Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 179987 September 3, 2013

HEIRS OF MARIO MALABANAN, (Represented by Sally A. Malabanan), Petitioners,

vs.
REPUBLIC OF THE PHILIPPINES, Respondent.

RESOLUTION

BERSAMIN, J.:

For our consideration and resolution are the motions for reconsideration of the parties who both assail the decision
promulgated on April 29, 2009, whereby we upheld the ruling of the Court of Appeals (CA) denying the application of
the petitioners for the registration of a parcel of land situated in Barangay Tibig, Silang, Cavite on the ground that they
had not established by sufficient evidence their right to the registration in accordance with either Section 14(1) or
Section 14(2) of Presidential Decree No. 1529 (Property Registration Decree).

Antecedents

The property subject of the application for registration is a parcel of land situated in Barangay Tibig, Silang Cavite,
more particularly identified as Lot 9864-A, Cad-452-D, with an area of 71,324-square meters. On February 20, 1998,
applicant Mario Malabanan, who had purchased the property from Eduardo Velazco, filed an application for land
registration covering the property in the Regional Trial Court (RTC) in Tagaytay City, Cavite, claiming that the
property formed part of the alienable and disposable land of the public domain, and that he and his predecessors-in-
interest had been in open, continuous, uninterrupted, public and adverse possession and occupation of the land for
more than 30 years, thereby entitling him to the judicial confirmation of his title. 1

To prove that the property was an alienable and disposable land of the public domain, Malabanan presented during
trial a certification dated June 11, 2001 issued by the Community Environment and Natural Resources Office
(CENRO) of the Department of Environment and Natural Resources (DENR), which reads:

This is to certify that the parcel of land designated as Lot No. 9864 Cad 452-D, Silang Cadastre as surveyed for Mr.
Virgilio Velasco located at Barangay Tibig, Silang, Cavite containing an area of 249,734 sq. meters as shown and
described on the Plan Ap-04-00952 is verified to be within the Alienable or Disposable land per Land Classification
Map No. 3013 established under Project No. 20-A and approved as such under FAO 4-1656 on March 15, 1982.2

After trial, on December 3, 2002, the RTC rendered judgment granting Malabanan’s application for land registration,
disposing thusly:

WHEREFORE, this Court hereby approves this application for registration and thus places under the operation of Act
141, Act 496 and/or P.D. 1529, otherwise known as Property Registration Law, the lands described in Plan Csd-04-
0173123-D, Lot 9864-A and containing an area of Seventy One Thousand Three Hundred Twenty Four (71,324)
Square Meters, as supported by its technical description now forming part of the record of this case, in addition to
other proofs adduced in the name of MARIO MALABANAN, who is of legal age, Filipino, widower, and with residence
at Munting Ilog, Silang, Cavite.

Once this Decision becomes final and executory, the corresponding decree of registration shall forthwith issue.

SO ORDERED.3

The Office of the Solicitor General (OSG) appealed the judgment to the CA, arguing that Malabanan had failed to
prove that the property belonged to the alienable and disposable land of the public domain, and that the RTC erred in
finding that he had been in possession of the property in the manner and for the length of time required by law for
confirmation of imperfect title.

On February 23, 2007, the CA promulgated its decision reversing the RTC and dismissing the application for
registration of Malabanan. Citing the ruling in Republic v. Herbieto (Herbieto), 4 the CA declared that under Section
14(1) of the Property Registration Decree, any period of possession prior to the classification of the land as alienable
and disposable was inconsequential and should be excluded from the computation of the period of possession.
Noting that the CENRO-DENR certification stated that the property had been declared alienable and disposable only
on March 15, 1982, Velazco’s possession prior to March 15, 1982 could not be tacked for purposes of computing
Malabanan’s period of possession.

Due to Malabanan’s intervening demise during the appeal in the CA, his heirs elevated the CA’s decision of February
23, 2007 to this Court through a petition for review on certiorari.

The petitioners assert that the ruling in Republic v. Court of Appeals and Corazon Naguit 5 (Naguit) remains the
controlling doctrine especially if the property involved is agricultural land. In this regard, Naguit ruled that any
possession of agricultural land prior to its declaration as alienable and disposable could be counted in the reckoning
of the period of possession to perfect title under the Public Land Act (Commonwealth Act No. 141) and the Property
Registration Decree. They point out that the ruling in Herbieto, to the effect that the declaration of the land subject of
the application for registration as alienable and disposable should also date back to June 12, 1945 or earlier, was a
mere obiter dictum considering that the land registration proceedings therein were in fact found and declared void ab
initio for lack of publication of the notice of initial hearing.

The petitioners also rely on the ruling in Republic v. T.A.N. Properties, Inc.6 to support their argument that the
property had been ipso jure converted into private property by reason of the open, continuous, exclusive and
notorious possession by their predecessors-in-interest of an alienable land of the public domain for more than 30
years. According to them, what was essential was that the property had been "converted" into private property
through prescription at the time of the application without regard to whether the property sought to be registered was
previously classified as agricultural land of the public domain.

As earlier stated, we denied the petition for review on certiorari because Malabanan failed to establish by sufficient
evidence possession and occupation of the property on his part and on the part of his predecessors-in interest since
June 12, 1945, or earlier.

Petitioners’ Motion for Reconsideration

In their motion for reconsideration, the petitioners submit that the mere classification of the land as alienable or
disposable should be deemed sufficient to convert it into patrimonial property of the State. Relying on the rulings in
Spouses De Ocampo v. Arlos,7 Menguito v. Republic8 and Republic v. T.A.N. Properties, Inc.,9 they argue that the
reclassification of the land as alienable or disposable opened it to acquisitive prescription under the Civil Code; that
Malabanan had purchased the property from Eduardo Velazco believing in good faith that Velazco and his
predecessors-in-interest had been the real owners of the land with the right to validly transmit title and ownership
thereof; that consequently, the ten-year period prescribed by Article 1134 of the Civil Code, in relation to Section
14(2) of the Property Registration Decree, applied in their favor; and that when Malabanan filed the application for
registration on February 20, 1998, he had already been in possession of the land for almost 16 years reckoned from
1982, the time when the land was declared alienable and disposable by the State.

The Republic’s Motion for Partial Reconsideration

The Republic seeks the partial reconsideration in order to obtain a clarification with reference to the application of the
rulings in Naguit and Herbieto.

Chiefly citing the dissents, the Republic contends that the decision has enlarged, by implication, the interpretation of
Section 14(1) of the Property Registration Decree through judicial legislation. It reiterates its view that an applicant is
entitled to registration only when the land subject of the application had been declared alienable and disposable since
June 12, 1945 or earlier.

Ruling
We deny the motions for reconsideration.

In reviewing the assailed decision, we consider to be imperative to discuss the different classifications of land in
relation to the existing applicable land registration laws of the Philippines.

Classifications of land according to ownership

Land, which is an immovable property,10 may be classified as either of public dominion or of private ownership.11 Land
is considered of public dominion if it either: (a) is intended for public use; or (b) belongs to the State, without being for
public use, and is intended for some public service or for the development of the national wealth. 12 Land belonging to
the State that is not of such character, or although of such character but no longer intended for public use or for
public service forms part of the patrimonial property of the State. 13 Land that is other than part of the patrimonial
property of the State, provinces, cities and municipalities is of private ownership if it belongs to a private individual.

Pursuant to the Regalian Doctrine (Jura Regalia), a legal concept first introduced into the country from the West by
Spain through the Laws of the Indies and the Royal Cedulas,14 all lands of the public domain belong to the
State.15 This means that the State is the source of any asserted right to ownership of land, and is charged with the
conservation of such patrimony.16

All lands not appearing to be clearly under private ownership are presumed to belong to the State. Also, public lands
remain part of the inalienable land of the public domain unless the State is shown to have reclassified or alienated
them to private persons.17

Classifications of public lands

according to alienability

Whether or not land of the public domain is alienable and disposable primarily rests on the classification of public
lands made under the Constitution. Under the 1935 Constitution, 18 lands of the public domain were classified into
three, namely, agricultural, timber and mineral.19 Section 10, Article XIV of the 1973 Constitution classified lands of
the public domain into seven, specifically, agricultural, industrial or commercial, residential, resettlement, mineral,
timber or forest, and grazing land, with the reservation that the law might provide other classifications. The 1987
Constitution adopted the classification under the 1935 Constitution into agricultural, forest or timber, and mineral, but
added national parks.20 Agricultural lands may be further classified by law according to the uses to which they may be
devoted.21 The identification of lands according to their legal classification is done exclusively by and through a
positive act of the Executive Department.22

Based on the foregoing, the Constitution places a limit on the type of public land that may be alienated. Under
Section 2, Article XII of the 1987 Constitution, only agricultural lands of the public domain may be alienated; all other
natural resources may not be.

Alienable and disposable lands of the State fall into two categories, to wit: (a) patrimonial lands of the State, or those
classified as lands of private ownership under Article 425 of the Civil Code, 23 without limitation; and (b) lands of the
public domain, or the public lands as provided by the Constitution, but with the limitation that the lands must only be
agricultural. Consequently, lands classified as forest or timber, mineral, or national parks are not susceptible of
alienation or disposition unless they are reclassified as agricultural.24 A positive act of the Government is necessary to
enable such reclassification,25 and the exclusive prerogative to classify public lands under existing laws is vested in
the Executive Department, not in the courts.26 If, however, public land will be classified as neither agricultural, forest
or timber, mineral or national park, or when public land is no longer intended for public service or for the development
of the national wealth, thereby effectively removing the land from the ambit of public dominion, a declaration of such
conversion must be made in the form of a law duly enacted by Congress or by a Presidential proclamation in cases
where the President is duly authorized by law to that effect.27 Thus, until the Executive Department exercises its
prerogative to classify or reclassify lands, or until Congress or the President declares that the State no longer intends
the land to be used for public service or for the development of national wealth, the Regalian Doctrine is applicable.

Disposition of alienable public lands

Section 11 of the Public Land Act (CA No. 141) provides the manner by which alienable and disposable lands of the
public domain, i.e., agricultural lands, can be disposed of, to wit:
Section 11. Public lands suitable for agricultural purposes can be disposed of only as follows, and not otherwise:

(1) For homestead settlement;

(2) By sale;

(3) By lease; and

(4) By confirmation of imperfect or incomplete titles;

(a) By judicial legalization; or

(b) By administrative legalization (free patent).

The core of the controversy herein lies in the proper interpretation of Section 11(4), in relation to Section 48(b) of the
Public Land Act, which expressly requires possession by a Filipino citizen of the land since June 12, 1945, or earlier,
viz:

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 thereafter, under the Land Registration Act, to wit:

xxxx

(b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive, and
notorious possession and occupation of alienable and disposable lands of the public domain, under a bona fide claim
of acquisition of ownership, since June 12, 1945, or earlier, immediately preceding the filing of the applications 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. (Bold emphasis supplied)

Note that Section 48(b) of the Public Land Act used the words "lands of the public domain" or "alienable and
disposable lands of the public domain" to clearly signify that lands otherwise classified, i.e., mineral, forest or timber,
or national parks, and lands of patrimonial or private ownership, are outside the coverage of the Public Land Act.
What the law does not include, it excludes. The use of the descriptive phrase "alienable and disposable" further limits
the coverage of Section 48(b) to only the agricultural lands of the public domain as set forth in Article XII, Section 2 of
the 1987 Constitution. Bearing in mind such limitations under the Public Land Act, the applicant must satisfy the
following requirements in order for his application to come under Section 14(1) of the Property Registration
Decree,28 to wit:

1. The applicant, by himself or through his predecessor-in-interest, has been in possession and occupation
of the property subject of the application;

2. The possession and occupation must be open, continuous, exclusive, and notorious;

3. The possession and occupation must be under a bona fide claim of acquisition of ownership;

4. The possession and occupation must have taken place since June 12, 1945, or earlier; and

5. The property subject of the application must be an agricultural land of the public domain.

Taking into consideration that the Executive Department is vested with the authority to classify lands of the public
domain, Section 48(b) of the Public Land Act, in relation to Section 14(1) of the Property Registration Decree,
presupposes that the land subject of the application for registration must have been already classified as agricultural
land of the public domain in order for the provision to apply. Thus, absent proof that the land is already classified as
agricultural land of the public domain, the Regalian Doctrine applies, and overcomes the presumption that the land is
alienable and disposable as laid down in Section 48(b) of the Public Land Act. However, emphasis is placed on the
requirement that the classification required by Section 48(b) of the Public Land Act is classification or reclassification
of a public land as agricultural.

The dissent stresses that the classification or reclassification of the land as alienable and disposable agricultural land
should likewise have been made on June 12, 1945 or earlier, because any possession of the land prior to such
classification or reclassification produced no legal effects. It observes that the fixed date of June 12, 1945 could not
be minimized or glossed over by mere judicial interpretation or by judicial social policy concerns, and insisted that the
full legislative intent be respected.

We find, however, that the choice of June 12, 1945 as the reckoning point of the requisite possession and occupation
was the sole prerogative of Congress, the determination of which should best be left to the wisdom of the lawmakers.
Except that said date qualified the period of possession and occupation, no other legislative intent appears to be
associated with the fixing of the date of June 12, 1945. Accordingly, the Court should interpret only the plain and
literal meaning of the law as written by the legislators.

Moreover, an examination of Section 48(b) of the Public Land Act indicates that Congress prescribed no requirement
that the land subject of the registration should have been classified as agricultural since June 12, 1945, or earlier. As
such, the applicant’s imperfect or incomplete title is derived only from possession and occupation since June 12,
1945, or earlier. This means that the character of the property subject of the application as alienable and disposable
agricultural land of the public domain determines its eligibility for land registration, not the ownership or title over it.

Alienable public land held by a possessor, either personally or through his predecessors-in-interest, openly,
continuously and exclusively during the prescribed statutory period is converted to private property by the mere lapse
or completion of the period.29 In fact, by virtue of this doctrine, corporations may now acquire lands of the public
domain for as long as the lands were already converted to private ownership, by operation of law, as a result of
satisfying the requisite period of possession prescribed by the Public Land Act.30 It is for this reason that the property
subject of the application of Malabanan need not be classified as alienable and disposable agricultural land of the
public domain for the entire duration of the requisite period of possession.

To be clear, then, the requirement that the land should have been classified as alienable and disposable agricultural
land at the time of the application for registration is necessary only to dispute the presumption that the land is
inalienable.

The declaration that land is alienable and disposable also serves to determine the point at which prescription may run
against the State. The imperfect or incomplete title being confirmed under Section 48(b) of the Public Land Act is title
that is acquired by reason of the applicant’s possession and occupation of the alienable and disposable agricultural
land of the public domain. Where all the necessary requirements for a grant by the Government are complied with
through actual physical, open, continuous, exclusive and public possession of an alienable and disposable land of the
public domain, the possessor is deemed to have acquired by operation of law not only a right to a grant, but a grant
by the Government, because it is not necessary that a certificate of title be issued in order that such a grant be
sanctioned by the courts.31

If one follows the dissent, the clear objective of the Public Land Act to adjudicate and quiet titles to unregistered lands
in favor of qualified Filipino citizens by reason of their occupation and cultivation thereof for the number of years
prescribed by law32 will be defeated. Indeed, we should always bear in mind that such objective still prevails, as a
fairly recent legislative development bears out, when Congress enacted legislation (Republic Act No. 10023)33 in
order to liberalize stringent requirements and procedures in the adjudication of alienable public land to qualified
applicants, particularly residential lands, subject to area limitations. 34

On the other hand, if a public land is classified as no longer intended for public use or for the development of national
wealth by declaration of Congress or the President, thereby converting such land into patrimonial or private land of
the State, the applicable provision concerning disposition and registration is no longer Section 48(b) of the Public
Land Act but the Civil Code, in conjunction with Section 14(2) of the Property Registration Decree. 35 As such,
prescription can now run against the State.

To sum up, we now observe the following rules relative to the disposition of public land or lands of the public domain,
namely:
 (1) As a general rule and pursuant to the Regalian Doctrine, all lands of the public domain belong to the
State and are inalienable. Lands that are not clearly under private ownership are also presumed to belong to
the State and, therefore, may not be alienated or disposed;

(2) The following are excepted from the general rule, to wit:

(a) Agricultural lands of the public domain are rendered alienable and disposable through any of
the exclusive modes enumerated under Section 11 of the Public Land Act. If the mode is judicial
confirmation of imperfect title under Section 48(b) of the Public Land Act, the agricultural land
subject of the application needs only to be classified as alienable and disposable as of the time of
the application, provided the applicant’s possession and occupation of the land dated back to June
12, 1945, or earlier. Thereby, a conclusive presumption that the applicant has performed all the
conditions essential to a government grant arises, 36 and the applicant becomes the owner of the
land by virtue of an imperfect or incomplete title. By legal fiction, the land has already ceased to be
part of the public domain and has become private property. 37

(b) Lands of the public domain subsequently classified or declared as no longer intended for public
use or for the development of national wealth are removed from the sphere of public dominion and
are considered converted into patrimonial lands or lands of private ownership that may be alienated
or disposed through any of the modes of acquiring ownership under the Civil Code. If the mode of
acquisition is prescription, whether ordinary or extraordinary, proof that the land has been already
converted to private ownership prior to the requisite acquisitive prescriptive period is a condition
sine qua non in observance of the law (Article 1113, Civil Code) that property of the State not
patrimonial in character shall not be the object of prescription.

