remained subject to all other public uses as before,
especially to those of navigation and commerce, which are always
paramount to those of public fisheries. It is also true that portions of the
submerged shoals and flats, which really interfered with navigation, and
could better subserve the purposes of commerce by being filled up and
reclaimed, were disposed of to individuals for that purpose. But neither
did these dispositions of useless parts affect the character of the title to
the remainder."
These citations are thus given at length in order to make clear, first, that
lands under the ebb and flow of the tide of navigable waters are not in
America understood to be included in the phrase "public lands" in Acts of
Congress of the United States; nor, perforce, can they be so understood in
laws of the Philippine Commission drawn immediately under the sanction of
those Acts; and, second, that such lands are not under existing Congressional
legislation the subject of private ownership, any occupation thereof being
subordinate to the public purposes of navigation and fishery. While as well in
the original thirteen States in which there was never a national public domain
to which the land laws of Congress could apply as in States more recently
created out of that domain and which upon their formation became masters of
their own land policy, the local laws govern riparian and littoral rights, subject
only to Congressional control in matters of foreign and interstate commerce
(U. S. vs. Mission Rock Co., 189 U. S., 391), yet, as to the unappropriated
public lands constituting the public domain the sole power of legislation is
vested in Congress, which has uniformly and consistently declined to assume
the function of authorizing or regulating private appropriation of such rights.
Therefore, in the absence of specific Congressional legislation, it is impossible
for individuals to acquire title under the ten years' provision of Act No. 926 or
even through a definite grant from the local legislature of land beneath
navigable waters in which the tide ebbs and flows, except for wharfage or
other purposes auxiliary to navigation or other public uses, unless in
conformity with the preexisting local law of the Archipelago.
The matter is dwelt upon for the reason that the late Attorney-
General in his very able brief calls attention to the effect apprehended from
the extension of the words "agricultural lands" as used in Act No. 926 to
include all public lands not forest or mineral in character, specifying two Acts
of the Philippine Commission, the validity of which he fears might thereby be
called into question. The first of these, Act No. 1039, dedicates to the use of
the Navy Department of the United States Government certain ground and
buildings in Cavite, while the other, Act No. 1654, is a fore-shore law
regulating the control and disposal of filled Government lands. If the term
"agricultural lands" be held to include all government property not forest or
mineral in character, he suggests that these Acts, not being in conformity with
the procedure of Act No. 926, as approved by Congress, would be invalid,
and moreover, that the Philippine Government would be seriously tied up in
the management and disposition of other lands owned by it.
Without finally passing on this question in relation to lands the owners
of which are not before us as parties to this action, it is appropriate, in
answering the argument of the law officer of the State, to point out that this
consequence appears to be avoided by the restricted sense given to the
words "public land" or "public domain" in the Act of Congress and in Act No.
926, as hereinbefore noted. Neither the property affected by Act No. 1039,
already in use by the Navy Department of the United States, nor the fore-
shore land mentioned in Act No. 1654, which is under the ebb and flow of the
tide, was, in so far as appears in the Acts before us, part of the public domain
to be disposed of under sections 13, 14, 15, and 16 of the Act of Congress of
July 1, 1902, and for that reason it is not included in any of the three
subdivisions of "public lands" as agricultural or otherwise, although it was part
of the property acquired in the Philippine Islands by the United States by the
treaty of peace with Spain, which by section 12 of that Act was "placed under
the control of the Government of said Islands, to be administered for the
benefit of the inhabitants thereof." It would seem that the validity of the Cavite
Act can not be successfully assailed on this ground, while it may well be that
The Fore-shore Act on examination will be found to fall, as to
its general purpose, within the authorization of section 11 of the Act of
Congress, whereby the duty is imposed upon the Island Government of
improving the harbors and navigable waters in the interest of commerce.
As a consequence, it follows that The Public Land Act did not apply to
the fisheries in the Mapa case, if they are to be regarded as constituting, in
a general sense, land under tidal waters. It becomes necessary, therefore, to
refer to the character of the lands.
