G.R. No.

135385

December 6, 2000

ISAGANI CRUZ and CESAR EUROPA, petitioners,

vs.
SECRETARY OF ENVIRONMENT AND NATURAL RESOURCES, SECRETARY OF BUDGET
AND MANAGEMENT and CHAIRMAN and COMMISSIONERS OF THE NATIONAL
COMMISSION ON INDIGENOUS PEOPLES, respondents.
HON. JUAN M .FLAVIER, HON. PONCIANO BENNAGEN, BAYANI ASCARRAGA, EDTAMI
MANSAYANGAN, BASILIO WANDAG, EVELYN DUNUAN, YAOM TUGAS, ALFREMO
CARPIANO, LIBERATO A. GABIN, MATERNIDAD M. COLAS, NARCISA M. DALUPINES,
BAI KIRAM-CONNIE SATURNO, BAE MLOMO-BEATRIZ T. ABASALA, DATU
BALITUNGTUNG-ANTONIO D. LUMANDONG, DATU MANTUMUKAW TEOFISTO
SABASALES, DATU EDUAARDO BANDA, DATU JOEL UNAD, DATU RAMON BAYAAN,
TIMUAY JOSE ANOY, TIMUAY MACARIO D. SALACAO, TIMUAY EDWIN B. ENDING, DATU
SAHAMPONG MALANAW VI, DATU BEN PENDAO CABIGON, BAI NANAPNAY-LIZA
SAWAY, BAY INAY DAYA-MELINDA S. REYMUNDO, BAI TINANGHAGA HELINITA T.
PANGAN, DATU MAKAPUKAW ADOLINO L. SAWAY, DATU MAUDAYAW-CRISPEN SAWAY,
VICKY MAKAY, LOURDES D. AMOS, GILBERT P. HOGGANG, TERESA GASPAR, MANUEL
S. ONALAN, MIA GRACE L. GIRON, ROSEMARIE G. PE, BENITO CARINO, JOSEPH JUDE
CARANTES, LYNETTE CARANTES-VIVAL, LANGLEY SEGUNDO, SATUR S. BUGNAY,
CARLING DOMULOT, ANDRES MENDIOGRIN, LEOPOLDO ABUGAN, VIRGILIO
CAYETANO, CONCHITA G. DESCAGA, LEVY ESTEVES, ODETTE G. ESTEVEZ, RODOLFO
C. AGUILAR, MAURO VALONES, PEPE H. ATONG, OFELIA T. DAVI, PERFECTO B.
GUINOSAO, WALTER N. TIMOL, MANUEL T. SELEN, OSCAR DALUNHAY, RICO O.
SULATAN, RAFFY MALINDA, ALFREDO ABILLANOS, JESSIE ANDILAB, MIRLANDO H.
MANGKULINTAS, SAMIE SATURNO, ROMEO A. LINDAHAY, ROEL S. MANSANG-CAGAN,
PAQUITO S. LIESES, FILIPE G. SAWAY, HERMINIA S. SAWAY, JULIUS S. SAWAY,
LEONARDA SAWAY, JIMMY UGYUB, SALVADOR TIONGSON, VENANCIO APANG,
MADION MALID, SUKIM MALID, NENENG MALID, MANGKATADONG AUGUSTO DIANO,
JOSEPHINE M. ALBESO, MORENO MALID, MARIO MANGCAL, FELAY DIAMILING,
SALOME P. SARZA, FELIPE P. BAGON, SAMMY SALNUNGAN, ANTONIO D. EMBA,
NORMA MAPANSAGONOS, ROMEO SALIGA, SR., JERSON P. GERADA, RENATO T.
BAGON, JR., SARING MASALONG, SOLEDAD M. GERARDA, ELIZABETH L. MENDI,
MORANTE S. TIWAN, DANILO M. MALUDAO, MINORS MARICEL MALID, represented by
her father CORNELIO MALID, MARCELINO M. LADRA, represented by her father MONICO
D. LADRA, JENNYLYN MALID, represented by her father TONY MALID, ARIEL M.
EVANGELISTA, represented by her mother LINAY BALBUENA, EDWARD M. EMUY, SR.,
SUSAN BOLANIO, OND, PULA BATO B'LAAN TRIBAL FARMER'S ASSOCIATION, INTERPEOPLE'S EXCHANGE, INC. and GREEN FORUM-WESTERN VISAYAS,intervenors.
COMMISSION ON HUMAN RIGHTS, intervenor.
IKALAHAN INDIGENOUS PEOPLE and HARIBON FOUNDATION FOR THE
CONSERVATION OF NATURAL RESOURCES, INC., intervenor.
RESOLUTION
PER CURIAM:
Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition and mandamus as
citizens and taxpayers, assailing the constitutionality of certain provisions of Republic Act No.
8371 (R.A. 8371), otherwise known as the Indigenous Peoples Rights Act of 1997 (IPRA), and
its Implementing Rules and Regulations (Implementing Rules).
In its resolution of September 29, 1998, the Court required respondents to comment. 1 In
compliance, respondents Chairperson and Commissioners of the National Commission on

Indigenous Peoples (NCIP), the government agency created under the IPRA to implement its
provisions, filed on October 13, 1998 their Comment to the Petition, in which they defend the
constitutionality of the IPRA and pray that the petition be dismissed for lack of merit.
On October 19, 1998, respondents Secretary of the Department of Environment and Natural
Resources (DENR) and Secretary of the Department of Budget and Management (DBM) filed
through the Solicitor General a consolidated Comment. The Solicitor General is of the view that
the IPRA is partly unconstitutional on the ground that it grants ownership over natural resources
to indigenous peoples and prays that the petition be granted in part.
On November 10, 1998, a group of intervenors, composed of Sen. Juan Flavier, one of the
authors of the IPRA, Mr. Ponciano Bennagen, a member of the 1986 Constitutional Commission,
and the leaders and members of 112 groups of indigenous peoples (Flavier, et. al), filed their
Motion for Leave to Intervene. They join the NCIP in defending the constitutionality of IPRA and
praying for the dismissal of the petition.
On March 22, 1999, the Commission on Human Rights (CHR) likewise filed a Motion to
Intervene and/or to Appear as Amicus Curiae. The CHR asserts that IPRA is an expression of
the principle of parens patriae and that the State has the responsibility to protect and guarantee
the rights of those who are at a serious disadvantage like indigenous peoples. For this reason it
prays that the petition be dismissed.
On March 23, 1999, another group, composed of the Ikalahan Indigenous People and the
Haribon Foundation for the Conservation of Natural Resources, Inc. (Haribon, et al.), filed a
motion to Intervene with attached Comment-in-Intervention. They agree with the NCIP and
Flavier, et al. that IPRA is consistent with the Constitution and pray that the petition for
prohibition and mandamus be dismissed.
The motions for intervention of the aforesaid groups and organizations were granted.
Oral arguments were heard on April 13, 1999. Thereafter, the parties and intervenors filed their
respective memoranda in which they reiterate the arguments adduced in their earlier pleadings
and during the hearing.
Petitioners assail the constitutionality of the following provisions of the IPRA and its
Implementing Rules on the ground that they amount to an unlawful deprivation of the States
ownership over lands of the public domain as well as minerals and other natural resources
therein, in violation of the regalian doctrine embodied in Section 2, Article XII of the Constitution:
"(1) Section 3(a) which defines the extent and coverage of ancestral domains, and Section 3(b)
which, in turn, defines ancestral lands;
"(2) Section 5, in relation to section 3(a), which provides that ancestral domains including
inalienable public lands, bodies of water, mineral and other resources found within ancestral
domains are private but community property of the indigenous peoples;
"(3) Section 6 in relation to section 3(a) and 3(b) which defines the composition of ancestral
domains and ancestral lands;
"(4) Section 7 which recognizes and enumerates the rights of the indigenous peoples over the
ancestral domains;

(5) Section 8 which recognizes and enumerates the rights of the indigenous peoples over the
ancestral lands;
"(6) Section 57 which provides for priority rights of the indigenous peoples in the harvesting,
extraction, development or exploration of minerals and other natural resources within the areas
claimed to be their ancestral domains, and the right to enter into agreements with nonindigenous
peoples for the development and utilization of natural resources therein for a period not
exceeding 25 years, renewable for not more than 25 years; and
"(7) Section 58 which gives the indigenous peoples the responsibility to maintain, develop,
protect and conserve the ancestral domains and portions thereof which are found to be
necessary for critical watersheds, mangroves, wildlife sanctuaries, wilderness, protected areas,
forest cover or reforestation."2
Petitioners also content that, by providing for an all-encompassing definition of "ancestral
domains" and "ancestral lands" which might even include private lands found within said areas,
Sections 3(a) and 3(b) violate the rights of private landowners.3
In addition, petitioners question the provisions of the IPRA defining the powers and jurisdiction of
the NCIP and making customary law applicable to the settlement of disputes involving ancestral
domains and ancestral lands on the ground that these provisions violate the due process clause
of the Constitution.4
These provisions are:
"(1) sections 51 to 53 and 59 which detail the process of delineation and recognition of
ancestral domains and which vest on the NCIP the sole authority to delineate
ancestral domains and ancestral lands;
"(2) Section 52[i] which provides that upon certification by the NCIP that a particular
area is an ancestral domain and upon notification to the following officials, namely, the
Secretary of Environment and Natural Resources, Secretary of Interior and Local
Governments, Secretary of Justice and Commissioner of the National Development
Corporation, the jurisdiction of said officials over said area terminates;
"(3) Section 63 which provides the customary law, traditions and practices of
indigenous peoples shall be applied first with respect to property rights, claims of
ownership, hereditary succession and settlement of land disputes, and that any doubt
or ambiguity in the interpretation thereof shall be resolved in favor of the indigenous
peoples;
"(4) Section 65 which states that customary laws and practices shall be used to
resolve disputes involving indigenous peoples; and
"(5) Section 66 which vests on the NCIP the jurisdiction over all claims and disputes
involving rights of the indigenous peoples."5
Finally, petitioners assail the validity of Rule VII, Part II, Section 1 of the NCIP Administrative
Order No. 1, series of 1998, which provides that "the administrative relationship of the NCIP to
the Office of the President is characterized as a lateral but autonomous relationship for purposes
of policy and program coordination." They contend that said Rule infringes upon the Presidents
power of control over executive departments under Section 17, Article VII of the Constitution. 6

Petitioners pray for the following:

"(1) A declaration that Sections 3, 5, 6, 7, 8, 52[I], 57, 58, 59, 63, 65 and 66 and other
related provisions of R.A. 8371 are unconstitutional and invalid;
"(2) The issuance of a writ of prohibition directing the Chairperson and Commissioners
of the NCIP to cease and desist from implementing the assailed provisions of R.A.
8371 and its Implementing Rules;
"(3) The issuance of a writ of prohibition directing the Secretary of the Department of
Environment and Natural Resources to cease and desist from implementing
Department of Environment and Natural Resources Circular No. 2, series of 1998;
"(4) The issuance of a writ of prohibition directing the Secretary of Budget and
Management to cease and desist from disbursing public funds for the implementation
of the assailed provisions of R.A. 8371; and
"(5) The issuance of a writ of mandamus commanding the Secretary of Environment
and Natural Resources to comply with his duty of carrying out the States
constitutional mandate to control and supervise the exploration, development,
utilization and conservation of Philippine natural resources." 7
After due deliberation on the petition, the members of the Court voted as follows:
Seven (7) voted to dismiss the petition. Justice Kapunan filed an opinion, which the Chief Justice
and Justices Bellosillo, Quisumbing, and Santiago join, sustaining the validity of the challenged
provisions of R.A. 8371. Justice Puno also filed a separate opinion sustaining all challenged
provisions of the law with the exception of Section 1, Part II, Rule III of NCIP Administrative
Order No. 1, series of 1998, the Rules and Regulations Implementing the IPRA, and Section 57
of the IPRA which he contends should be interpreted as dealing with the large-scale exploitation
of natural resources and should be read in conjunction with Section 2, Article XII of the 1987
Constitution. On the other hand, Justice Mendoza voted to dismiss the petition solely on the
ground that it does not raise a justiciable controversy and petitioners do not have standing to
question the constitutionality of R.A. 8371.
Seven (7) other members of the Court voted to grant the petition. Justice Panganiban filed a
separate opinion expressing the view that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and related
provisions of R.A. 8371 are unconstitutional. He reserves judgment on the constitutionality of
Sections 58, 59, 65, and 66 of the law, which he believes must await the filing of specific cases
by those whose rights may have been violated by the IPRA. Justice Vitug also filed a separate
opinion expressing the view that Sections 3(a), 7, and 57 of R.A. 8371 are unconstitutional.
Justices Melo, Pardo, Buena, Gonzaga-Reyes, and De Leon join in the separate opinions of
Justices Panganiban and Vitug.
As the votes were equally divided (7 to 7) and the necessary majority was not obtained, the case
was redeliberated upon. However, after redeliberation, the voting remained the same.
Accordingly, pursuant to Rule 56, Section 7 of the Rules of Civil Procedure, the petition is
DISMISSED.
SO ORDERED.

G.R. No. 167707

On April 14, 1976, the Department of Environment and Natural Resources (DENR) approved the
National Reservation Survey of Boracay

October 8, 2008

THE SECRETARY OF THE DEPARTMENT OF ENVIRONMENT AND NATURAL

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

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

G.R. No. G.R. No. 173775

October 8, 2008

DR. ORLANDO SACAY and WILFREDO GELITO, joined by THE LANDOWNERS OF

BORACAY SIMILARLY SITUATED NAMED IN A LIST, ANNEX "A" OF THIS
PETITION, petitioners,
vs.
THE SECRETARY OF THE DEPARTMENT OF ENVIRONMENT AND NATURAL
RESOURCES, THE REGIONAL TECHNICAL DIRECTOR FOR LANDS, LANDS
MANAGEMENT BUREAU, REGION VI, PROVINCIAL ENVIRONMENT AND NATURAL
RESOURCES OFFICER, KALIBO, AKLAN, respondents.
DECISION
REYES, R.T., J.:
AT stake in these consolidated cases is the right of the present occupants of Boracay Island to
secure titles over their occupied lands.
There are two consolidated petitions. The first is G.R. No. 167707, a petition for review
on certiorari of the Decision1 of the Court of Appeals (CA) affirming that2 of the Regional Trial
Court (RTC) in Kalibo, Aklan, which granted the petition for declaratory relief filed by
respondents-claimants Mayor Jose Yap, et al. and ordered the survey of Boracay for titling
purposes. The second is G.R. No. 173775, a petition for prohibition, mandamus, and nullification
of Proclamation No. 10645">[3] issued by President Gloria Macapagal-Arroyo classifying
Boracay into reserved forest and agricultural land.
The Antecedents
G.R. No. 167707
Boracay Island in the Municipality of Malay, Aklan, with its powdery white sand beaches and
warm crystalline waters, is reputedly a premier Philippine tourist destination. The island is also
home to 12,003 inhabitants4 who live in the bone-shaped islands three barangays.5

Island,6 which identified several lots as being occupied or claimed by named persons. 7
On November 10, 1978, then President Ferdinand Marcos issued Proclamation
No. 18018 declaring Boracay Island, among other islands, caves and peninsulas in the
Philippines, as tourist zones and marine reservesunder the administration of the Philippine
Tourism Authority (PTA). President Marcos later approved the issuance of PTA Circular 3829 dated September 3, 1982, to implement Proclamation No. 1801.
Claiming that Proclamation No. 1801 and PTA Circular No 3-82 precluded them from filing an
application for judicial confirmation of imperfect title or survey of land for titling purposes,
respondents-claimants
Mayor Jose S. Yap, Jr., Libertad Talapian, Mila Y. Sumndad, and Aniceto Yap filed a petition for
declaratory relief with the RTC in Kalibo, Aklan.
In their petition, respondents-claimants alleged that Proclamation No. 1801 and PTA Circular No.
3-82 raised doubts on their right to secure titles over their occupied lands. They declared that
they themselves, or through their predecessors-in-interest, had been in open, continuous,
exclusive, and notorious possession and occupation in Boracay since June 12, 1945, or earlier
since time immemorial. They declared their lands for tax purposes and paid realty taxes on
them.10
Respondents-claimants posited that Proclamation No. 1801 and its implementing Circular did
not place Boracay beyond the commerce of man. Since the Island was classified as a tourist
zone, it was susceptible of private ownership. Under Section 48(b) of Commonwealth Act (CA)
No. 141, otherwise known as the Public Land Act, they had the right to have the lots registered
in their names through judicial confirmation of imperfect titles.
The Republic, through the Office of the Solicitor General (OSG), opposed the petition for
declaratory relief. The OSG countered that Boracay Island was an unclassified land of the
public domain. It formed part of the mass of lands classified as "public forest," which was not
available for disposition pursuant to Section 3(a) of Presidential Decree (PD) No. 705 or the
Revised Forestry Code,11 as amended.
The OSG maintained that respondents-claimants reliance on PD No. 1801 and PTA Circular No.
3-82 was misplaced. Their right to judicial confirmation of title was governed by CA No. 141 and
PD No. 705. Since Boracay Island had not been classified as alienable and disposable,
whatever possession they had cannot ripen into ownership.
During pre-trial, respondents-claimants and the OSG stipulated on the following facts: (1)
respondents-claimants were presently in possession of parcels of land in Boracay Island; (2)
these parcels of land were planted with coconut trees and other natural growing trees; (3) the
coconut trees had heights of more or less twenty (20) meters and were planted more or less fifty
(50) years ago; and (4) respondents-claimants declared the land they were occupying for tax
purposes.12
The parties also agreed that the principal issue for resolution was purely legal: whether
Proclamation No. 1801 posed any legal hindrance or impediment to the titling of the lands in
Boracay. They decided to forego with the trial and to submit the case for resolution upon
submission of their respective memoranda.13

The RTC took judicial notice14 that certain parcels of land in Boracay Island, more particularly
Lots 1 and 30, Plan PSU-5344, were covered by Original Certificate of Title No. 19502 (RO
2222) in the name of the Heirs of Ciriaco S. Tirol. These lots were involved in Civil Case Nos.
5222 and 5262 filed before the RTC of Kalibo, Aklan.15 The titles were issued on
August 7, 1933.16
RTC and CA Dispositions
On July 14, 1999, the RTC rendered a decision in favor of respondents-claimants, with
a fallo reading:
WHEREFORE, in view of the foregoing, the Court declares that Proclamation No. 1801 and PTA
Circular No. 3-82 pose no legal obstacle to the petitioners and those similarly situated to acquire
title to their lands in Boracay, in accordance with the applicable laws and in the manner
prescribed therein; and to have their lands surveyed and approved by respondent Regional
Technical Director of Lands as the approved survey does not in itself constitute a title to the land.
SO ORDERED.17
The RTC upheld respondents-claimants right to have their occupied lands titled in their name. It
ruled that neither Proclamation No. 1801 nor PTA Circular No. 3-82 mentioned that lands in
Boracay were inalienable or could not be the subject of disposition. 18 The Circular itself
recognized private ownership of lands.19 The trial court cited Sections 8720 and 5321 of the Public
Land Act as basis for acknowledging private ownership of lands in Boracay and that only those
forested areas in public lands were declared as part of the forest reserve.22
The OSG moved for reconsideration but its motion was denied.23 The Republic then appealed to
the CA.
On December 9, 2004, the appellate court affirmed in toto the RTC decision, disposing as
follows:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DENYING
the appeal filed in this case and AFFIRMING the decision of the lower court. 24
The CA held that respondents-claimants could not be prejudiced by a declaration that the lands
they occupied since time immemorial were part of a forest reserve.
Again, the OSG sought reconsideration but it was similarly denied.25 Hence, the present petition
under Rule 45.
G.R. No. 173775
On May 22, 2006, during the pendency of G.R. No. 167707, President Gloria Macapagal-Arroyo
issued Proclamation No. 106426 classifying Boracay Island into four hundred (400) hectares of
reserved forest land (protection purposes) and six hundred twenty-eight and 96/100 (628.96)
hectares of agricultural land (alienable and disposable). The Proclamation likewise provided for
a fifteen-meter buffer zone on each side of the centerline of roads and trails, reserved for rightof-way and which shall form part of the area reserved for forest land protection purposes.

On August 10, 2006, petitioners-claimants Dr. Orlando Sacay,27 Wilfredo Gelito,28 and other
landowners29 in Boracay filed with this Court an original petition for prohibition, mandamus, and
nullification of Proclamation No. 1064.30 They allege that the Proclamation infringed on their
"prior vested rights" over portions of Boracay. They have been in continued possession of their
respective lots in Boracay since time immemorial. They have also invested billions of pesos in
developing their lands and building internationally renowned first class resorts on their lots. 31
Petitioners-claimants contended that there is no need for a proclamation reclassifying Boracay
into agricultural land. Being classified as neither mineral nor timber land, the island
is deemed agricultural pursuant to the Philippine Bill of 1902 and Act No. 926, known as the first
Public Land Act.32 Thus, their possession in the concept of owner for the required period entitled
them to judicial confirmation of imperfect title.
Opposing the petition, the OSG argued that petitioners-claimants do not have a vested right over
their occupied portions in the island. Boracay is an unclassified public forest land pursuant to
Section 3(a) of PD No. 705. Being public forest, the claimed portions of the island are inalienable
and cannot be the subject of judicial confirmation of imperfect title. It is only the executive
department, not the courts, which has authority to reclassify lands of the public domain into
alienable and disposable lands. There is a need for a positive government act in order to release
the lots for disposition.
On November 21, 2006, this Court ordered the consolidation of the two petitions as they
principally involve the same issues on the land classification of Boracay Island.33
Issues
G.R. No. 167707
The OSG raises the lone issue of whether Proclamation No. 1801 and PTA Circular No. 3-82
pose any legal obstacle for respondents, and all those similarly situated, to acquire title to their
occupied lands in Boracay Island.34
G.R. No. 173775
Petitioners-claimants hoist five (5) issues, namely:
I.
AT THE TIME OF THE ESTABLISHED POSSESSION OF PETITIONERS IN CONCEPT OF
OWNER OVER THEIR RESPECTIVE AREAS IN BORACAY, SINCE TIME IMMEMORIAL OR
AT THE LATEST SINCE 30 YRS. PRIOR TO THE FILING OF THE PETITION FOR
DECLARATORY RELIEF ON NOV. 19, 1997, WERE THE AREAS OCCUPIED BY THEM
PUBLIC AGRICULTURAL LANDS AS DEFINED BY LAWS THEN ON JUDICIAL
CONFIRMATION OF IMPERFECT TITLES OR PUBLIC FOREST AS DEFINED BY SEC. 3a, PD
705?
II.
HAVE PETITIONERS OCCUPANTS ACQUIRED PRIOR VESTED RIGHT OF PRIVATE
OWNERSHIPOVER THEIR OCCUPIED PORTIONS OF BORACAY LAND, DESPITE THE
FACT THAT THEY HAVE NOT APPLIED YET FOR JUDICIAL CONFIRMATION OF
IMPERFECT TITLE?

III.
IS THE EXECUTIVE DECLARATION OF THEIR AREAS AS ALIENABLE AND
DISPOSABLE UNDER SEC 6, CA 141 [AN] INDISPENSABLE PRE-REQUISITE FOR
PETITIONERS TO OBTAIN TITLEUNDER THE TORRENS SYSTEM?
IV.
IS THE ISSUANCE OF PROCLAMATION 1064 ON MAY 22, 2006, VIOLATIVE OF THE PRIOR
VESTED RIGHTS TO PRIVATE OWNERSHIP OF PETITIONERS OVER THEIR LANDS IN
BORACAY, PROTECTED BY THE DUE PROCESS CLAUSE OF THE CONSTITUTION OR IS
PROCLAMATION 1064 CONTRARY TO SEC. 8, CA 141, OR SEC. 4(a) OF RA 6657.
V.
CAN RESPONDENTS BE COMPELLED BY MANDAMUS TO ALLOW THE SURVEY AND TO
APPROVE THE SURVEY PLANS FOR PURPOSES OF THE APPLICATION FOR TITLING OF
THE LANDS OF PETITIONERS IN BORACAY?35 (Underscoring supplied)
In capsule, the main issue is whether private claimants (respondents-claimants in G.R. No.
167707 and petitioners-claimants in G.R. No. 173775) have a right to secure titles over their
occupied portions in Boracay. The twin petitions pertain to their right, if any, to judicial
confirmation of imperfect title under CA No. 141, as amended. They do not involve their right to
secure title under other pertinent laws.
Our Ruling
Regalian Doctrine and power of the executive
to reclassify lands of the public domain
Private claimants rely on three (3) laws and executive acts in their bid for judicial confirmation of
imperfect title, namely: (a) Philippine Bill of 190236 in relation to Act No. 926, later amended
and/or superseded by Act No. 2874 and CA No. 141;37 (b) Proclamation No. 180138 issued by
then President Marcos; and (c) Proclamation No. 106439 issued by President Gloria MacapagalArroyo. We shall proceed to determine their rights to apply for judicial confirmation of imperfect
title under these laws and executive acts.
But first, a peek at the Regalian principle and the power of the executive to reclassify lands of
the public domain.
The 1935 Constitution classified lands of the public domain into agricultural, forest or
timber.40 Meanwhile, the 1973 Constitution provided the following divisions: agricultural,
industrial or commercial, residential, resettlement, mineral, timber or forest and grazing lands,
and such other classes as may be provided by law,41 giving the government great leeway for
classification.42 Then the 1987 Constitution reverted to the 1935 Constitution classification with
one addition: national parks.43 Of these, only agricultural lands may be alienated.44 Prior to
Proclamation No. 1064 of May 22, 2006, Boracay Island had never been expressly and
administratively classified under any of these grand divisions. Boracay was an unclassified land
of the public domain.

The Regalian Doctrine dictates that all lands of the public domain belong to the State, that the
State is the source of any asserted right to ownership of land and charged with the conservation
of such patrimony.45 The doctrine has been consistently adopted under the 1935, 1973, and
1987 Constitutions.46
All lands not otherwise appearing to be clearly within private ownership are presumed to belong
to the State.47Thus, all lands that have not been acquired from the government, either by
purchase or by grant, belong to the State as part of the inalienable public domain.48 Necessarily,
it is up to the State to determine if lands of the public domain will be disposed of for private
ownership. The government, as the agent of the state, is possessed of the plenary power as the
persona in law to determine who shall be the favored recipients of public lands, as well as under
what terms they may be granted such privilege, not excluding the placing of obstacles in the way
of their exercise of what otherwise would be ordinary acts of ownership.49
Our present land law traces its roots to the Regalian Doctrine. Upon the Spanish conquest of the
Philippines, ownership of all lands, territories and possessions in the Philippines passed to the
Spanish Crown.50 The Regalian doctrine was first introduced in the Philippines through the Laws
of the Indies and the Royal Cedulas,which laid the foundation that "all lands that were not
acquired from the Government, either by purchase or by grant, belong to the public domain."51
The Laws of the Indies was followed by the Ley Hipotecaria or the Mortgage Law of 1893. The
Spanish Mortgage Law provided for the systematic registration of titles and deeds as well as
possessory claims.52
The Royal Decree of 1894 or the Maura Law53 partly amended the Spanish Mortgage Law and
the Laws of the Indies. It established possessory information as the method of legalizing
possession of vacant Crown land, under certain conditions which were set forth in said
decree.54 Under Section 393 of the Maura Law, an informacion posesoria or possessory
information title,55 when duly inscribed in the Registry of Property, is converted into a title of
ownership only after the lapse of twenty (20) years of uninterrupted possession which must be
actual, public, and adverse,56 from the date of its inscription.57 However, possessory information
title had to be perfected one year after the promulgation of the Maura Law, or until April 17,
1895. Otherwise, the lands would revert to the State.58
In sum, private ownership of land under the Spanish regime could only be founded on royal
concessions which took various forms, namely: (1) titulo real or royal grant; (2) concesion
especial or special grant; (3) composicion con el estado or adjustment title; (4) titulo de
compra or title by purchase; and (5) informacion posesoria or possessory information title.59>
The first law governing the disposition of public lands in the Philippines under American rule
was embodied in the Philippine Bill of 1902.60 By this law, lands of the public domain in the
Philippine Islands were classified into three (3) grand divisions, to wit: agricultural, mineral, and
timber or forest lands.61 The act provided for, among others, the disposal of mineral lands by
means of absolute grant (freehold system) and by lease (leasehold system). 62 It also provided
the definition by exclusion of "agricultural public lands."63 Interpreting the meaning of "agricultural
lands" under the Philippine Bill of 1902, the Court declared in Mapa v. Insular Government:64
x x x In other words, that the phrase "agricultural land" as used in Act No. 926 means those
public lands acquired from Spain which are not timber or mineral lands. x x x65 (Emphasis
Ours)
On February 1, 1903, the Philippine Legislature passed Act No. 496, otherwise known as the
Land Registration Act. The act established a system of registration by which recorded title
becomes absolute, indefeasible, and imprescriptible. This is known as the Torrens system.66

Concurrently, on October 7, 1903, the Philippine Commission passed Act No. 926, which was
the first Public Land Act. The Act introduced the homestead system and made provisions for
judicial and administrative confirmation of imperfect titles and for the sale or lease of public
lands. It permitted corporations regardless of the nationality of persons owning the controlling
stock to lease or purchase lands of the public domain.67 Under the Act, open, continuous,
exclusive, and notorious possession and occupation of agricultural lands for the next ten (10)
years preceding July 26, 1904 was sufficient for judicial confirmation of imperfect title.68
On November 29, 1919, Act No. 926 was superseded by Act No. 2874, otherwise known as the
second Public Land Act. This new, more comprehensive law limited the exploitation of
agricultural lands to Filipinos and Americans and citizens of other countries which gave Filipinos
the same privileges. For judicial confirmation of title, possession and occupation en concepto
dueo since time immemorial, or since July 26, 1894, was required.69

secure a certification from the government that the land claimed to have been possessed for the
required number of years is alienable and disposable.86
In the case at bar, no such proclamation, executive order, administrative action, report, statute,
or certification was presented to the Court. The records are bereft of evidence showing that,
prior to 2006, the portions of Boracay occupied by private claimants were subject of a
government proclamation that the land is alienable and disposable. Absent such well-nigh
incontrovertible evidence, the Court cannot accept the submission that lands occupied by private
claimants were already open to disposition before 2006. Matters of land classification or
reclassification cannot be assumed. They call for proof.87

After the passage of the 1935 Constitution, CA No. 141 amended Act No. 2874 on December 1,
1936. To this day, CA No. 141, as amended, remains as the existing general law governing the
classification and disposition of lands of the public domain other than timber and mineral
lands,70 and privately owned lands which reverted to the State.71

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

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

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

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

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

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

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

A positive act declaring land as alienable and disposable is required. In keeping with the
presumption of State ownership, the Court has time and again emphasized that there must be a
positive act of the government, such as an official proclamation,80 declassifying inalienable
public land into disposable land for agricultural or other purposes.81 In fact, Section 8 of CA No.
141 limits alienable or disposable lands only to those lands which have been "officially delimited
and classified."82
The burden of proof in overcoming the presumption of State ownership of the lands of the public
domain is on the person applying for registration (or claiming ownership), who must prove that
the land subject of the application is alienable or disposable.83 To overcome this presumption,
incontrovertible evidence must be established that the land subject of the application (or claim)
is alienable or disposable.84 There must still be a positive act declaring land of the public domain
as alienable and disposable. To prove that the land subject of an application for registration is
alienable, the applicant must establish the existence of a positive act of the government such as
a presidential proclamation or an executive order; an administrative action; investigation reports
of Bureau of Lands investigators; and a legislative act or a statute.85 The applicant may also

Petitioners reliance upon Ramos v. Director of Lands and Ankron v. Government is misplaced.
These cases were decided under the Philippine Bill of 1902 and the first Public Land Act No. 926
enacted by the Philippine Commission on October 7, 1926, under which there was no legal
provision vesting in the Chief Executive or President of the Philippines the power to classify
lands of the public domain into mineral, timber and agricultural so that the courts then were free
to make corresponding classifications in justiciable cases, or were vested with implicit power to
do so, depending upon the preponderance of the evidence.93
To aid the courts in resolving land registration cases under Act No. 926, it was then necessary to
devise a presumption on land classification. Thus evolved the dictum in Ankron that "the courts
have a right to presume, in the absence of evidence to the contrary, that in each case the lands
are agricultural lands until the contrary is shown."94
But We cannot unduly expand the presumption in Ankron and De Aldecoa to an argument that
all lands of the public domain had been automatically reclassified as disposable and alienable

agricultural lands. By no stretch of imagination did the presumption convert all lands of the public
domain into agricultural lands.
If We accept the position of private claimants, the Philippine Bill of 1902 and Act No. 926 would
have automatically made all lands in the Philippines, except those already classified as timber or
mineral land, alienable and disposable lands. That would take these lands out of State
ownership and worse, would be utterly inconsistent with and totally repugnant to the longentrenched Regalian doctrine.
The presumption in Ankron and De Aldecoa attaches only to land registration cases brought
under the provisions of Act No. 926, or more specifically those cases dealing with judicial and
administrative confirmation of imperfect titles. The presumption applies to an applicant for
judicial or administrative conformation of imperfect title under Act No. 926. It certainly cannot
apply to landowners, such as private claimants or their predecessors-in-interest, who failed to
avail themselves of the benefits of Act No. 926. As to them, their land remained unclassified and,
by virtue of the Regalian doctrine, continued to be owned by the State.
In any case, the assumption in Ankron and De Aldecoa was not absolute. Land classification
was, in the end, dependent on proof. If there was proof that the land was better suited for nonagricultural uses, the courts could adjudge it as a mineral or timber land despite the
presumption. In Ankron, this Court stated:
In the case of Jocson vs. Director of Forestry (supra), the Attorney-General admitted in effect
that whether the particular land in question belongs to one class or another is a question of fact.
The mere fact that a tract of land has trees upon it or has mineral within it is not of itself sufficient
to declare that one is forestry land and the other, mineral land. There must be some proof of the
extent and present or future value of the forestry and of the minerals. While, as we have just
said, many definitions have been given for "agriculture," "forestry," and "mineral" lands, and that
in each case it is a question of fact, we think it is safe to say that in order to be forestry or
mineral land the proof must show that it is more valuable for the forestry or the mineral which it
contains than it is for agricultural purposes. (Sec. 7, Act No. 1148.) It is not sufficient to show that
there exists some trees upon the land or that it bears some mineral. Land may be classified as
forestry or mineral today, and, by reason of the exhaustion of the timber or mineral, be classified
as agricultural land tomorrow. And vice-versa, by reason of the rapid growth of timber or the
discovery of valuable minerals, lands classified as agricultural today may be differently classified
tomorrow. Each case must be decided upon the proof in that particular case, having
regard for its present or future value for one or the other purposes. We believe, however,
considering the fact that it is a matter of public knowledge that a majority of the lands in the
Philippine Islands are agricultural lands that the courts have a right to presume, in the absence
of evidence to the contrary, that in each case the lands are agricultural lands until the contrary is
shown. Whatever the land involved in a particular land registration case is forestry or
mineral land must, therefore, be a matter of proof. Its superior value for one purpose or
the other is a question of fact to be settled by the proof in each particular case. The fact
that the land is a manglar [mangrove swamp] is not sufficient for the courts to decide whether it
is agricultural, forestry, or mineral land. It may perchance belong to one or the other of said
classes of land. The Government, in the first instance, under the provisions of Act No. 1148,
may, by reservation, decide for itself what portions of public land shall be considered forestry
land, unless private interests have intervened before such reservation is made. In the latter
case, whether the land is agricultural, forestry, or mineral, is a question of proof. Until private
interests have intervened, the Government, by virtue of the terms of said Act (No. 1148), may
decide for itself what portions of the "public domain" shall be set aside and reserved as forestry
or mineral land. (Ramos vs. Director of Lands, 39 Phil. 175; Jocson vs. Director of
Forestry, supra)95 (Emphasis ours)
Since 1919, courts were no longer free to determine the classification of lands from the facts of
each case, except those that have already became private lands.96 Act No. 2874, promulgated in

1919 and reproduced in Section 6 of CA No. 141, gave the Executive Department, through the
President, the exclusive prerogative to classify or reclassify public lands into alienable or
disposable, mineral or forest.96-a Since then, courts no longer had the authority, whether express
or implied, to determine the classification of lands of the public domain.97
Here, private claimants, unlike the Heirs of Ciriaco Tirol who were issued their title in 1933, 98 did
not present a justiciable case for determination by the land registration court of the propertys
land classification. Simply put, there was no opportunity for the courts then to resolve if the land
the Boracay occupants are now claiming were agricultural lands. When Act No. 926 was
supplanted by Act No. 2874 in 1919, without an application for judicial confirmation having been
filed by private claimants or their predecessors-in-interest, the courts were no longer authorized
to determine the propertys land classification. Hence, private claimants cannot bank on Act No.
926.
We note that the RTC decision99 in G.R. No. 167707 mentioned Krivenko v. Register of Deeds of
Manila,100which was decided in 1947 when CA No. 141, vesting the Executive with the sole
power to classify lands of the public domain was already in effect. Krivenko cited the old
cases Mapa v. Insular Government,101 De Aldecoa v. The Insular Government,102 and Ankron v.
Government of the Philippine Islands.103
Krivenko, however, is not controlling here because it involved a totally different issue. The
pertinent issue inKrivenko was whether residential lots were included in the general
classification of agricultural lands; and if so, whether an alien could acquire a residential lot. This
Court ruled that as an alien, Krivenko was prohibited by the 1935 Constitution104 from acquiring
agricultural land, which included residential lots. Here, the issue is whether unclassified lands of
the public domain are automatically deemed agricultural.
Notably, the definition of "agricultural public lands" mentioned in Krivenko relied on the old cases
decided prior to the enactment of Act No. 2874, including Ankron and De Aldecoa.105 As We
have already stated, those cases cannot apply here, since they were decided when the
Executive did not have the authority to classify lands as agricultural, timber, or mineral.
Private claimants continued possession under Act No. 926 does not create a
presumption that the land is alienable. Private claimants also contend that their continued
possession of portions of Boracay Island for the requisite period of ten (10) years under Act No.
926106 ipso facto converted the island into private ownership. Hence, they may apply for a title in
their name.
A similar argument was squarely rejected by the Court in Collado v. Court of
Appeals.107 Collado, citing the separate opinion of now Chief Justice Reynato S. Puno in Cruz v.
Secretary of Environment and Natural Resources,107-a ruled:
"Act No. 926, the first Public Land Act, was passed in pursuance of the provisions of the
Philippine Bill of 1902. The law governed the disposition of lands of the public domain. It
prescribed rules and regulations for the homesteading, selling and leasing of portions of the
public domain of the Philippine Islands, and prescribed the terms and conditions to enable
persons to perfect their titles to public lands in the Islands. It also provided for the "issuance of
patents to certain native settlers upon public lands," for the establishment of town sites and sale
of lots therein, for the completion of imperfect titles, and for the cancellation or confirmation of
Spanish concessions and grants in the Islands." In short, the Public Land Act operated on the
assumption that title to public lands in the Philippine Islands remained in the government; and
that the governments title to public land sprung from the Treaty of Paris and other subsequent
treaties between Spain and the United States. The term "public land" referred to all lands of the
public domain whose title still remained in the government and are thrown open to private

appropriation and settlement, and excluded the patrimonial property of the government and the
friar lands."

resorts, restaurants and other commercial establishments, it has not been automatically
converted from public forest to alienable agricultural land.

Thus, it is plain error for petitioners to argue that under the Philippine Bill of 1902 and
Public Land Act No. 926, mere possession by private individuals of lands creates the
legal presumption that the lands are alienable and disposable.108 (Emphasis Ours)

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

Except for lands already covered by existing titles, Boracay was an unclassified land of
the public domain prior to Proclamation No. 1064. Such unclassified lands are
considered public forest under PD No. 705. The DENR109 and the National Mapping and
Resource Information Authority110 certify that Boracay Island is an unclassified land of the public
domain.
PD No. 705 issued by President Marcos categorized all unclassified lands of the public domain
as public forest. Section 3(a) of PD No. 705 defines a public forest as "a mass of lands of the
public domain which has not been the subject of the present system of classification for the
determination of which lands are needed for forest purpose and which are not." Applying PD No.
705, all unclassified lands, including those in Boracay Island, areipso facto considered public
forests. PD No. 705, however, respects titles already existing prior to its effectivity.
The Court notes that the classification of Boracay as a forest land under PD No. 705 may seem
to be out of touch with the present realities in the island. Boracay, no doubt, has been partly
stripped of its forest cover to pave the way for commercial developments. As a premier tourist
destination for local and foreign tourists, Boracay appears more of a commercial island resort,
rather than a forest land.
Nevertheless, that the occupants of Boracay have built multi-million peso beach resorts on the
island;111 that the island has already been stripped of its forest cover; or that the implementation
of Proclamation No. 1064 will destroy the islands tourism industry, do not negate its character
as public forest.
Forests, in the context of both the Public Land Act and the Constitution112 classifying lands of the
public domain into "agricultural, forest or timber, mineral lands, and national parks," do not
necessarily refer to large tracts of wooded land or expanses covered by dense growths of trees
and underbrushes.113 The discussion in Heirs of Amunategui v. Director of Forestry114 is
particularly instructive:
A forested area classified as forest land of the public domain does not lose such classification
simply because loggers or settlers may have stripped it of its forest cover. Parcels of land
classified as forest land may actually be covered with grass or planted to crops by kaingin
cultivators or other farmers. "Forest lands" do not have to be on mountains or in out of the way
places. Swampy areas covered by mangrove trees, nipa palms, and other trees growing in
brackish or sea water may also be classified as forest land. The classification is descriptive of
its legal nature or status and does not have to be descriptive of what the land actually
looks like. Unless and until the land classified as "forest" is released in an official proclamation
to that effect so that it may form part of the disposable agricultural lands of the public domain,
the rules on confirmation of imperfect title do not apply.115(Emphasis supplied)
There is a big difference between "forest" as defined in a dictionary and "forest or timber land"
as a classification of lands of the public domain as appearing in our statutes. One is descriptive
of what appears on the land while the other is a legal status, a classification for legal
purposes.116 At any rate, the Court is tasked to determine thelegal status of Boracay Island, and
not look into its physical layout. Hence, even if its forest cover has been replaced by beach

Proclamation No. 1801 or PTA Circular No. 3-82 did not convert the whole of Boracay into an
agricultural land. There is nothing in the law or the Circular which made Boracay Island an
agricultural land. The reference in Circular No. 3-82 to "private lands" 117 and "areas declared as
alienable and disposable"118 does not by itself classify the entire island as agricultural. Notably,
Circular No. 3-82 makes reference not only to private lands and areas but also to public forested
lands. Rule VIII, Section 3 provides:
No trees in forested private lands may be cut without prior authority from the PTA. All
forested areas in public lands are declared forest reserves. (Emphasis supplied)
Clearly, the reference in the Circular to both private and public lands merely recognizes that the
island can be classified by the Executive department pursuant to its powers under CA No. 141.
In fact, Section 5 of the Circular recognizes the then Bureau of Forest Developments authority
to declare areas in the island as alienable and disposable when it provides:
Subsistence farming, in areas declared as alienable and disposable by the Bureau of Forest
Development.
Therefore, Proclamation No. 1801 cannot be deemed the positive act needed to classify
Boracay Island as alienable and disposable land. If President Marcos intended to classify the
island as alienable and disposable or forest, or both, he would have identified the specific limits
of each, as President Arroyo did in Proclamation No. 1064. This was not done in Proclamation
No. 1801.
The Whereas clauses of Proclamation No. 1801 also explain the rationale behind the declaration
of Boracay Island, together with other islands, caves and peninsulas in the Philippines, as a
tourist zone and marine reserve to be administered by the PTA to ensure the concentrated
efforts of the public and private sectors in the development of the areas tourism potential with
due regard for ecological balance in the marine environment. Simply put, the proclamation is
aimed at administering the islands for tourism and ecological purposes. It does not address
the areas alienability.119
More importantly, Proclamation No. 1801 covers not only Boracay Island, but sixty-four (64)
other islands, coves, and peninsulas in the Philippines, such as Fortune and Verde Islands in
Batangas, Port Galera in Oriental Mindoro, Panglao and Balicasag Islands in Bohol, Coron
Island, Puerto Princesa and surrounding areas in Palawan, Camiguin Island in Cagayan de Oro,
and Misamis Oriental, to name a few. If the designation of Boracay Island as tourist zone makes
it alienable and disposable by virtue of Proclamation No. 1801, all the other areas mentioned
would likewise be declared wide open for private disposition. That could not have been, and is
clearly beyond, the intent of the proclamation.
It was Proclamation No. 1064 of 2006 which positively declared part of Boracay as
alienable and opened the same to private ownership. Sections 6 and 7 of CA No.
141120 provide that it is only the President, upon the recommendation of the proper department

head, who has the authority to classify the lands of the public domain into alienable or
disposable, timber and mineral lands.121
In issuing Proclamation No. 1064, President Gloria Macapagal-Arroyo merely exercised the
authority granted to her to classify lands of the public domain, presumably subject to existing
vested rights. Classification of public lands is the exclusive prerogative of the Executive
Department, through the Office of the President. Courts have no authority to do so.122 Absent
such classification, the land remains unclassified until released and rendered open to
disposition.123
Proclamation No. 1064 classifies Boracay into 400 hectares of reserved forest land and 628.96
hectares of agricultural land. The Proclamation likewise provides for a 15-meter buffer zone on
each side of the center line of roads and trails, which are reserved for right of way and which
shall form part of the area reserved for forest land protection purposes.
Contrary to private claimants argument, there was nothing invalid or irregular, much less
unconstitutional, about the classification of Boracay Island made by the President through
Proclamation No. 1064. It was within her authority to make such classification, subject to existing
vested rights.
Proclamation No. 1064 does not violate the Comprehensive Agrarian Reform Law. Private
claimants further assert that Proclamation No. 1064 violates the provision of the Comprehensive
Agrarian Reform Law (CARL) or RA No. 6657 barring conversion of public forests into
agricultural lands. They claim that since Boracay is a public forest under PD No. 705, President
Arroyo can no longer convert it into an agricultural land without running afoul of Section 4(a) of
RA No. 6657, thus:
SEC. 4. Scope. The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of
tenurial arrangement and commodity produced, all public and private agricultural lands as
provided in Proclamation No. 131 and Executive Order No. 229, including other lands of the
public domain suitable for agriculture.
More specifically, the following lands are covered by the Comprehensive Agrarian Reform
Program:
(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture.
No reclassification of forest or mineral lands to agricultural lands shall be undertaken after the
approval of this Act until Congress, taking into account ecological, developmental and equity
considerations, shall have determined by law, the specific limits of the public domain.
That Boracay Island was classified as a public forest under PD No. 705 did not bar the
Executive from later converting it into agricultural land. Boracay Island still remained an
unclassified land of the public domain despite PD No. 705.
In Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols v. Republic, 124 the Court
stated that unclassified lands are public forests.
While it is true that the land classification map does not categorically state that the
islands are public forests, the fact that they were unclassified lands leads to the same
result. In the absence of the classification as mineral or timber land, the land remains
unclassified land until released and rendered open to disposition.125 (Emphasis supplied)

Moreover, the prohibition under the CARL applies only to a "reclassification" of land. If the land
had never been previously classified, as in the case of Boracay, there can be no prohibited
reclassification under the agrarian law. We agree with the opinion of the Department of
Justice126 on this point:
Indeed, the key word to the correct application of the prohibition in Section 4(a) is the word
"reclassification." Where there has been no previous classification of public forest [referring, we
repeat, to the mass of the public domain which has not been the subject of the present system
of classification for purposes of determining which are needed for forest purposes and which are
not] into permanent forest or forest reserves or some other forest uses under the Revised
Forestry Code, there can be no "reclassification of forest lands" to speak of within the meaning
of Section 4(a).
Thus, obviously, the prohibition in Section 4(a) of the CARL against the reclassification of forest
lands to agricultural lands without a prior law delimiting the limits of the public domain, does not,
and cannot, apply to those lands of the public domain, denominated as "public forest" under the
Revised Forestry Code, which have not been previously determined, or classified, as needed for
forest purposes in accordance with the provisions of the Revised Forestry Code.127
Private claimants are not entitled to apply for judicial confirmation of imperfect title under
CA No. 141. Neither do they have vested rights over the occupied lands under the said
law. There are two requisites for judicial confirmation of imperfect or incomplete title under CA
No. 141, namely: (1) open, continuous, exclusive, and notorious possession and occupation of
the subject land by himself or through his predecessors-in-interest under a bona fide claim of
ownership since time immemorial or from June 12, 1945; and (2) the classification of the land as
alienable and disposable land of the public domain.128
As discussed, the Philippine Bill of 1902, Act No. 926, and Proclamation No. 1801 did not
convert portions of Boracay Island into an agricultural land. The island remained an unclassified
land of the public domain and, applying the Regalian doctrine, is considered State property.
Private claimants bid for judicial confirmation of imperfect title, relying on the Philippine Bill of
1902, Act No. 926, and Proclamation No. 1801, must fail because of the absence of the second
element of alienable and disposable land. Their entitlement to a government grant under our
present Public Land Act presupposes that the land possessed and applied for is already
alienable and disposable. This is clear from the wording of the law itself.129Where the land is not
alienable and disposable, possession of the land, no matter how long, cannot confer ownership
or possessory rights.130
Neither may private claimants apply for judicial confirmation of imperfect title under Proclamation
No. 1064, with respect to those lands which were classified as agricultural lands. Private
claimants failed to prove the first element of open, continuous, exclusive, and notorious
possession of their lands in Boracay since June 12, 1945.
We cannot sustain the CA and RTC conclusion in the petition for declaratory relief that private
claimants complied with the requisite period of possession.
The tax declarations in the name of private claimants are insufficient to prove the first element of
possession. We note that the earliest of the tax declarations in the name of private claimants
were issued in 1993. Being of recent dates, the tax declarations are not sufficient to convince
this Court that the period of possession and occupation commenced on June 12, 1945.
Private claimants insist that they have a vested right in Boracay, having been in possession of
the island for a long time. They have invested millions of pesos in developing the island into a

tourist spot. They say their continued possession and investments give them a vested right
which cannot be unilaterally rescinded by Proclamation No. 1064.
The continued possession and considerable investment of private claimants do not automatically
give them a vested right in Boracay. Nor do these give them a right to apply for a title to the land
they are presently occupying. This Court is constitutionally bound to decide cases based on the
evidence presented and the laws applicable. As the law and jurisprudence stand, private
claimants are ineligible to apply for a judicial confirmation of title over their occupied portions in
Boracay even with their continued possession and considerable investment in the island.

cease to function, so will hydroelectric plants. With the rains, the fertile topsoil is washed away;
geological erosion results. With erosion come the dreaded floods that wreak havoc and
destruction to property crops, livestock, houses, and highways not to mention precious
human lives. Indeed, the foregoing observations should be written down in a lumbermans
decalogue.135
WHEREFORE, judgment is rendered as follows:
1. The petition for certiorari in G.R. No. 167707 is GRANTED and the Court of Appeals Decision
in CA-G.R. CV No. 71118 REVERSED AND SET ASIDE.

