was paid) until FLOREZA removes the house and delivers the lot to them; and 3) to declare the

transaction between them and FLOREZA as

G.R. No. L-25462 February 21, 1980 one of mortgage and not of pacto de retro.

MARIANO FLOREZA, petitioner, In his Answer, FLOREZA admitted the repurchase but controverted by stating that he would execute a deed of repurchase and leave the
premises upon payment to him of the reasonable value of the house worth P7,000.00.
vs.
In a Decision dated July 17, 1957, the Court of First Instance of Rizal opined that the question of whether the transaction between the
MARIA D. de EVANGELISTA and SERGIO EVANGELISTA, respondents. parties is one of mortgage or pacto de retro is no longer material as the indebtedness of P1,000.00 of the EVANGELISTAS to FLOREZA had
already been fully paid. And, applying Article 448 of the Civil Code, 10 it rendered a decision dispositively decreeing:
R.D. Hipolito & B. P. Fabir for petitioner.
FOR ALL THE FOREGOING CONSIDERATIONS, the Court hereby renders judgment granting the plaintiffs the right to elect, as owners of the
E.G. Tanjuatco & Associates for respondents. land, to purchase the house built, on the said lot in question by the defendant for P2,500 or to sell their said land to e defendant for
P1,500. In the event that the plaintiffs shall decide not to purchase the house in question the defendant should be allowed to remain in
plaintiffs' premises by, paying a monthly rental of P10.00 which is the reasonable value for the use of the same per month as alleged by
plaintiffs in their complaint. The Court also orders the defendant to pay a monthly rental of P10.00 for the use of the land in question
from May 18, 1956, the date of the commencement of this action. The counterclaim of the defendant is hereby ordered dismissed.
MELENCIO-HERRERA, J: Without pronouncement as to costs.

This is a Petition for Review on certiorari of the Decision of the Court of Appeals (CA-G.R. No. 23516-R) promulgated on November 4, SO ORDERED. 11
1965, entitled "Maria de Evangelista and Sergio Evangelists, (now the respondents) vs. Mariano Floreza (petitioner herein)," reversing the
judgment of the Court of First Instance of Rizal rendered on July 17, 1957, and instead ordering petitioner to vacate respondents'
Both parties appealed to the Court of Appeals.
residential lot, to remove his house at his own expenses and to pay rental from May 5, 1956.
On November 4, 1965, the Court of Appeals concluded that Article 448 of the Civil Code, supra, was inapplicable; that FLOREZA was not
Plaintiffs Maria de Evangelista and Sergio Evangelista, who are mother and son, (the EVANGELISTAS, for short) are the owners of a
entitled to reimbursement for his house but that he could remove the same at his expense; and accordingly rendered judgment thus:
residential lot located at Sumilang St., Tanay, Rizal, with an area of 204.08 sq. ms., assessed at P410.00. In May 1945, the EVANGELISTAS
borrowed from FLOREZA the amount of P100.00. On or about November 1945, with the consent of the EVANGELISTAS, FLOREZA occupied
the above residential lot and built thereon a house of light materials (barong- barong) without any agreement as to payment for the use WHEREFORE, judgment is hereby rendered: (1) adjudging the defendant-appellant Mariano Floreza to vacate plaintiffs' residential lot
of said residential lot owing to the fact that the EVANGELISTAS has then a standing loan of P100.00 in favor of FLOREZA. 1 described in the complaint and to pay rental of P10.00 a month from May 5, 1956, until he (defendant) shall have vacated the premises;
(2) ordering defendant to remove his house from the land in question within 30 days from the time this decision becomes final and
executory; (3) ordering the Register of Deeds of Rizal to cancel inscription No. 2147, Page 210, Vol. 36, in the Registration Book under Act
On the following dates, the EVANGELISTAS again borrowed the indicated amounts: September 16, 1946 — P100.00; 2 August 17, 1947 —
3344 upon payment of his lawful fees; and (4) taxing the costs in both instances against defendant-appellant Mariano Floreza. 12
P200,00; 3 January 30, 1949 — P200.00; 4 April 1, 1949 — P140.00, 5 or a total of P740.00 including the first loan. The last three items are
evidenced by private documents stating that the residential lot stands as security therefor and that the amounts covered thereunder are
payable within six years from date, without mention of interest. The document executed on September 16, 1946 stated specifically that Hence, this Petition for Review on certiorari by FLOREZA, seeking a reversal of the aforestated judgment and ascribing the following
the loan was without interest "walang anumang patubo." errors:

On January 10, 1949, FLOREZA demolished this house of light materials and in its place constructed one of strong materials assessed in his 1) That the Court of Appeals erred in holding that petitioner Floreza was a builder in bad faith without likewise holding that
name at P1,410.00 under Tax Declaration No. 4448. FLOREZA paid no rental as before. 6 respondents as owners of the land in dispute, were likewise in bad faith and therefore both parties should in accordance with Art. 453 of
the New Civil Code be considered as having acted in good faith.
On August 1, 1949, the EVANGELISTAS, for and in consideration of P1,000.00 representing the total outstanding loan of P740.00 plus
P260.00 in cash, sold their residential lot to FLOREZA, with a right to repurchase within a period of 6 years from date, or up to August 1, 2) That the Court of Appeals erred in completely ignoring the issue raised on appeal as to whether or not respondents as owners
1955, as evidenced by a notarial document, Exh. B, registered under Act 3344 on December 6, 1949, as Inscription No. 2147. 7 of the questioned lot, were in bad faith in the sense that they had knowledge of and acquiseced to the construction of the house of
petitioner on their lot.
On January 2, 1955, or seven months before the expiry of the repurchase period, the EVANGELISTAS paid in full the repurchase price of
P1,000.00. 3) That the Court of Appeals erred in not applying Art. 448 of the New Civil Code in the adjudication of the rights of petitioner and
respondent.
