Republic VS.

Malabanan

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. 1âwphi1

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

ROMERO, J.:

The issue in the case at bar pertains to ownership of 15 parcels of land in Tiwi,
Albay which form part of the "Tiwi Hot Spring National Park." The facts of the
case are as follows.

On June 13, 1913, then Governor General of the Philippine Islands, William
Cameron Forbes issued Executive Order No. 40 which reserved for provincial
park purposes some 440,530 square meters of land situated in Barrio Naga,
Municipality of Tiwi, Province of Albay pursuant to the provisions of Act 648 of
the Philippine Commission

Subsequently, the then Court of First Instance of Albay, 15th Judicial District,
United States of America, ordered the registration of 15 parcels of land
covered by Executive Order No. 40 in the name of Diego Palomo on December
9, 1916; 2 December 28, 1916;3 and January 17, 1917.4 Diego Palomo donated
these parcels of land consisting of 74,872 square meters which were allegedly
covered by Original Certificates of Title Nos. 513, 169, 176 and 1735 to his
heirs, herein petitioners, Ignacio and Carmen Palomo two months before his
death in April 1937.6

Claiming that the aforesaid original certificates of title were lost during the
Japanese occupation, Ignacio Palomo filed a petition for reconstitution with the
Court of First Instance of Albay on May 30, 1950.7 The Register of Deeds of
Albay issued Transfer Certificates of Title Nos. 3911, 3912, 3913 and 3914
sometime in October 1953.8 chanroblesvirtuallawlibrary

On July 10, 1954 President Ramon Magsaysay issued Proclamation No. 47

converting the area embraced by Executive Order No. 40 into the "Tiwi Hot
Spring National Park," under the control, management, protection and
administration of the defunct Commission of Parks and Wildlife, now a division
of the Bureau of Forest Development. The area was never released as
alienable and disposable portion of the public domain and, therefore, is neither
susceptible to disposition under the provisions of the Public Land Law (CA 141)
nor registrable under the Land Registration Act (Act No. 496).

The Palomos, however, continued in possession of the property, paid real

estate taxes thereon9 and introduced improvements by planting rice,
bananas, pandan and coconuts. On April 8, 1971, petitioner Carmen vda. de
Buenaventura and spouses Ignacio Palomo and Trinidad Pascual mortgaged
the parcels of land covered by TCT 3911, 3912, 3913 and 3914 to guarantee a
loan of P200,000 from the Bank of the Philippine Islands.
In May 7, 1974 petitioner Carmen vda. de Buenaventura and spouses Ignacio
Palomo and Trinidad Pascual filed Civil Case No. T-143 before the then Court
of First Instance of Albay for Injunction with damages against private
respondents Faustino J. Perfecto, Raffy Santillan, Boy Ariado, Lorenzo
Brocales, Salvador Doe and other Does who are all employees of the Bureau of
Forest Development who entered the land covered by TCT No. 3913 and/or
TCT 3914 and cut down bamboos thereat, totally leveling no less than 4
groves worth not less than P2,000.00.

On October 11, 1974, the Republic of the Philippines filed Civil Case No. T-176
for annulment and cancellation of Certificates of Title involving the 15 parcels
of land registered in the name of the petitioners and subject of Civil Case T-
143. Impleaded with the petitioners as defendants were the Bank of the
Philippine Islands, Legazpi Branch and the Register of Deeds of Albay.

The case against the Bank of Philippine Islands was dismissed because the
loan of P200,000 with the Bank was already paid and the mortgage in its favor
cancelled.

A joint trial of Civil Case T-143 and T-176 was conducted upon agreement of
the parties and on July 31, 1986, the trial court rendered the following
decision:

"WHEREFORE, premises considered, judgment is hereby rendered:

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

Costs against the plaintiffs.

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

(1) Declaring null and void and no force and effect the Order dated September
14, 1953, as well as the Original Certificate of Titles Nos. 153,10 169, 173 and
176 and Transfer Certificates of Titles Nos. 3911, T-3912, T-3913, and T-
3914, all of the Register of Deeds of Albay and all transactions based on said
titles.

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

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

Costs against the defendants.

So Ordered."12 chanroblesvirtuallawlibrary

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

The petitioners appealed to the Court of Appeals which affirmed in  toto the

findings of the lower Court; hence this petition raising the following issues:

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

affirming in toto the decision of the lower court.

2. The declaration of nullity of the original certificates of title and subsequent

transfer certificates of titles of the petitioners over the properties in question is
contrary to law and jurisprudence on the matter.

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

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

The issues raised essentially boil down to whether or not the alleged original
certificate of titles issued pursuant to the order of the Court of First Instance in
1916-1917 and the subsequent TCTs issued in 1953 pursuant to the petition
for reconstitution are valid.

Petitioners contend that the Treaty of Paris which ended the Spanish-American
War at the end of the 19th century recognized the property rights of Spanish
and Filipino citizens and the American government had no inherent power to
confiscate properties of private citizens and declare them part of any kind of
government reservation. They allege that their predecessors in interest have
been in open, adverse and continuous possession of the subject lands for 20-
50 years prior to their registration in 1916-1917. Hence, the reservation of the
lands for provincial purposes in 1913 by then Governor-general Forbes was
tantamount to deprivation of private property without due process of law.

In support of their claim, the petitioners presented copies of a number of

decisions of the Court of First Instance of Albay, 15th Judicial District of the
United States of America which state that the predecessors in interest of the
petitioners' father Diego Palomo, were in continuous, open and adverse
possession of the lands from 20 to 50 years at the time of their registration in
1916.

We are not convinced.

The Philippines passed to the Spanish Crown by discovery and conquest in the
16th century. Before the Treaty of Paris in April 11, 1899, our lands, whether
agricultural, mineral or forest were under the exclusive patrimony and
dominion of the Spanish Crown. Hence, private ownership of land could only
be acquired through royal concessions which were documented in various
forms, such as (1) Titulo Real or Royal Grant," (2) Concession Especial or
Special Grant, (3) Titulo de Compra or Title by Purchase and
(4) Informacion Posesoria or Possessory Information title obtained under the
Spanish Mortgage Law or under the Royal Decree of January 26, 1889.

Unfortunately, no proof was presented that the petitioners' predecessors in

interest derived title from an old Spanish grant. Petitioners placed much
reliance upon the declarations in Expediente No. 5, G.L.R.O. Record Decision
No. 9820, dated January 17, 1917; Expediente No. 6, G.L.R.O. Record No.
9821, dated December 28, 1916; Expediente No. 7, G.L.R.O. Record No. 9822,
dated December 9, 1916; Expediente No. 8, G.L.R.O. Record No. 9823, dated
December 28, 1916 and Expediente No. 10, G.L.R.O. Record No. 9868, dated
December 9, 1916 of the Court of First Instance of Albay, 15th Judicial District
of the United States of America presided by Judge Isidro Paredes that their
predecessors in interest were in open, adverse and continuous possession of
the subject lands for 20-50 years.14 The aforesaid "decisions" of the Court of
First Instance, however, were not signed by the judge but were merely
certified copies of notification to Diego Palomo bearing the signature of the
clerk of court.

Moreover, despite claims by the petitioners that their predecessors in interest

were in open, adverse and continuous possession of the lands for 20 to 50
years prior to their registration in 1916-1917, the lands were surveyed only in
December 1913, the very same year they were acquired by Diego Palomo.
Curiously, in February 1913 or 10 months before the lands were surveyed for
Diego Palomo, the government had already surveyed the area in preparation
for its reservation for provincial park purposes. If the petitioners' predecessors
in interest were indeed in possession of the lands for a number of years prior
to their registration in 1916-1917, they would have undoubtedly known about
the inclusion of these properties in the reservation in 1913. It certainly is a
trifle late at this point to argue that the government had no right to include
these properties in the reservation when the question should have been raised
83 years ago.