One Last Note

2. The petition for certiorari in G.R. No. 173775 is DISMISSED for lack of merit.
The Court is aware that millions of pesos have been invested for the development of Boracay
Island, making it a by-word in the local and international tourism industry. The Court also notes
that for a number of years, thousands of people have called the island their home. While the
Court commiserates with private claimants plight, We are bound to apply the law strictly and
judiciously. This is the law and it should prevail. Ito ang batas at ito ang dapat umiral.
All is not lost, however, for private claimants. While they may not be eligible to apply for judicial
confirmation of imperfect title under Section 48(b) of CA No. 141, as amended, this does not
denote their automatic ouster from the residential, commercial, and other areas they possess
now classified as agricultural. Neither will this mean the loss of their substantial investments on
their occupied alienable lands. Lack of title does not necessarily mean lack of right to possess.
For one thing, those with lawful possession may claim good faith as builders of improvements.
They can take steps to preserve or protect their possession. For another, they may look into
other modes of applying for original registration of title, such as by homestead 131 or sales
patent,132 subject to the conditions imposed by law.
More realistically, Congress may enact a law to entitle private claimants to acquire title to their
occupied lots or to exempt them from certain requirements under the present land laws. There is
one such bill133 now pending in the House of Representatives. Whether that bill or a similar bill
will become a law is for Congress to decide.
In issuing Proclamation No. 1064, the government has taken the step necessary to open up the
island to private ownership. This gesture may not be sufficient to appease some sectors which
view the classification of the island partially into a forest reserve as absurd. That the island is no
longer overrun by trees, however, does not becloud the vision to protect its remaining forest
cover and to strike a healthy balance between progress and ecology. Ecological conservation is
as important as economic progress.
To be sure, forest lands are fundamental to our nations survival. Their promotion and protection
are not just fancy rhetoric for politicians and activists. These are needs that become more urgent
as destruction of our environment gets prevalent and difficult to control. As aptly observed by
Justice Conrado Sanchez in 1968 inDirector of Forestry v. Munoz:134
The view this Court takes of the cases at bar is but in adherence to public policy that should be
followed with respect to forest lands. Many have written much, and many more have spoken,
and quite often, about the pressing need for forest preservation, conservation, protection,
development and reforestation. Not without justification. For, forests constitute a vital segment of
any country's natural resources. It is of common knowledge by now that absence of the
necessary green cover on our lands produces a number of adverse or ill effects of serious
proportions. Without the trees, watersheds dry up; rivers and lakes which they supply are
emptied of their contents. The fish disappear. Denuded areas become dust bowls. As waterfalls

SO ORDERED.

G.R. No. L-35744 September 28, 1984

WENCESLAO JUNIO, petitioner-appellant,
vs.
FELICIANO DE LOS SANTOS and REGISTER OF DEEDS OF PANGASINAN, respondentsappellees.
Julian U. De Vera for petitioner-appellant.
The Solicitor General and Juan C. Austria for respondents-appellees.

MELENCIO-HERRERA, J.:
The question involved being purely one of law, the then Court of Appeals certified to us
petitioner's appeal from the Decision of the former Court of First Instance of Pangasinan in Case
No. 16362, G.L.R.O. Record No. 52512, dismissing his Petition for the cancellation of the
Adverse Claim annotated on his transfer certificate of title. The case is being decided under the
provisions of the former Land Registration Act (Act No. 496).
Petitioner-appellant, Wenceslao Junio, is the registered owner of a parcel of land situated at
Bayambang, Pangasinan, with an area of 7.65 hectares, more or less, covered by TCT No. 1004
of the Registry of Deeds of Pangasinan.
By virtue of a Deed of Absolute Sale allegedly executed by petitioner over the said parcel of land
in favor of respondent Feliciano de los Santos and his co-vendees, Guillermo de la Cruz and
Jose Junio, an Affidavit of Adverse Claim was executed by respondent, Feliciano de los Santos,
claiming a one-third undivided portion of petitioner's property, which claim was annotated on
petitioner's title.
Petitioner denies having sold any portion of his property to private respondent. hence, his
Petition for the cancellation of said adverse claim. Petitioner disputes the appropriateness of the
annotation alleging that under Section 110 of the Land Registration Act (Act No. 496), such
inscription may be resorted to only when there is no other means of registering an interest or
right; that Section 57 of the same statute provides for the registration of a documented sale
involving a titled property; and that the Register of Deeds acted negligently in registering the
document without the formal legal requisities.
Opposing, respondent de los Santos countered that he had tried to avail himself of Section 57
by requesting petitioner to surrender his owner's duplicate certificate of title but since the latter
refused to do so he was compelled to present an adverse claim pursuant to Section 110 of the
Land Registration Act.
The case was submitted for decision, without the presentation of evidence, and based on the
pleadings, the lower Court denied the petition for cancellation for lack of merit and because

"petitioner has his own remedy but not in this summary proceedings." The provision on adverse
claim reads in part:
Sec. 110. Whoever claims any right or interest in registered land adverse to
the registered owner, arising subsequent to the date of the original
registration, may, if no other provision is made in this Act for registering the
same, make a statement in writing setting forth fully his alleged right or
interest, and how or under whom acquired, and a reference to the volume
and page of the certificate of title of the registered owner, and a description
of the land in which the right or interest is claimed. The statement shall be
signed and sworn to, and shall state the adverse claimant's residence and
designate a place at which all notices may be served upon him. This
statement shall be entitled to registration as an adverse claim, and the
court, upon a petition of any party in interest, shall grant a speedy hearing
upon the question of the validity of such adverse claim and shall enter such
decree therein as justice and equity may require. If the claim is adjudged to
be invalid the registration shall be cancelled. If in any case the court after
notice and hearing shall find that a claim thus registered was frivolous or
vexatious, it may tax the adverse claimant double or treble costs in its
discretion.
... (Emphasis ours)
The "other provision for registering" referred to above is, indeed, provided for in Section 57, thus:
Sec. 57. An owner desiring to convey in fee his registered land or any
portion thereof shall execute a deed of conveyance, which the grantor or
grantee may present to the register of deeds in the province where the land
lies. The grantor's duplicate certificate shall be produced and presented at
the same time. The register of deeds shall thereupon, in accordance with
the rules and instructions of the court, make out in the registration book a
new certificate of title to the grantee, and shall prepare and deliver to him an
owner's duplicate certificate. The register of deeds shall note upon the
original and duplicate certificates the date of transfer, the volume and page
of the registration book where the new certificate is registered, and a
reference by number to the last prior certificate. Thegrantor's duplicate
certificate shall be surrendered and the word 'canceled' stamped upon it.
The original certificate shall also be stamped 'canceled'. The deed of
conveyance shall be filed and indorsed with the number and place of
registration of the certificate of title of the land conveyed. (Emphasis
supplied).
However, considering that petitioner had refused to surrender the title, private respondent could
not avail of Section 57. Hence, the latter correctly resorted to the annotation of an adverse claim.
Where the vendor fails to deliver to the vendee the duplicate certificate of title, the vendee
should file men." with the Register of Deeds an adverse claim under Section 110 of Act No. 496,
as amended. 1

Petitioner, however, calls attention to the case of Register of Deeds of Quezon City vs.
Nicandro, 2 which held that when a claim is based on a perfected contract of sale executed in
their favor by the lawful owner of the land, the remedy provided in Section 110 would be
ineffective considering that the Land Registration Act specifically provides the procedure for
registration in Section 57 thereof. The factual milieu in that case, however, is completely
different, for, therein there was no question about the existence of a perfected contract of sale,
unlike in the case at bar, where the sale between the parties is contested. Moreover, as already
adverted to, private respondent could not register the document of sale under Section 57
because of petitioner's refusal to surrender the duplicate certificate of title.
But petitioner additionally submits that because of such refusal, it is Section 111 of the same Act
No. 496, which provides the proper remedy, and we quote:
Sec. 111. In every case where the clerk or any register of deeds is
requested to enter a new certificate in pursuance of an instrument
purporting to be executed by the registered owner, or by reason of any
instrument or proceedings which divests the title of the registered owner
against his consent, if the outstanding owner's duplicate certificate is not
presented for cancellation when such request is made, the clerk or register
of deeds shall not enter a new certificate, but the person claiming to be
entitled thereto may apply by petition to the court. The court, after hearing,
may order the registered owner or any person withholding the duplicate to
surrender the same, and direct the entry of a new certificate upon such
surrender.
If in any case the person withholding the duplicate certificate is not
amenable to the process of the court, or if for any reason the outstanding
owner's duplicate certificate cannot be delivered up, the court may by
decree annul the same and order a new certificate of title to be entered.
Such new certificate and all duplicates thereof shall contain a memorandum
of the annulment of the outstanding duplicate.

served upon him. This statement Shall be entitled to registration as an

adverse claim, and the court, upon a petition of any party in interest, shall
grant a speedy hearing upon the question of the validity of such adverse
claim and shall enter such decree therein as justice and equity may require.
If the claim is adjudged to be invalid, the registration shall be cancelled. If in
any case the court after notice and hearing shall find that a claim thus
registered was frivolous or vexatious, it may tax the adverse claimant
double or treble costs in its discretion. (Emphasis ours)
In fact, the lower Court, instead of confining itself to the propriety of the registration of the
adverse claim should already have decided the controversy between the parties on the merits
thereof. Doctrinal jurisprudence holds that the Court of First Instance (now the Regional Trial
Court), as a Land Registration Court, can hear cases otherwise litigable only in ordinary civil
actions, since the Courts of First Instance are at the same time, Courts of general jurisdiction
and could entertain and dispose of the validity or invalidity of respondent's adverse claim, with a
view to determining whether petitioner is entitled or not to the relief that he seeks. 4 That doctrine
is based on expediency. In fact, petitioner has also prayed in his Brief that the case be returned
to the lower Court for further proceedings. Note should also be taken of the fact that an adverse
claim may be cancelled only after it is adjudged invalid or unmeritorious by the Court acting
either as a land registration Court or a Court of general jurisdiction. 5 The two other co-vendees,
however, should be impleaded as parties so that the entire controversy as to ownership may be
threshed out in a single action to prevent multiplicity of suits.
WHEREFORE, this case is hereby ordered remanded to the Regional Trial Court corresponding
to the former Court of First Instance of Pangasinan for hearing and for passing upon the
controversy on the merits between petitioner, as the registered owner, and private respondent,
who had filed the adverse claim, impleading for that purpose the alleged co-vendees, Guillermo
de la Cruz and Jose Junio.
Costs against petitioner.
SO ORDERED.

If in any case an outstanding mortgagee's or lessee's duplicate certificate is

not produced and surrendered when the mortgage is discharged or
extinguished or the lease is terminated, like proceedings may be had to
obtain registration as in the case of the nonproduction of an owner's
duplicate.
We find that contention again bereft of merit as said Section 111 can be availed of only if
controversial issues are not involved. 3 In this case, the genuineness and due execution of the
sale between the parties is in controversy.
Although the grounds relied upon by petitioner for cancellation of the adverse claim were
unmeritorious, it behooved the lower Court to have conducted a speedy hearing upon the
question of validity of the adverse claim pursuant to the second paragraph of Section 110 of the
Land Registration Act, reading:
The statement shall be signed and sworn to, and shall state the adverse
claimant's residence, and designate a place at which all notices may be

G.R. No. 81401 May 18, 1990

VIRGINIA FRANCO VDA. DE ARCEO, CARMELITA ARCEO, ZENAIDA ARCEO, ROMEO
ARCEO, RODOLFO ARCEO and MANUEL ARCEO, petitioners,
vs.
HON. COURT OF APPEALS (Former 16th Division), PEDRO M. ARCEO, SOTERA ARCEO,
LORENZO ARCEO, and ANTONIO ARCEO, respondents.
Ricardo S. Inton and Jose F. Tiburcio for petitioners.
Hermin E. Arceo for private respondents.

SARMIENTO, J.:
The Court grants this petition on a successful demonstration of error committed by the Court of
Appeals. 1
It appears that the spouses Abdon Arceo and Escolastica Geronimo were the owners of four
parcels of unregistered land (six were involved but only four were disputed) located in Pulilan,
Bulacan, identified as lots nos. 2582, 2595, 3054, and 8131. Escolastica died on September 16,
1942 while Abdon passed away in 1953. They had one son, Esteban, who died on September 2,
1941. Esteban had five children, Jose, Pedro, Lorenzo, Antonio, and Sotera. Jose married
Virginia Franco, with whom he fathered six children, Carmelita, Zenaida, Rodolfo, Manuel,
Cesar, and Romeo. 2 Pedro, Lorenzo, Antonio, and Sotera are the private respondents herein
while Jose's widow, Virginia (Jose died on March 8, 1970), and their children are the petitioners.
It also appears that on October (or September) 27, 1941, the Arceos executed a deed of
donation inter vivos, marked as Exhibit "J", in which the spouses bestowed the properties in
favor of Jose. 3 Since 1942, Jose had been paying taxes thereon. 4 In 1949, he took personal
possession thereof, worked thereon, and claimed them as owner thereof 5
It furthermore appears that on August 2, 1950, the spouses executed another deed of
donation inter vivos, marked as exhibit "T" disposing of the properties further in favor of Jose. 6
On October 3 (or 30), 1941, the Arceos supposedly signed a deed of donation mortis causa,
marked as exhibit "1" revoking exhibit "J" and giving away the properties in question in favor of
all his grandchildren including Jose. It seems however that it was notarized only on November 3,
1944, after Escolastica had died.
On January 12, 1972, Virginia, together with her children, filed with the cadastral court 7 an
application for registration in their names of lots Nos. 2582, 2595, 3054, and 8131 on the
strength of exhibits "J" and "T". Pedro, Antonio, Lorenzo, and Sotera opposed the application on
the basis of exhibit "1". Pedro and Lorenzo specifically contested the application on lots Nos.
3054 and 8131 on claims that each of them were entitled to one-third thereof. 8

The cadastral court rejected all three documents and distributed the properties according to the
law on intestate succession. 9
Virginia and her children shortly went to the Court of Appeals which affirmed the decision of the
cadastral court and dismissed the appeal.
On February 15, 1988, Virginia, et al. petitioned this Court.
The petitioners argue that the cadastral court was bereft of the power to determine conflicting
claims of ownership, and that its authority was solely to confirm an existing title, and that
anyway, all the lots should have been awarded to them by virtue of open, continuous, exclusive,
and notorious possession since 1941 (1942, when Jose took possession of the parcels) or
otherwise, by acquisitive prescription. 10 They also assert that exhibits "J" and "T" had validly
transferred the subject lands to them.
In their comment, Pedro, Lorenzo, Antonio, and Sotera contend that the cadastral court had the
jurisdiction to decide questions of ownership of property; that the issue of prescription was never
ventilated below; and that exhibit "J" had been validly rescinded by exhibit "1".
The parties do not quarrel over the genuineness of all three exhibits but rather, over the dates
thereof. Pedro, et al. alleged that exhibit "J" was executed on September 27, 1941, and not
October 27, 1941, and that exhibit "l", the instrument that revoked it, came later, or on October 3,
1941. Virginia et al. maintain on the other hand that exhibit "J' was actually made on October 27,
1941, twenty-four days after the execution of exhibit "1", and that assuming exhibit "1" came
earlier, it was notarized, and took effect, only on November 3, 1944, after the death of
Escolastica, one of the donors.
Although the parties wrangle over dates, the Court observes that there is no real question of fact
to be resolved in this case. The important question, so we find, is, based on existing facts, legal
in character: Who has the right over lots Nos. 2582, 2595, 3054, and 8131?
As we indicated, we find merit in this petition.
The first question must, however, be resolved against the petitioners. We have held that under
Section 2 of the Property Registration Decree, the jurisdiction of the Regional Trial Court, sitting
as a land registration court, is no longer as circumscribed as it was under Act No. 496, the
former land registration law. 11 We said that the Decree "has eliminated the distinction between
the general jurisdiction vested in the regional trial court and the limited jurisdiction conferred
upon it by the former law when acting merely as a cadastral court." The amendment was "aimed
at avoiding multiplicity of suits, the change has simplified registration proceedings by conferring
upon the required trial courts the authority to act not only on applications for 'original registration'
'but also 'over all petitions filed after original registration of title, with power to hear and
determine all questions arising from such applications or petitions.'" 12 At any rate, we have also
stated that the limited jurisdiction rule governing land registration courts is subject to recognized
exceptions, to wit, (1) where the parties mutually agreed or have acquiesced in submitting
controversial issues for determination; (2) where they have been given full opportunity to present
their evidence; and (3) where the court has considered the evidence already of record and is
convinced that the same is sufficient for rendering a decision upon such controversial

issues. 13 By the same token, it has been held that the rule is not, in reality, one of jurisdiction,
but rather, of mere procedure, which may be waived.14 It is not amiss to state likewise that where
the issue, say, of ownership, is ineluctably tied up with the question of right of registration, the
cadastral court commits no error in assuming jurisdiction over it, as, for instance, in this case,
where both parties rely on their respective exhibits to defeat one another's claims over the
parcels sought to be registered, in which case, registration would not be possible or would be
unduly prolonged unless the court first decided it.
The next question refers to acquisitive prescription. In support of their claims, Virginia, et al. cite
four events: (1) In 1941, Jose entered upon the properties and until his death in 1970, worked
thereon; (2) Upon his death, they, Virginia, et al., divided the same by virtue of an extrajudicial
partition; (3) Ever since, Jose had paid taxes thereon until he died; (4) Pedro, et al., have not
lifted a finger to oust him, Jose, in possession, or otherwise, to impugn his right. Virginia, et al.
now say that barring the above exhibits, they have anyway acquired the parcels by prescription.
We also regret that one can not agree with this proposition. The petitioners suppose that the
parcels ' had come under the category of a co-ownership, following the death of their
grandparents, but in that case, it has been held that in order for prescription to set in, the
following requisites must concur: (1) there is a clear showing that the claimant has repudiated
the co-ownership; (2) he has made known to the rest of the co-owners that he is assuming
exclusive ownership over the property; (3) there is clear and convincing evidence thereof; and
(4) his possession is open, continuous, exclusive, and notorious. 15

We can not say that exhibit "1" had validly revoked exhibit "J". The weight of authority is that a
valid donation, once accepted, becomes
irrevocable, 22 except on account of officiousness, 23 failure by the donee to comply with charges
imposed in the donation, 24 or by reason of ingratitude. 25 There is simply no proof that Abdon
when he executed exhibit "1", was in possession of a legal ground for annulment.
We can not thus accept the Court of Appeals' holding that exhibit "1" had "neutralized the force
and effect" 26 of exhibit "J".
It is therefore this Court's ruling that the disposition under exhibit "J" in favor of Jose (whose
rights were transmitted to Virginia, et al.) should be respected.
We find no need in settling the issue of true dates of the parties' exhibits, because first, it is an
issue of fact and second, because whatever their true dates, there is no obstacle to the validity
of the claims of Virginia, et al.
WHEREFORE, the Decision appealed from is SET ASIDE. The court a quo is ORDERED to
distribute the properties covered by the donation inter vivos, dated October (or September) 27,
1941, exhibit "J", according to the terms and conditions set forth therein, and in the proportions
indicated thereby. No costs.
IT IS SO ORDERED.

The evidence for Virginia et al. do not persuade us that they (through Jose) have acquired the
lots by lapse of time. The fact that in 1941, Jose wrested possession thereof, so we hold, does
not amount to adverse possession because as a co-owner, he had the right of enjoyment, and
his use thereof can not by itself prejudice the right of his fellow co-owners. The fact that he paid
taxes thereon is not controlling either because payment of real estate taxes does not necessarily
confer title upon a claimant. 16 The fact finally that Virginia, et al. had sought to extrajudicially
divide the property is nothing conclusive because there is no showing that they, Virginia, et al.
had made this known to Pedro, et al. Under these circumstances, we can not validly say that the
lands had devolved on Virginia., et al., by way of prescription.
We are granting the petition nonetheless on the finding that the lots had been conferred to Jose
by a valid donation inter vivos, that is, exhibit "J".
Other than the claims by Pedro, et al., that exhibit "J" had been revoked by exhibit "1", exhibit "J"
appears to have been executed in compliance with legal requirements, i.e., as to form and
acceptance. 17 It is true that the cadastral court was supposed to have attributed fraud on the
part of Jose in making Abdon sign the exhibit, 18 (according to Pedro, Abdon affixed his signature
thereon upon "the belief that it was a deed of sale of the land purchased from one Marciano
Santos" 19) but as found by the Court of Appeals, It is a theory that "must be received with a
'grain of salt', 20 because, for one thing, Jose is dead, and for another, the petitioners have
adduced evidence that exhibit "J" was genuine. We are bound by the factual finding of the
Appellate Court and as we averred, we are disposing of this question on pure questions of law.
As to exhibit "T", the finding of the Court of Appeals that it was defective is just as controlling on
this Court, that is, that "it was signed by Abdon Arceo after the death of his wife on September
16, 1942 and does not contain the acceptance ... by Jose Arceo." 21

G.R. No. L-630

November 15, 1947

ALEXANDER A. KRIVENKO, petitioner-appellant,

vs.
THE REGISTER OF DEEDS, CITY OF MANILA, respondent and appellee.
Gibbs, Gibbs, Chuidian and Quasha of petitioner-appellant.
First Assistant Solicitor General Reyes and Solicitor Carreon for respondent-appellee.
Marcelino Lontok appeared as amicus curies.
MORAN, C.J.:
Alenxander A. Kriventor alien, bought a residential lot from the Magdalena Estate, Inc., in
December of 1941, the registration of which was interrupted by the war. In May, 1945, he sought
to accomplish said registration but was denied by the register of deeds of Manila on the ground
that, being an alien, he cannot acquire land in this jurisdiction. Krivenko then brought the case to
the fourth branch of the Court of First Instance of Manila by means of a consulta, and that court
rendered judgment sustaining the refusal of the register of deeds, from which Krivenko appealed
to this Court.
There is no dispute as to these facts. The real point in issue is whether or not an alien under our
Constitution may acquire residential land.
It is said that the decision of the case on the merits is unnecessary, there being a motion to
withdraw the appeal which should have been granted outright, and reference is made to the
ruling laid down by this Court in another case to the effect that a court should not pass upon a
constitutional question if its judgment may be made to rest upon other grounds. There is, we
believe, a confusion of ideas in this reasoning. It cannot be denied that the constitutional
question is unavoidable if we choose to decide this case upon the merits. Our judgment cannot
to be made to rest upon other grounds if we have to render any judgment at all. And we cannot
avoid our judgment simply because we have to avoid a constitutional question. We cannot, for
instance, grant the motion withdrawing the appeal only because we wish to evade the
constitutional; issue. Whether the motion should be, or should not be, granted, is a question
involving different considerations now to be stated.
According to Rule 52, section 4, of the Rules of Court, it is discretionary upon this Court to grant
a withdrawal of appeal after the briefs have been presented. At the time the motion for
withdrawal was filed in this case, not only had the briefs been prensented, but the case had
already been voted and the majority decision was being prepared. The motion for withdrawal
stated no reason whatsoever, and the Solicitor General was agreeable to it. While the motion
was pending in this Court, came the new circular of the Department of Justice, instructing all
register of deeds to accept for registration all transfers of residential lots to aliens. The herein
respondent-appellee was naturally one of the registers of deeds to obey the new circular, as
against his own stand in this case which had been maintained by the trial court and firmly
defended in this Court by the Solicitor General. If we grant the withdrawal, the the result would
be that petitioner-appellant Alexander A. Krivenko wins his case, not by a decision of this Court,
but by the decision or circular of the Department of Justice, issued while this case was pending
before this Court. Whether or not this is the reason why appellant seeks the withdrawal of his
appeal and why the Solicitor General readily agrees to that withdrawal, is now immaterial. What

is material and indeed very important, is whether or not we should allow interference with the
regular and complete exercise by this Court of its constitutional functions, and whether or not
after having held long deliberations and after having reached a clear and positive conviction as
to what the constitutional mandate is, we may still allow our conviction to be silenced, and the
constitutional mandate to be ignored or misconceived, with all the harmful consequences that
might be brought upon the national patromony. For it is but natural that the new circular be taken
full advantage of by many, with the circumstance that perhaps the constitutional question may
never come up again before this court, because both vendors and vendees will have no interest
but to uphold the validity of their transactions, and very unlikely will the register of deeds venture
to disobey the orders of their superior. Thus, the possibility for this court to voice its conviction in
a future case may be remote, with the result that our indifference of today might signify a
permanent offense to the Constitution.
All thse circumstances were thoroughly considered and weighted by this Court for a number of
days and the legal result of the last vote was a denial of the motion withdrawing the appeal. We
are thus confronted, at this stage of the proceedings, with our duty, the constitutional question
becomes unavoidable. We shall then proceed to decide that question.
Article XIII, section 1, of the Constitutional is as follows:
Article XIII. Conservation and utilization of natural resources.
SECTION 1. All agricultural, timber, and mineral lands of the public domain, water,
minerals, coal, petroleum, and other mineral oils, all forces of potential energy, and
other natural resources of the Philippines belong to the State, and their disposition,
exploitation, development, or utilization shall be limited to citizens of the Philippines, or
to corporations or associations at least sixty per centum of the capital of which is
owned by such citizens, subject to any existing right, grant, lease, or concession at the
time of the inaguration of the Government established uunder this Constitution.
Natural resources, with the exception of public agricultural land, shall not be alienated,
and no licence, concession, or lease for the exploitation, development, or utilization of
any of the natural resources shall be granted for a period exceeding twenty-five years,
renewable for another twenty-five years, except as to water rights for irrigation, water
supply, fisheries, or industrial uses other than the development of water "power" in
which cases beneficial use may be the measure and the limit of the grant.
The scope of this constitutional provision, according to its heading and its language, embraces
all lands of any kind of the public domain, its purpose being to establish a permanent and
fundamental policy for the conservation and utilization of all natural resources of the Nation.
When, therefore, this provision, with reference to lands of the public domain, makes mention of
only agricultural, timber and mineral lands, it means that all lands of the public domain are
classified into said three groups, namely, agricultural, timber and mineral. And this classification
finds corroboration in the circumstance that at the time of the adoption of the Constitution, that
was the basic classification existing in the public laws and judicial decisions in the Philippines,
and the term "public agricultural lands" under said classification had then acquired a technical
meaning that was well-known to the members of the Constitutional Convention who were mostly
members of the legal profession.

As early as 1908, in the case of Mapa vs. Insular Government (10 Phil., 175, 182), this Court
said that the phrase "agricultural public lands" as defined in the Act of Congress of July 1, 1902,
which phrase is also to be found in several sections of the Public Land Act (No. 926), means
"those public lands acquired from Spain which are neither mineral for timber lands." This
definition has been followed in long line of decisions of this Court. (SeeMontano vs. Insular
Government, 12 Phil., 593; Ibaez de Aldecoa vs. Insular Government, 13 Phil., 159;
Ramosvs. Director of Lands, 39 Phil., 175; Jocson vs. Director of Forestry, 39 Phil., 560;
Ankron vs. Government of the Philippines, 40 Phil., 10.) And with respect to residential lands, it
has been held that since they are neither mineral nor timber lands, of necessity they must be
classified as agricultural. In Ibaez de Aldecoa vs. Insular Government (13 Phil., 159, 163), this
Court said:
Hence, any parcel of land or building lot is susceptible of cultivation, and may be
converted into a field, and planted with all kinds of vegetation; for this reason, where
land is not mining or forestal in its nature, it must necessarily be included within the
classification of agricultural land, not because it is actually used for the purposes of
agriculture, but because it was originally agricultural and may again become so under
other circumstances; besides, the Act of Congress contains only three classification,
and makes no special provision with respect to building lots or urban lands that have
ceased to be agricultural land.
In other words, the Court ruled that in determining whether a parcel of land is agricultural, the
test is not only whether it is actually agricultural, but also its susceptibility to cultivation for
agricultural purposes. But whatever the test might be, the fact remains that at the time the
Constitution was adopted, lands of the public domain were classified in our laws and
jurisprudence into agricultural, mineral, and timber, and that the term "public agricultural lands"
was construed as referring to those lands that were not timber or mineral, and as including
residential lands. It may safely be presumed, therefore, that what the members of the
Constitutional Convention had in mind when they drafted the Constitution was this well-known
classification and its technical meaning then prevailing.
Certain expressions which appear in Constitutions, . . . are obviously technical; and
where such words have been in use prior to the adoption of a Constitution, it is
presumed that its framers and the people who ratified it have used such expressions
in accordance with their technical meaning. (11 Am. Jur., sec. 66, p.
683.) Also Calder vs. Bull, 3 Dall. [U.S.], 386; 1 Law. ed., 648; Bronson vs. Syverson,
88 Wash., 264; 152 P., 1039.)
It is a fundamental rule that, in construing constitutions, terms employed therein shall
be given the meaning which had been put upon them, and which they possessed, at
the time of the framing and adoption of the instrument. If a word has acquired a fixed,
technical meaning in legal and constitutional history, it will be presumed to have been
employed in that sense in a written Constitution. (McKinney vs. Barker, 180 Ky., 526;
203 S.W., 303; L.R.A., 1918 E, 581.)
Where words have been long used in a technical sense and have been judicially
construed to have a certain meaning, and have been adopted by the legislature as
having a certain meaning prior to a particular statute in which they are used, the rule
of construction requires that the words used in such statute should be construed

according to the sense in which they have been so previously used, although the
sense may vary from strict literal meaning of the words. (II Sutherland, Statutory
Construction, p. 758.)
Therefore, the phrase "public agricultural lands" appearing in section 1 of Article XIII of the
Constitution must be construed as including residential lands, and this is in conformity with a
legislative interpretation given after the adoption of the Constitution. Well known is the rule that
"where the Legislature has revised a statute after a Constitution has been adopted, such a
revision is to be regarded as a legislative construction that the statute so revised conforms to the
Constitution." (59 C.J., 1102.) Soon after the Constitution was adopted, the National Assembly
revised the Public Land Law and passed Commonwealth Act No. 141, and sections 58, 59 and
60 thereof permit the sale of residential lots to Filipino citizens or to associations or corporations
controlled by such citizens, which is equivalent to a solemn declaration that residential lots are
considered as agricultural lands, for, under the Constitution, only agricultural lands may be
alienated.
It is true that in section 9 of said Commonwealth Act No. 141, "alienable or disposable public
lands" which are the same "public agriculture lands" under the Constitution, are classified into
agricultural, residential, commercial, industrial and for other puposes. This simply means that the
term "public agricultural lands" has both a broad and a particular meaning. Under its broad or
general meaning, as used in the Constitution, it embraces all lands that are neither timber nor
mineral. This broad meaning is particularized in section 9 of Commonwealth Act No. 141 which
classifies "public agricultural lands" for purposes of alienation or disposition, into lands that are
stricly agricultural or actually devoted to cultivation for agricultural puposes; lands that are
residential; commercial; industrial; or lands for other purposes. The fact that these lands are
made alienable or disposable under Commonwealth Act No. 141, in favor of Filipino citizens, is a
conclusive indication of their character as public agricultural lands under said statute and under
the Constitution.
It must be observed, in this connection that prior to the Constitution, under section 24 of Public
Land Act No. 2874, aliens could acquire public agricultural lands used for industrial or residential
puposes, but after the Constitution and under section 23 of Commonwealth Act No. 141, the
right of aliens to acquire such kind of lands is completely stricken out, undoubtedly in pursuance
of the constitutional limitation. And, again, prior to the Constitution, under section 57 of Public
Land Act No. 2874, land of the public domain suitable for residence or industrial purposes could
be sold or leased to aliens, but after the Constitution and under section 60 of Commonwealth Act
No. 141, such land may only be leased, but not sold, to aliens, and the lease granted shall only
be valid while the land is used for the purposes referred to. The exclusion of sale in the new Act
is undoubtedly in pursuance of the constitutional limitation, and this again is another legislative
construction that the term "public agricultural land" includes land for residence purposes.
Such legislative interpretation is also in harmony with the interpretation given by the Executive
Department of the Government. Way back in 1939, Secretary of Justice Jose Abad Santos, in
answer to a query as to "whether or not the phrase 'public agricultural lands' in section 1 of
Article XII (now XIII) of the Constitution may be interpreted to include residential, commercial,
and industrial lands for purposes of their disposition," rendered the following short, sharp and
crystal-clear opinion:

Section 1, Article XII (now XIII) of the Constitution classifies lands of the public domain
in the Philippines into agricultural, timber and mineral. This is the basic classification
adopted since the enactment of the Act of Congress of July 1, 1902, known as the
Philippine Bill. At the time of the adoption of the Constitution of the Philippines, the
term 'agricultural public lands' and, therefore, acquired a technical meaning in our
public laws. The Supreme Court of the Philippines in the leading case of Mapa vs.
Insular Government, 10 Phil., 175, held that the phrase 'agricultural public lands'
means those public lands acquired from Spain which are neither timber nor mineral
lands. This definition has been followed by our Supreme Court in many subsequent
case. . . .
Residential commercial, or industrial lots forming part of the public domain must have
to be included in one or more of these classes. Clearly, they are neither timber nor
mineral, of necessity, therefore, they must be classified as agricultural.
Viewed from another angle, it has been held that in determining whether lands are
agricultural or not, the character of the land is the test (Odell vs. Durant, 62 N.W., 524;
Lorch vs. Missoula Brick and Tile Co., 123 p.25). In other words, it is the susceptibility
of the land to cultivation for agricultural purposes by ordinary farming methods which
determines whether it is agricultural or not (State vs. Stewart, 190 p. 129).
Furthermore, as said by the Director of Lands, no reason is seen why a piece of land,
which may be sold to a person if he is to devote it to agricultural, cannot be sold to him
if he intends to use it as a site for his home.
This opinion is important not alone because it comes from a Secratary of Justice who later
became the Chief Justice of this Court, but also because it was rendered by a member of the
cabinet of the late President Quezon who actively participated in the drafting of the constitutional
provision under consideration. (2 Aruego, Framing of the Philippine Constitution, p. 598.) And
the opinion of the Quezon administration was reiterated by the Secretary of Justice under the
Osmea administration, and it was firmly maintained in this Court by the Solicitor General of
both administrations.
It is thus clear that the three great departments of the Government judicial, legislative and
executive have always maintained that lands of the public domain are classified into
agricultural, mineral and timber, and that agricultural lands include residential lots.
Under section 1 of Article XIII of the Constitution, "natural resources, with the exception of public
agricultural land, shall not be aliented," and with respect to public agricultural lands, their
alienation is limited to Filipino citizens. But this constitutional purpose conserving agricultural
resources in the hands of Filipino citizens may easily be defeated by the Filipino citizens
themselves who may alienate their agricultural lands in favor of aliens. It is partly to prevent this
result that section 5 is included in Article XIII, and it reads as follows:
Sec. 5. Save in cases of hereditary succession, no private agricultural land will be
transferred or assigned except to individuals, corporations, or associations qualified to
acquire or hold lands of the public domain in the Philippines.

This constitutional provision closes the only remaining avenue through which agricultural
resources may leak into aliens' hands. It would certainly be futile to prohibit the alienation of
public agricultural lands to aliens if, after all, they may be freely so alienated upon their
becoming private agricultural lands in the hands of Filipino citizens. Undoubtedly, as above
indicated, section 5 is intended to insure the policy of nationalization contained in section 1. Both
sections must, therefore, be read together for they have the same purpose and the same subject
matter. It must be noticed that the persons against whom the prohibition is directed in section 5
are the very same persons who under section 1 are disqualified "to acquire or hold lands of the
public domain in the Philippines." And the subject matter of both sections is the same, namely,
the non-transferability of "agricultural land" to aliens. Since "agricultural land" under section 1
includes residential lots, the same technical meaning should be attached to "agricultural land
under section 5. It is a rule of statutory construction that "a word or phrase repeated in a statute
will bear the same meaning throughout the statute, unless a different intention appears." (II
Sutherland, Statutory Construction, p. 758.) The only difference between "agricultural land"
under section 5, is that the former is public and the latter private. But such difference refers to
ownership and not to the class of land. The lands are the same in both sections, and, for the
conservation of the national patrimony, what is important is the nature or class of the property
regardless of whether it is owned by the State or by its citizens.
Reference is made to an opinion rendered on September 19, 1941, by the Hon. Teofilo Sison,
then Secretary of Justice, to the effect that residential lands of the public domain may be
considered as agricultural lands, whereas residential lands of private ownership cannot be so
considered. No reason whatsoever is given in the opinion for such a distinction, and no valid
reason can be adduced for such a discriminatory view, particularly having in mind that the
purpose of the constitutional provision is the conservation of the national patrimony, and private
residential lands are as much an integral part of the national patrimony as the residential lands
of the public domain. Specially is this so where, as indicated above, the prohibition as to the
alienable of public residential lots would become superflous if the same prohibition is not equally
applied to private residential lots. Indeed, the prohibition as to private residential lands will
eventually become more important, for time will come when, in view of the constant disposition
of public lands in favor of private individuals, almost all, if not all, the residential lands of the
public domain shall have become private residential lands.
It is maintained that in the first draft of section 5, the words "no land of private ownership" were
used and later changed into "no agricultural land of private ownership," and lastly into "no private
agricultural land" and from these changes it is argued that the word "agricultural" introduced in
the second and final drafts was intended to limit the meaning of the word "land" to land actually
used for agricultural purposes. The implication is not accurate. The wording of the first draft was
amended for no other purpose than to clarify concepts and avoid uncertainties. The words "no
land" of the first draft, unqualified by the word "agricultural," may be mistaken to include timber
and mineral lands, and since under section 1, this kind of lands can never be private, the
prohibition to transfer the same would be superfluous. Upon the other hand, section 5 had to be
drafted in harmony with section 1 to which it is supplementary, as above indicated. Inasmuch as
under section 1, timber and mineral lands can never be private, and the only lands that may
become private are agricultural lands, the words "no land of private ownership" of the first draft
can have no other meaning than "private agricultural land." And thus the change in the final draft
is merely one of words in order to make its subject matter more specific with a view to avoiding
the possible confusion of ideas that could have arisen from the first draft.

If the term "private agricultural lands" is to be construed as not including residential lots or lands
not strictly agricultural, the result would be that "aliens may freely acquire and possess not only
residential lots and houses for themselves but entire subdivisions, and whole towns and cities,"
and that "they may validly buy and hold in their names lands of any area for building homes,
factories, industrial plants, fisheries, hatcheries, schools, health and vacation resorts, markets,
golf courses, playgrounds, airfields, and a host of other uses and purposes that are not, in
appellant's words, strictly agricultural." (Solicitor General's Brief, p. 6.) That this is obnoxious to
the conservative spirit of the Constitution is beyond question.
One of the fundamental principles underlying the provision of Article XIII of the Constitution and
which was embodied in the report of the Committee on Nationalization and Preservation of
Lands and other Natural Resources of the Constitutional Convention, is "that lands, minerals,
forests, and other natural resources constitute the exclusive heritage of the Filipino nation. They
should, therefore, be preserved for those under the sovereign authority of that nation and for
their posterity." (2 Aruego, Framing of the Filipino Constitution, p. 595.) Delegate Ledesma,
Chairman of the Committee on Agricultural Development of the Constitutional Convention, in a
speech delivered in connection with the national policy on agricultural lands, said: "The
exclusion of aliens from the privilege of acquiring public agricultural lands and of owning real
estate is a necessary part of the Public Land Laws of the Philippines to keep pace with the idea
of preserving the Philippines for the Filipinos." (Emphasis ours.) And, of the same tenor was the
speech of Delegate Montilla who said: "With the complete nationalization of our lands and
natural resources it is to be understood that our God-given birthright should be one hundred per
cent in Filipino hands . . .. Lands and natural resources are immovables and as such can be
compared to the vital organs of a person's body, the lack of possession of which may cause
instant death or the shortening of life. If we do not completely antionalize these two of our most
important belongings, I am afraid that the time will come when we shall be sorry for the time we
were born. Our independence will be just a mockery, for what kind of independence are we
going to have if a part of our country is not in our hands but in those of foreigners?" (Emphasis
ours.) Professor Aruego says that since the opening days of the Constitutional Convention one
of its fixed and dominating objectives was the conservation and nationalization of the natural
resources of the country. (2 Aruego, Framing of the Philippine Constitution, p 592.) This is
ratified by the members of the Constitutional Convention who are now members of this Court,
namely, Mr. Justice Perfecto, Mr. Justice Briones, and Mr. Justice Hontiveros. And, indeed, if
under Article XIV, section 8, of the Constitution, an alien may not even operate a small jitney for
hire, it is certainly not hard to understand that neither is he allowed to own a pieace of land.
This constitutional intent is made more patent and is strongly implemented by an act of the
National Assembly passed soon after the Constitution was approved. We are referring again to
Commonwealth Act No. 141. Prior to the Constitution, there were in the Public Land Act No.
2874 sections 120 and 121 which granted aliens the right to acquire private only by way of
reciprocity. Said section reads as follows:
SEC. 120. No land originally acquired in any manner under the provisions of this Act,
nor any permanent improvement on such land, shall be encumbered, alienated, or
transferred, except to persons, corporations, associations, or partnerships who may
acquire lands of the public domain under this Act; to corporations organized in the
Philippine Islands authorized therefor by their charters, and, upon express
authorization by the Philippine Legislature, to citizens of countries the laws of which
grant to citizens of the Philippine Islands the same right to acquire, hold, lease,
encumber, dispose of, or alienate land, or permanent improvements thereon, or any

interest therein, as to their own citizens, only in the manner and to the extent specified
in such laws, and while the same are in force but not thereafter.
SEC. 121. No land originally acquired in any manner under the provisions of the
former Public Land Act or of any other Act, ordinance, royal order, royal decree, or any
other provision of law formerly in force in the Philippine Islands with regard to public
lands, terrenos baldios y realengos, or lands of any other denomination that were
actually or presumptively of the public domain or by royal grant or in any other form,
nor any permanent improvement on such land, shall be encumbered, alienated, or
conveyed, except to persons, corporations, or associations who may acquire land of
the public domain under this Act; to corporate bodies organized in the Philippine
Islands whose charters may authorize them to do so, and, upon express authorization
by the Philippine Legislature, to citizens of the countries the laws of which grant to
citizens of the Philippine Islands the same right to acquire, hold, lease, encumber,
dispose of, or alienate land or pemanent improvements thereon or any interest
therein, as to their own citizens, and only in the manner and to the extent specified in
such laws, and while the same are in force, but not thereafter:Provided, however, That
this prohibition shall not be applicable to the conveyance or acquisition by reason of
hereditary succession duly acknowledged and legalized by competent courts, nor to
lands and improvements acquired or held for industrial or residence purposes, while
used for such purposes:Provided, further, That in the event of the ownership of the
lands and improvements mentioned in this section and in the last preceding section
being transferred by judicial decree to persons,corporations or associations not legally
capacitated to acquire the same under the provisions of this Act, such persons,
corporations, or associations shall be obliged to alienate said lands or improvements
to others so capacitated within the precise period of five years, under the penalty of
such property reverting to the Government in the contrary case." (Public Land Act, No.
2874.)
It is to be observed that the pharase "no land" used in these section refers to all private lands,
whether strictly agricultural, residential or otherwise, there being practically no private land which
had not been acquired by any of the means provided in said two sections. Therefore, the
prohibition contained in these two provisions was, in effect, that no private land could be
transferred to aliens except "upon express authorization by the Philippine Legislature, to citizens
of Philippine Islands the same right to acquire, hold, lease, encumber, dispose of, or alienate
land." In other words, aliens were granted the right to acquire private land merely by way of
reciprocity. Then came the Constitution and Commonwealth Act No. 141 was passed, sections
122 and 123 of which read as follows:
SEC. 122. No land originally acquired in any manner under the provisions of this Act,
nor any permanent improvement on such land, shall be encumbered, alienated, or
transferred, except to persons, corporations, associations, or partnerships who may
acquire lands of the public domain under this Act or to corporations organized in the
Philippines authorized thereof by their charters.
SEC. 123. No land originally acquired in any manner under the provisions of any
previous Act, ordinance, royal order, royal decree, or any other provision of law
formerly in force in the Philippines with regard to public lands terrenos baldios y
realengos, or lands of any other denomination that were actually or presumptively of
the public domain, or by royal grant or in any other form, nor any permanent

improvement on such land, shall be encumbered, alienated, or conveyed, except to

persons, corporations or associations who may acquire land of the public domain
under this Act or to corporate bodies organized in the Philippines whose charters
authorize them to do so: Provided, however, That this prohibition shall not be
applicable to the conveyance or acquisition by reason of hereditary succession duly
acknowledged and legalized by competent courts: Provided, further, That in the event
of the ownership of the lands and improvements mentioned in this section and in the
last preceding section being transferred by judicial decree to persons, corporations or
associations not legally capacitated to acquire the same under the provisions of this
Act, such persons, corporations, or associations shall be obliged to alienate said lands
or improvements to others so capacitated within the precise period of five years;
otherwise, such property shall revert to the Government.
These two sections are almost literally the same as sections 120 and 121 of Act No. 2874, the
only difference being that in the new provisions, the right to reciprocity granted to aliens is
completely stricken out. This, undoubtedly, is to conform to the absolute policy contained in
section 5 of Article XIII of the Constitution which, in prohibiting the alienation of private
agricultural lands to aliens, grants them no right of reciprocity. This legislative construction
carries exceptional weight, for prominent members of the National Assembly who approved the
new Act had been members of the Constitutional Convention.

their residence in the Philippines is temporary, they may be granted temporary rights such as a
lease contract which is not forbidden by the Constitution. Should they desire to remain here
forever and share our fortunes and misfortunes, Filipino citizenship is not impossible to acquire.
For all the foregoing, we hold that under the Constitution aliens may not acquire private or public
agricultural lands, including residential lands, and, accordingly, judgment is affirmed, without
costs.

G.R. No. 113539 March 12, 1998

CELSO R. HALILI and ARTHUR R. HALILI, petitioners,
vs.
COURT OF APPEALS, HELEN MEYERS GUZMAN, DAVID REY GUZMAN and EMILIANO
CATANIAG,respondents.

PANGANIBAN, J.:
It is said that the lot question does not come within the purview of sections 122 and 123 of
Commonwealth Act No. 141, there being no proof that the same had been acquired by one of
the means provided in said provisions. We are not, however, diciding the instant case under the
provisions of the Public Land Act, which have to refer to land that had been formerly of the public
domain, otherwise their constitutionality may be doubtful. We are deciding the instant case under
section 5 of Article XIII of the Constitution which is more comprehensive and more absolute in
the sense that it prohibits the transfer to alien of any private agricultural land including residential
land whatever its origin might have been.
And, finally, on June 14, 1947, the Congress approved Republic Act No. 133 which allows
mortgage of "private real property" of any kind in favor of aliens but with a qualification consisting
of expressly prohibiting aliens to bid or take part in any sale of such real property as a
consequence of the mortgage. This prohibition makes no distinction between private lands that
are strictly agricultural and private lands that are residental or commercial. The prohibition
embraces the sale of private lands of any kind in favor of aliens, which is again a clear
implementation and a legislative interpretation of the constitutional prohibition. Had the
Congress been of opinion that private residential lands may be sold to aliens under the
Constitution, no legislative measure would have been found necessary to authorize mortgage
which would have been deemed also permissible under the Constitution. But clearly it was the
opinion of the Congress that such sale is forbidden by the Constitution and it was such opinion
that prompted the legislative measure intended to clarify that mortgage is not within the
constitutional prohibition.
It is well to note at this juncture that in the present case we have no choice. We are construing
the Constitution as it is and not as we may desire it to be. Perhaps the effect of our construction
is to preclude aliens, admitted freely into the Philippines from owning sites where they may build
their homes. But if this is the solemn mandate of the Constitution, we will not attempt to
compromise it even in the name of amity or equity. We are satisfied, however, that aliens are not
completely excluded by the Constitution from the use of lands for residential purposes. Since

The factual findings of a trial court, when affirmed by the Court of Appeals, may no longer be
reviewed and reversed by this Court in a petition for review under Rule 45 of the Rules of Court.
The transfer of an interest in a piece of land to an alien may no longer be assailed on
constitutional grounds after the entire parcel has been sold to a qualified citizen.
The Case
These familiar and long-settled doctrines are applied by this Court in denying this petition under
Rule 45 to set aside the Decision 1 of the Court of Appeals 2 in CA-GR CV No. 37829
promulgated on September 14, 1993, the dispositive portion of which states:3
WHEREFORE, and upon all the foregoing, the Decision of the court below
dated March 10, 1992 dismissing the complaint for lack of merit is
AFFIRMED without pronouncement as to costs.
The Facts
The factual antecedents, as narrated by Respondent Court, are not disputed by the parties. We
reproduce them in part, as follows:
Simeon de Guzman, an American citizen, died sometime in 1968, leaving
real properties in the Philippines. His forced heirs were his widow, defendant
appellee [herein private respondent] Helen Meyers Guzman, and his son,
defendant appellee [also herein private respondent] David Rey Guzman,
both of whom are also American citizens. On August 9, 1989, Helen
executed a deed of quitclaim (Annex A-Complaint), assigning [,] transferring
and conveying to David Rey all her rights, titles and interests in and over six
parcels of land which the two of them inherited from Simeon.

Among the said parcels of land is that now in litigation, . . . situated in

Bagbaguin, Sta. Maria, Bulacan, containing an area of 6,695 square meters,
covered by Transfer Certificate of Title No. T-170514 of the Registry of
Deeds of Bulacan. The quitclaim having been registered, TCT No. T-170514
was cancelled and TCT No. T-120259 was issued in the name of appellee
David Rey Guzman.
On February 5, 1991, David Rey Guzman sold said parcel of land to
defendant-appellee [also herein private respondent] Emiliano Cataniag,
upon which TCT No. T-120259 was cancelled and TCT No. T-130721(M)
was issued in the latter's name.4
Petitioners, who are owners of the adjoining lot, filed a complaint before the Regional Trial Court
of Malolos, Bulacan, questioning the constitutionality and validity of the two conveyances
between Helen Guzman and David Rey Guzman, and between the latter and Emiliano Cataniag
and claiming ownership thereto based on their right of legal redemption under Art. 1621 5 of
the Civil Code.
In its decision6 dated March 10, 1992,7 the trial court dismissed the complaint. It ruled that Helen
Guzman's waiver of her inheritance in favor of her son was not contrary to the constitutional
prohibition against the sale of land to an alien, since the purpose of the waiver was simply
authorize David Rey Guzman to dispose of their properties in accordance with the Constitution
and the laws of the Philippines, and not to subvert them. On the second issue, it held that the
subject land was urban; hence, petitioners had no reason to invoke their right of redemption
under Art. 1621 of the Civil Code.
The Halilis sought a reversal from the Court of Appeals which, however, denied their appeal.
Respondent Court affirmed the factual finding of the trial court that the subject land was urban.
Citing Tejido vs. Zamacoma,8 andYap vs. Grageda,9 it further held that, although the transfer of
the land to David Rey may have been invalid for being contrary to the Constitution, there was no
more point in allowing herein petitioners to recover the property, since it has passed on to and
was thus already owned by a qualified person.
Hence, this petition. 10
Issues
The petition submits the following assignment of errors:
. . . the Honorable Court of Appeals
1. Erred in affirming the conclusion of the trial court that the land in question
is urban, not rural
2. Erred in denying petitioners' right of redemption under Art. 1621 of the
Civil Code
3. Having considered the conveyance from Helen Meyers Guzman to her
son David Rey Guzman illegal, erred in not declaring the same null and
void[.] 11
The Court's Ruling

The petition has no merit.