On April 25, 1956, the EVANGELISTAS, through their counsel, wrote FLOREZA a letter 8 asking him to vacate the premises as they wanted
to make use of their residential lot besides the fact that FLOREZA had already been given by them more than one year within which to 4) That the Court of Appeals erred in declaring that petitioner is not entitled to reimbursement for the value of his house and that
move his house to another site. On May 4, 1956, the EVANGELISTAS made a formal written demand to vacate, within five days from he should instead remove the same at his expense.
notice, explaining that they had already fully paid the consideration for the repurchase of the lot. 9 FLOREZA refused to vacate unless he
was first reimbursed the value of his house. Hence, the filing of this Complaint on May 18, 1956 by the EVANGELISTAS. 5) That the Court of Appeals erred in adjudging petitioner to vacate respondents' lot in question and to pay rentals commencing
from May 5, 1956, until he shall have vacated the premises, notwithstanding that petitioner is entitled under Arts. 448 and 546 of the
The EVANGELISTAS prayed that: 1) they be declared the owners of the house of strong materials built by FLOREZA on their residential lot, New Civil Code, to retention without payment of rental while the corresponding indemnity of his house had not been paid.
without payment of indemnity; or, in the alternative to order FLOREZA to remove said house; 2) that FLOREZA pay them the sum of
P10.00 per month as the reasonable value for the use and occupation of the same from January 2, 1955 (the date the repurchase price 6) That the Court of Appeals erred in taxing costs against petitioner.
7) That the Court of Appeals erred in not awarding petitioner's counterclaim. lot16 at the rate of P10.00 monthly from January 3, 1955, and not merely from the date of demand on May 4, 1956, as held by the Court of
Appeals, until the house was removed and the property vacated by petitioner or his heirs.
During the pendency of this appeal, petitioner Maria D. de Evangelista died and was ordered substituted by her son, petitioner Sergio, as
her legal representative, in a Resolution dated May 14, 1976. WHEREFORE, the judgment appealed from is hereby affirmed, with the modification that payment of rentals by the heir, of Mariano
Floreza, who are hereby ordered substituted for him, shall commence on January 3, 1955 until the date that the residential lot in question
On October 20, 1978. the EVANGELISTAS filed a Motion to Dismiss stating that FLOREZA had since died and that his heirs had voluntarily was vacated.
vacated the residential lot in question. The date FLOREZA passed away and the date his heirs had voluntarily vacated the property has not
been stated. Required to comment, "petitioner (represented by his heirs)", through counsel, confirmed his death and the removal of the Costs against petitioner.
house and manifested that thereby the question of reimbursement had moot and academic. He objected to the dismissal of the case,
however, on the ground that the issue of rentals still pends. On January 21, 1980, complying with a Resolution of 'his Court, the SO ORDERED.
EVANGELISTAS clarified that the dismissal they were praying for was not of the entire case but only of this Petition for Review on
Certiorari.

We are not in agreement that the question of reimbursement of the value of the improvement erected on the subject property has
become moot. Petitioner's right of retention of subject property until he is reimbursed for the value of his house, as he had demanded, is G.R. No. 98045 June 26, 1996
inextricably linked with the question of rentals. For if petitioner has the right to indemnity, he has the right of retention and no rentals
need be paid. Conversely, if no right of retention exists, damages in the form of rentals for the continued use and occupation of the DESAMPARADO VDA. DE NAZARENO and LETICIA NAZARENO TAPIA, petitioners,
property should be allowed.
vs.
We uphold the Court of Appeals in its conclusion that Article 448 of the Civil Code is inapplicable to the factual milieu herein. Said codal
provision applies only when the builder, planter, or sower believes he had the right so to build, plant or sow because he thinks he owns
THE COURT OF APPEALS, MR. & MRS. JOSE SALASALAN, MR. & MRS. LEO RABAYA, AVELINO LABIS, HON. ROBERTO G. HILARIO, ROLLEO
the land or believes himself to have a claim of title. 13 In this case, petitioner makes no pretensions of ownership whatsoever.
I. IGNACIO, ALBERTO M. GILLERA and HON. ABELARDO G. PALAD, JR., in their official and/or private capacities, respondents.
Petitioner concedes that he was a builder in bad faith but maintains that' the EVANGELISTAS should also be held in bad faith, so that both
of them being in bad faith, Article 453 of the Civil Code 14 should apply. By the same token, however, that Article 448 of the same Code is
not applicable, neither is Article 453 under the ambiance of this case.
ROMERO, J.:p
Would petitioner, as vendee a retro, then be entitled to the rights granted iii Article 1616 of the Civil Code (Art. 1518 of the old Code)? To
quote: Petitioners Desamparado Vda. de Nazareno and Leticia Nazareno Tapia challenge the decision of the Court of Appeals which affirmed the
dismissal of petitioners' complaint by the Regional Trial Court of Misamis Oriental, Branch 22. The complaint was for annulment of the
verification, report and recommendation, decision and order of the Bureau of Lands regarding a parcel of public land.
Art. 1616. The vendor cannot avail himself of the right of repurchase without returning to the vendee the price of the sale, and in
addition:
The only issue involved in this petition is whether or not petitioners exhausted administrative remedies before having recourse to the courts.
(1) The expenses of the contract, and any other legitimate payments made by reason of the sale;
The subject of this controversy is a parcel of land situated in Telegrapo, Puntod, Cagayan de Oro City. Said land was formed as a result of
sawdust dumped into the dried-up Balacanas Creek and along the banks of the Cagayan river.
(2) The necessary and useful expenses made on the thing sold.
Sometime in 1979, private respondents Jose Salasalan and Leo Rabaya leased the subject lots on which their houses stood from one Antonio
The question again calls for a negative answer. It should be noted that petitioner did not construct his house as a vendee a retro. The
Nazareno, petitioners' predecessor-in-interest. In the latter part of 1982, private respondents allegedly stopped paying rentals. As a result,
house had already been constructed as far back as 1949 (1945 for the house of light materials) even before the pacto de retro sale in
Antonio Nazareno and petitioners filed a case for ejectment with the Municipal Trial Court of Cagayan de Oro City, Branch 4. A decision was
1949. Petitioner incurred no useful expense, therefore, after that sale. The house was already there at the tolerance of the EVANGELISTAS
rendered against private respondents, which decision was affirmed by the Regional Trial Court of Misamis Oriental, Branch 20.
in consideration of the several loans extended to them. Since petitioner cannot be classified as a builder in good faith within the purview
of Article 448 of the Civil Code, nor as a vendee a retro, who made useful improvements during the lifetime of the pacto de retro,
petitioner has no right to reimbursement of the value of the house which he had erected on the residential lot of the EVANGELISTAS, The case was remanded to the municipal trial court for execution of judgment after the same became final and executory. Private
much less to retention of the premises until he is reimbursed.The rights of petitioner are more akin to those of a usufructuary who, under respondents filed a case for annulment of judgment before the Regional Trial Court of Misamis Oriental, Branch 24 which dismissed the
Article 579 of the Civil (Art. 487 of the old Code), may make on the property useful improvements but with no right to be indemnified same. Antonio Nazareno and petitioners again moved for execution of judgment but private respondents filed another case for certiorari
therefor. He may, however, remove such improvements should it be possible to do so without damage to the property: For if the with prayer for restraining order and/or writ of preliminary injunction with the Regional Trial Court of Misamis Oriental, Branch 25 which
improvements made by the usufructuary were subject to indemnity, we would have a dangerous and unjust situation in which the was likewise dismissed. The decision of the lower court was finally enforced with the private respondents being ejected from portions of
usufructuary could dispose of the owner's funds by compelling him to pay for improvements which perhaps he would not have made. 15 the subject lots they occupied..