As regards the petitioners' contention that inasmuch as they obtained the titles
without government opposition, the government is now estopped from
questioning the validity of the certificates of title which were granted. As
correctly pointed out by the respondent Court of Appeals, the principle of
estoppel does not operate against the Government for the act of its agents. 15

Assuming that the decrees of the Court of First Instance were really issued,
the lands are still not capable of appropriation. The adverse possession which
may be the basis of a grant of title in confirmation of imperfect title cases
applies only to alienable lands of the public domain.

There is no question that the lands in the case at bar were not alienable lands
of the public domain. As testified by the District Forester, records in the
Bureau of Forestry show that the subject lands were never declared as
alienable and disposable and subject to private alienation prior to 1913 up to
the present.16 Moreover, as part of the reservation for provincial park
purposes, they form part of the forest zone.

It is elementary in the law governing natural resources that forest land cannot
be owned by private persons. It is not registrable and possession thereof, no
matter how lengthy, cannot convert it into private property,17 unless such
lands are reclassified and considered disposable and alienable.

Neither do the tax receipts which were presented in evidence prove ownership
of the parcels of land inasmuch as the weight of authority is that tax
declarations are not conclusive proof of ownership in land registration
cases.18chanroblesvirtuallawlibrary

Having disposed of the issue of ownership, we now come to the matter

regarding the forfeiture of improvements introduced on the subject lands. It
bears emphasis that Executive Order No. 40 was already in force at the time
the lands in question were surveyed for Diego Palomo. Petitioners also
apparently knew that the subject lands were covered under the reservation
when they filed a petition for reconstitution of the lost original certificates of
title inasmuch as the blueprint of Survey Work Order Number 21781 of Plan
II-9299 approved by the Chief of the Land Registration Office Enrique Altavas
in 1953 as a true and correct copy of the Original Plan No. II-9299 filed in the
Bureau of Lands dated September 11, 194819 contains the following note, "in
conflict with provincial reservation."20 In any case, petitioners are presumed to
know the law and the failure of the government to oppose the registration of
the lands in question is no justification for the petitioners to plead good faith in
introducing improvements on the lots.

Finally, since 1,976 square meters of the 3,384 square meters covered by TCT
3913 fall within the reservation, TCT 3913 should be annulled only with
respect to the aforesaid area. Inasmuch as the bamboo groves leveled in TCT
3913 and subject of Civil Case T-143,21 were within the perimeter of the
national park,22 no pronouncement as to damages is in order.

WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED with

the modification that TCT 3913 be annulled with respect to the 1,976 square
meter area falling within the reservation zone.
International Hardwood and Veneer Company VS. UP and Campos
From an adverse decision of the then Court of First Instance (now RTC) Laguna dated 3 June 1968 in a special civil
action for declaratory relief with injunction, Civil Case No. SC-650 entitled International Hardwood and Veneer
Company of the Philippines vs. University of the Philippines and Jose Campos, the dispositive portion of which
reads:

WHEREFORE, the Court hereby renders judgment in favor of petitioner and against the respondents:

(a) Declaring that Rep. Act No. 3990 does not empower the University of the Philippines, in lieu of the
Bureau of Internal Revenue and Bureau of Forestry, to scale, measure and seal the timber cut by the
petitioner within the tract of land referred to in said Act, and collect the corresponding forest charges
prescribed by the National Internal Revenue Code therefor; and

(b) Dismissing the respondents' counterclaim.

respondents appealed to the Court of Appeals. The appeal was docketed as C.A.-G.R. No. 49409-R.

After the parties filed their respective Briefs in 1971, the Court of Appeals (Sixth Division) promulgated on 28
December 1979 a resolution elevating the case to this Court as the "entire case hinges on the interpretation and
construction of Republic Act 3990 as it applies to a set of facts which are not disputed by the parties and therefore,
is a legal question.
1

Civil Case No. SC-650 was filed by petitioner Hardwood before the trial court on 28 June 1966.  Petitioner seeks
2

therein a declaration that respondent University of the Philippines (hereafter referred to as UP) does not have the
right to supervise and regulate the cutting and removal of timber and other forest products, to scale, measure and
seal the timber cut and/or to collect forest charges, reforestation fees and royalties from petitioner and/or impose
any other duty or burden upon the latter in that portion of its concession, covered by License Agreement No. 27-A
issued on 1 February 1963, ceded in full ownership to the UP by Republic Act No. 3990; asks that respondents be
enjoined from committing the acts complained of and prays that respondents be required to pay petitioner the sum
of P100,000.00 as damages and costs of the suit.

Its motion to dismiss on the ground of improper venue having been unfavorably acted upon, and pursuant to the
order of the trial court of 26 August 1967, respondents filed their Answer on 13 September 1987,  wherein they
3

interpose the affirmative defenses of, among others, improper venue and that the petition states no cause of action;
they further set up a counterclaim for the payment of it by petitioner of forest charges on the forest products cut and
felled within the area ceded to UP under R.A. No. 3990 from 18 June 1964, with surcharges and interests as
provided in the National Internal Revenue Code.

Petitioner filed a Reply and Answer to Counterclaim. 4

On 18 October 1967, the parties submitted a Joint Stipulation of Facts and Joint Submission of the Case for
Judgment,  which reads as follows:
5

COME NOW the parties in the above entitled case by the undersigned counsel, and respectfully submit the
following JOINT STIPULATION OF FACTS AND JOINT SUBMISSION OF THE CASE FOR JUDGMENT,
without prejudice to the presentation of evidence by either party:

x x x           x x x          x x x

2. Plaintiff is, among others, engaged in the manufacture, processing and exportation of plywood and was,
for said purpose, granted by the Government an exclusive license for a period of 25 years expiring on
February 1, 1985, to cut, collect and remove timber from that portion of timber land located in the
Municipalities of Infanta, Mauban and Sampaloc Province of Quezon and in the Municipalities of Siniloan,
Pangil, Paete, Cavite and Calauan, Province of Laguna under License Agreement No. 27-A (Amendment)
issued and promulgated by the Government through the Secretary of Agriculture and Natural Resources on
January 11, 1960. ... ;

3. That aforementioned Timber License No. 27-A (Amendment) is a renewal of the Timber License
Agreement No. 27-A previously granted by the Government to the plaintiff on June 4, 1953 to February 1,
1963. ... ;

4. Plaintiff, since June 4, 1953, continuously up to the present, has been in peaceful possession of said
timber concession and had been felling cutting and removing timber therefrom pursuant to the
aforementioned Timber License Agreement No. 27-A (Amendment) of January 11, 1960;

5. Plaintiff, on the strength of the License Agreement executed by the Government on June 4,1953 (License
Agreement No. 27-A) and of the License Agreement No. 27-A (Amendment) of January 11, 1960, has
constructed roads and other improvements and installations of the aforementioned area subject to the grant
and purchased equipment in implementation of the conditions contained in the aforementioned License
Agreement and has in connection therewith spent more than P7,000,000.00 as follows: ... ;

6. Sometime on September 25, 1961, during the effectivity of License Agreement No. 27-A (Amendment) of
January 11, 1960, the President of the Philippines issued Executive Proclamation No. 791 which reads as
follows:

x x x           x x x          x x x

RESERVING FOR THE COLLEGE OF AGRICULTURE, UNIVERSITY OF THE PHILIPPINES, AS

EXPERIMENT STATION FOR THE PROPOSED DAIRY RESEARCH AND TRAINING INSTITUTE
AND FOR AGRICULTURAL RESEARCH AND PRODUCTION STUDIES OF THIS COLLEGE A
CERTAIN PARCEL OF LAND OF THE PUBLIC DOMAIN, SITUATED PARTLY IN THE
MUNICIPALITIES OF PAETE AND PAKIL ,PROVINCE OF LAGUNA, AND PARTLY IN THE
MUNICIPALITY OF INFANTA, PROVINCE OF QUEZON, ISLAND OF LUZON.