To reiterate, then, the petitioners failed to present sufficient evidence to establish that they and their predecessors-in-
interest had been in possession of the land since June 12, 1945. Without satisfying the requisite character and period
of possession - possession and occupation that is open, continuous, exclusive, and notorious since June 12, 1945, or
earlier - the land cannot be considered ipso jure converted to private property even upon the subsequent declaration
of it as alienable and disposable. Prescription never began to run against the State, such that the land has remained
ineligible for registration under Section 14(1) of the Property Registration Decree. Likewise, the land continues to be
ineligible for land registration under Section 14(2) of the Property Registration Decree unless Congress enacts a law
or the President issues a proclamation declaring the land as no longer intended for public service or for the
development of the national wealth. 1âwphi 1

WHEREFORE, the Court DENIES the petitioners' Motion for Reconsideration and the respondent's Partial Motion for
Reconsideration for their lack of merit.

SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice
G.R. No. 167707 October 8, 2008

THE SECRETARY OF THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, THE REGIONAL
EXECUTIVE DIRECTOR, DENR-REGION VI, REGIONAL TECHNICAL DIRECTOR FOR LANDS, LANDS
MANAGEMENT BUREAU, REGION VI PROVINCIAL ENVIRONMENT AND NATURAL RESOURCES OFFICER
OF KALIBO, AKLAN, REGISTER OF DEEDS, DIRECTOR OF LAND REGISTRATION AUTHORITY,
DEPARTMENT OF TOURISM SECRETARY, DIRECTOR OF PHILIPPINE TOURISM AUTHORITY, petitioners,
vs.
MAYOR JOSE S. YAP, LIBERTAD TALAPIAN, MILA Y. SUMNDAD, and ANICETO YAP, in their behalf and in
behalf of all those similarly situated, respondents.

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

G.R. No. G.R. No. 173775 October 8, 2008

DR. ORLANDO SACAY and WILFREDO GELITO, joined by THE LANDOWNERS OF BORACAY SIMILARLY
SITUATED NAMED IN A LIST, ANNEX "A" OF THIS PETITION, petitioners,
vs.
THE SECRETARY OF THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, THE REGIONAL
TECHNICAL DIRECTOR FOR LANDS, LANDS MANAGEMENT BUREAU, REGION VI, PROVINCIAL
ENVIRONMENT AND NATURAL RESOURCES OFFICER, KALIBO, AKLAN, respondents.

DECISION

REYES, R.T., J.:

AT stake in these consolidated cases is the right of the present occupants of Boracay Island to secure titles over their
occupied lands.

There are two consolidated petitions. The first is G.R. No. 167707, a petition for review on certiorari of the
Decision1 of the Court of Appeals (CA) affirming that2 of the Regional Trial Court (RTC) in Kalibo, Aklan, which
granted the petition for declaratory relief filed by respondents-claimants Mayor Jose Yap, et al. and ordered the
survey of Boracay for titling purposes. The second is G.R. No. 173775, a petition for prohibition, mandamus, and
nullification of Proclamation No. 10645">[3] issued by President Gloria Macapagal-Arroyo classifying Boracay into
reserved forest and agricultural land.

The Antecedents

G.R. No. 167707

Boracay Island in the Municipality of Malay, Aklan, with its powdery white sand beaches and warm crystalline waters,
is reputedly a premier Philippine tourist destination. The island is also home to 12,003 inhabitants4 who live in the
bone-shaped island’s three barangays.5

On April 14, 1976, the Department of Environment and Natural Resources (DENR) approved the National
Reservation Survey of Boracay Island,6 which identified several lots as being occupied or claimed by named
persons.7

On November 10, 1978, then President Ferdinand Marcos issued Proclamation No. 18018 declaring Boracay Island,
among other islands, caves and peninsulas in the Philippines, as tourist zones and marine reserves under the
administration of the Philippine Tourism Authority (PTA). President Marcos later approved the issuance of PTA
Circular 3-829 dated September 3, 1982, to implement Proclamation No. 1801.

Claiming that Proclamation No. 1801 and PTA Circular No 3-82 precluded them from filing an application for judicial
confirmation of imperfect title or survey of land for titling purposes, respondents-claimants
Mayor Jose S. Yap, Jr., Libertad Talapian, Mila Y. Sumndad, and Aniceto Yap filed a petition for declaratory relief
with the RTC in Kalibo, Aklan.

In their petition, respondents-claimants alleged that Proclamation No. 1801 and PTA Circular No. 3-82 raised doubts
on their right to secure titles over their occupied lands. They declared that they themselves, or through their
predecessors-in-interest, had been in open, continuous, exclusive, and notorious possession and occupation in
Boracay since June 12, 1945, or earlier since time immemorial. They declared their lands for tax purposes and paid
realty taxes on them.10

Respondents-claimants posited that Proclamation No. 1801 and its implementing Circular did not place Boracay
beyond the commerce of man. Since the Island was classified as a tourist zone, it was susceptible of private
ownership. Under Section 48(b) of Commonwealth Act (CA) No. 141, otherwise known as the Public Land Act, they
had the right to have the lots registered in their names through judicial confirmation of imperfect titles.

The Republic, through the Office of the Solicitor General (OSG), opposed the petition for declaratory relief. The OSG
countered that Boracay Island was an unclassified land of the public domain. It formed part of the mass of lands
classified as "public forest," which was not available for disposition pursuant to Section 3(a) of Presidential Decree
(PD) No. 705 or the Revised Forestry Code,11 as amended.

The OSG maintained that respondents-claimants’ reliance on PD No. 1801 and PTA Circular No. 3-82 was
misplaced. Their right to judicial confirmation of title was governed by CA No. 141 and PD No. 705. Since Boracay
Island had not been classified as alienable and disposable, whatever possession they had cannot ripen into
ownership.

During pre-trial, respondents-claimants and the OSG stipulated on the following facts: (1) respondents-claimants
were presently in possession of parcels of land in Boracay Island; (2) these parcels of land were planted with coconut
trees and other natural growing trees; (3) the coconut trees had heights of more or less twenty (20) meters and were
planted more or less fifty (50) years ago; and (4) respondents-claimants declared the land they were occupying for
tax purposes.12

The parties also agreed that the principal issue for resolution was purely legal: whether Proclamation No. 1801 posed
any legal hindrance or impediment to the titling of the lands in Boracay. They decided to forego with the trial and to
submit the case for resolution upon submission of their respective memoranda.13

The RTC took judicial notice14 that certain parcels of land in Boracay Island, more particularly Lots 1 and 30, Plan
PSU-5344, were covered by Original Certificate of Title No. 19502 (RO 2222) in the name of the Heirs of Ciriaco S.
Tirol. These lots were involved in Civil Case Nos. 5222 and 5262 filed before the RTC of Kalibo, Aklan.15 The titles
were issued on August 7, 1933.16

RTC and CA Dispositions

On July 14, 1999, the RTC rendered a decision in favor of respondents-claimants, with a fallo reading:

WHEREFORE, in view of the foregoing, the Court declares that Proclamation No. 1801 and PTA Circular No. 3-82
pose no legal obstacle to the petitioners and those similarly situated to acquire title to their lands in Boracay, in
accordance with the applicable laws and in the manner prescribed therein; and to have their lands surveyed and
approved by respondent Regional Technical Director of Lands as the approved survey does not in itself constitute a
title to the land.

SO ORDERED.17

The RTC upheld respondents-claimants’ right to have their occupied lands titled in their name. It ruled that neither
Proclamation No. 1801 nor PTA Circular No. 3-82 mentioned that lands in Boracay were inalienable or could not be
the subject of disposition.18 The Circular itself recognized private ownership of lands. 19 The trial court cited Sections
8720 and 5321 of the Public Land Act as basis for acknowledging private ownership of lands in Boracay and that only
those forested areas in public lands were declared as part of the forest reserve. 22

The OSG moved for reconsideration but its motion was denied. 23 The Republic then appealed to the CA.
On December 9, 2004, the appellate court affirmed in toto the RTC decision, disposing as follows:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DENYING the appeal filed in
this case and AFFIRMING the decision of the lower court. 24

The CA held that respondents-claimants could not be prejudiced by a declaration that the lands they occupied since
time immemorial were part of a forest reserve.

Again, the OSG sought reconsideration but it was similarly denied.25 Hence, the present petition under Rule 45.

G.R. No. 173775

On May 22, 2006, during the pendency of G.R. No. 167707, President Gloria Macapagal-Arroyo issued Proclamation
No. 106426 classifying Boracay Island into four hundred (400) hectares of reserved forest land (protection purposes)
and six hundred twenty-eight and 96/100 (628.96) hectares of agricultural land (alienable and disposable). The
Proclamation likewise provided for a fifteen-meter buffer zone on each side of the centerline of roads and trails,
reserved for right-of-way and which shall form part of the area reserved for forest land protection purposes.

On August 10, 2006, petitioners-claimants Dr. Orlando Sacay,27 Wilfredo Gelito,28 and other landowners29 in Boracay
filed with this Court an original petition for prohibition, mandamus, and nullification of Proclamation No. 1064. 30 They
allege that the Proclamation infringed on their "prior vested rights" over portions of Boracay. They have been in
continued possession of their respective lots in Boracay since time immemorial. They have also invested billions of
pesos in developing their lands and building internationally renowned first class resorts on their lots.31

Petitioners-claimants contended that there is no need for a proclamation reclassifying Boracay into agricultural land.
Being classified as neither mineral nor timber land, the island is deemed agricultural pursuant to the Philippine Bill of
1902 and Act No. 926, known as the first Public Land Act. 32 Thus, their possession in the concept of owner for the
required period entitled them to judicial confirmation of imperfect title.

Opposing the petition, the OSG argued that petitioners-claimants do not have a vested right over their occupied
portions in the island. Boracay is an unclassified public forest land pursuant to Section 3(a) of PD No. 705. Being
public forest, the claimed portions of the island are inalienable and cannot be the subject of judicial confirmation of
imperfect title. It is only the executive department, not the courts, which has authority to reclassify lands of the public
domain into alienable and disposable lands. There is a need for a positive government act in order to release the lots
for disposition.

On November 21, 2006, this Court ordered the consolidation of the two petitions as they principally involve the same
issues on the land classification of Boracay Island.33

Issues

G.R. No. 167707

The OSG raises the lone issue of whether Proclamation No. 1801 and PTA Circular No. 3-82 pose any legal obstacle
for respondents, and all those similarly situated, to acquire title to their occupied lands in Boracay Island. 34

G.R. No. 173775

Petitioners-claimants hoist five (5) issues, namely:

I.

AT THE TIME OF THE ESTABLISHED POSSESSION OF PETITIONERS IN CONCEPT OF OWNER OVER THEIR
RESPECTIVE AREAS IN BORACAY, SINCE TIME IMMEMORIAL OR AT THE LATEST SINCE 30 YRS. PRIOR TO
THE FILING OF THE PETITION FOR DECLARATORY RELIEF ON NOV. 19, 1997, WERE THE AREAS
OCCUPIED BY THEM PUBLIC AGRICULTURAL LANDS AS DEFINED BY LAWS THEN ON JUDICIAL
CONFIRMATION OF IMPERFECT TITLES OR PUBLIC FOREST AS DEFINED BY SEC. 3a, PD 705?

II.

HAVE PETITIONERS OCCUPANTS ACQUIRED PRIOR VESTED RIGHT OF PRIVATE OWNERSHIP OVER THEIR
OCCUPIED PORTIONS OF BORACAY LAND, DESPITE THE FACT THAT THEY HAVE NOT APPLIED YET FOR
JUDICIAL CONFIRMATION OF IMPERFECT TITLE?

III.

IS THE EXECUTIVE DECLARATION OF THEIR AREAS AS ALIENABLE AND DISPOSABLE UNDER SEC 6, CA
141 [AN] INDISPENSABLE PRE-REQUISITE FOR PETITIONERS TO OBTAIN TITLE UNDER THE TORRENS
SYSTEM?

IV.

IS THE ISSUANCE OF PROCLAMATION 1064 ON MAY 22, 2006, VIOLATIVE OF THE PRIOR VESTED RIGHTS
TO PRIVATE OWNERSHIP OF PETITIONERS OVER THEIR LANDS IN BORACAY, PROTECTED BY THE DUE
PROCESS CLAUSE OF THE CONSTITUTION OR IS PROCLAMATION 1064 CONTRARY TO SEC. 8, CA 141, OR
SEC. 4(a) OF RA 6657.

V.

CAN RESPONDENTS BE COMPELLED BY MANDAMUS TO ALLOW THE SURVEY AND TO APPROVE THE
SURVEY PLANS FOR PURPOSES OF THE APPLICATION FOR TITLING OF THE LANDS OF PETITIONERS IN
BORACAY?35 (Underscoring supplied)

In capsule, the main issue is whether private claimants (respondents-claimants in G.R. No. 167707 and petitioners-
claimants in G.R. No. 173775) have a right to secure titles over their occupied portions in Boracay. The twin petitions
pertain to their right, if any, to judicial confirmation of imperfect title under CA No. 141, as amended. They do not
involve their right to secure title under other pertinent laws.

Our Ruling

Regalian Doctrine and power of the executive

to reclassify lands of the public domain

Private claimants rely on three (3) laws and executive acts in their bid for judicial confirmation of imperfect title,
namely: (a) Philippine Bill of 190236 in relation to Act No. 926, later amended and/or superseded by Act No. 2874 and
CA No. 141;37 (b) Proclamation No. 180138 issued by then President Marcos; and (c) Proclamation No. 1064 39 issued
by President Gloria Macapagal-Arroyo. We shall proceed to determine their rights to apply for judicial confirmation of
imperfect title under these laws and executive acts.

But first, a peek at the Regalian principle and the power of the executive to reclassify lands of the public domain.

The 1935 Constitution classified lands of the public domain into agricultural, forest or timber. 40 Meanwhile, the 1973
Constitution provided the following divisions: agricultural, industrial or commercial, residential, resettlement, mineral,
timber or forest and grazing lands, and such other classes as may be provided by law, 41 giving the government great
leeway for classification.42 Then the 1987 Constitution reverted to the 1935 Constitution classification with one
addition: national parks.43 Of these, only agricultural lands may be alienated.44 Prior to Proclamation No. 1064 of May
22, 2006, Boracay Island had never been expressly and administratively classified under any of these grand
divisions. Boracay was an unclassified land of the public domain.
The Regalian Doctrine dictates that all lands of the public domain belong to the State, that the State is the source of
any asserted right to ownership of land and charged with the conservation of such patrimony.45 The doctrine has been
consistently adopted under the 1935, 1973, and 1987 Constitutions.

All lands not otherwise appearing to be clearly within private ownership are presumed to belong to the State. 47 Thus,
all lands that have not been acquired from the government, either by purchase or by grant, belong to the State as part
of the inalienable public domain.48 Necessarily, it is up to the State to determine if lands of the public domain will be
disposed of for private ownership. The government, as the agent of the state, is possessed of the plenary power as
the persona in law to determine who shall be the favored recipients of public lands, as well as under what terms they
may be granted such privilege, not excluding the placing of obstacles in the way of their exercise of what otherwise
would be ordinary acts of ownership.49

Our present land law traces its roots to the Regalian Doctrine. Upon the Spanish conquest of the Philippines,
ownership of all lands, territories and possessions in the Philippines passed to the Spanish Crown. 50 The Regalian
doctrine was first introduced in the Philippines through the Laws of the Indies and the Royal Cedulas, which laid the
foundation that "all lands that were not acquired from the Government, either by purchase or by grant, belong to the
public domain."51

The Laws of the Indies was followed by the Ley Hipotecaria or the Mortgage Law of 1893. The Spanish Mortgage
Law provided for the systematic registration of titles and deeds as well as possessory claims. 52

The Royal Decree of 1894 or the Maura Law53 partly amended the Spanish Mortgage Law and the Laws of the
Indies. It established possessory information as the method of legalizing possession of vacant Crown land, under
certain conditions which were set forth in said decree.54 Under Section 393 of the Maura Law, an informacion
posesoria or possessory information title,55 when duly inscribed in the Registry of Property, is converted into a title of
ownership only after the lapse of twenty (20) years of uninterrupted possession which must be actual, public, and
adverse,56 from the date of its inscription.57 However, possessory information title had to be perfected one year after
the promulgation of the Maura Law, or until April 17, 1895. Otherwise, the lands would revert to the State. 58

In sum, private ownership of land under the Spanish regime could only be founded on royal concessions which took
various forms, namely: (1) titulo real or royal grant; (2) concesion especial or special grant; (3) composicion con el
estado or adjustment title; (4) titulo de compra or title by purchase; and (5) informacion posesoria or possessory
information title.59>

The first law governing the disposition of public lands in the Philippines under American rule was embodied in the
Philippine Bill of 1902.60 By this law, lands of the public domain in the Philippine Islands were classified into three (3)
grand divisions, to wit: agricultural, mineral, and timber or forest lands. 61 The act provided for, among others, the
disposal of mineral lands by means of absolute grant (freehold system) and by lease (leasehold system). 62 It also
provided the definition by exclusion of "agricultural public lands." 63 Interpreting the meaning of "agricultural lands"
under the Philippine Bill of 1902, the Court declared in Mapa v. Insular Government:64

x x x In other words, that the phrase "agricultural land" as used in Act No. 926 means those public lands
acquired from Spain which are not timber or mineral lands. x x x65 (Emphasis Ours)

On February 1, 1903, the Philippine Legislature passed Act No. 496, otherwise known as the Land Registration Act.
The act established a system of registration by which recorded title becomes absolute, indefeasible, and
imprescriptible. This is known as the Torrens system.66

Concurrently, on October 7, 1903, the Philippine Commission passed Act No. 926, which was the first Public Land
Act. The Act introduced the homestead system and made provisions for judicial and administrative confirmation of
imperfect titles and for the sale or lease of public lands. It permitted corporations regardless of the nationality of
persons owning the controlling stock to lease or purchase lands of the public domain. 67 Under the Act, open,
continuous, exclusive, and notorious possession and occupation of agricultural lands for the next ten (10) years
preceding July 26, 1904 was sufficient for judicial confirmation of imperfect title.68

On November 29, 1919, Act No. 926 was superseded by Act No. 2874, otherwise known as the second Public Land
Act. This new, more comprehensive law limited the exploitation of agricultural lands to Filipinos and Americans and
citizens of other countries which gave Filipinos the same privileges. For judicial confirmation of title, possession and
occupation en concepto dueño since time immemorial, or since July 26, 1894, was required.69
After the passage of the 1935 Constitution, CA No. 141 amended Act No. 2874 on December 1, 1936. To this day,
CA No. 141, as amended, remains as the existing general law governing the classification and disposition of lands of
the public domain other than timber and mineral lands, 70 and privately owned lands which reverted to the State. 71

Section 48(b) of CA No. 141 retained the requirement under Act No. 2874 of possession and occupation of lands of
the public domain since time immemorial or since July 26, 1894. However, this provision was superseded by
Republic Act (RA) No. 1942,72 which provided for a simple thirty-year prescriptive period for judicial confirmation of
imperfect title. The provision was last amended by PD No. 1073,73 which now provides for possession and occupation
of the land applied for since June 12, 1945, or earlier.74

The issuance of PD No. 89275 on February 16, 1976 discontinued the use of Spanish titles as evidence in land
registration proceedings.76 Under the decree, all holders of Spanish titles or grants should apply for registration of
their lands under Act No. 496 within six (6) months from the effectivity of the decree on February 16, 1976.
Thereafter, the recording of all unregistered lands77 shall be governed by Section 194 of the Revised Administrative
Code, as amended by Act No. 3344.