First Issue: The Land Is Urban;
Thus, No Right of Redemption
The first two errors assigned by petitioners being interrelated the determination of the first
being a prerequisite to the resolution of the second shall be discussed together
Subject Land Is Urban
Whether the land in dispute is rural or urban is a factual question which, as a rule, is not
reviewable by this Court.12 Basic and long-settled is the doctrine that findings of fact of a trial
judge, when affirmed by the Court of Appeals, are binding upon the Supreme Court. This admits
of only a few exceptions, such as when the findings are grounded entirely on speculation,
surmises or conjectures; when an inference made by the appellate court from its factual findings
is manifestly mistaken, absurd or impossible; when there is grave abuse of discretion in the
appreciation of facts; when the findings of the appellate court go beyond the issues of the case,
run contrary to the admissions of the parties to the case or fail to notice certain relevant facts
which, if properly considered, will justify a different conclusion; when there is a misappreciation
of facts; when the findings of fact are conclusions without mention of the specific evidence on
which they are based, are premised on the absence of evidence or are contradicted by evidence
on record. 13
The instant case does not fall within any of the aforecited exceptions. In fact, the conclusion of
the trial court that the subject property is urban land is based on clear and convincing
evidence, as shown in its decision which disposed thus:
. . . As observed by the court, almost all the roadsides along the national
ghighway [sic] of Bagbaguin, Sta. Maria, Bulacan, are lined up with
residential, commercial or industrial establishments. Lined up along the
Bagbaguin Road are factories of feeds, woodcrafts [sic] and garments,
commercial stores for tires, upholstery materials, feeds supply and spare
parts. Located therein likewise were the Pepsi-Cola Warehouse, the Cruz
Hospital, three gasoline stations, apartment buildings for commercial
purposes and construction firms. There is no doubt, therefore, that the
community is a commercial area thriving in business activities. Only a short
portion of said road [is] vacant. It is to be noted that in the Tax Declaration in
the name of Helen Meyers Guzman[,] the subject land is termed
agricultural[,] while in the letter addressed to defendant Emiliano Cataniag,
dated October 3, 1991, the Land Regulatory Board attested that the subject
property is commercial and the trend of development along the road is
commercial. The Board's classification is based on the present condition of
the property and the community thereat. Said classification is far more later
[sic] than the tax declaration.14
No Ground to Invoke
Right of Redemption
In view of the finding that the subject land is urban in character, petitioners have indeed no right
to invoke Art. 1621 of the Civil Code, which presupposes that the land sought to be redeemed is
rural. The provision is clearly worded and admits of no ambiguity in construction:

Art. 1621. The owners of adjoining lands shall also have the right of
redemption when a piece of rural land, the area of which does not exceed
one hectare, is alienated, unless the grantee does not own any rural land.
xxx

xxx

xxx

Under this article, both lands that sought to be redeemed and the adjacent lot belonging to
the person exercising the right of redemption must be rural. If one or both are urban, the right
cannot be invoked.15 The purpose of this provision, which is limited in scope to rural lands not
exceeding one hectare, is to favor agricultural development.16 The subject land not being rural
and, therefore, not agricultural, this purpose would not be served if petitioners are granted the
right of redemption under Art. 1621. Plainly, under the circumstances, they cannot invoke it.
Second Issue: Sale to Cataniag Valid
Neither do we find any reversible error in the appellate court's holding that the sale of the subject
land to Private Respondent Cataniag renders moot any question on the constitutionally of the
prior transfer made by Helen Guzman to her son David Rey.
True, Helen Guzman's deed of quitclaim in which she assigned, transferred and conveyed to
David Rey all her rights, titles and interests over the property she had inherited from her
husband collided with the Constitution, Article XII, Section 7 of which provides:
Sec. 7. Save in cases of hereditary succession, no private lands shall be
transferred or conveyed except to individuals, corporations, or associations
qualified to acquire or hold lands of the public domain.
The landmark case of Krivenko vs. Register of Deeds 17 settled the issue as to who are qualified
(and disqualified) to own public as well as private lands in the Philippines. Following a long
discourse maintaining that the "public agricultural lands" mentioned in Section 1, Article XIII of
the 1935 Constitution, include residential, commercial and industrial lands, the Court then
stated:
Under section 1 of Article XIII [now Sec. 2, Art. XII] of the Constitution,
"natural resources, with the exception of public agricultural land, shall not be
alienated," and with respect to public agricultural lands, their alienation is
limited to Filipino citizens. But this constitutional purpose conserving
agricultural resources in the hands of Filipino citizens may easily be
defeated by the Filipino citizens themselves who may alienate their
agricultural lands in favor of aliens. It is partly to prevent this result that
section 5 is included in Article XIII, and it reads as follows:
Sec. 5. Save in cases of hereditary succession, no private agricultural land
will be transferred or assigned except to individuals, corporations or
associations qualified to acquire or hold lands of the public domain in the
Philippines.
This constitutional provision closes the only remaining avenue through
which agricultural resources may leak into aliens' hands. It would certainly
be futile to prohibit the alienation of public agricultural lands to aliens if, after
all, they may be freely so alienated upon their becoming private agricultural
lands in the hands of Filipino citizens. Undoubtedly, as above indicated,
section 5 [now Sec. 7] is intended to insure the policy of nationalization

contained in section 1 [now Sec. 2]. Both sections must, therefore, be read
together for they have the same purpose and the same subject matter. It
must be noticed that the persons against whom the prohibition is directed in
section 5 [now Sec. 7] are the very same persons who under section 1 [now
Sec. 2] are disqualified "to acquire or hold lands of the public domain in the
Philippines." And the subject matter of both sections is the same, namely,
the non transferability of "agricultural land" to aliens . . . . 18
The Krivenko rule was recently reiterated in Ong Ching Po vs. Court of Appeals, 19 which
involves a sale of land to a Chinese citizen. The Court sad:
The capacity to acquire private land is made dependent upon the capacity
to acquire or hold lands of the public domain. Private land may be
transferred or conveyed only to individuals or entities "qualified to acquire
lands of the public domain" (II Bernas, The Constitution of the Philippines
439-440 [1988 ed.]).
The 1935 Constitution reserved the right to participate in the "disposition,
exploitation, development and utilization" of all "lands of the public domain
and other natural resources of the Philippines" for Filipino citizens or
corporations at least sixty percent of the capital of which was owned by
Filipinos. Aliens, whether individuals or corporations, have been disqualified
from acquiring public lands; hence, they have also been disqualified from
acquiring private lands. 20
In fine, non-Filipinos cannot acquire or hold title to private lands or to lands of the public domain,
except only by way of legal succession. 21
But what is the effect of a subsequent sale by the disqualified alien vendee to a qualified Filipino
citizen? This is not a novel question. Jurisprudence is consistent that "if land is invalidly
transferred to an alien who subsequently becomes a citizen or transfers it to a citizen, the flaw in
the original transaction is considered cured and the title of the transferee is rendered valid." 22
Thus, in United Church Board of Word Ministries vs. Sebastian, 23 in which an alien resident who
owned properties in the Philippines devised to an American non-stock corporation part of his
shares of stock in a Filipino corporation that owned a tract of land in Davao del Norte, the Court
sustained the invalidity of such legacy. However, upon proof that ownership of the American
corporation has passed on to a 100 percent Filipino corporation, the Court ruled that the defect
in the will was "rectified by the subsequent transfer of the property."
The present case is similar to De Castro vs. Tan. 24 In that case, a residential lot was sold to a
Chinese. Upon his death, his widow and children executed an extrajudicial settlement, whereby
said lot was allotted to one of his sons who became a naturalized Filipino. The Court did not
allow the original vendor to have the sale annulled and to recover the property, for the reason
that the land has since become the property of a naturalized Filipino citizen who is
constitutionally qualified to own land.
Likewise, in the cases of Sarsosa vs. Cuenco, 25 Godinez vs. Pak Luen, 26 Vasquez vs. Li Seng
Giap 27 andHerrera vs. Luy Kim Guan, 28 which similarly involved the sale of land to an alien who
thereafter sold the same to a Filipino citizen, the Court again applied the rule that the
subsequent sale can no longer be impugned on the basis of the invalidity of the initial transfer.
The rationale of this principle was explained in Vasquez vs. Li Seng Giap thus:

. . . [I]f the ban on aliens from acquiring not only agricultural but also urban
lands, as construed by this Court in the Krivenko case, is to preserve the
nation's lands for future generations of Filipinos, that aim or purpose would
not be thwarted but achieved by making lawful the acquisition of real estate
by aliens who became Filipino citizens by naturalization.29
Accordingly, since the disputed land is now owned by Private Respondent Cataniag, a Filipino
citizen, the prior invalid transfer can no longer be assailed. The objective of the constitutional
provision to keep our land in Filipino hands has been served.
WHEREFORE, the petition is hereby DENIED. The challenged Decision is AFFIRMED. Costs
against petitioner.
SO ORDERED.

G.R. No. L-29663 August 20, 1990

GREGORIO LLANTINO and BELINDA LLANTINO assisted by husband Napoleon Barba,
plaintiffs-appellants,
vs.
CO LIONG CHONG alias JUAN MOLINA, defendant-appellee.
Delfin de Vera for plaintiffs-appellants.
Antonio G. Sosito for defendant-appellee.

PARAS, J.:
This is an appeal perfected before the effectivity of Republic Act 5440, from the decision * of the
Court of First Instance of Catanduanes in Civil Case No. 611, to quiet title with damages,
entitled Gregorio Llantino, et al. vs. Cong Liong Chong alias Juan Molina, dismissing the
complaint and declaring that the contract of lease entered into between the plaintiffs and the
defendant valid and in accordance with law.

At the pre-trial, both parties agreed upon the identity of the land as described in the complaint. It
was mutually admitted that the defendants original name was Co Liong Chong who was then a
Chinese national in 1954, when he approached the plaintiffs and offered to lease the land in
question. It was also admitted by the counsel for the defendant that prior to the filing of the case,
the plaintiffs have in fact invited the defendant to a conference about the matter (Rollo, p. 12;
Record on Appeal; p. 14).
Chong's counsel produced the carbon original of the contract of lease entered into between
Chong and the Llantinos and the existence of the contract of lease as a public instrument was
admitted (Rollo, p. 12; Record on Appeal, pp. 14-15).
It was also admitted that Chong had in fact constructed a building of strong materials on the land
worth P40,000.00 (Rollo, p. 12; Record on Appeal, p. 15); that Chong has become a naturalized
Filipino citizen in 1961 and that his name is no longer Co Liong Chong but Juan Molina (Rollo, p.
12; Record on Appeal, p. 15).
On May 17, 1968, the trial court rendered a Decision the dispositive portion of which reads:
WHEREFORE, in view of the foregoing considerations, the Court finds the
contract of lease entered into between the plaintiffs and the defendant on
October 5, 1954, valid and in accordance with law and the complaint is
dismissed with costs against the plaintiffs.

The facts of the case as summarized by the trial court are as follows:
Plaintiffs (petitioners herein) aver that they are the owners of a commercial-residential land
situated in the municipality of Virac, Catanduanes, described in paragraph 2 of the complaint,
which sometime in 1954 they leased to the defendant (private respondent) who was then a
Chinese national and went by the name of Co Liong Chong for a period of thirteen (13) years for
the sum of P6,150.00 for the whole period. The defendant was placed in possession of the
property but knowing that the period of the least would end with the year 1967, petitioners
requested private respondent for a conference but the latter did not honor the request and
instead he informed the petitioners that he had already constructed a commercial building on the
land worth P50,000.00; that the lease contract was for a period of sixty (60) years, counted from
1954; and that he is already a Filipino citizen. The claim of Chong came as a surprise to the
Llantinos because they did not remember having agreed to a sixty-year lease agreement as that
would virtually make Chong the owner of the realty which, as a Chinese national, he had no right
to own and neither could he have acquired such ownership after naturalization subsequent to
1954. On December 16, 1967, in order to avoid a court litigation the Llantinos once more invited
Chong to a conference about the matter but again Chong ignored the invitation. (Rollo, p. 48;
Appellant's Brief, p. 12)
Hence, on January 10, 1968, the Llantinos filed their complaint to quiet title with damages before
the Court of First Instance of Catanduanes (Rollo, p. 12; Record on Appeal, pp. 1-4).
After Chong has filed an answer to the complaint and the Llantinos their reply, (Rollo, p. 12;
Record on Appeal, pp. 9-10) the trial court set the case for pre-trial and trial for April 2, 1968
(Rollo, p. 12; Record on Appeal, pp. 10-11).

The Court, however, feels that there is no sufficient ground to award moral
damages or attorney's fees as claimed by the defendant because the Court
is fairly convinced that the institution of the suit sprung from an honest
conviction on the part of the plaintiffs that on account of the period fixed in
the contract of lease and the fact that the defendant was a Chinese national
at the time of its celebration constituted valid grounds for annulment.
SO ORDERED. (Rollo, p. 12; Record on Appeal, p. 24).
From this judgment, plaintiffs appealed directly to this Court on a pure question of law (Rollo, p.
12; Record on Appeal, pp. 24-25).
The plaintiffs-appellants filed their brief on May 26, 1969 (Rollo, p. 48). The defendant-appellee
filed his corresponding brief on July 22, 1969 (Rollo, p. 59).
The appellants raised the following assignment of errors:
I
THE LOWER COURT ERRED IN DECLARING THE CONTRACT ENTERED INTO BY AND
BETWEEN THE APPELLANTS AND THE DEFENDANTS ON OCTOBER 5, 1954 VALID.
II

THE LOWER COURT ERRED IN REFUSING TO DECLARE THAT CONTRACT NOT A LEASE.
Stripping the case of irrelevant allegations, the pivotal issue in this case is whether or not the
contract of lease entered into by and between the petitioners including Virgilio Llantino now
deceased and private respondent on October 5, 1954 for a period of sixty (60) years is valid.
Petitioners contend that when the contract which is sought to be declared void was entered into
by and between the parties, private respondent was still a Chinese national (Rollo, p. 48;
Appellants' Brief, p. 2). However, petitioners also stated that they do not dispute the right of
private respondent to hold the landholding in dispute under a contract of lease but they cannot
fathom how Congress could have thought of a lease contract which shall be for an indefinite
period and yet say that the period to be valid should not exceed 99 years (Rollo, p. 48;
Appellant's Brief, p. 4; Article 1643 of the New Civil Code of the Philippines).
On the other hand, private respondent argued that even though he was still an alien when he
entered into the contract of lease (on October 5, 1954), he was not prohibited by law to do so. In
fact, prior to his becoming a naturalized Filipino citizen in 1961, the appellants did not question
his right to enter into that contract so that the parties are in pari delicto. He constructed a
building on the property worth P40,000.00 and prays that he be awarded P30,000.00 for moral
damages and P2,000.00 for Attorney's fees. (Rollo, p. 48; Appellant's Brief, p. 2).
The position of private respondent is well taken.
The lower court correctly ruled that the defendant-appellee Chong had at the time of the
execution of the contract, the right to hold by lease the property involved in the case although at
the time of the execution of the contract, he was still a Chinese national (Rollo, p. 59; Appellee's
Brief, pp. 10-11).
In the present case, it has been established that there is only one contract and there is no option
to buy the leased property in favor of Chong. There is nothing in the record, either in the lease
contract or in the complaint itself, to indicate any scheme to circumvent the constitutional
prohibition. On the contrary, the Llantinos themselves admit openly that right from the start and
before entering into the contract, Chong had merely asked them for a lease of the premises to
which they agreed. Admittedly under the terms of the contract there is nothing to prevent the
Llantinos from disposing of their title to the land to any qualified party but subject to the rights of
the lessee Chong. Neither is there under the terms of the said contract to indicate that the
ownership of the Llantinos of the leased premises has been virtually transferred to the lessee
(Rollo, p. 59; Appellee's Brief, p. 14).
Under the circumstances, a lease to an alien for a reasonable period is valid. So is an option
giving an alien the right to buy real property on condition that he is granted Philippine citizenship.
Aliens are not completely excluded by the Constitution from use of lands for residential
purposes. Since their residence in the Philippines is temporary, they may be granted temporary
rights such as a lease contract which is not forbidden by the Constitution. Should they desire to
remain here forever and share our fortune and misfortune, Filipino citizenship is not impossible
to acquire (Philippine Banking Corporation vs. Lui She, 21 SCRA 52 [1967], citing Krivenko vs.
Register of Deeds, 79 Phil. 461 [1947]).

The only instance where a contract of lease may be considered invalid is, if there are
circumstances attendant to its execution, which are used as a scheme to circumvent the
constitutional prohibition.
If an alien is given not only a lease of, but also an option to buy, a piece of land, by virtue of
which the Filipino owner cannot sell or otherwise dispose of his property, this to last for 50 years,
then it becomes clear that the arrangement is a virtual transfer of ownership whereby the owner
divests himself in stages not only of the right to enjoy the land (jus possidendi, jus utendi, jus
fruendi, and jus abutendi) rights, the sum of which make up ownership. It is just as if today
the possession is transferred, tomorrow the use, the next day the disposition, and so on, until
ultimately all the rights of which ownership is made up are consolidated in an alien (Philippine
Banking Corporation vs. Lui She, 21 SCRA 52 [1967]).
Coming back to the case at bar, even assuming, arguendo, that the subject contract is
prohibited, the same can no longer be questioned presently upon the acquisition by the private
respondent of Filipino citizenship. It was held that sale of a residential land to an alien which is
now in the hands of a naturalized Filipino citizen is valid (De Castro vs. Tan, 129 SCRA 85
[1984]).
A contract is the law between the contracting parties, and when there is nothing in it which is
contrary to law, morals, good customs, public policy or public order, the validity of the contract
must be sustained (Marimperio Compania Naviera, S.A. vs. Court of Appeals, 156 SCRA 358
[1987]).
The issue of the nature of the contract in the case at bar was never raised in the basic pleadings
or in the pre-trial (Rollo, p. 59-1; Appellee's Brief, p. 22).
It is too late to raise an issue on appeal in the Supreme Court when it has not been raised in the
lower court (Espadera vs. Court of Appeals, 165 SCRA 364 [1988]).
Moreover, contracts which are not ambiguous are to be interpreted according to their literal
meaning and should not be interpreted beyond their obvious intendment (Plastic Town Center
Corporation vs. NLRC, 172 SCRA 580 [1989]; Herrera vs. Petrophil Corp., 146 SCRA 385
[1986]).
PREMISES CONSIDERED, the decision appealed from is hereby AFFIRMED with costs against
the plaintiffs-appellants.
SO ORDERED.

G.R. No. L-6776

May 21, 1955

THE REGISTER OF DEEDS OF RIZAL, petitioner-appellee,

vs.
UNG SIU SI TEMPLE, respondent-appellant.
Alejo F. Candido for appellant.
Office of the Solicitor General Querube C. Makalintal and Solicitor Felix V. Makasiar for
appellee.

SEC. 2. Such religious institutions, if not incorporated, shall hold the land in the name
of three Trustees for the use of such associations; . . .. (Printed Rec. App. p. 5.)
and (2) that the refusal of the Register of Deeds violates the freedom of religion clause of our
Constitution [Art. III, Sec. 1(7)].
We are of the opinion that the Court below has correctly held that in view of the absolute terms
of section 5, Title XIII, of the Constitution, the provisions of Act No. 271 of the old Philippine
Commission must be deemed repealed since the Constitution was enacted, in so far as
incompatible therewith. In providing that,

REYES, J.B.L., J.:

The Register of Deeds for the province of Rizal refused to accept for record a deed of donation
executed in due form on January 22, 1953, by Jesus Dy, a Filipino citizen, conveying a parcel of
residential land, in Caloocan, Rizal, known as lot No. 2, block 48-D, PSD-4212, G.L.R.O. Record
No. 11267, in favor of the unregistered religious organization "Ung Siu Si Temple", operating
through three trustees all of Chinese nationality. The donation was duly accepted by Yu Juan, of
Chinese nationality, founder and deaconess of the Temple, acting in representation and in behalf
of the latter and its trustees.
The refusal of the Registrar was elevated en Consultato the IVth Branch of the Court of First
Instance of Manila. On March 14, 1953, the Court upheld the action of the Rizal Register of
Deeds, saying:
The question raised by the Register of Deeds in the above transcribed consulta is
whether a deed of donation of a parcel of land executed in favor of a religious
organization whose founder, trustees and administrator are Chinese citizens should
be registered or not.
It appearing from the record of the Consulta that UNG SIU SI TEMPLE is a religious
organization whose deaconess, founder, trustees and administrator are all Chinese
citizens, this Court is of the opinion and so hold that in view of the provisions of the
sections 1 and 5 of Article XIII of the Constitution of the Philippines limiting the
acquisition of land in the Philippines to its citizens, or to corporations or associations at
least sixty per centum of the capital stock of which is owned by such citizens adopted
after the enactment of said Act No. 271, and the decision of the Supreme Court in the
case of Krivenko vs. the Register of Deeds of Manila, the deed of donation in question
should not be admitted for admitted for registration. (Printed Rec. App. pp 17-18).

Save in cases of hereditary succession, no private agricultural land shall be

transferred or assigned except to individuals, corporations or associations qualified to
acquire or hold lands of the public domain in the Philippines,
the Constitution makes no exception in favor of religious associations. Neither is there any such
saving found in sections 1 and 2 of Article XIII, restricting the acquisition of public agricultural
lands and other natural resources to "corporations or associations at least sixty per centum of
the capital of which is owned by such citizens" (of the Philippines).
The fact that the appellant religious organization has no capital stock does not suffice to escape
the Constitutional inhibition, since it is admitted that its members are of foreign nationality. The
purpose of the sixty per centum requirement is obviously to ensure that corporations or
associations allowed to acquire agricultural land or to exploit natural resources shall be
controlled by Filipinos; and the spirit of the Constitution demands that in the absence of capital
stock, the controlling membership should be composed of Filipino citizens.
To permit religious associations controlled by non-Filipinos to acquire agricultural lands would be
to drive the opening wedge to revive alien religious land holdings in this country. We can not
ignore the historical fact that complaints against land holdings of that kind were among the
factors that sparked the revolution of 1896.
As to the complaint that the disqualification under article XIII is violative of the freedom of
religion guaranteed by Article III of the Constitution, we are by no means convinced (nor has it
been shown) that land tenure is indispensable to the free exercise and enjoyment of religious
profession or worship; or that one may not worship the Deity according to the dictates of his own
conscience unless upon land held in fee simple.
The resolution appealed from is affirmed, with costs against appellant.

Not satisfied with the ruling of the Court of First Instance, counsel for the donee Uy Siu Si
Temple has appealed to this Court, claiming: (1) that the acquisition of the land in question, for
religious purposes, is authorized and permitted by Act No. 271 of the old Philippine Commission,
providing as follows:
SECTION 1. It shall be lawful for all religious associations, of whatever sort or
denomination, whether incorporated in the Philippine Islands or in the name of other
country, or not incorporated at all, to hold land in the Philippine Islands upon which to
build churches, parsonages, or educational or charitable institutions.

G.R. No. L-31956 April 30, 1984

FILOMENA GERONA DE CASTRO, petitioner,
vs.
JOAQUIN TENG QUEEN TAN, TAN TENG BIO, DOLORES TAN, ROSARIO TAN HUA ING,
and TO O. HIAP,respondents.
Pascual G. Mier for petitioner.
Eddie Tamondong for respondent Joaquin Teng Queen Tan.

Independently of the doctrine of pari delicto, the petitioner cannot have the sale annulled and
recover the lot she herself has sold. While the vendee was an alien at the time of the sale, the
land has since become the property, of respondent Joaquin Teng, a naturalized Philippine
citizen, who is constitutionally qualified to own land.t.hqw
... The litigated property is now in the hands of a naturalized Filipino. It is no
longer owned by a disqualified vendee. Respondent, as a naturalized
citizen, was constitutionally qualified to own the subject property. There
would be no more public policy to be served in allowing petitioner Epifania
to recover the land as it is already in the hands of a qualified person.
Applying by analogy the ruling of this Court in Vasquez vs. Giap and Li Seng
Giap & Sons:t.hqw

Carlos Buenviaje for respondent Tan Teng Bio.

... if the ban on aliens from acquiring not only
agricultural but also urban lands, as construed by this
Court in the Krivenko case, is to preserve the nation's
lands for future generations of Filipinos, that aim or
purpose would not be thwarted but achieved by making
lawful the acquisition of real estate by aliens who
became Filipino citizens by naturalization. (Sarsosa
Vda. de Barsobia vs. Cuenco, 113 SCRA 547, at 553.)

Arnulfo L. Perete for respondent Ong Shi (To O. Hiap).

PLANA, J.:+.wph!1
Review on certiorari of the order of the former Court of First Instance of Sorsogon dismissing
petitioner's action for annulment of contract with damages.
In 1938, petitioner Filomena Gerona de Castro sold a 1,258 sq. m. residential lot in Bulan,
Sorsogon to Tan Tai, a Chinese. In 1956, Tan Tai died leaving herein respondents his widow,
To O. Hiap, and children Joaquin Teng Queen Tan, Tan Teng Bio, Dolores Tan and Rosario Tan
Hua Ing.
Before the death of Tan Tai or on August 11, 1956, one of his sons, Joaquin, became a
naturalized Filipino. Six years after Tan Tai's death, or on November 18, 1962, his heirs executed
an extra-judicial settlement of estate with sale, whereby the disputed lot in its entirety was
alloted to Joaquin.

Laches also militates against petitioner's cause. She sold the disputed lot in 1938. She instituted
the action to annul the sale only on July 15, 1968. What the Court said in the cited Sarsosa case
applies with equal force to the petitioner.t.hqw
... it is likewise inescapable that petitioner Epifania had slept on her rights
for 26 years from 1936 to 1962. By her long inaction of inexcusable neglect,
she should be held barred from asserting her claim to the litigated property
(Sotto vs. Teves, 86 SCRA 157 [1978]).t.hqw
Laches has been defined as the failure or neglect, for
an unreasonable and unexplained length of time, to do
that which by exercising due diligence could or should
have been done earlier; it is negligence or omission to
assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it either has
abandoned it or declined to assert it. (Tijam, et al. vs.
Sibonghanoy, et al., No. L-21450, April 15, 1968, 23
SCRA 29, 35). (cited in Sotto vs. Teves, 86 SCRA 154
[1978]).

On July 15, 1968, petitioner commenced suit against the heirs of Tan Tai for annulment of the
sale for alleged violation of the 1935 Constitution prohibiting the sale of land to aliens.
Except for respondent Tan Teng Bio who filed an answer to the complaint, respondents moved to
dismiss the complaint on the grounds of (a) lack of cause of action, the plaintiff being in pari
delicto with the vendee, and the land being already owned by a Philippine citizen; (b) laches;
and (c) acquisitive prescription.
Over the opposition of petitioner, the court a quo dismissed the complaint, sustaining the first
two grounds invoked by the movants. It is this order of dismissal that is now the subject of this
review.

Respondent, therefore, must be declared to be the rightful owner of the

property. (p. 553.)
WHEREFORE, the appealed order is affirmed. Costs against petitioner.

The assailed order must be sustained.

SO ORDERED.1wph1.t

G.R. No. 74170 July 18, 1989

Amando Fabio Jr. for private respondent.

and (b) of any other claim against the First Parties and Second Parties, both the latter, in turn
waived "any claim of ownership or other right in or to the parcels of land, or the improvements
thereon, in Buenavista, Quezon covered by OCT Nos. 3697, 3696, 3439 and 4382 of the
Registry of Deeds of Quezon," in the name of Gregorio Reyes Uy Un, Chua Kim's adoptive
father, and that they (the First and Second Parties) "will not oppose the transfer, by means not
contrary to law, of the ownership thereof to the Third Party," said Chua Kim. The compromise
agreement was afterwards submitted to the Court 9 which rendered judgment on July 29,1970
(amended by Order dated July 31, 1970), approving the same. 10

NARVASA, J.:

Chua Kim then filed a petition for issuance of decree of confirmation and registration in Land
Registration Case No. 405 (LRC Rec. No. 14817) of the Court of First Instance of Quezon
Province. 11

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
INTERMEDIATE APPELLATE COURT, GUILLERMO GONZALVES,** respondents.

The chief question presented in the appeal at bar concerns the validity of a conveyance of
residential land to an alien prior to his acquisition of Filipino citizenship by naturalization.
The Trial Court's description of the factual background is largely undisputed. The case principally
concerns Chua Kim @ Uy Teng Be, who became a naturalized Filipino citizen, taking his oath as
such, on January 7,1977. 1 He was the adopted son of Gregorio Reyes Uy Un.
The case involved three (3) parcels of land, which were among those included in Land
Registration Cases Numbered 405 and 14817 of the Court of First Instance of Quezon Province:
Lots Numbered 1 and 2, plan Psu-57676, 2 and Lot No. 549 of plan AP-7521-identical to Plan
Psu-54565. 3 These were respectively adjudicated in said land registration cases to two persons,
as follows:
1) Lots 1 and 2, Psu-57676, to the Spouses Benigno Maosca and Julia
Daguison (in Opposition No. 51 ); 4 and
2) Lot 549, AP-7521 (Psu-54565), to Gaspar Marquez, married to Marcela
Masaganda (in opposition No. 155). 5 However, no decree of confirmation
and registration was entered at the time.
Lots 1 and 2, Psu-57676, were sold by the owners, the Maosca Spouses, to Gregorio Reyes
Uy Un on Dec. 30, 1934. 6 Lot 549, Psu-54565, was also sold by the Marquez Spouses to
Gregorio Reyes Uy Un on December 27, 1934. 7
Subsequently, Gregorio Reyes Uy Un died, and his adopted son, Chua Kim @ Uy Teng, took
possession of the property.
The three (3) parcels of land above mentioned, together with several others, later became
subject of a compromise agreement in a litigation in the Court of First Instance of Quezon
Province, docketed as Civil Case No. C-385. 8 The compromise agreement was executed not
only by the parties in the case (plaintiffs Domingo Reyes and Lourdes Abustan, and the
defendants, So Pick, et al.) respectively described as "First Parties" and "Second Parties"-but
also Chua Kim @ Ting Be Uy, designated therein as "Third Party," although he had not been
impleaded as a party to the case. In the agreement, in consideration of Chua Kim's renunciation
(a) of "any right or claim of whatever nature in .. (certain specifically identified) parcels of land"

After due proceedings, and on the basis of the foregoing facts found to have been duly proven
by the evidence, the Court of First Instance of Quezon 12 promulgated on January 14, 1982 the
following Order, to wit:
WHEREFORE, premises considered, this Court finds that herein petitioner
Chua Kim alias Uy Teng Be has duly established his registerable title over
the properties in question in this land registration case in so far as
Oppositions Nos. 51 and 155 are concerned, and hereby GRANTS his
petition. The decision rendered on January 14, 1933 in so far as Opposition
Nos. 51 and 155 are concerned, is hereby amended adjudicating the said
properties, better known now as Lots 1 and 2 of plan Psu-57676 in
Opposition No. 51 and as Lot.549 of plan Ap-7521, which is Identical to plan
Psu-54565 in Opposition No. 155, to herein petitioner Chua Kim alias Uy
Teng Be. Upon this order becoming final, let the corresponding decrees of
confirmation and registration be entered and thereafter upon payment of the
fees required by law, let the corresponding certificate of titles be issued in
the name of petitioner, Chua Kim alias Uy Teng Be, married to Amelia Tan,
of legal age, a naturalized Filipino citizen, and a resident of the Municipality
of Buenavista, Province of Quezon, as his own exclusive properties, free
from all liens and encumbrances.
SO ORDERED.
The Republic of the Philippines, through the Solicitor General, challenged the correctness of the
Order and appealed it to the Court of Appeals. That Court, however, affirmed the Order "in all
respects," in a decision promulgated on March 25,1986. 13
Still not satisfied, the Republic has come to this Court on appeal by certiorari, in a final attempt
to prevent the adjudication of the property in question to Chua Kim. The Solicitor General argues
that
1) the deeds and instruments presented by Chua Kim to prove the
conveyance to him of the lands in question by the successor-in- interest of
the original adjudicates are inadequate for the purpose; and

2) Chua Kim has not proven his qualification to own private agricultural land
at the time of the alleged acquisition of the property in question.
The Republic's theory is that the conveyances to Chua Kim were made while he was still an
alien, i.e., prior to his taking oath as a naturalized Philippine citizen on January 7, 1977, at a time
when he was disqualified to acquire ownership of land in the Philippines (ART XIII, SEC. 5, 1935
Constitution; ART. XIV, Sec. 14, 1973 Constitution); hence, his asserted titles are null and
void. 14 It is also its contention that reliance on the decision and amendatory order in Civil Case
No. C-385 of the CFI, Rizal 15 is unavailing, since neither document declares that the property in
question was adjudicated to Chua Kim as his inheritance from his adoptive father, Gregorio
Reyes Uy Un. 16
The conclusions of fact of the Intermediate Appellate Court, sustaining those of the Land
Registration Court, reached after analysis and assessment of the evidence presented at a
formal hearing by the parties, are by firmly entrenched rule binding on and may not be reviewed
by this Court. 17 Those facts thus found to exist, and the legal principles subsumed in them,
impel rejection of the Republic's appeal.
It is a fact that the lands in dispute were properly and formally adjudicated by a competent Court
to the Spouses Gaspar and to the Spouses Marquez in fee simple, and that the latter had
afterwards conveyed said lands to Gregorio Reyes Uy Un, Chua Kim's adopting parent, by
deeds executed in due form on December 27, 1934 and December 30, 1934, respectively.
Plainly, the conveyances were made before the 1935 Constitution went into effect, i.e., at a time
when there was no prohibition against acquisition of private agricultural lands by
aliens. 18Gregorio Reyes Uy Un therefore acquired good title to the lands thus purchased by him,
and his ownership was not at all affected either (1) by the principle subsequently enunciated in
the 1935 Constitution that aliens were incapacitated to acquire lands in the country, since that
constitutional principle has no retrospective application, 19 or (2) by his and his successor's
omission to procure the registration of the property prior to the coming into effect of the
Constitution. 20
It is a fact, furthermore, that since the death of Gregorio Reyes Uy Un in San Narciso, Quezon,
in 1946, Chua Kim @ Uy Teng Be had been in continuous possession of the lands in concept of
owner, as the putative heir of his adoptive father, said Gregorio Reyes; 21 this, without protest
whatever from any person. It was indeed Chua Kim's being in possession of the property in
concept of owner, and his status as adopted son of Gregorio Reyes, that were the factors that
caused his involvement in Civil Case No. C-385 of the CFI at Calauag, Quezon, at the instance
of the original parties thereto, 22 and his participation in the Compromise Agreement later
executed by all parties. As already mentioned, that compromise agreement, approved by
judgment rendered on July 29, 1970, 23 implicity recognized Chua Kim's title to the lands in
question.
Be this as it may, the acquisition by Chua Kim of Philippine citizenship should foreclose any
further debate regarding the title to the property in controversy, in line with this Court's rulings
relative to persons similarly situated. 24 In Sarsosa Vda. de Barsobia v. Cuenco, 113 SCRA 547,
for instance, the ruling was as follows:
... The litigated property is now in the hands of a naturalized Filipino. It is no longer owned by a
disqualified vendee. Respondent, as a naturalized citizen, was constitutionally qualified to own

the subject property. There would be no more public policy to be served in allowing petitioner
Epifania to recover the land as it is already in the hands of a qualified person. Applying by
analogy the ruling of this Court in Vasquez vs. Giap and Li Seng Giap & Sons (96 Phil. 447
[1955]),
... if the ban on aliens from acquiring not only
agricultural but also urban lands, as construed by this
Court in the Krivenko case, is to preserve the nation's
land for future generations of Filipinos, that aim or
purpose would not be thwarted but achieved by making
lawful the acquisition of real estate by aliens who
became Filipino citizens by naturalization.
WHEREFORE, the petition is DISMISSED, and the judgment of the Intermediate Appellate Court
subject thereof AFFIRMED in toto. SO ORDERED.

G.R. No. L-1411

September 29, 1953

DIONISIO RELLOSA, petitioner,

vs.
GAW CHEE HUN, respondent.
Macapagal & Eusebio and Conrado Manalansan for petitioner.
Alafriz & Alafriz for respondent. Quisumbing, Sycip & Quisumbing as amici curiae.
BAUTISTA ANGELO, J.:
This is a petition for review of a decision of the Court of Appeals holding that the sale in question
is valid and, even if it were invalid, plaintiff cannot maintain the action under the principle of pari
delicto.
On February 2, 1944, Dionisio Rellosa sold to Gaw Chee Hun a parcel of land, together with the
house erected thereon, situated in the City of Manila, Philippines, for the sum of P25,000. The
vendor remained in possession of the property under a contract of lease entered into on the
same date between the same parties. Alleging that the sale was executed subject to the
condition that the vendee. being a Chinese citizen, would obtain the approval of the Japanese
Military Administration in accordance with (seirei) No. 6 issued on April 2, 1943, by the Japanese
authorities, and said approval has not been obtained, and that, even if said requirement were
met, the sale would at all events be void under article XIII, section 5, of our Constitution, the
vendor instituted the present action in the Court of First Instance of Manila seeking the
annulment of the sale as well as the lease covering the land and the house above mentioned,
and praying that, once the sale and the lease are declared null and void, the vendee be ordered
to return to vendor the duplicate of the title covering the property, and be restrained from in any
way dispossessing the latter of said property.
Defendant answered the complaint setting up as special defense that the sale referred to in the
complaint was absolute and unconditional and was in every respect valid and binding between
the parties, it being not contrary to law, morals and public order, and that plaintiff is guilty of
estoppel in that, by having executed a deed of lease over the property, he thereby recognized
the title of defendant to that property.
Issues having been joined, and the requisite evidence presented by both parties, the court
declared both the sale and the lease valid and binding and dismissed the complaint. The court
likewise ordered plaintiff to turn over the property to defendant and to pay a rental of P50 a
month from August 1, 1945 until the property has been actually delivered. As this decision was
affirmed in toto by the Court of Appeals, plaintiff sued out the present petition for review.
One of the issues raised by petitioner refers to the validity of Seirei No. 6 issued on April 2, 1943
by the Japanese authorities which prohibits an alien from acquiring any private land not
agricultural in nature during the occupation unless the necessary approval is obtained from the
Director General of the Japanese Military Administration. Petitioner contends that the sale in
question cannot have any validity under the above military directive in view of the failure of
respondent to obtain the requisite approval and it was error for the Court of Appeals to declare
said directive without any binding effect because the occupation government could not have

issued it under article 43 of the Hague Regulations which command that laws that are municipal
in character of an occupied territory should be respected and cannot be ignored unless
prevented by military necessity.
We do not believe it necessary to consider now the question relative to the validity of Seirei No.
6 of the Japanese Military Administration for the simple reason that in our opinion the law that
should govern the particular transaction is not the above directive but the Constitution adopted
by the then Republic of the Philippines on September 4, 1943, it appearing that the aforesaid
transaction was executed on February 2, 1944. Said Constitution, in its article VIII, section 5,
provides that "no private agricultural land shall be transferred or assigned except to individuals,
corporations, or associations qualified to acquire or hold lands of the public domain in the
Philippines", which provisions are similar to those contained in our present Constitution. As to
whether the phrase "private agricultural land" employed in said Constitution includes residential
lands, as the one involved herein, there can be no doubt because said phrase has already been
interpreted in the affirmative sense by this court in the recent case of Krivenko vs. Register of
Deeds, 79 Phil. 461, wherein this court held that "under the Constitution aliens may not acquire
private or public agricultural lands, including residential lands." This matter has been once more
submitted to the court for deliberation, but the ruling was reaffirmed. This ruling fully disposes of
the question touching on the validity of the sale of the property herein involved.
The sale in question having been entered into a violation of the Constitution, the next question to
be determined is, can petition have the sale declared null and void and recover the property
considering the effect of the law governing rescission of contracts? Our answer must of
necessity be in the negative following the doctrine laid down in the case of Trinidad Gonzaga de
Cabauatan, et al. vs. Uy Hoo, et al., 88 Phil., 103, wherein we made the following
pronouncement: "We can, therefore, say that even if the plaintiffs can still invoke the
Constitution, or the doctrine in the Krivenko Case, to set aside the sale in question, they are now
prevented from doing so if their purpose is to recover the lands that they have voluntarily parted
with, because of their guilty knowledge that what they were doing was in violation of the
Constitution. They cannot escape this conclusion because they are presumed to know the law.
As this court well said: 'A party to an illegal contract cannot come into a court of law and ask to
have his illegal objects carried out. The law will not aid either party to an illegal agreement; it
leaves the parties where it finds them.' The rule is expressed in the maxims: 'Ex dolo malo non
oritur actio,' and 'In pari delicto potior est conditio defendentis' (Bough and Bough vs. Cantiveros
and Hanopol, 40 Phil., 210, 216.)".
The doctrine above adverted to is the one known as In Pari Delicto. This is well known not only
in this jurisdiction but also in the United States where common law prevails. In the latter
jurisdiction, the doctrine is state thus: "The propsosition is universal that no action arises, in
equity or at law, from an illegal contract; no suit can be maintained for its specific performance,
or to recover the property agreed to be sold or delivered, or the money agreed to be paid, or
damages for its violation. The rule has sometimes been laid down as though it were equally
universal, that where the parties are in pari delicto, no affirmative relief of any kind will be given
to one against the other." (Pomeroy's Equity Jurisprudence, Vol. 3, 5th ed., p. 728.).
It is true that this doctrine is subject to one important limitation, namely, "whenever public policy
is considered as advanced by allowing either party to use for relief against the transaction"
(idem, p. 733). But not all contracts which are illegal because opposed to public policy come
under this limitation. The cases in which this limitation may apply only "include the class of
contracts which are intrinsically contrary to public policy, contracts in which the illegality itself

consists in their opposition to public policy, and any other species of illegal contracts in which,
from their particular circumstances, incidental and collateral motives of public policy require
relief." Examples of this class of contracts are usurious contracts, marriage-brokerage contracts
and gambling contracts. (Idem. pp. 735-737.).
In our opinion, the contract in question does not come under this exception because it is not
intrinsically contrary to public policy, nor one where the illegality itself consist in its opposition to
public policy. It is illegal not because it is against public policy but because it is against the
Constitution. Nor may it be contended that to apply the doctrine of pari delicto would be
tantamount to contravening the fundamental policy embodied in the constitutional prohibition in
that it would allow an alien to remain in the illegal possession of the land, because in this case
the remedy is lodged elsewhere. To adopt the contrary view would be merely to benefit petitioner
and not to enhance public interest.
The danger foreseen by counsel in the application of the doctrine above adverted to is more
apparent than real. If we go deeper in the analysis of our situation we would not fail to see that
the best policy would be for Congress to approve a law laying down the policy and the
procedure to be followed in connection with transactions affected by our doctrine in the Krivenko
case. We hope that this should be done without much delay. And even if this legislation be not
forthcoming in the near future, we do not believe that public interest would suffer thereby if only
our executive department would follow a more militant policy in the conservation of our natural
resources as ordained by our Constitution. And we say so because there are at present two
ways by which this situation may be remedied, to wit, (1) action for reversion, and (2) escheat to
the state. An action for reversion is slightly different from escheat proceeding, but in its effects
they are the same. They only differ in procedure. Escheat proceedings may be instituted as a
consequence of a violation of article XIII, section 5 of our Constitution, which prohibits transfers
of private agricultural lands to aliens, whereas an action for reversion is expressly authorized by
the Public Land Act (sections 122, 123, and 124 of Commonwealth Act No. 141).
In the United States, as almost everywhere else, the doctrine which imputes to the sovereign or
to the government the ownership of all lands and makes such sovereign or government the
original source of private titles, is well recognized (42 Am. Jur., 785). This doctrine, which was
expressly affirmed in Lawrence vs. Garduno, G. R. No. 16542, and which underlies all titles in
the Philippines, (See Ventura, Land Registration and Mortgages, 2nd ed., pp. 2-3) has been
enshrined in our Constitution (Article XIII). The doctrine regarding the course of all titles being
the same here as in the United States, it would seem that if escheat lies against aliens holding
lands in those states of the Union where common law prevails or where similar constitutional or
statutory prohibitions exists, no cogent reason is perceived why similar proceedings may not be
instituted in this jurisdiction.
Escheat is an incident or attribute of sovereignty, and rests on the principle of the
ultimate ownership by the state of all property within its jurisdiction. (30 C.J.S.,
1164.)1wphl.nt
... In American escheats belongs universally to the state or some corporation thereof
as the ultimate proprietor of land within its Jurisdiction. (19 Am. Jur., 382.)

An escheat is nothing more or less than the reversion of property to the state, which
takes place when the title fails. (Delany vs. State, 42 N. D., 630, 174 N.W., 290,
quoted in footnote 6, 19 Am. Jur., 381.)
As applied to the right of the state to lands purchased by an alien, it would more
properly be termed a "forfeiture" at common law. (19 Am. Jur., 381.)
In modern law escheat denotes a falling of the estate into the general property of the
state because the tenant is an alien or because he has died intestate without lawful
heirs to take his estate by successions, or because of some other disability to take or
hold property imposed by law. (19 Am. Jur., 381.)
With regard to an action for reversion, the following sections of commonwealth Act No. 141 are
pertinent:
Sec. 122. No land originally acquired in any manner under the provisions of this Act,
nor any permanent improvement on such land, shall be encumbered, alienated, or
transferred, except to persons, corporations, associations, or partnerships who may
acquire lands of the public domain under this Act or to corporations organized in the
Philippines authorized therefor by their charters.
Sec. 123. No land originally acquired in any manner under the provisions of any
previous Act, ordinance, royal decree, royal order, or any other provision of law
formerly in force in the Philippines with regards to public lands, terrenos baldios y
realengos, or lands of any other denomination that were actually or presumptively of
the public domain or by royal grant or in any other form, nor any permanent
improvement on such land, shall be encumbered, alienated, or conveyed, except to
persons, corporation or associations who may acquire land of the public domain under
this Act or to corporate bodies organized in the Philippines whose charters authorize
them to do so: Provided, however, That this prohibition shall not be applicable to the
conveyance or acquisition by reason or hereditary succession duly acknowledged and
legalized by competent courts; Provided, further, That in the event of the ownership of
the lands and improvements mentioned in this section and in the last preceding
section being transferred by judicial decree to persons, corporations or associations
not legally capacitated to acquire the same under the provisions of this Act, such
persons, corporation, or associations shall be obliged to alienate said lands or
improvements to others so capacitated within the precise period of five years;
otherwise, such property shall revert to the Government.
Sec. 124. Any acquisition, conveyance, alienation, transfer, or other contract made or
executed in violation of any of the provisions of sections one hundred and eighteen,
one hundred and twenty, one hundred and twenty-one, one hundred and twenty-two,
and one hundred and twenty-three of this Act shall be unlawful and null and void from
its execution and shall produce the effect of annulling and cancelling the grant, title,
patent, or permit originally issued, recognized or confirmed, actually or
presumptively, and cause the reversion of the property and its improvements to the
State.

Note that the last quoted provision declared any prohibited conveyance not only unlawful but null
and void ab initio. More important yet, it expressly provided that such conveyances will produce
"the effect of annulling and cancelling the grant, title, patent, or permit, originally issued,
recognized of confirmed, actually or presumptively", and of causing "the reversion of the
property and its improvements to the State." The reversion would seems to be but a
consequence of the annulment and cancellation of the original grant or title, and this is so for in
the event of such annulment or cancellation no one else could legitimately claim the property
except its original owner or grantor the state.
We repeat. There are two ways now open to our government whereby it could implement the
doctrine of this Court in the Krivenko case thereby putting in force and carrying to its logical
conclusion the mandate of our Constitution. By following either of these remedies, or by
approving an implementary law as above suggested, we can enforce the fundamental policy of
our Constitution regarding our natural resources without doing violence to the principle of pari
delicto. With these remedies open to us, we see no justifiable reason for pursuing the extreme
unusual remedy now vehemently urged by the amici curiae.
In view of the foregoing, we hold that the sale in question is null and void, but plaintiff is barred
from taking the present action under the principle of pari delicto.1wphl.nt
The decision appealed from is hereby affirmed without pronouncement as to costs.

G.R. No. L-17587

September 12, 1967

PHILIPPINE BANKING CORPORATION, representing the estate of JUSTINA SANTOS Y

CANON FAUSTINO, deceased, plaintiff-appellant,
vs.
LUI SHE in her own behalf and as administratrix of the intestate estate of Wong Heng,
deceased,defendant-appellant.

salaries of the maids in her household, the charge not to exceed P1,800 a month. The option
was conditioned on his obtaining Philippine citizenship, a petition for which was then pending in
the Court of First Instance of Rizal. It appears, however, that this application for naturalization
was withdrawn when it was discovered that he was not a resident of Rizal. On October 28, 1958
she filed a petition to adopt him and his children on the erroneous belief that adoption would
confer on them Philippine citizenship. The error was discovered and the proceedings were
abandoned.

Nicanor S. Sison for plaintiff-appellant.

Ozaeta, Gibbs & Ozaeta for defendant-appellant.

On November 18, 1958 she executed two other contracts, one (Plff Exh. 5) extending the term of
the lease to 99 years, and another (Plff Exh. 6) fixing the term of the option of 50 years. Both
contracts are written in Tagalog.

CASTRO, J.:

In two wills executed on August 24 and 29, 1959 (Def Exhs. 285 & 279), she bade her legatees
to respect the contracts she had entered into with Wong, but in a codicil (Plff Exh. 17) of a later
date (November 4, 1959) she appears to have a change of heart. Claiming that the various
contracts were made by her because of machinations and inducements practiced by him, she
now directed her executor to secure the annulment of the contracts.

Justina Santos y Canon Faustino and her sister Lorenzo were the owners in common of a piece
of land in Manila. This parcel, with an area of 2,582.30 square meters, is located on Rizal
Avenue and opens into Florentino Torres street at the back and Katubusan street on one side. In
it are two residential houses with entrance on Florentino Torres street and the Hen Wah
Restaurant with entrance on Rizal Avenue. The sisters lived in one of the houses, while Wong
Heng, a Chinese, lived with his family in the restaurant. Wong had been a long-time lessee of a
portion of the property, paying a monthly rental of P2,620.
On September 22, 1957 Justina Santos became the owner of the entire property as her sister
died with no other heir. Then already well advanced in years, being at the time 90 years old,
blind, crippled and an invalid, she was left with no other relative to live with. Her only
companions in the house were her 17 dogs and 8 maids. Her otherwise dreary existence was
brightened now and then by the visits of Wong's four children who had become the joy of her
life. Wong himself was the trusted man to whom she delivered various amounts for safekeeping,
including rentals from her property at the corner of Ongpin and Salazar streets and the rentals
which Wong himself paid as lessee of a part of the Rizal Avenue property. Wong also took care
of the payment; in her behalf, of taxes, lawyers' fees, funeral expenses, masses, salaries of
maids and security guard, and her household expenses.
"In grateful acknowledgment of the personal services of the lessee to her," Justina Santos
executed on November 15, 1957 a contract of lease (Plff Exh. 3) in favor of Wong, covering the
portion then already leased to him and another portion fronting Florentino Torres street. The
lease was for 50 years, although the lessee was given the right to withdraw at any time from the
agreement; the monthly rental was P3,120. The contract covered an area of 1,124 square
meters. Ten days later (November 25), the contract was amended (Plff Exh. 4) so as to make it
cover the entire property, including the portion on which the house of Justina Santos stood, at an
additional monthly rental of P360. For his part Wong undertook to pay, out of the rental due from
him, an amount not exceeding P1,000 a month for the food of her dogs and the salaries of her
maids.
On December 21 she executed another contract (Plff Exh. 7) giving Wong the option to buy the
leased premises for P120,000, payable within ten years at a monthly installment of P1,000. The
option, written in Tagalog, imposed on him the obligation to pay for the food of the dogs and the

On November 18 the present action was filed in the Court of First Instance of Manila. The
complaint alleged that the contracts were obtained by Wong "through fraud, misrepresentation,
inequitable conduct, undue influence and abuse of confidence and trust of and (by) taking
advantage of the helplessness of the plaintiff and were made to circumvent the constitutional
provision prohibiting aliens from acquiring lands in the Philippines and also of the Philippine
Naturalization Laws." The court was asked to direct the Register of Deeds of Manila to cancel
the registration of the contracts and to order Wong to pay Justina Santos the additional rent of
P3,120 a month from November 15, 1957 on the allegation that the reasonable rental of the
leased premises was P6,240 a month.
In his answer, Wong admitted that he enjoyed her trust and confidence as proof of which he
volunteered the information that, in addition to the sum of P3,000 which he said she had
delivered to him for safekeeping, another sum of P22,000 had been deposited in a joint account
which he had with one of her maids. But he denied having taken advantage of her trust in order
to secure the execution of the contracts in question. As counterclaim he sought the recovery of
P9,210.49 which he said she owed him for advances.
Wong's admission of the receipt of P22,000 and P3,000 was the cue for the filing of an amended
complaint. Thus on June 9, 1960, aside from the nullity of the contracts, the collection of various
amounts allegedly delivered on different occasions was sought. These amounts and the dates of
their delivery are P33,724.27 (Nov. 4, 1957); P7,344.42 (Dec. 1, 1957); P10,000 (Dec. 6, 1957);
P22,000 and P3,000 (as admitted in his answer). An accounting of the rentals from the Ongpin
and Rizal Avenue properties was also demanded.
In the meantime as a result of a petition for guardianship filed in the Juvenile and Domestic
Relations Court, the Security Bank & Trust Co. was appointed guardian of the properties of
Justina Santos, while Ephraim G. Gochangco was appointed guardian of her person.
In his answer, Wong insisted that the various contracts were freely and voluntarily entered into
by the parties. He likewise disclaimed knowledge of the sum of P33,724.27, admitted receipt of
P7,344.42 and P10,000, but contended that these amounts had been spent in accordance with

the instructions of Justina Santos; he expressed readiness to comply with any order that the
court might make with respect to the sums of P22,000 in the bank and P3,000 in his possession.
The case was heard, after which the lower court rendered judgment as follows:
[A]ll the documents mentioned in the first cause of action, with the exception of the
first which is the lease contract of 15 November 1957, are declared null and void;
Wong Heng is condemned to pay unto plaintiff thru guardian of her property the sum
of P55,554.25 with legal interest from the date of the filing of the amended complaint;
he is also ordered to pay the sum of P3,120.00 for every month of his occupation as
lessee under the document of lease herein sustained, from 15 November 1959, and
the moneys he has consigned since then shall be imputed to that; costs against Wong
Heng.
From this judgment both parties appealed directly to this Court. After the case was submitted for
decision, both parties died, Wong Heng on October 21, 1962 and Justina Santos on December
28, 1964. Wong was substituted by his wife, Lui She, the other defendant in this case, while
Justina Santos was substituted by the Philippine Banking Corporation.
Justina Santos maintained now reiterated by the Philippine Banking Corporation that the
lease contract (Plff Exh. 3) should have been annulled along with the four other contracts (Plff
Exhs. 4-7) because it lacks mutuality; because it included a portion which, at the time, was
in custodia legis; because the contract was obtained in violation of the fiduciary relations of the
parties; because her consent was obtained through undue influence, fraud and
misrepresentation; and because the lease contract, like the rest of the contracts, is absolutely
simulated.
Paragraph 5 of the lease contract states that "The lessee may at any time withdraw from this
agreement." It is claimed that this stipulation offends article 1308 of the Civil Code which
provides that "the contract must bind both contracting parties; its validity or compliance cannot
be left to the will of one of them."
We have had occasion to delineate the scope and application of article 1308 in the early case
of Taylor v. Uy Tieng Piao.1 We said in that case:
Article 1256 [now art. 1308] of the Civil Code in our opinion creates no impediment to
the insertion in a contract for personal service of a resolutory condition permitting the
cancellation of the contract by one of the parties. Such a stipulation, as can be readily
seen, does not make either the validity or the fulfillment of the contract dependent
upon the will of the party to whom is conceded the privilege of cancellation; for where
the contracting parties have agreed that such option shall exist, the exercise of the
option is as much in the fulfillment of the contract as any other act which may have
been the subject of agreement. Indeed, the cancellation of a contract in accordance
with conditions agreed upon beforehand is fulfillment.2
And so it was held in Melencio v. Dy Tiao Lay 3 that a "provision in a lease contract that the
lessee, at any time before he erected any building on the land, might rescind the lease, can
hardly be regarded as a violation of article 1256 [now art. 1308] of the Civil Code."