Upon the recommendation of the Secretary of Agriculture and Natural Resources and pursuant to the
authority vested in me by law, I, Carlos P. Garcia, President of the Philippines, do hereby withdraw from sale
or settlement and reserve for the College of Agriculture, University of the Philippines, as experiment station
for the proposed Dairy Research and production studies of this College, a certain parcel of land of the Public
domain situated partly in the municipalities of Paete and Pakil province of Laguna, and partly in the
municipality of Infants, Province of Quezon, Island of Luzon, subject to private rights, if any there be, and to
the condition that the disposition of timber and other forest products found therein shall be subject to the
forestry laws and regulations, which parcel of land is more particularly described as follows, to wit:

x x x           x x x          x x x

IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the Republic of the
Philippines to be affixed.

Done in the City of Manila this 25th day of September, in the year of Our Lord, nineteen hundred and sixty-
one, and of the Independence of the Philippines, the sixteenth.

(SGD.) CARLOS P. GARCIA

President of the Philippines

x x x           x x x          x x x

7. That on or about June 18, 1964, during the effectivity of the aforementioned License Agreement No. 27-A
(Amendment) of July 11, 1960, Republic Act No. 3990 was enacted by the Congress of the Philippines and
approved by the President of the Philippines, which Republic Act provides as follows:
 AN ACT TO ESTABLISH A CENTRAL EXPERIMENT STATION FOR THE UNIVERSITY OF THE
PHILIPPINES.

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:

SECTION 1. There is hereby established a central experiment station for the use of the University of
the Philippines in connection with its research and extension functions, particularly by the College of
Agriculture, College of Veterinary Medicine and College of Arts and Sciences.

SEC. 2. For this purpose, the parcel of the public domain consisting of three thousand hectares,
more or less, located in the Municipality of Paete, Province of Laguna, the precise boundaries of
which are stated in Executive Proclamation 791, Series of 1961, is hereby ceded and transferred in
full ownership to the University of the Philippines, subject to any existing concessions, if any.

SEC. 3. All operations and activities carried on in the central experiment station shall be exempt
from taxation, local or general, any provision of law to the contrary notwithstanding, and any
incidental receipts or income therefrom shall pertain to the general fund of the University of the
Philippines.

SEC. 4. This Act shall take effect upon its approval. Approved, June 18, 1964.

8. That on the strength of the provisions of Republic Act No. 3990, and prior to the institution of the present
suit, defendants have demanded, verbally as well as in writing to plaintiff-.

(a) That the forest charges due and payable by plaintiff under the License Agreement 27-A
(Amendment) referred to in paragraph 2 hereof be paid to the University of the Philippines, instead
of the Bureau of Internal Revenue; and

(b) That the selling of any timber felled or cut by plaintiff within the boundaries of the Central
Experiment Station as defined in Republic Act No. 3990 be performed by personnel of the University
of the Philippines.

9. That the position of the plaintiff oil the demand of the defendants was fully discussed in the letter dated
April 29, 1966 of plaintiffs lawyer addressed to the President of the University of the Philippines, copy of
which is hereto attached as Annex "A" hereof.

10. That in line with its position as stated in paragraph thereof, plaintiff has refused to allow entry to
personnel of the University of the Philippines to the Central Experiment Station area assigned thereto for the
purpose of supervising the felling cutting and removal of timber therein and scaling any such timber cut and
felled prior to removal

11. That in view of the stand taken by plaintiff and in Relation to the implemetation of Republic Act No. 3990
the defendant Business Executive sent the letter quoted below to the Commissioner of Internal Revenue:

x x x           x x x          x x x

February 8, 1966

Commissioner of Internal Revenue

Manila

Re: Forest Charges of U.P. Paete Land Grant

Dear Sir:
Under Republic Act 3990 approved in June, 1964 a parcel of forest land approximately 3,500 hectares in
area was ceded in full ownership by the government to the University of the Philippines. This area is known
as Paete Land Grant, the title to which is presently issued in the name of the University of the Philippines.
The law transferring the ownership to the University of the Philippines gives the university full rights of
dominion and ownership, subject to the existing concession of International Hardwood and Veneer
Company of the Philippines. Under the terms of this law all forest charges due from the concessionaire
should now be paid to the University of the Philippines. The purpose of giving this land grant to the
University is to enable us to generate income out of the land grant and establish a research and
experimental station for the Colleges of Agriculture, Forestry, Arts and Sciences and Veterinary Medicine.

I would like, therefore, to inform you and to secure your approval of the following matters:

1. All forest charges paid by Interwood to the District Forester of Laguna from June, 1964 up to the
present should be remitted in favor of the University of the Philippines pines;

2. All forest charges presently due from Interwood shall hereafter be paid to the University of the
Philippines and lastly

3. Hereafter the University of the Philippines shall receive all forest charges and royalties due from
any logging concession at the land grant.

May we request that proper instructions be issued by the district Forester of Laguna about this matter.
Thank you.

Very truly yours,

Sgd.) JOSE C. CAMPOS JR.

Business Executive

12. That in reply to the above letter of defendant Business Executive dated February 8, 1966, the
Commissioner of Internal Revenue issued the following letter-ruling dated March 11, 1966:

x x x           x x x          x x x

March 11, 1966

U.P. Paete Land Grant

University of the Philippines
Diliman, Quezon City

Attn: Jose C. Campos, Jr.

Business Executive

Gentlemen:

This has reference to your letter dated February 8, 1966 stating as follows:

x x x           x x x          x x x

In reply thereto, I have the honor to inform you as follows:

In accordance with Section 266 of the Tax Code as amplified by Section 15(a) of Revenue Regulations No.
85, the Forest Products Regulations, forest products, cut, gathered and removed from registered private
woodlands are not subject to forest charges, but they must be invoiced when removed to another
municipality or for commercial purposes in the manner prescribed by the regulations. As the Paete Land
Grant was ceded by law to the U.P. in full private ownership and as the grant is manifestly to be considered
registered, no forest charges are actually due and payable on the timber cut and removed therefrom. The
forest charges purportedly to be paid by any concessionaire under any licensing agreement entered or to be
entered into by the U.P. are, therefore, to be considered not as the charges contemplated by the National
Internal Revenue Code but as part of the royalties payable by the concessionaires for the exploitation of the
timber resources of the land grant.

Accordingly, you queries are answered viz:

1. The University may directly collect the supposed forest charges payable by concessionaires of the
land grant.

2. The forest charges paid by International Hardwood and Veneer Company of the Philippines may
be refunded provided that a formal claim for the refund thereof is made within two years from the
date of payment. The proper claimant shall be International Hardwood and not the University.

Very truly yours,

(Sgd.) MISAEL P. VERA

Commissioner of Internal Revenue

13. That subsequently, defendant Business Executive sent the letter quoted below to the District Forester of
the province of Laguna una dated April 18, 1 966:

April 18, 1966

The District Forester

Bureau of Forestry
Sta. Cruz, Laguna

Dear Sir:

Enclosed is a copy of a letter to the Commissioner of Internal Revenue concerning the right of the University
of the Philippines to collect forest charges from the existing logging concessionaire at the Laguna Land
Grant (formerly Paete Land Grant). This tract of forest land containing some 3,500 hectares was ceded to
the University of the Philippines in full ownership by Republic Act No. 3990, approved in June, 1964. In view
thereof, the University of the Philippines requested that its authority over said land be recognized and that
the existing concessionaire, International Hardwood and Veneer Company of the Philippines, in turn pay its
forest charges directly to the University instead of to the national government.