On June 11, 1978, Act No. 496 was amended and updated by PD No. 1529, known as the Property Registration
Decree. It was enacted to codify the various laws relative to registration of property. 78 It governs registration of lands
under the Torrens system as well as unregistered lands, including chattel mortgages. 79

A positive act declaring land as alienable and disposable is required. In keeping with the presumption of State
ownership, the Court has time and again emphasized that there must be a positive act of the government, such as
an official proclamation,80 declassifying inalienable public land into disposable land for agricultural or other
purposes.81 In fact, Section 8 of CA No. 141 limits alienable or disposable lands only to those lands which have been
"officially delimited and classified."82

The burden of proof in overcoming the presumption of State ownership of the lands of the public domain is on the
person applying for registration (or claiming ownership), who must prove that the land subject of the application is
alienable or disposable.83 To overcome this presumption, incontrovertible evidence must be established that the land
subject of the application (or claim) is alienable or disposable. 84 There must still be a positive act declaring land of the
public domain as alienable and disposable. To prove that the land subject of an application for registration is
alienable, the applicant must establish the existence of a positive act of the government such as a presidential
proclamation or an executive order; an administrative action; investigation reports of Bureau of Lands investigators;
and a legislative act or a statute.85 The applicant may also secure a certification from the government that the land
claimed to have been possessed for the required number of years is alienable and disposable.86

In the case at bar, no such proclamation, executive order, administrative action, report, statute, or certification was
presented to the Court. The records are bereft of evidence showing that, prior to 2006, the portions of Boracay
occupied by private claimants were subject of a government proclamation that the land is alienable and disposable.
Absent such well-nigh incontrovertible evidence, the Court cannot accept the submission that lands occupied by
private claimants were already open to disposition before 2006. Matters of land classification or reclassification
cannot be assumed. They call for proof.87

Ankron and De Aldecoa did not make the whole of Boracay Island, or portions of it, agricultural lands. Private
claimants posit that Boracay was already an agricultural land pursuant to the old cases Ankron v. Government of the
Philippine Islands (1919)88 and De Aldecoa v. The Insular Government (1909).89 These cases were decided under the
provisions of the Philippine Bill of 1902 and Act No. 926. There is a statement in these old cases that "in the absence
of evidence to the contrary, that in each case the lands are agricultural lands until the contrary is shown." 90

Private claimants’ reliance on Ankron and De Aldecoa is misplaced. These cases did not have the effect of converting
the whole of Boracay Island or portions of it into agricultural lands. It should be stressed that the Philippine Bill of
1902 and Act No. 926 merely provided the manner through which land registration courts would classify lands of the
public domain. Whether the land would be classified as timber, mineral, or agricultural depended on proof presented
in each case.

Ankron and De Aldecoa were decided at a time when the President of the Philippines had no power to classify lands
of the public domain into mineral, timber, and agricultural. At that time, the courts were free to make corresponding
classifications in justiciable cases, or were vested with implicit power to do so, depending upon the preponderance of
the evidence.91 This was the Court’s ruling in Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols
Vda. De Palanca v. Republic,92 in which it stated, through Justice Adolfo Azcuna, viz.:

x x x Petitioners furthermore insist that a particular land need not be formally released by an act of the Executive
before it can be deemed open to private ownership, citing the cases of Ramos v. Director of Lands and Ankron v.
Government of the Philippine Islands.

xxxx

Petitioner’s reliance upon Ramos v. Director of Lands and Ankron v. Government is misplaced. These cases were
decided under the Philippine Bill of 1902 and the first Public Land Act No. 926 enacted by the Philippine Commission
on October 7, 1926, under which there was no legal provision vesting in the Chief Executive or President of the
Philippines the power to classify lands of the public domain into mineral, timber and agricultural so that the courts
then were free to make corresponding classifications in justiciable cases, or were vested with implicit power to do so,
depending upon the preponderance of the evidence.93

To aid the courts in resolving land registration cases under Act No. 926, it was then necessary to devise a
presumption on land classification. Thus evolved the dictum in Ankron that "the courts have a right to presume, in the
absence of evidence to the contrary, that in each case the lands are agricultural lands until the contrary is shown." 94

But We cannot unduly expand the presumption in Ankron and De Aldecoa to an argument that all lands of the public
domain had been automatically reclassified as disposable and alienable agricultural lands. By no stretch of
imagination did the presumption convert all lands of the public domain into agricultural lands.

If We accept the position of private claimants, the Philippine Bill of 1902 and Act No. 926 would have automatically
made all lands in the Philippines, except those already classified as timber or mineral land, alienable and disposable
lands. That would take these lands out of State ownership and worse, would be utterly inconsistent with and totally
repugnant to the long-entrenched Regalian doctrine.

The presumption in Ankron and De Aldecoa attaches only to land registration cases brought under the provisions of
Act No. 926, or more specifically those cases dealing with judicial and administrative confirmation of imperfect titles.
The presumption applies to an applicant for judicial or administrative conformation of imperfect title under Act No.
926. It certainly cannot apply to landowners, such as private claimants or their predecessors-in-interest, who failed to
avail themselves of the benefits of Act No. 926. As to them, their land remained unclassified and, by virtue of the
Regalian doctrine, continued to be owned by the State.

In any case, the assumption in Ankron and De Aldecoa was not absolute. Land classification was, in the end,
dependent on proof. If there was proof that the land was better suited for non-agricultural uses, the courts could
adjudge it as a mineral or timber land despite the presumption. In Ankron, this Court stated:

In the case of Jocson vs. Director of Forestry (supra), the Attorney-General admitted in effect that whether the
particular land in question belongs to one class or another is a question of fact. The mere fact that a tract of land has
trees upon it or has mineral within it is not of itself sufficient to declare that one is forestry land and the other, mineral
land. There must be some proof of the extent and present or future value of the forestry and of the minerals. While,
as we have just said, many definitions have been given for "agriculture," "forestry," and "mineral" lands, and that in
each case it is a question of fact, we think it is safe to say that in order to be forestry or mineral land the proof must
show that it is more valuable for the forestry or the mineral which it contains than it is for agricultural purposes. (Sec.
7, Act No. 1148.) It is not sufficient to show that there exists some trees upon the land or that it bears some mineral.
Land may be classified as forestry or mineral today, and, by reason of the exhaustion of the timber or mineral, be
classified as agricultural land tomorrow. And vice-versa, by reason of the rapid growth of timber or the discovery of
valuable minerals, lands classified as agricultural today may be differently classified tomorrow. Each case must be
decided upon the proof in that particular case, having regard for its present or future value for one or the
other purposes. We believe, however, considering the fact that it is a matter of public knowledge that a majority of
the lands in the Philippine Islands are agricultural lands that the courts have a right to presume, in the absence of
evidence to the contrary, that in each case the lands are agricultural lands until the contrary is shown. Whatever the
land involved in a particular land registration case is forestry or mineral land must, therefore, be a matter of
proof. Its superior value for one purpose or the other is a question of fact to be settled by the proof in each
particular case. The fact that the land is a manglar [mangrove swamp] is not sufficient for the courts to decide
whether it is agricultural, forestry, or mineral land. It may perchance belong to one or the other of said classes of land.
The Government, in the first instance, under the provisions of Act No. 1148, may, by reservation, decide for itself
what portions of public land shall be considered forestry land, unless private interests have intervened before such
reservation is made. In the latter case, whether the land is agricultural, forestry, or mineral, is a question of proof.
Until private interests have intervened, the Government, by virtue of the terms of said Act (No. 1148), may decide for
itself what portions of the "public domain" shall be set aside and reserved as forestry or mineral land. (Ramos vs.
Director of Lands, 39 Phil. 175; Jocson vs. Director of Forestry, supra)95 (Emphasis ours)

Since 1919, courts were no longer free to determine the classification of lands from the facts of each case, except
those that have already became private lands.96 Act No. 2874, promulgated in 1919 and reproduced in Section 6 of
CA No. 141, gave the Executive Department, through the President, the exclusive prerogative to classify or
reclassify public lands into alienable or disposable, mineral or forest. 96-a Since then, courts no longer had the
authority, whether express or implied, to determine the classification of lands of the public domain. 97

Here, private claimants, unlike the Heirs of Ciriaco Tirol who were issued their title in 1933, 98 did not present a
justiciable case for determination by the land registration court of the property’s land classification. Simply put, there
was no opportunity for the courts then to resolve if the land the Boracay occupants are now claiming were agricultural
lands. When Act No. 926 was supplanted by Act No. 2874 in 1919, without an application for judicial confirmation
having been filed by private claimants or their predecessors-in-interest, the courts were no longer authorized to
determine the property’s land classification. Hence, private claimants cannot bank on Act No. 926.

We note that the RTC decision99 in G.R. No. 167707 mentioned Krivenko v. Register of Deeds of Manila,100 which was
decided in 1947 when CA No. 141, vesting the Executive with the sole power to classify lands of the public domain
was already in effect. Krivenko cited the old cases Mapa v. Insular Government,101 De Aldecoa v. The Insular
Government,102 and Ankron v. Government of the Philippine Islands.103

Krivenko, however, is not controlling here because it involved a totally different issue. The pertinent issue
in Krivenko was whether residential lots were included in the general classification of agricultural lands; and if so,
whether an alien could acquire a residential lot. This Court ruled that as an alien, Krivenko was prohibited by the 1935
Constitution104 from acquiring agricultural land, which included residential lots. Here, the issue is whether unclassified
lands of the public domain are automatically deemed agricultural.

Notably, the definition of "agricultural public lands" mentioned in Krivenko relied on the old cases decided prior to the
enactment of Act No. 2874, including Ankron and De Aldecoa.105 As We have already stated, those cases cannot
apply here, since they were decided when the Executive did not have the authority to classify lands as agricultural,
timber, or mineral.

Private claimants’ continued possession under Act No. 926 does not create a presumption that the land is
alienable. Private claimants also contend that their continued possession of portions of Boracay Island for the
requisite period of ten (10) years under Act No. 926106 ipso facto converted the island into private ownership. Hence,
they may apply for a title in their name.

A similar argument was squarely rejected by the Court in Collado v. Court of Appeals.107 Collado, citing the separate
opinion of now Chief Justice Reynato S. Puno in Cruz v. S ;9oecretary of Environment and Natural Resources,107-
a ruled:

"Act No. 926, the first Public Land Act, was passed in pursuance of the provisions of the Philippine Bill of 1902. The
law governed the disposition of lands of the public domain. It prescribed rules and regulations for the homesteading,
selling and leasing of portions of the public domain of the Philippine Islands, and prescribed the terms and conditions
to enable persons to perfect their titles to public lands in the Islands. It also provided for the "issuance of patents to
certain native settlers upon public lands," for the establishment of town sites and sale of lots therein, for the
completion of imperfect titles, and for the cancellation or confirmation of Spanish concessions and grants in the
Islands." In short, the Public Land Act operated on the assumption that title to public lands in the Philippine Islands
remained in the government; and that the government’s title to public land sprung from the Treaty of Paris and other
subsequent treaties between Spain and the United States. The term "public land" referred to all lands of the public
domain whose title still remained in the government and are thrown open to private appropriation and settlement, and
excluded the patrimonial property of the government and the friar lands."
Thus, it is plain error for petitioners to argue that under the Philippine Bill of 1902 and Public Land Act No.
926, mere possession by private individuals of lands creates the legal presumption that the lands are
alienable and disposable.108 (Emphasis Ours)

Except for lands already covered by existing titles, Boracay was an unclassified land of the public domain
prior to Proclamation No. 1064. Such unclassified lands are considered public forest under PD No. 705. The
DENR109 and the National Mapping and Resource Information Authority 110 certify that Boracay Island is an
unclassified land of the public domain.

PD No. 705 issued by President Marcos categorized all unclassified lands of the public domain as public forest.
Section 3(a) of PD No. 705 defines a public forest as "a mass of lands of the public domain which has not been the
subject of the present system of classification for the determination of which lands are needed for forest purpose and
which are not." Applying PD No. 705, all unclassified lands, including those in Boracay Island, are ipso
facto considered public forests. PD No. 705, however, respects titles already existing prior to its effectivity.

The Court notes that the classification of Boracay as a forest land under PD No. 705 may seem to be out of touch
with the present realities in the island. Boracay, no doubt, has been partly stripped of its forest cover to pave the way
for commercial developments. As a premier tourist destination for local and foreign tourists, Boracay appears more of
a commercial island resort, rather than a forest land.

Nevertheless, that the occupants of Boracay have built multi-million peso beach resorts on the island;111 that the
island has already been stripped of its forest cover; or that the implementation of Proclamation No. 1064 will destroy
the island’s tourism industry, do not negate its character as public forest.

Forests, in the context of both the Public Land Act and the Constitution 112 classifying lands of the public domain into
"agricultural, forest or timber, mineral lands, and national parks," do not necessarily refer to large tracts of wooded
land or expanses covered by dense growths of trees and underbrushes. 113 The discussion in Heirs of Amunategui v.
Director of Forestry114 is particularly instructive:

A forested area classified as forest land of the public domain does not lose such classification simply because
loggers or settlers may have stripped it of its forest cover. Parcels of land classified as forest land may actually be
covered with grass or planted to crops by kaingin cultivators or other farmers. "Forest lands" do not have to be on
mountains or in out of the way places. Swampy areas covered by mangrove trees, nipa palms, and other trees
growing in brackish or sea water may also be classified as forest land. The classification is descriptive of its legal
nature or status and does not have to be descriptive of what the land actually looks like. Unless and until the
land classified as "forest" is released in an official proclamation to that effect so that it may form part of the disposable
agricultural lands of the public domain, the rules on confirmation of imperfect title do not apply.115 (Emphasis supplied)

There is a big difference between "forest" as defined in a dictionary and "forest or timber land" as a classification of
lands of the public domain as appearing in our statutes. One is descriptive of what appears on the land while the
other is a legal status, a classification for legal purposes. 116 At any rate, the Court is tasked to determine
the legal status of Boracay Island, and not look into its physical layout. Hence, even if its forest cover has been
replaced by beach resorts, restaurants and other commercial establishments, it has not been automatically converted
from public forest to alienable agricultural land.

Private claimants cannot rely on Proclamation No. 1801 as basis for judicial confirmation of imperfect title.
The proclamation did not convert Boracay into an agricultural land. However, private claimants argue that
Proclamation No. 1801 issued by then President Marcos in 1978 entitles them to judicial confirmation of imperfect
title. The Proclamation classified Boracay, among other islands, as a tourist zone. Private claimants assert that, as a
tourist spot, the island is susceptible of private ownership.