We come now to the issue of rentals. It is clear that from the date that the redemption price had been paid by the EVANGELISTAS on Before he died, Antonio Nazareno caused the approval by the Bureau of Lands of the survey plan designated as Plan Csd-106-00571 with a
January 2, 1955, petitioner's right to the use of the residential lot without charge had ceased. Having retained the property although a view to perfecting his title over the accretion area being claimed by him. Before the approved survey plan could be released to the applicant,
redemption had been made, he should be held liable for damages in the form of rentals for the continued use of the subject residential however, it was protested by private respondents before the Bureau of Lands.
In compliance with the order of respondent District Land Officer Alberto M. Gillera, respondent Land Investigator Avelino G. Labis conducted
an investigation and rendered a report to the Regional Director recommending that Survey Plan No. MSI-10-06-000571-D (equivalent to Lot
No. 36302, Cad. 237) in the name of Antonio Nazareno, be cancelled and that private respondents be directed to file appropriate public
land applications.
Based on said report, respondent Regional Director of the Bureau of Lands Roberto Hilario rendered a decision ordering the amendment of
the survey plan in the name of Antonio Nazareno by segregating therefrom the areas occupied by the private respondents who, if qualified,
may file public land applications covering their respective portions.
Antonio Nazareno filed a motion for reconsideration with respondent Rolleo Ignacio, Undersecretary of the Department of Natural
Resources and Officer-in-Charge of the Bureau of Lands who denied the motion. Respondent Director of Lands Abelardo Palad then ordered
him to vacate the portions adjudicated to private respondents and remove whatever improvements they have introduced thereon. He also
ordered that private respondents be placed in possession thereof.
Upon the denial of the late Antonio Nazareno's motion for reconsideration, petitioners Desamparado Vda. de Nazareno and Leticia Tapia
Nazareno, filed a case before the RTC, Branch 22 for annulment of the following: order of investigation by respondent Gillera, report and
recommendation by respondent Labis, decision by respondent Hilario, order by respondent Ignacio affirming the decision of respondent
Hilario and order of execution by respondent Palad. The RTC dismissed the complaint for failure to exhaust administrative remedies which
resulted in the finality of the administrative decision of the Bureau of Lands.
On appeal, the Court of Appeals affirmed the decision of the RTC dismissing the complaint. Applying Section 4 of C.A. No. 141, as amended,
it contended that the approval of the survey plan belongs exclusively to the Director of Lands. Hence, factual findings made by the
Metropolitan Trial Court respecting the subject land cannot be held to be controlling as the preparation and approval of said survey plans
belong to the Director of Lands and the same shall be conclusive when approved by the Secretary of Agriculture and Natural resources. 1
Furthermore, the appellate court contended that the motion for reconsideration filed by Antonio Nazareno cannot be considered as an
appeal to the Office of the Secretary of Agriculture and Natural Resources, as mandated by C.A. No. 141 inasmuch as the same had been
acted upon by respondent Undersecretary Ignacio in his capacity as Officer-in-charge of the Bureau of Lands and not as Undersecretary
acting for the Secretary of Agriculture and Natural Resources. For the failure of Antonio Nazareno to appeal to the Secretary of Agriculture
and Natural Resources, the present case does not fall within the exception to the doctrine of exhaustion of administrative remedies. It also
held that there was no showing of oppressiveness in the manner in which the orders were issued and executed..
Hence, this petition.
Petitioners assign the following errors:
I. PUBLIC RESPONDENT COURT OF APPEALS IN A WHIMSICAL, ARBITRARY AND CAPRICIOUS MANNER AFFIRMED THE DECISION OF
THE LOWER COURT WHICH IS CONTRARY TO THE PREVAILING FACTS AND THE LAW ON THE MATTER;
II. PUBLIC RESPONDENT COURT OF APPEALS IN A WHIMSICAL, ARBITRARY AND CAPRICIOUS MANNER AFFIRMED THE DECISION OF
THE LOWER COURT DISMISSING THE ORIGINAL CASE WHICH FAILED TO CONSIDER THAT THE EXECUTION ORDER OF PUBLIC RESPONDENT
ABELARDO G. PALAD, JR., DIRECTOR OF LANDS, MANILA, PRACTICALLY CHANGED THE DECISION OF PUBLIC RESPONDENT ROBERTO HILARIO,
REGIONAL DIRECTOR, BUREAU OF LANDS, REGION 10, THUS MAKING THE CASE PROPER SUBJECT FOR ANNULMENT WELL WITHIN THE
JURISDICTION OF THE LOWER COURT.
The resolution of the above issues, however, hinges on the question of whether or not the subject land is public land. Petitioners claim that
the subject land is private land being an accretion to his titled property, applying Article 457 of the Civil Code which provides:
To the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the current of the
waters.
In the case of Meneses v. CA, 2 this Court held that accretion, as a mode of acquiring property under Art. 457 of the Civil Code, requires the
concurrence of these requisites : (1) that the deposition of soil or sediment be gradual and imperceptible; (2) that it be the result of the
action of the waters of the river (or sea); and (3) that the land where accretion takes place is adjacent to the banks of rivers (or the sea
coast). These are called the rules on alluvion which if present in a case, give to the owners of lands adjoining the banks of rivers or streams
any accretion gradually received from the effects of the current of waters.
For petitioners to insist on the application of these rules on alluvion to their case, the above-mentioned requisites must be present.
However, they admit that the accretion was formed by the dumping of boulders, soil and other filling materials on portions of the Balacanas
Creek and the Cagayan River bounding their land. 3 It cannot be claimed, therefore, that the accumulation of such boulders, soil and other
filling materials was gradual and imperceptible, resulting from the action of the waters or the current of the Balacanas Creek and the
Cagayan River. In Hilario v. City of Manila, 4 this Court held that the word "current" indicates the participation of the body of water in the
ebb and flow of waters due to high and low tide. Petitioners' submission not having met the first and second requirements of the rules on
alluvion, they cannot claim the rights of a riparian owner.
