Dagdag v.

Nepomuceno
G.R. No. L-12691. February 27, 1959

Facts:
A small parcel of land (Lot No. 3786), an alienable or disposable public land. Covered by Sales
Patent No. 257 was issued to Margarita Juanson. The same land was also issued by Lease No. 49
executed by the Bureau of Lands in favor of Andres de Vera. Juanson’s Sales Patent was inscribed by the
Register of Deeds on July 11, 1927, and the Original Certificate of Title was issued to her. In 1950,
Simeon Dagdag bought it from the owner and the corresponding certificate of title was given out. On
the other hand, the lease to de Vera was transferred to Nepomuceno. Dagdag’s title and those of his
predecessors contained no annotation of such lease , neither he had any knowledge of it. Nepomuceno
refused to surrender the land even in the face of Dagdag’s patent and title.

Issue: Who is entitled to the land and the products thereof?

Ruling:
The patents when registered in the corresponding Register of Deeds are indispensible. We
regard these as veritable Torrens Title subject to no encumbrance except those stated therein, plus
those specified by the statutes, and lease is not one of them. In addition, when the lease was renewed
in 1949, the portion in question was no longer public land subject to the disposition of the Director of
Lands because it had already been granted to Margarita Juanson and had become private property. In
Sec 122 of the Land Registration Law, the documents mentioned wherein lands are “alienated, granted,
or conveyed” are documents transferring ownership, not documents of lease transferring ownership.
The Torrens Title of Dagdag must prevail.

Republic vs Naguiat
Natural Resources and Environmental Laws

G.R. No. 134209; January 24, 2006

FACTS:
Celestina Naguiat filed an application for registration of title to four parcels of land located in
Panan, Botolan, Zambales. The applicant alleges that she is the owner of the said parcels of land having
acquired them by purchase from its previous owners and their predecessors-in-interest who have been
in possession thereof for more than thirty (30) years; and that to the best of her knowledge, said lots
suffer no mortgage or encumbrance of whatever kind nor is there any person having any interest, legal
or equitable, or in possession thereof.
Petitioner Republic opposed on the ground that neither the applicant nor her predecessors-in
interest have been in open, continuous, exclusive and notorious possession and occupation of the lands
in question since 12 June 1945 or prior thereto, considering the fact that she has not established that
the lands in question have been declassified from forest or timber zone to alienable and disposable
property.

ISSUE:
Did the areas in question cease to have the status of forest or other inalienable lands of the public
domain?
HELD:
No, the said areas are still classified as forest land.The issue of whether or not respondent and
her predecessors-in-interest have been in open, exclusive and continuous possession of the parcels of
land in question is of little moment. For, unclassified land cannot be acquired by adverse occupation or
possession; occupation thereof in the concept of owner, however long, cannot ripen into private
ownership and be registered as title.
A forested area classified as forest land of the public domain does not lose such classification simply
because loggers or settlers 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. The classification is merely
descriptive of its legal nature or status and does not have to be descriptive of what the land actually
looks like.

LA BUGAL B’LAAN TRIBAL ASSOCIATION INC., et. al. v. V. O. RAMOS,

Secretary Department of Environment and Natural Resources; H. RAMOS,
Director, Mines and Geosciences Bureau (MGB-DENR); R. TORRES,
Executive Secretary; and WMC (PHILIPPINES) INC. 

The constitutional provision allowing the President to enter into FTAA is a

exception to the rule that participation in the nation’s natural resources is reserved
exclusively to Filipinos. Provision must be construed strictly against their enjoyment by
non-Filipinos.
RA 7942 (The Philippine Mining Act) took effect on April 9, 1995. Before the
effectivity of RA 7942, or on March 30, 1995, the President signed a Financial and
Technical Assistance Agreement (FTAA) with WMCP, a corporation organized under
Philippine laws, covering close to 100,000 hectares of land in South Cotabato, Sultan
Kudarat, Davao del Sur and North Cotabato. On August 15, 1995, the Environment
Secretary Victor Ramos issued DENR Administrative Order 95-23, which was later
repealed by DENR Administrative Order 96-40, adopted on December 20, 1996.
Petitioners prayed that RA 7942, its implementing rules, and the FTAA between the
government and WMCP be declared unconstitutional on ground that they allow fully
foreign owned corporations like WMCP to exploit, explore and develop Philippine
mineral resources in contravention of Article XII Section 2 paragraphs 2 and 4 of the
Charter.
In January 2001, WMC – a publicly listed Australian mining and exploration
company – sold its whole stake in WMCP to Sagittarius Mines, 60% of which is owned
by Filipinos while 40% of which is owned by Indophil Resources, an Australian
company. DENR approved the transfer and registration of the FTAA in Sagittarius‘
name but Lepanto Consolidated assailed the same. The latter case is still pending before
the Court of Appeals.
EO 279, issued by former President Aquino on July 25, 1987, authorizes the
DENR to accept, consider and evaluate proposals from foreign owned corporations or
foreign investors for contracts or agreements involving wither technical or financial
assistance for large scale exploration, development and utilization of minerals which
upon appropriate recommendation of the (DENR) Secretary, the President may execute
with the foreign proponent. WMCP likewise contended that the annulment of the FTAA
would violate a treaty between the Philippines and Australia which provides for the
protection of Australian investments.