Proclamation No. 1801 or PTA Circular No. 3-82 did not convert the whole of Boracay into an agricultural land. There
is nothing in the law or the Circular which made Boracay Island an agricultural land. The reference in Circular No. 3-
82 to "private lands"117 and "areas declared as alienable and disposable" 118 does not by itself classify the entire island
as agricultural. Notably, Circular No. 3-82 makes reference not only to private lands and areas but also to public
forested lands. Rule VIII, Section 3 provides:

No trees in forested private lands may be cut without prior authority from the PTA. All forested areas in public lands
are declared forest reserves. (Emphasis supplied)
Clearly, the reference in the Circular to both private and public lands merely recognizes that the island can be
classified by the Executive department pursuant to its powers under CA No. 141. In fact, Section 5 of the Circular
recognizes the then Bureau of Forest Development’s authority to declare areas in the island as alienable and
disposable when it provides:

Subsistence farming, in areas declared as alienable and disposable by the Bureau of Forest Development.

Therefore, Proclamation No. 1801 cannot be deemed the positive act needed to classify Boracay Island as alienable
and disposable land. If President Marcos intended to classify the island as alienable and disposable or forest, or both,
he would have identified the specific limits of each, as President Arroyo did in Proclamation No. 1064. This was not
done in Proclamation No. 1801.

The Whereas clauses of Proclamation No. 1801 also explain the rationale behind the declaration of Boracay Island,
together with other islands, caves and peninsulas in the Philippines, as a tourist zone and marine reserve to be
administered by the PTA – to ensure the concentrated efforts of the public and private sectors in the development of
the areas’ tourism potential with due regard for ecological balance in the marine environment. Simply put, the
proclamation is aimed at administering the islands for tourism and ecological purposes. It does not address the
areas’ alienability.119

More importantly, Proclamation No. 1801 covers not only Boracay Island, but sixty-four (64) other islands, coves, and
peninsulas in the Philippines, such as Fortune and Verde Islands in Batangas, Port Galera in Oriental Mindoro,
Panglao and Balicasag Islands in Bohol, Coron Island, Puerto Princesa and surrounding areas in Palawan, Camiguin
Island in Cagayan de Oro, and Misamis Oriental, to name a few. If the designation of Boracay Island as tourist zone
makes it alienable and disposable by virtue of Proclamation No. 1801, all the other areas mentioned would likewise
be declared wide open for private disposition. That could not have been, and is clearly beyond, the intent of the
proclamation.

It was Proclamation No. 1064 of 2006 which positively declared part of Boracay as alienable and opened the
same to private ownership. Sections 6 and 7 of CA No. 141120 provide that it is only the President, upon the
recommendation of the proper department head, who has the authority to classify the lands of the public domain into
alienable or disposable, timber and mineral lands. 121

In issuing Proclamation No. 1064, President Gloria Macapagal-Arroyo merely exercised the authority granted to her
to classify lands of the public domain, presumably subject to existing vested rights. Classification of public lands is the
exclusive prerogative of the Executive Department, through the Office of the President. Courts have no authority to
do so.122 Absent such classification, the land remains unclassified until released and rendered open to disposition.123

Proclamation No. 1064 classifies Boracay into 400 hectares of reserved forest land and 628.96 hectares of
agricultural land. The Proclamation likewise provides for a 15-meter buffer zone on each side of the center line of
roads and trails, which are reserved for right of way and which shall form part of the area reserved for forest land
protection purposes.

Contrary to private claimants’ argument, there was nothing invalid or irregular, much less unconstitutional, about the
classification of Boracay Island made by the President through Proclamation No. 1064. It was within her authority to
make such classification, subject to existing vested rights.

Proclamation No. 1064 does not violate the Comprehensive Agrarian Reform Law. Private claimants further
assert that Proclamation No. 1064 violates the provision of the Comprehensive Agrarian Reform Law (CARL) or RA
No. 6657 barring conversion of public forests into agricultural lands. They claim that since Boracay is a public forest
under PD No. 705, President Arroyo can no longer convert it into an agricultural land without running afoul of Section
4(a) of RA No. 6657, thus:

SEC. 4. Scope. – The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of tenurial arrangement
and commodity produced, all public and private agricultural lands as provided in Proclamation No. 131 and Executive
Order No. 229, including other lands of the public domain suitable for agriculture.

More specifically, the following lands are covered by the Comprehensive Agrarian Reform Program:
(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture.
No reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of this Act
until Congress, taking into account ecological, developmental and equity considerations, shall have determined by
law, the specific limits of the public domain.

That Boracay Island was classified as a public forest under PD No. 705 did not bar the Executive from later
converting it into agricultural land. Boracay Island still remained an unclassified land of the public domain despite PD
No. 705.

In Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols v. Republic, 124 the Court stated that
unclassified lands are public forests.

While it is true that the land classification map does not categorically state that the islands are public forests,
the fact that they were unclassified lands leads to the same result. In the absence of the classification as mineral
or timber land, the land remains unclassified land until released and rendered open to disposition. 125 (Emphasis
supplied)

Moreover, the prohibition under the CARL applies only to a "reclassification" of land. If the land had never been
previously classified, as in the case of Boracay, there can be no prohibited reclassification under the agrarian law. We
agree with the opinion of the Department of Justice126 on this point:

Indeed, the key word to the correct application of the prohibition in Section 4(a) is the word "reclassification." Where
there has been no previous classification of public forest [referring, we repeat, to the mass of the public domain which
has not been the subject of the present system of classification for purposes of determining which are needed for
forest purposes and which are not] into permanent forest or forest reserves or some other forest uses under the
Revised Forestry Code, there can be no "reclassification of forest lands" to speak of within the meaning of Section
4(a).

Thus, obviously, the prohibition in Section 4(a) of the CARL against the reclassification of forest lands to agricultural
lands without a prior law delimiting the limits of the public domain, does not, and cannot, apply to those lands of the
public domain, denominated as "public forest" under the Revised Forestry Code, which have not been previously
determined, or classified, as needed for forest purposes in accordance with the provisions of the Revised Forestry
Code.127

Private claimants are not entitled to apply for judicial confirmation of imperfect title under CA No. 141.
Neither do they have vested rights over the occupied lands under the said law. There are two requisites for
judicial confirmation of imperfect or incomplete title under CA No. 141, namely: (1) open, continuous, exclusive, and
notorious possession and occupation of the subject land by himself or through his predecessors-in-interest under
a bona fide claim of ownership since time immemorial or from June 12, 1945; and (2) the classification of the land as
alienable and disposable land of the public domain. 128

As discussed, the Philippine Bill of 1902, Act No. 926, and Proclamation No. 1801 did not convert portions of Boracay
Island into an agricultural land. The island remained an unclassified land of the public domain and, applying the
Regalian doctrine, is considered State property.

Private claimants’ bid for judicial confirmation of imperfect title, relying on the Philippine Bill of 1902, Act No. 926, and
Proclamation No. 1801, must fail because of the absence of the second element of alienable and disposable land.
Their entitlement to a government grant under our present Public Land Act presupposes that the land possessed and
applied for is already alienable and disposable. This is clear from the wording of the law itself.129 Where the land is not
alienable and disposable, possession of the land, no matter how long, cannot confer ownership or possessory
rights.130

Neither may private claimants apply for judicial confirmation of imperfect title under Proclamation No. 1064, with
respect to those lands which were classified as agricultural lands. Private claimants failed to prove the first element of
open, continuous, exclusive, and notorious possession of their lands in Boracay since June 12, 1945.

We cannot sustain the CA and RTC conclusion in the petition for declaratory relief that private claimants complied
with the requisite period of possession.
The tax declarations in the name of private claimants are insufficient to prove the first element of possession. We
note that the earliest of the tax declarations in the name of private claimants were issued in 1993. Being of recent
dates, the tax declarations are not sufficient to convince this Court that the period of possession and occupation
commenced on June 12, 1945.

Private claimants insist that they have a vested right in Boracay, having been in possession of the island for a long
time. They have invested millions of pesos in developing the island into a tourist spot. They say their continued
possession and investments give them a vested right which cannot be unilaterally rescinded by Proclamation No.
1064.

The continued possession and considerable investment of private claimants do not automatically give them a vested
right in Boracay. Nor do these give them a right to apply for a title to the land they are presently occupying. This Court
is constitutionally bound to decide cases based on the evidence presented and the laws applicable. As the law and
jurisprudence stand, private claimants are ineligible to apply for a judicial confirmation of title over their occupied
portions in Boracay even with their continued possession and considerable investment in the island.

One Last Note

The Court is aware that millions of pesos have been invested for the development of Boracay Island, making it a by-
word in the local and international tourism industry. The Court also notes that for a number of years, thousands of
people have called the island their home. While the Court commiserates with private claimants’ plight, We are bound
to apply the law strictly and judiciously. This is the law and it should prevail. Ito ang batas at ito ang dapat umiral.

All is not lost, however, for private claimants. While they may not be eligible to apply for judicial confirmation of
imperfect title under Section 48(b) of CA No. 141, as amended, this does not denote their automatic ouster from the
residential, commercial, and other areas they possess now classified as agricultural. Neither will this mean the loss of
their substantial investments on their occupied alienable lands. Lack of title does not necessarily mean lack of right to
possess.

For one thing, those with lawful possession may claim good faith as builders of improvements. They can take steps to
preserve or protect their possession. For another, they may look into other modes of applying for original registration
of title, such as by homestead131 or sales patent,132 subject to the conditions imposed by law.

More realistically, Congress may enact a law to entitle private claimants to acquire title to their occupied lots or to
exempt them from certain requirements under the present land laws. There is one such bill 133 now pending in the
House of Representatives. Whether that bill or a similar bill will become a law is for Congress to decide.

In issuing Proclamation No. 1064, the government has taken the step necessary to open up the island to private
ownership. This gesture may not be sufficient to appease some sectors which view the classification of the island
partially into a forest reserve as absurd. That the island is no longer overrun by trees, however, does not becloud the
vision to protect its remaining forest cover and to strike a healthy balance between progress and ecology. Ecological
conservation is as important as economic progress.

To be sure, forest lands are fundamental to our nation’s survival. Their promotion and protection are not just fancy
rhetoric for politicians and activists. These are needs that become more urgent as destruction of our environment
gets prevalent and difficult to control. As aptly observed by Justice Conrado Sanchez in 1968 in Director of Forestry
v. Munoz:134

The view this Court takes of the cases at bar is but in adherence to public policy that should be followed with respect
to forest lands. Many have written much, and many more have spoken, and quite often, about the pressing need for
forest preservation, conservation, protection, development and reforestation. Not without justification. For, forests
constitute a vital segment of any country's natural resources. It is of common knowledge by now that absence of the
necessary green cover on our lands produces a number of adverse or ill effects of serious proportions. Without the
trees, watersheds dry up; rivers and lakes which they supply are emptied of their contents. The fish disappear.
Denuded areas become dust bowls. As waterfalls cease to function, so will hydroelectric plants. With the rains, the
fertile topsoil is washed away; geological erosion results. With erosion come the dreaded floods that wreak havoc and
destruction to property – crops, livestock, houses, and highways – not to mention precious human lives. Indeed, the
foregoing observations should be written down in a lumberman’s decalogue. 135
WHEREFORE, judgment is rendered as follows:

1. The petition for certiorari in G.R. No. 167707 is GRANTED and the Court of Appeals Decision in CA-G.R. CV No.
71118 REVERSED AND SET ASIDE.

2. The petition for certiorari in G.R. No. 173775 is DISMISSED for lack of merit.

SO ORDERED.

RUBEN T. REYES
Associate Justice

G.R. No. 139167 June 29, 2005

HEIRS OF WILFREDO C. DELOS SANTOS, namely: MA. GRACIA DELOS SANTOS, RAYMOND C. DELOS
SANTOS and minors RICHARD C. DELOS, WILFRED C. DELOS SANTOS, ARNOLD C. DELOS SANTOS,
EDWARD C. DELOS SANTOS and ALFREDO C. DELOS SANTOS, duly represented by their mother, MA.
GRACIA C. DELOS SANTOS, petitioners,
vs.
FELISA DEL ROSARIO and THE COURT OF APPEALS, respondents.

DECISION

CARPIO, J.:

The Case

This petition for review1 assails the 26 January 1999 and 21 June 1999 Resolutions 2 of the Court of Appeals in CA-
G.R. SP No. 50420. The Court of Appeals upheld the Orders of the Regional Trial Court, Branch 6, Legazpi City ("trial
court") dismissing the petition for relief of Wilfredo C. Delos Santos and Ma. Gracia Delos Santos ("petitioners") and
denying their motion for reconsideration.

The Antecedents

The present controversy arose from a Complaint for replevin and damages filed with the Regional Trial Court of
Legazpi City by respondent Felisa L. Del Rosario ("respondent") against Wilfredo C. Delos Santos ("Wilfredo"), doing
business under the name Rich-mon Pawnshop.3

The Complaint, docketed as Civil Case No. 8836,4 alleged among others, that respondent owned several pieces of
jewelry valued at approximately ₱250,000. Respondent claimed that she delivered these pieces of jewelry for sale on
commission to one Lolita Sanio ("Sanio"), with the condition that respondent should retain the title or ownership over
the jewelry until its total value have been fully paid to respondent. Respondent further claimed that Sanio did not
return or pay the value of the jewelry despite demand to do so. Thereafter, respondent learned that the pieces of
jewelry were pawned to Rich-mon Pawnshop. Respondent contended that Rich-mon Pawnshop was wrongfully
retaining her jewelry since it had knowledge that these were pledged without her prior consent and authority.

On 10 November 1993, Ma. Gracia Delos Santos ("Grace"),5 owner and operator of Rich-mon Pawnshop,6 filed the
Answer7 instead of Wilfredo. Grace claimed that she was a holder for value and in good faith of the jewelry because
she had no knowledge of any defect or flaw in the title of the pawner. Grace alleged that a certain Gloria Rogando
was the holder of the pawn tickets entrusted by the pawner Sanio. Grace could not release the pawned jewelry to Del
Rosario unless the principal obligation would be paid.

On 13 April 1994, respondent filed an Amended Complaint impleading Grace as defendant.

On 27 March 1998, the trial court rendered a Decision 8 in favor of respondent. The trial court held that respondent
proved that she owned the jewelry and that the pawnshop owners unlawfully deprived her of its possession. The trial
court was convinced that respondent entrusted the jewelry to Sanio for sale on commission with the ownership
remaining with respondent until full payment of its value. The trial court found that the agreement was for Sanio to sell
the jewelry within 30 days. Should the pieces of jewelry be sold, respondent was to deposit or encash the checks
issued by Sanio. If the jewelry were not sold, they should be returned to respondent. The trial court did not give
credence to Grace’s claim of good faith in possessing the jewelry.

The trial court disposed as follows:

WHEREFORE, premises considered, decision is hereby rendered in favor of the plaintiff and against the defendants
ordering the defendants to deliver to the plaintiff all the jewelries described in the pawn tickets marked as Exhibits
"A", "B", "C", "D", "E" and "F", and in case delivery cannot be had, to pay plaintiff the value thereof of ₱250,000.00
plus ₱25,000.00 for attorney’s fees, ₱5,000.00 as litigation expenses and to pay costs.

SO ORDERED.9

Thereafter, the trial court furnished Atty. Oliver Olaybal ("Atty. Olaybal"), then counsel for petitioners Wilfredo and
Grace, a copy of the decision by registered mail at his then office address at Pecson Building, Rizal Street, Legazpi
City.

From 29 March 1998 until 20 April 1998, the lone office clerk of Atty. Olaybal, Julie Espinosa ("Espinosa"), took a
leave of absence from work.

From 2 to 16 April 1998, Atty. Olaybal was sick with influenza and was unable to go to his office. Since there was no
one to man the law office of Atty. Olaybal, it was closed from 2 to 16 April 1998.

Meanwhile, on 2 April 1998, since the office of Atty. Olaybal was closed, the postman delivered the copy of the trial
court’s decision to Bernadeth Faye Alamares ("Alamares"). Alamares was a clerk of Asaphil Corporation whose office
is adjacent to Atty. Olaybal’s. Alamares received the Decision and signed the corresponding registry return card.

On 17 April 1998, a Friday, Atty. Olaybal reported for work. Alamares subsequently turned over the mails she
received, including the decision, to Atty. Olaybal.

Atty. Olaybal asked from Alamares the exact date when she received the Decision. Alamares replied that to her
recollection it was before the holidays, referring to 9 April 1998 (Bataan Day). Atty. Olaybal concluded from Alamares’
recollection that she received the decision on 8 April 1998 and mistakenly thought that the end of the reglementary
period to perfect an appeal fell on 23 April 1998.

On 20 April 1998, the next business day, Atty. Olaybal filed with the trial court a Notice of Appeal of the decision.

On 30 April 1998, Atty. Olaybal received an Order dated 23 April 1998 dismissing the appeal for being filed out of
time.

On 8 May 1998, Atty. Olaybal filed a Petition for Relief 10 pleading mistake and excusable negligence for failure to
perfect an appeal within the reglementary period and praying that the appeal be given due course.

On 25 September 1998, the trial court issued two Orders dismissing the Petition for Relief11 and issuing a Writ of
Execution.12

On 1 October 1998, petitioners filed a motion for reconsideration of the Orders, which the trial court denied in an
Order dated 18 November 1998.13

Petitioners filed with the Court of Appeals a petition for certiorari14 assailing the Orders of the trial court dismissing the
petition for relief and denying the motion for reconsideration.
In its Resolution dated 26 January 1999,15 the Court of Appeals dismissed the petition for certiorari and affirmed the
Orders of the trial court. Petitioners filed a motion for reconsideration, which the Court of Appeals denied in its
Resolution dated 21 June 1999.16

Hence, this petition.