The case of Singson Encarnacion v. Baldomar 4 cannot be cited in support of the claim of want
of mutuality, because of a difference in factual setting. In that case, the lessees argued that they
could occupy the premises as long as they paid the rent. This is of course untenable, for as this
Court said, "If this defense were to be allowed, so long as defendants elected to continue the
lease by continuing the payment of the rentals, the owner would never be able to discontinue it;
conversely, although the owner should desire the lease to continue the lessees could effectively
thwart his purpose if they should prefer to terminate the contract by the simple expedient of
stopping payment of the rentals." Here, in contrast, the right of the lessee to continue the lease
or to terminate it is so circumscribed by the term of the contract that it cannot be said that the
continuance of the lease depends upon his will. At any rate, even if no term had been fixed in
the agreement, this case would at most justify the fixing of a period5 but not the annulment of the
contract.
Nor is there merit in the claim that as the portion of the property formerly owned by the sister of
Justina Santos was still in the process of settlement in the probate court at the time it was
leased, the lease is invalid as to such portion. Justina Santos became the owner of the entire
property upon the death of her sister Lorenzo on September 22, 1957 by force of article 777 of
the Civil Code. Hence, when she leased the property on November 15, she did so already as
owner thereof. As this Court explained in upholding the sale made by an heir of a property under
judicial administration:
That the land could not ordinarily be levied upon while in custodia legis does not mean
that one of the heirs may not sell the right, interest or participation which he has or
might have in the lands under administration. The ordinary execution of property
in custodia legis is prohibited in order to avoid interference with the possession by the
court. But the sale made by an heir of his share in an inheritance, subject to the result
of the pending administration, in no wise stands in the way of such administration. 6
It is next contended that the lease contract was obtained by Wong in violation of his fiduciary
relationship with Justina Santos, contrary to article 1646, in relation to article 1941 of the Civil
Code, which disqualifies "agents (from leasing) the property whose administration or sale may
have been entrusted to them." But Wong was never an agent of Justina Santos. The relationship
of the parties, although admittedly close and confidential, did not amount to an agency so as to
bring the case within the prohibition of the law.
Just the same, it is argued that Wong so completely dominated her life and affairs that the
contracts express not her will but only his. Counsel for Justina Santos cites the testimony of Atty.
Tomas S. Yumol who said that he prepared the lease contract on the basis of data given to him
by Wong and that she told him that "whatever Mr. Wong wants must be followed."7
The testimony of Atty. Yumol cannot be read out of context in order to warrant a finding that
Wong practically dictated the terms of the contract. What this witness said was:
Q Did you explain carefully to your client, Doa Justina, the contents of this document
before she signed it?
A I explained to her each and every one of these conditions and I also told her these
conditions were quite onerous for her, I don't really know if I have expressed my

opinion, but I told her that we would rather not execute any contract anymore, but to
hold it as it was before, on a verbal month to month contract of lease.
Q But, she did not follow your advice, and she went with the contract just the same?
A She agreed first . . .
Q Agreed what?
A Agreed with my objectives that it is really onerous and that I was really right, but
after that, I was called again by her and she told me to follow the wishes of Mr. Wong
Heng.
xxx

xxx

xxx

Q So, as far as consent is concerned, you were satisfied that this document was
perfectly proper?
xxx

xxx

xxx

A Your Honor, if I have to express my personal opinion, I would say she is not,
because, as I said before, she told me "Whatever Mr. Wong wants must be
followed."8

Indeed, the charge of undue influence in this case rests on a mere inference12 drawn from the
fact that Justina Santos could not read (as she was blind) and did not understand the English
language in which the contract is written, but that inference has been overcome by her own
evidence.
Nor is there merit in the claim that her consent to the lease contract, as well as to the rest of the
contracts in question, was given out of a mistaken sense of gratitude to Wong who, she was
made to believe, had saved her and her sister from a fire that destroyed their house during the
liberation of Manila. For while a witness claimed that the sisters were saved by other persons
(the brothers Edilberto and Mariano Sta. Ana)13 it was Justina Santos herself who, according to
her own witness, Benjamin C. Alonzo, said "very emphatically" that she and her sister would
have perished in the fire had it not been for Wong.14 Hence the recital in the deed of conditional
option (Plff Exh. 7) that "[I]tong si Wong Heng ang siyang nagligtas sa aming dalawang
magkapatid sa halos ay tiyak na kamatayan", and the equally emphatic avowal of gratitude in
the lease contract (Plff Exh. 3).
As it was with the lease contract (Plff Exh. 3), so it was with the rest of the contracts (Plff Exhs.
4-7) the consent of Justina Santos was given freely and voluntarily. As Atty. Alonzo, testifying
for her, said:
[I]n nearly all documents, it was either Mr. Wong Heng or Judge Torres and/or both.
When we had conferences, they used to tell me what the documents should contain.
But, as I said, I would always ask the old woman about them and invariably the old
woman used to tell me: "That's okay. It's all right."15

Wong might indeed have supplied the data which Atty. Yumol embodied in the lease contract,
but to say this is not to detract from the binding force of the contract. For the contract was fully
explained to Justina Santos by her own lawyer. One incident, related by the same witness,
makes clear that she voluntarily consented to the lease contract. This witness said that the
original term fixed for the lease was 99 years but that as he doubted the validity of a lease to an
alien for that length of time, he tried to persuade her to enter instead into a lease on a month-tomonth basis. She was, however, firm and unyielding. Instead of heeding the advice of the
lawyer, she ordered him, "Just follow Mr. Wong Heng."9 Recounting the incident, Atty. Yumol
declared on cross examination:

But the lower court set aside all the contracts, with the exception of the lease contract of
November 15, 1957, on the ground that they are contrary to the expressed wish of Justina
Santos and that their considerations are fictitious. Wong stated in his deposition that he did not
pay P360 a month for the additional premises leased to him, because she did not want him to,
but the trial court did not believe him. Neither did it believe his statement that he paid P1,000 as
consideration for each of the contracts (namely, the option to buy the leased premises, the
extension of the lease to 99 years, and the fixing of the term of the option at 50 years), but that
the amount was returned to him by her for safekeeping. Instead, the court relied on the
testimony of Atty. Alonzo in reaching the conclusion that the contracts are void for want of
consideration.

Considering her age, ninety (90) years old at the time and her condition, she is a
wealthy woman, it is just natural when she said "This is what I want and this will be
done." In particular reference to this contract of lease, when I said "This is not proper,"
she said "You just go ahead, you prepare that, I am the owner, and if there is any
illegality, I am the only one that can question the illegality."10

Atty. Alonzo declared that he saw no money paid at the time of the execution of the documents,
but his negative testimony does not rule out the possibility that the considerations were paid at
some other time as the contracts in fact recite. What is more, the consideration need not pass
from one party to the other at the time a contract is executed because the promise of one is the
consideration for the other.16

Atty. Yumol further testified that she signed the lease contract in the presence of her close friend,
Hermenegilda Lao, and her maid, Natividad Luna, who was constantly by her side.11 Any of them
could have testified on the undue influence that Wong supposedly wielded over Justina Santos,
but neither of them was presented as a witness. The truth is that even after giving his client time
to think the matter over, the lawyer could not make her change her mind. This persuaded the
lower court to uphold the validity of the lease contract against the claim that it was procured
through undue influence.

With respect to the lower court's finding that in all probability Justina Santos could not have
intended to part with her property while she was alive nor even to lease it in its entirety as her
house was built on it, suffice it to quote the testimony of her own witness and lawyer who
prepared the contracts (Plff Exhs. 4-7) in question, Atty. Alonzo:
The ambition of the old woman, before her death, according to her revelation to me,
was to see to it that these properties be enjoyed, even to own them, by Wong Heng

because Doa Justina told me that she did not have any relatives, near or far, and she
considered Wong Heng as a son and his children her grandchildren; especially her
consolation in life was when she would hear the children reciting prayers in Tagalog. 17
She was very emphatic in the care of the seventeen (17) dogs and of the maids who
helped her much, and she told me to see to it that no one could disturb Wong Heng
from those properties. That is why we thought of the ninety-nine (99) years lease; we
thought of adoption, believing that thru adoption Wong Heng might acquire Filipino
citizenship; being the adopted child of a Filipino citizen.18
This is not to say, however, that the contracts (Plff Exhs. 3-7) are valid. For the testimony just
quoted, while dispelling doubt as to the intention of Justina Santos, at the same time gives the
clue to what we view as a scheme to circumvent the Constitutional prohibition against the
transfer of lands to aliens. "The illicit purpose then becomes the illegal causa"19 rendering the
contracts void.
Taken singly, the contracts show nothing that is necessarily illegal, but considered collectively,
they reveal an insidious pattern to subvert by indirection what the Constitution directly prohibits.
To be sure, a lease to an alien for a reasonable period is valid. So is an option giving an alien
the right to buy real property on condition that he is granted Philippine citizenship. As this Court
said in Krivenko v. Register of Deeds:20
[A]liens are not completely excluded by the Constitution from the use of lands for
residential purposes. Since their residence in the Philippines is temporary, they may
be granted temporary rights such as a lease contract which is not forbidden by the
Constitution. Should they desire to remain here forever and share our fortunes and
misfortunes, Filipino citizenship is not impossible to acquire.
But if an alien is given not only a lease of, but also an option to buy, a piece of land, by virtue of
which the Filipino owner cannot sell or otherwise dispose of his property,21 this to last for 50
years, then it becomes clear that the arrangement is a virtual transfer of ownership whereby the
owner divests himself in stages not only of the right to enjoy the land ( jus possidendi, jus utendi,
jus fruendi and jus abutendi) but also of the right to dispose of it ( jus disponendi) rights the
sum total of which make up ownership. It is just as if today the possession is transferred,
tomorrow, the use, the next day, the disposition, and so on, until ultimately all the rights of which
ownership is made up are consolidated in an alien. And yet this is just exactly what the parties in
this case did within the space of one year, with the result that Justina Santos' ownership of her
property was reduced to a hollow concept. If this can be done, then the Constitutional ban
against alien landholding in the Philippines, as announced in Krivenko v. Register of Deeds,22 is
indeed in grave peril.
It does not follow from what has been said, however, that because the parties are in pari
delicto they will be left where they are, without relief. For one thing, the original parties who were
guilty of a violation of the fundamental charter have died and have since been substituted by
their administrators to whom it would be unjust to impute their guilt. 23 For another thing, and this
is not only cogent but also important, article 1416 of the Civil Code provides, as an exception to
the rule on pari delicto, that "When the agreement is not illegal per se but is merely prohibited,
and the prohibition by law is designed for the protection of the plaintiff, he may, if public policy is
thereby enhanced, recover what he has paid or delivered." The Constitutional provision that

"Save in cases of hereditary succession, no private agricultural land shall be transferred or

assigned except to individuals, corporations, or associations qualified to acquire or hold lands of
the public domain in the Philippines"24 is an expression of public policy to conserve lands for the
Filipinos. As this Court said in Krivenko:
It is well to note at this juncture that in the present case we have no choice. We are
construing the Constitution as it is and not as we may desire it to be. Perhaps the
effect of our construction is to preclude aliens admitted freely into the Philippines from
owning sites where they may build their homes. But if this is the solemn mandate of
the Constitution, we will not attempt to compromise it even in the name of amity or
equity . . . .
For all the foregoing, we hold that under the Constitution aliens may not acquire
private or public agricultural lands, including residential lands, and, accordingly,
judgment is affirmed, without costs.25
That policy would be defeated and its continued violation sanctioned if, instead of setting the
contracts aside and ordering the restoration of the land to the estate of the deceased Justina
Santos, this Court should apply the general rule of pari delicto. To the extent that our ruling in
this case conflicts with that laid down in Rellosa v. Gaw Chee Hun 26 and subsequent similar
cases, the latter must be considered as pro tanto qualified.
The claim for increased rentals and attorney's fees, made in behalf of Justina Santos, must be
denied for lack of merit.
And what of the various amounts which Wong received in trust from her? It appears that he kept
two classes of accounts, one pertaining to amount which she entrusted to him from time to time,
and another pertaining to rentals from the Ongpin property and from the Rizal Avenue property,
which he himself was leasing.
With respect to the first account, the evidence shows that he received P33,724.27 on November
8, 1957 (Plff Exh. 16); P7,354.42 on December 1, 1957 (Plff Exh. 13); P10,000 on December 6,
1957 (Plff Exh. 14) ; and P18,928.50 on August 26, 1959 (Def. Exh. 246), or a total of
P70,007.19. He claims, however, that he settled his accounts and that the last amount of
P18,928.50 was in fact payment to him of what in the liquidation was found to be due to him.
He made disbursements from this account to discharge Justina Santos' obligations for taxes,
attorneys' fees, funeral services and security guard services, but the checks (Def Exhs. 247-278)
drawn by him for this purpose amount to only P38,442.84.27 Besides, if he had really settled his
accounts with her on August 26, 1959, we cannot understand why he still had P22,000 in the
bank and P3,000 in his possession, or a total of P25,000. In his answer, he offered to pay this
amount if the court so directed him. On these two grounds, therefore, his claim of liquidation and
settlement of accounts must be rejected.
After subtracting P38,442.84 (expenditures) from P70,007.19 (receipts), there is a difference of
P31,564 which, added to the amount of P25,000, leaves a balance of P56,564.3528 in favor of
Justina Santos.

As to the second account, the evidence shows that the monthly income from the Ongpin
property until its sale in Rizal Avenue July, 1959 was P1,000, and that from the Rizal Avenue
property, of which Wong was the lessee, was P3,120. Against this account the household
expenses and disbursements for the care of the 17 dogs and the salaries of the 8 maids of
Justina Santos were charged. This account is contained in a notebook (Def. Exh. 6) which
shows a balance of P9,210.49 in favor of Wong. But it is claimed that the rental from both the
Ongpin and Rizal Avenue properties was more than enough to pay for her monthly expenses
and that, as a matter of fact, there should be a balance in her favor. The lower court did not allow
either party to recover against the other. Said the court:
[T]he documents bear the earmarks of genuineness; the trouble is that they were
made only by Francisco Wong and Antonia Matias, nick-named Toning, which was
the way she signed the loose sheets, and there is no clear proof that Doa Justina
had authorized these two to act for her in such liquidation; on the contrary if the result
of that was a deficit as alleged and sought to be there shown, of P9,210.49, that was
not what Doa Justina apparently understood for as the Court understands her
statement to the Honorable Judge of the Juvenile Court . . . the reason why she
preferred to stay in her home was because there she did not incur in any debts . . .
this being the case, . . . the Court will not adjudicate in favor of Wong Heng on his
counterclaim; on the other hand, while it is claimed that the expenses were much less
than the rentals and there in fact should be a superavit, . . . this Court must concede
that daily expenses are not easy to compute, for this reason, the Court faced with the
choice of the two alternatives will choose the middle course which after all is permitted
by the rules of proof, Sec. 69, Rule 123 for in the ordinary course of things, a person
will live within his income so that the conclusion of the Court will be that there is
neither deficit nor superavit and will let the matter rest here.
Both parties on appeal reiterate their respective claims but we agree with the lower court that
both claims should be denied. Aside from the reasons given by the court, we think that the claim
of Justina Santos totalling P37,235, as rentals due to her after deducting various expenses,
should be rejected as the evidence is none too clear about the amounts spent by Wong for
food29 masses30 and salaries of her maids.31 His claim for P9,210.49 must likewise be rejected as
his averment of liquidation is belied by his own admission that even as late as 1960 he still had
P22,000 in the bank and P3,000 in his possession.
ACCORDINGLY, the contracts in question (Plff Exhs. 3-7) are annulled and set aside; the land
subject-matter of the contracts is ordered returned to the estate of Justina Santos as
represented by the Philippine Banking Corporation; Wong Heng (as substituted by the
defendant-appellant Lui She) is ordered to pay the Philippine Banking Corporation the sum of
P56,564.35, with legal interest from the date of the filing of the amended complaint; and the
amounts consigned in court by Wong Heng shall be applied to the payment of rental from
November 15, 1959 until the premises shall have been vacated by his heirs. Costs against the
defendant-appellant.

G.R. No. 133250

July 9, 2002

FRANCISCO I. CHAVEZ, petitioner,

vs.
PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY DEVELOPMENT
CORPORATION, respondents.
CARPIO, J.:
This is an original Petition for Mandamus with prayer for a writ of preliminary injunction and a
temporary restraining order. The petition seeks to compel the Public Estates Authority ("PEA" for
brevity) to disclose all facts on PEA's then on-going renegotiations with Amari Coastal Bay and
Development Corporation ("AMARI" for brevity) to reclaim portions of Manila Bay. The petition
further seeks to enjoin PEA from signing a new agreement with AMARI involving such
reclamation.
The Facts
On November 20, 1973, the government, through the Commissioner of Public Highways, signed
a contract with the Construction and Development Corporation of the Philippines ("CDCP" for
brevity) to reclaim certain foreshore and offshore areas of Manila Bay. The contract also
included the construction of Phases I and II of the Manila-Cavite Coastal Road. CDCP obligated
itself to carry out all the works in consideration of fifty percent of the total reclaimed land.
On February 4, 1977, then President Ferdinand E. Marcos issued Presidential Decree No. 1084
creating PEA. PD No. 1084 tasked PEA "to reclaim land, including foreshore and submerged
areas," and "to develop, improve, acquire, x x x lease and sell any and all kinds of lands."1 On
the same date, then President Marcos issued Presidential Decree No. 1085 transferring to PEA
the "lands reclaimed in the foreshore and offshore of the Manila Bay"2 under the Manila-Cavite
Coastal Road and Reclamation Project (MCCRRP).
On December 29, 1981, then President Marcos issued a memorandum directing PEA to amend
its contract with CDCP, so that "[A]ll future works in MCCRRP x x x shall be funded and owned
by PEA." Accordingly, PEA and CDCP executed a Memorandum of Agreement dated December
29, 1981, which stated:
"(i) CDCP shall undertake all reclamation, construction, and such other works in the
MCCRRP as may be agreed upon by the parties, to be paid according to progress of
works on a unit price/lump sum basis for items of work to be agreed upon, subject to
price escalation, retention and other terms and conditions provided for in Presidential
Decree No. 1594. All the financing required for such works shall be provided by PEA.
xxx
(iii) x x x CDCP shall give up all its development rights and hereby agrees to cede and
transfer in favor of PEA, all of the rights, title, interest and participation of CDCP in and
to all the areas of land reclaimed by CDCP in the MCCRRP as of December 30, 1981
which have not yet been sold, transferred or otherwise disposed of by CDCP as of
said date, which areas consist of approximately Ninety-Nine Thousand Four Hundred
Seventy Three (99,473) square meters in the Financial Center Area covered by land
pledge No. 5 and approximately Three Million Three Hundred Eighty Two Thousand
Eight Hundred Eighty Eight (3,382,888) square meters of reclaimed areas at varying
elevations above Mean Low Water Level located outside the Financial Center Area
and the First Neighborhood Unit."3

On January 19, 1988, then President Corazon C. Aquino issued Special Patent No. 3517,
granting and transferring to PEA "the parcels of land so reclaimed under the Manila-Cavite
Coastal Road and Reclamation Project (MCCRRP) containing a total area of one million nine
hundred fifteen thousand eight hundred ninety four (1,915,894) square meters." Subsequently,
on April 9, 1988, the Register of Deeds of the Municipality of Paraaque issued Transfer
Certificates of Title Nos. 7309, 7311, and 7312, in the name of PEA, covering the three
reclaimed islands known as the "Freedom Islands" located at the southern portion of the ManilaCavite Coastal Road, Paraaque City. The Freedom Islands have a total land area of One
Million Five Hundred Seventy Eight Thousand Four Hundred and Forty One (1,578,441) square
meters or 157.841 hectares.
On April 25, 1995, PEA entered into a Joint Venture Agreement ("JVA" for brevity) with AMARI, a
private corporation, to develop the Freedom Islands. The JVA also required the reclamation of
an additional 250 hectares of submerged areas surrounding these islands to complete the
configuration in the Master Development Plan of the Southern Reclamation Project-MCCRRP.
PEA and AMARI entered into the JVA through negotiation without public bidding.4 On April 28,
1995, the Board of Directors of PEA, in its Resolution No. 1245, confirmed the JVA.5On June 8,
1995, then President Fidel V. Ramos, through then Executive Secretary Ruben Torres, approved
the JVA.6
On November 29, 1996, then Senate President Ernesto Maceda delivered a privilege speech in
the Senate and denounced the JVA as the "grandmother of all scams." As a result, the Senate
Committee on Government Corporations and Public Enterprises, and the Committee on
Accountability of Public Officers and Investigations, conducted a joint investigation. The Senate
Committees reported the results of their investigation in Senate Committee Report No. 560
dated September 16, 1997.7 Among the conclusions of their report are: (1) the reclaimed lands
PEA seeks to transfer to AMARI under the JVA are lands of the public domain which the
government has not classified as alienable lands and therefore PEA cannot alienate these lands;
(2) the certificates of title covering the Freedom Islands are thus void, and (3) the JVA itself is
illegal.
On December 5, 1997, then President Fidel V. Ramos issued Presidential Administrative Order
No. 365 creating a Legal Task Force to conduct a study on the legality of the JVA in view of
Senate Committee Report No. 560. The members of the Legal Task Force were the Secretary of
Justice,8 the Chief Presidential Legal Counsel,9 and the Government Corporate Counsel.10 The
Legal Task Force upheld the legality of the JVA, contrary to the conclusions reached by the
Senate Committees.11
On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published reports that there were
on-going renegotiations between PEA and AMARI under an order issued by then President Fidel
V. Ramos. According to these reports, PEA Director Nestor Kalaw, PEA Chairman Arsenio Yulo
and retired Navy Officer Sergio Cruz composed the negotiating panel of PEA.
On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for Prohibition with
Application for the Issuance of a Temporary Restraining Order and Preliminary
Injunction docketed as G.R. No. 132994 seeking to nullify the JVA. The Court dismissed the
petition "for unwarranted disregard of judicial hierarchy, without prejudice to the refiling of the
case before the proper court."12
On April 27, 1998, petitioner Frank I. Chavez ("Petitioner" for brevity) as a taxpayer, filed the
instant Petition for Mandamus with Prayer for the Issuance of a Writ of Preliminary Injunction
and Temporary Restraining Order. Petitioner contends the government stands to lose billions of
pesos in the sale by PEA of the reclaimed lands to AMARI. Petitioner prays that PEA publicly
disclose the terms of any renegotiation of the JVA, invoking Section 28, Article II, and Section 7,
Article III, of the 1987 Constitution on the right of the people to information on matters of public

concern. Petitioner assails the sale to AMARI of lands of the public domain as a blatant violation
of Section 3, Article XII of the 1987 Constitution prohibiting the sale of alienable lands of the
public domain to private corporations. Finally, petitioner asserts that he seeks to enjoin the loss
of billions of pesos in properties of the State that are of public dominion.
After several motions for extension of time,13 PEA and AMARI filed their Comments on October
19, 1998 and June 25, 1998, respectively. Meanwhile, on December 28, 1998, petitioner filed an
Omnibus Motion: (a) to require PEA to submit the terms of the renegotiated PEA-AMARI
contract; (b) for issuance of a temporary restraining order; and (c) to set the case for hearing on
oral argument. Petitioner filed a Reiterative Motion for Issuance of a TRO dated May 26, 1999,
which the Court denied in a Resolution dated June 22, 1999.
In a Resolution dated March 23, 1999, the Court gave due course to the petition and required
the parties to file their respective memoranda.
On March 30, 1999, PEA and AMARI signed the Amended Joint Venture Agreement ("Amended
JVA," for brevity). On May 28, 1999, the Office of the President under the administration of then
President Joseph E. Estrada approved the Amended JVA.
Due to the approval of the Amended JVA by the Office of the President, petitioner now prays that
on "constitutional and statutory grounds the renegotiated contract be declared null and void."14
The Issues
The issues raised by petitioner, PEA15 and AMARI16 are as follows:
I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE
MOOT AND ACADEMIC BECAUSE OF SUBSEQUENT EVENTS;
II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE
THE PRINCIPLE GOVERNING THE HIERARCHY OF COURTS;
III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF
ADMINISTRATIVE REMEDIES;
IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT;
V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES
OFFICIAL INFORMATION ON ON-GOING NEGOTIATIONS BEFORE A FINAL
AGREEMENT;
VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE
AGREEMENT FOR THE TRANSFER TO AMARI OF CERTAIN LANDS, RECLAIMED
AND STILL TO BE RECLAIMED, VIOLATE THE 1987 CONSTITUTION; AND
VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE
OF WHETHER THE AMENDED JOINT VENTURE AGREEMENT IS GROSSLY
DISADVANTAGEOUS TO THE GOVERNMENT.
The Court's Ruling

First issue: whether the principal reliefs prayed for in the petition are moot and academic
because of subsequent events.
The petition prays that PEA publicly disclose the "terms and conditions of the on-going
negotiations for a new agreement." The petition also prays that the Court enjoin PEA from
"privately entering into, perfecting and/or executing any new agreement with AMARI."
PEA and AMARI claim the petition is now moot and academic because AMARI furnished
petitioner on June 21, 1999 a copy of the signed Amended JVA containing the terms and
conditions agreed upon in the renegotiations. Thus, PEA has satisfied petitioner's prayer for a
public disclosure of the renegotiations. Likewise, petitioner's prayer to enjoin the signing of the
Amended JVA is now moot because PEA and AMARI have already signed the Amended JVA on
March 30, 1999. Moreover, the Office of the President has approved the Amended JVA on May
28, 1999.
Petitioner counters that PEA and AMARI cannot avoid the constitutional issue by simply fasttracking the signing and approval of the Amended JVA before the Court could act on the issue.
Presidential approval does not resolve the constitutional issue or remove it from the ambit of
judicial review.
We rule that the signing of the Amended JVA by PEA and AMARI and its approval by the
President cannot operate to moot the petition and divest the Court of its jurisdiction. PEA and
AMARI have still to implement the Amended JVA. The prayer to enjoin the signing of the
Amended JVA on constitutional grounds necessarily includes preventing its implementation if in
the meantime PEA and AMARI have signed one in violation of the Constitution. Petitioner's
principal basis in assailing the renegotiation of the JVA is its violation of Section 3, Article XII of
the Constitution, which prohibits the government from alienating lands of the public domain to
private corporations. If the Amended JVA indeed violates the Constitution, it is the duty of the
Court to enjoin its implementation, and if already implemented, to annul the effects of such
unconstitutional contract.
The Amended JVA is not an ordinary commercial contract but one which seeks to transfer title
and ownership to 367.5 hectares of reclaimed lands and submerged areas of Manila Bay
to a single private corporation. It now becomes more compelling for the Court to resolve the
issue to insure the government itself does not violate a provision of the Constitution intended to
safeguard the national patrimony. Supervening events, whether intended or accidental, cannot
prevent the Court from rendering a decision if there is a grave violation of the Constitution. In the
instant case, if the Amended JVA runs counter to the Constitution, the Court can still prevent the
transfer of title and ownership of alienable lands of the public domain in the name of AMARI.
Even in cases where supervening events had made the cases moot, the Court did not hesitate
to resolve the legal or constitutional issues raised to formulate controlling principles to guide the
bench, bar, and the public.17
Also, the instant petition is a case of first impression. All previous decisions of the Court involving
Section 3, Article XII of the 1987 Constitution, or its counterpart provision in the 1973
Constitution,18 covered agricultural landssold to private corporations which acquired the lands
from private parties. The transferors of the private corporations claimed or could claim the right
to judicial confirmation of their imperfect titles19 under Title II of Commonwealth Act. 141
("CA No. 141" for brevity). In the instant case, AMARI seeks to acquire from PEA, a public
corporation, reclaimed lands and submerged areas for non-agricultural purposes
by purchase under PD No. 1084 (charter of PEA) and Title III of CA No. 141. Certain
undertakings by AMARI under the Amended JVA constitute the consideration for the purchase.
Neither AMARI nor PEA can claim judicial confirmation of their titles because the lands covered
by the Amended JVA are newly reclaimed or still to be reclaimed. Judicial confirmation of
imperfect title requires open, continuous, exclusive and notorious occupation of agricultural

lands of the public domain for at least thirty years since June 12, 1945 or earlier. Besides, the
deadline for filing applications for judicial confirmation of imperfect title expired on December 31,
1987.20
Lastly, there is a need to resolve immediately the constitutional issue raised in this petition
because of the possible transfer at any time by PEA to AMARI of title and ownership to portions
of the reclaimed lands. Under the Amended JVA, PEA is obligated to transfer to AMARI the
latter's seventy percent proportionate share in the reclaimed areas as the reclamation
progresses. The Amended JVA even allows AMARI to mortgage at any time the entire reclaimed
area to raise financing for the reclamation project.21
Second issue: whether the petition merits dismissal for failing to observe the principle
governing the hierarchy of courts.
PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief directly from the
Court. The principle of hierarchy of courts applies generally to cases involving factual questions.
As it is not a trier of facts, the Court cannot entertain cases involving factual issues. The instant
case, however, raises constitutional issues of transcendental importance to the public.22 The
Court can resolve this case without determining any factual issue related to the case. Also, the
instant case is a petition for mandamus which falls under the original jurisdiction of the Court
under Section 5, Article VIII of the Constitution. We resolve to exercise primary jurisdiction over
the instant case.
Third issue: whether the petition merits dismissal for non-exhaustion of administrative
remedies.
PEA faults petitioner for seeking judicial intervention in compelling PEA to disclose publicly
certain information without first asking PEA the needed information. PEA claims petitioner's
direct resort to the Court violates the principle of exhaustion of administrative remedies. It also
violates the rule that mandamus may issue only if there is no other plain, speedy and adequate
remedy in the ordinary course of law.
PEA distinguishes the instant case from Taada v. Tuvera23 where the Court granted the petition
for mandamus even if the petitioners there did not initially demand from the Office of the
President the publication of the presidential decrees. PEA points out that in Taada, the
Executive Department had an affirmative statutory duty under Article 2 of the Civil Code24 and
Section 1 of Commonwealth Act No. 63825 to publish the presidential decrees. There was,
therefore, no need for the petitioners in Taada to make an initial demand from the Office of the
President. In the instant case, PEA claims it has no affirmative statutory duty to disclose publicly
information about its renegotiation of the JVA. Thus, PEA asserts that the Court must apply the
principle of exhaustion of administrative remedies to the instant case in view of the failure of
petitioner here to demand initially from PEA the needed information.
The original JVA sought to dispose to AMARI public lands held by PEA, a government
corporation. Under Section 79 of the Government Auditing Code,26 the disposition of government
lands to private parties requires public bidding. PEA was under a positive legal duty to
disclose to the public the terms and conditions for the sale of its lands. The law obligated
PEA to make this public disclosure even without demand from petitioner or from anyone. PEA
failed to make this public disclosure because the original JVA, like the Amended JVA, was the
result of a negotiated contract, not of a public bidding. Considering that PEA had an affirmative
statutory duty to make the public disclosure, and was even in breach of this legal duty, petitioner
had the right to seek direct judicial intervention.

Moreover, and this alone is determinative of this issue, the principle of exhaustion of
administrative remedies does not apply when the issue involved is a purely legal or
constitutional question.27 The principal issue in the instant case is the capacity of AMARI to
acquire lands held by PEA in view of the constitutional ban prohibiting the alienation of lands of
the public domain to private corporations. We rule that the principle of exhaustion of
administrative remedies does not apply in the instant case.
Fourth issue: whether petitioner has locus standi to bring this suit
PEA argues that petitioner has no standing to institute mandamus proceedings to enforce his
constitutional right to information without a showing that PEA refused to perform an affirmative
duty imposed on PEA by the Constitution. PEA also claims that petitioner has not shown that he
will suffer any concrete injury because of the signing or implementation of the Amended JVA.
Thus, there is no actual controversy requiring the exercise of the power of judicial review.
The petitioner has standing to bring this taxpayer's suit because the petition seeks to compel
PEA to comply with its constitutional duties. There are two constitutional issues involved here.
First is the right of citizens to information on matters of public concern. Second is the application
of a constitutional provision intended to insure the equitable distribution of alienable lands of the
public domain among Filipino citizens. The thrust of the first issue is to compel PEA to disclose
publicly information on the sale of government lands worth billions of pesos, information which
the Constitution and statutory law mandate PEA to disclose. The thrust of the second issue is to
prevent PEA from alienating hundreds of hectares of alienable lands of the public domain in
violation of the Constitution, compelling PEA to comply with a constitutional duty to the nation.
Moreover, the petition raises matters of transcendental importance to the public. In Chavez v.
PCGG,28 the Court upheld the right of a citizen to bring a taxpayer's suit on matters of
transcendental importance to the public, thus "Besides, petitioner emphasizes, the matter of recovering the ill-gotten wealth of the
Marcoses is an issue of 'transcendental importance to the public.' He asserts that
ordinary taxpayers have a right to initiate and prosecute actions questioning the
validity of acts or orders of government agencies or instrumentalities, if the issues
raised are of 'paramount public interest,' and if they 'immediately affect the social,
economic and moral well being of the people.'
Moreover, the mere fact that he is a citizen satisfies the requirement of personal
interest, when the proceeding involves the assertion of a public right, such as in this
case. He invokes several decisions of this Court which have set aside the procedural
matter of locus standi, when the subject of the case involved public interest.
xxx
In Taada v. Tuvera, the Court asserted that when the issue concerns a public right
and the object of mandamus is to obtain the enforcement of a public duty, the people
are regarded as the real parties in interest; and because it is sufficient that petitioner is
a citizen and as such is interested in the execution of the laws, he need not show that
he has any legal or special interest in the result of the action. In the aforesaid case,
the petitioners sought to enforce their right to be informed on matters of public
concern, a right then recognized in Section 6, Article IV of the 1973 Constitution, in
connection with the rule that laws in order to be valid and enforceable must be
published in the Official Gazette or otherwise effectively promulgated. In ruling for the
petitioners' legal standing, the Court declared that the right they sought to be enforced
'is a public right recognized by no less than the fundamental law of the land.'

Legaspi v. Civil Service Commission, while reiterating Taada, further declared that
'when a mandamus proceeding involves the assertion of a public right, the
requirement of personal interest is satisfied by the mere fact that petitioner is a citizen
and, therefore, part of the general 'public' which possesses the right.'
Further, in Albano v. Reyes, we said that while expenditure of public funds may not
have been involved under the questioned contract for the development, management
and operation of the Manila International Container Terminal, 'public interest [was]
definitely involved considering the important role [of the subject contract] . . . in the
economic development of the country and the magnitude of the financial consideration
involved.' We concluded that, as a consequence, the disclosure provision in the
Constitution would constitute sufficient authority for upholding the petitioner's standing.
Similarly, the instant petition is anchored on the right of the people to information and
access to official records, documents and papers a right guaranteed under Section
7, Article III of the 1987 Constitution. Petitioner, a former solicitor general, is a Filipino
citizen. Because of the satisfaction of the two basic requisites laid down by decisional
law to sustain petitioner's legal standing, i.e. (1) the enforcement of a public right (2)
espoused by a Filipino citizen, we rule that the petition at bar should be allowed."
We rule that since the instant petition, brought by a citizen, involves the enforcement of
constitutional rights - to information and to the equitable diffusion of natural resources - matters
of transcendental public importance, the petitioner has the requisite locus standi.
Fifth issue: whether the constitutional right to information includes official information on
on-going negotiations before a final agreement.
Section 7, Article III of the Constitution explains the people's right to information on matters of
public concern in this manner:
"Sec. 7. The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents, and papers pertaining
to official acts, transactions, or decisions, as well as to government research data
used as basis for policy development, shall be afforded the citizen, subject to such
limitations as may be provided by law." (Emphasis supplied)
The State policy of full transparency in all transactions involving public interest reinforces the
people's right to information on matters of public concern. This State policy is expressed in
Section 28, Article II of the Constitution, thus:
"Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and
implements a policy of full public disclosure of all its transactions involving
public interest." (Emphasis supplied)
These twin provisions of the Constitution seek to promote transparency in policy-making and in
the operations of the government, as well as provide the people sufficient information to exercise
effectively other constitutional rights. These twin provisions are essential to the exercise of
freedom of expression. If the government does not disclose its official acts, transactions and
decisions to citizens, whatever citizens say, even if expressed without any restraint, will be
speculative and amount to nothing. These twin provisions are also essential to hold public
officials "at all times x x x accountable to the people,"29 for unless citizens have the proper
information, they cannot hold public officials accountable for anything. Armed with the right
information, citizens can participate in public discussions leading to the formulation of
government policies and their effective implementation. An informed citizenry is essential to the

existence and proper functioning of any democracy. As explained by the Court in Valmonte v.
Belmonte, Jr.30
"An essential element of these freedoms is to keep open a continuing dialogue or
process of communication between the government and the people. It is in the interest
of the State that the channels for free political discussion be maintained to the end
that the government may perceive and be responsive to the people's will. Yet, this
open dialogue can be effective only to the extent that the citizenry is informed and
thus able to formulate its will intelligently. Only when the participants in the discussion
are aware of the issues and have access to information relating thereto can such bear
fruit."
PEA asserts, citing Chavez v. PCGG,31 that in cases of on-going negotiations the right to
information is limited to "definite propositions of the government." PEA maintains the right does
not include access to "intra-agency or inter-agency recommendations or communications during
the stage when common assertions are still in the process of being formulated or are in the
'exploratory stage'."
Also, AMARI contends that petitioner cannot invoke the right at the pre-decisional stage or
before the closing of the transaction. To support its contention, AMARI cites the following
discussion in the 1986 Constitutional Commission:
"Mr. Suarez. And when we say 'transactions' which should be distinguished from
contracts, agreements, or treaties or whatever, does the Gentleman refer to the steps
leading to the consummation of the contract, or does he refer to the contract itself?
Mr. Ople: The 'transactions' used here, I suppose is generic and therefore, it can
cover both steps leading to a contract and already a consummated contract, Mr.
Presiding Officer.
Mr. Suarez: This contemplates inclusion of negotiations leading to the
consummation of the transaction.
Mr. Ople: Yes, subject only to reasonable safeguards on the national interest.
Mr. Suarez: Thank you."32 (Emphasis supplied)
AMARI argues there must first be a consummated contract before petitioner can invoke the
right. Requiring government officials to reveal their deliberations at the pre-decisional stage will
degrade the quality of decision-making in government agencies. Government officials will
hesitate to express their real sentiments during deliberations if there is immediate public
dissemination of their discussions, putting them under all kinds of pressure before they decide.
We must first distinguish between information the law on public bidding requires PEA to disclose
publicly, and information the constitutional right to information requires PEA to release to the
public. Before the consummation of the contract, PEA must, on its own and without demand
from anyone, disclose to the public matters relating to the disposition of its property. These
include the size, location, technical description and nature of the property being disposed of, the
terms and conditions of the disposition, the parties qualified to bid, the minimum price and
similar information. PEA must prepare all these data and disclose them to the public at the start
of the disposition process, long before the consummation of the contract, because the
Government Auditing Code requires public bidding. If PEA fails to make this disclosure, any
citizen can demand from PEA this information at any time during the bidding process.

Information, however, on on-going evaluation or review of bids or proposals being undertaken

by the bidding or review committee is not immediately accessible under the right to information.
While the evaluation or review is still on-going, there are no "official acts, transactions, or
decisions" on the bids or proposals. However, once the committee makes its official
recommendation, there arises a "definite proposition" on the part of the government. From
this moment, the public's right to information attaches, and any citizen can access all the nonproprietary information leading to such definite proposition. In Chavez v. PCGG,33 the Court
ruled as follows:
"Considering the intent of the framers of the Constitution, we believe that it is
incumbent upon the PCGG and its officers, as well as other government
representatives, to disclose sufficient public information on any proposed settlement
they have decided to take up with the ostensible owners and holders of ill-gotten
wealth. Such information, though, must pertain to definite propositions of the
government, not necessarily to intra-agency or inter-agency recommendations or
communications during the stage when common assertions are still in the process of
being formulated or are in the "exploratory" stage. There is need, of course, to
observe the same restrictions on disclosure of information in general, as discussed
earlier such as on matters involving national security, diplomatic or foreign relations,
intelligence and other classified information." (Emphasis supplied)
Contrary to AMARI's contention, the commissioners of the 1986 Constitutional Commission
understood that the right to information "contemplates inclusion of negotiations leading to
the consummation of the transaction." Certainly, a consummated contract is not a
requirement for the exercise of the right to information. Otherwise, the people can never
exercise the right if no contract is consummated, and if one is consummated, it may be too late
for the public to expose its defects.1wphi1.nt
Requiring a consummated contract will keep the public in the dark until the contract, which may
be grossly disadvantageous to the government or even illegal, becomes a fait accompli. This
negates the State policy of full transparency on matters of public concern, a situation which the
framers of the Constitution could not have intended. Such a requirement will prevent the
citizenry from participating in the public discussion of any proposedcontract, effectively
truncating a basic right enshrined in the Bill of Rights. We can allow neither an emasculation of a
constitutional right, nor a retreat by the State of its avowed "policy of full disclosure of all its
transactions involving public interest."
The right covers three categories of information which are "matters of public concern," namely:
(1) official records; (2) documents and papers pertaining to official acts, transactions and
decisions; and (3) government research data used in formulating policies. The first category
refers to any document that is part of the public records in the custody of government agencies
or officials. The second category refers to documents and papers recording, evidencing,
establishing, confirming, supporting, justifying or explaining official acts, transactions or
decisions of government agencies or officials. The third category refers to research data,
whether raw, collated or processed, owned by the government and used in formulating
government policies.
The information that petitioner may access on the renegotiation of the JVA includes evaluation
reports, recommendations, legal and expert opinions, minutes of meetings, terms of reference
and other documents attached to such reports or minutes, all relating to the JVA. However, the
right to information does not compel PEA to prepare lists, abstracts, summaries and the like
relating to the renegotiation of the JVA.34 The right only affords access to records, documents
and papers, which means the opportunity to inspect and copy them. One who exercises the right
must copy the records, documents and papers at his expense. The exercise of the right is also
subject to reasonable regulations to protect the integrity of the public records and to minimize

disruption to government operations, like rules specifying when and how to conduct the
inspection and copying.35
The right to information, however, does not extend to matters recognized as privileged
information under the separation of powers.36 The right does not also apply to information on
military and diplomatic secrets, information affecting national security, and information on
investigations of crimes by law enforcement agencies before the prosecution of the accused,
which courts have long recognized as confidential.37 The right may also be subject to other
limitations that Congress may impose by law.
There is no claim by PEA that the information demanded by petitioner is privileged information
rooted in the separation of powers. The information does not cover Presidential conversations,
correspondences, or discussions during closed-door Cabinet meetings which, like internal
deliberations of the Supreme Court and other collegiate courts, or executive sessions of either
house of Congress,38 are recognized as confidential. This kind of information cannot be pried
open by a co-equal branch of government. A frank exchange of exploratory ideas and
assessments, free from the glare of publicity and pressure by interested parties, is essential to
protect the independence of decision-making of those tasked to exercise Presidential,
Legislative and Judicial power.39This is not the situation in the instant case.
We rule, therefore, that the constitutional right to information includes official information on ongoing negotiations before a final contract. The information, however, must constitute definite
propositions by the government and should not cover recognized exceptions like privileged
information, military and diplomatic secrets and similar matters affecting national security and
public order.40 Congress has also prescribed other limitations on the right to information in
several legislations.41
Sixth issue: whether stipulations in the Amended JVA for the transfer to AMARI of lands,
reclaimed or to be reclaimed, violate the Constitution.
The Regalian Doctrine
The ownership of lands reclaimed from foreshore and submerged areas is rooted in the
Regalian doctrine which holds that the State owns all lands and waters of the public domain.
Upon the Spanish conquest of the Philippines, ownership of all "lands, territories and
possessions" in the Philippines passed to the Spanish Crown.42The King, as the sovereign ruler
and representative of the people, acquired and owned all lands and territories in the Philippines
except those he disposed of by grant or sale to private individuals.
The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting, however, the
State, in lieu of the King, as the owner of all lands and waters of the public domain. The
Regalian doctrine is the foundation of the time-honored principle of land ownership that "all lands
that were not acquired from the Government, either by purchase or by grant, belong to the public
domain."43 Article 339 of the Civil Code of 1889, which is now Article 420 of the Civil Code of
1950, incorporated the Regalian doctrine.
Ownership and Disposition of Reclaimed Lands
The Spanish Law of Waters of 1866 was the first statutory law governing the ownership and
disposition of reclaimed lands in the Philippines. On May 18, 1907, the Philippine Commission
enacted Act No. 1654 which provided for the lease, but not the sale, of reclaimed lands of
the government to corporations and individuals. Later, on November 29, 1919, the Philippine
Legislature approved Act No. 2874, the Public Land Act, which authorized the lease, but not
the sale, of reclaimed lands of the government to corporations and individuals. On

November 7, 1936, the National Assembly passed Commonwealth Act No. 141, also known as
the Public Land Act, which authorized the lease, but not the sale, of reclaimed lands of the
government to corporations and individuals. CA No. 141 continues to this day as the general
law governing the classification and disposition of lands of the public domain.
The Spanish Law of Waters of 1866 and the Civil Code of 1889
Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all waters within
the maritime zone of the Spanish territory belonged to the public domain for public use.44 The
Spanish Law of Waters of 1866 allowed the reclamation of the sea under Article 5, which
provided as follows:
"Article 5. Lands reclaimed from the sea in consequence of works constructed by the
State, or by the provinces, pueblos or private persons, with proper permission, shall
become the property of the party constructing such works, unless otherwise provided
by the terms of the grant of authority."
Under the Spanish Law of Waters, land reclaimed from the sea belonged to the party
undertaking the reclamation, provided the government issued the necessary permit and did not
reserve ownership of the reclaimed land to the State.
Article 339 of the Civil Code of 1889 defined property of public dominion as follows:
"Art. 339. Property of public dominion is
1. That devoted to public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, riverbanks, shores, roadsteads, and that of a similar
character;
2. That belonging exclusively to the State which, without being of general public use,
is employed in some public service, or in the development of the national wealth, such
as walls, fortresses, and other works for the defense of the territory, and mines, until
granted to private individuals."
Property devoted to public use referred to property open for use by the public. In contrast,
property devoted to public service referred to property used for some specific public service and
open only to those authorized to use the property.
Property of public dominion referred not only to property devoted to public use, but also to
property not so used but employed to develop the national wealth. This class of property
constituted property of public dominion although employed for some economic or commercial
activity to increase the national wealth.
Article 341 of the Civil Code of 1889 governed the re-classification of property of public dominion
into private property, to wit:
"Art. 341. Property of public dominion, when no longer devoted to public use or to the
defense of the territory, shall become a part of the private property of the State."

This provision, however, was not self-executing. The legislature, or the executive department
pursuant to law, must declare the property no longer needed for public use or territorial defense
before the government could lease or alienate the property to private parties.45

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

Agriculture and Natural Resources, shall from time to time classify the lands of
the public domain into

Act No. 1654 of the Philippine Commission

(a) Alienable or disposable,

On May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated the lease of
reclaimed and foreshore lands. The salient provisions of this law were as follows:

(b) Timber, and

(c) Mineral lands, x x x.

"Section 1. The control and disposition of the foreshore as defined in existing law,
and the title to all Government or public lands made or reclaimed by the
Government by dredging or filling or otherwise throughout the Philippine
Islands, shall be retained by the Government without prejudice to vested rights and
without prejudice to rights conceded to the City of Manila in the Luneta Extension.
Section 2. (a) The Secretary of the Interior shall cause all Government or public lands
made or reclaimed by the Government by dredging or filling or otherwise to be divided
into lots or blocks, with the necessary streets and alleyways located thereon, and shall
cause plats and plans of such surveys to be prepared and filed with the Bureau of
Lands.
(b) Upon completion of such plats and plans the Governor-General shall give notice
to the public that such parts of the lands so made or reclaimed as are not
needed for public purposes will be leased for commercial and business
purposes, x x x.