ISSUES:

1. Whether or not the Philippine Mining Act is unconstitutional for allowing fully
foreign-owned corporations to exploit the Philippine mineral resources. 2. Whether or
not the FTAA between the government and WMCP is a ―service contract that permits
fully foreign owned companies to exploit the Philippine mineral resources.

HELD:

First Issue: RA 7942 is Unconstitutional

RA 7942 or the Philippine Mining Act of 1995 is unconstitutional for permitting fully
foreign owned corporations to exploit the Philippine natural resources.
Article XII Section 2 of the 1987 Constitution retained the Regalian Doctrine which
states that ―All lands of the public domain, waters, minerals, coal, petroleum, and other
minerals, coal, petroleum, and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are
owned by the State. The same section also states that, ―the exploration and
development and utilization of natural resources shall be under the full control and
supervision of the State.
Conspicuously absent in Section 2 is the provision in the 1935 and 1973 Constitution
authorizing the State to grant licenses, concessions, or leases for the exploration,
exploitation, development, or utilization of natural resources. By such omission, the
utilization of inalienable lands of the public domain through license, concession or lease
is no longer allowed under the 1987 Constitution.
Under the concession system, the concessionaire makes a direct equity
investment for the purpose of exploiting a particular natural resource within a given
area. The concession amounts to complete control by the concessionaire over the
country‘s natural resource, for it is given exclusive and plenary rights to exploit a
particular resource at the point of extraction.
The 1987 Constitution, moreover, has deleted the phrase ―management or other
forms of assistance in the 1973 Charter. The present Constitution now allows only
―technical and financial assistance. The management and the operation of the
mining activities by foreign contractors, the primary feature of the service contracts was
precisely the evil the drafters of the 1987 Constitution sought to avoid.
The constitutional provision allowing the President to enter into FTAAs is an exception
to the rule that participation in the nation‘s natural resources is reserved exclusively to
Filipinos. Accordingly, such provision must be construed strictly against their
enjoyment by non-Filipinos. Therefore, RA 7942 is invalid insofar as the said act
authorizes service contracts. Although the statute employs the phrase ―financial and
technical agreements in accordance with the 1987 Constitution, its pertinent
provisions actually treat these agreements as service contracts that grant beneficial
ownership to foreign contractors contrary to the fundamental law.
The underlying assumption in the provisions of the law is that the foreign
contractor manages the mineral resources just like the foreign contractor in a service
contract. By allowing foreign contractors to manage or operate all the aspects of the
mining operation, RA 7942 has, in effect, conveyed beneficial ownership over the
nation‘s mineral resources to these contractors, leaving the State with nothing but bare
title thereto.
The same provisions, whether by design or inadvertence, permit a circumvention
of the constitutionally ordained 60-40% capitalization requirement for corporations
or associations engaged in the exploitation, development and utilization of Philippine
natural resources.
When parts of a statute are so mutually dependent and connected as conditions,
considerations, inducements or compensations for each other as to warrant a belief that
the legislature intended them as a whole, then if some parts are unconstitutional, all
provisions that are thus dependent, conditional or connected, must fail with them.
Under Article XII Section 2 of the 1987 Charter, foreign owned corporations are limited
only to merely technical or financial assistance to the State for large scale exploration,
development and utilization of minerals, petroleum and other mineral oils.
Second Issue: RP Government-WMCP FTAA is a Service Contract
The FTAA between he WMCP and the Philippine government is likewise
unconstitutional since the agreement itself is a service contract.
Section 1.3 of the FTAA grants WMCP a fully foreign owned corporation, the exclusive
right to explore, exploit, utilize and dispose of all minerals and by-products that may be
produced from the contract area. Section 1.2 of the same agreement provides that EMCP
shall provide all financing, technology, management, and personnel necessary for the
Mining Operations.
These contractual stipulations and related provisions in the FTAA taken together,
grant WMCP beneficial ownership over natural resources that properly belong to the
State and are intended for the benefit of its citizens. These stipulations are abhorrent to
the 1987 Constitution. They are precisely the vices that the fundamental law seeks to
avoid, the evils that it aims to suppress. Consequently, the contract from which they
spring must be struck down.