Meanwhile, Wilfredo died on 1 May 1999.17 Thus, his heirs substituted him in this petition.18

The Ruling of the Court of Appeals

The Court of Appeals upheld the trial court’s findings and ruled that the assailed orders of the trial court are in accord
with jurisprudence. The Court of Appeals held that the trial court issued the orders in the exercise of its sound
discretion. Moreover, the petitioners failed to establish the existence of the requirements under Rule 38 of the Rules
of Court for the granting of relief.

The Issues

In their Memorandum, petitioners raise the following issues for resolution:

WHETHER THERE WAS VALID SERVICE OF THE LOWER COURT’S DECISION DATED 27 MARCH 1998 ON
PETITIONERS OR THEIR COUNSEL, WHICH WAS COURSED THROUGH M[S]. ALAMARES, AN EMPLOYEE OF
ASAPHIL CORPORATION WITH OFFICE ADJACENT TO, HENCE A NEIGHBOR OF PETITIONERS’ COUNSEL.

II

WHETHER THE MISTAKE OR NEGLIGENCE BY NEIGHBOR MS. ALAMARES VIS-À-VIS HER RECOLLECTION
OF HER RECEIPT OF THE LOWER COURT’S DECISION IS BINDING ON PETITIONERS AND THEIR COUNSEL.

III

ASSUMING ARGUENDO THAT IT WAS BINDING, WHETHER MS. ALAMARES’ FAILED RECOLLECTION OF
ACTUAL RECEIPT OF THE DECISION CONSTITUTES MISTAKE OR EXCUSABLE NEGLIGENCE.

IV

WHETHER UNDER THESE CIRCUMSTANCES, PETITIONERS’ COUNSEL’S ERRONEOUS OBTENTION OF

INFORMATION FROM MS. ALAMARES CONSTITUTES MISTAKE OR EXCUSABLE NEGLIGENCE
WARRANTING RELIEF FROM JUDGMENT.

WHETHER BASED ON THE FOREGOING CIRCUMSTANCES AND THE STRONG MERIT OF PETITIONERS’
APPEAL, THE HARSH APPLICATION OF THE RULE ON APPEAL PERIOD BE SET ASIDE BY THIS COURT IN
THE EXERCISE OF ITS POWER TO INTERPRET LIBERALLY THE RULES.19

The fundamental issue in this case is whether the service of the trial court’s decision was valid and binding on
petitioners.

The Court’s Ruling

We grant the petition.

We agree with petitioners’ contention in their Memorandum 20 that there was no valid service of the trial court’s 27
March 1998 decision. The pertinent provisions of the Rules of Court governing service of decisions are clear.

Section 2 of Rule 13 provides:

SEC. 2. Filing and service, defined. – xxx

Service is the act of providing a party with a copy of the pleading or paper concerned. If any party has
appeared by counsel, service upon him shall be made upon his counsel or one of them, unless service upon
the party himself is ordered by the court. xxx (Emphasis supplied)

Section 7 of Rule 13 provides:

SEC. 7. Service by mail. – Service by registered mail shall be made by depositing the copy in the office, in a sealed
envelope, plainly addressed to the party or his counsel at his office, if known, otherwise at his residence, if
known, with postage fully prepaid, and with instructions to the postmaster to return the mail to the sender after ten
(10) days if undelivered. If no registry service is available in the locality of either the sender or the addressee, service
may be done by ordinary mail. (Emphasis supplied)

Section 9 of Rule 13 provides:

SEC. 9. Service of judgments, final orders, or resolutions. – Judgments, final orders or resolutions shall be
served either personally or by registered mail. When a party summoned by publication has failed to appear in the
action, judgments, final orders or resolutions against him shall be served upon him also by publication at the expense
of the prevailing party. (emphasis supplied)

Therefore, service of decisions must be made to the counsel on record if a party appears by counsel. Service of
decisions by registered mail should be made by depositing the copy of the decision in the office, in a sealed
envelope, addressed to the party’s counsel at his office.

In Tuazon v. Molina,21 the Court held that the decision of the trial court did not become final and executory where
service of copy of the decision was not made on counsel’s associates or at the party’s or counsel’s residence with a
person of sufficient discretion to receive it.22 In Tuazon, the Deputy Sheriff attempted to serve a copy of the decision
on Josephine A. Serrano who was not an employee of counsel but an Assistant Manager of a business firm, the
Prompt Service.

In PLDT v. NLRC, et al.,23 the Court held that service made by the bailiff at the ground floor of the PLDT building
instead of at the 9th floor, which was the recorded address of petitioner’s counsel, is not a valid service of the
decision. "It was only when the [PLDT] Legal Services Division actually received a copy of the decision xxx that a
proper and valid service may be deemed to have been made." 24

In this case, the postman, Ricardo Berango ("Berango"), served a copy of the trial court’s decision on Alamares who
was neither an associate nor employee of Atty. Olaybal. The records show that Alamares was then an employee of
Asaphil Corporation whose office is adjacent to Atty. Olaybal’s. There is nothing in the records showing that Atty.
Olaybal authorized either Alamares or Asaphil Corporation to receive mails addressed to him or his law office.

Atty. Olaybal disputed Berango’s testimony that he had an arrangement with Atty. Olaybal to deliver to Alamares
mails addressed to Atty. Olaybal in case of his absence. Atty. Olaybal testified that he did not even know the postman
Berango personally and saw him for the first time during the trial.

Moreover, Alamares herself executed a sworn statement25 that Berango requested her to receive the trial court’s
decision on behalf of Espinosa, the clerk of Atty. Olaybal.

If Alamares had the authority to receive mails on behalf of Atty. Olaybal, she could have easily noted down and given
special attention to the exact date when she actually received the copy of the trial court’s decision. However, the
records are bereft of any showing that Alamares was aware of the significance of such a date to Atty. Olaybal.
Alamares conveniently stated that she could not recall anymore the particular date when she received the decision.
Alamares merely told Atty. Olaybal that she received the trial court’s decision before the holidays, or before Bataan
Day (9 April 1998).

Furthermore, Atty. Olaybal clearly did not intend to delay the proceedings in the present case. After receiving the
copy of the decision on 17 April 1998, Atty. Olaybal filed the notice of appeal on the next working day which was 20
April 1998. If Atty. Olaybal intended to delay the proceedings, he could have waited until 23 April 1998 which would
have been the last day for filing the notice of appeal reckoned from 8 April 1998 based on Alamares’ mistaken
recollection.

That Atty. Olaybal had the whole day of 17 April 1998 to verify when Alamares received the decision and to file the
notice of appeal does not validate the void service of the decision.

Since there was no valid service of the trial court’s decision on Alamares on 2 April 1998, we shall reckon the fifteen-
day period within which to perfect the appeal from 17 April 1998, when Atty. Olaybal actually received a copy of the
trial court’s decision. Consequently, Atty. Olaybal filed the notice of appeal within the reglementary period when he
filed it on 20 April 1998. The trial court’s decision dated 27 March 1998 did not become final and executory.
Accordingly, the payment made by petitioners to respondent in satisfaction of the judgment of the trial court is void.

WHEREFORE, we GRANT the instant petition. We REVERSE the Resolutions of the Court of Appeals dated 26
January 1999 and 21 June 1999 in CA-G.R. SP No. 50420. We ANNUL the Order dated 23 April 1998 of the
Regional Trial court, Branch 6, Legaspi City, in Civil Case No. 8836 dismissing petitioners’ appeal. We REINSTATE
the Notice of Appeal filed on 20 April 1998 by Atty. Oliver Olaybal as filed within the reglementary period. We ORDER
respondent Felisa Del Rosario to return immediately to petitioners the payment made in satisfaction of the trial court’s
judgment.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Quisumbing, Ynares-Santiago, and Azcuna, JJ., concur.

G.R. No. 78742 July 14, 1989

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D. GOMEZ, GERARDO B.

ALARCIO, FELIPE A. GUICO, JR., BERNARDO M. ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T. GUICO,
FELISA I. LLAMIDO, FAUSTO J. SALVA, REYNALDO G. ESTRADA, FELISA C. BAUTISTA, ESMENIA J. CABE,
TEODORO B. MADRIAGA, AUREA J. PRESTOSA, EMERENCIANA J. ISLA, FELICISIMA C. ARRESTO,
CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO, CIRILA A. JOSE & NAPOLEON S.
FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.

G.R. No. 79310 July 14, 1989

ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS JEREZA, HERMINIGILDO GUSTILO,
PAULINO D. TOLENTINO and PLANTERS' COMMITTEE, INC., Victorias Mill District, Victorias, Negros
Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM COUNCIL, respondents.

G.R. No. 79744 July 14, 1989

INOCENTES PABICO, petitioner,

vs.
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, HON. JOKER
ARROYO, EXECUTIVE SECRETARY OF THE OFFICE OF THE PRESIDENT, and Messrs. SALVADOR
TALENTO, JAIME ABOGADO, CONRADO AVANCENA and ROBERTO TAAY, respondents.

G.R. No. 79777 July 14, 1989

NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,
vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND BANK OF THE
PHILIPPINES, respondents.

CRUZ, J.:

In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules for his life on his way to
Mycenae after performing his eleventh labor. The two wrestled mightily and Hercules flung his adversary to the
ground thinking him dead, but Antaeus rose even stronger to resume their struggle. This happened several times to
Hercules' increasing amazement. Finally, as they continued grappling, it dawned on Hercules that Antaeus was the
son of Gaea and could never die as long as any part of his body was touching his Mother Earth. Thus forewarned,
Hercules then held Antaeus up in the air, beyond the reach of the sustaining soil, and crushed him to death.

Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch even the powerful Antaeus
weakened and died.

The cases before us are not as fanciful as the foregoing tale. But they also tell of the elemental forces of life and
death, of men and women who, like Antaeus need the sustaining strength of the precious earth to stay alive.

"Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of this precious resource
among our people. But it is more than a slogan. Through the brooding centuries, it has become a battle-cry
dramatizing the increasingly urgent demand of the dispossessed among us for a plot of earth as their place in the
sun.

Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure the well-being and
economic security of all the people," especially the less privileged. In 1973, the new Constitution affirmed this goal
1

adding specifically that "the State shall regulate the acquisition, ownership, use, enjoyment and disposition of private
property and equitably diffuse property ownership and profits." Significantly, there was also the specific injunction to
2

"formulate and implement an agrarian reform program aimed at emancipating the tenant from the bondage of the
soil."
3

The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also adopted one whole and
separate Article XIII on Social Justice and Human Rights, containing grandiose but undoubtedly sincere provisions for
the uplift of the common people. These include a call in the following words for the adoption by the State of an
agrarian reform program:

SEC. 4. The State shall, by law, undertake an agrarian reform program founded on the right of
farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till
or, in the case of other farmworkers, to receive a just share of the fruits thereof. To this end, the
State shall encourage and undertake the just distribution of all agricultural lands, subject to such
priorities and reasonable retention limits as the Congress may prescribe, taking into account
ecological, developmental, or equity considerations and subject to the payment of just
compensation. In determining retention limits, the State shall respect the right of small landowners.
The State shall further provide incentives for voluntary land-sharing.

Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code, had already been enacted by
the Congress of the Philippines on August 8, 1963, in line with the above-stated principles. This was substantially
superseded almost a decade later by P.D. No. 27, which was promulgated on October 21, 1972, along with martial
law, to provide for the compulsory acquisition of private lands for distribution among tenant-farmers and to specify
maximum retention limits for landowners.

The people power revolution of 1986 did not change and indeed even energized the thrust for agrarian reform. Thus,
on July 17, 1987, President Corazon C. Aquino issued E.O. No. 228, declaring full land ownership in favor of the
beneficiaries of P.D. No. 27 and providing for the valuation of still unvalued lands covered by the decree as well as
the manner of their payment. This was followed on July 22, 1987 by Presidential Proclamation No. 131, instituting a
comprehensive agrarian reform program (CARP), and E.O. No. 229, providing the mechanics for its implementation.

Subsequently, with its formal organization, the revived Congress of the Philippines took over legislative power from
the President and started its own deliberations, including extensive public hearings, on the improvement of the
interests of farmers. The result, after almost a year of spirited debate, was the enactment of R.A. No. 6657, otherwise
known as the Comprehensive Agrarian Reform Law of 1988, which President Aquino signed on June 10, 1988. This
law, while considerably changing the earlier mentioned enactments, nevertheless gives them suppletory effect insofar
as they are not inconsistent with its provisions. 4

The above-captioned cases have been consolidated because they involve common legal questions, including serious
challenges to the constitutionality of the several measures mentioned above. They will be the subject of one common
discussion and resolution, The different antecedents of each case will require separate treatment, however, and will
first be explained hereunder.

G.R. No. 79777

Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229, and R.A. No. 6657.

The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by petitioner Nicolas Manaay
and his wife and a 5-hectare riceland worked by four tenants and owned by petitioner Augustin Hermano, Jr. The
tenants were declared full owners of these lands by E.O. No. 228 as qualified farmers under P.D. No. 27.

The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of separation of powers,
due process, equal protection and the constitutional limitation that no private property shall be taken for public use
without just compensation.

They contend that President Aquino usurped legislative power when she promulgated E.O. No. 228. The said
measure is invalid also for violation of Article XIII, Section 4, of the Constitution, for failure to provide for retention
limits for small landowners. Moreover, it does not conform to Article VI, Section 25(4) and the other requisites of a
valid appropriation.

In connection with the determination of just compensation, the petitioners argue that the same may be made only by
a court of justice and not by the President of the Philippines. They invoke the recent cases of EPZA v.
Dulay and Manotok v. National Food Authority. Moreover, the just compensation contemplated by the Bill of Rights
5 6

is payable in money or in cash and not in the form of bonds or other things of value.

In considering the rentals as advance payment on the land, the executive order also deprives the petitioners of their
property rights as protected by due process. The equal protection clause is also violated because the order places
the burden of solving the agrarian problems on the owners only of agricultural lands. No similar obligation is imposed
on the owners of other properties.

The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be the owners of the lands
occupied by them, E.O. No. 228 ignored judicial prerogatives and so violated due process. Worse, the measure
would not solve the agrarian problem because even the small farmers are deprived of their lands and the retention
rights guaranteed by the Constitution.

In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld in the earlier cases
of Chavez v. Zobel, Gonzales v. Estrella, and Association of Rice and Corn Producers of the Philippines, Inc. v.
7 8

The National Land Reform Council. The determination of just compensation by the executive authorities
9

conformably to the formula prescribed under the questioned order is at best initial or preliminary only. It does not
foreclose judicial intervention whenever sought or warranted. At any rate, the challenge to the order is premature
because no valuation of their property has as yet been made by the Department of Agrarian Reform. The petitioners
are also not proper parties because the lands owned by them do not exceed the maximum retention limit of 7
hectares.

Replying, the petitioners insist they are proper parties because P.D. No. 27 does not provide for retention limits on
tenanted lands and that in any event their petition is a class suit brought in behalf of landowners with landholdings
below 24 hectares. They maintain that the determination of just compensation by the administrative authorities is a
final ascertainment. As for the cases invoked by the public respondent, the constitutionality of P.D. No. 27 was merely
assumed in Chavez, while what was decided in Gonzales was the validity of the imposition of martial law.

In the amended petition dated November 22, 1588, it is contended that P.D. No. 27, E.O. Nos. 228 and 229 (except
Sections 20 and 21) have been impliedly repealed by R.A. No. 6657. Nevertheless, this statute should itself also be
declared unconstitutional because it suffers from substantially the same infirmities as the earlier measures.

A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz, owner of a 1. 83- hectare
land, who complained that the DAR was insisting on the implementation of P.D. No. 27 and E.O. No. 228 despite a
compromise agreement he had reached with his tenant on the payment of rentals. In a subsequent motion dated April
10, 1989, he adopted the allegations in the basic amended petition that the above- mentioned enactments have been
impliedly repealed by R.A. No. 6657.

G.R. No. 79310

The petitioners herein are landowners and sugar planters in the Victorias Mill District, Victorias, Negros Occidental.
Co-petitioner Planters' Committee, Inc. is an organization composed of 1,400 planter-members. This petition seeks to
prohibit the implementation of Proc. No. 131 and E.O. No. 229.

The petitioners claim that the power to provide for a Comprehensive Agrarian Reform Program as decreed by the
Constitution belongs to Congress and not the President. Although they agree that the President could exercise
legislative power until the Congress was convened, she could do so only to enact emergency measures during the
transition period. At that, even assuming that the interim legislative power of the President was properly exercised,
Proc. No. 131 and E.O. No. 229 would still have to be annulled for violating the constitutional provisions on just
compensation, due process, and equal protection.

They also argue that under Section 2 of Proc. No. 131 which provides:

Agrarian Reform Fund.-There is hereby created a special fund, to be known as the Agrarian Reform Fund, an initial
amount of FIFTY BILLION PESOS (P50,000,000,000.00) to cover the estimated cost of the Comprehensive Agrarian
Reform Program from 1987 to 1992 which shall be sourced from the receipts of the sale of the assets of the Asset
Privatization Trust and Receipts of sale of ill-gotten wealth received through the Presidential Commission on Good
Government and such other sources as government may deem appropriate. The amounts collected and accruing to
this special fund shall be considered automatically appropriated for the purpose authorized in this Proclamation the
amount appropriated is in futuro, not in esse. The money needed to cover the cost of the contemplated expropriation
has yet to be raised and cannot be appropriated at this time.