Sec. 7. For the purposes of the government and disposition of alienable or disposable
public lands, the Governor-General, upon recommendation by the Secretary of
Agriculture and Natural Resources, shall from time to time declare what lands
are open to disposition or concession under this Act."
Sec. 8. Only those lands shall be declared open to disposition or concession
which have been officially delimited or classified x x x.
xxx
Sec. 55. Any tract of land of the public domain which, being neither timber nor mineral
land, shall be classified as suitable for residential purposes or for commercial,
industrial, or other productive purposes other than agricultural purposes, and
shall be open to disposition or concession, shall be disposed of under the provisions
of this chapter, and not otherwise.

xxx
Sec. 56. The lands disposable under this title shall be classified as follows:
(e) The leases above provided for shall be disposed of to the highest and best
bidder therefore, subject to such regulations and safeguards as the GovernorGeneral may by executive order prescribe." (Emphasis supplied)

(a) Lands reclaimed by the Government by dredging, filling, or other

means;

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

(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores or
banks of navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
x x x.
Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six shall
be disposed of to private parties by lease only and not otherwise, as soon as the
Governor-General, upon recommendation by the Secretary of Agriculture and
Natural Resources, shall declare that the same are not necessary for the public
service and are open to disposition under this chapter. The lands included in
class (d) may be disposed of by sale or lease under the provisions of this Act."
(Emphasis supplied)
Section 6 of Act No. 2874 authorized the Governor-General to "classify lands of the public
domain into x x x alienable or disposable"47 lands. Section 7 of the Act empowered the

Governor-General to "declare what lands are open to disposition or concession." Section 8 of

the Act limited alienable or disposable lands only to those lands which have been "officially
delimited and classified."
Section 56 of Act No. 2874 stated that lands "disposable under this title48 shall be classified" as
government reclaimed, foreshore and marshy lands, as well as other lands. All these lands,
however, must be suitable for residential, commercial, industrial or other productive nonagricultural purposes. These provisions vested upon the Governor-General the power to
classify inalienable lands of the public domain into disposable lands of the public domain. These
provisions also empowered the Governor-General to classify further such disposable lands of
the public domain into government reclaimed, foreshore or marshy lands of the public domain,
as well as other non-agricultural lands.
Section 58 of Act No. 2874 categorically mandated that disposable lands of the public domain
classified as government reclaimed, foreshore and marshy lands "shall be disposed of to
private parties by lease only and not otherwise." The Governor-General, before allowing the
lease of these lands to private parties, must formally declare that the lands were "not necessary
for the public service." Act No. 2874 reiterated the State policy to lease and not to sell
government reclaimed, foreshore and marshy lands of the public domain, a policy first
enunciated in 1907 in Act No. 1654. Government reclaimed, foreshore and marshy lands
remained sui generis, as the only alienable or disposable lands of the public domain that the
government could not sell to private parties.
The rationale behind this State policy is obvious. Government reclaimed, foreshore and marshy
public lands for non-agricultural purposes retain their inherent potential as areas for public
service. This is the reason the government prohibited the sale, and only allowed the lease, of
these lands to private parties. The State always reserved these lands for some future public
service.
Act No. 2874 did not authorize the reclassification of government reclaimed, foreshore and
marshy lands into other non-agricultural lands under Section 56 (d). Lands falling under Section
56 (d) were the only lands for non-agricultural purposes the government could sell to private
parties. Thus, under Act No. 2874, the government could not sell government reclaimed,
foreshore and marshy lands to private parties, unless the legislature passed a law allowing
their sale.49
Act No. 2874 did not prohibit private parties from reclaiming parts of the sea pursuant to Section
5 of the Spanish Law of Waters of 1866. Lands reclaimed from the sea by private parties with
government permission remained private lands.

shall not be alienated, and no license, concession, or lease for the exploitation,
development, or utilization of any of the natural resources shall be granted for a period
exceeding twenty-five years, renewable for another twenty-five years, except as to
water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases beneficial use may be the measure and
limit of the grant." (Emphasis supplied)
The 1935 Constitution barred the alienation of all natural resources except public agricultural
lands, which were the only natural resources the State could alienate. Thus, foreshore lands,
considered part of the State's natural resources, became inalienable by constitutional fiat,
available only for lease for 25 years, renewable for another 25 years. The government could
alienate foreshore lands only after these lands were reclaimed and classified as alienable
agricultural lands of the public domain. Government reclaimed and marshy lands of the public
domain, being neither timber nor mineral lands, fell under the classification of public agricultural
lands.50 However, government reclaimed and marshy lands, although subject to classification as
disposable public agricultural lands, could only be leased and not sold to private parties because
of Act No. 2874.
The prohibition on private parties from acquiring ownership of government reclaimed and
marshy lands of the public domain was only a statutory prohibition and the legislature could
therefore remove such prohibition. The 1935 Constitution did not prohibit individuals and
corporations from acquiring government reclaimed and marshy lands of the public domain that
were classified as agricultural lands under existing public land laws. Section 2, Article XIII of the
1935 Constitution provided as follows:
"Section 2. No private corporation or association may acquire, lease, or hold
public agricultural lands in excess of one thousand and twenty four hectares,
nor may any individual acquire such lands by purchase in excess of one
hundred and forty hectares, or by lease in excess of one thousand and twentyfour hectares, or by homestead in excess of twenty-four hectares. Lands adapted to
grazing, not exceeding two thousand hectares, may be leased to an individual, private
corporation, or association." (Emphasis supplied)
Still, after the effectivity of the 1935 Constitution, the legislature did not repeal Section 58 of Act
No. 2874 to open for sale to private parties government reclaimed and marshy lands of the
public domain. On the contrary, the legislature continued the long established State policy of
retaining for the government title and ownership of government reclaimed and marshy lands of
the public domain.
Commonwealth Act No. 141 of the Philippine National Assembly

Dispositions under the 1935 Constitution

On May 14, 1935, the 1935 Constitution took effect upon its ratification by the Filipino people.
The 1935 Constitution, in adopting the Regalian doctrine, declared in Section 1, Article XIII, that

"Section 1. All agricultural, timber, and mineral lands of the public domain, waters,
minerals, coal, petroleum, and other mineral oils, all forces of potential energy and
other natural resources of the Philippines belong to the State, and their disposition,
exploitation, development, or utilization shall be limited to citizens of the Philippines or
to corporations or associations at least sixty per centum of the capital of which is
owned by such citizens, subject to any existing right, grant, lease, or concession at the
time of the inauguration of the Government established under this
Constitution. Natural resources, with the exception of public agricultural land,

On November 7, 1936, the National Assembly approved Commonwealth Act No. 141, also
known as the Public Land Act, which compiled the then existing laws on lands of the public
domain. CA No. 141, as amended, remains to this day the existing general law governing the
classification and disposition of lands of the public domain other than timber and mineral lands. 51
Section 6 of CA No. 141 empowers the President to classify lands of the public domain into
"alienable or disposable"52 lands of the public domain, which prior to such classification are
inalienable and outside the commerce of man. Section 7 of CA No. 141 authorizes the President
to "declare what lands are open to disposition or concession." Section 8 of CA No. 141 states
that the government can declare open for disposition or concession only lands that are "officially
delimited and classified." Sections 6, 7 and 8 of CA No. 141 read as follows:

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

and Commerce, shall from time to time classify the lands of the public domain
into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands,
and may at any time and in like manner transfer such lands from one class to
another,53 for the purpose of their administration and disposition.
Sec. 7. For the purposes of the administration and disposition of alienable or
disposable public lands, the President, upon recommendation by the Secretary of
Agriculture and Commerce, shall from time to time declare what lands are open
to disposition or concession under this Act.
Sec. 8. Only those lands shall be declared open to disposition or concession
which have been officially delimited and classified and, when practicable,
surveyed, and which have not been reserved for public or quasi-public uses, nor
appropriated by the Government, nor in any manner become private property, nor
those on which a private right authorized and recognized by this Act or any other valid
law may be claimed, or which, having been reserved or appropriated, have ceased to
be so. x x x."
Thus, before the government could alienate or dispose of lands of the public domain, the
President must first officially classify these lands as alienable or disposable, and then declare
them open to disposition or concession. There must be no law reserving these lands for public or
quasi-public uses.
The salient provisions of CA No. 141, on government reclaimed, foreshore and marshy lands of
the public domain, are as follows:
"Sec. 58. Any tract of land of the public domain which, being neither timber nor
mineral land, is intended to be used for residential purposes or for commercial,
industrial, or other productive purposes other than agricultural, and is open to
disposition or concession, shall be disposed of under the provisions of this
chapter and not otherwise.
Sec. 59. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the Government by dredging, filling, or other
means;

Sec. 60. Any tract of land comprised under this title may be leased or sold, as the
case may be, to any person, corporation, or association authorized to purchase or
lease public lands for agricultural purposes. x x x.
Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine
shall be disposed of to private parties by lease only and not otherwise, as soon
as the President, upon recommendation by the Secretary of Agriculture, shall
declare that the same are not necessary for the public service and are open to
disposition under this chapter. The lands included in class (d) may be disposed of
by sale or lease under the provisions of this Act." (Emphasis supplied)
Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution, Section 58 of
Act No. 2874 prohibiting the sale of government reclaimed, foreshore and marshy disposable
lands of the public domain. All these lands are intended for residential, commercial, industrial or
other non-agricultural purposes. As before, Section 61 allowed only the lease of such lands to
private parties. The government could sell to private parties only lands falling under Section 59
(d) of CA No. 141, or those lands for non-agricultural purposes not classified as government
reclaimed, foreshore and marshy disposable lands of the public domain. Foreshore lands,
however, became inalienable under the 1935 Constitution which only allowed the lease of these
lands to qualified private parties.
Section 58 of CA No. 141 expressly states that disposable lands of the public domain intended
for residential, commercial, industrial or other productive purposes other than agricultural "shall
be disposed of under the provisions of this chapter and not otherwise." Under Section 10
of CA No. 141, the term "disposition" includes lease of the land. Any disposition of government
reclaimed, foreshore and marshy disposable lands for non-agricultural purposes must comply
with Chapter IX, Title III of CA No. 141,54 unless a subsequent law amended or repealed these
provisions.
In his concurring opinion in the landmark case of Republic Real Estate Corporation v. Court
of Appeals,55Justice Reynato S. Puno summarized succinctly the law on this matter, as follows:
"Foreshore lands are lands of public dominion intended for public use. So too are
lands reclaimed by the government by dredging, filling, or other means. Act 1654
mandated that the control and disposition of the foreshore and lands under water
remained in the national government. Said law allowed only the 'leasing' of reclaimed
land. The Public Land Acts of 1919 and 1936 also declared that the foreshore and
lands reclaimed by the government were to be "disposed of to private parties by lease
only and not otherwise." Before leasing, however, the Governor-General, upon
recommendation of the Secretary of Agriculture and Natural Resources, had first to
determine that the land reclaimed was not necessary for the public service. This
requisite must have been met before the land could be disposed of. But even then,
the foreshore and lands under water were not to be alienated and sold to private
parties. The disposition of the reclaimed land was only by lease. The land
remained property of the State." (Emphasis supplied)
As observed by Justice Puno in his concurring opinion, "Commonwealth Act No. 141 has
remained in effect at present."

(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores or
banks of navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.

The State policy prohibiting the sale to private parties of government reclaimed, foreshore and
marshy alienable lands of the public domain, first implemented in 1907 was thus reaffirmed in
CA No. 141 after the 1935 Constitution took effect. The prohibition on the sale of foreshore
lands, however, became a constitutional edict under the 1935 Constitution. Foreshore lands
became inalienable as natural resources of the State, unless reclaimed by the government and

classified as agricultural lands of the public domain, in which case they would fall under the
classification of government reclaimed lands.
After the effectivity of the 1935 Constitution, government reclaimed and marshy disposable lands
of the public domain continued to be only leased and not sold to private parties.56 These lands
remained sui generis, as the only alienable or disposable lands of the public domain the
government could not sell to private parties.
Since then and until now, the only way the government can sell to private parties government
reclaimed and marshy disposable lands of the public domain is for the legislature to pass a law
authorizing such sale. CA No. 141 does not authorize the President to reclassify government
reclaimed and marshy lands into other non-agricultural lands under Section 59 (d). Lands
classified under Section 59 (d) are the only alienable or disposable lands for non-agricultural
purposes that the government could sell to private parties.
Moreover, Section 60 of CA No. 141 expressly requires congressional authority before lands
under Section 59 that the government previously transferred to government units or entities
could be sold to private parties. Section 60 of CA No. 141 declares that
"Sec. 60. x x x The area so leased or sold shall be such as shall, in the judgment of
the Secretary of Agriculture and Natural Resources, be reasonably necessary for the
purposes for which such sale or lease is requested, and shall not exceed one hundred
and forty-four hectares: Provided, however, That this limitation shall not apply to
grants, donations, or transfers made to a province, municipality or branch or
subdivision of the Government for the purposes deemed by said entities conducive to
the public interest;but the land so granted, donated, or transferred to a province,
municipality or branch or subdivision of the Government shall not be alienated,
encumbered, or otherwise disposed of in a manner affecting its title, except
when authorized by Congress: x x x." (Emphasis supplied)

Sec. 67. The lease or sale shall be made by oral bidding; and adjudication shall
be made to the highest bidder. x x x." (Emphasis supplied)
Thus, CA No. 141 mandates the Government to put to public auction all leases or sales of
alienable or disposable lands of the public domain.58
Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal Section 5 of the
Spanish Law of Waters of 1866. Private parties could still reclaim portions of the sea with
government permission. However, thereclaimed land could become private land only if
classified as alienable agricultural land of the public domain open to disposition under CA
No. 141. The 1935 Constitution prohibited the alienation of all natural resources except public
agricultural lands.
The Civil Code of 1950
The Civil Code of 1950 readopted substantially the definition of property of public dominion
found in the Civil Code of 1889. Articles 420 and 422 of the Civil Code of 1950 state that
"Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads, and others of similar
character;
(2) Those which belong to the State, without being for public use, and are intended for
some public service or for the development of the national wealth.
x x x.

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

Art. 422. Property of public dominion, when no longer intended for public use or for
public service, shall form part of the patrimonial property of the State."
Again, the government must formally declare that the property of public dominion is no longer
needed for public use or public service, before the same could be classified as patrimonial
property of the State.59 In the case of government reclaimed and marshy lands of the public
domain, the declaration of their being disposable, as well as the manner of their disposition, is
governed by the applicable provisions of CA No. 141.
Like the Civil Code of 1889, the Civil Code of 1950 included as property of public dominion those
properties of the State which, without being for public use, are intended for public service or the
"development of the national wealth." Thus, government reclaimed and marshy lands of the
State, even if not employed for public use or public service, if developed to enhance the national
wealth, are classified as property of public dominion.
Dispositions under the 1973 Constitution
The 1973 Constitution, which took effect on January 17, 1973, likewise adopted the Regalian
doctrine. Section 8, Article XIV of the 1973 Constitution stated that
"Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other
mineral oils, all forces of potential energy, fisheries, wildlife, and other natural

resources of the Philippines belong to the State. With the exception of agricultural,
industrial or commercial, residential, and resettlement lands of the public
domain, natural resources shall not be alienated, and no license, concession, or
lease for the exploration, development, exploitation, or utilization of any of the natural
resources shall be granted for a period exceeding twenty-five years, renewable for not
more than twenty-five years, except as to water rights for irrigation, water supply,
fisheries, or industrial uses other than the development of water power, in which
cases, beneficial use may be the measure and the limit of the grant." (Emphasis
supplied)
The 1973 Constitution prohibited the alienation of all natural resources with the exception of
"agricultural, industrial or commercial, residential, and resettlement lands of the public domain."
In contrast, the 1935 Constitution barred the alienation of all natural resources except "public
agricultural lands." However, the term "public agricultural lands" in the 1935 Constitution
encompassed industrial, commercial, residential and resettlement lands of the public domain.60 If
the land of public domain were neither timber nor mineral land, it would fall under the
classification of agricultural land of the public domain. Both the 1935 and 1973 Constitutions,
therefore, prohibited the alienation of all natural resources except agricultural lands of
the public domain.
The 1973 Constitution, however, limited the alienation of lands of the public domain to
individuals who were citizens of the Philippines. Private corporations, even if wholly owned by
Philippine citizens, were no longer allowed to acquire alienable lands of the public domain unlike
in the 1935 Constitution. Section 11, Article XIV of the 1973 Constitution declared that
"Sec. 11. The Batasang Pambansa, taking into account conservation, ecological, and
development requirements of the natural resources, shall determine by law the size of
land of the public domain which may be developed, held or acquired by, or leased to,
any qualified individual, corporation, or association, and the conditions therefor. No
private corporation or association may hold alienable lands of the public
domain except by lease not to exceed one thousand hectares in area nor may any
citizen hold such lands by lease in excess of five hundred hectares or acquire by
purchase, homestead or grant, in excess of twenty-four hectares. No private
corporation or association may hold by lease, concession, license or permit, timber or
forest lands and other timber or forest resources in excess of one hundred thousand
hectares. However, such area may be increased by the Batasang Pambansa upon
recommendation of the National Economic and Development Authority." (Emphasis
supplied)

(a) To reclaim land, including foreshore and submerged areas, by dredging,

filling or other means, or to acquire reclaimed land;
(b) To develop, improve, acquire, administer, deal in, subdivide, dispose, lease and
sell any and all kinds of lands, buildings, estates and other forms of real property,
owned, managed, controlled and/or operated by the government;
(c) To provide for, operate or administer such service as may be necessary for the
efficient, economical and beneficial utilization of the above properties.
Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying out the
purposes for which it is created, have the following powers and functions:
(a)To prescribe its by-laws.
xxx
(i) To hold lands of the public domain in excess of the area permitted to private
corporations by statute.
(j) To reclaim lands and to construct work across, or otherwise, any stream,
watercourse, canal, ditch, flume x x x.
xxx
(o) To perform such acts and exercise such functions as may be necessary for the
attainment of the purposes and objectives herein specified." (Emphasis supplied)
PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public
domain. Foreshore areas are those covered and uncovered by the ebb and flow of the
tide.61 Submerged areas are those permanently under water regardless of the ebb and flow of
the tide.62 Foreshore and submerged areas indisputably belong to the public domain63 and are
inalienable unless reclaimed, classified as alienable lands open to disposition, and further
declared no longer needed for public service.

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

The ban in the 1973 Constitution on private corporations from acquiring alienable lands of the
public domain did not apply to PEA since it was then, and until today, a fully owned government
corporation. The constitutional ban applied then, as it still applies now, only to "private
corporations and associations." PD No. 1084 expressly empowers PEA "to hold lands of the
public domain" even "in excess of the area permitted to private corporations by statute." Thus,
PEA can hold title to private lands, as well as title to lands of the public domain.

PD No. 1084 Creating the Public Estates Authority

In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the public
domain, there must be legislative authority empowering PEA to sell these lands. This legislative
authority is necessary in view of Section 60 of CA No.141, which states

On February 4, 1977, then President Ferdinand Marcos issued Presidential Decree No. 1084
creating PEA, a wholly government owned and controlled corporation with a special charter.
Sections 4 and 8 of PD No. 1084, vests PEA with the following purposes and powers:
"Sec. 4. Purpose. The Authority is hereby created for the following purposes:

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

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

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

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

Dispositions under the 1987 Constitution

MR. VILLEGAS: I think that is the spirit of the provision.
The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted the Regalian
doctrine. The 1987 Constitution declares that all natural resources are "owned by the State,"
and except for alienable agricultural lands of the public domain, natural resources cannot be
alienated. Sections 2 and 3, Article XII of the 1987 Constitution state that
"Section 2. All lands of the public domain, waters, minerals, coal, petroleum and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and
fauna, and other natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated. The
exploration, development, and utilization of natural resources shall be under the full
control and supervision of the State. x x x.
Section 3. Lands of the public domain are classified into agricultural, forest or timber,
mineral lands, and national parks. Agricultural lands of the public domain may be
further classified by law according to the uses which they may be devoted. Alienable
lands of the public domain shall be limited to agricultural lands. Private
corporations or associations may not hold such alienable lands of the public
domain except by lease, for a period not exceeding twenty-five years, renewable
for not more than twenty-five years, and not to exceed one thousand hectares in
area. Citizens of the Philippines may lease not more than five hundred hectares, or
acquire not more than twelve hectares thereof by purchase, homestead, or grant.
Taking into account the requirements of conservation, ecology, and development, and
subject to the requirements of agrarian reform, the Congress shall determine, by law,
the size of lands of the public domain which may be acquired, developed, held, or
leased and the conditions therefor." (Emphasis supplied)
The 1987 Constitution continues the State policy in the 1973 Constitution banning private
corporations fromacquiring any kind of alienable land of the public domain. Like the 1973
Constitution, the 1987 Constitution allows private corporations to hold alienable lands of the
public domain only through lease. As in the 1935 and 1973 Constitutions, the general law
governing the lease to private corporations of reclaimed, foreshore and marshy alienable lands
of the public domain is still CA No. 141.
The Rationale behind the Constitutional Ban
The rationale behind the constitutional ban on corporations from acquiring, except through
lease, alienable lands of the public domain is not well understood. During the deliberations of the
1986 Constitutional Commission, the commissioners probed the rationale behind this ban, thus:
"FR. BERNAS: Mr. Vice-President, my questions have reference to page 3, line 5
which says:
`No private corporation or association may hold alienable lands of the public domain
except by lease, not to exceed one thousand hectares in area.'

FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were instances
where the Iglesia ni Cristo was not allowed to acquire a mere 313-square meter land
where a chapel stood because the Supreme Court said it would be in violation of this."
(Emphasis supplied)
In Ayog v. Cusi,64 the Court explained the rationale behind this constitutional ban in this way:
"Indeed, one purpose of the constitutional prohibition against purchases of public
agricultural lands by private corporations is to equitably diffuse land ownership or to
encourage 'owner-cultivatorship and the economic family-size farm' and to prevent a
recurrence of cases like the instant case. Huge landholdings by corporations or
private persons had spawned social unrest."
However, if the constitutional intent is to prevent huge landholdings, the Constitution could have
simply limited the size of alienable lands of the public domain that corporations could acquire.
The Constitution could have followed the limitations on individuals, who could acquire not more
than 24 hectares of alienable lands of the public domain under the 1973 Constitution, and not
more than 12 hectares under the 1987 Constitution.
If the constitutional intent is to encourage economic family-size farms, placing the land in the
name of a corporation would be more effective in preventing the break-up of farmlands. If the
farmland is registered in the name of a corporation, upon the death of the owner, his heirs would
inherit shares in the corporation instead of subdivided parcels of the farmland. This would
prevent the continuing break-up of farmlands into smaller and smaller plots from one generation
to the next.
In actual practice, the constitutional ban strengthens the constitutional limitation on individuals
from acquiring more than the allowed area of alienable lands of the public domain. Without the
constitutional ban, individuals who already acquired the maximum area of alienable lands of the
public domain could easily set up corporations to acquire more alienable public lands. An
individual could own as many corporations as his means would allow him. An individual could
even hide his ownership of a corporation by putting his nominees as stockholders of the
corporation. The corporation is a convenient vehicle to circumvent the constitutional limitation on
acquisition by individuals of alienable lands of the public domain.
The constitutional intent, under the 1973 and 1987 Constitutions, is to transfer ownership of only
a limited area of alienable land of the public domain to a qualified individual. This constitutional
intent is safeguarded by the provision prohibiting corporations from acquiring alienable lands of
the public domain, since the vehicle to circumvent the constitutional intent is removed. The
available alienable public lands are gradually decreasing in the face of an ever-growing
population. The most effective way to insure faithful adherence to this constitutional intent is to
grant or sell alienable lands of the public domain only to individuals. This, it would seem, is the
practical benefit arising from the constitutional ban.
The Amended Joint Venture Agreement

The subject matter of the Amended JVA, as stated in its second Whereas clause, consists of
three properties, namely:
1. "[T]hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo
Boulevard in Paranaque and Las Pinas, Metro Manila, with a combined titled area of
1,578,441 square meters;"
2. "[A]nother area of 2,421,559 square meters contiguous to the three islands;" and
3. "[A]t AMARI's option as approved by PEA, an additional 350 hectares more or less
to regularize the configuration of the reclaimed area."65
PEA confirms that the Amended JVA involves "the development of the Freedom Islands and
further reclamation of about 250 hectares x x x," plus an option "granted to AMARI to
subsequently reclaim another 350 hectares x x x."66
In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of
the 750-hectare reclamation project have been reclaimed, and the rest of the 592.15
hectares are still submerged areas forming part of Manila Bay.
Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00 for PEA's
"actual cost" in partially reclaiming the Freedom Islands. AMARI will also complete, at its own
expense, the reclamation of the Freedom Islands. AMARI will further shoulder all the reclamation
costs of all the other areas, totaling 592.15 hectares, still to be reclaimed. AMARI and PEA will
share, in the proportion of 70 percent and 30 percent, respectively, the total net usable area
which is defined in the Amended JVA as the total reclaimed area less 30 percent earmarked for
common areas. Title to AMARI's share in the net usable area, totaling 367.5 hectares, will be
issued in the name of AMARI. Section 5.2 (c) of the Amended JVA provides that
"x x x, PEA shall have the duty to execute without delay the necessary deed of
transfer or conveyance of the title pertaining to AMARI's Land share based on the
Land Allocation Plan. PEA, when requested in writing by AMARI, shall then cause
the issuance and delivery of the proper certificates of title covering AMARI's
Land Share in the name of AMARI, x x x; provided, that if more than seventy percent
(70%) of the titled area at any given time pertains to AMARI, PEA shall deliver to
AMARI only seventy percent (70%) of the titles pertaining to AMARI, until such time
when a corresponding proportionate area of additional land pertaining to PEA has
been titled." (Emphasis supplied)
Indisputably, under the Amended JVA AMARI will acquire and own a maximum of 367.5
hectares of reclaimed land which will be titled in its name.
To implement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI joint venture
PEA's statutory authority, rights and privileges to reclaim foreshore and submerged areas in
Manila Bay. Section 3.2.a of the Amended JVA states that
"PEA hereby contributes to the joint venture its rights and privileges to perform
Rawland Reclamation and Horizontal Development as well as own the Reclamation
Area, thereby granting the Joint Venture the full and exclusive right, authority and
privilege to undertake the Project in accordance with the Master Development Plan."

The Amended JVA is the product of a renegotiation of the original JVA dated April 25, 1995 and
its supplemental agreement dated August 9, 1995.
The Threshold Issue
The threshold issue is whether AMARI, a private corporation, can acquire and own under the
Amended JVA 367.5 hectares of reclaimed foreshore and submerged areas in Manila Bay in
view of Sections 2 and 3, Article XII of the 1987 Constitution which state that:
"Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and
fauna, and other natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated. x x x.
xxx
Section 3. x x x Alienable lands of the public domain shall be limited to agricultural
lands. Private corporations or associations may not hold such alienable lands of
the public domain except by lease, x x x."(Emphasis supplied)
Classification of Reclaimed Foreshore and Submerged Areas
PEA readily concedes that lands reclaimed from foreshore or submerged areas of Manila Bay
are alienable or disposable lands of the public domain. In its Memorandum,67 PEA admits that
"Under the Public Land Act (CA 141, as amended), reclaimed lands are classified
as alienable and disposable lands of the public domain:
'Sec. 59. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the government by dredging, filling, or other means;
x x x.'" (Emphasis supplied)
Likewise, the Legal Task Force68 constituted under Presidential Administrative Order No. 365
admitted in its Report and Recommendation to then President Fidel V. Ramos, "[R]eclaimed
lands are classified as alienable and disposable lands of the public domain."69 The Legal
Task Force concluded that
"D. Conclusion
Reclaimed lands are lands of the public domain. However, by statutory authority, the
rights of ownership and disposition over reclaimed lands have been transferred to
PEA, by virtue of which PEA, as owner, may validly convey the same to any qualified
person without violating the Constitution or any statute.
The constitutional provision prohibiting private corporations from holding public land,
except by lease (Sec. 3, Art. XVII,70 1987 Constitution), does not apply to reclaimed
lands whose ownership has passed on to PEA by statutory grant."

Under Section 2, Article XII of the 1987 Constitution, the foreshore and submerged areas of
Manila Bay are part of the "lands of the public domain, waters x x x and other natural resources"
and consequently "owned by the State." As such, foreshore and submerged areas "shall not be
alienated," unless they are classified as "agricultural lands" of the public domain. The mere
reclamation of these areas by PEA does not convert these inalienable natural resources of the
State into alienable or disposable lands of the public domain. There must be a law or
presidential proclamation officially classifying these reclaimed lands as alienable or disposable
and open to disposition or concession. Moreover, these reclaimed lands cannot be classified as
alienable or disposable if the law has reserved them for some public or quasi-public use. 71
Section 8 of CA No. 141 provides that "only those lands shall be declared open to disposition or
concession which have been officially delimited and classified."72 The President has the
authority to classify inalienable lands of the public domain into alienable or disposable lands of
the public domain, pursuant to Section 6 of CA No. 141. In Laurel vs. Garcia,73 the Executive
Department attempted to sell the Roppongi property in Tokyo, Japan, which was acquired by the
Philippine Government for use as the Chancery of the Philippine Embassy. Although the
Chancery had transferred to another location thirteen years earlier, the Court still ruled that,
under Article 42274of the Civil Code, a property of public dominion retains such character until
formally declared otherwise. The Court ruled that
"The fact that the Roppongi site has not been used for a long time for actual Embassy
service does not automatically convert it to patrimonial property. Any such conversion
happens only if the property is withdrawn from public use (Cebu Oxygen and
Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]. A property continues to be part of
the public domain, not available for private appropriation or ownership 'until
there is a formal declaration on the part of the government to withdraw it from
being such'(Ignacio v. Director of Lands, 108 Phil. 335 [1960]." (Emphasis supplied)
PD No. 1085, issued on February 4, 1977, authorized the issuance of special land patents for
lands reclaimed by PEA from the foreshore or submerged areas of Manila Bay. On January 19,
1988 then President Corazon C. Aquino issued Special Patent No. 3517 in the name of PEA for
the 157.84 hectares comprising the partially reclaimed Freedom Islands. Subsequently, on April
9, 1999 the Register of Deeds of the Municipality of Paranaque issued TCT Nos. 7309, 7311 and
7312 in the name of PEA pursuant to Section 103 of PD No. 1529 authorizing the issuance of
certificates of title corresponding to land patents. To this day, these certificates of title are still in
the name of PEA.
PD No. 1085, coupled with President Aquino's actual issuance of a special patent covering the
Freedom Islands, is equivalent to an official proclamation classifying the Freedom Islands as
alienable or disposable lands of the public domain. PD No. 1085 and President Aquino's
issuance of a land patent also constitute a declaration that the Freedom Islands are no longer
needed for public service. The Freedom Islands are thus alienable or disposable lands of
the public domain, open to disposition or concession to qualified parties.

AMARI claims that the Freedom Islands are private lands because CDCP, then a private
corporation, reclaimed the islands under a contract dated November 20, 1973 with the
Commissioner of Public Highways. AMARI, citing Article 5 of the Spanish Law of Waters of 1866,
argues that "if the ownership of reclaimed lands may be given to the party constructing the
works, then it cannot be said that reclaimed lands are lands of the public domain which the State
may not alienate."75 Article 5 of the Spanish Law of Waters reads as follows:
"Article 5. Lands reclaimed from the sea in consequence of works constructed by the
State, or by the provinces, pueblos or private persons, with proper permission, shall
become the property of the party constructing such works, unless otherwise
provided by the terms of the grant of authority." (Emphasis supplied)
Under Article 5 of the Spanish Law of Waters of 1866, private parties could reclaim from the sea
only with "proper permission" from the State. Private parties could own the reclaimed land only if
not "otherwise provided by the terms of the grant of authority." This clearly meant that no one
could reclaim from the sea without permission from the State because the sea is property of
public dominion. It also meant that the State could grant or withhold ownership of the reclaimed
land because any reclaimed land, like the sea from which it emerged, belonged to the State.
Thus, a private person reclaiming from the sea without permission from the State could not
acquire ownership of the reclaimed land which would remain property of public dominion like the
sea it replaced.76 Article 5 of the Spanish Law of Waters of 1866 adopted the time-honored
principle of land ownership that "all lands that were not acquired from the government, either by
purchase or by grant, belong to the public domain."77
Article 5 of the Spanish Law of Waters must be read together with laws subsequently enacted on
the disposition of public lands. In particular, CA No. 141 requires that lands of the public domain
must first be classified as alienable or disposable before the government can alienate them.
These lands must not be reserved for public or quasi-public purposes.78 Moreover, the contract
between CDCP and the government was executed after the effectivity of the 1973 Constitution
which barred private corporations from acquiring any kind of alienable land of the public domain.
This contract could not have converted the Freedom Islands into private lands of a private
corporation.
Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws authorizing the
reclamation of areas under water and revested solely in the National Government the power to
reclaim lands. Section 1 of PD No. 3-A declared that
"The provisions of any law to the contrary notwithstanding, the reclamation of
areas under water, whether foreshore or inland, shall be limited to the National
Government or any person authorized by it under a proper contract. (Emphasis
supplied)
x x x."

At the time then President Aquino issued Special Patent No. 3517, PEA had already reclaimed
the Freedom Islands although subsequently there were partial erosions on some areas. The
government had also completed the necessary surveys on these islands. Thus, the Freedom
Islands were no longer part of Manila Bay but part of the land mass. Section 3, Article XII of the
1987 Constitution classifies lands of the public domain into "agricultural, forest or timber, mineral
lands, and national parks." Being neither timber, mineral, nor national park lands, the reclaimed
Freedom Islands necessarily fall under the classification of agricultural lands of the public
domain. Under the 1987 Constitution, agricultural lands of the public domain are the only natural
resources that the State may alienate to qualified private parties. All other natural resources,
such as the seas or bays, are "waters x x x owned by the State" forming part of the public
domain, and are inalienable pursuant to Section 2, Article XII of the 1987 Constitution.

PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because reclamation of
areas under water could now be undertaken only by the National Government or by a person
contracted by the National Government. Private parties may reclaim from the sea only under a
contract with the National Government, and no longer by grant or permission as provided in
Section 5 of the Spanish Law of Waters of 1866.
Executive Order No. 525, issued on February 14, 1979, designated PEA as the National
Government's implementing arm to undertake "all reclamation projects of the government,"
which "shall be undertaken by the PEA or through a proper contract executed by it with
any person or entity." Under such contract, a private party receives compensation for

reclamation services rendered to PEA. Payment to the contractor may be in cash, or in kind
consisting of portions of the reclaimed land, subject to the constitutional ban on private
corporations from acquiring alienable lands of the public domain. The reclaimed land can be
used as payment in kind only if the reclaimed land is first classified as alienable or disposable
land open to disposition, and then declared no longer needed for public service.
The Amended JVA covers not only the Freedom Islands, but also an additional 592.15 hectares
which are still submerged and forming part of Manila Bay. There is no legislative or
Presidential act classifying these submerged areas as alienable or disposable lands of
the public domain open to disposition. These submerged areas are not covered by any
patent or certificate of title. There can be no dispute that these submerged areas form part of the
public domain, and in their present state are inalienable and outside the commerce of man.
Until reclaimed from the sea, these submerged areas are, under the Constitution, "waters x x x
owned by the State," forming part of the public domain and consequently inalienable. Only when
actually reclaimed from the sea can these submerged areas be classified as public agricultural
lands, which under the Constitution are the only natural resources that the State may alienate.
Once reclaimed and transformed into public agricultural lands, the government may then
officially classify these lands as alienable or disposable lands open to disposition. Thereafter, the
government may declare these lands no longer needed for public service. Only then can these
reclaimed lands be considered alienable or disposable lands of the public domain and within the
commerce of man.
The classification of PEA's reclaimed foreshore and submerged lands into alienable or
disposable lands open to disposition is necessary because PEA is tasked under its charter to
undertake public services that require the use of lands of the public domain. Under Section 5 of
PD No. 1084, the functions of PEA include the following: "[T]o own or operate railroads,
tramways and other kinds of land transportation, x x x; [T]o construct, maintain and operate such
systems of sanitary sewers as may be necessary; [T]o construct, maintain and operate such
storm drains as may be necessary." PEA is empowered to issue "rules and regulations as may
be necessary for the proper use by private parties of any or all of the highways, roads,
utilities, buildings and/or any of its properties and to impose or collect fees or tolls for their
use." Thus, part of the reclaimed foreshore and submerged lands held by the PEA would
actually be needed for public use or service since many of the functions imposed on PEA by its
charter constitute essential public services.
Moreover, Section 1 of Executive Order No. 525 provides that PEA "shall be primarily
responsible for integrating, directing, and coordinating all reclamation projects for and on behalf
of the National Government." The same section also states that "[A]ll reclamation projects shall
be approved by the President upon recommendation of the PEA, and shall be undertaken by the
PEA or through a proper contract executed by it with any person or entity; x x x." Thus, under
EO No. 525, in relation to PD No. 3-A and PD No.1084, PEA became the primary implementing
agency of the National Government to reclaim foreshore and submerged lands of the public
domain. EO No. 525 recognized PEA as the government entity "to undertake the reclamation of
lands and ensure their maximum utilization in promoting public welfare and interests."79 Since
large portions of these reclaimed lands would obviously be needed for public service, there must
be a formal declaration segregating reclaimed lands no longer needed for public service from
those still needed for public service.1wphi1.nt
Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA "shall belong to or be
owned by the PEA," could not automatically operate to classify inalienable lands into alienable or
disposable lands of the public domain. Otherwise, reclaimed foreshore and submerged lands of
the public domain would automatically become alienable once reclaimed by PEA, whether or not
classified as alienable or disposable.

The Revised Administrative Code of 1987, a later law than either PD No. 1084 or EO No. 525,
vests in the Department of Environment and Natural Resources ("DENR" for brevity) the
following powers and functions:
"Sec. 4. Powers and Functions. The Department shall:
(1) x x x
xxx
(4) Exercise supervision and control over forest lands, alienable and disposable
public lands, mineral resources and, in the process of exercising such control,
impose appropriate taxes, fees, charges, rentals and any such form of levy and collect
such revenues for the exploration, development, utilization or gathering of such
resources;
xxx
(14) Promulgate rules, regulations and guidelines on the issuance of licenses,
permits, concessions, lease agreements and such other privileges concerning
the development, exploration and utilization of the country's marine, freshwater,
and brackish water and over all aquatic resources of the country and shall
continue to oversee, supervise and police our natural resources; cancel or cause
to cancel such privileges upon failure, non-compliance or violations of any regulation,
order, and for all other causes which are in furtherance of the conservation of natural
resources and supportive of the national interest;
(15) Exercise exclusive jurisdiction on the management and disposition of all
lands of the public domain and serve as the sole agency responsible for
classification, sub-classification, surveying and titling of lands in consultation with
appropriate agencies."80 (Emphasis supplied)
As manager, conservator and overseer of the natural resources of the State, DENR exercises
"supervision and control over alienable and disposable public lands." DENR also exercises
"exclusive jurisdiction on the management and disposition of all lands of the public domain."
Thus, DENR decides whether areas under water, like foreshore or submerged areas of Manila
Bay, should be reclaimed or not. This means that PEA needs authorization from DENR before
PEA can undertake reclamation projects in Manila Bay, or in any part of the country.
DENR also exercises exclusive jurisdiction over the disposition of all lands of the public domain.
Hence, DENR decides whether reclaimed lands of PEA should be classified as alienable under
Sections 681 and 782 of CA No. 141. Once DENR decides that the reclaimed lands should be so
classified, it then recommends to the President the issuance of a proclamation classifying the
lands as alienable or disposable lands of the public domain open to disposition. We note that
then DENR Secretary Fulgencio S. Factoran, Jr. countersigned Special Patent No. 3517 in
compliance with the Revised Administrative Code and Sections 6 and 7 of CA No. 141.
In short, DENR is vested with the power to authorize the reclamation of areas under water, while
PEA is vested with the power to undertake the physical reclamation of areas under water,
whether directly or through private contractors. DENR is also empowered to classify lands of the
public domain into alienable or disposable lands subject to the approval of the President. On the
other hand, PEA is tasked to develop, sell or lease the reclaimed alienable lands of the public
domain.

Clearly, the mere physical act of reclamation by PEA of foreshore or submerged areas does not
make the reclaimed lands alienable or disposable lands of the public domain, much less
patrimonial lands of PEA. Likewise, the mere transfer by the National Government of lands of
the public domain to PEA does not make the lands alienable or disposable lands of the public
domain, much less patrimonial lands of PEA.
Absent two official acts a classification that these lands are alienable or disposable and open
to disposition and a declaration that these lands are not needed for public service, lands
reclaimed by PEA remain inalienable lands of the public domain. Only such an official
classification and formal declaration can convert reclaimed lands into alienable or disposable
lands of the public domain, open to disposition under the Constitution, Title I and Title III83of CA
No. 141 and other applicable laws.84
PEA's Authority to Sell Reclaimed Lands
PEA, like the Legal Task Force, argues that as alienable or disposable lands of the public
domain, the reclaimed lands shall be disposed of in accordance with CA No. 141, the Public
Land Act. PEA, citing Section 60 of CA No. 141, admits that reclaimed lands transferred to a
branch or subdivision of the government "shall not be alienated, encumbered, or otherwise
disposed of in a manner affecting its title, except when authorized by Congress: x x
x."85 (Emphasis by PEA)

from, or incident to, the aforesaid contract between the Republic of the Philippines and
the Construction and Development Corporation of the Philippines.
In consideration of the foregoing transfer and assignment, the Public Estates Authority
shall issue in favor of the Republic of the Philippines the corresponding shares of
stock in said entity with an issued value of said shares of stock (which) shall be
deemed fully paid and non-assessable.
The Secretary of Public Highways and the General Manager of the Public Estates
Authority shall execute such contracts or agreements, including appropriate
agreements with the Construction and Development Corporation of the Philippines, as
may be necessary to implement the above.
Special land patent/patents shall be issued by the Secretary of Natural
Resources in favor of the Public Estates Authority without prejudice to the
subsequent transfer to the contractor or his assignees of such portion or
portions of the land reclaimed or to be reclaimed as provided for in the abovementioned contract. On the basis of such patents, the Land Registration
Commission shall issue the corresponding certificate of title." (Emphasis
supplied)
On the other hand, Section 3 of EO No. 525, issued on February 14, 1979, provides that -

In Laurel vs. Garcia,86 the Court cited Section 48 of the Revised Administrative Code of 1987,
which states that
"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the
Government is authorized by law to be conveyed, the deed of conveyance shall be
executed in behalf of the government by the following: x x x."
Thus, the Court concluded that a law is needed to convey any real property belonging to the
Government. The Court declared that "It is not for the President to convey real property of the government on his or her own
sole will. Any such conveyance must be authorized and approved by a law
enacted by the Congress. It requires executive and legislative concurrence."
(Emphasis supplied)
PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority allowing
PEA to sell its reclaimed lands. PD No. 1085, issued on February 4, 1977, provides that
"The land reclaimed in the foreshore and offshore area of Manila Bay pursuant to
the contract for the reclamation and construction of the Manila-Cavite Coastal Road
Project between the Republic of the Philippines and the Construction and
Development Corporation of the Philippines dated November 20, 1973 and/or any
other contract or reclamation covering the same area is hereby transferred,
conveyed and assigned to the ownership and administration of the Public
Estates Authority established pursuant to PD No. 1084; Provided, however, That the
rights and interests of the Construction and Development Corporation of the
Philippines pursuant to the aforesaid contract shall be recognized and respected.
Henceforth, the Public Estates Authority shall exercise the rights and assume the
obligations of the Republic of the Philippines (Department of Public Highways) arising

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

PEA which shall be responsible for its administration, development, utilization or
disposition in accordance with the provisions of Presidential Decree No. 1084. Any
and all income that the PEA may derive from the sale, lease or use of reclaimed lands
shall be used in accordance with the provisions of Presidential Decree No. 1084."
There is no express authority under either PD No. 1085 or EO No. 525 for PEA to sell its
reclaimed lands. PD No. 1085 merely transferred "ownership and administration" of lands
reclaimed from Manila Bay to PEA, while EO No. 525 declared that lands reclaimed by PEA
"shall belong to or be owned by PEA." EO No. 525 expressly states that PEA should dispose of
its reclaimed lands "in accordance with the provisions of Presidential Decree No. 1084," the
charter of PEA.
PEA's charter, however, expressly tasks PEA "to develop, improve, acquire, administer, deal in,
subdivide, dispose, lease and sell any and all kinds of lands x x x owned, managed, controlled
and/or operated by the government."87 (Emphasis supplied) There is, therefore, legislative
authority granted to PEA to sell its lands, whether patrimonial or alienable lands of the
public domain. PEA may sell to private parties itspatrimonial properties in accordance with
the PEA charter free from constitutional limitations. The constitutional ban on private
corporations from acquiring alienable lands of the public domain does not apply to the sale of
PEA's patrimonial lands.
PEA may also sell its alienable or disposable lands of the public domain to private
individuals since, with the legislative authority, there is no longer any statutory prohibition against
such sales and the constitutional ban does not apply to individuals. PEA, however, cannot sell
any of its alienable or disposable lands of the public domain to private corporations since
Section 3, Article XII of the 1987 Constitution expressly prohibits such sales. The legislative
authority benefits only individuals. Private corporations remain barred from acquiring any kind of
alienable land of the public domain, including government reclaimed lands.

The provision in PD No. 1085 stating that portions of the reclaimed lands could be transferred by
PEA to the "contractor or his assignees" (Emphasis supplied) would not apply to private
corporations but only to individuals because of the constitutional ban. Otherwise, the provisions
of PD No. 1085 would violate both the 1973 and 1987 Constitutions.
The requirement of public auction in the sale of reclaimed lands
Assuming the reclaimed lands of PEA are classified as alienable or disposable lands open to
disposition, and further declared no longer needed for public service, PEA would have to
conduct a public bidding in selling or leasing these lands. PEA must observe the provisions of
Sections 63 and 67 of CA No. 141 requiring public auction, in the absence of a law exempting
PEA from holding a public auction.88 Special Patent No. 3517 expressly states that the patent is
issued by authority of the Constitution and PD No. 1084, "supplemented by Commonwealth Act
No. 141, as amended." This is an acknowledgment that the provisions of CA No. 141 apply to
the disposition of reclaimed alienable lands of the public domain unless otherwise provided by
law. Executive Order No. 654,89 which authorizes PEA "to determine the kind and manner of
payment for the transfer" of its assets and properties, does not exempt PEA from the
requirement of public auction. EO No. 654 merely authorizes PEA to decide the mode of
payment, whether in kind and in installment, but does not authorize PEA to dispense with public
auction.
Moreover, under Section 79 of PD No. 1445, otherwise known as the Government Auditing
Code, the government is required to sell valuable government property through public bidding.
Section 79 of PD No. 1445 mandates that
"Section 79. When government property has become unserviceable for any cause,
or is no longer needed, it shall, upon application of the officer accountable therefor, be
inspected by the head of the agency or his duly authorized representative in the
presence of the auditor concerned and, if found to be valueless or unsaleable, it may
be destroyed in their presence. If found to be valuable, it may be sold at public
auction to the highest bidder under the supervision of the proper committee on
award or similar body in the presence of the auditor concerned or other authorized
representative of the Commission, after advertising by printed notice in the
Official Gazette, or for not less than three consecutive days in any newspaper of
general circulation, or where the value of the property does not warrant the expense
of publication, by notices posted for a like period in at least three public places in the
locality where the property is to be sold. In the event that the public auction fails,
the property may be sold at a private sale at such price as may be fixed by the
same committee or body concerned and approved by the Commission."
It is only when the public auction fails that a negotiated sale is allowed, in which case the
Commission on Audit must approve the selling price.90 The Commission on Audit implements
Section 79 of the Government Auditing Code through Circular No. 89-29691 dated January 27,
1989. This circular emphasizes that government assets must be disposed of only through public
auction, and a negotiated sale can be resorted to only in case of "failure of public auction."
At the public auction sale, only Philippine citizens are qualified to bid for PEA's reclaimed
foreshore and submerged alienable lands of the public domain. Private corporations are barred
from bidding at the auction sale of any kind of alienable land of the public domain.
PEA originally scheduled a public bidding for the Freedom Islands on December 10, 1991. PEA
imposed a condition that the winning bidder should reclaim another 250 hectares of submerged
areas to regularize the shape of the Freedom Islands, under a 60-40 sharing of the additional
reclaimed areas in favor of the winning bidder.92 No one, however, submitted a bid. On
December 23, 1994, the Government Corporate Counsel advised PEA it could sell the Freedom

Islands through negotiation, without need of another public bidding, because of the failure of the
public bidding on December 10, 1991.93
However, the original JVA dated April 25, 1995 covered not only the Freedom Islands and the
additional 250 hectares still to be reclaimed, it also granted an option to AMARI to reclaim
another 350 hectares. The original JVA, a negotiated contract, enlarged the reclamation area
to 750 hectares.94 The failure of public bidding on December 10, 1991, involving only 407.84
hectares,95 is not a valid justification for a negotiated sale of 750 hectares, almost double the
area publicly auctioned. Besides, the failure of public bidding happened on December 10, 1991,
more than three years before the signing of the original JVA on April 25, 1995. The economic
situation in the country had greatly improved during the intervening period.
Reclamation under the BOT Law and the Local Government Code
The constitutional prohibition in Section 3, Article XII of the 1987 Constitution is absolute and
clear: "Private corporations or associations may not hold such alienable lands of the public
domain except by lease, x x x." Even Republic Act No. 6957 ("BOT Law," for brevity), cited by
PEA and AMARI as legislative authority to sell reclaimed lands to private parties, recognizes the
constitutional ban. Section 6 of RA No. 6957 states
"Sec. 6. Repayment Scheme. - For the financing, construction, operation and
maintenance of any infrastructure projects undertaken through the build-operate-andtransfer arrangement or any of its variations pursuant to the provisions of this Act, the
project proponent x x x may likewise be repaid in the form of a share in the revenue of
the project or other non-monetary payments, such as, but not limited to, the grant of a
portion or percentage of the reclaimed land, subject to the constitutional
requirements with respect to the ownership of the land: x x x." (Emphasis
supplied)
A private corporation, even one that undertakes the physical reclamation of a government BOT
project, cannot acquire reclaimed alienable lands of the public domain in view of the
constitutional ban.
Section 302 of the Local Government Code, also mentioned by PEA and AMARI, authorizes
local governments in land reclamation projects to pay the contractor or developer in kind
consisting of a percentage of the reclaimed land, to wit:
"Section 302. Financing, Construction, Maintenance, Operation, and Management of
Infrastructure Projects by the Private Sector. x x x
xxx
In case of land reclamation or construction of industrial estates, the repayment plan
may consist of the grant of a portion or percentage of the reclaimed land or the
industrial estate constructed."
Although Section 302 of the Local Government Code does not contain a proviso similar to that of
the BOT Law, the constitutional restrictions on land ownership automatically apply even though
not expressly mentioned in the Local Government Code.
Thus, under either the BOT Law or the Local Government Code, the contractor or developer, if a
corporate entity, can only be paid with leaseholds on portions of the reclaimed land. If the

contractor or developer is an individual, portions of the reclaimed land, not exceeding 12

hectares96 of non-agricultural lands, may be conveyed to him in ownership in view of the
legislative authority allowing such conveyance. This is the only way these provisions of the BOT
Law and the Local Government Code can avoid a direct collision with Section 3, Article XII of the
1987 Constitution.
Registration of lands of the public domain
Finally, PEA theorizes that the "act of conveying the ownership of the reclaimed lands to public
respondent PEA transformed such lands of the public domain to private lands." This theory is
echoed by AMARI which maintains that the "issuance of the special patent leading to the
eventual issuance of title takes the subject land away from the land of public domain and
converts the property into patrimonial or private property." In short, PEA and AMARI contend that
with the issuance of Special Patent No. 3517 and the corresponding certificates of titles, the
157.84 hectares comprising the Freedom Islands have become private lands of PEA. In support
of their theory, PEA and AMARI cite the following rulings of the Court:

'Whenever public lands in the Philippine Islands belonging to the Government of the
United States or to the Government of the Philippines are alienated, granted or
conveyed to persons or to public or private corporations, the same shall be brought
forthwith under the operation of this Act (Land Registration Act, Act 496) and shall
become registered lands.'"
The first four cases cited involve petitions to cancel the land patents and the corresponding
certificates of titlesissued to private parties. These four cases uniformly hold that the Director
of Lands has no jurisdiction over private lands or that upon issuance of the certificate of title the
land automatically comes under the Torrens System. The fifth case cited involves the registration
under the Torrens System of a 12.8-hectare public land granted by the National Government to
Mindanao Medical Center, a government unit under the Department of Health. The National
Government transferred the 12.8-hectare public land to serve as the site for the hospital
buildings and other facilities of Mindanao Medical Center, which performed a public service. The
Court affirmed the registration of the 12.8-hectare public land in the name of Mindanao Medical
Center under Section 122 of Act No. 496. This fifth case is an example of a public land being
registered under Act No. 496 without the land losing its character as a property of public
dominion.