Although argued at different times, five of these cases have been
presented substantially together, all being covered by one brief of the late
Attorney-General in behalf of the Government in which, with many interesting
historical and graphic citations he describes that part of the marginal seashore
of the Philippine Islands known asmanglares, with their characteristic
vegetation. In brief, it may be said that they are mud flats, alternately washed
and exposed by the tide, in which grow various kindred plants which will not
live except when watered by the sea, extending their roots deep into the mud
and casting their seeds, which also germinate there. These constitute the
mangrove flats of the tropics, which exist naturally, but which are also, to
some extent, cultivated by man for the sake of the combustible wood of the
mangrove and like trees as well as for the useful nipa palm propagated
thereon. Although these flats are literally tidal lands, yet we are of the opinion
that they can not be so regarded in the sense in which that term is used in the
cases cited or in general American jurisprudence. The waters flowing over
them are not available for purpose of navigation, and they "may be disposed
of without impairment of the public interest in what remains." Mr. Justice
Bradley, in the passage quoted by Mr. Justice Field, makes an exception of
submerged shoals and flats. In Railroad Company vs. Schurmeir (74 U. S.,
272), a Government patent of public land bordering upon a river was held to
include a parcel submerged at very high water and separated from the
mainland by a slough in which the water ran when ordinarily high. In
Mobile vs. Hallett (41 U. S., 260), at page 266, Mr. Justice Catron remarked in
his dissenting opinion:
". . . and that a mud flat, flowed by tide water is the subject of
grant by the Government to an individual, I think can not well be doubted
by anyone acquainted with the southern country; when such valuable
portions of it are mud flats, in the constant course of reclamation."
In several of the older States along the Atlantic coast such flats, either
by force of ordinance, custom, judicial construction, or local laws are held to
pass under private grants as appurtenant to the uplands. (Winslow vs. Patten,
34 Maine, 25; Litchfield vs. Scituate, 135 Mass., 39; People vs. New York and
Staten Island Ferry Co., 68 N. Y., 71; Stevens vs. P. & N. Railroad, 5 Vroom,
34 N. J. Law, 532.) There is even stronger reason for excepting mud flats
from the rule of tide lands in these Islands, owing to the peculiarities of their
configuration and to the nature of the tropical growth thereon, and whatever
may be the action of the tide, we do not think that in the Philippines such of
the shoals covered by this vegetation, whether spontaneously or by
cultivation, as are not available for free navigation, or required for any other
purpose of general benefit, can be considered tidal land reserved for public
use alone, under the governmental trust for commerce and public fishery, but,
on the contrary, we regard them as public property, susceptible of a sort of
cultivation and of improvement, and as such, subject to occupation under
paragraph 6 of section 54 of the Land Law. Instances may hereafter arise of
fisheries unduly established in what are clearly navigable waters which would
constitute a nuisance, and not be the subject of prescription or of grant. A
brief reference to the five cases under consideration in this court, however,
will serve to show that they all fairly fall within the benefits of the law. In the
Mapa case 1 the property was far from the sea, partly occupied as a fish pond, as nipa land, and as a
salt pit. It does not appear whether it was connected with the sea by nature or by art, or whether the tide
ebbed or flowed upon it, or whether the salt was sufficient to impart to any portion of it a mineral
there was a fishery about two thousand yards from
character. In the Santiago case 2
the sea, with which it communicated by a river, and a portion of the inclosure
was dedicated to growing the aquatic tree called bacawan. The fishery had
been constructed by man, upon land heretofore sown with this tree. In the
Gutierrez case 1 it was shown that the land was partly highland, growing fruit
trees, and partly low land, converted by the occupant of the upland into a
fishery by his labor. In the Baello case, 2 the river running to the sea was a
hundred meters away, the salt water therefrom reaching the lowland by
means of an artificial canal cut by the owner of the land when he gave up
cultivating bacawan thereon, and made it into a fishery. In the Montano case,
although there was a considerable depth of water over the soil, yet before the
fishery was made, some thirty years before the trial, bacawan had been sown
and propagated in the mud by the owner who finally sold the entire cut when
he built the dikes.

All these lots, in their original state, whether near the sea or at a
distance from it inland, and whether bare or washed by the tides, were not
covered by waters practically navigable and were filled, whether naturally or
artificially, with vegetation sometimes cultivated and in common use for fuel
and for building purposes, and they were all adapted to fisheries or fish
hatcheries by the labor of man introducing or regulating the access of salt
water thereto. It is obvious that all five cases are of the samegeneral nature
and that one rule must be applied to them all.