Furthermore, they contend that taking must be simultaneous with payment of just compensation as it is traditionally
understood, i.e., with money and in full, but no such payment is contemplated in Section 5 of the E.O. No. 229. On
the contrary, Section 6, thereof provides that the Land Bank of the Philippines "shall compensate the landowner in an
amount to be established by the government, which shall be based on the owner's declaration of current fair market
value as provided in Section 4 hereof, but subject to certain controls to be defined and promulgated by the
Presidential Agrarian Reform Council." This compensation may not be paid fully in money but in any of several
modes that may consist of part cash and part bond, with interest, maturing periodically, or direct payment in cash or
bond as may be mutually agreed upon by the beneficiary and the landowner or as may be prescribed or approved by
the PARC.

The petitioners also argue that in the issuance of the two measures, no effort was made to make a careful study of
the sugar planters' situation. There is no tenancy problem in the sugar areas that can justify the application of the
CARP to them. To the extent that the sugar planters have been lumped in the same legislation with other farmers,
although they are a separate group with problems exclusively their own, their right to equal protection has been
violated.

A motion for intervention was filed on August 27,1987 by the National Federation of Sugarcane Planters (NASP)
which claims a membership of at least 20,000 individual sugar planters all over the country. On September 10, 1987,
another motion for intervention was filed, this time by Manuel Barcelona, et al., representing coconut and riceland
owners. Both motions were granted by the Court.
NASP alleges that President Aquino had no authority to fund the Agrarian Reform Program and that, in any event, the
appropriation is invalid because of uncertainty in the amount appropriated. Section 2 of Proc. No. 131 and Sections
20 and 21 of E.O. No. 229 provide for an initial appropriation of fifty billion pesos and thus specifies the minimum
rather than the maximum authorized amount. This is not allowed. Furthermore, the stated initial amount has not been
certified to by the National Treasurer as actually available.

Two additional arguments are made by Barcelona, to wit, the failure to establish by clear and convincing evidence the
necessity for the exercise of the powers of eminent domain, and the violation of the fundamental right to own
property.

The petitioners also decry the penalty for non-registration of the lands, which is the expropriation of the said land for
an amount equal to the government assessor's valuation of the land for tax purposes. On the other hand, if the
landowner declares his own valuation he is unjustly required to immediately pay the corresponding taxes on the land,
in violation of the uniformity rule.

In his consolidated Comment, the Solicitor General first invokes the presumption of constitutionality in favor of Proc.
No. 131 and E.O. No. 229. He also justifies the necessity for the expropriation as explained in the "whereas" clauses
of the Proclamation and submits that, contrary to the petitioner's contention, a pilot project to determine the feasibility
of CARP and a general survey on the people's opinion thereon are not indispensable prerequisites to its
promulgation.

On the alleged violation of the equal protection clause, the sugar planters have failed to show that they belong to a
different class and should be differently treated. The Comment also suggests the possibility of Congress first
distributing public agricultural lands and scheduling the expropriation of private agricultural lands later. From this
viewpoint, the petition for prohibition would be premature.

The public respondent also points out that the constitutional prohibition is against the payment of public money
without the corresponding appropriation. There is no rule that only money already in existence can be the subject of
an appropriation law. Finally, the earmarking of fifty billion pesos as Agrarian Reform Fund, although denominated as
an initial amount, is actually the maximum sum appropriated. The word "initial" simply means that additional amounts
may be appropriated later when necessary.

On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own behalf, assailing the
constitutionality of E.O. No. 229. In addition to the arguments already raised, Serrano contends that the measure is
unconstitutional because:

(1) Only public lands should be included in the CARP;

(2) E.O. No. 229 embraces more than one subject which is not expressed in the title;

(3) The power of the President to legislate was terminated on July 2, 1987; and

(4) The appropriation of a P50 billion special fund from the National Treasury did not originate from
the House of Representatives.

G.R. No. 79744

The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of due process and the
requirement for just compensation, placed his landholding under the coverage of Operation Land Transfer.
Certificates of Land Transfer were subsequently issued to the private respondents, who then refused payment of
lease rentals to him.

On September 3, 1986, the petitioner protested the erroneous inclusion of his small landholding under Operation
Land transfer and asked for the recall and cancellation of the Certificates of Land Transfer in the name of the private
respondents. He claims that on December 24, 1986, his petition was denied without hearing. On February 17, 1987,
he filed a motion for reconsideration, which had not been acted upon when E.O. Nos. 228 and 229 were issued.
These orders rendered his motion moot and academic because they directly effected the transfer of his land to the
private respondents.
The petitioner now argues that:

(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the Philippines.

(2) The said executive orders are violative of the constitutional provision that no private property
shall be taken without due process or just compensation.

(3) The petitioner is denied the right of maximum retention provided for under the 1987
Constitution.

The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before Congress convened is anomalous
and arbitrary, besides violating the doctrine of separation of powers. The legislative power granted to the President
under the Transitory Provisions refers only to emergency measures that may be promulgated in the proper exercise
of the police power.

The petitioner also invokes his rights not to be deprived of his property without due process of law and to the
retention of his small parcels of riceholding as guaranteed under Article XIII, Section 4 of the Constitution. He likewise
argues that, besides denying him just compensation for his land, the provisions of E.O. No. 228 declaring that:

Lease rentals paid to the landowner by the farmer-beneficiary after October 21, 1972 shall be
considered as advance payment for the land.

is an unconstitutional taking of a vested property right. It is also his contention that the inclusion of even small
landowners in the program along with other landowners with lands consisting of seven hectares or more is
undemocratic.

In his Comment, the Solicitor General submits that the petition is premature because the motion for reconsideration
filed with the Minister of Agrarian Reform is still unresolved. As for the validity of the issuance of E.O. Nos. 228 and
229, he argues that they were enacted pursuant to Section 6, Article XVIII of the Transitory Provisions of the 1987
Constitution which reads:

The incumbent president shall continue to exercise legislative powers until the first Congress is convened.

On the issue of just compensation, his position is that when P.D. No. 27 was promulgated on October 21. 1972, the
tenant-farmer of agricultural land was deemed the owner of the land he was tilling. The leasehold rentals paid after
that date should therefore be considered amortization payments.

In his Reply to the public respondents, the petitioner maintains that the motion he filed was resolved on December
14, 1987. An appeal to the Office of the President would be useless with the promulgation of E.O. Nos. 228 and 229,
which in effect sanctioned the validity of the public respondent's acts.

G.R. No. 78742

The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners of rice and corn lands not
exceeding seven hectares as long as they are cultivating or intend to cultivate the same. Their respective lands do
not exceed the statutory limit but are occupied by tenants who are actually cultivating such lands.

According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:

No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be ejected or
removed from his farmholding until such time as the respective rights of the tenant- farmers and the
landowner shall have been determined in accordance with the rules and regulations implementing
P.D. No. 27.
The petitioners claim they cannot eject their tenants and so are unable to enjoy their right of retention because the
Department of Agrarian Reform has so far not issued the implementing rules required under the above-quoted
decree. They therefore ask the Court for a writ of mandamus to compel the respondent to issue the said rules.

In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI 474 removing any right of
retention from persons who own other agricultural lands of more than 7 hectares in aggregate area or lands used for
residential, commercial, industrial or other purposes from which they derive adequate income for their family. And
even assuming that the petitioners do not fall under its terms, the regulations implementing P.D. No. 27 have already
been issued, to wit, the Memorandum dated July 10, 1975 (Interim Guidelines on Retention by Small Landowners,
with an accompanying Retention Guide Table), Memorandum Circular No. 11 dated April 21, 1978, (Implementation
Guidelines of LOI No. 474), Memorandum Circular No. 18-81 dated December 29,1981 (Clarificatory Guidelines on
Coverage of P.D. No. 27 and Retention by Small Landowners), and DAR Administrative Order No. 1, series of 1985
(Providing for a Cut-off Date for Landowners to Apply for Retention and/or to Protest the Coverage of their
Landholdings under Operation Land Transfer pursuant to P.D. No. 27). For failure to file the corresponding
applications for retention under these measures, the petitioners are now barred from invoking this right.

The public respondent also stresses that the petitioners have prematurely initiated this case notwithstanding the
pendency of their appeal to the President of the Philippines. Moreover, the issuance of the implementing rules,
assuming this has not yet been done, involves the exercise of discretion which cannot be controlled through the writ
of mandamus. This is especially true if this function is entrusted, as in this case, to a separate department of the
government.

In their Reply, the petitioners insist that the above-cited measures are not applicable to them because they do not
own more than seven hectares of agricultural land. Moreover, assuming arguendo that the rules were intended to
cover them also, the said measures are nevertheless not in force because they have not been published as required
by law and the ruling of this Court in Tanada v. Tuvera. As for LOI 474, the same is ineffective for the additional
10

reason that a mere letter of instruction could not have repealed the presidential decree.

Although holding neither purse nor sword and so regarded as the weakest of the three departments of the
government, the judiciary is nonetheless vested with the power to annul the acts of either the legislative or the
executive or of both when not conformable to the fundamental law. This is the reason for what some quarters call the
doctrine of judicial supremacy. Even so, this power is not lightly assumed or readily exercised. The doctrine of
separation of powers imposes upon the courts a proper restraint, born of the nature of their functions and of their
respect for the other departments, in striking down the acts of the legislative and the executive as unconstitutional.
The policy, indeed, is a blend of courtesy and caution. To doubt is to sustain. The theory is that before the act was
done or the law was enacted, earnest studies were made by Congress or the President, or both, to insure that the
Constitution would not be breached.

In addition, the Constitution itself lays down stringent conditions for a declaration of unconstitutionality, requiring
therefor the concurrence of a majority of the members of the Supreme Court who took part in the deliberations and
voted on the issue during their session en banc. And as established by judge made doctrine, the Court will assume
11

jurisdiction over a constitutional question only if it is shown that the essential requisites of a judicial inquiry into such a
question are first satisfied. Thus, there must be an actual case or controversy involving a conflict of legal rights
susceptible of judicial determination, the constitutional question must have been opportunely raised by the proper
party, and the resolution of the question is unavoidably necessary to the decision of the case itself. 12

With particular regard to the requirement of proper party as applied in the cases before us, we hold that the same is
satisfied by the petitioners and intervenors because each of them has sustained or is in danger of sustaining an
immediate injury as a result of the acts or measures complained of. And even if, strictly speaking, they are not
13

covered by the definition, it is still within the wide discretion of the Court to waive the requirement and so remove the
impediment to its addressing and resolving the serious constitutional questions raised.

In the first Emergency Powers Cases, ordinary citizens and taxpayers were allowed to question the constitutionality
14

of several executive orders issued by President Quirino although they were invoking only an indirect and general
interest shared in common with the public. The Court dismissed the objection that they were not proper parties and
ruled that "the transcendental importance to the public of these cases demands that they be settled promptly and
definitely, brushing aside, if we must, technicalities of procedure." We have since then applied this exception in many
other cases. 15

The other above-mentioned requisites have also been met in the present petitions.

In must be stressed that despite the inhibitions pressing upon the Court when confronted with constitutional issues
like the ones now before it, it will not hesitate to declare a law or act invalid when it is convinced that this must be
done. In arriving at this conclusion, its only criterion will be the Constitution as God and its conscience give it the light
to probe its meaning and discover its purpose. Personal motives and political considerations are irrelevancies that
cannot influence its decision. Blandishment is as ineffectual as intimidation.

For all the awesome power of the Congress and the Executive, the Court will not hesitate to "make the hammer fall,
and heavily," to use Justice Laurel's pithy language, where the acts of these departments, or of any public official,
betray the people's will as expressed in the Constitution.

It need only be added, to borrow again the words of Justice Laurel, that —

... when the judiciary mediates to allocate constitutional boundaries, it does not assert any
superiority over the other departments; it does not in reality nullify or invalidate an act of the
Legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution to
determine conflicting claims of authority under the Constitution and to establish for the parties in an
actual controversy the rights which that instrument secures and guarantees to them. This is in truth
all that is involved in what is termed "judicial supremacy" which properly is the power of judicial
review under the Constitution. 16

The cases before us categorically raise constitutional questions that this Court must categorically resolve. And so we
shall.

II

We proceed first to the examination of the preliminary issues before resolving the more serious challenges to the
constitutionality of the several measures involved in these petitions.

The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under martial law has already
been sustained in Gonzales v. Estrella and we find no reason to modify or reverse it on that issue. As for the power of
President Aquino to promulgate Proc. No. 131 and E.O. Nos. 228 and 229, the same was authorized under Section 6
of the Transitory Provisions of the 1987 Constitution, quoted above.

The said measures were issued by President Aquino before July 27, 1987, when the Congress of the Philippines was
formally convened and took over legislative power from her. They are not "midnight" enactments intended to pre-
empt the legislature because E.O. No. 228 was issued on July 17, 1987, and the other measures, i.e., Proc. No. 131
and E.O. No. 229, were both issued on July 22, 1987. Neither is it correct to say that these measures ceased to be
valid when she lost her legislative power for, like any statute, they continue to be in force unless modified or repealed
by subsequent law or declared invalid by the courts. A statute does not ipso facto become inoperative simply
because of the dissolution of the legislature that enacted it. By the same token, President Aquino's loss of legislative
power did not have the effect of invalidating all the measures enacted by her when and as long as she possessed it.

Significantly, the Congress she is alleged to have undercut has not rejected but in fact substantially affirmed the
challenged measures and has specifically provided that they shall be suppletory to R.A. No. 6657 whenever not
inconsistent with its provisions. Indeed, some portions of the said measures, like the creation of the P50 billion fund
17

in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No. 229, have been incorporated by reference in the
CARP Law. 18

That fund, as earlier noted, is itself being questioned on the ground that it does not conform to the requirements of a
valid appropriation as specified in the Constitution. Clearly, however, Proc. No. 131 is not an appropriation measure
even if it does provide for the creation of said fund, for that is not its principal purpose. An appropriation law is one the
primary and specific purpose of which is to authorize the release of public funds from the treasury. The creation of
19

the fund is only incidental to the main objective of the proclamation, which is agrarian reform.
It should follow that the specific constitutional provisions invoked, to wit, Section 24 and Section 25(4) of Article VI,
are not applicable. With particular reference to Section 24, this obviously could not have been complied with for the
simple reason that the House of Representatives, which now has the exclusive power to initiate appropriation
measures, had not yet been convened when the proclamation was issued. The legislative power was then solely
vested in the President of the Philippines, who embodied, as it were, both houses of Congress.

The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be invalidated because they do
not provide for retention limits as required by Article XIII, Section 4 of the Constitution is no longer tenable. R.A. No.
6657 does provide for such limits now in Section 6 of the law, which in fact is one of its most controversial provisions.
This section declares:

Retention Limits. — Except as otherwise provided in this Act, no person may own or retain, directly
or indirectly, any public or private agricultural land, the size of which shall vary according to factors
governing a viable family-sized farm, such as commodity produced, terrain, infrastructure, and soil
fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but
in no case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be
awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least
fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm;
Provided, That landowners whose lands have been covered by Presidential Decree No. 27 shall be
allowed to keep the area originally retained by them thereunder, further, That original homestead
grantees or direct compulsory heirs who still own the original homestead at the time of the approval
of this Act shall retain the same areas as long as they continue to cultivate said homestead.

The argument that E.O. No. 229 violates the constitutional requirement that a bill shall have only one subject, to be
expressed in its title, deserves only short attention. It is settled that the title of the bill does not have to be a catalogue
of its contents and will suffice if the matters embodied in the text are relevant to each other and may be inferred from
the title.
20

The Court wryly observes that during the past dictatorship, every presidential issuance, by whatever name it was
called, had the force and effect of law because it came from President Marcos. Such are the ways of despots. Hence,
it is futile to argue, as the petitioners do in G.R. No. 79744, that LOI 474 could not have repealed P.D. No. 27
because the former was only a letter of instruction. The important thing is that it was issued by President Marcos,
whose word was law during that time.

But for all their peremptoriness, these issuances from the President Marcos still had to comply with the requirement
for publication as this Court held in Tanada v. Tuvera. Hence, unless published in the Official Gazette in accordance
21

with Article 2 of the Civil Code, they could not have any force and effect if they were among those enactments
successfully challenged in that case. LOI 474 was published, though, in the Official Gazette dated November
29,1976.)

Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ of mandamus cannot issue to
compel the performance of a discretionary act, especially by a specific department of the government. That is true as
a general proposition but is subject to one important qualification. Correctly and categorically stated, the rule is that
mandamus will lie to compel the discharge of the discretionary duty itself but not to control the discretion to be
exercised. In other words, mandamus can issue to require action only but not specific action.