Please take note of page "2" of the enclosed letter of the Commissioner of Internal Revenue on the official
ruling of the Bureau of Internal Revenue to the following points raised by the University:

1. That the University of the Philippines may now directly collect forest charges from INTERWOOD,
the existing logging concessionaire.

2. That forest charges paid by INTERWOOD to the Bureau of Forestry from June, 1964 up to April,
1966 shall be refunded to the University of the Philippines. In this manner, INTERWOOD is
requested to file a claim for the refund in the amount heretofore paid by it to be remitted to the
University of the Philippines.

On the basis of this letter to the Commissioner of Internal Revenue, it is understood that forest charges on
timber cut from the Laguna Land Grant as scaled by scalers of the University of the Philippines shall now be
paid directly to the University of the Philippines. In another ruling by the Commissioner of Internal Revenue,
the University, particularly the Laguna Land Grant, is exempted from all kinds of Internal Revenue taxes.

Very truly yours,

(Sgd.) Jose C. Campos, Jr.
Business Executive

14. That the above quoted letter of defendant Business Executive dated April 18, 1966 was duly endorsed
by the District Forester of the province of Laguna to the Director of Forestry.

15. That on or about June 7, 19667 the Assistant Director of Forestry addressed to plaintiff the letter dated
June 7, 1966, which states as follows:

Sirs:

This is in connection with your request for this Office to comment on your reply to the letter of Mr.
Jose C. Campos, Jr. of the University of the Philippines.

In your reply to the letter of Mr. Campos, it is stated that the University of the Philippines is claiming
the right:

(a) To scale, measure and seal the timber cut inside the area covered by the U.P. Land
Grant at Paete, Laguna;

(b) To collect the corresponding forest charges;

(c) To collect royalties aside from the forest charges; and

(d) To exercise in effect all the authority vested by law upon the Bureau of Forestry in the
cutting, removal and disposition of the timber from said area, and the authority of the Bureau
of Internal Revenue respecting the measurement and scaling of the logs and the collection of
the corresponding forest charges and other fees in connection therewith.

This office is in full accord with your arguments against the claim of the University of the Philippines
to have acquired the above rights. We believe that the right vested the INTERWOOD by virtue of
number License Agreement No. 27-A (Amendment) to utilize the timber inside subject area is still
binding and should therefore, be respected. It is on the basis of this acknowledgment that we sent
your client our letter of November 4,1965 requesting him to comment on the application of the State
University for a Special Timber License over the said area.

16. That acting on the endorsement referred to in paragraph l4, the Director of Bureau of Forestry issued the
letter ruling quoted below, dated June 30,1966:

x x x           x x x          x x x

June 30, 1966

District Forester
Sta. Cruz, Laguna

(Thru the Regional Director of Forestry, Manila)

Sir:

This concerns your inquiry contained in the 3rd paragraph of your letter dated April 26, 1966, designated as
above, as to whether or not you shall turn over the scaling work for logs cut from the area of the International
Hardwood & Veneer Company of the Philippines in the Pacto Land Grant to Scalers of the University of the
Philippines.
 In view of the ruling of the Commissioner of Internal Revenue that the Paete Land Grant, which embraces
the area of the International Hardwood & Veneer Company of the Philippines, is considered a registered
private woodland of the University of the Philippines and therefore no forest charges are actually due and
payable on the timber cut and removed therefrom, and in view further of the ruling of said Commissioner that
the forest charges purportedly to be paid by any concessionaire under any licensing agreement entered or
to be entered into by the U.P. are to be considered not as the charged contemplated by the National Internal
Revenue Code but as part of the royalties payable by the concessionaires for the exploitation of the timber
resources of the land grant, you may turn over the scaling work therein to the scalers of the U.P.

However, you should guard against the use of such licensing agreements entered or to be entered into by
the U.P. as a means of smuggling forest products from the neighboring public forests.

Very truly yours,

(SGD.) ANTONIO A. QUEJADA

x x x           x x x          x x x

On the basis of the above JOINT STIPULATION OF FACTS, the pleadings filed in the case, and whatever
additional evidence may be presented by the parties, the parties hereto, through counsel, jointly move and pray of
this Honorable Court that judgment be rendered granting full and appropriate relief, on the following issues:

1. Whether plaintiff, as of the date of present case was filed, should pay forest charges due and payable
under its timber License Agreement No. 27-A (Amendment) as set forth in paragraph 2 hereof', to the
Bureau of Internal Revenue, or to the University of the Philippines; and

2. In the event that it be found by this Honorable Court that said forest charges are to be paid to the
University of the Philippines, whether or not the University of the Philippines is entitled to supervise, through
its duly appointed personnel, the logging, telling and removal of timber within the Central Experiment Station
area as described in Republic Act No. 3990, and to scale the timber thus felled and cut.

Manila for Laguna, September 29,1967.

Upon the foregoing Stipulation of Facts, the trial court rendered its judgment on 3 June 1968 in favor of the
petitioner, the dispositive portion of which is quoted at the beginning of this decision. In deciding the case against
UP, it held:

... the court finds that the respondents' demand on the petitioner has no legal basis. In the first place, the
cession in full ownership of the tract of land referred to in the Act was expressly made 'subject to any
existing concessions.' Inasmuch as at the time of the enactment of the Act, the petitioner's timber
concession over the tract of land was existing and would continue to exist until February 1, 1985, the
University of the Philippines will acquire full ownership' and exclusive jurisdiction to control and administer
the property only after February 1, 1985. The cession of the property to the University of the Philippines is
akin to the donation of a parcel of land, subject to usufruct. The donee acquires full ownership thereof only
upon the termination of the usufruct. At the time of the donation, all what the donee acquires is the 'naked'
ownership of the property donated. In the second place, the respondents' demand cannot be valid unless
the provisions of Sees. 262 to 276 of the National Internal Revenue Code regarding the measuring of timber
cut from the forest and the collection of the prescribed forest charges by the Bureau of Internal Revenue and
Bureau of Forestry are first amended. In their arguments, the respondents tried to stretch the scope of the
provisions of Republic Act No. 3990 in order to include therein such amendment of the provisions of the
National Internal Revenue Code and Revised Administrative Code, but they failed to convince the Court, not
only because of the first reason above stated, but also because it clearly appears that such amendment is
not intended in Republic Act No. 3990, which does not contain even a remote allusion thereto in its title or a
general amendatory provision at the end. In the third place, under Republic Act No. 3990, the University of
the Philippines cannot legally use the tract of land ceded to it for purposes other than those therein
expressly provided, namely, 'for the use of the University of the Philippines in connection with its research
and extension functions, particularly by the College of Agriculture, College of Veterinary Medicine and
 College of Arts and Sciences.' Hence, upon the expiration of the petitioner's timber concession, the
University of the Philippines cannot even legally renew it or grant timber concession over the whole tract of
land or over portions thereof to other private individuals and exercise the functions of the Bureau of Internal
Revenue and Bureau of Forestry by scaling and measuring the timber cut within the area and collecting from
them the forest charges prescribed by the National Internal Revenue Code.

Respondents claim in their Brief that the trial court erred:

... WHEN IT DID NOT DISMISS THE PETITION FOR DECLARATORY RELIEF WITH INJUNCTION
INSPITE OF ITS INHERENT JURISDICTIONAL DEFECTS THAT SHOULD WARRANT A DISMISSAL.

II

... WHEN IT DECLARED THAT REPUBLIC ACT NO. 3990 DOES NOT EMPOWER THE RESPONDENT
UNIVERSITY OF THE PHILIPPINES, IN LIEU OF THE BUREAU OF INTERNAL REVENUE AND BUREAU
OF FORESTRY, TO SCALE, MEASURE AND SEAL THE TIMBER CUT BY THE PETITIONER WITHIN
THE TRACT OF LAND REFERRED TO IN SAID ACT, AND COLLECT THE CORRESPONDING FOREST
CHARGES PRESCRIBED BY THE NATIONAL INTERNAL REVENUE CODE.