In this discussion of the meaning which the Congress of the United
States attached to the phrase "public lands" in the Philippine Bill, we have
assumed that it was used in the same sense as in other laws enacted by that
body. If, however, it can be considered as employed with reference to the
peculiar conditions of the territory to which it was to be applied and to the local
law or usage prevailing therein, the result would not be different. In many of
its general features the Spanish law of public lands in the Philippines
resembled the American. Government property was of two kinds — first, that
of public use or service, said to be of public ownership, and second, that
having a private character or use. (Civil Code, arts. 339 and 340. ) Lands of
the first class, while they retain their public character are inalienable; those of
the second are not.
By the royal decree of February 13, 1894, it was enacted that all "the
land, soil, ground not under cultivation, and forests in the Philippine Islands
should be considered saleable crown lands," which were not included in four
exceptions stated, among which were "those which belonged to forest zones
which the State desires to hold for the Commonwealth." This corresponds in
the main to the American classification into Government property, public
lands, and forest reserve. Mineral lands are elsewhere defined. It is to be
noted, however, that in the two languages terms ordinarily equivalent are not
in this relation employed in the same sense and that lands de dominio
publico signify quite a different thing from the arbitrary English phrases "public
lands" or "public domain."
The Law of Waters of 1866, which was the latest Spanish Law of
Waters extended to these Islands, provides that private property can not be
acquired in lands preserving the character of public ownership ( title 1, art. 1,
par. 29), and among the lands declared of public ownership and use by
article 1 of chapter 1 of title 5 of the same law are:
"The seashore.—By shore is understood the land alternately
covered and uncovered by the sea in its tidal movement. Its interior, or
land limit, is the point reached by the highest and equinoctial tides. At
those places not affected by tides, the land limit is the highest point
reached by sea water in ordinary storms or hurricanes." (Par. 3.)
So that under this legislation the same question also presented itself as
to what constituted seashore, which was of public use and trust and therefore
not alienable. This question can not be said to have been settled by official
ruling at the time of the American occupation. From the official records it
appears that there were then pending for registration a great number of
possessory expedientes, twenty-two of which, made before April 17, 1895,
were from the Province of Pampanga alone, in which the land was described
as manglares. Under the royal decree of 1894 such manglares appear at the
outset to have been registered and considered alienable and numbers of
them were conceded by adjustment, including considerable tracts in the town
of Sexmoan and Lubao in Pampanga. Claims having been made that on
account of the trees growing thereon they formed part of the forest reserve
and also because, being covered and uncovered by the tide, they were part of
the shore, and in either case were inalienable, the engineer in chief of the
forestry district of the center of Luzon addressed, on January 7, 1893, a
communication to the inspector general de montes (Forestry Department) in
which he expressed an opinion that as part of the shore they were not subject
to private ownership and asked for an early decision of the question. On
November 26, 1893, the acting inspector-general notified the chief of the
district of the Visayas in Mindanao that his excellency, the governor-general,
had that day ordered all action suspended on expedientes of manglar and
nipa lands and salt marshes until the questions involved in regard thereto
should be determined. In this condition the matter remained until the
expiration of the Spanish sovereignty.
By article 14 of the Law of Waters the right of shore fishery was
declared public, but by article 23 authority might be granted individuals to
establish shore hatcheries for fish and shellfish, and by article 15 salt-water
ponds on private ground not communicating with the sea by water navigable
by boats were recognized as private property, while chapter 10 permitted and
regulated the draining of swamps and marshes, both of private and of public
ownership.
Under this uncertain and somewhat unsatisfactory condition of the law
the custom had grown up of converting manglares and nipa lands into
fisheries which became a common feature of settlements along the coast and
at the time of the change of sovereignty constituted one of the most
productive industries of the Islands, the abrogation of which would destroy
vested interests and prove a public disaster. In our opinion it was the object of
Congress not to work such a result but, on the contrary, in furtherance of the
purposes of the treaty of Paris, to recognize and safeguard such property.
Therefore the judgment of the Court of Land Registration is affirmed, without
cost.
Torres, Mapa and Carson, JJ., concur.
(Montano y Marcial v. Insular Government, G.R. No. 3714, [January 26, 1909],
|||

12 PHIL 572-593)