Whenever a duty is imposed upon a public official and an unnecessary and unreasonable delay in
the exercise of such duty occurs, if it is a clear duty imposed by law, the courts will intervene by the
extraordinary legal remedy of mandamus to compel action. If the duty is purely ministerial, the
courts will require specific action. If the duty is purely discretionary, the courts by mandamus will
require action only. For example, if an inferior court, public official, or board should, for an
unreasonable length of time, fail to decide a particular question to the great detriment of all parties
concerned, or a court should refuse to take jurisdiction of a cause when the law clearly gave it
jurisdiction mandamus will issue, in the first case to require a decision, and in the second to require
that jurisdiction be taken of the cause. 22

And while it is true that as a rule the writ will not be proper as long as there is still a plain, speedy and adequate
remedy available from the administrative authorities, resort to the courts may still be permitted if the issue raised is a
question of law. 23
III

There are traditional distinctions between the police power and the power of eminent domain that logically preclude
the application of both powers at the same time on the same subject. In the case of City of Baguio v. NAWASA, for 24

example, where a law required the transfer of all municipal waterworks systems to the NAWASA in exchange for its
assets of equivalent value, the Court held that the power being exercised was eminent domain because the property
involved was wholesome and intended for a public use. Property condemned under the police power is noxious or
intended for a noxious purpose, such as a building on the verge of collapse, which should be demolished for the
public safety, or obscene materials, which should be destroyed in the interest of public morals. The confiscation of
such property is not compensable, unlike the taking of property under the power of expropriation, which requires the
payment of just compensation to the owner.

In the case of Pennsylvania Coal Co. v. Mahon, Justice Holmes laid down the limits of the police power in a famous
25

aphorism: "The general rule at least is that while property may be regulated to a certain extent, if regulation goes too
far it will be recognized as a taking." The regulation that went "too far" was a law prohibiting mining which might
cause the subsidence of structures for human habitation constructed on the land surface. This was resisted by a coal
company which had earlier granted a deed to the land over its mine but reserved all mining rights thereunder, with the
grantee assuming all risks and waiving any damage claim. The Court held the law could not be sustained without
compensating the grantor. Justice Brandeis filed a lone dissent in which he argued that there was a valid exercise of
the police power. He said:

Every restriction upon the use of property imposed in the exercise of the police power deprives the
owner of some right theretofore enjoyed, and is, in that sense, an abridgment by the State of rights
in property without making compensation. But restriction imposed to protect the public health,
safety or morals from dangers threatened is not a taking. The restriction here in question is merely
the prohibition of a noxious use. The property so restricted remains in the possession of its owner.
The state does not appropriate it or make any use of it. The state merely prevents the owner from
making a use which interferes with paramount rights of the public. Whenever the use prohibited
ceases to be noxious — as it may because of further changes in local or social conditions — the
restriction will have to be removed and the owner will again be free to enjoy his property as
heretofore.

Recent trends, however, would indicate not a polarization but a mingling of the police power and the power of
eminent domain, with the latter being used as an implement of the former like the power of taxation. The employment
of the taxing power to achieve a police purpose has long been accepted. As for the power of expropriation, Prof.
26

John J. Costonis of the University of Illinois College of Law (referring to the earlier case of Euclid v. Ambler Realty
Co., 272 US 365, which sustained a zoning law under the police power) makes the following significant remarks:

Euclid, moreover, was decided in an era when judges located the Police and eminent domain
powers on different planets. Generally speaking, they viewed eminent domain as encompassing
public acquisition of private property for improvements that would be available for public use,"
literally construed. To the police power, on the other hand, they assigned the less intrusive task of
preventing harmful externalities a point reflected in the Euclid opinion's reliance on an analogy to
nuisance law to bolster its support of zoning. So long as suppression of a privately authored harm
bore a plausible relation to some legitimate "public purpose," the pertinent measure need have
afforded no compensation whatever. With the progressive growth of government's involvement in
land use, the distance between the two powers has contracted considerably. Today government
often employs eminent domain interchangeably with or as a useful complement to the police
power-- a trend expressly approved in the Supreme Court's 1954 decision in Berman v. Parker,
which broadened the reach of eminent domain's "public use" test to match that of the police
power's standard of "public purpose." 27

The Berman case sustained a redevelopment project and the improvement of blighted areas in the District of
Columbia as a proper exercise of the police power. On the role of eminent domain in the attainment of this purpose,
Justice Douglas declared:

If those who govern the District of Columbia decide that the Nation's Capital should be beautiful as
well as sanitary, there is nothing in the Fifth Amendment that stands in the way.
 Once the object is within the authority of Congress, the right to realize it through the exercise of
eminent domain is clear.

For the power of eminent domain is merely the means to the end. 28

In Penn Central Transportation Co. v. New York City, decided by a 6-3 vote in 1978, the U.S Supreme Court
29

sustained the respondent's Landmarks Preservation Law under which the owners of the Grand Central Terminal had
not been allowed to construct a multi-story office building over the Terminal, which had been designated a historic
landmark. Preservation of the landmark was held to be a valid objective of the police power. The problem, however,
was that the owners of the Terminal would be deprived of the right to use the airspace above it although other
landowners in the area could do so over their respective properties. While insisting that there was here no taking, the
Court nonetheless recognized certain compensatory rights accruing to Grand Central Terminal which it said would
"undoubtedly mitigate" the loss caused by the regulation. This "fair compensation," as he called it, was explained by
Prof. Costonis in this wise:

In return for retaining the Terminal site in its pristine landmark status, Penn Central was authorized to transfer to
neighboring properties the authorized but unused rights accruing to the site prior to the Terminal's designation as a
landmark — the rights which would have been exhausted by the 59-story building that the city refused to
countenance atop the Terminal. Prevailing bulk restrictions on neighboring sites were proportionately relaxed,
theoretically enabling Penn Central to recoup its losses at the Terminal site by constructing or selling to others the
right to construct larger, hence more profitable buildings on the transferee sites.30

The cases before us present no knotty complication insofar as the question of compensable taking is concerned. To
the extent that the measures under challenge merely prescribe retention limits for landowners, there is an exercise of
the police power for the regulation of private property in accordance with the Constitution. But where, to carry out
such regulation, it becomes necessary to deprive such owners of whatever lands they may own in excess of the
maximum area allowed, there is definitely a taking under the power of eminent domain for which payment of just
compensation is imperative. The taking contemplated is not a mere limitation of the use of the land. What is required
is the surrender of the title to and the physical possession of the said excess and all beneficial rights accruing to the
owner in favor of the farmer-beneficiary. This is definitely an exercise not of the police power but of the power of
eminent domain.

Whether as an exercise of the police power or of the power of eminent domain, the several measures before us are
challenged as violative of the due process and equal protection clauses.

The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no retention limits are prescribed has
already been discussed and dismissed. It is noted that although they excited many bitter exchanges during the
deliberation of the CARP Law in Congress, the retention limits finally agreed upon are, curiously enough, not being
questioned in these petitions. We therefore do not discuss them here. The Court will come to the other claimed
violations of due process in connection with our examination of the adequacy of just compensation as required under
the power of expropriation.

The argument of the small farmers that they have been denied equal protection because of the absence of retention
limits has also become academic under Section 6 of R.A. No. 6657. Significantly, they too have not questioned the
area of such limits. There is also the complaint that they should not be made to share the burden of agrarian reform,
an objection also made by the sugar planters on the ground that they belong to a particular class with particular
interests of their own. However, no evidence has been submitted to the Court that the requisites of a valid
classification have been violated.

Classification has been defined as the grouping of persons or things similar to each other in certain particulars and
different from each other in these same particulars. To be valid, it must conform to the following requirements: (1) it
31

must be based on substantial distinctions; (2) it must be germane to the purposes of the law; (3) it must not be limited
to existing conditions only; and (4) it must apply equally to all the members of the class. The Court finds that all
32

these requisites have been met by the measures here challenged as arbitrary and discriminatory.

Equal protection simply means that all persons or things similarly situated must be treated alike both as to the rights
conferred and the liabilities imposed. The petitioners have not shown that they belong to a different class and
33

entitled to a different treatment. The argument that not only landowners but also owners of other properties must be
made to share the burden of implementing land reform must be rejected. There is a substantial distinction between
these two classes of owners that is clearly visible except to those who will not see. There is no need to elaborate on
this matter. In any event, the Congress is allowed a wide leeway in providing for a valid classification. Its decision is
accorded recognition and respect by the courts of justice except only where its discretion is abused to the detriment
of the Bill of Rights.

It is worth remarking at this juncture that a statute may be sustained under the police power only if there is a
concurrence of the lawful subject and the lawful method. Put otherwise, the interests of the public generally as
distinguished from those of a particular class require the interference of the State and, no less important, the means
employed are reasonably necessary for the attainment of the purpose sought to be achieved and not unduly
oppressive upon individuals. As the subject and purpose of agrarian reform have been laid down by the Constitution
34

itself, we may say that the first requirement has been satisfied. What remains to be examined is the validity of the
method employed to achieve the constitutional goal.

One of the basic principles of the democratic system is that where the rights of the individual are concerned, the end
does not justify the means. It is not enough that there be a valid objective; it is also necessary that the means
employed to pursue it be in keeping with the Constitution. Mere expediency will not excuse constitutional shortcuts.
There is no question that not even the strongest moral conviction or the most urgent public need, subject only to a
few notable exceptions, will excuse the bypassing of an individual's rights. It is no exaggeration to say that a, person
invoking a right guaranteed under Article III of the Constitution is a majority of one even as against the rest of the
nation who would deny him that right.

That right covers the person's life, his liberty and his property under Section 1 of Article III of the Constitution. With
regard to his property, the owner enjoys the added protection of Section 9, which reaffirms the familiar rule that
private property shall not be taken for public use without just compensation.

This brings us now to the power of eminent domain.

IV

Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands
intended for public use upon payment of just compensation to the owner. Obviously, there is no
need to expropriate where the owner is willing to sell under terms also acceptable to the purchaser,
in which case an ordinary deed of sale may be agreed upon by the parties. It is only where the
35

owner is unwilling to sell, or cannot accept the price or other conditions offered by the vendee, that
the power of eminent domain will come into play to assert the paramount authority of the State over
the interests of the property owner. Private rights must then yield to the irresistible demands of the
public interest on the time-honored justification, as in the case of the police power, that the welfare
of the people is the supreme law.

But for all its primacy and urgency, the power of expropriation is by no means absolute (as indeed no power is
absolute). The limitation is found in the constitutional injunction that "private property shall not be taken for public use
without just compensation" and in the abundant jurisprudence that has evolved from the interpretation of this
principle. Basically, the requirements for a proper exercise of the power are: (1) public use and (2) just compensation.

Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the State should first distribute
public agricultural lands in the pursuit of agrarian reform instead of immediately disturbing property rights by forcibly
acquiring private agricultural lands. Parenthetically, it is not correct to say that only public agricultural lands may be
covered by the CARP as the Constitution calls for "the just distribution of all agricultural lands." In any event, the
decision to redistribute private agricultural lands in the manner prescribed by the CARP was made by the legislative
and executive departments in the exercise of their discretion. We are not justified in reviewing that discretion in the
absence of a clear showing that it has been abused.

A becoming courtesy admonishes us to respect the decisions of the political departments when they decide what is
known as the political question. As explained by Chief Justice Concepcion in the case of Tañada v. Cuenco: 36

The term "political question" connotes what it means in ordinary parlance, namely, a question of
policy. It refers to "those questions which, under the Constitution, are to be decided by the people
in their sovereign capacity; or in regard to which full discretionary authority has been delegated to
 the legislative or executive branch of the government." It is concerned with issues dependent upon
the wisdom, not legality, of a particular measure.

It is true that the concept of the political question has been constricted with the enlargement of judicial power, which
now includes the authority of the courts "to determine whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government." Even so,
37

this should not be construed as a license for us to reverse the other departments simply because their views may not
coincide with ours.

The legislature and the executive have been seen fit, in their wisdom, to include in the CARP the redistribution of
private landholdings (even as the distribution of public agricultural lands is first provided for, while also continuing
apace under the Public Land Act and other cognate laws). The Court sees no justification to interpose its authority,
which we may assert only if we believe that the political decision is not unwise, but illegal. We do not find it to be so.

In U.S. v. Chandler-Dunbar Water Power Company, it was held:

38

Congress having determined, as it did by the Act of March 3,1909 that the entire St. Mary's river
between the American bank and the international line, as well as all of the upland north of the
present ship canal, throughout its entire length, was "necessary for the purpose of navigation of
said waters, and the waters connected therewith," that determination is conclusive in condemnation
proceedings instituted by the United States under that Act, and there is no room for judicial review
of the judgment of Congress ... .

As earlier observed, the requirement for public use has already been settled for us by the Constitution itself No less
than the 1987 Charter calls for agrarian reform, which is the reason why private agricultural lands are to be taken
from their owners, subject to the prescribed maximum retention limits. The purposes specified in P.D. No. 27, Proc.
No. 131 and R.A. No. 6657 are only an elaboration of the constitutional injunction that the State adopt the necessary
measures "to encourage and undertake the just distribution of all agricultural lands to enable farmers who are
landless to own directly or collectively the lands they till." That public use, as pronounced by the fundamental law
itself, must be binding on us.

The second requirement, i.e., the payment of just compensation, needs a longer and more thoughtful examination.

Just compensation is defined as the full and fair equivalent of the property taken from its owner by the
expropriator. It has been repeatedly stressed by this Court that the measure is not the taker's gain but the owner's
39

loss. The word "just" is used to intensify the meaning of the word "compensation" to convey the idea that the
40

equivalent to be rendered for the property to be taken shall be real, substantial, full, ample. 41

It bears repeating that the measures challenged in these petitions contemplate more than a mere regulation of the
use of private lands under the police power. We deal here with an actual taking of private agricultural lands that has
dispossessed the owners of their property and deprived them of all its beneficial use and enjoyment, to entitle them to
the just compensation mandated by the Constitution.

As held in Republic of the Philippines v. Castellvi, there is compensable taking when the following conditions
42

concur: (1) the expropriator must enter a private property; (2) the entry must be for more than a momentary period;
(3) the entry must be under warrant or color of legal authority; (4) the property must be devoted to public use or
otherwise informally appropriated or injuriously affected; and (5) the utilization of the property for public use must be
in such a way as to oust the owner and deprive him of beneficial enjoyment of the property. All these requisites are
envisioned in the measures before us.

Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its taking possession of the
condemned property, as "the compensation is a public charge, the good faith of the public is pledged for its payment,
and all the resources of taxation may be employed in raising the amount." Nevertheless, Section 16(e) of the CARP
43

Law provides that:

Upon receipt by the landowner of the corresponding payment or, in case of rejection or no
response from the landowner, upon the deposit with an accessible bank designated by the DAR of
the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take
 immediate possession of the land and shall request the proper Register of Deeds to issue a
Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR shall
thereafter proceed with the redistribution of the land to the qualified beneficiaries.

Objection is raised, however, to the manner of fixing the just compensation, which it is claimed is entrusted to the
administrative authorities in violation of judicial prerogatives. Specific reference is made to Section 16(d), which
provides that in case of the rejection or disregard by the owner of the offer of the government to buy his land-

... the DAR shall conduct summary administrative proceedings to determine the compensation for
the land by requiring the landowner, the LBP and other interested parties to submit evidence as to
the just compensation for the land, within fifteen (15) days from the receipt of the notice. After the
expiration of the above period, the matter is deemed submitted for decision. The DAR shall decide
the case within thirty (30) days after it is submitted for decision.

To be sure, the determination of just compensation is a function addressed to the courts of justice and may not be
usurped by any other branch or official of the government. EPZA v. Dulay resolved a challenge to several decrees
44

promulgated by President Marcos providing that the just compensation for property under expropriation should be
either the assessment of the property by the government or the sworn valuation thereof by the owner, whichever was
lower. In declaring these decrees unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:

The method of ascertaining just compensation under the aforecited decrees constitutes
impermissible encroachment on judicial prerogatives. It tends to render this Court inutile in a matter
which under this Constitution is reserved to it for final determination.

Thus, although in an expropriation proceeding the court technically would still have the power to
determine the just compensation for the property, following the applicable decrees, its task would
be relegated to simply stating the lower value of the property as declared either by the owner or the
assessor. As a necessary consequence, it would be useless for the court to appoint commissioners
under Rule 67 of the Rules of Court. Moreover, the need to satisfy the due process clause in the
taking of private property is seemingly fulfilled since it cannot be said that a judicial proceeding was
not had before the actual taking. However, the strict application of the decrees during the
proceedings would be nothing short of a mere formality or charade as the court has only to choose
between the valuation of the owner and that of the assessor, and its choice is always limited to the
lower of the two. The court cannot exercise its discretion or independence in determining what is
just or fair. Even a grade school pupil could substitute for the judge insofar as the determination of
constitutional just compensation is concerned.

xxx

In the present petition, we are once again confronted with the same question of whether the courts
under P.D. No. 1533, which contains the same provision on just compensation as its predecessor
decrees, still have the power and authority to determine just compensation, independent of what is
stated by the decree and to this effect, to appoint commissioners for such purpose.

This time, we answer in the affirmative.

xxx

It is violative of due process to deny the owner the opportunity to prove that the valuation in the tax
documents is unfair or wrong. And it is repulsive to the basic concepts of justice and fairness to
allow the haphazard work of a minor bureaucrat or clerk to absolutely prevail over the judgment of
a court promulgated only after expert commissioners have actually viewed the property, after
evidence and arguments pro and con have been presented, and after all factors and considerations
essential to a fair and just determination have been judiciously evaluated.