1. The first assigned error is without merit. In the Joint Stipulation of Facts, the parties jointly move and pray that the
trial court render judgment granting full and appropriate remedy on the following issues:

1. Whether plaintiff, as of the date of present case was filed, should pay forest charges due and payable
under its Timber License Agreement No. 27-A (Amendment) as set forth in paragraph 2 hereof, to the
Bureau of Internal Revenue, or to the University of the Philippines; and

2. In the event that it be found by this Honorable Court that said forest charges are to be paid to the
University of the Philippines, whether or not the University of the Philippines is entitled to supervise, through
its duly appointed personnel, the logging, felling and removal of timber within the Central Experiment Station
area as described in Republic Act No. 3990, and to scale the timber thus felled

These issues bring the matter within the scope of an action for declaratory relief under Section 1, Rule 64 of the
Rules of Court and render meaningless the appeal to the rule laid down in Sarmiento, et al. vs. Caparas, et al.  that
6

declaratory relief cannot be joined by injunction, because herein petitioner, for all legal intents and purposes,
abandoned it by its failure to raise it in the Stipulation of Facts. Thus, what attains is an amendment to both
pleadings (the complaint and the answer), which is authorized by Section 5, Rule 10 of the Rules of Court. Said
section pertinently provides:

SEC. 5. Amendment to conform to or authorize presentation of evidence.— When issues not raised by the
pleadings are tried by express or implied consent of the parties, they shall be treated in all respect, as if they
had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to
conform to the evidence and to raise these issues may be made upon motion of any party at any time, even
after judgment; but failure to so amend does not affect the result of the trial by these issues. ...

The stipulation of facts and the agreement as to the issues unquestionably satisfy the requisites for declaratory
relief. (a) there must be a justiciable controversy; (b) the controversy must be between persons whose interests are
adverse; (c) the party seeking declaratory relief must have a legal interest in the controversy; and (d) the issue
invoked must be ape for judicial determination. 7

There is a justiciable controversy where there is an actual controversy, or the ripening seeds of one exists between
the parties, all of whom are sui juris and before the court, and that the declaration sought will help in ending the
controversy. A doubt becomes a justiciable controversy when it is translated into a claim of right which is actually
contested. 8
2. On the second assigned error, respondents assert that: (a) Under R.A. No. 3990, the Republic of the Philippines
may effect collection of forest charges through the University of the Philippines because the License Agreement
does not expressly provide that the forest charges shall be paid to the Bureau of Internal Revenue; in the absence
of a specific contractual provision limiting it to a particular agency in collecting forest charges owing to it, the
Republic may effect such collection through another agency. (b) Having been vested with administrative jurisdiction
over and being the owner of the tract of land in question, the UP acquired full control and benefit of the timber and
other resources within the area. Timber areas within the ceded property but outside the concession of petitioner can
be fully exploited by UP. However, in respect to timber areas within the ceded property but covered by the
concession of petitioner, only forest charges (or more appropriately, royalties) may be enjoyed by UP until the
expiration of petitioner's license. To deny it such charges would render its "full ownership" empty and futile. (c) The
UP is clearly entitled to the income derived from the tract of land ceded to it, for Section 3 of R.A. No. 3990
expressly provides:

All operations and activities carried on in the central experiment station shall be exempt from taxation, local
or general, any provision of law to the contrary notwithstanding, and any incidental receipts or income
therefrom shall pertain to the general fund of the University of the Philippines. (emphasis supplied for
emphasis).

(d) As provided by R.A. No. 3990, the UP is duty bound to operate and maintain a central experiment station; since
this law does not provide for appropriations for such purpose, it is clearly the legislative intention that the
establishment and maintenance thereof must be financed by the earnings or income from the area, which can only
come from the timber and the royalties or charges payable therefrom. This is in accordance with the general
principle that a grant of authority or jurisdiction extends to all incidents that may arise in connection with the matter
over which jurisdiction is exercised. (e) Supervision of the License Agreement in favor of petitioner by UP was
intended by R.A. No. 3990. (f) Finally, the two government agencies affected by R.A. No. 3990 have issued specific
rulings recognizing the authority of UP to collect royalties or charges and to supervise petitioner's logging
operations.

Petitioner refutes the foregoing arguments of respondents by asserting that: (a) The UP has not been granted by
R.A. No. 3990 the authority to collect forest charges or the authority to supervise the operation by the petitioner of
the timber concession affected by said Act.

The rule is well-settled that legislative grants must be construed strictly in favor of the public and most strongly
against the grantee, and nothing will be included in the grant except that which is granted expressly or by clear
implication. Under Section 262 of the Tax Code, as amended, the duties incident to the measuring of forest products
and the collection of the charges thereon shall be discharged by the Bureau of Internal Revenue under the
regulations of the Department of Finance. The reforestation fee shall be collected by the Bureau of Forestry.  The
9

supervision and regulation of the use of forest products and of the cutting and removal of forest products are vested
upon the Bureau of Forestry.  R.A. No. 3990 does not expressly, or even impliedly, grant the UP any authority to
10

collect from the holders of timber concessions on the area ceded to it forest charges due and payable to the
Government under the Tax Code, or to enforce its provisions relating to charges on forest products or to supervise
the operations of the concessions by the holders thereof; (b) The cession in full ownership of the land in question
was expressly made "subject to any concession, if any", and that petitioner's concession would continue until 1
February 1985; the UP then would acquire full ownership and exclusive jurisdiction to control and administer the
property only after 1 February 1985. The position of UP is akin to that of a donee of a parcel of land subject to
usufruct. (c) The rulings of the Commissioner of Internal Revenue and the Acting Director of the Bureau of Forestry
are patently incorrect; moreover, said agencies do not have the power to interpret the law, which is primarily a
function of the judiciary. (d) Finally, it has acquired a vested right to operate the timber concession under the
supervision and control of the Bureau of Forestry.

There is merit in the second assigned error.

Under Proclamation No. 791, dated 25 September 1961, a parcel of land of the public domain described therein,
with an area of 3,500 hectares, which is the very parcel of land subject of R.A. No. 3990, was withdrawn from sale
or settlement and was reserved for the College of Agriculture of the UP as experiment station for the proposed Dairy
Research and Training Institute and for research and production studies of said college, subject however to private
rights, if any, and to the condition that the disposition of timber and other forest products found thereon shall be
subject to forestry laws and regulations.
The above reservation is within the area covered by petitioner's timber license.

Pursuant, however, to R.A. No. 3990 which establishes a central experiment station for the use of the UP in
connection with its research and extension functions, particularly by the College of Agriculture, College of Veterinary
Medicine and College of Arts and Sciences, the above "reserved" area was "ceded and transferred in full ownership
to the University of the Philippines subject to any existing concessions, if any."