In any case, this court agrees with private respondents that petitioners are estopped from denying the public character of the subject land,
as well as the jurisdiction of the Bureau of Lands when the late Antonio Nazareno filed his Miscellaneous Sales Application MSA (G-6) 571.
5
The mere filing of said Application constituted an admission that the land being applied for was public land, having been the subject of
Survey Plan No. MSi-10-06-000571-D (Equivalent to Lot No. 36302, Cad-237) which was conducted as a consequence of Antonio Nazareno's
Miscellaneous Sales Application wherein said land was described as an orchard. Said description by Antonio Nazareno was, however,
controverted by respondent Labis in his investigation report to respondent Hilario based on the findings of his ocular inspection that said
land actually covers a dry portion of Balacanas Creek and a swampy portion of Cagayan River. The investigation report also states that,
except for the swampy portion which is fully planted to nipa palms, the whole area is fully occupied by a part of a big concrete bodega of
petitioners and several residential houses made of light materials, including those of private respondents which were erected by themselves
sometime in the early part of 1978. 6
Furthermore, the Bureau of Lands classified the subject land as an accretion area which was formed by deposits of sawdust in the Balacanas
Creek and the Cagayan river, in accordance with the ocular inspection conducted by the Bureau of Lands. 7 This Court has often enough held
that findings of administrative agencies which have acquired expertise because their jurisdiction is confined to specific matters are generally
accorded not only respect but even finality. 8 Again, when said factual findings are affirmed by the Court of Appeals, the same are conclusive
on the parties and not reviewable by this Court. 9
It is this Court's irresistible conclusion, therefore, that the accretion was man-made or artificial. In Republic v. CA, 10this Court ruled that the
requirement that the deposit should be due to the effect of the current of the river is indispensable. This excludes from Art. 457 of the Civil
Code all deposits caused by human intervention. Putting it differently, alluvion must be the exclusive work of nature. Thus, in Tiongco v.
Director of Lands, et al., 11 where the land was not formed solely by the natural effect of the water current of the river bordering said land
but is also the consequence of the direct and deliberate intervention of man, it was deemed a man-made accretion and, as such, part of the
public domain.
In the case at bar, the subject land was the direct result of the dumping of sawdust by the Sun Valley Lumber Co. consequent to its sawmill
operations. 12 Even if this Court were to take into consideration petitioners' submission that the accretion site was the result of the late
Antonio Nazareno's labor consisting in the dumping of boulders, soil and other filling materials into the Balacanas Creek and Cagayan River
bounding his land, 13 the same would still be part of the public domain.
Having determined that the subject land is public land, a fortiori, the Bureau of Lands, as well as the Office of the Secretary of Agriculture
and Natural Resources have jurisdiction over the same in accordance with the Public Land Law. Accordingly, the court a quo dismissed
petitioners' complaint for non-exhaustion of administrative remedies which ruling the Court of Appeals affirmed.
However, this Court agrees with petitioners that administrative remedies have been exhausted. Petitioners could not have intended to
appeal to respondent Ignacio as an Officer-In-Charge of the Bureau of Lands. The decision being appealed from was the decision of
respondent Hilario who was the Regional Director of the Bureau of Lands. Said decision was made "for and by authority of the Director of
Lands". 14 It would be incongruous to appeal the decision of the Regional Director of the Bureau of Lands acting for the Director of the
Bureau of Lands to an Officer-In-Charge of the Bureau of Lands.
In any case, respondent Rolleo Ignacio's official designation was "Undersecretary of the Department of Agriculture and Natural Resources."
He was only an "Officer-In-Charge" of the Bureau of Lands. When he acted on the late Antonio Nazareno's motion for reconsideration by
affirming or adopting respondent Hilario's decision, he was acting on said motion as an Undersecretary on behalf of the Secretary of the
Department. In the case of Hamoy v. Secretary of Agriculture and Natural Resources, 15 this Court held that the Undersecretary of Agriculture
and Natural Resources may modify, adopt, or set aside the orders or decisions of the Director of Lands with respect to questions involving
public lands under the administration and control of the Bureau of Lands and the Department of Agriculture and Natural Resources. He
cannot, therefore, be said to have acted beyond the bounds of his jurisdiction under Sections 3, 4 and 5 of Commonwealth Act No. 141 16
As borne out by the administrative findings, the controverted land is public land, being an artificial accretion of sawdust. As such, the
Director of Lands has jurisdiction, authority and control over the same, as mandated under Sections 3 and 4 of the Public Land Law (C.A.
No. 141) which states, thus:
Sec. 3. The Secretary of Agriculture and Natural Resources shall be the exclusive officer charged with carrying out the provisions of this
Act through the Director of Lands who shall act under his immediate control.
Sec. 4. Subject to said control, the Director of Lands shall have direct executive control of the survey, classification, lease, sale or any
other form of concession or disposition and management of the lands of the public domain, and his decisions as to questions of fact shall
be conclusive when approved by the Secretary of Agriculture and Natural Resources.
In connection with the second issue, petitioners ascribe whim, arbitrariness or capriciousness in the execution order of public respondent
Abelardo G. Palad, the Director of Lands. This Court finds otherwise since said decision was based on the conclusive finding that the subject
land was public land. Thus, this Court agrees with the Court of Appeals that the Director of Lands acted within his rights when he issued the
assailed execution order, as mandated by the aforecited provisions.
Petitioners' allegation that respondent Palad's execution order directing them to vacate the subject land practically changed respondent
Hilario's decision is baseless. It is incorrect for petitioners to assume that respondent Palad awarded portions of the subject land to private
respondents Salasalans and Rabayas as they had not yet been issued patents or titles over the subject land. The execution order merely
directed the segregation of petitioners' titled lot from the subject land which was actually being occupied by private respondents before
they were ejected from it. Based on the finding that private respondents were actually in possession or were actually occupying the subject
land instead of petitioners, respondent Palad, being the Director of Lands and in the exercise of his administrative discretion, directed
petitioners to vacate the subject land on the ground that private respondents have a preferential right, being the occupants thereof.
While private respondents may not have filed their application over the land occupied by them, they nevertheless filed their protest or
opposition to petitioners' Miscellaneous Sales Application, the same being preparatory to the filing of an application as they were in fact
directed to do so. In any case, respondent Palad's execution order merely implements respondent Hilario's order. It should be noted that
petitioners' own application still has to be given due course. 17
As Director of Lands, respondent Palad is authorized to exercise executive control over any form of concession, disposition and management
of the lands of the public domain. 18 He may issue decisions and orders as he may see fit under the circumstances as long as they are based
on the findings of fact.