1. Sumail v. Judge of CFI of Cotabato,97 where the Court held

"Once the patent was granted and the corresponding certificate of title was issued, the
land ceased to be part of the public domain and became private property over which
the Director of Lands has neither control nor jurisdiction."
2. Lee Hong Hok v. David,98 where the Court declared -

In the instant case, the only patent and certificates of title issued are those in the name of PEA,
a wholly government owned corporation performing public as well as proprietary functions. No
patent or certificate of title has been issued to any private party. No one is asking the Director of
Lands to cancel PEA's patent or certificates of title. In fact, the thrust of the instant petition is that
PEA's certificates of title should remain with PEA, and the land covered by these certificates,
being alienable lands of the public domain, should not be sold to a private corporation.

"After the registration and issuance of the certificate and duplicate certificate of title
based on a public land patent, the land covered thereby automatically comes under
the operation of Republic Act 496 subject to all the safeguards provided
therein."3. Heirs of Gregorio Tengco v. Heirs of Jose Aliwalas,99 where the Court ruled
-

Registration of land under Act No. 496 or PD No. 1529 does not vest in the registrant private or
public ownership of the land. Registration is not a mode of acquiring ownership but is merely
evidence of ownership previously conferred by any of the recognized modes of acquiring
ownership. Registration does not give the registrant a better right than what the registrant had
prior to the registration.102 The registration of lands of the public domain under the Torrens
system, by itself, cannot convert public lands into private lands.103

"While the Director of Lands has the power to review homestead patents, he may do
so only so long as the land remains part of the public domain and continues to be
under his exclusive control; but once the patent is registered and a certificate of title is
issued, the land ceases to be part of the public domain and becomes private property
over which the Director of Lands has neither control nor jurisdiction."

Jurisprudence holding that upon the grant of the patent or issuance of the certificate of title the
alienable land of the public domain automatically becomes private land cannot apply to
government units and entities like PEA. The transfer of the Freedom Islands to PEA was made
subject to the provisions of CA No. 141 as expressly stated in Special Patent No. 3517 issued by
then President Aquino, to wit:

4. Manalo v. Intermediate Appellate Court,100 where the Court held

"When the lots in dispute were certified as disposable on May 19, 1971, and free
patents were issued covering the same in favor of the private respondents, the said
lots ceased to be part of the public domain and, therefore, the Director of Lands lost
jurisdiction over the same."
5.Republic v. Court of Appeals,101 where the Court stated
"Proclamation No. 350, dated October 9, 1956, of President Magsaysay legally
effected a land grant to the Mindanao Medical Center, Bureau of Medical Services,
Department of Health, of the whole lot, validly sufficient for initial registration under the
Land Registration Act. Such land grant is constitutive of a 'fee simple' title or absolute
title in favor of petitioner Mindanao Medical Center. Thus, Section 122 of the Act,
which governs the registration of grants or patents involving public lands, provides that

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

Philippines and in conformity with the provisions of Presidential Decree No. 1084,
supplemented by Commonwealth Act No. 141, as amended, there are hereby
granted and conveyed unto the Public Estates Authority the aforesaid tracts of land
containing a total area of one million nine hundred fifteen thousand eight hundred
ninety four (1,915,894) square meters; the technical description of which are hereto
attached and made an integral part hereof." (Emphasis supplied)
Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters not covered by PD
No. 1084. Section 60 of CA No. 141 prohibits, "except when authorized by Congress," the sale
of alienable lands of the public domain that are transferred to government units or entities.
Section 60 of CA No. 141 constitutes, under Section 44 of PD No. 1529, a "statutory lien
affecting title" of the registered land even if not annotated on the certificate of title. 104 Alienable
lands of the public domain held by government entities under Section 60 of CA No. 141 remain
public lands because they cannot be alienated or encumbered unless Congress passes a law
authorizing their disposition. Congress, however, cannot authorize the sale to private

corporations of reclaimed alienable lands of the public domain because of the constitutional ban.
Only individuals can benefit from such law.
The grant of legislative authority to sell public lands in accordance with Section 60 of CA No. 141
does not automatically convert alienable lands of the public domain into private or patrimonial
lands. The alienable lands of the public domain must be transferred to qualified private parties,
or to government entities not tasked to dispose of public lands, before these lands can become
private or patrimonial lands. Otherwise, the constitutional ban will become illusory if Congress
can declare lands of the public domain as private or patrimonial lands in the hands of a
government agency tasked to dispose of public lands. This will allow private corporations to
acquire directly from government agencies limitless areas of lands which, prior to such law, are
concededly public lands.
Under EO No. 525, PEA became the central implementing agency of the National
Government to reclaim foreshore and submerged areas of the public domain. Thus, EO No. 525
declares that

behalf of the National Government. All reclamation projects shall be approved by

the President upon recommendation of the PEA, and shall be undertaken by the PEA
or through a proper contract executed by it with any person or entity; Provided, that,
reclamation projects of any national government agency or entity authorized under its
charter shall be undertaken in consultation with the PEA upon approval of the
President.
x x x ."
As the central implementing agency tasked to undertake reclamation projects nationwide, with
authority to sell reclaimed lands, PEA took the place of DENR as the government agency
charged with leasing or selling reclaimed lands of the public domain. The reclaimed lands being
leased or sold by PEA are not private lands, in the same manner that DENR, when it disposes of
other alienable lands, does not dispose of private lands but alienable lands of the public domain.
Only when qualified private parties acquire these lands will the lands become private lands. In
the hands of the government agency tasked and authorized to dispose of alienable of
disposable lands of the public domain, these lands are still public, not private lands.

"EXECUTIVE ORDER NO. 525

Designating the Public Estates Authority as the Agency Primarily Responsible for all
Reclamation Projects
Whereas, there are several reclamation projects which are ongoing or being proposed
to be undertaken in various parts of the country which need to be evaluated for
consistency with national programs;
Whereas, there is a need to give further institutional support to the Government's
declared policy to provide for a coordinated, economical and efficient reclamation of
lands;
Whereas, Presidential Decree No. 3-A requires that all reclamation of areas shall be
limited to the National Government or any person authorized by it under proper
contract;
Whereas, a central authority is needed to act on behalf of the National
Government which shall ensure a coordinated and integrated approach in the
reclamation of lands;
Whereas, Presidential Decree No. 1084 creates the Public Estates Authority as a
government corporation to undertake reclamation of lands and ensure their
maximum utilization in promoting public welfare and interests; and
Whereas, Presidential Decree No. 1416 provides the President with continuing
authority to reorganize the national government including the transfer, abolition, or
merger of functions and offices.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by
virtue of the powers vested in me by the Constitution and pursuant to Presidential
Decree No. 1416, do hereby order and direct the following:
Section 1. The Public Estates Authority (PEA) shall be primarily responsible for
integrating, directing, and coordinating all reclamation projects for and on

Furthermore, PEA's charter expressly states that PEA "shall hold lands of the public domain"
as well as "any and all kinds of lands." PEA can hold both lands of the public domain and private
lands. Thus, the mere fact that alienable lands of the public domain like the Freedom Islands are
transferred to PEA and issued land patents or certificates of title in PEA's name does not
automatically make such lands private.
To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private
lands will sanction a gross violation of the constitutional ban on private corporations from
acquiring any kind of alienable land of the public domain. PEA will simply turn around, as PEA
has now done under the Amended JVA, and transfer several hundreds of hectares of these
reclaimed and still to be reclaimed lands to a single private corporation in only one transaction.
This scheme will effectively nullify the constitutional ban in Section 3, Article XII of the 1987
Constitution which was intended to diffuse equitably the ownership of alienable lands of the
public domain among Filipinos, now numbering over 80 million strong.
This scheme, if allowed, can even be applied to alienable agricultural lands of the public domain
since PEA can "acquire x x x any and all kinds of lands." This will open the floodgates to
corporations and even individuals acquiring hundreds of hectares of alienable lands of the public
domain under the guise that in the hands of PEA these lands are private lands. This will result in
corporations amassing huge landholdings never before seen in this country - creating the very
evil that the constitutional ban was designed to prevent. This will completely reverse the clear
direction of constitutional development in this country. The 1935 Constitution allowed private
corporations to acquire not more than 1,024 hectares of public lands.105 The 1973 Constitution
prohibited private corporations from acquiring any kind of public land, and the 1987 Constitution
has unequivocally reiterated this prohibition.
The contention of PEA and AMARI that public lands, once registered under Act No. 496 or PD
No. 1529, automatically become private lands is contrary to existing laws. Several laws
authorize lands of the public domain to be registered under the Torrens System or Act No. 496,
now PD No. 1529, without losing their character as public lands. Section 122 of Act No. 496, and
Section 103 of PD No. 1529, respectively, provide as follows:
Act No. 496
"Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x x
Government of the Philippine Islands are alienated, granted, or conveyed to persons

or the public or private corporations, the same shall be brought forthwith under the
operation of this Act and shall become registered lands."
PD No. 1529
"Sec. 103. Certificate of Title to Patents. Whenever public land is by the Government
alienated, granted or conveyed to any person, the same shall be brought forthwith
under the operation of this Decree." (Emphasis supplied)
Based on its legislative history, the phrase "conveyed to any person" in Section 103 of PD No.
1529 includes conveyances of public lands to public corporations.
Alienable lands of the public domain "granted, donated, or transferred to a province,
municipality, or branch or subdivision of the Government," as provided in Section 60 of CA No.
141, may be registered under the Torrens System pursuant to Section 103 of PD No. 1529. Such
registration, however, is expressly subject to the condition in Section 60 of CA No. 141 that the
land "shall not be alienated, encumbered or otherwise disposed of in a manner affecting its
title, except when authorized by Congress." This provision refers to government reclaimed,
foreshore and marshy lands of the public domain that have been titled but still cannot be
alienated or encumbered unless expressly authorized by Congress. The need for legislative
authority prevents the registered land of the public domain from becoming private land that can
be disposed of to qualified private parties.
The Revised Administrative Code of 1987 also recognizes that lands of the public domain may
be registered under the Torrens System. Section 48, Chapter 12, Book I of the Code states
"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the
Government is authorized by law to be conveyed, the deed of conveyance shall be
executed in behalf of the government by the following:
(1) x x x
(2) For property belonging to the Republic of the Philippines, but titled in the
name of any political subdivision or of any corporate agency or instrumentality,
by the executive head of the agency or instrumentality." (Emphasis supplied)
Thus, private property purchased by the National Government for expansion of a public wharf
may be titled in the name of a government corporation regulating port operations in the country.
Private property purchased by the National Government for expansion of an airport may also be
titled in the name of the government agency tasked to administer the airport. Private property
donated to a municipality for use as a town plaza or public school site may likewise be titled in
the name of the municipality.106 All these properties become properties of the public domain, and
if already registered under Act No. 496 or PD No. 1529, remain registered land. There is no
requirement or provision in any existing law for the de-registration of land from the Torrens
System.
Private lands taken by the Government for public use under its power of eminent domain
become unquestionably part of the public domain. Nevertheless, Section 85 of PD No. 1529
authorizes the Register of Deeds to issue in the name of the National Government new
certificates of title covering such expropriated lands. Section 85 of PD No. 1529 states

"Sec. 85. Land taken by eminent domain. Whenever any registered land, or interest
therein, is expropriated or taken by eminent domain, the National Government,
province, city or municipality, or any other agency or instrumentality exercising such
right shall file for registration in the proper Registry a certified copy of the judgment
which shall state definitely by an adequate description, the particular property or
interest expropriated, the number of the certificate of title, and the nature of the public
use. A memorandum of the right or interest taken shall be made on each certificate of
title by the Register of Deeds, and where the fee simple is taken, a new certificate
shall be issued in favor of the National Government, province, city, municipality,
or any other agency or instrumentality exercising such right for the land so taken. The
legal expenses incident to the memorandum of registration or issuance of a new
certificate of title shall be for the account of the authority taking the land or interest
therein." (Emphasis supplied)
Consequently, lands registered under Act No. 496 or PD No. 1529 are not exclusively private or
patrimonial lands. Lands of the public domain may also be registered pursuant to existing laws.
AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the Freedom
Islands or of the lands to be reclaimed from submerged areas of Manila Bay. In the words of
AMARI, the Amended JVA "is not a sale but a joint venture with a stipulation for reimbursement
of the original cost incurred by PEA for the earlier reclamation and construction works performed
by the CDCP under its 1973 contract with the Republic." Whether the Amended JVA is a sale or
a joint venture, the fact remains that the Amended JVA requires PEA to "cause the issuance and
delivery of the certificates of title conveying AMARI's Land Share in the name of AMARI." 107
This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which provides
that private corporations "shall not hold such alienable lands of the public domain except by
lease." The transfer of title and ownership to AMARI clearly means that AMARI will "hold" the
reclaimed lands other than by lease. The transfer of title and ownership is a "disposition" of the
reclaimed lands, a transaction considered a sale or alienation under CA No. 141,108 the
Government Auditing Code,109 and Section 3, Article XII of the 1987 Constitution.
The Regalian doctrine is deeply implanted in our legal system. Foreshore and submerged areas
form part of the public domain and are inalienable. Lands reclaimed from foreshore and
submerged areas also form part of the public domain and are also inalienable, unless converted
pursuant to law into alienable or disposable lands of the public domain. Historically, lands
reclaimed by the government are sui generis, not available for sale to private parties unlike
other alienable public lands. Reclaimed lands retain their inherent potential as areas for public
use or public service. Alienable lands of the public domain, increasingly becoming scarce natural
resources, are to be distributed equitably among our ever-growing population. To insure such
equitable distribution, the 1973 and 1987 Constitutions have barred private corporations from
acquiring any kind of alienable land of the public domain. Those who attempt to dispose of
inalienable natural resources of the State, or seek to circumvent the constitutional ban on
alienation of lands of the public domain to private corporations, do so at their own risk.
We can now summarize our conclusions as follows:
1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now
covered by certificates of title in the name of PEA, are alienable lands of the public
domain. PEA may lease these lands to private corporations but may not sell or
transfer ownership of these lands to private corporations. PEA may only sell these
lands to Philippine citizens, subject to the ownership limitations in the 1987
Constitution and existing laws.

2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural
resources of the public domain until classified as alienable or disposable lands open
to disposition and declared no longer needed for public service. The government can
make such classification and declaration only after PEA has reclaimed these
submerged areas. Only then can these lands qualify as agricultural lands of the public
domain, which are the only natural resources the government can alienate. In their
present state, the 592.15 hectares of submerged areas are inalienable and outside
the commerce of man.
3. Since the Amended JVA seeks to transfer to AMARI, a private corporation,
ownership of 77.34 hectares110 of the Freedom Islands, such transfer is void for being
contrary to Section 3, Article XII of the 1987 Constitution which prohibits private
corporations from acquiring any kind of alienable land of the public domain.
4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156
hectares111 of still submerged areas of Manila Bay, such transfer is void for being
contrary to Section 2, Article XII of the 1987 Constitution which prohibits the alienation
of natural resources other than agricultural lands of the public domain. PEA may
reclaim these submerged areas. Thereafter, the government can classify the
reclaimed lands as alienable or disposable, and further declare them no longer
needed for public service. Still, the transfer of such reclaimed alienable lands of the
public domain to AMARI will be void in view of Section 3, Article XII of the 1987
Constitution which prohibits private corporations from acquiring any kind of alienable
land of the public domain.
Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987
Constitution. Under Article 1409112 of the Civil Code, contracts whose "object or purpose is
contrary to law," or whose "object is outside the commerce of men," are "inexistent and void from
the beginning." The Court must perform its duty to defend and uphold the Constitution, and
therefore declares the Amended JVA null and void ab initio.
Seventh issue: whether the Court is the proper forum to raise the issue of whether the
Amended JVA is grossly disadvantageous to the government.
Considering that the Amended JVA is null and void ab initio, there is no necessity to rule on this
last issue. Besides, the Court is not a trier of facts, and this last issue involves a determination of
factual matters.
WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari Coastal Bay
Development Corporation are PERMANENTLY ENJOINED from implementing the Amended
Joint Venture Agreement which is hereby declared NULL and VOID ab initio.
SO ORDERED.

G.R. No. L-37995 August 31, 1987

BUREAU OF FORESTRY, BUREAU OF LANDS and PHILIPPINE FISHERIES
COMMISSION, petitioners,
vs.
COURT OF APPEALS and FILOMENO GALLO, respondents.

PARAS, J.:
Before Us is a petition for review on certiorari, which seeks to annul and set aside the
Decision 1 (promulgated on April 11, 1973) of the respondent court in CA-G.R. No. 38163-R,
affirming the decision 2 (dated April 6, 1966) of the then Court of First Instance of Iloilo in Land
Registration Case No. N-506, G.L.R.O. Record No. N-20783 entitled "Filomeno Gallo, Applicant
vs. Bureau of Forestry, Bureau of Lands, and Philippine Fisheries Commission, oppositors. " The
dispositive portion of the trial court's decision reads as follows:
WHEREFORE, the court Orders the registration of Lots Nos. 2, 3, and 4 and
the bigger portion of Lot No. 1 after excluding the portion Identified as Lot 1A together with the improvements thereon in the name of Filomeno Gallo, of
legal age, widower, Filipino citizen, and resident of 155 Fuentes Street, Iloilo
City, Philippines. Lots Nos. 1, 2 and 3 are subject to the road right-of-way of
15 meters wide which is presently known as Sto. Rosario Rizal Montpiller
provincial Road and Buenavista-Daraga provincial Road they being
properties of the Province of Iloilo and should be registered in the name of
said province. The oppositions of the Director of Lands, Director of Forestry
and the Philippine Fisheries Commission are dismissed. Lot 1-A with an
area of 2.6864 hectares which is enclosed in red pencil and is found inside
Lot No. 1 in the plan Exhibit is hereby declared public land. After the
decision has become final let the corresponding decree be issued.
SO ORDERED. (p. 38, Joint Record on Appeal Annex "A." p. 25, Rollo)
This appeal also seeks to annul and set aside respondent court's resolution dated December 14,
1973 denying for lack of merit, herein petitioners' motion for reconsideration.
The basic issue which petitioners raise in this appeal is
Whether or not the classification of lands of the public domain by the
Executive Branch of the Government into agricultural, forest or mineral can
be changed or varied by the court depending upon the evidence adduced
before it. (p. 9, Brief for the Petitioners, p. 105, Rollo)

On July 11, 1961, four (4) parcels of land situated in Buenavista, Iloilo described in Plan Psu150727, containing an approximate area of 30.5943 hectares were the subject of an application
for registration by Mercedes Diago who alleged among others that she herself occupied said
parcels of land having bought them from the testate estate of the late Jose Ma. Nava who, in his
lifetime, had bought the lands in turn from Canuto Gustilo on June 21, 1934. The Director of
Lands opposed said application on the ground that neither the applicant nor her predecessorsin-interest have sufficient title over the lands applied for, which could be registered under the
Torrens systems, and that they have never been in open, continuous and exclusive possession
of the said lands for at least 30 years prior to the filing of the application. The Director of Forestry
on the other hand anchored his opposition principally on the ground that certain specific portions
of the lands subject matter of the application, with an area of approximately 194,080 square
meters are mangrove swamps and are within Timberland Block "B " L.C. Project No. 38, L.C.
Map No. 1971 of Buenavista, Iloilo.
On June 30, 1965, respondent Filomeno Gallo, having purchased the subject parcels of land
from Mercedes Diago on April 27, 1965, moved to be substituted in place of the latter, attaching
to his motion an Amended Application for Registration of Title substantially reproducing the
allegations in the application of Mercedes Diago. Petitioner Philippine Fisheries Commission
also moved on August 30, 1965 to be substituted in place of petitioner Bureau of Forestry as
oppositor over a portion of the land sought to be registered, supervision and control of said
portion having been transferred from the Bureau of Forestry to the Philippine Fisheries
Commission.
On April 6, 1966, the trial court rendered its decision ordering the registration of the four (4)
parcels of land in the name of respondent Filomeno Gallo after excluding a portion Identified as
Lot "1-A" which is the site of the municipal hall of Buenavista town, and subjecting Lots Nos. 1, 2
and 3 to the road-of-way of 15 meters width.
Petitioners appealed from said decision to the respondent Court of Appeals assigning the
following errors in their brief:
THE TRIAL COURT ERRED IN ORDERING THE REGISTRATION OF THE
SUBJECT LAND WHICH CONSISTS OF TIMBERLAND,
FORESHORELAND AND LAND BELONGING TO THE PUBLIC DOMAIN
HENCE UNREGISTERABLE.
THE TRIAL COURT ERRED IN HOLDING THAT THE POSSESSION OF
THE APPLICANT-APPELLEE AND HIS PREDECESSORS-IN-INTEREST
HAD BEEN PEACEFUL, OPEN, CONTINUOUS, UNINTERRUPTED AND
ADVERSE TO CLAIMANTS AND IN THE CONCEPT OF OWNER. (p. 6,
Brief for the Petitioners, p. 105, Rollo)
Respondent court affirmed said decision and denied a motion for reconsideration of the same
hence the present petition with two (2) assigned errors, basically the same issues raised with the
respondent court:

The antecedent facts of the case are as follows:

RESPONDENT COURT ERRED IN NOT HOLDING THAT THE
DETERMINATION OF WHETHER A PUBLIC LAND IS AGRICULTURAL OR
STILL A FOREST LAND RESTS EXCLUSIVELY UPON THE DIRECTOR

OF FORESTRY (NOW DIRECTOR OF FOREST DEVELOPMENT), THE

SECRETARY OF NATURAL RESOURCES) AND THE PRESIDENT OF
THE PHILIPPINES.
RESPONDENT COURT ERRED IN NOT HOLDING THAT THE LAND IS
PRESUMED TO BELONG TO THE PUBLIC DOMAIN AND PRIVATE
RESPONDENT HEREIN HAS NOT CONVINCINGLY SHOWN THAT THE
REMOTE PREDECESSOR-IN-INTEREST POSSESSED THE LAND IN
QUESTION SINCE TIME IMMEMORIAL. (pp. 9 & 20, Brief for the
Petitioners, p. 105, Rollo)
Out of the 30.5943 hectares applied for registration under the Torrens System, 11.1863 hectares
are coconut lands and admittedly within the disposable portion of the public domain. These are
more particularly Identified as parcels "B," B-1", "B-2" and "B-3" of the sketch plan Exh. "1-A."
The rest, consisting of 19.4080 hectares and Identified as parcels A, A-1, A-2 and A-3 of the
same plan Exh. "1-A," is now the center of controversy of the present appeal.
Petitioners contend that respondent court completely ignored the undisputed facts that 1) the
controverted area is within Timberland Block "B," L.C. Project No. 38, L.C. Map No. 1971 of
Buenavista, Iloilo and that 2) the certification of February 18, 1956 of the then Director of
Forestry to the effect that the area in question is needed for forest purposes. Respondent court
in affirming the decision of the Iloilo trial court ruled that although the controverted portion of
19.4080 hectares are mangrove and nipa swamps within Timberland Block "B," L.C. Project No.
38, same cannot be considered part of the public forest not susceptible of private ownership
since petitioners failed to submit convincing proof that these lands are more valuable for forestry
than for agricultural purposes, and the presumption is that these are agricultural lands.
Respondent court based its conclusion upon the premise that whether or not a controverted
parcel of land is forest land, is a question of fact which should be settled by competent proofs,
and if such a question be an issue in a land registration proceeding, it is incumbent upon the
Director of Forestry to submit to the court convincing proofs that the land in dispute is not more
valuable for agriculture than for forest purposes. It is the position of respondent that respondent
court did "not hesitate to apply this presumption with full force particularly where, as in the case
at bar, the lands applied for have been possessed and cultivated by the applicant and his
predecessors-in-interest for a long number of years without the government taking any positive
step to dislodge the occupants from their holdings which have passed from one to another by
inheritance or by purchase." (p. 9, Brief for private respondents) Otherwise stated, it is Our
impression that private respondents claim the rule of prescription against the government.
Such contentions of private respondents do not hold water. Admittedly the controversial area is
within a timberland block as classification of the municipality and certified to by the Director of
Forestry on February 18, 1956 as lands needed for forest purposes and hence they are portions
of the public domain which cannot be the subject of registration proceedings. Clearly therefore
the land is public land and there is no need for the Director of Forestry to submit to the court
convincing proofs that the land in dispute is not more valuable for agriculture than for forest
purposes, as there was no question of whether the land is forest land or not. Be it remembered
that said forest land had been declared and certified as such by the Director of the Bureau of
Forestry on February 18, 1956, several years before the original applicant of the lands for
registration Mercedes Diago, filed it on July 11, 1961. In the case of Government of the
Philippine Islands vs. Abella, 49 Phil. 49, cited by private respondents themselves in their brief,
We held

Following the decision of Ankon vs. Government of the Philippine Islands

(40 Phil. 10), it is again held, that whether a particular parcel of land is more
valuable for forestry purposes than for agricultural purposes, or vice versa,
is a fact which must be established during the trial of the case. Whether the
particular land is agricultural, forestry or mineral is a question to be settled in
each particular case unless the Bureau of Forestry has, under the authority
conferred upon it by law, prior to the intervention of private interest, set
aside said land for forestry or mineral resources. (Italics for emphasis)
We also held in the case of Republic vs. Animas, 56 SCRA 499, 503 that... As a general rule, timber or forest lands are not alienable or disposable
under either the Constitution of 1935 or the Constitution of 1973.
... It is the Bureau of Forestry that has jurisdiction and authority over the
demarcation, protection, management, reproduction, occupancy and use of
all public forests and forest reservations and over the granting of licenses
for the taking of products therefrom, including stone and earth (Section
1816 of the Revised Administrative Code). That the area in question is a
forest or timber land is clearly established by the certification made by the
Bureau of Forest Development that it is within the portion of the area which
was reverted to the category of forest land, approved by the President on
March 7, 1958.
As provided for under Sec. 6 of Commonwealth Act No. 141, which was lifted from Act No. 2874,
the classification or reclassification of public lands into alienable or disposable, mineral or forest
lands is now a prerogative of the Executive Department of the government and not of the courts.
With these rules, there should be no more room for doubt that it is not the court which
determines the classification of lands of the public domain into agricultural, forest or mineral but
the Executive Branch of the Government, through the Office of the President. Hence, it was
grave error and/or abuse of discretion for the respondent court to ignore the uncontroverted
facts that (1) the disputed area is within a timberland block and (2) as certified to by the then
Director of Forestry, the area is needed for forest purposes.
Furthermore, private respondents Cannot claim to have obtained their title by prescription
inasmuch as the application filed by them necessarily implied an admission that the portions
applied for are part of the public domain which cannot be acquired by prescription, unless the
law expressly permits it. It is a rule of law that possession of forest lands, however long, cannot
ripen into private ownership (Director of Forestry vs. Munoz, 23 SCRA 1184).
WHEREFORE, in the light of the foregoing, the assailed decision is hereby SET ASIDE, and a
new one is hereby rendered, declaring that:
1) Parcels "B," "B-1," "B-2 and "B-3" of the sketch plan Exhibit "1-A" consisting of 11.1863
hectares of coconut land and admittedly within the disposable portion of the public domain are
hereby ordered registered in the name of the applicant Filomeno Gallo and/or his successors-ininterest as provided for by the Public Land Law; and

2) Parcels "A," "A-1," and "A-2," and "A-3" of the same plan Exh. "1-A," consisting of 19.4080
hectares, are forest lands or lands of the public domain of the Republic of the Philippines and
are therefore inalienable.
SO ORDERED.

G.R. No. 83609 October 26, 1989

DIRECTOR OF LANDS, petitioner,
vs.
COURT OF APPEALS, IBARRA BISNAR and AMELIA BISNAR, respondents.
Ibarra L. Bisnar for himself and for and in behalf of co-private respondent Amelia Bisnar.

GRIO-AQUINO, J.:
Petitioner Director of Lands, through the Solicitor General, seeks a review of the decision dated
May 27, 1988, of the Court of Appeals in CA-G.R. CV No. 66426, entitled "Ibarra Bisnar, et al.
vs. Director of Lands," affirming in toto the decision of the Court of First Instance of Capiz,
granting the private respondents' application for confirmation and registration of their title to two
(2) parcels of land in LRC Cad. Rec. 1256.
In their joint application for registration of title to two (2) parcels of land filed on July 20,1976, the
applicants Ibarra and Amelia Bisnar claimed to be the owners in fee simple of Lots 866 and 870
of the Pilar Cadastre Plan AP-06-000869, respectively containing an area of 28 hectares
(284,424 sq. m.) and 34 hectares (345,385 sq. m.) situated in barrio Gen. Hizon, Municipality of
President Roxas, Province of Capiz (p. 14, Rollo). The applicants alleged that they inherited
those parcels of land (p. 41, Rollo) and they had been paying the taxes thereon (p. 40, Rollo).
On December 16,1976, the Director of Lands and the Director of the Bureau of Forest
Development, opposed the application on the grounds that:
1. Neither the applicants nor their predecessors-in-interest possess
sufficient title to acquire ownership in fee simple of the land or lots applied
for, the same not having been acquired by any of the various types of title
issued by the Spanish Government, such as, (1) 'titulo real' or royal grant,
(2) the 'concession especial' or special grant, (3) the 'composicion con el
estado titulo' or adjustment title, (4) the 'titulo de compra 'or title by
purchase, and (5) the 'informacion possessoria' or possessory information
under the Royal Decree of 13 February 1894, or any other recognized mode
of acquisition of title over realty under pertinent applicable laws.

On February 24,1977, the applicants filed an amended application, which was approved on
March 14, 1977, and included the following allegation:
Should the Land Registration Act invoked be not applicable to the case, they
hereby apply for the benefits of Chapter 8, Commonwealth Act 141, as
amended, as they and their predecessors-in-interest have been in
possession of the land as owners for more than fifty (50) years. (p. 16,
Rollo.)
After hearing, the trial court ordered the registration of the title of the lots in the names of the
applicants, herein private respondents. It found that applicants and their predecessors- ininterest have been in open, public, continuous, peaceful and adverse possession of the subject
parcels of land under bona fide claims of ownership for more than eighty (80) years (not only 30)
prior to the filing of the application for registration, introduced improvements on the lands by
planting coconuts, bamboos and other plants, and converted a part of the land into productive
fishponds (p. 68, Rollo).
On appeal, the Appellate Court affirmed the trial court's decision. It held that the classification of
the lots as timberland by the Director of Forestry cannot prevail in the absence of proof that the
said lots are indeed more valuable as forest land than as agricultural land, citing as authority the
case of Ankron vs. Government of the Philippine Islands (40 Phil. 10). In this petition, the
government alleges that:
1. the classification or reclassification of public lands into alienable or
disposable agricultural land, mineral land or forest land is a prerogative of
the Executive Department of the government and not of the courts;
2. that possession of forest lands, no matter how long, cannot ripen into
private ownership; and
3. that an applicant for registration of title has the burden of proving that he
meets the requirements of Section 48 of Com. Act No. 141, as amended. (p.
19, Rollo.)
The principal issue in this appeal is whether the lots in question may be registered under Section
48 (b) of CA 141, as amended.
The petition is impressed with merit.

2. Neither the applicants nor their predecessors-in-interest have been in

open, continuous, exclusive and notorious possession and occupation of the
land in question for at least thirty (30) years immediately preceding the filing
of the application.
3. The properties in question are a portion of the public domain belonging to
the Republic of the Philippines, not subject to private appropriation, (pp. 1719, Record on Appeal). (pp. 14-15, Rollo.)

In the case of Bureau of Forestry vs. Court of Appeals, 153 SCRA 351, we ruled:
As provided for under Section 6 of Commonwealth Act 141, which was lifted
from Act 2874, the classification or reclassification of public lands into
alienable or disposable, mineral or forest lands is now a prerogative of the
Executive Department of the government and not the courts. With these
rules, there should be no more room for doubt that it is not the court which
determines the classification of lands of the public domain into agricultural,
forest or mineral but the Executive Branch of the government, through the

Office of the President. Hence, it was grave error and/or abuse of discretion
for respondent court to ignore the uncontroverted facts that (1) the disputed
area is within a timberland block, and (2) as certified to by the then Director
of Forestry, the area is needed for forest purposes. (pp. 21-22, Rollo.)
It bears emphasizing that a positive act of the government is needed to declassify land which is
classified as forest and to convert it into alienable or disposable land for agricultural or other
purposes (Republic vs. Animas, 56 SCRA 499). Unless and until the land classified as forest is
released in an official proclamation to that effect so that it may form part of the disposable
agricultural lands of the public domain, the rules on confirmation of imperfect title do not apply
(Amunategui vs. Director of Forestry, 126 SCRA 69; Director of Lands vs. Court of Appeals, 129
SCRA 689; Director of Lands vs. Court of Appeals, 133 SCRA 701; Republic vs. Court of
Appeals, 148 SCRA 480; Vallarta vs. Intermediate Appellate Court, 151 SCRA 679).
Thus, possession of forest lands, however long, cannot ripen into private ownership (Vano vs.
Government, 41 Phil. 161 [1920]; Adorable vs. Director of Forestry, 107 Phil. 401 [1960]). A
parcel of forest land is within the exclusive jurisdiction of the Bureau of Forestry and beyond the
power and jurisdiction of the cadastral court to register under the Torrens System (Republic vs.
Court of Appeals, 89 SCRA 648; Republic vs. Vera, 120 SCRA 210 [1983]; Director of Lands vs.
Court of Appeals, 129 SCRA 689 [1984]).
Section 48 (b) of Commonwealth Act No. 141, as amended, applies exclusively to public
agricultural land. Forest lands or areas covered with forests are excluded (p. 26, Rollo). We
reiterate our ruling in Amunategui that:
In confirmation of imperfect title cases, the applicant shoulders the burden
of proving that he meets the requirements of Section 48, Commonwealth
Act No. 141, as amended by Republic Act 1942. He must overcome the
presumption that the land he is applying for is part of the public domain but
that he has an interest therein sufficient to warrant registration in his name
because of an imperfect title such as those derived from old Spanish grants
or that he has had continuous, open and notorious possession and
occupation of agricultural lands of the public domain under a bona fide claim
of acquisition of ownership for at least thirty (30) years preceding the filing of
his application. (Heirs of Amunategui vs. Director of Forestry, 126 SCRA
69.)
WHEREFORE, the appealed decision is reversed and set aside. The application for registration
in LRC Cad. Rec. 1256 of the former Court of First Instance, is hereby dismissed without costs.
SO ORDERED.

G.R. No. L-3714

January 26, 1909

ISABELO MONTANO Y MARCIAL, petitioner-appellee,

vs.
THE INSULAR GOVERNMENT, ET AL., respondents.
THE INSULAR GOVERNMENT, appellant.
Attorney-General Araneta, for appellant.
F. Buencamino, for appellee.
TRACEY, J.:
Isabelo Montano presents a petition to the Court of Land Registration for the inscription of a
piece of land in the barrio of Libis, municipality of Caloocan, used as a fishery having a
superficial area of 10,805 square meters, and bounded as set out in the petition; its value
according to the last assessment being $505.05, United States currency.
This petition was opposed by the Solicitor-General in behalf of the Director of Lands, and by the
entity known asObras Pias de la Sagrada Mitra, the former on the ground that the land in
question belonged to the Government of the United States, and the latter, that it was the
absolute owner of all the dry land along the eastern boundary of the said fishery.
The Court of Land Registration in its decision of December 1, 1906, dismissed the said
oppositions without costs and decreed, after a general entry by default, the adjudication and
registration of the property described in the petition, in favor of Isabelo Montano y Marcial.
From this decision only counsel for the Director of Public Lands appealed to this court. It is a
kindred case to Cirilo Mapa vs. The Insular Government, decided by this court on February 19,
1908, reported in 10 Phil. Rep., 175.
As some discussion has arisen as to the scope of that decision, it appears opportune to reaffirm
the principle there laid down. The issue was, whether the lands used as a fishery , for the growth
of nipa, and as salt deposits, inland some distance from the sea, and asserted, though not
clearly proved to be overflowed at high tide could be registered as private property on the
strength of ten years' occupation, under paragraph 6 of section 54 of Act No. 926 of the Phil.
Commission. The point decided was that such land within the meaning of the Act of Congress of
July 1, 1902, was agricultural, the reasoning leading up to the conclusion being that congress
having divided all the public lands of the Islands into three classes it must be included in one of
the three, and being clearly neither forest nor mineral, it must of necessity fall into two division of
agricultural land. In the concurring opinion, in order to avoid misapprehension on the part of
those not familiar with United States land legislation and a misunderstanding of the reach of the
doctrine, it was pointed out that under the decision of the Supreme Court of the United States
the phrase "public lands" is held to be equivalent to "public domain," and dos not by any means
include all lands of Government ownership, but only so much of said lands as are thrown open
to private appropriation and settlement by homestead and other like general laws. Accordingly,
"government land" and "public domain" are not synonymous items; the first includes not only the
second, but also other lands of the Government already reserved or devoted to public use or

subject to private right. In other words, the Government owns real estate which is part of the
"public lands" and other real estate which is not part thereof.
This meaning attached to the phrase "public lands" by Congress in its land legislation is settled
by usage and adjudication beyond a doubt, and without variation. It is therefore doing the utmost
violence to all rules of construction to contend that in this law, dealing with the same subjectmatter in connection with these Islands, a different meaning had, without indication or motive,
been imported into the words. They cannot have one meaning in any other statute and a
different and conflicting meaning in this statute. Where property in general is referred to therein,
other and apt phrases are used in order to include it; for instance, section 12 provides "that all
the property and rights which have been acquired in the Phil. Islands by the United States ... are
hereby placed under the control of the Government of the said Islands." Therefore, there is
much real property belonging to the Government which is not affected by statutes for the
settlement, prescription or sale of public lands. Examples in point are properties occupied by
public buildings or devoted to municipal or other governmental uses.
Among the authorities cited in the Mapa case are two, Shively vs. Bowlby (152 U.S., 1), and
Mann vs. Tacoma Land Co. (153 U.S., 273), in which it was held that general public land laws
did not apply to land over which the tide ebbs and flows. Mr. Justice Gray, in Shively vs. Bowlby,
which is in itself an epitome of the American Law of Waters, speaking of the tide lands, said:
But Congress has never undertaken by general laws to dispose of such lands. . . .
The Congress of the United States, in disposing of the public lands, has constantly
acted upon the theory that those lands, whether in the interior, or on the coast, above
high- water mark, may be taken up by actual occupants, in order to encourage the
settlement of the country, but that the navigable water and the soils under them.
whether within the above the ebb and flow of the tide, shall be and remain public
highways; and being chiefly valuable for the public purposes of commerce, navigation,
and fishery, and for the improvement necessary to secure and promote those
purposes, shall not be granted away during the period of territorial government. (Pp.
48 and 49.)
The conclusions of the court are in part stated as follows:
Lands under tide waters are incapable of cultivation or improvement in the manner of
lands above high-water mark. They are of great value to the public for the purposes of
commerce, navigation, and fishery. Their improvement by individuals, when permitted,
is incidental or subordinate to the public use and right. Therefore the title and the
control of them are vested in the sovereign for the benefit of the whole people . . . .
Upon the acquisition of a territory by the United States, whether by cession from one
of the States, or by treaty with a foreign country, or by discovery and settlement, the
same title and dominion passed to the United States, for the benefit of whole people,
and in trust for the several States to be ultimately created out of the territory . . . .
The United States, while hold the country as a territory, having all the powers both of
national and municipal government, may grant, for appropriate purposes, titles or

rights in the soil below high-water mark of tide waters. But that have never done so in
general laws. (Pp. 57 and 58.)
In Mann vs. Tacoma Land Co., it was said by Mr. Justice Brewer (p. 284);
It is settled that the general legislation of Congress in respect to public lands does not
extend to tide lands .... It provided that the scrip might be located on the unoccupied
and unappropriated public lands. As said in Newhall vs. Sanger (92 U.S., 761, 763.)
"The words "public lands" are habitually used in our legislation to described such as
are subject to sale or other disposal under general laws."
In Illinois Central R.R. Company vs. Illinois (146 U.S., 387) Mr. Justice Field, delivering the
opinion of the court, said:
That the State holds the title tot he lands under the navigable waters of lake Michigan
within its limits, in the same manner that the State hold title to soils under tide water,
by the common law, we have already shown, and that title necessarily carries with it
control over the waters above them whenever the lands are subjected to use. But it is
a title different in character from that which the States holds in lands intended for sale.
It is different from the title which the United States hold in the public lands which are
open to preemption and sale. It is a title held in trust for the people of the States that
they may enjoy the navigation of the waters, carry on commerce over them, and have
liberty of fishing therein freed from the obstruction or interference of private parties.
The interest of the people in the navigation of the waters and in commerce over them
may be improved in many instances by the erection of wharves, docks, and piers
therein, for which purpose the State may grant parcels of the submerged lands; and
so long as their disposition is made for such purposes, no valid objections can be
made to the grants .... The control of the State for the purposes of the trust can never
be lost, except as to such parcels as are used in promoting the interests of the public
therein, or can be disposed of without any substantial impairment of the public interest
in the lands and waters remaining .... The State can no more abdicate its trust over
property in which the whole people are interested, like navigable waters and soils
under them, so as to leave them entirely under the use and control of private parties,
except in the instance of parcels mentioned for the improvement of the navigation and
use of the waters, or when parcels can be disposed of without impairment of the
public interest in what remains, that can abdicate its police powers in the
administration of government and the preservation of the peace .... So with trusts
connected with public property, or property of a special character, like lands under
navigable waters, they can not be placed entirely beyond the direction and control of
the State.
The ownership of the navigable waters of the harbor and the lands under them is a
subject of public concern to the whole people of the State. The trust with which they
are held, therefore, is governmental and can not be alienated, except in those
instances mentioned of parcels used in the improvement of the interest thus held, or
when parcels can be disposed of without detriment to the public interest in the lands
and waters remaining. . . . . (Pp. 452-455.)

Mr. Justice Fields quotes from an opinion by Mr. Justice Bradley, delivered in a case in the
Circuit Court, speaking of lands under water, as follows (p. 457):
Being subject to this trust, they were publici juris; in other words, they were held for
the use of the people at large. It is true that to utilize the fisheries, especially those of
shellfish, it was necessary to parcel them out to particular operators, and employ the
rent or consideration for the benefit of the whole people; but this did not alter the
character of the title. The land remained subject to all other public uses as before,
especially to those of navigation and commerce, which are always paramount to those
of public fisheries. It is also true that portions of the submerged shoals and flats, which
really interfered with navigation, and could better subserve the purposes of commerce
by being filled up and reclaimed, were disposed of to individuals for that purpose. But
neither did these dispositions of useless parts affect the character of the title to the
remainder.
These citations are thus given at length in order to make clear, first, the lands under the ebb and
flow of the tide of navigable waters are not in America understood to be included in the phrase
"public lands" in Acts of Congress of United States; nor, perforce, can they best understood in
laws of the Philippine Commission drawn immediately under the sanction of those Acts; and
second, that such lands are under existing Congressional legislation the subject of private
ownership, any occupation therefore be subordinate to the public purpose of navigation and
fishery. While as well in the original thirteen States in which there was never a national public
domain to which the land laws of Congress could apply as in States more recently created out of
that domain and which upon their formation became masters of their own land policy the local
laws govern riparian and littoral rights, subject only to Congressional control in matters of foreign
and interstate commerce ( U.S. vs. Mission Rock Co., 189 U. S., 391), yet, as to the
unappropriated public lands constituting the public domain the sole power of legislation is vested
in Congress, which are uniformly and consistently declined to assume the function of authorizing
or regulating private appropriation of such rights. Therefore, in the absence of specific
Congressional legislation, it is impossible for individuals to acquire title under the ten years
provision of Act No. 926 or even through a definite grants from the local legislature of lands
beneath navigable waters in which the tide ebbs and flows, except for wharf-age or other
purposes auxiliary to navigation or other public uses, unless in conformity with the preexisting
local law of the Archipelago.
The matter is dwelt is upon for the reason that the late Attorney-General in his very able brief
calls attention to the effect apprehended from the extension of the words "agricultural lands" as
used in Act No. 926 to include all public lands not forest or mineral in character, specifying two
acts of the Philippine Commission, the validity of which he fears might thereby be called into
question. The first of these, Act No. 1039, dedicates to use of the Navy Department of the United
States Government certain ground and buildings in Cavite, while the other, Act No. 1654, is a
fore-shore law regulating the control and disposal of filled Government lands. If the term
"agricultural lands" be held to include all government property not forest or mineral in character,
he suggests that these Acts, not being in conformity with the procedure of Act No. 926, as
approved by Congress, would be invalid, and moreover, that the Philippine Government would
be seriously tied up in the management and disposition of other lands owned by it.
Without finally passing on this question in relation to lands the owners of which are not before us
parties to this action, it is appropriate, in answering the argument of the law officer of the State,
to point out that this consequence appears to be avoided by the restricted sense given to the

words "public lands" or "public domain" in the Act of Congress and in Act No. 926, as
hereinbefore noted. Neither the property affected by Act No. 1039, already in use by the Navy
Department of the United States, nor the foreshore land mentioned in Act No. 1654, which is
under the ebb and flow of the tide, was, in so far as appears in the Acts before us, part of the
public domain to be disposed of under sections 13, 14, 15, and 16 of the Act of congress of July
1, 1902, and for that reason it is not included in any of the three subdivisions of "public lands" as
agricultural or otherwise, although it was part of the property acquired in the Philippine Islands
by the United States by the treaty of peace with Spain, which by section 12 of that Act was
"placed under the control of the Government of said Islands, to be administered for the benefit of
the inhabitants thereof." It would seem that the validity of the Cavite Act can not be successfully
assailed on this ground, while it may well be that The Fore-shore Act on examination will be
found to fall, as to its general purpose, within the authorization of section 11 of the Act of
Congress, whereby the duty is imposed upon the Island government of improving the harbors
and navigable waters in the interest of commerce.
As a consequence, it follows that The Public Land Act did not apply to the fisheries in the Mapa
case, if they are to be regarded as constituting, in a general sense, land under tidal waters. It
becomes necessary, therefore, to refer to the character of the lands.
Although argued at different times, five of these cases have been presented substantially
together, all being covered by one brief of the late Attorney-General in behalf of the Government
in which, with many interesting historical and graphic citations he describes that part of the
marginal seashore of the Philippine Islands known asmanglares, with their characteristic
vegetation. In brief, it may be said that they are mud flats, alternately washed and exposed by
the tide, in which grow various kindred plants which will not live except when watered by the sea,
extending their roots deep into the mud and casting their seeds, which also germinate there.
These constitute the mangrove flats of the tropics, which exist naturally, but which are also, to
some extent, cultivated by man for the sake of the combustible wood of the mangrove and like
trees as well as for the useful nipa palm propagated thereon. Although these flats are literally
tidal lands, yet we are of the opinion that they can not be so regarded in the sense in which that
term is used in the cases cited or in general American Jurisprudence. The waters flowing over
them are not available for purpose of navigation, and they "may be disposed of without
impairment of the public interest in what remains." Mr. Justice Bradley, in the passage quoted by
Mr. Justice Field, makes an exception of submerged shoals and flats. In Railroad
Company vs. Schurmeir (74 U.S., 272) , a Government patent of public land bordering upon a
river was held to include a parcel submerge at very high water and separated from the mainland
by a slough in which the water ran when ordinarily high. In Mobile vs. Hallett (41 U.S., 260), at
page 266. Mr. Justice Catron remarked in his dissenting opinion:
. . . and that a mud flat, flowed by tide water, is the subject of grant by the Government
to an individual, I think can not well be doubted by anyone acquainted with the
southern country; when such valuable portions of it are mud flats, in the constant
course of reclamation.
In several of the older States along the Atlantic coast such flats, either by force of ordinance,
custom, judicial construction, or local laws are held to pass under private grants as appurtenant
to the uplands. (Winslow vs.Patten, 34 Maine, 25; Litchfield vs. Scituate, 135 Mass., 39;
People vs. New York and Staten Island Ferry Co., 68 N.Y., 71; Stevens vs. P.& N. Railroad, 5
Vroom, 34 N.J. Law, 532.) There is even stronger reason for excepting mud flats from the rule of
tide lands in these Islands, owing to the peculiarities of their configuration and to the nature of

the tropical growth thereon, and whatever may be action of the tide, we do not think that in the
Philippines such of the shoals covered by this vegetation, whether spontaneously or by
cultivation, as are not available for free navigation, or required for any other purpose of general
benefit, can be considered tidal land reserved for public use alone, under the governmental trust
for commerce and public fishery, but on the contrary, we regard them as public property,
susceptible of a sort of cultivation and of improvement, and as such, subject to occupation under
paragraph 6 of section 54 of the Land Law. Instances may hereafter arise of fisheries unduly
established in what are clearly navigable waters which would constitute a nuisance, and not be
the subject of prescription or of grant. A brief reference to the five cases under consideration in
this court, however, will serve to show that they all fairly fall within the benefits of the law. In the
Mapa case1 the property was far from the the sea, partly occupied as fish pond, as nipa land,
and as a salt pit. It does not appear whether it was connected with the sea by nature or by art, or
whether the tide ebbed or flowed upon it, or whether the salt was sufficient to impart to any
portion of it a mineral character. In the Santiago case2 there was a fishery about two thousand
yards from the sea, with which it communicated by a river, and a portion of the inclosure was
dedicated to growing the aquatic tree called bacawan. The fishery had been constructed by
man, upon land heretofore sown with this tree. In the Gutierrez case3 it was shown that the land
was partly highland, growing fruit trees, and partly lowland , converted by the occupant of the
upland into a fishery by this labor. In the Baello case,4 the river running to the sea was a hundred
meters away, the salt water therefrom reaching the lowland by means of an artificial canal cut by
the owner of the land when he gave up cultivating bacawan thereon, an made it into a fishery. In
the Montano case, although there was a considerable depth of water over the soil, yet before the
fishery was made, some thirty years before the trial, bacawan had been sown and propagated in
the mud by the owner who finally sold the entire cut when he built the dikes.
All these lots, in their original state, whether near the sea or at a distance from it inland, and
whether bare or washed by the tides, were not covered by waters practically navigable and were
filled, whether naturally or artificially, with vegetation sometimes cultivated and in common use
for fuel and for building purposes, and they were all adapted to fisheries or fish hatcheries by the
labor of man introducing or regulating the access of salt water thereto. It is obvious that that all
five cases are of the same general nature and that one rule must be applied to them all.
In this discussion of the meaning which the Congress of the United States attached to the
phrase "public lands" in the Philippine Bill, we have assumed that it was used in the same sense
as in other laws enacted by that body. If, however, it can be considered as employed with
reference to the peculiar conditions of the territory to which it was to be applied and to the local
law or usage prevailing therein, the result would not be different. In many of its general features
the Spanish law of public lands in the Philippines resembled the American. Government property
was of two kinds first, that of public use or service, said to be of public ownership, and
second, that of having a private character or use. (Civil Code, arts. 339 and 340.) Lands of the
first class, while they retain their public character are inalienable; those of the second are not.
By the royal decree of February 13, 1894, it was enacted that all "the land, soil, ground not
under cultivation, and forests in the Philippine Islands should be considered saleable crown
lands," which are not included in the four exceptions stated, among which were "those which
belonged to the forest zones which the State desires to hold for the Commonwealth." This
corresponds in the main to the American classification into Government property, public lands,
and forest reserve. Mineral lands are elsewhere defined. It is to be noted, however, that in the
two languages terms ordinarily equivalent are not in this relation employed in the same sense

and that lands de dominio publico signify quite a different thing from the arbitrary English
Phrases "public lands" or "public domain."
The Law of Waters of 1866, which was the latest Spanish Law of Waters extended to these
Islands, provides that private property can not be acquired in lands preserving the character of
public ownership (title 1, art. 1, par. 29), and among the lands declared of public ownership and
use by article 1 of chapter 1 of title 5 of the same law are:
The seashore. By shore is understood the land alternately covered and uncovered
by the sea in its tidal movement. Its interior, or land limit, is the point reached by the
highest and equinoctial tides. At those places not affected by tides, the land limit is the
highest point reached by sea water in ordinary storms or hurricanes. (Par. 3.)
So that under this legislation the same question also presented itself as to what constituted
seashore, which was of public use and trust and therefore not alienable. This question can not
be said to have been settled by official ruling at the time of the American occupation. From the
official records it appears that there were then pending for registration a great number of
possessory expedientes, twenty-two of which, made before April 17, 1895, were from the
Province of Pampanga alone, in which the land was described as manglares. Under the royal
decree of 1894 such manglares appear at the outset to have been registered and considered
alienable and numbers of them were conceded by adjustment, including considerable tracts in
the town of Sexmoan and Lubao in Pampanga. Claims having been made that on account of the
trees growing thereon they formed part of the forest reserve and also because, being covered
and uncovered by the tide, they were part of the shore, and in either case were inalienable, the
engineer in chief of the forestry district of the center of Luzon addressed, on January 7, 1893, a
communication to the inspector general de montes ( Forestry Department) in which he
expressed an opinion that as part of the shore they were not subject to private ownership and
asked for an early decision of the question. On November 26, 1893, the acting inspector-general
notified the chief of the district of the Visayas in Mindanao that his excellency, the governorgeneral, had that they ordered all action suspended on expedientes ofmanglar and nipa lands
and salt marshes until the questions involved in regard thereto should be determined. In this
condition the matter remained until the expiration of the Spanish sovereignty.
By article 14 of the Law of Waters the right of shore fishery was declared public, but by article 23
authority might be granted individuals to establish shore hatcheries for fish and shellfish, and by
article 15 salt-water ponds on private ground not communicating with the sea by water navigable
by boats were recognized as private property, while chapter 10 permitted and regulated the
draining of swamps and marshes, both of private and of public ownership.
Under this uncertain and somewhat unsatisfactory condition of the law the custom had grown up
of convertingmanglares and nipa lands into fisheries which became common feature of
settlements along the coast and at the time of the change of sovereignty constituted one of the
most productive industries of the Islands, the abrogation of which would destroy vested interests
and prove a public disaster. In our opinion it was the object of Congress not to work such a
result but, on the contrary, in furtherance of the purposes of the treaty of Paris, to recognize and
safeguard such property. Therefore, the judgment of the Court of Land Registration is affirmed,
without costs.