When it ceded and transferred the property to UP, the Republic of the Philippines completely removed it from the
public domain and, more specifically, in respect to the areas covered by the timber license of petitioner, removed
and segregated it from a public forest; it divested itself of its rights and title thereto and relinquished and conveyed
the same to the UP; and made the latter the absolute owner thereof, subject only to the existing concession. That
the law intended a transfer of the absolute ownership is unequivocally evidenced by its use of the word "full" to
describe it. Full means entire, complete, or possessing all particulars, or not wanting in any essential quality.  The
11

proviso regarding existing concessions refers to the timber license of petitioner. All that it means, however, is that
the right of petitioner as a timber licensee must not be affected, impaired or diminished; it must be respected. But,
insofar as the Republic of the Philippines is concerned, all its rights as grantor of the license were effectively
assigned, ceded and conveyed to UP as a consequence of the above transfer of full ownership. This is further home
out by Section 3 of R.A. No. 3990 which provides, inter alia, that "any incidental receipts or income therefrom shall
pertain to the general fund of the University of the Philippines. Having been effectively segregated and removed
from the public domain or from a public forest and, in effect, converted into a registered private woodland, the
authority and jurisdiction of the Bureau of Forestry over it were likewise terminated. This is obvious from the fact that
the condition in Proclamation No. 971 to the effect that the disposition of timber shall be subject to forestry laws and
regulations is not reproduced iii R.A. No. 3990. The latter does not likewise provide that it is subject to the conditions
set forth in the proclamation. An owner has the right to enjoy and dispose of a thing without other limitations than
those established by law.  The right to enjoy includes the jus utendi or the right to receive from the thing what it
12

produces, and the jus abutendi or the right to consume the thing by its use.  As provided for in Article 441 of the
13

Civil Code, to the owner belongs the natural fruits, the industrial fruits and the civil fruits. There are, however,
exceptions to this rules, as where the property is subject to a usufruct, in which case the usufructuary gets the
fruits.  In the instant case, that exception is made for the petitioner as licensee or grantee of the concession, which
14

has been given the license to cut, collect, and remove timber from the area ceded and transferred to UP until I
February 1985.  However, it has the correlative duty and obligation to pay the forest charges, or royalties, to the
1âwphi1

new owner, the UP, at the same rate as provided for in the Agreement. The charges should not be paid anymore to
the Republic of the Philippines through the Bureau of Internal Revenue because of the very nature of the transfer as
aforestated. Consequently, even the Bureau of Internal Revenue automatically lost its authority and jurisdiction to
measure the timber cut from the subject area and to collect forestry charges and other fees due thereon.

The foregoing disposes of the contention of petitioner that R.A. No. 3990 does not grant the UP the authority to
collect forest charges and to supervise the operations of its concession insofar as the property of the UP within it is
concerned. Its argument that it has acquired vested rights to operate its concession under the supervision and
control of the Bureau of Forestry is preposterous. The grantor, Republic of the Philippines, was by no means bound
under the License to perpetuate the Bureau as its agent. Neither is there force to its contention that legislative
grants must be construed strictly in favor of the public and most strongly against the grantee. The grant under R.A.
No. 3990 is transfer of absolute, full and entire ownership which leaves no room for a strict interpretation against the
grantee, the UP. The reservation therein made is in favor of the private party pursuant to the license, which is
nevertheless protected. It is the concession in favor of the petitioner which should, on the contrary, be bound by the
rule.

It follows then that respondent UP is entitled to supervise, through its duly appointed personnel, the logging, felling
and removal of timber within the area covered by R.A. No. 3990.

IN THE LIGHT OF ALL THE FOREGOING, judgment is hereby rendered REVERSING the decision of the trial court
in Civil Case No. C-650, rendered on 3 June 1968; DECLARING that forest charges due from and payable by
petitioner for timber cut pursuant to its License Agreement No. 27-A (Amendment) within the area ceded and
transferred to the University of the Philippine pursuant to R.A. No. 3990 shall be paid to the University of the
Philippines; DECLARING that the University of the Philippines is entitled to supervise, through its duly appointed
personnel, the logging, felling and removal of timber within the aforesaid area covered by R.A. No. 3990.

Costs against petitioner.

Republic VS. CA and Bernabe

PARAS, J.:

This is a petition for review on certiorari seeking a reversal of the decision of Respondent Court
of Appeals 1 dated February 5, 1975 in CA-G.R. No. 50076-R, entitled "EMILIO BERNABE, SR.,
Et. Al. v. REPUBLIC OF THE PHILIPPINES," affirming the order of the Court of First Instance of
Bataan dated August 14, 1971 in Cadastral Case No. 19, LRC Cadastral Record No. 1097, which
dismissed petitioner Republic’s petition for review of the decrees of registration issued pursuant
to the decision rendered on December 17, 1968 adjudicating in favor of the private Respondents
herein, the lots applied for by them, and the Resolution of Respondent Court dated March 19,
1975 denying herein Petitioner’s motion for reconsideration.

The undisputed facts are as follows: chanrob1es virtual 1aw library

Lot No. 622 of the Mariveles Cadastre was declared public land in a decision rendered before the
last war in Cadastral Case No. 19, LRC Cadastral Record No. 1097.

On July 6, 1965, Lot 622 was segregated from the forest zone and released and certified by the
Bureau of Forestry as an agricultural land for disposition under the Public Land Act (Record on
Appeal, p. 7).

On April 26, 1967, Respondents filed in the Court of First Instance of Bataan a petition to reopen
Cadastral Case No. 19, LRC Cadastral Record No. 1097, under Republic Act 931, as amended by
Republic Act 2061, concerning a portion of Lot No. 622 — Lot Nos. 792, 793, 794, 795, 796,
797, 798 — and a portion of Lot No. 324 — Lot Nos. 791 and 799 — more particularly identified
and delineated in the segregation plans of Sgs-3343, Sgs-3440, Sgs-3340, Sgs-3341, Sgs-3342
and Sgs-3339, approved by the Director of Lands, to perfect their rights and register their titles
to said lots, having allegedly acquired ownership and possession of said parcels of land by
purchase from the original owners thereof, whose possession of the same including that of the
herein Respondents, has always been continuous, open, active, exclusive, public, adverse, and
in the concept of owners thereof for more than 30 years (Record on Appeal, pp. 3-5 and 11).

On May 17, 1967, the lower court issued an Order setting the petition for hearing and directing
that the Republic of the Philippines be notified thereof by furnishing the Solicitor-General, the
Director of Lands and the Director of Forestry, a copy of said Order together with Respondents’
petition by registered mail (Record on Appeal, p. 6).

On August 24, 1967, the Director of Forestry filed an opposition to the petition praying for the
denial of the petition once the area involved is found to be within the timberland and therefore
inalienable under the Constitution (Record on Appeal, p. 7). Upon verification, however, the
Director of Forestry found the area to be the portion of the timberland already released by the
government from the mass of public forests and promptly withdrew his Opposition (Record on
Appeal, p. 8).

On September 1, 1967, the Acting Provincial Fiscal of Bataan, for and in behalf of the Director of
Lands, filed his opposition to the petition alleging that the land is still, in truth and in fact, public
land and as such cannot be the subject of a land registration proceeding under Act 496.

The lower court found that the petitioners have complied with all the terms and conditions which
would entitle them to a grant. Thus, the dispositive portion of its decision dated December 17,
1968 (Record on Appeal, p. 19), reads: jgc:chanrobles.com.ph

"WHEREFORE, the segregation plans, Sgs-3340, Sgs-3339, Sgs-3341, Sgs-3342, Sgs-3343 and
Sgs-3340 and their technical descriptions are hereby APPROVED, and pursuant to Sec. 11 of Act
2259, the court hereby adjudicates in favor of petitioners Emilio Bernabe, Sr., married; Emilio
Bernabe, Jr., married; Luz Bernabe, single; Amparo Bernabe, single and Elisa Bernabe, single,
all Filipinos and residents of Balanga, Bataan, the lots herein applied for as follows: chanrob1es virtual 1aw library

Luz Bernabe Sgs-791 82,771 sq. m.

3339

Elisa Bernabe Sgs-793 71.596 sq. m.

3341

Amparo Bernabe Sgs-794 43,399 sq. m.

3342 795 100,439 sq. m.

Josefina Bernabe Sgs-796 69,355 sq. m.

3343 797 75,100 sq. m.

Emilio Bernabe, Jr. Sgs-798 100,183 sq. m.

Sgs-3440 Sgs-799 64,052. sq. m.

and upon this decision having become final, the Commissioner of Land Registration is hereby
directed to issue the corresponding decrees of registration therefor." cralaw virtua1aw library

Pursuant to the aforecited decision, the Commissioner of Land Registration issued Decrees Nos.
N-124813-124818, all dated May 7, 1969 (Record on Appeal, pp. 20-25).