In the case of Calibo v. Ballesteros, 19 this Court held that where, in the disposition of public lands, the Director of Lands bases his decision
on the evidence thus presented, he clearly acts within his jurisdiction, and if he errs in appraising the evidence, the error is one of judgment,
but not an act of grave abuse of discretion annullable by certiorari. Thus, except for the issue of non-exhaustion of administrative remedies,
this Court finds no reversible error nor grave abuse of discretion in the decision of the Court of Appeals.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
G.R. No. 132644 November 19, 1999
ERNESTO DAVID, RICARDO DAVID, NELIA DAVID, EMILIA DAVID, LOLITA DAVID, BASILIO LEMQUE, NICANOR LEMQUE, FELIX LEMQUE,
NORMA LEMQUE, WILFREDO LEMQUE, RODOLFO LEMQUE, ROGELIO LEMQUE, VICTORIA LEMQUE, ESTATE OF MARIA ESPIRITU and
ANDRES ADONA, MILAGROS DE UBAGO-UMALI, FELISA GUBALLA DE UBAGO, VANESSA DE UBAGO-UMALI, ANTONIO DE UBAGO, JR.,
JOSEPH GUBALLA DE UBAGO, MARIETTA DE UBAGO-TAN, and REGISTER OF DEEDS OF ZAMBALES, petitioners,
vs.
CRISTITO MALAY and NORA MALAY, DIONISIO MALAY, FRANCISCA T. CAPACILLO, PEPITO ALCANTARA, NICOLAS SORIANO and JUAN
MORA, respondents.
VITUG, J.:
The instant case is an appeal from a decision of the Court of Appeals reversing that of the Regional Trial Court on an action for reconveyance
of property. The issues submitted by the parties may not really be all that novel.
The spouses Andres Adona and Leoncia Abad, husband and wife for a good number of years, were blessed with five children among them
being Carmen Adona. Carmen married Filomeno Malay; three children were begotten by the marriage, namely, Cristito, Nora and Dionisio
(among the herein private respondents). Following the death of Leoncia Abad in 1923, Andres Adona cohabited with Maria Espiritu, herself
a widow, apparently without the benefit of marriage. Andres and Maria sired two children, Esperanza, represented herein by her heirs all
surnamed David, and Vicente Adona. Maria Espiritu likewise had a child by her previous marriage, Fulgencio Lemque, now herein
represented also by his own heirs.
During his lifetime, Andres Adona applied for a homestead patent over a parcel of agricultural land located at Dirita, Iba, Zambales,
containing an area of 22.5776 hectares. After Andres Adona had died, Maria Espiritu, predecessor-in-interest of herein petitioners,
succeeded in obtaining Original Certificate of Title No. 398 over the land in her name. After Maria Espiritu had died in 1945, the children, as
well as descendants, of Andres Adona by his marriage with Leoncia Abad, continued to be in peaceful and quiet possession of the subject
land.
Sometime in 1989 petitioners executed a deed of "Extrajudicial Settlement with Sale" over the subject property in favor of Mrs. Venancia
Ungson. Private respondents protested the sale claiming that they were the true owners of the land. Ultimately, in any event, the sale in
favor of Mrs. Ungson was rescinded in view of the latter's failure to pay in full the consideration agreed upon. Subsequently petitioners
executed another deed of Extrajudicial Settlement with Sale. In this new instrument, dated 15 December 1990, petitioners divided the land
equally among themselves and sold their respective shares to their co-petitioners herein. Antonio de Ubago, Jr., Milagros de Ubago-Umali,
Felisa Guballa de Ubago, Vanessa de Ubago-Umali and Marietta de Ubago-Tan and Joseph Guballa de Ubago. On 27 November 1992 Transfer
Certificate of Title No. T-42320 was issued in favor of the de Ubagos.
Less than a month later or on 07 December 1992 private respondents filed a complaint docketed Civil Case No. RTC-905-1 for "Annulment
of Sale with Restraining Order Injunction and Damages" against petitioners before Branch 71 of the Regional Trial Court of Zambales. In
their complaint private respondents averred that the disputed land sold by the heirs of Maria Espiritu to the de Ubagos was the subject of
a homestead application by their great grandfather. Andres Adona, but that Original Certificate of Title No. 398 was instead fraudulently
issued to Maria Espiritu, on 04 December 1933, upon her false representation that she was the widow of Andres Adona.
In its decision of 25 July 1995 after a hearing on the merits of the case, the trial court dismissed the complaint for lack of cause of action
and on the ground of prescription. It opined that the action being one for annulment of sale anchored on a fraudulent titling of the subject
property, the cause of action constituted a collateral attack on the Torrens Certificate of Title. The court a quo added that even if the action
were to be treated as being one for reconveyance, the suit would still have to fail since an action for reconveyance could only be brought
within ten (10) years counted from the date of issuance of the certificate of title (in 1933).
On appeal, the Court of Appeals, in its judgment of 11 February 1998,1 set aside the order of dismissal of the case decreed by the trial court
and directed the cancellation of Transfer Certificate of Title No. T-42320 in the name of the de Ubagos and the reconveyance of the property
to the estate of Andres Adona. Petitioners were additionally ordered to pay damages and attorney's fees to private respondents. The
appellate court, more particularly, ruled.
The evidence on record shows that OCT No. 398 issued in favor of Maria Espiritu was obtained by her fraudulent concealment of the
existence of Adona's first marriage to Leoncia Abad, as shown by the affidavit she executed on September 21, 1928 and filed with the
Director of Lands.
Consequently, Maria Espiritu's fraudulent concealment of material facts created an implied or constructive trust in favor of the plaintiffs,
the excluded co-heirs and actual possessors of the subject land. Article 1456 of the Civil Code reads:
If property is acquired through mistake or fraud, the person obtaining it is by force of law, considered a trustee of an implied trust for the
benefit of the person from whom the property comes.
Although it is true that after the lapse of one year, a decree of registration is no longer open to review or attack, although its issuance was
tainted with fraud; however, the aggrieved party is not without a remedy at law. Notwithstanding the irrevocability of the Torrens Title
already issued in favor of Maria Espiritu, she and her successors-in-interest, although the registered owner under the Torrens system, may
still be compelled under the law to reconvey the subject property to the real owners. The Torrens system was not designed to shield and
protect one who had committed fraud or misrepresentation and thus holds title in bad faith (Amerol vs. Bagumbaran, 154 SCRA 396, 404
[1987]);
In an action for reconveyance, the decree of registration is respected as incontrovertible. What is sought instead is the transfer of the
property, which has been wrongfully or erroneously registered in another person's name, to its rightful and legal owner, or to one with a
better right. (Amerol, supra.)