G.R. No. L-31271 April 29, 1974

ROMEO MARTINEZ and LEONOR SUAREZ, spouses, petitioners-appellants,
vs.
HON. COURT OF APPEALS, SECRETARY and UNDERSECRETARY OF PUBLIC WORKS &
COMMUNICATIONS, respondents-appellees.
Flores Macapagal, Ocampo and Balbastro for petitioners-appellants.
Office of the Solicitor General Felix Q. Antonio, Acting Assistant Solicitor General Dominador L.
Quiroz and Solicitor Concepcion T. Agapinan for respondents-appellees.

ESGUERRA, J.:p
Petition for review by certiorari of the judgment of the Court of Appeals dated November 17,
1969 in its CA-G.R. 27655-R which reverses the judgment of the Court of First Instance of
Pampanga in favor of petitioners-appellants against the Secretary and Undersecretary of Public
Works & Communications in the case instituted to annul the order of November 25, 1958 of
respondent Secretary of Public Works & Communications directing the removal by the
petitioners of the dikes they had constructed on Lot No. 15856 of the Register of Deeds of
Pampanga, which order was issued pursuant to the provisions of Republic Act No. 2056. The
dispositive portion of the judgment of reversal of the Court of Appeals reads as follows:
IN VIEW OF THE FOREGOING CONSIDERATIONS, the judgment
appealed from is hereby reversed, and another entered: [1] upholding the
validity of the decision reached by the respondent officials in the
administrative case; [2] dissolving the injunction issued by the Court below;
and [3] cancelling the registration of Lot No. 2, the disputed area, and
ordering its reconveyance to the public domain. No costs in this instance.
The background facts are stated by the Court of Appeals as follows:
The spouses Romeo Martinez and Leonor Suarez, now petitionersappellees, are the registered owners of two (2) parcels of land located in
Lubao, Pampanga, covered by transfer certificate of title No. 15856 of the
Register of Deeds of the said province. Both parcels of land are fishponds.
The property involved in the instant case is the second parcel mentioned in
the above-named transfer certificate of title.
The disputed property was originally owned by one Paulino Montemayor,
who secured a "titulo real" over it way back in 1883. After the death of
Paulino Montemayor the said property passed to his successors-in-interest,
Maria Montemayor and Donata Montemayor, who in turn, sold it, as well as
the first parcel, to a certain Potenciano Garcia.

Because Potenciano Garcia was prevented by the then municipal president

of Lubao, Pedro Beltran, from restoring the dikes constructed on the
contested property, the former, on June 22, 1914, filed Civil Case No. 1407
with the Court of First Instance against the said Pedro Beltran to restrain the
latter in his official capacity from molesting him in the possession of said
second parcel, and on even date, applied for a writ of preliminary injunction,
which was issued against said municipal president. The Court, by decision
promulgated June 12, 1916, declared permanent the preliminary injunction,
which, decision, on appeal, was affirmed by the Supreme Court on August
21, 1918. From June 22, 1914, the dikes around the property in question
remained closed until a portion thereof was again opened just before the
outbreak of the Pacific War.
On April 17, 1925. Potenciano Garcia applied for the registration of both
parcels of land in his name, and the Court of First Instance of Pampanga,
sitting as land registration court, granted the registration over and against
the opposition of the Attorney-General and the Director of Forestry.
Pursuant to the Court's decision, original certificate of title No. 14318,
covering said parcels 1 and 2 was issued to the spouses Potenciano Garcia
and Lorenza Sioson.
These parcels of land were subsequently bought by Emilio Cruz de Dios in
whose name transfer certificate of title No. 1421 was first issued on
November 9, 1925.
Thereafter, the ownership of these properties changed hands until
eventually they were acquired by the herein appellee spouses who hold
them by virtue of transfer certificate of title No. 15856.
To avoid any untoward incident, the disputants agreed to refer the matter to
the Committee on Rivers and Streams, by then composed of the Honorable
Pedro Tuason, at that time Secretary of Justice, as chairman, and the
Honorable Salvador Araneta and Vicente Orosa, Secretary of Agriculture
and National Resources and Secretary of Public Works and
Communications, respectively, as members. This committee thereafter
appointed a Sub-Committee to investigate the case and to conduct an
ocular inspection of the contested property, and on March 11, 1954, said
Sub-Committee submitted its report to the Committee on Rivers and
Streams to the effect that Parcel No. 2 of transfer certificate of title No.
15856 was not a public river but a private fishpond owned by the herein
spouses.
On July 7, 1954, the Committee on Rivers and Streams rendered its
decision the dispositive part of which reads:
"In view of the foregoing considerations, the spouses
Romeo Martinez and Leonor Suarez should be restored
to the exclusive possession, use and enjoyment of the
creek in question which forms part of their registered

property and the decision of the courts on the matter be

given full force and effect."
The municipal officials of Lubao, led by Acting Mayor Mariano Zagad,
apparently refused to recognize the above decision, because on September
1, 1954, the spouses Romeo Martinez and Leonor Suarez instituted Civil
Case No. 751 before the Court of First Instance of Pampanga against said
Mayor Zagad, praying that the latter be enjoined from molesting them in
their possession of their property and in the construction of the dikes
therein. The writ of preliminary injunction applied for was issued against the
respondent municipal Mayor, who immediately elevated the injunction suit
for review to the Supreme Court, which dismissed Mayor Zagad's petition
on September 7, 1953. With this dismissal order herein appellee spouses
proceeded to construct the dikes in the disputed parcel of land.
Some four (4) years later, and while Civil Case No. 751 was still pending the
Honorable Florencio Moreno, then Secretary of Public Works and
Communications, ordered another investigation of the said parcel of land,
directing the appellees herein to remove the dikes they had constructed, on
the strength of the authority vested in him by Republic Act No. 2056,
approved on June 13, 1958, entitled "An Act To Prohibit, Remove and/or
Demolish the Construction of Dams. Dikes, Or Any Other Walls In Public
Navigable Waters, Or Waterways and In Communal Fishing Grounds, To
Regulate Works in Such Waters or Waterways And In Communal Fishing
Grounds, And To Provide Penalties For Its Violation, And For Other
Purposes. 1 The said order which gave rise to the instant proceedings,
embodied a threat that the dikes would be demolished should the herein
appellees fail to comply therewith within thirty (30) days.
The spouses Martinez replied to the order by commencing on January 2,
1959 the present case, which was decided in their favor by the lower Court
in a decision dated August 10, 1959, the dispositive part of which reads:
"WHEREFORE, in view of the foregoing considerations,
the Court hereby declares the decision, Exhibit S,
rendered by the Undersecretary of Public Works and
Communications null and void; declares the preliminary
injunction, hereto for issued, permanent, and forever
enjoining both respondents from molesting the spouses
Romeo Martinez and Leonor Suarez in their
possession, use and enjoyment of their property
described in Plan Psu-9992 and referred to in their
petition."
"Without pronouncement as to costs."
"SO ORDERED."

As against this judgment respondent officials of the Department of Public

Works and Communications took the instant appeal, contending that the
lower Court erred:
1. In holding that then Senator Rogelio de la Rosa, complainant in the
administrative case, is not an interested party and his letter-complaint dated
August 15, 1958 did not confer jurisdiction upon the respondent
Undersecretary of Public Works and Communications to investigate the said
administrative case;
2. In holding that the duty to investigate encroachments upon public rivers
conferred upon the respondent Secretary under Republic Act No. 7056
cannot be lawfully delegated by him to his subordinates;
3. In holding that the investigation ordered by the respondent Secretary in
this case is illegal on the ground that the said respondent Secretary has
arrogated unto himself the power, which he does not possess, of reversing,
making nugatory, and setting aside the two lawful decisions of the Court
Exhibits K and I, and even annulling thereby, the one rendered by the
highest Tribunal of the land;
4. In not sustaining respondent's claim that petitioners have no cause of
action because the property in dispute is a public river and in holding that
the said claim has no basis in fact and in law;
5. In not passing upon and disposing of respondent's counterclaim;
6. In not sustaining respondent's claim that the petition should not have
been entertained on the ground that the petitioners have not exhausted
administrative remedies; and
7. In holding that the decision of the respondents is illegal on the ground
that it violates the principles that laws shall have no retroactive effect unless
the contrary is provided and in holding that the said Republic Act No. 2056
is unconstitutional on the ground that respondents' threat of prosecuting
petitioners under Section 3 thereof for acts done four years before its
enactment renders the said lawex post facto.
The Court of Appeals sustained the above-mentioned assignment of errors committed by the
Court of First Instance of Pampanga and, as previously stated, reversed the judgment of the
latter court. From this reversal this appeal by certiorari was taken, and before this Court,
petitioners-appellants assigned the following errors allegedly committed by the Court of Appeals:
1. THE COURT OF APPEALS ERRED IN DECLARING IN THE INSTANT
CASE THAT PARCEL NO. 2 OF TRANSFER CERTIFICATE OF TITLE NO.
15856 IS A PUBLIC RIVER AND ORDERING THE CANCELLATION OF ITS
REGISTRATION BECAUSE THIS CONSTITUTES A COLLATERAL

ATTACK ON A TORRENS TITLE IN VIOLATION OF THE LAW AND THE

WELL-SETTLED JURISPRUDENCE ON THE MATTER.
2. THE COURT OF APPEALS ERRED IN REOPENING AND RELITIGATING THE ISSUE AS TO WHETHER OR NOT LOT NO. 2 OF
TRANSFER CERTIFICATE OF TITLE NO. 15856 REGISTER OF DEEDS
OF PAMPANGA, IS A PUBLIC RIVER NOTWITHSTANDING THE FACT
THAT THIS ISSUE HAS BEEN LONG RESOLVED AND SETTLED BY THE
LAND REGISTRATION COURT OF PAMPANGA IN LAND REGISTRATION
PROCEEDING NO. 692 AND IS NOW RES JUDICATA.
3. THE COURT OF APPEALS ERRED IN ORDERING THE
CANCELLATION OF THE REGISTRATION OF LOT NO. 2 OF TRANSFER
CERTIFICATE OF TITLE NO. 15856 NOTWITHSTANDING THE FACT
THAT THE TORRENS TITLE COVERING IT HAS BEEN VESTED IN THE
PETITIONERS WHO ARE THE SEVENTH OF THE SUCCESSIVE
INNOCENT PURCHASERS THEREOF AND WHO IN PURCHASING THE
SAME RELIED ON THE PRINCIPLE THAT THE PERSONS DEALING
WITH REGISTERED LAND NEED NOT GO BEHIND THE REGISTER TO
DETERMINE THE CONDITION OF THE PROPERTY.
The 1st and 2nd assignment of errors, being closely related, will be taken up together.
The ruling of the Court of Appeals that Lot No. 2 covered by Transfer Certificate of Title No.
15856 of the petitioners-appellants is a public stream and that said title should be cancelled and
the river covered reverted to public domain, is assailed by the petitioners-appellants as being a
collateral attack on the indefeasibility of the torrens title originally issued in 1925 in favor of the
petitioners-appellants' predecessor-in-interest, Potenciano Garcia, which is violative of the rule
of res judicata. It is argued that as the decree of registration issued by the Land Registration
Court was not re-opened through a petition for review filed within one (1) year from the entry of
the decree of title, the certificate of title issued pursuant thereto in favor of the appellants for the
land covered thereby is no longer open to attack under Section 38 of the Land Registration Act
(Act 496) and the jurisprudence on the matter established by this Tribunal. Section 38 of the
Land Registration Act cited by appellants expressly makes a decree of registration, which
ordinarily makes the title absolute and indefeasible, subject to the exemption stated in Section
39 of the said Act among which are: "liens, claims or rights arising or existing under the laws or
Constitution of the United States or of the Philippine Islands which the statute of the Philippine
Islands cannot require to appear of record in the registry."
At the time of the enactment of Section 496, one right recognized or existing under the law is
that provided for in Article 339 of the old Civil Code which reads as follows:
Property of public ownership is:
1. That destined to the public use, such as roads, canals, rivers, torrents,
ports, and bridges constructed by the State, and banks shores, roadsteads,
and that of a similar character. (Par. 1)

The above-mentioned properties are parts of the public domain intended for public use, are
outside the commerce of men and, therefore, not subject to private appropriation. ( 3 Manresa,
6th ed. 101-104.)
In Ledesma v. Municipality of Iloilo, 49 Phil. 769, this Court held:
A simple possession of a certificate of title under the Torrens system does
not necessarily make the possessor a true owner of all the property
described therein. If a person obtains title under the Torrens system which
includes by mistake or oversight, lands which cannot be registered under
the Torrens system, he does not by virtue of said certificate alone become
the owner of the land illegally included.
In Mercado v. Municipal President of Macabebe, 59 Phil. 592, it was also said:
It is useless for the appellant now to allege that she has obtained certificate
of title No. 329 in her favor because the said certificate does not confer
upon her any right to the creek in question, inasmuch as the said creek,
being of the public domain, is included among the various exceptions
enumerated in Section 39 of Act 496 to which the said certificate is subject
by express provision of the law.
The same ruling was laid down in Director of Lands v. Roman Catholic Bishop of Zamboanga,
61 Phil. 644, as regards public plaza.
In Dizon, et al. v. Rodriguez, et al., G.R. No. L-20300-01 and G.R. No. L-20355-56, April 30,
1965, 20 SCRA 704, it was held that the incontestable and indefeasible character of a Torrens
certificate of title does not operate when the land covered thereby is not capable of registration.
It is, therefore, clear that the authorities cited by the appellants as to the conclusiveness and
incontestability of a Torrens certificate of title do not apply here. The Land Registration Court has
no jurisdiction over non-registerable properties, such as public navigable rivers which are parts
of the public domain, and cannot validly adjudge the registration of title in favor of a private
applicant. Hence, the judgment of the Court of First Instance of Pampanga as regards the Lot
No. 2 of Certificate of Title No. 15856 in the name of petitioners-appellants may be attacked at
any time, either directly or collaterally, by the State which is not bound by any prescriptive period
provided for by the Statute of Limitations (Article 1108, par. 4, new Civil Code). The right of
reversion or reconveyance to the State of the public properties fraudulently registered and which
are not capable of private appropriation or private acquisition does not prescribe. (Republic v.
Ramona Ruiz, et al., G.R. No. L-23712, April 29, 1968, 23 SCRA 348; Republic v. Ramos, G.R.
No.
L-15484, January 31, 1963, 7 SCRA 47.)
When it comes to registered properties, the jurisdiction of the Secretary of Public Works &
Communications under Republic Act 2056 to order the removal or obstruction to navigation
along a public and navigable creek or river included therein, has been definitely settled and is no
longer open to question (Lovina v. Moreno, G.R. No L-17821, November 29, 1963, 9 SCRA 557;

Taleon v. Secretary of Public Works & Communications G.R. No. L-24281, May 16, 1961, 20
SCRA 69, 74).
The evidence submitted before the trial court which was passed upon by the respondent Court
of Appeals shows that Lot No. 2 (Plan Psu 992) of Transfer Certificate of Title No. 15856, is a
river of the public domain. The technical description of both Lots Nos. 1 and 2 appearing in
Original Certificate of Title No. 14318 of the Register of Deeds of Pampanga, from which the
present Transfer Certificate of Title No. 15856 was derived, confirms the fact that Lot No. 2
embraced in said title is bounded practically on all sides by rivers. As held by the Court of First
Instance of Pampanga in Civil Case No. 1247 for injunction filed by the petitioners'
predecessors-in-interest against the Municipal Mayor of Lubao and decided in 1916 (Exh. "L"),
Lot No. 2 is a branch of the main river that has been covered with water since time immemorial
and, therefore, part of the public domain. This finding having been affirmed by the Supreme
Court, there is no longer any doubt that Lot No. 2 of Transfer Certificate of Title No. 15856 of
petitioners is a river which is not capable of private appropriation or acquisition by prescription.
(Palanca v. Com. of the Philippines, 69 Phil. 449; Meneses v. Com. of the Philippines, 69 Phil.
647). Consequently, appellants' title does not include said river.
II
As regards the 3rd assignment of error, there is no weight in the appellants' argument that, being
a purchaser for value and in good faith of Lot No. 2, the nullification of its registration would be
contrary to the law and to the applicable decisions of the Supreme Court as it would destroy the
stability of the title which is the core of the system of registration. Appellants cannot be deemed
purchasers for value and in good faith as in the deed of absolute conveyance executed in their
favor, the following appears:
6. Que la segunda parcela arriba descrita y mencionada esta actualmente
abierta, sin malecones y excluida de la primera parcela en virtud de la
Orden Administrative No. 103, tal como fue enmendada, del pasado
regimen o Gobierno.
7. Que los citados compradores Romeo Martinez y Leonor Suarez se
encargan de gestionar de las autoridades correspondientes para que la
citada segunda parcela pueda ser convertida de nuevo en pesqueria,
corriendo a cuenta y cargo de los mismos todos los gastos.
8. Que en el caso de que dichos compradores no pudiesen conseguir sus
propositos de convertir de nuevo en pesquera la citada segunda parcela,
los aqui vendedores no devolveran ninguna cantidad de dinero a los
referidos compradores; este es, no se disminuiriat el precio de esta venta.
(Exh. 13-a, p. 52, respondents record of exhibits)
These stipulations were accepted by the petitioners-appellants in the same conveyance in the
following terms:
Romeo Martinez y Leonor Suarez, mayores de edad, filipinos y residentes
en al Barrio de Julo Municipio de Malabon, Provincia de Rizal, por la

presente, declaran que estan enterados del contenido de este documento y

lo aceptan en los precisos terminos en que arriba uedan consignados. (Exh.
13-a, ibid)
Before purchasing a parcel of land, it cannot be contended that the appellants who were the
vendees did not know exactly the condition of the land that they were buying and the obstacles
or restrictions thereon that may be put up by the government in connection with their project of
converting Lot No. 2 in question into a fishpond. Nevertheless, they willfully and voluntarily
assumed the risks attendant to the sale of said lot. One who buys something with knowledge of
defect or lack of title in his vendor cannot claim that he acquired it in good faith (Leung Lee v.
Strong Machinery Co., et al., 37 Phil. 664).
The ruling that a purchaser of a registered property cannot go beyond the record to make
inquiries as to the legality of the title of the registered owner, but may rely on the registry to
determine if there is no lien or encumbrances over the same, cannot be availed of as against the
law and the accepted principle that rivers are parts of the public domain for public use and not
capable of private appropriation or acquisition by prescription.
FOR ALL THE FOREGOING, the judgment of the Court of Appeals appealed from is in
accordance with law, and the same is hereby affirmed with costs against the petitionersappellants.

G.R. No. 92013 July 25, 1990

SALVADOR H. LAUREL, petitioner,

vs.
RAMON GARCIA, as head of the Asset Privatization Trust, RAUL MANGLAPUS, as
Secretary of Foreign Affairs, and CATALINO MACARAIG, as Executive
Secretary, respondents.

The subject property in this case is one of the four (4) properties in Japan acquired by the
Philippine government under the Reparations Agreement entered into with Japan on May
9, 1956, the other lots being:

G.R. No. 92047 July 25, 1990

(1) The Nampeidai Property at 11-24 Nampeidai-machi, Shibuya-ku, Tokyo which has an
area of approximately 2,489.96 square meters, and is at present the site of the Philippine
Embassy Chancery;

DIONISIO S. OJEDA, petitioner,

vs.
EXECUTIVE SECRETARY MACARAIG, JR., ASSETS PRIVATIZATION TRUST CHAIRMAN
RAMON T. GARCIA, AMBASSADOR RAMON DEL ROSARIO, et al., as members of the
PRINCIPAL AND BIDDING COMMITTEES ON THE UTILIZATION/DISPOSITION PETITION
OF PHILIPPINE GOVERNMENT PROPERTIES IN JAPAN,respondents.

(2) The Kobe Commercial Property at 63 Naniwa-cho, Kobe, with an area of around 764.72
square meters and categorized as a commercial lot now being used as a warehouse and
parking lot for the consulate staff; and

Arturo M. Tolentino for petitioner in 92013.

The properties and the capital goods and services procured from the Japanese
government for national development projects are part of the indemnification to the
Filipino people for their losses in life and property and their suffering during World War II.

GUTIERREZ, JR., J.:

The Reparations Agreement provides that reparations valued at $550 million would be
payable in twenty (20) years in accordance with annual schedules of procurements to be
fixed by the Philippine and Japanese governments (Article 2, Reparations Agreement).
Rep. Act No. 1789, the Reparations Law, prescribes the national policy on procurement
and utilization of reparations and development loans. The procurements are divided into
those for use by the government sector and those for private parties in projects as the
then National Economic Council shall determine. Those intended for the private sector
shall be made available by sale to Filipino citizens or to one hundred (100%) percent
Filipino-owned entities in national development projects.

These are two petitions for prohibition seeking to enjoin respondents, their
representatives and agents from proceeding with the bidding for the sale of the 3,179
square meters of land at 306 Roppongi, 5-Chome Minato-ku Tokyo, Japan scheduled on
February 21, 1990. We granted the prayer for a temporary restraining order effective
February 20, 1990. One of the petitioners (in G.R. No. 92047) likewise prayes for a writ of
mandamus to compel the respondents to fully disclose to the public the basis of their
decision to push through with the sale of the Roppongi property inspire of strong public
opposition and to explain the proceedings which effectively prevent the participation of
Filipino citizens and entities in the bidding process.
The oral arguments in G.R. No. 92013, Laurel v. Garcia, et al. were heard by the Court on
March 13, 1990. After G.R. No. 92047, Ojeda v. Secretary Macaraig, et al. was filed, the
respondents were required to file a comment by the Court's resolution dated February 22,
1990. The two petitions were consolidated on March 27, 1990 when the memoranda of the
parties in the Laurel case were deliberated upon.
The Court could not act on these cases immediately because the respondents filed a
motion for an extension of thirty (30) days to file comment in G.R. No. 92047, followed by
a second motion for an extension of another thirty (30) days which we granted on May 8,
1990, a third motion for extension of time granted on May 24, 1990 and a fourth motion for
extension of time which we granted on June 5, 1990 but calling the attention of the
respondents to the length of time the petitions have been pending. After the comment
was filed, the petitioner in G.R. No. 92047 asked for thirty (30) days to file a reply. We
noted his motion and resolved to decide the two (2) cases.

(3) The Kobe Residential Property at 1-980-2 Obanoyama-cho, Shinohara, Nada-ku, Kobe,
a residential lot which is now vacant.

The Roppongi property was acquired from the Japanese government under the Second
Year Schedule and listed under the heading "Government Sector", through Reparations
Contract No. 300 dated June 27, 1958. The Roppongi property consists of the land and
building "for the Chancery of the Philippine Embassy" (Annex M-D to Memorandum for
Petitioner, p. 503). As intended, it became the site of the Philippine Embassy until the
latter was transferred to Nampeidai on July 22, 1976 when the Roppongi building needed
major repairs. Due to the failure of our government to provide necessary funds, the
Roppongi property has remained undeveloped since that time.
A proposal was presented to President Corazon C. Aquino by former Philippine
Ambassador to Japan, Carlos J. Valdez, to make the property the subject of a lease
agreement with a Japanese firm - Kajima Corporation which shall construct two (2)
buildings in Roppongi and one (1) building in Nampeidai and renovate the present
Philippine Chancery in Nampeidai. The consideration of the construction would be the
lease to the foreign corporation of one (1) of the buildings to be constructed in Roppongi
and the two (2) buildings in Nampeidai. The other building in Roppongi shall then be used
as the Philippine Embassy Chancery. At the end of the lease period, all the three leased

buildings shall be occupied and used by the Philippine government. No change of

ownership or title shall occur. (See Annex "B" to Reply to Comment) The Philippine
government retains the title all throughout the lease period and thereafter. However, the
government has not acted favorably on this proposal which is pending approval and
ratification between the parties. Instead, on August 11, 1986, President Aquino created a
committee to study the disposition/utilization of Philippine government properties in
Tokyo and Kobe, Japan through Administrative Order No. 3, followed by Administrative
Orders Numbered 3-A, B, C and D.
On July 25, 1987, the President issued Executive Order No. 296 entitling non-Filipino
citizens or entities to avail of separations' capital goods and services in the event of sale,
lease or disposition. The four properties in Japan including the Roppongi were
specifically mentioned in the first "Whereas" clause.
Amidst opposition by various sectors, the Executive branch of the government has been
pushing, with great vigor, its decision to sell the reparations properties starting with the
Roppongi lot. The property has twice been set for bidding at a minimum floor price of
$225 million. The first bidding was a failure since only one bidder qualified. The second
one, after postponements, has not yet materialized. The last scheduled bidding on
February 21, 1990 was restrained by his Court. Later, the rules on bidding were changed
such that the $225 million floor price became merely a suggested floor price.
The Court finds that each of the herein petitions raises distinct issues. The petitioner in
G.R. No. 92013 objects to the alienation of the Roppongi property to anyone while the
petitioner in G.R. No. 92047 adds as a principal objection the alleged unjustified bias of
the Philippine government in favor of selling the property to non-Filipino citizens and
entities. These petitions have been consolidated and are resolved at the same time for the
objective is the same - to stop the sale of the Roppongi property.

In G.R. No. 92013, petitioner Laurel asserts that the Roppongi property and the related
lots were acquired as part of the reparations from the Japanese government for
diplomatic and consular use by the Philippine government. Vice-President Laurel states
that the Roppongi property is classified as one of public dominion, and not of private
ownership under Article 420 of the Civil Code (See infra).
The petitioner submits that the Roppongi property comes under "property intended for
public service" in paragraph 2 of the above provision. He states that being one of public
dominion, no ownership by any one can attach to it, not even by the State. The Roppongi
and related properties were acquired for "sites for chancery, diplomatic, and consular
quarters, buildings and other improvements" (Second Year Reparations Schedule). The
petitioner states that they continue to be intended for a necessary service. They are held
by the State in anticipation of an opportune use. (Citing 3 Manresa 65-66). Hence, it
cannot be appropriated, is outside the commerce of man, or to put it in more simple
terms, it cannot be alienated nor be the subject matter of contracts (Citing Municipality of
Cavite v. Rojas, 30 Phil. 20 [1915]). Noting the non-use of the Roppongi property at the
moment, the petitioner avers that the same remains property of public dominion so long
as the government has not used it for other purposes nor adopted any measure
constituting a removal of its original purpose or use.
The respondents, for their part, refute the petitioner's contention by saying that the
subject property is not governed by our Civil Code but by the laws of Japan where the
property is located. They rely upon the rule of lex situs which is used in determining the
applicable law regarding the acquisition, transfer and devolution of the title to a property.
They also invoke Opinion No. 21, Series of 1988, dated January 27, 1988 of the Secretary
of Justice which used the lex situs in explaining the inapplicability of Philippine law
regarding a property situated in Japan.

Petitioner Dionisio Ojeda in G.R. No. 92047, apart from questioning the authority of the
government to alienate the Roppongi property assails the constitutionality of Executive
Order No. 296 in making the property available for sale to non-Filipino citizens and
entities. He also questions the bidding procedures of the Committee on the Utilization or
Disposition of Philippine Government Properties in Japan for being discriminatory
against Filipino citizens and Filipino-owned entities by denying them the right to be
informed about the bidding requirements.

The respondents add that even assuming for the sake of argument that the Civil Code is
applicable, the Roppongi property has ceased to become property of public dominion. It
has become patrimonial property because it has not been used for public service or for
diplomatic purposes for over thirteen (13) years now (Citing Article 422, Civil Code) and
because the intention by the Executive Department and the Congress to convert it to
private use has been manifested by overt acts, such as, among others: (1) the transfer of
the Philippine Embassy to Nampeidai (2) the issuance of administrative orders for the
possibility of alienating the four government properties in Japan; (3) the issuance of
Executive Order No. 296; (4) the enactment by the Congress of Rep. Act No. 6657 [the
Comprehensive Agrarian Reform Law] on June 10, 1988 which contains a provision
stating that funds may be taken from the sale of Philippine properties in foreign
countries; (5) the holding of the public bidding of the Roppongi property but which failed;
(6) the deferment by the Senate in Resolution No. 55 of the bidding to a future date; thus
an acknowledgment by the Senate of the government's intention to remove the Roppongi
property from the public service purpose; and (7) the resolution of this Court dismissing
the petition in Ojeda v. Bidding Committee, et al., G.R. No. 87478 which sought to enjoin
the second bidding of the Roppongi property scheduled on March 30, 1989.

II

III

The petitioner in G.R. No. 92013 raises the following issues:

(1) Can the Roppongi property and others of its kind be alienated by the Philippine
Government?; and
(2) Does the Chief Executive, her officers and agents, have the authority and jurisdiction,
to sell the Roppongi property?

In G.R. No. 94047, petitioner Ojeda once more asks this Court to rule on the
constitutionality of Executive Order No. 296. He had earlier filed a petition in G.R. No.
87478 which the Court dismissed on August 1, 1989. He now avers that the executive
order contravenes the constitutional mandate to conserve and develop the national
patrimony stated in the Preamble of the 1987 Constitution. It also allegedly violates:
(1) The reservation of the ownership and acquisition of alienable lands of the public
domain to Filipino citizens. (Sections 2 and 3, Article XII, Constitution; Sections 22 and 23
of Commonwealth Act 141).itc-asl
(2) The preference for Filipino citizens in the grant of rights, privileges and concessions
covering the national economy and patrimony (Section 10, Article VI, Constitution);

There can be no doubt that it is of public dominion unless it is convincingly shown that
the property has become patrimonial. This, the respondents have failed to do.
As property of public dominion, the Roppongi lot is outside the commerce of man. It
cannot be alienated. Its ownership is a special collective ownership for general use and
enjoyment, an application to the satisfaction of collective needs, and resides in the social
group. The purpose is not to serve the State as a juridical person, but the citizens; it is
intended for the common and public welfare and cannot be the object of appropration.
(Taken from 3 Manresa, 66-69; cited in Tolentino, Commentaries on the Civil Code of the
Philippines, 1963 Edition, Vol. II, p. 26).
The applicable provisions of the Civil Code are:

(3) The protection given to Filipino enterprises against unfair competition and trade
practices;

ART. 419. Property is either of public dominion or of private

ownership.

(4) The guarantee of the right of the people to information on all matters of public concern
(Section 7, Article III, Constitution);

ART. 420. The following things are property of public dominion

(5) The prohibition against the sale to non-Filipino citizens or entities not wholly owned
by Filipino citizens of capital goods received by the Philippines under the Reparations
Act (Sections 2 and 12 of Rep. Act No. 1789); and
(6) The declaration of the state policy of full public disclosure of all transactions involving
public interest (Section 28, Article III, Constitution).
Petitioner Ojeda warns that the use of public funds in the execution of an
unconstitutional executive order is a misapplication of public funds He states that since
the details of the bidding for the Roppongi property were never publicly disclosed until
February 15, 1990 (or a few days before the scheduled bidding), the bidding guidelines
are available only in Tokyo, and the accomplishment of requirements and the selection of
qualified bidders should be done in Tokyo, interested Filipino citizens or entities owned
by them did not have the chance to comply with Purchase Offer Requirements on the
Roppongi. Worse, the Roppongi shall be sold for a minimum price of $225 million from
which price capital gains tax under Japanese law of about 50 to 70% of the floor price
would still be deducted.
IV
The petitioners and respondents in both cases do not dispute the fact that the Roppongi
site and the three related properties were through reparations agreements, that these
were assigned to the government sector and that the Roppongi property itself was
specifically designated under the Reparations Agreement to house the Philippine
Embassy.
The nature of the Roppongi lot as property for public service is expressly spelled out. It is
dictated by the terms of the Reparations Agreement and the corresponding contract of
procurement which bind both the Philippine government and the Japanese government.

(1) Those intended for public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, banks shores
roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public use, and
are intended for some public service or for the development of the
national wealth.
ART. 421. All other property of the State, which is not of the character
stated in the preceding article, is patrimonial property.
The Roppongi property is correctly classified under paragraph 2 of Article 420 of the Civil
Code as property belonging to the State and intended for some public service.
Has the intention of the government regarding the use of the property been changed
because the lot has been Idle for some years? Has it become patrimonial?
The fact that the Roppongi site has not been used for a long time for actual Embassy
service does not automatically convert it to patrimonial property. Any such conversion
happens only if the property is withdrawn from public use (Cebu Oxygen and Acetylene
Co. v. Bercilles, 66 SCRA 481 [1975]). A property continues to be part of the public
domain, not available for private appropriation or ownership until there is a formal
declaration on the part of the government to withdraw it from being such (Ignacio v.
Director of Lands, 108 Phil. 335 [1960]).
The respondents enumerate various pronouncements by concerned public officials
insinuating a change of intention. We emphasize, however, that an abandonment of the
intention to use the Roppongi property for public service and to make it patrimonial
property under Article 422 of the Civil Code must be definite Abandonment cannot be

inferred from the non-use alone specially if the non-use was attributable not to the
government's own deliberate and indubitable will but to a lack of financial support to
repair and improve the property (See Heirs of Felino Santiago v. Lazaro, 166 SCRA 368
[1988]). Abandonment must be a certain and positive act based on correct legal premises.
A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not relinquishment of
the Roppongi property's original purpose. Even the failure by the government to repair
the building in Roppongi is not abandonment since as earlier stated, there simply was a
shortage of government funds. The recent Administrative Orders authorizing a study of
the status and conditions of government properties in Japan were merely directives for
investigation but did not in any way signify a clear intention to dispose of the properties.
Executive Order No. 296, though its title declares an "authority to sell", does not have a
provision in its text expressly authorizing the sale of the four properties procured from
Japan for the government sector. The executive order does not declare that the
properties lost their public character. It merely intends to make the properties available to
foreigners and not to Filipinos alone in case of a sale, lease or other disposition. It merely
eliminates the restriction under Rep. Act No. 1789 that reparations goods may be sold
only to Filipino citizens and one hundred (100%) percent Filipino-owned entities. The text
of Executive Order No. 296 provides:
Section 1. The provisions of Republic Act No. 1789, as amended, and
of other laws to the contrary notwithstanding, the above-mentioned
properties can be made available for sale, lease or any other manner
of disposition to non-Filipino citizens or to entities owned by nonFilipino citizens.
Executive Order No. 296 is based on the wrong premise or assumption that the Roppongi
and the three other properties were earlier converted into alienable real properties. As
earlier stated, Rep. Act No. 1789 differentiates the procurements for the government
sector and the private sector (Sections 2 and 12, Rep. Act No. 1789). Only the private
sector properties can be sold to end-users who must be Filipinos or entities owned by
Filipinos. It is this nationality provision which was amended by Executive Order No. 296.
Section 63 (c) of Rep. Act No. 6657 (the CARP Law) which provides as one of the sources
of funds for its implementation, the proceeds of the disposition of the properties of the
Government in foreign countries, did not withdraw the Roppongi property from being
classified as one of public dominion when it mentions Philippine properties abroad.
Section 63 (c) refers to properties which are alienable and not to those reserved for public
use or service. Rep Act No. 6657, therefore, does not authorize the Executive Department
to sell the Roppongi property. It merely enumerates possible sources of future funding to
augment (as and when needed) the Agrarian Reform Fund created under Executive Order
No. 299. Obviously any property outside of the commerce of man cannot be tapped as a
source of funds.
The respondents try to get around the public dominion character of the Roppongi
property by insisting that Japanese law and not our Civil Code should apply.

It is exceedingly strange why our top government officials, of all people, should be the
ones to insist that in the sale of extremely valuable government property, Japanese law
and not Philippine law should prevail. The Japanese law - its coverage and effects, when
enacted, and exceptions to its provision is not presented to the Court It is simply
asserted that the lex loci rei sitae or Japanese law should apply without stating what that
law provides. It is a ed on faith that Japanese law would allow the sale.
We see no reason why a conflict of law rule should apply when no conflict of law
situation exists. A conflict of law situation arises only when: (1) There is a dispute over
the title or ownership of an immovable, such that the capacity to take and transfer
immovables, the formalities of conveyance, the essential validity and effect of the
transfer, or the interpretation and effect of a conveyance, are to be determined (See
Salonga, Private International Law, 1981 ed., pp. 377-383); and (2) A foreign law on land
ownership and its conveyance is asserted to conflict with a domestic law on the same
matters. Hence, the need to determine which law should apply.
In the instant case, none of the above elements exists.
The issues are not concerned with validity of ownership or title. There is no question that
the property belongs to the Philippines. The issue is the authority of the respondent
officials to validly dispose of property belonging to the State. And the validity of the
procedures adopted to effect its sale. This is governed by Philippine Law. The rule of lex
situs does not apply.
The assertion that the opinion of the Secretary of Justice sheds light on the relevance of
the lex situsrule is misplaced. The opinion does not tackle the alienability of the real
properties procured through reparations nor the existence in what body of the authority
to sell them. In discussing who are capableof acquiring the lots, the Secretary merely
explains that it is the foreign law which should determine who can acquire the
properties so that the constitutional limitation on acquisition of lands of the public
domain to Filipino citizens and entities wholly owned by Filipinos is inapplicable. We see
no point in belaboring whether or not this opinion is correct. Why should we discuss who
can acquire the Roppongi lot when there is no showing that it can be sold?
The subsequent approval on October 4, 1988 by President Aquino of the recommendation
by the investigating committee to sell the Roppongi property was premature or, at the
very least, conditioned on a valid change in the public character of the Roppongi
property. Moreover, the approval does not have the force and effect of law since the
President already lost her legislative powers. The Congress had already convened for
more than a year.
Assuming for the sake of argument, however, that the Roppongi property is no longer of
public dominion, there is another obstacle to its sale by the respondents.
There is no law authorizing its conveyance.
Section 79 (f) of the Revised Administrative Code of 1917 provides

Section 79 (f ) Conveyances and contracts to which the Government is

a party. In cases in which the Government of the Republic of the
Philippines is a party to any deed or other instrument conveying the
title to real estate or to any other property the value of which is in
excess of one hundred thousand pesos, the respective Department
Secretary shall prepare the necessary papers which, together with the
proper recommendations, shall be submitted to the Congress of the
Philippines for approval by the same. Such deed, instrument, or
contract shall be executed and signed by the President of the
Philippines on behalf of the Government of the Philippines unless the
Government of the Philippines unless the authority therefor be
expressly vested by law in another officer. (Emphasis supplied)
The requirement has been retained in Section 48, Book I of the Administrative Code of
1987 (Executive Order No. 292).
SEC. 48. Official Authorized to Convey Real Property. Whenever real
property of the Government is authorized by law to be conveyed, the
deed of conveyance shall be executed in behalf of the government by
the following:
(1) For property belonging to and titled in the name of the Republic of
the Philippines, by the President, unless the authority therefor is
expressly vested by law in another officer.
(2) For property belonging to the Republic of the Philippines but titled
in the name of any political subdivision or of any corporate agency or
instrumentality, by the executive head of the agency or instrumentality.
(Emphasis supplied)
It is not for the President to convey valuable real property of the government on his or her
own sole will. Any such conveyance must be authorized and approved by a law enacted
by the Congress. It requires executive and legislative concurrence.
Resolution No. 55 of the Senate dated June 8, 1989, asking for the deferment of the sale
of the Roppongi property does not withdraw the property from public domain much less
authorize its sale. It is a mere resolution; it is not a formal declaration abandoning the
public character of the Roppongi property. In fact, the Senate Committee on Foreign
Relations is conducting hearings on Senate Resolution No. 734 which raises serious
policy considerations and calls for a fact-finding investigation of the circumstances
behind the decision to sell the Philippine government properties in Japan.
The resolution of this Court in Ojeda v. Bidding Committee, et al., supra, did not pass
upon the constitutionality of Executive Order No. 296. Contrary to respondents' assertion,
we did not uphold the authority of the President to sell the Roppongi property. The Court
stated that the constitutionality of the executive order was not the real issue and that
resolving the constitutional question was "neither necessary nor finally determinative of
the case." The Court noted that "[W]hat petitioner ultimately questions is the use of the
proceeds of the disposition of the Roppongi property." In emphasizing that "the decision

of the Executive to dispose of the Roppongi property to finance the CARP ... cannot be
questioned" in view of Section 63 (c) of Rep. Act No. 6657, the Court did not acknowledge
the fact that the property became alienable nor did it indicate that the President was
authorized to dispose of the Roppongi property. The resolution should be read to mean
that in case the Roppongi property is re-classified to be patrimonial and alienable by
authority of law, the proceeds of a sale may be used for national economic development
projects including the CARP.
Moreover, the sale in 1989 did not materialize. The petitions before us question the
proposed 1990 sale of the Roppongi property. We are resolving the issues raised in these
petitions, not the issues raised in 1989.
Having declared a need for a law or formal declaration to withdraw the Roppongi property
from public domain to make it alienable and a need for legislative authority to allow the
sale of the property, we see no compelling reason to tackle the constitutional issues
raised by petitioner Ojeda.
The Court does not ordinarily pass upon constitutional questions unless these questions
are properly raised in appropriate cases and their resolution is necessary for the
determination of the case (People v. Vera, 65 Phil. 56 [1937]). The Court will not pass upon
a constitutional question although properly presented by the record if the case can be
disposed of on some other ground such as the application of a statute or general law
(Siler v. Louisville and Nashville R. Co., 213 U.S. 175, [1909], Railroad Commission v.
Pullman Co., 312 U.S. 496 [1941]).
The petitioner in G.R. No. 92013 states why the Roppongi property should not be sold:
The Roppongi property is not just like any piece of property. It was
given to the Filipino people in reparation for the lives and blood of
Filipinos who died and suffered during the Japanese military
occupation, for the suffering of widows and orphans who lost their
loved ones and kindred, for the homes and other properties lost by
countless Filipinos during the war. The Tokyo properties are a
monument to the bravery and sacrifice of the Filipino people in the
face of an invader; like the monuments of Rizal, Quezon, and other
Filipino heroes, we do not expect economic or financial benefits from
them. But who would think of selling these monuments? Filipino
honor and national dignity dictate that we keep our properties in Japan
as memorials to the countless Filipinos who died and suffered. Even if
we should become paupers we should not think of selling them. For it
would be as if we sold the lives and blood and tears of our
countrymen. (Rollo- G.R. No. 92013, p.147)
The petitioner in G.R. No. 92047 also states:
Roppongi is no ordinary property. It is one ceded by the Japanese
government in atonement for its past belligerence for the valiant
sacrifice of life and limb and for deaths, physical dislocation and

economic devastation the whole Filipino people endured in World War

II.
It is for what it stands for, and for what it could never bring back to life,
that its significance today remains undimmed, inspire of the lapse of
45 years since the war ended, inspire of the passage of 32 years since
the property passed on to the Philippine government.
Roppongi is a reminder that cannot should not be dissipated ...
(Rollo-92047, p. 9)
It is indeed true that the Roppongi property is valuable not so much because of the
inflated prices fetched by real property in Tokyo but more so because of its symbolic
value to all Filipinos veterans and civilians alike. Whether or not the Roppongi and
related properties will eventually be sold is a policy determination where both the
President and Congress must concur. Considering the properties' importance and value,
the laws on conversion and disposition of property of public dominion must be faithfully
followed.
WHEREFORE, IN VIEW OF THE FOREGOING, the petitions are GRANTED. A writ of
prohibition is issued enjoining the respondents from proceeding with the sale of the
Roppongi property in Tokyo, Japan. The February 20, 1990 Temporary Restraining Order
is made PERMANENT.
SO ORDERED.

G.R. No. L-66807 January 26, 1989

REPUBLIC OF THE PHILIPPINES, represented by the DIRECTOR OF LANDS, petitioner,
vs.
MELITONA ALAGAD, SPOUSES CARMEN ALAGAD AND ESPIRIDION KOLIMLIM, JUSTO
ALAGAD, CARLOS ALAGAD, SPOUSES LIBRADA ALAGAD AND EMERSON ABANO,
DEMETRIO ALAGAD, ANTONIO ALAGAD, REGISTER OF DEEDS OF LAGUNA, and the
INTERMEDIATE APPELLATE COURT (Fourth Civil Cases Division), respondents.
The Solicitor General for petitioner.
Alberto, Salazar & Associates for private respondents.

SARMIENTO, J.:
The Republic appeals from the decision of the Court of Appeals 1 affirming two orders of the
defunct Court of First Instance of Laguna 2 dismissing its petition for "annulment of title and
reversion. 3 The facts appear in the decision appealed from:
On or about October 11, 1951, defendants filed an application for
registration of their title over a parcel of land situated at Linga, Pila, Laguna,
with an area of 8.1263 hectares, reflected in survey plan Psu-116971, which
was amended after the land was divided into two parcels, namely, Lot 1 with
an area of 5.2476 hectares and Lot 2 with an area of 2.8421 hectares,
reflected in survey plan Psu-226971, amd. 2.
The Republic opposed the application on the stereo-typed ground that
applicants and their predecessors have not been in possession of the land
openly, continuously, publicly and adversely under a bona fide claim of
ownership since July 26, 1894 and the land has not ceased to be a part of
the public domain. It appears that barrio folk also opposed the application.
(LRC Case No. 189. G.L.R.O. Rec. No. 4922 of the Court of First Instance
of Laguna).
By virtue of a final judgment in said case, promulgated January 16, 1956,
supplemented by orders issued on March 21, 1956 and August 13, 1956,
defendants were declared owners of Lot 1 and the remaining portion, or Lot
2, was declared public land. Decree No. N-51479 was entered and Original
Certificate of Title No. 0- 40 1, dated October 18, 1956, was issued in the
names of defendants.
In August, 1966, Civil Case No. 52 of the Municipal Court of Pila, Laguna,
was filed by defendants to evict the barrio folk occupying portions of Lot 1.
On August 8, 1968, judgment was rendered in the eviction case ordering the
defendants therein to return possession of the premises to herein
defendants, as plaintiffs therein. The defendants therein did not appeal.

The foregoing anterior proceedings triggered the filing of the instant case.
On October 6, 1970, as prayed for in the complaint, a writ of preliminary
injunction was issued enjoining the Provincial Sheriff of Laguna or his
deputies from enforcing the writ of execution issued in Civil Case No. 52,
and the defendants from selling, mortgaging, disposing or otherwise
entering into any transaction affecting the area.
This case was set for pre-trial on July 6, 1971. Despite notice of the pre-trial, Atty. Alejandro A.
Ponferada, Special Attorney, Bureau of Lands, representing plaintiff Republic, did not appear. On
July 16, 1971, the court a quodismissed the complaint. The Republic filed a motion for
reconsideration, was set for hearing, and finally denied by the court a quo, hence, this appeal.
Plaintiff filed its record on appeal on March 13, 1972. It appears that the appeal was dismissed
by this Court for failure to show in the record on appeal that the appeal was perfected on time.
Plaintiff went to the Supreme Court on a petition for review on the action of this Court. On
November 19, 1982, the Supreme Court set aside the dismissal resolution of this Court and
ordered Us to reinstate and give due course to plaintiffs appeal. 4
In commencing proceedings below, the Republic claims that the decree and title [rendered and
issued in LRC Case No. 189, G.L.R.O. Rec. No. L-4922] insofar as the 1.42 hectare
northwestern portion on end of Lot 1, Psu-116971, Amd. 2, is concerned, are void ab initio, 5 for
the following reasons:
(a) That said l.42 hectare northwestern portion or end of Lot l, Psu-116971,
Amd. 2, like the adjoining Lot 2 of the same survey plan containing 2.8421
hectares, had since time immemorial, been foreshore land reached and
covered by the waters of the Laguna de Bay (Republic vs. Ayala y Cia, L20950, May 31, 1965; Antonio Dizon, et al., vs. Juan de G. Rodriguez, et al.,
L-20355- 56, April 30, 1965);
(b) That moreover said 1.42 hectare portion is actually now the site of Barrio
Aplaya, formerly a sitio of Linga, Pila, Laguna, having been occupied by the
barrio people since the American occupation of the country in the early
1900's where they established their houses;
(c) That the barrio people of Aplaya thru the years since the early 1900's
have filled up and elevated the land to its present condition of being some
feet above the level of the adjoining Lot 2 of plan Psu-116971 and the rest
of Lot 1 of the same survey plan so much so that this barrio site of Aplaya
where there are now sixty-eight (68) houses occupied by more than one
hundred (100) families is no longer reached and covered by the waters of
the Laguna de Bay; and
(d) That were it not for the fillings made by the barrio people, the land in
question would not have been fit for human habitation, so much so that
defendants and their predecessors-in-interest could not have acquired an
imperfect title to the property which could be judicially confirmed in a
registration case, as in fact said defendants and their predecessors-in-

interest have never been in actual possession of the land in question, the
actual occupants thereof being the barrio people of Aplaya; 6

land registration court, since the said court had no jurisdiction over the
subject matter. And if there was no such jurisdiction, then the principle of res
judicata does not apply. For it is a well-settled rule that for a prior judgment
to constitute a bar to a subsequent case, the following requisites must
concur; (1) it must be a final judgment; (2) it must have been rendered by a
court having jurisdiction over the subject matter and over the parties; (3) it
must be a judgment on the merits; and (4) there must be, between the first
and second actions, identity of parties, identity of subject matter and identity
of cause of action (Municipality of Daet vs. CA, 93 SCRA 503; Mendoza vs.
Arrieta, et al., 91 SCRA 113)... 12

In sustaining the trial court, the Court of Appeals held that under Section 20, of Rule 20, of the
Rules of Court, dismissal was proper upon failure of the Republic to appear for pre-trial. It
likewise ruled that the judgment, dated January 16, 1956, in the said LRC No. 189 has long
become final, titles to the properties had been issued (in favor of the private respondents), and
that res judicata, consequently, was a bar.
In its petition, the Republic assails the decision insofar as it sustained the lower court: (1) in
dismissing the petition for failure of the Republic to appear for pre-trial; and (2) in holding
that res judicata is an obstacle to the suit.
I.
With respect to the first question, we hold that the Court of Appeals has been guilty of grave
abuse of discretion. It is well-established that the State cannot be bound by, or estopped from,
the mistakes or negligent acts of its official or agents, 7 much more, non-suited as a result
thereof.
This is so because:
... [T]he state as a persona in law is the judicial entity, which is the source of
any asserted right to ownership in land under the basic doctrine embodied
in the 1935 Constitution as well as the present charter. It is charged
moreover with the conservation of such patrimony. There is need therefore
of the most rigorous scrutiny before private claims to portions thereof are
judicially accorded recognition, especially so where the matter is sought to
be raked up anew after almost fifty years. Such primordial consideration, not
the apparent carelessness, much less the acquiescense of public officials, is
the controlling norm . . . 8
The cases of Ramos v. Centra l Bank of the Philippines 9 and Nilo v. Romero, 10 cited by the
Court of Appeals in support of its decision, are not applicable. In Ramos, we applied estoppel
upon finding of bad faith on the part of the State (the Central Bank) in deliberately reneging on
its promises. In Nilo, we denied efforts to impugn the jurisdiction of the court on the ground that
the defendant had been "erroneously' represented in the complaint by the City Attorney when it
should have been the City Mayor, on a holding that the City Attorney, in any event, could have
ably defended the City (Davao City). In both cases, it is seen that the acts that gave rise to
estoppel were voluntary and intentional in character, in which cases, it could not be said that the
Government had been prejudiced by some negligent act or omission.