On May 7, 1979, petitioner Republic of the Philippines, acting in its behalf and in behalf of the
Director of Lands and the Director of Forestry, through the Solicitor-General, filed a petition for
review of the decrees of registration under Section 38, of Act No. 496, as amended, and the
corresponding decision of the lower court, on the grounds that the entire proceeding was vitiated
by lack of notice to the Solicitor General of the subsequent hearings of the petition for re-
opening of the cadastral proceedings; that the parcels of land subject matter of the petition to
re-open cadastral proceedings are portions of the public domain, admittedly within the
unclassified public forest of Mariveles, Bataan, opened for disposition only on or about July 6,
1965; that subsequently, respondents do not have a registerable title to the land subject matter
of the proceedings; and the lower court, without jurisdiction to decree the confirmation of
registerable title to respondents over portions of the public domain, as respondents do not
qualify under the provisions of Section 48(b) of CA 141, as amended, and that under the
circumstances, respondents employed actual fraud in procuring title over the parcels of land
(Record on Appeal, p. 25).

On May 29, 1979, respondents moved to dismiss the Petition for Review on the grounds that:
(1) The trial court has no jurisdiction over the nature of the action or suit as there is no fraud to
justify the setting aside on review of a decree of registration. If the Solicitor General was not
notified of the subsequent hearings, it was because he delegated his appearance to the
Provincial Fiscal of Bataan. Besides the setting aside or review was filed out of time. (2) The
petition states no cause of action, the parcels of land involved in the actions having been already
transferred to innocent purchasers for value long before the Solicitor-General even filed the
petition for review (Record on Appeal, pp. 27-40).

Their motion to dismiss having been held in abeyance until the hearing of the merits of the case
which was set for August 16, 1970, respondents filed their answer to the Petition for Review on
August 4, 1970. In their answer, respondents reiterated their grounds in their motion to dismiss
(Record on Appeal, pp. 40-44).

On November 12, 1970, Petitioner filed an amended Petition for Review, with the additional
allegation that after having fraudulently secured title over the parcels of land involved, the
petitioners executed simulated deeds of sale purporting to convey various lots composing
portions of the parcels involved to third parties for fictitious considerations in an obvious attempt
to remove the parcels of land involved from the coverage of Section 38 of Act 496, but in truth,
the aforementioned third parties are not innocent purchasers for value, being mere dummies of
the petitioners, holding the parcels of land involved only in trust for the petitioners. On
November 23, 1970, respondents filed their answer to the Amended Petition for Review (Record
on Appeal, p. 56).

On August 14, 1971, the lower court issued its Order denying petitioner’s Amended Petition for
Review (Record on Appeal, p. 56).

On appeal to the Court of Appeals on September 20, 1971, the questioned Order of the Court of
First Instance of Bataan, Branch I was affirmed (Rollo, p. 33).

On February 25, 1975, Petitioner filed a Motion for Reconsideration which was denied by the
Court of Appeals for lack of merit, in the Resolution of a special Division of Five, promulgated on
March 19, 1975.

Hence this petition.

Without giving due course to the Petition, the Court, through its First Division, resolved on May
5, 1975 to require the respondents to comment thereon. On May 30, 1975, respondents filed
their comment, alleging that the decision of respondent Court and the questioned resolution
were not rendered without or in excess of its jurisdiction. Neither was the discretion exercised by
respondent Court arbitrary or despotic.

In its Resolution dated June 4, 1975, the Court resolved to give due course to the Petition and
denied the urgent motion of respondents for leave to file a supplemental and/or amended
comment. Petitioners filed its Brief on November 29, 1975; respondents, on March 2, 1976.
Petitioner filed its Reply Brief on March 25, 1976 and on May 5, 1976, the case was deemed
submitted for decision.

Petitioner assigns the following errors: chanrob1es virtual 1aw library

I. THE RESPONDENT COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN TOTALLY

DISREGARDING THE UNDISPUTED FACT THAT THE LOTS CLAIMED BY HEREIN PRIVATE
RESPONDENTS BECAME AGRICULTURAL ONLY ON JULY 6, 1965 WHEN THE SAME WERE
RELEASED FROM THE FOREST ZONE AND THAT CONSEQUENTLY THEY LACK THE REQUISITE
THIRTY (30) YEARS POSSESSION TO ENTITLE THEM TO A GRANT.

II. THE RESPONDENT COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN NOT HOLDING
THAT THE ENTIRE PROCEEDING FOR REOPENING OF THE CADASTRAL CASE OVER THE LOTS IN
QUESTION WAS VITIATED BY LACK OF NOTICE TO THE SOLICITOR-GENERAL.

III. THE RESPONDENT COURT ERRED IN NOT HOLDING THAT THE ALLEGED TRANSFER OF THE
LOTS IN QUESTION BY PRIVATE RESPONDENTS TO THIRD PARTIES WHEN THEIR TITLES WERE
STILL SUBJECT TO THE ONE-YEAR PERIOD OF REVIEW CONSTITUTES FRAUD SCHEMED BY THE
TRANSFERORS AS A MEANS OF FRUSTRATING ANY ACTION AIMED AT NULLIFYING THEIR
TITLES THERETO.

The government’s cause is meritorious.

It is evident from the facts of the case at bar that private respondents did file a claim for Lot No.
622 of the Mariveles Cadastre and in fact a decision was rendered before the last war in
Cadastral Case No. 19 LRC Cadastral Record No. 1097, declaring the lot in question as public
land. It must be stressed that said lot was declared public land by virtue of a court decision
which has become final and as held by the Supreme Court aforesaid decision is res judicata.
(Republic v. Estenzo, 120 SCRA 222 [1983]). It is therefore beyond question that the trial court
has no jurisdiction to reopen the cadastral proceeding under R.A. 931 as amended by R.A. 2061
and the decision therein rendered is null and void ab initio.

Furthermore, it is undisputed that aforesaid Lot No. 622 was released as an agricultural land for
disposition under Public Land Act only on July 6, 1965. The lower court ordered the issuance of
the corresponding decrees of registration for the lots, pursuant to Sec. 48(b), C.A. 141,
otherwise known as the Public Land Act, as amended by Republic Act No. 1942, providing for the
confirmation of imperfect or incomplete titles, which reads: jgc:chanrobles.com.ph

"(b) Those who by themselves or through their predecessors in interest have been in open,
continuous, exclusive, and notorious possession and occupation of agricultural lands of the public
domain, under a bona fide claim of acquisition of ownership, for at least thirty years immediately
preceding the filing of the application for confirmation of title except when prevented by war or
force majeure. These shall be conclusively presumed to have performed all the conditions
essential to a Government grant and shall be entitled to a certificate of title under the provisions
of this chapter."
cralaw virtua1aw library

As pointed out by petitioner, the question is whether or not the lots claimed by respondents
could legally be the subject of a judicial confirmation of title under the aforequoted provisions of
the Public Land Act, as amended.

The answer is in the negative.

Section 48(b) of C.A. No. 141, as amended, applies exclusively to public agricultural land. Forest
lands or areas covered with forests are excluded. They are incapable of registration and their
inclusion in a title, whether such title be one issued during the Spanish sovereignty or under the
present Torrens system of registration, nullifies the title (Li Seng Giap v. Director of Lands, 55
Phil. 693 [1931]; Director of Lands v. Reyes, 68 SCRA 177 [1975]). Thus, possession of forest
lands, however long, cannot ripen into private ownership (Vano v. Government, 41 Phil. 161
[1920]; Adorable v. Director of Forestry, 107 Phil. 401 [1960]; Director of Forestry v. Muñoz, 23
SCRA 1183 [1968]; Director of Lands v. Abanzado, 65 SCRA 5 [1975]). A parcel of forest land is
within the exclusive jurisdiction of the Bureau of Forestry and beyond the power and jurisdiction
of the cadastral court to register under the Torrens System (Republic v. Court of Appeals, 89
SCRA 648 [1979]; Republic v. Vera (120 SCRA 210 [1983]; Director of Lands v. Court of
Appeals, 129 SCRA 689 [1984].