However, the right to seek reconveyance based on an implied or constructive trust is not absolute. It is subject to existence prescription.
(Amerol, supra.; Caro vs. Court of Appeals, 180 SCRA 401, 405-407 [1989]; Ramos vs. Court of Appeals, 112 SCRA 542, 550 [1982]; Ramos
vs. Ramos, 61 SCRA 284, 299-300 [19741])
An action for reconveyance of a parcel of land based on an implied trust prescribes in ten years, the point of reference being the date of
registration of the deed or the date of the issuance of the certificate of title over the property. (Amerol, supra., Caro, supra., Casipit vs.
Court of Appeals, 204 SCRA 684, 694 [1991]). This rule applies only when the plaintiff or the person enforcing the trust is not in possession
of the property. If a person claiming to be the owner thereof is in actual possession of the property, the right to seek reconveyance does
not prescribe. The reason for this is one who is in actual possession of a piece of land claiming to be the owner thereof may wait until his
possession is disturbed or his title is attacked before taking steps to vindicate his right. His undisturbed possession gives him the continuing
right to seek the aid of a court of equity to ascertain the nature of the adverse claim of third party and its effect on his title, which right can
be claimed only by one who is in possession. (Vda. de Cabrera vs. Court of Appeals, G.R. 108547, February 3, 1997).
Hence, the undisturbed possession by plaintiffs and their predecessors-in-interest gave them the continuing right to resort to judicial
intervention once their claim to ownership was challenged. It was therefore the defendant. Heirs act of executing the "Extrajudicial
Settlement of Estate with Sale" which constituted the express act of repudiation of the constructive trust which gave rise to plaintiffs cause
of action.2
Aggrieved, petitioners have come to this Court and seek to dispute the judgment of the Court of Appeals ordering the cancellation of Original
Certificate of Title No. 398 issued on 16 November 1933. It is the contention of petitioners that to allow private respondents to question
Original Certificate of Title No. 398 fifty-nine years after its issuance would undermine the Torrens system and sanctity of the certificate of
title.
Private respondents, upon the other hand, ask this Court to sustain the decision of the Court of Appeals on the thesis that the property in
question indubitably belongs to the estate of Andres Adona whose incontestable right to it is derived from the perfected homestead
application two years prior to his death as so admitted by Maria Espiritu herself in her affidavit submitted to the Director of Lands.
The Court rules for the affirmance of the challenged decision.
A certificate of title issued under an administrative proceeding pursuant to a homestead patent covering a disposable public land within the
contemplation of the Public Land Law or Commonwealth Act No. 141 is as indefeasible as a certificate of title issued under a judicial
registration proceeding. Under the Land Registration Act, title to the property covered by a Torrens certificate becomes indefeasible after
the expiration of one year from the entry of the decree of registration. Such decree of registration is incontrovertible and becomes binding
on all persons whether or not they were notified of, or participated in, the in rem registration process.3 There is no specific provision in the
Public Land Law or the Land Registration Act (Act 496), now Presidential Decree 1529, fixing a similar one-year period within which a public
land patent can be considered open to review on the ground of actual fraud, such as that provided for in Section 38 of the Land Registration
Act, and now Section 32 of Presidential Decree 1529, and clothing a public land patent certificate of title with indefeasibility. Nevertheless,
this Court has repeatedly applied Section 32 of Presidential Decree 1529 to a patent issued in accordance with the law by the Director of
Lands, approved by the Secretary of Natural Resources, under the signature of the President of the Philippines. 4 The date of the issuance of
the patent corresponds to the date of the issuance of the decree in ordinary cases. Just as the decree finally awards the land applied for
registration to the party entitled to it, so also, the patent issued by the Director of Lands equally and finally grants and conveys the land
applied for to the applicant.5
Original Certificate of Title No. 398 was issued in the name of Maria Espiritu on 04 December 1933 and would have become indefeasible a
year thereafter had not its issuance been attended with fraud. The attendance of fraud created an implied trust in favor of private
respondents and gave them the right of action to seek the remedy of reconveyance of the property wrongfully obtained.6 In Javier vs. Court
of Appeals7 this Court ruled:
. . . The basic rule is that after the lapse of one (1) year, a decree of registration is no longer open to review or attack although its issuance
is attended with actual fraud. This does not mean however that the aggrieved party is without a remedy at law. If the property has not yet
passed to an innocent purchaser for value, an action for reconveyance is still available. The decree becomes incontrovertible and can no
longer be reviewed after one (1) year from the date of the decree so that the only remedy of the landowner whose property has been
wrongfully or erroneously registered in another's name is to bring an ordinary action in court for reconveyance, which is an action in
personam and is always available as long as the property has not passed to an innocent third party for value. If the property has passed into
the hands of an innocent purchaser for value, the remedy is an action for damages. 8
The caption of the case before the court a quo while denominated as being one for "Annulment of Sale with Damages" is in reality an action
for reconveyance since the ultimate relief sought by private respondents would be for the property covered by Original Certificate of Title
No. 398 to be reconveyed to the estate of Andres Adona. In this jurisdiction, the dictum adhered to is that the nature of an action is
determined, more importantly, by the body of the pleading or complaint itself than by its title or heading. The Court of Appeals did not err
in treating the action brought by private respondents as one for reconveyance or as one that seeks the transfer of the property, wrongfully
registered by another, to its rightful and legal owner. 10 It would seem that Andres Adona did perfect his homestead application prior to his
death, 11 the right to the issuance of the patent on which vests after complying with all the requirements of the law. 12
The next crucial issue focuses on the ruling of the Court of Appeals to the effect that if a person who claims to be the owner of the property
is in actual possession thereof, the right to seek reconveyance does not prescribe.
There is no doubt about the fact that an action for reconveyance based on an implied trust ordinarily prescribes in ten years. 13 This rule
assumes, however, that there is an actual need to initiate that action, for when the right of the true and real owner is recognized, expressly
or implicitly such as when he remains undisturbed in his possession, the statute of limitation would yet be irrelevant. An action for
reconveyance, if nonetheless brought, would be in the nature of a suit for quieting of title, or its equivalent, an action that is imprescriptible.