In the case at bar, if the parcel registered in the names of the private respondents were
foreshore land, the land registration court could not have validly awarded title thereto. It would
have been without the authority to do so. The fact that the Bureau of Lands had failed to appeal
from the decree of registration could not have validated the court's decision, rendered without
jurisdiction.
II.
"Property, according to the Civil Code, is either of public dominion or of private
ownership ." 13 Property is of public dominion if it is:
(1) ... intended for public use, such as roads, canals, rivers, torrents, ports
and bridges constructed by the State, banks, shores, roadsteads and others
of similar character; 14 or if it:
(2) . . . belong[s] to the State, without being for public use, and are intended
for some public service or for the development of the national wealth. 15
All other property of the State, it is provided further, which is not of the
character mentioned in ... article [4201, is patrimonial property, 16 meaning to
say, property 'open to disposition 17 by the Government, or otherwise,
property pertaining to the national domain, or public lands. 18 Property of the
public dominion, on the other hand, refers to things held by the State by
regalian right. They are things res publicae in nature and hence, incapable
of private appropriation. Thus, under the present Constitution, [w]ith the
exception of agricultural lands, all other natural resources shall not be
alienated.' 19
Specifically:
ART. 502. The following are of public dominion:

There is no merit either, in claims that res judicata is an impediment to reversion of property.
In Republic v. Court of Appeals, 11 this Court stated:
... [a] certificate of title may be ordered cancelled (Republic v Animas, et
al., . supra), and the cancellation may be pursued through an ordinary
action therefor. This action cannot be barred by the prior judgment of the

(1) Rivers and their natural beds;

(2) Continuous or intermittent waters of springs and
brooks running in their natural beds and the beds
themselves;

(3) Waters rising continuously or intermittently on lands

of public dominion;
(4) Lakes and lagoons formed by Nature on public
lands, and their beds;
(5) Rain waters running through ravines or sand beds,
which are also of public dominion;
(6) Subterranean waters on public lands;
(7) Waters found within the zone of operation of public
works, even if constructed by a contractor;
(8) Waters rising continuously or intermittently on lands
belonging to private persons, to the State, to a
province, or to a city or municipality from the moment
they leave such lands;
(9) The waste waters of fountains, sewers and public
establishments. 20
So also is it ordained by the Spanish Law of Waters of August 3, 1866:
Art. 44. Natural ponds and lakes existing upon public lands and fed by
public waters, belong to the public domain.
Lakes, ponds, and pools existing upon the lands of private individuals, or the State or provinces,
belong to the respective owners of such lands, and those situated upon lands of communal use
belong to their respective pueblos.21
Assuming, therefore, for purposes of this petition, that the lands subject of the Republic's
reversion efforts are foreshore in nature, the Republic has legitimate reason to demand
reconveyance. In that case, res judicata or estoppel is no defense. 22
Of course, whether or not the properties in question are, indeed, foreshore lands is the core of
controversy. According to the trial court, the aforementioned parcel of land is a portion of the
public domain belonging to the Republic of the Philippines, 23 and hence, available disposition
and registration. As we have pointed out, the Government holds otherwise, and that as
foreshore laud, it is not registerable.
The question, so it follows, is one of fact: Is the parcel foreshore or is it part and parcel of the
public domain?
Laguna de Bay has long been recognized as a lake . 24 Thus:

Laguna de Bay is a body of water formed in depressions of the earth; it contains fresh water
coming from rivers and brooks or springs, and is connected with Manila Bay by the Pasig River.
According to the definition just quoted, Laguna de Bay is a lake. 25
And, "[i]nasmuch as Laguna de Bay is a lake, so Colegio de San Jose further tells us, "we must
resort to the legal provisions governing the ownership and use of lakes and their beds and
shores, in order to determine the character and ownership of the parcels of land in
question. 26 The recourse to legal provisions is necessary, for under Article 74 of the Law of
Waters, [T]he natural bed or basin of lakes ... is the ground covered by their waters when at their
highest ordinary depth. 27 and in which case, it forms part of the national dominion. When
Laguna de Bay's waters are at their highest ordinary depth has been defined as:
... the highest depth of the waters of Laguna de Bay during the dry season,
such depth being the regular, common, natural, which occurs always or
most of the time during the year . . . 28
Otherwise, where the rise in water level is due to the extraordinary action of nature, rainfall for
instance, the portions inundated thereby are not considered part of the bed or basin of the body
of water in question. It cannot therefore be said to be foreshore land but land outside of the
public dominion, and land capable of registration as private property.
A foreshore land, on the other hand, has been defined as follows:
. . . that part of (the land) which is between high and low water and left dry
by the flux and reflux of the tides... 29
The strip of land that lies between the high and low water marks and that is
alternatively wet and dry according to the flow of the tide. 30
If the submergence, however, of the land is due to precipitation, it does not become foreshore,
despite its proximity to the waters.
The case, then, has to be decided alongside these principles and regretfully, the Court cannot
make a ruling, in the first place, because it is not a trier of facts, and in the second, it is in
possession of no evidence to assist it in arriving at a conclusive disposition 31 We therefore
remand the case to the court a quo to determine whether or not the property subject of
controversy is foreshore. We, consequently, reverse both the Court of Appeals and the trial court
and reinstate the Republic's complaint.
WHEREFORE, this case is hereby REMANDED to the trial court for further proceedings.

G.R. No. L-39473 April 30, 1979

REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
HON. COURT OF APPEALS and ISABEL LASTIMADO, respondents.
Eduardo G. Makalintal for private respondent.

MELENCIO-HERRERA, J.:
This is a Petition for Review (Appeal) by certiorari filed by the Republic of the Philippines from
the Decision of the Court of Appeals promulgated on September 30, 1974 in CA-G.R. No. Sp01504 denying the State's Petition for certiorari and Mandamus.
Briefly, the facts of the case are as follows:
Private respondent, Isabel Lastimado, filed on September 11, 1967, in the Court of First Instance
of Bataan, Branch I, a Petition for the reopening of cadastral proceedings over a portion of Lot
No. 626 of the Mariveles Cadastre, consisting of 971.0569 hectares, pursuant to Republic Act
No. 931, as amended by Republic Act No. 2061, docketed as Cad. Case No. 19, LRC Cad. Rec.
No. 1097. In the absence of any opposition, whether from the Government or from private
individuals, private respondent was allowed to present her evidence ex-parte. On October 14,
1967, the trial Court rendered a Decision granting the Petition and adjudicating the land in favor
of private respondent. The trial Court issued an order for the issuance of a decree of registration
on November 20, 1967, and on November 21, 1967, the Land Registration Commission issued
Decree No. N-117573 in favor of private respondent. Eventually, Original Certificate of Title No.
N-144 was also issued in her favor. Private respondent thereafter subdivided the land into ten
lots, and the corresponding titles. Transfer Certificates of Title Nos. 18905 to 18914 inclusive,
were issued by the Register of Deeds.
On June 3, 1968, or within one year from the entry of the decree of registration, petitioner filed a
Petition for Review pursuant to Sec. 38, Act No. 496, on the ground of fraud alleging that during
the period of alleged adverse possession by private respondent, said parcel of land was part of
the U.S. Military Reservation in Bataan. which was formally turned over to the Republic of the
Philippines only on December 22, 1965, and that the same is inside the public forest of
Mariveles, Bataan and, therefore, not subject to disposition or acquisition under the Public Land
Law. Respondent field an Opposition thereto, which was considered by the trial Court, as a
Motion to Dismiss, and on December 20,1968, said Court (Judge Tito V. Tizon, presiding) issued
an Order dismissing the Petition for Review mainly on the ground that the Solicitor General had
failed to file opposition to the original Petition for reopening of the cadastral proceedings and
was, therefore, estopped from questioning the decree of registration ordered issued therein. On
January 28, 1969, petitioner moved for reconsideration, which was denied by the trial Court in its
Order dated May 20, 1969, for lack of merit.
Petitioner seasonably filed a Notice of Appeal and a Record on Appeal, which was objected to
by private respondent. On July 15, 1972, or three years later, * the trial Court (Judge Abraham P.

Vera, presiding) refused to give due course to the appeal. Petitioner filed a Motion for
Reconsideration but the trial Court denied it in its Order of October 14, 1972 on the ground that
the proper remedy of petitioner was a certiorari petition, not an ordinary appeal, and that the
Order sought to be appealed from had long become final and executory as petitioner's Motion
for Reconsideration was pro-forma and did not suspend the running of the reglementary period
of appeal.
On November 9, 1972, petitioner filed a Petition for certiorari and mandamus with the Court of
Appeals claiming that the trial Court gravely abused its discretion, amounting to lack of
jurisdiction when, without the benefit of hearing, it summarily dismissed the Petition for Review;
and since said Petition raised certain issues of fact which cannot be decided except in a trial on
the merits, the dismissal of the Petition on the basis of private respondent's Opposition,
considered as a Motion to Dismiss, constituted a denial of due process of law. Petitioner then
prayed that the Order of the trial Court, dated December 20, 1968 dismissing the Petition for
Review, be declared null and void, and that said trial Court be directed to give due course to the
Petition for Review; or, in the alternative, to give due course to petitioner's appeal.
On September 30, 1974, the Court of Appeals upheld the trial Court's dismissal of the Petition
for Review stating:
... We cannot find any allegation in the petition for review which shows that
private respondent had committed fraud against petitioner. Its
representations and officials were duly notified of private respondent's
petition for reopening and registration of title in her name. In said petition,
the technical descriptions of the portion of Lot No. 626 of the Mariveles
(Bataan) Cadastre, subject-matter of the petition were expressly stated, the
boundaries, specifically delineated. The alleged ground that the land forms
part of a forest land exists at the time petitioner was duly notified of said
petition. Failure to file opposition is in effect, an admission that the petition is
actually not part of a forest land. Indubitably, therefore, no justifiable reason
exists for the annulment of the Order, dated December 20, 1968 (Annex DPetition) of the lower court dismissing herein petitioner's petition for review
of the decree issued in favor of private respondent Lastimado. 1
The Court of Appeals then disposed as follows:
WHEREFORE, finding that the respondent Judge has not committed any
grave abuse of discretion amounting to lack of jurisdiction in the issuance of
an Order, dated December 20, 1968 (Annex D-Petition) dismissing herein
petitioner's petition for review, the present petition for review is hereby
denied.
The issuance of the writ of mandamus as prayed for in the petition is no
longer necessary as this Court, in the exercise of its appellate jurisdiction
and authority to supervise orderly administration of justice, has already
resolved on the merits the question whether or not the dismissal of the
petition for review had been done with grave abuse of discretion amounting
to lack of jurisdiction. 2

From this Decision, petitioner filed the present Petition for Review (Appeal) by certiorari
assigning the following errors to the Court of Appeals and to the trial Court:
1. The Lower Court as well as the Court of Appeals erred in finding that
there can be possession, even for the purpose of claiming title, of land
which at the time of possession is subject to a military reservation.
2. The Lower Court as well as the Court of Appeals erred in finding that
such land which is subject to a government reservation, may appropriately
be the subject of cadastral proceedings, and hence. also of a petition to
reopen cadastral proceedings.
3. The Lower Court as well as the Court of Appeals erred in finding that a
parcel of land which is part of the public forest is susceptible of occupation
and registration in favor of private individual.
4. The Lower Court as well as the Court of Appeals erred in not finding that
the Republic of the Philippines is not estopped from questioning the decree
of registration and the title issued pursuant thereto in favor of respondent
Lastimado over the parcel of land in question.
5. The Lower Court erred in dismissing the petition for review of the
Republic of the Philippines.
6. The Court of Appeals erred in denying Petitioner's petition for certiorari
and mandamus.
Section 38 of the Land Registration Act (Act 496) provides:

The essential elements for the allowance of the reopening or review of a decree are: a) that the
petitioner has a real and dominical right; b) that he has been deprived thereof; c) through fraud;
d) that the petition is filed within one year from the issuance of the decree; and e) that the
property has not as yet been transferred to an innocent purchaser. 4
However, for fraud to justify the review of a decree, it must 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. 5 The following ruling spells out the difference between
extrinsic and intrinsic fraud:
Extrinsic or collateral fraud, as distinguished from intrinsic fraud, connotes any
fraudulent scheme executed by a prevailing litigant "outside the trial of a case against
the defeated party, or his agents, attorneys or witnesses, whereby said defeated party
is prevented from presenting fully and fairly his side of the case." But intrinsic fraud
takes the form of "acts of a party in a litigation during the trial such as the use of
forged instruments or perjured testimony, which did not affect the present action of the
case, but did prevent a fair and just determination of the case. 6
The fraud is one that affects and goes into the jurisdiction of the Court. 7
In its Petition for Review filed before the trial Court, petitioner alleged that fraud was committed
by private respondent when she misrepresented that she and her predecessors-in-interest had
been in possession of the land publicly, peacefully, exclusively and adversely against the whole
world as owner for more than forty years when, in fact, the subject land was in. side the former
U.S. Military Reservation, which was formally turned over to the Republic of the Philippines only
on December 22, 1965, and that she likewise contended that her rights, as derived from the
original and primitive occupants of the land in question, are capable of judicial confirmation
under existing laws, when the truth is, said parcel of land is within the public forest of Mariveles,
Bataan, and is not subject to disposition or acquisition by private persons under the Public Land
Law.

Section 38. Decree of registration, and remedies after entry of decree.

If the court after hearing finds that the applicant or adverse claimant has title as stated
in his application or adverse claim and proper for registration, a decree of confirmation
and registration shall be entered. Every decree of registration shall bind the land, and
quiet title thereto. subject only to the exceptions stated in the following section. It shall
be conclusive upon and against all persons, including the Insular Government and all
the branches thereof, whether mentioned by name in the application, notice of citation,
or included in the general description "To all whom it may concern". Such decree shall
not be opened by reason of the absence, infancy, or other disability of any person
affect thereby, nor by any proceeding in any court for reversing judgments or decrees;
subject, however, to the right of any person deprived of land or of any estate or
interest therein by decree of registration obtained by fraud to file in the competent
Court of First Instance a petition for review within one year after entry of the decree
provided no innocent purchaser for value has acquired an interest. ... 3

The trial Court ruled, and was upheld by the Court of Appeals, that no fraud was committed by
private respondent, which deprived petitioner of its day in Court as there was no showing that
she was aware of the facts alleged by the Government, so that she could not have suppressed
them with intent to deceive. The trial Court also noted that petitioner had failed to file an
opposition to the reopening of the cadastral proceedings despite notices sent not only to the
Solicitor General as required by Republic Act No. 931. but to the Bureau of Lands and the
Bureau of Forestry as well. It then concluded that "the remedy granted by section 38 of the Land
Registration Act is designed to give relief to victims of fraud, not to those who are victims of their
own neglect, inaction or carelessness, especially when no attempt is ever made to excuse or
justify the neglect." With the foregoing as the essential basis, the trial Court dismissed the
Petition for Review.
We find reversible error. Although there was an agreement by the parties to submit for resolution
the Opposition to the Petition for Review, which was treated as a motion to dismiss, the trial
Court, in the exercise of sound judicial discretion, should not have dismissed the Petition outright
but should have afforded petitioner an opportunity to present evidence in support of the facts
alleged to constitute actual and extrinsic fraud committed by private respondent. Thus, in the
case of Republic vs. Sioson, et al., 8 it was held that "the action of the lower Court in denying the

petition for review of a decree of registration filed within one year from entry of the d without
hearing the evidence in support of the allegation and claim that actual and extrinsic fraud upon
which the petition is predicated, is held to be in error, because the lower Court should have
afforded the petitioner an opportunity to prove it."
If the allegation of petitioner that the land in question was inside the military reservation at the
time it was claimed is true, then, it cannot be the object of any cadastral p nor can it be the
object of reopening under Republic Act No. 931. 9 Similarly, if the land in question, indeed forms
part of the public forest, then, possession thereof, however long, cannot convert it into private
property as it 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. 10
Even assuming that the government agencies can be faulted for inaction and neglect (although
the Solicitor General claims that it received no notice), yet, the same cannot operate to bar
action by the State as it cannot be estopped by the mistake or error of its officials or
agents. 11 Further, we cannot lose sight of the cardinal consideration that "the State as persona
in law is the juridical entity, which is the source of any asserted right to ownership in land" under
basic Constitutional Precepts, and that it is moreover charged with the conservation of such
patrimony. 12
WHEREFORE, the Decision of the Court of Appeals dated September 30, 1974, dismissing the
Petition for certiorari and mandamus filed before it, as well as the Order of the Court of First
Instance of Bataan (Branch I) dated December 20, 1968, dismissing the Petition for Review, are
hereby set aside and the records of this case hereby ed to the latter Court for further
proceedings to enable petitioner to present evidence in support of its Petition for Review.

G.R. No. 88883

January 18, 1991

respondent Liwan Consi. Feliciano Reyes instructed the cashier to go and take pictures of the
construction. Feliciano Reyes himself and other security guards went to the place of the
construction to verify and then to the police to report the matter (Rollo, Ibid.).

ATOK-BIG WEDGE MINING COMPANY, INC., petitioner,

vs.
COURT OF APPEALS, and LIWAN CONSI, respondents.

On March 1, 1984, Atok filed a complaint for forcible entry and detainer against Liwan Consi
(Rollo, Annex "C", p. 32).

Mario C.V. Jalandoni for petitioner.

Joy B. Labiaga for private respondent.

On January 29, 1987, after due hearing, the Municipal Trial Court of Itogon, presided over by
Judge Irving rendered a decision, the dispositive portion of which reads:
WHEREFORE, this case against Liwan Consi is hereby ordered dismissed. (Rollo,
Annex "A", p. 20).

PARAS, J.:
This is a petition for review on certiorari which seeks to annul and set aside; (a) the decision* of
the Court of Appeals dated March 13, 1989 in CA-G.R. No. SP No. 13528 entitled "Liwan Consi
vs. Hon. Judge Ruben C. Ayson, et al." declaring that both the petitioner and private respondent
hold possessory titles to the land in question, and (b) the resolution denying the motion for
reconsideration.
The facts of the case are as follows:
Fredia Mineral claim of about nine (9) hectares situated in Tuding, Itogon, Benguet, was located
sometime between December 25, 1930 and December 31, 1930, a period of six (6) days, by A.I.
Reynolds in accordance with the provisions of the Act of Congress of July 1, 1902, better known
as the Philippine Bill of 1902, in a so-called Declaration of Location. The said Declaration of
Location of mineral claim was duly recorded in the Office of the Mining Recorder sometime on
January 2, 1931. Fredia mineral claim, together with other mineral claims, was sold by A.I.
Reynolds to Big Wedge Mining Company, the earlier corporate name of Atok Big Wedge Mining
Company, Inc. (Atok for short; herein petitioner) in a Deed of Sale executed on November 2,
1931. Since then petitioner Atok has been in continuous and exclusive ownership and
possession of said claim up to the present (Rollo, Annex "B", p. 21).
Atok has paid the realty taxes and occupation fees for the Fredia mineral claim. The Fredia
mineral claim together with other mineral claims owned by Atok has been declared under Tax
Declaration No. 9535 and that in view of Presidential Decree No. 1214 an application for lease
was filed by Atok covering the Fredia mineral claim (Rollo,Ibid., p. 22).
On the other hand, private respondent Liwan Consi has a lot below the land of a certain Mr.
Acay at Tuding Slide, Itogon, Benguet. He constructed a house thereon sometime in 1964. The
lot is covered by Tax Declaration No. 9462. When he first constructed his house below the lot of
Mr. Acay he was told that it was not necessary for him to obtain a building permit as it was only a
nipa hut. And no one prohibited him from entering the land so he was constructing a house
thereon. It was only in January 1984 when private respondent Consi repaired the said house
that people came to take pictures and told him that the lot belongs to Atok. Private respondent
Consi has been paying taxes on said land which his father before him had occupied (Rollo, Ibid.,
p. 22).
On January 1984, the security guards of Atok informed Feliciano Reyes, Security Officer of Atok,
that a construction was being undertaken at the area of the Fredia mineral claim by private

Petitioner ATOK appealed the decision to the Regional Trial Court (RTC) of Baguio and Benguet,
Branch VI, presided over by Judge Ruben Ayson (Rollo, Petition, p. 3). On December 5, 1987,
the RTC rendered its decision, the dispositive portion of which reads:
WHEREFORE, in view of all the foregoing the decision of the Municipal Trial Court of
Itogon dated January 29, 1987 appealed from is hereby reversed and set aside and a
new one entered in its place ordering the defendant Liwan Consi and all those
claiming under him to vacate the premises of the Fredia Mineral claim at Tuding,
Itogon, Benguet immediately, and to restore possession thereof to the plaintiff Atok Big
Wedge Mining Company.
The defendant, Liwan Consi, is further ordered to remove and demolish his house
constructed in the premises of the land of Fredia mineral claim at Tuding, Benguet,
and to pay the costs.
SO ORDERED. (Rollo, p. 30).
From said decision, Liwan Consi filed with the Court of Appeals a petition for review (Rollo,
Petition, p. 4). On March 13, 1989, the Court of Appeals rendered its decision, the dispositive
portion of which reads:
WHEREFORE, judgment is hereby rendered dismissing the subject forcible entry
action. Costs against private respondent.
SO ORDERED. (Rollo, Annex "C" p. 48).
The Court of Appeals further ruled in part to wit:
The determination of whether the subject lot is mineral land or agricultural awaits the
decision of the Secretary of Natural Resources in a proceeding called for that
purpose. Thus, there is a chance that the subject property may be classified as
alienable agricultural land. At any rate, the mining company may not so readily
describe Liwan Consi as a "squatter" he also has possessory rights over the property.
Such rights may mature into ownership on the basis of long-term possession under
the Public Land Law,

Thus it is Our holding, that both Consi and ATOK are of equal legal footing with
regards the subject lot. Both hold possessory titles to the land in question the
petitioner through his long term occupancy of the same; the respondent mining firm by
virtue of its being the claim locator and applicant for a lease on the mineral claim
within which the subject lot is found. But it was established that the petitioner has
been in actual and beneficial possession of the subject lot since before the Second
World War in the concept of owner and in good faith. (Rollo, Annex "C", pp. 47-48).

It is, therefore, evident that Benguet and Atok have exclusive rights to the property in question
by virtue of their respective mining claims which they validly acquired before the Constitution of
1935 prohibited the alienation of all lands of the public domain except agricultural lands, subject
to vested rights existing at the time of its adoption. The land was not and could not have been
transferred to the private respondents by virtue of acquisitive prescription, nor could its use be
shared simultaneously by them and the mining companies for agricultural and mineral purposes
(Ibid).

On June 16, 1989, the Court of Appeals denied the motion for reconsideration filed by petitioner
ATOK (Rollo, Annex "D", p. 50).

On the matter of possession, private respondent contends that his predecessor-in-interest has
been in possession of said lot even before the war and has in fact cultivated the same.

Hence, the petition.

In the case of Republic v. Court of Appeals, 160 SCRA 288 1988, this Court held:

The main issue in this case is whether or not an individual's long term occupation of land of the
public domain vests him with such rights over the same as to defeat the rights of the owner of
that claim.
The petition is impressed with merit.
It is of no importance whether Benguet and Atok had secured a patent for as held in the Gold
Creek Mining Corporation case, for all physical purposes of ownership, the owner is not required
to secure a patent as long as he complies with the provisions of the mining laws; his possessory
right, for all practical purposes of ownership, is as good as though secured by patent (Republic
v. Court of Appeals, 160 SCRA 228 [1988]).
In the case at bar, the evidence on record pointed that the petitioner Atok has faithfully complied
with all the requirements of the law regarding the maintenance of the said Fredia Mineral Claim.
The perfection of the mining claim converted the property to mineral land and under the laws
then in force removed it from the public domain. By such act, the locators acquired exclusive
rights over the land, against even the government, without need of any further act such as the
purchase of the land or the obtention of a patent over it. As the land had become the private
property of the locators, they had the right to transfer the same, as they did, to Benguet and Atok
(Ibid.).
As in the instant petition, the record shows that the lot in question was acquired through a Deed
of Sale executed between Atok and Fredia Mineral Claim.
The legal effect of a valid location of a mining claim is not only to segregate the area
from the public domain, but to grant to the locator the beneficial ownership of the claim
and the right to a patent therefor upon compliance with the terms and conditions
prescribed by law. Where there is a valid location of mining claim, the area becomes
segregated from the public and the property of the locator. When a location of a
mining claim is perfected it has the effect of a grant by the United States of the right of
present and exclusive possession, with the right to the exclusive enjoyment of all the
surface ground as well as of all the minerals within the lines of the claim, except as
limited by the extralateral right of adjoining locators; and this is the locator's right
before as well as after the issuance of the patent. While a lode locator acquires a
vested right by virtue of his location made in compliance with the mining laws, the fee
remains in the government until patent issues. (St. Louis Mining & Mineral Co. v.
Montana Mining Co., 171 U.S. 605, 655; 43 Law ed., 320, 322)

. . . even if it be assumed that the predecessor-in-interest of the de la Rosas had

already been in possession of the subject property, their possession was not in the
concept of owner of the mining claim but of the property as agricultural land, which it
was not. The property was mineral land, and they are claiming it as agricultural land.
They were not disputing the rights of the mining locators nor where they seeking to
oust them as such and to replace them in the mining of the land. . . .
Since the subject lot is mineral land, private respondent's possession of the subject lot no matter
how long did not confer upon him possessory rights over the same.
Furthermore, Article 538 of the New Civil Code provides:
Art. 538. Possession as a fact cannot be recognized at the same time in two different
personalities except in the cases of co-possession. Should a question arise regarding
the fact of possession, the present possessor shall be preferred; if there are two
possessors, the one longer in possession; if the dates of the possession are the
same, the one who presents a title; and if all these conditions are equal, the thing shall
be placed in judicial deposit pending determination of its possession or ownership
through proper proceedings.
Since 1931 up to the present, petitioner ATOK has been in continuous and exclusive possession
of the Frediamineral claim while private respondent's possession started only sometime in 1964
when he constructed a house thereon. Clearly, ATOK has superior possessory rights than
private respondent, Liwan Consi, the former being "the one longer in possession."
It is therefore clear that from the legal viewpoint it was really petitioner who was in actual
physical possession of the property. Having been deprived of this possession by the private
respondent, petitioner has every right to sue for ejFectment.
With this ruling enunciated by the Court, it can further be declared and held that petitioner Atok
has the exclusive right to the property in question.
PREMISES CONSIDERED, the petition is GRANTED and the questioned decision of the Court
of Appeals dated March 13, 1989 is REVERSED and SET ASIDE and the decision of the
Regional Trial Court of Baguio and Benguet dated June 16, 1989 is REINSTATED.
SO ORDERED.

G.R. No. 95608 January 21, 1997

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

ROMERO, J.:
The issue in the case at bar pertains to ownership of 15 parcels of land in Tiwi, Albay which form
part of the "Tiwi Hot Spring National Park." The facts of the case are as follows.
On June 13, 1913, then Governor General of the Philippine Islands, William Cameron Forbes
issued Executive Order No. 40 which reserved for provincial park purposes some 440,530
square meters of land situated in Barrio Naga, Municipality of Tiwi, Province of Albay pursuant to
the provisions of Act 648 of the Philippine Commission. 1
Subsequently, the then Court of First Instance of Albay, 15th Judicial District, United States of
America, ordered the registration of 15 parcels of land covered by Executive Order No. 40 in the
name of Diego Palomo on December 9, 1916; 2 December 28, 3 and January 17, 1917. 4 Diego
Palomo donated these parcels of land consisting of 74,872 square meters which were allegedly
covered by Original Certificates of Title Nos. 513, 169, 176 and 173 5 to his heirs, herein
petitioners, Ignacio and Carmen Palomo two months before his death in April 1937. 6
Claiming that the aforesaid original certificates of title were lost during the Japanese occupation,
Ignacio Palomo filed a petition for reconstitution with the Court of First Instance of Albay on May
30, 1950. 7 The Register of Deeds of Albay issued Transfer Certificates of Title Nos. 3911, 3912,
3913 and 3914 sometime in October 1953. 8
On July 10, 1954 President Ramon Magsaysay issued Proclamation No. 47 converting the area
embraced by Executive Order No. 40 into the "Tiwi Hot Spring National Park," under the control,
management, protection and administration of the defunct Commission of Parks and Wildlife,
now a division of the Bureau of Forest Development. The area was never released as alienable
and disposable portion of the public domain and, therefore, is neither susceptible to disposition
under the provisions of the Public Land Law (CA 141) nor registrable under the Land
Registration Act (Act No. 496).
The Palomos, however, continued in possession of the property, paid real estate taxes
thereon 9 and introduced improvements by planting rice, bananas, pandan and coconuts. On
April 8, 1971, petitioner Carmen vda. de Buenaventura and spouses Ignacio Palomo and
Trinidad Pascual mortgaged the parcels of land covered by TCT 3911, 3912, 3913 and 3914 to
guarantee a loan of P200,000 from the Bank of the Philippine Islands.

In May 7, 1974 petitioner Carmen vda. de Buenaventura and spouses Ignacio Palomo and
Trinidad Pascual filed Civil Case No. T-143 before the then Court of First Instance of Albay for
Injunction with damages against private respondents Faustino J. Perfecto, Raffy Santillan, Boy
Ariado, Lorenzo Brocales, Salvador Doe and other Does who are all employees of the Bureau of
Forest Development who entered the land covered by TCT No. 3913 and/or TCT 3914 and cut
down bamboos thereat, totally leveling no less than 4 groves worth not less than P2,000.00.
On October 11, 1974, the Republic of the Philippines filed Civil Case No. T-176 for annulment
and cancellation of Certificates of Title involving the 15 parcels of land registered in the name of
the petitioners and subject of Civil Case T-143. Impleaded with the petitioners as defendants
were the Bank of the Philippine Islands, Legazpi Branch and the Register of Deeds of Albay.
The case against the Bank of Philippine Islands was dismissed because the loan of P200,000
with the Bank was already paid and the mortgage in its favor cancelled.
A joint trial of Civil Case T-143 and T-176 was conducted upon agreement of the parties and on
July 31, 1986, the trial court rendered the following decision:
WHEREFORE, premises considered, judgment is hereby rendered:
IN CIVIL CASE No. T-143, in favor of the defendants and against the plaintiffs,
dismissing the complaint for injunction and damages, as it is hereby DISMISSED.
Costs against the plaintiffs.
In CIVIL CASE No. T-176, in favor of the plaintiffs and against the defendants:
(1) Declaring null and void and no force and effect the Order dated September 14,
1953, as well as the Original Certificate of Titles Nos. 153, 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

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.

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) Concesion 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.

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

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

Neither do the tax receipts which were presented in evidence prove ownership of the parcels of
land inasmuch as the weight of authority is that tax declarations are not conclusive proof of
ownership in land registration cases. 18
Having disposed of the issue of ownership, we now come to the matter regarding the forfeiture
of improvements introduced on the subject lands. It bears emphasis that Executive Order No. 40
was already in force at the time the lands in question were surveyed for Diego Palomo.
Petitioners also apparently knew that the subject lands were covered under the reservation
when they filed a petition for reconstitution of the lost original certificates of title inasmuch as the
blueprint of Survey Work Order Number 21781 of Plan II-9299 approved by the Chief of the
Land Registration Office Enrique Altavas in 1953 as a true and correct copy of the Original Plan
No. II-9299 filed in the Bureau of Lands dated September 11, 1948 19 contains the following note,
"in conflict with provincial reservation." 20 In any case, petitioners are presumed to know the law
and the failure of the government to oppose the registration of the lands in question is no
justification for the petitioners to plead good faith in introducing improvements on the lots.
Finally, since 1,976 square meters of the 3,384 square meters covered by TCT 3913 fall within
the reservation, TCT 3913 should be annulled only with respect to the aforesaid area. Inasmuch
as the bamboo groves leveled in TCT 3913 and subject of Civil Case T-143, 21 were within the
perimeter of the national park, 22 no pronouncement as to damages is in order.
WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED with the modification
that TCT 3913 be annulled with respect to the 1,976 square meter area falling within the
reservation zone.
SO ORDERED.

G.R. No. L-29675

September 30, 1969

REPUBLIC OF THE PHILIPPINES, THE SUPERINTENDENT OF THE PHILIPPINE MILITARY

ACADEMY,petitioners,
vs.
HON. PIO R. MARCOS, JUDGE, Court of First Instance of Baguio City, KOSEN PIRASO,
SAMAY PIRASO, COTILENG PIRASO, PETER PARAN and MARTINA PIRASO, DAISY
PACNOS, SPOUSES ALBINO REYES and ISABEL SANTAMARIA, and ARTURO
TONGSON, respondents.
Office of the Solicitor General Felix V. Makasiar, Assistant Solicitor General Frine' C. Zaballero,
Solicitor Rosalio A. De Leon and Major Santiago O. Tomelden (Staff Judge Advocate, PMA) for
petitioner.
Crisologo Law Office for respondent Arturo Tongson.
Raul L. Correa and Francisco Ventura for respondents spouses Albino Reyes and Isabel
Santamaria.
Luis R. Gaduang for respondents Kosen Piraso, et al.

FERNANDO, J.:
It is by statute provided that all persons "claiming title to parcels of land that have been the
object of cadastral proceedings" in actual possession of the same at the time of the survey but
unable for some justifiable reason to file their claim in the proper court during the time, limit
established by law, "in case such parcels of land on account of their failure to file such claims,
have been, or are about to be declared land of the public domain by virtue of judicial
proceedings" instituted within the forty-year period next preceding June 20, 1953, the time of the
approval of this particular enactment, are granted "the right within five years" from said date to
petition for a reopening of the judicial proceedings but "only with respect to such of said parcels
of land as have not been alienated, reserved, leased, granted, or otherwise provisionally or
permanently disposed of by the Government, ... ." 1
The jurisdiction of respondent Judge Pio R. Marcos to act in accordance with Republic Act No.
931 in connection with the petition for a reopening filed by respondent Kosen Piraso, joined by
his kinsmen, likewise respondents, all surnamed Piraso, is assailed in this certiorari and
prohibition proceeding, included in which are the other respondents, Daisy Pacnos and the
spouses Albino Reyes and Isabel Santamaria, petitioners being the Republic of the Philippines
and the Superintendent of the Philippine Military Academy.
In the language of the petition: "This is an original action for the issuance of the writs
of certiorari and prohibition under Rule 65 of the Revised Rules of Court whereby herein
petitioners seek to annul and set aside: (1) The Order, dated July 13, 1967 ... denying the Motion
to Dismiss dated January 26, 1967 filed by the City Fiscal of Baguio City in behalf of oppositorsgovernment agencies, and thus insisting on assuming jurisdiction over the case (without the
requisite publication in the Official Gazette of the petition) and over the subject matter (a military
reservation); (2) The Decision, dated October 7, 1967 ... decreeing the registration of a parcel of
land with an area of 28,215.58 square meters ... within the so-called 'U.S. Fleet Naval
Reservation Center' in favor of respondent Daisy Pacnos; (3) The Order of August 2, 1968 ...
which in effect denied the Motion to Annul Decision dated February 9, 1968 filed by the Solicitor
General, and instead ordered the issuance of a decree over the same parcel of land in favor of
respondent Albino Reyes; ... and (4) The Order, dated August 24, 1968 ... allowing respondents
Kosen Piraso, et al. to adduce their evidence of alleged ownership ..., all issued in Civil
Reservation Case No. 1, LRC Record No. 211 of the Court of First Instance of Baguio City,
entitled 'In the Matter of the Petition for Reopening of Judicial Proceedings, Kosen Piraso, et al.,
petitioners'." 2
It was likewise therein alleged that Civil Reservation Case No. 1 "settled the ownership, private
and public, of the Baguio townsite, terminating with the Decision of the Court of First Instance of
Baguio City dated November 13, 1922." 3 Prior to said case, however, a military reservation
known as the U.S. Fleet Naval Rehabilitation Center consisting of Lots 140 and 141 of the
Baguio Cadastre with an aggregate area of 29 hectares, more or less, was set aside pursuant to
Executive Order No. 1254 of October 10, 1910, issued by the then President William Howard
Taft of the United States, as attested by Proclamation No. 114 of the then Governor-General W.
Cameron Forbes, and Executive Order No. 5139 of June 19, 1929, issued by the then President
Herbert Hoover, as attested by Proclamation No. 260 of the then Governor-General Dwight F.
Davis. After independence, the United States relinquished to the Republic of the Philippines all
claims to title over the military bases including the aforesaid lots, their relinquishment being
formalized by an agreement of December 6, 1956. 4 Then came this categorical assertion in the
petition that the land involved in this proceeding "is limited to what is admittedly, and by

unquestionable proof, within the so-called U.S. Fleet Naval Rehabilitation Center, Lots 140 and
141, Baguio Cadastre." 5
From a summary of the facts appearing in the Petition, the need for including the other
respondents was made clear. It was therein set forth that on May 21, 1965 the Pirasos,
respondents herein, relying on the controlling statute set forth at the opening of this opinion,
sought the reopening of Civil Reservation Case No. 1, LRC Rec. No. 211 of the Court of First
Instance of Baguio City, praying for the issuance in their favor of title to a parcel of land
designated as LRC-SWO-6132 (Lots 140 and 141, Baguio Cadastre) consisting of 290,283
square meters, more or less, situated in Baguio City. On September 11, 1965, respondent Daisy
Pacnos filed an opposition. She sought in a pleading dated March 14, 1966 to be allowed to
introduce evidence to prove her alleged right to registration of a portion of the land, consisting of
an area of 28,215.52 square meters, subject of the proceedings. This motion was granted in an
order of the respondent Judge dated May 16, 1966.
On January 26, 1967, the First Assistant City Fiscal of Baguio City, in behalf of all the
government agencies oppositors, filed a motion to dismiss the main petition and other related
petitions, alleging thereto the following grounds: (1) that the court has no jurisdiction over the
subject matter of the petition; (2) that the causes of action alleged in the petition are barred by
prior judgment or by the statute of limitations; (3) that the petition states no cause of action.
On July 13, 1967, the respondent Judge denied the said motion to dismiss. Then came on
October 7, 1967, a decision by respondent Judge, decreeing the registration of a portion of the
land (28,215.58 square meters of Lot 140, Baguio Cadastre), subject matter of the Pirasos'
petition in favor of respondent Daisy Pacnos. The Solicitor General received his copy of this
decision on December 4, 1967.1awphl.nt
There was a motion for reconsideration filed by the City Attorney of Baguio of December 9,
1967, denied by respondent Judge on December 15, as "having been filed out of time."
On January 3, 1968, the City Fiscal of Baguio City joined by petitioner Superintendent of the
Military Academy and the Director of Lands jointly filed a notice of appeal. There was on
February 7, 1968, an ex parte motion for extension of time to submit a record on appeal. An
opposition thereto was filed by counsel for respondent Daisy Pacnos. On February 15, 1968, the
Solicitor General filed a motion to annul the decision dated October 7, 1967, based on lack of
jurisdiction.
On August 2, 1968, respondent Albino Reyes filed an ex parte motion for the issuance of a
decree in his favor, having previously manifested to respondent Judge that respondent Daisy
Pacnos had transferred her right to him. On the same day, respondent Judge issued an order
considering that the motions for reconsideration and the motion to annul decision filed by the
Solicitor General and other government lawyers "have been rendered academic and of no
moment on account of the filing of the notice of appeal on January 3, 1968," but in his opinion of
no avail the time to do so having lapsed. Moreover, no record on appeal was submitted. He
likewise directed in said order the issuance of a decree to respondent "Albino Reyes, married to
Isabel Sta. Maria, Filipino, with residence at Dagupan City." Another order specifically to that
effect came from respondent Judge on the day in question. The last order of pertinence to this
petition came from respondent Judge on August 24, 1968, setting for hearing on September 11,
1968 the claim of the respondents, surnamed Piraso.

Then on October 18, 1968 came this petition for certiorari and prohibition. The next day, this
Court adopted a resolution requiring respondents to file within ten days from notice an answer,
not a motion to dismiss. A preliminary injunction was likewise issued without bond.
Subsequently, on November 8, 1968, the petitioners, through the Solicitor General, filed a
motion for leave to amend the petition, alleging that the property, "subject matter of the case
which respondent Daisy Pacnos succeeded in obtaining a favorable judgment of registration ...
and which respondents Albino Reyes and Isabel Santamaria subsequently succeeded in
securing a decree of registration" was thereafter transferred on August 16, 1968 to one Arturo
Tongson, who, thereby, would be affected by the outcome of the petition. The proposed
amendment, according to this motion, would consist of his inclusion as one of the respondents.
Accompanying his pleading is the amended petition for certiorari and prohibition. On November
21, 1968, we adopted a resolution in the following tenor: "The motion of the Solicitor General for
leave to amend petition for certiorari and prohibition with preliminary injunction in L-29675
(Republic of the Philippines, et al. vs Hon. Pio R. Marcos, etc., et al.), is [Granted]; the amended
petition for certiorari and prohibition with a prayer for preliminary injunction is hereby accepted.
Respondent Arturo Tongson is required to file, within 10 days from notice hereof, an answer (not
a motion to dismiss) to said amended petition."
In the meanwhile, even before the motion for leave to file amended petition was filed,
respondents, the Pirasos, submitted their answer on November 4, 1968. To the assertion in the
petition, fundamental in character, that the reopening sought by private respondents refers to
lands "admittedly and by unquestionable proof, within the so-called U.S. Fleet Naval Reservation
Center," the Pirasos answered in this wise: "The land in question is not a military reservation
under the Republic of the Philippines although it was formerly reserved and placed under the
control of the Navy Department for the use as Naval Hospital and for other purposes of the Navy
during the American regime (U.S. Government) pursuant to Executive Order No. 5139 (Annex
"B" of the petition), and was subsequently released or turned over to the Republic of the
Philippines in accordance with the provisions of the U.S.-Philippine Military Bases Agreement on
Dec. 6, 1956 but the same has not been reserved for military purposes by the Republic of the
Philippines." 6 They would hedge further by the disclaimer of any acceptance on their part that
the land subject of the petition forms part of the naval reservation, with the further qualification
that in any event, even if it be admitted that there is such a reservation by the government, such
lot is subject to private rights.
That respondents Pirasos could not very well explicitly deny the allegation that the lot in question
forms part of the naval reservation is quite apparent from its memorandum submitted in lieu of
oral argument filed on April 7, 1969, wherein in disputing the point raised by petitioners that the
lower court acted without jurisdiction, they stated the following: "Contrary to the allegation of the
City Attorney, we humbly state categorically that the land involved in this case is no longer a
reservation in its strict sense. It ceased to be a Naval Reservation of the United States of
America upon the termination of its sovereignty over the islands. It was formerly reserved and
placed under the control of the U.S. Naval Department for the use of Naval Hospital and for
other purposes of the Navy during the American Regime (U.S. Government) pursuant to
Executive Order No. 5139 (Annex "B" of the petition), and was subsequently released or turned
over to the Republic of the Philippines in accordance with the provisions of the U.S.-Philippine
Military Bases Agreement on December 6, 1956. The said parcel of land (Lot 140 of the Baguio
City Cadastre) until this time was not reserved for military purposes by the Republic of the
Philippines." 7

The answer of respondents, Albino Reyes and Isabel Santamaria, to the amended petition filed
on November 21, 1968, expressly admits what petitioners so emphatically insist on that this
petition before us "is limited to what is admittedly, and by unquestionable proof, within the socalled U.S. Fleet Naval Rehabilitation Center, Lots 140 and 141, Baguio Cadastre." 8 For the first
paragraph of their answer is explicitly worded thus: "1. That they admit the allegations of the
Petition with respect to the Nature of the Case ... and with respect to the Parties and
Jurisdictional Averments ... ." 9 The above assertion of the petitioner was thus given conformity
by respondents Reyes and Santamaria. Nonetheless, they would seek to blunt the force of their
admission by alleging: "That they deny the allegations in par. V-A-1 of the Petition, the truth
being that the land in question, particularly the area decreed in the name of the answering
respondents, is not part of a military reservation. The proclamation declaring certain areas to be
naval reservations of the Government of the United States (Annex B of the Petition) expressly
states that such reservations are "subject to private rights if any there be." Upon the Philippines'
becoming independent in 1946 the said areas, by virtue of Executive Agreements, reverted to
disposable lands administered by the Bureau of Lands of the Republic of the Philippines." 10
There is a similar express admission in the answer filed on December 13, 1968 by respondent
Arturo Tongson, its wording being almost identical with the answer of Albino Reyes and Isabel
Santamaria: "That in so far as they are borne out by and made part of the records of the case,
he admits the allegations of the Petition with respect to the nature of the case ... and with
respect to the Parties and Jurisdictional Averments ... ." 11 Again, this particular respondent did
attempt to weaken the force of the above admission by the assertion that the land decreed in
favor of respondent Albino Reyes is not part of the military reservation. He would justify this
seeming contradiction thus: "At any rate, when said areas were turned over to the Philippine
Government by virtue of the U.S.-Philippine Military Bases Agreement, the land in question
reverted to the disposable lands administered by the Bureau of Lands of the Republic of the
Philippines." 12
In the light of the allegation in the petition and the admissions made in the answers of
respondents, the Pirasos, Albino Reyes and Isabel Santamaria as well as Arturo Tongson, even
as sought to be qualified, it would seem to be fairly obvious that the lots in question sought to be
reopened in the proceeding before respondent Judge Marcos form part and parcel of a naval
reservation. It cannot escape attention that the above private respondents did try by highly
sophistical reasoning, invoking distinctions far from persuasive, to avoid the legal effect of the
admissions as to the location of the disputed lots within a reservation. They must have realized
that unless successful in this attempt, doomed by failure from the outset, the facts being simply
against them, the jurisdiction of respondent Court can, as petitioners have done, be successfully
impugned. That is what petitioners did; they must be sustained.
1. Republic Act No. 931 speaks in a manner far from ambiguous. It is quite explicit and
categorical. Only persons "claiming title to parcels of land that have been the object of cadastral
proceedings" are granted the right to petition for a reopening thereof if the other conditions
named therein are successfully met. It cannot admit of doubt, therefore, that if the parcels of
land were not the object of cadastral proceedings, then this statute finds no application.
Considering that as far back as October 10, 1910, the then President of the United States,
William H. Taft, issued an executive order reserving for naval purposes the lots now disputed,
they could not have been the object of the cadastral proceeding involving the Baguio townsite
reservation, decided only on November 13, 1922.13

The Cadastral Act 14 was enacted on February 11, 1913, taking effect on its passage. As is made
clear in the first section thereof, when public interest requires that titles to any land be settled
and adjudicated, in the opinion of the then executive, the Governor General, he could order the
Director of Lands or a private surveyor named by the landowners, with the approval of the
Director of Lands, to make a survey and plan of such lands. 15 Clearly, it does not include the
survey of lands declared as reservations.
An earlier act, enacted as far back as 1903, 16 specifically governs the subject matter of
reservations. As provided therein: "All lands or buildings, or any interest therein, within the
Philippine Islands lying within the boundaries of the areas now or hereafter set apart and
declared to be military reservations shall be forthwith brought under the operations of the Land
Registration Act, and such of said lands, buildings, and interests therein as shall not be
determined to be public lands shall become registered land in accordance with the provisions of
said Land Registration Act, under the circumstances hereinafter stated." The validity of this
statute was sustained as against the allegation that there was a violation of the due process
clause, in a 1910 decision, Jose v. Commander of the Philippine Squadron. 17
In a 1918 decision, this Court had occasion to indicate clearly that the proceeding under this
statute, while analogous too, is not covered by the Cadastral Act. Thus: "It will thus be seen that
Act No. 627 contemplates a sort of cadastral proceeding wherein private owners may be forced
to come in and register their titles, under penalty of forfeiture of all right in the land included in
the reservation in case they fail to act. The validity of a law of this character cannot be
questioned; and this court has uniformly upheld the Act now under consideration." 18
What is even more conclusive as to the absence of any right on the part of the private
respondents to seek a reopening under Republic Act No. 931 is our ruling in Government v.
Court of First Instance of Pampanga, a 1926 decision.19 We there explicitly held: "The
defendant's contention that the respondent court, in a cadastral case, has jurisdiction to order
the registration of portions of a legally established military reservation cannot be sustained. The
establishment of military reservations is governed by Act No. 627 of the Philippine Commission
and Section 1 of that Act provides that 'All lands or buildings, or any interest therein, within the
Philippine Islands lying within the boundaries of the areas now or hereafter set apart and
declared to be military reservations shall be forthwith brought under the operations of the Land
Registration Act, ... .' "
The conclusion is therefore inescapable that, as contended by petitioners, respondent Judge is
devoid of jurisdiction to pass upon the claim of private respondents invoking the benefits of
Republic Act No. 931.
2. This lack of jurisdiction on the part of respondent Judge is made more patent by another
specific restriction of the right of a person to seek reopening under this statute. For the power of
the Court to order such reopening is limited "to such of said parcels of land as have not been
alienated, reserved, leased, granted, or otherwise provisionally or permanently disposed of by
the Government ... ." 20 Included in the petition is an executive order of the then President
Herbert Hoover of June 19, 1929, declaring to be a naval reservation of the Government of the
United States "that tract of land known as lot no. 141, residence Section D, Baguio naval
reservation, heretofore reserved for naval purposes ... ." If there were still any lingering doubt,
that ought to be removed by this reaffirmation of a presidential determination, then binding and

conclusive as we were under American sovereignty, that the lot in question should be a naval
reservation.
3. The private respondents are thus bereft of any right which they could assert under Republic
Act No. 931. Such an enactment is the basis of whatever standing that would justify their
reliance on the specific power granted courts of first instance to reopen cadastral proceedings.
Such jurisdiction is thus limited and specific. Unless a party can make it manifest by express
language or a clear implication from the wording of the statute too strong to be resisted, he may
not set in motion the judicial machinery under such specific grant of authority. This, private
respondents have failed to do as the statute in terms that are crystal clear and free from
ambiguity denies them such a right. Petitioners have made out their case for certiorari and
prohibition.
WHEREFORE, the writ of certiorari is granted annulling and setting aside the order of
respondent Judge of July 13, 1967, denying the motion to dismiss dated January 26, 1967 filed
by the City Fiscal of Baguio City in behalf of oppositors-government agencies; his decision dated

October 7, 1967, decreeing the registration of a parcel of land with an area of 28,215.58 square
meters within Lot 140, Baguio Cadastre, or within the so-called "U.S. Fleet Naval Reservation
Center" in favor of respondent Daisy Pacnos; his order of August 2, 1968 which in effect denied
the motion to annul decision dated February 9, 1968 filed by the Solicitor General, and instead
ordered the issuance of a decree over the same parcel of land in favor of respondent Albino
Reyes; and his order, dated August 24, 1968 allowing respondents Kosen Piraso, et al, to
adduce their evidence of alleged ownership. The writ of prohibition is likewise granted
perpetually restraining respondent Judge from further taking cognizance of and further assuming
jurisdiction over the reopening of Civil Reservation Case No. 1 LRC Rec. No. 211 as sought by
the private respondents. The preliminary injunction issued is hereby made permanent. With
costs against private respondents.