A reading of the aforecited Section 16(d) will readily show that it does not suffer from the arbitrariness that rendered
the challenged decrees constitutionally objectionable. Although the proceedings are described as summary, the
landowner and other interested parties are nevertheless allowed an opportunity to submit evidence on the real value
of the property. But more importantly, the determination of the just compensation by the DAR is not by any means
final and conclusive upon the landowner or any other interested party, for Section 16(f) clearly provides:

Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction
for final determination of just compensation.

The determination made by the DAR is only preliminary unless accepted by all parties concerned. Otherwise, the
courts of justice will still have the right to review with finality the said determination in the exercise of what is
admittedly a judicial function.

The second and more serious objection to the provisions on just compensation is not as easily resolved.

This refers to Section 18 of the CARP Law providing in full as follows:

SEC. 18. Valuation and Mode of Compensation. — The LBP shall compensate the landowner in
such amount as may be agreed upon by the landowner and the DAR and the LBP, in accordance
with the criteria provided for in Sections 16 and 17, and other pertinent provisions hereof, or as may
be finally determined by the court, as the just compensation for the land.

The compensation shall be paid in one of the following modes, at the option of the landowner:

(1) Cash payment, under the following terms and conditions:

(a) For lands above fifty (50) hectares, insofar as the excess
hectarage is concerned — Twenty-five percent (25%) cash, the
balance to be paid in government financial instruments
negotiable at any time.

(b) For lands above twenty-four (24) hectares and up to fifty

(50) hectares — Thirty percent (30%) cash, the balance to be
paid in government financial instruments negotiable at any
time.

(c) For lands twenty-four (24) hectares and below — Thirty-five

percent (35%) cash, the balance to be paid in government
financial instruments negotiable at any time.

(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares,

physical assets or other qualified investments in accordance with guidelines set by the PARC;

(3) Tax credits which can be used against any tax liability;

(4) LBP bonds, which shall have the following features:

(a) Market interest rates aligned with 91-day treasury bill rates.
Ten percent (10%) of the face value of the bonds shall mature
every year from the date of issuance until the tenth (10th) year:
Provided, That should the landowner choose to forego the
cash portion, whether in full or in part, he shall be paid
correspondingly in LBP bonds;

(b) Transferability and negotiability. Such LBP bonds may be

used by the landowner, his successors-in- interest or his
assigns, up to the amount of their face value, for any of the
following:
 (i) Acquisition of land or other real properties of the
government, including assets under the Asset Privatization
Program and other assets foreclosed by government financial
institutions in the same province or region where the lands for
which the bonds were paid are situated;

(ii) Acquisition of shares of stock of government-owned or

controlled corporations or shares of stock owned by the
government in private corporations;

(iii) Substitution for surety or bail bonds for the provisional

release of accused persons, or for performance bonds;

(iv) Security for loans with any government financial institution,

provided the proceeds of the loans shall be invested in an
economic enterprise, preferably in a small and medium- scale
industry, in the same province or region as the land for which
the bonds are paid;

(v) Payment for various taxes and fees to government:

Provided, That the use of these bonds for these purposes will
be limited to a certain percentage of the outstanding balance of
the financial instruments; Provided, further, That the PARC
shall determine the percentages mentioned above;

(vi) Payment for tuition fees of the immediate family of the

original bondholder in government universities, colleges, trade
schools, and other institutions;

(vii) Payment for fees of the immediate family of the original

bondholder in government hospitals; and

(viii) Such other uses as the PARC may from time to time
allow.

The contention of the petitioners in G.R. No. 79777 is that the above provision is unconstitutional insofar as it requires
the owners of the expropriated properties to accept just compensation therefor in less than money, which is the only
medium of payment allowed. In support of this contention, they cite jurisprudence holding that:

The fundamental rule in expropriation matters is that the owner of the property expropriated is
entitled to a just compensation, which should be neither more nor less, whenever it is possible to
make the assessment, than the money equivalent of said property. Just compensation has always
been understood to be the just and complete equivalent of the loss which the owner of the thing
expropriated has to suffer by reason of the expropriation . (Emphasis supplied.)
45

In J.M. Tuazon Co. v. Land Tenure Administration, 46

this Court held:

It is well-settled that just compensation means the equivalent for the value of the property at the
time of its taking. Anything beyond that is more, and anything short of that is less, than just
compensation. It means a fair and full equivalent for the loss sustained, which is the measure of the
indemnity, not whatever gain would accrue to the expropriating entity. The market value of the land
taken is the just compensation to which the owner of condemned property is entitled, the market
value being that sum of money which a person desirous, but not compelled to buy, and an owner,
willing, but not compelled to sell, would agree on as a price to be given and received for such
property. (Emphasis supplied.)

In the United States, where much of our jurisprudence on the subject has been derived, the weight of authority is also
to the effect that just compensation for property expropriated is payable only in money and not otherwise. Thus —
 The medium of payment of compensation is ready money or cash. The condemnor cannot compel
the owner to accept anything but money, nor can the owner compel or require the condemnor to
pay him on any other basis than the value of the property in money at the time and in the manner
prescribed by the Constitution and the statutes. When the power of eminent domain is resorted to,
there must be a standard medium of payment, binding upon both parties, and the law has fixed that
standard as money in cash. (Emphasis supplied.)
47

Part cash and deferred payments are not and cannot, in the nature of things, be regarded as a
reliable and constant standard of compensation. 48

"Just compensation" for property taken by condemnation means a fair equivalent in money, which
must be paid at least within a reasonable time after the taking, and it is not within the power of the
Legislature to substitute for such payment future obligations, bonds, or other valuable
advantage. (Emphasis supplied.)
49

It cannot be denied from these cases that the traditional medium for the payment of just compensation is money and
no other. And so, conformably, has just compensation been paid in the past solely in that medium. However, we do
not deal here with the traditional excercise of the power of eminent domain. This is not an ordinary expropriation
where only a specific property of relatively limited area is sought to be taken by the State from its owner for a specific
and perhaps local purpose.

What we deal with here is a revolutionary kind of expropriation.

The expropriation before us affects all private agricultural lands whenever found and of whatever kind as long as they
are in excess of the maximum retention limits allowed their owners. This kind of expropriation is intended for the
benefit not only of a particular community or of a small segment of the population but of the entire Filipino nation, from
all levels of our society, from the impoverished farmer to the land-glutted owner. Its purpose does not cover only the
whole territory of this country but goes beyond in time to the foreseeable future, which it hopes to secure and edify
with the vision and the sacrifice of the present generation of Filipinos. Generations yet to come are as involved in this
program as we are today, although hopefully only as beneficiaries of a richer and more fulfilling life we will guarantee
to them tomorrow through our thoughtfulness today. And, finally, let it not be forgotten that it is no less than the
Constitution itself that has ordained this revolution in the farms, calling for "a just distribution" among the farmers of
lands that have heretofore been the prison of their dreams but can now become the key at least to their deliverance.

Such a program will involve not mere millions of pesos. The cost will be tremendous. Considering the vast areas of
land subject to expropriation under the laws before us, we estimate that hundreds of billions of pesos will be needed,
far more indeed than the amount of P50 billion initially appropriated, which is already staggering as it is by our
present standards. Such amount is in fact not even fully available at this time.

We assume that the framers of the Constitution were aware of this difficulty when they called for agrarian reform as a
top priority project of the government. It is a part of this assumption that when they envisioned the expropriation that
would be needed, they also intended that the just compensation would have to be paid not in the orthodox way but a
less conventional if more practical method. There can be no doubt that they were aware of the financial limitations of
the government and had no illusions that there would be enough money to pay in cash and in full for the lands they
wanted to be distributed among the farmers. We may therefore assume that their intention was to allow such manner
of payment as is now provided for by the CARP Law, particularly the payment of the balance (if the owner cannot be
paid fully with money), or indeed of the entire amount of the just compensation, with other things of value. We may
also suppose that what they had in mind was a similar scheme of payment as that prescribed in P.D. No. 27, which
was the law in force at the time they deliberated on the new Charter and with which they presumably agreed in
principle.

The Court has not found in the records of the Constitutional Commission any categorical agreement among the
members regarding the meaning to be given the concept of just compensation as applied to the comprehensive
agrarian reform program being contemplated. There was the suggestion to "fine tune" the requirement to suit the
demands of the project even as it was also felt that they should "leave it to Congress" to determine how payment
should be made to the landowner and reimbursement required from the farmer-beneficiaries. Such innovations as
"progressive compensation" and "State-subsidized compensation" were also proposed. In the end, however, no
special definition of the just compensation for the lands to be expropriated was reached by the Commission. 50
On the other hand, there is nothing in the records either that militates against the assumptions we are making of the
general sentiments and intention of the members on the content and manner of the payment to be made to the
landowner in the light of the magnitude of the expenditure and the limitations of the expropriator.

With these assumptions, the Court hereby declares that the content and manner of the just compensation provided
for in the afore- quoted Section 18 of the CARP Law is not violative of the Constitution. We do not mind admitting that
a certain degree of pragmatism has influenced our decision on this issue, but after all this Court is not a cloistered
institution removed from the realities and demands of society or oblivious to the need for its enhancement. The Court
is as acutely anxious as the rest of our people to see the goal of agrarian reform achieved at last after the frustrations
and deprivations of our peasant masses during all these disappointing decades. We are aware that invalidation of the
said section will result in the nullification of the entire program, killing the farmer's hopes even as they approach
realization and resurrecting the spectre of discontent and dissent in the restless countryside. That is not in our view
the intention of the Constitution, and that is not what we shall decree today.

Accepting the theory that payment of the just compensation is not always required to be made fully in money, we find
further that the proportion of cash payment to the other things of value constituting the total payment, as determined
on the basis of the areas of the lands expropriated, is not unduly oppressive upon the landowner. It is noted that the
smaller the land, the bigger the payment in money, primarily because the small landowner will be needing it more
than the big landowners, who can afford a bigger balance in bonds and other things of value. No less importantly, the
government financial instruments making up the balance of the payment are "negotiable at any time." The other
modes, which are likewise available to the landowner at his option, are also not unreasonable because payment is
made in shares of stock, LBP bonds, other properties or assets, tax credits, and other things of value equivalent to
the amount of just compensation.

Admittedly, the compensation contemplated in the law will cause the landowners, big and small, not a little
inconvenience. As already remarked, this cannot be avoided. Nevertheless, it is devoutly hoped that these
countrymen of ours, conscious as we know they are of the need for their forebearance and even sacrifice, will not
begrudge us their indispensable share in the attainment of the ideal of agrarian reform. Otherwise, our pursuit of this
elusive goal will be like the quest for the Holy Grail.

The complaint against the effects of non-registration of the land under E.O. No. 229 does not seem to be viable any
more as it appears that Section 4 of the said Order has been superseded by Section 14 of the CARP Law. This
repeats the requisites of registration as embodied in the earlier measure but does not provide, as the latter did, that in
case of failure or refusal to register the land, the valuation thereof shall be that given by the provincial or city assessor
for tax purposes. On the contrary, the CARP Law says that the just compensation shall be ascertained on the basis of
the factors mentioned in its Section 17 and in the manner provided for in Section 16.

The last major challenge to CARP is that the landowner is divested of his property even before actual payment to him
in full of just compensation, in contravention of a well- accepted principle of eminent domain.

The recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the expropriator
only upon full payment of the just compensation. Jurisprudence on this settled principle is consistent both here and in
other democratic jurisdictions. Thus:

Title to property which is the subject of condemnation proceedings does not vest the condemnor until the judgment
fixing just compensation is entered and paid, but the condemnor's title relates back to the date on which the petition
under the Eminent Domain Act, or the commissioner's report under the Local Improvement Act, is filed. 51

... although the right to appropriate and use land taken for a canal is complete at the time of entry, title to the property
taken remains in the owner until payment is actually made. (Emphasis supplied.)
52

In Kennedy v. Indianapolis, the US Supreme Court cited several cases holding that title to property does not pass to
53

the condemnor until just compensation had actually been made. In fact, the decisions appear to be uniformly to this
effect. As early as 1838, in Rubottom v. McLure, it was held that "actual payment to the owner of the condemned
54

property was a condition precedent to the investment of the title to the property in the State" albeit "not to the
appropriation of it to public use." In Rexford v. Knight, the Court of Appeals of New York said that the construction
55

upon the statutes was that the fee did not vest in the State until the payment of the compensation although the
authority to enter upon and appropriate the land was complete prior to the payment. Kennedy further said that "both
on principle and authority the rule is ... that the right to enter on and use the property is complete, as soon as the
property is actually appropriated under the authority of law for a public use, but that the title does not pass from the
owner without his consent, until just compensation has been made to him."

Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, that: 56

If the laws which we have exhibited or cited in the preceding discussion are attentively examined it
will be apparent that the method of expropriation adopted in this jurisdiction is such as to afford
absolute reassurance that no piece of land can be finally and irrevocably taken from an unwilling
owner until compensation is paid ... . (Emphasis supplied.)

It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21, 1972 and declared that
he shall "be deemed the owner" of a portion of land consisting of a family-sized farm except that "no title to the land
owned by him was to be actually issued to him unless and until he had become a full-fledged member of a duly
recognized farmers' cooperative." It was understood, however, that full payment of the just compensation also had to
be made first, conformably to the constitutional requirement.

When E.O. No. 228, categorically stated in its Section 1 that:

All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of the land
they acquired by virtue of Presidential Decree No. 27. (Emphasis supplied.)

it was obviously referring to lands already validly acquired under the said decree, after proof of full-fledged
membership in the farmers' cooperatives and full payment of just compensation. Hence, it was also perfectly proper
for the Order to also provide in its Section 2 that the "lease rentals paid to the landowner by the farmer- beneficiary
after October 21, 1972 (pending transfer of ownership after full payment of just compensation), shall be considered
as advance payment for the land."

The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the government on
receipt by the landowner of the corresponding payment or the deposit by the DAR of the compensation in cash or
LBP bonds with an accessible bank. Until then, title also remains with the landowner. No outright change of
57

ownership is contemplated either.

Hence, the argument that the assailed measures violate due process by arbitrarily transferring title before the land is
fully paid for must also be rejected.

It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D. No. 27, as recognized under
E.O. No. 228, are retained by him even now under R.A. No. 6657. This should counter-balance the express provision
in Section 6 of the said law that "the landowners whose lands have been covered by Presidential Decree No. 27 shall
be allowed to keep the area originally retained by them thereunder, further, That original homestead grantees or
direct compulsory heirs who still own the original homestead at the time of the approval of this Act shall retain the
same areas as long as they continue to cultivate said homestead."

In connection with these retained rights, it does not appear in G.R. No. 78742 that the appeal filed by the petitioners
with the Office of the President has already been resolved. Although we have said that the doctrine of exhaustion of
administrative remedies need not preclude immediate resort to judicial action, there are factual issues that have yet to
be examined on the administrative level, especially the claim that the petitioners are not covered by LOI 474 because
they do not own other agricultural lands than the subjects of their petition.

Obviously, the Court cannot resolve these issues. In any event, assuming that the petitioners have not yet exercised
their retention rights, if any, under P.D. No. 27, the Court holds that they are entitled to the new retention rights
provided for by R.A. No. 6657, which in fact are on the whole more liberal than those granted by the decree.

The CARP Law and the other enactments also involved in these cases have been the subject of bitter attack from
those who point to the shortcomings of these measures and ask that they be scrapped entirely. To be sure, these
enactments are less than perfect; indeed, they should be continuously re-examined and rehoned, that they may be
sharper instruments for the better protection of the farmer's rights. But we have to start somewhere. In the pursuit of
agrarian reform, we do not tread on familiar ground but grope on terrain fraught with pitfalls and expected difficulties.
This is inevitable. The CARP Law is not a tried and tested project. On the contrary, to use Justice Holmes's words, "it
is an experiment, as all life is an experiment," and so we learn as we venture forward, and, if necessary, by our own
mistakes. We cannot expect perfection although we should strive for it by all means. Meantime, we struggle as best
we can in freeing the farmer from the iron shackles that have unconscionably, and for so long, fettered his soul to the
soil.

By the decision we reach today, all major legal obstacles to the comprehensive agrarian reform program are
removed, to clear the way for the true freedom of the farmer. We may now glimpse the day he will be released not
only from want but also from the exploitation and disdain of the past and from his own feelings of inadequacy and
helplessness. At last his servitude will be ended forever. At last the farm on which he toils will be his farm. It will be
his portion of the Mother Earth that will give him not only the staff of life but also the joy of living. And where once it
bred for him only deep despair, now can he see in it the fruition of his hopes for a more fulfilling future. Now at last
can he banish from his small plot of earth his insecurities and dark resentments and "rebuild in it the music and the
dream."

WHEREFORE, the Court holds as follows:

1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are SUSTAINED against
all the constitutional objections raised in the herein petitions.

2. Title to all expropriated properties shall be transferred to the State only upon full payment of
compensation to their respective owners.

3. All rights previously acquired by the tenant- farmers under P.D. No. 27 are retained and
recognized.

4. Landowners who were unable to exercise their rights of retention under P.D. No. 27 shall enjoy
the retention rights granted by R.A. No. 6657 under the conditions therein prescribed.

5. Subject to the above-mentioned rulings all the petitions are DISMISSED, without pronouncement
as to costs.

SO ORDERED.

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