In Faja vs. Court of Appeals, 14the Court has held that a person in actual possession of a piece of land under claim of ownership may wait
until his possession is disturbed or his title is attacked before taking steps to vindicate his right, and that his undisturbed possession gives
him the continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and
its effect on his title. In the words of the Court —
. . . There is settled jurisprudence that one who is in actual possession of a piece of land claiming to be owner thereof may wait until his
possession is disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule being, that his undisturbed
possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a
third party and its effect on his own title, which right can be claimed only by one who is in possession. No better situation can be conceived
at the moment for Us to apply this rule on equity than that of herein petitioners whose mother, Felipa Faja, was in possession of the litigated
property for no less than 30 years and was suddenly confronted with a claim that the land she had been occupying and cultivating all these
years, was titled in the name of a third person. We hold that in such a situation the right to quiet title to the property, to seek its
reconveyance and annul any certificate of title covering it, accrued only from the time the one in possession was made aware of a claim
adverse to his own and it is only then that the statutory period of prescription commences to run against such possessor. 15
The same dictum is reiterated in Heirs of Jose Olviga vs. Court of Appeals; 16 thus —
With regard to the issue of prescription, this Court has ruled a number of times before that an action for reconveyance of a parcel of land
based on implied or constructive trust prescribes in ten years, the point of reference being the date of registration of the deed or the date
of the issuance of the certificate of title over the property (Vda. de Portugal vs. IAC, 159 SCRA 178). But this rule applies only when the
plaintiff is not in possession of the property, since if a person claiming to be the owner thereof is in actual possession of the property, the
right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. 17
Finally, this Court sees no cogent reasons to disturb the finding of the Court of Appeals that the de Ubagos may not be considered buyers
in good faith. Said the Appellate Court:
. . . An innocent purchaser for value is one who buys property of another, without notice that some other person has a right to, or interest
in, such property and pays a full and fair price for the same, at the time of such purchase, or before he has notice of the claim or interest of
some other persons in the property. He buys the property with the belief that the person from whom he receives the thing was the owner
and could convey title to the property. A purchaser can not close his eyes to facts which should put a reasonable man on his guard and still
claim he acted in good faith (Sandoval vs. Court of Appeals, 260 SCRA 283, 296 [1996]).
It is well settled that one who deals with property registered under the Torrens system need not go beyond the same, but only has to rely
on the title. He is charged with notice only of such burdens and claims as are annotated on the title. (Sandoval, supra., at p. 295).
The aforestated principle admits of an unchallenged exception: that a person dealing with registered land has a right to rely on the Torrens
certificate of title and to dispense with the need of inquiring further except when the party has actual knowledge of facts and circumstances
that would impel a reasonably cautious man to make such inquiry or when the purchaser has some knowledge of a defect or the lack of title
in his vendor or of sufficient facts to induce a reasonably prudent man to inquire into the status of the title of the property in litigation. The
presence of anything which excites or arouses suspicion should then prompt the vendee to look beyond the certificate and investigate the
title of the vendor appearing on the face of said certificate. One who falls within the exception can neither be denominated an innocent
purchaser for value nor a purchaser in good faith and hence does not merit the protection of the law. (Sandoval, supra.) (Emphasis supplied)
Applying the aforequoted jurisprudence, the defendant buyers can not be considered as innocent purchasers for value. A perusal of
defendant buyers' TCT No. 42320 reveals that it contains an entry by the Register of Deeds which provides that their ownership over the
land is subject to prospective claims by any possible heirs and creditors who might have been deprived of their lawful participation in the
estate. The said entry reads as follows:
Entry No. 102385 — Section 4 — The property described in this certificate of title is subject to the provisions of Section 4, Rule 74 of the
Rules of Court for the period of two years in favor of in any other possible heir or heirs and creditors who might have been deprived of his
or their lawful participations in the said estate.
Date of Instrument — December 15, 1990
Date of Inscription — November 27, 1992 at 2:00 p.m. (Exh. "E"; Rollo, p. 137)
Sec. 4, Rule 74 of the Rules of Court reads, in part, as follows:
Sec. 4. Liability of distributees and estate. — If it shall appear at any time within (2) years after the settlement and distribution of an
estate in accordance with the provisions of either of the first two sections of this rule, that an heir or other person has been unduly deprived
of his lawful participation in the estate, such heir or such other person may compel the settlement of the estate in the courts in the manner
hereinafter provided for the purpose of satisfying such lawful participation . . .
The record shows that the "Extrajudicial Settlement of Estate with Sale" was executed on December 15, 1990. Plaintiffs' complaint for
Reconveyance was filed on December 7, 1992. Hence, the two-year period has not yet elapsed.
It likewise appears that the subject land was the object of a sale between the defendant Heirs and one Mrs. Venancia Ungson which was
subsequently aborted due to the intervention of defendant Vicente Adona and plaintiff Cristito Malay. (Exhs. "K", "K-1" and "L") However,
defendant Heirs nevertheless executed another sale in favor of defendant buyers who are admittedly relatives of Mrs. Venancia Ungson.
(TSN, January 23, 1995, p. 14) Plaintiff Cristito Malay's intervention in the previous sale should have put defendant buyers on their guard.
Moreover, it is unbelievable that the defendant buyers would not have noticed the plaintiffs who were in possession of the land when the
defendant buyers inspected the same. Had they made further investigations, they would have discovered that plaintiffs were in possession
of the land under a claim of ownership.
The rule is settled that a buyer of real property which is in the possession of persons other than the seller must be wary and should
investigate the rights of those in possession. Otherwise, without such inquiry, the buyer can hardly be regarded as a buyer in good faith.
The buyer who has failed to know or discover that the land sold to him is in the adverse possession of another buyer in bad faith. (Embrado
vs. Court of Appeals, 233 SCRA 335, 347 [1994]). 18
Altogether, the Court sees no reversible error on the part of the Court of Appeals in its assailed decision.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED Costs against petitioners.
SO ORDERED.
G.R. No. L-12958 May 30, 1960
FAUSTINO IGNACIO, applicant-appellant,
vs.
THE DIRECTOR OF LANDS and LAUREANO VALERIANO, oppositors-appellees.
Acting Assistant Solicitor General Pacifico P. de Castro and Solicitor Crispin V. Bautista for appellee Director of Lands.
Benjamin H. Aquino for appellee Laureano Veleriano.
MONTEMAYOR, J.:
Faustino Ignacio is appealing the decision of the Court of First Instance of Rizal, dismissing his application for the registration of a parcel of
land.