Thus, even if the reopening of the cadastral proceedings was at all possible, private respondents
have not qualified for a grant under Sec. 48(b) of Commonwealth Act 141, the facts being that
private respondents could only be credited with 1 year, 9 months and 20 days possession and
occupation of the lots involved, counted from July 6, 1965, the date when the land area in sitio
San Jose, barrio Cabcaban, Mariveles, Bataan, known as Bataan PMD No. 267, which includes
the lots claimed by respondents, had been segregated from the forest zone and released by the
Bureau of Forestry as an agricultural land for disposition under the Public Land Act. (Record on
Appeal, p. 19). Consequently, under the above mentioned jurisprudence, neither private
respondents nor their predecessors-in-interest could have possessed the lots for the requisite
period of thirty (30) years as disposable agricultural land.

II

Petitioner argues that the government, being a necessary party in the cadastral case, as
reopened, its counsel, the Solicitor-General, should have been furnished copies of all court
orders, notices and decisions, as in ordinary cases, in order to bind the government. Failure to
give such notice deprives the State of its day in Court, and renders the decision void. (Brief for
Petitioner, pp. 16-17).

The records show that the Solicitor-General was duly notified of the initial hearing on the petition
to reopen Cadastral Case No. 19 but thereafter, notice of subsequent hearings as well as a copy
of the decision itself promulgated by the lower court on December 19, 1968 was sent instead to
the Provincial Fiscal of Bataan, admittedly the duly authorized representative of the Solicitor-
General in the cadastral proceeding as shown in a telegram dated January 19, 1968. (Record on
Appeal, p. 47).

In the case of Republic v. Director of Lands (71 SCRA 426 [1976], the Supreme Court, applying
the time-honored principle of agency ruled that the service of the questioned decision on the
Provincial Fiscal must necessarily be service on the Solicitor-General, and added that technical
transgressions relative to the filing and service may be brushed aside when the adverse party
(this time the Director of Lands and Forestry and their counsel, the Solicitor-General) is aware of
the matter which his adversary would want the court to act upon. Once it appears that the party
is already informed by one means or another of what he is to be notified, the required service
becomes an empty gesture and strict observance thereof is considered waived. (Citing Estrada
v. Sto. Domingo, 28 SCRA 890 [1969]).

In the case at bar, it does not appear that the Solicitor General was so apprised of the decision
of the lower court in question as there is no proof that the Provincial Fiscal of Bataan ever sent
the Solicitor-General a copy thereof. Furthermore, after the 3rd Assistant Provincial Fiscal filed a
notice of appeal from the decision of the trial court, the Provincial Fiscal on March 21, 1969
manifested that he was withdrawing the appeal upon the intervention of the District Forester.
(Respondent’s Brief, p. 44).

It will be observed however that later decisions of the Supreme Court tend to be more strict in
the matter of giving notice to the Solicitor General. In a more recent case, Republic v. Court of
Appeals, 135 SCRA 161 [1985], it was established that the Solicitor-General is the only legal
counsel of the government in land registration cases and as such, he alone may withdraw the
Government’s appeal with binding effect on the latter. He is entitled to be furnished copies of all
court orders, notices and decisions and as held the reglementary thirty-day period for appeal
should be reckoned from the time the Solicitor-General’s Office is apprised of the 1970 order of
denial and not from the time the special counsel or the fiscal was served with that order. Thus,
representatives of the Solicitor General in the case at bar, had no power to decide whether or
not an appeal should be made. They should have referred the matter to the Solicitor-General
and without copies of court orders, notices and decisions, having been provided by either the
trial court or the Provincial Fiscal of Bataan to the Solicitor-General, the assailed decision has no
binding effect on the government.

III

The petition for review of Decrees Nos. N-124813 to N-124818 under Sec. 38 of Act No. 496 as
amended was filed by the Solicitor General on May 7, 1970 in representation of the Republic of
the Philippines, in the same Cadastral Case No. 19, LRC Cadastral Record No. 1097, exactly a
year after the issuance of aforesaid decrees of registration, on the ground of actual fraud.
(Record on Appeal, pp. 43-44).

The basic elements for the allowance of the reopening or review of a decree, are: (1) that the
petitioner has real or dominical right; (2) that he has been deprived thereof through fraud; (3)
that the petition is filed within one year from the issuance of the decree and (4) that the
property has not as yet been transferred to an innocent purchaser. (Libudan v. Gil, 45 SCRA 27
[1972]; Rubico, Et. Al. v. Orellana, 30 SCRA 513 [1969]). It has been held however that the
action to annul a judgment, upon the ground of fraud would be unavailing unless the fraud be
extrinsic or collateral and the facts upon which it is based have not been controverted or
resolved in the case where the judgment sought to be annulled was rendered. (Libudan v. Gil,
supra). Review of the decree demands a showing of actual (not constructive) fraud, i.e. actual
malice. (Rublico v. Orellana, supra).

In the case at bar, it cannot be said that private respondents employed actual fraud in procuring
titles over parcels of land of the public domain as it is a matter of record that the land in
question was opened for disposition and alienation only on July 6, 1965. The matter was
threshed out in the lower court and the decision of the latter was affirmed by the Court of
Appeals. Actual malice is therefore absent.

However, it has been held that, if a decree issued in pursuance of a valid decision, obtained by
fraud, may be annulled within one (1) year from entry of said decree, there is more reason to
hold that the same is true if entered in compliance with a decision suffering from a fatal
infirmity, such as want of due process, (Vda. de Cuaycong v. Vda. de Sangbengoo, 110 Phil. 118
[1960] or lack of jurisdiction of the court that decided the cadastral case. (Republic v. De
Kalintas, 25 SCRA 720 [1969]). Thus, on both counts, the case at bar can properly be the
subject of review, it having been shown that the Solicitor-General was not properly furnished the
requisite notices and copy of the assailed decision but more importantly, the lower court as
previously stated had no jurisdiction to re-open the cadastral proceeding under Republic Act 931
as amended by R.A. No. 2061.

IV

As to whether or not the transferees of the lot in question are innocent purchasers for value, it is
a well settled rule that a purchaser cannot close his eyes to facts which should put a reasonable
man upon his guard, and then claim that he acted in good faith under the belief that there was
no defect in the title of the vendor. (Leung Yee v. F.L. Strong Machiner Co., Et Al., 37 Phil.
651[1918]. Without the needed verification, he cannot claim to be an innocent purchaser for
value in contemplation of law.

Moreover, it is well-settled that a certificate of title is void, when it covers property of public
domain classified as forest or timber and mineral lands. Any title issued on non-disposable lots
even in the hands of an alleged innocent purchaser for value, shall be cancelled. (Lepanto
Consolidated Mining Company v. Dumyung, 89 SCRA 540 [1979] underscoring supplied). In the
case at bar, it will be noted that in granting titles to the land in dispute, the lower court counted
the period of possession of private respondents before the same were released as forest lands
for disposition, which release is tantamount to qualifying the latter to a grant on said lands while
they were still non-disposable. Thus, under the foregoing rulings, even assuming that the
transferees are innocent purchasers for value, their titles to said lands derived from the titles of
private respondents which were not validly issued as they cover lands still a part of the public
domain, may be cancelled.

PREMISES CONSIDERED, the assailed decision of the Court of Appeals and the decision of the
Court of First Instance are hereby SET ASIDE and REVERSED, because the lots in question still
form part of the public domain. The certificates of title issued over them are hereby ordered
CANCELLED.