On January 25, 1950, Ignacio filed an application for the registration of a parcel of land (mangrove), situated in barrio Gasac, Navotas, Rizal,
with an area of 37,877 square meters. Later, he amended his application by alleging among others that he owned the parcel applied for by
right of accretion. To the application, the Director of Lands, Laureano Valeriano and Domingo Gutierrez filed oppositions. Gutierrez later
withdrew his opposition. The Director of Lands claimed the parcel applied for as a portion of the public domain, for the reason that neither
the applicant nor his predecessor-in-interest possessed sufficient title thereto, not having acquired it either by composition title from the
Spanish government or by possessory information title under the Royal Decree of February 13, 1894, and that he had not possessed the
same openly, continuously and adversely under a bona fide claim of ownership since July 26, 1894. In his turn, Valeriano alleged he was
holding the land by virtue of a permit granted him by the Bureau of Fisheries, issued on January 13, 1947, and approved by the President.
It is not disputed that the land applied for adjoins a parcel owned by the applicant which he had acquired from the Government by virtue
of a free patent title in 1936. It has also been established that the parcel in question was formed by accretion and alluvial deposits caused
by the action of the Manila Bay which boarders it on the southwest. Applicant Ignacio claims that he had occupied the land since 1935,
planting it with api-api trees, and that his possession thereof had been continuous, adverse and public for a period of twenty years until Interpreting Article 4 of the Law of Waters of 1866, in the case of Natividad vs. Director of Lands, (CA) 37 Off. Gaz., 2905, it was there held
said possession was distributed by oppositor Valeriano. that:

On the other hand, the Director of Lands sought to prove that the parcel is foreshore land, covered by the ebb and flow of the tide and,
therefore, formed part of the public domain.
After hearing, the trial court dismissed the application, holding that the parcel formed part of the public domain. In his appeal, Ignacio
assigns the following errors:
I. The lower court erred in holding that the land in question, altho an accretion to the land of the applicant-appellant, does not belong to
him but forms part of the public domain.
II. Granting that the land in question forms part of the public domain, the lower court nevertheless erred in not declaring the same to be
the necessary for any public use or purpose and in not ordering in the present registration proceedings.
III. The lower court erred in not holding that the land in question now belongs to the applicant-appellant by virtue of acquisitive prescription,
the said land having ceased to be of the public domain and became the private or patrimonial property of the State.
IV. The lower court erred in not holding that the oppositor Director of Lands is now in estoppel from claiming the land in question as a land
of the public domain.
Appellant contends that the parcel belongs to him by the law of accretion, having been formed by gradual deposit by action of the Manila
Bay, and he cites Article 457 of the New Civil Code (Article 366, Old Civil Code), which provides that:
Article 4 of the Law of Waters of 1866 provides that when a portion of the shore is no longer washed by the waters of the sea and is not
necessary for purposes of public utility, or for the establishment of special industries, or for coastguard service, the government shall declare
it to be the property of the owners of the estates adjacent thereto and as an increment thereof. We believe that only the executive and
possibly the legislative departments have the authority and the power to make the declaration that any land so gained by the sea, is not
necessary for purposes of public utility, or for the establishment of special industries, on for coast-guard service. If no such declaration has
been made by said departments, the lot in question forms part of the public domain. (Natividad vs. Director of Lands, supra.)
The reason for this pronouncement, according to this Tribunal in the case of Vicente Joven y Monteverde vs. Director of Lands, 93 Phil., 134,
(cited in Velayo's Digest, VI. I, p. 52).
. . . is undoubtedly that the courts are neither primarily called upon, nor indeed in a position to determine whether any public land are to
be used for the purposes specified in Article 4 of the Law of Waters.
Consequently, until a formal declaration on the part of the Government, through the executive department or the Legislature, to the effect
that the land in question is no longer needed for coast guard service, for public use or for special industries, they continue to be part of the
public domain, not available for private appropriation or ownership.
Appellant next contends that he had acquired the parcel in question through acquisitive prescription, having possessed the same for over
ten years. In answer, suffice it to say that land of the public domain is not subject to ordinary prescription. In the case of Insular Government
vs. Aldecoa & Co., 19 Phil., 505 this Court said:

To the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the current of the
waters.
The article cited is clearly inapplicable because it refers to accretion or deposits on the banks of rivers, while the accretion in the present
case was caused by action of the Manila Bay.
Appellant next contends that Articles 1, 4 and 5 of the Law of Waters are not applicable because they refer to accretions formed by the sea,
and that Manila Bay cannot be considered as a sea. We find said contention untenable. A bay is a part of the sea, being a mere indentation
of the same:
The occupation or material possession of any land formed upon the shore by accretion, without previous permission from the proper
authorities, although the occupant may have held the same as owner for seventeen years and constructed a wharf on the land, is illegal and
is a mere detainer, inasmuch as such land is outside of the sphere of commerce; it pertains to the national domain; it is intended for public
uses and for the benefit of those who live nearby.
We deem it unnecessary to discuss the other points raised in the appeal.
In view of the foregoing, the appealed decision is hereby affirmed, with costs.

Bay. — An opening into the land where the water is shut in on all sides except at the entrance; an inlet of the sea; an arm of the sea, distinct
from a river, a bending or curbing of the shore of the sea or of a lake. 7 C.J. 1013-1014 (Cited in Francisco, Philippine Law of Waters and
Water Rights p. 6)

Moreover, this Tribunal has some cases applied the Law of Waters on Lands bordering Manila Bay. (See the cases of Ker & Co. vs. Cauden,
6 Phil., 732, involving a parcel of land bounded on the sides by Manila Bay, where it was held that such land formed by the action of the sea
is property of the State; Francisco vs. Government of the P.I., 28 Phil., 505, involving a land claimed by a private person and subject to the
ebb and flow of the tides of the Manila Bay).

Then the applicant argues that granting that the land in question formed part of the public domain, having been gained from the sea, the
trial court should have declared the same no longer necessary for any public use or purpose, and therefore, became disposable and available
for private ownership. Article 4 of the Law of Waters of 1866 reads thus:

ART. 4. Lands added to the shores by accretions and alluvial deposits caused by the action of the sea, form part of the public domain. When
they are no longer washed by the waters of the sea and are not necessary for purposes of public utility, or for the establishment of special
industries, or for the coastguard service, the Government shall declare them to be the property of the owners of the estates adjacent
thereto and as increment thereof.